Exhibit 10(k)
Form of
XxXxxxxx'x Corporation
Tier I
Change of Control Employment Agreement
(Authorized by the Board of Directors and expected to be entered
into between the Company and certain key executives)
XxXxxxxx'x Corporation
Tier I
Change of Control Employment Agreement
THIS AGREEMENT dated as of _______, 2002 (the "Agreement Date") is made
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by and among XxXxxxxx'x Corporation, a Delaware corporation (the "Company"), and
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___________ ("Executive").
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RECITALS
The Company has determined that it is in the best interests of the
Company and its stockholders to assure that the Company will have the continued
service of Executive. The Company also believes it is imperative to reduce the
distraction of Executive that would result from the personal uncertainties
caused by a pending or threatened change of control of the Company, to encourage
Executive's full attention and dedication to the Company, and to provide
Executive with compensation and benefits arrangements upon a change of control
which ensure that the expectations of Executive will be satisfied and are
competitive with those of similarly-situated corporations. This Agreement is
intended to accomplish these objectives.
ARTICLE I.
CERTAIN DEFINITIONS
As used in this Agreement, the terms specified below shall have the
following meanings:
1.1 "Accrued Annual Bonus" means the amount of any Annual Bonus earned
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but not yet paid with respect to the Company's latest fiscal year ended prior to
the Termination Date.
1.2 "Accrued Base Salary" means the amount of Executive's Base Salary
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that is earned but not yet paid as of the Termination Date.
1.3 "Accrued Obligations" means, as of any date, the sum of Executive's
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Accrued Base Salary, Accrued Annual Bonus, any accrued but unpaid vacation pay,
and any other amounts and benefits which are then due to be paid or provided to
Executive by the Company, but have not yet been paid or provided (as
applicable).
1.4 "Agreement Date" -- see the introductory paragraph of this
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Agreement.
1.5 "Agreement Term" means the period commencing on the Agreement Date
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and ending on the third anniversary of the Agreement Date or, if later, the date
to which the Agreement Term is extended under the following sentence, or, if
earlier, as terminated under Section 9.4. Commencing on the first anniversary of
the Agreement Date, the Agreement Term shall automatically be extended on such
date and on each day thereafter by one day until, at any
time after the first anniversary of the Agreement Date, the Company delivers
written notice (an "Expiration Notice") to Executive that the Agreement shall
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expire on a date specified in the Expiration Notice (the "Expiration Date");
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provided that such date is not prior to the last day of the Agreement Term (as
extended); provided further, however, that if an Effective Date or an Imminent
Change Date occurs before the Expiration Date specified in the Expiration
Notice, then such Expiration Notice shall be void and of no further effect.
1.6 "Annual Bonus" -- see Section 2.2(b).
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1.7 "Annual Performance Period" -- see Section 2.2(b).
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1.8 "Article" means an article of this Agreement.
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1.9 "Base Salary" -- see Section 2.2(a).
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1.10 "Beneficial Ownership" has the meaning specified in Rule 13d-3 of
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the SEC under Exchange Act for a "Beneficial Owner."
1.11 "Beneficiary" -- see Section 10.3.
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1.12 "Board" means the Company's Board of Directors.
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1.13 "Bonus Plan" -- see Section 2.2(b).
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1.14 "Business Combination" means a reorganization, merger, statutory
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share exchange or consolidation or similar corporate transaction involving the
Company and/or any entity controlled by the Company, or a sale or other
disposition of all or substantially all of the assets of the Company, or the
acquisition of assets or stock of another entity by the Company or any entity
controlled by the Company.
1.15 "Cause" means any one or more of the following:
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(a) Executive's conviction of a felony or other crime involving
fraud, dishonesty or moral turpitude, excluding Limited Vicarious
Liability;
(b) Executive's willful or reckless material misconduct in the
performance of Executive's duties;
(c) Executive's willful habitual neglect of material duties; or
(d) Executive's willful or intentional material breach of this
Agreement;
provided, however, that for purposes of clauses (b), (c), and (d), Cause shall
not include any one or more of the following:
(i) bad judgment or negligence;
(ii) any act or omission believed by Executive in good faith
to have been in or not opposed to the interest of the Company
(without intent of Executive
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to gain, directly or indirectly, a profit to which Executive was
not legally entitled);
(iii) any act or omission with respect to which a
determination could properly have been made by the Board that
Executive met the applicable standard of conduct for
indemnification or reimbursement under the Company's by-laws, any
applicable indemnification agreement, or applicable law, in each
case in effect at the time of such act or omission; or
(iv) any act or omission with respect to which the Company
gives Executive a Notice of Consideration more than six (6)
months after the earliest date on which any member of the Board,
not a party to the act or omission, knew or should have known of
such act or omission; and
further provided that, if a breach of this Agreement involved an act, or a
failure to act, which was done, or omitted to be done, by Executive in good
faith and with a reasonable belief that Executive's act, or failure to act, was
in the best interests of the Company or was required by applicable law or
administrative regulation, such breach shall not constitute Cause if, within
thirty (30) days after Executive is given written notice of such breach that
specifically refers to this Section, Executive cures such breach to the fullest
extent that it is curable.
1.16 "Change of Control" means the happening of any of the following
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events:
(a) the acquisition by any Person of "beneficial ownership"
(within the meaning of Rule 13d-3 promulgated under the 0000 Xxx) of
20% or more of either (A) the then-outstanding shares of Stock
("Outstanding Company Common Stock") or (B) the combined voting power
of the then-outstanding voting securities of the Company entitled to
vote generally in the election of directors (the "Outstanding Company
Voting Securities"); provided, however, that, for purposes of this
Section 1.16(a), the following acquisitions shall not constitute a
Change of Control: (1) any acquisition directly from the Company, (2)
any acquisition by the Company, (3) any acquisition by any employee
benefit plan (or related trust) sponsored or maintained by the Company
or any entity controlled by the Company, or (4) any acquisition by any
entity pursuant to a transaction that complies with Sections
1.16(c)(i), (ii) and (iii); or
(b) individuals who, as of the date hereof, constitute the Board
(the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming
a director subsequent to the date hereof whose election, or nomination
for election by the Company's shareholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board;
or
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(c) consummation of a reorganization, merger, statutory share
exchange of consolidation or similar corporate transaction involving
the Company and/or any entity controlled by the Company, or a sale or
other disposition of all or substantially all of the assets of the
Company, or the acquisition of assets or stock of another entity by
the Company or any entity controlled by the Company (each, a "Business
Combination"), in each case, unless, following such Business
Combination, (i) all or substantially all of the individuals and
entities that were the beneficial owners of the Outstanding Company
Common Stock and Outstanding Company Voting Securities immediately
prior to such Business Combination beneficially own, directly or
indirectly, more than 60% of the then-outstanding shares of common
stock and the combined voting power of the then-outstanding voting
securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Business
Combination (including, without limitation, an entity that, as a
result of such transaction, owns the Company or all or substantially
all of the Company's assets either directly or through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (ii) no Person (excluding any entity
resulting from such Business Combination or any employee benefit plan
(or related trust) of the Company or such entity resulting from such
Business Combination) beneficially owns, directly or indirectly, 20%
or more of, respectfully, the then-outstanding shares of common stock
of the corporation resulting from such Business Combination or the
combined voting power of the then-outstanding voting securities of
such corporation, except to the extent that such ownership existed
prior to the Business Combination, and (iii) at least a majority of
the members of the board of directors of the entity resulting from
such Business Combination were members of the Incumbent Board at the
time of the execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or
(d) approval by the shareholders of the Company of a complete
liquidation or dissolution of the Company.
1.17 "Code" means the Internal Revenue Code of 1986, as amended.
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1.18 "Company" means XxXxxxxx'x Corporation.
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1.19 "Company Certificate" -- see Section 5.1(a).
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1.20 "Company Counsel Opinion" -- see Section 5.5.
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1.21 "Confidential Information" means any information not generally
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known in the relevant trade or industry of the Company, which was obtained from
the Company, or which was learned, discovered, developed, conceived, originated
or prepared during or as a result of the performance of any services by
Executive on behalf of the Company and which:
(a) relates to one or more of the following:
(i) trade secrets of the Company or any customer or
supplier of the Company;
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(ii) existing or contemplated products, services,
technology, designs, processes, formulae, algorithms, research or
product developments of the Company or any customer or supplier
of the Company;
(iii) business plans, sales or marketing methods, methods of
doing business, customer lists, customer usages and/or
requirements, supplier information of the Company or any customer
or supplier of the Company; or
(iv) information obtained by the Company from a third party
and which the Company is required to preserve as confidential
pursuant to a confidentiality agreement, applicable law or court
or administrative order;
(b) the Company or any customer or supplier of the Company may
reasonably have the right to protect by patent, copyright or by
keeping it secret and confidential; or
(c) otherwise offers the Company a competitive advantage in the
relevant industry or in any other business in which the Company is
engaged.
Confidential Information does not include any information that is or may become
publicly known other than through the improper actions of Executive.
1.22 "Consummation Date" means the date upon which a Business
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Combination is consummated.
1.23 "Disability" means any medically determinable physical or mental
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impairment that has lasted for a continuous period of not less than six (6)
months and can be expected to be permanent or of indefinite duration, and that
renders Executive unable to perform the duties required under this Agreement.
1.24 "Disability Effective Date" -- see Section 3.1.
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1.25 "Effective Date" means each date on which a Change of Control
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first occurs during the Agreement Term.
