EXHIBIT 10.10
EXECUTIVE SEVERANCE AGREEMENT
This Agreement ("Agreement") is entered into on February 20, 1998 between
XXXXXXXX METALS COMPANY, a Delaware corporation ("Xxxxxxxx"), and
______________________ ("Executive").
WHEREAS, the maintenance of a strong and experienced management is
essential in protecting and enhancing the best interests of Xxxxxxxx and its
stockholders, and in this connection Xxxxxxxx recognizes that, as is the case
with many publicly held corporations, the possibility of a change in control
may arise and may result in the departure or distraction of management
personnel to the detriment of Xxxxxxxx and its stockholders; and
WHEREAS, the Compensation Committee and the Board of Directors of Xxxxxxxx
have each determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of management to
their regular duties without distraction arising from a possible change in
control or a proposed or threatened change in control of Xxxxxxxx; and
WHEREAS, should Xxxxxxxx become subject to any proposed or threatened
change in control, it is imperative that the Board be able to call upon
management to advise the Board as to whether such change in control would be in
the best interests of Xxxxxxxx and its stockholders, and to take such other
actions as the Board might determine to be appropriate, without concern that
management would be distracted by the personal uncertainties and risks created
by such a proposed or threatened change in control; and
WHEREAS, the Compensation Committee and the Board have received from
independent consultants information concerning the adoption of executive
severance agreements by other corporations and from management the estimated
cost to Xxxxxxxx of adoption of each of the material provisions of the form of
executive severance agreement presented at the meeting; and
WHEREAS, the Compensation Committee and the Board have each carefully
reviewed the information presented to them and have determined that the
anticipated benefits to Xxxxxxxx from entering into such agreements with key
executives designated by the Compensation Committee, thereby encouraging their
continued attention and dedication to their duties, exceed the anticipated
costs to Xxxxxxxx of entering into such agreements; and
WHEREAS, the Compensation Committee and the Board have each concluded that
such agreements are in the best interests of Xxxxxxxx and its stockholders; and
WHEREAS, Executive is a key executive of Xxxxxxxx and has been selected by
the Compensation Committee to enter into such an agreement with Xxxxxxxx;
NOW, THEREFORE, to assure Xxxxxxxx that it will have the continued
dedication of Executive and the availability of his advice and counsel
notwithstanding the possibility, threat or occurrence of a change in control of
Xxxxxxxx, and to induce Executive to remain in the employ of Xxxxxxxx, and for
other good and valuable consideration, Xxxxxxxx and Executive agree as follows:
1. Services During Certain Events. If a third person begins a tender or
exchange offer, circulates a proxy to stockholders, or takes other steps to
effect a Change in Control (as defined in Section 2), Executive agrees that he
will not voluntarily leave the employ of Xxxxxxxx and will render the services
contemplated in the recitals to this Agreement, until the third person has
abandoned or terminated his efforts to effect a Change in Control or until a
Change in Control has occurred.
2. Termination Following Change in Control. Except as provided in
Section 4, Xxxxxxxx will provide or cause to be provided to Executive the
rights and benefits described in Section 3 if Executive's employment by
Xxxxxxxx is terminated at any time within two years following a Change in
Control:
(a) By Xxxxxxxx for reasons other than
(i) for Cause (as defined in Section 4); or
(ii) as a result of Executive's death, permanent disability, or
retirement at or after the normal retirement date specified in
Xxxxxxxx' New Retirement Program for Salaried Employees ("New
Retirement Program") as in effect immediately preceding the date
of Executive's termination ("Normal Retirement Date");
or
(b) By Executive following the occurrence of any of the following events
without Executive's written consent:
(i) the assignment of Executive to any duties or responsibilities
that are inconsistent with his position, duties,
responsibilities or status immediately preceding such Change in
Control, or a change in his reporting responsibilities or titles
in effect at such time resulting in a reduction of his
responsibilities or position at Xxxxxxxx;
(ii) the reduction of Executive's annual base salary (including any
deferred portions thereof), or the failure to increase
Executive's annual base salary at least once in each 15 month
period, any such increase to be at substantially the same level
as the increases received by other executives with similar
titles and duties;
(iii) the failure to continue in effect the incentive plans, employee
benefit plans, and other compensation policies, practices and
arrangements in which Executive participated immediately before
the Change in Control, or the failure to continue Executive's
participation on substantially the same basis, both in terms of
the amount of benefit provided and the level of participation
relative to other participants;
(iv) the transfer of Executive to a location more than 50 miles from
his location at the time of the Change in Control, or a material
increase in the amount of travel normally required of Executive
in connection with his employment by Xxxxxxxx;
(v) the good faith determination by Executive that due to the Change
in Control (including any changes in circumstances at Xxxxxxxx
that directly or indirectly affect Executive's position, duties,
responsibilities or status as in effect immediately preceding
such Change in Control) he is no longer able effectively to
discharge his duties and responsibilities;
(vi) any material breach by Xxxxxxxx of any provision of this
Agreement; or
(vii) any failure by Xxxxxxxx to obtain the assumption of this
Agreement by any successor to Xxxxxxxx.
