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: December 22, 1994
LAURENTIAN CAPITAL CORPORATION
Commission File No.: 0-8403
Incorporated in the I.R.S. Employer
State of Delaware Identification No.
59-1611314
640 Lee Road, Suite 303
Wayne, Pennsylvania 19087
Registrant's Telephone Number
Including Area Code: 610/889-7400
Exhibit Index at Page 4
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Item 5. OTHER EVENTS.
a) On December 22, 1994 the Company entered into a Change of
Control Agreement with Robert T. Rakich, President and Chief
Executive Officer of the Company, a copy of which is attached
hereto as Exhibit 10.9 and made a part hereof.
b) On December 22, 1994 the Company entered into a Change of
Control Agreement with Bernhard M. Koch, Senior Vice
President, Chief Financial Officer, Treasurer and Secretary of
the Company, a copy of which is attached hereto as Exhibit
10.10 and made a part hereof.
c) On December 22, 1994 the Company entered into a Change of
Control Agreement with David L. Wilson, Jr., Senior Vice
President and Chief Investment Officer of the Company, a
copy of which is attached hereto as Exhibit 10.11 and made
a part hereof.
Item 6. EXHIBITS.
Exhibit 10.9 Change of Control Agreement with Robert T. Rakich
dated December 22, 1994.
Exhibit 10.10 Change of Control Agreement with Bernhard M. Koch
dated December 22, 1994.
Exhibit 10.11 Change of Control Agreement with David L. Wilson, Jr.
dated December 22, 1994.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
Registrant has duly caused this Form 8-K report to be signed on its behalf by
the undersigned hereunto duly authorized.
LAURENTIAN CAPITAL CORPORATION
BY: /S/ BERNHARD M. KOCH
--------------------
Bernhard M. Koch
Secretary
March 3, 1995
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EXHIBIT INDEX
Page
Number
------
Exhibit 10.9 Change of Control Agreement with Robert T. Rakich 5
dated December 22, 1994
Exhibit 10.10 Change of Control Agreement with Bernhard M. Koch 18
dated December 22, 1994
Exhibit 10.11 Change of Control Agreement with David L. Wilson, Jr. 31
dated December 22, 1994
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CHANGE OF CONTROL AGREEMENT
THIS AGREEMENT made this 22nd day of December, 1994, between
Laurentian Capital Corporation (the "Company") and Robert T. Rakich, presently
President and Chief Executive Officer of the Company ("Executive").
WHEREAS, the Company recognizes that Executive's contribution
to the growth and success of the Company has been substantial and desires to
assure the Company of Executive's continued employment; and
WHEREAS, in this connection, the Board of Directors of the
Company (the "Board") recognizes that, as is the case with many publicly-held
corporations and their subsidiaries, the possibility of a change in control may
exist and that such possibility and the uncertainty which it may raise among
management may result in the departure or distraction of management personnel to
the detriment of the Company and its stockholders; and
WHEREAS, the Board has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of Executive to his assigned duties without
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distractions arising from the possibility of a change in control of the
Company; and
WHEREAS, in order to take such steps with respect to Executive
and to induce Executive to remain in the employ of the Company, the Company has
agreed that Executive shall receive certain severance payments as set forth
below in the event his employment with the Company is terminated subsequent to a
change in control of the Company, on the terms and under the circumstances
described below.
NOW, THEREFORE, it is hereby agreed by and between the parties
as follows:
1. OPERATION OF AGREEMENT
This Agreement shall be effective immediately upon its
execution by the parties, but, anything in this Agreement to the contrary
notwithstanding, shall become operative only upon a "Change in Control of the
Company" as defined in Section 2 hereof.
2. CHANGE IN CONTROL OF THE COMPANY
(a) For purposes of this Agreement, a "Change in Control of
the Company" or "Change of Control" shall be deemed to have occurred upon the
occurrence of any of the following:
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(i) any "person" (as defined in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended ("Exchange Act"))
who is not a "Current Controlling Person of the Company," as defined below,
hereafter becomes the "beneficial owner" (as defined in Rule 13d-3 under
the Exchange Act), directly or indirectly, of securities representing
fifty percent (50%) or more of the combined voting power of the Company
(any person who is currently the beneficial owner of 50% or more of the
combined voting power of the Company's outstanding securities, and any
person currently controlled by or under common control with any such
person, being referred to herein as a "Current Controlling Person of
the Company"); or
(ii) there shall be elected to the Board of Laurentian
Capital Corporation directors constituting a majority of such Board
who are not elected or nominated for election to such Board by (x) the
current directors or a Current Controlling Person of the Company or (y)
directors who (or whose predecessors on such Board) were ultimately
nominated or elected by the current directors or a Current Controlling
Person of the Company; or
(iii) the shareholders of Laurentian Capital Corporation
approve a merger or consolidation of the Company with any other company,
other than a merger or consolidation which would result in the voting
securities of Laurentian Capital Corporation outstanding immediately prior
thereto continuing to represent
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(either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 80% of the
combined voting power of the voting securities of Laurentian Capital
Corporation or such surviving entity outstanding immediately after such merger
or consolidation; or
(iv) the shareholders of Laurentian Capital Corporation
approve a plan of complete liquidation of Laurentian Capital Corporation or an
agreement for the sale or disposition by Laurentian Capital Corporation of
all or substantially all of the Laurentian Capital Corporation's assets.
