Exhibit 10.5
May 6, 2011
__________
__________
Oceaneering International, Inc.
11911 FM 529
Houston, Texas 77041
Re: Change of Control Agreement
Dear __________:
Oceaneering International, Inc. (the “Company”) considers the establishment and
maintenance of a sound and vital management to be essential for the protection
and enhancement of the best interests of the Company and its shareholders. The
Company recognizes that, as is the case with many publicly held corporations,
the possibility of a “Change of Control” (as defined herein) may arise 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. Accordingly, the Board of
Directors of the Company (the “Board”) has determined that appropriate steps
should be taken to assure the Company of the continuation of your service and to
reinforce and encourage the attention and dedication of members of the Company’s
management to their assigned duties without distraction in circumstances arising
from the possibility of a Change of Control of the Company. In particular the
Board believes it important, should the Company or its shareholders receive a
proposal for or notice of transfer of control of the Company, or consider one
itself, that you be able to assess and advise the Company whether such transfer
would be or is in the best interests of the Company and its shareholders, and to
take such other action regarding such transfer as the Board might determine to
be appropriate without being influenced by the uncertainties of your own
situation.
In order to induce you to remain in the employ of the Company, this letter
agreement (this “Agreement”), prepared pursuant to authority granted by the
Board, sets forth the compensation and severance benefits which the Company
agrees will be provided to you should your employment with the Company be
terminated in connection with a Change of Control under the circumstances
described below, as well as certain other benefits which will be made available
to you.
Reference is made to Annex I hereto for definitions of certain terms used in
this Agreement, and such definitions are incorporated herein by such reference
with the same effect as if set forth herein. Certain capitalized terms used in
this Agreement in connection with the description of various Plans are defined
in the respective Plans, but if any conflicts with a definition herein
contained, this Agreement shall prevail.

1

--------------------------------------------------------------------------------

 

1.   Termination of Employment in Connection with a Change of Control.

  (a)   During the Effective Period, if there is a termination of your
employment with the Company either by the Company without Cause or by you for
Good Reason either (x) prior to the Effective Date, unless it is reasonably
demonstrated by the Company that such termination of your employment (a) was not
at the request of a third party who has taken steps reasonably calculated to
effect the Change of Control and (b) otherwise did not arise in connection with
or anticipation of the Change of Control or (y) on or after the Effective Date,
and if such Effective Period commences during the life of this Agreement, you
shall be entitled to the following benefits:

  (i)   all benefits conferred upon you by the Severance Package, and     (ii)  
in addition, all benefits payable under the provisions either of the Plans and
Other Plans in which you are a participant immediately prior to the Effective
Date, or of those plans in existence at the time of your Termination Date or
pursuant to any other agreement between you and the Company, whichever are more
favorable to you, in accordance with the terms and conditions of such Plans or
Other Plans, such benefits to be paid under such Plans or Other Plans and not
under this Agreement to the extent they are more favorable to you.

  (b)   You shall also be entitled to any such benefits if your termination
results from your death or Disability if your death or Disability occurs:

  (i)   during the Effective Period but after the Effective Date, and     (ii)  
with respect to the benefits conferred by the Severance Package only, after
either it has been decided that you will be terminated without Cause during the
Effective Period, or you have given notice of termination for Good Reason during
the Effective Period;

  (c)   You shall not be required to mitigate the amount of any payment provided
for in this Agreement by seeking other employment, nor shall the amount of any
payment provided for in this Agreement be reduced by any compensation earned by
you as the result of employment by another Person after any Termination Date.

2.   Procedures for Termination of Employment.       If your employment be
terminated or intended to be terminated:

  (a)   For Cause, the Company shall transmit to you written notice setting
forth the Cause for which you are proposed to be dismissed in sufficient detail
to permit a reasonable assessment of the bona fides thereof, and setting a
meeting of the Board not less than 30 days following the date of such notice at
which the Board shall consider your termination and at which you and your
counsel shall have the opportunity to be heard, following which the Board shall
either by resolution

2

--------------------------------------------------------------------------------

 

      withdraw the notice, or if it so finds in its good faith opinion, issue
its report within 10 days thereafter that Cause exists and specifying the
particulars of its findings, in which latter event a “final notice” shall occur.
After receipt of a “final notice” of intended termination for Cause, you may
contest such “final notice” in any court described in Section 4(b)(i) and all
provisions of this Agreement, shall be continued until a Termination Date is
determined pursuant to such contest. Within 10 days following the commencement
of any such contest, the Company must escrow all amounts which would have been
due pursuant to Section 1(a) if the “final notice” were not valid, at a bank of
your choice. Should the result of the contest from which no further appeal is
possible be that the:

  (i)   “final notice” is valid, then the Termination Date shall be the date no
further appeal is possible;     (ii)   “final notice” is not valid, then the
Termination Date shall be the date no further appeal is possible.

