EXHIBIT 10.22
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is entered into as of February 6, 1996 by
and between H. F. Ahmanson & Company, a Delaware corporation ("Employer"), and
("Executive").
WITNESSETH:
WHEREAS, Executive and Employer have entered into an Amended and
Restated Employment Agreement dated as of , (the "Prior
Agreement"); and
WHEREAS, Employer desires to obtain the benefit of continued services
by Executive, and Executive desires to continue to render services to the
Employer; and
WHEREAS, the Compensation Committee of the Board of Directors of the
Employer (the "Board") has determined that it is in the Employer's best interest
and that of its stockholders to recognize the substantial contribution that
Executive has made and is expected to continue to make to the Employer's
business and to retain his services in the future; and
WHEREAS, the Employer and Executive desire to terminate and supersede
the Prior Agreement and to set forth in this Agreement the terms and conditions
of Executive's continued employment with the Employer;
NOW, THEREFORE, in consideration of the mutual promises contained
herein, the Employer and Executive agree as follows:
1. EMPLOYMENT. The Employer agrees that Executive will be employed
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by the Employer or by one or more of the Employer's subsidiary corporations to
render the services specified herein upon the terms and conditions and for the
compensation herein provided, and Executive agrees to be so employed and to
render the services as specified. All compensation paid to Executive by the
Employer or any subsidiary of the Employer, and all benefits and perquisites
received by Executive from the Employer or any of its subsidiaries, will be
aggregated in determining whether Executive has received the compensation and
benefits provided for herein.
2. TERM OF EMPLOYMENT.
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(a) End of Term. The term of the employment of Executive
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hereunder will be for the period commencing on the date of this Agreement and
ending on the earliest of:
(i) months after notice of
termination is given by the Employer to Executive;
(ii) the date of termination of Executive's employment by
Executive at his election and without "Good Reason" (as defined in Section 8
hereof), it being understood that Executive shall not be liable for damages or
breach of contract on account of any such termination by Executive pursuant to
this clause (ii);
(iii) the date of termination of Executive's employment by the
Employer for "Cause" (as defined in Section 7 hereof) or by the Employer without
Cause in accordance with Section 8 or by Executive for Good Reason pursuant to
Section 8 (including any termination authorized by Section 9(c));
(iv) the earlier of Executive's sixty fifth (65th) birthday
or the date of Executive's voluntary retirement in accordance with the
Employer's plans and policies;
(v) the date of Executive's death; or
(vi) the Disability Effective Date (as that term is defined
in Section 5 hereof) following Executive's Disability (as that term is defined
in Section 5 hereof).
It is understood that at each and every moment of time the remaining term of
employment hereunder shall be years, unless earlier terminated in
accordance with the provisions of this Section 2.
(b) Date of Termination. As used herein the term "Date of
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Termination" means (i) if Executive's employment is terminated by the Employer
pursuant to clause (i) of Section 2(a) hereof, the date that is
months after the date of Executive's receipt of the notice of termination or any
later date specified therein, as the case may be, (ii) if Executive terminates
his employment at his election and without Good Reason pursuant to clause (ii)
of Section 2(a), the date of the Employer's receipt of the notice of termination
from Executive or any later date specified therein, as the case may be, (iii) if
Executive's employment is terminated by the Employer for Cause or by the
Employer without Cause pursuant to Section 8, or by Executive for Good Reason,
fifteen (15) days after the date of receipt of the notice of termination by
Executive or the Employer, respectively, or any later date specified therein, as
the case may be, (iv) if Executive's employment terminates by reason of
Executive's voluntary retirement, the date that such retirement becomes
effective in accordance with the Employer's plans and policies; and (v) if
Executive's employment is terminated by reason of death or Disability, the date
of death of Executive or the Disability Effective Date (as that term is defined
in Section 5 hereof).
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3. SERVICES TO BE RENDERED; EXCLUSIVITY.
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(a) Service and Location. The services to be rendered by
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Executive hereunder are set forth in Schedule I attached hereto and by this
reference incorporated herein, which includes a description and, if applicable,
a title of Executive's position or positions with the Employer and/or its
subsidiaries under this Agreement and which specifies his reporting
responsibilities. During the term of Executive's employment under this
Agreement, the Employer shall not assign to Executive any duties or
responsibilities that are inconsistent with his position, duties,
responsibilities or status specified in Schedule I hereto, or adversely change
(from Executive's perspective) Executive's reporting responsibilities, position
or title specified in Schedule I or take any other action which results in a
material diminution in such position, authority, duties or responsibilities.
Executive shall perform such services at the Employer's principal executive
offices in Irwindale, California or in such other place in reasonable proximity
to Irwindale, California to which the Employer's principal executive offices may
be relocated; provided, however, that Executive agrees to perform a reasonable
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amount of services on behalf of the Employer outside of the Los Angeles area
(which amount may not exceed, at any time during the months
following a Change in Control (as hereinafter defined in Section 9(b)), fifteen
(15) calendar days in any calendar quarter); and provided, further, that during
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the months following a Change in Control the Employer shall
not be entitled to relocate its principal executive offices to a site that is
more than thirty (30) miles from Irwindale, California without regard to whether
such site would be considered to be within reasonable proximity of Irwindale,
California.
(b) Full Time Efforts. During the term of this Agreement and
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excluding any periods of vacation, family or sick leave or holidays to which
Executive is entitled, Executive shall devote his full business time and energy
to the business, affairs and interests of the Employer and its subsidiaries, and
matters related thereto, and shall use his reasonable best efforts and ability
to promote the interests of the Employer and its subsidiaries. Executive agrees
that he will diligently endeavor to promote the business, affairs and interests
of the Employer and its subsidiaries and perform services contemplated hereby in
accordance with the policies established by the Board from time to time.
Executive agrees to serve without additional remuneration in such senior
executive capacities for one or more direct or indirect subsidiaries of the
Employer as the Employer may from time to time request, subject to appropriate
authorization by the subsidiary or subsidiaries involved and any limitations
under applicable law and indemnification on the same terms as Executive is
indemnified by Employer. The failure of Executive to discharge an order or
perform a function because Executive reasonably and in good faith believes such
would
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violate a law or regulation or be dishonest shall not be deemed a breach by him
of his obligations or duties hereunder and shall not entitle the Employer to
terminate this Agreement pursuant to any of its provisions.
