Exhibit 10.6
FORM OF CHANGE OF CONTROL AGREEMENT
PERSONAL AND CONFIDENTIAL
[Date]
[Name of Individual]
[Title]
Alltrista Corporation
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Dear [Name]:
Alltrista Corporation (the "Corporation") considers it essential to the best
interests of its stockholders to ▇▇▇▇▇▇ the continuous employment of key
management personnel. In this connection, the Board of Directors of the
Corporation (the "Board") recognizes that the possibility of a change in control
of the Corporation exists and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure or
distraction of management personnel to the detriment of the Corporation and its
stockholders.
The Board has determined that appropriate steps should be taken to reinforce and
encourage the continued attention and dedication of members of the Corporation's
management, including yourself, to their assigned duties without distraction in
the face of potentially disturbing circumstances arising from the possibility of
a change in control of the Corporation.
In order to induce you to remain in the employ of the Corporation, the
Corporation agrees that you shall receive the severance benefits set forth in
this letter agreement (the "Agreement"), which amends and restates the agreement
between you and the Corporation dated as of May 10, 1993, in the event your
employment with the Corporation is terminated under the circumstances described
below subsequent to a "Change in Control of the Corporation" (as defined in
Section 2).
1. Term of Agreement. The Agreement shall continue in effect through
December 31, 1997; provided, however, that commencing on December 31, 1997, and
each December 31 thereafter, the term of this Agreement shall automatically be
extended for one additional year unless, not later than October 31 immediately
preceding such December 31, and every October 31, thereafter, the Corporation
shall have given notice that it does not wish to extend this Agreement; and
provided, further, that if a Change in Control of the Corporation as defined in
Section 2, shall have occurred during the original or extended term of this
Agreement, this Agreement shall continue in effect for a period of not less than
twenty-four (24) months beyond the month in which such Change in Control
occurred.
2. Change in Control. No benefits shall be payable hereunder unless
there shall have been a Change in Control of the Corporation, as set forth
below. For purposes of this Agreement, a "Change in Control of the Corporation"
shall be deemed to have occurred upon the first to occur of the following
events:
(i) any "person," as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Exchange
Act") (other than the Corporation, any trustee or other fiduciary
holding securities under an employee benefit plan of the Corporation or
any subsidiary of the Corporation, or any corporation owned, directly
or indirectly, by the stockholders of the Corporation in substantially
the same proportions as their ownership of stock of the Corporation),
is or becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities of the
Corporation representing 30 percent or more of the combined voting
power of the Corporation's then outstanding securities;
(ii) at any time during any period of two consecutive years,
individuals, who at the beginning of such period constitute the Board,
and any new director (other than a director designated by a person who
has entered into an agreement with the Corporation to effect a
transaction described in Subsection (i), (iii) or (iv) of this Section)
whose election by the Board or nomination for election by the
Corporation's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors at the beginning of the period or
whose election or nomination for election was previously so approved
cease for any reason to constitute at least a majority thereof;
(iii) the stockholders of the Corporation approve a merger or
consolidation of the Corporation with any other corporation, other than
(1) a merger or consolidation which would result in the voting
securities of the Corporation outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) more than 50
percent of the combined voting power of the voting securities of the
Corporation or such surviving entity outstanding immediately after such
merger or consolidation or (2) a merger or consolidation effected to
implement a recapitalization of the Corporation (or similar
transaction) in which no person acquires 50 percent or more of the
combined voting power of the Corporation's then outstanding securities;
or
(iv) the stockholders of the Corporation approve a plan of
complete liquidation of the Corporation or an agreement for the sale or
disposition by the Corporation of all or substantially all of the
Corporation's assets.
