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EXHIBIT 10.4
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT between Xxxxxx Industries, Inc., a Delaware corporation
(the "Company"), and ________________________________________ (the "Employee")
is dated as of March 15, 1995 (the "Effective Date").
W I T N E S S E T H:
WHEREAS, the Company considers it to be in the best interests of its
stockholders to encourage the continued employment of key employees of the
Company; and
WHEREAS, the Employee is a key employee of the Company; and
WHEREAS, the Company believes that the possibility of the occurrence
of a Change in Control of the Company (as that phrase is defined in Section 2)
may result in the termination by the Employee of the Employee's employment by
the Company or in the distraction of the Employee from the performance of his
duties to the Company, in either case to the detriment of the Company and its
stockholders; and
WHEREAS, the Company recognizes that the Employee could suffer adverse
financial and professional consequences if a Change in Control of the Company
were to occur; and
WHEREAS, the Company wishes to enter into this Agreement to protect
the Employee if a Change in Control of the Company occurs, thereby encouraging
the Employee to remain in the employ of the Company and not be distracted from
the performance of his duties to the Company;
NOW, THEREFORE, the parties agree as follows:
Section 1. Other Employment Arrangements. Except as provided in
Section 15, this Agreement does not affect the Employee's existing or future
employment arrangements with the Company unless a Change in Control of the
Company shall have occurred before the expiration of the term of this
Agreement. The Employee's employment by the Company shall continue to be at
the will of the Board of Directors or, if the Employee is not an officer of the
Company at the time of the termination of the Employee's employment by the
Company, the will of the Chief Executive Officer of the Company, except that if
(i) a Change in Control of the Company shall have occurred before the
expiration of the term of this Agreement and (ii) the Employee's employment by
the Company is terminated (whether by the Employee or the Company or
automatically as provided in Section 3) after the occurrence of that Change in
Control of the Company, then the Employee shall be entitled to receive certain
benefits as provided in this Agreement.
Section 2. Change in Control of the Company. A "Change in
Control of the Company" shall have occurred if, after the Effective Date:
(i) a report on Schedule 13D shall be filed with the
Commission pursuant to Section 13(d) of the Exchange Act and that
report discloses that any person (within the meaning of Section 13(d)
of the Exchange Act), other than the Company (or one of its
subsidiaries) or any employee benefit plan sponsored by the Company
(or one of its subsidiaries), is the beneficial owner (as that term
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is defined in Rule 13d-3 under the Exchange Act), directly or
indirectly, of 20 percent or more of the outstanding Voting Stock;
(ii) any person (within the meaning of Section 13(d) of
the Exchange Act), other than the Company (or one of its subsidiaries)
or any employee benefit plan sponsored by the Company (or one of its
subsidiaries), shall purchase securities pursuant to a tender offer or
exchange offer to acquire any Voting Stock (or any securities
convertible into Voting Stock) and, immediately after consummation of
that purchase, that person is the beneficial owner (as that term is
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of 20 percent or more of the outstanding Voting Stock (such person's
beneficial ownership to be determined, in the case of rights to
acquire Voting Stock, pursuant to paragraph (d) of Rule 13d-3 under
the Exchange Act);
(iii) the stockholders of the Company shall approve (w) a
merger or consolidation of the Company with or into any other person,
unless the sole purpose of the merger is to change the Company's
domicile within the United States of America, (x) any sale, lease,
exchange or other transfer of all or substantially all the assets of
the Company and its consolidated subsidiaries, (y) the dissolution of
the Company, or (z) a transaction immediately after the consummation
of which any person (within the meaning of Section 13(d) of the
Exchange Act) would be the beneficial owner (as that term is defined
in Rule 13d-3 under the Exchange Act), directly or indirectly, of more
than 50 percent of the outstanding Voting Stock; or
(iv) during any period of 12 consecutive months, the
individuals who at the beginning of that period constituted the Board
of Directors shall cease to constitute a majority of the Board of
Directors.
