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EXHIBIT 10u
CONTINUITY AGREEMENT
This Agreement (the "Agreement") is dated as of December 27,
1999 by and between XXXXXXX INCORPORATED, a Connecticut corporation (the
"Company"), and XXXXXXX X. XXXXXX (the "Executive").
WHEREAS, the Company's Board of Directors considers the
continued services of key executives of the Company to be in the best interests
of the Company and its stockholders; and
WHEREAS, the Company's Board of Directors desires to assure,
and has determined that it is appropriate and in the best interests of the
Company and its stockholders to reinforce and encourage the continued attention
and dedication of key executives of the Company to their duties of employment
without personal distraction or conflict of interest in circumstances which
could arise from the occurrence of a change in control of the Company; and
WHEREAS, the Company's Board of Directors has authorized the
Company to enter into continuity agreements with those key executives of the
Company and any of its respective subsidiaries (all of such entities, with the
Company hereinafter referred to as an "Employer"), such agreements to set forth
the severance compensation which the Company agrees under certain circumstances
to pay such executives; and
WHEREAS, the Executive is a key executive of an Employer and
has been designated by the Board as an executive to be offered such a continuity
compensation agreement with the Company.
NOW, THEREFORE, in consideration of the premises and the
mutual covenants and agreements contained herein and other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and the Executive agree as follows:
1. Term. This Agreement shall become effective on the
date hereof and remain in effect until the second anniversary thereof; provided,
however, that, thereafter, this Agreement shall automatically renew on each
successive anniversary, unless an Employer provides the Executive, in writing,
at least 180 days prior to the renewal date, notice that this Agreement shall
not be renewed. Notwithstanding the foregoing, in the event that a Change in
Control occurs at any time prior to the termination of this Agreement in
accordance with the preceding sentence, this Agreement shall not terminate until
the second anniversary of the Change in Control (or, if later, until the second
anniversary of the consummation of the transaction(s) contemplated in the Change
in Control).
2. Change in Control.
(a) No compensation or other benefit pursuant to Section
4 hereof shall be payable under this Agreement unless and until either (i) a
Change in Control of the Company (as hereinafter defined) shall have occurred
while the Executive is an employee of an Employer and the Executive's employment
by an Employer thereafter shall have terminated in accordance with
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Section 3 hereof or (ii) the Executive's employment by the Company shall have
terminated in accordance with Section 3(a)(ii) hereof prior to the occurrence of
the Change in Control.
(b) For purposes of this Agreement:
(i) "Change in Control" shall mean any one of the
following:
(A) Continuing Directors no longer constitute at least
2/3 of the Directors;
(B) any person or group of persons (as defined in Rule
13d-5 under the Securities Exchange Act of 1934),
together with its affiliates, becomes the beneficial
owner, directly or indirectly, of twenty (20%)
percent or more of the voting power of the then
outstanding securities of the Company entitled to
vote for the election of the Company's directors;
provided that this Section 2 shall not apply with
respect to any holding of securities by (I) the trust
under a Trust Indenture dated September 2, 1957 made
by Xxxxx X. Xxxxx, (II) the trust under a Trust
Indenture dated August 23, 1957 made by Xxxxxx
Xxxxxxx, and (III) any employee benefit plan (within
the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended)
maintained by the Company or any affiliate of the
Company;
(C) 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, the incumbent Directors in
office immediately prior to such merger or
consolidation will constitute at least 2/3 of the
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
(D) at least 2/3 of the incumbent Directors in office
immediately prior to any other action proposed to be
taken by the Company's stockholders determine that
such proposed action, if taken, would constitute a
change of control of the Company and such action is
taken.
(ii) "Continuing Director" shall mean any individual who
is a member of the Company's Board of Directors on
December 9, 1986 or was designated (before such
person's initial election as a Director) as a
Continuing Director by 2/3 of the then Continuing
Directors.
