EXHIBIT 10-21
EMPLOYMENT AGREEMENT
Agreement made as of the 1st day of July, 1996, between
NIAGARA MOHAWK POWER CORPORATION (the "Company"), and Gary J.
Lavine (the "Executive").
WHEREAS, the Company desires to employ the Executive,
and the Executive desires to accept/continue employment with the
Company, on the terms and conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the mutual covenants
and agreements hereinafter set forth, the Company and the
Executive hereby agree as follows:
1. Term of Agreement. The Company shall
employ the Executive, and the Executive shall serve the Company,
for the period beginning July 1, 1996 and expiring on June 30,
1999, subject to earlier termination as provided under paragraph
4 hereof. This Agreement shall be extended automatically by one
year commencing on July 1, 1997 and on July 1st of each year
thereafter, unless either party notifies the other to the
contrary not later than sixty (60) days prior to such date.
Notwithstanding any such notice by the Company, this Agreement
shall remain in effect for a period of thirty-six months from the
date of a "Change in Control" (as that term is defined in
Schedule B hereto, unless such notice was given at least 18
months prior to the date of the Change in Control).
2. Duties. The Executive shall serve the Company as
its Senior Vice President - Legal and Corporate Relations.
During the term of this Agreement, the Executive shall, except
during vacation or sick leave, devote the whole of the
Executive's time, attention and skill to the business of
the Company during usual business hours (and outside those hours
when reasonably necessary to the Executive's duties hereunder);
faithfully and diligently perform such duties and exercise such
powers as may be from time to time assigned to or vested in the
Executive by the Company's Board of Directors (the "Board") or by
any officer of the Company superior to the Executive; obey the
directions of the Board and of any officer of the Company
superior to the Executive; and use the Executive's best efforts
to promote the interests of the Company. The Executive may be
required in pursuance of the Executive's duties hereunder to
perform services for any company controlling, controlled by or
under common control with the Company (such companies hereinafter
collectively called "Affiliates") and to accept such offices in
any Affiliates as the Board may require. The Executive shall
obey all policies of the Company and applicable policies of its
Affiliates.
3. Compensation. During the term of this Agreement:
a. The Company shall pay the Executive a base
salary at an annual rate of $191,500, which shall be payable
periodically in accordance with the Company's then prevailing
payroll practices, or such greater amount as the Company may from
time to time determine;
b. The Executive shall be entitled to participate
in the Company's Supplemental Executive Retirement Plan ("SERP")
according to its terms, as modified by Schedule A hereto;
c. The Executive shall be entitled to participate
in the Company's Officers Incentive Compensation Plan, Stock
Option Plan and Performance Share Unit Plan, and any successors
thereto, in accordance with the terms thereof; and
d. The Executive shall be entitled to such
expense accounts, vacation time, sick leave, perquisites of
office, fringe benefits, insurance coverage, and other terms and
conditions of employment as the Company generally provides to its
employees having rank and seniority at the Company comparable to
the Executive.
4. Termination. The Company shall continue to employ
the Executive, and the Executive shall continue to work for the
Company, during the term of this Agreement, unless the Agreement
is terminated in accordance with the following provisions:
a. This Agreement shall terminate automatically
upon the death of the Executive. Any right or benefit accrued on
behalf of the Executive or to which the Executive became entitled
under the terms of this Agreement prior to death (other than
payment of base salary in respect of the period following the
Executive's death), and any obligation of the Company to the
Executive in respect of any such right or benefit, shall not be
extinguished by reason of the Executive's death. Any base salary
earned and unpaid as of the date of the Executive's death shall
be paid to the Executive's estate in accordance with paragraph
4g. below.
b. By notice to the Executive, the Company may
terminate this Agreement upon the "Disability" of the Executive.
The Executive shall be deemed to incur a Disability when (i) a
physician selected by the Company advises the Company that the
Executive's physical or mental condition has rendered the
Executive unable to perform the essential functions of the
Executive's position in a reasonable manner, with or without
reasonable accommodation and will continue to render him unable
to perform the essential functions of the Executive's position in
such manner, for a period exceeding 12 consecutive months, or
(ii) due to a physical or mental condition, the Executive has not
performed the essential functions of the Executive's position in
a reasonable manner, with or without reasonable accommodation,
for a period of 12 consecutive months. Following termination
of this Agreement pursuant to clause (i) of the preceding
sentence of this subparagraph, the Executive shall continue to
receive his base salary under paragraph 3a. hereof for a period
of 12 months from the date of his Disability, reduced by any
benefits payable during such period under the Company's
short-term disability plan and long-term disability plan.