Section 3. Term of This Agreement. The term of this Agreement
shall begin on the Effective Date and, unless automatically extended pursuant
to the second sentence of this Section 3, shall expire on the first to occur
of:
(i) the Employee's death, the Employee's Disability or
the Employee's Retirement, the occurrence of any of which shall
automatically result in the termination of the Employee's employment
by the Company,
(ii) the termination by the Employee or the Company of the
Employee's employment by the Company, or
(iii) the end of the three-year period (the "Expiration
Date") beginning on (x) the Effective Date if no Change in Control of
the Company shall have occurred during that three-year period (or any
period for which the term of this Agreement shall have been
automatically extended) or (y) if one or more Changes in Control of
the Company shall have occurred during that three-year period (or any
period for which the term of this Agreement shall have been
automatically extended), the date on which the last Change in Control
of the Company occurred.
If (i) the term of this Agreement shall not have expired as a result of the
occurrence of one of the events described in clause (i) or (ii) of the
immediately preceding sentence and (ii) the Company shall not have given notice
to the Employee not fewer than 45 days before the
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Expiration Date that the term of this Agreement will expire on the Expiration
Date, then the term of this Agreement shall be automatically extended for
successive one-year periods (the first such period to begin on the day
immediately following the Expiration Date) unless the Company shall have given
notice to the Employee not fewer than 45 days before the end of any one-year
period for which the term of this Agreement shall have been automatically
extended that such term will expire at the end of that one-year period. The
expiration of the term of this Agreement shall not terminate this Agreement
itself or affect the right of the Employee or the Employee's legal
representative to enforce the payment of any amount or other benefit to which
the Employee was entitled before the expiration of the term of this Agreement
or to which the Employee became entitled as a result of the event (including
the termination, whether by the Employee or the Company or automatically as
provided in this Section 3, of the Employee's employment by the Company) that
caused the term of this Agreement to expire.
Section 4. Event of Termination for Cause. An "Event of
Termination for Cause" shall have occurred if, after the Effective Date, the
Employee shall:
(i) willfully and continuously fail to substantially
perform the Employee's duties to the Company (other than any failure
that results from the Employee's having become mentally or physically
disabled or any actual or anticipated failure that results from the
occurrence of an Event of Termination for Good Reason) within 30 days
after notice demanding substantial performance, which notice shall
specifically identify the duties that the Employee has failed to
substantially perform, is given to the Employee by the Company; or
(ii) willfully engages in conduct that the Employee knows
to be materially injurious to the Company.
Section 5. An Event of Termination for Good Reason. An "Event
of Termination for Good Reason" shall have occurred if, after the Effective
Date, the Company shall:
(i) assign to the Employee any duties inconsistent with
the Employee's position (including offices, titles and reporting
requirements), authority, duties or responsibilities with the Company
in effect immediately before the occurrence of the first Change in
Control of the Company;
(ii) remove the Employee from, or fail to re-elect or
appoint the Employee to, any position with the Company that was held
by the Employee immediately before the occurrence of the first Change
in Control of the Company, except that a nominal change in the
Employee's title shall not constitute such an event;
(iii) take any other action that results in a material
diminution in such position, authority, duties or responsibilities;
(iv) reduce the Employee's annual base salary as in effect
immediately before the occurrence of the first Change in Control of
the Company or as the Employee's annual base salary may be increased
from time to time after that occurrence (the "Base Salary");
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(v) relocate the Employee's principal office outside of
the metropolitan area of the City of Houston, Texas;
(vi) fail to (x) continue in effect any profit sharing,
savings, retirement or pension plan of the Company in which the
Employee was a participant immediately before the occurrence of the
first Change in Control of the Company (including the Company's
Employees' Profit Sharing and Savings Plan), or any substitute plan
adopted by the Board of Directors and in which the Employee was a
participant immediately before the occurrence of the last Change in
Control of the Company, unless an equitable arrangement (embodied in a
substitute or alternative plan) shall have been made with respect to
such profit sharing, savings, retirement or pension plan promptly
following the occurrence of the last Change in Control of the Company,
or (y) continue the Employee's participation in any such plan (or any
substitute or alternative plan) on substantially the same basis, both
in terms of the amount of benefits provided to the Employee and the
level of the Employee's participation relative to other participants,
as existed immediately before the occurrence of the first Change in
Control of the Company;
(vii) fail to continue to provide the Employee with
benefits substantially similar to those enjoyed by the Employee under
any of the Company's other employee benefit plans (the "Other Benefit
Plans"), including life insurance, medical, dental, health, accident
or disability plans, in which the Employee was a participant
immediately before the occurrence of the first Change in Control of
the Company;
(viii) take any action that would directly or indirectly
materially reduce any other benefits that were provided to the
Employee by the Company immediately before the occurrence of the first
Change in Control of the Company or deprive the Employee of any
material fringe benefit enjoyed by the Employee immediately before the
occurrence of the first Change in Control of the Company;
(ix) fail to provide the Employee with the number of paid
vacation days to which the Employee was entitled in accordance with
the Company's vacation policy in effect immediately before the
occurrence of the first Change in Control of the Company;
(x) fail to comply with Section 8; or
(xi) purport to terminate the Employee's employment by the
Company unless notice of that termination shall have been given to the
Employee pursuant to, and that notice shall meet the requirements of,
Section 6.
