Exhibit 10.10
SEVERANCE
AGREEMENT
(as amended December 31, 2008)
THIS AGREEMENT, dated [
] , is made by and between Barnes Group Inc., a Delaware
corporation (the “Company”), and [
] (the “Executive”), and is amended on
December 31, 2008 to read in its entirety as
follows.
WHEREAS, the Company considers it
essential to the best interests of its shareholders to foster the
continued employment of key management personnel; and
WHEREAS, the Board recognizes that,
as is the case with many publicly held corporations, the
possibility of a Change in Control 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
shareholders; 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
definitions of capitalized terms used in this Agreement are
provided in the last Section hereof.
2. Term of Agreement . The
Term of this Agreement shall commence on the date hereof and shall
continue in effect through December 31, [
] ;
provided , however , that commencing on
January 1, [
] and
each January 1 thereafter, the Term 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 the Term; and
further provided , however , that if a Change
in Control shall have occurred during the Term, the Term shall
expire no earlier than twenty-four (24) months beyond the
month in which such Change in Control occurred.
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 and the other payments and benefits described
herein. Except as provided in Section 9.1 hereof, no Severance
Payments shall be payable under this Agreement unless the Executive
has a Separation from Service following a Change in Control and
during the Term and such Separation from Service is described in
the first sentence of Section 6.1. This Agreement shall not be
construed as creating an express 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, 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 of 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 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 .
5.1 Following a Change in Control
and during the Term, 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; provided, however, that the amounts
received under this Section 5.1 shall be reduced by any
amounts received by the Executive with respect to the same period
of time under any long term disability plan of the Company. For the
avoidance of doubt, payments pursuant to this Section 5.1 are
contingent on the Executive’s continued full-time employment
until such time as (a) a Change in Control occurs during the
Term, and
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(b) the Executive fails to perform full-time
duties as a result of incapacity due to physical or mental illness,
and are payable only for so long as the Executive continues to fail
to perform full-time duties as a result of incapacity due to
physical or mental illness or, if sooner, until the earlier of
(i) the end of the Term, or (ii) the Executive’s
employment is terminated by the Company for Disability.
5.2 For the Executive’s
services following a Change in Control and during the Term, the
Company shall pay the Executive’s full salary to the
Executive through the Date of Termination at the rate in effect
immediately prior to the Change in Control or, if higher, the rate
in effect from time to time after the Change in Control and prior
to any reduction thereof, together with all compensation and
benefits payable to the Executive through the Date of Termination
under the terms of the Company’s compensation and benefit
plans, programs or arrangements as in effect immediately prior to
the Change in Control or, if more favorable to the Executive, as in
effect from time to time after the Change in Control and prior to
any reduction thereof.
5.3 If the Executive has a
Separation from Service following a Change in Control and during
the Term, and such Separation from Service is (A) an
involuntary Separation from Service (within the meaning of Treasury
Regulation section 1.409A-1(n)(1)) by the Company other than for
Cause or Disability, or (B) a Separation from Service by the
Executive for Good Reason, the Company shall pay to the Executive
after the Separation from Service the Executive’s normal
post-termination compensation and benefits 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 as in effect immediately prior to the
Date of Termination or, if more favorable to the Executive, as in
effect immediately prior to any adverse change therein after the
Change in Control; provided that nothing in this Section 5.3
shall alter the terms of any stock option or any equity-based
award. Nothing herein shall reduce or otherwise adversely affect
any compensation and benefits to which the Executive may be
entitled after Separation from Service under any of the
Company’s retirement, insurance and other compensation or
benefit plans, programs and arrangements as in effect from time to
time before or after a Change in Control.
