EXHIBIT 10.3
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT ("Agreement") is entered into by and between
Provident Senior Living Trust ("Provident Trust"), a Maryland real estate
investment trust, and Xxxxxx X. Xxxxxxxx, Xx.("the Executive") and shall only
become effective upon the effective date (the "Effective Date") of the first
issuance of securities in a private offering under rule 144A, expected to be
completed on or about May 31, 2004 (the "Private Offering") of common shares of
beneficial ownership in Provident Trust ("Common Shares").
1. Employment. Provident Trust hereby agrees to employ the Executive,
and the Executive hereby agrees to accept such employment, for the period
commencing on the Effective Date and ending on the third anniversary of the
Effective Date, subject to earlier termination of in accordance with the terms
of this Agreement (the "Employment Period"). The Employment shall be
automatically renewed for a one-year period on the third anniversary of the
Effective Date and on each anniversary of the Effective Date thereafter, unless
either party has notified the other in writing at least six months prior to the
expiration of the then Employment Period that it does not want the Employment
Period to so renew. Unless prevented by sickness or disability, the Executive
shall use his best and most diligent efforts to promote the interests of
Provident Trust and its affiliates and shall devote his full business time and
attention to his employment under this Agreement. The Executive will not,
without the prior written approval of Provident Trust's Board of Trustees,
engage in any other business activity that would interfere with the performance
of his duties, services and responsibilities hereunder or that is in violation
of policies established by Provident Trust; provided, however, that this
Agreement shall not be interpreted as prohibiting the Executive from managing
his personal affairs, engaging in charitable or civic activities or engaging in
other activities that the Executive believes in good faith are beneficial to the
business, prospects and reputation of Provident Trust.
2. Title. At all times during the Employment Period, (i) the
Executive's title shall be Chief Executive Officer and President of Provident
Trust, and (ii) Provident Trust shall cause the Executive to be appointed to its
Board of Trustees (the "Board of Trustees"). The Executive shall have the
powers, responsibilities and authorities of Chief Executive Officer, President,
Trustee and Chairman of the Board of Trustees, as established by custom and
practice or as otherwise determined by the Board of Trustees, and the Executive
shall report solely to the Board of Trustees.
3. Compensation. As compensation for the Executive's services under
this Agreement, Provident Trust shall pay the Executive a base salary at the
rate of $350,000 per year, payable in equal installments in accordance with
Provident Trust's practice. Beginning in the first quarter of 2005, the
Executive's base salary then in effect and other components of his compensation
shall be reviewed and, if appropriate, revised by the Board of Trustees no less
frequently than annually, provided that the Executive's annual base salary shall
not be less than $350,000 during the Employment Period and shall be increased
annually by not less than the increase, if any, in the New York-Northern NJ-Long
Island, NY-NJ-CT-PA Consumer Price
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Index for the 12 months preceding the date of such review. The Executive shall
not participate in such compensation review or revision.
4. Annual Incentive. The Executive shall be eligible to participate in
Provident Trust's annual incentive bonus plan in accordance with its terms and
conditions as determined by the Board or a committee thereof from time to time.
During the Employment Period, the target amount of such bonus shall be 100% of
the Executive's base salary at the end of the prior calendar year. The actual
amount of the annual bonus shall be determined by the Board of Trustees (or a
committee thereof) and may be greater than the target amount for such year. In
making such determination, the Board of Trustees or such committee will
consider, among other criteria, the Executive's performance, Provident Trust's
overall economic performance and Provident Trust's performance relative to its
industry peers. For award year 2004, the Executive shall be eligible for a bonus
payable in February 2005 or as soon thereafter as practicable. The Executive
shall not participate in deliberations or determinations of the Board of
Trustees concerning his bonus.
