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CONFORMED COPY
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
_________________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) April 26, 2000
WHIRLPOOL CORPORATION
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(Exact name of registrant as specified in its charter)
Delaware 1-3932 38-1490038
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(State or other jurisdiction (Commission File (I.R.S. Employer
of incorporation) Number) Identification No.)
2000 M63 North, Benton Harbor, Michigan 49022-2692
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(Address of principal executive officers) (Zip Code)
(616)-923-5000
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Registrant's telephone number, including area code
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Item 5. Other Events
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The Registrant is hereby filing the following Compensation and Benefits
Assurance Agreements (severance agreements) that provide benefits to executive
officers in the event of a change of control of the corporation.
Exhibit 1 - Form of Compensation and Benefits Assurance Agreement covering
Messrs. Whitwam, Fettig, Kerber and Thieneman.
Exhibit 2 - Form of Compensation and Benefits Assurance Agreement covering
Mr. Paulo Periquito.
Item 7. Financial Statements and Exhibits
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Exhibit 1 - Form of Compensation and Benefits Assurance Agreement
covering Messrs. Whitwam, Fettig, Kerber and Thieneman.
Exhibit 2 - Form of Compensation and Benefits Assurance Agreement
covering Mr. Paulo Periquito.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
WHIRLPOOL CORPORATION
Registrant
Date: April 27, 2000 By: /s/ Robert T. Kenagy
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Name: Robert T. Kenagy
Title: Associate General Counsel and Secretary
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EXHIBIT 1
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Compensation and Benefits Assurance Agreement
This COMPENSATION AND BENEFITS ASSURANCE AGREEMENT (this "Agreement") is
made, entered into, and is effective as of this 8th day of March, 1999 (the
"Effective Date") by and between Whirlpool Corporation, a Delaware corporation
(hereinafter referred to as the "Company"), and the individual whose signature
appears on the signature page (hereinafter referred to as the "Executive").
WHEREAS, the Company considers the establishment and maintenance of a sound
and vital management to be essential to protecting and enhancing the best
interests of the Company and its shareholders. In this connection, the Company
recognizes that, as is the case with many publicly held corporations, the
possibility of a change in control may arise 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 its shareholders.
Accordingly, the Board of Directors of the Company (hereafter the "Board"
or the "Board of Directors") has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Company's management to their assigned duties without distraction
in circumstances arising from the possibility of a change in control of the
Company.
The Board also believes it important, should the Company or its
shareholders receive a proposal for transfer of control of the Company, that the
Executive be able to assess and advise the Board whether such proposal would be
in the best interests of the Company and its shareholders and to take such other
action regarding such proposal as the Board might determine to be appropriate,
without being influenced by the uncertainties of the Executive's own situation.
This Agreement, which has been approved by the Board, sets forth the
severance benefits which the Company agrees to provide to the Executive in the
event the Executive's employment with the Company is terminated subsequent to a
change in control under the circumstances described below. As provided in
Paragraph 6.8, this Agreement is intended to supersede all prior agreements
between the Company and the Executive concerning this matter.
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements of the parties set forth in this Agreement, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
SECTION 1. TERM OF AGREEMENT
1.1 INITIAL TERM. This Agreement will commence on the Effective Date and
shall continue in effect through December 31, 2000 (the "Initial Term").
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1.2 SUCCESSIVE PERIODS. The term of this Agreement automatically shall be
extended for two (2) additional years at the end of the Initial Term, and then
again after each successive two-year period thereafter (each such two-year
period following the Initial Term is referred to as a "Successive Period").
However, either party may terminate this Agreement at the end of the Initial
Term, or at the end of any Successive Period thereafter, by giving the other
party written notice of intent not to renew, delivered at least ninety (90)
calendar days prior to the end of such Initial Term or Successive Period. If
such notice is properly delivered by either party, this Agreement, along with
all corresponding rights, duties, and covenants, shall, except as provided in
Paragraph 6.7 hereof, automatically expire at the end of the Initial Term or
Successive Period then in progress.
1.3 CHANGE IN CONTROL RENEWAL. In the event that a Change in Control (as
defined in Paragraph 2.6) of the Company occurs during the Initial Term or any
Successive Period, upon the effective date of such Change in Control, the term
of this Agreement shall automatically and irrevocably be renewed for a period of
two (2) years from the effective date of such Change in Control. Further, this
Agreement may be assigned to the successor in such Change in Control, as further
provided in Section 4 herein. Subject to Paragraph 6.7, this Agreement shall
thereafter automatically terminate following such two (2) year Change in Control
renewal period.
1.4 TERMINATION PRIOR TO A CHANGE IN CONTROL. In the event that the
Executive's employment terminates for any reason prior to a Change in Control,
this Agreement, along with all corresponding rights, duties, and covenants,
shall, except as provided in Paragraph 5.1 hereof, automatically expire as of
the date of such employment termination.
SECTION 2. SEVERANCE AND RETIREMENT BENEFITS
2.1 RIGHT TO SEVERANCE BENEFITS. The Executive shall be entitled to
receive from the Company Severance Benefits, as described in Paragraph 2.5
herein, if during the term of this Agreement there has been a Change in Control
of the Company and if, within two (2) years immediately thereafter, the
Executive's employment with the Company shall end for any reason specified in
Paragraph 2.2 as being a Qualifying Termination. The Severance Benefits
described in Paragraphs 2.5(a), 2.5(b), and 2.5(c) shall be paid in cash to the
Executive in a single lump sum as soon as practicable following the Qualifying
Termination, but in no event later than ten (10) calendar days from such date,
and the Severance Benefits described in Paragraphs 2.5(d) and 2.5(e) shall
become irrevocably payable.
2.2 QUALIFYING TERMINATION. The occurrence of any one or more of the
following events, within two (2) years immediately following a Change in Control
of the Company along with delivery of a Notice of Termination as described in
Paragraph 2.4, shall be deemed a "Qualifying Termination" hereunder (with such
"Qualifying Termination" being deemed effective on the date of delivery of such
Notice of Termination) and, as such, shall trigger the payment of Severance
Benefits to the Executive, as such benefits are described under Paragraph 2.5
herein:
(a) The Company's involuntary termination of the Executive's
employment without Cause (as defined in Paragraph 2.3);
(b) The Executive's voluntary termination of employment for Good
Reason (as defined in Paragraph 2.7);
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(c) The Executive's voluntary termination of employment for any
reason during the thirteenth (13th) calendar month following the
month in which a Change in Control occurs, and only during such
thirteenth (13th) month; or
(d) The Company's material breach of any of the provisions of this
Agreement.
