1
Exhibit 2
AGREEMENT
THIS AGREEMENT between CBI INDUSTRIES, INC., a Delaware corporation
("CBI"), and Xxxx X. Xxxxx ("Executive"), dated this 12th day of September,
1986.
WITNESSETH THAT
WHEREAS, CBI wishes to attract and retain well-qualified executives
and both CBI and the Executive desire continuity of management in the event of
any Change in Control of CBI;
NOW, THEREFORE, it is hereby agreed by and between the parties as
follows:
1. Effective Date. The "Effective Date" of this Agreement shall be the
date on which a Change in Control of CBI (as defined in Section 2) occurs.
2. Change in Control. The term "Change in Control" shall mean the
occurrence at any time of any of the following events:
(a) An Acquiring Person (as defined below), has become such; or
(b) Continuing Directors (as defined below) cease to comprise a
majority of the board of directors of CBI.
2
For purposes of this Agreement, the terms "Acquiring Person" and
"Continuing Directors" shall have the respective meanings
ascribed to such terms in that certain Rights Agreement dated
March 4, 1986, between CBI and Xxxxxx Guaranty Trust Company of
New York as rights agent, the relevant portions of which for
convenience of reference are reproduced as Exhibit I to this
Agreement.
3. Employment. CBI hereby agrees that if the
Executive continues as an employee of CBI from the date of
execution hereof until the Effective Date, CBI shall continue
the Executive in its employ for the period commencing on the
Effective Date and ending on the earlier to occur of the third
anniversary of such date or the 65th birthday of the Executive
(the "Employment Period"), to exercise such authority and
perform such executive duties as are requested of him by CBI,
which authority and duties shall be commensurate with the
authority being exercised and duties being performed by the
Executive immediately prior to the Effective Date. The
Executive shall perform such requested services at the location
where the Executive was employed immediately prior to the
Effective Date, except for required travel on CBI's business to
an extent substantially consistent with the Executive's
business travel obligations prior to the Effective Date. The
Executive agrees that while an employee during the Employment
Period he shall, to the extent required, devote substantially
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all of his business time to his executive duties as described
herein and perform such duties faithfully and efficiently.
4. Compensation, Compensation Plans, Benefits. During the Employment
Period, the Executive shall be compensated as follows:
(a) He shall receive an annual salary (to be paid in equal biweekly
installments) which is not less than his rate of annual salary in effect
immediately prior to the Effective Date, increased on each January 1 within
the remainder of the Employment Period by at least the greater of (i) the
average annual percentage salary increase for the Executive during the
period of three full calendar years immediately preceding the Effective
Date, or (ii) the percentage increase in the Implicit Price Deflator for
Gross National Product for the calendar year immediately preceding such
January 1, as published by the United States Department of Commerce in its
Survey of Current Business in December of each year, over such Implicit
Price Deflator for the calendar year next preceding such year.
(b) He shall be awarded and receive bonus, restricted stock award,
stock option, and other incentive compensation for each calendar year (or
other applicable bonus or incentive compensation
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period) any part of which is included in the Employment Period, which in
the aggregate shall not in value be a lesser percentage of his annual
salary, as determined in subsection (a) above, for such calendar year (or
period), than the aggregate bonus, restricted stock award, stock option,
and other incentive compensation during the period of three full calendar
years immediately preceding the Effective Date was of the Executive's
aggregate base salary for such three year period.
(c) He shall be entitled to receive all employee benefits to the extent
of the greater of the employee benefits provided by CBI to executives with
comparable duties or the employee benefits to which he was entitled
immediately prior to the Effective Date.
(d) During any period that Executive is unable to perform the services
for CBI specified in Section 3, whether as a result of total disability or
as a result of a physical or mental disability that is not total or is not
permanent and therefore is not a total disability, Executive shall continue
to receive base salary at the rate in effect at the commencement of any
such period, together with all other compensation and benefits that are
payable under this Agreement.
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(e) He shall be furnished at CBI's expense with an automobile, office,
reasonable secretarial help, club memberships, reimbursement for reasonable
entertainment expenses, and such other supplies, equipment, facilities,
services and emoluments appertinent to his position to the extent of the
greater of such emoluments provided by CBI to executives with comparable
duties or the emoluments to which he was entitled immediately prior to the
Effective Date.
(f) He shall be covered by directors and officers liability and
indemnity insurance or equivalent protection arranged and funded by CBI,
and by corporate indemnity protection, to the extent of the greatest level
of protection afforded to such Executive under any and all policies of
directors and officers liability and indemnity insurance, by-law provisions
or any other arrangements or agreements, at any time within the period of
three full calendar years immediately preceding the Effective Date.
5. Termination. The term "Termination" shall mean the occurrence during
the Employment Period of:
(a) termination by CBI of the employment of the Executive for any
reason other than (i) death, (ii)
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physical or mental incapacity which would entitle Executive to permanent
disability benefits under CBI's appropriate plans, or (iii) a willful and
material breach of this Agreement by the Executive which causes a direct
and substantial injury to CBI or to its business, which is not cured by
Executive within 30 days after receiving written notice of such breach and
reasonable directions for cure from CBI; or
(b) the resignation of the Executive from his employment upon 30 days
written notice to CBI at any time following (i) a significant change in the
nature or scope of the Executive's authorities or duties from those
described in Section 3, a reduction in total compensation from that
provided in Section 4, or the breach by CBI of any other provision of this
Agreement, which change, reduction or breach is not restored or cured by
CBI within 30 days after receiving written notice of such change, reduction
or breach and reasonable directions for restoration or cure from the
Executive; or (ii) a reasonable determination by the Executive that, as a
result of the Change in Control and a change in circumstances thereafter
significantly affecting his position, he is unable to exercise the
authorities, powers, functions or duties attached to his position as
contemplated by Section 3.
