Exhibit 10(k)
March __, 2002
(Name)
Dear _____:
Agreement
Bethlehem Steel Corporation (the "Company") considers it essential to the best
interest of its stockholders to have the continuous employment of key
management personnel. In this connection, the Board of Directors of the
Company (the "Board") recognizes that, as is the case with many publicly held
corporations, the possibility of a Change in Control or a potential Change in
Control may exist and that such possibility, and the uncertainty and questions
which it may raise among management, may result in departure or distraction of
management personnel to the detriment of the Company, its stockholders and
security holders.
The Board has determined that appropriate steps should be taken to reinforce
and encourage the continued attention and dedication of certain members of the
Company"s management, including yourself, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from
the possibility of a Change of Control or a Potential Change of Control of the
Company.
In order to induce you to remain in the employ of the Company in certain
circumstances as set forth in Section 7 hereof, the Company agrees that you
shall receive the benefits set forth in this letter agreement in the event your
employment with the Company is terminated subsequent to a "Change in Control"
or "Potential Change in Control" (as defined in Sections 2 and 7 hereof) under
the circumstances below.
1. Term of Agreement. This Agreement shall commence on the date hereof
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and shall continue in effect through December 31, 2002; provided, however, that
commencing on January 1, 2003 and each January 1 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless not
later than September 30 of the preceding year, the Company shall have given
notice that it does not wish to extend this Agreement, and provided, further,
that notwithstanding any such notice by the Company not to extend, this
agreement shall continue in effect for a period
of twenty-four (24) months beyond the term provided herein if a Change in
Control shall have occurred during such term.
(b) Notwithstanding anything to the contrary stated herein, this
Agreement shall terminate prior to the dates set forth above without further
acts by either party upon termination of your employment prior to a Change in
Control or Potential Change in Control due to death or Retirement (as defined
in Section 3(a)(ii) hereof), termination of your employment by the Company for
Cause or for Disability (as respectively defined in Sections 3(a)(iii) and
3(a)(i) hereof), termination of your employment by the Company prior to a
Change in Control or Potential Change in Control for other than Cause or
Disability, termination of your employment by you for any reason prior to a
Change in Control or Potential Change in Control, or completion by the Company
of all of its obligations in the event benefits shall become payable hereunder.
2. Change in Control. No benefits shall be payable hereunder unless there
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shall have been a Change in Control, as set forth below, and your employment by
the Company shall thereafter have been terminated in accordance with Section 3
below.
(a) For purposes of this Agreement, a "Change in Control" shall be
deemed to have occurred if:
(i) any purchase of shares of the Company common stock or
securities convertible into shares of common stock shall be made pursuant to a
tender or exchange offer (other than any such tender offer or exchange made by
the Company);
(ii) any Person other than a trustee or other fiduciary of
securities held under an employee benefit plan of the Company or any of its
subsidiaries, is or becomes a Beneficial Owner, directly or indirectly, of
stock of the Company representing 20% or more of the total voting power of the
Company's then outstanding stock and securities, excluding any Person who
becomes such a Beneficial Owner in connection with a transaction described in
Clause (A) of Paragraph (iv) below;
(iii) individuals who, as of the date hereof, constitute the
Board of Directors (the "Incumbent Board") of the Company, cease for any reason
to constitute a majority thereof; provided, however, that any individual
becoming a director whose election, or nomination for election by the Company's
stockholders, was approved by a vote of at least 70% of the directors then
comprising the Incumbent Board shall be considered as though such individual
was a member of the Incumbent Board, but excluding, for this purpose, any
individual whose initial assumption of office occurs as a result of an actual
or threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board of Directors of the Company;
(iv) there is consummated a merger or consolidation of the
Company (or any direct or indirect subsidiary of the Company) with any other
corporation, other than a merger or consolidation
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which would result in the voting securities of the Company outstanding
immediately prior to such merger or consolidation continuing to represent
(either by remaining outstanding or by being converted into voting securities
of the surviving entity or any parent thereof) at least 75% of the combined
voting power of the stock and securities of the Company or such surviving
entity or any parent thereof outstanding immediately after such merger or
consolidation, or a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no Person is
or becomes the Beneficial Owner, directly or indirectly, of stock and
securities of the Company representing more than 25% of the combined voting
power of the Company's then outstanding stock and securities; or
(v) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or there is consummated an agreement
for the sale or disposition by the Company of all or substantially all of the
Company's assets other than a sale or disposition by the Company of all or
substantially all of the assets to an entity at least 75% of the combined
voting power which is owned by Persons in substantially the same proportions as
their ownership of the Company's voting stock immediately prior to such sale.
