Exhibit 10.1
CHANGE OF CONTROL AGREEMENT
     This CHANGE OF CONTROL AGREEMENT by and between CLARCOR Inc., a Delaware
corporation (the “Corporation” or the “Company”), and NAME (the “Executive”) is
dated as of December 29, 2008.
W I T N E S S E T H
     WHEREAS, the Executive currently serves as Title of Name of Company and is
entitled to certain benefits in the event of a Change of Control (as defined
below) upon the terms and conditions set forth in that certain Employment
Agreement between the Corporation and the Executive on
                                                             (the “Former
Agreement”);
     WHEREAS, certain changes to the Former Agreement are necessary to comply
with various requirements under Section 409A (“Section 409A”) of the Internal
Revenue Code of 1986, as amended (“Code”); and
     WHEREAS the Compensation Committee of the Board of Directors of the
Corporation (the “Committee” and “Board”, respectively) and the Executive
believe it to be in the best interest of the Corporation and the Executive,
respectively, to terminate the Former Agreement and enter into the present
Change of Control Agreement in lieu thereof;
     NOW, THEREFORE, it is mutually agreed as follows:
Factual Background
     The Corporation wishes to attract and retain well-qualified executive and
key personnel and to assure both itself and the Executive of continuity of
management in the event of any actual or threatened Change of Control (as
defined in Section 2) of the Corporation. To achieve this purpose, the Committee
has approved this Agreement as being in the best interests of the Corporation
and its stockholders.
     1. Operation of Agreement. The “Effective Date of this Agreement” or
“Effective Date” shall be the date on which a Change of Control occurs.
     2. Change of Control. For the purpose of this Agreement, a “Change of
Control” shall mean:
          (a) The acquisition (other than from the Corporation) by any person,
entity or “group,” within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”), other than the
Corporation or a wholly-owned subsidiary or any employee benefit plan thereof,
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 30% or more of either the then outstanding

- 1 -

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

 

shares of common stock or the combined voting power of the Corporation’s then
outstanding voting securities entitled to vote generally in the election of
directors; provided, however, no Change of Control shall be deemed to have
occurred for any acquisition by any corporation with respect to which, following
such acquisition, more than 60% of such corporation and the combined voting
power of the then outstanding voting securities of such corporation entitled to
vote generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals or entities who
were the beneficial owners, respectively, of the then outstanding shares of
common stock or the combined voting power of the Corporation’s then outstanding
voting securities immediately prior to such acquisition in substantially the
same proportions as their ownership, immediately prior to such acquisition, of
the Corporation’s then outstanding common stock and then outstanding voting
securities, as the case may be;
          (b) Individuals who, as of the date hereof, constitute the Board (as
of the date hereof the “Incumbent Board”) cease for any reason to constitute at
least a majority of the Board, provided that any person becoming a director
subsequent to the date hereof whose election, or nomination for election by the
Corporation’s shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board (other than an election or
nomination of an individual whose initial assumption of office is in connection
with an actual or threatened election contest relating to the election of the
Directors of the Corporation, as such terms arc used in Rule 14a-l 1 of
Regulation 14A promulgated under the Exchange Act) shall be, for purposes of
this Agreement, considered as though such person were a member of the Incumbent
Board; or
          (c) Consummation of a reorganization, merger or consolidation, in each
case, with respect to which persons who were the stockholders of the Corporation
immediately prior to such reorganization, merger or consolidation do not,
immediately thereafter, own more than 60% of the combined voting power entitled
to vote generally in the election of directors of the reorganized, merged or
consolidated corporation’s then outstanding voting securities, or
          (d) Approval by the stockholders of the Corporation of a liquidation
or dissolution of the Corporation or of the sale of all or substantially all of
the assets of the Corporation.
     3. Employment.
          (a) The Corporation hereby agrees to continue the Executive in its
employ, and the Executive hereby agrees to remain in the employ of the
Corporation, for the period commencing on the Effective Date of this Agreement
and ending on the earlier to occur of the third anniversary of such date or the
Executive’s normal retirement date under the Corporation’s retirement plans (the
“Employment Period”), to exercise such authority and perform such executive
duties as are commensurate with the authority being exercised and duties being
performed by the Executive during the 90-day period immediately prior to the
Effective Date of this Agreement, which services shall be performed at the
location where the Executive was employed immediately prior to the Effective
Date of this Agreement. During the Employment Period, and excluding any periods
of vacation and sick leave to which the Executive is entitled, the Executive
agrees to devote reasonable attention and time during normal business hours to
the

