This Agreement (the "Agreement") is entered into as of this 23rd day of
March, 1998, by and between Blessings Corporation, a Delaware corporation
(the "Company") and Xxxx X. XxXxxxxx (the "Key Executive").
W I T N E S S E T H:
WHEREAS, the Board of Directors of the Company (the "Board"), in
recognition of the valued contributions of Xxxx X. XxXxxxxx as Chairman of
the Board of Directors of Blessings Corporation, and in this connection the
Board recognizes that the possibility of a sale of the company or a merger
exists; and
WHEREAS, the Board has determined that a severance agreement is
appropriate for Xxxx X. XxXxxxxx given his valued direction and efforts to
the Company.
NOW, THEREFORE, in order to fulfill the above purposes, the Company
agrees as follows:
ARTICLE ONE
DEFINITIONS
As used in this Agreement, the following words and phrases shall have
the following respective meanings unless the context clearly indicates
otherwise.
1.1 COMPANY: Blessings Corporation.
1.2 BOARD: The Board of Directors of Blessings Corporation.
1.3 KEY EXECUTIVE: Xxxx X. XxXxxxxx, the Chairman of the Board of
Directors of Blessings Corporation.
1.4 COMPENSATION: The amount the Key Executive is entitled to receive
as base compensation as Chairman of the Board and Chairman of the Executive
Committee, plus the
annual bonus plus the restricted stock grant as a non-employee director, but
shall not refer to any other direct or indirect compensation received by the
Key Executive, including, without limitation, any awards of stock options,
long-term incentive payouts or benefits.
1.5 CHANGE IN CONTROL: A "Change in Control" shall be deemed to occur
if, within two (2) years from the date hereof:
(a) The Company's shareholders approve of a sale, a merger or
disposition of all or substantially all of the Company's assets or a plan of
liquidation or dissolution of the Company; or
(b) There is a change of fifty percent (50%) or more in the
composition of the members of the Board in any twelve (12) consecutive months.
1.6 PAYMENT BENEFITS: The benefits payable in accordance with Article
Three of this Agreement.
ARTICLE TWO
TERM
2.1 TERM OF AGREEMENT: This Agreement shall commence on March 1, 1998,
and shall continue in effect through March 1, 1999, when it shall terminate.
ARTICLE THREE
PAYMENT BENEFITS
3.1 RIGHT TO PAYMENT BENEFITS: The Key Executive shall be entitled to
receive from the Company Payment Benefits in the amount provided in Section
3.2 if (a) this Agreement has not previously expired under the provisions
contained in Section 2 above and (b) a Change in Control has occurred; except
that, notwithstanding the foregoing provisions, no Payment Benefits
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under this Agreement will be payable should the Key Executive's death occur
before a Change in Control has occurred.
3.2 AMOUNT OF PAYMENT BENEFITS:
(a) If there is a Change in Control within the term of this
Agreement, then the Key Executive shall be entitled to payment under this
Agreement and any other agreement, arrangement, plan or entitlement with the
Company or any of its subsidiaries, of an amount no greater than two and
ninety-nine one-hundredths (2.99) times the aggregate of (i) his annual
salary as Chairman of the Board and as Chairman of the Executive Committee,
plus (ii) his annual bonus prorated to the portion of the year completed
prior to the next annual meeting, plus (iii) his annual restricted stock
grant; provided that the Key Executive shall not be entitled to receive more
than the sum of Five Hundred Thousand and 00/100 Dollars ($500,000.00) gross
from the Company under this Agreement. Any payments made under this
paragraph shall be subject to the limitation set forth in paragraph 3.3 below
and shall be payable in a lump sum within thirty (30) days after the date on
which a Change in Control occurs.
(b) The Key Executive shall not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or
otherwise, and no such payment shall be offset or reduced by the amount of
any compensation or benefits provided to the Key Executive in any subsequent
employment.
3.3 LIMITATION ON PAYMENT BENEFITS: As it is the intention of the
parties that the Company's payments under this Agreement and all other
agreements, arrangements, plans and entitlements to or for the benefit of the
Key Executive shall not constitute "parachute payments" within the meaning of
Section 280G of the Internal Revenue Code, in no event shall the present
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value of all contract benefits in Section 3.2(a), or otherwise, exceed two
and ninety-nine one-hundredths (2.99) times the Key Executive's compensation.
The compensation and the present value of the benefits shall be determined in
accordance with Section 280G of the Internal Revenue Code of 1986 and the
regulations promulgated thereunder. The Key Executive shall be afforded the
discretion to waive or reduce any benefit to which he is entitled to ensure
that the computation of benefits paid in the aggregate does not constitute
parachute payments within the meaning of Section 280G of the Internal Revenue
Code.
3.4 DETERMINATION OF MAXIMUM PAYMENTS: All determinations required to
be made under Sections 3.2 and 3.3 of this Agreement, including whether
payments would be excess "parachute payments" and the assumptions to be
utilized in arriving at such determinations, shall be made by the public
accounting firm that serves as the Company's auditors (the "Accounting
Firm"), which shall provide detailed supporting calculations both to the
Company and Key Executive within fifteen (15) business days after the Change
in Control, or such earlier time as is requested by the Company. In the event
that the Accounting Firm is serving as accountant or auditor for the
individual, entity or group effecting the Change in Control, the Key
Executive shall designate another nationally recognized accounting firm to
make the determinations required hereunder (which accounting firm shall then
be referred to as the Accounting Firm hereunder). All fees and expenses of
the Accounting Firm shall be borne solely by the Company.
ARTICLE FOUR
SUCCESSORS TO CORPORATION
This Agreement shall bind any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all, or substantially
all, of the business and/or assets of
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the Company in the same manner and to the same extent that the Company would
be obligated under this Agreement if no succession had taken place. The
Company shall require any successor by merger or otherwise to expressly and
unconditionally assume and agree to perform the Company's obligations under
this Agreement in the same manner and to the same extent that the Company
would be required to perform if no such succession had taken place
ARTICLE FIVE
MISCELLANEOUS
5.1 AMENDMENT: Any alteration to this Agreement shall be a signed
written instrument signed by both parties to this Agreement.
5.2 INDEMNIFICATION: If the Key Executive is required to institute a
legal action to enforce this Agreement, or is required to defend in any legal
action, the validity or enforceability of any right or benefit provided by
this Agreement and the Key Executive is the prevailing party in any such
legal action, the Company will pay reasonable legal fees and expenses
incurred by the Key Executive.
5.3 VALIDITY AND SEVERABILITY: The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which shall remain
in full force and effect, and any prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in
any other jurisdiction.
5.4 GOVERNING LAW: The validity, interpretation, construction and
performance of this Agreement shall in all respects be governed by the laws
of the Commonwealth of Virginia.
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BLESSINGS CORPORATION
By:
-----------------------------
KEY EXECUTIVE
---------------------------------
Xxxx X. XxXxxxxx
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