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Exhibit 10(g)
Amended and Restated
Severance and Employment Agreement
1. Recitals
(a) This Amended and Restated Severance and Employment Agreement
("Agreement") is between Royal Appliance Mfg. Co. (the "Company") and
__________________________ (the "Executive") and is effective as of
___________________________________. This Agreement supersedes all prior
Severance and Employment Agreements between the Company and Executive.
(b) The address of the Company is 0000 Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxx
00000. The address of the Executive is ________________________________________.
(c) The Executive is currently employed by the Company in the capacity
of _________________________, and the Executive is one of the key executives of
the Company.
(d) In consideration of the mutual promises contained herein and other
good and valuable consideration, the Executive and the Company have entered into
this Agreement.
2. Term of Agreement
The Term of this Agreement shall commence on the date hereof and
continue until ____________________________; provided, however, that commencing
on _______________________ and each January 1st thereafter, the above-referenced
date and the term of this Agreement shall automatically be extended for one
additional year unless at least thirty days prior to such January 1st date, the
Company or the Executive shall have given notice that it or he or she does not
wish to extend this Agreement. The phrase "Term of Agreement" shall refer to the
period commencing on the date hereof and ending on __________________________
(or any extension thereof pursuant to the preceding sentence).
3. Change in Control
No benefit shall be payable hereunder (and Sections 4 through 11, 18,
and 20 shall not be applicable) unless a change in control of the Company shall
have occurred within the Term of Agreement and the Executive's employment by the
Company shall have been terminated within three years thereafter, whether or not
within the Term of Agreement. For purposes of this Agreement, a "change in
control of the Company" shall mean a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A of Regulation
14A (or any similar item or successor schedule, form, or report) promulgated
under the Securities Exchange Act of 1934 as amended ("Exchange Act"); provided
that, without limitation, such a change in control shall be deemed to have
occurred if and at such times as (i) any "person" (as such term is used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) becomes the beneficial
owner, directly or indirectly, of securities of the Company presenting 30% or
more of the combined voting power of the Company's then outstanding securities,
or (ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board
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cease for any reason to constitute at least a majority (i.e., more than
one-half) thereof unless the election, or the nomination for election by the
Company's shareholders, of each new director during such two-year period was
approved by an affirmative vote of at least two-thirds of the directors then
still in office who were directors at the beginning of said two-year period.
4. Notice of Termination; Date of Termination
(a) Any termination of the Executive's employment by the Company or the
Executive shall be communicated by written Notice of Termination to the other
party thereto. For purposes of this Agreement, a "Notice of Termination" shall
mean a 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 employment under the
provision so indicated.
(b) "Date of Termination" shall mean:
(i) If the Agreement is terminated for Disability, thirty
days after Notice of Termination is given (provided
that the Executive shall not have returned to the
performance of his or her duties on a full-time basis
during such thirty-day period),
(ii) If the Executive's employment is terminated pursuant to
Section 10, the date specified in the Notice of
Termination, and
(iii) If the Executive's employment is terminated for any
other reason, the date on which a Notice of Termination
is given; provided that if within thirty days after any
Notice of Termination is given the party receiving such
Notice of Termination notifies the other party that a
dispute exists concerning the termination, the Date of
Termination shall be the date on which the dispute is
finally determined, either by mutual written agreement
of the parties, by a binding and final arbitration
award or by a final judgment, order or decree of a
court of competent jurisdiction (the time for appeal
therefrom having expired and no appeal having been
perfected).
5. Compensation After Change in Control
Immediately after any change in control of the Company, the Executive
shall be entitled to receive for the remainder of the Term of Agreement (as
extended) an annual base salary (the "Base Salary"), payable in equal
semi-monthly, bi-weekly, or weekly installments, at an annual rate at least
equal to the aggregate annual base salary payable to the Executive as of the
date hereof. The Base Salary may be increased (but may not be decreased) at any
time and from time to time by action of the Board of Directors of the Company,
any committee thereof, or any individual having authority to take such action,
in accordance with the Company's regular practices. Any increase in the Base
Salary shall not serve to limit or reduce any other obligation of the Company
hereunder.
