Change in Control Agreement - The New Dun & Bradstreet Corp.
[MASTER 2X]
PRIOR AGREEMENTS
June 29, 1998
PERSONAL AND CONFIDENTIAL
[NAME]
[ADDRESS]
[ADDRESS]
Dear [FIRST_NAME]:
The New Dun & Bradstreet Corporation, to be renamed "The Dun &
Bradstreet Corporation" after the shares of common stock of the New Dun &
Bradstreet Corporation are distributed to the shareholders of The Dun &
Bradstreet, (the "Company") considers it essential to the best interests of its
shareholders to foster the continued employment of key management personnel. In
this connection, the Board of Directors of the Company (the "Board") recognizes
that, as is the case with many publicly held corporations, the possibility of a
"Change in Control" (as such term is defined in Section 2) may exist and that
such possibility, and the uncertainty and questions which it may raise among
management, may result in the departure or distraction of key management
personnel to the detriment of the Company and its shareholders.
The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of key members of
the Company's management, including yourself, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change in Control.
In order to induce you to remain in the employ of the Company, the
Company agrees that you shall receive the severance benefits set forth in this
letter agreement (the "Agreement") in the event your employment with the Company
is terminated under the circumstances described below subsequent to a Change in
Control. No provision of this letter agreement shall be effective for any
purpose whatsoever except upon the occurrence of either a "Potential Change in
Control" (as such term is defined in Section 2) or a Change in Control. This
letter
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agreement supersedes any previous letter agreement(s) between you and the
Company relating to this subject matter.
1. Term of Agreement. This Agreement shall commence on June 29,
1998, and shall continue in effect through December 31, 2000; provided, however,
that commencing on January 1, 2001, and each January 1 thereafter, the term of
this Agreement shall automatically be extended for one additional year unless,
not later than September 30th of the preceding year, the Company or you shall
have given notice to the other that it or you, respectively, does not wish to
extend this Agreement, provided, however, that no such notice shall be effective
if a Change in Control or Potential Change in Control shall have occurred prior
to the date of such notice; and provided, further, that if a Change in Control
shall have occurred during the original or extended term of this Agreement, this
Agreement shall continue in effect for a period of not less than twenty-four
(24) months beyond the month in which such Change in Control occurred.
2. Change in Control; Potential Change in Control. (i) No benefits
shall be payable hereunder unless there shall have been a Change in Control, as
set forth below. For purposes of this Agreement, a "Change in Control" shall be
deemed to have occurred if
(a) any "Person", as such term is used in Sections 13(d) and 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 shareholders of the Company in
substantially the same proportions as their ownership of stock of the
Company), is or 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;
(b) during any period of twenty-four months (not including any
period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new director (other
than (1) a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in clause
(a), (c) or (d) of this Section, (2) a director designated 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 (3) a director designated 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
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securities) whose election by the Board or nomination for election by the
Company's shareholders was approved 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;
(c) the shareholders of the Company approve a merger or
consolidation of the Company with any other company, other than (1) a
merger or consolidation 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 50% of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation and (2) 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; or
(d) the shareholders 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.
(ii) For purposes of this Agreement, a "Potential Change in Control"
shall be deemed to have occurred if:
(a) the Company enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control;
(b) 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;
(c) the Board adopts a resolution to the effect that, for purposes
of this Agreement, a Potential Change in Control has occurred.
(iii) You agree that, subject to the terms and conditions of this
Agreement, in the event of a Potential Change in Control, you will remain in the
employ of the Company until the earliest of (a) a date which is 180 days from
the occurrence of such Potential Change in Control, (b) the termination by you
of your employment by reason of Disability as defined in Subsection 3(ii), or
(c) the date on which you first become entitled under this Agreement to receive
the benefits provided in Section 4(iii) below.
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3. Termination Following Change in Control. (i) General. If any of
the events described in Section 2 constituting a Change in Control shall have
occurred, you shall be entitled to the benefits provided in Section 4(iii) upon
the subsequent termination of your employment during the term of this Agreement
unless such termination is (a) because of your death or Disability, (b) by the
Company for Cause, or (c) by you other than for Good Reason. If your employment
with the Company is terminated prior to a Change in Control at the request of a
Person engaging in a transaction or series of transactions that would result in
a Change in Control, the twenty-four month period set forth in Section 1 of this
Agreement will commence upon the subsequent occurrence of a Change in Control,
your actual termination shall be deemed a termination occurring during such
twenty-four month period and covered by Section 3 of this Agreement, your Date
of Termination shall be deemed to have occurred immediately following the Change
in Control, and Notice of Termination shall have been deemed to have been given
by the Company immediately prior to your actual termination.
(ii) Disability. If, as a result of your incapacity due to physical
or mental illness or disability, you shall have been absent from the full-time
performance of your duties with the Company for six (6) consecutive months, and
within thirty (30) days after written notice of termination is thereafter given
you shall not have returned to the full-time performance of your duties, your
employment may be terminated for "Disability".
(iii) Cause. Termination by the Company of your employment for
"Cause" shall mean termination: (a) upon the willful and continued failure by
you to substantially perform your duties with the Company (other than any such
failure resulting from your incapacity due to physical or mental illness or any
such actual or anticipated failure after the issuance of a Notice of Termination
(as defined in Subsection 3(v)) by you for Good Reason (as defined in Subsection
3(iv)), after a written demand for substantial performance is delivered to you
by the Board, which demand specifically identifies the manner in which the Board
believes that you have not substantially performed your duties; (b) upon the
willful engaging by you in conduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise; or (c) upon your conviction
of a felony. For purposes of this Subsection, no act, or failure to act, on your
part shall be deemed "willful" unless done, or omitted to be done, by you not in
good faith and without reasonable belief that your action or omission was in the
best interest of the Company. Notwithstanding the foregoing, you shall not be
deemed to have been terminated for Cause unless and until there shall have been
delivered to you a copy of a 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 you and an opportunity for you,
together with your counsel, to be heard before the Board), finding that in
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the good faith opinion of the Board you were guilty of conduct set forth above
in this Subsection and specifying the particulars thereof in detail.
