Exhibit 10.10
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EMPLOYMENT AGREEMENT
THIS AGREEMENT made as of this 1st day of May, 1997, by and between XXXX
XX INDUSTRIES, INC., a Delaware corporation, with offices at 000 Xxxx Xxxxx
Xxxxxxx Xxxxxxx, Xxxxxxx, Xxx Xxxx 00000 ("Xxxx XX"), Dayco Products, Inc., a
Delaware corporation with offices at Xxx Xxxxxxxx Xxxxx, Xxxxxxxxxx, Xxxx
00000 ("Dayco"), (Xxxx XX and Dayco being sometimes hereinafter collectively
referred to as the "Corporations") and Xxxxxxx X. Bing, an individual residing
at 0000 Xxxx Xxxxx, Xxxxxxxxxxx, Xxxx 00000 (the "Executive").
RECITALS:
WHEREAS, the Executive is expected to make a major contribution to the
profitability, growth and financial strength of each of the Corporations; and
WHEREAS, the Corporations have determined that retaining the services of
the Executive is in their respective best interests and in the best interests
of the stockholders of Xxxx XX and, accordingly, the Corporations desire to
secure the services of the Executive on behalf of the Corporations;
CONSIDERATION:
NOW, THEREFORE, in consideration of the conditions and covenants set
forth in this Agreement, the parties hereto agree as follows:
ARTICLE 1.
Employment and Duties
1.01 Employment. The Corporations hereby agree to, and do hereby
employ the Executive, and the Executive hereby agrees to and does hereby
accept employment, by Xxxx XX, as Vice President of Xxxx XX, and by Dayco, as
President of the Industrial Division of Dayco ("Dayco Industrial"). It is
contemplated that the Executive will continue to serve as Vice President of
Xxxx XX and President of Dayco Industrial subject to the provisions of this
Agreement and the right of the Board of Directors of Xxxx XX and Dayco to
elect new officers.
1.02 Duties. During the period of his employment under this Agreement,
the Executive shall perform such executive duties and responsibilities as may
be assigned to him, from time to time, by the Board of Directors of Xxxx XX
and the Board of Directors of Dayco (as the case may be) and shall be subject,
at all times, to the control of the applicable Board of Directors. The
Executive shall devote substantially full time and energies to the supervision
and management of the business and affairs of the Industrial Division of Xxxx
XX ("Xxxx XX Industrial") and Dayco Industrial and to the furtherance of their
respective interests. The Executive shall report directly to the President of
Xxxx XX Industrial or such other officer of Xxxx XX as may be designated by
the Chief Executive Officer of Xxxx XX. The Corporations shall not require
the Executive to perform services hereunder outside the Dayton, Ohio
metropolitan area with such frequency or duration as would require the
Executive to move his residence from the Dayton area.
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ARTICLE 2.
Compensation and Fringe Benefits
2.01 Base Salary. During the period of the Executive's employment
hereunder, the Corporations shall pay to the Executive an annual salary ("Base
Salary") of $225,000, payable in substantially equal monthly installments. The
Board of Directors of Xxxx XX, through its Compensation Committee, shall in
good faith review the Base Salary of the Executive on an annual basis. For
purposes of determining the Executive's rights under any plans, programs,
arrangements or benefits provided to the Executive pursuant to this Agreement,
the full amount of any cash bonuses payable to the Executive shall be deemed
to be paid by Dayco.
2.02 Bonuses. The Executive shall be entitled to participate in all
current and deferred worldwide bonus and incentive compensation programs which
may be maintained, from time to time, by Dayco for its executive officers.
2.03 Reimbursement of Expenses. Dayco shall reimburse the Executive
for all reasonable expenses which the Executive may, from time to time, incur
on its behalf in the performance of his responsibilities and duties under this
Agreement, provided that the Executive accounts to Dayco for such expenses in
the manner prescribed by Dayco.
2.04 Xxxx XX Executive Fringe Benefits. The Executive shall be
permitted to participate under the terms of (a) the Xxxx XX Industries, Inc.
and Subsidiaries 1992 Incentive Stock Option Plan, as amended; and any other
incentive stock option plan which may from time to time be established by Xxxx
XX Industries, Inc.; and (b) the Non-Qualified Plan of Deferred Incentive
Compensation for Executives of Certain Operating Divisions and Subsidiaries of
Xxxx XX Industries, Inc., as amended (hereinafter the "Deferred Comp. Plan").
Except as otherwise expressly provided for above in this Section 2.04, the
Executive shall not be permitted to participate in or receive any benefits
under the terms of any plan, program or arrangement maintained or contributed
to by Xxxx XX for Xxxx XX employees.
2.05 Deferred Comp. Plan. During the term of this Agreement, the
Executive shall be permitted to defer the receipt of payment of all or any
portion of the Base Salary to which the Executive is entitled under the terms
of this Agreement and to defer the receipt of payment of all or any portion of
the amount of any bonuses or other incentive compensation (which is otherwise
payable immediately) to which the Executive may become entitled under the
terms of this Agreement or any bonus or incentive compensation plan maintained
by Dayco, all in the manner permitted for certain specified executives
pursuant to the terms of the Deferred Comp Plan. In addition, during the term
of this Agreement, the Executive shall be entitled to receive his
proportionate share of any amounts allocated annually by the Compensation
Committee of the Board of Directors of Xxxx XX to participants in the Deferred
Comp Plan whose principal place of employment is Dayco's corporate
headquarters.
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2.06 Tax Qualified Plans. The Executive shall be entitled to
participate in the Xxxx XX Savings & Retirement Plan (the "Master 401(k)
Plan") (a master profit sharing/401(k) plan maintained by Xxxx XX for certain
employees of certain of its subsidiaries) as applicable to salaried employees
of Dayco, and all other tax-qualified pension, profit sharing or retirement
plans maintained, from time to time, by either of the Corporations for
salaried employees of Dayco.
2.07 Medical Benefits. Dayco currently provides salaried employees of
Dayco (hereinafter referred to as "Dayco Salaried Employees") and certain
retired salaried employees of Dayco (hereinafter referred to as "Retired Dayco
Salaried Employees") with group medical insurance type protection against
certain costs and expenses relating to medical services and treatments
provided to such Dayco Salaried Employees (or Retired Dayco Salaried
Employees), their spouses and their dependents under a group medical program
maintained by the Corporations (such group medical program being hereinafter
the "Dayco Medical Plan"). In connection with the maintenance and
administration of the Dayco Medical Plan, the Corporations calculate and
establish, on an annual basis, an amount which, generally, is equal to the
expected per capita cost of maintaining the Dayco Medical Plan for such year
and which is used by the Corporations in determining the amount of the
contributions which the Corporations will require from Dayco Salaried
Employees (and Retired Dayco Salaried Employees) in order to provide such
Dayco Salaried Employees (and Retired Dayco Salaried Employees) the group
medical insurance type coverage provided by the Dayco Medical Plan (such
amount being hereinafter referred to as a "Premium"). During the term of this
Agreement, the Corporations shall provide the Executive, his spouse and his
dependents with the same type of group medical insurance coverage which is
provided to Dayco Salaried Employees under the terms of the Dayco Medical
Plan; provided that neither of the Corporations shall have any obligation to
provide such group medical insurance type coverage to the Executive, his
spouse and his dependents unless the Executive pays to Dayco, on a monthly
basis, the same portion of the Premium (hereinafter the "Employee Portion")
which all other Dayco Salaried Employees are required to pay for such group
medical insurance type coverage.
