EXHIBIT 10N
AGREEMENT FOR CONTINUED EMPLOYMENT FOLLOWING CHANGE
OF CONTROL OR DISPOSITION OF A SUBSIDIARY
This Agreement is made and entered into by and between GATX Corporation
("GATX") and Xxxxx X. Xxxxxxxx, (the "Executive") on the Execution Date shown
below, to be effective as of July 1, 1995.
W I T N E S S E T H
WHEREAS, GATX and the Executive desire to enter into this Agreement in
order to provide GATX and its consolidated subsidiaries stability of management
following a Change of Control or Disposition (as those terms are defined herein)
of GATX or one of its consolidated subsidiaries, to provide for the continued
employment of the Executive for a period of two years following the occurrence
of either such event, and to set forth the terms and conditions of such
continued employment and the obligations of the parties in the event of
termination thereof.
NOW, THEREFORE, it is hereby agreed by and between the parties as
follows:
1. Definitions.
a. "Cause" means a willful and material breach of this Agreement
which has resulted or is likely to result in a material
detriment to the financial condition, business or prospects
of GATX.
b. "Change of Control" means the occurrence of any of the following events:
(1) Receipt by GATX of a Schedule 13D report confirming
that a person or group owns beneficially twenty
percent (20%) or more of the outstanding voting stock
of GATX.
(2) Any purchase under a non-GATX tender or exchange
offer for stock of GATX following which the offering
person or group owns beneficially twenty percent
(20%) or more of such stock.
(3) Shareholder approval of any merger in which GATX is
not the surviving corporation or survives only as a
subsidiary of another corporation, consolidation or
sale of all, or substantially all, of GATX's assets
in one transaction or in a series of transactions.
(4) A change in the majority of the Board of Directors of GATX not
recommended by the incumbent directors.
(The words "person" and "group", as used in this paragraph
1.b, shall have the meanings ascribed to them under Section
13(d) of the Securities Exchange Act of 1934.)
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c. "Company" includes GATX, its consolidated subsidiaries, any former
subsidiary of GATX by which the Executive was primarily employed on
the day prior to the Triggering Event and any successor to GATX or
such subsidiary by purchase of assets or otherwise.
d. "Company Unit" means any corporation, included within the term
"Company."
e. "Constructive Termination" or "Constructively Terminates" means the
effecting of any of the following actions by the Company following
which the Executive terminates the Executive's employment by the
Company:
(1) a significant reduction in the nature or scope of the
Executive's authority, duties, functions or
responsibilities or a material change in the location
at which they are to be performed or the imposition
of unreasonable travel requirements;
(2) a reduction in the Executive's compensation from that
provided to the Executive immediately prior to the
Triggering Event;
(3) a diminution in the Executive's eligibility to
participate in bonus, stock option, incentive award
and other benefit plans from the level at which the
Executive was participating therein immediately prior
to the Triggering Event;
(4) a diminution in employee benefits (including, but not
limited to medical, dental, life insurance and
disability plans) and other Perquisites applicable to
the Executive, from the level of benefits and other
Perquisites to which the Executive was entitled
immediately prior to the Triggering Event; and
(5) a reasonable determination by the Executive that, as
a result of a change in circumstances affecting the
Company or its management, the Executive is unable to
exercise effectively the authorities, duties,
functions and responsibilities consistent with those
attributable to the Executive's position immediately
prior to the Triggering Event.
f. "Disposition" of a Company Unit means any transaction,
including sale, consolidation, merger or spin-off of any
Company Unit, following which GATX no longer owns fifty
percent (50%) or more of the voting stock of such Company Unit
or the sale of all or substantially all of the assets of such
Company Unit.
g. "Employment Period" means the two (2) year period commencing on the
day of a Triggering Event and ending two years following such day.
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h. "Perquisites" includes not only those incidental emoluments of
office commonly included within the term, such as a company
assigned car, club membership and financial planning
assistance, but also the benefits under corporate employee
benefit plans such as the GATX medical, life insurance and
Pension Plans (as defined herein) and other plans and
agreements relating thereto.
i. "Total Disability" means any disability that (1) entitles the
Executive to disability income benefits under the GATX
Corporation Long Term Disability Income Plan as in effect on
the day prior to the Triggering Event and (2) prevents the
Executive, for the duration of the Employment Period, from
engaging in the same or comparable type of employment as that
in which the Executive was engaged on the day prior to the
Triggering Event.
j. "Triggering Event" means the first to occur of a Change of
Control or the Disposition of the Company Unit by which the
Executive was primarily employed on the day prior to such
Change of Control or Disposition.