Section 6. Notice of Termination. If a Change in Control of the
Company shall have occurred before the expiration of the term of this
Agreement, any subsequent termination by the Employee or the Company of the
Employee's employment by the Company, or any determination of the Employee's
Disability, shall be communicated by notice to the other party that shall
indicate the specific paragraph of Section 7 pursuant to which the Employee is
to receive benefits as a result of the termination. If the notice states that
the Employee's employment by the Company has been automatically terminated as a
result of the Employee's Disability, the notice shall (i) specifically describe
the basis for the determination of the
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Employee's Disability and (ii) state the date of the determination of the
Employee's Disability, which date shall be not more than ten days before the
date such notice is given. If the notice is from the Company and states that
the Employee's employment by the Company is terminated by the Company as a
result of the occurrence of an Event of Termination for Cause, the notice shall
specifically describe the action or inaction of the Employee that the Company
believes constitutes an Event of Termination for Cause. If the notice is from
the Employee and states that the Employee's employment by the Company is
terminated by the Employee as a result of the occurrence of an Event of
Termination for Good Reason, the notice shall specifically describe the action
or inaction of the Company that the Employee believes constitutes an Event of
Termination for Good Reason. Each notice given pursuant to this Section 6
(other than a notice stating that the Employee's employment by the Company has
been automatically terminated as a result of the Employee's Disability) shall
state a date, which shall be not fewer than 30 days nor more than 60 days after
the date such notice is given, on which the termination of the Employee's
employment by the Company is effective. The date so stated in accordance with
this Section 6 shall be the "Termination Date". If a Change in Control of the
Company shall have occurred before the expiration of the term of this
Agreement, any subsequent purported termination by the Company of the
Employee's employment by the Company, or any subsequent purported determination
by the Company of the Employee's Disability, shall be ineffective unless that
termination or determination shall have been communicated by the Company to the
Employee by notice that meets the requirements of the foregoing provisions of
this Section 6 and the provisions of Section 9.
Section 7. Benefits Payable on Change in Control and
Termination. If (x) a Change in Control of the Company shall have occurred
before the expiration of the term of this Agreement and (y) the Employee's
employment by the Company is terminated (whether by the Employee or the Company
or automatically as provided in Section 3) after the occurrence of that Change
in Control of the Company, the Employee shall be entitled to the following
benefits:
(i) If the Employee's employment by the Company is
terminated (x) by the Company as a result of the occurrence of an
Event of Termination for Cause or (y) by the Employee before the
occurrence of an Event of Termination for Good Reason, then the
Company shall pay to the Employee the Base Salary accrued through the
Termination Date but not previously paid to the Employee.
(ii) If the Employee's employment by the Company is
automatically terminated as a result of the Employee's death, the
Employee's Disability or the Employee's Retirement, then (x) the
Company shall pay to the Employee the Base Salary accrued through the
date of the occurrence of that event but not previously paid to the
Employee and (y) the other benefits to be paid to the Employee as a
result of that occurrence shall be determined in accordance with the
Other Benefit Plans in effect at that date.