5. Long-Term Incentives. The Executive shall be eligible to receive
annual awards under Provident Trust's Long Term Incentive Plan and under any
additional, replacement or successor long-term incentive compensation plans,
programs or arrangements applicable to senior-level executives. The form, amount
and grant date of any long-term incentives shall be determined by the Board of
Trustees (or a committee thereof). The Executive shall not participate in such
determination.
6. OP Award. Upon the Effective Date, the Executive also shall receive
an award of a partnership interest in PSLT OP, L.P., Provident Trust's operating
partnership ("Provident OP"). The terms and conditions of such award shall be as
described in Attachment "A" annexed hereto.
7. Participation in Other Benefit Plans. As an employee of Provident
Trust, the Executive shall be eligible to participate in Provident Trust's
employee benefit plans for its salaried employees on a basis comparable to
Provident Trust's other most senior executives, including but not limited to its
medical, dental, disability, life insurance, retirement and savings plans,
subject to any contribution requirements applicable to participants of such
plans and programs.
8. Other Benefits.
(a) During the Employment Period, the Executive is authorized
to incur reasonable business expenses in carrying out his duties and
responsibilities under this Agreement. Provident Trust shall reimburse him for
all such reasonable business expenses subject to and in accordance with the
terms and conditions of Provident Trust's policies applicable to senior
executives.
(b) Provident Trust shall indemnify and hold harmless the
Executive in the same amount and to the same extent as its other senior officers
and trustees for any action or inaction of the Executive while serving as an
officer, trustee or director of Provident Trust or any
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of its affiliates or, at Provident Trust's request, as an officer or director of
any other entity or as a fiduciary of any benefit plan. Provident Trust shall
cover the Executive under directors and officers liability insurance both during
and, while potential liability exists, after termination of employment in the
same amount and to the same extent as Provident Trust covers its other senior
officers, directors and trustees.
(c) During the Employment Period, the Executive shall be
entitled to take four weeks of paid vacation during each calendar year, subject
to and in accordance with the terms and conditions of Provident Trust's vacation
policies applicable to senior executives. Executive recognizes his
responsibilities to Provident Trust and its Affiliates and will take those
responsibilities into account when scheduling and taking vacations.
9. Full Settlement. Provident Trust's obligation to make the payments
or grant the benefits provided for in this Agreement and otherwise to perform
its obligations hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which Provident Trust may
have against the Executive or others, except as otherwise provided in this
Agreement. In no event shall the Executive be obligated to seek other employment
or take any other action by way of mitigation of the amounts payable or benefits
granted to the Executive under any of the provisions of this Agreement and such
amounts or benefits shall not be reduced because the Executive obtains other
employment, except as otherwise provided in this Agreement, except that any
continued healthcare benefits provided for in subparagraphs 10(b) and 10(c)
shall be secondary to any coverage provided to the Executive and his spouse and
eligible dependents by any such other employment.
10. Termination.
(a) By Provident Trust for Cause. Upon written notice to the
Executive specifying the basis for such action, Provident Trust may discharge
the Executive and terminate this Agreement for Cause. As used in this paragraph,
"Cause" shall exist only if, after reasonable investigation, a majority of the
Board of Trustees (excluding the Executive), after providing the Executive (and
his counsel, if he so chooses) a reasonable opportunity to be heard, finds that
one or more of the following conditions exists: (i) an act or acts of personal
dishonesty or misrepresentation made by the Executive and intended to result in
substantial personal enrichment of the Executive at the expense of Provident
Trust; (ii) demonstrably willful and deliberate violations by the Executive of
the Executive's obligations under this Agreement; (iii) the Executive's gross
neglect (other than any such failure resulting from incapacity due to physical
or mental illness) or gross misconduct in carrying out his duties resulting, in
either case, in material economic harm to Provident Trust; (iv) the final,
non-appealable conviction by a court of law of, or plea of nolo contendere by,
the Executive of a felony. Upon Provident Trust's termination of this Agreement
for Cause, (i) the Executive shall forfeit any remaining equity awards granted
under paragraph 5 hereof (whether or not vested) that have not yet been
exercised or become unrestricted (as applicable) as of the date of such
termination; (ii) Provident Trust shall have no obligation to provide severance
or separation pay to the Executive; and (iii) Provident Trust shall be relieved,
as of the effective date of the termination, from any further salary or
compensation payments to the Executive other than the payment of accrued or
vested benefits. For purposes of the foregoing sentence, the annual bonus
described in paragraph 4, and
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equity and incentive awards described in paragraphs 5 and 6 shall not be deemed
accrued or vested benefits.
