3/1/99
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
This Amended and Restated Employment Agreement is made by and between
CORDANT TECHNOLOGIES INC. (the "Company") and ____________________ (the
"Executive"), and is dated as of the 1st day of March 1999.
The Board of Directors of the Company (the "Board"), has determined
that it is in the best interests of the Company and its stockholders to
assure that the Company will have the continued dedication of the
Executive, notwithstanding the possibility, threat, or occurrence of a
Change of Control (as defined below) of the Company. The Board believes it
is imperative to diminish the inevitable distraction of the Executive by
virtue of the personal uncertainties and risks created by a pending or
threatened Change of Control and to encourage the Executive's full
attention and dedication to the Company currently and in the event of any
threatened or pending Change of Control, and to provide the Executive with
compensation and benefits arrangements upon a Change of Control which
ensure that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other
corporations. Therefore, in order to accomplish these objectives, the Board
has caused the Company to enter into this Amended and Restated Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1 . CHANGE OF CONTROL DATE. The "Change of Control Date" shall be the
first date on which a Change of Control (as defined in Section 2) occurs.
Anything in this Agreement to the contrary notwithstanding, if a Change of
Control occurs and the Company has terminated the Executive's employment
(other than under circumstances which would constitute Cause or Disability
(as defined below)) or the Executive has
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terminated his employment under circumstances which would constitute Good
Reason hereunder if such termination occurred the day after the Change of
Control Date, and if (A) it is reasonably demonstrated by the Executive (i)
that such termination of employment was at the request of a third party who
has taken steps reasonably calculated to effect the Change of Control or
(ii) that the Company's actions otherwise arose in connection with or
anticipation of the Change of Control or (B) such termination is within six
months of the Change of Control Date, then for all purposes of this
Agreement the "Change of Control Date" shall mean the date immediately
prior to the date of such termination of employment.
2. CHANGE OF CONTROL. For the purpose of this Agreement, a
"Change of Control" shall mean:
(a) the acquisition by any individual, entity or group (within
the meaning of sections 13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "exchange act")) (a "person") of
beneficial ownership (within the meaning of rule 13d-3 promulgated
under the exchange act) of 20% or more of either (i) the then
outstanding shares of common stock of the company (the "outstanding
company common stock") or (ii) the combined voting power of the then
outstanding voting securities of the company entitled to vote
generally in the election of directors (the "outstanding company
voting securities"); provided, however, that for purposes of this
subsection (a), the following acquisitions shall not constitute a
change of control: (i) any acquisition directly from the company, (ii)
any acquisition by the company, (iii) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the company
or any corporation controlled by the company or (iv) any acquisition
by any corporation pursuant to a transaction which complies with
clauses (i), (ii) and (iii) of subsection (c) of this section 2; or
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(b) individuals who, as of the date hereof, constitute the board
(the "incumbent board") cease for any reason to constitute at least a
majority of the board; provided, however, that any individual becoming
a director subsequent to the date hereof 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 an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a person other than the board;
or
(c) consummation of a reorganization, merger or consolidation or
sale or other disposition of all or substantially all of the assets of
the company (a "business combination"), in each case, unless,
following such business combination, (i) all or substantially all of
the individuals and entities who were the beneficial owners,
respectively, of the outstanding company common stock and outstanding
company voting securities immediately prior to such business
combination beneficially own, directly or indirectly, more than 50%
of, respectively, the then outstanding shares of common stock and the
combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such business combination
(including, without limitation, a corporation which as a result of
such transaction owns the company or all or substantially all of the
company's assets either directly or through one or more subsidiaries)
in substantially the same proportions as their ownership, immediately
prior to such business combination of the outstanding company common
stock and outstanding company voting securities, as the case may be,
(ii) no
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person (excluding any corporation resulting from such business
combination or any employee benefit plan (or related trust) of the
company or such corporation resulting from such business combination)
beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such business combination or the combined
voting power of the then outstanding voting securities of such
corporation except to the extent that such ownership existed prior to
the business combination and (iii) at least a majority of the members
of the board of directors of the corporation resulting from such
business combination were members of the incumbent board at the time
of the execution of the initial agreement, or of the action of the
board, providing for such business combination; or
(d) approval by the shareholders of the company of a complete
liquidation or dissolution of the company.
