Employment Agreement - The Dun & Bradstreet Corp. and Allan Z. Loren
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement") dated May 15, 2000, by
and between The Dun & Bradstreet Corporation (the "Company") and Allan Z. Loren
("Executive").
WITNESSETH:
WHEREAS, the Company desires to employ Executive and to enter into an agreement
embodying the terms of such employment;
WHEREAS, Executive desires to accept such employment and enter
into such an agreement;
NOW THEREFORE, in consideration of the premises and mutual
covenants herein and for other good and valuable consideration, the parties
agree as follows:
1. Term of Employment. Executive shall be employed by the
Company for a period commencing on May 30, 2000 (the "Commencement Date") and
ending on May 30, 2003 (the "Employment Term") on the terms and subject to the
conditions set forth in this Agreement. The Company and Executive will use
reasonable business efforts to determine prior to December 31, 2002, whether
they wish to extend this Agreement, enter into a new employment agreement on
such terms and conditions as are mutually agreed by the parties or permit the
Employment Term to expire.
2. Position and Location.
a. Effective on the Commencement Date, Executive
shall serve as the Chairman and Chief Executive Officer of Dun & Bradstreet,
Inc. ("D&B Inc.") and shall be appointed to serve as a member of the board
of directors of the Company without additional compensation. Following the
proposed spin-off of The New D&B Corporation ("New D&B") from the Company
(the "Spinoff"), Executive shall serve as the Chief Executive Officer of New
D&B and shall be appointed as the Chairman of the board of directors of New D&B.
At all times, Executive shall have such duties and authority as are commensurate
with his then position. Prior to the Spinoff, Executive shall report only to
the Chief Executive Officer of the Company and after the Spinoff Executive
shall report only to the Board of Directors of New D&B. As used in this
Agreement, the term "Board" shall mean the board of directors of the Company
prior to the Spinoff and the board of directors of New D&B following the
Spinoff.
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b. During the Employment Term, Executive will
devote substantially all of Executive's business time and efforts to the
performance of Executive's duties hereunder and, except as provided in the
next sentence, will not engage in any other business, profession or occupation
for compensation or otherwise, without the prior written consent of the Board
or, prior to the Spinoff, the Chief Executive Officer of the Company. Nothing
herein shall preclude Executive from accepting appointment to civic
or charitable directorships or trusteeships, or otherwise being involved in
charitable activities or managing his personal and family passive investments;
provided in each case, and in the aggregate, that such activities do not
materially conflict or interfere with the performance of Executive's duties
hereunder or conflict with Section 9. Executive may continue to serve as a
director or trustee on the organizations in which he currently serves and which
are identified on Exhibit A hereto.
c. Unless otherwise mutually agreed by the
parties, Executive's principal offices shall be located at the Company's
headquarters in Murray Hill, New Jersey.
3. Base Salary. The Company shall pay Executive a base salary
at the annual rate of $700,000, as may be increased (but not decreased) from
time to time (the "Base Salary"), payable in regular installments in accordance
with the Company's usual payment practices. Executive shall be entitled to such
increases in Executive's Base Salary, if any, as may be determined from time to
time in the sole discretion of the Board. The Board shall review Executive's
Base Salary for fiscal year 2001 during or before January 2001.
4. Bonus.
a. Sign-On Bonus. Subject to Executive's
continued employment with the Company, Executive shall receive (i) a sign-on
bonus equal to $700,000 on January 2, 2001; provided, however, that such bonus
shall be reduced by the lesser of (A) $291,667 and (B) the amount of any
annual bonus that Executive receives from the American Express Company, or its
subsidiaries (such reduction, the "Prior Bonus"); provided, further, that,
if the Prior Bonus has not been determined prior to January 2, 2001, Executive
shall receive $700,000 on January 2, 2001 and shall reimburse the Company in
an amount equal to the Prior Bonus within ten (10) days after the receipt of
such bonus and (ii) a sign-on bonus equal to $700,000 on January 2, 2002.
b. Annual Bonus. With respect to each fiscal
year during the Employment Term, pursuant to the Company's Covered Employee Cash
Incentive Plan (or any successor thereto), Executive shall be eligible to earn
an annual bonus award (an "Annual Bonus") based on the achievement of such goals
and performance measures (including financial and employee satisfaction goals)
as may be established by the compensation committee of the Board (the
"Committee"). The maximum Annual Bonus for fiscal year ending December 31,
2000 and fiscal year ending December 31, 2001 shall be 100% of Base Salary.
