Exhibit 10(n)
AMENDMENT ONE TO JUNE 21, 1993 LETTER AGREEMENT
This Amendment One to June 21, 1993, Letter Agreement (the "Amendment")
is entered into this 9th day of September, 1997, by and between Blessings
Corporation, a Delaware corporation (the "Company") and Xxxxxx X. Xxxxxx (the
"Key Executive").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company (the "Board") considers
it essential to the best interests of the shareholders of the Company to xxxxxx
the continued employment of Xxxxxx X. Xxxxxx, Chief Executive Officer and
President of the Company, and in this connection the Board recognizes that the
possibility of a sale of the company or a merger exists and that such
possibility and the uncertainty and questions which it necessarily raises may
result in the departure or distraction of the Key Executive to the detriment of
the Company and its shareholders in this period when the Key Executive's
undivided attention and commitment to the best interests of the Company and its
shareholders is particularly important; and
WHEREAS, the Board has determined that it is essential and in the best
interests of the Company and its shareholders to ensure the Key Executive's
continued dedication and efforts in such event without undue concern on the part
of the Key Executive for his financial security; and
WHEREAS, it is the desire of the Board in the event of a Change of
Control, as defined hereafter in this Amendment One, but only in such event, to
supersede that section of the June 21, 1993, Letter Agreement which appears on
page 4 thereof as "Severance Agreement."
NOW, THEREFORE, in order to fulfill the above purposes and in
consideration of the engagements to be performed by each of the parties hereto,
it is agreed that the Severance Agreement provisions as stated on page 4 of the
Letter Agreement of June 21, 1993, from the Company to the Key Executive be
amended and supplemented as follows:
ARTICLE ONE
DEFINITIONS
As used in this Amendment, the following words and phrases shall hav
the following respective meanings unless the context clearly indicates
otherwise.
1.1 Amendment: This Amendment One to June 21, 1993, Letter
Agreement.
1.2 Base Salary: The base salary in effect on the date a Change
of Control occurs.
1.3 Company: Blessings Corporation.
1.4 Board: The Board of Directors of Blessings Corporation.
1.5 Key Executive: Xxxxxx X. Xxxxxx, the Chief Executive Officer
and President of Blessings Corporation.
1.6 Compensation: The amount the Key Executive is entitled to receive
as Base Salary plus amounts which the Key Executive is entitled to receive
herein and under Blessings Corporation's Management Incentive Plan on an
annualized basis, but shall not refer to any other direct or indirect
compensation received by the Key Executive, including, without limitation, any
awards of restricted stock options, long-term incentive payouts or benefits.
1.7 Change in Control: A "Change in Control" shall be deemed to
occur if, within two (2) years from the date hereof:
-----------------
(a) the Company's shareholders approve of a sale, a
merger or disposition of all or substantially all of the Company's assets or
a plan of liquidation or dissolution of the Company; or
(b) there is a change of fifty percent (50%) or more in the
composition of the members of the Board in any twelve (12) consecutive
months. 1.8 Letter Agreement: The letter of June 21, 1993, from the
Company to the Key Executive outlining the financial compensation and
severance payment to
the Key Executive as an officer of the Company.
1.9 Payment Benefits: The benefits payable in accordance with
Article Three of this Amendment.
ARTICLE TWO
TERM
2.1 Term of Amendment: This Amendment shall commence on
September 9, 1997, and shall continue in effect through September 9, 1999,
when it shall terminate.
ARTICLE THREE
PAYMENT BENEFITS
3.1 Right to Payment Benefits: The Key Executive shall be entitled to
receive from the Company Payment Benefits in the amount provided in Section 3.2
if (a) this Amendment has not previously expired under the provisions contained
in Section 2 above and (b) a Change in Control has occurred and (c) the Key
Executive is employed by the Company at the time the Change in Control occurs.
3.2 Amount of Payment Benefits: If there is a Change in Control
within the term of this Amendment, then the Key Executive shall be entitled
to the following benefits:
(a) The Company shall pay to the Key Executive an amount equal
to the present value of the total amounts of money that would have been paid to
the Key Executive during the period beginning on the date of the Change in
Control and ending on a date two (2) years subsequent to the date of the Change
in Control. For purposes of this subparagraph (a), the total amounts of money
that would have been paid to the Key Executive during such period shall be based
on an annual rate calculated as follows: An amount equal to two (2) times the
Key Executive's average annual Compensation for the two (2) fiscal years of the
Company preceding the fiscal year in which the Change in Control occurs. The
present value of the foregoing total amounts shall be determined by using a
discount rate equal to one hundred percent (100%) of the applicable federal rate
(as defined in Section 1274(d) of the Internal Revenue Code) as of the
Termination Date, and shall be based on the assumption that the Compensation for
the period in question would be received by the Key Executive on a monthly
basis. In addition to the aforesaid payment, the Key Executive shall receive the
sum of One Hundred Thousand and 00/100 Dollars ($100,000.00) for each One and
00/100 Dollar ($1.00) the stock of the Company sells for in excess of Twelve and
50/100 Dollars ($12.50) per share (on the date the Change in Control occurs).
