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Exhibit 10.14(b)
SECOND AMENDED AND RESTATED
MANAGEMENT RETENTION AGREEMENT
(TIER 2)
THIS SECOND AMENDED AND RESTATED AGREEMENT ("Agreement") is
entered into as of the _____ day of March, 1997 (the "Effective Date") by and
between Caliber System, Inc., an Ohio corporation (together with its successors
and assigns permitted under this Agreement the "Company"), and Mr. X
("Executive").
W I T N E S S E T H
WHEREAS, Executive currently serves as [title] of [company];
and
WHEREAS, the Company considers the establishment and
maintenance of a sound and vital management to be essential to protecting and
enhancing the best interests of the Company and its shareholders; and
WHEREAS, the Board (as defined in Section 1(b)) has determined
that it is in the best interests of the Company and its stockholders to secure
Executive's continued services and to ensure Executive's continued dedication
and objectivity in the event of any threat or occurrence of, or negotiation or
other action that could lead to, or create the possibility of, a Change in
Control (as defined in Section 1(d)) of the Company, without concern as to
whether Executive might be hindered or distracted by personal uncertainties and
risks created by any such possible Change in Control, and to encourage
Executive's full attention and dedication to the Company, the Board has
authorized the Company to enter into this Agreement.
NOW, THEREFORE, for and in consideration of the premises and
the mutual covenants and agreements herein contained, the Company and Executive
hereby agree as follows:
1. Definitions.
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As used in this Agreement, the following terms shall
have the respective meanings set forth below:
(a) "Affiliate" of a person or other entity
means a person or entity that directly or indirectly controls, is
controlled by, or is under common control with the person or other entity
specified.
(b) "Board" means the Board of Directors of the
Company.
(c) "Cause" means (1) conviction of Executive
for a felony or for a misdemeanor involving moral turpitude or (2) a
material breach by Executive of the duties and responsibilities associated with
his employment and position with the Company (other than as a result of
incapacity due to physical or mental illness) which is demonstrably willful and
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deliberate on Executive's part, which results in demonstrably material economic
injury to the Company and which is not remedied in a reasonable period of time
after receipt of written notice from the Company specifying such breach.
Cause shall not exist unless and until the
Company has delivered to Executive a copy of a resolution duly adopted by
three-quarters (3/4) of the Board and to the extent applicable, three quarters
(3/4) of the Incumbent Directors, if any, as defined below, at a meeting of the
Board called and held for such purpose (after reasonable notice to Executive and
an opportunity for Executive, together with his counsel, to be heard before the
Board), finding that in the good faith opinion of the Board, Executive was
guilty of the conduct set forth in this Section 1(c) and specifying the
particulars thereof in detail.
(d) "Change in Control" means the occurrence of
any of the following events:
(1) any "person," as such term is used
in Sections 3(a)(9) and 13(d) of the 1934 Act, becomes a "beneficial
owner," as such term is used in Rule 13d-3 promulgated under the 1934 Act, of
20% or more of the combined voting power of all the Voting Securities of the
Company then outstanding;
(2) the majority of the Board consists
of individuals other than Incumbent Directors, which term means the members
of the Board on the date of this Agreement; provided that any person becoming a
director subsequent to such date whose election or nomination for election was
supported by three-quarters of the directors who then comprised the Incumbent
Directors shall be considered to be an Incumbent Director;
(3) the Company adopts any plan of
liquidation providing for the distribution of all or substantially all of
its assets;
(4) all or substantially all of the
assets of the Company are disposed of pursuant to a merger, consolidation
or other transaction (unless the holders of the Voting Securities of the Company
immediately prior to such merger, consolidation or other transaction
beneficially own, directly or indirectly, in substantially the same proportion
as they owned the Voting Securities of the Company, all of the Voting Securities
or other ownership interests of the entity or entities, if any, that succeed to
the business of the Company); or
(5) the Company combines with another
company and is the surviving corporation but, immediately after the
combination, the holders of the Voting Securities of the Company immediately
prior to the combination hold, directly or indirectly, 50% or less of the Voting
Securities of the combined company (there being excluded from the Voting
Securities held by such holders of the Voting Securities, but not from the
Voting Securities of the combined company, any securities received by Affiliates
of such other company in exchange for securities of such other company).
