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EXHIBIT 10.4
EMPLOYMENT CONTINUATION AGREEMENTS
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Attached is a copy of the Employment Continuation Agreement executed
between Society Corporation and the following executive officers of Society as
of the dates indicated:
DECEMBER 5, 1990
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FEBRUARY 1, 1991
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FEBRUARY 8, 1991
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AGREEMENT
This AGREEMENT ("Agreement"), made as of the __ day of _________, 19__,
between SOCIETY CORPORATION, an Ohio corporation ("Society"), and
____________________________ (the "Executive"),
W I T N E S S E T H:
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WHEREAS, Society has determined that, in light of the importance of the
Executive's continued services to the continuity of management of Society and
its Subsidiaries (as defined in Section 1 below), it is in Society's best
interest to encourage the Executive's continued attention and dedication to the
Executive's duties in the potentially disruptive circumstances of a possible
Change of Control (as defined in Section 1 below) of Society;
NOW, THEREFORE, Society and the Executive agree as follows:
1. Definitions.
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(a) ACCOUNTING FIRM. The term "Accounting Firm" means the independent
auditors of Society for the fiscal year preceding the year in which the Change
of Control occurred and such firm's successor or successors; provided, however,
if such firm is unable or unwilling to serve and perform in the capacity
contemplated by this
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Agreement, Society shall select another national accounting firm of recognized
standing to serve and perform in that capacity under this Agreement, except
that such other accounting firm shall not be the then independent auditors for
Society or any of its affiliates (as defined in Rule 12b-2 promulgated under
the Securities Exchange Act of 1934, as amended).
(b) AGGREGATE INCENTIVE COMPENSATION AWARD. The term "Aggregate Incentive
Compensation Award" with respect to the Executive for any year shall mean the
aggregate incentive compensation awards (whether paid in cash, deferred, or a
combination of both) payable to the Executive under both the Society Management
Incentive Compensation Plan and the Society Long Term Incentive Compensation
Plan for that year. For these purposes, an incentive compensation award payable
to the Executive under the Society Long Term Incentive Compensation Plan with
respect to any three-year period will be deemed to be "for" the last year of
that three-year period. Thus, for example, the incentive compensation award
payable to the Executive under the Society Long Term Incentive Compensation
Plan with respect to the three year period comprised of 1988, 1989, and 1990
will be deemed to be "for" 1990 (without regard to the time of payment), the
entire award under that plan for that period will be part of the Aggregate
Incentive Compensation Award for 1990, and no part of the award under
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that plan for that period will be part of the Aggregate Incentive Compensation
Award for any year other than 1990.
(c) AVERAGE ANNUAL INCENTIVE COMPENSATION. The term
"Average Annual Incentive Compensation" shall mean the greater of:
(i) the average of the three highest Aggregate Incentive Compensation
Awards payable to the Executive for any of the years during the five-year
period ended on the December 31 immediately preceding the Termination
Date, or
(ii) the average of the three highest Aggregate Incentive Compensation
Awards payable to the Executive for any of the years during the five-year
period ended on the December 31 immediately preceding the first Change of
Control occurring after the execution of this Agreement.
(d) CAUSE. The employment of the Executive by Society or any
of its Subsidiaries shall have been terminated for "Cause" if, after a Change of
Control and prior to the termination of employment, any of the following has
occurred:
(i) the Executive shall have been convicted of a felony,
(ii) the Executive commits an act or series of acts of dishonesty in
the course of the Executive's employment which are materially inimical to
the best interests of Society or a Subsidiary and which constitutes the
commission of a felony, all as determined by the vote of three fourths of
all of the members of the Board of Directors of Society (other than the
Executive, if the Executive is a Director of Society) which determination
is confirmed by a panel of three arbitrators appointed and acting in
accordance with the rules of the American Arbitration Association for the
purpose of reviewing that determination, or
(iii) after being notified in writing by the Board of Directors of
Society to cease the Competitive Activity in question, the Executive
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shall intentionally continue to engage in such Competitive Activity
while the Executive remains in the employ of Society or a Subsidiary.
