EXHIBIT 10(iii)(k)
AGREEMENT
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THIS AGREEMENT, dated as of October 1, 1999, is made by and between
Xxxxxxxxx World Industries, Inc., a Pennsylvania corporation (the "Company"),
and **FirstName** **LastName** (the "Executive").
WHEREAS, the Board considers it essential to the best interests of the
Company to xxxxxx the continued employment of key management personnel; and
WHEREAS, the Board recognizes that, as is the case with many publicly held
corporations, the possibility of a Change in Control exists and that such
possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of management personnel
to the detriment of the Company; and
WHEREAS, the Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of members of the
Company's management, including the Executive, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change in Control;
NOW, THEREFORE, in consideration of the premises and the mutual covenants
herein contained, the Company and the Executive hereby agree as follows:
1. Defined Terms. The definitions of capitalized terms used in this
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Agreement are provided in the last Section hereof.
2. Term of Agreement. This Agreement shall commence on the date hereof
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and shall continue in effect through September 30, 2002; provided, however, that
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commencing on October 1, 2000 and each October 1 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless, not
later than June 30 of that year, the Company or the Executive shall have given
notice not to extend this Agreement or a Change in Control shall have occurred
prior to such October 1; and further provided, however, that if a Change in
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Control shall have occurred during the term of this Agreement, this Agreement
shall continue in effect for a period of not less than thirty-six (36) months
beyond the month in which such Change in Control occurred.
3. Company's Covenants Summarized. In order to induce the Executive to
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remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company agrees, under the
conditions described herein, to pay the Executive the Severance Payments and the
other payments and benefits described herein. Except as provided in Section 10.1
hereof, no amount or benefit shall be payable under this Agreement unless there
shall have been (or, under the terms of the second sentence of Section 6.1
hereof, there shall be deemed to have been) a termination of the Executive's
employment with the Company following a Change in Control and during the term of
this Agreement. This Agreement shall not be construed as creating an express or
implied contract of employment and, except as otherwise agreed in writing
between the Executive and the Company, the Executive shall not have any right to
be retained in the employ of the Company.
4. The Executive's Covenants. The Executive agrees that, subject to the
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terms and conditions of this Agreement, in the event of a Potential Change in
Control during the term of this Agreement, the Executive will remain in the
employ of the Company until the earliest of (i) a date which is six (6) months
after the date of such Potential Change in Control, (ii) the date of a Change in
Control, (iii) the date of termination by the Executive of the Executive's
employment for Good Reason or by reason of death or Disability, or (iv) the
termination by the Company of the Executive's employment for any reason.
5. Compensation Other Than Severance Payments.
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5.1. Following a Change in Control and during the term of this Agreement,
during any period that the Executive fails to perform the Executive's full-time
duties with the Company as a result of incapacity due to physical or mental
illness, the Company shall pay the Executive's full salary to the Executive at
the rate in effect at the commencement of any such period, together with all
compensation and benefits payable to the Executive under the terms of any
compensation or benefit plan, program or arrangement maintained by the Company
during such period, until the Executive's employment is terminated by the
Company for Disability.
5.2. If the Executive's employment shall be terminated for any reason
following a Change in Control and during the term of this Agreement, the Company
shall pay the Executive's full salary to the Executive through the Date of
Termination at the rate in effect immediately prior to the Change in Control or
at the time the Notice of Termination is given, whichever is greater, together
with all compensation and benefits to which the Executive is entitled in respect
of all periods preceding the Date of Termination under the terms of the
Company's compensation and benefit plans, programs or arrangements.
5.3. If the Executive's employment shall be terminated for any reason
following a Change in Control and during the term of this Agreement, the Company
shall pay to the Executive the Executive's normal post-termination compensation
and benefits as such payments become due. Such post-termination compensation and
benefits shall be determined under, and paid in accordance with, the Company's
retirement, insurance and other compensation or benefit plans, programs and
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arrangements as in effect immediately prior to the Change in Control or, if more
favorable to the Executive, as in effect immediately prior to the Date of
Termination.