Notwithstanding anything contained in this Agreement
to the contrary, if Executive's employment is terminated by the Company
prior to a Change in Control, which Change in Control in fact occurs, and
Executive reasonably demonstrates that such termination was at the request of a
third party who effectuates such Change in Control or that such termination was
directly related to or in anticipation of such Change in Control, then for all
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purposes of this Agreement, the date of the Change of Control shall mean the
date immediately prior to the date of such termination of Executive's
employment.
(e) "Date of Termination" means (1) the
effective date on which Executive's employment by the Company terminates as
specified in a Notice of Termination by the Company or Executive, as the case
may be, or (2) if Executive's employment by the Company terminates by reason of
death, the date of death of Executive. Notwithstanding the previous sentence,
(i) if Executive's employment is terminated for Disability (as defined in
Section 1(f)) or (ii) if Executive's employment is terminated by the Company
other than for Cause, then such Date of Termination shall be no earlier than
thirty (30) days following the date on which a Notice of Termination is
received.
(f) "Disability" means Executive's absence from
his duties with the Company on a full-time basis for at least one hundred
eighty (180) consecutive days as a result of Executive's incapacity due to
mental or physical illness.
(g) "Good Reason" shall mean termination by
Executive of his employment following occurrence of any of the following
events without his consent:
(i) a reduction in Executive's base salary
or target award opportunity as in effect immediately prior to the Change in
Control (including a change in performance criteria which impacts negatively on
Executive's ability to achieve the target) under the Company's annual or
long-term performance incentive plans or programs, the failure to continue
Executive's participation in any incentive compensation plan in which he was a
participant immediately prior to the Change in Control unless a plan providing a
substantially similar opportunity is substituted, or the termination or material
reduction of any employee benefit or perquisite enjoyed by him immediately prior
to the Change in Control, unless comparable benefits or perquisites (determined
in the aggregate) are substituted;
(ii) material diminution in Executive's
duties as in effect immediately prior to the Change in Control or
assignment to Executive of duties materially inconsistent with his duties as in
effect immediately prior to the Change in Control;
(iii) the loss of any of Executive's titles
or positions held immediately prior to the Change in Control; or
(iv) the failure of the Company to obtain
the assumption in writing of its obligation to perform the agreement by any
successor to all or substantially all of the assets of the Company within 30
days after a merger, consolidation, sale or similar transaction.
Notwithstanding anything contained in this Agreement
to the contrary, any circumstance described in clauses (i) through (iii) of
this Section 1(g) shall not constitute Good Reason unless Executive gives
written notice thereof to the Company in accordance with Section 12 and the
Company fails to remedy such circumstances within ten days following receipt of
such notice.
(h) "Notice of Termination" means notice of the
Date of Termination as described in Section 12(b).
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(i) "Qualifying Termination" means a termination
of Executive's employment as a result of (1) a termination by the Company
without Cause, (2) a termination by Executive for Good Reason or (3) a
termination by Executive during the 30-day period commencing with the first
anniversary date of the Change in Control; provided, however, that a Qualifying
Termination shall not include a termination as a result of Executive's death,
Disability or Retirement.
(j) "Retirement" means Executive's voluntary
termination of employment (other than with Good Reason) while eligible for
retirement benefits under the terms of the Caliber System, Inc. Pension Plan and
Trust.
(k) "Retirement and Savings Plans" mean all
qualified and nonqualified defined benefit and defined contribution plans,
including:
[Applicable qualified and nonqualified benefit plans]
or any applicable amended, successor or substitute plan or plans of the Company,
including any supplemental employee retirement plans, put into effect prior to a
Change in Control.
The Caliber System, Inc. Long-Term Stock
Award Incentive Plan is included in the definition of Retirement and
Savings Plans to the extent that it provides Executive with supplemental stock
credits.