(c) Certain Permissible Activities. Executive may serve as a
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director or in any other capacity of any business enterprise, including an
enterprise whose activities may involve or relate to the business of the
Employer or any of its subsidiaries provided that such service is expressly
approved by the Employer in writing. Executive may (i) make and manage personal
business investments of his choice, (ii) teach at educational institutions and
deliver lectures, and (iii) serve in any capacity with any civic, educational or
charitable organization, or any governmental entity or trade association, in
each such case without seeking or obtaining approval by the Employer so long as
such activities and service do not materially interfere or conflict with the
performance of his duties hereunder. It is agreed that to the extent that the
Employer shall have approved any service of Executive pursuant to the first
sentence of this Section 3(c) prior to a Change in Control Date (as hereinafter
defined in Section 9), or to the extent that Executive may have engaged in
activities pursuant to the second sentence of this Section 3(c) prior to such
Change in Control Date, the continued conduct of such activities or the conduct
of activities similar in nature and scope thereto during the
months subsequent to such Change in Control Date shall be permissible and not in
violation of any provisions of this Agreement and such Employer approval may not
be revoked or limited in any material respect during the
months following such Change in Control Date.
4. COMPENSATION AND BENEFITS.
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(a) Base Salary. The Employer agrees that Executive will be paid
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for his services under this Agreement a salary at the annual rate of at least
$ , payable in periodic installments not less frequently than monthly in
accordance with the Employer's normal salary payment dates for executives. Such
salary as in effect from time to time is referred to herein as Executive's "Base
Salary."
(b) Additional Benefits. Executive shall also be entitled during
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the term of this Agreement to all rights and benefits for which he is otherwise
eligible under any bonus plan, stock option plan, stock purchase plan,
participation or extra compensation plan, pension plan, supplemental executive
retirement plan, deferred compensation plan, profit-sharing plan, life, medical
and dental insurance policy, director and officer liability insurance plan or
indemnification program, vacation, sick leave, family leave and holiday program
or plan, or plans that confer the use of automobiles or condominiums (and pay
the related expenses thereof) or that pay for club membership fees or
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tax or financial counseling or other plans or benefits, in any such case, which
the Employer or any of its subsidiaries (i) may provide for Executive or (ii)
provided Executive is eligible to participate therein, may provide generally to
officers of the Employer who are of a similar class and station as those of
Executive or (iii) may provide to employees (collectively, "Additional
Benefits"). This Agreement shall not affect adversely (from the perspective of
Executive) the provisions of any other compensation, retirement or other benefit
program or plan of the Employer or any of its subsidiaries and shall not be
considered to be a guarantee that Executive will receive any awards or other
benefits under any plans, policies or arrangements which are performance-
related.
(c) Expense Reimbursement. Executive will be entitled to receive
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reimbursement from the Employer for all reasonable travel, entertainment and
other business expenses incurred by Executive on behalf of the Employer.
(d) Office and Support Staff. During the period of Executive's
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employment under this Agreement, the Employer shall furnish Executive with an
office or offices of a size and with furnishings and other appointments, and
exclusive secretarial and other assistance, suitable for Executive's position
and responsibilities and no less favorable to Executive than those provided to
the Employer's officers who are of a similar class and station as those of
Executive. In the event of a Change in Control, the office or offices and the
furnishings and appointments therein, and the secretarial and other assistance,
provided to Executive during the remaining term of this Agreement shall be at
least equal to the most favorable of the foregoing provided to Executive at any
time preceding the Change in Control Date or, if more favorable to Executive, as
provided generally at any time after the Change in Control Date to other senior
officers of the Employer and its subsidiaries who are of a similar class and
station as those of Executive.
(e) Biennial Review; Limitations on Reductions. The Board shall
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review Executive's Base Salary and Additional Benefits then being paid and
provided to him not less frequently than biennially in the light of Executive's
services for the preceding period, the responsibilities which attend his office
and duties hereunder, the profitability and progress of the Employer and its
subsidiaries and concurrent salaries and benefits then being paid to others
holding similar positions. Following such review, the Employer may increase the
Base Salary and/or Additional Benefits paid or provided to Executive, but may
not decrease the Base Salary or any of the Additional Benefits from the then
existing levels; provided, however, that the Employer shall have the right to
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reduce one or more Additional Benefits in conjunction with a corollary reduction
of such benefits applicable to all of the Employer's officers who are of a
similar class and station as those of Executive. Any increase
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in Executive's Base Salary shall not serve to limit or reduce any other
obligation to Executive under this Agreement.
5. TERMINATION UPON DISABILITY.
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(a) Continuation of Benefits upon Disability. If Executive
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becomes totally unable to perform his duties because of any Disability (as
hereinafter defined in this Section 5) during the term of his employment
hereunder, Executive's full-time employment hereunder shall terminate effective
on the thirtieth (30th) day after Executive's receipt of written notice of
termination from the Employer (such thirtieth (30th) day being referred to
herein as the "Disability Effective Date"). In addition to the payments
specified in Section 6 hereof, in the event of termination of Executive's
employment pursuant to this Section 5, the Employer shall continue to pay or
provide Executive the following:
(i) until the earliest to occur of Executive's death,
Executive's 65th birthday, years after the Disability Effective Date
or the date of Executive's return to full-time employment hereunder pursuant to
Section 5(e) (such earliest day being referred to herein as the "Disability
Termination of Benefits Date"), Base Salary at the rate applicable to Executive
immediately prior to the Disability Effective Date, with such payments of Base
Salary to be made in conformity with payments of Base Salary to Executive prior
to the Disability Effective Date (as the same may be modified to comply with
changes in applicable law after the date of such termination);
(ii) cash bonuses under the Employer's Executive Short-Term
Incentive Plan (the "Short-Term Plan") as in effect on Executive's Disability
Effective Date concurrent with the payment of bonuses to the Employer's other
senior executives (whether or not such payment is before the Disability
Termination of Benefits Date) with respect to each fiscal year of the Employer
or other bonus period (each a "Bonus Period") ending on or prior to the first
anniversary of the Disability Termination of Benefits Date, determined using the
dollar amount of Executive's target bonus award (which is currently 80% of
Executive's "Target Award Guideline" [determined without taking into
consideration company performance and without adjustment based on individual
performance] multiplied by his Base Salary ["Target Bonus Amount"]) in effect on
Executive's Disability Effective Date with bonuses for any partial Bonus Period
calculated pro rata based on the number of full weeks during the Bonus Period
prior to the earlier to occur of the end of such Bonus Period and the Disability
Termination of Benefits Date.