The target Annual Bonus for each fiscal year following the fiscal year ending
December 31, 2001 shall be 100% of Base Salary, with a maximum Annual Bonus of
200% of Base Salary.
5. Equity Arrangements.
a. Initial Equity Awards. Effective as of the
Commencement Date, Executive shall be awarded an initial one-time grant
(the "Initial Grant"), under the 1998 Dun & Bradstreet Corporation Key
Employees' Stock Incentive Plan (the "Incentive Plan"), of (i) a stock option
to purchase 500,000 shares of common stock of the Company (the "Option"),
as well as a tandem limited stock appreciation right in connection with the
Option and (ii) 75,000 restricted shares of common stock of the Company (the
"Restricted Stock"). The shares subject to the Option and the Restricted
Stock shall vest on the third anniversary of the Commencement Date, subject
to Executive's continued employment, or earlier as provided herein. If
Executive's employment terminates due to death, Disability, by the Company
without Cause or Executive's resignation for Good Reason or there is a Change
in Control (as defined in the Incentive Plan), all Options and Restricted Stock
shall immediately vest (to the extent not then vested). The Company further
agrees that upon such event (or, if the event is a Change in Control, the
termination of Executive's employment thereafter) or if Executive's employment
shall terminate for any reason (including expiration of the Employment Term)
other than death or by the Company for Cause on or after May 30, 2003, such
termination shall be deemed to be a "Retirement" within the meaning of the
Incentive Plan. Accordingly, Executive shall have the additional period of
time set forth in Section 7(f) of the Incentive Plan in which to exercise the
Option. The exercise price of the Option shall be the Fair Market Value (as
defined in the Incentive Plan) of the shares of common stock of the Company
(the "Shares") on the Commencement Date and shall have a ten (10)-year term.
(i) As of the Spinoff, (i) the Option shall be cancelled and (ii)
Executive shall receive a replacement stock option (the "Replacement Option")
for the purchase of shares of common stock of New D&B only (the "New D&B
Shares"). The number of New D&B Shares covered by the Replacement Option shall
be determined by (i) multiplying the number of Shares covered by the cancelled
Option by a fraction, the numerator of which equals the price of a Share as of
the last trade on the New York Stock Exchange ("NYSE"), immediately prior to the
Spinoff (the "Share Price"), and the denominator of which equals the price of a
New D&B Share as of the last trade on the NYSE or NASDAQ, as the case may be, on
a "when issued" basis on the last trading day immediately prior to the Spinoff
(the "New D&B Price") (such fraction, the "New D&B Ratio") and (ii) rounding
down the result to a whole number of shares. The exercise price of the
Replacement Option shall be determined by multiplying the exercise price of the
cancelled Option by the reciprocal of the New D&B ratio, rounded to the nearest
whole cent. All other terms of the Replacement Option shall remain substantially
identical to the terms of the cancelled Option.
(ii) As of the Spinoff, Restricted Stock and any New D&B Shares
distributed in respect of the Restricted Stock pursuant to the Spinoff
("Dividend Restricted Stock") shall be forfeited and Executive shall receive
replacement New D&B Shares of restricted stock ("New D&B Restricted Stock")
equal to the product of the number of shares of forfeited Restricted Stock
multiplied by a fraction, the numerator of which equals the Share Price, and the
denominator of which equals the New D&B Price; such replacement shares of New
D&B Restricted Stock shall have substantially identical terms as the Restricted
Stock.
b. Additional Equity Awards. Beginning in fiscal year 2001,
Executive may be entitled to annual grants of stock options as determined in the
sole discretion of the Committee; provided, however, that the Committee may
consider the Initial Grant in determining whether Executive shall receive an
annual grant of stock options with respect to fiscal year 2001. In the event
Executive's employment continues beyond the Employment Term, Executive shall be
entitled to an annual grant of 25,000 shares of restricted common stock (as
adjusted to reflect the Spinoff, stock dividends, stock splits,
recapitalizations, reorganizations and other similar events), subject to the
same terms and conditions as the Initial Equity Award of Restricted Stock but
fully vested, subject to Executive's continued employment, upon the first
anniversary of the date of grant, or earlier upon his death, Disability,
resignation for Good Reason, termination by the Company without Cause or
expiration of his employment term as set forth in any written employment
agreement with the Company. At the time of the Spinoff, the Board will review
Executive's equity package to insure general compliance with the spirit of the
original agreement.