Thereafter, or in the event of termination of this Agreement
pursuant to clause (ii) of the preceding sentence, the Executive
shall receive benefits under the Company's long-term disability
plan in lieu of any further base salary under paragraph 3a.
hereof.
c. By notice to the Executive, the Company may
terminate the Executive's employment at any time for "Cause".
The Company must deliver such notice within ninety (90) days
after the Board both (i) has or should have had 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 "Cause" shall mean (i)
the Executive is convicted of, or has plead guilty or nolo
contendere to, a felony; (ii) the willful and continued failure
by the Executive to perform substantially his duties with the
Company (other than any such failure resulting from incapacity
due to physical or mental illness) after a demand for substantial
performance is delivered to the Executive by the Company which
specifically identifies the manner in which the Company believes
the Executive has not substantially performed his duties; (iii)
the Executive engages in conduct that constitutes gross neglect
or willful misconduct in carrying out his duties under this
Agreement involving material economic harm to the Company or any
of its subsidiaries; or (iv) the Executive has engaged in a
material breach of Section 6 or 7 of this Agreement. In the
event the termination notice is based on clause (ii) of the
preceding sentence, the Executive shall have ten (10) business
days following receipt of the notice of termination to cure his
conduct, to the extent such cure is possible, and if the
Executive does not cure within the ten (10) business day period,
his termination of employment in accordance with such termination
notice shall be deemed to be for Cause. The determination of
Cause shall be made by the Board upon the recommendation of the
Compensation and Succession Committee of the Board. Following a
Change in Control, such determination shall be made in a
resolution duly adopted by the affirmative vote of not less than
three-fourths (3/4) of the membership of the Board, excluding
members who are employees of the Company, at a meeting called for
the purpose of determining that Executive has engaged in conduct
which constitutes Cause (and at which Executive had a reasonable
opportunity, together with his counsel, to be heard before the
Board prior to such vote). The Executive shall not be entitled
to the payment of any additional compensation from the Company,
except to the extent provided in paragraph 4g. hereof, in the
event of the termination of his employment for Cause.
d. If any of the following events, any of which
shall constitute "Good Reason", occurs within thirty-six months
after a Change in Control, the Executive, by notice of the
Company, may voluntarily terminate the Executive's employment for
Good Reason within ninety (90) days after the Executive both (i)
has or should have had knowledge of conduct or an event allegedly
constituting Good Reason, and (ii) has reason to believe that
such conduct or event could be grounds for Good Reason. In such
event, the Executive shall be entitled to the severance benefits
set forth in subparagraph 4f. below.
(i) the Company assigns any duties to the Executive
which are materially inconsistent in any adverse respect with the
Executive's position, duties, offices, responsibilities or
reporting requirements immediately prior to a Change in Control,
including any diminution of such duties or responsibilities; or
(ii) the Company reduces the Executive's base salary,
including salary deferrals, as in effect immediately prior to a
Change in Control; or
(iii) the Company discontinues any bonus or other
compensation plan or any other benefit, retirement plan
(including the SERP), stock ownership plan, stock purchase plan,
stock option plan, life insurance plan, health plan, disability
plan or similar plan (as the same existed immediately prior to
the Change in Control) in which the Executive participated or was
eligible to participate in immediately prior to the Change in
Control and in lieu thereof does not make available plans
providing at least comparable benefits; or
(iv) the Company takes action which adversely affects
the Executive's participation in, or eligibility for, or
materially reduces the Executive's benefits under, any of the
plans described in (iii) above, or deprives the Executive of any
material fringe benefit enjoyed by the Executive immediately
prior to the Change in Control, or fails to provide the Executive
with the number of paid vacation days to which the Executive was
entitled in accordance with the Company's normal vacation policy
immediately prior to the Change in Control; or
(v) the Company requires the Executive to be based at
any office or location other than one within a 50-mile radius of
the office or location at which the Executive was based
immediately prior to the Change in Control; or
(vi) the Company purports to terminate the Executive's
employment otherwise than as expressly permitted by this
Agreement; or
(vii) the Company fails to comply with and satisfy
paragraph 5 hereof, provided that such successor has received
prior written notice from the Company or from the Executive of
the requirements of paragraph 5 hereof.