(iii) until the Disability Termination of Benefits Date,
medical, dental and other insurance and welfare type Additional Benefits which
were applicable to Executive immediately prior to the Disability Effective Date
(including,
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without limitation, medical, dental, life and disability insurance and the
Employer's Executive Medical Reimbursement Plan), each such benefit to be
continued in a manner no less favorable to Executive than the benefit to which
he was entitled immediately prior to the Disability Effective Date; provided,
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however, that if the Disability Termination of Benefits Date occurs due to
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Executive's death during the months after the Disability
Effective Date, the Employer shall continue to pay or provide medical, dental
and other insurance and welfare type benefits, on the basis described in this
clause (iii), to Executive's family members who were covered for such benefits
immediately prior to Executive's death for the balance of such
month period;
(iv) until the Disability Termination of Benefits Date, a
continuation of vesting of all unvested awards theretofore granted by the
Employer to Executive under the Employer's 1989 Contingent Deferred Compensation
Plan (the "Deferred Plan") and all unvested restricted stock, stock options and
stock appreciation rights granted by the Employer to Executive, such vesting to
occur in accordance with the terms of each such grant as in effect on the
Disability Effective Date and upon the assumption that no termination of
employment had occurred provided, however, that if the Disability Termination of
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Benefits Date occurs due to Executive's death during the
months immediately after the Disability Effective Date or if a Change in Control
occurs prior to the Disability Termination of Benefits Date, such vesting shall
include any vesting which would occur upon Executive's death or a Change in
Control during employment with the Employer; and provided, further, that, if and
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to the extent further vesting is prohibited by the terms of any one or more of
such grants or otherwise, Executive shall be entitled to in-lieu cash payments
from the Employer on each date (each a "Vesting Date") when vesting would have
occurred absent such termination, but in no event beyond the Disability
Termination of Benefits Date, equal to (A) the fair market value of restricted
stock that would have otherwise vested on such Vesting Date, (B) the spread on
such Vesting Date between the exercise price and fair market value of stock
subject to stock options or stock appreciation rights that would have otherwise
vested on such Vesting Date, and (C) Executive's interest in his Accounts under
the Deferred Plan that would have vested on such Vesting Date; and provided,
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further, that if, prior to the Disability Termination of Benefits Date, it is or
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becomes impossible on any date to continue to calculate any future in-lieu cash
payments based on such continuation of vesting, Executive shall thereupon be
entitled immediately to the additional vesting which would normally have
occurred during such month period following the Disability
Effective Date with respect to the affected type of in-lieu cash payments
described under (A), (B) or (C) above and shall be entitled immediately to
receive payment of the amount specified under (A), (B) or (C) for such type of
in-lieu
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cash payments based on such additional vesting as of such date; and
(v) until the Disability Termination of Benefits Date, if
Executive is a participant in such plans on Executive's Disability Effective
Date, a continuation of crediting of additional years of Cumulative Service (for
all purposes, including for purposes of accrual and vesting of benefits) under
the Employer's Supplemental Executive Retirement Plan and Senior Supplemental
Executive Retirement Plan (collectively, the "SERP") in accordance with the
terms of the SERP and upon the assumption that no termination of employment had
occurred; provided, however, that if the Disability Termination of Benefits Date
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occurs due to Executive's death during the months
immediately after the Disability Effective Date or if a Change in Control occurs
prior to the Disability Termination of Benefits Date, such continuation shall
include any further accrual and vesting which would occur upon Executive's death
or a Change in Control during employment with the Employer; and
(vi) a pro rata cash award under the Employer's Executive
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Long-Term Incentive Plan (the "Long-Term Plan") as in effect on Executive's
Disability Effective Date concurrent with the first payment of any corresponding
cash awards to the Employer's other senior executives (whether or not such
payment is before the Disability Termination of Benefits Date) with respect to
each performance measurement cycle (as that term is defined in the Long-Term
Plan, a "Performance Measurement Cycle") that had commenced but had not been
completed prior to Executive's Disability Effective Date, which pro rata cash
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award shall be determined based on the number of full months that Executive
participated in the Long-Term Plan during each Performance Measurement Cycle
prior to the Disability Effective Date using Executive's target cash award
(which is currently 80% of the cash award half of Executive's "Target Award
Guideline") without adjustment based on individual performance, multiplied by
(y) the actual company performance percentage for each Performance Measurement
Cycle (calculated using company performance for the calendar quarters during
each Performance Measurement Cycle that Executive participated in the Long-Term
Plan) and (z) his Base Salary, (such resulting product, "Target Cash Award") in
effect on the Disability Effective Date under the Long-Term Plan.
(b) Offset for Insurance, etc. The obligations of the Employer
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to pay Executive, pursuant to this Section 5, Base Salary and bonus amounts
following his Disability shall be reduced prospectively to the extent that
Executive receives payment of amounts under any salary continuation or similar
feature contained in any disability insurance policy covering Executive or under
any salary continuation or similar feature under Social Security or any similar
federal, state or local program. In addition, any medical, dental and other
insurance
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and welfare type Additional Benefits to be provided by the Employer pursuant to
clause (iii) of Section 5(a) shall be secondary to any similar benefits provided
by Social Security, Medicare, any private insurance maintained by or covering
Executive or any other similar plan or program covering Executive. Executive
shall provide to the Employer upon written request from time to time a
certification as to the types and amounts of the benefits referred to in the
first two sentences of this Section 5(b) received by Executive or to which he is
entitled.
(c) Substitution of Benefits. If Executive's full-time services
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are terminated due to his Disability and Executive is entitled under the terms
of this Agreement to, but is no longer eligible under the relevant Plan for,
Additional Benefits because of such termination, Executive (or in the event of
his death prior to the date that is months after the
Disability Effective Date, his designated Beneficiaries (as hereinafter defined
in Section 6)) shall be entitled to, and the Employer shall provide, to the
extent provided in this Agreement, benefits substantially equivalent to such
Additional Benefits to which Executive was entitled immediately prior to his
Disability and shall do so for the period during which he remains entitled to
receive such Additional Benefits as provided in this Section 5. With respect to
the continuation of such benefits, Executive (or such Beneficiaries) shall also
be paid by the Employer an amount which, after federal, state, local or other
income or other taxes on such amount, shall reimburse Executive (or his
Beneficiaries) for any additional tax liabilities incurred by Executive (or any
such Beneficiary) by reason of the receipt of such benefits after the
termination of, rather than during the term of, his employment under this
Agreement.
(d) Partial Disability. In the event of a partial Disability of
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Executive, it is understood that Executive will provide such part-time services
as may be consistent with the nature and extent of such Disability and his
position, duties, responsibilities and status specified in Schedule I, the
Employer shall not be entitled to terminate Executive's employment hereunder as
a result of such partial Disability, and the terms and conditions of this
Agreement shall remain in full force and effect after such partial Disability.
(e) Definition of Disability. As used in this Agreement, the
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term "Disability" means the failure of Executive to render for six (6)
consecutive calendar months, or for shorter periods aggregating one hundred
thirty (130) or more business days in any twelve (12) month period, the services
contemplated by this Agreement which a physician selected by the Employer or its
insurers and reasonably acceptable to Executive or Executive's legal
representative determines is due to mental or physical illness or injury.
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(f) Return from Disability. If and to the extent Executive
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recovers from any such Disability, he will resume his duties and
responsibilities hereunder partially or fully to the extent of his recovery, and
the term of Executive's employment under this Agreement shall be reinstated as
if Executive's employment had not been terminated pursuant to Section 5(a)
hereof.
