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EXHIBIT 10.08
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of the 1st day of December, 1996, between Xxxxxxx
Chemical Company, a Delaware corporation (the "Company") and Xxxxxx X. Xxxxxxxxx
(the "Executive"),
WITNESSETH:
WHEREAS, the Company desires to employ the Executive as its Senior Vice
President and General Counsel, and
WHEREAS, the Company and the Executive desire to enter into an agreement
providing for the terms and conditions of such employment (the "Agreement").
NOW, THEREFORE, in consideration of the respective covenants and agreements
set forth below, the parties agree as follows:
1. Employment
The Company agrees to employ the Executive, and the Executive agrees to
serve the Company, on the terms and conditions set forth herein.
The employment of the Executive by the Company, unless earlier terminated
pursuant to Section 7 below, shall be for the period commencing on December
1, 1996 (the "Commencement Date"), and terminating on December 31, 2000
(the "Employment Period").
2. Position and Duties
(a) Effective January 1, 1997, the Executive shall serve as the Senior Vice
President and General Counsel of the Company, reporting to the Company's
Chief Executive Officer. The Executive shall have the powers and duties of
the chief legal officer of the Company, which shall include, without
limitation, the responsibility for the general management of the legal
affairs of the Company under the supervision of the Chief Executive
Officer.
(b) The Executive shall devote his best efforts to the business and affairs
of the Company and, effective January 1, 1997, to carrying out the
responsibilities of Senior Vice President and General Counsel of the
Company, and shall diligently follow and implement all management policies
and decisions of the Company.
3. Place of Employment and Relocation
(a) The Executive shall relocate his residence to the Tri-City area in
eastern Tennessee. The Executive's services shall normally be performed at
the Company's principal executive office in Kingsport, Tennessee.
(b) The Company shall pay, or reimburse the Executive for, all reasonable
costs and expenses incurred by the Executive in relocating Executive's
residence from Atlanta, Georgia, to the Kingsport area in accordance with
the Company's standard policies and practices applicable to the relocation
of comparable senior corporate executives.
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4. Compensation
(a) The Executive shall receive a beginning salary at an annual rate of
$300,000 (the "Base Salary"). The Base Salary may be increased from time to
time at the discretion of the Company. Once increased, the Executive's
salary shall not be reduced except as a part of a general salary reduction
applicable to all comparable senior executives, and in no event to an
amount below the Base Salary.
(b) Except as provided in paragraph 6 of this Agreement, the Executive
shall be entitled to participate, on the same basis as other comparable
senior corporate executives, in all present and future Company incentive,
compensation, tax-qualified and non tax-qualified retirement, welfare and
severance plans, programs, agreements, or arrangements in effect during the
Employment Period; provided, however, that, to the extent legally
permissible, the Company agrees to waive, or to obtain the waiver of, any
waiting period or periods otherwise required for participation under any of
such plans, programs, agreements or arrangements. In addition, upon
expiration of the Employment Period, or upon earlier termination of the
Executive's employment pursuant to subsections 7(d) or (e), the Executive
shall be entitled to receive all medical insurance, life insurance and
other welfare benefits provided under the welfare plans described in the
preceding sentence to other comparable retired senior executives.
5. Special Restricted Stock and Stock Option Grants
(a) On the Commencement Date, the Executive shall receive a special grant
of Company common stock under the Company's restricted stock program, the
number of such restricted shares to be included in the grant to be
determined by dividing $50,000 by the closing price of the Company's common
stock on the New York Stock Exchange on the last regular trading day
immediately prior to the Commencement Date.
(b) On the Commencement Date, the Executive shall receive an option under
the Company's stock option program to purchase 50,000 shares of the
Company's common stock at a price equal to the closing price of the
Company's common stock on the New York Stock Exchange on the last regular
trading day immediately prior to the Commencement Date. This option grant
shall constitute an advance grant of options that would otherwise be
granted to Executive during the Employment Period, and any additional grant
of options of the Company's common stock shall be made in the sole and
uncontrolled discretion of the Compensation Committee of the Company's
Board of Directors (the "Board").
6. Retirement Benefits.
In lieu of any annual monetary retirement benefit to which the
Executive might otherwise be entitled under the Excess Retirement Income
Plan ("ERIP") and the Eastman Unfunded Retirement Income Plan ("URIP"), the
Executive shall, immediately upon the earlier of the expiration of the
Employment Period or the termination of the Executive's employment pursuant
to subsections 7(b), (d) or (e), receive the first lump sum cash payment in
the amount determined by Exhibit A hereto, which Exhibit is hereby made a
part of this Agreement. In addition, if the Executive is employed hereunder
immediately prior to the expiration of the Employment Period, the Executive
shall receive the second lump sum cash payment in the amount determined by
Exhibit A hereto, payable no later than May 1, 2001.