(iii) "Director" shall mean any individual who is a member
of the Company's Board of Directors on the date the
action in question was taken.
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(iv) "Change in Control Transaction" shall mean a Change
in Control or, if later, the consummation of the
transaction contemplated by the Change in Control.
3. Termination of Employment; Definitions.
(a) Termination without Cause by the Company or for Good
Reason by the Executive. (i) The Executive shall be entitled to the
compensation provided for in Section 4 hereof, if within two years
after a Change in Control Transaction, the Executive's employment shall
be terminated (A) by an Employer for any reason other than (I) the
Executive's Disability or Retirement, (II) the Executive's death or
(III) for Cause, or (B) by the Executive with Good Reason (as such
terms are defined herein).
(ii) In addition, the Executive shall be entitled to the
compensation provided for in Section 4 hereof if, (A) in the event that
an agreement is signed which, if consummated, would result in a Change
of Control and the Executive is terminated without Cause by the Company
or terminates employment with Good Reason prior to the Change in
Control, (B) such termination is at the direction of the acquiror or
merger partner or otherwise in connection with the anticipated Change
in Control, and (C) such Change in Control actually occurs.
(b) Disability. For purposes of this Agreement,
"Disability" shall mean the Executive's absence from the full-time performance
of the Executive's duties (as such duties existed immediately prior to such
absence) for 180 consecutive business days, when the Executive is disabled as a
result of incapacity due to physical or mental illness.
(c) Retirement. For purposes of this Agreement,
"Retirement" shall mean the Executive's voluntary termination of employment
pursuant to late, normal or early retirement under a pension plan sponsored by
an Employer, as defined in such plan, but only if such retirement occurs prior
to a termination by an Employer without Cause or by the Executive for Good
Reason.
(d) Cause. For purposes of this Agreement, "Cause" shall
mean:
(i) the willful and continued failure of the
Executive to perform substantially all of his or her duties
with an Employer (other than any such failure resulting from
incapacity due to physical or mental illness), after a written
demand for substantial performance is delivered to such
Executive by the Board of Directors (the "Board") of the
Company which specifically identifies the manner in which the
Board believes that the Executive has not substantially
performed his or her duties,
(ii) the willful engaging by the Executive in
gross misconduct which is materially and demonstrably
injurious to the Company or any Employer; or
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(iii) the conviction of, or plea of guilty or nolo
contendere to, a felony.
Termination of the Executive for Cause shall be made by delivery to the
Executive of a copy of a resolution duly adopted by the affirmative vote of not
less than a three-fourths majority of the non-employee Directors of the Company
or of the ultimate parent of the entity which caused the Change in Control (if
the Company has become a subsidiary) at a meeting of such Directors called and
held for such purpose, after 30 days' prior written notice to the Executive
specifying the basis for such termination and the particulars thereof and a
reasonable opportunity for the Executive to cure or otherwise resolve the
behavior in question prior to such meeting, finding that in the reasonable
judgment of such Directors, the conduct or event set forth in any of clauses (i)
through (iii) above has occurred and that such occurrence warrants the
Executive's termination.