6. PAYMENTS AND BENEFITS UPON TERMINATION OF EMPLOYMENT FOR ANY
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REASON. On the Date of Termination of Executive's employment under this
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Agreement for any reason whatsoever, Executive's Base Salary hereunder will
cease thereafter to accrue except as specifically provided in Sections 5 or 8
and Executive (or in the event of his death, his designated beneficiaries, his
personal representative, or the executor or administrator of his estate (his
"Beneficiaries")) will be entitled to such rights and benefits under the
Employer's compensation and benefit plans, policies and arrangements in which
Executive is then a participant as may be provided for under such plans,
policies and arrangements (which shall not be modified adversely to Executive or
his Beneficiaries after his Date of Termination). In addition, the Employer
shall:
(a) pay and deliver to Executive (or, in the event of his death,
to his Beneficiaries) not later than ten (10) days after his Date of Termination
or such later date as Executive or such Beneficiaries may request in writing,
all amounts of money and all stock or other property owed to him by the Employer
as of the Date of Termination, including but not limited to his accrued Base
Salary, any amounts payable in lieu of accrued vacation, amounts payable to him
under any expense reimbursement plans or policies for expenses incurred through
the Date of Termination, the amount of the bonus due under the Short-Term Plan
or Long-Term Plan to Executive for any Bonus Period or Performance Measurement
Cycle of the Employer that ended prior to the Date of Termination which remained
unpaid on the Date of Termination and any compensation previously deferred by
Executive and any accrued interest on earnings on such deferred compensation to
the extent not previously paid to Executive;
(b) cause the trustee of any trusteed plan of the Employer to pay
and deliver, and the Employer shall pay and deliver under any similar non-
trusteed plan of the Employer, to Executive (or, in the event of his death, to
his Beneficiaries), at the earliest practicable date after payments become due,
all money, stock and other property which such plans require to be paid or
delivered or are otherwise payable or deliverable to him after the termination
of his employment;
(c) continue to insure Executive (or, in the event of his death,
his Beneficiaries) with respect to his activities as a director, officer or
employee of the Employer or any of its subsidiaries, for a period of
years after such Date of Termination, under such policies of director and
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officer liability insurance as Employer shall provide for its senior officers
generally; provided, however, that if a Change in Control shall have occurred
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prior to such Date of Termination or shall thereafter occur, such policies of
insurance shall be no less favorable to Executive than such policies as may have
been in effect for Executive at any time during the one hundred twenty (120) day
period immediately preceding the Change in Control Date; and
(d) continue to honor such rights to indemnification as Executive
(or, in the event of his death, his Beneficiaries) may be entitled pursuant to
any plan of indemnification or indemnification agreement in effect at the Date
of Termination.
7. TERMINATION OF EMPLOYMENT BY EMPLOYER FOR CAUSE.
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(a) Definition of Cause. The Employer may terminate Executive's
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employment under this Agreement if the termination is for Cause upon compliance
with the requirements of Section 7(b) hereof. For purposes of this Agreement,
the Employer shall have "Cause" to terminate Executive's employment hereunder
if, and only if, any of the following shall occur:
(i) Executive's conviction by a court of competent
jurisdiction or entry of a plea of nolo contendere for an act on Executive's
part constituting a felony and resulting or intended to result directly or
indirectly in demonstrably material injury to the Employer or any of its
affiliates or substantial gain or personal enrichment to Executive at the
expense of the Employer or any of its affiliates; or
(ii) a willful breach by Executive of any provisions of this
Agreement if such breach results in demonstrably material injury to the
Employer.
(b) Procedural Requirements. Executive's employment hereunder
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shall not be subject to termination for Cause without: (i) reasonable notice to
Executive setting forth the reasons for Employer's intention to terminate and
specifying the particulars thereof in detail, (ii) an opportunity for Executive
to cure any such breach, if possible, within fifteen (15) days after receipt of
such notice, (iii) an opportunity for Executive, together with his counsel, to
be heard before the Board, and (iv) delivery to Executive of a notice of
termination stating that at least two-thirds of the authorized number of
Employer's directors have found that Executive was guilty of conduct set forth
in Section 7(a) and specifying the particulars thereof in detail. Any such
termination will be effective upon fifteen (15) days' prior written notice to
Executive.
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8. TERMINATION OF EMPLOYMENT BY EXECUTIVE FOR GOOD REASON OR BY
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EMPLOYER WITHOUT CAUSE.
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(a) Definition of Good Reason. Executive may terminate his
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employment under this Agreement and all of his obligations hereunder to the
Employer accruing after the date of such termination (other than his obligations
under Section 8(e), 8(f) 9(f), 11 and 12), if the termination is for "Good
Reason," which for purposes of this Agreement is defined as:
(i) failure by the Employer to perform any of its obligations
hereunder (including, but not limited to, Employer's obligations under Sections
3 and 4) other than an isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by the Employer promptly after
receipt of notice thereof given by Executive; or
(ii) failure to reelect or removal of Executive as a member of
the Employer's Board of Directors or its Executive Committee, if Executive is
now or hereafter becomes such a member.
Any such termination will be effective upon fifteen (15) days' prior written
notice from Executive to the Employer.
(b) Employer's Termination Without Cause. The Employer may
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terminate Executive's employment under this Agreement without Cause (as defined
in Section 7 hereof) by written notice to Executive. Any such termination shall
become effective upon fifteen (15) days' prior written notice from the Employer
to Executive.
(c) Compensation and Benefits Upon Section 8 Termination. In
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addition to the payments specified in Section 6 hereof, in the event of
termination of Executive's employment pursuant to this Section 8, the Employer
shall continue to pay or provide to Executive the following:
(i) until the earliest to occur of the date that is
months after such Date of Termination, Executive's 65th
birthday, or Executive's death (such earliest date being referred to herein as
the "Section 8 Termination of Benefits Date"), Base Salary at the rate
applicable to Executive immediately prior to his Date of Termination, with such
payments of Base Salary to be made in conformity with payments of Base Salary to
Executive prior to such termination (as the same may be modified to comply with
changes in applicable law after the date of such termination);
(ii) cash bonuses under the Short-Term Plan as in effect on
Executive's Date of Termination concurrent with the payment of bonuses to the
Employer's other senior executives (whether or not such payment is before the
Section 8 Termination of Benefits Date) with respect to each Bonus Period ending
on or
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prior to the first anniversary of the Section 8 Termination of Benefits Date,
determined using Executive's Target Bonus Amount in effect on Executive's Date
of Termination with bonuses for any partial Bonus Period calculated pro rata
based on the number of full weeks during the Bonus Period prior to the earlier
to occur of the end of such Bonus Period and the Section 8 Termination of
Benefits Date.
