Exhibit 10.12
FORM OF
EXECUTIVE AGREEMENT
Agreement between Arch Chemicals, Inc., a Virginia corporation ("Arch
Chemicals"), and (First Name) (Last Name) (the "Executive"), dated as of
(Month Year).
Arch Chemicals 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 or her duties; the willful engaging by
the Executive in gross misconduct significantly and demonstrably financially
injurious to Arch Chemicals; or willful misconduct by the Executive in the
course of his or her 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 Arch Chemicals or not opposed to the interests
of Arch Chemicals.
(b) "Change in Control" means:
(i) Arch Chemicals ceases to be, directly or indirectly,
owned of record 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 Arch Chemicals, a majority-owned subsidiary of
Arch Chemicals or an employee benefit plan (or the plan's related trust) of Arch
Chemicals 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 Arch Chemicals;
(iii) During any period of two consecutive years, individuals
who at the beginning of such period constitute Arch Chemicals' Board of
Directors (together with any new Director whose election by Arch Chemicals'
Board of Directors or whose nomination for election by Arch Chemicals'
stockholders was approved by a vote of at least 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;
(iv) All or substantially all of the business of Arch
Chemicals is disposed of pursuant to a merger, consolidation or other
transaction in which Arch Chemicals is not the surviving corporation or Arch
Chemicals combines with another company and is the surviving corporation (unless
the shareholders of Arch Chemicals 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
Arch Chemicals or (y) the combined company) or
(v) Approval by Arch Chemicals' shareholders of (i) a sale
of all or substantially all the assets of Arch Chemicals or (ii) a liquidation
or dissolution of Arch Chemicals.
(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 Arch Chemicals' 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 (A) the Executive's
average annual award actually paid under Arch Chemicals' short-term annual cash
incentive compensation plans or programs ("ICP") (including zero if nothing was
paid or deferred but including any portion thereof the Executive has elected to
defer) for the three completed fiscal years immediately preceding the date of
Termination (or if the Executive has not participated in ICP for such three
completed fiscal years, the average of any such awards for the shorter period of
years in which the Executive was a participant) and (B) the Executive's then
current ICP standard annual award.
(e) "Potential Change in Control" means:
(i) Arch Chemicals has entered into an agreement the
consummation of which would result in a Change in Control;
(ii) any person (including Arch Chemicals) publicly announces
an intention to take or to consider taking actions which if consummated would
constitute a Change in Control;
(iii) Arch Chemicals learns that any person (other than an
employee benefit plan of Arch Chemicals or a subsidiary of Arch Chemicals (or
the plan's related trust)) has become the beneficial owner directly or
indirectly of securities of Arch Chemicals representing 9.5% or more of the
combined voting power of Arch Chemicals' then outstanding securities ordinarily
entitled to vote in elections of directors; or
2
(iv) the Board of Directors of Arch Chemicals adopts a
resolution to the effect that, for purposes of this Agreement, a Potential
Change in Control of Arch Chemicals has occurred;
provided, if an event specified in clause (iii) above has occurred by or on the
date hereof, such event shall not be deemed a Potential Change in Control unless
such person acquires another 1% of such securities subsequent to the date
hereof.
(f) "Termination" means:
(i) The Executive is discharged by Arch Chemicals other than for
Cause;
(ii) The Executive terminates his or her employment in the event
that:
(1) Arch Chemicals 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
Arch Chemicals' corporate headquarters is not a basis for Termination;
(2) Arch Chemicals 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 Arch Chemicals' 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) Arch Chemicals 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 Arch Chemicals' or a relevant operation's
financial or stock price performance 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 completed fiscal years immediately preceding the
date of Termination;
(4) The Executive suffers a Disability which prevents the
Executive from performing the Executive's duties with Arch Chemicals for a
period of at least 180 consecutive days;
(5) Following a Change in Control, Arch Chemicals fails to
substantially maintain its benefit plans as in effect at the time of the Change
in Control,
3
unless reasonably equivalent arrangements (embodied in an on-going substitute or
alternative plan) have been made with respect to such plans; or
(6) Following a Change in Control, the Executive's duties,
position or reporting responsibilities are diminished.
