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EXHIBIT 10.24
TERMINATION AND CHANGE OF CONTROL AGREEMENT
THIS TERMINATION AND CHANGE OF CONTROL AGREEMENT ("Termination
Agreement") is dated as of the 16 day of August, 1996, by and between WALBRO
CORPORATION, a Delaware corporation (the "Company") and Xxxxxx X. Xxxxxxx
("Executive"), and shall become effective as of August 16 , 1996 (the
"Effective Date").
W I T N E S S E T H
The Board of Directors of the Company (the "Board") has determined that
it is in the best interests of the Company and its shareholders to assure that
the Company will have the continued dedication of the Executive,
notwithstanding the possibility, threat or occurrence of a Change of Control
(as defined below) of the Company. The Board believes it is imperative to
diminish the inevitable distraction of the Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change of Control
and to encourage the Executive's full attention and dedication to the Company
currently and in the event of any threatened or pending Change of Control, and
to provide the Executive with compensation and benefits arrangements upon a
Change of Control which ensure that the compensation and benefits expectations
of the Executive will be satisfied and which are competitive with those of
other corporations. Therefore, in order to accomplish these objectives, the
Board has caused the Company to enter into this Termination Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Term and Application. The Term of this Termination Agreement shall
be the same (subject to earlier termination in accordance with Section 5) as
for the Employment Agreement between the Company and the Executive ("Employment
Agreement"); provided, however, notwithstanding the term of the Employment
Agreement, on or after the Extension Date (as defined in Section 9(d) of this
Termination Agreement), the Term of this Termination Agreement shall be the
Extended Employment Period (as defined in the Employment Agreement).
Notwithstanding the Employment Agreement, the terms and provisions of this
Termination Agreement shall also apply on and after the Extension Date; where
specifically in conflict with the Employment Agreement, shall supersede the
Employment Agreement; and in no event shall Executive receive benefits under
both this Termination Agreement and the Employment Agreement with respect to
the same Date of Termination.
2. Office and Duties.
(a) Generally. During the Extended Employment Period, the Executive's
position (including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least commensurate in all
material respects with the most significant of those held, exercised and
assigned at any time during the 120-day period immediately preceding the
Extension Date.
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During the Extended Employment Period it shall not be a violation of
the Employment Agreement for the Executive to (i) serve on corporate, civic or
charitable boards or committees, (ii) deliver lectures, fulfill speaking
engagements or teach at educational institutions, and (iii) manage personal
investments, so long as such activities do not significantly interfere with the
performance of the Executive's responsibilities as an employee of the Company
in accordance with this Termination Agreement. It is expressly understood and
agreed that, to the extent that any activities have been conducted by the
Executive prior to the Extension Date, the continued conduct of such activities
(or the conduct of activities similar in nature and scope thereto) subsequent
to the Extension Date shall not thereafter be deemed to interfere with the
performance of the Executive's responsibilities to the Company.
(b) Place of Employment. During the Extended Employment Period, the
Executive's services shall be performed at the location where the Executive was
employed immediately preceding the Extension Date or any office or location
less than fifty (50) miles from such location.
3. Salary and Annual Incentive Compensation.
(a) Base Salary. During the Extended Employment Period, the Executive
shall receive an Annual Base Salary, which shall be paid at a monthly rate, at
least equal to twelve (12) times the highest monthly base salary paid or
payable, including any base salary which has been earned but deferred, to the
Executive by the Company and its affiliated companies in respect of the
12-month period immediately preceding the month in which the Extension Date
occurs. During the Extended Employment Period, the Annual Base Salary shall be
reviewed no more than twelve (12) months after the last salary increase awarded
to the Executive prior to the Extension Date and thereafter at least annually.
Any increase in Annual Base Salary shall not serve to limit or reduce any other
obligation to the Executive under this Termination Agreement. Annual Base
Salary shall not be reduced after any such increase and the term Annual Base
Salary as utilized in this Termination Agreement shall refer to Annual Base
Salary as so increased. As used in this Termination Agreement, the term
"affiliated companies" shall include any company controlled by, controlling or
under common control with the Company.
(b) Annual Incentive Compensation. During the Extended Employment
Period, any annual incentive compensation payable to Executive shall be paid in
accordance with the Company's usual practices with respect to payment of
incentive compensation of senior executives (except to the extent deferred). In
addition to Annual Base Salary, the Executive shall be awarded, for each fiscal
year ending during the Extended Employment Period, an annual bonus (the "Annual
Bonus") in cash at least equal to the Executive's highest annual incentive
compensation for the last three full fiscal years prior to the Extension Date
(annualized in the event that the Executive was not employed by the Company for
the whole of such fiscal year) (the "Recent Annual Bonus"). Each such Annual
Bonus shall be paid no later than the end of the third month of the fiscal year
next following the fiscal year for which the Annual Bonus is awarded, unless
the Executive shall elect to defer the receipt of such Annual Bonus.
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4. Long-Term Compensation, Including Stock Options, and
Benefits, Deferred Compensation, and Expense Reimbursement.
(a) Executive Compensation Plans. During the Extended Employment
Period, the compensation plans, practices, policies and programs, in the
aggregate, including without limitation, the long-term incentive features of
the Company's Equity Based Long Term Incentive Plan (the "EBP"), shall provide
Executive with benefits, options to acquire Common Stock, and compensation and
incentive award opportunities no less favorable than those provided by the
Company under such plans and programs to senior executives in similar
capacities. During the Extended Employment Period, in no event shall such
plans, practices, policies and programs provide the Executive with incentive
opportunities (measured with respect to both regular and special incentive
opportunities, to the extent, if any, that such distinction is applicable), in
each case, be less favorable, in the aggregate, than the most favorable of
those provided by the Company and its affiliated companies for the Executive
under such plans, practices, policies and programs as in effect at any time
during the 120-day period immediately preceding the Extension Date or if more
favorable to the Executive, those provided generally at any time after the
Extension Date to other peer executives of the Company and its affiliated
companies. For purposes of this Termination Agreement, all references to
"performance share plans" and "performance shares" refer to such arrangements
under the EBP and to any performance shares, performance units, stock grants,
or other long-term incentive arrangements adopted as a successor or replacement
to performance shares under such plans or other plans of the Company.
