CONSULTING AGREEMENT - 2006 Mr. John L. Gigerich
CONSULTING
AGREEMENT - 2006
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CONSULTING
AGREEMENT (this “Agreement”), dated as of July 19, 2006 (the “Effective Date”),
by and between Nalco Company, a Delaware corporation (the “Company”), and ▇▇.
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▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ (“Consultant”).
B
A C K G
R O U N D:
The
Company and Consultant desire to enter into this Agreement, effective as
of the
Effective Date, to set forth the terms and conditions of Consultant’s consulting
relationship with the Company.
In
consideration of the mutual covenants and promises contained herein, the
Company
and Consultant, agree:
1. Consulting
Relationship.
Subject
to the terms and conditions set forth herein, the Company shall retain
Consultant to perform the following services for a period of up to two years:
supervise the Company’s Information Technology, customer service activities and
its business reorganization projects.
During
the Term, Consultant shall also perform such additional duties as may from
time
to time be assigned to him by the Chief Executive Officer (“CEO”). Consultant
shall have the consulting title of Vice President, Administration. Collectively,
Consultant’s activities under this Agreement shall be referred to as the
Services. Consultant is not an employee of the Company and shall at all times
be
an independent contractor. Consultant shall not be entitled to any benefits,
medical insurance, worker’ compensation or compensation benefits that are
available to employees of the Company either by plan, agreement or policy,
and
the Company shall not withhold any taxes or other amounts from the amounts
paid
hereunder or
otherwise treat Consultant as if he were an employee. Consultant’s rights to
payments and other amounts from the Company shall be limited to those
contractual rights provided in this Agreement.
2. Performance.
During
the Term, Consultant will serve the Company faithfully and to the best of
his
ability and will devote his full business time, energy, experience and talents
to the business of the Company. At his option, Consultant, upon thirty (30)
days
advance written notice to the Company may reduce his service level
hereunder by 50% (the “Reduced Services”). The Consultant shall not be entitled
to any long-term incentive compensation for any period during which he is
performing Reduced Services.
3. Term.
The
term of this Agreement shall begin on July 1, 2006 and shall continue for
a
period of no more than two and one-half (2.5) years from such date (the “Term”).
During the Term, Consultant may terminate this Agreement at his will by
providing fifteen (15) days notice to the Company, and the Company may
immediately terminate this Agreement by providing notice to Consultant (“At Will
Termination”). In the event of an At Will Termination, all obligations under
this Agreement shall end on such termination.
4. Compensation
and Benefits.
During
the Term, the Consultant shall be entitled to:
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a.
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Base
Payments. Base Payments, payable in monthly installments of $35,650
on the
last day of the month in accordance with the Company's procedures
(without
withholdings), (a gross annual rate of $427,800) - the Consultant
shall be
eligible for increases in the Base Payments consistent with the
annual
salary increase policies for employees;
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b.
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Management
Incentive Plan. A payment of an amount equivalent to the amount
that would
have been payable to Consultant under the Company’s Amended and Restated
Management Incentive Plan (had Consultant been an employee) (“MIP”), with
a target award of $141,809 (representing 50% of a base amount of
$283,618). For partial years, the payment required under this Section
4(b)
shall be made on a pro-rata basis, subject to performance conditions
having been met, and the payment required in this Section 4(b)
shall be
proportionately reduced during periods of Reduced Services;
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c.
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Holidays.
The same holidays as employees of the Company;
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d.
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Vacation.
Consultant shall receive three weeks of vacation during each calendar
year, pro-rated for partial calendar years, without affecting the
Company’s Base Payment obligation, and for any unused vacation at the end
of the Term, the Company shall pay Consultant at the same annual
base
payment rate for a period equal to the period of the unused vacation;
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e.
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Long
Term Equity Incentive Compensation - Performance
Shares.
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2006-08
Cycle:
Consultant shall receive 7,257 Performance Shares as part of the 2006-08
Cycle
Award grant of performance shares under the Company’s 2004 Stock Incentive Plan.
The terms and conditions of this award shall be those terms and conditions
applying to similar awards made to the Company’s employees. The Consultant has
received a copy of the Nalco Holding Company prospectus for this award. In
the
event of a termination of this Agreement for reasons other than either a
breach
of this Agreement by Consultant or a for cause termination, or should this
Agreement expire, Consultant shall, subject to the performance conditions
of the
plan being met, receive a pro-rated portion of 2006-08 Cycle Award equal
to the
grant amount multiplied by a factor equal to the number of full months of
full
time performance during the 2006-08 Cycle Award period (not including Reduced
Services) under this Agreement, plus six months, divided by thirty-six months.