(e) Good Reason. For purposes of this Agreement, "Good
Reason" shall mean the occurrence, within the Term of this Agreement, of any of
the following without the Executive's express written consent:
(i) after a Change of Control, any reduction in the
Executive's base salary from that which was in effect immediately prior
to the Change of Control, any reduction in the Executive's annual cash
bonus below such bonus paid or payable in respect of the calendar year
immediately prior to the year in which the Change of Control occurs, or
any reduction in the Executive's aggregate annual cash compensation
(including base salary and bonus) from that which was in effect
immediately prior to the Change of Control; or
(ii) after a Change of Control, the failure to increase
(within 12 months of the last increase in base salary) the Executive's
salary in an amount which at least equals, on a percentage basis, the
average percentage of increase in base salary effected in the preceding
12 months (which period may include some period of time prior to the
Change of Control) for all senior executives of the Company (unless
such reduction is offset by an increase in the amount of annual cash
bonus that is paid to the Executive); or
(iii) any material and adverse diminution in the Executives'
duties, responsibilities, status, position or authority with the
Company or any of its affiliates following a Change of Control;
provided, however, that no such diminution shall be deemed to exist
solely because of changes in Executive's duties, responsibilities or
titles as a consequence of the Company ceasing to be a company with
publicly-traded securities or becoming a wholly-owned subsidiary of
another company; or
(iv) any relocation of the Executive's primary workplace to a
location that is more than 35 miles from the Executive's primary
workplace as of the date of this Agreement or the Company's requiring
the Executive to be based anywhere other than the location at which the
Executive performed his duties prior to the commencement of the Term;
or
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(v) any failure by the Company to obtain from any successor to
the Company an agreement reasonably satisfactory to the Executive to
assume and perform this Agreement, as contemplated by Section 10(a)
hereof; and
(vii) during the thirty-day period immediately following the
first anniversary of the Change in Control Transaction, the voluntary
termination of employment by the Executive for any reason or no reason
at all.
Notwithstanding the foregoing, in the event Executive provides the Company with
a Notice of Termination (as defined below) referencing this Section 3(e) (with
the exception of Section 3(e)(vii)), the Company shall have 30 days thereafter
in which to cure or resolve the behavior otherwise constituting Good Reason. Any
good faith determination by Executive that Good Reason exists shall be presumed
correct and shall be binding upon the Company.
(f) Notice of Termination. Any purported termination of
the Executive's employment (other than on account of Executive's death) with an
Employer shall be communicated by a Notice of Termination to the Executive, if
such termination is by an Employer, or to an Employer, if such termination is by
the Executive. For purposes of this Agreement, "Notice of Termination" shall
mean a written notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the Executive's
employment under the provisions so indicated; provided, however, that in
connection with a termination for Good Reason under Section 3(e)(vii), no
details shall be necessary other than reference to such Section. For purposes of
this Agreement, no purported termination of Executive's employment with an
Employer shall be effective without such a Notice of Termination having been
given.
4. Compensation Upon Termination.
Subject to Section 9 hereof, if within two years of a Change
in Control Transaction, the Executive's employment with an Employer shall be
terminated in accordance with Section 3(a) (the "Termination"), the Executive
shall be entitled to the following payments and benefits:
(a) Severance. The Company shall pay or cause to be paid
to the Executive a cash severance amount equal to three times the sum
of (i) the Executive's annual base salary on the date of the Change in
Control (or, if higher, the annual base salary in effect immediately
prior to the giving of the Notice of Termination) and (ii) the highest
of the actual bonuses paid or payable to the Executive under the
Company's annual incentive Compensation plan in any of the three
consecutive fiscal years prior to the year in which the Change in
Control occurs. This cash severance amount shall be payable in a lump
sum calculated without any discount.
