Exhibit No. 10
AGREEMENT
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THIS AGREEMENT, dated as of August , 1997, is made by and between ▇▇▇▇▇▇▇▇▇
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World Industries, Inc., a Pennsylvania corporation (the "Company"), and
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ (the "Executive").
WHEREAS, the Board considers it essential to the best interests of the
Company to ▇▇▇▇▇▇ the continued employment of key management personnel; and
WHEREAS, the Board recognizes that, as is the case with many publicly
held corporations, the possibility of a Change in Control 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 Company; and
WHEREAS, the Board has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Company's management, including the Executive, to their assigned
duties without distraction in the face of potentially disturbing circumstances
arising from the possibility of a Change in Control;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby agree as
follows:
1. Defined Terms. The definitions of capitalized terms used in this
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Agreement are provided in the last Section hereof.
2. Term of Agreement. This Agreement shall commence on the date
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hereof and shall continue in effect through December 31, 1999; provided,
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however, that commencing on January 1, 1999 and each January 1 thereafter, the
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term of this Agreement shall automatically be extended for one additional year
unless, not later than September 30 of the preceding year, the Company or the
Executive shall have given notice not to extend this Agreement or a Change in
Control shall have occurred prior to such January 1; and further provided,
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however, that if a Change in Control shall have occurred during the term of this
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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.
3. Company's Covenants Summarized. In order to induce the Executive
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to remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company agrees, under the
conditions described herein, to pay the Executive the Severance Payments and the
other payments and benefits described herein. Except as provided in Section 10.1
hereof, no amount or benefit shall be payable under this Agreement unless there
shall have been (or, under the terms of the second sentence of Section 6.1
hereof, there shall be deemed to have been) a termination of the Executive's
employment with the Company following a Change in Control and during the term of
this Agreement. This
Agreement shall not be construed as creating an express or implied contract of
employment and, except as otherwise agreed in writing between the Executive and
the Company, the Executive shall not have any right to be retained in the employ
of the Company.
4. The Executive's Covenants. The Executive agrees that, subject to
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the terms and conditions of this Agreement, in the event of a Potential Change
in Control during the term of this Agreement, the Executive will remain in the
employ of the Company until the earliest of (i) a date which is six (6) months
after the date of such Potential Change in Control, (ii) the date of a Change in
Control, (iii) the date of termination by the Executive of the Executive's
employment for Good Reason or by reason of death or Disability, or (iv) the
termination by the Company of the Executive's employment for any reason.
5. Compensation Other Than Severance Payments.
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5.1. Following a Change in Control and during the term of this
Agreement, during any period that the Executive fails to perform the Executive's
full-time duties with the Company as a result of incapacity due to physical or
mental illness, the Company shall pay the Executive's full salary to the
Executive at the rate in effect at the commencement of any such period, together
with all compensation and benefits payable to the Executive under the terms of
any compensation or benefit plan, program or arrangement maintained by the
Company during such period, until the Executive's employment is terminated by
the Company for Disability.
5.2. If the Executive's employment shall be terminated for any reason
following a Change in Control and during the term of this Agreement, the Company
shall pay the Executive's full salary to the Executive through the Date of
Termination at the rate in effect immediately prior to the Change in Control or
at the time the Notice of Termination is given, whichever is greater, together
with all compensation and benefits to which the Executive is entitled in respect
of all periods preceding the Date of Termination under the terms of the
Company's compensation and benefit plans, programs or arrangements.
5.3. If the Executive's employment shall be terminated for any reason
following a Change in Control and during the term of this Agreement, the Company
shall pay to the Executive the Executive's normal post-termination compensation
and benefits as such payments become due. Such post-termination compensation and
benefits shall be determined under, and paid in accordance with, the Company's
retirement, insurance and other compensation or benefit plans, programs and
arrangements as in effect immediately prior to the Change in Control or, if more
favorable to the Executive, as in effect immediately prior to the Date of
Termination.
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6. Severance Payments.
