AMENDED AND RESTATED FORM OF CHANGE OF
CONTROL AGREEMENT WITH SELECTED EXECUTIVE OFFICERS
This AMENDED AND RESTATED AGREEMENT is made as of
March 1, 1999, between XXXXXXXXX-XXXX COMPANY, a New Jersey
corporation (the "Company"), and , the "Employee").
Unless otherwise indicated, terms used herein and defined in
Schedule A hereto shall have the meanings assigned to them in
said Schedule.
WHEREAS, the Company and the Employee have previously
entered into an Agreement, dated December 3, 1997, and hereby
wish to amend and restate in its entirety such Agreement;
NOW, THEREFORE, the Company and the Employee agree as
follows:
1. OPERATION OF AGREEMENT.
This Agreement shall be effective immediately upon its
execution and shall continue thereafter from year to year prior
to a Change of Control Event unless terminated as of any
anniversary of the date hereof by either party upon written
notice to the other party given at least 60 days, but not more
than 90 days, prior to such anniversary date. Notwithstanding
the foregoing, this Agreement may not be terminated after the
occurrence of a Change of Control Event.
2. AGREEMENT TERM.
The term of this Agreement shall begin on the date
hereof and, unless terminated pursuant to paragraph 1 prior to a
Change of Control Event, shall end on the fifth anniversary of
the occurrence of a Change of Control Event.
3. EMPLOYEE'S POSITION AND RESPONSIBILITIES.
(a) The Employee will continue to serve the Company
upon the occurrence of a Change of Control Event in the same
capacity as he serves the Company immediately prior thereto, or
in such other comparable executive, administrative or management
capacities, requiring substantially equivalent expertise and
responsibility, as the Board or Chief Executive Officer of the
Company shall determine and deem suitable and in the best
interests of the Company in accordance with the Employee's
experience, expertise and capabilities.
(b) During the term of this Agreement the Employee
shall devote his entire business time and attention exclusively
to the business and affairs of the Company and shall use his best
efforts to promote the interests of the Company. The partici-
pation of the Employee in outside directorships and civic
activities not otherwise inconsistent with Company policy and the
management of the Employee's personal investments in public
companies in which the Employee holdings do not exceed 5% of the
voting power or value of such companies shall not be deemed a
violation of this paragraph 3.
4. COMPENSATION AND OTHER BENEFITS UPON CHANGE OF
CONTROL EVENT.
The Company and the Employee agree that, upon the
occurrence of any Change of Control Event, the Employee shall
receive basic annual salary, bonus and fringe and other benefits
as follows:
(a) Basic Annual Salary and Bonus. The Employee's
basic annual salary shall be at a rate not less than the
rate of annual salary, which has been paid to the Employee
immediately prior to the Change of Control Event, with such
annual increases (but not decreases) equal to the greater of
(i) salary increases as may be contemplated by any salary
adjustment programs of the Company in effect immediately
prior to the Change of Control Event and applicable to the
Employee and such further increases as shall be determined
from time to time by the Board or (ii) a percentage equal to
the percentage increase (if any) in the "Consumer Price
Index for All Urban Consumers" published by the United
States Department of Labor's Bureau of Labor Statistics for
the then most recently ended 12-month period. In addition,
the Employee shall be entitled to receive an annual bonus in
an amount not less than the highest annual bonus received
by, or accrued on behalf of, the Employee during the lesser
of (i) the five full Fiscal Years immediately preceding the
Change of Control Event, or (ii) the number of full Fiscal
Years immediately preceding the Change of Control Event
during which the Employee has been employed by the Company
(whether the bonus is paid to, is accrued on behalf of, is a
Deferral Amount (as such term is defined in the Xxxxxxxxx-
Xxxx Executive Deferred Compensation and Stock Bonus Plan)
or is foregone by the Employee pursuant to the Xxxxxxxxx-
Xxxx Company Estate Enhancement Program).
