Exhibit 10.5


 




 










 


Employment
Agreement for Robert H. Steinfeld


 


As Amended
and Restated as of February 11, 2003


 





 

















 


IMS HEALTH
INCORPORATED


 


Employment
Agreement for Robert H. Steinfeld


 


As Amended
and Restated as of February 11, 2003


 


	
  1.

  	
  Employment

  
	
   

  	
   

  
	
  2.

  	
  Term

  
	
   

  	
   

  
	
  3.

  	
  Offices and Duties

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Generally.

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Place of
  Employment

  
	
   

  	
   

  
	
  4.

  	
  Salary and
  Annual Incentive Compensation

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Base Salary

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Annual Incentive
  Compensation

  
	
   

  	
   

  
	
  5.

  	
  Long Term
  Compensation, Including Stock Options, Benefits, Deferred Compensation, and
  Expense Reimbursement

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Executive Compensation
  Plans

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Employee and
  Executive Benefit Plans

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Acceleration
  of Awards Upon a Change in Control

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Deferral
  of Compensation

  
	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Company Registration
  Obligations

  
	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Reimbursement of Expenses

  
	
   

  	
   

  	
   

  
	
  6.

  	
  Termination
  Due to Retirement, Death or Disability

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Retirement

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Death

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Disability

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Other
  Terms of Payment Following Retirement, Death or Disability

  
	
   

  	
   

  
	
  7.

  	
  Termination
  of Employment For Reasons Other Than Retirement, Death, or Disability

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Termination by the
  Company for Cause

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Termination
  by Executive Other Than For Good Reason

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Termination
  by the Company Without Cause Prior to or More than Two Years After a Change
  in Control

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Termination
  by Executive for Good Reason Prior to or More than Two Years After a Change
  in Control

  
	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Termination
  by the Company Without Cause Within Two Years After a Change in Control

  



 


i

















 


	
   

  	
  (f)

  	
  Termination
  by Executive for Good Reason Within Two Years After a Change in Control

  
	
   

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Other
  Terms Relating to Certain Terminations of Employment

  
	
   

  	
   

  
	
  8.

  	
  Definitions
  Relating to Termination Events

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  “Cause”

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  “Change in Control”

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  “Compensation
  Accrued at Termination”

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  “Disability”

  
	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  “Good Reason

  
	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  “Potential Change in
  Control”

  
	
   

  	
   

  
	
  9.

  	
  Rabbi
  Trust Obligation Upon Potential Change in Control; Excise Tax Related
  Provisions

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Rabbi
  Trust Funded Upon Potential Change in Control

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Gross-up If Excise
  Tax Would Apply

  
	
   

  	
   

  
	
  10.

  	
  Non-Competition
  and Non-Disclosure; Executive Cooperation; Non-Disparagement; Certain
  Forfeitures

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Non-Competition

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Non-Disclosure;
  Ownership of Work

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Cooperation With
  Regard to Litigation

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Non-Disparagement

  
	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Release of Employment
  Claims

  
	
   

  	
   

  	
   

  
	
   

  	
  (f)

  	
  Forfeiture of
  Outstanding Options

  
	
   

  	
   

  	
   

  
	
   

  	
  (g)

  	
  Forfeiture of
  Certain Bonuses and Profits

  
	
   

  	
   

  	
   

  
	
   

  	
  (h)

  	
  Survival

  
	
   

  	
   

  
	
  11.

  	
  Governing Law;
  Disputes; Arbitration

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Governing Law

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Reimbursement
  of Expenses in Enforcing Rights

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Arbitration

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Interest on Unpaid Amounts

  
	
   

  	
   

  
	
  12.

  	
  Miscellaneous

  
	
   

  	
   

  
	
   

  	
  (a)

  	
  Integration

  
	
   

  	
   

  	
   

  
	
   

  	
  (b)

  	
  Successors; Transferability

  
	
   

  	
   

  	
   

  
	
   

  	
  (c)

  	
  Beneficiaries

  
	
   

  	
   

  	
   

  
	
   

  	
  (d)

  	
  Notices

  
	
   

  	
   

  	
   

  
	
   

  	
  (e)

  	
  Reformation

  



 


ii

















 


	
   

  	
  (f)

  	
  Headings

  
	
   

  	
   

  	
   

  
	
   

  	
  (g)

  	
  No General Waivers

  
	
   

  	
   

  	
   

  
	
   

  	
  (h)

  	
  No
  Obligation To Mitigate

  
	
   

  	
   

  	
   

  
	
   

  	
  (i)

  	
  Offsets;
  Withholding

  
	
   

  	
   

  	
   

  
	
   

  	
  (j)

  	
  Successors
  and Assigns

  
	
   

  	
   

  	
   

  
	
   

  	
  (k)

  	
  Counterparts

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Indemnification

  
	
   

  	
   

  	
   

  
	
  Attachment A

  



 


iii

















 


IMS HEALTH INCORPORATED


 


Employment Agreement for
Robert H. Steinfeld


 


As Amended and Restated as
of February 11, 2003


 


 


THIS EMPLOYMENT AGREEMENT by
and between IMS HEALTH INCORPORATED, a Delaware corporation (the “Company”),
and Robert H. Steinfeld (“Executive”) shall become effective as of November 14,
2000 (the “Effective Date”), and the amendment and restatement hereof made this
22nd day of May, 2003 shall become effective as of February 11, 2003 (the
“Amendment Date”).


 


WITNESSETH


 


WHEREAS, Executive has
served the Company and its predecessors in executive capacities since February
24, 1997;


 


WHEREAS, the Company desires
to continue to employ Executive as Senior Vice President and General Counsel of
the Company, and Executive desires to accept such employment on the terms and
conditions herein set forth.


 


NOW, THEREFORE, in
consideration of the foregoing, the mutual covenants contained herein, and
other good and valuable consideration the receipt and adequacy of which the
Company and Executive each hereby acknowledge, the Company and Executive hereby
agree as follows:


 


1.                                       Employment.


 


The Company hereby agrees to
employ Executive as its Senior Vice President and General Counsel (with the
principal executive duties set forth below in Section 3), and Executive hereby
agrees to accept such employment and serve in such capacities, during the Term
as defined in Section 2 (subject to Section 7(c) and 7(e)) and upon the terms
and conditions set forth in this Employment Agreement (the “Agreement”).


 


2.                                       Term.


 


The term of employment of
Executive under this Agreement (the “Term”) shall be the period commencing on
the Effective Date and ending on December 31, 2002 and any period of extension
thereof in accordance with this Section 2, except that the Term will end
at a date, prior to the end of such period or extension thereof, specified in
Section 6 or 7 in the event of termination of Executive’s employment. The Term,
if not previously ended, shall be extended automatically without further action
by either party by one additional year (added to the end of the Term) first on
December 31, 2002 (extending the Term to December 31, 2003) and on each
succeeding December 31 thereafter, unless either party shall have served
written notice in accordance with Section 12(d) upon the other party on or
before the June 30 preceding a December 31 extension date electing not to
extend the Term further as of that December 31 extension date, in which case
employment shall terminate on that December 31 and the Term shall end at that
date, subject to earlier termination of employment and earlier termination of
the Term in accordance with Section 6 or 7. The foregoing notwithstanding, in
the event there occurs a Potential Change in Control during the period of 180
days prior to the December 31 on which the Term will terminate as a result of
notice given by the Executive or the Company hereunder, the Term shall be
extended automatically at that December 31 by an additional period such that
the Term will extend until the 180th day following such Potential Change in
Control.


 

















 


3.                                       Offices and Duties.


 


The provisions of this
Section 3 will apply during the Term, except as otherwise provided in
Section 7(c) or 7(e):


 


(a)                                  Generally.  Executive shall serve as the Senior Vice President
and General Counsel of the Company. 
Executive shall have and perform such duties, responsibilities, and
authorities as are customary for the general counsel of a publicly held
corporation of the size, type, and nature of the Company as they may exist from
time to time.  In addition, Executive
shall have and perform such additional duties, responsibilities, and
authorities as may be from time to time assigned by the Chief Executive Officer
based on his assessment of the business needs of the Company, and the Company
reserves the right to change or modify these assignments and any positions and
titles associated therewith.  Executive
shall devote his full business time and attention, and his best efforts, abilities,
experience, and talent, to the positions of Senior Vice President and General
Counsel and other assignments hereunder, and for the business of the Company,
without commitment to other business endeavors, except that Executive (i) may
make personal investments which are not in conflict with his duties to the
Company and manage personal and family financial and legal affairs, (ii) may
undertake public speaking engagements, and (iii) may serve as a director of (or
similar position with) any other business or an educational, charitable, community,
civic, religious, or similar type of organization with the approval of the
Chief Executive Officer, so long as such activities (i.e., those listed in
clauses (i) through (iii)) do not preclude or render unlawful Executive’s
employment or service to the Company or otherwise materially inhibit the
performance of Executive’s duties under this Agreement or materially impair the
business of the Company or its subsidiaries.


 


(b)                                 Place of
Employment. 
Executive’s principal place of employment shall be at the Corporate
Offices of the Company which shall be in Fairfield County, Connecticut.


 


4.                                       Salary and Annual Incentive Compensation.


 


As partial compensation for
the services to be rendered hereunder by Executive, the Company agrees to pay
to Executive during the Term the compensation set forth in this Section 4.


 


(a)                                  Base Salary.
The Company will pay to Executive during the Term a base salary, the annual
rate of which shall be $275,000, payable in cash in substantially equal
semi-monthly installments commencing at the beginning of the Term, and
otherwise in accordance with the Company’s usual payroll practices with respect
to senior executives (except to the extent deferred under Section 5(d)).
Executive’s annual base salary shall be reviewed by the Compensation and
Benefits Committee (the “Committee”) of the Board of Directors (the “Board”) at
least once in each calendar year, and may be increased above, but may not be
reduced below, the then-current rate of such base salary. For purposes of this
Agreement, “Base Salary” means Executive’s then-current base salary.


 


(b)                                 Annual
Incentive Compensation. The Company will pay to Executive during
the Term annual incentive compensation which shall offer to Executive an
opportunity to earn additional compensation based upon performance in amounts
determined by the Committee in accordance with the applicable plan and
consistent with past practices of the Company; provided, however, that the
annual incentive opportunity during the Term shall be not less than the greater
of 51% of Base Salary or the annual target incentive opportunity for the prior
year for achievement of target level performance, with the nature of the
performance and the levels of performance triggering payments of such annual
target incentive compensation for each year to be established and communicated
to Executive during the first quarter of such year by the Committee; provided,
further, that annual incentive payable for performance in 2000 shall be based
on the amount of salary actually paid during the year.  In addition, the Committee (or the Board)
may determine, in its discretion, to increase the Executive’s annual target
incentive opportunity or provide an additional annual incentive opportunity, in
excess of the annual target incentive opportunity, payable for performance in
excess of or in addition to the performance required for payment of the annual
target incentive amount. Any annual incentive compensation payable to Executive
shall be paid in accordance with the Company’s usual practices with respect to
payment of incentive compensation to senior executives (except to the extent
deferred under Section 5(d)).


 


2

















 


5.                                       Long-Term
Compensation, Including Stock Options, Benefits, Deferred Compensation, and Expense
Reimbursement


 


(a)                                  Executive
Compensation Plans. 
Executive shall be entitled during the Term to participate, without
discrimination or duplication, in executive compensation plans and programs
intended for general participation by senior executives of the Company, as
presently in effect or as they may be modified or added to by the Company from
time to time, subject to the eligibility and other requirements of such plans
and programs, including without limitation any stock option plans, plans under
which restricted stock/restricted stock units, performance-based restricted
stock/restricted stock units (“PERS”) or performance-accelerated restricted
stock/restricted stock units (“PARS”) may be awarded, other annual and
long-term cash and/or equity incentive plans, and deferred compensation plans;
provided, however, that Executive’s participation in such plans and programs,
in the aggregate, shall provide him with compensation and incentive award
opportunities substantially no less favorable than those provided by the
Company to Executive under such plans and programs as in effect on the
Amendment Date.  The Company makes no
commitment under this Section 5(a) to provide participation opportunities
to Executive in all plans and programs or at levels equal to (or otherwise
comparable to) the participation opportunity of any other executive.  The foregoing notwithstanding, Executive
shall be entitled to participate in the PERS program based on annual
performance commencing with the 2001 performance year, and will not be granted
PERS with respect to the 2000 performance year.