(b) Employee and Executive Benefit Plans. During the Extended
Employment Period, benefit plans and programs, in the aggregate, shall provide
Executive with benefits no less favorable than those provided by the Company to
senior executives in similar capacities. During the Extended Employment
Period, in no event shall such plans, practices, policies and programs provide
the Executive with benefits which are less favorable, in the aggregate, than
the most favorable of such plans, practices, policies and programs in effect
for the Executive at any time during the 120-day period immediately preceding
the Extension Date or, if more favorable to the Executive, those provided
generally at any time after the Extension Date to other peer executives of the
Company and its affiliated companies.
5. Termination of Employment.
(a) Death or Disability. The Executive's employment shall terminate
automatically upon the Executive's death during the Term of this Termination
Agreement. If the Company determines in good faith that the Disability of the
Executive has occurred during the Term of this Termination Agreement, it may
give to the Executive written notice in accordance with Section 13(d) of this
Termination Agreement of its intention to terminate the Executive's employment.
In such event, the Executive's Date of Termination is effective on the 30th day
after receipt of such notice by the Executive (the "Disability Effective
Date"), provided that, within the thirty (30) days after such receipt, the
Executive shall not have returned to full-time performance of the Executive's
duties.
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(b) Notice of Termination. Any termination by the Company for Cause,
or by the Executive for Good Reason, shall be communicated by Notice of
Termination to the other party hereto given in accordance with Section 13(d) of
this Termination Agreement. For purposes of this Termination Agreement, a
"Notice of Termination" means a written notice which (i) indicates the specific
termination provision in this Termination Agreement relied upon, (ii) to the
extent applicable, sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated and (iii) if the Date of Termination (as defined
below) is other than the date of receipt of such notice, specifies the Date of
Termination (which date shall be not more than thirty (30) days after the
giving of such notice). The failure by the Executive or the Company to set
forth in the Notice of Termination any fact or circumstance which contributes
to a showing of Good Reason or Cause shall not waive any right of the Executive
or the Company, respectively, hereunder or preclude the Executive or the
Company, respectively, from asserting such fact or circumstance in enforcing
the Executive's or the Company's rights hereunder.
(c) Date of Termination. "Date of Termination" means (i) if the
Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive that the Executive's employment will terminate, (iii) if the
Executive's employment is terminated by reason of death or Disability, or due
to mutually agreed upon early retirement or Normal Retirement other than for
Good Reason, the Date of Termination shall be the date of death of the
Executive, the Disability Effective Date, or the date the Executive notifies
the Company that the Executive's employment will terminate, as the case may be,
and (iv) if the Executive's employment is terminated by the Company by reason
of not renewing the Term of this Termination Agreement for reasons other than
Cause, the Date of Termination shall be the last day of the Term of this
Termination Agreement. Notwithstanding the foregoing, solely the transfer of
an Executive to employment with an affiliated company shall not constitute a
termination of employment with the Company.
6. Termination Due to Normal Retirement, Approved Early
Retirement, Death, or Disability.
Upon an Executive's Date of Termination due to a voluntary decision by
the Executive to retire on or after the Executive's Normal Retirement Date
(other than for Good Reason) or a mutually agreed upon early retirement date,
death or Disability, the Term of this Termination Agreement will immediately
terminate and all obligations of the Company and Executive under this
Termination Agreement and under the Employment Agreement will immediately
cease; provided, however, that subject to the provisions of Section 13(c), the
Company will pay Executive (or his beneficiaries or estate), and Executive (or
his beneficiaries or
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estate) will be entitled to receive, the following:
(a) The unpaid portion of Annual Base Salary at the rate payable, in
accordance with Section 3(a) hereof, at the Date of Termination, pro rated
through such Date of Termination, will be paid;
(b) All vested, nonforfeitable amounts owing and accrued at the Date of
Termination under any compensation and benefit plans, programs, and
arrangements in which Executive theretofore participated (including any earned
annual incentive compensation and performance shares) will be paid under the
terms and conditions of the plans, programs, and arrangements (and agreements
and documents thereunder) pursuant to which such compensation and benefits were
granted, including a single lump sum amount equal to the actuarial equivalent
(determined in accordance with Section 5 of the Employment Agreement) of the
benefit under the Company's nonqualified supplemental employee retirement plan
("SERP");
(c) In lieu of any annual incentive compensation under Section 3(b) for
the year in which Executive's employment terminated (unless otherwise payable
under (b) above), Executive will be paid an amount equal to the average annual
incentive compensation paid to Executive in the three years immediately
preceding the year of termination (or, if Executive was not eligible to receive
or did not receive such incentive compensation for any year in such three year
period, the Executive's target annual incentive compensation for such year(s)
shall be used to calculate average annual incentive compensation) multiplied by
a fraction the numerator of which is the number of days Executive was employed
in the year of termination and the denominator of which is the total number of
days in the year of termination;
(d) Stock options then held by Executive will be exercisable to the
extent and for such periods, and otherwise governed, by the plans and programs
and the agreements and other documents thereunder pursuant to which such stock
options were granted; provided, however, that the stock options described in
Section 5 of the Employment Agreement shall be exercisable to the extent and
for such periods, and otherwise governed by, the provisions of Section 5 of the
Employment Agreement;
(e) All deferral arrangements under the Employment Agreement will be
settled in accordance with the provisions of Section 5 of the Employment
Agreement and the Executive's duly executed Deferral Election Forms; and
(f) If Executive's Date of Termination is due to Disability, for the
period extending from such Date of Termination until Executive reaches age 65,
Executive shall continue to participate in all employee benefit plans,
programs, and arrangements providing health, medical, and life insurance in
which Executive was participating immediately prior to the Date of Termination,
the terms of which allow Executive's continued participation, as if Executive
had continued in employment with the Company during such period or, if such
plans, programs, or arrangements do not allow Executive's continued
participation, a cash payment equivalent on an after-tax basis to the value of
the additional benefits Executive would have received under such
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employee benefit plans, programs, and arrangements in which Executive
was participating immediately prior to the Date of Termination, as if Executive
had received credit under such plans, programs, and arrangements for service
and age with the Company during such period following Executive's Date of
Termination, with such benefits payable by the Company at the same times and in
the same manner as such benefits would have been received by Executive under
such plans (it being understood that the value of any insurance-provided
benefits will be based on the premium cost to Executive, which shall not exceed
the highest risk premium charged by a carrier having an investment grade or
better credit rating).
Amounts which are immediately payable above will be paid as promptly as
practicable after Executive's Date of Termination; provided, however, to the
extent that or the Company would not be entitled to deduct any such payments
under Internal Revenue Code Section 162(m), such payments shall be made at the
earliest time that the payments would be deductible by the Company without
limitation under Section 162(m) (unless this provision is waived by the
Company).