(b) Fringe Benefits; Business Expenses. The Employee
shall be entitled to receive benefits, including but not
limited to pension (and supplemental pension), savings and
stock investment plan (and supplemental savings and stock
investment and retirement plans), leveraged employee stock
ownership plan, stock award, stock option, deferred
compensation, and welfare benefit plans and programs
including, but not limited to, life, medical, prescription
drugs, dental, disability, accidental death and travel
accident coverage plans, post-retirement welfare benefits,
and an estate enhancement program on terms no less favorable
than those in effect under each such plan immediately prior
to the Change of Control Event, and at no less than the same
benefit levels (and no more than the same employee
contribution levels) then in effect under each such plan and
to receive all other fringe benefits and perquisites (or
their equivalent) from time to time in effect for the
benefit of any executive, management or administrative group
for which the employment position then held by the Employee
entitles the Employee to participate. The Company shall
provide for the payment of, or reimburse the Employee for,
all travel and other out-of-pocket expenses reasonably
incurred by him in the performance of his duties hereunder.
(c) Management Incentive Unit Award Plan. The Company
and the Employee further agree that immediately upon the
occurrence of any Change of Control Event, all amounts
theretofore credited to the Employee under the Company's
Management Incentive Unit Award Plan, as amended (the "MIU
Plan"), shall become fully vested and all such amounts
thereafter credited shall become fully vested immediately
upon such crediting.
5. PAYMENTS AND BENEFITS UPON TERMINATION.
The Employee shall be entitled to the following
payments and benefits upon Termination:
(a) Salary and Bonus. The Company shall pay to the
Employee, in a cash lump sum on the Termination Date, an
amount equal to the sum of (i) the basic annual salary and
any annual bonus in respect of a completed fiscal year,
which have not yet been paid to the Employee through the
Termination Date; (ii) an amount equal to the last annual
bonus received by, or awarded to, the Employee for the full
Fiscal Year immediately preceding the Termination Date
multiplied by a fraction the numerator of which shall be the
number of full months the Employee was employed by the
Company during the Fiscal Year containing the Employee's
Termination Date and the denominator of which shall be 12;
and (iii) an amount equal to the number of unused vacation
days to which the Employee is entitled as of the Termination
Date and any other amounts normally paid to an employee by
the Company upon termination of employment. For these
purposes, any partial month during which the Employee is
employed shall be deemed a full month.
(b) Severance. The Company shall pay to the Employee,
in a cash lump sum not more than 30 days following the
Termination Date, an amount equal to three times the sum of
(i) the highest basic annual salary in effect at any time
during the period beginning immediately prior to the Change
of Control Event and ending on the Termination Date; and
(ii) the highest annual bonus received by, or accrued on
behalf of, the Employee during the period beginning five
full Fiscal Years immediately preceding the Change of
Control Event and ending on the Termination Date (whether
the bonus is paid to, is accrued on behalf of, is a Deferral
Amount (as such term is defined in the Xxxxxxxxx-Xxxx
Executive Deferred Compensation and Stock Bonus Plan) or is
foregone by the Employee pursuant to the Xxxxxxxxx-Xxxx
Company Estate Enhancement Program).
(c) Employee Benefit Plans. For the three-year period
following the Termination Date (or, if sooner, until the
Employee is covered under a comparable plan offered by a
subsequent employer), the Company shall continue to cover
the Employee under those employee welfare benefit plans and
programs (including, but not limited to, life, medical,
prescription drugs, dental, accidental death and travel
accident and disability coverage, but not including any
severance pay plan or program other than that provided
pursuant to this Agreement or any pension plan) applicable
to the Employee on the Termination Date at the same benefit
levels then in effect (or shall provide their equivalent);
provided, however, that if the Employee becomes employed by
a new employer that maintains any welfare plan that either
(i) does not cover the Employee with respect to a pre-
existing condition which was covered under the applicable
Company welfare plan, or (ii) does not cover the Employee
for a designated waiting period, the Employee's coverage
hereunder under the applicable Company welfare plan (or the
equivalent) shall continue (but shall be limited in the
event of noncoverage due to a preexisting condition, to the
preexisting condition itself) until the earlier of the end
of the applicable period of noncoverage under the new
employer's plan or the third anniversary of the Termination
Date.
