UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q/A
Amendment No. 1
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Quarterly Period Ended March 31, 1996
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the Transition Period From ______ to _______
Commission file number 0-6839
BRENCO, INCORPORATED
(Exact name of registrant as specified in its charter)
Virginia #54-0493835
(State of Incorporation) (IRS Employer Identification No.)
One Park West Circle, 23113
Midlothian, VA (Zip Code)
(Address of principal executive
offices)
(804) 794-1436
(Telephone number)
Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such
shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90
days.
<PAGE>
YES [X] NO [ ]
Common stock, par value $1.00 per share: 10,204,386 shares
outstanding as of March 31, 1996
The undersigned registrant hereby amends Part II, Item 6(a),
Exhibits, of its Form 10-Q for the quarterly period ended March 31,
1996 ("Form 10-Q"), to include exhibits 4.2, 10.1, 10.2, 10.3, 10.4,
10.5, 10.6, 10.7, 10.8, and 10.9, which were either inadvertently
omitted from the Form 10-Q as initially filed or were unavailable at
the time of such filing. The exhibit index has been amended to
reflect that the foregoing exhibits are filed herewith. Pursuant to
Rule 12b-15 under the Securities Exchange Act of 1934, the complete
text of Item 6 is included herein, although the only portions of that
Item amended by this amendment No. 1 are described above.
Part II Other Information
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits
4.2 The Company agrees to furnish to the Commission upon request any
instrument with respect to long-term debt as to which the total amount
of securities authorized thereunder does not exceed 10% of the
Company's total consolidated assets.
10.1 Change in Control Agreement dated as of March 22, 1996 between
the Company and Needham B. Whitfield
10.2 Change in Control Agreement dated as of March 22, 1996 between
the Company and J. Craig Rice
10.3 Change in Control Agreement dated as of March 22, 1996 between
the Company and Jacob M. Feichtner
10.4 Change in Control Agreement dated as of March 22, 1996 between
the Company and Howard J. Bush
10.5 Change in Control Agreement dated as of March 22, 1996 between
the Company and Donald E. Fitzsimmons
10.6 1987 Restricted Stock Plan of the Company, as amended and
restated effective March 22, 1996
10.7 1988 Stock Option Plan of the Company, as amended and restated
effective March 22, 1996
10.8 Executive Retirement Incentive Plan, as amended and restated
effective March 22, 1996
10.9 Trust Agreement for the Company's Executive Retirement Incentive
Plan dated as of May 31, 1996
27. Financial Data Schedule
(b) Reports on Form 8-K - none
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this Amendment No. 1 on Form
10-Q/A to be signed on its behalf by the undersigned thereunto
authorized.
BRENCO, INCORPORATED
By /s/ Jacob M. Feichtner
Jacob M. Feichtner
Executive Vice President
& Secretary
June 14, 1996
<PAGE>
EXHIBIT 10.1
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT is entered into as of the 22nd day of March, 1996
by and between Brenco, Incorporated, a Virginia corporation (the
"Company"), and Needham B. Whitfield ("Executive").
RECITALS
I. Executive currently serves as a key employee member of
management of the Company and his services and knowledge are valuable
to the Company.
II. The Board (as defined in Section 1) has determined that it
is in the best interests of the Company and its stockholders to secure
Executive's continued services and to ensure Executive's continued
dedication and objectivity in the event of any threat or occurrence
of, or negotiation or other action that could lead to, or create the
possibility of, a Change in Control (as defined in Section 1) of the
Company, without concern as to whether Executive might be hindered or
distracted by personal uncertainties and risks created by any such
possible Change in Control, and to encourage Executive's full
attention and dedication to the Company, the Board has authorized the
Company to enter into this Agreement.
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements herein contained, the Company and
Executive hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms
shall have the respective meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Cause" means (1) a material breach by Executive of the
duties and responsibilities of Executive (other than as a result of
incapacity due to physical or mental illness) which is demonstrably
willful and deliberate on Executive's part, which is committed in bad
faith or without reasonable belief that such breach is in the best
interests of the Company and which is not remedied in a reasonable
period of time after receipt of written notice from the Company
specifying such breach or (2) the commission by Executive of a felony
involving moral turpitude. Cause shall not exist unless and until the
Company has delivered to Executive a copy of a resolution duly adopted
by three-quarters of the Board at a meeting of the Board called and
held for such purpose (after reasonable notice to Executive and an
opportunity for Executive, together with his counsel, to be heard
before the Board), finding that in the good faith opinion of the Board
the Executive was guilty of the conduct set forth in this Section 1(b)
and specifying the particulars thereof in detail.
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(c) "Change in Control" means:
(1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), of beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act, of twenty
percent (20%) or more of either (i) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common Stock")
or (ii) the combined voting power of the then outstanding securities
of the Company entitled to vote generally in the election of directors
(the "Outstanding Company Voting Securities"); provided, however, that
the following acquisitions shall not constitute a Change in Control:
(A) any acquisition by the Company, (B) any acquisition directly from
the Company, (C) any acquisition by, or benefit distribution from, an
employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company, (D) any
acquisition pursuant to any compensatory stock option or stock
purchase plan for employees, (E) any acquisition by any corporation
pursuant to a reorganization, merger or consolidation involving the
Company, if, immediately after such reorganization, merger or
consolidation, each of the conditions described in clauses (i), (ii)
and (iii) of subsection (3) of this Section (1)(c) shall be satisfied,
or (F) any acquisition by the Executive or any group of persons
including the Executive; or (G) the acquisition by members of the
Whitfield Family (as hereinafter defined), individually or
collectively, of any direct or indirect beneficial ownership in
addition to the individual or collective beneficial ownership of
members of the Whitfield Family which exists on the date hereof; and
provided further that, for purposes of clause (A), if any Person
(other than the Company or any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company) shall become the beneficial owner of fifty
percent (50%) or more of the Outstanding Company Common Stock or fifty
percent (50%) or more of the Outstanding Company Voting Securities by
reason of an acquisition by the Company and such Person shall, after
such acquisition by the Company, become the beneficial owner of any
additional shares of the Outstanding Company Common Stock or any
additional Outstanding Voting Securities, such additional beneficial
ownership shall constitute a Change in Control;
(2) individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of such Board; provided, however, that any individual
who becomes a director of the Company subsequent to the date hereof
whose election, or nomination for election by the Company's
stockholders, was approved by the vote of at least a majority of the
directors then comprising the Incumbent Board shall be deemed to have
been a member of the Incumbent Board; and provided further, that no
individual who was initially elected as a director of the Company as a
result of an actual or threatened election contest, as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act, or any other actual or threatened solicitation of proxies or
consents by or on behalf of any Person other than the Board shall be
deemed to have been a member of the Incumbent Board;
<PAGE>
(3) approval by the stockholders of the Company of a
reorganization, merger or consolidation unless, in any such case,
immediately after such reorganization, merger or consolidation, (i)
more than fifty percent (50%) of the then outstanding shares of common
stock of the corporation resulting from such reorganization, merger or
consolidation and more than fifty percent (50%) of the combined voting
power of the then outstanding securities of such corporation entitled
to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals or entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities immediately prior to such reorganization, merger or
consolidation and in substantially the same proportions relative to
each other as their ownership, immediately prior to such
reorganization, merger or consolidation, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the
case may be, (ii) no Person (other than the Company, any employee
benefit plan (or related trust) sponsored or maintained by the Company
or the corporation resulting from such reorganization, merger or
consolidation (or any corporation controlled by the Company), or any
Person which beneficially owned, immediately prior to such
reorganization, merger or consolidation, directly or indirectly,
twenty percent (20%) or more of the Outstanding Company Common Stock
or the Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty percent (20%) or
more of the then outstanding shares of common stock of such
corporation or twenty percent (20%) or more of the combined voting
power of the then outstanding securities of such corporation entitled
to vote generally in the election of directors and (iii) 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 action of the Board providing for such
reorganization, merger or consolidation; or
(4) approval by the stockholders of the Company of (i) a
plan of complete liquidation or dissolution of the Company or (ii) 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,
immediately after such sale or other disposition, (A) more than fifty
percent (50%) of the then outstanding shares of common stock thereof
and more than fifty percent (50%) of the combined voting power of the
then outstanding securities thereof entitled to vote generally in the
election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities immediately prior to such sale or other disposition and in
substantially the same proportions relative to each other as their
ownership, immediately prior to such sale or other disposition, of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (B) no Person (other than the Company,
any employee benefit plan (or related trust) sponsored or maintained
by the Company or such corporation (or any corporation controlled by
the Company), or any Person which beneficially owned, immediately
prior to such sale or other disposition, directly or indirectly,
twenty percent (20%) or more of the Outstanding
<PAGE>
Company Common Stock or the Outstanding Company Voting Securities, as
the case may be) beneficially owns, directly or indirectly, twenty
percent (20%) or more of the then outstanding shares of common stock
thereof or twenty percent (20%) or more of the combined voting power
of the then outstanding securities thereof entitled to vote generally
in the election of directors and (C) at least a majority of the
members of the board of directors thereof were members of the
Incumbent Board at the time of the execution of the initial agreement
or action of the Board providing for such sale or other disposition.
For purposes of Section 1(c)(1), "Whitfield Family" shall mean (I)
Needham B. Whitfield and members of his "immediate family" (as that
term is defined in Rule 16a-1(e) under the Exchange Act), (ii) Anne
Whitfield Kenny and members of her immediate family, (iii) the Estate
of Mildred F. Whitfield and (iv) and in each of the foregoing
instances, their respective personal or legal representatives,
executors, administrators, successors, heirs, distributees and
legatees.
Notwithstanding anything contained in the Agreement to the
contrary, it is understood that the collective beneficial ownership of
members of the Whitfield Family as of the date hereof shall not
constitute, or be construed or deemed to constitute, a Change of
Control.
Furthermore, notwithstanding anything contained in this Agreement
to the contrary, if Executive's employment is terminated prior to a
Change in Control and Executive reasonably demonstrates that such
termination was at the request of a third party who has indicated an
intention or taken steps reasonably calculated to effect a Change in
Control (a "Third Party") who effectuates a Change in Control, then
for all purposes of this Agreement, the date of a Change in Control
shall mean the date immediately prior to the date of such termination
of Executive's employment.
(d) "Company" means Brenco, Incorporated, a Virginia
corporation.
(e) "Date of Termination" means (1) the effective date on
which Executive's employment by the Company terminates as specified in
a prior written notice by the Company or Executive, as the case may
be, to the other, delivered pursuant to Section 11 or (2) if
Executive's employment by the Company terminates by reason of death,
the date of death of Executive.
(f) "Good Reason" means, without Executive's express
written consent, the occurrence of any of the following events after a
Change in Control:
(1) (i) the assignment to Executive of any duties
inconsistent in any material adverse respect with Executive's
position(s), duties, responsibilities or status with the Company
immediately prior to such Change in Control, (ii) a material adverse
change in Executive's reporting responsibilities, titles or offices
with the Company as in effect immediately prior to such Change in
Control or (iii) any removal or involuntary termination of Executive
from the Company otherwise than as expressly permitted by this
Agreement or any failure to re-elect Executive to any position with
<PAGE>
the Company held by Executive immediately prior to such Change in
Control;
(2) a reduction by the Company in Executive's rate of
annual base salary as in effect immediately prior to such Change in
Control or as the same has been increased thereafter;
(3) any requirement of the Company that Executive (i) be
based anywhere more than thirty-five miles from the facility where
Executive is located at the time of the Change in Control;
(4) the failure of the Company to (i) continue in effect
any employee benefit plan or compensation plan in which Executive is
participating immediately prior to such Change in Control, unless
Executive is permitted to participate in other plans providing
Executive with substantially comparable benefits, or the taking of any
action by the Company which would adversely affect Executive's
participation in or materially reduce Executive's benefits under any
such plan, (ii) provide Executive and Executive's dependents with
welfare benefits (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life,
group life, accidental death and travel accident insurance plans and
programs) in accordance with the most favorable plans, practices,
programs and policies of the Company and its affiliated companies in
effect for Executive immediately prior to such Change in Control,
(iii) provide fringe benefits in accordance with the most favorable
plans, practices, programs and policies of the Company and its
affiliated companies in effect for Executive immediately prior to such
Change in Control, or (iv) provide Executive with paid vacation in
accordance with the most favorable plans, policies, programs and
practices of the Company and its affiliated companies as in effect for
Executive immediately prior to such Change in Control; or
(5) the failure of the Company to obtain the assumption
agreement from any successor as contemplated in Section 10(b).
In addition, a termination by Executive of his employment for any
reason during the 30-day period immediately following the first
anniversary of the date of commencement of the Termination Period
shall be deemed to be termination by Executive for Good Reason. For
purposes of this Agreement, any good faith determination of Good
Reason made by Executive shall be conclusive; provided, however, that
an isolated, insubstantial and inadvertent action taken in good faith
and which is remedied by the Company promptly after receipt of notice
thereof given by Executive shall not constitute Good Reason. Any
event or condition described in this Section 1(f)(1) through (5) which
occurs prior to a Change in Control, but was at the request of a Third
Party who effectuates a Change in Control, shall constitute Good
Reason following a Change in Control for purposes of this Agreement
notwithstanding that it occurred prior to the Change in Control.
(g) "Nonqualifying Termination" means a termination of
Executive's employment (1) by the Company for Cause, (2) by Executive
for any reason other than a Good Reason, (3) as a result of
Executive's death, (4) by the Company due to Executive's absence from
his duties with the Company on a full-time basis for at least one
<PAGE>
hundred eighty consecutive days as a result of Executive's incapacity
due to physical or mental illness or (5) as a result of Executive's
lawful mandatory retirement or (6) Executive's voluntary retirement
pursuant to any retirement incentive plan of the Company. The parties
hereto expressly understand and agree that a termination by Executive
of his employment in accordance with the first sentence of the second
paragraph of Section 1(f) shall be deemed to be a termination by the
Executive for Good Reason and thus shall not be a Nonqualifying
Termination.
(h) "Pension Plan" means the Company's defined benefit
pension plan currently known as the "Brenco Retirement Plan" or any
successor plan and any other employee benefit plans of the Company
that require any minimum period of employment as a condition to the
receipt of retirement benefits thereunder.
(i) "Termination Period" means the period of time beginning
with a Change in Control and ending on the earliest to occur of (1)
Executive's 62nd birthday, (2) Executive's death, and (3) two years
following such Change in Control.
2. Obligations of Executive. Executive agrees that in the
event any person or group attempts a Change in Control, he shall not
voluntarily leave the employ of the Company without Good Reason (a)
until such attempted Change in Control terminates or (b) if a Change
in Control shall occur, until ninety days following such Change in
Control. For purposes of the foregoing subsection (a), Good Reason
shall be determined as if a Change in Control had occurred when such
attempted Change in Control became known to the Board.
3. Payments Upon Termination of Employment.
(a) If during the Termination Period the employment of
Executive shall terminate, other than by reason of a Nonqualifying
Termination, then the Company shall pay to Executive (or Executive's
beneficiary or estate) within thirty days following the Date of
Termination, as compensation for services rendered to the Company:
(1) a lump-sum cash amount equal to the sum of (i)
Executive's full annual base salary from the Company and its
affiliated companies through the Date of Termination, to the extent
not theretofore paid, (ii) Executive's annual bonus in an amount at
least equal to the greatest of (A) the average bonus (annualized for
any fiscal year consisting of less than twelve full months or with
respect to which Executive has been employed by the Company for less
than twelve full months) paid or payable, including by reason of any
deferral, to Executive by the Company and its affiliated companies in
respect of the three fiscal years of the Company (or such portion
thereof during which Executive performed services for the Company if
Executive shall have been employed by the Company for less than such
three fiscal year period) immediately preceding the fiscal year in
which the Change in Control occurs, or (B) 50% of Executive's target
bonus for the fiscal year in which the Change in Control occurs, or
(C) 50% of Executive's target bonus for the fiscal year in which
Executive's Date of Termination occurs, multiplied by (D) a fraction,
<PAGE>
the numerator of which is the number of days in the fiscal year in
which the Date of Termination occurs through the Date of Termination
and the denominator of which is three hundred sixty-five or three
hundred sixty-six, as applicable, and (iii) any compensation
previously deferred by Executive other than pursuant to a tax-
qualified plan (together with any interest and earnings thereon) and
any accrued vacation pay, in each case to the extent not theretofore
paid; plus
(2) a lump-sum cash amount equal to (i) one times
Executive's highest annual rate of base salary from the Company and
its affiliated companies in effect during the twelve-month period
prior to the Date of Termination; provided, however, that in the event
there are fewer than twelve whole months remaining from the Date of
Termination to the date of Executive's 62nd birthday, the amount
payable under this Section 3(a) (2) shall be calculated by multiplying
the amount otherwise payable by a fraction the numerator of which is
the number of months, including a partial month (with a partial month
being expressed as a fraction the numerator of which is the number of
days remaining in such month and the denominator of which is the
number of days in such month), so remaining and the denominator of
which is twelve; provided further, that any amount paid pursuant to
this Section 3(a) (2) shall be paid in lieu of any other amount of
severance relating to salary or bonus compensation to be received by
Executive upon termination of employment of Executive under any
severance plan, policy, employment agreement or arrangement of the
Company; and provided further that in the event of a termination of
employment during the 30-day period immediately following the first
anniversary of the date of commencement of the Termination Period in
accordance with the last paragraph of Section 1(f) hereof, the amount
payable under this Section 3(a)(2) shall be reduced by one-half.
(b) (1) In addition to the payments to be made pursuant to
paragraph (a) of this Section 3, if on the Date of Termination other
than by reason of a Nonqualifying Termination, Executive shall not be
fully vested in his accrued benefit under the Pension Plan, the
Company shall pay to Executive within thirty days following the Date
of Termination a lump sum cash amount equal to the actuarial
equivalent of his unvested accrued benefit under the Brenco Retirement
Plan as of such date. Such lump sum cash amount shall be computed
using the same actuarial methods and assumptions then in use for
purposes of computing benefits under the Brenco Retirement Plan,
provided that the interest rate used in making such computation shall
not be greater than the interest rate permitted under Section 417(e)
of the Internal Revenue Code of 1986, as amended (the "Code").
(2) In addition to the payments to be made pursuant to paragraph
(a) of this Section 3, if on the Date of Termination other than by
reason of a Nonqualifying Termination, Executive shall not be fully
vested in the employer contributions made on his behalf under any
defined contribution plan of the Company, the Company shall pay to
Executive within thirty days following the Date of Termination a lump
sum cash amount equal to the value of the unvested portion of such
employer contributions; provided, however, that if any payment
pursuant to this Section 3(b) (2) may or would result in such payment
being deemed a transaction which is subject to Section 16(b) of the
<PAGE>
Exchange Act, the Company shall make such payment so as to meet the
conditions for an exemption from such Section 16(b) as set forth in
the rules (and interpretative and no-action letters relating thereto)
under Section 16 of the Exchange Act. The value of any such unvested
employer contributions shall be determined as of the Date of
Termination; provided that for purposes of valuing common stock of the
Company that may be a part of any such plan, if the common stock of
the Company is traded on a national securities exchange or The Nasdaq
National Market on the Date of Termination, the value of a share of
common stock of the Company shall be the closing price on the national
securities exchange or NASDAQ on the Date of Termination or, if such
date is not a trading day, on the immediately preceding trading day.
(3) For a period of one year commencing on the Date of
Termination, the Company shall continue to keep in full force and
effect (or otherwise provide) all policies of medical, accident,
disability and life insurance with respect to Executive and his
dependents with the same level of coverage, upon the same terms and
otherwise to the same extent as such policies shall have been in
effect immediately prior to the Date of Termination (or, if more
favorable to Executive, immediately prior to the Change in Control),
and the Company and Executive shall share the costs of the
continuation of such insurance coverage in the same proportion as such
costs were shared immediately prior to the Date of Termination.
(c) If during the Termination Period the employment of
Executive shall terminate by reason of a Nonqualifying Termination,
then the Company shall pay to Executive within thirty days following
the Date of Termination, a cash amount equal to the sum of (1)
Executive's full annual base salary from the Company through the Date
of Termination, to the extent not theretofore paid and (2) any
compensation previously deferred by Executive other than pursuant to a
tax-qualified plan (together with any interest and earnings thereon)
and any accrued vacation pay, in each case to the extent not
theretofore paid.
4. Excise Tax Limitation. (a) Notwithstanding anything
contained in this Agreement or any other agreement or plan to the
contrary, the payments and benefits provided to, or for the benefit
of, Executive under this Agreement or under any other plan or
agreement which became payable or are taken into account as a result
of the Change in Control (the "Payments") shall be reduced (but not
below zero) to the extent necessary so that no payment to be made, or
benefit to be provided, to Executive or for his benefit under this
Agreement or any other plan or agreement shall be subject to the
imposition of an excise tax under Section 4999 of the Code (such
reduced amount is hereinafter referred to as the "Limited Payment
Amount"). Unless Executive shall have given prior written notice
specifying a different order to the Company, the Company shall reduce
or eliminate the Payments to Executive by first reducing or
eliminating those payments or benefits which are not payable in cash
and then by reducing or eliminating cash payments, in each case in
reverse order beginning with payments or benefits which are to be paid
the farthest in time from the Determination (as hereinafter defined).
Any notice given by Executive pursuant to the preceding sentence shall
take precedence over the provisions of any other plan, arrangement or
agreement governing Executive's rights and entitlements to any
benefits or compensation.
<PAGE>
(b) All determinations required to be made under this
Section 4 shall be made by the Company's public accounting firm (the
"Accounting Firm"). The Accounting Firm shall provide its
calculations, together with detailed supporting documentation, both to
the Company and Executive within fifteen days after the receipt of
notice from the Company that there has been a Payment (or at such
earlier times as is requested by the Company) and, with respect to any
Limited Payment Amount, a reasonable opinion to Executive that he is
not required to report any excise tax on his federal income tax return
with respect to the Limited Payment Amount (collectively, the
"Determination"). In the event that the Accounting Firm is serving as
an accountant or auditor for the individual, entity or group effecting
the Change in Control, Executive shall appoint another nationally
recognized public accounting firm to make the determination required
hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees, costs and expenses (including,
but not limited to, the costs of retaining experts) of the Accounting
Firm shall be borne by the Company. The Determination by the
Accounting Firm shall be binding upon the Company and Executive
(except as provided in paragraph (c) below).
(c) If it is established pursuant to a final determination
of a court or an Internal Revenue Service (the "IRS") proceeding which
has been finally and conclusively resolved, that Payments have been
made to, or provided for the benefit of, Executive by the Company,
which are in excess of the limitations provided in Section 4
(hereinafter referred to as an "Excess Payment"), such Excess Payment
shall be deemed for all purposes to be a loan to Executive made on the
date Executive received the Excess Payment and Executive shall repay
the Excess Payment to the Company on demand, together with interest on
the Excess Payment at the applicable federal rate (as defined in
Section 1274(d) of the Code) from the date of Executive's receipt
of such Excess Payment until the date of such repayment. As a result
of the uncertainty in the application of Section 4999 of the Code at
the time of the Determination, it is possible that Payments which will
not have been made by the Company should have been made (an
"Underpayment"), consistent with the calculations required to be made
under this Section 4. In the event that it is determined (i) by the
Accounting Firm, the Company (which shall include the position taken
by the Company, or together with its consolidated group, on its
federal income tax return) or the IRS or (ii) pursuant to a
determination by a court, that an Underpayment has occurred, the
Company shall pay an amount equal to such Underpayment to Executive
within ten days of such determination together with interest on such
amount at the applicable federal rate from the date such amount would
have been paid to Executive until the date of payment.
5. Withholding Taxes. The Company may withhold from all
payments due to Executive (or his beneficiary or estate) hereunder all
taxes which, by applicable federal, state, local or other law, the
Company is required to withhold therefrom.
6. Reimbursement of Expenses. If any contest or dispute shall
arise under this Agreement involving termination of Executive's
employment with the Company or involving the failure or refusal of the
Company to perform fully in accordance with the terms hereof, the
<PAGE>
Company shall reimburse Executive, on a current basis, for all legal
fees and expenses, if any, incurred by Executive in connection with
such contest or dispute, subject to the conditions set forth in the
following sentences, together with interest in an amount equal to the
prime rate of Crestar Bank from time to time in effect, but in no
event higher than the maximum legal rate permissible under applicable
law, such interest to accrue from the date the Company receives
Executive's statement for such fees and expenses through the date of
payment thereof. The Company shall have no obligation to reimburse
Executive for legal fees and expenses pursuant to this Section 6 in
the event that a court of competent jurisdiction ultimately determines
that Executive's position asserted in any contest or dispute litigated
by Executive was without merit. Executive hereby agrees that, in the
event of such a determination, Executive will repay the Company the
amount of any legal fees or expenses advanced by the Company to
Executive prior to such determination.
7. Termination of Agreement. (a) This Agreement shall be
effective on the date hereof and shall continue until terminated by
the Company as provided in paragraph (b) of this Section 7; provided,
however, that this Agreement shall terminate in any event upon the
first to occur of (i) Executive's 62nd birthday, (ii) Executive's
death or (iii) termination of Executive's Employment with the Company
prior to a Change in Control (except as otherwise provided hereunder).
(b) The Company shall have the right prior to a Change in
Control, in its sole discretion, pursuant to action by the Board, to
approve the termination of this Agreement, which termination shall not
become effective until the date fixed by the Board for such
termination, which date shall be at least one hundred twenty days
after notice thereunder is given by the Company to Executive in
accordance with Section 11; provided, however, that no such action
shall be taken by the Board during any period of time when the Board
has knowledge that any person has taken steps reasonably calculated to
effect a Change in Control until, in the opinion of the Board, such
person has abandoned or terminated its efforts to effect a Change in
Control; and provided, further, that in no event shall this Agreement
be terminated without the consent of Executive following a Change in
Control.
8. Scope of Agreement. Nothing in this Agreement shall be
deemed to entitle Executive to continued employment with the Company
or its subsidiaries, and if Executive's employment with the Company
shall terminate prior to a Change in Control, Executive shall have no
further rights under this Agreement; provided, however, that any
termination of Executive's employment during the two-year period
following a Change in Control shall be subject to all of the
provisions of this Agreement.
9. Confidential Information. 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 Executive during Executive's
employment by the Company or any of its affiliated companies and which
<PAGE>
shall not be or become public knowledge (other than by acts by
Executive or representatives of Executive in violation of this
Agreement). After termination of Executive's employment with the
Company, Executive shall not, without the prior written consent of the
Company, communicate or divulge any such information, knowledge or
data to anyone other than the Company and those designated by it. In
no event shall an asserted violation of the provisions of this Section
9 constitute a basis for deferring or withholding any amounts
otherwise payable to Executive under this Agreement.
10. Successors; Binding Agreement.
(a) This Agreement shall not be terminated by any merger or
consolidation of the Company whereby the Company is or is not the
surviving or resulting corporation or as a result of any transfer of
all or substantially all of the assets of the Company. In the event
of any such merger, consolidation or transfer of assets, the
provisions of this Agreement shall be binding upon the surviving or
resulting corporation or the person or entity to which such assets are
transferred.
(b) The Company agrees that concurrently with any merger,
consolidation or transfer of assets referred to in paragraph (a) of
this Section 10, it will cause any successor or transferee
unconditionally to assume, by written instrument delivered to
Executive (or his beneficiary or estate), all of the obligations of
the Company hereunder. Failure of the Company to obtain such
assumption prior to the effectiveness of any such merger,
consolidation or transfer of assets shall be a breach of this
Agreement and shall constitute Good Reason hereunder and shall entitle
Executive to compensation and other benefits from the Company in the
same amount and on the same terms as Executive would be entitled
hereunder if Executive's employment were terminated following a Change
in Control other than by reason of a Nonqualifying Termination. For
purposes of implementing the foregoing, the date on which any such
merger, consolidation or transfer becomes effective shall be deemed
the date Good Reason occurs, and shall be the Date of Termination if
requested by Executive.
