EMPLOYMENT AGREEMENT
AGREEMENT made this day of August, 1996, between
UNIROYAL CHEMICAL COMPANY, INC., a New Jersey corporation with
offices at Middlebury, Connecticut (the "Company"), and
(the "Executive").
WHEREAS, the Company is engaged in the extremely competitive
business of developing, manufacturing and marketing crop
protection chemicals, rubber chemicals, plastic and petroleum
additives, elastomers and urethane prepolymers throughout the
United States, Canada, Western Europe and certain other areas of
the world; and
WHEREAS, the Executive, as a result of training, expertise
and personal application over the years, has acquired and will
continue to acquire considerable and unique expertise and
knowledge which are of considerable value to the Company in the
conduct, management and operation of its business; and
WHEREAS, by virtue of the Executive's considerable and
unique expertise and knowledge, and of the position in which the
Executive is employed and will be employed hereunder, the Company
considers the Executive a key management employee; and
WHEREAS, Uniroyal Chemical Corporation, a Delaware
corporation ("UCC") and a parent of the Company, has been
acquired (the "Acquisition") by Crompton & ▇▇▇▇▇▇▇ Corporation, a
Massachusetts corporation ("Crompton"); and
WHEREAS, Crompton and the Executive (and certain other
persons) have entered into a Supplemental Executive Retirement
Agreement, dated as of the date hereof (the "SERA"); and
WHEREAS, the Company desires to terminate the employment
contract pursuant to which the Executive is currently employed
and in consideration therefor agrees and desires to employ the
Executive on the terms and conditions set forth herein; and
WHEREAS, the Executive acknowledges that the Executive is a
key management employee and is willing to terminate the
employment contract pursuant to which the Executive is currently
employed and to waive any right or entitlement to any payments
under such contract resulting from the Acquisition and is
desirous and willing to continue employment on the terms and
conditions expressed herein; and
WHEREAS, the Company is willing to provide the Executive
with certain benefits in the event of the termination of the
Executive's employment with the Company, including in the event
of a Change in Control (as hereinafter defined);
NOW THEREFORE, in consideration of the continued employment
of the Executive by the Company and the benefits to be derived by
the Executive hereunder, and of the Executive's agreement to
continue employment by the Company as provided herein, the
parties mutually agree as follows:
1. Employment. The Company hereby agrees to continue to
employ the Executive, and the Executive hereby agrees to continue
to serve the Company, on the terms and conditions set forth
herein.
2. Term. This Agreement shall be effective until the
earlier to occur of (i) the second anniversary of the date hereof
or (ii) the Executive's normal retirement date under the SERA or
any successor retirement agreement ("Normal Retirement Date") ;
provided, however, that beginning on the date one year after the
date hereof, and on each annual anniversary of such date (each
such date being referred to as a "Renewal Date"), the term hereof
shall be automatically extended so as to terminate on the earlier
of (x) two years from such Renewal Date or (y) the Executive's
Normal Retirement Date, unless at least six months prior to a
Renewal Date the Company shall give notice that the term hereof
shall not be so extended.
3. Position, Duties and Place of Performance. The
Executive shall initially serve as and shall have
such responsibilities, duties and authority as he may have as of
the Closing Date (as hereinafter defined) or as may from time to
time be assigned to the Executive by the Board of Directors of
the Company (the "Board"). The Executive shall devote
substantially all his working time and efforts to the business
and affairs of the Company. In connection with the Executive's
employment by the Company, the Executive shall be based at the
principal executive offices of the Company in Middlebury,
Connecticut, or at such other location within a forty (40) mile
radius of Middlebury, Connecticut as may be determined by the
Board, except for required travel on the Company's business to
the extent consistent with the Company's practices.
4. Sign-on Incentive. In consideration of the
Executive's entering into this Agreement, the Company has paid to
the Executive in cash the sum of $ .
5. Compensation and Related Matters. As compensation and
consideration for the performance by the Executive of the
Executive's duties, responsibilities and covenants pursuant to
this Agreement, the Company will pay the Executive and the
Executive agrees to accept in full payment for such performance
the amounts and benefits set forth below.
(a) Salary. During the period of the Executive's
employment hereunder, the Company shall pay to the Executive an
annual base salary at a rate of $ commencing on the
closing date of the Acquisition (the "Closing Date") or such
higher rate as may from time to time be determined by the Board,
such salary to be paid in substantially equal installments no
less frequently than monthly. This salary may be increased from
time to time by the Company in its sole discretion and, if so
increased, shall not thereafter during the term of this Agreement
be decreased. Compensation of the Executive by salary payments
shall not be deemed exclusive and shall not prevent the Executive
from participating in any other compensation or benefit plan of
the Company. The salary payments (including any increased salary
payments) hereunder shall not in any way limit or reduce any
other obligation of the Company hereunder or under any other
compensation or benefit plan or agreement under which the
Executive is entitled to receive payment or other benefits from
the Company, and no other compensation, benefit or payment
hereunder or under any other compensation or benefit plan or
agreement under which the Executive is entitled to receive
payments or other benefits from the Company shall in any way
limit or reduce the obligation of the Company to pay the
Executive's salary hereunder.
