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Exhibit 10-J(7)
EMPLOYMENT AGREEMENT
BETWEEN
XXXX CORPORATION
AND
XXXXX X. XXXXXXX
DATED AUGUST 31, 1999
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TABLE OF CONTENTS
SECTION PAGE
Introduction..................................................................1
1. Employment and Term.......................................................1
2. Position and Duties of the Executive......................................2
(a) Position.........................................................2
(b) Duties...........................................................2
(c) Location of Office...............................................3
3. Compensation..............................................................3
(a) Salary...........................................................3
(b) Additional Compensation..........................................3
(c) Incentive, Stock, Savings and Retirement Plans...................4
(d) Welfare Benefit Plans............................................4
(e) Expenses.........................................................4
(f) Fringe Benefits..................................................5
(g) Office and Support Staff.........................................5
(h) Vacation and Other Absences......................................5
(i) Supplemental Payment.............................................5
(j) Retainer.........................................................5
4. Termination of Employment.................................................5
(a) Death or Disability..............................................5
(b) Cause............................................................6
(c) Good Reason......................................................7
(d) Notice of Termination............................................8
(e) Date of Termination..............................................8
(f) Employment Period................................................8
5. Obligations of the Corporation Upon Termination...........................9
(a) Termination for Good Reason or Other Than for Cause..............9
(b) Termination for Cause; Other Than for Good Reason...............10
(c) Termination Upon Death or Disability............................10
(d) Expiration of Scheduled Employment Period.......................11
(e) Resolution of Disputes..........................................11
6. Non-exclusivity of Rights................................................11
7. Full Settlement..........................................................11
8. Change of Control Payments...............................................12
9. Confidential Information.................................................14
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SECTION PAGE
10. Competition; Solicitation; Disparagement.................................15
11. Successors...............................................................16
12. Certain Definitions......................................................17
(a) Beneficiary.....................................................17
(b) Change of Control...............................................17
(c) Change of Control Date..........................................18
13. Amendment or Modification; Waiver........................................18
14. Miscellaneous............................................................18
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DEFINED TERMS
DEFINED TERMS A SECTION PAGE
--------------- ------- ----
Accounting Firm 8(c) 12
Accrued Obligations 5(a)(i) 9
ACP 3(b) 3
Acquisition Introduction 1
Affiliate 2(a) 2
Agreement Introduction 1
Annual Base Salary 3(a) 3
Annual Bonus 3(b) 3
Beneficial Owner 12(b) 18
Beneficiary 12(a) 17
Board 3(a) 3
Cause 4(b) 6
Change of Control 12(b) 16
Change of Control Date 12(c) 19
Code 8(b) 12
Committee 3(a) 3
Competitor 10(a) 15
Competition 10(b) 15
control, controls, controlled 2(a) 2
Corporation Introduction 1
9(a) 14
11(b) 16
14(e) 19
Xxxx Options 3(c) 4
Date of Termination 4(e) 8
Deferred Compensation 10(d) 17
Disability 4(a)(ii) 6
Disability Effective Date 4(a)(ii) 6
Disparagement 10(b) 16
Echlin Introduction 1
Echlin Options 3(c) 4
Echlin Option Plan 3(c) 4
Echlin Severance Plan Introduction 1
Employment Period 1(a) 1
Exchange Act 12(b) 18
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A Each listed term is intended to include both the singular and plural form of
the term.
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DEFINED TERMS SECTION PAGE
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Excise Tax 8(b) 12
Executive Introduction 1
Good Reason 4(c) 7
Gross-Up Payment 8(b) 12
1997 PUP Award 3(c) 4
Notice of Termination 4(d) 8
Option Plan 3(c) 4
Other Benefits 5(a)(iv) 10
Payment 8(b) 12
Person 12(b) 17
Prior Agreement Introduction 1
PUP 3(c) 4
Restricted Stock Agreement 3(c) 4
Restricted Stock Plan 3(c) 4
Short-Term Award 3(b) 3
Subsidiary 2(a) 2
Supplemental Payment 3(i) 5
Transition Period 1(a) 1
Underpayment 8(c) 13
Welfare Benefits 3(d) 4
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EMPLOYMENT AGREEMENT (the "Agreement") made and entered into as
of this 31st day of August, 1999, by and between XXXX CORPORATION, a Virginia
corporation whose principal place of business is located at 0000 Xxxx Xxxxxx,
Xxxxxx, Xxxx (the "Corporation"), and Xxxxx X. XxXxxxx (the "Executive");
WHEREAS, Echlin Inc., a Connecticut corporation ("Echlin"),
became a wholly-owned subsidiary of the Corporation pursuant to the Agreement
and Plan of Merger by and among the Corporation, Echo Acquisition Corp.
and Echlin, dated May 3, 1998 (the "Acquisition"); and
WHEREAS, prior to the Acquisition, Executive was a principal
executive officer of Echlin; and
WHEREAS, the Corporation wishes to assure itself of the
continuing services of the Executive and to assure the Executive of continued
employment during the period of employment hereunder; and
WHEREAS, the Executive is willing to commit himself to remain
in the employ of the Corporation during such period on terms and conditions
substantially similar to those on which other senior executive officers of the
Corporation are employed, and to forego opportunities elsewhere during such
period; and
WHEREAS, the Executive was a participant in the Echlin Change
in Control Severance Policy (the "Echlin Severance Plan"); and
WHEREAS, the Executive and Echlin entered into a Severance and
Indemnification Agreement dated as of April 23, 1998, as amended from time to
time thereafter (the "Prior Agreement") which amended and replaced the
Executive's rights under the Echlin Severance Plan; and
WHEREAS, the parties wish to supersede and replace the Prior
Agreement in its entirety;
NOW, THEREFORE, IN CONSIDERATION of the mutual promises,
covenants and agreements set forth below, it is hereby agreed as follows:
1. Employment and Term.
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(a) The Corporation agrees to employ the Executive, and the
Executive agrees to be employed by the Corporation, in accordance with the terms
and provisions of this Agreement, for the period set forth below (the
"Employment Period"). In addition, the Executive agrees to provide consulting
services for the Corporation, for the period set forth below (the "Transition
Period").
(b) The Employment Period under this Agreement shall commence
as of July 9, 1998, and shall continue, subject only to the provisions of
Section 4 below relating to termination of employment, until the close of
business on July 16, 2000. The Transition Period shall commence as of July 17,
2000, and shall continue until the close of business on August 31,
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2000. At the end of the Transition Period, the Executive and the Corporation may
consider extending the Transition Period under such conditions as are mutually
agreeable; PROVIDED, HOWEVER, that the Corporation shall not be required to
extend the Transition Period.
