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Exhibit (e)(5)
FORM OF TIER-ONE EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is effective the ___ day of ______, ______, by and
between HARMON INDUSTRIES, INC., a Missouri corporation (hereinafter referred to
an "Employer"), and ___________ (hereinafter referred to as "Employee").
WHEREAS, Employer desires to employ Employee in the capacity of
of the Employer; and
WHEREAS, Employee desires to be employed by Employer in the aforesaid
capacity; and
WHEREAS, Employer and Employee desire to set forth in writing the terms and
conditions of their agreements and understandings.
NOW, THEREFORE, in consideration of the foregoing and of other good and
valuable consideration, the receipt and sufficiency of which are hereby
acknowledged, the parties hereto agree as follows:
1. TERM OF EMPLOYMENT. Employer shall employ Employee in the capacity set
forth below. This Employment Agreement shall replace all employment agreements,
if any, entered into between Employer (or Employer's parent, Harmon
Industries, Inc.) and Employee prior to the effective date of this Employment
Agreement. Employee's employment under this Agreement shall continue for a
rolling twelve (12) month term. This Agreement except for Sections 6, 7, 8, 9,
10, 11, 17, 18, and 20 hereof which shall survive the termination of this
Agreement, may be terminated in accordance with the provisions of 11.1, 11.2,
11.3 and 11.4 hereof.
2. DUTIES OF EMPLOYEE.
2.1 Employee's title shall be ___________ of the Employer. In accepting such
employment by Employer, Employee shall, INTER ALIA, undertake and assume the
responsibility for performing for and on the behalf of Employer such duties
consistent with the said office as shall be reasonably assigned to Employee by
the Chief Executive Officer of the Employer, at any time and from time to time.
Employee covenants and agrees that she will, at all times, faithfully,
industrially, and to the best of her ability, experience and talents, perform
all of the duties that may be reasonably required of and from such Employee
pursuant to the express and implicit terms hereof, to the reasonable
satisfaction of Employer. Any business activity of Employee other than those
related to Employer's business shall not interfere with Employee's obligation to
Employer under this agreement at any time.
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2.2 Employee covenants and agrees that, at all times during the term of this
Agreement, Employee shall devote her full time efforts to her duties as an
employee of the Employer. Employee further covenants and agrees that she will
not, directly or indirectly, engage or participate in any activities at any time
during the term of this Agreement in conflict with the best interests of the
Employer. Employer agrees that the foregoing shall not preclude Employee from
serving as a member of the board of directors of one or more for-profit
companies (in addition to Employer or its subsidiaries); provided that in each
such instance Employee shall have received the prior approval of the Chief
Executive Officer of the Employer.
3. COMPENSATION.
3.1 As base compensation for all services to be rendered for Employer or
Employee under this Agreement, Employee shall be paid annual salary of
($ ) payable in equal bi-weekly payments, and such salary shall
be prorated at commencement or expiration of the term in the event that the
first or last pay period is less than a bi-weekly period. Any additional salary
increments and the times and amounts of such shall be in the sole discretion of
the Board of Directors of the Employer.
4. ADDITIONAL BENEFITS.
4.1 In addition to, and not in limitation of, the compensation referred to
in Section 3 hereof, Employee shall be eligible to receive an Incentive Cash
Bonus. The times and amounts of such Incentive Cash Bonus for future years
during the term of this Agreement shall be at the sole discretion of the Board
of Directors of Employer.
4.2 In addition to, and not in limitation of the compensation referred to in
paragraph 3 hereof, Employee shall be entitled to additional benefits during the
term hereof including, but not limited to, medical insurance coverage for
Employee and any other insurance programs which may be offered by Employer to
other executives of Employer from time to time upon terms similar to those made
available to other executives of Employer.
4.3 In addition to the compensation and Officer Bonus described in Sections
3.1, 4.1 and 4.2 above, Employee may be eligible to receive stock or option
bonuses, as determined by the Compensation Committee of Employer and ratified by
the Board of Directors of Employer in accordance with the terms of the Long-Term
Incentive Plan (or other similar employee benefit plans) of Employer. The
timing, form and amount of such bonuses shall be in the sole discretion of the
Compensation Committee of the Board of Directors of Employer.
4.4 In addition, Employee shall participate in Employer's Executive Defined
Contribution Plan during the term of this Agreement; provided that the Board of
Directors, or the Compensation Committee thereof acting on behalf of the Board
of Directors of Employer, shall have approved the establishment of such Plan and
the participation of the Employee therein.
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4.5 Employee shall be entitled to vacation benefits (in accordance with
corporate policy applicable from time to time to the executive officers of
Employer) and automobile allowances or reimbursements to the same extent as
other executive officers of Employer.
5. REIMBURSEMENT OF BUSINESS EXPENSES. Employee is hereby authorized by
Employer to incur reasonable, ordinary and necessary business expenses for
promoting Employer's business, including expenditures for travel and
entertainment.
Employer shall reimburse Employee for all such business expenses, provided
that Employee submits to Employer an account book, diary, or similar record in
which Employee has recorded, at or near the time each expenditure was made,
(i) the amount of the expenditure, (ii) the time, place, and nature of the
travel or entertainment expense, (iii) the business reason for the expenses and
the business benefit derived or expected to be derived therefrom, and (iv) the
names, occupations, and other data concerning individuals entertained sufficient
to establish their business relationship with Employer.
The right to reimbursement is also subject to the requirements that Employee
submit to Employer supporting documents, such as receipts or paid bills,
sufficient to establish the amount, date, place, and essential character of
(i) any expenditure for lodging while traveling away from home and (ii) any
other expenditure of Twenty-Five Dollars ($25.00) or more. All entertainment
expenses shall also be subject to approval by the Employer's Chief Executive
Officer.
6. DISCLOSURE OF INFORMATION. Employee acknowledges that, in and as a
result of her employment hereunder, she will be making use of, requiring
and/or adding to confidential information of a special and unique nature and
value relating to such matters as Employer's trade secrets, systems,
procedures, manuals, confidential reports and lists of customers, as well as
the nature and method used and preferred by Employer's customers, and the
fees paid by such customers. As a material inducement to Employer to enter
into this Agreement, and to pay to Employee the compensation referred to in
paragraph 3 hereof (as well as any additional benefits referred to in
paragraph 4 hereof), Employee covenants and agrees that she shall not, at any
time during the term of her employment hereunder or after the termination of
Employee's employment hereunder for any reason, directly or indirectly, use,
divulge or disclose, for any purpose whatsoever, any of such confidential
information which has been obtained by or disclosed to her as a result of her
employment by Employer. In the event of a breach or threatened breach by the
Employee of any of the provisions of this paragraph 6, Employer, in addition
to and not in limitation of any other rights, remedies or damages available
to Employer at law or in equity, shall be entitled to a permanent injunction
in order to prevent or to restrain any such breach by Employee, or by
Employee's partners, agents, representatives, servants, employers, employees
and/or any and all persons directly or indirectly acting for or with her.