7. Termination of Employment for Cause and Good Reason.
(a) Termination by the Company for Cause and Termination by Executive
for Reasons Other Than Normal Retirement, Approved Early Retirement, Death or
Disability. Upon an Executive's Date of Termination by the Company for Cause
or voluntarily by Executive for reasons other than Good Reason, but excluding
termination due to Normal Retirement, mutually agreed upon early retirement,
death or Disability, the Term will immediately terminate, and all obligations
of the Company under Sections 1 through 4 of this Termination Agreement and
under the Employment Agreement will immediately cease; provided, however, that
subject to the provisions of Section 13(c), the Company shall pay Executive (or
his or her beneficiaries), and Executive (or his or her beneficiaries) shall be
entitled to receive, the following:
(i) The unpaid portion of Annual Base Salary at the rate
payable, in accordance with Section 4(a) hereof, at
the Date of Termination, pro rated through such Date of
Termination, will be paid;
(ii) All vested, nonforfeitable amounts owing and accrued at
the Date of Termination under any compensation
and benefit plans, programs, and arrangements in which
Executive theretofore participated will be paid under
the terms and conditions of the plans, programs, and
arrangements (and agreements and documents thereunder)
pursuant to which such compensation and benefits were
granted; and
(iii) A cash amount equal to the value at the Date of
Termination of any phantom shares of Common Stock
credited to Executive's deferral accounts under
deferral arrangements authorized under the Employment
Agreement at the Date of Termination, less applicable
withholding taxes under
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Section 14(i) of the Employment Agreement; provided,
however, that the Company may instead settle such
accounts, in full or in part, by directing the Trustee
to distribute the assets of the "rabbi trust" and the
Company shall be relieved of its obligation under this
Termination Agreement and the Employment Agreement to
the extent that assets are so distributed. Such amounts
shall be paid or distributed as promptly as practicable
following such Date of Termination, without regard to
any stated period of deferral otherwise remaining in
respect of such amounts, and the payment of such amounts
shall be deemed to fully settle such accounts.
Amounts which are immediately payable above will be paid as promptly as
practicable after the Executive's Date of Termination; provided, however, to
the extent that the Company would not be entitled to deduct any such payments
under Internal Revenue Code Section 162(m), such payments shall be made at the
earliest time that the payments would be deductible by the Company without
limitation under Section 162(m) (unless this provision is waived by the
Company).
(b) Termination by the Company Without Cause and Termination by
Executive for Good Reason. Upon an Executive's Date of Termination prior to
the Extension Date without Cause (including non-renewal of the Term of this
Termination Agreement without Cause) or voluntarily by the Executive for Good
Reason, the Term will terminate and all obligations of the Company and
Executive under Sections 1 through 4 of this Termination Agreement and under
the Employment Agreement will immediately cease; provided, however, that
subject to the provisions of Section 13(c) the Company shall pay to the
Executive (or his or her beneficiaries) and Executive (or his or her
beneficiaries) shall be entitled to receive the following amounts:
(i) the Company shall pay to Executive
within, or commencing within, thirty (30) days after the
Date of Termination, the following amounts:
(A) the sum of (1) the Executive's Annual Base Salary
through the Date of Termination to the
extent not theretofore paid, and (2) the product
of (x) the target Annual Bonus paid or payable,
including any bonus or portion thereof which has
been earned but deferred (and annualized for any
fiscal year consisting of less than twelve (12)
full months or during which the Executive was
employed for less than twelve (12) full months)
for the fiscal year, and (y) a fraction, the
numerator of which is the number of days in the
current fiscal year through the Date of
Termination, and the denominator of which is 365,
in each case to the extent not theretofore paid;
(B) twenty-four (24) semi-monthly payments during a
twelve (12) consecutive month period equal to the
Executive's Annual Base Salary divided by
twenty-four (24); provided, however,
notwithstanding anything to the contrary in the
Termination Agreement or in the Employment
Agreement, none of such amounts shall qualify
Executive for any incremental benefit under any
plan or program in which he has participated or
continues to participate;
(C) a single lump sum amount equal to the actuarial
equivalent (determined in accordance with Section
5(b)(iv) of the Employment Agreement) of the
benefit under the SERP;
(D) a cash amount will be paid equal to the value at
the Date of Termination of any phantom shares
of Common Stock credited to Executive's deferral
accounts under deferral arrangements authorized
under the Employment Agreement at the Date of
Termination, less applicable withholding taxes
under Section 14(i) of the Employment Agreement;
provided, however, that the Company may instead
settle such accounts by directing the Trustee to
distribute the assets of the "rabbi trust" and the
Company shall be relieved of its obligation under
this Termination Agreement and the Employment
Agreement to the extent that assets are so
distributed. Such amounts shall be paid or
distributed as promptly as practicable following
such Date of Termination, without regard to any
stated period of deferral otherwise remaining in
respect of such amounts, and the payment of such
amounts shall be deemed to fully settle such
accounts; and
(E) to the extent not covered by (A), (B), (C) or (D)
above, all vested, nonforfeitable amounts owing
and accrued at the Date of Termination under any
compensation and benefit plans, programs, and
arrangements in which Executive theretofore
participated will be paid under the terms and
conditions of the plans, programs, and
arrangements (and agreements and documents
thereunder) pursuant to which such compensation
and benefits were granted; and
(ii) stock options then held by Executive will be
exercisable to the extent and for such periods, and
otherwise governed, by
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the plans and programs and the agreements and other
documents thereunder pursuant to which such stock
options were granted; provided, however, that the stock
options described in Section 5 of the Employment
Agreement shall be exercisable to the extent and for
such periods, and otherwise governed by, the provisions
of Section 5 of the Employment Agreement.
Amounts which are immediately payable above will be paid as promptly as
practicable after Executive's Date of Termination; provided, however, to the
extent that the Company would not be entitled to deduct any such payments under
Internal Revenue Code Section 162(m), such payments shall be made at the
earliest time that the payments would be deductible by the Company without
limitation under Section 162(m) (unless this provision is waived by the
Company).
8. Termination by the Company Without Cause and Termination by
Executive for Goof Reason During the Extended Employment Period.