2007-09
Cycle: If
this
Agreement has not been terminated for any reason, Consultant shall participate
in any 2007-09 Cycle Award, if there is such an award, at an amount commensurate
with his position. In the event of a termination of this Agreement for reasons
other than either a breach of this Agreement by Consultant or a for cause
termination, or should this Agreement expire, Consultant shall, subject to
the
performance conditions of the plan being met, receive a pro-rated portion
of the
2007-09 Cycle Award equal to the grant amount multiplied by a factor equal
to
the number of full months of full time performance (not including Reduced
Services) during the term of the 2007-09 Cycle, divided by thirty-six months.
2008-10
Cycle: If
this
Agreement has not been terminated, Consultant shall participate in any 2008-10
Cycle Award, if there is such an award, at an amount commensurate with his
position. In the event of a termination of this Agreement for either reasons
other than a breach of this Agreement by Consultant or a for cause termination,
or should this Agreement expire, Consultant shall, subject to the performance
conditions of the plan being met, receive a pro-rated portion of the 2008-10
Cycle Award equal to the grant amount multiplied by a factor equal to number
of
full months of full time performance during the 2008-10 Cycle (not including
Reduced Services) under this Agreement, divided by thirty-six months.
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f.
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Long
Term Equity Incentive Compensation - Stock Options. Consultant
shall
receive
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20,580
stock options in Nalco Holding Company stock under the Company’s 2004
Stock Incentive
Plan at a strike price of $17.80 per share. The terms and conditions of this
award shall be those terms and Conditions applying to similar awards made
to the
Company’s employees. The stock options shall vest in 4 equal installments at the
end of 2006, 2007, 2008 and 2009 (5,145 stock options each year) provided
that
this Agreement has not been terminated (or expired) and Consultant is still
performing full-time services at the end of such year. In the event of a
termination of this Agreement by Consultant for reasons other than a breach
of
this Agreement by Consultant or a for cause termination, or the expiration
of
this Agreement, the Consultant shall receive a pro-rated portion of the stock
options that otherwise would have vested in that year equal to the grant
amount
multiplied by a factor equal to the number of full months of full time
performance during the subject year (not including Reduced Services) divided
by
12 months. If this Agreement has not been terminated, Consultant shall
participate in any future stock option award cycles at rates commensurate
to his
position, should they be granted, subject to the same terms and conditions
and
pro-ration requirements as indicated herein.
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g.
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Consultant
shall be reimbursed by the Company for all reasonable expenses
actually
incurred by the Consultant in connection with the performance of
the
services hereunder
in
accordance with policies established by the Company from time to
time and
upon presentation of appropriate
documentation.
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5. Consultant’s
Covenants
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a.
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During
the Term hereunder and for a period of two (2) years thereafter,
(1) Consultant shall not, within any jurisdiction or marketing area
in which the Company (or its Subsidiaries (as such term is defined
below))
is doing business, directly or indirectly, own, manage, operate,
control,
consult with, be employed by, or participate in the ownership,
management,
operation or control of any business of the type and character
engaged in
or competitive with that conducted by the Company (or its Subsidiaries
and
Affiliates); (2) Consultant shall not, directly or indirectly,
employ, solicit for employment or otherwise contract for the services
of
any individual who is an employee of the Company (or its Subsidiaries
and
Affiliates) at the time of this Agreement or who shall subsequently
become
an employee of the Company (or its Subsidiaries and Affiliates);
and
(3) Consultant will not solicit, in competition with the Company (or
its Subsidiaries or Affiliates), any person who is, or was at any
time
within the twelve months prior to the Consultant’s termination of this
Agreement, a customer of the business conducted by the Company
(or its
Subsidiaries or its Affiliates). For purposes of this Agreement,
Subsidiaries and Affiliates shall be any legal entities in which
Company
has a direct or indirect economic interest, and indirect or direct
parents
of the Company or any legal entities which has, either directly
or
indirectly, common ownership with the Company.
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b.
