110797
EMPLOYMENT AGREEMENT
AGREEMENT between THOMAS & BETTS CORPORATION, a Tennessee corporation (the
"Corporation"), and __________________________ (the "Executive"), dated as of
the ______ day of ____________, 199__.
The Corporation, on behalf of itself and its shareholders, wishes to
continue to attract and retain well-qualified executive and key personnel who
are an integral part of the management of the Corporation, such as Executive,
and to assure both itself of continuity of management and Executive of continued
employment in the event of any Change of Control (as defined in Section 2 of
this Agreement) of the Corporation;
IT IS, THEREFORE, AGREED:
1. OPERATION OF AGREEMENT. (a) The "Effective Date" shall be the date
during the "Change-of-Control Period" (as defined in Section 1(b)) on which a
Change of Control occurs. Anything in this Agreement to the contrary
notwithstanding, if the Executive's employment with the Corporation is
terminated prior to the date on which a Change of Control occurs, and the
Executive can reasonably demonstrate that such termination (i) was at the
request of a third party who has taken steps
reasonably calculated to effect a Change of Control or (ii) otherwise arose
in connection with a Change of Control, then for all purposes of this
Agreement the "Effective Date" shall mean the date immediately prior to the
date of such termination.
(b) The "Change-of-Control Period" is the period commencing on the date
hereof and ending on the second anniversary of such date; provided, however,
that commencing on the date one year after the date hereof, and on each annual
anniversary of such date (such date and each annual anniversary thereof is
hereinafter referred to as the "Renewal Date"), the Change-of-Control Period
shall be automatically extended so as to terminate two years from such Renewal
Date, unless at least 60 days prior to the Renewal Date the Corporation shall
give notice that the Change-of-Control Period shall not be so extended.
2. CHANGE OF CONTROL. For the purpose of this Agreement, a "Change of
Control" shall mean a change of control during the Change-of-Control Period of a
nature that would be required to be reported in response to Item 1(a) of the
Current Report on Form 8-K, as in effect on the date hereof, pursuant to Section
13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange Act");
provided that, without limitation, such a "Change of Control" shall be deemed to
have occurred if: (i) a third person, including a "group" as such term is used
in Section 13(d)(3) of the Exchange Act, becomes the beneficial owner,
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directly or indirectly, of 25% or more of the combined voting power of the
Corporation's outstanding voting securities ordinarily having the right to
vote for the election of directors of the Corporation; or (ii) individuals
who, as of the date hereof, constitute the Board of Directors of the
Corporation (the "Board" generally and as of the date hereof the "Incumbent
Board") cease for any reason to constitute at least a majority of the Board,
provided that any person becoming a director subsequent to the date hereof
whose election, or nomination for election by the Corporation's shareholders,
was approved by a vote of at least three-quarters of the directors comprising
the Incumbent Board (other than an election or nomination of an individual
whose initial assumption of office is in connection with an actual or
threatened election contest relating to the election of the Directors of the
Corporation, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) shall be, for purposes of this Agreement,
considered as though such person were a member of the incumbent Board.
3. EMPLOYMENT PERIOD. The Corporation hereby agrees to continue the
Executive in its employ, and the Executive hereby agrees to remain in the employ
of the Corporation, for the period commencing on the Effective Date and ending
on the third anniversary of such date (the "Employment Period").
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4. POSITION AND DUTIES. (a) During the Employment Period, (i) the
Executive's position (including status, offices, titles and reporting
relationships), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at any time during the 90-day period immediately
preceding the Effective Date, and (ii) the Executive's services shall be
performed at the location where the Executive was employed immediately preceding
the Effective Date or any office or location less than thirty-five (35) miles
from such location.
Such position, authority, duties and responsibilities shall be regarded as
not commensurate if, as a result of a Change of Control, (i) the Corporation
becomes a direct or indirect subsidiary of another corporation or corporations
or becomes controlled, directly or indirectly, by one or more unincorporated
entities (such other corporation or unincorporated entity owning or controlling,
directly or indirectly, the greatest amount of equity (by vote) of the
Corporation is hereinafter referred to as a "Parent Company"), or (ii) all or
substantially all of the assets of the Corporation are acquired by another
corporation or unincorporated entity or group of corporations or unincorporated
entities owned or controlled, directly or indirectly, by another corporation or
unincorporated entity (such other acquiring or controlling corporation or
unincorporated entity is hereinafter referred to as a "Successor"), unless, in
each case, (x) Section
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13(c) of this Agreement shall have been complied with and (y) the Executive
shall have assumed a position with such Parent Company or Successor, as the
case may be, and the Executive's position, authority, duties and
responsibilities with such Parent Company or Successor, as the case may be,
are at least commensurate in all material respects with the most significant
of those held, exercised and assigned with the Corporation at any time during
the 90-day period immediately preceding the Effective Date, or (iii) more
than one unrelated corporation or unincorporated entity acquires a
significant portion of the assets of the Corporation.
