EXHIBIT 10(d)


	
  THE EMPIRE DISTRICT ELECTRIC COMPANY

  
	
  CHANGE
  IN CONTROL SEVERANCE PAY PLAN

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
   

  
	
  AS
  AMENDED AND RESTATED

  
	
  EFFECTIVE
  JANUARY 1, 2001

  



 
















 


THE
EMPIRE DISTRICT ELECTRIC COMPANY

CHANGE IN CONTROL SEVERANCE PAY PLAN


Table of Contents


	
  Section

  	
   

  	
   

  	
   

  	
  Page

  	
   

  
	
  1.

  	
   

  	
  PURPOSE

  	
  1

  	
   

  
	
  2.

  	
   

  	
  DEFINITIONS

  	
  1

  	
   

  
	
  3.

  	
   

  	
  BENEFITS

  	
  4

  	
   

  
	
  4.

  	
   

  	
  PAYMENTS

  	
  7

  	
   

  
	
  5.

  	
   

  	
  ADMINISTRATION OF THE PLAN

  	
  8

  	
   

  
	
  6.

  	
   

  	
  LITIGATION EXPENSES

  	
  8

  	
   

  
	
  7.

  	
   

  	
  AMENDMENT, SUSPENSION, OR TERMINATION OF THE PLAN

  	
  9

  	
   

  
	
  8.

  	
   

  	
  MISCELLANEOUS

  	
  9

  	
   

  
	
   

  	
   

  	
  APPENDIX A

  	
  11

  	
   

  



 



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SECTION
1.  PURPOSE


The purpose of The Empire District Electric Company Change in Control
Severance Pay Plan is to encourage Employees to make and continue careers with
The Empire District Electric Company by providing eligible Employees with
certain severance pay benefits upon such Employees’ Involuntary Termination or
Voluntary Termination of employment following a Change in Control, as set forth
herein and as evidenced by Agreements between the Company and such
Employees.  Subject to the next sentence,
this amended and restated plan shall not apply to any Employee who entered into
an Agreement prior to September 3, 1999 unless the Company and the
Employee agree in writing to its application; if the Company and the Employee
do not so agree, the terms of the plan as in effect prior to
September 3, 1999 shall continue to apply in the case of such
Employee.  If an Employee entered into an
Agreement prior to September 3, 1999, his employment terminated for
any reason, and he is later rehired on or after September 3, 1999,
his prior Agreement shall not apply to his service following such rehire and,
if he is again designated to participate in the Plan, his participation in the
Plan thereafter shall be governed by the terms of the Plan as in effect on the
date on which he is so designated.


SECTION
2.  DEFINITIONS


When used herein the following terms shall have the following meanings:


2.1           “Agreement” means an Agreement
entered into between the Company and an Employee to provide severance pay and
other benefits hereunder.


2.2           “Board of Directors” means the Board
of Directors of The Empire District Electric Company.


2.3           “Change in Control’ shall be deemed
to have occurred if:


(a)  a merger or consolidation of the Company with
any other corporation is consummated, other than a merger or consolidation
which would result in the Voting Securities of the Company held by such
shareholders outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by converting into Voting Securities of the
surviving entity) more than 75 percent of the Company or such surviving entity
outstanding immediately after such merger or consolidation;


(b)  a sale, exchange or other disposition of all
or substantially all the assets of the Company for the securities of another
entity, cash or other property is consummated;


(c)  the shareholders of the Company approve a
plan of liquidation or dissolution of the Company;













(d)  any “person” (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended),
other than a trustee or other fiduciary holding securities under an employee
benefit plan of the Company or other than a corporation owned directly or
indirectly by the shareholders of the Company in substantially the same
proportions as their ownership of Voting Securities of the Company, is or
becomes the “beneficial owner” (as defined in Rule 13d-3 under said Act),
directly or indirectly, of Voting Securities of the Company representing at
least 25 percent of the total voting power represented by the Voting Securities
of the Company then outstanding; or


(e)  individuals who on January 1, 2001
constitute the Board of Directors of the Company and any new director whose
election by the Board of Directors of the Company or nomination for election by
the Company’s shareholders was approved by a vote of at least two-thirds of the
directors then still in office who either were directors on
January 1, 2001 or whose election or nomination for election was
previously so approved, cease for any reason to constitute a majority thereof.