(l) "Transition Period" means the period of time
beginning with a Change in Control and ending on the earlier to occur of
(1) Executive's death and (2) twenty-four (24) months following such Change in
Control.
(m) "Voting Securities" mean any shares of
capital stock or other securities of the Company that are generally entitled to
vote in elections for directors.
2. Term of Agreement.
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This Agreement shall commence on the Effective Date
and shall continue in effect until ____________, 1999; provided, however,
that commencing on ____________, 1999 and each following anniversary of the
Effective Date, the term of this Agreement shall automatically be extended for
an additional one-year period, unless at least six months prior to such date,
the Company shall have given notice not to extend this Agreement; provided,
however, that (i) no such action shall be taken by the Company during any period
of time when the Board has knowledge that any person has taken steps reasonably
calculated to effect a Change in Control until, in the opinion of the Board,
such person has abandoned or terminated its efforts to effect a Change in
Control, and (ii) this Agreement shall continue in effect for at least
twenty-four (24) months following the occurrence of a Change in Control.
Notwithstanding anything in this Section 2 to the contrary, and subject to the
last paragraph of Section 1(d), this Agreement shall terminate upon termination
of Executive's employment with the Company prior to a Change in Control, in
which event the rights and obligations of the parties, except as otherwise
expressly provided herein, shall cease.
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3. Payments and Benefits Upon Termination of Employment.
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(a) If during the Transition Period the
employment of Executive shall terminate, by reason of a Qualifying
Termination, then the Company shall pay to Executive (or Executive's beneficiary
or estate) within five (5) days following the Date of Termination, as
compensation for services rendered to the Company:
(1) a lump-sum cash amount equal to the
sum of (i) Executive's unpaid base salary from the Company and its
subsidiaries through the Date of Termination (at the rate in effect (without
taking into account any reduction of base salary constituting Good Reason) just
prior to the time a Notice of Termination is given); (ii) any benefit awards
(including both the cash and stock components) which pursuant to the terms of
any Retirement and Savings Plans have been earned or become payable, through the
Date of Termination, to the extent not theretofore paid or otherwise provided
for; (iii) that portion of the target annual bonus under the Company's incentive
compensation plans determined by multiplying the target annual bonus by the
fraction arrived at by dividing the number of full weeks worked by Executive
during the calendar year of his Date of Termination by fifty-two (52); plus (iv)
any unpaid vacation under the Company's vacation policy in effect at the Date of
Termination (or, if more favorable to Executive, immediately prior to a Change
in Control).
(2) a lump-sum cash amount equal to (a)
2 times Executive's highest annual rate of base salary from the Company and
its subsidiaries in effect during the 12-month period prior to the Date of
Termination plus (b) 2 times the target annual bonus in effect for the year in
which the Change in Control occurs; provided, that any amount paid pursuant to
this Section 3(a)(2) shall be offset by any other amount of severance relating
to salary or bonus continuation to be received by Executive upon termination of
employment of Executive under any other severance plan, policy, employment
agreement or arrangement of the Company.
(3) a lump-sum cash amount equal to the
actuarial present value as of the Date of Termination of the benefits that
would be attributable to an additional twenty-four (24) months of age and
service under the Retirement and Savings Plans.
(b) If during the Transition Period, the
employment of Executive terminates by reason of a Qualifying Termination,
the Company will:
(1) provide Executive and his dependents
with health care coverage at the same level as that in effect immediately
prior to the Date of Termination (or, if more favorable to Executive,
immediately prior to the Change in Control) ("Continued Medical Coverage") for a
period of 42 months from the Date of Termination; and
(2) provide Executive and his dependents
with accident, disability and life coverage at the same level and upon the
same terms and otherwise to the same extent as that in effect immediately prior
to the Date of Termination (or, if more favorable to Executive, immediately
prior to the Change in Control) ("Welfare Benefits") for a period of 24 months
from the Date of Termination.
(3) The coverages described in
subparagraphs (1) and (2) of this Section may be provided through continued
participation in the Company's plans and programs or otherwise, as the Company
determines.
