EXHIBIT 10.12
FORM OF SEVERANCE AGREEMENT
The Company has entered into the following Amended and Restated Severance
Agreement with each of the "named executive officers" (as defined in Item
402(a)(3) of Regulation S-K) of the registrant and certain other officers of the
Company. The individual Severance Agreements are identical to the form of the
Amended and Restated Severance Agreement, except that, in the case of J. ▇▇▇▇▇
▇▇▇▇▇▇▇▇, Chairman and Chief Executive Officer, the second line of Section
5(b)(2) is ". . . an amount equal to four (4) times Pay . . ." rather than ". .
.. an amount equal to three (3) times Pay . . ."
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AMENDED AND RESTATED SEVERANCE AGREEMENT by and between ▇▇▇▇▇▇▇
Chemical Company, a Delaware corporation, (the "Company") and ______________
("Executive"). This document is a restatement of that certain Severance
Agreement, originally dated as of _________, 20__by and between the Company and
Executive, incorporating prior amendments and an amendment effected this _____
day of _________, 2002. This amendment and restatement does not change the
original effective date of the Agreement.
WHEREAS, Executive is a key management executive employed by the
Company, and
WHEREAS, the Company considers the establishment and maintenance of a
sound and vital management team to be essential to protecting and enhancing the
interests of the Company and its shareowners, and
WHEREAS, the Company wishes to have the benefits of Executive's full
time and attention to the affairs of the Company, particularly during any period
or circumstance that may otherwise cause diversion, and
WHEREAS, the Company wishes to position itself to retain able managers
by adopting compensation practices competitive with peer companies by providing
similar severance benefits consistent with its compensation practices; and
WHEREAS, the Company and Executive entered into an amendment to this
Agreement dated May 3, 2001, the text of which they desire to incorporate into
this restated Agreement; and
WHEREAS, the Company and Executive desire to further amend this
Agreement by deleting that part of Section 20 that prohibited Executive from
disclosing information about the existence or content of this Agreement.
NOW, THEREFORE, in order to induce Executive to continue in the
employment of the Company and in consideration of the mutual covenants herein
contained, and other good and valuable consideration, the Company and Executive
agree as follows:
1. Definitions. The terms defined in this Section shall have the
meanings specified below:
"Cause" means (i) a material breach by Executive of the terms of this
Agreement (including, but not limited to, any disclosure in violation of Section
20 hereof), (ii) the conviction of Executive of any criminal act that the Board
shall, in its sole and absolute discretion, deem to constitute Cause for
purposes of this Agreement, or (iii) conduct by Executive in his office with the
Company that is grossly inappropriate and demonstrably likely to lead to
material injury to the Company, as determined by the Board acting reasonably and
in good faith; provided, however, that in the case of (iii) above, such conduct
shall not constitute Cause unless the Board shall have delivered to Executive
notice setting forth with specificity (x) the conduct deemed to qualify as
Cause, (y) reasonable action that would remedy such objection, and (z) a
reasonable time (not less than thirty (30) days) within which Executive may take
such remedial action, and Executive shall not have taken such specified remedial
action within such specified reasonable time.
