EXECUTIVE AGREEMENT
AGREEMENT dated _________________, 19__ , between Xxxxxxx
Corporation, a Delaware corporation ("Corporation") and
_________________ ("Executive").
WHEREAS, the Executive has been employed by the Corporation
and/or one or more of its subsidiaries (collectively the
"Corporation"), and is currently serving in an executive capacity
with respect to the Corporation, a division or subsidiary
thereof; and
WHEREAS, in order to induce the Executive to remain in the
employ of the Corporation following a change in control thereof,
the Corporation is willing to agree to continue to employ the
Executive during the periods specified herein immediately
following the occurrence of such event or events, all on the
terms and subject to the conditions hereinafter set forth; and
WHEREAS, in consideration thereof, the Executive is willing
to agree to continue to serve the Corporation in an executive
capacity during such specified periods on the terms and
conditions hereinafter set forth.
NOW THEREFORE, the parties hereto agree as follows:
1. TERM. This Agreement replaces and supersedes any
employment contract or executive agreement previously entered
into between the Executive and the Corporation, and it shall
commence on the date hereof and continue in effect indefinitely.
2. CHANGE IN CONTROL. For purposes of this Agreement, a
"Change in Control" shall mean a change in control of the
Corporation of a nature that would be required to be reported in
response to Item 5(f) of Schedule 14A of Regulation 14A or to
Item 1 of Form 8-K promulgated under the Securities Exchange Act of
1934, as amended, provided that, without limitation, a Change in Control
shall be deemed to have occurred if (i) any "person" (as such
term is used in Sections 13(d) and 14(d)(2) of such Act) is or
becomes the beneficial owner, directly or indirectly, of
securities of the Corporation representing 30% or more of the
combined voting power of the Corporation's then outstanding
securities; or (ii) during any period of twenty-four (24)
consecutive months, individuals who at the beginning of such
period constitute the Board of Directors of the Corporation cease
for any reason to constitute at least a majority thereof unless
the election, or the nomination for election by the Corporation's
shareholders, of each new director was approved by a vote of at
least two-thirds of the directors then still in office who were
directors at the beginning of the period.
3. TERMINATION FOLLOWING CHANGE IN CONTROL.
3.1 The Executive shall be entitled to the severance
benefits provided in Article 4 if the Date of Termination of his
employment occurs under any of the following circumstances: (i)
during the 60 day period commencing on the first anniversary of a
Change in Control, the Executive elects to terminate his
employment for any reason, or (ii) if the Corporation terminates
the Executive's employment while there is, to the Corporation's
knowledge, actively pending a proposed transaction, whether
favored or opposed by the Corporation, which results in a Change
in Control within one year of the Executive's Date of
Termination, or (iii) the Executive's employment terminates
within two years following a Change in Control; unless in the
case of either (ii) or (iii) his employment is terminated
(x) because of death or Disability, (y) by the Corporation for
Cause, or (z) by the Executive other than for Good Reason.
3.2 Disability.
If, as a result of the incapacity of Executive due to
physical or mental illness, including such incapacity due to
drugs or alcohol, he is absent from his duties with the
Corporation on a full-time basis for six (6) consecutive months,
the Corporation may terminate his employment for "Disability."
3.3 Cause. The Corporation may terminate the Executive's
employment for Cause. "Cause" shall mean (i) the willful and
continued refusal by the Executive substantially to perform his
duties with the Corporation (other than any such refusal
resulting from his incapacity due to physical or mental illness),
after a demand for substantial performance is delivered to him by
the Board which specifically identifies the manner in which the
Board believes that he has refused substantially to perform his
duties, or (ii) the willful engaging by the Executive in gross
misconduct materially and demonstrably injurious to the
Corporation. For purposes of this section, no act or failure to
act on the Executive's part shall be considered "willful" unless
done, or omitted to be done, by him not in good faith and without
reasonable belief that his action or omission was in the best
interest of the Corporation. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for Cause
unless and until there shall have been delivered to him a copy of
a resolution duly adopted by the affirmative vote of not less
than three-quarters of the entire membership of the Board of the
Corporation at a meeting of the Board called and held for the
purpose (after reasonable notice to the Executive and an
opportunity for him, together with his counsel, to be heard from
the Board), finding that in the good faith opinion of the Board
he was guilty of conduct set forth above in clauses (i) or (ii)
of the first sentence of this section and specifying the
particulars thereof in detail.