(b) Additional Payments and Benefits. The Executive shall
also be entitled to:
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(i) a lump sum cash payment equal to the sum of (A)
the Executive's accrued but unpaid annual base salary through
the date of Termination, (B) the unpaid portion, if any, of
bonuses previously earned by the Executive pursuant to the
Company's annual incentive compensation plan, plus the pro
rata portion of (I) the Bonus or (II) if payable, the target
bonus to be paid for the year in which the date of Termination
occurs, in either case (calculated through the date of
Termination), and (C) an amount, if any, equal to compensation
previously deferred (excluding any qualified plan deferral)
and any accrued vacation pay, in each case, in full
satisfaction of Executive's rights thereto; and
(ii) an annual benefit under the Company's
Supplemental Retirement Plan (the "SERP"), calculated based on
10 years of service, unreduced for early retirement
thereunder; and
(iii) continued medical, dental, vision, and life
insurance coverage (excluding accident, death, and disability
insurance) for the Executive and the Executive's eligible
dependents or, to the extent such coverage is not commercially
available, such other arrangements reasonably acceptable to
the Executive, on the same basis as in effect prior to the
Change in Control or the Executive's Termination, whichever is
deemed to provide for more substantial benefits, for a period
ending on the third anniversary of the date of the Executive's
Termination (the "Continuation Period"); thereafter, the
Executive and the Executive's eligible dependents shall
receive continued medical, dental, vision, and life insurance
coverage (excluding accident, death, and disability insurance)
pursuant to the terms of the Company's Key Man Supplemental
Medical Plan, on the same basis as in effect prior to the
Change in Control or the Executive's Termination, whichever is
deemed to provide for more substantial benefits; and
(iv) during the Continuation Period, continuation of
the Executive's perquisites, including the provision of an
automobile and payment of all related expenses (including
maintenance, other than gas), annual social and/or health club
dues, and tax and financial planning services, as in effect
immediately prior to the Change of Control; and
(v) all other accrued or vested benefits in
accordance with the terms of the applicable plan (with an
offset for any amounts paid under Section 4(b)(i)(C), above).
All lump sum payments under this Section 4 shall be paid
within 10 business days after Executive's date of Termination;
provided, however, that with respect to the SERP benefit set
forth in Section 4(b)(ii), above, unless the Executive, during
the ten day period after the Company signs any agreement that
would, upon the consummation of the transactions contemplated
therein, result in a Change of Control, elects to receive a
lump sum payment equal to the present value of his SERP
benefit (as calculated in Section 4(b)(ii) and otherwise in
accordance with
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Exhibit A, as attached hereto), the Executive
shall be entitled to receive the SERP benefit in installment
payments (payable in accordance with the terms of the SERP),
beginning upon the later to occur of (i) the date on which
which the Executive achieves age 55 and (ii) the date on
which Executive's employment terminates in accordance
with the terms hereunder.
(c) Outplacement. If so requested by the Executive,
outplacement services shall be provided by a professional outplacement
provider selected by Executive; provided, however, that such
outplacement services shall be provided the Executive at a cost to the
Company of not more than fifteen (15) percent of such Executive's
annual base salary.
(d) Withholding. Payments and benefits provided pursuant
to this Section 4 shall be subject to any applicable payroll and other
taxes required to be withheld.
5. Compensation Upon Termination for Death, Disability
or Retirement.
If an Executive's employment is terminated by reason of Death,
Disability or Retirement prior to any other termination, Executive will receive:
(a) the sum of (i) Executive's accrued but unpaid salary
through the date of Termination, (ii) the pro rata portion of the
Executive's target bonus for the year of Executive's Death or
Disability (calculated through the date of Termination), and (iii) an
amount equal to any compensation previously deferred and any accrued
vacation pay; and
(b) other accrued or vested benefits in accordance with
the terms of the applicable plan (with an offset for any amounts paid
under item (a)(iii), above.
6. Excess Parachute Excise Tax Payments.
(a) (i) If it is determined (as hereafter provided) that any
payment or distribution by the Company or any Employer 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 pursuant to or by reason of any
other agreement, policy, plan, program or arrangement, including without
limitation any stock option, stock appreciation right or similar right, or the
lapse or termination of any restriction on or the vesting or exercisability of
any of the foregoing (a "Payment"), would be subject to the excise tax imposed
by Section 4999 of the Code (or any successor provision thereto) by reason of
being "contingent on a change in ownership or control" of the Company, within
the meaning of Section 280G of the Code (or any successor provision thereto) or
to any similar tax imposed by state or local law, or any interest or penalties
with respect to such excise tax (such tax or taxes, together with any such
interest and penalties, are hereafter collectively referred to as the "Excise
Tax"), then the Executive shall be entitled to receive an additional payment or
payments (a "Gross-Up Payment") in an amount such that, after payment by the
Executive of all taxes (including any interest or penalties imposed with respect
to such taxes), including any Excise Tax, imposed upon the Gross-Up Payment, the
Executive retains an amount
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of the Gross-Up Payment equal to the Excise Tax imposed upon the Payments;
provided, however, if the Executive's Payment is, when calculated on a
net-after-tax basis, less than $50,000 in excess of the amount of the Payment
which could be paid to the Executive under Section 280G of the Code without
causing the imposition of the Excise Tax, then the Payment shall be limited to
the largest amount payable (as described above) without resulting in the
imposition of any Excise Tax (such amount, the "Capped Amount").