2.4           “Committee” means the Committee
provided for in Section 5.


2.5           “Company” means The Empire District
Electric Company and its successors and assigns.


2.6           “Employee” means any key employee of
the Company or a subsidiary who is designated by the Board of Directors of the
Company to participate in the Plan.


2.7           “Involuntary Termination” shall mean
any termination of an Employee’s employment by the Company, or by one of its
Subsidiaries, within two years after a Change in Control; provided, however,
such term shall not include a termination by the Company or any of its
Subsidiaries, for (i) serious, willful misconduct in respect of the Employee’s
obligations to the Company or its Subsidiaries, which has caused demonstrable
and serious injury to the Company or any of its Subsidiaries, monetary or
otherwise, as evidenced by a determination in a binding and final judgment,
order or decree of a court or administrative agency of competent jurisdiction,
in effect after exhaustion or lapse of all rights of appeal, in an action, suit
or proceeding, whether civil, criminal, administrative or investigative; (ii)
conviction of a felony, which has caused demonstrable and serious injury to the
Company or any of its Subsidiaries, monetary or otherwise, as evidenced by
binding and final judgment, order, or decree of a court of competent
jurisdiction, in effect after exhaustion or lapse of all rights of appeal; or
(iii) willful and continual failure of the Employee to substantially perform
his duties for the Company or any of its Subsidiaries (other than resulting
from the Employee’s incapacity due to physical or mental illness) which failure
continued for a period of at least thirty (30) days after a written notice of
demand for substantial performance has been delivered to the Employee
specifying the manner in which the Employee has failed to substantially
perform.



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In addition to a
termination of employment as described above, an Involuntary Termination of an
Employee shall be deemed to have occurred if the Employee terminates employment
within two years after a Change in Control and within 180 days after the
occurrence of any of the following: (i) a material reduction or material
adverse change in, or a material change which is inconsistent with, an Employee’s
responsibilities, duties, authority, power, functions, title, working
conditions or status from those in effect immediately prior to the Change in
Control; or (ii) a reassignment to another geographic location more than 50
miles from the Employee’s place of employment immediately prior to the Change
in Control; or (iii) a reduction in base salary or incentive compensation, if
any, from those in effect immediately prior to the Change in Control; or (iv) a
material reduction in any other benefits (including, without limitation,
pension and welfare benefits and benefits under any employee stock purchase
plan) from those in effect prior to the Change in Control other than a
reduction which applies generally to all other similarly situated
employees.  For purposes of the preceding
sentence, a reduction in incentive compensation will be deemed to have occurred
if and only if either (i) the percentage of salary awarded to the Employee as
incentive compensation in the form of cash or restricted stock (whether or not
vested) under the Company’s Management Incentive Plan (or any successor plan)
or as cash merit awards under any other incentive compensation plan, program or
arrangement of the Company or any of its Subsidiaries for any calendar year is
less than the average percentage of salary so awarded for the three calendar
years immediately preceding the calendar year in which the Change in Control
occurs, or (ii) the rate of vesting of any such restricted stock awards is less
rapid than the average rate of vesting for such awards made for the three
calendar years immediately preceding the calendar year in which the Change in
Control occurs.  In making the
calculations required by the preceding sentence, (i) cash awards shall be
valued at the actual dollar amount of the cash payment made to the Employee and
shall be allocated to the calendar year in which the payment is actually made
(rather than the calendar year for which the payment is made), and (ii)
restricted stock shall be valued at the value of the stock on the date the
restricted stock is granted (as it were fully vested on that date) and shall be
allocated to the calendar year in which the restricted stock is granted (rather
than the calendar year in which the restricted stock would vest).


