CHANGE IN CONTROL AGREEMENT
This Agreement is made as of , 1997, by and between XXXXXXXX'X
INTERNATIONAL, INC., a Delaware corporation (the "Company") and
_________________ (the "Executive").
WHEREAS, for purposes of this Agreement, "Company" is hereby defined to
include Xxxxxxxx'x International, Inc. and all of its wholly-owned subsidiaries
or subsidiaries of subsidiaries now or hereafter in existence.
WHEREAS, the Company believes it to be in its best interest to provide
for continuity of management and to protect its management personnel against
financial hardship in the event of a change in control of the Company.
NOW, THEREFORE, in consideration of premises and the mutual terms and
conditions hereof, the company and the Executive hereby agree as follows:
1. Termination After Change in Control. In the event of a Change in
Control, as defined below, any termination of Executive's employment with the
Company within the 12 month period following such Change in Control, whether by
Executive or by the Company and whether with or without cause, the following
shall occur:
a. On the tenth business day following the effective date of
such termination, the Executive shall receive a lump sum payment in
cash equal to (i) his current fiscal year annualized salary times a
multiple ("Multiple") and (ii) either an amount equal to (a) the
Multiple times his/her prior year's bonus, if such a Change in Control
occurs during the first six months of any year, or (b) if the Change in
Control occurs in the second six months of any year, the Multiple times
the annualized amount of all earned bonuses, including any amount of
accrued but unpaid bonus amounts (including any hold backs), calculated
under the Executive Bonus Plan for each prior fiscal quarter in the
fiscal year in which the termination becomes effective, including the
fiscal quarter in which the termination becomes effective (so long as
the termination becomes effective after the ninth week of such fiscal
quarter). Multiple is defined as a fraction, the denominator of which
is twelve (12) and the numerator of which is a number equal to twelve
(12) plus a number equal to the number of years of service of the
Executive for the Company, rounded to the nearest whole number, said
numerator not to exceed twenty (20). By way of example only, the
payment to be made pursuant to the foregoing as a result of a Change in
Control occurring in March regarding an executive with 2.6 years of
service, who earns a base salary of $100,000 and who received a bonus
during the preceding year of $40,000 would be computed as follows:
$100,000 x 15/12 + $40,000 x 15/12 = $175,000; and
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by way of further example only, the payment to be made pursuant to the
foregoing as a result of a Change in Control occurring in second week
of September regarding an Executive who earns a base salary of $100,000
and who received a bonus for the first two quarters of the year in the
amount of $15,000 paid and $7,500 accrued but unpaid and who upon
calculation of the projected bonus for the 3rd quarter would be
eligible for an additional $7,500, the amount would be computed as
follows:
$100,000 x 15/12 + $22,500 x 15/12 + $7,500 x 15/12 + ($30,000
x 3/4) x 15/12 = $190,625.00; and
b. The Executive shall be entitled to continuation of coverage
for twelve (12) months (beginning with the month subsequent to the
effective date of such termination) under all Company paid or partially
paid health, disability, or group life insurance plans or any
retirement, pension, or profit sharing plans, or any stock, restrictive
stock, phantom stock, stock appreciation rights or other such option or
incentive plan, in each case at such level as had been available to the
Executive immediately prior to the Change in Control; and
c. Any unvested portion of all stock options held by the
Executive as of the day immediately preceding the effective date of
such termination shall immediately vest and become exercisable and, for
purposes of such options, such termination shall be deemed to be a
termination by the Company not for cause. Further, any restricted stock
held by the Executive shall be deemed unrestricted as of the day
immediately preceding the effective date of such termination.
2. Definitions Related to Change in Control.
a. "Change in Control" means any one of the following: (i)
Continuing Directors no longer constitute at least 2/3 of the Board of
Directors; (ii) any person or group of persons (as defined in Rule
13d-5 under the Securities Exchange Act of 1934), together with its
affiliates, become the beneficial owner, directly or indirectly, or 30%
or more of the Company's then outstanding Common Stock or 30% or more
of the voting power of the Company's then outstanding securities
entitled generally to vote for the election of the Company's Directors;
(iii) the approval by the Company's stockholders of the merger or
consolidation of the Company with any other corporation, the sale of
substantially all of the assets of the Company or the liquidation or
dissolution of the Company, unless, in the case of a merger or
consolidation, then Continuing Directors in office immediately prior to
such merger or consolidation will constitute at least 2/3 of the Board
of Directors of the surviving corporation of such merger or
consolidation and any parent (as such term is defined in Rule 12b-2
under the Securities Exchange Act of 1934) of such corporation; or (iv)
at least 2/3 of the then Continuing Directors in office immediately
prior to any other action proposed to be taken by the Company's
Stockholders or by the Company's Board of Directors determine that such
proposed action, if taken, would constitute a change of control of the
Company and such action is taken.