6. Employee Benefits. During the Employment Term, Executive
shall be entitled to participate in the Company's employee benefit plans as in
effect from time to time (other than the Executive Transition Plan and the
Career Transition Plan) (collectively, "Employee Benefits"), on the same basis
as those benefits are generally made available to other senior executives of the
Company, including, but not limited to, participation in The Dun & Bradstreet
Corporation Retirement Account, the Pension Benefit Equalization Plan of The Dun
& Bradstreet Corporation and the Supplemental Executive Benefit Plan of The Dun
& Bradstreet Corporation and any successor plans thereto. Notwithstanding the
foregoing, when Executive's employment terminates (other than a termination of
employment by the Company for Cause or due to Executive's resignation without
Good Reason prior to May 30, 2003), Executive shall (i) become fully vested in
the Supplemental Executive Benefit Plan and (ii) be entitled to retiree medical,
dental and life insurance benefits coverage (notwithstanding any failure to
satisfy any age or service requirements) under the Company plans, as provided to
other retired executives of the Company (secondary to any other medical or
dental coverage Executive receives following termination of employment) (the
"Welfare Benefits").
7. Business Expenses and Perquisites.
a. Expenses. During the Employment Term,
reasonable business expenses incurred by Executive in the performance of
Executive's duties hereunder shall be reimbursed by the Company in accordance
with Company policies.
b. Perquisites. The Company shall reimburse
Executive for expenses incurred in relocating to the New Jersey area in
accordance with the Company's relocation policy, including, without limitation,
any portion of the $200,000 deposit (on a net no after tax cost basis) on
Executive's New York condominium that Executive is required to forfeit
as a result of such relocation. In connection with such relocation, the
Company shall reimburse Executive (on a net no after tax cost basis) for
temporary housing for up to six (6) months, subject to extension as determined
by the Committee in good faith if the Spinoff is delayed. During the Employment
Term, the Company shall lease Executive an automobile, pay the maintenance
and insurance expenses associated with such automobile and reimburse Executive
for business mileage in accordance with Company policy.
8. Termination.
a. By the Company for Cause, Death or Disability
or By Executive's Voluntary Resignation Without Good Reason.
(i) The Employment Term and Executive's employment
hereunder may be terminated by the Company for Cause, death or Disability and
shall terminate automatically upon Executive's resignation without Good Reason.
(ii) For purposes of this Agreement, "Cause" shall
mean (A) willful malfeasance or willful misconduct by Executive in
connection with his employment, resulting, in either case, in a significant
and demonstrable injury to the Company, (B) willful continuing failure of
Executive to perform his material duties under this Agreement after written
notice of his failure to so perform (other than as a result of physical or
mental incapacity); provided that clause (B) is intended to be based on the
efforts of Executive, not the quality of the services performed, (C)
Executive's conviction of, or pleading nolo contendere to, a felony (other
than a traffic infraction or as a result of vicarious liability) or (D)
Executive's material willful and knowing breach of the Agreement that remains
uncured for a period of ten (10) business days following Executive's receipt
of written notice from the Company describing such breach. For the purposes of
this Agreement, no act, or failure to act, on Executive's part shall be
considered "willful" unless done or omitted to be done, by him not in good
faith and without reasonable belief that his action or omission was in the best
interests of the Company. Notice of Termination for Cause shall be required
to include a copy of a resolution duly adopted by at least two-thirds (2/3)
of the entire membership of the Board (other than Executive) at a meeting
of the Board which was called for the purpose of considering such termination
and which Executive and his representative had the right to attend and address
the Board, finding that, in the good faith determination of the Board,
Executive engaged in conduct set forth in the definition of Cause herein and
specifying the particulars thereof in reasonable detail. The date of termination
for a termination for Cause shall be the date indicated in the Notice of
Termination. Any purported termination for Cause which is held by a court not
to have been based on the grounds set forth in this Agreement or not to have
followed the procedures set forth in this Agreement shall be deemed a
termination by the Company without Cause. No event described in this Section
8(a)(ii) shall constitute Cause under this Agreement if the Company has not
provided Executive with a Notice of Termination within ninety (90) days
following the date the chairman of the audit committee of the Company first
becomes aware of Executive engaging in conduct constituting Cause.