2.08 Group Welfare Benefits. During the period of the Executive's
employment under the terms of this Agreement, the Executive shall be eligible
to participate in the Xxxx XX Industries, Inc. and Subsidiaries Group Welfare
Benefit Program as applicable to Dayco Salaried Employees (hereinafter the
"Flex Choice Plan"). As provided for by the terms of the Flex Choice Plan,
the Executive shall be entitled to elect to receive one or more of the
following benefits under the terms of the group welfare benefit programs which
are contained within the Flex Choice Plan and available to Dayco Salaried
Employees: (a) group medical insurance type coverage under the Dayco Medical
Plan; (b) dental insurance coverage; (c) employee life insurance coverage; (d)
accidental death and dismemberment insurance coverage; (e) dependent life
insurance coverage; (f) long term disability insurance coverage; (g) health
care spending account benefits; and (h) dependent care spending account
benefits. In the event that the Flex Choice Plan is amended during the term of
this Agreement to increase or reduce the number or type of group welfare
benefit programs available to Dayco Salaried Employees, the Executive shall be
entitled to elect to receive one or more of the new group welfare benefit
programs which are available under the terms of the Flex Choice Plan.
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Notwithstanding the foregoing, the Corporations shall have no obligation to
maintain or provide any such group welfare benefits to the Executive unless
the Executive pays to Dayco, on a monthly basis, the Employee Portion of any
costs associated with the maintenance and provision of such group welfare
benefits to the same extent that such Employee Portion is paid by all other
Dayco Salaried Employees and determined, from time to time, under the
provisions of the Flex Choice Plan. The Corporations shall also pay all
premiums necessary to maintain a business travel accident insurance policy for
the Executive with coverage and benefits which are at least reasonably
comparable to the business travel accident insurance coverage in effect for
the Executive as of the date of this Agreement.
2.09 Continuation of Medical Benefits and Insurance Coverage. (a) If
the Executive retires from his employment with the Corporations as permitted
by Section 3.05 hereof, the Corporations shall have no obligation to continue
to provide any life, medical, disability or other insurance coverage to the
Executive except to the extent that Dayco provides life insurance and retiree
medical insurance type coverage for its Retired Dayco Salaried Employees. In
the event that the Executive elects to receive retiree medical insurance type
coverage under the Dayco Medical Plan, the Corporations shall provide such
retiree medical insurance type coverage to the Executive, his spouse and
dependents; provided that, the Executive pays to Dayco on a monthly basis, the
portion of the Premium due in connection with the provision of such retiree
medical insurance type coverage under the Dayco Medical Plan to the same
extent that such portion of the Premium is required to be paid by all other
Retired Dayco Salaried Employees. In the event that the Executive elects to
receive the life insurance coverage which is available to Retired Dayco
Salaried Employees, the Corporations shall provide such life insurance
protection to the Executive provided that the Executive pays to Dayco the
portion of any life insurance premiums due in connection with the maintenance
of such life insurance coverage to the same extent that such portion of such
life insurance premiums is paid by all other Retired Dayco Salaried Employees.
(b) If the Executive's employment with the Corporations is
terminated by either of the Corporations either for cause, as permitted by
Section 3.02 hereof, or without cause, as permitted by Section 3.03 hereof,
following the Executive's termination, the Corporations shall take such action
as may be necessary to cause group meidical insurance type coverage which is
at least reasonably comparable to the group medical insurance type coverage
which was in effect under the Dayco Medical Plan for the Executive, his spouse
and dependents immediately prior to the termination of his employment, to be
continued for a period of one (1) year following the date on which the
Executive's employment with the Corporations is terminated. Notwithstanding
the foregoing, the Corporations shall not be obligated to continue to provide
such group medical insurance type coverage to the Executive, his spouse and
dependents unless, in the event the Executive's employment is terminated by
either of the Corporations for cause (as permitted by Section 3.02 hereof),
the Executive pays to Dayco, on a monthly basis, the full amount of the
Premium which is payable with respect to the provision of such group medical
insurance type coverage to a Dayco Salaried Employee and, in the event the
Executive's employment is terminated by either of the Corporations without
cause (as permitted by Section 3.03 hereof), the Executive pays to Dayco on a
monthly basis, an amount which shall not exceed the Employee Portion
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(determined at the time such group medical insurance type coverage is
provided) of the Premium payable by Dayco Salaried Employees, for the group
medical insurance type coverage which is then being provided to such Dayco
Salaried Employees. At the end of the one (1) year period following the date
on which the Executive's employment with the Corporations is terminated
(without cause) or, if earlier, at such time that the Corporations terminate
the group medical insurance type coverage required to be provided to the
Executive hereunder by reason of the Executive's failure to pay the Employee
Portion of the Premiums described above, the Executive shall be entitled to
elect to receive continuation coverage with respect to such medical insurance
coverage in accordance with the applicable provisions of Section 4980B of the
Internal Revenue Code of 1986, as applicable continuation coverage provisions
of the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
(c) If the Executive's employment with the Corporations is
terminated as a result of his suffering of a Total and Permanent Disability as
described in Section 6.04 hereof, following the Executive's termination, the
Corporations shall provide group medical insurance type coverage to the
Executive, his spouse and dependents which is the same as the group medical
insurance type coverage which is provided under the Dayco Medical Plan to
Dayco Salaried Employees; provided that, the Corporations shall have no
obligation to provide such group medical insurance type coverage to the
Executive, his spouse and dependents unless the Executive pays to Dayco, on a
monthly basis, an amount which shall not exceed the Employee Portion
(determined at the time such medical insurance coverage is provided) of the
Premium payable by Dayco Salaried Employees for the group medical insurance
type coverage which is then being provided to such Dayco Salaried Employees.