5.4 In the event that a Change in
Control occurs during the Term, (A) the Company shall, within
five (5) days after such Change in Control, pay to the
Executive a lump sum cash amount equal to the product of
(i) the target annual bonus or incentive award applicable to
the Executive under each of the Company’s annual
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bonus or incentive compensation plans (such
target award to be determined pursuant to the provisions of each
such plan or, if no such provisions exist in the case of any such
plan, as determined by the Compensation Committee of the Board, as
constituted immediately prior to the Change in Control, in its sole
discretion), in respect of the year in which such Change in Control
occurs and (ii) a fraction, the numerator of which shall be
the number of months (including fractions thereof) from the first
day of the year in which the Change in Control occurs to the date
on which the Change in Control occurs, and the denominator of which
shall be twelve (12); and (B) all options held by the
Executive to acquire Company stock shall immediately become vested
and exercisable in full, and all other Company stock-based awards
held by the Executive shall vest and be paid at such time or times
on or after the date on which such Change in Control occurs, and to
such extent, as shall be set forth in the award agreement
documenting such awards (it being understood and agreed that any
stock-based award agreements will provide for vesting and payment
of such awards in connection with a Change in Control at such time
or times and on such terms and conditions as the Committee deems
advisable to comply with or qualify for an exclusion from
Section 409A of the Code). The lump sum cash amount payable
pursuant to Section 5.4(A) above shall be credited against any
annual bonus or incentive award to which the Executive may be
entitled for the year in which the Change in Control occurs
pursuant to the Performance-Linked Bonus Plan for Selected
Executive Officers or any other annual bonus or incentive plan in
which the Executive participates in such year, provided that such
annual bonus or incentive award qualifies (or will qualify) for
treatment as a short-term deferral under Treasury Regulation
section 1.409A-1(b)(4) or is otherwise not subject to
Section 409A of the Code, it being the intention hereof that,
between Section 5.4(A) above and any annual bonus or incentive
award plan pursuant to which the Executive is entitled to an annual
bonus or incentive award for the year in which the Change in
Control occurs, the Executive will receive any annual bonus or
incentive award to which the Executive may be entitled for the year
in which the Change in Control occurs but not less than the lump
sum cash amount payable pursuant to Section 5.4(A)
above.
6. Severance Payments
.
6.1 Subject to Section 6.2 and
Section 12(B) hereof, if the Executive has a Separation from
Service following a Change in Control and during the Term, and such
Separation from Service is an involuntary Separation from Service
(within the meaning of Treasury Regulation section 1.409A-1(n)(1))
by the Company other than for Cause or Disability, or is a
Separation from Service by the Executive for Good Reason, then the
Company shall pay the Executive the amounts, and provide
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the Executive the
benefits, described in this Section 6.1 (“Severance
Payments”), in addition to any payments and benefits to which
the Executive is entitled under Section 5 hereof.
Notwithstanding the foregoing, the Executive shall not be eligible
to receive any payment or benefit provided for in this
Section 6.1 unless the Executive shall have executed and
delivered to the Company within 45 days after the Separation from
Service a release (substantially in the form of Exhibit A hereto)
in favor of the Company and others set forth on said Exhibit A,
relating to all claims or liabilities of any kind relating to the
Executive’s employment and termination of employment with the
Company, and the Executive shall not have revoked such release
within 7 days after executing it. Subject to Section 12(B)
hereof, any payments and benefits that, but for the preceding
sentence, would be paid or provided pursuant to this
Section 6.1 before the 8 th day after the Executive executes
the release shall be paid or provided on the 8
th
day after the
Executive executes the release (or, if such 8
th
day is on a weekend
or a holiday, on the next business day), provided that the
Executive did not revoke the release.
(A) Cash Severance Payments
.
(i) The Company shall pay to the
Executive an amount, in cash, equal to the severance pay to which
the Executive would be entitled under the Barnes Group Inc.