A Qualifying Termination shall not include a termination of the Executive's
employment within two (2) years after a Change in Control by reason of death,
Disability (as such term is defined under the Company's governing disability
plan, or any successor plan thereto), the Executive's voluntary termination
without Good Reason other than a voluntary termination during the thirteenth
(13th) calendar month following the month in which a Change in Control occurs
(as provided in Paragraph 2.2(c)), or the Company's involuntary termination of
the Executive's employment for Cause.
2.3 TERMINATION FOR CAUSE. The Executive shall not be deemed to have been
terminated for Cause unless and until (i) the Executive has received a copy of a
resolution, stating that the Executive has been terminated for Cause and stating
the particulars thereof in detail (the "Termination for Cause Resolution"), duly
adopted by the affirmative vote of not less than seventy-five percent (75%) of
the entire membership of the Board at a meeting of the Board called and held for
the purpose of making the determination to terminate the Executive for Cause;
and (ii) the Executive is provided with reasonable notice of such meeting and
the opportunity to appear with counsel to be heard by the Board at such meeting.
The Termination for Cause Resolution shall operate as a Notice of Termination
for purposes of this Agreement.
For purposes of this Agreement, "Cause" means (i) the Executive's willful
and continued failure to substantially perform the Executive's duties for the
Company (other than any such failure resulting from incapacity due to physical
or mental illness) after a demand to so substantially perform is delivered to
the Executive by the Chairman of the Board or President of the Company which
specifically identifies the manner in which the Executive has not substantially
performed the Executive's duties; or (ii) the Executive willfully engages in
illegal conduct which is materially and demonstratively injurious to the
Company.
No act, or failure to act, on the Executive's part shall be considered
"willful" unless done, or omitted to be done, by the Executive in bad faith and
without reasonable belief that such action or omission was in, or not opposed
to, the best interests of the Company. Any act or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or based upon
the advice of counsel for the Executive or the Company shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good faith and
in the best interests of the Company. It is also expressly understood that the
Executive's attention to matters not directly related to the business of the
Company shall not, in and of itself, constitute Cause.
2.4 NOTICE OF TERMINATION. To be complete, a Qualifying Termination must
be accompanied by the delivery to the Company (in compliance with Paragraph 5.2)
of a Notice of Termination from the Executive. For purposes of this Agreement, a
"Notice of Termination" shall mean a written document which states the specific
termination provisions in this Agreement relied upon to terminate the
Executive's employment and which sets forth in reasonable detail the facts and
circumstances providing the basis for such termination.
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2.5 DESCRIPTION OF SEVERANCE BENEFITS. In the event that the Executive
becomes entitled to receive Severance Benefits, as provided in Paragraphs 2.1
and 2.2 herein, the Company shall pay to the Executive and, in the case of
benefits, provide the Executive with the following (collectively referred to as
the "Severance Benefits"):
(a) A lump-sum cash amount equal to the Executive's unpaid Base
Salary, vacation pay equal to twice the annual accrual rate
appropriate for the Executive, based on the individual's length
of service with the Company, unreimbursed business expenses, and
all other items earned by and owed to the Executive through and
including the date of the Qualifying Termination except as
otherwise provided in clause (c) below. Such payment shall
constitute full satisfaction for these amounts owed to the
Executive. For all purposes of this Agreement, "Base Salary"
shall mean, at any time, the then regular annual rate of pay that
the Executive is earning as annual salary, whether or not
deferred.
(b) A lump-sum cash amount equal to the sum of (i) three (3)
multiplied by the Executive's annual rate of Base Salary in
effect upon the date of the Qualifying Termination or, if
greater, by the Executive's highest annual rate of Base Salary in
effect at any time during the twelve (12) months prior to the
occurrence of the Change in Control; plus (ii) three (3)
multiplied by the Executive's then current target bonus
opportunity (stated in terms of a percentage of Base Salary)
established under the Company's Performance Excellence Plan (or
any successor plan thereto), for the plan year in which the date
of the Executive's Qualifying Termination occurs, or, if greater,
by the Executive's highest target bonus opportunity in effect at
any time during the twelve (12) months prior to the occurrence of
the Change in Control.
(c) A lump-sum cash amount equal to the greater of (i) the
Executive's then-current target bonus opportunity (stated in
terms of a percentage of Base Salary) established under the
Company's Performance Excellence Plan (or any successor plan
thereto), for the plan year in which the Executive's date of
Qualifying Termination occurs, adjusted on a pro rata basis based
on the number of days the Executive was actually employed during
such plan year (but in no event shall such target bonus
opportunity be less than the highest target bonus opportunity in
effect at any time during the twelve (12) months prior to the
occurrence of the Change in Control); or (ii) the actual bonus
earned through the date of the Qualifying Termination under the
Company's Performance Excellence Plan (or any successor plan
thereto), based on the then-current level of goal achievement.
Such payment shall constitute full satisfaction for these amounts
owed to the Executive.
The payment of the Severance Benefits described in (a)-(c) above
shall be offset by any other severance-type payments the
Executive may be eligible or entitled to receive from any other
sources, including, but not limited to, statutory or other
legally required payments, collective bargaining agreements, or
individual employment contracts.
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(d) For purposes of calculating the benefits to which the Executive
is entitled under the Whirlpool Salaried Employees Retirement
Plan, the Whirlpool Supplemental Executive Retirement Plan, and
the Whirlpool Retirement Benefits Restoration Plan (collectively,
the "Pension Plans"), or any other tax-qualified or nonqualified
defined benefit pension plan, the Executive's benefit shall be
calculated:
(i) As if the Executive is fully vested in such benefits
thereunder;
(ii) As if the number of years of credited service was
increased by three (3) years; and
(iii) As if the Executive's age was equal to the Executive's
actual age plus three (3) years for purposes of
determining retirement eligibility and early retirement
reduction factors.
The Executive's Final Average Pay (as defined in the Pension
Plans) shall not change for purposes of this calculation. All
other assumptions used in determining such benefit shall be those
assumptions used in the Pension Plans at the time of payment.
These benefits shall be paid out in accordance with the
provisions of the Pension Plans. Unless payment of such benefits
is otherwise permissible under the Company's tax-qualified plan,
such amounts shall be paid out of the Rabbi Trust (as described
in Paragraph 2.8).