7. COVENANTS AGAINST COMPETITION. Employee acknowledges that her services
to be rendered hereunder are of a special and unusual character which have a
unique value to Employer, the loss of which cannot adequately be compensated by
damages in an action at law. In view of the unique value to Employer of the
services of Employee for which Employer has contracted hereunder, and because of
the confidential information to be obtained by or disclosed to Employee,
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as hereinabove set forth, and as a material inducement to Employer to enter
into this Agreement, and to pay to Employee the compensation referred to in
paragraph 3 hereof (as well as any additional benefits referred to in
paragraph 4 hereof), Employee covenants and agrees that during the term of
employment and for a period of twelve (12) months thereafter or for any
period pursuant to Section 11.2 hereof, that Employee is receiving any
severance pay, whichever is greater, Employee shall not, directly or
indirectly, either individually or as an employee, consultant or contractor
of others: (1) engage in any business the same or similar to the business of
Employer in any geographic area in which Employer is doing business; or (2)
contact, sell to or solicit business from any business or entity which was a
customer or account of Employer during the five (5) years immediately
preceding the end of Employee's employment.
8. ACCOUNTING FOR PROFITS. Employee covenants and agrees that, if she
shall violate any of her covenants or agreements under paragraphs 6 or 7 hereof,
Employer shall be entitled to an accounting and repayment of all profits,
compensation, commissions, renumerations or benefits which Employee directly or
indirectly has realized and/or may realize as a result of, growing out of or in
connection with any such violation; such remedy shall be in addition to and not
in limitation of any injunctive relief or other rights or remedies to which
Employer is or may be entitled at law or in equity or under this Agreement.
9. RETURN OF MATERIALS. Employee agrees that upon the termination of this
employment with Employer she will promptly return to Employer all manuals,
records, materials and other papers pertaining to transactions handled by
Employee, or pertaining to Employer's business and all copies of the same.
10. REASONABLENESS OF RESTRICTIONS.
10.1 Employee has carefully read and considered the provisions of paragraphs
6, 7, 8 and 9 hereof and, having done so, agrees that the restrictions and
agreements set forth in such paragraphs (including, but not limited to, the time
period or restriction) are fair and reasonable and are reasonably required for
the protection of the interests of Employer, its respective officers, directors
and other employees.
10.2 In the event that, notwithstanding the foregoing, any of the provisions
of paragraphs 6, 7, 8 and 9 hereof shall be held to be invalid or enforceable,
the remaining provisions thereof shall nevertheless continue to be valid and
enforceable as though the invalid and unenforceable parts had not been included
therein. In the event that any provision of paragraphs 6 or 7 relating time
period and/or areas of restriction, the time period and/or area of restriction
under this Agreement shall be declared by a court of competent jurisdiction to
exceed the maximum time period and/or areas of restriction shall be deemed to
become and thereafter be the maximum time period and/or areas which such court
deems reasonable and enforceable.
11. TERMINATION OF EMPLOYMENT.
11.1 Nothing in this Agreement shall be construed to prevent Employer
from terminating Employee's employment under and pursuant to this Agreement
at any time for cause or
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if Employee shall have violated any material provisions of this Agreement.
Termination of Employee's employment under this Section shall not constitute
a breach of this Agreement by Employer, and shall relieve Employer of any and
all obligation to pay any compensation provided by Section 3, 4 (as to
provisions relating to contributions to the Executive Defined Contribution
Plan subsequent to the date of termination only the Employer's contribution
obligations are terminated) and 5 to Employee for any period after the date
of such termination.
Termination of Employee's employment under this Agreement for cause shall
include, but shall not be limited to, the following:
a) fraud, misappropriation or embezzlement by Employee in connection with
her employment under this Agreement;
b) the use by Employee of illegal narcotic substances;
c) the immoderate use of alcoholic beverages by Employee which interferes
with the performance of Employee's duties under this Agreement; and
d) the failure or inability of Employee, for a continuous six (6) month
period, to work or to comply with the reasonable employment requirements
established for Employee from time to time by the Chief Executive Officer
of Employer.
11.2 Other than a termination following a Change in Control as provided in
Section 18 hereunder, in the event that (i) Employee's employment under this
Agreement is terminated by the Employer for any reason other than for cause as
described in Section 11.1 above or (ii) in the event of a material breach by
Employer of its obligations under this Agreement, Employee shall be entitled to
severance pay equal to base salary payable to Employee under the terms of
Section 3.1 hereof for a period of twelve (12) months from the date of
termination of this Agreement. In addition, Employer shall continue to provide
medical insurance benefits to Employee during the severance period. The
severance payments provided hereunder shall be in lieu of and in complete
substitution for all compensation which would have been due and owing to
Employee for the remainder of the then current employment term. No severance
payments under this Section arise or are owed by Employer hereunder to Employee
after Employee has reached Normal Retirement Age as defined in the Employee's
Executive Defined Contribution Plan identified in Section 4.4 hereof. If such
termination occurs, the severance amount due hereunder shall be calculated based
upon the base salary as determined by 3.1 in effect immediately prior to such
termination. The total of any severance pay due Employee under this Section
shall be reduced to an amount equal to twenty percent (20%) of remaining
severance payments otherwise due hereunder after the receipt of any compensation
earned by Employee from other employment sources (other than from Employer or
any of its subsidiaries) in Employee's occupation during the twelve (12) month
period in which severance payments are payable hereunder. Any severance pay or
benefits due under the terms of this Section shall be subject to withholding for
federal, state, and local taxes, as applicable.
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11.3 This Agreement may be terminated by Employee upon one hundred eighty
(180) days written notice to Employer. After such termination date, all
compensation described in Sections 3.1 and 4.1 through 4.4 hereof shall cease,
other than the Employee's vested rights in the Executive Defined Contribution
Plan described in Section 4.4. The rights of Employee under the other benefit
plans of Employer shall be governed as provided in the respective plans.
11.4 This Agreement may be terminated by the written agreement of the
parties hereto, subject to the requirements of Section 15.
12. BURDEN AND BENEFIT. This Agreement shall be binding upon and shall
inure to the benefit of Employer and Employee, and their respective heirs,
personal and legal representatives, successors and assigns.
13. GOVERNING LAW. In view of the fact that the principal office of
Employer is located in the State of Missouri, it is understood and agreed that
the construction and interpretation of this Agreement shall at all times and in
all respects be governed by the laws of the State of Missouri.