(iv) Good Reason. You shall be entitled to terminate your employment
for Good Reason. For purposes of this Agreement, "Good Reason" shall mean
without your express written consent, the occurrence after a Change in Control
of any of the following circumstances unless, in the case of paragraphs (a),
(e), (f), (g) or (h), such circumstances are fully corrected prior to the Date
of Termination (as defined in Section 3(vi)) specified in the Notice of
Termination (as defined in Section 3(v)) given in respect thereof:
(a) the assignment to you of any duties inconsistent with the
position in the Company that you held immediately prior to the Change in
Control, or an adverse alteration in the nature or status of your
responsibilities or the conditions of your employment from those in effect
immediately prior to such Change in Control;
(b) a reduction by the Company in your annual base salary and/or
guideline bonus and/or perquisites as in effect on the date hereof or as
the same may be increased from time to time except for across-the-board
perquisites reductions similarly affecting all management personnel of the
Company and all management personnel of any Person in control of the
Company;
(c) the relocation of the Company's offices at which you are
principally employed immediately prior to the date of the Change in
Control to a location more than thirty-five (35) miles from such location,
except for required travel on the Company's business to an extent
substantially consistent with your business travel obligations prior to
the Change in Control; provided, however, that a relocation of the
Company's offices at which you are principally employed immediately prior
to the date of the Change in Control to New York City shall not constitute
"Good Reason" for purposes of this Agreement;
(d) the failure by the Company to pay to you any portion of your
compensation or to pay to you any portion of an installment of deferred
compensation under any deferred compensation program of the Company within
seven (7) days of the date such compensation is due;
(e) the failure by the Company to continue in effect any material
compensation or benefit plan in which you participated immediately prior
to the 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 your
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participation therein (or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms of the amount of
benefits provided and the level of your participation relative to other
participants, as existed at the time of the Change in Control;
(f) the failure by the Company to continue to provide you with
benefits substantially similar to those enjoyed by you under any of the
Company's life insurance, medical, dental, accident, or disability plans
or perquisites in which you were participating at the time of the Change
in Control, the taking of any action by the Company which would directly
or indirectly materially reduce any of such benefits, or the failure by
the Company to provide you with the number of paid vacation days to which
you are entitled on the basis of years of service with the Company in
accordance with the Company's normal vacation policy in effect at the time
of the Change in Control;
(g) the failure of the Company to obtain a satisfactory agreement
from any successor to assume and agree to perform this Agreement, as
contemplated in Section 5 hereof; or
(h) any purported termination of your employment that is not
effected pursuant to a Notice of Termination satisfying the requirements
of Subsection (v) hereof (and, if applicable, the requirements of
Subsection (iii) hereof), which purported termination shall not be
effective for purposes of this Agreement.
Your right to terminate your employment pursuant to this Subsection shall not be
affected by your incapacity due to physical or mental illness. Your continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any circumstance constituting Good Reason hereunder.
(v) Notice of Termination. Any purported termination of your
employment by the Company or by you shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 6. "Notice of
Termination" shall mean a notice that shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of your
employment under the provision so indicated.
(vi) Date of Termination, Etc. "Date of Termination" shall mean (a)
if your employment is terminated for Disability, thirty (30) days after Notice
of Termination is given (provided that you shall not have returned to the
full-time performance of your duties during such thirty (30) day period), or (b)
if your employment is terminated pursuant to Subsection (iii) or (iv) hereof or
for any other reason (other than Disability), the date
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specified in the Notice of Termination (which, in the case of a termination for
Cause shall not be less than thirty (30) days from the date such Notice of
Termination is given, and in the case of a termination for Good Reason shall not
be less than fifteen (15) nor more than sixty (60) days from the date such
Notice of Termination is given; provided, however, that if within fifteen (15)
days after any Notice of Termination is given, or, if later, prior to the Date
of Termination (as determined without regard to this proviso), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, then the Date of Termination shall be the
date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order or decree of a court of competent jurisdiction (which is not
appealable or with respect to which the time for appeal therefrom has expired
and no appeal has been perfected); and provided, further, that the Date of
Termination shall be extended by a notice of dispute only if such notice is
given in good faith and the party giving such notice pursues the resolution of
such dispute with reasonable diligence. Notwithstanding the pendency of any such
dispute, the Company will continue to pay you your full compensation in effect
when the notice giving rise to the dispute was given (including, but not limited
to, base salary) and continue you as a participant in all compensation, benefit
and insurance plans in which you were participating when the notice giving rise
to the dispute was given, until the dispute is finally resolved in accordance
with this Subsection. Amounts paid under this Subsection are in addition to all
other amounts due under this Agreement, and shall not be offset against or
reduce any other amounts due under this Agreement and shall not be reduced by
any compensation earned by you as the result of employment by another employer.
4. Compensation Upon Termination or During Disability. Following a
Change in Control, you shall be entitled to the following benefits during a
period of disability, or upon termination of your employment, as the case may
be, provided that such period or termination occurs during the term of this
Agreement:
(i) During any period that you fail to perform your full-time
duties with the Company as a result of incapacity due to physical or
mental illness or disability, you shall continue to receive your base
salary at the rate in effect at the commencement of any such period,
together with all compensation payable to you under the Company's
disability plan or program or other similar plan during such period, until
this Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter,
or in the event your employment shall be terminated by reason of your
death, your benefits shall be determined under the Company's retirement,
insurance and other compensation programs then in effect in accordance
with the terms of such programs.