(iii) For purposes of this Agreement, "Disability"
shall mean Executive's inability to perform his material duties for a period
of at least six (6) consecutive months or an aggregate of nine (9) months in any
twenty-four (24) month period as a result of a physical or mental incapacity.
The Company may terminate Executive due to Disability on thirty (30) days
prior written notice given during the period Executive is unable to perform
his material duties as a result of a physical or mental incapacity; provided,
that Executive has not returned to the performance of his material duties prior
to the end of the applicable six (6) month or nine (9) month period described
above.
(iv) For purposes of the Agreement, "Good Reason"
shall mean (A) diminution of Executive's then title, (B) material diminution of
Executive's then duties, responsibilities, authority or reporting lines, (C)
the assignment to Executive of duties not commensurate with his then position,
(D) the Spinoff not occurring prior to March 31, 2001, (E) relocation of
Executive's principal office by more than thirty-five (35) miles, (F) failure
to appoint Executive to the Board or any removal of him therefrom or non
re-election of him thereto, (G) any material willful and knowing breach of
the Agreement by the Company (including but not limited to under Section
13(e) hereof) or Section 5(i) of Executive's Change in Control Agreement;
provided that none of the events described in clauses (B), (C) or (G)
shall constitute Good Reason unless Executive shall have notified the Company
in writing describing the events which constitute Good Reason and then only if
the Company shall have failed to cure such event within ten (10) business days
after the Company's receipt of such written notice. No event described in this
Section 8(a)(iv) shall constitute Good Reason under this Agreement if Executive
has not provided the Company with a Notice of Termination within ninety (90)
days following the date Executive first becomes aware of such event constituting
Good Reason.
(v) If Executive's employment is terminated by the
Company for Cause, death or Disability or if Executive resigns without Good
Reason after giving the Company ten (10) business days advance written
notice of such resignation, Executive shall be entitled to receive the following
benefits:
(A) the Base Salary through the date of
termination;
(B) any Sign-On or Annual Bonus earned but unpaid as
of the date of termination for any previously completed fiscal
year;
(C) reimbursement for any unreimbursed business
expenses incurred by Executive in accordance with Company
policy prior to the date of Executive's termination;
(D) such Employee Benefits, if any, as to which
Executive may be legally entitled under the employee benefit
plans and equity plans of the Company (including, in the event
of a termination other than (i) by the Company for Cause or
(ii) by Executive without Good Reason prior to May 30, 2003,
the Welfare Benefits) (the amounts described in clauses (A)
through (D) hereof being referred to as the "Accrued Rights");
(E) In the case of death or Disability, full vesting
of the Options, the Restricted Stock and any other equity
awards or grants; and
(F) In the case of death or Disability, an amount
equal to $700,000 multiplied by a fraction, the numerator of
which is the number of days during the fiscal year of
termination that Executive was employed by the Company with
Executive being deemed to be employed as of January 1, 2000
and the denominator of which is 365; provided, however, that,
if such termination occurs during fiscal year 2000, such
amount shall be reduced by the Prior Bonus (the "Pro Rata
Bonus").
Following such termination of Executive's employment by the
Company for Cause, death or Disability or resignation by Executive without Good
Reason, except as set forth in this Section 8(a)(v), Executive shall have no
further rights to any compensation or any other benefits under this Agreement or
any other severance plan, severance policy or severance arrangement of the
Company or its affiliates, except as provided in this Agreement.
b. By the Company Without Cause or Resignation
by Executive for Good Reason.
(i) The Employment Term and Executive's employment
hereunder may be terminated by the Company without Cause or by Executive's
resignation for Good Reason.
