Exhibit No. (10)b
KIMBERLY-CLARK CORPORATION
EXECUTIVE SEVERANCE PLAN
As
Amended and Restated
As of November 12, 2002
1. Preamble and Statement of Purpose. The purpose of this Plan
is to assure the Corporation that it will have the continued dedication of,
and the availability of objective advice and counsel from, key executives of the
Corporation notwithstanding the possibility, threat or occurrence of a change of
control of the Corporation.
In the event the Corporation receives any proposal from a third person
concerning a possible business combination with the Corporation, or acquisition
of the Corporation's equity securities, or otherwise considers or pursues a
transaction that could lead to a change of control, the Board of Directors of
the Corporation (the "Board") believes it imperative that the Corporation and
the Board be able to rely upon key executives to continue in their positions and
be available for advice, if requested, without concern that those individuals
might be distracted by the personal uncertainties and risks created by such a
possibility.
Should the Corporation receive or consider any such proposal or
transaction, in addition to their regular duties, such key executives may be
called upon to assist in the assessment of the proposal or transaction, to
advise management and the Board as to whether the proposal or transaction would
be in the best interest of the Corporation and its stockholders, and to take
such other actions as the Board might determine to be appropriate.
2. Definitions. As used in this Plan, the following terms
shall have the following respective meanings:
(a) Agreements: Executive Severance Agreements in
substantially the forms approved by the Board and attached hereto
as Exhibit A (for Tier I Participants) or Exhibit B (for Tier
II Participants).
(b) Annual Bonus Amount: For any Participant, the
Target-level award payable to the Participant for the year in
which the Relevant Date occurred (or, if not then established, for
the preceding year) or, if
higher, for any subsequent year that
begins before the Qualified Termination of Employment, under the
Kimberly-Clark Corporation Executive Officer Achievement Award
Program or the Kimberly-Clark Corporation Management Achievement
Award Program, as applicable, or any successor or additional plan.
(c) Cause: The term "Cause" shall mean any of the
following:
(i) the commission by the Participant of a felony;
(ii) the Participant's dishonesty, habitual neglect or
incompetence in the management of the affairs of the
Corporation;
or
(iii) the refusal or failure by the Participant to
act in accordance with any lawful directive
or order of the Corporation, or an act or
failure to act by the Participant which is
in bad faith and which is detrimental to the
Corporation.
(d) Change of Control: A "Change of Control" shall be
deemed to have taken place upon the first of the following to
occur: (i) a third person, including a "group" as defined in
Section 13(d)(3) of the Securities Exchange Act of 1934,
acquires shares of the Corporation having 20% or more of the
total number of votes that may be cast for the election of
directors of the Corporation; or (ii) as the result of any
cash tender or exchange offer, merger or other business
combination, sale of assets or contested election, or any
combination of the foregoing transactions (a "Transaction"),
the persons who were directors of the Corporation before the
Transaction shall cease to constitute a majority of the Board
of Directors of the Corporation or any successor to the
Corporation.
(e) Code: The Internal Revenue Code of 1986, as amended.
(f) Committee: The Compensation Committee of the Board.
(g) Corporation: Kimberly-Clark Corporation and any
successor thereto that assumes this Plan and the Agreements
pursuant to Section 13 below.
(h) Eligible Executive: Those key executives of the
Corporation and its Subsidiaries who are from time to time
designated by the Board as, or who pursuant to criteria
established by the Board or the Committee are, eligible to receive
an Agreement.
(i) Equity Plans: The Kimberly-Clark Corporation 2001
Equity Participation Plan, the Kimberly-Clark Corporation 1999
Restricted Stock Plan, the Kimberly-Clark Corporation 1992 Equity
Participation Plan, and any successor or additional plans under
which a Participant receives stock options, restricted stock or
other equity-based compensation.
(j) Excise Tax: The excise tax imposed by Section 4999 of
the Code, together with any interest or penalties imposed with
respect to such excise tax.
(k) Fair Market Value: With respect to any publicly
traded equity security, the reported closing price of such
security on the relevant date as reported on the composite list
used by The Wall Street Journal for reporting stock prices, or, if
no such sale shall have been made on that day, on the last
preceding day on which there was such a sale; and with respect to
any other property, the fair market value thereof as determined by
the Committee in good faith.
