April 3, 1995
Mr. ______________
__________________
__________________
RE: Special Severance Agreement
Dear _______,
Carpenter Technology Corporation (the "Company")
considers it essential to the best interests of its stockholders
to foster the continuous employment of key management personnel.
In this connection, the Board of Directors of the Company (the
"Board") recognizes that, as is the case with many publicly held
corporations, the possibility of a change in control may exist
and that such possibility, and the uncertainty and questions
which it may raise among management, may result in the departure
or distraction of management personnel to the detriment of the
Company and its stockholders.
The Board has determined that appropriate steps should
be taken to reinforce and encourage the continued attention and
dedication of members of the Company's management, including
yourself, to their assigned duties without distraction in the
face of potentially disturbing circumstances arising from the
possibility of a change in control of the Company, although no
such change is now contemplated.
In order to induce you to remain in the employ of the
Company and in consideration of your agreement set forth in
Subsection 2(ii) hereof, the Company agrees that you shall
receive the severance benefits set forth in this letter agreement
("Agreement") in the event your employment with the Company is
terminated subsequent to a "change in control of the Company" (as
defined in Section 2 hereof) under the circumstances described
below.
1. Term of Agreement. This Agreement shall commence
on the date hereof and shall continue in effect through December
31, 1998; provided, however, that commencing on January 1, 1999
and each January 1 thereafter, the term of this Agreement shall
automatically be extended for one additional year unless, not
later than the October 31 preceding each such January 1, the
Company shall have given notice that it does not wish to extend
this Agreement; provided, further, if a change in control of the
Company shall have occurred during the original or extended term
of this Agreement, this Agreement shall continue in effect for
the later of (i) the original or extended term or (ii) a period
of twenty-four (24) months beyond the month in which such change
in control occurred. Notwithstanding the foregoing, in no event
shall the term of this Agreement extend beyond the date that you
attain sixty-five years of age.
2. Change in Control. (i) No benefits shall be
payable hereunder unless there shall have been a change in
control of the Company, as set forth below. For purposes of this
Agreement, a "change in control of the Company" shall be deemed
to have occurred if (A) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), other than a trustee or other
fiduciary holding securities under an employee benefit plan of
the Company or a corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, is or
becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the
Company representing 25% or more of the combined voting power of
the Company's then outstanding securities; or (B) during any
period of two consecutive years (not including any period prior
to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board and any new
director (other than a director designated by a person who has
entered into an agreement with the Company to effect a
transaction described in clauses (A), (C) or (D) of this
Subsection) whose election by the Board or nomination for
election by the Company's stockholders was approved by a vote of
at least two-thirds (2/3) of the directors then still in office
who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved,
cease for any reason to constitute a majority thereof; or (C) the
stockholders of the Company approve a merger or consolidation of
the Company with any other corporation, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 75% of
the combined voting power of the voting securities of the Company
or such surviving entity outstanding immediately after such
merger or consolidation, or (D) the stockholders of the Company
approve a plan of complete liquidation of the Company or an
agreement for the sale or disposition by the Company of all or
substantially all the Company's assets.
(ii) For purposes of this Agreement, a "potential
change in control of the Company" shall be deemed to have
occurred if (A) the Company enters into an agreement, the
consummation of which would result in the occurrence of a change
in control of the Company, (B) any person (including the Company)
publicly announces an intention to take or to consider taking
actions which if consummated would constitute a change in control
of the Company; (C) any person, other than a trustee or other
fiduciary holding securities under an employee benefit plan of
the Company or a corporation owned, directly or indirectly, by
the stockholders of the Company in substantially the same
proportions as their ownership of stock of the Company, who is or
becomes the beneficial owner, directly or indirectly, of
securities of the Company representing 10% or more of the
combined voting power of the Company's then outstanding
securities, increases his beneficial ownership of such securities
by 5% or more of the combined voting power of the Company's then
outstanding securities on the date hereof; or (D) the Board
adopts a resolution to the effect that, for purposes of this
Agreement, a potential change in control of the Company has
occurred. You agree that, subject to the terms and conditions of
this Agreement, in the event of a potential change in control of
the Company, you will remain in the employ of the Company until
the earliest of (i) a date which is six (6) months from the
occurrence of such potential change in control of the Company,
(ii) the termination by you of your employment by reason of
Disability or Retirement as defined in Subsection 3(i), or (iii)
the occurrence of a change in control of the Company.
