EXHIBIT 10.11
12/4/96
[PRIMEX TIER I AGREEMENT]
EXECUTIVE AGREEMENT
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Agreement between Primex Technologies, Inc., a Virginia corporation
("Primex"), and _______________ (the "Executive"), dated as of ______________,
1997.
Primex and the Executive agree as follows:
1. Definitions
As used in this Agreement:
(a) "Cause" means the willful and continued failure of the Executive to
substantially perform his or her duties; the willful engaging by the Executive
in gross misconduct significantly and demonstrably injurious to Primex; or
conduct by the Executive in the course of his or her employment which is a
felony or fraud. No act or failure to act on the part of the Executive will be
considered "willful" unless done or omitted not in good faith and without
reasonable belief that the action or omission was in the interests of Primex or
not opposed to the interests of Primex.
(b) "Change in Control" means:
(i) Primex ceases to be, directly or indirectly, owned by at least
1,000 stockholders;
(ii) A person, partnership, joint venture, corporation or other
entity, or two or more of any of the foregoing acting as a "person" within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Act"), other than Primex, a majority-owned subsidiary of Primex or an
employee benefit plan of Primex or such subsidiary, become(s) the "beneficial
owner" (as defined in Rule 13d-3 under such Act) of 15% or more of the then
outstanding voting stock of Primex;
(iii) During any period of two consecutive years, individuals who at
the beginning of such period constitute Primex's Board of Directors (together
with any new Director whose election by Primex's Board of Directors or whose
nomination for election by Primex's stockholders was approved by a vote of at
least two-thirds of the Directors then still in office who either were directors
at the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
directors then in office; or
(iv) All or substantially all of the business of Primex is disposed
of pursuant to a merger, consolidation or other transaction in which Primex is
not the surviving
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corporation or Primex combines with another company and is the surviving
corporation (unless the shareholders of Primex immediately following such
merger, consolidation, combination, or other transaction beneficially own,
directly or indirectly, more than 50% of the voting stock or other ownership
interests of (x) the entity or entities, if any, that succeed to the business of
Primex or (y) the combined company).
(c) "Disability" means that the Executive has suffered an incapacity due to
physical or mental illness which meets the criteria for disability established
at the time under Primex's short-term disability plan.
(d) "Executive Severance" means:
(i) twelve months of the Executive's then current monthly salary
(without taking into account any reductions which may have occurred at or after
the date of a Change in Control); plus
(ii) an amount equal to the greater of the Executive's average annual
award actually paid under Primex's short-term annual incentive compensation
plans or programs ("ICP") for the three years (or for such fewer years as the
ICP may have been in effect) immediately preceding the date of Termination or
the Executive's then current ICP standard annual award.
(iii) The Executive will not be entitled to receive any other
severance otherwise payable to the Executive under any other severance plan of
Primex.
(iv) If on the Termination date the Executive is eligible and is
receiving payments under any then existing Primex disability plan, then the
Executive agrees that all such payments may, and will be, suspended and offset
for 12 months following the Termination date. If after such period the Executive
remains eligible to receive disability payments, then such payments shall resume
in the amounts and in accordance with the provisions of the applicable Primex
disability plan.
(e) "Potential Change in Control" means:
(i) Primex has entered into an agreement the consummation of which
would result in a Change in Control;
(ii) any person (including Primex ) publicly announces an intention
to take or to consider taking actions which if consummated would constitute a
Change in Control;
(iii) Primex learns that any person (other than an employee benefit
plan of Primex or a subsidiary of Primex) has become the beneficial owner
directly or indirectly of securities of Primex representing 9.5% or more of the
combined voting power of Primex's then outstanding securities ordinarily
entitled to vote in elections of directors; or
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(iv) the Board of Directors of Primex adopts a resolution to the
effect that, for purposes of this Agreement, a Potential Change in Control of
Primex has occurred.
