EXHIBIT 10.2
CHANGE OF CONTROL AGREEMENT
AMENDED AND RESTATED
CHANGE OF CONTROL EMPLOYMENT AGREEMENT
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Table of Contents
Page
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1. Employment Period...............................................1
2. Terms of Employment.............................................2
(a) Position and Duties.............................................2
(b) Compensation....................................................2
(i) Base Salary............................................2
(ii) Annual Bonus...........................................3
(iii) Qualified Plans........................................3
(iv) Welfare Benefit Plans..................................3
(v) Expenses...............................................4
(vi) Fringe Benefits and Perquisites........................4
(vii) Office and Support Staff...............................4
(viii) Vacation...............................................4
(ix) Equity and Performance Based Awards....................4
3. Termination of Employment.......................................5
(a) Death or Disability.............................................5
(b) Cause...........................................................5
(c) Good Reason; Window Period......................................5
(d) Notice of Termination...........................................6
(e) Date of Termination.............................................6
4. Obligations of the Company Upon Termination.....................7
(a) Good Reason or During a Window Period; Other than for Cause,
Death or Disability .........................................7
(b) Death...........................................................9
(c) Disability.....................................................10
(d) Cause; Other than for Good Reason or During a Window Period....10
5. Non-exclusivity of Rights......................................11
6. Full Settlement; Resolution of Disputes........................11
7. Certain Additional Payments by the Company.....................12
8. Confidential Information; Certain Prohibited Activities........14
9. Change of Control; Potential Change of Control.................15
10. Successors.....................................................20
11. Miscellaneous..................................................20
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AMENDED AND RESTATED
CHANGE OF CONTROL EMPLOYMENT AGREEMENT
This AMENDED AND RESTATED CHANGE OF CONTROL EMPLOYMENT AGREEMENT (the
"Agreement") by and between Lennox International Inc., a Delaware corporation
(the "Company"), and _____________________ (the "Executive"), dated as of the
31st day of July, 2000, to be effective as of the Agreement Effective Date (as
defined in Section 11(h) hereof).
The Board of Directors of the Company (the "Board") has determined that
it is in the best interests of the Company and its shareholders to assure that,
in the event of a Change of Control or Potential Change of Control (in each case
as defined in Section 9 hereof), the Company will have the continued services of
the Executive and the Executive will be provided with compensation and benefits
arrangements that meet his expectations. In order to accomplish these
objectives, the Board caused the Company to enter into a Change of Control
Employment Agreement, dated as of April 23, 1999 (the "Original Agreement"),
with the Executive. The Company and the Executive wish to amend and restate the
Original Agreement as provided in this Agreement. It is understood that the
Executive has an existing employment agreement (the "Existing Agreement") with
the Company. This Agreement is intended to provide certain protections to
Executive that are not afforded by the Existing Agreement. This Agreement is
not, however, intended to provide benefits that are duplicative of the
Executive's current benefits. To the extent that this Agreement provides
benefits of the same types as those provided under the Existing Agreement, the
Company shall provide the better of the benefits in each case during the
Employment Period. If Executive remains employed by the Company at the
conclusion of an Employment Period, the Existing Agreement shall continue in
effect in accordance with its terms thereafter, except that Executive's Base
Salary for purposes of the Existing Agreement shall be equal to the Executive's
Annual Base Salary under this Agreement at the conclusion of the Employment
Period.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. EMPLOYMENT PERIOD.
Upon a Change of Control or Potential Change of Control, the Company
hereby agrees to continue the Executive in its employ, and the Executive
hereby agrees to remain in the employ of the Company, in accordance with, and
subject to, the terms and provisions of this Agreement, for the period (the
"Employment Period") commencing on the date upon which there occurs a Change of
Control or a Potential Change of Control and ending on (i) if a Change of
Control has occurred, the second anniversary of the Employment Effective Date or
(ii) if a Potential Change of Control has occurred but a Change of Control has
not occurred, the earliest of (x) the date upon which the Board determines in
good faith that a Change of Control is unlikely to occur, (y) any anniversary of
the Potential Change of Control, if at least 30 days prior to such anniversary
the Executive notifies the Company in writing that he elects to terminate his
employment with the Company as of such anniversary and (z) the second
anniversary of the Employment Effective Date. If the Employment Period commences
by reason of a Potential Change of Control and the Employment Period is
thereafter terminated pursuant to clause (ii) (x) of the preceding sentence,
this Agreement shall nevertheless remain in effect and a
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new Employment Period shall commence upon a subsequent Change of Control or
Potential Change of Control. The Company shall promptly notify the Executive in
writing of the occurrence of a Change of Control or Potential Change of Control
and of any determination made by the Board pursuant to clause (ii)(x) above that
a Change of Control is unlikely to occur. As used herein, the term "Employment
Effective Date" shall mean, with respect to any Employment Period, the date upon
which such Employment Period commences in accordance with this Section 1.
2. TERMS OF EMPLOYMENT.
(a) POSITION AND DUTIES.
(i) During the Employment Period, (A) the Executive's position
(including status, offices, titles and reporting requirements),
authority, duties and responsibilities shall be at least commensurate
in all material respects with the most significant of those held,
exercised and assigned at any time during the 90-day period
immediately preceding the Employment Effective Date, and (B) the
Executive's services shall be performed at the location where the
Executive was employed immediately preceding the Employment Effective
Date or at another location within 35 miles thereof.
(ii) During the Employment Period, and excluding any periods of
vacation and sick leave to which the Executive is entitled, the
Executive agrees to devote reasonable attention and time during normal
business hours to the business and affairs of the Company and, to the
extent necessary to discharge the responsibilities assigned to the
Executive hereunder, to use the Executive's reasonable best efforts to
perform faithfully and efficiently such responsibilities. During the
Employment Period it shall not be a violation of this Agreement for
the Executive to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments,
so long as such activities do not significantly interfere with the
performance of the Executive's responsibilities as an employee of the
Company in accordance with this Agreement. It is expressly understood
and agreed that to the extent that any such activities have been
conducted by the Executive prior to the Employment Effective Date, the
continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Employment
Effective Date shall not thereafter be deemed to interfere with the
performance of the Executive's responsibilities to the Company.
