Exhibit 10.(ee)
CHANGE IN CONTROL AGREEMENT
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(Strategic Business Unit Group Vice President and General
Manager )
CHANGE IN CONTROL AGREEMENT (this "Agreement") dated as of (DATE) by and
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between [NAME OF SUBSIDIARY], (INCORPORATED)_______ corporation (the
"Company"), and ________________ ("Employee") (capitalized terms used herein and
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not otherwise defined shall have the meanings ascribed thereto in Section 9
hereof).
W I T N E S S E T H:
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WHEREAS, in order to induce Employee to continue employment with, and
remain in the employment of the Company, the Company and Employee desire to
enter into this Agreement to provide Employee with appropriate compensation in
the event of a Change in Control.
NOW, THEREFORE, in consideration of the foregoing, of the mutual covenants
and agreements herein contained and for other good and valuable consideration,
the receipt, adequacy and sufficiency of which are hereby acknowledged, the
parties, intending legally to be bound, hereby agree as follows:
1. Term of Agreement. The term of this Agreement shall commence on the
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date hereof and shall terminate on the third anniversary of the date hereof;
provided; however, that this Agreement shall automatically renew for successive
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one year terms unless either party delivers written notice to the other party at
least 90 days in advance of the expiration of the initial term or the applicable
renewal term, as the case may be, to the effect that such party desires to
terminate this Agreement as of the last day of the initial term or applicable
renewal term, as the case may be. The Company shall not terminate Employee's
employment by the Company in connection with or in anticipation of a Change in
Control.
2. Post Change in Control Employment.
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(a) Commencement of Employment Period. The Company hereby employs
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Employee, and Employee hereby accepts such employment, effective upon the
occurrence of a Change in Control (the "Effective Date"), upon the terms and
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Conditions hereinafter set forth.
(b) Termination of Employment Period. The term of employment under
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this Agreement shall terminate upon the earliest to occur of the following
events (the date of such event being referred to as the "Termination Date,"
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except as more particularly defined in Section 9 or 4(e)):
(i) Employee's death;
(ii) the Company's termination of Employee's employment by
the Company as a result of Employee's Disability;
(iii) the Company's termination of Employee's employment by
the Company for Cause or without Cause;
(iv) Employee's termination of Employee's employment by the
Company for Good Reason or without Good Reason; and
(v) the second anniversary of the Effective Date (the
period commencing on the Effective Date and ending on such date is referred
to as the "Subject Period"); provided, however, that such period of
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employment may be extended by written agreement of the parties (it being
understood that if no such written agreement is entered into and Employee
remains employed by the Company after the completion of the Subject Period,
such employment shall be "at-will" unless different terms are established
in writing).
(c) Notice of Termination. Any purported termination of Employee's
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employment by the Company or by Employee shall be communicated by to the other
party hereto by a written notice which shall indicate the specific termination
provision of this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of
Employee's employment under the provision so indicated.
(d) Compensation During Employment Period. During the Employment
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Period, Employee shall be entitled to the following compensation:
(i) The Company shall pay to Employee a monthly base
salary in an amount which is at least equal to Employee's highest base
monthly salary in effect during the 12-month period immediately preceding
the Effective Date.
(ii) The Company shall pay to Employee an annual cash
bonus (the "Required Bonus"), payable within 45 days after each
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anniversary of the Effective Date, in an amount which is at least equal the
greater of (A) to the highest annual bonus paid to Employee in respect of
any of the three fiscal years of the Company ended immediately preceding
the Effective Date and (B) the bonus which would otherwise be required to
be paid to Employee under the EVA Plan for the applicable period.
(iii) The Company shall continue to provide all employee
benefit programs and fringe benefits, including ,without limitation,
incentive, savings, bonus, welfare benefit, reimbursement and retirement
plans and the provision of Company automobiles, and permit Employee to
participate therein at rates of participation and on terms and conditions
which are at least equal to the most favorable rates of participation and
terms and conditions available to Employee at any time during the 120-day
period immediately preceding the Effective Date.
(iv) All cash compensation payable pursuant to this
Section shall be subject to all withholding and deductions required by
applicable law.
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3. Compensation Upon Termination of Employment Period.
