Exhibit 10(n)
CHANGE OF CONTROL AGREEMENT
THIS AGREEMENT, made this 1st day of January, 2001, by and between
Xxxxxx Holdings, Ltd., a Pennsylvania corporation (hereinafter called
"Company"), and ______________ (hereinafter called "Employee").
1. If Employee's employment is terminated by the Company for reasons
other than "Cause" within twenty-four (24) months after the occurrence of a
"Change in Control," or if Employee terminates his employment within twenty-four
(24) months after the occurrence of a "Change in Control" due to "Good Reason,"
Employee shall be entitled to the following consideration in lieu of any other
salary, incentive compensation, severance, bonus, or any other form of
compensation or benefits:
(a) (i) The Company shall pay Employee a severance payment
equal to 100% of Employee's pre-termination salary for twelve (12) months so
long as employee has been employed by Company for at least twenty four (24)
months at the time of the separation due to a Change of Control, as defined
herein; or
(ii) If prior to the Change of Control Employee had been
employed by the Company for less than twenty four (24) months, the Company shall
pay Employee a severance payment equal to 100% of Employee's pre-termination
salary, for six (6) months. This payment is in lieu of and in no circumstances
in addition to the payment in 1(a)(i).
(iii) The above-mentioned payment will be paid, in the
Company's sole discretion, either in one lump sum payment no later than sixty
(60) business days following Employee's separation from the Company or in twelve
(12) or six (6), as applicable, equal monthly installments beginning thirty (30)
business days following Employee's separation from the Company.
(b) (i) The Company shall pay Employee's COBRA premiums for
twelve (12) months, if Employee is eligible, according to the terms, conditions
and restrictions of COBRA, for continuation of his coverage under the Company's
group health insurance plan so long as employee has been employed by Company for
at least twelve (12) months at the time of the separation due to a Change of
Control, as defined herein.
(ii) If prior to the Change of Control Employee had been
employed by the Company for less than twelve (12) months, the Company shall pay
Employee's COBRA premiums for up to six (6) months, if Employee is eligible,
according to the terms, conditions and restrictions of COBRA, for continuation
of his coverage under the Company's group health insurance plan.
(c) The Company, in its sole discretion, shall pay Employee a
prorated bonus based on the amount of time Employee worked for the Company
during the current bonus year.
(d) The Company shall accelerate Employee's 401(k) vesting so
that Employee becomes 100% vested in the Company's prior 401(k) contributions to
Employee upon separation from the Company (all other terms and conditions of the
401(k) plan will govern).
(e) The Company shall accelerate the vesting of all, if any, of
Employee's then existing Stock Options so that all of Employee's Stock Options
will vest immediately upon his separation of employment. The vested options may
be exercised by Employee any time within ten years of the issuance date of such
options. All options will be forfeited after the ten year term. All other
terms and conditions of the relevant Stock Option Agreements will govern.
(f) The Company shall continue to pay the life insurance
premiums associated with the life insurance plan(s) previously paid for by the
Company for the Employee during the twelve (12) months following the above-
mentioned termination or resignation for Good Reason because of a Change of
Control.
(g) The Company shall provide for the transfer to Employee of
all right and title to the automobile then being provided by the Company to
Employee at the occurrence of a Change in Control. In the case of a leased
automobile, the Company shall continue to make all payments owed under such
lease for the term of such lease, and at the termination of such lease, shall
purchase the automobile and immediately thereafter transfer all right and title
to the automobile to the Employee.
2. Definitions:
(a) For purposes of this Agreement, a "Change of Control" shall
be deemed to have occurred if and when:
(i) Company becomes a subsidiary of another unaffiliated
corporation or shall be merged or consolidated into another unaffiliated
corporation;
(ii) A majority of Company's assets shall have been sold to
an unaffiliated party or parties;
(iii) Company's shareholders execute a definitive agreement
with respect to any transaction described in clauses (i) and (ii) above which
has not been terminated at the time that Employee's employment is terminated
whether such termination is voluntary or involuntary;
(iv) The shareholders of the Company approve a plan of
complete liquidation of the Company which has not been terminated at the time
that Employee's employment is terminated whether such termination is voluntary
or involuntary;
(v) 50% or more of the Company's outstanding common stock
(on a fully-diluted basis) is acquired by an entity or an individual, excluding
by (a) a
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management level employee employed by the Company at the time or (b) a group
controlled by one or more of such employees; or
(vi) Within a period of less than 24 months, over half of
the board members are removed from the Board or the Board is expanded and, after
such removal or expansion, over half of the members are new (members approved by
a majority of the current board members shall not be considered new for this
purpose).
