Exhibit 10.185
THE CHARLES SCHWAB CORPORATION
SENIOR EXECUTIVE SEVERANCE POLICY
Introduction
The Board considers the avoidance of loss and distraction of
employees as a result of an actual or contemplated Change of Control to be
essential to protecting and enhancing the best interests of the Corporation and
its shareholders. The Board also believes that during the pendency of a Change
of Control and the transition period thereafter, the Board should be able to
receive and rely on disinterested service from employees regarding the best
interests of the Corporation and its shareholders without concern that employees
might be distracted or concerned by personal uncertainties and risks.
Accordingly, the Board has determined that appropriate steps
should be taken to assure the Corporation of the continued employment and
attention and dedication to duty of its employees and to seek to ensure the
availability of their continued service, notwithstanding a Change of Control.
Therefore, in order to fulfill the above purposes, the
following plan has been developed and is hereby adopted.
ARTICLE I
ESTABLISHMENT OF PLAN
As of the Effective Date, the Corporation hereby establishes a
separation compensation plan known as the The Charles Schwab Corporation Senior
Executive Severance Policy, as set forth in this document.
ARTICLE II
DEFINITIONS
As used herein the following words and phrases shall have the
following respective meanings unless the context clearly indicates otherwise.
(a) Annual Incentive Award. The Participant's target bonus
under the Corporation's annual incentive plans for the year in which the Change
of Control occurs.
(b) Annual Compensation. The sum of a Participant's Annual
Salary and Annual Incentive Award.
(c) Annual Salary. The Participant's regular annual base
salary immediately prior to his or her termination of employment, or if higher,
immediately prior to the Change of Control.
(d) Board. The Board of Directors of The Charles Schwab
Corporation.
(e) Change of Control. Any of the following events:
(1) The acquisition by any individual, entity or group (within
the meaning of Section 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
Corporation (the "Outstanding Corporation Common Stock") or (ii) the combined
voting power of the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors (the "Outstanding
Corporation Voting Securities"); provided, however, that for purposes of this
paragraph (1), the following acquisitions shall not constitute a Change of
Control: (i) any acquisition directly from the Corporation, (ii) any acquisition
by the Corporation, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Corporation or any corporation
controlled by the Corporation or (iv) any acquisition by any corporation
pursuant to a transaction which complies with clauses (i), (ii) and (iii) of
paragraph (3) hereof; or
(2) Individuals who, as of the Effective Date, constitute the
Board (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 Effective Date whose election, or nomination for
election by the Corporation'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 an actual or threatened election contest with
respect to the election or removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a Person other than the
Board; or
(3) Consummation of a reorganization, merger or consolidation
or sale or other disposition of all or substantially all of the assets of the
Corporation (a "Business Combination"), in each case, unless, following such
Business Combination, (i) all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the Outstanding
Corporation Common Stock and Outstanding Corporation Voting Securities
immediately prior to such Business Combination beneficially own, directly or
indirectly, more than 50% of, respectively, the then outstanding shares of
common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case
may be, of the corporation resulting from such Business Combination (including,
without limitation, a corporation which as a result of such transaction owns the
Corporation or all or substantially all of the Corporation's assets either
directly or through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such Business Combination,
of the Outstanding Corporation Common Stock and Outstanding Corporation Voting
Securities, as the case may be, (ii) no Person (excluding any corporation
resulting from such Business Combination or any employee benefit plan (or
related trust) of the Corporation or such corporation resulting from such
Business Combination) beneficially owns, directly or indirectly, 20% or more of,
respectively, the then outstanding shares of common stock of the corporation
resulting from such Business Combination or the combined voting power of the
then outstanding voting securities of such corporation except to the extent that
such ownership existed prior to the Business Combination and (iii) at least a
majority of the members of the board of directors of the corporation resulting
from such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board,
providing for such Business Combination; or
(4) Approval by the shareholders of the Corporation of a
complete liquidation or dissolution of the Corporation.
Notwithstanding the foregoing, no acquisition by (i) Charles
Schwab and/or his spouse or any or his lineal descendants or (ii) any trust
created by or for the benefit of Charles Schwab and/or his spouse or any of his
lineal descendants or (iii) the Schwab Family Foundation shall constitute a
Change of Control.
(f) Code. The Internal Revenue Code of 1986, as amended from
time to time.
(g) Committee. The Compensation Committee of the Board.
