EXHIBIT ........
VISKASE CORPORATION
SEVERANCE PAY POLICY
Viskase Corporation (the "Company") hereby adopts the Viskase
Corporation Severance Pay Policy (this "Policy"), effective as of
December 1, 1999.
A. Covered Employees
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All full-time salaried Management Incentive Plan ("MIP")
participants, and those employees listed on Attachment A, employed
by the Company or its subsidiaries at the time of a Change of
Control (as defined herein) are covered by this Policy
("Employees").
B. Eligibility
-----------
(1) In the event of a Change of Control (other than a
sale of the Company's specialty plastic films
business), an Employee shall be eligible for the
severance pay set forth in this Policy for a period
of twenty-four (24) months following a Change of
Control upon the occurrence of one of the following
events:
(a) any involuntary separation of employment
from the Company for any reason other than
death, disability or willful misconduct on
the part of the Employee;
(b) any voluntary separation of employment from
the Company following a reduction in the
Employee's base compensation and incentive
bonus opportunity from that in effect on the
day immediately before the effective date of
the Change of Control;
(c) any voluntary separation of employment from
the Company following a reduction in the
Employee's principal responsibilities from
those in effect on the day immediately before
the effective date of the Change of Control;
or
(d) any change in the Employee's work location
that is different than that on the day
immediately before the effective date of the
Change of Control by more than fifty (50)
miles, except for those Employees who, on a
project basis, would normally change
location.
(2) In the event of a Change of Control involving the
sale of the Company's specialty plastic films
business, casings business, or both, an Employee
who accepts employment with the purchaser of one of
the Company's businesses following such Change of
Control shall be eligible for a period of
twenty-four (24) months following a Change of
Control for the severance pay set forth in this
Policy upon the occurrence of one of the following
events:
(a) any involuntary separation of employment
from the purchaser for any reason other than
death, disability or willful misconduct on
the part of the Employee;
(b) any voluntary separation of employment from
the purchaser following a reduction in the
Employee's base compensation and incentive
bonus opportunity from that in effect on the
day immediately before the effective date of
the Change of Control;
(c) any voluntary separation of employment from
the purchaser following a reduction in the
Employee's principal responsibilities from
those in effect on the day immediately before
the effective date of the Change of Control;
or
(d) any change in the Employee's work location
that is different by more than fifty (50)
miles than the location at which the Employee
accepts employment with the purchaser (i.e.,
relocation agreed to as a part of initial
employment with purchaser would not trigger
severance obligations hereunder).
(3) If an Employee is designated by the Company as
being part of the business being sold and is not
offered employment by the purchaser or does not
accept employment with the purchaser, such Employee
shall be eligible for severance benefits hereunder
if such Employee's employment with the Company is
terminated on the closing date of the sale of the
business being sold.
Notwithstanding anything contained herein to the
contrary, an Employee who accepts employment with
the purchaser of one of the Company's businesses
(whether immediately after the purchase of the
business being sold or after the end of working for
the purchaser on a temporary basis), shall not be
entitled to any severance or other benefits under
this Policy unless and until an event specified in
Section B(2) above occurs. Similarly, with respect
to any persons who accept temporary employment with
a purchaser or otherwise provides services to a
purchaser on a temporary basis, no severance
benefits shall be payable hereunder until and if
such person ceases employment or providing services
to the purchaser.
C. Amount of Severance Pay
-----------------------
An Employee eligible for severance pay under Section B shall
receive the following:
(1) Cash Payment
(a) Management Incentive Plan Participants,
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Levels I-P and Level I
----------------------
An amount equivalent to eighteen (18) months
salary (at the highest annual rate in effect
during the three-year period prior to
termination), plus a pro-rata share of any
bonus earned under the MIP or any comparable
plan in effect at the time of termination.
(b) Management Incentive Plan Participants,
---------------------------------------
Levels II and III
-----------------
An amount equivalent to twelve (12) months
salary (at the highest annual rate in effect
during the three-year period prior to
termination), plus a pro-rata share of any
bonus earned under the MIP or any comparable
plan in effect at the time of termination.
(c) Management Incentive Plan Participants,
---------------------------------------
Level IV
--------
An amount equivalent to six (6) months salary
(at the highest annual rate in effect during
the three-year period prior to termination),
plus a pro-rata share of any bonus earned
under the MIP or any comparable plan in
effect at the time of termination.
(d) Regional Vice Presidents Listed on
----------------------------------
Attachment A
------------
An amount equal to twelve (12) months salary
(at the highest annual rate in effect during
the three-year period prior to termination).
(e) Other Employees Listed on Attachment A
--------------------------------------
An amount equal to six (6) months salary (at
the highest annual rate in effect during the
three-year period prior to termination).
(f) Form of Payment
---------------
Employees will receive their cash severance
payment in semi-monthly installment payments
consistent with paragraphs (a), (b), (c), (d)
and (e) above and the Company's established
payroll procedures for the duration of the
severance period. All cash severance
payments will be net of all applicable
federal and state withholding taxes.
(4) Group Insurance
---------------
Medical, life and dental insurance benefits, if
any, in effect at the time of termination shall be
extended to the earlier of when the Employee is
eligible under another employer's plan or the end
of the installment payment period. All other
insurance coverage (LTD, AD/D, travel/ accident)
will cease effectiveness as of the conclusion of
the severed Employee's last day of active
employment with the Company or any purchaser of one
of the Company's businesses.
