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AGREEMENT
This AGREEMENT ("Agreement"), made as of the 24th day
of June, 1993, between SOCIETY CORPORATION, an Ohio corporation ("Society"),
and ________________ (the "Executive"),
W I T N E S S E T H:
WHEREAS, Society has determined that, in light of the
importance of the Executive's continued services to the continuity of
management of Society and its Subsidiaries (as defined in Section 1 below), it
is in Society's best interest to encourage the Executive's continued attention
and dedication to the Executive's duties in the potentially disruptive
circumstances of a possible Change of Control (as defined in Section 1 below)
of Society;
NOW, THEREFORE, Society and the Executive agree as follows:
1. DEFINITIONS.
(a) ACCOUNTING FIRM. The term "Accounting Firm" means
the independent auditors of Society for the fiscal year preceding the
year in which the Change of Control occurred and such firm's successor or
successors; provided, however, if such firm is unable or unwilling to serve and
perform in the capacity contemplated by this
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Agreement, Society shall select another national accounting firm of recognized
standing to serve and perform in that capacity under this Agreement, except
that such other accounting firm shall not be the then independent auditors for
Society or any of its affiliates (as defined in Rule 12b-2 promulgated under
the Securities Exchange Act of 1934, as amended).
(b) AGGREGATE INCENTIVE COMPENSATION AWARD. The term
"Aggregate Incentive Compensation Award" with respect to the Executive for
1993 and any later year shall mean the aggregate incentive compensation awards
(whether paid in cash, deferred, or a combination of both) payable to the
Executive under both the Society Management Incentive Compensation Plan and the
Society Long Term Incentive Compensation Plan for that year. For these
purposes, an incentive compensation award payable to the Executive under the
Society Long Term Incentive Compensation Plan with respect to any three-year
period will be deemed to be "for" the last year of that three-year period.
Thus, for example, the incentive compensation award payable to the Executive
under the Society Long Term Incentive Compensation Plan with respect to the
three year period comprised of 1993, 1994, and 1995 will be deemed to be "for"
1995 (without regard to the time of payment), the entire award under that plan
for that period will be part of the Aggregate Incentive Compensation Award for
1995, and no part of the award under
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that plan for that period will be part of the Aggregate Incentive Compensation
Award for any year other than 1995. If no incentive compensation award is
payable to the Executive for 1993 or any later year under either the Society
Management Incentive Compensation Plan or the Society Long Term Incentive
Compensation Plan, the Aggregate Incentive Compensation Award payable to the
Executive for that year will be $- 0-. For purposes of this Agreement, the
Aggregate Incentive Compensation Awards payable to the Executive for each of
the years 1992, 1991, 1990, 1989, and 1988 shall be deemed to be
______________________.
(c) AVERAGE ANNUAL INCENTIVE COMPENSATION. The term
"Average Annual Incentive Compensation" shall mean the greater of:
(i) the average of the three highest Aggregate
Incentive Compensation Awards payable to the Executive for any of the
years during the five-year period ended on the December 31 immediately
preceding the Termination Date, or
(ii) the average of the three highest Aggregate
Incentive Compensation Awards payable to the Executive for any of the
years during the five-year period ended on the December 31 immediately
preceding the first Change of Control occurring after the execution of
this Agreement.
As an illustration, if the Termination Date were to occur during 1993, the term
Average Annual Incentive Compensation would mean $__________, arrived at by
adding together $__________ (for 1992), $__________ (for 1991), and $__________
(for 1990) (there being no other year during the
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relevant five year period in which the Aggregate Incentive Compensation Award
was higher than $__________) and dividing the sum $__________) by three.
(d) CAUSE. The employment of the Executive by Society
or any of its Subsidiaries shall have been terminated for "Cause" if, after
a Change of Control and prior to the termination of employment, any of
the following has occurred:
(i) the Executive shall have been convicted of a felony,
(ii) the Executive commits an act or series of acts of
dishonesty in the course of the Executive's employment which are materially
inimical to the best interests of Society or a Subsidiary and which
constitutes the commission of a felony, all as determined by the vote of
three fourths of all of the members of the Board of Directors of Society
(other than the Executive, if the Executive is a Director of Society) which
determination is confirmed by a panel of three arbitrators appointed and
acting in accordance with the rules of the American Arbitration Association
for the purpose of reviewing that determination, or
(iii) after being notified in writing by the Board of
Directors of Society to cease the Competitive Activity in question, the
Executive shall intentionally continue to engage in such Competitive
Activity while the Executive remains in the employ of Society or a
Subsidiary.