(ii) If Executive's employment is terminated by the
Company without Cause (other than by reason of death or Disability) or pursuant
to a resignation by Executive for Good Reason, Executive shall be entitled to:
(A) receive the Accrued Rights;
(B) receive, subject to Executive's continued
compliance with the provisions of Sections 9 and 10, (i)
continued payment of the Base Salary until the expiration of
the Employment Term determined as if such termination had not
occurred and (ii) to the extent not previously received, (A)
the Sign-On Bonuses and (B) Annual Bonuses equal to $700,000
for the fiscal year ending December 31, 2002 and $290,000 for
the fiscal year ending December 31, 2003, payable in a lump
sum when such Bonuses would otherwise have been paid if
Executive continued employment with the Company for the
remainder of the Employment Term; provided that the amount
received under this Section B shall in no event be less than
one (1) year's Base Salary plus $700,000;
(C) full vesting of the Option, the Restricted Stock
and all other equity awards or grants, with the right of
Executive to exercise the Option during the shorter of (i) the
remaining stated term of the Option or (ii) five years after
the date of such termination of employment; and
(D) an accrued benefit in the Supplemental Executive
Benefit Plan determined as if Executive's employment continued
for the remainder of the Employment Term and Executive
received the Bonuses described in Section 8(b)(ii)(B)(ii).
Following Executive's termination of employment by the Company
without Cause (other than by reason of Executive's death or Disability) or by
Executive's resignation for Good Reason, except as set forth in this Section
8(b)(ii), Executive shall have no further rights to any compensation or any
other benefits under this Agreement or any other severance plan, severance
policy or severance arrangement of the Company or its affiliates, except as
provided in this Agreement.
c. Termination Following a Change in Control.
Notwithstanding Section 8(a) and 8(b), Executive and the Company shall
execute a Change in Control Agreement, attached hereto as Exhibit B, which shall
provide, pursuant to the terms of the Change in Control Agreement, Executive
severance benefits in the event Executive is terminated by the Company without
Cause (as defined in the Change in Control Agreement) or Executive resigns
with Good Reason (as defined in the Change in Control Agreement) following, or
in connection with, a Change in Control (as defined in the Change in Control
Agreement) of the Company.
d. Expiration of the Employment Term.
(i) If, as of May 30, 2003, Executive and the
Company have not mutually agreed to extend the Employment Term or the Company
and Executive have not entered into a new employment agreement, the Employment
Term and Executive's employment with the Company shall terminate on May 30, 2003
and such termination shall not be considered a termination by the Company
without Cause or a resignation by Executive with Good Reason.
(ii) If, as of May 30, 2003, Executive and the
Company have not mutually agreed to extend the Employment Term or the Company
and Executive have not entered into a new employment agreement, Executive shall
be entitled to: (A) receive the Accrued Rights; (B) receive the Pro Rata Bonus;
(C) exercise the Option for the period provided in Section 5(a) of this
Agreement and (D) participate in the Welfare Plans.
Following Executive's termination of employment pursuant to
this Section 8(d), Executive shall have no further rights to any compensation or
any other benefits under this Agreement or any other severance plan, severance
policy or severance arrangement of the Company or its affiliates, except as
provided in this Agreement.
e. Notice of Termination. Any purported
termination of employment by the Company or by Executive (other than due to
Executive's death) before the expiration of the Employment Term shall be
communicated by written Notice of Termination to the other party hereto in
accordance with Section 13(g) hereof. For purposes of this Agreement, a "Notice
of Termination" shall mean a notice which shall indicate the specific
termination provision relied upon and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of
employment under the provision so indicated.
f. Board Resignation. Upon termination of
Executive's employment for any reason, Executive agrees to resign, as of the
date of such termination and to the extent applicable, from the Board and
the Board of Directors of any of the Company's affiliates.
g. No Mitigation. Executive shall not be
required to mitigate any severance payments due hereunder and the severance
shall not be reduced by any amounts otherwise earned by Executive. The amounts
due hereunder shall be paid without offset, counterclaim, or defense.