Executive Separation Pay Plan as amended on December
, 2008 (the
“Executive Separation Pay Plan”) if the Separation from
Service were a Separation from Service for which severance benefits
were payable under that Plan and the provisions of Section 4.5
thereof did not apply. For the avoidance of doubt, the severance
pay to which the Executive would be entitled if the Separation from
Service were a Separation from Service for which severance benefits
were payable under the Executive Separation Pay Plan and the
provisions of Section 4.5 thereof did not apply is twelve
months of base salary as in effect immediately prior to the
Separation from Service. Such amount shall be paid at the same
times at which it would be paid under the Executive Separation Pay
Plan if the provisions of Section 4.5 thereof did not apply,
and in the same installments. However, if the Separation from
Service for which the amount described in this
Section 6.1(A)(i) is payable takes place during the two years
following the occurrence of a “change in control event”
with respect to the Executive (within the meaning of Treasury
Regulation section 1.409A-3(i)(5)(i) & (ii)), then in that
event the Company shall pay the Executive the aforementioned amount
in a lump sum within five (5) days of such Separation from
Service; and
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(ii) The Company shall pay to the
Executive within five (5) days of such Separation from Service
a lump sum amount, in cash, equal to the excess of (a) over
(b) where (a) is 2 times the sum of (I) the
Executive’s annual base salary as in effect immediately prior
to the Separation from Service or, if higher, in effect immediately
prior to any reduction thereof, and (II) the highest of
(A) the average annual bonus earned by the Executive in
respect of the three fiscal years ending immediately prior to the
fiscal year in which occurs the Separation from Service,
(B) the average annual bonus earned by the Executive in
respect of the three fiscal years ending immediately prior to the
fiscal year in which occurs the Change in Control or (C) the
target bonus in respect of the fiscal year in which occurs the
Separation from Service, and (b) is the amount payable
pursuant to Section 6.1(A)(i) above.
(B) Pro-Rata Bonus for Year of
Termination . Within five (5) days of such Separation from
Service, the Company shall pay to the Executive a lump sum cash
amount (the “Pro-Rata Bonus”) equal to the product of
(i) the target annual bonus or incentive award applicable to
the Executive under each of the Company’s annual bonus or
incentive compensation plans (such target award to be determined
pursuant to the provisions of each such plan or, if no such
provisions exist in the case of any such plan, as determined by the
Board in its sole discretion), in respect of the year in which such
Separation from Service occurs and (ii) a fraction, the
numerator of which shall be the number of months (including
fractions thereof) from the first day of the year during which such
Separation from Service occurs to the date on which such Separation
from Service occurs, and the denominator of which shall be twelve
(12); provided , however , that if such Separation
from Service occurs during the same year in which the Change in
Control occurs, the Pro Rata Bonus shall be offset by any payments
received by the Executive pursuant to Section 5.4(A)
hereof.
(C) Vesting of Unvested
Non-Qualified Plan Accruals Prior to the Date of Termination .
If the Executive was participating immediately prior to the Date of
Termination or the Change in Control in any of the Company’s
non-qualified employee pension benefit plans (including without
limitation the Company’s Supplemental Senior Officer
Retirement Plan and Supplemental Executive Retirement Plan and any
non-qualified defined contribution employee pension benefit plan
but excluding any severance pay plan) and on the Date of
Termination was not fully vested in benefits accrued through the
Date of Termination under any such plan in
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which s/he was so participating,
then the Executive shall be entitled to receive pursuant to this
Section 6.1(C) benefits equal to the benefits accrued by the
Executive under those plans prior to the Date of Termination that
are not vested on that date that would vest under those plans if
the Executive’s age and service credit for vesting purposes
were equal to the Executive’s age and service credit as
calculated under the provisions of such plans as of the Date of
Termination plus the lesser of (i) 24 months, or (ii) the
number of months (including fractions of a month) from the Date of
Termination to the date of death of the Executive. The intent of
this provision is to give the Executive 24 months of age and
service credit for vesting under such non-qualified employee
pension benefit plans in excess of the Executive’s actual age
and service credit as of the Date of Termination as determined
under such plans, if and to the extent that such plans do not
otherwise give the Executive age and service credit for vesting for
the 24 month period following the Date of Termination and if and to
the extent that the Executive survives during that 24 month period.
Any benefits resulting from the additional age and service credit
for vesting provided hereby shall be payable at the time and in the
form of payment applicable to the Executive’s benefits under
the non-qualified employee pension benefit plan(s) in question. For
the avoidance of doubt, any benefits payable pursuant to the
foregoing provisions of this Section 6.1(C) in respect of the
Executive’s unvested benefits under the Supplemental Senior
Officer Retirement Plan shall be payable at the time and in the
form of payment that would apply if such benefits were payable
under the Supplemental Senior Officer Retirement Plan, any benefits
payable pursuant to the foregoing provisions of this
Section 6.1(C) in respect of the Executive’s unvested
benefits under the Supplemental Executive Retirement Plan shall be
payable at the time and in the form of payment that would apply if
such benefits were payable under the Supplemental Executive
Retirement Plan, and so on.