6. Severance Payments.
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6.1. The Company shall pay the Executive the payments described in this
Section 6.1 (the "Severance Payments") upon the termination of the Executive's
employment following a Change in Control and during the term of this Agreement,
in addition to any payments and benefits to which the Executive is entitled
under Section 5 and 8 hereof, unless such termination is (i) by the Company for
Cause, (ii) by reason of death or Disability, or (iii) by the Executive without
Good Reason. For purposes of this Agreement, the Executive's employment shall be
deemed to have been terminated by the Company without Cause or by the Executive
with Good Reason following a Change in Control if (i) the Executive's employment
is terminated without Cause prior to a Change in Control which actually occurs
during the term of this Agreement and such termination was at the request or
direction of a Person who has entered into an agreement with the Company the
consummation of which would constitute a Change in Control, (ii) the Executive
terminates his employment with Good Reason prior to a Change in Control which
actually occurs during the term of this Agreement and the circumstance or event
which constitutes Good Reason occurs at the request or direction of such Person,
(iii) the Executive's employment is terminated by the Company without Cause or
by the Executive for Good Reason prior to a Change in Control and the Executive
reasonably demonstrates that such termination is otherwise in connection with or
in anticipation of a Change in Control which actually occurs during the term of
this Agreement; provided that any termination of the Executive's employment by
the Company without Cause or by the Executive for Good Reason within the six (6)
month period immediately preceding a Change in Control which actually occurs
during the term of this Agreement shall be presumed to be a termination by the
Company without Cause or by the Executive for Good Reason following a Change in
Control, or (iv) the Executive's employment is terminated without Cause after a
Potential Change in Control of the type described in paragraph (I) of the
definition of "Potential Change in Control".
(A) In lieu of any further salary payments to the Executive for
periods subsequent to the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive, the Company shall pay to the
Executive a lump sum severance payment, in cash, equal to three (3) times
the sum of (i) the higher of the Executive's annual base salary in effect
immediately prior to the occurrence of the event or circumstance upon which
the Notice of Termination is based or the Executive's annual base salary in
effect immediately prior to the Change in Control (the "Change in Control
Salary"), and (ii) the higher of the highest annual bonus earned by the
Executive pursuant to any annual bonus or incentive plan maintained by the
Company in respect of the
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three (3) years immediately preceding that year in which the Date of
Termination occurs or the highest annual bonus so earned in respect of the
three (3) years immediately preceding that in which the Change in Control
occurs (the "Change in Control Bonus").
(B) Notwithstanding any provision of any annual incentive plan to
the contrary, the Company shall pay to the Executive a lump sum amount, in
cash, equal to a pro rata portion to the Date of Termination of the value
of the target incentive award under such plan for the then uncompleted
period under such plan, calculated by multiplying the Executive's target
award by the fraction obtained by dividing the number of full months and
any fractional portion of a month during such performance award period
through the Date of Termination by the total number of months contained in
such performance award period.
(C) The Company shall (i) establish an irrevocable grantor trust
holding an amount of assets sufficient to pay all such remaining premiums
owed by the Company (which trust shall be required to pay such premiums),
under any insurance policy insuring the life of the Executive under any
"split dollar" insurance arrangement in effect between the Executive and
the Company, and (ii) assign its interest in such policy or policies to the
grantor trust.
(D) In addition to the retirement benefits to which the Executive
is entitled under each Pension Plan or any successor plan thereto, the
Company shall pay the Executive a lump sum amount, in cash, equal to the
excess of (i) the actuarial equivalent of the aggregate retirement pension
(taking into account any early retirement subsidies associated therewith
and determined as a straight life annuity commencing at the date (but in no
event earlier than the third anniversary of the Date of Termination) as of
which the actuarial equivalent of such annuity is greatest) which the
Executive would have accrued under the terms of all Pension Plans (without
regard to any amendment to any Pension Plan made subsequent to the earlier
of a Potential Change in Control or a Change in Control and on or prior to
the Date of Termination, which amendment adversely affects in any manner
the computation of retirement benefits thereunder), determined as if the
Executive were fully vested thereunder and had accumulated (after the Date
of Termination) thirty-six (36) additional months of age and service credit
thereunder and had been credited under each Pension Plan during such period
with compensation at the higher of (1) the Executive's compensation (as
defined in such Pension Plan) during the twelve (12) months immediately
preceding the Date of Termination or (2) the Executive's compensation (as
defined in such Pension Plan) during the twelve (12) months immediately
preceding the Change in Control, over (ii) the actuarial equivalent of the
aggregate retirement pension (taking into account any early retirement
subsidies associated therewith and determined as a straight life annuity
commencing at the date (but in no event earlier than the Date of
Termination) as
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of which the actuarial equivalent of such annuity is greatest) which the
Executive had accrued pursuant to the provisions of the Pension Plans as of
the Date of Termination; provided, that the actuarial equivalent of such
payment shall reduce the amount of the benefit enhancement to which the
Executive may be entitled under the Company's Retirement Benefit Equity
Plan due to enhanced Change in Control benefits under Article I, Section
(35), Article VI, Section (2), Article VI, Section (7), and Article VII,
Section (6) of the Company's Retirement Income Plan. For purposes of this
Section 6.1(D), "actuarial equivalent" shall be determined using the same
assumptions utilized under the Company's Retirement Income Plan immediately
prior to the Change in Control, to determine lump sum present values under
Article VII, Section (7) of the Company's Retirement Income Plan.