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(4) During the first twenty four (24)
months of Continued Medical Coverage, the Company and Executive will share
the costs of such coverage in the same proportion as such costs were shared
immediately prior to the Date of Termination (or, if more favorable to
Executive, immediately prior to the Change in Control). From the twenty-fifth
(25th) through the end of the of the forty-second (42nd) month of Continued
Medical Coverage, Executive will be required to pay the cost of such coverage at
the rate the Company charges former employees, from time to time, for similar
coverage under COBRA. The Company and Executive will share the costs of
providing the Welfare Benefits in the same proportion as such costs were shared
immediately prior to the Date of Termination (or, of more favorable to
Executive, immediately prior to the Change in Control).
(5) Continued Medical Coverage will
terminate upon the earliest of (i) the expiration of 42 months from the
Date of Termination, (ii) the commencement date of equivalent benefits from a
new employer, or (iii) Executive's attainment of age 65. Welfare Benefits will
terminate upon the earliest of (i) the expiration of 24 months from the Date of
Termination, (ii) the commencement date of equivalent benefits a new employer,
or (iii) Executive's attainment of age 65. Upon termination of Continued Medical
Coverage, Executive may, if eligible, elect special continuation coverage for
early retirees under the Caliber System, Inc. Medical, Dental and Vision Care
Plan. Upon termination of Welfare Benefits, Executive may, if available, convert
one or more of Executive's and his dependent's coverage to individual policies
or programs.
4. Consequences of a Change in Control upon Certain
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Entitlements.
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(a) The consequences of a Change in Control on
Executive's stock options and performance shares granted under the
Company's 1996 Equity Incentive Compensation Plan ("EICP") shall be determined
in accordance with the EICP and Executive's grants pursuant to the EICP.
(b) No later than the occurrence of a Change in
Control, the Company shall fund in full that portion, if any, of the
obligations to Executive under the Company's Retirement and Savings Plans (other
than plans qualified under Section 401(a) of the Internal Revenue Code) that are
then unfunded. Such funding shall be provided through an irrevocable trust for
the benefit of the Executive which shall be established as promptly as possible
following the Effective Date of this Agreement (or, in the case of a Retirement
and Savings Plan established after such effective date, then as promptly as
possible after such plan is established) for the purpose of receiving
contributions from the Company to fund such obligations. To the extent such
obligations are covered by a plan other than a plan for which there is a trust
already in existence, the Company shall establish a trust for the purpose of
funding such obligations. Such trust shall be in a form that provides Executive
with the most favorable tax position that reasonably can be determined at the
time it is established. The trust shall provide for distribution of amounts to
Executive in order to pay taxes, if any, that become due prior to payment of
amounts pursuant to the trust. Following the occurrence of a Change in Control,
the Company shall make periodic additional contributions (no less frequently
than annually) to keep such trust fully funded. The intent is that no later than
the Change in Control and annually thereafter (the "Applicable Dates") the
amount of such fund shall equal at least the then present value (determined as
of each Applicable Date) of any amounts subject to the funding requirement of
this Section 4(b) as determined by a nationally recognized firm qualified to
provide actuarial services. The establishment and funding of any such trust
shall not affect the obligation of the Company to provide the benefits being
funded. The trust may be terminated in accordance with
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the trust agreement between the Company and the trustee and, if so
terminated, the Company shall not be required to establish a successor trust
under this Section 4(b). The trust described in this Section 4(b) may be part of
a trust funding similar obligations for other employees of the Company.
(c) No later than the occurrence of a Change in
Control, the Company shall fund its obligations to provide payments and
benefits under this Agreement (other than the obligations which are provided for
in Section 4(b)) by the establishment of a trust to which it contributes an
amount sufficient to meet such obligations. The establishment and funding of
such trust shall not affect the obligations of the Company to provide the
benefits subject to this Section 4(c). The trust described in this Section 4(c)
may be part of the trust described in Section 4(b).
(d) The consequences of a Change in Control upon
compensation and benefit plans and programs of the Company, except as
otherwise provided in this Agreement, shall be determined in accordance with
such plans and programs.