(D) Payments in Respect of
Unvested Qualified Defined Benefit Plan Accruals Prior to the Date
of Termination . If the Executive was participating immediately
prior to the Date of Termination or the Change in Control in any of
the Company’s qualified defined benefit employee pension
benefit plans (including without limitation the Company’s
Salaried Retirement Income Plan)(“Qualified Plan”) and
on the Date of Termination was not fully vested in benefits accrued
through the Date of Termination under any such plan in which s/he
was so participating, then the Executive shall be entitled to
receive pursuant to this Section 6.1(D) benefits equal to the
benefits accrued by the Executive under those plans prior to
the
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Date of Termination that are not
vested on that date that would vest under those plans if the
Executive’s age and service credit for vesting purposes were
equal to the Executive’s age and service credit as calculated
under the provisions of such plans as of the Date of Termination
plus 24 months. The intent of this provision is to give the
Executive 24 months of age and service credit for vesting under
such qualified defined benefit employee pension benefit plans in
excess of the Executive’s actual age and service credit as of
the Date of Termination as determined under such plans, if and to
the extent that such plans do not otherwise give the Executive age
and service credit for vesting for the 24 month period following
the Date of Termination, and provided that the Executive survives
to the payment date set forth in the next sentence. Any benefits
resulting from the additional age and service credit for vesting
provided by the preceding provisions of this Section 6.1(D)
shall be paid in an actuarial equivalent lump sum on March 1
of the calendar year following the calendar year in which the Date
of Termination occurs, but only if the Executive survives to that
March 1 date. Nothing herein shall alter any Qualified Plan or
any rights the Executive may have under any Qualified
Plan.
(E) Payments in Respect of
Unvested Account Balances as of the Date of Termination under
Qualified Defined Contribution Plans . If the Executive was
participating immediately prior to the Date of Termination or the
Change in Control in any of the Company’s qualified defined
contribution employee pension benefit plans (including without
limitation a 401(k) plan or a qualified profit-sharing plan) and on
the Date of Termination was not fully vested in any amount
(including without limitation investment gains and losses) that had
been credited to the Executive through the Date of Termination (the
“Unvested Account Balance”) under any such plan in
which s/he was so participating, then, on March 1 of the
calendar year following the calendar year in which the Date of
Termination occurs, the Company shall pay the Executive, if s/he is
then surviving, an amount equal to the portion of the Unvested
Account Balance that would vest during the 24 month period
following the Date of Termination (and that will not in fact vest
under the qualified defined contribution plan in question), if such
plan were to remain in effect during such 24 month period and the
Executive were able to and did continue to earn age credit and
service credit for vesting purposes under such plan until the last
day of such 24 month period; provided that, if and to the extent
necessary to comply with the contingent benefit rule set forth in
Treasury Regulation section 1.401(k)-1(e)(6), this sentence shall
not apply to the Executive’s Unvested Account Balance under a
401(k) plan
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unless the Executive made the
maximum elective deferrals under Section 402(g) of the Code or
the maximum elective contributions permitted under the terms of
such 401(k) plan in the years for which the employer contributions
from which the Unvested Account Balance was derived were credited.
The intent of this provision is to pay the Executive the portion of
the Unvested Account Balance that, disregarding any investment
gains or losses and any plan amendment or termination that may
occur after the Date of Termination, would vest if the Executive
were able to and did continue to earn age credit and vesting
service credit under the qualified defined contribution plan in
question during the 24 month period following the Date of
Termination, provided that the Executive survives to the
March 1 payment date set forth above in this
Section 6.1(E) and, in the case of any Unvested Account
Balance in a 401(k) plan, provided that the contingent benefit rule
set forth in Treasury Regulation section 1.401(k)-1(e)(6) is
satisfied. Nothing herein shall alter any qualified defined
contribution employee pension benefit plan or any rights the
Executive may have under any such plan.
(F) Defined Benefit Plan Accruals
for 24 Months After Date of Termination .