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During
the Term and thereafter, (1) the Consultant will not divulge,
transmit or otherwise disclose (except as legally compelled by
court
order, and then only to the extent required, after prompt notice
to the
Company of any such order), directly or indirectly, other than
in the
regular and proper course of business of the Company, any confidential
knowledge or information regarding the operations, finances, organization
or employees of the Company (or its Subsidiaries and Affiliates)
or
confidential or secret processes, services, techniques, customers
or plans
of the Company (or its Subsidiaries and Affiliates); and
(2) Consultant will not use, directly or indirectly, any confidential
information for the benefit of anyone other than the Company (or
its
Subsidiaries and Affiliates); provided,
however,
that the Consultant has no obligation, express or implied, to refrain
from
using or disclosing to others any such knowledge or information
which is
or hereafter shall become available to the public other than through
disclosure by Consultant. All rights to new processes, strategies,
techniques, know-how, inventions, plans, products, patents and
devices
developed, made or invented by the Consultant, alone or with others,
while
a consultant for
the Company which are related to the business of the Company (or
its
Subsidiaries and Affiliates) shall be and become the sole property
of the
Company, unless released in writing by the Company, and Consultant
hereby
assigns all such rights to the Company. All files, records,
correspondence, memoranda, notes or other documents (including,
without
limitation, those in computer-readable form) or property relating
or
belonging to the Company, whether prepared by Consultant or otherwise
coming in Consultant’s possession in the course of the performance of the
services under this Agreement, shall be the exclusive property
of Company
and shall be delivered to Company and not retained by Consultant
(including, without limitations, any copies thereof) upon termination
of
this Agreement for any reason whatsoever.
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c.
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Consultant
will communicate and disclose in writing to the Company both during
the
term of this Agreement and thereafter, all inventions, discoveries,
improvements, machines, devices, designs, processes, products,
software,
treatments, formulae, mixtures and/or compounds whether patentable
or not
as well as patents and patent applications (all collectively referred
to
as “Inventions”) made, conceived, developed or acquired by Consultant or
under which Consultant acquired the right to grant licenses or
become
licensed, whether alone or jointly with others, during the Term.
All of
Consultant’s right, title and interest in, to and under such Inventions,
including licenses and right to grant licenses shall be the sole
property
of the Company and the same are hereby assigned to the Company.
Any
Invention disclosed by Consultant to anyone within one (1) year
after the
termination of this Agreement, which relates to any matters pertaining
to,
applicable to, or useful in connection with, the business of the
Company
shall be deemed to have been made or conceived or developed by
Consultant
during the Term, unless proved by Consultant to have been made
and
conceived and developed after the termination of this
Agreement.
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d.
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For
all of Consultant’s Inventions, Consultant will, upon request of the
Company, during the term of this Agreement and
thereafter:
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(1)
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execute
and deliver all documents which the Company shall deem necessary
or
appropriate to assign, transfer and convey to the Company, all
of
Consultant’s right, title, interest in and to such Inventions, and enable
the Company to file and prosecute applications for Letters Patent
of the
United States and any foreign countries on Inventions as to which
the
Company wishes to file patent applications;
and
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(2)
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do
all other things (including the giving of evidence in suits and
other
proceedings) which the Company shall deem necessary or appropriate
to
obtain, maintain, and assert patents for any and all such Inventions
and
to assert its rights in any Inventions not patented.
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e.
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Consultant
hereby assigns to the Company the copyright in all works prepared
by the
Consultant which are either within the scope of the Services or
based upon
information acquired from the Company not normally made available
to the
public.
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6. General.
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a.
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Governing
Law.
The validity, interpretation, construction and perfor-▇▇▇▇▇ of
this
Agreement shall be governed by the laws of the State of Illinois
applicable to contracts executed and to be performed entirely within
said
State.
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b.
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Construction
and Severability.
If any provision of this Agreement shall be held invalid, illegal
or
unenforceable in any jurisdiction, the validity, legality and
enforceability of the remaining provisions contained herein shall
not in
any way be affected or impaired, and the parties undertake to implement
all efforts which are necessary, desirable and sufficient to amend,
supplement or substitute all and any such invalid, illegal or
unenforceable provisions with enforceable and valid provisions
which would
produce as nearly as may be possible the result previously intended
by the
parties without renegotiation of any material terms and conditions
stipulated herein.
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c.
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Assignability.
Consultant may not assign his interest in or delegate his duties
under
this Agreement. This Agreement is for the Services of Consultant,
personally, and the Services to be rendered by him under this Agreement
must be rendered by him and no other person. Consultant represents
and
warrants to the Company that Consultant has no contracts or agreements
of
any nature that Consultant has entered into with any other person,
firm or
corporation that contain any restraints on Consultant's ability
to perform
his obligations under this Agreement. This Agreement shall be binding
upon
and inure to the benefit of the Company and its successors and
assigns.
