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MANAGEMENT CONTINUITY AGREEMENT
MANAGEMENT CONTINUITY AGREEMENT by and between ▇▇▇▇▇▇▇ Purina Company
("▇▇▇▇▇▇▇"), a Missouri corporation, and ______ (the "Executive").
WITNESSETH:
WHEREAS, the Board of Directors, as defined herein, has authorized ▇▇▇▇▇▇▇ to
enter into a Management Continuity Agreement (the "Agreement") with certain key
executives of ▇▇▇▇▇▇▇; and
WHEREAS, the Board of Directors believes it is imperative, in the event of an
attempted Change in Control, as defined herein, that certain key executives
continue employment with ▇▇▇▇▇▇▇ or one of its Affiliates, and that ▇▇▇▇▇▇▇ be
able to receive and rely upon the advice of such executives on the best
interests of ▇▇▇▇▇▇▇ and its shareholders, without concern that the executives
may be distracted by uncertainties as to their own position or security; and
WHEREAS, the Executive is a key executive of ▇▇▇▇▇▇▇ and has been selected by
the Board of Directors to be offered this Agreement; and
WHEREAS, the Board of Directors believes that the payments which may be made
under this Agreement constitute additional reasonable compensation for services
to be rendered by the Executive in connection with a Change in Control;
NOW, THEREFORE, for and in consideration of the premises and other good and
valuable consideration, ▇▇▇▇▇▇▇ and the Executive agree as follows:
ARTICLE 1. DEFINITIONS: For purposes of this Agreement, the following terms
shall have the meanings set forth below:
a. AFFILIATE: An Affiliate shall mean any Person who, directly or indirectly
or through one or more intermediaries, Controls another Person, is
Controlled by another Person, or is under common Control with another
Person.
b. BASE AMOUNT: The Base Amount shall mean the "base amount" as defined and
determined pursuant to Section 280G of the Code applicable at the time of
the Executive's Qualifying Termination.
c. BASE COMPENSATION: The Base Compensation shall mean the sum of:
(i) the Executive's monthly gross salary, whether paid or deferred, for
the last full month preceding the Executive's Qualifying Termination or
for the last full month preceding the Change in Control, whichever is
greater;
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(ii) a one (1) month portion (as if earned ratably over the relevant
period) of the Executive's most recent annual (or, if applicable, pro rata
portion of the annual) bonus, whether paid or deferred, preceding the
Executive's Qualifying Termination or the Change in Control, whichever is
greater; and
(iii) the greater of the following:
(A) a one (1) month portion (as if earned ratably over the relevant
period) of the Executive's bonus award (base and peer group award,
if applicable) most recently made at the end of the full term of an
Incentive Plan prior to a Change in Control, whether paid or
deferred;
or
(B) a one (1) month portion (as if earned ratably over the relevant
period) of any amounts attributable to the Executive under all of
the Incentive Plans in effect at the time of the Change in Control,
calculated through the last full month preceding the Change in
Control or, if applicable, preceding the Executive's Qualifying
Termination, whichever is greater.
d. BENEFICIAL OWNERSHIP: Beneficial Ownership shall mean "beneficial
ownership" as defined in Rule 13d-3 promulgated under Section 13(d) of the
Exchange Act.
e. BOARD OF DIRECTORS: The Board of Directors shall mean the Board of
Directors of ▇▇▇▇▇▇▇.
f. BUYER: A Person which, alone or with its Affiliates, purchases the
business or businesses of ▇▇▇▇▇▇▇ and its Affiliates in a transaction or
transactions described in Article 2(c).
g. CHANGE IN CONTROL: A Change in Control shall mean an occurrence set forth
in Article 2.
h. CODE: The Code shall mean the Internal Revenue Code of 1986, as amended.
i. COMMON STOCK: Common Stock shall mean the $.10 par value common stock of
▇▇▇▇▇▇▇, and such other ▇▇▇▇▇▇▇ voting stock that may be issued, prior to
a Change in Control, in lieu of, or in addition to, the Common Stock, as a
result of (i) a merger or consolidation of ▇▇▇▇▇▇▇, (ii) the creation of a
class or classes of tracking stock, or (iii) the reclassification of any
of the foregoing.
j. CONTINUING DIRECTOR: A Continuing Director shall mean a member of the
Board of Directors as of the date hereof, and any other director who was
appointed or nominated for election to the Board of Directors by a
majority of the Continuing Directors then in office.