"Change in Control" means a change in control of the Company of a
nature that would be required to be reported (assuming such event has not been
"previously reported") in response to Item 1(a) of a Current Report on Form 8-K,
as in effect on the date hereof, pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934 ("Exchange Act"); provided that, without
limitation, a Change in Control shall be deemed to have occurred at such time as
(i) any "person" within the meaning of Section 14(d) of the Exchange Act, other
than the Company, a subsidiary of the Company, or any employee benefit plan(s)
sponsored by the Company or any subsidiary of the Company, is or has become the
"beneficial owner," as defined in Rule 13d-3 under the Exchange Act, directly or
indirectly, of 19% or more of the combined voting power of the outstanding
securities of the Company ordinarily having the right to vote in the election of
directors; provided, however, that the following will not constitute a Change in
Control: any acquisition by any corporation if, immediately following such
acquisition, more than 75% of the outstanding securities of the acquiring
corporation ordinarily having the right to vote in the election of directors is
beneficially owned by all or substantially all of those persons who, immediately
prior to such acquisition, were the beneficial owners of the outstanding
securities of the Company ordinarily having the right to vote in the election of
directors, or (ii) individuals who constitute the Board on the date hereof (the
"Incumbent Board") have ceased for any reason to constitute at least a majority
thereof; provided, however, that any person becoming a director subsequent to
the date hereof whose election, or nomination for election by the Company's
shareowners, was
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approved by a vote of at least three-quarters (3/4) of the directors comprising
the Incumbent Board (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee for director
without objection to such nomination) shall be, for purposes of the Plan,
considered as though such person were a member of the Incumbent Board, or (iii)
upon approval by the Company's shareowners of a reorganization, merger or
consolidation, other than one with respect to which all or substantially all of
those persons who were the beneficial owners, immediately prior to such
reorganization, merger or consolidation, of outstanding securities of the
Company ordinarily having the right to vote in the election of directors own,
immediately after such transaction, more than 75% of the outstanding securities
of the resulting corporation ordinarily having the right to vote in the election
of directors; and (iv) upon approval by the Company's shareowners of a complete
liquidation and dissolution of the Company or the sale or other disposition of
all or substantially all of the assets of the Company other than to a
subsidiary.
"Date of Termination" means (i) if employment is terminated by the
Company for Cause or by Executive for Good Reason, the date specified in the
Notice of Termination or (ii) if employment is terminated by the Company for any
reason other than Cause, the date specified in the Notice of Termination, which
in no event shall be a date earlier than ninety (90) days after the date on
which a Notice of Termination is given, unless an earlier date has been
expressly agreed to in writing by Executive either in advance of, or after,
receiving such Notice of Termination. In the case of termination by the Company
of Executive's employment for Cause, if Executive has not previously expressly
agreed in writing to such termination, then within thirty (30) days after
receipt by Executive of the Notice of Termination with respect thereto, which
Notice shall provide a reasonably detailed explanation of the reasons therefor,
Executive may notify the Company that a dispute exists concerning the
termination, in which event the Date of Termination shall be the date set either
by mutual written agreement of the parties or by the arbitrators in a proceeding
as provided in Section 19 hereof. During the pendency of any such dispute, the
Company will continue to pay Executive his full compensation in effect
immediately prior to the time the Notice of Termination is given and until the
dispute is resolved in accordance with Section 19.
"Disability" has the meaning assigned such term in the Company's
long-term disability plan, from time to time in effect.
"Good Reason" means (i) any reduction by the Company in the rate or
frequency of payment of Executive's annual base salary from the rate or
frequency thereof in effect at any time between the time immediately prior to
the Potential Change in Control or the Change in Control (as applicable in the
circumstances) through the Date of Termination in the Notice of Termination
relating to Executive, or (ii) any reduction by the Company in Executive's Pay
from the highest level in effect at any time between the time immediately prior
to the Potential Change in Control or the Change in Control (as applicable in
the circumstances) through the Date of Termination in the Notice of Termination
relating to Executive, or (iii) the Company's requiring Executive to be based at
an office that is greater than thirty-five (35) miles from where Executive's
office is located immediately prior to the Potential Change in Control or the
Change in Control (as applicable in the circumstances), except for required
travel on the Company's business to an extent substantially consistent with the
business travel obligations that Executive undertook on behalf of the Company
immediately prior to the Potential Change in Control or the Change in Control
(as applicable in the circumstances), or (iv) the exclusion of Executive from
participation in any new compensation or benefit arrangement offered to
similarly situated employees of the Company, or (v) a reduction in Executive's
level of responsibility, position (including status, office, title, reporting
relationships or working conditions), authority or duties (including changes
resulting from the assignment to Executive of any duties inconsistent with his
positions, duties or responsibilities as in effect immediately prior to the
Potential Change in Control or the Change in Control, as applicable in the
circumstances), except that the events described in this clause (v) shall not
constitute Good Reason following a Spinoff merely due to the fact that the
Company or Spinco, whichever is Executive's employer, is a smaller company as a
result of such Spinoff (in terms of assets, revenues or any other financial
measure) than the Company immediately prior to the Spinoff. Good Reason does not
include death or Disability of Executive. Anything in this Agreement to the
contrary notwithstanding, a termination by Executive for any reason (including,
without limitation, Retirement) during the thirty (30) day period immediately
following the first anniversary of a Change in Control (other than a Spinoff, if
applicable) shall be deemed to be a termination for Good Reason for all purposes
of this Agreement.
