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EXHIBIT (10b)
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement"), entered into this ____ day of
__________, 1989, by BRUSH WELLMAN INC., an Ohio corporation (the "Company"),
and ______________(the "Executive").
WITNESSETH:
WHEREAS, the Board of Directors of the Company (the "Board") has made the
following determinations:
A. The Executive is a senior executive of the Company and has made and is
expected to continue to make major contributions to the growth, profitability,
and financial strength of the Company;
B. The Board wishes to assure the Company's continuity of management;
C. The Board recognizes that, as is the case with many publicly held
companies, the possibility of a Change in Control (as defined in Section IV) may
exist and wishes to ensure that the Company's senior executives are not
practically disabled from discharging their duties upon the occurrence of any
actual or threatened Change in Control; and
D. This Agreement shall not alter materially the remuneration and benefits
which the Executive could reasonably
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expect to receive from the Company in the absence of a Change in Control and,
accordingly, although effective as of the date hereof, this Agreement shall
become operative only upon the occurrence of a Change in Control during the Term
(as defined in Section II).
NOW, THEREFORE, the Company and the Executive agree as follows:
I. Employment; Position and Responsibilities
(A) Subject to the terms and conditions of this Agreement, upon the
occurrence of a Change in Control during the Term, the Company, if the Executive
is then an employee of the Company, shall continue the Executive in its employ
(and the Executive shall remain in the employ of the Company) for the Window
Period (as defined in Section III), whether or not the Term ends before the end
of the Window Period, in the position which he holds at the time of such Change
in Control (or such enhanced position to which he may from time to time
thereafter be elected by the Board) and with substantially the same duties,
responsibilities, and reporting relationships as he has at the time of such
Change in Control (or such enhanced duties, responsibilities, and reporting
relationships as the Board may from time to time thereafter designate in writing
or to which the Company and the Executive may from time to time thereafter agree
in writing).
(B) During the Window Period, the Executive shall, while he is an employee
of the Company, devote substantially all of
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his time during normal business hours to the business and affairs of the
Company, but nothing in this Agreement shall preclude the Executive during the
Window Period from devoting reasonable periods of time during normal business
hours to serving as a director, trustee, or member of any committee of any
organization or business so long as such activity would not constitute
Competitive Activity (as defined in Section XIII) if conducted by the Executive
after any termination of the Executive's employment with the Company pursuant to
Section VII(A).
II. Effectiveness of this Agreement; Term In determining whether the Window
Period commences, this Agreement shall be effective immediately upon execution
and shall continue in force for a period of five years (the "Term") from the
date of such execution; provided, however, that on the date five years after
this Agreement is executed, and on each second anniversary of such date
thereafter, the Term shall be automatically extended for two additional years
unless either the Company or the Executive has given written notice to the
other, as provided in Section X, prior to the date which is two years before the
date on which the Term would end if not automatically extended.
III. Operation of this Agreement; Window Period This Agreement shall become
operative only upon the occurrence of a Change in Control and then only if such
Change
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in Control occurs prior to the end of the Term while the Executive is an
employee of the Company. If the Executive is employed by the Company at the time
of any such Change in Control, this Agreement shall remain operative for a
period (the "Window Period") of four years after the occurrence of such Change
in Control or, if shorter, until the Executive reaches age 65.
IV. Definition of Change in Control
A "Change in Control" of the Company shall have occurred if at any time
during the Term any of the following events shall occur:
(A) The Board at any time shall fail to include a majority of Directors who
are either "Original Directors" or "Approved Directors". An Original Director is
a Director who is serving on the date of this Agreement. An Approved Director is
a Director who, after such date, is elected, or is nominated for election by the
shareholders, by a vote of at least two-thirds of the Original Directors and the
previously elected Approved Directors, if any.
(B) Any person (as the term "person" is defined in Section 1701.01(G) of the
Ohio Revised Code) shall have made a "control share acquisition" (as the term
"control share acquisition" is defined in Section 1701.01(Z) of the Ohio Revised
Code) of shares of the Company without having first complied with Section
1701.831 of the Ohio Revised Code (dealing with control share acquisitions).
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(C) The Board shall at any time during the Term determine in the good faith
exercise of its judgment that (1) any particular actual or proposed accumulation
of shares of the Company, tender offer for shares of the Company, merger,
consolidation, sale of assets, proxy contest, or other transaction or event or
series of transactions or events will, or is likely to, if carried out, result
in a Change in Control falling within Section IV(A) or IV(B) and (2) it is in
the best interests of the Company and its shareholders, and will serve the
intended purposes of this Agreement, if this Agreement shall thereupon become
immediately operative.