14. SEVERABILITY. The provisions of this Agreement (including
particularly, but not limited to, the provisions of paragraphs 6, 7, 8 and 9
hereof) shall be deemed severable, and the invalidity or unenforceability of any
one or more of the provisions hereof shall not affect the validity and
enforceability of the other provisions hereof.
15. NOTICES. Any notice required to be given hereunder shall be sufficient
if in writing, and sent by certified or registered mail, return receipt
requested, first-class postage prepaid, to her residence in the case of
Employee, and to its principal office in the State of Missouri in the case of
Employer.
16. ENTIRE AGREEMENT. This Agreement contains the entire agreement and
understanding by and between Employer and Employee with respect to the
employment herein referred to, and no representations, promises, agreements or
understandings, written or oral, not herein contained shall be in force or
effect. No amendment or modification hereof shall be valid or binding unless the
same is in writing and signed by the party intended to be bound. No waiver of
any provision of this Agreement shall be valid unless the same is in writing and
signed by the party against whom such waiver is sought to be enforced; moreover,
no valid waiver of any other provision of this Agreement at any time shall be
deemed a waiver of any other provision of this Agreement at such time or will be
deemed a valid waiver of such provision at any other time.
17. VOLUNTARY ASSISTANCE TO EMPLOYER AFTER EXPIRATION OR TERMINATION OF
EMPLOYMENT. Following the expiration or termination of Employee's employment
with Employer (including any of its subsidiaries), Employee shall voluntarily
cooperate with and assist Employer (including any of its subsidiaries), their
respective accountants and legal counsel, in investigating, analyzing, defending
or otherwise assisting or cooperating with Employer in any pending or future
claims against or involving Employer (including any of its subsidiaries) and any
of its affiliated entities, employees, officers and directors; provided, that
Employer shall reimburse Employee for
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Employee's reasonable out-of-pocket expenses. Employer's (including any of
its subsidiaries) requests for assistance hereunder shall be reasonable as to
timing and duration and shall be subject to the time requirements of any
other employment obligations of Employee. With the exception of disclosures
required by subpoena or other mandatory legal process, Employee also agrees
(1) to maintain in strict confidence any information or knowledge held by
Employee regarding pending or future claims against or involving Employer,
and (2) not to communicate with any party or governmental agency adverse to
Employer, or with a representative, agent or legal counsel for any such party
or agency, concerning any pending or future claims or litigation, without
Employer's written consent and the presence of legal counsel for Employer
(including its subsidiaries).
18. TERMINATION OF EMPLOYMENT FOLLOWING A CHANGE IN CONTROL.
18.1 Definitions relating to Termination of Employment following a Change in
Control.
a) Certain Permitted Terminations. In the event of a Change in Control, the
Employee's employment may be terminated during the term of employment
hereunder and the Employee shall not be entitled to Severance
Compensation as defined herein, in the following events (the "Permitted
Terminations"):
(i) The Employee's death provided there has been no Constructive
Termination;
(ii) If the Employee shall become permanently disabled within the
meaning of, and begins to receive disability benefits pursuant to
the long-term disability plan in effect for senior executives of
the Employer immediately before the date of Change in Control or
such other long term disability plan in effect at the time of
disability;
(iii) If the Employee retires or terminates her employment more than
twelve (12) months after the date of Change in Control; or
(iv) For "Cause", which for purposes of this Agreement shall mean that,
within six (6) months prior to any termination the Employee shall
have committed any of the elements of "cause" set forth in
Section 11.1 hereof.
b) For purposes of this Section 18, a "Change in Control" shall occur if
at any time any of the following events shall occur (other than as a
consequence of an acquisition or other similar transaction initiated by
Employer of an operating company or significant portion thereof):
(i) If any offer (other than an offer by Employer and other than an
offer by an underwriter, acting as an underwriter, in connection
with Employer's public sale of securities) to purchase or otherwise
acquire Common Stock, other voting stock or assets of Employer for
cash securities of another corporation or some combination thereof
results in the purchase or acquisition by the offeror of at least
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twenty percent (20%) of the outstanding Common Stock or other voting
stock of Employer or assets of Employer with a fair market value of
at least forty percent (40%) of the total fair market value of
Employer's assets (with the fair market value of assets determined
as of the date of the offer);
(ii) Employer is merged, consolidated or reorganized into or with
another corporation or other legal entity, and as a result of such
merger, consolidation or reorganization forty percent (40%) of its
Common Stock or other voting stock is exchanged, transferred,
reissued or acquired pursuant to such merger, consolidation, or
reorganization;
(iii) More than fifty percent (50%) of the members of Employer's Board of
Directors are elected to Employer's Board of Directors in any one
(1) calendar year period and such members comprising fifty percent
(50%) of the members of the Board of Directors were not immediately
prior to such election, serving as members of Employer's Board of
Directors; or
(iv) Unless otherwise set forth herein, the date of a Change in Control
shall be the closing date of such sale, acquisition, merger,
reorganization or consolidation.
During the period that there is a final offer or solicitation to purchase or
otherwise acquire (including, but not limited to, offers to merge, reorganize or
consolidate) at least forty percent (40%) of the Common Stock, other voting
stock or assets of Employer, this Agreement shall be operative beginning with
the date on which such offer is made or solicitation occurs and shall remain
operative until (i) the closing date of such a sale, acquisition, merger,
reorganization or consolidation or (ii) abandonment or termination of such
offer, and the Employee shall be entitled to all benefits during such offering
period, including any provision for Severance Compensation payable hereunder;
provided, however, that the only event which shall constitute a Constructive
Termination prior to the date set forth in the earlier of (i) or (ii) above
shall be the involuntary termination of employment of the Employee not for Cause
which occurs prior to the date set forth in the earlier of (i) or (ii) above. In
the event that the pending offer or solicitation results in a Change in Control,
this Agreement shall remain operative according to its terms and provisions. In
the event the pending offer or solicitation does not result in a Change in
Control, the Employee shall continue to receive any Severance Compensation to
which she became entitled by reason of her Constructive Termination prior to the
earliest of the dates set forth in (i) or (ii) above.
c) Constructive Termination. In the event of a Change in Control
followed by (or simultaneous with) a Constructive Termination within twelve
(12) months of the Change in Control and during the term of employment
hereunder, the Employee shall be entitled to the Severance Compensation as
defined in Section 18.2. A Constructive Termination shall occur in any of the
following events:
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(i) Failure to elect, reelect or otherwise maintain the Employee in the
office or position in the Employer which the Employee held
immediately before a Change in Control;
(ii) A significant adverse change in the nature or scope of the
authorities, powers, functions, responsibilities or duties attached
to the position with the Employer which the Employee held
immediately before the Change in Control; or a reduction in the
aggregate of the Employee's Base Pay and method of calculation of
the bonus to be received from the Employer; or the termination of
the Employee's rights to any substantial employee benefits to which
she was entitled immediately before the Change in Control or a
substantial reduction in scope or value thereof without the prior
written consent of the Employee, any of which is not remedied
within ten (10) calendar days after receipt by the Employer of
written notice from the Employee of such change, reduction or
termination, as the case may be; provided that neither the
termination of the Employee's position as a member of the Board of
Directors, if applicable, nor a general change in benefits payable
and applicable to substantially all employees of the Employer shall
of itself be considered a Constructive Termination if the Employee
is entitled to the same benefits provided to substantially all
employees or to benefits of equal or greater value.