(iii) until the Section 8 Termination of Benefits Date,
medical, dental and other insurance and welfare type Additional Benefits which
were applicable to Executive immediately prior to such Date of Termination
(including, without limitation, medical, dental, life and disability insurance
and Executive Medical Reimbursement Plan), each such benefit to be continued in
a manner no less favorable to Executive than the benefit to which he was
entitled immediately prior to such termination; provided, however, that if the
Section 8 Termination of Benefits Date occurs due to Executive's death during
the months after the Date of Termination, the Employer
shall continue to pay or provide medical, dental and other insurance and welfare
type benefits, on the basis described in this clause (iii), to Executive's
family members who were covered for such benefits immediately prior to
Executive's death for the balance of such month period;
(iv) until the Section 8 Termination of Benefits Date, a
continuation of vesting of all unvested awards granted by the Employer to
Executive under the Deferred Plan and all unvested restricted stock, stock
options, stock appreciation rights granted by the Employer to Executive, such
vesting to occur in accordance with the terms of each such grant as in effect on
the Date of Termination and upon the assumption that no termination of
employment had occurred; provided, however, that if the Section 8 Termination of
-------- -------
Benefits Date occurs due to Executive's death during such
month period immediately after the Date of Termination or a Change of Control
occurs prior to the Section 8 Termination of Benefits Date, such vesting shall
include any vesting which would occur upon Executive's death or a Change in
Control during employment with the Employer; and provided, further, that, if and
-------- -------
to the extent further vesting is prohibited by the terms of any one or more of
such grants or otherwise, Executive shall be entitled to in-lieu cash payments
from the Employer on each date (each, a "Vesting Date") when vesting would have
occurred absent such termination, but in no event beyond the Section 8
Termination of Benefits Date, equal to (A) the fair market value of restricted
stock that would have otherwise vested on such Vesting Date, (B) the spread on
such Vesting Date between the exercise price and fair market value of stock
subject to stock options or stock appreciation rights that would have otherwise
vested on such Vesting Date, and (C) Executive's interest in his Accounts under
the Deferred Plan that would have vested on such Vesting Date; and provided,
--------
further, that if, prior to the Section 8 Termination of Benefits Date, it is or
-------
becomes impossible on any date to continue to
13
calculate any future in-lieu cash payments based on such continuation of
vesting, Executive shall thereupon be entitled immediately to the additional
vesting which would normally have occurred during such
month period following the Date of Termination with respect to the affected type
of in-lieu cash payments described under (A), (B) or (C) above and shall be
entitled immediately to receive payment of the amount specified under (A), (B)
or (C) for such type of in-lieu cash payments based on such additional vesting
as of such date; and
(v) until the Section 8 Termination of Benefits Date, a
continuation of crediting of additional years of Cumulative Service (for all
purposes, including for purposes of accrual and vesting of benefits) under the
SERP in accordance with the terms of the SERP and upon the assumption that no
termination of employment had occurred; provided, however, that if the Section 8
-------- -------
Termination of Benefits Date occurs due to Executive's death during the
months immediately after the Date of Termination or if a Change in Control
occurs prior to the Section 8 Termination of Benefits Date, such continuation
shall include any further accrual and vesting which would occur upon Executive's
death or a Change in Control during employment with the Employer; and
(vi) a pro rata cash award under the Long-Term Plan concurrent
--- ----
with the first payment of any corresponding cash awards to the Employer's other
senior executives (whether or not such payment is before the Section 8
Termination of Benefits Date) with respect to each Performance Measurement Cycle
that had commenced but had not been completed prior to Executive's Date of
Termination, which pro rata cash award shall be determined based on the number
--- ----
of full months that Executive participated in the Long-Term Plan during each
Performance Measurement Cycle prior to such Date of Termination using
Executive's Target Cash Award in effect on the Date of Termination under the
Long-Term Plan.
(d) Substitution of Benefits. If Executive's employment is
------------------------
terminated pursuant to this Section 8 and Executive is entitled under the terms
of this Agreement to, but is no longer eligible under the relevant plan for,
Additional Benefits because of such termination, Executive (or in the event of
his death, his designated Beneficiaries) shall be entitled to, and the Employer
shall provide, to the extent provided in this Agreement, benefits substantially
equivalent to such Additional Benefits to which Executive was entitled
immediately prior to such termination and shall do so for the period during
which he remains entitled to receive such Additional Benefits as provided in
this Section 8. With respect to the continuation of such benefits, Executive (or
such Beneficiaries) shall also be paid by the Employer an amount which, after
federal, state, local or other income or other taxes on such amount, shall
reimburse Executive (or his Beneficiaries) for any additional tax liabilities
incurred by Executive (or any such Beneficiary) by reason of the receipt of such
benefits after the termination of,
14
rather than during the term of his employment under this Agreement.
(e) Mitigation; Certain Reductions in Benefits. In the event of
------------------------------------------
termination of Executive's employment pursuant to this Section 8, Executive
shall have no duty to seek other employment or otherwise mitigate the Employer's
obligations hereunder. However, the Employer and Executive agree that if
Executive receives any income for services rendered by Executive to persons or
entities other than the Employer or any of its subsidiaries during or with
respect to any period prior to the Section 8 Termination of Benefits Date, the
amounts payable by the Employer with respect to any month during such
month period shall be reduced by an amount equal to one hundred per cent (100%)
of the income received by Executive for services rendered with respect to such
month and, if such income received by Executive with respect to any month during
such month period exceeds the amounts payable by the
Employer with respect to such month, such excess shall be carried forward to
reduce the obligation of the Employer to pay Executive pursuant to Section 8
with respect to any subsequent month. In addition, if Executive receives any
benefits of the kind referred to in clause (iii) of Section 8(c) that are
attributable to services rendered by Executive to persons or entities other than
the Employer or any of its subsidiaries, such benefits shall be applied to
reduce the Employer's obligation to provide such benefits under clause (iii) of
Section 8(c) by having such successor be the primary provider of such benefits.
(f) Notification of Other Employment; Accountings. If Executive's
---------------------------------------------
employment is terminated pursuant to this Section 8, Executive shall give the
Employer prompt written notice if Executive renders services to any person or
entity other than the Employer or any of its subsidiaries at any time prior to
the Section 8 Termination of Benefits Date. In addition, Executive shall
provide to the Employer upon written request from time to time a certification
from Executive as to the benefits provided to Executive and his dependents in
connection with such services. If Executive's employment is terminated pursuant
to this Section 8, then not later than thirty (30) days after each December 31
occurring prior to the second anniversary of the Section 8 Termination of
Benefits Date, Executive shall account to the Employer with respect to all
payments received by Executive which are required to be offset against payments
by Employer pursuant to Section 8. If the Employer has paid amounts with
respect to any year pursuant to Section 8 in excess of those to which Executive
was entitled (after giving effect to the offsets provided above), Executive
shall reimburse the Employer for such excess by the January 30 immediately
following such year.