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6. Benefit Plans
Immediately after a change in control of the Company,
(a) The Company agrees to continue in effect any perquisite, benefit or
compensation plan (including its annual bonus plan, long-term incentive plan,
section 401(k) plan, dental plan, life insurance plan, health and accident plan,
disability plan, 401(k) Plus Plan, or deferred compensation plan) in which the
Executive is currently participating (collectively referred to as the "Benefit
Plans"); or to maintain plans providing substantially similar benefits, unless
the continuation of any such plan (or similar plan) would not, in the good faith
discretion of the Company, be an economically reasonable decision, taking into
account all facts and circumstances;
(b) Other than as provided in paragraph (a), the Company agrees not to
take any action that would adversely affect the Executive's participation in, or
materially reduce the benefits under, any of the Benefit Plans or deprive the
Executive of any material fringe benefit currently enjoyed; and
(c) The Company agrees to provide the Executive with the number of paid
vacation days to which he or she is entitled on the basis of years of service
with the Company in accordance with the Company's normal vacation policy in
effect on the date hereof.
7. Termination for Cause
(a) Following a change in control, the Company may terminate the
Executive's employment for Cause. For the purposes of this Agreement, the
Company shall have "Cause" to terminate employment hereunder only (i) if
termination shall have been the result of an act or acts of dishonesty by the
Executive constituting a felony and resulting or intended to result directly or
indirectly in substantial gain or personal enrichment at the expense of the
Company; or (ii) upon the willful and continued failure by the Executive
substantially to perform his or her duties with the Company (other than any such
failure resulting from incapacity due to mental or physical illness) after a
demand in writing for substantial performance is delivered by the Board, which
demand specifically identifies the manner in which the Board believes that the
Executive has not substantially performed his or her duties, and such failure
results in demonstrably material injury to the Company. The Executive's
employment shall in no event be considered to have been terminated by the
Company for Cause if such termination took place as the result of (i) bad
judgment or negligence, or (ii) any act or omission without intent of gaining
therefrom directly or indirectly a profit to which the Executive was not legally
entitled, or (iii) any act or omission believed in good faith to have been in or
not opposed to the interest of the Company, or (iv) any act or omission in
respect of which a determination be made that the Executive met the applicable
standard of conduct prescribed for indemnification or reimbursement or payment
of expenses under the Regulations of the Company or the laws of the State of
Ohio, in each case as in effect at the time of such act or omission. The
Executive shall not be deemed to have been terminated for Cause unless and until
there shall have been delivered to him or her a copy of a resolution duly
adopted by the affirmative vote of not less than three-quarters of the entire
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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 or
her, together with his or her 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 clauses (i) or (ii) of the second sentence of this paragraph
and specifying the particulars thereof in detail.
(b) If the Executive's employment shall be terminated for Cause, the
Company shall pay the Executive his or her full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is given and
the Company shall have no further obligations to the Executive under this
Agreement.
8. Termination for Death or Disability
(a) The Company may terminate this Agreement on account of the
Executive's death, or for "Disability" if the Executive is "Disabled." For
purposes of this Agreement, the Executive shall be considered Disabled only if,
as a result of his or her incapacity due to physical or mental illness, he or
she shall have been absent from his or her duties with the Company on a
full-time basis for a period of one year and a physician selected by him or her
is of the opinion that (i) he is suffering from "Total Disability" as defined in
the Company's Pension Plan, or any successor plan or program and (ii) he or she
will qualify for Social Security Disability Payment and (iii) within thirty days
after written notice of termination is given, he or she shall not have returned
to the full-time performance of his or her duties.
(b) If the Company terminates this Agreement on account of the
Executive's death or because the Executive is Disabled, the Company shall pay to
the Executive (or his or her successors) the amounts, and provide to the
Executive the benefits, specified in Sections 5 and 6 of this Agreement for the
remainder of the Term of Agreement.
9. Termination Following Retirement
(a) This Agreement will terminate upon the Executive's Retirement. For
purposes of this Agreement, "Retirement" shall mean termination of the
Executive's employment with his or her consent in accordance with the Company's
retirement policy (including early retirement) generally applicable to its
salaried employees or in accordance with any retirement arrangement established
with the Executive's consent with respect to him or her.
