EXHIBIT 10.8
CHANGE IN CONTROL SEVERANCE AGREEMENT
Kevin E. Benson
Laidlaw Inc
Suite 400, 55 Shuman Blvd,
Naperville, 60563
Dear Kevin:
Laidlaw Inc. (the "Company") recognizes that, as is the case for most
companies, the possibility of a change in control exists. The Company wishes to
ensure that its senior executives are not distracted from performing their
duties in the event of a proposed or actual transaction involving a change in
control. Accordingly, the Company has determined that as an additional
inducement for you (the "Executive") to continue to remain in the employ of the
Company and to assure itself of both present and future continuity of
management, the Company agrees to provide the Executive with severance benefits
under the following circumstances pursuant to the following terms and conditions
(the "Agreement"):
1. Certain Defined Terms. In addition to terms defined elsewhere
herein, the following terms have the following meanings when used in
this Agreement with initial capital letters:
(a) "Base Pay" means the Executive's annual base salary rate as in
effect from time to time.
(b) "Board" means the Board of Directors of the Company.
(c) Cause" means that, prior to any termination pursuant to
Section 3(b), the Executive shall have:
(i) engaged in misconduct which is materially injurious
to the Company, monetarily or otherwise;
(ii) committed an act of fraud, embezzlement or theft in
connection with his duties or in the course of his
employment with the Company or any subsidiary;
(iii) intentionally damaged property of the Company or any
subsidiary;
(iv) committed wrongful disclosure of secret processes or
confidential information of the Company or any
Subsidiary; or
(v) engaged in any Competitive Activity;
and any such act shall have been demonstrably and
materially harmful to the Company. Notwithstanding
the foregoing, the Executive shall not be deemed to
have been terminated for "Cause" hereunder unless and
until there shall have been delivered to the
Executive a copy of a resolution duly adopted by the
affirmative vote of not less than a majority of the
Board then in office (excluding the Executive if he
is a Director) at a meeting of the Board called and
held for such purpose, after reasonable notice to the
Executive and an opportunity for the Executive,
together with the Executive's counsel (if the
Executive chooses to have counsel present at such
meeting), to be heard before the Board, finding that,
in the good faith opinion of the Board, the Executive
had committed an act constituting "Cause" as herein
defined and specifying the particulars thereof in
detail. Nothing herein will limit the right of the
Executive or his beneficiaries to contest the
validity or propriety of any such determination;
(d) "Change in Control" means the occurrence during the
Term of any of the following events:
(i) the acquisition by any individual, entity or group
(within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 50% or more of
the then-outstanding Voting Stock; provided, however,
that the following acquisitions shall not constitute
a Change in Control: (A) any acquisition directly
from the Company, (B) any acquisition by the Company,
(C) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company
or any Subsidiary or (D) any acquisition by any
Person pursuant to a transaction that complies with
clauses (A), (B) and (C) of subsection (iii) of this
Section 1(d);
(ii) individuals who, as of the date hereof, constitute
the Board (the "Incumbent Board") cease for any
reason (other than death or disability) 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 stockholders, was approved
by a vote of at least a majority of the directors
then comprising the Incumbent Board (either by a
specific vote or by approval of the proxy statement
of the Company in which such person is named as a
nominee for director, without objection to such
nomination) 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 (within the
meaning of Rule 14a-11 of the Exchange Act) with
respect to the election or removal of directors or
other actual or threatened
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solicitation of proxies or consents by or on behalf
of a Person other than the Board;
(iii) consummation of a reorganization, merger or
consolidation or sale or other disposition of all or
substantially all of the assets of the Company (a
"Business Combination"), unless, in each case,
immediately following such Business Combination, (A)
all or substantially all of the individuals and
entities who were the beneficial owners of Voting
Stock of the Company immediately prior to such
Business Combination beneficially own, directly or
indirectly, more than 50% of 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 of the
entity resulting from such Business Combination
(including, without limitation, an entity which as a
result of such transaction owns the Company or all or
substantially all of the Company's assets either
directly or through one or more subsidiaries) in
substantially the same proportions relative to each
other as their ownership, immediately prior to such
Business Combination, of the Voting Stock of the
Company, (B) no Person (excluding any entity
resulting from such Business Combination or any
employee benefit plan (or related trust) sponsored or
maintained by the Company, any Subsidiary or such
entity resulting from such Business Combination)
beneficially owns, directly or indirectly, 15% or
more of the then outstanding shares of common stock
of the entity resulting from such Business
Combination or the combined voting power of the then
outstanding voting securities of such entity except
to the extent such ownership existed prior to the
Business Combination and (C) at least a majority of
the members of the board of directors of the entity
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
(iv) approval by the stockholders of the Company of a
complete liquidation or dissolution of the Company.