3. EMPLOYMENT PERIOD. The Company hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the
employ of the Company, for the period commencing on the Change of Control
Date and ending on the third anniversary of such date (the "Employment
Period").
4. TERMS OF EMPLOYMENT. (a) POSITION AND DUTIES. (i) During the
Employment Period, (A) the Executive's position (including status, offices,
titles and reporting relationships), authority, duties and responsibilities
shall be at least commensurate in all material respects with the most
significant of those held, exercised and assigned at any time during the
90-day period immediately preceding the Change of Control Date and (B) the
Executive's services shall be performed at the location (the "Principal
Business Location") where the Executive was employed immediately preceding
the Change of Control Date or at any office or location which does not
result in a material increase in the distance or time of commutation
between the Executive's
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place of primary residence at the Change of Control Date and the
Executive's Principal Business Location, or materially adversely affect the
mode of such commutation.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time during normal business hours
to the business and affairs of the Company and, to the extent necessary to
Discharge the responsibilities assigned to the Executive hereunder, to use
the Executive's reasonable best efforts to perform faithfully and
efficiently such responsibilities. During the Employment Period it shall
not be a violation of this Agreement for the Executive to (A) serve on
corporate, civic or charitable boards or committees, (B) deliver lectures,
fulfill speaking engagements or teach at educational institutions and (C)
manage personal investments, so long as such activities do not
significantly interfere with the performance of the Executive's
responsibilities as an employee of the Company in accordance with this
Agreement. It is expressly understood and agreed that to the extent that
any such activities have been conducted by the Executive prior to the
Change of Control Date, the continued conduct of such activities (or the
conduct of activities similar in nature and scope thereto) subsequent to
the Change of Control Date shall not thereafter be deemed to interfere with
the performance of the Executive's responsibilities to the Company.
(b) COMPENSATION, BENEFITS AND SUPPORT STAFF. (i) BASE SALARY.
During the Employment Period, the Executive shall receive in accordance
with the Company's payroll practices at the Change of Control Date an
annual base salary ("Annual Base Salary"), at least equal to twelve times
the highest monthly base salary paid or payable to the Executive by the
Company and its affiliated companies in respect of the twelve-month period
immediately preceding the month in which the Change of Control Date occurs.
During the Employment Period, the Annual Base Salary shall be reviewed at
least annually and shall be increased at any time and from time to time as
shall be substantially consistent with increases in base salary awarded in
the ordinary course of business to other peer executives of the Company and
its affiliated
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companies but in no event shall the annual increase in Base Salary be less
than a percentage at least equal to the increase, if any, in the
cost-of-living shown on the Consumer Price Index for the area in which the
Principal Business Location is located, published by the Bureau of Labor
Statistics of the United States Department of Labor for the immediately
preceding twelve-month period (or, if no such Consumer Price Index is then
published, any successor index thereto). Any increase in Annual Base Salary
shall not serve to limit or reduce any other obligation to the Executive
under this Agreement. Annual Base Salary shall not be reduced after any
such increase and the term Annual Base Salary as utilized in this Agreement
shall refer to Annual Base Salary as so increased. As used in this
Agreement, the term "affiliated companies" includes any company controlled
by, controlling or under common control with the Company.
(ii) BONUS. (A) In addition to Annual Base Salary, the Executive
shall be awarded, for each fiscal year beginning or ending during the
Employment Period, an annual bonus (the "Annual Bonus") in cash at least
equal to the highest annualized (for any fiscal year consisting of less
than twelve full months or with respect to which the Executive has been
employed by the Company for less than twelve full months) bonus paid or
payable (including any amount subject to a deferral election) to the
Executive by the Company and its affiliated companies in respect of the
three fiscal years immediately preceding the fiscal year in which the
Change of Control Date occurs (the "Recent Annual Bonus"). Each such Annual
Bonus shall be paid no later than the end of the third month of the fiscal
year next following the fiscal year for which the Annual Bonus is awarded,
unless the Executive shall elect to defer the receipt of such Annual Bonus.