2. Employment. This Agreement shall have no effect on, nor shall any of
its provisions apply to, the Executive's employment or termination thereof that
occurs prior to the occurrence of a Triggering Event. However, if the Executive
is employed by the Company on the day prior to a Triggering Event, the Company
shall continue to employ the Executive and the Executive shall remain in the
employ of the Company for the duration of the Employment Period. Provided,
however, subject only to the provisions of paragraphs five (5) and six (6)
below, the Company may, at any time, terminate the employment of the Executive
at will.
3. Performance of Duties. During the Executive's employment by the
Company, the Executive shall devote his or her best efforts and full business
time exclusively to the business affairs and interests of the Company and shall
faithfully and efficiently perform such duties, consistent with the status of
the Executive's position, as may be assigned to the Executive from time to time
by the Chief Executive Officer of the Company or the Chief Executive Officer's
delegate.
4. Compensation. During the Executive's employment by the Company, he or
she shall receive a salary in such amount as may be established from time to
time by the Company Unit by which the Executive is primarily employed and shall
be
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entitled to participate, in accordance with the Company's policy and
consistent with the Executive's position and salary, in all plans and all
Perquisites applicable generally to other executives of the Company Unit.
5. Termination Payments. If the Company terminates or Constructively
Terminates the Executive's employment at any time during the Employment Period
for any reason other than Cause or Total Disability, the Company shall
promptly pay or cause to be paid to the Executive in a lump sum an amount
equal to:
a. Twice the Executive's annual salary before deductions and deferrals at
the level thereof as of the day prior to the Triggering Event, plus the bonus
that would have been payable to the Executive (for the year in which such
termination or Constructive Termination occurs) under the GATX Management
Incentive Plan (the "MIP")) as in effect on the day prior to the Triggering
Event, equal in amount to the product of (i) the Executive's annual salary as in
effect immediately prior to the Triggering Event and (ii) the Executive's Target
Bonus (as that term is defined in the MIP); minus
b. Any amounts paid to the Executive in accordance with the Company's
severance pay policies.
In addition to the amount set forth above, the Company shall:
(1) Permit the Executive to continue the Executive's
participation (or provide equivalent coverage) in the
Company Unit's medical, dental, disability and life
insurance programs provided under GATX's benefit plans as in
effect on the day prior to the Triggering Event until the
earlier to occur of (a) the second anniversary of the date
as of which the Executive's employment is terminated or
Constructively Terminated or (b) the date on which the
Executive becomes eligible for coverage under any other
employee benefit plans providing substantially equivalent
benefits at substantially equivalent levels;
(2) Reimburse the Executive (to a maximum of five thousand dollars
($5,000) per year) for financial and estate planning and tax return
preparation for the two (2) years immediately following the
Executive's termination or Constructive Termination of employment in
accordance with GATX's executive financial planning program in effect
on the day prior to a Triggering Event;
(3) Reimburse the Executive (to a maximum of thirty thousand dollars
($30,000)) for the cost of outplacement services plus up to one
thousand dollars ($1,000) of expenses incurred in seeking or
obtaining new employment.
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6. Retirement Benefits. In addition to the foregoing, if the Executive
survives for two (2) years following such termination or Constructive
Termination of employment:
a. The Company shall pay or cause to be paid to the Executive (or in the
event of the Executive's death following the expiration of such two
(2) year period to the Executive's surviving spouse) a Retirement
Income Benefit (as hereinafter defined) calculated and paid as
follows:
(1)
The Retirement Income Benefit shall be an amount equal to the
difference, if any, between (a) the monthly benefit the Executive
(or, in the event of the Executive's death, the Executive's
surviving spouse) would have received as a monthly pension benefit
under the GATX Corporation Non-Contributory Pension Plan for
Salaried Employees, (the "Salaried Pension Plan") the GATX
Corporation Excess Benefit Plan, the GATX Corporation Supplemental
Benefit Plan and any other written agreement between the Executive
and the Company regarding the Executive's retirement, all as in
effect on the day prior to the Triggering Event, ( hereinafter
collectively, the "Pension Plan") assuming the Executive's
employment had terminated two (2) years after the date of the
Executive's termination or Constructive Termination of employment,
and accordingly the Executive had accumulated two additional years
of service credit under the Pension Plan at a level of compensation
calculated in accordance with the immediately following sentence and
(b) the amount, if any, the Executive (or, in the event of the
Executive's death, the Executive's surviving spouse) actually
receives as a monthly benefit under the Pension Plan. For purposes
of subparagraph (a) of this paragraph, the Executive's compensation
for each of the two additional years of assumed service credit shall
be equal to the level of the Executive's compensation as in effect
immediately prior to the Triggering Event, plus an amount equal to
the average of the Covered Bonuses (as defined in Section 2.13 of
the Salaried Pension Plan) paid to the Executive during the five (5)
calendar year period immediately preceding the Triggering Event.