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(a) Death. If Employee's employment by the Company is terminated as
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a result of the occurrence of Employee's death pursuant to Section 2(b)(i), the
Company shall pay to Employee's estate the compensation and other benefits,
including the bonus described in Section 2(d)(ii) pro-rated for partial years of
service, unpaid deferred compensation and vacation pay, expressly provided under
this Agreement through the Termination Date, as well as any death benefits
available under any Company plan or policy.
(b) Disability. If Employee's employment by the Company is
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terminated by the Company as a result of the occurrence of Employee's Disability
pursuant to Section 2(b)(ii), the Company shall pay to Employee the compensation
and other benefits, including the bonus described in Section 2(d)(ii) pro-rated
for partial years of service, unpaid deferred compensation and vacation pay,
expressly provided under this Agreement through the Termination Date, as well as
any disability benefits available under any Company plan or policy.
(c) Termination for Cause. If Employee's employment by the Company
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is terminated by the Company for Cause pursuant to Section 2(b)(iii), the
Company shall pay to Employee the compensation and other benefits, including
unpaid deferred compensation and vacation pay (but excluding the bonus described
in Section 2(d)(ii)), expressly provided under this Agreement through the
Termination Date.
(d) Termination without Cause. If Employee's employment by the
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Company is terminated by the Company without Cause pursuant to Section
2(b)(iii), the Company shall pay to Employee (i) the compensation and other
benefits, including unpaid deferred compensation and vacation pay (but excluding
the bonus described in Section 2(d)(ii)), expressly provided under this
Agreement through the Termination Date and (ii) a lump sum cash payment (the
"Severance Payment") equal to the sum of:
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(A) the product of (I) the number set forth in Section
3(d)(ii)(A) of attached Schedule A multiplied by (II) the sum (y)
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Employee's annual base salary in effect at the Termination Date and (z) the
Highest Annual Bonus (as hereinafter defined);
(B) an amount (the "Highest Annual Bonus") equal to the
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greater of (I) the Required Bonus and (II) the annual bonus received by
Employee during the most recent fiscal year of the Company, in each case
prorated to reflect the partial year for which Employee was employed by the
Company from and after the most recent anniversary of the Effective Date;
(C) the amount the Company would have been required to
contribute on behalf of Employee under its defined contribution plans had
Employee remained employed by the Company in the same status after the
Termination Date for the duration of the Subject Period; and
(D) the full positive balance in Employee's "bonus bank"
account maintained by Parent pursuant to the EVA Plan (it being agreed that
Employee shall not be required to pay to the Company or Parent any negative
balance in such
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"bonus bank" account), in each case notwithstanding anything to the
contrary contained in the EVA Plan.
In addition, (i) the Company, at its expense, shall continue to provide
Employee with all employee benefit programs (other than welfare benefit
programs) and fringe benefits specified in Section 2(d)(iii) for the duration of
the Subject Period, or until Employee's death, whichever is the shorter period;
(ii) the Company, at its expense (not to exceed the amount set forth in Section
3(d) of attached Schedule A), shall provide Employee with outplacement services;
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and (iii) all stock options, shares of restricted stock and other stock or stock
based awards granted by the Company to Employee shall become fully vested,
notwithstanding the terms and conditions thereof or any plans pursuant to which
such grants or awards were made (the provisions of this paragraph are referred
to as the "Other Severance Benefits").
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(e) Termination by Employee.
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(i) Except as set forth in Section 3(e)(ii), if Employee's
employment by the Company is terminated by Employee without Good Reason
pursuant to Section 2(b)(iv), the Company shall pay to Employee the
compensation and other benefits, including unpaid deferred compensation and
vacation pay (but excluding the bonus described in Section 2(d)(ii)),
expressly provided under this Agreement through the Termination Date.
(ii) If Employee's employment by the Company is terminated
by Employee (A) without Good Reason pursuant to Section 2(b)(iv) within 30
days after the first year anniversary of an Effective Date arising by
reason of a Parent Change in Control or (B) for Good Reason pursuant to
Section 2(b)(iv) at any time from and after an Effective Date arising from
a Parent Change in Control or a Company Change in Control, the Company
shall pay to Employee (A) the compensation and other benefits, including
unpaid deferred compensation and vacation pay (but excluding the bonus
described in Section 2(d)(ii)), expressly provided under this Agreement
through the Termination Date and (B) a lump sum cash payment equal to the
Severance Payment. In addition, Employee shall be entitled to the Other
Severance Benefits.
