Exhibit 99.5
[FORM OF]
EMPLOYMENT PROTECTION AGREEMENT
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THIS AGREEMENT between Loral Corporation, a New York corporation (the
"Company"), and ______________________ (the "Executive"), dated as of this 7th
day of January 1996.
W I T N E S S E T H :
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WHEREAS, the Company and the Executive have agreed to enter into an
agreement providing the Company and the Executive with certain rights upon the
occurrence of a Change of Control (as defined below) to assure the Company of
continuity of management;
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Company and the
Executive as follows:
1. Effective Date; Term. This Agreement shall be effective as of
January 7, 1996. The Company may terminate this Agreement upon five (5) days
advance written notice to the Executive; except that if this Agreement is in
effect immediately prior to the date of a Change of Control (the "Effective
Date"), it shall remain in effect for at least three (3) years following such
Change of Control, and such additional time as may be necessary to give effect
to the terms of this Agreement. This Agreement may also terminate as provided
in Section 2(b) hereof.
2. Change of Control. (a) Except as provided in Section 2(b)
hereof, for purposes of this Agreement, a "Change of Control" shall be deemed to
have occurred if: (i) any person (as defined in Section 3(a)(9) of the
Securities Exchange Act of 1934, as amended from time to time (the "Exchange
Act"), and as used in Sections 13(d) and 14(d) thereof)), excluding the Company,
any majority owned subsidiary of the Company (a "Subsidiary") and any employee
benefit plan sponsored or maintained by the Company or any Subsidiary (including
any trustee of such plan acting as trustee), but including a "group" as defined
in Section 13(d)(3) of the Exchange Act (a "Person"), becomes the beneficial
owner of shares of the Company having at least 50% of the total number of votes
that may be cast for the election of directors of the Company (the "Voting
Shares") provided, however, that such an event shall not constitute a Change of
Control if such acquisition has been approved by a majority of the Incumbent
Directors (as defined in subsection 2(a)(iii)); (ii) the shareholders of the
Company shall approve
any merger or other business combination of the Company, sale of the Company's
assets or combination of the foregoing transactions (a "Transaction") other than
a Transaction involving only the Company and one or more of its Subsidiaries, a
Transaction approved by a majority of the Incumbent Directors, or a Transaction
immediately following which the shareholders of the Company immediately prior to
the Transaction, excluding for this purpose any shareholder owning directly or
indirectly more than 10% of the shares of the other company involved in the
Transaction, continue to have a majority of the voting power in the resulting
entity, or (iii) within any 24-month period beginning on or after January 7,
1996, the persons who were directors of the Company immediately before the
beginning of such period (the "Incumbent Directors") shall cease (for any reason
other than death) to constitute at least a majority of the Board of Directors of
the Company (the "Board") or the board of directors of any successor to the
Company, provided that any director who was not a director as of January 7, 1996
shall be deemed to be an Incumbent Director if such director was elected to the
Board by, or on the recommendation of or with the approval of, at least two-
thirds of the directors who then qualified as Incumbent Directors either
actually or by prior operation of this subsection 2(a)(iii).
(b) This Agreement shall terminate upon, and no Change of Control shall be
deemed to occur as a result of, the successful consummation of the "Offer" (as
defined in Section 1.1(a) of the Agreement and Plan of Merger Dated as of
January 7, 1996 By and Among the Company, Lockheed Xxxxxx Corporation and LAC
Acquisition Corporation), or upon the successful consummation of any transaction
which is approved by the Incumbent Directors and as a result of which Lockheed
Xxxxxx Corporation or a wholly owned subsidiary thereof acquires substantially
all of the Company's voting securities or substantially all of the Company's
defense businesses.
3. Retention Period. If the Executive is employed on the Effective
Date, the Company agrees to continue the Executive in its employ, and the
Executive agrees to remain in the employ of the Company, for the period (the
"Retention Period") commencing on the Effective Date and ending on the earliest
to occur of (i) the third anniversary of the Effective Date, and (ii) the date
of any termination of the Executive's employment in accordance with Section 6 of
this Agreement.
Position and Duties. (a) No Reduction in Position. During the
Retention Period, the Executive's position (including titles), authority and
responsibilities shall be at least commensurate with the highest of those held
or exercised by him at any time during the 90-day period immediately preceding
the Effective Date.