(2) Payment of the Retirement Income Benefit shall be made in the
same manner, simultaneously with and in the same form as payments
are, or would have been, made to the Executive (or in the event of
the Executive's death to the Executive's surviving spouse) under the
Pension Plan, but shall commence no sooner than two (2) years
following the Executives' termination or Constructive Termination of
employment. Any election available to and validly executed by the
Executive under the Pension Plan as to either an optional form of
payment or as to the date on which benefits are to commence, shall
be
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applicable to the Retirement Income Benefit and shall be utilized in
calculating the amount of the Retirement Income Benefit.
b. The Company shall permit the Executive to participate in (or
shall provide equivalent coverage) on the same basis as other GATX
employees who have terminated their employment at approximately the
same age and after a substantially equivalent number of years of
service in the GATX Corporation Medical Plan and the GATX
Corporation Life Insurance Plan, both as in effect on the day prior
to the Triggering Event. Such benefits shall be paid at the same
time, under the same conditions and to the same extent as if the
Executive's employment had continued for two (2) years after the
termination or Constructive Termination of the Executive's
employment.
Notwithstanding the foregoing, if the Executive would otherwise be entitled to
receive a Retirement Income Benefit hereunder but dies prior to the expiration
of a two (2) year period following termination or Constructive Termination of
the Executive's employment and leaves a surviving spouse, such surviving
spouse shall be entitled to receive such payments and Perquisites as would be
applicable to such surviving spouse under this Agreement, the Pension Plan and
all other GATX employee benefit plans and policies in effect on the day prior
to the Triggering Event, calculated and payable in the same manner as if the
Executive had been employed by the Company on the Executive's date of death.
7. Payment in Lieu. Except with respect to (a) compensation applicable to the
Executive's employment prior to the termination or Constructive Termination
thereof, (b) amounts payable under the severance pay policies described in
paragraph 5(b) above, and (c) such compensation as may be payable or rights as
may be exercisable on termination of employment under the GATX Salaried
Employees Retirement Savings Plan, the Executive Deferred Income Plans, the
Management Incentive Plan, the GATX Corporation 1985 Long Term Incentive
Compensation Plan or other similar programs, all as in effect on the day prior
to the Triggering Event, the amounts payable to the Executive under this
Agreement shall be in lieu of any other amount payable to the Executive by the
Company by reason of the Executive's termination or Constructive Termination
of employment.
8. Confidentiality. During and after the Executive's employment, the
Executive will not divulge or appropriate to the Executive's own use or to
the use of others any secret or confidential information or knowledge
pertaining to the business of the Company or any of its subsidiaries or
affiliates obtained by the Executive during such employment.
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9. Nonalienation. The interests of the Executive under the Agreement
are not subject to the claims of the Executive's creditors and may not
otherwise be voluntarily or involuntarily assigned, alienated or encumbered.
10. Tax Penalties. The Company will provide complete tax and compensation data
on a timely basis to the Executive and to an accounting firm designated by the
Executive to enable the Executive to determine the extent, if any, to which
the Executive's compensation under this Agreement and all other compensation
agreements, plans and programs of the Company may be considered to be a
parachute payment or excess parachute payment under section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"). In the event that any
such compensation is deemed to constitute an excess parachute payment that is
subject to tax under Section 4999 of the Code or any successor provision
thereto (the "Excise Tax"), the Company shall pay to the Executive an
additional amount (the "Gross-Up Amount") that, after payment of all Federal
and state income taxes thereof (assuming the Executive is at the highest
marginal federal and applicable state income tax rate in effect on the date of
payment of the Gross-Up Amount) and payment of the Excise Tax on the Gross-Up
Amount, is equal to the Excise Tax payable by the Executive on such excess
parachute payment. The Gross-Up Amount payable with respect to each excess
parachute payment shall be paid by the Company coincident with payment of such
excess parachute payment.
11. No Cumulation or Duplication of Benefits. The obligations of the Company
to make payments or provide benefits hereunder are the joint and several
obligations of the Company and the Company Units. Accordingly, if following
the termination or Constructive Termination of the Executive's employment the
Executive receives any form of compensation payments or benefits from the
Company or any Company Unit or from a successor thereto or affiliate thereof,
the amount of any such compensation or payment together with the fair market
value of any such benefits shall be deducted from any obligation of the
Company or applicable Company Unit to make payments or provide benefits to the
Executive under or by reason of this Agreement.
