Annual Report — [x] Reg. S-K Item 405 — Form 10-K
Filing Table of Contents
Document/Exhibit Description Pages Size
1: 10-K405 Annual Report -- [x] Reg. S-K Item 405 55 262K
2: EX-10.1 Material Contract 15 45K
5: EX-10.11 Material Contract 17 72K
3: EX-10.2 Material Contract 23 56K
4: EX-10.3 Material Contract 27 52K
6: EX-11 Statement re: Computation of Earnings Per Share 1 9K
7: EX-21 Subsidiaries of the Registrant 1 8K
8: EX-27 Financial Data Schedule (Pre-XBRL) 1 11K
9: EX-27.1 Financial Data Schedule (Pre-XBRL) 1 11K
10: EX-27.2 Financial Data Schedule (Pre-XBRL) 1 11K
11: EX-27.3 Financial Data Schedule (Pre-XBRL) 1 11K
12: EX-27.4 Financial Data Schedule (Pre-XBRL) 1 11K
13: EX-27.5 Financial Data Schedule (Pre-XBRL) 1 11K
14: EX-27.6 Financial Data Schedule (Pre-XBRL) 1 11K
15: EX-27.7 Financial Data Schedule (Pre-XBRL) 1 11K
16: EX-27.8 Financial Data Schedule (Pre-XBRL) 1 11K
EXHIBIT 10.11
SEVERANCE AGREEMENT
THIS AGREEMENT dated as of Date, is made by and between Lukens Inc., a
Delaware corporation (the "Company"), and Name and Address. (the "Executive").
WHEREAS the Company considers it essential to the best interests of its
stockholders to foster the continuous employment of key management personnel;
and
WHEREAS the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
Change in Control (as defined in the last Section hereof) exists and that such
possibility, and the uncertainty and questions 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 members of
the Company's management, including the Executive, to their assigned duties
without distraction in the face of potentially disturbing circumstances arising
from the possibility of a Change in Control;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby agree as
follows:
1. Defined Terms. The definition of capitalized terms used in this
Agreement is provided in the last Section hereof.
2. Term of Agreement. This Agreement shall commence on the date hereof
and shall continue in effect through December 31, 1994; provided, however, that
commencing on January 1, 1994 and each January 1 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless, not
later than September 30 of the preceding year, the Company or the Executive
shall have given notice not to extend this Agreement or a Change in Control
shall have occurred prior to such January 1; and further provided, however, if a
Change in Control shall have occurred during the term of this Agreement, this
Agreement shall continue in effect for a period of not less than twenty-four
(24) months beyond the month in which such Change in Control occurred.
Notwithstanding the foregoing provisions of this Section, this Agreement shall
terminate upon the Executive's attaining the age of 65 years.
3. Company's Covenants Summarized. In order to induce the Executive to
remain in the employ of the Company and in consideration of the Executive's
covenants set forth in Section 4 hereof, the Company agrees, under the
conditions described herein, to pay the Executive the Severance Payments
described in Section 6.01 hereof and the other payments and benefits described
herein in the event the Executive's employment with the Company is terminated
following a Change in Control and during the term of this Agreement. Except as
provided in Section 9.01 hereof or Section 6.02 hereof, no amount or benefit
shall be payable under this Agreement unless there shall have been (or, pursuant
to Section 6.01 hereof, there shall be deemed to have been) a termination of the
Executive's employment with the Company following a Change in Control. This
Agreement shall not be construed as creating an ex- press or implied contract of
employment and, except as otherwise agreed in writing between the Executive and
the Company, the Executive shall not have any right to be retained in the employ
of the Company.
4. The Executive's Covenants. The Executive agrees that, subject to the
terms and conditions of this Agreement, in the event of a Potential Change in
Control during the term of this Agreement, the Executive will remain in the
employ of the Company until the earliest of (i) a date which is six (6) months
from the date of such Potential Change in Control, (ii) the date of a Change in
Control, (iii) the date of termination by the Executive of the Executive's
employment for Good Reason (determined by treating the Potential Change in
Control as a Change in Control in applying the definition of Good Reason) or by
reason of death, Disability or retirement, or (iv) the termination by the
Company of the Executive's employment for any reason.