(c) The Executive will not be required to provide consulting
services during the Transition Period at any particular time or location, and he
may provide those services by telephone or facsimile, or by any other means
reasonably agreeable to both parties. During the Transition Period, the
Corporation shall not control the instrumentalities, details, or means by which
the Executive achieves the results for which he is retained under this
Agreement. It is expected that during the Transition Period the Executive will
provide only advisory and consulting services, and, consequently, he will not be
subject to the supervision or control of the Corporation. The Executive shall
choose the time and manner for performing the consulting services according to
his own routines and schedules, except as provided in Section 2(b). During the
Transition Period, the Executive shall set his own hours of work, and there
shall be no obligation by the Executive to submit reports relating to the method
in which consulting services are rendered under this Agreement. It is understood
and agreed that during the Transition Period the Executive is not, and shall not
be deemed to be, an agent, employee, or servant of the Corporation (or its
Subsidiaries or Affiliates) and will be engaged only in an independent
contractor and consultant capacity, and will have no power or authority to act,
bind, or make commitments on behalf of the Corporation (or its Subsidiaries or
Affiliates) without the prior written authority of the Corporation. As an
independent contractor, no tax or other deductions shall be made by the
Corporation from the Executive's consulting fees, and the Executive assumes all
employment tax obligations in connection with same.
2. Position and Duties of the Executive.
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(a) POSITION. The office(s), title(s), reporting
responsibility, duties and responsibilities of the Executive during the
Employment Period and Transition Period shall be summarized in Exhibit A to this
Agreement.
During the Employment Period the Executive shall, without
compensation other than that herein provided, also serve, if and when elected,
as director of any Subsidiary, division or Affiliate of the Corporation.
For all purposes of this Agreement, (i) a "Subsidiary" shall
mean a corporation or other entity, of which 50% or more of the voting
securities or other equity interests is owned directly, or indirectly through
one or more intermediaries, by the Corporation, and (ii) an "Affiliate" shall
mean a corporation or other entity which is not a Subsidiary and which directly,
or indirectly, through one or more intermediaries, controls, or is controlled
by, or is under common control with, the Corporation. For the purpose of this
definition, the terms "control," "controls" and "controlled" mean the
possession, direct or indirect, of the power to direct or cause the direction of
the management and policies of a corporation or other entity, whether through
the ownership of voting securities, by contract, or otherwise.
(b) DUTIES. Throughout the Employment Period the Executive
shall devote his full time and undivided attention during normal business hours
to the business and affairs of
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the Corporation except for reasonable vacations and except for illness or
incapacity, but nothing in this Agreement shall preclude the Executive from
devoting reasonable periods required for:
(i) serving as a director or member of a committee or any
organization involving no conflict of interest with the interests of
the Corporation;
(ii) delivering lectures, fulfilling speaking engagements,
teaching at educational institutions;
(iii) engaging in charitable and community activities; and
(iv) managing his personal investments;
provided that such activities do not interfere with the regular performance of
his duties and responsibilities under this Agreement. During the Transition
Period, the Executive shall devote such time to the performance of his duties as
may be mutually agreed with the President of the Corporation.
(c) LOCATION OF OFFICE. During the Employment Period, the
office of the Executive shall be located in, or within 35 miles of, Branford,
Connecticut, and the Executive shall not be required to locate his office
elsewhere without his prior written consent. During the Transition Period, the
Executive may perform his services at such location, or at another mutually
agreeable location.
3. Compensation.
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During the Employment Period, the Executive shall receive the
following compensation for his services:
(a) SALARY. The Executive shall be paid an annual base salary
during the Employment Period payable not less often than monthly, at the rate of
not less than $57,833 per month with such increases as shall be awarded from
time to time at the discretion of the Compensation Committee (the "Committee")
of the Board of Directors of the Corporation (the "Board") (the "Annual Base
Salary").
(b) ADDITIONAL COMPENSATION. Commencing January 1, 1999 and for
the remainder of the Employment Period, the Executive shall be eligible to
receive annual short-term incentive awards or bonuses (such award or bonus
described in this Section 3(b) is hereinafter referred to as "Short-Term Award"
or "Annual Bonus") from the Xxxx Corporation Additional Compensation Plan, and
from any successor or replacement plan (the Xxxx Corporation Additional
Compensation Plan and such successor or replacement plans being referred to
herein collectively as the "ACP"), in accordance with the terms thereof. Each
Annual Bonus shall be paid no later than the end of the third month of the
fiscal year next following the fiscal year for which the Annual Bonus is
awarded, unless the receipt of such Annual Bonus is deferred in accordance with
the terms of the ACP, or a separate deferred compensation agreement. For the
period from January 1, 2000 through July 16, 2000, the Executive shall be
eligible to earn a pro rata bonus pursuant to the terms of the ACP based upon
the performance results for the Corporation's fiscal year beginning January 1,
2000, which amount shall be payable following
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the end of such fiscal year under this Agreement if such pro rata bonus is not
payable under the ACP.
(c) INCENTIVE, STOCK, SAVINGS AND RETIREMENT PLANS. Commencing
October 1, 1998, during the Employment Period, the Executive shall be a
participant in the Xxxx Corporation 1997 Stock Option Plan (the "Option Plan")
and shall receive annual grants of stock options in amounts commensurate with
Executive's position and, commencing on the date hereof, the Executive shall be
eligible to participate during the Employment Period in any and all other
incentive, stock, savings and retirement plans, practices or policies generally
provided to similarly-situated executives of the Corporation; PROVIDED, THAT,
the Executive shall not be eligible to receive benefits from a plan, policy or
arrangement of the Corporation to the extent the Executive receives or is
receiving a similar benefit pursuant to a plan, policy or arrangement of Echlin.
The Executive agrees that he will not commence receiving any benefits from any
retirement or savings plan of the Corporation or Echlin until August 31, 2000.
On or about the date of the execution of this Agreement, the Executive shall
receive a grant of 11,000 shares of restricted stock of the Corporation pursuant
to the 1999 Restricted Stock Plan (the "Restricted Stock Plan"), which shares
shall vest in accordance with the terms of the Restricted Stock Agreement
entered into between the Corporation and the Executive, dated August 11, 1999
(the "Restricted Stock Agreement"). With respect to all options granted to the
Executive under the Option Plan (the "Dana Options") or granted to the Executive
under the Echlin Inc., 1992 Stock Option Plan, as amended and restated as of
April 23, 1998 (the "Echlin Options" and the "Echlin Option Plan"), the
Corporation shall vest all Dana Options and Echlin Options and permit the
Executive to be treated as having terminated employment as a result of
retirement pursuant to Section 10(b) of the Option Plan or Section 8(g) of the
Echlin Option Plan, as applicable, upon the end of the scheduled Employment
Period; PROVIDED, that, the Executive has remained employed by the Corporation
through such date. The Executive's award granted under the Echlin Inc.