3. Termination Following Change in Control. If any
of the events described in Subsection 2(i) hereof constituting a
change in control of the Company shall have occurred, you shall
be entitled to the benefits provided in Subsection 4(iii) hereof
upon the subsequent termination of your employment during the
term of this Agreement unless such termination is (A) because of
your death, Disability or Retirement, (B) by the Company for
Cause, or (C) by you other than for Good Reason.
(i) Disability; Retirement. If, as a result of
your incapacity due to physical or mental illness, you shall have
been absent from the full-time performance of your duties with
the Company for twenty-four (24) consecutive months (or twelve
(12) consecutive months if you have been employed by the Company
for less than five (5) years as of the date your absence from
full-time performance of duties under this Subsection begins),
and within thirty (30) days after written notice of termination
is given you shall not have returned to the full-time performance
of your duties, your employment may be terminated for
"Disability". Termination by the Company or you of your
employment based on "Retirement" shall mean termination with your
consent in accordance with the Company's Pension Plan (as
hereafter defined) including early retirement, generally
applicable to its salaried employees, provided, however, that
termination based on "Retirement" shall not include retirement in
conjunction with termination by you for Good Reason.
(ii) Cause. Termination by the Company of your
employment for "Cause" shall mean termination upon (A) the
willful and continued failure by you to substantially perform
your duties with the Company (other than any such failure
resulting from your incapacity due to physical or mental illness
or any such actual or anticipated failure after the issuance of a
Notice of Termination, by you for Good Reason as defined in
Subsections 3(iv) and 3(iii), respectively) after a written
demand for substantial performance is delivered to you by the
Board, which demand specifically identifies the manner in which
the Board believes that you have not substantially performed your
duties, or (B) the willful engaging by you in conduct which is
demonstrably and materially injurious to the Company, monetarily
or otherwise. For purposes of this Subsection, no act, or
failure to act, on your part shall be deemed "willful" unless
done, or omitted to be done, by you not in good faith and without
reasonable belief that your action or omission was in the best
interest of the Company. Notwithstanding the foregoing, you
shall not be deemed to have been terminated for Cause unless and
until there shall have been delivered to you a copy of a
resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board called and held for such purpose (after
reasonable notice to you and an opportunity for you, together
with your counsel, to be heard before the Board), finding that in
the good faith opinion of the Board you were guilty of conduct
set forth above in clauses (A) or (B) of the first sentence of
this Subsection and specifying the particulars thereof in detail.
(iii) Good Reason. You shall be entitled to
terminate your employment for Good Reason. For purposes of this
Agreement, "Good Reason" shall mean, without your express written
consent, the occurrence after a change in control of the Company
of any of the following circumstances unless, in the case of
paragraphs (A), (E), (F), (G) or (H), such circumstances are
fully corrected prior to the Date of Termination specified in the
Notice of Termination, as defined in Subsections 3(v) and 3(iv),
respectively, given in respect thereof:
(A) the assignment to you of any duties inconsistent
with your present status as Vice President, General Counsel
and Secretary of the Company (or such other title or titles
as you may be holding immediately prior to the change in
control of the Company) or a substantial adverse alteration
in the nature or status of your responsibilities from those
in effect immediately prior to the change in control of the
Company;
(B) a reduction by the Company in your annual base
salary as in effect on the date of the change in control of
the Company;
(C) the relocation of the Company's principal
executive offices to a location outside of Berks County,
Pennsylvania (or, if different, the metropolitan area in
which such offices are located immediately prior to the
change in control of the Company) or the Company's requiring
you to be based anywhere other than the Company's principal
executive offices except for required travel on the
Company's business to an extent substantially consistent
with your present business travel obligations;
(D) the failure by the Company, without your consent,
to pay to you any portion of your current compensation, or
to pay to you any portion of an installment of deferred
compensation under any deferred compensation program of the
Company, within seven (7) days of the date such compensation
is due;
(E) the failure by the Company to continue in effect
any compensation plan in which you participate immediately
prior to the change in control of the Company which is
material to your total compensation, including but not
limited to the Company's stock option plans, Annual
Executive Compensation Plan, Profit Sharing Plan for
Employees of Carpenter Technology Corporation and the
Flexible Savings Plan of Carpenter Technology Corporation or
any substitute plans adopted prior to the change in control,
unless an equitable arrangement (embodied in an ongoing