(b) For purposes of this Agreement, a "Change in Control" shall not be
deemed to have occurred if there is an acquisition of shares of the Company
common stock or securities convertible into shares of common stock by a
creditor of the Company on the Petition Date or otherwise pursuant to the Plan
of Reorganization; provided, however, that neither the creditor nor its
affiliates is engaged in the steel industry.
(c) For purposes of this Agreement, "Person" shall mean any person (as
defined in Section 3(a)(9) of the Securities Exchange Act (the "Exchange Act"),
as such term is modified in Section 13(d) and 14(d) of the Exchange Act) other
than an employee plan established by the Company, or any of its affiliates (as
defined in Rule 12b-2 promulgated under the Exchange Act), an underwriter
temporarily holding securities pursuant to an offering of such securities, or a
corporation owned, directly or indirectly, by stockholders of the Company in
substantially the same proportions as their ownership interest of the Company.
"Beneficial Owner" shall mean a beneficial owner as defined in Rule 13d-3 under
the Exchange Act.
3. Termination Following a Change in Control. You shall be entitled to
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the benefits provided under the Agreement upon your "Qualifying Termination"
(as defined herein) during the 24-month period following a Change in Control.
For purposes hereof, a "Qualifying Termination" shall mean a termination of
your employment by the Company for any reason during the 24-month period
following a Change in Control other than for Cause, Retirement or Disability,
or your termination of employment for "Good Reason" (as defined in this Section
3).
(i) Disability. If, as result of your incapacity due to physical
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or mental condition, you shall have been absent from your duties with the
Company on a full-time basis for twelve (12) consecutive months, and you shall
not have returned to the full-time performance of your duties within thirty
(30) days after written Notice of
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Termination is given to you by the Company, such termination shall, for
purposes of this Agreement, be considered to be termination by the Company for
Disability.
(ii) Retirement. Termination of your employment based upon
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"Retirement" shall mean your involuntary termination that is for Cause, or your
voluntary termination of employment that is without "Good Reason" (and not
within the 30-day period specified in Section 3(a)(iv)(L)) and in the case of
clause (I) or (II), as applicable, is in accordance with the minimum age and
service requirements for early or normal retirement under the Pension Plan, the
Excess Benefit Plan, or the Supplemental Benefits Plan of the Company or your
mandatory termination of employment upon reaching age 65 or such other age as
shall be set under applicable Company policy as in effect immediately prior to
a Change in Control.
(iii) Cause. The Company may terminate your employment for
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"Cause". For purposes of this Agreement only, the Company shall have Cause to
terminate your employment hereunder only on the basis of your fraud upon, or
misappropriation or embezzlement of assets of, the Company, or your willful and
continued failure to substantially perform your duties hereunder (other than
such failure resulting from your incapacity due to physical or mental condition
or any such actual or anticipated failure after the issuance of a Notice of
Termination, as defined in Section 3(b)); provided, however, that Cause shall
occur with respect to clause (B) of this sentence only if such action
constituting Cause has not been corrected or cured by you within thirty (30)
days after you have received written notice from the Company of the Company's
intent to terminate your employment for Cause and specifying in detail the
basis for such termination. For purposes of this paragraph, no act, or failure
to act, on your part shall be considered "willful" unless done, or omitted to
be done, by you not in good faith and without reasonable belief that your
action or omission was in the best interest of the Company. Notwithstanding
the foregoing, you shall not be deemed to have been terminated for Cause unless
and until there shall have been delivered to you a copy of a resolution duly
adopted by the affirmative vote of not less than three quarters of the entire
membership of the Board at a meeting of the Board called and held for the
purpose (after reasonable notice to you and an opportunity for you, together
with your counsel, to be heard before the Board), finding that in the good
faith opinion of the Board, you were guilty of conduct set forth in the second
sentence of this Section 3(iii) and specifying the particulars thereof in
detail.
