TIER I EXECUTIVE SEVERANCE PLAN



 


Exhibit 10.8








MONEYGRAM INTERNATIONAL,
INC.

EXECUTIVE SEVERANCE PLAN (TIER I)

AS OF
                , 2004








     1. PURPOSE: To provide management continuity by inducing selected
Executives to remain in the employ of MoneyGram International, Inc. (the “Corporation”) or one of
its subsidiaries pending a possible Change of Control of the Corporation.



     2. OBJECTIVES: To ensure in the event of a possible Change of Control of
the Corporation, in addition to the Executive’s regular duties, that he may be
available to be called upon to assist in the objective assessment of such
situations, to advise management and the Board of Directors (the “Board”) of
the Corporation as to whether such proposals would be in the best interests of
the Corporation, its, subsidiaries and its shareholders and to take such other
actions as management or the Board might determine reasonably appropriate and
in the best interests of the Corporation and its shareholders.



     3. PARTICIPATION: Participation in this Executive Severance Plan (Tier I)
(this “Plan”) will be limited to selected Executives (each referred to herein
as “Executive”) whose importance to the Corporation during such periods is
deemed to warrant good and valuable special consideration by the Chief
Executive Officer of the Corporation. Each such Executive’s participation
shall be evidenced by a certificate (“Certificate”) issued by the Corporation,
each of which is incorporated herein by reference as if set forth in its
entirety. In the event an Executive shall become ineligible hereunder, his
Certificate shall be surrendered promptly to the Corporation.



     4. DEFINITION OF CHANGE OF CONTROL: For purposes of this Plan, a “Change
of Control” shall mean any of the following events:



          (a) An acquisition by an individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Exchange Act) (a “Person”) of beneficial
ownership (within the meaning



 









 





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of Rule 13d-3 promulgated under the Exchange Act) of 20% or more of either:
(1) the then outstanding shares of Common Stock of the Corporation (the
“Outstanding Corporation Common Stock”) or (2) the combined voting power of
the then Outstanding Voting Securities of the Corporation entitled to vote
generally in the election of Directors (the “Outstanding Corporation Voting
Securities”); excluding, however the following: (A) any acquisition directly
from the Corporation or any entity controlled by the Corporation other than an
acquisition by virtue of the exercise of a conversion privilege unless the
security being so converted was itself acquired directly from the Corporation
or any entity controlled by the Corporation, (B) any acquisition by the
Corporation, or any entity controlled by the Corporation, (C) any acquisition
by any employee benefit plan (or related trust) sponsored or maintained by the
Corporation or any entity controlled by the Corporation or (D) any acquisition
pursuant to a transaction which complies with clauses (1), (2) and (3) of
Section 4(c); or




          (b) A change in the composition of the Board such that the individuals
who, as of the effective date of the Plan, constitute the Board (such Board
shall be hereinafter referred to as the “Incumbent Board”) cease for any reason
to constitute at least a majority of the Board; provided, however, for purposes
of this Section 4(b) that any individual, who becomes a member of the Board
subsequent to the effective date of the Plan, whose election, or nomination for
election by the Corporation’s shareholders, was approved by a vote of at least
a majority of those individuals who are members of the Board and who were also
members of the Incumbent Board, (or deemed to be such pursuant to this proviso)
shall be considered as though such individual were a member of the Incumbent
Board; but provided further, that any such individual whose initial assumption
of office occurs as a result of either an actual or threatened election contest
(as such terms are used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act) or other actual or threatened



 









 





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solicitation of proxies or consents by or on behalf of a Person other than the
Board shall not be so considered as a member of the Incumbent Board, or




