KEY EXECUTIVE SEVERANCE AGREEMENT
This Key Executive Severance Agreement (the "Agreement") is entered
into this 10th day of July, 1990, by and between Blessings Corporation (the
"Company") and Xxxxx X. Xxxx ("Key Executive").
WITNESSETH: WHEREAS, the Board of Directors of the Company (the
"Board") considers it essential to the best interests of the shareholders of
Company to xxxxxx the continued employment of the Key Executive and in this
connection the Board recognizes that the possibility of a change in control
exists and that such possibility and the uncertainty and questions which it
necessarily raises may result in the departure or distraction of Key Executive
to the detriment of the Company and its shareholders in this period when Key
Executive's undivided attention and commitment to the best interests of the
Company and its shareholders is particularly important; and
WHEREAS, the Board has determined that it is essential and in the
best interests of the Company and its shareholders to retain the services of
Key Executive in the event of a possibility of a change in control and to
insure Key Executive's continued dedication and efforts in such event without
undue concern on the part of Key Executive for his personal financial and
employment security.
NOW, THEREFORE, in order to fulfill the above purposes and in
consideration of the engagements to be performed by each of the parties hereto
it is agreed as follows:
KEY EXECUTIVE SEVERANCE AGREEMENT Page -1-
ARTICLE ONE
Definitions
As used in this Agreement, the following words and phrases shall have the
following respective meanings unless the context clearly indicates otherwise.
1.1 Agreement. This Key Executive Severance Agreement.
1.2 Company. Blessings Corporation.
1.1 Board. The Board of Directors of Blessings Corporation.
1.4 W-D. Xxxxxxxxxx-Xxxxxx Manufacturing Company, any of its wholly owned
subsidiaries, any shareholders of Xxxxxxxxxx-Xxxxxx Manufacturing Company or any
Trust established by any shareholder of Xxxxxxxxxx-Xxxxxx Manufacturing Company.
1.5 Key Executive. Xxxxx X. Xxxx.
1.6 Total Compensation. The amount Key Executive is entitled to receive
as wages or salary plus amounts which the Key Executive is entitled to receive
under the Annual Incentive Compensation Plan on an annualized basis.
1.7 Cause. The Company may terminate the Key Executive's employment for
"Cause." A termination for Cause is a termination evidenced by a resolution
adopted in good faith by the Board that the Key Executive (a) willfully and
continually failed to substantially perform his duties with the Company (other
than a failure resulting from the Key Executive's incapacity due to physical or
mental illness) which failure
KEY EXECUTIVE SEVERANCE AGREEMENT Page -2-
continued for a period of at least thirty (30) days after a written notice of
demand for substantial performance has been delivered to the Key Executive
specifying the manner in which the Key Executive has failed to substantially
perform, or (b) willfully engaged in conduct which is demonstrably and
materially injurious to the Company, monetarily or otherwise, or (c) is found to
be grossly incompetent in the performance of his duties for the Company;
provided, however, that no termination of the Key Executive's employment shall
be for Cause as set forth in clause (a), (b), or (c) above until (i) there shall
have been delivered to the Key Executive a copy of a written notice setting
forth that the Key Executive was guilty of the conduct set forth in clause (a),
(b), or (c) and specifying the particulars thereof in detail, and (ii) the Key
Executive shall have been provided an opportunity to be heard by the Board (with
the assistance of the Key Executive's counsel if the Key Executive so desires).
No act, nor failure to act, on the Key Executive's part, shall be considered
"willful," unless he has acted or failed to act, with an absence of good faith
and without a reasonable belief that his action or failure to act was in the
best interest of the Company. Notwithstanding anything contained in this
Agreement to the contrary, no failure to perform by the Key Executive after
Notice of Termination is given to the Key Executive shall constitute Cause.
KEY EXECUTIVE SEVERANCE AGREEMENT Page -3-
1.8 Change in Control. A "Change in Control" shall be deemed to occur:
(a) If W-D becomes the "beneficial owner" (as defined in Rule
13d-3 of the Exchange Act), directly or indirectly, of securities of the
Company representing less than fifty and one-one hundredth percent (50.01%) of
the combined voting power of the Company's then outstanding securities; or
(b) upon the approval by the Company's shareholders of a sale
or disposition of all or substantially all of the Company's assets or a plan
of liquidation or dissolution of the Company.