- 2 -

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

 

business and affairs of the Corporation and, to the extent necessary to
discharge the responsibilities assigned to the Executive hereunder, to use the
Executive’s reasonable best efforts to perform faithfully and efficiently such
responsibilities. During the Employment Period, so long as such activities do
not significantly interfere with the performance of the Executive’s
responsibilities as an employee of the Corporation in accordance with this
Agreement, it shall not be a violation of this Agreement for the Executive to
(A) serve on corporate, civic or charitable boards or committees, (B) deliver
lectures, fulfill speaking engagements or teach at educational institutions and
(C) manage personal investments. It is expressly understood and agreed that to
the extent that any such activities have been conducted by the Executive prior
to the Effective Date of this Agreement, the continued conduct of such
activities (or the conduct of activities similar in nature and scope thereto)
subsequent to the Effective Date of this Agreement shall not thereafter be
deemed to interfere with the performance of the Executive’s responsibilities to
the Corporation.
          (b) The Executive and the Corporation acknowledge that, except as may
otherwise be provided under any other written agreement between the Executive
and the Corporation, the employment of the Executive by the Corporation is “at
will” and, prior to the Effective Date of this Agreement and except as otherwise
provided herein, may be terminated by either the Executive or the Corporation at
any time. Moreover, except as provided in Section 5(b) below, if prior to the
Effective Date of this Agreement, (i) the Executive’s employment with the
Corporation terminates or (ii) the Executive ceases to be an officer of the
Corporation, then the Executive shall have no further rights under this
Agreement.
     4. Compensation, Compensation Plans, Benefits and Perquisites. During the
Employment Period, the Executive shall be compensated as follows:
          (a) Executive shall receive an annual salary at a monthly rate at
least equal to the highest monthly base salary paid or payable to the Executive
by the Corporation during the 36 calendar months immediately prior to the
Effective Date of this Agreement, with the opportunity for increases, from time
to time thereafter, which are in accordance with the Corporation’s regular
practices. Annual salary shall not be reduced after any such increase, and the
term “salary” as utilized in this Agreement shall refer to such annual salary as
increased.
          (b) Executive shall be eligible to participate, at the highest target
percentage rate or target participation level in which he participated during
any of the 36 months immediately prior to the Effective Date, in the
Corporation’s 2004 Incentive Plan, Annual Incentive Plan and other bonus and
incentive compensation plans (whether now or hereinafter in effect) in which he
was participating at any time during the 12 month period immediately prior to
the Effective Date of this Agreement.
          (c) Executive shall be entitled to receive, at no greater cost to the
Executive than the cost paid or payable by him immediately prior to the
Effective Date of this Agreement, (i) at least the same employee benefits and
perquisites that he was receiving (or was authorized to receive but elected not
to receive), and (ii) to participate in any benefit or perquisite plan in which
he was participating (or in which he was authorized to participate but elected
not to do so), in each case at any time during the 12 month period immediately
prior to the Effective Date of

- 3 -

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

 