5. Gross-up Payments.
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(a) Anything in this Agreement to the contrary
notwithstanding, in the event it shall be determined that any payment,
distribution or other benefit (including, without limitation, any acceleration
of vesting of any benefit) provided by the Company or its subsidiaries to or for
the benefit of Executive (a "Payment") (whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any Gross-up Payment required under this Section 5)
would be subject to the excise tax imposed by Section 4999 of the Internal
Revenue Code of 1986 (the "Code"), (such excise tax, together with any interest
and penalties imposed in respect thereto, hereinafter collectively referred to
as the "Excise Tax"), then Executive shall be entitled to receive a Gross-Up
Payment in an amount that after payment by Executive of all taxes, including,
without limitation, any income, employment, and excise taxes (and any interest
and penalties imposed with respect thereto), imposed upon the Gross-Up Payment
leaves the Executive a net amount from the Gross-Up Payment equal to the Excise
Tax imposed upon the Payment.
(b) Subject to the provisions of Section 5(c),
all determinations required to be made under this Section 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 the public accounting firm that is retained by the Company as
of the date immediately prior to the Change in Control (the "Accounting Firm")
which shall provide detailed supporting calculations both to the Company and
Executive within fifteen (15) business days of the receipt of notice from
Executive that there has been a Payment, or such earlier time as is requested by
the Company (collectively, the "Determination"). In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change in Control, Executive shall appoint another
nationally recognized public accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Company. Any Gross-Up Payment, as determined pursuant to this
Section 5, shall be paid by the Company to Executive within five (5) days of the
receipt of the Determination. If the Accounting Firm determines that no Excise
Tax is payable by Executive, it shall furnish Executive with a written opinion
that failure to report the Excise Tax on Executive's applicable federal income
tax return will not result in the imposition of a
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negligence or similar penalty. The Determination by the Accounting Firm
shall be binding upon the Company and Executive. In the event the Company
exhausts its remedies pursuant to Section 5(c) and Executive thereafter is
required by a determination of a court or the Internal Revenue Service to make
payment of any Excise Tax, the Accounting Firm shall determine promptly
following receipt of such determination the amount of the Gross-Up Payment that
should have been made by the Company (the "Underpayment") and any such
Underpayment shall be paid promptly by the Company to or for the benefit of
Executive.
(c) Executive shall notify the Company in
writing of any claim by the Internal Revenue Service that, if successful,
would require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than ten (10)
business days after Executive is informed in writing of such claim and shall
apprise the Company of the nature of such claim and the date on which such claim
is requested to be paid. Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which Executive gives such
notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company notifies
Executive in writing prior to the expiration of such period that it desires to
contest such claim, Executive shall:
(1) give the Company any information
reasonably requested by the Company relating to such claim,
(2) take such action in connection with
contesting such claim as the Company 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 the Company,
(3) cooperate with the Company in good
faith in order effectively to contest such claim, and
(4) permit the Company to participate
in any proceeding relating to such claim; provided, however, that the
Company 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 Executive harmless, on an after-tax basis, for any Excise Tax
or income or employment tax (including interest and penalties with respect
thereto) imposed as a result of such proceeding and payment of costs and
expenses. Without limitation on the foregoing provisions of this Section 5(c),
the Company shall control all proceedings taken 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 Executive to
pay the tax claimed and ▇▇▇ for a refund or contest the claim in any permissible
manner, and 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 Company shall determine; provided further, that if
the Company directs Executive to pay such claim and ▇▇▇ for a refund, the
Company shall advance the amount of such payment to Executive on an
interest-free basis and shall indemnify and hold Executive harmless, on an
after-tax basis, from any Excise Tax or income or employment tax (including
interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance; and provided
further, that any extension of the statute of limitations relating to payment of
taxes for the taxable year of Executive with respect to which such contested
amount is claimed to be due is
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limited solely to such contested amount. Furthermore, the Company's control of
the contest shall be limited to issues with respect to which a Gross-Up
Payment would be payable hereunder and 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.