(f) "Termination" means:
(i) The Executive is discharged by Primex other than for Cause;
(ii) The Executive terminates his or her employment in the event
that:
(1) Primex requires the Executive to relocate the Executive's
then office to an area which is not within reasonable commuting distance, on a
daily basis, from the Executive's then residence, except that a requirement to
relocate the Executive's office to Primex's corporate headquarters is not a
basis for Termination;
(2) Primex reduces the Executive's base salary or fails to
increase the Executive's base salary on a basis consistent (as to frequency and
amount) with Primex's exempt salary system as then in effect or, in the event of
a Change in Control, as in effect immediately prior to the Change in Control;
(3) Primex fails to continue the Executive's participation in
its benefit plans (including incentive compensation and stock based incentives)
on substantially the same basis, both in terms of the amount of the benefits
provided (other than due to Primex's or a relevant operation's earnings
performance) and the level of the Executive's participation relative to other
participants as exists on the date hereof; provided that, with respect to annual
and long term incentive compensation plans, the basis with which the amount of
benefits and level of participation of the Executive shall be compared shall be
the average benefit awarded to the Executive under the relevant plan during the
three years (or such fewer years as such plans may have been in effect)
immediately preceding the date of Termination;
(4) The Executive suffers a Disability which prevents the
Executive from performing the Executive's duties with Primex for a period of at
least 180 consecutive days;
(5) Following a Change in Control, Primex fails to substantially
maintain its benefit plans as in effect at the time of the Change in Control,
unless reasonably equivalent arrangements (embodied in an on-going substitute or
alternative plan) have been made with respect to such plans; or
(6) The Executive's duties, position or reporting
responsibilities are diminished.
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2. Term/Executive's Duties.
(a) This Agreement expires at the close of business on December 31, 2001,
unless prior to that date there is a Change in Control, in which case this
Agreement will expire on the later of the close of business on December 31, 2001
or three years following the date of the Change in Control; provided that the
expiration of this Agreement will not affect any of the Executive's rights
resulting from a Termination prior to such expiration. In the event of the
Executive's death while employed by Primex, this Agreement shall terminate and
be of no further force or effect on the date of his or her death; provided that
the Executive's death will not affect any of the Executive's rights resulting
from a Termination prior to death.
(b) During the period of the Executive's employment by Primex, the
Executive shall devote his or her full time efforts during normal business hours
to Primex's business and affairs, except during reasonable vacation periods and
periods of illness or incapacity. Nothing in this Agreement will preclude the
Executive from devoting reasonable periods required for service as a director or
a member of any organization involving no conflict of interest with Primex's
interest, provided that no additional position as director or member shall be
accepted by the Executive during the period of his employment with Primex
without its prior consent.
(c) The Executive agrees that in the event of a Potential Change in Control
of Primex occurring after the date hereof, the Executive will remain in the
employ of Primex for a period of six months from the occurrence of such
Potential Change in Control, during which period the Executive will have an
office, title, duties and responsibilities substantially consistent with those
applicable immediately prior to the Potential Change in Control.
3. Executive Severance Payment
(a) In the event of a Termination occurring before the expiration of this
Agreement, Primex will pay the Executive a lump sum in an amount equal to the
Executive Severance. The payment will be made within 30 days of the
Termination.
(b) In the event of a Termination after a Change in Control has occurred,
in addition to the Executive Severance paid under Paragraph 3(a) above, Primex
will pay a Change in Control severance premium to the Executive in an amount
equal to [one]/1/ times the Executive Severance. The Change in Control
severance premium, if it becomes due, will be made within 30 days of the
Termination.
(c) The amount due under paragraph 3(a) or 3(b) will be reduced to the
extent that, if the amounts were paid in monthly installments, no installment
would be paid after the Executive's seventieth birthday.
(d) The Executive will not be required to mitigate the amount of any
payment provided for in paragraph 3(a) or 3(b) by seeking other employment or
otherwise,
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/1/ Two times in case of Chairman and CEO and Vice Chairman.
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nor shall any compensation received by the Executive from a third party reduce
such payment. Except as may otherwise be expressly provided herein, nothing in
this Agreement will be deemed to reduce or limit the rights which the Executive
may have under any employee benefit plan, policy or arrangement of Primex.