Performance Unit Plan, amended and restated as of April 23, 1998 (the "PUP"), on
September 1, 1997 (the "1997 PUP Award"), shall vest in accordance with the
terms of the PUP; PROVIDED, HOWEVER, that (1) in the event of a termination of
the Executive's employment before July 16, 2000 by the Corporation without Cause
or by the Executive for Good Reason, the 1997 PUP Award shall be vested on a pro
rata basis through July 16, 2000 and (2) in the event of a termination of the
Executive's employment before July 16, 2000 by the Company for Cause or by the
Executive without Good Reason, the 1997 PUP Award shall be forfeited.
(d) WELFARE BENEFIT PLANS. During the Employment Period, the
Executive will be eligible to participate in the welfare benefit plans, policies
and arrangements generally provided to similarly-situated executives of the
Corporation (the "Welfare Benefits"); PROVIDED, THAT, the Executive shall not be
eligible to receive benefits from a plan, policy or arrangement of the
Corporation to the extent the Executive receives or is receiving a similar
benefit pursuant to a plan, policy or arrangement of Echlin, and the Executive
hereby agrees that the Supplemental Payment (as defined in Section 3(i) below)
shall act as an offset to any amounts otherwise due to the Executive under any
severance plan or policy of the Corporation or Echlin.
(e) EXPENSES. During the Employment Period, the Executive shall
be entitled to receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the polices, practices and procedures of the
Corporation from time to time in effect, on a basis comparable to that of
similarly-situated executives of the Corporation. During
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the Transition Period, the Corporation shall continue to provide the Executive
with the same level of expense reimbursement; PROVIDED, that that such expense
reimbursement shall be adjusted in the event the Corporation's expense
reimbursement policies, practices and procedures are adjusted from time to time.
(f) FRINGE BENEFITS. During the Employment Period, the
Executive shall be entitled to fringe benefits, in accordance with the plans,
practices, programs and policies of the Corporation from time to time in effect,
on a basis comparable to similarly-situated executives of the Corporation.
(g) OFFICE AND SUPPORT STAFF. During the Employment Period, the
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to personal secretarial and other
assistance, comparable to those received by other similarly-situated executives
of the Corporation. Such level of office(s) and furnishings and other
appointments shall be continued during the Transition Period.
(h) VACATION AND OTHER ABSENCES. During the Employment Period,
the Executive shall be entitled to paid vacation and such other paid absences
whether for holidays, illness, personal time or any similar purposes, in
accordance with the plans, policies, programs and practices of the Corporation
in effect from time to time, comparable to those received by similarly-situated
executives of the Corporation.
(i) SUPPLEMENTAL PAYMENT. The Corporation shall pay the
Supplemental Payment (as defined below) to the Executive (A) if the Executive's
employment terminates before July 16, 2000, not later than 30 days after the
Date of Termination or (B) if the Executive continues to perform services as an
employee through July 16, 2000, not later than October 1, 2000. The Supplemental
Payment means (A) the amount set forth on Exhibit B, plus (B) interest at the
two-year Treasury rate as specified in the Federal Reserve Statistical Release
H.15 on August 13, 1999 (5.71 percent per annum), as accrued from August 1, 1999
through the date of payment. Notwithstanding the foregoing, the Executive shall
not be entitled to the Supplemental Payment in the event of a termination of the
Executive's employment by the Corporation prior to July 16, 2000 for Cause
(other than for Cause which is solely as a result of (A) the Executive's
material breach of Section 2(b) hereof and/or (B) Disparagement, which breach
does not otherwise result in any other provision of the Cause definition being
triggered).
(j) RETAINER. The Corporation shall pay the Executive a
retainer of $10,000 on July 16, 2000 in consideration for the services to be
provided by the Executive to the Corporation during the Transition Period;
provided that the Executive remains employed with the Corporation through July
16, 2000.
4. Termination of Employment.
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(a) DEATH OR DISABILITY.
(i) The Executive's employment shall terminate automatically
upon the Executive's death during the Employment Period.
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(ii) If the Corporation determines in good faith that the
Disability (as defined below) of the Executive has occurred during the
Employment Period, it may give to the Executive written notice in accordance
with Section 14(b) below of its intention to terminate the Executive's
employment. In such event, the Employment Period shall terminate effective on
the 30th day after receipt of such notice to the Executive (the "Disability
Effective Date"), PROVIDED, that within the 30 days after such receipt, the
Executive shall not have returned to full-time performance of the Executive's
duties as an employee. For purposes of this Agreement, "Disability" shall mean
the absence of the Executive from the Executive's duties with the Corporation on
a full-time basis as an employee for 180 consecutive business days as a result
of incapacity due to mental or physical illness which is determined to be total
and permanent by a physician selected by the Corporation or its insurers and
acceptable to the Executive or the Executive's legal representative (such
agreement as to acceptability not to be withheld unreasonably).
(b) CAUSE. The Corporation may terminate the Executive's
employment during the Employment Period for Cause. For purposes of this
Agreement, the termination of the Executive's employment shall be deemed to have
been for "Cause" only
(i) if termination of his employment shall have been the
result of his conviction of, or plea of guilty or nolo contendere to,
the charge of having committed a felony which conviction has, or is
reasonably likely to have, material effect on the Corporation or its
business or reputation, as determined by the Board in its sole
discretion (whether or not such conviction is later reversed for any
reason), or
(ii) if there has been a breach by the Executive during
the Employment Period of the provisions of Section 2(b), relating to
the time to be devoted to the affairs of the Corporation, of Section
9, relating to confidential information, or of Section 10, relating
to Competition, Solicitation or Disparagement, and such breach
results in demonstrably material injury to the Corporation, and with
respect to any alleged breach of Section 2(b) hereof, the Executive
shall have either failed to remedy such alleged breach within thirty
days from his receipt of written notice from the Secretary of the
Corporation after notice to the Executive and an opportunity to be
heard demanding that he remedy such alleged breach, or shall have
failed to take all reasonable steps to that end during such
thirty-day period and thereafter.