1.26 "Employer Defined Contribution Plan Contribution" means the
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product of (i) the average annual percentage of Executive's annual base salary
paid within the three-year period immediately preceding the Effective Date by
the Company to or for the benefit of Executive as an employer contribution under
the Company's Non-Qualified Plans and Qualified Plans which are defined
contribution plans on behalf of Executive, multiplied by (ii) Executive's Base
Salary as of the Termination Date or, if greater, during the 12-month period
immediately preceding the Effective Date.
1.27 "Exchange Act" means the Securities Exchange Act of 1934.
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1.28 "Excise Taxes" - - see Section 5.1(a).
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1.29 "Executive Counsel Opinion" - - see Section 5.5.
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1.30 "Executive Retention Plan" means the Company's Executive
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Retention Plan, as amended and restated March 20, 2001, and as further amended
from time to time.
1.31 "Executive Retention Plan Benefits" means the sum of the cash
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severance benefits, if any, paid or payable to Executive pursuant to Section
7.01 of the Company's Executive Retention Plan.
1.32 "Executive's Gross-Up Determination" - - see Section 5.2(a).
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1.33 "Good Reason" means the occurrence of any one or more of the
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following actions or omissions that, unless otherwise specified, occurs during a
Post-Change Employment Period:
(a) any failure to pay Executive's Base Salary or Annual Bonus in
violation of Section 2.2 or any failure to increase Executive's Base
Salary to the extent, if any, required by such Section;
(b) any failure by the Company to comply with any provision of
Article II;
(c) any material adverse change in Executive's position
(including offices, titles, reporting requirements or
responsibilities), authority, duties or other terms and conditions of
Executive's employment;
(d) requiring Executive to be based at any office or location
other than the location specified in Section 2.1(a);
(e) any material breach of this Agreement by the Company;
(f) any Termination of Employment by the Company that purports to
be for Cause, but is not in full compliance with all of the
substantive and procedural requirements of this Agreement (any such
purported termination shall be treated as a Termination of Employment
without Cause for all purposes of this Agreement);
(g) the failure at any time of a successor to the Company or a
Parent Corporation of a successor to the Company explicitly to assume
and agree to be bound by this Agreement; or
(h) a Termination of Employment by Executive for any reason or no
reason at any time during the 30-day period commencing on the first
anniversary of the Effective Date.
Notwithstanding the foregoing, in the case of the events or circumstances
constituting Good Reason described in (a) through (e), above, Executive may
terminate for Good Reason only if the Company fails to cure such events or
circumstances within thirty (30) days after receiving written notice from
Executive of Executive's intent to terminate for Good Reason. No such written
notice or opportunity to cure must be provided by Executive if Executive
terminates for Good Reason as provided in (f) through (h), above, or in the
event that the Company has caused repeated events or circumstances described in
(a) through (e), above, or if the Company's
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action(s) and/or omission(s) entitling Executive to terminate for Good Reason
were either intentional or willful.
1.34 "Gross-up Multiple" -- see Section 5.4.
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1.35 "Gross-up Payment" -- see Section 5.1(a).
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1.36 "Imminent Change Date" means any date on which one or more of the
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following occurs (i) a presentation to the Company's stockholders generally or
any of the Company's directors or executive officers of a proposal or offer
which, if consummated, would be a Change of Control, (ii) the public
announcement (whether by advertisement, press release, press interview, public
statement, SEC filing or otherwise) of a proposal or offer which if consummated
would be a Change of Control, or (iii) such proposal or offer remains effective
and unrevoked.
1.37 "Imminent Change Period" means the period commencing on the
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Imminent Change Date and ending on the earlier to occur of (a) a Change of
Control or (b) the date the offer or proposal for a Change of Control is no
longer effective or has been revoked.
1.38 "Including" means including without limitation.
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1.39 "Incumbent Board" means, as of any specified baseline date,
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individuals then serving as members of the Board who were members of the Board
as of the date immediately preceding such baseline date; provided that any
subsequently-appointed or elected member of the Board whose election, or
nomination for election by stockholders of the Company or the Surviving
Corporation, as applicable, was approved by a vote or written consent of at
least two-thirds of the directors then comprising the Incumbent Board shall also
thereafter be considered to be on the Incumbent Board, unless the initial
assumption of office of such subsequently-elected or appointed director was in
connection with (i) an actual or threatened election contest, including a
consent solicitation, relating to the election or removal of one or more members
of the Board, (ii) a "tender offer" (as such term is used in Section 14(d) of
the Exchange Act), or (iii) a proposed Business Combination.
1.40 "IRS" means the Internal Revenue Service.
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1.41 "Limited Vicarious Liability" means any liability which is (i)
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based on acts of the Company for which Executive is responsible solely as a
result of his office(s) with the Company and (ii) provided that (x) he was not
directly involved in such acts and either had no prior knowledge of such
intended actions or promptly acted reasonably and in good faith to attempt to
prevent the acts causing such liability or (y) he did not have a reasonable
basis to believe that a law was being violated by such acts.
1.42 "Maximum Annual Bonus" means the maximum bonus amount achievable
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by Executive under a Bonus Plan for a given Annual Performance Period; provided,
that in no event shall such amount be less than the amount required to be paid
pursuant to Section 2.2(b).
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1.43 "Non-Competition and Release Agreement" is an agreement, in
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substantially the form attached hereto in Annex A, executed by and between
Executive and the Company as a condition to Executive's receipt of the benefits
described in Section 4.1.
1.44 "Non-Qualified Plan" means any deferred compensation Plan that is
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not qualified under Section 401(a) of the Code.
1.45 "Notice of Consideration" - - see Section 3.3(b)(ii).
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1.46 "Notice of Termination" means a written notice given in
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accordance with Section 10.8 which sets forth (a) the specific termination
provision in this Agreement relied upon by the party giving such notice, (b) in
reasonable detail the specific facts and circumstances claimed to provide a
basis for such Termination of Employment, and (c) if the Termination Date is
other than the date of receipt of such Notice of Termination, the Termination
Date.
1.47 "Outstanding Company Common Stock" means Shares of Stock of the
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Company that are outstanding as of the Effective Date.
1.48 "Outstanding Company Voting Securities" means Voting Securities
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of the Company that are outstanding as of the Effective Date.
1.49 "Parent Corporation" means a corporation which owns 50% or more
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of the common stock or Voting Securities of any corporation and any other
corporation which owns any corporation which is in an unbroken chain of
corporations each of which owns successively in an unbroken chain of
corporations which includes the subject corporation.
1.50 "Person" means any individual, sole proprietorship, partnership,
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joint venture, limited liability company, trust, unincorporated organization,
association, corporation, institution, public benefit corporation, entity or
government instrumentality, division, agency, body or department.
1.51 "Plans" means plans, programs, or Policies of the Company.
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1.52 "Policies" means policies, practices or procedures of the
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Company.
1.53 "Post-Change Employment Period" means the period commencing on
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the Effective Date, or, if earlier, under Section 9.4, and ending on the third
anniversary of the Effective Date.
1.54 "Post-Retirement Medical Plan" means the XxXxxxxx'x Corporation
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Post-Retirement Medical Plan or any other similar plan or program hereinafter
sponsored by the Company or a subsidiary thereof.
1.55 "Potential Parachute Payments" - - see Section 5.1.
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1.56 "Pro-Rata Annual Bonus" means, in respect of the Company's fiscal
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year during which the Effective Date (in the case of a Pro-Rata Annual Bonus
payable pursuant to Section 2.3 hereof) or the Termination Date (in the case of
a Pro-Rata Annual Bonus payable pursuant to
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Article IV hereof), as applicable, occurs, an amount equal to the product of
Executive's Target Annual Bonus (determined as of the Effective Date or
Termination Date, as applicable) multiplied by a fraction, the numerator of
which equals the number of days from and including the first day of such fiscal
year through and including the Effective Date or the Termination Date, as
applicable, and the denominator of which equals 365.
1.57 "Pro-Rata LTIP Awards" means, with respect to each award under
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any long term incentive plan maintained by the Company that is outstanding on
the Effective Date (an "LTIP Award"), an amount equal to the product of (a) 100%
of the amount to which Executive would be entitled under such LTIP Award if the
performance goals established with respect to such LTIP Award were achieved at
the 100% level as of the end of the applicable performance period, multiplied by
(b) a fraction, the numerator of which equals the number of full and fractional
months from and including the first day of the performance period with respect
to such LTIP Award through and including the Effective Date, and the denominator
of which equals the total number of months in such performance period.
1.58 "Qualified Plan" means any plan, which meets the qualification
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requirements of Internal Revenue Service Code Section 401(a) or 403(a).
1.59 "SEC" means the Securities and Exchange Commission.
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1.60 "Severance Period" means a period equal to three years.
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1.61 "Surviving Corporation" means the corporation resulting from a
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Business Combination and any Parent Corporation of such corporation.
1.62 "Target Annual Bonus" as of a certain date means the amount equal
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to the product of Base Salary determined as of such date multiplied by the
percentage of such Base Salary to which Executive would have been entitled
immediately prior to such date under any Bonus Plan for the Annual Performance
Period for which the Annual Bonus is awarded if the performance goals
established pursuant to such Bonus Plan were achieved at the 100% level as of
the end of the Annual Performance Period.
1.63 "Taxes" means federal, state, local or other income or other
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taxes.
1.64 "Termination Date" means the date of the receipt of the Notice of
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Termination by Executive (if such Notice is given by the Company) or by the
Company (if such Notice is given by Executive), or any later date, not more than
fifteen (15) days after the giving of such Notice, specified in such Notice;
provided, however, that:
(a) if Executive's employment is terminated by reason of death or
Disability, the Termination Date shall be the date of Executive's
death or the Disability Effective Date (as defined in Section 3.1), as
applicable; and
(b) if no Notice of Termination is given, the Termination Date
shall be the last date on which Executive is employed by the Company.