4. Other Benefits and Payments
(a) (1) If the Executive becomes entitled to payment under Paragraph 3(a),
then the Executive shall be entitled to receive a lump sum payment from Primex
at the same time as the payment under Paragraph 3(a) is made equal to the amount
contributed or credited by Primex to the Executive's accounts in all defined
contribution plans of Primex (whether or not "qualified" plans) during the 12
months preceding the Executive's Termination provided that in the event there
are fewer than 12 months in such period the payment required shall be increased
proportionately to make it equivalent to a 12 month period. The "amount
contributed or credited by Primex" as defined in this Paragraph 4 shall not
include any employee contributions, employer matching contributions, dividends
or investment gains or losses credited to the Executive's accounts, but only the
Primex contributions made or, in the case of supplementary plans, credited, to
the accounts. Such payment shall be in lieu of any such contributions or
credits by Primex to its defined contribution plans with respect to the period
after the Executive's Termination. If Primex is required by law to contribute
to such plans with respect to the period after the Executive's Termination, any
such contribution shall reduce the payout otherwise due Executive under this
Paragraph 4(a)(1). In the event the Executive receives a payment under
Paragraph 3(b), the amount required to be paid under the preceding sentences of
this Paragraph 4(a)(1) shall be doubled. Notwithstanding the foregoing, in the
event at the date of Termination the Executive is more than 69 years old (or
more than 68 years old in the case the Executive receives a payment under
Paragraph 3(b)) the lump sum payment required to be made under this Paragraph
4(a)(1) shall be reduced such that if it were expressed as equal monthly
payments made over a 12-month period (a 24-month period in the case of the
Executive receiving a payment under Paragraph 3(b)) and paid in monthly
installments on the first of every month following Termination no such monthly
payments would be received by the Executive beyond his or her seventieth
birthday.
(2) If the Executive becomes entitled to payment under Paragraph 3(a), for
the 12 months from the date of the Termination the Executive will continue to
enjoy coverage under all Primex medical, dental, and life insurance plans to the
extent the Executive was enjoying such coverage immediately prior to the
Termination. The Executive shall accrue no vacation during the 12 months
following the date of Termination but shall be entitled to payment for accrued
and unused vacation for the then current year. If the Executive receives the
Executive Severance (including the amount referred to in Paragraph 1(d)(ii)),
the Executive shall not be entitled to an ICP award for the calendar year of
Termination if Termination occurs during the first calendar quarter. Even if
the Executive receives the Executive Severance (including the amount referred to
in Paragraph 1(d)(ii)), if Termination occurs during or after the second
calendar quarter, the Executive shall also be entitled to a prorated ICP award
for the calendar year of Termination which shall be determined by multiplying
his or her then current ICP standard by a fraction the numerator of
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which is the number of weeks in the calendar year prior to the Termination and
the denominator of which is 52. The Executive shall accrue no ICP award during
the 12 months following the date of Termination.
(b) If the Executive receives payment under Paragraph 3(b), the insurance
coverage provided for in Paragraph 4(a) (2) will be for an additional 12-month
period.
(c) Notwithstanding the foregoing Paragraphs 4(a)(2), and (b), no such
insurance coverage will be afforded by this Agreement with respect to any period
after the Executive's seventieth birthday.
(d) In the event of a Termination, the Executive will be entitled at
Primex's expense to outplacement counseling and associated services in
accordance with Primex's customary practice at the time (or, if a Change in
Control shall have occurred, in accordance with such practice immediately prior
thereto) with respect to its senior executives who have been terminated other
than for cause. It is understood that the counseling and services contemplated
by this Paragraph 4(d) are intended to facilitate the obtaining by the Executive
of other employment following a Termination, and payments or benefits by Primex
in lieu thereof will not be available to the Executive.
(e) If the Executive (i) receives the payment under Paragraph 3(b), (ii)
has an accrued vested benefit under Xxxx Corporation's qualified pension plan as
of the date of Termination and (iii) at age 55, would not qualify for subsidized
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early retirement from Xxxx Corporation ("Olin") under the provisions of Olin's
pension plans, then, concurrent with the payment made to the Executive under
Paragraph 3(b), the Executive will receive a lump sum payment from Primex to
make up for the lost subsidy calculated as follows:
FIRST, by calculating the annual benefit which would otherwise be
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payable to the Executive at age 65 under all Olin pension plans assuming the
Executive had terminated his or her employment with Primex on the date of the
Change in Control, SECOND, by multiplying such annual benefit by the percentage
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then applicable in the calculation of benefits paid to employees retiring from
active service with Olin at age 55 under the early retirement provisions of the
Olin Employees Pension Plan (72% at the date hereof), THIRD, by determining the
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lump sum actuarial value (as of the date of Termination) of annual payments
beginning at age 55 as calculated in the second step and FOURTH, by deducting
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from such lump sum actuarial value the lump sum actuarial value (as of the date
of Termination) of the Executive's accrued annual benefits under all Olin
pension plans. Lump sum actuarial value shall be determined in accordance with
Olin's actuarial assumptions for its nonqualified defined benefit plans.