Anything in this Section 4(b) or elsewhere in this Agreement to
the contrary notwithstanding, the employment of the Executive shall in no event
be considered to have been terminated by the Corporation for Cause if
termination of his employment took place
(1) as the result of bad judgment or negligence on the part of
the Executive, or
(2) because of an act or omission believed by the Executive in
good faith to have been in or not opposed to the interests of
the Corporation, or
(3) for any act or omission in respect of which a determination
could properly be made that the Executive met the applicable
standard of conduct prescribed for indemnification or
reimbursement or payment of expenses under (A) the Bylaws
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of the Corporation, or (B) the laws of the State of Virginia,
or (C) the directors' and officers' liability insurance of the
Corporation, in each case either as in effect at the time of
this Agreement or in effect at the time of such act or
omission, or
(4) as the result of an act or omission which occurred more
than twelve calendar months prior to the Executive's having
been given notice of the termination of his employment for such
act or omission unless the commission of such act or such
omission could not at the time of such commission or omission
have been known to a member of the Board, in which case more
than twelve calendar months from the date that the commission
of such act or such omission was or could reasonably have been
so known, or
(5) as the result of a continuing course of action which
commenced and was or could reasonably have been known to a
member of the Board of the Corporation more than twelve
calendar months prior to notice having been given to the
Executive of the termination of his employment.
(c) GOOD REASON. The Executive may terminate his employment
during the Employment Period for Good Reason. For purposes of this Agreement,
"Good Reason" shall mean the occurrence of any of the following events:
(i) During the Employment Period, failure to elect or
reelect the Executive to, or removal of the Executive from, the
office(s) described in Section 2(a) above and intended to be
summarized in Exhibit A to this Agreement.
(ii) A significant change in the nature or scope of the
authorities, powers, functions or duties attached to the position
described in Section 2 above and intended to be summarized in Exhibit
A to this Agreement, or a reduction in compensation during the
Employment Period, which is not remedied within 30 days after receipt
by the Corporation of written notice from the Executive.
(iii) A breach by the Corporation of any provision of this
Agreement not embraced within the foregoing clauses (i) or (ii) of
this Section 4(c) which is not remedied within 30 days after receipt
by the Corporation of written notice from the Executive.
(iv) The liquidation, dissolution, consolidation or merger
of the Corporation or transfer of all or a significant portion of its
assets unless a successor or successors (by merger, consolidation or
otherwise) to which all or a significant portion of its assets have
been transferred shall have assumed all duties and obligations of the
Corporation under this Agreement but without releasing the
corporation that is the original party to this Agreement;
PROVIDED, that in any event set forth in this Section 4(c), the Executive shall
have elected to terminate his employment under this Agreement, upon not less
than ten and not more than ninety days' advance written notice to the
Corporation, attention of the Secretary, given, except in the case of a
continuing breach, within three calendar months after (A) failure to be so
elected or reelected, or removal, (B) expiration of the thirty-day cure period
with respect to such event, or
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(C) the closing date of such liquidation, dissolution, consolidation, merger or
transfer of assets, as the case may be.
An election by the Executive to terminate his employment under
the provisions of this Section 4(c) shall not be deemed a voluntary termination
of employment by the Executive for the purpose of this Agreement or any plan or
practice of the Corporation.
(d) NOTICE OF TERMINATION. Any termination by the Corporation
for Cause, or by the Executive for Good Reason, shall be communicated by Notice
of Termination to the other party hereto given in accordance with Section 14(b)
below. For purposes of this Agreement, a "Notice of Termination" means a written
notice which
(i) indicates the specific termination provision in this
Agreement relied upon,
(ii) to the extent applicable, sets forth in reasonable
detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so
indicated and
(iii) if the Date of Termination (as defined in Section
4(e) below) is other than the date of receipt of such notice,
specifies the termination date (which date shall be not more than
fifteen days after the giving of such notice).
(e) DATE OF TERMINATION. "Date of Termination" means
(i) if the Executive's employment is terminated by the
Corporation for Cause, or by the Executive for Good Reason, the date
of receipt of the Notice of Termination or any later date specified
therein, as the case may be,
(ii) if the Executive's employment is terminated by the
Corporation other than for Cause or Disability, the Date of
Termination shall be the date on which the Corporation notifies the
Executive of such termination;
(iii) if the Executive's employment is terminated by the
Executive without Good Reason, the Date of Termination shall be the
date of the Executive's resignation, unless a later date is mutually
agreed upon by the Executive and the Corporation; and
(iv) if the Executive's employment is terminated by reason
of death or Disability, the Date of Termination shall be the date of
death of the Executive or the Disability Effective Date, as the case
may be.
(f) EMPLOYMENT PERIOD. The Employment Period shall end on the
Date of Termination.
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5. Obligations of the Corporation Upon Termination.
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(a) TERMINATION FOR GOOD REASON OR OTHER THAN FOR CAUSE. If,
during the Employment Period, the Corporation shall terminate the Executive's
employment other than for Cause or the Executive shall terminate his employment
for Good Reason, the Corporation shall have no further obligations to the
Executive except as set forth below:
(i) the Corporation shall pay the Executive in a lump sum
in cash within 30 days after the Date of Termination the sum of: (A)
the Executive's Annual Base Salary through the Date of Termination to
the extent not therefore paid, (B) any accrued vacation pay, to the
extent not therefore paid (the sum of (A) and (B) shall be
hereinafter referred to as the "Accrued Obligations"), (C) the Base
Salary from the Date of Termination through July 16, 2000, and (D) to
the extent not therefore paid, the Supplemental Payment;
(ii) during the period beginning on the Date of
Termination and ending on the scheduled end of the Employment Period,
or such longer period as any plan, program, practice or policy may
provide, the Corporation shall continue medical, dental and life
insurance benefits to the Executive and/or the Executive's family at
least equal to those which would have been provided to them in
accordance with the plans, programs, practices and policies described
in Section 3(d) above if the Executive's employment had not been
terminated; PROVIDED, that the Executive shall remain responsible for
providing any required "employee" contributions, and the Corporation
may provide medical benefits by making certain "COBRA" continuation
health coverage contributions on behalf of the Executive, PROVIDED,
FURTHER, that if the Executive becomes reemployed with another
employer and is eligible to receive medical or other welfare benefits
under another employer-provided plan, the medical and other welfare
benefits described herein shall be secondary to those provided under
such other plan during such applicable period of eligibility;
(iii) (A) all Xxxx Options granted to the Executive
pursuant to Section 3(c) hereof shall be fully vested on the Date of
Termination, (B) the Corporation shall permit the Executive to be
treated as having terminated employment as a result of retirement
pursuant to Section 10(b) of the Option Plan with respect to the Xxxx
Options, and pursuant to Section 8(g) of the Echlin Option Plan with
respect to the Echlin Options; and (C) the restricted stock granted
to the Executive pursuant to Section 3(c) hereof shall be vested on
the Date of Termination to the extent provided in the Restricted
Stock Agreement.