substitute or alternative plan) has been made with respect
to such plan, or the failure by the Company to continue your
participation therein (or in such substitute or alternative
plan) on a basis not materially less favorable, both in
terms of the amount of benefits provided and the level of
your participation relative to other participants, as
existed at the time of the change in control;
(F) the failure by the Company to continue to provide
you with benefits substantially similar to those enjoyed by
you under the Company's General Retirement Plan for
Employees of Carpenter Technology Corporation, Earnings
Adjustment Plan of Carpenter Technology Corporation, Benefit
Equalization Plan of Carpenter Technology Corporation,
Supplemental Retirement Plan for Executives of Carpenter
Technology Corporation and Officers' Supplemental Retirement
Plan of Carpenter Technology Corporation (the "Pension Plan"
or "Pension Plans") or under any of the Company's other
deferred compensation plans, life insurance, medical, health
and accident, or disability plans in which you were
participating at the time of the change in control of the
Company, the taking of any action by the Company which would
directly or indirectly materially reduce any of such
benefits or deprive you of any material fringe benefit
enjoyed by you at the time of the change in control of the
Company, or the failure by the Company to provide you with
the number of paid vacation days to which you are entitled
on the basis of years of service with the Company in
accordance with the Company's normal vacation policy for
officers in effect at the time of the change in control of
the Company;
(G) the failure of the Company to obtain a
satisfactory agreement from any successor to assume and
agree to perform this Agreement, as contemplated in Section
5 hereof; or
(H) any purported termination of your employment which
is not effected pursuant to a Notice of Termination
satisfying the requirements of Subsection (iv) below (and,
if applicable, the requirements of Subsection (ii) above);
for purposes of this Agreement, no such purported
termination shall be effective.
Your right to terminate your employment pursuant to this
Subsection shall not be affected by your incapacity due to
physical or mental illness. Your continued employment shall not
constitute consent to, or a waiver of rights with respect to, any
circumstance constituting Good Reason hereunder, subject to the
applicable notice requirements of Subsection (iv) below.
(iv) Notice of Termination. Any purported
termination of your employment by the Company or by you shall be
communicated by written Notice of Termination to the other party
hereto in accordance with Section 6 hereof. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this
Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for
termination of your employment under the provision so indicated.
A Notice of Termination given by you indicating termination for
Good Reason pursuant to Subsection (iii) above must be
communicated within six (6) months from the date on which the
facts and circumstances believed by you to constitute such Good
Reason first became known to you or reasonably ascertainable by
you.
(v) Date of Termination, Etc. "Date of
Termination" shall mean (A) if your employment is terminated for
Disability, thirty (30) days after Notice of Termination is given
(provided that you shall not have returned to the full-time
performance of your duties during such thirty (30) day period),
and (B) if your employment is terminated pursuant to Subsection
(ii) or (iii) above or for any other reason (other than
Disability), the date specified in the Notice of Termination
(which, in the case of a termination pursuant to Subsection (ii)
above shall not be less than thirty (30) days, and in the case of
a termination pursuant to Subsection (iii) above shall not be
less than fifteen (15) nor more than sixty (60) days,
respectively, from the date such Notice of Termination is given);
provided that if within fifteen (15) days after any Notice of
Termination is given, or, if later, prior to the Date of
Termination (as determined without regard to this proviso), the
party receiving such Notice of Termination notifies the other
party that a dispute exists concerning the termination, the Date
of Termination shall be the date on which the dispute is finally
determined, either by mutual written agreement of the parties, by
a binding arbitration award, or by a final judgment, order or
decree of a court of competent jurisdiction (which is not
appealable or with respect to which the time for appeal therefrom
has expired and no appeal has been perfected); provided further
that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party
giving such notice pursues the resolution of such dispute with
reasonable diligence. Notwithstanding the pendency of any such
dispute, the Company will continue to pay you your full
compensation in effect when the notice giving rise to the dispute
was given (including, but not limited to, base salary) and
continue you as a participant in all compensation, benefit and
insurance plans in which you were participating whether or not
specifically referenced in this Agreement when the notice giving
rise to the dispute was given, until the dispute is finally
resolved in accordance with this Subsection. Amounts paid under
this Subsection are in addition to all other amounts due under
this Agreement and shall not be offset against or reduce any
other amounts due under this Agreement.
