<PAGE>
______________________________________________________________________________
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
___________________________
SCHEDULE 14D-9
SOLICITATION/RECOMMENDATION STATEMENT
PURSUANT TO SECTION 14(d)(4) OF THE
SECURITIES EXCHANGE ACT OF 1934
______________
JOSLYN CORPORATION
(NAME OF SUBJECT COMPANY)
JOSLYN CORPORATION
(NAME OF PERSON(S) FILING STATEMENT)
_____________
COMMON STOCK, PAR VALUE $1.25 PER SHARE
(INCLUDING ASSOCIATED COMMON STOCK PURCHASE RIGHTS)
(TITLE OF CLASS OF SECURITIES)
48107010
(CUSIP NUMBER OF CLASS OF SECURITIES)
_____________
WAYNE M. KOPROWSKI, ESQ.
JOSLYN CORPORATION
30 SOUTH WACKER DRIVE
CHICAGO, IL 60606
TELEPHONE: (312) 454-2918
(NAME, ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED
TO RECEIVE NOTICES AND COMMUNICATIONS
ON BEHALF OF THE PERSON FILING STATEMENT)
COPY TO:
THOMAS A. COLE, ESQ.
SIDLEY & AUSTIN
2 SOUTH DEARBORN STREET
CHICAGO, IL 60603
TELEPHONE: (312) 853-7473
______________________________________________________________________________
<PAGE>
ITEM 1. SECURITY AND SUBJECT COMPANY
The name of the subject company is Joslyn Corporation, an Illinois
corporation (the "Corporation"), and the address of its principal executive
offices is 30 South Wacker Drive, Chicago, Illinois 60606. The title of the
class of equity securities to which this statement relates is the Common Stock,
par value $1.25 per share (the "Common Shares"), of the Corporation and the
associated Common Stock Purchase Rights (the "Rights") issued pursuant to the
Rights Agreement, dated as of February 10, 1988 and amended as of September 2,
1994 (the "Rights Agreement"), between the Corporation and The First National
Bank of Chicago, as Rights Agent (the "Rights Agent"). Unless the context
otherwise requires, the term "Common Shares" shall include the associated
Rights.
ITEM 2. TENDER OFFER OF THE BIDDER
This statement relates to the tender offer commenced by TK Acquisition
Corporation, a Delaware corporation (the "Bidder") and an indirect wholly owned
subsidiary of Danaher Corporation ("Danaher"), to purchase all of the
outstanding Common Shares at $32 per Common Share (the "Offer Price"), net to
the seller in cash without interest thereon, upon the terms and subject to the
conditions set forth in the Bidder's Offer to Purchase, dated July 24, 1995, and
in the related Letter of Transmittal (which together constitute the "Offer").
The Offer was disclosed in a Tender Offer Statement on Schedule 14D-1, dated
July 24, 1995 (the "Schedule 14D-1"), filed by the Bidder with the Securities
and Exchange Commission (the "Commission").
According to the Schedule 14D-1, the address of the principal
executive offices of Danaher and the Bidder is 1250 24th Street, N.W., Suite
800, Washington, D.C. 20037.
ITEM 3. IDENTITY AND BACKGROUND
(a) NAME AND BUSINESS ADDRESS OF PERSON FILING THIS STATEMENT
The name and business address of the Corporation, which is the person
filing this statement, are set forth in response to Item 1 above and are
incorporated herein and made a part hereof by this reference.
(b)(1) ARRANGEMENTS WITH EXECUTIVE OFFICERS, DIRECTORS OR AFFILIATES OF
THE CORPORATION
Certain contracts, agreements, arrangements or understandings between
the Corporation and certain of its directors and executive officers are
described in the "Compensation of Directors" section on page 6, the "Summary
Compensation Table" section on page 7, the "Stock Option/SAR Grants in 1994"
section on page 8, the "Defined Benefit Pension Plan" and "Employment
Agreements" sections on pages 9-10, the
-1-
<PAGE>
"Report of the Compensation Committee on Executive Compensation" section on
pages 12-14 and the "Proposed Non-Employee Director Stock Plan" section on pages
14-15 and pages A1-A6 of the Corporation's Proxy Statement for the April 26,
1995 Annual Meeting of the Corporation's shareholders, attached hereto as
Exhibit 1 and incorporated herein and made a part hereof by this reference.
At the April 27, 1994 Annual Meeting, the shareholders approved an
amendment to the Corporation's Articles of Incorporation (the "Articles") that
would limit the liability of the Directors to the Corporation or its
shareholders for damages arising from breach of fiduciary duty. The amendment
was authorized by an amendment to the Illinois Business Corporation Act of 1983
(the "IBCA") that became effective as of January 1, 1994. The amendment
protects the Corporation's Directors against personal liability to the
Corporation or its shareholders for any breach of duty unless a judgment or
other final adjudication adverse to them establishes (i) a breach of the duty of
loyalty to the Corporation, (ii) acts or omissions in bad faith or involving
intentional misconduct or a knowing violation of the law, (iii) acts violating
the prohibitions contained in Section 8.65 of the IBCA against certain improper
distributions of assets, or (iv) an improper personal benefit to a Director to
which he or she was not legally entitled. The text of the amendment to the
Articles is attached hereto as Exhibit 2 and incorporated herein and made a part
hereof by this reference.
At a meeting of the Board of Directors of the Corporation (the
"Board") on September 16, 1994, the Directors adopted amended and restated by-
laws, as reported to the Commission in the Corporation's Form 8-K Current Report
dated September 19, 1994, attached hereto as Exhibit 3 and incorporated herein
and made a part hereof by this reference. Article VI of the amended and
restated by-laws provides that the Corporation shall indemnify directors,
officers, employees and agents of the Corporation to the fullest extent
permitted under Article Eight of the Articles and under the IBCA. Article VI,
6.3 provides that the Corporation shall pay in advance expenses actually and
reasonably incurred in defending a civil or criminal action, suit or proceeding,
upon receipt of an undertaking by or on behalf of the director, officer,
employee or agent to repay such amount, if it shall ultimately be determined
that he or she is not entitled to indemnification by the Corporation.
On September 16, 1994, the Board approved the following arrangements:
(a) Severance Agreements with Lawrence G. Wolski, George W. Diehl and
Wayne M. Koprowski. Such Severance Agreements are attached hereto as Exhibits
4, 5 and 6 and are incorporated herein and made a part hereof by this reference.
(b) Severance Policy for Corporate Managers covering Corporate Staff
Executives Raymond J. Bjorseth, Robert A. Ginos, Wayne O. Hall, Lewis M.
Jacobson and William J. Rotenberry and
-2-
<PAGE>
General Managers James E. Berkeland, James F. Domo, Daniel Dumont, Robert J.
Lindberg, Gregory Pacton, Paul E. Prutzman, S. Keith Swanson, Steven L.
Thunander and two other individuals who are no longer employed by the
Corporation. Subsequently, Carl S. Grabinski and Martin Malecki, III were
added to such Severance Policy. Such Severance Policy is attached hereto as
Exhibit 7 and is incorporated herein and made a part hereof by this reference.
Such arrangements were reported to the Commission in the Corporation's Form 8-K
Current Report dated September 19, 1994, attached hereto as Exhibit 3 and
incorporated herein and made a part hereof by this reference.
On July 19, 1995, the Compensation Committee of the Board approved a
$25,000 payment to William E. Bendix, in his capacity as Chairman of the Board
of the Corporation, in recognition of the extra time being devoted by him to the
Corporation's affairs.
(b)(2) ARRANGEMENTS WITH THE PURCHASER, ITS EXECUTIVE OFFICERS, DIRECTORS
OR AFFILIATES
There are no contracts, agreements, arrangements or understandings
between the Corporation and the Bidder, its executive officers, directors or
affiliates, other than the Confidentiality Agreement (the "Confidentiality
Agreement") described in Item 4 below and attached hereto as Exhibit 8, which is
incorporated herein and made a part hereof by this reference.
(c) BACKGROUND
On August 11, 1994, George M. Sherman ("Sherman"), President and Chief
Executive Officer of Danaher, telephoned William E. Bendix ("Bendix"), a
Director of the Corporation, at Bendix's home. Sherman and Bendix first became
acquainted in early 1993, when Sherman met Bendix and expressed his possible
interest in a business combination between Danaher and Mark Controls
Corporation, of which Bendix was, in 1993, Chief Executive Officer. Sherman
informed Bendix that the next day Danaher would be issuing a press release
announcing Danaher's ownership of 7.6% of the outstanding Common Shares of the
Corporation.
Although Sherman stated that Danaher had acquired the Common Shares
for investment purposes, Sherman also told Bendix that he had looked at the
Corporation for a long time, would like to talk to the Corporation's management
about strategy and asked Bendix for comments about the Corporation. Bendix
referred Sherman to the Corporation's management, and offered to telephone the
then Chairman of the Board of the Corporation, Donald B. Hamister ("Hamister"),
on Sherman's behalf. Bendix phoned Hamister and left a message describing his
conversation with Sherman.
On August 12, 1994, Danaher filed a 13D Statement with the Commission
indicating it had acquired 7.6% of the Corporation's Common Shares.
Concurrently, Danaher filed under
-3-
<PAGE>
the Hart-Scott-Rodino Antitrust Improvements Act of 1976 for clearance to
purchase up to 15% of the Corporation's Common Shares.
Shortly subsequent to the filings by Danaher, the Corporation retained
legal and financial advisors to advise the Board in the event there should be a
possible takeover attempt by, or a negotiated transaction with, Danaher or any
other party. Also shortly subsequent to the filings by Danaher, the Corporation
received from a number of parties indications of interest in possible business
combinations with the Corporation or in acquisitions of one of its businesses in
the event the Board should determine to pursue a transaction. None of such
parties presented a proposal.
On August 29, 1994, the Board met with its legal advisors, who advised
the Board as to its responsibilities in the event of a takeover attempt and in
addition described possible amendments to the Rights Agreement. Following the
August 29, 1994 Board meeting, the members of the Compensation Committee of the
Board met with its legal advisors and executive compensation consultants to
review various issues relating to severance arrangements.
On September 2, 1994 the Board adopted an amendment to the Rights
Agreement, which was reported to the Commission in the Corporation's Form 8-K
Current Report dated September 9, 1994. The amendment (i) reduced from 20% to
15% (or, in the case of any person who beneficially owned 15% or more of the
Common Shares as of September 2, 1994 (an "Existing Holder"), a percentage equal
to or greater than the amount beneficially owned by such Existing Holder on
September 2, 1994, plus 1% (the "Increased Percentage")), the beneficial
ownership threshold that results in a person becoming an "Acquiring Person"
under the Rights Agreement and (ii) reduced from 30% to 15% (or, in the case of
an Existing Holder, the Increased Percentage, the percentage of the Common
Shares sought in a tender offer the commencement of which would result in a
distribution of rights under the Rights Agreement. The amendment also (A)
provides that the "flip-in" provision under the Rights Agreement is operative
immediately once anyone becomes an Acquiring Person (all other triggers to the
"flip-in" provision and certain exceptions are deleted), (B) allows the Board to
delay the distribution of rights certificates if any such tender or exchange
offer has been commenced so long as no one has become an Acquiring Person and
(C) excludes from the definition of "Acquiring Person" anyone who the Board
determines has inadvertently become an Acquiring Person and who promptly divests
a sufficient number of Common Shares so as to no longer be an Acquiring Person.
The amendment also expanded the circumstances in which the redemption of the
Rights must be approved by a majority of the "continuing directors", which is
one of the issues in the "Danaher Action" described in Item 8(b) below. The
amendment, which was reported to the Commission in the Corporation's Form 8-K
Current Report dated September 9, 1994, is attached hereto as Exhibit 9 and
incorporated herein and made a part hereof by this reference.
-4-
<PAGE>
At the September 2, 1994 meeting, the Board also agreed that, in
response to the request of Sherman, Bendix and another director, L. G. Wolski
("Wolski"), would meet with Sherman on September 22, 1994.
On September 16, 1994, the Board adopted an amendment and restatement
of the Corporation's by-laws providing for, among other things, (i)
indemnification of directors, officers, employees and agents of the Corporation
and (ii) a requirement that a shareholder wishing to make a proposal for
shareholder vote at an Annual Meeting or to nominate a candidate for election to
the Board give prior written notice thereof. The Board also approved certain
severance arrangements for the Corporation's executive officers, corporate
managers and corporate staff. Such matters were reported to the Commission in
the Corporation's Form 8-K Current Report dated September 19, 1994 and filed
September 20, 1994.
In recognition of Danaher's position as a major shareholder, on
September 22, 1994, Bendix and Wolski met with Sherman and Patrick W. Allender
("Allender"), chief financial officer of Danaher, and discussed general non-
confidential information about the Corporation.
In September, 1994, an investment banker indicated to the Corporation
that an additional party had indicated to him an interest in the Corporation.
To the knowledge of the Corporation, such party has taken no further action.
On December 7, 1994, Hamister resigned as Chairman of the Board of the
Corporation, Bendix became non-executive Chairman of the Board and Wolski was
given the title of Acting Chief Executive Officer. Wolski replaced retiring
Chief Executive Officer Raymond E. Micheletti ("Micheletti"). Wolski's title
was changed to Chief Executive Officer on July 19, 1995.
Early in 1995, Sherman called Bendix to request another meeting.
On March 1, 1995, Bendix and Wolski met with Sherman and Allender and
again discussed general non-confidential information about the Corporation.
At the Annual Meeting held on April 26, 1995, two new independent
directors were elected, replacing Hamister and Micheletti, and four incumbent
directors were re-elected. As a result of the election, the Board had a
majority of independent directors and continued to be chaired by a non-executive
Chairman of the Board.
On June 14, 1995, the Corporation announced its acquisition of
Cyberex, Inc. and Allender called Wolski to inquire about the acquisition.
On June 30, 1995, Sherman called Bendix to ask if the Corporation
would be willing to meet to discuss a possible business combination. Sherman
told Bendix that although no
-5-
<PAGE>
decision had been reached regarding a business combination, Sherman believed the
Corporation was a "good fit" with Danaher. Sherman said he thought it would be
desirable to talk with representatives of the Corporation before Danaher reached
a decision and before a business combination with the Corporation was discussed
with the Danaher Board of Directors.
On July 6, 1995, Bendix and Wolski called Sherman and stated that, in
light of Danaher's position as a major shareholder, the Corporation was willing
to meet with Danaher. They suggested a meeting after the July 19, 1995
announcement of second quarter earnings out of a desire to have a meaningful
discussion about current results without disclosure of non-public information.
Later on July 6, 1995, Sherman called Bendix to state that he indeed did wish to
be given access to non-public information about the Corporation and that a
meeting without such information would be unproductive. Sherman also mentioned
that Danaher had not reached any decisions yet, but was considering an offer to
acquire the Corporation at a price near the upper end of the 52-week trading
range of the Common Shares.
On July 7, 1995, Bendix called Sherman and stated that the request for
non-public information would have to be presented to the Board and that the
earliest practicable time to do so would be at its regularly scheduled July 19,
1995 meeting. Later that day, Sherman called Bendix and informed him that
Danaher would be sending him a letter proposing an acquisition of the Company at
a price of $32 per share. Such letter was received via telecopier that evening
and was disclosed publicly by Danaher on July 10, 1995. The full text of the
letter is set forth below:
July 7, 1995
Mr. William E. Bendix
Chairman of the Board
Joslyn Corporation
30 South Wacker Drive
Chicago, IL 60606
Dear Bill:
As you know, Danaher Corporation has been an investor in Joslyn
Corporation for over a year. We have been impressed with Joslyn's
business, which compliments businesses we are engaged in.
When we spoke initially on June 30, 1995 and most recently on
July 6 and 7, 1995, I told you that Danaher's management was reviewing what
the alternatives might be with respect to our investment in Joslyn and
might consider discussing with Danaher's Board of Directors whether to
explore a business combination with Joslyn. Danaher's management and Board
of Directors has now decided to propose a business combination, and we
hereby propose a combination of our companies' businesses in a transaction
in which your
-6-
<PAGE>
stockholders would receive cash for each share of their common stock.
Based on our review of publicly available information about Joslyn, we
propose a price of $32 per share. We think the offer is the appropriate
price based on publicly available information, but we would like to conduct
a brief, highly focused due diligence investigation in order to explore
whether a higher price could be justified.
We believe that the transaction we are proposing represents a
very attractive opportunity for your stockholders. The price we are
offering represents a significant premium over today's closing market price
of the Company's common stock -- a price that in our view, already reflects
the fact that Danaher is a substantial owner of Joslyn's shares.
Our offer is not subject to financing, but is subject to the
taking of all necessary actions to eliminate the applicability of, or to
satisfy, any anti-takeover or other defensive provisions contained in the
applicable corporate statutes or in the Company's charter, by-laws and
rights agreement.
We are convinced that the combination of our companies will be of
great benefit to Joslyn and its stockholders. We also believe that
Joslyn's employees, customers and suppliers will benefit from the joining
of the complementary strengths of our two companies.
Our financial strength and the complementary nature of the
businesses of our two companies enables us to move forward quickly to
negotiate and to close an agreement. We are prepared to enter into
immediate discussions with you and your directors, management and advisors
to answer any questions you may have about our offer.
We hope that you and your fellow directors will view this offer
as we do -- an excellent opportunity for the stockholders of the Company to
realize full value for their shares to an extent that is not available to
them in the marketplace.
We trust that Joslyn's Board of Directors will give our offer
prompt and serious consideration and will not take any actions that would
adversely affect your stockholders' ability to receive the benefits of our
proposed transaction.
Our sincere desire is to work together with you to reach
agreement on a negotiated transaction which can be presented to your
stockholders as the joint effort of the directors and managements of both
companies.
As you can appreciate, it is important that we hear from you as
promptly as practicable with respect to our
-7-
<PAGE>
offer. We look forward to hearing from you and to working together on this
transaction.
Sincerely,
/s/ George M. Sherman
On July 10, 1995, Bendix called Sherman to inform him of the contents
of a letter from Bendix to Sherman stating that Danaher's offer would be
reviewed by the Board on July 19, 1995. Such letter was published in a press
release that was issued prior to the commencement of trading on July 10, 1995
and filed in a Form 8-K Current Report that was filed with the Commission on
July 12, 1995. The full text of the letter is set forth below:
July 10, 1995
George M. Sherman
President and Chief Executive Officer
Danaher Corporation
1250 24th Street NW - Suite 800
Washington, D.C. 20037
Dear George:
We have received your letter dated July 7, 1995 and have
forwarded it to our board. Your proposal will be considered at our
regularly scheduled meeting on July 19, 1995. Promptly after that meeting,
we will either inform you of our board's response or give you an estimated
date for such response.
As you know, we have recently reconstituted our board. It is now
comprised of a majority of independent directors and led by a non-executive
chairman. We would not presume to pre-empt or predict their decision. It
is not presumptuous, however, to offer the following observations:
* In considering your proposal, the board will be weighing it
against the excellent prospects of the Company on an independent,
stand-along basis as we begin to see the benefits of new programs
which are now being implemented. Anticipated strong second
quarter results and the Cyberex acquisition are but two examples.
* Even if the board were to determine to abandon the Company's
independent status and pursue a business combination, it would
first select between a strategic merger and, as you have
proposed, a change-in-control transaction. The next decision
would be how to pursue such a transaction. In the absence of an
unquestionably pre-emptive offer from Danaher, an exclusive
negotiation over a
-8-
<PAGE>
change-in-control transaction is not likely to occur because of
the fiduciary duties of our directors.
* The guiding principle for our directors will be the best
interests of our stockholders. If they determine to pursue a
transaction, the Company will do so vigorously. If they
determine to continue down our independent path, the Company will
pursue all appropriate defenses.
Our board will give your proposal a thorough, careful and good
faith review on the 19th. We will respond to you shortly after that
meeting.
Sincerely,
/s/William E. Bendix
/s/L.G. Wolski
cc: Board of Directors of Joslyn Corporation
At a meeting held on July 19, 1995, the Board, after consultation with
its legal counsel and Goldman, Sachs & Co. ("Goldman Sachs"), its financial
advisors, determined that commencing negotiations with Danaher or providing
confidential information to Danaher was not then in the best interests of the
Corporation's shareholders. This decision was communicated by Bendix to Sherman
by a letter which Bendix faxed to Sherman's office and also read to Sherman (who
was vacationing) in a telephone call later that day. Such letter was made
public through a press release that was issued on July 20, 1995 and a Form 8-K
Current Report that was filed with the Commission on July 20, 1995. The full
text of the letter is set forth below:
July 19, 1995
Mr. George M. Sherman
President and Chief Executive Officer
Danaher Corporation
1250 24th Street N.W. - Suite 800
Washington, D.C. 20037
Dear George:
As promised, the Board of Directors of Joslyn Corporation and our
financial advisor, Goldman, Sachs & Co., have reviewed your company's
proposal to acquire Joslyn for $32 per share.
The Board had unanimously concluded that entering into merger
discussions with you or providing confidential
-9-
<PAGE>
information to you is not in the best interests of Joslyn's
shareholders. In reaching this conclusion, the Board has
considered, among other things, Joslyn's prospects as an
independent company and the implications of its new growth
strategy, its financial analysis and the analysis presented by
Goldman, Sachs & Co. as well as other alternatives available to
Joslyn.
Sincerely,
/s/William E. Bendix
/s/L.G. Wolski
cc: Board of Directors of Joslyn Corporation
On July 23, 1995, Sherman telephoned Bendix to advise him that Danaher
would commence the Offer on the morning of July 24, 1995. On July 24, 1995, the
Offer was in fact commenced and Sherman delivered to Bendix a letter, the full
text of which is set forth below:
July 24, 1995
Mr. William E. Bendix
Chairman of the Board
Joslyn Corporation
30 South Wacker Drive
Chicago, IL 60606
Dear Bill:
As you know, Danaher Corporation has expressed to you on several
occasions our interest in entering into a business combination with Joslyn
Corporation (the "Company"). On July 7, 1995, Danaher proposed to you a
business combination transaction in which the Company's shareholders would
receive $32 in cash for each share of common stock. In the course of our
conversations, we requested access to non-public information concerning the
Company, under an appropriate confidentiality agreement, so that we could
explore whether a higher price would be justified. By your letter dated
July 19, you informed us that the Company's directors had concluded that
entering into merger discussions with Danaher or providing confidential
information to Danaher is not in the best interests of the Company's
shareholders.
We are disappointed by the Company's rejection of our proposal to
negotiate a business combination transaction and to our request for access
to information. We fail to see how it could be in the best interests of
your shareholders to reject any further discussion with us.
-10-
<PAGE>
While we would have preferred to negotiate a transaction with you, we feel
that you have left us no choice but to present a proposal directly to your
shareholders. Accordingly, Danaher and TK Acquisition Corporation, an
indirect wholly-owned subsidiary of Danaher, are today commencing a tender
offer for all of the outstanding shares (and the associated common stock
purchase rights) of the Company at a price of $32 net per share in cash.
It is our intention to acquire any shares not purchased in the tender offer
in a subsequent merger for the same cash consideration paid to shareholders
in the tender offer. We would expect customary conditions for a
transaction of this type; however, we have secured the financing necessary
to fund our offer.
We believe that an all cash price of $32 net per share for all
shares presents a very attractive opportunity for the Company's
shareholders. For the past three years, the Company's stock has generally
traded in the low or mid-20s. Our offer represents an approximately 30%
premium over the closing price on the last trading day before our July 7
letter proposing to acquire the Company at $32 per share.
In light of the attractive terms of our offer, we request that
the Company's Board of Directors make appropriate determinations so that
the common stock purchase rights and the restrictions provided in the
Illinois Business Combination Law are rendered inapplicable to our tender
offer and subsequent merger. We would expect that you will not take any
other actions that would be detrimental to the interests of the
shareholders. It is our hope that we can proceed to complete a transaction
with a minimum of delay.
Sincerely,
/s/George M. Sherman
Also on July 24, 1995, Danaher commenced litigation and its efforts to
call a special meeting of shareholders, each of which is described in Item 8
below and incorporated herein and made a part hereof by this reference. Sherman
called Wolski on July 24, 1995 to inform Wolski that Danaher was commencing such
litigation.
On July 26, 1995, the Board met again and, after consultation with its
legal and financial advisors, directed the senior management of the Corporation
to meet with representatives of Danaher for purposes of gathering additional
information prior to taking a position on the Offer. This decision was
communicated by a call from Goldman Sachs to Danaher's investment bankers and
also by Bendix to Sherman by a letter which was faxed to Sherman later that day.
Such letter was made public through a
-11-
<PAGE>
press release that was issued on July 27, 1995 and a Form 8-K Current Report
that was filed with the Commission on July 31, 1995. The full text of the
letter is set forth below:
July 27, 1995
Mr. George M. Sherman
President and Chief Executive Officer
Danaher Corporation
1250, 24th Street, N.W. - Suite 800
Washington, D.C. 20037
Dear George:
As you know, because Danaher Corporation has now launched a
tender offer, our Board of Directors will shortly be compelled to state a
position on the transaction. In order that the Board can have before it
full information before stating its position, they have asked us and our
advisors, among other things, to meet with you and your advisors. In order
to have a meaningful discussion with you, we would be prepared to provide
you with certain, highly-focused, non-public information, subject to an
appropriate confidentiality agreement. Our investment bankers are
contacting yours to arrange such a meeting.
Sincerely,
/s/ William E. Bendix
/s/ L.G. Wolski
cc: Board of Directors of Joslyn Corporation
At the July 26, 1995 meeting, the Board also took action to defer the
Distribution Date as defined in the Rights Agreement and resolved that, if at
any future time it were to determine to undertake negotiations, prior to
reaching any agreement in principle with any party with respect to a
transaction, disclosure of the possible terms thereof or the parties thereto
would jeopardize continuation of any such negotiations.
On July 28, 1995, the Corporation and Danaher entered into the
Confidentiality Agreement, as contemplated by the July 27, 1995 letter from
Bendix to Sherman. The Confidentiality Agreement was disclosed in the Form 8-K
Current Report that was filed with the Commission on July 31, 1995. On July 29,
1995, the Corporation began providing Danaher with certain non-public
information, subject to the terms of the Confidentiality Agreement. The
Confidentiality Agreement also contained provisions to stay the pending
litigation between the Corporation and Danaher and further actions by Danaher to
call a special meeting of the Corporation's shareholders. On August 1, 1995,
representatives of the Corporation and Danaher met to discuss
-12-
<PAGE>
certain of the non-public information being supplied under the Confidentiality
Agreement. On August 2, 1995, representatives of Danaher visited certain of the
Corporation's facilities.
Subsequent to the disclosure of the exchange of correspondence between
Bendix and Sherman on July 7 and July 10, the Corporation received indications
of interest from additional parties in possible business combinations with the
Corporation. In addition, after the July 19, 1995 Board meeting, Goldman Sachs
made contact with numerous parties to ascertain their interest in discussions
with the Corporation. After the July 26, 1995 Board meeting, the Corporation
entered into confidentiality agreements with certain other parties and provided
them with confidential information. Such additional confidentiality agreements
are similar to the Confidentiality Agreement with Danaher.
On August 2, 1995, legal counsel for Danaher faxed to counsel for the
Corporation a draft tender offer/merger agreement for consideration in the event
that the Corporation and Danaher got "together on a transaction".
On August 3, 1995, the Board met again with its legal and financial
advisors. During the course of the meeting, Danaher representatives called to
indicate that Danaher would require additional time to complete its
investigation before Danaher could determine whether, from its perspective, an
Offer Price higher than $32 Common Share could be justified. After careful
consideration and for the reasons indicated in Item 4 below, the Board
determined to take the position described in such Item 4.
Following the August 3, 1995 Board meeting, counsel to the Corporation
called counsel to Danaher and stated that it would be pre-mature, under the
circumstances, to begin discussions over the previously supplied draft tender
offer/merger agreement.
A copy of a letter to shareholders communicating the Board's
recommendation and a form of press release announcing such recommendation are
filed as Exhibits 10 and 11, respectively, and are incorporated herein and made
a part hereof by this reference.
ITEM 4. THE SOLICITATION OR RECOMMENDATION
At the August 3, 1995 meeting, the members of the Board who were
present (one member being absent due to a scheduling conflict) unanimously
concluded to recommend that the Corporation's shareholders reject the Offer and
not tender their Common Shares pursuant to the Offer. The Board has taken this
position at this time because:
(a) it has not reached a conclusion that the Corporation should be
sold to or otherwise engage in a business combination with
Danaher or any other party;
-13-
<PAGE>
(b) the Corporation is in the midst of providing information to
Danaher so that Danaher may determine whether, from its
perspective, an Offer Price higher than $32 per Common Share
could be justified; and
(c) the Corporation has entered into confidentiality agreements with
other potentially interested parties, has provided them with
information and is seeking to develop their interest in a
transaction at higher than $32 per share.
No assurance can be given that the Corporation will receive an offer
higher than $32 per share, that the Board will conclude that the Corporation
should be sold or that there will be any extraordinary transaction involving
the Corporation.
The Offer is conditioned upon, among other things, the Rights having
been redeemed by the Board or the Bidder otherwise being satisfied in its sole
discretion that the Rights have been invalidated or otherwise are inapplicable
to the Offer and the proposed merger of the Bidder and the Corporation. In
light of the Board's determination discussed above, the Board determined at its
August 3 meeting not to take any action to redeem the Rights in response to the
Offer.
The Offer is also conditioned upon, the Bidder being satisfied, in its
sole discretion, that after consummation of the Offer, the restrictions
contained in Sections 7.85 and 11.75 of the IBCA will not apply to the proposed
merger of the Bidder and the Corporation. In light of the Board's determination
discussed above, the Board determined at its August 3 meeting not to take any
action which would render such restrictions inapplicable to such proposed
merger.
ITEM 5. PERSONS RETAINED, EMPLOYED OR TO BE COMPENSATED
Pursuant to a letter agreement dated July 19, 1995 but effective as of
September 1, 1994, the Corporation has retained Goldman Sachs as exclusive
financial advisors with respect to the Corporation's long-term financial
strategy, including, without limitation, any acquisition proposals that the
Corporation may receive or any other attempts to acquire control of the
Corporation. Pursuant to such agreement, the Corporation has agreed to pay to
Goldman Sachs:
(a) a fee of $250,000, which the Corporation has paid and will be
credited against any transaction or advisory fees referred to below;
(b) if at least 15% of the outstanding stock of the Corporation is
acquired by any person or group, including the
-14-
<PAGE>
Corporation, in one or a series of transactions, by means of a tender offer or
merger, private or open market purchases of stock or otherwise, or if all or
substantially all of the assets of the Corporation are transferred, in one or a
series of transactions, by way of a sale, distribution or liquidation, an
additional fee equal to 0.9% of the aggregate value of all such transactions, as
defined in such agreement;
(c) if the Corporation or any other entity formed or owned in
substantial part or controlled by the Corporation or one or more members of
senior management of the Corporation or any employee benefit plan of the
Corporation or any of its subsidiaries (a "Related Entity") effects a
transaction or series of transactions not covered by paragraph (b) above, in
which (i) at least 30% of the aggregate market value of the Corporation as of
the date of such agreement is transferred to the shareholders of the Corporation
through (A) a merger with, purchase of assets by or other combination with a
Related Entity, (B) a reclassification of stock, (C) a purchase of stock, (D) a
distribution of cash, securities or other assets (including, without limitation,
a distribution of all or a portion of stock in one or more of its subsidiaries),
(E) a plan of partial liquidation or (F) any similar transactions or
combinations of the foregoing and (ii) the public shareholders of the
Corporation retain an equity interest in the Corporation or, if the Corporation
does not survive in the transactions described above, in the surviving entity (a
"Recapitalization"), a fee equal to 0.9% of the aggregate value of the
Recapitalization, defined as the per share value in cash, securities and other
assets received by the Corporation's shareholders (including shares of stock
continued to be held by the Corporation's shareholders) times the number of
shares of stock held by them; it being understood that such aggregate value
shall be deemed to include amounts paid by the Corporation or the Related Entity
with respect to contingently issuable shares, including, without limitation,
shares issuable pursuant to options, warrants and convertible securities;
(d) in the event that the Corporation acquires the securities or
assets of another company valued at more than $75 million or sells, distributes
or liquidates all or a portion of the assets of the Corporation valued at more
than $75 million, including any pension-related assets, or sells or distributes
securities of the Corporation, whether such distribution is made by dividend
(other than stock splits effected by a stock dividend and regular recurring cash
dividends in amounts not materially greater than currently paid) or otherwise,
and no fee has become payable to or been paid to Goldman Sachs with respect to
such transaction pursuant to paragraphs (b) and (c) above, a fee equal to 2% of
the aggregate value of a $40 million transaction, 1.50% of the aggregate value
of a $100 million transaction or 1.00% of the aggregate value of a $200 million
or more transaction (with the percentage fee for any transaction valued between
any two of such amounts being pro-rated and customary fees being applicable to
public offerings or private placements of securities of the Corporation); and
-15-
<PAGE>
(e) in the event that any person or group shall (i) deliver to the
Corporation an unsolicited proposal to acquire the Corporation, (ii) commence a
tender offer for at least 10% of the outstanding stock of the Corporation, (iii)
commence solicitation of proxies for the election as a Company director of any
person who is not nominated by the current Board or a committee thereof or (iv)
become the beneficial owner of more than 10% of the outstanding stock of the
Corporation; and the Board shall determine to cause the Corporation to resist
such proposal, tender offer, solicitation or any further acquisitions of stock
by such person or group; and as of the first anniversary of the date of the
first such determination to resist, (A) no transaction of the type described in
paragraphs (b) and (c) above has been consummated and (B) no change of "control"
(as such term is defined in Rule 12b-2 under the Securities Exchange Act of
1934, as amended) of the Corporation has occurred, a financial advisory fee of
$1,500,000.
The Corporation has agreed to retain Goldman Sachs as the
Corporation's exclusive financial advisor (pursuant to a separate letter
agreement on mutually agreeable terms and conditions and in consideration of the
fees described above) if the Corporation becomes the subject of, or is
threatened with, a contested solicitation by any person.
The Corporation has also agreed to reimburse Goldman Sachs
periodically for their reasonable out-of-pocket expenses, including the
reasonable fees and disbursements of their attorneys, plus any sales, use or
similar taxes (including additions to such taxes, if any) arising in connection
with any matter referred to in the letter agreement and to indemnify Goldman
Sachs against certain liabilities, including liabilities under the federal
securities laws.
The letter agreement may be terminated at any time by either party
thereto, with or without cause, effective upon receipt of written notice to that
effect. Goldman Sachs will be entitled to the transaction fee set forth above
if at any time prior to the expiration of 18 months after such termination a
transaction of the type contemplated by paragraph (b), (c) or (d) above is
consummated and, in the case of a transaction contemplated by paragraph (b) or
(d) above, there was contact with the acquiring party, or any affiliate thereof,
regarding such a transaction during the period of Goldman Sachs' engagement and,
in the case of a transaction contemplated by paragraph (c) above, such
transaction was discussed or proposed during the period of Goldman Sachs'
engagement; provided, however, that any financial advisory fee paid under
paragraph (e) above shall be credited against any such transaction fee.
In addition, the Corporation has retained Morrow & Co., Inc.
("Morrow") to provide stock watch/shareholder identification services with
respect to the Common Shares and related strategic and consulting services and
Hill and Knowlton, Inc. ("H&K") to serve as financial communications counsel to
the Corporation.
-16-
<PAGE>
Pursuant to a letter agreement dated August 26, 1994, the Corporation paid
Morrow $20,000 upon the signing of such letter agreement and agreed to reimburse
Morrow for reasonable disbursements incurred in connection with the performance
of services thereunder. After January 26, 1995, the letter agreement between
the Corporation and Morrow became terminable by either party upon thirty days
prior written notice to the other party. In July 1995, the Corporation renewed
its arrangement with Morrow and paid Morrow an additional $10,000. Pursuant to
a letter agreement dated July 13, 1995, the Corporation will pay H&K an advance
of $25,000 against which hourly fees for H&K's services will be charged. The
Corporation will also reimburse H&K for H&K's reasonable expenses.
Except as described above, neither the Corporation nor any person
acting on its behalf has retained any person to make solicitations or
recommendations to security holders on its behalf concerning the Offer.
ITEM 6. RECENT TRANSACTIONS AND INTENT WITH RESPECT TO
SECURITIES
(a) There have been no transactions in the Common Shares during the past
60 days by the Corporation or, to the best of the Corporation's knowledge, by an
executive officer, director, affiliate or subsidiary of the Corporation.
(b) To the best of the Corporation's knowledge, none of the directors or
executive officers of the Corporation intends to tender, pursuant to the Offer,
any Common Shares beneficially owned by them. The foregoing does not include
any Common Shares over which, or with respect to which, any such executive
officer, director or affiliate acts in a fiduciary or representative capacity or
is subject to the instructions of a third party with respect to such tender.
ITEM 7. CERTAIN NEGOTIATIONS AND TRANSACTIONS BY THE SUBJECT COMPANY
(a) Except as disclosed in Item 4 above, the Corporation is not presently
engaged in any negotiations in response to the Offer that relate to or could
result in one or more of the following or a combination thereof: (i) an
extraordinary transaction such as a merger or reorganization, involving the
Corporation or any of its subsidiaries; (ii) a purchase, sale or transfer of a
material amount of the securities or assets by the Corporation or any of its
subsidiaries; (iii) a tender offer for or other acquisition of securities by or
of the Corporation; or (iv) a material change in the present capitalization or
dividend policy of the Corporation.
(b) Notwithstanding the foregoing, if appropriate to the Board's discharge
of its fiduciary duties under applicable law, the Corporation may in the future
engage in negotiations that could have one of the effects specified in Item 7(a)
above. In such event, the Board has determined that disclosure with respect
-17-
<PAGE>
to the parties to, and the possible terms of, any transactions or proposals of
the type referred to in Item 7(a) might jeopardize any discussions or
negotiations that the Corporation may conduct. Accordingly, the Board has
adopted a resolution instructing management not to disclose the possible terms
of any such transactions or proposals, or the parties thereto, unless and until
an agreement in principle relating thereto has been reached. There can be no
assurance that any such negotiations will be undertaken or that any such
transactions will be recommended to the Board or shareholders or that any
transactions that may be recommended will be authorized or consummated.