          (c) Consummation of a reorganization, merger or consolidation or sale or
other disposition of all or substantially all of the assets of the Corporation
(a “Corporate Transaction”) excluding, however, such a Corporate Transaction
pursuant to which (1) all or substantially all of the individuals and entities
who are the beneficial owners, respectively, of the Outstanding Corporation
Common Stock and Outstanding Corporation Voting Securities immediately prior to
such Corporate Transaction (the “Prior Shareholders”) beneficially own,
directly or indirectly, more than 60% of, respectively, the outstanding shares
of Common Stock and the combined voting power of the then Outstanding Voting
Securities entitled to vote generally in the election of Directors, as the case
may be, of the Corporation or other entity resulting from such Corporate
Transaction (including, without limitation, a corporation or other entity which
as a result of such transaction owns the Corporation or all or substantially
all of the Corporation’s assets either directly or through one or more
subsidiaries) in substantially the same proportions as their ownership,
immediately prior to such Corporate Transaction, of the Outstanding Corporation
Common Stock and Outstanding Corporation Voting Securities, as the case may be,
(2) no Person (other than the Corporation or any entity controlled by the
Corporation, any employee benefit plan (or related trust) of the Corporation or
any entity controlled by the Corporation or such corporation or other entity
resulting from such Corporate Transaction) will beneficially own, directly or
indirectly, 20% or more of, respectively, the outstanding shares of Common
Stock of the Corporation or other entity resulting from such Corporate
Transaction or the combined voting power of the Outstanding Voting Securities
of such Corporation or other entity entitled to vote generally in the election
of Directors except to the extent that such ownership existed prior to the
Corporate Transaction and (3) individuals who were members of the Incumbent
Board will constitute at least a majority of the



 









 





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members of the Board of Directors of the Corporation resulting from such
Corporate Transaction; and further excluding any disposition of all or
substantially all of the assets of the Corporation pursuant to a spin-off,
split-up or similar transaction (a “Spin-off”) if, immediately following the
Spin-off, the Prior Shareholders beneficially own, directly or indirectly, more
than 80% of the outstanding shares of Common Stock and the combined voting
power of the then Outstanding Voting Securities entitled to vote generally in
the election of directors of both entities resulting from such transaction, in
substantially the same proportions as their ownership, immediately prior to
such transaction, of the Outstanding Corporation Common Stock and Outstanding
Corporation Voting Securities; provided, that if another Corporate Transaction
involving the Corporation occurs in connection with or following a Spin-off,
such Corporate Transaction shall be analyzed separately for purposes of
determining whether a Change of Control has occurred;




          (d) The approval by the stockholders of the Corporation of a complete
liquidation or dissolution of the Corporation.



     5. DEFINITIONS:



          (a) For purposes of this Plan, “Cause” with respect to an Executive shall
mean:



               (i) The willful and continued failure of the Executive to perform
substantially the Executive’s duties with the Corporation or one of its
affiliates (other than any such failure resulting from incapacity due to
physical or mental illness), after a written demand for substantial performance
improvement is delivered to the Executive by the Board or the Chief Executive
Officer of the Corporation which specifically identifies the manner in which
the Board or Chief Executive Officer believes that the Executive has not
substantially performed the Executive’s duties, or



               (ii) The willful engaging by the Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the Corporation.
For purposes of this



 









 





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Section 5(a), no act or failure to act, on the part of the Executive, shall be
considered “willful” unless it is done, or omitted to be done, by the Executive
in bad faith or without reasonable belief that the Executive’s action or
omission was in the best interests of the Corporation. Any act, or failure to
act, based upon authority given pursuant to a resolution duly adopted by the
Board or upon the instructions of the Chief Executive Officer or a senior
officer of the Corporation or based upon the advice of counsel for the
Corporation shall be conclusively presumed to be done, or omitted to be done,
by the Executive in good faith and in the best interests of the Corporation.
The cessation of employment of the Executive shall not be deemed to be for
Cause unless and until there shall have been delivered to the Executive a copy
of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Board (excluding the Executive,
if he is a member of the Board) at a meeting of the Board called and held for
such purpose (after reasonable notice is provided to the Executive and the
Executive is given an opportunity, together with counsel, to be heard before
the Board), finding that, in the good-faith opinion of the Board, the Executive
is guilty of the conduct described in subparagraph (i) or (ii) above, and
specifying the particulars thereof in detail.




