CHANGE OF CONTROL AGREEMENT
This Agreement entered into this 11th day of September, 2000, by and
between Amcast Industrial Corporation (the "Company") and John H. Shuey (the
"Executive").
WHEREAS, Executive has performed valuable services to Company in senior
executive positions in the past and;
WHEREAS, it is the desire of the Company to continue to retain the services
of Executive in the future as the Company's chief executive officer and;
WHEREAS, the Company recognizes that as is the case with most publicly held
corporations, the possibility of a change in control may raise distracting and
disrupting uncertainties especially for the chief executive officer, may create
a conflict and make it difficult for Executive to give his whole-hearted
attention and devotion to the performance of his duties, and may even lead to
his departure, all to the detriment of the best interests of the Company and its
shareholders.
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that the best interests of the Company and its shareholders will be served by
assuring Executive, the protection provided by an agreement which defines the
respective rights and obligations of the Company and the Executive in the event
of termination of employment subsequent to a change in control of the Company
and to induce Executive to remain in the employ of the Company.
NOW, THEREFORE, the parties agree that this agreement sets forth the
severance benefits which the Company agrees will be provided to Executive in the
event Executive's employment with the Company [or, in the case of a transaction
described in clause (iv) of paragraph 2, with the successor to the Company (a
"Successor")] is terminated subsequent to a "change in control of the Company"
under the circumstances described below.
Except where the context otherwise indicates, the term "Company"
hereinafter includes the Company and any Successor.
1. OPERATION AND TERM OF AGREEMENT. This agreement, although effective
immediately, shall not become operative unless and until there has been a
change in control of the Company. None of the provisions of this agreement
shall be applicable to any termination of Executive's employment, however
occurring, which is effective prior to a change in control of the Company.
This agreement shall continue until the later of December 31, 2004 or two
years after the occurrence of a change in control of the Company, provided
such change in control occurs on or before December 31, 2004, subject to
extension beyond that date by mutual written consent. This agreement will
be reviewed with Executive between January 1, 2004 and July 31, 2004, for
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the purpose of determining whether or not an extension beyond December 31,
2004 is mutually agreeable and, if so, on what basis and for how long.
2. CHANGE IN CONTROL. No benefits shall be payable hereunder unless there
shall have been a change in control of the Company, as set forth below. For
purposes of this agreement, a "change in control of the Company" shall mean
and be deemed to have occurred on (i) the date upon which the Company is
provided a copy of a Schedule 13D, filed pursuant to Section 13(d) of the
Securities Exchange Act of 1934 (the "1934 Act"), indicating that a group
or person, as defined in Rule 13d-3 under the 1934 Act, has become the
beneficial owner of 20% or more of the outstanding Voting Shares of the
Company or the date upon which the Company first learns that a person or
group has become the beneficial owner of 20% or more of the outstanding
Voting Shares of the Company if a Schedule 13D is not filed; (ii) the date
of a change in the composition of the Board of Directors of the Company
such that individuals who were members of the Board of Directors on the
date two years prior to such change (or who were subsequently elected to
fill a vacancy in the Board, or were subsequently nominated for election by
the Company's shareholders, by the affirmative vote of at least two-thirds
of the directors then still in office who were directors at the beginning
of such two year period) no longer constitute a majority of the Board of
Directors of the Company; (iii) the date the shareholders of the Company
approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
holders of the Voting Shares of the Company outstanding immediately prior
to the merger or consolidation continuing to own immediately after the
merger or consolidation 80% or more of the Voting Shares of the Company or
the surviving entity, if the Company is not the surviving entity in the
merger or consolidation; or (iv) the date shareholders of the Company
approve a plan of complete liquidation of the Company or an agreement for
the sale or disposition by the Company of all or substantially all the
Company's assets. "Voting Shares" means any securities of the Company which
vote generally in the election of directors.
3. TERMINATION FOLLOWING CHANGE IN CONTROL.
(A) If any of the events described in paragraph 2 constituting a change
in control of the Company shall have occurred, then upon any subsequent
termination of Executive's employment at any time within two years
following the occurrence of such event, Executive shall be entitled to
the benefits provided by this agreement, as set forth in paragraph 5,
unless such termination is for Cause.
