Exhibit 10(c)


 


EXHIBIT 10(c)  — 
BEMIS COMPANY, INC. FORM OF MANAGEMENT CONTRACT


 


MANAGEMENT AGREEMENT


 


THIS MANAGEMENT AGREEMENT (the “Agreement”) is entered into effective
October 26, 2005, by and between Bemis Company, Inc., a Missouri corporation
(the “Company”) and
                                         
(the “Executive”).


 


WHEREAS,
the Executive is a key member of the management of the Company and has devoted
substantial skill and effort to the affairs of the Company; and


 


WHEREAS,
the Company and its shareholders wish to continue to obtain the benefits of the
Executive’s services and attention to the affairs of the Company; and


 


WHEREAS,
the Company recognizes that, as a publicly-held corporation, it is subject to
the ongoing risk of a change of control, and that the adverse personal
consequences of a change of control may distract Executive or encourage
Executive’s premature termination of employment to the detriment of the Company
and its shareholders; and


 


WHEREAS, it is desirable and in the best interests of
the Company and its shareholders to take steps that will allow the Executive to
make judgments and advise the Company with respect to proposed changes of
control without regard to the possible adverse personal consequences of such
events, and to provide an inducement for the Executive to remain in the service
of the Company prior to any proposed or anticipated change of control, and to
remain in the service of the Company after any change of control to the extent
necessary to facilitate an orderly transition; and


 


WHEREAS,
the Executive desires to obtain appropriate protection in the event of an
actual or anticipated change of control; and


 


WHEREAS,
the Company recognizes that it is important to Executive to receive prompt and
certain payment of any amounts which become due under this Agreement;


 


NOW THEREFORE, in consideration of the foregoing and
the mutual covenants and agreements contained herein, the Company and the
Executive hereby agree as follows:


 


1.         Defined Terms. 
Capitalized terms not otherwise defined herein shall have the meanings
ascribed to them in Appendix A.


 


2.         Duration.  This
Agreement establishes certain rights and obligations in the event Executive has
a Qualifying Event (as defined in Section 5 below).  Unless earlier terminated or modified, which
in either case can be done only by mutual written consent of the parties, this
Agreement shall continue in effect until either (i) the benefits due and
payable under this Agreement have been paid in full or (ii) the Executive’s
employment with Company terminates under circumstances that do not entitle
Executive to any benefits under this Agreement.


 


3.         Prior Agreements.  Any
prior agreement entered into by and between Executive and the Company that was
titled “Management Agreement” and that, among other things, provided
compensation upon the occurrence of a “Change in Control Event,” is hereby
terminated.  Except as otherwise provided
herein, this Agreement supercedes any such “Management Agreement” and the
portion or portions of any and all other agreements entered into prior to the
effective date of this Agreement relating to severance pay and post-employment
welfare benefits due to Executive in the event Executive has a Qualifying
Event.  Nothing in this Agreement shall
adversely affect any rights Executive may have to equity-based compensation
(including but not limited to stock options, equity units, and restricted
stock), long-term incentive compensation, supplemental retirement benefits,
deferred compensation that is not severance pay, and benefits under any
employee benefit plan (within the meaning of Section 3(3) of the Employee
Retirement Income Security Act of 1974, as amended), all of which shall be
administered after a Qualifying Event in accordance with the terms of the applicable
plan documents and agreements and without regard to this Agreement.


 


4.         No Employment Contract.  This
Agreement shall not be construed as creating an express or implied contract of
employment.  Except as otherwise agreed
in writing between the Executive and the Company, the Executive’s employment
shall be “at will” and Executive shall not have any right to be retained in the
employ of the Company and its affiliates.


 


5.         Qualifying Event.  The
Executive shall be deemed to have had a “Qualifying Event” if prior to
attaining age 65:


 


(a)          the Executive has an Involuntary Termination
or Constructive Involuntary Termination on, or within 36 months after, the date
of a Change of Control Event;


 


(b)         the Executive has an Involuntary Termination
or Constructive Involuntary Termination within three months prior to the date
of a Change of Control Event; or


 


(c)          the Executive has an Involuntary Termination
or Constructive Involuntary Termination (i) less than twelve months prior to
the date of a Change of Control Event or (ii) while a Change of Control Event
is under serious consideration (whether or not it actually occurs), unless (in
either case) the Company can establish that the Executive’s Involuntary
Termination or Constructive Involuntary 


 


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Termination was for reasons
unrelated to such Change of Control Event.