4. Additional Understandings.
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(a) Timing of Certain Payments. The payments provided for in
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Section 3 shall be made not later than the 30th day following the Termination
Date.
(b) Retirement Benefits. In addition to all other amounts payable
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to Employee under Section 3, following the termination of Employee's employment
by the Company, Employee shall be entitled to receive all benefits payable to
Employee under any plan or agreement relating to retirement benefits.
(c) No Mitigation. Employee shall not be required to mitigate the
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amount of any payment provided for in Section 3 by seeking other employment or
otherwise, nor shall the amount of any payment or benefit provided for in
Section 3 be reduced by any compensation earned by Employee as the result of
employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by Employee to the Company or otherwise.
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(d) Excise Tax Gross-Up.
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(i) In the event that Employee becomes entitled to the payments
and benefits provided under Section 3 above and/or any other payments or
benefits in connection with a change in control or termination of
Employee's employment with the Company (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the
Company, any person whose actions result in a change in control or any
person affiliated with the Company or such person) (collectively, the
"Payments"), if any of the Payments will be subject to the tax (the "Excise
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Tax") imposed by Section 4999 of the Code, then (A) if the aggregate amount
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of the Payments is equal to or greater than 330% of the "base amount" as
defined in Section 280G(b)(3) of the Code, then the Company shall pay to
Employee, at least 30 days prior to the time payment of any such Excise Tax
is due, an additional amount (the "Gross-Up Payment") such that the net
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amount retained by Employee, after deduction of any Excise Tax and any
federal and state and local income tax imposed on the Gross-Up Payment,
shall be equal to the Excise Tax imposed on the Payments; and (B) if the
aggregate amount of the Payments is less than 330% of the "base amount,"
then the aggregate present value of the payments made pursuant to the terms
of this Agreement alone without taking into account payments made pursuant
to any other agreements between the Company and Employee shall be reduced
so that the Payment equals 299.99% of the "base amount" (it being
understood that in no event shall the amount of the payment made pursuant
to the terms of this Agreement be less than $0).
(ii) For purposes of determining whether any of the Severance
Payments will be subject to the Excise Tax and the amount of such Excise
Tax, (A) the Payments shall be treated as "parachute payments" within the
meaning of Section 280G(b)(2) of the Code, and all "excess parachute
payments" within the meaning of Section 280G(b)(l) of the Code shall be
treated as subject to the Excise Tax, unless, in the opinion of tax counsel
selected by the Company's independent auditors and reasonably acceptable to
Employee, the Payments (in whole or in part) do not constitute parachute
payments or excess parachute payments or are otherwise not subject to the
Excise Tax, (B) the amount of the Payments which shall be treated as
subject to the Excise Tax shall be equal to the lesser of (y) the total
amount of the Payments or (z) the amount of excess parachute payments
within the meaning of Section 280G(b)(l) (after applying clause (A) above),
and (C) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Company's independent auditors in
accordance with the principles of Section 280G(d)(3) and (4) of the Code.
(iii) For purposes of determining the amount of the Gross-Up
Payment, Employee shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made and state and local income taxes
at the highest marginal rate of taxation in the state and locality of
Employee's residence on the Termination Date, net of the maximum reduction
in federal income taxes which could be obtained from deduction of such
state and local taxes.
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(iv) In the event that the Excise Tax is subsequently determined
to be less than the amount taken into account hereunder at the time of
termination of Employee's employment, Employee shall repay to the Company
at the time that the amount of such reduction in Excise Tax is finally
determined, the portion of the Gross-Up Payment attributable to such
reduction (plus the portion of the Gross-Up Payment attributable to the
Excise Tax and federal and state and local income tax imposed on the Gross-
Up Payment being repaid by Employee if such repayment results in a
reduction in Excise Tax and/or a federal and state and local income tax
deduction) plus interest on the amount of such repayment at the rate
provided in Section 1274(b)(2)(B) of the Code. In the event that the Excise
Tax is determined to exceed the amount taken into account hereunder at the
time of the termination of Employee's employment (including by reason of
any payment the existence or amount of which cannot be determined at the
time of the Gross-Up Payment), the Company shall make an additional Gross-
Up Payment in respect of such excess (plus any interest payable with
respect to such excess) at the time that the amount of such excess is
finally determined.