9. Non-Competition.
a. Executive acknowledges and recognizes the
highly competitive nature of the businesses of D&B Inc. and New D&B and their
subsidiaries (collectively, "D&B") and accordingly agrees as follows:
(1) During the Employment Term and, for a period of
one year following the date Executive ceases to be employed by the
Company (the "Restricted Period"), Executive will not directly or indirectly,
(i) engage in any business that materially competes with the business of D&B
(including, without limitation, businesses which D&B have specific plans to
conduct in the future and as to which Executive is aware of such planning),
(ii) enter the employ of, or render any services to, any person or entity
engaged in any business that materially competes with the business of D&B in
the portions of the business so competing, (iii) acquire a financial interest
in, or otherwise become actively involved with, any person or entity engaged in
any business that materially competes with the business of D&B, directly or
indirectly, as an individual, partner, shareholder, officer, director,
principal, agent, trustee or consultant, or (iv) interfere with, or attempt to
interfere with, business relationships (whether formed before or after the
date of this Agreement) between D&B and customers, clients, suppliers, partners,
members or investors of D&B.
(2) Notwithstanding anything to the contrary in this
Agreement, Executive may directly or indirectly own, solely as an investment,
securities of any person or entity engaged in the business of D&B which are
publicly traded on a national or regional stock exchange or on the over-the-
counter market or are owned through a mutual fund, private equity fund or
other pooled account if Executive (i) is not a controlling person of, or a
member of a group which controls, such person or entity and (ii) does not,
directly or indirectly, own 3% or more of any class of securities of such person
or entity. Furthermore, the limitations in (1) shall not apply to either
American Express nor to serving as a director of an entity if less than ten
percent of such entity's revenues (measured by the last fiscal year of the
entity ending prior to the date Executive accepts such a role) are from
materially competitive activities, subject to the Board's (or the Company's
Chief Executive Officer, as the case may be) approval during the Employment
Term as provided in Section 2(b) hereof.
(3) During the Restricted Period, except in
performance of his duties hereunder, Executive will not, directly or indirectly,
(i) solicit or encourage any employee of D&B to leave the employment of D&B, or
(ii) hire any such employee who was employed by D&B as of the date of
Executive's termination of employment with the Company or who left the
employment of D&B within one (1) year prior to or after the termination of
Executive's employment hereunder. This restriction shall not be violated by
general advertising or by serving as a reference.
(4) During the Restricted Period, Executive will not,
directly or indirectly, solicit or encourage to cease to work with D&B any
consultant then under contract with D&B. This restriction shall not be
violated by general advertising or by serving as a reference.
b. It is expressly understood and agreed that
although Executive and the Company consider the restrictions contained in this
Section 9 to be reasonable, if a final judicial determination is made by a
court of competent jurisdiction that the time or territory or any other
restriction contained in this Agreement is an unenforceable restriction against
Executive, the provisions of this Agreement shall not be rendered void but shall
be deemed amended to apply as to such maximum time and territory and to such
maximum extent as such court may judicially determine or indicate to be
enforceable. Alternatively, if any court of competent jurisdiction finds that
any restriction contained in this Agreement is unenforceable, and such
restriction cannot be amended so as to make it enforceable, such finding
shall not affect the enforceability of any of the other restrictions contained
herein.
10. Confidentiality. Executive will not at any time (whether
during or after Executive's employment with the Company) disclose or use for
Executive's own benefit or purposes or the benefit or purposes of any other
person, firm, partnership, joint venture, association, corporation or other
business organization, entity or enterprise other than the Company and any of
its subsidiaries or affiliates, any trade secrets, information, data, or other
confidential information relating to customers, development programs, costs,
marketing, trading, investment, sales activities, promotion, credit and
financial data, manufacturing processes, financing methods, plans, or the
business and affairs of the Company generally, or of any subsidiary or affiliate
of the Company, except in the performance of his duties hereunder or in
compliance with legal process; provided that the foregoing shall not apply to
information which is not unique to the Company or which is generally known to
the industry or the public other than as a result of Executive's breach of this
covenant. In the event that Executive is compelled by legal process to disclose
confidential information, he shall give prompt written notice to the Company to
allow the Company the opportunity to object to or otherwise resist such order.
Executive agrees that upon termination of Executive's employment with the
Company for any reason, he will return to the Company immediately all memoranda,
books, papers, plans, information, letters and other data, and all copies
thereof or therefrom, in any way relating to the business of the Company and its
affiliates, except that he may retain personal notes, notebooks and diaries that
do not contain confidential information of the type described in the preceding
sentence. Notwithstanding the foregoing, Executive may also retain his personal
Rolodex, telephone directories and address book; provided, that, to the extent
such personal items contain confidential information, Executive shall be bound
by the nondisclosure provisions of this Section 10. Executive further agrees
that he will not retain or use for Executive's account at any time any trade
names, trademark or other proprietary business designation used or owned in
connection with the business of the Company or its affiliates.