2.8           “Plan” means The Empire District
Electric Company Change in Control Severance Pay Plan as set forth herein and
amended from time to time.


2.9           “Subsidiary” means a “subsidiary
corporation” as defined in Section 424(f) of the Internal Revenue Code of 1986,
as amended (the “Code”).


2.10         “Voluntary Termination” means any
termination of an Employee’s employment, at the election of such Employee
(other than a termination constituting an Involuntary Termination), provided
such termination occurs during the period commencing on the first anniversary
of the date of the Change in Control and ending on the last day of the calendar
month in which falls the date which is eighteen months after the date of such
Change in Control.



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2.11         “Voting Securities” means any
securities of the Company which vote generally in the election of directors.


SECTION
3.  BENEFITS


3.1           In the event of the Involuntary
Termination of any Employee who is a senior officer on the date on which the
applicable Agreement is entered into (or amended), the Company shall pay such
officer an amount equal to 36 months of Compensation.  For purposes of this Section 3.1, an Employee’s
Compensation shall be one-twelfth of the sum of (i) the Employee’s annual base
salary as in effect immediately prior to the date of Involuntary Termination
(or, if greater, immediately prior to the date of the Change in Control) plus
(ii) the average of the annual awards of incentive compensation made to the
Employee in the form of cash or restricted stock (whether or not vested) under
the Company’s Management Incentive Plan (or any successor plan) or as cash
merit awards under any other incentive compensations plan, program or
arrangement of the Company or any of its Subsidiaries in the three calendar
years (or, if less, his entire period of service) immediately preceding the
calendar year in which occurs his Involuntary Termination.  In determining the average referred to in
(ii) of the preceding sentence, (i) cash awards shall be valued at the actual
dollar amount of the cash payment made to the Employee and shall be allocated
to the calendar year in which the payment is actually made (rather than the
calendar year for which the payment is made), and (ii) restricted stock shall
be valued at the value of the stock on the date the restricted stock is granted
(as if it were fully vested on that date) and shall be allocated to the
calendar year in which the restricted stock is granted (rather than the
calendar year in which the restricted stock would vest).  In the case of an Employee entitled to the
benefit described in this Section 3.1, the “Incremental Period” for purposes of
this Plan shall be 36 months.


3.2           In the event of the Involuntary
Termination of any Employee who is not a senior officer on the date on which
the applicable Agreement is entered into (or amended), the Company shall pay
such Employee an amount equal to the product of such Employee’s weekly base
salary as in effect immediately prior to the date of Involuntary Termination
(or if greater, immediately prior to the date of the Change in Control),
multiplied by the greater of (i) 17 weeks or (ii) a number of weeks equal to
two times the Employee’s number of full years of employment by the Company or a
Subsidiary.  In the case of an Employee
entitled to the benefit described in this Section 3.2, the “Incremental Period’
for purposes of this Plan shall be the number of weeks corresponding to the
multiple applicable to such Employee pursuant to this Section 3.2.


3.3           Any payments pursuant to Sections 3.1
or 3.2 of this Plan shall be paid to the Employee in a lump sum within thirty
(30) days following his Involuntary Termination; provided, however, that such
payment shall be reduced by the amount paid to the Employee pursuant to any
other severance pay policy of the Company and its Subsidiaries.



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3.4           In the event of a Voluntary
Termination by an Employee, he shall be entitled to receive the amount
otherwise determined pursuant to Section 3.1 or 3.2 hereof, as the case may be,
and Section 3.3 hereof; provided, however, that such payments will not be made
in a lump sum but rather will be paid in equal monthly installments for the
period corresponding to the applicable multiple used in calculating the amount
of the payment and commencing on the first day of the month following the date
of such Voluntary Termination, and provided, further, that such payments will
cease (even though the Employee has not received the full amount determined
pursuant to Section 3.1 or 3.2 hereof) in the event the Employee becomes
otherwise employed, including self-employment in a trade or business in which
personal services of the Employee are a material income-producing factor.  In the case of an Employee entitled to the
payments described in this Section 3.4, the “Incremental Period’ for purposes
of this Plan shall be the period during which payments are actually made
pursuant to this Section 3.4.