 


(b)                                 Employee
and Executive Benefit Plans. 
Executive shall be entitled during the Term to participate, without
discrimination or duplication, in employee and executive benefit plans and
programs of the Company, as presently in effect or as they may be modified or
added to by the Company from time to time, subject to the eligibility and other
requirements of such plans and programs, including without limitation plans
providing pensions, supplemental pensions, supplemental and other retirement
benefits, medical insurance, life insurance, disability insurance, and
accidental death or dismemberment insurance, as well as savings,
profit-sharing, and stock ownership plans; provided, however, that Executive’s
participation in such benefit plans and programs, in the aggregate, shall
provide Executive with benefits and compensation substantially no less
favorable than those provided by the Company to Executive under such plans and
programs as in effect on the Amendment Date. 
The Company makes no commitment under this Section 5(b) to provide
participation opportunities to Executive in all benefit plans and programs or
at levels equal to (or otherwise comparable to) the participation opportunity
of any other executive.  The foregoing
notwithstanding, Executive shall be eligible to participate or receive
compensation and benefits under the Company’s Employee Protection Plan and his
Change-in-Control Agreement, provided that any compensation and benefits to
Executive under the Employee Protection Plan and the Change-in-Control
Agreement shall be payable only if and to the extent that such benefits would
exceed the corresponding benefits payable under this Agreement.


 


In furtherance of and not in
limitation of the foregoing, during the Term:


 


(i)                                     Executive will participate as Senior Vice
President and General Counsel in all executive and employee vacation and
time-off programs;


 


(ii)                                  The Company will provide Executive with
coverage as Senior Vice President and General Counsel with respect to long-term
disability insurance and benefits substantially no less favorable (including
any required contributions by Executive) than such insurance and benefits in
effect on the Amendment Date;


 


(iii)                               Executive will be covered by Company-paid
group and individual term life insurance providing a death benefit no less than
the death benefit provided under Company-paid insurance in effect at the
Amendment Date; provided, however, that, with the consent of Executive, such insurance
may be combined with a supplementary retirement funding vehicle; and


 


(iv)                              Executive will be entitled to benefits under
the IMS Health Incorporated Executive Pension Plan (“EXPP”), with the effective
date of Executive’s participation therein to be February 11, 2003.  Notwithstanding anything to the contrary in
this Agreement or the EXPP, Executive’s years of service with the Company (and
its predecessor Cognizant Corporation) prior to the date that his participation
in the EXPP commenced shall be included as Service for purposes of
participation, vesting and accrual of benefits under the EXPP subject to the
special rules contained in this Section 5(b)(iv).  For the period from February 11, 2003 through January 31, 2006,
Executive


 


3

















 


shall be deemed a
participant in both the EXPP and the IMS Health Incorporated U.S. Executive
Retirement Plan (the “USERP”), with Service 
apportioned between the two Plans; for this purpose, Executive shall be
credited with additional Service for purposes of the EXPP (the “Additional
Service Credits”), including without limitation, Sections 3.1(b)(i) and
3.2(b)(i) of the EXPP, with a corresponding reduction in Service for purposes
of Sections 3.1(b)(i) and 3.2(b)(i) of the USERP, as follows:


 


	
  Date

  	
   

  	
  Years of Service

  Under USERP

  	
   

  	
  Years of Service

  Under EXPP

  	
   

  	
  Total Years

  of Service

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Feb.
  11, 2003

  	
   

  	
  6.0833

  	
   

  	
  0

  	
   

  	
  6.0833

  	
   

  
	
  Jan.
  31, 2004

  	
   

  	
  4

  	
   

  	
  3

  	
   

  	
  7

  	
   

  
	
  Jan.
  31, 2005

  	
   

  	
  2

  	
   

  	
  6

  	
   

  	
  8

  	
   

  
	
  Jan.
  31, 2006

  	
   

  	
  0

  	
   

  	
  9

  	
   

  	
  9

  	
   

  



 


From and after January 31,
2006, such Additional Service Credits shall remain credited under the EXPP, and
Executive’s  benefits shall be
determined solely under the EXPP, with Executive’s further Service accruing in
accordance with the terms of the EXPP. 
The provisions governing the accrual of 
Service under the EXPP set forth herein shall take precedence over
any  inconsistent provision of the EXPP,
including without limitation Section 1.32(e) of the EXPP (providing phased-in
credit for pre-participation Service). 
Years of Service credited in accordance with the above table shall be
determined in accordance with the rules generally applicable to crediting
Service under the EXPP, including  the
rules which provide that Service shall be computed in 1/12ths of a year, with a
full month being granted for each completed or partial calendar month.  The foregoing notwithstanding, in the event
that Executive shall become eligible for Retirement Benefits or Deferred Vested
Benefits under the USERP and/or the EXPP, the aggregate benefit payable to
Executive under the USERP and/or the EXPP shall not be less than the Retirement
Benefit or Deferred Vested Benefit, as the case may be, that would have been
payable to Executive under the USERP had Executive continued to participate in
the USERP from February 11, 2003 until the date of his retirement or
termination of employment.  Moreover, in
the event that Executive’s Surviving Spouse shall become eligible for death
benefits under the USERP and/or the EXPP prior to the commencement of benefit
payments to Executive, the Surviving Spouse’s Benefit shall not be less than
the Surviving Spouse’s Benefit that would have been payable under the USERP had
Executive continued to participate in the USERP from February 11, 2003 until
the date of Executive’s death. 
Furthermore, for purposes of calculating Retirement Benefits, Deferred
Vested Benefits or Surviving Spouse’s Benefits payable under the USERP and/or
the EXPP, Executive’s Average Final Compensation shall not be less than
$465,000.  Capitalized terms used herein
and not otherwise defined shall have the meaning ascribed to them in the EXPP
(or if applicable, the USERP).


 


(c)                                  Acceleration
of Awards Upon a Change in Control.                In the event of a Change in Control (as
defined in Section 8(b)), all outstanding stock options, restricted stock, and
other equity-based awards then held by Executive shall become vested and
exercisable.


 


(d)                                 Deferral
of Compensation.  If
the Company has in effect or adopts any deferral program or arrangement
permitting executives to elect to defer any compensation, Executive will be
eligible to participate in such program. 
Any plan or program of the Company which provides benefits based on the
level of salary, annual incentive, or other compensation of Executive shall, in
determining Executive’s benefits, take into account the amount of salary,
annual incentive, or other compensation prior to any reduction for voluntary
contributions made by Executive under any deferral or similar contributory plan
or program of the Company (excluding compensation that would not be taken into
account even if not deferred), but shall not treat any payout or settlement
under such a deferral or similar contributory plan or program to be additional
salary, annual incentive, or other compensation for purposes of determining
such benefits, unless otherwise expressly provided under such plan or program.


 


(e)                                  Company
Registration Obligations.  The
Company will use its best efforts to file with the Securities and Exchange
Commission and thereafter maintain the effectiveness of one or more
registration


 


4

















 


statements registering under
the Securities Act of 1933, as amended (the “1933 Act”), the offer and sale of
shares by the Company to Executive pursuant to stock options or other
equity-based awards granted to Executive under Company plans or otherwise or,
if shares are acquired by Executive in a transaction not involving an offer or
sale to Executive but resulting in the acquired shares being “restricted securities”
for purposes of the 1933 Act, registering the reoffer and resale of such shares
by Executive.


 


(f)                                    Reimbursement
of Expenses.  The
Company will promptly reimburse Executive for all reasonable business expenses
and disbursements incurred by Executive in the performance of Executive’s
duties during the Term in accordance with the Company’s reimbursement policies
as in effect from time to time.


 


6.                                       Termination
Due to Retirement, Death, or Disability.


 


(a)                                  Retirement.  Executive may elect to terminate employment
hereunder by retirement at or after age 55 or, upon the request of Executive,
at such earlier age as may be approved by the Board (in either case,
“Retirement”).  At the time Executive’s
employment terminates due to Retirement, the Term will terminate, all
obligations of the Company and Executive under Sections 1 through 5 of this
Agreement will immediately cease except for obligations which expressly
continue after termination of employment due to Retirement, and the Company
will pay Executive, and Executive will be entitled to receive, the following:


 


(i)                                     Executive’s Compensation Accrued at
Termination (as defined in Section 8(c));


 


(ii)                                  In lieu of any annual incentive compensation
under Section 4(b) for the year in which Executive’s employment terminated, an
amount equal to the portion of annual incentive compensation that would have
become payable in cash to Executive (i.e., excluding the portion payable in
PERS or in other non-cash awards) for that year if his employment had not
terminated, based on performance actually achieved in that year (determined by
the Committee following completion of the performance year), multiplied by a
fraction the numerator of which is the number of days Executive was employed in
the year of termination and the denominator of which is the total number of
days in the year of termination;


 


(iii)                               The vesting and exercisability of stock
options held by Executive at termination and all other terms of such options
shall be governed by the plans and programs and the agreements and other
documents pursuant to which such options were granted (subject to Section 10(f)
hereof); and


 


(iv)                              All restricted stock and deferred stock
awards, including outstanding PERS awards, all other long-term incentive
awards, and all deferral arrangements under Section 5(d), shall be governed by
the plans and programs under which the awards were granted or governing the
deferral, and all rights under the EXPP, USERP and any other benefit plan shall
be governed by such plan subject to, in the case of the EXPP and USERP, Section
5(b) hereof including without limitation that Additional Service Credits that
were credited as of Executive’s Retirement as provided in Section 5(b)(iv) of
this Agreement shall be fully reflected.


 


(v)                                 If Executive shall not be eligible upon
Retirement for retiree coverage under the Company’s Health Plan (the “Health
Plan”) and Executive elects in accordance with the applicable provisions of the
Consolidated Omnibus Budget Reconciliation Act of 1986, as amended (“COBRA”)
continued coverage under the Health Plan in accordance with the applicable
provisions of COBRA, the Company shall pay to Executive on a monthly basis
during such COBRA continuation period an amount equal on an after-tax basis to
the total cost of such coverage. Prior to the expiration of the maximum COBRA
continuation period available to Executive, provided that Executive theretofore
shall have complied with the conditions set forth in Section 10, the Company
shall make a good faith effort to obtain insured coverage for Executive (and
his spouse and eligible dependents, if any, for whom coverage had been provided
during the COBRA continuation period) that is substantially comparable to such
COBRA continuation coverage, which insured coverage shall begin on the date of
expiration of Executive’s COBRA continuation period and continue until the
earliest of:  (1) Executive’s
eligibility for medical coverage under the Company’s Health Plan, as a retiree
or active employee, (2) Executive’s eligibility for medical coverage under a
plan maintained by a subsequent employer or other entity to which Executive


 


5

















 


provides services, (3)
Executive’s eligibility for Medicare, or (4) Executive’s attainment of age 65.
In the event that the Company determines, in its sole discretion, that it is
unable to obtain such insured coverage for Executive (and his spouse and
eligible dependents, if any, for whom coverage had been provided during the
COBRA continuation period) or in the event that Executive determines, in his
sole discretion, that any such insured coverage offered by the Company is not
substantially comparable to such COBRA continuation coverage, the Company shall
pay to Executive, provided that Executive shall not have become eligible for
medical coverage under (1) the Company’s Health Plan, as a retiree or active
employee, (2) a plan maintained by a subsequent employer or other entity to
which Executive provides services, or (3) Medicare and, provided further, that
Executive theretofore shall have complied with the conditions set forth in
Section 10, a lump sum amount equal on an after-tax basis to the present value
of  the total cost of retiree medical
coverage under the Health Plan that would have been incurred by both Executive
and the Company on behalf of Executive (and his spouse and eligible dependents,
if any, for whom coverage had been provided during the COBRA continuation
period) if Executive (and such spouse and dependents, if any) had been eligible
for such retiree medical coverage from the end of Executive’s COBRA
continuation period until Executive’s attainment of age 65, calculated on the
assumption that the cost of such coverage would remain unchanged from that in
effect for the year in which such lump sum is paid.  Such lump sum amount shall be calculated by the actuary for the
Health Plan and paid in cash as soon as administratively practicable following
the expiration of Executive’s COBRA continuation period and shall not be
subject to reduction or forfeiture by reason of any coverage for which
Executive may thereafter become eligible by reason of subsequent employment or
otherwise. For purposes of this Section 6(a)(v), present value shall be
calculated on the basis of the discount rate set forth in the EXPP for the
determination of lump sum payments.