(b) Anything in this Agreement to the contrary
notwithstanding, if an event described in Section 2(a) occurs (a "Change of
Control Event") and if the Executive's employment with the Company is terminated
prior to the date on which the Change of Control Event occurs, and if it is
reasonably demonstrated by the Executive that such termination of employment
(i) was at the request of a third party who has taken steps reasonably
calculated to effect the Change of Control Event or (ii) otherwise arose in
connection with or anticipation of the Change of Control Event, then for all
purposes of this Agreement a Change of Control shall be deemed to have
occurred on the date immediately prior to the date of such termination of
employment.
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3. SEVERANCE PAYMENT ON TERMINATION OF EMPLOYMENT
(a) If, within the twenty-four (24) month period subsequent to
a Change of Control (the "Post-Change Period"), the Executive's employment by
the Company shall be terminated: (i) by the Company (other than for Cause, as
defined in Section 5, or for Retirement, as defined in Section 4); or (ii) by
Executive for Good Reason, as defined in Section 6; the Company shall pay
Executive a severance payment (the "Total Severance Amount") determined in
accordance with Section 3(b).
(b) The Total Severance Amount shall be an amount equal to two
(2) times the sum of an amount equal to the Executive's (i) annual base salary
(calculated as of the time of termination of employment) paid by the Company and
(ii) an amount equal to such annual base salary multiplied by the Executive's
average percentage annual bonus paid or payable with respect to the preceding
three (3) years (expressed as a percentage of annual base salary).
(c) Executive may opt to continue to participate, with the
expense thereof borne by the Company, at levels not less than those existing on
the day before the Change of Control or the Termination Date, at Executive's
election, in the Company's life, disability, accident and health plans for a
period of two (2) years from the Termination Date, by giving written notice to
the Company
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of such election within thirty (30) days of the Termination Date.
(d) Except with respect to payments provided for under Section
3(b) above, the payment of the amounts provided for herein shall not affect the
obligations of the Company or its successors, under any plan, other agreement or
arrangement pursuant to which Executive is entitled to any retirement, pension,
stock or insurance benefits, or payments or welfare contributions applicable to
retired management employees of the Company, generally.
(e) Notwithstanding any other provision of this Agreement, in
the event that the Executive becomes entitled to payments under this Agreement
and if any of the Total Payments ("Total Payments" being the total amount
payable to the Executive pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company or any of its subsidiaries) are
subject to the excise tax imposed under section 4999 ("Excise Tax") of the
Internal Revenue Code, the Company shall pay to the Executive an additional
amount (the "Gross-up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total Payments and any
federal, state, or local income tax and any Excise Tax upon the Gross-up
Payment, shall be equal to the Total Payments.
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4. TERMINATION UPON RETIREMENT
Termination by the Company or by Executive of Executive's
employment by reason of "Retirement" shall mean termination on or after
Executive's "normal retirement date", as defined in the Company's Retirement
Plan as of the date hereof, or in accordance with any retirement arrangement
established with Executive's consent with respect to the Executive.
5. TERMINATION FOR CAUSE
Termination by the Company of Executive's employment for
"Cause" shall mean termination upon: (a) the willful failure by Executive to
substantially perform his duties with the Company (other than any such failure
resulting in termination by Executive for Good Reason); or (b) the willful
engaging by Executive in conduct which is demonstrably and materially injurious
to the Company, monetarily or otherwise; or (c) Executive's conviction of a
felony or conviction of a misdemeanor which impairs Executive's ability
substantially to perform his duties with the Company.