For purposes of this Agreement, a "Change in Control" shall mean the
occurrence of any of the following events:
(x) a Triggering Event (as defined below);
(y) Continuing Directors (as defined below) ceasing to be a majority of
the Board of Directors of Xxxxxxxx; or
(z) any other event which a disinterested majority of the Continuing
Directors determines to be a Change in Control for purposes of this
Agreement.
"Triggering Event" and "Continuing Directors" shall have the meanings given
them in the Rights Agreement dated December 1, 1997 between Xxxxxxxx and The
Chase Manhattan Bank, N.A., as initially executed.
3. Rights and Benefits upon Termination. If Executive's employment is
terminated under any of the circumstances set forth in Section 2
("Termination"), Xxxxxxxx agrees to provide or cause to be provided to
Executive the following rights and benefits:
(a) Salary and Incentive. Executive shall receive within five
business days of Termination a lump sum payment in cash in an amount equal
to three times Executive's Earnings (as defined in this Section 3(a));
provided, however, that if there are fewer than 36 months remaining from
the date of Termination to Executive's Normal Retirement Date, the amount
calculated pursuant to this Section 3(a) shall be reduced by multiplying
such amount by a fraction, the numerator of which is the number of months
(including any fraction of a month) remaining to Executive's Normal
Retirement Date and the denominator of which is 36.
For purposes of this Section 3(a), "Earnings" shall mean the sum of
(i) Executive's annual base salary (at the rate in effect at the date of
Termination, or, if greater, at the rate in effect immediately preceding
the Change in Control), plus (ii) an amount equal to the highest cash
target incentive opportunity established for Executive for 1998 or any
future calendar year (without regard to any possible deferred portions
thereof). Earnings shall not include any income attributable to options
granted and dividends on shares acquired pursuant to any stock option plan
maintained by Xxxxxxxx for its employees.
(b) Stock Options. If at the date of Termination Executive has an
outstanding option ("Option") to purchase shares of common stock of
Xxxxxxxx ("Option Shares") under any nonqualified stock option plan
maintained by Xxxxxxxx for its employees, and if under the terms of that
nonqualified stock option plan the Option is not exercisable at the date
of Termination and will not thereafter become exercisable, Executive shall
receive within five business days of Termination a lump sum payment in
cash in an amount equal to the product of (i) the excess, if any, of the
closing price of such Option Shares as reported on New York Stock
Exchange-Composite Transactions on the date of Termination over the per
share exercise price of such Option, times (ii) the number of Option
Shares covered by such Option; and in addition to the cash payment
required by this Section 3(b), if Executive has any outstanding options
that will remain exercisable after Termination to the extent the
Compensation Committee approves, then approval shall be deemed to be
granted as of Executive's Termination;
(c) Retirement Benefits. Executive shall receive within five
business days of Termination a lump sum payment in cash in an amount equal
to the actuarial value of the excess of (i) what would be Executive's
accrued benefit calculated pursuant to the applicable formula in the New
Retirement Program (as in effect at the date of Termination or, if more
favorable to Executive, as in effect immediately preceding the Change in
Control), if Executive were given additional credited service for a period
of 36 months following Termination (or such lesser period as shall remain
until Executive's Normal Retirement Date), with annual earnings during
each full or partial year of the additional period equal to his annual
earnings in effect for purposes of the New Retirement Program at his date
of Termination, and computed without regard to statutory restrictions on
benefits accrued or payable under qualified plans, over (ii) Executive's
accrued benefit, if any, payable under the New Retirement Program,
including any benefit payable under Xxxxxxxx' Benefit Restoration Plan for
New Retirement Program. For purposes of this Section 3(c), actuarial
equivalents shall be determined using the same methods and assumptions
used under the New Retirement Program at the date of Termination.