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A Termination as contemplated by this Section 5, whether or not a breach of
this Agreement by CBI, shall entitle the Executive to Termination benefits as
provided by this Agreement. Nothing in this Agreement shall prevent the
Executive from voluntarily resigning from his Employment upon 90 days written
notice to CBI under circumstances which do not constitute Termination as defined
in this Section 5, and no such resignation shall be deemed a breach of this
Agreement by the Executive.
6. Termination Payment. In the event of Termination of Executive during
the Period of Employment, CBI shall pay to the Executive a lump sum amount equal
(without discount to present value) to the sum of the amounts determined in
accordance with subsections (a), (b), (c) and (d) below, and provide the
additional benefits described in subsections (w), (x), (y) and (z) below:
(a) An amount equal to the aggregate salary which would have been paid
to the Executive during the remainder of the Employment Period if he had
received the base salary specified by Section 4(a) above, increased by
assuming the salary increase on each January 1 during the remainder of the
Employment Period to be the greatest of the average annual percentage
salary increase or the percentage increase in the Implicit Price Deflator,
whichever is
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applicable, as of any January 1 within the three calendar years including
or preceding the Termination date.
(b) Bonus and incentive compensation for any calendar year (or other
applicable bonus or incentive compensation period) ending prior to the
Termination date but not previously paid.
(c) An amount equal to the aggregate bonus and incentive compensation
which would have been paid to the Executive during each calendar year (or
other applicable bonus or incentive compensation period) any part of which
is included in the remainder of the Employment Period if he had received
bonus and incentive compensation for any such year (or period) in the
minimum amount specified by Section 4(b) based on his increased salary
determined under subsection (a) above; provided, however, that in the event
any bonus year (or period) extends beyond the end of the Employment Period,
bonus or other incentive compensation for such year (or period) shall be
pro-rated in proportion to the number of days within and without the
Employment Period.
(d) In the event any shares of CBI common stock (or other securities
into which such shares may have
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been converted) previously awarded to Executive under any restricted stock
award plans of CBI or separate agreements between Executive and CBI are
forfeited by reason of such Termination, an amount in cash equal to the
fair market value of such forfeited common stock (or other securities) as
of the date of Termination. The rights afforded to Executive under this
subsection (d) are without prejudice to any other rights Executive has to
shares of CBI common stock (or other securities) under such plans or
agreements or by reason of the action of the CBI Board of Directors
heretofore taken in causing restrictions on such shares to be removed under
certain circumstances including Termination of the Executive.
CBI shall also provide to the Executive:
(w) In addition to the benefits provided under any pension benefit
plan, benefit restoration plan, profit sharing plan, or employee stock
ownership plan (whether or not funded or qualified under the Internal
Revenue Code) maintained by CBI ("Retirement Plans"), the difference (the
"Benefit Enhancement") between such benefits and the benefits (the
"Enhanced Benefits") that would have been provided under such Retirement
Plans if Executive had remained in the employ of CBI throughout the
Employment Period at the
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salary determined under subsection (a) above accruing additional age and
service credits under such Retirement Plans accordingly. If after giving
effect to such additional age and service credit Executive shall not have
the necessary age or credited service at the end of the Employment Period
to qualify under the CBI Pension Plan (the "Pension Plan") for an early
retirement pension, the Enhanced Benefits under this subsection (w) shall
nevertheless include an early retirement pension under the Pension Plan
beginning upon Executive attaining age 55 or upon the date Executive would
have attained 30 years of credited service had Executive remained
continuously employed by CBI but for Termination (whichever occurs first)
(the "Enhanced Early Retirement Pension"). The Enhanced Early Retirement
Pension shall be payable to the Executive or to the spouse of the Executive
(if applicable) commencing at the time Executive attains (or would have
attained) age 55 or would have otherwise attained 30 years of credited
service as provided aforesaid (whichever occurs first). The Enhanced Early
Retirement Pension shall only be subject to reduction at the rate of four
(4) percentum for each year by which the Executive's age is less than age
65 or the Executive's credited service is less than 40 years, whichever
produces the lesser
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reduction, pursuant to the first sentence of Section 5.2.3 of the Pension
Plan (as in effect on the date hereof). If Executive shall die after the
end of the Employment Period but before the date the Enhanced Early
Retirement Pension is payable, the spouse of Executive shall be entitled to
an enhanced survivor's pension under the Pension Plan as if Executive had
died as an employee of CBI, giving effect to service through the date of
Executive's death and Executive's earnings through the end of the
Employment Period. Such Benefit Enhancement will be paid beginning on the
date the Enhanced Benefits would have commenced and thereafter concurrently
with the benefits actually provided under such Retirement Plans; except
that if the Executive receives a distribution from any profit sharing or
employee stock ownership plan before the Benefit Enhancement required by
this subsection in respect of such Retirement Plan become determinable, the
Benefit Enhancement in respect of such plan shall be paid as soon
thereafter as such benefits become determinable. Nothing in this subsection
(w) shall prevent the actual commencement of benefits under any Retirement
Plan, and the Benefit Enhancements required by this subsection (w), before
the end of the Employment Period to the extent required or permitted under
the terms of the applicable Retirement Plan,
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giving effect to the additional age and service credit required by this
subsection (w).
(x) Participation in or coverage by all other employee benefits,
including, but not limited to, coverage under any health or medical benefit
insurance, plans, or arrangements, supplemental survivors' benefit plans,
or life insurance arrangements or programs, to the same extent to which he
would have been entitled under all employee benefit plans, programs,
arrangements or practices maintained by CBI if he had remained in the
employ of CBI through the Employment Period at the salary determined under
subsection (a) above.