(iv) Good Reason. You shall be entitled to terminate your
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employment for Good Reason at any time during the term of this Agreement
following a Change in Control. For purposes of this Agreement, "Good Reason"
shall exist in the event of the occurrence of any of the following, without
your express prior written consent:
(A) any diminution of, or assignment to you by the Company
of duties inconsistent with, your position, duties, responsibilities and status
with the Company immediately prior to a Change in Control, or a change in your
titles or positions as in effect immediately prior to a Change in Control, or
any removal of you
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from, or any failure to reelect you to, any of such titles or positions, except
in connection with your termination of employment for Disability, Retirement or
Cause or as a result of your death, or by you other than for Good Reason;
(B) a reduction by the Company in your base salary as in
effect on the date hereof or as the same may be increased from time to time
during the term of this Agreement, or the Company's failure to increase your
base salary (within twelve (12) months of your last increase in base salary
prior to a Change in Control or any anniversary of the date of such increase)
after a Change in Control in an amount which at least equals, on a percentage
basis, the average percentage increase in base salary for all officers of the
Company (excluding you) effected in the preceding 12 months;
(C) any failure by the Company to continue in effect any
benefit plan or arrangement or material fringe benefit (including, without
limitation, the Company's life insurance, post-retirement benefits, and
comprehensive medical plan coverage) in which you shall be participating at the
time of a Change in Control (hereinafter referred to as "Benefit Plans"), or
the taking of any action by the Company which would adversely affect your
participation in or materially reduce your benefits under any such Benefit
Plans; provided, however, the Company may, in lieu of continuing participation
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in any particular Benefit Plans, in its discretion, provide you with
substantially similar benefits or provide you with cash payments at least equal
to the value of participating in any of the Benefit Plans;
(D) any failure by the Company to continue in effect, or
continue payments under, any incentive plan or arrangement (including, without
limitation, the Company's Profit Sharing Plan or any other plans or
arrangements providing you with substantially similar benefits (hereinafter
referred to as "Incentive Plans")), in which you shall be participating at the
time of a Change in Control or the taking of any action by the Company which
would adversely affect your participation in any such Incentive Plans or reduce
your benefits under any such Incentive Plans; provided, however, the Company
may, in lieu of continuing participation in any particular Incentive Plans
provide you with substantially similar benefits or provide you with cash
payments at least equal to the value of participating in any of the Incentive
Plans;
(E) any failure by the Company to continue in effect any
plan or arrangement to receive securities of the Company (including, without
limitation, the Company's 1998 Stock Incentive Plan) or any other plan or
arrangement to receive and exercise stock options, stock appreciation rights,
restricted stock or grants thereof in which you shall be participating at the
time of a Change in Control or plans or arrangements providing you with
substantially similar benefits (hereinafter referred to as "Securities Plans")
or the taking of any action by the Company which would adversely affect your
participation in or materially reduce your benefits under any such Securities
Plans; provided, however, the Company may, in lieu of continuing participation
in any particular Securities Plans provide you with substantially similar
benefits or provide you
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with cash payments at least equal to the value of participating in any of the
Securities Plans;
(F) a relocation of your principal work location: (A)
outside the current city or metropolitan area of your principal work location
as in effect immediately prior to a Change in Control, or (B) which results in
an increase in commuting distance of more than twenty-five (25) miles from your
existing commute as in effect immediately prior to a Change in Control;
(G) a substantial increase in business travel obligations
over such obligations as they shall have existed at the time of a Change in
Control;
(H) any failure by the Company to provide you with the
number of paid vacation days to which you shall have been entitled at the time
of a Change in Control;
(I) any material breach by the Company of any provision of
this Agreement;
(J) any failure by the Company to obtain the satisfactory
agreement from any successor to assume and agree to perform this Agreement, as
contemplated by Section 8 hereof;
(K) any purported termination of your employment which shall
not be effected pursuant to a Notice of Termination satisfying the requirements
of Section 3(b), and for purposes of this Agreement, no such purported
termination shall be effective. Your right to terminate your employment
pursuant to this subsection shall not be affected by your incapacity due to
physical or mental condition; and
(L) your termination, for any reason, within the 30-day
period following the first anniversary of a Change in Control.
(b) Notice of Termination. Any purported termination by the Company
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or by you shall be communicated by written Notice of Termination to the other
party hereto in accordance with Section 9 hereof. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement upon which such notice is
based.