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(ii) If your employment shall be terminated by the Company for
Cause or by you other than for Good Reason, the Company shall pay you your
full base salary through the Date of Termination at the rate in effect at
the time Notice of Termination is given, plus all other amounts to which
you are entitled under any compensation plan of the Company at the time
such payments are due, and the Company shall have no further obligations
to you under this Agreement.
(iii) If your employment by the Company should be terminated by
the Company other than for Cause or Disability or if you should terminate
your employment for Good Reason, you shall be entitled to the benefits
provided below:
(a) the Company shall pay to you your full base salary through
the Date of Termination at the rate in effect at the time Notice of
Termination is given, no later than the fifth day following the Date
of Termination, plus all other amounts to which you are entitled
under any compensation plan of the Company, at the time such
payments are due;
(b) in lieu of any further salary payments to you for periods
subsequent to the Date of Termination, the Company shall pay as
severance pay to you, at the time specified in Subsection (v), a
lump sum severance payment (in addition to the payments provided in
paragraphs (c), (d), (e), (f), (g), (h) and (i) below, the
"Severance Payments") equal to (1) 200% of the greater of (A) your
annual base salary in effect on the Date of Termination or (B) your
annual base salary in effect immediately prior to the Change in
Control, and (2) 200% of your guideline bonus with respect to the
year in which the Change in Control occurs; your annual base salary
and guideline bonus (as taken into account under the first half of
this Subsection (iii)(b)) shall count for two years additional
credited service and be included in final average earnings
calculations for participants in the Company's Retirement Account
Plan, Supplemental Executive Retirement Plan, Pension Benefit
Equalization Plan and any successor or substitute plans thereto, a
sample calculation of which appears in Exhibit A to this Agreement;
(c) in lieu of shares of common stock of the Company ("Common
Shares") issuable upon exercise of outstanding options (other than
options qualifying as incentive stock options ("ISOs") under Section
422A of the Internal Revenue Code of 1986 (the "Code") which ISOs
were granted on or before the date hereof) ("Options"), and stock
appreciation rights ("SARs"), if any, granted to you under the
Company's 1998 Replacement Plan, 1998 Key Employees' Stock Incentive
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Plan or any successor or substitute plans thereto (except those SARs
applicable to ISOs granted on or before the date hereof) (which
Options shall be cancelled upon the making of the payment referred
to below), the Company shall pay to you, at the time specified in
Subsection (v), an amount in cash equal to the product of (1) the
excess of, in the case of an ISO granted after the date hereof, the
closing price of Common Shares as reported on the New York Stock
Exchange on or nearest the Date of Termination (or, if not listed on
such exchange, on a nationally recognized exchange or quotation
system on which trading volume in the Common Shares is highest) and,
in the case of all other Options, the higher of such closing price
or the highest per share price for Common Shares actually paid in
connection with any Change in Control, over the per share option
price of each Option held by you (whether or not then fully
exercisable), and (2) the number of Common Shares covered by each
such Option;
(d) in lieu of Common Shares issuable upon the lapse of
restrictions, if any, granted to you under the Company's 1998
Replacement Plan, 1998 Key Employees' Stock Incentive Plan or any
successor or substitute plan(s) thereto, the Company shall pay to
you, at the time specified in Subsection (v), an amount in cash
equal to the product of (1) the closing price of Common Shares as
reported on the New York Stock Exchange on or nearest the Date of
Termination (or, if not listed on such exchange, on a nationally
recognized exchange or quotation system on which trading volume in
the Common Shares is highest) or the highest per share price for
Common Shares actually paid in connection with any Change in
Control, whichever is greater (such price, the "Price"), and (2) the
number of Common Shares granted to you subject to such restrictions;
(e) (1) all outstanding performance units awarded to you under
the Company's 1998 Key Employees' Stock Incentive Plan, whether or
not vested, shall be cancelled, and you shall receive a cash payment
equal to the amount you would have earned at a 100% target award
valuation; and (2) all outstanding unrestricted stock awarded to you
under such plan, whether or not vested, shall be cancelled, and you
shall receive a cash payment equal to the product of (A) the number
of cancelled unrestricted shares and (B) the Price;
(f) the Company shall provide you with a cash allowance, at
the time specified in Subsection (v), for outplacement counseling
and job search activities in the amount of 15% of your annual salary
and guideline bonus as in effect on the Date of Termination but not
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to exceed a maximum allowance of $50,000; and the Company shall pay
to you all legal fees and expenses incurred by you as a result of
such termination (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or in
seeking to obtain or enforce any right or benefit provided by this
Agreement or in connection with any tax audit or proceeding to the
extent attributable to the application of section 4999 of the Code
to any payment or benefit provided hereunder);
(g) for a twenty-four (24) month period after such
termination, the Company shall arrange to provide you with life and
health insurance benefits and perquisites substantially similar to
those which you were receiving immediately prior to the Notice of
Termination. Notwithstanding the foregoing, the Company shall not
provide any benefit otherwise receivable by you pursuant to this
paragraph (g) if an equivalent benefit is actually received by you
during the twenty-four (24) month period following your termination,
and any such benefit actually received by you shall be reported to
the Company;
(h) at the time specified in Subsection (v), the Company shall
pay to you, in lieu of amounts which may otherwise be payable to you
under any bonus plan (a "Bonus Plan"), an amount in cash equal to
(1) your annual target bonus for the year in which the Change in
Control occurs, multiplied by a fraction, (A) the numerator of which
equals the number of full or partial days in such annual performance
period during which you were employed by the Company and (B) the
denominator of which is 365, and (2) the entire target bonus
opportunity with respect to each performance period in progress
under all other Bonus Plans in effect at the time of termination;
and
(i) starting at age 55, you shall receive retiree medical and
life benefits from the Company. Such benefits shall be no less
favorable than the benefits that you would have received had you, at
the time Notice of Termination is given, both (1) attained age 55
and (2) retired from the Company. Notwithstanding the foregoing, any
benefit described in the preceding sentence shall constitute
secondary coverage with respect to retiree medical and life benefits
actually received by you in connection with any subsequent
employment (or self-employment) following your termination.