(B) As used in this agreement, the term "Cause" shall have the meaning
set forth below:
(i) Cause. "Cause" shall mean (a) the willful and continued failure
by Executive to substantially perform Executive's duties with the
Company (other than any such failure resulting from Executive's
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physical or mental illness or other physical or mental incapacity),
after a demand for substantial performance is delivered to
Executive by the Board which specifically identifies the manner in
which the Board believes that Executive has not substantially
performed Executive's duties, or (b) the willful engaging by
Executive in gross misconduct which is materially and demonstrably
injurious to the Company resulting or intended to result, directly
or indirectly, in substantial personal gain or substantial personal
enrichment at the expense of the Company. For purposes of this
subparagraph, no act, or failure to act, on Executive's part shall
be considered "willful" unless done, or omitted to be done, by
Executive not in good faith and without reasonable belief that
Executive's action or omission was in the best interests of the
Company. Notwithstanding the foregoing, Cause shall not be deemed
to exist unless and until there shall have been delivered to
Executive a copy of a resolution duly adopted by the affirmative
vote of not less than three-fourths of the number of directors then
in office at a meeting of the Board called and held for that
purpose (after reasonable notice to Executive and an opportunity
for Executive, together with Executive's counsel, to be heard
before the Board), finding that in the good faith opinion of the
Board Executive is guilty of conduct set forth above in clauses (a)
or (b) of the first sentence of this subparagraph and specifying
the particulars thereof in detail.
(C) If subsequent to a change in control of the Company Executive's
employment is terminated by the Company for Cause, the Company shall pay
Executive's full salary through the Date of Termination at Executive's
annual base salary rate in effect at the time Notice of Termination is
given, and Executive shall also receive all accrued or vested benefits
of any kind to which Executive is, or would otherwise have been,
entitled through the Date of Termination (as defined in paragraph 4),
and the Company shall thereupon have no further obligation to Executive
under this agreement.
4. NOTICE AND DATE OF TERMINATION.
(A) Any termination of Executive's employment subsequent to a change in
control of the Company shall be consummated by written Notice of
Termination given to the other party. For purposes of this agreement,
"Notice of Termination" shall mean a notice which indicates the specific
termination provision or provisions in this agreement relied upon, if
any, and sets forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of Executive's employment.
(B) "Date of Termination" shall mean (i) if Executive's employment is
terminated by the Company for Cause, the date specified in the Notice of
Termination or the date on which the meeting of the Board referred to in
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subparagraph 3(B)(i) is concluded, whichever date is the later; or (ii)
if Executive's employment is terminated for any other reason, the date
on which Notice of Termination is given or the effective date specified
in the Notice, whichever is later. For purposes of this agreement,
termination of Executive's employment shall be deemed to have occurred
within two years following the occurrence of a change in control of the
Company if the Date of Termination is within such two year period.
5. COMPENSATION AND BENEFITS UPON TERMINATION.
(A) "Incentive Compensation" shall mean the annual cash payment
awarded under the Annual Incentive Program (AIP) or other
plan which replaces the AIP but not including any awards
under any stock option, stock grant, stock rights, or
similar plan or any award under any company sponsored profit
sharing, pension, 401k, or similar savings plan.
(B) "Long Term Incentive Compensation" shall mean compensation
payable under the terms of the Amcast (LTIP) or any other
plan which replaced the LTIP.
(C) The compensation and benefits to be provided to Executive
pursuant to paragraph 3 of this agreement upon termination
of Executive's employment with the Company for any reason
other than Cause within two years following a change in
control of the Company include the following:
(i) Subject to the provisions of paragraph 8 hereof, the
Company shall pay to Executive as severance pay in a
lump sum in cash on the first day following the Date of
Termination, the following amounts:
(a) Executive's full salary through the Date of
Termination at Executive's annual base salary rate
in effect at the time Notice of Termination is
given; and also the amount of Incentive
Compensation and Long Term Incentive Compensation
to any completed period or periods which has been
earned by or awarded to Executive but which has
not yet been paid to Executive.
(b) In lieu of any further salary payments to
Executive for periods subsequent to the Date of
Termination, an amount (the "Additional
Compensation Payment") equal to three hundred
percent (300%) of the sum of Executive's annual
base salary at the rate in effect as of the Date
of Termination (or, if higher, at the rate in
effect at the time of the change in control) plus
an amount equal to three times the average annual
amount awarded to Executive as Incentive
Compensation for the two years immediately
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preceding the year during which the Date of
Termination occurs (whether or not fully paid).
