AMENDED AND RESTATED SUPPLEMENTAL
COMPENSATION AGREEMENT
THIS AGREEMENT made and entered into as of the first day of October, 1997,
between National-Standard Company, an Indiana corporation (the "Company"), and
____________________("Employee").
WHEREAS, in recent years there have been a series of takeovers and mergers
of U.S. corporations, in a number of cases by corporations located outside the
U.S. and current conditions may contribute to the continuation or acceleration
of this trend;
WHEREAS, the possibility of takeovers by previously unknown and possibly
foreign purchasers can contribute to uncertainty of employment and also loss of
valuable managers of the Company to the detriment of the Company and its
shareholders; and
WHEREAS, the Company is desirous of providing the Employee with
supplemental compensation should the Employee be terminated as the result of a
change of ownership or takeover of the Company;
NOW THEREFORE, in consideration of the premises and the mutual promises
herein contained, it is agreed as follows;
(1) If, within three years following a "change in control", the
Company makes any substantial changes in the Employee's employment
conditions, authority or job responsibilities which materially
restrict his ability to perform the functions of
_____________________________of the Company, the Employee may, by
written notice, inform the Company that the change or changes
constitute a termination without cause. The Employee's employment
with the Company shall terminate thirty (30) days after receipt of the
notice by the Company. Thereafter the Company shall provide as a
severance benefit to the Employee and as liquidated damages for breach
by the Company of its otherwise applicable obligations, the following:
(i) A lump sum payment equal to 2.99 times the Employee's "base
amount" within the meaning of Section 280G(b)(3) of the Internal
Revenue Code of 1986, as amended (the "Code");
(ii) Continuation of term life insurance and medical and health
insurance for a 36 month period commencing on termination of
employment;
(iii) If the total payments and benefits received or to be received by
the Employee in connection with the termination of Employee's
employment following a change in control, whether pursuant to the
terms of this Agreement or any other plan, arrangement or agreement
with the Company, will be subject to the Excise Tax imposed by Section
4999 of the Code, the Employee may waive receipt of all or any portion
of the payments and benefits otherwise owed to him, or may defer
receipt so as to reduce the present value of any such payments. If,
notwithstanding such waiver or deferral, there is still an Excise Tax
payable by the Employee under Section 4999, the Employee shall
receive, in addition to all other amounts due to him under this
Agreement, a "gross up" payment calculated so that the net amount of
such gross up payment, after payment of all income, payroll, excise
and penalty taxes (including the Excise Tax under Section 4999)
imposed on the gross up, shall equal the lesser of (a) the Excise Tax
imposed by Section 4999 on all payments and benefits owed to the
Employee other than the gross up payment, or, (b) $50,000.
(2) For purposes of this Agreement "change in control" shall mean:
(i) The acquisition by any person or entity (other than any employee
stock ownership plan" or any "defined benefit plan" [as defined under
the Code] maintained by the Company) of 30% or more of the combined
voting power of the Company's outstanding securities; or
(ii) Shareholder approval of any consolidation or merger of the
Company with another corporation if following such consolidation or
merger, shareholders of the Company immediately prior to such
consolidation or merger would not beneficially own securities
representing at least 60% of the combined voting power of the
outstanding voting securities of the surviving or continuing
corporation; or
(iii) During any period of 24 consecutive months, individuals who, at
the beginning of such period constitute the Board of Directors of the
Company and "qualified replacements", cease for any reason, to
constitute a majority of the Board. A director shall be a "qualified
replacement" if the election or nomination for election by the
Company's shareholders of the director was approved by a vote of at
least two-thirds of the directors then still in office who either were
directors at the beginning of such period or are themselves qualified
replacements; or
(iv) Shareholder approval of any sale, lease, exchange or other
transfer (in one transaction or in a series of related transactions)
of all, or substantially all of the assets of the Company, other than
to any entity (or entities) of which the Company or the shareholders
of the Company immediately prior to such transaction beneficially own
securities representing at least 60% of the combined voting power of
the outstanding voting securities.
(3) The Employee agrees that without the consent of the Company he will
not at any time after the termination date (except as required by law) disclose
to any person confidential information concerning the Company or any of the
Company's trade secrets.
(4) The Employee shall not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or otherwise.
(5) In the event the Employee shall file suit or take any other legal
action to enforce any of his rights under this Agreement and shall be
successful, the Employee shall be entitled to recover from the Company
reasonable attorneys' fees and other reasonable costs incurred by the Employee
in connection therewith.
(6) This Agreement shall be binding upon and its benefits shall accrue to
the heirs, successors and assigns of the parties hereto.
(7) The initial term of this Agreement shall end on September 30, 2000,
with automatic one (1) year extensions thereafter unless either party cancels by
written notice to the other at least sixty (60) days prior to the end of the
initial term or any extension.
(8) This Agreement terminates and replaces all prior agreements relating
to the subject matter hereof.
(9) This Agreement may be executed in two counterparts, both of which
shall be deemed an original, but which together shall constitute one instrument.
(10) This Agreement shall be governed by the law of the State of Indiana.
IN WITNESS WHEREOF, this Agreement has been duly executed by the
Employee and the Company's officer thereunto duly authorized as of the day and
year first above written.
NATIONAL-STANDARD COMPANY EMPLOYEE
By:__________________________ ____________________