(e) At the exact same cost to the Executive, and at the same coverage
level as in effect as of the Executive's date of the Qualifying
Termination, a continuation of the Executive's (and the
Executive's eligible dependents') health, life, and short- and
long-term disability insurance benefits for thirty-six (36)
months from the date of the Qualifying Termination. The
applicable COBRA health insurance benefit continuation period
shall begin coincident with the beginning of this thirty-six (36)
month benefit continuation period. The providing of these
insurance benefits by the Company shall be discontinued prior to
the end of the thirty-six (36) month continuation period to the
extent that the Executive becomes covered to the same or a
greater degree under the insurance coverage of a subsequent
employer which does not contain any exclusion or limitation with
respect to any preexisting condition of the Executive or the
Executive's eligible dependents. For purposes of enforcing this
offset provision, the Executive shall have a duty to inform the
Company as to the terms and conditions of any subsequent
employment and the corresponding insurance benefits earned from
such employment. The Executive shall provide, or cause to be
provided, to the Company in writing correct, complete, and timely
information concerning the same.
The provision of the Severance Benefits described in (d) and (e)
above shall be offset by any other comparable severance-type
benefits or rights the Executive may be eligible or entitled to
receive from any other sources, including, but not
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limited to, statutory or other legally required payments,
collective bargaining agreements, or individual employment
contracts.
2.6 DEFINITION OF "CHANGE IN CONTROL." Change in Control has the same
meaning as in the Whirlpool Salaried Employees Retirement Plan, as amended from
time to time.
2.7 DEFINITION OF "GOOD REASON." Good Reason means the occurrence of any
one or more of the following, within two (2) years immediately following a
Change in Control:
(a) A change in the Executive's status or position(s) at the Company
which, in the Executive's reasonable judgment, represents a
demotion from the Executive's status or position(s) as in effect
immediately prior to a Change in Control, or the assignment to
the Executive of any duties or responsibilities which, in the
Executive's reasonable judgment, are inconsistent with such
status or position(s), or any removal of the Executive from, or
any failure to reappoint or reelect the Executive to, such
position(s) except in connection with termination of the
Executive's employment for Cause, Disability, Retirement (as
defined in the Whirlpool Salaried Employees Retirement Plan, or
any successor plan thereto) or as a result of the Executive's
death or by the Executive for other than Good Reason (determined
without taking this last clause into account).
(b) The Company has reduced the Executive's Base Salary from its
level immediately prior to the Change in Control, or has failed
to give the Executive annual salary increases consistent with
such increases given to other employees of the same or similar
position or status within the Company.
(c) The Company either: (i) fails to continue in effect any Plan in
which the Executive is participating immediately prior to the
Change in Control (unless the Company replaces such Plan with a
plan(s) that provides the Executive with at least substantially
similar benefits) other than as a result of the normal expiration
of such Plan(s) in accordance with its terms as in effect
immediately prior to the Change in Control; (ii) acts or fails to
act in a way which would either adversely affect the Executive's
continued participation in any of such Plans on at least as
favorable a basis to the Executive as that which existed
immediately prior to the Change in Control, materially reduces
the Executive's benefits in the future under any of such Plans,
or deprives the Executive of any material benefit enjoyed by the
Executive immediately prior to the Change in Control. For
purposes of this Paragraph 2.7(c), "Plan" means (i) any
compensation plan such as an incentive, stock option, or
restricted stock plan; (ii) any "employee benefit plan" within
the meaning of Section 3(3) of the Employee Retirement Income
Security Act of 1974; (iii) any relocation plan or policy; or
(iv) any other plan, program, or policy that the Company intended
to benefit employees.
(d) The Company requiring the Executive to be based at a location in
excess of thirty-five (35) miles from where the Executive's
office is located immediately prior to the Change in Control,
except for required travel in carrying out the Company's
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business to an extent consistent with the Executive's business
travel obligations on behalf of the Company immediately prior to
the Change in Control.
(e) Any breach by the Company of its obligations under Section 4 of
this Agreement or any failure of a successor company to assume
and agree to perform the Company's entire obligations under this
Agreement, as required by Section 4 herein.
(f) Except as provided in Paragraph 2.3 herein, the Company, after a
Change in Control, attempts to terminate an Executive's
employment other than pursuant to a Notice of Termination, which
purported termination shall be ineffective.
(g) The Company refuses to continue to allow the Executive to attend
to matters or engage in activities not directly related to the
business of the Company if, prior to the Change in Control, the
Executive was permitted by the Company to attend to or engage in
such matters or activities.
The Executive's right to terminate 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 circumstance constituting Good Reason herein.
2.8 RETIREMENT BENEFITS. On or before a Change in Control, all of the
Executive's nonqualified retirement and deferred compensation benefits
(including, but not limited to, benefits under the Whirlpool Supplemental
Executive Retirement Plan, the Whirlpool Retirement Benefits Restoration Plan,
and the Whirlpool Executive Deferred Compensation Plan) shall be fully funded in
an irrevocable Rabbi Trust. The Rabbi Trust shall be a grantor trust within the
meaning of Sections 671-678 of the Internal Revenue Code of 1986, as amended
(the "Code"), shall have an independent trustee, and shall provide for payments
to be made to Executive in accordance with the provisions of the plans and
Paragraph 2.5(d) hereof, if applicable.
SECTION 3. EXCISE TAX
3.1 EXCISE TAX PAYMENT. If any portion of the Severance Benefits or any
other payment under this Agreement, or under any other agreement with, or plan
of the Company, including but not limited to stock options and other long-term
incentives (in the aggregate "Total Payments") would constitute an "excess
parachute payment," such that a golden parachute "excise tax" is due, the
Company shall provide to the Executive, in cash, an additional lump-sum payment
in an amount sufficient to cover the full cost of any excise tax and the
Executive's city, state, and federal income, employment, and excise taxes on
this additional payment and on all such iterative payments (cumulatively, the
"Gross-Up Payment") such that the Executive is made entirely whole for the
impact of the excise tax.
The Company shall be responsible for having these calculations done on a
timely and accurate basis. For this purpose, the Executive shall be deemed to be
in the highest marginal rate of federal, state, and city taxes. This payment
shall be made as soon as possible following the date of the Executive's
Qualifying Termination, but in no event later than thirty (30) calendar days
after such date.
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For purposes of this Agreement, the term "excess parachute payment" shall
have the meaning assigned to such term in Code Section 280G, and the term
"excise tax" shall mean the tax imposed on such excess parachute payments
pursuant to Sections 280G and 4999 of the Code.
3.2 SUBSEQUENT RECALCULATION. In the event the Internal Revenue Service
subsequently adjusts the computation herein described and determines that there
has been an underpayment of excise taxes, the Company shall reimburse the
Executive for the full amount necessary to make the Executive whole on an after-
tax basis, including the value of any underpaid excise tax and any related
interest and/or penalties due to the Internal Revenue Service. In the event the
Internal Revenue Service subsequently adjusts the computation herein described
and determines that there has been an overpayment of excise taxes, the Executive
shall refund to the Company the amount of the overpayment.