(e) "Competitive Activity" means the Executive's
participation, without the written consent of the Board, as an
employee, officer, consultant or director of any business
enterprise if such enterprise engages in substantial and
direct competition with the Company and such enterprise's
sales of any product or service competitive with any product
or service of the Company amounted to 10% of such enterprise's
net sales for its most recently completed fiscal year and if
the Company's net sales of said product or service amounted to
10% of the Company's net sales for its most recently completed
fiscal year. "Competitive Activity" will not include (i) the
mere ownership of securities in any such enterprise and the
exercise of rights appurtenant thereto or (ii) participation
in the management of any such enterprise other than in
connection with the competitive operations of such enterprise.
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(f) "Employee Benefits" means the perquisites, benefits
and service credit for benefits as provided under any and all
employee retirement income and welfare benefit policies,
plans, programs or arrangements in which Executive is entitled
to participate, including, without limitation, any stock
option, performance share, performance unit, stock purchase,
stock appreciation, savings, pension, supplemental executive
retirement, or other retirement income or welfare benefit,
deferred compensation, incentive compensation, group or other
life, health, medical/hospital or other insurance (whether
funded by actual insurance or self-insured by the Company or a
Subsidiary), disability, salary continuation, expense
reimbursement and other employee benefit policies, plans,
programs or arrangements.
(g) "Exchange Act" means the Securities Exchange Act of
1934.
(h) "Incentive Pay" means an annual bonus, incentive or
other payment of compensation, in addition to Base Pay, made
or to be made in regard to services rendered in any year or
other period pursuant to any bonus, incentive, profit-sharing,
performance, discretionary pay or similar agreement, policy,
plan, program or arrangement (whether or not funded) of the
Company or a Subsidiary, or any successor thereto.
(i) "Retirement Plans" means the retirement income,
supplemental executive retirement, excess benefits and retiree
medical, life and similar benefit plans, programs or
arrangements of the Company in which the Executive is entitled
to participate.
(j) "Severance Period" means the period of time
commencing on the date of the first occurrence of a Change in
Control and continuing until the earlier of (i) the second
anniversary of the occurrence of the Change in Control, or
(ii) the Executive's death.
(k) "Subsidiary" means an entity in which the Company
directly or indirectly beneficially owns 50% or more of the
outstanding Voting Stock.
(l) "Term" means the period commencing as of the date
hereof and expiring as of the later of (i) the close of
business on August 31, 2003, or (ii) the expiration of the
Severance Period; provided, however, that (A) commencing on
September 1, 2004 and each September 1 thereafter, the term of
this Agreement will automatically be extended for an
additional year unless, not later than June 30 of the
immediately preceding year, the Company or the Executive shall
have given notice that it or the Executive, as the case may
be, does not wish to have the Term extended and (B) subject to
the last sentence of Section 9, if, prior to a Change in
Control, the Executive ceases for any reason to be an employee
of the Company and any Subsidiary, thereupon without further
action the Term shall be deemed to have expired and this
Agreement will immediately terminate and be of no further
effect. For purposes of this Section 1(l), the Executive shall
not be deemed to have ceased to be an employee of the Company
and any Subsidiary by
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reason of the transfer of Executive's employment between the
Company and any Subsidiary, or among any Subsidiaries.
