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Form of Management Continuity Agreement

This is an actual contract by Ralston Purina.

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Sectors: Food, Beverages and Tobacco
Governing Law: Missouri, View Missouri State Laws
Effective Date: January 01, 2000
Related Agreement Types:
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MANAGEMENT CONTINUITY AGREEMENT by and between Ralston Purina Company ("Ralston"), a Missouri corporation, and ______ (the "Executive").


WITNESSETH:


WHEREAS, the Board of Directors, as defined herein, has authorized Ralston to enter into a Management Continuity Agreement (the "Agreement") with certain key executives of Ralston; and


WHEREAS, the Board of Directors believes it is imperative, in the event of an attempted Change in Control, as defined herein, that certain key executives continue employment with Ralston or one of its Affiliates, and that Ralston be able to receive and rely upon the advice of such executives on the best interests of Ralston and its shareholders, without concern that the executives may be distracted by uncertainties as to their own position or security; and


WHEREAS, the Executive is a key executive of Ralston and has been selected by the Board of Directors to be offered this Agreement; and


WHEREAS, the Board of Directors believes that the payments which may be made under this Agreement constitute additional reasonable compensation for services to be rendered by the Executive in connection with a Change in Control;


NOW, THEREFORE, for and in consideration of the premises and other good and valuable consideration, Ralston and the Executive agree as follows:


ARTICLE 1. DEFINITIONS: For purposes of this Agreement, the following terms shall have the meanings set forth below:


a. AFFILIATE: An Affiliate shall mean any Person who, directly or indirectly
or through one or more intermediaries, Controls another Person, is
Controlled by another Person, or is under common Control with another
Person.


b. BASE AMOUNT: The Base Amount shall mean the "base amount" as defined and
determined pursuant to Section 280G of the Code applicable at the time of
the Executive's Qualifying Termination.


c. BASE COMPENSATION: The Base Compensation shall mean the sum of:


(i) the Executive's monthly gross salary, whether paid or deferred, for
the last full month preceding the Executive's Qualifying Termination or
for the last full month preceding the Change in Control, whichever is
greater; 2
(ii) a one (1) month portion (as if earned ratably over the relevant
period) of the Executive's most recent annual (or, if applicable, pro rata
portion of the annual) bonus, whether paid or deferred, preceding the
Executive's Qualifying Termination or the Change in Control, whichever is
greater; and


(iii) the greater of the following:


(A) a one (1) month portion (as if earned ratably over the relevant
period) of the Executive's bonus award (base and peer group award,
if applicable) most recently made at the end of the full term of an
Incentive Plan prior to a Change in Control, whether paid or
deferred;


or


(B) a one (1) month portion (as if earned ratably over the relevant
period) of any amounts attributable to the Executive under all of
the Incentive Plans in effect at the time of the Change in Control,
calculated through the last full month preceding the Change in
Control or, if applicable, preceding the Executive's Qualifying
Termination, whichever is greater.


d. BENEFICIAL OWNERSHIP: Beneficial Ownership shall mean "beneficial
ownership" as defined in Rule 13d-3 promulgated under Section 13(d) of the
Exchange Act.


e. BOARD OF DIRECTORS: The Board of Directors shall mean the Board of
Directors of Ralston.


f. BUYER: A Person which, alone or with its Affiliates, purchases the
business or businesses of Ralston and its Affiliates in a transaction or
transactions described in Article 2(c).


g. CHANGE IN CONTROL: A Change in Control shall mean an occurrence set forth
in Article 2.


h. CODE: The Code shall mean the Internal Revenue Code of 1986, as amended.


i. COMMON STOCK: Common Stock shall mean the $.10 par value common stock of
Ralston, and such other Ralston voting stock that may be issued, prior to
a Change in Control, in lieu of, or in addition to, the Common Stock, as a
result of (i) a merger or consolidation of Ralston, (ii) the creation of a
class or classes of tracking stock, or (iii) the reclassification of any
of the foregoing.


j. CONTINUING DIRECTOR: A Continuing Director shall mean a member of the
Board of Directors as of the date hereof, and any other director who was
appointed or nominated for election to the Board of Directors by a
majority of the Continuing Directors then in office.


2 3 k. CONTROL: Control (including the terms "controlling", "controlled by" and
"under common control with") shall mean the possession of a power,
directly or indirectly, whether through ownership of securities, by
contract or otherwise:


(i) to elect a majority of the Board of Directors of a Person; or


(ii) to direct the business, management and policies of a Person or direct
the sale of a substantial portion of its assets.


l. DISABILITY: A Disability shall mean a condition where the Executive
suffers a complete inability to perform the Executive's work assignments
because of injury or sickness, and such inability is expected to continue
indefinitely. To determine Disability, Ralston shall rely on a
determination with respect to disability of the Executive made under the
Purina Benefit Association Long Term Disability Plan or any successor
disability plan. If no such determination has been made within seven (7)
months after the Executive's last day worked, or if the Executive is not
enrolled in any such Long Term Disability Plan, the determination shall be
made by a licensed physician jointly selected by Ralston and the
Executive. Fees and expenses of any physician, and all costs of
examinations of the Executive, shall be paid by Ralston.


m. DISCOUNT RATE: The Discount Rate shall mean the "applicable interest rate"
(and the mortality tables, if applicable) prescribed under Section
417(e)(3) of the Code at the time of the Executive's Qualifying
Termination.


n. EXCHANGE ACT: The Exchange Act shall mean the Securities Exchange Act of
1934, as amended.