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d.
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Compliance
with Rules and Policies.
Consultant shall perform all Services in all material respects
in
accordance with the applicable policies, procedures and rules established
by the Company, including, but not limited to, the By-Laws of the
Company
and the Company’s Code of Ethical Business Practices. In addition,
Consultant, where applicable, shall comply in all material respects
with
all laws, rules and regulations that are generally applicable to
the
Company, and its employees, directors and officers.
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e.
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Arbitration.
(1) The parties shall use their reasonable best efforts and good
will to
settle all disputes by amicable negotiations. The Company and Consultant
agree that any dispute, controversy or claim arising out of, relating
to
or in connection with this Agreement, or the termination of this
Agreement
or the termination of Consultant's Services hereunder that is not
amicably
resolved by negotiation shall be finally settled by arbitration,
under and
in accordance with the Rules of Commercial Arbitration of the American
Arbitration Association then in effect, as set forth below, in
Chicago,
Illinois, or such other place agreed to by the
parties.
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(2)
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Any
such arbitration shall be heard before a panel consisting of one
(1) to
three (3) arbitrators, each of whom shall be impartial. All arbitrators
shall be appointed in the first instance by agreement between the
parties.
If the parties cannot agree upon a single arbitrator, each of the
Company
and Consultant shall be entitled to appoint one arbitrator. These
two
appointed arbitrators shall then appoint a third arbitrator by
their
mutual agreement.
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(3)
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The
award of the arbitrator or panel of arbitrators shall be in writing
and
state the reasons upon which it is based. It may be made public
only with
the consent of the parties. Any monetary award shall be in U.S.
dollars.
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(4)
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Each
of the parties hereto accepts the exclusive jurisdiction of the
arbitrator
or panel of arbitrators appointed in accordance herewith. The award
of the
arbitrator or arbitral panel shall be final and binding on the
parties,
who undertake to carry it out without delay. Judgment on the award
rendered by the arbitrator or arbitral panel may be entered in
any court
having jurisdiction thereof.
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(5)
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The
arbitrator or panel of arbitrators may also award interim relief
and grant
specific performance. Notwithstanding the foregoing, each party
reserves
the right to apply to any court of competent jurisdiction for any
provisional measure, including injunctive relief, to enforce the
terms of
this Agreement.
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(6)
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The
Company and Consultant shall each pay fifty percent (50%) of all
costs of
the arbitrator or panel of arbitrators and of the American Arbitration
Association. The arbitrator may award to the party prevailing on
any
matter or issue within the arbitration, his or its legal fees and
disbursements (including the costs of the American Arbitration
Association
and the arbitrator) related to such matter or issue provided that
the
party is successful overall on a material portion of the arbitration,
provided,
however,
the Company shall only be entitled to an award of legal fees and
disbursements if the resolution of any such contest or dispute
includes a
finding that Consultant's claims in such contest or dispute were
frivolous
or brought in bad faith.
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f.
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Entire
Agreement: Modification.
This Agreement constitutes the entire agreement of the parties
hereto with
respect to the subject matter hereof, supersedes all prior agreements
and
undertakings, both written and oral, and may not be modified or
amended in
any way except in writing by the parties hereto.
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g.
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Survival.
The covenants set forth in Section shall survive and shall continue
to be binding upon the Consultant notwithstanding the termination
of this
Agreement for any reason whatsoever.
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h.
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Waiver.
No waiver by either party hereto of any of the requirements imposed
by
this Agreement on, or any breach of any condition or provision
of this
Agreement to be performed by, the other party shall be deemed a
waiver of
a similar or dissimilar requirement, provision or condition of
this
Agreement at the same or any prior or subsequent time. Any such
waiver
shall be express and in writing, and there shall be no waiver by
conduct.
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i.
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Counterparts.
This Agreement may be executed in two or more counterparts, all
of which
taken together shall constitute one instrument.
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j.
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Notices.
Any notices required or permitted hereunder shall be in writing
and shall
be deemed to have been given when personally delivered or when
mailed,
certified or registered mail, postage prepaid, to the following
addresses:
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If
to
Consultant:
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If
to the
Company:
Nalco
Company
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Attention:
General Counsel
IN
WITNESS WHEREOF, the parties hereto, intending to be legally bound, have
hereunto executed this Agreement as of the day and year first written
above.
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NALCO
COMPANY
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Date:
7/19/06
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Name:
/s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
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Title:
VP, Human Resources
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CONSULTANT
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Date:
7/19/06
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/s/
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