(d) Deferred Compensation, Savings and Leveraged
Employee Stock Ownership Plans. As soon as practicable
following the determination thereof (but in any event no
later than 30 days following the Termination Date), the
Company shall pay the Employee an amount (in one lump sum
cash payment) equal to the value of the sum of: (i) the
number of stock units credited to the Employee's Deferred
Compensation Accounts under the Executive Deferred
Compensation and Stock Bonus Plan at the Termination Date
multiplied by the Company Stock Value (as defined in Section
5(g) below); (ii) the number of Common Stock equivalents
credited to the Employee's account under the Supplemental
Savings and Stock Investment Plan at the Termination Date
multiplied by the Company Stock Value (as defined in Section
5(g) below); (iii) the amount credited to the Employee's
account under the Supplemental Retirement Account Plan at
the Termination Date; (iv) all contributions to, or amounts
credited to, the Company's Savings and Stock Investment
Plan, IR/Xxxxx Leveraged Employee Stock Ownership Plan,
Supplemental Savings and Stock Investment Plan, and
Supplemental Retirement Account Plan (and earnings and
appreciation attributable thereto) that theretofore were
made by the Company on behalf of the Employee and are
forfeited as a result of the Employee's Termination; and
(v) five percent of the aggregate amount payable pursuant to
subparagraphs 5(a) and 5(b) for the Savings and Stock
Investment Plan, three percent of such amount for the
Supplemental Savings and Stock Investment Plan and two
percent of such amount for the Supplemental Retirement
Account Plan.
(e) Pension Benefits.
(i) No later than 30 days following the
Termination Date, the Company shall pay the Employee an
amount (in one lump sum cash payment) equal to the Present
Value of the sum of the pension benefits the Employee is
entitled to receive under (A) the Restated Xxxxxxxxx-Xxxx
Company Supplemental Pension Plan (the "Section 415 Excess
Plan"), (B) the Xxxxxxxxx-Xxxx Company Elected Officers
Supplemental Program (the "Elected Officer Supplemental
Program" or the "Program"), and (C) the Executive
Supplementary Retirement Agreement (the "Ten Year Annuity),
all as in effect immediately prior to the Change of Control
Event (collectively the "Pension Benefit").
(ii) In calculating the portion of the
Pension Benefit under section 1.1 of the Section 415 Excess
Plan the Company shall credit the Employee with five
additional years of Credited Service (within the meaning of
the Plan and including wage, vesting and age credit) and
five additional years of age for purposes of the Section 415
Excess Plan but not the Qualified Pension Plan. (If, after
crediting five years of age, the Employee is less than fifty-
five years old, it will be assumed that the benefit
commencement date is the first date on which the Employee
becomes eligible to begin receiving payment of benefits
under the Qualified Pension Plan).
(iii) In calculating the portion of
the Pension Benefit under the Elected Officer Supplemental
Program, the Company shall: (A) credit the Employee with an
additional five Years of Service and an additional five
years of age for purposes of computing the amount of the
Pension Benefit; and (B) define "Final Average Salary" in
Section 1.8 of the Program as 1/3 of the severance amount
determined pursuant to Section 5(b) of this Agreement.
(iv) In calculating the portion of
the Pension Benefit under the Ten-Year Annuity the Company
shall credit the Employee with five additional years of age
but to an age no greater than 62.
(v) The Present Value of the
Pension Benefit shall be calculated using (A) an interest
rate equal to the product of (I) the 10-year Treasury Note
rate as used in the Elected Officer Supplemental Program's
definition of Actuarial Equivalent and (II) 1 minus the
federal income tax rate at the highest bracket of income for
individuals in effect for the year containing the date of
payment, (B) the mortality rate used to determine lump sum
values in the Elected Officer Supplemental Program, and
(C) actual age without the five year addition to age except
that the Ten-Year Annuity Present Value shall be calculated
using no mortality assumption and actual age plus the
additional five years but to an age no greater than 62.
(vi) Calculation of all pension benefits
amounts hereunder shall be made, at the expense of the
Company, by the Wellesley Hills, Massachusetts office of
Xxxxxx Xxxxx (or the Company's then actuary immediately
prior to the Change of Control Event).