The Executive shall have the sole right to
determine, in good faith, whether any of the above events has
occurred.
e. The Company may terminate the Executive's
employment at any time without Cause.
f. In the event that the Executive's employment
is terminated by the Company without Cause or by the Executive
for Good Reason following a Change in Control, the Company shall
pay the Executive a severance benefit, payable in twenty-four
equal monthly installments, equal to two years' base salary at
the rate in effect as of the date of termination, plus the
greater of (i) two times the most recent annual bonus paid to the
Executive under the Corporation's Annual Officers Incentive
Compensation Plan (the "OICP") or any similar annual bonus plan
(excluding the pro rata bonus referred to in the next sentence)
or (ii) two times the average annual bonus paid to the Executive
for the three prior years under the OICP or such similar plan
(excluding the pro rata annual bonus referred to in the next
sentence). If one hundred eighty (180) days or more have elapsed
in the Company's fiscal year in which such termination occurs,
the Company shall also pay the Executive in a lump sum, within
ninety (90) days after the end of such fiscal year, a pro rata
portion of Executive's annual bonus in an amount equal to (A) the
bonus which would have been payable to Executive under OICP or
any similar plan for the fiscal year in which Executive's
termination occurs, multiplied by (B) a fraction, the numerator
of which is the number of days in the fiscal year in which the
termination occurs through the termination date and the
denominator of which is three hundred sixty-five (365). For
purposes of the first sentence of this subparagraph 4f., there
shall be taken into account as bonus paid to the Executive for
each of the years 1996 and 1997 under the OICP one-half of the
sum of (x) cash payments with respect to Restricted Stock Units
(and related Dividend Equivalents) granted to the Executive under
the Corporation's 1995 Stock Incentive Plan and (y) the result of
multiplying the number of Stock Appreciation Rights granted to
the Executive under the Corporation's 1995 Stock Incentive Plan
by the difference between (1) the value of one share of the
Corporation's common stock on December 31, 1997 and (2) the Base
Value ($10.75). Notwithstanding the preceding sentence, if a
Change in Control occurs prior to December 31, 1997, there shall
be taken into account for purposes of the first sentence of this
subparagraph 4f. as bonus paid to the Executive for each of the
years 1996 and 1997 under the OICP one-half of the cash payments
with respect to Stock Units (and related Dividend Equivalents)
and Stock Appreciation Rights which are payable to the Executive
pursuant to Article 13 of the Corporation's 1995 Stock Incentive
Plan. If the termination of the Executive's employment occurs
prior to December 31, 1997 and prior to a Change in Control, the
amount of any adjustments to the severance benefit required as a
result of the preceding two sentences of this subparagraph 4f.
shall be paid to the Executive in a lump sum no later than March
15, 1998.
In addition, in the event that the Executive's employment is
terminated by the Company without Cause or by the Executive for
Good Reason following a Change in Control, the Executive shall be
entitled to continue participation in the Company's employee
benefit plans (other than its qualified and non-qualified
retirement plans) for a two-year period from the date of
termination, provided, however, that if Executive cannot continue
to participate in any of the benefit plans, the Company shall
otherwise provide equivalent benefits to the Executive and his
dependents on the same after-tax basis as of continued
participation had been permitted. Notwithstanding the foregoing,
in the event Executive becomes employed by another employer and
becomes eligible to participate in an employee benefit plan of
such employer, the benefits described herein shall be secondary
to such benefits during the period of Executive's eligibility,
but only to the extent that the Company reimburses Executive for
any increased cost and provides anyadditional benefits necessary
to give Executive the benefits provided hereunder.
g. Upon termination pursuant to subparagraphs
4a., b., c., d., or e. above, the Company shall pay the Executive
or the Executive's estate any base salary earned and unpaid to
the date of termination, and any outstanding funds advanced by
the Company to or on behalf of the Executive shall become
immediately due and payable.