(iv) In the event that you become entitled to the Severance
Payments, if any of the Severance Payments will be
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subject to the tax (the "Excise Tax") imposed by section 4999 of the Code,
(or any similar federal, state or local tax that may hereafter be
imposed), the Company shall pay to you at the time specified in Subsection
(v) below, an additional amount (the "Gross-Up Payment") such that the net
amount retained by you, after deduction of any Excise Tax on the Total
Payments (as hereinafter defined) and any federal, state and local income
tax and Excise Tax upon the payment provided for by this subsection, shall
be equal to the Total Payments. 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 you in connection with a Change in Control or your 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) shall be
treated as subject to the Excise Tax, unless in the opinion of tax counsel
selected by the Company's independent auditors and acceptable to you 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 (1) the total amount of the Total Payments and (2)
the amount of excess parachute payments within the meaning of section
280G(b)(1) (after applying clause (a), above), and (c) the value of any
non-cash benefits or any deferred payments or benefit shall be determined
by the Company's independent auditors in accordance with the principles of
sections 280G(d) (3) and (4) of the Code. For purposes of determining the
amount of the Gross-Up Payment, you 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 your 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 your employment, you shall repay
to the Company within ten (10)
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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 you if such repayment results in a
reduction in Excise Tax and/or a 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 your 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 (plus any interest payable with
respect to such excess) within ten (10) days after the time that the
amount of such excess is finally determined.
(v) The payments provided for in Subsections (iii)(b), (c), (d),
(e), (f) and (h) shall be made not later than the fifth day following the
Date of Termination; provided, however, that if the amounts of such
payments cannot be finally determined on or before such day, the Company
shall pay to you 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
Termination. In the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such excess
shall constitute a loan by the Company to you, payable on the fifth day
after demand by the Company (together with interest at the rate provided
in section 1274(b)(2)(B) of the Code).
(vi) Except as provided in Subsections (iii)(g) and (iii)(i)
hereof, you shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in this
Section 4 be reduced by any compensation earned by you as the result of
employment by another employer, by retirement benefits, by offset against
any amount claimed to be owed by you to the Company, or otherwise.
5. Successors; Binding Agreement. (i) The Company 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
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
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to perform it if no such succession had taken place. Failure of the Company to
obtain such express assumption and agreement at or prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle you to
compensation from the Company in the same amount and on the same terms to which
you would be entitled hereunder if you terminate your employment for Good Reason
following a Change in Control, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination. 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.
(ii) This Agreement shall inure to the benefit of and be enforceable
by you and your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should die while
any amount would still be payable to you hereunder had you continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to your devisee, legatee or other designee or,
if there is no such designee, to your estate.
6. Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notice to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.
7. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by you and such officer as may be specifically designated
by the Board. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the time or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of New York without regard to its conflicts of law
principles. All references to sections of the
<PAGE> 14
June 29, 1998
Page 14
Exchange Act or the Code shall be deemed also to refer to any successor
provisions to such sections. Any payments provided for hereunder shall be paid
net of any applicable withholding required under federal, state or local law.
The obligations of the Company under Section 4 shall survive the expiration of
the term of this Agreement.
8. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
9. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
10. Prior Agreement. In consideration of the benefits provided
hereunder, you agree that all prior agreements with respect to the subject
matter contained herein, made between you and The Dun & Bradstreet Corporation
have become null and void and of no force or effect.
11. Entire Agreement. This Agreement sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein and
during the term of this Agreement supersedes the provisions of all prior
agreements, promises, covenants, arrangements, communications, representations
or warranties, whether oral or written, by any officer, employee or
representative of any party hereto with respect to the subject matter contained
herein.
If this letter sets forth our agreement on the subject matter
hereof, kindly sign and return to the Company the enclosed copy of this letter,
which will then constitute our agreement on this subject.
Sincerely,
THE NEW DUN & BRADSTREET
CORPORATION
BY____________________________________
Nancy L. Henry
Senior Vice President
and Chief Legal Counsel
<PAGE> 15
June 29, 1998
Page 15
Agreed to this _____ day of _______________, 1998.
_____________________________
[NAME]
<PAGE> 16
[MASTER 3X]
PRIOR AGREEMENTS
June 29, 1998
PERSONAL AND CONFIDENTIAL
[NAME]
[ADDRESS]
[ADDRESS]
Dear [FIRST_NAME]:
The New Dun & Bradstreet Corporation, to be renamed "The Dun &
Bradstreet Corporation" after the shares of common stock of the New Dun &
Bradstreet Corporation are distributed to the shareholders of The Dun &
Bradstreet Corporation, (the "Company") considers it essential to the best
interests of its shareholders to foster the continued employment of key
management personnel. In this connection, the Board of Directors of the Company
(the "Board") recognizes that, as is the case with many publicly held
corporations, the possibility of a "Change in Control" (as such term is defined
in Section 2) may exist and that such possibility, and the uncertainty and
questions which it may raise among management, may result in the departure or
distraction of key management personnel to the detriment of the Company and its
shareholders.
The Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of key members of
the Company's management, including yourself, to their assigned duties without
distraction in the face of potentially disturbing circumstances arising from the
possibility of a Change in Control.