Finally, if the Executive is employed hereunder immediately prior to
the expiration of the Employment Period, the Executive shall be entitled to
elect no later than the date the Company announces to participants the
performance results under the Company's Long Term Performance Plan for the
performance cycle under such plan ending in the year 2000, to receive the
third lump sum cash payment in the amount determined by Exhibit A hereto,
payable no later than May 1, 2001. If the Executive does not make a timely
election as described in the immediately preceding sentence, then Executive
shall continue to participate in the Company's Long Term Performance Plan
after December 31, 2000, and shall receive awards of stock under such Plan
with respect to the performance cycles that commenced prior to December 31,
2000 and end after the expiration of the Employment Period as
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though the target performance levels for each such cycle had been achieved
by the Company if less than target level performance is actually achieved;
provided, however, that the actual delivery of company stock for each such
cycle shall be made at the later of (a) the time delivery of company stock
would be made to other participants in the Plan with respect to such cycle
if target performance with respect to such cycle was achieved, or (b)
January 31, 2001. Except as expressly provided in this Agreement, any
rights that Executive may have under the incentive compensation,
retirement, welfare and severance plans described in subsection 4(b) shall
be determined by the terms and conditions of such plans as in effect on the
Date of Termination and the Company's applicable programs and practices as
in effect on the Date of Termination, and all other rights under this
Agreement shall be terminated.
7. Termination
(a) Death. The Executive's employment shall terminate upon his death.
(b) Disability. If the Executive becomes entitled to receive benefits under
the Company's group long-term disability plan, from time to time in effect,
the Executive may be considered disabled and the Company may terminate this
Agreement.
(c) Cause. The Company may terminate the Executive's employment for
"Cause". For purposes of this Agreement, "Cause" is defined as (i) a
material breach by Executive of the terms of this Agreement, (ii) the
conviction of Executive of any criminal act that the Board shall, in its
sole and absolute discretion, deem to constitute Cause for purposes of this
Agreement, or (iii) conduct by Executive in his office with the Company
that is grossly inappropriate and demonstrably likely to lead to material
injury to the Company, as determined by the Board acting reasonably and in
good faith; provided, however, that in the case of (iii) above, such
conduct shall not constitute Cause unless the Board shall have delivered to
Executive notice setting forth with specificity (x) the conduct deemed to
qualify as Cause, (y) reasonable action that would remedy such objection,
and (z) a reasonable time (not less than thirty (30) days) within which
Executive may take such remedial action, and Executive shall not have taken
such specified remedial action within such specified reasonable time.
(d) Termination by the Company without Cause. Notwithstanding the foregoing
provisions, the Company may terminate the Executive's employment without
Cause at any time, subject to the provisions of subsection 8(c) hereof.
(e) Termination for Good Reason by the Executive. The Executive may
terminate his employment at any time for Good Reason; provided, however,
that the Executive shall have delivered a notice of termination to the
Company within ninety (90) days after the occurrence of the event or events
that the Executive believes constitute Good Reason and specifying the
nature thereof. For this purpose, termination for "Good Reason" prior to a
Change in Control shall mean the occurrence of any of the following
circumstances without the Executive's prior written consent which
circumstances are not completely remedied by the Company such that an event
of Good Reason no longer exists within thirty (30) days after receipt of
the Executive's notice of termination:
i) any substantial limitation of the authority and responsibility of
the Executive contemplated by Section 2 hereof;
ii) any organizational change that requires the Executive to report to
anyone other than the Chief Executive Officer;
iii) any organizational change or other circumstances that, as a
practical matter, require the Executive to perform the majority of his
responsibilities and duties at a location more than thirty-five (35)
miles from the present Company executive offices, other than any
relocation of the executive offices of the Company; or
iv) a material breach by the Company of the terms of this Agreement.
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However, if such termination occurs after the Change in Control, then
termination for "Good Reason" shall mean "Good Reason" as that term is
defined in the Severance Agreement between the Company and its Chief
Executive Officer on the date of such Change in Control.