(f) Retiree Welfare Benefits. For purposes of
determining the Employee's eligibility for post-retirement
benefits under any welfare benefit plan (as defined in
section 3(1) of the Employee Retirement Income Security Act
of 1974, as amended) maintained by the Company prior to the
occurrence of a Change of Control Event, the Employee shall
be credited with an additional five years of service and
five years of age (or any combination of years of service
and age not exceeding 10 years, to the extent necessary to
qualify for benefits). If, after taking into account such
additional age and service, the Employee is eligible for the
Company's post-retirement welfare benefits (or would have
been eligible under the terms of such plans as in effect
prior to the occurrence of the Change of Control Event), the
Employee shall receive, commencing on the third anniversary
of the Termination Date, post-retirement welfare benefits no
less favorable than the benefits the Employee would have
received under the terms and conditions of the applicable
plans in effect immediately prior to the occurrence of the
Change of Control Event.
(g) Employee Stock Awards, Options, SARs and MIUs. No
later than 30 days following the Termination Date, the
Company shall pay the Employee an amount (in one lump sum
cash payment) equal to the aggregate Company Stock Value
(defined below) of 100% of the Employee's then outstanding
and unpaid stock and stock based awards under the Company's
Incentive Stock Plans, the MIU Plan and any similar plans of
the Company (or any other company) hereafter adopted (at
which time such stock and stock based awards shall be
cancelled and be of no further force or effect). In
addition, all options to purchase shares of Common Stock of
the Company (or the stock of any company in respect of which
options have been granted to the Employee) ("Company Stock")
and all stock appreciation rights held by the Employee
immediately prior to Termination shall become exercisable at
any time on and after the Termination Date, whether or not
otherwise exercisable in accordance with the terms of the
employee benefit plans pursuant to which such options and
stock appreciation rights were granted. For purposes of
this Agreement, Company Stock Value shall be deemed to be
the highest of: (i) the closing sale price of the Company
Stock on the New York Stock Exchange on the Change of
Control Event; (ii) the closing sale price of the Company
Stock on the New York Stock Exchange on the Termination
Date; and (iii) the highest closing sale price of the
Company Stock on the New York Stock Exchange during the 30
trading days immediately preceding the acquisition of more
than 50% of the outstanding Company Stock by any person or
group (including affiliates of such person or group). If,
as of any valuation date, the Company Stock is not traded on
the New York Stock Exchange, the Company Stock Value shall
be the closing sale price of the Company Stock on the
principal national securities exchange on which the Common
Stock is traded or, if the Common Stock is not traded on any
national securities exchange, the closing bid price of the
Common Stock in the over-the-counter market.
(h) Valuation of MIU Common Stock Equivalents. The
Employee's Common Stock Equivalents under the MIU Plan
shall, for purposes of payments pursuant thereto, be valued
at the Company Stock Value.
(i) Estate Enhancement Program. If the Employee
participates in the Xxxxxxxxx-Xxxx Estate Enhancement
Program, the terms of the Program shall apply.
(j) Outplacement Expenses. For the three year period
following the Termination Date, the Company shall reimburse
the Employee for all reasonable expenses (up to a maximum of
$15,000 per 12 month period) incurred by the Employee for
professional outplacement services by qualified consultants
selected by the Employee.
6. PARACHUTE EXCISE TAX GROSS-UP.
(a) If, as a result of any payment or benefit provided
under this Agreement, either alone or together with other
payments and benefits which the Employee receives or is then
entitled to receive from the Company, the Employee becomes
subject to the excise tax imposed under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"),
(together with any income, employment or other taxes,
interest and penalties thereon an "Excise Tax"), the Company
shall pay the Employee an amount (the "Gross-Up Payment")
sufficient to place the Employee in the same after-tax
financial position that he would have been in if he had not
incurred any tax liability under Section 4999 of the Code.