(b) During the Employment Period, excluding periods of vacation and sick
leave to which the Executive is entitled, the Executive agrees to devote
reasonable attention and time during normal business hours to the business and
affairs of the Corporation and, to the extent necessary to discharge the
responsibilities assigned to the Executive hereunder, to use the Executive's
reasonable best efforts to perform faithfully and efficiently such
responsibilities. The Executive may (i) serve on corporate, civic or charitable
boards or committees, (ii) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (iii) manage personal investments, so long
as such activities do not significantly interfere with the performance of the
Executive's responsibilities. It is expressly understood and agreed that to the
extent that any such
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activities have been conducted by the Executive prior to the Effective Date,
the continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective Date shall
not thereafter be deemed to interfere with the performance of the Executive's
responsibilities to the Corporation.
5. COMPENSATION. (a) BASE SALARY. During the Employment Period, the
Executive shall receive a base salary ("Base Salary") at a monthly rate at
least equal to the highest monthly base salary paid to the Executive by the
Corporation, together with any of its affiliate companies, during the
twelve-month period immediately preceding the month in which the Effective
Date occurs. During the Employment Period, the Base Salary shall be reviewed
at least annually and shall be increased at any time and from time to time as
shall be consistent with increases in base salary awarded in the ordinary
course of business to other key executives. Any increase in the Base Salary
shall not serve to limit or reduce any other obligation to the Executive
under this Agreement. The Base Salary shall not be reduced after any such
increase. As used in this Agreement, the term "affiliated companies"
includes any company controlling, controlled by or under common control with
the Corporation.
(b) ANNUAL BONUS. In addition to the Base Salary, the Executive shall be
awarded, for each fiscal year of the
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Corporation ("Fiscal Year") during the Employment Period, an annual bonus (an
"Annual Bonus") (either pursuant to a bonus, profit-sharing or incentive plan
or program of the Corporation or otherwise) in cash at least equal to the
average bonus paid or payable to the Executive in respect of each of the
Fiscal Years (annualized with respect to any such Fiscal Year for which the
Executive has been employed only during a portion thereof) during the three
Fiscal Years immediately prior to the Fiscal Year in which the Effective Date
occurs. Each such Annual Bonus shall be paid no later than March 15 of the
Fiscal Year next following the Fiscal Year for which the Annual Bonus is
awarded, unless the Executive shall otherwise elect to defer the receipt of
such Annual Bonus.
(c) INCENTIVE, SAVINGS AND RETIREMENT PLANS. In addition to the Base
Salary and Annual Bonus payable as hereinabove provided, the Executive shall be
entitled to participate, during the Employment Period, in all incentive, savings
and retirement plans and programs applicable to other key executives (including
the Corporation's restricted stock and stock option plans), but in no event
shall such plans and programs, in the aggregate, provide the Executive with
compensation, benefits and reward opportunities less favorable than the most
favorable of those provided by the Corporation and its affiliated companies for
the Executive under such plans and programs as in effect at any time during the
90-day period immediately preceding the Effective Date
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or, if more favorable to the Executive, as provided at any time thereafter
with respect to other key executives.
(d) WELFARE BENEFIT PLANS. During the Employment Period, the Executive
and/or the Executive's family, as the case may be, shall be eligible for
participation in and shall receive all benefits under each welfare benefit
plan of the Corporation, including, without limitation, all medical,
prescription, dental, disability, salary continuance, group life, accidental
death and travel accident insurance plans and programs of the Corporation and
its affiliated companies, in each case comparable to those in effect at any
time during the 90-day period immediately preceding the Effective Date which
would be most favorable to the Executive or, if more favorable to the
Executive, as in effect at any time thereafter with respect to other key
executives.