(b) COMPENSATION.
(i) BASE SALARY. During the Employment Period, the Executive
shall receive an annual base salary equal to the base salary in effect
immediately prior to the Employment Effective Date or, if more
favorable to the Executive, the base salary in effect at any time
after the Employment Effective Date ("Annual Base
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Salary"), which shall be paid in accordance with the normal
business practice of the Company. During the Employment Period, the
Annual Base Salary shall be reviewed at least annually and shall be
increased at any time and from time to time as shall be substantially
consistent with increases in base salary generally awarded in the
ordinary course of business to executives of the Company and its
affiliated companies. Any increase in Annual Base Salary shall not
serve to limit or reduce any other obligation to the Executive under
this Agreement. Annual Base Salary shall not be reduced after any such
increase and the term "Annual Base Salary" as utilized in this
Agreement shall refer to Annual Base Salary as so increased. As used
in this Agreement, the term "affiliated companies" shall include, when
used with reference to the Company, any company controlled by,
controlling or under common control with the Company.
(ii) ANNUAL BONUS. In addition to Annual Base Salary, the
Executive shall be awarded, for each fiscal year or portion thereof
during the Employment Period, an annual bonus (the "Annual Bonus") in
cash equal to the greater of (A) the greatest dollar amount of annual
bonus paid or awarded to or for the benefit of the Executive in
respect of any of the preceding three fiscal years or (B) an amount
comparable to the annual bonus awarded to other Company executives
taking into account Executive's position and responsibilities with the
Company, prorated in the case of either (A) or (B) for any period
consisting of less than twelve full months. The Annual Bonus awarded
for a particular fiscal year shall (unless the Executive elects to
defer receipt thereof) be paid no later than the last day of the third
month after the end of such year.
(iii) QUALIFIED PLANS. During the Employment Period, the
Executive shall be entitled to participate in all profit-sharing,
savings and retirement plans that are tax-qualified under Section
401(a) of the Internal Revenue Code of 1986, as amended ("Code"), and
all plans that are supplemental to any such tax-qualified plans, in
each case to the extent that such plans are applicable generally to
other executives of the Company and its affiliated companies, but in
no event shall such plans provide the Executive with incentive
opportunities (measured with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction
is applicable), savings opportunities and retirement benefit
opportunities that are, in each case, less favorable, in the
aggregate, than the most favorable plans of the Company and its
affiliated companies. As used in this Agreement, the term "most
favorable" shall, when used with reference to any plans, practices,
policies or programs of the Company and its affiliated companies, be
deemed to refer to the most favorable plans, practices, policies or
programs of the Company and its affiliated companies as in effect at
any time during the three months preceding the Employment Effective
Date or, if more favorable to the Executive, provided generally at any
time after the Employment Effective Date to other executives of the
Company and its affiliated companies.
(iv) WELFARE BENEFIT PLANS. During the Employment Period, the
Executive and/or the Executive's family, as the case may be, shall be
eligible for
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participation in and shall receive all benefits under welfare benefit
plans, practices, policies and programs provided by the Company and
its affiliated companies (including, without limitation, medical,
prescription, dental, vision, disability, salary continuance, group
life and supplemental group life, accidental death and travel accident
insurance plans and programs) to the extent applicable generally to
other executives of the Company and its affiliated companies, but in
no event shall such plans, practices, policies and programs provide
the Executive with benefits that are less favorable, in the aggregate,
than the most favorable such plans, practices, policies and programs
of the Company and its affiliated companies.
(v) EXPENSES. During the Employment Period, the Executive shall
be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the most
favorable policies, practices and procedures of the Company and its
affiliated companies.
(vi) FRINGE BENEFITS AND PERQUISITES. During the Employment
Period, the Executive shall be entitled to fringe benefits and
perquisites in accordance with the most favorable plans, practices,
programs and policies of the Company and its affiliated companies
applicable to similarly situated executives, which, in the aggregate,
shall not be less than Executive's benefits and perquisites in effect
prior to the commencement of the Employment Period or, if more
favorable to the Executive, the benefits and perquisites in effect at
any time after the Employment Effective Date .
(vii) OFFICE AND SUPPORT STAFF. During the Employment Period, the
Executive shall be entitled to an office or offices of a size and with
furnishings and other appointments, and to exclusive personal
secretarial and other assistance, at least equal to the most favorable
of the foregoing provided to the Executive by the Company and its
affiliated companies at any time during the three months preceding the
Employment Effective Date.
(viii) VACATION. During the Employment Period, the Executive
shall be entitled to paid vacation in accordance with the most
favorable plans, policies, programs and practices of the Company and
its affiliated companies, but not less than the amount of vacation
time to which Executive was entitled prior to the commencement of the
Employment Period.
(ix) EQUITY AND PERFORMANCE BASED AWARDS. During the Employment
Period, the Executive shall be granted on an annual basis a long-term
incentive package consisting of stock options, restricted stock or
restricted stock units and other equity-based awards and performance
grants, as selected by the Company, with an aggregate value (as
determined by an independent consulting firm selected by Executive and
reasonably acceptable to the Company) that shall be not less than the
aggregate value of the long-term incentive package awarded the
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Executive in any of the three years immediately preceding such
Employment Period.
3. TERMINATION OF EMPLOYMENT.
(a) DEATH OR DISABILITY. The Executive's employment shall
terminate automatically upon the Executive's death during the
Employment Period. If the Company determines in good faith that the
Disability of the Executive has occurred during the Employment Period
(pursuant to the definition of Disability set forth below), it may
give to the Executive written notice in accordance with Section 11(d)
of this Agreement of its intention to terminate the Executive's
employment. In such event, the Executive's employment with the Company
shall terminate effective on the 30th day after receipt of such notice
by the Executive (the "Disability Effective Date"), provided that,
within the 30 days after such receipt, the Executive shall not have
returned to full-time performance of the Executive's duties. For
purposes of this Agreement, "Disability" shall mean the absence of the
Executive from the Executive's duties with the Company on a full-time
basis for 180 consecutive business days as a result of incapacity due
to mental or physical illness which is determined to be total and
permanent by a physician selected by the Company or its insurers and
acceptable to the Executive or the Executive's legal representative
(such agreement as to acceptability not to be withheld unreasonably).