ITEM 8. ADDITIONAL INFORMATION TO BE FURNISHED
(a) LITIGATION
(i) The Danaher Action
On July 24, 1994 Danaher and the Bidder filed a complaint in the
United States District Court for the Northern District of Illinois, Eastern
Division, seeking to enjoin the application of certain provisions of the Rights
Agreement and certain provisions of Illinois law (DANAHER CORPORATION AND TK
ACQUISITION CORPORATION v. JOSLYN CORPORATION, Civil Action No. 95C 4245) (the
"Danaher Action"). The complaint names as defendants the Corporation and the
following directors of the Corporation: William E. Bendix, Lawrence G. Wolski,
James M. Reed, Lawrence A. Reed, John H. Deininger and Richard C. Osborne. The
relief sought includes, among other things, (i) an injunction prohibiting
application of the continuing directors provisions of the Rights Agreement that
require the approval of the "Continuing Directors" (i.e., each director who was
such prior to the date of the Rights Agreement and each subsequently elected
director if such director is recommended or approved by a majority of the
"Continuing Directors", but excluding an "Acquiring Person" or any affiliate,
associate or representative thereof) to redeem the Rights or to make the Rights
inapplicable to the Offer and the proposed merger between the Corporation and
the Bidder and (ii) an injunction preventing the Board from treating (A) the
tender of Common Shares to Danaher and the Bidder, prior to their acceptance of
such Common Shares for purchase, (B) Danaher and the Bidder's obtaining of
authorization for the calling of a special meeting of the Corporation's
shareholders or (C) the giving to Danaher or the Bidder of revocable proxies or
consents to vote the Common Shares, as vesting beneficial ownership of such
Common Shares in Danaher or the Bidder, thus making Danaher or the Bidder
"Interested Shareholders" for purposes of Illinois Business Corporation Act, 805
ILCS 5/7.85 ("Section 7.85"). In addition, the relief sought includes (i) an
injunction preventing the application of the Rights Agreement to the Offer and
ordering the Board to redeem the Rights, (ii) an injunction preventing the Board
from using Section 7.85 or Illinois Business Corporation Act, 805 ILCS 5/11.75
("Section 11.75") to interfere with or prevent the Offer and ordering the Board
to approve the Offer pursuant to Sections 7.85 and 11.75 to allow the
Corporation's shareholders to accept the Offer, (iii) a declaratory judgment
-18-
<PAGE>
that the laws of any state other than Illinois are inapplicable to the Offer, a
proposed merger and a proxy solicitation in connection therewith and (iv) an
injunction preventing the Corporation or the individuals named as defendants
from instituting proceedings concerning or related to the Offer, a proposed
merger or a proxy solicitation in connection therewith in any other court or
forum.
The Corporation and Danaher have agreed in the Confidentiality
Agreement to stay all proceedings in the Danaher Action (and no new litigation
may be commenced by either party against the other party) during Danaher's
review of the confidential information supplied by the Corporation and any
related discussions and negotiations.
(ii) The Steiner Action
On July 24, 1995, Kenneth Steiner, an alleged owner of Common Shares,
commenced a class action in the County Department - Chancery Division of the
Circuit Court of Cook County, Illinois challenging the Board's alleged rejection
of and refusal properly to consider the Offer (STEINER v. JOSLYN CORPORATION,
No. 95 CH 06933) (the "Steiner Action"). The complaint, which was filed
individually and on behalf of all stockholders of the Corporation (other than
defendants and any person or entity affiliated with defendants) names as
defendants the Corporation and the following Directors of the Corporation:
William E. Bendix, Lawrence G. Wolski, James M. Reed, Lawrence A. Reed, John B.
Deininger and Richard C. Osborne (collectively, the "Individual Defendants").
The relief sought includes (i) directing the Individual Defendants to (A)
cooperate fully with any entity or persons having a BONA FIDE interest in
proposing any transactions which would maximize shareholder value, (B) undertake
an evaluation of the Corporation's worth as a merger/acquisition candidate, (C)
enhance the Corporation's value and attractiveness as a merger/acquisition
candidate, (D) effectively expose the Corporation to the marketplace in an
effort to create an active auction of the Corporation, (E) act independently so
that the interests of the Corporation's shareholders are protected and (F)
insure that no conflicts exist between the interests of the Individual
Defendants and their fiduciary obligation to maximize shareholder value or, in
the event that such conflicts of interest exist, insure that such conflicts are
resolved in the best interests of the Corporation's shareholders and (ii)
ordering the Individual Defendants to account to the plaintiff and the class for
all damages suffered and to be suffered by them as a result of the acts alleged
in plaintiff's complaint.
(c) PROXY CONTEST
In Exhibit 11(a)(1) to the Schedule 14D-1, the Bidder and Danaher
disclosed their intention to commence a solicitation of the Corporation's
shareholders asking such shareholders to designate the Bidder and Danaher as
agents of the shareholders for the purpose of calling a special meeting of the
shareholders of the Corporation to (i) remove all of the incumbent directors
-19-
<PAGE>
of the Corporation, (ii) amend the Corporation's By-laws to fix the number of
directors of the Corporation at three and (iii) to elect the nominees of the
Bidder to serve as the directors of the Corporation. The Bidder and Danaher
also disclosed that, if elected, directors nominated by the Bidder would take
such action as might be necessary to expedite consummation of the Offer or, in
the event that another transaction offering more value to the Corporation's
shareholders were proposed, to take such action as might be necessary to
facilitate such other transaction.
On July 26, 1995, the Bidder and Danaher filed with the Commission
Amendment No. 1 to the Schedule 14D-1. Exhibit 11(g)(2) thereto is a
Preliminary Proxy Statement (the "Proxy Statement") filed with the Commission
pursuant to Section 14(a) of the Securities Exchange Act of 1934 on July 25,
1995. The Proxy Statement includes a Solicitation Statement that solicits the
Corporation's shareholders to designate Danaher and the Bidder as Agents of such
shareholders for the purpose of calling a special meeting of the shareholders
and a form of Appointment of Designated Agents to effect such designation.
The Corporation and Danaher have agreed in the Confidentiality
Agreement that Danaher will stay all efforts to seek a special meeting of the
Corporation's shareholders and to solicit proxies or written consents during
Danaher's review of the confidential information supplied by the Corporation and
any related discussions and negotiations.
ITEM 9. MATERIALS TO BE FILED AS EXHIBITS.
Exhibit 1 Pages 7 to 10, pages 12 to 15 and pages A1 to A6 of the
Proxy Statement of the Corporation for its April 26,
1995 Annual Meeting
Exhibit 2 Amendment to the Articles of Incorporation of the
Corporation approved by the shareholders at the April
27, 1994 Annual Meeting
Exhibit 3 Form 8-K Current Report dated September 19, 1994
and Exhibit 3 thereto
Exhibit 4 Severance Agreement with Lawrence G. Wolski
Exhibit 5 Severance Agreement with George W. Diehl
Exhibit 6 Severance Agreement with Wayne M. Koprowski
Exhibit 7 Severance Policy for Corporate Managers
Exhibit 8 Confidentiality Agreement
-20-
<PAGE>
Exhibit 9 Amendment to the Rights Agreement dated as of September
2, 1994 between the Corporation and the Rights Agent
Exhibit 10 Letter to Shareholders dated August 4, 1995
Exhibit 11 Press Release dated August 4, 1995 announcing the
Board's recommendation with respect to the Offer
-21-
<PAGE>
SIGNATURE
After reasonable inquiry and to the best of my knowledge and belief,
I certify that the information set forth in this statement is true, complete and
correct.
JOSLYN CORPORATION
By:/s/ Wayne M. Koprowski
-------------------------
Wayne M. Koprowski
Vice President, General
Counsel and Secretary
Dated: August 4, 1995
-22-
<PAGE>
EXHIBIT INDEX
EXHIBIT NO. DESCRIPTION
- ----------- -----------
1 Pages 7 to 10, pages 12 to 15 and pages A1 to A6 of the
Proxy Statement of the Corporation for its April 26,
1995 Annual Meeting
2 Amendment to the Articles of Incorporation of the
Corporation approved by the shareholders at the April
27, 1994 Annual Meeting
3 Form 8-K Current Report dated September 19, 1994
and Exhibit 3 thereto
4 Severance Agreement with Lawrence G. Wolski
5 Severance Agreement with George W. Diehl
6 Severance Agreement with Wayne M. Koprowski
7 Severance Policy for Corporate Managers
8 Confidentiality Agreement
9 Amendment to the Rights Agreement dated as of September
2, 1994 between the Corporation and the Rights Agent
10 Letter to Shareholders dated August 4, 1995
11 Press Release dated August 4, 1995 announcing the
Board's recommendation with respect to the Offer
-23-
<PAGE>
EXHIBIT 1
COMPENSATION OF DIRECTORS
Directors of the Corporation who are employees serve
without additional compensation. Directors of the Corporation
who are not employees of the Corporation each receive an annual
retainer fee of $19,000. These Directors also receive $700 for
each meeting of the Board of Directors or a Committee thereof
attended. The Chairman of the Board of Directors receives an
additional retainer of $100,000 per year to serve in that
capacity.
In addition to his annual retainer and meeting fees,
Mr. Deininger also performed consulting services for the
Corporation in 1994 earning $2,775.
Directors who are not employees may elect to become
participants in the Deferred Compensation Plan in order to defer
all or a portion of their fees. Deferred fees otherwise payable
are credited to a participant's Deferred Fee Account bearing an
annual interest rate. Upon termination of their services,
payment from the Deferred Fee Account will be paid to the former
Directors in installments.
<PAGE>
SUMMARY COMPENSATION TABLE
The following table sets forth the compensation paid or
to be paid for the fiscal year 1994 to the Chief Executive
Officer and to the four most highly compensated Executive
Officers of the Corporation. A more detailed explanation follows
the table.
<TABLE>
<CAPTION>
Long-Term Compensation
Awards
----------------------
Securities
Under- All
lying Other
Name and Principal Options/ Compen-
Position Year Salary(1) Bonus SARs(#) sation(2)
- --------------------- ---- --------- ------- ----------------------- ----------
<S> <C> <C> <C> <C> <C>
Raymond E. Micheletti 1994 $308,851 $53,550 0 $8,860
President and Chief 1993 299,224 91,125 15,485
Executive Officer 1992 250,557 107,800 16,078
Lawrence G. Wolski 1994 $245,393 $61,000 8,167 $8,860
Executive Vice 1993 237,548 73,552 15,485
President, Chief 1992 233,001 82,854 16,078
Financial Officer
George W. Diehl 1994 $148,246 $18,948 3,271 $10,398
Vice President 1993 138,371 15,989 10,284
1992 122,792 26,148 10,901
Wayne M. Koprowski 1994 $155,651 $18,574 3,388 $8,860
Vice President, General 1993 148,610 32,400 10,716
Counsel & Secretary 1992 145,157 40,625 13,845
Steven L. Thunander 1994 165,358 $667 3,529 $5,814
Vice President 1993 164,882 25,000 5,839
1992 163,800 28,529 7,997
</TABLE>
Mr. Micheletti retired on December 31, 1994. Upon his
retirement, Mr. Micheletti will receive an annual sum in the
amount of $20,500 per year as part of a non-qualified, unfunded
supplemental retirement payment. He will receive this amount
until the year 2004. The final payment of $13,146 will be made
in 2005. In the event of his prior death, Mr. Micheletti's
spouse will continue to receive the payments until 2005 or until
her death at which time the payments will cease.
______________________________
1) Salary includes base compensation and contributions
made under the Joslyn Corporation Retirement Parity Compensation
-2-
<PAGE>
Plan ("Parity Plan"). Certain Executive Officers of Joslyn
Corporation are participants in the Parity Plan. The Parity Plan
provides annual payments to eligible employees who may elect to
deposit their payments in an individual trust. Each trust
provides for distribution upon: (1) retirement after attaining
age 60, (2) disability or death, (3) attaining age 65, or (4)
termination of employment prior to age 60. The 1994 Parity Plan
amount for eligible individuals listed in the Summary
Compensation Table were: Mr. Micheletti $38,251; Mr. Wolski
$30,793; Mr. Diehl $12,646; Mr. Koprowski $15,051; and Mr.
Thunander $14,758.
2) "All Other Compensation" is comprised of
contributions on behalf of the Executive Officers to the
Corporation's Profit Sharing Plan, a defined plan, except that it
also includes a $1,000 director fee for Messrs. Diehl and
Thunander for being subsidiary company board members.
STOCK OPTIONS/SAR GRANTS IN 1994
The following tables show, as to the Chief Executive
Officer and the four most highly compensated Executive Officers
of the Corporation, information with respect to grants of non-
qualified stock options and stock exercises for the period
January 1, 1994 to December 31, 1994.
NON-QUALIFIED OPTION GRANTS AWARDED DECEMBER 30, 1994
<TABLE>
<CAPTION>
Securities % of Total Potential Realizable Value at
Underlying Granted to Assumed Annual Rates of Stock Price
Options Employees Base Price Expiration Appreciation for Option Term
Name Granted(1) in 1994 ($/share)(2) Date at 0% at 5% at 10%
- ---------------------- ----------- ---------- ------------ ---------- ------- ------ ---------
<S> <C> <C> <C> <C> <C> <C> <C>
Raymond E. Micheletti* 0 0 0 - 0 $0 0
Lawrence G. Wolski 8,167 12.4% $25.50 6/26/05 0 139,453 $358,940
George W. Diehl 3,271 4.9% $25.50 6/26/05 0 55,852 143,760
Wayne M. Koprowski 3,388 5.1% $25.50 6/26/05 0 57,850 148,903
Steven L. Thunander 3,529 5.3% $25.50 6/26/05 0 60,258 155,100
</TABLE>
* Mr. Micheletti retired in December 1994.
______________________________
(1) All options were granted on December 30, 1994, and first
become exercisable on June 26, 1995.
(2) The Base Price equals the average of the last reported
high and low transactions of Common Shares on the NASDAQ National
Market System on the date of the grant of options.
-3-
<PAGE>
AGGREGATED OPTION/SAR EXERCISES IN 1994 AND FISCAL YEAR-END
OPTION/SAR VALUES
This table provides the number of shares acquired by
stock option exercise during 1994. The value realized is the
difference between the market price on the date of exercise and
the base price multiplied by the number of shares exercised. The
table also provides the year-end value of all stock options and
Stock Appreciation Rights ("SARs") granted to but not yet
exercised by each executive. The value represents the difference
of the market price on December 30, 1994 and the base price
multiplied by the number of outstanding options. This value may
go up or down as the stock price fluctuates and is not realized
until exercised.
<TABLE>
<CAPTION>
Securities Value
Underlying of Unexercised
Unexercised In-the-Money
Options/SARs at Options/SARs at
1994 Fiscal Year-end: 1994 Fiscal Year-end:
Shares Acquired Exercisable/ Exercisable/
Name on Exercise Value Realized Unexercisable Unexercisable
- --------------------- --------------- -------------- --------------------- -----------------------
<S> <C> <C> <C> <C>
Raymond E. Micheletti 0 0 19,273/0 $31,762/0
Lawrence G. Wolski 0 0 28,717/8,167 114,240/0
George W. Diehl 2,712 $23,585 14,037/3,271 46,970/0
Wayne M. Koprowski 1,778 16,891 16,660/3,388 58,962/0
Steven L. Thunander 1,946 12,649 20,046/3,529 86,698/0
</TABLE>
DEFINED BENEFIT PENSION PLAN
Salaried employees participated in the Employees'
Supplemental Retirement Plan of Joslyn Corporation ("Pension
Plan") until December 31, 1988 when the Pension Plan was frozen.
Therefore, no additional benefit accruals for either additional
employment service or compensation increases will be incurred.
The estimated annual benefits payable upon retirement at age 65
for each of the individuals named in the Summary Compensation
Table are as follows: Mr. Micheletti $40,158; Mr. Wolski $76,068;
Mr. Diehl $19,937; Mr. Koprowski $13,687; and Mr. Thunander
$34,976.
EMPLOYMENT AGREEMENTS
The Corporation has entered into an employment
agreement with Mr. Lawrence G. Wolski (Acting Chief Executive
Officer, Executive Vice President, and a Director). The
agreement provides for an annual salary to be paid to the
employee at least equal to that being received at the date of the
agreement.
The agreement expires on December 31, 1997. This
agreement may be earlier terminated by Joslyn upon 180 days
written notice. Mr. Wolski is entitled to receive salary at the
-4-
<PAGE>
rate in effect at the date of notice for a period of 18 months
following termination of employment conditioned upon his
rendition of consulting services to Joslyn for the remaining term
of his Agreement. However, Joslyn may terminate the agreement
within such period if the employee accepts other employment prior
to the expiration of the period, and Joslyn reasonably determines
the new employment to be in conflict or competition with Joslyn.
Upon the death of Mr. Wolski, his legal representative is
entitled to receive his salary payable to the end of the month
following the month in which death occurs, plus incentive
compensation for the fiscal year extended to the last day of the
month following date of death, plus an amount equal to the
monthly base salary in effect at the time of death multiplied by
three.
Mr. Wolski has also entered into a separate severance
agreement (the "Severance Agreement") under which Mr. Wolski will
be entitled to receive a single cash payment equal to 2.5 times
the sum of (a) his highest annual base salary in effect during
the prior 12-month period, (b) his Plan Accomplishment level
bonus under the Executive Management Incentive Plan for the full
year, (c) his Parity Plan payment for the full year, and (d) his
maximum Profit Sharing Plan contribution for the full year, if
Mr. Wolski's employment with the Corporation is terminated or he
resigns for "good reason" following a "change in control" of the
Corporation. The Corporation is also obligated to maintain
medical, dental and lift insurance for a period of 2.5 years
following his termination. Any payments made and benefits
provided to Mr. Wolski under the Severance Agreement will be in
lieu of those payments and benefits to which Mr. Wolski would
otherwise be entitled under his employment agreement.
For purposes of the Severance Agreement, a "change in
control" will be deemed to have occurred if any of the following
events occurs:
(i) any individual, entity, or group, including any
"person" (as defined in Section 13(d)(3) or (14(d)(2) of the
Securities Exchange Act of 1934, as amended (Exchange Act)
acquires beneficial ownership of 25% or more of the outstanding
common stock or of the combined voting power of the then
outstanding securities of the Corporation entitled to vote
generally in the election of directors (the "Voting Securities");
(ii) individuals who were directors of the Corporation
as of the effective date of the Severance Agreement shall cease
to constitute a majority of such Board of the Corporation;
(iii) the shareholders shall approve a reorganization,
merger or consolidation of the Company, unless, following such
reorganization, merger or consolidation, (A) at least 60% of the
common stock and 60% of the Voting Securities are owned by all or
substantially all of the same persons who were beneficial owners
-5-
<PAGE>
of such securities immediately prior to such reorganization,
consolidation or merger, in substantially the same proportions
relative to one another, (B) no person beneficially owns 25% or
more of the common stock or voting securities of the surviving
corporation, other than specified entities controlled by the
Company or a person who had beneficial ownership of 25% or more
of the common stock or the Voting Securities immediately prior to
the reorganization, consolidation or merger, and (C) at least a
majority of the members of the board of directors of the
surviving corporation were members of the Incumbent Board; or
(iv) the Shareholders approve a plan of complete
liquidation or dissolution of the Corporation or the sale or
disposition of all or substantially all of the assets of the
Corporation to another corporation other than a corporation which
meets the following requirements: (A) more than 60% of the
common stock and 60% of the voting securities of the corporation
are owned by all or substantially all of the same persons who
were beneficial owners of the common stock and the Voting
Securities immediately prior to such sale or disposition, in
substantially the same proportions relative to one another, (B)
no person beneficially owns 25% or more of the common stock or
voting securities of the corporation, other than specified
entities controlled by the Company or a person who had beneficial
ownership of 25% or more of the common stock or the Voting
Securities immediately prior to such sale or disposition, and (C)
at least a majority of the members of the board of directors of
the corporation were members of the Incumbent Board.
Mr. Wolski will be deemed to have had "good reason" to
terminate his employment with the Corporation following a change
of control if, among other things, without his written consent,
he is assigned to duties inconsistent with his duties or
responsibilities with the Corporation immediately prior to the
change of control, his salary or benefits are reduced, he is
reassigned to any location more than 50 miles from the facility
where he is located at the time of the change of control or,
following a merger or consolidation in which the corporation is
not the surviving corporation or the transfer of all or
substantially all of the assets of the Corporation to another
corporation, the corporation fails to obtain from such
corporation an agreement to assume all of the Corporation's
obligations under the Severance Agreement.
In addition to Mr. Wolski, Mr. Koprowski and Mr. George
Diehl, Vice President, each have severance agreements with the
Corporation. The provisions of those agreements are identical to
the provisions of Mr. Wolski's Severance Agreement except that
each of these officers will be entitled to receive a single cash
payment equal to the sum of 2 (rather than 2.5) times the sum of
their base salary, Plan Accomplishment under the Executive
Management Incentive Plan, Parity Plan payment for the full year
and maximum Profit Sharing Plan contribution for the full year.
-6-
<PAGE>
Mr. Thunander and Mr. Daniel Dumont, Vice President and
President of Joslyn Canada, Inc., are eligible under the
Corporation's Severance Policy for Corporate Managers to receive
one year's annual base salary and benefit continuation for one
year upon termination following a change in control.
The Corporation has the right to terminate any of the
severance agreements and the severance policy prior to a change
in control upon 120 days notice.
REPORT OF THE COMPENSATION COMMITTEE ON EXECUTIVE
COMPENSATION
The Compensation Committee of the Board of Directors is
responsible for reviewing and recommending to the Board
compensation for the Executive Officers of the Corporation,
including the Chief Executive Officer and the four most highly
compensated Executive Officers. The Committee reviews base
salaries and corporate and individual bonus goals of the Chief
Executive Officer and of the Executive Officers as recommended by
the Chief Executive Officer. The Committee also approves all
grants of stock options under the Corporation's Stock Option
Plan. All Committee members are non-employee, outside directors
of the Corporation.
COMPENSATION PHILOSOPHY
The Corporation seeks to link Executive Officer
compensation to profitability resulting in enhanced shareholder
value. The compensation philosophy has the following objectives:
- to attract and retain quality management
- to encourage and reward performance on an individual,
business unit and corporate basis
- to reward both short term and long term performance
- to tie executive compensation to long term growth of
shareholder value
The Corporation's executive compensation program is
comprised of a base salary, an annual incentive bonus program and
a long term incentive compensation plan in the form of stock
options. In addition, Executive Officers are eligible to
participate in various benefit plans, including medical insurance
coverage and profit sharing, which are available to all
employees. While the Compensation Committee is aware of the
deductibility limitation for compensation paid to Executive
Officers, current compensation levels are not expected to
approach the one million dollar limitation.
-7-
<PAGE>
BASE SALARY
Base salaries for Executive Officers are determined in
consideration of each Executive Officer's position,
responsibilities, experience and performance. In setting
compensation, the Committee takes into account the national
marketplace for a group of companies consisting of electrical and
electronics manufacturing companies of similar size (annual sales
between $100 and $600 million) in the Corporation's labor market
("Labor Market Group"). The Committee decided against using the
companies in the industry peer group as reflected in the
Performance Graph because the Committee believes that the
comparatively large size of many of the peer group companies
distorts compensation levels for similar positions. Each
Executive Officer's base salary range is initially set at the
median for similar positions within the Labor Market Group.
The Committee annually reviews and may adjust
individual salaries of all Executive Officers including the Chief
Executive Officer and the four highest compensated Executive
Officers taking into account compensation guidelines (utilizing
executive compensation surveys, outside compensation specialists,
or both), business performance and individual performance.
Business performance is evaluated in reference to actual
corporate earnings results compared to an annual business plan
submitted by Management and approved by the Board of Directors.
The factors impacting base salary are not independently assigned
specific weights. Rather, the Committee reviews all the factors
and makes salary recommendations which reflect the Committee's
analysis of the aggregate impact of these factors.
Mr. Micheletti's 1994 base salary was $270,000 which
was the same base salary that he earned in 1993. The
Compensation Committee retained the services of a compensation
consultant in 1994 to advise it in setting compensation levels
for the Chief Executive Officer and each of the Executive
Officers. The study indicated that Mr. Micheletti's base salary
was about 20% below the median for chief executive officers in
the Labor Market Group. However, in light of Mr. Micheletti's
announced retirement, the Committee decided not to adjust his
base salary for 1994.
ANNUAL INCENTIVE BONUS PROGRAM
In addition to base salary, each Executive Officer is
eligible for an annual incentive cash bonus award under the
Executive Management Incentive Plan. The Compensation Committee
believes that the plan provides an additional short term
incentive to those executives who have a greater potential impact
on business performance by having a larger portion of their total
compensation in variable bonus opportunities. Annual cash
bonuses are paid based on formulas which take into consideration
attainment of corporate and business unit earnings goals and
-8-
<PAGE>
individual goals designed to improve the Corporation's overall
performance. Individual performance goals are tailored to each
Executive Officer's position and vary from person to person. For
Executive Officers, excluding the Chief Executive Officer,
potential bonus payments range from 0% to a maximum of 60% of
base salary depending on the Executive Officer's position with
generally half of the bonus potential based upon corporate or
business unit earnings performance and the other half based upon
individual performance. However, since actual payouts are
dependent on achieving pre-determined performance goals, failure
to attain those goals could result in no bonus. Despite non-
operating charges taken in 1994, the Corporation did achieve a
level of operating income resulting in minimal bonus awards for
the Chief Executive Officer and the Executive Officers.
For 1994, Mr. Micheletti's potential bonus ranged from
0% to 70% of base salary with a target payment of 35% of base
salary. Fifty percent (50%) of his annual potential bonus was
based upon the attainment of targeted net income goals for the
1994 plan year, with the remaining 20% bonus based upon the
achievement of individual goals. For 1994, Mr. Micheletti was
awarded a bonus of $53,550, which is 19.8% of base salary.
LONG TERM INCENTIVE COMPENSATION PLAN (STOCK OPTION PLAN)
The Compensation Committee believes that by providing
key employees, including the Chief Executive Officer and the four
highest compensated Executive Officers, who have substantial
responsibility over the management and growth of the Corporation,
with an opportunity to increase their ownership of the
Corporation's stock, the interest of the shareholders and key
employees, including Executive Officers, will be more closely
aligned. The Stock Option Plan meets this objective by
permitting the Corporation through the Compensation Committee to
make annual grants of non-qualified stock options to key
employees, including the Chief Executive Officer and the four
highest paid Executive Officers. Stock options are granted with
an exercise price equal to the fair market value of the
Corporation's common stock on the date of grant and typically may
be exercised over a period of five or ten years. This approach
is intended to motivate the key employees to contribute to the
creation and growth of shareholder value over the long term.
Value to the optionee is dependent upon an increase in the stock
price above the exercise price. The size of each person's stock
option grant is based upon a formula, originally recommended by
an outside compensation consultant, which provides a range of
possible grants utilizing a multiple of the optionee's base
salary. The formula for determining the number of stock option
grants is the base salary times a multiplier (ranging from .3 to
.85), divided by the then market price of the Corporation's
stock. The Compensation Committee also considers previous
options granted but unexercised as well as actual ownership in
the Corporation's stock in making additional grants of options.
-9-
<PAGE>
The compensation study referred to above indicated that stock
options grants awarded for 1994 are below the median compared to
grants awarded to optionee in the Labor Market Group.
Due to his retirement at the end of 1994, Mr.
Micheletti was not awarded option grants in 1994.
Richard C. Osborne, Chairman
John H. Deininger
Donald B. Hamister
PROPOSED NON-EMPLOYEE DIRECTOR STOCK PLAN
On February 8, 1995, the Board of Directors adopted,
subject to approval by the Corporation's Shareholders, the Non-
Employee Director Stock Plan (the "Plan"). The Plan is designed
to assist the Corporation in attracting, retaining and
compensating highly qualified individuals who are not employees
of the Corporation for service as members of the Board and to
provide them with a proprietary interest in the Corporation's
common shares. The Board believes the Plan will be beneficial to
the Corporation and its Shareholders by allowing non-employee
directors to have a personal financial stake in the Corporation,
in addition to underscoring their common interest with
Shareholders in increasing the value of the Corporation's common
shares over the long term. Non-employee directors currently also
receive cash remuneration for their services as described above
under "Compensation of Directors".
DESCRIPTION OF THE PLAN
The following summary description of the Plan is
qualified in its entirety by reference to the full text of the
Plan, which is attached to this Proxy Statement as Exhibit A.
If approved by the Corporation's Shareholders, the Plan
will provide for fifty percent (50%) of each non-employee
director's annual retainer to be paid in common shares of the
Corporation. The remaining fifty percent (50%) shall be paid in
cash. In addition, the Plan will provide for automatic yearly
grants of options to purchase 1,000 common shares (subject to
adjustment as provided in the Plan) to each active non-employee
director serving on the Board at the time of the grant who is not
an employee of the Corporation or any of its subsidiaries or
affiliates. Each option grant, having a ten-year term, will
permit the holder to purchase shares at their fair market value
on the date the option was granted subject to a vesting
requirement which may be accelerated in the event of a change in
control (as defined in the Plan). Payment for shares will be in
cash to the Corporation. The Plan will expire, unless earlier
terminated, on December 31, 2004.
-10-
<PAGE>
Option grants under the Plan will be made on the date
of the Annual Shareholders' Meeting of each year commencing at
the 1995 Annual Shareholders' Meeting.
All options will expire ten years after the date of
grant, subject to Plan provisions relating to death, retirement
or disability. If a participating non-employee director
terminates service on the Board as the result of disability or
death, previously granted options will continue to become
exercisable as described above but must be exercised within one
year of such termination and in any event within ten years of
grant. In the event of mandatory retirement, previously granted
options will continue to become exercisable but must be exercised
within two years of such termination and in any event within ten
years of grant. If a participating non-employee director
terminates service on the Board for any reason other than
retirement, disability or death, his or her outstanding options
may be exercised only to the extent that they were exercisable at
the time of such termination and expire six months after such
termination. Each option will be non-assignable and non-
transferable other than by will or the laws of descent and
distribution.
An aggregate of 125,000 common shares will be subject
to the Plan. Common shares subject to options that terminate
unexercised will be available for future option grants.
Adjustments will be made in the number of shares subject to the
Plan, the outstanding options, and in the purchase price of
outstanding options, in the event of any change in the
Corporation's outstanding shares by reason of any stock split or
stock dividend, recapitalization, merger, consolidation,
combination or exchange of shares or other similar corporate
change.
ADMINISTRATION
The Plan will be administered by the Compensation
Committee of the Board. The Committee will be authorized to
interpret the Plan, establish and amend rules relating to the
Plan and make other determinations necessary or advisable for the
administration of the Plan, but will have no discretion with
respect to the selection of Directors to receive options, the
number of common shares subject to the Plan or to each grant, or
the purchase price for common shares subject to option. The
Committee will also have no authority to increase the Plan
benefits materially.
The Board of Directors may terminate the Plan at any
time or amend it in whole or in part, except that the provisions
specifying amounts, pricing and timing of grants may not be
amended more than once every six months, other than to comport
with specified changes in applicable law. In addition, any
amendment that increases the number of common shares subject to
-11-
<PAGE>
the Plan or to any option or extends the period during which
options may be granted will require approval by the Corporation's
Shareholders.
THE BOARD OF DIRECTORS RECOMMENDS A VOTE "FOR" APPROVAL OF THE
NON-EMPLOYEE DIRECTOR STOCK PLAN. PROXIES SOLICITED HEREBY WILL
BE VOTED IN FAVOR OF ADOPTION OF THE PLAN UNLESS THE SHAREHOLDER
SPECIFIES OTHERWISE.
Approval of this proposed will require the affirmative
vote of a majority of the outstanding common shares of the
Corporation, present or represented, and entitled to vote at the
Annual Meeting.
-12-
<PAGE>
Exhibit A
JOSLYN CORPORATION
NON-EMPLOYEE DIRECTOR STOCK PLAN
1. PURPOSES.
The Non-Employer Director Stock Plan (the "Plan") is
established to attract, retain and compensate highly qualified
individuals who are not employees of Joslyn Corporation (the
"Company") for service as members of the Board of Directors
("Non-Employee Directors") and to provide them with an ownership
interest in the Company's common shares. The Plan will be
beneficial to the Company and its Shareholders by allowing these
Non-Employee Directors to have a personal financial stake in the
Company through an ownership interest in the Company's common
shares, in addition to underscoring their common interest with
Shareholders in increasing the value of the Company's common
shares over the long term.
2. EFFECTIVE DATE.
The Plan as adopted by the Board of Directors of the
Company shall be effective as of the date it is approved by the
holders of at least a majority of the outstanding common shares
of the Company, present or represented, and entitled to vote at
the 1995 Annual Meeting of Shareholders.
3. ADMINISTRATION OF THE PLAN.
The Plan shall be administered by the Compensation
Committee of the Board of Directors (the "Committee"). Subject
to the provisions of the Plan, the Committee shall be authorized
to interpret the Plan, to establish, amend and rescind any rules
and regulations relating to the Plan, and to make all other
determinations necessary or advisable for the administration of
the Plan; PROVIDED, HOWEVER, that the Committee shall have no
discretion with respect to the eligibility or selection of Non-
Employee Directors to receive options or common shares under the
Plan, the number of common shares subject to any such options, or
the purchase thereunder, or the percentage of the annual retainer
to be paid in common shares; AND PROVIDED FURTHER, that the
Committee shall not have the authority to take any action or make
any determination that would materially increase the benefits
accruing to Non-Employee Directors under the Plan. The
Committee's interpretation of the Plan, and all actions taken and
determinations made by the Committee pursuant to the powers
vested in it hereunder, shall be conclusive and binding upon all
parties concerned including the Company, its Shareholders and
persons granted options or issued common shares under the Plan.
The Chairman of the Board and the Chief Executive Officer of the
-13-
<PAGE>
Company shall be authorized to implement the Plan in accordance
with its terms and to take or cause to be taken such actions of a
ministerial nature as shall be necessary to effectuate the intent
and purposes of the Plan.
4. PARTICIPATION IN THE PLAN.
All active members of the Company's Board of Directors
who are not as of the date of any option grant or common share
issuance employees of the Company or any of its subsidiaries or
affiliates shall be eligible to participate in the Plan.
Directors emeritus shall not be eligible to participate.
5. AWARDS UNDER THE PLAN.
Awards under the Plan shall consist of common shares
and non-qualified stock options ("options") to purchase common
shares.
6. TERMS, CONDITIONS AND FORM OF OPTION
(a) OPTION GRANT DATES. Options to purchase 1,000
common shares (as adjusted pursuant to Paragraph 9) shall
automatically be granted on the date of the Annual Shareholders'
Meeting of each year, commencing at the 1995 Annual Shareholders'
Meeting, to each person who is a Non-Employee Director
immediately after such meeting, or if later, on the date on which
a person is first elected or begins to serve as a Non-Employee
Director other than by reason of termination of employment. If
such person is elected or begins service as a Non-Employee
Director between the date of the Annual Shareholders' Meeting and
October 31 of that year, options to purchase 1,000 common shares
shall automatically be granted on the date of commencement of
such services. If such person is elected or begins service after
October 31 of that year but before the next Annual Shareholders'
Meeting, options to purchase 500 common shares shall
automatically be granted on the date of commencement of such
services.
(b) EXERCISE PRICE. The exercise price to be paid for
any common share for which an option is exercisable shall be 100%
of the fair market value of such common share on the date the
option is granted, which shall be the average of the high and low
price of the common shares on such date as generally reported on
the NASDAQ National Market System.
(c) EXERCISABILITY AND TERM OF OPTIONS. Each option
granted under the Plan shall become exercisable commencing on the
day before the company's next Annual Shareholders' Meeting
following the date of grant. Each option granted under the Plan
shall expire ten years from the date of grant, and shall be
subject to earlier termination as hereinafter provided.
Notwithstanding the foregoing, (1) any option granted under the
-14-
<PAGE>
Plan shall become exercisable as of the date of a Change of
Control in the Company (as set forth in Paragraph 10(e) hereof);
and (ii) any option granted under the Plan shall automatically
become exercisable on the date the rights ("Rights") issued
pursuant to the Rights Agreement, dated as of February 10, 1988,
between The First National Bank of Chicago and Joslyn
Manufacturing Co. (formerly "Joslyn Corporation"), and succeeded
to by the Company, become exercisable for common shares
("Distribution Date"). In the event an option is exercised
within ten days following the Distribution Date, its exercise
shall be effective as of the day before the Distribution Date
unless the optionee specifies a later effective date.
(d) TERMINATION OF DIRECTORSHIP.
1. DISABILITY. Subject to Paragraph 10(e), if
the holder of an option granted under the Plan ceases to be a
Non-Employee Director of the Company by reason of disability,
each such option held by such holder shall be exercisable only to
the extent that such option is exercisable on the effective date
of such holder's ceasing to be a Non-Employee Director and may
thereafter be exercised by such holder (or such holder's
guardian, legal representative or similar person) until the
earlier to occur of the (i) date which is one year after the
effective date of such holder's ceasing to be a Non-Employee
Director and (ii) the expiration date of the term of such option.
2. RETIREMENT. Subject to Paragraph 10(e), if
the holder of an option granted under the Plan ceases to be a
Non-Employee Director of the Company by reason of mandatory
retirement, each such option held by such holder shall be
exercisable only to the extent that such option is exercisable on
the effective date of such holder's ceasing to be a Non-Employee
Director and may thereafter be exercised by such holder (or such
holder's guardian, legal representative or similar person) until
the earlier to occur of the (i) date which is two years after the
effective date of such holder's ceasing to be a Non-Employee
Director and (ii) the expiration date of the term of such option.
3. DEATH. Subject to Paragraph 10(e), if the
holder of an option granted under the Plan ceases to be a Non-
Employee Director of the Company by reason of death, each such
option held by such holder shall be exercisable only to the
extent that such option is exercisable on the date of such
holder's death and may thereafter be exercised by such holder's
executor, administrator, legal representative, beneficiary or
similar person, as the case may be, until the earlier to occur of
the (i) date which is one year after the date of death and (ii)
the expiration date of the term of such option.
4. OTHER TERMINATION. Subject to Paragraph
10(e), if the holder of an option granted under the Plan ceases
to be a Non-Employee Director of the Company for any reason other
-15-
<PAGE>
than disability, mandatory retirement or death, each such option
held by such holder shall be exercisable only to the extent such
option is exercisable on the effective date of such holder's
ceasing to be a Non-Employee Director and may thereafter be
exercised by such holder (or such holder's guardian, legal
representative or similar person) until the earlier to occur of
the (i) date which is six months after the effective date of such
holder's ceasing to be a Non-Employee Director and (ii) the
expiration date of the term of such option.