3.4 Good Reason. The Executive may voluntarily terminate
his employment for Good Reason. "Good Reason" shall mean:
(a) Without the Executive's express written consent,
the assignment to him during either of the periods specified in
Section 3.1 (ii) or 3.1(iii) of any duties inconsistent with his
positions, duties, responsibilities and status with the
Corporation immediately prior to commencement to the
Corporation's knowledge of active pendency of a proposed
transaction, whether favored or opposed by the Corporation, which
results in the Change in Control, or a change in his reporting
responsibilities, titles or offices as in effect immediately
prior to such commencement, or any removal of him from or any
failure to re-elect him to any of such positions, except in
connection with the termination of his employment for Cause,
Disability or Retirement or as a result of his death or by the
Executive other than for Good Reason. For purpose of this
Agreement, the Executive's removal from a position of inside
director of the Corporation shall not be considered Good Reason;
(b) A reduction during either of the periods specified
in Section 3.1(ii) or 3.1(iii) by the Corporation in the
Executive's base salary as in effect immediately prior to
commencement to the Corporation's knowledge of active pendency of
a proposed transaction, whether favored or opposed by the
Corporation, which results in the Change in Control, or the
failure by the Corporation to increase such base salary each year
after such Change in Control by an amount which at least equals,
on a percentage basis, the average annual percentage increase in
base salary for all officers of the Corporation during the two
(2) full calendar years immediately prior to such commencement;
(c) A failure during either of the periods specified
in Section 3.1(ii) or 3.1(iii) by the Corporation to continue its
Incentive Compensation Plan as it is in effect immediately prior
to commencement to the Corporation's knowledge of active pendency
of a proposed transaction, whether favored or opposed by the
Corporation, which results in the Change in Control, or to
continue the Executive as a participant in the Plan on at least
as favorable a basis to him as immediately prior to such commencement;
(d) The relocation during either of the periods
specified in Section 3.1(ii) or 3.1(iii) of the principal
executive offices of the Corporation, or of the division or
subsidiary the Executive serves, as the case may be, to a
location outside the Greater Rochester area, or such other area
in which such division or subsidiary executive office is located,
or the Corporation's requiring him to be based anywhere other
than at such principal executive offices except for required
travel on the Corporation's business travel obligations
comparable to that during the three (3) months immediately prior
to commencement to the Corporation's knowledge of active pendency
of a proposed transaction, whether favored or opposed by the
Corporation, which results in the Change in Control;
(e) The failure during either of the periods specified
in Section 3.1(ii) or 3.1(iii) by the Corporation to continue in
effect the same or a comparable fringe benefit or compensation
plan, retirement plan, life insurance plan, health and accident
plan or disability plan in which the Executive is participating
immediately prior to commencement to the Corporation's knowledge
of active pendency of a proposed transaction, whether favored or
opposed by the Corporation, which results in the Change in
Control (or plans providing him with substantially similar
benefits) except as such change is prompted in good faith by a
change in the law, the taking of any action by the Corporation
which would adversely affect his participation in or materially
reduce his benefits under any such plans or deprive him of any
material fringe benefit enjoyed by him immediately prior to such
commencement, or the failure by the Corporation to provide him
with the number of paid vacation days to which he is then
entitled on the basis of years of service with the Corporation in
accordance with the Corporation's normal vacation policy in
effect immediately prior to such commencement;
(f) If the Change in Control occurred within six (6)
months following commencement of a tender or exchange offer by
any person, entity or group other than the Corporation to acquire
stock of the Corporation, following completion of which such
person, entity or group owns, or would if such tender or exchange
offer had succeeded as proposed have owned, 30% or more of the
Corporation's outstanding voting shares, a determination by the
Executive made in good faith that, as a result of the Change in
Control and a change in circumstances thereafter significantly
affecting the Executive's position, he is unable effectively to
carry out the authorities, powers, functions or duties attached
to his position, and the situation is not remedied to his
reasonable satisfaction within thirty (30) days after notice of
such determination and the reasons thereof from him to the
Corporation within six (6) months following the Change in
Control, provided he gives notice of termination within ten (10)
days after the expiration of such thirty (30) days. The burden
shall be on the Corporation to refute the Executive's good faith
determination under this provision, there being a presumption in
favor of the Executive.