Upon an Executive's Date of Termination during the Extended Employment
Period by the Company without Cause (other than for non-renewal of the Term of
the Employment Agreement) or voluntarily by the Executive for Good Reason, the
Term of this Termination Agreement will immediately terminate and all
obligations of the Company and Executive under Sections 1 through 5 of this
Termination Agreement and under the Employment Agreement will immediately
cease; provided, however, that subject to the provisions of Section 13(c) the
Company shall pay Executive (or his or her beneficiaries), and Executive (or
his or her beneficiaries) shall be entitled to receive, the following:
(a) the Company shall pay to the Executive in a lump sum in cash within
thirty (30) days after the Date of Termination the aggregate of the following
amounts:
(i) the sum of (1) the Executive's Annual Base Salary
through the Date of Termination to the extent not
theretofore paid, and (2) the product of (x) the higher
of (I) the Recent Annual Bonus and (II) the Annual Bonus
paid or payable, assuming full satisfaction of any
performance standards or targets applicable to
determining the maximum amount payable, including any
bonus or portion thereof which has been earned but
deferred (and annualized for any fiscal year consisting
of less than twelve (12) full months or during
which the Executive was employed for less than twelve
(12) full months), for the most recently completed
fiscal year during the Extended Employment Period, if
any (such higher amount being referred to as the
"Highest Annual Bonus") and (y) a fraction, the
numerator of which is the number of days in the current
fiscal year through the Date of Termination, and the
denominator of which is 365;
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(ii) the amount equal to the product of (1) three and
(2) the sum of (x) the Executive's Annual Base Salary
and (y) the Highest Annual Bonus;
(iii) an amount equal to the actuarial equivalent (determined
in accordance with Section 5 of the Employment
Agreement) of the benefit under the SERP which the
Executive would receive assuming for this purpose that
the Executive's employment continued for three (3) years
after the Date of Termination and assuming that the
Executive's compensation in each of the three years is
that required by Section 3;
(iv) in lieu of any payment in respect of performance
shares, or other long term incentive awards (including
awards of phantom shares under the EBP) granted prior to
the Extension Date or in accordance with Section 4(a),
for any performance period not completed at the
Executive's Date of Termination, an amount equal to the
cash amount payable plus the value of any shares of
Common Stock or other property (valued at the Date of
Termination) payable upon the achievement of maximum
performance (or in the case of phantom shares, target
performance under the EBP) in respect of each tranche of
such performance shares or awards without proration as
if the Date of Termination were the end of the
performance period;
(v) a cash amount will be paid equal to the value at the
Date of Termination of any phantom shares of Common
Stock credited to Executive's deferral accounts under
deferral arrangements authorized under the Employment
Agreement at the Date of Termination, less applicable
withholding taxes under Section 14(i) of the Employment
Agreement; provided, however, that the Company may
instead settle such accounts by directing the Trustee to
distribute the assets of the "rabbi trust" and the
Company shall be relieved of its obligation under this
Employment Agreement and the Termination Agreement to
the extent that assets are so distributed. Such amounts
shall be paid or distributed as promptly as practicable
following such Date of Termination, without regard to
any stated period of deferral otherwise remaining in
respect of such amounts, and the payment of such amounts
shall be deemed to fully settle such accounts; and
(vi) to the extent not covered in (i), (ii), (iii), (iv) or
(v), all vested, nonforfeitable amounts owing or accrued
at the Date of
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Termination under any other compensation and benefit
plans, programs, and arrangements in which Executive
theretofore participated will be paid under the terms
and conditions of the plans, programs, and arrangements
(and agreements and documents thereunder) pursuant to
which such compensation and benefits were granted.
(b) Stock options then held by Executive will be exercisable and
restricted stock held by the Executive will be vested to the extent and for
such periods, and otherwise governed, by the plans and programs (and the
agreements and other documents thereunder) pursuant to which such stock options
or restricted stock were granted; provided, however, that the stock options and
restricted stock described in Section 5 of the Employment Agreement shall be
fully vested and shall be exercisable to the extent and for such periods, and
otherwise governed by, the provisions of Section 5 of the Employment Agreement.
(c) For three (3) years after the Executive's Date of Termination, or
such longer period as may be provided by the terms of the appropriate plan,
program, practice or policy, the Company shall continue welfare plan benefits
to the Executive and/or the Executive's family at least equal to those which
would have been provided to them in accordance with the plans, programs,
practices and policies described in Section 4(b) of this Termination Agreement
if the Executive's employment had not been terminated or, if more favorable to
the Executive, as in effect generally at any time thereafter with respect to
other peer executives of the Company and its affiliated companies and their
families, provided, however, that if the Executive becomes reemployed with
another employer and is eligible to receive medical or other welfare benefits
under another employer-provided plan, the medical and other welfare benefits
described herein shall be secondary to those provided under such other plan
during such applicable period of eligibility. If such plans, programs, or
arrangements do not allow Executive's continued participation, a cash payment
equivalent on an after-tax basis to the value of the additional benefits
Executive would have received under such employee benefit plans, programs, and
arrangements in which Executive was participating immediately prior to the Date
of Termination, as if Executive had received credit under such plans, programs,
and arrangements for service and age with the Company during such period
following Executive's Date of Termination, with such benefits payable by the
Company at the same times and in the same manner as such benefits would have
been received by Executive under such plans (it being understood that the value
of any insurance-provided benefits will be based on the premium cost to
Executive, which shall not exceed the highest risk premium charged by a carrier
having an investment grade or better credit rating); and
(d) outplacement services the scope and provider of which shall be
selected by the Executive in his sole discretion, provided by the Company at
its sole expense as incurred.
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9. Definitions Relating to Termination Events.
(a) "Cause." For purposes of this Termination Agreement, "Cause" shall
mean Executive's gross misconduct (as defined herein) or willful and material
breach of Section 11 of this Termination Agreement. For purposes of this
definition, "gross misconduct" shall mean (A) a felony conviction in a court of
law under applicable federal or state laws which results in material damage to
the Company or any of its subsidiaries or materially impairs the value of
Executive's services to the Company, or (B) willfully engaging in one or more
acts, or willfully omitting to act in accordance with duties hereunder, which
is demonstrably and materially damaging to the Company or any of its
subsidiaries, including acts and omissions that constitute gross negligence in
the performance of Executive's duties under this Termination Agreement. For
purposes of this Termination Agreement and the Employment Agreement, an act or
failure to act on Executive's part shall be considered "willful" if it was done
or omitted to be done by him not in good faith, and shall not include any act
or failure to act resulting from any incapacity of Executive. Notwithstanding
the foregoing, Executive may not be terminated for Cause unless and until (1)
the Executive shall have committed acts which constitute Cause as set forth in
this Section 9(a), and (2) there shall have been delivered to him a copy of a
resolution duly adopted by a seventy-five percent (75%) affirmative vote of the
membership of the Board of Directors of the Company (the "Board") (excluding
Executive, if he is then a member) at a meeting of the Board called and held
for such purpose (after giving Executive reasonable notice specifying the
nature of the grounds for such termination and not less than 30 days to correct
the acts or omissions complained of, if correctable, and affording Executive
the opportunity, together with his counsel, to be heard before the Board)
finding that Executive was guilty of conduct which constitutes Cause as set
forth in this Section 9(a).