(iii) If, as a result of a Change in Control and a change in
circumstances thereafter significantly affecting her position, the
Employee has been rendered substantially unable to carry out, has
been substantially hindered in the performance of, or has suffered
a substantial reduction in any of the authorities, powers,
functions, responsibilities or duties attached to the position held
by the Employee immediately before the Change in Control, which
situation is not remedied within ten (10) calendar days after
written notice to the Employer from the Employee of such
determination;
(iv) The liquidation, dissolution, merger, consolidation or
reorganization of the Employer or transfer of all or more than 40%
of its business and/or assets, unless the successor or successors
(by liquidation, merger, consolidation, reorganization or
otherwise) of the Employer shall have assumed all duties and
obligations of the Employer under this Agreement;
(v) The Employer shall relocate its principal executive offices, or
require the Employee to have her principal location of work changed
to any location which is in excess of twenty-five (25) miles from
the location thereof immediately before the Change in Control or the
Employer shall require the Employee to travel away from her office
in the course of discharging her responsibilities or duties
hereunder significantly more (in terms of either consecutive days or
aggregate days in any calendar year) than was required of her before
the Change in Control without, in either case, her prior written
consent;
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(vi) Without limiting the generality or effect of the foregoing, any
material breach of this Agreement by the Employer or any successor
thereto and failure to cure the same within any time period
specified; or
(vii) The Employee shall retire or terminate her employment within twelve
(12) months from the date of Change in Control.
18.2 SEVERANCE COMPENSATION. In the event of a Constructive Termination
within twelve (12) months of a Change in Control during the term of
employment hereunder, the Employee shall be entitled to the following rights
and the Employer shall pay to the Employee the following amounts (which,
together with payments under Sections 18.3 and 18.5, shall be the Employee's
"Severance Compensation") after the date (the "Termination Date") that the
Employee's employment is terminated:
a) The Employer shall pay the Employee in cash a lump sum payment (the
"Lump Sum Payment") in an amount equal to (i) 2.99 multiplied by (ii) an
amount equal to one full year's aggregate base pay under Section 3.1 and the
Employee's average incentive cash bonus ("Average Incentive Cash Bonus").
The Average Incentive Cash Bonus will be equal to (i) the average percentage
of compensation the Employee received as a cash incentive bonus for the
three calendar years prior to her termination of employment, multiplied by
(ii) the Employee's compensation for the calendar year in which her
employment terminates. For purposes of this paragraph, the Employee's
"compensation" shall be her base pay. In determining the Employee's
compensation for the year in which her employment terminates, the Employee
shall be treated as if she remained employed and continued to receive
compensation through the end of the calendar year in which her employment
terminates. This cash payment shall be made within 30 days after the
Employee's termination of employment; and Employee shall not be entitled to
the grant of additional incentive under the LTIP after the termination of
employment. In addition, the Employer shall pay an amount necessary to
reimburse the Employee for any federal excise tax imposed on her under
Section 4999(a) of the Internal Revenue Code of 1986, as amended (the
"Code"), or any successor section of the Code as a result of the Employee's
receipt of the Lump Sum Payment (the "Excise Tax Reimbursement Payment");
however, such Excise Tax Reimbursement Payment shall not reimburse Employee
for (i) any other federal or state income tax payable as a result of the
receipt of the Lump Sum Payment or the Excise Tax Reimbursement Payment or
(ii) any federal excise tax imposed as a result of the Employee's receipt of
the Excise Tax Reimbursement Payment. Such Lump Sum Payment and Excise Tax
Reimbursement Payment shall be payable within ten (10) business days from
the Termination Date; and
b) The Employer shall pay the Employee in cash a lump sum payment (the
"Additional Lump Sum Payment') in an amount equal to all accrued and unused
vacation and other time off allowances. Such Additional Lump Sum Payment
shall be payable within ten (10) business days from the Termination Date;
and
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c) The Employer shall provide, to the extent permitted by any applicable
plan and applicable law (e.g., COBRA), the Employee at the Employer's
expense with medical and life insurance benefits in the same or
substantially similar amounts as were in effect before the Change in Control
or in such amounts as have been agreed to in writing by the Employee since
the Change in Control for a period of up to three (3) years following the
Termination Date or the date the Employee becomes reemployed in a position
in which her salary and benefits are substantially similar to those in
effect on the Termination Date, whichever is earliest. Alternatively, the
Employer may make cash payments to the Employee equal to the cost to the
Employee of purchasing similar medical and life insurance coverage from a
source other than the Employer's employee benefit plans, taking into account
the Employee's age, health, and other particular circumstances. These cash
payments shall be made monthly unless the Employee and Employer agree that
payments will be made more frequently or less frequently. In the event the
Employee becomes re-employed during the three-year period following the
Termination Date, the Employer's obligations to maintain medical and life
insurance under this Subsection 18.2(c) (or make further cash payments in
lieu of providing that coverage) shall cease and terminate upon such
reemployment; and
d) The Employer shall pay the Employee in cash a lump sum payment equal
to three times the Average Employer's Matching Contribution for Employee
(currently, limited to four percent of annual compensation at the date of
this Amendment) to the Employer's 401(k) Plan. For purposes
of this paragraph, the "Average Employer's Matching Contribution," shall be
calculated as the sum of actual Employer's matching contribution for
Employee for each of the three calendar years prior to her termination of
employment divided by three. This cash payment shall be made within 30 days
after the Employee's termination of employment; and
e) The Employer shall pay to the Employee in cash a lump sum payment
equal to three times the average percentage of annual compensation allocated
to the Employee's ESOP Account under the Harmon Industries, Inc. Employee
Stock Ownership Plan for the three plan years ending prior to the Employee's
termination of employment, multiplied by (ii) the Employee's annual
compensation in effect for the plan year in which the Employee's employment
terminates. For this purpose, "annual compensation" shall have the meaning
given that term in the ESOP, as if the Employee remained employed and
continued to receive compensation through the end of the plan year in which
her employment terminates This cash payment shall be made within 30 days
after the Employee's termination of employment; and
f) The Employee shall be treated for purposes of her Executive Defined
Contribution Agreement as if she were employed for an additional thirty-six
(36) months following her actual termination of employment. As a
consequence, the Employee, at the end of this 36 month period, shall be
treated as having an additional thirty-six (36) months of service for
purposes of vesting, calculating her benefit (including the numerator of the
fraction used to calculate her benefit), and satisfying any requirement that
she work to age 55 to be eligible for an early retirement benefit. In
calculating the Employee's benefit under
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her Executive Defined Contribution Agreement, the Employee shall be
treated as if she continued to receive for the thirty-six (36) months her
annual compensation in effect for the calendar year in which her
employment terminated (that is, the annual compensation she would have
received for that calendar year had she remained employed through the end
of that year). As soon as practicable after adoption of Amendment Number
One to this Employment Agreement, the Employer shall amend the Employee's
Executive Defined Contribution Agreement to reflect the provisions set
forth in this paragraph.