For purposes of determining whether the Employee is subject
to an Excise Tax, (i) any payments or benefits received by
the Employee (whether pursuant to the terms hereof or
pursuant to any plan, arrangement or other agreement with
the Company or any entity affiliated with the Company) which
payments ("Contingent Payments") are deemed to be contingent
on a change described in Section 280G(b)(2)(A)(i) of the
Code shall be taken into account, (ii) the amount of
payments or benefits under this Agreement treated as subject
to the Excise Tax shall be equal to the lesser of (A) the
total amount of all such payments and benefits hereunder as
are Contingent Payments and (B) the amount of excess
parachute payments within the meaning of 280G(b)(1) of the
Code payable to the Employee, and (iii) the Employee shall
be deemed to pay the taxes at the highest marginal
applicable rates of such taxation for the calendar year in
which the Gross-Up Payment is to be made, net of the maximum
deduction in federal income taxes which could be obtained
from deduction of such state and local taxes.
(b) The determination of whether the Employee is
subject to Excise Tax and the amounts of such Excise Tax and
Gross-Up Payment, as well as other calculations hereunder,
shall be made at the expense of the Company by the
independent auditors of the Company immediately prior to the
Change of Control Event, which shall provide the Employee
with prompt written notice (the "Company Notice") setting
forth their determinations and calculations. Within 30 days
following the receipt by the Employee of the Company Notice,
the Employee may notify the Company in writing (the
"Employee Notice") if the Employee disagrees with such
determinations or calculations, setting forth the reasons
for any such disagreement. If the Company and the Employee
do not resolve such disagreement within 10 business days
following receipt by the Company of the Employee Notice, the
Company and the Employee shall agree upon a nationally
recognized accounting or compensation firm (the "Resolving
Firm") to make a determination with respect to such
disagreement. If the Employee and the Company are unable to
agree upon the Resolving Firm within 20 business days
following the Employee Notice, the New York office of
Towers, Xxxxxx shall be the Resolving Firm. Within 30
business days following the Employee Notice, if the
disagreement is not resolved by such time, each of the
Employee and the Company shall submit its position to the
Resolving Firm, which shall make a determination as to all
such disagreements within 30 days following the last of such
submissions, which determination shall be binding upon the
Employee and the Company. The Company shall pay all
reasonable expenses incurred by either party in connection
with the determinations, calculations, disagreements or
resolutions pursuant to this paragraph, including, but not
limited to, reasonable legal, consulting or other similar
fees.
(c) The Employee 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 a
Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than 10 business days after the
Employee 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 Employee
shall not pay such claim prior to the expiration of the 30
day period following the date on which the Employee 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 Employee in
writing prior to the expiration of such period that it
desires to contest such claim, the Employee 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 and reasonably satisfactory to
the Employee;
(iii) cooperate with the Company in
good faith in order to effectively contest such claim;
and
(iv) permit the Company to participate
in any proceedings relating to such claim;
provided, however, that the Company shall bear and pay
directly all costs and expenses (including, but not limited
to, additional interest and penalties and related legal,
consulting or other similar fees) incurred in connection
with such contest and shall indemnify and hold the Employee
harmless, on an after-tax basis, for any Excise Tax or other
tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of
costs and expenses.
(d) The Company shall control all proceedings taken in
connection with such contest and, at its sole option, may
pursue or forego 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 Employee to pay the tax claimed
and xxx for a refund or contest the claim in any permissible
manner, and the Employee 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 Employee to pay such claim
and xxx for a refund, the Company shall advance the amount
of such payment to the Employee on an interest-free basis,
and shall indemnify and hold the Employee harmless, on an
after-tax basis, from any Excise Tax or other 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 provided, further,
that if the Employee is required to extend the statute of
limitations to enable the Company to contest such claim, the
Employee may limit this extension solely to such contested
amount. 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 Employee 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. In addition, no position may be taken nor
any final resolution be agreed to by the Company without the
Employee's consent if such position or resolution could
reasonably be expected to adversely affect the Employee
(including any other tax position of the Employee unrelated
to the matters covered hereby).
(e) As a result of the uncertainty in the application
of Section 4999 of the Code at the time of the initial
determination by the Company or the Resolving Firm
hereunder, it is possible that Gross-Up Payments which will
not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required
to be made hereunder. In the event that the Company
exhausts its remedies and the Employee thereafter is
required to pay to the Internal Revenue Service an
additional amount in respect of any Excise Tax, the Company
or the Resolving Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment
shall promptly be paid by the Company to or for the benefit
of the Employee.