In order to induce you to remain in the employ of the Company, the
Company agrees that you shall receive the severance benefits set forth in this
letter agreement (the "Agreement") in the event your employment with the Company
is terminated under the circumstances described below subsequent to a Change in
Control. No provision of this letter agreement shall be effective for any
purpose whatsoever except upon the occurrence of either a "Potential Change in
Control" (as such term is defined in Section 2) or a Change in Control. This
letter
<PAGE> 17
June 29, 1998
Page 2
agreement supersedes any previous letter agreement(s) between you and the
Company relating to this subject matter.
1. Term of Agreement. This Agreement shall commence on June 29,
1998, and shall continue in effect through December 31, 2000; provided, however,
that commencing on January 1, 2001, and each January 1 thereafter, the term of
this Agreement shall automatically be extended for one additional year unless,
not later than September 30th of the preceding year, the Company or you shall
have given notice to the other that it or you, respectively, does not wish to
extend this Agreement, provided, however, that no such notice shall be effective
if a Change in Control or Potential Change in Control shall have occurred prior
to the date of such notice; and provided, further, that if a Change in Control
shall have occurred during the original or extended term of this Agreement, this
Agreement shall continue in effect for a period of not less than twenty-four
(24) months beyond the month in which such Change in Control occurred.
2. Change in Control; Potential Change in Control. (i) No benefits
shall be payable hereunder unless there shall have been a Change in Control, as
set forth below. For purposes of this Agreement, a "Change in Control" shall be
deemed to have occurred if
(a) any "Person", as such term is used in Sections 13(d) and 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 shareholders of the Company in
substantially the same proportions as their ownership of stock of the
Company), is or 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;
(b) during any period of twenty-four months (not including any
period prior to the execution of this Agreement), individuals who at the
beginning of such period constitute the Board, and any new director (other
than (1) a director designated by a person who has entered into an
agreement with the Company to effect a transaction described in clause
(a), (c) or (d) of this Section, (2) a director designated 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 (3) a director designated 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
<PAGE> 18
June 29, 1998
Page 3
securities) whose election by the Board or nomination for election by the
Company's shareholders was approved 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;
(c) the shareholders of the Company approve a merger or
consolidation of the Company with any other company, other than (1) a
merger or consolidation 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 50% of the combined voting
power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation and (2) 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; or
(d) the shareholders 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.
(ii) For purposes of this Agreement, a "Potential Change in Control"
shall be deemed to have occurred if:
(a) the Company enters into an agreement, the consummation of which
would result in the occurrence of a Change in Control;
(b) 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;
(c) the Board adopts a resolution to the effect that, for purposes
of this Agreement, a Potential Change in Control has occurred.
(iii) You agree that, subject to the terms and conditions of this
Agreement, in the event of a Potential Change in Control, you will remain in the
employ of the Company until the earliest of (a) a date which is 180 days from
the occurrence of such Potential Change in Control, (b) the termination by you
of your employment by reason of Disability as defined in Subsection 3(ii), or
(c) the date on which you first become entitled under this Agreement to receive
the benefits provided in Section 4(iii) below.
<PAGE> 19
June 29, 1998
Page 4
3. Termination Following Change in Control. (i) General. If any of
the events described in Section 2 constituting a Change in Control shall have
occurred, you shall be entitled to the benefits provided in Section 4(iii) upon
the subsequent termination of your employment during the term of this Agreement
unless such termination is (a) because of your death or Disability, (b) by the
Company for Cause, or (c) by you other than for Good Reason. If your employment
with the Company is terminated prior to a Change in Control at the request of a
Person engaging in a transaction or series of transactions that would result in
a Change in Control, the twenty-four month period set forth in Section 1 of this
Agreement will commence upon the subsequent occurrence of a Change in Control,
your actual termination shall be deemed a termination occurring during such
twenty-four month period and covered by Section 3 of this Agreement, your Date
of Termination shall be deemed to have occurred immediately following the Change
in Control, and Notice of Termination shall have been deemed to have been given
by the Company immediately prior to your actual termination.
(ii) Disability. If, as a result of your incapacity due to physical
or mental illness or disability, you shall have been absent from the full-time
performance of your duties with the Company for six (6) consecutive months, and
within thirty (30) days after written notice of termination is thereafter given
you shall not have returned to the full-time performance of your duties, your
employment may be terminated for "Disability".
(iii) Cause. Termination by the Company of your employment for
"Cause" shall mean termination: (a) upon the willful and continued failure by
you to substantially perform your duties with the Company (other than any such
failure resulting from your incapacity due to physical or mental illness or any
such actual or anticipated failure after the issuance of a Notice of Termination
(as defined in Subsection 3(v)) by you for Good Reason (as defined in Subsection
3(iv)), after a written demand for substantial performance is delivered to you
by the Board, which demand specifically identifies the manner in which the Board
believes that you have not substantially performed your duties; (b) upon the
willful engaging by you in conduct which is demonstrably and materially
injurious to the Company, monetarily or otherwise; or (c) upon your conviction
of a felony. For purposes of this Subsection, no act, or failure to act, on your
part shall be deemed "willful" unless done, or omitted to be done, by you not in
good faith and without reasonable belief that your action or omission was in the
best interest of the Company. Notwithstanding the foregoing, you shall not be
deemed to have been terminated for Cause unless and until there shall have been
delivered to you a copy of a 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 you and an opportunity for you,
together with your counsel, to be heard before the Board), finding that in
<PAGE> 20
June 29, 1998
Page 5
the good faith opinion of the Board you were guilty of conduct set forth above
in this Subsection and specifying the particulars thereof in detail.