(e) Company Successors. The Company will require any successor
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(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such assumption and
agreement prior to the effectiveness of any such succession shall be a breach of
this Agreement and shall entitle Employee to compensation from the Company in
the same amount and on the same terms as Employee would be entitled to hereunder
if Employee terminated Employee's employment by the Company for Good Reason,
except that for purposes of implementing the foregoing, the date on which any
such succession becomes effective shall be deemed the Termination Date. As used
in this Agreement, "Company" shall mean the Company as herein before defined
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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.
(f) No Contract of Employment. This Agreement shall not be construed
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as creating an express or implied contract of employment and, subject to Section
1 and except as otherwise agreed in writing between the Company and Employee,
Employee shall not have any right to be retained in the employ of the Company.
5. Confidential Information and Ownership of Property.
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(a) Confidential Information. Employee agrees to use all
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Confidential Information solely in connection with the performance of services
for or on behalf of the Company. Employee shall not, during the term of this
Agreement, or at any time after the termination of this Agreement, in any
manner, either directly or indirectly, (i) disseminate, disclose, use or
communicate any Confidential Information to any person or entity, regardless of
whether such Confidential Information is considered to be confidential by third
parties, or (ii) otherwise directly or indirectly misuse any Confidential
Information; provided, however, that (y) none of the provisions of this Section
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shall apply to disclosures made for valid business purposes of the Company or
(z) that Employee shall not be obligated to treat as confidential any
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Confidential Information that (I) was publicly known at the time of disclosure
to Employee; (II) becomes publicly known or available thereafter other than by
means in violation of this Agreement or any other duty owed to the Company or
any of its Affiliates by any person or entity; or (III) is lawfully disclosed to
Employee by a third party. Notwithstanding the foregoing, Employee shall be
permitted to disclose Confidential Information to the extent required to enforce
Employee's rights hereunder in any litigation arising under, or pertaining to,
this Agreement provided that Employee shall give prior written notice to the
Company of any such disclosure so that the Company may have an opportunity to
protect the confidentiality of such Confidential Information in such litigation.
(b) Ownership of Property. Employee agrees that all works of
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authorship developed, authored, written, created or contributed to during the
term of this Agreement for the benefit of the Company, whether solely or jointly
with others, shall be considered works-made-for-hire. Employee agrees that such
works shall be the sole and exclusive property of the Company (or its
appropriate Affiliate) and that all right, title and interest therein or
thereto, including all intellectual property rights existing or obtained in
connection therewith, shall likewise be the sole and exclusive property of the
Company (or its appropriate Affiliate). Employee agrees further that, in the
event that any work is not considered to be work-made-for-hire by operation of
law, Employee will immediately, and without further compensation, assign all of
Employee's right, title and interest therein to the Company (or its designated
Affiliate), its successors and assigns. At the request and expense of the
Company, Employee agrees to perform in a timely manner such further acts as may
be necessary or desirable to transfer, defend or perfect the Company's ownership
of such work and all rights incident thereto.
6. Covenant Not to Compete. Employee covenants and agrees that
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Employee shall not, during the term of Employee's employment by the Company or
any Affiliate thereof and for the Non-Compete Period, directly or indirectly own
an interest in, operate, join, control, advise, work for, consult to, have a
financial interest which provides any control of, or participate in any
corporation, partnership, proprietorship, firm, association, person, or other
entity producing, designing, providing, soliciting orders for, selling,
distributing, consulting to, or marketing or re-marketing products, goods,
equipment, or services competitive with or in substantially the same line of
business as the Company or any Affiliate thereof, or any part thereof, as of the
commencement of the Non-Compete Period. This prohibition applies in the
territory specified in Section 6 of attached Schedule A. This covenant does not
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prohibit the mere ownership of less than three percent (3%) of the outstanding
stock of any publicly-traded corporation as long as Employee is not otherwise in
violation of this Agreement.
7. Covenant Against Solicitation of Employees. During the term of
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Employee's employment by the Company and for the Non-Compete Period, Employee
shall not employ employees or agents or former employees or agents of the
Company or its Affiliates or, directly or indirectly, solicit or otherwise
encourage the employment of employees or agents or former employees or agents of
the Company or its Affiliates; provided, however, that this restriction shall
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not apply to former employees or agents (y) who, as of the date of termination
of Employee's employment by the Company, have not worked for any of the Company
or its Affiliates during the twelve preceding months or (z) whose employment by
the Company or any Affiliate thereof was terminated by the Company.