(i) If the Executive was
participating immediately prior to the Date of Termination or the
Change in Control in any of the Company’s qualified or
non-qualified defined benefit employee pension benefit plans
(including without limitation the Company’s Salaried
Retirement Income Plan, Supplemental Senior Officer Retirement Plan
and Supplemental Executive Retirement Plan but excluding any
severance pay plan), then, on March 1 of the calendar year
following the calendar year in which the Date of Termination
occurs, the Company shall pay the Executive, if s/he is then
surviving, a lump sum amount which is actuarially equivalent to the
vested benefits which the Executive would accrue during the 24
month period following the Date of Termination under the qualified
and non-qualified defined benefit employee pension benefit plans in
which the Executive was participating immediately prior to the
Separation from Service or, if more favorable to the Executive,
immediately prior to the Change in Control (the “Relevant
Plans”), if — (a) the Relevant Plans were to
remain in effect during such 24 month period and the Executive were
able to and did continue to earn age credit, service credit and
compensation credit for benefit accrual and vesting purposes under
such plans during such 24 month
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period (in addition to the
Executive’s age, service credit and compensation credit
through the Date of Termination), and (b) the
Executive’s compensation for purposes of those plans for the
year in which the Change in Control occurred included, if and to
the extent it is not otherwise included (but only if and to the
extent that bonuses are pensionable pursuant to those plans) a
bonus in the amount payable pursuant to Section 5.4 hereof
paid in equal installments ratably over the portion of that year
that precedes the Change in Control, and (c) the
Executive’s compensation for purposes of those plans for the
year in which the Date of Termination occurs included, if and to
the extent it is not otherwise included (but only if and to the
extent that bonuses are pensionable pursuant to those plans) a
bonus in the amount payable pursuant to Section 6.1(B) hereof
paid in equal installments ratably over the portion of the year in
which the Date of Termination occurs that precedes the Date of
Termination, and (d) the Executive’s compensation during
the 24 month period following the Date of Termination for purposes
of those plans consisted of salary equal to 2 times the amount
referred to in Section 6.1(A)(ii)(a)(I) hereof paid in equal
installments ratably over that 24 month period and (if and to the
extent that bonuses are pensionable pursuant to those plans) a
bonus equal to 2 times the amount referred to in
Section 6.1(A)(ii)(a)(II) hereof paid in equal installments
ratably over that 24 month period. Actuarial equivalence shall be
determined using the actuarial factors and assumptions applicable
to the plan in question.
(ii) In calculating the vested
benefits which the Executive would accrue during the 24 month
period following the Date of Termination under the Company’s
Supplemental Senior Officer Retirement Plan (“SSORP”)
pursuant to Section 6.1(F)(i) above, the offset for Qualified
Plan benefits under the SSORP shall take into account (as if they
were payable under the Qualified Plan) any benefits payable
pursuant to this Section 6.1(F) in respect of Qualified Plan
benefits. “Qualified Plan” as used in this
Section 6.1(F) shall have the same meaning as in the SSORP.
The intent of the preceding provisions of this
Section 6.1(F)(ii) is to ensure that the Qualified Plan
benefits that are offset in determining the SSORP benefits that
would be accrued during the 24 month period following the Date of
Termination pursuant to Section 6.1(F)(i) above take into
account the Executive’s Qualified Plan benefits as enhanced
by the benefits payable in respect of the Qualified Plan pursuant
to this Section 6.1(F).
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(iii) In calculating the vested
benefits which the Executive would accrue during the 24 month
period following the Date of Termination under the Company’s
Supplemental Executive Retirement Plan (“SERP”)
pursuant to Section 6.1(F)(i) above, any benefits payable
pursuant to this Section 6.1(F) in respect of the Qualified
Plan, the Retirement Benefit Equalization Plan (“RBEP”)
or the SSORP shall be taken into account. The intent of the
preceding sentence is to ensure that the vested SERP benefits that
would be accrued during the 24 month period following the Date of
Termination pursuant to Section 6.1(F)(i) above are based on
the Executive’s Qualified Plan benefits, RBEP benefits and
SSORP benefits as enhanced by the benefits payable in respect of
those plans pursuant to this Section 6.1(F).