V. Compensation While Employed During Window Period
(A) No compensation shall be payable under this Section V unless and until
there shall have been a Change in Control while the Executive is an employee of
the Company during the Term (at which time the Window Period shall begin).
(B) If such a Change in Control so occurs (at which time the Window Period
shall begin), the Executive, while an employee of the Company, will be entitled
to receive compensation, for the Window Period, in the following forms, rates,
and amounts:
(1) Base Salary: salary payments (semi-monthly in arrears) at an annual
rate which will be the highest of:
(a) the annual rate in effect at the time of the
Change in Control;
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(b) the annual rate in effect at any time during the 24 months prior
to the Change in Control; or
(c) the annual rate approved by the Board from time to time after the
Change in Control.
(2) Annual Bonus: annual bonus amounts (payable on February 10, or, if
February 10 is not a business day in any year, then on the business day next
preceding such February 10) with respect to the previous calendar year equal to
the higher of:
(a) the highest annual bonus awarded to the Executive in the
36 month prior to the Change in Control; or
(b) the highest annual bonus approved by the Board from time to time
after the Change in Control.
(3) Benefit Plans - The Executive shall continue, as if there had been no
Change in Control, to participate, throughout the Window Period, in all benefit
plans, policies, or arrangements of the Company in which the Executive
participates immediately prior to the Change in Control, including, without
limitation, any incentive, retirement income, savings or thrift, stock option,
stock purchase, stock appreciation, stock grant, group insurance (health, life,
and others, if any), disability, salary continuation, and other employee benefit
plans, policies, or arrangements, or any successor plans, policies, or
arrangements that may thereafter be adopted by the Company
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and provide the Executive at least the same reward opportunities that were
provided to him immediately prior to the Change in Control as if there had
been no Change in Control.
(4) Executive Perquisites - The Executive shall continue to receive,
throughout the Window Period, all executive perquisites (including, without
limitation, a Company automobile, club dues, and secretarial services)
provided by the Company immediately prior to the Change in Control and any
improvements therein which are thereafter approved by the Board from time to
time.
(5) Nothing in this Agreement shall preclude improvement of the plans,
policies, or arrangements contemplated by the foregoing paragraphs (1)-(4)
of this Section V(B), but no such improvements shall in any way diminish any
other obligation of the Company under this Agreement. If the Company shall
change or terminate any such plans, policies, or arrangements during the
Window Period, it shall nevertheless continue to provide to the Executive
other arrangements which are substantially comparable thereto.
VI. Termination While Employed During Window Period
(A) If a Change in Control shall occur while the Executive is an employee of
the Company during the Term (and the Window Period therefore commences), the
Executive shall be entitled to
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the compensation provided in Section VII if his employment with the Company
is thereafter terminated during the Window Period unless such termination
results from the Executive's
(1) death;
(2) disability (on the terms described in Section
VI(B));
(3) retirement (as defined in Section VI(C));
(4) termination by the Company for Cause (as defined
in Section VI(D)); or
(5) decision to terminate his employment other than
for Good Reason (as defined in Section VI(E)).
(B) If, as a result of the Executive's incapacity due to physical or mental
illness, the Executive shall qualify for benefits under the long-term disability
plan, policy, or arrangement (if any) of the Company in effect at the time when
the Change in Control occurs and shall have been absent from his duties with the
Company on a full-time basis during the Window Period for a continuous period of
one year, then the Company may terminate the Executive's employment for
disability without the Executive being entitled to the compensation provided in
Section VII.
(C) "Retirement" means the attainment by the Executive of age 65 or his
earlier voluntary retirement in accordance with any applicable retirement plan
of the Company. Voluntary retirement for this purpose does not include any
retirement
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decision made by the Executive as a consequence of a termination by the
Executive of his employment for Good Reason.
(D) "Cause" means commission by the Executive of an act which constitutes a
felony.