3.5 Date of Termination. "Date of Termination" shall mean
(i) if the Executive's employment is terminated for Disability,
thirty (30) days after notice of termination is given, (ii) if
his employment is terminated pursuant to Section 3.3, the date
specified in the notice of termination, and (iii) if his
employment is terminated for any other reason, the date on which
a notice of termination is given.
4. COMPENSATION UPON TERMINATION OR DURING DISABILITY.
4.1 Provisions of this Article 4 shall apply only if the
Date of Termination of the Executive's employment occurs during
the periods specified in Sections 3.1(ii) or (iii).
4.2 During any period that the Executive fails to perform
his duties hereunder as a result of incapacity due to physical or
mental illness, he shall continue to receive his full base salary
at the rate then in effect and any awards under the Executive
Compensation Plan paid during such period until his employment is
terminated pursuant to Section 3.2. Thereafter, his benefits
shall be determined in accordance with the Corporation's
Disability Income Insurance Plan, or a substitute plan then in effect.
4.3 If the Executive's employment is terminated for Cause,
the Corporation shall pay him the unpaid portion of his base
salary through the Date of Termination at the rate then in effect
and shall have no further obligations to him under this Agreement.
Payment shall be made at the time provided in Section 4.4.
4.4 If the Executive's employment is terminated during
either of the periods specified in Section 3.1(ii) or 3.1(iii) by
the Corporation other than pursuant to Section 3.2 or 3.3 or by
the Executive pursuant to Section 3.4, or is terminated by the
Executive during the period specified in Section 3.1(i) (in no
event including termination because of death), the Corporation
shall pay him (i) any unpaid portion of his base salary through
the Date of Termination at the highest annual rate in effect
during the preceding twenty-four (24) months, and (ii) shall, in
addition to any severance benefits payable to the Executive under
the Corporation's normal severance policies, pay to him no later
than the fifth business day following the occurrence of both a
Change in Control and the Executive's Date of Termination an
amount equal to two (2) times the highest annual total
compensation (including base salary and incentive compensation)
paid or payable by the Corporation to him for any one of the
three (3) calendar years ending with the year prior to the year
in which the Date of Termination occurs. One-half of the amount
under (ii) above shall be severance pay and the other half a
payment contingent on the Executive's not competing with the
Corporation for a period of one year from the occurrence of both
a Change in Control and the Executive's Date of Termination. If
the Corporation determines that the Executive has competed
against the Corporation in violation of this covenant, the
Executive shall repay, within 10 business days, the full amount
paid to the Executive for the covenant not to compete. For
purposes of this Agreement, competing with the Corporation means
to engage in any activity or render any service, directly or
indirectly (whether as principal, director, officer, investor,
employee, consultant or otherwise), for or on behalf of any
person or entity if said activity or service directly or indirectly
consists of any product or service the Corporation offers for sale to its
customers. It is understood that nothing in this Agreement shall prevent
the Executive from discussing any business arrangements to become effective
after the expiration of this covenant not to compete.