(b) "Change of Control." For the purpose of this Termination
Agreement, a "Change of Control" shall mean:
(i) The acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of twenty percent (20%) or more of either
(A) the then-outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or (B)
the combined voting power of the then-outstanding voting
securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company
Voting Securities"); provided, however, that for
purposes of this subsection (i), the following
acquisitions shall not constitute a Change of Control:
(A) any acquisition directly from the Company, (B) any
acquisition by the Company, (C) any acquisition by any
employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled
by the Company, (D) any acquisition by a lender to the
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Company pursuant to a debt restructuring of the Company,
or (E) any acquisition by any corporation
pursuant to a transaction which complies with clauses
(A), (B) and (C) of subsection (iii) of this Section 9;
(ii) Individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of the Board; provided,
however, that any individual becoming a director
subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders,
was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be
considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose,
any such individual whose initial assumption of office
occurs as a result of an actual or threatened election
contest with respect to the election or removal of
directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other
than the Board;
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a
"Business Combination"), in each case, unless, following
such Business Combination, (A) all or substantially all
of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities
immediately prior to such Business Combination
beneficially own, directly or indirectly, more than
fifty percent (50%) of, respectively, the
then-outstanding shares of common stock and the combined
voting power of the then outstanding voting securities
entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting from
such Business Combination (including, without
limitation, a corporation which as a result of such
transaction owns the Company or all or substantially all
of the Company's assets either directly or through one
or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to
such Business Combination of the Outstanding Company
Common Stock and Outstanding Company Voting Securities,
as the case may be, (B) no Person (excluding any
corporation resulting from such Business
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Combination or any employee benefit plan (or related
trust) of the Company or such corporation resulting
from such Business Combination) beneficially owns,
directly or indirectly, twenty percent (20%) or more of,
respectively, the then outstanding shares of common
stock of the corporation resulting from such Business
Combination, or the combined voting power of the then
outstanding voting securities of such corporation
except to the extent that such ownership existed prior
to the Business Combination and (C) at least a majority
of the members of the board of directors of the
corporation resulting from such Business Combination
were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of
the Board, providing for such Business Combination; or
(iv) Approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
(c) "Disability" means the failure of Executive to render and perform
the services required of him under this Termination Agreement, for a total of
180 days or more during any consecutive 12 month period, because of any
physical or mental incapacity or disability as determined by a physician or
physicians selected by the Company and reasonably acceptable to Executive,
unless, within 30 days after Executive has received written notice from the
Company of a proposed Date of Termination due to such absence, Executive shall
have returned to the full performance of his duties hereunder and shall have
presented to the Company a written certificate of Executive's good health
prepared by a physician selected by Company and reasonably acceptable to
Executive.
(d) "Extension Date" shall mean the first date during the Term of the
Employment Agreement on which a Change of Control occurs. Anything in this
Termination Agreement or the Employment Agreement to the contrary
notwithstanding, if a Change of Control occurs and if the Executive's
employment with the Company is terminated prior to the date on which the Change
of Control occurs, and if it is reasonably demonstrated by the Executive that
such termination of employment (i) was at the request of a third party who has
taken steps reasonably calculated to effect a Change of Control or (ii)
otherwise arose in connection with or anticipation of a Change of Control, then
for all purposes of this Termination Agreement or the Employment Agreement the
"Extension Date" shall mean the date immediately prior to the date of such
termination of employment.
(e) "Good Reason." For purposes of this Termination Agreement and the
Employment Agreement, "Good Reason" shall mean the occurrence of any of the
following, without Executive's prior written consent:
(i) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's
position (including status, offices, titles and
reporting requirements), authority, duties or
responsibilities as contemplated by Section 2(a) of this
Termination Agreement or the Employment Agreement, or
any other action by the Company which results in a
diminution in such position, authority, duties or
responsibilities, excluding for this purpose an
isolated,
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insubstantial and inadvertent action not taken in bad
faith and which is remedied by the Company
promptly after receipt of notice thereof given by the
Executive;
(ii) any failure by the Company to comply with any of the
provisions of this Termination Agreement or the
Employment Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in
bad faith and which is remedied by the Company promptly
after receipt of notice thereof given by the Executive;
(iii) the Company's requiring the Executive to be based at any
office or location other than as provided in Section
2(b) hereof or the Employment Agreement or the
Company's requiring the Executive to travel on Company
business to a substantially greater extent than required
of other senior executives in similar capacities
immediately prior to the Effective Date;
(iv) any failure by the Company to perform any material
obligation under, or breach by the Company of any
material provision of, this Termination Agreement or the
Employment Agreement;
(v) any purported termination by the Company of the
Executive's employment otherwise than as expressly
permitted by this Termination Agreement; or
(vi) any failure by the Company to comply with and
satisfy Section 12(b) of this Termination Agreement.
For purposes of this Section, any good faith determination of "Good Reason"
made by the Executive shall be conclusive.
(f) "Normal Retirement Date." For purposes of this Termination
Agreement, an Executive's Normal Retirement Date is his or her attainment of
age sixty-five (65).
10. Excise Tax Gross-Up.
If Executive becomes entitled to one or more payments (with a "payment"
including, without limitation, the vesting of an option or other non-cash
benefit or property), whether pursuant to the terms of this Termination
Agreement or any other plan, arrangement, or agreement with the Company or any
affiliated company (the "Total Payments"), which are or become subject to the
tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code") (or any similar tax that may hereafter be imposed) (the "Excise
Tax"), the Company shall pay to Executive at the time specified below an
additional amount (the "Gross-up Payment") (which shall
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include, without limitation, reimbursement for any penalties and interest that
may accrue in respect of such Excise Tax) such that the net amount retained by
Executive, after reduction for any Excise Tax (including any penalties or
interest thereon) on the Total Payments and any federal, state and local income
or employment tax and Excise Tax on the Gross-up Payment provided for by this
Section 10, but before reduction for any federal, state, or local income or
employment tax on the Total Payments, shall be equal to the sum of (a) the
Total Payments, and (b) an amount equal to the product of any deductions
disallowed for federal, state, or local income tax purposes because of the
inclusion of the Gross-up Payment in Executive's adjusted gross income
multiplied by the highest applicable marginal rate of federal, state, or local
income taxation, respectively, for the calendar year in which the Gross-up
Payment is to be made.