At the end of the term of employment, as defined in Section 1 herein, the
provisions for Severance Compensation upon a Constructive Termination under this
Agreement shall lapse and the Employee shall not be entitled to Severance
Compensation under this Agreement (other than Severance Compensation payable by
reason of a Constructive Termination occurring at or prior to the end of the
term of employment).
18.3 ADDITIONAL PAYMENTS. In addition to the Severance Compensation set
forth above in Section 18.2, the Employee shall be entitled to a pro rata
portion of any earned incentive compensation or bonus in effect during the year
that a Constructive Termination occurs and such pro rata portion shall be based
on the number of days of employment in such year up to the Termination Date.
Additionally, all stock options issued and outstanding in the name of the
Employee, notwithstanding anything in the agreement(s) evidencing such stock
options to the contrary, shall become fully vested and shall be exercisable for
ninety (90) calendar days after the Termination Date.
18.4 NO MITIGATION OBLIGATION. The Parties understand that it may be
difficult for the Employee to find reasonably comparable employment following
the Termination Date, Accordingly, the parties hereto agree that the payment of
the Severance Compensation by the Employer to the Employee will be liquidated
damages, and that the Employee shall not be required to mitigate the amount of
any payment provided for in this Agreement seeking other employment or
otherwise, nor shall any profits, income, earnings or other benefits from any
source whatsoever create any mitigation, offset, reduction or any other
obligation on the part of the Employee.
18.5 OTHER CHANGE IN CONTROL PROVISIONS. Whether or not the Employee has a
Constructive Termination or otherwise becomes entitled to Severance
Compensation, the provisions of this Section below shall apply in the event of a
Change in Control.
a) EXECUTIVE DEFINED CONTRIBUTION TRUST AGREEMENTS. As soon as practical
after the adoption of this Amendment, the Employer shall modify the trust
agreement that creates the trust used to fund the Employee's Executive Defined
Contribution Agreement, to provide that following a Change in Control (i) the
trustee must make decisions concerning the Employee's entitlement to benefits
independently, without direction from the Employer, (ii) the trustee must at all
times be a financial institution independent of the Employer or any of its
successors, and (iii) the provisions of the trust agreement to be added under
(i) and (ii) may not be modified without the Employee's written consent.
12
<PAGE>
b) STOCK OPTIONS. The provisions of this subsection shall apply to any
stock options not subject to a change in control provision under the terms of
the option or under the terms of the plan associated with the option. The
Employee shall become fully vested in any such stock options granted by the
Employer at the earlier of the time (i) the Employer's Board of Directors
accepts a Change in Control offer, or (ii) a Change in Control transaction
closes. If the Employer no longer exists following a Change in Control, the
Employer (or its successor) shall pay the Employee a cash amount in exchange for
canceling any options the Employee did not exercise prior to the Change in
Control. This cash amount shall equal the spread under the options at the time
of the Change in Control. To the extent this accelerated vesting or the cash
payment would require shareholder approval, the Employer (or its successor)
shall, in lieu thereof, make a cash payment to the Employee as soon as
practicable following the Change in Control in an amount necessary to put the
Employee in a financial position similar to the financial position she would
have enjoyed had the vesting or cash payments requiring shareholder approval
have been made. If this cash payment itself cannot be made without shareholder
approval (and without violating securities laws), the Employer shall seek
shareholder approval for making modifications to the Employee's stock options
consistent with the vesting and cash payment provisions of this paragraph, and
shall be required to seek that approval as soon as practicable.
19. ARBITRATION. Except for claims or disputes arising under Section 6, 7,
8, 9, and 10 hereof, all claims, disputes and questions of any nature arising
out of or relating to this Agreement or any breach hereof shall be resolved by
arbitration conducted in Kansas City, Missouri. Except as provided herein to the
contrary, all arbitration proceedings shall be conducted according to the rules
of the American Arbitration Association then in effect unless the parties hereto
shall otherwise agree, in writing. The terms of this section shall be
specifically enforceable under the prevailing arbitration law. The award of a
majority of the arbitrators shall be conclusive, final and binding upon the
parties and judgment may be entered upon such award in accordance with the
applicable law in any court of competent jurisdiction.
Any party may invoke the terms of this section by giving written notice
thereof to the other party, delivered by first class mail to the last known
address of such other party. Such notice shall, with specificity, set forth the
nature of the dispute, shall name one arbitrator and shall be signed by the
party requesting arbitration. Within fifteen days after receipt of such notice,
the other party shall deliver a signed written notice to the first party naming
a second arbitrator. If the other party fails to timely select a second
arbitrator, the first arbitrator shall be the sole arbitrator and shall decide
all disputes pursuant to the terms of this section. If a second arbitrator is
timely selected, the two named arbitrators shall, within fifteen days after
delivery of the notice selecting the second arbitrator, select a third
arbitrator. If the two arbitrators are unable to agree on a third arbitrator,
the third arbitrator shall be the President of the Kansas City Metropolitan Bar
Association or any successor organization or a person selected by the President
if she is unable or unwilling to serve. In order to qualify as an arbitrator,
the person named must be licensed to practice law in the State of Missouri and
must not be (i) counsel to Employer or Employee or (ii) related, by marriage or
by blood to the second degree to Employee, any employee or shareholder of
Employer or any
13
<PAGE>
employee, shareholder, owner, partner, or associate of any firm or entity
with which Employee becomes associated after termination of this Agreement.
The expense of the arbitration proceeding shall be borne by the Employer
except each party shall bear the cost of her own experts, evidence, and counsel
fees.
20. EXECUTIVE DEFINED CONTRIBUTION AGREEMENT. As soon as practicable after
the adoption of this Amendment, the Employer shall amend the Employee's
Executive Defined Contribution Agreement (and any related trust agreement) to
prohibit any further amendment (or termination) of that agreement that would
reduce benefits already accrued by the Employee at the time of the amendment (or
termination), unless that reduction is agreed to in writing by the Employee. In
addition, as soon as practicable after the adoption of the Amendment, the
Employer shall amend the Employee's Executive Defined Contribution Agreement
(and any related trust agreement) to make clear that an acquirer under a Change
in Control (or other party effecting a Change in Control within the meaning of
this Agreement) shall be considered a successor employer bound by the terms of
the Employee's Executive Defined Contribution Agreement (and any related trust
agreement).