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1.65 "Termination of Employment" means any termination of Executive's
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employment with the Company, whether such termination is initiated by the
Company or by Executive.
1.66 "Voting Securities" of a corporation means securities of such
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corporation that are entitled to vote generally in the election of directors of
such corporation, but not including any other class of securities of such
corporation that may have voting power by reason of the occurrence of a
contingency which contingency has not occurred.
ARTICLE II.
POST-CHANGE EMPLOYMENT PERIOD
2.1 Position and Duties.
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(a) During the Post-Change Employment Period, Executive's
position (including offices, titles, reporting requirements and
responsibilities), authority and duties shall be at least commensurate
in all material respects with the most significant of those held,
exercised and assigned at any time during the 90-day period
immediately before the Effective Date and Executive's services shall
be performed at the location where Executive was employed immediately
before the Effective Date or any other location no more than 30 miles
from such former location.
(b) During the Post-Change Employment Period (other than any
periods of vacation, sick leave or disability to which Executive is
entitled), Executive agrees to devote Executive's full attention and
time to the business and affairs of the Company and, to the extent
necessary to discharge the duties assigned to Executive in accordance
with this Agreement, to use Executive's best efforts to perform such
duties. During the Post-Change Employment Period, Executive may (i)
serve on corporate, civic or charitable boards or committees, (ii)
deliver lectures, fulfill speaking engagements or teach at educational
institutions, and (iii) manage personal investments, so long as such
activities are consistent with the Policies of the Company at the
Effective Date and do not significantly interfere with the performance
of Executive's duties under this Agreement. To the extent that any
such activities have been conducted by Executive immediately prior to
the Effective Date and were consistent with the Policies of the
Company at the Effective Date, the continued conduct of such
activities (or activities similar in nature and scope) after the
Effective Date shall not be deemed to interfere with the performance
of Executive's duties under this Agreement.
2.2 Compensation.
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(a) Base Salary. During the Post-Change Employment Period, the
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Company shall pay or cause to be paid to Executive an annual base
salary in cash, which shall be paid in a manner consistent with the
Company's payroll practices in effect immediately before the Effective
Date, at an annual rate not less than 12 times the highest monthly
base salary paid or payable to Executive by the Company in respect of
the 12-month period immediately before the Effective Date (such annual
rate salary, the "Base Salary"). During the Post-Change Employment
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Period, the Base Salary shall be reviewed at least
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annually and shall be increased at any time and from time to time as
shall be substantially consistent with increases in base salary
awarded to other peer executives of the Company. Any increase in Base
Salary shall not limit or reduce any other obligation of the Company
to Executive under this Agreement. After any such increase, the Base
Salary shall not be reduced and the term "Base Salary" shall
thereafter refer to the increased amount.
(b) Annual Bonus. In addition to Base Salary, the Company shall
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pay or cause to be paid to Executive a bonus (the "Annual Bonus") for
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each Annual Performance Period which ends during the Post-Change
Employment Period. "Annual Performance Period" means each period of
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time designated in accordance with any annual bonus arrangement (a
"Bonus Plan") which is based upon performance and approved by the
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Board or any committee of the Board, or in the absence of any Bonus
Plan or any such designated period of time, each calendar year;
provided, however, that the Annual Bonus paid to the Executive with
respect to the Company's fiscal year in which the Effective Date
occurs shall be reduced (but not below zero) by the amount of the
Pro-Rata Annual Bonus paid to Executive pursuant to Section 2.3. The
Annual Bonus shall be not less than the Target Annual Bonus determined
as of the Effective Date. In addition, the performance goals under the
Bonus Plan shall not be materially more difficult to achieve than the
performance goals in the Bonus Plan (or designated by the Board) in
effect during the Annual Performance Period immediately before the
Effective Date and the Maximum Annual Bonus shall not be less than the
maximum bonus achievable under the Bonus Plan (or designated by the
Board) during the Annual Performance Period ended immediately before
the Effective Date (or if higher, the Maximum Annual Bonus for the
Annual Performance Period that commenced immediately before the
Effective Date).
(c) Incentive, Savings and Retirement Plans. In addition to Base
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Salary and Annual Bonus, Executive shall be entitled to participate
during the Post-Change Employment Period in all incentive (including
long-term incentives), profit sharing, ESOP, 401(k), savings and
retirement Plans applicable to other peer executives of the Company,
but in no event shall such Plans provide Executive with incentive
(including long-term incentives), profit sharing, ESOP, 401(k),
savings and retirement benefits during the Post-Change Employment
Period which, in any case, are materially less favorable, in the
aggregate, than the most favorable of those provided by the Company
for Executive under such Plans as in effect at any time during the
12-month period immediately before the Effective Date.
(d) Welfare Benefit Plans. During the Post-Change Employment
---------------------
Period, Executive and Executive's family shall be eligible to
participate in, and receive all benefits under, welfare benefit Plans
provided by the Company (including medical, prescription, dental,
disability, salary continuance, individual life, group life, dependent
life, accidental death and travel accident insurance Plans) and
applicable to other peer executives of the Company and their families,
but in no event shall such Plans provide benefits during the
Post-Change Employment Period which are materially less favorable, in
the aggregate, than the most favorable of those provided to Executive
under such Plans as in effect at any time during the 12-month period
immediately before the Effective Date.
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(e) Fringe Benefits. During the Post-Change Employment Period,
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Executive shall be entitled to fringe benefits in accordance with the
most favorable Plans applicable to peer executives of the Company, but
in no event shall such Plans provide fringe benefits which in any case
are materially less favorable, in the aggregate, than the most
favorable of those provided by the Company to Executive under such
Plans in effect at any time during the 12-month period immediately
before the Effective Date.
(f) Expenses. During the Post-Change Employment Period,
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Executive shall be entitled to prompt reimbursement of all reasonable
employment-related expenses incurred by Executive upon the Company's
receipt of accountings in accordance with the most favorable Policies
applicable to peer executives of the Company, but in no event shall
such Policies be materially less favorable, in the aggregate, than the
most favorable of those provided by the Company for Executive under
such Policies in effect at any time during the 12-month period
immediately before the Effective Date.
(g) Office and Support Staff. During the Post-Change Employment
------------------------
Period, Executive shall be entitled to an office or offices of a size
and with furnishings and other appointments, and to secretarial and
other assistance in accordance with the most favorable Policies
applicable to peer executives of the Company, but in no event shall
such Policies be materially less favorable, in the aggregate, than the
most favorable of those provided by the Company for Executive under
such Policies in effect at any time during the 12-month period
immediately before the Effective Date.
(h) Vacation. During the Post-Change Employment Period,
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Executive shall be entitled to paid vacation in accordance with the
most favorable Policies applicable to peer executives of the Company,
but in no event shall such Policies be materially less favorable, in
the aggregate, than the most favorable of those provided by the
Company for Executive under such Policies in effect at any time during
the 12-month period immediately before the Effective Date.
2.3 Pro-Rata Annual Bonus. Within thirty (30) days after the
---------------------
Effective Date, the Company shall pay Executive a lump-sum cash payment equal to
the Pro-Rata Annual Bonus determined as of the Effective Date.
2.4 Pro-Rata Annual LTIP Awards. Within thirty (30) days after the
---------------------------
Effective Date, the Company shall pay Executive, with respect to each LTIP Award
that is outstanding on the Effective Date, a lump-sum cash payment equal to the
Pro-Rata LTIP Award determined as of the Effective Date and each such LTIP Award
shall be cancelled.
ARTICLE III.
TERMINATION OF EMPLOYMENT
3.1 Disability. During the Post-Change Employment Period, the Company
----------
may terminate Executive's employment because of Executive's Disability by giving
Executive or his legal representative, as applicable, (i) written notice in
accordance with Section 10.8 of the Company's intention to terminate Executive's
employment pursuant to this Section, and (ii) a
-12-
certification of Executive's Disability by a physician jointly selected by the
Company and the Executive; provided that if the Company and Executive cannot
reach agreement on the physician, the certification shall be by a panel of
physicians consisting of one physician selected by the Company, one physician
selected by the Executive and a third physician jointly selected by those two
physicians. Executive's employment shall terminate effective on the 30th day
(the "Disability Effective Date") after Executive's receipt of such notice
-------------------------
unless, before the Disability Effective Date, Executive shall have resumed the
full-time performance of Executive's duties.
3.2 Death. Executive's employment shall terminate automatically upon
-----
Executive's death during the Post-Change Employment Period.
3.3 Cause.
-----
(a) During the Post-Change Employment Period, the Company may
terminate Executive's employment for Cause solely in accordance with
all of the substantive and procedural provisions of this Section.
(b) The Company shall strictly observe each of the following
procedures in connection with any Termination of Employment for Cause:
(i) The issue of determining whether Executive's acts or
omissions satisfy the definition of "Cause" as set forth in
Section 1.15 and, if so, whether to terminate Executive's
employment for Cause shall be raised and discussed at a meeting
of the Board.
(ii) Not less than thirty (30) days prior to the date of
such meeting the Company shall provide Executive and each member
of the Board written notice (a "Notice of Consideration") of (x)
-----------------------
a detailed description of the acts or omissions alleged to
constitute Cause, (y) the date, time and location of such meeting
of the Board, and (z) Executive's rights under clause (iii)
below.
(iii) Executive shall have the opportunity to appear before
the Board at such meeting in person and, at Executive's option,
with legal counsel, and to present to the Board a written and/or
oral response to the Notice of Consideration.
