EXHIBIT 10
FORM OF
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EXECUTIVE AGREEMENT
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Agreement between ▇▇▇▇ Corporation, a Virginia corporation ("▇▇▇▇"), and
_______ (the "Executive"), dated as of __________, 199_.
▇▇▇▇ and the Executive agree as follows:
1. Definitions
As used in this Agreement:
(a) "Cause" means the willful and continued failure of the Executive to
substantially perform his duties; the willful engaging by the Executive in gross
misconduct significantly and demonstrably financially injurious to Olin; or
willful misconduct by the Executive in the course of his employment which is a
felony or fraud. No act or failure to act on the part of the Executive will be
considered "willful" unless done or omitted not in good faith and without
reasonable belief that the action or omission was in the interests of Olin or
not opposed to the interests of Olin.
(b) "Change in Control" means:
(i) Olin ceases to be, directly or indirectly, owned by at least 1,000
stockholders;
(ii) A person, partnership, joint venture, corporation or other entity, or
two or more of any of the foregoing acting as a "person" within the meaning of
Section 13(d)(3) of the Securities Exchange Act of 1934, as amended (the "Act"),
other than Olin, a majority-owned subsidiary of Olin or an employee benefit plan
(or the plan's related trust) of Olin or such subsidiary, become(s) the
"beneficial owner" (as defined in Rule 13d-3 under such Act) of 20% or more of
the then outstanding voting stock of Olin;
(iii) During any period of two consecutive years, individuals who at the
beginning of such period constitute Olin's Board of Directors (together with any
new Director whose election by Olin's Board of Directors or whose nomination for
election by Olin's stockholders was approved by a vote of at least
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two-thirds of the Directors then still in office who either were directors at
the beginning of such period or whose election or nomination for election was
previously so approved) cease for any reason to constitute a majority of the
directors then in office; or
(iv) All or substantially all of the business of Olin is disposed of
pursuant to a merger, consolidation or other transaction in which Olin is not
the surviving corporation or Olin combines with another company and is the
surviving corporation (unless the shareholders of Olin immediately following
such merger, consolidation, combination, or other transaction beneficially own,
directly or indirectly, more than 50% of the aggregate voting stock or other
ownership interests of (x) the entity or entities, if any, that succeed to the
business of Olin or (y) the combined company).
(c) "Disability" means that the Executive has suffered an incapacity due to
physical or mental illness which meets the criteria for disability established
at the time under Olin's short-term disability plan.
(d) "Executive Severance" means:
(i) twelve months of the Executive's then current monthly salary (without
taking into account any reductions which may have occurred at or after the date
of a Change in Control); plus
(ii) an amount equal to the greater of the Executive's average annual award
actually paid under Olin's short-term annual incentive compensation plans or
programs ("ICP") for the three years immediately preceding the date of
Termination or the Executive's then current ICP standard annual award.
(iii) The Executive will not be entitled to receive any other severance
otherwise payable to the Executive under any other severance plan of Olin.
(iv) If on the Termination date the Executive is eligible and is receiving
payments under any then existing Olin disability plan, then the Executive agrees
that all such payments may, and will be, suspended and offset for 12 months
following the Termination date. If after such period the Executive remains
eligible to receive disability payments, then such payments shall resume in the
amounts and in accordance with the provisions of the applicable Olin disability
plan.
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(e) "Potential Change in Control" means:
(i) Olin has entered into an agreement the consummation of which would
result in a Change in Control;
(ii) any person (including Olin) publicly announces an intention to take or
to consider taking actions which if consummated would constitute a Change in
Control;
(iii) Olin learns that any person (other than an employee benefit plan (or
the plan's related trust) of Olin or a subsidiary of Olin) has become the
beneficial owner directly or indirectly of securities of Olin representing 9.5%
or more of the combined voting power of Olin's then outstanding securities
ordinarily entitled to vote in elections of directors; or
(iv) the Board of Directors of Olin adopts a resolution to the effect that,
for purposes of this Agreement, a Potential Change in Control of Olin has
occurred.