12. Reduction of Payments. Notwithstanding anything contained herein to
the contrary, any amounts payable hereunder shall be reduced by such amount as
may be necessary to make this agreement not unlawful under federal law.
13. Amendment. This Agreement may be amended by written agreement of the
parties without the consent of any other person and no person, other than the
parties hereto, shall have any rights under or interest in this Agreement or
the subject matter hereof.
14. Extension. The Board of Directors of GATX may, at any time prior to
the expiration or termination of this Agreement, extend the term of this
Agreement for a period of up to two (2) years from the date on which the
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extension is approved, without any further action on the part of the Executive.
15. Successors. This Agreement shall be binding upon, and inure to the benefit
of, the heirs, executors and legal representatives of the Executive and the
successors and assigns of the Company and upon any person acquiring, whether
by merger, consolidation, purchase of assets or otherwise, all or
substantially all of the assets and business of any Company Unit. The Company
agrees that it will not effect the sale or other disposition of all or
substantially all of its assets unless either (a) the person or entity
acquiring the assets or a substantial portion of the assets shall expressly
assume by an instrument in writing all duties and obligations of the Company
under this Agreement or (b) the Company shall provide through the
establishment of a separate reserve for the payment in full of all amounts
that are or may be reasonably expected to become payable to the Executive
under this Agreement.
16. Nonwaiver. The waiver by either party of a breach of this Agreement
shall not be construed as a waiver of any subsequent breach.
17. Resolution of Disputes. Any controversy or claim arising out of or
relating to this Agreement or the alleged breach thereof, shall be settled by
arbitration in the City of Chicago, Illinois in accordance with the laws of
the State of Illinois b arbitrators, one of whom shall be appointed by the
Company or any successor thereto, one by the Executive and the third by the
other two. If the other two arbitrators cannot agree on the appointment of a
third arbitrator, or if either party fails within thirty (30) days after
receipt of written demand to appoint an arbitrator, then such arbitrator shall
be appointed by the Xxxx of the Business School of the University of Chicago
or his delegate. The arbitration shall be conducted in accordance with the
rules of the American Arbitration Association, except with respect to the
selection of arbitrators, which shall be as provided in this paragraph 17.
Judgment upon the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof. In the event that it shall be necessary or
desirable for the Executive to retain legal counsel and/or incur other costs
and expenses in connection with the enforcement of any and all of his rights
under this Agreement, the Executive shall be entitled to recover from the
Company reasonable attorney's fees and costs and expenses incurred by the
Executive in connection with the enforcement of said rights. Payments shall be
made to the Executive by the Company at the time these attorney's fees and
costs and expenses are incurred by the Executive. If, however, the arbitrators
should later determine that under the circumstances it was unjust for the
Company to have made any of these payments of attorney's fees and costs and
expenses to the Executive, the Executive shall repay any such payments to the
Company in accordance with the order of the arbitrators. Any award of the
arbitrators shall include interest at a rate or rates considered just under
the circumstances by the arbitrators.
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18. Termination of Agreement. This agreement shall terminate on December 31,
1997, provided, however, if prior to such date, but after January 1, 1996,
there shall occur either (a) a Change of Control or (b) a Disposition of a
Company Unit by which the Executive is primarily employed on the day prior to
such Disposition, this agreement shall remain in effect until two years
following the date of the first to occur of such Change of Control or
Disposition.
Termination of this Agreement shall not affect any rights that shall have
accrued to the Executive under this Agreement prior to the termination date.
IN WITNESS WHEREOF, the Executive has hereunto set his hand, and GATX has
caused these presents to be executed in its name and on its behalf, and its
corporate seal to be hereunto affixed and attested by its Assistant Secretary.
/s/ Xxxxx X. Xxxxxxxx
-----------------------------------
Executive
GATX CORPORATION
By /s/ Xxxxx X. Xxxxxxx
----------------------------------
Its Chairman of the Board
July 31, 1995
-----------------------------------
(Execution Date)
ATTEST:
/s/ Xxxxx Xxxxxxxx
----------------------------------
Its Assistant Secretary
EXHIBIT 10N
AGREEMENT FOR CONTINUED EMPLOYMENT FOLLOWING CHANGE
OF CONTROL OR DISPOSITION OF A SUBSIDIARY
This Agreement is made and entered into by and between GATX Corporation
("GATX") and Xxxxx X. Xxxxxx, (the "Executive") on the Execution Date shown
below, to be effective as of January 1, 1996.