(B) In addition to Annual Base Salary and the Annual Bonus, the
Executive shall be paid, for each fiscal year beginning or ending during
the Employment Period, a long-term bonus (the "long-term Bonus") in cash at
least equal to the average long-term incentive bonus (the "Recent Long-Term
Bonus") paid or payable to the Executive by the Company under the Company's
Long-Term Incentive Compensation
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Plan (or any predecessor or successor plan thereto (the "LTIP") in respect
of the last three completed performance cycles ending with the performance
cycle ending in the fiscal year preceding the fiscal year in which the
Change of Control Date occurs (or, if less, in respect of the number of
completed performance cycles for which the Executive has received a
long-term bonus). If the Executive was not a participant in the LTIP in one
of such cycles, but is, at the Change of Control Date, a participant in the
LTIP, the Recent long-term Bonus shall be equal to the amount payable to
such Executive under the LTIP upon a Change of Control, divided by the
number of performance cycles in which the Executive was participating at
such time. For the fiscal year in which the Change of Control Date occurs
and for the next two fiscal years, any such payment may be reduced (but not
below zero) by the amount payable to the Executive under the terms of the
LTIP with respect to the performance cycle that otherwise would have ended
in such fiscal year upon the Change of Control. Each such long-term Bonus
shall be paid pursuant to a plan which has three-year performance cycles
and is otherwise substantially similar to the LTIP and shall be paid no
later than the end of the third month of the fiscal year next following the
fiscal year for which the long-term Bonus is awarded, unless the Executive
shall elect to defer the receipt of such long-term Bonus.
(iii) INCENTIVE, SAVINGS AND RETIREMENT PLANS. In addition to
Annual Base Salary, Annual Bonus and Long-term Bonus payable as hereinabove
provided, the Executive shall be entitled to participate during the
Employment Period in all other incentive, savings and retirement plans,
practices, policies and programs applicable to other peer executives of the
Company and its affiliated companies, but in no event shall such plans,
practices, policies and programs provide the Executive with incentive,
savings and retirement benefits opportunities, in each case, less
favorable, in the aggregate, than the most favorable of those provided by
the Company and its affiliated companies for the Executive under such
plans, practices, policies and programs as in effect at any time during the
90-day period immediately preceding the Change of Control Date.
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(iv) WELFARE BENEFIT PLANS. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be
eligible for participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the Company and
its affiliated companies (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life, group
life, accidental death and travel accident insurance plans and programs)
and applicable to other peer executives of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and
programs provide benefits which are less favorable, in the aggregate, than
the most favorable of such plans, practices, policies and programs in
effect at any time during the 90-day period immediately preceding the
Change of Control Date.
(v) EXPENSES. During the Employment Period, the Executive shall
be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the most favorable policies,
practices and procedures of the Company and its affiliated companies in
effect at any time during the 90-day period immediately preceding the
Change of Control Date or, if more favorable to the Executive, as in effect
at ANY time thereafter with respect to other peer executives of the Company
and its affiliated companies.
(vi) OTHER EXECUTIVE BENEFITS. During the Employment Period, the
Executive shall be entitled to other executive benefits including, without
limitation, club memberships and annual physicals, in accordance with the
most favorable plans, practices, programs and policies of the Company and
its affiliated companies in effect at any time during the 90-day period
immediately preceding the Change of Control Date or, if more favorable to
the Executive, as in effect at any time thereafter with respect to other
peer executives of the Company and its affiliated companies.