(c) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees
and legatees. If Executive shall die while any amounts would be
payable to Executive hereunder had Executive continued to live, all
such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to such person or persons
appointed in writing by Executive to receive such amounts or, if no
person is so appointed, to Executive's estate.
11. Notice. (a) For purposes of this Agreement, all notices and
other communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given when delivered or
five days after deposit in the United States mail, certified and
return receipt requested, postage prepaid, addressed as follows:
<PAGE>
If to Executive:
________________
________________
________________
________________
If to the Company:
Brenco, Incorporated
Suite 201
One Park West Circle
Midlothian, VA 23113
Attn: Corporate Secretary
or to such other address as either party may have furnished to the
other in writing in accordance therewith, except that notices of
change of address shall be effective only upon receipt.
(b) A written notice of Executive's Date of Termination by
the Company or Executive, as the case may be, to the other, shall (i)
indicate the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination
of Executive's employment under the provision so indicated and (iii)
specify the Termination Date (which date shall be not less than
fifteen days after the giving of such notice). The failure by
Executive or the Company to set forth in such notice any fact or
circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of Executive or the Company hereunder or
preclude Executive or the Company from asserting such fact or
circumstance in enforcing Executive's or the Company's rights
hereunder.
12. Full Settlement; Resolution of Disputes. (a) The Company's
obligation to make any payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected
by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against Executive or
others. In no event shall Executive be obligated to seek other
employment or take other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement
and, such amounts shall not be reduced whether or not Executive
obtains other employment.
(b) If there shall be any dispute between the Company and
Executive in the event of any termination of Executive's employment,
then, unless and until there is a final, nonappealable judgment by a
court of competent jurisdiction declaring that such termination was
for Cause, that the determination by Executive of the existence of
Good Reason was not made in good faith, or that the Company is not
otherwise obligated to pay any amount or provide any benefit to
Executive and his dependents or other beneficiaries, as the case may
be, under paragraphs (a) and (b) of Section 3, the Company shall pay
all amounts, and provide all benefits, to Executive and his dependents
<PAGE>
or other beneficiaries, as the case may be, that the Company would be
required to pay or provide pursuant to paragraphs (a) and (b) of
Section 3 as though such termination were by the Company without Cause
or by Executive with Good Reason; 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
Executive to repay all such amounts to which Executive is ultimately
adjudged by such court not to be entitled.
13. Employment with Subsidiaries. Employment with the Company
for purposes of this Agreement shall include employment with any
corporation or other entity in which the Company has a direct or
indirect ownership interest of 50% or more of the total combined
voting power of the then outstanding securities of such corporation or
other entity entitled to vote generally in the election of directors.
14. Governing Law; Validity. The interpretation, construction
and performance of this Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the Commonwealth
of Virginia without regard to the principle of conflicts of laws. The
invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision
of this Agreement, which other provisions shall remain in full force
and effect.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all
of which together shall constitute one and the same instrument.
16. Miscellaneous. No provision of this Agreement may be
modified or waived unless such modification or waiver is agreed to in
writing and signed by Executive and by a duly authorized officer of
the Company. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. Failure by
Executive or the Company to insist upon strict compliance with any
provision of this Agreement or to assert any right Executive or the
Company may have hereunder, including without limitation, the right of
Executive to terminate employment for Good Reason, shall not be deemed
to be a waiver of such provision or right or any other provision or
right of this Agreement. The rights of, and benefits payable to,
Executive, his estate or his beneficiaries pursuant to this Agreement
are in addition to any rights of, or benefits payable to, Executives,
his estate or his beneficiaries under any other employee benefit plan
or compensation program of the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by a duly authorized officer of the Company and Executive has
executed this Agreement as of the day and year first above written.
<PAGE>
BRENCO, INCORPORATED
By:
Title:
EXECUTIVE
Needham B. Whitfield
________________________________
<PAGE>
EXHIBIT 10.2
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT is entered into as of the 22nd day of March, 1996
by and between Brenco, Incorporated, a Virginia corporation (the
"Company"), and J. Craig Rice ("Executive").
RECITALS
I. Executive currently serves as a key employee member of
management of the Company and his services and knowledge are valuable
to the Company.
II. The Board (as defined in Section 1) has determined that it
is in the best interests of the Company and its stockholders to secure
Executive's continued services and to ensure Executive's continued
dedication and objectivity in the event of any threat or occurrence
of, or negotiation or other action that could lead to, or create the
possibility of, a Change in Control (as defined in Section 1) of the
Company, without concern as to whether Executive might be hindered or
distracted by personal uncertainties and risks created by any such
possible Change in Control, and to encourage Executive's full
attention and dedication to the Company, the Board has authorized the
Company to enter into this Agreement.
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements herein contained, the Company and
Executive hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms
shall have the respective meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Cause" means (1) a material breach by Executive of the
duties and responsibilities of Executive (other than as a result of
incapacity due to physical or mental illness) which is demonstrably
willful and deliberate on Executive's part, which is committed in bad
faith or without reasonable belief that such breach is in the best
interests of the Company and which is not remedied in a reasonable
period of time after receipt of written notice from the Company
specifying such breach or (2) the commission by Executive of a felony
involving moral turpitude. Cause shall not exist unless and until the
Company has delivered to Executive a copy of a resolution duly adopted
by three-quarters of the Board at a meeting of the Board called and
held for such purpose (after reasonable notice to Executive and an
opportunity for Executive, together with his counsel, to be heard
before the Board), finding that in the good faith opinion of the Board
the Executive was guilty of the conduct set forth in this Section 1(b)
and specifying the particulars thereof in detail.
<PAGE>
(c) "Change in Control" means:
(1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), of beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act, of twenty
percent (20%) or more of either (i) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common Stock")
or (ii) the combined voting power of the then outstanding securities
of the Company entitled to vote generally in the election of directors
(the "Outstanding Company Voting Securities"); provided, however, that
the following acquisitions shall not constitute a Change in Control:
(A) any acquisition by the Company, (B) any acquisition directly from
the Company, (C) any acquisition by, or benefit distribution from, an
employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company, (D) any
acquisition pursuant to any compensatory stock option or stock
purchase plan for employees, (E) any acquisition by any corporation
pursuant to a reorganization, merger or consolidation involving the
Company, if, immediately after such reorganization, merger or
consolidation, each of the conditions described in clauses (i), (ii)
and (iii) of subsection (3) of this Section (1)(c) shall be satisfied,
or (F) any acquisition by the Executive or any group of persons
including the Executive; or (G) the acquisition by members of the
Whitfield Family (as hereinafter defined), individually or
collectively, of any direct or indirect beneficial ownership in
addition to the individual or collective beneficial ownership of
members of the Whitfield Family which exists on the date hereof; and
provided further that, for purposes of clause (A), if any Person
(other than the Company or any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company) shall become the beneficial owner of fifty
percent (50%) or more of the Outstanding Company Common Stock or fifty
percent (50%) or more of the Outstanding Company Voting Securities by
reason of an acquisition by the Company and such Person shall, after
such acquisition by the Company, become the beneficial owner of any
additional shares of the Outstanding Company Common Stock or any
additional Outstanding Voting Securities, such additional beneficial
ownership shall constitute a Change in Control;
(2) individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of such Board; provided, however, that any individual
who becomes a director of the Company subsequent to the date hereof
whose election, or nomination for election by the Company's
stockholders, was approved by the vote of at least a majority of the
directors then comprising the Incumbent Board shall be deemed to have
been a member of the Incumbent Board; and provided further, that no
individual who was initially elected as a director of the Company as a
result of an actual or threatened election contest, as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act, or any other actual or threatened solicitation of proxies or
consents by or on behalf of any Person other than the Board shall be
deemed to have been a member of the Incumbent Board;
<PAGE>
(3) approval by the stockholders of the Company of a
reorganization, merger or consolidation unless, in any such case,
immediately after such reorganization, merger or consolidation, (i)
more than fifty percent (50%) of the then outstanding shares of common
stock of the corporation resulting from such reorganization, merger or
consolidation and more than fifty percent (50%) of the combined voting
power of the then outstanding securities of such corporation entitled
to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals or entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities immediately prior to such reorganization, merger or
consolidation and in substantially the same proportions relative to
each other as their ownership, immediately prior to such
reorganization, merger or consolidation, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the
case may be, (ii) no Person (other than the Company, any employee
benefit plan (or related trust) sponsored or maintained by the Company
or the corporation resulting from such reorganization, merger or
consolidation (or any corporation controlled by the Company), or any
Person which beneficially owned, immediately prior to such
reorganization, merger or consolidation, directly or indirectly,
twenty percent (20%) or more of the Outstanding Company Common Stock
or the Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty percent (20%) or
more of the then outstanding shares of common stock of such
corporation or twenty percent (20%) or more of the combined voting
power of the then outstanding securities of such corporation entitled
to vote generally in the election of directors and (iii) 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 action of the Board providing for such
reorganization, merger or consolidation; or
(4) approval by the stockholders of the Company of (i) a
plan of complete liquidation or dissolution of the Company or (ii) 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,
immediately after such sale or other disposition, (A) more than fifty
percent (50%) of the then outstanding shares of common stock thereof
and more than fifty percent (50%) of the combined voting power of the
then outstanding securities thereof entitled to vote generally in the
election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities immediately prior to such sale or other disposition and in
substantially the same proportions relative to each other as their
ownership, immediately prior to such sale or other disposition, of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (B) no Person (other than the Company,
any employee benefit plan (or related trust) sponsored or maintained
by the Company or such corporation (or any corporation controlled by
the Company), or any Person which beneficially owned, immediately
prior to such sale or other disposition,
<PAGE>
directly or indirectly, twenty percent (20%) or more of the
Outstanding Company Common Stock or the Outstanding Company Voting
Securities, as the case may be) beneficially owns, directly or
indirectly, twenty percent (20%) or more of the then outstanding
shares of common stock thereof or twenty percent (20%) or more of the
combined voting power of the then outstanding securities thereof
entitled to vote generally in the election of directors and (C) at
least a majority of the members of the board of directors thereof were
members of the Incumbent Board at the time of the execution of the
initial agreement or action of the Board providing for such sale or
other disposition.
For purposes of Section 1(c)(1), "Whitfield Family" shall mean (I)
Needham B. Whitfield and members of his "immediate family" (as that
term is defined in Rule 16a-1(e) under the Exchange Act), (ii) Anne
Whitfield Kenny and members of her immediate family, (iii) the Estate
of Mildred F. Whitfield and (iv) and in each of the foregoing
instances, their respective personal or legal representatives,
executors, administrators, successors, heirs, distributees and
legatees.
Notwithstanding anything contained in the Agreement to the
contrary, it is understood that the collective beneficial ownership of
members of the Whitfield Family as of the date hereof shall not
constitute, or be construed or deemed to constitute, a Change of
Control.
Furthermore, notwithstanding anything contained in this Agreement
to the contrary, if Executive's employment is terminated prior to a
Change in Control and Executive reasonably demonstrates that such
termination was at the request of a third party who has indicated an
intention or taken steps reasonably calculated to effect a Change in
Control (a "Third Party") who effectuates a Change in Control, then
for all purposes of this Agreement, the date of a Change in Control
shall mean the date immediately prior to the date of such termination
of Executive's employment.
(d) "Company" means Brenco, Incorporated, a Virginia
corporation.
(e) "Date of Termination" means (1) the effective date on
which Executive's employment by the Company terminates as specified in
a prior written notice by the Company or Executive, as the case may
be, to the other, delivered pursuant to Section 11 or (2) if
Executive's employment by the Company terminates by reason of death,
the date of death of Executive.
(f) "Good Reason" means, without Executive's express
written consent, the occurrence of any of the following events after a
Change in Control:
(1) (i) the assignment to Executive of any duties
inconsistent in any material adverse respect with Executive's
position(s), duties, responsibilities or status with the Company
immediately prior to such Change in Control, (ii) a material adverse
change in Executive's reporting responsibilities, titles or offices
<PAGE>
with the Company as in effect immediately prior to such Change in
Control or (iii) any removal or involuntary termination of Executive
from the Company otherwise than as expressly permitted by this
Agreement or any failure to re-elect Executive to any position with
the Company held by Executive immediately prior to such Change in
Control;
(2) a reduction by the Company in Executive's rate of
annual base salary as in effect immediately prior to such Change in
Control or as the same has been increased thereafter;
(3) any requirement of the Company that Executive (i) be
based anywhere more than thirty-five miles from the facility where
Executive is located at the time of the Change in Control;
(4) the failure of the Company to (i) continue in effect
any employee benefit plan or compensation plan in which Executive is
participating immediately prior to such Change in Control, unless
Executive is permitted to participate in other plans providing
Executive with substantially comparable benefits, or the taking of any
action by the Company which would adversely affect Executive's
participation in or materially reduce Executive's benefits under any
such plan, (ii) provide Executive and Executive's dependents with
welfare benefits (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life,
group life, accidental death and travel accident insurance plans and
programs) in accordance with the most favorable plans, practices,
programs and policies of the Company and its affiliated companies in
effect for Executive immediately prior to such Change in Control,
(iii) provide fringe benefits in accordance with the most favorable
plans, practices, programs and policies of the Company and its
affiliated companies in effect for Executive immediately prior to such
Change in Control, or (iv) provide Executive with paid vacation in
accordance with the most favorable plans, policies, programs and
practices of the Company and its affiliated companies as in effect for
Executive immediately prior to such Change in Control; or
(5) the failure of the Company to obtain the assumption
agreement from any successor as contemplated in Section 10(b).
In addition, a termination by Executive of his employment for any
reason during the 30-day period immediately following the first
anniversary of the date of commencement of the Termination Period
shall be deemed to be termination by Executive for Good Reason. For
purposes of this Agreement, any good faith determination of Good
Reason made by Executive shall be conclusive; provided, however, that
an isolated, insubstantial and inadvertent action taken in good faith
and which is remedied by the Company promptly after receipt of notice
thereof given by Executive shall not constitute Good Reason. Any
event or condition described in this Section 1(f)(1) through (5) which
occurs prior to a Change in Control, but was at the request of a Third
Party who effectuates a Change in Control, shall constitute Good
Reason following a Change in Control for purposes of this Agreement
notwithstanding that it occurred prior to the Change in Control.
<PAGE>
(g) "Nonqualifying Termination" means a termination of
Executive's employment (1) by the Company for Cause, (2) by Executive
for any reason other than a Good Reason, (3) as a result of
Executive's death, (4) by the Company due to Executive's absence from
his duties with the Company on a full-time basis for at least one
hundred eighty consecutive days as a result of Executive's incapacity
due to physical or mental illness or (5) as a result of Executive's
lawful mandatory retirement or (6) Executive's voluntary retirement
pursuant to any retirement incentive plan of the Company. The parties
hereto expressly understand and agree that a termination by Executive
of his employment in accordance with the first sentence of the second
paragraph of Section 1(f) shall be deemed to be a termination by the
Executive for Good Reason and thus shall not be a Nonqualifying
Termination.
(h) "Pension Plan" means the Company's defined benefit
pension plan currently known as the "Brenco Retirement Plan" or any
successor plan and any other employee benefit plans of the Company
that require any minimum period of employment as a condition to the
receipt of retirement benefits thereunder.
(i) "Termination Period" means the period of time beginning
with a Change in Control and ending on the earliest to occur of (1)
Executive's 62nd birthday, (2) Executive's death, and (3) two years
following such Change in Control.
2. Obligations of Executive. Executive agrees that in the
event any person or group attempts a Change in Control, he shall not
voluntarily leave the employ of the Company without Good Reason (a)
until such attempted Change in Control terminates or (b) if a Change
in Control shall occur, until ninety days following such Change in
Control. For purposes of the foregoing subsection (a), Good Reason
shall be determined as if a Change in Control had occurred when such
attempted Change in Control became known to the Board.
3. Payments Upon Termination of Employment.
(a) If during the Termination Period the employment of
Executive shall terminate, other than by reason of a Nonqualifying
Termination, then the Company shall pay to Executive (or Executive's
beneficiary or estate) within thirty days following the Date of
Termination, as compensation for services rendered to the Company:
(1) a lump-sum cash amount equal to the sum of (i)
Executive's full annual base salary from the Company and its
affiliated companies through the Date of Termination, to the extent
not theretofore paid, (ii) Executive's annual bonus in an amount at
least equal to the greatest of (A) the average bonus (annualized for
any fiscal year consisting of less than twelve full months or with
respect to which Executive has been employed by the Company for less
than twelve full months) paid or payable, including by reason of any
deferral, to Executive by the Company and its affiliated companies in
respect of the three fiscal years of the Company (or such portion
thereof during which Executive performed services for the Company if
Executive shall have been employed by the Company for less than such
<PAGE>
three fiscal year period) immediately preceding the fiscal year in
which the Change in Control occurs, or (B) 50% of Executive's target
bonus for the fiscal year in which the Change in Control occurs, or
(C) 50% of Executive's target bonus for the fiscal year in which
Executive's Date of Termination occurs, multiplied by (D) a fraction,
the numerator of which is the number of days in the fiscal year in
which the Date of Termination occurs through the Date of Termination
and the denominator of which is three hundred sixty-five or three
hundred sixty-six, as applicable, and (iii) any compensation
previously deferred by Executive other than pursuant to a tax-
qualified plan (together with any interest and earnings thereon) and
any accrued vacation pay, in each case to the extent not theretofore
paid; plus
(2) a lump-sum cash amount equal to (i) three times
Executive's highest annual rate of base salary from the Company and
its affiliated companies in effect during the twelve-month period
prior to the Date of Termination; provided, however, that in the event
there are fewer than thirty-six whole months remaining from the Date
of Termination to the date of Executive's 62nd birthday, the amount
payable under this Section 3(a) (2) shall be calculated by multiplying
the amount otherwise payable by a fraction the numerator of which is
the number of months, including a partial month (with a partial month
being expressed as a fraction the numerator of which is the number of
days remaining in such month and the denominator of which is the
number of days in such month), so remaining and the denominator of
which is thirty-six; provided further, that any amount paid pursuant
to this Section 3(a) (2) shall be paid in lieu of any other amount of
severance relating to salary or bonus compensation to be received by
Executive upon termination of employment of Executive under any
severance plan, policy, employment agreement or arrangement of the
Company; and provided further that in the event of a termination of
employment during the 30-day period immediately following the first
anniversary of the date of commencement of the Termination Period in
accordance with the last paragraph of Section 1(f) hereof, the amount
payable under this Section 3(a)(2) shall be reduced by one-half.
(b) (1) In addition to the payments to be made pursuant to
paragraph (a) of this Section 3, if on the Date of Termination other
than by reason of a Nonqualifying Termination, Executive shall not be
fully vested in his accrued benefit under the Pension Plan, the
Company shall pay to Executive within thirty days following the Date
of Termination a lump sum cash amount equal to the actuarial
equivalent of his unvested accrued benefit under the Brenco Retirement
Plan as of such date. Such lump sum cash amount shall be computed
using the same actuarial methods and assumptions then in use for
purposes of computing benefits under the Brenco Retirement Plan,
provided that the interest rate used in making such computation shall
not be greater than the interest rate permitted under Section 417(e)
of the Internal Revenue Code of 1986, as amended (the "Code").
<PAGE>
(2) In addition to the payments to be made pursuant to paragraph
(a) of this Section 3, if on the Date of Termination other than by
reason of a Nonqualifying Termination, Executive shall not be fully
vested in the employer contributions made on his behalf under any
defined contribution plan of the Company, the Company shall pay to
Executive within thirty days following the Date of Termination a lump
sum cash amount equal to the value of the unvested portion of such
employer contributions; provided, however, that if any payment
pursuant to this Section 3(b) (2) may or would result in such payment
being deemed a transaction which is subject to Section 16(b) of the
Exchange Act, the Company shall make such payment so as to meet the
conditions for an exemption from such Section 16(b) as set forth in
the rules (and interpretative and no-action letters relating thereto)
under Section 16 of the Exchange Act. The value of any such unvested
employer contributions shall be determined as of the Date of
Termination; provided that for purposes of valuing common stock of the
Company that may be a part of any such plan, if the common stock of
the Company is traded on a national securities exchange or The Nasdaq
National Market on the Date of Termination, the value of a share of
common stock of the Company shall be the closing price on the national
securities exchange or NASDAQ on the Date of Termination or, if such
date is not a trading day, on the immediately preceding trading day.
(3) For a period of three years commencing on the Date of
Termination, the Company shall continue to keep in full force and
effect (or otherwise provide) all policies of medical, accident,
disability and life insurance with respect to Executive and his
dependents with the same level of coverage, upon the same terms and
otherwise to the same extent as such policies shall have been in
effect immediately prior to the Date of Termination (or, if more
favorable to Executive, immediately prior to the Change in Control),
and the Company and Executive shall share the costs of the
continuation of such insurance coverage in the same proportion as such
costs were shared immediately prior to the Date of Termination.
(c) If during the Termination Period the employment of
Executive shall terminate by reason of a Nonqualifying Termination,
then the Company shall pay to Executive within thirty days following
the Date of Termination, a cash amount equal to the sum of (1)
Executive's full annual base salary from the Company through the Date
of Termination, to the extent not theretofore paid and (2) any
compensation previously deferred by Executive other than pursuant to a
tax-qualified plan (together with any interest and earnings thereon)
and any accrued vacation pay, in each case to the extent not
theretofore paid.
4. Excise Tax Limitation. (a) Notwithstanding anything
contained in this Agreement or any other agreement or plan to the
contrary, the payments and benefits provided to, or for the benefit
of, Executive under this Agreement or under any other plan or
agreement which became payable or are taken into account as a result
of the Change in Control (the "Payments") shall be reduced (but not
below zero) to the extent necessary so that no payment to be made, or
benefit to be provided, to Executive or for his benefit under this
Agreement or any other plan or agreement shall be subject to the
imposition of an excise tax under Section 4999 of the Code (such
<PAGE>
reduced amount is hereinafter referred to as the "Limited Payment
Amount"). Unless Executive shall have given prior written notice
specifying a different order to the Company, the Company shall reduce
or eliminate the Payments to Executive by first reducing or
eliminating those payments or benefits which are not payable in cash
and then by reducing or eliminating cash payments, in each case in
reverse order beginning with payments or benefits which are to be paid
the farthest in time from the Determination (as hereinafter defined).
Any notice given by Executive pursuant to the preceding sentence shall
take precedence over the provisions of any other plan, arrangement or
agreement governing Executive's rights and entitlements to any
benefits or compensation.
(b) All determinations required to be made under this
Section 4 shall be made by the Company's public accounting firm (the
"Accounting Firm"). The Accounting Firm shall provide its
calculations, together with detailed supporting documentation, both to
the Company and Executive within fifteen days after the receipt of
notice from the Company that there has been a Payment (or at such
earlier times as is requested by the Company) and, with respect to any
Limited Payment Amount, a reasonable opinion to Executive that he is
not required to report any excise tax on his federal income tax return
with respect to the Limited Payment Amount (collectively, the
"Determination"). In the event that the Accounting Firm is serving as
an accountant or auditor for the individual, entity or group effecting
the Change in Control, Executive shall appoint another nationally
recognized public accounting firm to make the determination required
hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees, costs and expenses (including,
but not limited to, the costs of retaining experts) of the Accounting
Firm shall be borne by the Company. The Determination by the
Accounting Firm shall be binding upon the Company and Executive
(except as provided in paragraph (c) below).
(c) If it is established pursuant to a final determination
of a court or an Internal Revenue Service (the "IRS") proceeding which
has been finally and conclusively resolved, that Payments have been
made to, or provided for the benefit of, Executive by the Company,
which are in excess of the limitations provided in Section 4
(hereinafter referred to as an "Excess Payment"), such Excess Payment
shall be deemed for all purposes to be a loan to Executive made on the
date Executive received the Excess Payment and Executive shall repay
the Excess Payment to the Company on demand, together with interest on
the Excess Payment at the applicable federal rate (as defined in
Section 1274(d) of the Code) from the date of Executive's receipt
of such Excess Payment until the date of such repayment. As a result
of the uncertainty in the application of Section 4999 of the Code at
the time of the Determination, it is possible that Payments which will
not have been made by the Company should have been made (an
"Underpayment"), consistent with the calculations required to be made
under this Section 4. In the event that it is determined (i) by the
Accounting Firm, the Company (which shall include the position taken
by the Company, or together with its consolidated group, on its
federal income tax return) or the IRS or (ii) pursuant to a
determination by a court, that an Underpayment has occurred, the
Company shall pay an amount equal to such Underpayment to Executive
<PAGE>
within ten days of such determination together with interest on such
amount at the applicable federal rate from the date such amount would
have been paid to Executive until the date of payment.
5. Withholding Taxes. The Company may withhold from all
payments due to Executive (or his beneficiary or estate) hereunder all
taxes which, by applicable federal, state, local or other law, the
Company is required to withhold therefrom.
6. Reimbursement of Expenses. If any contest or dispute shall
arise under this Agreement involving termination of Executive's
employment with the Company or involving the failure or refusal of the
Company to perform fully in accordance with the terms hereof, the
Company shall reimburse Executive, on a current basis, for all legal
fees and expenses, if any, incurred by Executive in connection with
such contest or dispute, subject to the conditions set forth in the
following sentences, together with interest in an amount equal to the
prime rate of Crestar Bank from time to time in effect, but in no
event higher than the maximum legal rate permissible under applicable
law, such interest to accrue from the date the Company receives
Executive's statement for such fees and expenses through the date of
payment thereof. The Company shall have no obligation to reimburse
Executive for legal fees and expenses pursuant to this Section 6 in
the event that a court of competent jurisdiction ultimately determines
that Executive's position asserted in any contest or dispute litigated
by Executive was without merit. Executive hereby agrees that, in the
event of such a determination, Executive will repay the Company the
amount of any legal fees or expenses advanced by the Company to
Executive prior to such determination.
7. Termination of Agreement. (a) This Agreement shall be
effective on the date hereof and shall continue until terminated by
the Company as provided in paragraph (b) of this Section 7; provided,
however, that this Agreement shall terminate in any event upon the
first to occur of (i) Executive's 62nd birthday, (ii) Executive's
death or (iii) termination of Executive's Employment with the Company
prior to a Change in Control (except as otherwise provided hereunder).
(b) The Company shall have the right prior to a Change in
Control, in its sole discretion, pursuant to action by the Board, to
approve the termination of this Agreement, which termination shall not
become effective until the date fixed by the Board for such
termination, which date shall be at least one hundred twenty days
after notice thereunder is given by the Company to Executive in
accordance with Section 11; provided, however, that no such action
shall be taken by the Board during any period of time when the Board
has knowledge that any person has taken steps reasonably calculated to
effect a Change in Control until, in the opinion of the Board, such
person has abandoned or terminated its efforts to effect a Change in
Control; and provided, further, that in no event shall this Agreement
be terminated without the consent of Executive following a Change in
Control.
<PAGE>
8. Scope of Agreement. Nothing in this Agreement shall be
deemed to entitle Executive to continued employment with the Company
or its subsidiaries, and if Executive's employment with the Company
shall terminate prior to a Change in Control, Executive shall have no
further rights under this Agreement; provided, however, that any
termination of Executive's employment during the two-year period
following a Change in Control shall be subject to all of the
provisions of this Agreement.