h. The parties intend that no severance benefits
hereunder shall be paid to the extent that such benefits (either
alone or when aggregated with other benefits contingent on a
Change in Control and paid to or for benefit of the Executive)
constitute "excess parachute payment" within the meaning of
Section 280G of the Internal Revenue Code of 1986, as amended
(the "Code"). Accordingly, under the circumstances set forth
below, severance benefits payable under this Agreement shall be
subject to the following reduction notwithstanding anything in
this Agreement to the contrary. If the aggregate present value
(as determined pursuant to Section 280G of the Code) of severance
benefits payable under this Agreement which, together with all
other payments by the Company to the Executive or for the
Executive's benefit, would be "parachute payments" within the
meaning of Section 280G of the Code, the payments pursuant to
this Agreement shall be reduced (reducing first the severance
benefit provided in the first sentence of subparagraph 4f.
hereof) to the largest amount as will result in no portion of
such payments being treated as excess parachute payments.
i. The determination of whether and to what
extent the payments shall be reduced under this Agreement,
pursuant to the foregoing subparagraph h., including
apportionment among specific payments and benefits, shall be made
by the Executive in good faith, and such determination shall be
conclusive and binding on the Company. The Company shall make
the calculations referred to in subparagraph h. above within
thirty days following the termination of the Executive's
employment and shall provide such calculations and the basis
therefor to the Executive within such period. In the event a
reduction is required, the Executive shall give notice to the
Company, within 20 days of the Executive's receipt of such
calculations and related information, of the Executive's
determination of the reduction.
j. Upon the occurrence of a Change in Control the
Company shall pay promptly as incurred, to the full extent
permitted by law, all legal fees and expenses which the Executive
may reasonably thereafter incur as a result of any contest,
litigation or arbitration (regardless of the outcome thereof) by
the Company, or by the Executive of the validity of, or liability
under, this Agreement or the SERP (including any contest by the
Executive about the amount of any payment pursuant to this
Agreement or pursuant to the SERP), plus in each case interest on
any delayed payment at the rate of 150% of the Prime Rate posted
by the Chase Manhattan Bank, N.A. or its successor, provided,
however, that the Company shall not be liable for the Executive's
legal fees and expenses if the Executive's position in such
contest, litigation or arbitration is found by the neutral
decision-maker to be frivolous.
5. Successor Liability. The Company shall 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 assume expressly and to
agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform. 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.
6. Confidential Information. The Executive agrees to
keep secret and retain in the strictest confidence all
confidential matters which relate to the Company, its
subsidiaries and affiliates, including, without limitation,
customer lists, client lists, trade secrets, pricing policies and
other business affairs of the Company, its subsidiaries and
affiliates learned by him from the Company or any such subsidiary
or affiliate or otherwise before or after the date of this
Agreement, and not to disclose any such confidential matter to
anyone outside the Company or any of its subsidiaries or
affiliates, whether during or after his period of service with
the Company, except (i) as such disclosure may be required or
appropriate in connection with his work as an employee of the
Company or (ii) when required to do so by a court of law, by any
governmental agency having supervisory authority over the
business of the Company or by any administrative or legislative
body (including a committee thereof) with apparent jurisdiction
to order him to divulge, disclose or make accessible such
information. The Executive agrees to give the Company advance
written notice of any disclosure pursuant to clause (ii) of the
preceding sentence and to cooperate with any efforts by the
Company to limit the extent of such disclosure. Upon request by
the Company, the Executive agrees to deliver promptly to the
Company upon termination of his services for the Company, or at
any time thereafter as the Company may request, all Company
subsidiary or affiliate memoranda, notes, records, reports,
manuals, drawings, designs, computer file in any media and other
documents (and all copies thereof) relating to the Company's or
any subsidiary's or affiliate's business and all property of the
Company or any subsidiary or affiliate associated therewith,
which he may then possess or have under his direct control, other
than personal notes, diaries, Rolodexes and correspondence.