(f) If, after the receipt by Employee of an amount
advanced by the Company in connection with the contest of
Excise Tax claim, the Employee becomes entitled to receive
any refund with respect to such claim, the Employee shall
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
Employee of an amount advanced by the Company in connection
with an Excise Tax claim, a determination is made that
Employee shall not be entitled to any refund with respect to
such claim and the Company does not notify the Employee in
writing of its intent to contest the denial of such refund
prior to the expiration of 30 days after such determination,
such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall be offset, to
the extent thereof, by the amount of the Gross-Up Payment.
7. EFFECT ON OTHER ARRANGEMENTS.
Except to the extent expressly provided herein, no
provision of this Agreement shall affect or limit any interests
or rights vested in the Employee under any other agreement or
arrangement with the Employee or under any pension, profit-
sharing, medical or other insurance or other benefit plans of the
Company which may be in effect and in which the Employee may be
participating at any time.
8. CONFIDENTIALITY.
The Employee agrees to hold in confidence any and all
confidential information known to him concerning the Company and
its businesses so long as such information is not otherwise
publicly disclosed.
9. MISCELLANEOUS.
(a) Legal Expenses. The Company shall pay all costs
and expenses, including attorneys' fees, of the Company and, at
least quarterly, the Employee, in connection with any legal
proceedings, whether or not instituted by the Company, relating
to the interpretation or enforcement of this Agreement. In the
event that the provisions of this paragraph shall be determined
to be invalid or unenforceable in any respect, such declaration
shall not affect the remaining provisions of this Agreement,
which shall continue in full force and effect.
(b) Mitigation. All payments or benefits required by
the terms of this Agreement shall be made or provided without
offset, deduction, or mitigation on account of income the
Employee may receive from other employment or otherwise and the
Employee shall not have any obligation or duty to seek any other
employment or otherwise earn any amounts to reduce or mitigate
any payments required hereunder.
(c) Death of the Employee. In the event of the
Employee's death subsequent to Termination, all payments called
for hereunder shall be paid to the Employee's designated
beneficiary or beneficiaries, or to his estate if he has not
designated a beneficiary or beneficiaries.
(d) Notices. Any notice or other communication
provided for in this Agreement or contemplated hereby shall be
sufficiently given if given in writing and delivered by certified
mail, return receipt requested, and addressed, in the case of the
Company, to the Company at:
000 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxxx Xxxx, Xxx Xxxxxx 00000
Attention: Chairman of the Board
of Directors
and, in the case of the Employee, to the Employee at:
Either party may designate a different address by giving notice
of change of address in the manner provided above.
(e) Waiver. No waiver or modification in whole or in
part of this Agreement, or any term or condition hereof, shall be
effective against any party unless in writing and duly signed by
the party sought to be bound. Any waiver of any breach of any
provision hereof or any right or power by any party on one
occasion shall not be construed as a waiver of, or a bar to, the
exercise of such right or power on any other occasion or as a
waiver of any subsequent breach.
(f) Binding Effect; Successors. This Agreement shall
be binding upon and shall inure to the benefit of the Company and
the Employee and their respective heirs, legal representatives,
successors and assigns. If the Company shall be merged into or
consolidated with another entity, the provisions of this
Agreement shall be binding upon and inure to the benefit of the
entity surviving such merger or resulting from such
consolidation. The Company will require any successor (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets
of the Company, by agreement in form and substance satisfactory
to the Employee, to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had
taken place. The provisions of this paragraph shall continue to
apply to each subsequent employer of the Employee hereunder in
the event of any subsequent merger, consolidation or transfer of
assets of such subsequent employer.
(g) Plan Limitations. In the event the Company is
unable to provide any benefit required to be provided under this
Agreement through a plan sponsored by the Company or its
Affiliates, the Company shall, at its own cost and expense, take
appropriate actions to insure that alternative arrangements are
made so that equivalent benefits can be provided to the Employee,
including to the extent appropriate purchasing for the benefit of
the Employee (and if applicable the Employee's dependents)
individual policies of insurance providing benefits, which on an
after-tax basis, are equivalent to the benefits required to be
provided hereunder.