(iv) Executive's employment may be terminated for Cause
only if (x) the acts or omissions specified in the Notice of
Consideration did in fact occur and do constitute Cause, (y) the
Board makes a specific determination to such effect and to the
effect that Executive's employment should be terminated for
Cause, and (z) the Company thereafter provides Executive with a
Notice of Termination which specifies in specific detail the
basis of such Termination of Employment for Cause and which
Notice shall be based upon one or more of the acts or omissions
set forth in the Notice of Consideration. The Board's
determination specified in clause (y) of the preceding sentence
shall require the affirmative vote of at least 75% of the members
of the Board.
(v) In the event that the issue of whether Executive was
properly terminated for Cause becomes a disputed issue in any
action or proceeding between
-13-
the Company and Executive, the Company shall, notwithstanding the
determination referenced in clause (iv) of this Section 3.3(b),
have the burden of establishing by clear and convincing evidence
that the actions or omissions specified in the Notice of
Termination did in fact occur, do constitute Cause, were the
basis for Executive's termination and that the Company has, in
each and every respect, satisfied the procedural requirements of
this Section 3.3(b).
3.4 Good Reason.
-----------
(a) During the Post-Change Employment Period, Executive may
terminate his or her employment for Good Reason in accordance with the
substantive and procedural provisions of this Section.
(b) In the event Executive determines there is Good Reason to
terminate, Executive shall notify the Company of the events
constituting such Good Reason by a Notice of Termination. A delay in
the delivery of such Notice of Termination or a failure by Executive
to include in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason shall not waive any right of
Executive under this Agreement or preclude Executive from asserting
such fact or circumstance in enforcing rights under this Agreement;
provided, that no act or omission by the Company shall qualify as Good
Reason if Executive's Termination of Employment occurs more than 12
months after Executive first obtains actual knowledge of such act or
omission.
(c) If the Termination Date occurs during any portion of a
Post-Change Employment Period, any reasonable determination by
Executive that any of the events specified in the definition of Good
Reason in Section 1.33 above, has occurred and constitutes Good Reason
shall be conclusive and binding for all purposes, unless the Company
establishes by clear and convincing evidence that Executive did not
have any reasonable basis for such determination.
(d) In the event that the Company conceals any act or omission
by the Company that occurs during the Post-Change Employment Period
and qualifies as Good Reason, any subsequent Termination of Employment
(whether by the Company or by Executive and regardless of the
circumstances of such termination) that occurs at any time after such
act or omission shall conclusively be deemed to be a Termination of
Employment by Executive for Good Reason, notwithstanding any provision
of this Agreement to the contrary.
3.5 Delivery of Non-Competition and Release Agreement. In the event
-------------------------------------------------
the Company terminates Executive's employment for any reason other than for
Cause or Disability, the Company shall, not later than the date it delivers the
Notice of Termination to Executive, present Executive with a Non-Competition and
Release Agreement for execution by Executive. In the event Executive terminates
his employment for Good Reason, the Company shall, not later than ten (10)
business days after the Company receives the Notice of Termination, present
Executive with a Non-Competition and Release Agreement for execution by
Executive.
-14-
ARTICLE IV.
COMPANY'S OBLIGATIONS UPON A TERMINATION OF EMPLOYMENT
4.1 If by Executive for Good Reason or by the Company Other Than for
----------------------------------------------------------------
Cause or Disability. If, during the Post-Change Employment Period, (i) the
-------------------
Company terminates Executive's employment other than for Cause or Disability, or
if Executive terminates employment for Good Reason, and (ii) Executive delivers
an executed Non-Competition and Release Agreement to the Company (and does not
rescind such agreement within the rescission period set forth in such
agreement), the Company's sole obligations to Executive under Articles II and IV
shall be as follows:
(a) The Company shall pay Executive, in addition to all vested rights
arising from Executive's employment as specified in Article II, a lump-sum
cash amount equal to the sum of the following:
(i) all Accrued Obligations;
(ii) Executive's Pro-Rata Annual Bonus reduced (but not below
zero) by the amount of any Annual Bonus paid to Executive, with
respect to the Company's fiscal year in which the Termination Date
occurs;
(iii) an amount equal to:
(A) the number of years in the Severance Period times the
sum of:
(I) Base Salary,
(II) the Target Annual Bonus, and
(III) Employer Defined Contribution Plan Contribution;
each determined as of the Termination Date, provided, however,
that any reduction in Executive's Base Salary or Target Annual
Bonus that would qualify as Good Reason shall be disregarded for
purposes of this clause.
Such lump-sum amount shall be paid no more than thirty (30) days after the
later of the Termination Date or the date on which Executive delivers an
executed Non-Competition and Release Agreement to the Company.
(b) Until a number of years subsequent to the Termination Date equal
to the length of the Severance Period or such later date as any Plan may
specify, the Company shall continue to provide to Executive and Executive's
family with medical and life insurance benefits which are at least as
favorable as the most favorable Plans of the Company applicable to other
peer executives and their families as of the Termination Date, but which
are in no event less favorable than the most favorable Plans of the Company
applicable to other peer executives and their families during the 12-month
period imme-
-15-
diately before the Effective Date. The cost of such medical and life
insurance benefits to Executive shall not exceed the cost of such benefits
to Executive immediately before the Termination Date or, if less, the
Effective Date. Executive's rights under this Section shall be in addition
to, and not in lieu of, any post-termination continuation coverage or
conversion rights Executive may have pursuant to applicable law, including
continuation coverage required by Section 4980 of the Code. Notwithstanding
any of the above, such medical benefits shall be secondary to any similar
medical benefits provided by Executive's subsequent employer.
(c) Until a number of years subsequent to the Termination Date equal
to the length of the Severance Period or such later date as any Plan may
specify, the Company shall continue to provide Executive with fringe and
other benefits which are at least as favorable as the most favorable Plans
of the Company applicable to other peer executives as of the Termination
Date, but which are in no event less favorable than the most favorable
Plans of the Company applicable to other peer executives during the
12-month period immediately before the Effective Date. Notwithstanding the
foregoing, in the case of an Executive who is receiving benefits under the
Company's short-term disability plan as of the Termination Date, the
Company must provide actual long term disability benefits or a cash amount
equal to the amount of benefits that Executive would have received under
such benefit plans.
(d) For purposes of determining Executive's eligibility under the
Company's Post-Retirement Medical Plan or any other plan or arrangement
providing retiree medical benefits, Executive shall be credited with a
length of service that includes both the period of Executive's actual
service and Executive's Severance Period. Executive shall also be treated
for purposes of the Company's Post-Retirement Medical Plan as having
already attained the age that Executive will attain upon the conclusion of
Executive's Severance Period.
(e) If Executive has a Termination of Employment and has completed at
least eight (8) years of service towards his entitlement to paid sabbatical
leave under the Company's policies concerning sabbatical leave (and has not
yet taken such sabbatical leave), Executive shall receive an additional
amount, in a lump sum payment, equal to eight (8) weeks of Executive's Base
Salary.
(f) If Executive is a participant in the Executive Retention Plan the
Executive will have the right to receive severance benefits under either
the Executive Retention Plan or this Agreement. Executive's election to
receive benefits under one arrangement will be a waiver of entitlement to
benefits under the other.
If Executive has a Termination of Employment that would entitle Executive
to benefits under this Section 4.1 but Executive fails to deliver an executed
Non-Competition and Release Agreement to the Company (or having delivered an
executed Non-Competition and Release Agreement rescinds such agreement during
the rescission period set forth in the Non-Competition and Release Agreement),
the Company's sole obligation to Executive under Articles II and IV shall be to
pay Executive a lump-sum cash amount equal to all Accrued Obligations determined
as of the Termination Date.
-16-
4.2 If by the Company for Cause. If the Company terminates Executive's
---------------------------
employment for Cause during the Post-Change Employment Period, the Company's
sole obligation to Executive under Articles II and IV shall be to pay Executive
a lump-sum cash amount equal to all Accrued Obligations determined as of the
Termination Date.
4.3 If by Executive Other Than for Good Reason. If Executive terminates
------------------------------------------
employment during the Post-Change Employment Period other than for Good Reason,
Disability or death, the Company's sole obligation to Executive under Articles
II and IV shall be to pay Executive a lump-sum cash amount equal to all Accrued
Obligations determined as of the Termination Date.
4.4 If by the Company for Disability. If the Company terminates Executive's
--------------------------------
employment by reason of Executive's Disability during the Post-Change Employment
Period, the Company's sole obligation to Executive under Articles II and IV
shall be as follows:
(a) to pay Executive a lump-sum cash amount equal to all Accrued
Obligations determined as of the Termination Date; and
(b) to provide Executive disability and other benefits after the
Termination Date that are not less than the most favorable of such benefits
then available under Plans of the Company to disabled peer executives of
the Company or, if more favorable, those such benefits provided by the
Company at any time during the 12-month period immediately preceding the
Effective Date.
4.5 If upon Death. If Executive's employment is terminated by reason of
-------------
Executive's death during the Post-Change Employment Period, the Company's sole
obligations to Executive under Articles II and IV shall be as follows:
(a) to pay Executive's estate or Beneficiary a lump-sum cash amount
equal to all Accrued Obligations; and
(b) to provide Executive's estate or Beneficiary survivor and other
benefits that are not less than the most favorable survivor and other
benefits then available under Plans of the Company to the estates or the
surviving families of peer executives of the Company or, if more favorable,
those such benefits provided by the Company at any time during the 12-month
period immediately preceding the Effective Date.