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k. CONTROL: Control (including the terms "controlling", "controlled by" and
"under common control with") shall mean the possession of a power,
directly or indirectly, whether through ownership of securities, by
contract or otherwise:
(i) to elect a majority of the Board of Directors of a Person; or
(ii) to direct the business, management and policies of a Person or direct
the sale of a substantial portion of its assets.
l. DISABILITY: A Disability shall mean a condition where the Executive
suffers a complete inability to perform the Executive's work assignments
because of injury or sickness, and such inability is expected to continue
indefinitely. To determine Disability, ▇▇▇▇▇▇▇ shall rely on a
determination with respect to disability of the Executive made under the
Purina Benefit Association Long Term Disability Plan or any successor
disability plan. If no such determination has been made within seven (7)
months after the Executive's last day worked, or if the Executive is not
enrolled in any such Long Term Disability Plan, the determination shall be
made by a licensed physician jointly selected by ▇▇▇▇▇▇▇ and the
Executive. Fees and expenses of any physician, and all costs of
examinations of the Executive, shall be paid by ▇▇▇▇▇▇▇.
m. DISCOUNT RATE: The Discount Rate shall mean the "applicable interest rate"
(and the mortality tables, if applicable) prescribed under Section
417(e)(3) of the Code at the time of the Executive's Qualifying
Termination.
n. EXCHANGE ACT: The Exchange Act shall mean the Securities Exchange Act of
1934, as amended.
o. GROUP: A Group shall mean "group" as defined in Section 13(d)(3) of the
Exchange Act.
p. INCENTIVE PLAN: An Incentive Plan shall mean any cash bonus plan with a
term of more than two (2) years but less than five (5) years, including
the 1996, 1998 and 2000 Leveraged Incentive Plans (whether or not subject
to the terms of the Executive Incentive Compensation Plan) and all similar
plans adopted during the term of this Agreement.
q. PAYMENT PERIOD: The Payment Period shall mean the period commencing with
the first day of the month following the month in which a Qualifying
Termination occurs and continuing:
(i) for twenty-four (24) months if the Qualifying Termination occurs at
any time during the first year following the Change in Control; or
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(ii) for twelve (12) months if the Qualifying Termination occurs at any
time during the second year following the Change in Control.
r. PERSON: Person shall mean any natural person, firm, individual, company,
corporation, partnership, joint venture, joint stock company, limited
liability company, business trust, trust, association or any other
business organization or entity, whether incorporated or unincorporated,
or any division thereof.
s. QUALIFYING TERMINATION: A Qualifying Termination shall mean the
Executive's termination of employment, within two (2) years after a Change
in Control, from ▇▇▇▇▇▇▇, a Buyer or an Affiliate or a Successor of the
foregoing; provided that, a Qualifying Termination shall not be deemed to
occur on account of:
(A) the Executive's transfer of employment at any time during the term
of this Agreement between any two Persons comprised of ▇▇▇▇▇▇▇ or
its Successor, and any of their Affiliates, provided that, upon such
a transfer after a Change in Control, the Executive has
Substantially the Same Employment after such transfer as immediately
prior to the Change in Control; or
(B) the Executive's being employed by a Buyer or any Affiliate or
Successor of such Buyer, in connection with a Change in Control
described in Article 2(c), provided that, during the term of this
Agreement, the Executive has Substantially the Same Employment as
immediately prior to the Change in Control; or
(C) the Executive's death; or
(D) after a Change in Control, the Executive's voluntary termination of
employment with ▇▇▇▇▇▇▇, a Buyer or an Affiliate or Successor of the
foregoing, if the Executive has Substantially the Same Employment at
the time of such voluntary termination as immediately prior to the
Change in Control.
t. RETIREMENT PLAN: The Retirement Plan shall mean the ▇▇▇▇▇▇▇ Purina
Retirement Plan, as amended, or any successor retirement plan adopted by
▇▇▇▇▇▇▇.
u. SPIN-OFF: A Spin-off shall mean a spin-off, reverse spin-off or similar
type of transaction, including a management-led leveraged buyout,
resulting in the disposition to ▇▇▇▇▇▇▇'▇ shareholders, or to a
management-led leveraged buyout group, of all or substantially all of the
stock and/or assets of any business conducted by ▇▇▇▇▇▇▇ and/or its
Affiliates.