 


Whether a Qualifying Event has occurred shall be determined separately
with respect to each Change of Control Event and each event constituting a Constructive
Involuntary Termination or Involuntary Termination.  If the event constituting a Constructive
Involuntary Termination is a failure by the Company to obtain assumption of
this Agreement by any successor as contemplated by Section 12 of this Agreement,
the date on which the succession became effective shall be deemed the date of
the Qualifying Event.  Amounts shall not
be paid under Sections 6 and 7 of this Agreement for more than one Qualifying
Event.


 


For
purposes of subsection (c) above, a Change of Control Event shall be deemed to
be “under serious consideration” at any time after negotiations with respect to
the possible Change of Control Event have commenced (including, but not limited
to, negotiations prior to the execution of a non-binding letter of intent) and
at any time after the Company receives direct or indirect notice of a Person’s
intent to cause an event that would, if it occurred, result in a Change of
Control Event.  Serious consideration as
described in the preceding sentence shall be deemed to end on the earliest of
the date on which such negotiations are abandoned, the Company receives direct
or indirect notice that such Person has abandoned efforts to cause the event
that would be a Change of Control Event, or the relevant Change of Control
Event actually occurs.


 


6.         Compensation and Benefits
Through Date of Termination.  If the Executive has a Qualifying Event,
Company shall immediately pay Executive (a) the full amount of Executive’s
salary through the date of Executive’s Qualifying Event to the extent not
previously paid, and (b) the product of (i) an amount equal to Executive’s
target annual bonus for the fiscal year of the Company in which the Qualifying
Event occurs and (ii) a fraction, the numerator of which is the number of days
in the current fiscal year through and including the date of the Executive’s
Qualifying Event and the denominator of which is 365.  In addition, in the event of Executive’s
Qualifying Event, Company shall also, to the extent not previously paid or provided,
pay or provide Executive with all other amounts and benefits that Executive has
accrued or is eligible to receive through the date of such Qualifying Event
under any plan, program, policy, practice or arrangement of the Company and/or
its affiliates (including but not limited to welfare benefits and perquisites).


 


7.         Change of Control Severance
Payments.  If the Executive has a Qualifying Event, the
Executive also shall be entitled:


 


(a)          to immediately receive from the Company a cash
payment in an amount equal to three times the sum of (i) the Executive’s salary
for the calendar year last preceding the date of Executive’s Qualifying Event
or, if higher, the Executive’s annual salary rate in effect immediately prior
to such Qualifying Event, (ii) the Executive’s target annual bonus for the
fiscal year of the Company in which the Qualifying Event occurs or, if higher,
the Executive’s highest annual bonus for the five-year period ending with the
full calendar year (or if such bonuses are determined on the basis of a fiscal
year, the full fiscal year) last preceding the date of Executive’s Qualifying
Event, and (iii) 30 percent of the annual salary used in (i) above, which
amount is intended to serve as an estimate of the annual value of the fringe
benefits and other perquisites to which Executive was entitled immediately
prior to the Qualifying Event; and


 


(b)         to immediately receive from the Company a cash
payment in an amount equal to the product of (i) the number of Equity Units
granted to the Executive in his most recent regular annual Equity Unit grant;
and (ii) the Fair Market Value of a share of the Company’s stock immediately
prior to the effective date of the Change of Control Event, or if the Change of
Control Event has not occurred within ten calendar days after payment pursuant
to this Section 7 is due, the Fair Market Value of a share on the date of the
Executive’s Qualifying Event; and


 


(c)          for thirty-six months after the Qualifying Event, to participate in any
health, disability and life insurance plan or program in which Executive was
entitled to participate immediately prior to the Qualifying Event as if he were
an employee of the Company during such thirty-six month period; provided,
however, that in the event that Executive cannot participate in any such
health, disability or life insurance plan or program, the Company, at its sole
cost and expense, shall arrange to provide the Executive with benefits no less
favorable to Executive than those which Executive would have been entitled to
receive if Executive had continued to participate in such plan or program.