The additional payment on any increase in the value of the stock shall be
calculated on the fractional increase, e.g., if on the date the Change in
Control occurs the average price per share of Company Stock trades for Fourteen
and 00/100 Dollars ($14.00) per share, the additional payment to the Key
Executive shall be One Hundred Fifty Thousand and 00/100 Dollars ($150,000.00).
Any payments made under this subparagraph (a) and under the Letter Agreement
shall be subject to the limitation set forth in paragraph 3.3 below and shall be
payable in a lump sum within thirty (30) days of the date on which a Change in
Control occurs.
(b) The Key Executive shall not be required to mitigate the
amount of any payment provided for in this Amendment by seeking other employment
or otherwise, and no such payment shall be offset or reduced by the amount of
any compensation or benefits provided to the Key Executive in any subsequent
employment. These Payment Benefits are not contingent upon the Key Executive
retaining a position with the Company after a Change in Control occurs. If the
Key Executive is terminated for any reason after a Change in Control occurs, the
Company shall not be obligated to pay any severance benefits by reason of any
provision of the Letter Agreement.
3.3 Limitation on Payment Benefits: As it is the intention of the
parties that the Company's payments under this Amendment and the Letter
Agreement to or for the benefit of the Key Executive shall not constitute
"parachute payments" within the meaning of Section 280G of the Internal Revenue
Code, in no event shall the present value of the benefits provided for in
Section 3.2(a) exceed two and ninety-nine one-hundredths (2.99) times the Base
Amount. The Base Amount and the present value of the benefits shall be
determined in accordance with Section 280G of the Internal Revenue Code of 1986
and the regulations promulgated thereunder.
ARTICLE FOUR
CHANGE IN CONTROL
Written Notice Required: Any purported Change in Control shall be
communicated by written notice to the Key Executive.
ARTICLE FIVE
SUCCESSORS TO CORPORATION
This Amendment shall bind any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all, or substantially all, of
the business and/or assets of the Company in the same manner and to the same
extent that the Company would be obligated under this Amendment if no succession
had taken place. The Company shall require any successor by merger or otherwise
to expressly and unconditionally assume and agree to perform the Company's
obligations under this Amendment in the same manner and to the same extent that
the Company would be required to perform if no such succession had taken place
ARTICLE SIX
MISCELLANEOUS
6.1 Further Amendment: Any alteration to this Amendment shall be
a signed written instrument signed by both parties to this Amendment.
6.2 Indemnification: If the Key Executive is required to
institute a legal action to enforce this Amendment, or is required to defend
in any legal action, the validity or enforceability of any right or benefit
provided by this Amendment and the Key Executive is the prevailing party in
any such legal action, the Company will pay all actual legal fees and expenses
incurred by the Key Executive.
6.3 Validity and Severability: The invalidity or unenforceability of
any provision of this Amendment shall not affect the validity or enforceability
of any other provision of this Amendment, which shall remain in full force and
effect, and any prohibition or unenforceability in any jurisdiction shall not
invalidate or render unenforceable such provision in any other jurisdiction.
6.4 Reaffirmation of Letter Agreement: The terms of the Letter
Agreement, except as superseded under specific circumstances, remain in full
force and effect.
6.5 Governing Law: The validity, interpretation, construction and
performance of this Amendment shall in all respects be governed by the laws of
the Commonwealth of Virginia.
6.6 Choice of Forum: The Key Executive and the Company shall be
entitled to enforce the provisions of this Amendment or to assert any claim for
benefits under the terms of this Amendment in any state or federal court of
competent jurisdiction located in the Commonwealth of Virginia.
BLESSINGS CORPORATION
By: /s/Xxxx X. XxXxxxxx
-------------------
Xxxx X. XxXxxxxx
Chairman, Board of Directors
KEY EXECUTIVE
/s/Xxxxxx X. Xxxxxx
-------------------
Xxxxxx X. Xxxxxx