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v. SUBSTANTIALLY THE SAME EMPLOYMENT: Substantially the Same Employment shall
mean employment where there is, after a Change in Control compared to
immediately prior to a Change in Control:
(i) no reduction in the Executive's base salary and no less than
such annual increases in the Executive's base salary as were
customary with respect to the Executive prior to the Change in
Control; and
(ii) no reduction in the annual bonus award opportunity below the
performance target applicable to the Executive, for both
personal and company or business unit performance, unless a
substantially equivalent arrangement (embodied in an ongoing
substitute or alternative annual bonus award plan) has been
made with respect to such annual bonus award, and such
arrangement provides benefits not materially less favorable to
the Executive (both in terms of the amount of benefits
provided and the level of the Executive's participation
relative to other participants); and
(iii) no substantial reduction in Executive's participation in any
executive incentive compensation plans in which Executive
participated immediately before the Change in Control,
including but not limited to the Executive Incentive
Compensation Plan, any Incentive Plan, and the Incentive Stock
Plan (or any substitute or successor plans adopted prior to
the Change in Control), unless a substantially equivalent
arrangement (embodied in an ongoing substitute or alternative
plan) has been made with respect to such executive incentive
compensation plans, and such arrangement provides benefits not
materially less favorable to the Executive (both in terms of
the amount of benefits provided and the level of the
Executive's participation relative to other participants); and
(iv) no substantial reduction in employee pension benefits
(including plans qualified under Section 401(a) of the Code
and non-qualified plans) and welfare and fringe benefits
applicable to the Executive, so that the benefit programs for
which the Executive is eligible are, in the aggregate,
substantially equivalent; and
(v) no reduction of a substantial nature in the Executive's duties
or responsibilities, or assignment of new duties inconsistent
with the Executive's skills, education and experience; and
(vi) no substantial reduction in the Executive's access to
administrative support services; and
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(vii) no requirement that any of the Executive's offices be located
more than fifty (50) miles from the location of such offices
immediately prior to a Change in Control; and
(viii) no increase in the Executive's required business travel away
from his or her office that would be substantially
inconsistent with the Executive's business travel obligations
immediately prior to a Change in Control.
w. SUCCESSOR: A Successor shall mean (i) the continuing, surviving or
successor Person which is created, or remains in existence, upon the
merger or consolidation of two Persons; or (ii) a Person which otherwise
succeeds (by operation of law, contract or otherwise) to the rights,
duties or interests of another Person.
x. SUPPLEMENTAL PLAN: The Supplemental Plan shall mean the ▇▇▇▇▇▇▇ Purina
Supplemental Retirement Plan, as amended, or any successor supplemental
retirement plan adopted by ▇▇▇▇▇▇▇.
ARTICLE 2. CHANGE IN CONTROL: A Change in Control will occur if there is:
a. Such a change in the membership of the Board of Directors that
Continuing Directors shall have ceased (for any reason) to
constitute at least a majority of the Board of Directors; or
b. An acquisition by any Person or Group, or by a Person and its
Affiliates or by a Group and Affiliates of members of such Group, of
the Beneficial Ownership of fifty percent (50%) or more of the
then-outstanding Common Stock of ▇▇▇▇▇▇▇ (other than acquisitions by
▇▇▇▇▇▇▇, a ▇▇▇▇▇▇▇ Affiliate, or any trustee or other fiduciary
holding ▇▇▇▇▇▇▇ Common Stock pursuant to the terms of any ▇▇▇▇▇▇▇
benefit plan); or
c. Either of the following: (i) a sale of all or substantially all of
the assets of ▇▇▇▇▇▇▇ in a transaction subject to the provisions of
Section 351.400 Revised Statutes of Missouri; or (ii) a sale or
other disposition to a Person or a Group, or to a Person and its
Affiliates or to a Group and Affiliates of members of such Group,
(excluding a sale or disposition to an Affiliate or Affiliates of
▇▇▇▇▇▇▇), of all or substantially all of the assets of those
businesses of ▇▇▇▇▇▇▇ and its Affiliates which, in the aggregate,
accounted for (as of the end of the fiscal quarter ending coincident
with or immediately preceding such sale) all or substantially all of
▇▇▇▇▇▇▇'▇ operating profit; or
d. A merger, share exchange, reorganization or consolidation of ▇▇▇▇▇▇▇
with any other Person other than an Affiliate of ▇▇▇▇▇▇▇ (a
"Business Combination"), unless the voting power of the Common Stock
outstanding
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immediately before such Business Combination continues to represent,
immediately following such Business Combination (either by remaining
outstanding or by being converted into voting securities of the
Person surviving after such Business Combination or its Affiliate),
more than 50% of the combined voting power of the then-outstanding
voting securities of such surviving Person (or its Affiliate)
including (if applicable) ▇▇▇▇▇▇▇; or
e. A finding by a majority of the Continuing Directors that a sale,
disposition, merger or other transaction or event designated by such
Continuing Directors in their sole discretion shall, under this
Agreement, constitute a Change in Control with respect to the
Executive.