Provided that the Executive continues to pay Dayco the amount described in the
preceding sentence, the Corporations shall continue to provide such group
medical insurance type coverage to the Executive, his spouse and dependents
after the date he suffers from a Total and Permanent Disability until the
earlier of the date that the Executive qualifies for Social Security
Disability Insurance benefits, including Medicare, or the date the Executive
attains age 65. Notwithstanding the foregoing, if Dayco provides group
medical insurance type coverage under the Dayco Medical Plan for its Retired
Dayco Salaried Employees which is more valuable than the group medical
insurance type coverage provided to the Executive under Medicare, the
Corporations shall, at the earlier of the date the Executive qualifies for
Medicare and the date the Executive attains age 65, provide the Executive the
same group medical insurance type coverage which is provided by Dayco for such
Retired Dayco Salaried Employees provided that the Executive pays to Dayco the
portion of the Premiums due from Retired Dayco Salaried Employees with respect
to such group medical insurance type coverage as described Section 2.09(a)
above.
(d) If the Executive incurs a Change in Control Termination as
defined in Section 7.01 hereof, the Corporations shall continue to maintain
and pay, for the life of the Executive, any premiums due for life insurance
coverage in an amount which is at least reasonably comparable to the life
insurance coverage which was provided to the Executive immediately prior to
the Executive's Change in Control Termination provided that the Executive
shall continue to be obligated during such period to pay to the Corporations
the Employee Portion of the premiums due for such insurance coverage as
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determined at the time the Executive's Change in Control Termination occurs.
In addition, if the Executive incurs a Change in Control Termination as
defined in Section 7.01 hereof, the Corporations shall take any such action as
may be necessary to continue to provide group medical insurance type coverage
to the Executive, his spouse and dependents for life which is at least
reasonably comparable to the group medical insurance type coverage which was
in effect for the Executive under the Dayco Medical Plan immediately prior to
the Executive's Change in Control Termination; provided that, the Executive
shall continue to be obligated during such period, to pay to the Corporations,
the Employee Portion of the Premiums due for any such group medical insurance
type coverage as determined at the time the Executive's Change in Control
Termination occurs.
2.10 Vacation and Other Benefits. During each full year of the
Executive's employment hereunder, the Executive shall be entitled to paid
vacations as prescribed in Dayco's vacation policy based on all years of the
Executive's service with Dayco. In addition, the Executive shall be entitled
to receive such other employee benefit plans as may, from time to time, be
provided by either of the Corporations.
ARTICLE 3.
Term and Termination
3.01 Term. The period of employment of the Executive under this
Agreement shall commence May 1, 1997 and continue through April 30, 2000.
Thereafter, unless otherwise terminated by either of the Corporations pursuant
to Section 3.03 hereof, effective May 1, 2000 and on each May 1 thereafter,
the term of this Agreement shall automatically be renewed for an additional
period of twelve (12) months.
3.02 Termination For Cause. Notwithstanding the provisions of Section
3.01 hereof, each of the Corporations may terminate the Executive's employment
hereunder at any time for cause, by delivering to the Executive a written
notice of termination setting forth the date on which such termination is to
be effective and specifying in reasonable detail the facts and circumstances
claimed to provide a basis for the termination.
For purposes of this Agreement, each Corporation shall have
"cause" to terminate the Executive's employment hereunder upon the
Executive's: (a) willful and continued failure to substantially perform his
duties hereunder other than any such failure resulting from the Executive's
incapacity due to physical or mental illness; (b) illegal or criminal conduct;
(c) intentional falsification of records or reports or any other act or acts
of dishonesty constituting a felony and resulting, or intended to result,
directly or indirectly, in personal gain or enrichment of the Executive at the
expense of either of the Corporations; (d) excessive and/or chronic use of
alcohol, narcotics or other controlled substances (other than under the
supervision of a licensed physician); or (e) willful engagement in gross
misconduct materially injurious to either of the Corporations.
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3.03 Termination Without Cause. Notwithstanding anything to the
contrary contained in Section 3.01 hereof, each of the Corporations may, at
any time on or after the date hereof, terminate the Executive's employment,
without cause, by delivering a written notice of termination to the Executive
which sets forth the date on which such termination is to be effective;
provided that, the effective date of any such termination shall not be less
than ninety (90) days following the date on which such written notice of
termination is delivered to the Executive.
3.04 Termination by the Executive. Notwithstanding anything to the
contrary contained in Section 3.01 hereof, the Executive may terminate his
employment hereunder at any time by delivering a written notice of termination
to either of the Corporations which sets forth the date on which such
termination is to be effective; provided that, the effective date of any such
termination shall not be less than ninety (90) days following the date on
which such written notice of termination is delivered to either of the
Corporations.
3.05 Retirement. The Executive may retire from his employment with the
Corporations at any time following his attainment of age sixty (60) by
delivering to either of the Corporations a written notice of his intent to
terminate his employment with either of the Corporations and retire, which
written notice sets forth the date on which such retirement (and its related
termination of employment) is to be effective; provided that, the effective
date of such retirement shall not be less than thirty (30) days following the
date on which such written notice of termination is delivered to either of the
Corporations.
3.06 Effect of Notice of Intent to Terminate. Upon delivery by either
of the Corporations to the Executive of a written notice of intent to
terminate, the Executive's employment with both of the Corporations shall be
terminated, effective at the time stated in such written notice of intent to
terminate. In addition, upon the Executive's delivery to either of the
Corporations of a written notice of intent to terminate (whether or not such
termination is intended to be a retirement) the Executive's employment with
both the Corporations shall be terminated effective at the time stated in such
written notice of intent to terminate.
ARTICLE 4.
Confidentiality; Non-Compete Provisions
4.01 Confidentiality. During the period of the Executive's employment
hereunder and for a period of ten (10) years following the termination of the
Executive's employment for any reason whatsoever (including, without
limitation, retirement, a "for cause" termination or any other voluntary or
involuntary termination), the Executive agrees that he will not, without the
written consent of the Board of Directors of Xxxx XX, disclose to any person
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(other than a person to whom disclosure is reasonably necessary or appropriate
in connection with the performance by the Executive of his duties as an
executive of the Corporations or to a person as required by any order or
process of any court or regulatory agency) any material confidential
information obtained by the Executive while in the employ of the Corporations
with respect to any management strategies, policies or techniques or with
respect to any products, improvements, formulae, designs or styles, processes,
customers, methods of distribution, or methods of manufacture of any of the
Corporations; provided, however, that confidential information shall not
include any information known generally to the public (other than as a result
of unauthorized disclosure by the Executive) or any information of a type not
otherwise considered confidential by persons engaged in the same business or a
business similar to that conducted by either of the Corporations.
4.02 Non-Compete. During the period of eighteen (18) months after the
date of termination of the Executive's employment hereunder, for any reason
whatsoever (including, without limitation, retirement, "for cause" termination
or any other voluntary or involuntary termination), the Executive will not,
directly or indirectly, own, manage, operate, control or participate in the
ownership, management, operation or control of, or be connected as an officer,
employee, partner, director or otherwise with, or have any financial interest
in, or aid or assist anyone else in the conduct of, any business which
competes with any business conducted by either of the Corporations or with any
group, division or subsidiary of either of the Corporations in any geographic
area where such business is being conducted at the time of such termination
(any such business being hereinafter referred to as a "Competitive
Operation"). Ownership by the Executive of 2% or less of the voting stock of
any publicly held corporation shall not constitute a violation of this Section
4.02.