4.5 If the Executive's employment is terminated during
either of the periods specified in Section 3.1(ii) or 3.1(iii) by
the Corporation other than pursuant to Section 3.2 or 3.3 or by
the Executive pursuant to Section 3.4, or is terminated by the
Executive during the period specified in Section 3.1(i) (in no
event including termination because of death), the Corporation
shall also pay at the time specified in Section 4.4 an additional
$40,000 which is hereby deemed to be an amount equal to two (2)
times the annual cost to the Executive to continue from the Date
of Termination all employee benefit plans, programs or
arrangements (such as, medical, dental, long-term disability
insurance, life insurance, perquisites, and the like but not
including retirement or stock option plans) in which Executive
was entitled to participate immediately prior to the Date of
Termination. The Corporation shall, in addition to the
foregoing, continue to provide the Executive with health and
dental benefits until the third anniversary of the date severance
payments are made pursuant to Section 4.4(ii). Such benefits
shall be substantially the same as the benefits offered to the
Company's executives generally, including family coverage, during
this three year period but at no cost to the Executive. In
addition, the Corporation shall provide financial planning
services to the Executive following a termination under Section
3.1 (ii) or (iii) through the third anniversary of the date
severance payments are made pursuant to Section 4.4(ii) at the
reimbursement rates in effect immediately preceding the Change in Control.
4.6 If the Executive's employment is terminated during
either of the periods specified in Section 3.1(ii) or 3.1(iii) by
the Corporation other than pursuant to Section 3.2 or 3.3 or by
the Executive pursuant to Section 3.4, or is terminated by the
Executive during the period specified in Section 3.1(i) (in no
event including termination because of death), then in addition
to the benefits to which he is entitled under the qualified
defined benefit retirement plans or programs in which he
participates or any successor plans or programs in effect on the
Date of Termination, the Corporation shall pay him in one sum in
cash at the date specified in 4.4 the amount equal to the
actuarial equivalent of the retirement pension to which he would
have been entitled under the terms of such retirement plans or
programs without regard to "vesting" thereunder, had he
accumulated two (2) additional years, or the period from the Date
of Termination to his normal retirement date, whichever is less,
of continuous service and age after the Date of Termination at
the compensation level in effect on the Date of Termination under
such retirement plans or programs reduced by the single sum
actuarial equivalent of any amounts to which he is entitled
pursuant to the provisions of said retirement plans and programs.
For purposes of this Section, "actuarial equivalent" shall be
determined using the same methods and assumptions utilized under
the Corporation's retirement plans and programs immediately prior
to commencement to the Corporation's knowledge of active pendency
of a proposed transaction, whether favored or opposed by the
Corporation, which resulted in the Change in Control. Executive
shall be entitled to an additional amount from the Corporation's
Supplement Retirement Plan which shall not be considered to
duplicate the payment called for in this section.
In the case of any defined contribution plan, in lieu of the
amount determined above, the Corporation shall pay to the
Executive the amount it would have contributed during the two-
year period following the Executive's Date of Termination or to
age 65 if less than two years, assuming the plan provisions
remain in effect as they were on Date of Termination and the
Executive's annual compensation were the highest annual
compensation actually received in the two years preceding his
Date of Termination and the Executive were to continue, where
relevant, to contribute at the highest rate he had contributed in
the two years preceding his Date of Termination.
4.7 The Executive shall not be required to mitigate the
amount of any payment provided for in this Article by seeking
other employment. In the case of a Change in Control, in addition to
the payment pursuant to Section 4.4 on account of a termination pursuant
to Section 3.1 or 3.4, the Executive shall also receive severance payments
pursuant to general Corporation termination policies.
4.8 In the event payments to Executive under this Agreement
and any other plan or agreement would be (except for this
provision) subject to the excise tax imposed by sections 280G and
4999 of the Internal Revenue Code, the amount payable pursuant to
this Agreement shall be reduced to the extent necessary to avoid
the imposition of such tax.
4.9 The Corporation shall be entitled to withhold from any amounts
payable hereunder such amount or amounts, if any, as are required by law.