(h) Corporation. The Charles Schwab Corporation.
(i) Date of Termination. The date a Participant's employment
is actually terminated.
(j) Effective Date. December 7, 1995.
(k) Employer. The Corporation or a Subsidiary which has
adopted the Plan pursuant to Article V hereof.
(l) Participant. Any executive vice president or senior vice
president of the corporation at the time of a Change of Control.
(m) Plan. The Charles Schwab Corporation Senior Executive
Severance Policy.
(n) Protection Period. The period beginning on the date of a
Change of Control and ending on the second anniversary thereof.
(o) Subsidiary. Any corporation in which the Corporation,
directly or indirectly, holds a majority of the voting power of such
corporation's outstanding shares of capital stock.
(p) Tier 1 Participant. Any Participant who holds the title of
executive vice president of the Corporation at the time of the Change
of Control.
(q) Tier 2 Participant. Any Participant who holds the title of
senior vice president of the Corporation at the time of the Change of
Control.
ARTICLE III
ELIGIBILITY
3.1 Duration of Participation. A Participant shall only cease
to be a Participant in the Plan as a result of an amendment or termination of
the Plan complying with Article VII of the Plan, or when he ceases to be an
executive vice president or senior vice president of the Corporation, unless, at
the time he ceases to be such, such Participant is entitled to payment of a
Separation Benefit as provided in the Plan or there has been an event or
occurrence described in Section 4.2(a) which would enable the Participant to
terminate his employment and receive a Separation Benefit. A Participant
entitled to payment of a Separation Benefit or any other amounts under the Plan
shall remain a Participant in the Plan until the full amount of the Separation
Benefit and any other amounts payable under the Plan have been paid to the
Participant.
ARTICLE IV
SEPARATION BENEFITS
4.1 Right to Separation Benefit. A Participant shall be
entitled to receive from his Employer separation benefits in accordance with
Section 4.3 ("Separation Benefits") if the Participant's employment by an
Employer shall terminate in any circumstance specified in Section 4.2(a),
whether the termination is voluntary or involuntary; provided, that under no
circumstances shall a Participant be entitled to Separation Benefits under this
Plan if the Participant remains employed by any entity which is an Employer.
4.2 Termination of Employment.
(a) Terminations Which Give Rise to Separation
Benefits Under This Plan.
(i) Except as set forth in subsection (b)
below, any termination of employment with an Employer by action of the Employer
or any of its affiliates (excluding any transfer to another Employer), at any
time during the Protection Period, shall entitle a Participant to a Separation
Benefit in accordance with Section 4.3.
(ii) If, at any time during the Protection
Period, a Participant terminates employment for Good Reason, the Participant
shall be entitled to the Separation Benefits in accordance with Section 4.3. For
purposes of the Plan, "Good Reason" means any of the following:
(A) the assignment to the Participant of any duties
inconsistent in any respect with the Participant's position
(including status, offices, titles and reporting
requirements), authority, duties or responsibilities
immediately prior to a Change of Control, or any other
action by the Corporation which results in a diminution in
such position, authority, duties or responsibilities,
excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is
remedied by the Corporation promptly after receipt of notice
thereof given by the Participant;
(B) any diminution in the employee benefits provided to
the Participant, including retirement, welfare, stock
incentive, annual incentive, fringe benefits and other
benefits as compared to those provided to the Participant
immediately prior to the Change of Control, other than an
isolated, insubstantial and inadvertent failure not
occurring in bad faith and which is remedied by the
Corporation after receipt of notice thereof given by the
Participant;
(C) the Corporation's requiring the Participant to be
based at any office or location other than that where the
Participant was based immediately prior to the Change of
Control or the Corporation's requiring the Participant to
travel on Corporation business to a substantially greater
extent than required immediately prior to the Change of
Control;
(D) any purported termination by the Corporation of the
Participant's employment otherwise than as expressly
permitted by this Plan; or
(E) any failure by the Corporation to comply with and
satisfy Article VI of the Plan.
For purposes of the Plan, any good faith determination of "Good Reason" made by
the Participant shall be conclusive. Anything in this Plan to the contrary
notwithstanding, a termination by the Participant for any reason during the
30-day period immediately following the first anniversary of the Change of
Control shall be deemed to be a termination for Good Reason for all purposes of
this Plan.