3. Takeover Threat. For purposes of this Agreement, a "Takeover Threat"
shall be deemed to have occurred if (i) the Corporation enters into an
agreement, the consummation of which would result in the occurrence of a Change
in Control of the Corporation; (ii) any person (including the Corporation)
publicly announces an intention to take or to consider taking actions which, if
consummated, would constitute a Change in Control of the Corporation; (iii) any
"person," as such term is used in Sections 13(d) and 14(d) of the Exchange Act
(other than the Corporation, any trustee or other fiduciary holding securities
under an employee benefit plan of the Corporation, or any subsidiary of the
Corporation, or any corporation owned, directly or indirectly, by the
stockholders of the Corporation in substantially the same proportions as their
ownership of stock of the Corporation), who is or has become the "beneficial
owner" (as defined in Rule 13d-3 under the Exchange Act), directly or indirectly
of securities of the Corporation representing 10 percent or more of the combined
voting power of the Corporation's then outstanding securities increases such
ownership by 5 percentage points or more of such voting power over a period of
less than twenty-four (24) months; or (iv) the Board adopts a resolution to the
effect that a Takeover Threat for purposes of this Agreement has occurred.
Solely for purposes of determining your entitlement to payment of severance
benefits pursuant to this Agreement, you agree that, subject to the terms and
conditions of the Agreement, in the event of a Takeover Threat, you will remain
in the employ of the Corporation for a period of one (1) year from the
occurrence of such Takeover Threat, or until an actual Change in Control of the
Corporation, whichever occurs earlier.
4. Termination Following Change in Control.
(i) General. If any of the events described in Section 2
constituting a Change in Control of the Corporation shall have
occurred, you shall be entitled to the benefits provided in Section
5(iii) upon the subsequent termination of your employment during the
term of this Agreement unless such termination is (a) because of your
death or Disability, (b) by the Corporation for Cause, or (c) by you
other than on account of Constructive Termination. In the event your
employment with the Corporation is terminated for any reason at any
time prior to the occurrence of a Change in Control of the Corporation
and subsequently a Change in Control of the Corporation shall have
occurred, you shall not be entitled to any benefits hereunder.
(ii) Disability. If, as a result of your incapacity due to
physical or mental illness, you shall have been absent from the
full-time performance of your duties with the Corporation for six (6)
consecutive months, and within thirty (30) days after written notice of
termination is given you shall not have returned to the full-time
performance of your duties, your employment may be terminated for
"Disability."
(iii) Cause. Termination by the Corporation of your employment
for "Cause" shall mean termination (a) upon your conviction of a felony
in conjunction with your services to the Corporation, including the
entry of a guilty or nolo contendere plea, or (b) your engaging in
conduct that constitutes willful gross neglect or willful gross
misconduct in carrying out your duties, resulting, in either case, in
material harm to the Corporation, monetarily or otherwise, unless you
reasonably believed in good faith that such act or non-act was in (or
not opposed to) the best interests of the Corporation. For purposes of
this Subsection, no act, or failure to act, on your part shall be
deemed "willful" unless done, or omitted to be done, by you not in good
faith and without reasonable belief that your action or omission was in
the best interest of the Corporation. Notwithstanding the foregoing,
you shall not be deemed to have been terminated for Cause unless and
until there shall have been delivered to you a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters
(3/4) of the entire membership of the Board at a meeting of the Board
called and held for such purpose (after reasonable notice to you and an
opportunity for you, together with your counsel, to be heard before the
Board), finding that in the good faith opinion of the Board you were
guilty of conduct set forth above in this Subsection and specifying the
particulars thereof in detail.