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8. Remedies.
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(a) Employee Acknowledgements. Employee acknowledges (i) that
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the covenants contained in Sections 5, 6 and 7, including, without limitation,
the time and geographic limits (collectively, the "Restrictive Covenants"), are
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reasonable and appropriate and that Employee will not any claim to the contrary
in any action brought by the Company or its Affiliates to enforce any of such
provisions and (ii) that should Employee violate any of the Restrictive
Covenants, it will be difficult to determine the resulting damages to the
Company and its Affiliates and, in addition to any other remedies the Company
and its Affiliates may have, (A) the Company and its Affiliates shall be
entitled to temporary injunctive relief without being required to post a bond
and permanent injunctive relief without the necessity of proving actual damage;
and (B) the Company shall have the right to offset against its obligation to
make any payments to Employee under this Agreement or otherwise to the extent of
any money damages incurred or suffered by the Company and its Affiliates. The
Company may elect to seek one or more of these remedies at its sole discretion
on a case by case basis. Failure to seek any or all remedies in one case shall
not restrict the Company from seeking any remedies in another situation. Such
action by the Company shall not constitute a waiver of any of its rights.
(b) Intent. It is the parties' intent that each of the Restrictive
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Covenants be read and interpreted with every reasonable inference given to its
enforceability. However, it is also the parties' intent that if any term,
provision or condition of the Restrictive Covenants is held by a court of
competent jurisdiction to be invalid, void or unenforceable, the remainder of
the provisions thereof shall remain in full force and effect and shall in no way
be affected, impaired or invalidated. Finally, it is also the parties' intent
that if a court should determine any of the Restrictive Covenants are
unenforceable because of over-breadth, then the court shall modify said covenant
so as to make it reasonable and enforceable under the prevailing circumstances.
(c) Tolling. In the event of any breach by Employee of any
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Restrictive Covenant, the running of the period of restriction shall be
automatically tolled and suspended for the duration of such breach, and shall
automatically recommence when such breach is remedied in order that the Company
shall receive the full benefit of Employee's compliance with each of the
Restrictive Covenants.
(d) Independent Enforcement. Employee agrees that the Restrictive
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Covenants shall be enforced independently of any other obligations between the
Company, on the one hand, and Employee, on the other, and that the existence of
any other claim or defense shall not affect the enforceability of the
Restrictive Covenants or the remedies provided herein. The Restrictive Covenants
shall be in addition to and shall not replace any other restrictive covenant
agreement that Employee may currently have (or hereafter enter into) with the
Company or any of its Affiliates.
(e) Survival. The provisions of this Section 8 shall survive the
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termination of this Agreement.
9. Certain Defined Terms. For purposes of this Agreement the following
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terms and phrases shall have the following meanings:
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"Affiliate" means any person or entity who or which, directly or
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indirectly, through one or more intermediaries, controls or is controlled by, or
is under common control with, a specified person or entity (the term "control"
for these purposes meaning the ability, whether by ownership of shares or other
equity interests, by contract or otherwise, to elect a majority of the directors
of a corporation, to act as or select the managing or general partner of a
partnership, or otherwise to select, or have the power to remove and then
select, a majority of those persons exercising governing authority over an
entity).
"Cause", with respect to the termination of Employee's employment by the
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Company, means (i) the willful and continued refusal by Employee to perform a
lawful and reasonable order, direction or instruction of the Board of Directors
or similar governing body within a reasonable period of time after a written
demand for substantial performance is delivered to Employee by the Board of
Directors or similar governing body which demand specifically identifies the
manner in which the Board believes that Employee has not substantially performed
such an order, direction or instruction; or (ii) the willful misconduct by
Employee in the performance of Employee's duties to the Company or the willful
engaging by Employee in conduct which, in either case, is illegal or materially
injurious to the Company. For purposes of this definition, no act, or failure
to act, on Employee's part shall be deemed "willful" unless done, or omitted to
be done, by Employee not in good faith and without reasonable belief that
Employee's action or omission was in the best interest of the Company. In
addition, notwithstanding the foregoing, Employee's employment by the Company
shall not be deemed to have been terminated for Cause unless and until there
shall have been delivered to Employee a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire membership of the
Board of Directors or similar governing body at a meeting of the Board of
Directors or similar governing body called and held for such purpose (after
reasonable notice to Employee and an opportunity for Employee, together with
counsel, to be heard before the Board of Directors or similar governing body),
finding that in the good faith opinion of the Board of Directors or similar
governing body, Employee was guilty of conduct set forth above in clauses (i) or
(ii) of the first sentence of this definition and specifying the particulars
thereof in detail.