5. Compensation Other Than Severance Payments.
5.01 Following a Change in Control and during the term of this
Agreement, during any period that the Executive fails to perform the Executive's
full-time duties with the Company as a result of incapacity due to physical or
mental illness, the Company shall pay the Executive's full salary to the
Executive at the rate in effect at the commencement of any such period, together
with all compensation and benefits payable to the Executive under the terms of
any compensation or benefit plan, program or arrangement maintained by the
Company during such period, until the Executive's employment is terminated by
the Company for Disability.
5.02 If the Executive's employment shall be terminated for any reason
following a Change in Control and during the term of this Agreement, the Company
shall pay the Executive's full salary to the Executive through the Date of
Termination at the rate in effect at the time the Notice of Termination is
given, together with all compensation and benefits payable to the Executive
through the Date of Termination under the terms of any compensation or benefit
plan, program or arrangement maintained by the Company during such period.
5.03 If the Executive's employment shall be terminated for any reason
following a Change in Control and during the term of this Agreement, the Company
shall pay the Executive's normal post-termination compensation and benefits to
the Executive as such payments become due. Such post-termination compensation
and benefits shall be determined under, and paid in accordance with, the
Company's retirement, insurance and other compensation or benefit plans,
programs and arrangements.
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6. Severance Payments.
6.01 The Company shall pay the Executive the payments described in this
Section 6.01 (the "Severance Payments") upon the termination of the Executive's
employment following a Change in Control and during the term of this Agreement,
in addition to the payments and benefits described in Section 5 hereof, unless
such termination is (i) by the Company for Cause, (ii) by reason of death or
Disability, or (iii) by the Executive without Good Reason. The Executive's
employment shall be deemed to have been terminated following a Change in Control
by the Company without Cause or by the Executive with Good Reason if the
Executive's employment is terminated prior to a Change in Control without Cause
after consultation with a Person who has entered into an agreement with the
Company the consummation of which will constitute a Change in Control or if the
Executive terminates his employment with Good Reason prior to a Change in
Control (determined by treating a Potential Change in Control as a Change in
Control in applying the definition of Good Reason) if the circumstance or event
that constitutes Good Reason occurs at the direction of such Person.
(A) In lieu of any further salary payments to the Executive
for periods subsequent to the Date of Termination and in lieu of any
severance benefit otherwise payable to the Executive, the Company shall
pay to the Executive a lump sum severance payment, in cash, equal to
three or, if less, the number of years, including fractional portions
thereof, from the Date of Termination until the Executive reaches the
age of 65 years, times the sum of (i) the higher of the Executive's
annual base salary in effect immediately prior to the occurrence of the
event or circumstance upon which the Notice of Termination is based or
such salary in effect immediately prior to the Change in Control, and
(ii) the higher of (x) the average of the highest three awards made to
the Executive pursuant to the Company's 1983 Target Incentive
Compensation Plan or any successor thereto (the "Incentive Compensation
Plan") in respect of each of the five measuring periods completed
immediately prior to the occurrence of the event or circumstance upon
which the Notice of Termination is based or (y) such average in respect
of such periods completed immediately prior to the occurrence of the
Change in Control; provided however, that if fewer than three such
awards have been made to the Executive, the averages described in
subclauses (x) and (y) of this clause (ii) shall be based solely on
awards which were actually made to the Executive and which covered at
least eight months of employment.
