PRIVILEGED AND CONFIDENTIAL
Exhibit 10.1
PRIVILEGED
AND CONFIDENTIAL
September 19,2008
,
Re: Change
in Control Agreement as revised to comply with
Internal Revenue Code Section
409A
Dear
:
Columbus
XxXxxxxx Corporation (the "Company") considers it essential to the best
interests of its stockholders to xxxxxx the continuous employment of key
management personnel. In this connection, the Board of Directors of
the Company (the "Board") recognizes that, as is the case with many publicly
held corporations, the possibility of a Change in Control of the Company may
exist and that such possibility, and the uncertainty and questions which it may
raise among management, may result in the departure or distraction of management
personnel to the detriment of the Company and its stockholders.
The Board
has determined that appropriate steps should be taken to reinforce and encourage
the continued attention and dedication of members of the Company's management,
including you, to their assigned duties without distraction in the face of
potentially disturbing circumstances arising from the possibility of a Change in
Control of the Company.
In order
to induce you to remain in the employ of the Company in your current executive
position, the Company agrees that you shall receive the severance benefits set
forth in this letter agreement (the "Agreement") in the event your employment in
your current executive position with the Company is terminated under the
circumstances described below subsequent to a "Change in Control of the Company"
(as defined in Section 2).
1. Term of
Agreement. This revision of the Change in Control Agreement
previously executed by you and the Company shall commence effective the date
hereof, and shall continue in effect through October 31, 2009; provided,
however, that commencing on November 1, 2009, and each November 1 thereafter,
the term of this Agreement shall automatically be extended for one additional
year unless, not later than April 30 of such year, the Company shall have given
notice that it does not wish to extend this Agreement; and provided, further,
that if a Change in Control of the Company, as defined in Section 2, shall have
occurred during the original or extended term of this Agreement, this Agreement
shall continue in effect for a period of not less than twenty-four (24) months
beyond the month in which such Change in Control occurred.
(a) Change in Share
Ownership—any "Person," as such term is used in Sections 13(d)
and 14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (other than the Company, any trustee or other fiduciary holding securities
under an employee benefit plan of the Company, or any Company owned, directly or
indirectly, by the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company), is or becomes the
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act), directly
or indirectly, of securities of the Company representing 20% or more of either
(i) the then outstanding shares of common stock of the Company or (ii) the
combined voting power of the Company's then outstanding voting
securities;
(b) Change in Board
Membership—during any period of two consecutive years (not including any
period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new director (other than
a director designated by a person who has entered into an agreement with the
Company to effect a transaction described in paragraph (a), (c), (d) or (e) of
this Section 2) whose election by the Board or nomination for election by the
Company's stockholders was approved by a vote of at least two-thirds (2/3) of
the directors then still in office who either were directors at the beginning of
the period or whose election or nomination for election was previously so
approved, cease for any reason to constitute at least a majority
thereof;
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(a) upon the commission by you of a
willful serious act, such as embezzlement, against the Company which is intended
to enrich you at the expense of the Company or upon your conviction of a felony
involving moral turpitude, or
(b) in the event of willful, gross
neglect or willful, gross misconduct resulting in either case in material harm
to the Company, or a violation of the Company’s Code of Conduct. For
purposes of this Section 3(iii), no act, or failure to act, on your part shall
be deemed "willful" unless done, or omitted to be done, by you not in good faith
and without reasonable belief that your action or omission was in the best
interest of the Company.
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(a) Material Reduction in Base
Pay—a material reduction by the Company in your annual base salary as in
effect on the date hereof or as the same may be increased from time to
time;
Your
right to terminate your employment pursuant to this Section 3(iv)
shall not be affected by your incapacity due to physical or mental
illness. Subject to the requirement that you give a Notice of
Termination to the Company within 90 days after the occurrence of a circumstance
constituting Good Reason, your continued employment shall not constitute consent
to, or a waiver of rights with respect to, any circumstance constituting Good
Reason hereunder.
(a) Disability—if your
employment is terminated for Disability in accordance with Section 3(ii), thirty
(30) days after Notice of Termination is given (provided
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that you
shall have been absent from the full-time performance of your duties and shall
not have returned to the full-time performance of your duties during such 30-day
period), and
(b) Other than
Disability—if your employment is terminated pursuant to Section 3(iii)
(Cause) or Section 3(iv) (Good Reason) hereof or for any other reason
(other than Disability), the date specified in the Notice of Termination (which,
in the case of a termination for Cause shall not be less than thirty (30) days
from the date such Notice of Termination is given, and in the case of a
termination for Good Reason shall not be less than thirty (30) nor more than
sixty (60) days from the date such Notice of Termination is given).
