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X. X. XXXXX CO.
CHANGE OF CONTROL AGREEMENT
AGREEMENT, made as of the 13th day of May, 1997, between X. X. Xxxxx Co.,
a Wisconsin corporation, ("Company") and Xxxxxxxxx X. Xxxxxx ("Executive").
WHEREAS, the Executive is now serving as an executive of the Company in a
position of importance and responsibility; and
WHEREAS, the Executive possesses intimate knowledge of the business and
affairs of the Company and its policies, markets and financial and human
resources, and the Executive has acquired certain confidential information and
data with respect to the Company; and
WHEREAS, the Company wishes to continue to receive the benefit of the
Executive's knowledge and experience and, as an inducement for continued
service, is willing to offer the Executive certain payments due to severance as
a result of change of control as set forth herein;
NOW, THEREFORE, in consideration of the mutual promises and covenants set
forth herein, the Executive and Company agree as follows:
Section 1. Definitions.
(a) Change of Control. For purposes of this Agreement, a "Change of
Control" shall occur if and when any person or group of persons (as defined in
Section 13(d)(3) of the Securities and Exchange Act of 1934) other than the
members of the family of Xxxxxxx X. Xxxxx, Xx. and their descendants, or trusts
for their benefit, and the X. X. Xxxxx Foundation, Inc., collectively, directly
or indirectly controls in excess of 50% of the voting common stock of the
Company.
(b) Termination Due to Change of Control. A "Termination Due to Change of
Control" shall occur if within the 12 month period beginning with the date a
Change of Control occurs (i) the Executive's employment with the Company is
involuntarily terminated (other than by reason of death, disability or Cause)
or (ii) the Executive's employment with the Company is voluntarily terminated
by the Executive subsequent to (A) a 10% or more diminution in the total of the
Executive's annual base salary (exclusive of fringe benefits) and the
Executive's target bonus in comparison with the Executive's annual base salary
and target bonus immediately prior to the date the Change of Control occurs,
(B) a significant diminution in the responsibilities or authority of the
Executive in comparison with the Executive's responsibility and authority
immediately prior to the date the Change of Control occurs or (C) the
imposition of a requirement by the Company that the Executive relocate to a
principal work location more than 50 miles from the Executive's principal work
location immediately prior to the date the Change of Control occurs.
(c) "Cause" means (i) the Executive's willful and continued failure to
substantially perform the Executive's duties with the Company (other than any
such failure resulting from physical or mental incapacity) after written demand
for performance is given to the Executive by the Company which specifically
identifies the manner in which the Company believes the Executive has not
substantially
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performed and a reasonable time to cure has transpired, (ii) the Executive's
conviction of (or plea of nolo contendere for the commission of) a felony, or
(iii) the Executive's commission of an act of dishonesty or of any willful act
of misconduct which results in or could reasonably be expected to result in
significant injury (monetarily or otherwise) to the Company, as determined in
good faith by the Board of Directors of the Company.
(d) "Beneficiary" means any one or more primary or secondary
beneficiaries designated in writing by the Executive on a form provided by the
Company to receive any benefits which may become payable under this Agreement on
or after the Executive's death. The Executive shall have the right to name,
change or revoke the Executive's designation of a Beneficiary on a form provided
by the Company. The designation on file with the Company at the time of the
Executive's death shall be controlling. Should the Executive fail to make a
valid Beneficiary designation or leave no named Beneficiary surviving, any
benefits due shall be paid to the Executive's spouse, if living; or if not
living, then to the Executive's estate.
(e) "Code" means the Internal Revenue Code of 1986, as amended.
Section 2. Payments Upon Termination Due to Change of Control.
(a) Following Termination Due to Change of Control, the Executive
shall be paid an amount equal to two times her annual base salary (exclusive of
incentive compensation and fringe benefits) paid the Executive by the Company in
effect immediately prior to the date the Change of Control occurs. Such amount
shall be paid in 24 monthly installments beginning on the 15th day of the month
following the month in which the Executive's employment with the Company
terminates.
(b) If the scheduled payments under paragraph (a) above would result
in disallowance of any portion of the Company's deduction therefore under
Section 162(m) of the Code, the payments called for under paragraph (a) shall be
limited to the amount which is deductible, with the balance to be paid as soon
as deductible by the Company. However, in such event, the Company shall pay the
Executive on a quarterly basis an amount of interest based on the prime rate
recomputed each quarter on the unpaid scheduled payments.
Section 3. Excise Tax, Attorney Fees.
(a) If the payments under Section 2 in combination with any other
payments which the Executive has the right to receive from the Company (the
"Total Payments") would result in the Executive incurring an excise tax as a
result of Section 280(G) of the Code, the Company will reimburse the Executive
for such Excise Tax.
(b) If the Executive is required to file a lawsuit to enforce her
rights under this Agreement, the Executive's Restricted Stock Agreement dated
August 1, 1997 or the Executive's Nonqualified Retention Stock Option Agreement
dated May 13, 1997, and the Executive prevails in such lawsuit, the Company will
reimburse the Executive for her attorney fees incurred up to a maximum of
$25,000.00.
Section 4. Death After the Executive has Begun Receiving Payments.
Should the Executive die after Termination Due to Change of Control, but before
receiving all payments due the Executive hereunder, any remaining payments due
shall be made to the Executive's Beneficiary.