3.5           In the event that the employment of
an Employee who is a senior officer on the date on which the applicable
Agreement is entered into (or amended) terminates pursuant to Section 3.1 or
3.4 hereof, and such Employee subsequently begins to receive retirement benefits
under The Empire District Electric Company Employees’ Retirement Plan (or any
successor plan) (the “Retirement Plan”), the Company shall also commence
payment to such Employee at the same time of a monthly amount equal to the
difference between (i) the monthly retirement benefits the Employee would have
been entitled to receive under the terms of the Retirement Plan and The Empire
District Electric Company Supplemental Executive Retirement Plan (or any
successor plan) (the “Supplemental Plan”), as in effect on the day on which his
employment terminates, if the Employee had accumulated additional service equal
to the “Incremental Period” applicable to such Employee, received earnings
during such Incremental Period at the rate in effect during the year in which
his employment terminates or, if greater, at the rate in effect immediately
prior to the date of the Change in Control (calculated on an annualized basis),
and had attained the age such Employee would have attained as of the last day
of the “Incremental Period” and (ii) the retirement benefits he is then
receiving under the Retirement Plan and Supplemental Plan.  The benefits payable pursuant to this Section
3.5 shall include all ancillary benefits under the Retirement Plan and
Supplemental Plan (such as early retirement and surviving spouse death benefits
and benefits available at retirement), and shall be paid in the same form and
to the same person as the benefits payable under the Retirement Plan.


3.6           During the Incremental Period
applicable to an Employee under Sections 3.1, 3.2 or 3.4 of this Plan or until
coverage is available under a new employer’s plan providing coverage of the same
type, if earlier, the Employee shall continue to be entitled to all benefits
and service credit for



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benefits under medical,
dental, life and accident insurance plans, programs and arrangements of the
Company or its Subsidiaries as if he had continued in the employment of the
Company or a Subsidiary as a regular full-time employee for purposes of such
medical, dental, life and accident insurance plans, programs and arrangements
(including meeting any age and service requirements for post retirement benefits
if the Employee would have met such requirements if he had remained in
employment with the Company for such period). 
Such coverage shall be no less in scope than that provided to the
covered Employee (and covered family members) under the applicable plan,
program or arrangement at the time of Change in Control.  The Employee shall be required to share the
cost of any such coverage with the Company during the Incremental Period by
continuing to pay the same percentage of the cost of such coverage that the
Employee was required to pay at the time of Change in Control.


3.7           If, by reason of the requirements for
tax qualification or any other reason, benefits or service credits under any
medical, dental, life or accident insurance plan, program or arrangement shall
not be payable or provided under any such plan, program or arrangement to the
Employee or his dependents, beneficiaries or estate despite the provisions of
Section 3.6 above, the Company itself shall, to the extent necessary, pay or
provide for payment of such benefits and service credit for such benefits to
the Employee or his dependents, beneficiaries or estate.


3.8           If any payment or benefit received by
or in respect of an Employee who is a senior officer on the date on which the
applicable Agreement is entered into (or amended) which is provided under this
Plan or any other plan, arrangement or agreement with the Company or any of its
Subsidiaries (determined without regard to any additional payments required
under this Section 3.8 and Appendix A) (a “Payment”) would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the “Code”) (or any similar tax that may hereafter be imposed) or any
interest or penalties are incurred by such Employee with respect to such excise
tax (such excise tax, together with any such interest and penalties, being
hereinafter collectively referred to as the “Excise Tax”), the Company shall
pay to the Employee with respect to such Payment at the time specified in
Appendix A an additional amount (the “Gross-up Payment”) such that the net
amount retained by the Employee from the Payment and the Gross-up Payment,
after reduction for any Excise Tax upon the Payment and any Federal, state and
local income and employment tax and Excise Tax upon the Gross-up Payment, shall
be equal to the Payment.  The calculation
and payment of the Gross-up Payment shall be subject to the provisions of
Appendix A. The Gross-up Payment shall be made from the general assets of the
Company.