(l) Good Reason: Termination by the Participant for "Good
Reason" shall mean the Participant's termination of his or her
employment after the occurrence (without the Participant's
express written consent) of any one of the following acts by the
Corporation, or failures by the Corporation to act (subject to
the Corporation's ability to correct as set forth below):
(i) the assignment to the Participant of any duties
inconsistent with the Participant's status as a key
executive officer of the Corporation or a substantial
adverse alteration in the nature or status of the
Participant's responsibilities and position from
those in effect immediately prior to the Change of
Control, other than such alteration primarily
attributable
to the fact that the Corporation is no longer a
public company;
(ii) a reduction by the Corporation of the
Participant's annual base salary by five percent or
more as in effect immediately prior to the Change of
Control, except for across-the-board salary
reductions similarly affecting all key executives of
the Corporation;
(iii) the Corporation's requiring the Participant to be
based at a location other than: (A) the location of
the Participant's office as of the date of the Change
of Control or another location within 50 miles from
that location; (B) the location of the headquarters
of the Corporation; or (C) the location of the
headquarters of one of its centers of operation;
provided, that required travel on the Corporation's
business to an extent substantially consistent with
the Participant's business travel obligations as of
the date of the Change of Control shall not be
considered Good Reason;
(iv) the failure of the Corporation to pay as soon as
administratively feasible, after notice from the
Participant, any portion of the Participant's current
compensation;
(v) the failure of the Corporation to continue in effect
any compensation plan in which the Participant
participates immediately prior to the Change of
Control which is material to the Participant's total
compensation, including but not limited to the
Corporation's stock option, incentive compensation,
and bonus plans, or any substitute plans adopted
prior to the Change of Control, unless an equitable
arrangement (which is embodied in an ongoing
substitute or alternative plan but which n eed not
provide the Participant with equity-based incentives)
has been made with respect to such plan, or the
failure by the Corporation to continue the
Participant's participation therein (or in such
substitute or alternative plan) on a basis not
materially less favorable than the benefits provided
to other participants;
(vi) the failure by the Corporation to continue to provide
the Participant with benefits substantially similar
to those enjoyed by the Participant under any of the
Corporation's pension, life insurance, medical,
health and accident, or disability plans in which the
Participant was participating at the time of the
Change of Control, the taking of any action by the
Corporation which would directly or indirectly
materially reduce any of such benefits or deprive the
Participant of any material fringe benefit enjoyed by
the Participant at the time of the Change of Control,
or the failure by the Corporation to provide the
Participant with the number of paid vacation days to
which the Participant is entitled on the basis of
years of service with the Corporation in accordance
with the Corporation's normal vacation policy in
effect at the time of the Change of Control.
The Participant's right to terminate the Participant's
employment for Good Reason shall not be affected by the
Participant's incapacity due to physical or mental illness.
However, in order to terminate employment for Good Reason, (1)
the Participant must give the Corporation a notice setting forth
the circumstances of the act or failure to act alleged to
constitute Good Reason within 30 days after the Participant first
has actual notice of such act or failure, and stating that the
Participant has determined that such act or failure
constitutes "Good Reason" hereunder, (2) the Corporation
must fail to correct such act or failure within 30 days after
it receives such notice from the Participant, and (3) the
Participant must actually terminate his or her employment
during the period of 30 days beginning 30 days after the
Corporation receives such notice.
(m) Multiplier: For a Tier I Participant, three; and for
a Tier II Participant, two.
(n) Net After Tax Receipt: The Value of a Payment, net of
all taxes imposed on a Tier II Participant with respect thereto
under Sections
1 and 4999 of the Code, determined by applying
the highest marginal rate under Section 1 of the Code which
applied to the Tier II Participant's taxable income for the
immediately preceding taxable year.
(o) Parachute Value: With respect to a Payment, the
present value as of the date of the change of control for purposes
of Section 280G of the Code of the portion of such Payment that
constitutes a "parachute payment" under Section 280G(b)(2), as
determined by the Accounting Firm for purposes of determining
whether and to what extent the Excise Tax will apply to such
Payment.
(p) Participant: An Eligible Executive who is a party to
an Agreement which has not been terminated in accordance with the
terms of this Plan.
(q) Payment: Any payment or distribution in the nature of
compensation (within the meaning of Section 280G(b)(2) of the
Code) to or for the benefit of a Participant, whether paid or
payable pursuant to this Plan or otherwise.