(G) Defined Contribution Plan
Accruals for 24 Months After Date of Termination . If the
Executive was participating immediately prior to the Date of
Termination or the Change in Control in any of the Company’s
qualified or non-qualified defined contribution employee pension
benefit plans (including without limitation a 401(k) plan or a
qualified profit-sharing plan), then, on March 1 of the
calendar year following the calendar year in which the Date of
Termination occurs, the Company shall pay the Executive, if s/he is
then surviving, an amount equal to the employer contributions (if
any) that would have been credited to the Executive and would have
vested during the 24 month period following the Date of Termination
(but are not so credited or vested) under any qualified or
non-qualified defined contribution employee pension benefit plan in
which the Executive was participating immediately prior to the Date
of Termination or, if more favorable to the Executive, immediately
prior to the Change in Control, if (i) the Executive were able
to and did continue to earn age credit, service credit and
compensation credit for benefit accrual and vesting purposes under
such plan during that 24 month period, and (ii) the
Executive’s compensation for purposes of that plan for the
year in which the Change in Control occurred included, if and to
the extent it is not otherwise included, a bonus (but only if and
to the extent that bonuses are eligible for employer contributions
under such plan) in the amount payable pursuant to Section 5.4
hereof paid in equal installments ratably over the portion of that
year that precedes the Change in Control, and (iii) the
Executive’s
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compensation during the 24 month
period following the Date of Termination for purposes of that plan
consisted of salary equal to 2 times the amount referred to in
Section 6.1(A)(ii)(a)(I) hereof paid in equal installments
ratably over that 24 month period and bonus (if and to the extent
that bonuses are eligible for employer contributions under such
plan) equal to 2 times the amount referred to in
Section 6.1(A)(ii)(a)(II) hereof paid in equal installments
ratably over that 24 month period, and (iv) in the case of any
contributory defined contribution employee pension benefit plan
such as a 401(k) plan, the Executive were able to and did
contribute the maximum matchable employee contributions to the plan
during the 24 month period after the Date of Termination, and
(v) the same employer contributions were made to the plan
during that 24 month period as a percentage of Compensation and, in
the case of a contributory plan, as a percentage of employee
contributions, as were made in respect of the last full plan year
preceding the Date of Termination or, if more favorable to the
Executive, preceding the Change in Control, and (vi) the same
qualified plan limits on compensation, contributions and benefits
that applied in respect of such last full plan year continued to
apply during the 24 months following the Date of Termination. No
payment shall be made pursuant to the preceding sentence in respect
of the employer contributions that would have been credited to the
Executive and would have vested under a 401(k) plan unless the
Executive made the maximum elective deferrals under
Section 402(g) of the Code or the maximum elective
contributions permitted under the terms of the 401(k) plan in which
the Executive was participating immediately prior to the Date of
Termination or, if more favorable to the Executive, immediately
prior to the Change in Control, in the year in which the Date of
Termination occurs or, if the 401(k) plan in which the Executive
was participating immediately prior to the Change in Control was
more favorable to the Executive than the 401(k) plan in which the
Executive was participating immediately prior to the Date of
Termination, in the year in which the Change in Control occurred.
The preceding sentence is intended to apply only if and to the
extent the preceding sentence is necessary to comply with the
contingent benefit rule set forth in Treasury Regulation section
1.401(k)-1(e)(6), and it shall be administered, interpreted and
construed accordingly.
(H) Perquisite Allowance . If
immediately prior to the Date of Termination or the Change in
Control the Company was paying the Executive a cash allowance in
lieu of a company-provided car, cell phone usage, club membership
or other perquisites (a “Perquisite Allowance”), then,
on March 1 of the calendar year following the calendar year in
which the Date
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of Termination occurs, the Company
shall pay the Executive, if s/he is then surviving, an amount equal
to 24 times the average monthly Perquisite Allowance the Company
was paying the Executive immediately prior to the Date of
Termination or, if more favorable to the Executive, immediately
prior to the Change in Control.
(I) Health Care Benefits .