(y) Continuation of disability income benefits pursuant to Section 4(d)
for so long as any disability may continue and continuation of directors
and officers liability and indemnity insurance and corporate indemnity
protection pursuant to Section 4(f) for so long as any liability may arise;
in either case without regard to the Termination of the Employment Period.
(z) Within 30 days after each written request therefor by the
Executive, cash advances or reimbursement for any fees or expenses actually
incurred or reasonably expected to be incurred by the Executive in seeking
other
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employment, including without limitation all travel and relocation expenses
and all fees charged by any executive recruitment firm or firms or
employment consulting or counseling firm or firms selected by the Executive
in his sole discretion.
The amount of Termination payments described in subsections (a), (b), (c) and
(d) of this Section 6 shall be determined and paid in a lump sum within 30 days
of the Termination date by cashier's check or certified check of CBI or any of
its affiliated corporations delivered to Executive together with such
calculations, worksheets, or other information as may be necessary or
appropriate to ascertain the correctness of the computation of such amount and,
if applicable, of any reduction pursuant to Section 7. Any Termination payment
(or the value thereof) not paid on or before the date provided therefor by this
Section 6 shall bear interest after such date until paid at a rate per annum
during each month such amount remains unpaid of five percentage points in excess
of the prime rate as publicly announced by the First National Bank of Chicago or
its successor from time to time as in effect on the first day of each such
month.
7. Overall Limitations. Solely for the purposes of the computation of
benefits under this Agreement and notwithstanding any other provisions hereof,
payments to any Executive under this Agreement shall be reduced (but not below
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zero) so that the present value, as determined in accordance with Section
280G(d)(4) of the Code, of such payments plus any other payments that must be
taken into account for purposes of any computation relating to Executive under
Section 280G(b)(2)(A)(ii) of the Code, shall not, in the aggregate, exceed 2.99
times Executive's "base amount," as that term is defined in Section 280G(b)(3)
of the Code. Notwithstanding any other provision hereof, no reduction in
payments under the limitation contained in the immediately preceding sentence
shall be applied to payments hereunder which do not constitute excess parachute
payments" within the meaning the Code. Any payments in excess of the limitation
of this Section 7 or otherwise determined to be "excess parachute payments" made
to Executive hereunder are deemed to be overpayments which shall constitute an
amount owing from the Executive receiving them to CBI with interest from the
date of receipt by the Executive to the date of repayment (or offset) at the
applicable federal rate under Section 1274(d) of the Code, compounded
semi-annually, which shall be payable to CBI upon demand; provided, however,
that no repayment shall be required under this sentence if in the written
opinion of tax counsel satisfactory to the Executive and delivered to the
Executive and CBI such repayment does not allow such overpayment to be excluded
for federal income and excise tax purposes from the Executive's income for the
year of receipt or afford the
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Executive a compensating federal income tax deduction for the year of repayment.
8. Non-Competition. Whether or not a Termination occurs, the Executive
agrees to continue all non-competition and confidentiality provisions, as
specified in any other agreement in effect on the Effective Date between the
Executive and CBI relating to confidential information, during (and to the
extent specified in such agreement, after) the Employment Period.
9. Mitigation. The Executive shall not be required to mitigate the
amount of any payment provided for under this Agreement by seeking other
employment or otherwise; provided, however, that if during the Employment Period
Executive accepts other employment in a position substantially equivalent to or
better than the position held by him with CBI, current cash compensation
actually received by the Executive during the Employment Period from such other
employment shall be applied to reduce Termination payments otherwise due under
subsections (a) and (c) of Section 6 of this Agreement.
10. Legal Fees and Expenses:
(a) It is the intent of CBI that no Executive be required to incur the
expenses associated with the enforcement of his rights under this Agreement
by
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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, if it should appear to the Executive that
CBI has failed to comply with any of its obligations under this Agreement,
or in the event that CBI or any other person takes any action to declare
this Agreement void or unenforceable, or institutes any litigation designed
to deny, or to recover from, the Executive the benefits intended to be
provided to Executive hereunder, CBI irrevocably authorizes Executive from
time to time to retain counsel of his choice, at the expense of CBI as
hereafter provided, to represent Executive in connection with the
initiation or defense of any litigation, arbitration or other legal action,
whether by or against CBI or any director, officer, stockholder or other
person affiliated with CBI, in any jurisdiction. CBI shall advance to the
Executive within 30 days after each written request therefor any and all
attorneys' and related fees and expenses actually incurred or reasonably
expected to be incurred by the Executive in any such proceeding or
otherwise as a result of CBI's failure to perform this Agreement or any
provision hereof or as a result of CBI or any person contesting the
validity or
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enforceability of this Agreement or any provision hereof; provided,
however, that to the extent the Executive does not prevail in any such
litigation, arbitration, or other legal action, the Executive shall repay
to CBI the amount (without interest) of such attorney's fees and related
fees and expenses previously advanced.
(b) CBI shall at its sole cost and expense obtain a committment for an
irrevocable clean letter of credit, substantially in the form of that
attached hereto as Exhibit II and incorporated herein by reference (the
"Letter of Credit"), to be issued by a commercial bank selected by CBI
having total assets equivalent to at least $6 billion and either
incorporated under the laws of, or having an office in, the United States
or any State (the "Bank"), to secure for the benefit of Executive the total
value of performance of CBI's obligations under this Agreement by providing
that the total amount of all payments due to be paid by CBI to Executive
under this Agreement shall be paid on a regular, periodic basis upon
presentation by Executive to the Bank of a statement or statements prepared
by Executive's counsel that such payments are due and owing, and that CBI
has not performed its obligation to make such payments. CBI
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shall at its sole cost and expense obtain the issuance of the Letter of
Credit pursuant to such committment not later than the Effective Date and
shall pay all amounts and take all action necessary to maintain such Letter
of Credit during the Employment Period and for two years thereafter and if,
notwithstanding CBI's complete discharge of such obligations, such Letter
of Credit shall be terminated or not renewed, CBI shall obtain a
replacement irrevocable clean letter of credit on substantially the same
terms and conditions as contained in the Letter of Credit drawn upon a
commercial bank having total assets equivalent to at least $6 billion and
either incorporated under the laws of, or having an office in, the United
States or any State, which assures the Executive the benefits of this
Agreement.
11. Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to the Executive at the last address he has filed
in writing with CBI or, in the case of CBI, at its principal executive offices.
12. Non-Alienation. The Executive shall not have any right to pledge,
hypothecate, anticipate or in any way create a
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lien upon any amounts provided under this Agreement; and no benefits payable
hereunder shall be assignable in anticipation of payment either by voluntary or
involuntary acts, or by operation of law.
13. Governing Law. The provisions of this Agreement shall be construed
in accordance with the laws of the State of Illinois.
14. Amendment. This Agreement may be amended or cancel led by mutual
agreement of the parties in writing without the consent of any other person and,
so long as the Executive lives, no person, other than the parties hereto, shall
have any rights under or interest in this Agreement or the subject matter
hereof.
15. Successors to the Company. Except as otherwise provided herein,
this Agreement shall be binding upon and inure to the benefit of CBI and any
successor of CBI.
16. Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this
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Agreement shall be unaffected thereby and shall remain in full force and effect.
/s/ Xxxx X. Xxxxx
------------------------------
CBI INDUSTRIES, INC. Executive
By: /s/ W. A. Xxxxx Title: Vice Chairman
--------------------------- ------------------------
Title: Chairman of the Board
-----------------------
ATTEST:
/s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Secretary
(SEAL)
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EXHIBIT I
Section 1. Certain Definitions. For purposes of this Agreement, the
following terms have the meanings indicated:
1.1 "Acquiring Person" shall mean any Person (as such term is
hereinafter defined) who or which, together with all Affiliates (as such term is
hereinafter defined) and Associates (as such term is hereinafter defined) of
such Person, shall be the Beneficial Owner (as such term is hereinafter defined)
of 20% or more of the shares of Common Stock, then outstanding, but shall not
include the Company, any Subsidiary of the Company, any employee benefit plan of
the Company or of any Subsidiary of the Company, or any entity organized,
appointed or established by the Company for or pursuant to the terms of any such
plan.
1.3 "Affiliate" and "Associate" shall have the respective meanings
ascribed to such terms in Rule 12b-2 of the General Rules and Regulations under
the Securities Exchange Act
22
of 1934, as amended (the "Exchange Act"), as in effect on the date of this
Agreement.
1.4 A Person shall be deemed the "Beneficial Owner" of, and shall be
deemed to "beneficially own," any securities:
(a) which such Person or any of such Person's Affiliates or
Associates beneficially owns, directly or indirectly;
(b) which such Person or any of such Person's Affiliates or
Associates has (i) the right to acquire (whether such right is
exercisable immediately or only after the passage of time) pursuant to
any agreement, arrangement or understanding (whether or not in writing)
or upon the exercise of conversion rights, exchange rights, rights
(other than the Rights), warrants or options, or otherwise; provided,
however, that a Person shall not be deemed the
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"Beneficial Owner" of, or to "beneficially own," securities tendered
pursuant to a tender or exchange offer made by such Person or any of
such Person's Affiliates or Associates until such tendered securities
are accepted for purchase or exchange; or (ii) the right to vote
pursuant to any agreement, arrangement or understanding (whether or not
in writing); provided, however, that a Person shall not be deemed the
"Beneficial Owner" of, or to "beneficially own," any security under
this clause (ii) if the agreement, arrangement or understanding to vote
such security: (A) arises solely from a revocable proxy given in
response to a public proxy or consent solicitation made pursuant to,
and in accordance with, the applicable rules and regulations of the
Exchange Act, and (B) is not also then reportable by such Person on
Schedule 13D under the Exchange Act (or any comparable or successor
report); or
(c) which are beneficially owned, directly or indirectly, by any
other Person (or any Affiliate or Associate thereof) with
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which such Person or any of such Person's Affiliates or Associates has
any agreement, arrangement or understanding (whether or not in
writing), for the purpose of acquiring, holding, voting (except
pursuant to a revocable proxy as described in clause (ii) of paragraph
(b) of this subsection 1.4) or disposing of any voting securities of
the Company.
1.7 "Common Stock" shall mean the common stock, $2.50 par value per
share, of the Company, except that "Common Stock" when used with reference to
any Person other than the Company shall mean the capital stock of such Person
with the greatest voting power, or the equity securities or other equity
interest having power to control or direct the management, of such Person.
25
1.8 "Continuing Director" shall mean any member of the Board, while
such person is a member of the Board, who is not an Acquiring Person, or an
Affiliate or Associate of an Acquiring Person, or a representative of an
Acquiring Person or of any such Affiliate or Associate, and was a member of the
Board prior to the date of this Agreement. A "Continuing Director" shall also
mean any person who subsequently becomes a member of the Board, while such
person is a member of the Board, who is not an Acquiring Person, or an Affiliate
or Associate of an Acquiring Person, or a representative of an Acquiring Person
or of any such Affiliate or Associate, if (a) such person's nomination for
election or election to the Board is recommended or approved by resolution of a
majority of the Continuing Directors or (b) such person is included as a nominee
in a proxy statement of the Company distributed when a majority of the Board
consists of Continuing Directors.
1.9 "Person" shall mean any individual, firm, corporation, partnership
or other entity.