"Notice of Termination" means a notice which shall indicate the
specific termination provision in this Agreement relied upon and shall provide
in reasonable detail the basis therefor.
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"Pay" means the three-year average of the sum of (a) plus (b)
(described below) for each such year ("Total Annual Compensation"), using for
this purpose the three years in which Executive's Total Annual Compensation was
the highest (out of the ten consecutive years consisting of the year in which
termination of Executive's employment occurs and the nine preceding years (the
"Comparison Years"); provided, however, if Executive's Total Annual Compensation
for the year of termination cannot be reasonably estimated, the Comparison Years
shall consist of the ten consecutive years ended prior to the year in which
termination of Executive's employment occurs). For purposes of the foregoing,
(a) represents Executive's base annual salary for the year in question, and (b)
represents an amount equal to the bonus, stock grants, incentive compensation
(including, but not limited to, compensation earned by Executive in such year
under the Company's various performance plans and including, in the case of
options granted that year, the Black-Scholes value thereof as of the date of
grant) and other variable compensation earned by Executive with respect to the
year in question (prior to any deferral thereof).
"Person" means any individual, corporation, partnership, group,
association or other person, as such term is used in Section 14(d) of the
Exchange Act, other than the Company, a wholly owned subsidiary of the Company
or any employee benefit plan(s) sponsored by the Company or a subsidiary of the
Company.
"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) after the date of this
Agreement, any person (other than (i) the Company or any or its subsidiaries,
(ii) a trustee or other fiduciary holding securities under an employee benefit
plan of the Company or any of its subsidiaries, (iii) an underwriter temporarily
holding securities pursuant to an offering of such securities, or (iv) a
corporation owned, directly or indirectly, by the shareowners of the Company in
substantially the same proportions as their ownership of stock of the Company)
becomes the beneficial owner, directly or indirectly, of securities of the
Company representing 10% or more of the combined voting power of the Company's
then-outstanding securities; or (d) the Board adopts a resolution to the effect
that, for purposes of this Agreement, a Potential Change in Control has
occurred. Notwithstanding the foregoing, neither the taking of any Board action
to authorize the exploration of a Spinoff, the public announcement of the
Company's intention to explore, consider or engage in a Spinoff, nor the signing
of any agreement for the purpose of effecting or facilitating a Spinoff, shall
constitute a Potential Change in Control.
"Retirement" means termination on or after Executive's becoming
eligible for a retirement benefit (including early retirement) under the
Company's Retirement Assistance Plan or a substantially similar successor
pension plan.
"Spinoff" means any split up of the business of the Company into two or
more separate business segments, followed by a spin-off or distribution of one
Ior more of such businesses to the Company's shareowners, whether or not such
transactions take the form of a disposition of assets that requires approval of
the Company's shareowners as a matter of Delaware law.
"Spinco" means the corporation containing the business of the Company
that is distributed to the shareowners of the Company in a Spinoff.
2. Agreement to Provide Services; Right to Terminate; Vesting.
(a) Executive agrees to continue in employment with the Company.
Notwithstanding anything contained herein to the contrary, this Agreement shall
not be deemed to confer on Executive any right to continued employment with the
Company or to impose on the Company any obligation with respect to the continued
employment of Executive.
(b) Any purported termination by the Company or by Executive
following the Change in Control or prior to or following a Potential Change in
Control, as the case may be, shall be communicated by written Notice of
Termination to the other party hereto.
(c) Upon a Change in Control, the terms and conditions of the
Company's long-term incentive plans and any applicable award agreements
thereunder shall control with respect to the vesting of any options or other
awards thereunder then held by Executive.