(r) Qualified Termination of Employment: The termination
of a Participant's employment with the Corporation and/or its
Subsidiaries either (i) within the two(2) year period following a
Change of Control of the Corporation (A) by the Corporation
without Cause, (B) by the Participant with Good Reason or (C) in
the case of a Tier I Participant only, by the Participant for any
reason during the period of 30 days beginning on the first
anniversary of the date of the Change of Control, or (ii) by the
Corporation without Cause before a Change of Control, if a Change
of Control occurs within one year after such termination and it is
reasonably demonstrated by the Participant that such termination
of employment was at the request of a third party that had taken
steps reasonably calculated to effect a Change of Control or
otherwise arose in connection with or in anticipation of a Change
of Control. A transfer of employment for administrative purposes
among the Corporation and its Subsidiaries shall not be deemed a
Qualified Termination of Employment, but if such a transfer
results in the occurrence of Good Reason, the affected Participant
shall
have the right to terminate employment for Good Reason and
such termination shall be a Qualified Termination of Employment.
(s) Reduced Amount: With respect to a Participant, the
greatest aggregate amount of Separation Payments which (a) is less
than the sum of all Separation Payments and (b) results in
aggregate Net After Tax Receipts which are equal to or greater
than the Net After Tax Receipts which would result if the
Participant were paid the sum of all Separation Payments.
(t) Relevant Date: In the case of a Qualified Termination
of Employment as described in clause (ii) of the definition of
"Qualified Termination of Employment," the date of such
Qualified Termination of Employment and, in all other cases, the
date of the Change of Control.
(u) Separation Payment: With respect to a Participant, a
Payment paid or payable to the Participant pursuant to this Plan
or an Agreement (disregarding Section 9 of this Plan).
(v) Severance Period: For a Tier I Participant, the
period of three years beginning on the date of the Qualified
Termination of Employment; and for a Tier II Participant, the
period of two years beginning on the date of the Qualified
Termination of Employment.
(w) Subsidiary: Any domestic or foreign corporation at
least twenty percent (20%) of whose shares normally entitled to
vote in electing directors is owned directly or indirectly by the
Corporation or by other Subsidiaries.
(x) Tier I Participant: A Participant whose Agreement
indicates that he or she is a Tier I Participant.
(y) Tier II Participant: A Participant whose Agreement
indicates that he or she is a Tier II Participant.
(z) Value: With respect to a Payment, the economic
present value of a Payment as of the date of the change of control
for purposes of Section 280G of the Code, as determined by the
Accounting Firm using the discount rate required by Section
280G(d)(4) of the Code.
3. Participation; Agreements. Eligible Executives shall be
proffered an Agreement and upon execution and delivery thereof by the
Eligible Executive evidencing such Eligible Executive's agreement not to
voluntarily leave the employ of the Corporation and its Subsidiaries and to
continue to render services during the pendency of any threatened Change of
Control of the Corporation, such Eligible Executive shall become a Participant.
Each Agreement shall indicate whether the Participant to whom it is proffered
will be a Tier I Participant or a Tier II Participant. A Participant shall cease
to be a Participant in the Plan upon the termination of the Participant's
Agreement in accordance with its terms.
4. Termination of Employment of Participants. Nothing in this
Plan shall be deemed to entitle a Participant to continued employment with
the Corporation and its Subsidiaries and the rights of the Corporation to
terminate the employment of a Participant shall continue as fully as though this
Plan were not in effect, provided that any Qualified Termination of Employment
shall entitle the Participant to the benefits herein provided. In addition,
nothing in this Plan shall be deemed to entitle a Participant under this Plan to
any rights, or to payments under this Plan, with respect to any plan in which
the Participant was not a participant prior to a Qualified Termination of
Employment.
5. Payments Upon Qualified Termination of Employment. In the
event of a Qualified Termination of Employment of a Participant, a lump sum
cash payment or payments shall be made to such Participant as compensation for
services rendered, in an amount or amounts (subject to any applicable payroll or
other taxes required to be withheld) equal to the sum of the amounts specified
in subsections (a) through (i) below, such payments to be made within 10 days
following the last day of employment of the Participant with the Corporation
except to the extent not yet calculable, in which case such portions shall be
paid as soon as practicable following the ability to calculate the amount:
(a) Salary Plus Incentive Compensation. A lump sum
amount equal to the Multiplier times the sum of (a) the
Participant's annual base salary at the rate in effect
immediately prior to the Relevant Date or, if higher,
immediately before the Qualified Termination of Employment and
(b) the Annual Bonus Amount;
(b) Equity Participation Plan - Participation Shares.
