Exhibit 10(f)
AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT
AGREEMENT
made this 12th day of June, 2007 by and between EDO
Corporation,
a New York Corporation having its office and principal place of
business at 60
East 42nd Street, Suite 4200, New York, NY 10165 (the "Company")
and Frank W.
Otto, 21 Farm Road South, Wading River, NY 11792("Executive").
W I T N E S E T H:
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WHEREAS,
the Company considers it essential to the best interests of the
Company and its stockholders that its management (including
Executive) be
encouraged to remain with the Company and to continue to devote
full attention
to the Company's business in the event of a change in control or
potential
change in control of the Company.
WHEREAS,
the Company recognizes that the possibility of a Change in
Control or a Potential Change in Control and the uncertainty and
questions,
which either event may raise among management, may result in the
departure or
distraction of management personnel to the detriment of the Company
and its
stockholders;
WHEREAS,
the Company's Board of Directors (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 to
their
assigned duties without distraction in the face of the potentially
disturbing
circumstances arising from a Change in Control or a Potential
Change in Control;
WHEREAS,
the Company believes Executive has made and will continue to
make
valuable contributions to the productivity and profitability of the
Company;
WHEREAS,
should a Potential Change in Control occur, the Board believes
it
imperative that the Company and the Board be able to rely upon the
Executive to
continue in his position, and that the Company be able to receive
and rely upon
his advice as to the best interests of the Company and its
stockholders without
concern that he might be distracted by the personal uncertainties
and risks
created by such event; and
WHEREAS,
should a Potential Change in Control occur, in addition to the
Executive's regular duties, he may be called upon to assist in the
assessment of
any proposals of any person concerning the possible business
combination of the
Company or acquisition of equity securities of the Company, advise
management
and the Board as to whether such proposals would be in the best
interests of the
Company and its stockholders, and to take such other actions as the
Board might
determine to be appropriate;
WHEREAS,
Section 409A of the Internal Revenue Code of 1986, as amended
(the "Code"), imposes certain restrictions and requirements upon
the payment of
amounts treated as deferred compensation for such purposes, in
order to avoid
immediate taxation at a rate of federal income taxation at least
20% in excess
of the otherwise applicable rate of income taxation;
<PAGE>
WHEREAS,
certain payments that may become due and payable under this
Agreement may be treated as such deferred compensation and the
Company and the
Executive desire to satisfy the applicable conditions specified
under such
Section 409A:
NOW,
THEREFORE, in consideration of the recitals and for other good
and
valuable consideration, the Company and Executive agree as
follows:
GENERAL
1.
Purpose. The purpose of this Agreement is to provide Executive
with
Special Severance Pay Benefits in the event of certain terminations
of
Executive's employment in connection with a Change in Control, as
such terms are
defined in this Agreement.
2. Term.
This Agreement will be effective as of the date first set forth
above (the "Effective Date"), but no compensation or benefits will
be payable
hereunder unless the Executive experiences a Qualifying Termination
of
employment following a Potential Change in Control or Change in
Control. In
addition, no compensation or benefits will be payable to the
Executive under
this Agreement, and this Agreement will be without further force or
effect, if a
Potential Change in Control or a Change in Control does not occur
on or before
the end of the initial Term or any extended Term. The initial
"Term" of this
Agreement shall begin on the Effective Date and end on December 31,
2007;
provided that, the Term may be extended for additional one year
periods (each,
an extended Term) upon the lapse of the initial Term or the then
current
extended Term by the Company's written notice of extension to the
Executive and
the Executive's written acknowledgement of such notice.
ARTICLE 1
PRINCIPAL UNDERTAKING
1.1.