"Change in Control" means a Company Change in Control or a Parent Change in
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Control.
"Code" means the Internal Revenue Code of 1986, as amended.
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"Company Change in Control" means the occurrence of any one of the
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following events:
(i) (A) the ownership, as a result of acquisition, merger,
consolidation, reorganization or otherwise, by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange
Act of beneficial ownership (within the meaning of Rule 13d-3 promulgated
under the Exchange Act)), other than Parent and its Affiliates, of
securities of the Company entitled to aggregate voting power which exceeds
the aggregate voting power represented by securities of the Company held by
Parent and its Affiliates; and (B) Parent and its Affiliates cease to
control the day-to-day operations of the Company through ownership of
Company securities, by contract, operating agreement or otherwise; or
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(ii) the consummation of an agreement for the sale or
disposition by the Company of all or substantially all the Company's assets
to a party other than Parent or any Affiliate thereof.
"Confidential Information" means all software, trade secrets, work products
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created by Employee for the Company or any of its Affiliates, know-how, ideas,
techniques, theories, discoveries, formulas, plans, charts, designs, drawings,
lists of current or prospective clients, business plans and proposals, current
or prospective business opportunities, financial records, research and
development, marketing strategies and programs and reports and other proprietary
information created or obtained by Employee for the benefit of the Company or
any of its Affiliates during the course of employment by the Company.
"Disability" means the inability of Employee to perform substantially all
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Employee's duties and responsibilities to the Company by reason of a physical or
mental illness or infirmity for either (i) a continuous period of six months or
(ii) 180 days during any consecutive twelve-month period.
"Employment Period" means the date commencing on the Effective Date and
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terminating on the Termination Date.
"EVA Plan" means the Economic Value Added Improvement Incentive Plan
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adopted by Parent, as the same may be amended, modified, supplemented or
restated from time to time (including any successor thereto or replacement
therefor).
"Exchange Act" means the Securities Exchange Act of 1934, as amended.
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"Good Reason" means the occurrence, without the express written consent of
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Employee, of any one of the following events, unless such circumstances are
fully corrected prior to the Termination Date specified in the applicable notice
of termination delivered pursuant to Section 2(b):
(i) the assignment to Employee of any duties inconsistent with
Employee's position and status with the Company as set forth on attached
Schedule A or a substantial adverse alteration in the nature or status of
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Employee's employment responsibilities from those in existence on the date
hereof;
(ii) the relocation of Employee's office or job location to a
location not within seventy-five miles of Employee's present office or job
location, except for required travel on the Company's business to an extent
substantially consistent with Employee's present business travel
obligations;
(iii) the failure by the Company to pay to Employee any portion
of the compensation required hereunder or under any compensation plan or
program of the Company, within ten business days of the date such
compensation is due;
(iv) the failure of the Company to obtain a satisfactory
agreement from any successor to assume and agree to perform this Agreement,
as contemplated in Section 4(e) hereof; or
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(v) any purported termination of Executive's employment which
is not effected pursuant to a Notice of Termination satisfying the
requirements of Section 2.
"Non-Compete Period" means the period commencing on the date upon which
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Employee ceases to be employed by the Company or any Affiliate thereof and
terminating as specified on Section 9 of attached Schedule A thereafter.
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"Parent" means Material Sciences Corporation, a Delaware corporation,
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together with its successors and assigns.
"Parent Change in Control" means the occurrence of any one of the following
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events:
(i) there is an acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2) of the Exchange Act of
beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Exchange Act) of 20% or more of the combined voting power of the then
outstanding voting securities of Parent entitled to vote generally in the
election of directors;
(ii) during any period of two consecutive years, individuals who
at the beginning of such period constitute the Board of Directors of Parent
and any new director (other than a director designated by a person who has
entered into an agreement with Parent to effect a transaction described in
paragraphs (i) or (iii) of this definition) whose election by the Board of
Directors of Parent or nomination for election by Parent stockholders was
approved by a vote of at least two-thirds (2/3) of the directors then still
in office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for
any reason to constitute a majority thereof; or
(iii) the stockholders of Parent approve (A) a merger or
consolidation of Parent with any other entity, other than a merger or
consolidation which would result in the voting securities of Parent
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or through the surviving entity) at least 50% of the
combined voting power of the voting securities of Parent or such surviving
entity outstanding immediately after such merger or consolidation, or (B) a
plan of complete liquidation of Parent or an agreement for the sale or
disposition by Parent of all or substantially all Parent's assets.