this Agreement. Upon the Effective Date of this Agreement and thereafter for the
period specified in Section 6(a)(iii) of this Agreement, the Corporation shall
not (A) modify any benefit or perquisite plan applicable to the Executive
(notwithstanding any terms of such plan that otherwise allows the same to be
modified) unless such modification results in the Executive, at no greater cost
to him, receiving and/or being eligible to receive benefits and perquisites at
least equal to those provided to him prior to such modification, or
(B) terminate any benefit or perquisite plan applicable to the Executive
(notwithstanding any terms of such plan that otherwise allows the same to be
terminated) unless the Corporation replaces the same with a plan under which the
Executive, at no greater cost to the Executive, receives and/or is eligible to
receive benefits and perquisites at least equal to those provided to him under
the terminated plan.
     5. Termination.
          (a) The term “Termination” shall mean termination by the Corporation
of the employment of the Executive with the Corporation for any reason other
than death, Disability or Cause (as defined below), or resignation of the
Executive upon the occurrence of any of the following events:
          (i) A material adverse reduction in the nature or scope of the
Executive’s authority, duties or responsibilities from those referred to in
Section 3, as determined in good faith by the Executive;
          (ii) A relocation of the Executive more than 35 miles from the
Executive’s workplace, or a relocation of the principal offices of the
Executive’s workplace more than 35 miles from the location Executive’s principal
residence, in each case without the consent of the Executive;
          (iii) A reduction in the compensation, compensation plans, benefits or
perquisites from those provided in Section 4, or the breach by the Corporation
of any other provision of this Agreement;
          (iv) The failure of any successor to the Corporation to assume this
Agreement or a material breach of the Agreement by the Corporation or its
successors; or
          (v) A good-faith determination by the Executive that as a result of a
Change of Control and a change in circumstances thereafter significantly
affecting his position, he is unable to exercise the authorities, powers,
function or duties attached to his position and contemplated by Section 3 of the
Agreement.
          (b) Notwithstanding anything in this Agreement to the contrary, if the
Executive’s employment is terminated within the period beginning 180 days prior
to the first public announcement of an intended Change of Control (or if none,
then the date that is 180 days prior to the date the Change of Control occurs)
and ending on the date the Change of Control occurs, and Executive reasonably
demonstrates that such termination was at the request of a third party who has
indicated an intention or taken steps reasonably calculated to effect a Change
of Control and who effectuates a Change of Control, then for all purposes of
this Agreement, a

- 4 -

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

 

Termination shall be deemed to have occurred, and the date of the Change of
Control shall be deemed to mean the date immediately prior to the date of such
termination of employment.
          (c) For purposes of this Section 5, any good-faith determination made
by the Executive shall be conclusive.
          (d) The term “Cause” means fraud, misappropriation or intentional
material damage to the property or business of the Corporation or commission of
a felony.
          (e) For purposes of this Agreement, Executive shall be deemed to have
a “Disability” (and to be “Disabled”) if he has been determined by the Incumbent
Board (as defined in Section 2(b)) based on competent medical evidence, to have
a physical or mental disability that renders him incapable, after reasonable
accommodation by the Corporation, of performing his duties under this Agreement.
     6. Termination Payments.
          (a) In the event of a Termination of Executive during the Employment
Period, and in addition to paying the Executive any accrued and unpaid salary,
benefits and vacation time, the Corporation shall pay to the Executive and
provide him with the following (the “Termination Payments”);
          (i) A lump-sum cash payment equal to three times the sum of (A) the
Executive’s Base Salary (as defined below) plus (B) the Executive’s Annual Bonus
(as defined below);
          (ii) A pro-rata share of the Annual Bonus (as defined below)
corresponding to the year of termination, based on the number of days worked in
the bonus period during the year in which employment terminates;
          (iii) continued Benefits and Perquisites for the three-year period
following the Termination; and
          (iv) A lump-sum cash payment equal to the present value of the
Additional Pension Benefits (as defined below) the Executive would have received
had the Executive remained employed by the Corporation for an additional three
years.
          (b) For purposes of this Agreement, the following terms shall be
defined as follows:
               (i) “Base Salary” shall mean the amount in effect under Section
4(a) immediately prior to the date of Termination;
               (ii) “Annual Bonus” shall mean the greater of (i) the Executive’s
target bonus for the fiscal year of Termination, or (ii) the mathematical
average of the actual bonuses that the Executive received or, if not paid to
him, that he