(E) For the thirty-six (36) month period immediately following
the Date of Termination, the Company shall arrange to provide the Executive
(which includes the Executive's eligible dependents for purposes of this
paragraph (E)) with life, disability, accident and health insurance
benefits substantially similar to those which the Executive was receiving
immediately prior to the Notice of Termination (without giving effect to
any amendment to such benefits made subsequent to the earlier of a
Potential Change in Control or a Change in Control which amendment
adversely affects in any manner the Executive's entitlement to or the
amount of such benefits); provided, however, that, unless the Executive
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consents to a different method, such health insurance benefits shall be
provided through a third-party insurer. Benefits otherwise receivable by
the Executive pursuant to this Section 6.1(E) shall be reduced to the
extent comparable benefits (including continued coverage for any
preexisting medical condition of any person covered by the benefits
provided to the Executive and his eligible dependents immediately prior to
the Notice of Termination) are actually received by or made available to
the Executive by a subsequent employer without cost during the thirty-six
(36) month period following the Executive's termination of employment (and
any such benefits actually received by or made available to the Executive
shall be reported to the Company by the Executive).
(F) If the Executive would have become entitled to benefits under
the Company's post-retirement health care or life insurance plans (as in
effect immediately prior to a Potential Change in Control, the Change in
Control or the Date of Termination, whichever is most favorable to the
Executive) had the Executive's employment terminated at any time during the
period of thirty-six (36) months after the Date of Termination, the Company
shall provide such post-retirement health care or life insurance benefits
to the Executive (subject to any employee contributions required under the
terms of such plans at the level in effect immediately prior to the Change
in Control or the Date of Termination, whichever is more favorable to the
Executive) commencing on the later of (i) the
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date that such coverage would have first become available or (ii) the date
that benefits described in subsection (E) of this Section 6.1 terminate.
(G) The Company will pay the Executive, at a daily salary rate
calculated from the higher of the Executive's annual base salary in effect
immediately prior to the occurrence of the event or circumstance upon which
the Notice of Termination is based or the Executive's annual base salary in
effect immediately prior to the Change in Control, an amount equal to all
unused vacation days which would have been earned had the Executive
continued employment through December 31 of the year in which the Date of
Termination occurs.
(H) The Company shall pay the reasonable fees and expenses of a
full service nationally recognized executive outplacement firm until the
earlier of the date the Executive secures new employment or the date which
is thirty-six (36) months following the Executive's Date of Termination;
provided, that in no event shall the aggregate amount of such payment be
greater than 20% of the Executive's Change in Control Salary.
6.2. (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
otherwise) (a "Payment") would be subject to the excise tax imposed by
Section 4999 of the Code or any interest or penalties are incurred by the
Executive with respect to the 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 respect thereto)
and Excise Tax imposed on 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 6.2(C), all
determinations required to be made under this Section 6.2, including
whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment, shall be made by a nationally recognized accounting firm
designated by the Company (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the Executive
within fifteen (15) business days after there has been a Payment, or such
earlier time as requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or
group effecting the Change in Control, the Company shall appoint another
nationally recognized accounting firm to make the
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determinations required hereunder (which accounting firm shall then be
referred
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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 6, shall be paid by the Company to
the Executive within five days of the receipt of the Accounting Firm's
determination. 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 6.2(C) and the Executive thereafter is required to make
a payment of any Excise Tax, the Accounting Firm shall determine the amount
of the 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 (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 it gives such
notice to the Company (or such shorter period ending on the date 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;
provided, however, that the Company shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection
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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 6.2(C), the Company shall control all
proceedings taken in connection with such contest and, at its sole option,
may pursue or forego 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
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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 6.2(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
6.2(C)) promptly pay to the Company the 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 6.2(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.