4.03 Competitive Operation. For purposes of Section 4.02 hereof: (a)
a business shall not be deemed to be a Competitive Operation unless: (i) 25%
or more of the consolidated gross sales and operating revenues, of either of
the Corporations is derived from such business; or (ii) 25% or more of the
consolidated net income of either of the Corporations is derived from such
business; or (iii) 25% or more of the consolidated assets of either of the
Corporations are devoted to such business; and (b) a business which is
conducted by either of the Corporations at the time of the Executive's
termination and which subsequently is sold or discontinued by either of the
Corporations shall not, subsequent to the date of such sale or discontinuance,
be deemed to be a Competitive Operation within the meaning of Section 4.02.
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ARTICLE 5.
Death Benefits
5.01 Death Benefits. If the Executive dies during the term of his
employment hereunder, in addition to any death benefits payable under the
terms of any life insurance policies maintained by the Corporations on the
life of the Executive, any death benefits payable on account of the death of
the Executive under the terms of the Deferred Comp Plan, and any death
benefits payable on account of the death of the Executive under the terms of
any tax qualified retirement plans maintained by the Corporations, the
Corporations shall pay to such person, firm, corporation, trust or other
entity which shall, from time to time, be designated by the Executive to
either of the Corporations, in writing, as the intended recipient of death
benefits provided for under the terms of this Agreement (such person, firm,
corporation, trust or other entity being hereinafter referred to as the
Executive's "Beneficiary") a death benefit equal to 50% of the Executive's
Base Salary at the rate in effect on the date of the Executive's death. In
addition, if Dayco pays a bonus to its executive officers for the fiscal year
of Xxxx XX in which the Executive's death occurs, at the time Dayco pays such
bonuses to its executive officers for such fiscal year: (a) if the Executive's
death occurs during the first six (6) months of Xxxx IV's fiscal year, the
Corporations shall pay to the Executive's Beneficiary, an amount equal to
fifty percent (50%) of the amount of the bonus which would have been payable
to the Executive pursuant to the bonus plans referred to in Section 2.02
hereof for the fiscal year of Xxxx XX in which the Executive's death occurs;
and (b) if the Executive's death occurs at any time after the first six (6)
months of Xxxx IV's fiscal year, the Corporations shall pay to the Executive's
Beneficiary, an amount equal to the amount of the bonus which would have been
payable to the Executive pursuant to the bonus plans referred to in Section
2.02 hereof for the fiscal year of Xxxx XX in which the Executive's death
occurs.
5.02 Continuation of Medical Insurance Coverage. If the Executive
dies prior to the termination of his employment and if, at the time of the
Executive's death, the Executive's spouse or dependents are still living, the
Corporations shall take such action as may be necessary to provide group
medical insurance type coverage to the Executive's spouse and dependents which
is at least reasonably comparable to the group medical insurance type
coverage, if any, which was in effect for the Executive, his spouse and
dependents under the Dayco Medical Plan immediately prior to the Executive's
death, to be continued for the Executive's spouse and dependents for a period
of one (1) year following the date of the Executive's death; provided that the
Corporations shall not be obligated to continue to provide such group medical
insurance type coverage to the Executive's spouse and dependents unless the
Executive's spouse pays to Dayco, on a monthly basis, an amount which shall
not exceed the Employee Portion (determined at the time such group medical
insurance type coverage is provided) of the Premium payable by Dayco Salaried
Employees for the group medical insurance type coverage which is then being
provided to such Dayco Salaried Employees. At the end of the one (1) year
period following the date of the Executive's death or, if earlier, at such
time that the Corporations terminate the group medical insurance type coverage
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required to be provided to the Executive's spouse and dependents hereunder by
reason of the failure of the Executive's spouse to pay the Employee Portion of
the Premium described above, the Executive's spouse and dependents shall be
entitled to elect to receive continuation coverage with respect to such
medical insurance in accordance with the applicable provisions of Section
4980B of the Internal Revenue Code of 1986, as amended, and the applicable
continuation coverage provisions of the Employee Retirement Income Security
Act of 1974, as amended ("ERISA").
ARTICLE 6.
Disability Benefits
6.01 Short-Term Disability. Except as otherwise provided in Section
6.02 hereof, in the event the Executive becomes disabled and is unable to
perform his duties hereunder, there shall be no reduction in the amount of the
Executive's Base Salary or any other benefits payable to him under this
Agreement.
6.02 Long-Term Disability. If, during the term of this Agreement, it
is determined that the Executive suffers from a Total and Permanent Disability
(as hereinafter defined), then, effective on the last day of the month in
which such determination is made, the Executive's employment hereunder shall
be deemed to be terminated. Upon such termination, unless a Change in Control
(as defined in Section 7.02 hereof) has occurred within the three (3) year
period preceding such termination and the Executive, as permitted by Section
7.01 hereof, has elected, in writing, to receive payment of the Change in
Control benefits described in Article 7 of this Agreement, the Corporations
shall pay to the Executive in equal monthly installments, for each twelve (12)
month period beginning on the day immediately following the date of such
termination and any anniversary thereof (an "Anniversary Date"), until the
Executive's 65th birthday, an amount equal to, his Base Salary, at the rate in
effect on the date his employment is terminated, up to a maximum of $150,000
per year (adjusted as set forth below), less the amounts of all social
security, retirement or disability benefits payable to the Executive for each
such twelve (12) month period by any agency of the United States Government or
the State of Ohio.
In addition to the foregoing, in the event the Executive's
employment with the Corporations is terminated as a result of his suffering of
a Total and Permanent Disability, the Corporation shall continue to provide
group medical insurance type coverage to the Executive as required by Section
2.09(c) hereof.
6.03 Cost of Living Adjustment. On each Anniversary Date, the $150,000
per year limit contained in Section 6.02 shall be adjusted on a cumulative
basis for each annual increase in the U. S. Department of Labor Bureau of
Labor Statistics Consumer Price Index for Urban Wage Earners and Xxxxxxxx
Xxxxxxx, Xxx Xxxx, Xxx Xxxx, 0000-00 = 100 measured between the month prior to
the first month in which such compensation payments were made and the month
prior to the commencement of each such successive year.
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6.04 Determination of Total and Permanent Disability. Any question as
to the existence or extent of disability of the Executive upon which the
Executive and the Corporations cannot agree shall be determined by a qualified
independent physician selected by the Executive and approved by the
Corporations (or, if the Executive is unable to make such selection, as
selected by any adult member of his immediate family). For purposes of this
Agreement, the Executive shall be deemed to suffer from a Total and Permanent
Disability if it is determined that the Executive is physically or mentally
unable to substantially perform his duties under this Agreement for a period
of twelve (12) consecutive months. The determination of any question as to
disability under this Section 6.04 by such physician shall be made in writing
to the Corporations and to the Executive and shall be final and conclusive for
all purposes of this Agreement.
