EXHIBIT 10.24
XXXXX CORPORATION
CHANGE OF CONTROL AGREEMENT
AGREEMENT, made as of May 20, 2003, between Xxxxx Corporation, a
Wisconsin corporation, ("Corporation") and Xxxxx X. Xxxxxxxx.
WHEREAS, the Executive is now serving as an executive of the
Corporation in a position of importance and responsibility; and
WHEREAS, the Executive possesses intimate knowledge of the business and
affairs of the Corporation and its policies, markets and financial and human
resources, and the Executive has acquired certain confidential information and
data with respect to the Corporation; and
WHEREAS, the Corporation wishes to continue to receive the benefit of
the Executive's knowledge and experience and, as an inducement for continued
service, is willing to offer the Executive certain payments due to severance as
a result of change of control as set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the Executive and Corporation agree as follows:
SECTION 1. DEFINITIONS.
(a) Change of Control. For purposes of this Agreement, a
"Change of Control" shall occur if and when any person or group of persons (as
defined in Section 13(d)(3) of the Securities and Exchange Act of 1934) other
than the members of the family of Xxxxxxx X. Xxxxx, Xx. and their descendants,
or trusts for their benefit, and the X.X. Xxxxx Foundation, Inc., collectively,
directly or indirectly controls in excess of 50% of the voting common stock of
the Corporation.
(b) Termination Due to Change of Control. A "Termination Due
to Change of Control" shall occur if within the 24 month period beginning with
the date a Change of Control occurs (i) the Executive's employment with the
Corporation is involuntarily terminated (other than by reason of death,
disability or Cause) or (ii) the Executive's employment with the Corporation is
voluntarily terminated by the Executive subsequent to (A) any reduction in the
total of the Executive's annual base salary (exclusive of fringe benefits) and
the Executive's target bonus in comparison with the Executive's annual base
salary and target bonus immediately prior to the date the Change of Control
occurs, (B) a significant diminution in the responsibilities or authority of the
Executive in comparison with the Executive's responsibility and authority
immediately prior to the date the Change of Control occurs or (C) the imposition
of a requirement by the Corporation that the Executive relocate to a principal
work location more than 50 miles from the Executive's principal work location
immediately prior to the date the Change of Control occurs.
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(c) "Cause" means (i) the Executive's willful and continued
failure to substantially perform the Executive's duties with the Corporation
(other than any such failure resulting from physical or mental incapacity) after
written demand for performance is given to the Executive by the Corporation
which specifically identifies the manner in which the Corporation believes the
Executive has not substantially performed and a reasonable time to cure has
transpired, (ii) the Executive's conviction of (or plea of nolo contendere for
the commission of) a felony, or (iii) the Executive's commission of an act of
dishonesty or of any willful act of misconduct which results in or could
reasonably be expected to result in significant injury (monetarily or otherwise)
to the Corporation, as determined in good faith by the Board of Directors of the
Corporation.
(d) "Beneficiary" means any one or more primary or secondary
beneficiaries designated in writing by the Executive on a form provided by the
Corporation to receive any benefits which may become payable under this
Agreement on or after the Executive's death. The Executive shall have the right
to name, change or revoke the Executive's designation of a Beneficiary on a form
provided by the Corporation. The designation on file with the Corporation at the
time of the Executive's death shall be controlling. Should the Executive fail to
make a valid Beneficiary designation or leave no named Beneficiary surviving,
any benefits due shall be paid to the Executive's spouse, if living; or if not
living, then to the Executive's estate.
(e) "Code" means the Internal Revenue Code of 1986, as
amended.
SECTION 2. PAYMENTS UPON TERMINATION DUE TO CHANGE OF CONTROL.
(a) Following Termination Due to Change of Control, the
Executive shall be paid an amount equal to three times the annual base salary
paid the Executive by the Corporation in effect immediately prior to the date
the Change of Control occurs, and three times the average bonus payment received
in the three years immediately prior to the date the Change of Control occurs.
Such amount shall be paid in 36 monthly installments beginning on the 15th day
of the month following the month in which the Executive's employment with the
Corporation terminates.
(b) If the scheduled payments under paragraph (a) above would
result in disallowance of any portion of the Corporation's deduction therefore
under Section 162(m) of the Code, the payments called for under paragraph (a)
shall be limited to the amount which is deductible, with the balance to be paid
as soon as deductible by the Corporation. However, in such event, the
Corporation shall pay the Executive on a quarterly basis an amount of interest
based on the prime rate recomputed each quarter on the unpaid scheduled
payments.
SECTION 3. EXCISE TAX, ATTORNEY FEES.
(a) If the payments under Section 2 in combination with any
other payments which the Executive has the right to receive from the Corporation
(the "Total Payments") would result in the Executive incurring an excise tax as
a result of Section 280(G) of the Code, the Corporation will reimburse the
Executive for such Excise Tax.
(b) If the Executive is required to file a lawsuit to enforce
the Executive's rights under this Agreement or the Executive's Nonqualified
Retention Stock Option Agreements dated August 3, 1998 and February 24, 2003,
and the Executive prevails in such lawsuit, the Corporation will reimburse the
Executive for attorney fees incurred up to a maximum of $25,000.00.
SECTION 4. DEATH AFTER THE EXECUTIVE HAS BEGUN RECEIVING PAYMENTS.
Should the Executive die after Termination Due to Change of Control, but before
receiving all payments due the Executive hereunder, any remaining payments due
shall be made to the Executive's Beneficiary.
