EXHIBIT 10.40
AMENDMENT EFFECTIVE AS OF SEPTEMBER 19, 1991
TO FEBRUARY 19, 1987 AGREEMENT
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This Agreement between Champion International Corporation, a New York
corporation (the "Company"), and Xxxx X. Xxxxxx, Xx. (the "Executive") is
effective as of September 19, 1991.
WHEREAS, the Company and the Executive entered into an Agreement dated
February 19, 1987 as amended as of April 21, 1988 (the "Agreement") relating to
the employment of the Executive by the Company; and
WHEREAS, the Company and the Executive wish to amend the Agreement in order
to (1) reflect the fact that the Company's indemnification provisions are set
forth in its Restated Certificate of Incorporation; (2) provide that any
benefits thereunder which constitute "parachute payments" for Federal tax
purposes be paid in an amount the net effect of which is intended to result in
the Executive receiving "parachute payments" from all sources equal to the
greater of (i) the total of the "parachute payments" from all sources, less
income taxes and any Federal excise tax thereon, and (ii) the maximum amount of
"parachute payments" that can be paid without triggering such Federal excise
tax, less income taxes thereon; and (3) expressly allow the Executive to engage
the Company's independent consulting actuary to assist in "parachute payment"
determinations;
NOW, THEREFORE, it is hereby agreed by and between the parties as follows:
1. Subparagraph 1(c) of the Agreement is hereby amended by adding the words
"Restated Certificate of Incorporation or" before the words "By-laws of the
Company."
2. Paragraph 14 of the Agreement is hereby amended in its entirety to read as
follows:
"14. Parachute Tax
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(a) Except in the specific circumstance hereinafter described in this
paragraph 14, the Company shall pay to the Executive the full amount to which he
is entitled under this Agreement.
(b)
(i) If any payments or benefits received or to be received by the
Executive under this Agreement, or any other payments or benefits
received or to be received by the Executive from the Company or any other
person, constitute "parachute payments" within the meaning of Section
280G(b)(2) or any successor provision of the Code (such payments or
benefits being hereinafter referred to as the "Parachute Payments"), and
(ii) if the aggregate present value of the Parachute Payments from all
sources, minus (A) any excise tax imposed under Section 4999 of the Code
(or any similar tax that may hereafter be imposed) (the "Excise Tax") and
(B) the net amount of federal, state and local income tax on such
aggregate present value, would be less than the maximum amount of
Parachute Payments from all sources that can be paid without triggering
the Excise Tax, after deduction of the net amount of federal, state and
local income tax on such maximum amount, then
(iii) the Parachute Payments to be paid by the Company to the Executive
under this Agreement shall be reduced to a lump sum amount (if any) such that
the aggregate present value of the Parachute Payments from all sources is equal
to the maximum amount of Parachute Payments that can be paid without triggering
the Excise Tax.
Anything in this subparagraph 14(b) to the contrary notwithstanding, it is
understood and agreed that the amount to be paid by the Company to the Executive
pursuant to this subparagraph 14(b) in the specific circumstance described
herein may be less, but never more, than the amount to which he would otherwise
be entitled under this Agreement.
(c) All matters to be determined pursuant to subparagraph 14(b) including,
without limitation, the existence or absence of any Parachute Payments, the
aggregate present value of any Parachute Payments, the amount of the Excise Tax
(if any), the net amount of federal, state and local income tax (assuming the
highest applicable marginal rate in each case), the maximum amount of Parachute
Payments that can be paid without triggering the Excise Tax, the amount of any
reduction in the Parachute Payments to be paid by the Company to the Executive
under this Agreement and the item or items (if any) to be reduced, shall be
determined by the Executive or, following his death, his beneficiary or
beneficiaries. The specifics of such determination shall be delivered in
writing to the Company and to the trustee of the Trust referred to in
subparagraph 9(d)(ii) above at the time of the Executive's termination within
three years after a Change in Control, or as soon as practicable thereafter, by
the Executive or, following his death, his beneficiary or beneficiaries. The
reasonable fees and expenses of such tax counsel and financial advisor as may
reasonably be called upon to assist the Executive or his beneficiary or
beneficiaries in the foregoing determinations shall be paid by the Company.
Without limiting the generality of the immediately preceding sentence, the
Executive or his beneficiary or beneficiaries may select as such financial
advisor Xxxxxx Associates or such other person or firm as may be serving at the
time as the Company's independent consulting actuary."
3. Except as amended hereby, all of the terms and conditions set forth in
the Agreement shall continue in full force and effect without change.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
and its seal to be affixed hereto, and the Executive has executed this
Agreement, all as of September 19, 1991.
CHAMPION INTERNATIONAL CORPORATION
By /s/ Xxxxxx X. Xxxxxx
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Chairman of the Board of Directors
Attest:
/s/ Xxxxxxxx X. Xxx
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Secretary
/s/ Xxxx X. Xxxxxx, Xx.
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Xxxx X. Xxxxxx, Xx.
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