(b) CAUSE. The Company may terminate the Executive's employment
during the Employment Period for Cause. For purposes of this
Agreement, "Cause" shall mean (i) dishonesty by Executive which
results in substantial personal enrichment at the expense of the
Company or (ii) demonstratively willful repeated violations of
Executive's obligations under this Agreement which are intended to
result and do result in material injury to the Company.
(c) GOOD REASON;WINDOW PERIOD. The Executive's employment may be
terminated during the Employment Period by the Executive for Good
Reason or during a Window Period by the Executive without any reason.
For purposes of this Agreement, "Window Period" shall mean the 90-day
period commencing 366 days after any Change of Control as defined in
Section 9 of this Agreement. For purposes of this Agreement, "Good
Reason" shall mean:
(i) any change in the Executive's position (including
status, offices, titles and reporting requirements), authority,
duties or responsibilities as contemplated by Section 2 of this
Agreement, excluding for this purpose any de minimus changes and
excluding an isolated, insubstantial and inadvertent action not
taken in bad faith and which is remedied by the Company promptly
after receipt of notice thereof given by the Executive, or any
other assignment to the Executive of any duties inconsistent in
any respect with such position, authority, duties or
responsibilities, other than de minimus inconsistencies or other
than, in each case, any such change in duties or such assignment
that would clearly constitute a promotion or other improvement in
Executive's position;
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(ii) any failure by the Company to comply with any of the
provisions of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith
and which is remedied by the Company promptly after receipt of
notice thereof given by the Executive;
(iii) the Company's requiring the Executive to be based at
any office or location other than that described in Section
2(a)(i)(B) hereof;
(iv) any purported termination by the Company of the
Executive's employment otherwise than as expressly permitted by
this Agreement;
(v) any failure by the Company to comply with and satisfy
the requirements of Section 10 of this Agreement, provided that
(A) the successor described in Section 10(c) has received, at
least ten days prior to the Date of Termination (as defined in
subparagraph (e) below), written notice from the Company or the
Executive of the requirements of such provision and (B) such
failure to be in compliance and satisfy the requirements of
Section 10 shall continue as of the Date of Termination; or
(vi) in the event that the Executive is serving as a member
of the Board immediately prior to the Employment Effective Date,
any failure to reelect Executive as a member of the Board, unless
such reelection would be prohibited by the Company's By-laws as
in effect at the beginning of the Employment Period.
(d) NOTICE OF TERMINATION. Any termination by the Company for
Cause, or by the Executive for Good Reason or without any reason
during a Window Period, shall be communicated by Notice of Termination
to the other party hereto given in accordance with Section 11(d) of
this Agreement. The failure by the Executive or the Company to set
forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any
right of the Executive or the Company hereunder or preclude the
Executive or the Company from asserting such fact or circumstance in
enforcing the Executive's or the Company's rights hereunder.
(e) DATE OF TERMINATION.For purposes of this Agreement, the term
"Date of Termination" means (i) if the Executive's employment is
terminated by the Company for Cause, or by the Executive during a
Window Period or for Good Reason, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may be,
(ii) if the Executive's employment is terminated by the Company other
than for Cause or Disability, the Date of Termination shall be the
date on which the Company notifies the Executive of such termination
and (iii) if the Executive's employment is terminated by reason of
death or Disability, the Date of Termination shall be the date of
death of the Executive or the Disability Effective Date, as the case
may be.
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4. OBLIGATIONS OF THE COMPANY UPON TERMINATION.
(a) GOOD REASON OR DURING A WINDOW PERIOD; OTHER THAN FOR CAUSE,
DEATH OR DISABILITY. If, during the Employment Period, the Company
shall terminate the Executive's employment other than for Cause or
Disability or the Executive shall terminate employment for Good Reason
or his employment shall be terminated for any reason during a Window
Period:
(i) the Company shall pay or provide to or in respect of the
Executive the following amounts and benefits:
A. in a lump sum in cash, undiscounted, within 10
days after the Date of Termination, an amount equal to
the sum of (1) the Executive's Annual Base Salary
through the Date of Termination, (2) the product of
(x) the highest Annual Bonus paid or awarded to or
for the benefit of Executive during the three fiscal
years preceding the Date of Termination and (y) a
fraction, the numerator of which is the number of days
in the current fiscal year through the Date of
Termination and the denominator of which is 365, (3)
any deferred compensation previously awarded to or
earned by the Executive (together with any accrued
interest or earnings thereon) and (4) any compensation
for unused vacation time for which the Executive is
eligible in accordance with the most favorable plans,
policies, programs and practices of the Company and its
affiliated companies, in each case to the extent not
theretofore paid (the sum of the amounts described in
clauses (1), (2), (3) and (4) shall be hereinafter
referred to as the "Accrued Obligation");
B. in a lump sum in cash, undiscounted, within 10
days after the Date of Termination, an amount equal
to the sum of (1) three times the Annual Base Salary
and (2) three times the highest Annual Bonus paid or
awarded to or for the benefit of the Executive during
the three fiscal years preceding the Date of
Termination;
C. an additional three Years of Vesting Service
and Years of Credited Service, as well as an
incremental three years added to Executive's age,
for purposes of the Company's Supplemental Retirement
Plan and Profit Sharing Restoration Plan;
D. in a lump sum in cash, undiscounted, within 10
days after the Date of Termination, an amount equal to
the sum of (1) three times the Annual Base Salary and
(2) three times the highest Annual Bonus paid or
awarded to or for the benefit of the Executive
during the three fiscal years preceding the Date of
Termination (the amounts in this clause D. to reflect
the equity component of Executive's overall
compensation);
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E. in a lump sum in cash, undiscounted, within 10
days after the Date of Termination, an amount equal to
the sum of (1) 15% of the Annual Base Salary (this
amount being paid in lieu of the provision of out
placement services) and (2) three times 15% of the
Annual Base Salary that would have been paid or awarded
to or for the benefit of the Executive during the