(b) By Provident Trust without Cause or by Reason of
Disability, by Reason of Death, or by the Executive for Good Reason. Upon
written notice to the Executive, Provident Trust may discharge the Executive and
terminate this Agreement without Cause at any time during the Employment Period.
Upon written notice to the Executive specifying the basis for such action,
Provident Trust may discharge the Executive and terminate this Agreement at any
time during the Employment Period by reason of Disability which, for purposes of
this Agreement, means the failure of the Executive to carry out substantially
and effectively Executive's duties and responsibilities hereunder for a period
in excess of three consecutive months or six months in any 12-month consecutive
period. Upon the death of the Executive during the Employment Period, this
Agreement will terminate. Upon written notice to Provident Trust specifying the
basis for such action, the Executive may terminate this Agreement during the
Employment Period for Good Reason which, for purposes of this Agreement, will
arise only upon (i) any material adverse change in the Executive's titles,
powers, responsibilities, authorities or reporting relationships, (ii) any
material breach by Provident Trust of any material provision of this Agreement,
or (iii) the relocation of the Executive's principal place of performance more
than 20 miles from New York, New York, or Princeton, New Jersey, in each case
which occurs without the Executive's prior written consent and which is not
fully corrected within 30 days of written notice to the Board of Trustees. Upon
termination of this Agreement during the Employment Period either by Provident
Trust without Cause or by reason of Disability, by reason of the death of the
Executive, or by the Executive for Good Reason (as described above), Provident
Trust shall be relieved of any further salary or compensation payments to the
Executive other than the payment of accrued or vested benefits. Notwithstanding
the preceding sentence, in return for a general release and waiver of claims,
(i) the Executive (or, if applicable, the Executive's designated beneficiary or,
in the absence of a designated beneficiary, the Executive's estate) shall also
be entitled to receive a severance payment (subject to appropriate payroll and
tax withholding and deductions) equal in amount to twice the sum (one times the
sum in the case of termination by reason of Disability) of the Executive's then
current annual base pay plus the last annual bonus he received from Provident
Trust prior to such termination (annualized if not for a full year), and payment
for 12 months by Provident Trust of the premium cost of COBRA continuation
coverage for him and any spouse and dependents who are eligible for COBRA
continuation coverage, and (ii) any remaining equity awards granted under
paragraph 5 or 6 hereof that have not yet become vested, exercisable or
unrestricted (as applicable) as of the date of such termination shall become
vested, exercisable or unrestricted (as applicable). The foregoing benefits
shall be in lieu of any other severance payment or arrangement under any
Provident Trust plan, policy or practice, and (i) the severance portion of such
benefits shall be paid in a single lump sum as soon as reasonably practicable
after the Executive's termination, and (ii) in the case of termination by reason
of Disability, such benefits shall be paid in 12 equal monthly installments
beginning on the last day of the month following the month in which the
Executive's employment with Provident Trust terminated; provided, however, that
upon the Executive's post-employment substantial or material breach of any of
his obligations set forth in paragraph 11 below, or upon Provident Trust's
learning after the termination of the Executive's employment that the Executive
either breached any such obligation during the Employment Period, or engaged in
conduct during the Employment Period
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that would have warranted the termination of this Agreement for Cause under
paragraph 10(a) hereof, Provident Trust shall be relieved of the obligation to
make any, or any further, severance or COBRA payment or payments under this
subparagraph 10(b), and any remaining equity awards that have not yet been paid,
exercised or transferred shall thereupon be forfeited.