ARTICLE V.
CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY
5.1 Gross-up for Certain Taxes.
--------------------------
(a) If it is determined (by the reasonable computation of the Company's
independent auditors, which determinations shall be certified to by such
auditors and set forth in a written certificate ("Company Certificate")
-------------------
delivered to the Executive) that any benefit received or deemed received by
the Executive from the Company pursuant to this Agreement or otherwise
(collectively, the "Potential Parachute Payments") is or will be-
----------------------------
-17-
come subject to any excise tax under Section 4999 of the Code or any
similar tax payable under any United States federal, state, local or other
law (such excise tax and all such similar taxes collectively, "Excise
------
Taxes"), then the Company shall, immediately after such determination, pay
-----
the Executive an amount (the "Gross-up Payment") equal to the product of:
----------------
(i) the amount of such Excise Taxes
multiplied by
(ii) the Gross-up Multiple (as defined in Section 5.4).
The Gross-up Payment is intended to compensate the Executive for the Excise
Taxes and any federal, state, local or other income or excise taxes or
other taxes payable by the Executive with respect to the Gross-up Payment.
For all purposes of this Article V, Executive shall be deemed to be subject
to the highest effective marginal rate of Taxes.
The Executive or the Company may at any time request the preparation
and delivery to the Executive of a Certificate. The Company shall, in
addition to complying with Section 5.2, cause all determinations and
certifications under the Article to be made as soon as reasonably possible
and in adequate time to permit the Executive to prepare and file the
Executive's individual tax returns on a timely basis.
(b) Limitation on Gross-Up Payment. Notwithstanding any other
------------------------------
provision of this Article V, if the aggregate After-Tax Amount (defined
below) of the Potential Parachute Payments and Gross-up Payment that, but
for this Section (b), would be payable to Executive, does not exceed 110%
of the After-Tax Floor Amount (defined below), then no Gross-up Payment
shall be made to Executive and the aggregate amount of Potential Parachute
Payments payable to Executive shall be reduced (but not below the Floor
Amount, defined below) to the largest amount which would both (i) not cause
any Excise Tax to be payable by Executive and (ii) not cause any Potential
Parachute Payments to become nondeductible by the Company by reason of
Section 280G of the Code (or any successor provision).
(c) For purposes of this Agreement:
(i) "After-Tax Amount" means the portion of a specified amount
----------------
that would remain after payment of all Taxes paid or payable by
Executive in respect of such specified amount;
(ii) "Floor Amount" means the greatest pre-tax amount of
------------
Potential Parachute Payments that could be paid to Executive without
causing Executive to become liable for any Excise Taxes in connection
therewith; and
(iii) "After-Tax Floor Amount" means the After-Tax Amount of the
----------------------
Floor Amount.
-18-
5.2 Determination by the Executive.
------------------------------
(a) If the Company shall fail to deliver a Certificate to the
Executive (and to pay to the Executive the amount of the Gross-up Payment,
if any) within fourteen (14) days after receipt from the Executive of a
written request for a Certificate, or if at any time following receipt of a
Certificate the Executive disputes the amount of the Gross-up Payment set
forth therein, the Executive may elect to demand the payment of the amount
which the Executive, in accordance with an opinion of counsel to the
Executive ("Executive Counsel Opinion")(as defined in Section 5.5, below),
-------------------------
determines to be the Gross-up Payment. Any such demand by the Executive
shall be made by delivery to the Company of a written notice which
specifies the Gross-up Payment determined by the Executive and an Executive
Counsel Opinion regarding such Gross-up Payment (such written notice and
opinion collectively, the "Executive's Gross-Up Determination"). Within
----------------------------------
fourteen (14) days after delivery of the Executive's Gross-Up Determination
to the Company, the Company shall either (1) pay the Executive the Gross-up
Payment set forth in the Executive's Gross-Up Determination (less the
portion of such amount, if any, previously paid to the Executive by the
Company) or (2) deliver to the Executive a Certificate specifying the
Gross-up Payment determined by the Company's independent auditors, together
with an opinion of the Company's counsel ("Company Counsel Opinion" (as
-----------------------
defined in Section 5.5, below)), and pay the Executive the Gross-up Payment
specified in such Certificate. If for any reason the Company fails to
comply with clause (2) of the preceding sentence, the Gross-up Payment
specified in the Executive's Gross-Up Determination shall be final, binding
and controlling for all purposes.
(b) If the Executive does not make a request for, and the Company
does not deliver to the Executive, a Certificate, the Company shall be
deemed to have determined that no Gross-up Payment is due; provided that
the absence of such request by Executive or the Certificate by the Company
shall not preclude Executive from making such request at any future date.
5.3 Additional Gross-up Amounts. If, despite the initial conclusion of
---------------------------
the Company and/or the Executive that certain payments are either not subject to
Excise Taxes or not to be counted in determining whether other payments are
subject to Excise Taxes (any such item, a "Non-Parachute Item"), it is later
------------------
determined (pursuant to the subsequently-enacted provisions of the Code, final
regulations or published rulings of the IRS, final judgment of a court of
competent jurisdiction or the Company's independent auditors that any of the
Non-Parachute Items are subject to Excise Taxes, or are to be counted in
determining whether any payments are subject to Excise Taxes, with the result
that the amount of Excise Taxes payable by the Executive is greater or the
amount of the Excise Taxes due are greater for any other reason than the amount
determined by the Company or the Executive pursuant to Section 5.1 or 5.2, as
applicable, then the Company shall pay the Executive an amount (which shall also
be deemed a Gross-up Payment) equal to the product of:
(a) the sum of (1) such additional Excise Taxes, and (2) any
interest, fines, penalties, expenses or other costs incurred by the
Executive as a result of having taken a position in accordance with a
determination made pursuant to Section 5.1
-19-
multiplied by
(b) the Gross-up Multiple.
5.4 Gross-up Multiple. The Gross-up Multiple shall equal a fraction, the
-----------------
numerator of which is one (1.0), and the denominator of which is one (1.0) minus
the sum, expressed as a decimal fraction, of the effective marginal rates of all
federal, state, local and other income and other taxes and any Excise Taxes
applicable to the Gross-up Payment; provided that, if such sum exceeds 0.8, it
shall be deemed equal to 0.8 for purposes of this computation. (If different
effective marginal rates of tax are applicable to various portions of a Gross-up
Payment, the weighted average of such rates shall be used.)
5.5 Opinion of Counsel. "Executive Counsel Opinion" means a legal opinion
------------------
of nationally recognized executive compensation counsel that there is a
reasonable basis to support a conclusion that the Gross-up Payment determined by
the Executive has been calculated in accord with this Article and applicable
law. "Company Counsel Opinion" means a legal opinion of nationally recognized
executive compensation counsel that (a) there is a reasonable basis to support a
conclusion that the Gross-up Payment set forth of the Certificate of Company's
independent auditors has been calculated in accord with this Article and
applicable law, and (b) there is no reasonable basis for the calculation of the
Gross-up Payment determined by the Executive.
5.6 Amount Increased or Contested. The Executive shall notify the Company
-----------------------------
in writing of any claim by the IRS or other taxing authority that, if
successful, would require the payment by the Company of a Gross-up Payment. Such
notice shall include the nature of such claim and the date on which such claim
is due to be paid. The Executive shall give such notice as soon as practicable,
but no later than ten (10) business days, after the Executive first obtains
actual knowledge of such claim; provided, however, that any failure to give or
delay in giving such notice shall affect the Company's obligations under this
Article only if and to the extent that such failure results in actual prejudice
to the Company. The Executive shall not pay such claim less than thirty (30)
days after the Executive gives such notice to the Company (or, if sooner, the
date on which payment of such claim is due). If the Company notifies the
Executive in writing before the expiration of such period that it desires to
contest such claim, the Executive shall:
(a) give the Company any information that it reasonably requests
relating to such claim;
(b) take such action in connection with contesting such claim as the
Company reasonably requests in writing from time to time, including,
without limitation, accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company;
(c) cooperate with the Company in good faith to contest such claim;
and
(d) permit the Company to participate in any proceedings relating to
such claim;
-20-
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax, including related interest
and penalties, imposed as a result of such representation and payment of costs
and expenses. Without limiting the foregoing, the Company shall control all
proceedings in connection with such contest and, at its sole option, may pursue
or forego any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Executive to pay the tax claimed and xxx for a
refund or contest the claim in any permissible manner. The Executive agrees to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs the
Executive to pay such claim and xxx for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free basis and shall
indemnify the Executive, on an after-tax basis, for any Excise Tax or Taxes,
including related interest or penalties, imposed with respect to such advance;
and further provided that any extension of the statute of limitations relating
to payment of Taxes for the taxable year of the Executive with respect to which
such contested amount is claimed to be due is limited solely to such contested
amount. The Company's control of the contest shall be limited to issues with
respect to which a Gross-up Payment would be payable. The Executive shall in
Executive's discretion be entitled to settle or contest, as the case may be, any
other issue raised by the IRS or other taxing authority.
5.7 Refunds. If, after the receipt by the Executive of an amount paid or
-------
advanced by the Company pursuant to Section 5.1, 5.3 and/or 5.6, the Executive
becomes entitled to receive any refund with respect to such claim or amount, the
Executive shall (subject to the Company's complying with the requirements of
Section 5.6) promptly pay the Company the amount of such refund (together with
any interest paid or credited thereon after taxes applicable thereto). If, after
the receipt by the Executive of an amount paid or advanced by the Company
pursuant to Section 5.1, 5.3 and/or 5.6, a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and the
Company does not notify the Executive in writing of its intent to contest such
determination before the earlier of (a) the expiration of thirty (30) days after
such determination; or (b) the date such determination becomes final and
non-appealable, then such advance shall be forgiven and shall not be required to
be repaid and the Company shall pay Executive an amount sufficient to provide
Executive with an After-Tax Amount equal to any amount of Taxes and Excise Taxes
which Executive shall incur with respect to such amount being forgiven. Any
contest of a denial of refund shall be controlled by Section 5.6.