(m) "Termination Date" means the date on which the
Executive's employment is terminated (the effective date of
which shall be the date of termination, or such other date
that may be specified by the Executive if the termination is
pursuant to Section 3(b)).
(n) "Voting Stock" means securities entitled to vote
generally in the election of directors.
2. Operation of Agreement. This Agreement will be effective and
binding immediately upon its execution, but, anything in this Agreement
to the contrary notwithstanding, except as provided in Sections 8 and
9, this Agreement will not be operative unless and until a Change in
Control occurs. Upon the occurrence of a Change in Control at any time
during the Term, without further action, this Agreement shall become
immediately operative.
3. Termination Following a Change in Control, (a) In the event of
the occurrence of a Change in Control, the Executive's employment may
be terminated by the Company or a Subsidiary during the Severance
Period and the Executive shall be entitled to the benefits provided by
Section 4 unless such termination is the result of the occurrence of
one or more of the following events:
(i) The Executive's death;
(ii) If the Executive becomes permanently disabled within
the meaning of, and begins actually to receive
disability benefits pursuant to, the long-term
disability plan in effect for, or applicable to,
Executive immediately prior to the Change in Control;
or
(iii) Cause.
If, during the Severance Period, the Executive's employment is
terminated by the Company or any Subsidiary other than pursuant to Section
3(a)(i), 3(a)(ii) or 3(a)(iii), the Executive will be entitled to the benefits
provided by Section 4 hereof.
(b) In the event of the occurrence of a Change in
Control, the Executive may terminate employment with the
Company and any Subsidiary during the Severance Period with
the right to severance compensation as provided in Section 4
upon the occurrence of one or more of the following events
(regardless of whether any other reason, other than Cause as
hereinabove provided, for such termination exists or has
occurred, including, without limitation, other employment):
(i) Failure to elect or reelect or otherwise to maintain
the Executive in the office or the position, or a
substantially equivalent office or position, of or
with the Company and/or a Subsidiary (or any
successor thereto by
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operation of law of or otherwise), as the case may
be, which the Executive held immediately prior to a
Change in Control, or the removal of the Executive as
a director of the Company and/or a Subsidiary (or any
successor thereto) if the Executive shall have been a
director of the Company and/or a Subsidiary
immediately prior to the Change in Control;
(ii) (A) A significant adverse change in the nature or
scope of the authorities, powers, functions,
responsibilities or duties attached to the position
with the Company and any Subsidiary which the
Executive held immediately prior to the Change in
Control, (B) a reduction in the aggregate of the
Executive's Base Pay received from the Company and
any Subsidiary or the Executive's Incentive Pay
opportunity from the Company or its Subsidiaries, or
(C) the termination or denial of the Executive's
rights to Employee Benefits or a reduction in the
scope or value thereof to a level that is
substantially lower in the aggregate from the level
in effect at the time of the Change in Control, any
of which is not remedied by the Company within 10
calendar days after receipt by the Company of written
notice from the Executive of such change, reduction,
denial or termination, as the case may be;
(iii) The liquidation, dissolution, merger, consolidation
or reorganization of the Company or transfer of all
or substantially all of its business and/or assets,
unless the successor or successors (by liquidation,
merger, consolidation, reorganization, transfer or
otherwise) to which all or substantially all of its
business and/or assets have been transferred (by
operation of law or otherwise) assumed all duties and
obligations of the Company under this Agreement
pursuant to Section 12(a);
(iv) The Company relocates its principal executive offices
(if such offices are the principal location of
Executive's work), or requires the Executive to have
his principal location of work changed, to any
location that, in either case, is in excess of 50
miles from the location thereof immediately prior to
the Change in Control, or requires the Executive to
travel away from his office in the course of
discharging his responsibilities or duties hereunder
at least 20% more (in terms of aggregate days in any
calendar year or in any calendar quarter when
annualized for purposes of comparison to any prior
year) than was required of Executive in any of the
three full years immediately prior to the Change in
Control without, in either case, his prior written
consent; or
(v) Without limiting the generality or effect of the
foregoing, any material breach of this Agreement by
the Company or any successor thereto which is not
remedied by the Company within 10 calendar days after
receipt by the Company of written notice from the
Executive of such breach.