(c) By Provident Trust without Cause or by the Executive for
Good Reason Following a Change in Control. If within two years of a "Change in
Control" as defined in Attachment "B" annexed hereto, the Executive's employment
with Provident Trust is terminated by Provident Trust without Cause or by the
Executive for Good Reason, Provident Trust shall be relieved of any further
salary or compensation payments to the Executive other than the payment of
accrued or vested benefits. Notwithstanding the preceding sentence, in return
for a general release and waiver of claims, (i) the Executive shall be entitled
to receive (i) a lump sum severance payment (subject to appropriate payroll and
tax withholding and deductions) equal in amount to three times the sum of the
Executive's current annual base pay plus the last annual bonus he received from
Provident Trust prior to such termination (annualized if not for a full year),
and payment for 12 months by Provident Trust of the premium cost of COBRA
continuation coverage for him and any spouse and dependents who are eligible for
COBRA continuation coverage, and (ii) any remaining equity awards granted under
paragraph 5 or 6 hereof that have not yet become vested, exercisable or
unrestricted (as applicable) as of the date of such termination shall become
vested, exercisable or unrestricted (as applicable). The foregoing severance
benefits shall be in lieu of any other severance payment or arrangement under
any Provident Trust plan, policy or practice. If it shall be determined that any
payment or benefit provided to the Executive would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code, then the Executive shall
receive a "Tax Gross-Up Payment." A Tax Gross-Up Payment means an amount payable
to the Executive such that, after payment of any excise tax and any income taxes
on such gross-up amount, there remains a balance sufficient to pay the excise
tax being reimbursed.
(d) Continuing Obligations. The termination of this Agreement
shall not affect any of the Executive's post-employment obligations that may
arise under paragraph 11 below.
11. Noncompete, Nonsolicitation, Developments, Nondisparagement and
Confidentiality. In consideration for the compensation and benefits provided
pursuant to this Agreement, the Executive agrees:
(a) While the Executive is an employee of Provident Trust and
for a period of one year after his employment by Provident Trust terminates, the
Executive will not (as an individual, principal, agent, employee, consultant or
otherwise) for any reason without Provident Trust's prior written consent,
directly or indirectly in any territory in which Provident Trust and/or any of
its affiliates does business and/or markets its products and services, engage in
activities competitive with, nor render services to any firm or business engaged
or about to become engaged in competition with, the business of Provident Trust,
which includes, but is not limited to, the ownership, operation, management,
leasing or financing of independent senior living, assisted senior living or
skilled nursing facilities located in the United States and any other business
in which Provident Trust and/or its any of its affiliates is then engaged
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(hereinafter collectively, the "Business of Provident Trust"). In addition, the
Executive agrees not to have an equity interest in any such firm or business
other than as a less than 5% shareholder of a public corporation.
(b) During the Executive's employment with Provident Trust and
for a period of two years following the termination of his employment with
Provident Trust, he will not, directly or indirectly, (i) solicit or contact any
customer or targeted potential customer of Provident Trust and/or any of its
affiliates for the purpose of offering products or services that, directly or
indirectly, compete or interfere with the Business of Provident Trust and/or its
any of its affiliates, (ii) induce or attempt to induce, any employees, agents
or other consultants of Provident Trust and/or its any of its affiliates to do
anything from which the Executive is restricted by reason of this Agreement,
(iii) offer or aid others to offer employment to any employees, agents, or other
consultants of Provident Trust and/or its any of its affiliates, or (iv) provide
services to any customer or otherwise interfere with or disrupt any contractual
or potential contractual relationship between any customer and Provident Trust
and/or any of its affiliates.
(c) The Executive and Provident Trust agree that, during the
Employment Period and following the termination of the Employment Period,
neither party will disparage the other, including Provident Trust's affiliates,
products, customers, clients, officers, employees, former employees,
representatives and agents, in any way whatsoever.