6. TERMINATION BY EXECUTIVE FOR GOOD REASON
Executive shall be deemed for the purposes of this Agreement
to have terminated his employment for "Good Reason" if he terminates his
employment after the occurrence (other than such as may be isolated,
unsubstantial and inadvertent on the Company's part and which is remedied
promptly by the Company after receipt of notice from Executive), without
Executive's express written consent
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and after a Change in Control of the Company, of any one or more of the
following:
(a) the assignment to Executive of duties which are
substantially inconsistent with his duties, responsibilities and status
(including offices, titles and reporting requirements) or a substantial
reduction or alteration in the nature or status of Executive's responsibilities
from the most significant of those in effect during the six-month period
immediately preceding the Change of Control;
(b) a reduction by the Company in Executive's total
compensation (including, without limitation, salary, bonus, benefits and any
perquisite allowance) as in effect on the date hereof, or as the same shall be
increased from time to time, by more than 20%;
(c) the failure by the Company to continue Executive's
participation in any of the Company's employee benefit, incentive, fringe
benefit (including vacation), expense reimbursement or office support and
personal staff policies, plans, practices or arrangements, including, but not
limited to, those plans, policies and arrangements maintained solely for the
benefit of key management personnel, in which Executive participates, on
substantially the same basis as those provided generally from time
8
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to time after the Change of Control to other peer executives of the Company
and its affiliated companies; or
(d) the failure of any successor to the Company to assume or
otherwise be bound to perform the Company's obligations under this Agreement.
7. LEGAL FEES AND EXPENSES
The Company shall pay any reasonable legal fees and expenses
incurred by Executive as a result of termination of employment as provided
hereunder (including all such fees and expenses, if any, in contesting any
action of the Company) in seeking to enforce any right or benefit provided by
this Agreement; or in connection with any tax audit or proceeding to the extent
attributable to the application of Section 4999 of the Internal Revenue Code to
any payment or benefit provided hereunder.
8. MITIGATION; DISPUTES
(a) Executive shall not be required to mitigate the amount of
any payment provided for in this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this Agreement be
reduced by any compensation earned by Executive as the result of employment by
another employer after the Termination Date, or otherwise.
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(b) The Company's obligation to make the 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.
(c) If there shall be any dispute between the Company and the
Executive (i) in the event of any termination of the Executive's employment by
the Company, whether such termination was for Cause, or (ii) in the event of any
termination of employment by the Executive, whether Good Reason existed, then,
unless and until there is a final, nonappealable judgment by a court of
competent jurisdiction declaring that such termination was for Cause or that the
determination by the Executive of the existence of Good Reason was not made in
good faith, the Company shall pay all amounts, and provide all benefits, to the
Executive and/or the Executive's family or other beneficiaries, as the case may
be, that the Company would be required to pay or provide pursuant to Section 6
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 amount 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 be
entitled.
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9. TERMINATION DATE
Termination Date shall mean the date of Executive's
termination as set forth in a notice from the Company to the Executive or the
Executive to the Company.
10. SUCCESSORS; BINDING AGREEMENT
This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributes, devisees and legatees. If
Executive should die while any amount would still be payable to him hereunder if
he had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement, to Executive's
devisee, legatee or other designee or, if there is no such designee, to
Executive's estate.
11. NOTICES
Any notices, requests, demands, and other communications
provided for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to the Executive at the last address he has filed
in writing to the Company or, in the case of the Company, at its principal
executive offices.
12. PRIOR AGREEMENTS
This Agreement terminates and supersedes all prior agreements
between the Company and the Executive relating to Change
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of Control, including without limitation that certain Change of Control
Agreement made by the Company and the Executive dated December 13, 1993.
13. MISCELLANEOUS
No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by Executive and such officer as may be specifically designated by
the Board.
14. VALIDITY
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 shall remain in full force and effect.
15. COUNTERPARTS
This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
16. NON-WAIVER
The Executive's or the Company's failure to immediately insist
upon strict compliance with any provision of this Agreement, including, without
limitation, the right of Executive to terminate employment for Good Reason,
shall not be deemed to be a waiver of
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such provision or right or any other provision or right of this Agreement.
17. TERM OF AGREEMENT
Unless there shall have occurred a Change of Control prior to
such date, this Agreement shall expire three (3) years after the date hereof.
IN WITNESS WHEREOF, the Company and Executive have executed this Change
of Control Agreement as of the date first above written.
COMPANY
LAURENTIAN CAPITAL CORPORATION
By /s/ CLAUDE CASTONGUAY
---------------------
Its CHAIRMAN OF THE BOARD
---------------------
EXECUTIVE
/s/ ROBERT T. RAKICH
-------------------------
ROBERT T. RAKICH
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CHANGE OF CONTROL AGREEMENT
THIS AGREEMENT made this 22nd day of December, 1994, between
Laurentian Capital Corporation (the "Company") and Bernhard M. Koch, presently
Senior Vice President, Chief Financial Officer, Treasurer and Secretary of the
Company ("Executive").