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3. Term of Agreement. Unless sooner terminated in accordance with
the following sentence, the term of this Agreement shall be for an initial three
(3) year period commencing on the date hereof, and shall be automatically
renewed at the end of the initial three-year period and annually thereafter, for
an additional one (1) year period unless the Company gives notice of non-renewal
at least ninety (90) days before expiration; provided, however, if a Change in
Control (other than a Spinoff) or a Potential Change in Control occurs prior to
the expiration of the term hereof, this Agreement shall be extended to the date
two (2) years following the date of the Change in Control or Potential Change in
Control. If, at any time during the term of this Agreement and before the
occurrence of a Change in Control or a Potential Change in Control, there occurs
a reduction in Executive's level of responsibility, position, authority or
duties, the Company may in its sole discretion, by written notice to Executive,
terminate this Agreement.
4. Entitlement upon Termination of Employment. Executive shall be
entitled to the benefits provided in Section 5 hereof upon termination of
employment with the Company following the occurrence of a Change in Control
while this Agreement is in effect; provided, however, that if:
(a) during the term of this Agreement a Potential Change in
Control occurs, and
(b) Executive's employment is terminated within a period of
one-hundred twenty (120) days before or after the occurrence
of such Potential Change in Control (i) by the Company other
than for Cause, death or Disability, or (ii) by Executive for
Good Reason,
then, for the purposes of this Agreement, a Change in Control shall be deemed to
have occurred during the term of this Agreement and the termination of
Executive's employment shall be deemed to have occurred following the Change in
Control.
5. Compensation upon Termination; Other Agreements.
(a) If, following a Change in Control and during the term of this
Agreement, (i) Executive's employment is terminated by reason of death,
Retirement or Disability, (ii) the Company terminates Executive's employment for
Cause, or (iii) Executive voluntarily terminates his employment without Good
Reason, the Company shall pay Executive his salary and variable compensation
through the Date of Termination at the rate in effect immediately prior to the
time a Notice of Termination is given (if applicable), plus any benefits or
awards (including cash and stock components) which pursuant to the terms of any
compensation plans of the Company have been earned or become payable, but which
have not yet been paid (including amounts which previously had been deferred at
Executive's election and including any applicable death, disability or
retirement benefits arising outside the scope of this Agreement). Such benefits
or awards shall be paid under the terms and conditions of the applicable
compensation plans as then in effect, including any applicable penalty or
forfeiture provisions therein. Thereupon (except to the extent that Retirement
during the thirty (30) day period immediately following the first anniversary of
a Change in Control shall be deemed to be a termination for Good Reason for all
purposes of this Agreement), the Company shall have no further obligations to
Executive or his estate under this Agreement.
(b) If during the term of this Agreement Executive's employment by
the Company is terminated following a Change in Control (i) by the Company other
than for Cause, death or Disability, or (ii) by Executive for Good Reason, then,
in addition to any other benefits accruing to Executive outside the scope of
this Agreement (including, without limitation, benefits accruing under the terms
of the ▇▇▇▇▇▇▇ Retirement Assistance Plan, the Company's Unfunded Retirement
Income Plan and the Company's Excess Retirement Income Plan), the Company shall
pay to Executive the following:
(1) Executive's salary through the Date of Termination at
the rate in effect immediately prior to the time a Notice of
Termination is given, plus any benefits or awards (including cash and
stock components) which pursuant to the terms of any compensation plans
of the Company have been earned or become payable through the Date of
Termination, but which have not yet been paid (including amounts which
previously had been deferred at Executive's election) and such payment
shall be no later than the fifth day following the Date of Termination;
and
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(2) as severance pay and in lieu of any further salary or
other compensation for periods subsequent to the Date of Termination,
an amount equal to three (3) times Pay and such payment shall be no
later than the fifth day following the Date of Termination unless the
Company reasonably and in good faith believes that the limitation set
forth in Section 6 hereof may be applicable in which case payment shall
be made as soon as practicable and in no event later than sixty (60)
days from Date of Termination.