(iv) Good Reason. You shall be entitled to terminate your employment
for Good Reason. For purposes of this Agreement, "Good Reason" shall mean
without your express written consent, the occurrence after a Change in Control
of any of the following circumstances unless, in the case of paragraphs (a),
(e), (f), (g) or (h), such circumstances are fully corrected prior to the Date
of Termination (as defined in Section 3(vi)) specified in the Notice of
Termination (as defined in Section 3(v)) given in respect thereof:
(a) the assignment to you of any duties inconsistent with the
position in the Company that you held immediately prior to the Change in
Control, or an adverse alteration in the nature or status of your
responsibilities or the conditions of your employment from those in effect
immediately prior to such Change in Control;
(b) a reduction by the Company in your annual base salary and/or
guideline bonus and/or perquisites as in effect on the date hereof or as
the same may be increased from time to time except for across-the-board
perquisites reductions similarly affecting all management personnel of the
Company and all management personnel of any Person in control of the
Company;
(c) the relocation of the Company's offices at which you are
principally employed immediately prior to the date of the Change in
Control to a location more than thirty-five (35) miles from such location,
except for required travel on the Company's business to an extent
substantially consistent with your business travel obligations prior to
the Change in Control; provided, however, that a relocation of the
Company's offices at which you are principally employed immediately prior
to the date of the Change in Control to New York City shall not constitute
"Good Reason" for purposes of this Agreement;
(d) the failure by the Company to pay to you any portion of your
compensation or to pay to you any portion of an installment of deferred
compensation under any deferred compensation program of the Company within
seven (7) days of the date such compensation is due;
(e) the failure by the Company to continue in effect any material
compensation or benefit plan in which you participated immediately prior
to the 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 your
<PAGE> 21
June 29, 1998
Page 6
participation therein (or in such substitute or alternative plan) on a
basis not materially less favorable, both in terms of the amount of
benefits provided and the level of your participation relative to other
participants, as existed at the time of the Change in Control;
(f) the failure by the Company to continue to provide you with
benefits substantially similar to those enjoyed by you under any of the
Company's life insurance, medical, dental, accident, or disability plans
or perquisites in which you were participating at the time of the Change
in Control, the taking of any action by the Company which would directly
or indirectly materially reduce any of such benefits, or the failure by
the Company to provide you with the number of paid vacation days to which
you are entitled on the basis of years of service with the Company in
accordance with the Company's normal vacation policy in effect at the time
of the Change in Control;
(g) the failure of the Company to obtain a satisfactory agreement
from any successor to assume and agree to perform this Agreement, as
contemplated in Section 5 hereof; or
(h) any purported termination of your employment that is not
effected pursuant to a Notice of Termination satisfying the requirements
of Subsection (v) hereof (and, if applicable, the requirements of
Subsection (iii) hereof), which purported termination shall not be
effective for purposes of this Agreement.
Your right to terminate your employment pursuant to this Subsection shall not be
affected by your incapacity due to physical or mental illness. Your continued
employment shall not constitute consent to, or a waiver of rights with respect
to, any circumstance constituting Good Reason hereunder.
(v) Notice of Termination. Any purported termination of your
employment by the Company or by you shall be communicated by written Notice of
Termination to the other party hereto in accordance with Section 6. "Notice of
Termination" shall mean a notice that shall indicate the specific termination
provision in this Agreement relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of your
employment under the provision so indicated.
(vi) Date of Termination, Etc. "Date of Termination" shall mean (a)
if your employment is terminated for Disability, thirty (30) days after Notice
of Termination is given (provided that you shall not have returned to the
full-time performance of your duties during such thirty (30) day period), or (b)
if your employment is terminated pursuant to Subsection (iii) or (iv) hereof or
for any other reason (other than Disability), the date
<PAGE> 22
June 29, 1998
Page 7
specified in the Notice of Termination (which, in the case of a termination for
Cause shall not be less than thirty (30) days from the date such Notice of
Termination is given, and in the case of a termination for Good Reason shall not
be less than fifteen (15) nor more than sixty (60) days from the date such
Notice of Termination is given; provided, however, that if within fifteen (15)
days after any Notice of Termination is given, or, if later, prior to the Date
of Termination (as determined without regard to this proviso), the party
receiving such Notice of Termination notifies the other party that a dispute
exists concerning the termination, then the Date of Termination shall be the
date on which the dispute is finally determined, either by mutual written
agreement of the parties, by a binding arbitration award, or by a final
judgment, order or decree of a court of competent jurisdiction (which is not
appealable or with respect to which the time for appeal therefrom has expired
and no appeal has been perfected); and provided, further, that the Date of
Termination shall be extended by a notice of dispute only if such notice is
given in good faith and the party giving such notice pursues the resolution of
such dispute with reasonable diligence. Notwithstanding the pendency of any such
dispute, the Company will continue to pay you your full compensation in effect
when the notice giving rise to the dispute was given (including, but not limited
to, base salary) and continue you as a participant in all compensation, benefit
and insurance plans in which you were participating when the notice giving rise
to the dispute was given, until the dispute is finally resolved in accordance
with this Subsection. Amounts paid under this Subsection are in addition to all
other amounts due under this Agreement, and shall not be offset against or
reduce any other amounts due under this Agreement and shall not be reduced by
any compensation earned by you as the result of employment by another employer.
4. Compensation Upon Termination or During Disability. Following a
Change in Control, you shall be entitled to the following benefits during a
period of disability, or upon termination of your employment, as the case may
be, provided that such period or termination occurs during the term of this
Agreement:
(i) During any period that you fail to perform your full-time
duties with the Company as a result of incapacity due to physical or
mental illness or disability, you shall continue to receive your base
salary at the rate in effect at the commencement of any such period,
together with all compensation payable to you under the Company's
disability plan or program or other similar plan during such period, until
this Agreement is terminated pursuant to Section 3(ii) hereof. Thereafter,
or in the event your employment shall be terminated by reason of your
death, your benefits shall be determined under the Company's retirement,
insurance and other compensation programs then in effect in accordance
with the terms of such programs.