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Section 5. Confidential Information Agreement. The Executive has
obligations under the separate Confidential Information Agreement between the
Executive and the Company which continue beyond the Executive's termination of
employment. The payments to be made hereunder are conditioned upon the
Executive's compliance with the terms of the Confidential Information
Agreement. The payments made hereunder shall reduce any obligation of the
Company to make payments to the Executive under Section 3 of the Confidential
Information Agreement. In the event the Executive violates the provisions of
the Confidential Information Agreement, no further payments shall be due
hereunder and the Executive shall be obligated to repay all previous payments
received hereunder in the same manner as provided in Section 4 of the
Confidential Information Agreement.
Section 6. Miscellaneous.
(a) Non-Assignability. This Agreement is personal to the Executive
and, without the prior written consent of the Company, shall not be assignable
by the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be binding upon the Company and
its successors and assigns and shall also be enforceable by the Executive's
legal representatives.
(b) Successors. The Company shall require 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 expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform it if no such
succession had taken place. As used in this Agreement, "Company" shall mean
both the Company as defined above and any such successor that assumes and agrees
to perform this Agreement, by operation of law or otherwise.
(c) Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Wisconsin, without
reference to principles of conflict of laws, to the extent not preempted by
federal law. The captions of this Agreement are not part of the provisions
hereof and shall have no force or effect.
(d) Notices. All notices and other communications under this
Agreement shall be in writing and shall be given by hand delivery to the other
party or by registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Executive: Xxxxxxxxx X. Xxxxxx
00000 X. Xxxxxxxxx Xx.
Xxxxxx, XX 00000
If to the Company: X. X. Xxxxx Co.
0000 Xxxx Xxxx Xxxx Xxxx
Xxxxxxxxx, XX 00000
Attention: Corporate Secretary
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph. Notices and communications shall be effective
when actually received by the addressee.
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(e) Construction. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement. If any provision of this Agreement shall
be held invalid or unenforceable in part, the remaining portion of such
provision, together with all other provisions of this Agreement, shall remain
valid and enforceable and continue in full force and effect to the fullest
extent consistent with law.
(f) No Guarantee of Employment. Nothing contained in this Agreement
shall give the Executive the right to be retained in the employment of the
Company or affect the right of the Company to dismiss the Executive.
(g) Amendment; Entire Agreement. This Agreement may not be amended
or modified except by a written agreement executed by the parties hereto or
their respective successors and legal representatives. This Agreement contains
the entire agreement between the parties on the subjects covered and replaces
all prior writings, proposals, specifications or other oral or written materials
relating thereto.
(h) Impact on Other Plans. No amounts paid to the Executive under
this Agreement will be taken into account as "wages", "salary", "base pay" or
any other type of compensation when determining the amount of any payment or
allocation, or for any other purpose, under any other qualified or nonqualified
plan or agreement of the Company, except as otherwise may be specifically
provided by such plan or agreement.
(i) Other Agreements. This Agreement supersedes any other severance
arrangement between the Company and the Executive. This Agreement does not
confer any payments or benefits other than the payments described in Section 2
hereof.
(j) Withholding. To the extent required by law, the Company shall
withhold any taxes required to be withheld with respect to this Agreement by the
federal, state or local government from payments made hereunder or from other
amounts paid to the Executive by the Company.
(k) Facility of Payment. If the Executive or, if applicable, the
Executive's Beneficiary, is under legal disability, the Company may direct that
payments be made to a relative of such person for the benefit of such person,
without the intervention of any legal guardian or conservator, or to any legal
guardian or conservator of such person. Any such distribution shall constitute
a full discharge with respect to the Company and the Company shall not be
required to see to the application of any distribution so made.
Section 7. Claims Procedure.
(a) Claim Review. If the Executive or the Executive's Beneficiary (a
"Claimant") believes that he or she has been denied all or a portion of a
benefit under this Agreement, he or she may file a written claim for benefits
with the Company. The Company shall review the claim and notify the Claimant of
the Company's decision within 60 days of receipt of such claim, unless the
Claimant receives written notice prior to the end of the 60 day period stating
that special circumstances require an extension of the time for decision. The
Company's decision shall be in writing, sent by mail to the Claimant's last
known address, and if a denial of the claim, must contain the specific reasons
for the denial, reference to pertinent provisions of this Agreement on which the
denial is based, a designation of any additional material necessary to perfect
the claim, and an explanation of the claim review procedure.
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(b) Appeal Procedure to the Board. A Claimant is entitled to request a
review of any denial by the full Board by written request to the Chair of the
Board within 60 days of receipt of the denial. Absent a request for review
within the 60-day period, the claim will be deemed to be conclusively denied.
The Board shall afford the Claimant the opportunity to review all pertinent
documents and submit issues and comments in writing and shall render a review
decision in writing, all within 60 days after receipt of a request for review
(provided that, in special circumstances the Board may extend the time for
decision by not more than 60 days upon written notice to the Claimant.) The
Board's review decision shall contain specific reasons for the decision and
reference to the pertinent provisions of this Agreement.
IN WITNESS WHEREOF, the Executive has signed this Agreement and, pursuant to
the authorization of the Board, the Company has caused this Agreement to be
signed, all as of the date first set forth above.
/s/ Xxxxxxxxx X. Xxxxxx
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Executive - Xxxxxxxxx X. Xxxxxx
X. X. XXXXX CO.
By: /s/ Xxxxxxxxx X. Xxxxxx
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Attest:/s/ Xxxxx X. Xxxxxxxxxxxx
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