1.9 Good Reason. "Good Reason" shall mean the occurrence of any of the
following events or conditions: (a) a change in the Key Executive's status,
title, position or responsibilities (including reporting responsibilities)
which, in the Key Executive's reasonable judgment, represents a substantial
reduction of the status, title, position or responsibilities as in effect
immediately prior thereto; the assignment to the Key Executive of any duties or
responsibilities which, in the Key Executive's reasonable judgment, are
inconsistent with such status, title, position or responsibilities; or any
removal of the Key Executive from or failure to re-appoint or reelect him to any
of such positions, except in connection with the termination of his employment
for Cause, Permanent Disability, as a result of his death, or by the Key
Executive other than for Good Reason; or
KEY EXECUTIVE SEVERANCE AGREEMENT Page -4-
(b) a reduction in the Key Executive's annual base salary or a
change in the formula used in computing entitlements under his Annual
Incentive Compensation Plan; or
(c) the failure by the Company to (i) continue in effect any
material benefit plan in which the Key Executive was participating at the time
of the Change in Control, including but not limited to the Supplemental
Executive Retirement Plan, and the Company Pension Plan, or (ii) provide the
Key Executive with compensation and benefits at least equal (in terms of
benefit levels and/or reward opportunities) to those provided for under each
employee benefit plan, program and practice as in effect immediately prior to
the Change in Control; provided, however, that the termination of this
Agreement by the Company or any successor, as defined in Article Five, under
the provisions of Section 2.2 shall not constitute "Good Reason" under this
Section 1.9;
(d) any material breach by the Company of any provision of this Agreement;
or
(e) relocation of the Company headquarters at a location which is outside
a radius of sixty (60) miles from the present Company headquarters at
000 Xxxxxxxxxxxx Xxxx, Xxxxxxx Xxxxxx, Xxx Xxxxxx.
1.10 Notice of Termination. "Notice of Termination" shall mean a notice
which indicates the specific provisions in this Agreement relied upon as the
basis for any termination
KEY EXECUTIVE SEVERANCE AGREEMENT Page -5-
of employment and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Key
Executive's employment under the provision so indicated. No purported
termination of employment shall be effective without such Notice of
Termination.
1.11 Permanent Disability. A Key Executive shall be deemed to have
become permanently disabled for purposes of this Agreement if the Board of the
Company finds, upon the basis of medical evidence satisfactory to it, that the
Key Executive is totally disabled, whether due to physical or mental
condition, so as to be prevented from engaging in further employment by the
Company and that such disability will be permanent and continuous during the
remainder of his life.
1.12 Severance Benefits. The benefits payable in accordance with Article
Three of this Agreement.
ARTICLE TWO
Term
2.1 Term of Agreement. This Agreement shall commence on July 10, 1990,
and shall continue in effect through November 11, 2007.
2.2 Termination of Agreement. The Company may in its sole discretion
terminate this Agreement at any time subsequent to its effective date upon
written notice to Key Executive. In such event this Agreement shall terminate
three (3) years from
KEY EXECUTIVE SEVERANCE AGREEMENT Page -6-
the date of receipt by Key Executive of notice of termination by the
Company; subject, however, to the provisions of 2.3 below.
2.3 Automatic Termination. If not terminated earlier in accordance with the
provisions of Section 2.2 above, this Agreement shall, in any event,
automatically terminate on November 11, 2007; at which time Key Executive will
have reached age 65.
2.4 Continuance for Payment of Severance Benefits.
Notwithstanding any notice by the Company to terminate this Agreement, if Key
Executive becomes entitled to Severance Benefits as hereinafter set out in
Article Three during the term of this Agreement, Key Executive shall
nevertheless be entitled to receive all payments, if any, required to be made by
the Company or otherwise to Key Executive under this Agreement.
ARTICLE THREE
Severance Benefits
3.1 Right to Severance Benefits. Key Executive shall be entitled to
receive from the Company a Severance Benefit in the amount provided in Section
3.2 if (a) this Agreement has not previously expired under the provisions
contained in Section 2. above, and (b) a Change in Control has occurred, and
(c) thereafter, the Key Executive's employment with the Company terminates for
any reason, except that notwithstanding
KEY EXECUTIVE SEVERANCE AGREEMENT Page -7-
the foregoing provisions, no benefits under this Agreement will be payable
should the Key Executive's termination of employment be (i) for Cause, (ii) by
reason of Permanent Disability, (iii) by reason of the Key Executive's death,
(iv) by reason of Key Executive's resignation for other than Good Reason, or
(v) by reason of Key Executive's voluntary retirement for other than Good
Reason.