For purposes solely of clarification, it is understood that (i) if, in
connection with the spinoff of an Arch Chemicals business or Arch Chemicals'
assets as a separate public company to Arch Chemicals' shareholders, the
Executive accepts employment with, and becomes employed at, the spunoff company
or its affiliates, the termination of the Executive's employment with Arch
Chemicals shall not be considered a "Termination" for purposes of this
Agreement, provided that a Change in Control shall not have occurred prior to
the termination of the Executive's employment with Arch Chemicals and (ii)
except as provided in paragraph 5(f), in connection with the sale of an Arch
Chemicals business to a third party or the transfer or sale of an Arch Chemicals
business or Arch Chemicals' assets to a joint venture to be owned directly or
indirectly by Arch Chemicals with one or more third parties, if the Executive
accepts employment with, and becomes employed by, such buyer or its affiliates
or such joint venture or its affiliates in connection with such transaction,
such cessation of employment with Arch Chemicals shall not be considered a
"Termination" for purposes of this Agreement.
2. Previous Change in Control Agreement. This Agreement supersedes and
replaces all previous agreements and understandings (whether oral or written),
including but not limited to, the Executive Agreement dated as of
(Date_of_Agreement) between Arch Chemicals and the Executive. The Executive
hereby releases and forever discharges Arch Chemicals and its affiliates from
any and all obligations or claims the Executive may have with respect to such
prior Executive Agreement and waives any obligations or rights Executive may
have accrued under such prior Executive Agreement, including obligations which
may arise under any circumstances, occurring prior to the date hereof.(1)
3. Term/Executive's Duties.
(a) This Agreement expires at the close of business on July 30,
2004, unless prior to that date there is a Potential Change in Control or a
Change in Control, in which case this Agreement will expire on the later of (i)
the close of business on July 30, 2004, (ii) three years following the date of
the Potential Change in Control or (iii) 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 Arch
Chemicals, 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.
----------
(1) If the Executive did not previously have a Tier I Agreement, substitute
the following language for this paragraph: "This paragraph intentionally
left blank."
4
(b) During the period of the Executive's employment by Arch
Chemicals, the Executive shall devote his or her full time efforts during normal
business hours to Arch Chemicals' business and affairs, except during reasonable
vacation periods and periods of 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 Arch Chemicals' interest; provided that no additional position as
director or member shall be accepted by the Executive during the period of his
or her employment with Arch Chemicals without its prior consent.
(c) The Executive agrees that in the event of any Potential Change
in Control of Arch Chemicals occurring from time to time after the date hereof,
the Executive will remain in the employ of Arch Chemicals 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.
4. Executive Severance Payment.
(a) In the event of a Termination occurring before the expiration
of this Agreement, Arch Chemicals will pay the Executive a lump sum in an amount
equal to the Executive Severance. The payment will be made within 30 days of the
Termination or if a Change in Control has occurred, 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, Arch Chemicals will pay a Change in Control severance premium to the
Executive in an amount equal to the sum of: (i) two times the Executive
Severance plus (ii) three times the higher of (x) Executive's annual long term
incentive target as last determined by the Arch Chemicals' Board of Directors
(or committee thereof) prior to the Change in Control and (y) the Executive's
annual long term incentive target as in effect immediately prior to the
Termination. 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) and 4(b), if any, will be
reduced to the extent that, if such amount in the aggregate were paid in equal
monthly installments over a 12-month period (or in the event both paragraph 4(a)
and 4(b) are applicable, a 36-month period), 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 explicitly provided in this Agreement.
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 Arch Chemicals. Except as
expressly provided in this Agreement, payments made under
5
paragraphs 4 or 5(e) shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim which Arch Chemicals may have against the
Executive.
(e) If the Executive receives the Executive Severance, the
Executive will not be entitled to receive any other severance otherwise payable
to the Executive under any other severance plan of Arch Chemicals. If on the
Termination date the Executive is eligible and is receiving payments under any
then existing Arch Chemicals disability plan, then the Executive agrees that all
such payments may, and will be, suspended and offset for 12 months (or in the
event paragraph 4(b) is also applicable, 36 months) (subject to applicable law)
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 Arch Chemicals
disability plan.