(b) "Cause" shall only include one or more of the following:
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(i) Employee is believed to be guilty of a felony or a
crime involving moral turpitude or has entered a plea of nolo contendere (or
similar plea) to a charge of such an offense;
(ii) Employee uses alcohol or any unlawful controlled
substance while performing his duties under this Agreement and/or if such use
interferes with the performance of Employee's duties under this Agreement;
(iii) Employee is believed to have committed any act of
fraud, personal dishonesty or misappropriation relating to or involving Company;
or
(iv) Employee engages in the unauthorized disclosure of
Confidential Information.
(c) "Good Reason" shall only include one or more of the
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following:
(i) An assignment to the Employee of duties materially
inconsistent with, or a material change in the nature or scope of, Employee's
significant responsibilities, authority or duties hereunder;
(ii) Failure by the Company to comply with a material
provision of this Agreement;
(iii) Relocation of the Company's headquarters to a location
greater than 60 miles from the Company's Feasterville, Pennsylvania
headquarters, if such relocation would cause Employee to have an excessive
commuting distance (greater than 60 miles each way) or to relocate; or
(iv) A substantial reduction in Employee's compensation and
benefit package.
3. If Employee terminates his employment for any reason listed in
2(c) above, the reason shall be deemed "Good Reason" and the Company agrees to
begin making the severance payments explained in 1(a) (if any are to be made
based on Employee's length of service and the actual existence of a Change of
Control), even if the Company disputes that the Employee actually had "Good
Reason". While making such payments the Company also can
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pursue a cause of action against Employee regarding the true existence of
Employee's alleged "Good Reason" or the timing of the separation.
4. If Employee begins employment for himself or any other person or
entity during the twelve (12) months following his separation from the Company
for "Good Reason", the amount of any severance payments the Company pays to
Employee under 1(a) shall be reduced by the amount of Employee's base
compensation from such other employment. Employee agrees to notify Company, in
writing, within thirty (30) days of accepting new employment, of any new
employment and of his base compensation amount. In addition, the premium
payments described in 1(b) and 1(f) will be discontinued if Employee is eligible
for coverages under Employee's new employment situation, even if Employee
becomes self-employed.
5. In the event that any payment or benefit received or to be
received by Employee in connection with a Change in Control or the termination
of Employee's employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company) (collectively the "Total
Payments"), would not be deductible (in whole or in part) as a result of Section
280G of the Internal Revenue Code of 1986, as amended (the "Code"), by the
Company, an affiliate or other person making such payment or providing such
benefit, the payments or benefits shall be so reduced until no portion of the
Total Payments is not deductible. Employee shall be entitled to elect which
payments or benefits shall be so reduced. For purposes of this limitation, (1)
no portion of the Total Payments the receipt or enjoyment of which Employee
shall have effectively waived in writing prior to the date of payment shall be
taken into account, (2) no portion of the Total Payments shall be taken into
account which in the opinion of tax counsel selected by the Company's
independent auditors and acceptable to Employee does not constitute a "parachute
payment" within the meaning of Section 280G(b)(2) of the Code, and (3) the value
of any noncash benefit or any deferred payment or benefit included in the Total
Payments shall be determined by the Company's independent auditors in accordance
with the principles of Sections 280(d)(3) and (4) of the Code.
6. Miscellaneous.
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(a) Indulgences, Etc. Neither the failure nor any delay on the
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part of either party to exercise any right, remedy, power or privilege under
this Agreement shall operate as a waiver thereof, nor shall any single or
partial exercise of any right, remedy, power or privilege preclude any other or
further exercise of the same or of any other right, remedy, power or privilege,
nor shall any waiver of any right, remedy, power or privilege with respect to
any occurrence be construed as a waiver of such right, remedy, power or
privilege with respect to any other occurrence. No waiver shall be effective
unless it is in writing and is signed by the party asserted to have granted such
waiver.