(e) EXPENSES. During the Employment Period, the Executive shall be
entitled to receive prompt reimbursement for all reasonable expenses incurred
by the Executive in accordance with the most favorable to the Executive of
the policies and procedures of the Corporation in effect at any time during
the 90-day period immediately preceding the Effective Date or, if more
favorable to the Executive, as in effect at any time thereafter with respect
to other key executives.
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(f) FRINGE BENEFITS. During the Employment Period, the Executive shall
be entitled to fringe benefits, including use of an automobile and payment of
related expenses, in accordance with the most favorable to the Executive of
the policies of the Corporation in effect at any time during the 90-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect at any time thereafter with respect to other key
executives.
(g) OFFICE AND SUPPORT STAFF. During the Employment Period, the Executive
shall be entitled to an office or offices of a size and with furnishings and
other appointments, and to secretarial and other assistance, at least equal to
those provided to the Executive at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive, as provided
at any time thereafter with respect to other key executives.
(h) VACATION. During the Employment Period, the Executive shall be
entitled to paid vacation in accordance with the most favorable to the Executive
of the policies of the Corporation in effect at any time during the 90-day
period immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect at any time thereafter with respect to other key
executives.
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(i) RESTRICTED STOCK; STOCK OPTIONS. On the Effective Date, restricted
stock held by the Executive shall become immediately vested and non-forfeitable,
and all of the Executive's stock options shall become immediately exercisable.
6. TERMINATION OF EMPLOYMENT. (a) DISABILITY. During the Employment
Period, the Corporation may terminate the Executive's employment, after
having established the Executive's Disability (pursuant to the definition of
"Disability" set forth below), by giving to the Executive written notice of
its intention so to terminate the Executive's employment. In such a case,
the Executive's employment with the Corporation shall terminate effective on
the 180th day after receipt of such notice (the "Disability Effective Date"),
provided that, within 180 days after such receipt, the Executive shall not
have returned to full-time performance of the Executive's duties. For
purposes of this Agreement, "Disability" means disability which, after the
expiration of 26 weeks or more after its commencement, is determined to be
total and permanent by a physician selected by the Corporation or its
insurers and acceptable to the Executive or the Executive's legal
representative (such agreement to acceptability not to be withheld
unreasonably).
(b) CAUSE. During the Employment Period, the Corporation may terminate
the Executive's employment for "Cause." For purposes of this Agreement, "Cause"
means (i) an act or acts of
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dishonesty taken by the Executive and intended to result in substantial
personal enrichment of the Executive, (ii) repeated violations by the
Executive of the Executive's obligations under Section 4(b) of this Agreement
which are demonstrably willful and deliberate on the Executive's part or
(iii) the conviction of the Executive of a felony.
(c) GOOD REASON. During the Employment Period, the Executive's
employment may be terminated by the Executive for Good Reason. For purposes
of this Agreement, "Good Reason" means
(i) (A) the assignment to the Executive of any duties inconsistent
in any respect with the Executive's position (including status,
offices, titles and reporting relationships), authority, duties or
responsibilities as contemplated by Section 4 of this Agreement or (B)
any other action by the Corporation which results in a diminution in
such position, authority, duties or responsibilities, other than an
insubstantial and inadvertent action which is remedied by the
Corporation promptly after receipt of notice thereof given by the
Executive;
(ii) any failure by the Corporation to comply with any of the
provisions of Section 5 of this Agreement, other than an insubstantial
and inadvertent failure which is
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remedied by the Corporation promptly after receipt of notice thereof
given by the Executive;
(iii) the Corporation's requiring the Executive to be based at any
office or location other than as described in Section 4(a)(ii) hereof,
except for travel reasonably required in the performance of the
Executive's responsibilities;
(iv) any purported termination by the Corporation of the Executive's
employment otherwise than as permitted by this Agreement, it being
understood that any such purported termination shall not be effective
for any purpose of this Agreement; or
(v) any failure by the Corporation to comply with and satisfy Section
13(c) of this Agreement.
For purposes of this Section 6(c), any good faith determination of "Good
Reason" made by the Executive shall be conclusive.
(d) NOTICE OF TERMINATION. Any termination by the Corporation for Cause
under Section 6(b) or by the Executive for Good Reason under Section 6(c) shall
be communicated by Notice of Termination to the other party hereto given in
accordance with
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Section 14(b) of this Agreement. For purposes of this Agreement, a "Notice
of Termination" means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of the Executive's employment under the provision so indicated
and (iii) if the termination date is other than the date of receipt of such
notice, specifies the termination date (which date shall be not more than 15
days after the giving of such notice).