ARTICLE 7.
Change in Control Benefits
7.01 Change in Control Termination. The Corporations will provide or
cause to be provided to the Executive the rights and benefits described in
Section 7.03 hereof in the event that, during the term of this Agreement
(including any renewal terms), the Executive's employment by the Corporations
is terminated at any time within three (3) years following a "Change in
Control" (as hereinafter defined) either:
(a) by either of the Corporations for any reason other than the
Executive's fraudulent conduct in connection with his employment by the
Corporations or conviction of a felony; or
(b) by the Executive following the occurrence of any of the
following events:
(i) the assignment to the Executive of any duties or
responsibilities that are inconsistent with his position, duties,
responsibilities or status immediately preceding such Change in Control;
(ii) a reduction of the Executive's Base Salary, bonuses or
other compensation or benefits from those types or amounts in effect
immediately prior to the Change in Control; or
(iii) the relocation of the principal executive offices of
either of the Corporations or a change in the duties of the Executive which
requires the Executive to move his residence from its Dayton, Ohio
metropolitan area; or
(c) by the Executive, if he shall determine in good faith that
due to a Change in Control, he is no longer able to effectively discharge his
duties under this Agreement.
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For purposes of this Agreement, if the Executive's employment with
the Corporations is terminated after the occurrence of a Change in Control (as
hereinafter defined) for any of the reasons described above in this Section
7.01, such termination of employment shall hereinafter be referred to as a
"Change in Control Termination."
In the event that the Executive's employment with either of the
Corporations is terminated within three (3) years following a Change in
Control and, following the date the Executive's employment with either of the
Corporations is terminated, it is determined (in accordance with Section 6.04
hereof) that, at the time the Executive's employment with either of the
Corporations was terminated, the Executive suffered from a Total and Permanent
Disability (as defined in Section 6.04 hereof), the Executive shall have the
right to elect, in writing, to receive the Change in Control benefits provided
for by this Article 7 or the disability benefits provided for by Section 6.02
hereof. Upon receipt by either of the Corporations of such written election
from the Executive, the Corporations shall pay (or cause to be paid) to the
Executive, the Change in Control benefits provided for by this Article 7 or
the disability benefits provided for by Section 6.02 hereof, whichever is
elected by the Executive. The Corporations shall not be entitled to object to
or contest their obligations to make any such payments (or cause such payments
to be made) or the Executive's right to make any such election on the grounds
that the Executive suffered from a Total and Permanent Disability at the time
his employment was terminated. In addition, if the Executive has attained at
least age sixty (60) and the Executive elects to terminate his employment with
the Corporations for any of the reasons set forth above in this Section 7.01
and within three (3) years following the occurrence of a Change in Control,
the Corporations shall have no right to object to or challenge the right of an
Executive to receive any payments provided for under this Article 7 on the
grounds that the Executive was otherwise entitled to retire from his
employment with the Corporation pursuant to Section 3.05 hereof.
7.02 Change in Control. For purposes of this Agreement, a "Change in
Control" shall be deemed to have occurred if: (a) any consolidation or merger
of Xxxx XX is consummated, as a result of which, Xxxx XX is not the continuing
or surviving corporation, or pursuant to which shares of Xxxx IV's common
stock would be converted into cash, securities or other property, other than a
merger of Xxxx XX in which the holders of Xxxx IV's common stock immediately
prior to the merger have the same proportionate ownership of common stock of
the surviving corporation immediately after the merger, or (b) any
consolidation or merger of Dayco is consummated, as a result of which, Dayco
is not the continuing or surviving corporation or pursuant to which shares of
Dayco's common stock would be converted to cash, securities or other property
other than a merger of Dayco in which Xxxx XX, immediately following such
merger, directly or indirectly owns not less than fifty-one percent (51%) of
the issued and outstanding common stock of the surviving corporation; (c) any
sale, lease, exchange or other transfer (in one transaction or a series of
related transactions) of all, or substantially all, of the assets of Xxxx XX
is consummated, or (d) any sale, lease, exchange or other transfer (in one
transaction or a series of related transactions) of all or substantially all
12
of the assets of Dayco is consummated except any such transaction or series of
transactions which result in the transfer of all or substantially all the
assets of Dayco to Xxxx XX or any direct or indirect wholly owned subsidiaries
of Xxxx XX; or (e) the stockholders of Xxxx XX approve any plan or proposal
for the liquidation or dissolution of Xxxx XX; or (f) any person (as such term
is used in Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act") but excluding Xxxx XX and each of Xxxx IV's
officers and directors, whether individually or collectively), shall become
the beneficial owner (within the meaning of Rule 13d-3 under the Exchange Act)
of 20% or more of Xxxx IV's outstanding common stock or more than fifty
percent (50%) of Dayco's outstanding common stock other than as a result of an
initial public offering of the common stock of Dayco pursuant to a
registration statement filed with the United States Securities and Exchange
Commission under the applicable provisions of the Securities Act of 1993, as
amended; or (g) during any period of three (3) consecutive years, individuals
who at the beginning of such period constitute the entire Board of Directors
of Xxxx XX shall cease for any reason to constitute a majority thereof unless
the election, or the nomination for election by Xxxx IV's stockholders, of
each new director was approved by a vote of at least two-thirds of the
directors then still in office who were directors at the beginning of the
period.