          (b) For purposes of this Plan, “Good Reason” with respect to an
Executive shall mean:



               (i) The assignment to the Executive of any duties inconsistent in any
respect with the Executive’s position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities immediately
prior to the Change of Control, or any other action by the Corporation or any
of its subsidiaries which results in a diminution in such position, authority,
duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Corporation or the applicable subsidiary promptly after receipt
of notice thereof given by the Executive;



 









 





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               (ii) Any reduction of the Executive’s base salary, annual bonus, incentive
opportunities, retirement benefits, welfare or fringe benefits below the
highest level enjoyed by the Executive during the 120-day period prior to the
Change of Control;



               (iii) The Corporation’s or one of its subsidiaries requiring the Executive
to be based at any office or location other than that at which he was based
immediately prior to the Change of Control or the Corporation’s or one of its
subsidiaries requiring the Executive to travel to a substantially greater
extent than required immediately prior to the Change of Control;



               (iv) Any purported termination by the Corporation or one of its
subsidiaries of the Executive’s employment otherwise than as expressly
permitted by this Plan; or


               (v) Any failure by the Corporation to comply with and satisfy Section
11(c) of this Plan.

For purposes of this Plan, any good-faith determination of “Good Reason” made
by an Executive shall be conclusive with respect to that Executive.



          (c) For purposes of this Plan, “Window Period” means the 30-day period
following the first anniversary of the Change of Control.



     6. ELIGIBILITY FOR BENEFITS: Benefits as described in Section 7 shall be
provided in the event the Executive’s employment with the Corporation or any of
its subsidiaries is terminated:



          (a) Involuntarily by the Corporation or the applicable subsidiaries
without Cause (a “Without Cause Termination”); or



          (b) By the Executive for Good Reason (a “Good Reason Termination”) or



          (c) By the Executive’s own election for any reason during the Window
Period; provided, in the case of a Without Cause Termination or a Good Reason
Termination, that such termination occurs within thirty-six months after a
Change of Control; and provided, further, that in



 









 





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no event shall a termination as a consequence of an Executive’s death,
disability, or Retirement (as defined in the next sentence) entitle the
Executive to benefits under this Plan. “Retirement” shall mean the Executive’s
voluntary retirement at or after his normal retirement date under the
Corporation’s or a subsidiary’s retirement plan or, if the Executive does not
participate in any such plan that provides for a normal retirement date, at or
after age 65.




     7. BENEFIT ENTITLEMENTS:



          (a) Lump Sum Payment: On or before the Executive’s last day of employment
with the Corporation or any of its subsidiaries, the Corporation or the
applicable subsidiary will pay to the Executive as compensation for services
rendered a lump sum cash amount (subject to any applicable payroll or other
taxes required to be withheld) equal to the sum of (i) Executive’s highest
annual salary fixed during the period Executive was an employee of the
Corporation or any of its subsidiaries, plus (ii) the greater of (x) the
largest amount awarded to him in a year as cash bonus (whether or not deferred
and regardless of deferral election) under the Corporation’s Management
Incentive Plan during the preceding four years or if the Executive has not been
employed for at least four full fiscal years, all of the completed full fiscal
years during which the Executive has been employed, or (y) the target bonus
under the Corporation’s Management Incentive Plan for the fiscal year in which
the Change of Control occurs, plus (iii) the greater of (x) the largest amount
awarded to Executive in a year as cash bonus (whether or not deferred and
regardless of deferral election) under the Corporation’s Performance Unit
Incentive Plan during the preceding four years or if the Executive has not been
employed for at least four full fiscal years, all of the completed full fiscal
years during which the Executive has been employed, or (y) the aggregate value
of shares when earned during a performance period under any performance-related
Restricted Stock award during the preceding four years or if the Executive has
not been employed for at least four full fiscal years, all of the completed
full fiscal years during which the Executive has been employed, or (z) the



 









 





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aggregate value at the time of grant of the target shares awarded under the
Corporation’s performance-related Restricted Stock programs for the fiscal year
in which the Change of Control occurs, multiplied by:




               (i) Three times a fraction, the numerator of which is 36
minus the number of full months from the date of the Change of
Control through the last day of the Executive’s employment, and
the denominator of which is 36, in the case of a Without Cause
Termination or a Good Reason Termination, or



               (ii) Two if the termination is voluntary during the Window Period.