(e) DATE OF TERMINATION. "Date of Termination" means the date of receipt
of the Notice of Termination or any later date specified therein, as the case
may be. If the Executive's employment is terminated by the Corporation during
the Employment Period other than for Cause or Disability, the Date of
Termination shall be the date on which the Executive receives notice of such
termination.
7. OBLIGATIONS OF THE CORPORATION UPON TERMINATION OF EMPLOYMENT. (a)
DEATH. If, during the Employment Period, the Executive's employment is
terminated by reason of the Executive's death, the Corporation shall not have
any further obligations to the Executive's legal representatives under this
Agreement, other than those obligations accrued hereunder at the date of the
Executive's death, and except as provided in this Section 7(a). The Executive's
family shall be entitled to receive benefits at
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least equal to the most favorable benefits provided by the Corporation to
surviving families of executives of the Corporation under such plans,
programs, and policies relating to family death benefits, if any, as in
effect at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Executive and/or the Executive's
family, as in effect on the date of the Executive's death with respect to
other key executives and their families.
(b) DISABILITY. If, during the Employment Period, the Executive's
employment is terminated by reason of the Executive's Disability (as defined in
Section 6(a)), the Executive shall be entitled after the Disability Effective
Date to receive disability and other benefits at least equal to the most
favorable of those provided by the Corporation to disabled employees and/or
their families in accordance with such plans, programs and policies relating to
disability, if any, as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to the Executive
and/or the Executive's family, as in effect at any time thereafter with respect
to other key executives and their families.
(c) CAUSE. If, during the Employment Period, the Executive's employment
shall be terminated for Cause (as defined in Section 6(b)), the Corporation
shall pay the Executive his full Base Salary through the Date of Termination at
the rate in
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effect at the time Notice of Termination is given and shall have no further
obligations to the Executive under this Agreement.
(d) GOOD REASON; OTHER THAN FOR CAUSE OR BY REASON OF DEATH OR
DISABILITY. If, during the Employment Period, the Executive's employment is
terminated other than for Cause or by reason of Death or Disability, or the
employment of the Executive shall be terminated by the Executive for Good
Reason:
(i) the Corporation shall pay to the Executive in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the
following amounts:
(A) to the extent not theretofore paid, the Executive's Base
Salary through the Date of Termination at the rate in effect on
the Date of Termination or, if higher, at the highest rate in
effect at any time within the 90-day period preceding the
Effective Date; and
(B) the product of (x) the Annual Bonus paid to the Executive for
the last Fiscal Year ending prior to the Date of Termination and
(y) a fraction the numerator of which is the number of days in
the period extending from the beginning of the Fiscal Year in
which the Date of Termination
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occurs up to the Date of Termination and the denominator
of which is 365; and
(C) except as otherwise provided under the Corporation's
Supplemental Executive Investment Plan, any undistributed amounts
relating to compensation previously deferred by the Executive;
and
(D) the product of (x) the Executive's Base Salary at the
monthly rate in effect on the Date of Termination or, if higher,
at the highest rate in effect at any time within the 90-day
period preceding the Effective Date and (y) the number of months
in the period extending from the Termination Date to the end of
the Employment Period (hereinafter the "Remainder of the
Employment Period"); and
(E) the product of (x) one-twelfth of the greater of (1) the
greatest annual bonus paid to the Executive for any of the last
five Fiscal Years ending prior to the Date of Termination or (2)
the highest midpoint of the Executive's bonus range for any of
such Fiscal Years and (y) the number of months in the Remainder
of the Employment Period;
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(ii) the Corporation shall continue benefits for the Remainder of the
Employment Period to the Executive and/or the Executive's family at
least equal to those which would have been provided to them in
accordance with the plans, programs and policies described in Sections
5(d) and 5(f) of this Agreement if the Executive's employment had not
been terminated, including health insurance, life insurance and use of
a leased car, if and as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to the
Executive, as in effect at any time thereafter with respect to other
key executives and their families; provided, however, that any amounts
paid or benefits provided under this Section shall not duplicate any
similar benefits earned by the Executive as of result of employment by
another employer;
(iii) the Executive shall be entitled to receive retirement benefits
under the change-of-control provisions of the Corporation's Executive
Retirement Plan; and
(iv) the Corporation shall provide for standard outplacement
services by any one qualified outplacement
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agency selected by the Executive and reasonably satisfactory to the
Corporation.