  (b)   For Good Reason, you shall transmit to the Company written notice
setting forth the Good Reason for which you are proposed to terminate your
employment in sufficient detail to permit a reasonable assessment of the bona
fides thereof. The Board shall issue a resolution to you not more than 10 days
following the date of such notice as to either:

  (i)   Their Acceptance — In the event the Board accepts your notice of Good
Reason, then the Termination Date is established and you are entitled to receive
the amounts pursuant to Section 1(a); or     (ii)   Their Rejection — In the
event the Board rejects your notice of Good Reason, then (A) the Company must
escrow within 10 days following the rejection the amounts which would have been
due pursuant to Section 1(a) if your termination for Good Reason had been
accepted, at a bank of your choice, (B) you must proceed to dispute resolution
pursuant to Section 4, and (C) all provisions of this Agreement shall be
continued until a termination is determined pursuant to such dispute resolution
from which no further appeal is possible. The Termination Date shall be the date
on which no further appeal is possible.

3.   Excise Tax.

Notwithstanding anything in this Agreement to the contrary, if any amounts due
to you under this Agreement and any other plan or program of the Company
constitute a “parachute payment” as such term is defined in Section 280G(b)(2)
of the Internal Revenue Code of 1986, as amended (the “Code”), and the amount of
the parachute payment, reduced by all federal, state and local taxes applicable
thereto, including the excise tax imposed pursuant to Section 4999 of the Code,
is less than the amount you would receive if you were paid three times your
“base amount,” as defined in Section 280G(b)(3) of the Code, less $1.00, reduced
by all

3

--------------------------------------------------------------------------------

 

federal, state and local taxes applicable thereto, then the aggregate of the
amounts constituting the parachute payment shall be reduced to an amount that
will equal three times your base amount less $1.00. This reduction in parachute
payments will be taken only from (a) first, the cash payable under subsection
(a) of the definition of Severance Package hereunder and (b) if further
reduction is necessary, from performance awards (in chronological order
beginning with the oldest) but only to the extent the value of such award for
parachute payment purposes is equal to the economic value of such award. All
determinations required to be made under this Section 3 shall be made by the
independent public accounting firm selected by the Company, subject to your
consent which will not be unreasonably withheld, conditioned or delayed, and the
fees and expenses of the accounting firm will be paid by the Company. The
accounting firm shall provide detailed supporting calculations both to the
Company and you. Absent manifest error, any determination by the accounting firm
shall be binding upon the Company and you.

4.   Dispute Resolution.

  (a)   This Agreement shall be governed in all respects, including as to
validity, interpretation and effect, by the internal laws of the State of Texas
without regard to choice of law principles.     (b)   It is irrevocably agreed
that if any dispute arises with respect to any action, suit or other legal
proceeding pertaining to this Agreement or to the interpretation of or
enforcement of any of your rights under this Agreement:

  (i)   the Company and you agree that exclusive jurisdiction for any such suit,
action or legal proceeding shall be in the state district courts of Texas
sitting in Harris County, Texas;     (ii)   the Company and you are each at the
time present in Texas for the purpose of conferring personal jurisdiction;    
(iii)   the Company and you each consent to the jurisdiction of each such court
in any such suit, action or legal proceeding and will comply with all
requirements necessary to give such court jurisdiction;     (iv)   the Company
and you each waive any objection it may have to the laying of venue of any such
suit, action or legal proceeding in any of such court;     (v)   the Company and
you each waive any objection or right to removal that may otherwise arise in any
such suit, action or legal proceeding;     (vi)   any such suit, action or legal
proceeding may be brought in such court, and any objection that the Company or
you may now or hereafter have to the venue of such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient
court is waived;

4

--------------------------------------------------------------------------------

 

  (vii)   service of process in any such suit, action or legal proceeding may be
effected by mailing a copy thereof by registered or certified mail, return
receipt requested (or any substantially similar form of mail), postage prepaid,
to such party provided in Section 7 hereof; and     (viii)   prior to any trial
on the merits, the Company and you will submit to court supervised, non-binding
mediation.