For purposes of determining whether any of the Total Payments will be
subject to the Excise Tax and the amount of such Excise Tax:
(a) The Total Payments shall be treated as "parachute payments" within
the meaning of Section 280G(b)(2) of the Code, and all "excess parachute
payments" within the meaning of Section 280G(b)(1) of the Code shall be treated
as subject to the Excise Tax, unless, and except to the extent that, in the
written opinion of independent compensation consultants or auditors of
nationally recognized standing ("Independent Advisors") selected by the Company
and reasonably acceptable to Executive, the Total Payments (in whole or in
part) do not constitute parachute payments, or such excess parachute payments
(in whole or in part) represent reasonable compensation for services actually
rendered before a Change of Control within the meaning of Section 280G(b)(4)(B)
of the Code in excess of the base amount within the meaning of Section
280G(b)(3) of the Code or are otherwise not subject to the Excise Tax;
(b) The amount of the Total Payments which shall be treated as subject
to the Excise Tax shall be equal to the lesser of (i) the total amount of the
Total Payments or (ii) the total amount of excess parachute payments within the
meaning of Section 280G(b)(1) of the Code (after applying clause (a) above);
and
(c) The value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Independent Advisors in accordance with the
principles of Sections 280G(d)(3) and (4) of the Code.
For purposes of determining the amount of the Gross-up Payment,
Executive shall be deemed (A) to pay federal income taxes at the highest
marginal rate of federal income taxation for the calendar year in which the
Gross-up Payment is to be made; (B) to pay any applicable state and local
income taxes at the highest marginal rate of taxation for the calendar year in
which the Gross-up Payment is to be made, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state and
local taxes if paid in such year (determined without regard to limitations on
deductions based upon the amount of Executive's adjusted gross income); and (C)
to have otherwise allowable deductions for federal, state, and local income tax
purposes at least equal to those disallowed because of the inclusion of the
Gross-up Payment in Executive's adjusted gross income. In the event that the
Excise Tax is subsequently determined to be less than the amount taken into
account hereunder at the time the Gross-up Payment is made, Executive shall
repay to the Company at the time that the amount of such reduction in Excise
Tax is finally determined (but, if previously paid to the taxing authorities,
not prior to the time the amount of such reduction is refunded to Executive or
otherwise realized as a benefit by Executive) the portion of the Gross-up
Payment that would not have been paid if such Excise Tax had been applied in
initially calculating the Gross-up Payment, plus interest on the amount of such
repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In the
event that the Excise
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Tax is determined to exceed the amount taken into account hereunder at the time
the Gross-up Payment is made (including by reason of any payment the existence
or amount of which cannot be determined at the time of the Gross-up
Payment), the Company shall make an additional Gross-up Payment in respect of
such excess (plus any interest and penalties payable with respect to such
excess) at the time that the amount of such excess is finally determined.
The Gross-up Payment provided for above shall be paid on the 30th day
(or such earlier date as the Excise Tax becomes due and payable to the taxing
authorities) after it has been determined that the Total Payments (or any
portion thereof) are subject to the Excise Tax; provided, however, that if the
amount of such Gross-up Payment or portion thereof cannot be finally determined
on or before such day, the Company shall pay to Executive on such day an
estimate, as determined by the Independent Advisors, of the minimum amount of
such payments and shall pay the remainder of such payments (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code), as soon as
the amount thereof can be determined. In the event that the amount of the
estimated payments exceeds the amount subsequently determined to have been due,
such excess shall constitute a loan by the Company to Executive, payable on the
fifth day after demand by the Company (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code). If more than one Gross-up
Payment is made, the amount of each Gross-up Payment shall be computed so as
not to duplicate any prior Gross-up Payment.
Notwithstanding the foregoing, the Executive may at any time elect to
demand the payment of the amount which the Executive, in accordance with an
Opinion of counsel to the Executive, determines to be the Gross-Up Payment. Any
such demand by the Executive shall be made by delivery to the Company of a
written notice which specifies the Gross-Up Payment determined by the Executive
and an Opinion of counsel to the Executive regarding such Gross-Up Payment
(such written notice and Opinion collectively, the "Executive's
Determination"). Within fourteen (14) days after the Executive's delivery of
the Executive's Determination to the Company, the Company shall
(i) pay to the Executive the Gross-Up Payment set
forth in the Executive's Determination
unless
(ii) the Company shall deliver to the Executive a written
notice specifying the Gross-Up Payment determined by the
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Company together with an Opinion of the Company's
counsel regarding such Gross-Up Payment (such written
notice and Opinion collectively, "the Company's
Determination") and shall pay to the Executive the
Gross-Up Payment specified in the Company's
Determination.
For purposes of this Section 10, "Opinion" shall mean an unqualified legal
opinion that a Gross-Up Payment has been calculated in accordance with this
Section 10 and applicable law, unless such Opinion shall state therein that an
unqualified Opinion cannot be given as to any Gross-Up Payment. In such case,
the Opinion shall state that the Gross-Up Payment set forth therein both (A) is
more likely than not to be in accordance with this Section 10 and applicable
law, and (B) is more likely to be in accordance with this Section 10 and
applicable law than any other Gross-Up Payment.