(c) Date of Termination: Dispute Concerning Termination. "Date of
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Termination" shall mean:
(i) if your employment shall be terminated for Disability, thirty
(30) days after a Notice of Termination shall be given (provided that you shall
not have returned to the performance of your duties on a full-time basis during
such thirty (30) day period), and
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(ii) if your employment shall be terminated by the Company for
Cause, by you for Good Reason or for any other reason, the date specified in
the Notice of Termination (which, in the case of a termination pursuant by the
Company for Cause) shall not be less than thirty (30) days, and in the case of
a termination by you for Good Reason shall not be more than sixty (60) days,
respectively, from the date such Notice of Termination shall be given);
provided, that if within thirty (30) days after any notice of Termination shall
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be given, the party receiving the such Notice of Termination shall notify the
other party that a dispute exists concerning the termination, Date of
Termination shall be the date on which the dispute shall be finally determined,
either by mutual written agreement of the parties or by binding arbitration
award referred to in Section 14; and, provided further that the Date of
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Termination shall be extended by a notice of dispute only if such notice shall
be given in good faith and the party giving such notice shall pursue the
resolution of such dispute with reasonable diligence. Notwithstanding the
pendency of any such dispute, the Company shall continue to pay you your full
compensation in effect when the notice giving rise to the dispute shall have
been given (including, but not limited to, base salary) and continue you as a
participant in all compensation, benefit and insurance plans in which you shall
have been participating when the notice giving rise to the dispute shall have
been given, until the dispute shall be finally resolved in accordance with this
Section. Amounts paid under this Section shall be in addition to all other
amounts due under this Agreement and shall not be offset against or reduce any
other amounts due under this Agreement. In addition, for purposes of
determining whether any Qualifying Termination has occurred the date a notice
is given pursuant to this Section shall be deemed the date on which your
employment is terminated.
4. Compensation Upon Termination.
(a) Salary and Other Compensation or Benefits. If your employment
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shall be terminated for any reason following a Change in Control and during the
term of this Agreement, the Company shall pay your full salary to you through
the Date of Termination at the rate in effect at the time the Notice of
Termination is given, together with all compensation and benefits to which you
are entitled through the Date of Termination under the terms of any
compensation or benefit plan, program or arrangement maintained by the Company
during such period.
(b) Disability. During any period you shall fail to perform your
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duties hereunder as a result of incapacity due to physical or mental condition,
you shall continue to receive your full base salary at the rate then in effect
and all compensation, including payments under the Profit Sharing Plan, paid
during the period, until your employment shall be terminated pursuant to
Section 3(a)(i) hereof. Thereafter, your benefits shall be determined in
accordance with the insurance and other benefit programs then applicable to
you.
(c) Cause; Voluntary Termination of Employment Without Good Reason.
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If your employment shall be terminated for Cause or you voluntarily terminate
employment without Good Reason, the Company shall pay you only your full base
salary
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through the Date of Termination at the rate in effect at the time Notice of
Termination shall be given, together with other compensation and benefits to
which you are entitled under the terms of any benefit plan, program or
arrangement maintained by the Company and applicable to you, and the Company
shall have no further obligation to you under this Agreement.
(d) Severance Pay Benefits. Subject to Section 3 hereof, if your
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employment shall be terminated in a Qualifying Termination, then you shall be
entitled to the severance pay benefits provided below:
(i) In lieu of any further salary payments to you for periods
subsequent to the Date of Termination and other severance benefits, the Company
shall pay you a lump sum severance payment, in an amount equal to one (or two
if certain objectives, established at the sole discretion of the Chairman of
the Company for the purposes of this Agreement with the approval of the
statutory creditors" committee and the pre-chapter 11 inventory lenders in the
current chapter 11 bankruptcy proceeding of the Company or otherwise approved
by the bankruptcy court, are achieved) or, if less, the number of years,
including fractional portions thereof, from the date of termination until you
reach the age of 65 years, times the sum of the higher of your annual base
salary in effect immediately prior to the occurrence of the event or
circumstance upon which the Notice of Termination is based or such salary in
effect immediately prior to the Change in Control, and the higher of the
average of the highest three (3) awards made to you pursuant to the Company's
annual incentive plan in respect of each of the five (5) measuring periods
completed immediately prior to the occurrence of the event or circumstance upon
which the Notice of Termination is based or such average in respect of such
periods completed immediately prior to the occurrence of the Change in Control;
provided, however, that if fewer than three (3) such awards have been made to
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you, the averages described in subclauses (I) and (II) of this clause (B) shall
be based solely on awards which were actually made to you, and provided
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further, that the reference to age 65 above shall be extended to a later age if
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the Company shall extend its current age-65 mandatory retirement policy for
executive employees to a later age, in which case the reference age shall be
deemed to be such later age, or you are asked by the Company to continue your
employment beyond age 65 to a specified date, in which case the reference age
shall be deemed to be the age you would attain if you, in fact, continue
employment to such date, or if no date is specified, the reference age shall be
deemed to be your age three (3) years from the Date of Termination.