(b) Business Time. During the Retention Period, the Executive shall
devote his full business time during normal
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business hours to the business and affairs of the Company and use his best
efforts to perform faithfully and efficiently the responsibilities assigned to
him hereunder, to the extent necessary to discharge such responsibilities,
except for
(i) reasonable time spent in serving on corporate, civic or
charitable boards or committees of the nature similar to those on which the
Executive served prior to the Change of Control, or otherwise approved by
the Board, in each case only if and to the extent not substantially
interfering with the performance of such responsibilities, and
(ii) periods of vacation and sick leave to which he is entitled.
It is expressly understood and agreed that the Executive's continuing to serve
on any boards and committees on which he is serving or with which he is
otherwise associated immediately preceding the Effective Date shall not be
deemed to interfere with the performance of the Executive's services to the
Company.
5. Compensation. (a) Base Salary. During the Retention Period,
the Executive shall receive a base salary ("Base Salary") at a monthly rate at
least equal to the monthly salary paid to the Executive by the Company and any
of its affiliated companies immediately prior to the Effective Date. The Base
Salary shall be reviewed at least once each year after the Effective Date, and
may be increased (but not decreased) at any time and from time to time by action
of the Board or any committee thereof or any individual having authority to take
such action in accordance with the Company's regular practices. Neither payment
of the Base Salary nor payment of any increased Base Salary after the Effective
Date shall serve to limit or reduce any other obligation of the Company
hereunder. For purposes of the remaining provisions of this Agreement, the term
"Base Salary" shall mean Base Salary as defined in this Section 5(a) or, if
increased after the Effective Date, the Base Salary as so increased.
(b) Annual Bonus. In addition to the Base Salary, the Executive shall
be awarded for each fiscal year of the Company ending during the Retention
Period an annual bonus (either pursuant to a bonus plan or program of the
Company or otherwise) in cash at least equal to the greater of the two most
recent fiscal year bonuses (annualized, if awarded in respect of a partial year)
awarded to the Executive prior to the Effective Date under the bonus program of
the Company applicable to such Executive ("Annual Bonus"). If a fiscal year of
the Company begins, but does not end, during the Retention Period, the Executive
shall receive an amount with respect to such fiscal year at least equal to the
amount of the Annual Bonus multiplied by a fraction, the numerator of which is
the number of days in
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such fiscal year occurring during the Retention Period and the denominator of
which is 365. Each amount payable in respect of the Executive's Annual Bonus
shall be paid not later than 90 days after the fiscal year next following the
fiscal year for which the Annual Bonus (or pro-rated portion) is earned or
awarded, unless electively deferred by the Executive pursuant to any deferral
programs or arrangements that the Company may make available to the Executive,
in which event such deferred amount shall be payable in accordance with the
terms of such deferral program or arrangement. Neither the Annual Bonus nor any
bonus amount paid in excess thereof after the Effective Date shall serve to
limit or reduce any other obligation of the Company hereunder.
(c) Incentive and Savings Plans and Retirement Programs. In addition
to the Base Salary and Annual Bonus payable as hereinabove provided, during the
Retention Period, the Executive shall be entitled to participate in all
incentive and savings plans and programs, including stock option plans and other
equity based compensation plans, and in all retirement plans, on a basis
providing him with the opportunity to receive compensation (without duplication
of the amount payable as an Annual Bonus) and benefits equal to those provided
by the Company to the Executive on an annualized basis under such plans and
programs as in effect at any time during the 90-day period immediately preceding
the Effective Date. With respect to participation in stock option plans,
Executive shall receive annual grants during the Retention Period at least equal
to the average annual grants made to Executive during the two fiscal years
immediately preceding the Effective Date.
(d) Benefit Plans. During the Retention Period, the Executive and his
family shall be entitled to participate in or be covered under all welfare
benefit plans and programs of the Company and its affiliated companies,
including all medical, dental, disability, group life, accidental death and
travel accident insurance plans and programs, as in effect at any time during
the 90-day period immediately preceding the Effective Date.
(e) Expenses. During the Retention Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in accordance with the policies and procedures of the Company as
in effect at any time during the 90-day period immediately preceding the
Effective Date.
(f) Vacation and Fringe Benefits. During the Retention Period, the
Executive shall be entitled to paid vacation and fringe benefits in accordance
with the policies of the Company as in effect at any time during the 90-day
period immediately preceding the Effective Date.