IN WITNESS WHEREOF, Employer and Employee have duly executed this Agreement
under seal as of the day, month and year first above written.
EMPLOYER:
HARMON INDUSTRIES, INC.,
a Missouri corporation
By:
Bjorn E. Olsson, President and
Chief Executive Officer
EMPLOYEE:
By:
____________, Employee
14
<PAGE>
FOR DEFINED CONTRIBUTION PLAN
AMENDMENT NUMBER ONE
TO
EMPLOYMENT AGREEMENT
WHEREAS, Harmon Industries, Inc., a Missouri corporation (the "EMPLOYER"),
and _____________(the "EMPLOYEE") entered into an Employment Agreement effective
_____________, _______________, (the "EMPLOYMENT AGREEMENT"); and
WHEREAS, General Electric Company, a New York corporation (the "PARENT"),
Four Points Acquisition, Inc, a Missouri corporation ("Four Points"), and the
Employer have entered into an Agreement and Plan of Merger, dated as of
July 16, 2000 (the "MERGER AGREEMENT"), pursuant to which Four Points will
commence an offer to exchange (the "Offer") Parent common stock for the
Employer's Share and thereafter merge with and into the Employer (the "MERGER");
WHEREAS, the Employee is a key employee of the Employer, and the Employer
desires to provide an incentive to the Employee to continue to serve the
Employer as a key employee following the Merger; and
WHEREAS, the Employee desires to continue to be employed by Employer
following the Merger and desires to amend the Employment Agreement upon the
terms contained herein
WHEREAS, in connection with the Merger, the parties desire to enter into
this Agreement, to be effective as of the date Four Points accepts the Employer
Shares for payment pursuant to the Offer ("Effective Time");
NOW, THEREFORE, in consideration of the mutual covenants in this Agreement,
the parties hereby agree to enter into this Amendment Number Two to Employment
Agreement (the "Amendment") and amend the Employment Agreement as follows:
1. EFFECTIVENESS OF AMENDMENT; This Amendment shall be effective as of the
Effective Time. In the event the Merger is not consummated, this Amendment shall
be null and void.
2. A new Section 21 is added to the Agreement as follows:
SECTION 21. RETENTION BONUS. As of the Effective Time, the Parent shall
grant to the Employee an award of restricted stock in the amount of the
number of shares of the Parent Common Stock, par value $.06 per share, as
set forth on Schedule I to this Agreement (the "RESTRICTED STOCK RETENTION
BONUS"). Provided that the Employee at all times remains an Employee of the
Employer, the Parent or an Affiliate of the Employer or Parent (as the term
"Affiliate" is defined in the Merger Agreement) the Restricted
15
<PAGE>
Stock Retention Bonus shall be vested as follows: 50% on the date that is
the second anniversary of the Effective Time and 50% on the date that is
the third anniversary of the Effective Time. If the Employee's employment
with the Employer, Parent or any Affiliate of the Employer or Parent is
terminated prior to the vesting dates indicated above, then any portion
of the Restricted Stock Retention Bonus which at the time of termination
is not vested shall be forfeited. All other terms and conditions of the
Restricted Stock Retention Bonus are set forth in Schedule II to this
Agreement.
3. New Section 11.5 is added to the Agreement as follows.
11.5. (a) TERMINATION PAYMENT FOR TERMINATION PRIOR TO SECOND
ANNIVERSARY OF EFFECTIVE TIME. Notwithstanding anything to the contrary
stated herein, if the Employee is terminated prior to the second
anniversary of the Effective Time, the amounts payable under Section 11.2
shall not be payable and the Termination Payment (as defined below) shall
be made to the Employee. If the employment of the Employee is terminated
(i) by the Employee upon the occurrence of (A) an involuntary and
substantial diminution in the nature or scope of the Employee's authority
or duties as existed at the Effective Time, (B) a reduction in the
aggregate of the Employee's Base Pay and bonus opportunity as it existed
at the Effective Time or (C) the relocation of the Employee's office to a
location more than 50 miles from the location of the Employee's office
immediately prior to the Effective Time, or (ii) by the Employer without
"Cause" (as modified by this Amendment below) or for death or
"Disability" (as defined below) during the period commencing at the
Effective Time and ending on the second anniversary of the Effective
Time, provided that the Employee (or the Employee's executor or other
legal representative in the case of the Employee's death or Disability)
executes the Release (as defined in Section 11.5 (c) below), the Employer
shall pay the Employee (or the Employee's executor or other legal
representative in the case of the Employee's death or Disability) the
Termination Payment set forth on Schedule III to this agreement (the
"TERMINATION PAYMENT") in a lump sum cash amount. The Termination Payment
shall be paid to the Employee (or to the Employee's executor or other
legal representative in the case of the Employee's death or Disability)
within 10 days following termination in accordance with the preceding
sentence.
(b) Intentionally left blank
(c) RELEASE. Notwithstanding anything to the contrary contained in this
Agreement, the Termination Payment shall not be payable to the Employee (or
the Employee's executor or other legal representative in the case of the
Employee's death or Disability) pursuant to this Section 11.5 unless and
until the Employee (or the Employee's executor or other legal representative
in the case of the Employee's death or Disability) executes a general
release in the form of Exhibit A attached hereto (the "RELEASE").
(d) GROSS-UP PAYMENT. In addition to a Termination Payment paid pursuant
to Section 3.1, the Employer shall pay an amount (the "Excise Tax
Reimbursement Payment") necessary to reimburse the Employee for any federal
excise
16
<PAGE>
tax imposed on him under Section 4999(a) of the Internal Revenue Code
of 1986, as amended (the "Code") or any successor section of the Code as a
result of the Employee's receipt of the Termination Payment; however, such
Excise Tax Reimbursement Payment shall not reimburse the Employee for
(i) any other federal or state income tax payable as a result of the receipt
of the Termination Payment or the Excise Tax Reimbursement Payment or
(ii) any federal excise tax imposed as a result of the Employees receipt of
the Excise Tax Reimbursement Payment. Such Excise Tax Reimbursement Payment
shall be made on the same date as the Termination Payment.