(5) Viskase Corporation Retirement Savings Plan
-------------------------------------------
Participation in the Viskase Corporation Retirement
Savings Plan ("SAVE Plan") will cease as of the
Employee's last day of active employment with the
Company. Company contributions to the Plan on
behalf of such Employee will also cease as of the
Employee's last day of active employment with the
Company. Termination of employment with the
Company upon a Change of Control will cause an
acceleration of the vesting provision of the SAVE
Plan such that the terminated Employee will be one
hundred percent (100%) vested in the Company's
contributions on his/her behalf as of the last day
of the Employee's active employment with the
Company.
(6) Vacation
--------
Employees shall receive cash payment for earned but
not taken vacation in addition to severance pay.
Payments for earned but not taken vacation shall be
made at the time of termination of employment from
the Company, or the purchaser of one of the
Company's businesses if the Employee accepts
employment with the purchaser.
(7) Outplacement
------------
At the discretion of the Company, outplacement
services may be provided for Employees in the
manner determined by the Company. No payment shall
be made to an Employee in lieu of outplacement
services.
D. Severance Policy Integration
----------------------------
Notwithstanding any provision of this Policy to the
contrary, the severance benefits and accrued vacation
payable under this Policy shall be reduced by the severance
benefits and accrued vacation then payable to an Employee
under any statute or regulation or any other agreement,
understanding, plan, policy, program, statute, regulation or
arrangement of the Company, or a subsidiary of the Company,
or a purchaser of one of the Company's businesses. In
addition, in the event an Employee offered permanent
employment with the purchaser of one of the Company's
businesses does not accept such offer but takes a position
(as an employee or otherwise) with the purchaser on a
temporary basis the severance payable hereunder shall be
reduced by an amount equal to 50% of any "stay bonus" or
similar one-time payment by the purchaser.
E. Other Company Payments
----------------------
In addition to any severance benefits payable to an Employee
under this Policy, such Employee shall be entitled to
receive all benefits payable under any other plan or
agreement of the Company unrelated to severance benefits.
F. Change of Control Definition
----------------------------
A "Change of Control" for purposes of this Policy, shall
mean the occurrence of one of the following events: (i) any
person (as such term is used in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934 (the "Exchange Act")) is
or becomes a "beneficial owner" (as defined in Rules 13d-3
and 13d-5 under the Exchange Act, except that a person shall
be deemed to have "beneficial ownership" of all shares that
any such person has the right to acquire whether such right
is exercisable immediately or only after the passage of
time); directly or indirectly, of more than 50% of the
Common Stock of Viskase Companies, Inc., (ii) during any
period of two consecutive years, individuals who at the
beginning of such period constituted the Board of Directors
of Viskase Companies, Inc. (together with any new or
replacement directors whose election by such board or whose
nomination for election by the shareholders of Viskase
Companies, Inc. was approved by a vote of a majority of the
directors of Viskase Companies, Inc. then still in office
who were either directors at the beginning of such period or
whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of
the Board of Directors of Viskase Companies, Inc. then in
office, or (iii) the sale of the Company's specialty
plastics films business or casings business, or both.
G. General Release
---------------
Notwithstanding Section B or any other provision of this
Policy to the contrary, in order to receive any severance
pay under this Policy, an Employee must sign a statement, in
such form as determined by the Company, which releases
Viskase Companies, Inc., the Company and their subsidiaries,
shareholders, directors, officers, employees, successors and
assigns from any existing and future claims except as such
claims of any nature relate directly to the payment of any
benefits due under this Policy or any other severance
benefit.
H. No Alienation of Severance Benefits
-----------------------------------
No interest of an Employee or his spouse or any other
beneficiary under this Policy, or any right to receive any
payments or distribution hereunder, shall be subject in any
manner to sale, transfer, assignment, pledge, attachment,
garnishment, or other alienation or encumbrance of any kind,
nor may such interest or right to receive a payment or
distribution be taken voluntarily or involuntarily, for the
satisfaction of the obligations or debts of, or other claims
against, an Employee or his spouse or other beneficiary,
including claims for alimony, support, separate maintenance,
and claims of bankruptcy proceedings.
I. Administration
--------------
The President of the Company and the Vice President,
Administration of Viskase Corporation will be responsible
for interpreting and assuring the effective administration
of this Policy. All exceptions to or interpretations of
this Policy must be approved in advance.
J. Duration of Policy
------------------
Subject to the second sentence of this paragraph, this
Policy may be amended or terminated at any time by the
Company. This Policy shall become effective as of December
1, 1999 and thereafter shall remain in effect until this
Policy is otherwise amended or terminated by the Company;
provided, however, that in the event a Change of Control
occurs during the term of this Policy, the term of this
Policy shall be deemed to be extended to and including the
anniversary date twenty-four (24) months following the
effective date of such Change of Control, but only with
respect to those Employees affected by such Change of
Control.
IN WITNESS WHEREOF, Viskase Companies, Inc. and Viskase
Corporation have caused this instrument to be executed by its duly
authorized officer on December 1, 1999.
VISKASE CORPORATION
By:
____________________________
F. E. Gustafson
Chairman of the Board,
President and
Chief Executive Officer
Viskase Companies, Inc.