(e) CHANGE OF CONTROL. A "Change of Control" shall
be deemed to have occurred if at any time or from time to time after the date
of this Agreement:
(i) there is a report filed on Schedule 13D or Schedule 14D-1
(or any successor schedule, form, or report), each as adopted under the
Securities Exchange Act of 1934, as amended, disclos-
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ing the acquisition of 25% or more of the voting stock of Society in a
transaction or series of transactions by any person (as the term "person"
is used in Section 13(d) and Section 14(d)(2) of the Securities Exchange
Act of 1934, as amended),
(ii) during any period of 24 consecutive calendar months,
individuals who at the beginning of such period constitute the directors
of Society cease for any reason to constitute at least a majority thereof
unless the election of each new director of Society was approved or
recommended by the vote of at least two-thirds of the directors of Society
then still in offfice who were directors of Society at the beginning of
any such period,
(iii) Society merges with or into or consolidates with another
corporation and, after giving effect to such merger or consolidation, less
than sixty percent (60%) of the then outstanding voting securities of the
surviving or resulting corporation represent or were issued in exchange
for voting securities of Society outstanding immediately prior to such
merger or consolidation,
(iv) there is a sale, lease, exchange, or other transfer (in one
transaction or a series of related transactions) of all or substantially
all the assets of Society, or
(v) the shareholders of Society shall approve any plan or
proposal for the liquidation or dissolution of Society.
(f) COMPETITIVE ACTIVITY. The Executive shall be deemed to
have engaged in "Competitive Activity" if the Executive:
(i) engages in any business or business activity in which
Society or any of its Subsidiaries engages, including, without limitation,
engaging in any business activity in the banking or financial services
industry (other than as a director, officer, or employee of Society or
any of its Subsidiaries), or
(ii) serves as a director, officer, or employee of any bank,
bank holding company,
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savings and loan association, building and loan association, savings and
loan holding company, insurance company, investment banking or securities
company, or other financial services company other than Society or any of
its Subsidiaries (each of the foregoing being hereinafter referred to as a
"Financial Services Company"), or renders services of a consultative or
advisory nature or otherwise to any such Financial Services Company;
provided, however, this clause (ii) shall not prohibit or restrict the
Executive from serving in any such capacity with the consent of Society.
(g) Day. A "day" as used in this Agreement means a
calendar day unless business day is specifically referred to.
(h) FULL-TIME EMPLOYMENT WITH AN UNAFFILIATED EMPLOYER.
"Full-time Employment with an Unaffiliated Employer" means full-time
(more than 30 hours per week) employment at either a base salary, hourly rate,
partnership interest, or other form of participation resulting in compensation
to the Executive, but does not include employment by (i) a corporation or
other firm organized or formed by the Executive as a new business (including,
without limitation, a consulting business) after the Termination Date, or
(ii) a corporation or other firm the majority of the equity interests of which
were acquired by the Executive and/or the Executive's immediate family members
after the Termination Date.
(i) NON-WINDOW VOLUNTARY RESIGNATION. A "Non-Window Voluntary
Resignation" shall have occurred if the Executive, on any day during the
two-year period
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beginning on the date of a Change of Control other than any day that falls
within the Window Period, terminates the Executive's employment with Society
and all its Subsidiaries by voluntarily resigning, unless during that two year
period and prior to the Executive's voluntary resignation, there has occurred a
Reduction of Base Salary or a Mandatory Relocation; provided further, in the
event that there has been more than one Change of Control, there shall not be a
Non-Window Voluntary Resignation if the Termination Date occurs during the
Window Period with respect to any of the Changes of Control.
(j) PERMITTED EMPLOYMENT TERMINATION. A "Permitted Employment
Termination" shall have occurred if, after a Change of Control, the employment
of the Executive by Society or any of its Subsidiaries is terminated:
(i) by Society or its Subsidiary, for Cause,
(ii) by Society, its Subsidiary, or the Executive by reason of
disability of the Executive, as a result of accidental bodily injury or
sickness for a period of 180 consecutive days, but only if the Executive
begins to receive payments under the Society Long Term Disability Plan, or
(iii) by the death of the Executive.
(k) REDUCTION OF BASE SALARY OR A MANDATORY RELOCATION.
A "Reduction of Base Salary or a Mandatory Relocation" shall have occurred if
either of the following has occurred:
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(i) after a Change of Control, the base salary of the
Executive is at any time reduced, or
(ii) after a Change of Control, the Executive is required to
relocate the Executive's principal place of employment for Society or its
Subsidiary more than 35 miles from where the Executive was located prior
to the Change of Control.