(f) In the event the Executive, in connection with the sale of an
Arch Chemicals business to a third party or the transfer of an Arch Chemicals
business or Arch Chemicals assets to a joint venture which would be owned
directly or indirectly by Arch Chemicals with one or more third parties, ceases
to be employed by Arch Chemicals and with Arch Chemicals' consent becomes
employed by the buyer or its affiliates or the joint venture or its affiliates,
the Executive shall be entitled to the benefits provided under paragraph 4(a)
(using Arch Chemicals figures at the time of new employment) (subject to
paragraphs 4(c), 4(d) and 4(e)) and the first sentence of paragraph 5(a)
(subject to paragraph 5(c)), and paragraph 5(d), if the Executive has a
Termination as defined in paragraph 1(f) with his or her new employer (with the
new employer being substituted for Arch Chemicals in such paragraph 1(f) and
without giving any effect to the Change in Control references contained therein
following such new employment) within 12 months of becoming employed by such new
employer. Any cash compensation amounts paid under this paragraph 4(f) shall be
reduced by any severance, job transition or employment termination payments such
Executive receives in cash from his or her new employer in connection with the
Termination. In connection with this paragraph 5(f), in no event shall the
Change in Control provisions of this Agreement be applicable once Executive
ceases to be employed by Arch Chemicals.
(g) If the Termination occurs prior to a Change in Control, no
Executive Severance and, except for payments and benefits that the Employee is
legally entitled to by employment or labor law in the absence of this Agreement,
no other benefits and payments pursuant to paragraph 5 below, will be paid or
credited to the Executive unless and until the Executive shall have executed and
delivered to Arch Chemicals a release substantially in the form of Exhibit A
hereto and the seven day period referred to in Exhibit A shall have elapsed
without revocation. Whether the release is "substantially" in such form shall be
determined by Arch Chemicals in its sole discretion. If the Termination occurs
at or following a Change in Control, no such release shall be required.
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 Arch
Chemicals Pension Plans for which the Executive was eligible at the time of the
Termination (i.e., under Arch Chemicals'
6
qualified Pension Plans to the extent permitted under then applicable law,
otherwise such credit will be reflected in a supplementary pension payment from
Arch Chemicals 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 on the same basis as a similarly situated active employee under
all Arch Chemicals 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 without offset for coverage
provided hereunder. 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 calendar year in which the Termination occurs. If no
Change in Control has occurred at or prior to Termination, the Executive shall
not be entitled to an ICP award for the calendar year in which Termination
occurs. Even if a Change in Control occurs at or prior to Termination, the
Executive shall not be entitled to an ICP award for the calendar year of
Termination if Termination occurs during the first calendar quarter of such
year. However, if a Change in Control occurs and at the same time or thereafter
if Termination occurs during or after the second calendar quarter of a year (and
even if the Executive receives the Executive Severance (including the amount
referred to in paragraph 1(d)(ii)), the Executive shall be entitled to a
prorated ICP award for such calendar year of Termination which shall be
determined by multiplying the higher of (i) his or her then current ICP standard
and (ii) his or her ICP standard in effect prior to the Change in Control, by a
fraction the numerator of which is the number of weeks in such 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 Arch Chemicals' expense to outplacement counseling and associated services in
accordance with Arch Chemicals' 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 Arch Chemicals in lieu thereof will not be available to the
Executive.
7
(e) Notwithstanding the provisions of Section 4.6 of the Arch
Senior Executive Pension Plan (the "Senior Plan"), if the Executive is in active
employment with Arch Chemicals 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 4.6, 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 Arch Chemicals pension plans
assuming the Executive had terminated his or her employment with Arch Chemicals
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 Arch Chemicals at age 55 under
the early retirement provisions of the Arch Chemicals 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 Arch Chemicals pension plans. The actuarial value shall
be determined as the amount needed to purchase a fixed annuity through
Metropolitan Life Insurance Company ("Metropolitan") or its successor
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. The lump-sum payment made under the Senior Plan as
calculated under this paragraph 5(e) will be used to reduce any other 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
Arch Chemicals 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
Arch Chemicals' 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 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, Arch Chemicals 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
8
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
Arch Chemicals. 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 Arch Chemicals 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 or her 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 Arch Chemicals compensation or benefit plan, notwithstanding
any of the terms hereof or thereof.