9. Confidential Information. 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 Executive during Executive's
employment by the Company or any of its affiliated companies and which
shall not be or become public knowledge (other than by acts by
Executive or representatives of Executive in violation of this
Agreement). After termination of Executive's employment with the
Company, Executive shall not, without the prior written consent of the
Company, communicate or divulge any such information, knowledge or
data to anyone other than the Company and those designated by it. In
no event shall an asserted violation of the provisions of this Section
9 constitute a basis for deferring or withholding any amounts
otherwise payable to Executive under this Agreement.
10. Successors; Binding Agreement.
(a) This Agreement shall not be terminated by any merger or
consolidation of the Company whereby the Company is or is not the
surviving or resulting corporation or as a result of any transfer of
all or substantially all of the assets of the Company. In the event
of any such merger, consolidation or transfer of assets, the
provisions of this Agreement shall be binding upon the surviving or
resulting corporation or the person or entity to which such assets are
transferred.
(b) The Company agrees that concurrently with any merger,
consolidation or transfer of assets referred to in paragraph (a) of
this Section 10, it will cause any successor or transferee
unconditionally to assume, by written instrument delivered to
Executive (or his beneficiary or estate), all of the obligations of
the Company hereunder. Failure of the Company to obtain such
assumption prior to the effectiveness of any such merger,
consolidation or transfer of assets shall be a breach of this
Agreement and shall constitute Good Reason hereunder and shall entitle
Executive to compensation and other benefits from the Company in the
same amount and on the same terms as Executive would be entitled
hereunder if Executive's employment were terminated following a Change
in Control other than by reason of a Nonqualifying Termination. For
purposes of implementing the foregoing, the date on which any such
merger, consolidation or transfer becomes effective shall be deemed
the date Good Reason occurs, and shall be the Date of Termination if
requested by Executive.
<PAGE>
(c) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees
and legatees. If Executive shall die while any amounts would be
payable to Executive hereunder had Executive continued to live, all
such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to such person or persons
appointed in writing by Executive to receive such amounts or, if no
person is so appointed, to Executive's estate.
11. Notice. (a) For purposes of this Agreement, all notices and
other communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given when delivered or
five days after deposit in the United States mail, certified and
return receipt requested, postage prepaid, addressed as follows:
If to Executive:
________________
________________
________________
________________
If to the Company:
Brenco, Incorporated
Suite 201
One Park West Circle
Midlothian, VA 23113
Attn: Corporate Secretary
or to such other address as either party may have furnished to the
other in writing in accordance therewith, except that notices of
change of address shall be effective only upon receipt.
(b) A written notice of Executive's Date of Termination by
the Company or Executive, as the case may be, to the other, shall (i)
indicate the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination
of Executive's employment under the provision so indicated and (iii)
specify the Termination Date (which date shall be not less than
fifteen days after the giving of such notice). The failure by
Executive or the Company to set forth in such notice any fact or
circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of Executive or the Company hereunder or
preclude Executive or the Company from asserting such fact or
circumstance in enforcing Executive's or the Company's rights
hereunder.
<PAGE>
12. Full Settlement; Resolution of Disputes. (a) The Company's
obligation to make any payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected
by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against Executive or
others. In no event shall Executive be obligated to seek other
employment or take other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement
and, such amounts shall not be reduced whether or not Executive
obtains other employment.
(b) If there shall be any dispute between the Company and
Executive in the event of any termination of Executive's employment,
then, unless and until there is a final, nonappealable judgment by a
court of competent jurisdiction declaring that such termination was
for Cause, that the determination by Executive of the existence of
Good Reason was not made in good faith, or that the Company is not
otherwise obligated to pay any amount or provide any benefit to
Executive and his dependents or other beneficiaries, as the case may
be, under paragraphs (a) and (b) of Section 3, the Company shall pay
all amounts, and provide all benefits, to Executive and his dependents
or other beneficiaries, as the case may be, that the Company would be
required to pay or provide pursuant to paragraphs (a) and (b) of
Section 3 as though such termination were by the Company without Cause
or by Executive with Good Reason; 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
Executive to repay all such amounts to which Executive is ultimately
adjudged by such court not to be entitled.
13. Employment with Subsidiaries. Employment with the Company
for purposes of this Agreement shall include employment with any
corporation or other entity in which the Company has a direct or
indirect ownership interest of 50% or more of the total combined
voting power of the then outstanding securities of such corporation or
other entity entitled to vote generally in the election of directors.
14. Governing Law; Validity. The interpretation, construction
and performance of this Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the Commonwealth
of Virginia without regard to the principle of conflicts of laws. The
invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision
of this Agreement, which other provisions shall remain in full force
and effect.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all
of which together shall constitute one and the same instrument.
16. Miscellaneous. No provision of this Agreement may be
modified or waived unless such modification or waiver is agreed to in
writing and signed by Executive and by a duly authorized officer of
the Company. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party
<PAGE>
shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. Failure by
Executive or the Company to insist upon strict compliance with any
provision of this Agreement or to assert any right Executive or the
Company may have hereunder, including without limitation, the right of
Executive to terminate employment for Good Reason, shall not be deemed
to be a waiver of such provision or right or any other provision or
right of this Agreement. The rights of, and benefits payable to,
Executive, his estate or his beneficiaries pursuant to this Agreement
are in addition to any rights of, or benefits payable to, Executives,
his estate or his beneficiaries under any other employee benefit plan
or compensation program of the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by a duly authorized officer of the Company and Executive has
executed this Agreement as of the day and year first above written.
BRENCO, INCORPORATED
By:
Title:
EXECUTIVE
J. Craig Rice
<PAGE>
EXHIBIT 10.3
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT is entered into as of the 22nd day of March, 1996
by and between Brenco, Incorporated, a Virginia corporation (the
"Company"), and Jacob M. Feichtner ("Executive").
RECITALS
I. Executive currently serves as a key employee member of
management of the Company and his services and knowledge are valuable
to the Company.
II. The Board (as defined in Section 1) has determined that it
is in the best interests of the Company and its stockholders to secure
Executive's continued services and to ensure Executive's continued
dedication and objectivity in the event of any threat or occurrence
of, or negotiation or other action that could lead to, or create the
possibility of, a Change in Control (as defined in Section 1) of the
Company, without concern as to whether Executive might be hindered or
distracted by personal uncertainties and risks created by any such
possible Change in Control, and to encourage Executive's full
attention and dedication to the Company, the Board has authorized the
Company to enter into this Agreement.
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements herein contained, the Company and
Executive hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms
shall have the respective meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Cause" means (1) a material breach by Executive of the
duties and responsibilities of Executive (other than as a result of
incapacity due to physical or mental illness) which is demonstrably
willful and deliberate on Executive's part, which is committed in bad
faith or without reasonable belief that such breach is in the best
interests of the Company and which is not remedied in a reasonable
period of time after receipt of written notice from the Company
specifying such breach or (2) the commission by Executive of a felony
involving moral turpitude. Cause shall not exist unless and until the
Company has delivered to Executive a copy of a resolution duly adopted
by three-quarters of the Board at a meeting of the Board called and
held for such purpose (after reasonable notice to Executive and an
opportunity for Executive, together with his counsel, to be heard
before the Board), finding that in the good faith opinion of the Board
the Executive was guilty of the conduct set forth in this Section 1(b)
and specifying the particulars thereof in detail.
<PAGE>
(c) "Change in Control" means:
(1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), of beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act, of twenty
percent (20%) or more of either (i) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common Stock")
or (ii) the combined voting power of the then outstanding securities
of the Company entitled to vote generally in the election of directors
(the "Outstanding Company Voting Securities"); provided, however, that
the following acquisitions shall not constitute a Change in Control:
(A) any acquisition by the Company, (B) any acquisition directly from
the Company, (C) any acquisition by, or benefit distribution from, an
employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company, (D) any
acquisition pursuant to any compensatory stock option or stock
purchase plan for employees, (E) any acquisition by any corporation
pursuant to a reorganization, merger or consolidation involving the
Company, if, immediately after such reorganization, merger or
consolidation, each of the conditions described in clauses (i), (ii)
and (iii) of subsection (3) of this Section (1)(c) shall be satisfied,
or (F) any acquisition by the Executive or any group of persons
including the Executive; or (G) the acquisition by members of the
Whitfield Family (as hereinafter defined), individually or
collectively, of any direct or indirect beneficial ownership in
addition to the individual or collective beneficial ownership of
members of the Whitfield Family which exists on the date hereof; and
provided further that, for purposes of clause (A), if any Person
(other than the Company or any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company) shall become the beneficial owner of fifty
percent (50%) or more of the Outstanding Company Common Stock or fifty
percent (50%) or more of the Outstanding Company Voting Securities by
reason of an acquisition by the Company and such Person shall, after
such acquisition by the Company, become the beneficial owner of any
additional shares of the Outstanding Company Common Stock or any
additional Outstanding Voting Securities, such additional beneficial
ownership shall constitute a Change in Control;
(2) individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of such Board; provided, however, that any individual
who becomes a director of the Company subsequent to the date hereof
whose election, or nomination for election by the Company's
stockholders, was approved by the vote of at least a majority of the
directors then comprising the Incumbent Board shall be deemed to have
been a member of the Incumbent Board; and provided further, that no
individual who was initially elected as a director of the Company as a
result of an actual or threatened election contest, as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act, or any other actual or threatened solicitation of proxies or
consents by or on behalf of any Person other than the Board shall be
deemed to have been a member of the Incumbent Board;
<PAGE>
(3) approval by the stockholders of the Company of a
reorganization, merger or consolidation unless, in any such case,
immediately after such reorganization, merger or consolidation, (i)
more than fifty percent (50%) of the then outstanding shares of common
stock of the corporation resulting from such reorganization, merger or
consolidation and more than fifty percent (50%) of the combined voting
power of the then outstanding securities of such corporation entitled
to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals or entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities immediately prior to such reorganization, merger or
consolidation and in substantially the same proportions relative to
each other as their ownership, immediately prior to such
reorganization, merger or consolidation, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the
case may be, (ii) no Person (other than the Company, any employee
benefit plan (or related trust) sponsored or maintained by the Company
or the corporation resulting from such reorganization, merger or
consolidation (or any corporation controlled by the Company), or any
Person which beneficially owned, immediately prior to such
reorganization, merger or consolidation, directly or indirectly,
twenty percent (20%) or more of the Outstanding Company Common Stock
or the Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty percent (20%) or
more of the then outstanding shares of common stock of such
corporation or twenty percent (20%) or more of the combined voting
power of the then outstanding securities of such corporation entitled
to vote generally in the election of directors and (iii) 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 action of the Board providing for such
reorganization, merger or consolidation; or
(4) approval by the stockholders of the Company of (i) a
plan of complete liquidation or dissolution of the Company or (ii) 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,
immediately after such sale or other disposition, (A) more than fifty
percent (50%) of the then outstanding shares of common stock thereof
and more than fifty percent (50%) of the combined voting power of the
then outstanding securities thereof entitled to vote generally in the
election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities immediately prior to such sale or other disposition and in
substantially the same proportions relative to each other as their
ownership, immediately prior to such sale or other disposition, of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (B) no Person (other than the Company,
any employee benefit plan (or related trust) sponsored or maintained
by the Company or such corporation (or any corporation controlled by
the Company), or any Person which beneficially owned, immediately
prior to such sale or other disposition, directly or indirectly,
twenty percent (20%) or more of the Outstanding
<PAGE>
Company Common Stock or the Outstanding Company Voting Securities, as
the case may be) beneficially owns, directly or indirectly, twenty
percent (20%) or more of the then outstanding shares of common stock
thereof or twenty percent (20%) or more of the combined voting power
of the then outstanding securities thereof entitled to vote generally
in the election of directors and (C) at least a majority of the
members of the board of directors thereof were members of the
Incumbent Board at the time of the execution of the initial agreement
or action of the Board providing for such sale or other disposition.
For purposes of Section 1(c)(1), "Whitfield Family" shall mean (I)
Needham B. Whitfield and members of his "immediate family" (as that
term is defined in Rule 16a-1(e) under the Exchange Act), (ii) Anne
Whitfield Kenny and members of her immediate family, (iii) the Estate
of Mildred F. Whitfield and (iv) and in each of the foregoing
instances, their respective personal or legal representatives,
executors, administrators, successors, heirs, distributees and
legatees.
Notwithstanding anything contained in the Agreement to the
contrary, it is understood that the collective beneficial ownership of
members of the Whitfield Family as of the date hereof shall not
constitute, or be construed or deemed to constitute, a Change of
Control.
Furthermore, notwithstanding anything contained in this Agreement
to the contrary, if Executive's employment is terminated prior to a
Change in Control and Executive reasonably demonstrates that such
termination was at the request of a third party who has indicated an
intention or taken steps reasonably calculated to effect a Change in
Control (a "Third Party") who effectuates a Change in Control, then
for all purposes of this Agreement, the date of a Change in Control
shall mean the date immediately prior to the date of such termination
of Executive's employment.
(d) "Company" means Brenco, Incorporated, a Virginia
corporation.
(e) "Date of Termination" means (1) the effective date on
which Executive's employment by the Company terminates as specified in
a prior written notice by the Company or Executive, as the case may
be, to the other, delivered pursuant to Section 11 or (2) if
Executive's employment by the Company terminates by reason of death,
the date of death of Executive.
(f) "Good Reason" means, without Executive's express
written consent, the occurrence of any of the following events after a
Change in Control:
(1) (i) the assignment to Executive of any duties
inconsistent in any material adverse respect with Executive's
position(s), duties, responsibilities or status with the Company
immediately prior to such Change in Control, (ii) a material adverse
change in Executive's reporting responsibilities, titles or offices
with the Company as in effect immediately prior to such Change in
Control or (iii) any removal or involuntary termination of Executive
<PAGE>
from the Company otherwise than as expressly permitted by this
Agreement or any failure to re-elect Executive to any position with
the Company held by Executive immediately prior to such Change in
Control;
(2) a reduction by the Company in Executive's rate of
annual base salary as in effect immediately prior to such Change in
Control or as the same has been increased thereafter;
(3) any requirement of the Company that Executive (i) be
based anywhere more than thirty-five miles from the facility where
Executive is located at the time of the Change in Control;
(4) the failure of the Company to (i) continue in effect
any employee benefit plan or compensation plan in which Executive is
participating immediately prior to such Change in Control, unless
Executive is permitted to participate in other plans providing
Executive with substantially comparable benefits, or the taking of any
action by the Company which would adversely affect Executive's
participation in or materially reduce Executive's benefits under any
such plan, (ii) provide Executive and Executive's dependents with
welfare benefits (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life,
group life, accidental death and travel accident insurance plans and
programs) in accordance with the most favorable plans, practices,
programs and policies of the Company and its affiliated companies in
effect for Executive immediately prior to such Change in Control,
(iii) provide fringe benefits in accordance with the most favorable
plans, practices, programs and policies of the Company and its
affiliated companies in effect for Executive immediately prior to such
Change in Control, or (iv) provide Executive with paid vacation in
accordance with the most favorable plans, policies, programs and
practices of the Company and its affiliated companies as in effect for
Executive immediately prior to such Change in Control; or
(5) the failure of the Company to obtain the assumption
agreement from any successor as contemplated in Section 10(b).
In addition, a termination by Executive of his employment for any
reason during the 30-day period immediately following the first
anniversary of the date of commencement of the Termination Period
shall be deemed to be termination by Executive for Good Reason. For
purposes of this Agreement, any good faith determination of Good
Reason made by Executive shall be conclusive; provided, however, that
an isolated, insubstantial and inadvertent action taken in good faith
and which is remedied by the Company promptly after receipt of notice
thereof given by Executive shall not constitute Good Reason. Any
event or condition described in this Section 1(f)(1) through (5) which
occurs prior to a Change in Control, but was at the request of a Third
Party who effectuates a Change in Control, shall constitute Good
Reason following a Change in Control for purposes of this Agreement
notwithstanding that it occurred prior to the Change in Control.
(g) "Nonqualifying Termination" means a termination of
Executive's employment (1) by the Company for Cause, (2) by Executive
for any reason other than a Good Reason, (3) as a result of
<PAGE>
Executive's death, (4) by the Company due to Executive's absence from
his duties with the Company on a full-time basis for at least one
hundred eighty consecutive days as a result of Executive's incapacity
due to physical or mental illness or (5) as a result of Executive's
lawful mandatory retirement or (6) Executive's voluntary retirement
pursuant to any retirement incentive plan of the Company. The parties
hereto expressly understand and agree that a termination by Executive
of his employment in accordance with the first sentence of the second
paragraph of Section 1(f) shall be deemed to be a termination by the
Executive for Good Reason and thus shall not be a Nonqualifying
Termination.
(h) "Pension Plan" means the Company's defined benefit
pension plan currently known as the "Brenco Retirement Plan" or any
successor plan and any other employee benefit plans of the Company
that require any minimum period of employment as a condition to the
receipt of retirement benefits thereunder.
(i) "Termination Period" means the period of time beginning
with a Change in Control and ending on the earliest to occur of (1)
Executive's 62nd birthday, (2) Executive's death, and (3) two years
following such Change in Control.
2. Obligations of Executive. Executive agrees that in the
event any person or group attempts a Change in Control, he shall not
voluntarily leave the employ of the Company without Good Reason (a)
until such attempted Change in Control terminates or (b) if a Change
in Control shall occur, until ninety days following such Change in
Control. For purposes of the foregoing subsection (a), Good Reason
shall be determined as if a Change in Control had occurred when such
attempted Change in Control became known to the Board.
3. Payments Upon Termination of Employment.
(a) If during the Termination Period the employment of
Executive shall terminate, other than by reason of a Nonqualifying
Termination, then the Company shall pay to Executive (or Executive's
beneficiary or estate) within thirty days following the Date of
Termination, as compensation for services rendered to the Company:
(1) a lump-sum cash amount equal to the sum of (i)
Executive's full annual base salary from the Company and its
affiliated companies through the Date of Termination, to the extent
not theretofore paid, (ii) Executive's annual bonus in an amount at
least equal to the greatest of (A) the average bonus (annualized for
any fiscal year consisting of less than twelve full months or with
respect to which Executive has been employed by the Company for less
than twelve full months) paid or payable, including by reason of any
deferral, to Executive by the Company and its affiliated companies in
respect of the three fiscal years of the Company (or such portion
thereof during which Executive performed services for the Company if
Executive shall have been employed by the Company for less than such
three fiscal year period) immediately preceding the fiscal year in
which the Change in Control occurs, or (B) 50% of Executive's target
<PAGE>
bonus for the fiscal year in which the Change in Control occurs, or
(C) 50% of Executive's target bonus for the fiscal year in which
Executive's Date of Termination occurs, multiplied by (D) a fraction,
the numerator of which is the number of days in the fiscal year in
which the Date of Termination occurs through the Date of Termination
and the denominator of which is three hundred sixty-five or three
hundred sixty-six, as applicable, and (iii) any compensation
previously deferred by Executive other than pursuant to a tax-
qualified plan (together with any interest and earnings thereon) and
any accrued vacation pay, in each case to the extent not theretofore
paid; plus
(2) a lump sum cash amount equal to the Executive's
highest annual rate of base salary from the company and its affiliated
companies in effect during the twelve-month period prior to the Date
of Termination multiplied by the number of years, including any
partial year, remaining from the Date of Termination to the date of
the Executive's 62nd birthday (with any partial year being expressed
as a fraction the numerator of which is the number of days remaining
in such year and the denominator of which is 365); provided, however,
that any amount paid pursuant to this Section 3(a)(2) shall be paid in
lieu of any other amount of severance relating to salary or bonus
compensation to be received by Executive upon termination of
employment of Executive under any severance plan, policy, employment
agreement or arrangement of the Company; and provided further that in
the event of a termination of employment during the 30-day period
immediately following the first anniversary of the date of
commencement of the Termination Period in accordance with the last
paragraph of Section 1(f) hereof, the amount payable under this
Section 3(a)(2) shall be reduced by one-half.
(b) (1) In addition to the payments to be made pursuant to
paragraph (a) of this Section 3, if on the Date of Termination other
than by reason of a Nonqualifying Termination, Executive shall not be
fully vested in his accrued benefit under the Pension Plan, the
Company shall pay to Executive within thirty days following the Date
of Termination a lump sum cash amount equal to the actuarial
equivalent of his unvested accrued benefit under the Brenco Retirement
Plan as of such date. Such lump sum cash amount shall be computed
using the same actuarial methods and assumptions then in use for
purposes of computing benefits under the Brenco Retirement Plan,
provided that the interest rate used in making such computation shall
not be greater than the interest rate permitted under Section 417(e)
of the Internal Revenue Code of 1986, as amended (the "Code").
(2) In addition to the payments to be made pursuant to paragraph
(a) of this Section 3, if on the Date of Termination other than by
reason of a Nonqualifying Termination, Executive shall not be fully
vested in the employer contributions made on his behalf under any
defined contribution plan of the Company, the Company shall pay to
Executive within thirty days following the Date of Termination a lump
sum cash amount equal to the value of the unvested portion of such
employer contributions; provided, however, that if any payment
pursuant to this Section 3(b) (2) may or would result in such payment
being deemed a transaction which is subject to Section 16(b) of the
Exchange Act, the Company shall make such payment so as to meet the
<PAGE>
conditions for an exemption from such Section 16(b) as set forth in
the rules (and interpretative and no-action letters relating thereto)
under Section 16 of the Exchange Act. The value of any such unvested
employer contributions shall be determined as of the Date of
Termination; provided that for purposes of valuing common stock of the
Company that may be a part of any such plan, if the common stock of
the Company is traded on a national securities exchange or The Nasdaq
National Market on the Date of Termination, the value of a share of
common stock of the Company shall be the closing price on the national
securities exchange or NASDAQ on the Date of Termination or, if such
date is not a trading day, on the immediately preceding trading day.
(3) For a period commencing on the Date of Termination and
continuing until the Executive's 62nd birthday, the Company shall
continue to keep in full force and effect (or otherwise provide) all
policies of medical, accident, disability and life insurance with
respect to Executive and his dependents with the same level of
coverage, upon the same terms and otherwise to the same extent as such
policies shall have been in effect immediately prior to the Date of
Termination (or, if more favorable to Executive, immediately prior to
the Change in Control), and the Company and Executive shall share the
costs of the continuation of such insurance coverage in the same
proportion as such costs were shared immediately prior to the Date of
Termination.
(c) If during the Termination Period the employment of
Executive shall terminate by reason of a Nonqualifying Termination,
then the Company shall pay to Executive within thirty days following
the Date of Termination, a cash amount equal to the sum of (1)
Executive's full annual base salary from the Company through the Date
of Termination, to the extent not theretofore paid and (2) any
compensation previously deferred by Executive other than pursuant to a
tax-qualified plan (together with any interest and earnings thereon)
and any accrued vacation pay, in each case to the extent not
theretofore paid.
4. Excise Tax Limitation. (a) Notwithstanding anything
contained in this Agreement or any other agreement or plan to the
contrary, the payments and benefits provided to, or for the benefit
of, Executive under this Agreement or under any other plan or
agreement which became payable or are taken into account as a result
of the Change in Control (the "Payments") shall be reduced (but not
below zero) to the extent necessary so that no payment to be made, or
benefit to be provided, to Executive or for his benefit under this
Agreement or any other plan or agreement shall be subject to the
imposition of an excise tax under Section 4999 of the Code (such
reduced amount is hereinafter referred to as the "Limited Payment
Amount"). Unless Executive shall have given prior written notice
specifying a different order to the Company, the Company shall reduce
or eliminate the Payments to Executive by first reducing or
eliminating those payments or benefits which are not payable in cash
and then by reducing or eliminating cash payments, in each case in
reverse order beginning with payments or benefits which are to be paid
the farthest in time from the Determination (as hereinafter defined).
Any notice given by Executive pursuant to the preceding sentence shall
take precedence over the provisions of any other plan, arrangement or
agreement governing Executive's rights and entitlements to any
benefits or compensation.
<PAGE>
(b) All determinations required to be made under this
Section 4 shall be made by the Company's public accounting firm (the
"Accounting Firm"). The Accounting Firm shall provide its
calculations, together with detailed supporting documentation, both to
the Company and Executive within fifteen days after the receipt of
notice from the Company that there has been a Payment (or at such
earlier times as is requested by the Company) and, with respect to any
Limited Payment Amount, a reasonable opinion to Executive that he is
not required to report any excise tax on his federal income tax return
with respect to the Limited Payment Amount (collectively, the
"Determination"). In the event that the Accounting Firm is serving as
an accountant or auditor for the individual, entity or group effecting
the Change in Control, Executive shall appoint another nationally
recognized public accounting firm to make the determination required
hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees, costs and expenses (including,
but not limited to, the costs of retaining experts) of the Accounting
Firm shall be borne by the Company. The Determination by the
Accounting Firm shall be binding upon the Company and Executive
(except as provided in paragraph (c) below).
(c) If it is established pursuant to a final determination
of a court or an Internal Revenue Service (the "IRS") proceeding which
has been finally and conclusively resolved, that Payments have been
made to, or provided for the benefit of, Executive by the Company,
which are in excess of the limitations provided in Section 4
(hereinafter referred to as an "Excess Payment"), such Excess Payment
shall be deemed for all purposes to be a loan to Executive made on the
date Executive received the Excess Payment and Executive shall repay
the Excess Payment to the Company on demand, together with interest on
the Excess Payment at the applicable federal rate (as defined in
Section 1274(d) of the Code) from the date of Executive's receipt
of such Excess Payment until the date of such repayment. As a result
of the uncertainty in the application of Section 4999 of the Code at
the time of the Determination, it is possible that Payments which will
not have been made by the Company should have been made (an
"Underpayment"), consistent with the calculations required to be made
under this Section 4. In the event that it is determined (i) by the
Accounting Firm, the Company (which shall include the position taken
by the Company, or together with its consolidated group, on its
federal income tax return) or the IRS or (ii) pursuant to a
determination by a court, that an Underpayment has occurred, the
Company shall pay an amount equal to such Underpayment to Executive
within ten days of such determination together with interest on such
amount at the applicable federal rate from the date such amount would
have been paid to Executive until the date of payment.
5. Withholding Taxes. The Company may withhold from all
payments due to Executive (or his beneficiary or estate) hereunder all
taxes which, by applicable federal, state, local or other law, the
Company is required to withhold therefrom.
6. Reimbursement of Expenses. If any contest or dispute shall
arise under this Agreement involving termination of Executive's
employment with the Company or involving the failure or refusal of the
Company to perform fully in accordance with the terms hereof, the
Company shall reimburse Executive, on a current basis, for all legal
<PAGE>
fees and expenses, if any, incurred by Executive in connection with
such contest or dispute, subject to the conditions set forth in the
following sentences, together with interest in an amount equal to the
prime rate of Crestar Bank from time to time in effect, but in no
event higher than the maximum legal rate permissible under applicable
law, such interest to accrue from the date the Company receives
Executive's statement for such fees and expenses through the date of
payment thereof. The Company shall have no obligation to reimburse
Executive for legal fees and expenses pursuant to this Section 6 in
the event that a court of competent jurisdiction ultimately determines
that Executive's position asserted in any contest or dispute litigated
by Executive was without merit. Executive hereby agrees that, in the
event of such a determination, Executive will repay the Company the
amount of any legal fees or expenses advanced by the Company to
Executive prior to such determination.
7. Termination of Agreement. (a) This Agreement shall be
effective on the date hereof and shall continue until terminated by
the Company as provided in paragraph (b) of this Section 7; provided,
however, that this Agreement shall terminate in any event upon the
first to occur of (i) Executive's 62nd birthday, (ii) Executive's
death or (iii) termination of Executive's Employment with the Company
prior to a Change in Control (except as otherwise provided hereunder).