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6.1. The Company shall pay the Executive the payments described in
this Section 6.1 (the "Severance Payments") upon the termination of the
Executive's employment following a Change in Control and during the term of this
Agreement, in addition to any payments and benefits to which the Executive is
entitled under Section 5 and 8 hereof, unless such termination is (i) by the
Company for Cause, (ii) by reason of death or Disability, or (iii) by the
Executive without Good Reason. For purposes of this Agreement, the Executive's
employment shall be deemed to have been terminated by the Company without Cause
or by the Executive with Good Reason following a Change in Control if (i) the
Executive's employment is terminated without Cause prior to a Change in Control
which actually occurs during the term of this Agreement and such termination was
at the request or direction of a Person who has entered into an agreement with
the Company the consummation of which would constitute a Change in Control, (ii)
the Executive terminates his employment with Good Reason prior to a Change in
Control which actually occurs during the term of this Agreement and the
circumstance or event which constitutes Good Reason occurs at the request or
direction of such Person, (iii) the Executive's employment is terminated without
Cause prior to a Change in Control and the Executive reasonably demonstrates
that such termination is otherwise in connection with or in anticipation of a
Change in Control which actually occurs during the term of this Agreement, or
(iv) the Executive's employment is terminated without Cause after a Potential
Change in Control of the type described in paragraphs (I) or (IV) of the
definition of "Potential Change in Control".
(A) In lieu of any further salary payments to the Executive for
periods subsequent to the Date of Termination and in lieu of any severance
benefit otherwise payable to the Executive, the Company shall pay to the
Executive a lump sum severance payment, in cash, equal to three (3) times
the sum of (i) the higher of the Executive's annual base salary in effect
immediately prior to the occurrence of the event or circumstance upon which
the Notice of Termination is based or the Executive's annual base salary in
effect immediately prior to the Change in Control (the "Change in Control
Salary"), and (ii) the higher of the annual bonus earned by the Executive
pursuant to any annual bonus or incentive plan maintained by the Company in
respect of the three (3) years immediately preceding that year in which the
Date of Termination occurs or the annual bonus so earned in respect of the
three (3) years immediately preceding that year in which the Change in
Control occurs (the "Change in Control Bonus").
(B) Notwithstanding any provision of any annual incentive plan to
the contrary, the Company shall pay to the Executive a lump sum amount, in
cash, equal to a pro rata portion to the Date of Termination of the value
of the target incentive award under such plan for the then uncompleted
period under such plan, calculated by multiplying the Executive's target
award by the fraction obtained by
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dividing the number of full months and any fractional portion of a
month during such performance award period through the Date of Termination
by the total number of months contained in such performance award period.
(C) The Company shall (i) establish an irrevocable grantor trust
holding an amount of assets sufficient to pay all such remaining premiums
owed by the Company (which trust shall be required to pay such premiums),
under any insurance policy insuring the life of the Executive under any
"split dollar" insurance arrangement in effect between the Executive and
the Company, and (ii) assign its interest in such policy or policies to the
grantor trust.
(D) In addition to the retirement benefits to which the Executive
is entitled under each Pension Plan or any successor plan thereto, the
Company shall pay the Executive a lump sum amount, in cash, equal to the
excess of (i) the actuarial equivalent of the aggregate retirement pension
(taking into account any early retirement subsidies associated therewith
and determined as a straight life annuity commencing at the date (but in no
event earlier than the third anniversary of the Date of Termination) as of
which the actuarial equivalent of such annuity is greatest) which the
Executive would have accrued under the terms of all Pension Plans (without
regard to any amendment to any Pension Plan made subsequent to the earlier
of a Potential Change in Control or a Change in Control and on or prior to
the Date of Termination, which amendment adversely affects in any manner
the computation of retirement benefits thereunder), determined as if the
Executive were fully vested thereunder and had accumulated (after the Date
of Termination) thirty-six (36) additional months of service credit
thereunder and had been credited under each Pension Plan during such period
with compensation at the higher of (1) the Executive's compensation (as
defined in such Pension Plan) during the twelve (12) months immediately
preceding the Date of Termination or (2) the Executive's compensation (as
defined in such Pension Plan) during the twelve (12) months immediately
preceding the Change in Control, over (ii) the actuarial equivalent of the
aggregate retirement pension (taking into account any early retirement
subsidies associated therewith and determined as a straight life annuity
commencing at the date (but in no event earlier than the Date of
Termination) as of which the actuarial equivalent of such annuity is
greatest) which the Executive had accrued pursuant to the provisions of the
Pension Plans as of the Date of Termination; provided, that the actuarial
equivalent of such payment shall reduce the amount of the benefit
enhancement to which the executive may be entitled under the Company's
Retirement Benefit Equity Plan due to enhanced Change in Control benefits
under Article I, Section (35), Article VI, Section (2), Article VI, Section
(7), and Article VII, Section (6) of the Company's Retirement Income Plan.