(iii) If the Employee's employment by the Company is
terminated (x) by the Company otherwise than as a result of the
occurrence of an Event of Termination for Cause or (y) by the Employee
after the occurrence of an Event of Termination for Good Reason, then
the Employee shall be entitled to the following benefits:
(1) the Company shall pay to the Employee the
Base Salary accrued through the Termination Date but not
previously paid to the Employee;
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(2) the Company shall pay to the Employee, as a
lump sum, an amount (the "Severance Payment") equal to two and
one-half times the sum of:
(A) the amount of the Base Salary that
would have been paid to the Employee during the
fiscal year of the Company in which the Termination
Date occurs based on the assumption that the
Employee's employment by the Company had continued
throughout that fiscal year at the Base Salary equal
to the greater of (I) the Base Salary in effect at
the beginning of that fiscal year and (II) the Base
Salary in effect immediately before any reduction in
the Base Salary that constituted an Event of
Termination for Good Reason, plus
(B) the amount of any cash bonus paid or
payable by the Company to the Employee for services
rendered during the immediately preceding fiscal
year, regardless of whether that bonus was paid, or
is payable, after the end of such immediately
preceding fiscal year, plus
(C) the amount of any income that (I) is
or was includable, for federal income tax purposes,
in the Employee's gross income for any period and
(II) is attributable to the exercise of options that
were (X) granted to the Employee pursuant to any of
the Company's existing or future stock option plans
and (Y) exercised at any time during the 365-day
period that ends on the day immediately following the
Termination Date.
provided that the amount of the Severance Payment shall be
subject to reduction pursuant to Section 11; and
(3) the Company (at its sole expense) shall take
the following actions:
(A) throughout the Relevant Period, the
Company shall maintain in effect, and not materially
reduce the benefits provided by, each of the Other
Benefit Plans in which the Employee was a participant
immediately before the Termination Date; and
(B) the Company shall arrange for the
Employee's uninterrupted participation throughout
the Relevant Period in each of such Other Benefit
Plans,
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provided that if the Employee's participation after the
Termination Date in any such Other Benefit Plan is not
permitted by the terms of that Other Benefit Plan, then
throughout the Relevant Period, the Company (at its sole
expense) shall provide the Employee with substantially the
same benefits that were provided to the Employee by that Other
Benefit Plan immediately before the Termination Date.
Upon payment by the Company to the Employee of the amounts and other benefits
required to be paid pursuant to the foregoing provisions of this Section 7, the
Company shall no longer be obligated to pay any other amounts or benefits to
the Employee, other than benefits that, at the time of termination of the
Employee's employment by the Company, had vested in the Employee as a result of
the Employee's participation in any profit sharing, savings, retirement, or
pension plan of the Company. If the Employee's employment by the Company shall
have been terminated as a result of the Employee's death, the benefits
otherwise required to be paid to the Employee pursuant to the foregoing
provisions of this Section 7 shall be paid to the executor or administrator of
the estate of the Employee. Each payment required to be made to the Employee
pursuant to the foregoing provisions of this Section 7 (i) shall be made by
check drawn on an account of the Company at a bank located in the United States
of America and (ii) shall be paid (x) if the Employee's employment by the
Company was terminated as a result of the Employee's death, the Employee's
Disability or the Employee's Retirement, not more than 30 days immediately
following the date of the occurrence of that event, and (y) if the Employee's
employment by the Company was terminated for any other reason, not more than 10
days immediately following the Termination Date.
Section 8. Successors. If a Change in Control of the Company
shall have occurred before the expiration of the term of this Agreement,
(i) the Company shall not, directly or indirectly,
consolidate with, merge into or sell or otherwise transfer its assets
as an entirety or substantially as an entirety to, any person, or
permit any person to consolidate with or merge into the Company,
unless immediately after such consolidation, merger, sale or transfer,
the Successor shall have assumed in writing the Company's obligations
under this Agreement, and
(ii) not fewer than 10 days before the consummation of any
consolidation of the Company with, merger by the Company into, or sale
or other transfer by the Company of its assets as an entirety or
substantially as an entirety to, any person, the Company shall give
the Employee notice of that proposed transaction.