(ii) Subject to the provisions of Section 6(a)(i) hereof, all
determinations required to be made under this Section 6, including whether an
Excise Tax is payable by the Executive and the amount of such Excise Tax and
whether a Gross-Up Payment is required and the amount of such Gross-Up Payment,
shall be made by the nationally recognized firm of certified public accountants
(the "Accounting Firm") used by the Company prior to the Change in Control (or,
if such Accounting Firm declines to serve, the Accounting Firm shall be a
nationally recognized firm of certified public accountants selected by the
Executive). The Accounting Firm shall be directed by the Company or the
Executive to submit its preliminary determination and detailed supporting
calculations to both the Company and the Executive within 15 calendar days after
the Termination Date, if applicable, and any other such time or times as may be
requested. If the Accounting Firm determines that any Excise Tax is payable by
the Executive and that the criteria for reducing the Payment to the Capped
Amount (as described in Section 6(a)(i) above) is met, then the Company shall
reduce the Payment by the amount which, based on the Accounting Firm's
determination and calculations, would provide the Executive with the Capped
Amount, and pay to the Executive such reduced Payment. If the Accounting Firm
determines that an Excise Tax is payable, without reduction pursuant to Section
6(a)(i), above, the Company shall pay the required Gross-Up Payment to, or for
the benefit of, the Executive within five business days after receipt of such
determination and calculations. If the Accounting Firm determines that no Excise
Tax is payable by the Executive, it shall, at the same time as it makes such
determination, furnish the Executive with an opinion that he has substantial
authority not to report any Excise Tax on his/her federal, state, local income
or other tax return. Any determination by the Accounting Firm as to the amount
of the Gross-Up Payment shall be binding upon the Company and the Executive
absent a contrary determination by the Internal Revenue Services or a court of
competent jurisdiction; provided, however, that no such determination shall
eliminate or reduce the Company's obligation to provide any Gross-Up Payment
that shall be due as a result of such contrary determination. As a result of the
uncertainty in the application of Section 4999 of the Code (or any successor
provision thereto) and the possibility of similar uncertainty regarding state or
local tax law at the time of any determination by the Accounting Firm hereunder,
it is possible that Gross-Up Payments that will not have been made by the
Company should have been made (an "Underpayment"), consistent with the
calculations required to be made hereunder. In the event that the Company
exhausts or fails to pursue its remedies pursuant to Section 6(a) hereof and the
Executive thereafter is required to make a payment of any Excise Tax, the
Executive shall direct the Accounting Firm to determine the amount of the
Underpayment that has occurred and to submit its determination and detailed
supporting calculations to both the Company and the Executive as promptly as
possible. Any such Underpayment shall be promptly paid by the Company to, or for
the benefit of, the Executive within five business days after receipt of such
determination and calculations.
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(iii) The Company and the Executive shall each provide the
Accounting Firm access to and copies of any books, records and documents in the
possession of the Company or the Executive, as the case may be, reasonably
requested by the Accounting Firm, and otherwise cooperate with the Accounting
Firm in connection with the preparation and issuance of the determination
contemplated by Section 6(a) hereof.
