EXHIBIT 10.7
AMENDED AND RESTATED AGREEMENT
This AGREEMENT, amended and restated as of October 1,
2001, is between XXXXXXXXX-XXXX COMPANY, a New Jersey corporation
(the "Company"), and XXXXXXX X. XXXXXX (the "Employee"). Unless
otherwise indicated, terms used herein and defined in Schedule A
hereto shall have the meanings assigned to them in said Schedule.
The Company and the Employee are already parties to an
agreement that is currently in effect, which they desire to
hereby amend and restate.
The Company and the Employee agree as follows:
1. OPERATION OF AGREEMENT.
This Agreement shall be effective immediately upon its
execution and shall continue thereafter from year to year prior
to a Change of Control Event unless terminated as of any
anniversary of the date hereof by either party upon written
notice to the other party given at least 60 days, but not more
than 90 days, prior to such anniversary date. Notwithstanding
the foregoing, this Agreement may not be terminated after the
occurrence of a Change of Control Event.
2. AGREEMENT TERM.
The term of this Agreement shall begin on the date
hereof and, unless terminated pursuant to paragraph 1 prior to a
Change of Control Event, shall end on the fifth anniversary of
the occurrence of a Change of Control Event (or, if later, after
satisfaction of all obligations hereunder).
3. EMPLOYEE'S POSITION AND RESPONSIBILITIES.
(A) The Employee will continue to serve the Company upon the
occurrence of a Change of Control Event, in all material
respects, in the same capacity (including position, status,
offices, titles and reporting responsibilities) with the same
authorities, duties and responsibilities as he serves the Company
immediately prior thereto.
(b) During the term of this Agreement the Employee shall devote
substantially all of his business time (excluding vacation time
and sick leave to which the Employee is entitled) and attention
exclusively to the business and affairs of the Company and shall
use his reasonable best efforts to promote the interests of the
Company. The participation of the Employee in outside
directorships and civic or charitable activities, and the
management of the Employee's personal investments in public
companies in which the Employee holdings do not exceed 5% of the
voting power or value of such companies, in each case, which do
not materially interfere with the performance of Employee's
duties for the Company shall not be deemed a violation of this
paragraph 3.
4. COMPENSATION AND OTHER BENEFITS UPON CHANGE OF CONTROL
EVENT.
The Company and the Employee agree that, upon the
occurrence of any Change of Control Event, the Employee shall
receive basic annual salary, bonus and fringe and other benefits
as follows:
(a) Basic Annual Salary and Bonus. The Employee's basic
annual salary shall be at a rate not less than the rate of annual
salary, which has been paid to the Employee immediately prior to
the Change of Control Event, with such annual increases (but not
decreases) equal to the greater of (i) salary increases as may be
contemplated by any salary adjustment programs of the Company in
effect immediately prior to the Change of Control Event and
applicable to the Employee and such further increases as shall be
determined from time to time by the Board or (ii) a percentage
equal to the percentage increase (if any) in the "Consumer Price
Index for All Urban Consumers" published by the United States
Department of Labor's Bureau of Labor Statistics for the then
most recently ended 12-month period. In addition, the Employee
shall be entitled to receive an annual bonus in an amount not
less than the highest annual bonus received by, or accrued on
behalf of, the Employee during the lesser of (i) the five full
Fiscal Years immediately preceding the Change of Control Event,
or (ii) the number of full Fiscal Years immediately preceding the
Change of Control Event during which the Employee has been
employed by the Company (whether the bonus is paid to, is accrued
on behalf of, is a Deferral Amount (as such term is defined in
the IR Executive Deferred Compensation Plan) or is foregone by
the Employee pursuant to the Xxxxxxxxx-Xxxx Company Estate
Enhancement Program).
(b) Fringe Benefits; Business Expenses. The Employee shall
be entitled to receive benefits, including but not limited to
pension (and supplemental pension), savings and stock investment
plan (and supplemental savings and stock investment and
retirement plans), leveraged employee stock ownership plan, stock
award, stock option, deferred compensation, and welfare plans (as
defined in section 3(1) of the Employee Retirement Income
Security Act of 1974, as amended, or otherwise) including, but
not limited to, life, medical, prescription drugs, dental,
disability, accidental death and travel accident coverage plans,
post-retirement welfare benefits, and an estate enhancement
program on terms no less favorable than those in effect under
each such plan immediately prior to the Change of Control Event,
and at no less than the same benefit levels (and no more than the
same employee contribution levels) then in effect under each such
plan and to receive all other fringe benefits and perquisites (or
their equivalent) from time to time in effect for the benefit of
any executive, management or administrative group for which the
employment position then held by the Employee entitles the
Employee to participate. The Company shall provide for the
payment of, or reimburse the Employee for, all travel and other
out-of-pocket expenses reasonably incurred by him in the
performance of his duties hereunder.
