EXHIBIT 10.1
AMENDED AND RESTATED CONTINUITY AGREEMENT
This Amended and Restated Continuity Agreement (the "Agreement") is
dated as of March 14, 2005 by and between XXXXXXX INCORPORATED, a Connecticut
corporation (the "Company"), and XXXXXXX X. XXXXXX (the "Executive"), and amends
and restates that certain Continuity Agreement by and between the Company and
the Executive dated as of December 27, 1999.
WHEREAS, the Company's Board of Directors considers the continued
services of key executives of the Company to be in the best interests of the
Company and its stockholders; and
WHEREAS, the Company's Board of Directors desires to assure, and has
determined that it is appropriate and in the best interests of the Company and
its stockholders to reinforce and encourage the continued attention and
dedication of key executives of the Company to their duties of employment
without personal distraction or conflict of interest in circumstances which
could arise from the occurrence of a change in control of the Company; and
WHEREAS, the Company's Board of Directors has authorized the Company
to enter into continuity agreements with those key executives of the Company and
any of its respective subsidiaries (all of such entities, with the Company
hereinafter referred to as an "Employer"), such agreements to set forth the
severance compensation which the Company agrees under certain circumstances to
pay such executives; and
WHEREAS, the Executive is a key executive of an Employer and has
been designated by the Board as an executive to be offered such a continuity
compensation agreement with the Company.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and the Executive agree as follows:
1. Term. This Agreement shall become effective on the date hereof and
remain in effect until the first anniversary thereof; provided, however, that
this Agreement shall automatically renew on each anniversary of the date hereof,
unless an Employer provides the Executive, in writing, at least 180 days prior
to the renewal date, notice that this Agreement shall not be renewed.
Notwithstanding the foregoing, in the event that a Change in Control occurs at
any time prior to the termination of this Agreement in accordance with the
preceding sentence, this Agreement shall not terminate until the second
anniversary of the Change in Control (or, if later, until the second anniversary
of the consummation of the transaction(s) contemplated in the Change in
Control).
2. Change in Control.
(a) No compensation or other benefit pursuant to Section 4 hereof
shall be payable under this Agreement unless and until either (i) a Change in
Control of the Company (as hereinafter defined) shall have occurred while the
Executive is an employee of an Employer and
the Executive's employment by an Employer thereafter shall have terminated in
accordance with Section 3 hereof or (ii) the Executive's employment by the
Company shall have terminated in accordance with Section 3(a)(ii) hereof prior
to the occurrence of the Change in Control.
(b) For purposes of this Agreement:
(i) "Change in Control" shall mean any one of the following:
(A) Continuing Directors no longer constitute at least
2/3 of the Directors;
(B) any person or group of persons (as defined in Rule
13d-5 under the Securities Exchange Act of 1934), together
with its affiliates, becomes the beneficial owner, directly or
indirectly, of twenty percent (20%) or more of the voting
power of the then outstanding securities of the Company
entitled to vote for the election of the Company's Directors;
provided that this Section 2 shall not apply with respect to
any holding of securities by (I) the trust under a Trust
Indenture dated September 2, 1957 made by Xxxxx X. Xxxxx, (II)
the trust under a Trust Indenture dated August 23, 1957 made
by Xxxxxx Xxxxxxx, and (III) any employee benefit plan (within
the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974, as amended) maintained by the Company or
any affiliate of the Company;
(C) the consummation of a merger or consolidation of the
Company with any other corporation, the sale of substantially
all of the assets of the Company or the liquidation or
dissolution of the Company, unless, in the case of a merger or
consolidation, the incumbent Directors in office immediately
prior to such merger or consolidation will constitute at least
2/3 of the Directors of the surviving corporation of such
merger or consolidation and any parent (as such term is
defined in Rule 12b-2 under the Securities Exchange Act of
1934) of such corporation; or
(D) at least 2/3 of the incumbent Directors in office
immediately prior to any other action proposed to be taken by
the Company's stockholders determine that such proposed
action, if taken, would constitute a change in control of the
Company and such action is taken.
(ii) "Continuing Director" shall mean any individual who is a
member of the Company's Board of Directors on December 9, 1986 or
was designated (before such person's initial election as a Director)
as a Continuing Director by 2/3 of the then Continuing Directors.