(iv) The federal, state and local income or other tax returns
filed by the Executive (or any filing made by a consolidated tax group which
includes the Company) shall be prepared and filed on a consistent basis with the
determination of the Accounting Firm with respect to the Excise Tax payable by
the Executive. The Executive shall make proper payment of the amount of any
Excise Tax, and at the request of the Company, provide to the Company true and
correct copies (with any amendments) of his/her federal income tax return as
filed with the Internal Revenue Service and corresponding state and local tax
returns, if relevant, as filed with the applicable taxing authority, and such
other documents reasonably requested by the Company, evidencing such payment. If
prior to the filing of the Executive's federal income tax return, or
corresponding state or local tax return, if relevant, the Accounting Firm
determines that the amount of the Gross-Up Payment should be reduced, the
Executive shall within five business days pay to the Company the amount of such
reduction.
(v) The fees and expenses of the Accounting Firm for
its services in connection with the determinations and calculations contemplated
by Sections 6(a)(ii) and (iv) hereof shall be borne by the Company. If such fees
and expenses are initially advanced by the Executive, the Company shall
reimburse the Executive the full amount of such fees and expenses within five
business days after receipt from the Executive of a statement therefor and
reasonable evidence of his/her payment thereof.
(b) In the event that the Internal Revenue Service claims
that any payment or benefit received under this Agreement constitutes an "excess
parachute payment," within the meaning of Section 280G(b)(1) of the Code, the
Executive shall notify the Company in writing of such claim. Such notification
shall be given as soon as practicable but no later than 10 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 the Executive 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 and reasonably satisfactory to the Executive; (iii) cooperate with
the Company in good faith in order to effectively 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, but not limited to, additional interest and penalties and
related legal, consulting or other similar fees) incurred in connection with
such contest and
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shall indemnify and hold the Executive harmless, on an after-tax basis, for and
against any Excise Tax or other tax (including interest and penalties with
respect thereto) imposed as a result of such representation and payment of costs
and expenses.
(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 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 other tax
(including interest and penalties with respect thereto) imposed with respect to
such advance or with respect to any imputed income with respect to such advance;
and provided, further, that if the Executive is required to extend the statute
of limitations to enable the Company to contest such claim, the Executive may
limit this extension solely to such contested amount. The Company's control of
the contest shall be limited to issues with respect to which a corporate
deduction would be disallowed pursuant to Section 280G of the Code 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. In
addition, no position may be taken nor any final resolution be agreed to by the
Company without the Executive's consent if such position or resolution could
reasonably be expected to adversely affect the Executive (including any other
tax position of the Executive unrelated to matters covered hereby).
(d) If, after the receipt by the Executive of an amount
advanced by the Company in connection with the contest of the Excise Tax claim,
the Executive becomes entitled to receive any refund with respect to such claim,
the Executive shall promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after taxes applicable
thereto); provided, however, if the amount of that refund exceeds the amount
advanced by the Company or it is otherwise determined for any reason that
additional amounts could be paid to the Named Executive without incurring any
Excise Tax, any such amount will be promptly paid by the Company to the named
Executive. If, after the receipt by the Executive of an amount advanced by the
Company in connection with an Excise Tax claim, 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 the
denial of such refund prior to the expiration of 30 days after such
determination, such advance shall be forgiven and shall not be required to be
repaid and shall be deemed to be in consideration for services rendered after
the date of the Termination.
7. Expenses. In addition to all other amounts payable to
the Executive under this Agreement, the Company shall pay or reimburse the
Executive for legal fees (including without limitation, any and all court costs
and attorneys' fees and expenses) incurred by the Executive in connection with
or as a result of any claim, action or proceeding brought by the
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Company or the Executive with respect to or arising out of this Agreement or any
provision hereof; provided, however, that in the case of an action brought by
the Executive, the Company shall have no obligation for any such legal fees, if
the Company is successful in establishing with the court that the Executive's
action was frivolous or otherwise without any reasonable legal or factual basis.
8. Obligations Absolute; Non-Exclusivity of Rights;
Joint Several Liability.