(e) PAYMENT. The option price shall be paid in cash.
7. AWARD OF SHARES IN LIEU OF RETAINER FEE
(a) PERCENTAGE. Fifty percent (50%) of each Non-
Employee Director's annual retainer fee for service as a member
of the Company's Board of Directors for the ensuing year shall be
paid in common shares of the Company. Such common shares shall
be awarded on the date of the Annual Shareholders' Meeting of
each year. The number of shares to be awarded shall be equal to
fifty percent (50%) of the annual retainer fee divided by the
fair market value of a common share as determined in Paragraph
7(b) below. No fractional shares shall be issued, and the number
of shares shall be rounded down to the nearest whole share and
the remaining amount shall be paid in cash. The remaining fifty
percent (50%) of the annual retainer fee shall be paid in cash.
(b) PRICE. The common shares awarded shall be valued
at the average of the high and low price for common shares of the
Company on the NASDAQ National Market System on the date of the
award of such common shares to the Non-Employee Directors.
8. COMMON SHARES SUBJECT TO THE PLAN.
The common shares that will be available under the Plan
for issuance upon the exercise of option or the award of common
shares shall not exceed an aggregate of 125,000 common shares (as
adjusted pursuant to Paragraph 9). Any common shares subject to
an option grant which for any reason expires or is terminated
unexercised as to such common shares shall again be available for
issuance under the Plan.
9. DILUTION AND OTHER ADJUSTMENT.
In the event of any change in the outstanding common
shares of the Company by reason of any stock split, stock
dividend, recapitalization, merger, consolidation or exchange of
shares or other similar corporate change, such adjustments shall
be made in the grants under the Plan, including the exercise
price of outstanding options, as the Committee determines are
necessary or appropriate to preserve the rights of Non-Employee
Directors under the Plan, including, if necessary, any
adjustments in the maximum number of shares referred to in
-16-
<PAGE>
Paragraph 8 of the Plan. Such adjustments shall be conclusive
and binding for all purposes of the Plan.
10. MISCELLANEOUS PROVISIONS.
(a) RIGHTS AS SHAREHOLDER. A Non-Employee Director
shall have no rights as a holder of Company common shares with
respect to option grants hereunder, unless and until certificates
for common shares are issued to the Non-Employee Director.
(b) ASSIGNMENT OR TRANSFER. No option granted under
the Plan or any rights or interests therein shall be assignable
or transferable by a Non-Employee Director except by will or the
laws of descent and distribution. During the lifetime of a Non-
Employee Director, options granted hereunder are exercisable only
by, and payable only to, the Non-Employee Director.
(c) AGREEMENTS. All options granted under the Plan
shall be evidenced by agreements in such form and containing such
terms and conditions (not inconsistent with the Plan) as the
Committee shall adopt.
(d) COSTS AND EXPENSES. The costs and expenses of
administering the Plan shall be borne by the Company and not
charged to any option or to any Non-Employee Director receiving
an option.
(e) CHANGE IN CONTROL.
1. Notwithstanding any provision in the Plan or
any agreement, in the event of a Change in Control as
defined below in connection with which the Non-Employee
Directors as holders of common shares receive shares of
common stock that are registered under Section 12 of
the Securities and Exchange Act of 1934 ("Exchange
Act"), all outstanding options shall immediately become
exercisable in full, and there shall be substituted for
each common share available under this Plan, whether or
not then subject to an outstanding award, the number of
shares into which each outstanding common share shall
be converted pursuant to such Change in Control. In
the event of any such substitution, the purchase price
per share in the use of an option shall be
appropriately adjusted by the Committee, such
adjustments to be made in the case of outstanding
options without a change in the aggregate purchase
price.
2. Notwithstanding any provision in the Plan or
any agreement, in the event of a Change in Control in
connection with which the Non-Employee Directors as
holders of common shares receive consideration other
than shares of common stock that are registered under
-17-
<PAGE>
Section 12 of the Exchange Act, each outstanding award
shall be surrendered to the Company by the Non-Employee
Director as holder thereof, and each such award shall
immediately be cancelled by the Company, and the holder
shall receive, within ten days of the occurrence of a
Change in Control or within ten days of the approval of
the Shareholders of the Company, a cash payment from
the Company in an amount equal to (i) in the case of an
option, the number of common shares then subject to
such option, multiplied by the excess, if any, of the
greater of (A) the highest per share price offered to
Shareholders of the Company in any transaction whereby
the Change in Control takes place or (B) the fair
market value of a common share on the date of
occurrence of the Change in Control, over the purchase
price per common share subject to the option. The
Company may, but is not required to, cooperate with any
person who is subject to Section 16 of the Exchange Act
to assure that any cash payment in accordance with the
foregoing to such person is made in compliance with
Section 16 and the rules and regulations thereunder.
3. For purposes of the Plan, a "Change in
Control" of the Company shall occur at the earliest of:
i) The acquisition by any entity, person,
or group, of beneficial ownership as that term is
defined in Rule 13d-3 under the Exchange Act, as
amended, of more than 20% of the outstanding
capital stock of the Company entitled to vote for
the election of directors ("voting stock").
ii) The commencement by any entity, person
or group (other than the Company or a subsidiary
of the Company) of a tender offer or an exchange
offer for more than 20% of the outstanding voting
stock of the Company.
iii) The effective time of (i) a merger or
consolidation of the Company with one or more
other companies as a result of which the holders
of the outstanding voting stock of the Company
immediately prior to such merger or consolidation
hold less than 60% of the voting stock of the
surviving or resulting company, or (ii) a transfer
of substantially all of the property of the
Company other than to an entity of which the
Company owns at least 60% of the voting stock; or
iv) The election to the Board, without the
recommendation or approval of the incumbent Board,
of the lesser of (i) three directors or (ii)
-18-
<PAGE>
directors constituting a majority of the number of
directors of the Company then in office.
11. AMENDMENT AND TERMINATION
The Board of Directors of the Company may amend,
terminate or suspend the Plan at any time, in its sole and
absolute discretion; provided, however, to the extent required to
qualify the Plan under Rule 16b-3 promulgated under Section 16 of
the Exchange Act, no amendment shall be made more than once every
six months that would change the amount, price or timing of the
annual grants or the common shares issued in lieu of annual
retainer fee, the purchase price of options granted hereunder,
determination provisions relating to options granted hereunder,
or the category of persons eligible to receive grants of options
and awards of common shares hereunder, other than to comport with
changes in the Internal Revenue Code of 1986, as amended, or the
Employee Retirement Income Security Act of 1974 or the rules and
regulations promulgated thereunder; and provided, further, to the
extent required to qualify the Plan under Rule 16b-3, no
amendment that would (a) materially increase the number of common
shares that may be issued under the Plan, (b) materially modify
the requirements as to eligibility for participation in the Plan,
or (c) otherwise materially increase the benefits accruing to
participants under the Plan, shall be made without the approval
of the Company's Shareholders. The Plan (but not the options
previously granted under the Plan) shall in any event terminate
on, and no options shall be granted after, December 31, 2004.
12. COMPLIANCE WITH SEC REGULATIONS.
It is the Company's intent that the Plan comply in all
respects with Rule 16b-3 under the Exchange Act and any related
regulations. If any provisions of the plan are found not to be
in compliance with such Rule and regulations, the provision shall
be deemed null and void. All grants and exercises of options and
issuance of common shares under the Plan shall be executed in
accordance with the requirements of Section 16 of the Exchange
Act and regulations promulgated thereunder.
13. GOVERNING LAW.
The validity and construction of the Plan and any
agreements entered into thereunder shall be governed by the laws
of the State of Illinois.
-19-
<PAGE>
EXHIBIT 2
Amendment to The Articles of Incorporation
of The Corporation
Approved By The Shareholders at Its April 26, 1995
Annual Meeting
The Directors of the Corporation shall not be liable to the Corporation or to
its shareholders for monetary damages for breach of fiduciary duties as a
Director, provided that this provision shall not eliminate or limit the
liability of a Director (i) for any breach of the Director's duty of loyalty
to the Corporation or its shareholders, (ii) for acts or omissions not in
good faith or that involve intentional misconduct or a knowing violation of
the law, (iii) under Section 8.65 of the Illinois Business Corporation Act or
(iv) for any transaction from which the Director derived an improper personal
benefit.
<PAGE>
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): September 16, 1994
--------------------
Joslyn Corporation
--------------------------------------------------
(Exact name of registrant as specified in charter)
Illinois 0-1252 36-3560095
- --------------- --------------- --------------
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification
incorporation) No.)
30 South Wacker Drive, Chicago, Illinois 60606
- ------------------------------------------ ---------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 454-2900
------------------
Not applicable
- -------------------------------------------------------------------
(Former name or former address, if changed since last report)
- ---------------------------------------------------------------------------
- ---------------------------------------------------------------------------
EXHIBIT INDEX ON PAGE 5
PAGE 1 OF 132
<PAGE>
ITEM 5. OTHER EVENTS.
(A) ANTICIPATED THIRD QUARTER CHARGE.
On September 16, 1994, the Registrant issued a press release
disclosing that it anticipates taking a third quarter charge against earnings
for increased environmental reserves, principally relating to a previously
disclosed site in Panama, Oklahoma. A copy of the Registrant's press release
is filed as an exhibit to this Current Report on Form 8-K and incorporated
herein by reference.
(B) AMENDED AND RESTATED BY-LAWS.
On September 16, 1994, the Registrant's Board of Directors approved
an amendment and restatement of the Registrant's By-Laws. Among other
changes, the Registrant's By-Laws now provide that except as otherwise
provided by applicable law, a shareholder wishing to make a proposal for
shareholder vote at an annual meeting or to nominate a candidate for election
to the Board at an annual meeting is required to give written notice to the
Secretary of the Registrant of his or her intention to make such a proposal
or nomination. The notice must be received by the Registrant not less than 60
days nor more than 90 days prior to the annual meeting, or if less than 75
days' notice or prior public disclosure of the meeting date is given or made,
the notice must be received within 10 days after the meeting date is
announced. The notice is required to contain certain information about both
the shareholder giving the notice and the proposal or nominee. The
Registrant may require that the proposed nominee furnish other information to
determine that person's eligibility to serve as director. A proposal or
nomination that does not comply with the above procedure will be disregarded.
Such notices of proposals or nominations should be addressed to
Wayne M. Koprowski, Secretary, Joslyn Corporation, 30 South Wacker Drive,
Chicago, Illinois 60606. The 1995 Annual Meeting of the shareholders of the
Registrant is currently scheduled to be held on April 26, 1995.
A copy of the By-Laws of the Registrant, as amended and restated,
is filed as an exhibit to this Current Report on Form 8-K and incorporated
herein by reference.
(C) CHANGES IN SEVERANCE ARRANGEMENTS AND BENEFIT PLANS.
At its meeting held on September 16, 1994, the Registrant's Board
of Directors also updated its severance arrangements for key employees by
approving severance agreements for three key executive officers and severance
policies for 42 other key employees. Under the new arrangements, severance
payments would be made and certain employee benefits would be continued in
the event of a change in control of the Registrant, as defined in the
agreements and policies,
<PAGE>
and a termination of employment of the covered key employees. The Registrant
estimates that if there were a change in its control followed by a
termination of employment of all of the key employees covered by the updated
arrangements, the cost to the Registrant as a result of the updating of its
severance arrangements would increase by approximately $1,750,000 to
approximately $3,800,000. At that same meeting, the Board of Directors of
the Registrant also approved amendments to the Registrant's Executive
Management Incentive Plan, Parity Compensation Plan and Employees' Savings
and Profit Sharing Plan which provide, in each case, that if there is a
change in control of the Registrant followed by a termination of the plan or
a reduction in benefit levels thereunder, accrued benefits for the then
current year would be protected.
Copies of the new agreements, policies and benefit plan amendments
(other than the amendment to the Employees' Savings and Profit Sharing Plan)
are filed as exhibits to this Current Report on Form 8-K and incorporated
herein by reference.
Item 7. Exhibits.
---------
3 By-Laws of the Registrant, as amended and restated on
September 16, 1994.
10.1 Form of Severance Agreement between the Registrant and
Lawrence G. Wolski.
10.2 Form of Severance Agreement between the Registrant and
Wayne M. Koprowski.
10.3 Form of Severance Agreement between the Registrant and
George W. Diehl.
10.4 Registrant's Severance Policy For Corporate Managers.
10.5 Registrant's Severance Plan For Corporate Staff For
Change In Control Situations.
10.6 September 16, 1994 Amendment to Executive Management
Incentive Plan.
10.7 Septenber 16, 1994 Amendment to Parity Compensation Plan.
20 Press Release of the Registrant issued September 16,
1994.
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.
JOSLYN CORPORATION
By: /s/ L. G. Wolski
-----------------------------
Name: L. G. Wolski
Title: Executive Vice President
Dated: September 19, 1994
<PAGE>
EXHIBIT INDEX
Exhibit
Number Description of Exhibit Page
- -------- ---------------------- -----
3 By-Laws of the Registrant, as amended and restated on 6
September 16, 1994.
10.1 Form of Severance Agreement between the Registrant and 52
Lawrence G. Wolski.
10.2 Form of Severance Agreement between the Registrant and 69
Wayne M. Koprowski.
10.3 Form of Severance Agreement between the Registrantand 86
George W. Diehl.
10.4 Registrant's Severance Policy For Corporate Managers. 103
10.5 Registrant's Severance Plan For Corporate Staff For 119
Change In Control Situations.
10.6 September 16, 1994 Amendment to Executive Management 125
Incentive Plan.
10.7 September 16, 1994 Amendment to Parity Plan. 128
20 Press Release of the Registrant issued September 16, 132
1994.
<PAGE>
EXHIBIT 3
BY-LAWS
OF
JOSLYN CORPORATION
(AN ILLINOIS CORPORATION)
AS AMENDED AND RESTATED ON SEPTEMBER 16, 1994
<PAGE>
BY-LAWS
OF
JOSLYN CORPORATION
As Amended and Restated on September 16, 1994
TABLE OF CONTENTS
-------------------
ELEMENT TOPIC PAGE
- ------- ------- ------
ARTICLE I OFFICES, BOOKS AND RECORDS 1
Section 1.1 Offices 1
Section 1.2 Books and Records 1
ARTICLE II MEETINGS OF SHAREHOLDERS 1
Section 2.1 Place of Meetings 1
Section 2.2 Annual Meetings 2
Section 2.3 Special Meetings 4
Section 2.4 Notice of Meetings 4
Section 2.5 List of Shareholders 5
Section 2.6 Quorum and Adjournments 5
Section 2.7 Organization 6
Section 2.8 Order of Business and Procedure 7
Section 2.9 Voting by Shareholders 8
Section 2.10 Voting by Proxies 8
Section 2.11 Required Vote 8
Section 2.12 Ballots 9
ARTICLE III BOARD OF DIRECTORS 9
Section 3.1 General Powers 9
Section 3.2 Number, Qualifications, Terms of Office and Chairman 10
Section 3.3 Election of Directors 11
Section 3.4 Newly Created Directorships and Vacancies 12
Section 3.5 Place of Meetings 12
Section 3.6 Annual Meetings 13
Section 3.7 Regular Meetings 13
Section 3.8 Special Meetings 13
Section 3.9 Quorum and Manner of Acting 14
Section 3.10 Presence at Meetings 15
Section 3.11 Organization and Procedure 15
Section 3.12 Minutes of Meetings 15
Section 3.13 Informal Action by Unanimous Consent 15
Section 3.14 Compensation 16
Section 3.15 Reliance Upon Records 16
<PAGE>
ARTICLE IV EXECUTIVE COMMITTEE 17
Section 4.1. Designation, Term and Vacancies 17
Section 4.2. Powers 18
Section 4.3. Procedures, Meetings, Voting and Records 19
ARTICLE V OFFICERS 20
Section 5.1. Designation 20
Section 5.2. Election and Qualifications 20
Section 5.3. Term of Office 20
Section 5.4. Vacancies 21
Section 5.5. Appointive Officers 21
Section 5.6. Compensation 21
Section 5.7. Bonds 22
Section 5.8. Employment Contracts 22
Section 5.9. Chief Executive Officer 22
Section 5.10. President 23
Section 5.11. Vice Presidents 23
Section 5.12. Secretary 24
Section 5.13. Assistant Secretaries 25
Section 5.14. Treasurer 25
Section 5.15. Assistant Treasurers 27
Section 5.16. Chief Financial Officer 27
Section 5.17. Controller 28
Section 5.18. Assistant Controllers 29
ARTICLE VI INDEMNIFICATION 29
Section 6.1. General 29
Section 6.2. Determination of Indemnification 31
Section 6.3. Advancement of Expenses 31
Section 6.4. Non-Exclusivity 32
Section 6.5. Certain Definitions 32
Section 6.6. Insurance 33
Section 6.7. Reports 33
Section 6.8. Contract with the Corporation 33
ARTICLE VII CHECKS, CONTRACTS, LOANS AND BANK ACCOUNTS 34
Section 7.1. Checks, Drafts, etc. 34
Section 7.2. Contracts 34
Section 7.3. Loans 35
Section 7.4. Deposits 35
<PAGE>
ARTICLE VIII SHARES AND THEIR TRANSFER 35
Section 8.1. Certificates of Stock 35
Section 8.2. Transfer of Stock 36
Section 8.3. Lost, Destroyed, Stolen and Mutilated Certificates 36
Section 8.4. Transfer Agent and Registrar and Regulations 37
Section 8.5. Record Date 37
ARTICLE IX MISCELLANEOUS PROVISIONS 38
Section 9.1. Seal 38
Section 9.2. Fiscal Year 38
Section 9.3. Notices 39
Section 9.4. Waiver of Notice 39
Section 9.5. Resignations 40
Section 9.6. Destruction of Records 40
Section 9.7. Simultaneous Death of Directors 41
ARTICLE X INTERPRETATION, SEVERABILITY AND AMENDMENTS 41
Section 10.1. Interpretation 41
Section 10.2. Severability 41
Section 10.3. Amendments 42
<PAGE>
BY-LAWS
OF
JOSLYN CORPORATION
(AN ILLINOIS CORPORATION)
AS AMENDED AND RESTATED ON SEPTEMBER 16, 1994
ARTICLE I
OFFICES, BOOKS AND RECORDS
SECTION 1.1.
OFFICES
There shall be maintained continuously a registered
office and registered agent of JOSLYN CORPORATION (herein called the
"Corporation") within the State of Illinois, the City of Chicago, County of
Cook. The Corporation may also have such other offices at such other places
both within or without the State of Illinois as the Board of Directors of the
Corporation (herein called the "Board") may from time to time determine or
the business of the Corporation may require.
SECTION 1.2.
BOOKS AND RECORDS
The books and records of the Corporation shall be kept at the
registered office of the Corporation, or at such other place or places as the
Board may from time to time determine.
ARTICLE II
MEETINGS OF SHAREHOLDERS
SECTION 2.1.
PLACE OF MEETINGS
Meetings of shareholders shall be held at such place, either within
or without the State of Illinois,
1
<PAGE>
as may be fixed from time to time by the Board and specified in the
respective notices or waivers of notice thereof, provided that if the Board
shall not so fix the place of any meeting of shareholders or if any special
meeting of shareholders is called by a person or persons other than the
Board, such meeting shall be held at the registered office of the Corporation.
SECTION 2.2.
ANNUAL MEETINGS
2.2.1. An annual meeting of shareholders for the purpose of
electing directors and the transaction of such other business as may properly
be brought before the meeting shall be held each year at such time as may
from time to time be determined by the Board.
2.2.2. In the absence of such a determination by the Board prior
to twenty (20) days before the fourth Tuesday in April of each year, such
annual meeting shall be held on the fourth Wednesday in April at the hour of
11:00 a.m., unless that day is a legal holiday, and if it is a legal holiday,
then on the next succeeding business day which is not a legal holiday.
2.2.3. If, for any reason, the annual meeting shall not be held
at the time herein provided, the same may be held within the earlier of six
months after the end of the Corporation's fiscal year or fifteen months after
its last annual meeting upon notice as hereinafter provided or the business
thereof may be transacted at any special meeting of shareholders called for
that purpose.
2.2.4. Except as otherwise provided by law or the Articles of
Incorporation (herein meaning the Articles of Incorporation of the
Corporation as the same may be amended from time to time), the only business
which properly shall be conducted at any annual meeting of shareholders shall
(i) have been specified in the written notice of the meeting (or any
supplement thereto) given as provided in subsection 2.4.1., (ii) be brought
before the meeting by or at the direction of the Board of Directors or the
officer of the Corporation presiding at the meeting or (iii) have been
specified in a written notice (a "Shareholder Meeting Notice") given to the
Corporation, in accordance with all of the following requirements, by or on
2
<PAGE>
behalf of any shareholder who is entitled to vote at such meeting. Each
Shareholder Meeting Notice must be delivered personally to, or be mailed to
and received by, the Secretary of the Corporation at the principal executive
offices of the Corporation in the City of Chicago, State of Illinois, not
less than 60 days nor more than 90 days prior to the annual meeting;
PROVIDED, HOWEVER, that in the event that less than 75 days' notice or prior
public disclosure of the date of the annual meeting is given or made to
shareholders, notice by the shareholder to be timely must be received not
later than the close of business on the tenth day following the day on which
such notice of the date of the annual meeting was mailed or such public
disclosure was made, whichever first occurs. Each Shareholder Meeting Notice
shall set forth: (i) a description of each item of business proposed to be
brought before the meeting and the reasons for conducting such business at
the annual meeting; (ii) the name and record address of the shareholder
proposing to bring such item of business before the meeting; (iii) the class
and number of shares of stock held of record, owned beneficially and
represented by proxy by such shareholder as of the record date for the
meeting (if such date shall then have been made publicly available) and as of
the date of such Shareholder Meeting Notice and (iv) all other information
which would be required to be included in a proxy statement filed with the
Securities and Exchange Commission if, with respect to any such item of
business, such shareholder were a participant in a solicitation subject to
Section 14 of the Securities Exchange Act of 1934, as amended. No business
shall be brought before any annual meeting of shareholders of the Corporation
otherwise than as provided in this Section; PROVIDED, HOWEVER, that nothing
contained in this Section shall be deemed to preclude discussion by any
shareholder of any business properly brought before the annual meeting. The
person presiding at the annual meeting of shareholders shall, if the facts so
warrant, determine that business was not properly brought before the meeting
in accordance with the provisions of this subsection and, if he should so
determine and so declare to the meeting, any such business so determined to
be not properly brought before the meeting shall not be transacted.
3
<PAGE>
SECTION 2.3.
SPECIAL MEETINGS
2.3.1. Special meetings of shareholders for any purpose or
purposes, unless otherwise prescribed by law, may be called at any time by
the Board, the Chairman, the Chief Executive Officer or the President.
2.3.2. Special meetings of shareholders for any purpose or
purposes, unless otherwise prescribed by law, shall be called by the
Secretary promptly upon receipt of a written demand, stating the purpose or
purposes of the proposed meeting, of the holders of not less than one-fifth
(1/5) of the number of outstanding shares of stock entitled to vote at such
meeting.
2.3.3. The business transacted at any special meeting of
shareholders shall be limited to the purpose or purposes stated in the call
thereof.
SECTION 2.4.
NOTICE OF MEETINGS
2.4.1. Written notice of each meeting of shareholders stating the
place, day and hour of the meeting, unless otherwise prescribed by law or the
Articles of Incorporation, shall be delivered by the Secretary, personally or
by mail, not less than ten (10) nor more than sixty (60) days before the date
of the meeting or, in the case of a meeting called for the purpose of acting
upon a merger, consolidation, share exchange, dissolution or sale, lease or
exchange of assets, not less than twenty (20) nor more than sixty (60) days
before the date of the meeting, to each shareholder of record entitled to
vote at such meeting.
2.4.2. The notice of a special meeting shall state the purpose or
purposes for which the meeting is called. It shall also identify the person
or persons calling or directing the calling of the meeting.
4
<PAGE>
SECTION 2.5.
LIST OF SHAREHOLDERS
2.5.1. The Secretary shall prepare, or cause to be prepared,
within twenty (20) days after the record date for a meeting of the
shareholders or ten days before such meeting, whichever is earlier, a
complete list of the shareholders entitled to vote at such meeting, arranged
in alphabetical order, with the address of and the number of shares of each
class of stock of the Corporation registered in the name of each shareholder.
2.5.2. The list of shareholders entitled to vote at a meeting
shall be subject to inspection by any shareholder, and to copying at the
shareholder's expense, for any purpose germane to the meeting, at any time
during usual business hours, for a period of at least ten days prior to the
meeting, at the registered office of the Corporation.
2.5.3. Such list shall also be produced and kept open at the time
and place of the meeting and shall be subject to the inspection of any
shareholder during the whole time of the meeting.
2.5.4. The validity of the proceedings had or taken at any
meeting of shareholders shall in no way be affected by the failure of the
Secretary to prepare such list or by reason of the fact that such list has
not been so kept on file, subject to the inspection of shareholders, for ten
days before such meeting.
2.5.5. The original share ledger or transfer book, or a duplicate
thereof kept in the State of Illinois, shall be prima facie evidence as to
who are the shareholders entitled to examine such list or share ledger or
transfer book or to vote at any meeting of shareholders.
SECTION 2.6.
QUORUM AND ADJOURNMENTS
2.6.1. For the purpose of any action to be taken by shareholders
at any meeting, the presence in person or by proxy of the shareholders of
record holding a majority of the outstanding shares of stock of the
Corporation, entitled to vote on a matter, shall constitute a quorum for
consideration of such matter, except as otherwise expressly provided by law
or by the Articles of Incorporation.
5
<PAGE>
2.6.2. If a quorum, as provided in subsection 2.6.1. hereof, shall
not be present, in person or by proxy, at any meeting of the shareholders,
the shareholders entitled to vote at the meeting present in person or
represented by proxy shall have the power to adjourn the meeting from time to
time, without notice other than announcement at the meeting, until such a
quorum shall be present or represented. At such adjourned meeting at which a
quorum shall be present in person or by proxy, any business may be transacted
which might have been transacted at the meeting as originally notified.
2.6.3. The absence from any meeting of shareholders of the number
of holders of record of so much of the stock of the Corporation as required
by law, the Articles of Incorporation or these by-laws for action upon any
given matter shall not prevent action at such meeting upon any other matter
or matters which may properly come before the meeting if the number required
in respect to such other matter or matters shall be present and provided
always that a quorum must be present as provided in Section 2.6.1.
2.6.4. Nothing in these by-laws shall affect the right to adjourn
any meeting from time to time when a quorum is present.
SECTION 2.7.
ORGANIZATION
2.7.1. At any meeting of shareholders, the Chairman, or in his
absence the Chief Executive Officer, or in his absence the President, or in
the absence of all of the foregoing, a Vice President appointed in writing by
one of them, or in the absence of all of the foregoing, a person chosen by a
majority of the votes entitled to be cast by the shareholders of the
Corporation present in person or by proxy and entitled to vote at the meeting
shall act as chairman of the meeting; and the Secretary, or in his absence an
Assistant Secretary, or in the absence of the Secretary and all Assistant
Secretaries, a person whom the chairman of the meeting shall appoint, shall
act as secretary of the meeting.
2.7.2. The Board, in advance of any meeting of shareholders, may
appoint one or more inspectors of election to act at such meeting or any
adjournment thereof.
6
<PAGE>
2.7.3. If inspectors of election are not appointed by the Board
prior to any meeting of shareholders, the chairman of such meeting may, or
upon the request of any shareholder shall, appoint one or more persons as
inspectors of election at any time during the course of the meeting.
2.7.4. In case any inspector of election appointed pursuant to
subsection 2.7.2. or 2.7.3. fails to appear or to act, the vacancy may be
filled by the chairman of the meeting.
2.7.5. Each inspector of election, before entering upon the
discharge of his duties, shall take and sign an oath faithfully to execute
the duties of inspector at such meeting with strict impartiality and
according to the best of his ability.
2.7.6. The duties of the inspectors of election shall be to
ascertain and report the number of shares represented at the meeting, to
determine the validity and effect of all proxies, to count all the votes and
report the results thereof, and to do such other acts as are proper to
conduct the election and voting with impartiality and fairness to the
shareholders.
2.7.7. If no inspector is appointed as herein provided, such duties
shall be performed by the secretary of the meeting.
2.7.8. The report of the inspector or inspectors on the number of
shares represented at the meeting and the results of the voting shall be
prima facie evidence thereof.
SECTION 2.8.
ORDER OF BUSINESS AND PROCEDURE
2.8.1. The chairman of the meeting shall have the right to decide,
without appeal, the order of business for such meeting and all procedural
motions, questions and other matters (including the right to limit discussion
as being unreasonably cumulative or prolonged or irrelevant to a pending
question) pending before the meeting.
2.8.2. The Corporation shall keep minutes of the proceedings of its
shareholders' meetings.
7
<PAGE>
SECTION 2.9.
VOTING BY SHAREHOLDERS
Except as otherwise expressly provided by law or by the Articles of
Incorporation or these by-laws, each shareholder present in person or by
proxy at any meeting shall have, on each matter on which such shareholder is
entitled to vote, one vote with respect to each share of stock registered in
his name on the books of the Corporation on the date fixed pursuant to
Section 8.5 hereof as the record date for the determination of shareholders
entitled to notice of and to vote at such meeting.
SECTION 2.10.
VOTING BY PROXIES
Any shareholder entitled to vote at any meeting may vote either in
person or by proxy, signed by such shareholder (or by his attorney-in-fact
thereunto authorized in writing) and delivered to the secretary of the
meeting; PROVIDED, HOWEVER, that no proxy shall be valid after the expiration
of eleven (11) months from the date of its execution, unless otherwise
provided in the proxy. Every proxy shall continue to be in full force and
effect until revoked by the person executing it prior to the vote pursuant
thereto except as otherwise provided by law. Such revocation may be effected
by a writing delivered to the Corporation stating that the proxy is revoked
or by a subsequent proxy executed by, or by attendance at the meeting and
voting in person by, the person executing the proxy.
SECTION 2.11.
REQUIRED VOTE
2.11.1. Except as otherwise expressly provided by law or by the
Articles of Incorporation or these by-laws, every matter other than that of
the election of directors to be decided by shareholders at any meeting shall
be decided by the affirmative vote of the majority of the shares represented
at the meeting and entitled to vote on such matter, provided a quorum is
present.
2.11.2. In all elections for directors, every shareholder so
entitled to vote shall have the right to vote, in person or by proxy, the
number of shares owned by such shareholder for as many persons as there
8
<PAGE>
are directors to be elected, or to cumulate such votes and give one candidate
as many votes as shall equal the number of directors multiplied by the number
of such shares or to distribute such cumulative votes in any proportion among
any number of candidates.
2.11.3 In all elections for directors, except as otherwise
required by law or the Articles of Incorporation, the number of nominees as
determined in subsection 3.2.1 receiving the greatest number of votes to fill
the vacancies on the Board shall be elected to fill those vacancies at the
meeting of shareholders by the shareholders of the Corporation present in
person or by proxy and entitled to vote in such election, provided a quorum
is present at such meeting.
SECTION 2.12.
BALLOTS
2.12.1. Unless directed by the chairman of the meeting or demanded
by the holders of a majority of the shares of stock of the Corporation
present in person or by proxy at any meeting and entitled to vote thereon,
the vote on any matter need not be by ballot, but upon any such direction or
such demand, such vote shall be taken by ballot.
2.12.2. On a vote by ballot, each ballot, to be qualified and
counted, shall be signed by the shareholder voting or by his proxy, if there
be such proxy, and shall state the number of shares voted by him. Anyone
wishing to cumulate votes should receive a ballot and indicate how many
shares will be voted for a director candidate/nominee.
ARTICLE III
BOARD OF DIRECTORS
SECTION 3.1.
GENERAL POWERS
3.1.1. The business and affairs of the Corporation shall be managed
by or under the direction of the Board as from time to time constituted.
9
<PAGE>
3.1.2. The Board may exercise all powers, rights and privileges of
the Corporation (whether expressed or implied in the Articles of
Incorporation or conferred by law) and do all acts and things which may be
done by the Corporation, as are not by law, the Articles of Incorporation or
these by-laws directed or required to be exercised or done by the
shareholders.
SECTION 3.2.
NUMBER, QUALIFICATIONS, TERMS OF OFFICE AND CHAIRMAN
3.2.1. The Board of Directors of the Corporation shall consist of
no less than three (3) nor more than eight (8) persons. Notwithstanding any
other provisions of these by-laws, any change by the Board in the number of
directors shall be by resolution of the Board adopted by the affirmative vote
of not less than seventy-five percent (75%) of the directors then qualified.
3.2.2. The term of office of each director elected at any annual
meeting of shareholders shall begin at the time of such election and expire
at the next annual shareholders' meeting following their election.
3.2.3. Notwithstanding the foregoing, the term of office of a
director shall continue until the successor to such director shall be elected
and qualified unless the directorship is eliminated, in which case the term
of office shall expire at the appropriate annual meeting, or at any earlier
time when such office, being lawfully vacant, is eliminated; PROVIDED,
HOWEVER, that a decrease in the number of directors does not shorten an
incumbent director's term.
3.2.4. A person elected as a director shall be deemed to have
qualified as a director if he shall have met the qualifications for directors
prescribed by law, the Articles of Incorporation and these by-laws, and if he
shall have indicated, in any form whatever, his willingness to serve as a
director of the Corporation.
3.2.5. One member of the Board shall be elected Chairman. The
Chairman shall preside at all meetings of the shareholders of the Corporation
and of the Board.
10
<PAGE>
SECTION 3.3.
ELECTION OF DIRECTORS
3.3.1. Directors shall be elected as provided in these by-laws at
each annual meeting of the shareholders, or if for any reason the election
shall not have been held at an annual meeting, at any special meeting called
for that purpose after proper notice. Directors shall be elected solely from
those persons nominated for director at the meeting.
3.3.2. Nominations for the election of directors may be made by the
Board of Directors or a committee appointed by the Board of Directors
pursuant to subsection 4.1.5. or by any shareholder entitled to vote in the
election of directors generally. However, any shareholder entitled to vote
in the election of directors generally may nominate one or more persons for
election as directors at a meeting at which directors are to be elected only
if written notice of such shareholder's intent to make such nomination or
nominations has been delivered personally to, or been mailed to and received
by, the Secretary of the Corporation at the principal executive offices of
the Corporation in the City of Chicago, State of Illinois, not less than 60
days nor more than 90 days prior to the meeting; PROVIDED, HOWEVER, that, in
the event that less than 75 days' notice or prior public disclosure of the
date of the meeting is given or made to shareholders, notice by the
shareholder to be timely must be so received not later than the close of
business on the tenth day following the day on which such notice of the date
of the meeting was mailed or such public disclosure was made, whichever first
occurs. Each such notice shall set forth: (i) the name and record address of
the shareholder who intends to make the nomination; (ii) the name, age,
principal occupation or employment, business address and residence address of
the person or persons to be nominated; (iii) the class and number of shares
of stock held of record, owned beneficially and represented by proxy by such
shareholder and by the person or persons to be nominated as of the record
date for the meeting (if such date shall then have been made publicly
available) and of the date of such notice; (iv) a representation that the
shareholder intends to appear in person or by proxy at the meeting to
nominate the person or persons specified in the notice; (v) a description of
all arrangements or understandings between such shareholder and each nominee
and any other person or persons (naming such person or persons pursuant to
which the nomination or nominations are to be made by such shareholder; (vi)
such
11
<PAGE>
other information regarding each nominee proposed by such shareholder as
would be required to be included in a proxy statement filed pursuant to the
Securities Exchange Act of 1934, as amended, and the proxy rules of the
Securities and Exchange Commission thereunder; and (vii) the consent of each
nominee to serve as a director of the corporation if so elected. The
Corporation may require any proposed nominee to furnish such other
information as may reasonably be required by the Corporation to determine the
eligibility of such proposed nominee to serve as a director of the
Corporation. The person presiding at the annual meeting of shareholders
shall, if the facts so warrant, determine that a nomination was not made in
accordance with the provisions of this subsection, and if he should so
determine and so declare to the meeting, the defective nomination shall be
disregarded. No person shall be eligible for election as a director of the
Corporation unless nominated in accordance with the procedures set forth
herein.
SECTION 3.4.
NEWLY CREATED DIRECTORSHIPS AND VACANCIES
3.4.1. Any vacancy occurring in the Board and any directorship to
be filled by reason of an increase in the number of directors may be filled
by election at an annual meeting or at a special meeting of the shareholders
called for that purpose; PROVIDED, HOWEVER, that the Board may fill vacancies
arising between meetings of shareholders for any reason including vacancies
due to an increase in the number of directors.
3.4.2. A director elected by the shareholders to fill a vacancy
shall hold office for the balance of the term for which he was elected. A
director appointed by the Board to fill a vacancy shall serve until the next
meeting of shareholders at which directors are to be elected.
SECTION 3.5.
PLACE OF MEETINGS
The Board may hold its meetings at any place within or without the
State of Illinois.
12
<PAGE>
SECTION 3.6.
ANNUAL MEETING
A regular meeting of the Board for the purposes of organization,
election of officers and transaction of such other business as the Board may
choose shall be held, if practicable, at the close of each annual meeting of
shareholders for election of directors and in the city where the annual
meeting was held.
SECTION 3.7.
REGULAR MEETINGS
Regular meetings of the Board may be held at such time and place as
may from time to time be specified in a resolution or resolutions adopted by
the Board without further notice. Attendance of a director at any meeting
shall constitute a waiver of notice of such meeting except where a director
attends a meeting for the express purpose of objecting to the transaction of
any business because the meeting is not lawfully called or convened.
SECTION 3.8.
SPECIAL MEETINGS
3.8.1. Special meetings of the Board may be called at any time by
the Board, the Chairman, the Chief Executive Officer, the President or by
such number of directors as shall be not less than a majority of the Board.
3.8.2. Notice of a special meeting shall be given by the Secretary
or by the person or persons calling such meeting, either personally or by
mail or by public wire or wireless communications media or telephone, to each
director not less than 24 hours before the time of such meeting.
3.8.3 Every notice of a special meeting of the Board shall state
the time and place of the meeting, which shall be fixed by the person or
persons calling such meeting, but need not state the purposes thereof except
as otherwise required by law or these by-laws.
13
<PAGE>
SECTION 3.9.