(iii) "Director" shall mean an individual who is a member of
the Company's Board of Directors on the relevant date.
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3. Termination of Employment; Definitions.
(a) Termination without Cause by the Company or for Good Reason by
the Executive.
(i) The Executive shall be entitled to the compensation
provided for in Section 4 hereof, if within two years after a Change
in Control, the Executive's employment shall be terminated (A) by an
Employer for any reason other than (I) the Executive's Disability or
Retirement, (II) the Executive's death or (III) for Cause, or (B) by
the Executive with Good Reason (as such terms are defined herein).
(ii) In addition, the Executive shall be entitled to the
compensation provided for in Section 4 hereof if, (A) in the event
that an agreement is signed which, if consummated, would result in a
Change in Control and the Executive is terminated without Cause by
the Company or terminates employment with Good Reason prior to the
Change in Control, (B) such termination is at the direction of the
acquiror or merger partner or otherwise in connection with the
anticipated Change in Control, and (C) such Change in Control
actually occurs.
(b) Disability. For purposes of this Agreement, "Disability" shall
mean the Executive's absence from the full-time performance of the Executive's
duties (as such duties existed immediately prior to such absence) for 180
consecutive business days, when the Executive is disabled as a result of
incapacity due to physical or mental illness.
(c) Retirement. For purposes of this Agreement, "Retirement" shall
mean the Executive's voluntary termination of employment pursuant to late,
normal or early retirement under a pension plan sponsored by an Employer, as
defined in such plan, but only if such retirement occurs prior to a termination
by an Employer without Cause or by the Executive for Good Reason.
(d) Cause. For purposes of this Agreement, "Cause" shall mean:
(i) the willful and continued failure of the Executive to
perform substantially all of his or her duties with an Employer
(other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial
performance is delivered to such Executive by the Board of Directors
(the "Board") of the Company which specifically identifies the
manner in which the Board believes that the Executive has not
substantially performed his or her duties,
(ii) the willful engaging by the Executive in gross misconduct
which is materially and demonstrably injurious to the Company or any
Employer; or
(iii) the conviction of, or plea of guilty or nolo contendere
to, a felony.
Termination of the Executive for Cause shall be made by delivery to the
Executive of a copy of a resolution duly adopted by the affirmative vote of not
less than a three-fourths majority of the
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non-employee Directors of the Company or of the ultimate parent of the entity
which caused the Change in Control (if the Company has become a subsidiary) at a
meeting of such Directors called and held for such purpose, after 30 days prior
written notice to the Executive specifying the basis for such termination and
the particulars thereof and a reasonable opportunity for the Executive to cure
or otherwise resolve the behavior in question prior to such meeting, finding
that in the reasonable judgment of such Directors, the conduct or event set
forth in any of clauses (i) through (iii) above has occurred and that such
occurrence warrants the Executive's termination.
(e) Good Reason. For purposes of this Agreement, "Good Reason" shall
mean the occurrence, within the Term of this Agreement, of any of the following
without the Executive's express written consent:
(i) after a Change in Control, any reduction in the
Executive's base salary from that which was in effect immediately
prior to the Change in Control, any reduction in the Executive's
annual cash bonus below such bonus paid or payable in respect of the
calendar year immediately prior to the year in which the Change in
Control occurs, or any reduction in the Executive's aggregate annual
cash compensation (including base salary and bonus) from that which
was in effect immediately prior to the Change in Control; or
(ii) after a Change in Control, the failure to increase
(within 12 months of the last increase in base salary) the
Executive's salary in an amount which at least equals, on a
percentage basis, the average percentage of increase in base salary
effected in the preceding 12 months (which period may include some
period of time prior to the Change in Control) for all senior
executives of the Company (unless such reduction is offset by an
increase in the amount of annual cash bonus that is paid to the
Executive); or
(iii) any material and adverse diminution in the Executives'
duties, responsibilities, status, position or authority with the
Company or any of its affiliates following a Change in Control;
provided, however, that no such diminution shall be deemed to exist
solely because of changes in Executive's duties, responsibilities or
titles as a consequence of the Company ceasing to be a company with
publicly-traded securities or becoming a wholly-owned subsidiary of
another company; or
(iv) any relocation of the Executive's primary workplace to a
location that is more than 35 miles from the Executive's primary
workplace as of the date immediately prior to the Change in Control;
or
(v) any failure by the Company to obtain from any successor to
the Company an agreement reasonably satisfactory to the Executive to
assume and perform this Agreement, as contemplated by Section 10(a)
hereof; or
(vi) during the thirty-day period immediately following the
first anniversary of the Change in Control (or, if earlier, the
Executive's attainment of
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age 65 following the Change in Control), the voluntary termination
of employment by the Executive for any reason or no reason at all.