(c) Management Incentive Unit Award Plan. The Company and
the Employee further agree that immediately upon the occurrence of
any Change of Control Event, all amounts theretofore credited to
the Employee under the Company's Management Incentive Unit Award
Plan, as amended (the "MIU Plan"), shall become fully vested and
all such amounts thereafter credited shall become fully vested
immediately upon such crediting.
5. PAYMENTS AND BENEFITS UPON TERMINATION.
The Employee shall be entitled to the following
payments and benefits upon Termination:
(a) Salary and Bonus. The Company shall pay to the Employee,
in a cash lump sum on the Termination Date, an amount equal to the
sum of (i) the basic annual salary and any annual bonus in
respect of a completed fiscal year, which have not yet been paid
to the Employee through the Termination Date; (ii) an amount
equal to the last annual bonus received by, or awarded to, the
Employee for the full Fiscal Year immediately preceding the
Termination Date multiplied by a fraction the numerator of which
shall be the number of full months the Employee was employed by
the Company during the Fiscal Year containing the Employee's
Termination Date and the denominator of which shall be 12; and
(iii) an amount equal to the Employee's basic annual salary
multiplied by a fraction, the numerator of which shall be the
number of unused vacation days to which the Employee is entitled
as of the Termination Date and the denominator of which shall be
365, and any other amounts normally paid to an employee by the
Company upon termination of employment. For these purposes, any
partial month during which the Employee is employed shall be
deemed a full month.
(b) Severance. The Company shall pay to the Employee, in a cash
lump sum not more than 30 days following the Termination Date, an
amount equal to three times the sum of (i) the highest basic
annual salary in effect at any time during the period beginning
five full Fiscal Years immediately preceding the Change of
Control Event and ending on the Termination Date; and (ii) the
Employee's target bonus for the year of termination or, if
higher, the highest annual bonus received by, or accrued on
behalf of, the Employee during the period beginning five full
Fiscal Years immediately preceding the Change of Control Event
and ending on the Termination Date (whether the bonus is paid to,
is accrued on behalf of, is a Deferral Amount (as such term is
defined in the IR Executive Deferred Compensation Plan) or is
foregone by the Employee pursuant to the Xxxxxxxxx-Xxxx Company
Estate Enhancement Program).
(c) Employee Benefit Plans. For the three-year period following
the Termination Date (or, if sooner, until the Employee is
covered under a comparable plan offered by a subsequent
employer), the Company shall continue to cover the Employee under
those employee welfare plans (including, but not limited to,
life, medical, prescription drugs, dental, accidental death and
travel accident and disability coverage, but not including any
severance pay plan, other than that provided pursuant to this
Agreement or any pension plan) applicable to the Employee on the
Termination Date at the same benefit levels then in effect (or
shall provide their equivalent); provided, however, that if the
Employee becomes employed by a new employer and participates in a
welfare plan of such employer that is at least as favorable as
the comparable Company plan, the Employee's coverage hereunder
under the applicable Company welfare plan (or the equivalent)
shall continue as secondary coverage to that provided by the new
employer until the third anniversary of the Termination Date (but
shall become primary coverage on or prior to the third
anniversary of the Termination Date if, for any reason, the
Employee ceases to participate in the new employer's plan or if
such new employer's plan becomes less favorable than the
comparable Company plan).
(d) Deferred Compensation, Savings and Leveraged Employee Stock
Ownership Plans. As soon as practicable following the
determination thereof (but in any event no later than 30 days
following the Termination Date), the Company shall pay the
Employee an amount (in one lump sum cash payment and in lieu of
the benefit otherwise provided under the applicable plan) equal
to the value of the sum of: (i) with respect to the IR Executive
Deferred Compensation Plan (the "Executive Deferred Plan"), the
number of IR Stock units credited to the Employee's Account
Balance for all Plan Years (as such terms are defined in the
Executive Deferred Plan) at the Termination Date multiplied by
the Company Stock Value (as defined in paragraph 5(g) below) plus
the value of all other amounts credited to the Employee's Account
Balance for all Plan Years under the Executive Deferral Plan at
the Termination Date as such value is determined under the terms
of the Executive Deferred Plan; (ii) the number of Common Stock
equivalents credited to the Employee's Employee Account under the
Xxxxxxxxx-Xxxx Company Supplemental Savings and Stock Investment
Plan at the Termination Date multiplied by the Company Stock
Value (as defined in paragraph 5(g) below); (iii) the amount
credited to the Employee's Employee Account under the Xxxxxxxxx-
Xxxx Company Supplemental Retirement Account Plan at the
Termination Date; (iv) all contributions to, or amounts credited
to, the Xxxxxxxxx-Xxxx Company Savings and Stock Investment Plan,
IR/Xxxxx Leveraged Employee Stock Ownership Plan, Xxxxxxxxx-Xxxx
Company Supplemental Savings and Stock Investment Plan, and
Xxxxxxxxx-Xxxx Company Supplemental Retirement Account Plan (and
earnings and appreciation attributable thereto) that theretofore
were made by the Company on behalf of the Employee and are
forfeited as a result of the Employee's Termination; and (v) five
percent (or such higher maximum Company Matching Contribution
percentage provided under the Xxxxxxxxx-Xxxx Company Savings and
Stock Investment Plan as of the Termination Date, calculated as
though no Contribution Percentage Limitation or other limits
under the Xxxxxxxxx-Xxxx Company Savings and Stock Investment
Plan were applicable (as those terms are defined in the Xxxxxxxxx-
Xxxx Company Savings and Stock Investment Plan)) of the aggregate
amount payable pursuant to subparagraphs 5(a) and 5(b).