(E) The Executive may terminate his employment for Good Reason during the
Window Period and, if he does so, he shall be entitled to the compensation
provided in Section VII. "Good Reason" shall mean any of the following:
(1) any reduction in the Executive's base salary provided in Section
V(B)(1) or his annual bonus provided in Section V(B)(2);
(2) any significant reduction in the Executive's benefits provided in
Section V(B)(3) or his perquisites provided in Section V(B)(4);
(3) any significant reduction in the Executive's title, status,
position, responsibilities, duties, or reporting relationships as herein
provided;
(4) any determination made by the Executive in good faith that, as a
consequence of the circumstances giving rise to a Change in Control or
resulting therefrom, he is unable to carry out the responsibilities,
duties, or reporting relationships associated with his title, status, or
position as herein provided;
(5) the Company shall require the Executive to have as his principal
location of work any location which is in excess of 50 miles from the
Executive's principal residence
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as of the date immediately prior to the Change in Control; or
(6) any failure of any successor of or to the Company following a
Change in Control to comply with Section IX(A).
VII. Compensation Upon Termination During Window Period
(A) If the Executive's employment by the Company is terminated during the
Window Period:
(1) by the Company other than by reason of death, disability, or Cause,
or
(2) by the Executive for Good Reason,
then the Company shall pay to the Executive, within the time specified in
Section VII(D), a lump sum in cash equal to the present value (determined as
provided in Section VII(B)) of his base salary and annual bonus at the rates
provided in Sections V(B)(1) and V(B)(2), respectively, for the remainder of the
Window Period.
(B) In determining present value for purposes of Section VII(A), there
shall be applied a discount factor equal to the coupon rate on general
full-faith-and-credit obligations of the U.S. Treasury having a maturity of five
years and issued on the date of such termination (or, if no such obligations are
issued on that date, then on such obligations issued on the most recent day
prior to that date); provided, however, that if the Executive should die on or
after the date of such termination but before full payment is made to him
pursuant to Section VII(D), such payment shall be made to such person(s) as the
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Executive shall have designated in a writing filed with the Secretary of the
Company or, if he shall not have filed such a designation, then to his executor
or administrator within ten days after appointment of the same.
(C) To secure, fund, or otherwise assure to the maximum practicable extent
the payment to be made by the Company to the Executive pursuant to Sections
VII(A) and VII(B), the Company will enter into a trust agreement in
substantially the form attached hereto as Exhibit A. Should a Change in Control
occur during the Term while the Executive is an employee of the Company, the
Company shall, at or prior to the time of such Change in Control, cause there to
be on deposit with the trustee under such trust agreement an amount of funds
equal to one-twelfth of the sum of the amounts referred to in Section V(B)(1)
and Section V(B)(2) (disregarding the application of the discount factor
provided in Section VII(B)) multiplied by the lesser of 48 or the number of
months (rounded to the next higher number) between the date of such Change in
Control and the date the Executive reaches age 65. Should the Executive's
employment by the Company be terminated (i) for any reason prior to the
occurrence of a Change in Control or (ii) by reason by death, disability (on the
terms described in Section VI(B)), retirement, by the Company for Cause, or by
the Executive's decision to terminate it other than for Good Reason after the
occurrence of a Change in Control, the Executive will consent to the revocation
of the trust under the trust
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agreement and the payment to the Company of all the assets then held in such
trust.
(D) The compensation provided for in Sections VII(A) and VII(B) shall be
paid not later than the 40th day following the date of any such termination of
employment pursuant to Section VII(A).