WHEREAS, the Company recognizes that Executive's contribution
to the growth and success of the Company has been substantial and desires to
assure the Company of Executive's continued employment; and
WHEREAS, in this connection, the Board of Directors of the
Company (the "Board") recognizes that, as is the case with many publicly-held
corporations and their subsidiaries, the possibility of a change in control may
exist and that such possibility and the uncertainty which it may raise among
management may result in the departure or distraction of management personnel to
the detriment of the Company and its stockholders; and
WHEREAS, the Board has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of Executive to his assigned duties without
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distractions arising from the possibility of a change in control of the
Company; and
WHEREAS, in order to take such steps with respect to Executive
and to induce Executive to remain in the employ of the Company, the Company has
agreed that Executive shall receive certain severance payments as set forth
below in the event his employment with the Company is terminated subsequent to a
change in control of the Company, on the terms and under the circumstances
described below.
NOW, THEREFORE, it is hereby agreed by and between the parties
as follows:
1. OPERATION OF AGREEMENT
This Agreement shall be effective immediately upon its
execution by the parties, but, anything in this Agreement to the contrary
notwithstanding, shall become operative only upon a "Change in Control of the
Company" as defined in Section 2 hereof.
2. CHANGE IN CONTROL OF THE COMPANY
(a) For purposes of this Agreement, a "Change in Control of
the Company" or "Change of Control" shall be deemed to have occurred upon the
occurrence of any of the following:
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(i) any "person" (as defined in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended ("Exchange Act")) who is
not a "Current Controlling Person of the Company," as defined below, hereafter
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities representing fifty percent (50%)
or more of the combined voting power of the Company (any person who is
currently the beneficial owner of 50% or more of the combined voting power of
the Company's outstanding securities, and any person currently controlled by
or under common control with any such person, being referred to herein as a
"Current Controlling Person of the Company"); or
(ii) there shall be elected to the Board of Laurentian Capital
Corporation directors constituting a majority of such Board who are not elected
or nominated for election to such Board by (x) the current directors or a
Current Controlling Person of the Company or (y) directors who (or whose
predecessors on such Board) were ultimately nominated or elected by the current
directors or a Current Controlling Person of the Company; or
(iii) the shareholders of Laurentian Capital Corporation
approve a merger or consolidation of the Company with any other company,
other than a merger or consolidation which would result in the voting
securities of Laurentian Capital Corporation outstanding immediately prior
thereto continuing to represent
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(either by remaining outstanding or by being converted into voting securities
of the surviving entity) at least 80% of the combined voting power of the
voting securities of Laurentian Capital Corporation or such surviving entity
outstanding immediately after such merger or consolidation; or
(iv) the shareholders of Laurentian Capital Corporation
approve a plan of complete liquidation of Laurentian Capital Corporation or an
agreement for the sale or disposition by Laurentian Capital Corporation of all
or substantially all of the Laurentian Capital Corporation's assets.
(b) Anything in this Agreement to the contrary
notwithstanding, if an event described in Section 2(a) occurs (a "Change of
Control Event") and if the Executive's employment with the Company is terminated
prior to the date on which the Change of Control Event occurs, and if it is
reasonably demonstrated by the Executive that such termination of employment
(i) was at the request of a third party who has taken steps reasonably
calculated to effect the Change of Control Event or (ii) otherwise arose in
connection with or anticipation of the Change of Control Event, then for all
purposes of this Agreement a Change of Control shall be deemed to have
occurred on the date immediately prior to the date of such termination of
employment.
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3. SEVERANCE PAYMENT ON TERMINATION OF EMPLOYMENT
(a) If, within the twenty-four (24) month period subsequent to
a Change of Control (the "Post-Change Period"), the Executive's employment by
the Company shall be terminated: (i) by the Company (other than for Cause, as
defined in Section 5, or for Retirement, as defined in Section 4); or (ii) by
Executive for Good Reason, as defined in Section 6; the Company shall pay
Executive a severance payment (the "Total Severance Amount") determined in
accordance with Section 3(b).
(b) The Total Severance Amount shall be an amount equal to two
(2) times the sum of an amount equal to the Executive's (i) annual base salary
(calculated as of the time of termination of employment) paid by the Company and
(ii) an amount equal to such annual base salary multiplied by the Executive's
average percentage annual bonus paid or payable with respect to the preceding
three (3) years (expressed as a percentage of annual base salary).
(c) Executive may opt to continue to participate, with the
expense thereof borne by the Company, at levels not less than those existing on
the day before the Change of Control or the Termination Date, at Executive's
election, in the Company's life, disability, accident and health plans for a
period of two (2) years from the Termination Date, by giving written notice to
the Company
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of such election within thirty (30) days of the Termination Date.
