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Exhibit10(b)
AMENDMENT TO CHANGE OF CONTROL AGREEMENT
THIS AMENDMENT is dated this 18th day of October, 2001 and is
entered into between XXXXXXXX & XXXXXX CORPORATION (the "Company") and
_________________ (the "Executive").
WHEREAS, the Compensation and Human Resources Committee of the
Company (the "Committee") determined at its meeting on October 18, 2001
that the Change of Control Agreement between the Company and the Executive
dated __________________ (the "Agreement") should be amended to provide a
gross-up payment to the Executive in the event certain payments to the
Executive as a result of a Change of Control of the Company are subject to
an excise tax; and
WHEREAS, the Committee, realizing the cost of the gross-up payment
to the Company, wishes to limit the circumstances under which such a
gross-up payment will be paid to cases in which the required reduction in
payments to the Executive in order to avoid the excise tax are greater
than $50,000.
NOW, THEREFORE, the parties hereto hereby agree as follows.
1. Replacement of Section 8. Section 8 of the Agreement is hereby
deleted in its entirety and replaced with the following:
"8. Excise Tax Payments.
(a) If any payment or distribution to or for the benefit of
the Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement or otherwise
in connection with, or arising out of, his employment with the
Company (a "Payment" or "Payments"), would be subject to the excise
tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), or any interest or penalties are incurred by
the Executive with respect to such excise tax (such excise tax,
together with any interest and penalties, are collectively referred
to as the "Excise Tax"), then the Executive shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount
such that after payment by the Executive of all taxes (including any
interest or penalties imposed with respect to such taxes), including
any Excise Tax, imposed upon the Gross-Up Payment, the Executive
retains, or has paid to the taxing authority on his behalf, an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments. Notwithstanding the foregoing, no Gross-Up Payment
will be made to the Executive if reducing the amount paid to the
Executive under Section 6(a)(i)(B) of this Agreement by $50,000 or
less would avoid the application of the Excise Tax.
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(b) A determination shall be made as to whether and when a
Gross-Up Payment is required pursuant to this Section 8 and the
amount of such Gross-Up Payment, such determination to be made
within fifteen (15) business days of the Termination Date, or such
other time as reasonably requested by the Company or by the
Executive (provided the Executive reasonably believes that any of
the Payments may be subject to the Excise Tax). Such determination
shall be made by a national independent accounting firm selected by
the Executive (the "Accounting Firm"). All fees, costs and expenses
(including, but not limited to, the cost of retaining experts) of
the Accounting Firm shall be borne by the Company and the Company
shall pay such fees, costs and expenses as they become due. The
Accounting Firm shall provide detailed supporting calculations,
acceptable to the Executive, both to the Company and the Executive.
The Gross-Up Payment, if any, as determined pursuant to this Section
8(b) shall be paid by the Company to the Executive or paid by the
Company on behalf of the Executive to the applicable government
taxing authorities by means of payroll tax withholding if required
by law or if timely requested by the Executive when payment of all
or any portion of the Excise Tax is due. If the Accounting Firm
determines that no Excise Tax is payable by the Executive with
respect to a Payment or Payments, it shall furnish the Executive
with an unqualified opinion that no Excise Tax will be imposed with
respect to any such Payment or Payments. Any such initial
determination by the Accounting Firm of the Gross-Up Payment shall
be binding upon the Company and the Executive subject to the
application of Section 8(c).
(c) As a result of the uncertainty in the application of
Sections 4999 and 280G of the Code, it is possible that a Gross-Up
Payment (or a portion thereof) will be paid which should not have
been paid (an "Overpayment") or a Gross-Up Payment (or a portion
thereof) which should have been paid will not have been paid (an
"Underpayment"). An Underpayment shall be deemed to have occurred
upon notice (formal or informal) to the Executive from any
governmental taxing authority that the tax liability of the
Executive (whether in respect of the then current taxable year of
the Executive or in respect of any prior taxable year of the
Executive) may be increased by reason of the imposition of the
Excise Tax on a Payment or Payments with respect to which the
Company has failed to make a sufficient Gross-Up Payment. An
Overpayment shall be deemed to have occurred upon a "Final
Determination" (as hereinafter defined) that the Excise Tax shall
not be imposed upon a Payment or Payments with respect to which the
Executive had previously received a Gross-Up Payment. A Final
Determination shall be deemed to have occurred when the Executive
has received from the applicable governmental taxing authority a
refund of taxes or other reduction in his tax liability by reason of
the Overpayment and upon either (i) the date a determination is made
by, or an agreement is entered into with, the applicable
governmental taxing authority which finally and conclusively binds
the Executive and such taxing authority, or in the event that a
claim is brought before a court of competent jurisdiction, the date
upon which a final determination has been made by such court and
either all appeals have been taken and finally resolved or the time
for all appeals has expired or (ii) the expiration of the statute of
limitations with respect to the Executive's applicable tax return.
If an Underpayment occurs, the Executive shall promptly notify the
Company and the Company shall pay to the Executive at least five (5)
business days prior to the date on which the applicable governmental
taxing authority has requested payment, an additional Gross-Up
Payment equal to the amount of the Underpayment plus any interest
and penalties imposed on the Underpayment. If an Overpayment
occurs, the amount of the Overpayment shall be treated as a loan by
the Company to the Executive and the Executive shall, within ten
(10) business days of the occurrence of such Overpayment, pay to the
Company the amount of the Overpayment plus interest at an annual
rate equal to the rate provided for in Section 1274(b)(2)(B) of the
Code from the date the Gross-Up Payment (to which the Overpayment
relates) was paid to the Executive.
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(d) If no Gross-Up Payment is made because reducing the
Payments to the Executive under Section 6(a)(i)(B) of this Agreement
by $50,000 or less would avoid the application of the Excise Tax,
then the amount paid to the Executive under Section 6(a)(i)(B) of
this Agreement shall be reduced by the amount necessary to avoid the
Excise Tax; provided, however, the reduction will only be made if
doing so would result in the Executive retaining more after-tax than
if the reduction were not made."
2. In General. Except as amended hereby, the Agreement shall
remain in full force and effect.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Executive has executed
this Agreement as of the day and year first above written.
XXXXXXXX & XXXXXX CORPORATION
By:
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx, Chairman
ATTEST:
/s/ Xxxx X. Xxxxxxx
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Xxxx X. Xxxxxxx, Secretary
EXECUTIVE:
/s/ Executive
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Executive
Address:
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COC Amendment.doc