11. Indemnification. The Company shall indemnify and hold
harmless Executive to the fullest extent permitted by law for any action or
inaction of Executive while serving as an officer and director of the Company
or, at the Company's request, as an officer or director of any other entity or
as a fiduciary of any benefit plan. The Company shall cover Executive under
directors and officers liability insurance both during and, while potential
liability exists, after the Employment Term in the same amount and to the same
extent as the Company covers its other officers and directors.
12. Specific Performance. Executive acknowledges and agrees
that the Company's remedies at law for a breach or threatened breach of any of
the provisions of Section 9 or Section 10 would be inadequate and, in
recognition of this fact, Executive agrees that, in the event of such a breach
or threatened breach, in addition to any remedies at law, the Company, without
posting any bond, shall be entitled to obtain equitable relief in the form of
specific performance, temporary restraining order, temporary or permanent
injunction or any other equitable remedy which may then be available.
13. Miscellaneous.
a. Governing Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of New York,
without regard to conflicts of laws principles thereof.
b. Entire Agreement/Amendments. This Agreement
contains the entire understanding of the parties with respect to the employment
of Executive by the Company. There are no restrictions, agreements, promises,
warranties, covenants or undertakings between the parties with respect to the
subject matter herein other than those expressly set forth herein. This
Agreement may not be altered, modified, or amended except by written instrument
signed by the parties hereto.
c. No Waiver. The failure of a party to insist
upon strict adherence to any term of this Agreement on any occasion shall not be
considered a waiver of such party's rights or deprive such party of the right
thereafter to insist upon strict adherence to that term or any other term of
this Agreement.
d. Severability. In the event that any one or
more of the provisions of this Agreement shall be or become invalid,
illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions of this Agreement shall not be
affected thereby.
e. Assignment. This Agreement shall not be
assignable by Executive or the Company, except as provided herein. This
Agreement shall be assigned by the Company to New D&B simultaneously with the
Spinoff and may be assigned by the Company or New D&B to an entity which is a
successor in interest to substantially all of the business operations of the
Company or New D&B. Upon such assignment, the rights and obligations of the
Company hereunder shall become the rights and obligations of New D&B or such
successor entity, but, except with regard to an assignment from the Company
to New D&B, the assignor shall not be released hereunder and any such assignee,
including but not limited to New D&B, shall promptly deliver to Executive a
written assumption in a form reasonably acceptable to Executive.
f. Successors; Binding Agreement. This
Agreement shall inure to the benefit of and be binding upon personal or legal
representatives, executors, administrators, successors, heirs, distributes,
devises and legatees.
g. Notice. For the purpose of this Agreement,
notices and all other communications provided for in the Agreement shall be in
writing and shall be deemed to have been duly given when delivered by hand or
overnight courier or three days after it has been mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to the
respective addresses set forth below, 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.
<PAGE>
If to the Company:
The Dun & Bradstreet Corporation
One Diamond Hill Road
Murray Hill, NJ 07974-1218
Attention: Senior Vice President and Business Affairs Officer
If to Executive:
To the most recent address of Executive set forth in the personnel
records of the Company.
h. Legal Fees. The Company shall pay Executive's
reasonable legal fees and costs associated with entering into this Agreement.
i. Disputes. All disputes and controversies
arising under or in connection with this Agreement, other than the seeking of
injunctive or other equitable relief pursuant to Section 9 or Section 10 hereof,
shall be settled by arbitration conducted before one arbitrator sitting in New
York City, New York, or such other location agreed by the parties hereto, in
accordance with the rules for expedited resolution of commercial disputes
of the American Arbitration Association then in effect. The determination
of the arbitrator shall be final and binding on the parties. Judgment may be
entered on the award of the arbitrator in any court having proper jurisdiction.
All expenses of such arbitration shall be borne by each party; provided, that
the fees and expenses of Executive shall be borne by the Company if Executive
prevails on the merits as determined by the arbitrator.