(b) In the event this Agreement terminates upon the Executive's
Retirement, the Company shall have no further obligation to the Executive under
this Agreement.
10. Termination of Employment by the Executive for Good Reason
(a) The Executive may terminate his or her employment for Good Reason.
For purposes of this Agreement, Good Reason will exist if any one or more of the
following occur:
(i) Failure by the Company to honor any of its obligations
under Sections 5, 6, or 12; or
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(ii) Any purported termination by the Company of the
Executive's employment that is not effected pursuant to
a Notice of Termination satisfying the requirements of
Section 4 above and, for purposes of this Agreement, no
such purported termination shall be effective; or
(iii) Failure to elect or reelect or otherwise to maintain
the Executive to the office or the position (or a
substantially equivalent office or position) in the
Company that the Executive held immediately prior to a
change in control, or the removal of the Executive as a
Director of the Company (or any successor thereto) if
the Executive shall have been a Director of the Company
immediately prior to the change in control; or
(iv) An adverse change in the nature or scope of the
authorities, powers, functions, responsibilities or
duties attached to the position with the Company which
the Executive held immediately prior to the change in
control, (including but not limited to assignment by
the Company to the Executive of duties inconsistent
with his or her current positions, duties,
responsibilities, and status with the Company or a
change of his or her reporting responsibilities,
titles, or offices currently in effect) without the
prior written consent of the Executive, which is not
remedied within 10 calendar days after receipt by the
Company of written notice from the Executive of such
change; or
(v) A determination by the Executive made in good faith
that as a result of a change in control and a change in
circumstances thereafter significantly affecting his or
her position, including without limitation a change in
the scope of the business or other activities for which
he or she was responsible immediately prior to a change
in control, he or she has been rendered substantially
unable to carry out, has been substantially hindered in
the performance of, or has suffered a substantial
reduction in, any of the authorities, powers,
functions, responsibilities or duties attached to the
position held by the Executive immediately prior to the
change in control, which situation is not remedied
within 10 calendar days after written notice to the
Company from the Executive of such determination; or
(vi) The Company shall relocate its principal executive
offices, or require the Executive to have his or her
principal location of work changed, to any location
which is in excess of 50 miles from the location
thereof immediately prior to the change of control or
to travel away from his or her office in the course of
discharging his or her responsibilities or duties
hereunder significantly more (in terms of either
consecutive days or aggregate days in any calendar
year) than was required of him or her prior to the
change of control without, in either case, his or her
prior written consent.
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11. Compensation Upon Certain Terminations
(a) If the Company shall terminate the Executive's employment other than
pursuant to Sections 7, 8, or 9 hereof or if the Executive shall terminate his
or her employment for Good Reason pursuant to Section 10 hereof, then the
Company shall pay to the Executive in a lump sum on the fifth business day
following the Date of Termination, the following amounts:
(i) The Executive's Base Salary through the Date of
Termination at the rate in effect at the time Notice of
Termination is given;
(ii) In lieu of any further salary payments for periods
subsequent to the Date of Termination, an amount equal
to two times the Executive's current Base Salary (which
for these purposes shall include the average
contributions made by the Company to the Executive's
401(k) Plan and 401(k) Plus Plan for the preceding five
years); and
(iii) All legal fees and expenses incurred as a result of
such termination (including all such fees and expenses,
if any, incurred in contesting or disputing any such
termination, in seeking to obtain or enforce any right
or benefit provided by this Agreement, or in
interpreting this Agreement).
(b) If the Company shall terminate the Executive's employment other than
pursuant to Sections 7, 8, or 9 hereof or if the Executive shall terminate his
or her employment for Good Reason pursuant to Section 10 hereof, all unvested
stock options, stock appreciation rights, and restricted stock awards shall
immediately vest in full and, in the case of options or stock appreciation
rights, be exercisable for a period of three years following such termination,
provided that in no event shall the option or stock appreciation right be
exercisable after the latest date on which such option or right would have
expired pursuant to its original terms.