(B) Notwithstanding any provision of the Incentive
Compensation Plan, the Company shall pay to the Executive a lump sum
amount, in cash, equal to the sum of (i) any incentive compensation
which has been allocated or awarded to the Executive for a completed
fiscal year or other measuring period preceding the Date of Termination
under the Incentive Compensation Plan but has not yet been paid
(pursuant to Section 5.02 hereof or otherwise), (ii) a pro rata portion
to the Date of Termination of the aggregate value of all contingent
incentive compensation awards to the Executive for all uncompleted
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periods under the Incentive Compensation Plan calculated as to each
such award by assuming the achievement of the maximum performance level
within the performance range established with respect to such award and
basing such pro-rata portion upon the portion of the award period that
has elapsed as of the Date of Termination, and (iii) any amounts,
including interest thereon to the date of payment at the rate
determined pursuant to the terms of the Incentive Compensation Plan,
with respect to which the Executive has elected, pursuant to the terms
of the Incentive Compensation Plan, to defer payment;
(C) In lieu of Company Shares issuable upon exercise of
outstanding Options (which Options shall be canceled upon the making of
the payment referred to below), the Company shall pay the Executive a
lump sum amount, in cash, equal to the product of ( i) the excess of
(x) in the case of ISOs granted after the date hereof, the closing
price of Company Shares as reported on the New York Stock
Exchange--Composite Tape on or nearest the Date of Termination (or, if
not listed on such exchange, on the nationally recognized exchange or
quotation system on which trading volume in Company Shares is highest),
or in the case of all other Options, the higher of such closing price
or the highest per share price for Company Shares actually paid in
connection with any Change in Control, over (y) the per share exercise
price of each such Option held by the Executive (whether or not then
fully exercisable), and (ii) the number of Company Shares covered by
each such Option;
(D) In addition to the retirement benefits to which the
Executive is entitled under the Pension Plan, the Company shall pay the
Executive a lump sum amount, in cash, equal to the actuarial equivalent
of the excess of (i) the retirement pension (determined as a straight
life annuity commencing at Normal Retirement Age) which the Executive
would have accrued under the terms of the Pension Plan (without regard
to any amendment to the Pension Plan made subsequent to a Change in
Control and on or prior to the Date of Termination, which amendment
adversely affects in any manner the computation of retirement benefits
thereunder), determined as if the Executive were eligible to
participate therein and fully vested thereunder and had accumulated
(after the Date of Termination) thirty-six (36) additional months of
service credit thereunder at the Executive's highest annual rate of
compensation during the twelve (12) months immediately preceding the
Date of Termination (but in no event shall the Executive be deemed to
have accumulated additional months of service credit after the
Executive's attaining Normal Retirement Age), over (ii) the retirement
pension (determined as a straight life annuity commencing at Normal
Retirement Age) which the Executive had then accrued pursuant to the
provisions of the Pension Plan. For purposes of this Section 6.01(D),
"actuarial equivalent" shall be determined using the same assumptions
utilized under the Pension Plan immediately prior to the Date of
Termination.
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(E) For a thirty-six (36) month period after the Date of
Termination, the Company shall arrange to provide the Executive with
life, disability, accident and health insurance benefits substantially
similar to those which the Executive is receiving immediately prior to
the Notice of Termination (without giving effect to any reduction in
such benefits subsequent to a Change in Control if such reduction
constitutes Good Reason); provided, however, that if the date upon
which the Executive attains Normal Retirement Age occurs during such
period, the Executive shall thereafter receive such life, disability,
accident and health maintenance benefits as would be provided to him as
a retiree. Benefits otherwise receivable by the Executive pursuant to
this Section 6.01(E) shall be reduced to the extent comparable benefits
are actually received by or made available to the Executive without
cost during the thirty-six (36) month period following the Executive's
termination of employment (and any such benefits actually received by
the Executive shall be reported to the Company by the Executive).
6.02 (A) Whether or not the Executive becomes entitled to the
Severance Payments, if any of the Total Payments will be subject to the
Excise Tax, 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 and local income tax and Excise Tax upon the payment
provided for by this Section 6.02, shall be equal to the excess of the
Total Payments over the payment provided for by this Section 6.02.
(B) For purposes of determining whether any of the Total
Payments will be subject to the Excise Tax and the amount of such
Excise Tax, (i) any payments or benefits received or to be received by
the Executive in connection with a Change in Control oz the Executive's
termination of employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the Company,
any Person whose actions result in a Change in Control or any Person
affiliated with the Company or such Person (the "Total Payments"))
shall be treated as "parachute payments" (within the meaning of section
280G(b)(2) of the Code) unless, in the opinion of tax counsel selected
by the Company's independent auditors and reasonably acceptable to the
Executive, such payments or benefits (in whole or in part) do not
constitute parachute payments, including by reason of section
280G(b)(4)(A) of the Code, and all "excess parachute payments" (within
the meaning of section 280G(b)(1) of the Code) shall be treated as
subject to the Excise Tax unless, in the opinion of such tax counsel,
such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered (within the
meaning of section 280G(b)(4)(B) of the Code), or are otherwise not
subject to the Excise Tax, and (ii) the value of any noncash benefits
or any deferred payment or benefit shall be determined by the Company's
independent auditors in accordance with the principles of sections
280G(d)(3) and (4) of the Code. For purposes of determining the amount
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of the Gross-Up Payment, the Executive shall be deemed to pay federal
income taxes at the highest marginal rate of federal income taxation in
the calendar year in which the Gross-Up Payment is to be made and state
and local income taxes at the highest marginal rate of taxation in the
state and locality of the Executive's residence on the Date of
Termination (or such other time as is hereinafter described), net of
the maximum reduction in federal income taxes which could be obtained
from deduction of such state and local taxes.