(b) The Company shall have the right prior to a Change in
Control, in its sole discretion, pursuant to action by the Board, to
approve the termination of this Agreement, which termination shall not
become effective until the date fixed by the Board for such
termination, which date shall be at least one hundred twenty days
after notice thereunder is given by the Company to Executive in
accordance with Section 11; provided, however, that no such action
shall be taken by the Board during any period of time when the Board
has knowledge that any person has taken steps reasonably calculated to
effect a Change in Control until, in the opinion of the Board, such
person has abandoned or terminated its efforts to effect a Change in
Control; and provided, further, that in no event shall this Agreement
be terminated without the consent of Executive following a Change in
Control.
8. Scope of Agreement. Nothing in this Agreement shall be
deemed to entitle Executive to continued employment with the Company
or its subsidiaries, and if Executive's employment with the Company
shall terminate prior to a Change in Control, Executive shall have no
further rights under this Agreement; provided, however, that any
termination of Executive's employment during the two-year period
following a Change in Control shall be subject to all of the
provisions of this Agreement.
9. Confidential Information. 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 Executive during Executive's
employment by the Company or any of its affiliated companies and which
shall not be or become public knowledge (other than by acts by
Executive or representatives of Executive in violation of this
<PAGE>
Agreement). After termination of Executive's employment with the
Company, Executive shall not, without the prior written consent of the
Company, communicate or divulge any such information, knowledge or
data to anyone other than the Company and those designated by it. In
no event shall an asserted violation of the provisions of this Section
9 constitute a basis for deferring or withholding any amounts
otherwise payable to Executive under this Agreement.
10. Successors; Binding Agreement.
(a) This Agreement shall not be terminated by any merger or
consolidation of the Company whereby the Company is or is not the
surviving or resulting corporation or as a result of any transfer of
all or substantially all of the assets of the Company. In the event
of any such merger, consolidation or transfer of assets, the
provisions of this Agreement shall be binding upon the surviving or
resulting corporation or the person or entity to which such assets are
transferred.
(b) The Company agrees that concurrently with any merger,
consolidation or transfer of assets referred to in paragraph (a) of
this Section 10, it will cause any successor or transferee
unconditionally to assume, by written instrument delivered to
Executive (or his beneficiary or estate), all of the obligations of
the Company hereunder. Failure of the Company to obtain such
assumption prior to the effectiveness of any such merger,
consolidation or transfer of assets shall be a breach of this
Agreement and shall constitute Good Reason hereunder and shall entitle
Executive to compensation and other benefits from the Company in the
same amount and on the same terms as Executive would be entitled
hereunder if Executive's employment were terminated following a Change
in Control other than by reason of a Nonqualifying Termination. For
purposes of implementing the foregoing, the date on which any such
merger, consolidation or transfer becomes effective shall be deemed
the date Good Reason occurs, and shall be the Date of Termination if
requested by Executive.
(c) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees
and legatees. If Executive shall die while any amounts would be
payable to Executive hereunder had Executive continued to live, all
such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to such person or persons
appointed in writing by Executive to receive such amounts or, if no
person is so appointed, to Executive's estate.
11. Notice. (a) For purposes of this Agreement, all notices and
other communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given when delivered or
five days after deposit in the United States mail, certified and
return receipt requested, postage prepaid, addressed as follows:
<PAGE>
If to Executive:
________________
________________
________________
________________
If to the Company:
Brenco, Incorporated
Suite 201
One Park West Circle
Midlothian, VA 23113
Attn: Corporate Secretary
or to such other address as either party may have furnished to the
other in writing in accordance therewith, except that notices of
change of address shall be effective only upon receipt.
(b) A written notice of Executive's Date of Termination by
the Company or Executive, as the case may be, to the other, shall (i)
indicate the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination
of Executive's employment under the provision so indicated and (iii)
specify the Termination Date (which date shall be not less than
fifteen days after the giving of such notice). The failure by
Executive or the Company to set forth in such notice any fact or
circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of Executive or the Company hereunder or
preclude Executive or the Company from asserting such fact or
circumstance in enforcing Executive's or the Company's rights
hereunder.
12. Full Settlement; Resolution of Disputes. (a) The Company's
obligation to make any payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected
by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against Executive or
others. In no event shall Executive be obligated to seek other
employment or take other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement
and, such amounts shall not be reduced whether or not Executive
obtains other employment.
(b) If there shall be any dispute between the Company and
Executive in the event of any termination of Executive's employment,
then, unless and until there is a final, nonappealable judgment by a
court of competent jurisdiction declaring that such termination was
for Cause, that the determination by Executive of the existence of
Good Reason was not made in good faith, or that the Company is not
otherwise obligated to pay any amount or provide any benefit to
Executive and his dependents or other beneficiaries, as the case may
be, under paragraphs (a) and (b) of Section 3, the Company shall pay
all amounts, and provide all benefits, to Executive and his dependents
or other beneficiaries, as the case may be, that the Company would be
required to pay or provide pursuant to paragraphs (a) and (b) of
<PAGE>
Section 3 as though such termination were by the Company without Cause
or by Executive with Good Reason; 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
Executive to repay all such amounts to which Executive is ultimately
adjudged by such court not to be entitled.
13. Employment with Subsidiaries. Employment with the Company
for purposes of this Agreement shall include employment with any
corporation or other entity in which the Company has a direct or
indirect ownership interest of 50% or more of the total combined
voting power of the then outstanding securities of such corporation or
other entity entitled to vote generally in the election of directors.
14. Governing Law; Validity. The interpretation, construction
and performance of this Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the Commonwealth
of Virginia without regard to the principle of conflicts of laws. The
invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision
of this Agreement, which other provisions shall remain in full force
and effect.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all
of which together shall constitute one and the same instrument.
16. Miscellaneous. No provision of this Agreement may be
modified or waived unless such modification or waiver is agreed to in
writing and signed by Executive and by a duly authorized officer of
the Company. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. Failure by
Executive or the Company to insist upon strict compliance with any
provision of this Agreement or to assert any right Executive or the
Company may have hereunder, including without limitation, the right of
Executive to terminate employment for Good Reason, shall not be deemed
to be a waiver of such provision or right or any other provision or
right of this Agreement. The rights of, and benefits payable to,
Executive, his estate or his beneficiaries pursuant to this Agreement
are in addition to any rights of, or benefits payable to, Executives,
his estate or his beneficiaries under any other employee benefit plan
or compensation program of the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by a duly authorized officer of the Company and Executive has
executed this Agreement as of the day and year first above written.
<PAGE>
BRENCO, INCORPORATED
By:
Title:
EXECUTIVE
Jacob M. Feichtner
___________________________________
<PAGE>
EXHIBIT 10.4
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT is entered into as of the 22nd day of March, 1996
by and between Brenco, Incorporated, a Virginia corporation (the
"Company"), and Howard J. Bush ("Executive").
RECITALS
I. Executive currently serves as a key employee member of
management of the Company and his services and knowledge are valuable
to the Company.
II. The Board (as defined in Section 1) has determined that it
is in the best interests of the Company and its stockholders to secure
Executive's continued services and to ensure Executive's continued
dedication and objectivity in the event of any threat or occurrence
of, or negotiation or other action that could lead to, or create the
possibility of, a Change in Control (as defined in Section 1) of the
Company, without concern as to whether Executive might be hindered or
distracted by personal uncertainties and risks created by any such
possible Change in Control, and to encourage Executive's full
attention and dedication to the Company, the Board has authorized the
Company to enter into this Agreement.
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements herein contained, the Company and
Executive hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms
shall have the respective meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Cause" means (1) a material breach by Executive of the
duties and responsibilities of Executive (other than as a result of
incapacity due to physical or mental illness) which is demonstrably
willful and deliberate on Executive's part, which is committed in bad
faith or without reasonable belief that such breach is in the best
interests of the Company and which is not remedied in a reasonable
period of time after receipt of written notice from the Company
specifying such breach or (2) the commission by Executive of a felony
involving moral turpitude. Cause shall not exist unless and until the
Company has delivered to Executive a copy of a resolution duly adopted
by three-quarters of the Board at a meeting of the Board called and
held for such purpose (after reasonable notice to Executive and an
opportunity for Executive, together with his counsel, to be heard
before the Board), finding that in the good faith opinion of the Board
the Executive was guilty of the conduct set forth in this Section 1(b)
and specifying the particulars thereof in detail.
<PAGE>
(c) "Change in Control" means:
(1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), of beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act, of twenty
percent (20%) or more of either (i) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common Stock")
or (ii) the combined voting power of the then outstanding securities
of the Company entitled to vote generally in the election of directors
(the "Outstanding Company Voting Securities"); provided, however, that
the following acquisitions shall not constitute a Change in Control:
(A) any acquisition by the Company, (B) any acquisition directly from
the Company, (C) any acquisition by, or benefit distribution from, an
employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company, (D) any
acquisition pursuant to any compensatory stock option or stock
purchase plan for employees, (E) any acquisition by any corporation
pursuant to a reorganization, merger or consolidation involving the
Company, if, immediately after such reorganization, merger or
consolidation, each of the conditions described in clauses (i), (ii)
and (iii) of subsection (3) of this Section (1)(c) shall be satisfied,
or (F) any acquisition by the Executive or any group of persons
including the Executive; or (G) the acquisition by members of the
Whitfield Family (as hereinafter defined), individually or
collectively, of any direct or indirect beneficial ownership in
addition to the individual or collective beneficial ownership of
members of the Whitfield Family which exists on the date hereof; and
provided further that, for purposes of clause (A), if any Person
(other than the Company or any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company) shall become the beneficial owner of fifty
percent (50%) or more of the Outstanding Company Common Stock or fifty
percent (50%) or more of the Outstanding Company Voting Securities by
reason of an acquisition by the Company and such Person shall, after
such acquisition by the Company, become the beneficial owner of any
additional shares of the Outstanding Company Common Stock or any
additional Outstanding Voting Securities, such additional beneficial
ownership shall constitute a Change in Control;
(2) individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of such Board; provided, however, that any individual
who becomes a director of the Company subsequent to the date hereof
whose election, or nomination for election by the Company's
stockholders, was approved by the vote of at least a majority of the
directors then comprising the Incumbent Board shall be deemed to have
been a member of the Incumbent Board; and provided further, that no
individual who was initially elected as a director of the Company as a
result of an actual or threatened election contest, as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act, or any other actual or threatened solicitation of proxies or
consents by or on behalf of any Person other than the Board shall be
deemed to have been a member of the Incumbent Board;
<PAGE>
(3) approval by the stockholders of the Company of a
reorganization, merger or consolidation unless, in any such case,
immediately after such reorganization, merger or consolidation, (i)
more than fifty percent (50%) of the then outstanding shares of common
stock of the corporation resulting from such reorganization, merger or
consolidation and more than fifty percent (50%) of the combined voting
power of the then outstanding securities of such corporation entitled
to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals or entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities immediately prior to such reorganization, merger or
consolidation and in substantially the same proportions relative to
each other as their ownership, immediately prior to such
reorganization, merger or consolidation, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the
case may be, (ii) no Person (other than the Company, any employee
benefit plan (or related trust) sponsored or maintained by the Company
or the corporation resulting from such reorganization, merger or
consolidation (or any corporation controlled by the Company), or any
Person which beneficially owned, immediately prior to such
reorganization, merger or consolidation, directly or indirectly,
twenty percent (20%) or more of the Outstanding Company Common Stock
or the Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty percent (20%) or
more of the then outstanding shares of common stock of such
corporation or twenty percent (20%) or more of the combined voting
power of the then outstanding securities of such corporation entitled
to vote generally in the election of directors and (iii) 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 action of the Board providing for such
reorganization, merger or consolidation; or
(4) approval by the stockholders of the Company of (i) a
plan of complete liquidation or dissolution of the Company or (ii) 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,
immediately after such sale or other disposition, (A) more than fifty
percent (50%) of the then outstanding shares of common stock thereof
and more than fifty percent (50%) of the combined voting power of the
then outstanding securities thereof entitled to vote generally in the
election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities immediately prior to such sale or other disposition and in
substantially the same proportions relative to each other as their
ownership, immediately prior to such sale or other disposition, of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (B) no Person (other than the Company,
any employee benefit plan (or related trust) sponsored or maintained
by the Company or such corporation (or any corporation controlled by
the Company), or any Person which beneficially owned, immediately
prior to such sale or other disposition, directly or indirectly,
twenty percent (20%) or more of the Outstanding
<PAGE>
Company Common Stock or the Outstanding Company Voting Securities, as
the case may be) beneficially owns, directly or indirectly, twenty
percent (20%) or more of the then outstanding shares of common stock
thereof or twenty percent (20%) or more of the combined voting power
of the then outstanding securities thereof entitled to vote generally
in the election of directors and (C) at least a majority of the
members of the board of directors thereof were members of the
Incumbent Board at the time of the execution of the initial agreement
or action of the Board providing for such sale or other disposition.
For purposes of Section 1(c)(1), "Whitfield Family" shall mean (I)
Needham B. Whitfield and members of his "immediate family" (as that
term is defined in Rule 16a-1(e) under the Exchange Act), (ii) Anne
Whitfield Kenny and members of her immediate family, (iii) the Estate
of Mildred F. Whitfield and (iv) and in each of the foregoing
instances, their respective personal or legal representatives,
executors, administrators, successors, heirs, distributees and
legatees.
Notwithstanding anything contained in the Agreement to the
contrary, it is understood that the collective beneficial ownership of
members of the Whitfield Family as of the date hereof shall not
constitute, or be construed or deemed to constitute, a Change of
Control.
Furthermore, notwithstanding anything contained in this Agreement
to the contrary, if Executive's employment is terminated prior to a
Change in Control and Executive reasonably demonstrates that such
termination was at the request of a third party who has indicated an
intention or taken steps reasonably calculated to effect a Change in
Control (a "Third Party") who effectuates a Change in Control, then
for all purposes of this Agreement, the date of a Change in Control
shall mean the date immediately prior to the date of such termination
of Executive's employment.
(d) "Company" means Brenco, Incorporated, a Virginia
corporation.
(e) "Date of Termination" means (1) the effective date on
which Executive's employment by the Company terminates as specified in
a prior written notice by the Company or Executive, as the case may
be, to the other, delivered pursuant to Section 11 or (2) if
Executive's employment by the Company terminates by reason of death,
the date of death of Executive.
(f) "Good Reason" means, without Executive's express
written consent, the occurrence of any of the following events after a
Change in Control:
(1) (i) the assignment to Executive of any duties
inconsistent in any material adverse respect with Executive's
position(s), duties, responsibilities or status with the Company
immediately prior to such Change in Control, (ii) a material adverse
change in Executive's reporting responsibilities, titles or offices
with the Company as in effect immediately prior to such Change in
Control or (iii) any removal or involuntary termination of Executive
<PAGE>
from the Company otherwise than as expressly permitted by this
Agreement or any failure to re-elect Executive to any position with
the Company held by Executive immediately prior to such Change in
Control;
(2) a reduction by the Company in Executive's rate of
annual base salary as in effect immediately prior to such Change in
Control or as the same has been increased thereafter;
(3) any requirement of the Company that Executive (i) be
based anywhere more than thirty-five miles from the facility where
Executive is located at the time of the Change in Control;
(4) the failure of the Company to (i) continue in effect
any employee benefit plan or compensation plan in which Executive is
participating immediately prior to such Change in Control, unless
Executive is permitted to participate in other plans providing
Executive with substantially comparable benefits, or the taking of any
action by the Company which would adversely affect Executive's
participation in or materially reduce Executive's benefits under any
such plan, (ii) provide Executive and Executive's dependents with
welfare benefits (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life,
group life, accidental death and travel accident insurance plans and
programs) in accordance with the most favorable plans, practices,
programs and policies of the Company and its affiliated companies in
effect for Executive immediately prior to such Change in Control,
(iii) provide fringe benefits in accordance with the most favorable
plans, practices, programs and policies of the Company and its
affiliated companies in effect for Executive immediately prior to such
Change in Control, or (iv) provide Executive with paid vacation in
accordance with the most favorable plans, policies, programs and
practices of the Company and its affiliated companies as in effect for
Executive immediately prior to such Change in Control; or
(5) the failure of the Company to obtain the assumption
agreement from any successor as contemplated in Section 10(b).
In addition, a termination by Executive of his employment for any
reason during the 30-day period immediately following the first
anniversary of the date of commencement of the Termination Period
shall be deemed to be termination by Executive for Good Reason. For
purposes of this Agreement, any good faith determination of Good
Reason made by Executive shall be conclusive; provided, however, that
an isolated, insubstantial and inadvertent action taken in good faith
and which is remedied by the Company promptly after receipt of notice
thereof given by Executive shall not constitute Good Reason. Any
event or condition described in this Section 1(f)(1) through (5) which
occurs prior to a Change in Control, but was at the request of a Third
Party who effectuates a Change in Control, shall constitute Good
Reason following a Change in Control for purposes of this Agreement
notwithstanding that it occurred prior to the Change in Control.
<PAGE>
(g) "Nonqualifying Termination" means a termination of
Executive's employment (1) by the Company for Cause, (2) by Executive
for any reason other than a Good Reason, (3) as a result of
Executive's death, (4) by the Company due to Executive's absence from
his duties with the Company on a full-time basis for at least one
hundred eighty consecutive days as a result of Executive's incapacity
due to physical or mental illness or (5) as a result of Executive's
lawful mandatory retirement or (6) Executive's voluntary retirement
pursuant to any retirement incentive plan of the Company. The parties
hereto expressly understand and agree that a termination by Executive
of his employment in accordance with the first sentence of the second
paragraph of Section 1(f) shall be deemed to be a termination by the
Executive for Good Reason and thus shall not be a Nonqualifying
Termination.
(h) "Pension Plan" means the Company's defined benefit
pension plan currently known as the "Brenco Retirement Plan" or any
successor plan and any other employee benefit plans of the Company
that require any minimum period of employment as a condition to the
receipt of retirement benefits thereunder.
(i) "Termination Period" means the period of time beginning
with a Change in Control and ending on the earliest to occur of (1)
Executive's 62nd birthday, (2) Executive's death, and (3) two years
following such Change in Control.
2. Obligations of Executive. Executive agrees that in the
event any person or group attempts a Change in Control, he shall not
voluntarily leave the employ of the Company without Good Reason (a)
until such attempted Change in Control terminates or (b) if a Change
in Control shall occur, until ninety days following such Change in
Control. For purposes of the foregoing subsection (a), Good Reason
shall be determined as if a Change in Control had occurred when such
attempted Change in Control became known to the Board.
3. Payments Upon Termination of Employment.
(a) If during the Termination Period the employment of
Executive shall terminate, other than by reason of a Nonqualifying
Termination, then the Company shall pay to Executive (or Executive's
beneficiary or estate) within thirty days following the Date of
Termination, as compensation for services rendered to the Company:
(1) a lump-sum cash amount equal to the sum of (i)
Executive's full annual base salary from the Company and its
affiliated companies through the Date of Termination, to the extent
not theretofore paid, (ii) Executive's annual bonus in an amount at
least equal to the greatest of (A) the average bonus (annualized for
any fiscal year consisting of less than twelve full months or with
respect to which Executive has been employed by the Company for less
than twelve full months) paid or payable, including by reason of any
deferral, to Executive by the Company and its affiliated companies in
respect of the three fiscal years of the Company (or such portion
thereof during which Executive performed services for the Company if
Executive shall have been employed by the Company for less than such
<PAGE>
three fiscal year period) immediately preceding the fiscal year in
which the Change in Control occurs, or (B) 50% of Executive's target
bonus for the fiscal year in which the Change in Control occurs, or
(C) 50% of Executive's target bonus for the fiscal year in which
Executive's Date of Termination occurs, multiplied by (D) a fraction,
the numerator of which is the number of days in the fiscal year in
which the Date of Termination occurs through the Date of Termination
and the denominator of which is three hundred sixty-five or three
hundred sixty-six, as applicable, and (iii) any compensation
previously deferred by Executive other than pursuant to a tax-
qualified plan (together with any interest and earnings thereon) and
any accrued vacation pay, in each case to the extent not theretofore
paid; plus
(2) a lump-sum cash amount equal to (i) two times
Executive's highest annual rate of base salary from the Company and
its affiliated companies in effect during the twelve-month period
prior to the Date of Termination; provided, however, that in the event
there are fewer than twenty-four whole months remaining from the Date
of Termination to the date of Executive's 62nd birthday, the amount
payable under this Section 3(a) (2) shall be calculated by multiplying
the amount otherwise payable by a fraction the numerator of which is
the number of months, including a partial month (with a partial month
being expressed as a fraction the numerator of which is the number of
days remaining in such month and the denominator of which is the
number of days in such month), so remaining and the denominator of
which is twenty-four; provided further, that any amount paid pursuant
to this Section 3(a) (2) shall be paid in lieu of any other amount of
severance relating to salary or bonus compensation to be received by
Executive upon termination of employment of Executive under any
severance plan, policy, employment agreement or arrangement of the
Company; and provided further that in the event of a termination of
employment during the 30-day period immediately following the first
anniversary of the date of commencement of the Termination Period in
accordance with the last paragraph of Section 1(f) hereof, the amount
payable under this Section 3(a)(2) shall be reduced by one-half.
(b) (1) In addition to the payments to be made pursuant to
paragraph (a) of this Section 3, if on the Date of Termination other
than by reason of a Nonqualifying Termination, Executive shall not be
fully vested in his accrued benefit under the Pension Plan, the
Company shall pay to Executive within thirty days following the Date
of Termination a lump sum cash amount equal to the actuarial
equivalent of his unvested accrued benefit under the Brenco Retirement
Plan as of such date. Such lump sum cash amount shall be computed
using the same actuarial methods and assumptions then in use for
purposes of computing benefits under the Brenco Retirement Plan,
provided that the interest rate used in making such computation shall
not be greater than the interest rate permitted under Section 417(e)
of the Internal Revenue Code of 1986, as amended (the "Code").
(2) In addition to the payments to be made pursuant to paragraph
(a) of this Section 3, if on the Date of Termination other than by
reason of a Nonqualifying Termination, Executive shall not be fully
vested in the employer contributions made on his behalf under any
defined contribution plan of the Company, the Company shall pay to
<PAGE>
Executive within thirty days following the Date of Termination a lump
sum cash amount equal to the value of the unvested portion of such
employer contributions; provided, however, that if any payment
pursuant to this Section 3(b) (2) may or would result in such payment
being deemed a transaction which is subject to Section 16(b) of the
Exchange Act, the Company shall make such payment so as to meet the
conditions for an exemption from such Section 16(b) as set forth in
the rules (and interpretative and no-action letters relating thereto)
under Section 16 of the Exchange Act. The value of any such unvested
employer contributions shall be determined as of the Date of
Termination; provided that for purposes of valuing common stock of the
Company that may be a part of any such plan, if the common stock of
the Company is traded on a national securities exchange or The Nasdaq
National Market on the Date of Termination, the value of a share of
common stock of the Company shall be the closing price on the national
securities exchange or NASDAQ on the Date of Termination or, if such
date is not a trading day, on the immediately preceding trading day.
(3) For a period of two years commencing on the Date of
Termination, the Company shall continue to keep in full force and
effect (or otherwise provide) all policies of medical, accident,
disability and life insurance with respect to Executive and his
dependents with the same level of coverage, upon the same terms and
otherwise to the same extent as such policies shall have been in
effect immediately prior to the Date of Termination (or, if more
favorable to Executive, immediately prior to the Change in Control),
and the Company and Executive shall share the costs of the
continuation of such insurance coverage in the same proportion as such
costs were shared immediately prior to the Date of Termination.
(c) If during the Termination Period the employment of
Executive shall terminate by reason of a Nonqualifying Termination,
then the Company shall pay to Executive within thirty days following
the Date of Termination, a cash amount equal to the sum of (1)
Executive's full annual base salary from the Company through the Date
of Termination, to the extent not theretofore paid and (2) any
compensation previously deferred by Executive other than pursuant to a
tax-qualified plan (together with any interest and earnings thereon)
and any accrued vacation pay, in each case to the extent not
theretofore paid.
4. Excise Tax Limitation. (a) Notwithstanding anything
contained in this Agreement or any other agreement or plan to the
contrary, the payments and benefits provided to, or for the benefit
of, Executive under this Agreement or under any other plan or
agreement which became payable or are taken into account as a result
of the Change in Control (the "Payments") shall be reduced (but not
below zero) to the extent necessary so that no payment to be made, or
benefit to be provided, to Executive or for his benefit under this
Agreement or any other plan or agreement shall be subject to the
imposition of an excise tax under Section 4999 of the Code (such
reduced amount is hereinafter referred to as the "Limited Payment
Amount"). Unless Executive shall have given prior written notice
specifying a different order to the Company, the Company shall reduce
or eliminate the Payments to Executive by first reducing or
eliminating those payments or benefits which are not payable in cash
<PAGE>
and then by reducing or eliminating cash payments, in each case in
reverse order beginning with payments or benefits which are to be paid
the farthest in time from the Determination (as hereinafter defined).
Any notice given by Executive pursuant to the preceding sentence shall
take precedence over the provisions of any other plan, arrangement or
agreement governing Executive's rights and entitlements to any
benefits or compensation.
(b) All determinations required to be made under this
Section 4 shall be made by the Company's public accounting firm (the
"Accounting Firm"). The Accounting Firm shall provide its
calculations, together with detailed supporting documentation, both to
the Company and Executive within fifteen days after the receipt of
notice from the Company that there has been a Payment (or at such
earlier times as is requested by the Company) and, with respect to any
Limited Payment Amount, a reasonable opinion to Executive that
he is not required to report any excise tax on his federal income tax
return with respect to the Limited Payment Amount (collectively, the
"Determination"). In the event that the Accounting Firm is serving as
an accountant or auditor for the individual, entity or group effecting
the Change in Control, Executive shall appoint another nationally
recognized public accounting firm to make the determination required
hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees, costs and expenses (including,
but not limited to, the costs of retaining experts) of the Accounting
Firm shall be borne by the Company. The Determination by the
Accounting Firm shall be binding upon the Company and Executive
(except as provided in paragraph (c) below).
(c) If it is established pursuant to a final determination
of a court or an Internal Revenue Service (the "IRS") proceeding which
has been finally and conclusively resolved, that Payments have been
made to, or provided for the benefit of, Executive by the Company,
which are in excess of the limitations provided in Section 4
(hereinafter referred to as an "Excess Payment"), such Excess Payment
shall be deemed for all purposes to be a loan to Executive made on the
date Executive received the Excess Payment and Executive shall repay
the Excess Payment to the Company on demand, together with interest on
the Excess Payment at the applicable federal rate (as defined in
Section 1274(d) of the Code) from the date of Executive's receipt
of such Excess Payment until the date of such repayment. As a result
of the uncertainty in the application of Section 4999 of the Code at
the time of the Determination, it is possible that Payments which will
not have been made by the Company should have been made (an
"Underpayment"), consistent with the calculations required to be made
under this Section 4. In the event that it is determined (i) by the
Accounting Firm, the Company (which shall include the position taken
by the Company, or together with its consolidated group, on its
federal income tax return) or the IRS or (ii) pursuant to a
determination by a court, that an Underpayment has occurred, the
Company shall pay an amount equal to such Underpayment to Executive
within ten days of such determination together with interest on such
amount at the applicable federal rate from the date such amount would
have been paid to Executive until the date of payment.
<PAGE>
5. Withholding Taxes. The Company may withhold from all
payments due to Executive (or his beneficiary or estate) hereunder all
taxes which, by applicable federal, state, local or other law, the
Company is required to withhold therefrom.