(E) The Company shall arrange to provide the Executive, following the date
of any termination of employment of the type described in Section VII(A), for
the remainder of the Window Period, with continued coverage and participation in
the benefit plans, policies, arrangements, and perquisites referred to in
Sections V(B)(3) and V(B)(4) as if there had been no such termination of
employment (or with such improved coverage and participation, if any, as may be
implemented during the Window Period), except that participation will not
continue in any stock option, stock purchase, stock appreciation, or stock grant
plans and except that no benefits shall accrue for any period after such
termination of employment pursuant to any benefit plan qualified under Section
401(a) of the Internal Revenue Code of 1986, as amended (the "Code"), or the
Supplemental Retirement Benefit Plan effective as of January 1, 1984, as the
same has been, or may be, amended (the "Supplemental Retirement Benefit Plan")
by reason of any provision included in this Agreement. For purposes of applying
the immediately preceding sentence with respect to any benefit plan, policy, or
arrangement the level of benefits under which
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depends in whole or in part on years of service, the Executive shall be
treated as having continued in the employment of the Company for the remainder
of the Window Period. To the extent that the Executive's coverage or
participation in any such plan, policy, or arrangement is terminated by reason
of the Executive's no longer being an employee of the Company during the Window
Period, the Company shall (i) pay from time to time to the Executive cash in
amounts equal to what would have been provided pursuant to such plan, policy, or
arrangement at any such time had the Executive's coverage or participation not
been terminated and as if the Executive's employment with the Company continued
for the remainder of the Window Period or (ii) arrange, with the Executive's
prior written consent, to provide him with coverage and participation in a
substantially similar plan, policy, or arrangement. If, under any plan, policy,
or arrangement in effect immediately prior to the Change in Control, the
Executive would have been eligible for post-retirement health or medical
benefits with respect to himself or others if his retirement had occurred on the
last day of the Window Period, the Company shall provide him with
post-retirement health or medical benefits that are substantially similar to
those provided under such plan, policy, or arrangement (or with such improved
benefits, if any, as may be implemented during the Window Period). In addition,
the Company shall pay to the Executive, within the time specified in Section
VII(D), a lump sum (calculated as
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provided in Section VII(B)) in cash equal to (i) the number of months (rounded
to the next higher number) between the date of termination of the Executive's
employment with the Company pursuant to Section VII(A) and the last day of the
Window Period multiplied by (ii) one-twelfth of the annual benefit (expressed
as a single life annuity commencing at age 65) that the Executive would have
accrued under the Brush Wellman Inc. Pension Plan for Salaried Employees (the
"Pension Plan") during the calendar year ending prior to the date of such
termination of employment if the Pension Plan did not contain the limitations
on benefits imposed by the Code, including, without limitation, Sections 415
and 401(a)(17) of the Code (the "Constructive Supplemental Amount"). The
Company and the Executive intend that the benefits payable under this Section
VII(E) shall not constitute a "supplemental retirement or other similar
benefit" for purposes of Section 2(ii)(c), or any comparable successor
provision, of the Supplemental Retirement Benefit Plan. The obligation of the
Company to make any payments under this Section VII(E) constitutes the
unsecured promise of the Company to make such payments from its general assets,
and the Executive shall have no interest in, or lien or prior claim upon, any
property of the Company in connection therewith.
(F) If the compensation and other payments under this Section VII, either
alone or together with other receipts of the Executive from the Company, would,
after taking into account Section VIII, constitute a "parachute payment" (as
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defined in Section 280G of the Code), such compensation, other payments, and
other receipts shall be reduced to the largest amount as will result in no
portion of the such compensation, other payments, or other receipts being
subject to the excise tax imposed by Section 4999 of the Code. The determination
of any reduction under this Section VII(F) in such compensation, other payments,
and other receipts (including the selection of the specific types of such
compensation, other payments, or other receipts to be reduced) shall be made by
the Executive in good faith (and upon the advice of a nationally recognized
expert in compensation matters engaged and paid for by the Executive) after
consultation with the Company. The Executive shall deliver such determination to
the Company by the 25th day following any termination of the Executive pursuant
to Section VII(A). His duty to consult with the Company under this Section
VII(F) shall expire on the 30th day following such termination. Such
determination shall be conclusive and binding on the Company. The Company shall
cooperate in good faith with the Executive in making such determination and in
providing the necessary information for this purpose.
(G) The Company shall have no right of set-off or counterclaim in respect
of any of its obligations to the Executive under this Agreement.
VIII. Mitigation
If the Executive's employment by the Company is terminated during the
Window Period pursuant to Section VII(A), the
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Company shall acknowledge by written notice to the Executive that the Executive
offered to continue employment with the Company in accordance with the terms of
this Agreement but that such offer was rejected. Thereafter, the Executive shall
use his best efforts to mitigate his damages by seeking other comparable
employment for the remainder of the Window Period; provided, however, that in no
event shall the Executive be required to accept a position of substantially less
importance or status or of substantially different character than the position
he held immediately prior to the date of such termination, be required to accept
a position other than in a location within 50 miles of his principal residence
immediately prior to such termination, or be required to engage in any
Competitive Activity. The Executive shall pay over to the Company 100% of any
employment income received and earned by him from other employers with respect
to any portion of the remainder of the Window Period (but not more than the sum
of (i) the entire amount paid by the Company to the Executive pursuant to
Section VII(A), disregarding the application of the discount factor provided in
Section VII(B), and (ii) the Constructive Supplemental Amount), and any benefits
or perquisites provided by any other employers with respect to any portion of
the remainder of the Window Period shall reduce pro tanto the Company's
obligation to furnish benefits or perquisites pursuant to Section VII(E).