(C) In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account hereunder at
the time of termination of the Executive's employment (or such other
time as is hereinafter described), the Executive shall repay to the
Company, at the time that the amount of such reduction in Excise Tax is
finally determined, the portion of the Gross-Up Payment attributable to
such reduction (plus that portion of the Gross-Up Payment attributable
to the Excise Tax and federal, state and local income tax imposed on
the Gross-Up Payment being repaid by the Executive to the extent that
such repayment results in a reduction in Excise Tax or a federal, state
or local income tax deduction) plus interest on the amount of such
repayment at the rate provided in section 1274(b)(2)(B) of the Code. In
the event that the Excise Tax is determined to exceed the amount taken
into account hereunder at the time of the termination of the
Executive's employment (or such other time as is hereinafter described)
(including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-Up Payment), the Company
shall make an additional Gross-Up Payment in respect of such excess
(plus any interest, penalties or additions payable by the Executive
with respect to such excess) at the time that the amount of such excess
is finally determined. The Executive and the Company shall each
reasonably cooperate with the other in connection with any
administrative or judicial proceedings concerning the existence or
amount of liability for Excise Tax with respect to the Total Payments.
If an Executive who remains in the employ of the Company becomes
entitled to the payment provided for by this paragraph, such payment
shall be made no later than the later of (i) the fifth day following
the date on which the Executive notifies the Company that he is subject
to the Excise Tax and (ii) twenty days prior to the date on which the
Excise Tax is initially due.
6.03 The payments provided for in Section 6.01 hereof (other than
Section 6.01(E)) and in Section 6.02 hereof shall be made not later than the
fifth day following the Date of Termination; provided, however, that, if the
amounts of such payments cannot be finally deter- mined on or before such day,
the Company shall pay to the Executive on such day an estimate, as determined in
good faith by the Company, of the minimum amount of such payments to which the
Executive is clearly entitled and shall pay the remainder of such payments
(together with interest at the rate provided in section 1274(b)(2)(B) of the
Code) as soon as the amount thereof can be determined but in no event later than
the thirtieth (30th) day after the Date of Termination. In the event that the
amount of the estimated payments exceeds the amount subsequently determined to
have been due, such excess shall constitute a loan by the Company to the
Executive, payable on the fifth (5th) business day after demand by the Company
(together with interest at the rate provided in section 1274(b)(2)(B) of the
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Code). At the time that payments are made under this Section, the Company shall
provide the Executive with a written statement setting forth the manner in which
such payments were calculated and the basis for such calculations including,
without limitation, any opinions or other advice the Company has received from
outside counsel, auditors or consultants (and any such opinions or advice which
are in writing shall be attached to the statement).
6.04 The Company also shall pay to the Executive all legal fees and
expenses incurred in good faith by the Executive as a result of a termination of
the Executive's employment following a Change in Control and during the term of
this Agreement (including all such fees and expenses, if any, incurred in
disputing in good faith any such termination or in seeking in good faith to
obtain or enforce any benefit or right 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 Code to any payment or benefit provided
hereunder). For purposes of this Section 6.04, an Executive shall be deemed to
have acted in good faith unless an arbitrator finds that the Executive's action
resulting in such legal fees and expenses was frivolous. Such payments shall be
made within five (5) business days after delivery of the Executive's written
requests for payment accompanied with such evidence of fees and expenses
incurred as the Company reasonably may require.