(d) Except with respect to payments provided for under Section
3(b) above, the payment of the amounts provided for herein shall not affect the
obligations of the Company or its successors, under any plan, other agreement or
arrangement pursuant to which Executive is entitled to any retirement, pension,
stock or insurance benefits, or payments or welfare contributions applicable to
retired management employees of the Company, generally.
(e) Notwithstanding any other provision of this Agreement, in
the event that the Executive becomes entitled to payments under this Agreement
and if any of the Total Payments ("Total Payments" being the total amount
payable to the Executive pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company or any of its subsidiaries) are
subject to the excise tax imposed under section 4999 ("Excise Tax") of the
Internal Revenue Code, the Company shall pay to the Executive an additional
amount (the "Gross-up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total Payments and any
federal, state, or local income tax and any Excise Tax upon the Gross-up
Payment, shall be equal to the Total Payments.
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4. TERMINATION UPON RETIREMENT
Termination by the Company or by Executive of Executive's
employment by reason of "Retirement" shall mean termination on or after
Executive's "normal retirement date", as defined in the Company's Retirement
Plan as of the date hereof, or in accordance with any retirement arrangement
established with Executive's consent with respect to the Executive.
5. TERMINATION FOR CAUSE
Termination by the Company of Executive's employment for
"Cause" shall mean termination upon: (a) the willful failure by Executive to
substantially perform his duties with the Company (other than any such failure
resulting in termination by Executive for Good Reason); or (b) the willful
engaging by Executive in conduct which is demonstrably and materially injurious
to the Company, monetarily or otherwise; or (c) Executive's conviction of a
felony or conviction of a misdemeanor which impairs Executive's ability
substantially to perform his duties with the Company.
6. TERMINATION BY EXECUTIVE FOR GOOD REASON
Executive shall be deemed for the purposes of this Agreement
to have terminated his employment for "Good Reason" if he terminates his
employment after the occurrence (other than such as may be isolated,
unsubstantial and inadvertent on the Company's part and which is remedied
promptly by the Company after receipt of notice from Executive), without
Executive's express written consent
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and after a Change in Control of the Company, of any one or more of the
following:
(a) the assignment to Executive of duties which are
substantially inconsistent with his duties, responsibilities and status
(including offices, titles and reporting requirements) or a substantial
reduction or alteration in the nature or status of Executive's responsibilities
from the most significant of those in effect during the six-month period
immediately preceding the Change of Control;
(b) a reduction by the Company in Executive's total
compensation (including, without limitation, salary, bonus, benefits and any
perquisite allowance) as in effect on the date hereof, or as the same shall be
increased from time to time, by more than 20%;
(c) the failure by the Company to continue Executive's
participation in any of the Company's employee benefit, incentive, fringe
benefit (including vacation), expense reimbursement or office support and
personal staff policies, plans, practices or arrangements, including, but not
limited to, those plans, policies and arrangements maintained solely for the
benefit of key management personnel, in which Executive participates, on
substantially the same basis as those provided generally from time
8
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to time after the Change of Control to other peer executives of the Company
and its affiliated companies; or
(d) the failure of any successor to the Company to assume or
otherwise be bound to perform the Company's obligations under this Agreement.
7. LEGAL FEES AND EXPENSES
The Company shall pay any reasonable legal fees and expenses
incurred by Executive as a result of termination of employment as provided
hereunder (including all such fees and expenses, if any, in contesting any
action of the Company) in seeking to enforce any right or benefit provided by
this Agreement; or in connection with any tax audit or proceeding to the extent
attributable to the application of Section 4999 of the Internal Revenue Code to
any payment or benefit provided hereunder.
8. MITIGATION; DISPUTES
(a) Executive shall not be required to mitigate the amount of
any payment provided for in this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this Agreement be
reduced by any compensation earned by Executive as the result of employment by
another employer after the Termination Date, or otherwise.
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(b) The Company's obligation to make the 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.
(c) If there shall be any dispute between the Company and the
Executive (i) in the event of any termination of the Executive's employment by
the Company, whether such termination was for Cause, or (ii) in the event of any
termination of employment by the Executive, whether Good Reason existed, then,
unless and until there is a final, nonappealable judgment by a court of
competent jurisdiction declaring that such termination was for Cause or that the
determination by the Executive of the existence of Good Reason was not made in
good faith, the Company shall pay all amounts, and provide all benefits, to the
Executive and/or the Executive's family or other beneficiaries, as the case may
be, that the Company would be required to pay or provide pursuant to Section 6
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 amount 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 be
entitled.