Special Severance Upon a Qualifying Termination. If (a) following
a
Potential Change in Control but prior to a Change in Control
(provided a Change
in Control occurs within twelve months after the Potential Change
in Control) or
(b) within a one and one-half (1-1/2) year period after a Change in
Control,
Executive's employment shall have been terminated by the Company
without Cause
or by Executive in a Termination for Good Reason (either, a
"Qualifying
Termination"), then Executive shall be paid by the Company subject
to adjustment
as provided in Article 4, the following "Special Severance Pay
Benefits":
-
Current Salary and Other Compensation Benefits (Article 2);
-
Other Salary and Incentive Compensation Benefits (Article 3);
and
-
Tax Adjustment (Article
4).
2
<PAGE>
1.2.
Timing of Payment. Except as provided in Article 4, the Special
Severance Pay Benefits, subject to any taxes required to be
withheld therefrom,
shall be paid to Executive in a lump sum, on or before the fifth
day following
the later of the "Date of Employment Termination" or the date the
Change in
Control is consummated (the "Payment Date"); provided, however,
that, if
Executive is a "specified employee" of the Company or any member of
its
affiliated group of corporations (within the meaning of Section
409A of the
Code), as of the Date of Employment Termination and any payment of
deferred
compensation payable under this Agreement or any other deferred
compensation
arrangement with the Company and its subsidiaries (including, but
not limited
to, the payments provided for under Article 4) is required to be
delayed to
avoid incurring "additional tax" under Section 409A of the Code and
the
regulations promulgated thereunder, then each such payment shall be
delayed
until the date which is six months and one day following the Date
of Employment
Termination.
1.3. Loans
and Advances. The amount of any loan or advance to Executive
shall be due and payable as of the Date of Employment Termination.
The Company
shall have no right of setoff against any amount due Executive
under this
Agreement, except that the Company may set off against such amount
the balance
of any loan or advance which remains unpaid after the third day
following the
Date of Employment Termination.
ARTICLE 2
CURRENT SALARY AND OTHER COMPENSATION BENEFITS
Payment of
this portion of Special Severance Pay Benefits shall consist of
the following:
-
Executive's full base salary through the Date of Employment
Termination,
at the
rate in effect ten (10) days prior to the Date of Employment
Termination; plus
-
Executive's full base salary earned from the beginning of the
calendar
year in which
the Date of Employment Termination occurs through the Date
of
Employment Termination multiplied by the greater of (a) twenty
percent
(20%) or
(b) the percentage which is equal to the highest percentage of
base
salary paid as a bonus to Executive for any of the three
calendar
years
preceding the calendar year in which the Date of Employment
Termination occurs, in either case, reduced by any installment of
cash
bonus
previously paid by the Company to Executive for the calendar year
in
which the
Date of Employment Termination occurs, plus
- The full
amount, if any, of any incentive or special award, which
Executive
earned but which, has not yet been paid.
3
<PAGE>
ARTICLE 3
OTHER SALARY AND INCENTIVE COMPENSATION BENEFITS
Payment of
this portion of Special Severance Pay Benefits shall consist of
an amount equal to one and one-half (1 1/2) times the sum of (a)
Executive's
annual base salary, at the highest rate in effect at any time up to
Date of
Employment Termination (the "Highest Base Salary") and (b) and
amount equal to
the Highest Base Salary multiplied by the greater of (i) twenty
percent (20%) or
(ii) the percentage which is equal to the highest percentage of
base salary paid
as a bonus to Executive for any of the three calendar years
preceding the
calendar year in which the Date of Employment Termination
occurs.
ARTICLE 4
TAXES
4.1.
Application of Article 4. In the event that any amount or
benefit
paid or distributed to Executive pursuant to this Agreement, taken
together with
any amounts or benefits otherwise paid or distributed to Executive
by the
Company or any affiliated company (collectively, the "Covered
Payments"), would
be an "excess parachute payment" as defined in Section 280G of the
Code and
would thereby subject Executive to the tax (the "Excise Tax")
imposed under
Section 4999 of the Code (or any similar tax that may hereafter be
imposed), the
provisions of this Article 4 shall apply to determine the amounts
payable to
Executive pursuant to this Agreement.