(b) Bonus. During the term of the Executive's
employment hereunder:
(i) the Executive shall be eligible to receive a
cash bonus for the Company's fiscal year ending September 30,
1996, to be determined and paid by the Company in accordance with
the Uniroyal Chemical Company, Inc. Management Incentive Plan
("MIP") as in effect on the date hereof, provided, however, that
neither the costs associated with the consummation of the
Acquisition nor any extraordinary write-off taken by the Company
after the date of this Agreement shall be taken into account in
determining whether any such bonus is due the Executive, and, if
so, the amount thereof;
(ii) the Executive shall be eligible to receive a
cash bonus for the last three months of calendar year 1996 to be
determined and paid based on the Company's actual results of
operations for such three month period and on an extension and
proration of the MIP for the Company's 1996 fiscal year; and
(iii) commencing on January 1, 1997, the Executive
shall participate in any annual bonus plan made generally
available to executives of Crompton in positions comparable to
that of Executive (the "Bonus Plans") on a basis no less
favorable than similarly situated executives of Crompton.
Subject to this Agreement and to the rules and regulations
governing the Bonus Plans which are communicated in writing to
the Executive from time to time, the Executive agrees that the
actual award of any cash bonus pursuant to a Bonus Plan, may
pursuant to the terms of such plan, be subject to the achievement
of certain financial goals by the Company and/or Crompton and/or
certain personal performance goals established for the Executive
with respect to any period for which a cash bonus may be paid
pursuant to a Bonus Plan.
(c) Long Term Incentive Plan. During the term of the
Executive's employment hereunder, the Executive shall be entitled
to participate in any long term incentive plan made generally
available to executives of Crompton in positions comparable to
that of Executive on a basis no less favorable than similarly
situated executives of Crompton.
(d) Expenses. During the term of the Executive's
employment hereunder, the Executive shall be entitled to receive
prompt reimbursement for all reasonable and customary travel and
entertainment expenses or other out-of-pocket business expenses
incurred by the Executive in fulfilling the Executive's duties
and responsibilities hereunder, including all expenses of travel
and living expenses while away from home on business or at the
request of and in the service of the Company, provided that such
expenses are incurred and accounted for in accordance with the
policies and procedures established by the Company.
(e) Other Benefits. The Executive shall be entitled to
(i) participate in all of the employee benefit plans and
arrangements of the Company and enjoy all of the perquisites in
effect on the date hereof in which the Executive participates, or
(ii) participate in plans, arrangements or perquisites providing
the Executive with at least equivalent benefits to those referred
to in clause (i) of this sentence (including without limitation
each retirement, thrift and profit sharing plan, group life
insurance and accident plan, medical and dental insurance plans,
and disability plan), provided that the Company shall not make
any changes in such plans, arrangements or perquisites that would
adversely affect the Executive's rights or benefits thereunder;
provided, however, that such a change may be made to a plan in
which salaried employees of the Company participate, including
termination of any such plan, arrangement or perquisite, if (x)
it does not result in a proportionately greater reduction in the
rights of or benefits to the Executive as compared with any other
salaried employee of the Company or cause the benefits of the
Executive to be less favorable in the aggregate than those
available to similarly situated executives of Crompton or (y) it
is required by law or a technical change. The Executive shall be
entitled to participate in or receive benefits under any employee
benefit plan, arrangement or perquisite made available by the
Company in the future to its executive employees, subject to and
on a basis consistent with the terms, conditions and overall
administration of such plans, arrangements and perquisites.
Nothing paid to the Executive under any plan, arrangement or
perquisite presently in effect or made available in the future
shall be deemed to be in lieu of the salary payable to the
Executive pursuant to paragraph (a) of this Section 5. Any
payments or benefits payable to the Executive under this Section
5 in respect of any year during which the Executive is employed
by the Company for less than the entire such year shall, unless
otherwise provided in the applicable plan or arrangement, be
prorated in accordance with the number of days in such year
during which he is so employed.
(f) Vacations. The Executive shall be entitled to
paid vacation in each calendar year, determined in accordance
with the Company's vacation policy. The Executive shall also be
entitled to all paid holidays and personal days given by the
Company to its executive employees.
6. Termination. The Executive's employment hereunder
may be terminated under the following circumstances:
(a) Death. The Executive's employment hereunder shall
terminate upon his death.
(b) Disability. If, in the written opinion of a
qualified physician selected by the Company, the Executive shall
become unable to perform his duties hereunder due to physical or
mental illness, and in connection therewith, the Executive has
received and continues to receive benefit payments pursuant to
the Company's Long-Term Disability Plan or any successor plan
thereto, the Company may terminate the Executive's employment
hereunder.