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9. TERMINATION DATE
Termination Date shall mean the date of Executive's
termination as set forth in a notice from the Company to the Executive or the
Executive to the Company.
10. SUCCESSORS; BINDING AGREEMENT
This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributes, devisees and legatees. If
Executive should die while any amount would still be payable to him hereunder if
he had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement, to Executive's
devisee, legatee or other designee or, if there is no such designee, to
Executive's estate.
11. NOTICES
Any notices, requests, demands, and other communications
provided for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to the Executive at the last address he has filed
in writing to the Company or, in the case of the Company, at its principal
executive offices.
12. PRIOR AGREEMENTS
This Agreement terminates and supersedes all prior agreements
between the Company and the Executive relating to Change
11
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<PAGE>
of Control, including without limitation that certain Change of Control
Agreement made by the Company and the Executive dated December 13, 1993.
13. MISCELLANEOUS
No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by Executive and such officer as may be specifically designated by
the Board.
14. VALIDITY
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 shall remain in full force and effect.
15. COUNTERPARTS
This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
16. NON-WAIVER
The Executive's or the Company's failure to immediately insist
upon strict compliance with any provision of this Agreement, including, without
limitation, the right of Executive to terminate employment for Good Reason,
shall not be deemed to be a waiver of
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such provision or right or any other provision or right of this Agreement.
17. TERM OF AGREEMENT
Unless there shall have occurred a Change of Control prior to
such date, this Agreement shall expire three (3) years after the date hereof.
IN WITNESS WHEREOF, the Company and Executive have executed this Change
of Control Agreement as of the date first above written.
COMPANY
LAURENTIAN CAPITAL CORPORATION
By /s/ ROBERT T. RAKICH
--------------------
Its PRESIDENT & CEO
--------------------
EXECUTIVE
/s/ BERNHARD M. KOCH
-------------------------
BERNHARD M. KOCH
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<PAGE>
CHANGE OF CONTROL AGREEMENT
THIS AGREEMENT made this 22nd day of December, 1994, between
Laurentian Capital Corporation (the "Company") and David L. Wilson, Jr.,
presently Senior Vice President and Chief Investment Officer of the Company
("Executive").
WHEREAS, the Company recognizes that Executive's contribution
to the growth and success of the Company has been substantial and desires to
assure the Company of Executive's continued employment; and
WHEREAS, in this connection, the Board of Directors of the
Company (the "Board") recognizes that, as is the case with many publicly-held
corporations and their subsidiaries, the possibility of a change in control may
exist and that such possibility and the uncertainty which it may raise among
management may result in the departure or distraction of management personnel to
the detriment of the Company and its stockholders; and
WHEREAS, the Board has determined that appropriate steps
should be taken to reinforce and encourage the continued attention and
dedication of Executive to his assigned duties without
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distractions arising from the possibility of a change in control of the
Company; and
WHEREAS, in order to take such steps with respect to Executive
and to induce Executive to remain in the employ of the Company, the Company has
agreed that Executive shall receive certain severance payments as set forth
below in the event his employment with the Company is terminated subsequent to a
change in control of the Company, on the terms and under the circumstances
described below.
NOW, THEREFORE, it is hereby agreed by and between the parties
as follows:
1. OPERATION OF AGREEMENT
This Agreement shall be effective immediately upon its
execution by the parties, but, anything in this Agreement to the contrary
notwithstanding, shall become operative only upon a "Change in Control of the
Company" as defined in Section 2 hereof.
2. CHANGE IN CONTROL OF THE COMPANY
(a) For purposes of this Agreement, a "Change in Control of
the Company" or "Change of Control" shall be deemed to have occurred upon the
occurrence of any of the following:
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(i) any "person" (as defined in Sections 13(d) and 14(d) of
the Securities Exchange Act of 1934, as amended ("Exchange Act")) who is not
a "Current Controlling Person of the Company," as defined below, hereafter
becomes the "beneficial owner" (as defined in Rule 13d-3 under the Exchange
Act), directly or indirectly, of securities representing fifty percent (50%)
or more of the combined voting power of the Company (any person who is
currently the beneficial owner of 50% or more of the combined voting power
of the Company's outstanding securities, and any person currently controlled
by or under common control with any such person, being referred to herein as a
"Current Controlling Person of the Company"); or
(ii) there shall be elected to the Board of Laurentian Capital
Corporation directors constituting a majority of such Board who are not
elected or nominated for election to such Board by (x) the current directors
or a Current Controlling Person of the Company or (y) directors who (or whose
predecessors on such Board) were ultimately nominated or elected by the current
directors or a Current Controlling Person of the Company; or
(iii) the shareholders of Laurentian Capital Corporation approve
a merger or consolidation of the Company with any other company, other than
a merger or consolidation which would result in the voting securities of
Laurentian Capital Corporation outstanding immediately prior thereto
continuing to represent
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(either by remaining outstanding or by being converted into voting securities
of the surviving entity) at least 80% of the combined voting power of the
voting securities of Laurentian Capital Corporation or such surviving entity
outstanding immediately after such merger or consolidation; or
(iv) the shareholders of Laurentian Capital Corporation approve
a plan of complete liquidation of Laurentian Capital Corporation or an
agreement for the sale or disposition by Laurentian Capital Corporation of
all or substantially all of the Laurentian Capital Corporation's assets.