(iv) to the extent not therefore paid or provided, the
Corporation shall timely pay or provide to the Executive and/or the
Executive's family any other amounts or benefits required to be paid
or provided or which the Executive and/or the Executive's family is
eligible to receive pursuant to this Agreement and under any plan,
program, policy or practice or contract or agreement of the
Corporation in which the Executive participated (such other amounts
and benefits shall be referred to below as the "Other Benefits");
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(v) the 1997 PUP Award shall vest in accordance with
Section 3(c) hereof; and
(vi) the Corporation shall pay the Executive following the
end of each bonus year ending after the Date of Termination and on or
before December 31, 2000, the Annual Bonus for each such plan year
(or portion thereof) pursuant to the terms of the ACP, based on the
assumption that the Executive was a participant in such program
through July 16, 2000.
(b) TERMINATION FOR CAUSE; OTHER THAN FOR GOOD REASON. (i) If
the Executive's employment shall be terminated by the Corporation for Cause or
by the Executive without Good Reason during the Employment Period, the
Corporation shall have no further obligations to the Executive other than to
provide the Accrued Obligations, the Other Benefits and, to the extent provided
in Section 3(i), the Supplemental Payment to the extent not therefore paid.
(c) TERMINATION UPON DEATH OR DISABILITY. If the Executive's
employment terminates by reason of death or Disability, the Corporation shall
have no further obligations to the Executive or to his legal representative or
Beneficiary except to provide the payments and benefits set forth below.
(i) In the event of the death of the Executive during the
Employment Period, the Beneficiary of the Executive shall be entitled
to the Accrued Obligations and the compensation provided for in
Section 3(a) above for the month in which death shall have taken
place, at the rate being paid at the time of death, and the
Employment Period shall be deemed to have ended as of the close of
business on the last day of the month in which death shall have
occurred but without prejudice to any payments due in respect of the
Executive's death. The Corporation shall also provide the Other
Benefits and pay the Beneficiary a pro rata bonus through the Date of
Termination for the plan year in which the Executive's death occurs,
pursuant to the terms of the ACP, following the end of the applicable
bonus year. In addition, the Corporation shall pay the Beneficiary
the Supplemental Payment to the extent not therefore paid, within
thirty days following the Executive's death. The 1997 PUP Award shall
vest in accordance with Section 3(c) hereof.
(ii) In the event of the Disability of the Executive
during the Employment Period, the Executive shall be entitled to the
Accrued Obligations and the compensation provided for in Section 3(a)
above, at the rate being paid on the Disability Effective Date, for
the period of such Disability but not in excess of six months. The
amount of any payments due under this Section 5(c)(ii) shall be
reduced by any payments to which the Executive may be entitled for
the same period because of disability under any disability or pension
plan of the Corporation or of any Subsidiary or Affiliate thereof.
The Corporation shall also provide the Other Benefits. In addition,
the Corporation shall pay the Executive the Supplemental Payment,
within thirty days following the Executive's Disability Effective
Date to the extent not therefore paid. The 1997 PUP Award shall vest
in accordance with Section 3(c). The Corporation shall also pay the
Executive a pro rata bonus through the Date of Termination for the
plan year in which the
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Executive's Disability occurs, pursuant to the terms of the ACP,
following the end of the applicable bonus year.
(d) EXPIRATION OF SCHEDULED EMPLOYMENT PERIOD. Upon the
expiration of the scheduled Employment Period, the Corporation shall have no
obligations to the Executive except as provided in this Agreement and in the
Side Letter between the Corporation and the Executive, dated August 31, 1999,
relating to health care benefits.
(e) RESOLUTION OF DISPUTES. In the event that the Executive's
employment shall be terminated by the Corporation during the Employment Period
and such termination is alleged to be for Cause, or the Executive's right to
terminate his employment under Section 4(c) above shall be questioned by the
Corporation, or the Corporation shall withhold payments or provision of benefits
for any other reason, the Executive shall have the right, in addition to all
other rights and remedies provided by law, to seek arbitration within the
Chicago, Illinois area under the rules of the American Arbitration Association
by serving a notice to arbitrate upon the Corporation within ninety days after
having received notice of termination of his employment or notice in any form
that the termination of his employment under Section 4(b) above is subject to
question or that the Corporation is withholding or proposes to withhold payments
or provision of benefits.
6. Non-exclusivity of Rights.
--------------------------
Except as provided in Sections 5(a)(ii), 5(b), 5(c) and 14(f),
nothing in this Agreement shall prevent or limit the Executive's continuing or
future participation in any plan, program, policy or practice provided by the
Corporation or any of its Affiliated Companies and for which the Executive may
qualify, nor shall anything herein limit or otherwise affect such rights as the
Executive may have under any contract or agreement entered into after the date
hereof with the Corporation or any of its Affiliated Companies. Amounts which
are vested benefits or which the Executive is otherwise entitled to receive
under any plan, policy, practice or program of, or any contract or agreement
entered into after the date hereof with, the Corporation or any of its
Affiliated Companies at or subsequent to the Date of Termination shall be
payable in accordance with such plan, policy, practice or program or contract or
agreement except as explicitly modified by this Agreement.
7. Full Settlement.
----------------
The Corporation's obligation to make the payments provided for
in this Agreement and otherwise to perform its obligations hereunder shall not
be affected by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Corporation may have against the Executive or others,
except as provided in Section 10(d) hereof. In no event shall the Executive be
obligated to seek other employment or take any other action by way of mitigation
of the amounts payable to the Executive under any of the provisions of this
Agreement and, except as provided in Sections 5(a) (ii) and 10(d) hereof, such
amounts shall not be reduced whether or not the Executive obtains other
employment.
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8. Change of Control Payments.
---------------------------
(a) If, during the Employment Period, (i) a Change of Control
occurs and (ii) the Executive is employed by the Corporation, a Subsidiary or an
Affiliate on the Change of Control Date, and the Executive has not delivered to
the Corporation a written waiver of right under this Section 8(a) within fifteen
(15) days of the occurrence of the Change of Control or within fifteen (15) days
of the Corporation's written notice to the Executive of the Change of Control,
the Supplemental Payment shall be paid to the Executive in a lump sum within
thirty days following the Change of Control Date. The Corporation shall give the
Executive prompt written notice of a Change of Control.