          (b) Employee Plans: The Executive’s participation in life, accident,
health, compensation deferral, automobile, club membership, and financial
counseling plans of the Corporation, or the applicable subsidiary, if any,
provided to the Executive immediately prior to the Change of Control or his
termination, shall be continued, or equivalent benefits provided, by the
Corporation or the applicable subsidiary at no direct cost or tax cost to the
Executive in excess of the costs that would be imposed on the Executive, if he
remained an employee, for a period (the “Severance Period”) of:



               (i) Three years times a fraction, the numerator of which is 36 minus the
number of full months from the date of the Change of Control through the last
day of the Executive’s employment, and the denominator of which is 36, in the
case of a Without Cause Termination or a Good Reason Termination, or



               (ii) Two years if the termination is voluntary during the Window Period,
in each case from the date of termination (or until his death or normal
retirement date, whichever is sooner). The Executive’s participation in any
applicable qualified or nonqualified retirement and/or pension plans and any
deferred compensation or bonus plan of the Corporation or any of its
subsidiaries, if any, shall continue only through the last day of employment.
Any terminating



 









 





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     distributions and/or vested rights under such plans shall be governed by the
terms of the respective plans. For purposes of determining the eligibility of
the Executive for any post-retirement life and health benefits, the Executive
shall be treated as having attained an additional three years of age and
service credit (in the case of a Without Cause Termination or a Good Reason
Termination) or two years of age and service credit (if the termination is
voluntary during the Window Period), in each case as of the last day of the
Executive’s employment.



          (c) Special Retirement Benefits: If the Executive is, immediately prior
to his termination of employment, an active participant accruing benefits under
any qualified and/or nonqualified defined benefit retirement plans
(collectively, the “Retirement Plans”), then the Executive or his beneficiaries
shall be paid Special Retirement Benefits as and when the Executive or such
beneficiaries become entitled to receive benefits under the Retirement Plans
(as defined below), equal to the excess of (i) the retirement benefits that
would be payable to the Executive or his beneficiaries under the Retirement
Plans if the Executive’s employment had continued during the Severance Period,
all of his accrued benefits under the Retirement Plans (including those
attributable to the Severance Period) were fully vested, and his final average
compensation is equal to the Deemed Final Average Compensation, as defined
below, over (ii) the total qualified and unqualified benefits actually payable
to the Executive or his beneficiaries under the Retirement Plan. The “Deemed
Final Average Compensation” means the Executive’s final average compensation
computed in accordance with the Retirement Plans, except that the amount
specified in Section 7(a) shall be considered as having been paid to the
Executive as “compensation” in equal monthly installments during the Severance
Period. All Special Retirement Benefits shall be unfunded and payable solely
from the general assets of the Corporation or its appropriate subsidiary, and
are not intended to meet the qualification requirements of Section 401 of the
Internal Revenue Code. The amount of the Special Retirement Benefits shall be
determined using



 









 





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actuarial assumptions no less favorable to the Executive than those used in the
qualified Retirement Plan immediately prior to the Change of Control.




          (d) Outplacement: The Executive shall be provided with outplacement
benefits in accordance with those offered to Executives immediately prior to
the Change of Control.



          (e) Minimum Benefit Entitlement: Notwithstanding anything to the contrary
in this Section 7, and except as provided in Section 8(a), in no event shall an
Executive’s severance benefits under this Plan be less than the benefits (if
any) such Executive would have received in accordance with the severance policy
of the Corporation or applicable subsidiary in effect immediately prior to the
Change of Control.



     8. TAXES: (a) Anything in this Plan to the contrary notwithstanding,
and except as set forth below, in the event it shall be determined that any of
an Executive’s Payment(s) would be subject to the Excise Tax, then the
Executive shall be entitled to receive an additional payment (the “Gross-Up
Payment”) in an amount such that, after payment by the Executive of all taxes
(and any interest and penalties imposed with respect thereto) and Excise Tax
imposed upon the Gross-Up Payment, the Executive retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon such Executive’s
Payments. Notwithstanding the foregoing provisions of this Section 8(a), if it
shall be determined that the Executive is entitled to the Gross-Up Payment, but
that the Parachute Value of all Payments does not exceed 110% of the
Executive’s Safe Harbor Amount, then no Gross-Up Payment shall be made to the
Executive and the amounts payable under this Plan shall be reduced so that the
Parachute Value of all of such Executive’s Payments, in the aggregate, equals
the Executive’s Safe Harbor Amount. The reduction of the amounts payable
hereunder, if applicable, shall be made by first reducing the Executive’s
Payments under Section 7(a), unless an alternative method of reduction is
elected by the Executive, and in any event shall be made in such a manner as to
maximize the Value of all Payments actually made to the Executive.