The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten (10) business days after the Executive is
informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies the Executive in writing prior to
the expiration of such period that it desires to contest such claim, the
Executive shall:
(i) give the Company any information reasonably requested
by the Company relating to such claim,
(ii) take such action in connection with contesting such
claim as the Company shall reasonably request in writing
from time to time, including, without limitation,
accepting legal representation with respect to such
claim by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
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provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions
of this Section 10, the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo any
and all administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may, at its sole option, either
direct the Executive to pay the tax claimed and xxx for a refund or to contest
the claim in any permissible manner, and the Executive agrees to prosecute such
contest to a determination before any administrative tribunal, in a court of
initial jurisdiction and in one or more appellate courts, as the Company shall
determine; provided, however, that if the Company directs the Executive to pay
such claim and xxx for a refund, the Company shall advance the amount of such
payment to the Executive, on an interest-free basis and shall indemnify and
hold the Executive harmless, on an after-tax basis, from any Excise Tax or
income tax (including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with respect to
such advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the Executive
with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. Furthermore, the Company's control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority. If, after the receipt by the Executive
of an amount advanced by the Company pursuant to this Section 10, the Executive
becomes entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Company's complying with the requirements of
this Section 10) promptly pay to the Company the amount of such refund
(together with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Executive of an amount advanced by the
Company pursuant to this Section 10, a determination is made that the Executive
shall not be entitled to any refund with respect to such claim and the Company
does not notify the Executive in writing of its intent to contest such denial
of refund prior to the expiration of thirty (30) days after such determination,
then such advance shall be forgiven and shall not be required to be repaid and
the amount of such advance shall offset, to the extent thereof, the amount of
Gross-Up Payment required to be paid.
11. Non-Competition and Non-Disclosure; Executive Cooperation.
(a) Non-Competition. Without the consent in writing of the Board, upon
the Executive's Date of Termination for any reason, Executive will not, for a
period of one year thereafter, acting alone or in conjunction with others,
directly or indirectly (i) engage (either as owner, investor, partner,
stockholder, employer, employee, consultant, advisor or Director) in any
business in the continental United States in which he has been directly
engaged, or has supervised as an executive, during the last two
years prior to such Date of Termination and which is directly in competition
with a business then conducted by the Company or any of its subsidiaries; (ii)
induce any customers of the Company or any of its subsidiaries with whom
Executive has had contacts or relationships, directly or indirectly, during and
within the scope of his employment with the Company or any of its subsidiaries,
to curtail or cancel their business with such companies or any of them; or
(iii) induce, or attempt to influence, any employee of the Company or any of
its subsidiaries to terminate employment. The provisions of subparagraphs (i),
(ii), and (iii) above are separate and distinct commitments independent of each
of the other subparagraphs. It is agreed that
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the ownership of not more than one percent of the equity securities of any
company having securities listed on an exchange or regularly traded in the
over-the-counter market shall not, of itself, be deemed inconsistent with
clause (i) of this paragraph (a).
(b) Non-Disclosure. Executive shall not at any time (including
following Executive's Date of Termination for any reason), disclose, use,
transfer, or sell, except in the course of employment with or other service to
the Company, any confidential or proprietary information of the Company or any
of its subsidiaries so long as such information has not otherwise been
disclosed or is not otherwise in the public domain, except as required by law
or pursuant to legal process.
(c) Cooperation With Regard to Litigation. Executive agrees to
cooperate with the Company (including following Executive's Date of Termination
for any reason), provided that such cooperation would not unreasonably
interfere with the business activities or employment obligations of the
Executive, by making himself available to testify on behalf of the Company or
any subsidiary or affiliate of the Company, in any action, suit, or proceeding,
whether civil, criminal, administrative, or investigative, and to assist the
Company, or any subsidiary or affiliate of the Company, in any such action,
suit, or proceeding, by providing information and meeting and consulting with
the Board and its representatives or counsel, or representatives or counsel of
or to the Company, or any subsidiary or affiliate of the Company, as requested;
provided, however, this subsection (c) shall not apply to any action between
the Executive and the Company to enforce this Termination Agreement or the
Employment Agreement. The Company agrees to reimburse Executive, on an
after-tax basis, for all expenses actually incurred in connection with his
provision of testimony or assistance.
(d) Release of Employment Claims. Executive agrees, as a condition to
receipt of the termination payments and benefits provided hereunder, that he
will execute a release agreement, in a form satisfactory to the Company,
releasing any and all claims arising out of Executive's employment, including
claims arising under the Employment Agreement (other than claims made pursuant
to any indemnities provided under the articles or by-laws of the Company, under
any directors or officers liability insurance policies maintained by the
Company or enforcement of this Termination Agreement).
(e) Survival. Notwithstanding any provision of this Termination
Agreement to the contrary, the provisions of this Section 11 shall survive the
termination or expiration of this Termination Agreement, shall be valid and
enforceable, and shall be a condition precedent to the Executive (or his or her
beneficiaries) receiving any amounts payable hereunder.
12. Governing Law; Expense Reimbursement.
(a) Governing Law. This Termination Agreement is governed by and is to
be construed, administered, and enforced in accordance with the laws of the
State of Michigan, without regard to Michigan conflicts of law principles,
except insofar as the Delaware General Corporation Law and federal laws and
regulations may be
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applicable. If under the governing law, any portion of this Termination
Agreement is at any time deemed to be in conflict with any applicable statute,
rule, regulation, ordinance, or other principle of law, such portion shall be
deemed to be modified or altered to the extent necessary to conform thereto or,
if that is not possible, to be omitted from this Termination Agreement. The
invalidity of any such portion shall not affect the force, effect, and validity
of the remaining portion hereof. If any court determines that any provision of
Section 11 is unenforceable because of the duration or geographic scope of such
provision, it is the parties' intent that such court shall have the power to
modify the duration or geographic scope of such provision, as the case may be,
to the extent necessary to render the provision enforceable and, in its
modified form, such provision shall be enforced.
(b) Expense Reimbursement. On and after the Extension Date, all
reasonable costs and expenses (including fees and disbursements of counsel)
incurred by Executive in seeking to enforce rights pursuant to this Termination
Agreement shall be paid on behalf of or reimbursed to Executive promptly by the
Company, whether or not Executive is successful in asserting such rights;
provided, however, that no reimbursement shall be made of such expenses
relating to any unsuccessful assertion of rights if and to the extent that
Executive's assertion of such rights was in bad faith or frivolous, as
determined by independent counsel mutually acceptable to Executive and the
Company and made without reference to or not related to a Change of Control.
During the Extended Employment Period, the Company agrees to maintain a minimum
amount in a rabbi trust (or to provide to the trustee of such rabbi trust) an
irrevocable letter of credit in an amount equal to such minimum amount (and
callable at will by such trustee) sufficient to fund the aggregate present
value of all liabilities potentially owed to the Executive hereunder or under
the Employment Agreement as if he or she had incurred a termination of
employment by the Company other than for Cause.