fiscal year that includes the Date of Termination (this
amount to reflect the perquisites component of
Executive's overall compensation);
F. effective as of the Date of Termination,
(x) immediate vesting and exercisability of,
termination of any restrictions on sale or transfer
(other than any such restriction arising by operation
of law)with respect to and treatment of any performance
goals as having been satisfied at the highest possible
level with respect to each and every stock option,
restricted stock award, restricted stock unit award and
other equity-based award and performance award (each,
a "Compensatory Award") that is outstanding as of
a time immediately prior to the Date of Termination,
(y) the extension of the term during which each and
every Compensatory Award may be exercised by the
Executive until the earlier of (1)the third anniversary
of the Date of Termination or (2) the date upon which
the right to exercise any Compensatory Award would
have expired if the Executive had continued to be
employed by the Company under the terms of this
Agreement until the second anniversary of the
Employment Effective Date and (z) at the sole election
of Executive, in exchange for any or all Compensatory
Awards that are either denominated in or payable in
Common Stock, an amount in cash equal to the number of
shares of Common Stock that are subject to the
Compensatory Award multiplied by the excess of (i) the
Highest Price Per Share (as defined below) over (ii)
the exercise or purchase price, if any, of such
Compensatory Awards. As used herein, the term "Highest
Price Per Share" shall mean the highest price per share
that can be determined to have been paid or agreed to
be paid for any share of Common Stock by a Covered
Person (as defined below) at any time during the
Employment Period or the six-month period immediately
preceding the Employment Effective Date.As used herein,
the term "Covered Person" shall mean any Person other
than an Exempt Person (in each case as defined in
Section 9 hereof) who (i) is the Beneficial Owner (as
defined in Section 9 hereof) of 35% or more of the
outstanding shares of Common Stock or 35% or more of
the combined voting power of the outstanding Voting
Stock (as defined in Section 9 hereof) of the Company
at any time during the Employment Period or the
two-year period immediately prior to the Employment
Effective Date, or (ii) is a Person who has any
material involvement in proposing or effecting the
Change of Control or Potential Change of Control (but
excluding any Person whose involvement in proposing or
effecting the Change of Control or Potential Change of
Control resulted solely from such Person's voting or
selling of Common Stock in connection with the Change
of
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Control or Potential Change of Control, from such
Person's status as a director or officer of the Company
in evaluating and/or approving a Change of Control or
Potential Change of Control or both). In determining
the Highest Price Per Share, the price paid or agreed
to be paid by a Covered Person will be appropriately
adjusted to take into account (W) distributions paid or
payable in stock, (X) subdivisions of outstanding
stock, (Y) combinations of shares of stock into a
smaller number of shares and (Z) similar events.
(ii) for the three-year period commencing with the Date of
Termination, and in the case of medical and health benefits for
the COBRA continuation period commencing thereafter, the Company
shall continue medical and health benefits and group life and
supplemental group life benefits to the Executive and/or the
Executive's family at least equal to those that would have been
provided to them in accordance with the plans, programs,
practices and policies described in Section 2(b)(iv) of this
Agreement if the Executive's employment had not been terminated
(such continuation of such benefits for the applicable period
herein set forth shall be hereinafter referred to as "Welfare
Benefit Continuation"). For purposes of determining eligibility
of the Executive for retiree benefits pursuant to such plans,
practices, programs and policies, the Executive shall be
considered to have remained employed until the third anniversary
of Executive's Date of Termination and to have retired on such
date; and
(iii) the Company shall timely pay or provide to the
Executive and/or the Executive's family any other amounts or
benefits required to be paid or provided or which the Executive
and/or the Executive's family is eligible to receive pursuant to
this Agreement and under any plan, program, policy or practice or
contract or agreement of the Company and its affiliated companies
as in effect and applicable generally to other executives and
their families on the Employment Effective Date (such other
amounts and benefits shall be hereinafter referred to as the
"Other Benefits").
(b) DEATH. If the Executive's employment is terminated by reason
of the Executive's death during the Employment Period, and other than
during a Window Period in which event the provisions of Section 4(a)
shall govern and the Executive shall be entitled to the amounts and
benefits set forth therein, this Agreement shall terminate and the
Company shall be obligated to pay to the Executive's legal
representatives under this Agreement the greater of (i) such benefits
as would be provided to Executive under the Existing Agreement or
(ii)(A) the payment of the Accrued Obligations (which shall be paid to
the Executive's estate or beneficiary, as applicable, in a lump sum in
cash within 30 days of the Date of Termination), (B) the payment of an
amount equal to the Annual Salary that would have been paid to the
Executive pursuant to this Agreement for the period beginning on the
Date of Termination and ending on the first anniversary thereof if the
Executive's employment had not terminated by reason of death (which
shall be paid to the Executive's estate or beneficiary, as applicable,
in a lump sum in cash within 30
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days of the Date of Termination), (C) the timely payment or provision
of the Welfare Benefit Continuation and Other Benefits and (D)
effective as of the Date of Termination, (x) immediate vesting and
exercisability of, and termination of any restrictions on sale or
transfer (other than any such restriction arising by operation of law)
with respect to, each and every Compensatory Award outstanding as of a
time immediately prior to the Date of Termination, (y) the extension
of the term during which each and every Compensatory Award may be
exercised or purchased by the Executive until the earlier of (I) the
third anniversary of the Date of Termination or (II) the date upon
which the right to exercise or purchase any Compensatory Award would
have expired if the Executive had continued to be employed by the
Company under the terms of this Agreement until the second anniversary
of the Employment Effective Date and (z) at the sole election of
Executive's legal representative, in exchange for any Compensatory
Award that is either denominated in or payable in Common Stock, an
amount in cash equal to the excess of (I) the Highest Price Per Share
over (II) the exercise or purchase price, if any, of such Compensatory
Award.