 


(b)                                 Death.  In the event of Executive’s death which
results in the termination of Executive’s employment, the Term will terminate,
all obligations of the Company and Executive under Sections 1 through 5 of this
Agreement will immediately cease except for obligations which expressly
continue after death, and the Company will pay Executive’s beneficiary or
estate, and Executive’s beneficiary or estate will be entitled to receive, the
following:


 


(i)                                     Executive’s Compensation Accrued at
Termination;


 


(ii)                                  In lieu of any annual incentive compensation
under Section 4(b) for the year in which Executive’s death occurred, an amount
equal to the portion of annual incentive compensation that would have become
payable in cash to Executive (i.e., excluding the portion payable in PERS or in
other non-cash awards) for that year if his employment had not terminated,
based on performance actually achieved in that year (determined by the
Committee following completion of the performance year), multiplied by a
fraction the numerator of which is the number of days Executive was employed in
the year of his death and the denominator of which is the total number of days
in the year of death;


 


(iii)                               The vesting and exercisability of stock options
held by Executive at death and all other terms of such options shall be
governed by the plans and programs and the agreements and other documents
pursuant to which such options were granted;


 


(iv)                              All restricted stock and deferred stock
awards, including outstanding PERS awards, all other long-term incentive
awards, and all deferral arrangements under Section 5(d), shall be governed by
the plans and programs under which the awards were granted or governing the
deferral, and all rights under the EXPP, USERP and any other benefit plan shall
be governed by such plan subject to, in the case of the EXPP and USERP, Section
5(b) hereof including without limitation that Additional Service Credits as
provided in Section 5(b)(iv) of this Agreement that were credited as of
Executive’s death shall be fully reflected and provided additionally that the
surviving spouse benefit under the USERP and/or the EXPP shall be  in an amount equal to 50% of the benefit
that would have been payable under Section 3.1 or 3.2 of the EXPP upon
Executive’s attainment of age 65 or Section 3.1 or 3.2 of the USERP upon
Executive’s attainment of age 55 (whichever is applicable or in the appropriate
combination thereof) without actuarial reduction or any other


 


6

















 


discount except as provided
in Section 5.5 of the EXPP and the USERP with respect to a reduction on account
of a surviving spouse who is more than ten years younger than Executive, and
payments to Executive’s surviving spouse shall commence on the later of the
date of Executive’s death or the date on which Executive would have attained
age 55; and


 


(v)                                 If Executive’s surviving spouse (and eligible
dependents, if any) elects continued coverage under the Company’s Health Plan
in accordance with the applicable provisions of  COBRA, the Company shall pay to Executive’s surviving spouse on a
monthly basis during such COBRA continuation period an amount equal on an
after-tax basis to the total cost of such coverage.  No further benefits shall be paid under this Section 6(b)(v)
after the expiration of the maximum COBRA continuation period available to
Executive’s surviving spouse and eligible dependents, if any.


 


(c)                                  Disability.  The Company may terminate the employment of
Executive hereunder due to the Disability (as defined in Section 8(d)) of
Executive.  Upon termination of
employment, the Term will terminate, all obligations of the Company and
Executive under Sections 1 through 5 of this Agreement will immediately cease
except for obligations which expressly continue after termination of employment
due to Disability, and the Company will pay Executive, and Executive will be
entitled to receive, the following:


 


(i)                                     Executive’s Compensation Accrued at
Termination;


 


(ii)                                  In lieu of any annual incentive compensation
under Section 4(b) for the year in which Executive’s employment terminated, an
amount equal to the portion of annual incentive compensation that would have
become payable in cash to Executive (i.e., excluding the portion payable in PERS
or in other non-cash awards) for that year if his employment had not
terminated, based on performance actually achieved in that year (determined by
the Committee following completion of the performance year), multiplied by a
fraction the numerator of which is the number of days Executive was employed in
the year of termination and the denominator of which is the total number of
days in the year of termination;


 


(iii)                               Stock options held by Executive at
termination shall be governed by the plans and programs and the agreements and
other documents pursuant to which such options were granted;


 


(iv)                              Any performance objectives upon which the
earning of performance-based restricted stock and deferred stock awards,
including outstanding PERS awards, and other long-term incentive awards is
conditioned shall be deemed to have been met at target level at the date of
termination, and restricted stock and deferred stock awards, including
outstanding PERS awards, and other long-term incentive awards (to the extent
then or previously earned, in the case of performance-based awards) shall
become fully vested and non-forfeitable at the date of such termination, and,
in other respects, such awards shall be governed by the plans and programs and
the agreements and other documents pursuant to which such awards were granted;


 


(v)                                 Disability benefits shall be payable in
accordance with the Company’s plans, programs and policies, including the EXPP
and USERP, provided; however, that there shall be no duplication of disability
benefits provided under the EXPP and USERP and provided further that in the
event that disability benefits payable under the EXPP or USERP shall cease,
Executive’s retirement benefits under the USERP and/or EXPP shall fully reflect
the Additional Service Credits that were credited as of Executive’s retirement
as  provided in Section 5(b)(iv) of this
Agreement  and  the payment of such retirement benefits under the USERP and/or
EXPP  shall commence at the later of the
cessation of Executive’s disability benefits or Executive’s attainment of age
55 in an amount equal to 100% of the benefit under Sections 3.1 or 3.2 of  the EXPP or Sections 3.1 or 3.2 of the USERP
(whichever is applicable or in the appropriate combination thereof) without
actuarial reduction or any other discount.), and all deferral arrangements
under Section 5(d) will be settled in accordance with the plans and programs
governing the deferral; and


 


(vi)                              If Executive elects after termination of
employment continued coverage under the Health Plan in accordance with the
applicable provisions of COBRA, the Company shall pay to Executive on a


 


7

















 


monthly basis during such
COBRA continuation period an amount equal on an after-tax basis to the total
cost of such coverage. Prior to the expiration of the maximum COBRA
continuation period available to Executive, provided that Executive theretofore
shall have complied with the conditions set forth in Section 10, the Company
shall make a good faith effort to obtain insured coverage for Executive (and
his spouse and eligible dependents, if any, for whom coverage had been provided
during the COBRA continuation period) that is substantially comparable to such
COBRA continuation coverage, which insured coverage shall begin on the date of
expiration of Executive’s COBRA continuation period and continue until the
earliest of:  (1) Executive’s
eligibility for medical coverage under the Company’s Health Plan, as a retiree
or active employee, (2) Executive’s eligibility for medical coverage under a
plan maintained by a subsequent employer or other entity to which Executive
provides services, (3) Executive’s eligibility for Medicare, or (4) Executive’s
attainment of age 65.  In the event that
the Company determines, in its sole discretion, that it is unable to obtain
such insured coverage for Executive (and his spouse and eligible dependents, if
any, for whom coverage had been provided during the COBRA continuation period)
or in the event that Executive determines, in his sole discretion, that any
such insured coverage offered by the Company is not substantially comparable to
such COBRA continuation coverage, the Company shall pay to Executive, provided
that Executive shall not have become eligible for medical coverage under (1) the
Company’s Health Plan, as a retiree or active employee, (2) a plan maintained
by a subsequent employer or other entity to which Executive provides services,
or (3) Medicare and, provided further, that Executive theretofore shall have
complied with the conditions set forth in Section 10, a lump sum amount equal
on an after-tax basis to the present value of 
the total cost of retiree medical coverage under the Health Plan that
would have been incurred by both Executive and the Company on behalf of
Executive (and his spouse and eligible dependents, if any, for whom coverage
had been provided during the COBRA continuation period) if Executive (and such
spouse and dependents, if any) had been eligible for such retiree medical
coverage from the end of Executive’s COBRA continuation period until
Executive’s attainment of age 65, calculated on the assumption that the cost of
such coverage would remain unchanged from that in effect for the year in which
such lump sum is paid.  Such lump sum
amount shall be calculated by the actuary for the Health Plan and paid in cash
as soon as administratively practicable following the expiration of Executive’s
COBRA continuation period and shall not be subject to reduction or forfeiture
by reason of any coverage for which Executive may thereafter become eligible by
reason of subsequent employment or otherwise. 
In addition, as soon as administratively practicable following
Executive’s termination of employment, provided that Executive shall have
complied with the conditions set forth in Section 10, the Company shall pay to
Executive a lump sum amount equal on an after-tax basis to the present value of
the sum of (1) the amount that Executive would have paid for coverage under the
Company’s group long-term disability policy from Executive’s termination of
employment until Executive’s attainment of age 65, calculated on the assumption
that the cost of such coverage would remain unchanged from that in effect for
the year in which Executive’s termination occurred; and (2)  the amount that the Company would have paid
to continue Executive’s group life insurance coverage from Executive’s
termination of employment until Executive’s attainment of age 65, calculated on
the assumption that the cost of such coverage would remain unchanged from that
in effect for the year in which Executive’s termination occurred.  For purposes of this Section 6(c)(vi),
present value shall be calculated on the basis of the discount rate set forth
in the EXPP for the determination of lump sum payments.


 


(d)                                 Other Terms of Payment Following Retirement, Death, or Disability. 
Nothing in this Section 6 shall limit the benefits payable or provided
In the event Executive’s employment terminates due to Retirement, death, or
Disability under the terms of plans or programs of the Company more favorable
to the Executive (or his beneficiaries) than the benefits payable or provided
under this Section 6 (except in the case of annual incentives in lieu of which
amounts are paid hereunder), including plans and programs adopted after the
date of this Agreement.  Amounts payable
under this Section 6 following Executive’s termination of employment, other
than those expressly payable following determination of performance for the
year of termination for purposes of annual incentive compensation or otherwise
expressly payable on a deferred basis, will be paid as promptly as practicable
after such termination of employment.


 


8

















 


7.                                       Termination of Employment For Reasons Other Than
Retirement, Death or Disability.


 


(a)                                  Termination
by the Company for Cause.  The
Company may terminate the employment of Executive hereunder for Cause (as
defined in Section 8(a)) at any time. 
At the time Executive’s employment is terminated for Cause, the Term will
terminate, all obligations of the Company and Executive under Sections 1
through 5 of this Agreement will immediately cease except for obligations which
expressly continue after termination of employment by the Company for Cause,
and the Company will pay Executive, and Executive will be entitled to receive,
the following:


 


(i)                                     Executive’s Compensation Accrued at
Termination (as defined in Section 8(c));


 


(ii)                                  All stock options, restricted stock and
deferred stock awards, including outstanding PERS awards, and all other
long-term incentive awards will be governed by the terms of the plans and
programs under which the awards were granted; and


 


(iii)                               All deferral arrangements under Section 5(d)
will be settled in accordance with the plans and programs governing the
deferral, and all rights, if any, under the EXPP and USERP and any other
benefit plan shall be governed by such plan.


 


(b)                                 Termination by Executive Other Than For Good Reason. 
Executive may terminate his employment hereunder voluntarily for reasons
other than Good Reason (as defined in Section 8(e)) at any time upon 90 days’
written notice to the Company.  An
election by Executive not to extend the Term pursuant to Section 2 hereof shall
be deemed to be a termination of employment by Executive for reasons other than
Good Reason at the date of expiration of the Term, unless a Change in Control
(as defined in Section 8(b)) occurs prior to, and there exists Good Reason at,
such date of expiration.  At the time Executive’s
employment is terminated by Executive other than for Good Reason the Term will
terminate, all obligations of the Company and Executive under Sections 1
through 5 of this Agreement will immediately cease, and the Company will pay
Executive, and Executive will be entitled to receive, the following:


 


(i)                                     Executive’s Compensation Accrued at
Termination;


 


(ii)                                  All stock options, restricted stock and
deferred stock awards, including outstanding PERS awards, and all other
long-term incentive awards will be governed by the terms of the plans and
programs under which the awards were granted; and


 


(iii)                               All deferral arrangements under Section 5(d)
will be settled in accordance with the plans and programs governing the
deferral, and all rights under the EXPP, USERP and any other benefit plan shall
be governed by such plan, subject to Section 5(b) hereof, including without
limitation that Additional Service Credits that were credited as of Executive’s
termination as provided in Section 5(b)(iv) of this Agreement shall be fully
reflected.