A lump sum amount equal to the payment to which the
Participant would have been entitled had all Participation
Shares awarded to the Participant under any Equity Plan that
were outstanding on the Relevant Date and which had not
matured as of the date of termination of employment and which
will not mature as a result of the termination of employment,
matured, such payment to be determined as though such award
had matured and its book value at maturity been determined on
the last day of the calendar quarter preceding the date of
termination of the Participant's employment;
(c) Equity Participation Plan - Option Shares (i)
Except with respect to incentive stock options outstanding at
the effective date of the Participant's Agreement for which
the Option Price is lower than the Fair Market Value of the
Stock at such date, all stock options that were granted to the
Participant under any of the Equity Plans, including but not
limited to any substitute plans adopted prior to the Relevant
Date (or any successor or additional plan), that were
outstanding both on the Relevant Date and immediately before
the Qualified Termination of Employment, shall vest and become
exercisable and the Qualified Termination of Employment of the
Participant shall be deemed a retirement for purposes of
exercising the stock options under the terms of the Equity
Plans, and (ii) notwithstanding the foregoing, with respect to
Incentive Stock Options that were outstanding at the effective
date of the Participant's Agreement for which the Option Price
is lower than the Fair Market Value of the Stock at such date,
and which were forfeited upon the termination of the
Participant's employment, a lump sum amount equal to the
excess of (I) the aggregate Fair Market Value on the date of
termination of the shares of common stock of the Corporation
or other equity security then subject to such Incentive Stock
Options over (II) the aggregate option price for such shares
or other equity security;
(d) Restricted Stock. With respect to restricted
stock granted to the Participant under any of the Equity Plans
that were outstanding but not vested on the Relevant Date and
which are forfeited as a result of the termination of the
Participant's employment, a lump sum amount equal to
the Fair Market Value of an equivalent number of shares of
common stock of the Corporation (or such other equity security
into which the restricted stock has been converted) on the
date of termination of employment;
(e) Successor or Additional Stock Appreciation Right,
Incentive Compensation, and Bonus Plan. A lump sum amount
equal to the payment to which the Participant would have been
entitled had all amounts awarded or granted to the
Participant, vested or matured, under any stock appreciation
right, incentive compensation, and bonus plans, which are
adopted after the effective date of the Participant's
Agreement and in which the Participant participates
immediately prior to the Relevant Date, including but not
limited to any substitute plans adopted prior to the Relevant
Date (or any successor or additional plan), which had not
vested or matured as of the date of termination of employment
and will not vest or mature as a result of the termination of
the Participant's employment, such payment to be determined as
though such award or grant had vested or matured on the date
of termination of the Participant's employment;
(f) Incentive Investment Plan. A lump sum amount
equal to any benefits under the Kimberly-Clark Corporation
Salaried Employees Incentive Investment Plan (or any successor
or additional plan) that the Participant has accrued, but that
are forfeited as a result of his or her termination of
employment, based upon the value of the Participant's account
as of the most recent valuation date before the date of the
Qualified Termination of Employment;
(g) Retirement Contribution Plan. A lump sum amount
equal to (a) in the case of a Tier I Participant, the
Participant's annual Retirement Contributions under the
Kimberly-Clark Corporation Retirement Contribution Plan (or
any successor or additional plans) and the Kimberly-Clark
Corporation Retirement Contribution Excess Benefit Program (or
any successor or additional plans) (collectively, the
"Retirement Contribution Plan") to which the Participant would
have been entitled if he had remained employed by the
Corporation for the Severance Period at the rate
of annual compensation specified in Section 5(i) above except
that the Annual Bonus Amount shall be treated as earned for
the year in which termination occurred and the balance of the
Severance Period and no award actually earned in, and paid
for, the year in which termination occurred shall be
considered, plus (b) for all Participants, the excess of (I)
the benefits under the Retirement Contribution Plan to which
the Participant would be entitled if the Participant were
fully vested in all of his or her benefits under the
Retirement Contribution Plan at the date of termination of
employment, over (II) the value of the benefits to which the
Participant is actually entitled at the date of termination of
employment, based upon the value of the Participant's account
as of the most recent valuation date before the date of the
Qualified Termination of Employment;
(h) Salaried Retirement Plan. In the case of a Tier I
Participant, a lump sum retirement benefit, in addition to any
benefits received under the Supplemental Benefit Plan to the