(a) The obligations of the Company to make the payment to
the Executive, and to make the arrangements, provided for herein shall be
absolute and unconditional and shall not be reduced by any circumstances,
including without limitation any set-off, counterclaim, recoupment, defense or
other right which the Company may have against the Executive or any third party
at any time.
(b) 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 other Employer and for
which the Executive may qualify, nor shall anything herein limit or reduce such
rights as the Executive may have under any agreements with the Company or any
other Employer.
(c) Each entity included in the definition of "Employer"
and any successors or assigns shall be joint and severally liable with the
Company under this Agreement.
9. Not an Employment Agreement; Effect On Other Rights.
(a) This Agreement is not, and nothing herein shall be
deemed to create, a contract of employment between the Executive and the
Company. Any Employer may terminate the employment of the Executive at any time,
subject to the terms of this Agreement and/or any employment agreement or
arrangement between the Employer and the Executive that may then be in effect.
(b) With respect to any employment agreement with the
Executive in effect immediately prior to the Change in Control, nothing herein
shall have any effect on the Executive's rights thereunder; provided, however,
that in the event of the Executive's termination of employment in accordance
with Section 3 hereof, this Agreement shall govern solely for the purpose of
providing the terms of all payments and additional benefits to which the
Executive is entitled upon such termination and any payments or benefit provided
thereunder shall reduce the corresponding type of payments or benefits
hereunder. Notwithstanding the foregoing, in the event that the Executive's
employment is terminated prior to the occurrence of a Change in Control under
the circumstances provided for in Section 3(a)(ii) and such circumstances also
entitle Executive to payments and benefits under any other employment or other
agreement as in effect prior to the Change in Control ("Other Agreement"), then,
until the Change in Control occurs, the Executive will receive the payments and
benefits to which he/she is entitled under such Other Agreement. Upon the
occurrence of the Change in Control, the Company will pay to the Executive in
cash the amount to which he/she is entitled to under this Agreement (reduced by
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the amounts already paid under the Other Agreement) in respect of cash payments
and shall provide or increase any other noncash benefits to those provided for
hereunder (after taking into Account noncash benefits, if any, provided under
such Other Agreement). Amounts which are vested benefits or which the Executive
is otherwise entitled to receive under any plan or program of the Company or any
other Employer shall be payable in accordance with such plan or program, except
as explicitly modified by this Agreement.
(c) With respect to any limited stock appreciation rights
("LSARs") granted to the Executive pursuant to the Company's 1973 Stock Option
Plan for Key Executives held, as of the date of this Agreement, by the
Executive, the Executive hereby agrees to the cancellation of such LSARs in the
event that the Change in Control contemplated hereunder is intended to be, and
is otherwise, eligible for pooling-of-interests accounting treatment under XXX
Xx. 00.
10. Successors; Binding Agreement, Assignment.
(a) The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business of the Company, by agreement to expressly,
absolutely and unconditionally assume and agree to perform this Agreement in the
same manner and to the same extent that the Company would be required to perform
it if no such succession had taken place. Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a material
breach of this Agreement and shall entitle the Executive to terminate the
Executive's employment with the Company or such successor for Good Reason
immediately prior to or at any time after such succession. As used in this
Agreement, "Company" shall mean (i) the Company as hereinbefore defined, and
(ii) any successor to all the stock of the Company or to all or substantially
all of the Company's business or assets which executes and delivers an agreement
provided for in this Section 10(a) or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law, including any parent
or subsidiary of such a successor.
(b) This Agreement shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If the
Executive should die while any amount would be payable to the Executive
hereunder if the Executive had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to the Executive's estate or designated beneficiary. Neither this
Agreement nor any right arising hereunder may be assigned or pledged by the
Executive.