 


(c)                                  Termination by the Company Without Cause Prior to or More than Two
Years After a Change in Control.  The
Company may terminate the employment of Executive hereunder without Cause, if
at the date of termination no Change in Control has occurred or such date of
termination is at least two years after the most recent Change in Control, upon
at least 90 days’ written notice to Executive. 
The foregoing notwithstanding, the Company may elect, by written notice
to Executive, to terminate Executive’s positions specified in Sections 1 and 3
and all other obligations of Executive and the Company under Section 3 at a
date earlier than the expiration of such 90-day period, if so specified by the
Company in the written notice, provided that Executive shall be treated as an
employee of the Company (without any assigned duties) for all other purposes of
this Agreement, including for purposes of Sections 4 and 5, from such specified
date until the expiration of such 90-day period.  An election by the Company not to extend the Term pursuant to
Section 2 hereof shall be deemed to be a termination of Executive’s employment
by the Company without Cause at the date of expiration of the Term and shall be
subject to this Section 7(c) if at the date of such termination no Change in
Control has occurred or such date of termination is at least two years after
the most recent Change in Control; provided, however, that, if Executive has
attained age 65 at such date of termination, such termination shall be deemed a
Retirement of Executive.  At the time
Executive’s employment is terminated by the Company (i.e., at the expiration of
such notice period), the Term will terminate, all remaining obligations of the
Company and Executive under Sections 1 through 5 of this Agreement will
immediately cease (except for


 


9

















 


obligations which continue
after termination of employment as expressly provided herein), and the Company
will pay Executive, and Executive will be entitled to receive, the following:


 


(i)                                     Executive’s Compensation Accrued at
Termination;


 


(ii)                                  Cash in an aggregate amount equal to one
times the sum of (A) Executive’s Base Salary under Section 4(a) immediately
prior to termination plus (B) an amount equal to the greater of (x) the portion
of Executive’s annual target incentive compensation potentially payable in cash
to Executive (i.e., excluding the portion payable in PERS or in other non-cash
awards) for the year of termination or (y) the portion of Executive’s annual
incentive compensation that became payable in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards) for the
latest year preceding the year of termination based on performance actually
achieved in that latest year.  The
amount determined to be payable under this Section 7(c)(ii) shall be payable in
monthly installments over the 24 months following termination, without
interest, except the Company may elect to accelerate payment of  the remaining balance of such amount and to
pay it as a lump sum, without discount;


 


(iii)                               In lieu of any annual incentive compensation
under Section 4(b) for the year in which Executive’s employment terminated, an
amount equal to the portion of Executive’s annual target incentive compensation
potentially payable in cash to Executive (i.e., excluding the portion payable
in PERS or in other non-cash awards) for the year of termination, multiplied by
a fraction the numerator of which is the number of days Executive was employed
in the year of termination and the denominator of which is the total number of
days in the year of termination;


 


(iv)                              Stock options held by Executive at
termination, if not then vested and exercisable, will become fully vested and
exercisable at the date of such termination, and, in other respects (including
the period following termination during which such options may be exercised),
such options shall be governed by the plans and programs and the agreements and
other documents pursuant to which such options were granted;


 


(v)                                 Any performance objectives upon which the
earning of performance-based restricted stock and deferred stock awards,
including outstanding PERS awards, and other long-term incentive awards is
conditioned shall be deemed to have been met at target level at the date of
termination, and restricted stock and deferred stock awards, including
outstanding PERS awards, and other long-term incentive awards (to the extent
then or previously earned, in the case of performance-based awards) shall
become fully vested and non-forfeitable at the date of such termination, and,
in other respects, such awards shall be governed by the plans and programs and
the agreements and other documents pursuant to which such awards were granted;


 


(vi)                              All deferral arrangements under Section 5(d)
will be settled in accordance with the plans and programs governing the
deferral;


 


(vii)                           All rights under the EXPP and USERP shall be
governed by such plan, subject to Section 5(b) hereof including without
limitation that Additional Service Credits that were credited as of Executive’s
termination as provided in Section 5(b)(iv) of this Agreement shall be fully
reflected; and


 


(viii)                        If Executive elects after termination of
employment continued coverage under the Health Plan in accordance with the
applicable provisions of COBRA, the Company shall pay to Executive on a monthly
basis during such COBRA continuation period an amount equal on an after-tax
basis to the total cost of such coverage. If the maximum COBRA continuation
period available to Executive shall be less than two years, prior to the
expiration of the maximum COBRA continuation period available to Executive,
provided that Executive theretofore shall have complied with the conditions set
forth in Section 10, the Company shall make a good faith effort to obtain insured
coverage for Executive (and his spouse and eligible dependents, if any, for
whom coverage had been provided during the COBRA continuation period) that is
substantially comparable to such COBRA continuation coverage, which insured
coverage shall begin on the


 


10

















 


date of expiration of
Executive’s COBRA continuation period and continue until the second anniversary
of Executive’s termination of employment. 
In the event that the Company determines, in its sole discretion, that
it is unable to obtain such insured coverage for Executive (and his spouse and
eligible dependents, if any, for whom coverage had been provided during the
COBRA continuation period) or in the event that Executive determines, in his sole
discretion, that any such insured coverage offered by the Company is not
substantially comparable to such COBRA continuation coverage, the Company shall
pay to Executive, provided that Executive shall not have become eligible for
medical coverage under (1) the Company’s Health Plan, as a retiree or active
employee, (2) a plan maintained by a subsequent employer or other entity to
which Executive provides services, or (3) Medicare and, provided further, that
Executive theretofore shall have complied with the conditions set forth in
Section 10, a lump sum amount equal on an after-tax basis to the present value
of  the total cost of retiree medical
coverage under the Health Plan that would have been incurred by both Executive
and the Company on behalf of Executive (and his spouse and eligible dependents,
if any, for whom coverage had been provided during the COBRA continuation
period) if Executive (and such spouse and dependents, if any) had been eligible
for such retiree medical coverage from the end of Executive’s COBRA
continuation period until the second anniversary of Executive’s termination of
employment, calculated on the assumption that the cost of such coverage would
remain unchanged from that in effect for the year in which such lump sum is
paid.  Such lump sum amount shall be
calculated by the actuary for the Health Plan and paid in cash as soon as
administratively practicable following the expiration of Executive’s COBRA
continuation period and shall not be subject to reduction or forfeiture by reason
of any coverage for which Executive may thereafter become eligible by reason of
subsequent employment or otherwise. In addition, as soon as administratively
practicable following Executive’s termination of employment, provided that
Executive shall have complied with the conditions set forth in Section 10, the
Company shall pay to Executive a lump sum amount equal on an after-tax basis to
the present value of the sum of (1) the amount that Executive would have paid,
had he remained employed, for coverage under the Company’s group long-term
disability policy from the date of Executive’s termination of employment until
the second anniversary of Executive’s termination of employment,
calculated  on the assumption that the
cost of such coverage would remain unchanged from that in effect for the year
in which Executive’s termination occurred; and (2) the amount that the Company
would have paid to continue Executive’s group life insurance coverage, had he
remained employed, from the date of Executive’s termination of employment until
the second anniversary of Executive’s termination of employment, calculated on
the assumption that the cost of such coverage would remain unchanged from that
in effect for the year in which Executive’s termination occurred.  For purposes of this Section 7(c)(viii),
present value shall be calculated on the basis of the discount rate set forth
in the EXPP for the determination of lump sum payments.


 


(d)                                 Termination by Executive for Good Reason Prior to or More than Two
Years After a Change in Control. 
Executive may terminate his employment hereunder for Good Reason, prior
to a Change in Control or after the second anniversary of the most recent
Change in Control, upon 90 days’ written notice to the Company; provided,
however, that, if the Company has corrected the basis for such Good Reason
within 30 days after receipt of such notice, Executive may not terminate his
employment for Good Reason, and therefore Executive’s notice of termination
will automatically become null and void. 
At the time Executive’s employment is terminated by Executive for Good
Reason (i.e., at the expiration of such notice period), the Term will
terminate, all obligations of the Company and Executive under Sections 1
through 5 of this Agreement will immediately cease (except for obligations
which continue after termination of employment as expressly provided herein),
and the Company will pay Executive, and Executive will be entitled to receive,
the following:


 


(i)                                     Executive’s Compensation Accrued at
Termination;


 


(ii)                                  Cash in an aggregate amount equal to one
times the sum of (A) Exe cutive’s Base Salary under Section 4(a) immediately
prior to termination plus (B) an amount equal to the greater of (x) the portion
of Executive’s annual target incentive compensation potentially payable in cash
to Executive (i.e., excluding the portion payable in PERS or in other non-cash
awards) for the year of termination or (y) the portion of Executive’s annual
incentive compensation that became payable


 


11

















 


in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards) for the
latest year preceding the year of termination based on performance actually
achieved in that latest year.  The amount
determined to be payable under this Section 7(d)(ii) shall be payable in
monthly installments over the 24 months following termination, without
interest, except the Company may elect to accelerate payment of  the remaining balance of such amount and to
pay it as a lump sum, without discount;


 


(iii)                               In lieu of any annual incentive compensation
under Section 4(b) for the year in which Executive’s employment terminated, an
amount equal to the portion of Executive’s annual target incentive compensation
potentially payable in cash to Executive (i.e., excluding the portion payable
in PERS or in other non-cash awards) for the year of termination, multiplied by
a fraction the numerator of which is the number of days Executive was employed
in the year of termination and the denominator of which is the total number of
days in the year of termination;


 


(iv)                              Stock options held by Executive at
termination, if not then vested and exercisable, will become fully vested and
exercisable at the date of such termination, and, in other respects (including
the period following termination during which such options may be exercised),
such options shall be governed by the plans and programs and the agreements and
other documents pursuant to which such options were granted;


 


(v)                                 Any performance objectives upon which the
earning of performance-based restricted stock and deferred stock awards,
including outstanding PERS awards, and other long-term incentive awards is
conditioned shall be deemed to have been met at target level at the date of
termination, and restricted stock and deferred stock awards, including
outstanding PERS awards, and other long-term incentive awards (to the extent
then or previously earned, in the case of performance-based awards) shall
become fully vested and non-forfeitable at the date of such termination, and,
in other respects, such awards shall be governed by the plans and programs and
the agreements and other documents pursuant to which such awards were granted;


 


(vi)                              All deferral arrangements under Section 5(d)
will be settled in accordance with the plans and programs governing the
deferral;


 


(vii)                           All rights under the EXPP and USERP shall be
governed by such plan, subject to Section 5(b) hereof including without
limitation that Additional Service Credits that were credited as of Executive’s
termination as provided in Section 5(b)(iv) of this Agreement shall be fully
reflected; and


 


(viii)                        If Executive elects after termination of
employment continued coverage under the Health Plan in accordance with the
applicable provisions of COBRA, the Company shall pay to Executive on a monthly
basis during such COBRA continuation period an amount equal on an after-tax
basis to the total cost of such coverage. If the maximum COBRA continuation
period available to Executive shall be less than two years, prior to the
expiration of the maximum COBRA continuation period available to Executive,
provided that Executive theretofore shall have complied with the conditions set
forth in Section 10, the Company shall make a good faith effort to obtain
insured coverage for Executive (and his spouse and eligible dependents, if any,
for whom coverage had been provided during the COBRA continuation period) that
is substantially comparable to such COBRA continuation coverage, which insured
coverage shall begin on the date of expiration of Executive’s COBRA
continuation period and continue until the second anniversary of Executive’s
termination of employment.  In the event
that the Company determines, in its sole discretion, that it is unable to
obtain such insured coverage for Executive (and his spouse and eligible
dependents, if any, for whom coverage had been provided during the COBRA
continuation period) or in the event that Executive determines, in his sole
discretion, that any such insured coverage offered by the Company is not
substantially comparable to such COBRA continuation coverage, the Company shall
pay to Executive, provided that Executive shall not have become eligible for
medical coverage under (1) the Company’s Health Plan, as a retiree or active
employee, (2) a plan maintained by a subsequent employer or other entity to
which Executive provides services, or (3) Medicare and, provided further, that
Executive


 


12

















 


theretofore shall have
complied with the conditions set forth in Section 10, a lump sum amount equal
on an after-tax basis to the present value of 
the total cost of retiree medical coverage under the Health Plan that
would have been incurred by both Executive and the Company on behalf of
Executive (and his spouse and eligible dependents, if any, for whom coverage
had been provided during the COBRA continuation period) if Executive (and such
spouse and dependents, if any) had been eligible for such retiree medical
coverage from the end of Executive’s COBRA continuation period until the second
anniversary of Executive’s termination of employment, calculated on the
assumption that the cost of such coverage would remain unchanged from that in
effect for the year in which such lump sum is paid.  Such lump sum amount shall be calculated by the actuary for the
Health Plan and paid in cash as soon as administratively practicable following
the expiration of Executive’s COBRA continuation period and shall not be
subject to reduction or forfeiture by reason of any coverage for which
Executive may thereafter become eligible by reason of subsequent employment or
otherwise. In addition, as soon as administratively practicable following
Executive’s termination of employment, provided that Executive shall have
complied with the conditions set forth in Section 10, the Company shall pay to
Executive a lump sum amount equal on an after-tax basis to the present value of
the sum of (1) the amount that Executive would have paid, had he remained
employed, for coverage under the Company’s group long-term disability policy
from the date of Executive’s termination of employment until the second
anniversary of Executive’s termination of employment, calculated  on the assumption that the cost of such
coverage would remain unchanged from that in effect for the year in which
Executive’s termination occurred; and (2) the amount that the Company would
have paid to continue Executive’s group life insurance coverage, had he
remained employed, from the date of Executive’s termination of employment until
the second anniversary of Executive’s termination of employment, calculated on
the assumption that the cost of such coverage would remain unchanged from that
in effect for the year in which Executive’s termination occurred.  For purposes of this Section 7(d)(viii),
present value shall be calculated on the basis of the discount rate set forth
in the EXPP for the determination of lump sum payments.