Kimberly-Clark Corporation Salaried Employees' Retirement Plan
(or any successor or additional plans) and the Second
Supplemental Benefit Plan to the Kimberly-Clark Corporation
Salaried Employees' Retirement Plan (or any successor or
additional plans) (collectively, the "Supplemental Plan") and
the Kimberly-Clark Corporation Salaried Employees' Retirement
Plan (or any successor or additional plans) (the "Salaried
Retirement Plan"), such benefit to be equal to the actuarial
present value of a straight life annuity without level income
option and in an amount equal to the excess of (a) the
benefits under the Salaried Retirement Plan and the
Supplemental Plan to which the Participant would have been
entitled in the form of a straight life annuity without level
income option if such Participant had remained employed by the
Corporation for the Severance Period, at the rate of annual
compensation specified in Section 5(i) above except that the
Annual Bonus Amount shall be treated as earned for the year in
which termination occurred and the balance of the Severance
Period and no award actually earned in, and paid for, the year
in which termination occurred shall be considered, over (b)
the benefits to which the Participant would actually have been
entitled under the Salaried Retirement Plan and the
Supple-
mental Plan, had such benefit been paid in the form of a
straight life annuity without level income option; and
(i) Medical and Dental Benefits. A lump sum amount
equal to (a) the amount of the monthly premiums that the
Participant would be required to pay, if he or she elected
"COBRA" continuation coverage under the medical and dental
plans of the Corporation in which the Participant was
participating immediately before the Qualified Termination of
Employment, based upon the premium rates in effect as of the
date of the Qualified Termination of Employment, times (b) for
a Tier I Participant, 36, and for a Tier II Participant, 24.
6. Other Terms and Conditions. The Agreement to be entered
into pursuant to this Plan shall contain such other terms, provisions and
conditions not inconsistent with this Plan as shall be determined by the Board.
Where appearing in this Plan or the Agreement, the masculine shall include the
feminine and the plural shall include the singular, unless the context clearly
indicates otherwise.
7. Non-Assignability. Each Participant's rights under this
Plan shall be non-transferable except by will or by the laws of descent and
distribution.
8. Unfunded Plan. The Plan shall be unfunded. Neither the
Corporation nor the Board shall be required to segregate any assets that
may at any time be represented by benefits under the Plan. Neither the
Corporation nor the Board shall be deemed to be a trustee of any amounts to be
paid under the Plan. Any liability of the Corporation to any Participant with
respect to any benefit shall be based solely upon any contractual obligations
created by the Plan and the Agreement; no such obligation shall be deemed to be
secured by any pledge or any encumbrance on any property of the Corporation.
9. Certain Reduction of Payments by the Corporation to Tier II
Participants.
(a) Anything in this Agreement to the contrary
notwithstanding, in the event Deloitte & Touche LLP or such other
certified public accounting firm designated by the Corporation
(the "Accounting Firm") shall determine that receipt of all
Payments would subject a Participant, other than a Participant
entitled to a Gross-Up Payment under Section 10 be-
low, to tax under Section 4999 of the Code, it shall determine
whether some amount of Separation Payments would meet the
definition of a "Reduced Amount." If the Accounting Firm
determines that there is a Reduced Amount, the aggregate
Separation Payments shall be reduced to such Reduced Amount. All
fees payable to the Accounting Firm with respect to this Section 9
shall be paid solely by the Corporation.
(b) If the Accounting Firm determines that aggregate
Separation Payments should be reduced to the Reduced Amount, the
Corporation shall promptly give the Participant notice to that
effect and a copy of the detailed calculation thereof, and the
Participant may then elect, in his or her sole discretion, which
and how much of the Separation Payments shall be eliminated or
reduced (as long as after such election the Value of the aggregate
Separation Payments equals the Reduced Amount), and shall advise
the Corporation in writing of his or her election within ten days
of his receipt of notice. If no such election is made by the
Participant within such ten-day period, the Corporation may elect
which of such Separation Payments shall be eliminated or reduced
(as long as after such election the Value of the aggregate
Separation Payments equals the Reduced Amount) and shall notify
the Participant promptly of such election. All determinations
made by the Accounting Firm under this Section shall be binding
upon the Corporation and the Participant and shall be made within
60 days of a termination of employment of the Participant. As
promptly as practicable following such determination, the
Corporation shall pay to or distribute for the benefit of the Tier
II Participant such Separation Payments as are then due to the
Participant under this Plan and shall promptly pay to or
distribute for the benefit of the Participant in the future such
Separation Payments as become due to the Participant under this
Plan.