(b) Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that any payment or distribution involving
the Acquisition to or for the benefit of the Executive (whether paid or payable
or distributed or distributable pursuant to the terms of this Agreement or
otherwise, but determined without regard to any additional payments required
under this Section 8) (a "Payment") would be subject to the excise tax imposed
by Section 4999 (or any successor provision) of the Internal Revenue Code of
1986, as amended, (the "Code") or any interest or penalties are incurred by the
Executive with respect to such excise tax (such excise tax, together with any
such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") from the Corporation in an amount such that,
after payment by the Executive of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any Excise
Tax imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(c) Subject to the provisions of subsection 8(c)(iii) hereof,
all determinations required to be made under this subsection 8(c), including
whether a Gross-Up Payment is required and the amount of such Gross-Up Payment,
shall be made by PricewaterhouseCoopers LLP or its successor firm (the
"Accounting Firm") which shall provide detailed supporting calculations both to
the Corporation and the Executive within 15 business days of termination of
employment under this Agreement, if applicable, or such earlier time as is
requested by the Executive or the Corporation. When calculating the amount of
the Gross-Up Payment, the Executive shall be deemed to pay:
(i) Federal income taxes at the highest applicable
marginal rate of Federal income taxation for the calendar year in
which the Gross-Up Payment is to be made, and
(ii) any applicable state and local income taxes at the
highest applicable marginal rate of taxation for the calendar year in
which the Gross-Up Payment is to be made, net of the maximum
reduction in Federal income taxes which could be obtained from
deduction of such state and local taxes if paid in such year.
If the Accounting Firm has performed services for the person, entity or group
who cause the Change In Control, or affiliate thereof, the Executive may select
an alternative accounting firm from any nationally recognized firm of certified
public accountants. If the Accounting Firm
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determines that no Excise Tax is payable by the Executive, it shall furnish the
Executive with an opinion that he has substantial authority not to report any
Excise Tax on his federal income tax return. Any determination by the Accounting
Firm shall be binding upon the Corporation and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Corporation should have
been made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Corporation exhausts its remedies pursuant to
subsection 8(c)(iii) hereof, and the Executive thereafter is required to make a
payment of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be promptly paid
by the Corporation to or for the benefit of the Executive.
(iii) The Executive shall notify the Corporation in
writing of any claim by the Internal Revenue Service that, if
successful, would require the payment by the Corporation of the
Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive
knows of such claim and shall apprise the Corporation of the nature
of such claim and the date on which such claim is requested to be
paid. The Executive shall not pay such claim prior to the expiration
of the thirty day period following the date on which it gives such
notice to the Corporation (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due). If the
Corporation notifies the Executive in writing prior to the expiration
of such period that it desires to contest such claim, the Executive
shall:
(1) give the Corporation any information reasonably requested
by the Corporation relating to such claim,
(2) take such action in connection with contesting such claim
as the Corporation 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 Corporation,
(3) cooperate with the Corporation in good faith in order
effectively to contest such claim, and
(4) permit the Corporation to participate in any proceedings
relating to such claim;
provided, however, that the Corporation shall bear and pay directly all
costs and expenses (including additional interest and penalties)
incurred in connection with such contest and shall indemnify and hold
the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax, including interest and penalties with respect thereto,
imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of subsection
8(c)(iii), the Corporation 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 Executive to pay the tax claimed
and xxx for a refund or contest the claim in any
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permissible manner, and the Executive agrees to prosecute such contest
to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the
Corporation shall determine; provided, however, that if the Corporation
directs the Executive to pay such claim and xxx for a refund, the
Corporation shall advance the amount of such payment to the Executive,
on an interest-free basis and shall indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax or income 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 further provided that any extension of the
statute of limitations relating to payment of taxes for the taxable
year of the Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount.
Furthermore, the Corporation's control of the contest shall be limited
to issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive 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.
(iv) If after the receipt by the Executive of an amount
advanced by the Corporation pursuant to subsection 8(c)(iii), the
Executive becomes entitled to receive any refund with respect to such
claim, the Executive shall (subject to the Corporation's complying with
the requirements of subsection 8(c)(iii)) promptly pay to the
Corporation the amount of such refund (together with any interest paid
or credited thereon by the taxing authority after deducting any taxes
applicable thereto). If, after the receipt by the Executive of an
amount advanced by the Corporation pursuant to subsection 8(c)(iii), a
determination is made that the Executive shall not be entitled to any
refund with respect to such claim and the Corporation does not notify
the Executive in writing of its intent to contest such denial of refund
prior to the expiration of thirty days after such determination, then
such advance shall be forgiven and shall not be required to be repaid
and the amount of such advance shall offset, to the extent thereof, the
amount of Gross-Up Payment required to be paid under subsection
8(c)(iii). The forgiveness of such advance shall be considered part of
the Gross-Up Payment and subject to gross-up for any taxes (including
interest or penalties) associated therewith.
9. Confidential Information.
-------------------------
(a) The Executive agrees not to disclose, either while in the
Corporation's employ or at any time thereafter, to any person not employed by
the Corporation, or not engaged to render services to the Corporation, except
with the prior written consent of an officer authorized to act in the matter by
the Board, any confidential information obtained by him while in the employ of,
or providing consulting services to, the Corporation, including, without
limitation, information relating to any of the Corporation's inventions,
processes, formulae, plans, devices, compilations of information, methods of
distribution, customers, client relationships, marketing strategies or trade
secrets; PROVIDED, HOWEVER, that this provision shall not preclude the Executive
from use or disclosure of information known generally to the public, other than
through violation of this Section 9, or from disclosure required by law or court
order. The agreement herein made in this Section 9(a) shall be in addition to,
and not in limitation or derogation of, any obligations otherwise imposed by law
upon the Executive in respect of confidential information and trade secrets of
the Corporation, and its Subsidiaries and Affiliates.
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For purposes of this Section 9(a), the term "Corporation" shall include its
Subsidiaries and Affiliates.
(b) The Executive also agrees that upon leaving the
Corporation's employ, or ceasing to provide consulting services under this
Agreement, he will not take with him, without the prior written consent of an
officer authorized to act in the matter by the Board, and he will surrender to
the Corporation, any record, list, drawing, blueprint, specification or other
document or property of the Corporation, its Subsidiaries and Affiliates,
together with any copy and reproduction thereof, mechanical or otherwise, which
is of a confidential nature relating to the Corporation, its Subsidiaries and
Affiliates, or, without limitation, relating to its or their methods of
distribution, client relationships, marketing strategies or any description of
any formulae or secret processes, or which was obtained by him or entrusted to
him during the course of his employment or consultancy with the Corporation.
10. Competition; Solicitation; Disparagement.
-----------------------------------------
(a) The Executive agrees that, until August 31, 2002, he will
not engage in Competition or Solicitation.
(i) The word "Competition" for the purposes of this
Agreement shall mean becoming directly or indirectly involved, as an
owner, principal, employee, officer, director, independent
contractor, representative, stockholder, agent, advisor, lender or in
any other capacity, with Federal-Mogul Corporation or Standard Motor
Products or any successors thereto (each, a "Competitor"); PROVIDED,
that if Executive becomes so involved with an entity which
subsequently becomes affiliated with Federal-Mogul Corporation or
Standard Motor Products, as the case may be, such involvement shall
not be Competition under this Agreement; PROVIDED, further, that the
receipt of retirement benefits, with respect to past service for
Xxxxxx Industries, shall not be Competition under this Agreement.