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SECTION 4.  PAYMENTS


4.1           All payments pursuant to Sections 3.1
through 3.5 hereof shall be made from the general assets of the Company;
provided, however, that such payments shall be reduced by the amount of any
payments made to an Employee from any trust or special or separate fund
established by the Company to assure such payments.  The Company shall not be required to
establish a special or separate fund or other segregation of assets to assure
such payments, and, if the Company shall make any investments to aid it in
meeting its obligations hereunder, Employees shall have no right, title or
interest whatever in or to any such investments except as may otherwise be
expressly provided in a separate written instrument relating to such investments.  Nothing contained in this Plan, and no action
taken pursuant to its provisions, shall create or be construed to create a
trust of any kind between the Company and any Employees.  To the extent that any Employee acquires a right
to receive payments from the Company hereunder, such right shall be no greater
than the right of an unsecured creditor of the Company.


4.2           If the payment of any severance pay
or other benefits hereunder to an Employee who is not a senior officer on the
date on which the applicable Agreement is entered into (or amended), either
alone or together with other payments which such Employee has a right to
receive from the Company and its Subsidiaries, would constitute a “parachute
payment” (as defined in Section 280G of the Code), the payments to such
Employee required by this Plan shall be reduced to the largest amount as will
result in no portion of the payment being subject to the excise tax (the “Excise
Tax”) imposed by Section 4999 of the Code; but only if, by reason of such
reduction, such Employee’s “net after tax benefit” would exceed the “net after
tax benefit” if such reduction were not made. 
For purposes of this Section 4.2, “net after tax benefit” shall mean (i)
the total of all payments and benefits which an Employee receives or is entitled
to receive from the Company or a Subsidiary that would constitute a “parachute
payment” within the meaning of Section 280G of the Code, less (ii) the amount
of federal income taxes payable with respect to such payments calculated at the
maximum marginal tax income rate for each year in which such payments shall be
made (based on the rate as set forth in the Code as in effect at the time of
the first payment), less (iii) the amount of the Excise Tax imposed with
respect to such payments and benefits. 
If such a reduction is required, the determination of how that reduction
is to be accomplished shall be made by the Company, in a manner which the
Company believes in good faith to be in the best interest of the Employee.


4.3           The Company may deduct from any payments
hereunder any Federal, state or local withholding or other taxes or charges
which are required to be deducted under applicable laws.



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SECTION 5.  ADMINISTRATION OF THE
PLAN


5.1           The Compensation Committee of the
Board of Directors (the “Committee”) shall have general responsibility for the
administration and interpretation of the Plan.


5.2           The Committee may arrange for the
engagement of such legal counsel, who may be counsel for the Company, and make
use of such agents and clerical or other personnel as it shall require or may
deem advisable for purposes of the Plan. 
The Committee may rely upon the written opinions of such counsel, and
may delegate to any agent or to any sub-committee or member of the Committee
its authority to perform any act, including without limitation those matters
involving the exercise of discretion; provided, however, that such delegation
shall be subject to revocation at any time at the discretion of the Committee.