(ii) Notwithstanding any provision of the Excess Benefit Plan or
the Supplemental Benefits Plan of Bethlehem Steel Corporation and Subsidiary
Companies of the Company to the contrary, the Company shall pay to you the
benefits to which you are eligible under such plans as of the date your
employment is terminated as a Lump Sum Payment (as that term is defined in such
plan). The amount of such Lump Sum Payment shall be determined using the
actuarial assumptions applicable in determining an "Actuarial Equivalent"
benefit in accordance with the provisions of paragraph 1.1(b)(i) of the Pension
Plan of Bethlehem Steel Corporation and Subsidiary Companies - Steel Division
as in effect on the date hereof.
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(iii) The Company shall also pay to you all legal fees and
expenses incurred by you as a result of such Qualifying Termination (including
all such fees and expenses, if any, incurred in contesting or disputing any
such termination or in seeking to enforce any right or benefit provided by this
Agreement). Such payments shall be made within five (5) business days after
delivery of your written request for payment accompanies with such evidence of
fees and expenses incurred as the Company may reasonably require.
(iv) The payments provided in this Section 4(d) (other than
Section 4(d)(iii)) hereof shall be made not later than the fifth (5th) day
following the Date of Termination; provided, however, that, if the amounts of
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such payments cannot be finally determined on or before such day, the Company
shall pay to you on such day an estimate, as determined in good faith by the
Company, of the remainder of such payments (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Internal Revenue Code of 1986, as
amended (the "Code")) as soon as the amount thereof can be determined to have
been due, payable in no event later than the thirtieth (30th) day after the
Date of Termination. In the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such excess shall
constitute a loan by the Company to you, payable on the fifth (5th) business
day after demand by the Company (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code). At the time that payments are made under
this Section, the Company shall provide you with a written statement setting
forth the manner in which such payments were calculated and the basis for such
calculations including, without limitation, any opinions or other advice the
Company has received from outside counsel, auditors or consultants (and any
such opinions or advice which are in writing shall be attached to the
statement).
(e) Insurance Benefits. Subject to Section 3 hereof, if your
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employment shall be terminated in a Qualifying Termination, then for the
thirty-six (36) months following such termination the Company shall maintain,
in full force and effect for your continued benefit, all life, and accident
insurance or comprehensive medical plan coverage or arrangements in which you
shall have been participating immediately prior to the Date of Termination,
provided your continued participation (or to the extent that a particular type
of coverage) shall be possible under the general terms and provisions of any
such plans and arrangements, on the same cost-sharing basis that applied to you
immediately prior to your Date of Termination. In the event your participation
(or a particular type of coverage) under any such plan or arrangement shall be
barred, the Company shall arrange to provide you with benefits, at
substantially the same after-tax cost to you, which shall be substantially
similar to those which you shall be entitled to receive under such plans and
arrangements. This Section 4(e) shall only be applicable to the extent that
you are not otherwise eligible for the benefits described as a result of your
Retirement. Benefits otherwise receivable by you pursuant to this Section 4(e)
shall be reduced to the extent comparable benefits are actually received by or
made available to you without cost during the thirty-six (36) month period
following your termination of
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employment (and any such benefits actually received by you shall be reported to
the Company by you).
(f) Death and Retirement Benefits. In the event of your death or
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Retirement, the Company shall have no further obligations to you under this
Agreement, but you shall be entitled to receive such retirement benefits under
the Company's Pension Plan, Excess Benefit Plan, or Supplements Benefits Plan,
life insurance, post-retirement benefits, comprehensive medical plan coverage,
and such other benefits as may be applicable to you.