Notwithstanding the foregoing, in the event Executive provides the Company with
a Notice of Termination (as defined below) referencing this Section 3(e) (with
the exception of Section 3(e)(vi)), the Company shall have 30 days thereafter in
which to cure or resolve the behavior otherwise constituting Good Reason. Any
good faith determination by Executive that Good Reason exists shall be presumed
correct and shall be binding upon the Company.
(f) Notice of Termination. Any purported termination of the
Executive's employment (other than on account of Executive's death) with an
Employer shall be communicated by a Notice of Termination to the Executive, if
such termination is by an Employer, or to an Employer, if such termination is by
the Executive. For purposes of this Agreement, "Notice of Termination" shall
mean a written notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provisions so indicated; provided, however, that in
connection with a termination for Good Reason under Section 3(e)(vi), no details
shall be necessary other than reference to such Section. For purposes of this
Agreement, no purported termination of Executive's employment with an Employer
shall be effective without such a Notice of Termination having been given.
4. Compensation Upon Termination.
Subject to Section 9 hereof, if within two years after a Change in
Control, the Executive's employment with an Employer shall be terminated in
accordance with Section 3(a) (the "Termination"), the Executive shall be
entitled to the following payments and benefits:
(a) Severance. The Company shall pay or cause to be paid to the
Executive a cash severance amount equal to three times the sum of (i) the
Executive's annual base salary on the date of the Change in Control (or,
if higher, the annual base salary in effect immediately prior to the
giving of the Notice of Termination), and (ii) the highest of the actual
bonuses paid or payable to the Executive under the Company's annual
incentive compensation plan in any of the three consecutive fiscal years
prior to the year in which the Change in Control occurs (the "Bonus").
This cash severance amount shall be payable in a lump sum calculated
without any discount.
(b) Additional Payments and Benefits. The Executive shall also be
entitled to:
(i) a lump sum cash payment equal to the sum of (A) the
Executive's accrued but unpaid annual base salary through the date
of Termination, (B) the unpaid portion, if any, of bonuses
previously earned by the Executive pursuant to the Company's annual
incentive compensation plan, plus the pro rata portion of (I) the
Bonus or (II) if payable, the target bonus to be paid for the year
in which the date of Termination occurs, in either case (calculated
through the date of Termination), and (C) an amount, if any, equal
to compensation previously
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deferred (excluding any qualified plan deferral) and any accrued
vacation pay, in each case, in full satisfaction of Executive's
rights thereto; and
(ii) an annual benefit under the Company's Amended and
Restated Supplemental Executive Retirement Plan (the "SERP"),
calculated based on the Executive's actual full years of service
(but in no event less than 5 years of service or more than 10 years
of service), unreduced for early retirement thereunder; and
(iii) continued medical, dental, vision, and life insurance
coverage (excluding accident, death, and disability insurance) for
the Executive and the Executive's eligible dependents pursuant to
the terms of the Company's Key Man Supplemental Medical Plan, on the
same basis as in effect prior to the Change in Control or the
Executive's Termination, whichever is deemed to provide for more
substantial benefits; and
(iv) all other accrued or vested benefits in accordance with
the terms of the applicable plan (with an offset for any amounts
paid under Section 4(b)(i)(C), above).
All lump sum payments under this Section 4 shall be paid within 10
business days after Executive's date of Termination; provided,
however, that with respect to the SERP benefit set forth in Section
4(b)(ii), above, unless the Executive, during the ten day period
after the Company signs any agreement that would, upon the
consummation of the transactions contemplated therein, result in a
Change in Control, elects to receive a lump sum payment equal to the
present value of his SERP benefit (as calculated in Section 4(b)(ii)
and otherwise in accordance with Exhibit A, as attached hereto), the
Executive shall be entitled to receive the SERP benefit in
installment payments (payable in accordance with the terms of the
SERP), beginning upon the later to occur of (i) the date on which
the Executive achieves age 55 and (ii) the date on which Executive's
employment terminates in accordance with the terms hereunder.