3 . 2 Amount of Severance Benefits. If Key Executive's employment is
terminated in circumstances entitling him to a Severance Benefit as provided in
Section 3.1, then Key Executive shall be entitled to the following benefits:
(a) The Company shall pay to the Key Executive, as severance
pay and in lieu of any further salary for periods subsequent to the
termination date (as specified in Section 4.2), an amount equal to the present
value of the total amounts of money that would have been paid to Key Executive
during the period beginning on the Termination Date and ending on a date three
years subsequent to the Termination Date had Key Executive's employment not
been terminated. For purposes of this subparagraph (a), the total amounts of
money that would have been paid to Key Executive during such period shall be
based on an annual rate calculated as follows:
(i) If the Termination Date is before November 12, 2004, on an annual
basis equal to Key Executive's average annual Total Compensation for
the five fiscal years of the Company preceding the fiscal year in which
the Termination Date occurs; or
(ii) If the Termination Date is on or after November 12, 2004, on an annual
basis equal to Key
KEY EXECUTIVE SEVERANCE AGREEMENT Page -8-
Executive's average annual Total Compensation for the two fiscal years
of the Company preceding the fiscal year in which the Termination Date
occurs.
The annualized rate determined in (i) or (ii) whichever is
applicable, shall be applied to a period which is the lesser of three years from
the Termination Date or the entire period between the Termination Date and
November 11, 2007, and shall be prorated for any fractional year.
The present value of the foregoing amount shall be determined by
using a discount rate equal to l00 percent of the applicable federal rate (as
defined in Section 1274(d) of the Internal Revenue Code), as of the Termination
Date, and shall be based on the assumption that the Total Compensation for the
period in question would be received by Key Executive on a monthly basis. Any
payment made under this subparagraph (a) shall be subject to the limitation set
forth in paragraph 3.3 below and shall be payable in a lump sum within thirty
(30) days of the Termination Date.
(b) for a period of two (2) years subsequent to the Key
Executive's termination of employment, the Company shall at its expense continue
on behalf of the Key Executive and his dependents and beneficiaries, the life
insurance, disability, medical, dental and hospitalization benefits which were
being provided to the Key Executive at the time of termination of employment.
The benefits provided in this Subsection 3.2(b) shall be no less favorable to
the Key Executive in terms of
KEY EXECUTIVE SEVERANCE AGREEMENT Page -9-
amounts and deductibles and costs to him, than the coverage provided the
Key Executive under the plans providing such benefits at the time Notice of
Termination is given. The Company's obligation hereunder with respect to the
foregoing benefits shall be limited to the extent that the Key Executive obtains
any such benefits pursuant to a subsequent employer's benefit plans, in which
case the Company may deduct the coverage of any benefits it is required to
provide the Key Executive hereunder as long as the aggregate coverage of the
combined benefit plans is no less favorable to the Key Executive in terms of
amounts and deductibles and costs to him, than the coverage required to be
provided hereunder. This subsection 3.2(b) shall not be interpreted so as to
limit any benefits to which the Key Executive or his dependents may be entitled
under any of the Company's employee benefit plans, programs or practices
following the Key Executive's termination of employment. The provision of
continued benefits to the Key Executive under this subsection (b) shall not
deprive the Key Executive of any independent statutory right to continue
benefits coverage pursuant to Sections 601 through 606 of the Employee
Retirement Income Security Act of 1974, as amended ("ERISA");
(c) the Company shall obtain and transfer to the Key Executive
all right, title and ownership in any automobile then being provided by the
Company for use by the Key Executive.
KEY EXECUTIVE SEVERANCE AGREEMENT Page -10-
(d) the Key Executive shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or
otherwise and no such payment shall be offset or reduced by the amount of any
compensation or benefits provided to the Key Executive in any subsequent
employment.
3.3 Limitation on Severance Benefits. As it is the intention of the
parties that the Company's payments under this Agreement to or for the benefit
of the Key Executive shall not constitute "parachute payments" within the
meaning of Section 280G of the Internal Revenue Code, in no event shall the
present value of the benefits provided for in Section 3.2 (a) and (c) (and, to
the extent that they may be the type of payment that is to be taken into
consideration in determining the amount of parachute payments, the benefits
provided by Section 3.2(b)) exceed 2.99 times the Base Amount. The Base Amount
and the present value of the benefits shall be determined in accordance with
Section 280G of the Internal Revenue Code of 1986 and the regulations
promulgated thereunder.