6.3. The payments provided for in subsections (A), (B), (C), (D) and (G) of
Section 6.1 hereof shall be made not later than the thirtieth (30th) day
following the Date of Termination; provided, however, that if the amounts of
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such payments cannot be finally determined on or before such day, the Company
shall pay to the Executive on such day an estimate, as determined in good faith
by the Executive of the minimum
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amount of such payments to which the Executive is clearly entitled and shall pay
the remainder of such payments (together with interest at 120% of the rate
provided in Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can
be determined but in no event later than the thirtieth (30th) day after the Date
of Termination; provided, however, that in the event the Executive becomes
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entitled to Severance Payments pursuant to the second sentence of Section 6.1
(except for a termination occurring with respect to clause (iv) of such
sentence, which shall be paid as set forth above) such payments shall be due and
payable within thirty (30) days following the actual Change in Control that
triggered the Severance Payments. In the event that the amount of the estimated
payments exceeds the amount subsequently determined to have been due, such
excess shall constitute a loan by the Company to the Executive, payable on the
fifth (5th) business day after demand by the Company (together with interest at
120% of the rate provided in Section 1274(b)(2)(B) of the Code). In the event
the Company should fail to pay when due the amounts described in subsections
(A), (B), (C), (D) and (G) of Section 6.1 hereof, the Executive shall also be
entitled to receive from the Company an amount representing interest on any
unpaid or untimely paid amounts from the due date, as determined under this
Section 6.3 (without regard to any extension of the Date of Termination pursuant
to Section 7.3 hereof), to the date of payment at a rate equal to 120% of the
rate provided in Section 1274(b)(2)(B) of the Code.
6.4. The Company also shall pay to the Executive all legal fees and
expenses incurred by the Executive in disputing in good faith any issue
hereunder relating to the termination of the Executive's employment, in seeking
in good faith to obtain or enforce any benefit or right provided by this
Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of Section 4999 of the Code to any payment or
benefit provided hereunder. Such payments shall be made within five (5) business
days after delivery of the Executive's written requests for payment accompanied
with such evidence of fees and expenses incurred as the Company reasonably may
require.
7. Termination Procedures and Compensation During Dispute.
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7.1. Notice of Termination. After a Potential Change in Control or, if
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there is no Potential Change in Control, after a Change in Control and during
the term of this Agreement, any purported termination of the Executive's
employment (other than by reason of death) shall be communicated by written
Notice of Termination from one party hereto to the other party hereto in
accordance with Section 11 hereof. 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 the
Executive's employment under the provision so indicated. Further, a Notice of
Termination for Cause is required to include a copy of a resolution duly adopted
by the affirmative vote of not less than three-quarters (3/4) of the entire
membership of the Board at a meeting of the Board which was called and held for
the purpose of considering such termination (after reasonable notice to the
Executive and
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an opportunity for the Executive, together with the Executive's 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 in clause (i) or (ii) of the
definition of Cause herein, and specifying the particulars thereof in detail.
7.2. Date of Termination. "Date of Termination," with respect to any
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purported termination of the Executive's employment after a Change in Control
and during the term of this Agreement, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that the Executive shall not have returned to the
full-time performance of the Executive's duties during such thirty (30) day
period), and (ii) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty (30) days (except in
the case of a termination for Cause) and, in the case of a termination by the
Executive, shall not be less than fifteen (15) days nor more than sixty (60)
days, respectively, from the date such Notice of Termination is given).
7.3. Dispute Concerning Termination. If within fifteen (15) days after any
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Notice of Termination is given, or, if later, prior to the Date of Termination
(as determined without regard to this Section 7.3), the party receiving such
Notice of Termination notifies the other party that a dispute exists concerning
the termination, the Date of Termination shall be extended until the date on
which the dispute is finally resolved, either by mutual written agreement of the
parties or by a final judgment, order or decree of an arbitrator or a court of
competent jurisdiction (which is not appealable or with respect to which the
time for appeal therefrom has expired and no appeal has been perfected);
provided, however, that the Date of Termination shall be extended by a notice of
dispute given by the Executive only if such notice is given in good faith and
the Executive pursues the resolution of such dispute with reasonable diligence.
7.4. Compensation During Dispute. If a purported termination occurs
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following a Change in Control and during the term of this Agreement and the Date
of Termination is extended in accordance with Section 7.3 hereof, the Company
shall continue to pay the Executive the full compensation in effect when the
notice giving rise to the dispute was given (including, but not limited to,
salary) and continue the Executive as a participant in all compensation, benefit
and insurance plans in which the Executive was participating when the notice
giving rise to the dispute was given, until the Date of Termination, as
determined in accordance with Section 7.3 hereof. Amounts paid under this
Section 7.4 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.