(e) CHANGE OF CONTROL. A "Change of Control" shall be deemed to have
occurred if at any time or from time to time after the date of this Agreement:
(i) there is a report filed on Schedule 13D or Schedule 14D-1 (or any
successor schedule, form, or report), each as adopted under the Securities
Exchange Act of 1934, as amended, disclosing the acquisition of 25% or
more of the voting stock of Society in a transaction or series of
transactions by any person (as the term "person" is used in Section 13(d)
and Section 14(d)(2) of the Securities Exchange Act of 1934, as amended),
(ii) during any period of 24 consecutive calendar months, individuals
who at the beginning of such period constitute the directors of Society
cease for any reason to constitute at least a majority thereof unless the
election of each new director of Society was approved or recommended by the
vote of at least two-thirds of the directors of Society then still in
office who were directors of Society at the beginning of any such period,
(iii) Society merges with or into or consolidates with another
corporation and, after giving effect to such merger or consolidation, less
than sixty percent (60%) of the then outstanding voting securities of the
surviving or resulting corporation represent or were issued in exchange
for voting securities of Society outstanding immediately prior to such
merger or consolidation,
(iv) there is a sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all or substantially
all the assets of Society, or
(v) the shareholders of Society shall approve any plan or proposal for
the liquidation or dissolution of Society.
(f) COMPETITIVE ACTIVITY. The Executive shall be deemed to
have engaged in "Competitive Activity" if the Executive:
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(i) engages in any business or business activity in which Society or
any of its Subsidiaries engages, including, without limitation, engaging
in any business activity in the banking or financial services industry
(other than as a director, officer, or employee of Society or any of its
Subsidiaries), or
(ii) serves as a director, officer, or employee of any bank, bank
holding company, savings and loan association, building and loan
association, savings and loan holding company, insurance company,
investment banking or securities company, or other financial services
company other than Society or any of its Subsidiaries (each of the
foregoing being hereinafter referred to as a "Financial Services Company"),
or renders services of a consultative or advisory nature or otherwise to
any such Financial Services Company; provided, however, this clause (ii)
shall not prohibit or restrict the Executive from serving in any such
capacity with the consent of Society.
(g) DAY. A "day" as used in this Agreement means a calendar
day unless business day is specifically referred to.
(h) FULL-TIME EMPLOYMENT WITH AN UNAFFILIATED EMPLOYER.
"Full-time Employment with an Unaffiliated Employer" means full-time (more
than 30 hours per week) employment at either a base salary, hourly rate,
partnership interest, or other form of participation, which will result in
annual compensation to the Executive of at least 75% of the annual base
salary of the Executive with Society and its Subsidiaries at the highest rate
in effect at any time from one year prior to the Change of Control to the
Termination Date, but does not include employment by (i) a corporation or
other firm organized or formed by the Executive as a new business (including,
without limitation, a consulting
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business) after the Termination Date, or (ii) a corporation or other firm the
majority of the equity interests of which were acquired by the Executive and/or
the Executive's immediate family members after the Termination Date.
(i) NON-WINDOW VOLUNTARY RESIGNATION. A "Non-Window Voluntary
Resignation" shall have occurred if the Executive, on any day during the two-
year period beginning on the date of a Change of Control other than any day
that falls within the Window Period, terminates the Executive's employment
with Society and all its subsidiaries by voluntarily resigning, unless during
that two year period and prior to the Executive's voluntary resignation, there
has occurred a Reduction of Base Salary or a Mandatory Relocation; provided
further, in the event that there has been more than one Change of Control,
there shall not be a Non-Window Voluntary Resignation if the Termination Date
occurs during the Window Period with respect to any of the Changes of Control.
(j) PERMITTED EMPLOYMENT TERMINATION. A "Permitted Employment
Termination" shall have occurred if, after a Change of Control, the employment
of the Executive by Society or any of its Subsidiaries is terminated:
(i) by Society or its Subsidiary, for Cause,
(ii) by Society, its Subsidiary, or the Executive by reason of
disability of the Executive, as a result of accidental bodily injury or
sickness for a period of 180 consecutive days, but only if the Executive
begins to receive payments under the Society Long Term Disability Plan, or
(iii) by the death of the Executive.
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(k) REDUCTION OF BASE SALARY OR A MANDATORY RELOCATION. A
"Reduction of Base Salary or a Mandatory Relocation" shall have occurred if
either of the following has occurred:
(i) after a Change of Control, the base salary of the Executive is at
any time reduced, or
(ii) after a Change of Control, the Executive is required to relocate
the Executive's principal place of employment for Society or its Subsidiary
more than 35 miles from where the Executive was located prior to the
Change of Control.