(g) Mitigation. You shall not be required to mitigate the amount of
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any payment provided for in Sections 4(c), (d) and (e) by seeking other
employment or otherwise, nor shall the amount of any payment or benefit
provided for in this Section 4 be reduced by any compensation earned by you as
a result of employment by another employer after the Date of Termination, or
otherwise. Benefits otherwise receivable by you pursuant to Section 4(e) shall
be reduced to the extent comparable benefits shall be actually received by you
during the period benefits under Section 4(e) shall be applicable, and any such
benefits actually received by you shall be reported to the Company.
5. Excise Taxes. The following provisions shall apply with respect to any
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excise tax imposed under Section 4999 of the Code (the "Excise Tax"):
(a) Whether or not you become entitled to any of the payments
described in Section 4(d), if any of the payments or benefits received or to be
received by you in connection with a Change in Control or your termination of
employment (whether pursuant to the terms of this Agreement or any other plan,
arrangement or agreement with the Company, any person whose actions result in a
Change in Control of the Company or any person affiliated with the Company or
such person (the "Total Payments")) will be subject to Excise Tax, the Company
shall pay to you an additional amount (the "Gross- Up Payment") equal to the
amount of the Excise Tax which applies to the Total Payments, but excluding any
additional Excise Tax which may apply to the Gross-Up Payment or any income or
other taxes which may result from the Total Payments or the Gross-Up Payment.
Such payment shall be made in the manner described in Section 4(d) hereof.
(b) For purposes of determining whether any of the Total Payments will
be subject to Excise Tax and the amount of such Excise Tax, (i) any Total
Payments shall be treated as "parachute payments" (within the meaning of
Section 280G(b)(2) of the Code) unless, in the opinion of tax counsel selected
by the Company's independent auditors and reasonably acceptable to you, such
payments or benefits (in whole or in part) do not constitute parachute
payments, including by reason of Section 280G(b)(4)(A) of the Code, and all
"excess parachute payments" (within the meaning of Section 280G(b)(1) of the
Code) shall be treated as subject to the Excise Tax unless, in the opinion of
such tax counsel, such excess parachute payments (in whole or in part)
represent reasonable compensation for services actually rendered (within the
meaning of Section 280G(b)(4)(B) of the Code), or are otherwise not subject to
the Excise Tax, and
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(ii) the value of any noncash benefits or any deferred payment or benefit shall
be determined by the Company's independent auditors in accordance with the
principles of Section 280G(d)(3) of the Code. For purposes of determining the
amount of the Gross- Up Payment, you shall be deemed to pay federal income and
employment taxes at the highest marginal rate of federal income and employment
taxation in the calendar year in which the Gross-Up Payment is to be made and
state and local income and employment taxes at the highest marginal rate of
taxation in the state and locality of your residence on the Date of Termination
(or such other time as hereinafter described), net of the maximum reduction in
federal income or employment taxes which could be obtained from deduction of
such state and local taxes.
(c) In the event that the Excise Tax is subsequently determined to be
less than the amount taken into account hereunder at the time of termination of
your employment (or such other time as is hereinafter described), you shall
repay to the Company, at the time that the amount of such reduction in Excise
Tax is finally determined, the portion of the Gross-Up Payment attributable to
such reduction plus interest on the amount of such repayment at the rate
provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise
Tax is determined to exceed the amount taken into account hereunder at the time
of the termination of your employment (or such other time as is hereinafter
described) (including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), the Company shall
make an additional Gross-Up Payment in respect of such excess (plus any
interest, penalties or additions payable by you with respect to such excess) at
the time that the amount of such excess is finally determined. You and the
Company shall each reasonably cooperate with the other in connection with any
administrative or judicial proceedings concerning the existence or amount of
liability for Excise Tax with respect to the Total Payments.
6. Letter of Credit Preceding Termination/Grantor Trust. In the event a
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Potential Change in Control (as hereinafter defined) shall have occurred after
the Effective Date of the Company's Plan of Reorganization under the Bankruptcy
Code, the Company shall promptly (and in no event more than fourteen (14) days
thereafter) take one of the following actions:
(a) Letter of Credit. The Company may establish an irrevocable letter
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of credit (the "Letter of Credit") in your favor in an amount equal to the
aggregate amounts which would be payable to you pursuant to Section 4 hereof as
if you were immediately entitled to payment pursuant thereto, plus $100,000.
Such Letter of Credit to be issued by a commercial bank which shall be a
national banking association or established under the laws of one of the state
of the United States, and which shall have equity in excess of $100 million
(the "Bank").