(e) EXECUTIVE DEFINED CONTRIBUTION AGREEMENT. Upon any termination of
the Employee obligating the Employer to make a Termination Payment to the
Employee, the Employee shall be treated for purposes of his Executive
Defined Contribution Agreement as if he were employed for an additional
period as indicated on Schedule III hereto following his actual termination
of employment. As a consequence, the Employee, at the end of such period,
shall be treated as having such additional months of service for purposes of
vesting, calculating his benefit (including the numerator of the fraction
used to calculate his benefit) and satisfying any requirement that he work
to age 55 to be eligible for an early retirement benefit. In calculating the
Employee's benefit under his Executive Defined Contribution Agreement, the
Employee shall be treated as if he continued to receive for the additional
period indicated on Schedule III his annual compensation in effect for the
calendar year in which his employment terminated (that is, the annual
compensation he would have received for that calendar year had he remained
employed through the end of that year).
(f) CONTINUATION OF MEDICAL BENEFITS. Upon any termination of the
Employee obligating the Employer to make a Termination Payment to the
Employee, the Employer shall provide until the anniversary of the Effective
Time indicated on Schedule III, to the extent permitted under any applicable
plan, the Employee with medical and life insurance benefits in the same or
substantially similar amounts as were in effect before the Effective Time,
or in such amounts as have been agreed to in writing by the Employee since
the Effective Time. In the event the Employee accepts employment prior to
the anniversary indicated on Schedule III of the Effective Time, the
Employer's obligation to provide medical and life insurance under shall
terminate as of the time the Employee accepts such employment.
(g) AFTER SECOND ANNIVERSARY OF EFFECTIVE TIME. In the event that the
Employee is terminated after the second anniversary of the Effective Time,
the amounts payable under new Section 11.5 shall not be paid and the
Employee shall be compensated pursuant to the Employment Agreement, as
otherwise amended by this Amendment.
4. ADDITION TO DEFINITION OF CAUSE. Section 11.1 is hereby modified to add
new subsection 11.1 (e) as follows:
17
<PAGE>
"e) willful violation of the Parent's integrity policies (after a reasonable
time with regard to any termination based upon a failure to implement a
program to communicate and implement such policies) as set forth in the
booklet "The Spirit and Letter," a copy of which has been provided to the
Employee,
5. The following sections of the Agreement are hereby terminated:
Section 4.3; Section 18.1; Section 18.2; Section 18.3 and Section 18.5(b).
6. The following section of the Agreement is hereby modified as follows: The
36-month period referred to in Section 18.2 (f) is hereby changed to be a
21-month period.
7. Section 15 of the Agreement is hereby modified as follows: Any notice or
communication given by either party under the Agreement shall also be given as
follows:
GE Transportation Systems
2901 East Lake Road
Erie, Pa. 16531
Attn: General Counsel
8. Section 7 of the Agreement is hereby modified as follows: references to
Section 11.2 are deemed to include references to Section 11.5, if applicable.
9. The last Sentence of Section 1, as amended, is deleted and the following
is substituted in its place:
This Agreement, except for Sections 6, 7, 8, 9, 10, 11, 17, 18, 20, and 21
hereof which shall survive the termination of this Agreement, may be terminated
in accordance with the provisions of 11.1, 11.2, 11.3, 11.4 and 11.5 hereof.
10. All other provisions of the Agreement remain without change.
IN WITNESS WHEREOF, the parties hereto have executed this Amendment as of
the day and year first above written.
HARMON INDUSTRIES, INC
By:
______________________________________
Name:
Title:
EMPLOYEE
______________________________________
18
<PAGE>
EXHIBIT A
Date of Notification: _____________
GENERAL RELEASE
This is a General Release (this "RELEASE") executed by __________ (the
"EMPLOYEE") pursuant to Section 11.5 of the Employment Agreement dated as of
_________, _____ (the "EMPLOYMENT AGREEMENT") between Harmon Industries, Inc., a
Missouri corporation (the "COMPANY"), and the Employee.
WHEREAS, the Employee shall have no further work responsibilities with the
Employer after ________________;
WHEREAS, the employment of the Employee will be terminated by the Employer;
WHEREAS, the Employer and the Employee intend that the terms and conditions
of the Employment Agreement and this Release shall govern all issues related to
the Employee's employment and termination of employment by the Employer;
WHEREAS, the Employee has had at least 21 days to consider the form of this
Release.
WHEREAS, the Employer advised the Employee in writing to consult with a
lawyer before signing this Release;
WHEREAS, the Employee has represented and hereby reaffirms that the Employee
has disclosed to the Employer any information in the Employee's possession
concerning any conduct involving the Employer, General Electric Company, a New
York corporation (the "PARENT"), or their affiliates that the Employee has any
reason to believe involves any false claims to the United States or is or may be
unlawful or violates the policies of the Employer or the Parent in any respect;
WHEREAS, the Employee acknowledges that the consideration to be provided to
the Employee under the Employment Agreement is sufficient to support this
Release;
WHEREAS, the Employee represents that the Employee has not filed any
charges, claims or lawsuits against the Employer or the Parent involving any
aspect of the Employee's employment which have not been terminated as of the
date of this Release; and
WHEREAS, the Employee understands that the Employer regards the
representations by the Employee as material and that the Employer is relying on
these representations in paying amounts to the Employee pursuant to the
Employment Agreement.
A-1
<PAGE>
THEREFORE, the Employee agrees as follows:
1. The Employee's employment with the Employer shall terminate on
_____________ (the "TERMINATION DATE").
2. The Employee shall receive the termination payments set forth in
Section 3 of the Employment Agreement.
3. Intentionally left blank
4. The Employee, on behalf of the Employee and anyone claiming through the
Employee, including the Employee's heirs, assigns and agents, releases and
discharges the Employer, the Parent and their respective directors, officers,
employees, subsidiaries, affiliates and agents, and the predecessors, successors
and assigns of any of them (the "RELEASED PARTIES"), from each and every claim,
action or right of any sort, in law or in equity, known or unknown, asserted or
unasserted, foreseen or unforeseen, arising on or before the Effective Date (as
set forth in Section 11 hereof).
(a) This Release includes, but is not limited to: any claim of
discrimination on the basis of race, sex, religion, marital status, sexual
orientation, national origin, handicap or disability, age, veteran status,
special disabled veteran status or citizenship status; any other claim based
on a statutory prohibition or common law doctrine; any claim arising out of
or related to the Employee's employment with the Employer, the terms and
conditions thereof or the termination or cessation thereof; any express or
implied employment contract, any other express or implied contract affecting
terms and conditions of the employee's employment or the termination or
cessation thereof, or a covenant of good faith and fair dealing; any tort
claims and any personal gain with respect to any claim arising under the qui
tam provisions of the False Claims Act, 31 U.S.C. 3730.
(b) The Employee represents that the Employee understands this Release,
that rights and claims under the Age Discrimination in Employment Act of
1967, as amended, the Civil Rights Act of 1964, as amended, the Civil Rights
Act of 1991, the Civil Rights Act of 1866, the Older Workers' Benefit
Protection Act, the Family and Medical Leave Act, the Americans with
Disabilities Act, the Employee Retirement Income Security Act of 1974 and
the Wisconsin Fair Employment Act are among the rights and claims against
the Released Parties the Employee is releasing, and that the Employee
understands that the Employee is not releasing any rights or claims arising
after the Effective Date.