(c) Outplacement. If so requested by the Executive, outplacement
services shall be provided by a professional outplacement provider
selected by Executive; provided, however, that such outplacement services
shall be provided the Executive at a cost to the Company of not more than
fifteen percent (15%) of such Executive's annual base salary.
(d) Withholding. Payments and benefits provided pursuant to this
Section 4 shall be subject to any applicable payroll and other taxes
required to be withheld.
5. Compensation Upon Termination for Death, Disability or Retirement.
If an Executive's employment is terminated by reason of Death,
Disability or Retirement prior to any other termination, Executive will receive:
(a) the sum of (i) Executive's accrued but unpaid salary through the
date of Termination, (ii) the pro rata portion of the Executive's target
bonus for the year of
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Executive's Death or Disability (calculated through the date of
Termination), and (iii) an amount equal to any compensation previously
deferred and any accrued vacation pay; and
(b) other accrued or vested benefits in accordance with the terms of
the applicable plan (with an offset for any amounts paid under item
(a)(iii), above.
6. Excess Parachute Excise Tax Payments.
(a) (i) If it is determined (as hereafter provided) that any payment
or distribution by the Company or any Employer to or for the benefit of the
Executive, whether paid or payable or distributed or distributable pursuant to
the terms of this Agreement or otherwise pursuant to or by reason of any other
agreement, policy, plan, program or arrangement, including without limitation
any stock option, stock appreciation right or similar right, or the lapse or
termination of any restriction on or the vesting or exercisability of any of the
foregoing (a "Payment"), would be subject to the excise tax imposed by Section
4999 of the Code (or any successor provision thereto) by reason of being
"contingent on a change in ownership or control" of the Company, within the
meaning of Section 280G of the Code (or any successor provision thereto) or to
any similar tax imposed by state or local law, or any interest or penalties with
respect to such excise tax (such tax or taxes, together with any such interest
and penalties, are hereafter collectively referred to as the "Excise Tax"), then
the Executive shall be entitled to receive an additional payment or payments (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 any 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; provided, however, if the Executive's Payment is,
when calculated on a net-after-tax basis, less than $50,000 in excess of the
amount of the Payment which could be paid to the Executive under Section 280G of
the Code without causing the imposition of the Excise Tax, then the Payment
shall be limited to the largest amount payable (as described above) without
resulting in the imposition of any Excise Tax (such amount, the "Capped
Amount").
(ii) Subject to the provisions of Section 6(a)(i) hereof, all
determinations required to be made under this Section 6, including whether an
Excise Tax is payable by the Executive and the amount of such Excise Tax and
whether a Gross-Up Payment is required and the amount of such Gross-Up Payment,
shall be made by the nationally recognized firm of certified public accountants
(the "Accounting Firm") used by the Company prior to the Change in Control (or,
if such Accounting Firm declines to serve, the Accounting Firm shall be a
nationally recognized firm of certified public accountants selected by the
Executive). The Accounting Firm shall be directed by the Company or the
Executive to submit its preliminary determination and detailed supporting
calculations to both the Company and the Executive within 15 calendar days after
the Termination Date, if applicable, and any other such time or times as may be
requested by the Company or the Executive. If the Accounting Firm determines
that any Excise Tax is payable by the Executive and that the criteria for
reducing the Payment to the Capped Amount (as described in Section 6(a)(i)
above) is met, then the Company shall reduce the Payment by the amount which,
based on the Accounting Firm's determination and calculations, would provide the
Executive with the Capped Amount, and pay to the Executive such reduced Payment.