7. Termination Procedures and Compensation During Dispute.
7.01 After a Change in Control and during the term of this Agreement,
any purported termination of the Executive's employment (other than by reason of
death) shall be communicated by written Notice of Termination from one party
hereto to the other party hereto in accordance with Section 10 hereof. For
purposes of this Agreement, a "Notice of Termination" shall mean a notice which
shall indicate the specific termination provision in this Agreement relied upon
and shall 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. Further, a Notice of Termination for Cause is required
to include a copy of a resolution duly adopted by the affirmative vote of not
less than three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board which was called and held for the purpose of considering
such termination (after reasonable notice to the Executive and an opportunity
for the Executive, together with the Executive's counsel, to be heard before the
Board) finding that, in the good faith opinion of the Board, the Executive
engaged in conduct set forth in clause (i) or (ii) of the definition of Cause
herein, and specifying the particulars thereof in detail.
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7.02 "Date of Termination," with respect to any purported termination
of the Executive's employment after a Change in Control and during the term of
this Agreement, shall mean (i) if the Executive's employment is terminated for
Disability, thirty (30) days after Notice of Termination is given (provided that
the Executive shall not have returned to the full-time performance of the
Executive's duties during such thirty (30) day period), and (ii) if the
Executive's employment is terminated by for any other reason, the date specified
in the Notice of Termination (which, in the case of a termination by the
Company, shall not be less than thirty (30) days (except in the case of a
termination for Cause) and, in the case of a termination by the Executive, shall
not be less than fifteen (15) days nor more than sixty (60) days from the date
such Notice of Termination is given).
7.03 If within fifteen (15) days after any Notice of Termination is
given or, if later, prior to the Date of Termination (as determined without
regard to this Section 7.03), the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the termination, the
Date of Termination shall be the date on which the dispute is finally resolved,
either by mutual written agreement of the parties or by a final judgment, order
or decree of a court of competent jurisdiction (which is not appealable or with
respect to which the time for appeal therefrom has expired and no appeal has
been perfected); provided, however, that the Date of Termination shall be
extended by a notice of dispute provided by the Executive only if such notice is
given in good faith and the Executive pursues the resolution of such dispute
with reasonable diligence.
7.04 If a purported termination occurs following a Change in Control
and during the term of this Agreement, and such termination is disputed in
accordance with Section 7.03 hereof, the Company shall continue to pay the
Executive the full compensation in effect when the notice giving rise to the
dispute was given (including, but not limited to, salary) and continue the
Executive as a participant in all compensation, benefit and insurance plans in
which the Executive was participating when the notice giving rise to the dispute
was given until the Date of Termination, determined in accordance with Section
7.03 hereof. Amounts paid under this Section 7.04 are in addition to all other
amounts due under this Agreement (other than those due under Section 5.02
hereof) and shall not be offset against or reduce any other amounts due under
this Agreement.
8. No Mitigation. The Company agrees that, if the Executive's
employment by the Company is terminated during the term of this Agreement, the
Executive is not required to seek other employment; or to attempt in any way to
reduce any amounts payable to the Executive by the Company pursuant to Section 6
or Section 7.04 hereof. Further, the amount of any payment or benefit provided
for in such Section 6 (other than Section 6.01(E)) or such Section 7.04 shall
not be reduced by any compensation earned by the Executive as the result of
employment by another employer, by retirement benefits, by offset against any
amount claimed to be owed by the Executive to the Company, or otherwise.
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9. Successors; Binding Agreement.
9.01 In addition to any obligations imposed by law upon any successor
to the Company, the Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to expressly assume
and agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place. Failure of the Company to obtain such assumption and agreement prior to
the effectiveness of any such succession shall be a breach of this Agreement and
shall entitle the Executive to compensation from the Company in the same amount
and on the same terms as the Executive would be entitled to hereunder if the
Executive were to terminate the Executive's employment for Good Reason after a
Change in Control, except that, for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the Date of
Termination.
9.02 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 amount would still be payable to the Executive hereunder (other
than amounts which, by their terms, terminate upon the death of the Executive)
if the Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
the executors, personal representatives or administrators of the Executive's
estate.
10. Notices. For the purpose of this Agreement, notices and all other
communications provided for in the Agreement shall be in writing and shall be
deemed to have been duly given when personally delivered or mailed by United
States registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth below, or to such other address as either
party may have furnished to the other in writing in accordance herewith, except
that notice of change of address shall be effective only upon actual receipt:
To the Company:
Lukens Inc.