8. Acceleration of Certain Stock-Based Benefits.
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(A) Upon the occurrence of a Change in Control, all unvested options with
respect to the Company's stock held by the Executive shall vest and become
immediately exercisable and will be exercisable for a period ending on the later
of (i) the fifth anniversary of such Change in Control or (ii) the last date
that such option would otherwise be exercisable under the terms of the option
agreement or the plan pursuant to which such option was granted; provided, that
in no event shall any option be exercisable after the expiration of the original
term of the option.
(B) Upon the occurrence of a Change in Control, all unearned performance
restricted shares held by the Executive under the Company's Stock Plan shall be
deemed to have been earned to the maximum extent permitted under the Stock Plan
for any performance period not then completed and all earned but unvested
performance restricted shares, including those deemed to be earned pursuant to
this sentence, and all unvested restricted stock awards shall immediately vest
and the restrictions on all shares subject to restriction shall lapse.
(C) For purposes of the Stock Plan and any stock option plan pursuant to
which any stock options, performance restricted shares or restricted stock
awards have been issued, this Agreement, which has been approved by the
Management Development and Compensation Committee of the Board, shall constitute
an amendment of the agreement or other instruments pursuant to which such stock
options, performance restricted shares and restricted stock awards were issued
in accordance with the terms of such plans. Notwithstanding the foregoing, in
the event that this Section 8(C) is determined for any reason to be inconsistent
with the terms of any plan pursuant to which such stock options, performance
restricted shares and restricted stock awards were issued, the terms of this
Agreement shall supersede the terms of such plan.
9. No Mitigation. The Company agrees that, if the Executive's employment
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with the Company terminates during the term of this Agreement, the Executive is
not required to seek other employment or to attempt in any way to reduce any
amounts payable to the Executive by the Company pursuant to Section 6 hereof or
Section 7.4 hereof. Further, the amount of any payment or benefit provided for
in this Agreement (other than Section 6.1(E) hereof) shall not be reduced by any
compensation earned by the Executive as the result of employment by another
employer, by retirement benefits, by offset against any amount claimed to be
owed by the Executive to the Company, or otherwise.
10. Successors; Binding Agreement.
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10.1. In addition to any obligations imposed by law upon any successor to
the Company, the Company will require any successor (whether direct or indirect,
by purchase, merger, consolidation or otherwise) to all or substantially all of
the business
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and/or assets of the Company 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 assumption and 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 the Executive would be entitled to hereunder if the Executive were to
terminate the Executive's employment for Good Reason after a Change in Control,
except that, for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of Termination.
10.2. 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 shall
die while any amount would still be payable to the Executive hereunder (other
than amounts which, by their terms, terminate upon the death of the Executive)
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 executors, personal representatives or administrators of the Executive's
estate.
11. Notices. For the purpose of this Agreement, notices and all other
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communications provided for in the 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, if to the
Executive, to the address shown for the Executive in the personnel records of
the Company and, if to the Company, to the address set forth below, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon actual receipt:
To the Company:
Xxxxxxxxx World Industries, Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000
Attention: General Counsel
12. Miscellaneous. No provision of this Agreement may be modified, waived
-------------
or discharged unless such waiver, modification or discharge is agreed to in
writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or of any lack of 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. This
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Agreement supersedes any other agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof which have been
made by either party. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the Commonwealth of
Pennsylvania. All references to sections of the Exchange Act or the Code shall
be deemed also to refer to any successor provisions to such sections. Any
payments provided for hereunder shall be paid net of any applicable withholding
required under federal, state or local law and any additional withholding to
which the Executive has agreed. The obligations of the Company and the Executive
under Sections 6 and 7 hereof shall survive the expiration of the term of this
Agreement. If the Executive elects not to enter into this Agreement, he will
continue to be eligible for change in control benefits provided under the
Company's Employment Protection Plan (if applicable), Retirement Income Plan and
long-term incentive plans. The Executive agrees that this Agreement replaces the
benefits to which he may otherwise be entitled to under the Company's Employment
Protection Plan for salaried employees. The Company agrees that it will not
argue in any form for any purpose that this Agreement constitutes an "employee
benefit plan" within the meaning of Section 3(3) of the Employee Retirement
Income Security Act of 1974, as amended.