 


If any payment or benefit
under this Section 7(d) is based on Base Salary or other level of compensation
or benefits at the time of Executive’s termination and if a reduction in such
Base Salary or other level of compensation or benefit was the basis for
Executive’s termination for Good Reason, then the Base Salary or other level of
compensation in effect before such reduction shall be used to calculate
payments or benefits under this Section 7(d).


 


(e)                                  Termination by the Company Without Cause
Within Two Years After a Change in Control.  The
Company may terminate the employment of Executive hereunder without Cause,
simultaneously with or within two years after a Change in Control, upon at
least 90 days’ written notice to Executive. 
The foregoing notwithstanding, the Company may elect, by written notice
to Executive, to terminate Executive’s positions specified in Sections 1 and 3
and all other obligations of Executive and the Company under Section 3 at a
date earlier than the expiration of such 90-day notice period, if so specified
by the Company in the written notice, provided that Executive shall be treated
as an employee of the Company (without any assigned duties) for all other
purposes of this Agreement, including for purposes of Sections 4 and 5, from
such specified date until the expiration of such 90-day period.  An election by the Company not to extend the
Term pursuant to Section 2 hereof shall be deemed to be a termination of
Executive’s employment by the Company without Cause at the date of expiration
of the Term and shall be subject to this Section 7(e) if the date of such termination
coincides with or is within two years after a Change in Control; provided,
however, that, if Executive has attained age 65 at such date of termination,
such termination shall be deemed a Retirement of Executive.  At the time Executive’s employment is terminated
by the Company (i.e., at the expiration of such notice period), the Term will
terminate, all remaining obligations of the Company and Executive under
Sections 1 through 5 of this Agreement will immediately cease (except for
obligations which continue after termination of employment as expressly
provided herein), and the Company will pay Executive, and Executive will be
entitled to receive, the following:


 


(i)                                     Executive’s Compensation Accrued at
Termination;


 


(ii)                                  Cash in an aggregate amount equal to three
times the sum of (A) Executive’s Base Salary under Section 4(a) immediately
prior to termination plus (B) an amount equal to the greater of (x) the portion
of Executive’s annual target incentive compensation potentially payable in cash
to


 


13

















 


Executive (i.e., excluding
the portion payable in PERS or in other non-cash awards) for the year of
termination or (y) the portion of Executive’s annual incentive compensation
that became payable in cash to Executive (i.e., excluding the portion payable
in PERS or in other non-cash awards) for the latest year preceding the year of
termination based on performance actually achieved in that latest year.  The amount determined to be payable under
this Section 7(e)(ii) shall be paid by the Company not later than 15 days after
Executive’s termination;


 


(iii)                               In lieu of any annual incentive compensation
under Section 4(b) for the year in which Executive’s employment terminated, an
amount equal to the portion of Executive’s annual target incentive compensation
potentially payable in cash to Executive (i.e., excluding the portion payable
in PERS or in other non-cash awards) for the year of termination, multiplied by
a fraction the numerator of which is the number of days Executive was employed
in the year of termination and the denominator of which is the total number of
days in the year of termination;


 


(iv)                              Stock options held by Executive at
termination, if not then vested and exercisable, will become fully vested and exercisable
at the date of such termination, and any such options granted on or after the
date hereof shall remain outstanding and exercisable until the stated
expiration date of the Option as though Executive’s employment did not
terminate, and, in other respects, such options shall be governed by the plans
and programs and the agreements and other documents pursuant to which such
options were granted;


 


(v)                                 Any performance objectives upon which the
earning of performance-based restricted stock and deferred stock awards,
including outstanding PERS awards, and other long-term incentive awards is
conditioned shall be deemed to have been met at target level at the date of
termination, and restricted stock and deferred stock awards, including
outstanding PERS awards, and other long-term incentive awards (to the extent
then or previously earned, in the case of performance-based awards) shall
become fully vested and non-forfeitable at the date of such termination, and,
in other respects, such awards shall be governed by the plans and programs and
the agreements and other documents pursuant to which such awards were granted;


 


(vi)                              All deferral arrangements under Section 5(d)
will be settled in accordance with the plans and programs governing the
deferral;


 


(vii)                           All rights under the EXPP and USERP shall be
governed by such plan, subject to Section 5(b) hereof including without
limitation that Additional Service Credits that were credited as of Executive’s
termination as provided in Section 5(b)(iv) of this Agreement shall be fully
reflected; provided additionally that (a) payments under the EXPP and USERP
shall commence as provided in Section 3.8 of the EXPP and the USERP in an
amount equal to 100% of the benefit under Section 3.1 or 3.2 of the EXPP or
Section 3.1 or 3.2 of the USERP (whichever is applicable or in the appropriate
combination thereof) without actuarial reduction or any other discount and (b)
if such termination occurs prior to January 31, 2006, any additional years of
Service credited as a result of Section 3.8 of the EXPP (governing Change in
Control) shall be credited in accordance with Section 5(b)(iv) of this
Agreement so that the Additional Service Credits are fully reflected in the
additional years of Service credited pursuant to Section 3.8 of the EXPP; and


 


(viii)                        If Executive elects after termination of
employment continued coverage under the Health Plan in accordance with the
applicable provisions of COBRA, the Company shall pay to Executive on a monthly
basis during such COBRA continuation period an amount equal on an after-tax
basis to the total cost of such coverage. If the maximum COBRA continuation
period available to Executive shall be less than three years, prior to the
expiration of the maximum COBRA continuation period available to Executive,
provided that Executive theretofore shall have complied with the conditions set
forth in Section 10, the Company shall make a good faith effort to obtain
insured coverage for Executive (and his spouse and eligible dependents, if any,
for whom coverage had been provided during the COBRA continuation period) that
is substantially comparable to such COBRA continuation coverage, which insured
coverage shall begin on the date of expiration of Executive’s COBRA
continuation period and continue until the third anniversary of Executive’s
termination of employment.  In the event
that the Company


 


14

















 


determines, in its sole
discretion, that it is unable to obtain such insured coverage for Executive
(and his spouse and eligible dependents, if any, for whom coverage had been
provided during the COBRA continuation period) or in the event that Executive
determines, in his sole discretion, that any such insured coverage offered by
the Company is not substantially comparable to such COBRA continuation
coverage, the Company shall pay to Executive, provided that Executive shall not
have become eligible for medical coverage under (1) the Company’s Health Plan,
as a retiree or active employee, (2) a plan maintained by a subsequent employer
or other entity to which Executive provides services, or (3) Medicare and,
provided further, that Executive theretofore shall have complied with the
conditions set forth in Section 10, a lump sum amount equal on an after-tax
basis to the present value of  the total
cost of retiree medical coverage under the Health Plan that would have been
incurred by both Executive and the Company on behalf of Executive (and his
spouse and eligible dependents, if any, for whom coverage had been provided
during the COBRA continuation period) if Executive (and such spouse and
dependents, if any) had been eligible for such retiree medical coverage from
the end of Executive’s COBRA continuation period until the third anniversary of
Executive’s termination of employment, calculated on the assumption that the
cost of such coverage would remain unchanged from that in effect for the year
in which such lump sum is paid.  Such
lump sum amount shall be calculated by the actuary for the Health Plan and paid
in cash as soon as administratively practicable following the expiration of
Executive’s COBRA continuation period and shall not be subject to reduction or
forfeiture by reason of any coverage for which Executive may thereafter become
eligible by reason of subsequent employment or otherwise. In addition, as soon
as administratively practicable following Executive’s termination of
employment, provided that Executive shall have complied with the conditions set
forth in Section 10, the Company shall pay to Executive a lump sum amount equal
on an after-tax basis to the present value of the sum of (1) the amount that
Executive would have paid, had he remained employed, for coverage under the
Company’s group long-term disability policy from the date of Executive’s
termination of employment until the third anniversary of Executive’s
termination of employment, calculated 
on the assumption that the cost of such coverage would remain unchanged
from that in effect for the year in which Executive’s termination occurred; and
(2) the amount that the Company would have paid to continue Executive’s group
life insurance coverage, had he remained employed, from the date of Executive’s
termination of employment until the third anniversary of Executive’s
termination of employment, calculated on the assumption that the cost of such
coverage would remain unchanged from that in effect for the year in which
Executive’s termination occurred.  For
purposes of this Section 7(e)(viii), present value shall be calculated on the
basis of the discount rate set forth in the EXPP for the determination of lump
sum payments.


 


(f)                                    Termination by Executive for Good Reason Within Two Years After a
Change in Control. 
Executive may terminate his employment hereunder for Good Reason,
simultaneously with or within two years after a Change in Control, upon 90
days’ written notice to the Company; provided, however, that, if the Company
has corrected the basis for such Good Reason within 30 days after receipt of
such notice, Executive may not terminate his employment for Good Reason, and
therefore Executive’s notice of termination will automatically become null and
void.  At the time Executive’s
employment is terminated by Executive for Good Reason (i.e., at the expiration
of such notice period), the Term will terminate, all obligations of the Company
and Executive under Sections 1 through 5 of this Agreement will immediately
cease (except for obligations which continue after termination of employment as
expressly provided herein), and the Company will pay Executive, and Executive
will be entitled to receive, the following:


 


(i)                                     Executive’s Compensation Accrued at
Termination;


 


(ii)                                  Cash in an aggregate amount equal to three
times the sum of (A) Executive’s Base Salary under Section 4(a) immediately
prior to termination plus (B) an amount equal to the greater of (x) the portion
of Executive’s annual target incentive compensation potentially payable in cash
to Executive (i.e., excluding the portion payable in PERS or in other non-cash
awards) for the year of termination or (y) the portion of Executive’s annual
incentive compensation that became payable in cash to Executive (i.e.,
excluding the portion payable in PERS or in other non-cash awards) for the
latest year preceding the year of termination based on performance actually
achieved in that


 


15

















 


latest year.  The amount determined to be payable under
this Section 7(f)(ii) shall be paid by the Company not later than 15 days after
Executive’s termination;


 


(iii)                               In lieu of any annual incentive compensation
under Section 4(b) for the year in which Executive’s employment terminated, an
amount equal to the portion of Executive’s annual target incentive compensation
potentially payable in cash to Executive (i.e., excluding the portion payable
in PERS or in other non-cash awards) for the year of termination, multiplied by
a fraction the numerator of which is the number of days Executive was employed
in the year of termination and the denominator of which is the total number of
days in the year of termination;


 


(iv)                              Stock options held by Executive at
termination, if not then vested and exercisable, will become fully vested and
exercisable at the date of such termination, and any such options granted on or
after the date hereof shall remain outstanding and exercisable until the stated
expiration date of the Option as though Executive’s employment did not
terminate, and, in other respects, such options shall be governed by the plans
and programs and the agreements and other documents pursuant to which such
options were granted;


 


(v)                                 Any performance objectives upon which the
earning of performance-based restricted stock and deferred stock awards,
including outstanding PERS awards, and other long-term incentive awards is
conditioned shall be deemed to have been met at target level at the date of
termination, and restricted stock and deferred stock awards, including
outstanding PERS awards, and other long-term incentive awards (to the extent
then or previously earned, in the case of performance-based awards) shall
become fully vested and non-forfeitable at the date of such termination, and,
in other respects, such awards shall be governed by the plans and programs and
the agreements and other documents pursuant to which such awards were granted;


 


(vi)                              All deferral arrangements under Section 5(d)
will be settled in accordance with the plans and programs governing the
deferral;


 


(vii)                           All rights under the EXPP and USERP shall be
governed by such plan, subject to Section 5(b) hereof including without
limitation that Additional Service Credits that were credited as of Executive’s
termination as provided in Section 5(b)(iv) of this Agreement shall be fully
reflected; provided additionally that (a) payments under the EXPP and USERP
shall commence as provided in Section 3.8 of the EXPP and the USERP in an
amount equal to 100% of the benefit under Section 3.1 or 3.2 of the EXPP or
Section 3.1 or 3.2 of the USERP (whichever is applicable or in the appropriate
combination thereof) without actuarial reduction or any other discount and (b)
if such termination occurs prior to January 31, 2006 any additional years of
Service credited as a result of Section 3.8 of the EXPP (governing Change in
Control) shall be credited in accordance with Section 5(b)(iv) of this Agreement
so that the Additional Service Credits are fully reflected in the additional
years of Service credited pursuant to Section 3.8 of the EXPP; and