Section 9. Notice. Notices required or permitted to be given by
either party pursuant to this Agreement shall be in writing and shall be deemed
to have been given when delivered personally to the other party or when
deposited with the United States Postal Service as registered mail with postage
prepaid and addressed:
(i) if to the Employee, at the Employee's address last
shown on the Company's records, and
(ii) if to the Company, at 0000 Xxxx Xxxx Xxxxx, Xxxxxxx,
Xxxxx 00000, directed to the attention of the Chief Executive Officer,
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or, in either case, to such other address as the party to whom or which such
notice is to be given shall have specified by notice given to the other party.
Section 10. Withholding Taxes. The Company may withhold from all
payments to be paid to the Employee pursuant to this Agreement all taxes that,
by applicable federal or state law, the Company is required to so withhold.
Section 11. Conditional Reduction of Severance Payment. If all
or any portion of the amount of any Change in Control Payment would not be
deductible for federal income tax purposes by a Tax Affiliate (or other person
who made or is required to make such Change in Control Payment) by reason of
the application of section 280G of the Code, the Severance Payment shall be
reduced until (i) no portion of the total amount of all Change in Control
Payments is not deductible by a Tax Affiliate (or other person who made or is
required to make such Change in Control Payment) by reason of the application
of that section or (ii) the Severance Payment is reduced to zero. For purposes
of determining whether all or any portion of the amount of any Change in
Control Payment would not be deductible for federal income tax purposes by a
Tax Affiliate (or other person who made or is required to make such Change in
Control Payment) by reason of the application of that section,
(i) no portion of the total amount of all Change in
Control Payments the receipt or enjoyment of which the Employee shall
have effectively waived, for purposes of section 280G of the Code,
before the date of payment of the Severance Payment shall be taken
into account,
(ii) no portion of the total amount of all Change in
Control Payments shall be taken into account that, in the opinion of
tax counsel selected by the Company's independent accountants and
acceptable to the Employee (the "Tax Counsel"), does not constitute a
"parachute payment" within the meaning of section 280G(b)(2) of the
Code,
(iii) no portion of the total amount of all Change in
Control Payments shall be taken into account that, in the opinion of
Tax Counsel, (x) constitutes reasonable compensation for services
rendered within the meaning of section 280G(B)(4) of the Code and (y)
is not considered in the calculation of a "parachute payment" or is
considered in that calculation but does not cause an excess "parachute
payment", and
(iv) the value of any noncash benefit or any deferred
payment or benefit included in the total amount of all Change in
Control Payments shall be determined by the Company's independent
accountants in accordance with sections 280G(d)(3) and 280G(d)(4) of
the Code.
Section 12. Expenses of Enforcement. If a Change in Control of
the Company shall have occurred before the expiration of the term of this
Agreement, then, upon demand by the Employee made to the Company, the Company
shall reimburse the Employee for the reasonable expenses (including attorneys'
fees and expenses) incurred by the Employee in enforcing or seeking to enforce
the payment of any amount or other benefit to which the Employee shall have
become entitled pursuant to this Agreement, except to the extent that the
reimbursement of such expenses would not be, or would cause any other portion
of the total amount of all Change in Control Payments not to be, deductible for
federal income tax purposes by a Tax Affiliate (or other person who made or is
required to make such Change in Control Payment) by reason of the application
of section 280G of the Code.
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Section 13. Employment by Subsidiaries. If, at the Effective
Date, the Employee is an employee of a subsidiary of the Company, references in
this Agreement to the Employee's employment by the Company shall be to the
Employee's employment by the subsidiary.
Section 14. No Obligation to Mitigate. The Employee shall not be
required to mitigate the amount of any payment or other benefit required to be
paid to the Employee pursuant to this Agreement, whether by seeking other
employment or otherwise, nor shall the amount of any such payment or other
benefit be reduced on account of any compensation earned by the Employee as a
result of employment by another person.
Section 15. Confidential Information. From the Effective Date
until the expiration of the term of this Agreement, the Employee shall hold in
a fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, that shall have been obtained by
the Employee during the Employee's employment by the Company or any of its
affiliated companies and that shall not have become public knowledge (other
than as a result of acts by the Employee in violation of this Section 15). The
Company shall not withhold or reduce any amount or other benefit payable to the
Employee pursuant to the terms of this Agreement or otherwise on the grounds
that the Employee has breached or threatened to breach the foregoing provisions
of this Section 15, and the sole remedy of the Company for a breach or
anticipated breach of those provisions shall be injunctive relief.