7. Non-Compete and Non-Solicitation. During the
Executive's employment by the Company and for a period of
one year following the termination thereof for any reason, the
Executive covenants and agrees that he will not for himself or on
behalf of any other person, partnership, company or corporation,
directly or indirectly, acquire any financial or beneficial
interest in (except as provided in the next sentence), provide
consulting services to, be employed by, or own, manage, operate
or control any business which is in competition with a business
engaged in by the Company or any of its subsidiaries or
affiliates in any state of the United States in which any of them
are engaged in business at the time of such termination of
employment for as long as they carry on a business therein.
Notwithstanding the preceding sentence, the Executive shall not
be prohibited from owning less than five (5%) percent of any
publicly traded corporation, whether or not such corporation is
in competition with the Company.
The Executive hereby covenants and agrees that, at all
times during the period of his employment and for a period of one
year immediately following the termination thereof for any
reason, the Executive shall not employ or seek to employ any
person employed at that time by the Company or any of its
subsidiaries, or otherwise encourage or entice such person or
entity to leave such employment. It is the intention of the
parties hereto that the restrictions contained in this Section be
enforceable to the fullest extent permitted by applicable law.
Therefore, to the extent any court of competent jurisdiction
shall determine that any portion of the foregoing restrictions is
excessive, such provision shall not be entirely void, but rather
shall be limited or revised only to the extent necessary to make
it enforceable. Specifically, if any court of competent
jurisdiction should hold that any portion of the foregoing
description is overly broad as to one or more states of the
United States, then that state or states shall be eliminated from
the territory to which the restrictions of paragraph (a) of this
Section applies and the restrictions shall remain applicable in
all other states of the United States.
8. No Mitigation. The Executive shall not be required
to mitigate the amount of any payments or benefits provided for
in Section 4f. hereof by seeking other employment or otherwise
and no amounts earned by the Executive shall be used to reduce or
offset the amounts payable hereunder, except as otherwise
provided in Section 4f.
9. Ownership of Work Product. Any and all
improvements, inventions, discoveries, formulae, processes,
methods, know-how, confidential data, trade secrets and other
proprietary information (collectively, "Work Products") within
the scope of any business of the Company or any Affiliate which
the Executive may conceive or make or have conceived or made
during the Executive's employment with the Company shall be and
are thesole and exclusive property of the Company, and that the
Executive, whenever requested to do so by the Company, at its
expense, shall execute and sign any and all applications,
assignments or other instruments and do all other things which
the Company may deem necessary or appropriate (i) to apply for,
obtain, maintain, enforce, or defend letters patent of the United
States or any foreign country for any Work Product, or (ii) to
assign, transfer, convey or otherwise make available to the
Company the sole and exclusive right, title and interest in and
to any Work Product.
10. Arbitration. Any dispute or controversy between
the parties relating to this Agreement (except any dispute
relating to paragraphs 6 or 7 hereof) or relating to or arising
out of the Executive's employment with the Company, shall be
settled by binding arbitration in the City of Syracuse, State of
New York, pursuant to the Employment Dispute Resolution Rules of
the American Arbitration Association and shall be subject to the
provisions of Article 75 of the New York Civil Practice Law and
Rules. Judgment upon the award may be entered in any court of
competent jurisdiction. Notwithstanding anything herein to the
contrary, if any dispute arises between the parties under
paragraphs 6 or 7 hereof, or if the Company makes any claim under
paragraphs 6 or 7, the Company shall not be required to arbitrate
such dispute or claim but shall have the right to institute
judicial proceedings in any court of competent jurisdiction with
respect to such dispute or claim. If such judicial proceedings
are instituted, the parties agree that such proceedings shall not
be stayed or delayed pending the outcome of any arbitration
proceedings hereunder.
11. Notices. Any notice or other communication
required or permitted under this Agreement shall be effective
only if it is in writing and delivered personally or sent by
certified mail, postage prepaid, or overnight delivery addressed
as follows:
If to the Company:
Niagara Mohawk Power Corporation
300 Erie Boulevard West
Syracuse, New York 13202
ATTN: Corporate Secretary
If to the Executive:
111 Holliston Circle
Fayetteville, NY 13066
or to such other address as either party may designate by notice
to the other, and shall be deemed to have been given upon
receipt.
12. Entire Agreement. This Agreement constitutes the
entire agreement between the parties hereto, and supersedes, and
is in full substitution for any and all prior understandings or
agreements, oral or written, with respect to the Executive's
employment.