 









 





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For purposes of reducing the Payments to the Safe Harbor Amount, only amounts
payable under this Plan (and no other Payments) shall be reduced. If the
reduction of the amounts payable under this Plan would not result in a
reduction of the Parachute Value of all Payments to the Executive’s Safe Harbor
Amount, no amounts payable to such Executive under this Plan shall be reduced
pursuant to this Section 8(a) and the Gross-Up Payment shall be made to the
Executive. The Corporation’s obligation to make Gross-Up Payments under this
Section 8 shall not be conditioned upon the Executive’s termination of
employment.




          (b) Determination By Accountant. Subject to the provisions of Section
8(c)ii, all determinations required to be made under this Section 8, including
whether and when a Gross-Up Payment to any Executive is required, the amount of
such Gross-Up Payment and the assumptions to be utilized in arriving at such
determination, shall be made by the Corporation’s auditor or another nationally
recognized accounting firm appointed by the Corporation (the “Accounting
Firm”). In the event that the Accounting Firm is serving as accountant or
auditor for the individual, entity or group effecting the Change of Control,
the Executive may appoint another nationally recognized accounting firm to make
the determinations required hereunder (which accounting firm shall then be
referred to as the Accounting Firm hereunder). The Accounting Firm shall
provide detailed supporting calculations both to the Corporation and the
Executive within 15 business days of the receipt of notice from the Executive
that there has been a Payment or such earlier time as is requested by the
Corporation. All fees and expenses of the Accounting Firm shall be borne
solely by the Corporation. Any Gross-Up Payment, as determined pursuant to
this Section 8, shall be paid by the Corporation to the applicable Executive
within five days of the receipt of the Accounting Firm’s determination. Any
determination by the Accounting Firm shall be binding upon the Corporation and
the applicable 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



 









 





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Firm hereunder it is possible that Gross-Up Payments that will not have been
made by the Corporation should have been made (the “Underpayment”), consistent
with the calculations required to be made hereunder. In the event the
Corporation exhausts its remedies pursuant to Section 8(c) and the Executive
thereafter is required to make a payment of any Excise Tax, the Accounting Firm
shall determine the amount of the Underpayment that has occurred and any such
Underpayment shall be promptly paid by the Corporation to or for the benefit of
the Executive.




          (c) Notification Required. The Executive shall notify the Corporation in
writing of any claim by the Internal Revenue Service that, if successful, would
require the payment by the Corporation of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than 10
business days after the Executive is informed in writing of such claim. The
Executive shall apprise the Corporation of the nature of such claim and the
date on which such claim is requested to be paid. The Executive shall not pay
such claim prior to the expiration of the 30-day period following the date on
which the Executive gives such notice to the Corporation (or such shorter
period ending on the date that any payment of taxes with respect to such claim
is due). If the Corporation notifies the Executive in writing prior to the
expiration of such period that it desires to contest such claim, the Executive
shall:



               (i) Give the Corporation any information reasonably requested by
the Corporation relating to such claim,



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



               (iii) Cooperate with the Corporation in good faith in order to
effectively contest such claim, and



 









 





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               (iv) Permit the Corporation to participate in any proceedings
relating to such claim; provided, however, that the Corporation shall
bear and pay directly all costs and expenses (including additional
interest and penalties) incurred in connection with such contest and
shall indemnify and hold the Executive harmless, on an after-tax basis,
for any Excise Tax or income tax, (including interest and penalties)
imposed as a result of such representation and payment of costs and
expenses. Without limitation on the foregoing provisions of this
Section 8(c)ii, the Corporation shall control all proceedings taken in
connection with such contest and, at its sole discretion, may pursue or
forgo any and all administrative appeals, proceedings, hearings and
conferences with the applicable taxing authority in respect of such
claim and may, at its sole discretion, 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
Corporation shall determine; provided, however, that if the Corporation
directs the Executive to pay such claim and sue for a refund, the
Corporation shall pay the amount of such payment to the Executive, and
shall indemnify and hold the Executive harmless, on an after-tax basis,
from any Excise Tax or income tax, (including interest or penalties)
imposed with respect to such payment or with respect to any imputed
income in connection with such payment; and provided, further that any
extension of the statute of limitations relating to payment of taxes for
the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Corporation’s control of the contest shall be limited
to issues with respect to which a the Gross-Up Payment would be payable
hereunder and the



 









 





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Executive shall be entitled to settle or contest, as the case may be,
any other issue raised by the Internal Revenue Service or any other
taxing authority.