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(vii) OFFICE, COMPANY CAR AND SUPPORT STAFF. During the
Employment Period, the
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, to exclusive personal secretarial and
other assistance, and to a Company-provided car, at least equal to the most
favorable of the foregoing provided to the Executive by the Company and its
affiliated companies at any time during the 90-day period immediately
preceding the Change of Control Date or, if more favorable to the
Executive, as provided at any time thereafter with respect to other peer
executives of the Company and its affiliated companies.
(viii) VACATION. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most favorable
plans, policies, programs and practices of the Company and its affiliated
companies as in effect at any time during the 90-day period immediately
preceding the Change of Control Date or, if more favorable to the
Executive, as in effect at any time thereafter with respect to other peer
executives of the Company and its affiliated companies with similar lengths
of service.
5. TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY. The
Executive's employment shall terminate automatically upon the Executive's
death during the Employment Period. If the Company determines in good faith
that the Disability of the Executive has occurred during the Employment
Period (pursuant to the definition of "Disability" set forth below), it may
give to the Executive written notice in accordance with Section 12(b) of
this Agreement of its intention to terminate the Executive's employment. In
such event, the Executive's employment with the Company shall terminate
effective on the 30th day after receipt of such notice by the Executive
(the "Disability Change of Control Date"), provided that, within the 30
days after such receipt, the Executive shall not have returned to full-time
performance of the Executive's duties. For purposes of this Agreement,
"Disability" means the absence of the Executive from the Executive's duties
with the Company on a Full-time basis for 180 consecutive business days as
a result of incapacity due to mental or physical illness
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which is determined to be total and permanent by a physician selected by
the Company or its insurers and acceptable to the Executive or the
Executive's legal representative (such agreement as to acceptability not to
be withheld unreasonably).
(b) CAUSE. The Company may terminate the Executive's employment
during the Employment Period for "Cause." For purposes of this Agreement,
"Cause" means (i) an act or acts of personal dishonesty taken by the
Executive and intended to result in substantial personal enrichment of the
Executive at the expense of the Company, (ii) repeated violations by the
Executive of the Executive's obligations under Section 4(a) of this
Agreement which are demonstrably willful and deliberate on the Executive's
part and which are not remedied in a reasonable period of time after
receipt of written notice from the Company or (iii) the conviction of the
Executive of a felony involving moral turpitude. For purposes of this
Section 5(b), no act, or failure to act, on the Executive's part shall be
considered "willful" unless done, or omitted to be done, by him not in good
faith and without reasonable belief that his action or omission was in the
best interest of the Company. Notwithstanding the foregoing, the Executive
shall not be deemed to have been terminated for Cause unless and until
there shall have been delivered to the Executive a copy of a resolution,
duly adopted by the affirmative vote of not less than three-quarters of the
entire membership of the Board at a meeting of the Board called and held
for the purpose (after reasonable notice to the Executive and an
opportunity for him, together with his counsel, to be heard before the
Board), finding that in the good faith opinion of the Board, the Executive
was guilty of conduct set forth above in clause (i), (ii), or (iii) of the
second sentence of this Section 5(b) and specifying the particulars thereof
in detail.
(c) GOOD REASON. The Executive's employment may be terminated
during the Employment Period by the Executive for Good Reason. For purposes
of this Agreement, "Good Reason" means:
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(i) the assignment to the Executive of any duties inconsistent in
any respect with the Executive's position (including status, offices,
titles and reporting relationships), authority, duties or
responsibilities as contemplated by Section 4(a) of this Agreement, or
any other action by the Company which results in a diminution in such
position, authority, duties or responsibilities, excluding for this
purpose an isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after receipt
of notice thereof given by the Executive;
(ii) any failure by the Company to comply with any of the
provisions of Section 4(b) of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(iii) the Company's requiring the Executive to be based at any
office or location other than that described in Section 4(a)(i)(B)
hereof;
(iv) any purported termination by the Company of the Executive's
employment otherwise than as expressly permitted by this Agreement; or
(v) any failure by the Company to comply with and satisfy Section
11(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination
of "Good Reason" made by the Executive shall be conclusive. Anything in
this Agreement to the contrary notwithstanding, a termination by the
Executive for any reason during the 30-day period immediately following the
first anniversary of the Change of Control Date shall be deemed to be a
termination for Good Reason for all purposes of this Agreement.