(c) Cause. The Company may terminate the Executive's
employment hereunder for Cause. For purposes of this Agreement,
the Company shall have "Cause" to terminate the Executive's
employment hereunder upon:
(i) the willful and continuous neglect or refusal
to perform the Executive's duties or responsibilities, or the
willful taking of actions which materially impair the Executive's
ability to perform his duties or responsibilities which continues
after being brought to the attention of the Executive (other than
any such failure resulting from the Executive's 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 (e) hereof) by the Executive for Good Reason (as
defined in subsection (d) hereof)); or
(ii) the willful act or failure to act by the
Executive in misconduct which is materially and manifestly
injurious to the Company and which is brought to the attention of
the Executive in writing not more than thirty days from the date
of its discovery by the Company or the Board (including (1)
intentional theft or embezzlement from the Company or its
divisions, affiliates, predecessors, successors, or direct or
indirect parents or subsidiaries (the "Group"), (2) intentional
provision of services in competition to the Group which would
have been prohibited under Section 8 hereof had it occurred after
the Termination Date and (3) intentional disclosure to a
competitor of the Group of any confidential proprietary
information of the Group which disclosure is prohibited by
Section 10 hereof; but, notwithstanding anything set forth in
this paragraph (ii), not including (w) neglect of duties, (x) bad
judgement or negligence, (y) any act or failure to act by the
Executive believed in good faith to have been in or not opposed
to the interests of the Group, or (z) any act or failure to act
by the Executive in respect of which a determination could
properly be made that the Executive met the applicable standard
of conduct prescribed for indemnification, reimbursement or
payment of expenses under the By-laws of the Company or the laws
of the State of New Jersey or the Directors' and Officers'
liability insurance of the Company, if any, in each case in
effect at the time of such act or failure to act).
For purposes of this subsection (c), no act, or failure
to act, on the Executive's part shall be considered "willful"
unless done, or omitted to be done, by him not in good faith or
without reasonable belief that his action or omission was in the
best interest of the Company. Notwithstanding the foregoing, the
Executive shall not be deemed to have been terminated for Cause
without (1) reasonable written notice to the Executive specifying
in detail the specific reasons for the Company's intention to
terminate for Cause, (2) an opportunity for the Executive,
together with his counsel, to be heard before the Board, and (3)
delivery to the Executive of a Notice of Termination, as defined
in subsection (e) hereof, approved by the affirmative vote of not
less than a majority of the entire membership of the Board
finding that in the good faith opinion of the Board, the
Executive was guilty of conduct set forth above in clause (i) or
(ii) hereof, and specifying the particulars thereof in detail.
(d) Convenience. The Company may terminate the
Executive's employment hereunder at any time for Convenience.
For purposes of this Agreement, a termination shall be deemed to
be for "Convenience" if it is for any reason other than Death,
Disability or Cause (which are provided for in subsections (a),
(b) and (c) of this Section 6) or for no reason.
(e) Good Reason.
(i) The Executive may terminate his employment
hereunder (A) for Good Reason or (B) otherwise upon written
notice to the Company.
(ii) For purposes of this Agreement, "Good Reason"
shall mean, without the Executive's express written consent, the
occurrence of any of the following circumstances unless, in the
case of clauses (A), (B), (C), (D) and (F) below, such
circumstances are fully corrected prior to the Date of
Termination (as defined in subsection (g) of this Section 6)
specified in the Notice of Termination (as defined in subsection
(f) of this Section 6) given in respect thereof: (A) a diminution
in the Executive's position, duties, responsibilities or
authority (except during periods when the Executive is unable to
perform all or substantially all of the Executive's duties and/or
responsibilities on account of the Executive's illness (either
physical or mental) or other incapacity), (B) a reduction in
either the Executive's annual rate of base salary or level of
participation in any bonus or incentive plan for which he is
eligible under Section 5(b) hereof, (C) an elimination or
reduction of the Executive's participation in any benefit plan
generally available to employees at the Executive's level, unless
the Company continues to offer the Executive benefits
substantially similar to those made available by such plan;
provided, however, that a change to a plan in which all salaried
employees of the Company generally participate, including
termination of any such plan, if it does not result in a
proportionately greater reduction in the rights of or benefits to
the Executive as compared with the other salaried employees of
the Company or is required by law or a technical change shall not
be deemed to be Good Reason, (D) failure to provide facilities or
services which are suitable as determined by the Board to the
Executive's position and adequate for the performance of the
Executive's duties and responsibilities, (E) failure of any
successor (whether direct or indirect, by purchase of stock or
assets, merger, consolidation or otherwise) to the Company to
assume the Company's obligations hereunder or failure by the
Company to remain liable to the Executive hereunder after an
assignment by the Company of this Agreement, in each case as
contemplated by Section 11 hereof, (F) any purported termination
by the Company of the Executive's employment which is not
effected pursuant to a Notice of Termination satisfying the
requirements of subsection (f) of this Section 6 (and for
purposes of this Agreement no such purported termination shall be
effective), or (G) a termination of employment by the Executive
within the thirty day period commencing on the 270th day
following the sale or other disposition to a person, entity or
group (as defined in Rule 13d-5 ("Rule 13d-5") under the
Securities Exchange Act of 1934, as amended) other than one or
more members of the Group of the division or Subsidiary (as
defined in subsection (h) of this Section 6) of the Company, as
the case may be, by which the Executive is employed, provided,
however, Good Reason shall not exist if (i) the Executive has
accepted employment with the successor or acquiring entity and
such successor or acquiring entity has assumed this Agreement, or
(ii) the Executive is offered a position with a member of the
Group in a position of comparable prestige, responsibility and
salary (and without relocation). The Executive's right to
terminate employment pursuant to this subsection shall not be
affected by the Executive's incapacity due to physical or mental
illness. The Executive's continued employment shall not
constitute consent to, or a waiver of rights with respect to, any
circumstances constituting Good Reason hereunder; provided,
however, that the Executive shall be deemed to have waived his
rights pursuant to circumstances constituting Good Reason
hereunder if he shall not have provided to the Company a Notice
of Termination within ninety (90) days following his knowledge of
the circumstances constituting Good Reason.