13. Amendment. This Agreement may be amended only by
an instrument in writing signed by the parties hereto, and any
provision hereof may be waived only by an instrument in writing
signed by the party or parties against whom or which enforcement
of such waiver is sought. The failure of either party hereto at
any time to require the performance by the other party hereto of
any provision hereof shall in no way affect the full right to
require such performance at any time thereafter, nor shall the
waiver by either party hereto of a breach of any provision hereof
be taken or held to be a waiver of any succeeding breach of such
provision or a waiver of the provision itself or a waiver of any
other provision of this Agreement.
14. Miscellaneous. This Agreement is binding on and
is for the benefit of the parties hereto and their respective
successors, heirs, executors, administrators and other legal
representatives. Neither this Agreement nor any right or
obligation hereunder may be assigned by the Company (except to an
Affiliate) or by the Executive without the prior written consent
of the other party.
15. Severability. If any provision of this Agreement,
or portion thereof, is so broad, in scope or duration, so as to
be unenforceable, such provision or portion thereof shall be
interpreted to be only so broad as is enforceable.
16. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New
York without reference to principles of conflicts of law.
17. Counterparts. This Agreement may be executed in
several counterparts, each of which shall be deemed an original,
but all of which shall constitute one and the same instrument.
18. Performance Covenant. The Executive represents
and warrants to the Company that the Executive is not party to
any agreement which would prohibit the Executive from entering
into this Agreement or performing fully the Executive's
obligations hereunder.
19. Survival of Covenants. The obligations of the
Executive set forth in paragraphs 6, 7, 9 and 10 represent
independent covenants by which the Executive is and will remain
bound notwithstanding any breach by the Company, and shall
survive the termination of this Agreement.
IN WITNESS WHEREOF, the Company and the Executive have
executed this Agreement as of the date first written above.
_______________________ NIAGARA MOHAWK POWER CORPORATION
Gary J. Lavine
By:______________________________
DAVID J. ARRINGTON
Senior Vice President -
Human Resources
SCHEDULE A
Modifications in Respect of Gary J. Lavine ("Executive")
to the
Supplemental Executive Retirement Plan ("SERP")
of the
Niagara Mohawk Power Corporation ("Company")
I. Subsection 1.8 of Section I of the SERP is hereby modified
to provide that the term "Earnings" shall mean the sum of the (i)
Executive's base annual salary, whether or not deferred and
including any elective before-tax contributions made by the
Executive to a plan qualified under Section 401(k) of the
Internal Revenue Code, averaged over the final 36 months of the
Executive's employment with the Company and (ii) the average of
the annual bonus earned by the Executive under the Corporation's
Annual Officers Incentive Compensation Plan ("OICP"), whether or
not deferred, in respect of the final 36 months of the
Executive's employment with the Company. If (A) the Executive is
an employee of the Company on December 31, 1997 or (B) prior to
December 31, 1997 the Executive's employment is terminated and
the Executive is entitled to payment under Article 9 of the
Corporation's 1995 Stock Incentive Plan ("SIP") for all or a
portion of the Stock Units and Stock Appreciation Rights granted
to the Executive under SIP, there shall be taken into account for
purposes of the preceding sentence as an annual bonus under the
OICP, the sum of (x) cash payments made with respect to Stock
Units (and related Dividend Equivalents) granted to the Executive
under the SIP and (y) the result of multiplying the number of
Stock Appreciation Rights granted to the Executive under the SIP,
prorated if applicable to Article 9 of the SIP, by the difference
between (1) the value of one share of the Corporation's common
stock on December 31, 1997 and (2) the Base Value ($10.75).
Notwithstanding the preceding sentence, if a Change in Control
occurs prior to December 31, 1997 (and, if applicable, prior to
the Executive's termination of employment), there shall be taken
into account for purposes of the first sentence hereof as an
annual bonus under the OICP the cash payments with respect to
Stock Units (and related Dividend Equivalents) and Stock
Appreciation Rights which are payable to the Executive pursuant
to Article 13 of the SIP.
II. Subsection 2.1 of Section II of the SERP is hereby modified
to provide that full SERP benefits are vested following eight (8)
years of continuous service with the Company.