5. Participation in Change in Control/Section 4999 of Internal Revenue Code
(a) In the event that the Executive participates or agrees to
participate by loan or equity investment (other than through ownership of less
than 1% of publicly traded securities of another company) in a transaction
("acquisition") which would result in an event described in paragraph 1(b)(i) or
(ii), the Executive must promptly disclose such participation
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or agreement to Primex. If the Executive so participates or agrees to
participate, no payments due under this Agreement or by virtue of any Change in
Control provisions contained in any compensation or benefit plan of Primex will
be paid to the Executive until the acquiring group in which the Executive
participates or agrees to participate has completed the acquisition. In the
event the Executive so participates or agrees to participate and fails to
disclose his or her participation or agreement, the Executive will not be
entitled to any payments under this Agreement or by virtue of Change in Control
provisions in any Primex compensation or benefit plan, notwithstanding any of
the terms hereof or thereof.
(b) Any payments made pursuant to this Agreement or by virtue of Change in
Control provisions in any Primex compensation or benefit plan which are subject
to tax under Section 4999 of the Internal Revenue Code or a successor provision
("4999") will be increased so that after paying the tax imposed by 4999 and the
income tax on the amount of the increase provided by this paragraph (b), the
Executive will have received a net payment equal to that which he or she would
have received if 4999 did not apply.
6. Successors; Binding Agreement
(a) Primex will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of Primex, by agreement, in form and substance satisfactory
to the Executive, expressly to assume and agree to perform this Agreement in the
same manner and to the same extent that Primex would be required to perform if
no such succession had taken place. Failure of Primex to obtain such assumption
and agreement prior to the effectiveness of any such succession will be a breach
of this Agreement and entitle the Executive to compensation from Primex in the
same amount and on the same terms as the Executive would be entitled to
hereunder had a Termination occurred on the succession date. As used in this
Agreement, "Primex" means Primex as defined in the preamble to this Agreement
and any successor to its business or assets which executes and delivers the
agreement provided for in this Paragraph 6 or which otherwise becomes bound by
all the terms and provisions of this Agreement by operation of law or otherwise.
(b) This Agreement shall be enforceable by the Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
7. Notices. For the purpose of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
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If to the Company: Primex Technologies, Inc.
00000 0xx Xxxxxx Xxxxx
Xx. Xxxxxxxxxx, XX 00000-0000
Attention: Corporate Secretary
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
8. Governing Law. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the State of Florida.
9. Miscellaneous. No provisions of this Agreement may be modified, waived or
discharged unless such modification, waiver or discharge is agreed to in writing
signed by the Executive and Primex. No waiver by either party hereto at any time
of any breach by the other party hereto of, or compliance with, any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same 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 set forth expressly in this Agreement.
10. Counterparts. This Agreement may be executed in one or more counterparts,
each of which shall be deemed to be an original but all of which together will
constitute one and the same Agreement.
11. Withholding of Taxes. Primex may withhold from any benefits payable under
this Agreement all federal, state, city or other taxes as shall be required
pursuant to any law or governmental regulation or ruling.
12. Non-assignability. This Agreement is personal in nature and neither of
the parties hereto shall, without the consent of the other, assign or transfer
this Agreement or any rights or obligations hereunder, except as provided in
paragraph 6 above. Without limiting the foregoing, the Executive's right to
receive payments hereunder shall not be assignable or transferable, whether by
pledge, creation of a security interest or otherwise, other than a transfer by
his or her will or by the laws of descent or distribution, and, in the event of
any attempted assignment or transfer by the Executive contrary to this
Paragraph, Primex shall have no liability to pay any amount so attempted to be
assigned or transferred.
13. No Employment Right. This Agreement shall not be deemed to confer on the
Executive a right to continued employment with Primex.
14. Disputes/Arbitration.
(a) Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration at Primex's corporate
headquarters in accordance with the rules of the American Arbitration
Association then in effect. Judgment
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may be entered on the arbitrator's award in any court having jurisdiction;
provided, however, that the Executive shall be entitled to seek specific
performance of the Executive's right to be paid during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
(b) Primex shall pay all reasonable legal fees and expenses which the
Executive may incur to enforce this Agreement unless the Executive had no
reasonable basis for his or her claim. Should Primex dispute the entitlement of
the Executive to such fees and expenses, the burden of proof shall be on Olin to
establish that the Executive had no reasonable basis for his or her claim.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the day and year first above set forth.
PRIMEX TECHNOLOGIES, INC.
By: ____________________________
Title:
_________________________
Executive