50 South First Avenue
Coatesville, Pennsylvania 19320
Attention: William D. Sprague
Vice President, General Counsel &
Secretary
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To the Executive:
Name
Address
11. 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 the Executive and such officer as may be specifically
designated by the Board. 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. No agreements or representations, oral or otherwise,
express or implied, with respect to the subject matter hereof have been made by
either party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Delaware. All references to sections of the Exchange
Act or the Code shall be deemed also to refer to any successor provisions to
such sections. Any payments provided for hereunder shall be paid net of any
applicable withholding required under federal, state or local law and any
additional withholding to which the Executive has agreed. The obligations of the
Company and the Executive under Sections 6 and 7 shall survive the expiration of
the term of this Agreement.
12. 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.
13. Counterparts; Coordination with Employment Agreement
13.01 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.
13.02 The terms of this Agreement shall be coordinated with and applied
in conjunction with the terms of the Executive's employment agreement, if any,
with the Company. In general, it is the intent of the parties that, subsequent
to a Change in Control and during the term of this Agreement, the provisions of
this Agreement shall supersede and substitute for those provisions of the
employment agreement relating to the Executive's entitlement to benefits in
connection with any termination of the Executive's employment, but, shall not
supersede for any period the provisions of such employment agreement pertaining
to the terms of the Executive's employment. Except for circumstances relating to
a termination of employment following a Change in Control during the term of
this Agreement, as provided for herein, all terms and conditions of the
Executive's employment with the Company shall be governed by the terms of the
Executive's employment agreement (including but not limited to any such term
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granting additional years of service to the Executive for purposes of any of the
Company's employee benefit plans).
14. Settlement of Disputes: Arbitration. All claims by the Executive
for benefits under this Agreement shall be directed to and determined by the
Board and shall be in writing. Any denial by the Board of a claim for benefits
under this Agreement shall be delivered to the Executive in writing and shall
set forth the specific reasons for the denial and the specific provisions of
this Agreement relied upon. The Board shall afford a reasonable opportunity to
the Executive for a review of the decision denying a claim and shall further
allow the Executive to appeal to the Board a decision of the Board within sixty
(60) days after notification by the Board that the Executive's claim has been
denied. Any further dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration in Philadelphia,
Pennsylvania, in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award in
any court having Jurisdiction; provided, however, that the Executive shall be
entitled to seek specific performance of the Executive's right to be paid until
the Date of Termination during the pendency of any dispute or controversy
arising under or in connection with this Agreement.
15. Definitions. For purposes of this Agreement, the following terms
shall have the meanings indicated below:
(A) "Base Amount" shall have the meaning defined in section
280G(b)(3) of the Code.
(B) "Beneficial Owner" shall have the meaning set, forth in
Rule 13d-3 under the Exchange Act.
(C) "Board" shall mean the Board of Directors of the Company.
(D) "Cause" for termination by the Company of the Executive's
employment, after any Change in Control, shall mean (i) the willful and
continued failure by the Executive to substantially perform the Executive's
duties with the Company (other than any such failure resulting from the
Executive's incapacity due to physical or mental illness or any such actual or
anticipated failure after the issuance of a Notice of Termination for Good
Reason by the Executive pursuant to Section 7.01 hereof) after a written demand
for substantial performance is delivered to the Executive by the Board, which
demand specifically identifies the manner in which the Board believes that the
Executive has not substantially performed the Executive's duties, or (ii) the
willful engaging by the Executive in conduct which is demonstrably and
materially injurious to the Company or its subsidiaries, monetarily or
otherwise. For purposes of clauses (i) and (ii) of this definition, no act, or
failure to act, on the Executive's part shall be deemed "willful" unless done,
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or omitted to be done, by the Executive not in good faith and without reasonable
belief that the Executive's act, or failure to act, was in the best interest of
the Company.