(f) "Termination" means:
(i) The Executive is discharged by Olin other than for Cause;
(ii) The Executive terminates his or her employment in the event that:
(1) Olin requires the Executive to relocate the Executive's then office to
an area which is not within reasonable commuting distance, on a daily basis,
from the Executive's then residence, except that prior to a Change in Control a
requirement to relocate the Executive's office to Olin's corporate headquarters
is not a basis for Termination;
(2) Olin reduces the Executive's base salary or fails to increase the
Executive's base salary on a basis consistent (as to frequency and amount) with
Olin's exempt salary system as then in effect or, in the event of a Change in
Control, as in effect immediately prior to the Change in Control;
(3) Olin fails to continue the Executive's participation in its benefit
plans (including incentive compensation and stock options) on substantially the
same basis, both in terms of the amount of the benefits provided (other than due
to Olin's or a relevant operation's financial or stock price performance
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provided such performance is a relevant criterion under such plan) and the level
of the Executive's participation relative to other participants as exists on the
date hereof; provided that, with respect to annual and long term incentive
compensation plans, the basis with which the amount of benefits and level of
participation of the Executive shall be compared shall be the average benefit
awarded to the Executive under the relevant plan during the three years
immediately preceding the date of Termination;
(4) The Executive suffers a Disability which prevents the Executive from
performing the Executive's duties with Olin for a period of at least 180
consecutive days;
(5) Following a Change in Control, Olin fails to substantially maintain its
benefit plans as in effect at the time of the Change in Control, unless
reasonably equivalent arrangements (embodied in an on-going substitute or
alternative plan) have been made with respect to such plans; or
(6) The Executive's duties, position or reporting responsibilities are
diminished.
2. Previous Change in Control Agreement. This Agreement supersedes and
replaces the Executive Agreement dated as of ________, 199_ between Olin and the
Executive./1/
3. Term/Executive's Duties.
(a) This Agreement expires at the close of business on September 30, 2002,
unless prior to that date there is a Change in Control, in which case this
Agreement will expire on the later of the close of business on September 30,
2002 or three years following the date of the Change in Control; provided that
the expiration of this Agreement will not affect any of the Executive's rights
resulting from a Termination prior to such expiration. In the event of the
Executive's death while employed by Olin, this Agreement shall terminate and be
of no further force or effect on the date of his or her death; provided that the
Executive's death will not affect any of the Executive's rights resulting from a
Termination prior to death.
(b) During the period of the Executive's employment by Olin, the Executive
shall devote his or her full time efforts during normal business hours to Olin's
business and affairs, except during reasonable vacation periods and periods of
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/1/ If Executive had a Tier II, use the following language instead: The
Agreement supersedes and replaces the Letter Agreement (Tier II), dated
__________, 19__, between Olin and the Executive." If Executive is a new hire,
use the following: "This paragraph intentionally left blank."
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illness or incapacity. Nothing in this Agreement will preclude the Executive
from devoting reasonable periods required for service as a director or a member
of any organization involving no conflict of interest with Olin's interest,
provided that no additional position as director or member shall be accepted by
the Executive during the period of his employment with Olin without its prior
consent.
(c) The Executive agrees that in the event of any Potential Change in
Control of Olin occurring from time to time after the date hereof, the Executive
will remain in the employ of Olin until the earlier of (i) the end of the six
month period following the occurrence of such Potential Change in Control and
(ii) a Change in Control during which time the Executive will have an office,
title, duties and responsibilities substantially consistent with those
applicable immediately prior to such Potential Change in Control.
4. Executive Severance Payment
(a) In the event of a Termination occurring before the expiration of this
Agreement, Olin will pay the Executive a lump sum in an amount equal to the
Executive Severance. The payment will be made within 10 days of the
Termination.
(b) In the event of a Termination after a Change in Control has occurred,
in addition to the Executive Severance paid under paragraph 4(a) above, Olin
will pay a Change in Control severance premium to the Executive in an amount
equal to two times the Executive Severance. The Change in Control severance
premium, if it becomes due, will be made within 10 days of the Termination.
(c) The amount due under paragraph 4(a) or 4(b) will be reduced to the
extent that, if the amounts were paid in equal monthly installments, no
installment would be paid after the Executive's sixty-fifth birthday.
(d) The Executive will not be required to mitigate the amount of any
payment provided for in paragraph 4(a) or 4(b) by seeking other employment or
otherwise, nor shall any compensation received by the Executive from a third
party reduce such payment. Except as may otherwise be expressly provided
herein, nothing in this Agreement will be deemed to reduce or limit the rights
which the Executive may have under any employee benefit plan, policy or
arrangement of Olin.