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Exhibit II
From:
------------------------
Date:
------------------------
To:
--------------------------
By order of:
CBI Industries, Inc.
000 Xxxxx Xxxxxxxxx
Xxx Xxxxx, Xxxxxxxx 00000
We hereby issue our irrevocable Letter of Credit #__________ effective
__________________, 1986 for a principal amount of U.S. $____________ only,
expiring __________________, 1987, in Chicago, Illinois representing support for
an "Agreement" dated ______________ between CBI Industries, Inc. and the
beneficiary of this Letter of Credit.
Whole or partial drawings of the above Letter of Credit are available against
presentation of your draft(s) drawn at sight on us mentioning thereon our Letter
of Credit number and accompanied by (1) beneficiary's signed and dated statement
designating his counsel and (2) a signed and dated statement prepared by his
counsel reading to the effect that payments are due and owing under the
"Agreement" referred to above and that CBI Industries, Inc. has not performed
its obligation to make such payments.
We hereby engage that drafts drawn under and in complicance with the terms and
conditions of this Letter of Credit will be duly honored upon presentation if
presented to us on or before __________________.
This credit is subject to the "Uniform Customs and Practices for Documentary
Credits" (1983 revision), International Chamber of Commerce publication 400.
SIGNATURE
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ADDENDUM TO AGREEMENT
THIS ADDENDUM dated this 14 day of May, 1987, to the AGREEMENT
between CBI Industries, Inc., a Delaware Corporation ("CBI") and Xxxx X.
Xxxxx ("Executive") of September 12, 1986 (the "Agreement"):
WITNESSETH THAT
WHEREAS, CBI and the Executive mutually desire to amend and modify the
Agreement to verify and confirm that it is the intent of CBI and the
Executive that the benefits to be provided to Executive under that certain
letter agreement dated January 4, 1982, as amended, shall be and are
intended to be included in the benefits to be provided to Executive by CBI
under the Agreement;
NOW, THEREFORE, in consideration of the premises hereof, it is AGREED
by and between CBI and the Executive as follows:
1. Section 6(w) of the Agreement is amended by inserting the
following language between the phrases "pension benefit plan" and
"benefit restoration plan" in the second line of Section 6(w):
"supplemental pension arrangement (includ-
ing letter to Executive dated January 4,
1982, as amended)"
2. Except as specifically modified herein, all terms and conditions of
the Agreement remain unchanged.
CBI INDUSTRIES, INC. /s/ Xxxx X. Xxxxx
------------------------------
Executive
By: /s/ W. A. Xxxxx
------------------------- Title: Vice Chairman
-----------------------
Title: Chairman of the Board
----------------------
ATTEST:
/s/ Xxxxxx X. Xxxxxxxxx
----------------------------
Secretary
[Seal]
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ADDENDUM TO AGREEMENT
THIS ADDENDUM dated this 5th day of June, 1987, to the AGREEMENT between
CBI Industries, Inc., a Delaware Corporation ("CBI") and Xxxx X. Xxxxx
("Executive") dated the 12th day of September, 1986 (the "Agreement"):
WITNESSETH THAT:
WHEREAS, CBI and the Executive mutually desire to modify the Agreement in
light of the enactment of the Tax Reform Act of 1986;
NOW, THEREFORE, in consideration of the premises, it is hereby AGREED by
and between CBI and the Executive that the Agreement shall be modified as
follows:
1. Section 3 of the Agreement is amended by adding the following sentence
immediately after the first sentence thereof:
CBI shall maintain the position of Executive such that Executive is able to
exercise the authorities, powers, functions and duties attached thereto as
contemplated by this Section 3.
2. Subsection (b) of Section 5 of the Agreement is amended to read as
follows:
(b) the resignation of the Executive from his employment upon 30 days
written notice to CBI at any time following a significant change in the
nature or scope of the Executive's authorities or duties from those
described in Section 3, a reduction in total compensation
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from that provided in Section 4, or the breach by CBI of any other
provision of this Agreement, which change, reduction or breach is not
restored or cured by CBI within 30 days after receiving written notice of
such change, reduction or breach, reasonable directions for restoration or
cure, and an offer to work from the Executive.
3. Section 5 of the Agreement is amended by deleting the words ", whether
or not a breach of this Agreement by CBI," from the sentence following
subsection (b).
4. Section 6 of the Agreement is amended (i) by deleting from the
introductory material preceding subsection (a) the words "equal (without
discount to present value) to the sum of" and substituting in lieu thereof the
words "equal to the present value (discounted at the greatest rate of interest
then payable by the First National Bank of Chicago on any federally insured
account into which Executive could deposit such lump sum amount and made
withdrawals therefrom without penalty at least as rapidly as compensation under
Section 4 would have been payable) of"; (ii) deleting from subsections (a) and
(c) the words "An amount equal to the aggregate" and substituting in lieu
thereof the word "The"; and (iii) deleting from the sentence following
subsection (z) the word "reduction" and substituting in lieu thereof the word
"enhancement".
5. The first sentence of subsection (d) of Section 6 is amended to read as
follows:
In the event any shares of CBI common stock (or other securities into which
such shares may have been converted) previously awarded to Executive under
any restricted stock award plans of CBI or separate agreements between
Executive and CBI are forfeited by reason of such Termination, or in the
event any stock option previously granted to Executive under any stock
option plan of CBI terminates or ceases to be exercisable by
Page 2
30
reason of such Termination, an amount in cash equal to the fair market value of
such forfeited common stock (or other securities) as of the date of Termination
plus the excess of the fair market value as of the date of Termination of stock
subject to any such terminated option over the exercise price of such terminated
option.