 


(viii)                        If Executive elects after termination of
employment continued coverage under the Health Plan in accordance with the
applicable provisions of COBRA, the Company shall pay to Executive on a monthly
basis during such COBRA continuation period an amount equal on an after-tax
basis to the total cost of such coverage. If the maximum COBRA continuation period
available to Executive shall be less than three years, prior to the expiration
of the maximum COBRA continuation period available to Executive, provided that
Executive theretofore shall have complied with the conditions set forth in
Section 10, the Company shall make a good faith effort to obtain insured
coverage for Executive (and his spouse and eligible dependents, if any, for
whom coverage had been provided during the COBRA continuation period) that is
substantially comparable to such COBRA continuation coverage, which insured
coverage shall begin on the date of expiration of Executive’s COBRA
continuation period and continue until the third anniversary of Executive’s
termination of employment.  In the event
that the Company determines, in its sole discretion, that it is unable to
obtain such insured coverage for Executive (and his spouse and eligible
dependents, if any, for whom coverage had been provided during the COBRA
continuation period) or in the event that Executive determines, in his sole discretion,
that any such insured coverage offered by the Company is not substantially
comparable to such


 


16

















 


COBRA continuation coverage,
the Company shall pay to Executive, provided that Executive shall not have
become eligible for medical coverage under (1) the Company’s Health Plan, as a
retiree or active employee, (2) a plan maintained by a subsequent employer or
other entity to which Executive provides services, or (3) Medicare and,
provided further, that Executive theretofore shall have complied with the
conditions set forth in Section 10, a lump sum amount equal on an after-tax
basis to the present value of  the total
cost of retiree medical coverage under the Health Plan that would have been
incurred by both Executive and the Company on behalf of Executive (and his
spouse and eligible dependents, if any, for whom coverage had been provided
during the COBRA continuation period) if Executive (and such spouse and
dependents, if any) had been eligible for such retiree medical coverage from
the end of Executive’s COBRA continuation period until the third anniversary of
Executive’s termination of employment, calculated on the assumption that the
cost of such coverage would remain unchanged from that in effect for the year
in which such lump sum is paid.  Such
lump sum amount shall be calculated by the actuary for the Health Plan and paid
in cash as soon as administratively practicable following the expiration of
Executive’s COBRA continuation period and shall not be subject to reduction or
forfeiture by reason of any coverage for which Executive may thereafter become
eligible by reason of subsequent employment or otherwise. In addition, as soon
as administratively practicable following Executive’s termination of employment,
provided that Executive shall have complied with the conditions set forth in
Section 10, the Company shall pay to Executive a lump sum amount equal on an
after-tax basis to the present value of the sum of (1) the amount that
Executive would have paid, had he remained employed, for coverage under the
Company’s group long-term disability policy from the date of Executive’s
termination of employment until the third anniversary of Executive’s
termination of employment, calculated 
on the assumption that the cost of such coverage would remain unchanged
from that in effect for the year in which Executive’s termination occurred; and
(2) the amount that the Company would have paid to continue Executive’s group
life insurance coverage, had he remained employed, from the date of Executive’s
termination of employment until the third anniversary of Executive’s
termination of employment, calculated on the assumption that the cost of such
coverage would remain unchanged from that in effect for the year in which Executive’s
termination occurred.  For purposes of
this Section 7(f)(viii), present value shall be calculated on the basis of the
discount rate set forth in the EXPP for the determination of lump sum payments.


 


If any payment or benefit
under this Section 7(f) is based on Base Salary or other level of compensation
or benefits at the time of Executive’s termination and if a reduction in such
Base Salary or other level of compensation or benefit was the basis for
Executive’s termination for Good Reason, then the Base Salary or other level of
compensation in effect before such reduction shall be used to calculate
payments or benefits under this Section 7(f).


 


(g)                                 Other Terms Relating to Certain Terminations of Employment. 
Whether a termination is deemed to be at or within two years after a
Change in Control for purposes of Sections 7(c), (d), (e), or (f) is determined
at the date of termination, regardless of whether the Change in Control had
occurred at the time a notice of termination was given.  In the event Executive’s employment
terminates for any reason set forth in Section 7(b) through (f), Executive will
be entitled to the benefit of any terms of plans or agreements applicable to
Executive which are more favorable than those specified in this Section 7 (except
in the case of annual incentives in lieu of which amounts are paid
hereunder).  Amounts payable under this
Section 7 following Executive’s termination of employment, other than those
expressly payable on a deferred basis, will be paid as promptly as practicable
after such a termination of employment, and such amounts payable under Section
7(e) or 7(f) will be paid in no event later than 15 days after Executive’s
termination of employment unless not determinable within such period.


 


8.                                       Definitions Relating to Termination Events.


 


(a)                                  “Cause.”  For purposes of this Agreement, “Cause”
shall mean Executive’s


 


(i)                                     willful and continued failure to
substantially perform his duties hereunder (other than any such failure
resulting from incapacity due to physical or mental illness or Disability or
any failure after the issuance of a notice of termination by Executive for Good
Reason) which failure is demonstrably and materially damaging to the financial
condition or reputation of the Company and/or its subsidiaries, and which
failure continues more than 48 hours after a written demand for


 


17

















 


substantial performance is
delivered to Executive by the Board, which demand specifically identifies the
manner in which the Board believes that Executive has not substantially
performed his duties hereunder and the demonstrable and material damage caused
thereby; or


 


(ii)                                  the willful engaging by Executive in conduct
which is demonstrably and materially injurious to the Company, monetarily or
otherwise.


 


No act, or failure to act,
on the part of Executive shall be deemed “willful” unless done, or omitted to
be done, by Executive not in good faith and without reasonable belief that his
action or omission was in the best interest of the Company.  Notwithstanding the foregoing, Executive
shall not be deemed to have been terminated for Cause unless and until there
shall have been delivered to Executive a copy of the resolution duly adopted by
the affirmative vote of not less than three-quarters (3/4) of the entire
membership of the Board at a meeting of the Board (after reasonable notice to
Executive and an opportunity for Executive, together with Executive’s counsel,
to be heard before the Board) finding that, in the good faith opinion of the
Board, Executive was guilty of conduct set forth above in this definition and
specifying the particulars thereof in detail.


 


(b)                                 “Change in Control.”  For
purposes of this Agreement, a “Change in Control” shall be deemed to have
occurred if, during the term of this Agreement:


 


(i)                                     any “Person,” as such term is used for
purposes of Section 13(d) or 14(d) of the Securities Exchange Act of 1934, as
amended (the “Exchange Act”) (other than the Company, any trustee or other
fiduciary holding securities under an employee benefit plan of the Company, or
any company owned, directly or indirectly, by the stockholders of the Company
in substantially the same proportions as their ownership of stock of the
Company), 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
then-outstanding securities;


 


(ii)                                  during any period of twenty-four months (not
including any period prior to the effectiveness of this Agreement), individuals
who at the beginning of such period constitute the Board, and any new director
(other than (A) a director nominated by a Person who has entered into an
agreement with the Company to effect a transaction described in Sections
(8)(b)(i), (iii) or (iv) hereof, (B) a director nominated by any Person
(including the Company) who publicly announces an intention to take or to
consider taking actions (including, but not limited to, an actual or threatened
proxy contest) which if consummated would constitute a Change in Control or (C)
a director nominated by any Person who is the Beneficial Owner, directly or
indirectly, of securities of the Company representing 10% or more of the
combined voting power of the Company’s securities) whose election by the Board
or nomination for election by the Company’s stockholders was approved in
advance by a vote of at least two-thirds (2/3) of the directors then still in
office who either were directors at the beginning of the period or whose
election or nomination for election was previously so approved, cease for any
reason to constitute at least a majority thereof;


 


(iii)                               the stockholders of the Company approve any
transaction or series of transactions under which the Company is merged or
consolidated with any other company, other than a merger or consolidation (A)
which would result in the voting securities of the Company outstanding
immediately prior thereto continuing to represent (either by remaining
outstanding or by being converted into voting securities of the surviving
entity) more than 66 2/3% of the combined voting power of the voting securities
of the Company or such surviving entity outstanding immediately after such
merger or consolidation and (B) after which no Person holds 20% or more of the
combined voting power of the then-outstanding securities of the Company or such
surviving entity;


 


(iv)                              the stockholders of the Company approve a
plan of complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company’s assets;
or


 


(v)                                 the Board adopts a resolution to the effect
that, for purposes of this Agreement, a Change in Control has occurred.


 


18

















 


(c)                                  “Compensation
Accrued at Termination.”  For purposes of this Agreement,
“Compensation Accrued at Termination” means the following:


 


(i)                                     The unpaid portion of annual base salary at
the rate payable, in accordance with Section 4(a) hereof, at the date of
Executive’s termination of employment, pro rated through such date of
termination, payable in accordance with the Company’s regular pay schedule;


 


(ii)                                  All vested, nonforfeitable amounts owing or
accrued at the date of Executive’s termination of employment under any
compensation and benefit plans, programs, and arrangements set forth or
referred to in Sections 4(b) and 5(a) and 5(b) hereof (including any earned and
vested annual incentive compensation and long-term incentive award) in which
Executive theretofore participated, payable in accordance with the terms and
conditions of the plans, programs, and arrangements (and agreements and
documents thereunder) pursuant to which such compensation and benefits were
granted or accrued; and


 


(iii)                               Reasonable business expenses and
disbursements incurred by Executive prior to Executive’s termination of
employment, to be reimbursed to Executive, as authorized under Section 5(f), in
accordance the Company’s reimbursement policies as in effect at the date of such
termination.


 


(d)                                 “Disability.”  For
purposes of this Agreement, “Disability” shall have the meaning ascribed to it
under the EXPP.


 


(e)                                  “Good Reason.”  For
purposes of this Agreement, “Good Reason” shall mean, without Executive’s
express written consent, the occurrence of any of the following circumstances
unless, in the case of subsections (i), (iv), (vi) or (viii) hereof, such
circumstances are fully corrected prior to the date of termination specified in
the notice of termination given in respect thereof:


 


(i)                                     the assignment to Executive of duties  inconsistent with Executive’s position and
status as Senior Vice President and General Counsel, or an alteration,  adverse to Executive, in Executive’s
position and status as Senior Vice President and General Counsel or in the
nature of Executive’s duties, responsibilities, and authorities or conditions
of Executive’s employment from those relating to Executive position and status
as Senior Vice President and General Counsel (excluding changes in assignments
permitted under Section 3 and excluding inadvertent actions which are promptly
remedied); except the foregoing shall not constitute Good Reason if occurring
in connection with the termination of Executive’s employment for Cause,
Disability, Retirement, as a result of Executive’s death, or as a result of
action by or with the consent of Executive; for purposes of this Section
8(e)(i), references to the Company (and the Board and stockholders of the
Company) refer to the ultimate parent company (and its board and stockholders)
succeeding the Company following an acquisition in which the corporate
existence of the Company continues, in accordance with Section 12(b);


 


(ii)                                  (A) a reduction by the Company in Executive’s
Base Salary, (B) the setting of Executive’s annual target incentive opportunity
or payment of earned annual incentive in amounts less than specified under or
otherwise not in conformity with Section 4 hereof, (C) a change in compensation
or benefits not in conformity with Section 5, or (D) a reduction, after a
Change in Control in perquisites from the level of such perquisites as in
effect immediately prior to the Change in Control or as the same may have been
increased from time to time after the Change in Control except for
across-the-board perquisite reductions similarly affecting all senior
executives of the Company and all senior executives of any Person in control of
the Company;


 


(iii)                               the relocation of the principal place of
Executive’s employment not in conformity with Section 3(b) hereof; for this
purpose, required travel on the Company’s business will not constitute a
relocation so long as the extent of such travel is substantially consistent
with Executive’s customary business travel obligations in periods prior to the
Effective Date;


 


19

















 


(iv)                              the failure by the Company to pay to
Executive any portion of Executive’s compensation or to pay to Executive any
portion of an installment of deferred compensation under any deferred
compensation program of the Company within seven days of the date such
compensation is due;


 


(v)                                 the failure by the Company to continue in
effect any material compensation or benefit plan in which Executive
participated immediately prior to a Change in Control, unless an equitable
arrangement (embodied in an ongoing substitute or alternative plan) has been
made with respect to such plan, or the failure by the Company to continue
Executive’s participation therein (or in such substitute or alternative plan)
on a basis not materially less favorable, both in terms of the amounts of
compensation or benefits provided and the level of Executive’s participation
relative to other participants, as existed at the time of the Change in
Control;


 


(vi)                              the failure of the Company to obtain a
satisfactory agreement from any successor to the Company to fully assume the
Company’s obligations and to perform under this Agreement, as contemplated in
Section 12(b) hereof, in a form reasonably acceptable to Executive;


 


(vii)                           any election by the Company not to extend the
Term of this Agreement at the next possible extension date under Section 2
hereof, unless Executive will have attained age 65 at or before such extension
date; or


 


(viii)                        any other failure by the Company to perform
any material obligation under, or breach by the Company of any material
provision of, this Agreement;


 


provided, however, that a
forfeiture under Section 10(f) or (g) shall not constitute “Good Reason.”