Section 16. Amendment and Waiver. No provision of this Agreement
may be amended or waived unless that amendment or waiver is by written
instrument signed by the parties hereto. No waiver by either party of any
breach of this Agreement shall be deemed a waiver of any other or subsequent
breach.
Section 17. Governing Law. The validity, interpretation,
construction and enforceability of this Agreement shall be governed by the laws
of the State of Texas.
Section 18. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force and
effect.
Section 19. Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together will constitute the same instrument.
Section 20. Assignment. This Agreement shall inure to the
benefit of and be enforceable by the Employee's legal representative. The
Company may not assign any of its obligations under this Agreement unless (i)
such assignment is to a Successor and (ii) the requirements of Section 8 are
fulfilled.
Section 21. Arbitration. Any dispute between the parties arising
out of this Agreement, whether as to this Agreement's construction,
interpretation or enforceability or as to any party's breach or alleged breach
of any provision of this Agreement, shall be submitted to arbitration in
accordance with the following procedures:
(i) Either party may demand such arbitration by giving
notice of that demand to the other party. The notice shall state (x)
the matter in controversy and (y) the name of the arbitrator selected
by the party giving the notice.
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(ii) Not more than 15 days after such notice is given, the
other party shall give notice to the party who demanded arbitration of
the name of the arbitrator selected by the other party. If the other
party shall fail to timely give such notice, the arbitrator that the
other party was entitled to select shall be named by the Arbitration
Committee of the American Arbitration Association. Not more than 15
days after the second arbitrator is so named, the two arbitrators
shall select a third arbitrator. If the two arbitrators shall fail to
timely select a third arbitrator, the third arbitrator shall be named
by the Arbitration Committee of the American Arbitration Association.
(iii) The dispute shall be arbitrated at a hearing that
shall be concluded within 10 days immediately following the date the
dispute is submitted to arbitration unless a majority of the
arbitrators shall elect to extend the period of arbitration. Any
award made by a majority of the arbitrators (x) shall be made within
10 days following the conclusion of the arbitration hearing, (y) shall
be conclusive and binding on the parties, and (z) may be made the
subject of a judgment of any court having jurisdiction.
(iv) All expenses of the arbitration shall be borne by
the Company. The agreement of the parties contained in the foregoing
provisions of this Section 21 shall be a complete defense to any
action, suit or other proceeding instituted in any court or before any
administrative tribunal with respect to any dispute between the parties
arising out of this Agreement.
Section 22. Interpretation.
(a) As used in this Agreement, the following terms and phrases
have the indicated meanings:
(i) "Base Salary" has the meaning assigned to that term
in Section 5.
(ii) "Board of Directors" means the Board of Directors of
the Company.
(iii) "Change in Control of the Company" has the meaning
assigned to that phrase in Section 2.
(iv) "Change in Control Payment" means a payment or other
benefit, including the Severance Payment, received or to be received
by the Employee from any Tax Affiliate in connection with a Change in
Control of the Company or the termination of the Employee's employment
by the Company, whether that payment or other benefit has been paid or
is payable pursuant to this Agreement or otherwise.
(v) "Code" means the Internal Revenue Code of 1986, as
amended from time to time.
(vi) "Commission" means the United States Securities and
Exchange Commission or any successor agency.
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(vii) "Company" has the meaning assigned to that term in
the recitals to this Agreement. The term "Company" shall also include
any Successor, whether the liability of such Successor under this
Agreement is established by contract or occurs by operation of law.
(viii) "Effective Date" has the meaning assigned to that
term in the recitals to this Agreement.
(ix) "Employee's Disability" means:
(x) if no Change in Control of the Company shall
have occurred before the date of determination, the physical
or mental disability of the Employee determined in accordance
with the disability policy of the Company at the time in
effect and generally applicable to its salaried employees; and
(y) if a Change in Control of the Company shall
have occurred at that date, the physical or mental disability
of the Employee determined in accordance with the disability
policy of the Company in effect immediately before the
occurrence of the first Change in Control of the Company and
generally applicable to its salaried employees.