 


The compensation and benefits described above in this Section 7 shall be
subject to the following:


 


(1)          For purposes of subsection (a) above, the
Executive’s salary, annual salary rate, target annual bonus and highest annual
bonus shall be the gross amounts of such compensation determined without regard
to any deductions, deferrals or withholding.


 


(2)          If Executive’s Qualifying Event occurs after
the month in which the Executive attains age 62, the amount in subsection (a)
above shall be determined by substituting for “three” a fraction, the numerator
of which is the number of whole and partial calendar months in the period
beginning with the month in which the Executive’s Qualifying Event occurs and
ending with the month in which the Executive attains age 65, and the
denominator of which is 12.


 


(3)          If Executive’s Qualifying Event occurs after
the month in which the Executive attains age 62, the number of months referred
to in subsection (c) above shall be determined by substituting for “thirty-six”
the number of whole and partial calendar months in the period beginning with
the month in which the Executive’s Qualifying Event occurs and ending with the
month in which the Executive attains age 65.


 


(4)          The sum of the amounts payable under
subsections (a) and (b) above shall be reduced by any severance pay which the
Executive receives from the Company under any other policy or agreement of the
Company on account of Executive’s Qualifying Event.


 


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(5)          For purposes of subsection (b) above, the
Executive’s most recent regular annual Equity Unit grant shall be the number of
Equity Units granted to the Executive in the last regular grant made prior to
the Executive’s Qualifying Event.  For
this purpose, any grant of Equity Units which the Board of Directors of the
Company or the Board’s Compensation Committee designates at the time of grant
as a special grant is not a regular annual Equity Unit grant and shall be
disregarded.


 


(6)          For purposes of subsection (c) above, a health
plan or program shall include any separate dental, vision, prescription drug,
or other health-related benefit.


 


(7)          If immediate payment of any amounts payable
pursuant to subsections (a) and (b) above would violate Section 409A of the
Code, payment of those amounts shall be delayed until the earliest time at
which payment of those amounts can be made without violating Section 409A.


 


8.         Excise Tax Adjustment.  If it
shall be determined that a Payment would make the Executive liable for any
Excise Tax, the Executive shall be entitled to receive a Gross-Up Payment.  Notwithstanding the preceding sentence, if it
shall be determined that the total “parachute payments” (within the meaning of
Section 280G of the Code) made to Executive in connection with Executive’s
Qualifying Event, including those made pursuant to this Agreement, exceed by
10% or less the maximum amount of the total parachute payments that could be
paid to the Executive without incurring any Excise Tax, then no Gross-Up
Payment shall be made to the Executive and the Payments in the aggregate shall
be reduced by the amount of such excess. 
Executive shall have at least 10 calendar days after receiving notice
from the Accounting Firm that such a reduction is necessary to specify what
components of the Payment shall not be paid in order to achieve the required
reduction.  If Executive fails to give
timely instructions regarding such reduction, reductions shall be taken first from
Executive’s cash compensation under this Agreement.


 


9.         Late Payment.  Any
amount payable under this Agreement that is not paid within ten calendar days
after it becomes due shall bear interest from the date it became due through
the date of payment at the “prime rate” (the base annual lending rate used by a
plurality of the nation’s largest banks) as reported in the Wall St. Journal
for the date on which the payment was due (or if that is not a date on which
the prime rate is so reported, the then current prime rate as most recently
reported) plus 5%, compounded monthly.


 


10.   Legal Fees.  The
Company shall pay all legal fees and expenses (including but not limited to
attorneys’ fees and court costs) reasonably incurred by the Executive in
connection with efforts by or on behalf of the Executive to obtain or enforce
any right or benefit provided by or claimed under this Agreement, regardless of
the ultimate outcome or resolution of such claims.  Such legal fees and expenses shall be paid
within ten calendar days after Executive’s written request for payment.  Payments made after such tenth day shall
incur interest at the rate set forth in Section 9 above.  Company’s payment of Executive’s legal fees
and expenses shall not give Company any right to select or to approve counsel
retained by Executive.  No dispute
regarding the reasonableness of such fees and expenses shall authorize or
excuse their late payment.


 


11.   Mitigation Not Required.  Executive shall not be required
to mitigate the amount of any payment or other benefit provided for in this
Agreement by seeking other employment or otherwise, nor shall the amount of any
payment or other benefit provided for in this Agreement be reduced by any
compensation earned by the Executive as the result of employment by another
employer after termination, or otherwise.