(i) Payments under Letter of Credit. The Letter of Credit shall
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be in form and substance reasonably satisfactory to you and the Company and
shall provide that the Bank shall pay you the amount of your draft, on
presentation to the Bank of a statement, signed by you or your authorized
representative, setting forth a
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statement, in the form attached as Exhibit A hereto, that pursuant to any or
all of Section 4 of this Agreement, you are entitled to payments of not less
than the amount of such draft and have not otherwise received such payments
(the "Statement"), and the Date of Termination of your employment and by the
independent agent selected by the Company immediately upon the occurrence of a
Potential Change in Control and reasonably acceptable to you (the "Agent"),
setting forth a statement that it has reviewed the calculation of the benefits
to which you claim you are entitled and that it has confirmed the accuracy of
such calculations. With respect to the statement prepared by the Agent
pursuant to clause (ii) of the preceding sentence, the Agent shall have no duty
to inquire of the Company, or otherwise determine, whether you are entitled to
the payments which you claim, but shall merely confirm that, assuming you are
so entitled to such benefits, the calculation thereof has been accurately
performed.
(ii) Maintenance of Letter of Credit. Each time you shall draw
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on the Letter of Credit, you shall provide the Company with a copy of such
draft and the accompanying statement referred to above. The Company shall
maintain the Letter of Credit in effect for a period of two (2) years from the
date on which it shall be issued; provided, however, that if during any two (2)
month period any event shall occur which, pursuant to this Section 6, would
have required the Company to establish a Letter of Credit had none then
existed, then the Company shall maintain the Letter of Credit in effect for a
period of two (2) years following such event unless further extended pursuant
to this Section. During the period in which a Letter of Credit is required to
be maintained, the Company shall, at six-month intervals commencing with the
date the Letter of Credit shall be established, calculate the amount which
would be payable to you pursuant to Section 4 hereof as if you were immediately
entitled to payment pursuant thereto. If the amount so calculated, plus
$100,000, shall exceed the amount available to be drawn upon under the Letter
of Credit then in effect, the Company shall promptly (and in no event later
than seven (7) days thereafter) cause the amount payable under the Letter of
Credit to be increased by the amount of such excess.
(b) Grantor Trust. In lieu of obtaining a Letter of Credit, the
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Company, in its discretion, may establish a grantor trust (the "Grantor
Trust"), which shall become irrevocable upon a Change in Control, for your
benefit with a Bank and shall fund such grantor Trust with the amount otherwise
to be covered by the Letter of Credit as described in the first sentence of
paragraph 6(a). You shall be entitled to payments from the Grantor Trust upon
your presentation to the Bank of the Statement.
(c) Effect of Payments under Letter of Credit or Grantor Trust. The
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Payment by the Bank of the amount of your draft in accordance with the terms
hereof and of the Letter of Credit or from the Grantor Trust, whichever is
applicable, shall reduce any obligation of the Company to you pursuant to this
Agreement by such amount and shall not constitute a waiver by the Company of,
or in any way preclude the Company from asserting, any claim against you that
you shall not be entitled to some or all of such payment. In addition, your
drawing upon the Letter of Credit shall not constitute a waiver by you, or in
any way preclude you from asserting, any claim against the
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Company that you are entitled to amounts pursuant to this Agreement which were
not paid by amounts received under the Letter of Credit or Grantor Trust.
7. Potential Change in Control. (a) For purposes of this Agreement, a
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"Potential Change in Control" shall be deemed to have occurred if:
(i) the Company shall enter into an agreement, the consummation
of which would result in the occurrence of a Change in Control;
(ii) any person other than the Company shall publicly announce an
intention to take or to consider taking actions which if consummated would
constitute a Change in Control;
(iii) an person other than the Company or a subsidiary Company or
any employee benefit plan sponsored by the Company or any subsidiary of the
Company shall become the beneficial owner (within the meaning of Rule 13d-3
under the Exchange Act) of securities of the Company representing 10% or more
of the combined voting power of the Company's then outstanding securities
ordinarily (and apart from rights accruing under special circumstances) having
the right to vote in the election of directors as a result of a tender or
exchange offer, open market purchase, privately negotiated purchases or
otherwise, unless more than 50% of those directors of the Company who shall be
non-officer directors shall prior to, or immediately after reaching such 10%
beneficial ownership level, vote in favor of a resolution of the Board of
Directors determining, or join in a written declaration to that effect, that
such beneficial ownership will not constitute a Potential Change in Control; or
(iv) more than 50% of those directors of the Company who shall be
non-officer directors shall vote in favor of a resolution, or join in a written
declaration, to the effect that a Potential Change in Control for the purposes
of this Agreement shall have occurred.