(l) SOCIETY LONG TERM DISABILITY PLAN. The term "Society Long
Term Disability Plan" means and includes the Amended and Restated Society
Corporation Long Term Disability Plan as from time to time amended, restated,
or otherwise modified, including any long term disability plan hereafter
succeeding, replacing, or being substituted for such plan.
(m) SOCIETY LONG TERM INCENTIVE COMPENSATION PLAN. The term
"Society Long Term Incentive Compensation Plan" means and includes the Society
Corporation Long Term Incentive Compensation Plan (January 1, 1990 Restatement)
as from time to time amended, restated, or otherwise modified, including any
incentive compensation plan hereafter succeeding, replacing, or being
substituted for such plan.
(n) SOCIETY MANAGEMENT INCENTIVE COMPENSATION PLAN. The term
"Society Management Incentive Compensation Plan" means and includes the Society
Corporation Management Incentive Compensation Plan (January 1, 1990
Restatement) as from time to time amended, restated, or
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otherwise modified, including any incentive compensation plan hereafter
succeeding, replacing, or being substituted for such plan.
(o) SOCIETY RETIREMENT PLANS. The term "Society Retirement
Plans" means and includes the Retirement Plan for Employees of Society
Corporation and Subsidiaries (January 1, 1986 Restatement), the Society
Corporation Excess Benefit Retirement Plan (April 26, 1990 Amendment and
Restatement), and the Society Corporation Supplemental Retirement Plan (April
26, 1990 Amendment and Restatement), in all cases, as from time to time
amended, restated, or otherwise modified, including any plan hereafter
succeeding, replacing, or being substituted for any such plan, and all
retirement plans of any nature (including, without limitation, retirement
benefits or rights provided under employment contracts or agreements with the
Executive or provided in resolutions adopted by the Board of Directors of
Society or any of its Subsidiaries) maintained by Society or any of its
Subsidiaries in which the Executive was participating prior to the Termination
Date.
(p) SOCIETY SAVINGS PLANS. The term "Society Savings Plans"
means and includes the Society Corporation Employee Stock Purchase and Savings
Plan (January 1, 1989 Restatement) and the Amended and Restated Society
Corporation Supplemental Stock Purchase and Savings Plan, in both cases, as
from time to time amended, restated, or otherwise modified, including any plan
hereafter
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succeeding, replacing, or being substituted for either such plan, and all
salary reduction, savings, profit-sharing, or stock bonus plans (including,
without limitation, all plans involving employer matching contributions,
whether or not constituting a qualified cash or deferred arrangement under
Section 401(k) of the Internal Revenue Code), maintained by Society or any of
its Subsidiaries in which the Executive was participating prior to the
Termination Date.
(q) SOCIETY SUPPLEMENTAL RETIREMENT PLAN. The term "Society
Supplemental Retirement Plan" means and includes the Society Corporation
Supplemental Retirement Plan (April 26, 1990 Amendment and Restatement) as from
time to time amended, restated, or otherwise modified, including any
supplemental retirement plan hereafter succeeding, replacing, or being
substituted for such plan.
(r) SUBSIDIARY. A "Subsidiary" means any corporation, bank,
partnership, or other entity a majority of the voting control of which is
directly or indirectly owned or controlled at the time in question by Society.
(s) TERMINATION DATE. The term "Termination Date" means the
date on which the Executive's employment with Society and its Subsidiaries
terminates.
(t) WINDOW PERIOD. The term "Window Period," with respect to
any Change of Control, means the three-month period beginning on the date that
falls on same day of the month as the date of the Change of Control in the
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fifteenth month after the month in which the Change of Control occurs.
2. COMPENSATION CONTINUATION, SEVERANCE, AND OTHER BENEFITS IF
EMPLOYMENT IS TERMINATED WITHIN TWO YEARS OF A CHANGE OF CONTROL. If, within
two years following the occurrence of a Change of Control, the Executive's
employment with Society and its Subsidiaries is terminated for any reason
(whether by Society or its Subsidiary or by resignation of the Executive),
other than a Non-Window Voluntary Resignation or a Permitted Employment
Termination, this Section 2 shall become applicable and Society, either
directly or through one or more of its Subsidiaries, shall pay to the Executive
the amounts specified in Paragraphs (a) and (b) of this Section 2 on the dates
indicated therein and shall provide to the Executive the benefits specified in
Paragraphs (c) and (d) of this Section 2 for the period specified therein:
(a) Society or a Subsidiary shall pay to the Executive monthly
compensation continuation payments for 24 months (commencing on the fifteenth
day of the month following the month in which the Termination Date occurs and
continuing on the fifteenth day of each of the next succeeding 23 months). The
amount of each such monthly payment shall be the sum of (i) one month's base
salary of the Executive (at the highest rate in effect at any time from one
year prior to the Change of Control to the Termination Date), plus (ii)
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one-twelfth (1/12) of the Executive's Average Annual Incentive Compensation.