(E) A "Change in Control" shall be deemed to have occurred if
the events set forth in any one of the following paragraphs shall have occurred:
(I) any Person is or becomes the Beneficial
Owner, directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the
Company's then outstanding securities (unless the event
causing the 20% threshold to be crossed is an acquisition of
securities directly from the Company or its affiliates); or
(II) during any period of two consecutive
years (not including any period prior to the execution of this
Agreement), individuals who at the beginning of such period
constitute the Board and any new director (other than a
director designated by a Person who has entered into an
agreement with the Company to effect a transaction described
in clause (I), (III) or (IV) of this paragraph) whose election
by the Board or nomination for election by the Company's
stockholders was approved by a vote of at least two-thirds
(2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved cease for
any reason to constitute a majority thereof; or
(III) the stockholders of the Company
approve a merger or consolidation of the Company with any
other corporation, other than (i) a merger or consolidation
which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into
voting securities of the surviving entity), in combination
with the ownership of any trustee or other fiduciary holding
securities under an employee benefit plan of the Company, at
least 80% of the combined voting power of the voting
securities of the Company or such surviving entity outstanding
immediately after such merger or consolidation, or (ii) a
merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in
which no Person acquires more than 50% of the combined voting
power of the Company's then outstanding securities; or
(IV) the stockholders of the Company approve
a plan of complete liquidation of the Company or an agreement
for the sale or disposition by the Company of all or
substantially all the Company's assets; or
Notwithstanding the foregoing, a Change in Control shall not include
any event, circumstance or transaction occurring during the six-month period
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following a Potential Change in Control which potential Change in Control
results from the action of any entity or group which includes the Executive (a
"Management Group"); provided, however, that such action shall not be taken into
account for this purpose if it occurs within a six-month period following a
Potential Change in Control resulting from the action of any Person which is not
a member of the Management Group.
(F) "Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time. References to specific sections of the Code shall
include any successors thereto.
(G) "Company" shall mean Lukens Inc., a Delaware corporation,
and any successor to its business or assets which assumes and agrees to perform
this Agreement by operation of law, or otherwise (except in determining, under
Section 15(E) hereof, whether or not any Change in Control of the Company has
occurred in connection with such succession).
(H) "Company Shares" shall mean shares of common stock of the
Company or any equity securities into which such shares have been converted.
(I) "Date of Termination" shall have the meaning stated in
Section 7.02 hereof.
(J) "Disability" shall be deemed the reason for the
termination by the Company of the Executive's employment if, as a result of the
Executive's incapacity due to physical or mental illness, the Executive shall
have been absent from the full-time performance of the Executive's duties with
the Company for a period of six (6) consecutive months, the Company shall have
given the Executive a Notice of Termination for Disability and, within thirty
(30) days after such Notice of Termination is given, the Executive shall not
have returned to the full-time performance of the Executive's duties.
(K) "Exchange Act" shall mean the Securities Exchange Act of
1934, as amended from time to time.
(L) "Excise Tax" shall mean any excise tax imposed under
section 4999 of the Code.
(M) "Executive" shall mean the individual named in the first
paragraph of this Agreement.
(N) "Good Reason" for termination by the Executive of the
Executive's employment shall mean the occurrence (without the Executive's
express written consent) of any one of the following acts by the Company, or
failures by the Company to act, unless, in the case of any act or failure to act
described in paragraph (1), (V), (VI) or (VII) hereof, such act or failure to
act is corrected prior to the Date of Termination specified in the Notice of
Termination given in respect thereof:
-13-
(I) the assignment by the Company to the Executive of
any duties inconsistent with the Executive's status as an executive of
the Company or a substantial adverse alteration in the nature or status
of the Executive's responsibilities from those in effect immediately
prior to the Change in Control;
(II) a reduction by the Company in the Executive's
annual base salary as in effect on the date hereof or as the same may
be increased from time to time except for across- the-board salary
reductions similarly affecting all executives of the Company and all
executives of any Person in control of the Company;
(III) the relocation by the Company of its principal
executive offices to a location more than 30 miles from the location of
such office immediately prior to the Change in Control or the Company's
requiring the Executive to be based anywhere other than the Company's
principal executive offices except for required travel on the Company's
business to an extent substantially consistent with the Executive's
present business travel obligations;
(IV) the failure by the Company to pay to the
Executive any portion of the Executive's current compensation except
pursuant to an across-the-board compensation deferral similarly
affecting all executives of the Company and all executives of any
Person in control of the Company, or to pay to the Executive any
portion of an installment of deferred compensation under any deferred
compensation program of the Company, within seven (7) days of the date
such compensation is due;
(V) the failure by the Company to continue in effect
any compensation plan in which the Executive participates immediately
prior to the Change in Control which is material to the Executive's
total compensation, including but not limited to the Company's 1983
Target Incentive Plan, 1985 Stock Option and Appreciation Plan and any
similar or substitute plans adopted prior to the Change in Control,
unless an equitable arrangement (embodied in an ongoing substitute or
alternative plan) has been made with respect to such plan, or the
failure by the Company to continue the Executive's participation
therein (or in such substitute or alternative plan) on a basis not
materially less favorable, both in terms of the amount of benefits
provided and the level of the Executive's participation relative to
other participants, as existed at the time of the Change in Control;
(VI) the failure by the Company to continue to
provide the Executive with benefits substantially similar to those
-14-
enjoyed by the Executive under any of the Company's pension, life
insurance, medical, health and accident, or disability plans in which
the Executive was participating at the time of the Change in Control,
the taking of any action by the Company which would directly or
indirectly materially reduce any of such benefits or deprive the
Executive of any material fringe benefit enjoyed by the Executive at
the time of the Change in Control, or the failure by the Company to
provide the Executive with the number of paid vacation days to which
the Executive is entitled on the basis of years of service with the
Company in accordance with the Company's normal vacation policy in
effect at the time of the Change in Control; or
(VII) any purported termination by the Company of the
Executive's employment which is not effected pursuant to a Notice of
Termination satisfying the requirements of Section 7.01; for purposes
of this Agreement, no such purported termination shall be effective.