Anything in this Agreement to the contrary notwithstanding, immediately
prior to the Effective Date, the Corporation shall transfer funds to the
Thomas & Betts Agreement & Plans Trust in an amount which it shall in good
faith estimate to be sufficient to make the payments that would be required
under this Section 7(d) and under Section 11 if the Executive's employment
were terminated under Section 7(d) immediately following the Effective Date.
If the Corporation subsequently determines that the amount so transferred is
inadequate, it shall transfer additional funds to said Trust in order to
provide sufficient funds to make such payments.
In addition, at any time prior to the Effective Date, upon the request
of the Executive, the Corporation may offer to extend the exercise period of
any stock option previously granted to the Executive by the Corporation. If
so requested, the Corporation may offer the Executive the opportunity to
extend until the expiration date the exercise period of any or all of such
stock options in the event that the Executive's employment is terminated
during the Employment Period under the circumstances described in Section
7(d). If the Corporation makes such an offer, it shall not be effective
unless accepted by the Executive.
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8. NO DUTY TO MITIGATE. In no event shall the Executive be obligated
to seek other employment or take any other action by way of mitigation of the
amounts payable to the Executive under any of the provisions of this
Agreement, nor shall the amount of any payment hereunder be reduced, except
as otherwise specifically provided herein, by any compensation earned by the
Executive as a result of employment by another employer.
9. NON-EXCLUSIVITY OF RIGHTS. Nothing in this Agreement shall prevent
or limit the Executive's continuing or future participation in any benefit,
bonus, incentive or other plan or program provided by the Corporation or any
of its affiliated companies and for which the Executive may qualify, nor
shall anything herein limit or otherwise affect such rights as the Executive
may have under any stock option or other agreements with the Corporation or
any of its affiliated companies. Amounts which are vested benefits or which
the Executive is otherwise entitled to receive under any plan or program of
the Corporation or any of its affiliated companies at or subsequent to the
Date of Termination shall be payable in accordance with such plan or program.
Anything herein to the contrary notwithstanding, if the Executive becomes
entitled to payments pursuant to paragraph 7(d) hereof, such Executive agrees
to waive payments under any severance plan or program of the Corporation.
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10. FULL SETTLEMENT. The Corporation's obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right
which the Corporation may have against the Executive or others. The
Corporation agrees to pay, to the full extent permitted by law, all legal
fees and expenses which the Executive may reasonably incur as a result of any
contest (regardless of the outcome thereof) by the Corporation or others of
the validity or enforceability of, or liability under, any provision of this
Agreement (including Section 11) or any guarantee of performance thereof,
plus in each case interest at the applicable Federal rate provided for in
Section 7872(f)(2) of the Internal Revenue Code (the "Code").
11. TAX PAYMENT. (a) WITHHOLDINGS AND DEDUCTIONS. Any payment made
pursuant to Section 7(d) shall be paid, less standard withholdings and other
deductions authorized by Executive or required by law.
(b) GROSS-UP FOR CERTAIN TAXES. All determinations required to be made
under this Section 11 shall be made by KPMG Peat Marwick LLP, or other
comparable national accounting firm selected in good faith by the Corporation
(the "Accounting Firm") which shall provide detailed supporting calculations
both to the
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Corporation and the Executive within 15 (fifteen) business days of the Date
of Termination or such earlier time as is requested by the Corporation.
If it is determined by the Accounting Firm that any benefit received or
deemed received by the Executive from the Corporation pursuant to this
Agreement or otherwise (collectively, the "Payments") is or will become
subject to any excise tax under Section 4999 of the Code or any similar tax
payable under any United States federal, state, local or other law (such
excise tax and all such similar taxes collectively, "Excise Taxes"), then the
Corporation shall, immediately after such determination, pay the Executive an
amount ("the Gross-up Payment") such that the net amount retained by the
Executive, after the deduction of any Excise Taxes (including any applicable
interest and penalties) on the Payments, and any federal, state, and local
income tax, and any Excise Tax (including any applicable interest and
penalties on all such taxes), upon such Gross-up Payment, shall be equal to
the amount of the Payments in the absence of the imposition of such Excise
Tax and the Gross-up Payment. For purposes of determining the amount of the
Gross-up Payment, the Executive shall be deemed to pay income taxes at the
highest marginal rates of the applicable federal, state and local income
taxation in the calendar year in which the Gross-up Payment is to be made.