5.3           If any claim for benefits under the
Plan is wholly or partially denied, the Committee shall give written notice by
registered or certified mail of such denial to the claimant within 90 days
after receipt of the written claim by the Committee.  Notice must be written in a manner calculated
to be understood by the claimant, setting forth the specific reasons for such
denial, specific reference to pertinent Plan provisions on which the denial is
based, a description of any additional material or information necessary for
the claimant to perfect the claim and an explanation of why such material or
information is necessary, and an explanation of the Plan’s claim review
procedure.  The Committee shall also
advise the claimant that he or his duly authorized representative may request a
review by the Committee of the decision to deny the claim by filing with the
Committee, within 65 days after such notice has been received by the claimant,
a written request for such review.  The
claimant may review pertinent documents and submit issues and comments in
writing within the same 65-day period. 
If such request is so filed, such review shall be made by the Board
within 60 days after receipt of such request, unless special circumstances
(including, but not limited to, a need to hold a hearing) require an extension
of time for processing, in which case a decision shall be rendered not later
than 120 days after receipt of the request for review.  The claimant shall be given written notice
within such 60-day (or 120-day) period of the decision resulting from such
review, which shall include specific reasons for the decision, written in a
manner calculated to be understood by the claimant, and specific references to
the pertinent Plan provisions on which the decision was based.


SECTION 6.  LITIGATION EXPENSES


In the event of any litigation or other proceeding between the Company
and the Employee with respect to the subject matter of this Plan and the
enforcement of his rights hereunder, the Company shall reimburse the Employee
for all of his reasonable costs and expenses relating to such litigation or
other proceeding, including his reasonable attorney’s fees and expenses.  In no event shall the Employee be required to
reimburse the Company for any of the costs and expenses relating to such
litigation or other proceeding.  The
obligation of the Company under this section shall survive the termination for
any reason of this Plan.



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SECTION 7.  AMENDMENT,
SUSPENSION, OR TERMINATION OF THE PLAN


The Board of Directors shall have the power at any time and from time
to time to amend, suspend or terminate the Plan in whole or in part at any time
and for any reason, provided, however, that any such amendment, suspension or
termination may not adversely affect in any way the rights of any Employee
under any Agreement entered into prior to such amendment, suspension or
termination, without his consent.


SECTION 8.  MISCELLANEOUS


8.1           Nothing contained in the Plan shall
give any Employee the right to be retained in the employment of the Company or
any of its affiliated or associated corporations or affect the right of any
such employer to dismiss any Employee.


8.2           If the Committee shall find that any
person to whom any amount is payable under the Plan is unable to care for his
or her affairs because of illness or accident, or is a minor, or has died, then
any payment due him or her or his or her estate (unless a prior claim therefor
has been made by a duly appointed legal representative) may, if the Committee
so elects, be paid to his or her spouse, a child, a relative, an institution
maintaining or having custody of such person or any other person deemed by the
Committee to be a proper recipient on behalf of such person otherwise entitled
to payment.  Any such payment shall be a
complete discharge of the liability of the Plan therefor.


8.3           Except insofar as may otherwise be
required by law, no amount payable at any time under the Plan shall be subject
in any manner to alienation by anticipation, sale, transfer, assignment,
bankruptcy, pledge, attachment, charge or encumbrance of any kind or in any
manner be subject to the debts or liabilities of any person and any attempt so
to alienate or subject any such amount, whether at the time or thereafter
payable, shall be void.  If any person
shall attempt to, or shall, alienate, sell, transfer, assign, pledge, attach,
charge or otherwise encumber any amount payable under the Plan, or any part
thereof, or if by reason of his or her bankruptcy or other occurrence at any
time such amount would be made subject to his debts or liabilities or would
otherwise not be enjoyed by him or her, then the Committee, if it so elects,
may direct that such amount be withheld and that the same amount or any part
thereof be paid or applied to or for the benefit of such person, in such manner
and proportion as the Committee may deem proper.


8.4           The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business or assets of the
Company, by express written agreement, to assume this Plan and any Agreements
between the Company and Employees pursuant to this Plan.  Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall entitle
Employees to such compensation from the Company in the same amount and on the
same terms to which they would be entitled hereunder if they incurred an
Involuntary Termination pursuant to Section 3 hereof, effective as of the date
of such succession.



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8.5           The captions preceding the sections
of the Plan have been inserted solely as a matter of convenience and do not in
any way define or limit the scope or intent of any provisions of the Plan.


8.6           The Plan and all rights thereunder
shall be governed by and construed in accordance with the laws of the State of
Missouri.