QUORUM AND MANNER OF ACTING
3.9.1. At each meeting of the Board the presence of a majority of
the directors then in office (as constituted pursuant to subsection 3.2.1.
and selected pursuant to the provisions of Section 3.3 or 3.4 hereof) but not
less than a majority of the minimum number of directors specified in Section
3.2.1 herein, shall be necessary to constitute a quorum for the transaction
of business.
3.9.2. The act of a majority of the directors present at the time
of taking such vote, if a quorum shall be present at such time, shall be the
act of the Board, except as may be otherwise specifically provided by law,
the Articles of Incorporation or these by-laws.
3.9.3. Notwithstanding any other provisions of these by-laws, any
consolidation or merger of the Corporation other than with a subsidiary
corporation, any sale, lease, exchange, mortgage, pledge or other disposition
of all, or substantially all, the property and assets of the Corporation, any
dissolution or liquidation of the Corporation or any amendment to the
Articles of Incorporation of the Corporation shall not be initiated or
consummated, or submitted to the shareholders of the Corporation for their
consideration, unless a resolution of the Board shall first be adopted by the
affirmative vote of not less than seventy-five percent (75%) of the directors
then qualified and acting recommending such action and directing the
submission thereof to a vote at a meeting of shareholders, which may be
either an annual or special meeting.
3.9.4. Any meeting of the Board may be adjourned from time to time
by a majority vote of the directors present at such meeting.
3.9.5. In the absence of a quorum at such meeting, a majority of
the directors present thereat may adjourn the meeting from time to time,
without notice other than announcement at the meeting, until a quorum shall
be present at the meeting.
14
<PAGE>
SECTION 3.10.
PRESENCE AT MEETINGS
Directors may participate in and act at any meeting of the Board or
any committee thereof through the use of a conference telephone or other
communications equipment by means of which all persons participating in the
meeting can hear each other. Participation in such a meeting shall constitute
attendance and presence in person at the meeting of the person or persons so
participating for all purposes including fulfilling the requirements of
subsection 3.9.1. through 3.9.5.
SECTION 3.11.
ORGANIZATION AND PROCEDURE
3.11.1. At each meeting of the Board, the Chairman, or in his
absence the Chief Executive Officer if he is also a director, or in his
absence the President if he is also a director, or in the absence of all of
them a director chosen by the Board, shall act as chairman of the meeting.
3.11.2 The Secretary of the Corporation, or in his absence an
Assistant Secretary of the Corporation, or in the absence of all of the
foregoing, a person appointed by the chairman of the meeting, shall act as
secretary of the meeting.
3.11.3. The chairman of the meeting shall, without relinquishing
the chairmanship of the meeting, have full power of discussion and voting
power in respect to any matter before the meeting.
SECTION 3.12.
MINUTES OF MEETINGS
The Board shall cause to be kept minutes of its proceedings.
SECTION 3.13.
INFORMAL ACTION BY UNANIMOUS CONSENT
Unless otherwise restricted by statute, the provisions of the
Articles of Incorporation or these by-laws, any action required or permitted
to be taken at any meeting of the Board or a committee thereof, or
15
<PAGE>
any other action which may be taken at a meeting of the Board or a committee
thereof, may be taken without a meeting if a consent in writing, setting
forth the action so taken, shall be signed by all of the directors entitled
to vote with respect to the subject matter thereof, or by all the members of
the committee, as the case may be, which consent shall be filed with the
minutes of proceedings of the Board or committee.
SECTION 3.14.
COMPENSATION
3.14.1. Each director shall be entitled to receive such
compensation, fees and expenses, if any, for his services as a director as
may be fixed from time to time by resolution of the Board.
3.14.2. Each director shall also be entitled to receive such
compensation, fees and expenses for his services rendered to the Corporation
as an officer, member of committees, or in any capacity other than as a
director, as may be provided from time to time by resolution of the Board,
and he shall also be entitled to reimbursement for his expenses incurred in
the performance of any such services.
SECTION 3.15.
RELIANCE UPON RECORDS
Every director of the Corporation or member of any
committee of the Board shall, in the performance of his duties, be fully
protected in relying in good faith upon the records of the Corporation and
upon such information, opinions, reports or statements presented to the
Corporation by any of the Corporation's officers or employees, or committees
of the Board, or by any other person as to matters the director or member
reasonably believes are within such other person's professional or expert
competence and who has been selected with reasonable care by or on behalf of
the Corporation.
16
<PAGE>
ARTICLE IV
EXECUTIVE COMMITTEE
SECTION 4.1.
DESIGNATION, TERM AND VACANCIES
4.1.1. The Board, by resolution passed by a majority of the entire
Board, may designate two or more of its members, in which the Chief Executive
Officer and the President shall be included (to the extent that they are also
directors), as it may from time to time determine, to constitute an Executive
Committee, and it may designate one or more other directors to serve as
alternates for the members thereof in such order and manner as may be fixed
by the Board.
4.1.2. The term of office of each member of the Executive Committee
shall be for a period beginning with the date of his designation and shall
continue until his successor shall have been designated.
4.1.3. Any member of the Executive Committee may be removed from
the Executive Committee or his office may be declared vacant at any time by a
majority of the Board without assigning (and without there existing) any
reason or cause as the basis thereof.
4.1.4. The Chief Executive Officer, if he is also a director, or in
his absence the President, if he is also a director, or in the absence of
both of them, a member of the Executive Committee selected by those present,
shall preside at meetings of the Executive Committee, and the Secretary or
any Assistant Secretary of the Corporation, or in the absence of all of these
a member of the Executive Committee selected by those present, shall be the
secretary of such meetings.
4.1.5. The Board, by resolution passed by a majority of the entire
Board, may create such other committees as it deems necessary. Each committee
shall have two or more members, who shall serve at the pleasure of the Board.
17
<PAGE>
SECTION 4.2.
POWERS
4.2.1. During the intervals between meetings of the Board, the
Executive Committee shall have, to the fullest extent permitted by law, but
subject to any specific limitations imposed by the Articles of Incorporation,
these by-laws or a resolution of the Board, all of the powers vested in or
retained by the Board (whether or not the Executive Committee is specifically
mentioned in the statute, the provisions of the Articles of Incorporation or
these by-laws, the resolution or other instrument vesting or retaining any
such power) and such further specific powers as may from time to time be
conferred upon the Executive Committee by resolution of the Board. Any other
committee shall have such powers as are designated from time to time by
resolution of the Board, not to exceed these powers vested in the Executive
Committee.
4.2.2. A committee may exercise the powers vested in it in such
manner as it shall deem to be in the best interests of the Corporation in all
cases in which specific directions shall not have been given by the Board.
4.2.3. The Executive Committee shall not have the power or
authority of the Board to:
(a) Amend the Articles of Incorporation;
(b) Adopt a plan of merger or consolidation;
(c) Approve or recommend to shareholders any act that the
Illinois Business Corporation Act of 1983 (the "BCA"), as then amended,
requires to be approved by shareholders;
(d) Fill vacancies on the Board or on any of its committees;
(e) Adopt, amend or repeal these by-laws;
(f) Declare a dividend or authorize any other distributions;
(g) Authorize the issuance of stock;
(h) Elect or remove officers of the Corporation;
(i) Elect, remove or fix the compensation of members of any
committee;
(j) Amend, repeal or take action inconsistent with a
resolution or action of the Board which by its terms provides that it shall
not be amended or repealed by a committee;
18
<PAGE>
(k) Authorize or approve reacquisition of shares, except
according to a general formula or method prescribed by the Board; or
(l) Authorize or approve the issuance or sale, or contract for
sale, of shares or determine the designation and relative rights,
preferences, and limitations of a series of shares, except that the Board may
direct a committee to fix the specific terms of the issuance or sale or
contract for sale or the number of shares to be allocated to particular
employees under an employee benefit plan.
4.2.4. All action taken by a committee shall be subject to revision
or alteration by the Board at the meeting of the Board at which any such
action is reported to the Board; PROVIDED, HOWEVER, that such revision or
alteration shall not affect any action taken by any officer or employee of
the Corporation, or by any third party, or any rights of third parties that
have vested, in reliance upon any action or direction of a committee.
SECTION 4.3.
PROCEDURE, MEETINGS, VOTING AND RECORDS
4.3.1. A committee may prescribe for the conduct of its business
such rules and regulations, not inconsistent with these by-laws or with such
resolutions for the guidance and control of such committee as may from time
to time be passed by the Board, as it shall deem necessary or desirable,
including, without limitation, rules fixing the time and place of meetings
and the notice to be given thereof, if any.
4.3.2. A majority of the members of a committee exclusive of
alternate members shall constitute a quorum for the transaction of business.
4.3.3. The adoption of any resolution or the taking of any other
action shall require the affirmative vote of a majority of the committee
exclusive of alternate members as from time to time constituted.
4.3.4. A committee shall keep minutes of its proceedings, and it
shall report all action taken by it to the Board at the meeting thereof held
next after the taking of such action.
19
<PAGE>
ARTICLE V
OFFICERS
SECTION 5.1.
DESIGNATION
5.1.1. The principal officers of the Corporation shall be a Chief
Executive Officer, a President, one or more Vice Presidents, a Secretary, a
Treasurer, and a Chief Financial Officer; and there may be such other
officers as shall be appointed in accordance with the provisions of Section
5.5. of these by-laws.
5.1.2. Any two or more offices may be held by the same person.
SECTION 5.2.
ELECTION AND QUALIFICATIONS
The principal officers of the Corporation shall be elected by the
Board at any time.
SECTION 5.3.
TERM OF OFFICE
5.3.1. Each principal officer of the Corporation shall hold office
until the next annual meeting of the Board following his election and until
his successor shall have been elected and qualified, or until his death, or
until he shall resign, or until he shall have been removed.
5.3.2. Any officer may be removed at any time by the Board with or
without cause, whenever in its judgment the best interests of the Corporation
will be served thereby.
5.3.3. The removal of an officer without cause shall be without
prejudice to his contract rights, if any.
5.3.4. The election of an officer shall not of itself create
contract rights.
20
<PAGE>
SECTION 5.4.
VACANCIES
A vacancy in the office of a principal officer may, at the sole
discretion of the Board, be filled for the unexpired portion of the term in
the manner prescribed in these by-laws for regular election to such office.
Vice Presidencies which have been vacated may be left vacant at the
discretion of the Board.
SECTION 5.5.
APPOINTIVE OFFICERS
5.5.1. The Board or the Chief Executive Officer may appoint such
officers other than principal officers, including a Controller and one or
more Assistant Secretaries, Assistant Treasurers, Assistant Controllers and
officers having such other designations as the Board or the Chief Executive
Officer may deem necessary or advisable, PROVIDED, HOWEVER, that any such
appointment by the Chief Executive Officer shall be subject to confirmation
by the Board at its next meeting following such appointment.
5.5.2. The Chief Executive Officer or the President may appoint
division officers.
5.5.3. Each appointive officer shall hold his office or his
position, as the case may be, for such period, have such authority, and
perform such duties as may be provided in these by-laws or as the Board or
the officer authorized to appoint such appointive officer may from time to
time determine.
5.5.4. The Chief Executive Officer or the appropriate appointing
officer may prescribe additional duties to be performed by such officers and
the Chief Executive Officer or the appropriate appointing officer may at any
time suspend the duties, of whatever nature, of any such officer.
SECTION 5.6.
COMPENSATION
5.6.1. The compensation of the Chief Executive Officer and each
other principal officer shall be fixed and determined from time to time by
the Board or a committee thereof duly authorized to fix and determine such
compensation.
21
<PAGE>
5.6.2. The Chief Executive Officer shall fix and determine, or
delegate in any manner he shall select, the power to fix and determine the
compensation of all other officers, agents and employees of the corporation,
unless the Board or a committee thereof shall by resolution otherwise direct.
SECTION 5.7.
BONDS
5.7.1. The Treasurer and any Assistant Treasurer, and such other
officers and agents of the Corporation as the Board or the Chief Executive
Officer shall prescribe, may be required each to give bond to the Corporation
in such form and amount and with such surety as the Board or the Chief
Executive Officer may determine, conditioned upon the faithful performance of
the duties of his office, and upon the return to the Corporation in the case
of his death, resignation, retirement or removal, of all books, vouchers,
money or other papers or things in his possession or under his control
belonging to the Corporation.
5.7.2. The Corporation shall pay the premium cost of such bonds.
SECTION 5.8.
EMPLOYMENT CONTRACTS
Every employment for personal services to be rendered to the
Corporation shall be at the pleasure of the Corporation unless it is under a
contract in writing which has been duly executed on behalf of the Corporation
and has been approved by the Board or by the Chief Executive Officer.
SECTION 5.9.
CHIEF EXECUTIVE OFFICER
5.9.1. Subject to the direction of the Board, the Chief Executive
Officer, who may be, but is not required to be, the President of the
Corporation, shall have general charge of the business of the Corporation.
22
<PAGE>
5.9.2. The Chief Executive Officer shall have full power to vote in
the Corporation's name, in person or by proxy, all shares of stock of other
corporations owned by the Corporation.
5.9.3. The Chief Executive Officer may sign and execute all deeds,
mortgages, bonds, contracts, checks or other instruments or obligations in
the name of the Corporation.
5.9.4. The Chief Executive Officer may sign, with the Secretary of
the Corporation or an Assistant Secretary, or with the Treasurer or an
Assistant Treasurer, all certificates for shares of capital stock of the
Corporation.
5.9.5. The Chief Executive Officer may appoint, remove, suspend and
prescribe the duties and responsibilities of such agents and employees as he
may deem necessary or advisable in the operations of the Corporation.
5.9.6. The Chief Executive Officer shall have such other powers and
perform such other duties as may be vested in him by law, by other provisions
of these by-laws or by the Board.
SECTION 5.10.
PRESIDENT
5.10.1. Subject to the direction of the Board and the Chief
Executive Officer, the President shall be responsible for administering the
operating policies of the Corporation, as established from time to time by
the Board or the Chief Executive Officer.
5.10.2. In the absence of the Chief Executive Officer or in the
event of his inability to act, the President shall perform the
responsibilities, authorities and duties of the Chief Executive Officer.
5.10.3. The President shall have such other powers and perform such
other duties as may from time to time be assigned to him by the Board or by
the Chief Executive Officer.
SECTION 5.11.
VICE PRESIDENTS
5.11.1. Each Vice President shall have such power and rank and
perform such duties as the Board, the Chief Executive Officer or the
President may from time to time prescribe.
23
<PAGE>
5.11.2. At the written request of the Chief Executive Officer or
the President, any Vice President may, in the case of the absence or
inability to act of the President, temporarily act in his place.
5.11.3. In the case of the death of the President, or in the case
of his absence or inability to act without his first having designated a Vice
President to act temporarily in his place, one or more Vice Presidents may be
designated by the Chief Executive Officer to perform the duties, or any
particular duty, of the President.
5.11.4. Each Vice President may be given such additional
designations or titles as, in the judgment of the Board, are descriptive of
his duties or are otherwise appropriate to reflect his position or rank.
SECTION 5.12.
SECRETARY
5.12.1. The Secretary of the Corporation shall attend all meetings
of the shareholders and shall be and act as the secretary of such meetings
unless a different secretary of the meeting shall have been appointed
pursuant to these by-laws.
5.12.2. The Secretary shall attend all meetings of the Board and of
the Executive Committee and shall be and act as the secretary of such
meetings unless a different secretary of such meetings shall have been
appointed pursuant to these by-laws.
5.12.3. The Secretary shall give, or cause to be given, all notices
provided for in these by-laws or required by the Articles of Incorporation or
by law.
5.12.4. The Secretary shall be custodian of the records and of the
seal of the Corporation and see that the seal is affixed to all documents the
execution of which on behalf of the Corporation under its seal is duly
authorized in accordance with these by-laws.
5.12.5. The Secretary shall have charge of the stock certificate
books of the Corporation, and keep or cause to be kept the stock certificate
books, stock transfer books and stock ledgers in such manner as to show, at
all times, the amount of the capital stock issued and outstanding, the
classes thereof, if any, the names alphabetically arranged, the places of
residence of the holders of record thereof, the number of shares held by each
and the time when each became a holder of record.
24
<PAGE>
5.12.6. The Secretary shall have charge of all books, records and
papers of the Corporation relating to its organization as a Corporation and
its legal affairs, shall have the authority to certify the by-laws and
resolutions of the shareholders and the Board and committees thereof, and
other documents of the Corporation as true and correct copies thereof, and
shall see that all reports, statements and other documents required by law
are properly kept or filed, except to the extent that the same are to be kept
or filed by the Treasurer or Controller or by any appointive officer, agent
or employee.
5.12.7. The Secretary may sign with the Chief Executive Officer,
the President or any Vice President any or all certificates of stock of the
Corporation.
5.12.8. In general, the Secretary shall exercise all powers and
perform all duties incident to the office of Secretary and such other powers
and duties as may from time to time be assigned to him by the Board, the
Chief Executive Officer or the President or be prescribed by these by-laws.
SECTION 5.13.
ASSISTANT SECRETARIES
5.13.1. When one or more Assistant Secretaries have been appointed,
he or they shall assist at all times in the performance of the duties of the
Secretary, subject to his control and direction, and, in the absence of the
Secretary, or in the event of his inability or refusal to act, an Assistant
Secretary designated therefor by the Board, the Chief Executive Officer or
the President, or in the absence of such designation, any Assistant
Secretary, may exercise the powers and perform the duties of the Secretary.
5.13.2. Each Assistant Secretary shall exercise such powers and
perform such duties as may from time to time be assigned to him by the Board,
the Chief Executive Officer, the President or the Secretary, or be prescribed
by these by-laws.
SECTION 5.14.
TREASURER
5.14.1. The Treasurer shall have charge of and be responsible for
the collection, receipt, custody and disbursements of the corporate funds and
securities.
25
<PAGE>
5.14.2. The Treasurer shall be responsible for the deposit of all
moneys, and other valuable effects, in the name and to the credit of the
Corporation in such depositories as may be designated by the Board, the Chief
Financial Officer (or by an officer of the Corporation pursuant to any
delegation of such authority by the Board).
5.14.3. The Treasurer shall disburse the funds of the Corporation
as may be ordered by the Board or the Chief Financial Officer or as may be
authorized pursuant to authorizations of the Board or these by-laws, and he
shall require proper vouchers or other evidence supporting such disbursements.
5.14.4. The Treasurer shall be responsible for administering
policies of the Corporation with respect to the approving, granting or
extending of credit by the Corporation.
5.14.5. The Treasurer shall have the custody of such books,
receipted vouchers and other books and papers as in the practical business
operations of the Corporation shall naturally belong to the office or custody
of the Treasurer, or as shall be placed in his custody by the Board or by the
Chief Executive Officer, the President or the Chief Financial Officer.
5.14.6. The Treasurer shall render to the Board, or to the Chief
Executive Officer, the President or the Chief Financial Officer, whenever
they may require it, an account of all of his transactions as Treasurer.
5.14.7. The Treasurer may sign with the Chief Executive Officer or
the President or any Vice President any or all certificates of stock of the
Corporation.
5.14.8. In general, the Treasurer shall exercise all powers and
perform all duties incident to the office of Treasurer and such other powers
and duties as may from time to time be assigned to him by the Board, the
Chief Executive Officer, the President or the Chief Financial Officer or be
prescribed by these by-laws.
5.14.9. The duties of the Treasurer shall extend to all subsidiary
corporations and, so far as the Board, the Chief Executive Officer, the
President or the Chief Financial Officer may deem practicable, to all
affiliated corporations.
26
<PAGE>
SECTION 5.15.
ASSISTANT TREASURERS
5.15.1. When one or more Assistant Treasurers have been appointed,
he or they shall assist at all times in the performance of the duties of the
Treasurer, subject to his control and direction, and, in the absence of the
Treasurer or in the event of his inability or refusal to act, the Assistant
Treasurer designated therefor by the Board, the Chief Executive Officer or
the President, or in the absence of such designation, any Assistant
Treasurer, shall exercise the powers and perform the duties of the Treasurer.
5.15.2. Each Assistant Treasurer shall exercise such powers and
perform such duties as may from time to time be assigned to him by the Board,
the Chief Executive Officer, the President, the Chief Financial Officer or
the Treasurer, or be prescribed by these by-laws.
SECTION 5.16.
CHIEF FINANCIAL OFFICER
5.16.1. The Chief Financial Officer shall be responsible for the
Corporation's overall financial plans and policies.
5.16.2. The Chief Financial Officer shall supervise the Treasury
function in providing and directing procedures for the safeguarding of
Corporate assets, investing cash in excess of normal requirements and
obtaining debt or capital financing.
5.16.3. The Chief Financial Officer shall direct the Controllership
function in providing and directing procedures and systems necessary to
maintain proper records and to afford adequate accounting controls and
services.
5.16.4. The Chief Financial Officer shall, with the assistance of
the Controller, appraise the Corporation's financial position and issue
periodic financial and operating reports.
5.16.5. The Chief Financial Officer shall, with the assistance of
the Controller, direct and coordinate the establishment of corporate budget
programs.
5.16.6. The Chief Financial Officer shall assist the Vice
Presidents in coordinating expenditure programs with forecasted cash flow.
27
<PAGE>
5.16.7. The Chief Financial Officer shall establish operating
performance criteria (e.g. cost of capital).
5.16.8. The Chief Financial Officer may be responsible for
supervision of the corporate data processing and tax functions.
5.16.9. The Chief Financial Officer may be responsible for the
Corporation's insurance and audit programs.
5.16.10. The Chief Financial Officer shall be the Corporation's
contact with the financial community and financial press.
5.16.11. The Chief Financial Officer shall perform all the duties
ordinarily connected with the office of Chief Financial Officer and such
other duties or special projects as may be assigned him from to time by the
Board, the Chief Executive Officer, the President, or by these by-laws.
SECTION 5.17.
CONTROLLER
5.17.1. The Controller shall be the chief accounting officer of the
Corporation and shall have charge of the Corporation's books of accounts.
5.17.2. The Controller shall maintain full and accurate records of
all assets, liabilities, commitments and financial transactions of the
Corporation.
5.17.3. The Controller shall see that an adequate system of
internal control is maintained and that all reasonable measures are taken to
protect the Corporation's assets.
5.17.4. The Controller shall compile costs of production and
distribution.
5.17.5. The Controller shall prepare and interpret all statistical
records and reports of the Corporation.
5.17.6. The Controller shall render such financial statements and
other information as may be directed by the Chief Financial Officer.
28
<PAGE>
5.17.7. In general, the Controller shall perform all duties
ordinarily connected with the office of Controller and such other duties as
from time to time may be assigned to him by the Board, the Chief Executive
Officer, the President or the Chief Financial Officer or be prescribed by
these by-laws.
SECTION 5.18.
ASSISTANT CONTROLLERS
5.18.1. When one or more Assistant Controllers have been appointed,
he or they shall assist at all times in the performance of the duties of the
Controller, subject to his control and direction, and, in the absence of the
Controller, or in the event of his inability or refusal to act, the Assistant
Controller designated by the Board or the Chief Executive Officer, the
President or the Chief Financial Officer, or in the absence of such
designation, any Assistant Controller, shall exercise the powers and perform
the duties of the Controller.
5.18.2. Each Assistant Controller shall exercise such powers and
perform such duties as may from time to time be assigned to him by the Board,
the Chief Executive Officer, the President, the Chief Financial Officer or
the Controller, or be prescribed by these by-laws.
ARTICLE VI
INDEMNIFICATION
SECTION 6.1.
GENERAL
6.1.1. The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative
or investigative (other than an action by or in the right of the
Corporation), by reason of the fact that he is or was a director, officer,
employee or agent of the Corporation, or is or was serving at the request of
the Corporation as a director, officer, employee or agent of another
corporation or of a partnership, joint venture, trust or other enterprise, to
the fullest extent permitted under Article Eight of
29
<PAGE>
the Articles of Incorporation of the Corporation or the BCA, as the same
existed on the date of incorporation of the Corporation or may thereafter be
amended (but in the case of amendment, only to the extent that such amendment
permits the Corporation to provide broader indemnification rights than the
Articles of Incorporation or the BCA permitted the Corporation to provide
prior to such amendment) against all expenses (including attorneys' fees),
judgments, fines, and amounts paid or to be paid in settlement actually and
reasonably incurred or suffered by such person in connection with such
action, suit or proceeding, if such person acted in good faith and in a
manner he reasonably believed to be in or not opposed to the best interests
of the Corporation, and, with respect to any criminal action or proceeding,
had no reasonable cause to believe his conduct was unlawful. The termination
of any action, suit or proceeding by judgment, order, settlement, conviction,
or upon a plea of NOLO CONTENDERE or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the Corporation or, with respect to any criminal action or
proceeding, that the person had reasonable cause to believe that his conduct
was unlawful.
6.1.2. The Corporation shall indemnify any person who was or is a
party or is threatened to be made a party to any threatened, pending or
completed action or suit by or in the right of the Corporation to procure a
judgment in its favor by reason of the fact that such person is or was a
director, officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee or agent
of another corporation or of a partnership, joint venture, trust or other
enterprise, to the fullest extent permitted under Article Eight of the
Articles of Incorporation of the Corporation or the BCA, as the same existed
on the date of incorporation of the Corporation or may thereafter be amended
(but in the case of amendment, only to the extent that such amendment permits
the Corporation to provide broader indemnification rights than the Articles
of Incorporation or the BCA permitted the Corporation to provide prior to
such amendment) against all expenses (including attorneys' fees) actually and
reasonably incurred by such person in connection with the defense or
settlement of such action or suit, if such person acted in good faith and in
a manner he reasonably believed to be in or not
30
<PAGE>
opposed to the best interests of the Corporation, provided that no
indemnification shall be made with respect to any claim, issue or matter as
to which such person shall have been adjudged to have been liable to the
Corporation, unless, and only to the extent that, the court in which such
action or suit was brought shall determine upon application that, despite the
adjudication of liability, but in view of all the circumstances of the case,
such person is fairly and reasonably entitled to indemnity for such expenses
as the court shall deem proper.
6.1.3. To the extent that a director, officer, employee or agent of
the Corporation has been successful, on the merits or otherwise, in the
defense of any action, suit or proceeding referred to in subsection 6.1.1. or
subsection 6.1.2., or in defense of any claim, issue or matter therein, such
person shall be indemnified against expenses (including attorneys' fees)
actually and reasonably incurred by such person in connection therewith.
SECTION 6.2.
DETERMINATION OF INDEMNIFICATION
Any indemnification or advancement of expenses under this Article VI
(unless ordered by a court) shall be made by the Corporation only as
authorized as provided by Section 8.75(d) or Section 8.75(e) of the BCA, as
then amended, or any successor provisions, within 30 days of a request for
indemnification.
SECTION 6.3.
ADVANCEMENT OF EXPENSES
Expenses actually and reasonably incurred in defending a civil or
criminal action, suit or proceeding referred to in subsection 6.1.1. or
subsection 6.1.2. shall be paid by the Corporation in advance of the final
disposition of such action, suit or proceeding, upon receipt of an
undertaking by or on behalf of the director, officer, employee or agent to
repay such amount, if it shall ultimately be determined that he is not
entitled to be indemnified by the Corporation as authorized in this Article VI.
31
<PAGE>
SECTION 6.4.
NON-EXCLUSIVITY
The indemnification and advancement of expenses provided by or
granted under this Article VI shall not be deemed exclusive of any other
rights to which those seeking indemnification or advancement of expenses may
be entitled under the Articles of Incorporation or any agreement, vote of
shareholders or disinterested directors or otherwise, both as to action in
his official capacity and as to action in another capacity while holding such
office, and shall, unless otherwise provided when authorized or ratified,
continue as to a person who has ceased to be a director, officer, employee or
agent, and shall inure to the benefit of the heirs, executors and
administrators of that person.
SECTION 6.5.
CERTAIN DEFINITIONS
6.5.1. For purposes of this Article VI, references to the
"Corporation" shall include, in addition to the surviving corporation, any
constituent corporation (including any constituent of a constituent
corporation) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had the power and authority to indemnify
its directors, officers, and employees or agents, so that any person who is
or was or who has agreed to become a director, officer, employee or agent of
such constituent corporation, or is or was serving or has agreed to serve at
the request of such constituent corporation as a director, officer, employee
or agent of another corporation or of a partnership, joint venture, trust or
other enterprise, shall stand in the same position under the provisions of
this Article VI with respect to the resulting or surviving corporation as
such person would have with respect to such constituent corporation if its
separate existence had continued.
6.5.2. For purposes of this Article VI, any reference to "other
enterprises" shall include employee benefit plans; references to "fines"
shall include any excise taxes assessed on a person with respect to an
employee benefit plan; and references to "serving at the request of the
Corporation" shall include any service as a director, officer, employee or
agent of the Corporation which imposes duties on, or involves
32
<PAGE>
services by, such director, officer, employee or agent with respect to an
employee benefit plan, its participants or beneficiaries, including, without
limitation, serving as a trustee or other fiduciary of an employee benefit
plan. A person who acted in good faith and in a manner he reasonably
believed to be in the best interests of the participants and beneficiaries of
an employee benefit plan shall be deemed to have acted in a manner "not
opposed to the best interests of the Corporation" as referred to in this
Article VI.
SECTION 6.6.
INSURANCE
The Corporation may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the
Corporation, or who is or was serving at the request of the Corporation as a
director, officer, employee or agent of another corporation or of a
partnership, joint venture, trust or other enterprise, against any liability
asserted against such person and incurred by such person in any such
capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify such person against such
liability under Section 8.75 of the BCA or otherwise.
SECTION 6.7.
REPORTS
If the Corporation has paid indemnity or has advanced expenses to a
director, officer, employee or agent, the Corporation shall report the
indemnification or advance in writing to the shareholders with or before the
notice of the next shareholders meeting.
SECTION 6.8.
CONTRACT WITH THE CORPORATION
The provisions of this Article VI shall be deemed to be a contract
between the Corporation and each director, officer, employee or agent who
serves in any capacity referred to in Section 6.1 at any time while this
Article is in effect; and any repeal or modification of this Article VI or
any repeal or
33
<PAGE>
modification of the relevant provisions of the BCA or any other applicable
law shall not in any way diminish any rights to indemnification or
advancement of expenses with respect to any state of facts then or previously
existing or any action, suit or proceeding previously or thereafter brought
or threatened based in whole or in part upon any such state of facts.
ARTICLE VII
CHECKS, CONTRACTS, LOANS AND BANK ACCOUNTS
SECTION 7.1.
CHECKS, DRAFTS, ETC.
7.1.1. All checks, drafts, bills of exchange or other orders for
the payment of money, obligations, notes, or other evidences of indebtedness,
bills of lading, warehouse receipts and insurance certificates of the
Corporation shall be signed or endorsed as the Board may direct.
7.1.2. The Board may from time to time authorize facsimile
signatures of the officers of the Corporation to be utilized in lieu of
manual signatures.
SECTION 7.2.
CONTRACTS
The Board may authorize one or more officers, agents or employees of
the Corporation to enter into any contract or execute and deliver any
contract or other instrument in the name and on behalf of the Corporation,
and such authority may be general or confined to specific instances;
PROVIDED, HOWEVER, that this Section 7.2 shall not be a limitation on the
powers of office granted under Article V of these by-laws.
34
<PAGE>
SECTION 7.3.
LOANS
No loan shall be contracted on behalf of the Corporation and no
evidence of indebtedness shall be issued in the Corporation's name unless it
is authorized by a resolution of the Board. Such authority may be general or
confined to specific instances.
SECTION 7.4.
DEPOSITS
All funds of the Corporation shall be deposited from time to time to
the credit of the Corporation in such general or special bank account or
accounts in such banks, trust companies or other depositaries as the Board,
the Chief Executive Officer, the President, the Chief Financial Officer or
the Treasurer may from time to time designate; and the Board may make such
general or special rules and regulations with respect thereto, not
inconsistent with the provision of these by-laws, as it may deem expedient.
ARTICLE VIII
SHARES AND THEIR TRANSFER
SECTION 8.1.
CERTIFICATES OF STOCK
8.1.1. The interest of each shareholder of the Corporation shall be
evidenced by a certificate or certificates for shares of stock in such form
as, subject to the laws of the State of Illinois, the Board of Directors may
from time to time prescribe.
8.1.2. Certificates of stock shall be signed by the Chief Executive
Officer or President or a Vice President and by the Secretary or an Assistant
Secretary or the Treasurer or an Assistant Treasurer, which signatures may be
by facsimile on any certificate countersigned by a transfer agent or
registered by a registrar (other than the Corporation itself).
35
<PAGE>
8.1.3. In case any officer who has signed or whose facsimile
signature has been placed upon a certificate shall have ceased to be an
officer before such certificate is issued, the Certificates may be issued by
the Corporation with the same effect as if he were an officer at the date of
issuance.
SECTION 8.2.
TRANSFER OF STOCK
8.2.1. Transfers of shares of stock of the Corporation shall be
made on payment of all taxes thereon and presentment to the Corporation or
its transfer agent for cancellation of the certificate or certificates for
such shares (except as hereinafter provided in the case of loss, destruction,
theft or mutilation of certificates) properly endorsed by the registered
holder thereof or accompanied by proper evidence of succession, assignment or
authority to transfer, together with such reasonable assurance as the
Corporation or its transfer agent may require that the said endorsement is
genuine and effective.
8.2.2. A person in whose name shares of stock are registered on the
books of the Corporation shall be deemed the owner thereof by the
Corporation, and, upon any transfer of shares, the person or persons into
whose name or names such shares shall be transferred shall be substituted for
the person or persons out of whose name or names such shares shall have been
transferred, with respect to all rights, privileges and obligations of
holders of stock of the Corporation as against the Corporation or any other
person or persons.
SECTION 8.3.
LOST, DESTROYED, STOLEN AND MUTILATED CERTIFICATES
8.3.1 The holder of any stock of the Corporation shall
immediately notify the Corporation of any loss, destruction, theft or
mutilation of the certificate for any such stock, and the Board may, in its
discretion, cause to be issued to him a new certificate or certificates of
stock upon the surrender of the mutilated certificate, or in case of loss,
destruction or theft, upon satisfactory proof of such loss, destruction or
theft; and, the Board may, in its discretion, require the owner of the lost,
destroyed or stolen certificate, or his legal representative, to give the
Corporation a bond in such sum and in such form
36
<PAGE>
and with such surety or sureties as it may direct, to indemnify the
Corporation against any claim that may be made against it with respect to the
certificate or certificates alleged to have been lost, destroyed or stolen.
8.3.2. The powers hereinabove vested in the Board may be delegated by
it to any officer or officers of the Corporation.
SECTION 8.4.
TRANSFER AGENT AND REGISTRAR AND REGULATIONS
8.4.1. The Corporation shall, if and whenever the Board shall so
determine, maintain one or more transfer offices or agencies, each in the
charge of a transfer agent designated by the Board, where the shares of the
stock of the Corporation shall be directly transferable, and also one or more
registry offices, each in the charge of a registrar designated by the Board,
where such shares of stock shall be registered, and no certificate for shares
of stock of the Corporation in respect of which a transfer agent and
registrar shall have been designated shall be valid unless countersigned by
such transfer agent and registered by such registrar. The Board may appoint
the same person to be the transfer agent and the registrar.
8.4.2. The Board may also make such additional rules and
regulations as it may deem expedient concerning the issue, transfer and
registration of certificates for shares of the stock of the Corporation.
8.4.3. The Corporation may itself, at the discretion of the Board,
act as transfer agent in such a manner as the Board shall direct.
SECTION 8.5.
RECORD DATE
8.5.1. For the purpose of determining the shareholders entitled to
notice of or to vote at any meeting of shareholders or any adjournment
thereof, or to express consent to corporate action in writing without a
meeting, or to receive payment of any dividend or other distribution or
allotment or any rights, or to exercise any rights in respect of any change,
conversion or exchange of shares, or for the purpose of determining
shareholders for any other lawful reason, the Board may fix in advance a
record date which
37
<PAGE>
shall not be more than sixty (60) days and, for a meeting of shareholders,
not less than ten (10) days, or in the case of a merger, consolidation, share
exchange, dissolution or sale, lease or exchange of assets, not less than
twenty (20) days, before the date of such meeting.
8.5.2 If no record date is fixed, the record date for the
determination of shareholders entitled to notice of or to vote at a meeting
of shareholders shall be the date on which notice of the meeting is mailed,
and the record date for the determination of shareholders for any other
purpose shall be the date on which the Board adopts the resolution relating
thereto. A determination of shareholders of record entitled to notice of or
to vote at any meeting of shareholders shall apply to any adjournment of the
meeting.
ARTICLE IX
MISCELLANEOUS PROVISIONS
SECTION 9.1.
SEAL
The corporate seal shall have inscribed thereon the name of the
Corporation and such other appropriate legend as the Board may from time to
time determine. In lieu of the corporate seal, when so authorized by the
Board or a duly empowered committee thereof and permitted by law, a facsimile
thereof may be impressed or affixed or reproduced.
SECTION 9.2.
FISCAL YEAR
The fiscal year of the Corporation shall end on December 31 of each
calendar year.
38
<PAGE>
SECTION 9.3.
NOTICES
9.3.1. Any notice required by these by-laws, or otherwise, to be
given shall be deemed to have been given in person if delivered in person to
the person to whom such notice is addressed, and shall be deemed to have been
given by mail to any persons entitled thereto at the time if shall have been
deposited in the United States mail, enclosed in a postage prepaid envelope,
and shall be deemed to have been given by wire or wireless communication
media when the same shall have been delivered for prepaid transmission into
the custody of a company ordinarily engaged in the transmission of such
messages; such postage prepaid envelope or such wire or wireless
communication message being addressed to such person at his address as it
appears on the books and records of the Corporation, or if no address appears
on such books and records of the Corporation, then at such address as shall
be otherwise known to the Secretary, or if no such address appears on such
books and records or is otherwise known to the Secretary, then in care of the
registered agent of the Corporation in the State of Illinois.
9.3.2. Whenever, by any provisions of the Articles of Incorporation
or these by-laws, or otherwise. any notice is required to be given any
specified number of days before any meeting or event, the day on which such
notice was given shall be counted, but the day of such meeting or other event
shall not be counted, in determining whether or not notice has been given in
proper time in a particular case.
SECTION 9.4.
WAIVER OF NOTICE
9.4.1. Whenever any notice is required to be given under the
provisions of the laws of the State of Illinois, the Articles of
Incorporation or these by-laws, a waiver thereof in writing, signed by the
person entitled to such notice, or his proxy in the case of a shareholder
whether before or after the time stated therein, shall be deemed equivalent
thereto.