(l) SOCIETY LONG TERM DISABILITY PLAN. The term "Society
Long Term Disability Plan" means and includes the Society Corporation Long
Term Disability Plan (January 1, 1993 Restatement) as from time to time
amended, restated, or otherwise modified, including any long term disability
plan hereafter succeeding, replacing, or being substituted for such plan.
(m) SOCIETY LONG TERM INCENTIVE COMPENSATION PLAN. The term
"Society Long Term Incentive Compensation Plan" means and includes the
Society Corporation Long Term Incentive Compensation Plan (January 1, 1993
Restatement) as from time to time amended, restated, or otherwise modified,
including any incentive compensation plan hereafter succeeding, replacing, or
being substituted for such plan.
(n) SOCIETY MANAGEMENT INCENTIVE COMPENSATION PLAN. The term
"Society Management Incentive Compensation Plan" means and includes the
Society Corporation Management Incentive Compensation Plan (January 1, 1993
Restatement) as from time to time amended, restated, or otherwise modified,
including any incentive compensation
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plan hereafter succeeding, replacing, or being substituted for such plan.
(o) SOCIETY QUALIFIED PENSION PLAN. The term "Society
Qualified Pension Plan" means the Retirement Plan for Employees of Society
Corporation and Subsidiaries (January 1, 1993 Restatement) as from time
to time amended, restated, or otherwise modified, including any plan hereafter
succeeding, replacing, or being substituted for that plan.
(p) SOCIETY RETIREMENT PLANS. The term "Society Retirement
Plans" means and includes the Society Qualified Pension Plan, the Society
Corporation Excess Benefit Retirement Plan (April 26, 1990 Amendment and
Restatement), and the Amended and Restated Society Corporation Supplemental
Retirement Plan (January 1, 1993 Restatement), in all cases, as from time to
time amended, restated, or otherwise modified, including any plan hereafter
succeeding, replacing, or being substituted for any such plan, and all
retirement plans of any nature (including, without limitation, retirement
benefits or rights provided under employment contracts or agreements with the
Executive or provided in resolutions adopted by the Board of Directors of
Society or any of its Subsidiaries) maintained by Society or any of its
Subsidiaries in which the Executive was participating prior to the Termination
Date.
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(q) SOCIETY SAVINGS PLANS. The term "Society Savings
Plans" means and includes the Society Corporation Employee Stock Purchase
and Savings Plan (December 30, 1990 Restatement) and the Amended and
Restated Society Corporation Supplemental Stock Purchase and Savings Plan, in
both cases, as from time to time amended, restated, or otherwise modified,
including any plan hereafter succeeding, replacing, or being substituted for
either such plan, and all salary reduction, savings, profit-sharing, or stock
bonus plans (including, without limitation, all plans involving employer
matching contributions, whether or not constituting a qualified cash or
deferred arrangement under Section 401(k) of the Internal Revenue Code),
maintained by Society or any of its Subsidiaries in which the Executive was
participating prior to the Termination Date.
(r) SOCIETY SUPPLEMENTAL RETIREMENT PLAN. The term "Society
Supplemental Retirement Plan" means and includes the Amended and Restated
Society Corporation Supplemental Retirement Plan (January 1, 1993 Restatement)
as from time to time amended, restated, or otherwise modified, including
any supplemental retirement plan hereafter succeeding, replacing, or being
substituted for such plan.
(s) SUBSIDIARY. A "Subsidiary" means any corporation, bank,
partnership, or other entity a majority
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of the voting control of which is directly or indirectly owned or controlled at
the time in question by Society.
(t) TERMINATION DATE. The term "Termination Date" means
the date on which the Executive's employment with Society and its Subsidiaries
terminates.
(u) WINDOW PERIOD. The term "Window Period," with respect to
any Change of Control, means the three-month period beginning on the date
that falls on same day of the month as the date of the Change of Control
in the fifteenth month after the month in which the Change of Control occurs.
2. COMPENSATION CONTINUATION, SEVERANCE, AND OTHER BENEFITS
IF EMPLOYMENT IS TERMINATED WITHIN TWO YEARS OF A CHANGE OF CONTROL.