(f) Notice of Termination. Any termination of the
Executive's employment by the Company or by the Executive (other
than a termination pursuant to subsection (a) hereof) shall be
communicated by written Notice of Termination to the other party
hereto in accordance with Section 12. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which
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 the Executive's employment under the provision so
indicated.
(g) "Date of Termination" shall mean (i) if the
Executive's employment is terminated pursuant to subsection (a)
above, the date of his death, (ii) if the Executive's employment
is terminated pursuant to subsection (b) above, thirty days after
Notice of Termination is given (provided that the Executive shall
not have returned to the full-time performance of the Executive's
duties during such thirty day period), (iii) if the Executive's
employment is terminated pursuant to subsection (c) or (e) above,
the date specified in the Notice of Termination which, in the
case of a termination for Cause shall not be less than fifteen
days from the date such Notice of Termination is given, and in
the case of a termination for Good Reason or a termination
pursuant to subsection 6(e)(i)(B) hereof shall not be less than
fifteen (15) nor more than thirty (30) days from the date such
Notice of Termination is given), (iv) if the Executive's
employment is terminated by the Company other than for Cause,
thirty days from the date the Executive is notified of such
termination, or (v) if the Executive terminates his employment
and fails to provide written notice to the Company of such
termination, the date of such termination; 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 provision), 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
foregoing, if the dispute is resolved in favor of the Company,
the Date of Termination shall not be deemed to have been extended
for purposes of this Agreement. If the Date of Termination is
extended by a notice of dispute, the rights of the parties upon a
final determination shall be governed by the terms of this
Agreement, regardless of whether the Agreement otherwise remains
in effect on the date of such final determination.
Notwithstanding the pendency of any such dispute, the Company
will continue to pay to the Executive his full compensation in
effect when the notice giving rise to the dispute was given
(including, but not limited to, base salary) and continue the
Executive as a participant in all compensation, benefit and
insurance plans in which the Executive was 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 or under any other compensation or
benefit plan, agreement or arrangement under which the Executive
is entitled to receive payments or other benefits from the
Company, and shall not be offset against or reduce any other
amounts due under this Agreement or under any other compensation
or benefit plan, agreement or arrangement under which the
Executive is entitled to receive payments or other benefits from
the Company, and shall not be reduced by any compensation earned
by the Executive as the result of employment by another employer.
(h) "Subsidiary" of any Person shall mean (i) any
corporation that is directly or indirectly through one or more
intermediaries, controlled (as such term is defined under the
Securities Act of 1933, as amended) by such Person, (ii) any
corporation more than 50% of the voting capital stock of which is
owned, directly or indirectly, by such Person or (iii) any other
Person that is directly or indirectly controlled (as such term is
defined under the Securities Act) by such Person or in which such
Person holds, directly or indirectly, a majority voting or
ownership interest.
(i) "Person" shall mean any individual, group,
corporation, partnership, joint venture, trust, joint stock
company, unincorporated organization or government or political
department or agency thereof or other entity of whatever nature.
7. Compensation Upon Termination, Death or During
Disability.
(a) During any period that the Executive fails to perform
his duties hereunder as a result of incapacity due to physical or
mental illness the Executive shall continue to receive his full
base salary at the rate then in effect for such period (offset by
any payments to the Executive received pursuant to disability
benefit plans maintained by the Company) until his employment is
terminated pursuant to Section 6(b) hereof, and upon such
termination, the Company shall within ten days following the Date
of Termination, make a lump sum payment to the Executive in an
amount equal to the sum of (A) the Executive's annual base salary
rate in effect as of the date Notice of Termination is given and
(B) the average of the last three annual bonus payments awarded
to the Executive under the Bonus Plans.