For purposes of this Section 6.1(D), "actuarial equivalent" shall be
determined using the same assumptions utilized under the Company's
Retirement Income Plan immediately prior to the Change in Control, to
determine lump sum present values under Article VII, Section (7) of the
Company's Retirement Income Plan.
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(E) For the thirty-six (36) month period immediately following
the Date of Termination, the Company shall arrange to provide the Executive
(which includes the Executive's eligible dependents for purposes of this
paragraph (E)) with life, disability, accident and health insurance
benefits substantially similar to those which the Executive was receiving
immediately prior to the Notice of Termination (without giving effect to
any amendment to such benefits made subsequent to the earlier of a
Potential Change in Control or a Change in Control which amendment
adversely affects in any manner the Executive's entitlement to or the
amount of such benefits); provided, however, that, unless the Executive
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consents to a different method, such health insurance benefits shall be
provided through a third-party insurer. Benefits otherwise receivable by
the Executive pursuant to this Section 6.1(E) shall be reduced to the
extent comparable benefits are actually received by or made available to
the Executive by a subsequent employer without cost during the thirty-six
(36) month period following the Executive's termination of employment (and
any such benefits actually received by or made available to the Executive
shall be reported to the Company by the Executive).
(F) If the Executive would have become entitled to benefits under
the Company's post-retirement health care or life insurance plans (as in
effect immediately prior to a Potential Change in Control, the Change in
Control or the Date of Termination, whichever is most favorable to the
Executive) had the Executive's employment terminated at any time during the
period of thirty-six (36) months after the Date of Termination, the Company
shall provide such post-retirement health care or life insurance benefits
to the Executive (subject to any employee contributions required under the
terms of such plans at the level in effect immediately prior to the Change
in Control or the Date of Termination, whichever is more favorable to the
Executive) commencing on the later of (i) the date that such coverage would
have first become available or (ii) the date that benefits described in
subsection (E) of this Section 6.1 terminate.
(G) The Company will pay the Executive, at a daily salary rate
calculated from the higher of the Executive's annual base salary in effect
immediately prior to the occurrence of the event or circumstance upon which
the Notice of Termination is based or the Executive's annual base salary in
effect immediately prior to the Change in Control, an amount equal to all
unused vacation days which would have been earned had the Executive
continued employment through December 31 of the year in which the Date of
Termination occurs.
(H) The Company shall pay the reasonable fees and expenses of a
full service nationally recognized executive outplacement firm until the
earlier of the date the Executive secures new employment or the date which
is thirty-six (36) months following the Executive's Date of Termination;
provided, that in no event shall the aggregate amount of such payment be
greater than 20% of the Executive's Change in Control Salary.
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6.2. (A) Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that any payment or distribution by the
Company 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) (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 the 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") in 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, any
income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed on the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the
Payments.
(B) Subject to the provisions of Section 6.2(C), all
determinations required to be made under this Section 6.2, including
whether and when a Gross-Up Payment is required and the amount of such
Gross-Up Payment, shall be made by a nationally recognized accounting firm
designated by the Company (the "Accounting Firm") which shall provide
detailed supporting calculations both to the Company and the Executive
within fifteen (15) business days after there has been a Payment, or such
earlier time as requested by the Company. In the event that the Accounting
Firm is serving as accountant or auditor for the individual, entity or
group effecting the Change in Control, the Company shall appoint another
nationally recognized 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 6, shall be paid by the Company 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 the Company and
the Executive. As a result of the 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 the Company should have been made ("Underpayment"), consistent
with the calculations required to be made hereunder. In the event that the
Company exhausts its remedies pursuant to Section 6.2(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 the Company to or for the
benefit of the Executive.
(C) The 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
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practicable but no later than ten (10)business days after the 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. The Executive shall not pay such claim prior to the expiration of the
30-day period following the date on which it gives such notice to the
Company (or such shorter period ending on the date any payment of taxes
with respect to such claim is due). If the Company notifies the Executive
in writing prior to the expiration of such period that it desires to
contest such claim, the Executive shall:
(i) give the Company any information reasonably
requested by the Company relating to such claim;
(ii) 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;
(iii) cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) permit the Company to participate in any
proceedings 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 the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax
(including interest and penalties with respect thereto) imposed as a result
of such representation and payment of costs and expenses. Without
limitation on the foregoing provisions of this Section 6.2(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 the Executive to
pay the tax 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 the Company shall
determine; provided, however, that if the Company directs the Executive to
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pay such claim and ▇▇▇ for a refund, the Company shall advance the amount
of such payment to the Executive, on an interest-free basis, and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or income 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 further provided that any
extension of the statute of limitations relating to payment of taxes for
the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the
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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.