9.4.2. Except as may be otherwise specifically provided by law, any
waiver by mail, wire or wireless communication media, bearing the name of the
person entitled to notice shall be deemed a waiver in writing duly signed.
39
<PAGE>
9.4.3. The presence of any shareholder at any meeting, either in
person or by proxy, without protesting in writing prior to the conclusion of
the meeting the lack of notice of such meeting, shall constitute a waiver of
notice by him.
9.4.4. Attendance by a director at any meeting of the Board shall
constitute a waiver of notice by him of such meeting except where a director
attends the meeting for the express purpose of objecting to the transaction
of any business because the meeting was not lawfully convened or held.
SECTION 9.5.
RESIGNATIONS
9.5.1. Any officer or director may resign at any time by giving
written notice to the Chairman, the Chief Executive Officer, the President or
the Secretary. Such resignation shall take effect at the time specified in
the notice.
9.5.2. Unless otherwise specified in any notice of resignation, the
acceptance of such resignation shall not be necessary to make it effective.
9.5.3. No resignation of an officer or director shall serve to
release the person submitting it from any liability or duty to the
Corporation, whether created by law, the Articles of Incorporation, these
by-laws, a resolution or directive of the Board or under any contract between
such person and the Corporation, unless the Board shall expressly and
specifically release such person from any such liability or duty.
SECTION 9.6.
DESTRUCTION OF RECORDS
In the event of destruction of the original records of the
Corporation as a result of any disaster, the most authentic available
duplicate form of the records shall be the official records in lieu of the
records destroyed, and the officers of the Corporation are authorized to
reconstruct the destroyed records from such duplicates.
40
<PAGE>
SECTION 9.7.
SIMULTANEOUS DEATH OR INCAPACITATION OF DIRECTORS
In the event of the simultaneous death or inability to act of a
majority of the directors of the Corporation, the Board shall temporarily
consist of the surviving directors of the Corporation. Such Board shall
immediately elect temporary directors of the Corporation to fill vacancies,
reconstruct any records which may have been destroyed and call a meeting of
shareholders to elect a Board.
ARTICLE X
INTERPRETATION, SEVERABILITY AND AMENDMENTS
SECTION 10.1.
INTERPRETATION
Titles and headings to Articles and Sections herein are inserted for
convenience of reference only and are not intended to be a part of or to
affect the meaning or interpretation of these by-laws. Whenever from the
context it appears appropriate, each term stated in either the singular or
the plural shall include the singular and the plural, and pronouns stated in
the masculine gender shall include the masculine, the feminine and the neuter
genders.
SECTION 10.2.
SEVERABILITY
If any provision of these by-laws, or its application to any person
or circumstance is held invalid the remainder of these by-laws and the
application of such provision to other persons or circumstances shall not be
affected thereby.
41
<PAGE>
SECTION 10.3.
AMENDMENTS
These by-laws may be altered, amended or repealed by the affirmative
vote of not less than seventy-five percent (75%) of the Directors then
qualified or by the shareholders of the Corporation entitled to vote thereon.
The by-laws may contain any provisions for the regulation and management of
the affairs of the Corporation not inconsistent with law or the Articles of
Incorporation.
42
<PAGE>
EXHIBIT 10.1
SEVERANCE AGREEMENT
THIS AGREEMENT is entered into as of the 16th day of
September, 1994 by and between Joslyn Corporation, an Illinois
corporation, and Lawrence G. Wolski (the "Executive").
W I T N E S S E T H
WHEREAS, the Executive currently serves as a key
employee of the Company (as defined in Section 1) and his
services and knowledge are valuable to the Company in connection
with the management of one or more of the Company's principal
operating facilities, divisions, departments or subsidiaries; and
WHEREAS, the Board (as defined in Section 1) has
determined that it is in the best interests of the Company and
its shareholders to secure the Executive's continued services and
to ensure the Executive's continued dedication and objectivity in
the event of any threat or occurrence of, or negotiation or other
action that could lead to, or create the possibility of, a Change
in Control (as defined in Section 1) of the Company, without
concern as to whether the Executive might be hindered or
distracted by personal uncertainties and risks created by any
such possible Change in Control, and to encourage the Executive's
full attention and dedication to the Company, the Board has
authorized the Company to enter into this Agreement.
NOW, THEREFORE, for and in consideration of the
premises and the mutual covenants and agreements herein
contained, the Company and the Executive hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the
following terms shall have the respective meanings set forth
below:
(a) "Board" means the Board of Directors of the
Company.
(b) "Bonus Plan" means the Executive Management
Incentive Plan of Joslyn Corporation, or any plan of an
affiliated company of the Company intended to provide similar
benefits, or any of their successor plans.
(c) "Cause" means (1) a material breach by the
Executive of those duties and responsibilities of the Executive
which do not differ in any material respect from the duties and
responsibilities of the Executive during the 90-day period
immediately prior to a Change in Control (other than as a result
<PAGE>
of incapacity due to physical or mental illness) which is
demonstrably willful and deliberate on the Executive's part,
which is committed in bad faith or without reasonable belief that
such breach is in the best interests of the Company and which is
not remedied in a reasonable period of time after receipt of
written notice from the Company specifying such breach or (2) the
commission by the Executive of a felony involving moral
turpitude.
(d) "Change in Control" means:
(1) the acquisition by any individual, entity or group
(a "Person"), including any "person" within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act (hereinafter
defined), of beneficial ownership within the meaning of Rule 13d-
3 promulgated under the Exchange Act, of 25% or more of either
(i) the then outstanding common shares of the Company (the
"Outstanding Company Common Shares") or (ii) the combined voting
power of the then outstanding securities of the Company entitled
to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); PROVIDED, HOWEVER, that the
following acquisitions shall not constitute a Change in Control:
(A) any acquisition directly from the Company (excluding any
acquisition resulting from the exercise of a conversion or
exchange privilege in respect of outstanding convertible or
exchangeable securities), (B) any acquisition by the Company, (C)
any acquisition by an employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company, or (D) any acquisition by any
corporation pursuant to a reorganization, merger or consolidation
involving the Company, if, immediately after such reorganization,
merger or consolidation, each of the conditions described in
clauses (i), (ii) and (iii) of subsection (3) of this Section 1
(d) shall be satisfied; and PROVIDED FURTHER that, for purposes
of clause (B), if any Person (other than the Company or any
employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company)
shall become the beneficial owner of 25% or more of the
Outstanding Company Common Shares or 25% or more of the
Outstanding Company Voting Securities by reason of an acquisition
by the Company and such Person shall, after such acquisition by
the Company, become the beneficial owner of any additional shares
of the Outstanding Company Common Shares or any additional
Outstanding Voting Securities and such beneficial ownership is
publicly announced, such additional beneficial ownership shall
constitute a Change in Control;
(2) individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of such Board; PROVIDED,
HOWEVER, that any individual who becomes a director of the
Company subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was
-2-
<PAGE>
approved by the vote of at least a majority of the directors then
comprising the Incumbent Board shall be deemed to have been a
member of the Incumbent Board; and PROVIDED FURTHER, that no
individual who was initially elected as a director of the Company
as a result of an actual or threatened election contest, as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act, or any other actual or threatened solicitation
of proxies or consents by or on behalf of any Person other than
the Board shall be deemed to have been a member of the Incumbent
Board;
(3) approval by the shareholders of the Company of a
reorganization, merger or consolidation unless, in any such case,
immediately after such reorganization, merger or consolidation,
(i) more than 60% of the then outstanding shares of common stock
of the corporation resulting from such reorganization, merger or
consolidation and more than 60% of the combined voting power of
the then outstanding securities of such corporation entitled to
vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals or entities who were the beneficial owners,
respectively, of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation and in substantially the
same proportions relative to each other as their ownership,
immediately prior to such reorganization, merger or
consolidation, of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities, as the case may be, (ii)
no Person (other than the Company, any employee benefit plan (or
related trust) sponsored or maintained by the Company or the
corporation resulting from such reorganization, merger or
consolidation (or any corporation controlled by the Company) and
any Person which beneficially owned, immediately prior to such
reorganization, merger or consolidation, directly or indirectly,
25% or more of the Outstanding Company Common Shares or the
Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 25% or more of the
then outstanding shares of common stock of such corporation or
25% or more of the combined voting power of the then outstanding
securities of such corporation entitled to vote generally in the
election of directors and (iii) at least a majority of the
members of the board of directors of the corporation resulting
from such reorganization, merger or consolidation were members of
the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such
reorganization, merger or consolidation; or
(4) approval by the shareholders of the Company of (i)
a plan of complete liquidation or dissolution of the Company or
(ii) the sale or other disposition of all or substantially all of
the assets of the Company other than to a corporation with
respect to which, immediately after such sale or other
-3-
<PAGE>
disposition, (A) more than 60% of the then outstanding shares of
common stock thereof and more than 60% of the combined voting
power of the then outstanding securities thereof entitled to vote
generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities immediately prior to such
sale or other disposition and in substantially the same
proportions relative to each other as their ownership,
immediately prior to such sale or other disposition, of the
Outstanding Company Common Shares and the Outstanding Company
Voting Securities, as the case may be, (B) no Person (other than
the Company, any employee benefit plan (or related trust)
sponsored or maintained by the Company or such corporation (or
any corporation controlled by the Company) and any Person which
beneficially owned, immediately prior to such sale or other
disposition, directly or indirectly, 25% or more of the
Outstanding Company Common Shares or the Outstanding Company
Voting Securities, as the case may be) beneficially owns,
directly or indirectly, 25% or more of the then outstanding
shares of common stock thereof or 25% or more of the combined
voting power of the then outstanding securities thereof entitled
to vote generally in the election of directors and (C) at least a
majority of the members of the board of directors thereof were
members of the Incumbent Board at the time of the execution of
the initial agreement or action of the Board providing for such
sale or other disposition.
(e) "Code" means the Internal Revenue Code of 1986, as
amended.
(f) "Company" means Joslyn Corporation, an Illinois
corporation.
(g) "Date of Termination" means (1) the effective date
on which the Executive's employment by the Company terminates as
specified in a prior written notice by the Company or the
Executive, as the case may be, to the other, delivered pursuant
to Section 11 or (2) if the Executive's employment by the Company
terminates by reason of death, the date of death of the
Executive.
(h) "Exchange Act" means the Securities Exchange Act
of 1934, as amended.
(i) "Good Reason" means, without the Executive's
express written consent, the occurrence of any of the following
events after a Change in Control:
-4-
<PAGE>
(1) any of (i) the assignment to the Executive of any
duties inconsistent in any material respect with the Executive's
position(s), duties, responsibilities or status with the Company
immediately prior to such Change in Control, (ii) a change in the
Executive's reporting responsibilities, titles or offices with
the Company as in effect immediately prior to such Change in
Control or (iii) any removal or involuntary termination of the
Executive from the Company otherwise than as expressly permitted
by this Agreement or any failure to re-elect the Executive to any
position with the Company held by the Executive immediately prior
to such Change in Control;
(2) a reduction by the Company in the Executive's rate
of annual base salary as in effect immediately prior to such
Change in Control or as the same may be increased from time to
time thereafter or the failure by the Company to increase such
rate of base salary each year after such Change in Control by an
amount which at least equals the annual percentage increase, if
any, in the Consumer Price Index for All Items For All Urban
Consumers respecting the metropolitan area closest to the
Executive's place of residence as reported by the United States
Department of Labor, Bureau of Labor Statistics;
(3) any requirement of the Company that the Executive
have a regular work site located more than 50 miles from the
regular work site of the Executive at the time of the Change in
Control;
(4) the failure of the Company to (i) continue in
effect any employee benefit plan or compensation plan in which
the Executive is participating immediately prior to such Change
in Control, unless the Executive is permitted to participate in
other plans providing the Executive with substantially comparable
benefits, or the taking of any action by the Company which would
adversely affect the Executive's participation in or materially
reduce the Executive's benefits under any such plan, (ii) provide
the Executive and the Executive's dependents welfare benefits
(including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life,
accidental death and travel accident insurance plans and
programs) in accordance with the most favorable plans, practices,
programs and policies of the Company and its affiliated companies
in effect for the Executive immediately prior to such Change in
Control or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies, (iii)
provide fringe benefits in accordance with the most favorable
plans, practices, programs and policies of the Company and its
-5-
<PAGE>
affiliated companies in effect for the Executive immediately
prior to such Change in Control or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its
affiliated companies, (iv) provide the Executive with paid
vacation in accordance with the most favorable plans, policies,
programs and practices of the Company and its affiliated
companies as in effect for the Executive immediately prior to
such Change in Control or, if more favorable to the Executive, as
in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies, or
(v) reimburse the Executive promptly for all reasonable
employment expenses incurred by the Executive in accordance with
the most favorable policies, practices and procedures of the
Company and its affiliated companies in effect for the Executive
immediately prior to such Change in Control, or if more favorable
to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and its
affiliated companies; or
(5) the failure of the Company to obtain the
assumption agreement from any successor as contemplated in
Section 10(b).
For purposes of this Agreement, any good faith
determination of Good Reason made by the Executive shall be
conclusive; PROVIDED, HOWEVER, that an isolated, insubstantial
and inadvertent action taken in good faith and which is remedied
by the Company promptly after receipt of notice thereof given by
the Executive shall not constitute Good Reason.
(j) "Nonqualifying Termination" means a termination of
the Executive's employment (1) by the Company for Cause, (2) by
the Executive for any reason other than a Good Reason, (3) as a
result of the Executive's death or (4) by the Company due to the
Executive's absence from his duties with the Company on a full-
time basis for at least 180 consecutive days as a result of the
Executive's incapacity due to physical or mental illness;
PROVIDED, HOWEVER, that a termination of the Executive's
employment by the Executive for any reason whatsoever during the
"Window Period" (hereinafter defined) shall not constitute a
Nonqualifying Termination.
(k) "Parity Plan" means the Parity Compensation Plan
of Joslyn Corporation, or any plan of an affiliated company of
the Company intended to provide similar benefits, or any of their
successor plans.
(l) "Profit Sharing Plan" means the Employees' Savings
and Profit Sharing Plan of Joslyn Corporation, or any plan of an
affiliated company of the Company intended to provide similar
benefits, or any of their successor plans.
-6-
<PAGE>
(m) "Termination Period" means the period of time
beginning with a Change in Control and ending on the earliest to
occur of (1) the Executive's 70th birthday, (2) the Executive's
death, and (3) two years following such Change in Control.
(n) "Termination Year Bonus" shall have the meaning
set forth in Section 3(a)(1).
(o) "Termination Year Parity Amount" shall have the
meaning set forth in Section 3(a)(1).
(p) "Termination Year Profit Sharing Amount" shall
have the meaning set forth in Section 3(a)(1).
(q) "Window Period" means the 30-day period commencing
one year after the date of a Change in Control.
2. OBLIGATIONS OF THE EXECUTIVE. The Executive
agrees that in the event any person or group attempts a Change in
Control, he shall not voluntarily leave the employ of the Company
without Good Reason (a) until such attempted Change in Control
terminates or (b) if a Change in Control shall occur, until 90
days following such Change in Control. For purposes of the
foregoing subsection (a), Good Reason shall be determined as if a
Change in Control had occurred when such attempted Change in
Control became known to the Board.
3. PAYMENTS UPON TERMINATION OF EMPLOYMENT.
(a) If during the Termination Period the employment of
the Executive shall terminate, other than by reason of a
Nonqualifying Termination, then the Company shall pay to the
Executive (or the Executive's beneficiary or estate), as
compensation for services rendered to the Company:
(1) within 30 days following the Date of Termination,
a lump-sum cash amount equal to the sum of:
(i) the Executive's full annual base salary from the
Company and its affiliated companies through the Date of
Termination, to the extent not theretofore paid,
(ii) the Executive's Award Payment at 100% of Plan
Accomplishment level under the Bonus Plan (one-half maximum
potential award), for the full fiscal year in which the Date of
Termination occurs, calculated in accordance with the terms of
the Bonus Plan as in effect immediately prior to the Change in
Control or as in effect on the Date of Termination, whichever
results in a greater amount, as if a Change in Control had not
occurred, the Executive were employed by the Company at the end
of the such fiscal year and all other conditions necessary for
the payment by the Company of such bonus were satisfied (the
-7-
<PAGE>
"Termination Year Bonus"), multiplied by a fraction, the
numerator of which is the number of days in the fiscal year in
which the Date of Termination occurs through the Date of
Termination and the denominator of which is 365 or 366, as
applicable, reduced by the amount otherwise payable pursuant to
the terms of the Bonus Plan for such plan year;
(iii) the Executive's Parity Compensation payment as
determined under the Parity Plan, for the full fiscal year in
which the Date of Termination occurs, calculated in accordance
with the terms of the Parity Plan as in effect immediately prior
to the Change in Control or as in effect on the Date of
Termination, whichever results in a greater amount, as if a
Change in Control had not occurred, the Executive were employed
by the Company at the end of such fiscal year, the Executive had
received the Termination Year Bonus and all other conditions
necessary for the payment by the Company of such Parity
Compensation payment were satisfied (the "Termination Year Parity
Amount"), multiplied by a fraction, the numerator of which is the
number of days in the fiscal year in which the Date of
Termination occurs through the Date of Termination and the
denominator of which is 365 or 366, as applicable, reduced by the
amount otherwise payable pursuant to the terms of the Parity Plan
for such plan year;
(iv) the maximum Profit Sharing Contribution for the
Executive under the Profit Sharing Plan, for the full fiscal year
in which the Date of Termination occurs, calculated in accordance
with the terms of the Profit Sharing Plan as in effect
immediately prior to the Change in Control or as in effect on the
Date of Termination, whichever results in a greater amount, as if
a Change in Control had not occurred, the Executive were employed
by the Company at the end of such fiscal year, the Executive had
received the Termination Year Bonus and all other conditions
necessary for the payment by the Company of such Profit Sharing
Contribution were satisfied (the "Termination Year Profit Sharing
Amount"), multiplied by a fraction, the numerator of which is the
number of days in the fiscal year in which the Date of
Termination occurs through the Date of Termination and the
denominator of which is 365 or 366, as applicable, reduced by the
amount otherwise allocated to the Executive's account under the
Profit Sharing Plan pursuant to the terms of the Profit Sharing
Plan for such plan year as determined at the Date of Termination;
and
(v) any compensation previously deferred by the
Executive (together with any interest and earnings thereon) and
any accrued vacation pay, in each case to the extent not
theretofore paid; plus
-8-
<PAGE>
(2) within 30 days following the Date of Termination,
unless such payment date is extended pursuant to Section 4, in
which case such payment date may not be extended beyond 90 days
following the Date of Termination, a lump-sum cash amount in an
amount equal to the sum of (i) two and one-half (2.5) times the
Executive's highest annual base salary from the Company and its
affiliated companies in effect during the 12-month period prior
to the Date of Termination, (ii) two and one-half (2.5) times the
Executive's full Termination Year Bonus, (iii) two and one-half
(2.5) times the Executive's full Termination Year Parity Amount,
and (iv) two and one-half (2.5) times the Executive's full
Termination Year Profit Sharing Amount; PROVIDED, HOWEVER, that
any amount paid pursuant to this Section 3(a)(2) may be reduced
in accordance with the provisions of Section 4; PROVIDED FURTHER,
that in the event there are fewer than 30 whole months remaining
from the Date of Termination to the date of the Executive's 70th
birthday, the amount calculated in accordance with this Section
3(a)(2) shall be reduced by multiplying such amount by a fraction
the numerator of which is the number of months, including a
partial month (with a partial month being expressed as a fraction
the numerator of which is the number of days remaining in such
month and the denominator of which is the number of days in such
month), so remaining and the denominator of which is 30; and
PROVIDED FURTHER, that, except as otherwise provided in this
Agreement, any amount paid pursuant to this Section 3(a)(2) shall
be paid in lieu of any other amount of severance relating to
salary or bonus continuation to be received by the Executive upon
termination of employment of the Executive under any severance
plan, employment agreement, policy or arrangement of the Company
applicable to the Executive, other than amounts to be received by
the Executive upon termination of employment of the Executive
under the Bonus Plan, the Parity Plan or the Profit Sharing Plan.
(b) (1) In addition to the payments to be made
pursuant to paragraph (a) of this Section 3, if on the Date of
Termination the Executive shall not be fully vested in any
employer contributions or earnings thereon made on his behalf
under the Profit Sharing Plan, the Company shall pay to the
Executive within 30 days following the Date of Termination a lump
sum cash amount equal to the value of the unvested portion of
such employer contributions and earnings; PROVIDED, HOWEVER, that
if any payment pursuant to this Section 3(b)(1) may or would
result in such payment being deemed a transaction which is
subject to Section 16(b) of the Exchange Act, the Company shall
make such payment so as to meet the conditions for an exemption
from such Section 16(b) as set forth in the rules (and
interpretive and no-action letters relating thereto) under
Section 16. The value of any such unvested employer
contributions and earnings shall be determined in accordance with
the terms of the Profit Sharing Plan.
-9-
<PAGE>
(2) For a period of two and one-half (2.5) years
commencing on the Date of Termination, the Company shall continue
to keep in full force and effect all medical, dental, accident
and life insurance plans with respect to the Executive and his
dependents with the same level of coverage, upon the same terms
and otherwise to the same extent as such plans shall have been in
effect immediately prior to the Date of Termination.
Notwithstanding the foregoing sentence, if any of the medical,
dental, accident or life insurance plans then in effect generally
with respect to other peer executives of the Company and its
affiliated companies would be more favorable to the Executive,
such plan coverage shall be substituted for the analogous plan
coverage provided to the Executive immediately prior to the Date
of Termination, and the Company and the Executive shall share the
costs of such plan coverage in the same proportion as such costs
were shared immediately prior to the Date of Termination. The
obligation of the Company to continue coverage of the Executive
and the Executive's dependents under such plans shall cease at
such time as the Executive and the Executive's dependents obtain
comparable coverage under another plan, including a plan
maintained by a new employer. Execution of this Agreement by the
Executive shall not be considered a waiver of any rights or
entitlements the Executive and the Executive's dependents may
have under applicable law to continuation of coverage under the
group medical plan maintained by the Company or its affiliated
companies.
(3) If the Executive shall be at least 50 years of age
and the sum of the Executive's age and years of service with the
Company is at least 75 at (i) the termination of medical coverage
provided by Section 3(b)(2) hereof, (ii) the termination of the
severance continuation under the Company's Group Medical coverage
or (iii) the end of any COBRA continuation of Group Medical
coverage, the Company shall provide the Executive with the
ability to elect Group Medical coverage for the Executive and the
Executive's dependents; PROVIDED, that the maximum continuation
period of such coverage shall be until age 65 for the Executive
and any covered spouse, and in accordance with the provisions of
the Company's Group Medical Plan for covered children. The
extended continuation of Group Medical coverage described in the
previous sentence shall be subject to the provisions of the
Company's Group Medical Plan and a required contribution fee
equal to the rate for Early Retiree's under the Company's Retiree
Medical Plan for Plan "A" coverage, or for Plan "B" coverage, the
Early Retiree Rate less the difference between the Plan "A" and
Plan "B" contribution rates for active employees.
(4) The Company shall reimburse the Executive for 90%
of the Executive's expenditures for obtaining outplacement
services, provided that the Company shall have no obligation to
reimburse the Executive in an amount which exceeds 10% of the
Executive's highest annual base salary from the Company and its
-10-
<PAGE>
affiliated companies in effect during the 12-month period prior
to the Date of Termination.
(c) If during the Termination Period the employment of
the Executive shall terminate by reason of a Nonqualifying
Termination, then the Company shall pay to the Executive within
30 days following the Date of Termination, a lump-sum cash amount
equal to the sum of (1) the Executive's full annual base salary
from the Company through the Date of Termination, to the extent
not theretofore paid and (2) any compensation previously deferred
by the Executive (together with any interest and earnings
thereon) and any accrued vacation pay, in each case to the extent
not theretofore paid.
4. EXCESS PARACHUTE PAYMENTS. (a) Anything in this
Agreement to the contrary notwithstanding, in the event it shall
be determined that any payment or distribution by the Company or
its affiliated companies to or for the benefit of the Executive,
whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise (in the aggregate,
"Total Payments"), would constitute an "excess parachute
payment," then Total Payments shall be reduced to be One Dollar
($1) less than the maximum amount which may be paid or
distributed to or for the benefit of the Executive without
causing the Executive to be subject to the tax imposed by Section
4999 of the Code (or any successor provision) in respect of Total
Payments or which the Company or its affiliated companies may pay
without loss of deduction under Section 280G(a) of the Code (or
any successor provision) (Total Payments, as so reduced, the
"Adjusted Total Payments"). For purposes of this Agreement, the
terms "excess parachute payment" and "parachute payments" shall
have the meanings assigned to them in Section 280G of the Code
(or any successor provision), and such "parachute payments" shall
be valued as provided therein. Present value for purposes of
this Agreement shall be calculated in accordance with Section
1274(b)(2) of the Code (or any successor provision).
(b) Within 60 days following the Date of Termination
or notice by the Company to the Executive of its reasonable
belief that there is a payment or distribution due to or for the
benefit of the Executive which would result in an excess
parachute payment, the Executive and the Company, at the
Company's expense, shall obtain the opinion (which need not be
unqualified) of nationally recognized tax counsel selected by the
Company's independent auditors and acceptable to the Executive in
his sole discretion (which may be regular outside counsel to the
Company), which opinion sets forth (A) the amount of the
Executive's Base Period Income, (B) the amount and present value
of Total Payments and (C) the amount and present value of any
excess parachute payments determined without regard to the
limitations of this Section 4. As used in this Section 4(b), the
term "Base Period Income" means the Executive's "annualized
-11-
<PAGE>
includible compensation for the base period" as defined in
Section 280G(d)(1) of the Code (or any successor provision). For
purposes of such opinion, the value of any noncash benefits or
any deferred payment or benefit included in Total Payments shall
be determined by the Company's independent auditors at the
Company's expense in accordance with the principles of Sections
280G(d)(3) and (4) of the Code (or any successor provisions),
which determination shall be evidenced in a certificate of such
auditors addressed to the Company and the Executive. Such
opinion shall be addressed to the Company and the Executive and
shall be binding upon the Company and the Executive. If such
opinion concludes that any Total Payments constitute an excess
parachute payment, the amount payable hereunder or any other
payment or distribution determined by such counsel in such
opinion to be includible in Total Payments shall be reduced or
eliminated as specified by the Executive in writing delivered to
the Company within 30 days of his receipt of such opinion or, if
the Executive fails to so notify the Company, then as the Company
shall reasonably determine, so that under the bases of
calculations set forth in such opinion the Total Payments shall
be the Adjusted Total Payments. If such legal counsel so
requests in connection with the opinion required by this Section
4, the Executive and the Company shall obtain, at the Company's
expense, and such legal counsel may rely on in providing the
opinion, the advice of a firm of recognized executive
compensation consultants as to the reasonableness of any item of
compensation to be paid to or for the benefit of the Executive.
If the provisions of Sections 280G and 4999 of the Code (or any
successor provisions) are repealed without succession, then this
Section 4 shall be of no further force or effect.
5. WITHHOLDING TAXES. The Company may withhold from
all payments due to the Executive (or his beneficiary or estate)
hereunder all taxes which, by applicable federal, state, local or
other law, the Company is required to withhold therefrom.
6. REIMBURSEMENT OF EXPENSES. If any contest or
dispute shall arise under this Agreement involving termination of
the Executive's employment with the Company or involving the
failure or refusal of the Company to perform fully in accordance
with the terms hereof, the Company shall reimburse the Executive,
on a current basis, for all legal fees and expenses, if any,
incurred by the Executive in connection with such contest or
dispute, together with interest at a rate equal to the rate of
interest published in The Wall Street Journal under the caption
"Money Rates" as the prime rate, but in no event higher than the
maximum legal rate permissible under applicable law, such
interest to accrue from the date the Company receives the
Executive's statement for such fees and expenses through the date
of payment thereof; PROVIDED, HOWEVER, that in the event the
resolution of any such contest or dispute includes a finding
denying, in total, the Executive's claims in such contest or
-12-
<PAGE>
dispute, the Executive shall be required to reimburse the
Company, over a period of 12 months from the date of such
resolution, for all sums advanced to the Executive pursuant to
this Section 6.
7. OPERATIVE EVENT. Notwithstanding any provision
herein to the contrary, no amounts shall be payable hereunder
unless and until there is a Change in Control at a time when the
Executive is employed by the Company.
8. TERMINATION OF AGREEMENT. (a) This Agreement
shall be effective on the date hereof and shall continue until
terminated by the Company as provided in paragraph (b) of this
Section 8; PROVIDED, HOWEVER, that this Agreement shall terminate
in any event upon the first to occur of (i) the Executive's 70th
birthday, (ii) the Executive's death and (iii) termination of the
Executive's employment with the Company prior to a Change in
Control.
(b) The Company shall have the right prior to a Change
in Control, in its sole discretion, pursuant to action by the
Board, to approve the termination of this Agreement, which
termination shall not become effective until the date fixed by
the Board for such termination, which date shall be at least 120
days after notice thereof is given by the Company to the
Executive in accordance with Section 11; PROVIDED, HOWEVER, that
no such action shall be taken by the Board during any period of
time when the Board has knowledge that any person has taken steps
reasonably calculated to effect a Change in Control until, in the
opinion of the Board, such person has abandoned or terminated its
efforts to effect a Change in Control; and PROVIDED FURTHER, that
in no event shall this Agreement be terminated in the event of a
Change in Control.
9. SCOPE OF AGREEMENT. Nothing in this Agreement
shall be deemed to entitle the Executive to continued employment
with the Company or its subsidiaries, and if the Executive's
employment with the Company shall terminate prior to a Change in
Control, then the Executive shall have no further rights under
this Agreement; PROVIDED, HOWEVER, that any termination of the
Executive's employment following a Change in Control shall be
subject to all of the provisions of this Agreement.
10. SUCCESSORS; BINDING AGREEMENT. (a) This
Agreement shall not be terminated by any merger or consolidation
of the Company whereby the Company is or is not the surviving or
resulting corporation or as a result of any transfer of all or
substantially all of the assets of the Company. In the event of
any such merger, consolidation or transfer of assets, the
provisions of this Agreement shall be binding upon the surviving
or resulting corporation or the person or entity to which such
assets are transferred.
-13-
<PAGE>
(b) The Company agrees that concurrently with any
merger, consolidation or transfer of assets referred to in
paragraph (a) of this Section 10, it will cause any successor or
transferee unconditionally to assume, by written instrument
delivered to the Executive (or his beneficiary or estate), all of
the obligations of the Company hereunder. Failure of the Company
to obtain such assumption prior to the effectiveness of any such
merger, consolidation or transfer of assets shall be a breach of
this Agreement and shall entitle the Executive to compensation
and other benefits from the Company in the same amount and on the
same terms as the Executive would be entitled hereunder if the
Executive's employment were terminated following a Change in
Control other than by reason of a Nonqualifying Termination. For
purposes of implementing the foregoing, the date on which any
such merger, consolidation or transfer becomes effective shall be
deemed the Date of Termination.
(c) This Agreement shall inure to the benefit of and
be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive shall die
while any amounts would be payable to the Executive hereunder had
the Executive continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to such person or persons appointed in
writing by the Executive to receive such amounts or, if no person
is so appointed, to the Executive's estate.
11. NOTICE. (a) For purposes of this Agreement, all
notices and other communications required or permitted hereunder
shall be in writing and shall be deemed to have been duly given
when delivered or five days after deposit in the United States
mail, certified and return receipt requested, postage prepaid,
addressed (1) if to the Executive, to Lawrence G. Wolski, 221
White Deer Drive, Lemont, Illinois 60439, and if to the Company,
to Joslyn Corporation, 30 South Wacker Drive, Chicago, Illinois
60606, attention President with a copy to the Secretary, or (2)
to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
(b) A written notice of the Executive's Date of
Termination by the Company or the Executive, as the case may be,
to the other, shall (i) indicate the specific termination
provision in this Agreement relied upon, (ii) to the extent
applicable, set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated and (iii)
specify the termination date (which date shall be not less than
three days after the giving of such notice by the Executive of
termination during the Window Period and which date shall not be
less than 15 days after the giving of such notice under other
-14-
<PAGE>
circumstances). The failure by the Executive or the Company to
set forth in such notice any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive
any right of the Executive or the Company hereunder or preclude
the Executive or the Company from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights
hereunder.
12. FULL SETTLEMENT; RESOLUTION OF DISPUTES. (a) The
Company's obligation to make any payments provided for in this
Agreement and otherwise to perform its obligations hereunder
shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may
have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement and such
amounts shall not be reduced whether or not the Executive obtains
other employment.
(b) If there shall be any dispute between the Company
and the Executive in the event of any termination of the
Executive's employment, then, unless and until there is a final,
nonappealable judgment by a court of competent jurisdiction
declaring that such termination was for Cause, that the
determination by the Executive of the existence of Good Reason
was not made in good faith, or that the Company is not otherwise
obligated to pay any amount or provide any benefit to the
Executive and his dependents or other beneficiaries, as the case
may be, under paragraphs (a) and (b) of Section 3, the Company
shall pay all amounts, and provide all benefits, to the Executive
and his dependents or other beneficiaries, as the case may be,
that the Company would be required to pay or provide pursuant to
paragraphs (a) and (b) of Section 3 as though such termination
were by the Company without Cause or by the Executive with Good
Reason; PROVIDED, HOWEVER, that the Company shall not be required
to pay any disputed amounts pursuant to this paragraph except
upon receipt of an undertaking by or on behalf of the Executive
to repay all such amounts to which the Executive is ultimately
adjudged by such court not to be entitled.
13. EMPLOYMENT WITH SUBSIDIARIES. Employment with the
Company for purposes of this Agreement shall include employment
with any corporation or other entity in which the Company has a
direct or indirect ownership interest of 50% or more of the total
combined voting power of the then outstanding securities of such
corporation or other entity entitled to vote generally in the
election of directors.
-15-
<PAGE>
14. GOVERNING LAW; VALIDITY. The interpretation,
construction and performance of this Agreement shall be governed
by and construed and enforced in accordance with the internal
laws of the State of Illinois without regard to the principle of
conflicts of laws. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which
other provisions shall remain in full force and effect.
15. COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an
original and all of which together shall constitute one and the
same instrument.
16. MISCELLANEOUS. No provision of this Agreement may
be modified or waived unless such modification or waiver is
agreed to in writing and signed by the Executive and by a duly
authorized officer of the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time. Failure by the Executive or the
Company to insist upon strict compliance with any provision of
this Agreement or to assert any right the Executive or the
Company may have hereunder, including, without limitation, the
right of the Executive to terminate employment for Good Reason,
shall not be deemed to be a waiver of such provision or right or
any other provision or right of this Agreement. The rights of,
and benefits payable to, the Executive, his estate or his
beneficiaries pursuant to this Agreement are in addition to any
rights of, or benefits payable to, the Executive, his estate or
his beneficiaries under any other employee benefit plan or
compensation program of the Company.
-16-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed by a duly authorized officer of the
Company and the Executive has executed this Agreement as of the
day and year first above written.
JOSLYN CORPORATION
By:
---------------------------
Raymond E. Micheletti
President and Chief Executive
Officer
EXECUTIVE
------------------------------
Lawrence G. Wolski
-17-
<PAGE>
EXHIBIT 10.3
SEVERANCE AGREEMENT
THIS AGREEMENT is entered into as of the 16th day of
September, 1994 by and between Joslyn Corporation, an Illinois
corporation, and George W. Diehl (the "Executive").
W I T N E S S E T H
WHEREAS, the Executive currently serves as a key
employee of the Company and the Subsidiary (as such terms are
defined in Section 1) and his services and knowledge are valuable
to the Company in connection with the management of one or more
of the Company's principal operating facilities, divisions,
departments or subsidiaries; and
WHEREAS, the Board (as defined in Section 1) has
determined that it is in the best interests of the Company and
its shareholders to secure the Executive's continued services and
to ensure the Executive's continued dedication and objectivity in
the event of any threat or occurrence of, or negotiation or other
action that could lead to, or create the possibility of, a Change
in Control (as defined in Section 1) of the Company, without
concern as to whether the Executive might be hindered or
distracted by personal uncertainties and risks created by any
such possible Change in Control, and to encourage the Executive's
full attention and dedication to the Company, the Board has
authorized the Company to enter into this Agreement.
NOW, THEREFORE, for and in consideration of the
premises and the mutual covenants and agreements herein
contained, the Company and the Executive hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the
following terms shall have the respective meanings set forth
below:
(a) "Board" means the Board of Directors of the
Company.
(b) "Bonus Plan" means the Executive Management
Incentive Plan of Joslyn Corporation, or any plan of an
affiliated company of the Company intended to provide similar
benefits, or any of their successor plans.
(c) "Cause" means (1) a material breach by the
Executive of those duties and responsibilities of the Executive
which do not differ in any material respect from the duties and
responsibilities of the Executive during the 90-day period
<PAGE>
immediately prior to a Change in Control (other than as a result
of incapacity due to physical or mental illness) which is
demonstrably willful and deliberate on the Executive's part,
which is committed in bad faith or without reasonable belief that
such breach is in the best interests of the Company and which is
not remedied in a reasonable period of time after receipt of
written notice from the Company specifying such breach or (2) the
commission by the Executive of a felony involving moral
turpitude.