(c) DISABILITY. If the Executive's employment is terminated by
reason of the Executive's Disability during the Employment Period, and
other than during a Window Period in which event the provisions of
Section 4(a) shall govern and the Executive shall be entitled to the
amounts and benefits set forth therein, this Agreement shall terminate
and the Company shall be obligated to pay to the Executive, the
greater of (i) such benefits as would be provided to Executive under
the Existing Agreement or (ii)(A) the payment of the Accrued
Obligations (which shall be paid to the Executive in a lump sum in
cash within 30 days of the Date of Termination), (B) the payment of an
amount equal to the Annual Salary that would have been paid to the
Executive pursuant to this Agreement for the period beginning on the
Date of Termination and ending on the first anniversary thereof if the
Executive's employment had not terminated by reason of Disability
(which shall be paid to the Executive in a lump sum in cash within 30
days of the Date of Termination), (C) the timely payment or provision
of the Welfare Benefit Continuation and Other Benefits and (D)
effective as of the Date of Termination, (x) immediate vesting and
exercisability of, and termination of any restrictions on sale or
transfer (other than any such restriction arising by operation of law)
with respect to, each and every Compensatory Award outstanding as of a
time immediately prior to the Date of Termination, (y) the extension
of the term during which each and every Compensatory Award may be
exercised or purchased by the Executive until the earlier of (I) the
third anniversary of the Date of Termination or (II) the date upon
which the right to exercise or purchase any Compensatory Award would
have expired if the Executive had continued to be employed by the
Company under the terms of this Agreement until the second anniversary
of the Employment Effective Date and (z) at the sole election of
Executive, in exchange for any Compensatory Award that is either
denominated in or payable in Common Stock, an amount in cash equal to
the excess of (I) the Highest Price Per Share over (II) the exercise
or purchase price, if any, of such Compensatory Award.
(d) CAUSE; OTHER THAN FOR GOOD REASON OR DURING A WINDOW PERIOD .
If the Executive's employment shall be terminated for Cause during the
Employment Period, and other than during a Window Period in which
event the provisions of Section 4(a)
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shall govern and the Executive shall be entitled to the amounts and
benefits set forth therein, this Agreement shall terminate without
further obligations under this Agreement to the Executive other than
for Accrued Obligations. If the Executive terminates employment during
the Employment Period other than for Good Reason and other than during
a Window Period, this Agreement shall terminate without further
obligations to the Executive, other than for the payment of Accrued
Obligations. In such case, all Accrued Obligations shall be paid to
the Executive in a lump sum in cash within 30 days of the Date of
Termination.
5. NON-EXCLUSIVITY OF RIGHTS. Except as provided in Section 4 of this
Agreement, nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any plan, program, policy or practice
provided by the Company or any of its affiliated companies and for which
the Executive may qualify, nor shall anything herein limit or otherwise
affect such rights as the Executive may have under any contract or
agreement with the Company or any of its affiliated companies. Amounts
which are vested benefits or which the Executive is otherwise entitled to
receive under any plan, policy, practice or program of or any contract or
agreement with the Company or any of its affiliated companies at or
subsequent to the Date of Termination shall be payable in accordance with
such plan, policy, practice or program or contract or agreement except as
such plan, policy, practice or program is expressly superseded by this
Agreement.
6. FULL SETTLEMENT; RESOLUTION OF DISPUTES.
(a) The Company's obligation to make payments provided for in
this Agreement and otherwise to perform its obligations hereunder
shall not be affected by any set-off, counterclaim, recoupment,
defense, mitigation or other claim, right or action which the Company
may have against the Executive or others. The Company agrees to pay
promptly as incurred, to the full extent permitted by law, all legal
fees and expenses which the Executive may reasonably incur as a result
of any contest (unless the Executive's claim is found by a court of
competent jurisdiction to have been frivolous) by the Company, the
Executive or others of the validity or enforceability of, or liability
under, any provision of this Agreement (other than Section 8 hereof)
or any guarantee of performance thereof (including as a result of any
contest by the Executive about the amount of any such payment pursuant
to this Agreement), plus in each case interest on any delayed payment
at the Applicable Federal Rate provided for in Section 7872(f)(2)(A)
of the Code.
(b) If there shall be any dispute between the Company and the
Executive concerning (i) in the event of any termination of the
Executive's employment by the Company, whether such termination was
for Cause, or (ii) in the event of any termination of employment by
the Executive, whether Good Reason existed or whether such termination
occurred during a Window Period, then, unless and until there is a
final, nonappealable judgment by a court of competent jurisdiction
declaring that such termination was for Cause or that the
determination by the Executive of the existence of Good Reason was not
made in good faith or that the termination by the Executive did not
occur during a Window Period, the Company shall pay all amounts, and
provide all
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benefits, to the Executive and/or the Executive's family or other
beneficiaries, as the case may be, that the Company would be required
to pay or provide pursuant to Section 4(a) hereof as though such
termination were by the Company without Cause or by the Executive with
Good Reason or during a Window Period; provided, however, that the
Company shall not be required to pay any disputed amounts pursuant to
this paragraph except upon receipt of an undertaking by or on behalf
of the Executive to repay all such amounts to which the Executive is
ultimately adjudged by such court not to be entitled; provided further
that such undertaking need not be secured, whether by bond or
otherwise.