SECTION 4. SUCCESSORS AND ASSIGNS
Upon the Executive's written request, the Company will seek to have any
successor (either immediately or with the passage of time, via a direct or
indirect Change in Control, by purchase of assets or the Company's voting
securities, by merger or consolidation or otherwise) of the Company assent, in a
form and substance satisfactory to the Executive, to fulfillment by the Company
of its obligations under this Agreement. Failure of the Company to obtain such
assent at least three (3) business days prior to the time a Person becomes a
successor (or where the Company does not have at least three (3) business days
advance notice that a Person may become a successor, then within one (1)
business day after having notice that such Person may become or has become a
successor) shall constitute Good Reason for termination by the Executive of the
Executive's employment and, if (or once) a Change in Control has occurred, shall
entitle the Executive immediately to the benefits provided in Section 2 hereof
upon delivery by the Executive of a Notice of Termination which the Company, by
executing this Agreement, hereby assents to. Nothing contained in this Section 4
shall be interpreted to indicate that a successor is not obligated to fulfill
the term of this Agreement or any other Plan or arrangement between the
Executive and the Company. The Company's obligation hereunder shall not
otherwise be assignable.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executives, administrators,
successors, heirs, distributees, devisees, and legatees. If the Executive should
die while any amount would still be payable to the Executive hereunder had the
Executive continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the Executive's
devisee, legatee, or other designee or, if there be no such designee, to the
Executive's estate. The Executive's rights hereunder shall not otherwise be
assignable.
For purposes of this Section 4, "Person" shall mean any individual,
corporation, partnership, group, association, or "person" as such term is used
in Section 14(d)(2) of the Securities Exchange Act of 1934, as amended, other
than the Company or any employee benefit plan(s) sponsored by the Company.
SECTION 5. MISCELLANEOUS
5.1 EXECUTIVE'S COMMITMENT. The Executive agrees that subsequent to the
period of employment with the Company, the Executive will not at any time
communicate or disclose to any
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unauthorized person, without the written consent of the Company, any proprietary
processes of the Company, or any subsidiary, or other confidential information
concerning their business, affairs, products, supplies, or customers, which, if
disclosed, would have a material adverse effect upon the business or operations
of the Company and its subsidiaries, taken as a whole; it being understood,
however, that the obligations of this Section 5.1 shall not apply to the extent
that the aforesaid matters (a) are disclosed in circumstances in which the
Executive is legally required to do so, or (b) become generally known to and
available for use by the public otherwise than by the Executive's wrongful act
or omission.
5.2 NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly received when delivered in person or on the second
business day following deposit in the mail, sent by the United States registered
or certified mail, return receipt requested, postage prepaid. Such mail shall be
addressed, in the case of the Company, to the address set forth in the Company's
most current annual report which specifies the corporate headquarters of the
Company. In the case of the undersigned Executive, such mail shall be sent to
the address set forth below the employee's signature or to the latest address
contained in the Company's employment records. All notices to the Company shall
be directed to the attention of the Chairman of the Board or President of the
Company, with a copy to the Secretary of the Company 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.
5.3 UNFUNDED AGREEMENT. This Agreement is intended to be an unfunded
general asset promise for a select, highly compensated member of the Company's
management.
5.4 INCLUDABLE COMPENSATION. Severance Benefits provided hereunder shall
not be considered "includable compensation" for purposes of determining the
Executive's benefits under any other plan or program of the Company unless
otherwise provided by such other plan or program.
5.5 TAX WITHHOLDING. The Company shall withhold from any amounts payable
under this Agreement all federal, state, city, or other taxes as legally
required to be withheld.
SECTION 6. CONTRACTUAL RIGHTS AND LEGAL REMEDIES
6.1 CONTRACTUAL RIGHTS TO BENEFITS. This Agreement establishes in the
Executive a right to the benefits to which the Executive is entitled hereunder.
However, except as expressly stated herein, nothing herein contained shall
require or be deemed to require, or prohibit or be deemed to prohibit, the
Company to segregate, earmark, or otherwise set aside any funds or other assets,
in trust or otherwise, to provide for any payments to be made or required
hereunder.
6.2 LEGAL FEES AND EXPENSES. The Company shall pay all legal fees, costs
of litigation, prejudgment interest, and other expenses which are incurred in
good faith by the Executive as a result of (i) the Executive's termination
following a Change in Control (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or incurred by the
Executive in seeking advice with respect to the matters set forth in Section 2
hereof); or (ii) following a Change in Control, the Executive seeking to obtain
or enforce any right or benefit provided by this Agreement, any Plan or any
other agreement of or arrangement with the Company. The Company shall pay such
fees and expenses on a current basis as services are rendered and in no
<PAGE>
event more than thirty (30) calendar days after invoices for services rendered
are forwarded by the Executive to the Company.
6.3 ARBITRATION. The Executive shall have the right and option to elect
(in lieu of litigation) to have any dispute or controversy arising under or in
connection with this Agreement settled by arbitration, conducted before a panel
of three (3) arbitrators sitting in a location selected by the Executive within
fifty (50) miles from the location of the Executive's job with the Company, in
accordance with the rules of the American Arbitration Association then in
effect. The decision of the arbitrators in that proceeding shall be binding on
the Company and the Executive. Judgment may be entered on the award of the
arbitrator in any court having jurisdiction. All expenses of such arbitration,
including the fees and expenses of the counsel for the Executive, shall be borne
by the Company.
6.4 EXCLUSIVITY OF BENEFITS. Unless specifically provided herein, neither
the provisions of this Agreement nor the benefits provided hereunder shall
reduce any amounts otherwise payable, or in any way diminish the Executive's
rights as an employee of the Company, whether existing now or hereafter, under
any compensation and/or benefit plans, programs, policies, or practices provided
by the Company, for which the Executive may qualify.
6.5 EMPLOYMENT STATUS. Nothing herein contained shall be deemed to create
an employment agreement between the Company and the Executive, providing for the
employment of the Executive by the Company for any fixed period of time. Nothing
herein contained shall prevent the Company or the Executive from terminating the
Executive's employment with the Company at any time, with or without Cause,
subject to the Company's obligation upon a Qualifying Termination to provide
Severance Benefits as required hereunder.
6.6 MITIGATION. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this agreement, nor shall the
amount of any payment hereunder be reduced by any compensation earned by
Executive as a result of employment by another employer, other than as provided
in Paragraph 2.5(e) herein.
6.7 SURVIVAL. The respective obligations and benefits afforded to the
Company and Executive as provided in Sections 2, 3, and 4 and in Paragraphs 5.1,
6.2, and 6.3 of this Agreement shall survive the termination of this Agreement
following a Change in Control.