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(g) Office and Support Staff. During the Retention Period, the
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to secretarial and other assistance, at
least equal to the most favorable of the foregoing provided to the Executive at
any time during the 90-day period immediately preceding the Effective Date.
6. Termination. (a) Death or Disability. The Executive's
employment shall terminate automatically upon his death. The Company may
terminate Executive's employment during the Retention Period, after having
established the Executive's Disability, by giving the Executive written notice
of its intention to terminate his employment, and his employment with the
Company shall terminate effective on the 90th day after receipt of such notice
if, within 90 days after such receipt, the Executive shall fail to return to
full-time performance of his duties. For purposes of this Agreement,
"Disability" means disability which, after the expiration of more than 26 weeks
after its commencement, is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Executive or his
legal representatives (such agreement to acceptability not to be withheld
unreasonably).
(b) Voluntary Termination. Notwithstanding anything in this Agreement
to the contrary, the Executive may, upon not less than 30 days' written notice
to the Company, voluntarily terminate employment during the Retention Period for
any reason, provided that any termination by the Executive pursuant to Section
6(d) of this Agreement on account of Good Reason (as defined therein) shall not
be treated as a voluntary termination under this Section 6(b).
(c) Cause. The Company may terminate the Executive's employment
during the Retention Period for Cause. For purposes of this Agreement, "Cause"
means (i) gross misconduct on the Executive's part which is demonstrably willful
and deliberate and which results in material damage to the Company's business or
reputation or (ii) repeated material violations by the Executive of his
obligations under Section 4 of this Agreement which violations are demonstrably
willful and deliberate.
(d) Good Reason. The Executive may terminate his employment during
the Retention Period for Good Reason. For purposes of this Agreement, "Good
Reason" means
(i) a good faith determination by the Executive that, without his
prior written consent, the Company or any of its officers has taken or
failed to take any action (including, without limitation, (A) exclusion of
the Executive from consideration of material matters within his area of
responsibility, other than an insubstantial or inadvertent exclusion
remedied by the Company promptly after receipt of notice thereof from the
Executive, (B) statements
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or actions which undermine the Executive's authority with respect to
persons under his supervision or reduce his standing with his peers, other
than an insubstantial or inadvertent statement or action which is remedied
by the Company promptly after receipt of the notice thereof from the
Executive, (C) a pattern of discrimination against or harassment of the
Executive or persons under his supervision and (D) the subjection of the
Executive to procedures not generally applicable to other similarly
situated executives) which changes the Executive's position (including
titles), authority or responsibilities under Section 4 of this Agreement or
reduces the Executive's ability to carry out his duties and
responsibilities under Section 4 of this Agreement;
(ii) any failure by the Company to comply with any of the
provisions of Section 5 of this Agreement, other than an insubstantial or
inadvertent failure remedied by the Company promptly after receipt of
notice thereof from the Executive;
(iii) the Company's requiring the Executive to be employed at
any location more than 35 miles further from his principal residence than
the location at which the Executive was employed immediately preceding the
Effective Date; or
(iv) any failure by the Company to obtain the assumption of and
agreement to perform this Agreement by a successor as contemplated by
Section 14(b) of this Agreement.
(e) Notice of Termination. Any termination by the Company for Cause
or by the Executive for Good Reason during the Retention Period shall be
communicated by Notice of Termination to the other party hereto given in
accordance with Section 15(c) of this Agreement. For purposes of this
Agreement, a "Notice of Termination" means a written notice given, in the case
of a termination for Cause, within 10 business days of the Company's having
actual knowledge of all of the events giving rise to such termination, and in
the case of a termination for Good Reason, within 180 days of the Executive's
having actual knowledge of the events giving rise to such termination, and which
(i) indicates the specific termination provision in this Agreement relied upon,
(ii) sets forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated, and (iii) if the termination date is other than the date
of receipt of such notice, specifies the termination date of this Agreement
(which date shall be not more than 15 days after the giving of such notice).
The failure by the Executive to set forth in the Notice of Termination any fact
or circumstance which contributes to a showing of Good Reason shall not waive
any right of the Executive hereunder or preclude the Executive from asserting
such fact or circumstance in enforcing his rights hereunder.
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(f) Date of Termination. For purposes of this Agreement, the term
"Date of Termination" means (i) in the case of a termination for which a Notice
of Termination is required, the date of receipt of such Notice of Termination
or, if later, the date specified therein and (ii) in all other cases, the actual
date on which the Executive's employment terminates during the Retention Period.