7. CERTAIN ADDITIONAL PAYMENTS BY THE COMPANY.
(a) Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that any payment or distribution
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, but determined without regard to any additional payments
required under this Section 7) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Executive with respect to such excise
tax (such excise tax, together with any such interest and penalties,
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 upon 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 7(c), all determinations
required to be made under this Section 7, including whether and when a
Gross-Up Payment is required and the amount of such Gross-Up Payment
and the assumptions to be utilized in arriving at such determination,
shall be made by Arthur Andersen LLP (the "Accounting Firm");
provided, however, that the Accounting Firm shall not determine that
no Excise Tax is payable by the Executive unless it delivers to the
Executive a written opinion (the "Accounting Opinion") that failure to
report the Excise Tax on the Executive's applicable Federal income tax
return would not result in the imposition of a negligence or similar
penalty. In the event that Arthur Andersen LLP has served, at any time
during the two years immediately preceding a Change of Control Date,
as accountant or auditor for the individual, entity or group that is
involved in effecting or has any material interest in the Change of
Control, the Executive, at his option, shall appoint another
nationally recognized accounting firm to make the determinations and
perform the other functions specified in this Section 7 (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. Within 15 business days of the receipt of
notice from the Executive that there has been a Payment, or such
earlier time as is requested by the Company, the Accounting Firm shall
make all determinations required under this Section 7, shall provide
to the Company and the Executive a written report setting forth such
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determinations, together with detailed supporting calculations, and,
if the Accounting Firm determines that no Excise Tax is payable, shall
deliver the Accounting Opinion to the Executive. Any Gross-Up Payment,
as determined pursuant to this Section 7, shall be paid by the Company
to the Executive within five days of the receipt of the Accounting
Firm's determination. Subject to the remainder of this Section 7, 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 a Gross-Up
Payment that 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 it is ultimately determined in
accordance with the procedures set forth in Section 7(c) that the
Executive 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
claims by the Internal Revenue Service that, if successful, would
require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but not later than
30 days after the Executive actually receives notice 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; provided,
however, that the failure of the Executive to notify the Company of
such claim (or to provide any required information with respect
thereto) shall not affect any rights granted to the Executive under
this Section 7 except to the extent that the Company is materially
prejudiced in the defense of such claim as a direct result of such
failure. The Executive shall not pay such claim prior to the
expiration of the 30-day period following the date on which he gives
such notice to the Company (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due). If the
Company notifies 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 selected
by the Company and reasonably acceptable to the Executive;
(iii) cooperate with the Company in good faith in order
effectively to contest such claim; and
(iv) if the Company elects not to assume and control the
defense of such claim, permit the Company to participate in any
proceedings relating to such claim;
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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 7(c), the Company shall have the right, at its sole option, to
assume the defense of and control all proceedings in connection with
such contest, in which case it may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the
taxing authority in respect of such claim and may either direct the
Executive to pay the tax claimed and sue 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 pay such claim and sue 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 right to assume the defense of and
control the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue
raised by the Internal Revenue Service or any other taxing authority.
(d) If, after the receipt by the Executive of an amount advanced
by the Company pursuant to Section 7(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 7(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
7(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.
8. CONFIDENTIAL INFORMATION; CERTAIN PROHIBITED ACTIVITIES.
(a) The Executive shall hold in a fiduciary capacity for the
benefit of the Company all secret or confidential information,
knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, which shall have been
obtained by the Executive during the Executive's employment by the
Company or any of its affiliated companies and which shall not be or
become public knowledge
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(other than by acts by the Executive or representatives of the
Executive in violation of this Agreement). After the Executive's Date
of Termination, the Executive shall not, without the prior written
consent of the Company or as may otherwise be required by law or legal
process, communicate or divulge any such information, knowledge or
data to anyone other than the Company and those designated by it.
Except as provided in subsection (c) below, in no event shall an
asserted violation of the provisions of this Section 8 constitute a
basis for deferring or withholding any amounts otherwise payable to
Executive under this Agreement. Also, within 14 days of the
termination of Executive's employment for any reason, Executive shall
return to the Company all documents and other tangible items of or
containing Company information which are in Executive's possession,
custody or control.
(b) Executive agrees that for a period of 24 complete calendar
months following his Date of Termination, Executive will not, either
directly or indirectly, call on, solicit, induce or attempt to induce
any of the employees or officers of the Company whom Executive had
knowledge of or association with during Executive's employment with
the Company to terminate their association with the Company either
personally or through the efforts of his or her subordinates.
(c) In the event of a breach by Executive of any provision of
this Section 8, the Company shall be entitled to (i) cease any Welfare
Benefit Contribution entitlement provided pursuant to Section 4(a)(ii)
hereof, (ii) relief by temporary restraining order, temporary
injunction and/or permanent injunction, (iii) recovery of all
attorneys' fees and costs incurred in obtaining such relief and (iv)
any other legal and equitable relief to which it may be entitled,
including monetary damages.
9. CHANGE OF CONTROL; POTENTIAL CHANGE OF CONTROL.
(a) As used in this Agreement, the terms set forth below shall
have the following respective meanings:
"Beneficial Owner" shall mean, with reference to any securities,
any Person if:
(i) such Person is the "beneficial owner" of (as determined
pursuant to Rule 13d-3 of the General Rules and Regulations under
the Exchange Act, as in effect on the date of this Agreement)
such securities; provided, however, that a Person shall not be
deemed the "Beneficial Owner" of, or to "beneficially own," any
security under this subsection (i) as a result of an agreement,
arrangement or understanding to vote such security if such
agreement, arrangement or understanding: (x) arises solely from a
revocable proxy or consent given in response to a public (i.e.,
not including a solicitation exempted by Rule 14a-2(b)(2) of the
General Rules and Regulations under the Exchange Act) proxy or
consent solicitation made pursuant to, and in accordance with,
the applicable provisions of the General Rules and Regulations
under the Exchange Act and (y) is not then reportable by such
Person on Schedule 13D under the Exchange Act (or any comparable
or successor report); or
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(ii) such Person is a member of a group (as that term is
used in Rule 13d-5(b) of the General Rules and Regulations under
the Exchange Act) that includes any other Person (other than
Exempt Persons) that beneficially owns such securities;
provided, however, that a Person shall not be deemed the "Beneficial Owner"
of, or to "beneficially own" any security held by a Norris Family Trust
with respect to which such Person acts in the capacity of trustee, personal
representative, custodian, administrator, executor, officer, partner,
member, or other fiduciary; provided, further, that nothing in this
definition shall cause a Person engaged in business as an underwriter of
securities to be the Beneficial Owner of, or to "beneficially own," any
securities acquired through such Person's participation in good faith in a
firm commitment underwriting until the expiration of forty days after the
date of such acquisition. For purposes hereof, "voting" a security shall
include voting, granting a proxy, consenting or making a request or demand
relating to corporate action (including, without limitation, a demand for a
stockholder list, to call a stockholder meeting or to inspect corporate
books and records) or otherwise giving an authorization (within the meaning
of Section 14(a) of the Exchange Act) in respect of such security.