If, within two years following the occurrence of a Change of Control, the
Executive's employment with Society and its Subsidiaries is terminated for any
reason (whether by Society or its Subsidiary or by resignation of the
Executive), other than a Non-Window Voluntary Resignation or a Permitted
Employment Termination, this Section 2 shall become applicable and Society,
either directly or through one or more of its Subsidiaries, shall pay to the
Executive the amounts specified in Paragraphs (a) and (b) of this Section 2 on
the dates indicated therein and shall provide to the Executive the benefits
specified in Paragraphs (c) and (d) of this Section 2 for the period specified
therein:
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(a) Society or a Subsidiary shall pay to the
Executive monthly compensation continuation payments for 24 months
(commencing on the fifteenth day of the month following the month in
which the Termination Date occurs and continuing on the fifteenth day
of each of the next succeeding 23 months). The amount of each such
monthly payment shall be the sum of (i) one month's base salary of the
Executive (at the highest rate in effect at any time from one year
prior to the Change of Control to the Termination Date), plus (ii)
one-twelfth (1/12) of the Executive's Average Annual Incentive
Compensation.
(b) Society or a Subsidiary shall pay to the
Executive, within 10 business days after the Termination Date, a lump
sum severance payment in an amount equal to six times the amount of
the monthly payment calculated under Paragraph (a), above.
(c) Society or a Subsidiary shall arrange to provide
the Executive, for 24 months following the Termination Date, with
medical benefits (including, if applicable, dental), long term
disability benefits, and group term life insurance benefits, in all
cases at substantially the same level of coverage, and subject to the
same (by dollar amount) employee contribution requirement (if any), as
those which the Executive was
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receiving or entitled to receive as an officer of Society or its
Subsidiary on the Termination Date.
(d) For 24 months following the Termination Date, Society
shall cause the Executive to continue to be covered by and to
participate in all Society Retirement Plans and Society Savings Plans
that the Executive was entitled to be covered by and participating in
as an officer of Society or its Subsidiary on the Termination Date,
except where such coverage or participation is "impermissible," as
defined below. For purposes of determining the benefits, if any, to
be provided to the Executive under this Paragraph (d): (i) the 24
month period following the Termination Date that the Executive is
entitled to continued coverage by and participation in such plans
shall be included in determining the Executive's years of service;
(ii) the Executive's base salary during such 24 month period shall be
deemed to be the amount the Executive receives under clause (i) of
Paragraph (a) of this Section 2 and that portion of the amount
payable under clause (ii) of Paragraph (a) of this Section 2 that is
attributable to incentive compensation paid under the Society
Management Incentive Compensation Plan shall be deemed to be
incentive compensation paid under the Society Management Incentive
Compensation Plan; and (iii) if (A) the
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Executive is not already fully vested under the Society Supplemental
Retirement Plan and (B) the Executive would be fully vested under the
Society Qualified Pension Plan if the Executive's employment with
Society continued through the end of the 24 month period, the
Executive will be treated as immediately vested under the Society
Supplemental Retirement Plan without regard to age or years of
service. For purposes of this Paragraph (d), the Executive's
continued coverage by and participation in any of the Society
Retirement Plans and Society Savings Plans will be deemed to be
"impermissible" if such a continuation would violate the provisions of
such plan, would cause such plan to fail to be qualified under Section
401(a) of the Internal Revenue Code, or would be unlawful. If, during
the 24 month period referred to in this Paragraph (d), Society
determines in good faith that continuing, after the Termination Date,
the Executive's coverage by and participation in any of the Society
Savings Plans is impermissible, Society shall not be required to cause
the Executive to continue to be covered by and to participate in such
affected plan or plans, but in lieu thereof, Society shall, within 45
days after the end of such 24 month period, pay to the Executive a
lump-sum amount, with respect to each such plan in which the
Executive's coverage or participation
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ceased for any time during such 24 month period, equal to the aggregate
maximum amount of the employer matching contributions which would have
been, but were not, credited to the Executive's account if the Executive
had, at all times during such 24 month period, continued to be covered by
and participate in that Society Savings Plan to the maximum extent
permitted. If, during the 24 month period referred to in this Paragraph
(d), Society determines in good faith that continuing, after the
Termination Date, the Executive's coverage by and participation in any of
the Society Retirement Plans is impermissible, Society shall not be
required to cause the Executive to continue to be covered by and to
participate in such affected plan or plans, but in lieu thereof, Society
shall provide to the Executive a special supplemental retirement benefit in
an amount equal to the difference between the amount of the benefit under
that Society Retirement Plan that the Executive would have received if the
Executive had, at all times during such 24 month period, continued to be
covered by and participate in that plan and the actual benefit paid or
payable to the Executive under that plan. Any such special supplemental
retirement benefit shall be paid at the same time or times (which will
depend upon the settlement option under the Society Retirement Plan
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selected by the Executive) as payments are made under the particular
Society Retirement Plan with respect to which the special supplemental
retirement benefit is calculated. All determinations and calculations
required to be made to determine either the amount of any lump sum with
respect to a Society Savings Plan or the amount of any special supplemental
retirement benefit under this Paragraph (d) shall be made by the Accounting
Firm, which shall provide detailed supporting calculations both to Society
and the Executive within 30 days after the end of such 24 month period
(which calculations, in the case of any special supplemental retirement
benefit, may be in the alternative leaving open to the Executive all of the
settlement options among which the Executive may be entitled to choose
under the particular Society Retirement Plan). All such determinations and
calculations by the Accounting Firm shall be final and binding upon
Society and the Executive.