III. Subsection 4.3 of Section IV of the SERP is hereby
modified to provide that in the event of (x) the Executive's
involuntary termination of employment by the Company, at any
time, other than for Cause, (y) the termination of this
Agreement on account of the Executive's Disability or (z) the
Executive's termination of employment for Good Reason within the
36 full calendar month period following a Change in Control (as
defined in Schedule B of this Agreement), the Executive shall be
100% vested in his full SERP benefit (i.e., 60% of Earnings (as
modified above)) regardless of the Executive's years of
continuous service with the Company. If the Executive is less
than age 55 at the date of such termination of employment, the
Executive shall be entitled to receive benefits commencing no
earlier than age 55, calculated pursuant to Section III of the
SERP.
IV. Except as provided above, the provisions of the SERP shall
apply and control participation therein and the payment of
benefits thereunder.
SCHEDULE B
For purposes of this Agreement, the term "Change in
Control" shall mean:
(1) The acquisition by any individual, entity or group
(within the meaning of Sections 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"))
(a "Person") of beneficial ownership (within the meaning of Rule
13d-3 promulgated under the Exchange Act) of 20% or more of
either (i) the then outstanding shares of common stock of the
Company (the "Outstanding Company Common Stock") or (ii) the
combined voting power of the then outstanding voting securities
of the Company entitled to vote generally in the election of
directors (the "Outstanding Company Voting Securities");
provided, however, that the following acquisitions shall not
constitute a Change of Control: (i) any acquisition directly
from the Company (excluding an acquisition by virtue of the
exercise of a conversion privilege), (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (iv) any acquisition by
any corporation pursuant to a reorganization, merger or
consolidation, if, following such reorganization, merger or
consolidation, the conditions described in clauses (i), (ii) and
(iii) of subparagraph (3) of this Schedule B are satisfied; or
(2) Individuals who, as of the date hereof, constitute
the Company's Board of Directors (the "Incumbent Board") cease
for any reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by a vote of
at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board, but excluding, for this
purpose, any such individual whose initial assumption of office
occurs as a result of either an actual or threatened election
contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person
other than the Board; or
(3) Approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, unless,
following such reorganization, merger or consolidation, (i) more
than 75% of, respectively, the then outstanding shares of common
stock of the corporation resulting from such reorganization,
merger or consolidation and the combined voting power of the then
outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Stock and
Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation in substantially the same
proportions as their ownership, immediately prior to such
reorganization, merger or consolidation, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities,
as the case may be, (ii) no Person (excluding the Company, any
employee benefit plan (or related trust) of the Company or such
corporation resulting from such reorganization, merger or
consolidation and any Person beneficially owning, immediately
prior to such reorganization, merger or consolidation, directly
or indirectly, 20% or more of the Outstanding Company Common
stock or Outstanding Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or
consolidation or the combined voting power of the then
outstanding voting securities of such corporation entitled to
vote generally in the election of directors and (iii) at least a
majority of the members of the board of directors of the
corporation resulting from such reorganization, merger or
consolidation were members of the Incumbent Board at the time of
the execution of the initial agreement providing for such
reorganization, merger or consolidation; or
(4) Approval by the shareholders of the Company of (i)
a complete liquidation or dissolution of the Company or (ii) the
sale or other disposition of all or substantially all of the
assets of the Company, other than to a corporation, with respect
to which following such sale or other disposition, (A) more than
75% of, respectively, the then outstanding shares of common
stock of such corporation and the combined voting power of the
then outstanding voting securities of such corporation entitled
to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities
immediately prior to such sale or other disposition in
substantially the same proportion as their ownership, immediately
prior to such sale or other disposition, of the Outstanding
Company Common Stock and Outstanding Company Voting Securities,
as the case may be, (B) no Person (excluding the Company and any
employee benefit plan (or related trust) of the Company or such
corporation and any Person beneficially owning, immediately prior
to such sale or other disposition, directly or indirectly, 20% or
more of the Outstanding Company Common Stock or Outstanding
Company Voting Securities, as the case may be) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities
of such corporation entitled to vote generally in the election of
directors and (C) at least a majority of the members of the board
of directors of such corporation were members of the Incumbent
Board at the time of the execution of the initial agreement or
action of the Board providing for such sale or other disposition
of assets of the Company.