For the twenty-four month period immediately following the Date of
Termination or until the earlier death of the Executive (the
“Benefits Period”), the Company shall continue to
provide the Executive with the same medical and dental coverage
which the Executive was receiving immediately prior to the Date of
Termination or, if more favorable to the Executive, immediately
prior to the Change in Control (the “Health Care
Benefits”). For the avoidance of doubt, the Company shall pay
or reimburse the Executive for the same medical and dental expenses
which were subject to payment or reimbursement under the medical
and dental insurance coverage which the Executive was receiving
immediately prior to the Date of Termination or, if more favorable
to the Executive, immediately prior to the Change in Control. The
Health Care Benefits shall be provided in such a manner that such
benefits will be excluded from the Executive’s income for
federal income tax purposes. The receipt of the Health Care
Benefits shall be conditioned on the Executive continuing to pay
the applicable premiums for such Health Care Benefits during the
Benefits Period. The applicable monthly premium shall be the
monthly COBRA premium as in effect at the Company from time to time
with respect to the coverage provided under Section 4980B of
the Code. Except as permitted by Treasury Regulation section
1.409A-3(i)(4)(B), the amount of medical and dental expenses that
are subject to Section 409A of the Code and not excluded
therefrom as involuntary separation pay or otherwise and that are
subject to reimbursement pursuant to this Section 6.1(I)
during any taxable year of the Executive may not affect the
expenses eligible for reimbursement in any other taxable year, and
shall be reimbursed at the time required by the plan applicable to
the Executive immediately prior to the Date of Termination or, if
more favorable to the Executive, immediately prior to the Change in
Control but in no event later than the last day of the
Executive’s taxable year following the taxable year in which
the expense was incurred.
(J) Additional Payments .
During the Benefits Period, and subject to Section 12(B) below
(relating to the six month delay applicable to Specified
Employees), the Company shall pay to the Executive an amount equal
to the monthly premium cost set forth in Section 6.1(I) above,
minus an
Page 13 of 37 pages
amount equal to the monthly employee
contribution rate that is paid by Company employees for the
applicable level of such coverage immediately prior to the Date of
Termination or, if more favorable to the Executive, immediately
prior to the Change in Control, which payment shall be paid in
advance on the first payroll day of each month, commencing with the
first such payroll day that coincides with or next follows the Date
of Termination. Each month, when the Company pays the amount
required by the preceding sentence, the Company shall also pay the
Executive a tax gross-up on the amount paid pursuant to the
preceding sentence, i.e., an amount sufficient after taxes on the
tax gross-up paid pursuant to this sentence to reimburse the
Executive for any Federal, state, local or foreign taxes imposed
upon the Executive as a result of the Company’s payment of
the amount required by the preceding sentence. For purposes of
determining the amount of the tax gross-up to be paid pursuant to
this Section 6.1(J) or pursuant to any other provision of this
Agreement or any other plan or arrangement pursuant to which the
Executive is entitled to receive a tax gross-up after a Change in
Control and during the Term, the Executive shall notify the Company
from time to time of the highest effective marginal rates at which
the Executive’s income is taxed under any applicable Federal,
state, local and foreign laws and such rates shall be conclusive on
the Company for purposes of determining the amount of the tax
gross-up to be paid, and in no event shall the Executive be
required to disclose his tax returns to the Company or otherwise
for the purpose of determining the amount of the tax gross-up to be
paid.
(K) SEELIP Benefits . If the
Executive was a participant in the Company’s Senior Executive
Enhanced Life Insurance Program immediately prior to the Date of
Termination or the Change in Control, then during the Benefits
Period the Company shall provide the Executive with the same
benefits, if any, under the Company’s Senior Executive
Enhanced Life Insurance Program as in effect immediately prior to
the Separation from Service or, if more favorable to the Executive,
immediately prior to the Change in Control (the
“SEELIP”), at the same times, that the Company would
have provided if the SEELIP had remained in effect and the
Executive’s active employment and participation in the SEELIP
had continued (and no Separation from Service had occurred) until
the end of the Benefits Period and the Executive’s annual
base salary during the Benefits Period for purposes of the SEELIP
had been equal to the amount referred to in
Section 6.1(A)(ii)(a)(I) hereof. In no event shall this
Section 6.1(K) entitle the Executive to benefits that
duplicate any SEELIP benefits
Page 14 of 37 pages
that the Executive is entitled to
receive at the same time other than pursuant to this Section (K).
If any premiums or other “Reimbursements” (as such term
is defined in the SEELIP as amended in December 2008) that would be
payable by the Company pursuant to the preceding provisions of this
Section 6.1(K) during the six month period following the
Separation from Service are not paid during that six month period
due to the six month delay imposed by Section 12(B) hereof,
then (i) the Company shall timely provide the Executive with
the oppor