"Termination Date" means
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(i) if Employee's employment is terminated for Disability, 30
days after Notice of Termination is given (provided that Employee shall not
have returned to the full-time performance of Employee's duties during such
30 day period); and
(ii) if Employee's employment is terminated pursuant to Section
2(b) for any other reason (other than death or Disability), the date
specified in the Notice of Termination (which, in the case of a termination
for Cause shall not be less
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than 30 days, and in the case of a termination for Good Reason shall not be
less than 15 nor more than 60 days, respectively, from the date such Notice
of Termination is given);
provided; however, that if prior to the Termination Date (as determined without
- -------- -------
regard to this provision), the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the termination, the
Termination Date shall be the date on which the dispute is finally determined,
either by mutual written agreement of the parties, by a binding arbitration
award, or by a final judgment, order or decree of a court of competent
jurisdiction (which is not appealable or with respect to which the time for
appeal therefrom has expired and no appeal has been perfected); provided;
--------
further, however, that the Termination Date shall be extended by a notice of
- ------- -------
dispute only if such notice is given in good faith and the party giving such
notice pursues the resolution of such dispute with reasonable diligence. During
the pendency of any such dispute, the Company will continue to pay Employee's
full compensation in effect when the notice giving rise to the dispute was given
(including, but not limited to, base salary) and continue Employee as a
participant in all compensation, benefit and insurance plans in which Employee
was participating when the notice giving rise to the dispute was given, until
the dispute is finally resolved in accordance with this definition. Amounts
paid under this paragraph are in addition to all other amounts due under this
Agreement and shall not be offset against or reduce any other amounts due under
this Agreement.
10. Miscellaneous.
-------------
(a) Amendment. This Agreement may be amended, modified or
---------
supplemented but only in writing signed by each of the parties hereto.
(b) Waivers. The failure of a party hereto at any time or times to
-------
require performance of any provision hereof shall in no manner affect its right
at a later time to enforce the same. No waiver by a party of any condition or of
any breach of any term, covenant, representation or warranty contained in this
Agreement shall be effective unless in writing, and no waiver in any one or more
instances shall be deemed to be a further or continuing waiver of any such
condition or breach in other instances or a waiver of any other condition or
breach of any other term, covenant, representation or warranty.
(c) Governing Law. SECTIONS 5, 6, 7 AND 8 OF THIS AGREEMENT SHALL BE
-------------
GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF ____,
WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS. ALL OTHER SECTIONS OF
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF ILLINOIS, WITHOUT REGARD TO THE PRINCIPLES OF CONFLICTS OF LAWS.
(d) INTENTIONALLY OMITTED.
----------------------
(e) Counterparts. This Agreement may be executed in counterparts,
------------
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.
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(f) Interpretation. The headings preceding the text of Articles and
--------------
Sections included in this Agreement are for convenience only and shall not
be deemed part of this Agreement or be given any effect in interpreting
this Agreement. The use of the masculine, feminine or neuter gender herein
shall not limit any provision of this Agreement. The use of the terms
"including" or "include" shall in all cases herein mean "including, without
limitation" or "include, without limitation," respectively.
(g) Assignment. This Agreement shall be binding upon and inure to the
----------
benefit of the parties hereto and their respective successors and assigns.
No assignment of any rights or obligations shall be made by any party
without the written consent of each other party.
(h) No Third Party Beneficiaries. This Agreement is solely for the
----------------------------
benefit of the parties hereto and, to the extent provided herein, their
respective affiliates, directors, officers, employees, agents, heirs and
representatives, and no provision of this Agreement shall be deemed to
confer upon other third parties any remedy, claim, liability,
reimbursement, cause of action or other right.