          (d) Repayment. If, after the receipt by the Executive of a Gross-Up
Payment or an amount paid by the Corporation pursuant to Section 8(c), the
Executive becomes entitled to receive any refund with respect to the Excise Tax
to which such Gross-Up Payment relates or with respect to such claim, the
Executive shall (subject to the Corporation’s complying with the requirements
of Section 8(c), if applicable,) promptly pay to the Corporation the amount of
such refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Executive of an amount paid
by the Corporation pursuant to Section 8(c), a determination is made that the
Executive shall not be entitled to any refund with respect to such claim and
the Corporation does not notify the Executive in writing of its intent to
contest such denial of refund prior to the expiration of 30 days after such
determination, then the Executive shall not be required to repay such amount to
the Corporation, but the amount of such payment shall offset, to the extent
thereof, the amount of Gross-Up Payment required to be paid.



          (e) Withholding. Notwithstanding any other provision of this Section 8,
the Corporation may, in its sole discretion, withhold and pay over to the
Internal Revenue Service or any other applicable taxing authority, for the
benefit of each Executive, all or any portion of any Gross-Up Payment.



          (f)  Definitions: The following terms shall have the following meanings
for purposes of this Section 8.



          “Excise Tax” shall mean the excise tax imposed by Section 4999 of the
Code, together with any interest or penalties imposed with respect to such
excise tax.



          “Parachute Value” of a Payment shall mean the present value as of the date
of the change of control for purposes of Section 280G of the Code of the
portion of such Payment that constitutes a “parachute payment” under Section
280G(b)(2), as determined by the Accounting Firm for purposes of determining
whether and to what extent the Excise Tax will apply to such Payment.



 









 





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          A “Payment” shall mean any payment or distribution in the nature of
compensation (within the meaning of Section 280G(b)(2) of the Code) to or for
the benefit of an Executive, whether paid or payable pursuant to this Plan or
otherwise.



          The “Safe Harbor Amount” of an Executive means 2.99 times the Executive’s
“base amount,” within the meaning of Section 280G(b)(3) of the Code.



          “Value” of a Payment shall mean the economic present value of a Payment as
of the date of the change of control for purposes of Section 280G of the Code,
as determined by the Accounting Firm using the discount rate required by
Section 280G(d)(4) of the Code.



     9. INDEMNIFICATION: If litigation is brought to enforce or interpret any
provision contained herein, the Corporation or applicable subsidiary, to the
extent permitted by applicable law and the Corporation’s or subsidiary’s
Articles of Incorporation, as the case may be, shall indemnify each Executive
who is a party thereto for his reasonable attorneys’ fees and disbursements
incurred in such litigation, regardless of the outcome thereof, and shall pay
interest on any money judgment obtained by the Executive calculated at the
Citibank, N.A. prime interest rate in effect from time to time from the date
that payment(s) to him should have been made under this Plan until the date the
payment(s) is made. Such attorneys’ fees and disbursements shall be paid
promptly as incurred by the Executive.



     10. PAYMENT OBLIGATIONS ABSOLUTE: Except as expressly provided in Section
13 and 14, the Corporation’s or subsidiary’s obligation to pay the Executive
the benefits hereunder and to make the arrangements provided herein shall be
absolute and unconditional and shall not be affected by any circumstances,
including, without limitation, any set-off, counter-claim, recoupment, defense
or other right which the Corporation or any of its subsidiaries may have
against him or anyone else. All amounts paid or payable by the Corporation or
one of its subsidiaries hereunder shall be paid without notice or demand. Each
and every payment made hereunder by the Corporation or subsidiary shall be
final and the Corporation or subsidiary will not seek to recover all or any
part of such payment(s) from the Executive or from whosoever may be



 