(e) Pension Benefits.
(i) No later than 30 days following the Termination Date,
the Company shall pay the Employee an amount (in one lump sum cash
payment) equal to the present value of the sum of the pension
benefits the Employee is entitled to receive under (A) the
Restated Xxxxxxxxx-Xxxx Company Supplemental Pension Plan (the
"Section 415 Excess Plan"), (B) the Xxxxxxxxx-Xxxx Company
Elected Officers Supplemental Program (the "Elected Officers
Supplemental Program" or the "Program"), and (C) the Xxxxxxxxx-
Xxxx Company Executive Supplementary Retirement Agreement (the
"Ten-Year Annuity"), all as in effect immediately prior to the
Change of Control Event (collectively, the "Pension Benefit").
(ii) In calculating the portion of the Pension Benefit under
Section 1.1 of the Section 415 Excess Plan the Company shall
credit the Employee with five additional years of credited
service (within the meaning of the Company's qualified defined
benefit plan in which the Employee actively participates
immediately prior to the Change of Control Event (the "Qualified
Pension Plan"), and including compensation, vesting and age
credit) and five additional years of age for purposes of the
Section 415 Excess Plan but not the Qualified Pension Plan. (If,
after crediting five years of age, the Employee is less than
fifty-five years old, it will be assumed that the benefit
commencement age for purposes of the Section 415 Excess Plan is
fifty-five).
(iii) In calculating the portion of the Pension Benefit under
the Elected Officers Supplemental Program, the Company shall:
(A) credit the Employee with an additional seventeen Years of
Service (as defined in the Program) and an additional five years
of age for purposes of computing the amount of the Pension
Benefit; (B) define "Final Average Pay" in Section 1.10 of the
Program as 1/3 of the severance amount determined pursuant to
paragraph 5(b) of this Agreement; (C) revise Section 3.1(a) of
the Program to read "the product of: (x) 53.6% plus the product
of 1.9% times Years of Service after 1999, and (y) his Final
Average Pay"; and (D) for purposes of benefit offset
determinations, increase the annual life annuity pension benefit
as determined in Appendix A, paragraph (a), by the product of:
(x) $139,548, and (y) 1 minus the sum of (a) 1/180 for each of
the next 60 months plus (b) 1/360 for each of the next 60 months
that the Change in Control Event precedes the Employee's 65th
birthday, and (z) in the event that a change in control precedes
the Employee's 55th birthday, a further actuarial reduction
factor for the period (measured in years and months) between the
Employee's actual retirement age and age 55, computed using the
applicable definition of "Actuarial Equivalent" under the
provisions of the qualified defined benefit pension plan in which
the Employee actively participated immediately prior to the
Change in Control Event.
(iv) In calculating the portion of the Pension Benefit under
the Ten-Year Annuity: (A) the phrase "subject to paragraph 5 hereof"
shall be deleted, and the phrase "normal retirement age" or "age
65", as applicable depending on the Employee's arrangement, shall
be replaced with "age 62", in each case, in paragraph 1; (B) the
Company shall credit the Employee with five additional years of
age but to an age no greater than 62; and (C) the competition
restriction under the Ten-Year Annuity shall be deleted, and
shall be null and void as of the Termination Date.
(v) The present value of the Pension Benefit shall be
calculated using (A) an interest rate equal to the product of (I)
the 10-year Treasury Note rate as used in the Elected Officers
Supplemental Program's definition of Actuarial Equivalent times
(II) one minus the federal income tax rate at the highest bracket
of income for individuals in effect for the year containing the
date of payment, (B) the mortality rate used to determine lump
sum values in the Elected Officers Supplemental Program, and
(C) actual age without the five year addition to age, except that
the Ten-Year Annuity present value shall be calculated using no
mortality assumption and actual age plus the additional five
years but to an age no greater than 62.