(b) Anything in this Agreement to the contrary notwithstanding, in
the event that it shall be determined that any payment or distribution by Arch
Chemicals to or for the benefit of the Executive (whether paid or payable or
distributed or distributable) pursuant to the terms of this Agreement or
otherwise (collectively, the "Payments") but determined without regard to any
additional payments required under this paragraph 6(b), would be subject to the
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended, the Executive shall be entitled to receive an additional payment (the
"Gross-Up Payment") in an amount equal to (i) the amount of the excise tax
imposed on the Executive in respect of the Payments (the "Excise Tax") plus (ii)
all federal, state and local income, employment and excise taxes (including any
interest or penalties imposed with respect to such taxes) imposed on the
Executive in respect of the Gross-Up Payment, such that after payments of all
such taxes (including any applicable interest or penalties) on the Gross-Up
Payment, the Executive retains a portion of the Gross-Up Payment equal to the
Excise Tax.
7. Successors; Binding Agreement.
(a) Arch Chemicals 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 Arch Chemicals, 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 Arch
Chemicals would be required to perform if no such succession had taken place.
Failure of Arch Chemicals 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 Arch Chemicals 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, "Arch
Chemicals" means Arch Chemicals as
9
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: (Name)
(Address1)
(Address2)
If to the Company: Arch Chemicals, Inc.
▇▇▇ ▇▇▇▇▇▇▇ ▇
▇.▇. ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
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.
9. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of
Connecticut (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 Arch Chemicals. 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. This Agreement, including its exhibits, constitutes
the complete understanding between the parties with respect to the subject
matter hereof except as otherwise provided in this paragraph 10 or paragraph
16(e). This Agreement shall remain a valid and enforceable contract between the
parties notwithstanding any voluntary, for Cause or other employment
termination. The Executive acknowledges that the Employment Agreement relating
to
10
Inventions, Patents and Confidential Information which the Executive signed
and is attached as Exhibit B shall continue to remain in effect in accordance
with its terms.
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. Arch Chemicals 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 written 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 or her 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, Arch Chemicals 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 Arch Chemicals or any of its
subsidiaries.
15. Disputes/Arbitration.
(a) Except with respect to enforcement by Arch Chemicals of
Paragraph 16 or other legal action by Arch Chemicals for breach by the Executive
of paragraph 16, any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration at Arch Chemicals'
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 jurisdiction.
(b) Arch Chemicals 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 or her claim. Should Arch Chemicals
dispute the entitlement of the Executive to such fees and expenses, the burden
of proof shall be on Arch Chemicals to establish that the Executive had no
reasonable basis for his or her claim.
16. Nonsolicitation.
(a) Executive agrees that while employed by Arch Chemicals and for
one year immediately following the cessation of Executive's employment with Arch
Chemicals for any reason (whether voluntary or otherwise), Executive shall:
11
(i) not, in any way, directly or indirectly, on Executive's
own behalf or on behalf of or in conjunction with any person, company, business,
partnership, enterprise or organization solicit, entice, hire, employ or
endeavor to employ any of the employees of Arch Chemicals (but excluding former
employees who are not so solicited, enticed or hired prior to such former
employee's employment termination); and
(ii) not, directly or indirectly, contact or solicit (or
advise or consult for any person, organization, partnership, business, company
or enterprise with respect to soliciting or contacting) any person or entity who
was a customer of Arch Chemicals at any time in the twenty-four (24) month
period prior to the Executive's cessation of employment or any potential
customer of Arch Chemicals who was specifically targeted for solicitation by
Arch Chemicals at any time during such 24-month period (such customer and
potential customer being an "Arch Customer"), for the purpose of diverting such
customer from Arch Chemicals with respect to, or for the purpose of
recommending, selling or providing any product or service similar to or
competing with, any product or service that (A) is offered by Arch Chemicals at
time of employment termination and (B) the Executive was engaged in managing,
marketing, selling or manufacturing at any time during his or her employment
with Arch Chemicals or ▇▇▇▇ Corporation (together with subsidiaries of ▇▇▇▇
Corporation, being collectively "Olin"); provided further that this clause (ii)
shall also apply to (x) those Arch Customers with whom the Executive met or
contacted at any time prior to employment termination for the express purpose of
establishing, soliciting or maintaining a customer relationship with Arch
Chemicals or Olin and (y) any product or service that is offered by Arch
Chemicals at the time of employment termination and that was or was to be the
basis of such customer relationship.