(iv) Constructive Termination. You shall be entitled to
terminate your employment upon the occurrence of Constructive
Termination. For purposes of this Agreement, "Constructive Termination"
shall mean, without your expressed written consent, the occurrence
after a Change in Control of the Corporation of any of the following
circumstances unless, in the case of paragraphs (a), (e), (f), (g) or
(h), such circumstances are fully corrected prior to the Date of
Termination (as defined in Subsection (vi) hereof) specified in the
Notice of Termination (as defined in Subsection (v) hereof) given in
respect thereof:
(a) the assignment to you of any duties inconsistent (unless
in the nature of a promotion) with the position in the Corporation that
you held immediately prior to the Change in Control of the Corporation,
or a significant adverse reduction or alteration in the nature or
status of your position, duties or responsibilities or the conditions
of your employment from those in effect immediately prior to such
Change in Control;
(b) a reduction by the Corporation in your annual base salary
as in effect immediately prior to the Change in Control of the
Corporation or as the same may be increased from time to time, except
for across-the-board salary reductions similarly affecting all
management personnel of the Corporation and all management personnel of
any person in control of the Corporation;
(c) the Corporation's requiring that your principal place of
business be at an office located more than twenty (20) miles from the
location where your principal place of business is located immediately
prior to the Change in Control of the Corporation, except for required
travel on the Corporation's business to an extent substantially
consistent with your present business travel obligations;
(d) the failure by the Corporation to pay to you any portion
of your current compensation except pursuant to an across-the-board
compensation deferral similarly affecting all management personnel of
the Corporation and all management personnel of any person in control
of the Corporation or to pay to you any portion of an installment of
deferred compensation under any deferred compensation program of the
Corporation within seven (7) days of the date such compensation is due;
(e) the failure by the Corporation to continue in effect any
compensation or benefit plan in which you participate immediately prior
to the Change in Control of the Corporation that is material to your
total compensation, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with respect to
such plan, or the failure by the Corporation to continue your
participation therein (or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms of the amount of
benefits provided and the level of your participation relative to other
participants, as existed at the time of the Change in Control of the
Corporation;
(f) the failure by the Corporation to continue to provide you
with benefits substantially similar to those enjoyed by you under any
of the Corporation's life insurance, medical, health and accident, or
disability plans in which you were participating at the time of the
Change in Control of the Corporation, the taking of any action by the
Corporation which would directly or indirectly materially reduce any of
such benefits or deprive you of any material fringe benefit enjoyed by
you at the time of the Change in Control of the Corporation, or the
failure by the Corporation to provide you with the number of paid
vacation days to which you are entitled on the basis of years of
service with the Corporation in accordance with the Corporation's
normal vacation policy in effect at the time of the Change in Control
of the Corporation;
(g) the failure of the Corporation to continue this Agreement
in effect, or to obtain a satisfactory agreement from any successor to
assume and agree to perform this Agreement, as contemplated in Section
6 hereof, or
(h) any purported termination of your employment that is not
effected strictly in accordance with the terms of this Agreement and
pursuant to a Notice of Termination satisfying the requirements of
Subsection (v) hereof (and, if applicable, the requirements of
Subsection (iii) hereof), which purported termination shall not be
effective for purposes of this Agreement.
Your right to terminate your employment pursuant to this Subsection shall not be
affected by your incapacity due to physical or mental illness. Your continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any circumstance constituting Constructive Termination hereunder.
(v) Notice of Termination. Any purported termination of your
employment by the Corporation or by you shall be communicated by
written Notice of Termination to the other party hereto in accordance
with Section 7. "Notice of Termination" shall mean a notice that shall
indicate the specific termination provision in this Agreement relied
upon and shall set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of your
employment under the provision so indicated.