(d) Welfare Benefit Plans. To the extent Executive is eligible
thereunder, Executive shall continue to be covered by (i) any group term,
supplemental and/or split dollar life insurance plan in effect for
Executive at Termination and (ii) the medical, dental, vision, accident
and disability benefit plans of Xxxxxxxx in effect at Termination for
employees in the same class or category as Executive, subject in each case
to the terms of such plans and to Executive's making any required
contributions thereto, to the extent contributions are required of active
employees. If Executive is not eligible to continue to be so covered
under the terms of any such benefit plan or program, or if Executive is
eligible but the benefits applicable to Executive are not substantially
equivalent to the benefits applicable to Executive immediately prior to
Termination, then, for a period of 36 months following Termination (or
until Executive's Normal Retirement Date, if sooner), Xxxxxxxx shall
provide such substantially equivalent benefits, or such additional
benefits as may be necessary to make the benefits applicable to Executive
substantially equivalent to those in effect before Termination, through
other sources; provided, however, that if during such period Executive
should enter into the employ of another company or firm which provides
substantially similar benefit coverage, Executive's participation in the
comparable benefit provided by Xxxxxxxx either directly or through other
sources shall cease. Nothing contained in this Section 3(d) shall be
deemed to require or permit termination or restriction of Executive's
coverage under any plan or program of Xxxxxxxx or any successor plan or
program thereto to which Executive is entitled under the terms of such
plan or program, whether at the end of the aforementioned 36-month period
or at any other time.
(e) Automobile. Within five business days of Termination, Xxxxxxxx
shall transfer to Executive, free and clear of any liens or encumbrances,
the ownership of the automobile, if any, provided by Xxxxxxxx to
Executive at the date of Termination. After transfer of ownership,
Executive shall be solely responsible for maintaining the automobile.
(f) Other Benefit Plans and Perquisites. The specific arrangements
referred to in this Section 3 are not intended to exclude Executive's
participation in other benefit plans or enjoyment of other perquisites
which are available to executive personnel generally in
the class or category of Executive or to preclude such other compensation
or benefits as may be authorized from time to time by the Board of
Directors of Xxxxxxxx or by its Compensation Committee; provided, however,
that any payments hereunder shall be in lieu of, and not in addition to,
any amounts that would otherwise be payable to Executive upon termination
of employment pursuant to Xxxxxxxx' Termination Allowance Policy or any
successor severance pay plan.
(g) Excise Taxes. If Executive becomes entitled to payments under
this Section 3 ("Severance Payments"), and if any of the Severance
Payments will be subject to the tax ("Excise Tax") imposed by Section 4999
of the Internal Revenue Code of 1986, as amended (the "Code"), Executive
shall receive at the time specified below an additional amount ("Gross-Up
Payment") such that the net amount retained by Executive, after deduction
of any Excise Tax on the Severance Payments and any federal, state and
local income tax and Excise Tax upon the payment provided for by this
Section 3(g), shall be equal to the Severance Payments. For purposes of
determining whether any of the Severance Payments will be subject to the
Excise Tax and the amount of such Excise Tax, (i) any other payments or
benefits received or to be received by Executive in connection with a
Change in Control or Executive's Termination (whether pursuant to the
terms of this Agreement or with any other plan, arrangement or agreement
with Xxxxxxxx, with any person whose actions result in a Change in
Control, or with any person affiliated with Xxxxxxxx or such person) shall
be treated as "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and all "excess parachute payments" within the
meaning of Section 280G(b)(1) shall be treated as subject to the Excise
Tax, unless in the opinion of tax counsel selected by Xxxxxxxx'
independent auditors and acceptable to Executive such other payments or
benefits (in whole or in part) do not constitute parachute payments, or
such excess parachute payments (in whole or in part) represent reasonable
compensation for services actually rendered within the meaning of Section
280G(b)(4) of the Code in excess of the base amount within the meaning of
Section 280G(b)(3) of the Code, or are otherwise not subject to the Excise
Tax, (ii) the amount of the Severance Payments which shall be treated as
subject to the Excise Tax shall be equal to the lesser of (A) the total
amount of the Severance Payments or (B) the amount of excess parachute
payments
within the meaning of Section 280G(b)(1) (after applying clause
(i) above), and (iii) the value of any non-cash benefits or any deferred
payment or benefit shall be determined by Xxxxxxxx' independent auditors
in accordance with the principles of Sections 280G(d)(3) and (4) of the
Code. For purposes of determining the amount of the Gross-Up Payment,
Executive shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of Executive's
residence on the date of Termination, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state
and local taxes.