(c) Except as otherwise provided herein, a termination by
the Company pursuant to Section 3(a) or by the Executive
pursuant to Section 3(b) will not
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affect any rights that the Executive may have pursuant to any
agreement, policy, plan, program or arrangement of the Company
or Subsidiary providing Employee Benefits, which rights shall
be governed by the terms thereof, except for any rights to
severance compensation to which Executive may be entitled upon
termination of employment pursuant to Paragraph 6(a)(iii) of
the Executive's employment agreement, dated August , 2002,
which rights shall, during the Severance Period, be superseded
by this Agreement.
4. Severance Compensation. (a) If, following the occurrence of a
Change in Control, the Company or Subsidiary terminates the Executive's
employment during the Severance Period other than pursuant to Section
3(a)(i), 3(a)(ii) or 3(a)(iii), or if the Executive terminates his
employment pursuant to Section 3(b), the Company shall pay to the
Executive the amounts described in Annex A within five business days
after the Termination Date and shall provide to the Executive the
benefits described on Annex A for the periods described therein.
(b) Without limiting the rights of the Executive at law
or in equity, in the event it is determined that the Company fails to make any
payment or provide any benefit required to be made or provided hereunder on a
timely basis, the Company shall pay interest on the amount or value thereof at
an annualized rate of interest equal to the so-called composite "prime rate" as
quoted from time to time during the relevant period in the The Wall Street
Journal, plus 4%. Any change in such prime rate shall be effective on and as of
the date of such change.
(c) Notwithstanding any provision of this Agreement to
the contrary, the parties' respective rights and obligations under this Section
4 and under Sections 5, 7, 8 and the last sentence of Section 9 will survive any
termination or expiration of this Agreement or the termination of the
Executive's employment following a Change in Control for any reason whatsoever.
(d) Notwithstanding any provision to the contrary in any
applicable plan, program or agreement, upon the occurrence of a Change in
Control, all equity incentive awards held by the Executive shall become fully
vested and all stock options held by the Executive shall become fully
exercisable.
5. Limitation on Payments and Benefits. Notwithstanding any
provision of this Agreement to the contrary, if any amount or benefit
to be paid or provided under this Agreement would be an "Excess
Parachute Payment," within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), or any successor
provision thereto, but for the application of this sentence, then the
payments and benefits to be paid or provided under this Agreement shall
be reduced to the minimum extent necessary (but in no event to less
than zero) so that no portion of any such payment or benefit, as so
reduced, constitutes an Excess Parachute Payment; provided, however,
that the foregoing reduction shall be made only if and to the extent
that such reduction would result in an increase in the aggregate
payment and benefits to be provided, determined on an after-tax basis
(taking into account the excise tax imposed pursuant to Section 4999 of
the Code, or any successor provision thereto, any tax
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imposed by any comparable provision of state law, and any applicable
federal, state and local income taxes). The determination of whether
any reduction in such payments or benefits to be provided under this
Agreement or otherwise is required pursuant to the preceding sentence
shall be made at the expense of the Company, if requested by the
Executive or the Company, by the Company's independent accountants. The
fact that the Executive's right to payments or benefits may be reduced
by reason of the limitations contained in this Section 5 shall not of
itself limit or otherwise affect any other rights of the Executive
other than pursuant to this Agreement. In the event that any payment or
benefit intended to be provided under this Agreement or otherwise is
required to be reduced pursuant to this Section 5, the Executive shall
be entitled to designate the payments and/or benefits to be so reduced
in order to give effect to this Section 5. The Company shall provide
the Executive with all information reasonably requested by the
Executive to permit the Executive to make such designation. In the
event that the Executive fails to make such designation within 10
business days of the Termination Date, the Company may effect such
reduction in any manner it deems appropriate.