7.03 Payments on Change in Control Termination.
(a) If a Change in Control Termination occurs prior to the end
of the first year of the Executive's employment hereunder, the Corporations
shall pay to the Executive within ten (10) days after the date of such Change
in Control Termination, a lump sum payment equal to three (3) times the sum
of: (i) the Base Salary of the Executive in effect on the date of such Change
in Control Termination; and (ii) the annualized amount of all bonuses awarded
to or received by the Executive pursuant to Section 2.02 hereof prior to the
Change in Control Termination, or, if no bonus has been awarded to or received
by the Executive prior to the Change in Control Termination, the amount of the
bonuses which would have been awarded to or received by the Executive on an
annualized basis pursuant to Section 2.02 hereof with respect to the fiscal
year of Xxxx XX in which the Change in Control Termination occurs, assuming
the Executive's employment with the Corporations continued through the end of
such fiscal year (the annualized amount of the bonus awarded to or received by
the Executive or to be awarded to or received by the Executive with respect to
the fiscal year of Xxxx XX in which the Change in Control Termination occurs
being hereinafter referred to as the "Initial Bonus");
(b) If a Change in Control Termination occurs after the end of
the first year of the Executive's employment hereunder but prior to the end of
the second year of the Executive's employment hereunder, the Corporations
shall pay to the Executive within ten (10) days after the date of such Change
in Control Termination, a lump sum payment equal to three (3) times the sum
of: (i) the average of the Base Salary of the Executive in effect during the
13
Executive's employment hereunder; and (ii) the average of the sum of: (A)
Initial Bonus; and (B) the amount of all bonuses awarded to or received by the
Executive under Section 2.02 hereof during the second year of the Executive's
employment hereunder, or, if no bonus has been awarded to or received by the
Executive during the second year of the Executive's employment hereunder, the
amount of the bonuses which would have been awarded to or received by the
Executive on an annualized basis pursuant to Section 2.02 hereof with respect
to the fiscal year of Xxxx XX in which the Change in Control Termination
occurs, assuming the Executive's employment with the Corporations continued
through the end of such fiscal year (the amount of the bonus awarded to or
received by the Executive or to be awarded to or received by the Executive
with respect to the fiscal year of Xxxx XX in which the Change in Control
Termination occurs being hereinafter referred to as the "Second Bonus");
(c) If a Change in Control Termination occurs after the end of
the second year of the Executive's employment hereunder but prior to the end
of the third year of the Executive's employment hereunder, the Corporations
shall pay the Executive within ten (10) days after the date of such Change in
Control Termination, a lump sum payment equal to three (3) times the sum of:
(i) the average of the Base Salary of the Executive in effect during the
Executive's employment hereunder; and (ii) the average of the sum of: (A) the
amount of the Initial Bonus; (B) the Second Bonus; and (C) the amount of all
bonuses awarded to or received by the Executive under Section 2.02 hereof
during the third year of the Executive's employment hereunder, or, if no bonus
has been awarded to or received by the Executive during the third year of the
Executive's employment hereunder, the amount of the bonuses which would have
been awarded to or received by the Executive on an annualized basis pursuant
to Section 2.02 hereof with respect to the fiscal year of Xxxx XX in which the
Change in Control Termination occurs, assuming the Executive's employment with
the Corporations continued through the end of such fiscal year; and
(d) If a Change in Control Termination occurs after the end of
the third year of the Executive's employment hereunder, the Corporations shall
pay to the Executive within ten (10) days after the date of such Change in
Control Termination, a lump sum payment equal to three (3) times the sum of:
(i) the average of the Base Salary of the Executive in effect during the three
(3) year period ending on the date the Change in Control Termination occurs;
and (ii) the average of the amount of all bonuses awarded to or received by
the Executive pursuant to Section 2.02 hereof during the three (3) year period
ending on the date of the Change in Control Termination.
7.04 Effect of Deferred Compensation. The amounts payable to the
Executive pursuant to Section 7.03 hereof shall be determined based on the
amount of the Base Salary and the amount of any bonus which is payable to the
Executive, whether or not the Executive actually receives payment of such Base
Salary or bonus as a result of a deferral made by the Executive of the receipt
of payment of any portion of such Base Salary or bonus as permitted by the
terms of the Deferred Comp. Plan as applicable to the Executive.
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7.05 Benefits Upon Death. If the Executive dies following a Change
in Control Termination but prior to the payment of the applicable lump sum
provided for in Section 7.03 above, the Corporations shall pay the applicable
lump sum described in Section 7.03 hereof to the Executive's Beneficiary (as
described in Section 5.01 hereof) within ten (10) days following receipt by
either of the Corporations of payment instructions from such Beneficiary.
7.06 Effect of Change in Control Termination on Other Benefits.
(a) The occurrence of a Change in Control Termination with respect
to the Executive shall not affect the Executive's right to receive any
payments due to the Executive under the terms of the Master 401(k) Plan, the
Deferred Comp. Plan or any other tax qualified or other retirement plan which
the Executive is a participant in. All such payments will be made in
accordance with the provisions of the applicable document containing the terms
of the Master 401(k) Plan, the Deferred Comp. Plan and any other such tax
qualified or other retirement plan.
(b) The occurrence of a Change in Control Termination with
respect to the Executive shall not affect the obligation of the Corporations
under Section 2.09 hereof to continue to pay all premiums needed to maintain
policies of life insurance for the Executive and to continue to provide group
medical insurance type coverage for the benefit of the Executive for the rest
of the Executive's life in amounts at least reasonably comparable to the group
medical insurance type coverage which was in effect for the Executive and the
policies of such life insurance maintained by the Corporation for the benefit
of the Executive as of the date of the Executive's Change in Control
Termination.
(c) Except as set forth in Sections 7.06(a) and (b) hereof, any
payments required to be made to the Executive or his Beneficiary pursuant to
Sections 7.03 and 7.05 hereof shall, when received by the Executive, or his
Beneficiary, be in lieu of any payments otherwise provided with respect to the
Executive's termination of employment under any other severance pay or other
similar plan or policy maintained by the Corporations. The Corporations may,
in their sole discretion, change, replace or eliminate the Dayco Medical Plan
and any retirement plan or insurance policy described in Sections 7.06(a) and
(b) above at any time, but shall not do so after a Change in Control in a
manner which would prevent the Executive from receiving any benefit which he
would otherwise have been entitled to receive either immediately preceding the
Change of Control or immediately preceding a Change in Control Termination.
7.07 Certain Additional Payments by the Corporations. (a) Anything in
this Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by either of the Corporations 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
Internal Revenue Code of 1986, as amended or any similar section (the "Code")
or any interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties being hereinafter collectively
15
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 any Excise Tax,
imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 7.07(c) hereof, all
determinations required to be made under this Section 7.07, including whether
a Gross-Up Payment is required and the amount of such Gross-Up Payment, shall
be made by Coopers & Xxxxxxx, L.L.P. or any other nationally recognized firm
of certified public accountants (the "Accounting Firm" ) which shall provide
detailed supporting calculations both to each of the Corporations and to the
Executive within 15 business days of termination of the Executive's employment
under this Agreement, if applicable, or such earlier time as is requested by
the Executive or either of the Corporations. When calculating the amount of
the Gross-Up Payment, the Executive shall be deemed to pay:
(i) Federal income taxes at the highest applicable
marginal rate of Federal income taxation for the calendar year in which the
Gross-Up Payment is to be made, and
(ii) any applicable state and local income taxes at the
highest applicable marginal rate of taxation for the calendar year in which
the Gross-Up Payment is to be made, net of the maximum reduction in Federal
income taxes which could be obtained from deduction of such state and local
taxes if paid in such year.
If the Accounting Firm has performed services for the person, entity or
group who caused the Change of Control, as described in Section 7.02 hereof or
any affiliate thereof, the Executive may select an alternative accounting firm
from any nationally recognized firm of certified public accountants. If the
Accounting Firm determines that no Excise Tax is payable by the Executive, it
shall furnish the Executive with an opinion that he has substantial authority
not to report any Excise Tax on his federal income tax return. Any
determination by the Accounting Firm shall be binding upon each of the
Corporations 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 Corporations should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Corporations exhaust their remedies pursuant
to Section 7.07(c) hereof, 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 Corporations to or for the benefit of the Executive.