If the Excise Tax is subsequently determined to be less than the
amount taken into account hereunder at the time of Termination, Executive
shall repay to Xxxxxxxx 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 the portion of the Gross-up Payment
attributable to the Excise Tax and federal and state and local income tax
imposed on the Gross-Up Payment being repaid by Executive if such
repayment results in a reduction in Excise Tax and/or a federal and state
and local income tax reduction) plus interest received by Executive
attributable to any excise tax refund. If the Excise Tax is determined to
exceed the amount taken into account hereunder at the date of Termination
(including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), Xxxxxxxx shall
make an additional gross-up payment in respect of such excess (plus any
interest payable with respect to such excess) at the time that the amount
of such excess is finally determined.
The Gross-Up Payment shall be made not later than the fifth business
day following Termination; provided, however, that if the amount of such
payment cannot be finally determined on or before such day, Xxxxxxxx shall
pay Executive on such day an estimate as determined in good faith by
Xxxxxxxx of the minimum amount of such payment and shall pay the remainder
of such payment (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code) as soon as the amount thereof can be determined
but in no event later than the thirtieth day after Termination. If the
amount of the estimated payments exceeds the amount subsequently
determined to have been due, such excess shall constitute a loan by
Xxxxxxxx to Executive payable on the fifth business day after demand by
Xxxxxxxx (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code).
(h) No Duty to Mitigate. Except as provided in Section 3(d),
Executive's entitlement to benefits hereunder shall not be governed by any
duty to mitigate his damages by seeking further employment nor offset by
any compensation which he may receive from future employment.
(i) Payment Obligations Absolute. Xxxxxxxx' obligation to pay or
cause to be paid to Executive the benefits and to make the arrangements
provided in this Section 3 shall be absolute and unconditional and shall
not be affected by any circumstances, including without limitation any
breach or alleged breach of Section 5, any setoff, counterclaim,
recoupment, defense or any other right which Xxxxxxxx may have against him
or anyone else. All amounts payable by or on behalf of Xxxxxxxx hereunder
shall be paid without notice or demand. Each and every payment made
hereunder by or on behalf of Xxxxxxxx shall be final and Xxxxxxxx and its
subsidiaries shall not, for any reason whatsoever, seek to recover all or
any part of such payment from Executive or from whoever shall be entitled
thereto.
4. Conditions to the Obligations of Xxxxxxxx. Xxxxxxxx shall have no
obligation to provide or cause to be provided to Executive the rights and
benefits described in Section 3 hereof if either of the following events shall
occur:
(a) Termination for Cause. Xxxxxxxx shall terminate Executive's
employment for Cause. For purposes of this Agreement, termination of
employment for "Cause" shall mean termination solely for dishonesty,
conviction of a felony, or willful unauthorized disclosure of confidential
information of Xxxxxxxx.
(b) Resignation as Director and/or Officer. Executive shall not,
promptly after Termination and upon receiving a written request to do so,
resign as a director and/or officer of Xxxxxxxx and of each subsidiary and
affiliate of Xxxxxxxx for which he is then serving as a director and/or
officer.
5. Confidentiality; Non-Solicitation; Cooperation; Consultancy.
(a) Confidentiality. Executive agrees that at all times following
Termination, he will not, without the prior written consent of Xxxxxxxx,
disclose to any person, firm or corporation any confidential information of
Xxxxxxxx or its subsidiaries which is now known to him or which hereafter may
become known to him as a result of his employment or association with Xxxxxxxx
and which could be helpful to a competitor; provided, however, that the
foregoing shall not apply to confidential information which becomes publicly
disseminated by means other than a breach of this Agreement.
(b) Non-Solicitation. Executive agrees that for a period of three
years following the date of Termination (or until Executive's Normal Retirement
Date, whichever is sooner) he will not induce or attempt to induce, either
directly or indirectly, any management or executive employee of Xxxxxxxx or of
any of its subsidiaries to terminate his or her employment.