15
9. CHANGE IN CONTROL.
-----------------
(a) Effectiveness of Section. If at any time during the term of
------------------------
Executive's employment by the Employer pursuant to this Agreement, a Change in
Control of the Employer (as hereinafter defined in this Section 9) shall occur,
the provisions of this Section 9 shall become effective without any limitation
on any other rights Executive may have hereunder. Sections (d) and (e) of this
Section 9 shall become ineffective with respect to such Change in Control on the
third anniversary of the date on which such Change in Control occurs (the
"Change in Control Date") unless Executive's employment has theretofore been
terminated for any reason; provided, however, that if another Change in Control
-------- -------
occurs after such third anniversary, Sections 9(d) and (e) shall become
effective once again with respect to such subsequent Change in Control. If
Executive's employment so terminates prior to such third anniversary, the
provisions of Sections 9(d) and (e) shall survive so long as Executive or his
Beneficiaries are entitled to any benefits under this Agreement.
(b) Definition of Change in Control. For the purpose of this
-------------------------------
Agreement, a "Change in Control" shall mean:
(i) the acquisition by any individual, entity or group (within
the meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange Act) of twenty-
five percent (25%) or more of either (A) the then outstanding shares of common
stock of the Employer (the "Outstanding Employer Common Stock") or (B) the
combined voting power of the then outstanding voting securities of the Employer
entitled to vote generally in the election of directors (the "Outstanding
Employer Voting Securities"); provided, however, that for purposes of this
-------- -------
clause (i), the following acquisitions shall not constitute a Change in Control:
(w) any acquisition directly from the Employer, (x) any acquisition by the
Employer, (y) any acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Employer or any corporation controlled by the
Employer or (z) any acquisition by any corporation pursuant to a transaction
which complies with clauses (A), (B) and (C) of clause (iii) of this Section
9(b); or
(ii) individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at least a
majority of the Board; provided, however, that any individual becoming a
-------- -------
director subsequent to the date hereof whose election, or nomination for
election by the Employer's stockholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board shall be
considered as though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption of
office occurs as a result
16
of an actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board; or
(iii) consummation of a reorganization, merger or
consolidation or sale or other disposition of all or substantially all of the
assets of the Employer (a "Business Combination"), in each case, unless,
following such Business Combination, (A) all or substantially all of the Persons
who were the beneficial owners, respectively, of the Outstanding Employer Common
Stock and Outstanding Employer Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the corporation
resulting from such Business Combination (including, without limitation, a
corporation which as a result of such transaction owns the Employer or all or
substantially all of the Employer's assets either directly or through one or
more subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Business Combination of the Outstanding Employer
Common Stock and Outstanding Employer Voting Securities, as the case may be, (B)
no Person (excluding any corporation resulting from such Business Combination or
any employee benefit plan (or related trust) of the Employer or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, twenty-five percent 25% or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such
Business Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership existed
prior to the Business Combination and (C) at least a majority of the members of
the board of directors of the corporation resulting from such Business
Combination were members of the Incumbent Board at the time of the execution of
the initial agreement, or of the action of the Board, providing for such
Business Combination; or
(iv) approval by the stockholders of the Employer of a
complete liquidation or dissolution of the Employer.
(c) Additional Termination Right. If a Change in Control of the
----------------------------
Employer shall occur, Executive shall have the right to terminate his employment
with the Employer for any reason or no reason by written notice to the Employer
given at any time during the thirty (30) day period commencing on the first
anniversary of the Change in Control Date, and such termination shall be deemed
to be termination for Good Reason pursuant to Section 8 hereof and shall thereby
entitle the Executive to the benefits set forth in Section 9(e).
17
(d) Certain Restrictions Following Change in Control. If a
------------------------------------------------
Change in Control of the Employer occurs, then the following provisions shall
apply:
(i) the Employer shall not be entitled to reduce, terminate or
adversely (from the Executive's point of view) affect, pursuant to the proviso
to the second sentence of Section 4(e), any Additional Benefits which are
described in Section 4(b) to which Executive shall thereafter be entitled even
in connection with a reduction in such benefits applicable to all of the
Employer's officers who are of a similar class and station as those of
Executive;
(ii) in addition to Executive's Base Salary, Executive shall be
paid, for each Bonus Period ending prior to his Date of Termination, an annual
bonus (an "Annual Bonus") in cash at least equal to 125% of Executive's Target
Bonus Amount in effect on the Change in Control Date under the Short-Term Plan
as in effect on the Change in Control Date; and
(iii) all restricted stock, stock options, stock appreciation
rights, Contingent Deferred Compensation and similar grants theretofore or
thereafter made which are unvested shall immediately vest effective as of the
Change in Control Date.
(e) Provisions Applicable to Termination of Employment. If a
--------------------------------------------------
Change in Control shall occur and Executive's employment is thereafter
terminated by the Employer other than for Cause, or by Executive for Good Reason
pursuant to Section 8 (including a termination under the authority granted in
Section 9(c) hereof):
(i) Executive shall be entitled to the payments and benefits
provided in Section 6 hereof;
(ii) in lieu of the payments required by the provisions of
clauses (i), (ii) and (vi) of Section 8(c) hereof the Employer shall pay to
Executive in a lump sum in cash within ten (10) days after the Date of
Termination (or such later date as Executive may elect) the aggregate of the
following amounts:
(A) an amount equal to the product of (1) the higher of (y)
125% of Executive's Target Bonus Amount in effect on the Change in Control Date
under the Short-Term Plan as in effect on the Change in Control Date or (z) 125%
of Executive's Target Bonus Amount in effect on the Date of Termination under
the Short-Term Plan as in effect on the Change in Control Date or under any
other bonus plan then maintained by the Employer (such higher amount being
referred to herein as the "Termination Bonus Amount"), multiplied by (2) a
fraction, the numerator of which is the number of days that have elapsed in the
current Bonus Period of the Employer through the Date of Termination and the
denominator of which is 365;
18
(B) an amount equal to the product of three multiplied
times the sum of (y) Executive's Base Salary as in effect on the Date of
Termination plus (z) the Termination Bonus Amount for Executive; and
(C) with respect to each Performance Measurement Cycle that
had commenced but had not been completed prior to such Date of Termination under
the Long-Term Plan, an amount equal to the product of (1) the higher of (y) 125%
of Executive's Target Cash Award for such Performance Measurement Cycle as in
effect immediately prior to the Change in Control Date or (z) 125% of
Executive's Target Cash Award for such Performance Measurement Cycle as in
effect immediately prior such Date of Termination, multiplied by (2) a fraction,
the denominator of which is the number of days in such Performance Measurement
Cycle and the numerator of which is the number of days elapsing from the date
such Performance Measurement Cycle commenced through such Date of Termination;
(iii) the provisions of the second sentence of Section 8(e) and
the last two sentences of Section 8(f) shall not be operative following a
termination of Executive's employment pursuant to Section 8;
(iv) the Employer shall reimburse Executive upon demand for up
to an aggregate of Ten Thousand Dollars ($10,000) of fees and disbursements paid
to Executive's legal, accounting, tax and financial advisors for services
rendered by them to Executive in connection with or as a result of his
termination of employment hereunder; and
(v) the Employer shall, at its sole expense as incurred,
provide Executive with outplacement services the scope and provider of which
shall be selected by Executive in his sole discretion.