Notwithstanding anything to the contrary in this clause (i)
"Competition" shall not include an investment of less than one
percent (1%) of the outstanding securities of a Competitor if such
equity is listed on a national securities exchange or is regularly
traded in an over-the-counter market.
(ii) The word "Solicitation" for the purposes of this
Agreement shall mean soliciting any person who is a customer of the
businesses conducted by the Corporation, or any business in which the
Executive has been engaged on behalf of the Corporation and its
Subsidiaries or Affiliates at any time during the term of this
Agreement on behalf of a business described in clause (i) of this
Section 10(b), or inducing or attempting to persuade any employee of
the Corporation or any of its Subsidiaries or Affiliates to terminate
his employment relationship in order to enter into employment with a
business described in clause (i) of Section 10(b).
(b) The Executive agrees that until August 31, 2002, he will
not engage in Disparagement.
(i) The word "Disparagement" for the purposes of this
Agreement shall mean making or publishing any statement which is, or
may reasonably be
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considered to be, disparaging of the Corporation or any of its
Subsidiaries or Affiliates, or directors, officers, employees or the
operations or products of the Corporation or any of its Subsidiaries
or Affiliates, except to the extent the Executive, during the
Employment Period, makes the statement to employees or other
representatives of the Corporation or any of its Subsidiaries or
Affiliates, in furtherance of the Corporation's business and the
performance of his services hereunder.
(c) The Executive acknowledges and agrees that the
Corporation's remedy at law for any breach of the Executive's obligations under
Sections 9 and 10 of this Agreement would be inadequate and agrees and consents
that temporary and permanent injunctive relief may be granted in any proceeding
which may be brought to enforce any provision of such Sections without the
necessity of proof of actual damage. With respect to any provision of this
Section 10 finally determined by a court of competent jurisdiction to be
unenforceable, the Executive and the Corporation hereby agree that such court
shall have jurisdiction to reform this Agreement or any provision hereof so that
it is enforceable to the maximum extent permitted by law, and the parties agree
to abide by such court's determination.
(d) The Executive hereby agrees that in the event the Executive
is judicially determined to have violated Section 10(a) of this Agreement, in
addition to any other relief the Corporation may obtain either (1) the
Supplemental Payment shall be immediately forfeited and not paid to the
Executive or (2), in the event the Corporation has paid the Supplemental Payment
to the Executive prior to such determination, the Executive (or his estate)
shall be required immediately to return to the Corporation an amount equal to
the Supplemental Payment. In addition, the Executive specifically agrees that if
such forfeited or returned amount is less than the Supplemental Payment, the
Deferred Compensation shall be immediately forfeited to the extent necessary to
provide that an aggregate amount at least equal to the Supplemental Payment,
when combined with the amount of the Supplemental Payment, if any, forfeited
under this Agreement or returned by the Executive to the Corporation pursuant to
this Section 10(d), shall be forfeited or returned by the Executive. For the
purposes of this Section 10(d), "Deferred Compensation" shall mean, any deferred
compensation amounts payable to the Executive that are not tax-qualified
notwithstanding anything to the contrary in any deferred compensation agreement
between the Executive and the Corporation (or Echlin).
11. Successors.
-----------
Except as otherwise provided herein,
(a) This Agreement shall be binding upon and shall inure to the
benefit of the Executive, his heirs and legal representatives, and the
Corporation and its successors as provided in this Section 11.
(b) This Agreement shall be binding upon and inure to the
benefit of the Corporation and any successor of the Corporation, including,
without limitation, any corporation or corporations acquiring, directly or
indirectly, 50% or more of the outstanding securities of the Corporation, or all
or substantially all of the assets of the Corporation, whether by merger,
consolidation, sale or otherwise (and such successor shall thereafter be deemed
embraced within
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the term "the Corporation" for the purposes of this Agreement), but shall not
otherwise be assignable by the Corporation.
12. Certain Definitions.
--------------------
The following defined terms used in this Agreement shall have
the meanings indicated:
(a) BENEFICIARY. The term "Beneficiary" as used in this
Agreement shall, in the event of the death of the Executive, mean an individual
or individuals and/or an entity or entities, including, without limitation, the
Executive's estate, duly designated on a form filed with the Corporation by the
Executive to receive any amount that may be payable after his death or, if no
such individual, individuals, entity or entities has or have been so designated,
or is at the time in existence or able to receive any such amount, the
Executive's estate.
(b) CHANGE OF CONTROL. A "Change of Control" shall be deemed to
have occurred if the event set forth in any one of the following paragraphs
shall have occurred:
(i) any Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Corporation (not including in
the securities Beneficially Owned by such Person any securities
acquired directly from the Corporation or its Affiliates)
representing 20% or more of the combined voting power of the
Corporation's then outstanding securities, excluding any Person
who becomes such a Beneficial Owner in connection with a
transaction described in clause (1) of paragraph (iii) below;
or
(ii) the following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, on the date hereof, constitute the Board and
any new director whose appointment or election by the Board or
nomination for election by the Corporation's stockholders was
approved or recommended by a vote of at least two-thirds (2/3)
of the directors then still in office who either were directors
on the date hereof or whose appointment, election or nomination
for election was previously so approved or recommended. For
purposes of the preceding sentence, any director whose initial
assumption of office is in connection with an actual or
threatened election contest, including but not limited to a
consent solicitation, relating to the election of directors of
the Corporation, shall not be counted as an approved or
recommended director; or
(iii) there is consummated a merger or consolidation of the
Corporation or any direct or indirect Subsidiary of the
Corporation with any other corporation, other than (1) a merger
or consolidation which would result in the voting securities of
the Corporation outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) at least 50% of the
combined voting power of the securities of the Corporation or
such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (2) a merger
or consolidation effected to implement a
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recapitalization of the Corporation (or similar transaction) in
which no Person is or becomes the Beneficial Owner, directly or
indirectly, of securities of the Corporation (not including in
the securities Beneficially Owned by such Person any securities
acquired directly from the Corporation or its Affiliates)
representing 20% or more of the combined voting power of the
Corporation's then outstanding securities; or
(iv) the stockholders of the Corporation approve a plan of
complete liquidation or dissolution of the Corporation or there
is consummated an agreement for the sale or disposition by the
Corporation of all or substantially all of the Corporation's
assets, other than a sale or disposition by the Corporation of
all or substantially all of the Corporation's assets to an
entity, at least 50% of the combined voting power of the voting
securities of which are owned by stockholders of the
Corporation in substantially the same proportions as their
ownership of the Corporation immediately prior to such sale.