6. No Mitigation Obligation. The Company hereby acknowledges that
it will be difficult and may be impossible for the Executive to find
reasonably comparable employment following the Termination Date.
Accordingly, the payment of the severance compensation by the Company
to the Executive in accordance with the terms of this Agreement is
hereby acknowledged by the Company to be reasonable, and the Executive
will not be required to mitigate the amount of any payment provided for
in this Agreement by seeking other employment or otherwise, nor will
any profits, income, earnings or other benefits from any source
whatsoever create any mitigation, offset, reduction or any other
obligation on the part of the Executive hereunder or otherwise, except
as expressly provided in the last sentence of Section 2 set forth on
Annex A.
7. Legal Fees and Expenses. It is the intent of the Company that
the Executive not be required to incur legal fees and the related
expenses associated with the interpretation, enforcement or defense of
Executive's rights under this Agreement by litigation or otherwise
because the cost and expense thereof would substantially detract from
the benefits intended to be extended to the Executive hereunder.
Accordingly, if the Executive reasonably believes that the Company has
failed to comply with any of its obligations under this Agreement or in
the event that the Company or any other person takes or threatens to
take any action to declare this Agreement void or unenforceable, or
institutes any litigation or other action or proceeding designed to
deny, or to recover from, the Executive the benefits provided or
intended to be provided to the Executive hereunder, subject to the
other provisions of this Section 7, the Company irrevocably authorizes
the Executive from time to time to retain counsel of Executive's
choice, at the expense of the Company to the extent and as hereafter
provided, to advise and represent the Executive in connection with any
such interpretation, enforcement or defense, including, without
limitation, the initiation or defense of any litigation or other legal
action, whether by or against the Company or any director, officer,
stockholder or other person affiliated with the Company, in any
jurisdiction. Notwithstanding any existing or prior attorney-client
relationship between the Company and such counsel, the Company
irrevocably consents to the Executive's entering into an
attorney-client relationship with such counsel, and in that connection
the Company and the Executive agree that a
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confidential relationship shall exist between the Executive and such
counsel. The Company will pay and be solely responsible for any and all
attorneys' and related fees and expenses incurred by the Executive in
connection with any of the foregoing, except to the extent that the
Executive fails to prevail on a material claim in any such proceeding
described in this Section 7.
8. Confidentiality. The Executive acknowledges that in the course
of his employment by the Company, he will or may have access to and
become informed of confidential or proprietary information (as defined
in this Section 8) of the Company. The Executive hereby covenants and
agrees that he will not, without the prior written consent of the
Company, during the Term or thereafter disclose to any person not
employed by the Company, or use in connection with engaging in
competition with the Company, any confidential or proprietary
information of the Company. For purposes of this Agreement, the term
"confidential or proprietary information" will include all information
of any nature and in any form that is owned by the Company and that is
not publicly available (other than by Executive's breach of this
Section 8) or generally known to persons engaged in businesses similar
or related to those of the Company. Confidential or proprietary
information will include, without limitation, the Company's financial
matters, customers, employees, industry contracts, strategic business
plans, product development (or other proprietary product data),
marketing plans, and all other secrets and all other information of a
confidential or proprietary nature. For purposes of the preceding two
sentences, the term "Company" will also include any Subsidiary
(collectively, the "Restricted Group"). The foregoing obligations
imposed by this Section 8 will not apply (i) during the Term, in the
course of the business of and for the benefit of the Company, (ii) if
such confidential or proprietary information will have become, through
no fault of the Executive, generally known to the public or (iii) if
the Executive is required by law to make disclosure (after giving the
Company notice and an opportunity to contest such requirement).