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(d) NOTICE OF TERMINATION. Any termination by the Company for
Cause or by the Executive for Good Reason shall be communicated by Notice
of Termination to the other party hereto given in accordance with Section
12(b) of this Agreement. For purposes of this Agreement, a "Notice of
Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis
for termination of the Executive's employment under the provision so
indicated and (iii) if the Date of Termination (as defined below) is other
than the date of receipt of such notice, specifies the termination date
(which date shall be not more than fifteen days after the giving of such
notice). The failure by the Executive to set forth in the Notice of
Termination any fact or circumstance which contributes to a showing of Good
Reason shall not waive any right of the Executive hereunder or preclude the
Executive from asserting such fact or circumstance in enforcing the
Executive's rights hereunder.
(e) DATE OF TERMINATION. "Date of Termination" means the date of
receipt of the Notice of Termination or any later date specified therein,
as the case may be; provided, however, that (i) if the Executive's
employment is terminated by the Company other than for Cause or Disability,
the Date of Termination shall be the date on which the Company notifies the
Executive of such termination and (ii) if the Executive's employment is
terminated by reason of death or Disability, the Date of Termination shall
be the date of death of the Executive or the Disability Change of Control
Date, as the case may be.
6. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) DEATH. If the Executive's employment terminates by reason of
the Executive's death during the Employment Period, this Agreement shall
terminate without further obligations to the Executive's legal
representatives under this Agreement, other than the following obligations:
(i) the Executive's Annual Base Salary
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through the Date of Termination, to the extent not theretofore paid, (ii)
any amount payable to the Executive pursuant to Section 4(b)(ii) hereof in
respect of the most recently completed fiscal year, to the extent not
theretofore paid, (iii) if the Change of Control Date occurred after the
end of the most recently completed fiscal year and no Annual Bonus was paid
to the Executive in respect of such period, an amount equal to the Recent
Annual Bonus, (iv) the product of the greater of the Annual Bonus paid or
payable (and annualized for any fiscal year consisting of less than twelve
full months or for which the Executive has been employed for less than
twelve full months) to the Executive for the most recently completed fiscal
year during the Employment Period, if any, or the Recent Annual Bonus (such
greater amount hereafter referred to as the "Highest Annual Bonus") and a
fraction, the numerator of which is the number of days in the current
fiscal year through the Date of Termination, and the denominator of which
is 365, (v) for each performance cycle under the LTIP or any successor
thereto which has commenced on or after the Change of Control Date, the
product of the greater of the Long-term Bonus paid or payable to the
Executive for the most recently completed performance cycle during the
Employment Period, if any, or the Recent Long-Term Bonus (such greater
amount hereafter referred to as the "Greater Long-Term Bonus") and a
fraction, the numerator of which is the number of days which have elapsed
in the performance cycle through the Date of Termination, and the
denominator of which is 1095, and (vi) any compensation previously deferred
by the Executive (together with any accrued interest thereon) and not yet
paid by the Company and any accrued vacation pay not yet paid by the
Company (the amounts described in paragraphs (i) through (vi) hereof are
hereinafter referred to as "Accrued Obligations"). All Accrued Obligations
shall be paid to the Executive's estate or beneficiary, as applicable, in a
lump sum in cash within 30 days of the Date of Termination. Anything in
this Agreement to the contrary notwithstanding, the Executive's family
shall be entitled to receive benefits at least equal to the most favorable
benefits provided by the Company and any of its affiliated companies to
surviving families of peer executives of the Company and such affiliated
companies under such plans, programs, practices and policies relating to
family death benefits, if any, as in effect with respect to other peer
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executives and their families at any time during the 90-day period
immediately preceding the Change of Control Date or, if more favorable to
the Executive and/or the Executive's family, as in effect on the date of
the Executive's death with respect to other peer executives of the Company
and its affiliated companies and their families.