13. Miscellaneous.
(a) Integration. This Termination Agreement modifies and supersedes
any and all prior agreements and understandings between the parties hereto with
respect to the employment of Executive by the Company and its subsidiaries,
except for the Employment Agreement and contracts relating to compensation
under executive compensation and employee benefit plans of the Company. Subject
to the rights, benefits and obligations provided for in such executive
compensation contracts and employee benefit plans of the Company, this
Termination Agreement and the Employment Agreement together constitute the
entire agreement among the parties with respect to the matters herein provided,
and no modification or waiver of any provision hereof shall be effective unless
in writing and signed by the parties hereto. Executive shall not be entitled
to any payment or benefit under this Termination Agreement which duplicates a
payment or benefit received or receivable by Executive under such prior
agreements and understandings with the Company or under any benefit or
compensation plan of the Company.
(b) Non-Transferability. Neither this Termination Agreement nor the
rights or obligations hereunder of the parties hereto shall be transferable or
assignable by Executive, except in accordance with the laws of descent and
distribution or as
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specified in Section 13(c). The Company may assign this Termination Agreement
and the Company's rights and obligations hereunder, and shall assign this
Termination Agreement, to any Successor (as hereinafter defined) which, by
operation of law or otherwise, continues to carry on substantially the
business of the Company prior to the event of succession, and the Company
shall, as a condition of the succession, require such Successor to agree to
assume the Company's obligations and be bound by this Termination Agreement.
For purposes of this Termination Agreement, "Successor" shall mean any person
that succeeds to, or has the practical ability to control (either immediately
or with the passage of time), the Company's business directly, by merger or
consolidation, or indirectly, by purchase of the Company's voting securities or
all or substantially all of its assets, or otherwise.
(c) Beneficiaries. Executive shall be entitled to designate (and
change, to the extent permitted under applicable law) a beneficiary or
beneficiaries to receive any compensation or benefits payable hereunder
following Executive's death.
(d) Notices. Whenever under this Termination Agreement it becomes
necessary to give notice, such notice shall be in writing, signed by the party
or parties giving or making the same, and shall be served on the person or
persons for whom it is intended or who should be advised or notified, by
Federal Express or other similar overnight service or by certified or
registered mail, return receipt requested, postage prepaid and addressed to
such party at the address set forth below or at such other address as may be
designated by such party by like notice:
If to the Company: Walbro Corporation
0000 Xxxxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxx 00000-0000
Attention: Secretary
If to Executive: Xxxxxx X. Xxxxxxx
0000 Xxxxxx Xxxxxx
Xxxx Xxxx, Xxxxxxxx 00000
If the parties by mutual agreement supply each other with telecopier numbers
for the purposes of providing notice by facsimile, such notice shall also be
proper notice under this Termination Agreement. In the case of Federal
Express or other similar overnight service, such notice or advice shall be
effective when sent, and, in the cases of certified or registered mail, shall
be effective 2 days after deposit into the mails by delivery to the U.S. Post
Office.
(e) Reformation. The invalidity of any portion of this Termination
Agreement shall not deemed to render the remainder of this Termination
Agreement invalid.
(f) Headings. The headings of this Termination Agreement are for
convenience of reference only and do not constitute a part hereof.
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(g) No General Waivers. The failure of any party at any time to
require performance by any other party of any provision hereof or to resort to
any remedy provided herein or at law or in equity shall in no way affect the
right of such party to require such performance or to resort to such remedy at
any time thereafter, nor shall the waiver by any party of a breach of any of
the provisions hereof be deemed to be a waiver of any subsequent breach of such
provisions. No such waiver shall be effective unless in writing and signed by
the party against whom such waiver is sought to be enforced.
(h) No Obligation To Mitigate. Executive shall not be required to seek
other employment or otherwise to mitigate Executive's damages hereunder on or
after Executive's Date of Termination, nor shall the amount of any payment
hereunder be reduced by any compensation earned by the Executive as a result of
employment by another employer; provided, however, that, to the extent
Executive receives from a subsequent employer health or other insurance
benefits that are substantially similar to the benefits referred to in this
Termination Agreement, any such benefits to be provided by the Company to
Executive following the Term shall be correspondingly reduced.
(i) No Offsets. The amounts required to be paid by the Company to
Executive pursuant to this Termination Agreement shall not be subject to
offset, counterclaim, recoupment, defense or other claim, right or action which
the Company may have against Executive or others, other than with respect to
any amounts that are owed to the Company by Executive due to his receipt of
Company funds as a result of his fraudulent activity. The foregoing and other
provisions of this Termination Agreement notwithstanding, all payments to be
made to Executive under this Termination Agreement will be subject to required
withholding taxes and other required deductions.
(j) Successors and Assigns. This Termination Agreement shall be
binding upon and shall inure to the benefit of Executive, his heirs, executors,
administrators and beneficiaries, and shall be binding upon and inure to the
benefit of the Company and its successors and assigns.
14. Indemnification.
All rights to indemnification by the Company now existing in favor of
Executive as provided in the Company's Certificate of Incorporation or By-Laws
or pursuant to other agreements in effect on or immediately prior to the
Extension Date shall continue in full force and effect from the Extension Date
(including all periods after the expiration of the Term), and the Company shall
also advance expenses for which indemnification may be ultimately claimed as
such expenses are incurred to the fullest extent permitted under applicable
law, subject to any requirement that Executive provide an undertaking to repay
such advances if it is ultimately determined that Executive is not entitled to
indemnification; provided, however, that any determination required to be made
with respect to whether Executive's conduct complies with the standards
required to be met as a condition of indemnification or advancement of expenses
under applicable law and the Company's Certificate of Incorporation, By-Laws,
or other agreement shall be made by independent counsel mutually
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acceptable to Executive and the Company (except to the extent otherwise
required by law). After the Extension Date, the Company shall not amend its
Certificate of Incorporation or By-Laws or any agreement in any manner which
adversely affects the rights of Executive to indemnification thereunder.
Any provision contained herein notwithstanding, this Termination Agreement
shall not limit or reduce any rights of Executive to indemnification pursuant
to applicable law. In addition, the Company will maintain directors' and
officers' liability insurance in effect and covering acts and omissions of
Executive, during the Term and for a period of six years thereafter, on terms
substantially no less favorable as those in effect on the Extension Date.
IN WITNESS WHEREOF, Executive has hereunto set his hand and the Company
has caused this instrument to be duly executed as of the day and year first
above written.
WALBRO CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxx
--------------------------------
Name: Xxxxxxx X. Xxxxxxxx
Title: Chairman & Chief Executive Officer
Xxxxxx X. Xxxxxxx
/s/ Xxxxxx X. Xxxxxxx
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