(b) If the Executive's employment is terminated by his
death, the Company shall within ten days following the date of
the Executive's death and in accordance with Section 6(a) hereof,
(i) pay any amounts due to the Executive under Section 5 through
the date of his death and (ii) pay to the Executive's legal
representative a lump sum payment in an amount equal to the sum
of (A) the Executive's annual base salary rate in effect as of
the date of the Executive's death and (B) the average of the last
three annual bonus payments awarded to the Executive under the
Bonus Plans.
(c) If the Executive's employment is terminated by the
Company for Cause or by the Executive for other than Good Reason,
the Company shall pay the Executive his full base salary through
the Date of Termination at the rate in effect at the time Notice
of Termination is given and all other unpaid amounts, if any, to
which the Executive is entitled as of the Date of Termination,
including any expenses owed pursuant to Section 4(c) and amounts
under any compensation plan or program of the Company, at the
time such payments are due and the Company shall, thereafter,
have no further obligations to the Executive under this
Agreement.
(d) If (A) the Company shall terminate the Executive's
employment for Convenience (it being understood that a purported
termination for disability pursuant to Section 6(b) hereof or for
Cause which is disputed and finally determined not to have been
proper shall be a termination by the Company for Convenience) or
(B) the Executive shall terminate his employment for Good Reason;
then
(i) the Company shall pay the Executive his full
base salary through the Date of Termination at the rate in effect
at the time Notice of Termination is given and all other unpaid
amounts, if any, to which the Executive is entitled as of the
Date of Termination including any expenses owed pursuant to
Section 4(c) and amounts under any compensation plan or program
of the Company, at the time such payments are due;
(ii) in lieu of any further salary payments to the
Executive for periods subsequent to the Date of Termination, the
Company shall pay as liquidated damages to the Executive an
amount equal to the sum of (A) the product of (1) the sum of (a)
the Executive's annual base salary rate, in effect as of the
date Notice of Termination is given, (b) the average of the last
three annual bonus payments under the Bonus Plans awarded to the
Executive, and (c) the amount contributed or required to be
contributed by the Company, with respect to the Executive, to any
of the Company's qualified defined contribution plans for the
twelve-month period ending on the Date of Termination multiplied
by (2) (w) if the Executive terminates his employment for Good
Reason or the Company terminates the Executive's employment other
than for Cause, in either case within one year after the
occurrence of a Change in Control, the number three or (x) in any
other case, the number two, and (B) the present value, as
determined by the Company's independent accountants or actuaries
(to be reasonably acceptable to the Executive), of any additional
pension the Executive would have accrued under the Company's
defined benefit plan qualified under the Code (as defined in
subsection (f) of this Section 7) if the Executive, following the
Date of Termination, had remained employed by the Company for a
period, and earned compensation during such period at the
Executive's annual base salary rate in effect as of the date of
Notice of Termination, or (y) three years, if the Executive
terminates his employment for Good Reason or the Company
terminates the Executive's employment other than for Cause, in
either case within one year after the occurrence of a Change in
Control or (z) two years in any other case. Any payment to be
made pursuant to this Paragraph shall be made in a lump sum on or
before the tenth day following the Date of Termination;
(iii) the Company shall continue the participation
of the Executive for a period of two years (except, if the
Executive terminates his employment for Good Reason or the
Company terminates the Executive's employment other than for
Cause, in either case within one year after the occurrence of a
Change in Control, such period shall be three years), in all
medical, life and other employee "welfare" benefit plans and
programs in which the Executive was entitled to participate
immediately prior to the Date of Termination provided that the
Executive's continued participation is possible under the general
terms and provisions of such plans and programs. In the event
that the Executive's participation in any such plan or program is
barred, the Company shall arrange to provide the Executive with
benefits substantially similar to those which the Executive would
otherwise have been entitled to receive under such plans and
programs from which his continued participation is barred;
(iv) the Company shall pay to the Executive an
amount equal to the product of (A) the amount of all legal fees
and expenses incurred by the Executive as a result of such
termination, including all such fees and expenses, if any,
incurred in contesting, arbitrating 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 multiplied by (B) (x) 100% if the Executive shall be
successful in contesting or arbitrating or seeking to enforce
such rights or benefits or (y) 50% if the Executive shall not be
successful, provided that such claim has been brought in good
faith by the Executive; and
(v) if the Company shall fulfill its obligations to
the Executive pursuant to this Section 7(d) plus any amounts
payable pursuant to Section 7(f) hereof, his full base salary
through the Date of Termination at the rate in effect at the time
Notice of Termination is given and all other unpaid amounts, if
any, to which the Executive is entitled as of the Date of
Termination including any expenses owed pursuant to Section 4(c)
and amounts under any compensation plan or program of the
Company, at the time such payments are due and the Company shall,
thereafter, have no further obligations to the Executive under
this Agreement.