(d) All data, concepts, ideas, designs, findings, discoveries,
inventions, improvements, advances, methods, formulas, plans, programs (computer
or otherwise), practices, techniques, developments and relationships with
customers and prospective customers relating in any way to the present and/or
contemplated products, services, or business of Provident Trust (collectively
"Developments") that the Executive may conceive, make, invent or suggest during
or as a result of his employment by Provident Trust, whether acting alone or in
conjunction with others, shall be the sole and absolute property of Provident
Trust free of any rights of any kind on the part of the Executive. The Executive
shall promptly make full disclosure of all Developments to Provident Trust. The
Executive agrees to do all acts and things (including, among others, the
execution and delivery of patent and copyright applications and instruments of
assignment) deemed by Provident Trust to be necessary or desirable at any time
in order to effect the full assignment to Provident Trust of his rights, if any,
to such Developments.
(e) The Executive recognizes that, in connection with his
employment by Provident Trust, he may learn of, and/or it may be desirable or
necessary for Provident Trust to disclose to him confidential information
("Confidential Information"). The Executive understands that Confidential
Information is valuable and propriety to Provident Trust (or to third parties
that have entrusted the Confidential Information to Provident Trust). The
Executive agrees that, except as required by his employment with Provident
Trust, he will not at any time, directly or indirectly, use, publish,
communicate, describe, disseminate, or otherwise disclose Confidential
Information to any person or entity without the express prior written consent of
Provident Trust. The term Confidential Information shall include, but shall not
be limited to: (i) customer lists, property lists, lists of potential customers
or properties and details of agreements with customers or regarding properties;
(ii) acquisition, expansion, marketing, financial and other
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business information and plans of Provident Trust; (iii) research and
development; (iv) data compiled by Provident Trust; (v) computer programs; (vi)
sources of supply; (vii) identity of specialized consultants and contractors and
Confidential Information developed by them for Provident Trust; (viii)
purchasing, operating and other cost data; (ix) special customer needs, cost and
pricing data; (x) employee information (including, but not limited to,
personnel, payroll, compensation and benefit data and plans); and (xi) patient
records and data, including all such information recorded in manuals, memoranda,
projections, minutes, plans, drawings, designs, formula books, specifications,
computer programs and records, whether or not legended or otherwise identified
by Provident Trust as Confidential Information, as well as such information that
is the subject of meetings and discussions and not recorded. Confidential
Information shall not include such information that is generally available to
the public (other than as a result of a disclosure by the Executive) or that is
disclosed to the Executive by a third party under no obligation to keep such
information confidential.
(e) Upon the termination of the Executive's employment with
Provident Trust or upon Provident Trust's request, whichever is sooner, the
Executive shall immediately deliver to Provident Trust all plans, designs,
listings, manuals, records, notebooks, and similar repositories of or containing
Confidential Information or other documents and data relating to Provident
Trust's products, services, or business then in the Executive's possession or
control or available from other persons receiving such documents from the
Executive, whether prepared by the Executive or others. The Executive shall not
retain any copies or abstracts of any such documents. Upon the termination of
the Executive's employment with Provident Trust, the Executive shall immediately
deliver to Provident Trust all Provident Trust property in his possession or
control including, but not limited to, computer(s) and office equipment.
(f) Any substantial or material breach by the Executive of any
of the post-employment obligations set forth in this paragraph 11 shall
terminate any further post-employment obligations that Provident Trust may have
relative to providing post-employment compensation or benefits to the Executive
and shall result in the immediate expiration of any outstanding options, rights
and other awards, vested or unvested.
12. Applicable Law. Any question as to the scope, interpretation and
effect of this Agreement will be resolved under the substantive and procedural
laws of the State of New York and the United States.