(b) Society or a Subsidiary shall pay to the Executive, within
10 business days after the Termination Date, a lump sum severance payment in
an amount equal to six times the amount of the monthly payment calculated under
Paragraph (a), above.
(c) Society or a Subsidiary shall arrange to provide the
Executive, for 24 months following the Termination Date, with medical benefits
(including, if applicable, dental), long term disability benefits, and group
term life insurance benefits, in all cases at substantially the same level of
coverage, and subject to the same (by dollar amount) employee contribution
requirement (if any), as those which the Executive was receiving or entitled to
receive as an officer of Society or its Subsidiary on the Termination Date.
(d) For 24 months following the Termination Date, Society
shall cause the Executive to continue to be covered by and to participate in
all Society Retirement Plans and Society Savings Plans that the Executive was
entitled to be covered by and participating in as an officer of Society or its
Subsidiary on the Termination Date, except where such coverage or
participation is "impermissible," as defined below. For purposes of determining
the benefits, if any, to be provided to the Executive under
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this Paragraph (d): (i) the 24 month period following the Termination Date that
the Executive is entitled to continued coverage by and participation in such
plans shall be included in determining the Executive's years of service; (ii)
the Executive's base salary during such 24 month period shall be deemed to be
the amount the Executive receives under clause (i) of Paragraph (a) of this
Section 2 and that portion of the amount payable under clause (ii) of
Paragraph (a) of this Section 2 that is attributable to incentive compensation
paid under the Society Management Incentive Compensation Plan shall be deemed
to be incentive compensation paid under the Society Management Incentive
Compensation Plan; and (iii) the Executive, if not already fully vested under
the Society Supplemental Retirement Plan will be treated as immediately vested
under that plan without regard to age or years of service. For purposes of
this Paragraph (d), the Executive's continued coverage by and participation in
any of the Society Retirement Plans and Society Savings Plans will be deemed
to be "impermissible" if such a continuation would violate the provisions of
such plan, would cause such plan to fail to be qualified under Section 401(a)
of the Internal Revenue Code, or would be unlawful. If, during the 24 month
period referred to in this Paragraph (d), Society determines in good faith that
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continuing, after the Termination Date, the Executive's coverage by and
participation in any of the Society Retirement Plans or any of the Society
Savings Plans is impermissible, Society shall not be required to cause the
Executive to continue to be covered by and to participate in such affected
plan or plans, but in lieu thereof, Society shall, within 45 days after the end
of such 24 month period, pay to the Executive a lump-sum amount, with respect
to each such plan in which the Executive's coverage or participation ceased for
any time during such 24 month period, equal to (x) in the case of any of the
Society Savings Plans, the aggregate maximum amount of the employer matching
contributions which would have been, but were not, credited to the Executive's
account if the Executive had, at all times during such 24 month period,
continued to be and participate in that plan to the maximum extent permitted,
and (y) in the case of any of the Society Retirement Plans, the difference
between the actuarial equivalent of the benefit under that plan which the
Executive would have received if the Executive had, at all times during such
24 month period, continued to be covered by and participate in that plan and
had thereafter elected to receive a straight life annuity at age 65 under that
plan and the actuarial equivalent of the actual benefit paid or payable to the
Executive under that plan determined as if the Executive had
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elected to receive a straight life annuity at age 65 under that plan. For
purposes of determining these actuarial equivalents, the discount rate used
shall be the lowest "immediate annuity rate" published by the Pension Benefit
Guaranty Corporation under PBGC Regulation Section 2619 for plans with
valuation dates during the 90-day period ending on the Termination Date and the
accrual formulas and actuarial assumptions utilized shall be the most
favorable to the Executive of those in effect with respect to that plan during
the 90-day period prior to the Termination Date. All determinations and
calculations required to be made under sub-clauses (x) and (y) of this
Paragraph (d) shall be made by the Accounting Firm, which shall provide
detailed supporting calculations both to Society and the Executive within 30
days after the end of such 24 month period. All such determinations and
calculations by the Accounting Firm shall be final and binding upon Society
and the Executive.
