EXHIBIT 10(c)
AMENDMENT TO EMPLOYMENT AGREEMENT
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Reference is made to the Employment Agreement dated as of March 22,
1995, as thereafter amended on August 27, 1996 (the "Agreement") by and between
The Union Corporation (the "Company") and Xxxxxxxx X. Xxxx (the "Employee"). It
is hereby agreed that the Agreement is to be further amended effective July 1,
1997 as follows:
1. Article FIRST (B) shall be amended as follows:
Replace "Vice President", which appears in the first sentence,
with "Executive Vice President".
2. Article FIRST (D) of the Agreement is amended to read in its
entirety as follows:
"(D) The Employee shall be entitled to vacation time of four
weeks per Fiscal Year, which need not be taken consecutively."
3. Article SECOND of the Agreement is amended to read in its
entirety as follows:
"SECOND: (A) Unless extended by the written agreement of the
parties, the term of this Agreement and the Employee's employment hereunder
shall commence effective as of January 1, 1995 ("Commencement Date"), and shall
terminate on the earlier to occur of (a) June 30, 2000 or (b) termination in
accordance with Paragraphs (B), (C), (D) or (E) of this Article SECOND, in any
of which events this Agreement shall terminate on such date and shall be of no
further force and effect (except as provided herein), it being acknowledged and
agreed that in the event of any termination pursuant to said Paragraphs (B),
(C), (D) or (E) below, the Company shall have no further liability or obligation
to the Employee (i) except for the payments required to be made under such
Paragraphs; (ii) except for any obligation to indemnify Employee as provided in
the Certificate of Incorporation and By-laws of the Company and Article ELEVENTH
of the Agreement; (iii) except as provided in the Indemnification Agreement
dated August 27, 1990, as amended, between the Company and Employee (the
"Indemnification Agreement"); (iv) except for obligations of the Company and
rights of Employee under various stock option agreements (the "Stock Option
Agreements"); (v) except that if Employee's employment is terminated under
Article SECOND B(ii), Employee shall be paid, from the date of termination, his
Base Salary for the longer of the balance of the term of this Agreement or
twelve months; (vi) except for the obligations of the Company under Article
TENTH; (vii) except the Company hereby agrees to pay all reasonable attorneys'
fees and
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other costs incurred by him in enforcing his rights under the Agreement; and
(viii) except pursuant to the Release Agreement dated June 10, 1997. The
liabilities and obligations under Article SECOND (A)(b) (i), (ii), (iii), (iv),
(vi), (vii) and (viii) above shall each and collectively be considered the
"Continuing Obligations". If termination occurs by reason of the death of
Employee, his surviving spouse (or such other person or persons as he may
designate in writing to the Company from time to time) shall receive in a lump
sum an amount equal to his Base Salary for six months. The foregoing payments
to be made by the Company if Employee is terminated by reason of death or
disability shall be in addition to those required under Article THIRD (D). In
the event of any termination pursuant to Paragraph (E) below, Employee shall be
entitled to receive the payments required to be made under this Agreement.
Notwithstanding anything stated in this Agreement to the contrary, if the
Employee's employment is terminated pursuant to Article SECOND (B)(ii),
(B)(iii), (C), (D) or (E) or if this Agreement shall expire on June 30, 2000, or
any extension thereof, the Continuing Obligations shall remain in full force and
effect following such termination or expiration.
(B) The Company shall be entitled to terminate the Employee's services
in any of the following circumstances:
(i) For "Cause" by reason of the occurrence of any of the following:
(a) the chronic failure, refusal or neglect of the Employee fully and faithfully
to perform his obligations hereunder, (b) the failure, refusal or neglect of the
Employee to use all reasonable efforts in good faith to implement any lawful
directions or policy (not inconsistent with this Agreement) of the Board of
Directors of the Company or of the CEO of the Company, or (c) unless it can be
shown that Employee acted in good faith and reasonably believed he was acting in
the best interest of the Company, or any Affiliate, the taking of any actions,
or the intentional omission to take any actions, by the Employee which bring
public obloquy upon the Company or any Affiliate or (d) the conviction of, or
nolo contendere plea by, the Employee in respect of any crime or offense
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committed by the Employee and involving the property, operations or activities
of the Company or any Affiliate, or moral turpitude.
(ii) Mental or physical incapacity or inability of the Employee to
perform his duties for a consecutive period of 150 days or a non-consecutive
period of 180 days during any twelve month period; or
(iii) The death of the Employee.