(f) Date of Termination. "Date of Termination" shall mean (i) if the
Executive's employment is terminated by death pursuant to subsection 7(a),
the date of the Executive's death; (ii) if the Executive's employment is
terminated by the Company as a result of the Executive's disability
pursuant to subsection 7(b), the date of such termination, (iii) if the
Executive's employment is terminated by the Company for Cause pursuant to
subsection 7(c), the date that the Notice of Termination is communicated to
the Executive, after the expiration of the right to take remedial action in
the case of paragraph 7(c)(iii), (iv) if the employment is terminated by
the Company without Cause pursuant to subsection 7(d), the date the Notice
of Termination is communicated to the Executive; and (v) if the employment
is terminated by the Executive for Good Reason under subsection 7(e),
thirty (30) days after the Notice of Termination is given if the
circumstances causing the Good Reason have not been completely remedied by
such date.
8. Compensation and Other Rights of Executive Upon Termination
(a) If the Executive's employment shall be terminated due to death pursuant
to subsection 7(a) or disability pursuant to subsection 7(b), the Company
shall pay the legal representative of the Executive's estate (in the case
of death) or the Executive or his legal guardian or representative (in the
case of disability) all salary, incentive compensation, other awards, and
payments owed to the Executive up to the date of death or disability, as
applicable. All other rights of the Executive and his estate, guardian,
legal representatives and heirs under the incentive compensation,
retirement, welfare and severance plans described in subsection 4(b) shall
be determined by the terms and conditions of such plans as in effect on the
date of Executive's death or disability, as applicable and the Company's
applicable program and practices as in effect on the date of Executive's
death or disability, as applicable; provided, however, that the stock
option award provided for in Section 5 shall continue to vest in accordance
with the normal vesting schedule under such award and shall remain
exercisable for at least the period of time that such exercise would
have been permitted had the Executive lived and remained an employee for
the entire Employment Period, or not been disabled and remained an employee
for the entire Employment Period. Finally, (i) if the Executive's
employment shall be terminated due to death pursuant to subsection 7(a),
then the Company shall pay the legal representative of the Executive's
estate within thirty (30) days following the Executive's death the first
lump sum described in Exhibit A if the Executive had terminated employment
for Good Reason on the date of his death but determined (A) as though the
Executive terminated employment for Good Reason on the date of his death;
and (B) as though the calculation of the first lump sum described in
Exhibit A was fifty percent (50%) of what such lump sum would be absent
this clause (B); and (ii) if the Executive's employment shall be terminated
due to disability pursuant to subsection 7(b), then the Company shall pay
the Executive or his legal guardian or representative within thirty (30)
days following the date of disability the first lump sum described in
Exhibit A.
(b) If the Executive's employment shall be terminated by (i) the Company
for Cause pursuant to subsection 7(c), or (ii) by the Executive for any
reason other than termination by Executive for Good Reason as set forth in
subsection 7(e), the Company shall pay the Executive all salary, incentive
compensation, other awards, and payments owed to him up to the Date of
Termination. Any rights that Executive may have under the incentive
compensation, retirement, welfare and severance plans described in
subsection 4(b) shall be determined by the terms and conditions of such
plans as in effect on the Date of Termination and the Company's applicable
programs and practices as in effect on the Date of Termination, and all
other rights under this Agreement shall be terminated.