4.2.
Determination of Payment Cap or Tax Adjustment. On or before
the
Payment Date, the Company shall notify Executive of the aggregate
present value
of all termination benefits to which he would be entitled under
this Agreement
and any other plan, program or arrangement as of the Payment Date,
together with
the projected maximum payments, determined as of the Payment Date
that could be
paid without Executive being subject to the Excise Tax.
(a) Payment Cap. If the aggregate value of all compensation
payments
or
benefits to be paid or provided to Executive under this Agreement
and
any other
plan, agreement or arrangement with the Company is less than
105% of
the amount which can be paid to Executive without Executive
incurring
an Excise Tax, then the amounts payable to Executive under this
Agreement
may, in the discretion of the Company, be reduced (but not
below
zero), to
the maximum amount which may be paid hereunder without
Executive
becoming
subject to such an Excise Tax (such reduced payments to be
referred
to as the "Payment Cap"). In the event that Executive receives
reduced
payments and benefits hereunder, Executive shall have the right
to
designate
which of the payments and benefits otherwise provided for in
this
Agreement that he will receive in connection with the application
of
the
Payment Cap.
(b) Tax Adjustment. If the aggregate value of all compensation
payments
or benefits to be paid or provided to Executive under this
Agreement
and any other plan, agreement or arrangement with the Company
is
greater
than 105% of the amount which can be paid to Executive without
Executive
incurring an Excise Tax, the Company shall pay to Executive
immediately following Executive's termination of employment an
additional
amount
(the "Tax Adjustment") such that the net amount retained by
Executive
with respect to such Covered Payments, after deduction of any
Excise Tax
on the Covered Payments and any Federal, state and local income
tax and
Excise Tax on the Tax Adjustment provided for by this Article
4,
but before
deduction for any Federal, state or local income or employment
tax
withholding on such Covered Payments, shall be equal to the amount
of
Covered
Payments.
4
<PAGE>
4.3.
Assumptions. For purposes of determining whether any of the
Covered
Payments will be subject to the Excise Tax, and the amount of such
Excise Tax,
(a) Such Covered Payments will be treated as "parachute
payments"
within the
meaning of Section 280G of the Code, and all "parachute
payments"
in excess of the "base amount" (as defined under Section
280G(b)(3)
of the Code) shall be treated as subject to the Excise Tax,
unless and
except to the extent that, in the good faith judgment of the
Company's
independent certified public accountants appointed prior to the
Effective
Date or tax counsel selected by such accountants (the
"Accountants"), the Company has a reasonable basis to conclude that
such
Covered
Payments (in whole or in part) either do not constitute
"parachute
payments"
or represent reasonable compensation for personal services
actually
rendered (within the meaning of Section 280G(b)(4)(B) of the
Code) in
excess of the "base amount," or such "parachute payments" are
otherwise
not subject to such Excise Tax, and
(b) The value of any non-cash benefits or any deferred payment
or
benefit
shall be determined by the Accountants in accordance with the
principles
of Section 280G of the Code.
(c) For purposes of determining whether Executive would receive
a
greater
net after-tax benefit were the amounts payable under this
Agreement
reduced in accordance with Paragraph 4.2, Executive shall be
deemed to
pay:
(i) Federal income taxes at the highest applicable marginal
rate of federal income taxation for the calendar year in which
the
first amounts are to be paid hereunder, and
(ii) Any applicable state and local income taxes at the
highest applicable marginal rate of taxation for such calendar
year,
net of the maximum reduction in Federal income taxes which could
be
obtained from the deduction of such state or local taxes if paid
in
such year.
4.4.
Correction Following Determination.
(a) Corrections For Payment Cap. If Executive receives reduced
payments
and benefits under this Article 4, or this Article 4 is
determined
not to be applicable to Executive because the Accountants
conclude
that Executive is