(c) Cooperation. Executive agrees that, at all times following
Termination, he will furnish such information and render such assistance and
cooperation as may reasonably be requested in connection with any litigation or
legal proceedings concerning Xxxxxxxx or any of its subsidiaries (other than
any legal proceedings concerning Executive's employment). In connection with
such cooperation, Xxxxxxxx will pay or reimburse Executive for reasonable
expenses actually incurred.
(d) Consultation. Executive agrees that for a period of 36 months
following Termination (or until Executive's Normal Retirement Date, if sooner),
he will make himself available to Xxxxxxxx and its subsidiaries for
consultation with senior officers of Xxxxxxxx and of its subsidiaries;
provided, however, that Executive shall not be required to perform such
consulting services (i) for more than five days in any month and (ii) for more
than 30 hours in any month. It is expressly agreed that Executive's consulting
services will be required at such time and such places as will result in the
least inconvenience to Executive, taking into consideration Executive's other
business commitments during such period which may obligate Executive to honor
such other commitments prior to his rendering services hereunder. It is
further agreed that Executive's consulting services shall be rendered by
personal consultation at Executive's principal residence or office, wherever
maintained, or by correspondence through mail, telephone or telegraph or other
similar modes of communication at times, including weekends and evenings, most
convenient to Executive. Xxxxxxxx and Executive agree that if during such
period Executive should engage in
full-time employment, Executive shall not be required to consult at times that
will conflict with his responsibilities with respect to such employment. In
connection with such consulting services, Xxxxxxxx will pay or reimburse
Executive for reasonable expenses actually incurred.
(e) Remedies for Breach. It is recognized that damages in the event
of breach of this Section 5 by Executive would be difficult, if not impossible,
to ascertain, and it is therefore agreed that Xxxxxxxx, in addition to and
without limiting any other remedy or right it may have, shall have the right to
an injunction or other equitable relief in any court of competent jurisdiction,
enjoining any such breach. The existence of this right shall not preclude
Xxxxxxxx from pursuing any other rights and remedies at law or in equity which
Xxxxxxxx may have.
6. Term of Agreement. This Agreement shall commence on the date hereof
and shall remain in force until December 31, 1999; provided, however, that
commencing on January 1, 1999, and each January 1 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless, not
later than November 1 of the preceding year, Xxxxxxxx shall have given notice
to Executive that Xxxxxxxx does not wish to extend this Agreement; and provided
further that if a Change in Control occurs during the original or extended term
of this Agreement, this Agreement shall continue in effect for a period of 24
months beyond the month in which the Change in Control occurred.
Notwithstanding the foregoing, this Agreement shall terminate if either
Xxxxxxxx or Executive terminates the employment of Executive before a Change in
Control occurs. Except as otherwise provided in Section 8(b), this Agreement
shall also terminate upon the Executive's death or disability or his Normal
Retirement Date.
7. Adjudication and Expenses.
(a) If a dispute or controversy arises under or in connection with this
Agreement, Executive shall be entitled to an adjudication in an appropriate
court of the State of Delaware, or in any other court of competent
jurisdiction. Alternatively, Executive, at Executive's option, may seek an
award in arbitration to be conducted by a single arbitrator under the
Commercial Arbitration Rules of the American Arbitration Association.
(b) Xxxxxxxx shall pay or reimburse Executive for all costs and expenses,
including without limitation court costs and attorneys' fees, incurred by
Executive as a result of any claim, action or proceeding (including without
limitation a claim, action or proceeding by Executive against Xxxxxxxx) arising
out of, or
challenging the validity or enforceability of, this Agreement or any provision
hereof.
8. Successors; Binding Agreement.
(a) This Agreement shall inure to the benefit of and be binding upon
Xxxxxxxx and its successors and assigns.
(b) This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Executive should
die while any amount would still be payable hereunder if Executive had
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to Executive's devisee,
legatee or other designee or, if there is no such designee, Executive's estate.
9. Miscellaneous.
(a) Assignment. No right, benefit or interest hereunder shall be subject
in any manner to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, except by will or the laws of descent and distribution,
and any attempt thereat shall be void; and no right, benefit or interest
hereunder shall, prior to receipt of payment, be in any manner liable for or
subject to the recipient's debts, contracts, liabilities, engagements or torts;
provided, however, that Executive may assign any right, benefit or interest
hereunder if such assignment is permitted under the terms of any plan or policy
of insurance or annuity contract governing such right, benefit or interest.