5. Other Benefits
(a) If the Executive becomes entitled to payment under paragraph 4(a), the
Executive will receive 12 months service credit under all Olin Pension Plans
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for which the Executive was eligible at the time of the Termination (i.e., under
Olin's qualified Pension Plans to the extent permitted under then applicable
law, otherwise such credit will be reflected in a supplementary pension payment
from Olin to be due at the times and in the manner payments are due the
Executive under such qualified pension plans), and for 12 months from the date
of the Termination the Executive (including covered dependents) will continue to
enjoy coverage under all Olin medical, dental, and life insurance plans to the
extent the Executive was enjoying such coverage immediately prior to the
Termination. The Executive's entitlement to insurance coverage under the
Consolidated Omnibus Budget Reconciliation Act would commence at the end of the
period during which insurance coverage is provided under this Agreement. The
Executive shall accrue no vacation during the 12 months following the date of
Termination but shall be entitled to payment for accrued and unused vacation for
the then current year. If the Executive receives the Executive Severance
(including the amount referred to in paragraph 1(d)(ii)), the Executive shall
not be entitled to an ICP award for the calendar year of Termination if
Termination occurs during the first calendar quarter. Even if the Executive
receives the Executive Severance (including the amount referred to in paragraph
1(d)(ii)) and if Termination occurs during or after the second calendar quarter,
the Executive shall be entitled to a prorated ICP award for the calendar year of
Termination which shall be determined by multiplying his or her then current ICP
standard by a fraction the numerator of which is the number of weeks in the
calendar year prior to the Termination and the denominator of which is 52. The
Executive shall accrue no ICP award following the date of Termination. The
accrued vacation pay and ICP award, if any, shall be paid in a lump sum when the
Executive Severance is paid.
(b) If the Executive becomes entitled to payment under paragraph 4(b), the
pension credit and insurance coverage provided for in paragraph 5(a) will be for
an additional 24-month period beyond the period provided in paragraph 5(a).
(c) Notwithstanding the foregoing paragraphs 5(a) and 5(b), no such service
credit or insurance coverage will be afforded by this Agreement with respect to
any period after the Executive's sixty-fifth birthday.
(d) In the event of a Termination, the Executive will be entitled at Olin's
expense to outplacement counseling and associated services in accordance with
Olin's customary practice at the time (or, if a Change in Control shall have
occurred, in accordance with such practice immediately prior thereto) with
respect to its senior executives who have been terminated other than for cause.
It is understood that the counseling and services contemplated by this paragraph
5(d) are intended to facilitate the obtaining by the Executive of other
employment following a Termination, and payments or benefits by Olin in lieu
thereof will not be available to the Executive.
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(e) Notwithstanding the provisions of Section 10 of the Olin Senior
Executive Pension Plan (the "Senior Plan"), if the Executive is in active
employment with Olin at the date of a Change in Control but has not attained age
55 at such date, the Executive shall (if then a Participant in the Senior Plan)
nevertheless automatically be paid the lump sum amount called for by such
Section 10, except that such lump sum amount will be calculated first, by
calculating the sum equal to the annual benefit which would otherwise be payable
to the Executive at age 65 under all Olin pension plans assuming the Executive
had terminated his or her employment with Olin on the date of the Change in
Control, second, by multiplying such sum by 72%, which is the current percentage
applicable in the calculation of benefits paid to employees retiring from active
service with Olin at age 55 under the early retirement provisions of the Olin
Employees Pension Plan, third, by determining the then lump sum actuarial value
of the product resulting from the second step, and fourth, by deducting from
such lump sum actuarial value the then lump sum actuarial value of the
Executive's accrued annual benefits under all other Olin pension plans. The
actuarial value shall be determined as the amount needed to purchase a fixed
annuity through Metropolitan Life Insurance Company ("Metropolitan") immediately
prior to the Change in Control. In the event such annuity is not available
through Metropolitan, then Prudential Insurance Company or an insurance company
with comparable rating by A.M. Best & Company shall be substituted for
Metropolitan. A lump sum payment under this paragraph 5(e) will be used to
reduce any payments under the Senior Plan which may become due to the Executive
thereafter. The purpose of this paragraph 5(e) is to ensure that an Executive
who is less than age 55 at the time of the Change in Control receives a lump sum
payment which when combined with the value of the Executive's pension benefits
from all other Olin pension plans preserves the 72% age 55, subsidized early
retirement factor, rather than the actuarial reduction. Such lump sum payment
shall be discounted by the same interest rate used by the insurance company to
determine the actuarial value to provide for the deferral of the benefit until
the Executive reaches age 55.
(f) If the Executive becomes entitled to the payment under paragraph 4(b),
at the end of the period for insurance coverage provided in accordance with
paragraph 5(b), the Executive shall be entitled to continue in Olin's medical
and dental coverage (including dependent coverage) on terms and conditions no
less favorable to the Executive as in effect prior to the Change in Control for
the Executive until the Executive reaches age 65; provided that if the Executive
obtains other employment which offers medical or dental coverage to the
Executive and his or her dependents, the Executive shall enroll in such medical
or dental coverage, as the case may be, and the corresponding coverage provided
to the Executive hereunder shall be
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secondary coverage to the coverage provided by the Executive's new employer so
long as such employer provides the Executive with such coverage.