(e) For purposes of this Agreement, a "Change in
Control" shall mean (i) a change in control of Crompton, of a
nature that would be required to be reported in response to Item
1(a) of the Current Report on Form 8-K, as in effect on January
1, 1988, pursuant to Section 13 or 15(d) of the Securities
Exchange Act of ▇▇▇▇ (▇▇▇ "▇▇▇▇▇▇▇▇ ▇▇▇"); provided that, without
limitation, such a "Change in Control" shall be deemed to have
occurred if: (x) a third person, including a "group" as such term
is used in Section 13(d)(3) of the Exchange Act, other than the
trustee of any employee benefit plan of Crompton, becomes the
beneficial owner, directly or indirectly, of 20% or more of the
combined voting power of Crompton's outstanding voting securities
ordinarily having the right to vote for the election of directors
of Crompton; (y) during any period of 24 consecutive months
individuals who, at the beginning of such consecutive 24-month
period, constitute the Board of Directors of Crompton (the
"Crompton Board" generally and, as of the date of this Agreement,
the "Incumbent Board") cease for any reason (other than
retirement upon reaching normal retirement age, disability, or
death) to constitute at least a majority of the Crompton Board;
provided that any person becoming a director of Crompton
subsequent to the date hereof whose election, or nomination for
election by Crompton's shareholders, was approved by a vote of at
least three quarters of the directors comprising the Incumbent
Board (other than an election or nomination of an individual
whose initial assumption of office is in connection with an
actual or threatened election contest relating to the election of
the directors of Crompton, as such terms are used in Rule 14a-11
of Regulation 14A promulgated under the Exchange Act) shall be,
for purposes of this Agreement, considered as though such person
were a member of the Incumbent Board; or (z) Crompton shall cease
to be a publicly owned corporation having its outstanding Common
Stock listed on the New York Stock Exchange or quoted in the
NASDAQ National Market System; or (ii) the sale or other
disposition to a third person, including a "group" as such term
is used in Section 13(d)(3) of the Exchange Act, other than
Crompton, a direct or indirect wholly-owned Subsidiary of
Crompton, or the trustee of any employee benefit plan of Crompton
or the Company, of (x) a majority of the combined voting power of
the Company's outstanding voting securities ordinarily having the
right to vote for the election of directors of the Company or
(y) the division or subsidiary of the Company by which the
Executive is employed.
(f) If the Executive becomes entitled to any payment
or benefit whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company (or any
person whose actions result in a Change in Control or any person
affiliated with the Company or such person) in connection with
any termination of the Executive's employment within one year
following a Change in Control (all such payments being called the
"Severance Payment") which is subject to the tax (the "Excise
Tax") imposed by Section 4999 of the Internal Revenue Code of
1986, as amended (the "Code"), the Company shall pay the
Executive pursuant to the procedures set forth below an
additional amount (the "Gross-Up Payment") such that the net
amount retained by the Executive, after deduction of any Excise
Tax on the Severance Payment and any federal and state and local
income tax and Excise Tax upon such payment shall be equal to the
Severance Payment.
In the event of a Change in Control: (A) the Company
shall in good faith determine the extent to which it believes any
portion of the Severance Payment is subject to the Excise Tax and
shall pay to the Executive on or prior to the thirtieth day
following the Date of Termination an amount the Company believes
to be the applicable Gross-Up Payment; (B) if, thereafter, there
is an assertion by the Internal Revenue Service that any
additional portion of the Severance Payment is subject to the
Excise Tax, promptly upon notice of such assertion the Company
shall determine the extent to which such assertion is contested
and shall (x) pay to the Executive within thirty days of such
determination the Gross-Up Payment appropriate with respect to
amounts not contested, and (y) immediately assume and conduct, at
its own expense, the contest of such assertion. In any case in
which the Company shall contest an assertion, the Company shall,
in good faith, consult with the Executive concerning the
appropriate actions or positions to be taken in contesting such
assertion, including whether any action to contest such assertion
shall initially be by way of judicial or administrative
proceedings, or both, and, if judicial action with respect to
such assertion is undertaken, the court before which such action
shall be commenced. Upon a finding that any additional Excise
Tax must be paid, the Company shall, within thirty days of such
determination, pay to the Executive the Gross-Up Payment
(including any interest, penalties, and other expenses, related
to contesting such assertion).
(g) The Executive shall not be required to mitigate
the amount of any payment provided for in this Section 7 by
seeking other employment or otherwise, nor shall the amount of
any payment or benefit provided for in this Section 7 be reduced
by any compensation earned by the Executive as the result of
employment by another employer, by retirement benefits, by offset
against any amount claimed to be owed by the Executive to the
Company, or otherwise.