ARTICLE FOUR
Termination of Employment
4.1 Written Notice Required. Any purported termination of employment,
either by the Company or by the Key Executive, shall be communicated by written
Notice of Termination to the other.
KEY EXECUTIVE SEVERANCE AGREEMENT Page -1l-
4.2 Termination Date. In the case of the Key Executive's death, the Key
Executive's Termination Date shall be his date of death. In all other cases,
the Key Executive's Termination Date shall be the date specified in the Notice
of Termination subject to the following:
(a) if the Key Executive's employment is terminated by the Employer for
Cause or due to Permanent Disability, the date specified in the Notice of
Termination shall be at least thirty (30) days from the date the Notice of
Termination is given to the Key Executive, provided that in the case of
Disability the Key Executive shall not have returned to the full-time
performance of his duties during such period of at least thirty (30) days; and
(b) if the Key Executive terminates his employment for Good Reason, the
date specified in the Notice of Termination shall not be more than sixty (60)
days from the date the Notice of Termination is given to the Company.
ARTICLE FIVE
Successors to Corporation
This Agreement shall bind 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 Company, in the same manner and to the same
extent that the Company would be obligated under this Agreement if no
succession had taken place. Any such successor shall be entitled to
KEY EXECUTIVE SEVERANCE AGREEMENT Page -12-
exercise all of the rights of the Company under this Agreement including, but
not limited to, the right of the Company to terminate this Agreement pursuant
to the provisions of Section 2.2 above. In the case of any transaction in
which a successor would not by the foregoing provision or by operation of law
be bound by this Agreement the Company shall require such successor expressly
and unconditionally to assume and agree to perform the Company's obligations
under this Agreement in the same manner and to the same extent that the
Company would be required to perform if no such succession had taken place.
ARTICLE SIX
Miscellaneous
6.1 Amendment. Any Amendment to this Agreement shall be a signed written
instrument signed by both parties to this Agreement.
6.2 Indemnification. If the Key Executive institutes any legal action in
seeking to obtain or enforce, or is required to defend in any legal action,
the validity or enforceability of any right or benefit provided by this
Agreement and Key Executive is the prevailing party in any such legal action,
the Company will pay all actual legal fees and expenses incurred by the Key
Executive.
KEY EXECUTIVE SEVERANCE AGREEMENT Page -13-
6.3 Employment Status. This Agreement does not constitute a contract of
employment or impose on the Company any obligation to retain the Key Executive
as an employee, to change the status of the Key Executive's employment or to
change any employment policies of the Company.
6.4 Validity and Severability. - 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, and any prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
6.5 Governing Law. The validity, interpretation, construction and
performance of this Agreement shall in all respects be governed by the laws of
the State of Delaware.
6.6 Choice of Forum. The Key Executive shall be entitled to enforce the
provisions of this Agreement or to assert any claim for benefits under the
terms of this Agreement in any state or federal court of competent
jurisdiction located in the State of Delaware.
KEY EXECUTIVE SEVERANCE AGREEMENT Page -14-
BLESSINGS CORPORATION
By: /s/ Xxxx X. Xxxxxx
XXXX X. XXXXXX
President and
Chief Operating Officer
XXXXX X. XXXX-KEY EXECUTIVE
/s/ Xxxxx X. Xxxx
KEY EXECUTIVE SEVERANCE AGREEMENT Page -15-
Blessings Corporation
XXXX X. XXXXXXXX
Chairman of the Board
AMENDMENT TO THE KEY EXECUTIVE SEVERANCE AGREEMENT
The KEY EXECUTIVE SEVERANCE AGREEMENT, (the "Agreement"),
entered into on July 10, 1990, by and between BLESSINGS CORPORATION,
(the "Company"), and XXXXX X. XXXX, (the "Key Executive"), is hereby
amended as follows:
1. Par. 1.9 (e) is hereby deleted and the following language shall be
deemed inserted in its place:
(e) relocation of the Company headquarters at a
location which is outside a radius of sixty
(60) miles from the present Company
headquarters at 000 Xxxxxxxxxx Xxxxx, Xxxxxxx
Xxxx, Xxxxxxxx.
2. In all other respects, the Agreement of the parties is hereby
reaffirmed.