4. Compensation Upon Termination or During Disability.
Following a change in control of the Company, as defined by
Subsection 2(i), upon termination of your employment or during a
period of Disability you shall be entitled to the following
benefits:
(i) During any period that you fail to perform
your full-time duties with the Company as a result of incapacity
due to physical or mental illness, you shall continue to receive
the benefits payable to you under the Company's Salary
Continuation Program, together with all other compensation
payable to you during such period, until this Agreement is
terminated pursuant to Section 3(i) hereof. Thereafter, or in
the event your employment shall be terminated by the Company or
by you for Retirement, or by reason of your death, your benefits
shall be determined under the Company's retirement, insurance and
other compensation plans and programs then in effect in
accordance with the terms of such programs.
(ii) If your employment shall be terminated by
the Company for Cause or by you other than for Good Reason,
Disability, death or Retirement, the Company shall pay you your
full base salary through the Date of Termination at the rate in
effect at the time Notice of Termination is given, plus all other
amounts to which you are entitled under any compensation plan of
the Company at the time such payments are due, and the Company
shall have no further obligations to you under this Agreement.
(iii) If your employment by the Company shall be
terminated (a) by the Company other than for Cause, Retirement or
Disability or (b) by you for Good Reason, then you shall be
entitled to the benefits provided below:
(A) the Company shall pay you your full base salary
through the Date of Termination at the rate in effect at the
time Notice of Termination is given, plus all other amounts
to which you are entitled under any compensation plan of the
Company, at the time such payments are due, except as
otherwise provided below;
(B) in lieu of any further (i) salary payments to you
for periods subsequent to the Date of Termination or (ii)
payments to you under the Company's Salary Continuation
Program, the Company shall pay as severance pay to you a
lump sum severance payment equal to two (2) times the sum of
(x) your annual base salary in effect immediately prior to
the occurrence of the circumstance giving rise to the Notice
of Termination given in respect thereof, and (y) the highest
annual amount earned by you as Profit-Sharing and bonus
compensation for the three prior Company fiscal years
preceding the fiscal year in which the Date of Termination
occurs;
(C) in lieu of shares of common stock of the Company
("Company Shares") issuable upon exercise of outstanding
options ("Options") or any related stock appreciation rights
("Rights"), if any, granted to you under the Long-Term
Incentive Program (which Options and Rights shall be
canceled upon the making of the payment referred to below),
you shall receive an amount in cash equal to the product of
(i) the excess of the higher of the closing price of the
Company's Shares as reported on the New York Stock Exchange-
Composite Tape on or nearest the Date of Termination (or, if
not listed on such exchange, on the nationally recognized
exchange or Quotation System on which trading volume in
Company Shares is highest) or the highest per share price
for Company Shares actually paid in connection with any
change in control of the Company, over the per share
exercise price of each Option or Right held by you (whether
or not then fully exercisable), times (ii) the number of
Company Shares covered by each such Option or Right; and
(D) an amount in cash equal to the sum of (i) the
present value of your accrued benefit (determined by using
the ongoing actuarial assumptions in effect immediately
prior to your Date of Termination under the Company's
defined benefit plan in which you are a participant) under
any Pension Plans or other defined benefit plan sponsored by
the Company and (ii) your account balance under any defined
contribution plan sponsored by the Company, in either case
to the extent that such accrued benefit or account balance,
as the case may be, shall not be fully vested at the time of
your Date of Termination.