If the Accounting Firm determines that an Excise Tax is payable,
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without reduction pursuant to Section 6(a)(i), above, the Company shall pay the
required Gross-Up Payment to, or for the benefit of, the Executive within five
business days after receipt of such determination and calculations. If the
Accounting Firm determines that no Excise Tax is payable by the Executive, it
shall, at the same time as it makes such determination, furnish the Executive
with an opinion that he has substantial authority not to report any Excise Tax
on his/her federal, state, local income or other tax return. Any determination
by the Accounting Firm as to the amount of the Gross-Up Payment shall be binding
upon the Company and the Executive absent a contrary determination by the
Internal Revenue Services or a court of competent jurisdiction; provided,
however, that no such determination shall eliminate or reduce the Company's
obligation to provide any Gross-Up Payment that shall be due as a result of such
contrary determination. As a result of the uncertainty in the application of
Section 4999 of the Code (or any successor provision thereto) and the
possibility of similar uncertainty regarding state or local tax law at the time
of any determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments that will not have been made by the Company should have been
made (an "Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts or fails to pursue its
remedies pursuant to Section 6(a) hereof and the Executive thereafter is
required to make a payment of any Excise Tax, the Executive shall direct the
Accounting Firm to determine the amount of the Underpayment that has occurred
and to submit its determination and detailed supporting calculations to both the
Company and the Executive as promptly as possible. Any such Underpayment shall
be promptly paid by the Company to, or for the benefit of, the Executive within
five business days after receipt of such determination and calculations.
(iii) The Company and the Executive shall each provide the
Accounting Firm access to and copies of any books, records and documents in the
possession of the Company or the Executive, as the case may be, reasonably
requested by the Accounting Firm, and otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the determination
contemplated by Section 6(a) hereof.
(iv) The federal, state and local income or other tax returns filed
by the Executive (or any filing made by a consolidated tax group which includes
the Company) shall be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the Excise Tax payable by
the Executive. The Executive shall make proper payment of the amount of any
Excise Tax, and at the request of the Company, provide to the Company true and
correct copies (with any amendments) of his/her federal income tax return as
filed with the Internal Revenue Service and corresponding state and local tax
returns, if relevant, as filed with the applicable taxing authority, and such
other documents reasonably requested by the Company, evidencing such payment. If
prior to the filing of the Executive's federal income tax return, or
corresponding state or local tax return, if relevant, the Accounting Firm
determines that the amount of the Gross-Up Payment should be reduced, the
Executive shall within five business days pay to the Company the amount of such
reduction.
(v) The fees and expenses of the Accounting Firm for its services in
connection with the determinations and calculations contemplated by Sections
6(a)(ii) and (iv) hereof shall be borne by the Company. If such fees and
expenses are initially advanced by the Executive, the Company shall reimburse
the Executive the full amount of such fees and expenses
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within five business days after receipt from the Executive of a statement
therefor and reasonable evidence of his/her payment thereof.
(b) In the event that the Internal Revenue Service claims that any
payment or benefit received under this Agreement constitutes an "excess
parachute payment," within the meaning of Section 280G(b)(1) of the Code, the
Executive shall notify the Company in writing of such claim. Such notification
shall be given as soon as practicable but no later than 10 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 the Executive 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 and reasonably satisfactory to the Executive; (iii) cooperate with
the Company in good faith in order to effectively contest such claim; and (iv)
permit the Company to participate in any proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including, but not limited to, additional interest and penalties and
related legal, consulting or other similar fees) incurred in connection with
such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for and against any Excise Tax or other tax (including interest
and penalties with respect thereto) imposed as a result of such representation
and payment of costs and expenses.
(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; provided, however, that if the Executive is
required to extend the statute of limitations to enable the Company to contest
such claim, the Executive may limit this extension solely to such contested
amount. The Company's control of the contest shall be limited to issues with
respect to which a corporate deduction would be disallowed pursuant to Section
280G of the Code 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. In addition, no position may be taken nor any final
resolution be agreed to by the Company without the Executive's consent if such
position or resolution could reasonably be expected to adversely affect the
Executive (including any other tax position of the Executive unrelated to
matters covered hereby).