7. Obligations of the Company upon Termination. (a) Death. If
the Executive's employment is terminated during the Retention Period by reason
of the Executive's death, this Agreement shall terminate without further
obligations to the Executive's legal representatives under this Agreement other
than those obligations accrued hereunder at the date of his death, including,
for this purpose (i) the Executive's full Base Salary through the Date of
Termination, (ii) the product of the Annual Bonus and a fraction, the numerator
of which is the number of days in the current fiscal year of the Company through
the Date of Termination, and the denominator of which is 365 (the "Pro-rated
Bonus Obligation"), (iii) any compensation previously deferred by the Executive
(together with any accrued earnings thereon) and not yet paid by the Company and
(iv) any other amounts or benefits owing to the Executive under the then
applicable employee benefit plans or policies of the Company (such amounts
specified in clauses (i), (ii), (iii) and (iv) are hereinafter referred to as
"Accrued Obligations"). Unless otherwise directed by the Executive (or, in the
case of any employee benefit plan qualified (a "Qualified Plan") under Section
401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), as may be
required by such plan), all such Accrued Obligations shall be paid to the
Executive's legal representatives in a lump sum in cash within 30 days of the
Date of Termination. Anything in this Agreement to the contrary
notwithstanding, the Executive's family shall be entitled to receive benefits at
least equal to the most favorable level of benefits available to surviving
families of executives of the Company and its affiliates under such plans,
programs and policies relating to family death benefits, if any, of the Company
and its affiliates in effect at any time during the 90-day period immediately
preceding the Effective Date.
(b) Disability. If the Executive's employment is terminated by reason
of the Executive's Disability, the Executive shall be entitled, after the Date
of Termination until the date when the Retention Period would otherwise have
terminated, to continue to participate in or be covered under the benefit plans
and programs referred to in Section 5(d) of this Agreement or, at the Company's
option, to receive equivalent benefits by alternate means at least equal to
those provided in accordance with Section 5(d) of this Agreement. Unless
otherwise directed by the Executive (or, in the case of any Qualified Plan, as
may be required by such plan), the Executive shall also be paid all Accrued
Obligations in a lump sum in cash within 30 days of the
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Date of Termination. Anything in this Agreement to the contrary notwithstanding,
the Executive shall be entitled to receive disability and other benefits at
least equal to the most favorable level of benefits available to disabled
employees and/or their families in accordance with the plans, programs and
policies maintained by the Company or its affiliates relating to disability at
any time during the 90-day period immediately preceding the Effective Date.
(c) Cause and Voluntary Termination. If, during the Retention Period,
the Executive's employment shall be terminated for Cause or voluntarily
terminated by the Executive (other than on account of Good Reason), the Company
shall pay the Executive the Accrued Obligations other than the Pro-rated Bonus
Obligation. Unless otherwise directed by the Executive (or, in the case of any
Qualified Plan, as may be required by such plan), the Executive shall be paid
all such Accrued Obligations in a lump sum in cash within 30 days of the Date of
Termination and the Company shall have no further obligations to the Executive
under this Agreement.
(d) Termination by Company other than for Cause or Disability and
Termination by Executive for Good Reason. (i) Lump Sum Payment. If, during the
Retention Period, the Company terminates the Executive's employment other than
for Cause or Disability, or the Executive terminates his employment for Good
Reason, the Company shall pay to the Executive in a lump sum in cash within 15
days after the Date of Termination the aggregate of the following amounts:
(A) if not theretofore paid, the Executive's Base Salary through the
Date of Termination at the rate specified in Section 5(a) of this
Agreement;
(B) a cash amount equal to three times the sum of
(1) the Executive's annual Base Salary at the rate specified in
Section 5(a) of this Agreement;
(2) the Annual Bonus; and
(3) an amount equal to the average annual compensation received
by the Executive (determined as the sum of the amount includable as
current income to the Executive for tax purposes plus any amount which
would have been so includable but for a deferral election) under the
Company's restricted stock plan over the three fiscal years prior to
the Change of Control; and
(4) the present value, calculated using the annual federal
short-term rate as determined under Section 1274(d) of the Code, of
(without duplication) (x) the annual cost to the Company (based on the
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premium rates or other costs to it) of obtaining coverage equivalent
to the coverage under the plans and programs described in Section 5(d)
of this Agreement, and (y) the annualized value of the fringe benefits
described under Section 5(f) of this Agreement;
provided, however, that with respect to the life and medical insurance
coverage referred to in Section 5(d) of this Agreement, at the Executive's
election made prior to the Date of Termination, the Company shall use its
best efforts to secure conversion coverage and shall pay the cost of such
coverage in lieu of paying the lump sum amount attributable to such life or
medical insurance coverage; and
(C) a cash amount equal to any amounts (other than amounts
payable to the Executive under any Qualified Plans) described in Sections
7(a)(iii) and (iv) of this Agreement.