(b) DISABILITY. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Executive,
other than for Accrued Obligations. All Accrued Obligations shall be paid
to the Executive in a lump sum in cash within 30 days of the Date of
Termination. Anything in this Agreement to the contrary notwithstanding,
the Executive shall be entitled after the Disability Change of Control Date
to receive disability and other benefits at least equal to the most
favorable of those provided by the Company and its affiliated companies to
disabled executives and/or their families in accordance with such plans,
programs, practices and policies relating to disability, if any, as in
effect with respect to other peer executives and their families at any time
during the 90-day period immediately receding the Change of Control Date
or, if more favorable to the Executive and/or the Executive's family, as in
effect at any time thereafter with respect to other peer executives of the
Company and its affiliated companies and their families.
(c) CAUSE; OTHER THAN FOR GOOD REASON. If the Executive's
employment shall be terminated for Cause during the Employment Period or if
the Executive terminates employment during the Employment Period other than
for Good Reason, this Agreement shall terminate without further obligations
to the Executive other than the obligation to pay to the Executive Annual
Base Salary through the Date of Termination plus the amount of any
compensation previously deferred by the Executive and accrued vacation pay,
in each case to the extent theretofore unpaid.
(d) GOOD REASON; OTHER THAN FOR CAUSE OR DISABILITY. If, during
the Employment Period, the Company shall terminate the Executive's
employment other
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than for Cause or Disability, or if the Executive shall terminate
employment under this Agreement for Good Reason:
(i) the Company shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the
following amounts:
A. the product of (x) three and (y) the sum of (i) Annual
Base Salary, (ii) the Highest Annual Bonus and (iii) the Greater
Long-Term Bonus; and B. all Accrued Obligations; and C. the
Executive shall be entitled to receive a lump-sum retirement
benefit equal to the difference between (a) the actuarial
equivalent of the benefit under the Cordant Technologies Inc.
Pension Plan and the Cordant Technologies Inc. Excess Pension
Plan as in effect on the Change of Control Date or any successor
plan which provides more favorable benefits to the Executive (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 this Agreement
for three years, assuming for this purpose that all accrued
benefits are fully vested, and (b) the actuarial equivalent of
the Executive's actual benefit (paid or payable), if any, under
the Retirement Plans; and
(ii) for the remainder of the Employment Period, or such longer
period as any plan, program, practice or policy may provide, the
Company shall continue benefits to the Executive and/or the
Executive's family at least equal to those which would have been
provided to them in accordance with the plans, programs, practices and
policies described in Section 4(b)(iv) and (vi) of this Agreement if
the Executive's employment had not been terminated in accordance with
the most favorable plans,
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practices, programs or policies of the Company and its affiliated
companies applicable to other peer executives and their families
during the 90-day period immediately preceding the Change of Control
Date or, if more favorable to the Executive, as in effect at any time
thereafter with respect to other peer executives of the Company and
its affiliated companies and their families. For purposes of
determining the Executive's age and length of service at the time of
his termination of employment in order to determine eligibility of the
Executive for retiree benefits pursuant to such plans, practices,
programs and policies, the Executive shall be considered to have
remained employed until the end of the Employment Period and to have
terminated employment on the last day of such period; provided,
however, that the Executive shall be entitled to the more favorable of
the retiree benefits in effect on the Date of Termination or the
retiree benefits in effect on the date that would have been the last
date of the Employment Period if the Executive had remained employed.
7. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive or other plans, programs, policies or practices, provided
by the Company or any of its affiliated companies and for which the
Executive may qualify, nor shall anything herein limit or otherwise affect
such rights as the Executive may have under any other agreements with the
Company or any of its affiliated companies. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any
plan, policy, practice or program of the Company or any of its affiliated
companies at or subsequent to the Date of Termination shall be payable in
accordance with such plan, policy, practice or program except as explicitly
modified by this Agreement.