6. Reimbursement of Expenses. If any contest or dispute shall
arise under this Agreement involving termination of Executive's
employment with the Company or involving the failure or refusal of the
Company to perform fully in accordance with the terms hereof, the
Company shall reimburse Executive, on a current basis, for all legal
fees and expenses, if any, incurred by Executive in connection with
such contest or dispute, subject to the conditions set forth in the
following sentences, together with interest in an amount equal to the
prime rate of Crestar Bank from time to time in effect, but in no
event higher than the maximum legal rate permissible under applicable
law, such interest to accrue from the date the Company receives
Executive's statement for such fees and expenses through the date of
payment thereof. The Company shall have no obligation to reimburse
Executive for legal fees and expenses pursuant to this Section 6 in
the event that a court of competent jurisdiction ultimately determines
that Executive's position asserted in any contest or dispute litigated
by Executive was without merit. Executive hereby agrees that, in the
event of such a determination, Executive will repay the Company the
amount of any legal fees or expenses advanced by the Company to
Executive prior to such determination.
7. Termination of Agreement. (a) This Agreement shall be
effective on the date hereof and shall continue until terminated by
the Company as provided in paragraph (b) of this Section 7; provided,
however, that this Agreement shall terminate in any event upon the
first to occur of (i) Executive's 62nd birthday, (ii) Executive's
death or (iii) termination of Executive's Employment with the Company
prior to a Change in Control (except as otherwise provided hereunder).
(b) The Company shall have the right prior to a Change in
Control, in its sole discretion, pursuant to action by the Board, to
approve the termination of this Agreement, which termination shall not
become effective until the date fixed by the Board for such
termination, which date shall be at least one hundred twenty days
after notice thereunder is given by the Company to Executive in
accordance with Section 11; provided, however, that no such action
shall be taken by the Board during any period of time when the Board
has knowledge that any person has taken steps reasonably calculated to
effect a Change in Control until, in the opinion of the Board, such
person has abandoned or terminated its efforts to effect a Change in
Control; and provided, further, that in no event shall this Agreement
be terminated without the consent of Executive following a Change in
Control.
8. Scope of Agreement. Nothing in this Agreement shall be
deemed to entitle Executive to continued employment with the Company
or its subsidiaries, and if Executive's employment with the Company
shall terminate prior to a Change in Control, Executive shall have no
further rights under this Agreement; provided, however, that any
termination of Executive's employment during the two-year period
following a Change in Control shall be subject to all of the
provisions of this Agreement.
<PAGE>
9. Confidential Information. 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 Executive during Executive's
employment by the Company or any of its affiliated companies and which
shall not be or become public knowledge (other than by acts by
Executive or representatives of Executive in violation of this
Agreement). After termination of Executive's employment with the
Company, Executive shall not, without the prior written consent of the
Company, communicate or divulge any such information, knowledge or
data to anyone other than the Company and those designated by it. In
no event shall an asserted violation of the provisions of this Section
9 constitute a basis for deferring or withholding any amounts
otherwise payable to Executive under this Agreement.
10. Successors; Binding Agreement.
(a) This Agreement shall not be terminated by any merger or
consolidation of the Company whereby the Company is or is not the
surviving or resulting corporation or as a result of any transfer of
all or substantially all of the assets of the Company. In the event
of any such merger, consolidation or transfer of assets, the
provisions of this Agreement shall be binding upon the surviving or
resulting corporation or the person or entity to which such assets are
transferred.
(b) The Company agrees that concurrently with any merger,
consolidation or transfer of assets referred to in paragraph (a) of
this Section 10, it will cause any successor or transferee
unconditionally to assume, by written instrument delivered to
Executive (or his beneficiary or estate), all of the obligations of
the Company hereunder. Failure of the Company to obtain such
assumption prior to the effectiveness of any such merger,
consolidation or transfer of assets shall be a breach of this
Agreement and shall constitute Good Reason hereunder and shall entitle
Executive to compensation and other benefits from the Company in the
same amount and on the same terms as Executive would be entitled
hereunder if Executive's employment were terminated following a Change
in Control other than by reason of a Nonqualifying Termination. For
purposes of implementing the foregoing, the date on which any such
merger, consolidation or transfer becomes effective shall be deemed
the date Good Reason occurs, and shall be the Date of Termination if
requested by Executive.
(c) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees
and legatees. If Executive shall die while any amounts would be
payable to Executive hereunder had Executive continued to live, all
such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to such person or persons
appointed in writing by Executive to receive such amounts or, if no
person is so appointed, to Executive's estate.
<PAGE>
11. Notice. (a) For purposes of this Agreement, all notices and
other communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given when delivered or
five days after deposit in the United States mail, certified and
return receipt requested, postage prepaid, addressed as follows:
If to Executive:
________________
________________
________________
________________
If to the Company:
Brenco, Incorporated
Suite 201
One Park West Circle
Midlothian, VA 23113
Attn: Corporate Secretary
or to such other address as either party may have furnished to the
other in writing in accordance therewith, except that notices of
change of address shall be effective only upon receipt.
(b) A written notice of Executive's Date of Termination by
the Company or Executive, as the case may be, to the other, shall (i)
indicate the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination
of Executive's employment under the provision so indicated and (iii)
specify the Termination Date (which date shall be not less than
fifteen days after the giving of such notice). The failure by
Executive or the Company to set forth in such notice any fact or
circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of Executive or the Company hereunder or
preclude Executive or the Company from asserting such fact or
circumstance in enforcing Executive's or the Company's rights
hereunder.
12. Full Settlement; Resolution of Disputes. (a) The Company's
obligation to make any payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected
by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against Executive or
others. In no event shall Executive be obligated to seek other
employment or take other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement
and, such amounts shall not be reduced whether or not Executive
obtains other employment.
<PAGE>
(b) If there shall be any dispute between the Company and
Executive in the event of any termination of Executive's employment,
then, unless and until there is a final, nonappealable judgment by a
court of competent jurisdiction declaring that such termination was
for Cause, that the determination by Executive of the existence of
Good Reason was not made in good faith, or that the Company is not
otherwise obligated to pay any amount or provide any benefit to
Executive and his dependents or other beneficiaries, as the case may
be, under paragraphs (a) and (b) of Section 3, the Company shall pay
all amounts, and provide all benefits, to Executive and his dependents
or other beneficiaries, as the case may be, that the Company would be
required to pay or provide pursuant to paragraphs (a) and (b) of
Section 3 as though such termination were by the Company without Cause
or by Executive with Good Reason; 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
Executive to repay all such amounts to which Executive is ultimately
adjudged by such court not to be entitled.
13. Employment with Subsidiaries. Employment with the Company
for purposes of this Agreement shall include employment with any
corporation or other entity in which the Company has a direct or
indirect ownership interest of 50% or more of the total combined
voting power of the then outstanding securities of such corporation or
other entity entitled to vote generally in the election of directors.
14. Governing Law; Validity. The interpretation, construction
and performance of this Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the Commonwealth
of Virginia without regard to the principle of conflicts of laws. The
invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision
of this Agreement, which other provisions shall remain in full force
and effect.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all
of which together shall constitute one and the same instrument.
16. Miscellaneous. No provision of this Agreement may be
modified or waived unless such modification or waiver is agreed to in
writing and signed by Executive and by a duly authorized officer of
the Company. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. Failure by
Executive or the Company to insist upon strict compliance with any
provision of this Agreement or to assert any right Executive or the
Company may have hereunder, including without limitation, the right of
Executive to terminate employment for Good Reason, shall not be deemed
to be a waiver of such provision or right or any other provision or
right of this Agreement. The rights of, and benefits payable to,
Executive, his estate or his beneficiaries pursuant to this Agreement
are in addition to any rights of, or benefits payable to, Executives,
his estate or his beneficiaries under any other employee benefit plan
or compensation program of the Company.
<PAGE>
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by a duly authorized officer of the Company and Executive has
executed this Agreement as of the day and year first above written.
BRENCO, INCORPORATED
By:
Title:
EXECUTIVE
Howard J. Bush
___________________________________
<PAGE>
EXHIBIT 10.5
CHANGE IN CONTROL AGREEMENT
THIS AGREEMENT is entered into as of the 22nd day of March, 1996
by and between Brenco, Incorporated, a Virginia corporation (the
"Company"), and Donald E. Fitzsimmons ("Executive").
RECITALS
I. Executive currently serves as a key employee member of
management of the Company and his services and knowledge are valuable
to the Company.
II. The Board (as defined in Section 1) has determined that it
is in the best interests of the Company and its stockholders to secure
Executive's continued services and to ensure Executive's continued
dedication and objectivity in the event of any threat or occurrence
of, or negotiation or other action that could lead to, or create the
possibility of, a Change in Control (as defined in Section 1) of the
Company, without concern as to whether Executive might be hindered or
distracted by personal uncertainties and risks created by any such
possible Change in Control, and to encourage Executive's full
attention and dedication to the Company, the Board has authorized the
Company to enter into this Agreement.
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements herein contained, the Company and
Executive hereby agree as follows:
1. Definitions. As used in this Agreement, the following terms
shall have the respective meanings set forth below:
(a) "Board" means the Board of Directors of the Company.
(b) "Cause" means (1) a material breach by Executive of the
duties and responsibilities of Executive (other than as a result of
incapacity due to physical or mental illness) which is demonstrably
willful and deliberate on Executive's part, which is committed in bad
faith or without reasonable belief that such breach is in the best
interests of the Company and which is not remedied in a reasonable
period of time after receipt of written notice from the Company
specifying such breach or (2) the commission by Executive of a felony
involving moral turpitude. Cause shall not exist unless and until the
Company has delivered to Executive a copy of a resolution duly adopted
by three-quarters of the Board at a meeting of the Board called and
held for such purpose (after reasonable notice to Executive and an
opportunity for Executive, together with his counsel, to be heard
before the Board), finding that in the good faith opinion of the Board
the Executive was guilty of the conduct set forth in this Section 1(b)
and specifying the particulars thereof in detail.
<PAGE>
(c) "Change in Control" means:
(1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of
Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934,
as amended (the "Exchange Act"), of beneficial ownership within the
meaning of Rule 13d-3 promulgated under the Exchange Act, of twenty
percent (20%) or more of either (i) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common Stock")
or (ii) the combined voting power of the then outstanding securities
of the Company entitled to vote generally in the election of directors
(the "Outstanding Company Voting Securities"); provided, however, that
the following acquisitions shall not constitute a Change in Control:
(A) any acquisition by the Company, (B) any acquisition directly from
the Company, (C) any acquisition by, or benefit distribution from, an
employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company, (D) any
acquisition pursuant to any compensatory stock option or stock
purchase plan for employees, (E) any acquisition by any corporation
pursuant to a reorganization, merger or consolidation involving the
Company, if, immediately after such reorganization, merger or
consolidation, each of the conditions described in clauses (i), (ii)
and (iii) of subsection (3) of this Section (1)(c) shall be satisfied,
or (F) any acquisition by the Executive or any group of persons
including the Executive; or (G) the acquisition by members of the
Whitfield Family (as hereinafter defined), individually or
collectively, of any direct or indirect beneficial ownership in
addition to the individual or collective beneficial ownership of
members of the Whitfield Family which exists on the date hereof; and
provided further that, for purposes of clause (A), if any Person
(other than the Company or any employee benefit plan (or related
trust) sponsored or maintained by the Company or any corporation
controlled by the Company) shall become the beneficial owner of fifty
percent (50%) or more of the Outstanding Company Common Stock or fifty
percent (50%) or more of the Outstanding Company Voting Securities by
reason of an acquisition by the Company and such Person shall, after
such acquisition by the Company, become the beneficial owner of any
additional shares of the Outstanding Company Common Stock or any
additional Outstanding Voting Securities, such additional beneficial
ownership shall constitute a Change in Control;
(2) individuals who, as of the date hereof, constitute the
Board (the "Incumbent Board") cease for any reason to constitute at
least a majority of such Board; provided, however, that any individual
who becomes a director of the Company subsequent to the date hereof
whose election, or nomination for election by the Company's
stockholders, was approved by the vote of at least a majority of the
directors then comprising the Incumbent Board shall be deemed to have
been a member of the Incumbent Board; and provided further, that no
individual who was initially elected as a director of the Company as a
result of an actual or threatened election contest, as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the Exchange
Act, or any other actual or threatened solicitation of proxies or
consents by or on behalf of any Person other than the Board shall be
deemed to have been a member of the Incumbent Board;
<PAGE>
(3) approval by the stockholders of the Company of a
reorganization, merger or consolidation unless, in any such case,
immediately after such reorganization, merger or consolidation, (i)
more than fifty percent (50%) of the then outstanding shares of common
stock of the corporation resulting from such reorganization, merger or
consolidation and more than fifty percent (50%) of the combined voting
power of the then outstanding securities of such corporation entitled
to vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals or entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and the Outstanding Company
Voting Securities immediately prior to such reorganization, merger or
consolidation and in substantially the same proportions relative to
each other as their ownership, immediately prior to such
reorganization, merger or consolidation, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the
case may be, (ii) no Person (other than the Company, any employee
benefit plan (or related trust) sponsored or maintained by the Company
or the corporation resulting from such reorganization, merger or
consolidation (or any corporation controlled by the Company), or any
Person which beneficially owned, immediately prior to such
reorganization, merger or consolidation, directly or indirectly,
twenty percent (20%) or more of the Outstanding Company Common Stock
or the Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, twenty percent (20%) or
more of the then outstanding shares of common stock of such
corporation or twenty percent (20%) or more of the combined voting
power of the then outstanding securities of such corporation entitled
to vote generally in the election of directors and (iii) 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 action of the Board providing for such
reorganization, merger or consolidation; or
(4) approval by the stockholders of the Company of (i) a
plan of complete liquidation or dissolution of the Company or (ii) 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,
immediately after such sale or other disposition, (A) more than fifty
percent (50%) of the then outstanding shares of common stock thereof
and more than fifty percent (50%) of the combined voting power of the
then outstanding securities thereof entitled to vote generally in the
election of directors is then beneficially owned, directly or
indirectly, by all or substantially all of the individuals and
entities who were the beneficial owners, respectively, of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities immediately prior to such sale or other disposition and in
substantially the same proportions relative to each other as their
ownership, immediately prior to such sale or other disposition, of the
Outstanding Company Common Stock and the Outstanding Company Voting
Securities, as the case may be, (B) no Person (other than the Company,
any employee benefit plan (or related trust) sponsored or maintained
by the Company or such corporation (or any corporation controlled by
the Company), or any Person which beneficially owned, immediately
prior to such sale or other disposition, directly or indirectly,
twenty percent (20%) or more of the Outstanding Company Common Stock
or the Outstanding Company Voting Securities, as
<PAGE>
the case may be) beneficially owns, directly or indirectly, twenty
percent (20%) or more of the then outstanding shares of common stock
thereof or twenty percent (20%) or more of the combined voting power
of the then outstanding securities thereof entitled to vote generally
in the election of directors and (C) at least a majority of the
members of the board of directors thereof were members of the
Incumbent Board at the time of the execution of the initial agreement
or action of the Board providing for such sale or other disposition.
For purposes of Section 1(c)(1), "Whitfield Family" shall mean (I)
Needham B. Whitfield and members of his "immediate family" (as that
term is defined in Rule 16a-1(e) under the Exchange Act), (ii) Anne
Whitfield Kenny and members of her immediate family, (iii) the Estate
of Mildred F. Whitfield and (iv) and in each of the foregoing
instances, their respective personal or legal representatives,
executors, administrators, successors, heirs, distributees and
legatees.
Notwithstanding anything contained in the Agreement to the
contrary, it is understood that the collective beneficial ownership of
members of the Whitfield Family as of the date hereof shall not
constitute, or be construed or deemed to constitute, a Change of
Control.
Furthermore, notwithstanding anything contained in this Agreement
to the contrary, if Executive's employment is terminated prior to a
Change in Control and Executive reasonably demonstrates that such
termination was at the request of a third party who has indicated an
intention or taken steps reasonably calculated to effect a Change in
Control (a "Third Party") who effectuates a Change in Control, then
for all purposes of this Agreement, the date of a Change in Control
shall mean the date immediately prior to the date of such termination
of Executive's employment.
(d) "Company" means Brenco, Incorporated, a Virginia
corporation.
(e) "Date of Termination" means (1) the effective date on
which Executive's employment by the Company terminates as specified in
a prior written notice by the Company or Executive, as the case may
be, to the other, delivered pursuant to Section 11 or (2) if
Executive's employment by the Company terminates by reason of death,
the date of death of Executive.
(f) "Good Reason" means, without Executive's express
written consent, the occurrence of any of the following events after a
Change in Control:
(1) (i) the assignment to Executive of any duties
inconsistent in any material adverse respect with Executive's
position(s), duties, responsibilities or status with the Company
immediately prior to such Change in Control, (ii) a material adverse
change in Executive's reporting responsibilities, titles or offices
with the Company as in effect immediately prior to such Change in
Control or (iii) any removal or involuntary termination of Executive
from the Company otherwise than as expressly permitted by this
Agreement or any failure to re-elect Executive to any position with
the Company held by Executive immediately prior to such Change in
Control;
<PAGE>
(2) a reduction by the Company in Executive's rate of
annual base salary as in effect immediately prior to such Change in
Control or as the same has been increased thereafter;
(3) any requirement of the Company that Executive (i) be
based anywhere more than thirty-five miles from the facility where
Executive is located at the time of the Change in Control;
(4) the failure of the Company to (i) continue in effect
any employee benefit plan or compensation plan in which Executive is
participating immediately prior to such Change in Control, unless
Executive is permitted to participate in other plans providing
Executive with substantially comparable benefits, or the taking of any
action by the Company which would adversely affect Executive's
participation in or materially reduce Executive's benefits under any
such plan, (ii) provide Executive and Executive's dependents with
welfare benefits (including, without limitation, medical,
prescription, dental, disability, salary continuance, employee life,
group life, accidental death and travel accident insurance plans and
programs) in accordance with the most favorable plans, practices,
programs and policies of the Company and its affiliated companies in
effect for Executive immediately prior to such Change in Control,
(iii) provide fringe benefits in accordance with the most favorable
plans, practices, programs and policies of the Company and its
affiliated companies in effect for Executive immediately prior to such
Change in Control, or (iv) provide Executive with paid vacation in
accordance with the most favorable plans, policies, programs and
practices of the Company and its affiliated companies as in effect for
Executive immediately prior to such Change in Control; or
(5) the failure of the Company to obtain the assumption
agreement from any successor as contemplated in Section 10(b).
In addition, a termination by Executive of his employment for any
reason during the 30-day period immediately following the first
anniversary of the date of commencement of the Termination Period
shall be deemed to be termination by Executive for Good Reason. For
purposes of this Agreement, any good faith determination of Good
Reason made by Executive shall be conclusive; provided, however, that
an isolated, insubstantial and inadvertent action taken in good faith
and which is remedied by the Company promptly after receipt of notice
thereof given by Executive shall not constitute Good Reason. Any
event or condition described in this Section 1(f)(1) through (5) which
occurs prior to a Change in Control, but was at the request of a Third
Party who effectuates a Change in Control, shall constitute Good
Reason following a Change in Control for purposes of this Agreement
notwithstanding that it occurred prior to the Change in Control.
(g) "Nonqualifying Termination" means a termination of
Executive's employment (1) by the Company for Cause, (2) by Executive
for any reason other than a Good Reason, (3) as a result of
Executive's death, (4) by the Company due to Executive's absence from
his duties with the Company on a full-time basis for at least one
hundred eighty consecutive days as a result of Executive's incapacity
due to physical or mental illness or (5) as a result of Executive's
lawful mandatory retirement or (6) Executive's voluntary retirement
<PAGE>
pursuant to any retirement incentive plan of the Company. The parties
hereto expressly understand and agree that a termination by Executive
of his employment in accordance with the first sentence of the second
paragraph of Section 1(f) shall be deemed to be a termination by the
Executive for Good Reason and thus shall not be a Nonqualifying
Termination.
(h) "Pension Plan" means the Company's defined benefit
pension plan currently known as the "Brenco Retirement Plan" or any
successor plan and any other employee benefit plans of the Company
that require any minimum period of employment as a condition to the
receipt of retirement benefits thereunder.
(i) "Termination Period" means the period of time beginning
with a Change in Control and ending on the earliest to occur of (1)
Executive's 62nd birthday, (2) Executive's death, and (3) two years
following such Change in Control.
2. Obligations of Executive. Executive agrees that in the
event any person or group attempts a Change in Control, he shall not
voluntarily leave the employ of the Company without Good Reason (a)
until such attempted Change in Control terminates or (b) if a Change
in Control shall occur, until ninety days following such Change in
Control. For purposes of the foregoing subsection (a), Good Reason
shall be determined as if a Change in Control had occurred when such
attempted Change in Control became known to the Board.
3. Payments Upon Termination of Employment.
(a) If during the Termination Period the employment of
Executive shall terminate, other than by reason of a Nonqualifying
Termination, then the Company shall pay to Executive (or Executive's
beneficiary or estate) within thirty days following the Date of
Termination, as compensation for services rendered to the Company:
(1) a lump-sum cash amount equal to the sum of (i)
Executive's full annual base salary from the Company and its
affiliated companies through the Date of Termination, to the extent
not theretofore paid, (ii) Executive's annual bonus in an amount at
least equal to the greatest of (A) the average bonus (annualized for
any fiscal year consisting of less than twelve full months or with
respect to which Executive has been employed by the Company for less
than twelve full months) paid or payable, including by reason of any
deferral, to Executive by the Company and its affiliated companies in
respect of the three fiscal years of the Company (or such portion
thereof during which Executive performed services for the Company if
Executive shall have been employed by the Company for less than such
three fiscal year period) immediately preceding the fiscal year in
which the Change in Control occurs, or (B) 50% of Executive's target
bonus for the fiscal year in which the Change in Control occurs, or
(C) 50% of Executive's target bonus for the fiscal year in which
Executive's Date of Termination occurs, multiplied by (D) a fraction,
the numerator of which is the number of days in the fiscal year in
which the Date of Termination occurs through the Date of Termination
and the denominator of which is three hundred sixty-five or three
hundred sixty-six, as applicable, and (iii) any compensation
previously deferred by Executive other than pursuant to a tax-
<PAGE>
qualified plan (together with any interest and earnings thereon) and
any accrued vacation pay, in each case to the extent not theretofore
paid; plus
(2) a lump-sum cash amount equal to (i) one times
Executive's highest annual rate of base salary from the Company and
its affiliated companies in effect during the twelve-month period
prior to the Date of Termination; provided, however, that in the event
there are fewer than twelve whole months remaining from the Date of
Termination to the date of Executive's 62nd birthday, the amount
payable under this Section 3(a) (2) shall be calculated by multiplying
the amount otherwise payable by a fraction the numerator of which is
the number of months, including a partial month (with a partial month
being expressed as a fraction the numerator of which is the number of
days remaining in such month and the denominator of which is the
number of days in such month), so remaining and the denominator of
which is twelve; provided further, that any amount paid pursuant to
this Section 3(a) (2) shall be paid in lieu of any other amount of
severance relating to salary or bonus compensation to be received by
Executive upon termination of employment of Executive under any
severance plan, policy, employment agreement or arrangement of the
Company; and provided further that in the event of a termination of
employment during the 30-day period immediately following the first
anniversary of the date of commencement of the Termination Period in
accordance with the last paragraph of Section 1(f) hereof, the amount
payable under this Section 3(a)(2) shall be reduced by one-half.
(b) (1) In addition to the payments to be made pursuant to
paragraph (a) of this Section 3, if on the Date of Termination other
than by reason of a Nonqualifying Termination, Executive shall not be
fully vested in his accrued benefit under the Pension Plan, the
Company shall pay to Executive within thirty days following the Date
of Termination a lump sum cash amount equal to the actuarial
equivalent of his unvested accrued benefit under the Brenco Retirement
Plan as of such date. Such lump sum cash amount shall be computed
using the same actuarial methods and assumptions then in use for
purposes of computing benefits under the Brenco Retirement Plan,
provided that the interest rate used in making such computation shall
not be greater than the interest rate permitted under Section 417(e)
of the Internal Revenue Code of 1986, as amended (the "Code").
(2) In addition to the payments to be made pursuant to paragraph
(a) of this Section 3, if on the Date of Termination other than by
reason of a Nonqualifying Termination, Executive shall not be fully
vested in the employer contributions made on his behalf under any
defined contribution plan of the Company, the Company shall pay to
Executive within thirty days following the Date of Termination a lump
sum cash amount equal to the value of the unvested portion of such
employer contributions; provided, however, that if any payment
pursuant to this Section 3(b) (2) may or would result in such payment
being deemed a transaction which is subject to Section 16(b) of the
Exchange Act, the Company shall make such payment so as to meet the
conditions for an exemption from such Section 16(b) as set forth in
the rules (and interpretative and no-action letters relating thereto)
under Section 16 of the Exchange Act. The value of any such unvested
employer contributions shall be determined as of the Date of
<PAGE>
Termination; provided that for purposes of valuing common stock of the
Company that may be a part of any such plan, if the common stock of
the Company is traded on a national securities exchange or The Nasdaq
National Market on the Date of Termination, the value of a share of
common stock of the Company shall be the closing price on the national
securities exchange or NASDAQ on the Date of Termination or, if such
date is not a trading day, on the immediately preceding trading day.
(3) For a period of one year commencing on the Date of
Termination, the Company shall continue to keep in full force and
effect (or otherwise provide) all policies of medical, accident,
disability and life insurance with respect to Executive and his
dependents with the same level of coverage, upon the same terms and
otherwise to the same extent as such policies shall have been in
effect immediately prior to the Date of Termination (or, if more
favorable to Executive, immediately prior to the Change in Control),
and the Company and Executive shall share the costs of the
continuation of such insurance coverage in the same proportion as such
costs were shared immediately prior to the Date of Termination.
(c) If during the Termination Period the employment of
Executive shall terminate by reason of a Nonqualifying Termination,
then the Company shall pay to Executive within thirty days following
the Date of Termination, a cash amount equal to the sum of (1)
Executive's full annual base salary from the Company through the Date
of Termination, to the extent not theretofore paid and (2) any
compensation previously deferred by Executive other than pursuant to a
tax-qualified plan (together with any interest and earnings thereon)
and any accrued vacation pay, in each case to the extent not
theretofore paid.
4. Excise Tax Limitation. (a) Notwithstanding anything
contained in this Agreement or any other agreement or plan to the
contrary, the payments and benefits provided to, or for the benefit
of, Executive under this Agreement or under any other plan or
agreement which became payable or are taken into account as a result
of the Change in Control (the "Payments") shall be reduced (but not
below zero) to the extent necessary so that no payment to be made, or
benefit to be provided, to Executive or for his benefit under this
Agreement or any other plan or agreement shall be subject to the
imposition of an excise tax under Section 4999 of the Code (such
reduced amount is hereinafter referred to as the "Limited Payment
Amount"). Unless Executive shall have given prior written notice
specifying a different order to the Company, the Company shall reduce
or eliminate the Payments to Executive by first reducing or
eliminating those payments or benefits which are not payable in cash
and then by reducing or eliminating cash payments, in each case in
reverse order beginning with payments or benefits which are to be paid
the farthest in time from the Determination (as hereinafter defined).
Any notice given by Executive pursuant to the preceding sentence shall
take precedence over the provisions of any other plan, arrangement or
agreement governing Executive's rights and entitlements to any
benefits or compensation.