(f) Retiree Welfare Benefits. For purposes of determining
the Employee's eligibility for post-retirement benefits under any
welfare plan maintained by the Company prior to the occurrence of
a Change of Control Event, the Employee shall be credited with
any combination of additional years of service and age not
exceeding 10 years, to the extent necessary to qualify for
benefits. If, after taking into account such additional age and
service, the Employee is eligible for the Company's post-
retirement welfare benefits (or would have been eligible under
the terms of such plans as in effect prior to the occurrence of
the Change of Control Event), the Employee shall receive,
commencing on the third anniversary of the Termination Date, post-
retirement welfare benefits no less favorable than the benefits
the Employee would have received under the terms and conditions
of the applicable plans in effect immediately prior to the
occurrence of the Change of Control Event.
(g) Employee Stock Awards, Options, SARs and MIUs. No
later than 30 days following the Termination Date, the Company shall
pay the Employee an amount (in one lump sum cash payment) equal
to the aggregate Company Stock Value (defined below) of all
shares underlying 100% of the Employee's then outstanding and
unpaid stock and stock based awards (excluding stock options)
(minus any applicable exercise price, in the case of stock
appreciation rights) under the Company's Incentive Stock Plans,
the MIU Plan and any similar plans of the Company (or any other
company), which shall all be deemed vested and performance
objectives shall be deemed fully earned, whether or not otherwise
vested and fully earned in accordance with the terms of the
employee benefit plans and agreements pursuant to which such
stock and stock based awards were granted (upon such payment in
full, such stock and stock based awards shall be cancelled and be
of no further force or effect). In addition, all options to
purchase shares of common stock of the Company (or the stock of
any company for which the Company's stock has been substituted or
exchanged or in respect of which options have been granted to the
Employee) ("Company Stock") and all stock appreciation rights
held by the Employee immediately prior to Termination shall
become exercisable as of the Termination Date, whether or not
otherwise exercisable in accordance with the terms of the
employee benefit plans and agreements pursuant to which such
options and stock appreciation rights were granted. During the
60 day period following the Termination Date, the Employee shall
have the right to elect to exercise any or all stock options then
held by the Employee as if such option were a stock appreciation
right and, therefore, receive a cash payment equal to (x) the
number of shares of Company Stock subject to each such option (or
portion thereof), multiplied by (y) the excess of the Company
Stock Value over the exercise price of such option (upon such
payment in full, any stock option so exercised as a stock
appreciation right shall be cancelled and be of no further force
or effect). For purposes of this Agreement, Company Stock Value
shall be deemed to be the highest of: (i) the closing sale price
of the Company Stock on the New York Stock Exchange on the Change
of Control Event; (ii) the closing sale price of the Company
Stock on the New York Stock Exchange on the Termination Date; and
(iii) the highest closing sale price of the Company Stock on the
New York Stock Exchange during the 30 trading days immediately
preceding the acquisition of more than 50% of the outstanding
Company Stock by any person or group (including Affiliates of
such person or group). If, as of any valuation date, the Company
Stock is not traded on the New York Stock Exchange, the Company
Stock Value shall be the closing sale price of the Company Stock
on the principal national securities exchange on which the Common
Stock is traded or, if the Common Stock is not traded on any
national securities exchange, the closing bid price of the Common
Stock in the over-the-counter market.
(h) Estate Enhancement Program. If the Employee participates
in the Xxxxxxxxx-Xxxx Company Estate Enhancement Program, the terms
thereof shall apply.
(i) Outplacement Expenses. For the three year period following
the Termination Date, the Company shall reimburse the Employee
for all reasonable expenses (up to 15% of the Employee's basic
annual salary, but no more than $75,000, per 12 month period)
incurred by the Employee for professional outplacement services
by qualified consultants selected by the Employee.
6. PARACHUTE EXCISE TAX GROSS-UP.
(A) If, as a result of any payment or benefit provided under
this Agreement, either alone or together with other payments and
benefits which the Employee receives or is then entitled to
receive from the Company or any of its Affiliates, the Employee
becomes subject to the excise tax imposed under Section 4999 of
the Internal Revenue Code of 1986, as amended (the "Code"),
(together with any income, employment or other taxes, interest
and penalties thereon, an "Excise Tax"), the Company shall pay
the Employee an amount sufficient to place the Employee in the
same after-tax financial position that he would have been in if
he had not incurred any Excise Tax (together with any taxes,
interest and penalties hereon, the "Gross-Up Payment"). For
purposes of determining whether the Employee is subject to an
Excise Tax, (i) any payments or benefits received by the Employee
(whether pursuant to the terms hereof or pursuant to any plan,
arrangement or other agreement with the Company or any entity
Affiliated with the Company) shall be deemed to be contingent on
a change described in Section 280G(b)(2)(A)(i) of the Code and
shall be taken into account and (ii) the Employee shall be deemed
to pay taxes at the highest marginal applicable rates of such
taxation for the calendar year in which the Gross-Up Payment is
to be made, net of the maximum deduction in federal income taxes
which could be obtained from deduction of such state and local
taxes.