The payments under Paragraph (a) of this Section 2 and the benefits required to
be provided by Paragraphs (c) and (d) of this Section 2 are subject to
reduction or earlier termination, as the case may be, as provided in Section 4
of this Agreement in the event that the Executive accepts Full-time Employment
with an Unaffiliated Employer within 24 months following the Termination Date.
The payments provided in
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this Section are also subject to reduction as provided in Section 8 dealing
with excess parachute payments.
3. REIMBURSEMENT OF CERTAIN EXPENSES AFTER A CHANGE OF CONTROL.
(a) From and after a Change of Control, Society shall pay, as
incurred, all expenses, including the reasonable fees of counsel engaged by the
Executive, of defending any action brought to have this Agreement declared
invalid or unenforceable.
(b) From and after a Change of Control, Society shall pay, as
incurred, all expenses, including the reasonable fees of counsel engaged by the
Executive, of prosecuting any action to compel Society to comply with the terms
of this agreement upon receipt from Executive of an undertaking to repay
Society for such expenses if, and only if, it is ultimately determined by a
court of competent jurisdiction that the Executive had no reasonable grounds
for bringing that action (which determination need not be made simply because
the Executive fails to succeed in the action).
(c) From and after a Change of Control, expenses (including
attorney's fees) incurred by the Executive in defending any action, suit, or
proceeding commenced or threatened against the Executive for any action or
failure to act as an employee, officer, or director of Society or any
Subsidiary shall be paid by
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Society, as they are incurred, in advance of final disposition of the action,
suit, or proceeding upon receipt of an undertaking by or on behalf of the
Executive in which the Executive agrees to reasonably cooperate with Society
or the Subsidiary, as the case may be, concerning the action, suit, or
proceeding, and (i) if the action, suit, or proceeding is commenced or
threatened against the Executive for any action or failure to act as a
director, to repay the amount if it is proved by clear and convincing evidence
in a court of competent jurisdiction that the Executive's action or failure to
act involved an act or omission undertaken with deliberate intent to cause
injury to Society or a Subsidiary or (ii) if the action, suit, or proceeding is
commenced or threatened against the Executive for any action or failure to act
as an officer or employee, to repay the amount if it is ultimately determined
that the Executive is not entitled to be indemnified. The provisions of
this Paragraph (c) shall not apply if the only liability asserted against the
Executive in such action, suit, or proceeding is against the Executive in the
Executive's status as a director pursuant to Section 1701.95 of the Ohio
Revised Code.
4. NO SET-OFF; NO OBLIGATION TO SEEK OTHER EMPLOYMENT OR TO
OTHERWISE MITIGATE DAMAGES. Society's obligation to make the payments provided
for in this
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Agreement and otherwise to perform its obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense, or other claim
whatsoever which Society or any of its Subsidiaries may have against the
Executive; provided, however, if the Executive is indicted or charged by
information in criminal proceedings on account of theft from Society or its
Subsidiary, Society may thereafter suspend payments under this Agreement
pending conclusion (including available appeals) of such criminal proceedings
and, if the Executive is convicted at the conclusion of the criminal
proceedings of theft from Society or its Subsidiary, Society may set-off
amounts owing under this Agreement against the amounts taken by theft by the
Executive; otherwise, at the conclusion of the criminal proceedings without the
Executive being convicted of theft from Society or its Subsidiary, all
suspended payments shall be immediately paid to the Executive. The Executive
shall not be required to mitigate damages or the amount of any payment provided
for under this Agreement by seeking other employment or otherwise. Except as
provided in the next following sentence, the amount of any payment provided for
under this Agreement shall not be reduced by any compensation or benefits
earned by the Executive as the result of employment by another employer or
otherwise after the termination of the Executive's employment. In the event
that the Executive accepts Full-time Employment with an Unaffiliated Employer
within 24 months following the Termination Date:
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(i) the Executive shall, within five business days after
accepting such employment, notify Society of such fact,
(ii) as long as Society is obligated to continue to make
monthly compensation continuation payments under Paragraph (a) of
Section 2 of this Agreement, the Executive shall, by the fifth
business day of each month occurring after accepting such employment,
notify Society of the amount of cash compensation the Executive
received during the preceding month from the Executive's new employer,
(iii) each remaining monthly compensation continuation payment
under Paragraph (a) of Section 2 of this Agreement shall be reduced
(but in no event to less than zero) by the amount of cash compensation
received by the Executive from the Executive's employment with the
Executive's new employer during the month preceding the month in which
such payment is made, and
(iv) Society's obligation to provide the Executive with
benefits under Paragraphs (c) and (d) of Section 2 of this Agreement
shall cease on the date that the Executive commences Full-time
Employment with an Unaffiliated Employer instead of at the end of the
24 month period specified in Paragraphs (c) and (d) of Section 2 of
this Agreement; at each place in such Paragraphs (c) and (d) that
there is a reference to a 24 month period, the reference shall be
deemed to be to the period from the Termination Date to the
commencement date of Full-time Employment with an Unaffiliated
Employer; and if Society has an obligation to make a lump-sum payment
under clauses (x) or (y) of Paragraph (d) of Section 2, such lump-sum
payment shall be made within 45 days after the date that the Executive
commences Full-time Employment with an Unaffiliated Employer
for the period from the Termination Date to such commencement date.