(d) If, after the receipt by Executive of an
amount advanced by the Company pursuant to Section 5(c), Executive becomes
entitled to receive, and receives, any refund with respect to such claim,
Executive shall (subject to the Company's complying with the requirements of
Section 5(c) promptly pay to the Company the amount of such refund (together
with any interest paid or credited thereon after taxes applicable thereto). If,
after the receipt by Executive of an amount advanced by the Company pursuant to
Section 5(c), a determination is made that Executive shall not be entitled to
any refund with respect to such claim and the Company does not notify Executive
in writing of its intent to contest such denial of refund prior to the
expiration of thirty (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.
6. Confidentiality; Non-Competition.
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(a) During employment and thereafter, Executive
shall keep confidential all "Confidential Information" relating to the
Company or any of its subsidiaries, and their respective businesses, obtained by
Executive during his employment by the Company or any of its subsidiaries.
"Confidential Information" means any non-public, proprietary information that
may provide the Company with a competitive advantage, including, without
limitation, any trade secrets, formulas, flow charts, computer programs, access
codes or other systems information, business, product or marketing plans, sales
and other forecasts, financial information, customer lists, and information
relating to compensation and benefits, provided that such proprietary
information does not include any information which is available to the general
public or is generally available within the relevant business or industry other
than as a result of Executive's breach of this Section 6(a). Confidential
Information may be in any medium or form, including, without limitation,
physical documents, computer files or discs, videotapes, audiotapes, and oral
communications. Anything herein to the contrary notwithstanding, it shall not be
a violation of this Section 6(a) for the Executive to disclose information in
the ordinary course of properly carrying out his duties and responsibilities on
behalf of the Company or to respond to an order of a court or other body having
jurisdiction provided that he gives the Company notice of any such order.
(b) Executive agrees that he shall not for a period
of one (1) year following the Date of Termination, directly or indirectly
own, manage, operate, join, control, be employed by, or participate in the
ownership, management, operation or control of or be connected in any manner,
including but not limited to holding the positions of officer, director,
shareholder, consultant, independent contractor, employee, partner, or investor,
with any Competing Enterprise; provided, however, that Executive may invest
without being deemed in violation of this Section 6(b), in stocks, bonds, or
other securities of any corporation or other entity (but without participating
in the business thereof) if such stocks, bonds, or other securities are listed
for trading on a national securities exchange or NASDAQ and Executive's
investment does not exceed 1% of the issued and outstanding shares of capital
stock, or in the case of bonds or other securities, 1% of the aggregate
principal amount thereof issued and outstanding. "Competing Enterprise" shall
mean an enterprise that engages in any business that, on the Date of
Termination, is engaged in by the Company or any of its subsidiaries if such
enterprise engages
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in such business in any geographic area in which the Company or any of its
subsidiaries conducts such business.
(c) Except as expressly provided herein, promptly
following Executive's termination of employment, Executive shall return to
the Company all property of the Company then in Executive's possession or under
his control, except that Executive may retain his personal notes, diaries,
Rolodexes, calendars and correspondence.
(d) Executive agrees that any material breach of
the terms of this Section would result in irreparable injury and damage to
the Company for which the Company would have no adequate remedy at law.
Executive further agrees that in the event of said material breach or any
reasonable threat of material breach, the Company shall be entitled to an
immediate injunction and restraining order to prevent such material breach or
threatened material breach. The terms of this paragraph shall not prevent the
Company from pursuing any other available remedies for any breach or threatened
breach hereof, including but not limited to the recovery of damages. Should a
court or arbitrator determine that any provision of this Section 6 is
unreasonable, the parties agree that such provision shall be interpreted and
enforced to the maximum extent such court or arbitrator deems reasonable.
(e) The provisions of this Section shall survive
any termination of this Agreement and the Transition Period, and the
existence of any claim or cause of action by Executive against the Company,
whether predicated on this Agreement or otherwise, shall not constitute a
defense to the enforcement by the Company of the covenants and agreements of
this Section. Anything in this Section 6(e) to the contrary notwithstanding, the
provisions of Section 6(b) shall only apply in the event of (i) a termination of
the Executive's employment described in the last paragraph of Section 1(d),
prior to the occurrence of a Change in Control, (ii) a termination of
Executive's employment during the Transition Period that constitutes a
Qualifying Termination, or (iii) a termination for Cause at any time during the
Term of the Agreement.