(c) If the Executive's employment shall be terminated by the Company
without Cause pursuant to subsection 7(d) or if the Executive's employment
shall be terminated by the Executive for Good Reason pursuant to subsection
7(e), then the Company shall pay to the Executive all salary, incentive
compensation, other awards, and payments owed to him up to the Date of
Termination. In addition, the Company shall pay as liquidated damages, and
not as penalty, to the Executive:
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(i) within thirty (30) days following the Date of Termination, a lump
sum cash payment equal to (A) if the Date of Termination is on or
after January 1, 1998, the aggregate amount of salary that would have
been payable to the Executive between the Date of Termination and
December 31, 2000, computed at the Executive's salary rate in effect
on the Date of Termination, or (B) if the Date of Termination is prior
to January 1, 1998, the aggregate amount of salary that would have
been payable to the Executive between the Date of Termination and the
third anniversary of his Date of Termination, computed at the
Executive's salary rate in effect on the Date of Termination;
(ii) within thirty (30) days following the Date of Termination, a lump
sum cash payment equal to the aggregate value of all bonus, incentive
and other awards and rights under each annual cash incentive plan and
(at the election of the Executive, to be made in writing and delivered
to the Company no later than his Date of Termination) the Company's
Long Term Performance Plan to which Executive was entitled on the Date
of Termination, or to which he would reasonably become entitled during
because of his salary grade and position in the Company (including but
not limited to all payments and awards under the Long Term Performance
Plan that otherwise would have been made subsequent to the expiration
of the Employment Period), without any reduction for early payment
thereof, assuming (A) (1) if the Date of Termination is on or after
January 1, 1998, that the Executive would have been employed until the
end of the Employment Period, or (2) if the Date of Termination is
prior to January 1, 1998, that the Executive would have been employed
for thirty-six (36) consecutive months following the Date of
Termination (such period of deemed employment being referred to as the
"Deemed Employment Period"); (B) that all conditions relating to such
payments would have been fulfilled, (C) that the Company's performance
for all uncompleted periods after December 1, 1996 had achieved, or
would have achieved, target performance levels under each such plan or
program (provided, however, that if the target performance level under
any such plan or program has not been established as of the Date of
Termination for any such period, then the target performance level for
such period shall for purposes of this subsection 8(c)(ii) be deemed
to be no less than the last target performance level established under
such plan or program prior to the Date of Termination); and (D) for
purposes of this computation, awards based on stock under the Long
Term Performance Plan would be valued at 100% of the closing price of
the Company's common stock on the New York Stock Exchange on the last
trading day immediately preceding the Date of Termination; and
(iii) on the date required pursuant to subsection 6(a), the first lump
sum payment described in Exhibit A attached hereto.
If the Executive does not make a timely written election to receive
immediate payment of future awards under the Long Term Performance Plan, as
described in clause (ii) above, then Executive shall continue to
participate in the Company's Long Term Performance Plan after his Date of
Termination and for the Deemed Employment Period described in clause
(ii)(A) above, and shall receive awards of stock under such Plan with
respect to the performance cycles that are uncompleted as of the Date of
Termination, and determined as though (w) the Executive remained employed
for the Deemed Employment Period; and (x) the target performance levels for
each such uncompleted cycle had been achieved by the Company if less than
target level performance is actually achieved; provided, however, that if
the target performance level has not been established as of the Date of
Termination for any such period, then the target performance level for such
period shall for purposes of this paragraph be deemed to be no less than
the last target performance level established prior to the Date of
Termination; and further provided, that the actual delivery of Company
stock for each such cycle shall be made at the later of (y) the time
delivery of Company stock is made to other participants in the Plan with
respect to such cycle or (z) within thirty (30) days of the Date of
Termination.
Further, in the event of such termination, (i) all outstanding options
on the Company's common stock held by the Executive shall continue to vest
under the normal vesting schedule under such grant and shall remain
exercisable by the Executive or legal representative of his estate at any
time thereafter, in whole or in part, for the period of time that such
exercise would have been permitted had the Executive's employment been
terminated by the Company without Cause on the last day of the
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Employment Period, and (ii) any of the Company's common stock owned by the
Executive subject to conditions, restrictions, or limitations which lapse
over time or upon a subsequent event shall immediately be free of all such
conditions, restrictions and limitations. Through December 31, 2000, the
Company shall allow Executive and his family members to participate in all
welfare plans described in subsection 4(b) on the same terms and conditions
and at the same cost as to which they were entitled to participate
immediately prior to the Date of Termination. If the Executive or his
family members shall be ineligible to participate in any of such welfare
plans as a result of Executive's ceasing to be an employee of the Company,
then the Company shall arrange to provide the Executive and his family
members with substantially equivalent benefits as if Executive remained
employed by the Company throughout the Employment Period. Except as
expressly provided in this Agreement, any rights that Executive may have
under the incentive compensation, retirement, welfare and severance plans
described in subsection 4(b) shall be determined by the terms and
conditions of such plans as in effect on the Date of Termination and the
Company's applicable programs and practices as in effect on the Date of
Termination, and all other rights under this Agreement shall be terminated.
Finally, if the Date of Termination is prior to December 1, 1997, then
within sixty (60) days following the Date of Termination, (i) the Company
will offer to purchase the Executive's principal residence in the Tri-City
area of eastern Tennessee at a guarantee price based on the average of two
fair market appraisals if the lower appraisal is within seven percent (7%)
of the higher value, and if not, a third appraisal will be used and the
average of the two highest appraisals will be used; and (ii) the Company
will pay the Executive an amount equal to the reasonable expenses necessary
to move the Executive's furnishings and personal belongings from the
Tri-City area in eastern Tennessee to metropolitan Atlanta, Georgia.