The payments under Paragraph (a) of this Section 2 and the benefits required
to be provided by Paragraphs (c) and (d) of this Section 2 are subject to
reduction or earlier termination, as the case may be, as provided in Section 4
of this Agreement in the event that the Executive accepts Full-time Employment
with an Unaffiliated Employer within 24 months following the Termination Date.
The payments provided in
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this Section are also subject to reduction as provided in Section 8 dealing
with excess parachute payments.
3. REIMBURSEMENT OF CERTAIN EXPENSES AFTER A CHANGE OF CONTROL.
(a) From and after a Change of Control, Society shall
pay, as incurred, all expenses, including the reasonable fees
of counsel engaged by the Executive, of defending any action brought
to have this Agreement declared invalid or unenforceable.
(b) From and after a Change of Control, Society shall pay, as
incurred, all expenses, including the reasonable fees of counsel
engaged by the Executive, of prosecuting any action to compel Society
to comply with the terms of this Agreement upon receipt from
Executive of an undertaking to repay Society for such expenses if,
and only if, it is ultimately determined by a court of competent
jurisdiction that the Executive had no reasonable grounds for bringing
that action (which determination need not be made simply because the
Executive fails to succeed in the action).
(c) From and after a Change of Control, expenses (including
attorney's fees) incurred by the Executive in defending any action,
suit, or proceeding commenced or threatened against the Executive
for any action or failure to act as an employee, officer, or
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director of Society or any Subsidiary shall be paid by Society, as
they are incurred, in advance of final disposition of the action,
suit, or proceeding upon receipt of an undertaking by or on behalf of
the Executive in which the Executive agrees to reasonably cooperate
with Society or the Subsidiary, as the case may be, concerning the
action, suit, or proceeding, and (i) if the action, suit, or
proceeding is commenced or threatened against the Executive for any
action or failure to act as a director, to repay the amount if it is
proved by clear and convincing evidence in a court of competent
jurisdiction that the Executive's action or failure to act involved an
act or omission undertaken with deliberate intent to cause injury to
Society or a Subsidiary or (ii) if the action, suit, or proceeding is
commenced or threatened against the Executive for any action or
failure to act as an officer or employee, to repay the amount if it is
ultimately determined that the Executive is not entitled to be
indemnified. The provisions of this Paragraph (c) shall not apply if
the only liability asserted against the Executive in such action,
suit, or proceeding is against the Executive in the Executive's status
as a director pursuant to Section 1701.95 of the Ohio Revised Code.
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4. NO SET-OFF; NO OBLIGATION TO SEEK OTHER EMPLOYMENT OR
TO OTHERWISE MITIGATE DAMAGES. Society's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense, or other claim whatsoever which Society or any of its Subsidiaries may
have against the Executive; provided, however, if the Executive is indicted or
charged by information in criminal proceedings on account of theft from Society
or its Subsidiary, Society may thereafter suspend payments under this Agreement
pending conclusion (including available appeals) of such criminal proceedings
and, if the Executive is convicted at the conclusion of the criminal
proceedings of theft from Society or its Subsidiary, Society may set-off
amounts owing under this Agreement against the amounts taken by theft by the
Executive; otherwise, at the conclusion of the criminal proceedings without the
Executive being convicted of theft from Society or its Subsidiary, all
suspended payments shall be immediately paid to the Executive. The Executive
shall not be required to mitigate damages or the amount of any payment provided
for under this Agreement by seeking other employment or otherwise. Except as
provided in the next following sentence, the amount of any payment provided for
under this Agreement shall not be reduced by any compensation or benefits
earned by the Executive as the result of employment by
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another employer or otherwise after the termination of the Executive's
employment. In the event that the Executive accepts Full-time Employment with
an Unaffiliated Employer within 24 months following the Termination Date:
(i) the Executive shall, within five business days after
accepting such employment, notify Society of such fact,
(ii) as long as Society is obligated to continue to make
monthly compensation continuation payments under Paragraph (a) of
Section 2 of this Agreement, the Executive shall, by the fifth business
day of each month occurring after accepting such employment, notify
Society of the amount of cash compensation the Executive received during
the preceding month from the Executive's new employer,
(iii) each remaining monthly compensation continuation payment
under Paragraph (a) of Section 2 of this Agreement shall be reduced (but
in no event to less than zero) by the amount of cash compensation received
by the Executive from the Executive's employment with the Executive's new
employer during the month preceding the month in which such payment is
made, and
(iv) Society's obligation to provide the Executive with
benefits under Paragraphs (c) and (d) of Section 2 of this Agreement shall
cease on the date that the Executive commences Full-time Employment with
an Unaffiliated Employer instead of at the end of the 24 month period
specified in Paragraphs (c) and (d) of Section 2 of this Agreement; at
each place in such Paragraphs (c) and (d) that there is a reference to a
24 month period, the reference shall be deemed to be to the period from
the Termination Date to the commencement date of Full- time Employment
with an Unaffiliated Employer; and if Society has an obligation to make a
lump-sum payment under clauses (x) or (y) of Paragraph (d) of Section 2,
such lump-sum payment shall be made within 45 days after the date that the
Executive commences Full-time Employment with an Unaffiliated Employer for
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the period from the Termination Date to such commencement date.