(b) Terminations Which Do Not Give Rise to Separation
Benefits Under This Plan. If a Participant's employment is terminated for Cause,
disability, death or retirement, or voluntarily by the Participant in the
absence of an event described in subsection (a) of this Section 4.2, the
Participant shall not be entitled to Separation Benefits under the Plan.
(i) A termination for disability shall have
occurred where a Participant is terminated because illness or injury has
prevented him from performing his duties (as they existed immediately prior to
the illness or injury) on a full time basis for 180 consecutive business days.
(ii) A termination by retirement shall have
occurred where a Participant's termination is due to his voluntary normal or
early retirement under a qualified retirement plan sponsored by his Employer or
its affiliates, as defined in such plan.
(iii) A termination for Cause shall have
occurred where a Participant is terminated because of:
(A) the willful and continued failure of the
Participant to perform substantially the Participant's
duties with the Corporation or one of its affiliates (other
than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for
substantial performance is delivered to the Participant by
the Board or a Board elected officer of the Corporation
which specifically identifies the manner in which the Board
or the elected officer believes that the Participant has not
substantially performed the Participant's duties, or
(B) the willful engaging by the Participant in illegal
conduct or gross misconduct which is materially and
demonstrably injurious to the Corporation.
For purposes of this provision, no act or failure to act, on the part of the
Participant, shall be considered "willful" unless it is done, or omitted to be
done, by the Participant in bad faith or without reasonable belief that the
Participant's action or omission was in the best interests of the Corporation.
Any act, or failure to act, based upon authority given pursuant to a resolution
duly adopted by the Board or upon the instructions of the Chief Executive
Officer of the Corporation or based upon the advice of counsel for the
Corporation shall be conclusively presumed to be done, or omitted to be done, by
the Participant in good faith and in the best interests of the Corporation. The
cessation of employment of the Participant shall not be deemed to be for Cause
unless and until there shall have been delivered to the Participant a copy of a
resolution duly adopted by the affirmative vote of not less than three-quarters
of the entire membership of the Board at a meeting of the Board called and held
for such purpose (after reasonable notice is provided to the Participant and the
Participant is given an opportunity, together with counsel, to be heard before
the Board), finding that, in the good faith opinion of the Board, the
Participant is guilty of the conduct described in subparagraph (A) or (B) above,
and specifying the particulars thereof in detail.
4.3 Separation Benefits.
(a) If a Participant's employment is terminated in
circumstances entitling him or her to a Separation Benefit as provided in
Section 4.2(a), the Participant's Employer or the Corporation shall pay such
Participant, within ten days of the Date of Termination, a cash lump sum as set
forth in subsection (b) below and the continued benefits set forth in subsection
(c) below.
(b) The cash lump sum referred to in Section 4.3(a)
shall equal the aggregate of the following amounts:
(i) the sum of (1) the Participant's Annual Salary
through the Date of Termination to the extent not
theretofore paid, (2) the product of (x) the Annual
Incentive Award and (y) a fraction, the numerator of which
is the number of days in the such year through the Date of
Termination, and the denominator of which is 365, and (3)
any earned and unused vacation pay, in each case to the
extent not theretofore paid (collectively, "Accrued
Obligations"); and
(ii) an amount equal to the product of (x) three, in
the case of Tier 1 Participants, and two, in the case of
Tier 2 Participants, and (y) the Participant's Annual
Compensation.
(c) For three years, in the case of Tier 1
Participants, and for two years, in the case of Tier 2 Participants following a
Participant's termination of employment (in each case, the "Continuation
Period"), the Participant and his or her family shall be provided with medical,
dental and life insurance benefits as if the Participant's employment had not
been terminated; provided, however, that if the Participant becomes reemployed
with another employer and is eligible to receive medical or other welfare
benefits under another employer-provided plan, the medical and other welfare
benefits described herein shall be secondary to those provided under such other
plan during such applicable period of eligibility. For purposes of determining
eligibility (but not the time of commencement of benefits) of the Participant
for retiree medical benefits, if any, under the Corporation's plans, practices,
programs and policies, the Participant shall be considered to have remained
employed during the Continuation Period and to have retired on the last day of
such period.
(d) The Participant shall be entitled to outplacement
services at the Corporation's cost selected by the Participant, which cost shall
not exceed 25% of the Particpant's Annual Base Salary. The Participant shall
also be entitled to any unused portion of payments under the Corporation's
financial counseling assistance program for the year in which the Date of
Termination occurs.