- 5 -

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

 

was entitled to receive, in respect of the three fiscal years prior to the year
of Termination; and
               (iii) “Benefits and Perquisites” shall mean the benefits and
perquisites to which the Executive was receiving or entitled to receive under
Section 4(c), and subject to the same restrictions regarding the modification
and termination of benefits and perquisite plans set forth therein, immediately
prior to the date of Termination.
               (iv) “Additional Pension Benefits” shall mean a lump-sum cash
amount equal to the present value of the excess of (1) the actuarial equivalent
of the benefit under the Corporation’s Retirement Program if the Executive had
continued to be employed and entitled to age and service credit for eligibility
and benefit purposes during the 36-month period immediately following such
termination (utilizing actuarial assumptions no less favorable to the Executive
than those in effect under the Corporation’s Retirement Program immediately
prior to the date of Termination), over (2) the aggregate benefit actually
payable under the Retirement Program and any successor retirement program of the
Corporation. For purposes of such calculation, the following assumptions shall
apply: (1) that the Executive would continue to he compensated during the
36-month period following termination at an annual rate of compensation equal to
that used to calculate the payments provided by Section 6(a)(i) above; (2) that
the Executive is fully vested in the benefit payable under the Retirement
Program; and (3) that the aggregate benefit that would have been paid under the
Retirement Program is as of either the normal or early retirement date for which
the Executive would have qualified, if the Executive were still employed on that
date, whichever would produce the highest present value amount payable under
this paragraph.
               (v) “Retirement Program” shall include the Corporation’s Pension
Plan and Supplemental Pension Plan.
          (c) In the event of Termination of the Executive during the Employment
Period, and notwithstanding the contrary provisions of any agreement signed in
connection with the grant of any options or restricted stock units (whether
prior to or after the date of this Agreement), all options and restricted stock
units granted to the Executive outstanding immediately prior to the Termination
shall, to the extent not then vested, fully vest. All such stock options become
exercisable as of the date of the Termination, and Executive shall have the
right to exercise any such stock option until the earlier to occur of (i) one
(1) year from the date of Termination and (ii) the expiration date of such stock
option as set forth in the agreement evidencing such option.
          (d) If benefits or service credits or the right to accrue further
benefits or service credits under any plan referred to in Section 4(b) or
(c) shall not be payable or provided under such plan to the Executive, or his
dependents, beneficiaries and estate because he is no longer an employee of the
Corporation, the Corporation itself shall, to the extent necessary, pay or
provide for payment of such benefits and service credits for such benefits to
the Executive, his dependents, beneficiaries and estate.

- 6 -

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

 

          (e) The Termination Payments payable under this Agreement shall be in
lieu of and subject to offset for any termination, severance or similar payments
and benefits provided under any employment agreement or severance plan or policy
of the Corporation to which the Executive may be a party or under which he maybe
covered. Notwithstanding the foregoing and for the avoidance of doubt, nothing
in this Agreement shall affect or limit the Executive’s right to receive
(i) payment of any compensation or the issuance of any securities which the
Executive deferred under any deferred compensation plan of the Corporation, or
(ii) any amounts due or belonging to the Executive under any Retirement Program,
Employee Stock Purchase Plan, 401(k) plan.
          (f) Unless otherwise required under Section 9(e) of this Agreement,
all Termination Payments shall be made within 30 days following the date of
Termination.
     7. Additional Covenants.
          (a) There shall be no obligation on the part of the Corporation to
provide any further payments or benefits (other than benefits or payments
already earned, accrued or paid) described in Section 6 if, (i) during the
Employment Period, the Executive shall be employed by or otherwise engaged or be
interested (other than as a passive owner of less than 1% of the outstanding
securities of a publicly-owned entity) in any business which directly competes
with any business of the Corporation or of any of its subsidiaries at such time
and (ii) such employment or activity is likely to cause, or causes, serious
damage to the Corporation or any of its subsidiaries at such time.
          (b) Executive covenants and agrees that during the Employment Period
and for a 2 year period thereafter, Executive shall not (i) directly or
indirectly solicit or encourage any person to leave his/her employment with the
Corporation or assist in any way with the hiring of any employee of the
Corporation by any other business; and/or (ii) solicit business from or sell to,
any of the Corporation’s clients or customers or any other person, firm or
corporation to whom the Corporation has sold products or services where such
solicitation or sale would involve the sale of products or services competitive
with those sold by the Corporation.
          (c) During and after the Employment Period, he shall retain in
confidence any confidential information known to him concerning the Corporation
and its subsidiaries and their respective businesses. The term confidential
information does not include information that (i) is or becomes generally
available to the public other than as a result of a disclosure by the Executive;
or (ii) becomes available to the Executive on a non-confidential basis from a
source other than the Corporation provided that such source is not known by the
Executive to be bound by a confidentiality agreement or obligation with the
Corporation or one of its representatives. Notwithstanding the foregoing, a
breach by the Executive of this Section 7(c) shall not be used to set-off or
delay amounts payable under this Agreement.
          (d) During the 90 days following the Termination of employment and
provided that Company has performed all obligations to have been performed
during such time period and has acknowledged in writing that it will continue
such performance, Executive shall provide such assistance and cooperation as the
Corporation may reasonably require to transfer