(i) Severability. If any provision of this Agreement shall be held
------------
invalid, illegal or unenforceable, the validity, legality or enforceability
of the other provisions hereof shall not be affected thereby, and there
shall be deemed substituted for the provision at issue a valid, legal and
enforceable provision as similar as possible to the provision at issue.
(j) Remedies Cumulative. The remedies provided in this Agreement
-------------------
shall be cumulative and shall not preclude the assertion or exercise of any
other rights or remedies available by law, in equity or otherwise.
(k) Entire Understanding. This Agreement, together with attached
--------------------
Schedule A, sets forth the entire agreement and understanding of the
----------
parties hereto with respect to the matters set forth herein and supersedes
any and all prior agreements, arrangements and understandings among the
parties; provided, however, that any agreements and understandings between
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the Company and Employee relating to employment and severance shall
continue in full force and effect until the occurrence of a Change in
Control.
(l) Conflicts With Existing Agreements. Subject to Section 10(k), in
----------------------------------
the event that any term or provision of this Agreement conflicts with or
differs from any term or provision of other existing agreement,
understanding or plan (the "Existing Agreements") between the Company and
-------------------
Employee or to which Employee is a participant, such term or provision of
this Agreement shall govern for all purposes and respects. Except as
expressly set forth herein, this Agreement does not constitute a waiver or
modification of any provision of any Existing Agreement. Except as
expressly modified hereby, the Existing Agreements shall continue in full
force and effect in accordance with the provisions thereof on the date
hereof.
(m) Attorneys' Fees and Other Costs. In the event a dispute arises
-------------------------------
between the parties hereto and suit is instituted, the prevailing party or
parties in such litigation shall be entitled to recover reasonable
attorneys' fees and other costs and expenses from the non-prevailing party
or parties, whether incurred at the trial level or in any appellate
proceeding. Unless Employee otherwise elects, expenses incurred by Employee
in connection with any
-13-
dispute described in this Section will be paid by the Company in advance of
the final disposition of such dispute within 20 days after presentation by
Employee of written documentation therefor reasonably satisfactory to the
Company if Employee furnishes the Company a written undertaking to repay
any amounts advanced if it is ultimately determined that Employee is not
entitled to attorneys' fees and other costs pursuant to this Section (which
written undertaking will provide that the Company shall be entitled to
collect its attorneys' fees and other out-of-pocket costs incurred in
connection with the enforcement of such undertaking).
(n) Notices. For the purpose of this Agreement, notices and all other
-------
communications provided for in this Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to
(i) the Company c/o Material Sciences Corporation at 2200 East Pratt
Boulevard, Elk Grove Village, Illinois 60007-5995 and (ii) Employee at the
address set forth on attached Schedule A, provided that all notices to the
----------
Company shall be directed to the attention of the Board of Directors of
Parent, with a copy to the Secretary of the Company, or to such other
address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change in address shall be
effective only upon receipt.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered as of the day and year first above written.
THE COMPANY:
-----------
[NAME OF SUBSIDIARY], (INCORPORATED) corporation
By: __________________________________________
Name: Gerald G. Nadig
Title: Chairman, President and Chief Executive Officer
EMPLOYEE:
--------
Name: __________________________________________
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SCHEDULE A
Change in Control Agreement
Employee Name: Edward A. Williams
Employee Position: Group Vice President and General Manager
Section 3(d)(ii)(A): [2.0x] (applicable multiple)
Section 3(d): [$20,000] (maximum outplacement expenses)
Section 6: [North America, including, without limitation, Canada,
the United States and Mexico] (territory)
Section 9: [2.0 years] (duration of Non-Compete Period)
S-1
SCHEDULE A
Change in Control Agreement
Employee Name: Ronald L. Millar
Employee Position: Group Vice President and General Manager
Section 3(d)(ii)(A): [2.0x] (applicable multiple)
Section 3(d): [$20,000] (maximum outplacement expenses)
Section 6: [North America, including, without limitation, Canada,
the United States and Mexico] (territory)
Section 9: [2.0 years] (duration of Non-Compete Period)
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SCHEDULE A
Change in Control Agreement
Employee Name: Douglas M. Rose
Employee Position: President
Section 3(d)(ii)(A): [2.0x] (applicable multiple)
Section 3(d): [$20,000] (maximum outplacement expenses)
Section 6: [North America, including, without limitation, Canada,
the United States and Mexico] (territory)
Section 9: [2.0 years] (duration of Non-Compete Period)
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