(h) Notwithstanding any provision of this Agreement to
the contrary, upon the termination of the Executive's employment
by the Company prior to the date two years following the date
hereof, other than such a termination which is preceded by a
Change of Control of Crompton described in Section 7(e)(i)
hereof, the agreement dated October 30, 1989, between the Company
and the Executive pursuant to which the Executive was employed by
the Company prior to the date of this Agreement (the "Prior
Agreement") shall govern payments by the Company to the Executive
in connection with such termination of the Executive's
employment; provided, that the sign on incentive paid to the
Executive pursuant to Section 4 hereof shall not be considered
for purposes of determining the amount due the Executive under
the Prior Agreement; and, provided further,that any amount due
the Executive from the Company under the Prior Agreement shall be
reduced by the sum of the sign on incentive paid to the Executive
by the Company upon the execution of this Agreement pursuant to
Section 4 hereof less that portion of such sign on incentive paid
with respect to the Company's 1986 LTI Plan.
(i) The obligations of the Company to make payments
and provide benefits under this Section 7 accruing prior to the
termination of this Agreement shall survive such termination.
8. Covenant Not to Compete. The Executive acknowledges
that, as a key management employee, the Executive will be
involved, on a high level, in the development, implementation and
management of the Company's national and international business
strategies and plans, including those which involve the Company's
finances, research, marketing, planning, operations, industrial
relations and acquisitions. By virtue of the Executive's unique
and sensitive position and special background, employment of the
Executive by a competitor of the Company represents a serious
competitive danger to the Company, and the use of the Executive's
talent and knowledge and information about the Company's
business, strategies and plans can and would constitute a
valuable competitive advantage over the Company. In view of the
foregoing, the Executive covenants and agrees that, if the
Executive's employment is terminated (i) for Cause, (ii) pursuant
to an event constituting Good Reason or by the Company for
Convenience, in either case within one year of the occurrence of
a Change in Control; or (iii) in any other case, for a period of
three years in the case of clauses (i) and (ii) of this sentence,
and two years in the case of clause (iii) of this sentence, after
the Date of Termination the Executive will not engage or be
engaged, in any capacity, directly or indirectly, including but
not limited as employee, agent, consultant, manager, executive,
owner or stockholder (except as a passive investor holding less
than a 5% equity interest in any enterprise) in any business
entity engaged in competition with any business conducted by the
Company on the Date of Termination in North America or in any
business entity engaged in direct competition with the business
division of the Company for which the Executive was employed on
the Date of Termination in Europe; provided, that the Executive
may be employed by a competitor of the Company so long as the
Executive's duties and responsibilities do not relate directly or
indirectly to the activities of the new employer which are
competitive with the business segment of the Company in which the
Executive was employed at any time prior to the Date of
Termination.
The covenant not to compete contained in this Section 8
shall survive the termination of this Agreement.
If any court determines that the covenant not to compete
contained in this Section 8, or any part hereof, is unenforceable
because of the duration or geographic scope of such provision,
such court shall have the power to reduce the duration or scope
of such provision as the case may be, and, in its reduced form,
such provision shall then be enforceable.
9. Assignment of Inventions, Patents, Etc. The Executive
agrees that all processes, technologies, designs and inventions
("Inventions"), including new contributions, improvements, ideas
and discoveries, whether patentable or not, conceived, developed,
invented or made by the Executive during the term of this
Agreement shall belong to the Company, provided that such
Inventions grew out of the Executive's work with the Company or
any of its subsidiaries or affiliates, are related in any manner
to the business (commercial or experimental) of the Company or
any of its subsidiaries or affiliates or are conceived or made on
the Company's time or with the use of the Company's facilities or
materials. The Executive, either during the term of this
Agreement or thereafter as required by the Company, shall
further: (a) promptly disclose such Inventions to the Company;
(b) assign the Company, without additional compensation, all
patent and other rights to such Inventions for the United States
and foreign countries; (c) sign all papers necessary to carry out
the foregoing; and (d) give testimony or otherwise take action in
support of the Executive's status as the inventor of such
Inventions.
It is the desire and intent of the parties that the terms,
provisions, covenants and remedies contained in this Section 9
and in Section 10 shall be enforceable to the fullest extent
permitted by applicable law or public policy. If any such term,
provision, covenant or remedy or the application thereof to any
person or circumstance shall, to any extent, be construed to be
invalid or unenforceable in whole or in part, then such term,
provision, covenant or remedy shall be construed in a manner so
as to permit its enforceability to the fullest extent permitted
by applicable law or public policy. In any case, the remaining
provisions of this Agreement or the application thereof to any
person or circumstance other than those to which they have been
held invalid or unenforceable, shall remain in full force and
effect.