(vi) Date of Termination. "Date of Termination" shall mean (a)
if your employment is terminated for Disability, thirty (30) days after
Notice of Termination is given (provided that you shall not have
returned to the full-time performance of your duties during such thirty
(30-day period), and (b) if your employment is terminated pursuant to
Subsection (iii) or (iv) hereof or for any other reason (other than
Disability), the date specified in the Notice of Termination (which, in
the case of a termination for Cause shall not be less than thirty (30)
days from the date such Notice of Termination is given, and in the case
of a termination on account of Constructive Termination shall not be
less than fifteen (15) nor more than sixty (60) days from the date such
Notice of Termination is given); provided, however, that if within
fifteen (15) days after any Notice of Termination is given, or, if
later, prior to the Date of Termination (as determined without regard
to this proviso), the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the
termination, then the Date of Termination shall be the date on which
the dispute is finally determined, either by mutual written agreement
of the parties, or by a binding arbitration award; and provided,
further, that the Date of Termination shall be extended by a notice of
dispute only if such notice is given in good faith and the party giving
such notice pursues the resolution of such dispute with reasonable
diligence. Notwithstanding the pendency of any such dispute, the
Corporation will continue to pay you your full compensation in effect
when the notice giving rise to the dispute was given (including, but
not limited to, base salary), and continue you as a participant in all
compensation, benefit and insurance plans in which you were
participating when the notice giving rise to the dispute was given,
until the dispute is finally resolved in accordance with this
Subsection. Amounts paid under this Subsection, in addition to all
other amounts due under this Agreement, shall not be offset against or
reduce any other amounts due under this Agreement and shall not be
reduced by any compensation earned by you as the result of employment
by another employer.
5. Compensation Upon Termination or During Disability. Following a
Change in Control of the Corporation, you shall be entitled to the following
benefits during a period of disability, or upon termination of your employment,
as the case may be, provided that such period or termination occurs during the
term of this Agreement or, if earlier, within one year following such Change in
Control of the Corporation:
(i) During any period that you fail to perform your full-time
duties with the Corporation as a result of incapacity due to physical
or mental illness, you shall continue to receive your base salary at
the rate in effect at the commencement of any such period, reduced to
the extent disability benefits are actually received by you during this
period, until this Agreement is terminated pursuant to Section 4(ii)
hereof. Thereafter, or in the event your employment shall be terminated
by reason of your death, your benefits shall be determined under the
Corporation's retirement, insurance, disability and other compensation
programs then in effect in accordance with the terms of such programs.
(ii) If your employment shall be terminated by the Corporation
for Cause or by you other than on account of Constructive Termination,
the Corporation shall pay you your full base salary through the Date of
Termination at the rate in effect at the time Notice of Termination is
given, plus all other amounts to which you are entitled under any
compensation or benefit plan of the Corporation at the time such
payments are due, and the Corporation shall have no further obligations
to you under this Agreement.
(iii) If your employment by the Corporation shall be
terminated by you on account of Constructive Termination or by the
Corporation other than for Cause or Disability, then you shall be
entitled to the benefits provided below:
(a) no later than the fifth day following the Date of
Termination, the Corporation shall pay to you your full base
salary through the Date of Termination at the rate in effect
at the time Notice of Termination is given, plus all other
amounts to which you are entitled under any incentive, bonus
or other compensation plan of the Corporation, at the time
such payments are due;
(b) in lieu of any further salary payments to you for
periods subsequent to the Date of Termination, the Corporation
shall pay as severance pay to you, at the time specified in
Subsection (iv) hereof, a lump sum severance payment (together
with the payments provided in paragraph (c), below, the
"Severance Payments") equal to three (3) times the sum of (1)
your annual salary rate (including for this purpose any
deferred salary) as in effect as of the Date of Termination,
immediately prior to the Change in Control of the Corporation
or immediately prior to the first occurrence of an event or
circumstance constituting Constructive Termination, whichever
is greatest, and (2) your annual target bonus under the
applicable bonus or incentive compensation plans in respect of
the calendar year preceding that in which occurs the Date of
Termination, the Change in Control or the first occurrence of
an event or circumstance constituting Constructive
Termination, whichever date yields the greatest annual target
bonus;
(c) notwithstanding any provision of any annual or