(b) Construction of Agreement. Nothing in this Agreement shall be
construed to amend any provision of any plan or policy of Xxxxxxxx. This
Agreement is not, and nothing herein shall be deemed to create, a commitment of
continued employment of Executive by Xxxxxxxx or by any of its subsidiaries.
(c) Statutory References. Any reference in this Agreement to a specific
statutory provision shall include that provision and any comparable provision
or provisions of future legislation amending, modifying, supplementing or
superseding the referenced provision.
(d) Amendment. Except as otherwise provided in Section 6, this Agreement
may not be amended, modified or terminated except by written agreement of both
parties.
(e) Waiver. No provision of this Agreement may be waived except by a
writing signed by the party to be bound thereby.
Executive may at any time or from time to time waive any or all of the
rights and benefits provided for herein which have not been received by
Executive at the time of such waiver. In addition, prior to the last day of
the calendar year in which Executive's Termination occurs, Executive may waive
any or all rights and benefits provided for herein which have been received by
Executive; provided that Executive repays to Xxxxxxxx (or, if the benefit was
received from an employee benefit plan, to such plan) the amount of the benefit
received (together with interest at the rate provided in Section 1274(b)(2)(B)
of the Code). Any waiver of benefits pursuant to this section shall be
irrevocable.
(f) Severability. If any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, the remaining
provisions of this Agreement shall remain in full force and effect to the
fullest extent permitted by law.
(g) Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be considered an original and all of which
together shall constitute one agreement.
(h) Number and Gender. All words used in this Agreement shall be
construed to be of such number or gender as the circumstances require.
(i) Taxes. Any payment or delivery required under this Agreement shall
be subject to all requirements of the law with regard to withholding of taxes,
filing, making of reports and the like, and Xxxxxxxx shall use its best efforts
to satisfy promptly all such requirements.
(j) Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of Delaware.
(k) Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the parties hereto with respect to the matters covered hereby.
Each of the parties has therefore caused this Agreement to be executed on
its or his behalf as of the 20th day of February, 1998.
XXXXXXXX METALS COMPANY
By_______________________________
Title: Chairman of the Board and
Chief Executive Officer
EXECUTIVE
_________________________________
March 18, 1998
Mr. ____
Richmond, Virginia
RE: Amendment to Executive Severance Agreement
Dear Mr._____:
The Executive Severance Agreement between you and Xxxxxxxx Metals Company
("Xxxxxxxx") dated _____ (the "Agreement") provides in Section 9(d) that the
Agreement can be amended by written agreement of both parties. Xxxxxxxx
therefore proposes the following amendments to the Agreement effective December
1, 1997:
1. Section 2(b) shall be amended by substituting the words "the
Rights Agreement dated December 1, 1997" for the reference to "the Rights
Agreement dated November 23, 1987."
2. The second paragraph of Section 3(a) shall be amended to read in
its entirety as follows:
For purposes of this Section 3(a), "Earnings" shall mean the sum
of (i) Executive's annual base salary (at the rate in effect at the
date of Termination, or, if greater, at the rate in effect
immediately preceding the Change in Control), plus (ii) an amount
equal to the highest cash target incentive opportunity established
for Executive for 1998 or any future calendar year (without regard to
any possible deferred portions thereof). Earnings shall not include
any income attributable to options granted and dividends on shares
acquired pursuant to any stock option plan maintained by Xxxxxxxx for
its Employees.
3. The first sentence of Section 3(d) shall be amended to read in
its entirety as follows:
To the extent Executive is eligible thereunder, Executive shall
continue to be covered by (i) any group term, supplemental and/or
split dollar life insurance plan in effect for Executive at
Termination and (ii) the medical, dental, vision, accident and
disability benefit plans of Xxxxxxxx in effect at Termination for
employees in the same class or category as Executive, subject in each
case to the terms of such plans and to Executive's making any
required contributions thereto, to the extent contributions are
required of active employees.
If the amendment of the Agreement as set forth in this letter is
acceptable to you, please sign and return the enclosed copy of this letter.
Very truly yours,
Xxxxxxxx X. Xxxxxxx
ACCEPTED:
_________________________
Date:____________________