(b) The determination of whether the Employee is subject to
Excise Tax and the amounts of such Excise Tax and Gross-Up
Payment, as well as other calculations hereunder, shall be made
at the expense of the Company by the independent auditors of the
Company immediately prior to the Change of Control Event, which
shall provide the Employee with prompt written notice (the
"Company Notice") setting forth their determinations and
calculations. Within 30 days following the receipt by the
Employee of the Company Notice, the Employee may notify the
Company in writing (the "Employee Notice") if the Employee
disagrees with such determinations or calculations, setting forth
the reasons for any such disagreement. If the Company and the
Employee do not resolve such disagreement within 10 business days
following receipt by the Company of the Employee Notice, the
Company and the Employee shall agree upon a nationally recognized
accounting or compensation firm (the "Resolving Firm") to make a
determination with respect to such disagreement. If the Employee
and the Company are unable to agree upon the Resolving Firm
within 20 business days following the Employee Notice, the New
York office of Towers, Xxxxxx shall be the Resolving Firm.
Within 30 business days following the Employee Notice, if the
disagreement is not resolved by such time, each of the Employee
and the Company shall submit its position to the Resolving Firm,
which shall make a determination as to all such disagreements
within 30 days following the last of such submissions, which
determination shall be binding upon the Employee and the Company.
The Company shall pay all reasonable expenses incurred by either
party in connection with the determinations, calculations,
disagreements or resolutions pursuant to this paragraph,
including, but not limited to, reasonable legal, consulting or
other similar fees and expenses.
(c) The Employee shall notify the Company in writing of any
claim by the Internal Revenue Service that, if successful, would
require the payment by the Company of a Gross-Up Payment. Such
notification shall be given as soon as practicable but no later
than 10 business days after the Employee is informed in writing
of such claim and shall apprise the Company of the nature of such
claim and the date on which such claim is requested to be paid.
The Employee shall not pay such claim prior to the expiration of
the 30 day period following the date on which the Employee gives
such notice to the Company (or such shorter period ending on the
date that any payment of taxes with respect to such claim is
due). If the Company notifies the Employee in writing prior to
the expiration of such period that it desires to contest such
claim, the Employee shall:
(i) give the Company any information reasonably requested
by the Company relating to such claim;
(ii) take such action in connection with contesting such
claim as the Company shall reasonably request 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 and reasonably satisfactory to
the Employee;
(iii) cooperate with the Company in good faith in order to
effectively contest such claim; and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay
directly all costs and expenses (including, but not limited
to, additional interest and penalties and related legal,
consulting or other similar fees) incurred in connection
with such contest and shall indemnify and hold the Employee
harmless, on an after-tax basis, for any Excise Tax or other
tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of
costs and expenses.
(d) The Company shall control all proceedings taken 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
Employee to pay the tax claimed and xxx for a refund or contest
the claim in any permissible manner, and the Employee 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 Employee to
pay such claim and xxx for a refund, the Company shall advance
the amount of such payment to the Employee on an interest-free
basis, and shall indemnify and hold the Employee harmless, on an
after-tax basis, from any Excise Tax or other tax (including
interest or penalties with respect thereto) imposed with respect
to such advance or with respect to any imputed income with
respect to such advance; and provided, further, that if the
Employee is required to extend the statute of limitations to
enable the Company to contest such claim, the Employee may limit
this extension 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 hereunder and the
Employee shall be entitled to settle or contest, as the case may
be, any other issue raised by the Internal Revenue Service or any
other taxing authority. In addition, no position may be taken
nor any final resolution be agreed to by the Company without the
Employee's consent if such position or resolution could
reasonably be expected to adversely affect the Employee
(including any other tax position of the Employee unrelated to
the matters covered hereby).
(e) As a result of the uncertainty in the application of Section
4999 of the Code at the time of the initial determination by the
Company or the Resolving Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company
should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that
the Company exhausts its remedies and the Employee thereafter is
required to pay to the Internal Revenue Service an additional
amount in respect of any Excise Tax, the Company or the Resolving
Firm shall determine the amount of the Underpayment that has
occurred and any such Underpayment shall promptly be paid by the
Company to or for the benefit of the Employee.
(f) If, after the receipt by Employee of an amount advanced by
the Company in connection with the contest of Excise Tax claim,
the Employee becomes entitled to receive any refund with respect
to such claim, the Employee shall promptly pay to the Company the
amount of such refund actually received (together with any
interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Employee of an amount
advanced by the Company in connection with an Excise Tax claim, a
determination is made that Employee shall not be entitled to any
refund with respect to such claim and the Company does not notify
the Employee in writing of its intent to contest the denial of
such refund prior to the expiration of 30 days after such
determination, such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall be
offset, to the extent thereof, by the amount of the Gross-Up
Payment.