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b. "Continuing Director" means any individual who either (i)
was a member of the Company's Board of Directors on the date hereof, or
(ii) was designated (before initial election as a Director) as a
continuing Director by a majority of the then Continuing Directors.
3. Arbitration of Disputes. Any dispute or claim arising out of or
relating to this Agreement shall be settled by arbitration in Xxxxxxx County,
Kansas in accordance with the then current rules of the American Arbitration
Association, and judgment upon any award rendered therein may be entered in any
court having proper jurisdiction. The Company shall bear the full cost of any
arbitration, including the expenses and attorneys' fees incurred by the
Executive related thereto and including any actions taken by either party to
appeal or enforce the judgment rendered therein, regardless of the outcome of
such arbitration, and the Company shall not be entitled to use any lawyer who is
a Company employee to represent it in any dispute or arbitration related hereto.
Notwithstanding the foregoing, if the Company refuses to arbitrate such a
dispute and the same is submitted to a court for resolution, the Company shall
pay all attorneys fees and expenses as incurred by Executive in enforcing this
Agreement, in addition to any such fees and expenses incurred by the Company.
Conversely, if the Executive refuses to arbitrate such a dispute and the same is
submitted to a court for resolution, the Company shall not be obligated to pay
Executive's attorneys fees or expenses. Provided however, in no event shall the
attorneys fees to be paid by the Company on behalf of the Executive exceed
$25,000.
4. Mitigation. The Executive shall have no duty to attempt to mitigate
the level of benefits payable by the Company to him hereunder and the Company
shall not be entitled to set off against the amounts payable hereunder any
amounts received by the Executive from any other source, including any
subsequent employer.
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5. General Provisions.
a. Law governing. This Agreement shall be governed by and
construed in accordance with the laws of the State of Kansas.
b. Termination. This Agreement shall remain in effect for a
period of three (3) years from and after the date hereof and shall be
automatically extended thereafter for additional terms of one (1) year
each, unless either party has provided the other party written notice
of the termination hereof sixty (60) days prior to the end of the then
applicable term. Notwithstanding the foregoing, if a Change in Control
occurs, this Agreement shall not terminate or be terminable by either
party until twelve (12) months after the effective date of the Change
in Control.
c. Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable, such provision shall be
fully severable and this Agreement shall be construed and enforced as
if such illegal, invalid, or unenforceable provision had never
comprised a part hereof; and the remaining provisions hereof shall
remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance
herefrom. Furthermore, in lieu of such illegal, invalid, or
unenforceable provision there shall be added automatically as a part of
this Agreement a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and still be
legal, valid or enforceable.
d. Entire Agreement. This Agreement sets forth the entire
understanding of the parties and supersedes all prior agreements or
understandings, whether written or oral, with respect to termination or
severance benefits payable by the Company to the Executive. No terms,
conditions, warranties, other than those contained herein, and no
amendments or modifications hereto shall be binding unless made in
writing and signed by the parties hereto.
e. Binding Effect. This Agreement shall extend to and be
binding upon and inure to the benefit to the parties hereto, their
respective heirs, representatives, successors and assigns. This
Agreement may not be assigned by the Executive.
f. Waiver. The waiver by either party hereto of a breach of
any term or provision of this Agreement shall not operate or be
construed as a waiver of a subsequent breach of the same provision by
any party or of the breach of any other term or provision of this
Agreement.
g. Titles. Titles of the paragraphs herein are used solely for
convenience and shall not be used for interpretation or construing any
work, clause, paragraph, or provision of this Agreement.
h. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which
together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Agreement as of the date and year first above written above.
EXECUTIVE: XXXXXXXX'X INTERNATIONAL, INC.
------------------ By:-----------------------------
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