(c) While it is the intention of the Corporation to
reduce the amounts payable or distributable to a Participant
hereunder only if the aggregate Net After Tax Receipts to the
Participant would thereby be increased, as a result of the
uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm
hereunder, it is possible that amounts will have been paid or
distributed by the Corporation to or for the benefit of a
Participant pursuant to this Plan which should not have been so
paid or distributed ("Overpayment") or that additional amounts
which will have not been paid or distributed by the Corporation to
or for the benefit of a Participant pursuant to this Plan could
have been so paid or distributed ("Underpayment"), in each case,
consistent with the calculation of the Reduced Amount hereunder.
In the event that the Accounting Firm determines that an
Overpayment has been made, based upon the assertion of a
deficiency by the Internal Revenue Service against the Corporation
or the Participant which the Accounting Firm believes has a high
probability of success, any such benefit of a Participant shall be
treated for all purposes as a loan to the Participant which the
Participant shall repay to the Corporation together with interest
at the applicable federal rate provided for in Section 7872(f)(2)
of the Code; provided, however, that no such loan shall be deemed
to have been made and no amount shall be payable by a Participant
to the Corporation if and to the extent such deemed loan and
payment would not either reduce the amount on which the
Participant is subject to tax under Section 1 and Section 4999 of
the Code or generate a refund of such taxes. In the event that
the Accounting Firm, based upon controlling precedent or
substantial authority, determines that an Underpayment has
occurred, any such Underpayment shall be promptly paid by the
Corporation to or for the benefit of the Participant together with
interest at the applicable federal rate provided for in Section
7872(f)(2) of the Code.
10. Certain Additional Payments by the Corporation to Tier I
Participants.
(a) Anything in this Plan or any Agreement to the
contrary notwithstanding and except as set forth in the next
sentence, in the event that it shall be determined that any
Payment to a Tier I Participant would be subject to the Excise
Tax, then the Tier I Participant shall be entitled to receive an
additional payment (the "Gross-Up Payment") in an amount such
that, after payment by the Tier I Participant of all taxes (and
any interest or penalties imposed with respect to such taxes),
including, without
limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and Excise Tax imposed upon the
Gross-Up Payment, the Tier I Participant retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the
Payments. Notwithstanding the foregoing provisions of this
Section 10(a), if it shall be determined that the Tier I
Participant would (absent this sentence) be entitled to the
Gross-Up Payment, but that the Parachute Value of all Payments
does not exceed 110% of the Safe Harbor Amount, then no Gross-Up
Payment shall be made to the Tier I Participant and the provisions
of Section 9 of this Plan shall apply to that Tier I Participant.
The Corporation's obligation to make Gross-Up Payments under this
Section 10 shall not be conditioned upon the Tier I Participant's
termination of employment.
(b) Subject to the provisions of Section 10(c), all
determinations required to be made under this Section 10,
including whether and when a Gross-Up Payment is required, the
amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by the
Accounting Firm. The Accounting Firm shall provide detailed
supporting calculations both to the Corporation and the Tier I
Participant within 15 business days of the receipt of notice from
the Tier I Participant that there has been a Payment or such
earlier time as is requested by the Corporation. All fees and
expenses of the Accounting Firm shall be borne solely by the
Corporation. Any Gross-Up Payment, as determined pursuant to
this Section 10, shall be paid by the Corporation to or for the
benefit of the applicable Tier I Participant within 5 days of the
receipt of the Accounting Firm's determination. Any determination
by the Accounting Firm shall be binding upon the Corporation and
the Tier I Participant. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it
is possible that Gross-Up Payments that will not have been made
by the Corporation should have been made (an "Underpayment"),
consistent with the calculations required to be made hereunder.
In the event the Corporation exhausts its remedies pursuant to
Section 10(c) and the Tier I Participant thereafter is required
to make a payment of any Excise Tax, the Accounting Firm shall
determine the amount of the
Underpayment that has occurred and any such Underpayment shall
be promptly paid by the Corporation to or for the benefit of the
Tier I Participant.