<PAGE>
(b) All determinations required to be made under this
Section 4 shall be made by the Company's public accounting firm (the
"Accounting Firm"). The Accounting Firm shall provide its
calculations, together with detailed supporting documentation, both to
the Company and Executive within fifteen days after the receipt of
notice from the Company that there has been a Payment (or at such
earlier times as is requested by the Company) and, with respect to any
Limited Payment Amount, a reasonable opinion to Executive that he is
not required to report any excise tax on his federal income tax return
with respect to the Limited Payment Amount (collectively, the
"Determination"). In the event that the Accounting Firm is serving as
an accountant or auditor for the individual, entity or group effecting
the Change in Control, Executive shall appoint another nationally
recognized public accounting firm to make the determination required
hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). All fees, costs and expenses (including,
but not limited to, the costs of retaining experts) of the Accounting
Firm shall be borne by the Company. The Determination by the
Accounting Firm shall be binding upon the Company and Executive
(except as provided in paragraph (c) below).
(c) If it is established pursuant to a final determination
of a court or an Internal Revenue Service (the "IRS") proceeding which
has been finally and conclusively resolved, that Payments have been
made to, or provided for the benefit of, Executive by the Company,
which are in excess of the limitations provided in Section 4
(hereinafter referred to as an "Excess Payment"), such Excess Payment
shall be deemed for all purposes to be a loan to Executive made on the
date Executive received the Excess Payment and Executive shall repay
the Excess Payment to the Company on demand, together with interest on
the Excess Payment at the applicable federal rate (as defined in
Section 1274(d) of the Code) from the date of Executive's receipt
of such Excess Payment until the date of such repayment. As a result
of the uncertainty in the application of Section 4999 of the Code at
the time of the Determination, it is possible that Payments which will
not have been made by the Company should have been made (an
"Underpayment"), consistent with the calculations required to be made
under this Section 4. In the event that it is determined (i) by the
Accounting Firm, the Company (which shall include the position taken
by the Company, or together with its consolidated group, on its
federal income tax return) or the IRS or (ii) pursuant to a
determination by a court, that an Underpayment has occurred, the
Company shall pay an amount equal to such Underpayment to Executive
within ten days of such determination together with interest on such
amount at the applicable federal rate from the date such amount would
have been paid to Executive until the date of payment.
5. Withholding Taxes. The Company may withhold from all
payments due to Executive (or his beneficiary or estate) hereunder all
taxes which, by applicable federal, state, local or other law, the
Company is required to withhold therefrom.
6. Reimbursement of Expenses. If any contest or dispute shall
arise under this Agreement involving termination of Executive's
employment with the Company or involving the failure or refusal of the
Company to perform fully in accordance with the terms hereof, the
<PAGE>
Company shall reimburse Executive, on a current basis, for all legal
fees and expenses, if any, incurred by Executive in connection with
such contest or dispute, subject to the conditions set forth in the
following sentences, together with interest in an amount equal to the
prime rate of Crestar Bank from time to time in effect, but in no
event higher than the maximum legal rate permissible under applicable
law, such interest to accrue from the date the Company receives
Executive's statement for such fees and expenses through the date of
payment thereof. The Company shall have no obligation to reimburse
Executive for legal fees and expenses pursuant to this Section 6 in
the event that a court of competent jurisdiction ultimately determines
that Executive's position asserted in any contest or dispute litigated
by Executive was without merit. Executive hereby agrees that, in the
event of such a determination, Executive will repay the Company the
amount of any legal fees or expenses advanced by
the Company to Executive prior to such determination.
7. Termination of Agreement. (a) This Agreement shall be
effective on the date hereof and shall continue until terminated by
the Company as provided in paragraph (b) of this Section 7; provided,
however, that this Agreement shall terminate in any event upon the
first to occur of (i) Executive's 62nd birthday, (ii) Executive's
death or (iii) termination of Executive's Employment with the Company
prior to a Change in Control (except as otherwise provided hereunder).
(b) The Company shall have the right prior to a Change in
Control, in its sole discretion, pursuant to action by the Board, to
approve the termination of this Agreement, which termination shall not
become effective until the date fixed by the Board for such
termination, which date shall be at least one hundred twenty days
after notice thereunder is given by the Company to Executive in
accordance with Section 11; provided, however, that no such action
shall be taken by the Board during any period of time when the Board
has knowledge that any person has taken steps reasonably calculated to
effect a Change in Control until, in the opinion of the Board, such
person has abandoned or terminated its efforts to effect a Change in
Control; and provided, further, that in no event shall this Agreement
be terminated without the consent of Executive following a Change in
Control.
8. Scope of Agreement. Nothing in this Agreement shall be
deemed to entitle Executive to continued employment with the Company
or its subsidiaries, and if Executive's employment with the Company
shall terminate prior to a Change in Control, Executive shall have no
further rights under this Agreement; provided, however, that any
termination of Executive's employment during the two-year period
following a Change in Control shall be subject to all of the
provisions of this Agreement.
9. Confidential Information. 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 Executive during Executive's
employment by the Company or any of its affiliated companies and which
shall not be or become public knowledge (other than by acts by
<PAGE>
Executive or representatives of Executive in violation of this
Agreement). After termination of Executive's employment with the
Company, Executive shall not, without the prior written consent of the
Company, communicate or divulge any such information, knowledge or
data to anyone other than the Company and those designated by it. In
no event shall an asserted violation of the provisions of this Section
9 constitute a basis for deferring or withholding any amounts
otherwise payable to Executive under this Agreement.
10. Successors; Binding Agreement.
(a) This Agreement shall not be terminated by any merger or
consolidation of the Company whereby the Company is or is not the
surviving or resulting corporation or as a result of any transfer of
all or substantially all of the assets of the Company. In the event
of any such merger, consolidation or transfer of assets, the
provisions of this Agreement shall be binding upon the surviving or
resulting corporation or the person or entity to which such assets are
transferred.
(b) The Company agrees that concurrently with any merger,
consolidation or transfer of assets referred to in paragraph (a) of
this Section 10, it will cause any successor or transferee
unconditionally to assume, by written instrument delivered to
Executive (or his beneficiary or estate), all of the obligations of
the Company hereunder. Failure of the Company to obtain such
assumption prior to the effectiveness of any such merger,
consolidation or transfer of assets shall be a breach of this
Agreement and shall constitute Good Reason hereunder and shall entitle
Executive to compensation and other benefits from the Company in the
same amount and on the same terms as Executive would be entitled
hereunder if Executive's employment were terminated following a Change
in Control other than by reason of a Nonqualifying Termination. For
purposes of implementing the foregoing, the date on which any such
merger, consolidation or transfer becomes effective shall be deemed
the date Good Reason occurs, and shall be the Date of Termination if
requested by Executive.
(c) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees
and legatees. If Executive shall die while any amounts would be
payable to Executive hereunder had Executive continued to live, all
such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of this Agreement to such person or persons
appointed in writing by Executive to receive such amounts or, if no
person is so appointed, to Executive's estate.
11. Notice. (a) For purposes of this Agreement, all notices and
other communications required or permitted hereunder shall be in
writing and shall be deemed to have been duly given when delivered or
five days after deposit in the United States mail, certified and
return receipt requested, postage prepaid, addressed as follows:
<PAGE>
If to Executive:
________________
________________
________________
________________
If to the Company:
Brenco, Incorporated
Suite 201
One Park West Circle
Midlothian, VA 23113
Attn: Corporate Secretary
or to such other address as either party may have furnished to the
other in writing in accordance therewith, except that notices of
change of address shall be effective only upon receipt.
(b) A written notice of Executive's Date of Termination by
the Company or Executive, as the case may be, to the other, shall (i)
indicate the specific termination provision in this Agreement relied
upon, (ii) to the extent applicable, set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination
of Executive's employment under the provision so indicated and (iii)
specify the Termination Date (which date shall be not less than
fifteen days after the giving of such notice). The failure by
Executive or the Company to set forth in such notice any fact or
circumstance which contributes to a showing of Good Reason or Cause
shall not waive any right of Executive or the Company hereunder or
preclude Executive or the Company from asserting such fact or
circumstance in enforcing Executive's or the Company's rights
hereunder.
12. Full Settlement; Resolution of Disputes. (a) The Company's
obligation to make any payments provided for in this Agreement and
otherwise to perform its obligations hereunder shall not be affected
by any set-off, counterclaim, recoupment, defense or other claim,
right or action which the Company may have against Executive or
others. In no event shall Executive be obligated to seek other
employment or take other action by way of mitigation of the amounts
payable to Executive under any of the provisions of this Agreement
and, such amounts shall not be reduced whether or not Executive
obtains other employment.
(b) If there shall be any dispute between the Company and
Executive in the event of any termination of Executive's employment,
then, unless and until there is a final, nonappealable judgment by a
court of competent jurisdiction declaring that such termination was
for Cause, that the determination by Executive of the existence of
Good Reason was not made in good faith, or that the Company is not
otherwise obligated to pay any amount or provide any benefit to
Executive and his dependents or other beneficiaries, as the case may
be, under paragraphs (a) and (b) of Section 3, the Company shall pay
all amounts, and provide all benefits, to Executive and his dependents
<PAGE>
or other beneficiaries, as the case may be, that the Company would be
required to pay or provide pursuant to paragraphs (a) and (b) of
Section 3 as though such termination were by the Company without Cause
or by Executive with Good Reason; 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
Executive to repay all such amounts to which Executive is ultimately
adjudged by such court not to be entitled.
13. Employment with Subsidiaries. Employment with the Company
for purposes of this Agreement shall include employment with any
corporation or other entity in which the Company has a direct or
indirect ownership interest of 50% or more of the total combined
voting power of the then outstanding securities of such corporation or
other entity entitled to vote generally in the election of directors.
14. Governing Law; Validity. The interpretation, construction
and performance of this Agreement shall be governed by and construed
and enforced in accordance with the internal laws of the Commonwealth
of Virginia without regard to the principle of conflicts of laws. The
invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision
of this Agreement, which other provisions shall remain in full force
and effect.
15. Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original and all
of which together shall constitute one and the same instrument.
16. Miscellaneous. No provision of this Agreement may be
modified or waived unless such modification or waiver is agreed to in
writing and signed by Executive and by a duly authorized officer of
the Company. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time. Failure by
Executive or the Company to insist upon strict compliance with any
provision of this Agreement or to assert any right Executive or the
Company may have hereunder, including without limitation, the right of
Executive to terminate employment for Good Reason, shall not be deemed
to be a waiver of such provision or right or any other provision or
right of this Agreement. The rights of, and benefits payable to,
Executive, his estate or his beneficiaries pursuant to this Agreement
are in addition to any rights of, or benefits payable to, Executives,
his estate or his beneficiaries under any other employee benefit plan
or compensation program of the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by a duly authorized officer of the Company and Executive has
executed this Agreement as of the day and year first above written.
<PAGE>
BRENCO, INCORPORATED
By:
Title:
EXECUTIVE
Donald E. Fitzsimmons
___________________________________
<PAGE>
EXHIBIT 10.6
BRENCO, INCORPORATED
1987 Restricted Stock Plan
As Amended and Restated Effective March 22, 1996
Section 1. Establishment, Purpose, and Effective Date of Plan
1.1 Establishment. Brenco, Incorporated hereby establishes a
stock incentive plan for key Employees, as described herein, which
shall be known as the Brenco, Incorporated 1987 Restricted Stock Plan
(hereinafter called the "Plan").
1.2 Purpose. The purpose of the Plan is to enable the Company
to attract, retain, and motivate key Employees who provide valuable
services to the Company, and to provide such Employees with a means of
acquiring or increasing a proprietary interest in the Company so that
they will have an increased incentive to work for the long-term
success of the Company.
1.3 Shareholder Approval. The Plan shall become effective as of
April 16, 1987, subject to approval by the shareholders of the
Company.
Section 2. Definitions
Whenever used herein, the following terms shall have the meanings
set forth below:
(a) "Board" means the Board of Directors of Brenco,
Incorporated.
(b) "Change in Control" means the occurrence of a "Change in
Control" as defined in the Change in Control Agreements entered into
by the Company with certain Employees dated as of March 22, 1996, as
amended from time to time.
(c) "Committee" means a Committee of the Board consisting of
three or more members of the Board who are not, and who have not been
at any time within one year prior to appointment to the Committee,
eligible to receive Stock under the Plan, or Stock, stock options, or
stock appreciation rights under another company plan.
(d) "Company" means Brenco, Incorporated, a Virginia
corporation, as well as any subsidiary more than 50% of whose total
combined voting stock of all classes is owned by Brenco, Incorporated
either directly or through one or more of its subsidiaries.
(e) "Employee" means any key executive in charge of a principal
division, business unit, or department of the Company, and any other
individual who performs similar managerial and professional functions
for the Company.
(f) "Grantee" means an Employee who shall have received a grant
of restricted Stock under the Plan.
<PAGE>
(g) "Period of Restriction" means the period during which the
transfer of shares of restricted Stock granted under the Plan is
restricted pursuant to Section 7 hereof.
(h) "Stock" means the Common Stock, par value of $1.00 per
share, of the Company.
Section 3. Eligibility and Participation
Grantees shall be limited to Employees as determined by the
Committee.
Section 4. Administration
The Committee shall be responsible for the administration of the
Plan. The Committee, by majority action thereof, is authorized to
interpret the Plan, to prescribe, amend, and rescind rules and
regulations relating to the Plan, provide for conditions and
assurances deemed necessary or advisable to protect the interests of
the Company, and to make all other determinations necessary or
advisable for the administration of the Plan, but only to the extent
not contrary to the express provisions of the Plan. Determinations,
interpretations, or other actions made or taken by the Committee
pursuant to the provisions of the Plan shall be final and binding and
conclusive for all purposes and upon all persons whomsoever.
Section 5. Stock Subject to the Plan
5.1 Number. The total number of shares of Stock that may be
issued under the Plan may not exceed 200,000 subject to adjustment as
provided in Section 5.3. Those shares may consist, in whole or in
part, of authorized but unissued Stock or shares of Stock reacquired
by the Company, including shares purchased in the open market, not
reserved for any other purpose.
5.2 Unused Stock. In the event any shares of Stock subject to
grants made under the Plan are reacquired by the Company pursuant to
Section 8 of the Plan, such reacquired shares again shall become
available for issuance under the Plan.
5.3 Adjustments in Capitalization. In the event of
reorganization, recapitalization, stock split, stock dividend, merger,
consolidation, combination or exchange of shares, rights, offering or
any other change affecting the Stock, the Committee may make, subject
to approval of the Board, appropriate changes in the aggregate number
of shares issuable under this Plan, and in the number of shares
subject to restricted Stock grants then outstanding under this Plan.
Section 6. Duration of the Plan
Subject to the Board's right to terminate the Plan pursuant to
Section 10 hereof, the Plan shall remain in effect until all Stock
acquired by Grantees pursuant to the provisions of the Plan shall have
been released from restrictions pursuant to Section 7.4, Section 8, or
Section 11 hereof. Notwithstanding the foregoing, no awards of Stock
may be granted under the Plan after the tenth (10th) anniversary of
the Plan's effective date.
<PAGE>
Section 7. Restricted Stock
7.1 Grant of Restricted Stock. Subject to Section 3 and 5.1
hereof, the Committee, at any time and from time to time, may grant
shares of restricted Stock under the Plan to such Employees and in
such amounts as it shall determine. Each grant of restricted Stock
shall be in writing and signed by a duly authorized officer of the
Company. Certificates for the Stock so granted shall be registered in
the name of the Grantee and deposited by him, together with a stock
power endorsed in blank, with the Company under such restrictions as
the Committee shall determine pursuant to the provisions of Section 7.
Upon release or expiration of such restrictions, the Company shall
redeliver to the Grantee the Stock so deposited by him.
7.2 Transferability. Except as contemplated by Sections 8, 9.2,
and 11 hereof, the shares of restricted Stock granted hereunder may
not be sold, transferred, pledged, assigned, or otherwise alienated or
hypothecated for the Period of Restriction determined by the Committee
in accordance with Section 7.3 which shall be specified in writing in
the restricted Stock grant.
7.3 Period of Restriction. The Period of Restriction for each
restricted Stock grant shall not exceed five years or such lesser
period as may be necessary to satisfy any performance goals which may
be specified by the Committee; provided, however, that except as
otherwise provided in Section 7.5, 8, and 11 hereof, the Period of
Restriction shall not be less than two years.
7.4 Removal of Restrictions. Except as otherwise provided in
Sections 7.5, 8, and 11 hereof, shares of restricted Stock covered by
each restricted Stock grant made under this Plan shall become freely
transferable by the Grantee after the last day of the Period of
Restriction.
7.5 Other Restrictions. The Committee shall impose such other
restrictions on any shares granted pursuant to the Plan as it may deem
advisable including, without limitation, restrictions under applicable
federal or state securities laws, and may legend the Stock
certificate(s) to give appropriate notice of such restrictions.
7.6 Certificate Legend. In addition to any legends placed on
certificates pursuant to Section 7.5 hereof, each certificate
representing shares of restricted Stock granted pursuant to this Plan
shall bear the following legend:
"The sale or other transfer of shares of Stock represented by
this certificate, whether voluntary, involuntary, or by operation of
law, is subject to certain restrictions on transfer set forth in the
1987 Brenco, Incorporated Restricted Stock Plan, rules of
administration adopted pursuant to such Plan, and a restricted Stock
grant dated . . . . A copy of the Plan, such rules, and such
restricted Stock grant may be obtained from the Secretary of the
Company."
Once the shares are released from the restrictions pursuant to Section
7.4 hereof, the Grantee shall be entitled to have the legend required
by this Section 7.6 removed from his Stock certificate(s).
<PAGE>
7.7 Voting Rights. During the Period of Restriction, Grantees
holding shares of restricted Stock granted hereunder may exercise full
voting rights with respect to those shares.
7.8 Dividends and Other Distributions. During the Period of
Restriction, Grantees holding shares of restricted Stock granted
hereunder shall be entitled to receive currently all dividends and
other distributions paid with respect to those shares while they are
so held. If any such dividends or distributions are paid in shares,
the shares shall be registered in the name of the Grantee and
deposited with the Company as provided in Section 7.1 hereof and the
shares shall be subject to the same restrictions on transferability as
the shares of restricted Stock with respect to which they were paid.
Section 8. Termination of Employment
8.1 Termination of Employment Due to Death or Permanent and
Total Disability. In the event that the employment with the Company
of a Grantee is terminated because of death or permanent and total
disability, any remaining Period of Restriction applicable to the
restricted Stock of such Grantee pursuant to Section 7 hereof shall
automatically terminate and, except as otherwise provided in Section
7.5, the shares of Stock shall thereby be free of restrictions and
freely transferable.
8.2 Termination of Employment Due to Retirement. In the event
the employment with the Company of a Grantee is terminated because of
retirement as defined in the Company's Retirement Plan during the
Period of Restriction, the restrictions applicable to the shares of
restricted Stock of such Grantee pursuant to Section 7 hereof shall
terminate, in the sole discretion of the Committee, with respect to a
number of shares (rounded to the nearest whole number) up to the total
number of restricted shares granted to such Grantee, multiplied by the
number of full months which have elapsed since the date of grant
divided by the maximum number of full months of the Period of
Restriction. All remaining shares shall be forfeited and returned to
the Company; provided, however, that the Committee may, in its sole
discretion, waive the restrictions remaining on any or all such
remaining shares.
8.3 Termination of Employment for Reasons Other Than Death,
Disability, or Retirement. In the event that the employment with the
Company of a Grantee is terminated for any reason other than those set
forth in Sections 8.1 and 8.2 hereof during the Period Of Restriction,
then any shares of restricted Stock of such Grantee still subject to
restrictions at the date of such termination shall automatically be
forfeited and returned to the Company; provided, however, that, in the
event of an involuntary termination of the employment of a Grantee by
the Company, the Committee may, in its sole discretion, waive the
automatic forfeiture of any or all such shares and/or may add such new
restrictions to such shares as it deems appropriate.
Section 9. Rights of Employees; Recipients of Grants
9.1 Employment. Nothing in this Plan or in any grant of
restricted Stock shall interfere with or limit in any way the right of
the Company to terminate any Employee's or Grantee's employment at any
time, nor confer upon any Employee or Grantee any right to continue in
the employ of the Company.
<PAGE>
9.2 Nontransferability of Restricted Stock. No rights or shares
of restricted Stock granted under the Plan may be sold, transferred,
pledged, assigned, or otherwise alienated or hypothecated, otherwise
than by will or by the laws of descent and distribution until the
termination of the applicable Period of Restriction. All rights
granted to a Grantee under the Plan shall be exercisable during his
lifetime only by such Grantee. Upon the death of a Grantee, his legal
representative or beneficiary may exercise his rights under the Plan.
Section 10. Amendment and Termination
The Board, upon recommendation of the Committee, at any time may
terminate, and at any time and from time to time and in any respect,
may amend or modify the Plan, provided, however, that no such action
of the Board, without approval of shareholders may:
(a) Increase the maximum number of shares of Stock that may be
issued under the Plan except as provided in Section 5.3 of the Plan.
(b) Extend the period during which shares of Stock may be
granted under the Plan.
(c) Modify the requirements as to eligibility for participation
under the Plan.
(d) Increase materially the benefits accruing to Grantees under
the Plan.
(e) Increase materially the cost of the Plan.
(f) Withdraw the administration of the Plan from the Committee.
(g) Change the provision in the Plan as to the qualification for
membership on the Committee.
No amendment, modification, or termination of the Plan shall in any
manner adversely affect any Stock theretofore granted under the Plan
without the consent of the Grantee.
Section 11. Change in Control
In the event of a Change in Control, all restrictions shall lapse
on shares of restricted Stock which have been granted under the Plan,
and thereafter such shares shall be freely transferable by the
Grantee, subject to applicable federal and state securities laws.
Section 12. Tax Withholding
The Company, as appropriate, shall have the right to withhold any
Federal, State, or local taxes required by law to be withheld with
respect to any awards under the Plan; the Grantee or other person
receiving such restricted Stock may be required to pay to the Company,
as appropriate, the amount of any such taxes which the Company is
required to withhold with respect to such restricted Stock.
<PAGE>
Section 13. Indemnification
Each person who is or shall have been a member of the Committee
or of the Board shall be indemnified and held harmless by the Company
from any loss, cost, liability, or expense that may be imposed upon or
reasonably incurred by him in connection with any claim, action, suit,
or proceeding to which he may be a party by reason or any action taken
or failure to act under the Plan. The foregoing right of
indemnification shall not be exclusive of any rights of
indemnification to which such persons may be entitled under the
Company's Articles of Incorporation or By-Laws, as a matter of law, or
otherwise, or any power that the Company may have to indemnify them or
hold them harmless.
Section 14. Governing Law
The Plan, and all grants and other documents delivered hereunder,
shall be construed in accordance with and governed by the laws of
Virginia.
Section 15. Expenses of Plan
The expenses of administering the Plan shall be borne by the
Company.
<PAGE>
EXHIBIT 10.7
BRENCO, INCORPORATED
1988 STOCK OPTION PLAN
As Amended and Restated Effective March 22, 1996
1. Definitions. The following terms shall have the meanings
set forth in this Paragraph unless the context requires a different
meaning:
1.1 "Agreement" means a written agreement (including any
amendment or supplement thereto) between Brenco and a Participant
specifying the terms and conditions of an Option or SAR granted to
such Participant.
1.2 "Board" means the Board of Directors of Brenco.
1.3 "Change in Control" means the occurrence of a "Change in
Control" as defined in the Change in Control Agreements entered into
by the Company with certain employees of the Company as of March 22,
1996, as amended from time to time.
1.4 "Code" means the Internal Revenue Code of 1986, as amended.
1.5 "Committee" means a committee, consisting of not less than
three persons appointed by the Board to administer the Plan. No
member of the Committee shall be eligible to participate, and no
person shall become a member of the Committee if, within one year
prior thereto, he shall have been eligible to participate in the Plan
or in any other plan of Brenco or any Subsidiary entitling the
participants therein to acquire Options or SARs of Brenco. A majority
of the members of the Committee shall constitute a quorum, and all
actions of the Committee shall be taken by a majority of those members
voting.
In the event that the Board chooses not to establish a Committee
to administer the Plan, the word "Committee" as used herein shall mean
the Board; provided, however, that any grants of awards under the Plan
may be made by the Board only if a majority of those acting are not
eligible to participate in the Plan or any other plan of Brenco or any
Subsidiary entitling the Participants therein to acquire Options or
SARs of Brenco.
1.6 "Common Stock" means the Common Stock of Brenco.
1.7 "Brenco" means Brenco, Incorporated, a Virginia Corporation.
1.8 "Fair Market Value" means, on any given date, the closing
sales price of Common Stock as quoted in the NASDAQ National Market
System, on the date in question if it is a trading date, or if not, on
the first trading day prior to such day. If the Common Stock is not
quoted in the NASDAQ National Market System, Fair Market Value shall
mean the mean between the closing bid and asked prices as reported by
NASDAQ on the date in question if it is a trading date, or if not, the
first trading date prior to such day. If either such valuation method
is inapplicable for any reason, the Fair Market Value shall be
determined by the Committee using any reasonable method in good faith.
<PAGE>
1.9 "Grant Date" means the date as of which an Option or SAR is
granted under the Plan.
1.10 "Incentive Stock Option" means an Option that qualifies as
an Incentive Stock Option under Section 422A of the Code.
1.11 "Non Qualified Stock Option" means an Option which is not an
Incentive Stock Option.
1.12 "Option" means the right of the holder to purchase from
Brenco a stated number of shares of Common Stock at the price set
forth in an Agreement, which right shall be designated as either an
Incentive Stock Option or Non Qualified Stock Option.
1.13 "Participant" means an employee of Brenco or a Subsidiary,
including an employee who is a member of the Board, who satisfies the
requirements of Paragraph 3 and is selected by the Committee to
receive an Option.
1.14 "Plan" means Brenco, Incorporated 1988 Stock Option Plan.
1.15 "SAR" means a stock appreciation right (which may be granted
only in conjunction with an Option) that entitles the holder to
receive, with respect to each share of Common Stock encompassed by the
exercise of such SAR, the increase in the Fair Market Value of such
shares to be payable in shares of Common Stock, subject to such
limitations in amounts as the Committee may designate in the
Agreement.
1.16 "Subsidiary" means any corporation at least 50% of the total
combined voting power of which is owned by Brenco, either directly or
through one or more of its Subsidiaries, within the meaning of Section
425(f) of the Code and rules and regulations thereunder.
2. Purpose. The Plan is intended to aid Brenco and its
Subsidiaries in attracting and retaining key executive officers and
management personnel with exceptional ability by enabling such
executive officers and management personnel to acquire a proprietary
interest in Brenco and to have an additional incentive to promote its
success, as well as to encourage them to remain in the employ of
Brenco or a Subsidiary.
3. Eligibility. Any executive officer or other key employee of
Brenco or one of its Subsidiaries is eligible to be granted one or
more Options or SARs if so employed at the time of such grant.
Directors of Brenco who are employees and are not members of the
Committee are eligible for awards under the Plan.
4. Shares Subject to Options or SARs. The maximum aggregate
number of shares of Common Stock with respect to which Options may be
granted under this Plan shall not exceed 1,100,000 shares, except as
may be adjusted pursuant to Paragraph 10. Upon the exercise of any
Option or SAR, Brenco may deliver to the Participant authorized but
unissued shares of Common Stock. If an Option is terminated, in whole
or in part, for any reason other than its exercise or the exercise of
a related SAR, the number of shares of Common Stock allocated to the
<PAGE>
Option or portion thereof may be reallocated to other Options and SARs
to be granted under this Plan. Shares which are subject to Options in
connection with which SARs also have been granted shall be counted
only once in applying the above aggregate share limitation.