13. Enforceability. All provisions and portions of this Agreement are
severable. If any provision or portion of this Agreement or the application of
any provision or portion of the Agreement shall be determined to be invalid or
unenforceable to any extent or for any reason, all other provisions and portions
of this Agreement shall remain in full force and effect and shall continue to be
enforceable to the fullest and greatest extent permitted by law.
14. No Representations. The Executive agrees that no promises, other
than the promises in this Agreement, have been made to him by or on behalf of
Provident Trust. He agrees that in executing this Agreement he is not relying
upon any statement or representation, other than those set forth herein, made by
or on behalf of Provident Trust concerning his employment by Provident Trust.
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15. Successors.
(a) This Agreement is personal to the Executive and without
the prior written consent of Provident Trust shall not be assignable by the
Executive. 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 Provident Trust and its successors and assigns.
(c) Provident Trust shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of Provident Trust to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that Provident Trust would be required to perform it if no such
succession had taken place.
16. Contingencies. This Agreement is contingent upon the successful
(i.e., satisfactory to Provident Trust) completion of both a pre-employment drug
screen and a background check of the Executive prior to the Effective Date.
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IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the Effective Date.
PROVIDENT SENIOR LIVING TRUST
By: /s/ Xxxxxxx X. Post
----------------------------
EXECUTIVE
/s/ Xxxxxx X. Xxxxxxxx, Xx.
--------------------------------
Xxxxxx X. Xxxxxxxx, Xx.
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ATTACHMENT A
SUMMARY OF PROVIDENT OP GRANT TERMS
Number of LTIP Units: 110,000
Purchase Price Per Unit: $0.25
Vesting: 1/3 of Units upon each of first three anniversaries of the Effective
Date, provided that the Executive remains in continuous service through such
anniversary
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ATTACHMENT B
A "Change in Control" shall mean the occurrence during the
Employment Period, but after the completion of the Private Offering, of any one
of the following events:
(a) An acquisition (other than directly from Provident Trust)
of any Common Shares or other voting securities of Provident Trust by any
"Person" (for purposes of this Section only, as the term "person" is used for
purposes of Section 13(d) or 14(d) of the Exchange Act), immediately after which
such Person has "Beneficial Ownership" (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of twenty percent (20%) or more of either
(i) the then outstanding Common Shares or (ii) the combined voting power of
Provident Trust's then outstanding voting securities entitled to vote for the
election of trustees or directors (the "Voting Securities"); provided, however,
in determining whether a Change in Control has occurred, Common Shares or Voting
Securities which are acquired in a "Non-Control Acquisition" (as hereinafter
defined) shall not constitute an acquisition which would cause a Change in
Control. A "Non-Control Acquisition" shall mean an acquisition by (i) an
employee benefit plan (or a trust forming a part thereof) maintained by (A)
Provident Trust or (B) any corporation or other Person of which a majority of
its voting power or its voting equity securities or equity interest is owned,
directly or indirectly, by Provident Trust (for purposes of this definition, a
"Related Entity"), (ii) Provident Trust or any Related Entity, or (iii) any
Person in connection with a "Non-Control Transaction" (as hereinafter defined);
or
(b) The individuals who, on the Effective Date, are members of
the Board of Trustees of Provident Trust (the "Incumbent Board"), (i) cease for
any reason to constitute at least a majority of the members of the Board of
Trustees of Provident Trust, or (ii) following a Merger (as hereinafter
defined), do not constitute at least a majority of the Board of Trustees of (x)
the Surviving Corporation (as hereinafter defined), if fifty percent (50%) or
more of the combined voting power of the then outstanding voting securities of
the Surviving Corporation is not Beneficially Owned, directly or indirectly by a
Parent Corporation, or (y) if there is one or more Parent Corporations, the
ultimate Parent Corporation (as hereinafter defined); provided, however, that if
the election, or nomination for election by Provident Trust's common
shareholders, of any new director was approved by a vote of at least a majority