(c) Each Tier I Participant shall notify the Corporation
in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the
Corporation of the Gross-Up Payment. Such notification shall
be given as soon as practicable, but no later than 10
business days after the Tier I Participant is informed in
writing of such claim. The Tier I Participant shall apprise
the Corporation of the nature of such claim and the date on which
such claim is requested to be paid. The Tier I Participant
shall not pay such claim prior to the expiration of the 30-day
period following the date on which the Tier I Participant gives
such notice to the Corporation (or such shorter period ending on
the date that any payment of taxes with respect to such claim is
due). If the Corporation notifies the Tier I Participant in
writing prior to the expiration of such period that the
Corporation desires to contest such claim, the Tier I Participant
shall:
(1) give the Corporation any information
reasonably requested by the Corporation
relating to such claim,
(2) take such action in connection with
contesting such claim as the Corporation 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 Corporation,
(3) cooperate with the Corporation in good faith
in order effectively to contest such claim,
and
(4) permit the Corporation to participate in any
proceedings relating to such claim;
provided, however, that the Corporation shall bear and pay
directly all costs and expenses (including additional interest
and penalties) incurred in connection with such contest, and
shall indemnify and hold the Tier I
Participant harmless, on an after-tax basis, for any Excise Tax or
income tax (including interest and penalties) imposed as a result
of such representation and payment of costs and expenses. Without
limitation of the foregoing provisions of this Section 10(c),
the Corporation shall control all proceedings taken in
connection with such contest, and, at its sole discretion, may
pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the applicable taxing authority in
respect of such claim and may, at its sole discretion, either pay
the tax claimed to the appropriate taxing authority on behalf of
the Tier I Participant and direct the Tier I Participant to sue
for a refund or contest the claim in any permissible manner, and
the Tier I Participant 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
Corporation shall determine; provided, however, that, if the
Corporation directs the Tier I Participant to pay such claim and
directs the Tier I Participant to sue for a refund, the
Corporation shall indemnify and hold the Tier I Participant
harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties) imposed with respect to such
payment or with respect to any imputed income in connection with
such payment; and provided, further, that any extension of the
statute of limitations relating to payment of taxes for the
taxable year of the Tier I Participant with respect to which such
contested amount is claimed to be due is limited solely to such
contested amount. Furthermore, the Corporation's control of the
contest shall be limited to issues with respect to which the
Gross-Up Payment would be payable hereunder, and the Tier I
Participant 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.
(d) If, after the receipt by a Tier I Participant of a
Gross-Up Payment or payment by the Corporation of an amount on the
Tier I Participant's behalf pursuant to Section 10(c), the Tier I
Participant becomes entitled to receive any refund with respect to
the Excise Tax to which such Gross-Up Payment relates or with
respect to such claim, the Tier I Participant shall (subject to
the Corporation's complying with the require-
ments of Section 10(c), if applicable) promptly pay to the
Corporation the amount of such refund (together with any interest
paid or credited thereon after taxes applicable thereto). If,
after payment by the Corporation of an amount on the Tier I
Participant's behalf pursuant to Section 10(c), a determination is
made that the Tier I Participant shall not be entitled to any
refund with respect to such claim and the Corporation does not
notify the Tier I Participant in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after
such determination, then the amount of such payment shall offset,
to the extent thereof, the amount of Gross-Up Payment required to
be paid.
(e) Notwithstanding any other provision of this Plan, the
Corporation may, in its sole discretion, withhold and pay over
to the Internal Revenue Service or any other applicable taxing
authority, for the benefit of a Tier I Participant, all or any
portion of any Gross-Up Payment, and by signing an Agreement,
the Tier I Participant shall consent to such withholding.
11. No Duty to Mitigate. In no event shall any Participant be
obligated to seek other employment or take any other action by way of
mitigation of the amounts payable to the Participant under any of the provisions
of this Plan, and such amounts shall not be reduced whether or not the
Participant obtains other employment.
12. Termination and Amendment of this Plan. The Board shall
have power at any time, in its discretion, to amend, abandon or terminate
this Plan, in whole or in part; except that no amendment, abandonment or
termination shall impair or abridge the obligations of the Corporation under any
Agreements previously entered into pursuant to this Plan except as expressly
permitted by the terms of such Agreements.
13. Successors. The Corporation shall require any successor
(whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of its business and/or assets to assume
expressly and agree to perform this Plan and the Agreements in the same manner
and to the same extent that the Corporation would be required to perform them if
no such succession had taken place.
14. Effective Date. This amended and restated Plan shall
become effective on November 12, 2002.