4.4 Other Benefits Payable. The cash lump sum and continuing
benefits described in Section 4.3 above shall be payable in addition to, and not
in lieu of, all other accrued or vested or earned but deferred compensation,
rights, options or other benefits which may be owed to a Participant upon or
following termination, including but not limited to earned but unused vacation,
amounts or benefits payable under any bonus or other compensation plan, stock
option plan, stock ownership plan, stock purchase plan, life insurance plan,
health plan, disability plan or similar or successor plan (collectively, "Other
Benefits"); provided, that the foregoing shall not apply to any severance pay or
pay in lieu of notice required to be paid to such Participant under applicable
law.
4.5 Death, Disability; for Cause.
(a) Death. If the Participant's employment is terminated by
reason of the Participant's death during the Protection Period, the
Participant's legal representatives shall have no rights under this Plan, other
than for payment of Accrued Obligations and the timely payment or provision of
Other Benefits. Accrued Obligations shall be paid to the Participant's estate or
beneficiary, as applicable, in a lump sum in cash within 30 days of the
Participant's date of termination of employment. With respect to the provision
of Other Benefits, the term Other Benefits as utilized in this Section 4.5(a)
shall include, without limitation, and the Participant's estate and/or
beneficiaries shall be entitled to receive, benefits at least equal to the most
favorable benefits provided by the Corporation and affiliated companies to the
estates and beneficiaries of peer executives of the Corporation and such
affiliated companies under such plans, programs, practices and policies relating
to death benefits, if any, as in effect with respect to other peer executives
and their beneficiaries at any time during the 120-day period immediately
preceding the Change of Control or, if more favorable to the Participant's
estate and/or the Participant's beneficiaries, as in effect on the date of the
Participant's death with respect to other peer executives of the Corporation and
its affiliated companies and their beneficiaries.
(b) Disability. If the Participant's employment is terminated
by reason of the Participant's Disability during the Protection Period, the
Participant shall have no further rights under this Plan, other than for payment
of Accrued Obligations and the timely payment or provision of Other Benefits.
Accrued Obligations shall be paid to the Participant in a lump sum in cash
within 30 days of the Participant's date of termination. With respect to the
provision of Other Benefits, the term Other Benefits as utilized in this Section
4.5(b) shall include, and the Participant shall be entitled after the effective
date of the Participant's Disability to receive, disability and other benefits
at least equal to the most favorable of those generally provided by the
Corporation and its affiliated companies to disabled executives and/or their
families in accordance with such plans, programs, practices and policies
relating to disability, if any, as in effect generally with respect to other
peer executives and their families at any time during the 120-day period
immediately preceding the date of the Change of Controlor, if more favorable to
the Participant and/or the Participant's family, as in effect at any time
thereafter generally with respect to other peer executives of the Corporation
and its affiliated companies and their families.
(c) Cause; Other than for Good Reason. If the Participant's
employment shall be terminated for Cause during the Protection Period, the
Corporation shall have no further obligations to the Participant under this
Plan, other than the obligation to pay to the Participant (x) his or her Annual
Base Salary through the date of termination of employment, (y) the amount of any
compensation previously deferred by the Participant, and (z) Other Benefits, in
each case to the extent theretofore unpaid. If the Participant voluntarily
terminates employment during the Protection Period, excluding a termination for
Good Reason, the Corporation shall have no further obligations to the
Participant hereunder, other than for Accrued Obligations and the timely payment
or provision of Other Benefits. In such case, all Accrued Obligations shall be
paid to the Participant in a lump sum in cash within 30 days of the date of
termination of employment.
4.6 Certain Additional Payments by the Corporation.
(a) Anything in this Plan to the contrary notwithstanding, in
the event it shall be determined that any payment or distribution by the
Corporation to or for the benefit of the Participant (whether paid or payable or
distributed or distributable pursuant to the terms of this Plan or otherwise,
but determined without regard to any additional payments required under this
Section 4.6) (a "Payment") would be subject to the excise tax imposed by Section
4999 of the Code or any interest or penalties are incurred by the Participant
with respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the "Excise
Tax"), then the Participant shall be entitled to receive an additional payment
(a "Gross-Up Payment") in an amount such that after payment by the Participant
of all taxes (including 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 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 4.6, if it shall be determined that the Participant is entitled
to a Gross-Up Payment, but that the Payments do not exceed 110% of the greatest
amount (the "Reduced Amount") that could be paid to the Participant such that
the receipt of Payments would not give rise to any Excise Tax, then no Gross-Up
Payment shall be made to the Participant and the Payments, in the aggregate,
shall be reduced to the Reduced Amount.