5. NO EFFECT ON OTHER PLANS OR RIGHTS. The provisions of this
Agreement, and any payment provided for hereunder, shall not reduce or
increase any amounts otherwise payable, or in any way diminish or enlarge
the Executive's rights, or rights which would accrue solely as a result
of the passage of time, under any incentive compensation plan, stock option or
stock appreciation rights plan, retirement or supplemental retirement plan,
stock purchase and savings plan, disability or insurance plans, or other
similar contract, plan or arrangement of Society or any Subsidiary. If the
Executive becomes entitled to receive any payments under this Agreement as a
result of termination of the Executive's employment following a Change of
Control, those payments shall be in lieu of any and all other claims or rights
that the Executive may have for severance, separation, and/or salary
continuation pay upon that termination of the Executive's employment.
6. INDEMNIFICATION. Society shall indemnify the Executive,
to the full extent permitted or authorized by the Ohio General Corporation
Law as it may from time to time be amended, if the Executive is made or
threatened to be made a party to any threatened, pending, or completed
action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, by reason of the fact that
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the Executive is or was a director, officer, or employee of Society or any
Subsidiary, or is or was serving at the request of Society or any Subsidiary as
a director, trustee, officer, or employee of a bank, corporation, partnership,
joint venture, trust, or other enterprise. The indemnification provided by
this Section 6 shall not be deemed exclusive of any other rights to which the
Executive may be entitled under the articles of incorporation or the
regulations of Society or of any Subsidiary, or any agreement, vote of
shareholders or disinterested directors, or otherwise, both as to action in the
Executive's official capacity and as to action in another capacity while
holding such office, and shall continue as to the Executive after the Executive
has ceased to be a director, trustee, officer, or employee and shall inure to
the benefit of the heirs, executors, and administrators of the Executive.
7. DISABILITY. If, after a Change of Control and prior to
the Termination Date, the Executive is unable to perform services for
Society or any Subsidiary for any period by reason of disability of the
Executive, as a result of accidental bodily injury or sickness, Society will
pay and provide to the Executive all compensation and benefits to which the
Executive would have been entitled had the Executive continued to be actively
employed by Society through the earliest of the following dates: (a) the first
date on which the Executive is no longer so disabled to such
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an extent that the Executive is unable to perform services for Society, (b) the
date on which the Executive becomes eligible for payment of long term
disability benefits under the Society Long Term Disability Plan, (c) the date
on which Society has paid and provided 24 months of compensation and benefits
to the Executive during the Executive's disability, or (d) the date of the
Executive's death.