  (c)   Notwithstanding any contrary provision of Texas law, the Company shall
have the burden of proof with respect to any of the following:

  (i)   that Cause existed at the time any notice was given to you under
Section 2;     (ii)   that Good Reason did not exist at the time notice was
given to the Company under Section 2;     (iii)   that the Company is not in
default in performance of its obligations under this Agreement;     (iv)   that
the termination of your employment was not at the request of a third party who
has taken steps reasonably calculated to effect the Change of Control and
otherwise did not arise in connection with or anticipation of the Change of
Control; and     (v)   that a Change of Control has not occurred.

5.   Successors; Binding Agreement.

  (a)   In the event any Successor does not assume this Agreement by operation
of law, the Company will seek to have any Successor, by agreement in form and
substance reasonably satisfactory to you, 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 there has been a Change of Control prior to, or a
Change of Control will result from, any such succession, then failure of the
Company to obtain at your request such agreement prior to or upon the
effectiveness of any such succession (unless assumption occurs as a matter of
law) shall constitute Good Reason for termination by you of your employment and,
upon delivery of a notice of termination by you to the Company, you shall be
entitled to the benefits provided for herein.     (b)   This Agreement shall
inure to the benefit of and be enforceable by your personal and legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees.

5

--------------------------------------------------------------------------------

 

6.   Fees and Expenses.

The Company shall reimburse you for all legal and other costs (including but not
limited to, administrative, accounting, tax, human resource and expert witness
fees and expenses) incurred by you as a result of your seeking to obtain, assert
or enforce any right or benefit conferred upon you by this Agreement.
You shall submit all invoices for such costs to the Company no later than
30 days prior to the end of the taxable year following the taxable year in which
they were incurred. The Company shall reimburse you for such costs within
14 days of receipt of such invoices.

7.   Notices.

Any and all notices required or permitted to be given hereunder shall be in
writing and shall be deemed to have been given when delivered in person to the
persons specified below or deposited in the United States mail, certified or
registered mail, postage prepaid and addressed as follows:

     
If to the Company:
  Oceaneering International, Inc.
 
   
 
  11911 FM 529
 
  Houston, Texas 77041
 
  Attention: Chief Executive Officer
 
   
If to you:
  ________________
 
   
 
  ________________
 
  ________________

Either party may change, by the giving of notice in accordance with this
Section 7, the address to which notices are thereafter to be sent.

8.   Indemnity.

You will receive, to the fullest extent possible and to such greater extent as
applicable law hereafter may permit, indemnity from the Company on terms at
least as favorable as that provided under (i) any Indemnity Agreement of the
Company to which you are a party or an intended beneficiary, or (ii) the
Company’s Bylaws as in effect on the Effective Date or, if earlier, your
Termination Date.

6

--------------------------------------------------------------------------------

 

9.   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.

10.   Survival.

All obligations undertaken and benefits conferred pursuant to this Agreement,
shall survive any termination of your employment and continue until performed in
full.

11.   Miscellaneous.

  (a)   No provision of this Agreement may be modified, waived or discharged
unless such modification, waiver or discharge is agreed to in writing signed by
you and the Company. No waiver by either party hereto at any time of any breach
by the other party hereto of, or of 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.     (b)   Failure to
pay within 10 days of a payment due date or notice thereon (whether payment is
disputed or not) will result in a default under this Agreement. Past due amounts
will accrue interest and compound at the lesser of 2% per month or the highest
interest rate allowed by applicable law.

12.   Duplicate Originals.

This Agreement has been executed in duplicate originals, with one to be held by
each of the parties hereto.