(g) If there is a Change in Control, Olin shall not reduce or diminish the
insurance coverage or benefits which are provided to the Executive under
paragraph 5(a), 5(b) or 5(f) during the period the Executive is entitled to such
coverage; provided the Executive makes the premium payments required by active
employees generally for such coverage, if any, under the terms and conditions of
coverage applicable to the Executive. Following a Change in Control, incentive
compensation plans in which the Executive participates shall contain reasonable
financial performance measures and shall be consistent with practice prior to
the Change in Control.
6. Participation in Change in Control/Section 4999 of Internal Revenue
Code
(a) In the event that the Executive participates or agrees to participate
by loan or equity investment (other than through ownership of less than 1% of
publicly traded securities of another company) in a transaction ("acquisition")
which would result in an event described in paragraph 1(b)(i) or (ii), the
Executive must promptly disclose such participation or agreement to Olin. If
the Executive so participates or agrees to participate, no payments due under
this Agreement or by virtue of any Change in Control provisions contained in any
compensation or benefit plan of Olin will be paid to the Executive until the
acquiring group in which the Executive participates or agrees to participate has
completed the acquisition. In the event the Executive so participates or agrees
to participate and fails to disclose his participation or agreement, the
Executive will not be entitled to any payments under this Agreement or by virtue
of Change in Control provisions in any Olin compensation or benefit plan,
notwithstanding any of the terms hereof or thereof.
(b) Any payments made pursuant to this Agreement or by virtue of Change in
Control provisions in any Olin compensation or benefit plan which are subject to
tax under Section 4999 of the Internal Revenue Code or a successor provision
("4999") will be increased so that after paying the tax imposed by 4999 and the
income and employment tax on the amount of the increase provided by this
paragraph (b), the Executive will have received a net payment equal to that
which he would have received if 4999 did not apply.
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7. Successors; Binding Agreement
(a) Olin will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of Olin, by agreement, in form and substance satisfactory to
the Executive, expressly to assume and agree to perform this Agreement in the
same manner and to the same extent that Olin would be required to perform if no
such succession had taken place. Failure of Olin to obtain such assumption and
agreement prior to the effectiveness of any such succession will be a breach of
this Agreement and entitle the Executive to compensation from Olin in the same
amount and on the same terms as the Executive would be entitled to hereunder had
a Termination occurred on the succession date. As used in this Agreement,
"Olin" means Olin as defined in the preamble to this Agreement and any successor
to its business or assets which executes and delivers the agreement provided for
in this paragraph 7 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law or otherwise.
(b) This Agreement shall be enforceable by the Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
8. Notices. For the purpose of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive: ___________________
___________________
___________________
If to the Company: ▇▇▇▇ Corporation
▇▇▇ ▇▇▇▇▇▇▇ 7
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: Corporate Secretary
or to such other address as either 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.
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9. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the Commonwealth
of Virginia (without giving effect to its conflicts of law).
10. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is agreed to
in writing signed by the Executive and Olin. 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.
11. 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 Agreement.
12. Withholding of Taxes. Olin may withhold from any benefits payable
under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or governmental regulation or ruling.
13. Non-assignability. This Agreement is personal in nature and neither
of the parties hereto shall, without the consent of the other, assign or
transfer this Agreement or any rights or obligations hereunder, except as
provided in paragraph 7 above. Without limiting the foregoing, the Executive's
right to receive payments hereunder shall not be assignable or transferable,
whether by pledge, creation of a security interest or otherwise, other than a
transfer by his will or by the laws of descent or distribution, and, in the
event of any attempted assignment or transfer by the Executive contrary to this
paragraph, Olin shall have no liability to pay any amount so attempted to be
assigned or transferred.
14. No Employment Right. This Agreement shall not be deemed to confer on
the Executive a right to continued employment with Olin.
15. Disputes/Arbitration.
(a) Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration at Olin's corporate
headquarters 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
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jurisdiction; provided, however, that the Executive shall be entitled to seek
specific performance of the Executive's right to be paid during the pendency of
any dispute or controversy arising under or in connection with this Agreement.
(b) Olin shall pay all reasonable legal fees and expenses, as they become
due, which the Executive may incur to enforce this Agreement through arbitration
or otherwise unless the arbitrator determines that Executive had no reasonable
basis for his claim. Should Olin dispute the entitlement of the Executive to
such fees and expenses, the burden of proof shall be on Olin to establish that
the Executive had no reasonable basis for his claim.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the day and year first above set forth.
▇▇▇▇ CORPORATION
By: _________________________
_________________________