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SECTION 5. CONFIDENTIAL INFORMATION AGREEMENT.
The Executive has obligations under the separate Confidential Information
Agreement between the Executive and the Corporation which continue beyond the
Executive's termination of employment. The payments to be made hereunder are
conditioned upon the Executive's compliance with the terms of the Confidential
Information Agreement. The payments made hereunder shall be reduced by any
payments the Corporation makes to the Executive under Section 3 of the
Confidential Information Agreement. In the event the Executive violates the
provisions of the Confidential Information Agreement, no further payments shall
be due hereunder and the Executive shall be obligated to repay all previous
payments received hereunder in the same manner as provided in Section 4 of the
Confidential Information Agreement.
SECTION 6. MISCELLANEOUS.
(a) Non-Assignability. This Agreement is personal to the
Executive and, without the prior written consent of the Corporation, shall not
be assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be binding upon
the Corporation and its successors and assigns and shall also be enforceable by
the Executive's legal representatives.
(b) Successors. The Corporation shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Corporation
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent that the Corporation would have been required to perform it
if no such succession had taken place. As used in this Agreement, "Corporation"
shall mean both the Corporation as defined above and any such successor that
assumes and agrees to perform this Agreement, by operation of law or otherwise.
(c) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Wisconsin, without
reference to principles of conflict of laws, to the extent not preempted by
federal law. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.
(d) Notices. All notices and other communications under this
Agreement shall be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive: Xxxxx X. Xxxxxxxx
W68 X0000 Xxxxxxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
If to the Corporation: Xxxxx Corporation
0000 Xxxx Xxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Corporate Secretary
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph. Notices and communications shall be effective
when actually received by the addressee.
(e) Construction. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement. If any provision of this Agreement shall
be held invalid or unenforceable in part, the remaining portion of such
provision, together with all other provisions of this Agreement, shall remain
valid and enforceable and continue in full force and effect to the fullest
extent consistent with law.
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(f) No Guarantee of Employment. Nothing contained in this
Agreement shall give the Executive the right to be retained in the employment of
the Corporation or affect the right of the Corporation to dismiss the Executive.
(g) Amendment; Entire Agreement. This Agreement may not be
amended or modified except by a written agreement executed by the parties hereto
or their respective successors and legal representatives. This Agreement
contains the entire agreement between the parties on the subjects covered and
replaces all prior writings, proposals, specifications or other oral or written
materials relating thereto.
(h) Impact on Other Plans. No amounts paid to the Executive
under this Agreement will be taken into account as "wages", "salary", "base pay"
or any other type of compensation when determining the amount of any payment or
allocation, or for any other purpose, under any other qualified or nonqualified
plan or agreement of the Corporation, except as otherwise may be specifically
provided by such plan or agreement.
(i) Other Agreements. This Agreement supersedes any other
severance arrangement or Change of Control Agreement between the Corporation and
the Executive. This Agreement does not confer any payments or benefits other
than the payments described in Sections 2 and 3 hereof.
(j) Withholding. To the extent required by law, the
Corporation shall withhold any taxes required to be withheld with respect to
this Agreement by the federal, state or local government from payments made
hereunder or from other amounts paid to the Executive by the Corporation.
(k) Facility of Payment. If the Executive or, if applicable,
the Executive's Beneficiary, is under legal disability, the Corporation may
direct that payments be made to a relative of such person for the benefit of
such person, without the intervention of any legal guardian or conservator, or
to any legal guardian or conservator of such person. Any such distribution shall
constitute a full discharge with respect to the Corporation and the Corporation
shall not be required to see to the application of any distribution so made.
SECTION 7. CLAIMS PROCEDURE.
(a) Claim Review. If the Executive or the Executive's
Beneficiary (a "Claimant") believes that he or she has been denied all or a
portion of a benefit under this Agreement, he or she may file a written claim
for benefits with the Corporation. The Corporation shall review the claim and
notify the Claimant of the Corporation's decision within 60 days of receipt of
such claim, unless the Claimant receives written notice prior to the end of the
60 day period stating that special circumstances require an extension of the
time for decision. The Corporation's decision shall be in writing, sent by mail
to the Claimant's last known address, and if a denial of the claim, must contain
the specific reasons for the denial, reference to pertinent provisions of this
Agreement on which the denial is based, a designation of any additional material
necessary to perfect the claim, and an explanation of the claim review
procedure.
(b) Appeal Procedure to the Board. A Claimant is entitled to
request a review of any denial by the full Board by written request to the Chair
of the Board within 60 days of receipt of the denial. Absent a request for
review within the 60-day period, the claim will be deemed to be conclusively
denied. The Board shall afford the Claimant the opportunity to review all
pertinent documents and submit issues and comments in writing and shall render a
review decision in writing, all within 60 days after receipt of a request for
review (provided that, in special circumstances the Board may extend the time
for decision by not more than 60 days upon written notice to the Claimant.) The
Board's review decision shall contain specific reasons for the decision and
reference to the pertinent provisions of this Agreement.
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IN WITNESS WHEREOF, the Executive has signed this Agreement and, pursuant to the
authorization of the Board, the Corporation has caused this Agreement to be
signed, all as of the date first set forth above.
/s/ Xxxxx X. Xxxxxxxx
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Executive - Xxxxx X. Xxxxxxxx
Xxxxx Corporation
By: /s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx, Secretary
By: /s/ Xxxxx X. Xxxxxx
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Compensation Committee
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