(c) If during the term of this Agreement Executive's employment by
the Company is terminated following a Change in Control (i) by the Company other
than for Cause, death or Disability, or (ii) by Executive for Good Reason, then,
in addition to and without limitation of any similar benefits accruing to
Executive outside the scope of this Agreement (after giving effect to any
service or age credits conferred under subsection (d) below), the Company shall
maintain in full force and effect, for the continued benefit of Executive and
Executive's dependents for three years after the Date of Termination, all
insured and self-insured employee welfare benefit plans in which Executive was
entitled to participate immediately prior to the Date of Termination, provided
that Executive's continued participation (or that of Executive's dependents) is
possible under the general terms and provisions of such plans (and any
applicable funding media) and Executive continues to pay an amount equal to
Executive's regular contribution under such plans for such participation. In the
event that Executive's participation in any such plan is barred, the Company, at
its sole cost and expense, shall arrange to have issued for the benefit of
Executive and Executive's dependents individual policies of insurance providing
benefits substantially similar (on an after-tax basis) to those which Executive
otherwise would have been entitled to receive under such plans pursuant to this
paragraph (c) (taking into account what Executive would have contributed under
such plans) or, if such insurance is not available at a reasonable cost to the
Company, the Company shall otherwise provide equivalent benefits (on an
after-tax basis).
(d) If during the term of this Agreement Executive's employment is
terminated following a Change in Control (i) by the Company other than for
Cause, death or Disability, or (ii) by Executive for Good Reason, then, in
addition to and without limitation of any other benefits accruing to Executive
outside the scope of this Agreement, the Company shall pay to Executive, as soon
as practicable and in no event later than sixty (60) days from the Date of
Termination, an amount in cash equal to the actuarial equivalent of the excess
of (i) minus (ii), where (i) equals the amount of the retirement benefits
(determined as a straight life annuity payable to Executive on his normal
retirement date) to which Executive would have been entitled under the terms of
the ▇▇▇▇▇▇▇ Retirement Assistance Plan ("ERAP"), the Company's Unfunded
Retirement Income Plan and the Company's Excess Retirement Income Plan
(hereinafter referred to collectively as the "Retirement Plan") as if Executive
had accumulated five additional years of total service as defined in ERAP and
Executive's age was increased by five years, and where (ii) equals the amount of
the retirement benefits (determined as a straight life annuity payable to
Executive on Executive's normal retirement date), to which Executive actually is
entitled pursuant to the provisions of the Retirement Plan. For purposes of this
subparagraph (d), "actuarial equivalent" shall be determined using the same
methods and assumptions utilized under the Retirement Plan for computing a lump
sum payment as of the date of distribution to Executive under this Agreement.
(e) The amount of any payment provided for in this Section 5 shall
not be reduced, offset or subject to recovery by the Company by reason of any
compensation earned by Executive as the result of employment by another employer
after the Date of Termination or otherwise.
6. Limitation on Compensation.
(a) If the Company reasonably determines, based upon the opinion
of the firm serving as independent accounting advisors to the Company
immediately prior to the Potential Change in Control or the Change in Control,
as applicable (the "Accounting Firm"), that payment of any or all of the
compensation payments and benefits payable under this Agreement together with
any other amounts received by Executive that must be included in such
determination, would result in the payment of an "excess parachute payment" as
defined in Section 280G of the Internal Revenue Code of 1986, as amended (the
"Code"), then the Company will reduce the amount otherwise due and owing to
Executive under this Agreement to the maximum amount that would permit a
determination that Executive has not received an excess parachute payment under
the foregoing Code provision if, but only if, the amount payable to Executive
hereunder without regard for the foregoing limitation and without the inclusion
of the Additional Amount does not exceed the amount payable to Executive with
regard for such limitation by more than $30,000.
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(b) Company may reduce the compensation and benefits payable under
this Agreement pursuant to this Section 6 only if within thirty (30) days of
Executive's termination it provides Executive with an opinion of the Accounting
Firm that Executive will be considered to have received "excess parachute
payments" as defined in Section 280G if he were to receive the full amounts
owing pursuant to the terms of this Agreement. Such opinion shall be based upon
the proposed regulations under Code Sections 280G and 4999 or substantial
authority within the meaning of Code Section 6662, and shall set forth with
particularity the smallest amount by which the payment due Executive hereunder
would have to be reduced to avoid the imposition of any excise tax or the denial
of any deduction pursuant to Code Sections 280G and 4999 and shall demonstrate
the relation of such amount to the amounts set forth in paragraph (a). Executive
shall, if he agrees with the determination of Company, notify Company in writing
of the compensation payments and/or benefits that he wishes to have reduced in
order to comply with the provisions of this Section 6. In the event that
Executive fails to designate an order of priority for the application of any
such reduction, such reduction shall be made in the order of priority determined
by Company. In the event that Executive does not agree with the opinion or
calculation presented and he is unable to resolve any dispute with Company
regarding such disagreement within a period of thirty (30) days of receipt of
the opinion referenced above, Executive may submit the resolution of this matter
to arbitration pursuant to Section 19.