13.   Section 409A.

  (a)   Notwithstanding anything in this Agreement to the contrary, if any
provision of this Agreement would result in the imposition of an additional tax
under Section 409A of the Code, that provision of this Agreement will be
reformed to avoid imposition of the applicable tax and no action taken to comply
with Section 409A of the Code shall be deemed to adversely affect your rights to
the benefits provided by this Agreement. This Agreement is intended to comply
with Section 409A of the Code, and ambiguous provisions hereof, if any, shall be
construed and interpreted in a manner that is compliant with the application of
Section 409A of the Code. The Agreement shall neither cause nor permit any
payment, benefit or consideration to be substituted for a benefit that is
payable under this Agreement if such action would result in the failure of any
amount that is subject to Section 409A of the Code to comply with the applicable
requirements of

7

--------------------------------------------------------------------------------

 

      Section 409A of the Code. You shall have no right to specify the calendar
year during which any payment hereunder shall be made.

  (b)   Notwithstanding any provision in this Agreement to the contrary, this
Agreement shall not be amended or terminated in such manner that would cause
this Agreement or any amounts or benefits payable hereunder to fail to comply
with the requirements of Section 409A of the Code, to the extent applicable, and
any such amendment or termination that may reasonably be expected to result in
such non-compliance shall be of no force or effect.     (c)   If you are a
“Specified Employee” (as defined under Section 409A of the Code) as of the date
of your “Separation from Service” (as defined under Section 409A of the Code) as
determined by the Company, the payment of any amount under this Agreement on
account of your Separation from Service that is deferred compensation subject to
the provisions of Section 409A of the Code and not otherwise excluded from
Section 409A of the Code, shall not be paid until the earlier of your death or
the later of the first business day that is six months after the date after your
Separation from Service or the date the payment is otherwise payable under this
Agreement (the “Delay Period”). Upon the expiration of the Delay Period, all
payments and benefits delayed pursuant to this Section (whether they would have
otherwise been payable in a single sum or in installments in the absence of such
delay) shall be paid or reimbursed to you in a lump sum, without interest, and
any remaining payments due under this Agreement shall be paid or provided in
accordance with the normal payment dates specified for them herein.     (d)  
All reimbursements or provision of in-kind benefits pursuant to this Agreement
shall be made in accordance with Treasury Regulation §1.409A-3(i)(1)(iv) such
that the reimbursement or provision will be deemed payable at a specified time
or on a fixed schedule relative to a permissible payment event. Specifically,
the amounts reimbursed or in-kind benefits provided under this Agreement during
one taxable year may not affect the amounts reimbursed or provided in any other
taxable year, the reimbursement of an eligible expense shall be made on or
before the last day of the taxable year following the taxable year in which the
expense was incurred, and the right to reimbursement or provision of an in-kind
benefit is not subject to liquidation or exchange for another benefit.
Notwithstanding any provision to the contrary in this Agreement, you agree that
you shall submit reimbursable expenses to the Company no later than 30 days
prior to the end of the taxable year following the taxable year in which they
were incurred.

8

--------------------------------------------------------------------------------

 

  (e)   An entitlement to a series of payments under this Agreement will be
treated as an entitlement to a series of separate payments.

If this letter correctly sets forth our understanding with respect to the
subject matter hereof, please sign and return one copy of this letter to the
Company.

            Sincerely,

OCEANEERING INTERNATIONAL, INC.
      BY           M. Kevin McEvoy        President and Chief Executive Officer 
   

Agreed to as of the ____
day of ________ 2011:
________________________

9

--------------------------------------------------------------------------------

 

ANNEX I
TO CHANGE OF CONTROL AGREEMENT DATED MAY 6, 2011
BETWEEN
OCEANEERING INTERNATIONAL, INC.
AND
 
Definition of Certain Terms
“AGREEMENT” means this Change of Control Agreement between you and the Company
dated as of May 6, 2011.
“BASE SALARY” means your annual salary as determined by the Company.
“BOARD” means the Board of Directors of the Company.
“BYLAWS” means the bylaws of the Company, except as otherwise specified, as in
effect at the day hereof and as the same shall be amended or otherwise modified
to, but not on or after, any Change of Control.
“CAUSE” means your conviction by a court of competent jurisdiction, from which
conviction no further appeal can be taken, of a felony-grade crime involving
moral turpitude related to your employment with the Company.
“CHANGE OF CONTROL” means the earliest date at which:

  (i)   any Person is or becomes the “beneficial owner” (as defined in
Rule 13d-3 under the Exchange Act), directly or indirectly, of securities of the
Company representing 20% or more of the combined voting power of the Company’s
outstanding Voting Securities, other than through the purchase of Voting
Securities directly from the Company through a private placement; or     (ii)  
individuals who constitute the Board on the date hereof (the “Incumbent Board”)
cease for any reason to constitute at least a majority thereof, provided that
any person becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company’s shareholders, was approved by a vote of
at least two-thirds of the directors comprising the Incumbent Board shall from
and after such election be deemed to be a member of the Incumbent Board; or    
(iii)   the Company is merged or consolidated with another corporation or
entity, and as a result of such merger or consolidation, less than 60% of the
outstanding Voting Securities of the surviving or resulting corporation or
entity shall then be owned by the former stockholders of the Company; or

I-1

--------------------------------------------------------------------------------

 

  (iv)   the consummation of (a) a tender offer or (b) exchange offer by a
Person other than the Company for the ownership of 20% or more of the Voting
Securities of the Company then outstanding; or     (v)   all or substantially
all of the assets of the Company are sold or transferred to a Person as to
which: (a) the Incumbent Board does not have authority (whether by law or
contract) to directly control the use or further disposition of such assets; and
(b) the financial results of the Company and such Person are not consolidated
for financial reporting purposes.

Anything else in this definition to the contrary notwithstanding, no Change of
Control shall be deemed to have occurred by virtue of any transaction which
results in you, or a group of Persons which includes you, acquiring more than
20% of either the combined voting power of the Company’s outstanding Voting
Securities or the Voting Securities of any other corporation or entity which
acquires all or substantially all of the assets of the Company, whether by way
of merger, consolidation, sale of such assets or otherwise.
“COMPANY” means Oceaneering International, Inc., a Delaware corporation.
“DISABILITY” means your continuing full-time absence from your duties with the
Company for 90 days or longer as a result of physical or mental incapacity,
which absence is anticipated to extend for 90 additional days or longer. Your
need for absence and its anticipated duration shall be determined solely by a
medical physician of your choice to be approved by the Company, which approval
shall not be unreasonably withheld.
“EFFECTIVE DATE” means the earliest date upon which (i) any of the events set
forth under the definition of Change of Control shall have occurred, (ii) the
receipt by the Company of a Schedule 13D stating the intention of any Person to
take actions which, if accomplished, would constitute a Change of Control,
(iii) the public announcement by any Person of its intention to take any such
action, in each case without regard for any contingency or condition which has
not been satisfied on such date, (iv) the agreement by the Company to enter into
a transaction which, if consummated, would result in a Change of Control, or
(v) consideration by the Board of a transaction which, if consummated, would
result in a Change of Control.
If, however, an Effective Date occurs but the proposed transaction to which it
relates ceases to be actively considered or it is not consummated within
12 months of such Effective Date, the Effective Period will be deemed not to
have commenced for purposes of this Agreement. If an Effective Date occurs with
respect to a proposed transaction which ceases to be actively considered but for
which active consideration is revived, the Effective Date with respect to the
Change of Control that ultimately occurs shall be that date when consideration
was revived and carried through to consummation.
“EFFECTIVE PERIOD” means the period beginning on the Effective Period
Commencement Date and ending on the Effective Period Conclusion Date.
“EFFECTIVE PERIOD COMMENCEMENT DATE” means the date falling one year prior to
the Effective Date.

I-2

--------------------------------------------------------------------------------

 

“EFFECTIVE PERIOD CONCLUSION DATE” means the date falling two years after the
occurrence of a merger or consolidation set forth under clause (iii) of the
definition of Change of Control, but in no event later than three years after
the first event that constituted a Change of Control.
“EXCHANGE ACT” means the Securities Exchange Act of 1934, as amended, and the
rules and regulations promulgated thereunder.
“FISCAL YEAR BONUS PLAN” means for each year, the Company’s fiscal year bonus
plan, or any other plan adopted by the Board which provides for the payment of
additional compensation or equity consideration on an annual basis to senior
executive officers contingent upon the Company’s performance, including stock
performance and results of operations for that specific year, in either case as
such plan shall be amended or modified prior to, but not on or after, any
Termination Date.
“GOOD REASON” means any of the following:

  (i)   except as a result of your death or due to Disability, a change in your
status, title(s) or position(s) with the Company, including as an officer of the
Company, which, in your reasonable judgment, does not represent a promotion,
with commensurate adjustment of compensation, from your status, title(s) and
position(s) immediately prior to the Effective Date; or the withdrawal from you
of any duties or responsibilities which in your reasonable opinion are
consistent with such status, title(s) or position(s); or any removal of you from
or any failure to reappoint or reelect you to such position(s); or     (ii)   a
reduction by the Company in your annual Base Salary, SERP (or equivalent),
annual bonus opportunity or aggregate long-term incentive compensation in effect
immediately prior to the Effective Date and as may subsequently be increased
thereafter; or     (iii)   the failure by the Company to continue in effect any
Plan in which you were participating immediately prior to the Effective Date
other than as a result of the normal expiration or amendment of any such Plan in
accordance with its terms, or the taking of any action, or the failure to act,
by the Company which would adversely affect your continued participation in any
such Plan on at least as favorable a basis to you as is the case immediately
prior to the Effective Date or which would materially reduce your benefits under
any of such Plans or deprive you of any material benefit enjoyed by you
immediately prior to the Effective Date, except as proposed by you to the
Company; or     (iv)   the relocation of the principal place of your employment
to a location 25 miles further from your principal residence without your
express written consent; or

I-3

--------------------------------------------------------------------------------

 

  (v)   the failure by the Company upon a Change of Control to obtain the
assumption of this Agreement by any Successor (other than by operation of law);
or     (vi)   any refusal by the Company to continue to allow you to attend to
matters or engage in activities not directly related to the business of the
Company which you attended to or were engaged in immediately prior to a Change
of Control which do not otherwise violate your obligations hereunder; or    
(vii)   any default by the Company in the performance of its obligations under
this Agreement, whether before or after a Change of Control.

“INDEMNITY AGREEMENT” means that certain agreement between you and the Company
dated as of ___________, 20___, and any successor thereto.
“LONG-TERM INCENTIVE BONUS PLAN” means the Company’s long-term incentive plans
(including agreements issued thereunder, e.g., Restricted Stock Agreements and
Stock Option Agreements) or any other plan or agreement approved by the Board,
other than the Fiscal Year Bonus Plan, which provides for the payment of
additional compensation or equity consideration to senior executive officers
contingent on the Company’s performance, including stock performance and results
of operations for a specific time period, and in either case, as such plan may
be amended or modified prior to, but not on or after, any Termination Date.
“MARKET VALUE” when used with respect to a Share, means (i) if Shares are listed
or quoted on a national securities exchange, the closing price per Share
reported or quoted on the consolidated transaction reporting system for the
principal national securities exchange on which Shares are listed or quoted on
that date, or, if there shall have been no such sale so reported or quoted on
that date, on the last preceding date on which such a sale was so reported or
quoted, (ii) if Shares are not so listed or quoted, the closing price on that
date, or, if there are no quotations available for such date, on the last
preceding date on which such quotations shall be available, as reported by the
Nasdaq Stock Market, Inc., or, if not reported by the Nasdaq Stock Market, Inc.,
by the National Quotation Bureau Incorporated, or (iii) if Shares are not
publicly traded, the most recent value determined by an independent appraiser
appointed by the Company for such purpose.
“OTHER PLANS” means any thrift; bonus or incentive; stock option or stock
accumulation; pension; medical, disability, accident or life insurance plan,
program or policy of the Company which is intended to benefit employees of the
Company that are similarly situated to you (other than the Plans or as otherwise
provided to you in this Agreement).
“PERSON” means any individual, corporation, partnership, group, association or
other “person,” as such term is used in Sections 13(d) and 14(d) of the Exchange
Act, other than the Company or any Plans sponsored by the Company.
“PLANS” means the Fiscal Year Bonus Plan, the Long-Term Incentive Bonus Plan and
the SERP.