(c) The Employee further agrees never to sue the Released Parties or
cause the Released Parties to be sued regarding any matter within the scope
of this Release. If the Employee violates this Release by suing any of the
Released Parties or causing any of the Released Parties to be sued, the
Employee agrees to pay all costs and expenses of defending against the suit
incurred by the Released Parties, including reasonable attorneys' fees.
(d) The Employee expressly represents and warrants that the employee is
the sole owner of the actual or alleged claims, demands, rights, causes of
action and other matters
A-2
<PAGE>
that are released herein, that the same have not been transferred or
assigned or caused to be transferred or assigned to any other person,
firm, corporation or other entity, and that the Employee has the full
right and power to grant, execute and deliver this Release.
5. The Employee acknowledges that the Employee is bound by the provisions of
Sections 5 and 6 of the Employment Agreement.
6. The Employee understands that any and all Employer covenants which relate
to Employer obligations to the Employee after the Termination Date, including
but not limited to the payments set forth in Section 11.5 of the Employment
Agreement, are contingent on the Employee's satisfaction of the Employee's
obligations under this Release.
7. The Employee agrees that, for the period commencing on the Termination
Date and ending on the second anniversary of the Termination Date, the Employee
will be reasonably available to the Employer and the Parent to respond to
requests by the Employer or the Parent for information pertaining to or relating
to the Employer, the Parent and their affiliates, subsidiaries, agents,
officers, directors or employees which may be within the knowledge of the
Employee. The Employee will cooperate fully with the Employer in connection with
any and all existing or future litigation or investigations brought by or
against the Employer, the Parent or any of their affiliates, agents, officers,
directors or employees, whether administrative, civil or criminal in nature, in
which and to the extent the Employer deems the Employee's cooperation necessary.
The Employee understands that the Employer will reimburse the Employee for
reasonable out-of-pocket expenses incurred as a result of such cooperation.
Nothing herein shall prevent the Employee from communicating with or
participating in any government investigation. The Employee will act in good
faith to furnish the information and cooperation required by this Section 7 and
the Employer will act in good faith so that the requirement to furnish such
information and cooperation does not create a hardship for the Employee.
8. The Employee agrees, subject to any obligations the Employee may have
under applicable law, that the Employee will not make or cause to be made any
statements that disparage, are inimical to, or damage the reputation of the
Employer, the Parent or any of their affiliates, subsidiaries, agents, officers,
directors or employees. In the event such a communication is made to anyone,
including but not limited to the media, public interest groups and publishing
companies, it will be considered a material breach of the terms of the
Employment Agreement and this Release and the Employee will be required to
reimburse the Employer for any and all payments made under the terms of the
Employment Agreement and all commitments to make additional payments to the
Employee will be null and void.
9. The Employer is not obligated to offer employment to the Employee (or to
accept services or the performance of work from the Employee directly or
indirectly) now or in the future.
10. The Employee may revoke this Release in writing within seven days of
signing it. This release will not take effect until the Effective Date. If the
Employee revokes this Release, all of its provisions and the provisions of
Section 11.5 of the Employment Agreement shall be void and unenforceable.
A-3
<PAGE>
11. The Termination Date of the Employee's employment will be __________.
The Effective Date of this Release shall be the day after the end of the
revocation period described in Section 10 hereof.
12. The Employee shall keep strictly confidential all the terms and
conditions, including amounts, in the Employment Agreement and this Release and
shall not disclose them to any person other than the Employee's spouse, the
Employee's legal or financial advisor or United States governmental officials
who seek such information in the course of their official duties, unless
compelled by law to do so. If a person not a party to the Employment Agreement
requests or demands, by subpoena or otherwise, that the Employee disclose or
produce the Employment Agreement or this Release or any terms or conditions
thereof, the Employee shall immediately notify the Employer and shall give the
Employer an opportunity to respond to such notice before taking any action or
making any decision in connection with such request or subpoena.
13. The Employment Agreement and this Release constitute the entire
understanding between the parties. The employee has not relied on any oral
statements that are not included in the Employment Agreement or this Release.
14. In the event that any provision of this Agreement is determined to be
legally invalid or unenforceable by any court of competent jurisdiction, and
cannot be modified to be enforceable, the affected provision shall be stricken
from the Agreement, and the remaining terms of the Agreement and its
enforceability shall remain unaffected.
15. This Release shall be construed, interpreted and applied in accordance
with the law of the State of Missouri (other than conflict of laws principles).
EMPLOYEE
______________________________________
Date:
______________________________
A-4
<PAGE>
SCHEDULE I
TO
AMENDMENT TO EMPLOYMENT AGREEMENT
RETENTION PAYMENT
<TABLE>
<S> <C> <C>
Payment to: 1.75 X current base salary + 3 Number of Shares of Restricted
year average ('97--'98--'99) Stock
bonus
------------------------------ ------------------------------ ------------------------------
[Employee] $ [# of shares]*
------------------------------ ------------------------------ ------------------------------
</TABLE>
NUMBER OF SHARES TO BE ALLOCATED WILL BE BASED ON THE "AVERAGE PARENT PRICE"
AS DEFINED IN AND DETERMINED PURSUANT TO THE MERGER AGREEMENT, ROUNDED TO THE
NEAREST WHOLE NUMBER OF SHARES.
A-5
<PAGE>
SCHEDULE II
TO
RETENTION AGREEMENT
TERMS OF RESTRICTED STOCK
[TO BE ATTACHED]
A-6
<PAGE>
SCHEDULE III
TO
AMENDMENT TO EMPLOYMENT AGREEMENT
TERMINATION PAYMENTS
<TABLE>
<S> <C> <C> <C> <C>
Payment to: 2.25 X base pay + 3 2.25 X 401(k) match 2.25 X Average ESOP
year average ('97-- allocation
'98--'99) bonus
------------------------------------- -------------------- -------------------- -------------------- --------------------
[employee] $ $* $**
------------------------------------- -------------------- -------------------- -------------------- --------------------
</TABLE>
------------------------
* The term "401(k) match" is defined to mean the amount contributed by the
Employer on behalf of the Employee to the Employer's 401(k) plan for the
most recently completed calendar year. This amount will be determined at the
time of any Termination Payment.
** The term "Average ESOP allocation" is defined to mean the average of the
amounts paid by the Employer to the Employer's Employee Stock Ownership Plan
for the benefit of the Employee during the last three most recent completed
calendar years. This amount will be determined at the time of any
Termination Payment.
Section 11.5(e) Period: 27 Months
Section 11.5 (f) Period: 27 Month Anniversary
A-7