(b) You agree that, subject to the terms and conditions of this
Agreement, in the event of a Potential Change in Control, you will at the
option of the Company remain in the employ of the Company for a period of six
(6) months from the occurrence of the first such Potential Change in Control.
8. Successors; Binding Agreement. The Company shall require any successor
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(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to all or substantially all of the business and/or assets of the Company, by
agreement in form and substance reasonably satisfactory to you, to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a breach
of this Agreement and shall entitle you to all compensation from the Company in
the same amount and on the same terms as you would be entitled hereunder if you
had terminated your employment for Good Reason, except that for
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purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be the Date of Termination. As used in this Agreement,
Company shall mean the Company as defined herein and any successor to its
business and/or assets which executes and delivers the agreement provided for
in this Section 8 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law.
(b) This Agreement shall inure to the benefit of and be enforceable by
your personal or legal representatives, executors, administrators, successors,
heirs, distributees, devisees, and legatees. If you should die while any
amount would still be payable to you hereunder if you had continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to your devisee, legatee or other designee, or
if there shall be no such designee, to your estate.
9. Notice. For the purposes of this Agreement, notices and all other
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communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, as follows:
If, to you, to:
[Name]
[Address]
[Address]
If, to the Company, to
Secretary
Bethlehem Steel Corporation
Xxxxxx Tower
0000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxxxx 00000-0000
or to such other address as either party may have furnished to the other party
in writing in accordance herewith, except that such change of address shall be
effective only upon receipt.
10. Miscellaneous. No provision of this Agreement may be modified, waived
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or discharged unless such modification, waiver or discharge is agreed to in
writing and signed by you and such officer as may be specifically designated by
the Board. No waver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or any prior or
subsequent time. No agreements or representations, oral or otherwise, express
or implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
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interpretation, construction and performance of this Agreement shall be
governed by the laws of the Commonwealth of Pennsylvania (without regard to
conflicts of law principals).
11. Confidentiality. You shall retain in confidence all confidential
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information known to you concerning the Company and its business so long as
such information shall not otherwise be publicly disclosed.
12. Validity. The invalidity or unenforceability of any provision of this
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Agreement shall not affect the validity or unenforceability of any other
provisions of this Agreement, which shall remain in full force and effect.
13. Counterparts. This Agreement may be executed in several counterparts,
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each of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
14. Arbitration. Any dispute or controversy arising under this Agreement
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shall be settled exclusively by arbitration in [Bethlehem, Pennsylvania] in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator"s award in any court having
jurisdiction, provided, however, that you shall be entitled to seek specific
performance of your right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in connection with this
Agreement. No such arbitration proceedings shall be commenced or conducted
until at least 60 days after the parties hereby agree to endeavor in good faith
to resolve any dispute by mutual agreement. If mutual agreement cannot be
attained, any disputing party, by written notice to the other ("Arbitration
Notice") may commence arbitration proceedings. Such arbitration proceedings
shall be conducted before a panel of three arbitrators, one appointed by each
party within thirty (30) days after the date of the Arbitration Notice, and one
chosen within sixty (60) days after the date of the Arbitration Notice by the
two arbitrators appointed by the disputing parties. Any Bethlehem,
Pennsylvania court of competent jurisdiction shall appoint any arbitrator that
has not been appointed within such time periods. Judgment may include costs
and attorneys fees and may be entered in any court of competent jurisdiction.
15. No Guaranty of Employment. Neither this contract nor any action taken
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hereunder shall be construed as giving you a right to be retained as an
employee of the Company. The Company shall be entitled to terminate your
employment at any time, subject to providing the severance benefits herein
specified in accordance with the terms hereof.
16. Entire Agreement. This Agreement sets forth the entire agreement
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between the parties hereto with respect to the subject matter hereof, and
supersedes all other agreements and understandings, written or oral, between
the parties hereto with respect to the subject matter hereof.
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If this letter correctly sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on this subject.
Sincerely,
BETHLEHEM STEEL CORPORATION
By
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X. X. Xxxxxx
AGREED:
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L/Chapter 11 - Modified Tier I CIC
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