(E) In addition to the retirement benefits to which
you are entitled under the Pension Plan or any successor
plans thereto, the Company shall pay to you a lump sum
amount, in cash, equal to the actuarial equivalent of the
excess of (x) the retirement pension (determined as a
straight life annuity commencing at Normal Retirement Age
or, if later, two years after the Date of Termination) which
you would have accrued under the terms of the Pension Plan
(without regard to any amendment to the Pension Plan made
subsequent to a change in control and on or prior to the
Date of Termination, which amendment adversely affects in
any manner the computation of retirement benefits
thereunder), determined as if you were fully vested
thereunder and had accumulated (after the Date of
Termination) twenty-four (24) additional months of service
credit thereunder at your highest annual rate of
compensation during the twelve (12) months immediately
preceding the Date of Termination, over (y) the retirement
pension (determined as a straight life annuity commencing at
Normal Retirement Age which you had then accrued pursuant to
the provisions of the Pension Plan). For the purposes of
this Section 4 (iii) (E), the actuarial value of the
retirement benefits shall be calculated as the present value
of a single life annuity using the UP 1984 mortality table
adjusted one year forward. The interest rate used in the
calculation shall be 120% of the rate used by the PBGC for
purposes of determining the present value of lump sum
distributions on plan terminations.
(F) The payments provided for in paragraphs (B), (C),
(D) and (E), above, shall be made not later than the fifth
day following the Date of Termination, provided, however,
that if the amounts of such payments cannot be finally
determined on or before such day, the Company shall pay to
you on such day an estimate, as determined in good faith by
the Company, 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
but in no event later then the thirtieth day after the Date
of Termination. 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 you, 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).
(G) The Company also shall pay to you all legal fees
and expenses incurred by you as a result of such termination
(including all such legal fees and legal expenses, if any,
incurred in contesting or disputing any such termination or
in seeking to obtain or enforce any right or benefit
provided by this Agreement or in connection with any tax
audit or proceeding to the extent attributable to the
application of Section 4999 of the Code to any payment or
benefit provided hereunder). Such payments shall be made at
the later of the times specified in paragraph (F) above, or
within five (5) days after your request for payment
accompanied with such evidence of fees and expenses incurred
as the Company reasonably may require.
(iv) Notwithstanding any other provisions of this
Agreement, in the event that any payment or benefit received or
to be received by you in connection with a change in control or
the termination of your employment (whether payable pursuant to
the terms of this Agreement or any other plan, arrangement or
agreement with the Company, its successors, any person whose
actions result in a change in control or any person affiliated
with (or which, as a result of the completion of the transactions
causing a change in control, will become affiliated) the Company
or such person within the meaning of Section 1504 of the Code)
(all such payments and benefits being hereinafter called the
"Severance Payments") would not be deductible (in whole or part),
by the Company, an affiliate or person making such payment or
providing such benefit as a result of Section 280G of the Code,
then, to the extent necessary to make such portion of the
Severance Payments deductible (and after taking into account any
reduction in the Severance Payments provided by reason of Section
280G of the Code in such other plan, arrangement or agreement),
(A) the cash Severance Payments shall first be reduced (if
necessary, to zero), and (B) all other non-cash Severance
Payments shall next be reduced. For purposes of this limitation
(i) no portion of the Severance Payments the receipt or enjoyment
of which you shall have effectively waived in writing prior to
the Date of Termination shall be taken into account, (ii) no
portion of the Severance Payments shall be taken into account
which in the opinion of tax counsel selected by the Company's
independent auditors and reasonably acceptable to you does not
constitute a "parachute payment" within the meaning of Section
280G(b)(2) of the Code, including by reason of Section
280G(b)(4)(A) of the Code, (iii) the Severance Payments shall be
reduced only to the extent necessary so that the Severance
Payments (other than those referred to in clauses (i) or (ii)) in
their entirety constitute reasonable compensation for services
actually rendered within the meaning of Section 280G(b)(4)(B) of
the Code or are otherwise not subject to disallowance as
deductions, in the opinion of the tax counsel referred to in
clause (ii); and (iv) the value of any non-cash benefit or any
deferred payment or benefit included in the Severance Payments
shall be determined by the Company's independent auditors in
accordance with the principles of Sections 280G(d)(3) and (4) of
the Code.