 


12.   Successors and Assigns.  This Agreement shall be binding
upon and inure to the benefit of the successors, legal representatives and
assigns of the parties hereto; provided, however, that the Executive shall not
have any right to assign, pledge or otherwise dispose of or transfer any
interest in this Agreement or any payments hereunder, whether directly or
indirectly or in whole or in part, without the written consent of the Company.  The Company will require any successor
(whether direct or indirect, by purchase of a majority of the outstanding
voting stock of the Company or all or substantially all of the assets of the
Company, or by merger, consolidation or otherwise), by agreement in form and substance
satisfactory to the Executive, to assume expressly 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.  Failure of the Company to obtain such
agreement prior to the effectiveness of any such succession shall be a breach
of this Agreement, shall constitute a Constructive Involuntary Termination, and
shall be treated as a Qualifying Event entitling the Executive to the
compensation and benefits described in Sections 6 and 7 of this Agreement
unless such failure is remedied within 10 calendar days after Company receives
written notice thereof.  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 is required to
execute and deliver the Agreement provided for in this Section 12 or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law.


 


13.   Governing Law.  This Agreement shall be construed in
accordance with the laws of the State of Minnesota, applied without giving
effect to any choice of law provisions thereof.


 


14.   Notices.  All
notices, requests and demands given to or made pursuant hereto shall be in writing
and shall be delivered or mailed to any such party at its address which:


 


(a)          In the case of the Company shall be:


Bemis
Company, Inc.


2300
Campbell Mithun Tower


222
South 9th Street


Minneapolis,
Minnesota  55402


Attention:  General Counsel


 


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(b)         In the case of the Executive shall be:


[
ADDRESS of Executive ]


 


 


Either party may, by notice hereunder, designate a changed address.  Any notice, if mailed properly addressed,
postage prepaid, registered or certified mail, shall be deemed to have been
given on the registered date or that date stamped on the certified mail
receipt.


 


15.   Severability.  In
the event that any portion of this Agreement is held to be invalid or
unenforceable for any reason, it is hereby agreed that such invalidity or
unenforceability shall not affect the other portions of this Agreement and that
the remaining covenants, terms and conditions or portions hereof shall remain
in full force and effect, and any court of competent jurisdiction may so modify
the objectionable provision as to make it valid, reasonable and
enforceable.  In the event that any
benefits to the Executive provided in this Agreement are held to be unavailable
to the Executive as a matter of law, the Executive shall be entitled after a
Qualifying Event to the remaining benefits available under this Agreement, or
if better, severance benefits at least as favorable to Executive (when
aggregated with the benefits under this Agreement that are actually received by
the Executive) as the most advantageous severance benefits made available by
the Company to employees of comparable position and seniority to the Executive
during the five-year period prior to Executive’s Qualifying Event or the Change
of Control Event, whichever happens first.


 


16.   Effect of Code §409A.  The
parties agree to cooperate to amend this Agreement on or before December 31,
2006 to the extent needed to comply with Code §409A.  Prior to such amendment, this Agreement shall
be construed in accordance with any applicable requirements of Code §409A.


 


IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.


 


 


	
  EXECUTIVE

  	
   

  	
  BEMIS COMPANY, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [ Name of Executive ]

  	
   

  	
  By:

  	
  Jeffrey H. Curler

  	
   

  	
   

  
	
   

  	
   

  	
  Its:

  	
  President, Chief Executive Officer and

  	
   

  
	
   

  	
   

  	
   

  	
  Chairman of the Board

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  
							



 


APPENDIX A


TO MANAGEMENT AGREEMENT


 


DEFINITIONS


 


As
used in this Agreement the capitalized terms not otherwise defined shall have
the meanings ascribed to them below.


 


Accounting Firm


 


The
term “Accounting Firm” shall mean a nationally recognized certified public
accounting firm designated by the Executive.


 


Cause


 


“Cause” shall mean, and be limited to, (i) willful and gross neglect of
duties by the Executive that has not been substantially corrected within 30
days after Executive’s receipt from Company of written notice describing the
neglect and the steps necessary to substantially correct it, or (ii) an act or
acts committed by the Executive constituting a felony and substantially
detrimental to the Company or its reputation.