(h) Controlling Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New
Jersey applicable to contracts made and to be performed therein.
10. EFFECT ON PRIOR AGREEMENTS.
This Agreement contains the entire understanding
between the parties hereto and supersedes in all respects any
prior employment or severance agreement or understanding between
the Company (or any affiliate thereof) and the Employee.
IN WITNESS WHEREOF, the Company and the Employee have
executed this Agreement as of the day and year first above
written.
XXXXXXXXX-XXXX COMPANY
By
Employee
Schedule A
CERTAIN DEFINITIONS
As used in this Agreement, and unless the context
requires a different meaning, the following terms have the
meanings indicated:
"Affiliate", used to indicate a relationship with a
specified person, means a person that directly, or indirectly
through one or more intermediaries, controls, or is controlled
by, or is under common control with, such a specified person.
"Associate", used to indicate a relationship with a
specified person, means (i) any corporation, partnership, or
other organization of which such specified person is an officer
or partner; (ii) any trust or other estate in which such
specified person has a substantial beneficial interest or as to
which such specified person serves as trustee or in a similar
fiduciary capacity; (iii) any relative or spouse of such
specified person, or any relative of such spouse who has the same
home as such specified person, or who is a director or officer of
the Company or any of its parents or subsidiaries; and (iv) any
person who is a director, officer, or partner of such specified
person or of any corporation (other than the Company or any
wholly-owned subsidiary of the Company), partnership or other
entity which is an Affiliate of such specified person.
"Beneficial Owner" means the same as such term is
defined by Rule 13d-3 under the Securities Exchange Act of 1934,
as amended (or any successor provision at the time in effect);
provided, however, that any individual, corporation, partnership,
group, association, or other person or entity which has the right
to acquire any of the Company's outstanding securities entitled
to vote generally in the election of directors at any time in the
future, whether such right is contingent or absolute, pursuant to
any agreement, arrangement, or understanding or upon exercise of
conversion rights, warrants or options, or otherwise, shall be
deemed the Beneficial Owner of such securities.
"Board" means the Board of Directors of the Company
(or, if the Company is then a subsidiary of any other company, of
the ultimate parent company).
"Cause" means (i) any action by the Employee involving
willful malfeasance or willful gross misconduct having a
demonstrable adverse effect on the Company; (ii) substantial and
continuing refusal by the Employee in willful breach of this
Agreement to perform his employment duties hereunder; or
(iii) the Employee being convicted of a felony under the laws of
the United States or any state.
Termination of the Employee for Cause shall be
communicated by a Notice of Termination given within one year
after the Board (i) has knowledge of conduct or an event
allegedly constituting Cause; and (ii) has reason to believe that
such conduct or event could be grounds for Cause. For purposes
of this Agreement a "Notice of Termination" shall mean delivery
to the Employee of a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire
membership of the Company's Board at a meeting of that Board
called and held for the purpose (after reasonable notice to the
Employee ("Preliminary Notice") and reasonable opportunity for
the Employee, together with the Employee's counsel, to be heard
before the Board prior to such vote) of finding, in the good
faith opinion of the Board, that the Employee has engaged in the
conduct constituting Cause and specifying the particulars thereof
in detail. Upon the receipt of the Preliminary Notice, the
Employee shall have 30 days in which to appear with counsel or
take such other action as he desires on his behalf, and such 30-
day period is hereby agreed to by the parties as a reasonable
opportunity for the Employee to be heard. The Board shall no
later than 45 days after the receipt of the Preliminary Notice by
the Employee communicate its findings to Employee. A failure by
the Board to make its finding of Cause or to communicate its
conclusion within such 45-day period shall be deemed to be a
finding that the Employee has not engaged in the conduct
described herein. Any termination of the Employee's employment
(other than by death or Permanent Disability) within 45 days
after the date that the Preliminary Notice has been given to the
Employee shall be deemed to be a termination for Cause; provided,
however, that if during such period the Employee voluntarily
terminates other than for Good Reason or the Company terminates
the Employee other than for Cause, and the Employee is found (or
is deemed to be found) not to have engaged in the conduct
described herein, such termination shall not be deemed to be for
Cause.