Dated: April 18,1995
BLESSINGS CORPORATION
By: /s/ Xxxx X. XxXxxxxx
XXXX X. XxXXXXXX, Chairman
/s/ Xxxxx X. Luke_____________
XXXXX X. XXXX
Executive Vice-President
Key Executive
KEY EXECUTIVE SEVERANCE AGREEMENT STOCK SUPPLEMENT
This Key Executive Severance Agreement Stock Supplement (the
"Supplement") is entered into on this 10th day of July, 1990 by and between
Blessings Corporation (the "Company") and Xxxxx X. Xxxx (the "Key Executive").
WITNESSETH: WHEREAS, the Board of Directors of the Company (the
"Board") has heretofore authorized the execution of a Key Executive Severance
Agreement between the Company and the Key Executive under the terms of which
the Key Executive under certain operative circumstances may become entitled to
severance benefits; and
WHEREAS, in the event that Key Executive becomes entitled to
severance benefits under the provisions of the Severance Agreement by reason
of the termination of Key Executive's employment prior to his attaining the
age of 65 years Company desires to the extent possible to minimize Key
Executive's loss of benefits under other Company plans; and
WHEREAS, Key Executive's termination of employment prior to
attaining the age of 65 years could result in the forfeiture of his rights to
nonvested shares of stock awarded to him pursuant to Annual Incentive Plans
heretofore adopted by Company; and
WHEREAS, it is agreed and understood by the parties to this
Supplement Agreement that the supplement provided for hereunder shall only be
payable under circumstances which would
Key Executive Severance Agreement Stock Supplement Page 1
cause the Severance Agreement to become operative and severance benefits to be
paid to Key Executive and that the supplement called for in this Agreement
shall not be payable under any other circumstances under which Key Executive's
employment might be terminated prior to his attaining the age of 65 years.
NOW, THEREFORE, in order to fulfill the above purposes and in
consideration of the engagements to be performed by each of the parties
hereto, it is agreed as follows:
ARTICLE ONE
Term
1.1 Term of Agreement. This Agreement shall commence on July 10, 1990,
and shall continue in effect through November 11, 2007.
1.2 Termination of Agreement. The Company may in its sole discretion
terminate this Agreement at any time subsequent to its effective date upon
written notice to Key Executive. In such event this Agreement shall terminate
three (3) years from the date of receipt by Key Executive of notice of
termination by the Company; subject, however, to the provisions of 1.3 below.
1.3 Automatic Termination. If not terminated earlier in accordance with
the provisions of Section 1.2 above, this Agreement shall, in any event,
automatically terminate on November 11, 2007; at which time Key Executive will
have reached age 65.
Key Executive Severance Agreement Stock supplement Page 2
1.4 Continuance for Payment of Severance Benefits.
Notwithstanding any notice by the Company to terminate this Agreement, if Key
Executive becomes entitled to Severance Benefits as hereinafter set out in
Article Three during the term of this Agreement, Key Executive shall
nevertheless be entitled to receive all payments, if any, required to be made by
the Company or otherwise to Key Executive under this Agreement.
ARTICLE TWO
Accelerated vesting of Stock
In the event that Key Executive becomes entitled to severance
benefits by reason of the termination of his employment under the terms and
conditions of that certain Key Executive Severance Agreement dated July 10,
1990, between Key Executive and Company, (the "Severance Agreement") then and in
such event, Key Executive shall be entitled to receive any shares of stock
awarded to him, but not yet vested and delivered, pursuant to any and all Annual
Incentive Plans heretofore or hereafter adopted by Company and under which Key
Executive is a Participant; provided, however, that this award of stock shall be
subject to the overall limit contained in Section 2.3 of the Key Executive
Severance Agreement Pension and SERP Supplement, dated July 10, 1990 and entered
into by Key Executive and the Company.
Key Executive Severance Agreement Stock supplement Page 3
ARTICLE THREE
Successors to Corporation
This Agreement shall bind 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 Company in the same
manner and to the same extent that the Company would be obligated under this
Agreement if no succession had taken place. In the case of any transaction in
which a successor would not by the foregoing provision or by operation of law be
bound by this Agreement the Company shall require such successor expressly and
unconditionally to assume and agree to perform the Company's obligations under
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no such succession had taken place.
ARTICLE FOUR
Miscellaneous
4.1 Amendment. Any Amendment to this Agreement shall be a signed written
instrument signed by both parties to this Agreement.