9. No Mitigation, No Offset
(a) In the event of any termination of employment under Section 7, the
Executive shall be under no obligation to seek other employment, and there
shall be no offset against amounts due the Executive under this Agreement
of account of any remuneration attributable to any subsequent employment
that he may obtain.
(b) No payment or benefit of any kind under this Agreement shall duplicate
any payment or benefit that the Executive becomes entitled to under any
severance or change in control agreement, plan or arrangement of the
Company, and in the event of such duplication, such duplicate payment or
benefit (to the extent of such duplication) shall be paid under this
Agreement, and the remaining amount of such payment or benefit shall be
paid under such severance or change in control agreement, plan or
arrangement.
10. Assignment; Binding Agreement
(a) This Agreement may be assigned (including any assignment by merger,
consolidation, transfer of assets, operation of law or otherwise) by the
Company. Neither this Agreement nor any right of the Executive hereunder
may be assigned by the Executive (or the Executive's legal representative,
if applicable), nor may the Executive in any way delegate the performance
of the Executive's covenants and obligations hereunder.
(b) This Agreement and all obligations of the Company hereunder shall be
binding upon, and all rights of the Company hereunder shall inure to the
benefit of and be enforceable by, the Company, its successors and assigns.
This Agreement and all rights of the Executive hereunder shall inure to the
benefit of, and be enforceable by, the Executive and the Executive's
personal or legal representatives, executors, administrators, successors
and heirs.
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11. Notice
For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Company:
Chief Executive Officer
Xxxxxxx Chemical Company
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
If to the Executive:
Xxxxxx Xxxxxxxxx
Xxxxxxx Chemical Company
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
or to such other address as either party may have furnished to the other in
writing.
12. Arbitration.
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in the State of
Tennessee by three arbitrators in accordance with the rules of the American
Arbitration Association then in effect.
13. Miscellaneous
(a) No provision of this Agreement may be modified, waived or discharged
unless such waiver, modification or discharge is agreed in writing signed
by the Executive and the Chief Executive Officer or such other officer as
may be specifically designated by the Chief Executive Officer or the
Board. No waiver by either party at any time of any breach by the other
party of, or compliance with, any condition or provision of this Agreement
to be performed by the other party shall be deemed a waiver of any similar
or dissimilar provisions or conditions at the same or at any prior or
subsequent time. Any party's failure, at any time, to require strict
performance of the other party of any provision of this Agreement shall not
waive, affect or diminish any right of the first party thereafter to demand
strict compliance and conformance.
(b) The invalidity or unenforceability of any provision of provisions of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
(c) Anything in this Agreement to the contrary notwithstanding, all
payments required to be made by the Company hereunder to the Executive, his
estate or legal representatives shall be subject to the withholding of such
amounts relating to taxes as the Company may reasonably determine it should
withhold pursuant to any applicable law or regulation.
14. Law Governing
This Agreement shall be governed by, and construed and interpreted in
accordance with, the laws of the State of Tennessee without reference to
principles or conflict of laws.
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15. Expenses
The Company shall pay all of the Executive's expenses, including
without limitation attorneys' fees and expenses, incurred by Executive or
his estate (other than attorneys' fees or expenses of the Executive himself
acting as attorney) (a) in defending the validity of this, Agreement, and
(b) in contesting in good faith any determinations by the Company
concerning amounts payable by the Company under this Agreement.
16. "Change in Control."
Change in Control for purposes of this Agreement shall mean "Change in
Control" as that term is defined in the Severance Agreement between the
Company and its Chief Executive Officer on the earlier of (i) the date the
Notice of Termination under subsection 7(d) or 7(e) is given, as
applicable, or (ii) the date of a Change in Control.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date and year first above written.