12. Successors, Binding Agreement
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, by agreement in form and substance
satisfactory to the Executive, to expressly 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 breach of this Agreement and shall entitle the Executive
to compensation from the Company in the same amount and on the same terms as
would apply if the Executive terminated his or her employment for Good Reason,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination. As
used in this Agreement, "Company" shall mean the Company as hereinbefore defined
and any successor to its business and/or assets as aforesaid that executes and
delivers the agreement provided for in this section or which otherwise becomes
bound by all the terms and provisions of
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this Agreement by operation of law. 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 still be payable
hereunder had the Executive continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to his or her devisee, legatee, or other designee or, if there be no
such designee, to his or her estate.
13. Notice
Notices and all other communications provided for in this Agreement
shall be in writing and shall be deemed to have been duly given when delivered
or mailed by United States registered mail, return receipt requested, postage
prepaid, addressed to the respective addresses set forth on the first page of
this Agreement, provided that all notices to the Company shall be directed to
the attention of the Secretary of the Company, 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.
14. 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 such officer as may be specifically designated by the Board of
Directors of the Company. 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 agreement 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. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Ohio.
15. Validity
The invalidity or unenforceability of any one or more provisions of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement, which shall remain in full force and effect.
16. 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 instrument.
17. Arbitration
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Cleveland, Ohio in
accordance with the rules of the American Arbitration Association then in
effect; provided that all arbitration expenses shall be
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borne by the Company. Notwithstanding the pendency of any dispute or controversy
concerning termination or the effects thereof, the Company will continue to pay
the Executive his or her full compensation in effect immediately before any
Notice of Termination giving rise to the dispute was given and continue him or
her as a participant in all compensation, benefit and insurance plans in which
he or she was then participating, until the dispute is finally resolved. Amounts
paid under this paragraph are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement. Judgment may be entered on the arbitrators' award in any court
having jurisdiction; provided, however, that the Executive shall be entitled to
seek specific performance of his or her right to be paid until the Date of
Termination during the pendency of any dispute or controversy arising under or
in connection with this Agreement.
18. Limitation on Benefits
Anything in this Agreement to the contrary notwithstanding, if any of
the payments provided for in this Agreement (when added to any other payments
that the Executive has the right to receive from the Company) would constitute a
"parachute payment" (as defined in section 280G(b)(2) of the Internal Revenue
Code (the "Code")), the payments pursuant to this Agreement shall be reduced to
the largest amount as will result in no portion of such payments (or any other
payments that the Executive has the right to receive from the Company) being
subject to the excise tax imposed by section 4999 of the Code; provided,
however, that the determination of which such payments shall be reduced shall be
made first by the Executive and, only in the event of his or her failure to do
so, by the Company.
19. Withholding of Taxes
The Company may withhold from any amounts payable under this Agreement
all federal, state, city or other taxes as shall be required pursuant to any law
or government regulation or ruling.
20. Legal Fees and Expenses
It is the intent of the Company that the Executive not be required to
incur the legal expenses associated with (i) the interpretation of any provision
in, or obtaining of any right or benefit under, this Agreement or (ii) the
enforcement of his or her rights under this Agreement by litigation or other
legal action, because the cost and expense thereof would substantially detract
from the benefits intended to be extended to the Executive hereunder.
Accordingly, the Company irrevocably authorizes the Executive from time to time
to retain counsel of his or her choice, at the expense of the Company as
hereafter provided, to represent the Executive in connection with the
interpretation or enforcement of this Agreement, including the initiation or
defense of any litigation or other legal action, whether by or against the
Company or any Director, officer, stockholder or other person affiliated with
the Company, in any jurisdiction. Notwithstanding any existing or prior
attorney-client relationship between the Company and such counsel, the Company
irrevocably consents to the Executive's entering into an attorney-client
relationship with such counsel, and in that connection the Company and the
Executive agree that a confidential relationship shall exist between the
Executive and such counsel. The Company
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shall pay or cause to be paid and shall be solely responsible for any and all
attorneys' and related fees and expenses incurred by the Executive under this
Section 20.
ROYAL APPLIANCE MFG. CO.
BY: ________________________________________
____________________________________________
Executive
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