The Executive's right to terminate the Executive's employment for Good
Reason shall not be affected by the Executive's incapacity due to physical or
mental illness. The Executive's continued employment shall not constitute
consent to, or a waiver of rights with respect to, any act or failure to act
constituting Good Reason hereunder.
(0) "Gross-Up Payment" shall have the meaning given in Section
6.02 hereof.
(P) "Incentive Compensation Plan" shall have the meaning given
in Section 6.01(A) hereof.
(Q) "ISOs" shall mean options qualifying as incentive stock
options under section 422A of the Code.
(R) "Normal Retirement Age" shall mean the earliest age at
which the Executive may retire and become entitled to an unreduced pension under
the Pension Plan.
(S) "Notice of Termination" shall have the meaning stated in
Section 7.01 hereof.
(T) "Options" shall mean options for Company Shares granted to
the Executive under the Company's 1985 Stock Option and Appreciation Plan or any
similar plan in effect subsequent hereto, whether or not vested on the Date of
Termination, other than ISOs granted on or before the date of this Agreement and
ISOs which have not become exercisable on the Date of Termination.
(U) "Pension Plan" shall mean the Company's Supplemental
Retirement Plan for Target Incentive Plan Participants or its Supplemental
Retirement Plan for Designated Executives, as the case may be, or any plans
successor thereto.
-15-
(V) "Person" shall have the meaning given in Section 3(a)(9)
of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof;
provided, however, that a Person shall not include (i) the Company or any of its
subsidiaries, (ii) a trustee or other fiduciary holding securities under an
employee benefit plan of the Company or any of its subsidiaries, (iii) an
underwriter temporarily holding securities pursuant to an offering of such
securities, or (iv) a corporation owned, directly or indirectly, by the
stockholders of the Company in substantially the same proportions as their
ownership of stock of the Company.
(W) "Potential Change in Control" shall be deemed to have
occurred if the events set forth in any one of the following paragraphs shall
have occurred:
(I) the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change in
Control;
(II) the Company or any Person publicly announces an
intention to take or to consider taking actions which, if consummated,
would constitute a Change in Control;
(III) any Person who both (x) is on the date hereof
or subsequently becomes the Beneficial Owner, directly or indirectly,
of securities of the Company representing at least 10% or more of the
combined voting power of the Company's then outstanding securities and
(y) increases his or her beneficial ownership of such securities by 5%
or more over the percentage so owned by such Person on the date hereof;
or
(IV) the Board adopts a resolution to the effect
that, for purposes of this Agreement, a Potential Change in Control has
occurred.
(X) "Severance Payments" shall mean those payments described
in Section 6.01 hereof.
(Y) "Total Payments" shall mean those payments described in
Section 6.02 hereof.
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IN WITNESS WHEREOF, this Agreement has been executed, as of
the date first above written, on behalf of the Company by its duly authorized
officer and by the Executive.
ATTEST: COMPANY
By:
__________________________ By:____________________________
Secretary Chairman & CEO
EXECUTIVE
____________________________
Name
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Dates Referenced Herein and Documents Incorporated by Reference
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