16
(c) The Executive shall notify each of the Corporations in writing of
any claim by the Internal Revenue Service that, if successful, would require
the payment by either of the Corporations of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than ten
business days after the Executive knows of such claim and shall apprise each
of the Corporations 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 thirty-day period following the date on which it
gives such notice to the Corporations (or such shorter period ending on the
date that any payment of taxes with respect to such claim is due). If either
of the Corporations 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 Corporations any information reasonably
requested by either of the Corporations relating to such claim,
(ii) take such action in connection with contesting such
claim as either of the Corporations 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 either of the
Corporations,
(iii)cooperate with the Corporations in good faith in order
effectively to contest such claim, and
(iv) permit each of the Corporations to participate in any
proceedings relating to such claim; provided, however, that the Corporations
shall bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection 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
7.07(c), the Corporations shall control all proceedings taken in connection
with such contest and, at their 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 their 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
Corporations shall determine; provided, however, that if either of the
Corporations directs the Executive to pay such claim and xxx for a refund, the
Corporations 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 statue of limitations relating to payment
of taxes for the taxable year of the Executive with respect to which such
17
contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Corporations' 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 Corporations pursuant to Section 7.07(c) hereof, the Executive becomes
entitled to receive any refund with respect to such claim, the Executive shall
(subject to the compliance by the Corporations with the requirements of
Section 7.07(c)) promptly pay to the Corporations the amount of such refund
(together with any interest paid or credited thereon by the taxing authority
after deducting any taxes applicable thereto). If, after the receipt by the
Executive of an amount advanced by the Corporations pursuant to Section
7.07(c) hereof, a determination is made that the Executive shall not be
entitled to any refund with respect to such claim and the Corporations do not
notify the Executive in writing of their intent to contest such denial of
refund prior to the expiration of thirty 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 under Section 7.07(a) hereof. The
forgiveness of such advance shall be considered part of the Gross-Up Payment
and subject to gross-up for any taxes (including interest or penalties)
associated therewith.
ARTICLE 8.
Severance and Effects of Termination
8.01 Effect of Termination for Cause. In the event the Executive's
employment with the Corporations is terminated by either of the Corporations
for cause pursuant to the provisions of Section 3.02 hereof, the Corporations
shall pay to the Executive any monthly installment of his Base Salary which is
accrued and unpaid as of the date of the Executive's termination at the
monthly rate then in effect and, thereafter, except as otherwise provided for
by Sections 2.09, 8.06 and 8.07 hereof, the Corporations shall have no further
obligation to pay the Executive any additional Base Salary, compensation or
bonuses, no further obligation to provide the Executive any medical, life,
disability or other insurance benefits hereunder and no further obligation to
pay or provide any other benefits provided to the Executive hereunder.
8.02 Effect of Voluntary Termination. In the event that the Executive
voluntarily terminates his employment with the Corporations as provided for by
Section 3.04 hereof, the Corporations shall pay to the Executive any monthly
installment of his Base Salary which is accrued and unpaid as of the date of
the Executive's termination at the monthly rate then in effect and,
thereafter, the Corporations shall have no further obligation to pay the
Executive any additional Base Salary, compensation or bonuses, no further
obligation to provide any medical, life, disability or other insurance
benefits to the Executive hereunder, and, except as otherwise provided under
the terms of Sections 8.06 and 8.07 hereof, no further obligation to pay any
other benefits provided to the Executive hereunder.
18
8.03 Effect of Termination Without Cause. In the event the Executive's
employment with the Corporations is terminated by either of the Corporations,
without cause, pursuant to Section 3.03 hereof, the Corporations shall,
(except as otherwise provided by Section 8.05 hereof), pay the Executive an
amount equal to the sum of: (a) one and one-half (1.5) times his Base Salary
at the rate then in effect (such amount being hereinafter referred to as the
"Base Salary Severance Payment"); (b) a pro-rata portion (determined on the
basis of the number of months the Executive was employed by the Corporations
during the fiscal year of Xxxx XX in which the Executive's employment is
terminated) of the amount, if any, of all bonuses which would have been
payable to the Executive had he continued in the employ of the Corporations
until the end of the fiscal year of Xxxx XX in which the Executive's
employment is terminated without cause (such amount being hereinafter referred
to as the "Bonus Severance Payment"); and (c) any amounts with respect to
which the Executive is deemed to be vested under the terms of the Deferred
Comp. Plan (such amount being hereinafter referred to as the "Deferred Comp.
Severance Payment"). For purposes of this Section 8.03, (w) the Base Salary
Severance Payment shall be paid to the Executive in eighteen (18)
substantially equal consecutive monthly installments beginning on the first
day of the first calendar month following the date the Executive's employment
with the Corporations is terminated; (x) the Bonus Severance Payment, if any,
shall be paid to the Executive in one lump sum payment at the time bonuses are
paid to salaried employees of Dayco for the fiscal year of Xxxx XX in which
the Executive's employment is terminated; and (y) the Deferred Comp. Severance
Payment shall be paid to the Executive at the time and in the manner provided
for in the Deferred Comp. Plan. In addition, if the Executive's employment
with any of the Corporations is terminated by any of the Corporations, without
cause, pursuant to Section 3.03 hereof, except as otherwise provided above and
in Sections 2.09 and 8.07 hereof, the Corporations shall have no further
obligation following the Executive's termination to pay the Executive any
additional Base Salary, compensation or bonuses, no further obligation to
provide any medical, life, disability or other insurance benefits to the
Executive hereunder and no further obligation to pay to the Executive any
other benefits otherwise provided to the Executive hereunder.
8.04 Effect of Retirement. In the event the Executive terminates his
employment with the Corporations by reason of his retirement as provided for
in Section 3.05 hereof, the Corporations shall pay to the Executive any
monthly installment of his Base Salary which is accrued and unpaid as of the
date of the Executive's retirement at the monthly rate then in effect plus an
amount equal to the amount of all bonuses which would have been payable to the
Executive by the Corporations pursuant to Section 2.02 hereof if the Executive
had remained in the employ of the Corporations until the end of the fiscal
year of Xxxx XX in which the Executive retires and assuming that average
monthly earnings of Dayco and Xxxx XX for the portion of Xxxx IV's fiscal year
which has elapsed prior to the date the Executive retires continues at such
rate after the Executive retires through the end of the fiscal year of Xxxx XX
in which the Executive retires. In addition, in the event the Executive
terminates his employment with the Corporations by reason of his retirement as
19
provided for in Section 3.05 hereof, the Corporations shall provide the
Executive group medical insurance type coverage which is the same as the group
medical insurance type coverage provided by Dayco to Retired Dayco Salaried
Employees under the terms of the Dayco Medical Plan provided that the
Executive pays to the Corporations the portion of the Premiums which is
required to be paid by all other Retired Dayco Salaried Employees in
connection with the provision of such group medical insurance type coverage as
described in the first paragraph of Section 2.09 hereof. Thereafter, except as
otherwise provided for above in this Section 8.04 and except as otherwise
provided in Sections 8.06 and 8.07 hereof, the Corporations shall have no
further obligation to pay the Executive any additional Base Salary,
compensation, bonuses or other benefits provided to the Executive hereunder.