4.2 Indemnification. If the Key Executive institutes any legal action in
seeking to obtain or enforce, or is required to defend in any legal action, the
validity or enforceability of any right or benefit provided by this Agreement
and Key Executive is
Key Executive Severance Agreement Stock Supplement Page 4
the prevailing party in any such legal action, the Company will pay all actual
legal fees and expenses incurred by the Key Executive.
4.3 Employment Status. This Agreement does not constitute a contract of
employment or impose on the Company any obligation to retain the Key Executive
as an employee, to change the status of the Key Executive's employment or to
change any employment policies of the Company. 4.4 Validity and Severability.
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, and any prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction. 4.5 Governing Law. The
validity, interpretation, construction and performance of this Agreement shall
in all respects be governed by the laws of the State of Delaware. 4.6 Choice
of Forum. The Key Executive shall be entitled to enforce the provisions of
this Agreement or to assert any claim for benefits under the terms of this
Agreement in any state or federal court of competent jurisdiction located in
the State of Delaware.
Key Executive Severance Agreement Stock Supplement Page 5
BLESSINGS CORPORATION
By /s/ XXXX X. XXXXXX
XXXX X. XXXXXX
President and
Chief Operating Officer
XXXXX X. XXXX-KEY EXECUTIVE
/s/ XXXXX X. XXXX
Key Executive Severance Agreement Stock Supplement- Page 6
KEY EXECUTIVE SEVERANCE AGREEMENT
PENSION AND SERP SUPPLEMENT
This Key Executive Severance Agreement Pension and SERP
Supplement (the "Supplement") is entered into on this 10th day of July, 1990 by
and between Blessings Corporation (the "Company") and Xxxxx X. Xxxx (the "Key
Executive").
WITNESSETH: WHEREAS, the Board of Directors of the Company (the
"Board") has heretofore authorized the execution of a Key Executive Severance
Agreement between the Company and the Key Executive under the terms of which the
Key Executive under certain operative circumstances may become entitled to
severance benefits; and
WHEREAS, in the event that Key Executive becomes entitled to
severance benefits under the provisions of the Severance Agreement by reason of
the termination of Key Executive's employment prior to his attaining the age of
65 years Company desires to the extent possible to minimize Key Executive's loss
of benefits under other Company plans; and
WHEREAS, Key Executive's termination of employment prior to
attaining the age of 65 years and the receipt of severance benefits under the
Severance Agreement would result in a reduction of Key Executive's pension and
SERP payments under the provisions of those plans because of reductions
resulting from early retirement provisions; and
Key Executive Severance Agreement
Pension and SERP Supplement Page 1
WHEREAS, it is agreed and understood by the parties to this Supplement Agreement
that the supplement provided for hereunder shall only be payable under
circumstances which would cause the Severance Agreement to become operative
and severance benefits to be paid to Key Executive and that the supplement
called for in this Agreement shall not be payable under any other
circumstances under which Key Executive's employment might be terminated prior
to his attaining the age of 65 years.
NOW, THEREFORE, in order to fulfill the above purposes and in
consideration of the engagements to be performed by each of the parties
hereto, it is agreed as follows:
ARTICLE ONE
Term
1.1 Term of Agreement. This Agreement shall commence on July 10, 1990,
and shall continue in effect through November 11, 2007.
1.2 Termination of Agreement. The Company may in its sole discretion
terminate this Agreement at any time subsequent to its effective date upon
written notice to Key Executive. In such event this Agreement shall terminate
three (3) years from the date of receipt by Key Executive of notice of
termination by the Company; subject, however, to the provisions of 1.3 below.
1.3 Automatic Termination. If not terminated earlier in accordance with the
provisions of Section 1.2 above, this
Key Executive Severance Agreement
Pension and SERP Supplement Page 2
Agreement shall, in any event, automatically terminate on November 11, 2007; at
which time Key Executive will have reached age 65.
1.4 Continuance for Payment of Severance Benefits.
Notwithstanding any notice by the Company to terminate this Agreement, if Key
Executive becomes entitled to Severance Benefits as hereinafter set out in
Article Three during the term of this Agreement, Key Executive shall
nevertheless be entitled to receive all payments, if any, required to be made by
the Company or otherwise to Key Executive under this Agreement.