of the Incumbent Board, such new director shall, for purposes of this Plan, be
considered as a member of the Incumbent Board; provided, further, however, that
no individual shall be considered a member of the Incumbent Board if such
individual initially assumed office as a result of an actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board of Trustees of Provident Trust (a "Proxy Contest"), including by reason of
any agreement intended to avoid or settle any Proxy Contest; or
(c) The consummation of:
(i) A merger, consolidation or reorganization with or
into Provident Trust or a direct or indirect subsidiary of Provident Trust or in
which securities of Provident Trust are issued (a "Merger"), unless the Merger
is a "Non-Control Transaction." A "Non-Control Transaction" shall mean:
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(A) the shareholders of Provident Trust
immediately before such Merger own directly or indirectly immediately following
the Merger at least fifty percent (50%) of the outstanding common shares and the
combined voting power of the outstanding voting securities of (x) the
corporation resulting from such Merger (the "Surviving Corporation"), if fifty
percent (50%) or more of the combined voting power of the then outstanding
voting securities of the Surviving Corporation is not Beneficially Owned,
directly or indirectly by another corporation (a "Parent Corporation"), or (y)
if there is one or more Parent Corporations, the ultimate Parent Corporation;
(B) the individuals who were members of the
Incumbent Board immediately prior to the execution of the agreement providing
for the Merger, constitute at least a majority of the members of the Board of
Trustees of, (x) the Surviving Corporation, if fifty percent (50%) or more of
the combined voting power of the then outstanding voting securities of the
Surviving Corporation is not Beneficially Owned, directly or indirectly by a
Parent Corporation, or (y) if there is one or more Parent Corporations, the
ultimate Parent Corporation; and
(C) no Person other than (1) Provident Trust
or another corporation that is a party to the agreement of Merger, (2) any
Related Entity, or (3) any employee benefit plan (or any trust forming a part
thereof) that, immediately prior to the Merger, was maintained by Provident
Trust or any Related Entity, or (4) any Person who, immediately prior to the
Merger had Beneficial Ownership of twenty percent (20%) or more of the then
outstanding Common Shares or Voting Securities, has Beneficial Ownership,
directly or indirectly, of twenty percent (20%) or more of the combined voting
power of the outstanding voting securities or common shares of (x) the Surviving
Corporation, if fifty percent (50%) or more of the combined voting power of the
then outstanding voting securities of the Surviving Corporation is not
Beneficially Owned, directly or indirectly by a Parent Corporation, or (y) if
there is one or more Parent Corporations, the ultimate Parent Corporation.
(ii) A complete liquidation or dissolution of
Provident Trust; or
(iii) The sale or other disposition of all or
substantially all of the assets of Provident Trust and its subsidiaries taken as
a whole to any Person (other than a transfer to a Related Entity or under
conditions that would constitute a Non-Control Transaction with the disposition
of assets being regarded as a Merger for this purpose or the distribution to
Provident Trust's shareholders of the stock of a Related Entity or any other
assets).
Notwithstanding the foregoing, a Change in Control shall not be deemed
to occur solely because any Person (the "Subject Person") acquired Beneficial
Ownership of more than the permitted amount of the then outstanding Common
Shares or Voting Securities as a result of the acquisition of Common Shares or
Voting Securities by Provident Trust which, by reducing the number of Common
Shares or Voting Securities then outstanding, increases the proportional number
of shares Beneficially Owned by the Subject Persons; provided, that if a Change
in Control would occur (but for the operation of this sentence) as a result of
the acquisition of Common Shares or Voting Securities by Provident Trust, and
after such share acquisition by
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Provident Trust, the Subject Person becomes the Beneficial Owner of any
additional Common Shares or Voting Securities which increases the percentage of
the then outstanding Common Shares or Voting Securities Beneficially Owned by
the Subject Person, then a Change in Control shall occur.
Notwithstanding the foregoing, there shall not be a Change in Control
if, in advance of such event, the Executive agrees in writing that such event
shall not constitute a Change in Control.
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