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(c) DETERMINATION BY THE EXECUTIVE. If at any time following
determination of the Gross-up Payment by the Accounting Firm, the Executive
disputes the amount of the Gross-up Payment, the Executive may elect to
demand payment of the amount which the Executive, in accordance with an
opinion of counsel to the Executive ("Executive Counsel Opinion"), determines
to be the Gross-up Payment. Any such demand by the Executive shall be made
by delivery to the Corporation of a written notice which specifies the
Gross-up Payment determined by the Executive and an Executive Counsel Opinion
regarding such Gross-up Payment (such written notice and opinion
collectively, the "Executive's Determination"). Within 14 days after
delivery of the Executive's Determination to the Corporation, the Corporation
shall either (i) pay the Executive the Gross-up Payment set forth in the
Executive's Determination (less the portion of such amount, if any,
previously paid to the Executive by the Corporation) or (ii) deliver to the
Executive a certificate specifying the Gross-up Payment determined by the
Accounting Firm, together with an opinion of the Corporation's counsel
("Corporation Counsel Opinion"), and pay the Executive the Gross-up Payment
specified in such certificate. If for any reason the Corporation fails to
comply with clause (ii) of the preceding sentence, the Gross-up Payment
specified in the Executive's Determination shall be controlling for all
purposes.
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(d) OPINION OF COUNSEL. "Executive Counsel Opinion" means a legal
opinion of a nationally recognized executive compensation counsel that there
is a reasonable basis to support a conclusion that the Gross-up Payment
determined by the Executive has been calculated in accordance with this
Section and applicable law. "Corporation Counsel Opinion" means a legal
opinion of a nationally recognized executive compensation counsel that (i)
there is a reasonable basis to support a conclusion that the Gross-up Payment
set forth by the Accounting Firm has been calculated in accordance with this
Section and applicable law, and (ii) there is no reasonable basis for the
calculation of the Gross-up Payment determined by the Executive.
(e) ADDITIONAL GROSS-UP AMOUNTS. If, despite the initial conclusion of
the Corporation and/or the Executive that certain Payments are neither
subject to Excise Taxes nor to be counted in determining whether other
Payments are subject to Excise Taxes (any such item, a "Non-Parachute Item"),
it is later determined (pursuant to the subsequently-enacted provisions of
the Code, final regulations or published rulings of the IRS, final judgment
of a court of competent jurisdiction or the Accounting Firm) that any of the
Non-Parachute Items are subject to Excise Taxes, or are to be counted in
determining whether any Payments are subject to Excise Taxes, with the result
that the amount of Excise Taxes payable by the Executive is greater than the
amount determined by the Corporation or the Executive pursuant to this
Section, as
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applicable, then the Corporation shall pay the Executive an additional
Gross-up Payment in order to compensate the Executive for (i) such additional
Excise Taxes, any interest, fines, penalties, expenses or other costs
incurred by the Executive as a result of having taken a position in
accordance with a determination made pursuant to Section 11(b, and (ii) any
federal, state, and local income tax, and any Excise Tax upon such additional
Gross-up Payments, calculated in the manner described in Section 11(b).
(f) AMOUNT INCREASED OR CONTESTED. The Executive shall notify the
Corporation in writing of any claim by the IRS or other taxing authority
that, if successful, would require the payment by the Corporation of a
Gross-up Payment. Such notice shall include the nature of such claim and the
date on which such claim is due to be paid. The Executive shall give such
notice as soon as practicable, but no later than 10 business days, after the
Executive first obtains actual knowledge of such claim; provided, however,
that any failure to give or delay in giving such notice shall affect the
Corporation's obligations under this Section only if and to the extent that
such failure results in actual prejudice to the Corporation. The Executive
shall not pay such claim less than 30 days after the Executive gives such
notice to the Corporation (or, if sooner, the date on which payment of such
claim is due). If the Corporation notifies the
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Executive in writing before the expiration of such period that it desires to
contest such claim, the Executive shall:
(i) give the Corporation any information that it reasonably requests
relating to such claim,
(ii) take such action in connection with contesting such claim as the
Corporation reasonably requests in writing from time to time,
including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the
Corporation,
(iii) cooperate with the Corporation in good faith to contest such
claim, and
(iv) permit the Corporation to participate in any proceedings
relating to such claim;
provided, however, that the Corporation shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax, including
related interest and penalties, imposed as a result of such representation
and payment of costs and expenses. Without limiting the foregoing, the
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Corporation shall control all proceedings in connection with such contest
and, at its sole option, may pursue or forego any and all administrative
appeals, proceedings, hearings, and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the
Executive to pay the tax claimed and sue for a refund or contest the claim in
any permissible manner. The Executive agrees to prosecute such contest to a
determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Corporation shall
determine; provided, however, that if the Corporation directs the Executive
to pay such claim and sue for a refund, the Corporation shall advance the
amount of such payment to the Executive, on an interest-free basis and shall
indemnify the Executive, on an after-tax basis, for any Excise Tax or income
tax, including related interest or penalties, imposed with respect to such
advance; and further provided that any extension of the statute of
limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due is
limited solely to such contested amount. The Corporation's control of the
contest shall be limited to issues with respect to which a Gross-up Payment
would be payable. The Executive shall be entitled to settle or contest, as
the case may be, any other issue raised by the IRS or other taxing authority.