(d) "Change in Control" means:
(1) the acquisition by any individual, entity or group
(a "Person"), including any "person" within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act (hereinafter
defined), of beneficial ownership within the meaning of Rule 13d-
3 promulgated under the Exchange Act, of 25% or more of either
(i) the then outstanding common shares of the Company (the
"Outstanding Company Common Shares") or (ii) the combined voting
power of the then outstanding securities of the Company entitled
to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); PROVIDED, HOWEVER, that the
following acquisitions shall not constitute a Change in Control:
(A) any acquisition directly from the Company (excluding any
acquisition resulting from the exercise of a conversion or
exchange privilege in respect of outstanding convertible or
exchangeable securities), (B) any acquisition by the Company, (C)
any acquisition by an employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company, or (D) any acquisition by any
corporation pursuant to a reorganization, merger or consolidation
involving the Company, if, immediately after such reorganization,
merger or consolidation, each of the conditions described in
clauses (i), (ii) and (iii) of subsection (3) of this Section 1
(d) shall be satisfied; and PROVIDED FURTHER that, for purposes
of clause (B), if any Person (other than the Company or any
employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company)
shall become the beneficial owner of 25% or more of the
Outstanding Company Common Shares or 25% or more of the
Outstanding Company Voting Securities by reason of an acquisition
by the Company and such Person shall, after such acquisition by
the Company, become the beneficial owner of any additional shares
of the Outstanding Company Common Shares or any additional
Outstanding Voting Securities and such beneficial ownership is
publicly announced, such additional beneficial ownership shall
constitute a Change in Control;
(2) individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of such Board; PROVIDED,
HOWEVER, that any individual who becomes a director of the
Company subsequent to the date hereof whose election, or
-2-
<PAGE>
nomination for election by the Company's shareholders, was
approved by the vote of at least a majority of the directors then
comprising the Incumbent Board shall be deemed to have been a
member of the Incumbent Board; and PROVIDED FURTHER, that no
individual who was initially elected as a director of the Company
as a result of an actual or threatened election contest, as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act, or any other actual or threatened solicitation
of proxies or consents by or on behalf of any Person other than
the Board shall be deemed to have been a member of the Incumbent
Board;
(3) approval by the shareholders of the Company of a
reorganization, merger or consolidation unless, in any such case,
immediately after such reorganization, merger or consolidation,
(i) more than 60% of the then outstanding shares of common stock
of the corporation resulting from such reorganization, merger or
consolidation and more than 60% of the combined voting power of
the then outstanding securities of such corporation entitled to
vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals or entities who were the beneficial owners,
respectively, of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation and in substantially the
same proportions relative to each other as their ownership,
immediately prior to such reorganization, merger or
consolidation, of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities, as the case may be, (ii)
no Person (other than the Company, any employee benefit plan (or
related trust) sponsored or maintained by the Company or the
corporation resulting from such reorganization, merger or
consolidation (or any corporation controlled by the Company) and
any Person which beneficially owned, immediately prior to such
reorganization, merger or consolidation, directly or indirectly,
25% or more of the Outstanding Company Common Shares or the
Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 25% or more of the
then outstanding shares of common stock of such corporation or
25% or more of the combined voting power of the then outstanding
securities of such corporation entitled to vote generally in the
election of directors and (iii) at least a majority of the
members of the board of directors of the corporation resulting
from such reorganization, merger or consolidation were members of
the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such
reorganization, merger or consolidation; or
-3-
<PAGE>
(4) approval by the shareholders of the Company of (i)
a plan of complete liquidation or dissolution of the Company or
(ii) the sale or other disposition of all or substantially all of
the assets of the Company other than to a corporation with
respect to which, immediately after such sale or other
disposition, (A) more than 60% of the then outstanding shares of
common stock thereof and more than 60% of the combined voting
power of the then outstanding securities thereof entitled to vote
generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities immediately prior to such
sale or other disposition and in substantially the same
proportions relative to each other as their ownership,
immediately prior to such sale or other disposition, of the
Outstanding Company Common Shares and the Outstanding Company
Voting Securities, as the case may be, (B) no Person (other than
the Company, any employee benefit plan (or related trust)
sponsored or maintained by the Company or such corporation (or
any corporation controlled by the Company) and any Person which
beneficially owned, immediately prior to such sale or other
disposition, directly or indirectly, 25% or more of the
Outstanding Company Common Shares or the Outstanding Company
Voting Securities, as the case may be) beneficially owns,
directly or indirectly, 25% or more of the then outstanding
shares of common stock thereof or 25% or more of the combined
voting power of the then outstanding securities thereof entitled
to vote generally in the election of directors and (C) at least a
majority of the members of the board of directors thereof were
members of the Incumbent Board at the time of the execution of
the initial agreement or action of the Board providing for such
sale or other disposition.
(e) "Code" means the Internal Revenue Code of 1986, as
amended.
(f) "Company" means Joslyn Corporation, an Illinois
corporation.
(g) "Date of Termination" means (1) the effective date
on which the Executive's employment by the Company terminates as
specified in a prior written notice by the Company or the
Executive, as the case may be, to the other, delivered pursuant
to Section 11 or (2) if the Executive's employment by the Company
terminates by reason of death, the date of death of the
Executive.
(h) "Exchange Act" means the Securities Exchange Act
of 1934, as amended.
-4-
<PAGE>
(i) "Good Reason" means, without the Executive's
express written consent, the occurrence of any of the following
events after a Change in Control:
(1) any of (i) the assignment to the Executive of any
duties inconsistent in any material respect with the Executive's
position(s), duties, responsibilities or status with the Company
immediately prior to such Change in Control, (ii) a change in the
Executive's reporting responsibilities, titles or offices with
the Company as in effect immediately prior to such Change in
Control or (iii) any removal or involuntary termination of the
Executive from the Company otherwise than as expressly permitted
by this Agreement or any failure to re-elect the Executive to any
position with the Company held by the Executive immediately prior
to such Change in Control;
(2) a reduction by the Company in the Executive's rate
of annual base salary as in effect immediately prior to such
Change in Control or as the same may be increased from time to
time thereafter or the failure by the Company to increase such
rate of base salary each year after such Change in Control by an
amount which at least equals the annual percentage increase, if
any, in the Consumer Price Index for All Items For All Urban
Consumers respecting the metropolitan area closest to the
Executive's place of residence as reported by the United States
Department of Labor, Bureau of Labor Statistics;
(3) any requirement of the Company that the Executive
have a regular work site located more than 50 miles from the
regular work site of the Executive at the time of the Change in
Control;
(4) the failure of the Company to (i) continue in
effect any employee benefit plan or compensation plan in which
the Executive is participating immediately prior to such Change
in Control, unless the Executive is permitted to participate in
other plans providing the Executive with substantially comparable
benefits, or the taking of any action by the Company which would
adversely affect the Executive's participation in or materially
reduce the Executive's benefits under any such plan, (ii) provide
the Executive and the Executive's dependents welfare benefits
(including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life,
accidental death and travel accident insurance plans and
programs) in accordance with the most favorable plans, practices,
programs and policies of the Company or the Subsidiary, whichever
is the employer of the Executive, in effect for the Executive
immediately prior to such Change in Control or, if more favorable
to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company or the
Subsidiary, whichever is the employer of the Executive, (iii)
provide fringe benefits in accordance with the most favorable
-5-
<PAGE>
plans, practices, programs and policies of the Company or the
Subsidiary, whichever is the employer of the Executive, in effect
for the Executive immediately prior to such Change in Control or,
if more favorable to the Executive, as in effect generally at any
time thereafter with respect to other peer executives of the
Company or the Subsidiary, whichever is the employer of the
Executive, (iv) provide the Executive with paid vacation in
accordance with the most favorable plans, policies, programs and
practices of the Company or the Subsidiary, whichever is the
employer of the Executive, as in effect for the Executive
immediately prior to such Change in Control or, if more favorable
to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company or the
Subsidiary, whichever is the employer of the Executive, or (v)
reimburse the Executive promptly for all reasonable employment
expenses incurred by the Executive in accordance with the most
favorable policies, practices and procedures of the Company or
the Subsidiary, whichever is the employer of the Executive, in
effect for the Executive immediately prior to such Change in
Control, or if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company or the Subsidiary, whichever is the
employer of the Executive; or
(5) the failure of the Company to obtain the
assumption agreement from any successor as contemplated in
Section 10(b).
For purposes of this Agreement, references to the
Company in the definition of Good Reason shall be deemed to be
references to the Company or the Subsidiary.
For purposes of this Agreement, any good faith
determination of Good Reason made by the Executive shall be
conclusive; PROVIDED, HOWEVER, that an isolated, insubstantial
and inadvertent action taken in good faith and which is remedied
by the Company promptly after receipt of notice thereof given by
the Executive shall not constitute Good Reason.
(j) "Nonqualifying Termination" means a termination of
the Executive's employment with the Company or the Subsidiary (1)
by the Company or the Subsidiary for Cause, (2) by the Executive
for any reason other than a Good Reason, (3) as a result of the
Executive's death or (4) by the Company or the Subsidiary due to
the Executive's absence from his duties with the Company or the
Subsidiary on a full-time basis for at least 180 consecutive days
as a result of the Executive's incapacity due to physical or
mental illness; PROVIDED, HOWEVER, that a termination of the
Executive's employment with the Company or the Subsidiary by the
Executive for any reason whatsoever during the "Window Period"
(hereinafter defined) shall not constitute a Nonqualifying
Termination.
-6-
<PAGE>
(k) "Parity Plan" means the Parity Compensation Plan
of Joslyn Corporation, or any plan of an affiliated company of
the Company intended to provide similar benefits, or any of their
successor plans.
(l) "Profit Sharing Plan" means the Employees' Savings
and Profit Sharing Plan of Joslyn Corporation, or any plan of an
affiliated company of the Company intended to provide similar
benefits, or any of their successor plans.
(m) "Subsidiary" means Joslyn Hi-Voltage Corporation,
a subsidiary of the Company.
(n) "Termination Period" means the period of time
beginning with a Change in Control and ending on the earliest to
occur of (1) the Executive's 70th birthday, (2) the Executive's
death, and (3) two years following such Change in Control.
(o) "Termination Year Bonus" shall have the meaning
set forth in Section 3(a)(1).
(p) "Termination Year Parity Amount" shall have the
meaning set forth in Section 3(a)(1).
(q) "Termination Year Profit Sharing Amount" shall
have the meaning set forth in Section 3(a)(1).
(r) "Window Period" means the 30-day period commencing
one year after the date of a Change in Control.
2. OBLIGATIONS OF THE EXECUTIVE. The Executive
agrees that in the event any person or group attempts a Change in
Control, he shall not voluntarily leave the employ of the Company
without Good Reason (a) until such attempted Change in Control
terminates or (b) if a Change in Control shall occur, until 90
days following such Change in Control. For purposes of the
foregoing subsection (a), Good Reason shall be determined as if a
Change in Control had occurred when such attempted Change in
Control became known to the Board.
3. PAYMENTS UPON TERMINATION OF EMPLOYMENT.
(a) If during the Termination Period the employment of
the Executive with the Company or the Subsidiary shall terminate,
other than by reason of a Nonqualifying Termination, then the
Company shall pay to the Executive (or the Executive's
beneficiary or estate), as compensation for services rendered to
the Company or the Subsidiary, as the case may be:
(1) within 30 days following the Date of Termination,
a lump-sum cash amount equal to the sum of:
-7-
<PAGE>
(i) the Executive's full annual base salary from the
Company and its affiliated companies through the Date of
Termination, to the extent not theretofore paid,
(ii) the Executive's Award Payment at 100% of Plan
Accomplishment level under the Bonus Plan (one-half maximum
potential award), for the full fiscal year in which the Date of
Termination occurs, calculated in accordance with the terms of
the Bonus Plan as in effect immediately prior to the Change in
Control or as in effect on the Date of Termination, whichever
results in a greater amount, as if a Change in Control had not
occurred, the Executive were employed by the Company at the end
of the such fiscal year and all other conditions necessary for
the payment by the Company of such bonus were satisfied (the
"Termination Year Bonus"), multiplied by a fraction, the
numerator of which is the number of days in the fiscal year in
which the Date of Termination occurs through the Date of
Termination and the denominator of which is 365 or 366, as
applicable, reduced by the amount otherwise payable pursuant to
the terms of the Bonus Plan for such plan year;
(iii) the Executive's Parity Compensation payment as
determined under the Parity Plan, for the full fiscal year in
which the Date of Termination occurs, calculated in accordance
with the terms of the Parity Plan as in effect immediately prior
to the Change in Control or as in effect on the Date of
Termination, whichever results in a greater amount, as if a
Change in Control had not occurred, the Executive were employed
by the Company at the end of such fiscal year, the Executive had
received the Termination Year Bonus and all other conditions
necessary for the payment by the Company of such Parity
Compensation payment were satisfied (the "Termination Year Parity
Amount"), multiplied by a fraction, the numerator of which is the
number of days in the fiscal year in which the Date of
Termination occurs through the Date of Termination and the
denominator of which is 365 or 366, as applicable, reduced by the
amount otherwise payable pursuant to the terms of the Parity Plan
for such plan year;
(iv) the maximum Profit Sharing Contribution for the
Executive under the Profit Sharing Plan, for the full fiscal year
in which the Date of Termination occurs, calculated in accordance
with the terms of the Profit Sharing Plan as in effect
immediately prior to the Change in Control or as in effect on the
Date of Termination, whichever results in a greater amount, as if
a Change in Control had not occurred, the Executive were employed
by the Company at the end of such fiscal year, the Executive had
received the Termination Year Bonus and all other conditions
necessary for the payment by the Company of such Profit Sharing
Contribution were satisfied (the "Termination Year Profit Sharing
Amount"), multiplied by a fraction, the numerator of which is the
number of days in the fiscal year in which the Date of
-8-
<PAGE>
Termination occurs through the Date of Termination and the
denominator of which is 365 or 366, as applicable, reduced by the
amount otherwise allocated to the Executive's account under the
Profit Sharing Plan pursuant to the terms of the Profit Sharing
Plan for such plan year as determined at the Date of Termination;
and
(v) any compensation previously deferred by the
Executive (together with any interest and earnings thereon) and
any accrued vacation pay, in each case to the extent not
theretofore paid; plus
(2) within 30 days following the Date of Termination,
unless such payment date is extended pursuant to Section 4, in
which case such payment date may not be extended beyond 90 days
following the Date of Termination, a lump-sum cash amount in an
amount equal to the sum of (i) two (2) times the Executive's
highest annual base salary from the Company and its affiliated
companies in effect during the 12-month period prior to the Date
of Termination, (ii) two (2) times the Executive's full
Termination Year Bonus, (iii) two (2) times the Executive's full
Termination Year Parity Amount, and (iv) two (2) times the
Executive's full Termination Year Profit Sharing Amount;
PROVIDED, HOWEVER, that any amount paid pursuant to this Section
3(a)(2) may be reduced in accordance with the provisions of
Section 4; PROVIDED FURTHER, that in the event there are fewer
than 24 whole months remaining from the Date of Termination to
the date of the Executive's 70th birthday, the amount calculated
in accordance with this Section 3(a)(2) shall be reduced by
multiplying such amount by a fraction the numerator of which is
the number of months, including a partial month (with a partial
month being expressed as a fraction the numerator of which is the
number of days remaining in such month and the denominator of
which is the number of days in such month), so remaining and the
denominator of which is 24; and PROVIDED FURTHER, that, except as
otherwise provided in this Agreement, any amount paid pursuant to
this Section 3(a)(2) shall be paid in lieu of any other amount of
severance relating to salary or bonus continuation to be received
by the Executive upon termination of employment of the Executive
under any severance plan, employment agreement, policy or
arrangement of the Company applicable to the Executive, other
than amounts to be received by the Executive upon termination of
employment of the Executive under the Bonus Plan, the Parity Plan
or the Profit Sharing Plan.
(b) (1) In addition to the payments to be made
pursuant to paragraph (a) of this Section 3, if on the Date of
Termination the Executive shall not be fully vested in any
employer contributions or earnings thereon made on his behalf
under the Profit Sharing Plan, the Company shall pay to the
Executive within 30 days following the Date of Termination a lump
sum cash amount equal to the value of the unvested portion of
-9-
<PAGE>
such employer contributions and earnings; PROVIDED, HOWEVER, that
if any payment pursuant to this Section 3(b)(1) may or would
result in such payment being deemed a transaction which is
subject to Section 16(b) of the Exchange Act, the Company shall
make such payment so as to meet the conditions for an exemption
from such Section 16(b) as set forth in the rules (and
interpretive and no-action letters relating thereto) under
Section 16. The value of any such unvested employer
contributions and earnings shall be determined in accordance with
the terms of the Profit Sharing Plan.
(2) For a period of two (2) years commencing on the
Date of Termination, the Company shall continue to keep in full
force and effect all medical, dental, accident and life insurance
plans with respect to the Executive and his dependents with the
same level of coverage, upon the same terms and otherwise to the
same extent as such plans shall have been in effect immediately
prior to the Date of Termination. Notwithstanding the foregoing
sentence, if any of the medical, dental, accident or life
insurance plans then in effect generally with respect to other
peer executives of the Company and its affiliated companies would
be more favorable to the Executive, such plan coverage shall be
substituted for the analogous plan coverage provided to the
Executive immediately prior to the Date of Termination, and the
Company and the Executive shall share the costs of such plan
coverage in the same proportion as such costs were shared
immediately prior to the Date of Termination. The obligation of
the Company to continue coverage of the Executive and the
Executive's dependents under such plans shall cease at such time
as the Executive and the Executive's dependents obtain comparable
coverage under another plan, including a plan maintained by a new
employer. Execution of this Agreement by the Executive shall not
be considered a waiver of any rights or entitlements the
Executive and the Executive's dependents may have under
applicable law to continuation of coverage under the group
medical plan maintained by the Company or its affiliated
companies.
(3) If the Executive shall be at least 50 years of age
and the sum of the Executive's age and years of service with the
Company is at least 75 at (i) the termination of medical coverage
provided by Section 3(b)(2) hereof, (ii) the termination of the
severance continuation under the Company's Group Medical coverage
or (iii) the end of any COBRA continuation of Group Medical
coverage, the Company shall provide the Executive with the
ability to elect Group Medical coverage for the Executive and the
Executive's dependents; PROVIDED, that the maximum continuation
period of such coverage shall be until age 65 for the Executive
and any covered spouse, and in accordance with the provisions of
the Company's Group Medical Plan for covered children. The
extended continuation of Group Medical coverage described in the
previous sentence shall be subject to the provisions of the
-10-
<PAGE>
Company's Group Medical Plan and a required contribution fee
equal to the rate for Early Retiree's under the Company's Retiree
Medical Plan for Plan "A" coverage, or for Plan "B" coverage, the
Early Retiree Rate less the difference between the Plan "A" and
Plan "B" contribution rates for active employees.
(4) The Company shall reimburse the Executive for 90%
of the Executive's expenditures for obtaining outplacement
services, provided that the Company shall have no obligation to
reimburse the Executive in an amount which exceeds 10% of the
Executive's highest annual base salary from the Company and its
affiliated companies in effect during the 12-month period prior
to the Date of Termination.
(c) If during the Termination Period the employment of
the Executive shall terminate by reason of a Nonqualifying
Termination, then the Company shall pay to the Executive within
30 days following the Date of Termination, a lump-sum cash amount
equal to the sum of (1) the Executive's full annual base salary
from the Company through the Date of Termination, to the extent
not theretofore paid and (2) any compensation previously deferred
by the Executive (together with any interest and earnings
thereon) and any accrued vacation pay, in each case to the extent
not theretofore paid.
4. EXCESS PARACHUTE PAYMENTS. (a) Anything in this
Agreement to the contrary notwithstanding, in the event it shall
be determined that any payment or distribution by the Company or
its affiliated companies to or for the benefit of the Executive,
whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise (in the aggregate,
"Total Payments"), would constitute an "excess parachute
payment," then Total Payments shall be reduced to be One Dollar
($1) less than the maximum amount which may be paid or
distributed to or for the benefit of the Executive without
causing the Executive to be subject to the tax imposed by Section
4999 of the Code (or any successor provision) in respect of Total
Payments or which the Company or its affiliated companies may pay
without loss of deduction under Section 280G(a) of the Code (or
any successor provision) (Total Payments, as so reduced, the
"Adjusted Total Payments"). For purposes of this Agreement, the
terms "excess parachute payment" and "parachute payments" shall
have the meanings assigned to them in Section 280G of the Code
(or any successor provision), and such "parachute payments" shall
be valued as provided therein. Present value for purposes of
this Agreement shall be calculated in accordance with Section
1274(b)(2) of the Code (or any successor provision).
(b) Within 60 days following the Date of Termination
or notice by the Company to the Executive of its reasonable
belief that there is a payment or distribution due to or for the
benefit of the Executive which would result in an excess
-11-
<PAGE>
parachute payment, the Executive and the Company, at the
Company's expense, shall obtain the opinion (which need not be
unqualified) of nationally recognized tax counsel selected by the
Company's independent auditors and acceptable to the Executive in
his sole discretion (which may be regular outside counsel to the
Company), which opinion sets forth (A) the amount of the
Executive's Base Period Income, (B) the amount and present value
of Total Payments and (C) the amount and present value of any
excess parachute payments determined without regard to the
limitations of this Section 4. As used in this Section 4(b), the
term "Base Period Income" means the Executive's "annualized
includible compensation for the base period" as defined in
Section 280G(d)(1) of the Code (or any successor provision). For
purposes of such opinion, the value of any noncash benefits or
any deferred payment or benefit included in Total Payments shall
be determined by the Company's independent auditors at the
Company's expense in accordance with the principles of Sections
280G(d)(3) and (4) of the Code (or any successor provisions),
which determination shall be evidenced in a certificate of such
auditors addressed to the Company and the Executive. Such
opinion shall be addressed to the Company and the Executive and
shall be binding upon the Company and the Executive. If such
opinion concludes that any Total Payments constitute an excess
parachute payment, the amount payable hereunder or any other
payment or distribution determined by such counsel in such
opinion to be includible in Total Payments shall be reduced or
eliminated as specified by the Executive in writing delivered to
the Company within 30 days of his receipt of such opinion or, if
the Executive fails to so notify the Company, then as the Company
shall reasonably determine, so that under the bases of
calculations set forth in such opinion the Total Payments shall
be the Adjusted Total Payments. If such legal counsel so
requests in connection with the opinion required by this Section
4, the Executive and the Company shall obtain, at the Company's
expense, and such legal counsel may rely on in providing the
opinion, the advice of a firm of recognized executive
compensation consultants as to the reasonableness of any item of
compensation to be paid to or for the benefit of the Executive.
If the provisions of Sections 280G and 4999 of the Code (or any
successor provisions) are repealed without succession, then this
Section 4 shall be of no further force or effect.
5. WITHHOLDING TAXES. The Company may withhold from
all payments due to the Executive (or his beneficiary or estate)
hereunder all taxes which, by applicable federal, state, local or
other law, the Company is required to withhold therefrom.
6. REIMBURSEMENT OF EXPENSES. If any contest or
dispute shall arise under this Agreement involving termination of
the Executive's employment with the Company or involving the
failure or refusal of the Company to perform fully in accordance
with the terms hereof, the Company shall reimburse the Executive,
-12-
<PAGE>
on a current basis, for all legal fees and expenses, if any,
incurred by the Executive in connection with such contest or
dispute, together with interest at a rate equal to the rate of
interest published in The Wall Street Journal under the caption
"Money Rates" as the prime rate, but in no event higher than the
maximum legal rate permissible under applicable law, such
interest to accrue from the date the Company receives the
Executive's statement for such fees and expenses through the date
of payment thereof; PROVIDED, HOWEVER, that in the event the
resolution of any such contest or dispute includes a finding
denying, in total, the Executive's claims in such contest or
dispute, the Executive shall be required to reimburse the
Company, over a period of 12 months from the date of such
resolution, for all sums advanced to the Executive pursuant to
this Section 6.
7. OPERATIVE EVENT. Notwithstanding any provision
herein to the contrary, no amounts shall be payable hereunder
unless and until there is a Change in Control at a time when the
Executive is employed by the Company.
8. TERMINATION OF AGREEMENT. (a) This Agreement
shall be effective on the date hereof and shall continue until
terminated by the Company as provided in paragraph (b) of this
Section 8; PROVIDED, HOWEVER, that this Agreement shall terminate
in any event upon the first to occur of (i) the Executive's 70th
birthday, (ii) the Executive's death and (iii) termination of the
Executive's employment with the Company prior to a Change in
Control.
(b) The Company shall have the right prior to a Change
in Control, in its sole discretion, pursuant to action by the
Board, to approve the termination of this Agreement, which
termination shall not become effective until the date fixed by
the Board for such termination, which date shall be at least 120
days after notice thereof is given by the Company to the
Executive in accordance with Section 11; PROVIDED, HOWEVER, that
no such action shall be taken by the Board during any period of
time when the Board has knowledge that any person has taken steps
reasonably calculated to effect a Change in Control until, in the
opinion of the Board, such person has abandoned or terminated its
efforts to effect a Change in Control; and PROVIDED FURTHER, that
in no event shall this Agreement be terminated in the event of a
Change in Control.
9. SCOPE OF AGREEMENT. Nothing in this Agreement
shall be deemed to entitle the Executive to continued employment
with the Company or its subsidiaries, and if the Executive's
employment with the Company shall terminate prior to a Change in
Control, then the Executive shall have no further rights under
this Agreement; PROVIDED, HOWEVER, that any termination of the
-13-
<PAGE>
Executive's employment following a Change in Control shall be
subject to all of the provisions of this Agreement.
10. SUCCESSORS; BINDING AGREEMENT. (a) This
Agreement shall not be terminated by any merger or consolidation
of the Company whereby the Company is or is not the surviving or
resulting corporation or as a result of any transfer of all or
substantially all of the assets of the Company. In the event of
any such merger, consolidation or transfer of assets, the
provisions of this Agreement shall be binding upon the surviving
or resulting corporation or the person or entity to which such
assets are transferred.
(b) The Company agrees that concurrently with any
merger, consolidation or transfer of assets referred to in
paragraph (a) of this Section 10, it will cause any successor or
transferee unconditionally to assume, by written instrument
delivered to the Executive (or his beneficiary or estate), all of
the obligations of the Company hereunder. Failure of the Company
to obtain such assumption prior to the effectiveness of any such
merger, consolidation or transfer of assets shall be a breach of
this Agreement and shall entitle the Executive to compensation
and other benefits from the Company in the same amount and on the
same terms as the Executive would be entitled hereunder if the
Executive's employment were terminated following a Change in
Control other than by reason of a Nonqualifying Termination. For
purposes of implementing the foregoing, the date on which any
such merger, consolidation or transfer becomes effective shall be
deemed the Date of Termination.
(c) This Agreement shall inure to the benefit of and
be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive shall die
while any amounts would be payable to the Executive hereunder had
the Executive continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to such person or persons appointed in
writing by the Executive to receive such amounts or, if no person
is so appointed, to the Executive's estate.
11. NOTICE. (a) For purposes of this Agreement, all
notices and other communications required or permitted hereunder
shall be in writing and shall be deemed to have been duly given
when delivered or five days after deposit in the United States
mail, certified and return receipt requested, postage prepaid,
addressed (1) if to the Executive, to George W. Diehl, 3017
Kingsley, Cleveland, Ohio 44122, and if to the Company, to Joslyn
Corporation, 30 South Wacker Drive, Chicago, Illinois 60606,
attention President with a copy to the Secretary, or (2) to such
other address as either party may have furnished to the other in
-14-
<PAGE>
writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
(b) A written notice of the Executive's Date of
Termination by the Company or the Executive, as the case may be,
to the other, shall (i) indicate the specific termination
provision in this Agreement relied upon, (ii) to the extent
applicable, set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated and (iii)
specify the termination date (which date shall be not less than
three days after the giving of such notice by the Executive of
termination during the Window Period and which date shall not be
less than 15 days after the giving of such notice under other
circumstances). The failure by the Executive or the Company to
set forth in such notice any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive
any right of the Executive or the Company hereunder or preclude
the Executive or the Company from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights
hereunder.
12. FULL SETTLEMENT; RESOLUTION OF DISPUTES. (a) The
Company's obligation to make any payments provided for in this
Agreement and otherwise to perform its obligations hereunder
shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may
have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement and such
amounts shall not be reduced whether or not the Executive obtains
other employment.
(b) If there shall be any dispute between the Company
and the Executive in the event of any termination of the
Executive's employment, then, unless and until there is a final,
nonappealable judgment by a court of competent jurisdiction
declaring that such termination was for Cause, that the
determination by the Executive of the existence of Good Reason
was not made in good faith, or that the Company is not otherwise
obligated to pay any amount or provide any benefit to the
Executive and his dependents or other beneficiaries, as the case
may be, under paragraphs (a) and (b) of Section 3, the Company
shall pay all amounts, and provide all benefits, to the Executive
and his dependents or other beneficiaries, as the case may be,
that the Company would be required to pay or provide pursuant to
paragraphs (a) and (b) of Section 3 as though such termination
were by the Company without Cause or by the Executive with Good
Reason; PROVIDED, HOWEVER, that the Company shall not be required
to pay any disputed amounts pursuant to this paragraph except
upon receipt of an undertaking by or on behalf of the Executive
-15-
<PAGE>
to repay all such amounts to which the Executive is ultimately
adjudged by such court not to be entitled.
13. EMPLOYMENT WITH SUBSIDIARIES. Employment with the
Company for purposes of this Agreement shall include employment
with any corporation or other entity in which the Company has a
direct or indirect ownership interest of 50% or more of the total
combined voting power of the then outstanding securities of such
corporation or other entity entitled to vote generally in the
election of directors.
14. GOVERNING LAW; VALIDITY. The interpretation,
construction and performance of this Agreement shall be governed
by and construed and enforced in accordance with the internal
laws of the State of Illinois without regard to the principle of
conflicts of laws. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which
other provisions shall remain in full force and effect.
15. COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an
original and all of which together shall constitute one and the
same instrument.
16. MISCELLANEOUS. No provision of this Agreement may
be modified or waived unless such modification or waiver is
agreed to in writing and signed by the Executive and by a duly
authorized officer of the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time. Failure by the Executive or the
Company to insist upon strict compliance with any provision of
this Agreement or to assert any right the Executive or the
Company may have hereunder, including, without limitation, the
right of the Executive to terminate employment for Good Reason,
shall not be deemed to be a waiver of such provision or right or
any other provision or right of this Agreement. The rights of,
and benefits payable to, the Executive, his estate or his
beneficiaries pursuant to this Agreement are in addition to any
rights of, or benefits payable to, the Executive, his estate or
his beneficiaries under any other employee benefit plan or
compensation program of the Company.
-16-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed by a duly authorized officer of the
Company and the Executive has executed this Agreement as of the
day and year first above written.
JOSLYN CORPORATION
By:
---------------------------
Raymond E. Micheletti
President and Chief Executive
Officer
EXECUTIVE
------------------------------
George W. Diehl
-17-
<PAGE>
EXHIBIT 10.2
SEVERANCE AGREEMENT
THIS AGREEMENT is entered into as of the 16th day of
September, 1994 by and between Joslyn Corporation, an Illinois
corporation, and Wayne M. Koprowski (the "Executive").
W I T N E S S E T H
WHEREAS, the Executive currently serves as a key
employee of the Company (as defined in Section 1) and his
services and knowledge are valuable to the Company in connection
with the management of one or more of the Company's principal
operating facilities, divisions, departments or subsidiaries; and
WHEREAS, the Board (as defined in Section 1) has
determined that it is in the best interests of the Company and
its shareholders to secure the Executive's continued services and
to ensure the Executive's continued dedication and objectivity in
the event of any threat or occurrence of, or negotiation or other
action that could lead to, or create the possibility of, a Change
in Control (as defined in Section 1) of the Company, without
concern as to whether the Executive might be hindered or
distracted by personal uncertainties and risks created by any
such possible Change in Control, and to encourage the Executive's
full attention and dedication to the Company, the Board has
authorized the Company to enter into this Agreement.
NOW, THEREFORE, for and in consideration of the
premises and the mutual covenants and agreements herein
contained, the Company and the Executive hereby agree as follows:
1. DEFINITIONS. As used in this Agreement, the
following terms shall have the respective meanings set forth
below:
(a) "Board" means the Board of Directors of the
Company.
(b) "Bonus Plan" means the Executive Management
Incentive Plan of Joslyn Corporation, or any plan of an
affiliated company of the Company intended to provide similar
benefits, or any of their successor plans.
(c) "Cause" means (1) a material breach by the
Executive of those duties and responsibilities of the Executive
which do not differ in any material respect from the duties and
responsibilities of the Executive during the 90-day period
immediately prior to a Change in Control (other than as a result
<PAGE>
of incapacity due to physical or mental illness) which is
demonstrably willful and deliberate on the Executive's part,
which is committed in bad faith or without reasonable belief that
such breach is in the best interests of the Company and which is
not remedied in a reasonable period of time after receipt of
written notice from the Company specifying such breach or (2) the
commission by the Executive of a felony involving moral
turpitude.
(d) "Change in Control" means:
(1) the acquisition by any individual, entity or group
(a "Person"), including any "person" within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act (hereinafter
defined), of beneficial ownership within the meaning of Rule 13d-
3 promulgated under the Exchange Act, of 25% or more of either
(i) the then outstanding common shares of the Company (the
"Outstanding Company Common Shares") or (ii) the combined voting
power of the then outstanding securities of the Company entitled
to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); PROVIDED, HOWEVER, that the
following acquisitions shall not constitute a Change in Control:
(A) any acquisition directly from the Company (excluding any
acquisition resulting from the exercise of a conversion or
exchange privilege in respect of outstanding convertible or
exchangeable securities), (B) any acquisition by the Company, (C)
any acquisition by an employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company, or (D) any acquisition by any
corporation pursuant to a reorganization, merger or consolidation
involving the Company, if, immediately after such reorganization,
merger or consolidation, each of the conditions described in
clauses (i), (ii) and (iii) of subsection (3) of this Section 1
(d) shall be satisfied; and PROVIDED FURTHER that, for purposes
of clause (B), if any Person (other than the Company or any
employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company)
shall become the beneficial owner of 25% or more of the
Outstanding Company Common Shares or 25% or more of the
Outstanding Company Voting Securities by reason of an acquisition
by the Company and such Person shall, after such acquisition by
the Company, become the beneficial owner of any additional shares
of the Outstanding Company Common Shares or any additional
Outstanding Voting Securities and such beneficial ownership is
publicly announced, such additional beneficial ownership shall
constitute a Change in Control;
(2) individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of such Board; PROVIDED,
HOWEVER, that any individual who becomes a director of the
Company subsequent to the date hereof whose election, or
nomination for election by the Company's shareholders, was
-2-
<PAGE>
approved by the vote of at least a majority of the directors then
comprising the Incumbent Board shall be deemed to have been a
member of the Incumbent Board; and PROVIDED FURTHER, that no
individual who was initially elected as a director of the Company
as a result of an actual or threatened election contest, as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under
the Exchange Act, or any other actual or threatened solicitation
of proxies or consents by or on behalf of any Person other than
the Board shall be deemed to have been a member of the Incumbent
Board;
(3) approval by the shareholders of the Company of a
reorganization, merger or consolidation unless, in any such case,
immediately after such reorganization, merger or consolidation,
(i) more than 60% of the then outstanding shares of common stock
of the corporation resulting from such reorganization, merger or
consolidation and more than 60% of the combined voting power of
the then outstanding securities of such corporation entitled to
vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals or entities who were the beneficial owners,
respectively, of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation and in substantially the
same proportions relative to each other as their ownership,
immediately prior to such reorganization, merger or
consolidation, of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities, as the case may be, (ii)
no Person (other than the Company, any employee benefit plan (or
related trust) sponsored or maintained by the Company or the
corporation resulting from such reorganization, merger or
consolidation (or any corporation controlled by the Company) and
any Person which beneficially owned, immediately prior to such
reorganization, merger or consolidation, directly or indirectly,
25% or more of the Outstanding Company Common Shares or the
Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 25% or more of the
then outstanding shares of common stock of such corporation or
25% or more of the combined voting power of the then outstanding
securities of such corporation entitled to vote generally in the
election of directors and (iii) at least a majority of the
members of the board of directors of the corporation resulting
from such reorganization, merger or consolidation were members of
the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such
reorganization, merger or consolidation; or
(4) approval by the shareholders of the Company of (i)
a plan of complete liquidation or dissolution of the Company or
(ii) the sale or other disposition of all or substantially all of
the assets of the Company other than to a corporation with
respect to which, immediately after such sale or other
-3-
<PAGE>
disposition, (A) more than 60% of the then outstanding shares of
common stock thereof and more than 60% of the combined voting
power of the then outstanding securities thereof entitled to vote
generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities immediately prior to such
sale or other disposition and in substantially the same
proportions relative to each other as their ownership,
immediately prior to such sale or other disposition, of the
Outstanding Company Common Shares and the Outstanding Company
Voting Securities, as the case may be, (B) no Person (other than
the Company, any employee benefit plan (or related trust)
sponsored or maintained by the Company or such corporation (or
any corporation controlled by the Company) and any Person which
beneficially owned, immediately prior to such sale or other
disposition, directly or indirectly, 25% or more of the
Outstanding Company Common Shares or the Outstanding Company
Voting Securities, as the case may be) beneficially owns,
directly or indirectly, 25% or more of the then outstanding
shares of common stock thereof or 25% or more of the combined
voting power of the then outstanding securities thereof entitled
to vote generally in the election of directors and (C) at least a
majority of the members of the board of directors thereof were
members of the Incumbent Board at the time of the execution of
the initial agreement or action of the Board providing for such
sale or other disposition.
(e) "Code" means the Internal Revenue Code of 1986, as
amended.
(f) "Company" means Joslyn Corporation, an Illinois
corporation.
(g) "Date of Termination" means (1) the effective date
on which the Executive's employment by the Company terminates as
specified in a prior written notice by the Company or the
Executive, as the case may be, to the other, delivered pursuant
to Section 11 or (2) if the Executive's employment by the Company
terminates by reason of death, the date of death of the
Executive.
(h) "Exchange Act" means the Securities Exchange Act
of 1934, as amended.
(i) "Good Reason" means, without the Executive's
express written consent, the occurrence of any of the following
events after a Change in Control:
(1) any of (i) the assignment to the Executive of any
duties inconsistent in any material respect with the Executive's
-4-
<PAGE>
position(s), duties, responsibilities or status with the Company
immediately prior to such Change in Control, (ii) a change in the
Executive's reporting responsibilities, titles or offices with
the Company as in effect immediately prior to such Change in
Control or (iii) any removal or involuntary termination of the
Executive from the Company otherwise than as expressly permitted
by this Agreement or any failure to re-elect the Executive to any
position with the Company held by the Executive immediately prior
to such Change in Control;
(2) a reduction by the Company in the Executive's rate
of annual base salary as in effect immediately prior to such
Change in Control or as the same may be increased from time to
time thereafter or the failure by the Company to increase such
rate of base salary each year after such Change in Control by an
amount which at least equals the annual percentage increase, if
any, in the Consumer Price Index for All Items For All Urban
Consumers respecting the metropolitan area closest to the
Executive's place of residence as reported by the United States
Department of Labor, Bureau of Labor Statistics;
(3) any requirement of the Company that the Executive
have a regular work site located more than 50 miles from the
regular work site of the Executive at the time of the Change in
Control;
(4) the failure of the Company to (i) continue in
effect any employee benefit plan or compensation plan in which
the Executive is participating immediately prior to such Change
in Control, unless the Executive is permitted to participate in
other plans providing the Executive with substantially comparable
benefits, or the taking of any action by the Company which would
adversely affect the Executive's participation in or materially
reduce the Executive's benefits under any such plan, (ii) provide
the Executive and the Executive's dependents welfare benefits
(including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life,
accidental death and travel accident insurance plans and
programs) in accordance with the most favorable plans, practices,
programs and policies of the Company and its affiliated companies
in effect for the Executive immediately prior to such Change in
Control or, if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies, (iii)
provide fringe benefits in accordance with the most favorable
plans, practices, programs and policies of the Company and its
affiliated companies in effect for the Executive immediately
prior to such Change in Control or, if more favorable to the
Executive, as in effect generally at any time thereafter with
respect to other peer executives of the Company and its
affiliated companies, (iv) provide the Executive with paid
vacation in accordance with the most favorable plans, policies,
-5-
<PAGE>
programs and practices of the Company and its affiliated
companies as in effect for the Executive immediately prior to
such Change in Control or, if more favorable to the Executive, as
in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies, or
(v) reimburse the Executive promptly for all reasonable
employment expenses incurred by the Executive in accordance with
the most favorable policies, practices and procedures of the
Company and its affiliated companies in effect for the Executive
immediately prior to such Change in Control, or if more favorable
to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company and its
affiliated companies; or
(5) the failure of the Company to obtain the
assumption agreement from any successor as contemplated in
Section 10(b).