(c) All amounts due Executive under the terms of the
LTIP as a result of a change of control.
(d) An amount in cash equal to the aggregate spread
between the exercise prices of all options granted
to Executive under the Company's existing stock
option plans or any stock option plan adopted by
the Company subsequent to the date hereof
("Options") which are then outstanding, whether or
not then fully exercisable, and the higher of (a)
the Fair Market Value of Common Share of the
Company ("Company Shares") on the Date of
Termination or (b) the average price per Company
Share actually paid by the acquiring party in
connection with any change in control of the
Company. As used in this subparagraph, "Fair
Market Value" shall mean (1) in the event the
Company Shares are listed on any exchange or in
the NASD National Market System, the last sale
price on such exchange or System on the Date of
Termination (or last trading date prior thereto)
or, if there are no sales on such date, the mean
between the representative bid and asked prices
for Company Shares on such exchange or System at
the close of business on such date or (2) in the
event that there is then no public market for the
Company Shares or that trading in the Company
Shares is sporadic and the mean between any bid
and asked prices is not representative of fair
market value, the fair market value of the Company
Shares determined in accordance with ss.2031-2(f)
of the Treasury Regulations or any successor
provision thereto. Any Option for which payment is
made as prescribed in this subparagraph (c) shall
be canceled effective upon the making of such
payment.
(e) All legal fees and expenses reasonably incurred by
Executive in good faith as a result of such
termination (including all such fees and expenses,
if any, incurred in contesting or disputing any
such termination or in seeking to obtain or
enforce any right or benefit provided by this
agreement).
(f) Interest at a rate equal to three percent (3%) per
annum plus the per annum rate announced from time
to time by the First National Bank of Chicago as
its "prime rate", compounded daily from the due
date of any payment required to be made by the
company under any provision of the agreement
through the date such payment is actually made.
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(ii) The Company shall, at its expense, continue to provide
to Executive financial planning and tax preparation
services the same or similar to those provided to
Executive prior to the change of control and to
continue to maintain in full force and effect for
Executive's continued benefit all life insurance,
medical, health, and accident plans, programs and
arrangements in which Executive was entitled to
participate at the time of the change in control,
provided that Executive's continued participation is
possible under the terms of such plans, programs and
arrangements. In the event that the terms of any such
plan, program, or arrangement do not permit Executive's
continued participation or that any such plan, program
or arrangement has been or is discontinued or the
benefits thereunder have been or are materially
reduced, the Company shall arrange to provide, at its
expense, benefits to Executive which are substantially
similar to those which Executive was entitled to
receive under such plan, program or arrangement at the
time of the change in control. The Company's obligation
under this subparagraph (ii) shall terminate on the
earliest of the following dates: (a) the third
anniversary date of the Date of Termination, (b) the
date an essentially equivalent and no less favorable
benefit is made available to Executive by a subsequent
employer or (c) the date that would have been
Executive's normal retirement date under the Company's
defined benefit pension plan for salaried employees had
Executive's remained employed by the Company.
(iii) In the event that because of their relationship to
Executive, members of Executive's family or other
individuals are covered by any plan, program, or
arrangement described in subparagraph (ii) above
immediately prior to the Date of Termination, the
provisions set forth in subparagraph (ii) shall apply
equally to require the continued coverage of such
persons; provided, however, that if under the terms of
any such plan, program or arrangement any such person
would have ceased to be eligible for coverage during
the period in which the Company is obligated to
continue coverage for Executive, nothing set forth
herein shall obligate the Company to continue to
provide coverage for such person beyond the date such
coverage would have ceased even if Executive had
remained an employee of the Company.
(iv) The Company shall enable Executive to purchase the
automobile, if any, which the Company was providing for
Executive's use at the time Notice of Termination was
given at the wholesale value as set out in the latest
Black Book published by National Auto Research Division
of Hearst Business Media Corporation, of such
automobile at such time.