"Change of Control Event" means the date (i) any
individual, corporation, partnership, group, association or other
person or entity, together with its Affiliates and Associates
(other than a trustee or other fiduciary holding securities under
an employee benefit plan of the Company), is or becomes the
Beneficial Owner of securities of the Company representing 20% or
more of the combined voting power of the Company's then
outstanding securities entitled to vote generally in the election
of directors; (ii) the Continuing Directors fail to constitute a
majority of the members of the Board; (iii) of consummation of
any transaction or series of transactions under which the Company
is merged or consolidated with any other company, other than a
merger or consolidation which would result in the shareholders of
the Company immediately prior thereto continuing to own (either
by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 70% of the combined
voting power of the voting securities of the Company or such
surviving entity or its parent corporation outstanding
immediately after such merger or consolidation; or (iv) of any
sale, lease, exchange or other transfer, in one transaction or a
series of related transactions, of all, or substantially all, of
the assets of the Company, other than any sale, lease, exchange
or other transfer to any person or entity where the Company owns,
directly or indirectly, at least 80% of the outstanding voting
securities of such person or entity or its parent corporation
after any such transfer.
"Continuing Director" means a director who either was a
member of the Board on the date hereof or who became a member of
the Board subsequent to such date and whose election, or
nomination for election by the Company's shareholders, was Duly
Approved by the Continuing Directors on the Board at the time of
such nomination or election, either by a specific vote or by
approval of the proxy statement issued by the Company on behalf
of the Board in which such person is named as nominee for
director, without due objection to such nomination, 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 or entity
other than the Board.
"Duly Approved by the Continuing Directors" means an
action approved by the vote of at least two-thirds of the
Continuing Directors then on the Board.
"Fiscal Year" means the fiscal year of the Company.
"Good Reason" means (i) a material adverse change in
the Employee's job responsibilities, title or status from those
in effect on the date hereof or as enhanced from time to time
which change continues for a period of at least 15 days after
written notice from the Employee; (ii) a reduction of the
Employee's base salary or target bonus, the failure to pay
Employee's salary or bonus when due, or the failure to maintain
on behalf of the Employee (and his or her dependents) benefits
which are at least as favorable in the aggregate to those
provided for in paragraph 4(b); (iii) the relocation of the
principal place of the Employee's employment to a location that
is more than 35 miles further from the Employee's residence than
such principal place of employment immediately prior to the
Change of Control Event, or the imposition of travel requirements
on the Employee not substantially consistent with such travel
requirements existing immediately prior to the Change of Control
Event; (iv) the failure of the Company to obtain the assumption
of, and the agreement to perform, this Agreement by any successor
as contemplated in paragraph 8(f); or (v) the failure of the
Company to perform any of its other material obligations under
this Agreement and the continuation of such failure for a period
of 15 days after written notice from the Employee.
"Permanent Disability", as applied to the Employee,
means that (i) he has been totally incapacitated by bodily injury
or disease so as to be prevented thereby from performing his
duties hereunder; (ii) such total incapacity shall have continued
for a period of six consecutive months; and (iii) such total
incapacity will, in the opinion of a qualified physician, be
permanent and continuous during the remainder of the Employee's
life.
"Termination" means (i) following the occurrence of a
Change of Control Event, (A) the termination of the Employee's
employment without Cause or (B) the resignation by an Employee
for Good Reason upon ten days' prior written notice (or such
shorter period as may be agreed upon between the Employee and the
Company), and (ii) prior to the occurrence of a Change of Control
Event, the termination of the Employee's employment or a material
adverse change in the Employee's job responsibilities, title or
status at the request of any individual or entity acquiring
ownership and control of the Company; provided, that such term
shall not include any termination of employment for Cause, any
resignation without Good Reason, or any termination of employment
on account of an Employee's death or Permanent Disability.
"Termination Date" shall mean the effective date of an
Employee's Termination; provided, that with respect to a
Termination that occurs prior to a Change of Control Event, the
effective date of such Termination shall be deemed to be the date
immediately following the Change of Control Event.