 


(f)                                    “Potential
Change in Control”  For purposes
of this Agreement, a “Change in Control” shall be deemed to have occurred if,
during the term of this Agreement:


 


(i)                                     the Company enters into an agreement, the
consummation of which would result in the occurrence of a Change in Control;


 


(ii)                                  any Person (including the Company) publicly
announces an intention to take or to consider taking actions which if
consummated would constitute a Change in Control; or


 


(iii)                               the Board adopts a resolution to the effect
that, for purposes of this Agreement, a Potential Change in Control has occurred.


 


9.                                       Rabbi Trust Obligation Upon Potential Change in
Control; Excise Tax-Related Provisions.


 


(a)                                  Rabbi Trust Funded Upon Potential Change in Control. In the event of a Potential Change in
Control or Change in Control, the Company shall, not later than 15 days
thereafter, have established one or more rabbi trusts and shall deposit therein
cash in an amount sufficient to provide for full payment of all potential
obligations of the Company that would arise assuming consummation of a Change
in Control, or has arisen in the case of an actual Change in Control, and a
subsequent termination of Executive’s employment under Section 7(e) or (f).
Such rabbi trust(s) shall be irrevocable and shall provide that the Company may
not, directly or indirectly, use or recover any assets of the trust(s) until
such time as all obligations which potentially could arise hereunder have been
settled and paid in full, subject only to the claims of creditors of the
Company in the event of insolvency or bankruptcy of the Company; provided,
however, that if no Change in Control has occurred within two years after such
Potential Change in Control, such rabbi trust(s) shall at the end of such
two-year period become revocable and may thereafter be revoked by the Company.


 


(b)                                 Gross-up
If Excise Tax Would Apply.  In
the event Executive becomes entitled to any amounts or benefits payable in
connection with a Change in Control or other change in control (whether or not
such amounts are payable pursuant to this Agreement) (the “Severance
Payments”), if any of such Severance Payments are subject to the tax (the
“Excise Tax”) imposed by Section 4999 of the Internal Revenue Code (or any
similar federal, state or local tax that may hereafter be imposed) (the
“Code”), the Company shall pay to Executive at the time specified in Section
9(b)(iii) hereof an additional amount (the “Gross-Up Payment”) such that the
net amount retained by Executive, after deduction of any Excise Tax on the
Total Payments (as hereinafter defined) and any federal, state


 


20

















 


and local income tax and
Excise Tax upon the payment provided for by Section 9(b)(i), shall be equal to
the Total Payments.


 


(i)                                     For purposes of determining whether any of
the Severance Payments will be subject to the Excise Tax and the amount of such
Excise Tax:


 


(A)                              any other payments or benefits received or to
be received by Executive in connection with a Change in Control or Executive’s
termination of employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Company, any Person whose
actions result in a Change in Control or any Person affiliated with the Company
or such Person) (which, together with the Severance Payments, constitute the
“Total Payments”) 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 nationally-recognized tax counsel
selected by Executive such other payments or benefits (in whole or in part) do
not constitute parachute payments, or such excess parachute payments (in whole
or in part) represent reasonable compensation for services actually rendered
within the meaning of Section 280G(b)(4) of the Code in excess of the base
amount within the meaning of Section 280G(b)(3) of the Code, or are otherwise
not subject to the Excise Tax;


 


(B)                                the amount of the Total Payments which shall
be treated as subject to the Excise Tax shall be equal to the lesser of (x) the
total amount of the Total Payments and (y) the amount of excess parachute
payments within the meaning of Section 280G(b)(1) of the Code (after applying
Section 9(b)(i)(A) hereof); and


 


(C)                                the value of any non-cash benefits or any
deferred payments or benefit shall be determined by a nationally-recognized
accounting firm selected by Executive in accordance with the principles of
Sections 280G(d)(3) and (4) of the Code.


 


(ii)                                  For purposes of determining the amount of the
Gross-Up Payment, Executive 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 in the state and locality of Executive’s
residence on the Date of Termination, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state and local taxes.
In the event that the Excise Tax is subsequently determined to be less than the
amount taken into account hereunder at the time of termination of Executive’s
employment, Executive shall repay to the Company within ten days after 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 tax imposed on the Gross-Up Payment being repaid by
Executive if such repayment results in a reduction in Excise Tax and/or federal
and state and local income tax deduction) plus interest on the amount of such
repayment at the rate provided in Section 1274(b)(2)(B) of the Code.  In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder at the time of the
termination of Executive’s employment (including by reason of any payment 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 within ten days after the time that the amount of such excess is
finally determined.


 


(iii)                               The payments provided for in this Section
9(b) shall be made not later than the fifteenth day following the date of
Executive’s termination of employment; provided, however, that if the
amount of such payments cannot be finally determined on or before such day, the
Company shall pay to Executive on such day an estimate, as determined in good
faith by the Company, of the minimum amount of such payments and shall pay the
remainder of such payments (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code) as soon as the amount thereof can be
determined but in no event later than the thirtieth day after the date of
Executive’s termination of employment. 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


 


21

















 


Company to Executive,
payable on the fifteenth day after the demand by the Company (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code).


 


(iv)                              All determinations under this Section 9(b)
shall be made at the expense of the Company by a nationally recognized public
accounting firm selected by Executive, and such determination shall be binding
upon Executive and the Company.


 


10.                                 Non-Competition and Non-Disclosure; Executive
Cooperation; Non-Disparagement; Certain Forfeitures.


 


(a)                                  Non-Competition. Without the consent in writing of the Board, Executive will not, at
any time during the Term and for a period of two years following termination of
Executive’s employment for any reason, acting alone or in conjunction with
others, directly or indirectly (i) engage (either as owner, investor, partner,
stockholder, employer, employee, consultant, advisor, or director) in any
business in which he has been directly engaged on behalf of the Company or any
affiliate, or has supervised as an executive thereof, during the last two years
prior to such termination, or which was engaged in or planned by the Company or
an affiliate at the time of such termination, in any geographic area in which
such business was conducted or planned to be conducted; (ii) induce any
customers of the Company or any of its affiliates with whom Executive has had
contacts or relationships, directly or indirectly, during and within the scope
of his employment with the Company or any of its affiliates, to curtail or
cancel their business with the Company or any such affiliate; (iii) induce, or
attempt to influence, any employee of the Company or any of its affiliates to
terminate employment; or (iv) solicit, hire or retain as an employee or
independent contractor, or assist any third party in the solicitation, hire, or
retention as an employee or independent contractor, any person who during the
previous 12 months was an employee of the Company or any affiliate; provided,
however, that the limitation contained in clause (i) above shall not apply
if Executive’s employment is terminated as a result of a termination by the
Company without Cause within two years following a Change in Control or is
terminated by Executive for Good Reason within two years following a Change in
Control, and provided further, that activities engaged in by or on behalf of
the Company are not restricted by this covenant. The provisions of
subparagraphs (i), (ii), (iii), and (iv) above are separate and distinct
commitments independent of each of the other subparagraphs.  It is agreed that the ownership of not more
than one percent of the equity securities of any company having securities
listed on an exchange or regularly traded in the over-the-counter market shall
not, of itself, be deemed inconsistent with clause (i) of this Section 10(a).


 


(b)                                 Non-Disclosure;
Ownership of Work. Executive shall not, at any time during the
Term and thereafter (including following Executive’s termination of employment
for any reason), disclose, use, transfer, or sell, except in the course of
employment with or other service to the Company, any proprietary information,
secrets, organizational or employee information, or other confidential
information belonging or relating to the Company and its affiliates and
customers so long as such information has not otherwise been disclosed or is
not otherwise in the public domain, except as required by law or pursuant to
legal process. In addition, upon termination of employment for any reason,
Executive will return to the Company or its affiliates all documents and other
media containing information belonging or relating to the Company or its
affiliates. Executive will promptly disclose in writing to the Company all inventions,
discoveries, developments, improvements and innovations (collectively referred
to as “Inventions”) that Executive has conceived or made during the Term; provided,
however, that in this context “Inventions” are limited to those which (i)
relate in any manner to the existing or contemplated business or research
activities of the Company and its affiliates; (ii) are suggested by or result
from Executive’s work at the Company; or (iii) result from the use of the time,
materials or facilities of the Company and its affiliates. All Inventions will
be the Company’s property rather than Executive’s. Should the Company request
it, Executive agrees to sign any document that the Company may reasonably
require to establish ownership in any Invention.


 


(c)                                  Cooperation
With Regard to Litigation. Executive agrees to cooperate with the
Company, during the Term and thereafter (including following Executive’s
termination of employment for any reason), by making herself available to
testify on behalf of the Company or any subsidiary or affiliate of the Company,
in any action, suit, or proceeding, whether civil, criminal, administrative, or
investigative, and to assist the Company, or any subsidiary or affiliate of the
Company, in any such action, suit, or proceeding, by providing information and
meeting and consulting with the Board or its representatives or counsel, or
representatives or counsel to the Company, or any subsidiary or affiliate of
the Company, as requested.  The Company
agrees to reimburse the Executive, on an after-tax basis, for all expenses
actually incurred in connection with her provision of testimony or assistance.


 


22

















 


(d)                                 Non-Disparagement. Executive shall not, at any time during the Term and thereafter, make
statements or representations, or otherwise communicate, directly or
indirectly, in writing, orally, or otherwise, or take any action which may,
directly or indirectly, disparage the Company or any of its subsidiaries or
affiliates or their respective officers, directors, employees, advisors,
businesses or reputations. 
Notwithstanding the foregoing, nothing in this Agreement shall preclude
Executive from making truthful statements that are required by applicable law,
regulation or legal process.


 


(e)                                  Release
of Employment Claims. 
Executive agrees, as a condition to receipt of any termination payments
and benefits provided for in Sections 6 and 7 herein (other than Compensation
Accrued at Termination), that he will execute a general release agreement, in
substantially the form set forth in Attachment A to this Agreement, releasing
any and all claims arising out of Executive’s employment other than enforcement
of this Agreement and rights to indemnification under any agreement, law,
Company organizational document or policy, or otherwise.


 


(f)                                    Forfeiture
of Outstanding Options.  The
provisions of Sections 6 and 7 notwithstanding, if Executive willfully and
materially fails to substantially comply with any restrictive covenant under
this Section 10 or willfully and materially fails to substantially comply with
any material obligation under this Agreement, all options to purchase Common
Stock granted by the Company and then held by Executive or a transferee of
Executive shall be immediately forfeited and thereupon such options shall be
cancelled. Notwithstanding the foregoing, Executive shall not forfeit any
option unless and until there shall have been delivered to him, within six
months after the Board (i) had knowledge of conduct or an event allegedly
constituting grounds for such forfeiture and (ii) had reason to believe that
such conduct or event could be grounds for such forfeiture, a copy of a
resolution duly adopted by a majority affirmative vote of the membership of the
Board (excluding Executive) at a meeting of the Board called and held for such
purpose (after giving Executive reasonable notice specifying the nature of the
grounds for such forfeiture and not less than 30 days to correct the acts or
omissions complained of, if correctable, and affording Executive the
opportunity, together with his counsel, to be heard before the Board) finding
that, in the good faith opinion of the Board, Executive has engaged and
continues to engage in conduct set forth in this Section 10(f) which
constitutes grounds for forfeiture of Executive’s options; provided, however,
that if any option is exercised after delivery of such notice and the Board
subsequently makes the determination described in this sentence, Executive
shall be required to pay to the Company an amount equal to the difference
between the aggregate value of the shares acquired upon such exercise at the
date of the Board determination and the aggregate exercise price paid by
Executive. Any such forfeiture shall apply to such options notwithstanding any
term or provision of any option agreement. In addition, options granted to
Executive on or after January 1, 2000, and gains resulting from the exercise of
such options, shall be subject to forfeiture in accordance with the Company’s
standard policies relating to such forfeitures and clawbacks, as such policies
are in effect at the time of grant of such options.