(D) If, after the receipt by the Executive of an
amount advanced by the Company pursuant to Section 6.2(C), the Executive
becomes entitled to receive any refund with respect to such claim, the
Executive shall (subject to the Company's complying with the requirements
of Section 6.2(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 the Executive of an amount advanced by
the Company pursuant to Section 6.2(C), a determination is made that the
Executive shall not be entitled to any refund with respect to such claim
and the Company 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 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.
6.3. The payments provided for in subsections (A), (B), (C), (D) and
(G) of Section 6.1 hereof shall be made not later than the fifth (5th) day
following the Date of Termination; provided, however, that if the amounts of
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such payments cannot be finally determined on or before such day, the Company
shall pay to the Executive on such day an estimate, as determined in good faith
by the Executive of the minimum amount of such payments to which the Executive
is clearly entitled and shall pay the remainder of such payments (together with
interest at 120% of the rate provided in section 1274(b)(2)(B) of the Code) as
soon as the amount thereof can be determined but in no event later than the
thirtieth (30th) 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 Company to the Executive,
payable on the fifth (5th) business day after demand by the Company (together
with interest at 120% of the rate provided in section 1274(b)(2)(B) of the
Code). In the event the Company should fail to pay when due the amounts
described in subsections (A), (B), (C), (D) and (G) of Section 6.1 hereof, the
Executive shall also be entitled to receive from the Company an amount
representing interest on any unpaid or untimely paid amounts from the due date,
as determined under this Section 6.3 (without regard to any extension of the
Date of Termination pursuant to Section 7.3 hereof), to the date of payment at a
rate equal to 120% of the rate provided in section 1274(b)(2)(B) of the Code.
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6.4. The Company also shall pay to the Executive all legal fees and
expenses incurred by the Executive in disputing in good faith any issue
hereunder relating to the termination of the Executive's employment, in seeking
in good faith to obtain or enforce any benefit or right provided by this
Agreement or in connection with any tax audit or proceeding to the extent
attributable to the application of section 4999 of the Code to any payment or
benefit provided hereunder. Such payments shall be made within five (5) business
days after delivery of the Executive's written requests for payment accompanied
with such evidence of fees and expenses incurred as the Company reasonably may
require.
7. Termination Procedures and Compensation During Dispute.
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7.1. Notice of Termination. After a Potential Change in Control or, if
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there is no Potential Change in Control, after a Change in Control and during
the term of this Agreement, any purported termination of the Executive's
employment (other than by reason of death) shall be communicated by written
Notice of Termination from one party hereto to the other party hereto in
accordance with Section 11 hereof. For purposes of this Agreement, a "Notice of
Termination" shall mean a notice which 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 the
Executive's employment under the provision so indicated. Further, a Notice of
Termination for Cause is required to include 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 which was called and held for
the purpose of considering such termination (after reasonable notice to the
Executive and an opportunity for the Executive, together with the Executive's
counsel, to be heard before the Board) finding that, in the good-faith opinion
of the Board, the Executive was guilty of conduct set forth in clause (i) or
(ii) of the definition of Cause herein, and specifying the particulars thereof
in detail.
7.2. Date of Termination. "Date of Termination," with respect to any
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purported termination of the Executive's employment after a Change in Control
and during the term of this Agreement, shall mean (i) if the Executive's
employment is terminated for Disability, thirty (30) days after Notice of
Termination is given (provided that the Executive shall not have returned to the
full-time performance of the Executive's duties during such thirty (30) day
period), and (ii) if the Executive's employment is terminated for any other
reason, the date specified in the Notice of Termination (which, in the case of a
termination by the Company, shall not be less than thirty (30) days (except in
the case of a termination for Cause) and, in the case of a termination by the
Executive, shall not be less than fifteen (15) days nor more than sixty (60)
days, respectively, from the date such Notice of Termination is given).
7.3. Dispute Concerning Termination. If within fifteen (15) days after
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any Notice of Termination is given, or, if later, prior to the Date of
Termination (as determined without regard to this Section 7.3), the party
receiving such Notice of Termination notifies
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the other party that a dispute exists concerning the termination, the Date of
Termination shall be extended until the date on which the dispute is finally
resolved, either by mutual written agreement of the parties or by a final
judgment, order or decree of an arbitrator or a court of competent jurisdiction
(which is not appealable or with respect to which the time for appeal therefrom
has expired and no appeal has been perfected); provided, however, that the Date
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of Termination shall be extended by a notice of dispute given by the Executive
only if such notice is given in good faith and the Executive pursues the
resolution of such dispute with reasonable diligence.