(b) Subject to the provisions of Section 4.6(c), all
determinations required to be made under this Section 4.6, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by the Corporation's outside auditing firm or such other certified public
accounting firm as may be designated by the Participant (the "Accounting Firm")
which shall provide detailed supporting calculations both to the Corporation and
the Participant within 15 business days of the receipt of notice from the
Participant that there has been a Payment, or such earlier time as is requested
by the Corporation. In the event that the Accounting Firm is serving as
accountant or auditor for the individual, entity or group effecting the Change
of Control, the Participant shall appoint another nationally recognized
accounting firm to make the determinations required hereunder (which accounting
firm shall then be referred to as the Accounting Firm hereunder). 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 4.6, shall be paid by
the Corporation to the Participant within five days of the receipt of the
Accounting Firm's determination. Any determination by the Accounting Firm shall
be binding upon the Corporation and the 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 which will not have been made by the Corporation should have
been made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Corporation exhausts its remedies pursuant to
Section 4.6(c) and the 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 Participant.
(c) The 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 ten business days after the
Participant is informed in writing of such claim and shall apprise the
Corporation of the nature of such claim and the date on which such claim is
requested to be paid. The Participant shall not pay such claim prior to the
expiration of the 30-day period following the date on which it 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
Participant in writing prior to the expiration of such period that it desires to
contest such claim, the Participant shall:
(i) give the Corporation any information reasonably
requested by the Corporation relating to such claim,
(ii) 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,
(iii) cooperate with the Corporation in good faith in
order effectively to contest such claim, and
(iv) 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 Participant
harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 4.6(c), the Corporation shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Participant to pay the tax claimed and sue for a
refund or contest the claim in any permissible manner, and the 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 Participant to pay such claim and sue for a refund, the
Corporation shall advance the amount of such payment to the Participant, on an
interest-free basis and shall indemnify and hold the Participant harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further provided
that any extension of the statute of limitations relating to payment of taxes
for the taxable year of the 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 a Gross-Up Payment would be payable hereunder and the
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 the Participant of an amount
advanced by the Corporation pursuant to Section 4.6(c), the Participant becomes
entitled to receive any refund with respect to such claim, the Participant shall
(subject to the Corporation's complying with the requirements of Section 4.6(c))
promptly pay to the Corporation the amount of such refund (together with any
interest paid or credited thereon after taxes applicable thereto). If, after the
receipt by the Participant of an amount advanced by the Corporation pursuant to
Section 4.6(c), a determination is made that the Participant shall not be
entitled to any refund with respect to such claim and the Corporation does not
notify the Participant in writing of its intent to contest such denial of refund
prior to the expiration of 30 days after such determination, then such advance
shall be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
4.7 Payment Obligations Absolute.
Subject to Section 4.6, the obligations of the Corporation and
the Employers to pay the Separation Benefits described in Section 4.3 shall be
absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, any set-off, counterclaim, recoupment, defense or
other right which the Corporation or any of its Subsidiaries may have against
any Participant. In no event shall a Participant be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to a Participant under any of the provisions of this Plan, nor shall the amount
of any payment hereunder be reduced by any compensation earned by a Participant
as a result of employment by another employer, except as specifically provided
in Section 4.3(c).
ARTICLE V
PARTICIPATING EMPLOYERS
This Plan may be adopted by any Subsidiary of the Corporation
if the Board of Directors of the Corporation approves such adoption. Upon such
adoption, the Subsidiary shall become an Employer hereunder and the provisions
of the Plan shall be fully applicable to the Employees of that Subsidiary who
are Participants.
ARTICLE VI
SUCCESSOR TO CORPORATION
This Plan shall bind any successor of the Corporation,
substantially all its assets or substantially all its businesses (whether direct
or indirect, by purchase, merger, consolidation or otherwise), in the same
manner and to the same extent that the Corporation would be obligated under this
Plan if no succession had taken place. In the case of any transaction in which a
successor would not by the foregoing provision or by operation of law be bound
by this Plan, the Corporation shall require such successor expressly and
unconditionally to assume and agree to perform the Corporation's obligations
under this Plan, in the same manner and to the same extent that the Corporation
would be required to perform if no such succession had taken place. The term
"Corporation," as used in this Plan, shall mean the Corporation as hereinbefore
defined and any successor or assignee to the business or assets which by reason
hereof becomes bound by this Plan.