8. EXCESS PARACHUTE PAYMENT REDUCTION. Anything in this
Agreement to the contrary notwithstanding, in the event it shall be
determined that any payment or distribution by Society or any of its
Subsidiaries to or for the benefit of the Executive (whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise) (a "Payment") would be nondeductible by Society for Federal income
tax purposes because of Section 280G of the Internal Revenue Code and
applicable regulations promulgated thereunder, then the aggregate present value
of amounts payable or distributable to or for the benefit of the Executive
pursuant to this Agreement (such payments or distributions pursuant to this
Agreement are hereinafter referred to as "Agreement Payments") shall be reduced
(but not below zero) to the Reduced Amount. The "Reduced Amount" shall be an
amount expressed in present value which maximizes the aggregate present value
of Agreement Payments without causing any Payment to be nondeductible by
Society because of Section 280G of the Internal Revenue Code and applicable
regulations promulgated thereunder. For purposes of this Section 8, present
value shall be determined in accordance with Section 280G(d)(4) of the Internal
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Revenue Code and applicable regulations promulgated thereunder. All
determinations required to be made under this Section 8 shall be made by the
Accounting Firm which shall provide detailed supporting calculations both to
Society and the Executive within 30 days after the Termination Date or such
earlier time as is requested by Society. Society and the Executive shall
cooperate with each other and the Accounting Firm and will provide necessary
information so that the Accounting Firm may make all such determinations. All
such determinations by the Accounting Firm shall be final and binding upon
Society and the Executive. The Executive shall determine which of the
Agreement Payments (or, at the election of the Executive, other payments) shall
be eliminated or reduced consistent with the requirements of this Section 8,
provided that, if the Executive does not make such determination within 20 days
of the receipt of the calculations made by the Accounting Firm, Society shall
elect which of the Agreement Payments shall be eliminated or reduced consistent
with the requirements of this Section 8 and shall notify the Executive promptly
of such election. As a result of the uncertainty in the application of Section
280G of the Internal Revenue Code and applicable regulations promulgated
thereun-
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der at the time of the initial determination by the Accounting Firm hereunder,
it is possible that Agreement Payments will be made by Society which should not
have been made ("Overpayment") or that additional Agreement Payments will not
be made by Society which could have been made ("Underpayment"), in each case,
consistent with the calculations required to be made hereunder. In the event
that the Accounting Firm or a court of competent jurisdiction (in a final
judgment as to which the time for appeal has lapsed or no appeal is available)
determines at any time that an Overpayment has been made, any such Overpayment
shall be treated for all purposes as a loan to the Executive which the
Executive shall repay to Society together with interest at the applicable
short-term Federal rate provided for in Section 1274(d)(1) of the Internal
Revenue Code, compounded semi-annually; provided, however, that no amount shall
be payable by the Executive to Society (or if paid by the Executive to Society,
such payment shall be returned to the Executive) if and to the extent such
payment would not reduce the amount which is subject to taxation under Section
4999 of the Internal Revenue Code. In the event that the Accounting Firm or a
court of competent jurisdiction (in a final judgment as to which the time for
appeal has lapsed or no appeal is available) determines at any time that an
Underpayment has occurred, any such Underpayment shall be promptly paid by
Society to or for the benefit of the Execu-
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tive together with interest at the applicable short-term Federal rate provided
for in Section 1274(d)(1) of the Internal Revenue Code, compounded
semi-annually.
9. TAXES; WITHHOLDING OF TAXES. Without limiting the right
of Society or its Subsidiary to withhold taxes pursuant to this Section,
the Executive shall be responsible for all income, excise, and other taxes
(federal, state, city, or other) imposed on or incurred by the Executive as a
result of receiving the payments and benefits provided in this Agreement,
including, without limitation, the payments and benefits provided under Section
2 of this Agreement. Society or its Subsidiary may withhold from any amounts
payable under this Agreement all federal, state, city, or other taxes as
Society shall determine to be required pursuant to any law or government
regulation or ruling.
10. SUCCESSOR TO SOCIETY. Society will not consolidate
with or merge into any other corporation, or transfer all or substantially
all of its assets to another corporation or bank, unless such other
corporation or bank shall assume this Agreement in a signed writing and
deliver a copy thereof to the Executive. Upon such assumption the successor
corporation or bank shall become obligated to perform the obligations of
Society under this Agreement, and the term "Society" as used in this Agreement
shall be deemed to refer to such successor corporation or bank.
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11. PAYMENTS TO CONTINUE AFTER EXECUTIVE'S DEATH.
If, at the time of the Executive's death, the Executive is entitled to receive
payments under this Agreement, all amounts still payable in accordance with the
terms of this Agreement shall be paid to the individual or trust designated in
a writing delivered to Society by the Executive prior to the Executive's death
(with the Executive having the right to change from time to time such
designation by delivering to Society prior to the Executive's death a new
written designation) or, if there is no such designation, to the Executive's
estate. As provided in the preceding sentence, this Agreement will inure to
the benefit of and be enforceable by the Executive's personal representatives,
executors, administrators, successors, heirs, and designees.
12. TERM OF THIS AGREEMENT. This Agreement shall be
effective immediately and shall continue in full force and effect until
terminated as provided in this Section 12.