7.4. Compensation During Dispute. If a purported termination occurs
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following a Change in Control and during the term of this Agreement and the Date
of Termination is extended in accordance with Section 7.3 hereof, the Company
shall continue to pay the Executive the full compensation in effect when the
notice giving rise to the dispute was given (including, but not limited to,
salary) and continue the Executive as a participant in all compensation, benefit
and insurance plans in which the Executive was participating when the notice
giving rise to the dispute was given, until the Date of Termination, as
determined in accordance with Section 7.3 hereof. Amounts paid under this
Section 7.4 are in addition to all other amounts due under this Agreement and
shall not be offset against or reduce any other amounts due under this
Agreement.
8. Acceleration of Certain Stock-Based Benefits.
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(A) Upon the occurrence of a Change in Control, all unvested options
with respect to the Company's stock held by the Executive shall vest and become
immediately exercisable and will be exercisable for a period ending on the later
of (i) the fifth anniversary of such Change in Control or (ii) the last date
that such option would otherwise be exercisable under the terms of the option
agreement or the plan pursuant to which such option was granted; provided, that
in no event shall any option be exercisable after the expiration of the original
term of the option.
(B) Upon the occurrence of a Change in Control, all unearned
performance restricted shares held by the Executive under the Company's Stock
Plan shall be deemed to have been earned to the maximum extent permitted under
the Stock Plan for any performance period not then completed and all earned but
unvested performance restricted shares, including those deemed to be earned
pursuant to this sentence, and all unvested restricted stock awards shall
immediately vest and the restrictions on all shares subject to restriction shall
lapse.
(C) For purposes of the Stock Plan and any stock option plan pursuant
to which any stock options, performance restricted shares or restricted stock
awards have been issued, this Agreement, which has been approved by the
Management Development and Compensation Committee of the Board, shall constitute
an amendment of the agreement or other instruments pursuant to which such stock
options, performance restricted shares and restricted stock awards were issued
in accordance with the terms of such plans.
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Notwithstanding the foregoing, in the event that this Section 8(C) is determined
for any reason to be inconsistent with the terms of any plan pursuant to which
such stock options, performance restricted shares and restricted stock awards
were issued, the terms of this Agreement shall supersede the terms of such plan.
9. No Mitigation. The Company agrees that, if the Executive's
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employment with the Company terminates during the term of this Agreement, the
Executive is not required to seek other employment or to attempt in any way to
reduce any amounts payable to the Executive by the Company pursuant to Section 6
hereof or Section 7.4 hereof. Further, the amount of any payment or benefit
provided for in this Agreement (other than Section 6.1(E) hereof) shall not be
reduced by any compensation earned by the Executive as the result of employment
by another employer, by retirement benefits, by offset against any amount
claimed to be owed by the Executive to the Company, or otherwise.
10. Successors; Binding Agreement.
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10.1. In addition to any obligations imposed by law upon any successor
to the Company, the Company 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 Company to expressly
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no such succession
had taken place. Failure of the Company to obtain such assumption and agreement
prior to the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as the Executive would be entitled to
hereunder if the Executive were to terminate the Executive's employment for Good
Reason after a Change in Control, except that, for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination.
10.2. This Agreement shall inure to the benefit of and be enforceable
by the Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive shall
die while any amount would still be payable to the Executive hereunder (other
than amounts which, by their terms, terminate upon the death of the Executive)
if the Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the executors, personal representatives or administrators of the Executive's
estate.
11. Notices. For the purpose of this Agreement, notices and all other
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communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed, if to the
Executive, to the address shown for the Executive in the personnel records of
the Company and, if to the Company, to the
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address set forth below, 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 actual receipt:
To the Company:
▇▇▇▇▇▇▇▇▇ World Industries, Inc.
Liberty and ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
12. Miscellaneous. No provision of this Agreement may be modified,
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waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or of any lack of 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. This Agreement supersedes any other
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof which have been made by either party. The
validity, interpretation, construction and performance of this Agreement shall
be governed by the laws of the Commonwealth of Pennsylvania. All references to
sections 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 and any additional withholding to which the Executive has agreed. The
obligations of the Company and the Executive under Sections 6 and 7 hereof shall
survive the expiration of the term of this Agreement. If the Executive elects
not to enter this Agreement, he will continue to be eligible for change in
control benefits provided under the Company's Employment Protection Plan,
Retirement Income Plan and long-term incentive plans. The Executive agrees that
this Agreement replaces the benefits to which he may otherwise be entitled to
under the Company's Employment Protection Plan for salaried employees.