6.8 ENTIRE AGREEMENT. This Agreement represents the entire agreement
between the parties with respect to the subject matter hereof, and supersedes
all prior discussions, negotiations, and agreements that relate to a Change in
Control concerning the subject matter hereof, including, but not limited to, any
prior severance agreement made between the Executive and the Company.
6.9 SEVERABILITY. In the event any provision of the Agreement shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Agreement, and the Agreement shall be
construed and enforced as if the illegal or invalid provision had not been
included.
<PAGE>
6.10 APPLICABLE LAW. To the extent not preempted by the laws of the United
States, the laws of the State of Michigan shall be the controlling law in all
matters relating to this Agreement.
IN WITNESS WHEREOF, the Company and Executive have executed this Agreement,
to be effective as of the day and year first written above.
WHIRLPOOL CORPORATION Executive:
____________________________________
Printed Name
____________________________________
By: _________________________ Address:
____________________________________
Title: ____________________________________
<PAGE>
EXHIBIT 2
---------
Compensation and Benefits Assurance Agreement
This COMPENSATION AND BENEFITS ASSURANCE AGREEMENT (this "Agreement") is
made and entered into in Benton Harbor, Michigan, and is effective as of this
8th day of March, 1999 (the "Effective Date") by and between Whirlpool
Corporation, a Delaware corporation (hereinafter referred to as the "Company"),
and the individual whose signature appears on the signature page (hereinafter
referred to as the "Executive").
WHEREAS, the Company considers the establishment and maintenance of a sound
and vital management to be essential to protecting and enhancing the best
interests of the Company and its shareholders. In this connection, the Company
recognizes that, as is the case with many publicly held corporations, the
possibility of a change in control may arise 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 its shareholders.
Accordingly, the Board of Directors of the Company (hereafter the "Board"
or the "Board of Directors") has determined that appropriate steps should be
taken to reinforce and encourage the continued attention and dedication of
members of the Company's management to their assigned duties without distraction
in circumstances arising from the possibility of a change in control of the
Company.
The Board also believes it important, should the Company or its
shareholders receive a proposal for transfer of control of the Company, that the
Executive be able to assess and advise the Board whether such proposal would be
in the best interests of the Company and its shareholders and to take such other
action regarding such proposal as the Board might determine to be appropriate,
without being influenced by the uncertainties of the Executive's own situation.
This Agreement, which has been approved by the Board, sets forth the
severance benefits which the Company agrees to provide to the Executive in the
event the Executive's employment with the Company is terminated subsequent to a
change in control under the circumstances described below. As provided in
Paragraph 6.8, this Agreement is intended to supersede the Severance Agreement
between the Company and the Executive, dated January 30, 1998, and compliments
the Agreement among the Executive, the Company and Brasmotor, SA, dated April 2,
1998 (hereinafter referred to as the "Employment Agreement").
NOW THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements of the parties set forth in this Agreement, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties, intending to be legally bound, hereby agree as
follows:
<PAGE>
SECTION 1. TERM OF AGREEMENT
1.1 INITIAL TERM. This Agreement will commence on the Effective Date and
shall continue in effect through December 31, 2000 (the "Initial Term").
1.2 SUCCESSIVE PERIODS. The term of this Agreement automatically shall be
extended for two (2) additional years at the end of the Initial Term, and then
again after each successive two-year period thereafter (each such two-year
period following the Initial Term is referred to as a "Successive Period").
However, either party may terminate this Agreement at the end of the Initial
Term, or at the end of any Successive Period thereafter, by giving the other
party written notice of intent not to renew, delivered at least ninety (90)
calendar days prior to the end of such Initial Term or Successive Period. If
such notice is properly delivered by either party, this Agreement, along with
all corresponding rights, duties, and covenants, shall, except as provided in
Paragraph 6.7 hereof, automatically expire at the end of the Initial Term or
Successive Period then in progress.
1.3 CHANGE IN CONTROL RENEWAL. In the event that a Change in Control (as
defined in Paragraph 2.6) of the Company occurs during the Initial Term or any
Successive Period, upon the effective date of such Change in Control, the term
of this Agreement shall automatically and irrevocably be renewed for a period of
two (2) years from the effective date of such Change in Control. Further, this
Agreement may be assigned to the successor in such Change in Control, as further
provided in Section 4 herein. Subject to Paragraph 6.7, this Agreement shall
thereafter automatically terminate following such two (2) year Change in Control
renewal period.
1.4 TERMINATION PRIOR TO A CHANGE IN CONTROL. In the event that the
Executive's employment terminates for any reason prior to a Change in Control,
this Agreement, along with all corresponding rights, duties, and covenants,
shall, except as provided in Paragraph 5.1 hereof, automatically expire as of
the date of such employment termination.
SECTION 2. SEVERANCE AND RETIREMENT BENEFITS
2.1 RIGHT TO SEVERANCE BENEFITS. The Executive shall be entitled to
receive from the Company Severance Benefits, as described in Paragraph 2.5
herein, if during the term of this Agreement there has been a Change in Control
of the Company and if, within two (2) years immediately thereafter, the
Executive's employment with the Company shall end for any reason specified in
Paragraph 2.2 as being a Qualifying Termination. The Severance Benefits
described in Paragraphs 2.5(a), 2.5(b), and 2.5(c) shall be paid in cash to the
Executive in a single lump sum as soon as practicable following the Qualifying
Termination, but in no event later than ten (10) calendar days from such date,
and the Severance Benefits described in Paragraphs 2.5(d) and 2.5(e) shall
become irrevocably payable.
2.2 QUALIFYING TERMINATION. The occurrence of any one or more of the
following events, within two (2) years immediately following a Change in Control
of the Company along with delivery of a Notice of Termination as described in
Paragraph 2.4, shall be deemed a "Qualifying Termination" hereunder (with such
"Qualifying Termination" being deemed effective on the date of delivery of such
Notice of Termination) and, as such, shall trigger the payment of Severance
Benefits to the Executive, as such benefits are described under Paragraph 2.5
herein:
(a) The Company's involuntary termination of the Executive's
employment without Cause (as defined in Paragraph 2.3);
<PAGE>
(b) The Executive's voluntary termination of employment for Good
Reason (as defined in Paragraph 2.7);
(c) The Executive's voluntary termination of employment for any
reason during the thirteenth (13th) calendar month following the
month in which a Change in Control occurs, and only during such
thirteenth (13th) month; or
(d) The Company's material breach of any of the provisions of this
Agreement.