7. Indemnification.
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The Company agrees that if Executive is made a party
to any action, suit or proceeding, whether civil, criminal, administrative
or investigative (a "Proceeding"), by reason of the fact that he is or was a
director, officer or employee of the Company, Executive shall be indemnified and
held harmless by the Company to the fullest extent legally permitted or
authorized by the Company's Second Amended Articles of Incorporation, Restated
Amended Code of Regulations, Indemnification Agreement between Executive and the
Company or, if greater, by the laws of the State of Ohio, against all cost,
expense, liability and loss (including, without limitation, attorney's fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid
in settlement) reasonably incurred or suffered by Executive in connection
therewith. The Company agrees to continue and maintain a directors' and
officers' liability insurance policy covering Executive to the extent the
Company provides such coverage for its other executive officers.
8. Withholding Taxes.
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The Company may withhold from all payments due to
Executive (or his beneficiary or estate) hereunder all taxes which, by
applicable federal, state, local or other law, the Company is required to
withhold therefrom.
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9. Reimbursement of Expenses.
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If any contest or dispute shall arise under this
Agreement involving termination of Executive's employment with the Company
or involving the failure or refusal of the Company to perform fully in
accordance with the terms hereof, the Company shall reimburse Executive, on a
current basis, for all legal fees and expenses, if any, incurred by Executive in
connection with such contest or dispute regardless of the result thereof.
10. Scope of Agreement.
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Nothing in this Agreement shall be deemed to entitle
Executive to continued employment with the Company or its subsidiaries.
11. Successors; Binding Agreement.
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(a) This Agreement shall not be terminated by
any merger or consolidation of the Company whereby the Company is or is not
the surviving or resulting corporation or as a result of any transfer of all or
substantially all of the assets of the Company. In the event of any such merger,
consolidation or transfer of assets, the provisions of this Agreement shall be
binding upon the surviving or resulting corporation or the person or entity to
which such assets are transferred.
(b) The Company agrees that concurrently with
any merger, consolidation or transfer of assets referred to in paragraph
(a) of this Section 11, it will cause any successor or transferee
unconditionally to assume, by written instrument delivered to Executive (or his
beneficiary or estate), all of the obligations of the Company hereunder.
(c) (i) No rights or obligations of the Company
under this Agreement may be assigned or transferred by the Company except
that such rights or obligations may be assigned or transferred pursuant to a
merger or consolidation in which the Company is not the continuing entity, or in
connection with the sale or liquidation of all or substantially all of the
assets of the Company, or in connection with the disposition of the business of
the Company substantially as an entirety, provided that the assignee or
transferee is the successor to all or substantially all of the assets of the
Company and such assignee or transferee assumes the liabilities, obligations and
duties of the Company under this Agreement, either contractually or as a matter
of law.
(ii) This Agreement is personal to
Executive and, without the prior written consent of the Company, shall not
be assignable by Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Executive shall die
while any amounts would be payable to Executive hereunder had Executive
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to such person or persons
appointed in writing by Executive to receive such amounts or, if no person is so
appointed, to Executive's estate.
12. Notice.
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(a) For purposes of this Agreement, all notices
and other communications required or permitted hereunder shall be in
writing and shall be deemed to have
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been duly given when delivered or five (5) days after deposit in the United
States mail, certified and return receipt requested, postage prepaid, addressed
as follows:
If to Executive:
[Executive's Name and Address]
If to the Company:
General Counsel
Caliber System, Inc.
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
(b) A written notice (a "Notice of Termination")
of Executive's Date of Termination by the Company or Executive, as the case
may be, to the other, shall (i) indicate the specific termination provision in
this Agreement relied upon, (ii) to the extent applicable, set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of Executive's employment under the provision so indicated and (iii)
specify the termination date. The failure by Executive or the Company to set
forth in such notice any fact or circumstance which contributes to a showing of
Good Reason or Cause shall not waive any right of Executive or the Company
hereunder or preclude Executive or the Company from asserting such fact or
circumstance in enforcing Executive's or the Company's rights hereunder.