long-term incentive plan to the contrary, in lieu of any
payments under any bonus or incentive compensation plan in
effect for the year in which your Date of Termination occurs,
the Corporation shall pay you in a lump sum, in cash, at the
time specified in Subsection (iv) hereof, (1) a pro rata
portion (based on the number of whole months, with a partial
month treated as a whole month, elapsed since the first day of
the calendar year in which the Date of Termination occurs) of
the target amount of all contingent awards granted under such
plans for all uncompleted periods, plus (2) the value
(assuming such value is a positive number) of any
undistributed bonus bank balance (or other amount or amounts
that have accumulated on your behalf), whether or not you
would then have been entitled to a distribution thereof, under
the Alltrista Corporation 1993 Economic Value Added Incentive
Compensation Plan for Key Members of Management, or any
successor thereto;
(d) in lieu of shares of common stock of the
Corporation ("Corporation Shares") issuable upon the exercise
of outstanding options ("Options"), if any, granted to you
under any Corporation stock option plan (which Options shall
be cancelled upon the making of the payment referred to
below), you shall receive within the time provided for in
Subsection (iv) hereof an amount in cash equal to the product
of (A) the excess of the higher of the closing price of
Corporation Shares as reported on the NASDAQ National Market
System, the American Stock Exchange or The New York Stock
Exchange, wherever listed, on or nearest the Date of
Termination or the highest per share price for Corporation
Shares actually paid in connection with any Change in Control
of the Corporation, over the per share exercise price of each
Option held by you (whether or not then fully exercisable),
times (B) the number of Corporation Shares covered by each
such Option;
(e) In addition to the benefits to which you are
entitled under the defined contribution plan or plans of the
Corporation, including the Corporation's [Savings and
Retirement Plan] or any successor plan thereto (the "Defined
Contribution Plans") (without regard to any amendment to the
Defined Contribution Plans made subsequent to a Change in
Control of the Corporation and on or prior to the Date of
Termination, which amendment adversely affects in any manner
the computation of benefits under such plans), the Corporation
shall pay to you in a lump sum, in cash, at the time specified
in Subsection (iv) hereof, an amount equal to three (3) times
the value of the matching or other employer contributions that
the Corporation would have made to each such plan during the
plan year immediately preceding the Date of Termination, the
Change in Control, or the first occurrence of an event or
circumstance constituting Constructive Termination, whichever
date yields the highest value, at your rate of salary in
effect on the Date of Termination, immediately prior to the
Change in Control of the Corporation or immediately prior to
the first occurrence of an event or circumstance constituting
Constructive Termination, whichever is greatest, determined as
if you had contributed the maximum amount permitted pursuant
to applicable law and the terms of such plan during any such
year and accumulated thereunder three (3) additional years of
service for purposes of eligibility and vesting (after the
Date of Termination);
(f) for the thirty-six (36) month period beginning
with your termination of employment, the Corporation shall
arrange to provide you and your dependents with life,
disability, accident and health insurance benefits
substantially similar to those that you were receiving
immediately prior to the Notice of Termination, or if more
favorable to you, the first occurrence of an event or
circumstance constituting Constructive Termination. Benefits
otherwise receivable by you pursuant to this paragraph (f)
shall be reduced to the extent comparable benefits are
actually received by you from any and all successor employers
during the thirty-six (36) month period following the Date of
Termination, and any such benefits actually received by you
shall be reported to the Corporation; provided, however, that,
unless you consent to a different method (after taking into
account the effect of such method on the calculation of
"parachute payments" pursuant to Subsection (vi) hereof), such
health insurance benefits shall be provided through a
third-party insurer; and provided further, however, that the
Corporation shall reimburse you for the excess, if any, of the
cost of such benefits to you over such cost immediately prior
to the Date of Termination or, if more favorable to you, the
cost of such benefits to you as of the first occurrence of an
event or circumstance constituting Constructive Termination;
(g) the Corporation shall pay to you all reasonable
legal fees and expenses incurred by you as a result of such
termination (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or in
seeking to obtain or enforce any right or benefit provided by
this Agreement) unless the decision-maker in any proceeding,
contest or dispute arising hereunder makes a formal finding
that you did not have a reasonable basis for instituting such
proceeding, contest or dispute;
(h) the Corporation shall provide you with individual
outplacement services in accordance with the general custom
and practice generally accorded to an executive of your
position.