5. Administration. The Plan shall be administered by the
Committee which shall have all the powers necessary for such
administration, including without limitation, the power:
(a) To determine, consistent with the terms and conditions of
the Plan, annually or otherwise from time to time, in consultation
with management of Brenco, (i) which executive officers and key
employees of Brenco and its Subsidiaries shall be Participants to whom
Options and SARs shall be granted; (ii) the number of shares which may
be purchased under each Option or with respect to which SARs may be
granted; (iii) the per share Option exercise price; (iv) the duration
of Options and SARs; (v) the time or times at which each Option or SAR
may be exercised and (vi) whether Options shall be Incentive Stock
Options or Nonqualified Stock Options;
(b) To interpret the Plan, to prescribe, amend and rescind
rules, regulations and guidelines relating to it, and to make all
other determinations necessary or advisable for its administration,
all of which decisions made or actions taken shall be binding and
conclusive; and
(c) To keep, or cause to be kept, appropriate records of all
determinations made and actions taken pursuant to the Plan.
The express grant in this Plan of any specific power to the
Committee shall not be construed as limiting any power or authority of
the Committee. No member of the Committee shall be liable for any act
done in good faith with respect to this Plan or any Agreement, Option
or SAR.
6. Terms and Conditions of Options. All Options and SARs
granted by the Committee shall be evidenced by Agreements in such
forms as the Committee from time to time shall approve, subject to the
following terms and conditions:
(a) Each Agreement shall state whether the Option granted is an
Incentive Stock Option or Nonqualified Stock Option and shall state
the number of shares as to which the Option or SAR pertains.
(b) The Option exercise price shall in no case be less than 100%
of the Fair Market Value of Common Stock on the Grant Date; provided,
however, that in the case of an Incentive Stock Option granted to an
individual who owns more than 10% of the combined voting power of all
classes of stock of Brenco or its Subsidiaries within the meaning of
Section 422A(b) (6) of the Code and the rules and regulations
thereunder, the Option exercise price shall be at least 110% of the
Fair Market Value on the Grant Date.
(c) Unless otherwise provided by the Committee, the term of each
Option shall be five (5) years from the Grant Date.
<PAGE>
(d) No Option shall be exercisable in whole or in part prior to
one (1) year from the Grant Date. Subject to the provisions of this
Paragraph 6(d) Options may be exercised as to all or, from time to
time, as to any part of the total number of shares as to which the
right to purchase has accrued, provided, however, that no Option may
be exercised at any one time as to less than 25 shares of Common Stock
unless any smaller number of shares represents the balance then
currently exercisable in which case such balance may be exercised
without regard to any minimum share limitation.
(e) No Option may be granted more than 10 years from the
effective date of the Plan.
(f) Each Option shall provide that it is not transferable by the
Participant otherwise than by will or the law of descent and
distribution, and shall be exercisable, during the Participant's
lifetime, only by the Participant.
(g) During the lifetime of a Participant hereunder, the Option
may be exercised only by him (or his guardian or other representative)
and then only if (i) on the exercise date, he has been in the employ
of the Brenco or one or more of its Subsidiaries, or a combination
thereof, continuously since the first date of his employment by Brenco
or one of its Subsidiaries or (ii) he has terminated his employment
and such termination was because of a permanent disability or
retirement under a retirement benefit plan of Brenco or of one of its
Subsidiaries; provided, however, that in the case of such total and
permanent disability or retirement under a retirement benefit plan of
Brenco or one of its Subsidiaries, the Participant shall only be
entitled to exercise the Option to the extent exercisable by the
Participant at the date of termination of employment because of such
permanent disability or retirement.
If the employment of a Participant terminates by death while in
the employ of Brenco or a Subsidiary, or if the employment of a
Participant terminates because of permanent disability or retirement
under a retirement benefit plan of Brenco or a Subsidiary and the
Participant dies thereafter, then within one (1) year after his death
his Option may be exercised to the extent that he was entitled to
exercise it on the date of his termination from employment by reason
of death, permanent disability or retirement, by the person or persons
to whom the Participant's rights under his Option shall pass by will
or by applicable law, of if no other person has such right, then by
his legal representative, subject, however, to the condition that no
Option shall be exercisable after the expiration of five (5) years
from the Grant Date. Except as provided in this subparagraph 6(g)
above, no Option may be exercised after termination of employment.
(h) Notwithstanding Section 6(d) hereof, in the event a Change
in Control occurs, any Option which has been held at least 6 months
from its Grant Date shall become immediately exercisable in whole or
in part.
<PAGE>
7. Limitations on Incentive Stock Options. Notwithstanding the
provisions of Paragraph 6, the aggregate Fair Market Value (determined
at the time the Incentive Stock Options are granted) of the Common
Stock with respect to which Incentive Stock Options granted under the
Plan are exercisable for the first time by the Participant during any
calendar year may not exceed $100,000 or such lesser or greater amount
as shall be specified in Section 422A of the Code and the rules and
regulations thereunder. Incentive Stock Options granted after
December 31, 1987 under this Plan and under all plans of Brenco and
any of its Subsidiaries shall be aggregated for purposes of this
limitation.
8. Exercise of Options. An Option may be exercised in whole or
in part by delivery to Brenco, at the office of its Secretary at
Petersburg, Virginia, of written notice of the exercise identifying
the Option and stating the number of shares with respect to which it
is being exercised, in such form as the Committee may prescribe,
accompanied by payment for the Common Stock with respect to which the
Option is exercised. Payment of the purchase price may be made in
cash or, with the consent of the Committee, by delivery of shares of
Common Stock owned by Participant valued at Fair Market Value on the
date of exercise of the Option, or, with the consent of the Committee,
a combination thereof.
9. Stock Appreciation Rights. The Committee may grant SARs in
connection with any Option (whether granted before or concurrently
with the SAR) with respect to the number of shares subject to the
Option or any lesser number of shares. The Committee shall determine
from among those eligible, the persons to whom, and the time or times
at which, SARs should be granted and the number of shares which should
be subject to SARs.
Each SAR granted under the Plan shall be evidenced by an
Agreement specifying the number of shares subject thereto and such
terms and conditions consistent with the Plan as the Committee shall
determine.
SARs shall expire no later than the expiration of the related
Option; shall be transferable only when and under the same conditions
as the related Option is transferable; shall be exercisable only when
the related Option is eligible to be exercised; and may not be
exercised unless the Fair Market Value of the Common Stock subject to
the related Option exceeds the exercise price of the Option. In no
event shall any SAR be exercisable for cash.
A SAR may be exercised in whole or in part upon the delivery to
Brenco of written notice of the exercise in such form as the Committee
may prescribe.
Upon the exercise of a SAR, the holder shall be entitled to the
amount by which the date of exercise Fair Market Value of the number
of shares of Common Stock as to which the SAR was exercised exceeds
the exercise price of the related Option for that number of shares.
<PAGE>
Payment to the holder shall be made in whole shares of Common
Stock, valued at Fair Market Value on the date of exercise, provided
that no fractional shares or cash in lieu of any such fractional share
shall be paid. The Committee shall not consent to any election for
settlement of SARs in cash in the case of any Participant.
Upon the exercise of a SAR, the number of shares of Common Stock
subject to the related Option shall be reduced by the number of shares
with respect to which the SAR was exercised.
Upon the exercise of an Option, the number of shares of Common
Stock subject to the related SAR shall be reduced by the number by
which the number of shares with respect to which the Option was
exercised exceeds any difference between the number of shares subject
to the Option immediately before the exercise and the number of shares
with respect to which the SAR was exercisable immediately before the
exercise.
10. Adjustment Upon Change in Common Stock. If Brenco effects
one or more stock dividends, stock splits, subdivisions or
consolidations of shares, or other similar changes in capitalization,
the maximum number of shares as to which Options and SARs may be
granted under the Plan shall be proportionately adjusted, and the
Committee shall make equitable adjustments in the number and option
price of the shares which are or may become the subject to Options
then outstanding or thereafter granted.
Neither Options nor SARs shall be affected or caused to be
adjusted by the issuance by Brenco of shares of stock of any class, or
securities convertible into shares of stock of any class, for cash or
property, or for labor or services, either upon direct sale or upon
the exercise of rights or warrants to subscribe therefor, or upon
conversion of shares or obligations of Brenco convertible into such
shares or other securities.
11. Compliance with Law and Approval of Regulatory Authorities.
No Option or SAR shall be exercisable, no Common Stock shall be
delivered, and no payment shall be made under this Plan except in
compliance with all applicable federal and state laws and regulations,
including, without limitation, securities laws, and withholding tax
requirements. Brenco shall have the right to rely on the advice of
counsel as to such compliance. Any certificates issued to evidence
Common Stock for which an Option or SAR is exercised may bear such
legends and statements as the Committee may deem advisable to assure
compliance with Federal and state laws and regulations. No Option or
SAR shall be exercisable, no Common Stock shall be issued, no
certificate for shares shall be delivered, and no payment shall be
made under this Plan until Brenco has obtained such consent or
approval as the Committee may deem advisable from regulatory bodies
having jurisdiction over such matters.
12. General Provisions. Neither the adoption of this Plan, nor
any documents describing or referring to this Plan (or any part
thereof) shall confer upon any employee any right to continue in the
employ of Brenco or a Subsidiary, or in any way affect any right and
power of Brenco or a Subsidiary to terminate the employment of any
employee at any time with or without cause. The establishment of the
<PAGE>
Plan does not confer upon any employee any legal or equitable right
against Brenco, any Subsidiary, or the Committee, except as expressly
provided in the Plan.
Neither absence on leave, if approved by Brenco, nor any transfer
between the service of Brenco and that of a Subsidiary, or between
Subsidiaries, shall be considered a termination of employment.
An Optionee shall have no rights as a record shareholder with
respect to any shares covered by the Option until the date of the
issuance of a stock certificate for such shares.
This Plan shall be unfunded, and Brenco shall not be required to
segregate any assets that may at any time represent grants under the
Plan. No obligation of Brenco to any person with respect to any grant
under this Plan shall be deemed to be secured by any pledge of, or
other encumbrance on, any property of Brenco.
The interests of any Participant under the Plan are not subject
to the claims of creditors and may not, in any way, be assigned,
alienated or encumbered. No Option or SAR, nor any rights and
privileges pertaining thereto, shall be transferred, assigned,
pledged, or hypothecated, by operation of law or otherwise, except as
otherwise provided herein, nor shall such Option or SAR be subject to
execution, attachment or similar process.
All money received by Brenco in payment upon the exercise of an
Option shall constitute part of its general funds, available for any
corporate purpose.
The provisions of the Plan are intended to comply with the
provisions of Rule 16b-3 under the Securities Exchange Act of 1934.
13. Amendment. The Board may amend or terminate this Plan from
time to time; provided, however, that no amendment may become
effective until shareholder approval is obtained if (i) except as
provided in Paragraph 10, the amendment increases the aggregate number
of shares that may be issued pursuant to the exercise of Options or
SARs, (ii) the amendment materially modifies the requirements as to
the eligibility for participation in the Plan; or (iii) materially
increases the benefits accruing to Participants.
Brenco, may, without approval of shareholders of the Corporation,
accept the surrender of, and cancel outstanding Options (to the extent
not therefore exercised) and, subject to the terms and conditions of
the Plan, grant new Options in substitution therefor at an Option
exercise price in conformity with the requirements of Paragraph 6(b),
but which is lower than provided for in the Options surrendered.
14. Effective Date and Duration of Plan. The effective date of
this Plan shall be April 21, 1988, but only if it is approved by the
affirmative vote of a majority of shares of Common Stock entitled to
vote, present or represented by proxy at the 1988 Annual Meeting of
shareholders. Unless sooner terminated by the Board, this Plan will
terminate on April 20, 1988, except that Options and SARs granted
prior to that date shall remain valid in accordance with their terms.
<PAGE>
EXHIBIT 10.8
BRENCO, INCORPORATED
EXECUTIVE RETIREMENT INCENTIVE PLAN
Amended and Restated Effective March 22, 1996
Brenco, Incorporated (the "Company"), hereby amends and restates
the Brenco, Incorporated Executive Retirement Incentive Plan which was
originally adopted effective January 1, 1995 (the "Plan"), effective
March 22, 1996.
1. Definitions.
A. "Actuarial Value" - means "Actuarial Value" as defined in
the Retirement Plan.
B. "Average Compensation" - means "Average Compensation" as
defined in the Retirement Plan except that, for purposes of the Plan,
Average Compensation shall include 100% of any bonuses,
commissions or other cash incentives received by a Participant instead
of 75% as prescribed in the Retirement Plan, and shall be determined
without regard to the "Compensation Limit" contained in the Plan.
C. "Base Benefit" - means an amount equal to three percent (3%)
of a Participant's Average Compensation multiplied by his Years of
Benefit Service, up to a maximum of 20 years, determined at the time
that benefit payments commence under the Plan.
D. "Change In Control" - means the occurrence of a "Change In
Control" as defined in the Change In Control Agreements entered into
by the Company and referenced on Addendum A attached hereto, as
amended from time to time.
E. "Committee" - means the Compensation Committee of the Board
of Directors of the Employer.
F. "Employer" - means Brenco, Incorporated and any of its
affiliates.
G. "Offset Benefit" - means an amount equal to the sum of (i)
the single life annuity retirement benefit which would be payable to
the
Participant under the Retirement Plan, and (ii) the benefits
which a Participant would be entitled to receive under the Social
Security Act at age 62, both of which to be determined as of the time
that benefit payments commence under the Plan on the same basis (i.e.
monthly or annual) that the Base Benefit is computed.
H. "Normal Retirement Age" - means age 62.
<PAGE>
I. "Participant" - means an employee designated by the
Committee as eligible to participate in the Plan. Except as may be
provided in Addendum A attached hereto, the Committee may at any
time terminate an employee's designation as a Participant, in which
case such employee's "Base Benefit" will be frozen, but his "Offset
Benefit" may continue to increase. A Participant shall cease being a
Participant in the event that his employment terminates prior to his
attaining age 55 other than on account of his death or disability or
as provided in Addendum A attached hereto.
J. "Plan Administrator" - means Brenco, Incorporated.
K. "Plan Year" - means the calendar year.
L. "Retirement Plan" - means the Brenco Retirement Plan.
M. "Trust" - means the Trust established by the Employer
pursuant to Section 14 of the Plan.
N. "Year of Vesting Service" - means "Year of Vesting Service"
as determined under the Retirement Plan for vesting purposes.
O. "Year of Benefit Service" - means "Year of Benefit Service"
as determined under the Retirement Plan for benefit accrual purposes.
2. Purpose. The Plan is intended to advance the interests of
the Company by providing a financial incentive to certain officers and
other key executive employees to retire from the Company at or before
attaining the Normal Retirement Age.
3. Administration of Plan. The Plan shall be administered by
the Committee. The Committee shall have the right to interpret the
Plan, and all decisions of the Committee with respect to the Plan
shall be binding on all Participants.
4. Eligibility and Participation. The Committee may from time
to time
select employees who shall participate in the Plan. In selecting
employees the Committee shall consider the position and
responsibilities of the eligible employees, the total cash
compensation and value of their services to the Company, and such
other factors as the Committee deems pertinent.
5. Eligibility for Retirement Incentive Benefit Payments and
Computation of Benefit Amount. In order for a Participant to be
eligible to receive the Retirement Incentive Benefit described below,
except as provided in Sections 7, 8 and 9 below, and Addendum A
attached hereto, he must (a) retire before the first day of the
calendar quarter next following the date on which he attains the
Normal Retirement Age, (b) have at least five (5) Years of Vesting
Service on the date that he retires, and (c) be at least fifty five
(55) years old on the date that he retires.
<PAGE>
The Retirement Incentive Benefit shall be an amount equal to the
excess, if any, of the Participant's Base Benefit over the
Participant's Offset Benefit.
6. Payments Following Retirement On or Before the Normal
Retirement Age. If the conditions set forth in Section 5 are
satisfied, the Retirement Incentive Benefit shall be payable monthly
for the Participant's life commencing on the first day of the calendar
quarter next following the date that the Participant retires.
If Retirement Incentive Benefit payment commence before the first
day of the calendar quarter next following the date that the
Participant attains the Normal Retirement Age, the Retirement
Incentive Benefit payment shall be reduced in accordance with the
table set forth below:
Age When Payments Commence Percentage of Benefit Payable *
62 100%
61 95%
60 90%
59 85%
58 80%
57 75%
56 68.8%
55 63.2%
*adjusted on a monthly basis for payments which commence between
birthdates.
After taking into account the reduction described above, if any,
the Retirement Incentive Benefit shall be paid in such form as the
Participant elects among the forms of payment available under the
Retirement Plan; provided, however, that such payments will be
reduced, in accordance with computations made by an actuary engaged by
the Plan Administrator, in the event that the benefit is paid in any
form other than a Single Life Annuity for the life of the Participant.
7. Payments Following a Participant's Disability. In the event
that a Participant's employment terminates on account of his
disability, as defined in the Retirement Plan, before benefit payments
have commenced pursuant to Section 6 above, Retirement Incentive
Benefit Payments will commence on the date that benefit payments are
first made to the Participant under the Retirement Plan.
8. Payments to a Spouse Following a Participant's Death. If a
Participant dies after benefit payments have commenced under the Plan,
his spouse or other beneficiary will be entitled to receive benefit
payments only if the form of benefit payment originally selected by
the Participant provides for the continuation of benefit payments.
If a Participant who has been married to his spouse for at least
one year at the time of his death dies after attaining age 55 with at
least five (5) Years of Vesting Service before benefit payments have
commenced under the Plan, the Participant's spouse will receive
benefit payments under the Plan commencing on the first day of the
calendar month immediately following the month in which the
<PAGE>
Participant died. Such benefit shall be in the form of a single life
annuity payable monthly for the life of the Spouse. The amount of
such annuity shall equal the survivor annuity to which the spouse
would have been entitled under the Plan determined as if benefit
payments to the Participant had commenced on the day preceding the day
of his death under the Joint and 50% Spouse Survivor Annuity form of
payment.
If a Participant who has been married to his spouse for at least
one year at the time of his death dies prior to attaining age 55 with
at least five (5) Years of Vesting Service, the Participant's spouse
will receive benefit payments under the Plan commencing on the first
day of the calendar month in which the Participant would have attained
age 55 had he survived. Such benefit shall be in the form of a single
life annuity payable monthly for the life of the spouse. The amount
of such annuity shall equal the survivor annuity to which the spouse
would have been entitled under the Plan determined as if the
Participant had died on the day following the day that benefit
payments to the Participant commenced after he had attained age 55
under the Joint and 50% Spouse Survivor Annuity form of payment.
9. Payments to a Designated Beneficiary Following a
Participant's Death. In the event that a Participant who has at least
five (5) Years of Vesting Service dies before benefit payments
commence under the Plan, his designated beneficiary may be entitled to
receive a Supplemental Death Benefit. The Supplemental Death Benefit
is an amount, payable in the form of sixty (60) guaranteed monthly
payments, equal to the Actuarial Value of the excess of:
(i) The Actuarial Value of the guaranteed ten-year certain
portion of the benefit payment to which the Participant would have
been entitled under the Ten-Year Certain and Life Annuity form of
payment had he commenced receiving benefit payments under the Plan on
the first day of the calendar month coinciding with or next following
the later of:
(A) the date of his death, or
(B) the first date on which he could have
retired and received benefit payments under the
Plan, over
(ii) The Actuarial Value of the benefit payable to the
Participant's spouse, if any, payable under Section 8 of the Plan.
If the Participant dies after attaining age 55, the benefit
payable hereunder, if any, will commence on the first day of the
calendar month immediately following the month in which the
Participant dies.
If the Participant dies prior to attaining age 55, the benefit
payable hereunder, if any, will commence on the first day of the
calendar month immediately following the month in which the
Participant would have attained age 55 had he survived.
<PAGE>
10. Cash-Out Provision. In the event that the present value of
any benefit payable under this Plan, as determined by an actuary
engaged by the Plan Administrator for this purpose, is $20,000 or
less, such present value shall be paid to the Participant, his spouse
and/or his designated beneficiary as the case may be, in a single lump
sum payment as soon as practicable after such determination is made.
11. Non-Compete Provision. The continuation of benefit payments
under the Plan will cease, and the right to all future payments under
the Plan will be forfeited, if the Participant, without the written
consent of the Company directly or indirectly enters into or in any
manner takes part in any business, profession or other endeavor which
shall be in competition with the business of the Company, either as an
employee, agent, independent contractor, owner or otherwise in any
state or foreign country in which the Company is conducting business.
12. Limitation on Benefits. No Participant, spouse or
beneficiary shall have any right to receive benefits under the Plan
prior to the termination of the Participant's employment.
Except as provided in Addendum A attached hereto, in the
event that a Participant's employment terminates (i) before he attains
the age of fifty five (55) for any reason other than his death or
disability, or (ii) on or after the first day of the calendar quarter
next following the date that he attains the Normal Retirement Age, or
in the event that a Participant breaches the noncompete provision in
paragraph 11, all rights of the Participant, his spouse and/or his
beneficiary shall be forfeited and all obligations of the Company to
make payments or further payments under the Plan shall cease.
The Plan shall not give the Participant, his spouse, his
beneficiary or anyone else any right or claim to specific assets of
the Company, regardless of whether the Company establishes a separate
account or otherwise provides for funding its liability hereunder.
The Plan may be modified or amended by the Company at any
time, provided however, the benefits payable to any Participant under
the Plan determined as of the time of such modification or amendment,
and the benefit rights granted and the benefits potentially payable
after a Change In Control as provided in Addendum A attached hereto,
shall not be reduced by such modification or amendment unless such
Participant consents in writing to such reduction.
13. Waiver of Vesting and Benefit Accrual Limitations. The
Committee may, in its sole discretion, waive, modify or amend all or
any portion of the provisions of the Plan that have the effect of
limiting the amount or the timing of payments that are to be made
under the Plan. Such action by the Committee may be made on a case by
case basis or may be made with respect to all Participants.
14. Establishment of Trust. On or before May 1, 1996, the
Company shall establish the Trust, in the form attached hereto as
Exhibit A, to fund Retirement Incentive Benefits under the Plan.
15. Change In Control Provisions. In the event that there is a
Change In Control, the provisions of the Plan shall be modified in
accordance with the provisions set forth in Addendum A attached
hereto.
<PAGE>
16. Miscellaneous Provisions.
(a) The Plan shall be governed by the laws of the
Commonwealth of Virginia.
(b) Each Participant shall designate a beneficiary, in
writing, in such form as the Company may prescribe. The Company may
rely on such beneficiary designation until such time that it is
revoked, in writing, by the Participant. In the event that a
Participant fails to designate a beneficiary, the Company shall make
all payments which would have been made to the Participant's
designated beneficiary to such Participant's estate.
(c) No benefit payable under this Plan shall be subject in
any manner to alienation, sale, transfer, assignment, pledge,
attachment, or encumbrance of any kind.
(d) Nothing contained in this Plan shall be construed as a
contract of employment between the Company and any Participant, or as
a right of any Participant to be continued in employment by the
Company, or as a limitation on the right of the Company to discharge
any of its employees with or without cause.
IN WITNESS WHEREOF, the Plan has been duly amended and
restated as of the 22nd day of March, 1996.
Brenco, Incorporated
By ________________________
<PAGE>
ADDENDUM A
CHANGE IN CONTROL PROVISIONS
1. Change In Control Agreements. For purposes of this Addendum
A, the Change In Control Agreements entered into by the Company and
referenced in paragraph D of Section 1 of the Plan are those Change In
Control Agreements dated as of March 22, 1996 for the following
Participants (the "Listed Participants"):
Jacob M. Feichtner
Donald Fitzsimmons
Robert V. Lawrence
J. Craig Rice
2. Additional Rights after a Change In Control. In the event
that a Change In Control occurs, the following provisions will apply
in determining the entitlement to and payment of benefits under the
Plan for or with respect to the Listed Participants.
A. Listed Participant's Continued Participation. The Committee
may not terminate a Listed Participant's designation as Participant.
B. Additional Years of Benefit Service and Elimination of
Benefit Reduction for Early Retirement for Jacob M. Feichtner. In the
event that the employment of Jacob M. Feichtner ("Feichtner")
terminates on or before June 30, 1999 and within two years after the
occurrence of the Change In Control and such termination of employment
is not a "Nonqualifying Termination" as defined in the Change In
Control Agreement between the Company and Feichtner dated as of March
22, 1996, then the following shall apply:
(1) His Years of Benefit Service shall be determined as if
his employment terminated on June 30, 1999.
(2) The Offset Benefit attributable to the Retirement Plan
shall be calculated with the reduction for payment prior to age 62
under the Retirement Plan (determined as though his accrued benefit
under the Retirement Plan commenced on the first day of the calendar
quarter next following the date of his termination of employment)
before it is subtracted from the Base Benefit to determine the amount
of the Retirement Incentive Benefit.
(3) The Retirement Incentive Benefit payable to him shall
not be reduced in accordance with the reduction for payment before
Normal Retirement Age provisions of Section 6 of the Plan.
C. Elimination of Benefit Reduction for Early Retirement for
Robert V. Lawrence. In the event that the employment of Robert V.
Lawrence ("Lawrence") terminates on or before March 31, 2000 and
within two years after the occurrence of the Change In Control and
such termination of employment is not a "Nonqualifying Termination" as
defined in the Change In Control Agreement between the Company and
Lawrence dated as of March 22, 1996, then the following shall apply:
<PAGE>
(1) The Offset Benefit attributable to the Retirement Plan
shall be calculated with the reduction for payment prior to age 62
under the Retirement Plan (determined as though his accrued benefit
under the Retirement Plan commenced on the first day of the calendar
quarter next following the date of his termination of employment)
before it is subtracted from the Base Benefit to determine the amount
of the Retirement Incentive Benefit.
(2) The Retirement Incentive Benefit payable to him shall
not be reduced in accordance with the reduction for payment before
Normal Retirement Age provisions of Section 6 of the Plan.
D. Acceleration of Vesting and Other Rights for J. Craig Rice.
In the case of J. Craig Rice ("Rice"), if he terminates before the
first day of the calendar quarter next following the date on which he
attains the Normal Retirement Age, then the following shall apply:
(1) The age and service eligibility requirements set forth
in Sections 5 of the Plan and the forfeiture on termination of
employment rule set forth in Section 12 of the Plan shall be waived.
(2) He shall be eligible to receive his Retirement
Incentive Benefit at the later of age 55 or his termination of
employment (or any earlier date permitted in the event of his
disability) if then alive.
(3) If he dies (whether before or after his termination of
employment) before his benefit payments under the Plan have commenced
to him, his spouse or other beneficiary shall be entitled to receive
such death benefits as may then be provided to them under Sections 8
and 9 of the Plan.
(4) The non-competition provisions of Section 11 of the
Plan shall apply to him only if he voluntarily resigns other than
for "Good Reason" as defined in the Change In Control Agreement
between the Company and Rice dated as of March 22, 1996 (but
determined without regard to the first sentence of the second
paragraph of Section 1(f) of the Change In Control Agreement which
provides for a 30-day window after the first anniversary of the Change
In Control during which his voluntarily termination will be deemed
Good Reason).
E. Acceleration of Vesting and Other Rights for Donald
Fitzsimmons. In the case of Donald Fitzsimmons ("Fitzsimmons"), if he
terminates before the first day of the calendar quarter next
following the date on which he attains the Normal Retirement Age, then
the following shall apply:
(1) The age and service eligibility requirements set forth
in Sections 5 of the Plan and the forfeiture on termination of
employment rule set forth in Section 12 of the Plan shall be waived.
(2) He shall be eligible to receive his Retirement
Incentive Benefit at the later of age 55 or his termination of
employment (or any earlier date permitted in the event of his
disability) if then alive.