 


Change of Control Event


 


A “Change of Control Event” shall be deemed to have occurred if any of
the following occur:


 


(1)   Any “Person”
(as defined in Section 13(d) of the Securities Exchange Act of 1934, as
amended, or any successor statute thereto (the Exchange Act) acquires or
becomes a beneficial owner (as defined in Rule 13d-3 or any successor rule
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 entitled to vote generally in the election of directors
(“Voting Securities”) or 20% or more of the outstanding shares of common stock
of the Company (“Common Stock”), provided, however, that the following shall
not constitute a “Change of Control Event.”


 


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(a)          any acquisition or beneficial ownership by the
Company or a subsidiary of the Company;


 


(b)   any
acquisition or beneficial ownership by any employee benefit plan (or related
trust) sponsored or maintained by the Company or one or more of its
subsidiaries;


 


(c)   any
transaction with respect to which, immediately following such acquisition, more
than 80% respectively, of (i) the combined voting power of the Company’s then
outstanding Securities and (ii) the Common Stock is then beneficially owned,
directly or indirectly, by all or substantially all of the persons who
beneficially owned Voting Securities and Common Stock respectively, of the
Company immediately prior to such transaction in substantially the same
proportions as their ownership prior to such acquisition;


 


(2)   Continuing
Directors shall not constitute a majority of the members of the Board of
Directors of the Company.  Continuing
Directors shall mean:  (a) individuals
who, on the date hereof, are directors of the Company, (b) individuals elected
as directors of the Company subsequent to the date hereof for whose election
proxies shall have been solicited by the Board of Directors of the Company, or
(c) any individual elected or appointed by the Board of Directors of the
Company to fill vacancies on the Board of Directors of the Company caused by
death or resignation (but not by removal) or to fill newly-created directorships,
provided that a Continuing Director shall not include an individual whose
initial assumption of office occurs as a result of an actual or threatened
election contest with respect to the threatened election or removal of
directors (or other actual or threatened solicitation of proxies or consents)
by or on behalf of any person other than the Board of Directors of the Company;


 


(3)   Consummation of a reorganization, merger or consolidation of the
Company (other than a merger or consolidation with a subsidiary of the
Company), unless immediately following such reorganization, merger or
consolidation, all or substantially all of the persons who were the beneficial
owners, respectively, of Voting Securities and Common Stock immediately prior
to such reorganization, merger or consolidation beneficially own, directly or
indirectly, more than 80% respectively of (i) the combined voting power of the
then outstanding Voting Securities entitled to vote generally in the election
of directors, and (ii) the then outstanding shares of Common Stock of the
corporation resulting from such reorganization, merger or consolidation in
substantially the same proportions as their ownership of the Voting Securities
and Common Stock, as the case may be, immediately prior to such reorganization,
merger or consolidation;


 


(4)   Approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other disposition
of all or substantially all of the assets of the Company (in one or a series of
transactions), other than to a corporation with respect to which, immediately
following such a sale or other disposition, more than 80%, respectively, of (i)
the combined voting power of the then outstanding Voting Securities of such
corporation entitled to vote generally in the election of directors, and (ii)
the then outstanding shares of Common Stock of such corporation is then
beneficially owned, directly or indirectly, by all or substantially all of the
persons who were the beneficial owners respectively of the Voting Securities
and Common Stock immediately prior to such sale or other disposition in
substantially the same proportions as their ownership of the Voting Securities
and Common Stock, as the case may be, immediately prior to such sale or other
disposition;


 


(5)   The Company enters into a letter of intent, an agreement in
principle or a definitive agreement relating to a “Change of Control Event”
described in Subparagraphs (1), (2), (3) or (4) hereof that ultimately results
in such a “Change of Control Event”, or a tender or exchange offer or proxy
contest is commenced which ultimately results in such a “Change of Control of
Event”.


 


Notwithstanding anything stated above, a “Change
of Control Event” shall not be deemed to occur with respect to the Executive if
the acquisition or beneficial ownership of the 20% or greater interest referred
to in Subparagraph (1) is by the Executive or by a group, acting in concert,
that includes the Executive.


 


Code


 


“Code” shall mean the Internal Revenue Code of 1986, as amended.