Notwithstanding the foregoing, in no event shall a Spin-off be deemed to
constitute a Change in Control.
ARTICLE 3. OPERATION OF AGREEMENT: This Agreement shall not create any
obligation on the part of ▇▇▇▇▇▇▇ or its Affiliates, or the Executive, to
continue the Executive's employment relationship. Anything in this Agreement to
the contrary notwithstanding, the Executive shall not be entitled to Severance
Benefits, as defined below, under this Agreement unless and until there has been
a Change in Control and the Executive has had a Qualifying Termination. Except
as hereinafter provided, this Agreement shall not affect any other benefit
program (as such programs may be amended) applicable to the Executive; provided,
that, by execution of this Agreement, the Executive hereby waives any and all
claims to benefits under any termination or severance plan or similar severance
arrangement offered by ▇▇▇▇▇▇▇ or its Affiliates to all or some of their
employees during the term of this Agreement, that would otherwise be payable to
the Executive on account of, or coincident with, a Change in Control and
termination of employment.
ARTICLE 4. SEVERANCE BENEFITS: If the Executive remains in the employ of ▇▇▇▇▇▇▇
or one of its Affiliates until a Change in Control has occurred, then upon the
Executive's Qualifying Termination within two (2) years after a Change in
Control, the Executive shall be entitled to the following benefits ("Severance
Benefits"), subject to withholding of any federal, state or local taxes which,
in the opinion of counsel for the payor of the Severance Benefits, are required
to be withheld, and further subject to Article 5 of this Agreement:
a. Payment in a lump sum in cash, within sixty (60) days of the Executive's
Qualifying Termination, of the present value, calculated using the
Discount Rate, of an income stream equal to the Executive's Base
Compensation as if it were to be paid each month throughout the applicable
Payment Period; and
b. Continuation during the Payment Period of life, health, accident,
disability and fringe benefits no less favorable than those provided to
the Executive under life, health,
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accident, disability and fringe benefit plans and programs in effect
immediately prior to the Change in Control (including, but not limited to,
the Partnership Life Plan, Split Dollar Second to Die Program, Executive
Life Plan, Comprehensive Health Plan, Executive Health Plan, Voluntary
Personal Accident Plan, Long Term Disability Plan, Executive Long Term
Disability Plan, Financial Planning Program, ▇▇▇▇▇▇ Online Program, Group
Personal Excess Liability Plan, Corporate Car Allowance Program and the
Corporate Officer Car Program), subject to all terms and conditions of
such plans immediately prior to such Change in Control including, but not
limited to, provisions regarding the extent and duration of spouse and
dependent coverage, and subject to payment of premiums, if any, charged at
rates no greater than those under the rate structure in effect immediately
prior to the Change in Control; and
c. Payment in a lump sum in cash, within sixty (60) days of the Executive's
Qualifying Termination, of the present value (calculated as of the date of
the Qualifying Termination using the Discount Rate) of an annuity amount
determined as the difference between (A) and (B), where (A) is the dollar
value of the actual benefits (payable in the form of a single life annuity
with 60 monthly payments guaranteed), if any, to which the Executive, or
the Executive's beneficiary, is entitled under the Retirement Plan and the
Supplemental Plan (excluding amounts accrued in the PensionPlus Match
Account in the Retirement Plan) as of the Qualifying Termination Date; and
where (B) is the dollar value of the benefits (payable in the form of a
single life annuity with 60 monthly payments guaranteed), if any, under
the Retirement Plan and the Supplemental Plan (excluding amounts accrued
in the aforesaid PensionPlus Match Account) which the Executive, or the
Executive's beneficiary, would have been entitled to receive as of the end
of the applicable Payment Period if the Executive had remained employed by
▇▇▇▇▇▇▇ or one of its Affiliates during the applicable Payment Period at a
compensation level equal to the Executive's Base Compensation. In
calculating the lump sum payable as of the date of the Qualifying
Termination, this annuity amount (determined as the difference between (A)
and (B) above) is assumed to be payable to the Executive in the form of a
single life annuity with 60 monthly payments guaranteed commencing on the
date of the Qualifying Termination; and
d. If the Executive, at the time of the Qualifying Termination, is at least
48 years old but not yet age 55, monthly payments equal in amount to those
the Executive would be entitled to receive pursuant to the Retirement Plan
and the Supplemental Plan (excluding amounts accrued in the PensionPlus
Match Account) if paid in the form of a single life annuity. The payments
shall be calculated as if the Executive were age 55 but with years of
service equal to the Executive's "credited service" (as defined in the
Retirement Plan) as of the Qualifying Termination. Such payments shall
commence upon the first day of the month following the later to occur of
the Qualifying Termination or the attainment of age 50, and shall be paid
to the Executive (or his or her beneficiary designated under Article 6)
until the date the Executive attains or would have attained age 55.