13. Validity. The invalidity or unenforceability of any provision of
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this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
14. Counterparts. This Agreement may be executed in several
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counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
15. Settlement of Disputes; Arbitration. All claims by the Executive
-----------------------------------
for benefits under this Agreement shall be directed in writing to and determined
by the Committee, which shall give full consideration to the evidentiary
standards set forth in this Agreement. Any denial by the Committee of a claim
for benefits under this Agreement
12
shall be delivered to the Executive in writing and shall set forth the specific
reasons for the denial and the specific provisions of this Agreement relied
upon. The Committee shall afford a reasonable opportunity to the Executive for a
review of the decision denying a claim and shall further allow the Executive to
appeal to the Committee a decision of the Committee within sixty (60) days after
notification by the Committee that the Executive's claim has been denied. Any
further dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration in Lancaster, Pennsylvania
in accordance with the rules of the American Arbitration Association then in
effect; provided, however, that the evidentiary standards set forth in this
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Agreement shall apply. Judgment may be entered on the arbitrator's award in any
court having jurisdiction. Notwithstanding any provision of this Agreement to
the contrary, the Executive shall be entitled to seek specific performance of
the Executive's 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.
16. Definitions. For purposes of this Agreement, the following terms
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shall have the meanings indicated below:
(A) "Accounting Firm" shall have the meaning stated in Section
6.2(B) hereof.
(B) "Beneficial Owner" shall have the meaning set forth in Rule
13d-3 under the Exchange Act.
(C) "Board" shall mean the Board of Directors of the Company.
(D) "Cause" for termination by the Company of the Executive's
employment shall mean (i) the deliberate and continued failure by the
Executive to devote substantially all the Executive's business time and
best efforts to the performance of the Executive's duties after a demand
for substantial performance is delivered to the Executive by the Board
which specifically identifies the manner in which the Executive has not
substantially performed such duties; or (ii) the deliberate engaging by
the Executive in gross misconduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise, including but not
limited to fraud or embezzlement by the Executive. For the purposes of
this Agreement, no act, or failure to act, on the part of the Executive
shall be considered "deliberate" unless done, or omitted to be done, by
the Executive not in good faith and without reasonable belief that such
action or omission was in the best interests of the Company. In the event
of a dispute concerning the application of this provision, no claim by the
Company that Cause exists shall be given effect unless the Company
establishes to the Committee by clear and convincing evidence that Cause
exists.
(E) A "Change in Control" shall be deemed to have occurred if the
event set forth in any one of the following paragraphs shall have
occurred:
13
(I) any Person is or becomes the Beneficial Owner,
directly or indirectly, of securities of the Company (not
including in the securities beneficially owned by such Person any
securities acquired directly from the Company or its affiliates)
representing 20% or more of either the then outstanding shares of
common stock of the Company or the combined voting power of the
Company's then outstanding securities, excluding any Person who
becomes such a Beneficial Owner in connection with a transaction
described in clause (i) of paragraph (III) below; or
(II) the following individuals cease for any reason to
constitute a majority of the number of directors then serving:
individuals who, on the date hereof, constitute the Board and any
new director (other than a director whose initial assumption of
office is in connection with an actual or threatened election
contest, including but not limited to a consent solicitation,
relating to the election of directors of the Company) whose
appointment or election by the Board or nomination for election
by the Company's shareholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either
were directors on the date hereof or whose appointment, election
or nomination for election was previously so approved; or
(III) there is consummated a merger or consolidation of
the Company with any other corporation other than (i) a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior to such merger or
consolidation continuing to represent (either by remaining
outstanding or by being converted into voting securities of the
surviving entity or any parent thereof) at least 66-2/3% of the
combined voting power of the voting securities of the Company or
such surviving entity or any parent thereof outstanding
immediately after such merger or consolidation, or (ii) a merger
or consolidation effected to implement a recapitalization of the
Company (or similar transaction) in which no Person is or becomes
the Beneficial Owner, directly or indirectly, of securities of
the Company (not including in the securities Beneficially Owned
by such Person any securities acquired directly from the Company
or its subsidiaries) representing 20% or more of either the then
outstanding shares of common stock of the Company or the combined
voting power of the Company's then outstanding securities; or
(IV) the shareholders of the Company approve a plan of
complete liquidation or dissolution of the Company or there is
consummated an agreement for the sale or disposition by the
Company of all or substantially all of the Company's assets,
other than
14
a sale or disposition by the Company of all or substantially all
of the Company's assets to an entity, at least 75% of the
combined voting power of the voting securities of which are owned
by shareholders of the Company in substantially the same
proportions as their ownership of the Company immediately prior
to such sale. Notwithstanding the foregoing, no "Change in
Control" shall be deemed to have occurred if there is consummated
any transaction or series of integrated transactions immediately
following which the record holders of the common stock of the
Company immediately prior to such transaction or series of
transactions continue to have substantially the same
proportionate ownership in an entity which owns all or
substantially all of the assets of the Company immediately
following such transaction or series of transactions.