W I T N E S S E T H
WHEREAS, GATX and the Executive desire to enter into this Agreement in
order to provide GATX and its consolidated subsidiaries stability of management
following a Change of Control or Disposition (as those terms are defined herein)
of GATX or one of its consolidated subsidiaries, to provide for the continued
employment of the Executive for a period of two years following the occurrence
of either such event, and to set forth the terms and conditions of such
continued employment and the obligations of the parties in the event of
termination thereof.
NOW, THEREFORE, it is hereby agreed by and between the parties as
follows:
1. Definitions.
a. "Cause" means a willful and material breach of this Agreement
which has resulted or is likely to result in a material
detriment to the financial condition, business or prospects
of GATX.
b. "Change of Control" means the occurrence of any of the
following events:
(1) Receipt by GATX of a Schedule 13D report confirming
that a person or group owns beneficially twenty
percent (20%) or more of the outstanding voting stock
of GATX.
(2) Any purchase under a non-GATX tender or exchange
offer for stock of GATX following which the offering
person or group owns beneficially twenty percent
(20%) or more of such stock.
(3) Shareholder approval of any merger in which GATX is
not the surviving corporation or survives only as a
subsidiary of another corporation, consolidation or
sale of all, or substantially all, of GATX's assets
in one transaction or in a series of transactions.
(4) A change in the majority of the Board of Directors of
GATX not recommended by the incumbent directors.
(The words "person" and "group", as used in this paragraph
1.b, shall have the meanings ascribed to them under Section
13(d) of the Securities Exchange Act of 1934.)
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c. "Company" includes GATX, its consolidated subsidiaries, any
former subsidiary of GATX by which the Executive was
primarily employed on the day prior to the Triggering Event
and any successor to GATX or such subsidiary by purchase of
assets or otherwise.
d. "Company Unit" means any corporation, included within the term
"Company."
e. "Constructive Termination" or "Constructively Terminates"
means the effecting of any of the following actions by the
Company following which the Executive terminates the
Executive's employment by the Company:
(1) a significant reduction in the nature or scope of the
Executive's authority, duties, functions or
responsibilities or a material change in the location
at which they are to be performed or the imposition
of unreasonable travel requirements;
(2) a reduction in the Executive's compensation from that
provided to the Executive immediately prior to the
Triggering Event;
(3) a diminution in the Executive's eligibility to
participate in bonus, stock option, incentive award
and other benefit plans from the level at which the
Executive was participating therein immediately prior
to the Triggering Event;
(4) a diminution in employee benefits (including, but not
limited to medical, dental, life insurance and
disability plans) and other Perquisites applicable to
the Executive, from the level of benefits and other
Perquisites to which the Executive was entitled
immediately prior to the Triggering Event; and
(5) a reasonable determination by the Executive that, as
a result of a change in circumstances affecting the
Company or its management, the Executive is unable to
exercise effectively the authorities, duties,
functions and responsibilities consistent with those
attributable to the Executive's position immediately
prior to the Triggering Event.
f. "Disposition" of a Company Unit means any transaction,
including sale, consolidation, merger or spin-off of any
Company Unit, following which GATX no longer owns fifty
percent (50%) or more of the voting stock of such Company Unit
or the sale of all or substantially all of the assets of such
Company Unit.
g. "Employment Period" means the two (2) year period commencing
on the day of a Triggering Event and ending two years
following such day.
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h. "Perquisites" includes not only those incidental emoluments of
office commonly included within the term, such as a company
assigned car, club membership and financial planning
assistance, but also the benefits under corporate employee
benefit plans such as the GATX medical, life insurance and
Pension Plans (as defined herein) and other plans and
agreements relating thereto.
i. "Total Disability" means any disability that (1) entitles the
Executive to disability income benefits under the GATX
Corporation Long Term Disability Income Plan as in effect on
the day prior to the Triggering Event and (2) prevents the
Executive, for the duration of the Employment Period, from
engaging in the same or comparable type of employment as that
in which the Executive was engaged on the day prior to the
Triggering Event.
j. "Triggering Event" means the first to occur of a Change of
Control or the Disposition of the Company Unit by which the
Executive was primarily employed on the day prior to such
Change of Control or Disposition.