<PAGE> 23
June 29, 1998
Page 8
(ii) If your employment shall be terminated by the Company for
Cause or by you other than for Good Reason, the Company shall pay you your
full base salary through the Date of Termination at the rate in effect at
the time Notice of Termination is given, plus all other amounts to which
you are entitled under any compensation plan of the Company at the time
such payments are due, and the Company shall have no further obligations
to you under this Agreement.
(iii) If your employment by the Company should be terminated by
the Company other than for Cause or Disability or if you should terminate
your employment for Good Reason, you shall be entitled to the benefits
provided below:
(a) the Company shall pay to you your full base salary through
the Date of Termination at the rate in effect at the time Notice of
Termination is given, no later than the fifth day following the Date
of Termination, plus all other amounts to which you are entitled
under any compensation plan of the Company, at the time such
payments are due;
(b) in lieu of any further salary payments to you for periods
subsequent to the Date of Termination, the Company shall pay as
severance pay to you, at the time specified in Subsection (v), a
lump sum severance payment (in addition to the payments provided in
paragraphs (c), (d), (e), (f), (g), (h) and (i) below, the
"Severance Payments") equal to (1) 300% of the greater of (A) your
annual base salary in effect on the Date of Termination or (B) your
annual base salary in effect immediately prior to the Change in
Control, and (2) 300% of your guideline bonus with respect to the
year in which the Change in Control occurs; your annual base salary
and guideline bonus (as taken into account under the first half of
this Subsection (iii)(b)) shall count for three years additional
credited service and be included in final average earnings
calculations for participants in the Company's Retirement Account
Plan, Supplemental Executive Retirement Plan, Pension Benefit
Equalization Plan and any successor or substitute plans thereto, a
sample calculation of which appears in Exhibit A to this Agreement;
(c) in lieu of shares of common stock of the Company ("Common
Shares") issuable upon exercise of outstanding options (other than
options qualifying as incentive stock options ("ISOs") under Section
422A of the Internal Revenue Code of 1986 (the "Code") which ISOs
were granted on or before the date hereof) ("Options"), and stock
appreciation rights ("SARs"), if any, granted to you under the
Company's 1998 Replacement Plan, 1998 Key Employees' Stock Incentive
<PAGE> 24
June 29, 1998
Page 9
Plan or any successor or substitute plans thereto (except those SARs
applicable to ISOs granted on or before the date hereof) (which
Options shall be cancelled upon the making of the payment referred
to below), the Company shall pay to you, at the time specified in
Subsection (v), an amount in cash equal to the product of (1) the
excess of, in the case of an ISO granted after the date hereof, the
closing price of Common Shares as reported on the New York Stock
Exchange on or nearest the Date of Termination (or, if not listed on
such exchange, on a nationally recognized exchange or quotation
system on which trading volume in the Common Shares is highest) and,
in the case of all other Options, the higher of such closing price
or the highest per share price for Common Shares actually paid in
connection with any Change in Control, over the per share option
price of each Option held by you (whether or not then fully
exercisable), and (2) the number of Common Shares covered by each
such Option;
(d) in lieu of Common Shares issuable upon the lapse of
restrictions, if any, granted to you under the Company's 1998
Replacement Plan, 1998 Key Employees' Stock Incentive Plan or any
successor or substitute plan(s) thereto, the Company shall pay to
you, at the time specified in Subsection (v), an amount in cash
equal to the product of (1) the closing price of Common Shares as
reported on the New York Stock Exchange on or nearest the Date of
Termination (or, if not listed on such exchange, on a nationally
recognized exchange or quotation system on which trading volume in
the Common Shares is highest) or the highest per share price for
Common Shares actually paid in connection with any Change in
Control, whichever is greater (such price, the "Price"), and (2) the
number of Common Shares granted to you subject to such restrictions;
(e) (1) all outstanding performance units awarded to you under
the Company's 1998 Key Employees' Stock Incentive Plan, whether or
not vested, shall be cancelled, and you shall receive a cash payment
equal to the amount you would have earned at a 100% target award
valuation; and (2) all outstanding unrestricted stock awarded to you
under such plan, whether or not vested, shall be cancelled, and you
shall receive a cash payment equal to the product of (A) the number
of cancelled unrestricted shares and (B) the Price;
(f) the Company shall provide you with a cash allowance, at
the time specified in Subsection (v), for outplacement counseling
and job search activities in the amount of 20% of your annual salary
and guideline bonus as in effect on the Date of Termination but not
<PAGE> 25
June 29, 1998
Page 10
to exceed a maximum allowance of $100,000; and the Company shall pay
to you all legal fees and expenses incurred by you as a result of
such termination (including all such fees and expenses, if any,
incurred in contesting or disputing any such termination or in
seeking to obtain or enforce any right or benefit provided by this
Agreement or in connection with any tax audit or proceeding to the
extent attributable to the application of section 4999 of the Code
to any payment or benefit provided hereunder);
(g) for a thirty-six (36) month period after such termination,
the Company shall arrange to provide you with life and health
insurance benefits and perquisites substantially similar to those
which you were receiving immediately prior to the Notice of
Termination. Notwithstanding the foregoing, the Company shall not
provide any benefit otherwise receivable by you pursuant to this
paragraph (g) if an equivalent benefit is actually received by you
during the thirty-six (36) month period following your termination,
and any such benefit actually received by you shall be reported to
the Company;
(h) at the time specified in Subsection (v), the Company shall
pay to you, in lieu of amounts which may otherwise be payable to you
under any bonus plan (a "Bonus Plan"), an amount in cash equal to
(1) your annual target bonus for the year in which the Change in
Control occurs, multiplied by a fraction, (A) the numerator of which
equals the number of full or partial days in such annual performance
period during which you were employed by the Company and (B) the
denominator of which is 365, and (2) the entire target bonus
opportunity with respect to each performance period in progress
under all other Bonus Plans in effect at the time of termination;
and
(i) starting at age 55, you shall receive retiree medical and
life benefits from the Company. Such benefits shall be no less
favorable than the benefits that you would have received had you, at
the time Notice of Termination is given, both (1) attained age 55
and (2) retired from the Company. Notwithstanding the foregoing, any
benefit described in the preceding sentence shall constitute
secondary coverage with respect to retiree medical and life benefits
actually received by you in connection with any subsequent
employment (or self-employment) following your termination.