(b) Anything in this Agreement to the contrary
notwithstanding, if an event described in Section 2(a) occurs (a "Change of
Control Event") and if the Executive's employment with the Company is terminated
prior to the date on which the Change of Control Event occurs, and if it is
reasonably demonstrated by the Executive that such termination of employment
(i) was at the request of a third party who has taken steps reasonably
calculated to effect the Change of Control Event or (ii) otherwise arose in
connection with or anticipation of the Change of Control Event, then for all
purposes of this Agreement a Change of Control shall be deemed to have
occurred on the date immediately prior to the date of such termination of
employment.
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3. SEVERANCE PAYMENT ON TERMINATION OF EMPLOYMENT
(a) If, within the twenty-four (24) month period subsequent to
a Change of Control (the "Post-Change Period"), the Executive's employment by
the Company shall be terminated: (i) by the Company (other than for Cause, as
defined in Section 5, or for Retirement, as defined in Section 4); or (ii) by
Executive for Good Reason, as defined in Section 6; the Company shall pay
Executive a severance payment (the "Total Severance Amount") determined in
accordance with Section 3(b).
(b) The Total Severance Amount shall be an amount equal to one
and one-half (1.5) times the sum of an amount equal to the Executive's
(i) annual base salary (calculated as of the time of termination of employment)
paid by the Company and (ii) an amount equal to such annual base salary
multiplied by the Executive's average percentage annual bonus paid or payable
with respect to the preceding three (3) (or such lesser number of full fiscal
years during which Executive has been employed by the Company) years (expressed
as a percentage of annual base salary).
(c) Executive may opt to continue to participate, with the
expense thereof borne by the Company, at levels not less than those existing on
the day before the Change of Control or the Termination Date, at Executive's
election, in the Company's life, disability, accident and health plans for a
period of one and one-half (1.5) years from the Termination Date, by giving
written
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notice to the Company of such election within thirty (30) days of the
Termination Date.
(d) Except with respect to payments provided for under Section
3(b) above, the payment of the amounts provided for herein shall not affect the
obligations of the Company or its successors, under any plan, other agreement or
arrangement pursuant to which Executive is entitled to any retirement, pension,
stock or insurance benefits, or payments or welfare contributions applicable to
retired management employees of the Company, generally.
(e) Notwithstanding any other provision of this Agreement, in
the event that the Executive becomes entitled to payments under this Agreement
and if any of the Total Payments ("Total Payments" being the total amount
payable to the Executive pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company or any of its subsidiaries) are
subject to the excise tax imposed under section 4999 ("Excise Tax") of the
Internal Revenue Code, the Company shall pay to the Executive an additional
amount (the "Gross-up Payment") such that the net amount retained by the
Executive, after deduction of any Excise Tax on the Total Payments and any
federal, state, or local income tax and any Excise Tax upon the Gross-up
Payment, shall be equal to the Total Payments.
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4. TERMINATION UPON RETIREMENT
Termination by the Company or by Executive of Executive's
employment by reason of "Retirement" shall mean termination on or after
Executive's "normal retirement date", as defined in the Company's Retirement
Plan as of the date hereof, or in accordance with any retirement arrangement
established with Executive's consent with respect to the Executive.
5. TERMINATION FOR CAUSE
Termination by the Company of Executive's employment for
"Cause" shall mean termination upon: (a) the willful failure by Executive to
substantially perform his duties with the Company (other than any such failure
resulting in termination by Executive for Good Reason); or (b) the willful
engaging by Executive in conduct which is demonstrably and materially injurious
to the Company, monetarily or otherwise; or (c) Executive's conviction of a
felony or conviction of a misdemeanor which impairs Executive's ability
substantially to perform his duties with the Company.