5. NO EFFECT ON OTHER PLANS OR RIGHTS. The provisions of this
Agreement, and any payment provided for hereunder, shall not reduce any amounts
otherwise payable, or in any way diminish the Executive's rights, or rights
which would accrue solely as a result of the passage of
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time, under any incentive compensation plan, stock option or stock appreciation
rights plan, retirement or supplemental retirement plan, stock purchase and
savings plan, disability or insurance plans, or other similar contract, plan or
arrangement of Society or any Subsidiary. If the Executive becomes entitled to
receive any payments under this Agreement as a result of termination of the
Executive's employment following a Change of Control, those payments shall be
in lieu of any and all other claims or rights that the Executive may have for
severance, separation, and/or salary continuation pay upon that termination of
the Executive's employment.
6. INDEMNIFICATION. Society shall indemnify the Executive, to the full
extent permitted or authorized by the Ohio General Corporation Law as it may
from time to time be amended, if the Executive is made or threatened to be
made a party to any threatened, pending, or completed action, suit, or
proceeding, whether civil, criminal, administrative, or investigative, by
reason of the fact that the Executive is or was a director, officer, or
employee of Society or any Subsidiary, or is or was serving at the request of
Society or any Subsidiary as a director, trustee, officer, or employee of a
bank, corporation, partnership, joint venture, trust, or other enterprise. The
indemnification provided by this Section 6 shall not be deemed exclusive of any
other rights to which the Executive may be entitled under the articles of
incorporation or the
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regulations of Society or of any Subsidiary, or any agreement, vote of
shareholders or disinterested directors, or otherwise, both as to action in the
Executive's official capacity and as to action in another capacity while
holding such office, and shall continue as to the Executive after the Executive
has ceased to be a director, trustee, officer, or employee and shall inure to
the benefit of the heirs, executors, and administrators of the Executive.
7. DISABILITY. If, after a Change of Control and prior to the
Termination Date, the Executive is unable to perform services for Society or
any Subsidiary for any period by reason of disability of the Executive, as a
result of accidental bodily injury or sickness, Society will pay and provide to
the Executive all compensation and benefits to which the Executive would have
been entitled had the Executive continued to be actively employed by Society
through the earliest of the following dates: (a) the first date on which the
Executive is no longer so disabled to such an extent that the Executive is
unable to perform services for Society, (b) the date on which the Executive
becomes eligible for payment of long term disability benefits under the Society
Long Term Disability Plan, (c) the date on which Society has paid and provided
24 months of compensation and benefits to the Executive during the Executive's
disability, or (d) the date of the Executive's death.
8. EXCESS PARACHUTE PAYMENT REDUCTION. Anything in this
Agreement to the contrary notwithstanding, in
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the event it shall be determined that any payment or distribution by Society or
any of its Subsidiaries to or for the benefit of the Executive (whether paid or
payable or distributed or distributable pursuant to the terms of this Agreement
or otherwise) (a "Payment") would be nondeductible by Society for Federal
income tax purposes because of Section 280G of the Internal Revenue Code and
applicable regulations promulgated thereunder, then the aggregate present value
of amounts payable or distributable to or for the benefit of the Executive
pursuant to this Agreement (such payments or distributions pursuant to this
Agreement are hereinafter referred to as "Agreement Payments") shall be reduced
(but not below zero) to the Reduced Amount. The "Reduced Amount" shall be an
amount expressed in present value which maximizes the aggregate present value
of Agreement Payments without causing any Payment to be nondeductible by
Society because of Section 280G of the Internal Revenue Code and applicable
regulations promulgated thereunder. For purposes of this Section 8, present
value shall be determined in accordance with Section 280G(d)(4) of the Internal
Revenue Code and applicable regulations promulgated thereunder. All
determinations required to be made under this Section 8 shall be made by the
Accounting Firm which shall provide detailed supporting calculations both to
Society and the Executive within 30 days after the Termination Date or such
earlier time as is requested by Society. Society and the Executive shall
cooperate with each other
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and the Accounting Firm and will provide necessary information so that the
Accounting Firm may make all such determinations. All such determinations by
the Accounting Firm shall be final and binding upon Society and the Executive.