(E) In the event that any payment to the Executive (whether pursuant to
the terms of this Agreement or any other plan, arrangement or agreement
with the Company, any person whose actions result in a change of control
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or any person affiliated with the Company or such persons) shall be
subject to the tax (the "Excise Tax") imposed by Section 4999 of the
Internal revenue Code of 1954, as amended (the "Code") or any successor
provision, the Company shall pay to the Executive, prior to the date
upon which the Executive is required to pay the Excise Tax, an
additional amount (the "Gross-Up Payment"), appropriately calculated by
the Company's independent auditor, equal to the Excise Tax on such
payment and any additional federal, state, local tax and additional
Excise Tax incurred by the Executive in respect of such Gross-Up
Payment. For purposes of determining whether any payment to the
Executive is subject to the Excise Tax (i) all payments received or to
be received by the Executive in connection with a change of control of
the Company or the termination of employment of the Executive (whether
pursuant to the terms of this Agreement or any other plan, arrangement
or agreement with the Company, any person whose action results in a
change of control or any person affiliated with the Company or such
persons) shall be treated as "parachute payments" within the meaning of
Section 280(G)(b)(2) of the Code, and all "excess parachute payments"
within the meaning of Section 280 (G)(b)(i) shall be treated as subject
to the Excise Tax and (ii) the value of any noncash benefits on any
deferred payment or benefit shall be determined by the Company's
independent auditors in accordance with the principles of Sections 280
(G)(d)(3) and (7) of the Code. For purposes of determining the amount of
the Gross-Up Payment, unless the Executive notifies the Company's
independent auditor to the contrary the Executive shall be deemed to pay
federal income taxation at the maximum applicable individual rate in the
calendar year in which the Gross-Up Payment is to be made and taxes at
the maximum applicable rate in the state and locality of the Executive's
residence on the Date of Termination, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such
state and local taxes. In the event that the Excise Tax is subsequently
finally determined to be less than the amount taken into account
hereunder at the time of termination of the Executive's employment, the
Executive shall repay to the Company at the time that the amount of such
reduction in Excise Tax is finally determined the portion of the
Gross-Up Payment attributable to such reduction plus interest on the
amount of such repayment at the then current prime rate.
(F) Executive shall not be required to mitigate the amount of any
payment provided for in this agreement by seeking other employment or
otherwise; provided, however, that in the event that Executive shall
obtain other employment at any time within three years immediately
following Executive's Date of Termination, 20% of all earnings obtained
by reason of such other employment during the three year period
immediately following Executive's Date of Termination shall be payable
to the Company in full satisfaction of any obligation Executive has to
mitigate payment made to Executive by the Company. Upon obtaining any
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such other employment, Executive, within thirty (30) days thereof, shall
notify the Company in writing of such other employment and the aggregate
compensation (including Incentive Compensation, bonuses and all other
forms of cash and contingent remuneration) to which Executive will be
entitled. During each of the three years immediately following
Executive's Date of Termination, Executive shall provide the Company, on
or before April 15 of each year following such year, a photostatic copy
of Executive's federal income tax return (including all schedules and
exhibits thereto), as filed with the Internal Revenue Service for the
preceding calendar year.
6. RIGHTS AS FORMER EMPLOYEE. Nothing contained in this agreement shall be
construed as preventing Executive, and shall not prevent Executive,
following any termination of Executive's employment whether pursuant to
this agreement or otherwise, from thereafter participating in any benefit
or insurance plans, programs or arrangements (including without limitation,
any retirement plans or programs) in the same manner and to the same extent
that Executive would have been entitled to participate as a former employee
of the Company had this agreement not have been executed, except, however,
Executive shall not be entitled to any severance payments under any
severance pay programs of the Company (other than this agreement) if
Executive is paid the benefits provided for under this agreement.
7. SUCCESSORS. The Company shall require any Successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by
agreement in form and substance satisfactory to Executive, to expressly
assume and agree to perform this agreement in the same manner and to the
same extent that the Company would be required to perform it if no such
succession had taken place. Failure of the Company to obtain such agreement
prior to the effectiveness of such succession shall be a breach of this
agreement and shall entitle Executive to compensation from the Company in
the same amount and on the same terms as Executive would be entitled
hereunder if Executive terminated Executive's employment other than for
cause, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Date of
Termination.