(b) The parties have carefully read this Agreement and have given
and do now give careful consideration to the restraints imposed upon Executive
by this Agreement and are in full accord as to their necessity for the
reasonable and proper protection of Arch Chemicals' businesses. Executive
acknowledges and agrees that (i) each and every restraint imposed by this
Agreement is reasonable with respect to subject matter, duration and geographic
area and (ii) that his or her services to Arch Chemicals are unique and special
and that the Executive has knowledge of Arch Chemicals' trade secrets, customer
base and other confidential information of Arch Chemicals and the Executive
hereby agrees he or she will not assert anything to the contrary in any court,
hearing, arbitration, mediation or other legal forum. Executive further
acknowledges and agrees that the restrictions contained in this Agreement will
not prevent Executive from earning a living within his or her trade or
specialty. The restraints imposed by this Agreement shall continue for their
full periods and throughout the geographic areas set forth in this Agreement
except as provided in paragraph 17 below.
(c) If the Executive shall violate or attempt to violate any of
the provisions of this paragraph 16, then Arch Chemicals shall be entitled, as
of right, to an injunction and/or other equitable relief against Executive,
restraining Executive from violating or attempting to violate any of these
provisions. The parties further agree that this provision does not limit any
other remedies that may be available to Arch Chemicals for breach of this
paragraph 16 by Executive.
12
(d) The Executive acknowledges that, because of the competitive
nature of Arch Chemicals' businesses and Arch Chemicals' repeat transactions
with many customers, the development and enhancement of customer relationships,
contacts and goodwill are critical factors in ensuring Arch Chemicals' survival
and success and that such customer relationships, contacts and goodwill
constitute valuable assets belonging to Arch Chemicals, whether or not such
assets are produced by the Executive's own efforts. Executive further
acknowledges that directly or indirectly soliciting Arch Chemicals' customers
for a competitor of Arch Chemicals would inevitably result in disclosure of
trade secrets and confidential information belonging to Arch Chemicals, thus
irreparably harming Arch Chemicals.
(e) The provisions contained in this Paragraph 16 are in addition
to, and supplement, any other nonsolicitation or noncompete agreements to which
the Executive may be a party involving Arch Chemicals and do not supersede,
amend or limit any such prior agreements. The Executive acknowledges and agrees
that any prior noncompetition agreement between the Executive and Olin has been
assigned to Arch Chemicals and is effective as if originally entered into with
Arch Chemicals instead of Olin.
(f) For purposes of this paragraph 16, "Arch Chemicals" means Arch
Chemicals including its subsidiaries.
17. Severability. The parties have entered into this Agreement in the
belief that its provisions are valid, reasonable, and enforceable. However, if
any one or more of the provisions contained in this Agreement shall be held to
be unenforceable for any reason, such unenforceability shall not affect any
other provision of this Agreement, and this Agreement shall be construed as if
such unenforceable provision had never been contained herein. However, if any
one or more of the provisions contained in paragraph 16 hereof shall for any
reason be held to be excessively broad as to time, duration, geographic scope,
activity or subject, it shall be construed, by limiting and reducing it, so as
to be enforceable to the extent compatible with applicable law.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the day and year first above set forth.
ARCH CHEMICALS, INC.