- 7 -

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

 

knowledge and otherwise assist in a transition of Executive’s responsibilities
to one or more other individuals designated by the Corporation, provided,
however, that (i) all such assistance and cooperation shall be provided at times
that are mutually convenient to Executive and the Corporation, (ii) Executive
shall not be required to spend more than 20 hours in the aggregate providing
such assistance and cooperation (unless Executive otherwise agrees in writing to
do so, and then pursuant to the terms of such agreement); and (iii) the
Corporation shall pay or reimburse Executive for all out of pocket costs
(travel, lodging, meals, etc.) associated with providing such assistance and
cooperation.
          (e) Following the Termination of employment, neither Corporation nor
Executive shall disparage the other in any verbal or written communication, and
shall provide a statement regarding the termination of their employment
relationship only if necessary and any such statement shall be limited to
communicating that the parties have amicably terminated their employment
relationship pursuant to the terms of this Agreement. If Corporation is
contacted by any third party seeking a reference regarding Executive, then in
addition to the foregoing statement, Corporation may confirm only the period of
time during which the Executive was employed by the Corporation and the capacity
or title under which he was so employed.
          (f) Executive acknowledges and agrees that irreparable harm would
result from any breach or threatened breach by Executive of the provisions of
this Section 7, and monetary damages alone would not provide adequate relief for
any such breach. Accordingly, if Executive breaches such provisions, injunctive
relief in favor of the Corporation is proper without the necessity of the
Corporation posting bond. Moreover, any award of injunctive relief shall not
preclude the Corporation from seeking or recovering any lawful compensatory
damages which may have resulted from a breach of this Agreement, including a
forfeiture of any payments not made and a return of any payments already
received.
          (g) The parties recognize the possibility that the Executive may
execute in the future or may have executed in the past other agreements with the
Corporation or its affiliates, including in connection with the awarding of
stock options (“Additional Agreements”) that contain restrictive covenants
similar to those provided for in this Section 7. It is intended that the
Corporation and its affiliates at all times be afforded the broadest benefit and
protection possible under this Section 7 and the similar provisions of any
Additional Agreements. Consequently, Section 7 of this Agreement and the
provisions of any Additional Agreements that address similar subject matters
shall be read together and their terms combined in the manner most restrictive
to the Executive and most protective to the Corporation and its affiliates. To
the extent that any such provisions of any Additional Agreement differ from,
conflict with or are inconsistent with any provisions of any other Additional
Agreement or with this Section 7, the provisions most restrictive to the
Executive and most protective to the Corporation and its affiliates shall
control.
     8. No Obligation to Mitigate Damages. The Executive shall not be obligated
to seek other employment in mitigation of amounts payable or arrangements made
under the provisions of this Agreement, and the obtaining of any such other
employment shall in no event effect any reduction of the Corporation’s
obligations under this Agreement. Notwithstanding the foregoing, in the event
that (i) Executive is in fact receiving (and not merely entitled or eligible