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(g) REFUNDS. If, after the receipt by the Executive of an amount
advanced by the Corporation pursuant to Section 11(f), the Executive becomes
entitled to receive any refund with respect to such claim, the Executive
shall (subject to the Corporation's complying with the requirements of
Section 11(f)) promptly pay the Corporation the amount of such refund
(together with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by the Executive of an amount advanced by
the Corporation pursuant to Section 11(f), a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and
the Corporation does not notify the Executive in writing of its intent to
contest such determination before the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required
to be repaid and the amount of such advance shall offset, to the extent
thereof, the amount of Gross-up Payment required to be paid. Any contest of
a denial of refund shall be controlled by Section 11(f).
12. CONFIDENTIAL INFORMATION. The Executive shall hold in a fiduciary
capacity for the benefit of the Corporation all secret or confidential
information, knowledge or data relating to the Corporation or any of its
affiliated companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment by the
Corporation or any of its affiliated companies and which shall not be public
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knowledge (other than by acts by the Executive or his representatives in
violation of this Agreement). After termination of the Executive's
employment with the Corporation, the Executive shall not, without the prior
written consent of the Corporation, communicate or divulge any such
information, knowledge or data to anyone other than the Corporation and those
designated by it. In no event shall an asserted violation of the provisions
of this Section 12 constitute a basis for deferring or withholding any
amounts otherwise payable to the Executive under this Agreement.
13. SUCCESSORS. (a) This Agreement is personal to the Executive and
without the prior written consent of the Corporation shall not be assignable
by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable
by the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon the
Corporation and its successors.
(c) The Corporation will require any Successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation to
expressly assume and agree to perform this Agreement in the same manner and
to the same extent
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that the Corporation would be required to perform it if no such succession
had taken place. As used in this Agreement, "Corporation" shall mean the
Corporation as hereinbefore defined and any Successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise.
14. MISCELLANEOUS. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Tennessee without
reference to principles of conflict of laws. The captions of this Agreement
are not part of the provisions hereof and shall have no force or effect.
This Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors and
legal representatives.
(b) All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, or by a courier
service such as Federal Express addressed as follows:
IF TO THE EXECUTIVE:
name/address
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IF TO THE CORPORATION:
8155 T&B Boulevard
Memphis, TN 38125
Attention: Vice President-General Counsel,
or to the then current address of the Corporation's principal executive
offices, or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications shall be
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Corporation may withhold from any amounts payable under this
Agreement such federal, state, or local taxes as shall be required to be
withheld pursuant to any applicable law or regulation.
(e) This Agreement contains the entire understanding between the
Corporation and the Executive with respect to the subject matter hereof and
supersedes and nullifies any previous change-of-control employment agreement
between the parties.
(f) The Executive and the Corporation acknowledge that the employment
of the Executive by the Corporation is "at will," and,
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prior to the Effective Date, may be terminated by either the Executive or the
Corporation at any time. Upon a termination of the Executive's employment or
upon the Executive's ceasing to be an officer of the Corporation, in each
case, prior to the Effective Date, there shall be no further rights under
this Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set his or her hand and,
pursuant to the authorization from its Board of Directors, the Corporation has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
---------------------------------------
NAME
THOMAS & BETTS CORPORATION
By
-------------------------------------
Clyde R. Moore
President and Chief Executive Officer
Attest:
-----------------------------------
Janice H. Way, Secretary
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