The Executive shall determine which of the Agreement Payments (or, at the
election of the Executive, other payments) shall be eliminated or reduced
consistent with the requirements of this Section 8, provided that, if the
Executive does not make such determination within 20 days of the receipt of the
calculations made by the Accounting Firm, Society shall elect which of the
Agreement Payments shall be eliminated or reduced consistent with the
requirements of this Section 8 and shall notify the Executive promptly of such
election. As a result of the uncertainty in the application of Section 280G of
the Internal Revenue Code and applicable regulations promulgated thereunder at
the time of the initial determination by the Accounting Firm hereunder, it is
possible that Agreement Payments will be made by Society which should not have
been made ("Overpayment") or that additional Agreement Payments will not be
made by Society which could have been made ("Underpayment"), in each case,
consistent with the calculations required to be made hereunder. In the event
that the Accounting Firm or a court of competent jurisdiction (in a final
judgment as to which the time for appeal has lapsed or no appeal is available)
determines at any time that an Overpayment has been made, any such Overpayment
shall be
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treated for all purposes as a loan to the Executive which the Executive shall
repay to Society together with interest at the applicable short-term Federal
rate provided for in Section 1274(d)(1) of the Internal Revenue Code,
compounded semi-annually; provided, however, that no amount shall be payable by
the Executive to Society (or if paid by the Executive to Society, such payment
shall be returned to the Executive) if and to the extent such payment would not
reduce the amount which is subject to taxation under Section 4999 of the
Internal Revenue Code. In the event that the Accounting Firm or a court of
competent jurisdiction (in a final judgment as to which the time for appeal has
lapsed or no appeal is available) determines at any time that an Underpayment
has occurred, any such Underpayment shall be promptly paid by Society to or for
the benefit of the Executive together with interest at the applicable
short-term Federal rate provided for in Section 1274(d)(1) of the Internal
Revenue Code, compounded semi-annually.
9. TAXES; WITHHOLDING OF TAXES. Without limiting the right of
Society or its Subsidiary to withhold taxes pursuant to this Section, the
Executive shall be responsible for all income, excise, and other taxes
(federal, state, city, or other) imposed on or incurred by the Executive as a
result of receiving the payments and benefits provided in this Agreement,
including, without limitation, the payments and benefits provided under Section
2 of this Agreement. Society or its Subsidiary may withhold from any
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amounts payable under this Agreement all federal, state, city, or other taxes
as Society shall determine to be required pursuant to any law or government
regulation or ruling.
10. SUCCESSOR TO SOCIETY. Society will not consolidate with or
merge into any other corporation, or transfer all or substantially all of its
assets to another corporation or bank, unless such other corporation or bank
shall assume this Agreement in a signed writing and deliver a copy thereof to
the Executive. Upon such assumption the successor corporation or bank shall
become obligated to perform the obligations of Society under this Agreement,
and the term "Society" as used in this Agreement shall be deemed to refer to
such successor corporation or bank.
11. PAYMENTS TO CONTINUE AFTER EXECUTIVE'S DEATH. If, at the
time of the Executive's death, the Executive is entitled to receive payments
under this Agreement, all amounts still payable in accordance with the terms of
this Agreement shall be paid to the individual or trust designated in a writing
delivered to Society by the Executive prior to the Executive's death (with the
Executive having the right to change from time to time such designation by
delivering to Society prior to the Executive's death a new written designation)
or, if there is no such designation, to the Executive's estate. As provided in
the preceding sentence, this Agreement will inure to the benefit of and be
enforceable by the Executive's personal
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representatives, executors, administrators, successors, heirs, and designees.
12. TERM OF THIS AGREEMENT. This Agreement shall be effective
immediately and shall continue in full force and effect until terminated as
provided in this Section 12.