o. GROUP: A Group shall mean "group" as defined in Section 13(d)(3) of the
Exchange Act.


p. INCENTIVE PLAN: An Incentive Plan shall mean any cash bonus plan with a
term of more than two (2) years but less than five (5) years, including
the 1996, 1998 and 2000 Leveraged Incentive Plans (whether or not subject
to the terms of the Executive Incentive Compensation Plan) and all similar
plans adopted during the term of this Agreement.


q. PAYMENT PERIOD: The Payment Period shall mean the period commencing with
the first day of the month following the month in which a Qualifying
Termination occurs and continuing:


(i) for twenty-four (24) months if the Qualifying Termination occurs at
any time during the first year following the Change in Control; or


3 4
(ii) for twelve (12) months if the Qualifying Termination occurs at any
time during the second year following the Change in Control.


r. PERSON: Person shall mean any natural person, firm, individual, company,
corporation, partnership, joint venture, joint stock company, limited
liability company, business trust, trust, association or any other
business organization or entity, whether incorporated or unincorporated,
or any division thereof.


s. QUALIFYING TERMINATION: A Qualifying Termination shall mean the
Executive's termination of employment, within two (2) years after a Change
in Control, from Ralston, a Buyer or an Affiliate or a Successor of the
foregoing; provided that, a Qualifying Termination shall not be deemed to
occur on account of:


(A) the Executive's transfer of employment at any time during the term
of this Agreement between any two Persons comprised of Ralston or
its Successor, and any of their Affiliates, provided that, upon such
a transfer after a Change in Control, the Executive has
Substantially the Same Employment after such transfer as immediately
prior to the Change in Control; or


(B) the Executive's being employed by a Buyer or any Affiliate or
Successor of such Buyer, in connection with a Change in Control
described in Article 2(c), provided that, during the term of this
Agreement, the Executive has Substantially the Same Employment as
immediately prior to the Change in Control; or


(C) the Executive's death; or


(D) after a Change in Control, the Executive's voluntary termination of
employment with Ralston, a Buyer or an Affiliate or Successor of the
foregoing, if the Executive has Substantially the Same Employment at
the time of such voluntary termination as immediately prior to the
Change in Control.


t. RETIREMENT PLAN: The Retirement Plan shall mean the Ralston Purina
Retirement Plan, as amended, or any successor retirement plan adopted by
Ralston.


u. SPIN-OFF: A Spin-off shall mean a spin-off, reverse spin-off or similar
type of transaction, including a management-led leveraged buyout,
resulting in the disposition to Ralston's shareholders, or to a
management-led leveraged buyout group, of all or substantially all of the
stock and/or assets of any business conducted by Ralston and/or its
Affiliates.


4 5 v. SUBSTANTIALLY THE SAME EMPLOYMENT: Substantially the Same Employment shall
mean employment where there is, after a Change in Control compared to
immediately prior to a Change in Control:


(i) no reduction in the Executive's base salary and no less than
such annual increases in the Executive's base salary as were
customary with respect to the Executive prior to the Change in
Control; and


(ii) no reduction in the annual bonus award opportunity below the
performance target applicable to the Executive, for both
personal and company or business unit performance, unless a
substantially equivalent arrangement (embodied in an ongoing
substitute or alternative annual bonus award plan) has been
made with respect to such annual bonus award, and such
arrangement provides benefits not materially less favorable to
the Executive (both in terms of the amount of benefits
provided and the level of the Executive's participation
relative to other participants); and


(iii) no substantial reduction in Executive's participation in any
executive incentive compensation plans in which Executive
participated immediately before the Change in Control,
including but not limited to the Executive Incentive
Compensation Plan, any Incentive Plan, and the Incentive Stock
Plan (or any substitute or successor plans adopted prior to
the Change in Control), unless a substantially equivalent
arrangement (embodied in an ongoing substitute or alternative
plan) has been made with respect to such executive incentive
compensation plans, and such arrangement provides benefits not
materially less favorable to the Executive (both in terms of
the amount of benefits provided and the level of the
Executive's participation relative to other participants); and


(iv) no substantial reduction in employee pension benefits
(including plans qualified under Section 401(a) of the Code
and non-qualified plans) and welfare and fringe benefits
applicable to the Executive, so that the benefit programs for
which the Executive is eligible are, in the aggregate,
substantially equivalent; and


(v) no reduction of a substantial nature in the Executive's duties
or responsibilities, or assignment of new duties inconsistent
with the Executive's skills, education and experience; and


(vi) no substantial reduction in the Executive's access to
administrative support services; and


5 6
(vii) no requirement that any of the Executive's offices be located
more than fifty (50) miles from the location of such offices
immediately prior to a Change in Control; and


(viii) no increase in the Executive's required business travel away
from his or her office that would be substantially
inconsistent with the Executive's business travel obligations
immediately prior to a Change in Control.


w. SUCCESSOR: A Successor shall mean (i) the continuing, surviving or
successor Person which is created, or remains in existence, upon the
merger or consolidation of two Persons; or (ii) a Person which otherwise
succeeds (by operation of law, contract or otherwise) to the rights,
duties or interests of another Person.


x. SUPPLEMENTAL PLAN: The Supplemental Plan shall mean the Ralston Purina
Supplemental Retirement Plan, as amended, or any successor supplemental
retirement plan adopted by Ralston.


ARTICLE 2. CHANGE IN CONTROL: A Change in Control will occur if there is:


a. Such a change in the membership of the Board of Directors that
Continuing Directors shall have ceased (for any reason) to
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