"Beneficial Owner" shall have the meaning set forth in Rule 13d-3 under the
Exchange Act.
"Exchange Act" shall mean the Securities Exchange Act of 1934, as amended from
time to time.
"Person" shall have the meaning given in Section 3(a)(9) of the Exchange Act, as
modified and used in Sections 13(d) and 14(d) thereof, except that such term
shall not include (i) the Corporation or any of its Subsidiaries, (ii) a trustee
or other fiduciary holding securities under an employee benefit plan of the
Corporation or any of its Affiliates, (iii) an underwriter temporarily holding
securities pursuant to an offering of such securities or (iv) a corporation
owned, directly or indirectly, by the stockholders of the Corporation in
substantially the same proportions as their ownership of stock of the
Corporation.
(c) CHANGE OF CONTROL DATE. The "Change of Control Date" shall
mean the first date on which a Change of Control occurs.
13. Amendment or Modification; Waiver.
----------------------------------
No provision of this Agreement may be amended, modified or
waived unless such amendment, modification or waiver shall be authorized by the
Board or any authorized committee of the Board and shall be agreed to in
writing, signed by the Executive and by an officer of the Corporation thereunto
duly authorized. Except as otherwise specifically provided in this Agreement, no
waiver by either party hereto of any breach by the other party hereto of any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of a subsequent breach of such condition or provision
or a waiver of a similar or dissimilar provision or condition at the same time
or at any prior or subsequent time.
14. Miscellaneous.
--------------
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio, without reference to principles
of conflict of laws. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
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(b) All notices and other communications hereunder 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:
--------------------
Xx. Xxxxx X. XxXxxxx
000 Xxxxx Xxxxx
Xxxxxxx, XX 00000
IF TO THE CORPORATION:
----------------------
Xxxx Corporation
0000 Xxxx Xxxxxx
Xxxxxx, Xxxx 00000
Attention: Secretary
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement.
(d) The Corporation may withhold from any amounts payable under
this Agreement such Federal, state or local taxes as it determines is required
to be withheld pursuant to any applicable law or regulation.
(e) When used herein in connection with plans, programs and
policies relating to the Executive, employees, compensation, benefits,
perquisites, executive benefits, services and similar words and phrases, the
word "Corporation" shall be deemed to include all wholly-owned Subsidiaries of
the Corporation.
(f) This instrument contains the entire agreement of the
parties concerning the subject matter, and all promises, representations,
understandings, arrangements and prior agreements concerning the subject matter
are merged herein and superseded hereby with respect to the Executive,
including, without limitation, the Prior Agreement and the Echlin Severance
Plan.
(g) No right, benefit or interest hereunder, shall be subject
to anticipation, alienation, sale, assignment, encumbrance, charge, pledge,
hypothecation, or set-off in respect of any claim, debt or obligation, or to
execution, attachment, levy or similar process, or assignment by operation of
law. Any attempt, voluntary or involuntary, to effect any action specified in
the immediately preceding sentence shall, to the full extent permitted by law,
be null, void and of no effect.
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(h) The Executive shall not have any right, title, or interest
whatsoever in or to any investments which the Corporation may make to aid it in
meeting its obligations under this Agreement.
(i) All payments to be made under this Agreement shall be paid
from the general funds of the Corporation and no special or separate fund shall
be established and no segregation of assets shall be made to assure payment of
amounts payable under this Agreement.
(j) Nothing contained in this Agreement shall create or be
construed to create a trust of any kind, or a fiduciary relationship between the
Corporation and the Executive or any other person.
(k) To the extent that any person acquires a right to receive
payments from the Corporation under this Agreement, except to the extent
provided by law, such right shall be no greater than the right of an unsecured
general creditor of the Corporation.
(l) In the event of the Executive's death or a judicial
determination of his incompetence, reference in this Agreement to the Executive
shall be deemed, where appropriate, to refer to his legal representative or,
where appropriate, to his Beneficiary.
(m) If any event provided for in this Agreement is scheduled to
take place on a legal holiday, such event shall take place on the next
succeeding day that is not a legal holiday.
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IN WITNESS WHEREOF, the Executive and, pursuant to due
authorization from its Board have caused this Agreement to be executed as of the
day and year first above written.
XXXX CORPORATION
By:/s/ Xxxxxx X. Xxxxxxx
-------------------------------------
Name: Xxxxxx X. Xxxxxxx
Title: VP and Chief Financial Officer
Attest:
/s/ Xxx Xxx Xxxxxxx
------------------------
Assistant Secretary
/s/ X. X. XxXxxxx
-------------------------------------
Xxxxx X. XxXxxxx
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EXHIBIT A
---------
AGREEMENT MADE AS OF AUGUST 31, 1999,
BETWEEN XXXX CORPORATION AND XXXXX X. XxXXXXX
---------------------------------------------
As of August 31, 1999, for purposes of Section 2(a), during
the Employment Period,
the office(s) and title(s) of the Executive are President of
the Automotive Aftermarket Group of the Corporation;
the reporting responsibility of the Executive is to report
directly to the Chief Executive Officer of the Corporation; and
the duties and responsibilities of the Executive are: serves
as President of the Automotive Aftermarket Group of the Corporation, in which
capacity he has direct responsibility for the Corporation's strategic plan for
automotive aftermarket products; serves as a member of the World Operating and
Strategic Operating Committees which monitor business unit performance,
implement product strategies, and take corrective action in the event of
non-performance in the areas of meeting financial goals and implementation of
market strategies, and insure interaction between divisions and affiliates.
As of July 17, 2000, for purposes of Section 2(a), during the
Transition Period, unless otherwise determined in good faith by the Corporation,
the office(s) and title(s) of the Executive are President
Emeritus of the Automotive Aftermarket Group of the Corporation or any other
title that is mutually agreeable to both parties;
the reporting responsibility of the Executive is to report
directly to the Chief Executive Officer of the Corporation; and
the duties and responsibilities of the Executive are: provides
consulting services as requested by the Chief Executive Officer of the
Corporation with respect to matters involving the Automotive Aftermarket Group
of the Corporation; PROVIDED that such duties and responsibilities shall be no
more burdensome to the Executive than those duties and responsibilities for
which the Executive was obligated during the Employment Period.
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EXHIBIT B
Total amount to be paid: $6,228,187.00
-------------
The total amount shall be paid in a lump sum no later than October 1, 2000.
All amounts to be paid hereunder shall be credited with interest as set forth in
Section 3(i) of this Agreement.
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