6. TERMINATION BY EXECUTIVE FOR GOOD REASON
Executive shall be deemed for the purposes of this Agreement
to have terminated his employment for "Good Reason" if he terminates his
employment after the occurrence (other than such as may be isolated,
unsubstantial and inadvertent on the Company's part and which is remedied
promptly by the Company after receipt of notice from Executive), without
Executive's express written consent
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and after a Change in Control of the Company, of any one or more of the
following:
(a) the assignment to Executive of duties which are
substantially inconsistent with his duties, responsibilities and status
(including offices, titles and reporting requirements) or a substantial
reduction or alteration in the nature or status of Executive's responsibilities
from the most significant of those in effect during the six-month period
immediately preceding the Change of Control;
(b) a reduction by the Company in Executive's total
compensation (including, without limitation, salary, bonus, benefits and any
perquisite allowance) as in effect on the date hereof, or as the same shall be
increased from time to time, by more than 20%;
(c) the failure by the Company to continue Executive's
participation in any of the Company's employee benefit, incentive, fringe
benefit (including vacation), expense reimbursement or office support and
personal staff policies, plans, practices or arrangements, including, but not
limited to, those plans, policies and arrangements maintained solely for the
benefit of key management personnel, in which Executive participates, on
substantially the same basis as those provided generally from time
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to time after the Change of Control to other peer executives of the Company
and its affiliated companies; or
(d) the failure of any successor to the Company to assume or
otherwise be bound to perform the Company's obligations under this Agreement.
7. LEGAL FEES AND EXPENSES
The Company shall pay any reasonable legal fees and expenses
incurred by Executive as a result of termination of employment as provided
hereunder (including all such fees and expenses, if any, in contesting any
action of the Company) in seeking to enforce any right or benefit provided by
this Agreement; or in connection with any tax audit or proceeding to the extent
attributable to the application of Section 4999 of the Internal Revenue Code to
any payment or benefit provided hereunder.
8. MITIGATION; DISPUTES
(a) Executive shall not be required to mitigate the amount of
any payment provided for in this Agreement by seeking other employment or
otherwise, nor shall the amount of any payment provided for in this Agreement be
reduced by any compensation earned by Executive as the result of employment by
another employer after the Termination Date, or otherwise.
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(b) The Company's obligation to make the 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.
(c) If there shall be any dispute between the Company and the
Executive (i) in the event of any termination of the Executive's employment by
the Company, whether such termination was for Cause, or (ii) in the event of any
termination of employment by the Executive, whether Good Reason existed, then,
unless and until there is a final, nonappealable judgment by a court of
competent jurisdiction declaring that such termination was for Cause or that the
determination by the Executive of the existence of Good Reason was not made in
good faith, the Company shall pay all amounts, and provide all benefits, to the
Executive and/or the Executive's family or other beneficiaries, as the case may
be, that the Company would be required to pay or provide pursuant to Section 6
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 amount 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 be
entitled.
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9. TERMINATION DATE
Termination Date shall mean the date of Executive's
termination as set forth in a notice from the Company to the Executive or the
Executive to the Company.
10. SUCCESSORS; BINDING AGREEMENT
This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributes, devisees and legatees. If
Executive should die while any amount would still be payable to him hereunder if
he had continued to live, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement, to Executive's
devisee, legatee or other designee or, if there is no such designee, to
Executive's estate.
11. NOTICES
Any notices, requests, demands, and other communications
provided for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to the Executive at the last address he has filed
in writing to the Company or, in the case of the Company, at its principal
executive offices.
12. PRIOR AGREEMENTS
This Agreement terminates and supersedes all prior agreements
between the Company and the Executive relating to Change
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of Control, including without limitation that certain Change of Control
Agreement made by the Company and the Executive dated August 31, 1994.
13. MISCELLANEOUS
No provision of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by Executive and such officer as may be specifically designated by
the Board.
14. VALIDITY
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 shall remain in full force and effect.
15. COUNTERPARTS
This Agreement may be executed in several counterparts, each
of which shall be deemed to be an original but all of which together will
constitute one and the same instrument.
16. NON-WAIVER
The Executive's or the Company's failure to immediately insist
upon strict compliance with any provision of this Agreement, including, without
limitation, the right of Executive to terminate employment for Good Reason,
shall not be deemed to be a waiver of
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<PAGE>
such provision or right or any other provision or right of this Agreement.
17. TERM OF AGREEMENT
Unless there shall have occurred a Change of Control prior to
such date, this Agreement shall expire three (3) years after the date hereof.
IN WITNESS WHEREOF, the Company and Executive have executed this Change
of Control Agreement as of the date first above written.
COMPANY
LAURENTIAN CAPITAL CORPORATION
By /s/ ROBERT T. RAKICH
--------------------
Its PRESIDENT & CEO
--------------------
EXECUTIVE
/s/ DAVID L. WILSON, JR.
-------------------------
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