CHANGE-IN-CONTROL/SEVERANCE AGREEMENT
AGREEMENT, dated as of , 1996, by and between PSC Inc., a New York
corporation (the "Company") and the undersigned, an officer of the Company (the
"Executive").
WHEREAS, in order to enhance Executive's continued service to the
Company in an effective manner without distraction by reason of the possibility
of a termination of employment by the Company or a change in control of the
Company and in order to assure both the Company and the Executive of continuity
of management in the event of any actual or threatened change in control of the
Company, the Company wishes to provide in this agreement for severance benefits
to the Executive in the event of a termination of employment by the Company or a
change in control of the Company.
NOW, THEREFORE, in consideration of the premises and of Executive
agreeing to continue to serve as an employee of the Company, the parties hereto
agree as follows:
1. Severance Payment.
(a) Termination of Employment - In General. In the event of
the termination of employment of Executive by the Company for any reason other
than Termination for Cause (as hereinafter defined), death, disability, or a
Change in Control (as hereinafter defined), the Company will continue to pay the
Executive for a period of one year following such termination an amount equal to
the Executive's salary at the annual rate then in effect. Such amount shall be
payable bi-weekly. In addition, the Company will provide Executive with
Executive's then current health, dental, life and accidental death and
dismemberment insurance benefits for a period of one year following such
termination. In the event of Executive's death while receiving severance
payments hreunder, all remaining severance installment payments otherwise
payable to Executive hereunder will be paid in the same amounts and in the same
manner to Executive's heirs and legal representatives. All payments made to
Executive hereunder will be subject to all applicable employment and withholding
taxes.
(b) Termination of Employment - Change in Control. In the
event of the termination of employment of Executive within the two year period
following a Change in Control (as hereinafter defined) of the Company, and such
termination is (i) by the Company for any reason other than Termination for
Cause (as hereinafter defined), death or disability, or (ii) by the Executive
for "Good Reason" (as hereinafter defined), the Company will pay the Executive
in a lump sum cash payment an amount equal to the product of the sum of (x)
Executive's salary at the annual rate then in effect and (y) the highest annual
bonus paid to Executive under the Company's current Management Incentive Plan or
any successor plan in the three full fiscal years preceding termination
multiplied by two. In addition, Executive will be immediately vested in any
retirement, incentive, or option plans then in effect and the Company will
continue to provide Executive with Executive's then current health, dental, life
and accidental death and dismemberment insurance benefits for a period of three
years. All payments made to Executive hereunder will be subject to all
applicable employment and withholding taxes.
2. Limitations. Notwithstanding anything in this Agreement to the
contrary, the maximum amount of cash and other benefits payable (whether on a
current or deferred basis and whether or not includible in income for income tax
purposes) under Section 1 of this Agreement (the "Severance Benefits") shall be
limited to the extent necessary to avoid causing any portion of such Severance
Benefits, or any other payment in the nature of compensation to the Executive,
to be treated as a "parachute payment" within the meaning of Section 280G(b)(2)
of the Internal Revenue Code of 1986, as amended. Any adjustment required to
satisfy the limitation described in the preceding sentence shall be accomplished
first by reducing any cash payments that would otherwise be made to the
Executive and then, if further reductions are necessary, by adjusting other
benefits as determined by the Company.
3. Certain Definitions.
(a) Change in Control. A "Change in Control" shall be deemed
to have occurred (i) on the date that any person or group deemed a person under
Sections 3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934, other than
the Company, in a transaction or series of transactions, has become the
beneficial owner, directly or indirectly (with beneficial ownership as
determined as provided in Rule 13d-3, or any successor rule under such Act), of
30% or more of the outstanding voting securities of the Company; or (ii) on the
date on which one third or more of the members of the Board of Directors shall
consist of persons other than Current Directors (for these purposes, as "Current
Director" shall mean any member of the Board of Directors elected at or
continuing in office after, the 1996 Annual Meeting of Shareholders, any
successor of a Current Director who has been approved by a majority of the
Current Directors then on the Board, and any other person who has been approved
by a majority of the Current Directors then on the Board); or (iii) on the date
of approval of (x) the merger or consolidation of the Company with another
corporation where the shareholders of the Company, immediately prior to the
merger or consolidation, would not beneficially own, immediately after the
merger or consolidation, shares entitling such shareholders to 50% or more of
all votes (without consideration of the rights of any class of stock to elect
directors by a separate class vote) to which all shareholders of the corporation
would be entitled in the election of directors or where the members of the Board
of Directors of the Company, immediately prior to the merger or consolidation,
would not immediately after the merger or consolidation, constitute a majority
of the Board of Directors of the corporation issuing cash or securities in the
merger or consolidation or (y) on the date of approval of the sale or other
disposition of all or substantially all the assets of the Company.