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(C) In addition to termination pursuant to Article SECOND (A) and (B),
the Company shall at any time also be entitled to terminate the Employee's
services for any other reason, provided that in the event of termination
pursuant to this Article SECOND (C): (a) the Employee shall be paid in a lump
sum payment on the date of such termination his Base Salary for twelve months,
(b) the Employee shall receive a pro-rata bonus, on the date of such
termination, based on the amount of the most recent annual bonus paid to
Employee (the "Previous Annual Bonus"), if the Employee's employment is
terminated under this paragraph or if Employee elects to terminate his
employment as a result of an Event (with such bonus to be calculated based on
the number of days between the date that the Previous Annual Bonus was approved
by the Compensation Committee of the Board of Directors of the Company and the
date of such termination) (such amount shall be the "Pro-Rata Bonus"), (c) the
Company shall provide the medical, dental and hospitalization insurance to the
Employee and his spouse pursuant to Article THIRD (E)(ii), (d) the Employee
shall receive the payments required to be made under Article TENTH, and (e) in
consideration of the Employee's agreements under Article FOURTH (A), (B) and (C)
and provided that Employee has complied with Article FOURTH (A), (B) and (C),
the Company shall continue to pay to the Employee his then current Base Salary
pursuant to Article THIRD (A) for a period from the date of such termination
through twenty-four months from the date of such termination (the "Non-Compete
Consideration"). In the event of termination pursuant to this Article SECOND
(C), the Employee shall not be entitled to any payments or damages by reason of
such termination other than as set forth in this Article SECOND (C). In the
event the Employee is indicted for any crime or offense (other than traffic
infractions and similar minor matters), the Company shall have the right to
suspend the Employee's services hereunder during the period after indictment and
until proceedings against the Employee are terminated. Unless this Agreement is
otherwise terminated pursuant to Article SECOND (B), (D) or (E) or expires on
June 30, 2000, the Employee shall continue to receive his Base Salary during
such suspension period; and upon the end of such suspension, if this Agreement
is still in effect, the Employee shall resume performance hereunder. Such
suspension shall not extend the term of this Agreement.
(D) (i) The Employee shall at any time be entitled to terminate his
services hereunder by submitting his written resignation to the Company, to be
effective 90 days thereafter (unless an Event, as hereinafter defined, has
occurred). Notwithstanding anything to the contrary herein contained, upon
receipt of such notice, the Company may terminate Employee's employment at any
time thereafter, and from and after Employee's termination under this Article
SECOND (D), the Company shall have
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no further liability or obligation to the Employee, except (I) for the
Continuing Obligations, (II) to pay the Non-Compete Consideration, and (III) the
obligations pursuant to Article THIRD (E); all of such obligations of the
Company and rights of Employee shall survive the termination or expiration of
this Agreement.
(ii) All reimbursements and other payments to be made to him, or on
his behalf, hereunder shall be payable to him on demand, subject only to receipt
of reasonable supporting documentation and shall be on a "grossed-up" basis to
also include reimbursement for any and all income and employment taxes arising
from the reimbursement or payments provided hereby (excluding only the Non-
Compete Consideration).
(E) If, at any time after the date hereof, any of the following events
(an "Event") occurs;
(i) more than 20% of the Company's then issued and outstanding
voting stock shall have been purchased or acquired (or voting rights with
respect thereto shall have been acquired) by a person, corporation or group
thereof acting in concert, the purpose or result of which would be a change in
either "control" of the Company (as generally described in subparagraph (ii)
hereof); or
(ii) a transaction or circumstance occurs or eventuates which
reasonably may be construed as effecting or constituting a clear and present
probability of effecting a change in "control" of the Company, as "control" is
generally or reasonably understood in the business community; then, upon the
occurrence of any such Event (from which it is agreed that the Employee would
suffer irreparable damage and harm which will be very difficult or impossible to
estimate), the Employee may elect, by written notice to the Company, to treat
the Event as constructive termination of his employment hereunder and a material
breach of this Agreement and whether or not the Employee so elects to actually
terminate his employment as an officer and director of the Company and its
Affiliates, the Employee shall receive and the Company will pay to the Employee,
within three days of such Event, subject to Article SECOND (F), an amount equal
to the sum of (1) 299% of the Employee's "base amount", as such term is defined
in Section 280G of the Internal Revenue Code of 1986, as amended, and
regulations pursuant thereto in effect at the time of termination of the
Employee's employment (collectively, the "Code"); and if Employee elects to
terminate his employment as a result of an Event, (2) the Pro-Rata Bonus, (3)
the Non-Compete Consideration, (4) the amount payable pursuant to Article THIRD
(E)(ii)(2) provided that the Employee
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elects such option (otherwise Employer shall continue to provide the insurance
coverages required under Article THIRD (E) (ii); and (5) all amounts payable
under Article TENTH. In the event of a dispute as to the amount, the matter
shall be referred to the independent public accountants and auditors who were
the auditors for the Company at the time of the occurrence of the Event (the
"Auditors"), and their determination shall be final, binding and conclusive.