 


Constructive Involuntary Termination


 


Any of the six occurrences below shall constitute a “Constructive
Involuntary Termination”:


 


(1)   Reduction of the Executive’s title, duties, responsibilities or
authority, other than for “Cause” or on account of “Disability”;


 


(2)          Reduction
of the Executive’s annual base salary;


 


(3)   Reduction
of the aggregate benefits under the Company’s pension, profit sharing,
retirement, life insurance, medical, health and accident, disability, bonus and
incentive plans and other employee benefit plans and arrangements or reduction
of the number of paid vacation days to which the Executive is entitled;


 


(4)   Company fails to obtain assumption of this Agreement by any
successor as contemplated by Section 12 of the Agreement;


 


(5)     Company requires Executive to perform his primary duties at a
location that is more than 25 miles further from Executive’s primary residence
than the location at which the Executive performs his primary duties on the
effective date of this Agreement (or, if Executive changes his primary
residence, that is more than 25 miles further from Executive’s primary
residence after such change than the location at which the


 


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Executive
performed his primary duties at the time of such change); or


 


(6)     A termination of employment with the Company by the Executive
after any of the occurrences in Subparagraphs (1) through (5) above.


 


The foregoing definition of Constructive Involuntary Termination shall
be subject to the following:


 


(i)    Notwithstanding the above, “Constructive Involuntary Termination”
shall not include an inadvertent failure to obtain assumption of this Agreement
that is remedied by the Company within 10 calendar days after its receipt of
notice thereof.


 


(ii)   If the Executive’s duties, responsibilities or authority prior to
a Change in Control Event relate to the Company as a whole, rather than to a
specific business or operating unit (e.g., as in the case of the Company’s
Chief Executive Officer, Chief Operating Officer, Chief Financial Officer,
General Counsel or a Vice President with authority for an aspect of the Company’s
business that is not limited to any particular business or operational unit,
such as the Vice President of Human Resources), then a reduction described in
subparagraph (1) above shall be deemed to occur if such duties,
responsibilities or authority do not extend after the Change in Control Event
to the entire successor organization.  If
the Executive’s duties, responsibilities or authority prior to a Change in
Control Event relate exclusively to a specific business or operating unit of
the Company, then a reduction described in subparagraph (1) shall be deemed to
occur if such duties, responsibilities or authority after the Change in Control
Event do not extend after the Change in Control Event to all or substantially
all of the same business or operating unit.


 


Disability


 


“Disability” shall be a condition entitling the Executive to benefits
under Bemis’ Long Term Disability Plan.


 


Equity Unit


 


“Equity Unit” shall mean a unit awarded under a long-term incentive
compensation plan maintained by the Company, such as the Bemis Company, Inc.
2001 Stock Incentive Plan, that is, or entitles the award recipient to receive,
a share of common stock of the Company (regardless of whether such unit is
subject to a risk of forfeiture).


 


Excise Tax


 


“Excise Tax” shall mean the excise tax imposed on Executive by Section
4999 of the Code or any successor provision thereto, and any interest and
penalties incurred by the Executive with respect to such excise tax.


 


Fair Market Value


 


“Fair Market Value” of a share of the Company’s common stock as of a
particular day shall mean the closing price of a share of the Company’s common
stock on the New York Stock Exchange on such day, or if no sale has been made
on such exchange on such day, on the last preceding day on which any such sale
was made.


 


Gross-Up Payment


 


(1)   “Gross-Up Payment” shall mean an amount sufficient to enable the
Executive to pay all of the following amounts: (i) any income or employment
taxes payable by the Executive on the Gross-Up Payment, (ii) any excise taxes
imposed by Section 4999 of the Code on any Payments to the Executive (including
any imposed on the Gross-Up Payment), (iii) any interest and penalties on the
taxes in (i) and (ii).


 