ARTICLE VII
DURATION, AMENDMENT AND TERMINATION
7.1 Duration. If a Change of Control has not occurred, this
Plan shall expire five years from the Effective Date, unless extended for an
additional period or periods by resolution adopted by the Board.
If a Change of Control occurs, this Plan shall continue in
full force and effect and shall not terminate or expire until after all
Participants who become entitled to any payments hereunder shall have received
such payments in full and all adjustments required to be made pursuant to
Section 4.6 have been made.
7.2 Termination and Amendment. The Plan shall be subject to
amendment, change, substitution, deletion, revocation or termination
(collectively, "Amendment") by the Board of Directors of the Corporation at any
time prior to a Change of Control other than at the request of a third party who
has taken steps reasonably calculated to effect a Change of Control. After a
Change of Control, the Plan shall not be subject to Amendment in any respect
which adversely affects the rights of a Participant without the consent of that
Participant.
7.3 Form of Amendment. The form of any amendment of the Plan
shall be a written instrument signed by the Chief Executive Officer of the
Corporation. An amendment of the Plan in accordance with the terms hereof shall
automatically effect a corresponding amendment to all Participants' rights
hereunder.
ARTICLE VIII
MISCELLANEOUS
8.1 Indemnification. If after a Change of Control a
Participant institutes any legal action in seeking to obtain or enforce, or is
required to defend in any legal action the validity or enforceability of, any
right or benefit provided by this Plan, the Corporation or the Employer will pay
for all actual legal fees and expenses reasonably incurred (as incurred) by such
Participant, regardless of the outcome of such action. 8.2 Employment Status.
This Plan does not constitute a contract of employment or impose on the
Participant or the Participant's Employer any obligation to retain the
Participant as an Employee, to change or not change the status of the
Participant's employment, or to change the Corporation's policies or those of
its Subsidiaries regarding termination of employment. 8.3 Claim Procedure. If a
Participant or former Participant makes a written request alleging a right to
receive benefits under this Plan or alleging a right to receive an adjustment in
benefits being paid under the Plan, the Corporation shall treat it as a claim
for benefit. All claims for benefit under the Plan shall be sent to the Human
Resources Department of the Corporation and must be received within 30 days
after termination of employment. If the Corporation determines that any
individual who has claimed a right to receive benefits, or different benefits,
under the Plan is not entitled to receive all or any part of the benefits
claimed, it will inform the claimant in writing of its determination and the
reasons therefor in terms calculated to be understood by the claimant. The
notice will be sent within 90 days of the claim unless the Corporation
determines additional time, not exceeding 90 days, is needed. The notice shall
make specific reference to the pertinent Plan provisions on which the denial is
based, and describe any additional material or information that is necessary.
Such notice shall, in addition, inform the claimant what procedure the claimant
should follow to take advantage of the review procedures set forth below in the
event the claimant desires to contest the denial of the claim. The claimant may
within 90 days thereafter submit in writing to the Corporation a notice that the
claimant contests the denial of his or her claim by the Corporation and desires
a further review. The Corporation shall within 60 days thereafter review the
claim and authorize the claimant to appear personally and review pertinent
documents and submit issues and comments relating to the claim to the persons
responsible for making the determination on behalf of the Corporation. The
Corporation will render its final decision with specific reasons therefor in
writing and will transmit it to the claimant within 60 days of the written
request for review, unless the Corporation determines additional time, not
exceeding 60 days, is needed. The Corporation shall be the named fiduciary with
respect to the Plan.
8.4 Validity and Severability. The invalidity or
unenforceability of any provision of the Plan shall not affect the validity or
enforceability of any other provision of the Plan, which shall remain in full
force and effect, and any prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other
jurisdiction.
8.5 Governing Law. The validity, interpretation, construction
and performance of the Plan shall in all respects be governed by the laws of
Delaware, without reference to principles of conflict of law.
8.6 Gender; Plurals. Unless the context otherwise specifically
requires, the masculine shall include the feminine and the singular the plural
and vice versa.