(d) If, after the receipt by the Executive of an amount advanced by
the Company in connection with the contest of the Excise Tax claim, the
Executive becomes entitled to receive any refund with respect to such claim, the
Executive shall promptly pay to the Company the amount of such refund (together
with any interest paid or credited thereon after taxes applicable thereto);
provided, however, if the amount of that refund exceeds the amount advanced by
the Company or it is otherwise determined for any reason that additional amounts
could be paid to the Named Executive without incurring any Excise Tax, any such
amount will be promptly paid by the Company to the named Executive. If, after
the receipt by the Executive
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of an amount advanced by the Company in connection with an Excise Tax claim, 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 the denial of such refund prior to the
expiration of 30 days after such determination, such advance shall be forgiven
and shall not be required to be repaid and shall be deemed to be in
consideration for services rendered after the date of the Termination.
7. Expenses. In addition to all other amounts payable to the Executive
under this Agreement, the Company shall pay or reimburse the Executive for legal
fees (including without limitation, any and all court costs and attorneys' fees
and expenses) incurred by the Executive in connection with or as a result of any
claim, action or proceeding brought by the Company or the Executive with respect
to or arising out of this Agreement or any provision hereof; provided, however,
that in the case of an action brought by the Executive, the Company shall have
no obligation for any such legal fees, if the Company is successful in
establishing with the court that the Executive's action was frivolous or
otherwise without any reasonable legal or factual basis.
8. Obligations Absolute; Non-Exclusivity of Rights; Joint Several
Liability.
(a) The obligations of the Company to make the payment to the
Executive, and to make the arrangements, provided for herein shall be absolute
and unconditional and shall not be reduced by any circumstances, including
without limitation any set-off, counterclaim, recoupment, defense or other right
which the Company may have against the Executive or any third party at any time.
(b) Nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any benefit, bonus, incentive or other
plan or program provided by the Company or any other Employer and for which the
Executive may qualify, nor shall anything herein limit or reduce such rights as
the Executive may have under any agreements with the Company or any other
Employer.
(c) Each entity included in the definition of "Employer" and any
successors or assigns shall be joint and severally liable with the Company under
this Agreement.
9. Not an Employment Agreement; Effect On Other Rights.
(a) This Agreement is not, and nothing herein shall be deemed to
create, a contract of employment between the Executive and the Company. Any
Employer may terminate the employment of the Executive at any time, subject to
the terms of this Agreement and/or any employment agreement or arrangement
between the Employer and the Executive that may then be in effect.
(b) With respect to any employment agreement with the Executive in
effect immediately prior to the Change in Control, nothing herein shall have any
effect on the Executive's rights thereunder; provided, however, that in the
event of the Executive's termination of employment in accordance with Section 3
hereof, this Agreement shall govern solely for the purpose of providing the
terms of all payments and additional benefits to which the Executive is entitled
upon such termination and any payments or benefit provided under any employment
agreement with the Executive in effect immediately prior to the Change in
Control shall reduce
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the corresponding type of payments or benefits hereunder. Notwithstanding the
foregoing, in the event that the Executive's employment is terminated prior to
the occurrence of a Change in Control under the circumstances provided for in
Section 3(a)(ii) and such circumstances also entitle Executive to payments and
benefits under any other employment or other agreement as in effect prior to the
Change in Control ("Other Agreement"), then, until the Change in Control occurs,
the Executive will receive the payments and benefits to which he/she is entitled
under such Other Agreement. Upon the occurrence of the Change in Control, the
Company will pay to the Executive in cash the amount to which he/she is entitled
under this Agreement (reduced by the amounts already paid under the Other
Agreement) in respect of cash payments and shall provide or increase any other
noncash benefits to those provided for hereunder (after taking into account
noncash benefits, if any, provided under such Other Agreement). Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any plan or program of the Company or any other Employer shall be payable
in accordance with such plan or program, except as explicitly modified by this
Agreement.
10. Successors; Binding Agreement, Assignment.
(a) The Company shall require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business of the Company, by agreement to expressly,
absolutely and unconditionally assume 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. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a material
breach of this Agreement and shall entitle the Executive to terminate the
Executive's employment with the Company or such successor for Good Reason
immediately prior to or at any time after such succession. As used in this
Agreement, "Company" shall mean (i) the Company as hereinbefore defined, and
(ii) any successor to all the stock of the Company or to all or substantially
all of the Company's business or assets which executes and delivers an agreement
provided for in this Section 10(a) or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law, including any parent
or subsidiary of such a successor.
(b) This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amount would be payable to the Executive hereunder if the
Executive had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Executive's estate or designated beneficiary. Neither this Agreement nor any
right arising hereunder may be assigned or pledged by the Executive.
