EXHIBIT 10.3
AMENDMENT TO EMPLOYMENT AGREEMENT
with Xxxxxxx X. Xxxxxxxx
This Amendment to the Employment Agreement by and between Xxxxxx
International, Inc., an Indiana corporation (the "Company"), and Xxxxxxx X.
Xxxxxxxx (the "Executive") dated as of March 22, 1990 (the "Employment
Agreement") is made by and among the Company, Rohm and Xxxx Company, a
Delaware corporation ("Parent") and the Executive and is dated as of the
31st day of January, 1999.
WHEREAS, the Company, Parent and Gershwin Acquisition Corp., an
Indiana corporation and a wholly owned subsidiary of Parent ("Sub"), have
entered into an Agreement and Plan of Merger dated as of the 31st day of
January, 1999 (the "Merger Agreement"), pursuant to which Sub will merge
with and into the Company (the "Merger"), following which the Company will
be a wholly owned subsidiary of Parent; and
WHEREAS, it is acknowledged by the parties hereto that upon
consummation of the Merger, the Executive will have "Good Reason" to
terminate his employment pursuant to the Employment Agreement; and
WHEREAS, the Company and Parent have determined that it is in the
best interests of their respective shareholders, and the Executive has
agreed, to provide for the continued employment of the Executive following
the Merger and to amend and clarify the Employment Agreement in certain
respects as set forth below;
NOW, THEREFORE, it is hereby agreed as follows:
1. In General. Capitalized terms used and not defined in this
Amendment shall have the meanings assigned to them in the Employment
Agreement. It is acknowledged and agreed that the Employment Period will
have begun before the Effective Time (as defined in the Merger Agreement)
as a result of prior events contemplated by the Merger Agreement.
2. New Position. As of the Effective Time, clause (A) of Section
4(a)((i) of the Employment Agreement shall be amended to read in its
entirety as follows:
the Executive shall serve as a member of the Executive Council of
Parent, with the title of Senior Vice President, and as principal
operating officer of Parent and the Company in Chicago, Illinois,
with such duties and responsibilities commensurate with such
position as may be assigned to him from time to time by a Vice
Chairman or the Chief Operating Officer of Parent (it being
understood that he will not have reporting obligations to more
than one of such persons at any one time), and
3. Severance. At the Effective Time the Executive shall be paid in a
lump sum in cash the amount described in Section 6(d)(i) of the Employment
Agreement, calculated if he had exercised his right to terminate his
employment for Good Reason at the Effective Time. In consideration of the
foregoing payment, the Executive shall cease to be entitled to receive the
payment described in Section 6(d)(i) of the Employment Agreement upon
the subsequent termination of his employment for any reason. However, in
the event of the termination of the Executive's employment during the
period of one year following the Effective Time by Parent other than for
Cause or Disability, or by the Executive for Good Reason, the Executive
shall be entitled to receive a lump sum in cash within 30 days after the
Date of Termination equal to the aggregate of the following amounts: (a)
the product of (i) the Multiplier (as defined below) and (ii) the sum of
(A) the Annual Base Salary, (B) the Highest Annual Bonus and (C) the
Greater Long-Term Bonus; and (b) all Accrued Obligations (except to the
extent previously paid); and (c) a lump-sum retirement benefit equal to the
difference between (I) the actuarial equivalent of the benefits under the
Retirement Plans which the Executive would receive if the Executive's
employment continued at the compensation level provided for in Sections
4(b)(i) and 4(b)(ii) of the Employment Agreement for a period equal to one
year times the Multiplier, assuming for this purpose that all accrued
benefits are fully vested, and (II) the actuarial equivalent of the
Executive's actual benefit (paid or payable), if any, under the Retirement
Plans; provided, that for purposes of this sentence the term "Good Reason"
shall only relate to events occurring after the Effective Time and shall
mean "Good Reason" as defined in Section 5(c) of the Employment Agreement
except that the reference in clause (i) to Section 4(a) of the Employment
Agreement shall be deemed to refer to said Section 4(a) as amended by
Section 2 of this Amendment, and the last two sentences of said Section
5(c) shall be disregarded. The Executive shall also remain entitled to
receive the other payments and benefits provided for in the Employment
Agreement (other than Section 6(d)(i) thereof) in the event of a
termination of his employment during the Employment Period (it being
acknowledged that any such termination by the Executive will be for Good
Reason for such purposes). For purposes of this Section 3, the
"Multiplier" shall mean a fraction, the numerator of which is the number of
days from the Date of Termination through the first anniversary of the
Effective Time, and the denominator of which is 365.