(a) This Agreement shall automatically terminate on
the first date occurring before a Change of Control on which both:
(i) the Executive is neither an elected officer of Society nor an
elected officer of any Subsidiary; and (ii) it is not contemplated
that the Executive will be elected an officer of Society or any
Subsidiary within 60 days thereafter; provided,
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however, that any termination of employment of the Executive or
removal of the Executive as an elected officer done primarily in
contemplation of a Change of Control shall be deemed to be a
termination or removal of the Executive as of immediately after such
Change of Control, if such Change of Control in fact occurs, for
purposes of this Agreement.
(b) Before a Change of Control, Society may terminate
this Agreement by giving the Executive not less than twelve months'
prior written notice of its intention to terminate this Agreement;
provided, however, that any such notice of intention to terminate
shall not be effective if a Change of Control occurs during such
twelve month period, and, provided further, that Society shall in no
event give a notice under this Paragraph (b) prior to February 22,
1995.
After a Change of Control, this Agreement may not be terminated. However, in
the event the Executive's employment with Society and its Subsidiaries
continues for two years or more following the occurrence of a Change of
Control, then, for all purposes of this Agreement, such Change of Control shall
thereafter be treated as if it never occurred.
13. NOTICES. For purposes 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
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States registered mail, return receipt requested, postage prepaid, as follows:
If to Society or a Subsidiary:
Society Corporation
800 Superior Avenue
Cleveland, Ohio 44114
Attention: Secretary
If to the Executive:
___________________________
___________________________
___________________________
or such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
14. EMPLOYMENT RIGHTS. Nothing expressed or implied in
this Agreement shall create any right or duty on the part of Society or the
Executive to have the Executive continue as an officer of Society or a
Subsidiary or to remain in the employment of Society or a Subsidiary.
15. ADMINISTRATION. Society shall be responsible for
the general administration of this Agreement and for making payments under
this Agreement. All payments under this Agreement shall be made solely from
the general assets of Society or one of its Subsidiaries, and the Executive
shall have the rights of an unsecured general creditor of Society. All
expenses incurred to or costs of the Accounting Firm are the responsibility of
Society.
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16. CLAIMS REVIEW PROCEDURE. Whenever Society decides
for whatever reason to deny, whether in whole or in part, a claim for
benefits under this Agreement by the Executive, Society shall transmit a
written notice of its decision to the Executive, which notice shall be written
in a manner calculated to be understood by the Executive and shall contain a
statement of the specific reasons for the denial of the claim and a statement
advising the Executive that, within 60 days of the date on which the Executive
receives such notice, the Executive may obtain review of the decision of
Society in accordance with the procedures hereinafter set forth. Within such
60-day period, the Executive or the Executive's authorized representative may
request that the claim denial be reviewed by filing with Society a written
request therefor, which request shall contain the following information:
(i) the date on which the request was filed with Society,
(ii) the specific portions of the denial of the Executive's
claim which the Executive requests Society to review, and
(iii) any written material which the Executive desires Society
to examine.
Within 30 days of the date specified in clause (i) of this Section, Society
shall conduct a full and fair review of its decision to deny the Executive's
claim for benefits and deliver to the Executive its written decision on review,
written in a manner calculated to be understood by the Executive, specifying
the reasons and the Agreement provi-
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sions upon which its decision is based. Nothing in this Section shall be
construed as limiting or restricting the Executive's right to institute legal
proceedings in a court of competent jurisdiction to enforce this Agreement
after complying with the procedures set forth in this Section or as limiting or
restricting the scope of the court's review (which review shall be de novo);
provided, further, that the failure of the Executive to comply with the
procedures set forth in this Section shall not bar or prohibit the subsequent
compliance by the Executive with those procedures and thereafter the Executive
shall have the right to institute legal proceedings to enforce this Agreement.
17. VALIDITY. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability
of any other provision of this Agreement which shall remain in full force and
effect.
18. MISCELLANEOUS. No provision of this Agreement may
be modified, waived, or discharged unless such waiver, modification, or
discharge is agreed to in a writing signed by the Executive and Society. No
waiver by either party hereto at any time of any breach by the other party of,
or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same time or at any prior or subsequent time.
No agreement or representation, oral or otherwise, express or implied, with
respect to the subject matter
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hereof has been made by either party which is not set forth expressly in this
Agreement. This Agreement shall be governed by and construed in accordance
with the laws of the State of Ohio.
IN WITNESS WHEREOF, the parties have executed this
Agreement as of the date first written above.
SOCIETY CORPORATION
By___________________________
Robert W. Gillespie
Chairman of the Board and
Chief Executive Officer
THE "EXECUTIVE"
_____________________________
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