7. EFFECT ON OTHER ARRANGEMENTS.
No provision of this Agreement shall affect or limit
any interests or rights vested in the Employee under any other
agreement or arrangement with the Employee or under any pension,
profit-sharing, medical or other insurance or other benefit plans
of the Company which may be in effect and in which the Employee
may be participating at any time.
8. CONFIDENTIALITY.
The Employee agrees to hold in confidence any and all
confidential information known to him concerning the Company and
its businesses so long as such information is not otherwise
publicly disclosed; provided that the Employee shall be entitled
to divulge confidences and confidential information (i) as
required by applicable law or legal process (e.g., subpoena or
investigation by governmental authority) or (ii) to defend the
Employee in any action, suit or investigation or to enforce the
Employee's rights hereunder or otherwise.
9. MISCELLANEOUS.
(A) Legal Expenses; Severability. The Company shall pay all
costs and expenses, including attorneys' fees, of the Company
and, at least quarterly, the Employee, in connection with any
legal proceedings, whether or not instituted by the Company,
relating to the interpretation or enforcement of this Agreement.
In the event that the provisions of this paragraph shall be
determined to be invalid or unenforceable in any respect, such
declaration shall not affect the remaining provisions of this
Agreement, which shall continue in full force and effect.
(b) Mitigation. All payments or benefits required by the
terms of this Agreement shall be made or provided without offset,
deduction, or mitigation on account of income the Employee may
receive from other employment or otherwise and the Employee shall
not have any obligation or duty to seek any other employment or
otherwise earn any amounts to reduce or mitigate any payments
required hereunder.
(c) Death of the Employee. In the event of the Employee's
death subsequent to Termination, all payments called for hereunder
shall be paid to the Employee's designated beneficiary or
beneficiaries, or to his estate if he has not designated a
beneficiary or beneficiaries.
(d) Notices. Any notice or other communication provided for
in this Agreement or contemplated hereby shall be sufficiently given
if given in writing and delivered by hand, by overnight courier
(with receipt) or by certified mail, return receipt requested,
and addressed, in the case of the Company, to the Company at:
000 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Chairman of the Board
of Directors
or such other address if the
executive offices of the Company
have moved;
and, in the case of the Employee, to the Employee at:
00 Xxxx Xxxxxx Xxxx
Xxxxxx Xxxxx, Xxx Xxxxxx 00000
Either party may designate a different address by giving notice
of change of address in the manner provided above.
(e) Waiver. No waiver or modification in whole or in part of
this Agreement, or any term or condition hereof, shall be
effective against any party unless in writing and duly signed by
the party sought to be bound. Any waiver of any breach of any
provision hereof or any right or power by any party on one
occasion shall not be construed as a waiver of, or a bar to, the
exercise of such right or power on any other occasion or as a
waiver of any subsequent breach.
(f) Binding Effect; Successors. This Agreement shall be
binding upon and shall inure to the benefit of the Company and the
Employee and their respective heirs, legal representatives,
successors and assigns. If the Company shall be merged into or
consolidated with another entity, the provisions of this
Agreement shall be binding upon and inure to the benefit of the
entity surviving such merger or resulting from such
consolidation. 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, by agreement in form and substance satisfactory
to the Employee, to expressly assume 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. The provisions of this paragraph shall continue to
apply to each subsequent employer of the Employee hereunder in
the event of any subsequent merger, consolidation or transfer of
assets of such subsequent employer.
(g) Calculations. Calculation of all benefits and amounts
payable hereunder shall be made, at the expense of the Company,
by the Wellesley Hills, Massachusetts office of Xxxxxx Xxxxx &
Company (or the Company's then actuary immediately prior to the
Change of Control Event).
(h) Plan Limitations. In the event the Company is unable
to provide any benefit required to be provided under this Agreement
through a plan sponsored by the Company or its Affiliates, the
Company shall, at its own cost and expense, take appropriate
actions to insure that alternative arrangements are made so that
equivalent benefits can be provided to the Employee, including to
the extent appropriate purchasing for the benefit of the Employee
(and if applicable the Employee's dependents) individual policies
of insurance providing benefits, which on an after-tax basis, are
equivalent to the benefits required to be provided hereunder.