13. Validity. The invalidity or unenforceability of any provision 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.
14. Counterparts. This Agreement may be executed in several counterparts,
------------
each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
15. Settlement of Disputes; Arbitration. All claims by the Executive for
-----------------------------------
benefits under this Agreement shall be directed in writing to and determined by
the Committee, which shall give full consideration to the evidentiary standards
set forth in this Agreement. Any denial by the Committee of a claim for benefits
under this Agreement shall be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the specific provisions of
this Agreement relied upon. The Committee shall afford a reasonable opportunity
to the Executive for a review of the decision denying a claim and shall further
allow the Executive to appeal to the Committee a decision of the Committee
within sixty (60) days after notification by the Committee that the Executive's
claim has been denied. Any further dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
Allegheny County, Pennsylvania in accordance with the rules of the American
Arbitration Association then in effect; provided, however, that the evidentiary
-------- -------
standards set forth in this Agreement shall apply. Judgment may be entered on
the arbitrator's award in any court having jurisdiction. Notwithstanding any
provision of this Agreement to the contrary, the Executive shall be entitled to
seek
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specific performance of the Executive's 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.
16. Definitions. For purposes of this Agreement, the following terms
-----------
shall have the meanings indicated below:
(A) "Accounting Firm" shall have the meaning stated in Section 6.2(B)
hereof.
(B) "Beneficial Owner" shall have the meaning set forth in Rule 13d-3
under the Exchange Act.
(C) "Board" shall mean the Board of Directors of the Company.
(D) "Cause" for termination by the Company of the Executive's
employment shall mean (i) the deliberate and continued failure by the
Executive to devote substantially all the Executive's business time and
best efforts to the performance of the Executive's duties after a demand
for substantial performance is delivered to the Executive by the Board
which specifically identifies the manner in which the Executive has not
substantially performed such duties; (ii) the deliberate engaging by the
Executive in gross misconduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise, including but not
limited to fraud or embezzlement by the Executive; or (iii) the Executive's
conviction (or entering into a plea bargain admitting guilt) of any felony.
For the purposes of this Agreement, no act, or failure to act, on the part
of the Executive shall be considered "deliberate" unless done, or omitted
to be done, by the Executive not in good faith and without reasonable
belief that such action or omission was in the best interests of the
Company. In the event of a dispute concerning the application of this
provision, no claim by the Company that Cause exists shall be given effect
unless the Company establishes to the Committee by clear and convincing
evidence that Cause exists.
(E) A "Change in Control" shall be deemed to have occurred if the
event set forth in any one of the following paragraphs shall have occurred:
(I) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Company (not including in the
securities beneficially owned by such Person any securities acquired
directly from the Company or its affiliates) representing 20% or more
of either the then outstanding shares of common stock of the Company
or the combined voting power of the Company's then outstanding
securities, excluding any Person who becomes such a Beneficial Owner
in connection with a transaction described in clause (i) of paragraph
(III) below; or
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(II) the following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, on the date hereof, constitute the Board and any new
director (other than a director whose initial assumption of office is
in connection with an actual or threatened election contest, including
but not limited to a consent solicitation, relating to the election of
directors of the Company) whose appointment or election by the Board
or nomination for election by the Company's shareholders was approved
by a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors on the date hereof or whose
appointment, election or nomination for election was previously so
approved; or
(III) there is consummated a merger or consolidation of the
Company (including a triangular merger to which the Company is a
party) with any other corporation other than (i) a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior to such merger or consolidation
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity or any parent
thereof) at least 66 2/3% of the combined voting power of the voting
securities of the Company or such surviving entity or any parent
thereof outstanding immediately after such merger or consolidation, or
(ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
Person is or becomes the Beneficial Owner, directly or indirectly, of
securities of the Company (not including in the securities
Beneficially Owned by such Person any securities acquired directly
from the Company or its subsidiaries) representing 20% or more of
either the then outstanding shares of common stock of the Company or
the combined voting power of the Company's then outstanding
securities; or
(IV) the shareholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an
agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets, other than a sale or
disposition by the Company of all or substantially all of the
Company's assets to an entity, at least 75% of the combined voting
power of the voting securities of which are owned by shareholders of
the Company in substantially the same proportions as their ownership
of the Company immediately prior to such sale. Notwithstanding the
foregoing, no "Change in Control" shall be deemed to have occurred if
there is consummated
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any transaction or series of integrated transactions immediately
following which the record holders of the common stock of the Company
immediately prior to such transaction or series of transactions
continue to have substantially the same proportionate ownership in an
entity which owns all or substantially all of the assets of the
Company immediately following such transaction or series of
transactions.