(ii) Discharge of Company's Obligations. Subject to the performance
of its obligations under this Section 7(d), the Company shall have no further
obligations to the Executive in respect of any termination by the Executive for
Good Reason or by the Company other than for Cause or Disability, except to the
extent expressly provided under any of the plans referred to in Section 5(c) or
5(d) of this Agreement.
8. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Executive's continuing or future participation in any
benefit, bonus, incentive or other plan or program provided by the Company or
any of its affiliated companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise prejudice such rights as the Executive
may have under any stock option or other plans or agreements with the Company or
any of its affiliated companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan or program of the
Company or any of its affiliated companies at or subsequent to the Date of
Termination shall be payable in accordance with such plan or program.
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9. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by the Company to
or for the benefit of the Executive (whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this Section
9) (a "Payment") would be subject to the excise tax imposed by Section 4999 of
the Code (or any successor provision) or any interest or penalties are incurred
by the Executive with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an additional
payment (a "Gross-Up Payment") in an amount such that after payment by the
Executive of all taxes with respect to the Gross-Up Payment (including any
interest or penalties imposed with respect to such taxes), including, without
limitation, any income taxes (and any interest and penalties imposed with
respect thereto) and Excise Tax imposed upon the Gross-Up Payment, the Executive
retains an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the payments.
(b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a Gross-Up
Payment is required and the amount of such Gross-Up Payment and the assumptions
to be utilized in arriving at such determination, shall be made by Coopers &
Xxxxxxx or such other nationally recognized accounting firm then auditing the
accounts of the Company (the "Accounting Firm") which shall provide detailed
supporting calculations both to the Company and the Executive within 15 business
days of the receipt of notice from the Executive that there has been a Payment,
or such earlier time as is requested by the Company. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, or is unwilling or unable to perform
its obligations pursuant to this Section 9, the Executive shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, determined pursuant to this Section
9, shall be paid by the Company to the Executive within five days of the receipt
of the Accounting Firm's determination. Any determination by the Accounting Firm
shall be binding upon the Company and the Executive. As a result of the
potential uncertainty in the application of Section 4999 of the Code (or any
successor provision) at the time of the initial determination by the Accounting
Firm hereunder, it is possible that Gross-Up Payments which will not have been
made by the Company should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the Company
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exhausts its remedies pursuant to Section 9(c) and the Executive thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Company to or for the benefit of the
Executive.
(c) The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than 20 business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature of
such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which he gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Company notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to
time, including, without limitation, accepting legal
representation with respect to such claim by an attorney
reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order effectively
to contest such claim, and
(iv) permit the Company to participate in any proceedings relating
to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limiting the foregoing provisions of
this Section 9(c), the Company shall control all proceedings taken in connection
with such contest and, at its sole option, may pursue or forgo any and all
administrative appeals, proceedings, hearings and conferences with the taxing
authority in respect of such claim and may, at its sole option, either direct
the Executive to pay the tax claimed and xxx for a refund or contest the claim
in any permissible manner, and the Executive agrees to prosecute such contest to
a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate
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courts, as the Company shall determine; provided, however, that if the Company
directs the Executive to pay such claim and xxx for a refund, the Company shall
advance the amount of such payment to the Executive, on an interest-free basis,
and shall indemnify and hold the Executive harmless, on an after-tax basis, from
any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
the Executive with respect to which such contested amount is claimed to be due
is limited solely to such contested amount. Furthermore, the Company's control
of the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and the Executive shall be entitled to settle
or contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced by
the Company pursuant to Section 9(c), the Executive becomes entitled to receive
any refund with respect to such claim, the Executive shall (subject to the
Company's complying with the requirements of Section 9(c)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). If, after the receipt by the Executive
of an amount advanced by the Company pursuant to Section 9(c), a determination
is made that the Executive shall not be entitled to any refund with respect to
such claim and the Company does not notify the Executive in writing of its
intent to contest such denial of refund prior to the expiration of 30 days after
such determination, then such advance shall be forgiven and shall not be
required to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.