(F) The parties agree that it is their intent to comply with the "safe
harbor" provisions of Section 280G of the Code. In order that the amounts
payable pursuant to this Agreement do not constitute "excess parachute payments"
within the meaning of said Section 280G, the payments and other consideration
provided for hereunder shall, to the extent necessary, be reduced accordingly so
that no such payment shall constitute an excess parachute payment. Employee
shall repay any amounts determined by the Auditors to be necessary to ensure
such compliance, which determination shall be final, binding and conclusive for
all purposes hereunder. If and to the extent that any payment or other
consideration provided for hereunder is determined by the Internal Revenue
Service to be an "excess parachute payment" within the meaning of said Section
280G and either a determination is reasonably made by Employee not to challenge
such determination or the challenge to such determination is not successful,
Employee shall, promptly upon the written request of the Company, repay such
amount to the Company as is necessary so that no such payment or other
consideration will constitute an "excess parachute payment". If the Employee
elects to challenge such determination, the Company shall fully cooperate with
Employee and support such challenge and shall pay all costs, expenses and
professional fees related to same."
4. Article THIRD (A) of the Agreement is amended to read in its
entirety as follows:
"THIRD:
(A) The Employee shall receive, during his employment hereunder in
accordance with the terms hereof, as salary commencing on the Commencement Date,
computed at the rate of not less than $170,000 per annum ("Base Salary"),
payable in such installments as shall accord with normal pay practices of the
Company, but not less often than monthly. The Base Salary may be increased but
shall not thereafter be decreased. As of July 1, 1997, Employee's Base Salary
is $200,000."
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5. Article THIRD (E) of the Agreement is amended to read in its
entirety as follows:
"(E) (i) Subject to subparagraph (ii) of this paragraph, during
the term of employment, the Company shall continue to include Employee and his
family in its group accident, hospitalization, major medical and dental
insurance plans, and, subject to paragraph (D) of Article THIRD, include
Employee in its group life insurance plan and provide disability insurance on a
non-cancelable basis to Employee, if available, and attempt, in addition, to
secure reasonable excess medical and hospitalization insurance covering Employee
and his spouse as beneficiary all at no cost to Employee.
(ii) In the event the Employee's employment hereunder is terminated
for any reason, including but not limited to an Event, the Employee shall be
entitled to elect to either (1) continue coverage for himself and his family
under the Company's accident, medical, dental and hospitalization plans which
are then currently or thereafter in force (collectively, the "Plan") for a
period of two years, and such coverage shall be required to provide coverage at
least equal to the coverage (as measured by the type and scope of coverage and
the level of benefits) (collectively, the "Level of Coverage") in effect on the
date of termination or (2) receive, within three (3) business days following
such termination, the discounted present value of the total amount sufficient to
pay all premiums payable or to become payable for such medical and
hospitalization coverage for a period of two years based on the premiums that
would have to be paid for comparable coverage, such discounted present value to
be determined using the lowest of the following: (v) the average of the
reference rate of the Company's principal long-term lender during the two years
prior to the Termination Date, (w) 120% of the "Applicable Federal Rate" as
determined pursuant to Section 1274 of the Internal Revenue Code, (x) the 30
year Treasury bond rate at the Termination Date, (y) the rate which would be
used in determining the cost of an annuity for an amount equal to the sum of the
Entitlements and (z) the interest rate determined under the regulations of the
Pension Benefit Guaranty Corporation for determining the present value of a lump
sum distribution of less than $25,000, as such rates are determined under the
rules in effect prior to the Retirement Protection Act."
6. A new Article TENTH shall be added to the Agreement as follows:
"TENTH: (a) In the event the Company's principal place of business
is, or is expected or planned to be, moved to Charleston, South Carolina during
the term of the Agreement, and
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(I) Employee elects to remain employed by the Company and move to South
Carolina in connection therewith, or (II) if Employee incurs any costs in
contemplation or anticipation of such a move, the Company will reimburse
Employee for all reasonable expenses incurred by Employee in connection with or
in anticipation of relocating Employee's residence to South Carolina, including
but not limited to (i) all expenses of three round trips to the Charleston area
for Employee and Employee's wife for house-hunting purposes, (ii) the cost of
temporary lodging for Employee's wife and Employee prior to relocation and, if
necessary, following Employee's relocation, (iii) if the Employee relocates to
South Carolina, the cost of transportation of Employee and Employee's spouse and
all furnishings, household goods and autos to Employee's new residence and (iv)
the cost of the real estate broker's fees, if any, and other out-of-pocket costs
incurred by Employee as a result of leasing a new residence. In addition, the
Company shall reimburse Employee for any loss Employee may incur as a result of
the sale of Employee's residence in Connecticut. The determination of whether
Employee has incurred a loss and the size of the loss, if any, resulting from
the sale of Employee's residence will include, but not be limited to, any
selling expenses Employee incurs in connection with such sale, including but not
limited to attorney's fees and broker's charges.