(a) This Agreement shall automatically terminate on the first
date occurring before a Change of Control on which both: (i) the
Executive is neither an elected officer of Society nor an elected
officer of any Subsidiary; and (ii) it is not contemplated that the
Executive will be elected an officer of Society or any Subsidiary
within 60 days thereafter; provided, however, that any termination of
employment of the Executive or removal of the Executive as an elected
officer done primarily in contemplation of a Change of Control shall
be deemed to be a termination or removal of the Executive as of
immediately after such Change of Control, if such Change of Control in
fact occurs, for purposes of this Agreement.
(b) Before a Change of Control, Society may terminate this
Agreement by giving the Executive not less than twelve months' prior
written notice of its intention to terminate this Agreement; provided,
however, that any such notice of intention to terminate shall not be
effective if a Change of Control occurs during such twelve month
period, and, provided further,
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that Society shall in no event give a notice under this Paragraph (b)
prior to February 22, 1995.
After a Change of Control, this Agreement may not be terminated. However, in
the event the Executive's employment with Society and its Subsidiaries
continues for two years or more following the occurrence of a Change of
Control, then, for all purposes of this Agreement, such Change of Control shall
thereafter be treated as if it never occurred.
13. NOTICES. For purposes of this Agreement, notices and all
other communications provided for in this 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 Society or a Subsidiary:
Society Corporation
000 Xxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attention: Secretary
If to the Executive:
___________________________
___________________________
___________________________
___________________________
or such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
14. EMPLOYMENT RIGHTS. Nothing expressed or implied in this
Agreement shall create any right or duty on the part of Society or the
Executive to have the Executive
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continue as an officer of Society or a Subsidiary or to remain in the
employment of Society or a Subsidiary.
15. ADMINISTRATION. Society shall be responsible for the general
administration of this Agreement and for making payments under this Agreement.
All payments under this Agreement shall be made solely from the general assets
of Society or one of its Subsidiaries, and the Executive shall have the rights
of an unsecured general creditor of Society. All expenses incurred to or costs
of the Accounting Firm are the responsibility of Society.
16. CLAIMS REVIEW PROCEDURE. Whenever Society decides for
whatever reason to deny, whether in whole or in part, a claim for benefits
under this Agreement by the Executive, Society shall transmit a written notice
of its decision to the Executive, which notice shall be written in a manner
calculated to be understood by the Executive and shall contain a statement of
the specific reasons for the denial of the claim and a statement advising the
Executive that, within 60 days of the date on which the Executive receives such
notice, the Executive may obtain review of the decision of Society in
accordance with the procedures hereinafter set forth. Within such 60-day
period, the Executive or the Executive's authorized representative may request
that the claim denial be reviewed by filing with Society a written request
therefor, which request shall contain the following information:
(i) the date on which the request was filed with Society,
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(ii) the specific portions of the denial of the Executive's
claim which the Executive requests Society to review, and
(iii) any written material which the Executive desires Society
to examine.
Within 30 days of the date specified in clause (i) of this Section, Society
shall conduct a full and fair review of its decision to deny the Executive's
claim for benefits and deliver to the Executive its written decision on review,
written in a manner calculated to be understood by the Executive, specifying
the reasons and the Agreement provisions upon which its decision is based.
Nothing in this Section shall be construed as limiting or restricting the
Executive's right to institute legal proceedings in a court of competent
jurisdiction to enforce this Agreement after complying with the procedures set
forth in this Section or as limiting or restricting the scope of the court's
review (which review shall be de novo); provided, further, that the failure of
the Executive to comply with the procedures set forth in this Section shall not
bar or prohibit the subsequent compliance by the Executive with those
procedures and thereafter the Executive shall have the right to institute legal
proceedings to enforce this Agreement.
17. VALIDITY. 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.
18. MISCELLANEOUS. No provision of this Agreement may be
modified, waived, or discharged unless such
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waiver, modification, or discharge is agreed to in a writing signed by the
Executive and Society. No waiver by either party hereto at any time of any
breach by the other party 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 time or at any prior
or subsequent time. No agreement or representation, oral or otherwise, express
or implied, with respect to the subject matter hereof has been made by either
party which is not set forth expressly in this Agreement. This Agreement shall
be governed by and construed in accordance with the laws of the State of Ohio.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
SOCIETY CORPORATION
By_____________________
Xxxxxx X. Xxxxxxxxx
Chairman of the Board and
Chief Executive Officer
THE "EXECUTIVE"
________________________
_____________ (type name)
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