2. Employment. This Agreement shall have no effect on, nor shall any of
its provisions apply to, the Executive's employment or termination thereof that
occurs prior to the occurrence of a Triggering Event. However, if the Executive
is employed by the Company on the day prior to a Triggering Event, the Company
shall continue to employ the Executive and the Executive shall remain in the
employ of the Company for the duration of the Employment Period. Provided,
however, subject only to the provisions of paragraphs five (5) and six (6)
below, the Company may, at any time, terminate the employment of the Executive
at will.
3. Performance of Duties. During the Executive's employment by the
Company, the Executive shall devote his or her best efforts and full business
time exclusively to the business affairs and interests of the Company and shall
faithfully and efficiently perform such duties, consistent with the status of
the Executive's position, as may be assigned to the Executive from time to time
by the Chief Executive Officer of the Company or the Chief Executive Officer's
delegate.
4. Compensation. During the Executive's employment by the
Company, he or she shall receive a salary in such amount as may be established
from time to time by the Company Unit by which the Executive is primarily
employed and shall be entitled to participate, in accordance with the
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entitled to participate, in accordance with the Company's policy and
consistent with the Executive's position and salary, in all plans and all
Perquisites applicable generally to other executives of the Company Unit.
5. Termination Payments. If the Company terminates or Constructively
Terminates the Executive's employment at any time during the Employment Period
for any reason other than Cause or Total Disability, the Company shall
promptly pay or cause to be paid to the Executive in a lump sum an amount
equal to:
a. Twice the Executive's annual salary before deductions and
deferrals at the level thereof as of the day prior to the Triggering
Event, plus the bonus that would have been payable to the Executive
(for the year in which such termination or Constructive Termination
occurs) under the GATX Management Incentive Plan (the "MIP")) as in
effect on the day prior to the Triggering Event, equal in amount to
the product of (i) the Executive's annual salary as in effect
immediately prior to the Triggering Event and (ii) the Executive's
Target Bonus (as that term is defined in the MIP); minus
b. Any amounts paid to the Executive in accordance with the Company's
severance pay policies.
In addition to the amount set forth above, the Company shall:
(1) Permit the Executive to continue the Executive's participation (or
provide equivalent coverage) in the Company Unit's medical, dental,
disability and life insurance programs provided under GATX's benefit
plans as in effect on the day prior to the Triggering Event until
the earlier to occur of (a) the second anniversary of the date as of
which the Executive's employment is terminated or Constructively
Terminated or (b) the date on which the Executive becomes eligible
for coverage under any other employee benefit plans providing
substantially equivalent benefits at substantially equivalent
levels;
(2) Reimburse the Executive (to a maximum of five thousand dollars
($5,000) per year) for financial and estate planning and tax return
preparation for the two (2) years immediately following the
Executive's termination or Constructive Termination of employment in
accordance with GATX's executive financial planning program in effect
on the day prior to a Triggering Event;
(3) Reimburse the Executive (to a maximum of thirty thousand dollars
($30,000)) for the cost of outplacement services plus up to one
thousand dollars ($1,000) of expenses incurred in seeking or
obtaining new employment.
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6. Retirement Benefits. In addition to the foregoing, if the Executive
survives for two (2) years following such termination or Constructive
Termination of employment:
a. The Company shall pay or cause to be paid to the Executive (or in the
event of the Executive's death following the expiration of such two
(2) year period to the Executive's surviving spouse) a Retirement
Income Benefit (as hereinafter defined) calculated and paid as
follows:
(1) The Retirement Income Benefit shall be an amount equal to the
difference, if any, between (a) the monthly benefit the Executive
(or, in the event of the Executive's death, the Executive's
surviving spouse) would have received as a monthly pension benefit
under the GATX Corporation Non-Contributory Pension Plan for
Salaried Employees, (the "Salaried Pension Plan") the GATX
Corporation Excess Benefit Plan, the GATX Corporation Supplemental
Benefit Plan and any other written agreement between the Executive
and the Company regarding the Executive's retirement, all as in
effect on the day prior to the Triggering Event, ( hereinafter
collectively, the "Pension Plan") assuming the Executive's
employment had terminated two (2) years after the date of the
Executive's termination or Constructive Termination of employment,
and accordingly the Executive had accumulated two additional years
of service credit under the Pension Plan at a level of compensation
calculated in accordance with the immediately following sentence and
(b) the amount, if any, the Executive (or, in the event of the
Executive's death, the Executive's surviving spouse) actually
receives as a monthly benefit under the Pension Plan. For purposes
of subparagraph (a) of this paragraph, the Executive's compensation
for each of the two additional years of assumed service credit shall
be equal to the level of the Executive's compensation as in effect
immediately prior to the Triggering Event, plus an amount equal to
the average of the Covered Bonuses (as defined in Section 2.13 of
the Salaried Pension Plan) paid to the Executive during the five (5)
calendar year period immediately preceding the Triggering Event.