ARTICLE TWO
Supplemental Payments
2.1 Right to Supplemental Payments. In the event that Key Executive becomes
entitled to severance benefits by reason of the termination of his employment
under the terms and conditions of that certain Key Executive Severance Agreement
dated July 10, 1990, between Key Executive and Company, (the "Severance
Agreement") then and in such event, Key Executive shall be entitled to
supplemental payments from the Company as hereinafter provided. 2.2 Amount of
Supplemental Payments. The total amount of the supplemental payments to be made
to Key Executive shall be the difference between (a) the present value of Key
Executive's pension and SERP benefits under the existing Company plans as
Key Executive Severance Agreement
Pension and SERP Supplement Page 3
amended calculated as if Key Executive had retired upon attaining the age of 65
years, and (b) the present value of Key Executive's actual pension and SERP
benefits under the existing Company plans as amended.
The Present value of each of the foregoing amounts shall be
determined as of the date of Key Executive's termination of employment using a
discount rate (as of the termination of Key Executive's employment) equal to
100 percent of the applicable federal rate as defined in Section 1274(d) of
the Internal Revenue Code. The amount payable hereunder shall be subject to
the limitation set forth in paragraph 2.3 and shall be payable in a lump sum
within thirty (30) days of the termination of Key Executive's employment. 2.3
Limitation of Benefits. It is the intent of the parties that the Company's
payments to or for the benefit of the Key Executive under this Agreement, the
Severance Agreement, or any other agreement between the Company and the Key
Executive shall not constitute "parachute payments" within the meaning of
Section 280G of the Internal Revenue Code. Accordingly, and notwithstanding
any other provision of this Agreement or of the Severance Agreement, it is
agreed that in no event shall the present value of all Contract Benefits
exceed 2.99 times the Base Amount. For purposes of this Section 2.3:
(a) Present value shall be determined under Section 280G of
the Internal Revenue Code and the regulations thereunder, using the discount
rate described in Section 280G(d)(4).
Key Executive Severance Agreement
Pension and SERP Supplement Page 4
(b) The term -"Contract Benefits" means the sum of (i) all
payments to or for the benefit of Key Executive under this Agreement, (ii) all
payments to or for the benefit of Key Executive under the Severance Agreement,
and (iii) all other payments to or for the benefit of Key Executive under any
other agreement to which Key Executive and the Company are parties, to the
extent that such other payments would constitute parachute payments under
Section 280G of the Internal Revenue Code and the regulations thereunder.
(c) The Base Amount shall be determined under Section 280G of
the Internal Revenue Code and the regulations thereunder.
In the event the present value of all Contract Benefits
exceeds 2.99 times the Base Amount, the aggregate amounts payable under this
Agreement and under the Severance Agreement shall be reduced by the amount of
such excess.
ARTICLE THREE
Successors to Corporation
This Agreement shall bind 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 Company, in the same
manner and to the same extent that the Company would be obligated under this
Agreement if no succession had taken place. In the case of any transaction in
which a
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successor would not by the foregoing provision or by operation of law be bound
by this Agreement the Company shall require such successor expressly and
unconditionally to assume and agree to perform the Company's obligations under
this Agreement in the same manner and to the same extent that the Company would
be required to perform if no such succession had taken place.
ARTICLE FOUR
Miscellaneous
4.1 Amendment. Any Amendment to this Agreement shall be a signed written
instrument signed by both parties to this Agreement. 4.2 Indemnification. If the
Key Executive institutes any legal action in seeking to obtain or enforce, or is
required to defend in any legal action, the validity or enforceability of any
right or benefit provided by this Agreement and Key Executive is the prevailing
party in any such legal action, the Company will pay all actual legal fees and
expenses incurred by the Key Executive. 4.3 Employment Status. This Agreement
does not constitute a contract of employment or impose on the Company any
obligation to retain the Key Executive as an employee, to change the status of
the Key Executive's employment or to change any employment policies of the
Company.
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4.4 Validity and Severability. The invalidity or unenforceability or 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, and any prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction. 4.5
Governing Law. The validity, interpretation, construction and performance of
this Agreement shall in all respects be governed by the laws of the State of
Delaware. 4.6 Choice of Forum. The Key Executive shall be entitled to enforce
the provisions of this Agreement or to assert any claim for benefits under the
terms of this Agreement in any state or federal court of competent jurisdiction
located in the State of Delaware.
BLESSINGS CORPORATION
By /s/ XXXX X. XXXXXX
XXXX X. XXXXXX
President and Chief Operating officer
XXXXX X. XXXX-KEY EXECUTIVE
/s/ XXXXX X. XXXX
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