(F) "Change in Control Salary" shall have the meaning stated in
Section 6.1 hereof.
(G) "Change in Control Bonus" shall have the meaning stated in
Section 6.1 hereof.
(H) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time.
(I) "Committee" shall mean (i) the individuals (not fewer than
three in number) who, on the date six (6) months before a Change in
Control, constitute the Management Development and Compensation Committee
of the Board, plus (ii) in the event that fewer than three individuals are
available from the group specified in clause (i) above for any reason,
such individuals as may be appointed by the individual or individuals so
available (including for this purpose any individual or individuals
previously so appointed under this clause (ii)).
(J) "Company" shall mean ▇▇▇▇▇▇▇▇▇ World Industries, Inc. and,
except in determining under Section 16(E) hereof whether or not any Change
in Control of the Company has occurred, shall include its subsidiaries and
any successor to its business and/or assets which assumes and agrees to
perform this Agreement by operation of law, or otherwise.
(K) "Date of Termination" shall have the meaning stated in
Section 7.2 hereof.
(L) "Disability" shall be deemed the reason for the termination
by the Company of the Executive's employment, if, as a result of the
Executive's incapacity due to physical or mental illness, the Executive
shall have been absent from the full-time performance of the Executive's
duties with the Company for a
15
period of six (6) consecutive months, the Company shall have given the
Executive a Notice of Termination for Disability, and, within thirty (30)
days after such Notice of Termination is given, the Executive shall not
have returned to the full-time performance of the Executive's duties.
(M) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(N) "Excise Tax" shall have the meaning stated in Section 6.2(A)
hereof.
(O) "Executive" shall mean the individual named in the first
paragraph of this Agreement.
(P) "Good Reason" for termination by the Executive of the
Executive's employment shall mean the occurrence (without the Executive's
express written consent) after any Change in Control, or prior to a Change
in Control under the circumstances described in clause (ii) of the second
sentence of Section 6.1 hereof (treating all references in paragraphs (I)
through (VII) below to a "Change in Control" as references to a "Potential
Change in Control"), of any one of the following acts by the Company, or
failures by the Company to act, unless, in the case of any act or failure
to act described in paragraph (I), (V) , (VI) or (VII) below, such act or
failure to act is corrected prior to the Date of Termination specified in
the Notice of Termination given in respect thereof:
(I) the assignment to the Executive of any duties
inconsistent with the Executive's status as an executive officer of
the Company or a substantial adverse alteration in the nature or
status of the Executive's responsibilities from those in effect
immediately prior to the Change in Control;
(II) a reduction by the Company in the Executive's
annual base salary as in effect on the date hereof or as the same
may be increased from time to time except for (i) across-the-board
salary reductions similarly affecting all salaried employees of the
Company or (ii) across-the-board salary reductions similarly
affecting all senior executive officers of the Company and all
senior executives of any Person in control of the Company;
(III) the relocation of the Executive's principal place
of employment to a location more than 50 miles from the Executive's
principal place of employment immediately prior to the Change in
Control (unless such relocation is closer to the Executive's
principal residence) or the Company's requiring the Executive to be
based anywhere other than such principal place of employment (or
permitted relocation thereof) except for required travel on the
Company's business to an extent substantially
16
consistent with the Executive's present business travel
obligations;
(IV) the failure by the Company, to pay to the Executive
any portion of the Executive's current compensation or to pay to
the Executive any portion of an installment of deferred
compensation under any deferred compensation program of the
Company, within seven (7) days of the date such compensation is
due;
(V) the failure by the Company to continue in effect
any compensation plan in which the Executive participates
immediately prior to the Change in Control which is material to the
Executive's total compensation, including but not limited to the
Company's Base Salary Plan, Management Achievement Plan, 1984 Long-
Term Stock Option Plan for Key Employees, 1993 Long-Term Stock
Incentive Plan, ▇▇▇▇▇▇▇▇▇ Deferred Compensation Plan, Retirement
Income Plan and Retirement Benefit Equity Plan, 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