6. Section 7 of the Agreement is amended to read as follows:
7. Overall Indemnity. The parties intend that the payments in the nature of
compensation to be made by CBI to Executive under this. Agreement shall be
reasonable compensation for personal services to be rendered on or after the
date of the Change in Control, including payments to an individual as damages
for breach of contract, within the meaning of Section 280G(b)(4)(A) of the
Internal Revenue Code of 1986, as amended (the "Code"). In the event that
notwithstanding the previous sentence any excise tax under Section 4999 of the
Code is imposed on Executive as a direct or indirect result of payments made by
CBI or its affiliates, whether or not such payments are made pursuant to this
Agreement, CBI shall pay Executive an amount or, from time to time, amounts,
equal to (i) the sum of all excise taxes imposed on Executive in respect of such
payments, plus (ii) the aggregate amount of any interest, penalties, fines or
additions to any tax which are imposed in connection with the imposition of such
excise tax, plus (iii) all income and excise taxes imposed on Executive under
the laws of any United States Federal, state or local government or taxing
authority by reason of the payments required under clause (i) and clause (ii)
and this clause (iii). CBI's obligation to pay such amounts to Executive
pursuant to this Section 7 shall continue for the period specified in Section
6501 of the Code during
Page 3
31
which a tax may be assessed under Section 4999 of the Code (including any
extensions of such period provided under Section 6503(a)(i) of the Code or
requested by the Internal Revenue Service in connection with an audit of one or
more of Executive's tax returns).
If the Internal Revenue Service makes a claim against Executive which, if
successful, would require CBI to make a payment under this Section 7, Executive
agrees to contest the claim on request of CBI subject to the following
conditions:
(a) Executive shall notify CBI of any such claim within 10 days of
becoming aware thereof. In the event CBI desires the claim to be contested, it
shall promptly (but in no event more than 30 days after the notice from
Executive or such shorter time as the Internal Revenue Service may specify for
responding to such claim) request Executive to contest the claim. Executive
shall not make any payment of any tax which is the subject of the claim before
Executive has given the notice or during the 30-day period thereafter unless
Executive receives written instructions from CBI to make such payment together
with an advance of funds sufficient to make the requested payment plus any
amounts determined pursuant to clause (ii) and clause (iii) above as if such
advance were an amount described in clause (i) above, in which case Executive
will act promptly in accordance with such instructions.
(b) If CBI so requests, Executive will contest the claim by, at the
direction of CBI, either paying the tax claimed and suing for a refund in the
appropriate court or contesting the claim in the United States Tax Court;
provided, however, that any request by CBI for
Page 4
32
Executive to pay the tax shall be accompanied by an advance from CBI to
Executive of funds sufficient to make the requested payment plus any amounts
determined pursuant to clause (ii) and clause (iii) above as if such advance
were an amount described in clause (i) above. If directed by CBI in writing
Executive will take all action necessary to compromise or settle the claim, but
in no event will Executive compromise or settle the claim or cease to contest
the claim without the written consent of CBI; provided, however, that Executive
may take any such action if Executive waives in writing his right to a payment
under this Section 7 for any amounts payable in connection with such claim.
Executive agrees to cooperate in good faith with CBI in contesting the claim and
to comply with any reasonable request from CBI concerning the contest of the
claim, including the pursuit of administrative remedies, the appropriate forum
for any judicial proceeding, and the legal basis for contesting the claim. Upon
request of CBI, Executive shall take appropriate appeals of any judgment or
decision that would require CBI to make a payment under this Section 7. Provided
that Executive is in compliance with the provisions of this section, CBI shall
be liable for and indemnify Executive against any loss in connection with all
costs and expenses, including attorneys' fees, which may be incurred as a result
of contesting the claim, and shall provide to Executive within 30 days after
each written request therefor by the Executive cash advances or reimbursement
for all such costs and expenses actually incurred or reasonably expected to be
incurred by the Executive as a result of contesting the claim.
(c) If CBI requests that Executive contest a claim and otherwise complies
with its obligations under
Page 5
33
this Section 7, it shall, except as otherwise stipulated in this Section 7,
have no obligation to pay any amounts under Section 7 in respect of the
claim until final determination occurs regarding Executive's liability
under the claim. CBI's obligation to pay amounts under this Section 7 will
be reduced by any refund obtained by Executive and interest paid thereon.
7. Section 9 of the Agreement is amended to read as follows:
If during the Employment Period Executive accepts other employment in
a position substantially equivalent to or better than the position held by
him with CBI, compensation actually received by the Executive during the
Employment Period from such other employment shall be applied to reduce
Termination payments otherwise due under subsections (a) and (c) of Section
6 of this Agreement; and coverage of the Executive under employee benefit
plans described in subsection (x) of Section 6 of this Agreement shall be
reduced or eliminated to the extent Executive is covered under similar
plans incident to such other employment. In the event of any reduction
under this Section 9 of Termination payments already paid by CBI to
Executive, Executive shall upon 30 days written request from CBI repay to
CBI the amount by which such Termination payment is reduced, without
interest, and further reduced by any taxes attributable to such Termination
payments to the extent Executive cannot recover such taxes through
deductions of equivalent or greater value. Nothing in this Section 9 shall
be construed to require Executive in mitigation of damages to accept
employment in a position not substantially equivalent to or better than
position held by him with CBI or to accept employment more than reasonable
daily commuting
Page 6
34
distance from the principal residence of the Executive as
of the date of Termination.
CBI INDUSTRIES, INC. /s/ Xxxx X. Xxxxx
------------------------------
Executive
By: /s/ W.A. Xxxxx Title: Vice Chairman
-------------------------- ------------------------
Title: Chairman of the Board
-----------------------
ATTEST:
/s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Secretary
[SEAL]
Page 7
35
ADDENDUM TO AGREEMENT
THIS ADDENDUM dated this 8th day of September, 1987, to the Agreement
between CBI Industries, Inc., a Delaware corporation ("CBI") and X.X. Xxxxx
("Executive") of September 12, 1986 (the "Agreement").