8.05 Special Rules Relating to IPO's. Notwithstanding anything to the
contrary contained in this Agreement, in the event that the Executive's
employment with Xxxx XX is terminated in connection with an initial public
offering of the common stock of Dayco as described in Section 7.02(f) hereof,
and, in connection with such initial public offering, the Executive remains
the President of Dayco Industrial, such termination shall, for purposes of
determining the Executive's rights upon a termination of employment, be deemed
to be a voluntary termination of employment by the Executive pursuant to
Section 3.04 hereof. In addition if, in connection with an initial public
offering of common stock of Dayco as described in Section 7.02(f) hereof, the
Executive rejects an offer from Dayco to be employed by Dayco as President of
Dayco Industrial upon terms which are at least reasonably comparable to the
terms of this Agreement and, in connection with the Executive's rejection of
such offer of employment, the Executive terminates his employment with the
Corporations or the Executive's employment with the Corporations is terminated
by the Corporations, without cause, as permitted by Section 3.03 hereof,
notwithstanding anything to the contrary contained in Section 8.03 hereof,
upon the occurrence of such termination, the Corporations shall pay to the
Executive any monthly installment of his Base Salary which is accrued and
unpaid as of the date of the Executive's termination at the monthly rate then
in effect and, thereafter, except as otherwise provided by Sections 2.09(a),
8.06 and 8.07 hereof, the Corporations shall have no further obligation to pay
the Executive any additional Base Salary, compensation or bonuses, no further
obligation to provide any medical, life, disability or other insurance
benefits to the Executive hereunder, and no further obligation to pay any
other benefits to the Executive hereunder.
8.06 Non-Qualified Deferred Compensation Plan Payments. Upon
termination of the Executive's employment with the Corporations for any
reason, the Executive shall be entitled to payment in full of the vested
portion, determined at the time the Executive's employment with the
Corporations is terminated, of the vested portion of all amounts payable to
the Executive under the terms of the Deferred Comp. Plan. Payment of such
vested portion of the amounts payable to the Executive under the terms of the
Deferred Comp. Plan shall be made at the time and in the manner provided for
by the terms of the Deferred Comp. Plan.
20
8.07 Retirement Plan Payments. Nothing in this Agreement shall be
deemed to limit the Executive's rights to receive or the obligations of the
Corporations to pay or provide for the Executive and his beneficiaries, any
continuation coverage as required by ERISA or any retirement or other benefits
accrued by the Executive at any time under the terms of any retirement plans
maintained by the Corporations which are subject to the requirements of ERISA
and satisfy the requirements of Section 401 of the Code.
ARTICLE 9.
Miscellaneous
9.01 Litigation Expenses. In the event that any dispute shall arise
under this Agreement between the Executive and either of the Corporation which
is related to the Change in Control Termination provisions of Article 7
hereof, the Corporations shall be responsible for the payment of all
reasonable expenses of all parties to such dispute, including reasonable
attorney fees, regardless of the outcome thereof.
9.02 Amendments. This Agreement may not be amended or modified orally,
and no provision hereof may be waived, except in a writing signed by the
parties hereto.
9.03 Assignment. This Agreement cannot be assigned by either party
hereto except with the written consent of the other.
9.04 Prior Agreements. This Agreement shall supersede and replace any
and all prior agreements between either of the Corporations and the Executive,
whether express or implied. Except as specifically provided herein, nothing
contained in this Agreement shall be construed to constitute a waiver by the
Executive of any rights or claims under any existing pension or retirement
plans of either of the Corporations.
9.05 Binding Effect. This Agreement shall be binding upon and inure to
the benefit of the personal representatives and successors in interest of the
Executive and any successors in interest of either of the Corporations.
9.06 No Duplication. Each of the Corporations shall be jointly and
severally liable for providing the Executive the compensation and benefits
provided for by this Agreement. Notwithstanding the foregoing, the Executive
shall not be entitled to payment of duplicate benefits or compensation from
each of the Corporations and the payment once, by any or all of the
Corporations, of the compensation and benefits to be provided to the Executive
hereunder shall be deemed to fully satisfy the obligations of the Corporations
hereunder.
9.07 Applicable Law. This Agreement shall be governed and construed in
accordance with the laws of the State of New York applicable to contracts made
and to be performed wholly within such State except with respect to the
internal affairs of the Corporations and their respective stockholders, which
shall be governed by the General Corporation Law of the State of Delaware.
21
9.08 Notices. All notices and other communications given pursuant to
this Agreement shall be deemed to have been properly given or delivered if
hand-delivered, or if mailed, by certified mail or registered mail postage
prepaid, addressed to the Executive at the address first above written or if
to either of the Corporations, at their respective addresses first above
written with a copy to the attention of Xxxxxx X. Xxxxxx, Secretary, 000
Xxxxxxxx Xxxxxxxx, Xxxxxxx, Xxx Xxxx 00000. Notwithstanding anything to the
contrary contained in this agreement, delivery of any notice or communication
by the Executive to either of the Corporations shall be deemed and construed
to be effective as a delivery of such notice or other communication to each of
the Corporations. From time to time, any party hereto may designate by
written notice any other address or party to which such notice or
communication or copies thereof shall be sent.
9.09 Severability of Provisions. In case any one or more of the
provisions contained in this Agreement shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not in any way be affected or
impaired thereby and this Agreement shall be interpreted as if such invalid,
illegal or unenforceable provision was not contained herein.
9.10 Headings. The headings of the Sections and Articles of this
Agreement are inserted for convenience only and shall not constitute a part
hereof or affect in any way the meaning or interpretation of this Agreement.
IN WITNESS WHEREOF, the Executive and each of the Corporations
have caused this Agreement to be executed as of the day and year first above
written.
XXXX XX INDUSTRIES, INC.
By: /s/ Xxxxxxx X. Xxxxxxxx /s/ Xxxxxxx X. Bing
----------------------- ---------------------
Name: Xxxxxxx X. Xxxxxxxx Xxxxxxx X. Bing
Title: President
DAYCO PRODUCTS, INC.
By: /s/ Xxxxx X. XxXxxx
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Name: Xxxxx X. XxXxxx
Title: President