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(d) Payment In Lieu of Pension
Enhancement—you will receive from the Company a cash lump sum
payment equal to the actuarial equivalent of the excess of:
(1) the
hypothetical pension benefit you would have accrued under the terms of the
Company Pension Plan (without regard to any amendment to the Plan made
subsequent to a Change in Control of the Company and on or prior to the Date of
Termination which amendment adversely affects in any manner the computation of
retirement benefits thereunder) determined as if you were fully vested
thereunder and as if you continued to be employed full-time by the Company until
the earlier of the anniversary of your Date of Termination or your
attainment of Normal Retirement Age under the Company Pension Plan (the earlier
of the said two dates shall be your “Deemed Retirement Date”), over
(2) your actual pension benefit
determined under the Company Pension Plan as of your Date of
Termination.
For the
purpose of determining the excess amount in the preceding sentence: (1) your
hypothetical pension benefit and your actual pension benefit shall be calculated
as life annuities commencing on your Normal Retirement Date, (2) the
compensation used to compute the your hypothetical pension benefit shall be the
same as the compensation used to compute your actual pension benefit, as
determined under the Company Pension Plan, and (3) "actuarial equivalent" shall
be determined using the same methods and assumptions utilized under the Company
Pension Plan immediately prior to the Change in Control except that the lump sum
amount determined under this Section 4(iii)(d) shall be
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assumed
to be paid to you on your Deemed Retirement Date rather than the actual date of
payment.
(f) Stock Option
Vesting—unless otherwise provided in an equity award agreement, you shall
be fully vested as of the date of the Change in Control in any and all equity
awards (including but not limited to stock options and restricted stock) held by
you immediately prior to such Change in Control.
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contractual
commitment hereunder upon the grounds of lack of consideration, accord and
satisfaction or any other defense. In any dispute arising after a
Change in Control of the Company as to whether you are entitled to benefits
under this Agreement, there shall be a presumption that you are entitled to such
benefits and the burden of proving otherwise shall be on the
Company.
(iii) Governing
Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of New
York without regard to its conflicts of law principles.
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(i) Arbitration. Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration, conducted before a panel of three
arbitrators in the State of New York, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having jurisdiction.
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180 days
after the notice of dispute is given and pursuing resolution of the dispute
through the arbitration proceeding with reasonable diligence. The
Company shall pay to you all reasonable legal fees and expenses incurred by you
in contesting or disputing any such termination or in seeking to obtain or
enforce any right or benefit provided by this Agreement provided that the Court
or arbitrators do not find that you acted in bad faith.
11. Entire
Agreement. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and during
the term of the Agreement supersedes the provisions of all prior Change in
Control agreements entered into between you and the Company and all other prior
agreements, promises, covenants, arrangements, communications, representations
or warranties, whether oral or written, by any officer, employee or
representative of any party hereto with respect to the subject matter
hereof.
(i)
payment of reasonable legal fees and expenses incurred by
you in connection with a dispute, in accordance with Section
3(vi)(c);
(ii) payment of severance pay as
provided in Section 4(iii)(b) but only to the extent that such pay is paid on
account of involuntary separation from service, such pay does not exceed two
times the lesser of your annualized compensation or the amount that can be
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taken
into account under Internal Revenue Code Section 401(a)(17) in the calendar year
in which occurs your Date of Termination, and such pay is paid on or before the
last day of the second calendar year following the calendar year in which occurs
your Date of Termination, all within the meaning of within the meaning of Treas.
Reg. Sec. 1.409A-1(b)(9)(iii);
(iii) payment for outplacement services
in accordance with Section 4(iii)(e); or
(v) the acceleration of vesting of any
equity award (that does not constitute a deferral of compensation under the Code
Section 409A regulations) in accordance with Section 4(iii)(f).
You are a
“Specified Employee” if your Date of Termination occurs on or after July 1 of a
calendar year and you were a “key employee” within the meaning of Code Section
416(i)(1)(A)(i), (ii), or (iii) (applied in accordance with the regulations
thereunder and disregarding Code Section 416(i)(5)) at any time during the
12-consecutive month period ending on the preceding March 31. If your
Date of Termination occurs in a given calendar year before July 1 of that year,
you are a Specified Employee” if you were a “key employee” (within the meaning
of the preceding sentence) on any day during the second preceding 12-consecutive
month period ending on the preceding March 31.
If this
letter sets forth our agreement on the subject matter thereof, kindly sign and
return to the Company the enclosed copy of this letter, which will then
constitute our agreement on this subject.
Sincerely,
COLUMBUS
XxXXXXXX CORPORATION
By:
____________________________
Name: Xxxxxxx
X. Xxxxxx
Title: President
and Chief Executive Officer
Agreed as
of the ______
day of
__________________,
2008
______________________________________
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