(b) Controlling Law. This Agreement and all questions relating
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to its validity, interpretation, performance and enforcement (including, without
limitation, provisions concerning limitations of actions), shall be governed by
and construed in accordance with the laws of Pennsylvania.
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(c) Notices. All notices, requests, demands and other
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communications required or permitted under this Agreement shall be in writing
and shall be deemed to have been duly given, made and received only when
personally delivered, on the day specified for delivery when deposited with a
recognized national or regional courier service for delivery to the intended
addressee or two (2) days following the day when deposited in the United States
mails, first class postage prepaid, addressed as set forth below:
(i) If to Employee:
_________________________
_________________________
_________________________
(ii) If to Company:
Xxxxxx Holdings, Ltd.
000 Xxxxxxxxxxxx Xxxxxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: President
In addition, notice by mail shall be by air mail if posted
outside of the continental United States. Any party may alter the address to
which communications or copies are to be sent by giving notice of such change of
address in conformity with the provisions of this Section for the giving of
notice.
(d) Binding Nature of Agreement. This Agreement shall be
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binding upon Company and shall inure to the benefit of Company, its present and
future subsidiaries, affiliates, successors and assigns including any transferee
of the business operation, as a going concern, in which Employee is employed and
shall be binding upon Employee, Employee's heirs and personal representatives.
None of the rights or obligations of Employee hereunder may be assigned or
delegated, except that in the event of Employee's death or disability, any
rights of Employee hereunder shall be transferred to Employee's estate or
personal representative, as the case may be. Company may assign its rights and
obligations under this Agreement in whole or in part to any one or more
affiliates or successors, but no such assignment shall relieve Company of its
obligations to Employee if any such assignee fails to perform such obligations.
(e) Execution in Counterparts. This Agreement may be executed
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in any number of counterparts, each of which shall be deemed to be an original
as against any party whose signature appears thereon, and all of which shall
together constitute one and the same instrument. This Agreement shall become
binding when one or more counterparts hereof, individually or taken together,
shall bear the signatures of all of the parties reflected hereon as the
signatories.
(f) Provisions Separable. The provisions of this Agreement are
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independent of and separable from each other, and no provision shall be affected
or rendered
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invalid or unenforceable by virtue of the fact that for any reason any other or
others of them may be invalid or unenforceable in whole or in part.
(g) Entire Agreement. This Agreement contains the entire
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understanding among the parties hereto with respect to the at-will employment of
Employee by Company, and supersedes all prior and contemporaneous agreements and
understandings, inducements or conditions, express or implied, oral or written,
except as herein contained. The express terms hereof control and supersede any
course of performance and/or usage of the trade inconsistent with any of the
terms hereof. This Agreement may not be modified or amended other than by an
agreement in writing. Notwithstanding the foregoing, nothing herein shall limit
the application of any generally applicable Company policy, practice, plan or
the terms of any manual or handbook applicable to Company's employees generally,
except to the extent the foregoing directly conflict with this Agreement, in
which case the terms of this Agreement shall prevail.
(h) Section Headings. The Section headings in this Agreement
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are for convenience only; they form no part of this Agreement and shall not
affect its interpretation.
(i) Gender, Etc. Words used herein, regardless of the number and
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gender specifically used, shall be deemed and construed to include any other
number, singular or plural, and any other gender, masculine or feminine, as the
context indicates is appropriate.
(j) Survival. All provisions of this agreement which by their
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terms survive the termination of Employee's employment with Company shall
survive termination of Employee's employment by Company and shall remain in full
force and effect thereafter in accordance with their terms.
IN WITNESS WHEREOF, the parties have duly executed and delivered this
Agreement as of the date first above written.
XXXXXX HOLDINGS, LTD.:
By:________________________________ By:__________________________(SEAL)
Name: Name:
Title: Title:
Witness:___________________________ Witness:___________________________
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