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APPENDIX A


Gross-up Payments


The following provisions shall be applicable with respect to the
Gross-up Payments described in Section 3.8:


a.  For purposes of determining whether any of
the Payments will be subject to the Excise Tax and the amount of such Excise
Tax, (a) all of the Payments received or to be received shall be treated as “parachute
payments” within the meaning of Section 280G(b)(2) of the Code, and all “excess
parachute payments” within the meaning of Section 280G(b)(1) of the Code shall
be treated as subject to the Excise Tax unless, in the opinion of tax counsel selected
by the Company, the Payments (in whole or in part) do not constitute parachute
payments, including by reason of Section 280G(b)(4)(A) of the Code, or excess
parachute payments (as determined after application of Section 280G(b)(4)(B) of
the Code), and (b) the value of any non-cash benefits or any deferred payment
or benefit shall be determined by independent auditors selected by the Company
in accordance with the principles of Sections 280G(d)(3) and (4) of the
Code.  For purposes of determining the
amount of the Gross-up Payment the Employee shall be deemed to pay Federal
income taxes at the highest marginal rate of Federal income taxation in the calendar
year in which the Gross-up Payment is to be made and state and local income
taxes at the highest marginal rate of taxation to which such payment could be
subject based upon the state and locality of the Employee’s residence or employment,
net of the maximum reduction in Federal income taxes which could be obtained
from deduction of such state and local taxes. 
In addition, for purposes of determining the amount of the Gross-up
Payment, the Company shall make a determination of the amount of employment
taxes required to be paid on the Gross-up Payment.  In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account hereunder
at the time the Gross-up Payment is made, the Employee shall repay to the
Company, at the time that the amount of such reduction in Excise Tax is finally
determined, the portion of the Gross-up Payment attributable to such reduction
(plus the portion of the Gross-up Payment attributable to the Excise Tax and
Federal and state and local income and employment tax imposed on the portion of
the Gross-up Payment being repaid by the Employee if such repayment results in
a reduction in Excise Tax and/or a Federal and state and local income or
employment tax deduction), plus interest on the amount of such repayment at the
Federal short-term rate as defined in Section 1274(d)(1)(C)(i) of the
Code.  In the event that the Excise Tax
is determined to exceed the amount taken into account hereunder at the time the
Gross-up Payment is made (including by reason of any payments the existence or
amount of which cannot be determined at the time of the Gross-up Payment), the
Company shall make an additional gross-up payment in respect of such excess
(plus any interest, penalties or additions payable with respect to such excess)
at the time that the amount of such excess is finally determined.  Notwithstanding the foregoing, the Company
shall withhold from any payment due to the Employee the amount required by law
to be so withheld under Federal, state or local wage and employment tax withholding
requirements or otherwise (including without limitation Section 



 11
 









4999 of the Code), and shall pay over to the
appropriate government authorities the amount so withheld.


b.  The Gross-up Payment with respect to a
Payment shall be paid not later than the thirtieth day following the date of
the Payment; provided, however, that if the amount of such Gross-up Payment or
portion thereof cannot be finally determined on or before such day, the Company
shall pay to the Employee on such date an estimate, as determined in good faith
by the Company, of the amount of such payments and shall pay the remainder of
such payments (together with interest at the Federal short-term rate provided
in Section 1274(d)(1)(C)(i) of the Code) as soon as the amount thereof can be
determined.  In the event that the amount
of the estimated payments exceeds the amount subsequently determined to have
been due, such excess shall constitute a loan by the Company to the Employee,
payable on the fifth day after demand by the Company (together with interest at
the Federal short-term rate provided in Section 1274(d)(1)(C)(i) of the
Code).  At the time that payments are
made under Section 3.8 and this Appendix A, the Company shall provide the
Employee with a written statement setting forth the manner in which such
payments were calculated and the basis for such calculations, including,
without limitation, any opinions or other advice the Company has received from
outside counsel, auditors or consultants (and any such opinions or advice which
are in writing shall be attached to the statement).


 



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