10. Confidentiality. In addition to any obligation
regarding inventions, patents, ideas or other intellectual
property set forth in Section 9, the Executive acknowledges that
the Company's trade secrets and confidential and proprietary
information, including without limitation:
(a) unpublished information concerning the Company's:
(i) research activities and plans,
(ii) marketing or sales plans,
(iii) pricing or pricing strategies,
(iv) operational techniques, and
(v) strategic plans;
(b) unpublished financial information, including
information concerning revenues, profits and profit margins;
(c) internal confidential manuals; and
(d) any "material inside information" as such phrase is
used for purposes of the Securities Exchange Act of 1934, as
amended;
all constitute valuable, special and unique information of the
Company. In recognition of this fact, the Executive agrees that
the Executive will not disclose any such trade secrets or
confidential or proprietary information (except (i) information
which becomes publicly available without violation of this
Agreement, (ii) information of which the Executive did not know
and should not have known was disclosed to the Executive in
violation of any other person's confidentiality obligation, (iii)
disclosure required in connection with any legal process and (iv)
disclosure which the Executive reasonably and in good faith
believes to be in or not opposed to the interests of the Company)
to any person, firm, corporation, association or other entity,
for any reason or purpose whatsoever, nor shall the Executive
make use of any such information for the benefit of any person,
firm, corporation or other entity except the Company and its
subsidiaries or affiliates. The Executive's obligation to keep
all of such information confidential shall be in effect during
and for a period of three years after the Date of Termination;
provided, however, that the Executive will keep confidential and
will not disclose any trade secret or similar information
protected under law as intangible property (subject to the same
exceptions set forth in the parenthetical clause above) for so
long as such protection under law is extended.
11. Binding Agreement. This Agreement and all rights of
the Executive hereunder shall inure to the benefit of and be
enforceable by the Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive should die while any
amounts would still be payable to him hereunder if he had
continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with he terms of this
Agreement to the Executive's devisee, legatee, or other designee
or, if there be no such designee, to the Executive's estate.
12. Notice. Notices, demands and all other communications
provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered, if delivered
personally, or (unless otherwise specified) mailed by United
States certified or registered mail, return receipt requested,
postage prepaid, and when received if delivered otherwise,
addressed as follows:
If to the Executive:
If to the Company:
Uniroyal Chemical Company, Inc.
▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇ ▇▇
or to such other address as any party may have furnished to the
other in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
13. General Provisions. No provision of this Agreement
may be modified, waived or discharged unless such waiver,
modification or discharge is agreed to in writing signed by the
Executive and such officer of the Company 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 same 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 set
forth expressly in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed
by the laws of the State of Connecticut without regard to its
conflicts of law principles.
14. Validity. The invalidity or unenforceability of any
provision or provisions 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.
15. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an
original but all of which together will constitute one and the
same instrument.
16. Arbitration. Any dispute or controversy arising under
or in connection with this Agreement shall be settled exclusively
by arbitration, conducted before a panel of three arbitrators in
the State of Connecticut, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be
entered on the arbitrator's award in any court having
jurisdiction; provided, however, that the Company shall be
entitled to seek a restraining order or injunction in any court
of competent jurisdiction to prevent any continuation of any
violation of the provisions of Sections 8, 9 or 10 of this
Agreement and the Executive hereby consents that such restraining
order or injunction may be granted without the necessity of the
Company's posting any bond, and provided further that the
Executive shall be entitled to seek specific performance of his
right to be paid until the Date of Termination during the
pendency of any dispute or controversy arising under or in
connection with this Agreement. The expenses of such arbitration
shall be borne by the Company.
17. Entire Agreement. This Agreement, together with the
Basic Agreements, sets forth the entire agreement of the parties
hereto in respect of the subject matter contained herein and
supersedes all prior agreement, promises, covenants,
arrangements, communications, representations or warranties,
whether oral or written, by any officer, employee or
representative or any party hereto; and any prior agreement of
the parties hereto in respect of the subject matter contained
herein is hereby terminated and canceled.
18. Limitation on Damages. In the event Executive purports
to terminate this employment because of an alleged breach of this
Agreement by the Company, the maximum damages to which executive
will be entitled for a cause of action for such breach shall be
the amounts specified in this Agreement, plus interest and costs
awarded, if any.
19. Injunctive Relief. The Executive agrees that in
addition to any other remedy provided at law or in equity or in
this Agreement, the Company shall be entitled to a temporary
restraining order and both preliminary and permanent injunctions
restraining Executive from violating any provision of Sections 8,
9 and 10 of this Agreement.
20. Consent to Jurisdiction and Forum. The Executive
hereby expressly and irrevocably agrees that the Company may
bring any action, whether at law or in equity, arising out of or
based upon this agreement or the Executive's employment by the
Company in the state of Connecticut or in any federal court
therein. The Executive hereby irrevocably consents to personal
jurisdiction in such court and to accept service of process in
accordance with the provisions of the laws of the State of
Connecticut. In the event the Company commences any such action
in the State of Connecticut or in any Federal court therein, the
Company agrees to reimburse the Executive for the reasonable
expenses incurred by the Executive in his appearance in such
forum which are in addition to the expenses the Executive would
have incurred by appearing in the forum of the Executive's
residence, including but not limited to additional legal fees.
IN WITNESS WHEREOF, the parties have executed this Agreement
on the date and year first above written.
UNIROYAL CHEMICAL COMPANY, INC.
By:_________________________
Name:
Title:
_________________________