A Qualifying Termination shall not include a termination of the Executive's
employment within two (2) years after a Change in Control by reason of death,
Disability (as such term is defined under the Company's governing disability
plan, or any successor plan thereto), the Executive's voluntary termination
without Good Reason other than a voluntary termination during the thirteenth
(13th) calendar month following the month in which a Change in Control occurs
(as provided in Paragraph 2.2(c)), or the Company's involuntary termination of
the Executive's employment for Cause.
2.3 TERMINATION FOR CAUSE. The Executive shall not be deemed to have been
terminated for Cause unless and until (i) the Executive has received a copy of a
resolution, stating that the Executive has been terminated for Cause and stating
the particulars thereof in detail (the "Termination for Cause Resolution"), duly
adopted by the affirmative vote of not less than seventy-five percent (75%) of
the entire membership of the Board at a meeting of the Board called and held for
the purpose of making the determination to terminate the Executive for Cause;
and (ii) the Executive is provided with reasonable notice of such meeting and
the opportunity to appear with counsel to be heard by the Board at such meeting.
The Termination for Cause Resolution shall operate as a Notice of Termination
for purposes of this Agreement.
For purposes of this Agreement, "Cause" means (i) the Executive's willful
and continued failure to substantially perform the Executive's duties for the
Company (other than any such failure resulting from incapacity due to physical
or mental illness) after a demand to so substantially perform is delivered to
the Executive by the Chairman of the Board or President of the Company which
specifically identifies the manner in which the Executive has not substantially
performed the Executive's duties; or (ii) the Executive willfully engages in
illegal conduct which is materially and demonstratively injurious to the
Company.
No act, or failure to act, on the Executive's part shall be considered
"willful" unless done, or omitted to be done, by the Executive in bad faith and
without reasonable belief that such action or omission was in, or not opposed
to, the best interests of the Company. Any act or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or based upon
the advice of counsel for the Executive or the Company shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good faith and
in the best interests of the Company. It is also expressly understood that the
Executive's attention to matters not directly related to the business of the
Company shall not, in and of itself, constitute Cause.
2.4 NOTICE OF TERMINATION. To be complete, a Qualifying Termination must
be accompanied by the delivery to the Company (in compliance with Paragraph 5.2)
of a Notice of Termination from the Executive. For purposes of this Agreement, a
"Notice of Termination" shall mean a written document which states the specific
termination provisions in this Agreement relied upon to terminate
<PAGE>
the Executive's employment and which sets forth in reasonable detail the facts
and circumstances providing the basis for such termination.
2.5 DESCRIPTION OF SEVERANCE BENEFITS. In the event that the Executive
becomes entitled to receive Severance Benefits, as provided in Paragraphs 2.1
and 2.2 herein, the Company shall pay to the Executive and, in the case of
benefits, provide the Executive with the following (collectively referred to as
the "Severance Benefits"):
(a) A lump-sum cash amount equal to the Executive's unpaid Basic
Salary, COLA, vacation pay equal to twice the annual accrual rate
appropriate for the Executive, based on the individual's length
of service with the Company, unreimbursed business expenses, and
all other items earned by and owed to the Executive under the
Employment Agreement through and including the date of the
Qualifying Termination except as otherwise provided in clause (c)
below. Such payment shall constitute full satisfaction for these
amounts owed to the Executive. For all purposes of this
Agreement, "Base Salary" shall mean, at any time, the then
regular annual rate of pay that the Executive is earning as
annual salary, whether or not deferred.
(b) A lump-sum cash amount equal to the sum of (i) three (3)
multiplied by the Executive's annual rate of Basic Salary plus
COLA in effect upon the date of the Qualifying Termination or, if
greater, by the Executive's highest annual rate of Basic Salary
plus COLA in effect at any time during the twelve (12) months
prior to the occurrence of the Change in Control; plus (ii) three
(3) multiplied by the Executive's then current target bonus
opportunity (stated in terms of a percentage of Base Salary)
established under the Company's Performance Excellence Plan (or
any successor plan thereto), for the plan year in which the date
of the Executive's Qualifying Termination occurs, or, if greater,
by the Executive's highest target bonus opportunity in effect at
any time during the twelve (12) months prior to the occurrence of
the Change in Control.
(c) A lump-sum cash amount equal to the greater of (i) the
Executive's then-current target bonus opportunity (stated in
terms of a percentage of Basic Salary) established under the
Company's Performance Excellence Plan (or any successor plan
thereto), for the plan year in which the Executive's date of
Qualifying Termination occurs, adjusted on a pro rata basis based
on the number of days the Executive was actually employed during
such plan year (but in no event shall such target bonus
opportunity be less than the highest target bonus opportunity in
effect at any time during the twelve (12) months prior to the
occurrence of the Change in Control); or (ii) the actual bonus
earned through the date of the Qualifying Termination under the
Company's Performance Excellence Plan (or any successor plan
thereto), based on the then-current level of goal achievement.
Such payment shall constitute full satisfaction for these amounts
owed to the Executive.
The payment of the Severance Benefits described in (a)-(c) above
shall be offset by any other severance-type payments the
Executive may be eligible or entitled to receive from any other
sources, including, but not limited to, statutory or other
<PAGE>
legally required payments, collective bargaining agreements, or
contractual indemnity amount under the Employment Agreement.
(d) For purposes of calculating the benefits to which the Executive is
entitled under the Pension Fund provision of the Employment
Agreement, the Executive's benefit shall be calculated:
(i) As if the Executive is fully vested in such benefits
thereunder;
(ii) As if the number of years of credited service was increased
by three (3) years; and
(iii) As if the Executive's age was equal to the Executive's
actual age plus three (3) years for purposes of determining
retirement eligibility and early retirement reduction
factors.
The Executive's Final Basic Salary shall not change for purposes of
this calculation. All other assumptions used in determining such
benefit shall be those assumptions used in the Pension fund at the
time of payment. These benefits shall be paid out in accordance with
the provisions of the Employment Agreement.
(e) At the exact same cost to the Executive, and at the same coverage
level as in effect as of the Executive's date of the Qualifying
Termination, a continuation of the Executive's (and the Executive's
eligible dependents') benefits described in paragraphs l, m, n, o
and p of the Employment Agreement for thirty-six (36) months from
the date of the Qualifying Termination. The providing of these
insurance and other benefits by the Company shall be discontinued
prior to the end of the thirty-six (36) month continuation period to
the extent that the Executive becomes covered to the same or a
greater degree under the insurance coverage and benefit plans of a
subsequent employer which does not contain any exclusion or
limitation with respect to any preexisting condition of the
Executive or the Executive's eligible dependents. For purposes of
enforcing this offset provision, the Executive shall have a duty to
inform the Company as to the terms and conditions of any subsequent
employment and the corresponding insurance benefits earned from such
employment. The Executive shall provide, or cause to be provided, to
the Company in writing correct, complete, and timely information
concerning the same.