Alternatively, if the Executive is
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eligible to receive benefits from the Retirement Plan (other than the
PensionPlus Match Account benefits) in the form of a lump sum, the
Executive may elect to receive a lump sum equal to the present value,
calculated using the Discount Rate, of the monthly benefits provided for
in this Article 4(d).
e. During the Payment Period, the Executive may request in writing, and the
Company shall at its expense engage within a reasonable time following
such written request, an outplacement counseling service of national
reputation to assist the Executive in obtaining employment. The Executive
shall be entitled to outplacement services which are customary for someone
in the Executive's position.
ARTICLE 5. EXCISE TAXES AND GROSS-UP PAYMENT
a. Anything in this Agreement to the contrary notwithstanding, and except as
set forth below, in the event it shall be determined under the provisions
of Article 5(b) that any payment or distribution by ▇▇▇▇▇▇▇, a Buyer, or
any Successor or Affiliate of the foregoing ("Payor"), 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,
including without limitation any other plan, arrangement or agreement with
such Payor, and including a determination (i) with regard to the value of
any accelerated vesting of stock awards or other forms of compensation, if
such vesting occurs as a result of a Change in Control; but (ii) without
regard to any additional payments required under this Article 5) (a
"Payment") would be subject to the excise tax imposed by Section 4999 of
the Code, or any interest or penalties are incurred by the Executive with
respect to such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the
"Excise Tax"), then the Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment"). This Gross-Up Payment shall be
equal to an amount such that, after payment by the Executive of all taxes
(including any interest or penalties imposed with respect to such taxes),
including, without limitation, (i) any income and FICA taxes (and any
interest and penalties imposed with respect thereto) and (ii) Excise Tax
imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
▇▇▇▇▇▇▇'▇ obligation to make Gross-Up Payments under this Article 5(a)
shall not be conditioned upon the Executive's Qualifying Termination of
Employment. For purposes of determining the amount of the Gross-Up
Payment, the Executive shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation in the calendar year in
which the Gross-Up Payment is to be made, and state and local income taxes
at the highest marginal rate of taxation in either the state and locality
of the Executive's place of employment at the time of the Change in
Control or in the state and locality of residence at the time or times of
payment, as applicable, net of the maximum reduction in federal income
taxes that could be obtained from the deduction of the state and local
taxes.
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Notwithstanding the foregoing provisions of this Article 5(a), if it shall
be determined that the Executive is entitled to a Gross-Up Payment, but
that the Payments do not exceed 110 percent of the greatest amount (the
"Reduced Amount") that could be paid to the Executive such that the
receipt of Payments would not give rise to any Excise Tax, then no
Gross-Up Payment shall be made to the Executive, and the Payments, in the
aggregate, shall be reduced to the Reduced Amount. The reduction of the
amounts payable hereunder, if applicable, shall be made by first reducing
the payments under Article 4(a) hereof, and in any event shall be made in
such a manner as to maximize the value of all Payments actually made to
the Executive. For purposes of reducing the payments to the Reduced
Amount, only amounts payable under this Agreement (and no other Payments)
shall be reduced. If the reduction of amounts payable under this Agreement
would not result in the payment of the Reduced Amount, no amounts payable
under this Agreement shall be reduced.