7. Additional Amount.
(a) The Company shall pay to Executive an amount (the "Additional
Amount") equal to the excise tax under Section 4999 of the Code, if any,
incurred by Executive by reason of the payments under this Agreement and any
other plan, agreement or understanding between Executive and the Company or its
parent, subsidiaries or affiliates (the "Separation Payments") constituting
excess parachute payments pursuant to Code Section 280G, plus all excise taxes
and federal, state and local income or employment taxes incurred by Executive
with respect to receipt of the Additional Amount. The Additional Amount shall
also take into account Executive's loss of tax deduction, if any, caused by
reason of Executive's receipt of the Additional Amount. It is the intent of the
parties that payment of the Additional Amount will compensate Executive such
that after payment by Executive of all taxes (including any interest or
penalties imposed with respect to such taxes), including, without limitation,
any income and employment taxes (and any interest and penalties imposed with
respect thereto) and excise tax imposed upon the Additional Amount, Executive
retains an amount of the Additional Amount equal to the excise tax (and any
interest and penalties thereon) imposed upon the Separation Payments.
(b) All determinations required to be made under this Section 7,
including whether an Additional Payment is required and the amount of any
Additional Amount, shall be made by the Accounting Firm, which shall provide
detailed supporting calculations to the Company and Executive. In computing
taxes, the Accounting Firm shall use the highest marginal federal, state and
local income tax rates applicable to Executive and shall assume the full
deductibility of state and local income taxes for purposes of computing federal
income tax liability, unless Executive demonstrates that he will not in fact be
entitled to such a deduction for the year of payment.
(c) The Additional Amount, computed assuming all of the Separation
Payments constitute excess parachute payments as defined in Code Section 280G,
shall be paid to Executive with the payment under Section 5(b)(2) hereof unless
Company at the same time as the payment of the such payments provides Executive
with an opinion of the Accounting Firm that Executive will not incur an excise
tax on part or all of the Separation Payments. Any such opinion shall be based
upon any then applicable regulations (including proposed regulations if no final
or temporary regulations are applicable) under Code Sections 280G and 4999 or
substantial authority within the meaning of Code Section 6662. If such opinion
applies only to part of the Separation Payments, the Company shall pay Executive
the Additional Amount with respect to that part of the Separation Payments not
covered by the opinion.
(d) The Additional Amount shall be subject to adjustment so as to
avoid either an over or underpayment of the Additional Amount to Executive. The
Company shall establish procedures that shall be communicated in writing to
Executive and shall be considered a part of this Agreement regarding the
foregoing. Such procedures may be amended or modified at any time that the terms
of this Agreement are otherwise subject to amendment but may not be amended at
any time following the occurrence of an event entitling Executive to benefits
under the terms of Sections 4 and 5 hereof.
8. Successors and Assigns. This Agreement shall inure to the
benefit of and be enforceable by Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees, and
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legatees. If Executive should die while any amount would still be payable
hereunder if Executive had continued to live, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
Executive's devisee, legatee or other designee or, if there be no such designee,
to Executive's estate. This Agreement shall also be binding upon and inure to
the benefit of any successor to the Company by reason of any merger,
consolidation, sale of assets, dissolution or other reorganization of the
Company. In the event of a Spinoff, this Agreement shall remain in effect in
accordance with its terms as between Executive and the Company or Spinco,
whichever corporation shall be the employer of Executive immediately following
the Spinoff, and the term "the Company" as used herein shall thereafter mean
such employer corporation.