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 should
die while any amounts would still be payable to Executive hereunder if
Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid to such beneficiary or beneficiaries as
Executive shall have designated by written notice delivered to the Company
prior to Executive's death or, failing such written notice, to Executive's
estate.
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8. UNAUTHORIZED DISCLOSURE; INVENTIONS.
(A) During the period of Executive's employment hereunder, and for a
period of five (5) years following the termination of such employment,
Executive hereby agrees that Executive will not, without the written
consent of the Board or a person authorized thereby, disclose to any
person, other than an employee of the Company, a person to whom
disclosure is reasonably necessary or appropriate in connection with the
performance by Executive of Executive's duties as an executive of the
Company or pursuant to any order or process of any court or regulatory
agency, any material confidential information obtained by Executive
while in the employ of the Company with respect to any of the Company's
products, improvements, formulae, designs or styles, processes,
customers, methods of distribution or methods of manufacture; provided,
however, that confidential information shall not include any information
known generally to the public (other than as a result of unauthorized
disclosure by Executive) or any information of a type not otherwise
considered confidential by persons engaged in the same business or a
business similar to that conducted by the Company.
(B) Inventions. Any and all inventions made, developed or created by
Executive (whether at the request or suggestion of the Company or
otherwise, whether alone or in conjunction with others, and whether
during regular hours of work or otherwise) during the period of
Executive's employment by the Company, which may be directly or
indirectly useful in, or relate to, the business of or tests being
carried out by the Company or any of its subsidiaries or affiliates,
will be promptly and fully disclosed by Executive to an appropriate
executive officer of the Company and shall be the Company's exclusive
property as against Executive, and Executive will promptly deliver to an
appropriate executive officer of the Company all papers, drawings,
models, data and other material relating to any invention made,
developed or created by Executive as aforesaid.
Executive will, upon the Company's request and without any payment
therefor, execute any documents necessary or advisable in the opinion of
the Company's counsel to direct issuance of patents to the Company with
respect to such inventions as are to be the Company's exclusive property
as against Executive under this subsection (b) or to vest in the Company
title to such inventions as against the Executive, the expense of
securing any patent, however, to be borne by the Company.
(C) The foregoing provision of this Section 8 shall be binding upon the
Executive's heirs, successors and legal representatives.
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9. NOTICES. All notices required or permitted to be given under this
agreement shall be in writing and shall be mailed (postage prepaid by
either registered or certified mail) or delivered, if to the Company,
addressed to:
Amcast Industrial Corporation
7887 Washington Village Drive
Dayton, Ohio 45459
Attention: Secretary
and if to Executive, addressed to:
John H. Shuey
696 Uplands Camp Road
Dayton, Ohio 45419
Either party may change the address to which notices to such party
are to be directed by giving written notice of such change to the
other party in the manner specified in this paragraph. All
notices, including without limitation, any Notice of Termination,
shall be deemed to have been given upon the date of actual receipt
of the recipient party.
10. ARBITRATION. Any dispute or controversy arising out of or relating to
this agreement shall be settled by arbitration in Dayton, Ohio, in
accordance with the rules then obtaining of the American Arbitration
Association, and judgment may be entered on the arbitrator's award in any
court having jurisdiction. The decision of such arbitrator shall be final,
binding, and not appealable.
11. MISCELLANEOUS. No provision of this agreement may be modified, waived,
or discharged unless such waiver, modification or discharge is agreed to in
writing, signed by Executive and such officer of the Company as may be
specifically designated by the Board. No waiver by either party hereto at
any time of any breach by the other party hereto of, or of compliance by
such other party with, any condition or provision of this agreement to be
performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been
made by either party which are not set forth expressly in this agreement.
12. GOVERNING LAW. The validity, interpretation, construction and perfor-
mance of this agreement shall be governed by the laws of the State of Ohio,
without giving effect to the principles of conflicts of law thereof.
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13. VALIDITY. The invalidity or unenforceability of any provision of this
agreement shall no affect the validity or enforceability of any other
provision, which shall remain in full force and effect.
EXECUTIVE AMCAST INDUSTRAL CORPORATION
/s/ J.H. SHUEY By: /s/R. W. Van Sant
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John. H. Shuey R. William Van Sant
Title: Chairman, Compensation Committee
September 12, 2000 September 5, 2000
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Date Date