(b) Termination for Cause. The Company shall have the right to
terminate the services of Executive at any time without further liability or
obligations to Executive if: (i) Executive has failed or refused to perform such
services as may reasonably be delegated or assigned to Executive consistent with
the Executive's position, by the Chief Executive Officer or by the Board of
Directors, (ii) Executive has been grossly negligent in connection with the
performance of Executive's duties, (iii) Executive has committed acts involving
dishonesty, willful misconduct, breach of fiduciary duty, fraud, or any similar
offense which materially affects Executive's ability to perform Executive's
duties for the Company or may materially adversely affect the Company, or (iv)
Executive has been convicted of a felony.
Termination of the services of Executive for Cause shall not be
effective unless and until acted upon by the Board of Directors and unless and
until written notice shall have been given to Executive which notice shall
include identification with specificity of each and every factual basis or
incident upon which the termination is based.
(c) Good Reason. Good Reason shall mean the occurrence or
existence of any of the following with respect to Executive: (i) Executive's
annual rate of salary is reduced from the annual rate then currently in effect
or Executive's other employee benefits are in the aggregate materially reduced
from those then currently in effect (unless such reduction of employee benefits
applies to employees of the Company generally), or (ii) Executive's place of
employment is moved more than 25 miles from its then current location, or (iii)
Executive is assigned duties that are demeaning or are otherwise materially
inconsistent with the duties then currently performed by Executive.
Before Executive may terminate Executive's employment for Good Reason,
Executive must notify the Company in writing of Execution's intention to
terminate and the Company shall have 15 days after receiving such written notice
to remedy the situation, if possible.
4. Right to Employment. Nothing contained herein shall confer upon
Executive any right to be continued in the employment of the Company or
interfere in any way with the right of the Company to terminate Executive's
employment at any time for any reason. Executive hereby acknowledges that
Executive is and will remain an employee-at-will of the Company, terminable with
or without Cause.
5. Notices. All notice given in connection with this Agreement shall be
in writing and shall be delivered either by personal delivery, by telegram,
telex, telecopy or similar facsimile means, by certified or registered mail,
return receipt requested, or by express courier or delivery services, addressed
to the parties hereto at the following addresses:
To Executive: To PSC:
PSC Inc.
000 Xxxxxx Xxxx
Xxxxxxx, XX 00000
Attn: Chief Executive Officer
FAX: (000) 000-0000
or at such other address and number as either party shall have previously
designated by written notice given to the other party in the manner hereinabove
set forth. Notice shall be deemed given when received, if sent by telegram,
telex, telecopy or similar facsimile means (confirmation of such receipt by
confirmed facsimile transmission being deemed receipt of communications sent by
telex, telecopy or other facsimile means); and when delivered and receipted for
(or upon the date of attempted delivery where delivery is refused), if
hand-delivered, sent by express courier or delivery services, or sent by
certified or registered mail, return receipt requested.
6. Waiver. Any waiver of a breach of any of the terms of this
Agreement shall not operate as a waiver of any other breach of such terms or of
any other terms, nor shall failure to enforce any term hereof operate as a
waiver of any such term or of any other term.
7. Severability. If any term of this Agreement or the
application thereof is held invalid or unenforceable, the validity or
unenforceability shall not effect any other term of this Agreement which can be
given effect without the invalid or unenforceable term.
8. Governing Law; Venue. This Agreement shall be construed and enforced
in accordance with and governed by the internal laws of the State of New York,
without reference to conflict of law principles of any jurisdiction (including
without limitation New York) which would result in the application of the
domestic substantive laws of any other jurisdiction. The parties consent to the
exclusive jurisdiction of the Supreme Court of New York, Monroe County or of the
United States District Court of the Western District of New York for any legal
action instituted by any party against any other with respect to the subject
matter hereof.
9. Entire Agreement. This Agreement contains the entire agreement
between the parties with respect to the subject matter hereof. This Agreement
may not be amended or changed except by a writing signed by both parties.
10. Successors and Assigns. This Agreement shall bind and inure
to the benefit of the parties hereto and their respective successors and
assigns.
IN WITNESS WHEREOF, Executive has executed this Agreement and the
Company has caused this Agreement to be executed as of the date set forth above.
PSC Inc.
By:
L. Xxxxxxx Xxxx
Its: Chief Executive Officer
EXECUTIVE