For purposes of this Agreement, any good faith
determination of Good Reason made by the Executive shall be
conclusive; PROVIDED, HOWEVER, that an isolated, insubstantial
and inadvertent action taken in good faith and which is remedied
by the Company promptly after receipt of notice thereof given by
the Executive shall not constitute Good Reason.
(j) "Nonqualifying Termination" means a termination of
the Executive's employment (1) by the Company for Cause, (2) by
the Executive for any reason other than a Good Reason, (3) as a
result of the Executive's death or (4) by the Company due to the
Executive's absence from his duties with the Company on a full-
time basis for at least 180 consecutive days as a result of the
Executive's incapacity due to physical or mental illness;
PROVIDED, HOWEVER, that a termination of the Executive's
employment by the Executive for any reason whatsoever during the
"Window Period" (hereinafter defined) shall not constitute a
Nonqualifying Termination.
(k) "Parity Plan" means the Parity Compensation Plan
of Joslyn Corporation, or any plan of an affiliated company of
the Company intended to provide similar benefits, or any of their
successor plans.
(l) "Profit Sharing Plan" means the Employees' Savings
and Profit Sharing Plan of Joslyn Corporation, or any plan of an
affiliated company of the Company intended to provide similar
benefits, or any of their successor plans.
(m) "Termination Period" means the period of time
beginning with a Change in Control and ending on the earliest to
occur of (1) the Executive's 70th birthday, (2) the Executive's
death, and (3) two years following such Change in Control.
-6-
<PAGE>
(n) "Termination Year Bonus" shall have the meaning
set forth in Section 3(a)(1).
(o) "Termination Year Parity Amount" shall have the
meaning set forth in Section 3(a)(1).
(p) "Termination Year Profit Sharing Amount" shall
have the meaning set forth in Section 3(a)(1).
(q) "Window Period" means the 30-day period commencing
one year after the date of a Change in Control.
2. OBLIGATIONS OF THE EXECUTIVE. The Executive
agrees that in the event any person or group attempts a Change in
Control, he shall not voluntarily leave the employ of the Company
without Good Reason (a) until such attempted Change in Control
terminates or (b) if a Change in Control shall occur, until 90
days following such Change in Control. For purposes of the
foregoing subsection (a), Good Reason shall be determined as if a
Change in Control had occurred when such attempted Change in
Control became known to the Board.
3. PAYMENTS UPON TERMINATION OF EMPLOYMENT.
(a) If during the Termination Period the employment of
the Executive shall terminate, other than by reason of a
Nonqualifying Termination, then the Company shall pay to the
Executive (or the Executive's beneficiary or estate), as
compensation for services rendered to the Company:
(1) within 30 days following the Date of Termination,
a lump-sum cash amount equal to the sum of:
(i) the Executive's full annual base salary from the
Company and its affiliated companies through the Date of
Termination, to the extent not theretofore paid,
(ii) the Executive's Award Payment at 100% of Plan
Accomplishment level under the Bonus Plan (one-half maximum
potential award), for the full fiscal year in which the Date of
Termination occurs, calculated in accordance with the terms of
the Bonus Plan as in effect immediately prior to the Change in
Control or as in effect on the Date of Termination, whichever
results in a greater amount, as if a Change in Control had not
occurred, the Executive were employed by the Company at the end
of the such fiscal year and all other conditions necessary for
the payment by the Company of such bonus were satisfied (the
"Termination Year Bonus"), multiplied by a fraction, the
numerator of which is the number of days in the fiscal year in
which the Date of Termination occurs through the Date of
Termination and the denominator of which is 365 or 366, as
-7-
<PAGE>
applicable, reduced by the amount otherwise payable pursuant to
the terms of the Bonus Plan for such plan year;
(iii) the Executive's Parity Compensation payment as
determined under the Parity Plan, for the full fiscal year in
which the Date of Termination occurs, calculated in accordance
with the terms of the Parity Plan as in effect immediately prior
to the Change in Control or as in effect on the Date of
Termination, whichever results in a greater amount, as if a
Change in Control had not occurred, the Executive were employed
by the Company at the end of such fiscal year, the Executive had
received the Termination Year Bonus and all other conditions
necessary for the payment by the Company of such Parity
Compensation payment were satisfied (the "Termination Year Parity
Amount"), multiplied by a fraction, the numerator of which is the
number of days in the fiscal year in which the Date of
Termination occurs through the Date of Termination and the
denominator of which is 365 or 366, as applicable, reduced by the
amount otherwise payable pursuant to the terms of the Parity Plan
for such plan year;
(iv) the maximum Profit Sharing Contribution for the
Executive under the Profit Sharing Plan, for the full fiscal year
in which the Date of Termination occurs, calculated in accordance
with the terms of the Profit Sharing Plan as in effect
immediately prior to the Change in Control or as in effect on the
Date of Termination, whichever results in a greater amount, as if
a Change in Control had not occurred, the Executive were employed
by the Company at the end of such fiscal year, the Executive had
received the Termination Year Bonus and all other conditions
necessary for the payment by the Company of such Profit Sharing
Contribution were satisfied (the "Termination Year Profit Sharing
Amount"), multiplied by a fraction, the numerator of which is the
number of days in the fiscal year in which the Date of
Termination occurs through the Date of Termination and the
denominator of which is 365 or 366, as applicable, reduced by the
amount otherwise allocated to the Executive's account under the
Profit Sharing Plan pursuant to the terms of the Profit Sharing
Plan for such plan year as determined at the Date of Termination;
and
(v) any compensation previously deferred by the
Executive (together with any interest and earnings thereon) and
any accrued vacation pay, in each case to the extent not
theretofore paid; plus
-8-
<PAGE>
(2) within 30 days following the Date of Termination,
unless such payment date is extended pursuant to Section 4, in
which case such payment date may not be extended beyond 90 days
following the Date of Termination, a lump-sum cash amount in an
amount equal to the sum of (i) two (2) times the Executive's
highest annual base salary from the Company and its affiliated
companies in effect during the 12-month period prior to the Date
of Termination, (ii) two (2) times the Executive's full
Termination Year Bonus, (iii) two (2) times the Executive's full
Termination Year Parity Amount, and (iv) two (2) times the
Executive's full Termination Year Profit Sharing Amount;
PROVIDED, HOWEVER, that any amount paid pursuant to this Section
3(a)(2) may be reduced in accordance with the provisions of
Section 4; PROVIDED FURTHER, that in the event there are fewer
than 24 whole months remaining from the Date of Termination to
the date of the Executive's 70th birthday, the amount calculated
in accordance with this Section 3(a)(2) shall be reduced by
multiplying such amount by a fraction the numerator of which is
the number of months, including a partial month (with a partial
month being expressed as a fraction the numerator of which is the
number of days remaining in such month and the denominator of
which is the number of days in such month), so remaining and the
denominator of which is 24; and PROVIDED FURTHER, that, except as
otherwise provided in this Agreement, any amount paid pursuant to
this Section 3(a)(2) shall be paid in lieu of any other amount of
severance relating to salary or bonus continuation to be received
by the Executive upon termination of employment of the Executive
under any severance plan, employment agreement, policy or
arrangement of the Company applicable to the Executive, other
than amounts to be received by the Executive upon termination of
employment of the Executive under the Bonus Plan, the Parity Plan
or the Profit Sharing Plan.
(b) (1) In addition to the payments to be made
pursuant to paragraph (a) of this Section 3, if on the Date of
Termination the Executive shall not be fully vested in any
employer contributions or earnings thereon made on his behalf
under the Profit Sharing Plan, the Company shall pay to the
Executive within 30 days following the Date of Termination a lump
sum cash amount equal to the value of the unvested portion of
such employer contributions and earnings; PROVIDED, HOWEVER, that
if any payment pursuant to this Section 3(b)(1) may or would
result in such payment being deemed a transaction which is
subject to Section 16(b) of the Exchange Act, the Company shall
make such payment so as to meet the conditions for an exemption
from such Section 16(b) as set forth in the rules (and
interpretive and no-action letters relating thereto) under
Section 16. The value of any such unvested employer
contributions and earnings shall be determined in accordance with
the terms of the Profit Sharing Plan.
-9-
<PAGE>
(2) For a period of two (2) years commencing on the
Date of Termination, the Company shall continue to keep in full
force and effect all medical, dental, accident and life insurance
plans with respect to the Executive and his dependents with the
same level of coverage, upon the same terms and otherwise to the
same extent as such plans shall have been in effect immediately
prior to the Date of Termination. Notwithstanding the foregoing
sentence, if any of the medical, dental, accident or life
insurance plans then in effect generally with respect to other
peer executives of the Company and its affiliated companies would
be more favorable to the Executive, such plan coverage shall be
substituted for the analogous plan coverage provided to the
Executive immediately prior to the Date of Termination, and the
Company and the Executive shall share the costs of such plan
coverage in the same proportion as such costs were shared
immediately prior to the Date of Termination. The obligation of
the Company to continue coverage of the Executive and the
Executive's dependents under such plans shall cease at such time
as the Executive and the Executive's dependents obtain comparable
coverage under another plan, including a plan maintained by a new
employer. Execution of this Agreement by the Executive shall not
be considered a waiver of any rights or entitlements the
Executive and the Executive's dependents may have under
applicable law to continuation of coverage under the group
medical plan maintained by the Company or its affiliated
companies.
(3) If the Executive shall be at least 50 years of age
and the sum of the Executive's age and years of service with the
Company is at least 75 at (i) the termination of medical coverage
provided by Section 3(b)(2) hereof, (ii) the termination of the
severance continuation under the Company's Group Medical coverage
or (iii) the end of any COBRA continuation of Group Medical
coverage, the Company shall provide the Executive with the
ability to elect Group Medical coverage for the Executive and the
Executive's dependents; PROVIDED, that the maximum continuation
period of such coverage shall be until age 65 for the Executive
and any covered spouse, and in accordance with the provisions of
the Company's Group Medical Plan for covered children. The
extended continuation of Group Medical coverage described in the
previous sentence shall be subject to the provisions of the
Company's Group Medical Plan and a required contribution fee
equal to the rate for Early Retiree's under the Company's Retiree
Medical Plan for Plan "A" coverage, or for Plan "B" coverage, the
Early Retiree Rate less the difference between the Plan "A" and
Plan "B" contribution rates for active employees.
(4) The Company shall reimburse the Executive for 90%
of the Executive's expenditures for obtaining outplacement
services, provided that the Company shall have no obligation to
reimburse the Executive in an amount which exceeds 10% of the
Executive's highest annual base salary from the Company and its
-10-
<PAGE>
affiliated companies in effect during the 12-month period prior
to the Date of Termination.
(c) If during the Termination Period the employment of
the Executive shall terminate by reason of a Nonqualifying
Termination, then the Company shall pay to the Executive within
30 days following the Date of Termination, a lump-sum cash amount
equal to the sum of (1) the Executive's full annual base salary
from the Company through the Date of Termination, to the extent
not theretofore paid and (2) any compensation previously deferred
by the Executive (together with any interest and earnings
thereon) and any accrued vacation pay, in each case to the extent
not theretofore paid.
4. EXCESS PARACHUTE PAYMENTS. (a) Anything in this
Agreement to the contrary notwithstanding, in the event it shall
be determined that any payment or distribution by the Company or
its affiliated companies to or for the benefit of the Executive,
whether paid or payable or distributed or distributable pursuant
to the terms of this Agreement or otherwise (in the aggregate,
"Total Payments"), would constitute an "excess parachute
payment," then Total Payments shall be reduced to be One Dollar
($1) less than the maximum amount which may be paid or
distributed to or for the benefit of the Executive without
causing the Executive to be subject to the tax imposed by Section
4999 of the Code (or any successor provision) in respect of Total
Payments or which the Company or its affiliated companies may pay
without loss of deduction under Section 280G(a) of the Code (or
any successor provision) (Total Payments, as so reduced, the
"Adjusted Total Payments"). For purposes of this Agreement, the
terms "excess parachute payment" and "parachute payments" shall
have the meanings assigned to them in Section 280G of the Code
(or any successor provision), and such "parachute payments" shall
be valued as provided therein. Present value for purposes of
this Agreement shall be calculated in accordance with Section
1274(b)(2) of the Code (or any successor provision).
(b) Within 60 days following the Date of Termination
or notice by the Company to the Executive of its reasonable
belief that there is a payment or distribution due to or for the
benefit of the Executive which would result in an excess
parachute payment, the Executive and the Company, at the
Company's expense, shall obtain the opinion (which need not be
unqualified) of nationally recognized tax counsel selected by the
Company's independent auditors and acceptable to the Executive in
his sole discretion (which may be regular outside counsel to the
Company), which opinion sets forth (A) the amount of the
Executive's Base Period Income, (B) the amount and present value
of Total Payments and (C) the amount and present value of any
excess parachute payments determined without regard to the
limitations of this Section 4. As used in this Section 4(b), the
term "Base Period Income" means the Executive's "annualized
-11-
<PAGE>
includible compensation for the base period" as defined in
Section 280G(d)(1) of the Code (or any successor provision). For
purposes of such opinion, the value of any noncash benefits or
any deferred payment or benefit included in Total Payments shall
be determined by the Company's independent auditors at the
Company's expense in accordance with the principles of Sections
280G(d)(3) and (4) of the Code (or any successor provisions),
which determination shall be evidenced in a certificate of such
auditors addressed to the Company and the Executive. Such
opinion shall be addressed to the Company and the Executive and
shall be binding upon the Company and the Executive. If such
opinion concludes that any Total Payments constitute an excess
parachute payment, the amount payable hereunder or any other
payment or distribution determined by such counsel in such
opinion to be includible in Total Payments shall be reduced or
eliminated as specified by the Executive in writing delivered to
the Company within 30 days of his receipt of such opinion or, if
the Executive fails to so notify the Company, then as the Company
shall reasonably determine, so that under the bases of
calculations set forth in such opinion the Total Payments shall
be the Adjusted Total Payments. If such legal counsel so
requests in connection with the opinion required by this Section
4, the Executive and the Company shall obtain, at the Company's
expense, and such legal counsel may rely on in providing the
opinion, the advice of a firm of recognized executive
compensation consultants as to the reasonableness of any item of
compensation to be paid to or for the benefit of the Executive.
If the provisions of Sections 280G and 4999 of the Code (or any
successor provisions) are repealed without succession, then this
Section 4 shall be of no further force or effect.
5. WITHHOLDING TAXES. The Company may withhold from
all payments due to the Executive (or his beneficiary or estate)
hereunder all taxes which, by applicable federal, state, local or
other law, the Company is required to withhold therefrom.
6. REIMBURSEMENT OF EXPENSES. If any contest or
dispute shall arise under this Agreement involving termination of
the Executive's employment with the Company or involving the
failure or refusal of the Company to perform fully in accordance
with the terms hereof, the Company shall reimburse the Executive,
on a current basis, for all legal fees and expenses, if any,
incurred by the Executive in connection with such contest or
dispute, together with interest at a rate equal to the rate of
interest published in The Wall Street Journal under the caption
"Money Rates" as the prime rate, but in no event higher than the
maximum legal rate permissible under applicable law, such
interest to accrue from the date the Company receives the
Executive's statement for such fees and expenses through the date
of payment thereof; PROVIDED, HOWEVER, that in the event the
resolution of any such contest or dispute includes a finding
denying, in total, the Executive's claims in such contest or
-12-
<PAGE>
dispute, the Executive shall be required to reimburse the
Company, over a period of 12 months from the date of such
resolution, for all sums advanced to the Executive pursuant to
this Section 6.
7. OPERATIVE EVENT. Notwithstanding any provision
herein to the contrary, no amounts shall be payable hereunder
unless and until there is a Change in Control at a time when the
Executive is employed by the Company.
8. TERMINATION OF AGREEMENT. (a) This Agreement
shall be effective on the date hereof and shall continue until
terminated by the Company as provided in paragraph (b) of this
Section 8; PROVIDED, HOWEVER, that this Agreement shall terminate
in any event upon the first to occur of (i) the Executive's 70th
birthday, (ii) the Executive's death and (iii) termination of the
Executive's employment with the Company prior to a Change in
Control.
(b) The Company shall have the right prior to a Change
in Control, in its sole discretion, pursuant to action by the
Board, to approve the termination of this Agreement, which
termination shall not become effective until the date fixed by
the Board for such termination, which date shall be at least 120
days after notice thereof is given by the Company to the
Executive in accordance with Section 11; PROVIDED, HOWEVER, that
no such action shall be taken by the Board during any period of
time when the Board has knowledge that any person has taken steps
reasonably calculated to effect a Change in Control until, in the
opinion of the Board, such person has abandoned or terminated its
efforts to effect a Change in Control; and PROVIDED FURTHER, that
in no event shall this Agreement be terminated in the event of a
Change in Control.
9. SCOPE OF AGREEMENT. Nothing in this Agreement
shall be deemed to entitle the Executive to continued employment
with the Company or its subsidiaries, and if the Executive's
employment with the Company shall terminate prior to a Change in
Control, then the Executive shall have no further rights under
this Agreement; PROVIDED, HOWEVER, that any termination of the
Executive's employment following a Change in Control shall be
subject to all of the provisions of this Agreement.
10. SUCCESSORS; BINDING AGREEMENT. (a) This
Agreement shall not be terminated by any merger or consolidation
of the Company whereby the Company is or is not the surviving or
resulting corporation or as a result of any transfer of all or
substantially all of the assets of the Company. In the event of
any such merger, consolidation or transfer of assets, the
provisions of this Agreement shall be binding upon the surviving
or resulting corporation or the person or entity to which such
assets are transferred.
-13-
<PAGE>
(b) The Company agrees that concurrently with any
merger, consolidation or transfer of assets referred to in
paragraph (a) of this Section 10, it will cause any successor or
transferee unconditionally to assume, by written instrument
delivered to the Executive (or his beneficiary or estate), all of
the obligations of the Company hereunder. Failure of the Company
to obtain such assumption prior to the effectiveness of any such
merger, consolidation or transfer of assets shall be a breach of
this Agreement and shall entitle the Executive to compensation
and other benefits from the Company in the same amount and on the
same terms as the Executive would be entitled hereunder if the
Executive's employment were terminated following a Change in
Control other than by reason of a Nonqualifying Termination. For
purposes of implementing the foregoing, the date on which any
such merger, consolidation or transfer becomes effective shall be
deemed the Date of Termination.
(c) This Agreement shall inure to the benefit of and
be enforceable by the Executive's personal or legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees. If the Executive shall die
while any amounts would be payable to the Executive hereunder had
the Executive continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the
terms of this Agreement to such person or persons appointed in
writing by the Executive to receive such amounts or, if no person
is so appointed, to the Executive's estate.
11. NOTICE. (a) For purposes of this Agreement, all
notices and other communications required or permitted hereunder
shall be in writing and shall be deemed to have been duly given
when delivered or five days after deposit in the United States
mail, certified and return receipt requested, postage prepaid,
addressed (1) if to the Executive, to Wayne M. Koprowski, 1131
Peregrine Court, Palatine, Illinois 60067, and if to the Company,
to Joslyn Corporation, 30 South Wacker Drive, Chicago, Illinois
60606, attention President with a copy to the Secretary, or (2)
to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
(b) A written notice of the Executive's Date of
Termination by the Company or the Executive, as the case may be,
to the other, shall (i) indicate the specific termination
provision in this Agreement relied upon, (ii) to the extent
applicable, set forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the
Executive's employment under the provision so indicated and (iii)
specify the termination date (which date shall be not less than
three days after the giving of such notice by the Executive of
termination during the Window Period and which date shall not be
less than 15 days after the giving of such notice under other
-14-
<PAGE>
circumstances). The failure by the Executive or the Company to
set forth in such notice any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive
any right of the Executive or the Company hereunder or preclude
the Executive or the Company from asserting such fact or
circumstance in enforcing the Executive's or the Company's rights
hereunder.
12. FULL SETTLEMENT; RESOLUTION OF DISPUTES. (a) The
Company's obligation to make any payments provided for in this
Agreement and otherwise to perform its obligations hereunder
shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may
have against the Executive or others. In no event shall the
Executive be obligated to seek other employment or take any other
action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement and such
amounts shall not be reduced whether or not the Executive obtains
other employment.
(b) If there shall be any dispute between the Company
and the Executive in the event of any termination of the
Executive's employment, then, unless and until there is a final,
nonappealable judgment by a court of competent jurisdiction
declaring that such termination was for Cause, that the
determination by the Executive of the existence of Good Reason
was not made in good faith, or that the Company is not otherwise
obligated to pay any amount or provide any benefit to the
Executive and his dependents or other beneficiaries, as the case
may be, under paragraphs (a) and (b) of Section 3, the Company
shall pay all amounts, and provide all benefits, to the Executive
and his dependents or other beneficiaries, as the case may be,
that the Company would be required to pay or provide pursuant to
paragraphs (a) and (b) of Section 3 as though such termination
were by the Company without Cause or by the Executive with Good
Reason; PROVIDED, HOWEVER, that the Company shall not be required
to pay any disputed amounts pursuant to this paragraph except
upon receipt of an undertaking by or on behalf of the Executive
to repay all such amounts to which the Executive is ultimately
adjudged by such court not to be entitled.
13. EMPLOYMENT WITH SUBSIDIARIES. Employment with the
Company for purposes of this Agreement shall include employment
with any corporation or other entity in which the Company has a
direct or indirect ownership interest of 50% or more of the total
combined voting power of the then outstanding securities of such
corporation or other entity entitled to vote generally in the
election of directors.
-15-
<PAGE>
14. GOVERNING LAW; VALIDITY. The interpretation,
construction and performance of this Agreement shall be governed
by and construed and enforced in accordance with the internal
laws of the State of Illinois without regard to the principle of
conflicts of laws. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement, which
other provisions shall remain in full force and effect.
15. COUNTERPARTS. This Agreement may be executed in
two or more counterparts, each of which shall be deemed to be an
original and all of which together shall constitute one and the
same instrument.
16. MISCELLANEOUS. No provision of this Agreement may
be modified or waived unless such modification or waiver is
agreed to in writing and signed by the Executive and by a duly
authorized officer of the Company. No waiver by either party
hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision of this Agreement to
be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time. Failure by the Executive or the
Company to insist upon strict compliance with any provision of
this Agreement or to assert any right the Executive or the
Company may have hereunder, including, without limitation, the
right of the Executive to terminate employment for Good Reason,
shall not be deemed to be a waiver of such provision or right or
any other provision or right of this Agreement. The rights of,
and benefits payable to, the Executive, his estate or his
beneficiaries pursuant to this Agreement are in addition to any
rights of, or benefits payable to, the Executive, his estate or
his beneficiaries under any other employee benefit plan or
compensation program of the Company.
-16-
<PAGE>
IN WITNESS WHEREOF, the Company has caused this
Agreement to be executed by a duly authorized officer of the
Company and the Executive has executed this Agreement as of the
day and year first above written.
JOSLYN CORPORATION
By:
---------------------------
Raymond E. Micheletti
President and Chief Executive
Officer
EXECUTIVE
------------------------------
Wayne M. Koprowski
-17-
<PAGE>
EXHIBIT 10.4
SEVERANCE POLICY FOR CORPORATE MANAGERS
THIS SEVERANCE POLICY FOR CORPORATE MANAGERS has been
adopted by the Board (as defined in Section 1) as of the 16th day
of September, 1994.
The Board has determined that it is in the best
interests of the Company (as defined in Section 1) and its
shareholders to secure the continued services of the Executives
(as defined in Section 1) and to ensure their continued
dedication and objectivity in the event of any threat or
occurrence of, or negotiation or other action that could lead to,
or create the possibility of, a Change in Control (as defined in
Section 1) of the Company, without concern as to whether the
Executives might be hindered or distracted by personal
uncertainties and risks created by any such possible Change in
Control, and to encourage the Executives' full attention and
dedication to the Company.
1. DEFINITIONS. As used in this Severance Policy,
the following terms shall have the respective meanings set forth
below:
(a) "Board" means the Board of Directors of the
Company.
(b) "Bonus Plan" means the Executive Management
Incentive Plan of Joslyn Corporation, or any plan of an
affiliated company of the Company intended to provide similar
benefits, or any of their successor plans.
(c) "Cause" means (1) a material breach by an
Executive of those duties and responsibilities of the Executive
which do not differ in any material respect from the duties and
responsibilities of the Executive during the 90-day period
immediately prior to a Change in Control (other than as a result
of incapacity due to physical or mental illness) which is
demonstrably willful and deliberate on the Executive's part,
which is committed in bad faith or without reasonable belief that
such breach is in the best interests of the Company and which is
not remedied in a reasonable period of time after receipt of
written notice from the Company specifying such breach or (2) the
commission by the Executive of a felony involving moral
turpitude.
<PAGE>
(d) "Change in Control" means:
(1) the acquisition by any individual, entity or group
(a "Person"), including any "person" within the meaning of
Section 13(d)(3) or 14(d)(2) of the Exchange Act (hereinafter
defined), of beneficial ownership within the meaning of Rule 13d-
3 promulgated under the Exchange Act, of 25% or more of either
(i) the then outstanding common shares of the Company (the
"Outstanding Company Common Shares") or (ii) the combined voting
power of the then outstanding securities of the Company entitled
to vote generally in the election of directors (the "Outstanding
Company Voting Securities"); PROVIDED, HOWEVER, that the
following acquisitions shall not constitute a Change in Control:
(A) any acquisition directly from the Company (excluding any
acquisition resulting from the exercise of a conversion or
exchange privilege in respect of outstanding convertible or
exchangeable securities), (B) any acquisition by the Company, (C)
any acquisition by an employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company, or (D) any acquisition by any
corporation pursuant to a reorganization, merger or consolidation
involving the Company, if, immediately after such reorganization,
merger or consolidation, each of the conditions described in
clauses (i), (ii) and (iii) of subsection (3) of this Section 1
(d) shall be satisfied; and PROVIDED FURTHER that, for purposes
of clause (B), if any Person (other than the Company or any
employee benefit plan (or related trust) sponsored or maintained
by the Company or any corporation controlled by the Company)
shall become the beneficial owner of 25% or more of the
Outstanding Company Common Shares or 25% or more of the
Outstanding Company Voting Securities by reason of an acquisition
by the Company and such Person shall, after such acquisition by
the Company, become the beneficial owner of any additional shares
of the Outstanding Company Common Shares or any additional
Outstanding Voting Securities and such beneficial ownership is
publicly announced, such additional beneficial ownership shall
constitute a Change in Control;
(2) individuals who, as of the date hereof, constitute
the Board (the "Incumbent Board") cease for any reason to
constitute at least a majority of such Board; PROVIDED, HOWEVER,
that any individual who becomes a director of the Company
subsequent to the date hereof whose election, or nomination for
election by the Company's shareholders, was approved by the vote
of at least a majority of the directors then comprising the
Incumbent Board shall be deemed to have been a member of the
Incumbent Board; and PROVIDED FURTHER, that no individual who was
initially elected as a director of the Company as a result of an
actual or threatened election contest, as such terms are used in
Rule 14a-11 of Regulation 14A promulgated under the Exchange Act,
or any other actual or threatened solicitation of proxies or
consents by or on behalf of any Person other than the Board shall
be deemed to have been a member of the Incumbent Board;
-2-
<PAGE>
(3) approval by the shareholders of the Company of a
reorganization, merger or consolidation unless, in any such case,
immediately after such reorganization, merger or consolidation,
(i) more than 60% of the then outstanding shares of common stock
of the corporation resulting from such reorganization, merger or
consolidation and more than 60% of the combined voting power of
the then outstanding securities of such corporation entitled to
vote generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals or entities who were the beneficial owners,
respectively, of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities immediately prior to such
reorganization, merger or consolidation and in substantially the
same proportions relative to each other as their ownership,
immediately prior to such reorganization, merger or
consolidation, of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities, as the case may be, (ii)
no Person (other than the Company, any employee benefit plan (or
related trust) sponsored or maintained by the Company or the
corporation resulting from such reorganization, merger or
consolidation (or any corporation controlled by the Company) and
any Person which beneficially owned, immediately prior to such
reorganization, merger or consolidation, directly or indirectly,
25% or more of the Outstanding Company Common Shares or the
Outstanding Company Voting Securities, as the case may be)
beneficially owns, directly or indirectly, 25% or more of the
then outstanding shares of common stock of such corporation or
25% or more of the combined voting power of the then outstanding
securities of such corporation entitled to vote generally in the
election of directors and (iii) at least a majority of the
members of the board of directors of the corporation resulting
from such reorganization, merger or consolidation were members of
the Incumbent Board at the time of the execution of the initial
agreement or action of the Board providing for such
reorganization, merger or consolidation; or
(4) approval by the shareholders of the Company of (i)
a plan of complete liquidation or dissolution of the Company or
(ii) the sale or other disposition of all or substantially all of
the assets of the Company other than to a corporation with
respect to which, immediately after such sale or other
disposition, (A) more than 60% of the then outstanding shares of
common stock thereof and more than 60% of the combined voting
power of the then outstanding securities thereof entitled to vote
generally in the election of directors is then beneficially
owned, directly or indirectly, by all or substantially all of the
individuals and entities who were the beneficial owners,
respectively, of the Outstanding Company Common Shares and the
Outstanding Company Voting Securities immediately prior to such
sale or other disposition and in substantially the same
proportions relative to each other as their ownership,
immediately prior to such sale or other disposition, of the
Outstanding Company Common Shares and the Outstanding Company
-3-
<PAGE>
Voting Securities, as the case may be, (B) no Person (other than
the Company, any employee benefit plan (or related trust)
sponsored or maintained by the Company or such corporation (or
any corporation controlled by the Company) and any Person which
beneficially owned, immediately prior to such sale or other
disposition, directly or indirectly, 25% or more of the
Outstanding Company Common Shares or the Outstanding Company
Voting Securities, as the case may be) beneficially owns,
directly or indirectly, 25% or more of the then outstanding
shares of common stock thereof or 25% or more of the combined
voting power of the then outstanding securities thereof entitled
to vote generally in the election of directors and (C) at least a
majority of the members of the board of directors thereof were
members of the Incumbent Board at the time of the execution of
the initial agreement or action of the Board providing for such
sale or other disposition.
(e) "Code" means the Internal Revenue Code of 1986, as
amended.
(f) "Company" means Joslyn Corporation, an Illinois
corporation.
(g) "Date of Termination" means (1) the effective date
on which an Executive's employment by the Company terminates as
specified in a prior written notice by the Company or the
Executive, as the case may be, to the other or (2) if an
Executive's employment by the Company terminates by reason of
death, the date of death of the Executive.
(h) "Exchange Act" means the Securities Exchange Act
of 1934, as amended.
(i) "Executives" means the persons whose names are
listed on Schedule 1 hereto.
(j) "General Managers" means the persons whose names
are set forth under the heading "General Managers" on Schedule 1
hereto.
(k) "Good Reason" means, without an Executive's
express written consent, the occurrence of any of the following
events after a Change in Control:
(1) a reduction by the Company in an Executive's rate
of annual base salary as in effect immediately prior to such
Change in Control or as the same may be increased from time to
time thereafter;
(2) any requirement of the Company that an Executive
have a regular work site located more than 50 miles from the
regular work site of such Executive at the time of the Change in
Control;
-4-
<PAGE>
(3) the failure of the Company to (i) continue in
effect any employee benefit plan or compensation plan in which an
Executive is participating immediately prior to such Change in
Control, unless the Executive is permitted to participate in
other plans providing the Executive with substantially comparable
benefits, or the taking of any action by the Company which would
adversely affect the Executive's participation in or materially
reduce the Executive's benefits under any such plan, (ii) provide
the Executive and the Executive's dependents welfare benefits
(including, without limitation, medical, prescription, dental,
disability, salary continuance, employee life, group life,
accidental death and travel accident insurance plans and
programs) in accordance with the most favorable plans, practices,
programs and policies of the Company or the Subsidiary, whichever
is the employer of the Executive, in effect for the Executive
immediately prior to such Change in Control or, if more favorable
to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company or the
Subsidiary, whichever is the employer of the Executive, (iii)
provide fringe benefits in accordance with the most favorable
plans, practices, programs and policies of the Company or the
Subsidiary, whichever is the employer of the Executive, in effect
for the Executive immediately prior to such Change in Control or,
if more favorable to the Executive, as in effect generally at any
time thereafter with respect to other peer executives of the
Company or the Subsidiary, whichever is the employer of the
Executive, (iv) provide the Executive with paid vacation in
accordance with the most favorable plans, policies, programs and
practices of the Company or the Subsidiary, whichever is the
employer of the Executive, as in effect for the Executive
immediately prior to such Change in Control or, if more favorable
to the Executive, as in effect generally at any time thereafter
with respect to other peer executives of the Company or the
Subsidiary, whichever is the employer of the Executive or (v)
reimburse the Executive promptly for all reasonable employment
expenses incurred by the Executive in accordance with the most
favorable policies, practices and procedures of the Company or
the Subsidiary, whichever is the employer of the Executive, in
effect for the Executive immediately prior to such Change in
Control, or if more favorable to the Executive, as in effect
generally at any time thereafter with respect to other peer
executives of the Company or the Subsidiary, whichever is the
employer of the Executive;
(4) any removal or involuntary termination of the
Executive from the Company otherwise than as expressly permitted
by this Severance Policy; or
(5) the failure of the Company to obtain the
assumption agreement from any successor as contemplated in
Section 10(b).
-5-
<PAGE>
For purposes of this Severance Policy, references to
the Company in the definition of Good Reason shall be deemed to
be references to the Company or the Subsidiary (as such term is
defined in Section 1).
For purposes of this Severance Policy, any good faith
determination of Good Reason made by an Executive shall be
conclusive; PROVIDED, HOWEVER, that an isolated, insubstantial
and inadvertent action taken in good faith and which is remedied
by the Company promptly after receipt of notice thereof given by
the Executive shall not constitute Good Reason.
(l) "Nonqualifying Termination" means a termination of
an Executive's employment with the Company or the Subsidiary (1)
by the Company or the Subsidiary for Cause, (2) by the Executive
for any reason other than a Good Reason, (3) as a result of the
Executive's death, (4) by the Company or the Subsidiary due to
the Executive's absence from the Executive's duties with the
Company or the Subsidiary on a full-time basis for at least 180
consecutive days as a result of the Executive's incapacity due to
physical or mental illness or (5) in connection with a transfer
of the Executive from the Company or the Subsidiary to the
Company, a successor to the Company, or a subsidiary of either,
solely for the purpose of payroll administration.
(m) "Parity Plan" means the Parity Compensation Plan
of Joslyn Corporation, or any plan of an affiliated company of
the Company intended to provide similar benefits, or any of their
successor plans.
(n) "Profit Sharing Plan" means the Employees' Savings
and Profit Sharing Plan of Joslyn Corporation, or any plan of an
affiliated company of the Company intended to provide similar
benefits, or any of their successor plans.
(o) "Service Factor" means, for any Executive, that
number equal to the lesser of (i) 52 and (ii) the sum of 26 and
two times the number of years of service (such number to be
rounded to two decimal places) such Executive has with the
Company.
(p) "Subsidiary" means, with respect to an Executive
employed by a subsidiary of the Company, such subsidiary.
(q) "Termination Period" means the period of time
beginning with a Change in Control and ending on the earliest to
occur of (1) an Executive's 70th birthday, (2) an Executive's
death, and (3) two years following such Change in Control.
(r) "Termination Year Bonus" shall have the meaning
set forth in Section 3(a)(1).
-6-
<PAGE>
(s) "Termination Year Parity Amount" shall have the
meaning set forth in Section 3(a)(1).
(t) "Termination Year Profit Sharing Amount" shall
have the meaning set forth in Section 3(a)(1).
2. OBLIGATIONS OF EXECUTIVES. The Company's
obligations to each Executive pursuant to this Severance Policy
are based upon the condition that in the event any person or
group attempts a Change in Control, the Executive shall not
voluntarily leave the employ of the Company without Good Reason
(a) until such attempted Change in Control terminates or (b) if a
Change in Control shall occur, until 90 days following such
Change in Control. For purposes of the foregoing subsection (a),
Good Reason shall be determined as if a Change in Control had
occurred when such attempted Change in Control became known to
the Board.