9. Employment Rights. Nothing expressed or implied in this
Agreement will create any right or duty on the part of the Company or
the Executive to have the Executive remain in the employment of the
Company or any Subsidiary prior to or following any Change in Control.
Any termination of employment of the Executive or the removal of the
Executive from the office or position in the Company or any Subsidiary
that occurs (i) not more than 90 days prior to the date on which a
Change in Control occurs, and (ii) following the commencement of any
discussion with a third person that ultimately results in a Change in
Control, shall be deemed to be a termination or removal of the
Executive after a Change in Control for purposes of this Agreement.
10. Post-termination Assistance. Executive shall provide such
information and assistance to the Company as the Company may reasonably
request, upon reasonable notice, in connection with any litigation in
which it or any of its affiliates is or may become a party. The Company
shall reimburse the Executive for any expenses, including travel
expenses, incurred by the Executive in connection with providing such
information and assistance.
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11. Withholding of Taxes. The Company may withhold from any
amounts payable under this Agreement all federal, state, city or other
taxes as the Company is required to withhold pursuant to any applicable
law, regulation or ruling.
12. Successors and Binding Agreement. (a) The Company will require
any successor (whether direct or indirect, by purchase, merger,
consolidation, reorganization or otherwise) to all or substantially all
of the business or assets of the Company, by agreement in form and
substance reasonably satisfactory to the Executive, expressly to assume
and agree to perform this Agreement in the same manner and to the same
extent the Company would be required to perform if no such succession
had taken place. This Agreement will be binding upon and inure to the
benefit of the Company and any successor to the Company, including,
without limitation, any persons acquiring directly or indirectly all or
substantially all of the business or assets of the Company whether by
purchase, merger, consolidation, reorganization or otherwise (and such
successor shall thereafter be deemed the "Company" for the purposes of
this Agreement), but will not otherwise be assignable, transferable or
delegable by the Company.
(b) This Agreement will inure to the benefit of and be
enforceable by the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and legatees.
(c) This Agreement is personal in nature and neither of
the parties hereto shall, without the consent of the other, assign, transfer or
delegate this Agreement or any rights or obligations hereunder except as
expressly provided in Sections 12(a) and 12(b). Without limiting the generality
or effect of the foregoing, the Executive's right to receive payments hereunder
will not be assignable, transferable or delegable, whether by pledge, creation
of a security interest, or otherwise, other than by a transfer by Executive's
will or by the laws of descent and distribution and, in the event of any
attempted assignment or transfer contrary to this Section 12(c), the Company
shall have no liability to pay any amount so attempted to be assigned,
transferred or delegated.
13. Notices. For all purposes of this Agreement, all
communications, including, without limitation, notices, consents,
requests or approvals, required or permitted to be given hereunder will
be in writing and will be deemed to have been duly given when hand
delivered or dispatched by electronic facsimile transmission (with
receipt thereof orally confirmed), or five business days after having
been mailed by United States registered or certified mail, return
receipt requested, postage prepaid, or three business days after having
been sent by a nationally recognized overnight courier service (such as
Federal Express or UPS) addressed to the Company (to the attention of
the Secretary of the Company) at its principal executive office and to
the Executive at his principal residence, or to such other address as
any party may have furnished to the other in writing and in accordance
herewith, except that notices of changes of address shall be effective
only upon receipt.
14. Governing Law. The validity, interpretation, construction and
performance of this Agreement will be governed by and construed in
accordance with the substantive
10
laws of the State of Delaware, without giving effect to the principles
of conflict of laws of such State.
15. Validity. If any provision of this Agreement or the
application of any provision hereof to any person or circumstances is
held invalid, unenforceable or otherwise illegal, the remainder of this
Agreement and the application of such provision to any other person or
circumstances will not be affected, and the provision so held to be
invalid, unenforceable or otherwise illegal will be reformed to the
extent (and only to the extent) necessary to make it enforceable, valid
or legal.
16. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and the Company. No waiver
by either party hereto at any time of any breach by the other party
hereto or compliance with any condition or provision of this Agreement
to be performed by such other party will be deemed a waiver of similar
or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise,
expressed or implied with respect to the subject matter hereof have
been made by either party which are not set forth expressly in this
Agreement. References to Sections are to references to Sections of this
Agreement.
17. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all
of which together will constitute one and the same agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
LAIDLAW INC.
/s/ Peter N. T. Widdrington
----------------------------------------
By: Peter N. T. Widdrington
Its: Chairman
/s/ Kevin E. Benson
----------------------------------------
By: Kevin E. Benson
Sept 18, 2002
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Annex A
1. The Company shall pay to the Executive a lump sum payment in an amount
equal to two (2) times the sum of (A) Base Pay (at the highest rate in
effect for any period prior to the Termination Date), plus (B)
Incentive Pay (in an amount equal to not less than the higher of (x)
the highest aggregate Incentive Pay earned in any fiscal year after the
Change in Control or in any of the three fiscal years immediately
preceding the year in which the Change in Control occurred or (y) the
plan target for which the year in which the Change in Control
occurred).
2. The Company shall, for a period of twenty four (24) months following
the Termination Date (the "Continuation Period"), arrange to provide
the Executive with Employee Benefits that are welfare benefits (but not
stock option, stock purchase, stock appreciation or similar
compensatory benefits) substantially similar to those that the
Executive was receiving or entitled to receive immediately prior to the
Termination Date (or, if greater, immediately prior to the reduction,
termination or denial described in Section 3(b)(ii)), except that the
level of any such Employee Benefits to be provided to the Executive may
be reduced in the event of a corresponding reduction generally
applicable to all recipients of or participants in such Employee
Benefits, which Continuation Period will be considered service with the
Company for the purpose of determining service credits and benefits due
and payable to the Executive under the Company's retirement income,
supplemental executive retirement and other benefit plans of the
Company applicable to the Executive, his dependents or his
beneficiaries immediately prior to the Termination Date. Without
otherwise limiting the purpose or effect of Section 5, Employee
Benefits otherwise receivable by the Executive pursuant to this Section
2 will be reduced to the extent comparable welfare benefits are
actually received by the Executive from another employer during the
Continuation Period following the Executive's Termination Date, and any
such benefits actually received by the Executive shall be reported by
the Executive to the Company.
3. In addition to the retirement income, supplemental executive
retirement, and other benefits to which Executive is entitled under the
Retirement Plans, a lump sum payment in an amount equal to the
actuarial equivalent of the excess of (x) the retirement pension and
the medical, life and other benefits that would be payable to the
Executive under the Retirement Plans if Executive continued to be
employed through the Continuation Period given the Executive's Base Pay
(as determined in Section 1) (without regard to any amendment to the
Retirement Plans made subsequent to a Change in Control which adversely
affects in any manner the computation of retirement or welfare benefits
thereunder), over (y) the retirement pension and the medical, life and
other benefits that the Executive is entitled to receive (either
immediately or on a deferred basis) under the Retirement Plans. For
purposes of this Section, "actuarial equivalent" shall be determined
using the actuarial assumptions mandated under Section 417(e)(3) of the
Code in effect for the month second preceding the date of payment and
the Continuation Period will be considered service with the Company for
the purpose of determining service credits and benefits due and payable
to the Executive under the Company's retirement pension and medical,
life and other benefit plans of the Company
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applicable to the Executive, his dependents or his beneficiaries
immediately prior to the Termination Date.
4. Reasonable outplacement services by a firm selected by the Executive,
at the expense of the Company, in an amount up to $25,000.
5. If the Termination Date occurs on or prior to the first anniversary of
the date hereof, the Company shall reimburse the Executive for
reasonable and actual relocation expenses to Canada (or a destination
of the Executive's choice of equal or lesser cost), subject to the
Company's relocation policy and guidelines as in effect from time to
time.
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