(f) Tax Gross Up.
------------
(i) If any payments or other benefits under this Agreement or
any other payments or benefits received or to be received by Executive in
connection with or as a result of a Change in Control of the Employer, or
Executive's termination of employment, whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Employer, or any
person affiliated with the Employer ("Change in Control Payments"), will be
subject to tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (hereinafter referred to as the "Code," references to which shall be
understood to include any successor statute and references to the applicable
regulations under the Code as promulgated from time to time), or any comparable
provision of state law or any similar tax that may hereafter be imposed ("Excise
Tax"), the Employer shall pay at the times hereinafter specified in this Section
9(f) additional amounts (each a "Gross-Up Payment") such that the net amount
19
retained by Executive, after withholding or payment of any Excise Tax on the
Change in Control Payments and any federal, state and local income tax and
Excise Tax upon the Gross-Up Payment shall be equal to the Change in Control
Payments. Notwithstanding the foregoing provisions of this Section 9(f), if it
shall be determined that Executive is entitled to a Gross-Up Payment, but that
the Change in Control Payments do not exceed 110% of the greatest amount (the
"Reduced Amount") that could be paid to Executive such that the receipt of
Change in Control Payments would not give rise to any Excise Tax, then no Gross-
Up Payment shall be made to Executive and the Change in Control Payments, in the
aggregate, shall be reduced to an amount such that the receipt of Change in
Control Payments would not give rise to any Excise Tax.
(ii) For purposes of determining whether any of the Change in
Control Payments will be subject to the Excise Tax and the amount of such Excise
Tax, (i) all Change in Control Payments shall be treated as "parachute payments"
within the meaning of Section 28OG(b)(2) of the Code, and all "excess parachute
payments" within the meaning of Section 28OG(b)(1) shall be treated as subject
to the Excise Tax except to the extent that (in the opinion of tax counsel
selected by the Employer's independent auditors and reasonably acceptable to
Executive, which opinion shall be rendered at the Employer's sole expense and
shall be reasonably acceptable to Executive and which opinion shall, once
accepted by Executive, be binding on all parties) such Change in Control
Payments do not constitute parachute payments, or such excess parachute payments
are reduced pursuant to 28OG(b)(4)(B) of the Code, (ii) the counsel referred to
in clause (i) of this sentence shall be entitled to request and rely, as to
factual matters regarding the determinations called for therein, upon appraisals
and valuations by experts acceptable to the Employer and Executive (and prepared
at the Employer's expense) and (c) the value of any non-cash benefits or any
deferred or contingent payment or benefit shall be determined by the Employer's
independent auditors in accordance with the principles of Section 28OG(d)(3) and
(4) of the Code.
(iii) For purposes of determining the amount of the Gross-Up
Payment, Executive shall be deemed to pay federal income taxes at his highest
marginal rate of federal income taxation on the Date of Termination, and state
and local income taxes at his highest marginal rate of taxation in the
applicable states and localities on the Date of Termination, net of the maximum
reduction in federal income taxes that could be obtained from deduction of such
state and local taxes.
(iv) In the event that the Excise Tax is finally determined to
be less than the amount taken into account hereunder at the time of termination
of Executive's employment, Executive shall repay to the Employer, promptly after
the amount of such reduction in Excise Tax is finally determined, but no later
than thirty days after his receipt of notice from the
20
Employer in reasonable detail requesting the same, the portion of the Gross-Up
Payment attributable to such reduction, plus the portion of the Gross-Up Payment
attributable to the Excise Tax and federal and state and local income tax
imposed on the Gross-Up Payment being repaid by him if such repayment results in
a reduction in Excise Tax and/or a federal and state and local income tax
deduction) and interest from the date of his receipt of the Change in Control
Payments on the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code (the "Applicable Rate"). For purposes of this
Agreement, the final determination of any Excise Tax shall be deemed to have
occurred at the audit level unless the Employer shall have elected to contest or
requested that Executive contest the matter (with which Executive shall
cooperate, and Executive agrees to notify the Employer promptly in the event of
any audit of his applicable tax returns by any authority) in which case the
final determination shall be the final decision by the appropriate governmental
authority.
(v) In the event that the Excise Tax is finally determined to
exceed the amount taken into account hereunder at the time of the termination of
Executive's employment (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-Up Payment), the
Employer shall make an additional Gross-Up Payment, computed as provided in this
Section 9(f), in respect of the sum of such excess amount plus any interest
payable by Executive to any tax authority with respect to such excess amount as
an additional Change in Control Payment.
10. INDEMNITY. To the extent permitted by applicable law and the By-
---------
Laws of the Employer (as from time to time in effect or if a Change in Control
occurs, as in effect on the Change in Control Date) and without in any way
impairing or affecting any rights to indemnification that Executive has by
reason of any agreement to which he is a party as of the date hereof, the
Employer shall:
(a) indemnify Executive and hold him harmless for any acts or
decisions made by him in good faith while performing services for the Employer;
(b) use reasonable efforts to obtain coverage for him under
liability insurance policies now in force or hereafter obtained during the term
of his full time services under this Agreement (or, if a Change in Control
occurs, as in effect on the Change in Control Date) covering the other officers
or directors of the Employer; and
(c) pay as incurred all expenses, including reasonable attorneys'
fees and the amounts of court approved settlements, actually incurred by
Executive in connection with the defense of any action, suit or proceeding, and
in connection with any appeal thereon, which has been and/or may be brought
21
against Executive by reason of Executive's services as an officer, director,
employee or agent of the Employer or of any affiliate of the Employer.
11. CONFIDENTIALITY. Executive agrees that he shall not divulge or
---------------
otherwise disclose, directly or indirectly, any trade secret or other
confidential information concerning the business or policies of the Employer or
any of its affiliates which he may have learned as a result of his employment
during the term of this Agreement (including any extension thereof) or prior
thereto as an employee, officer or director of the Employer or any of its
affiliates, except to the extent such use or disclosure is (i) necessary to the
performance of this Agreement and in furtherance of the Employer's best
interests, (ii) required by applicable law, (iii) lawfully obtainable from other
sources or (iv) authorized by the Employer. The provisions of this Section 11
shall survive the suspension or termination, for any reason, of this Agreement.