8. FULL PAYMENTS. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action
which the Company may have against the Executive or others. In no
event shall the Executive be
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obligated to seek other employment or take any other action by
way of mitigation of the amounts payable to the Executive under
any of the provisions of this Agreement. The Company agrees to
pay, from time to time promptly upon invoice, to the full extent
permitted by law, all legal fees and expenses which the Executive
may reasonably incur as a result of any contest, question or
controversy (regardless of the outcome thereof and whether or not
litigation is involved) by the Company, the Executive or others
over the validity or enforceability of, or liability under, any
provision of this Agreement or any guarantee of performance
thereof (including as a result of any contest by the Executive
about the amount of any payment pursuant to Section 9 of this
Agreement).
9. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that any payment or distribution by the
Company to or for the benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or any
other compensation plan, program or arrangement including but not limited
to the proceeds from the exercise of stock option grants the Executive is
entitled to receive on the date of a Change of Control or otherwise, but
determined without regard to any additional payments required under this
Section 9) (a "Payment") would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986, as amended (the "Code")
or any interest or penalties are incurred by the Executive with respect to
such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"),
then the Executive shall be entitled to receive an additional payment (a
"Gross-Up Payment") in an amount such that after payment by the Executive
of all taxes (including any interest or penalties imposed with respect to
such taxes), including without limitation, any income taxes (and any
interest and penalties imposed with
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respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
(b) Subject to the provisions of Section 9(c) below, all
determinations required to be made under this Section 9, 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 Ernst & Young (the "Accounting Firm") which
shall provide detailed supporting calculations both to the Company and the
Executive within 15 business days of the receipt of notice from the
Executive that there has been a Payment, or such earlier time as is
requested by the Company. In the event that the Accounting Firm is serving
(or has, during the three years preceding the Effective Date, served) as
accountant or auditor for the individual, entity or group effecting the
Change of Control, the 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 the Company. Any Gross-Up Payment, as determined pursuant to this
Section 9, shall be paid by the Company to the Executive within five days
of the receipt of the Accounting Firm's determination. If the Accounting
Firm determines that no Excise Tax is payable by the Executive, it shall
furnish the Executive with a written opinion that failure to report the
Excise Tax on the Executive's applicable federal income tax return would
not result in the imposition of a negligence or similar penalty. Any
determination by the Accounting Firm shall be binding upon the Company and
the Executive. As a result of the uncertainty in the application of Section
4999 of the Code at the time of the initial determination by the Accounting
Firm hereunder, it is possible that Gross-Up Payments which will not have
been made by the Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 9(c) and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting
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Firm shall determine the amount of Underpayment that has occurred and any
such Underpayment shall be promptly paid by the Company to or for the
benefit of the Executive.
(c) The Executive shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would require
the payment by the Company of the Gross-Up Payment. Such notification shall
be given as soon as practicable but no later than ten business days after
the Executive is informed in writing of such claim and shall apprise the
Company of the nature of such claim and the date on which such claim is
requested to be paid. The Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which it gives such
notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company
notifies the Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company 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 the
Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any Proceedings
relating to such claim;
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provided, however, that the Company 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 the 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 9(c), the Company
shall control all proceedings taken in connection with such contest and, at
its sole option, may pursue or forgo 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 the Executive to
pay the tax claimed and xxx for a refund or contest the claim in any
permissible manner, and the 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 the Company shall
determine; provided, however, that if the Company directs the Executive to
pay such claim and xxx for a refund, the Company shall advance the amount
of such payment to the Executive, on an interest-free basis and shall
indemnify and hold the 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 further provided that any
extension of the statute of limitations relating to payment of taxes for
the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder
and the 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.
(d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 9(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject
to the Company's complying with the requirements of Section 9(c)) promptly
pay to the Company the
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amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Executive of
an amount advanced by the Company pursuant to Section 9(c), a determination
is made that the Executive shall not be entitled to any refund with respect
to such claim and the Company does not notify the Executive in writing of
its intent to contest such denial of refund prior to the expiration of 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.