The terms "beneficially own" and "beneficially owning" shall have
meanings that are correlative to this definition of the term "Beneficial
Owner."
"Change of Control" shall mean any of the following occurring
on or after the Agreement Effective Date:
(i) Any Person (other than an Exempt Person) shall become
the Beneficial Owner of 35% or more of the shares of Common Stock
then outstanding or 35% or more of the combined voting power of
the Voting Stock of the Company then outstanding; provided,
however, that no Change of Control shall be deemed to occur for
purposes of this subsection (i) if such Person shall become a
Beneficial Owner of 35% or more of the shares of Common Stock or
35% or more of the combined voting power of the Voting Stock of
the Company solely as a result of (x) an Exempt Transaction or
(y) an acquisition by a Person pursuant to a reorganization,
merger or consolidation, if, following such reorganization,
merger or consolidation, the conditions described in clauses (x),
(y) and (z) of subsection (iii) of this definition are satisfied;
(ii) Individuals who, as of the Agreement Effective Date,
constitute the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to
the Agreement Effective Date whose election, or nomination for
election by the Company's shareholders, was approved by a vote of
at least a majority of the directors then comprising the
Incumbent Board shall be considered as though such individual
were a member of the Incumbent Board; provided, further, that
there shall be excluded, for this purpose, any such individual
whose initial assumption of office occurs as a result of any
actual or threatened election contest that is subject to the
provisions of Rule 14a-11 under the Exchange Act;
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(iii) Approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, unless,
following such reorganization, merger or consolidation, (x) more
than 65% of the then outstanding shares of common stock of the
corporation resulting from such reorganization, merger or
consolidation and the combined voting power of the then
outstanding Voting Stock of such corporation is beneficially
owned, directly or indirectly, by all or substantially all of the
Persons who were the Beneficial Owners of the outstanding Common
Stock immediately prior to such reorganization, merger or
consolidation (ignoring, for purposes of this clause (x), the
first proviso in the definition of "Beneficial Owner" set forth
in Section 9(a)) in substantially the same proportions as their
ownership immediately prior to such reorganization, merger or
consolidation of the outstanding Common Stock, (y) no Person
(excluding any Exempt Person or any Person beneficially owning,
immediately prior to such reorganization, merger or
consolidation, directly or indirectly, 35% or more of the Common
Stock then outstanding or 35% or more of the combined voting
power of the Voting Stock of the Company then outstanding)
beneficially owns, directly or indirectly, 35% or more of the
then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidation or
the combined voting power of the then outstanding Voting Stock of
such corporation and (z) at least a majority of the members of
the board of directors of the corporation resulting from such
reorganization, merger or consolidation were members of the
Incumbent Board at the time of the execution of the initial
agreement or initial action by the Board providing for such
reorganization, merger or consolidation; or
(iv) Approval by the shareholders of the Company of (x) a
complete liquidation or dissolution of the Company, unless such
liquidation or dissolution is approved as part of a plan of
liquidation and dissolution involving a sale or disposition of
all or substantially all of the assets of the Company to a
corporation with respect to which, following such sale or other
disposition, all of the requirements of clauses (y)(A), (B) and
(C) of this subsection (iv) are satisfied, or (y) the sale or
other disposition of all or substantially all of the assets of
the Company, other than to a corporation, with respect to which,
following such sale or other disposition, (A) more than 65% of
the then outstanding shares of common stock of such corporation
and the combined voting power of the Voting Stock of such
corporation is then beneficially owned, directly or indirectly,
by all or substantially all of the Persons who were the
Beneficial Owners of the outstanding Common Stock immediately
prior to such sale or other disposition (ignoring, for purposes
of this clause (y)(A), the first proviso in the definition of
"Beneficial Owner" set forth in Section 9(a)) in substantially
the same proportions as their ownership, immediately prior to
such sale or other disposition, of the outstanding Common Stock,
(B) no Person (excluding any Exempt Person and any Person
beneficially owning, immediately prior to such sale or other
disposition, directly or indirectly, 35% or more of the Common
Stock then outstanding or 35% or more of the combined voting
power of the Voting Stock of the Company then outstanding)
beneficially owns, directly or indirectly, 35% or more of the
then outstanding shares of common stock of such corporation and
the combined voting power of the then outstanding Voting Stock of
such corporation and (C) at
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least a majority of the members of the board of directors of such
corporation were members of the Incumbent Board at the time of
the execution of the initial agreement or initial action of the
Board providing for such sale or other disposition of assets of
the Company.
"Common Stock" shall mean the common stock, par value $.01 per share,
of the Company, and shall include, for purposes of Section 4 hereof, stock
of any successor, within the meaning of Section 10(c).
"Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
"Exempt Person" shall mean (i) the Company, any subsidiary of the
Company, any employee benefit plan of the Company or any subsidiary of the
Company, and any Person organized, appointed or established by the Company
for or pursuant to the terms of any such plan, (ii) any Person who is shown
under the caption "Principal and Selling Stockholders" in the Company's
final prospectus dated July 28, 1999 relating to its initial public
offering of the Common Stock as beneficially owning (as determined pursuant
to Rule 13d-3 of the General Rules and Regulations under the Exchange Act,
as in effect on the date of this Agreement) one percent or more of the
Common Stock and (iii) any lineal descendant and any spouse of any such
lineal descendant of D.W. Norris, but only if such lineal descendant and
any spouse of any such lineal descendant shall not at any time hold shares
of Common Stock or Voting Stock of the Company with the primary purpose of
effecting with respect to the Company (A) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation, (B) a sale or
transfer of a material amount of assets, (C) any material change in the
capitalization, (D) any other material change in the business or corporate
structure or operations, (E) changes in the corporate charter or bylaws or
(F) a change in the composition of the Board or of the members of senior
management.