WITNESSETH THAT
WHEREAS, the Board of Directors of CBI approved an early retirement change
in the CBI Pension Plan effective September 8, 1987, and CBI desires to make
such change applicable to the Agreement.
NOW, THEREFORE, it is hereby agreed by and between the parties to this
Addendum as follows:
1. The sentence appearing in Subsection 6(w) of the Agreement commencing
in the sixth line from the bottom of page 10 and ending in the third line
of page 11 presently reading:
"The Enhanced Early Retirement Pension shall only be subject
to reduction at the rate of four (4) percentum for each year
by which the Executive's age is less than age 65 or the
Executive's credited service is less than 40 years, whichever
produces the lesser reduction, pursuant to the first sentence
of Section 5.2.3 of the Pension Plan (as in effect on the
date hereof)."
Is hereby amended to read:
"The Enhanced Early Retirement Pension shall only be
subject to reduction at the rate of four (4) percentum
Page 1
36
for each year by which the Executive's age is less than
age 62 or the Executive's credited service is less than 35
years, whichever produces the lesser reduction, pursuant
to the first sentence of Section 5.2.3 of the Pension Plan
(as in effect on the date hereof)."
CBI INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxx /s/ Xxxx X. Xxxxx
-------------------------- ------------------------------
Title: Chairman of the Board Executive
-----------------------
ATTEST:
/s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Secretary
Page 2
37
ADDENDUM TO AGREEMENT
THIS ADDENDUM dated this 8th day of September, 1987, to the Agreement
between CBI Industries, Inc., a Delaware corporation ("CBI") and X.X. Xxxxx
("Executive") of September 12, 1986 (the "Agreement").
WITNESSETH THAT
WHEREAS, the Board of Directors of CBI approved an early retirement
change in the CBI Pension Plan effective September 8, 1987, and CBI desires to
make such change applicable to the Agreement.
NOW, THEREFORE, it is hereby agreed by and between the parties to this
Addendum as follows:
1. The sentence appearing in Subsection 6(w) of the Agreement
commencing in the sixth line from the bottom of page 10 and ending in
the third line of page 11 presently reading:
"The Enhanced Early Retirement Pension shall only be
subject to reduction at the rate of four (4) percentum for
each year by which the Executive's age is less than age 65
or the Executive's credited service is less than 40 years,
whichever produces the lesser reduction, pursuant to the
first sentence of Section 5.2.3 of the Pension Plan (as in
effect on the date hereof)."
Is hereby amended to read:
"The Enhanced Early Retirement Pension shall only be
subject to reduction at the rate of four (4) percentum
Page 1
38
for each year by which the Executive's age is less than age 62 or
the Executive's credited service is less than 35 years whichever
produces the lesser reduction, pursuant to the first sentence of
Section 5.2.3 of the Pension Plan (as in effect on the date
hereof)."
CBI INDUSTRIES, INC.
By: /s/ W. A. Xxxxx /s/ Xxxx X. Xxxxx
-------------------------- ------------------------------
Title: Chairman of the Board Executive
-----------------------
ATTEST:
/s/ Xxxxxx X. Xxxxxxxxx
-----------------------------
Secretary
Page 2
39
ADDENDUM TO AGREEMENT
THIS ADDENDUM effective the 1st day of June, 1993, to the AGREEMENT between
CBI Industries, Inc., a Delaware corporation ("CBI") and X.X. Xxxxx
("Executive") dated the 12th day of September, 1986, as previously amended (the
"Agreement").
WITNESSETH THAT:
WHEREAS, CBI and the Executive mutually desire to modify the Agreement to
eliminate the requirement for CBI to provide an irrevocable clean letter of
credit to secure for the benefit of the Executive the total value of performance
of CBI's obligations under the Agreement;
NOW, THEREFORE, in consideration of $10 and the premises herein and for
other good and valuable consideration, the receipt and adequacy of which are
hereby acknowledged, it is hereby AGREED by and between CBI and the Executive
that the Agreement shall be modified as follows:
1. Subsection 10(b) is deleted.
2. Exhibit II is deleted.
CBI INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxxxxxxx Executive: /s/ Xxxx X. Xxxxx
---------------------------- -------------------
Title: Executive Vice President
Title: Chairman
-----------------------
ATTEST:
/s/ Xxxxxxxxx X. Xxxxxxx
-------------------------------
Secretary
[SEAL]
40
ADDENDUM TO AGREEMENT
THIS ADDENDUM dated as of and made effective the 27th day of August, 1993
to the Agreement between CBI Industries, Inc., a Delaware corporation ("CBI")
and X.X. Xxxxx ("Executive") of September 12, 1986 (the "Agreement").