4. Assumption by Parent. As of the Effective Time, Parent shall be
considered to have assumed the Employment Agreement and expressly agreed to
perform the Employment Agreement in the same manner and to the same extent
as the Company, as required by Section 11(c) of the Employment Agreement.
To effectuate the foregoing, as of the Effective Time: (a) all references
to "the Company" in Sections 3, 5, 9(b), 9(c) and 9(d) of the Employment
Agreement shall be deemed to refer to Parent instead of the Company; (b)
all references to "the Company" in Sections 6, 8, 9(a), 10, and 12(d) of
the Employment Agreement shall be deemed to refer to Parent as well as the
Company; (c) all references to "the Board" in Section 5(b) of the
Employment Agreement shall be deemed to refer to the Board of Directors of
Parent; (d) the reference in Section 10(a) to "the Chief Executive Officer"
shall be deemed to refer to the Chief Executive Officer of Parent; and (e)
notices to Parent under the Employment Agreement shall be given in
accordance with Section 12(b) to Parent at the address provided for in the
Merger Agreement. It is acknowledged that from and after the Effective
Time, Parent shall be considered an "affiliated company" of the Company as
that term is used in the Employment Agreement.
5. Supplemental Executive Retirement Program. It is acknowledged and
agreed that in addition to his rights and entitlements pursuant to the
Employment Agreement, as amended hereby, the Executive is entitled to
certain supplemental retirement benefits (the "SERP
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Benefits") from the Company pursuant to the Supplemental Executive
Retirement Program (the "SERP") set forth in the letter agreement dated
February 16, 1982, between P. Xxxxxxx Xxxxxx, on behalf of MortonNorwich,
and the Executive, the letter agreement dated April 26, 1984 between P.
Xxxxxxx Xxxxxx, on behalf of Xxxxxx Thiokol, Inc., and the Executive (the
"1984 Letter") (which incorporates by reference certain definitions set
forth in the Executive Employment Contract dated November 20, 1981 between
Xxxxxx-Norwich Products, Inc. and the Executive (the "Prior Employment
Agreement")), and the memorandum entitled "SERP Clarifications" dated March
7, 1989 from Xxxxxx Thiokol, Inc. to "Participants in The Supplemental
Executive Retirement Program ("SERP")." Without limiting any of the
Executive's rights under the SERP, it is acknowledged and agreed that
notwithstanding any provision of the Employment Agreement or the SERP, (i)
the Executive is not entitled to receive any benefits pursuant to the Prior
Employment Agreement (which remains in effect only to the extent that
certain provisions thereof are incorporated by reference to the 1984
Letter), (ii) the Retirement Plans referred to in Section 6(d)(i)(C) of the
Employment Agreement shall not be considered to include the SERP, (iii) the
consummation of the transactions contemplated by the Merger Agreement will
constitute a "change of control" for purposes of the SERP, and (iv) upon a
termination of the Executive's employment following the Merger by the
Executive for "Good Reason" or by Parent without "Cause," or as a result of
the Executive's Disability, in each case as defined in the Employment
Agreement, or upon the Executive's death at any time after the beginning of
the Employment Period (as defined in the Employment Agreement) (whether or
not during employment), the Executive (or in the event of his death at a
time when he is married, his surviving spouse) shall have a vested,
nonterminable right to the SERP Benefits provided for in Section 2 of the
1984 Letter.
6. Miscellaneous. (a) Except as specifically set forth in this
Amendment, the Employment Agreement and the SERP are hereby ratified and
confirmed without amendment.
(b) This Amendment may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute
but one and the same instrument.
(c) This Amendment shall be null and void, ab initio, and of no further
effect if the Merger Agreement is terminated before the consummation of the
Offer (as defined in the Merger Agreement).
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IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization from their respective Boards of
Directors, Parent and the Company have each caused these presents to be
executed in its name on its behalf, all as of the day and year first above
written.
/s/ Xxxxxxx X. Xxxxxxxx
---------------------------------
Xxxxxxx X. Xxxxxxxx
XXXXXX INTERNATIONAL, INC.
/s/ Xxxxxxxxxxx X. Xxxxxxx
By ---------------------------------
ROHM AND XXXX COMPANY
/s/ J. Xxxxxxxx Xxxxxx
By ---------------------------------
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