11. Notice. For purpose of this Agreement, notices and
all other communications provided for in this Agreement or contemplated hereby
shall be in writing and shall be deemed to have been duly given when personally
delivered, delivered by a nationally recognized overnight delivery service or
when mailed United States certified or registered mail, return receipt
requested, postage prepaid, and addressed, in the case of the Company, to the
Company at:
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Xxxxxxx Incorporated
000 Xxxxx Xxxxxxx Xxxx
Xxxxxx, Xxxxxxxxxxx 00000-0000
Attention: General Counsel
and in the case of the Executive, to the Executive at the address set forth on
the execution page at the end hereof.
Either party may designate a different address by giving notice of
change of address in the manner provided above, except that notices of change of
address shall be effective only upon receipt.
12. Confidentiality. The Executive shall retain in
confidence any and all confidential information concerning the Company and its
respective business which is now known or hereafter becomes known to the
Executive, except as otherwise required by law and except information (i)
ascertainable or obtained from public information, (ii) received by the
Executive at any time after the Executive's employment by the Company shall have
terminated, from a third party not employed by or otherwise affiliated with the
Company or (iii) which is or becomes known to the public by any means other than
a breach of this Section 12. Upon the Termination of employment, the Executive
will not take or keep any proprietary or confidential information or
documentation belonging to the Company.
13. Miscellaneous. No provision of this Agreement may be
amended, altered, modified, waived or discharged unless such amendment,
alteration, modification, waiver or discharge is agreed to in writing signed by
the Executive and such officer of the Company as shall be specifically
designated by the Committee or by the Board of Directors of the Company. No
waiver by either party, at any time, of any breach by the other party of, or of
compliance by the other party with, any condition or provision of this Agreement
to be performed or complied with by such other party shall be deemed a waiver of
any similar or dissimilar provision or condition of this Agreement or any other
breach of or failure to comply with the same condition or provision at the same
time or at any prior or subsequent time. No agreements or representations, oral
or otherwise, express or implied, with respect to the subject matter hereof have
been made by either party which are not expressly set forth in this Agreement.
14. Severability. If any one or more of the provisions of
this Agreement shall be held to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remaining provisions of this
Agreement shall not be affected thereby. To the extent permitted by applicable
law, each party hereto waives any provision of law which renders any provision
of this Agreement invalid, illegal or unenforceable in any respect.
15. Governing Law; Venue. The validity, interpretation,
construction and performance of this Agreement shall be governed on a
non-exclusive basis by the laws of the State of Connecticut without giving
effect to its conflict of laws rules. For purposes of jurisdiction and venue,
the Company and each Employer hereby consents to jurisdiction and venue in any
suit, action or proceeding with respect to this Agreement in any court of
competent
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jurisdiction in the state in which Executive resides at the commencement of such
suit, action or proceeding and waives any objection, challenge or dispute as to
such jurisdiction or venue being proper.
16. Counterparts. This Agreement may be executed in two
or more counterparts, each of which shall be an original and all of which shall
be deemed to constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first above written.
XXXXXXX INCORPORATED
By:
--------------------------------
Title:
--------------------------------
-----------------------------------
Executive
-----------------------------------
-----------------------------------
Address
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EXHIBIT A
ASSUMPTIONS
The assumptions to be used are those specified under Section 417(e) of the
Internal Revenue Code of 186, as amended, which assumptions are the minimum lump
sum factors permitted to be used for calculating pension benefits under
qualified defined benefit plans.
Benefit: Lump sum payment of unreduced benefit deferred to age 55,
increased to reflect the 50% joint and survivor form.
Mortality Rates: The 1983 Group Annuity Mortality (1983 GAM) blend of 50% male
and 50% female rates.
Interest Rate: 10-year treasury rate on the first day of the fourth quarter
of the calendar year immediately prior to the date on which
the Executive retires or otherwise separates from Service.
Other: 3% annual Social Security wage base increase.
2.5% annual CPI increase.
5% annual salary increase.
Qualified Plan
Offset: Amount actually payable at age 55 (or, if higher, the
participants actual age as of the date of termination of
employment).