10. Full Settlement. The Company's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Executive or others whether by reason of the
subsequent employment of the Executive or otherwise. In no event shall the
Executive be obligated to seek other employment by way of mitigation of the
amounts payable to the Executive under any of the provisions of this Agreement,
and no amount payable under this Agreement shall be reduced on account of any
compensation received by the Executive from other employment. In the event that
the Executive shall in good faith give a Notice of Termination for Good Reason
and it shall thereafter be determined by mutual consent of the Executive and the
Company or by a tribunal having jurisdiction over the matter that Good Reason
did not exist, the employment of the Executive shall, unless the Company and the
Executive shall otherwise
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mutually agree, be deemed to have terminated, at the date of giving such
purported Notice of Termination, by mutual consent of the Company and the
Executive and, except as provided in the last preceding sentence, the Executive
shall be entitled to receive only those payments and benefits which he would
have been entitled to receive at such date otherwise than under this Agreement.
11. Disputes; Legal Fees and Expenses. (a) Any dispute or
controversy arising under or in connection with this Agreement shall be settled
exclusively and finally by expedited arbitration, conducted before a single
arbitrator in New York, New York, in accordance with the rules governing
employment disputes then in effect of the American Arbitration Association and
the procedures set forth on Exhibit A hereto. The arbitrator shall be approved
by both the Company and the Executive. Judgment may be entered on the
arbitrator's award in any court having jurisdiction.
(b) In the event that any claim by the Executive under this Agreement
is disputed, the Company shall pay all reasonable legal fees and expenses
incurred by the Executive in pursuing such claim, provided that the Executive is
successful as to at least part of the disputed claim by reason of arbitration,
settlement or otherwise.
12. Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, (i) obtained by the Executive during
his employment by the Company or any of its affiliated companies and (ii) not
otherwise public knowledge (other than by reason of an unauthorized act by the
Executive). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company,
unless compelled pursuant to an order of a court or other body having
jurisdiction over such matter, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it.
In no event shall an asserted violation of the provisions of this Section 12
constitute a basis for deferring or withholding any amounts otherwise payable to
the Executive under this Agreement.
13. Employment Contract or Severance Benefits. Notwithstanding
anything else in this Agreement to the contrary, any amount payment to the
Executive hereunder on account of his termination of employment shall be reduced
on a dollar for dollar basis by each dollar actually paid to the Executive with
respect to such termination under the terms of any employment contract between
the Executive and the Company or under any severance program or policy
applicable to the Executive. Nothing in this Agreement shall be construed to
require duplication of any compensation, benefits or other entitlements provided
to the
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Executive by the Company under the terms of any employment contract which may
address similar matters.
14. Successors. (a) This Agreement is personal to the Executive
and, without the prior written consent of the Company, shall not be assignable
by the Executive otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors. The Company shall require any successor to all
or substantially all of the business and/or assets of the Company, whether
direct or indirect, by purchase, merger, consolidation, acquisition of stock, or
otherwise, by an agreement in form and substance satisfactory to the Executive,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent as the Company would be required to perform if no such
succession had taken place.
15. Miscellaneous. (a) Applicable Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
applied without reference to principles of conflict of laws.
(b) Amendments. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
(c) Notices. All notices and other communications hereunder shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive: at the address listed below
(with a copy to ____________ )
If to the Company: _____________________________
_____________________________
_____________________________
Attention: Secretary
(with a copy to the attention of
the General Counsel)
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notices and communications shall be effective
when actually received by the addressee.
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(d) Tax Withholding. The Company may withhold from any amounts
payable under this Agreement such Federal, State or local taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) Severability. The invalidity or unenforceability of any provision
of this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(f) Captions. The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Company has caused this Agreement to be executed in its name on its behalf, and
its corporate seal to be hereunto affixed and attested by its Corporate Counsel,
all as of the day and year first above written.
LORAL CORPORATION
By_______________________
Name:
Title:
EXECUTIVE:
_________________________
Address:
_________________________
_________________________
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