9. Fees and Expenses. The Company shall reimburse Executive, on a
current basis, for all reasonable legal fees and related expenses incurred by
Executive in connection with this Agreement, including without limitation, (i)
all such fees and expenses, if any, incurred in contesting or disputing any
termination of Executive's employment after the Change in Control or (ii)
Executive's seeking to obtain or enforce any right or benefit provided by this
Agreement, in each case, regardless of whether or not Executive's claim is
upheld by an arbitral panel or a court of competent jurisdiction; provided,
however, Executive shall be required to repay any such amounts to the Company to
the extent that an arbitral panel or a court issues a final and non-appealable
order, judgment, decree or award setting forth the determination that the
position taken by Executive was frivolous or advanced by Executive in bad faith.
10. Taxes. All payments to be made to Executive under this
Agreement will be subject to required withholding of federal, state and local
income and employment taxes.
11. Set-off. The right of Executive to receive benefits under this
Agreement shall be absolute and, except as provided below, shall not be subject
to any set-off, counter-claim, recoupment, defense, duty to mitigate or other
rights the Company may have against him or anyone else. Notwithstanding anything
herein to the contrary, benefits to Executive accruing under this Agreement
shall be off-set by the amount of any severance benefits payable to Executive
under the Company's Employee Protection Plan or any successor plan.
12. Executive's Indemnity. Executive shall be entitled to the
benefits of the indemnity provided by the Company's certificate of
incorporation, bylaws, or otherwise immediately prior to the Potential Change in
Control or the Change in Control (as applicable in the circumstances), and any
subsequent changes to the certificate of incorporation, bylaws, or otherwise
reducing the indemnity granted to such Executive shall not affect the rights
granted hereunder. The Company may not reduce these indemnity benefits confirmed
to Executive hereunder without the written consent of Executive.
13. Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware without regard to
principles of choice of laws.
14. Notice. For purposes 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
registered or certified mail, return receipt requested, postage prepaid and
addressed, in the case of the Company, to ▇▇▇▇▇▇▇ Chemical Company, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ (until changed by the Company as
provided below) or, in the case of Executive, to the address set forth below
Executive's signature, provided that all notices to the Company shall be
directed to the Chairman of the Board of the Company, 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.
15. Survival. The respective obligations of, and benefits afforded
to, the Company and Executive as provided in Sections 5, 6, 7, 8, 9, 10, 11, 12,
19 and 20 of this Agreement shall survive termination of this Agreement.
16. Severability. The invalidity and unenforceability of any
particular provision of this Agreement shall not affect any other provision of
this Agreement, and the Agreement shall be construed in all respects as if the
invalid or unenforceable provision were omitted.
17. Related Agreements. To the extent that any provision of any
other agreement between the Company and Executive shall limit, qualify or be
inconsistent with any provision of this Agreement, then for
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purposes of this Agreement, while the same shall remain in force, the provisions
of this Agreement shall control and such provision of such other agreement shall
be deemed to have been superseded, and to be of no force and effect, as if such
other agreement had been formally amended to the extent necessary to accomplish
such purpose.
18. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is agreed to
in a writing signed by Executive and a duly authorized officer of the Company.
No waiver by a party hereto at any time of any breach by the other party hereto
of, or of 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 expressly set forth in this Agreement.
19. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled exclusively by arbitration in
the State of Tennessee by three arbitrators in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrators' award in any court having jurisdiction; provided, however, that
Executive shall be entitled to seek specific performance of Executive's 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. Except as
provided in Section 9, the Company shall bear all costs and expenses arising in
connection with any arbitration proceeding pursuant to this Section 19.
20. Confidentiality. Executive agrees that Executive will not at
any time communicate or disclose to any unauthorized person, without the written
consent of the Company, any proprietary processes of the Company or any of its
subsidiaries or other confidential information concerning their business,
affairs, products, suppliers or customers which, if disclosed, would have a
material adverse effect upon the business or operations of the Company and its
subsidiaries, taken as a whole. It is understood, however, that the obligations
of this Section 20 shall not apply to the extent that the aforesaid matters (i)
are disclosed in circumstances where Executive is legally required to do so or
(ii) become generally known to and available for use by the public otherwise
than by Executive's wrongful act or omission.
21. 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.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
▇▇▇▇▇▇▇ Chemical Company
By:
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Name:
Title:
EXECUTIVE
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Address:
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