(i) Controlling Law; Jurisdiction. This Agreement shall
be governed by and construed in accordance with the laws of the
State of New Jersey applicable to contracts made and to be
performed therein, without regard to conflicts of laws
principles. Any suit, action or proceeding related to this
Agreement, or any judgment entered by any court related to this
Agreement, may be brought only in any court of competent
jurisdiction in the State of New Jersey, and the parties hereby
submit to the exclusive jurisdiction of such courts. The parties
(and any Affiliates of the Company or beneficiary of the
Employee, or any successor to the Company or the Company's
Affiliate) irrevocably waive any objections which they may now or
hereafter have to the laying of venue of any suit, action or
proceeding brought in any court of competent jurisdiction in the
State of New Jersey, and hereby irrevocably waive any claim that
any such action, suit or proceeding has been brought in an
inconvenient forum.
10. EFFECT ON PRIOR AGREEMENTS.
Subject to paragraph 7, this Agreement contains the
entire understanding between the parties hereto and supersedes in
all respects any prior employment or severance agreement or
understanding between the Company (or any Affiliate thereof) and
the Employee.
IN WITNESS WHEREOF, the Company and the Employee have
executed this Agreement as of the day and year first above
written.
XXXXXXXXX-XXXX COMPANY
_____________________________
_____________________________
EMPLOYEE By: Xxxxxxxx Xxxxxxxxx
Title: Senior Vice President and
General Counsel
Schedule A
CERTAIN DEFINITIONS
As used in this Agreement, and unless the context
requires a different meaning, the following terms have the
meanings indicated:
"Affiliate", used to indicate a relationship with a
specified person, means a person that directly, or indirectly
through one or more intermediaries, controls, or is controlled
by, or is under common control with, such a specified person.
"Associate", used to indicate a relationship with a
specified person, means (i) any corporation, partnership, or
other organization of which such specified person is an officer
or partner; (ii) any trust or other estate in which such
specified person has a substantial beneficial interest or as to
which such specified person serves as trustee or in a similar
fiduciary capacity; (iii) any relative or spouse of such
specified person, or any relative of such spouse who has the same
home as such specified person, or who is a director or officer of
the Company or any of its parents or subsidiaries; and (iv) any
person who is a director, officer, or partner of such specified
person or of any corporation (other than the Company or any
wholly-owned subsidiary of the Company), partnership or other
entity which is an Affiliate of such specified person.
"Beneficial Owner" means the same as such term is
defined by Rule 13d-3 under the Securities Exchange Act of 1934,
as amended (or any successor provision at the time in effect);
provided, however, that any individual, corporation, partnership,
group, association, or other person or entity which has the right
to acquire any of the Company's outstanding securities entitled
to vote generally in the election of directors at any time in the
future, whether such right is contingent or absolute, pursuant to
any agreement, arrangement, or understanding or upon exercise of
conversion rights, warrants or options, or otherwise, shall be
deemed the Beneficial Owner of such securities.
"Board" means the Board of Directors of the Company
(or, if the Company is then a subsidiary of any other company, of
the ultimate parent company).
"Cause" means (i) any action by the Employee involving
willful malfeasance or willful gross misconduct having a
demonstrable adverse effect on the Company; (ii) substantial and
continuing refusal by the Employee in willful breach of this
Agreement to perform his employment duties hereunder; or (iii)
the Employee being convicted of a felony under the laws of the
United States or any state.
Termination of the Employee for Cause shall be
communicated by a Notice of Termination given within one year
after the Board (i) has knowledge of conduct or an event
allegedly constituting Cause; and (ii) has reason to believe that
such conduct or event could be grounds for Cause. For purposes
of this Agreement a "Notice of Termination" shall mean delivery
to the Employee of a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire
membership of the Company's Board at a meeting of that Board
called and held for the purpose (after reasonable notice to the
Employee ("Preliminary Notice") and reasonable opportunity for
the Employee, together with the Employee's counsel, to be heard
before the Board prior to such vote) of finding, in the good
faith opinion of the Board, that the Employee has engaged in the
conduct constituting Cause and specifying the particulars thereof
in detail. Upon the receipt of the Preliminary Notice, the
Employee shall have 30 days in which to appear with counsel or
take such other action as he desires on his behalf, and such 30-
day period is hereby agreed to by the parties as a reasonable
opportunity for the Employee to be heard. The Board shall no
later than 45 days after the receipt of the Preliminary Notice by
the Employee communicate its findings to Employee. A failure by
the Board to make its finding of Cause or to communicate its
conclusion within such 45-day period shall be deemed to be a
finding that the Employee has not engaged in the conduct
described herein. Any termination of the Employee's employment
(other than by death or Permanent Disability) within 45 days
after the date that the Preliminary Notice has been given to the
Employee shall be deemed to be a termination for Cause; provided,
however, that if during such period the Employee voluntarily
terminates other than for Good Reason or the Company terminates
the Employee other than for Cause, and the Employee is found (or
is deemed to be found) not to have engaged in the conduct
described herein, such termination shall not be deemed to be for
Cause.