The Employee's Disability, and the automatic termination of the
Employee's employment by the Company by reason of the Employee's
Disability, shall be deemed to have occurred on the date of
determination, provided that if (1) a Change in Control of the Company
shall have occurred before the expiration of the term of this
Agreement, (2) the Company shall have subsequently given notice
pursuant to Section 6 of the Company's determination of the Employee's
Disability and (3) the Employee shall have given notice to the Company
that the Employee disagrees with that determination, then (A) whether
the Employee's Disability shall have occurred shall be submitted to
arbitration pursuant to Section 21, and (B) if a majority of the
arbitrators decide that the Employee's Disability had not occurred at
the date of determination by the Company, then (I) the Employee's
Disability, and the automatic termination of the Employee's employment
by the Company by reason of the Employee's Disability, shall be deemed
not to have occurred and (II) on demand by the Employee made to the
Company, the Company shall reimburse the Employee for the reasonable
expenses (including attorneys' fees and expenses) incurred by the
Employee in obtaining that decision.
(x) "Employee's Retirement" means (x) if no Change in
Control of the Company shall have occurred before the date of the
Employee's proposed retirement, the retirement of the Employee in
accordance with the retirement policy of the Company at the time in
effect and generally applicable to its salaried employees and (y) if a
Change in Control of the Company shall have occurred at that date, the
retirement of the Employee from the employ of the Company in
accordance with the retirement policy of the Company in effect
immediately before the occurrence of the first Change in Control of
the Company and generally applicable to its salaried employees.
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(xi) "Event of Termination for Good Reason" has the
meaning assigned to that phrase in Section 5.
(xii) "Event of Termination for Cause" has the meaning
assigned to that phrase in Section 4.
(xiii) "Exchange Act" means the Securities Exchange Act of
1934, as amended from time to time.
(xiv) "Expiration Date" has the meaning assigned to that
term in Section 3.
(xv) "Other Benefit Plans" has the meaning assigned to
that term in Section 4.
(xvi) "person" means any individual, corporation,
partnership, joint venture, association, joint-stock company, limited
partnership, limited liability company, trust, unincorporated
organization, government, or agency or political subdivision of any
government. When the context of this Agreement indicates, the term
"person" also has the meaning assigned to that term in Section 13(d)
of the Exchange Act.
(xvii) "Relevant Period" means a period beginning on the
Termination Date and ending on the first to occur of (x) the third
anniversary of the Termination Date, (y) the date on which the
Employee becomes a full time employee of another person and (z) the
Employee's normal retirement date, determined in accordance with the
retirement policy of the Company in effect on the Termination Date.
(xviii) "Severance Payment" has the meaning assigned to that
term in Section 7.
(xix) "Successor" means a person with or into which the
Company shall have been merged or consolidated or to which the Company
shall have transferred its assets as an entirety or substantially as
an entirety.
(xx) "Tax Affiliate" means the Company, any of its
successors pursuant to Section 8 or otherwise, any person whose
actions result in a Change in Control of the Company, and any person
"affiliated" or that, as a result of the completion of the
transactions that result in a Change in Control of the Company, will
become "affiliated" with the Company within the meaning of section
1504 of the Code.
(xxi) "Tax Counsel" has the meaning assigned to that term
in Section 7.
(xxii) "Termination Date" has the meaning assigned to that
term in Section 6.
(xxiii) "this Agreement" means this Change in Control
Agreement as it may be amended from time to time in accordance with
Section 16.
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(xxiv) "Voting Stock" means shares of capital stock of the
Company the holders of which are entitled to vote for the election of
directors of the Company, but excluding shares entitled to so vote
only upon the occurrence of a contingency unless that contingency
shall have occurred.
(b) In the event of the enactment of any successor provision to
any statute or rule cited in this Agreement, references in this Agreement to
such statute or rule shall be to such successor provision.
(c) The headings of Sections of this Agreement shall not control
the meaning or interpretation of this Agreement.
(d) References in this Agreement to any Section are to the
corresponding Section of this Agreement unless the context otherwise indicates.
IN WITNESS WHEREOF, the Company and the Employee have executed this
Agreement as of the Effective Date.
XXXXXX INDUSTRIES, INC.
By______________________________________
Chairman of the Board of Directors
[NAME OF EMPLOYEE]
By______________________________________
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