(v) If your employment shall be terminated (A) by
the Company other than for Cause, Retirement or Disability or (B)
by you for Good Reason, then for a twenty-four (24) month period
after such termination, the Company shall arrange to provide you
at the Company's expense with life, disability, accident and
health insurance benefits substantially similar to those which
you are receiving immediately prior to the Notice of Termination.
Benefits otherwise receivable by you pursuant to this Subsection
4(v) shall be reduced to the extent comparable benefits are
actually received by you during the twenty-four (24) month period
following your termination, and any such benefits actually
received by you shall be reported to the Company.
(vi) You shall not be required to mitigate the
amount of any payment provided for in this Section 4 by seeking
other employment or otherwise, nor shall the amount of any
payment or benefit provided for in this Section 4 be reduced by
any compensation earned by you as the result of employment by
another employer, by retirement benefits, by offset against any
amount claimed to be owed by you to the Company, or otherwise
except as specifically provided in this Section 4.
(vii) In addition to all other amounts payable to
you under this Section 4, you shall be entitled to receive all
benefits payable to you, at the respective time or times such
payments are due, under the Pension Plans, the Flexible Savings
Plan of Carpenter Technology Corporation and any other plan or
agreement relating to retirement benefits.
5. Successors; Binding Agreement. (i) The Company
will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company 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. Failure of
the Company to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this
Agreement and shall entitle you to compensation from the Company
in the same amount and on the same terms as you would be entitled
to hereunder if you terminate your employment for Good Reason
following a change in control of the Company, except that for
purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Date of
Termination. As used in this Agreement, "Company" shall mean the
Company as hereinbefore defined and any successor to its business
and/or assets as aforesaid which assumes and agrees to perform
this Agreement by operation of law, or otherwise.
(ii) This Agreement shall inure to the benefit of
and be enforceable by your personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If you should die while any amount would
still be payable to you hereunder if you had continued to live,
all such amounts, unless otherwise provided herein, shall be paid
in accordance with terms of this Agreement to your devisee,
legatee or other designee or, if there is no such designee, to
your estate.
6. Notice. For the purpose of this Agreement,
notices and all other communications provided for in the
Agreement shall be in writing and shall be deemed to have been
duly given when delivered or mailed by United States registered
mail, return receipt requested, postage pre-paid, addressed to
the respective addresses set forth on the first page of this
Agreement, provided that all notice to the Company shall be
directed to the attention of the Board with a copy to the
Secretary of the Company, or to such other address as either
party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be
effective only upon receipt.
7. Miscellaneous. No provision of this Agreement may
be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing and signed by
you and such officer as may be specifically designated by the
Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such
other party shall be deemed a waiver of similar of dissimilar
provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or
otherwise, express or implied, with respect to the subject matter
hereof have been made by either party which are not expressly set
forth in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed
by the laws of the State of Delaware. All references to sections
of the Exchange Act or the Code shall be deemed also to refer to
any successor provisions to such sections. Any payments provided
for hereunder shall be paid net of any applicable withholding
required under federal, state or local law. The obligations of
the Company under Section 4 shall survive the expiration of the
term of this Agreement.
8. Validity. The invalidity or unenforceability of
any provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
9. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the
same instrument.
10. Arbitration. Any dispute or controversy arising
under or in connection with this Agreement shall be settled, at
the Company's expense, exclusively by arbitration in Berks
County, Pennsylvania, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having
jurisdiction; provided, however, that you shall be entitled to
seek specific performance of your right to be paid until the Date
of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
If this letter sets forth our agreement on the subject
matter hereof, kindly sign and return to the Company the enclosed
copy of this letter which will then constitute our agreement on
this subject.
Sincerely,
By: _______________________________
President, Chairman and CEO
Agreed to this ____ day
of ____________________
______________________________