11. Notice. For purpose of this Agreement, notices and all other
communications provided for in this Agreement or contemplated hereby shall be in
writing and shall be deemed to have been duly given when personally delivered,
delivered by a nationally recognized overnight delivery service or when mailed
United States certified or registered mail, return receipt requested, postage
prepaid, and addressed, in the case of the Company, to the Company at:
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Xxxxxxx Incorporated
000 Xxxxx Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000-0000
Attention: General Counsel
and in the case of the Executive, to the Executive at the address set forth on
the execution page at the end hereof.
Either party may designate a different address by giving notice of
change of address in the manner provided above, except that notices of change of
address shall be effective only upon receipt.
12. Confidentiality. The Executive shall retain in confidence any and
all confidential information concerning the Company and its respective business
which is now known or hereafter becomes known to the Executive, except as
otherwise required by law and except information (i) ascertainable or obtained
from public information, (ii) received by the Executive at any time after the
Executive's employment by the Company shall have terminated, from a third party
not employed by or otherwise affiliated with the Company or (iii) which is or
becomes known to the public by any means other than a breach of this Section 12.
Upon the Termination of employment, the Executive will not take or keep any
proprietary or confidential information or documentation belonging to the
Company.
13. Miscellaneous. No provision of this Agreement may be amended,
altered, modified, waived or discharged unless such amendment, alteration,
modification, waiver or discharge is agreed to in writing signed by the
Executive and such officer of the Company as shall be specifically designated by
the Committee or by the Board of Directors of the Company. No waiver by either
party, at any time, of any breach by the other party of, or of compliance by the
other party with, any condition or provision of this Agreement to be performed
or complied with by such other party shall be deemed a waiver of any similar or
dissimilar provision or condition of this Agreement or any other breach of or
failure to comply with the same condition or provision at the same time or at
any prior or subsequent time. No agreements or representations, oral or
otherwise, 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.
14. Severability. If any one or more of the provisions of this Agreement
shall be held to be invalid, illegal or unenforceable, the validity, legality
and enforceability of the remaining provisions of this Agreement shall not be
affected thereby. To the extent permitted by applicable law, each party hereto
waives any provision of law which renders any provision of this Agreement
invalid, illegal or unenforceable in any respect.
15. Governing Law; Venue. The validity, interpretation, construction and
performance of this Agreement shall be governed on a non-exclusive basis by the
laws of the State of Connecticut without giving effect to its conflict of laws
rules. For purposes of jurisdiction and venue, the Company and each Employer
hereby consents to jurisdiction and venue in any suit, action or proceeding with
respect to this Agreement in any court of competent jurisdiction in the state in
which Executive resides at the commencement of such suit, action or
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proceeding and waives any objection, challenge or dispute as to such
jurisdiction or venue being proper.
16. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be an original and all of which shall be
deemed to constitute one and the same instrument.
[SIGNATURE PAGE FOLLOWS]
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first above written.
XXXXXXX INCORPORATED
By: /s/ Xxxxxxx X. Xxxxxx
-------------------------------------------------
Title: Vice President, General Counsel and Secretary
-----------------------------------------------------
/s/ Xxxxxxx X. Xxxxxx
-----------------------------------------------------
Executive
-----------------------------------------------------
-----------------------------------------------------
Address
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EXHIBIT A
ASSUMPTIONS
The assumptions to be used are those specified under Section 417(e) of the
Internal Revenue Code of 1986, as amended, which assumptions are the minimum
lump sum factors permitted to be used for calculating pension benefits under
qualified defined benefit plans.
Benefit: Lump sum payment of unreduced benefit deferred to age 55,
increased to reflect the 50% joint and survivor form.
Mortality Rates: The 1983 Group Annuity Mortality (1983 GAM) blend of 50% male
and 50% female rates.
Interest Rate: 10-year treasury rate on the first day of the fourth quarter of
the calendar year immediately prior to the date of termination
of employment.
Other: 3% annual Social Security wage base increase.
2.5% annual CPI increase.
5% annual salary increase.
Qualified Plan
Offset: Amount actually payable at age 55 (or, if higher, the participants
actual age as of the date of termination of employment).
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