"Change of Control Event" means the date (i) any
individual, corporation, partnership, group, association or other
person or entity, together with its Affiliates and Associates
(each a "Person") (other than a trustee or other fiduciary
holding securities under an employee benefit plan of the
Company), is or becomes the Beneficial Owner of securities of the
Company representing 20% or more of the combined voting power of
the Company's then outstanding securities entitled to vote
generally in the election of directors; (ii) the Continuing
Directors fail to constitute a majority of the members of the
Board; (iii) of consummation of any transaction or series of
transactions under which the Company is merged or consolidated
with any other company; or (iv) of any sale, lease, exchange or
other transfer, in one transaction or a series of related
transactions, of all, or substantially all, of the assets of the
Company, other than any sale, lease, exchange or other transfer
to any Person or entity where the Company owns, directly or
indirectly, at least 80% of the outstanding voting securities of
such Person or entity or its parent corporation after any such
transfer; provided, however, that in the case of a transaction
described in (i), (iii) or (iv), above, there shall not be a
Change of Control Event if the shareholders of the Company
immediately prior to any such transaction own (or continue to own
by remaining outstanding or by being converted into voting
securities of the surviving entity or parent entity) 70% or more
of the combined voting power of the voting securities of the
Company, the surviving entity or any parent of either outstanding
immediately following such transaction, in substantially the same
proportion to each other as prior to such transaction. For
purposes of the foregoing definition and the definitions of
"Continuing Director" and "Duly Approved by the Continuing
Directors," below, following the contemplated inversion
transaction, "the Company" shall mean either Xxxxxxxxx-Xxxx
Company or the Bermuda entity that owns Xxxxxxxxx-Xxxx Company.
"Continuing Director" means a director who either was a
member of the Board on the date hereof or who became a member of
the Board subsequent to such date and whose election, or
nomination for election by the Company's shareholders, was Duly
Approved by the Continuing Directors on the Board at the time of
such nomination or election, either by a specific vote or by
approval of the proxy statement issued by the Company on behalf
of the Board in which such person is named as nominee for
director, without due objection to such nomination, 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 or entity
other than the Board.
"Duly Approved by the Continuing Directors" means an
action approved by the vote of at least two-thirds of the
Continuing Directors then on the Board.
"Fiscal Year" means the fiscal year of the Company.
"Good Reason" means (i) a material adverse change in
the Employee's job responsibilities, title or status from those
in effect on the date hereof or as enhanced from time to time,
which change continues for a period of at least 15 days after
written notice from the Employee; (ii) a reduction of the
Employee's base salary or target bonus, the failure to pay
Employee's salary or bonus when due, or the failure to maintain
on behalf of the Employee (and his or her dependents) benefits
which are at least as favorable in the aggregate to those
provided for in paragraph 4(b); (iii) the relocation of the
principal place of the Employee's employment by more than 35
miles from the Employee's principal place of employment
immediately prior to the Change of Control Event, or the
imposition of travel requirements on the Employee not
substantially consistent with such travel requirements existing
immediately prior to the Change of Control Event; (iv) the
failure of the Company to obtain the assumption of, and the
agreement to perform, this Agreement by any successor as
contemplated in paragraph 8(f); (v) any voluntary resignation of
employment by Employee following a Change of Control Event; or
(vi) the failure of the Company to perform any of its other
material obligations under this Agreement and the continuation of
such failure for a period of 15 days after written notice from
the Employee.
"Permanent Disability", as applied to the Employee,
means that (i) he has been totally incapacitated by bodily injury
or disease so as to be prevented thereby from performing his
duties hereunder; (ii) such total incapacity shall have continued
for a period of six consecutive months; and (iii) such total
incapacity will, in the opinion of a qualified physician, be
permanent and continuous during the remainder of the Employee's
life.
"Termination" means (i) following the occurrence of a
Change of Control Event, (A) the termination of the Employee's
employment without Cause or (B) the resignation by an Employee
for Good Reason, and (ii) prior to the occurrence of a Change of
Control Event, but following the execution of an agreement or the
commencement of a tender offer, proxy contest or other action
that, if consummated, would reasonably be expected to result in a
Change of Control Event and, in each case, does result in a
Change of Control Event, the termination of the Employee's
employment, or a material adverse change in the Employee's job
responsibilities, title or status, reduction of the Employee's
base salary or target bonus, the relocation of the Employee's
principal place of employment by more than 35 miles or the
imposition of travel requirements on the Employee not
substantially consistent with the Employee's job; provided, that
such term shall not include any termination of employment for
Cause, any resignation without Good Reason (except as provided in
clause (ii), above), or any termination of employment on account
of an Employee's death or Permanent Disability.
"Termination Date" shall mean the effective date of an
Employee's Termination; provided, that with respect to a
Termination that occurs prior to a Change of Control Event, the
effective date of such Termination shall be deemed to be the date
immediately following the Change of Control Event.