The provision of the Severance Benefits described in (d) and (e)
above shall be offset by any other comparable severance-type
benefits or rights the Executive may be eligible or entitled to
receive from any other sources, including, but not limited to,
statutory or other legally required payments, collective bargaining
agreements, or individual employment contracts.
2.6 DEFINITION OF "CHANGE IN CONTROL." Change in Control has the same
meaning as in the Whirlpool Salaried Employees Retirement Plan, as amended from
time to time.
<PAGE>
2.7 DEFINITION OF "GOOD REASON." Good Reason means the occurrence of any one
or more of the following, within two (2) years immediately following a Change in
Control:
(a) A change in the Executive's status or position(s) at the Company
which, in the Executive's reasonable judgment, represents a demotion
from the Executive's status or position(s) as in effect immediately
prior to a Change in Control, or the assignment to the Executive of
any duties or responsibilities which, in the Executive's reasonable
judgment, are inconsistent with such status or position(s), or any
removal of the Executive from, or any failure to reappoint or
reelect the Executive to, such position(s) except in connection with
termination of the Executive's employment for Cause, Disability,
Retirement (as defined in the Whirlpool Salaried Employees
Retirement Plan, or any successor plan thereto) or as a result of
the Executive's death or by the Executive for other than Good Reason
(determined without taking this last clause into account).
(b) The Company has reduced the Executive's Basic Salary from its level
immediately prior to the Change in Control, or has failed to give
the Executive annual salary increases consistent with such increases
given to other employees of the same or similar position or status
within the Company.
(c) The Company either: (i) fails to continue in effect any Plan in
which the Executive is participating immediately prior to the Change
in Control (unless the Company replaces such Plan with a plan(s)
that provides the Executive with at least substantially similar
benefits) other than as a result of the normal expiration of such
Plan(s) in accordance with its terms as in effect immediately prior
to the Change in Control; (ii) acts or fails to act in a way which
would either adversely affect the Executive's continued
participation in any of such Plans on at least as favorable a basis
to the Executive as that which existed immediately prior to the
Change in Control, materially reduces the Executive's benefits in
the future under any of such Plans, or deprives the Executive of any
material benefit enjoyed by the Executive immediately prior to the
Change in Control.
(d) The Company requiring the Executive to be based at a location in
excess of thirty-five (35) miles from where the Executive's office
is located immediately prior to the Change in Control, except for
required travel in carrying out the Company's business to an extent
consistent with the Executive's business travel obligations on
behalf of the Company immediately prior to the Change in Control.
(e) Any breach by the Company of its obligations under Section 4 of this
Agreement or any failure of a successor company to assume and agree
to perform the Company's entire obligations under this Agreement, as
required by Section 4 herein.
(f) Except as provided in Paragraph 2.3 herein, the Company, after a
Change in Control, attempts to terminate an Executive's employment
other than pursuant to a Notice of Termination, which purported
termination shall be ineffective.
<PAGE>
(g) The Company refuses to continue to allow the Executive to attend to
matters or engage in activities not directly related to the business
of the Company if, prior to the Change in Control, the Executive was
permitted by the Company to attend to or engage in such matters or
activities.
The Executive's right to terminate 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 circumstance constituting Good Reason herein.
SECTION 3. EXCISE TAX
3.1 EXCISE TAX PAYMENT. If any portion of the Severance Benefits or any
other payment under this Agreement, or under any other agreement with, or plan
of the Company, including but not limited to stock options and other long-term
incentives (in the aggregate "Total Payments") would constitute an "excess
parachute payment," such that a golden parachute "excise tax" is due, the
Company shall provide to the Executive, in cash, an additional lump-sum payment
in an amount sufficient to cover the full cost of any excise tax and the
Executive's city, state, and federal income, employment, and excise taxes on
this additional payment and on all such iterative payments (cumulatively, the
"Gross-Up Payment") such that the Executive is made entirely whole for the
impact of the excise tax.
The Company shall be responsible for having these calculations done on a
timely and accurate basis. For this purpose, the Executive shall be deemed to be
in the highest marginal rate of federal, state, and city taxes. This payment
shall be made as soon as possible following the date of the Executive's
Qualifying Termination, but in no event later than thirty (30) calendar days
after such date.
For purposes of this Agreement, the term "excess parachute payment" shall
have the meaning assigned to such term in Code Section 280G, and the term
"excise tax" shall mean the tax imposed on such excess parachute payments
pursuant to Sections 280G and 4999 of the Code.
3.2 SUBSEQUENT RECALCULATION. In the event the Internal Revenue Service
subsequently adjusts the computation herein described and determines that there
has been an underpayment of excise taxes, the Company shall reimburse the
Executive for the full amount necessary to make the Executive whole on an after-
tax basis, including the value of any underpaid excise tax and any related
interest and/or penalties due to the Internal Revenue Service. In the event the
Internal Revenue Service subsequently adjusts the computation herein described
and determines that there has been an overpayment of excise taxes, the Executive
shall refund to the Company the amount of the overpayment.
SECTION 4. SUCCESSORS AND ASSIGNS
Upon the Executive's written request, the Company will seek to have any
successor (either immediately or with the passage of time, via a direct or
indirect Change in Control, by purchase of assets or the Company's voting
securities, by merger or consolidation or otherwise) of the Company assent, in a
form and substance satisfactory to the Executive, to fulfillment by the Company
of its obligations under this Agreement. Failure of the Company to obtain such
assent at least three (3) business days prior to the time a Person becomes a
successor (or where the Company does not have
<PAGE>
at least three (3) business days advance notice that a Person may become a
successor, then within one (1) business day after having notice that such Person
may become or has become a successor) shall constitute Good Reason for
termination by the Executive of the Executive's employment and, if (or once) a
Change in Control has occurred, shall entitle the Executive immediately to the
benefits provided in Section 2 hereof upon delivery by the Executive of a Notice
of Termination which the Company, by executing this Agreement, hereby assents
to. Nothing contained in this Section 4 shall be interpreted to indicate that a
successor is not obligated to fulfill the term of this Agreement or any other
Plan or arrangement between the Executive and the Company. The Company's
obligation hereunder shall not otherwise be assignable.
This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executives, administrators,
successors, heirs, distributees, devisees, and legatees. If the Executive should
die while any amount would still be payable to the Executive hereunder had the
Executive continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the Executive's
devisee, legatee, or other designee or, if there be no such designee, to the
Executive's estate. The Executive's rights hereunder shall not otherwise be
assignable.