I-4

--------------------------------------------------------------------------------

 

“RESTRICTED STOCK AGREEMENTS” means any grant by the Company to you of Shares
which are, at the relevant time, subject to possible forfeiture.
“SERP” means the Company’s Supplemental Executive Retirement Plan, as the same
shall be amended or modified to, but not on or after, any Effective Date.
“SEVERANCE PACKAGE” means your right to receive, and the Company’s obligation to
pay and/or perform on, the following:

  (a)   On or within five days following an applicable Termination Date, the
Company shall pay to you a lump sum, cash amount equal to the sum of:

  (i)   two times the highest annual rate of your Base Salary in effect during
the then current year or any of the three years preceding the Termination Date;
and     (ii)   two times the target award you would have been eligible to
receive under the then current Fiscal Year Bonus Plan in respect of the then
current year, regardless of any limitations otherwise applicable to the then
current fiscal year (i.e., the failure to have completed any vesting period or
the current measurement period, or the failure to achieve any performance goal
applicable to all or any portion of the measurement period);

  (b)   All the outstanding contingent compensation issued or awarded to you
under the Plans shall become vested, exercisable, distributable and unrestricted
(any contrary provision in the Plans or Other Plans notwithstanding). You shall
have the right immediately to:

  (i)   for one year thereafter (or if earlier, until the expiration of the
option term), exercise all or any portion of all your options covered by any
Plan or Other Plans and to have the underlying Shares issued to you;     (ii)  
for one year thereafter, in lieu of such exercise as provided in Subsection
(b)(i) above, as elected by you, to receive a cash amount within five days
following an applicable Termination Date equal to the spread between the
exercise price and the higher Market Value of the shares, multiplied by the
number of shares of outstanding stock options;     (iii)   performance units,
restricted stock units, and any shares of restricted stock issued under the
Plans and Other Plans, shall be vested with all conditions to have been deemed
to have been satisfied at the maximum level (provided that such awards had not
theretofore been forfeited);     (iv)   obtain the full benefit of any other
contingent compensation rights to which you may be entitled under the Plans or
Other Plans, in each case as though all applicable performance targets had been
met or achieved at maximum levels for all performance periods (including those
extending beyond the Effective Date) and any Plan contingencies had been
satisfied

I-5

--------------------------------------------------------------------------------

 

      in full at the date of the Change of Control and the maximum possible
benefits thereunder had been earned at the date of the Change of Control; and

  (c)   The Company shall maintain in full force and effect for your continued
benefit for a two-year period after the Termination Date all Other Plans in
which you were entitled to participate immediately prior to the Termination Date
(at no greater cost or expense to you than was the case immediately prior to the
Change of Control), including without limitation, plans providing medical,
dental, life and disability insurance coverage, provided that your continued
participation is possible under the general terms and provisions of such plans
and programs. In the event that your participation in any such plan or program
is not possible, the Company shall arrange to provide you, at the Company’s cost
and expense, with benefits substantially similar to those which you are entitled
to receive under such plans and programs. This Agreement’s provision of
continued participation in the Company’s medical and dental plans is intended to
satisfy the Company’s obligation to provide such continuation coverage as
required by Section 4980B of the Code.

Anything else in this Agreement to the contrary notwithstanding, if:

  (i)   your employment is terminated in connection with a merger, consolidation
or a tender offer or an exchange offer;     (ii)   you are entitled to the
benefits provided for under Section 1 hereof; and     (iii)   your Termination
Date precedes or occurs on the date of the closing thereof, then unless
otherwise agreed to by both parties in writing, all amounts to which you are or
shall become entitled to under this Agreement, which are calculable as of the
closing date, shall be accelerated to, and become immediately due and payable
contemporaneously with such closing.

“SHARES” means shares of Common Stock, $.25 par value, of the Company at the
date of this Agreement, as the same may be subsequently amended, modified or
changed.
“STOCK OPTION AGREEMENTS” means any agreements providing for the grant by the
Company to you of options to purchase Shares.
“SUCCESSOR” shall mean any Person that succeeds to, or has the ability to
control, the Company’s business as a whole, directly by merger, consolidation,
spin-off or similar transaction, or indirectly by purchase of the Company’s
Voting Securities or acquisition of all or substantially all of the assets of
the Company.
“TERMINATION DATE” means the date, which is the final date of your service
pursuant to Section 2 of this Agreement.

I-6

--------------------------------------------------------------------------------

 

“VOTING SECURITIES” means, with respect to any corporation or business
enterprise, those securities, which under ordinary circumstances are entitled to
vote for the election of directors or others charged with comparable duties
under applicable law.

I-7