4.10 In the event of any delay in payment of the amounts due
Executive, the Corporation shall pay interest on the amounts
delayed at the rate of prime (as reported in the Wall Street
Journal during the relevant period) plus one percent.
4.11 The Corporation may fund some or all of the payments
called for by this Agreement by establishing an irrevocable trust
under the direction and control of an independent trustee. The
amounts potentially due shall be separately stated (and updated
for changes) as shown on Appendix A attached to this Agreement to
enable the Executive, Corporation and trustee to know the amount
due Executive. The agreement with such trustee shall provide
that upon receipt of a statement by the Executive that a
Termination has occurred, such trustee (to the extent possible in
terms of the trust's funding) shall make payment to Executive on
the 5th business day following receipt of such notice pursuant to
the terms of this Agreement. Any funds set aside in such trust
shall at all times remain subject to the claims of the creditors
of the Corporation. The creation of such trust shall not lessen
the contractual obligation of the Corporation under this
Agreement, except that no payments shall be duplicated. Any
funds attributable to Executive remaining in such trust after all
payments have been made to Executive (or the possibility of
payments shall have been extinguished) shall revert to the Corporation.
5. SUCCESSORS: BINDING AGREEMENT.
5.1 This Agreement shall be binding on the successors and
assigns of the Corporation. The Corporation will 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 the Corporation, by agreement to
expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Corporation would be
required to perform it if no such succession had taken place, a
copy of which agreement shall be delivered to the Executive prior
to or contemporaneously with such succession. Failure of the
Corporation to obtain such agreement prior to the effectiveness
of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation from the Corporation
in the same amount and on the same terms as he would be entitled
hereunder if he terminated his employment for Good Reason, except
that for purposes of implementing the foregoing the date on which
any such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Corporation" shall
include any successor to substantially all of the business and/or
assets of the Corporation.
5.2 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 dies while any amounts
would still be payable to him hereunder if he had not then died,
all such amounts, unless otherwise provided herein, shall be paid
in accordance with the terms of this Agreement to his devisee,
legatee, or other designee or, if there be no such designee, to his estate.
6. NOTICE. All notices and other communications provided
for in this Agreement shall be in writing and shall be deemed to
have been duly given when delivered or when mailed by United
States registered or certified mail, postage prepaid, addressed
to the respective addresses on file, except that all notices to
the Corporation shall be directed to the attention of the Chief
Executive Officer with a copy to the Secretary, or to such other
address as either party may have furnished to the other in
writing in accordance herewith, such notices of change of address
to be effective only upon receipt.
7. LEGAL EXPENSE. If, with respect to any alleged failure
by the Corporation to comply subsequent to a Change in Control
with any of the terms of this Agreement, Executive hires legal
counsel with respect to this Agreement or institutes any
negotiations or institutes or responds to legal action to assert
or defend the validity of, enforce his rights under, or recover
damages for breach of this Agreement, the Corporation shall pay,
as they are incurred, Executive's actual expenses for attorney's
fees and disbursements, together with such additional payments,
if any, as may be necessary so that the net-after-tax payments to
the Executive equal such fees and disbursements.
8. MISCELLANEOUS.
8.1 No provisions of this Agreement may be modified, waived
or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and the Chief
Executive Officer or such other officer as is specifically
designated by the Board of Directors of this Corporation. No
waiver by either party hereto at any time of any breach by the
other party of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
8.2 The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of
the State of New York.
8.3 The masculine gender, when used herein, shall include
the feminine.
8.4 This Agreement shall not create any right in the
Executive to employment, either before or after a Change in
Control; nor does it create any rights under the Corporation's
1981 Stock Plan, or under any other plan except as specifically
provided herein.
8.5 The article and section headings in this Agreement are
for convenience only and do not affect the meaning of the
Agreement.
8.6 The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full
force and effect.
XXXXXXX CORPORATION
By: ______________________
Its: ______________________
______________________
Executive