10. CONFIDENTIAL INFORMATION. (a) During the period of his employment
hereunder, the Executive shall not, without the written consent of the
Chief Executive Officer, disclose to any person, other than an employee of
the Company or another person to whom disclosure is reasonably necessary or
appropriate in connection with the performance by the Executive of his
duties as an executive of the Company, any material confidential
information obtained by him while in the employ of the Company with respect
to any of the Company's products, improvements, formulas, designs or
styles, processes, customers, methods of distribution or methods of
manufacture, the disclosure of which he knows will be materially damaging
to the Company; PROVIDED, HOWEVER, that confidential information shall not
include any information known generally to the public (other than as a
result of unauthorized disclosure by the Executive) or any information of a
type not otherwise considered confidential by persons engaged in the same
business or a business similar to that conducted by the Company. For the
period ending two years following the Date of Termination, the Executive
shall not disclose any confidential information of the type described above
except as determined by him to be reasonably necessary in connection with
any business or activity in which he is then engaged.
(b) Any and all inventions made, developed or created by the Executive
(whether at the request or suggestion of the Company or otherwise, whether
alone or in conjunction with others, and whether during regular hours of
work or
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otherwise) during the period of his employment by the Company, which may be
directly or indirectly useful in, or relate to, the business of or research
and development being carried out by the Company or any of its subsidiaries
or affiliates, will be promptly and fully disclosed by the Executive to an
appropriate executive officer of the Company and shall be the Company's
exclusive property as against the Executive, and the Executive will
promptly deliver to an appropriate executive officer of the Company all
papers, drawings, models, data and other material relating to any invention
made, developed or created by him as aforesaid.
(c) The Executive will, upon the Company's request and without any
payment therefor, execute any documents necessary or advisable in the
opinion of the Company's counsel to direct issuance of patents to the
Company with respect to such inventions as are to be the Company's
exclusive property as against the Executive under Section 10(b) above or to
vest in the Company title to such inventions as against the Executive,
PROVIDED, HOWEVER, that the expense of securing any such patent will be
borne by the Company.
(d) The foregoing provisions of this Section 10 shall be binding upon
the Executive's heirs, successors and legal representatives.
(e) In no event shall an asserted violation of the provisions of this
Section 10 constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
11. SUCCESSORS. (a) This Agreement is personal to the Executive and
without the prior written consent of the Company shall not be assignable by
the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be
enforceable by the Executive's legal representatives.
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(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company will require any successor (whether direct or
indirect, by purchase, merger consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean
the Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
12. MISCELLANEOUS. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws. The captions of this Agreement
are not part of the provisions hereof and shall have no force or effect.
This Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors and
legal representatives.
(b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
IF TO THE EXECUTIVE:
Home address as currently shown on Human Resource
Department records of Executive's business unit.
IF TO THE COMPANY:
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Cordant Technologies Inc.
00 X. Xxxxx Xxxxxx, Xxxxx 0000
Xxxx Xxxx Xxxx, XX 00000-0000
Attention: Corporate Secretary
or to such other address as either party shall have furnished to the other
in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) The Executive's failure to insist upon strict compliance with any
provision hereof shall not be deemed to be a waiver of such provision or
any other provision thereof.
(f) This Agreement contains the entire understanding of the Company
and the Executive with respect to the subject matter hereof.
(g) Anything in this Agreement to the contrary notwithstanding, the
Executive and the Company acknowledge that the employment of the Executive
by the Company is "at will", and, except as provided in Section 1 hereof,
prior to the Change of Control Date, the employment of the Executive may be
terminated by either the Executive or the Chief Executive Officer of the
Company at any time. Upon a termination of the Executive's employment prior
to the Change of Control Date, except as provided in Section 1 hereof,
there shall be no further rights under this Agreement.
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IN WITNESS WHEREOF, the Executive has hereunto set his hand and,
pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of
the day and year first above written. CORDANT TECHNOLOGIES INC.
by __________________________________
Xxxxx X. Xxxxxx
Chairman of the Board, President, and
Chief Executive Officer
by:__________________________________
(name)