For purposes of this Section 4, "Person" shall mean any individual,
corporation, partnership, group, association, or "person" as such term is used
in Section 14(d)(2) of the Securities Exchange Act of 1934, as amended, other
than the Company or any employee benefit plan(s) sponsored by the Company.
SECTION 5. MISCELLANEOUS
5.1 EXECUTIVE'S COMMITMENT. The Executive agrees that subsequent to the
period of employment with the Company, the Executive will not at any time
communicate or disclose to any unauthorized person, without the written consent
of the Company, any proprietary processes of the Company, or any subsidiary, or
other confidential information concerning their business, affairs, products,
supplies, or customers, which, if disclosed, would have a material adverse
effect upon the business or operations of the Company and its subsidiaries,
taken as a whole; it being understood, however, that the obligations of this
Section 5.1 shall not apply to the extent that the aforesaid matters (a) are
disclosed in circumstances in which the Executive is legally required to do so,
or (b) become generally known to and available for use by the public otherwise
than by the Executive's wrongful act or omission.
5.2 NOTICE. For the purposes of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly received when delivered in person or on the second
business day following deposit in the mail, sent by the United States registered
or certified mail, return receipt requested, postage prepaid. Such mail shall be
addressed, in the case of the Company, to the address set forth in the Company's
most current annual report which specifies the corporate headquarters of the
Company. In the case of the undersigned Executive, such mail shall be sent to
the address set forth below the employee's signature or to the latest address
contained in the Company's employment records. All notices to the Company shall
be directed to the attention of the Chairman of the Board or President of the
Company, with a copy to the Secretary of the Company 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.
<PAGE>
5.3 UNFUNDED AGREEMENT. This Agreement is intended to be an unfunded general
asset promise for a select, highly compensated member of the Company's
management.
5.4 INCLUDABLE COMPENSATION. Severance Benefits provided hereunder shall not
be considered "includable compensation" for purposes of determining the
Executive's benefits under any other plan or program of the Company unless
otherwise provided by such other plan or program.
5.5 TAX WITHHOLDING. The Company shall withhold from any amounts payable
under this Agreement all federal, state, city, or other taxes as legally
required to be withheld.
SECTION 6. CONTRACTUAL RIGHTS AND LEGAL REMEDIES
6.1 CONTRACTUAL RIGHTS TO BENEFITS. This Agreement establishes in the
Executive a right to the benefits to which the Executive is entitled hereunder.
However, except as expressly stated herein, nothing herein contained shall
require or be deemed to require, or prohibit or be deemed to prohibit, the
Company to segregate, earmark, or otherwise set aside any funds or other assets,
in trust or otherwise, to provide for any payments to be made or required
hereunder.
6.2 LEGAL FEES AND EXPENSES. The Company shall pay all legal fees, costs of
litigation, prejudgment interest, and other expenses which are incurred in good
faith by the Executive as a result of (i) the Executive's termination following
a Change in Control (including all such fees and expenses, if any, incurred in
contesting or disputing any such termination or incurred by the Executive in
seeking advice with respect to the matters set forth in Section 2 hereof); or
(ii) following a Change in Control, the Executive seeking to obtain or enforce
any right or benefit provided by this Agreement, any Plan or any other agreement
of or arrangement with the Company. The Company shall pay such fees and expenses
on a current basis as services are rendered and in no event more than thirty
(30) calendar days after invoices for services rendered are forwarded by the
Executive to the Company.
6.3 ARBITRATION. The Executive shall have the right and option to elect (in
lieu of litigation) to have any dispute or controversy arising under or in
connection with this Agreement settled by arbitration, conducted before a panel
of three (3) arbitrators sitting in a location selected by the Executive within
fifty (50) miles from the location of the Executive's job with the Company, in
accordance with the rules of the American Arbitration Association then in
effect. The decision of the arbitrators in that proceeding shall be binding on
the Company and the Executive. Judgment may be entered on the award of the
arbitrator in any court having jurisdiction. All expenses of such arbitration,
including the fees and expenses of the counsel for the Executive, shall be borne
by the Company.
6.4 EXCLUSIVITY OF BENEFITS. Unless specifically provided herein, neither
the provisions of this Agreement nor the benefits provided hereunder shall
reduce any amounts otherwise payable, or in any way diminish the Executive's
rights as an employee of the Company, whether existing now or hereafter, under
any compensation and/or benefit plans, programs, policies, or practices provided
by the Company, for which the Executive may qualify.
6.5 EMPLOYMENT STATUS. Nothing herein contained shall be deemed to create an
employment agreement between the Company and the Executive, providing for the
employment of the Executive by the Company for any fixed period of time. Nothing
herein contained shall prevent
<PAGE>
the Company or the Executive from terminating the Executive's employment with
the Company at any time, with or without Cause, subject to the Company's
obligation upon a Qualifying Termination to provide Severance Benefits as
required hereunder and further subject to the terms and conditions of the
Employment Agreement.
6.6 MITIGATION. In no event shall the Executive be obligated to seek other
employment or take any other action by way of mitigation of the amounts payable
to the Executive under any of the provisions of this agreement, nor shall the
amount of any payment hereunder be reduced by any compensation earned by
Executive as a result of employment by another employer, other than as provided
in Paragraph 2.5(e) herein.
6.7 SURVIVAL. The respective obligations and benefits afforded to the
Company and Executive as provided in Sections 2, 3, and 4 and in Paragraphs 5.1,
6.2, and 6.3 of this Agreement shall survive the termination of this Agreement
following a Change in Control.
6.8 ENTIRE AGREEMENT. This Agreement represents the entire agreement between
the parties with respect to the subject matter hereof, and supersedes all prior
discussions, negotiations, and agreements that relate to a Change in Control
concerning the subject matter hereof, including, but not limited to, any prior
severance agreement made between the Executive and the Company, but excluding
the Employment Agreement.
6.9 SEVERABILITY. In the event any provision of the Agreement shall be held
illegal or invalid for any reason, the illegality or invalidity shall not affect
the remaining parts of the Agreement, and the Agreement shall be construed and
enforced as if the illegal or invalid provision had not been included.
6.10 APPLICABLE LAW, ENFORCEMENT. This Agreement has been executed in
Benton Harbor, Michigan and is intended to be exclusively subject to the laws of
the United States of America and the State of Michigan. To the extent not
preempted by the laws of the United States, the laws of the State of Michigan
shall be the controlling law in all matters relating to this Agreement.
Executive agrees that any action for enforcement of this Agreement may only be
brought within the United States.
IN WITNESS WHEREOF, the Company and Executive have executed this Agreement,
to be effective as of the day and year first written above.
WHIRLPOOL CORPORATION Executive:__________________________________
Printed Name:__________________________________
By: ________________________ Address:__________________________________
Title: __________________________________