(2) Payment of the Retirement Income Benefit shall be made in the same
manner, simultaneously with and in the same form as payments are, or
would have been, made to the Executive (or in the event of the
Executive's death to the Executive's surviving spouse) under the
Pension Plan, but shall commence no sooner than two (2) years
following the Executives' termination or Constructive Termination of
employment. Any election available to and validly executed by the
Executive under the Pension Plan as to either an optional form of
payment or as to the date on which benefits are to commence, shall
be
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applicable to the Retirement Income Benefit and shall be utilized in
calculating the amount of the Retirement Income Benefit.
b. The Company shall permit the Executive to participate in (or shall
provide equivalent coverage) on the same basis as other GATX
employees who have terminated their employment at approximately the
same age and after a substantially equivalent number of years of
service in the GATX Corporation Medical Plan and the GATX
Corporation Life Insurance Plan, both as in effect on the day prior
to the Triggering Event. Such benefits shall be paid at the same
time, under the same conditions and to the same extent as if the
Executive's employment had continued for two (2) years after the
termination or Constructive Termination of the Executive's
employment.
Notwithstanding the foregoing, if the Executive would otherwise be entitled to
receive a Retirement Income Benefit hereunder but dies prior to the expiration
of a two (2) year period following termination or Constructive Termination of
the Executive's employment and leaves a surviving spouse, such surviving
spouse shall be entitled to receive such payments and Perquisites as would be
applicable to such surviving spouse under this Agreement, the Pension Plan and
all other GATX employee benefit plans and policies in effect on the day prior
to the Triggering Event, calculated and payable in the same manner as if the
Executive had been employed by the Company on the Executive's date of death.
7. Payment in Lieu. Except with respect to (a) compensation applicable to the
Executive's employment prior to the termination or Constructive Termination
thereof, (b) amounts payable under the severance pay policies described in
paragraph 5(b) above, and (c) such compensation as may be payable or rights as
may be exercisable on termination of employment under the GATX Salaried
Employees Retirement Savings Plan, the Executive Deferred Income Plans, the
Management Incentive Plan, the GATX Corporation 1985 Long Term Incentive
Compensation Plan or other similar programs, all as in effect on the day prior
to the Triggering Event, the amounts payable to the Executive under this
Agreement shall be in lieu of any other amount payable to the Executive by the
Company by reason of the Executive's termination or Constructive Termination
of employment.
8. Confidentiality. During and after the Executive's employment, the
Executive will not divulge or appropriate to the Executive's own use or to the
use of others any secret or confidential information or knowledge pertaining
to the business of the Company or any of its subsidiaries or affiliates
obtained by the Executive during such employment.
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9. Nonalienation. The interests of the Executive under the Agreement are not
subject to the claims of the Executive's creditors and may not otherwise be
voluntarily or involuntarily assigned, alienated or encumbered.
10. Tax Penalties. The Company will provide complete tax and compensation data
on a timely basis to the Executive and to an accounting firm designated by the
Executive to enable the Executive to determine the extent, if any, to which
the Executive's compensation under this Agreement and all other compensation
agreements, plans and programs of the Company may be considered to be a
parachute payment or excess parachute payment under section 280G of the
Internal Revenue Code of 1986, as amended (the "Code"). In the event that any
such compensation is deemed to constitute an excess parachute payment that is
subject to tax under Section 4999 of the Code or any successor provision
thereto (the "Excise Tax"), the Company shall pay to the Executive an
additional amount (the "Gross-Up Amount") that, after payment of all Federal
and state income taxes thereof (assuming the Executive is at the highest
marginal federal and applicable state income tax rate in effect on the date of
payment of the Gross-Up Amount) and payment of the Excise Tax on the Gross-Up
Amount, is equal to the Excise Tax payable by the Executive on such excess
parachute payment. The Gross-Up Amount payable with respect to each excess
parachute payment shall be paid by the Company coincident with payment of such
excess parachute payment.
11. No Cumulation or Duplication of Benefits. The obligations of the Company
to make payments or provide benefits hereunder are the joint and several
obligations of the Company and the Company Units. Accordingly, if following
the termination or Constructive Termination of the Executive's employment the
Executive receives any form of compensation payments or benefits from the
Company or any Company Unit or from a successor thereto or affiliate thereof,
the amount of any such compensation or payment together with the fair market
value of any such benefits shall be deducted from any obligation of the
Company or applicable Company Unit to make payments or provide benefits to the
Executive under or by reason of this Agreement.