(F) "Change in Control Salary" shall have the meaning stated in
Section 6.1 hereof.
(G) "Change in Control Bonus" shall have the meaning stated in Section
6.1 hereof.
(H) "Code" shall mean the Internal Revenue Code of 1986, as amended
from time to time.
(I) "Committee" shall mean (i) the individuals (not fewer than three
in number) who, on the date six (6) months before a Change in Control,
constitute the Management Development and Compensation Committee of the Board,
plus (ii) in the event that fewer than three individuals are available from the
group specified in clause (i) above for any reason, such individuals as may be
appointed by the individual or individuals so available (including for this
purpose any individual or individuals previously so appointed under this clause
(ii)).
(J) "Company" shall mean Xxxxxxxxx World Industries, Inc. and, except
in determining under Section 16(E) hereof whether or not any Change in Control
of the Company has occurred, shall include its subsidiaries and any successor to
its business and/or assets which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
(K) "Date of Termination" shall have the meaning stated in Section 7.2
hereof.
(L) "Disability" shall be deemed the reason for the termination by the
Company of the Executive's employment, if, as a result of the Executive's
incapacity due to physical or mental illness, the Executive shall have been
absent from the full-time performance of the Executive's duties with the Company
for a period of six (6) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and, within thirty (30) days
after such Notice of Termination is given, the Executive shall not have returned
to the full-time performance of the Executive's duties.
(M) "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended from time to time.
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(N) "Excise Tax" shall have the meaning stated in Section 6.2(A)
hereof.
(O) "Executive" shall mean the individual named in the first paragraph
of this Agreement.
(P) "Good Reason" for termination by the Executive of the Executive's
employment shall mean the occurrence (without the Executive's express written
consent) after any Change in Control, or prior to a Change in Control under the
circumstances described in clauses (ii) or (iii) of the second sentence of
Section 6.1 hereof (treating all references in paragraphs (I) through (VII)
below to a "Change in Control" as references to a "Potential Change in
Control"), of any one of the following acts by the Company, or failures by the
Company to act, unless, in the case of any act or failure to act described in
paragraph (I), (V) , (VI) or (VII) below, such act or failure to act is
corrected prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:
(I) the assignment to the Executive of any duties inconsistent
with the Executive's status as an executive officer of the Company or a
substantial adverse alteration in the nature or status of the Executive's
responsibilities from those in effect immediately prior to the Change in
Control;
(II) a reduction by the Company in the Executive's annual base
salary as in effect on the date hereof or as the same may be increased from
time to time except for (i) across-the-board salary reductions similarly
affecting all salaried employees of the Company or (ii) across-the-board
salary reductions similarly affecting all senior executive officers of the
Company and all senior executives of any Person in control of the Company;
(III) the relocation of the Executive's principal place of
employment to a location more than 50 miles from the Executive's principal
place of employment immediately prior to the Change in Control (unless such
relocation is closer to the Executive's principal residence) or the
Company's requiring the Executive to be based anywhere other than such
principal place of employment (or permitted relocation thereof) except for
required travel on the Company's business to an extent substantially
consistent with the Executive's present business travel obligations;
(IV) the failure by the Company, to pay to the Executive any
portion of the Executive's current compensation or to pay to the Executive
any portion of an installment of deferred
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compensation under any deferred compensation program of the Company, within
seven (7) days of the date such compensation is due;
(V) the failure by the Company to continue in effect any
compensation plan in which the Executive participates immediately prior to
the Change in Control which is material to the Executive's total
compensation, including but not limited to the Company's Base Salary Plan,
Management Achievement Plan, 1984 Long-Term Stock Option Plan for Key
Employees, 1993 Long-Term Stock Incentive Plan, 1999 Long-Term Incentive
Plan, Xxxxxxxxx Deferred Compensation Plan, Retirement Income Plan and
Retirement Benefit Equity Plan, unless an equitable arrangement (embodied
in an ongoing substitute or alternative plan) has been made with respect to
such plan, or the failure by the Company to continue the Executive's
participation therein (or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms of the amount or timing
of payment of benefits provided and the level of the Executive's
participation relative to other participants, as existed immediately prior
to the Change in Control;
(VI) the failure by the Company to continue to provide the
Executive with benefits substantially similar to those enjoyed by the
Executive under any of the Company's pension, savings, life insurance,
medical, health and accident, or disability plans in which the Executive
was participating immediately prior to the Change in Control, the taking of
any action by the Company which would directly or indirectly materially
reduce any of such benefits or deprive the Executive of any material fringe
benefit enjoyed by the Executive at the time of the Change in Control, or
the failure by the Company to provide the Executive with the number of paid
vacation days to which the Executive is entitled on the basis of years of
service with the Company in accordance with the Company's normal vacation
policy in effect at the time of the Change in Control; or
(VII) any purported termination of the Executive's employment
which is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 7.1 hereof; for purposes of this Agreement, no such
purported termination shall be effective.