- 8 -

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

 

to receive) medical benefits that are provided by another employer and that are
equivalent to or better for Executive and his dependents than those benefits
then being provided by the Corporation and (ii) Executive does not believe that
he or any of his dependents is at risk of losing or suffering a material
reduction of such medical benefits within the next 18 months, he shall so notify
the Corporation and the Corporation may thereafter cease providing such
benefits.
     9. Certain Additional Payments by the Corporation; Section 409A.
          (a) Anything in this Agreement to the contrary notwithstanding, in the
event it shall be determined that any payment or distribution by the Corporation
to or for the benefit of the Executive (whether paid or payable or distributed
or distributable pursuant to the terms of this Agreement or otherwise, but
determined without regard to any additional payments required under this
Section 9) (a “Payment”) is an excess parachute payment which would be subject
to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then the Executive shall be
entitled to receive an additional payment (a “Gross-Up Payment”) in an amount
such that after payment by the Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income taxes (and any interest and penalties imposed with respect thereto)
and Excise Tax imposed upon the Gross-Up Payment, the Executive retains an
amount of the Gross-Up Payment equal to the Excise Tax imposed upon the Payment.
Notwithstanding the foregoing or other provisions of this Section 9, in the
event that the amount of parachute payments paid or payable to Executive do not
exceed Executive’s safe harbor (determined pursuant to Section 280G of the Code)
by at least ten percent (10%), then the additional payment described in this
Section 9 shall not be paid and the termination payments payable to Executive
hereunder shall be reduced such that no amounts paid or payable to Executive
hereunder shall be deemed to constitute parachute payments subject to excise tax
under Section 4999 of the Code.
          (b) Subject to the provisions of Section 9(c), all determinations
required to be made under this Section 9, including whether and when a Gross-Up
Payment or a reduction in the termination payments required and the amount of
such Gross-Up Payment or reduction and the assumptions to be utilized in
arriving at such determination, shall be made by a nationally recognized
accounting firm (the “Accounting Firm”) which shall provide detailed supporting
calculations both to the Corporation and the Executive within 30 business days
of the receipt of notice from the Executive that there has been a Payment, or
such earlier time as is requested by the Corporation. In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change of Control, the Executive shall appoint another
nationally recognized accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). All fees and expenses of the Accounting Firm shall be borne
solely by the Corporation. Any Gross-Up Payment, as determined pursuant to this
Section 9, shall be paid by the Corporation to the Executive within five days of
the receipt of the Accounting Firm’s determination. If the Accounting Finn
determines that no Excise Tax is payable by the Executive (whether or not as a
result of a reduction in the termination payments), it shall furnish the
Executive with a written opinion that failure to report the Excise Tax on the
Executive’s applicable federal income tax

- 9 -

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

 

return would not result in the imposition of a negligence or similar penalty,
which opinion shall also include a detailed calculation of any reduction in the
termination payments. Any determination by the Accounting Firm shall be binding
upon the Corporation and the Executive. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial determination
by the Accounting Firm hereunder, it is possible that Gross-Up Payments which
will not have been made by the Corporation should have been made
(“Underpayment”), consistent with the calculations required to be made
hereunder. In the event that the Corporation exhausts its remedies pursuant to
Section 9(e) and the Executive thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred, and any such Underpayment shall be promptly paid by the
Corporation to or for the benefit of the Executive.
          (c) The Executive shall notify the Corporation in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Corporation of the Gross-Up Payment. Such notification shall he given as
soon as practicable but no later than ten business days after the Executive is
informed in writing of such claim and shall apprise the Corporation of the
nature of such claim and the date on which such claim is requested to be paid.
The Executive shall not pay such claim prior to the expiration of the 30-day
period following the date on which it gives such notice to the Corporation (or
such shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Corporation notifies the Executive in writing prior
to the expiration of such period that it desires to contest such claim, the
Executive shall:
          (i) give the Corporation any information reasonably requested by the
Corporation relating to such claim,
          (ii) take such action in connection with contesting such claim as the
Corporation shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Corporation,
          (iii) cooperate with the Corporation in good faith in order
effectively to contest such claim, and
          (iv) permit the Corporation to participate in any proceedings relating
to such claim;
provided, however, that the Corporation shall bear and pay directly all costs
and expenses (including additional interest and penalties) incurred in
connection with such contest and shall indemnify and hold the Executive
harmless, on an after-tax basis, for any Excise Tax or income tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 9(c), the Corporation shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Executive to pay the tax claimed and sue for a
refund or