12. ARBITRATION OF DISPUTES. The provisions of Schedule II are
-----------------------
incorporated herein by reference. In the event of any conflict between Schedule
II and this Agreement, the terms of this Agreement shall prevail.
Notwithstanding the pendency of any dispute or controversy, the Employer will
continue to pay Executive his full compensation in effect when the notice giving
rise to the dispute was given (including, but not limited to, Base Salary,
Annual Bonuses and awards under the Long-Term Plan) and continue Executive as a
participant under all plans, policies, practices or programs in which Executive
was participating when the notice giving rise to the dispute was given, until
the dispute is finally resolved in accordance with the procedures described in
Schedule II attached hereto. As used in Schedule II, the term "you" shall also
mean, in the event of Executive's death, his designated beneficiaries, his
personal representative or the executor or administrator of his estate. The
provisions of this Section 12 shall survive the suspension or termination, for
any reason, of this Agreement.
13. GENERAL PROVISIONS.
------------------
(a) Notices. Any notices provided for in this Agreement shall be
-------
sent to the Employer at 0000 Xxxxxxxxxx Xxxx, Xxxxxxxxx, Xxxxxxxxxx, 00000,
Attention: Executive Vice President -- Legal, with a copy to the Chairman of
the Compensation Committee of the Board at the same address, or to such other
address as the Employer may from time to time in writing designate, and to
Executive at such address as he may from time to time in writing designate (or
his business address of record with the Employer in the absence of such
designation). All notices shall be deemed to have been deposited as certified
mail, return receipt requested, postage paid, or one (1) business day after they
have been deposited as overnight mail, in either event properly addressed to the
designated address of the party to receive the notice, or shall be deemed to
have been given at
22
the time receipt is acknowledged if given by any form of electronic
communication. Any notice required or permitted to be given under this Agreement
will be deemed given only when it is in fact received by the addressee.
(b) Entire Agreement. Any previous written or oral employment
----------------
agreement between Executive and the Employer or any affiliate of the Employer is
hereby canceled. Subject to the cancellation of any such employment agreement,
the rights of Executive hereunder shall be in addition to, and not in
substitution for or diminution of, the rights of Executive under any other
written plan or agreement between the Employer and Executive which now exists or
is hereafter made. Except for such other plans or agreements, if any, this
Agreement constitutes the entire understanding between the parties with respect
to the subject matter hereof, superseding all negotiations, prior discussions
and preliminary agreements, written or oral.
(c) Governing Law. This Agreement will be governed by and
-------------
construed in accordance with the laws of the State of California.
(d) Savings Clause. Should this Agreement or any of its
--------------
provisions be in violation of applicable law, the Employer will take every
possible action not in violation of applicable law to provide Executive with the
economic benefits intended to be provided to him by this Agreement, or with the
nearest economic equivalents thereto, and any provisions not in violation of
applicable law shall, so far as possible, be given effect and shall not be
affected by such violation. The invalidity or unenforceability of any provision
or portion of this Agreement shall, so far as possible, not affect the validity
or enforceability of the other provisions or portions of this Agreement.
(e) No Assignments; Assumption by Successor. This Agreement is
---------------------------------------
personal to the Employer and to Executive and may not be assigned by either
party without the written consent of the other. The Employer will require any
successor (whether direct or indirect by purchase, merger, consolation or
otherwise) to all or substantially all of the business and/or assets of the
Employer to (i) expressly assume and agree to perform this Agreement in the same
manner and the same extent the Employer would be required to perform it as if no
such succession had taken place; and (ii) notify Executive of the assumption of
this Agreement within ten (10) days of such assumption. Failure of the Employer
to obtain such assumption and agreement prior to the effectiveness of any such
succession shall be a breach of this Agreement. As used in this Agreement,
"Employer" shall mean H.F. Ahmanson & Company and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law or otherwise. However, this Agreement shall inure to the
benefit of and be enforceable by Executive's personal or legal representatives,
executors,
23
administrators, successors, heirs, and distributees, devisees and legatees.
(f) No Set-Off. The Employer'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 Employer may have against
Executive or others. In no event shall Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable,
or benefits to be provided, to Executive under any of the provisions of this
Agreement, and, except as expressly provided in Sections 5(b) and 8 hereof (in
the case of Section 8, as the same may be modified by clause (iii) of Section
9(e)), such amounts shall not be reduced whether or not Executive obtains other
employment.
(g) No Constructive Waivers. Either party's failure to enforce any
-----------------------
provision or provisions of this Agreement will not in any way be construed as a
waiver of any such provision or provisions, or prevent that party thereafter
from enforcing each and every other provision of this Agreement.
(h) Legal Fees and Expenses. The Employer agrees to pay as incurred,
-----------------------
to the full extent permitted by applicable law, all legal fees and expenses
which Executive may reasonably incur as a result of any contest (regardless of
the outcome thereof) by the Employer, Executive or others of the validity or
enforceability of, or liability under, any provision of this Agreement or any
guarantee of performance thereof (including as a result of any contest by
Executive about the amount of any payment pursuant to this Agreement), plus in
each case interest on any delayed payment at the applicable Federal rate
provided for in Section 7872(f)(2)(A) of the Code. As used in this Section
13(h), the term "Executive" shall also mean, in the event of Executive's death,
his designated beneficiaries, his personal representative, or the executor or
administrator of his estate.
(i) Withholdings. The Employer may withhold from any amounts payable
------------
under this Agreement an amount sufficient to satisfy the minimum requirements
set by applicable law to be withheld therefrom for withholding and payroll
taxes.
(j) No Oral Modifications. No modification or waiver of any provision
---------------------
hereof will be binding or valid unless in writing and executed by both parties.
(k) Legal Representation. Executive acknowledges that he has been
--------------------
given the opportunity to consult with counsel of his own choosing in connection
with the negotiation and execution of this Agreement. Executive acknowledges
that neither any attorney employed by the Employer or any outside counsel
employed by the Employer (including, without limitation, Xxxxxx, Xxxx &
Xxxxxxxx) in connection herewith has provided legal or other
24
advice to Executive in connection with his negotiation or execution of this
Agreement and that all such counsel have provided services in connection
herewith solely to the Employer.
25
IN WITNESS WHEREOF, the parties have duly executed this Agreement on
the day and year first above written.
EMPLOYER: H. F. AHMANSON & COMPANY
By:________________________________
EXECUTIVE:
Name:______________________________
Address:___________________________
___________________________
___________________________
26
SCHEDULE I
SERVICES TO BE RENDERED BY EXECUTIVE
Position Title:
Name of Entity to Which
Services Are to be Rendered:
Position Reports to:
27