▇. ▇▇▇▇▇▇▇ shall provide written notice to the Executive with respect to each
Payment promptly after it occurs, setting forth the nature of such
Payment. Subject to the provisions of Article 5(c), all determinations
required to be made under this Article 5, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be
made by a nationally recognized certified public accounting firm as may be
designated by the Executive (the "Accounting Firm"). Within 15 days after
the Accounting Firm has been notified by the Executive or ▇▇▇▇▇▇▇ that a
Payment has occurred, the Accounting Firm shall provide detailed
supporting calculations with respect to such Payment both to ▇▇▇▇▇▇▇ and
the Executive. All fees and expenses of the Accounting Firm shall be borne
solely by ▇▇▇▇▇▇▇. Any ▇▇▇▇▇-Up Payment, as determined pursuant to this
Article 5, shall be paid by ▇▇▇▇▇▇▇ to the Executive within five days of
the receipt of the Accounting Firm's determination. Any determination by
the Accounting Firm shall be binding upon ▇▇▇▇▇▇▇ and the Executive. As a
result of any uncertainty in the application of Section 4999 of the Code
at the time of the initial determination by the Accounting Firm hereunder,
it is possible that Gross-Up Payments which will not have been made by
▇▇▇▇▇▇▇ should have been made ("Underpayment"), consistent with the
calculations required to be made hereunder. In the event that ▇▇▇▇▇▇▇
exhausts its remedies pursuant to Article 5(c) and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting
Firm shall determine the amount of the Underpayment that has occurred and
any such Underpayment shall be promptly paid by ▇▇▇▇▇▇▇ to or for the
benefit of the Executive.
c. The Executive shall notify ▇▇▇▇▇▇▇ in writing of any written communication
from the Internal Revenue Service or other taxing authority concerning the
Gross-Up Payment or other matters arising under this Agreement. Such
notification shall be given as soon as practicable but no later than ten
business days after the Executive receives such written communication and
shall apprise ▇▇▇▇▇▇▇ of the content of such communication. Failure to
give timely notice shall not be deemed to prejudice the Executive's rights
to Gross-Up Payment and rights of indemnity hereunder.
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The Executive shall not pay any claim pursuant to such written
communication prior to the expiration of the 30-day period following the
date on which the Executive gives such notice to ▇▇▇▇▇▇▇ (or such shorter
period ending on the date that any payment of taxes with respect to such
claim is due). If ▇▇▇▇▇▇▇ notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the
Executive shall (i) give ▇▇▇▇▇▇▇ any information reasonably requested by
▇▇▇▇▇▇▇ relating to such claim, (ii) take such action in connection with
contesting such claim as ▇▇▇▇▇▇▇ shall reasonably request in writing from
time to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney reasonably
selected by ▇▇▇▇▇▇▇, (iii) cooperate with ▇▇▇▇▇▇▇ in good faith in order
to effectively contest such claim, and (iv) permit ▇▇▇▇▇▇▇ to participate
in any proceedings relating to such claim; provided, however, that ▇▇▇▇▇▇▇
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, such that after payment by the
Executive of any and all income taxes, Excise Taxes and FICA taxes
(including any interest and penalties imposed with respect thereto)
("Taxes") that may be imposed as a result of such representation and
payment of costs and expenses by ▇▇▇▇▇▇▇, the Executive retains an amount
equal to such Taxes. Without limitation on the foregoing provisions of
this Article 5(c), ▇▇▇▇▇▇▇ shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forgo
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 Taxes claimed and ▇▇▇ for a
refund or contest the claim in any permissible manner, and 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 ▇▇▇▇▇▇▇ shall determine; provided, however, that
if ▇▇▇▇▇▇▇ directs the Executive to pay such claim and ▇▇▇ for a refund,
▇▇▇▇▇▇▇ shall advance the amount of such payment to the Executive, on an
interest-free basis, and shall indemnify and hold the Executive harmless
such that, after payment by the Executive of Taxes imposed with respect to
such advance or with respect to any imputed income with respect to such
advance, the Executive retains an amount equal to such Taxes. Furthermore,
▇▇▇▇▇▇▇'▇ control of the contest shall be limited to issues with respect
to which a Gross-Up Payment would be payable hereunder and the Executive
shall be entitled to settle or contest, as the case may be, any other
issue raised by the Internal Revenue Service or any other taxing authority
unrelated to the subject mater of this Agreement.
d. If, after the receipt by the Executive of an amount advanced by ▇▇▇▇▇▇▇
pursuant to Article 5(c), the Executive becomes entitled to receive any
refund with respect to such claim, the Executive shall (subject to
▇▇▇▇▇▇▇'▇ complying with the requirements of Article 5(c)) promptly pay to
▇▇▇▇▇▇▇ 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 ▇▇▇▇▇▇▇ pursuant to Article 5(c), a
determination is made that the Executive shall not be entitled to any
refund with
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respect to such claim and ▇▇▇▇▇▇▇ does not notify the Executive in writing
of its intent to contest such denial of refund prior to the expiration of
30 days after such determination, then such advance shall be deemed to be
a part of the Gross-Up Payment and shall not be required to be repaid.