14. Executive Representation. Executive hereby represents to
the Company that the execution and delivery of this Agreement by Executive and
the Company and the performance by Executive of Executive's duties hereunder
shall not constitute a breach of, or otherwise contravene, the terms of any
employment agreement or other agreement or policy to which Executive is a party
or otherwise bound.
15. Withholding Taxes. The Company may withhold from any
amounts payable under this Agreement such Federal, state and local taxes as may
be required to be withheld pursuant to any applicable law or regulation.
16. Counterparts. This Agreement may be signed in
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
<PAGE>
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement as of the day and year first above written.
THE DUN & BRADSTREET ALLAN Z. LOREN
CORPORATION
\s\ Clifford L. Alexander, Jr. \s\ Allan Z. Loren
By: Clifford L. Alexander, Jr.
Title: Chairman and Chief Executive Officer
<PAGE>
Exhibit A
Hershey Foods Corporation
The Reynolds and Reynolds Company
Venator Group, Inc.
eCustomers.com (Advisory Board)
Plural, Inc.
First Knowledge Partners Inc.
<PAGE>
Exhibit B
THE DUN & BRADSTREET CORPORATION
May 15,2000
PERSONAL AND CONFIDENTIAL
Mr. Allan Z. Loren
c/o The Dun & Bradstreet Corporation
One Diamond Hill Road
Murray Hill, NJ 07974-1218
Dear Allan:
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.
1. Term of Agreement. This Agreement shall commence on May 30,
2000 and shall continue in effect through May 30, 2003.
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:
<PAGE>
(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 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.
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 (including a termination due to the expiration of your employment
agreement with the Company) 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, your actual termination
shall be deemed to be 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. Notwithstanding the
foregoing, in the event there is another agreement (e.g. an employment
agreement) between the Company and Executive in effect upon the Date of
Termination, which agreement by its terms provides for termination payments or
benefits, under the applicable circumstances (whether or not in connection with
a change of control) (each such payment or benefit, an "Other Benefit"), then
Executive shall receive the Other Benefit in lieu of a similar payment or
benefit otherwise afforded by this Agreement to the extent such Other Benefit is
greater than the applicable payment or benefit under this Agreement. If any
Other Benefit is not greater than a similar payment or benefit under this
Agreement, Executive shall receive such payment or benefit under this Agreement
in lieu of the applicable Other Benefit.
(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 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 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;
(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; or
(i) the proposed spin-off of The New D&B Corporation ("New
D&B") from the Company (the "Spinoff") not occurring prior to March 31,
2001.
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 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.
(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
(i) by the Company other than for Cause or Disability, (ii) if you should
terminate your employment for Good Reason or (iii) your employment terminates
due to the expiration of your employment agreement, 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), (i) and (j) 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) the greater of (X) 300% of your guideline bonus with
respect to the year in which the Change in Control occurs and (Y)
$2,100,000;
(c) you shall immediately vest in your benefits under the
Supplemental Executive Benefit Plan and 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 Benefit Plan, Pension Benefit Equalization Plan and any
successor or substitute plans thereto, a sample calculation of which
appears in Exhibit A to this Agreement;
(d) 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
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;
(e) 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;
(f) (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;
(g) 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 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);
(h) 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 (h) 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;
(i) 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
(j) 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 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) 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), (d),
(e), (f), (g) and (i) 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)(h) and (iii)(j)
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. Assignment; Successors; Binding Agreement. (i) This
Agreement shall be assigned by the Company to New D&B simultaneously with the
Spinoff. The Company will require New D&B to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such assignment had taken place.
In the event that the Spinoff occurs following a Change in Control, failure of
the Company to obtain such express assumption and agreement of such assignment
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 the Spinoff becomes effective shall be deemed the Date of
Termination.
(ii) 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 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.
(iii) 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 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. Entire Agreement. This Agreement sets forth the entire
agreement of the parties hereto and, except as provided herein, supercedes 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
effect of a Change in Control on the relationship between the Company and its
affiliates and Executive.
<PAGE>
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 DUN & BRADSTREET CORPORATION
BY: \s\ Clifford L. Alexander, Jr.
Clifford L. Alexander, Jr.
Chairman and Chief Executive Officer
Agreed to this 15th day of May, 2000.
\s\ Allan Z. Loren
Allan Z. Loren
[Exhibit A -- Intentionally Omitted]