Xxxxxxx Chemical Company
By:
-----------------------------
Name:
---------------------------
Its:
----------------------------
Executive
--------------------------------
Xxxxxx X. Xxxxxxxxx
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EXHIBIT A
FIRST LUMP SUM
The first lump sum cash payment is intended to provide the Executive with a
lump sum payment which is the actuarial equivalent at the Executive's age 65 of
A minus [B plus C], where
A equals the benefit the Executive would have been entitled to under the
Eastman Retirement Assistance Plan ("ERAP") as in effect on the effective
date of this Agreement, expressed as a single life annuity commencing at
age 65, assuming that
(i) for benefit accrual purposes, as though the Executive had 36 years of
continuous, full-time service with the Company;
(ii) for purposes of determining his Average Participating Compensation
("APC") under the ERAP,
(A) if he was employed by the Company for the entire Employment
Period, his APC shall be the higher of (1) his actual APC under
the ERAP, or (2) what his APC would have been as though the
target performance levels under the Company's annual cash
incentive plans had been achieved for each performance year
included within the Employment Period; or
(B) if was not employed by the Company for the entire Employment
Period, his APC shall be determined (1) for the period from
December 1, 1996, through his Date of Termination, by taking into
account his actual base salary received from December 1, 1996
through his Date of Termination; (2) for the period between his
Date of Termination and December 31, 2000, by assuming that he
would have continued to receive base salary from his Date of
Termination through December 31, 2000, at the rate in effect
immediately prior to his Date of Termination; (3) for the period
from December 1, 1996 through his Date of Termination, by taking
into account the higher of his actual payments received from the
Company's annual cash incentive plans during such period or what
such payments would have been if the target performance levels
under the Company's annual cash incentive plans had been achieved
for each performance year included within such period under this
clause (3); and (4) for the period between his Date of
Termination and December 31, 2000, by assuming that he would have
received payments under such annual cash incentive plans as
though the target performance levels under such plans had been
met for each performance year included within such period under
this clause (4); and
(iii) as though the legal restrictions the ERAP relating to the amount of
compensation (Internal Revenue Code Section 401(a)(17)) and the amount of
benefit (Internal Revenue Code Section 415) did not exist;
B equals the benefit the Executive is actually entitled to receive under
the ERAP at age 65, expressed as a single life annuity commencing at age
65; and
C equals a single life annuity of $196,065 per year, commencing at age 65,
which represents certain retirement benefits received by the Executive from
his prior employers.
For this purpose, "actuarial equivalent" shall mean the interest rate and
mortality table used by the ERAP in calculating the value of a lump sum benefit
as of the date of payment of this First Lump Sum.
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Notwithstanding the foregoing, if the Executive's Date of Termination is
prior to December 31, 2000, then the lump sum calculated under the preceding
paragraphs of this Exhibit A shall be multiplied by a fraction, the numerator of
which is the number of complete calendar months between November 30, 1996, and
the Date of Termination, and the denominator of which is forty-nine (49);
provided, however, that the calculation under this sentence shall not reduce the
lump sum payable to the Executive by more than fifty percent (50%) of the lump
sum that would be payable absent this paragraph.
Furthermore, if the reduced lump sum determined under the immediately
preceding sentence is required to be, and is in fact, paid before December 31,
2000, such reduced lump sum shall be discounted to present value as of the date
of payment of the lump sum using the interest rate that is used by the ERAP in
calculating the value of a lump sum benefit as of the date of payment of this
First Lump Sum.
SECOND LUMP SUM
In the event that the Company fails to perform at or above target
performance levels under its annual cash incentive plans in effect from time to
time (in the aggregate over the performance years included within the Employment
Period--December 1, 1996 through December 31, 2000), the Company will pay to the
Executive no later than May 1, 2001, an amount equal to (i) the aggregate
payments Executive would have received under such annual cash incentive plans
attributable to performance years included within the Employment Period (and
without adjusting for timing of payment), as if those target performance levels
had been achieved by the Company (in the aggregate, over the performance years
included within the Employment Period; reduced by (ii) the actual payments
received by the Executive under such annual cash incentive plans attributable to
the performance years included within the Employment Period.
THIRD LUMP SUM
At the written election of the Executive, to be made no later than the date
the Company announces to participants the performance results under the
Company's Long Term Performance Plan for the performance cycle ending in the
year 2000, and in lieu of receiving any payments under the Company's Long Term
Performance Plan after December 31, 2000, the Company shall pay to the Executive
no later than May 1, 2001, an amount equal to (i) the aggregate amount the
Executive would have received under the Long Term Performance Plan over each
performance cycle commencing within the Employment Period (and without adjusting
for timing of payment), as if the target performance levels for each cycle under
the Long Term Performance Plan had been achieved by the Company (in the
aggregate, over each performance cycle commencing within the Employment Period,
including cycles commencing within the Employment Period that end after the
expiration of the Employment Period); reduced by (ii) the actual payments
received by the Executive under the Long Term Performance Plan by May 1, 2001.
For purposes of this computation, payments made in the form of Company common
stock under the Long Term Performance Plan shall be valued at 100% of the
closing price of the Company's common stock on the New York Stock Exchange on
the last trading day immediately preceding the day the Company announces to
participants the performance results under the Company's Long Term Performance
Plan for the performance cycle ending in the year 2000.
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