ARTICLE 6. DESIGNATED BENEFICIARY: The Executive, by notice in accordance with
Article 12 hereof, may designate a beneficiary or contingent beneficiaries to
receive the Severance Benefits described in Article 4 in the event of the
Executive's death following the Executive's Qualifying Termination but prior to
payment in full by ▇▇▇▇▇▇▇, its Successor or assigns. The Executive may, from
time to time, revoke or change any such designation of beneficiary. Any
designation of beneficiary made pursuant to this Agreement shall be controlling
over any other designation made by the Executive, testamentary or otherwise;
provided, that if ▇▇▇▇▇▇▇ shall be in doubt as to the right of a beneficiary to
receive payments, it may determine in its sole discretion to pay such amounts to
the legal representative of the Executive's estate.
ARTICLE 7. EARLY SEPARATION: In the event that, prior to a Change in Control,
the Executive executes a separation agreement with ▇▇▇▇▇▇▇ or any of its
Affiliates during the term of this Agreement which, by its terms, specifically
addresses issues related to the Executive's termination of employment and
benefits to be paid upon such termination, all of the Executive's rights, claims
and entitlements under this Agreement shall terminate even if, under the terms
of such separation agreement, the Executive remains employed by ▇▇▇▇▇▇▇ or one
of its Affiliates for a period of time after execution of such separation
agreement.
ARTICLE 8. RESTRICTIONS: The Executive agrees, as a condition of receiving the
Severance Benefits described under Article 4 or the Gross-Up Payment described
under Article 5, that during the Payment Period, the Executive will not, as an
individual or as a partner, employee, agent, advisor, consultant or in any other
capacity of or to any person, firm, corporation or other entity (excluding
▇▇▇▇▇▇▇, a Buyer, or a Successor or Affiliate of the foregoing), directly or
indirectly, other than as a 2% or less shareholder of a publicly traded
corporation, do any of the following:
(a) carry on any business, or become involved in any business activity,
which is competitive with the business conducted by ▇▇▇▇▇▇▇ or an Affiliate
immediately prior to a Change in Control; or
(b) induce or attempt to induce, or assist anyone else to induce or
attempt to induce, any customer of ▇▇▇▇▇▇▇ to discontinue its business with
▇▇▇▇▇▇▇ or disclose to anyone else any confidential information relating to the
identities, preferences, and/or requirements of any such customer.
The Executive agrees (a) that the restraints contained in this Article 8,
both separately and in total, are reasonable in view of the legitimate interests
of ▇▇▇▇▇▇▇ in
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protecting its trade secret information and business relationships; and (b) to
disclose to any potential future employer during the Payment Period, the terms
of the restrictions against competition contained in this Article 8.
If any provision or subpart of this Article 8 is adjudicated to be invalid
or unenforceable under applicable law, the validity or enforceability of the
remaining provisions and subparts shall be unaffected. If any provision or
subpart of this Article 8 is adjudicated to be invalid or unenforceable because
it is overbroad or unreasonable, that provision or subpart shall not be void but
rather shall be limited to the extent required to make it reasonable and
enforced as so limited.
In the event of a breach of this Article 8, ▇▇▇▇▇▇▇ (i) shall have no
further liability for any of the Severance Benefits described in Article 4 and
the Gross-Up Payment described in Article 5 that have not been paid as of the
date of the breach, or (ii) shall be entitled, in addition to any other legal or
equitable remedies it may have, to temporary, preliminary and permanent
injunctive relief restraining such breach.
ARTICLE 9. SUCCESSORS AND ASSIGNS: This Agreement shall inure to the benefit of,
and be binding upon, ▇▇▇▇▇▇▇ and its Successors. ▇▇▇▇▇▇▇ may not assign this
Agreement without the Executive's prior written consent. ▇▇▇▇▇▇▇ will require
any Person to which it assigns this Agreement to assume expressly the Agreement
and agree to perform this Agreement in the same manner and to the same extent
that ▇▇▇▇▇▇▇ would be required to perform it if no such assignment had taken
place. No assignment of this Agreement shall relieve ▇▇▇▇▇▇▇ from liability for
any of its obligations hereunder, and in the event of any such assignment,
▇▇▇▇▇▇▇ or its Successor shall continue to remain primarily liable for payment
of the Severance Benefits described in Article 4 and the Gross-Up Payment in
Article 5 and for the performance and observance of the agreements provided
herein to be performed and observed by ▇▇▇▇▇▇▇. The Executive shall have no
right to transfer or assign the right to receive any Severance Benefits under
Article 4 and Gross-Up Payment under Article 5 of this Agreement, except as
permitted under Article 6.