(2)   Subject to the provisions of
Subparagraph (3) below, all determinations required to be made under Section 8
of the Agreement, including whether and when a Gross-Up Payment is required and
the amount of such Gross-Up Payment, the assumptions to be utilized in arriving
at such determination, and the determination regarding whether Payments need to
be reduced, shall be made by the Accounting Firm, which shall provide detailed
supporting calculations both to the Company and the Executive within 15
business days after the receipt of notice from the Executive that there has
been a Payment, or such earlier time as is requested by the Company.  All fees and expenses of the Accounting Firm
shall be borne solely by the Company. 
Any Gross-Up Payment, as determined pursuant to this Agreement, shall be
paid by the Company to the Executive within five days after the receipt of the
Accounting firm’s determination.  If the
Accounting Firm determines that no Excise Tax is payable by the Executive, it
shall furnish the Executive with a written opinion that failure to report the
Excise Tax on the Executive’s applicable federal income tax return would not
result in the imposition of a negligence or similar penalty.  Any determination by the Accounting Firm
shall be binding upon the Company and the Executive.  As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made (“Underpayment”),
consistent with the calculations required to be made hereunder.  In the event that the Company exhausts its
remedies pursuant to this Agreement and the Executive thereafter is required to
make a payment of any Excise Tax, the Accounting Firm shall determine the
amount of the Underpayment that has occurred and any such Underpayment (plus
any additional interest and penalties attributable to the Underpayment) shall
be promptly paid by the Company to or for the benefit of the Executive.


 


(3)   The Executive shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the


 


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payment by the Company of a Gross-Up Payment.  Such notification shall be given as soon as
practicable but not later than ten business days after the Executive is
informed in writing of such claim (provided that any delay in so informing the
Company within such ten business day period shall not affect the obligations of
the Company under this Agreement except to the extent that such delay
materially and adversely affects the Company) and shall apprise the Company of
the nature of such claim and the date on which such claim is requested to be
paid.  The Executive shall not pay such
claim prior to the expiration of the 30-day period following the date on which
it gives such notice to the Company (or such shorter period ending on the date
that any payment of taxes with respect to such claim is due).  If the Company notifies the Executive in
writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall:


 


(a)          give the Company any information reasonably requested by the Company
relating to such claim,


 


(b)         take such action in connection with contesting
such claim as the Company shall reasonably request in writing from time to
time, including, without limitation, accepting legal representation with
respect to such claim by an attorney reasonably selected by the Company,


 


(c)          cooperate with the Company in good faith in
order to effectively contest such claim, and


 


(d)         permit the Company to participate in any
proceedings relating to such claim;


 


provided, however, that the Company shall bear and
pay directly all costs and expenses (including attorneys fees, additional
interest and penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax or other tax (including interest and penalties with respect thereto)
imposed as a result of such representation and payment of costs and
expenses.  Without limitation on the foregoing
provisions of this Paragraph, the Company shall control all proceedings taken
in connection with such contest and, at its sole option, may pursue or forgo
any and all administrative appeals, proceedings, hearings and conferences with
the taxing authority in respect of such claim and may, at its sole option,
either direct the Executive to pay the tax claimed and sue for a refund or
contest the claim in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any administrative tribunal,
in a court of initial jurisdiction and in one or more appellate courts, as the
Company shall determine; provided, however, that if the Company directs the
Executive to pay such claim and sue for a refund, the Company shall advance the
amount of such payment to the Executive, on an interest-free basis, and shall
indemnify and hold the Executive harmless, on an after-tax basis, from any
Excise Tax or other tax (including interest or penalties with respect thereto)
imposed with respect to such advance or with respect to any imputed income with
respect to such advance; and further provided that any extension of the statute
of limitations relating to payment of taxes for the taxable year of the
Executive with respect to which such contested amount is claimed to be due is limited
solely to such contested amount. 
Furthermore, the Company’s control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Executive shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.


 


(4)   If, after
the receipt by the Executive of an amount advanced by the Company pursuant to
Subparagraph (3) above, the Executive becomes entitled to receive any refund
with respect to such claim, the Executive shall (subject to the Company’s
complying with the requirements of this Subparagraph (4)) promptly pay to the
Company the amount of such refund (together with any interest paid or credited
thereon after taxes applicable thereto). 
If, after the receipt by the Executive of an amount advanced by the
Company pursuant to Subparagraph (3) above, a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and
the Company does not notify the Executive in writing of its intent to contest
such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.


 


Involuntary Termination


 


“Involuntary Termination” shall mean a termination by
the Company of the Executive’s employment that is not a termination for “Cause”
and that is not on account of the death or “Disability” of the Executive.


 


Payment(s)


 


A “Payment” is any payment or distribution by the Company to or for the
benefit of the Executive whether  paid or
payable or distributed or distributable pursuant to the terms of this
Agreement, any stock option, equity unit, restricted stock agreement or
otherwise, but determined without regard to any Gross-Up Payments.


 


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