Notwithstanding anything herein to the contrary, a termination of
employment by the Executive for any reason during the 30-day period commencing
on the one (1) year anniversary of a Change in Control shall
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constitute Good Reason; provided, however, that solely for purposes of this
-------- -------
paragraph, the term Change in Control shall include a merger described by
Section 16(E)(III) in which the Company is the surviving corporation or parent
corporation and the holders of the voting securities of the Company outstanding
immediately prior to such merger represent less than 66 2/3% of the combined
voting power of the securities of the Company outstanding immediately after such
merger, only if an event described in Section 16(E)(II) also occurs.
The Executive's right to terminate the Executive's employment for Good
Reason shall not be affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder. For purposes of any determination regarding
the existence of Good Reason, any claim by the Executive that Good Reason exists
shall be presumed to be correct unless the Company establishes to the Committee
by clear and convincing evidence that Good Reason does not exist.
(Q) "Gross-Up Payment" shall have the meaning stated in Section 6.2(A)
hereof.
(R) "Notice of Termination" shall have the meaning stated in Section 7.1
hereof.
(S) "Payment" shall have the meaning stated in Section 6.2(A) hereof.
(T) "Pension Plan" shall mean any tax-qualified, supplemental or excess
benefit pension plan maintained by the Company and any other agreement entered
into between the Executive and the Company which is designed to provide the
Executive with supplemental retirement benefits.
(U) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) the Company or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, (iv) a
corporation owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
or (v) an entity or entities which are eligible to file and have filed a
Schedule 13G under Rule 13d-l(b) of the Exchange Act, which Schedule indicates
beneficial ownership of 15% or more of the outstanding shares of common stock of
the Company or the combined voting power of the Company's then outstanding
securities.
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(V) "Potential Change in Control" shall be deemed to have occurred if the
event set forth in any one of the following paragraphs shall have occurred:
(I) the Company enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control;
(II) the Company or any Person publicly announces an intention to
take or to consider taking actions which, if consummated, would constitute
a Change in Control; or
(III) any Person becomes the Beneficial Owner, directly or
indirectly, of securities of the Company representing 15% or more of either
the then outstanding shares of common stock of the Company or the combined
voting power of the Company's then outstanding securities (not including in
the securities beneficially owned by such Person any securities acquired
directly from the Company or its affiliates).
(W) "Severance Payments" shall mean those payments described in Section 6.1
hereof.
(X) "Stock Plan" shall mean the Company's Long-Term Stock Incentive Plan,
as the same may be amended from time to time, and any successor plan to such
plan.
(Y) "Underpayment" shall have the meaning stated in Section 6.2(B) hereof.
XXXXXXXXX WORLD INDUSTRIES, INC.
By:
----------------------------------------
Name: **ByName**
Title: **ByTitle**
-------------------------------------------
**FirstName** **LastName**
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Schedule of participating officers
Xxxxxxxxx World Industries, Inc. has entered into substantially similar
agreements with certain of its officers, including Xxxxx X. Xxxxxxx, III, Xxxx
X. Xxxxxx, Xxxxxxx X. Xxxxxxxxx, Xxxxx X. Xxxxxxx, Xxxxxxx X. Xxxxxxx, Xxxx X.
Xxxxx, X. Xxxxxx Xxxxx, Xxxxxxx X. Rodruan, Xxxxxxx X. Xxxxxxxxx. Xx. Xxxxxxx'x
agreement has been modified in that it does not include Section 6.1(C) & (D);
Xx. Xxxxx and Xx. Xxxxx do not participate in the "split dollar" insurance
arrangements referenced in Section 6.1(C); Xx. Xxxxxxx'x agreement has been
modified in that Section 6.1(A) has been modified to provide a 2X multiplier,
and Section 16(P) has been modified to remove the "modified single trigger"
provision.
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