12. Reduction of Payments. Notwithstanding anything contained herein to the
contrary, any amounts payable hereunder shall be reduced by such amount as may
be necessary to make this agreement not unlawful under federal law.
13. Amendment. This Agreement may be amended by written agreement of the
parties without the consent of any other person and no person, other than the
parties hereto, shall have any rights under or interest in this Agreement or
the subject matter hereof.
14. Extension. The Board of Directors of GATX may, at any time prior to the
expiration or termination of this Agreement, extend the term of this Agreement
for a
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period of up to two (2) years from the date on which the extension is
approved, without any further action on the part of the Executive.
15. Successors. This Agreement shall be binding upon, and inure to the benefit
of, the heirs, executors and legal representatives of the Executive and the
successors and assigns of the Company and upon any person acquiring, whether
by merger, consolidation, purchase of assets or otherwise, all or
substantially all of the assets and business of any Company Unit. The Company
agrees that it will not effect the sale or other disposition of all or
substantially all of its assets unless either (a) the person or entity
acquiring the assets or a substantial portion of the assets shall expressly
assume by an instrument in writing all duties and obligations of the Company
under this Agreement or (b) the Company shall provide through the
establishment of a separate reserve for the payment in full of all amounts
that are or may be reasonably expected to become payable to the Executive
under this Agreement.
16. Nonwaiver. The waiver by either party of a breach of this Agreement
shall not be construed as a waiver of any subsequent breach.
17. Resolution of Disputes. Any controversy or claim arising out of or
relating to this Agreement or the alleged breach thereof, shall be settled by
arbitration in the City of Chicago, Illinois in accordance with the laws of
the State of Illinois b arbitrators, one of whom shall be appointed by the
Company or any successor thereto, one by the Executive and the third by the
other two. If the other two arbitrators cannot agree on the appointment of a
third arbitrator, or if either party fails within thirty (30) days after
receipt of written demand to appoint an arbitrator, then such arbitrator shall
be appointed by the Xxxx of the Business School of the University of Chicago
or his delegate. The arbitration shall be conducted in accordance with the
rules of the American Arbitration Association, except with respect to the
selection of arbitrators, which shall be as provided in this paragraph 17.
Judgment upon the award rendered by the arbitrators may be entered in any
court having jurisdiction thereof. In the event that it shall be necessary or
desirable for the Executive to retain legal counsel and/or incur other costs
and expenses in connection with the enforcement of any and all of his rights
under this Agreement, the Executive shall be entitled to recover from the
Company reasonable attorney's fees and costs and expenses incurred by the
Executive in connection with the enforcement of said rights. Payments shall be
made to the Executive by the Company at the time these attorney's fees and
costs and expenses are incurred by the Executive. If, however, the arbitrators
should later determine that under the circumstances it was unjust for the
Company to have made any of these payments of attorney's fees and costs and
expenses to the Executive, the Executive shall repay any such payments to the
Company in accordance with the order of the arbitrators. Any award of the
arbitrators shall include interest at a rate or rates considered just under
the circumstances by the arbitrators.
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18. Termination of Agreement. This agreement shall terminate on December 31,
1997, provided, however, if prior to such date, but after January 1, 1996,
there shall occur either (a) a Change of Control or (b) a Disposition of a
Company Unit by which the Executive is primarily employed on the day prior to
such Disposition, this agreement shall remain in effect until two years
following the date of the first to occur of such Change of Control or
Disposition. Notwithstanding the foregoing, the agreement shall terminate in
the event that (under circumstances not constituting Constructive Termination)
during the Employment Period the Executive ceases to be an officer of GATX or
the President (or Chairman of the Board) of a wholly-owned subsidiary of GATX.
Termination of this Agreement shall not affect any rights that shall have
accrued to the Executive under this Agreement prior to the termination date.
IN WITNESS WHEREOF, the Executive has hereunto set his hand, and GATX has
caused these presents to be executed in its name and on its behalf, and its
corporate seal to be hereunto affixed and attested by its Assistant Secretary.
/s/ Xxxxx X. Xxxxxx
-----------------------------------
Executive
GATX CORPORATION
By /s/ Xxxxx X. Xxxxxxx
------------------------------------
Its Chairman of the Board
February 1, 1996
-----------------------------------
(Execution Date)
ATTEST:
/s/ Xxxxx Xxxxxxxx
----------------------------------
Its Assistant Secretary