(iv) Except as provided in Subsection (vi) hereof, the
payments provided for in Subsections (iii) (b), (c), (d) and (e) above,
shall be made not later than the fifth day following the Date of
Termination; provided, however, that if the amounts of such payments
cannot be finally determined on or before such day, the Corporation
shall pay to you on such day an estimate, as determined in good faith
by the Corporation, of the minimum amount of such payments and shall
pay the remainder of such payments (together with interest at the rate
provided in section 1274(b)(2)(B) of the Internal Revenue Code of 1986,
as amended (the "Code")) as soon as the amount thereof can be
determined but in no event later than the thirtieth day after the Date
of Termination. In the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such
excess shall constitute a loan by the Corporation to you, payable on
the fifth day after demand by the Corporation (together with interest
at the rate provided in section 1274(b)(2)(B) of the Code).
(v) Except as provided in Subsection (iii)(f) hereof, you
shall not be required to mitigate the amount of any payment provided
for in this Section 5 by seeking other employment or otherwise, nor
shall the amount of any payment or benefit provided for in this Section
5 be reduced by any compensation earned by you as the result of
employment by another employer, by retirement benefits, by offset
against any amount claimed to be owed to you to the Corporation, or
otherwise.
Whether or not you become entitled to the Severance
Payments, if any of the payments or benefits received or to be received
by you in connection with a Change in Control of the Corporation or
your termination of employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the
Corporation, any person whose actions result in a Change in Control of
the Corporation or any person affiliated with the Corporation or such
person) (such payments or benefits, excluding the "Gross-Up Payment"
(as defined below) being hereinafter referred to as the "Total
Payments") will be subject to any excise tax imposed under section 4999
of the Code (the "Excise Tax"), the Corporation shall pay to you an
additional amount (the "Gross-Up Payment") such that the net amount
retained by you, after deduction of any Excise Tax on the Total
Payments and any federal, state and local income and employment taxes
and Excise Tax upon the Gross-Up Payment, shall be equal to the Total
Payments.
For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such
Excise Tax, (i) all of the Total Payments shall be treated as
"parachute payments" (within the meaning of section 280G(b)(2) of the
Code) unless, in the opinion of tax counsel ("Tax Counsel") reasonably
acceptable to you and selected by the accounting firm which was,
immediately prior to the Change in Control of the Corporation, the
Corporation's independent auditor (the "Auditor"), such payments or
benefits (in whole or in part) do not constitute parachute payments,
including by reason of section 280G(b)(4)(A) of the Code, (ii) all
"excess parachute payments" within the meaning of section 280G(b)(1) of
the Code shall be treated as subject to the Excise Tax unless, in the
opinion of Tax Counsel, such excess parachute payments (in whole or in
part) represent reasonable compensation for services actually rendered
(within the meaning of section 280G(b)(4)(B) of the Code) in excess of
the "base amount" (as defined in section 280G(b)(3) of the Code)
allocable to such reasonable compensation, or are otherwise not subject
to the Excise Tax, and (iii) the value of any noncash benefits or any
deferred payment or benefit shall be determined by the Auditor in
accordance with the principles of sections 280G(d)(3) and (4) of the
Code. For purposes of determining the amount of the Gross-Up Payment,
you shall be deemed to pay federal income tax 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 the state and locality of your
residence on the Date of Termination (or if there is no Date of
Termination, then the date on which the Gross-Up Payment is calculated
for purposes of this Subsection vi), net of the maximum applicable
reduction in federal income taxes which could be obtained from
deduction of such state and local taxes.