Company to continue the Executive's participation therein (or in
such substitute or alternative plan) on a basis not materially less
favorable, both in terms of the amount or timing of payment of
benefits provided and the level of the Executive's participation
relative to other participants, as existed immediately prior to the
Change in Control;
(VI) the failure by the Company to continue to provide
the Executive with benefits substantially similar to those enjoyed
by the Executive under any of the Company's pension, savings, life
insurance, medical, health and accident, or disability plans in
which the Executive was participating immediately prior to the
Change in Control, the taking of any action by the Company which
would directly or indirectly materially reduce any of such benefits
or deprive the Executive of any material fringe benefit enjoyed by
the Executive at the time of the Change in Control, or the failure
by the Company to provide the Executive with the number of paid
vacation days to which the Executive is entitled on the basis of
years of service with the Company in accordance with the Company's
normal vacation policy in effect at the time of the Change in
Control; or
17
(VII) any purported termination of the Executive's
employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 7.1 hereof; for
purposes of this Agreement, no such purported termination shall be
effective.
The Executive's right to terminate the Executive's employment for
Good Reason shall not be affected by the Executive's incapacity due to physical
or mental illness. The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder. For purposes of any determination regarding
the existence of Good Reason, any claim by the Executive that Good Reason exists
shall be presumed to be correct unless the Company establishes to the Committee
by clear and convincing evidence that Good Reason does not exist.
(Q) "Gross-Up Payment" shall have the meaning stated in Section
6.2(A) hereof.
(R) "Notice of Termination" shall have the meaning stated in
Section 7.1 hereof.
(S) "Payment" shall have the meaning stated in Section 6.2(A)
hereof.
(T) "Pension Plan" shall mean any tax-qualified, supplemental or
excess benefit pension plan maintained by the Company and any other agreement
entered into between the Executive and the Company which is designed to provide
the Executive with supplemental retirement benefits.
(U) "Person" shall have the meaning given in Section 3(a)(9) of the
Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except
that such term shall not include (i) the Company or any of its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, (iv) a
corporation owned, directly or indirectly, by the shareholders of the Company in
substantially the same proportions as their ownership of stock of the Company,
or (v) an entity or entities which are eligible to file and have filed a
Schedule 13G under Rule 13d-l-(b) of the Exchange Act, which Schedule indicates
beneficial ownership of 15% or more of the outstanding shares of common stock of
the Company or the combined voting power of the Company's then outstanding
securities.
(V) "Potential Change in Control" shall be deemed to have occurred
if the event set forth in any one of the following paragraphs shall have
occurred:
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(I) the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change in
Control;
(II) the Company or any Person publicly announces an
intention to take or to consider taking actions which, if
consummated, would constitute a Change in Control;
(III) any Person becomes the Beneficial Owner, directly
or indirectly, of securities of the Company representing 15% or
more of either the then outstanding shares of common stock of the
Company or the combined voting power of the Company's then
outstanding securities (not including in the securities
beneficially owned by such Person any securities acquired directly
from the Company or its affiliates); or
(IV) the Board adopts a resolution to the effect that,
for purposes of this Agreement, a Potential Change in Control has
occurred.
(W) "Severance Payments" shall mean those payments described in
Section 6.1 hereof.
(X) "Stock Plan" shall mean the Company's Long-Term Stock Incentive
Plan, as the same may be amended from time to time, and any successor plan to
such plan.
(Y) "Underpayment" shall have the meaning stated in Section 6.2(B)
hereof.
▇▇▇▇▇▇▇▇▇ WORLD INDUSTRIES, INC.
By:
-----------------------------
Name: (ByName)
Title: (ByTitle)
--------------------------------
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SCHEDULE TO EXHIBIT NO. 10
The Company has entered into substantially similar agreements with certain
officers including its Executive Officers who are employees of ▇▇▇▇▇▇▇▇▇ World
Industries, Inc., other than ▇▇▇▇▇▇ ▇. Case and ▇▇▇▇▇ ▇. ▇▇▇▇▇, ▇▇.
20