(iv) In the event that you become entitled to the Severance
Payments, if any of the Severance Payments will be
<PAGE> 26
June 29, 1998
Page 11
subject to the tax (the "Excise Tax") imposed by section 4999 of the Code,
(or any similar federal, state or local tax that may hereafter be
imposed), the Company shall pay to you at the time specified in Subsection
(v) below, an additional amount (the "Gross-Up Payment") such that the net
amount retained by you, after deduction of any Excise Tax on the Total
Payments (as hereinafter defined) and any federal, state and local income
tax and Excise Tax upon the payment provided for by this subsection, shall
be equal to the Total Payments. 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 you in connection with a Change in Control or your 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) shall be
treated as subject to the Excise Tax, unless in the opinion of tax counsel
selected by the Company's independent auditors and acceptable to you 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 (1) the total amount of the Total Payments and (2)
the amount of excess parachute payments within the meaning of section
280G(b)(1) (after applying clause (a), above), and (c) the value of any
non-cash benefits or any deferred payments or benefit shall be determined
by the Company's independent auditors in accordance with the principles of
sections 280G(d) (3) and (4) of the Code. For purposes of determining the
amount of the Gross-Up Payment, you 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 your 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 your employment, you shall repay
to the Company within ten (10)
<PAGE> 27
June 29, 1998
Page 12
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 you if such repayment results in a
reduction in Excise Tax and/or a 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 your 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 (plus any interest payable with
respect to such excess) within ten (10) days after the time that the
amount of such excess is finally determined.
(v) The payments provided for in Subsections (iii)(b), (c), (d),
(e), (f) and (h) shall be made not later than the fifth day following the
Date of Termination; provided, however, that if the amounts of such
payments cannot be finally determined on or before such day, the Company
shall pay to you 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
Termination. In the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such excess
shall constitute a loan by the Company to you, payable on the fifth day
after demand by the Company (together with interest at the rate provided
in section 1274(b)(2)(B) of the Code).
(vi) Except as provided in Subsections (iii)(g) and (iii)(i)
hereof, you shall not be required to mitigate the amount of any payment
provided for in this Section 4 by seeking other employment or otherwise,
nor shall the amount of any payment or benefit provided for in this
Section 4 be reduced by any compensation earned by you as the result of
employment by another employer, by retirement benefits, by offset against
any amount claimed to be owed by you to the Company, or otherwise.
5. Successors; Binding Agreement. (i) The Company 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
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
<PAGE> 28
June 29, 1998
Page 13
to perform it if no such succession had taken place. Failure of the Company to
obtain such express assumption and agreement at or prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle you to
compensation from the Company in the same amount and on the same terms to which
you would be entitled hereunder if you terminate your employment for Good Reason
following a Change in Control, except that for purposes of implementing the
foregoing, the date on which any such succession becomes effective shall be
deemed the Date of Termination. 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.
(ii) This Agreement shall inure to the benefit of and be enforceable
by you and your personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If you should die while
any amount would still be payable to you hereunder had you continued to live,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to your devisee, legatee or other designee or,
if there is no such designee, to your estate.
6. Notice. For the purpose of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
certified or registered mail, return receipt requested, postage prepaid,
addressed to the respective addresses set forth on the first page of this
Agreement, provided that all notice to the Company shall be directed to the
attention of the Board with a copy to the Secretary of the Company, or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be effective
only upon receipt.
7. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is agreed to
in writing and signed by you and such officer as may be specifically designated
by the Board. No waiver by either party hereto at any time of any breach by the
other party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the time or at any prior or
subsequent time. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of New York without regard to its conflicts of law
principles. All references to sections of the
<PAGE> 29
June 29, 1998
Page 14
Exchange Act or the Code shall be deemed also to refer to any successor
provisions to such sections. Any payments provided for hereunder shall be paid
net of any applicable withholding required under federal, state or local law.
The obligations of the Company under Section 4 shall survive the expiration of
the term of this Agreement.
8. Validity. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provision of this Agreement, which shall remain in full force and effect.
9. Counterparts. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same instrument.
10. Prior Agreement. In consideration of the benefits provided
hereunder, you agree that all prior agreements with respect to the subject
matter contained herein, made between you and The Dun & Bradstreet Corporation
have become null and void and of no force or effect
11. Entire Agreement. This Agreement sets forth the entire agreement
of the parties hereto in respect of the subject matter contained herein and
during the term of this Agreement supersedes the provisions of all prior
agreements, promises, covenants, arrangements, communications, representations
or warranties, whether oral or written, by any officer, employee or
representative of any party hereto with respect to the subject matter contained
herein.
If this letter sets forth our agreement on the subject matter
hereof, kindly sign and return to the Company the enclosed copy of this letter,
which will then constitute our agreement on this subject.
Sincerely,
THE NEW DUN & BRADSTREET
CORPORATION
BY _____________________________________
Nancy L. Henry
Senior Vice President
and Chief Legal Counsel
<PAGE> 30
June 29, 1998
Page 15
Agreed to this _____ day of _______________, 1998.
_______________________________
[NAME]