In the event that the Excise Tax is finally determined to
be less than the amount taken into account hereunder in calculating the
Gross-Up Payment, you shall repay to the Corporation, within five (5)
business days following the time that the amount of such reduction in
the Excise Tax is finally determined, the portion of the Gross-Up
Payment attributable to such reduction (plus that portion of the
Gross-Up Payment attributable to the Excise Tax and federal, state and
local income and employment taxes imposed on the Gross-Up Payment being
repaid by you, to the extent that such repayment results in a reduction
in the Excise Tax and a dollar-for-dollar reduction in your taxable
income and wages for purposes of federal, state and local income and
employment taxes, plus interest on the amount of such repayment at 120%
of the rate provided in section 1274(b)(2)(B) of the Code. In the event
that the Excise Tax is determined to exceed the amount taken into
account hereunder in calculating the Gross-Up Payment (including by
reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Corporation shall
make an additional Gross-Up Payment in respect of such excess (plus any
interest, penalties or additions payable by you with respect to such
excess) within five (5) business days following the time that the
amount of such excess is finally determined. You and the Corporation
shall each reasonably cooperate with the other in connection with any
administrative or judicial proceedings concerning the existence or
amount of liability for Excise Tax with respect to the Total Payments.
(vi) As soon as practicable, following a Takeover Threat, or
in any event, within twenty (20) business days thereafter, the
Corporation agrees it will establish and fund an irrevocable grantor
trust in an amount sufficient to provide for all cash payments of
benefits specified in Section 5, assuming that you were entitled to
such benefits, plus an additional $50,000 to cover the legal fees
referred to in Section 5(iii)(g).
6. Successors-, Binding Agreement.
(i) 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 that the Corporation would be required to
perform it if no such succession had taken place. Failure of the
Corporation to obtain such assumption and agreement prior to the
effectiveness of any such succession shall be a breach of this
Agreement and shall entitle you to compensation from the Corporation in
the same amount and on the same terms to which you would be entitled
hereunder if you terminate your employment on account of Constructive
Termination following a Change in Control of the Corporation, except
that for the purposes of implementing the foregoing, the date on which
any such succession becomes effective shall be deemed the Date of
Termination. 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.
(ii) This Agreement shall inure to the benefit of and be
enforceable by you and your personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisee and
legatees. If you should die while any amount would still be payable to
you hereunder had you continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms
of this Agreement to your devisee, legatee or other designee or, if
there is no such designee, to your estate.
7. Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by the United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notice to the Corporation shall be directed to the
attention of the Board with a copy to the Secretary of the Corporation, or to
such other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.
8. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by you and such officer as may be specifically designated
by the Board. No waiver by either party hereto at that 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. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Indiana without regard to its conflicts of law
principles. All references to section of the Exchange Act or the Code shall be
deemed also to refer to any successor provisions to such sections. Any payments
provided for hereunder shall be paid net of any applicable withholding required
under federal, state or local law. The obligations of the corporation under
Section 5 shall survive the expiration of the term of this Agreement.
9. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
10. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
11. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration,
conducted before a panel of three arbitrators in Muncie, Indiana in accordance
with the rules of the American Arbitration Association then in effect. Judgment
may be entered on the arbitrator's award in any court having jurisdiction;
provided, however, that you shall be entitled to seek specific performance of
your right to be paid until the Date of Termination during the pendency of any
dispute or controversy arising under or in connection with this Agreement.
12. Entire Agreement. This Agreement sets forth the entire agreement of
the parties hereto in respect of the subject matter contained herein and
supersedes all prior agreements, promises, covenants, arrangements,
communications representations or warranties, whether oral or written, by any
officer, employee or representative of any party hereto; and any prior agreement
of the parties hereto in respect of the subject matter contained herein is
hereby terminated and cancelled.
If this letter sets forth our agreement on the subject matter
hereof, kindly sign both copies and return one, in the enclosed envelope, to the
Corporation, which will then constitute our agreement on this subject.
Sincerely.
ALLTRISTA CORPORATION
By: ____________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
President and CEO
Agreed to this ______ day of [Date].
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[Name]