- 10 -

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

 

contest the claim in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as the
Corporation shall determine; provided, however, that if the Corporation directs
the Executive to pay such claim and sue for a refund, the Corporation shall
advance the amount of such payment to the Executive, on an interest-free basis
and shall indemnify and hold the Executive harmless, on an after-tax basis, from
any Excise Tax or income tax (including interest or penalties with respect
thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance; and further provided that any extension of
the statute of limitations relating to payment of taxes for the taxable year of
the Executive with respect to which such contested amount is claimed to be due
is limited solely to such contested amount. Furthermore, the Corporation’s
control of the contest shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and the Executive shall be entitled
to settle or contest, as the case may be, any other issue raised by the Internal
Revenue Service or any other taxing authority.
          (d) If, after the receipt by the Executive of an amount advanced by
the Corporation pursuant to Section 9(c), the Executive becomes entitled to
receive any refund with respect to such claim, the Executive shall (subject to
the Corporation’s complying with the requirements of Section 9(e)) promptly pay
to the Corporation the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If after the receipt by the
Executive of an amount advanced by the Corporation pursuant to Section 9(c), a
determination is made that the Executive shall not be entitled to any refund
with respect to such claim and the Corporation does not notify the Executive in
writing of its intent to contest such denial of refund prior to the expiration
of 30 days after such determination, then such advance shall be forgiven and
shall not be required to be repaid and the amount of such advance shall offset,
to the extent thereof, the amount of Gross-Up Payment required to be paid.
          (e) Notwithstanding anything in this Agreement to the contrary, if any
payments or benefits due to the Executive hereunder would cause the application
of an accelerated or additional tax under Section 409A, such payments or
benefits shall be restructured in a manner which does not cause such an
accelerated or additional tax. Without limiting the foregoing and
notwithstanding anything contained herein to the contrary, to the extent
required in order to avoid accelerated taxation and/or tax penalties under
Section 409A, amounts that would otherwise be payable and benefits that would
otherwise be provided pursuant to this Agreement during the six-month period
immediately following the Executive’s separation from service shall instead be
paid on the first (1st ) business day after the date that is six (6) months
following the Executive’s date of Termination (or death, if earlier), with
interest from the date such amounts would otherwise have been paid at the
short-term applicable federal rate, compounded semi-annually, as determined
under Section 1274 of the Code, for the month in which payment would have been
made but for the delay in payment required to avoid the imposition of an
additional rate of tax on the Executive under Section 409A. With respect to
perquisites or other non-cash benefits (or any portions thereof) that would
otherwise cause an application of an accelerated or additional tax under
Section 409A if provided during the six (6) months following the Executive’s
separation from service, the Executive shall pay the costs of these perquisites
or other non-cash benefits directly (or pay the Corporation for the cost
thereof) during such six (6) month period. On the first (1st) business day after
the date that is six (6) months following the Executive’s date of Termination
(or death, if earlier), the Corporation will

- 11 -

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

 