 


(g)                                 Forfeiture of Certain Bonuses and Profits.  If
the Company is required to prepare an accounting restatement due to the
material noncompliance of the Company, as a result of misconduct, with any
financial reporting requirement under the securities laws, and if Executive,
knowingly or through gross negligence, caused or failed to prevent such
misconduct, Executive shall reimburse the Company for (1) any bonus or other
incentive based or equity-based compensation received by Executive from the
Company during the 12-month period following the first public issuance or
filing with the Securities and Exchange Commission (whichever first occurs) of
the financial document embodying such financial reporting requirement; and (2)
any profits realized from the sale of securities of the Company during that
12-month period.


 


(h)                                 Survival.
The provisions of this Section 10 shall survive the termination of the Term and
any termination or expiration of this Agreement.


 


11.                                 Governing
Law; Disputes; Arbitration.


 


(a)                                  Governing Law.  Anything in the USERP or the EXPP to the
contrary notwithstanding, this Agreement and the rights and obligations of the
Company and Executive under the USERP and the EXPP are governed by and are to
be construed, administered, and enforced in accordance with the laws of the
State of Connecticut, without regard to conflicts of law principles, except
insofar as federal laws and regulations and the Delaware General Corporation
Law may be applicable. If under the governing law, any portion of this
Agreement or the USERP or the EXPP is at any time deemed to be in conflict with
any applicable statute, rule, regulation, ordinance, or other principle of law,
such portion shall be deemed to be modified or altered to the extent necessary
to conform thereto or, if that is not possible, to be omitted therefrom . The
invalidity of any such portion shall not


 


23

















 


affect the force, effect,
and validity of the remaining portion thereof. If any court determines that any
provision of Section 10 of this Agreement is unenforceable because of the
duration or geographic scope of such provision, it is the parties’ intent that
such court shall have the power to modify the duration or geographic scope of
such provision, as the case may be, to the extent necessary to render the
provision enforceable and, in its modified form, such provision shall be
enforced.


 


(b)                                 Reimbursement of Expenses in Enforcing Rights. 
Upon submission of invoices, the Company shall promptly pay or reimburse
all reasonable costs and expenses (including fees and disbursements of counsel
and pension experts) incurred by Executive or Executive’s surviving spouse in
seeking to interpret this Agreement or enforce rights pursuant to this
Agreement or in any proceeding in connection therewith brought by Executive or
Executive’s surviving spouse, whether or not Executive or Executive’s surviving
spouse is ultimately successful in enforcing such rights or in such proceeding;
provided, however, that no reimbursement shall be owed with respect to expenses
relating to any unsuccessful assertion of rights or proceeding if and to the
extent that such assertion or proceeding 
was initiated or maintained in bad faith or was frivolous, as determined
by the arbitrators in accordance with Section 11(c) or a court having
jurisdiction over the matter, in which case any amounts previously paid by the
Company shall be promptly repaid.


 


(c)                                  Arbitration.  Anything in the USERP or the EXPP to the
contrary notwithstanding, any dispute or controversy arising under or in
connection with this Agreement or the USERP or the EXPP shall be settled
exclusively by arbitration in  Fairfield,
CT, by three arbitrators in accordance with the rules of the American
Arbitration Association in effect at the time of submission to arbitration.
Judgment may be entered on the arbitrators’ award in any court having
jurisdiction. For purposes of entering any judgment upon an award rendered by
the arbitrators, the Company and Executive hereby consent to the jurisdiction
of any or all of the following courts: (i) the United States District Court for
the District of Connecticut, (ii) any of the courts of the State of
Connecticut, or (iii) any other court having jurisdiction. The Company and
Executive further agree that any service of process or notice requirements in
any such proceeding shall be satisfied if the rules of such court relating
thereto have been substantially satisfied. The Company and Executive hereby
waive, to the fullest extent permitted by applicable law, any objection which
it may now or hereafter have to such jurisdiction and any defense of
inconvenient forum. The Company and Executive hereby agree that a judgment upon
an award rendered by the arbitrators may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Subject to Section
11(b) of this Agreement, the Company shall bear all costs and expenses arising
in connection with any arbitration proceeding pursuant to this Section 11.
Notwithstanding any provision in this Section 11, Executive shall be entitled
to seek specific performance of Executive’s right to be paid during the
pendency of any dispute or controversy arising under or in connection with this
Agreement.


 


(d)                                 Interest
on Unpaid Amounts.  Any
amount which has become payable pursuant to the terms of this Agreement or any
decision by arbitrators or judgment by a court of law pursuant to this Section
11 but which has not been timely paid shall bear interest at the prime rate in
effect at the time such amount first becomes payable, as quoted by the
Company’s principal bank.


 


12.                                 Miscellaneous.


 


(a)                                  Integration.  This Agreement cancels and supersedes any
and all prior employment agreements and understandings between the parties
hereto with respect to the employment of Executive by the Company, any parent
or predecessor company, and the Company’s subsidiaries during the Term, except
for contracts relating to compensation under executive compensation and
employee benefit plans of the Company and its subsidiaries.  The foregoing notwithstanding, in the event
of any conflict or ambiguity between this Agreement and the Employee Protection
Plan as applicable to Executive or the Change-in-Control Agreement executed by
Executive and the Company or the EXPP or USERP, the provisions of this
Agreement shall govern except that Executive shall remain entitled to any right
or benefit under the Employee Protection Plan or the Change-in-Control
Agreement or the EXPP or USERP for so long as such Plan or Agreement remains in
effect, if and to the extent that such right or benefit is more favorable to
Executive than a corresponding provision of this Agreement; but no payment or
benefit under the Employee Protection Plan or Change-in-Control Agreement or
the EXPP or USERP shall be made or extended which duplicates any payment or
benefit hereunder.  If and to the extent
that this Agreement may provide enhanced benefits to Executive under the EXPP
or USERP which benefits are not explicitly provided for under the EXPP or
USERP, the EXPP or USERP shall be deemed amended by this Agreement (but only
insofar as it pertains to Executive). 
This Agreement constitutes the entire agreement among the parties with
respect to the matters herein provided, and no modification or waiver of any
provision hereof shall be effective unless in writing and signed by


 


24

















 


the parties hereto.
Executive shall not be entitled to any payment or benefit under this Agreement
which duplicates a payment or benefit received or receivable by Executive under
any prior agreements and understandings or under any benefit or compensation
plan of the Company which are in effect.


 


(b)                                 Successors;
Transferability. The Company shall 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 Company to
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 no such
succession had taken place.


 


As used in this Agreement,
“Company” shall mean the Company 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 and, in the case of an
acquisition of the Company in which the corporate existence of the Company continues,
the ultimate parent company following such acquisition. Subject to the
foregoing, the Company may transfer and assign this Agreement and the Company’s
rights and obligations hereunder. Neither this Agreement nor the rights or
obligations hereunder of the parties hereto shall be transferable or assignable
by Executive, except in accordance with the laws of descent and distribution or
as specified in Section 12(c).


 


(c)                                  Beneficiaries.
Executive shall be entitled to designate (and change, to the extent permitted
under applicable law) a beneficiary or beneficiaries to receive any
compensation or benefits provided hereunder following Executive’s death.


 


(d)                                 Notices.
Whenever under this Agreement it becomes necessary to give notice, such notice
shall be in writing, signed by the party or parties giving or making the same,
and shall be served on the person or persons for whom it is intended or who
should be advised or notified, by Federal Express or other similar overnight
service or by certified or registered mail, return receipt requested, postage
prepaid and addressed to such party at the address set forth below or at such
other address as may be designated by such party by like notice:


 


If to the Company:


 


IMS HEALTH INCORPORATED

1499 Post Road

Fairfield, CT  06824

Attention: Chief Executive Officer


 


If to Executive:


 


Mr. Robert H. Steinfeld


Senior Vice President and
General Counsel

IMS Health Incorporated

1499 Post Road

Fairfield, CT  06824


 


If the parties by mutual
agreement supply each other with telecopier numbers for the purposes of
providing notice by facsimile, such notice shall also be proper notice under
this Agreement. In the case of Federal Express or other similar overnight
service, such notice or advice shall be effective when sent, and, in the cases
of certified or registered mail, shall be effective two days after deposit into
the mails by delivery to the U.S. Post Office.


 


(e)                                  Reformation.
The invalidity of any portion of this Agreement shall not be deemed to render
the remainder of this Agreement invalid.


 


(f)                                    Headings.
The headings of this Agreement are for convenience of reference only and do not
constitute a part hereof.


 


(g)                                 No General
Waivers. The failure of any party at any time to
require performance by any other party of any provision hereof or to resort to
any remedy provided herein or at law or in equity shall in no way affect the
right of such party to require such performance or to resort to such remedy at
any time thereafter, nor shall the waiver by any party of a breach of any of the
provisions hereof be deemed to be a waiver of any subsequent breach


 


25

















 


of such provisions. No such
waiver shall be effective unless in writing and signed by the party against
whom such waiver is sought to be enforced.


 


(h)                                 No
Obligation To Mitigate. Executive shall not be required to seek
other employment or otherwise to mitigate Executive’s damages upon any
termination of employment, and any compensation or benefits received from any
other employment of Executive shall not mitigate or reduce the obligations of
the Company or the rights of Executive hereunder, except that, to the extent
Executive receives from a subsequent employer health or other insurance
benefits that are similar to the benefits referred to in Section 5(b) hereof,
any such benefits to be provided by the Company to Executive following the Term
shall be correspondingly reduced.


 


(i)                                     Offsets;
Withholding. The amounts required to be paid by the
Company to Executive pursuant to this Agreement shall not be subject to offset
other than with respect to any amounts that are owed to the Company by
Executive due to his receipt of funds as a result of his fraudulent activity.
The foregoing and other provisions of this Agreement notwithstanding, all payments
to be made to Executive under this Agreement, including under Sections 6 and 7,
or otherwise by the Company, will be subject to withholding to satisfy required
withholding taxes and other required deductions.


 


(j)                                     Successors
and Assigns. This Agreement shall be binding upon and
shall inure to the benefit of Executive, his heirs, executors, administrators
and beneficiaries, and shall be binding upon and inure to the benefit of the
Company and its successors and assigns.


 


(k)                                  Counterparts.
This Agreement may be executed in counterparts, each of which shall be deemed
to be an original but all of which together will constitute one and the same
instrument.


 


13.                                 Indemnification.


 


All rights to
indemnification by the Company now existing in favor of the Executive as
provided in the Company’s Certificate of Incorporation or By-laws or pursuant
to other agreements in effect on or immediately prior to the Effective Date
shall continue in full force and effect from the Effective Date (including all
periods after the expiration of the Term), and the Company shall also advance
expenses for which indemnification may be ultimately claimed as such expenses
are incurred to the fullest extent permitted under applicable law, subject to
any requirement that the Executive provide an undertaking to repay such
advances if it is ultimately determined that the Executive is not entitled to
indemnification; provided, however, that any determination required to be made
with respect to whether the Executive’s conduct complies with the standards
required to be met as a condition of indemnification or advancement of expenses
under applicable law and the Company’s Certificate of Incorporation, By-laws,
or other agreement shall be made by independent counsel mutually acceptable to
the Executive and the Company (except to the extent otherwise required by law).
After the date hereof, the Company shall not amend its Certificate of
Incorporation or By-laws or any agreement in any manner which adversely affects
the rights of the Executive to indemnification thereunder. Any provision
contained herein notwithstanding, this Agreement shall not limit or reduce any
rights of the Executive to indemnification pursuant to applicable law.  In addition, the Company will maintain
directors’ and officers’ liability insurance in effect and covering acts and
omissions of Executive during the Term and for a period of six years thereafter
on terms substantially no less favorable than those in effect on the Effective
Date.


 


IN WITNESS WHEREOF,
Executive has hereunto set his hand and the Company has caused this instrument
to be duly executed as of the date of this Agreement set forth in Section 1
hereof.


 


	
   

  	
  IMS HEALTH INCORPORATED

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ David M. Thomas

  
	
   

  	
   

  	
  Name: David M. Thomas

  
	
   

  	
   

  	
  Title: Chairman of the
  Board and Chief Executive Officer

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  /s/ Robert H. Steinfeld

  
	
   

  	
  Robert H. Steinfeld

  



 


26