3. PAYMENTS UPON TERMINATION OF EMPLOYMENT. Subject
to the provisions of Section 4,
(a) If during the Termination Period the employment of
an Executive shall terminate, other than by reason of a
Nonqualifying Termination, then the Company shall pay to the
Executive (or the Executive's beneficiary or estate), as
compensation for services rendered to the Company or the
Subsidiary, as the case may be:
(1) within 30 days following the Date of Termination,
a lump-sum cash amount equal to the sum of:
(i) the Executive's full annual base salary from the
Company and its affiliated companies through the Date of
Termination, to the extent not theretofore paid,
(ii) the Executive's Award Payment at 100% of Plan
Accomplishment level under the Bonus Plan (one-half maximum
potential award), for the full fiscal year in which the Date of
Termination occurs, calculated in accordance with the terms of
the Bonus Plan as in effect immediately prior to the Change in
Control or as in effect on the Date of Termination, whichever
results in a greater amount, as if a Change in Control had not
occurred, the Executive were employed by the Company at the end
of the such fiscal year and all other conditions necessary for
the payment by the Company of such bonus were satisfied (the
"Termination Year Bonus"), multiplied by a fraction, the
numerator of which is the number of days in the fiscal year in
which the Date of Termination occurs through the Date of
Termination and the denominator of which is 365 or 366, as
applicable, reduced by the amount otherwise payable pursuant to
the terms of the Bonus Plan for such plan year;
-7-
<PAGE>
(iii) the Executive's Parity Compensation payment as
determined under the Parity Plan, for the full fiscal year in
which the Date of Termination occurs, calculated in accordance
with the terms of the Parity Plan as in effect immediately prior
to the Change in Control or as in effect on the Date of
Termination, whichever results in a greater amount, as if a
Change in Control had not occurred, the Executive were employed
by the Company at the end of such fiscal year, the Executive had
received the Termination Year Bonus and all other conditions
necessary for the payment by the Company of such Parity
Compensation payment were satisfied (the "Termination Year Parity
Amount"), multiplied by a fraction, the numerator of which is the
number of days in the fiscal year in which the Date of
Termination occurs through the Date of Termination and the
denominator of which is 365 or 366, as applicable, reduced by the
amount otherwise payable pursuant to the terms of the Parity Plan
for such plan year;
(iv) the maximum Profit Sharing Contribution for the
Executive under the Profit Sharing Plan, for the full fiscal year
in which the Date of Termination occurs, calculated in accordance
with the terms of the Profit Sharing Plan as in effect
immediately prior to the Change in Control or as in effect on the
Date of Termination, whichever results in a greater amount, as if
a Change in Control had not occurred, the Executive were employed
by the Company at the end of such fiscal year, the Executive had
received the Termination Year Bonus and all other conditions
necessary for the payment by the Company of such Profit Sharing
Contribution were satisfied (the "Termination Year Profit Sharing
Amount"), multiplied by a fraction, the numerator of which is the
number of days in the fiscal year in which the Date of
Termination occurs through the Date of Termination and the
denominator of which is 365 or 366, as applicable, reduced by the
amount otherwise allocated to the Executive's account under the
Profit Sharing Plan pursuant to the terms of the Profit Sharing
Plan for such plan year as determined at the Date of Termination;
and
(v) any compensation previously deferred by the
Executive (together with any interest and earnings thereon) and
any accrued vacation pay, in each case to the extent not
theretofore paid; plus
(2) within 30 days following the Date of Termination,
unless such payment date is extended pursuant to Section 4, in
which case such payment date may not be extended beyond 90 days
following the Date of Termination, a lump-sum cash amount in an
amount equal to the product determined by multiplying a fraction,
the numerator of which is the Executive's Service Factor and the
denominator of which is 52, by the sum of (i) the Executive's
highest annual base salary from the Company and its affiliated
companies in effect during the 12-month period prior to the Date
of Termination, (ii) the Executive's full Termination Year Bonus,
-8-
<PAGE>
(iii) the Executive's full Termination Year Parity Amount, and
(iv) the Executive's full Termination Year Profit Sharing Amount;
PROVIDED, HOWEVER, that any amount paid pursuant to this Section
3(a)(2) may be reduced in accordance with the provisions of
Section 4; PROVIDED FURTHER, that in the event there are fewer
than the Executive's Service Factor weeks remaining from the Date
of Termination to the date of the Executive's 70th birthday, the
amount calculated in accordance with this Section 3(a)(2) shall
be reduced by multiplying such amount by a fraction the numerator
of which is the number of weeks so remaining and the denominator
of which is the Executive's Service Factor; and PROVIDED FURTHER,
that, except as otherwise provided in this Severance Policy, any
amount paid pursuant to this Section 3(a)(2) shall be paid in
lieu of any other amount of severance relating to salary or bonus
continuation to be received by the Executive upon termination of
employment of the Executive under any severance plan, employment
agreement, policy or arrangement of the Company applicable to the
Executive, other than amounts to be received by the Executive
upon termination of employment of the Executive under the Bonus
Plan, the Parity Plan or the Profit Sharing Plan.
(b) (1) In addition to the payments to be made
pursuant to paragraph (a) of this Section 3, if on the Date of
Termination the Executive shall not be fully vested in any
employer contributions or earnings thereon made on the
Executive's behalf under the Profit Sharing Plan, the Company
shall pay to the Executive within 30 days following the Date of
Termination a lump sum cash amount equal to the value of the
unvested portion of such employer contributions and earnings;
PROVIDED, HOWEVER, that if any payment pursuant to this Section
3(b)(1) may or would result in such payment being deemed a
transaction which is subject to Section 16(b) of the Exchange
Act, the Company shall make such payment so as to meet the
conditions for an exemption from such Section 16(b) as set forth
in the rules (and interpretive and no-action letters relating
thereto) under Section 16. The value of any such unvested
employer contributions and earnings shall be determined in
accordance with the terms of the Profit Sharing Plan.
(2) For that number of weeks equal to the Executive's
Service Factor, commencing on the Date of Termination, the
Company shall continue to keep in full force and effect all
medical, dental, accident and life insurance plans with respect
to the Executive and the Executive's dependents with the same
level of coverage, upon the same terms and otherwise to the same
extent as such plans shall have been in effect immediately prior
to the Date of Termination. Notwithstanding the foregoing
sentence, if any of the medical, dental, accident or life
insurance plans then in effect generally with respect to other
peer executives of the Company and its affiliated companies would
be more favorable to the Executive, such plan coverage shall be
substituted for the analogous plan coverage provided to the
Executive immediately prior to the Date of Termination, and the
-9-
<PAGE>
Company and the Executive shall share the costs of such plan
coverage in the same proportion as such costs were shared
immediately prior to the Date of Termination. The obligation of
the Company to continue coverage of the Executive and the
Executive's dependents under such plans shall cease at such time
as the Executive and the Executive's dependents obtain comparable
coverage under another plan, including a plan maintained by a new
employer.
(3) If the Executive shall be at least 50 years of age
and the sum of the Executive's age and years of service with the
Company is at least 75 at (i) the termination of medical coverage
provided by Section 3(b)(2) hereof, (ii) the termination of the
severance continuation under the Company's Group Medical coverage
or (iii) the end of any COBRA continuation of Group Medical
coverage, the Company shall provide the Executive with the
ability to elect Group Medical coverage for the Executive and the
Executive's dependents; PROVIDED, that the maximum continuation
period of such coverage shall be until age 65 for the Executive
and any covered spouse, and in accordance with the provisions of
the Company's Group Medical Plan for covered children. The
extended continuation of Group Medical coverage described in the
previous sentence shall be subject to the provisions of the
Company's Group Medical Plan and a required contribution fee
equal to the rate for Early Retiree's under the Company's Retiree
Medical Plan for Plan "A" coverage, or for Plan "B" coverage, the
Early Retiree Rate less the difference between the Plan "A" and
Plan "B" contribution rates for active employees.
(4) The Company shall reimburse the Executive for 90%
of the Executive's expenditures for obtaining outplacement
services, provided that the Company shall have no obligation to
reimburse the Executive in an amount which exceeds 10% of the
Executive's highest annual base salary from the Company and its
affiliated companies in effect during the 12-month period prior
to the Date of Termination.
(c) If during the Termination Period the employment of
an Executive shall terminate by reason of a Nonqualifying
Termination, then the Company shall pay to the Executive within
30 days following the Date of Termination, a lump-sum cash amount
equal to the sum of (1) the Executive's full annual base salary
from the Company through the Date of Termination, to the extent
not theretofore paid and (2) any compensation previously deferred
by the Executive (together with any interest and earnings
thereon) and any accrued vacation pay, in each case to the extent
not theretofore paid.
4. EXCESS PARACHUTE PAYMENTS. (a) Anything in this
Severance Policy to the contrary notwithstanding, in the event it
shall be determined that any payment or distribution by the
Company or its affiliated companies to or for the benefit of an
Executive, whether paid or payable or distributed or
-10-
<PAGE>
distributable pursuant to the terms of this Severance Policy or
otherwise (in the aggregate, "Total Payments"), would constitute
an "excess parachute payment," then Total Payments shall be
reduced to be One Dollar ($1) less than the maximum amount which
may be paid or distributed to or for the benefit of the Executive
without causing the Executive to be subject to the tax imposed by
Section 4999 of the Code (or any successor provision) in respect
of Total Payments or which the Company or its affiliated
companies may pay without loss of deduction under Section 280G(a)
of the Code (or any successor provision) (Total Payments, as so
reduced, the "Adjusted Total Payments"). For purposes of this
Severance Policy, the terms "excess parachute payment" and
"parachute payments" shall have the meanings assigned to them in
Section 280G of the Code (or any successor provision), and such
"parachute payments" shall be valued as provided therein.
Present value for purposes of this Severance Policy shall be
calculated in accordance with Section 1274(b)(2) of the Code (or
any successor provision).
(b) Within 60 days following the Date of Termination
or notice by the Company to an Executive of its reasonable belief
that there is a payment or distribution due to or for the benefit
of the Executive which would result in an excess parachute
payment, the Executive and the Company, at the Company's expense,
shall obtain the opinion (which need not be unqualified) of
nationally recognized tax counsel selected by the Company's
independent auditors and acceptable to the Executive in the
Executive's sole discretion (which may be regular outside counsel
to the Company), which opinion sets forth (A) the amount of the
Executive's Base Period Income, (B) the amount and present value
of Total Payments and (C) the amount and present value of any
excess parachute payments determined without regard to the
limitations of this Section 4. As used in this Section 4(b), the
term "Base Period Income" means the Executive's "annualized
includible compensation for the base period" as defined in
Section 280G(d)(1) of the Code (or any successor provision). For
purposes of such opinion, the value of any noncash benefits or
any deferred payment or benefit included in Total Payments shall
be determined by the Company's independent auditors at the
Company's expense in accordance with the principles of Sections
280G(d)(3) and (4) of the Code (or any successor provisions),
which determination shall be evidenced in a certificate of such
auditors addressed to the Company and the Executive. Such
opinion shall be addressed to the Company and the Executive and
shall be binding upon the Company and the Executive. If such
opinion concludes that any Total Payments constitute an excess
parachute payment, the amount payable hereunder or any other
payment or distribution determined by such counsel in such
opinion to be includible in Total Payments shall be reduced or
eliminated as specified by the Executive in writing delivered to
the Company within 30 days of the Executive's receipt of such
opinion or, if the Executive fails to so notify the Company, then
as the Company shall reasonably determine, so that under the
-11-
<PAGE>
bases of calculations set forth in such opinion the Total
Payments shall be the Adjusted Total Payments. If such legal
counsel so requests in connection with the opinion required by
this Section 4, the Executive and the Company shall obtain, at
the Company's expense, and such legal counsel may rely on in
providing the opinion, the advice of a firm of recognized
executive compensation consultants as to the reasonableness of
any item of compensation to be paid to or for the benefit of the
Executive. If the provisions of Sections 280G and 4999 of the
Code (or any successor provisions) are repealed without
succession, then this Section 4 shall be of no further force or
effect.
5. WITHHOLDING TAXES. The Company may withhold from
all payments due to an Executive (or an Executive's beneficiary
or estate) hereunder all taxes which, by applicable federal,
state, local or other law, the Company is required to withhold
therefrom.
6. Reimbursement of Expenses. If any contest or
dispute shall arise under this Severance Policy involving
termination of an Executive's employment with the Company or
involving the failure or refusal of the Company to perform fully
in accordance with the terms hereof, the Company shall reimburse
the Executive, on a current basis, for all legal fees and
expenses, if any, incurred by the Executive in connection with
such contest or dispute, together with interest at a rate equal
to the rate of interest published in The Wall Street Journal
under the caption "Money Rates" as the prime rate, but in no
event higher than the maximum legal rate permissible under
applicable law, such interest to accrue from the date the Company
receives the Executive's statement for such fees and expenses
through the date of payment thereof; PROVIDED, HOWEVER, that in
the event the resolution of any such contest or dispute includes
a finding denying, in total, the Executive's claims in such
contest or dispute, the Executive shall be required to reimburse
the Company, over a period of 12 months from the date of such
resolution, for all sums advanced to the Executive pursuant to
this Section 6.
7. OPERATIVE EVENT. Notwithstanding any provision
herein to the contrary, no amounts shall be payable hereunder
unless and until there is a Change in Control at a time when the
Executive is employed by the Company.
8. TERMINATION OF SEVERANCE POLICY. (a) This
Severance Policy shall be effective on the date hereof and shall
continue until terminated by the Company as provided in paragraph
(b) of this Section 8; PROVIDED, HOWEVER, that this Severance
Policy shall terminate in any event with respect to each
Executive upon the first to occur of (i) the Executive's 70th
birthday, (ii) the Executive's death and (iii) termination of the
-12-
<PAGE>
Executive's employment with the Company prior to a Change in
Control.
(b) The Company shall have the right prior to a Change
in Control, in its sole discretion, pursuant to action by the
Board, to approve the termination of this Severance Policy with
respect to any or all of the Executives, which termination shall
not become effective until the date fixed by the Board for such
termination, which date shall be at least 120 days after notice
thereof is given by the Company to the Executive with respect to
whom this Severance Policy is being terminated; PROVIDED,
HOWEVER, that no such action shall be taken by the Board during
any period of time when the Board has knowledge that any person
has taken steps reasonably calculated to effect a Change in
Control until, in the opinion of the Board, such person has
abandoned or terminated its efforts to effect a Change in
Control; and PROVIDED FURTHER, that in no event shall this
Severance Policy be terminated in the event of a Change in
Control.
9. SCOPE OF SEVERANCE POLICY. Nothing in this
Severance Policy shall be deemed to entitle any Executive to
continued employment with the Company or its subsidiaries, and if
any Executive's employment with the Company shall terminate prior
to a Change in Control, then the Executive shall have no further
rights hereunder; PROVIDED, HOWEVER, that any termination of an
Executive's employment following a Change in Control shall be
subject to all of the provisions of this Severance Policy.
10. SUCCESSORS. (a) This Severance Policy shall not
be terminated by any merger or consolidation of the Company
whereby the Company is or is not the surviving or resulting
corporation or as a result of any transfer of all or
substantially all of the assets of the Company. In the event of
any such merger, consolidation or transfer of assets, the
provisions of this Severance Policy shall be binding upon the
surviving or resulting corporation or the person or entity to
which such assets are transferred.
(b) The Company agrees that concurrently with any
merger, consolidation or transfer of assets referred to in
paragraph (a) of this Section 10, it will cause any successor or
transferee unconditionally to assume, by written instrument
delivered to the Executive (or the Executive's beneficiary or
estate), all of the obligations of the Company hereunder.
Failure of the Company to obtain such assumption prior to the
effectiveness of any such merger, consolidation or transfer of
assets shall entitle the Executive to compensation and other
benefits from the Company in the same amount and on the same
terms as the Executive would be entitled hereunder if the
Executive's employment were terminated following a Change in
Control other than by reason of a Nonqualifying Termination. For
purposes of implementing the foregoing, the date on which any
-13-
<PAGE>
such merger, consolidation or transfer becomes effective shall be
deemed the Date of Termination.
(c) This Severance Policy shall be enforceable by each
Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. If an Executive shall die while any amounts would be
payable to the Executive hereunder had the Executive continued to
live, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Severance Policy to
such person or persons appointed in writing by the Executive to
receive such amounts or, if no person is so appointed, to the
Executive's estate.
11. FULL SETTLEMENT; RESOLUTION OF DISPUTES. (a) The
Company's obligation to make any payments provided for in this
Severance Policy and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim, right or action which the
Company may have against an Executive or others. In no event
shall an Executive be obligated to seek other employment or take
any other action by way of mitigation of the amounts payable to
the Executive under any of the provisions of this Severance
Policy and such amounts shall not be reduced whether or not the
Executive obtains other employment.
(b) If there shall be any dispute between the Company
and an Executive in the event of any termination of the
Executive's employment, then, unless and until there is a final,
nonappealable judgment by a court of competent jurisdiction
declaring that such termination was for Cause, that the
determination by the Executive of the existence of Good Reason
was not made in good faith, or that the Company is not otherwise
obligated to pay any amount or provide any benefit to the
Executive and the Executive's dependents or other beneficiaries,
as the case may be, under paragraphs (a) and (b) of Section 3,
the Company shall pay all amounts, and provide all benefits, to
the Executive and the Executive's dependents or other
beneficiaries, as the case may be, that the Company would be
required to pay or provide pursuant to paragraphs (a) and (b) of
Section 3 as though such termination were by the Company without
Cause or by the Executive with Good Reason; PROVIDED, HOWEVER,
that the Company shall not be required to pay any disputed
amounts pursuant to this paragraph except upon receipt of an
undertaking by or on behalf of the Executive to repay all such
amounts to which the Executive is ultimately adjudged by such
court not to be entitled.
-14-
<PAGE>
12. EMPLOYMENT WITH SUBSIDIARIES. Employment with the
Company for purposes of this Severance Policy shall include
employment with any corporation or other entity in which the
Company has a direct or indirect ownership interest of 50% or
more of the total combined voting power of the then outstanding
securities of such corporation or other entity entitled to vote
generally in the election of directors.
-15-
<PAGE>
SCHEDULE 1
EXECUTIVES
Raymond J. Bjorseth
Robert A. Ginos
Wayne O. Hall
Lewis M. Jacobson
William J. Rotenberry
GENERAL MANAGERS
James E. Berkeland
James F. Domo
Daniel Dumont
Robert J. Lindberg
Gregory Pacton
Paul E. Prutzman
Robert J. Snyder
Thomas F. Stabosz
S. Keith Swanson
Steven L. Thunander
-16-
<PAGE>
EXHIBIT 8
July 28, 1995
Danaher Corporation
1250, 24th Street, N.W.
Suite 800
Washington, D.C. 20037
Attention: Mr. George M. Sherman
Gentlemen:
You have requested information regarding Joslyn
Corporation (the "Company") for the purposes of evaluating a
possible negotiated acquisition by you of the Company. In your
July 7, 1995 letter you stated "we would like to conduct a brief,
highly-focused due diligence investigation in order to explore
whether a higher [than $32 per share] price could be justified."
It is understood and agreed that this agreement creates no
obligation to enter into any Transaction or any agreement
relating to a Transaction. To induce the Company to furnish
information to you, you hereby agree as follows:
1. As used herein:
"Act" means the Securities Exchange Act of 1934, as
amended.
"Affiliate" means any Person that (i) directly or
indirectly controls you, (ii) directly or indirectly is
controlled by you or (iii) is under direct or indirect
common control with you;
"Information" means information regarding the Company
or any of its subsidiaries or their respective assets or
businesses which is furnished to you, directly or
indirectly, by the Company or its representatives;
"Person" shall have the meaning contained Section
3(a)(9) of the Act; and
<PAGE>
"Restricted Period" means the six-month period
commencing on the date hereof.
"Third Party Acquisition Proposal" shall mean a
proposal or offer relating to any merger, acquisition,
consolidation or similar transaction involving, or any
purchase of all or substantially all of the assets or more
than 50% of the common stock of, the Company.
2. Except as provided in paragraphs 7 and 8, all
Information will be kept confidential by you, except that you may
disclose or make available Information (i) to your directors,
officers and employees and to representatives of your advisors
and lenders and their advisors for the exclusive purpose of
assisting you in the evaluation of a possible Transaction, all of
whom shall be specifically informed by you or your representa-
tives of the confidential character of such Information and that
by receiving such information they are agreeing to be bound by
the terms of this agreement relating to the confidential treat-
ment of such Information, (ii) in a tender offer statement on
Schedule 14D-1, or in any amendment thereto, relating to a tender
offer to purchase common stock of the Company (and any stock
purchase rights) (a "Tender Offer"), including in the related
offer to purchase, and in proxy materials relating to matters
incidental to the Tender Offer or a subsequent merger, if and to
the extent that you, upon advice of your counsel, are required to
make such disclosure pursuant to the Act or the rules thereunder,
or (iii) as otherwise required, upon advice of your counsel, by
applicable United States law. You will not use, or permit any of
your representatives to use, any of the Information for any pur-
pose other than the evaluation of a possible Transaction, and,
except as may be required by law, you will not make any
Information available to any Person for any other purpose
whatsoever.
3. You hereby acknowledge that you are aware (and that
prior to the disclosure of any Information to any Person pursuant
to paragraph 2 such Person will be advised) that the United
States securities laws prohibit any Person who has material non-
public information about a company from purchasing or selling
securities of such company or from communicating such information
to any other Person under circumstances in which it is reasonably
foreseeable that such Person is likely to purchase or sell such
securities.
4. Except as provided in paragraph 5 hereof, unless
specifically requested in writing in advance by the Company's
Board of Directors, you will not at any time during the
Restricted Period (and you will not at any time during the
Restricted Period assist or encourage others to):
(a) acquire or agree, offer, seek or propose to
acquire (or directly or indirectly request permission
-2-
<PAGE>
to do so), directly or indirectly, alone or in concert
with any other Person, by purchase or otherwise, any
ownership, including, but not limited to, beneficial
ownership as defined in Rule 13d-3 under the Act, of
any of the businesses, securities of the Company or any
subsidiary thereof, or any rights or options to acquire
such ownership (including from any third party), or any
material portion of the assets of the Company and its
subsidiaries, taken as a whole;
(b) solicit proxies (as such terms are defined in
Rule 14a-1 under the Act), whether or not such
solicitation is exempt under Rule 14a-2 under the Act,
with respect to any matter from holders of any shares
of common stock of the Company ("Stock") or any
securities convertible into or exchangeable for or
exercisable (whether currently or upon the occurrence
of any contingency) for the purchase of Stock (the
Stock and such other securities being hereinafter
collectively called the "Voting Securities");
(c) initiate, or induce or attempt to induce any other
Person, entity or group (as defined in Section 13(d)(3)
of the Act) to initiate, any stockholder proposal or
tender offer for any securities of the Company or any
subsidiary thereof, any change of control of the
Company or any subsidiary thereof or the convening of a
stockholders' meeting of the Company or any subsidiary
thereof;
(d) otherwise seek or propose (or request permission
to propose) to influence or control the management or
policies of the Company or any subsidiary thereof;
(e) enter into any discussions, negotiations,
arrangements or understandings with any other Person
with respect to any matter described in the foregoing
subparagraphs (a) through (d);
(f) request the Company (or its directors, officers,
employees or agents), directly or indirectly, to amend
or waive any provision of this paragraph 4;
(g) take any action inconsistent with any of the
foregoing subparagraphs (a) through (f); or
(h) take any action with respect to any of the matters
described in this paragraph 4 that requires public
disclosure.
5. (a) Notwithstanding the restrictions of paragraph 4,
you (i) may engage in discussions and negotiations with the
Company in respect of a Transaction and (ii) may pursue your
-3-
<PAGE>
current $32 per share cash tender offer and take any and all
actions (including without any limitation any communications to
shareholders, proxy solicitations, calling of stockholder
meetings, and litigation, and any actions related to the
financing of an Offer or follow-on merger) in support of any such
offer (or any other offer); provided, however, that it is agreed
that during the pendency of your review of Information and any
related discussions and negotiations in respect of a Transaction,
(i) all proceedings in the litigation captioned "Danaher
Corporation, et al. v. Joslyn Corporation, et al.," (Case No. 95
C 4245) pending in U.S. District Court for the Northern District
of Illinois shall be stayed and no new litigation shall be
commenced by either party and (ii) all efforts by you to seek a
special meeting of the Company's shareholders and to solicit
proxies or written consents shall be stayed. For purposes of the
proviso in the preceding sentence, the termination of your review
of Information and of any related discussions and negotiations in
respect of a Transaction shall be deemed to be effective 24 hours
after either the Company or you shall have given written notice
(which may be by telecopy) to such effect to the other.
(b) The restrictions of paragraph 4 shall
terminate in the event the Company's Board of Directors shall
approve or recommend, or resolve to approve or recommend, any
Third Party Acquisition Proposal, or if there is a Third Party
Acquisition Proposal that is a Tender Offer and the Company's
Board of Directors, within 10 days following commencement of the
Tender Offer, shall not have recommended to shareholders that
they reject the Tender Offer.
6. Each of the Company and you may disclose, to the
extent required by applicable law, the fact that you are engaged
in discussions with the Company regarding a Transaction, the fact
that the Information has been made available to you and any other
aspect of this agreement.
7. In the event that you are requested in any
proceeding to disclose any Information received by you, you will
give us prompt notice of such request so that we may seek an
appropriate protective order. If in the absence of a protective
order you are nonetheless compelled to disclose any such
Information or matter, you may disclose such Information or
matter without liability hereunder, provided that you give us
written notice of the Information or matter to be disclosed as
far in advance of its disclosure as is practicable and use your
best efforts to obtain assurances that confidential treatment
will be accorded to such Information or matter.
8. The restrictions with respect to Information set
forth in paragraph 2 shall not apply to any Information furnished
to you by the Company or its representatives which (i) is on the
date hereof or hereafter becomes generally available to the
public other than as a result of a disclosure, directly or
-4-
<PAGE>
indirectly, by you or your representatives or (ii) was available
to you on a nonconfidential basis prior to its disclosure to you
by the Company or its representatives or becomes available to you
on a nonconfidential basis, in each case from a source other than
the Company or its representatives, which source was not itself
known to you to be bound by a confidentiality agreement with the
Company or its representatives and had not received such
information, directly or indirectly, from a Person known to you
to be so bound.
9. Except as may result from a definitive agreement
between the parties hereto with respect to a Transaction, the
Company does not make any representation or warranty as to the
accuracy or completeness of the Information provided to you, and
neither the Company nor any of its representatives shall have any
liability resulting from the use of the Information by you or any
of your representatives.
10. Upon our request at any time, you will promptly
redeliver to us all copies of documents containing Information
and will promptly destroy all memoranda, notes and other writings
prepared by you or by any Person referred to in paragraph 2 based
on such Information.
11. During the two-year period following the date
hereof, you will not (and will not assist or encourage others to)
solicit the services, as employee, consultant or otherwise, of
any employee of the Company; provided, that nothing in this
agreement shall be deemed to prohibit general solicitations of
employment of persons in your ordinary course of business not
directed specifically toward employees of the Company.
12. In the event that, during the term of this
agreement, the Company shall enter into any similar
confidentiality agreement or standstill agreement with a third
party, or shall modify the terms of any existing such agreement,
and such agreement as entered into or modified shall contain
provisions which are less restrictive than the provisions of this
agreement, then this agreement shall be amended automatically,
without any further action by the parties hereto, to reflect such
less restrictive terms.
13. You shall cause each of your Affiliates to comply
with the terms of paragraphs 2, 3, 4, 5, 6, 7, 8, 10 and 11
(construing such paragraphs for such purposes to refer also to
such Affiliates in each instance where there is a reference to
you).
14. You acknowledge that irreparable damage would
occur to the Company in the event any of the provisions of this
agreement were not performed in accordance with their specific
terms or were otherwise breached. Accordingly, the Company shall
be entitled to an injunction or injunctions to prevent breaches
-5-
<PAGE>
of the provisions of this agreement and to enforce specifically
the terms and provisions hereof in any court of competent
jurisdiction in the United States of America or any state
thereof, in addition to any other remedy to which the Company may
be entitled at law or in equity.
15. If any term or provision of this agreement or any
application hereof shall be invalid or unenforceable, the
remainder of this agreement and any other application of such
term or provision shall not be affected thereby.
16. This agreement may be executed in any number of
counterparts, each of which when so executed and delivered shall
be an original, but such counterparts shall constitute one and
the same instrument.
17. This agreement contains the entire understanding
of the parties hereto with respect to the matters covered hereby
and may be amended only by an agreement in writing executed by
the Company and you.
18. This agreement shall be binding upon, inure to the
benefit of and be enforceable by our respective successors and
assigns.
19. This agreement shall be governed by and construed
in accordance with the internal laws (as opposed to conflict of
law provisions) of the State of Illinois.
20. This agreement shall terminate on July 31, 1997.
-6-
<PAGE>
If the foregoing correctly sets forth our agreement as
to the matters set forth herein, please confirm our agreement by
executing and returning a copy of this agreement to the
undersigned.
Very truly yours,
JOSLYN CORPORATION
By: /s/ L.G. Wolski
---------------------
L.G. Wolski
Chief Executive Officer
The foregoing terms are agreed to:
DANAHER CORPORATION
By: /s/ C.S. Brannan
---------------------
C.S. Brannan
Vice President
-7-
<PAGE>
EXHIBIT 9
AMENDMENT TO RIGHTS AGREEMENT
AMENDMENT, dated as of September 2, 1994 (the
"Amendment"), to the Rights Agreement, dated as of February 10,
1988 (the "Rights Agreement"), between Joslyn Corporation, an
Illinois corporation (the "Corporation"), and The First National
Bank of Chicago, a national banking corporation (the "Rights
Agent").
Pursuant to and in compliance with Section 26 of the
Rights Agreement, the Corporation and the Rights Agent desire to
amend the Rights Agreement as set forth in this Amendment.
NOW, THEREFORE, in consideration of the premises and
the mutual agreements set forth herein and in the Rights
Agreement, the parties hereto hereby agree as follows:
1. Section 1(a) of the Rights Agreement is hereby
amended by deleting such Section in its entirety and by adding
the following in lieu thereof:
"(a) "Acquiring Person" shall mean any
Person who or which, together with all
Affiliates and Associates of such Person, (i)
was the Beneficial Owner, as of September 2,
1994, of 15% or more of the shares of Common
Stock of the Corporation then outstanding (an
"Existing Holder") and thereafter shall
become the Beneficial Owner of a percentage
of the shares of Common Stock of the
Corporation then outstanding equal to or
<PAGE>
greater than the percentage of shares of
Common Stock of the Corporation beneficially
owned by such Existing Holder, together with
all Affiliates and Associates of such
Existing Holder, as of September 2, 1994,
plus 1% (the "Increased Percentage") or (ii)
is not an Existing Holder but is or becomes
the Beneficial Owner of 15% or more of the
shares of Common Stock of the Corporation
then outstanding, but in any case shall not
include the Corporation, any Subsidiary of,
or other Person controlled by, the
Corporation, any employee benefit plan of the
Corporation or any Subsidiary of the
Corporation, or any Person or entity
organized, appointed or established by the
Corporation for or pursuant to the terms of
any such plan. Notwithstanding the
foregoing, no Person shall become an
"Acquiring Person" as the result of an
acquisition of shares of Common Stock by the
Corporation which, by reducing the number of
shares of Common Stock of the Corporation
outstanding, increases the proportionate
number of shares of Common Stock beneficially
owned by such Person to, in the case of an
Existing Holder, a percentage equal to or
greater than the Increased Percentage or, in
the case of any other Person, 15% or more of
the shares of Common Stock of the Corporation
then outstanding; PROVIDED, HOWEVER, that if
a Person, other than those Persons excepted
in the first sentence of this Section 1(a),
shall become the Beneficial Owner of, in the
case of an Existing Holder, a percentage
equal to or greater than the Increased
Percentage or, in the case of any other
Person, 15% or more of the shares of Common
Stock of the Corporation then outstanding, by
reason of acquisitions of shares of Common
Stock by the Corporation and shall, after
such acquisitions of shares of Common Stock
by the Corporation, become the Beneficial
Owner of any additional shares of Common
Stock of the Corporation, then such Person
shall be deemed to be an "Acquiring Person".
Notwithstanding the foregoing, if the Board
of Directors of the Corporation determines in
good faith that a Person who would otherwise
be an "Acquiring Person", as defined pursuant
to the foregoing provisions of this paragraph
(a), has become such inadvertently, and such
Person divests as promptly as practicable a
-2-
<PAGE>
sufficient number of shares of Common Stock
so that such Person would no longer be an
"Acquiring Person", as defined pursuant to
the foregoing provisions of this paragraph
(a), then such Person shall not be deemed to
be an "Acquiring Person" for any purpose of
this Agreement."
2. Section 1(i) of the Rights Agreement is hereby
amended by deleting such Section in its entirety and by adding
the following in lieu thereof:
"(i) "Section 11(a)(ii) Event" shall
refer to any Person becoming an Acquiring
Person (unless the event causing such Person
to become an Acquiring Person is a
transaction described in Section 13(a))."
3. Section 3(a) of the Rights Agreement is hereby
amended by inserting in the seventh line the phrase "(or such
later date as may be determined by action of the Board of
Directors prior to such time as any Person becomes an Acquiring
Person)" after the words "Business Day".
4. Section 3(a) of the Rights Agreement is hereby
amended by deleting "30% or more of the shares of Common Stock
then outstanding" from the seventeenth and eighteenth lines
thereof and inserting the following phrase in lieu thereof:
", in the case of any Person who is an
Existing Holder, the Increased Percentage or
more, or, in the case of any other Person,
15% or more, of the shares of Common Stock of
the Corporation then outstanding"
-3-
<PAGE>
5. Section 3(c) of the Rights Agreement is hereby
amended by inserting "and amended as of September 2, 1994"
following "February 10, 1988" in the sixth line of the legend set
forth therein.
6. Section 11(a)(ii) of the Rights Agreement is
hereby amended by deleting such Section in its entirety and by
adding the following in lieu thereof:
"(ii) In the event any Person shall
become an Acquiring Person (unless the event
causing such Person to become an Acquiring
Person is a transaction described in Section
13(a)), then proper provision shall be made
so that each holder of a Right (except as
provided below and in Section 7(e) hereof),
shall thereafter have a right to receive,
upon exercise thereof, the then number of
shares of Common Stock of the Corporation for
which a Right was exercisable on the date on
which a Person has become an Acquiring Person
(such number of shares being herein referred
to as the "Adjustment Shares") at an adjusted
Purchase Price (the "Section 11 Price") equal
to the product obtained by multiplying the
number of Adjustment Shares by the greater of
(A) 20% of the Current Market Price (as
determined pursuant to Section 11(d) hereof)
per share of Common Stock on the date on
which a Person has become an Acquiring Person
and (B) the par value per share of Common
Stock; and, following the date on which a
Person has become an Acquiring Person, the
Section 11 Price shall be the "Purchase
Price" for all purposes of this Agreement
(other than Section 13 hereof)."
7. Section 11(p) of the Rights Agreement is hereby
amended by deleting the phrase "or as a Passive Holder" at the
end of the second sentence thereof.
-4-
<PAGE>
8. Section 13(d) of the Rights Agreement is hereby
deleted in its entirety.
9. Section 23(a) of the Rights Agreement is hereby
amended by placing a period at the end of page 44 of the Rights
Agreement and deleting the following phrase at the top of page 45
thereof in its entirety:
"unless, concurrent with such solicitation,
such Person (or one or more of its Affiliates
or Associates) is making a cash tender offer
pursuant to a Schedule 14D-1 (or any
successor form) filed with the Securities and
Exchange Commission for all outstanding
shares of Common Stock not beneficially owned
by such Person (or by its Affiliates or
Associates)."
10. The Form of Rights Certificate attached to the
Rights Agreement as Exhibit A is hereby amended by inserting
after "1988" in the second line of page A-2 thereof the phrase
"and amended as of September 2, 1994".
11. This Amendment shall be governed by and construed
in accordance with the laws of the State of Illinois.
12. This Amendment may be executed in any number of
counterparts and each of such counterparts shall for all purposes
be deemed to be an original, and all such counterparts shall
together constitute but one and the same instrument.
-5-
<PAGE>
13. Except as expressly set forth herein, this
Amendment shall not by implication or otherwise alter, modify,
amend or in any way affect any of the terms, conditions,
obligations, covenants or agreements contained in the Rights
Agreement, all of which are ratified and affirmed in all respects
and shall continue in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this
Amendment to be duly executed and attested, all as of the day and
year first above written.
Attest: JOSLYN CORPORATION
By Wayne M. Koprowski By L. G. Wolski
------------------ ------------------
Name: Wayne M. Koprowski Name: L. G. Wolski
Title: Secretary Title: Executive Vice President
Attest: THE FIRST NATIONAL BANK OF
CHICAGO
By L. Woods By R. Wiencek
------------------- ------------------------
Name: L. Woods Name: R. Wiencek
Title: Vice President Title: Asst. Vice President
-6-
<PAGE>
EXHIBIT 10
[Joslyn Corporation Letterhead]
August 4, 1995
To Our Shareholders:
On August 3, 1995, the Board of Directors of Joslyn
Corporation ("Joslyn") concluded to recommend that Joslyn's
shareholders reject the $32 per share cash tender offer (the
"Offer") by TK Acquisition Corporation, a wholly-owned subsidiary
of Danaher Corporation ("Danaher"), and not tender their shares
pursuant to the Offer. The Board has taken this position at this
time because:
* it has not reached a conclusion that Joslyn should
be sold to or otherwise engage in a business
combination with Danaher or any other party;
* Joslyn is in the midst of providing information to
Danaher so that Danaher may determine whether, from
its perspective, an Offer price higher
than $32 per share could be justified; and
* Joslyn has entered into confidentiality agreements
with other potentially interested parties, has
provided them with information and is seeking to
develop their interest in a transaction at higher
than $32 per share.
ACCOMPANYING THIS LETTER IS A COPY OF JOSLYN'S SCHEDULE 14D-9
RELATING TO THE OFFER; WE URGE YOU TO READ IT CAREFULLY.
Of course, no assurance can be given that Joslyn will receive an
offer higher than $32 per share, that the Board will conclude that Joslyn
should be sold or that there will be any extraordinary transaction
involving Joslyn. We can assure you, however, that your Board of Directors
will continue to work diligently on your behalf.
Sincerely,
William E. Bendix
L.G. Wolski
<PAGE>
EXHIBIT 11
FOR IMMEDIATE RELEASE
- ---------------------
Contact: William J. Rotenberry
Director of Corporate Development
312-454-2921
JOSLYN BOARD RECOMMENDS ITS SHAREHOLDERS REJECT
DANAHER OFFER; MEETINGS TO CONTINUE
CHICAGO, August 4, 1995 - Joslyn Corporation (NASDAQ:JOSL) announced
today that its Board of Directors has recommended that its shareholders
reject the $32 per share tender offer from Danaher Corporation.
In a letter being mailed to Joslyn shareholders, Joslyn Board Chairman
William E. Bendix and Chief Executive Officer L.G. Wolski said that the
Joslyn Board has not reached a conclusion that Joslyn should be sold.
However, Joslyn is in the midst of providing further information to Danaher
in an effort to cause it to raise its bid. In addition, Joslyn has entered
into confidentiality agreements with other potentially interested parties and
is seeking to develop their interest in a transaction at higher than $32 per
share.