ARTICLE VI.
EXPENSES AND INTEREST
6.1 Legal Fees and Other Expenses.
-----------------------------
(a) If Executive incurs legal fees or other expenses (including
expert witness and accounting fees) on or after the Effective Date, in an
effort to enforce this Agreement, or to secure, preserve, establish
entitlement to, or obtain benefits under this Agreement (including the fees
and other expenses of Executive's legal counsel in connec-
-21-
tion with the delivery of an Executive Counsel Opinion), the Company shall,
regardless of the outcome of such effort, reimburse Executive on a current
basis (in accordance with Section 6.1(b)) for such reasonable fees and
expenses, and shall also pay Executive an additional payment such that,
after payment of all Taxes and Excise Taxes on such amount, there remains a
balance sufficient to pay all such fees and other expenses.
(b) Reimbursement of legal fees and expenses and Gross-up Payments
shall be made monthly within ten (10) days after Executive's written
submission of a request for reimbursement together with evidence that such
fees and expenses were incurred.
(c) If Executive does not prevail (after exhaustion of all available
judicial remedies) in respect of a claim by Executive or by the Company
hereunder, and the Company establishes before a court of competent
jurisdiction, by clear and convincing evidence, that Executive had no
reasonable basis for his claim hereunder, or for his response to the
Company's claim hereunder, or acted in bad faith, no further reimbursement
for legal fees and expenses shall be due to Executive in respect of such
claim and Executive shall refund any amounts previously reimbursed
hereunder with respect to such claim.
(d) If there is a dispute between the Executive and the Company as to
Executive's rights to reimbursement of legal or other fees and expenses
under this Agreement or the amount of such reimbursement, any amount of
reimbursement requested by Executive and accompanied by legal opinion of
nationally recognized executive compensation counsel that such amount
should be paid under the Agreement shall be final, binding and controlling
on the Company unless and to the extent the Company establishes otherwise
by clear and convincing evidence.
6.2 Interest. If the Company does not pay any amount due to Executive
--------
under this Agreement within five (5) business days after such amount first
became due and owing, interest shall accrue on such amount from the date it
became due and owing until the date of payment at an annual rate equal to 200
basis points above the base commercial lending rate published in The Wall Street
Journal in effect from time to time during the period of such nonpayment.
ARTICLE VII.
NO SET-OFF OR MITIGATION
7.1 No Set-off by Company. Executive's right to receive when due the
---------------------
payments and other benefits provided for under this Agreement is absolute,
unconditional and not subject to set-off, counterclaim or legal or equitable
defense. Time is of the essence in the performance by the Company of its
obligations under this Agreement. Any claim which the Company may have against
Executive, whether for a breach of this Agreement or otherwise, shall be brought
in a separate action or proceeding and not as part of any action or proceeding
brought by Executive to enforce any rights against the Company under this
Agreement.
7.2 No Mitigation. Executive shall not have any duty to mitigate the
-------------
amounts payable by the Company under this Agreement by seeking new employment or
self-employment
-22-
following termination. Except as specifically otherwise provided in this
Agreement, all amounts payable pursuant to this Agreement shall be paid without
reduction regardless of any amounts of salary, compensation or other amounts
which may be paid or payable to Executive as the result of Executive's
employment by another employer or self-employment.
ARTICLE VIII.
CONFIDENTIALITY
8.1 Confidential Information.
------------------------
(a) Executive acknowledges that it is the policy of the Company to
maintain as secret and confidential all Confidential Information, and that
Confidential Information has been and will be developed at substantial cost
and effort to the Company. Executive acknowledges that he will have access
to Confidential Information with respect to the Company which information
is a valuable and unique asset of the Company and that disclosure of such
Confidential Information would cause irreparable damage to the Company's
business and operations.
(b) Executive acknowledges that (i) Confidential Information is, as
between the Company and Executive, the exclusive property of the Company,
(ii) whatever Executive creates in the performance of duties in the course
of Executive's employment, including ideas, developments, writings,
improvements, designs, graphic and musical works (the "Work Product") is
------------
the property of the Company, and (iii) to the extent that any of the Work
Product is capable of protection by copyright, it is created within the
scope of Executive's employment and is work made for hire. To the extent
that any such Work Product may not be a work made for hire, Executive
hereby assigns to the Company all rights in such Work Product. To the
extent that any of the Work Product is an invention, Executive hereby
assigns to the Company all right, title, and interest in and to inventions,
improvements, discoveries, or ideas conceived or invented by Executive
during the term of Executive's employment (the "Inventions"). The Company
----------
acknowledges that this Agreement does not apply to an invention for which
no equipment, supplies, facility, or trade secret information of the
Company was used and which was developed entirely on Executive's own time,
unless the Invention (x) relates to the business of the Company or to the
Company's actual or demonstrably anticipated research or development, or
(y) results from any work performed by Executive for the Company. Executive
agrees to execute any documents at any time reasonably required by the
Company in connection with the registration of copyright, the assignment or
securing of patent protection for any Invention, or other perfection of the
Company's ownership of the Work Product.
(c) Both during Executive's employment by the Company and at any time
after the Termination Date, Executive:
(i) shall not, directly or indirectly, divulge, furnish or make
accessible to any Person, except:
-23-
(A) to the extent Executive reasonably and in good faith believes
that such actions are related to, and required by, Executive's
performance of his duties under this Agreement; or
(B) as may be compelled by applicable law or administrative
regulation; provided that Executive, to the extent not prohibited from
doing so by applicable law or administrative regulation, shall give
the Company written notice of the information to be so disclosed
pursuant to clause (B) of this sentence as far in advance of its
disclosure as is practicable, shall cooperate with the Company in its
efforts to protect the information from disclosure, and shall limit
Executive's disclosure of such information to the minimum disclosure
required by law or administrative regulation (unless the Company
agrees in writing to a greater level of disclosure);
(ii) shall not use for his own benefit in any manner, any
Confidential Information;
(iii) shall not cause any such Confidential Information to become
publicly known; and
(iv) shall take all reasonable steps to safeguard such Confidential
Information and to protect it against disclosure, misuse, loss and theft.
(d) For purposes of this Agreement, Confidential Information represents
trade secrets subject to protection under the Uniform Trade Secrets Act, or to
any comparable protection afforded by other applicable laws.
8.2 Reasonableness of Restrictive Covenants.
---------------------------------------
(a) Executive acknowledges that the covenants contained in Section 8.1 are
reasonable in the scope of the activities restricted, and that such covenants
are reasonably necessary to protect the Company's legitimate interests in its
Confidential Information. Executive further acknowledges such covenants are
essential elements of this Agreement and that, but for such covenants, the
Company would not have entered into this Agreement.
(b) The Company and Executive have each consulted with their respective
legal counsel and have been advised concerning the reasonableness and propriety
of such covenants.
8.3 Right to Injunction, Survival of Undertakings.
---------------------------------------------
(a) In recognition of the confidential nature of the Confidential
Information, and in recognition of the necessity of the limited restrictions
imposed by Section 8.1, the parties agree that it would be impossible to measure
solely in money the damages which the Company would suffer if Executive were to
breach any of his obligations under such Sections. Executive acknowledges that
any breach of any provision of such Section
-24-
would irreparably injure the Company. Accordingly, Executive agrees
that if he breaches any of the provisions of such Section, the Company
shall be entitled, in addition to any other remedies to which the
Company may be entitled under this Agreement or otherwise, to an
injunction to be issued by a court of competent jurisdiction, to
restrain any breach, or threatened breach, of such provisions, and
Executive hereby waives any right to assert any claim or defense that
the Company has an adequate remedy at law for any such breach.
(b) If a court determines that any of the covenants included in
this Article VIII is unenforceable in whole or in part, such court
shall have the power to modify the provision, as necessary, so as to
cause such covenant as so modified to be enforceable.
(c) All of the provisions of this Article VIII shall survive any
Termination of Employment without regard to (i) the reasons for such
termination, or (ii) the expiration of the Agreement Term.
8.4 If Executive breaches the restrictive covenants contained in this
Article VIII, such violation shall be remedied as provided herein, but shall not
affect the Company's obligation to pay benefits or otherwise fulfill its
obligations under this Agreement except and to the extent that such violation is
the basis for Executive's Termination with Cause.
ARTICLE IX.
NON-EXCLUSIVITY OF RIGHTS
9.1 Waiver of Certain Other Rights. To the extent that payments are
------------------------------
made to Executive pursuant to Section 4.1(a) or 4.1(b), Executive hereby waives
the right to receive severance payments or severance benefits under any other
severance Plan, agreement or Policy of the Company, including but not limited
to, any benefits to which Executive shall become entitled under an Executive
Retention Agreement.
9.2 Other Rights. Except as expressly provided in Section 9.1, this
------------
Agreement shall not prevent or limit Executive's continuing or future
participation in any benefit, bonus, incentive or other Plans provided by the
Company and for which Executive may qualify, nor shall this Agreement limit or
otherwise affect such rights as Executive may have under any other agreements
with the Company. Amounts which are vested benefits or which Executive is
otherwise entitled to receive under any Plan and any other payment or benefit
required by law at or after the Termination Date shall be payable in accordance
with such Plan or applicable law except as expressly modified by this Agreement.
