Tender-Offer Solicitation/Recommendation Statement — Schedule 14D-9
Filing Table of Contents
Document/Exhibit Description Pages Size
1: SC 14D9 Sched 14D-9 24 93K
2: EX-1 Exh-1 19 73K
3: EX-2 Exh-2 1 6K
4: EX-3 Exh-3 51 116K
5: EX-4 Exh-4 17 65K
6: EX-5 Exh-5 17 66K
7: EX-6 Exh-6 17 65K
8: EX-7 Exh-7 16 61K
9: EX-8 Exh-8 7 26K
10: EX-9 Exh-9 6 19K
11: EX-10 Exh-10 Ltr to Shareholders 1 7K
12: EX-11 Exh-11 Press Release 1 7K
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.
(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;
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(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
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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;
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(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).
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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).
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(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;
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(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,
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(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
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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
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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
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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
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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
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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.
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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.
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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
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