13. No Set-off; No Mitigation.
--------------------------
The Company's obligation to make any payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have against
Executive or others. In no event shall Executive be obligated to seek other
employment or take other action by way of mitigation of the amounts payable to
Executive under any of the provisions of this Agreement and such amounts shall
not be reduced whether or not Executive obtains other employment.
14. Employment with Subsidiaries.
-----------------------------
Employment with the Company for purposes of this
Agreement shall include employment with any corporation or other entity in
which the Company has a direct or indirect ownership interest of 50% or more of
the total combined voting power of the then outstanding securities of such
corporation or other entity entitled to vote generally in the election of
directors.
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15. Governing Law; Validity.
------------------------
The interpretation, construction and performance of
this Agreement shall be governed by and construed and enforced in accordance
with the internal laws of the State of Ohio without regard to the principle of
conflicts of laws. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which other provisions shall remain in full force
and effect.
16. Settlement of Disputes.
-----------------------
(a) Any controversy or claim arising out of or
relating to this Agreement, any amendment of this Agreement, or any breach
of any of the foregoing, shall, subject to the mutual agreement of the Company
and the Executive, be settled by confidential arbitration, to be held in Akron,
Ohio, in accordance with the Commercial Arbitration Rules of the American
Arbitration Association before three (3) arbitrators. The arbitrators shall
apply the provisions of this Agreement strictly as written (unless doing so
violates the clear intent of this Agreement), and shall explain the reasons and
basis of their award in detail and in writing. Judgment upon the award rendered
by the arbitrators may be entered in any court having jurisdiction thereof. All
costs and expenses relating to any controversy or claim that is arbitrable under
this Section (including reasonable attorney's fees of the Executive) shall be
paid by the Company promptly on written demand, except that the arbitrators are
authorized to require reimbursement of the Company for moneys paid by it
pursuant to this sentence if the arbitrators determine that the substantive
positions of the Executive in the arbitration were entirely without merit.
Pending final resolution of any arbitration or court proceeding, the Company
shall continue prompt payment of all amounts due the Executive under this
Agreement or any amendment thereof and prompt provision of all benefits to which
the Executive or his beneficiaries are entitled. Notwithstanding the foregoing,
nothing contained in this Section 16 shall limit a party's right to seek
equitable relief in any court of competent jurisdiction.
(b) In the event the parties do not agree to
arbitration as provided in 16(a), the parties hereby consent to the
jurisdiction of the Common Pleas Court of the State of Ohio (Summit County) or
of the United States District Court for the Northern District of Ohio.
17. Counterparts.
-------------
This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all of
which together shall constitute one and the same instrument.
18. Survivorship.
-------------
The respective rights and obligations of the parties
hereunder shall survive the expiration of the term of this Agreement, to
the extent necessary to carry out the intentions of the parties, including
without limitation any obligations of the Company to make payments and provide
benefits hereunder.
19. Miscellaneous.
--------------
No provision in this Agreement may be amended unless
such amendment is agreed to in writing and signed by Executive and an
authorized officer of the Company. No
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provision of this Agreement may be waived unless such waiver is agreed
to in writing and signed by the waiving party which, in the case of the Company,
shall mean by a duly authorized officer of the Company. No waiver by either
party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. Failure by Executive
or the Company to insist upon strict compliance with any provision of this
Agreement or to assert any right Executive or the Company may have hereunder,
including without limitation, the right of Executive to terminate employment for
Good Reason, shall not be deemed to be a waiver of such provision or right or
any other provision or right of this Agreement. This Agreement contains the
entire understanding and agreement between the parties concerning the subject
matter hereof and supersedes all prior agreements, understandings, discussions,
negotiations and undertakings, whether written or oral, between the parties with
respect thereto.
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IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by a duly authorized officer of the Company. Executive has executed
this Agreement as of the date and year first written above.
CALIBER SYSTEM, INC.
By:
------------------------
Agreed to this day of March, 1997.
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--------------------------
[Executive's Name]