9.3 Executive Employment Contract. It is not the intent of this
-----------------------------
Agreement to supercede the Company's Executive Retention Plan. Upon a Change of
Control that causes Executive to be entitled to severance benefits under this
Agreement and under the Executive Retention Plan, Executive may elect to receive
severance benefits under either the Executive Retention Plan or under this
Agreement. Executive's election to receive benefits under one of these
arrangements shall constitute a waiver of Executive's right to receive benefits
under the other arrangement. In the event that Executive terminates for Good
Reason as defined in this
-25-
Agreement, such termination shall also be treated as a termination without cause
for purposes of the Executive Retention Plan, thus permitting Executive to elect
to receive severance benefits under either the Executive Retention Plan for a
termination without cause or under this Agreement for a termination for Good
Reason. If Executive elects to receive such severance benefits under the
Executive Retention Plan, the golden parachute Excise Tax gross-up provisions in
Article V of this Agreement shall apply to provide gross-up protection to
Executive under the Executive Retention Plan.
9.4 Executive Retention Plan. The provisions of this Agreement shall
------------------------
continue to apply during periods when Executive is in the "Transition Period"
under Article 4 of the Executive Retention Plan. Commencing on the date that
Executive begins the "Continued Employment Period" for purposes of Article 5 of
the Executive Retention Plan, all of Executive's rights to future severance
benefits under this Agreement shall cease and Executive's sole severance or
similar rights shall be those set forth in the Executive Retention Plan.
ARTICLE X.
MISCELLANEOUS
10.1 No Assignability. This Agreement is personal to Executive and
----------------
without the prior written consent of the Company shall not be assignable by
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by Executive's legal
representatives.
10.2 Successors. This Agreement shall inure to the benefit of and be
----------
binding upon the Company and its successors and assigns. The Company will
require any successor (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all of the business or
assets of the Company or any Parent Corporation of any successor (whether direct
or indirect) by purchase, merger, consolidation or otherwise to all or
substantially all of the business assets of the Company, to assume expressly and
agree to perform this Agreement in the same manner and to the same extent that
the Company would be required to perform it if no such succession had taken
place. Any successor to the business or assets of the Company which assumes or
agrees to perform this Agreement by operation of law, contract, or otherwise
shall be jointly and severally liable with the Company under this Agreement as
if such successor were the Company.
10.3 Payments to Beneficiary. If Executive dies before receiving
-----------------------
amounts to which Executive is entitled under this Agreement, such amounts shall
be paid in a lump sum to one or more beneficiaries designated in writing by
Executive (each, a "Beneficiary"), or if none is so designated, to Executive's
-----------
estate.
10.4 Non-Alienation of Benefits. Benefits payable under this
--------------------------
Agreement shall not be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, charge, garnishment, execution or
levy of any kind, either voluntary or involuntary, before actually being
received by Executive, and any such attempt to dispose of any right to benefits
payable under this Agreement shall be void.
-26-
10.5 No Deference. Unless otherwise expressly provided in this
------------
Agreement, no determination pursuant to, or interpretation of, this Agreement
made by the board of directors (or any committee thereof) of the Company or any
Successor Corporation following a Change of Control or Imminent Change Date
shall be entitled to any presumptive validity or other deference in connection
with any judicial or administrative proceeding relating to or arising under this
Agreement.
10.6 Severability. If any one or more Articles, Sections or other
------------
portions of this Agreement are declared by any court or governmental authority
to be unlawful or invalid, such unlawfulness or invalidity shall not serve to
invalidate any Article, Section or other portion not so declared to be unlawful
or invalid. Any Article, Section or other portion so declared to be unlawful or
invalid shall be construed so as to effectuate the terms of such Article,
Section or other portion to the fullest extent possible while remaining lawful
and valid.
10.7 Amendments. This Agreement shall not be amended or modified at
----------
any time except by written instrument executed by the Company and Executive. The
Company shall not amend or terminate this Agreement in any manner following the
Effective Date or during any Imminent Change Period without the prior written
consent of the Executive.
10.8 Notices. All notices and other communications under this
-------
Agreement shall be in writing and delivered by hand, by nationally-recognized
delivery service that promises overnight delivery, or by first-class registered
or certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to Executive:
at Executive's most recent home address on file
with the Company.
If to the Company:
XxXxxxxx'x Corporation
Xxx XxXxxxxx'x Xxxxx
Xxx Xxxxx, XX 00000
Attention: General Counsel
or to such other address as either party shall have furnished to the other in
writing. Notice and communications shall be effective when actually received by
the addressee.
10.9 Counterparts. This Agreement may be executed in two or more
------------
counterparts, each of which shall be deemed an original, but all of which
together constitute one and the same instrument.
10.10 Governing Law. This Agreement shall be interpreted and construed
-------------
in accordance with the laws of the State of Illinois without regard to its
choice of law principles.
-27-
10.11 Captions. The captions of this Agreement are not apart of the
--------
provisions hereof and shall have no force or effect.
10.12 Number and Gender. Wherever appropriate, the singular shall
-----------------
include the plural, the plural shall include the singular, and the masculine
shall include the feminine.
10.13 Tax Withholding. The Company may withhold from any amounts
---------------
payable under this Agreement any Taxes that are required to be withheld pursuant
to any applicable law or regulation.
10.14 No Waiver. Executive's failure to insist upon strict
---------
compliance with any provision of this Agreement shall not be deemed a waiver of
such provision or any other provision of this Agreement. A waiver of any
provision of this Agreement shall not be deemed a waiver of any other provision,
and any waiver of any default in any such provision shall not be deemed a waiver
of any later default thereof or of any other provision.
10.15 Entire Agreement. This Agreement contains the entire
----------------
understanding of the Company and Executive with respect to its subject matter.
IN WITNESS WHEREOF, Executive and the Company have executed this
Change of Control Employment Agreement as of the date first above written.
EXECUTIVE
_______________________________
XxXXXXXX'X CORPORATION
By: ___________________________
Title: ________________________
-28-
ANNEX A
FORM OF
NON-COMPETITION AND RELEASE AGREEMENT
-------------------------------------
This agreement, release and waiver (the "Agreement"), made as of the ___
day of ________________, _____, is made by and between XxXxxxxx'x Corporation
and (together with all successors thereto, the "Company") and _______________
-------
("Executive").
---------
WHEREAS, the Company and the Executive have previously entered into a
Change-of-Control Supplement and Amendment to Employment Agreement, dated as of
_________________, 200_ ("Change of Control Agreement");
NOW THEREFORE, in consideration for receiving benefits and severance under
Section 4.1 of the Change of Control Agreement and in consideration of the
representations, covenants and mutual promises set forth in this Agreement, the
parties agree as follows:
1. Defined Terms. When used herein, unless otherwise specified, terms shall
-------------
have the same definitions as provided in the Change of Control Agreement.
2. Release. Except with respect to the Company's obligations under the Change
-------
of Control Agreement, the Executive, and Executive's heirs, executors,
assigns, representatives, agents, legal representatives, and personal
representatives, hereby releases, acquits and forever discharges the
Company, its Subsidiaries, the Surviving Corporation and their respective
directors, officers, agents, servants, employees, attorneys, shareholders,
successors, assigns and affiliates, of and from any and all claims,
liabilities, demands, causes of action, costs, expenses, attorneys fees,
damages and obligations of every kind and nature, in law, equity, or
otherwise, known and unknown, suspected and unsuspected, disclosed and
undisclosed, arising out of or in any way related to agreements, events,
acts or conduct at any time prior to the day prior to execution of this
Agreement, including but not limited to: any and all such claims and
demands directly or indirectly arising out of or in any way connected with
the Executive's employment with the Company; the Executive's termination of
employment with the Company; claims or demands related to salary, bonuses,
commissions, stock, stock options, or any other ownership interests in the
Company, vacation pay, fringe benefits, expense reimbursements, sabbatical
benefits, severance benefits, or any other form of compensation or equity;
claims pursuant to any federal, state, local law, statute, ordinance or
cause of action including, but not limited to, the federal Civil Rights Act
of 1964, as amended; the federal Age Discrimination in Employment Act of
1967, as amended; the federal Americans with Disabilities Act of 1990; tort
law; contract law; wrongful discharge; discrimination; fraud; defamation;
harassment; emotional distress; or breach of the implied covenant of good
faith and fair dealing. This Release does not apply to any compensation or
benefits to which the Executive may be entitled under this Agreement or the
Change of Control Agreement or to any rights to indemnification under
by-laws or other agreements of the Company or any other Employer.
1
3. No Inducement. Executive agrees that no promise or inducement to enter into
-------------
this Agreement has been offered or made except as set forth in this
Agreement, that the Executive is entering into this Agreement without any
threat or coercion and without reliance or any statement or representation
made on behalf of the Company or by any person employed by or representing
the Company, except for the written provisions and promises contained in
this Agreement.
4. Confidential Information.
------------------------
(a) Executive acknowledges that it is the policy of the Company to
maintain as secret and confidential all Confidential Information, and that
Confidential Information has been and will be developed at substantial cost
and effort to the Company. Executive acknowledges that he will have access
to Confidential Information with respect to the Company which information
is a valuable and unique asset of the Company and that disclosure of such
Confidential Information would cause irreparable damage to the Company's
business and operations.