(b) In the event that Employee acquires or commits to acquire a
residence in the Charleston area, or signs a lease for a residence in South
Carolina, and during the term of this Agreement Employee's employment with the
Company terminates for any reason whatsoever, the Company will, (i) if Employee
and/or Employee's spouse (if Employee is not then living) thereafter relocates
from South Carolina to New York, New Jersey or Connecticut within four months
following the later of such termination or Employee's notice of resignation,
reimburse Employee and/or his spouse for all reasonable expenses incurred by
Employee and/or his spouse in connection with such relocation, to the same
extent as provided in Article TENTH (a) above, and (ii) reimburse Employee for
any loss Employee may incur in connection with the sale of Employee's residence
(or any and all costs and expenses which Employee incurs as a result of the
termination of any lease for rental property, if applicable, including but not
limited to the payment of all rent and utilities for the remaining term of the
lease) in South Carolina, with the existence and amount of such loss to be
calculated in the same manner as provided in Article TENTH (a) above with
respect to the sale of Employee's Connecticut residence. Notwithstanding the
foregoing, in the event Employee relocates from South Carolina in connection
with obtaining new employment and Employee's new employer agrees to reimburse
Employee for some
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or all of the expenses which the Company would otherwise be required to
reimburse Employee under this Article TENTH (b), the Company's obligation under
this Article TENTH (b) will be reduced, dollar-for-dollar, by the amount of
reimbursement to be received by Employee from Employee's new employer.
(c) Notwithstanding anything stated in this Agreement to the contrary,
if the Employee enters into a lease agreement for a residence in South Carolina,
the Company hereby agrees to reimburse the Employee for all rent, utilities,
insurance, maintenance, fees, deposits and all other costs and expenses related
to such lease that are paid or incurred by Employee (collectively, the "Lease
Expenses") prior to his relocation to South Carolina, and further, if the
Employee's employment is terminated for any reason whatsoever, including but not
limited to Employee's resignation, the Company hereby acknowledges and agrees
that the Employee shall be entitled to assign such lease to the Company, and the
Company will promptly take all actions necessary to complete and accomplish such
assignment (or pay all costs, expenses and fees necessary or required by the
lessor to terminate said lease with a full release to Employee), and, in any
event, the Company will pay and/or reimburse Employee for all Lease Expenses and
indemnify, defend and hold harmless the Employee and his spouse from any and all
direct and indirect costs, expenses, liabilities and damages in any way related
to or resulting from said lease or the assignment or termination of same.
(d) All reimbursements to be made to Employee under this Article TENTH
shall be payable to Employee on demand and subject only to receipt of reasonable
supporting documentation and all such reimbursements and all costs and expenses
incurred by Company on behalf of Employee shall be on a "grossed-up" basis to
also include reimbursement for any and all income and employment taxes arising
from the reimbursement provided or costs incurred hereby."
5. A new Article ELEVENTH shall be added to the Agreement as
follows:
"ELEVENTH: Litigation. All litigation or inquiries by third parties
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(for example, but not limited to, those by shareholders - direct or derivative -
or government agencies) arising out of or in connection with this Agreement or
Employee's performance hereunder, against either the Company, its Affiliates or
the Employee or any of them, shall be defended or opposed by the parties hereto,
as the case may be, to support this Agreement and the Employee's performance
hereunder, and counsel for the parties and the costs, fees and expenses thereof
shall be borne
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by the Company. The Company further undertakes to indemnify Employee for all
acts or omissions as an officer or director or employee of the Company or any
subsidiary thereof, to the full extent provided or permitted under Delaware law,
against all damages, liabilities, expenses and costs (including reasonable
counsel fees) in any action, claim or proceeding commenced (a) during (i) the
term of this Agreement or (ii) the period Employee is providing consulting
services, or (b) at any time after the termination of employment or consulting
services or the expiration of this Agreement."
In all other respects the Agreement, as amended, shall continue in
full force and effect.
IN WITNESS WHEREOF, each of the parties hereto has executed this
Amendment to the Agreement as of the day and year first above written.
THE UNION CORPORATION
By: /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
President and Chief
Executive Officer
ACCEPTED AND AGREED:
/s/ Xxxxxxxx X. Xxxx
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Xxxxxxxx X. Xxxx