"Exempt Transaction" shall mean an increase in the percentage of the
outstanding shares of Common Stock or the percentage of the combined voting
power of the outstanding Voting Stock of the Company beneficially owned by
any Person solely as a result of a reduction in the number of shares of
Common Stock then outstanding due to the repurchase of Common Stock by the
Company, unless and until such time as such Person shall purchase or
otherwise become the Beneficial Owner of additional shares of Common Stock
constituting 3% or more of the then outstanding shares of Common Stock or
additional Voting Stock representing 3% or more of the combined voting
power of the then outstanding Voting Stock.
"Norris Family Trust" shall mean any trust, estate, custodianship,
other fiduciary arrangement, corporation, limited partnership, limited
liability company or other business entity (collectively, a "Family
Entity") formed, owned, held, or existing primarily for the benefit of the
lineal descendants of D.W. Norris and any spouses of such lineal
descendants, but only if such Family Entity shall not at any time hold
Common Stock or Voting Stock of the Company with the primary purpose of
effecting with respect to the Company (i) an extraordinary corporate
transaction, such as a merger, reorganization or liquidation (ii) a sale or
transfer of a material amount of assets, (iii) any material change in
capitalization, (iv) any other material change in
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business or corporate structure or operations, (v) changes in corporate
charter or bylaws, or (vi) a change in the composition of the Board or of
the members of senior management.
"Person" shall mean any individual, firm, corporation, partnership,
association, trust, unincorporated organization or other entity.
"Potential Change of Control" shall mean any of the following:
(i) a tender offer or exchange offer is commenced by any
Person which, if consummated, would constitute a Change of
Control;
(ii) an agreement is entered into by the Company providing
for a transaction which, if consummated, would constitute a
Change of Control;
(iii) any election contest is commenced that is subject to
the provisions of Rule 14a-11 under the Exchange Act; or
(iv) any proposal is made, or any other event or transaction
occurs or is continuing, which the Board determines, if
consummated, would result in a Change of Control.
"Voting Stock" shall mean, with respect to a corporation, all
securities of such corporation of any class or series that are entitled to
vote generally in the election of directors of such corporation (excluding
any class or series that would be entitled so to vote by reason of the
occurrence of any contingency, so long as such contingency has not
occurred).
(a) In the event that the Company is a party to a
transaction that is otherwise intended to qualify for "pooling of
interests" accounting treatment, such transaction constitutes a
Change of Control within the meaning of this Agreement and
individuals who satisfy the requirements in clauses (i) and (ii)
below constitute at least 51% of the number of directors of the
entity surviving such transaction or any parent thereof:
individuals who (i) immediately prior to such transaction
constituted the Board and (ii) 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 relating to the election of directors
of the Company) whose appointment or election by the Board or
nomination for election by the Company's stockholders was
approved or recommended by a vote of at least 51% 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 recommended, then this
Section 9 and other Agreement provisions concerning a Change of
Control shall, to the extent practicable, be interpreted so as to
permit such accounting treatment, and to the extent that the
application of this sentence does not preserve the availability
of such accounting treatment, then, to the extent that any
provision or combination of provisions of this Section 9 and
other Agreement provisions concerning a Change of Control
disqualifies the transaction as a "pooling" transaction
(including, if applicable, all provisions of the Agreement
relating to a Change of Control), the Board shall amend such
provision or
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provisions if and to the extent necessary (including declaring
such provision or provisions to be null and void as of the date
hereof, which declaration shall be binding on Executive) so that
such transaction may be accounted for as a "pooling of
interests." All determinations with respect to this paragraph
shall be made by the Company, based upon the advice of the
accounting firm whose opinion with respect to "pooling of
interests" is required as a condition to the consummation of such
transaction.
10. SUCCESSORS.
(a) This Agreement is personal to the Executive and without
the prior written consent of the Company shall not be assignable
by the Executive otherwise than by will or the laws of descent
and distribution. This Agreement shall inure to the benefit of
and be enforceable by the Executive's heirs, executors and other
legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and may only be assigned to a successor
described in Section 10(c).
(c) 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 assume expressly 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.
As used in this Agreement, "Company" shall mean the Company as
hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this
Agreement by operation of law, or otherwise.
11. MISCELLANEOUS.
(a) This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware, without
reference to principles of conflict of laws that would require
the application of the laws of any other state or jurisdiction.
(b) The captions of this Agreement are not part of the
provisions hereof and shall have no force or effect.
(c) This Agreement may not be amended or modified otherwise
than by a written agreement executed by the parties hereto or
their respective successors and heirs, executors and other legal
representatives.
(d) All notices and other communications hereunder shall be
in writing and shall be given, if by the Executive to the
Company, by telecopy or facsimile transmission at the
telecommunications number set forth below and, if by either the
Company or the Executive, either by hand delivery to the other
party or by registered or certified mail, return receipt
requested, postage prepaid, addressed as follows:
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If to the Executive:
------------------------------------------------------
------------------------------------------------------
If to the Company:
Lennox International Inc.
2140 Lake Park Blvd.
Richardson, Texas 75080-2254
Telecommunications Number: (972) 497-6660
Attention: Corporate Secretary
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(e) The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement.
(f) The Company may withhold from any amounts payable under
this Agreement such Federal, state or local taxes as shall be
required to be withheld pursuant to any applicable law or
regulation.
(g) The Executive's or the Company's failure to insist upon
strict compliance with any provision hereof or any other
provision of this Agreement or the failure to assert any right
the Executive or the Company may have hereunder, including,
without limitation, the right of the Executive to terminate
employment for Good Reason or during a Window Period pursuant to
Section 3(c) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right
of this Agreement.
(h) This Agreement shall become effective as of July 31,
2000 (the "Agreement Effective Date "), and upon effectiveness of
this Agreement, the Original Agreement shall be amended and
restated in its entirety to read as set forth herein.
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IN WITNESS WHEREOF, the Executive has hereunto set his hand
and, pursuant to the authorization from its Board of Directors, the Company has
caused these presents to be executed in its name on its behalf, all as of the
day and year first above written.
LENNOX INTERNATIONAL INC.
-------------------------
By:----------------------
Name:--------------------
Title:-------------------
EXECUTIVE
-------------------------
Signature