<PAGE>
(3) If he dies (whether before or after his termination of
employment) before his benefit payments under the Plan have
commenced to him, his spouse or other beneficiary shall be entitled to
receive such death benefits as may then be provided to them under
Sections 8 and 9 of the Plan.
(4) The non-competition provisions of Section 11 of the
Plan shall apply to him only if he voluntarily resigns other than for
"Good Reason" as defined in the Change In Control Agreement between
the Company and Fitzsimmons dated as of March 22, 1996 (but determined
without regard to the first sentence of the second paragraph of
Section 1(f) of the Change In Control Agreement which provides for a
30-day window after the first anniversary of the Change In Control
during which his voluntarily termination will be deemed Good Reason).
3. Requirement to Fully Fund the Trust. Within ninety (90)
days following the date that a Change In Control occurs, the Company
shall contribute to the Trust an amount equal to the unfunded
actuarial liability of the Plan, determined in accordance with sound
actuarial principles as of the date that such Change In Control
occurs. On or before March 31 of each year following the year in
which a Change In Control occurs, the Company shall contribute to the
Trust an amount equal to the unfunded actuarial liability of the Plan
as of the December 31 next preceding.
<PAGE>
EXHIBIT 10.9
TRUST AGREEMENT FOR
BRENCO, INCORPORATED EXECUTIVE RETIREMENT INCENTIVE PLAN
THIS TRUST AGREEMENT, made and entered into this 31st of May,
1996, by and between BRENCO, INCORPORATED, a Virginia corporation,
(hereinafter called the "Employer") and CRESTAR BANK of Richmond,
Virginia (hereinafter called the "Trustee").
WITNESSETH:
THAT WHEREAS, the Employer has established a non-qualified
incentive retirement plan known as the Brenco, Incorporated Executive
Retirement Incentive Plan (the "Plan").
WHEREAS, the Employer has incurred or expects to incur liability
under the terms of the Plan with respect to the individuals
participating in the Plan;
WHEREAS, the Employer wishes to establish a trust (hereinafter
called "Trust") and to contribute to the Trust assets that shall be
held therein, subject to the claims of the Employer's creditors in the
event the Employer is Insolvent, as herein defined, until paid to Plan
participants and their beneficiaries in such manner and at such times
as specified in the Plan;
WHEREAS, it is the intention of the parties that this Trust shall
constitute an unfunded arrangement and shall not affect the status of
the Plan as an unfunded plan maintained for the purpose of providing
deferred compensation for a select group of management or highly
compensated employees for purposes of Title I of the Employee
Retirement Income Security Act of 1974, as amended (the "Act");
WHEREAS, it is the intention of the Employer to make
contributions to the Trust to provide itself with a source of funds to
assist it in the meeting of its liabilities under the Plan;
NOW, THEREFORE, the parties do hereby establish the Trust and
agree that the Trust shall be comprised, held and disposed of as
follows:
1. Establishment of Trust Fund and Funding.
(a) The Employer hereby deposits with the Trustee in trust the sum of
$100, which shall become the principal of the Trust to be held,
administered and disposed of by the Trustee as provided in this Trust
Agreement.
(b) The Trust hereby established is revocable by the Employer,
provided, however, that it shall become irrevocable upon a Change In
Control, as defined herein.
<PAGE>
(c) The Trust is intended to be a grantor trust, of which the
Employer is the grantor, within the meaning of subpart E, part I,
subchapter J, chapter 1, subtitle A (that is, Section 671 et seq.) of
the Code, and shall be construed accordingly.
(d) The principal of the Trust and any earnings thereon shall be held
separate and apart from other funds of the Employer and shall be used
exclusively for the uses and purposes of Plan participants and general
creditors as herein set forth. Plan participants and their
beneficiaries shall have no preferred claim on, or any beneficial
ownership or security interest in, any assets of the Trust. Any
rights created under the Plan and this Trust Agreement shall be mere
unsecured contractual rights of Plan participants and their
beneficiaries against the Employer. Any assets held by the Trust will
be subject to the claims of the Employer's general creditors under
federal and state law in the event of the Employer is Insolvent, as
defined in Section 3(a) herein.
(e) During the existence of the Trust, the Employer at least annually
based on its fiscal year and in one or more payments as determined by
it shall be obligated to make additional deposits of cash or other
property in trust with the Trustee to augment the principal to be
held, administered and disposed of by the Trustee as provided in this
Trust Agreement in an amount equal to the "annual deposit amount".
For purposes hereof:
(1) The "annual deposit amount" for a fiscal year is equal
to (A) minus (B) plus (C), as follows:
(A) the amount accrued by the Employer on its
financial statements in accordance with generally accepted accounting
principles as its annual expense for its obligations under the Plan
(currently the "net periodic pension cost" as defined in Financial
Accounting Standards Board Statement of Financial Accounting Standards
No. 87 - Employers' Accounting for Pensions),
(B) the investment earnings, realized and unrealized,
of the Trust for the year, and
(C) the expenses (exclusive of benefit payments to
Plan participants and beneficiaries) paid by the Trust during the
year.
(2) The Employer shall make such additional contributions
to the Trust as may be required by the Plan.
(3) The Trustee shall not be required to determine the
amount of the Employer's contribution for any year or to enforce the
duty of the Employer to make such contributions; but the Trustee shall
provide the Employer with such information as it may reasonably
require to determine the amount of its contribution.
(4) The Trustee shall have, but is not required to
exercise, and each Plan participant or beneficiary shall have, the
right to compel such additional deposits.
<PAGE>
(f) The Employer, in its sole discretion, may at any time, or from
time to time, make additional deposits of cash or other property in
trust with the Trustee to augment the principal to be held,
administered and disposed of by the Trustee as provided in this Trust
Agreement. Neither the Trustee nor any Plan participant or
beneficiary shall have any right to compel such additional deposits.
2. Payments to Plan Participants and Their Beneficiaries.
(a) The entitlement of a Plan participant or his or her beneficiaries
to benefits under the Plan shall be determined by the Committee
pursuant to the applicable Plan provisions and any claim for such
benefits shall be considered and reviewed under the procedures set out
in the Plan.
(b) The Committee shall deliver to the Trustee a schedule (the
"Payment Schedule") that indicates the amounts payable in respect of
each Plan participant (and his or her beneficiaries), that provides a
formula or other instructions acceptable to the Trustee for
determining the amounts so payable, the form in which such amount is
to be paid (as provided for or available under the Plan), and the time
of commencement for payment of such amounts. Except as otherwise
provided herein, the Trustee shall make payments to the Plan
participants and their beneficiaries in accordance with such Payment
Schedule.
(c) In lieu of payment by the Trust, the Employer may make payment of
benefits directly to Plan participants or their beneficiaries as they
become due under the terms of the Plan. The Employer shall notify the
Trustee of its decision to make payment of benefits directly prior to
the time amounts are payable to Plan participants or their
beneficiaries and shall notify the Trustee of the time and amount of
payment when such payment is actually made.
(d) If the principal of the Trust, and any earnings thereon, are not
sufficient to make payments of benefits in accordance with the terms
of the Plan, the Employer shall make the balance of each such payment
as it falls due. The Trustee shall notify the Employer where
principal and earnings are not sufficient.
(e) The Administrative Committee shall make provision for the
reporting and withholding of any federal, state or local taxes that
may be required to be withheld with respect to the payment of benefits
from the Trust pursuant to the terms of the Plan and shall pay or
cause to be paid amounts withheld to the appropriate taxing
authorities or determine that such amounts have been reported,
withheld and paid by the Employer or, if agreed to by the Trustee, the
Trustee. When tax withholding is required, unless otherwise agreed to
by the Trustee, the Trustee shall make the benefit payment in the net
amount payable to the Plan participant or beneficiary (that is, the
amount payable after applicable tax withholding) and shall provide a
second payment to cover the tax withholding payable as the
Administrative Committee directs.
<PAGE>
3. Trustee Responsibility Regarding Payments to Trust Beneficiary
When the Employer is Insolvent.
(a) The Trustee shall cease payment of benefits to Plan participants
and their beneficiaries if the Employer is Insolvent. The Employer
shall be considered "Insolvent" for purposes of this Trust Agreement
if (1) the Employer is unable to pay its debts as they become due, or
(2) the Employer is subject to a pending proceeding as a debtor under
the United States Bankruptcy Code.
(b) At all times during the continuance of this Trust, as provided in
Section 1(d) hereof, the principal and income of the Trust shall be
subject to claims of general creditors of the Employer under federal
and state law as set forth below, and at any time the Trustee has
actual knowledge, or has determined, that the Employer is Insolvent,
the Trustee shall deliver any undistributed principal and income in
the Trust to satisfy such claims as a court of competent jurisdiction
or other competent authority shall direct.
(1) The Board of Directors and the Chief Executive Officer
of the Employer shall have the duty to inform the Trustee in writing
that the Employer is Insolvent. If a person claiming to be a creditor
of the Employer alleges in writing to the Trustee that the Employer
has become Insolvent, the Trustee shall independently determine
whether the Employer is Insolvent and, pending such determination, the
Trustee shall discontinue payment of benefits to Plan participants or
their beneficiaries. The Trustee may in all events rely on such
evidence concerning the Employer's solvency as may be furnished to the
Trustee and that provides the Trustee with a reasonable basis for
making a determination concerning the Employer's solvency. Unless
otherwise provided by the Committee and the Chief Executive Officer of
the Employer, the Administrative Committee shall monitor and provide
notice to the Trustee regarding whether the Employer is Insolvent or
not Insolvent.
(2) Unless the Trustee has actual knowledge that the
Employer is Insolvent, or has received notice from the Employer or a
person claiming to be a creditor alleging that the Employer is
Insolvent, the Trustee shall have no duty to inquire whether the
Employer is Insolvent.
(3) If at any time the Trustee has actual knowledge, or has
determined, that the Employer is Insolvent, the Trustee shall
discontinue payments to Plan participants or their beneficiaries and
shall hold the assets of the Trust for the benefit of the Employer's
general creditors.
(4) The Trustee shall resume the payment of benefits to
Plan participants or their beneficiaries in accordance with Section 2
of this Trust Agreement only after the Trustee has actual knowledge,
or has determined, that the Employer is not Insolvent or, as
applicable, is no longer Insolvent.
(5) Nothing in this Trust Agreement shall in any way
diminish any rights of Plan participants or their beneficiaries to
pursue their rights as general creditors of the Employer with respect
to benefits due under the Plan or otherwise.
<PAGE>
(c) Provided that there are sufficient assets, if the Trustee
discontinues the payment of benefits from the Trust pursuant to
Section 3(b) hereof and subsequently resumes such payments, the first
payment following such discontinuance shall include the aggregate
amount of all payments due to Plan participants or their beneficiaries
under the terms of the Plan for the period of such discontinuance,
less the aggregate amount of any payments made to Plan participants or
their beneficiaries by the Employer in lieu of the payments provided
for hereunder during any such period of discontinuance.
4. Payments to the Employer.
Except as provided in Section 3 or 12 hereof, after the Trust has
become irrevocable, the Employer shall have no right or power to
direct the Trustee to return to the Employer or to divert to others
any of the Trust assets before all payment of benefits have been made
to Plan participants and their beneficiaries pursuant to the terms of
the Plan.
5. Investment Authority.
(a) The Trustee may invest in securities (including stock or rights
to acquire stock) or obligations issued by the Employer. All rights
associated with assets of the Trust shall be exercised by the Trustee,
any Investment Manager designated by the Employer pursuant to Section
8(h) hereof or the Administrative Committee pursuant to Section 8(i)
hereof, and shall in no event be exercisable by or rest with Plan
participants or their beneficiaries, except that voting rights with
respect to Trust assets may be exercised by the Employer in its
discretion during periods before the Trust becomes irrevocable.
(b) During periods before the Trust becomes irrevocable, the Employer
shall have the right at anytime, and from time to time in its sole
discretion, to substitute assets of equal fair market value and of
equal or greater liquidity for any asset held by the Trust. This
right is exercisable by the Employer in a nonfiduciary capacity
without the approval or consent of any person in a fiduciary capacity.
6. Disposition of Income.
During the term of this Trust, all income received by the Trust,
net of expenses and taxes, shall be accumulated and reinvested.
7. Accounting by the Trustee.
(a) The Trustee shall keep accurate and detailed records of all
investments, receipts, disbursements, and all other transactions
required to be made, including such specific records as shall be
agreed upon in writing between the Employer or the Administrative
Committee and the Trustee.
<PAGE>
(b) All such accounts, books and records shall be open to inspection
and audit at all reasonable times by the Employer and the
Administrative Committee.
(c) Within sixty (60) days following the close of each fiscal year of
the Employer and within sixty (60) days after the removal or
resignation of the Trustee, the Trustee shall deliver to the Employer
and the Administrative Committee a written account of its
administration of the Trust during such year or during the period from
the close of the last preceding year to the date of such removal or
resignation, setting forth all investments, receipts, disbursements
and other transactions effected by it, including a description of all
securities and investments purchased and sold with the cost or net
proceeds of such purchases or sales (accrued interest paid or
receivable being shown separately), and showing all cash, securities
and other property held in the Trust at the end of such year or as of
the date of such removal or resignation, as the case may be.
(d) The Employer and the Administrative Committee shall be deemed to
have accepted the Trustee's account as fully accurate and as meeting
the provisions of this Trust Agreement if neither the Employer nor the
Administrative Committee has made any written objection to the account
within ninety (90) days of their receipt of the account.
8. Responsibility of the Trustee.
(a) The Trustee shall act with the care, skill, prudence and
diligence under the circumstances then prevailing that a prudent
person acting in like capacity and familiar with such matters would
use in the conduct of an enterprise of a like character and with like
aims, provided, however, that the Trustee shall incur no liability to
any person for any action taken pursuant to a direction, request or
approval given by the Employer which is contemplated by, and in
conformity with, the terms of the Plan or this Trust and is given in
writing by the Employer, the Committee or the Administrative
Committee. In the event of a dispute between the Employer, the
Committee or the Administrative Committee and any person claiming an
interest in or right under the Trust, the Trustee may apply to a court
of competent jurisdiction to resolve the dispute.
(b) If the Trustee undertakes or defends any litigation arising in
connection with this Trust, the Employer agrees to indemnify the
Trustee against the Trustee's costs, expenses and liabilities
(including, without limitation, attorneys' fees and expenses) relating
thereto and to be primarily liable for such payments. If the Employer
does not pay such costs, expenses and liabilities in a reasonably
timely manner, the Trustee may obtain payment from the Trust.
(c) The Trustee may consult with legal counsel (who may also be
counsel for the Trustee or the Employer generally) with respect to any
of its duties or obligations hereunder.
(d) The Trustee may hire agents, accountants, actuaries, investment
advisors, financial consultants or other professionals to assist it in
performing any of its duties or obligations hereunder.
<PAGE>
(e) The Trustee shall have, without exclusion, all powers conferred
on the Trustee by applicable law, unless expressly provided otherwise
herein, provided, however, that if an insurance policy is held as an
asset of the Trust, the Trustee shall have no power to name a
beneficiary of the policy other than the Trust, to assign the policy
(as distinct from conversion of the policy to a different form) other
than to a successor Trustee or other than to a Plan participant as
provided in the Plan, or to loan to any person the proceeds of any
borrowing against such policy.
(f) Notwithstanding the provisions of Section 8(e) above, the Trustee
may loan to the Employer the proceeds of any borrowing against an
insurance policy held as an asset of the Trust.
(g) Notwithstanding any powers granted to the Trustee pursuant to
this Trust Agreement or to applicable law, the Trustee shall not have
any power that could give this Trust the objective of carrying on a
business and dividing the gains therefrom, within the meaning of
Section 301.7701-2 of the Procedure and Administrative Regulations
promulgated pursuant to the Code.
(h) Notwithstanding any other provision hereof (other than Section
8(g) hereof):
(1) The Administrative Committee may appoint one or more
Investment Managers to manage all or any portion of the assets of the
Trust. The appointment of any such Investment Manager shall be by
written agreement, which shall specify the scope of the powers and
duties of such Investment Manager, shall contain reasonable provisions
for the termination of such appointment, may require or allow any
Investment Manager to perform asset custodial services for all or part
of the Trust, and shall be executed by the parties thereto and
acknowledged by the Trustee.
(2) In the event an Investment Manager is appointed for all
or part of the assets of the Trust, the Trustee shall follow the
directions of the Investment Manager in managing and controlling the
assets of the Trust subject to the direction and control of the
Investment Manager. The Investment Manager shall be governed by the
powers and restrictions imposed on the Trustee in its management and
control of the Fund.
(3) In the event an Investment Manager is appointed for all
or part of the assets of the Trust, the Trustee shall not be liable or
responsible for the control or management of the assets of the Trust
subject to the direction and control of the Investment Manager, except
to the extent the Trustee may fail or refuse to carry out the lawful
directions or instructions of the Investment Manager.
(4) For purposes hereof, the term "Investment Manager"
means a person who is registered as an investment advisor under the
Investment Advisors Act of 1940, a bank as defined in the Investment
Advisors Act of 1940, or an insurance company qualified to perform
investment advisory services under the laws of more than one State.
<PAGE>
(i) Notwithstanding any other provision hereof (other than Section
8(g) hereof):
(1) The Administrative Committee may direct the Trustee
with respect to the management of the assets of the Trust.
(2) In the event the Administrative Committee directs the
Trustee with respect to the management of the assets of the Trust, the
Trustee shall follow the directions of the Administrative Committee in
managing and controlling the assets of the Trust. The Administrative
Committee shall be governed by the powers and restrictions imposed on
the Trustee in its management and control of the Fund.
(3) In the event the Administrative Committee directs the
Trustee with respect to the management of the assets of the Trust, the
Trustee shall not be liable or responsible for the control or
management of the assets of the Trust subject to the direction and
control of the Administrative Committee, except to the extent the
Trustee may fail or refuse to carry out the lawful directions or
instructions of the Administrative Committee.
9. Trustee Compensation and Expenses of the Plan and Trust.
(a) The Trustee shall be entitled to such reasonable compensation for
its services as shall be agreed upon by the Employer and the Trustee.
The Trustee shall also be entitled to receive its reasonable expenses
incurred with respect to the administration of the Trust, including
fees incurred by the Trustee pursuant to Sections 8(c) and (d) of this
Trust Agreement.
(b) Any taxes on the income of the Trust shall be considered an
expense of the Trust and may be paid by the Employer or by the trust
as provided herein.
(c) The Employer, in its discretion, may pay any or all
administrative expenses of the Plan and/or the Trust, including but
not limited to the Trustee's compensation and expenses. If not so
paid, such compensation and expenses shall be paid from the Trust.
10. Resignation and Removal of the Trustee.
(a) The Trustee may resign at any time by written notice to the
Employer, which shall be effective sixty (60) days after receipt of
such notice unless the Employer and the Trustee agree otherwise.
(b) The Trustee may be removed by the Employer on sixty (60) days
notice or upon shorter notice accepted by the Trustee.
(c) Upon resignation or removal of the Trustee and appointment of a
successor Trustee, all assets shall subsequently be transferred to the
successor Trustee. The transfer shall be completed as soon as
practicable after receipt of notice of resignation, removal or
transfer, unless the Employer extends the time limit.
<PAGE>
(d) If the Trustee resigns or is removed, a successor shall be
appointed, in accordance with Section 11 hereof, by the effective date
of resignation or removal under paragraph(s) (a) or (b) of this
section. If no such appointment has been made, the Trustee may apply
to a court of competent jurisdiction for appointment of a successor or
for instructions. All expenses of the Trustee in connection with the
proceeding shall be allowed as administrative expenses of the Trust.
11. Appointment of Successor Trustee.
(a) Subject to the requirements of Section 11(b), if the Trustee
resigns or is removed in accordance with Section 10(a) or (b) hereof
or dies or otherwise ceases to exist, the Employer shall appoint any
independent third party as a successor to replace the Trustee upon
resignation, removal or death. The appointment shall be effective
when accepted in writing by the new Trustee, who shall have all of the
rights and powers of the former Trustee, including ownership rights in
the Trust assets. The former Trustee shall execute any instrument
necessary or reasonably requested by the Employer or the successor
Trustee to evidence the transfer. For purposes hereof:
(1) A person (whether an individual or entity) is
"independent" only if the person is not the Employer, an officer,
director or employee of the Employer or any Affiliated Employer, a
Plan participant or beneficiary, a member of the "family" (within the
meaning of Section 4975(e)(6) of the Code) of any of the preceding
persons, any person who would be a "related or subordinate party"
(within the meaning of Section 672(c) of the Code) to the Employer.
(2) An "Affiliated Employer" is any person which would be a
member of the "controlled group of corporations" (within the meaning
of Section 414(b) of the Code) which includes the Employer or is under
"common control" (within the meaning of Section 414(c) of the Code)
with the Employer, in each case determined on the basis of the words
"80 percent" in Section 1563(a)(1) of the Code being replaced by "50
percent".
(b) If a Change In Control occurs, as defined herein, the Trustee may
not be removed by the Employer unless an independent bank or trust
company is appointed as the successor Trustee. If the Trustee resigns
after a Change In Control occurs, the Employer shall appoint an
independent bank or trust company to serve as the successor Trustee.
(c) The successor Trustee need not examine the records and acts of
any prior Trustee and may retain or dispose of existing Trust assets,
subject to Sections 7 and 8 hereof. The successor Trustee shall not
be responsible for and the Employer shall indemnify and defend the
successor Trustee from any claim or liability resulting from any
action or inaction of any prior Trustee or from any other past event,
or any condition existing at the time it becomes successor Trustee.
<PAGE>
12. Amendment or Termination.
(a) This Trust Agreement may be amended by a written instrument
executed by the Trustee and the Employer. Notwithstanding the
foregoing, no such amendment shall conflict with the terms of the Plan
or shall make the Trust revocable after it has become irrevocable in
accordance with Section 1(b) hereof unless the Employer has obtained
the written consent of all Plan participants and beneficiaries
entitled to Plan benefits (whether then or thereafter payable) at the
time in question.
(b) Except as expressly provided herein, the Trust shall not
terminate until the date on which Plan participants and their
beneficiaries are no longer entitled to benefits pursuant to the terms
of the Plan unless sooner revoked in accordance with Section 1(b)
hereof. Upon termination of the Trust any assets remaining in the
Trust shall be returned to the Employer.
(c) Upon written consent of Plan participants and beneficiaries
entitled to Plan benefits (whether then or thereafter payable) at the
time in question, the Employer may terminate this Trust prior to the
time all benefit payments under the Plan have been made. All assets
in the Trust at termination shall be returned to the Employer.
(d) Notwithstanding the foregoing, the Trustee may declare the Trust
to be terminated and take all appropriate action in connection
therewith at any time the Trust has no assets.
13. Miscellaneous.
(a) Any provision of this Trust Agreement prohibited by law shall be
ineffective to the extent of any such prohibition, without
invalidating the remaining provisions hereof.
(b) Benefits payable to Plan participants and their beneficiaries
under this Trust Agreement may not be anticipated, assigned (either at
law or in equity), alienated, pledged, encumbered or subjected to
attachment, garnishment, levy, execution or other legal or equitable
process.
(c) This Trust Agreement shall be governed by and construed in
accordance with the laws of the Commonwealth of Virginia.
(d) The Administrative Committee shall operate as follows and have
the following responsibilities and duties:
(1) The Administrative Committee shall appoint from its
members a Chairman and a Secretary. The Secretary shall keep records
as may be necessary of the acts and resolutions of such committee and
be prepared to furnish reports thereof to the Employer and the
Trustee. Except as otherwise provided, all instruments executed on
behalf of such committee may be executed by its Chairman or Secretary,
and the Trustee may assume that such committee, its Chairman or
Secretary are the persons who were last designated as such to them in
writing by the Plan Sponsor or its Chairman or Secretary.
<PAGE>
(2) The Administrative Committee's action in all matters,
questions and decisions shall be determined by a majority vote of its
members qualified to act thereon. They may meet informally or take
any action without the necessity of meeting as a group.
(3) The Administrative Committee shall be responsible for
such matters regarding administration and management of the Trust and
the Plan as are expressly assigned to it.
(e) The Committee is empowered to settle claims against the Trust and
to make such equitable adjustments in a Plan participant's or
Beneficiary's rights or entitlements under the Plan as it deems
appropriate in the event an error or omission is discovered or claimed
in the operation or administration of the Plan.
(f) The Committee may construe this Trust Agreement, correct defects,
supply omissions or reconcile inconsistencies to the extent necessary
to effectuate the Plan and the Trust and such action shall be
conclusive.
(g) The Committee is empowered to delegate any or all of its duties
to the Administrative Committee.
14. Definitions.
The following words and terms as used in this Trust Agreement
shall have the meaning set forth below, unless a different meaning is
clearly required by the context:
(a) "Administrative Committee" means an administrative committee
consisting of at least two individuals appointed, and subject to
removal or replacement at any time, by the Committee to administer
certain aspects of the Plan and/or the Trust generally or on behalf of
the Committee. The Committee itself may serve as the Administrative
Committee, and the Committee shall serve as the Administrative
Committee whenever two appointed individuals are not serving as the
Administrative Committee.
(b) "Effective Date" means the date as of which this Trust Agreement
becomes effective, which shall be the date first stated above.
(c) "Employer" means Brenco, Incorporated, a Virginia corporation (or
its successor).
(a) "Change In Control" has the meaning assigned to it in the Plan.
(e) "Code" means the Internal Revenue Code of 1986, as the same may
be amended from time to time, or the corresponding section of any
subsequent Internal Revenue Code, and, to the extent not inconsistent
therewith, regulations issued thereunder.
(f) "Committee" means the "Committee" defined in the Plan.
(g) "Insolvent" has the meaning assigned to it in Section 3(a)
hereof.
<PAGE>
(h) "Investment Manager" has the meaning assigned to it in Section
8(h) hereof.
(i) "Plan" means the non-qualified incentive retirement plan known as
the Brenco, Incorporated Executive Retirement Incentive Plan, as
amended and restated effective March 22, 1996 and as the same may be
amended from time to time.
(j) "Trust" means the trust fund established for the Plan pursuant to
this Trust Agreement, which shall be known as the "Brenco,
Incorporated Executive Retirement Incentive Trust".
(k) "Trustee" means the person(s) serving from time to time as
trustee of this Trust, which as of the Effective Date is Crestar Bank
of Richmond, Virginia.
IN WITNESS WHEREOF, the Employer, pursuant to the resolution duly
adopted by its Board of Directors, has caused its name to be signed to
this Trust Agreement by its duly authorized officer with its corporate
seal hereunto affixed and attested by its Secretary or Assistant
Secretary, and the Trustee has caused his name to be signed and his
seal hereunto affixed as of the day and year above written.
BRENCO, INCORPORATED, Employer
By: (SEAL)
Its
Attest:
Its
CRESTAR BANK, Trustee
By: (SEAL)
Its
Attest:
Its
<PAGE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> MAR-31-1996
<CASH> 13366
<SECURITIES> 0
<RECEIVABLES> 22471
<ALLOWANCES> 0
<INVENTORY> 16803
<CURRENT-ASSETS> 56780
<PP&E> 93617
<DEPRECIATION> 58027
<TOTAL-ASSETS> 93041
<CURRENT-LIABILITIES> 11962
<BONDS> 0
<COMMON> 10204
0
0
<OTHER-SE> 55930
<TOTAL-LIABILITY-AND-EQUITY> 93041
<SALES> 32875
<TOTAL-REVENUES> 32875
<CGS> 25000
<TOTAL-COSTS> 28825
<OTHER-EXPENSES> ( 251)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 178
<INCOME-PRETAX> 4123
<INCOME-TAX> 1552
<INCOME-CONTINUING> 2571
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 2571
<EPS-PRIMARY> .25
<EPS-DILUTED> .25
</TABLE>