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IX. Successors and Binding Agreement
(A) The Company shall require any successor (whether direct or indirect, by
purchase, merger, consolidation, or otherwise) to all or substantially all of
the business or assets of the Company by agreement in form and substance
satisfactory to the Executive 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. If, at any time during the Window Period
following a Change in Control, there shall not be in full force and effect an
agreement between any such successor and the Executive to the effect
contemplated by the preceding sentence, the absence of such agreement shall
constitute a material breach of this Agreement by such successor and shall
entitle the Executive to terminate his employment for Good Reason. This
Agreement shall be binding upon and inure to the benefit of the Company and any
successor of or to the Company, including, without limitation, any persons
acquiring directly or indirectly all or substantially all of the assets of the
Company whether by merger, consolidation, sale, or otherwise (and such successor
shall thereafter be deemed the "Company" for the purpose of this Agreement), but
shall not otherwise be assignable or delegable by the Company.
(B) This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal
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representatives, executors, administrators, assigns, 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 Section
IX(A). Without limiting the generality of the foregoing, the
Executive's right to receive payments hereunder shall not be
assignable or transferable, whether by pledge, creation of a
security interest, or otherwise, other than by a transfer by
his will (or other testamentary instrument) or by the laws of
descent and distribution and, in the event of any attempted
assignment or transfer contrary to this Section IX(C), the
Company shall have no liability to pay any amount so attempted
to be assigned or transferred.
X. Notices
All communications provided for herein or pursuant hereto
shall be in writing and shall be deemed to have been duly given
when delivered:
If to the Company to:
Brush Wellman Inc.
1200 Hanna Building
Cleveland, Ohio 44115
Attention: Secretary
If to the Executive to:
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or to such other address as either party may have furnished to
the other in writing in accordance herewith.
XI. Employment Rights
Nothing expressed or implied in this Agreement shall 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 prior to a Change in Control; provided, however,
that any termination of employment of the Executive following the commencement
of any discussions with a third party that ultimately result in a Change in
Control shall (unless such termination is wholly unrelated to such discussions)
be deemed to be a termination by the Executive for Good Reason after a Change in
Control.
XII. Withholding of Taxes
The Company may withhold from any amounts payable under this Agreement all
federal, state, city, or other taxes as shall be required to be withheld
pursuant to any law or governmental regulation or ruling.
XIII. Competitive Activity
Following the Executive's termination of employment pursuant to Section
VII(A) and for the duration of the Window Period, if the Company shall have
complied and be complying with this Agreement, the Executive shall not engage in
any Competitive Activity. The term "Competitive Activity" means the Executive's
participation, without the written consent of
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an officer of the Company, in the management of any business enterprise if such
enterprise engages in substantial and direct competition with the Company.
Competitive Activity shall not include the mere ownership of securities in any
enterprise and exercise of rights appurtenant thereto.
XIV. Legal Fees and Expenses
The Company shall pay and be solely responsible for any and all attorneys'
and related fees and expenses incurred by the Executive as a result of (A) the
Company's failure to perform this Agreement or any provision hereof; (B) the
Company, any shareholder of the Company, or any other person contesting the
validity or enforceability of this Agreement or any provision hereof; or (C) the
Company, any shareholder of the Company, or any other person contesting the
performance by the Executive of his obligations under this Agreement.
Performance of the Company's obligations under this Section XIV shall be secured
by one or more policies of insurance or as the Board may otherwise determine.
XV. Supercession
If the Executive has heretofore entered into an Employment Agreement dated
July 1, 1983 with the Company, this Agreement shall supercede such Employment
Agreement, which Employment Agreement is hereby cancelled with neither party
thereunder having any liability to the other.
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XVI. Governing Law
The validity, interpretation, construction, and performance of this
Agreement shall be governed by the internal substantive laws of the State of
Ohio, disregarding principles of conflicts of law and the like.
XVII. Miscellaneous
No provision of this Agreement may be modified, waived, or discharged
unless such modification, waiver or, discharge is agreed to in a 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 shall 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,
express or implied, with respect to the subject matter hereof have been made by
either party which are not set forth expressly in this Agreement.
XVIII. 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.
XIX. Counterparts
This Agreement may be executed in one or more counterparts,
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each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement
to be duly executed and delivered on the date set forth above.
BRUSH WELLMAN INC.
By:
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Title:
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THE EXECUTIVE
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