WITNESSETH THAT
WHEREAS, CBI and the Executive mutually desire to modify the Agreement to
include a requirement that CBI provide an irrevocable clean letter of credit to
secure for the benefit of the Executive the payment of up to $100,000 for
attorneys fees incurred in enforcing the Agreement following a Change of
Control;
NOW, THEREFORE, it is hereby agreed by and between the parties to this
Addendum that the Agreement shall be modified as follows:
1. Section 10 of the Agreement is amended by adding a new subsection
(b) to read as follows:
(b) CBI shall at its sole cost and expense obtain a commitment for
an irrevocable clean letter of credit, substantially in the form of
that attached hereto as Exhibit II and incorporated herein by reference
(the "Letter of Credit"), to be issued by a commercial bank selected by
CBI having total assets equivalent to at least $6 billion and either
incorporated under the laws of, or having an office in, the United
States or any State (the "Bank"), to secure for the benefit of
Executive the payment of up to $100,000 for attorneys fees incurred in
enforcing the Agreement pursuant to Section 10(a) upon presentation by
Executive to the Bank of a statement or statements prepared by
Executive's counsel that such payments are due and owing and that CBI
has not performed its obligations to make such payments. CBI shall at
its sole cost and expense obtain the issuance of the Letter of Credit
pursuant to such commitment not later than the Effective Date and shall
pay all amounts and take all action necessary to maintain such Letter
of Credit during the Employment Period and for two years thereafter and
if, notwithstanding CBI's complete discharge of such obligations, such
Letter of Credit shall be terminated or not renewed, CBI shall obtain a
replacement irrevocable clean letter of credit on substantially the
same terms and conditions as contained in the Letter of Credit drawn
upon a commercial bank having total assets equivalent to at least $6
billion and either incorporated under the laws of, or having an office
in, the United States of any State, which
41
assures the Executive the benefits of this Agreement. Nothing in this
subsection (b) shall limit in any way CBI's obligations under
subsection 10(a).
CBI INDUSTRIES, INC. EXECUTIVE
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxx X. Xxxxx
--------------------------- ---------------------------
Title: Executive Vice President - Title:
Finance ------------------------
-----------------------
42
EXHIBIT II
ROYAL BANK OF CANADA, NEW YORK BRANCH
IRREVOCABLE STANDBY LETTER OF CREDIT
_______________________, 19
Letter of Credit No. ______________
(Beneficiary's Name and Address)
Dear ____________________:
At the request and for the account of CBI Industries, Inc., 000 Xxxxx
Xxxxxxxxx, Xxx Xxxxx, Xxxxxxxx, we hereby establish our Irrevocable Standby
Letter of Credit No. _______________ (this "Letter of Credit") in your favor in
an aggregate amount of One Hundred Thousand Dollars ($100,000), representing
support of the "Agreement") dated ________________, by and between yourself and
CBI Industries, Inc., as it may be amended from time to time, available by your
draft drawn at sight, presented to this Bank, bearing this Letter of Credit
Number and accompanied by this Letter of Credit and both:
1. Your signed certificate dated the date of such draft indicating the
name, address and signature of your designated counsel, with both your
signature and your designated counsel's signature notarized; and
2. Your designated counsel's signed and notarized statement dated the
date of such draft stating: "Payments are due and payable to (Beneficiary)
under the Agreement dated _______________ between (Beneficiary) and CBI
Industries, Inc., as such Agreement may have been amended from time to
time, and CBI Industries, Inc. has not performed its obligation to make
such payments. (Beneficiary) through the undersigned counsel is enforcing
his/her rights under such Agreement."
Only one draft, in the amount of $100,000 may be presented under this
Letter of Credit.
We hereby agree that all drafts drawn under and in compliance with the
terms of this Letter of Credit will be honored upon presentation at Royal Bank
of Canada, New York Branch, New York Operations Center, Pierrepont Plaza, 000
Xxxxxx Xxxxx Xxxx, Xxxxxxxx, Xxx Xxxx 00000-0000, Attention: Loan Administration
Manager, facsimile number (___) ___-___. Presentation is to be
43
made by facsimile transmission of all required documents to this Bank, followed
by overnight courier delivery of all originals as provided in this paragraph.
Any Draft hereunder must be presented on or before _________________.
This Letter of Credit shall automatically expire and be null and void at the
close of business on _________________ or, in the event the expiry date hereof
is extended by us in writing, at the close of business upon such extended
expiry date.
This Letter of Credit sets forth in full the terms of our undertaking,
and this undertaking shall not in any way be modified, amended, amplified or
limited by reference to any document, instrument or agreement referred to herein
or in which this Letter of Credit is referred to or to which this Letter of
Credit relates, except for the certificates, statements and the sight drafts
referred to therein. This Letter of Credit is not transferrable.
This irrevocable Letter of Credit is subject to The Uniform Customs and
Practices for Documentary Credits (1983 Revision), ICC Publication 400.
ROYAL BANK OF CANADA,
NEW YORK BRANCH
By
-----------------------------
Its
-------------------------
By
-----------------------------
Its
-------------------------
44
ADDENDUM TO AGREEMENT
THIS ADDENDUM dated this 12th day of January, 1995 to the Agreement
between CBI Industries, Inc., a Delaware corporation ("CBI") and Xxxx X.
Xxxxx ("Executive") of September 12, 1986 (the "Agreement").
WITNESSETH THAT
WHEREAS, the Board of Directors of CBI on January 11, 1995, adopted a
resolution amending Section 2 of the Agreement, and CBI and the Executive
mutually desire to modify the Agreement by incorporating said amendment
into the Agreement.
NOW THEREFORE, it is hereby agreed by and between the parties to this
Addendum as follows:
1. Section 2 of the Agreement is hereby amended to read as follows:
Change in Control. The Term "Change in Control" shall mean the
occurrence at any time of any of the following events:
(a) An "Acquiring Person" (as defined below) has become
such; or
(b) "Continuing Directors" (as defined below) cease to
comprise a majority of the Board of Directors of CBI.
For purposes of this Agreement, the terms "Acquiring Person" and
"Continuing Directors" shall have the same meaning as ascribed to
such terms in that certain Amendment and Restatement dated as of
August 8, 1989, of Rights Agreement dated as of March 4, 1986,
45
between CBI and First Chicago Trust Company of New York, as Rights
Agent, as has been or may be amended from time to time.
CBI INDUSTRIES, INC. EXECUTIVE
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxx X. Xxxxx
----------------------------------- -----------------------------
Title: Executive Vice President - Finance
-----------------------------------
ATTEST:
/s/ Xxxxxxxxx X. Xxxxxxx
-----------------------------
Secretary
[Seal]