reimburse the Executive any amounts so paid by the Executive for these
perquisites or other non-cash benefits, plus interest thereon at the short-term
applicable federal rate, compounded semi-annually, as determined under
Section 1274 of the Code.
     10. Full Settlement. The Corporation’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off counterclaim, recoupment, defense
or other claim, right or action which the Corporation may have against the
Executive or others. The Corporation agrees to pay, to the full extent permitted
by law, all legal fees and expenses which the Executive may reasonably incur as
a result of any contest (regardless of the outcome thereof) by the Corporation,
the Executive or others of the validity or enforceability or liability under,
any provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by the Executive about the amount of any
payment pursuant to this Agreement), plus in each case interest on any delayed
payment at the applicable Federal rate provided for in Section 7872(fl(2)(A) of
the Code.
     11. Notices. Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and if sent by
registered or certified mail to the Executive at the last address he has filed
in writing with the Corporation or, in the case of the Corporation, at its
principal executive offices.
     12. Non-Alienation. The Executive shall not have any right to pledge,
hypothecate, anticipate or in any way create a lien upon any amounts provided
under this Agreement; and no benefits payable hereunder shall be assignable in
anticipation of payment either by voluntary or involuntary acts, or by operation
of law, except by will or the laws of descent and distribution.
     13. Governing Law. The provisions of this Agreement shall be construed in
accordance with the laws of the State of Delaware without regard to any conflict
of laws provision thereof.
     14. Amendment. This Agreement may be amended or canceled by mutual
agreement of the parties in writing without the consent of any other person,
and, so long as the Executive lives, no person, other than the parties hereto,
shall have any rights under or interest in this Agreement or the subject matter
hereof.
     15. Arbitration. Any dispute or controversy between the Corporation and the
Executive, whether arising out of or relating to this Agreement, the breach of
this Agreement, or otherwise, shall be settled by arbitration administered in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association (“AAA”) then in effect, and judgment on the award rendered by the
arbitrator may be entered in any court having jurisdiction. Any arbitration
shall be held before a single arbitrator who shall be selected by the mutual
agreement of the Corporation and the Executive, unless the parties are unable to
agree to an arbitrator, in which case, the arbitrator will be selected by the
then President of the Tennessee Bar Association. The arbitrator shall have the
authority to award any remedy or relief that a court of competent jurisdiction
could order or grant, including, without limitation, the issuance of an
injunction. However, either party may, without inconsistency with this
arbitration provision, apply to any court having jurisdiction over such dispute
or controversy and seek interim

- 12 -

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

 

provisional, injunctive or other equitable relief until the arbitration award is
rendered or the controversy is otherwise resolved. Except as necessary in court
proceedings to enforce this arbitration provision or an award rendered
hereunder, or to obtain interim relief or as required by law, neither a party
nor an arbitrator may disclose the existence, content or results of any
arbitration hereunder without the prior written consent of the Corporation and
the Executive. The Corporation and the Executive acknowledge that this Agreement
evidences a transaction involving interstate commerce. Notwithstanding any
choice of law provision included in this Agreement the United States Federal
Arbitration Act shall govern the interpretation and enforcement of this
arbitration provision. The arbitration proceeding shall be conducted in
Nashville, Tennessee or such other location to which the parties may agree. The
Corporation shall pay the costs of any arbitrator appointed hereunder.
     16. Successors.
          (a) This Agreement is personal to the Executive and without the prior
written consent of the Corporation shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive’s legal
representatives.
          (b) This Agreement shall inure to the benefit of and be binding upon
the Corporation and its successors and assigns.
          (c) The Corporation will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Corporation would be required to perform it if no such
succession had taken place. As used in this Agreement, “Corporation” shall mean
the Corporation as hereinbefore defined and any successor to its business and/or
assets as aforesaid which assumes and agrees to perform this Agreement by
operation of law, or otherwise. Any failure by the Corporation to comply with
and satisfy this Section 16(c) shall constitute a Termination as provided in
Section 5 of this Agreement, provided that such successor has received at least
ten days’ prior written notice from the Corporation or the Executive of the
requirements of this Section 16(c).
     17. Severability. In the event that any provision or portion of this
Agreement shall he determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall he unaffected thereby and shall
remain in full force and effect.
     18. Former Agreement. This Agreement supersedes and replaces the Former
Agreement in its entirety and the Former Agreement is hereafter terminated and
of no effect. Except as provided in Section 7(g), this Agreement does not
supersede or replace any other agreement between the Executive and the
Corporation.
[The remainder of this page has been left blank intentionally. Signature page
follows.]

- 13 -

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

 

IN WITNESS WHEREOF, the Executive has hereunto set his hand and pursuant to the
authorization from the Compensation Committee of its Board of Directors, the
Corporation has caused these presents to be executed in its name on its behalf
and its corporate seal to be hereunto affixed and attested by its Secretary, all
as of the day and year first above written.

         
 
       
EMPLOYEE
  CLARCOR Inc.    
 
         
 
       
Employee Name
  David J. Lindsay    
Title
  Vice President — Administration    
 
       
ATTEST:
         
 
       
 
Richard M. Wolfson
       
Corporate Secretary
       

- 14 -