 





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entitled thereto, for any reason whatsoever. No Executive shall be obligated
to seek other employment in mitigation of the amounts payable or arrangements
made under any provision of this Plan, and the obtaining of any such other
employment shall in no event effect any reduction of the Corporation’s or
subsidiary’s obligations to make the payments and arrangements required to be
made under this Plan. The Corporation or applicable subsidiary may at the
discretion of the Chief Executive Officer of the Corporation enter into an
irrevocable, third-party guarantee or similar agreement with a bank or other
institution with respect to the benefits payable to an Executive hereunder,
which would provide for the unconditional payment of such benefits by such
third party upon presentment by an Executive of his Certificate (and on such
other conditions deemed necessary or desirable by the Corporation or such
subsidiary) at some specified time after termination of employment. Such
third-party guarantor shall have no liability for improper payment if it
follows the instructions of the Corporation or such subsidiary as provided in
such Certificate and other documents required to be presented under the
agreement, unless the Corporation or such subsidiary, in a written notice, has
previously advised such third-party guarantor of the determination by its Board
of Directors of ineligibility of the Executive in accordance with Section 15.




     11. CONTINUING OBLIGATIONS: It shall be a condition to the entitlement of
an Executive to any benefits under this Plan that he agree to retain in
confidence any confidential information known to him concerning the Corporation
and its subsidiaries and their respective businesses as long as such
information is not publicly disclosed, except as required by law.



     12. SUCCESSORS:



          (a) The benefits provided under this Plan are personal to the Executives
and without the prior written consent of the Corporation shall not be
assignable by any Executive



 









 





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otherwise than by will or the laws of descent and distribution. This Plan
shall inure to the benefit of and be enforceable by the Executive’s legal
representatives.




          (b) This Plan shall inure to the benefit of and be binding upon the
Corporation and its successors and assigns.



          (c) The Corporation will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Corporation to assume
expressly and agree to perform this Plan in the same manner and to the same
extent that the Corporation would be required to perform it if no such
succession had taken place. As used in this Plan, Corporation shall mean the
Corporation as hereinbefore defined and any other person or entity which
assumes or agrees to perform this Plan by operation of law, or otherwise.



     13. SEVERABILITY: Any provision in this Plan which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective only to the extent of such prohibition or unenforceability without
invalidating or affecting the remaining provisions hereof, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.



     14. OTHER PLANS AND AGREEMENTS: Notwithstanding any provision herein to
the contrary, in the event the Executive’s employment with the Corporation or
applicable subsidiary terminates and the Executive is entitled to receive
termination, separation or other like amounts from the Corporation or any of
its subsidiaries pursuant to any contract of employment, generally prevailing
separation pay policy, or other program of the Corporation or applicable
subsidiary, all such amounts shall be applied to and set off against the
Corporation’s or applicable subsidiary’s obligation set forth in Sections 7 and
8 of this Plan. Nothing in this Section 14 is intended to result in set-off of pension benefits, supplemental executive retirement benefits,



 









 





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disability benefits, retiree benefits or any other plan benefits not directly
provided as termination or separation benefits.




     15. AMENDMENT AND TERMINATION: This Plan may be amended or terminated by
action of the Board. This Plan shall terminate with respect to an Executive if
the Chief Executive Officer of the Corporation determines that the Executive is
no longer a key executive to be provided a severance agreement and so notifies
the Executive by certified mail at least thirty (30) days before participation
in this Plan shall cease. Notwithstanding the foregoing, no such amendment,
termination or determination may be made, (and if made, shall have no effect
during the period of thirty-six months following any Change of Control or (ii)
during any period of time when the Corporation has knowledge that any third
person has taken steps reasonably calculated to effect a Change of Control,
until such third person has abandoned or terminated his efforts to effect a
Change of Control as determined by the Board in good faith, but in its sole
discretion.



     16. GOVERNING LAW: This Plan shall be governed by and construed in
accordance with the laws of the State of Delaware, without reference to
principles of conflict of laws. The captions of this Plan are not part of the
provisions hereof and shall have no force or effect.



     17. By acceptance of participation in this Plan, an Executive agrees to
give a minimum of four (4) weeks’ notice to the Corporation in the event of his
voluntary resignation.