ARTICLE 10. COSTS: Irrespective of the success of the Executive's claim, ▇▇▇▇▇▇▇
will reimburse the Executive, or the legal representative of the Executive's
estate, for reasonable attorney's fees and costs in the event that the Executive
brings legal action to enforce payment by ▇▇▇▇▇▇▇, its Affiliates or assigns, or
any Successors to any of the foregoing, of the Severance Benefits described in
Article 4 (plus interest at the applicable federal rate provided for in Section
7872(f)(2) of the Code on payments of such Severance Benefits due but not timely
made) and the Gross-Up Payment under Article 5.
ARTICLE 11. TERM OF AGREEMENT: This Agreement shall expire upon the earliest of
the following to occur:
(i) five (5) years from its effective date, unless extended by the Board
of Directors on or before such expiration date;
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(ii) if a determination of the Executive's Disability is made before a
Change in Control while this Agreement is in effect, the day following
such determination; or
(iii) if the Executive ceases to be employed with ▇▇▇▇▇▇▇ and any of its
Affiliates prior to a Change in Control, the last day of such employment;
provided that, if the Executive and ▇▇▇▇▇▇▇ or one of its Affiliates
enters into a separation agreement as described in Article 7 while this
Agreement is in effect, the effective date of such separation agreement.
After the expiration of this Agreement, the Executive shall have no rights to
any Severance Benefits described in Article 4 and Gross-Up Payment described in
Article 5, provided, if a Change in Control occurs prior to the expiration or
termination of this Agreement, then the Executive shall be entitled to the
Gross-Up Payment described in Article 5 and, upon a subsequent Qualifying
Termination, Severance Benefits described in Article 4, and the term of this
Agreement shall be extended until the latest to occur of the following: (a) the
expiration of the applicable Payment Period; (b) if the Executive is eligible
for monthly payments pursuant to Article 4(d), the date of the final payment
thereunder; or (c) the date of the final Gross-Up Payment due under Article 5.
ARTICLE 12. NOTICE: Any notice or other communication required or permitted
hereunder is deemed delivered when delivered in person; on the next business day
when sent by an overnight delivery service; or on the third business day when
sent by U.S. mail service, as follows:
TO ▇▇▇▇▇▇▇: Corporate Secretary
▇▇▇▇▇▇▇ Purina Company
▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇. ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
TO THE EXECUTIVE: ________________________
________________________
________________________
ARTICLE 13. VENUE: ANY ACTION OR LEGAL PROCEEDING TO ENFORCE PAYMENT OF
SEVERANCE BENEFITS DESCRIBED IN ARTICLE 4 OR COMPLIANCE WITH THE COVENANTS
CONTAINED IN ARTICLE 5 OR 8 OF THIS AGREEMENT SHALL BE BROUGHT IN A FEDERAL OR
STATE COURT LOCATED WITHIN THE EASTERN DISTRICT OF MISSOURI, AND THE PARTIES TO
THIS AGREEMENT CONSENT TO THE JURISDICTION AND VENUE OF SUCH COURT.
ARTICLE 14. MISSOURI LAW TO GOVERN: This Agreement shall be governed by the laws
of the State of Missouri without regard to its conflict of laws provisions.
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ARTICLE 15. ENTIRE AGREEMENT: This Agreement constitutes the entire agreement
between the parties hereto with respect to the subject matter hereof, and
supersedes and replaces any previous management continuity agreement or any
employment contract (oral or written) between ▇▇▇▇▇▇▇ and the Executive relating
to severance payments after a Change in Control, and upon the execution of this
Agreement, both parties agree that any prior agreement or employment contract
covering severance payments (or other severance-type payments) after a Change in
Control shall be considered null and void and of no further effect.
IN WITNESS WHEREOF, ▇▇▇▇▇▇▇ and the Executive have executed this Agreement
effective as of the __________ day of _______, 2000.
ATTEST: ▇▇▇▇▇▇▇ PURINA COMPANY
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▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇. ▇. ▇▇▇
VP & Corporate Secretary Vice President and General Counsel
WITNESS:
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Executive
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