(b) Executive acknowledges that (i) Confidential Information is, as
between the Company and Executive, the exclusive property of the Company,
(ii) whatever Executive creates in the performance of duties in the course
of Executive's employment, including ideas, developments, writings,
improvements, designs, graphic and musical works (the "Work Product") is
------------
the property of the Company, and (iii) to the extent that any of the Work
Product is capable of protection by copyright, it is created within the
scope of Executive's employment and is work made for hire. To the extent
that any such Work Product may not be a work made for hire, Executive
hereby assigns to the Company all rights in such Work Product. To the
extent that any of the Work Product is an invention, Executive hereby
assigns to the Company all right, title, and interest in and to inventions,
improvements, discoveries, or ideas conceived or invented by Executive
during the term of Executive's employment (the "Inventions"). The Company
----------
acknowledges that this Agreement does not apply to an invention for which
no equipment, supplies, facility, or trade secret information of the
Company was used and which was developed entirely on Executive's own time,
unless the Invention (x) relates to the business of the Company or to the
Company's actual or demonstrably anticipated research or development, or
(y) results from any work performed by Executive for the Company. Executive
agrees to execute any documents at any time reasonably required by the
Company in connection with the registration of copyright, the assignment or
securing of patent protection for any Invention, or other perfection of the
Company's ownership of the Work Product.
(c) Both during Executive's employment by the Company and at any time
after the Termination Date, Executive:
(i) shall not, directly or indirectly, divulge, furnish or make
accessible to any Person confidential information, except:
-2-
(A) to the extent Executive reasonably and in good faith
believes that such actions are related to, and required by,
Executive's performance of his duties under this Agreement; or
(B) as may be compelled by applicable law or administrative
regulation; provided that Executive, to the extent not prohibited
from doing so by applicable law or administrative regulation,
shall give the Company written notice of the information to be so
disclosed pursuant to clause (B) of this sentence as far in
advance of its disclosure as is practicable, shall cooperate with
the Company in its efforts to protect the information from
disclosure, and shall limit Executive's disclosure of such
information to the minimum disclosure required by law or
administrative regulation (unless the Company agrees in writing
to a greater level of disclosure);
(ii) shall not use for his own benefit in any manner, any
Confidential Information;
(iii) shall not cause any such Confidential Information to become
publicly known; and
(iv) shall take all reasonable steps to safeguard such
Confidential Information and to protect it against disclosure, misuse,
loss and theft.
(d) For purposes of this Agreement, Confidential Information
represents trade secrets subject to protection under the Uniform Trade
Secrets Act, or to any comparable protection afforded by other applicable
laws.
5. Non-Solicitation. During the period beginning on the Agreement Date and
----------------
ending on the first anniversary of the Termination Date, Executive shall
not, directly or indirectly:
(a) other than in connection with the good-faith performance of his
duties as an officer of the Company, encourage any employee of the Company
and/or its Subsidiaries to terminate his or her relationship with the
Company and/or its Subsidiaries;
(b) solicit the employment or engagement as a consultant or adviser,
of any employee of the Company and/or its Subsidiaries (other than by the
Company or its Subsidiaries), or cause or encourage any Person to do any of
the foregoing;
(c) establish (or take preliminary steps to establish) a business
with, or encourage others to establish (or take preliminary steps to
establish) a business with, any employee of the Company and/or its
Subsidiaries; or
(d) interfere with the relationship of the Company and/or its
Subsidiaries with, or endeavor to entice away from the Company and/or its
Subsidiaries, any Person who or which at any time (whether before or after
Executive's Termination Date) was or is an employee, customer, vendor or
supplier of, or maintained a business relationship (whether as a franchisee
or otherwise) with, the Company and/or its Subsidiaries.
-3-
6. Non-Competition Covenant. Executive covenants that that during the period
------------------------
beginning on the Termination Date and ending on the first anniversary of
the Termination Date, Executive shall not:
(i) directly or indirectly, in any capacity, engage or participate
in, or become employed by or render advisory or consulting services in
connection with any Prohibited Business, provided that nothing in this
clause (i) shall preclude Executive from performing services on behalf
of an investment banking or commercial banking, auditing or consulting
firm so long as he or she is not engaged in rendering services to or
soliciting business of a Prohibited Business; or
(ii) make any financial investment, whether in the form of equity or
debt, or own any interest, directly or indirectly, in any Prohibited
Business, provided that nothing in this clause (ii) shall restrict
Executive from making any investment not in excess of 5% of the Common
Stock in any company whose stock is listed on a national securities
exchange or actively traded in the over-the-counter market if such
investment does not give Executive the right or ability to control or
influence the policy decisions of any Prohibited Business.
For purposes of this Section "Prohibited Business" shall mean any
Person and any branches, offices or operations thereof, which is a
direct and material competitor of the Company or any of its
Subsidiaries in any country of the world or in any state of the United
States, which is one of the ten (10) or fewer Persons designated as a
Prohibited Business on Exhibit 1 to this Agreement at the time this
Agreement is executed.
7. Reasonableness of Restrictive Covenants.
---------------------------------------
(a) Executive acknowledges that the covenants contained in Sections
4, 5 and 6 are reasonable in the scope of the activities restricted, the
geographic area covered by the restrictions, and the duration of the
restrictions, and that such covenants are reasonably necessary to protect
the Company's legitimate interests in its Confidential Information and in
its relationships with its employees, customers and suppliers. Executive
further acknowledges such covenants are essential elements of this
Agreement and that, but for such covenants, the Company would not have
entered into this Agreement.
(b) The Company and Executive have each consulted with their
respective legal counsel and have been advised concerning the
reasonableness and propriety of such covenants.
8. Right to Injunction, Survival of Undertakings.
---------------------------------------------
(a) In recognition of the confidential nature of the Confidential
Information, and in recognition of the necessity of the limited
restrictions imposed by Sections 4, 5 and 6, the parties agree that it
would be impossible to measure solely in money the damages which the
Company would suffer if Executive were to breach any of his obligations
under such Sections. Executive acknowledges that any breach of any
provision of such Sections would irreparably injure the Company.
Accordingly, Executive agrees that if he breaches any of the provisions of
such Sections, the Company shall be entitled, in addi-
-4-
tion to any other remedies to which the Company may be entitled under this
Agreement or otherwise, to an injunction to be issued by a court of
competent jurisdiction, to restrain any breach, or threatened breach, of
such provisions, and Executive hereby waives any right to assert any claim
or defense that the Company has an adequate remedy at law for any such
breach.
(b) If a court determines that any of the covenants included in
Sections 4, 5 and 6 is unenforceable in whole or in part because of such
covenant's duration or geographical or other scope, such court shall have
the power to modify the duration or scope of such provision, as the case
may be, so as to cause such covenant as so modified to be enforceable.
(c) All of the provisions of Sections 4, 5 and 6 shall survive any
Termination of Employment without regard to (i) the reasons for such
termination or (ii) the expiration of the Agreement Term.
9. If Executive breaches the restrictive covenants contained in Sections 4, 5
and 6, such violation shall be remedied as provided herein, but shall not
affect the Company's obligation to pay benefits or otherwise fulfill its
obligations under this Agreement except and to the extent that such
violation is the basis for Executive's Termination with Cause.
10. Compliance to Date. Executive hereby covenants and promises that he has not
------------------
taken or caused to be taken, during a period of at least ninety (90) days
prior to the Effective Date, any action that would violate the covenants
contained in Sections 4, 5 and 6 of this Agreement.
11. Advice of Counsel; Time to Consider; Revocation. Executive acknowledges the
-----------------------------------------------
following:
(i) Executive received a copy of this Agreement on ____________, 200_.
(ii) Executive has read this Agreement, and understands its legal and
binding effect. Executive is acting voluntarily and of Executive's
own free will in executing this Agreement.
(iii) Executive has been advised to seek and has had the opportunity to
seek legal counsel in connection with this Agreement.
(iv) Executive was given [21/45] days (the "Consideration Period") to
consider the terms of this Agreement before signing it.
(v) If Executive does not deliver a signed copy of this Agreement to the
Company on or before the last day of the Consideration Period, this
Agreement shall be void and Executive will not receive the benefits
described in Section 4.1 of the Change of Control Agreement.
Executive understands that, if Executive timely signs this Agreement and
delivers it to the Company, Executive may rescind this Agreement at any
time within seven (7) days
-5-
after signing it by delivering a written notice to the Company. Executive
understands that this Agreement will not be effective until after the
seven-day rescission period has expired.
12. Severability. If all or any part of this Agreement is declared by any court
------------
or governmental authority to be unlawful or invalid, such unlawfulness or
invalidity shall not invalidate any other portion of this Agreement. Any
section or a part of a section declared to be unlawful or invalid shall, if
possible, be construed in a manner which will give effect to the terms of
the section to the fullest extent possible while remaining lawful and
valid.
13. Amendment. This Agreement shall not be altered, amended, or modified except
---------
by written instrument executed by the Company and the Executive. A waiver
of any portion of this Agreement shall not be deemed a waiver of any other
portion of this Agreement.
14. Counterparts. This Agreement may be executed in several counterparts, each
------------
of which shall be deemed to be an original, but all of which together will
constitute one and the same instrument.
15. Headings. The headings of this Agreement are not part of the provisions
--------
hereof and shall not have any force or effect.
16. Applicable Law. The provisions of this Agreement shall be interpreted and
--------------
construed in accordance with the laws of the State of Illinois without
regard to its choice of law principles.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the dates
specified below.
EXECUTIVE
_______________________________________
DATE: ______________
XxXXXXXX'X CORPORATION
By:____________________________________
Title:_________________________________
DATE: ______________
-6-
ANNEX B
FORM OF
EXHIBIT 1 TO NON-COMPETITION AND RELEASE AGREEMENT
PROHIBITED BUSINESSES
---------------------