By:
------------------------
-------------------------
(Executive)
13
Exhibit A
Form of Release
1. In return for the payments and benefits provided by Arch Chemicals, Inc.
(the "Company") under the Executive Agreement, dated ________, 1999 (the
"Executive Agreement") between the undersigned and the Company, the undersigned
agrees not to bring or to participate in any legal proceedings against the
Company, its subsidiaries or successors or the officers, agents, representatives
or executives of the Company or its subsidiaries or their respective successors
(collectively "Releasees") which the undersigned may have or claim to have as a
result of the undersigned's employment which arise out of or relate to acts or
conduct or omissions which occurred prior to the execution of this release. For
purposes of the preceding sentence, "participation" does not include
participating in legal proceedings under compulsion of legal process.
2. The undersigned releases and forever discharges each of the Releasees from
any and all claims or causes of action of any kind, known or unknown, including
claims of discrimination based on age under the federal Age Discrimination in
Employment Act, as amended, or under any related state, federal or local law,
ordinance or regulation; or claims or causes of action under Title VII of the
Civil Rights Act, as amended, or under any related federal, state or local law,
ordinance or regulation; or discrimination claims or causes of action under the
American with Disabilities Act or under any related federal, state or local law,
ordinance or regulation; any claims under the Family and Medical Leave Act or
any related state or local law, ordinance or regulation, or based upon any other
factor prohibited by federal, state or local law, ordinance or regulation; any
claims for wages, incentive pay, bonuses or other compensation or for benefits
of any kind (exclusive of accrued but unpaid wages and vacation pay as of the
date of employment termination, any compensation deferred under the Employee
Deferral Plan, qualified and non-qualified pension and savings plan benefits and
any rights with respect to outstanding and exercisable stock options, vested
performance share units or similar outstanding and vested stock-based awards
granted under the Company's incentive stock plan (which stock-based awards are
the subject of other arrangements and plan provisions), any payments or benefits
to which the undersigned is entitled under the Executive Agreement) or claims
under the Employee Retirement Income Security Act; any claims for attorney's
fees, costs or expenses; and any other statutory or common law claims, including
but not limited to any claims for wrongful discharge, for negligent and/or
intentional infliction of "emotional distress" or any other tort claim, any
claim for breach of any implied or express contract, libel, slander, promissory
or equitable estoppel, breach of an implied covenant of good faith and fair
dealing, fraud or misrepresentation. In addition, the undersigned further agrees
that except as may be required by court order or subpoena or federal law or
regulations, the undersigned will not in any way, directly or indirectly, assist
any individual or entity in bringing or prosecuting any lawsuit against the
Releasees.
3. The undersigned acknowledges that the consideration the undersigned has
received from the Company under the Executive Agreement fully satisfies any and
all claims he or she
14
may now have or previously had with respect to his or her employment with or
separation from the Company and any of its subsidiaries, including, without
limitation, Job Transition Benefits.
4. It is understood, however, that the undersigned's agreement not to bring a
cause of action against the Company does not include any action alleging a
breach of the Executive Agreement by the Company and that nothing herein shall
prevent the undersigned from bringing a claim for indemnification as a Company
officer under Article IV of the Company's Amended and Restated Articles of
Incorporation at any time as provided therein and in accordance therewith.
5. The undersigned understands that the Employment Agreement Relating to
Inventions, Patents and Confidential Information with the Company, which the
undersigned signed and is attached hereto as Attachment A, shall continue to
remain in effect according to its terms.
6. Moreover, the undersigned agrees that should he or she breach this release
in any manner, including but not limited to by bringing or participating in a
legal proceeding or legal cause of action against the Releasees, contrary to the
terms hereof, the undersigned will return to the Company any and all payments
which the undersigned received under the Executive Agreement, with the exception
of any benefits to which the undersigned was legally entitled by law, in the
absence of the Executive Agreement.
7. The undersigned understands that the Company does not acknowledge or admit
that it has violated any of the undersigned's rights under any federal, state or
local law or ordinance or that it has violated any contractual or other legal
obligations. Nothing in this release, nor the fact that the Company has entered
this release, shall be construed as an admission of liability or wrongdoing by
the Company, which liability or wrongdoing is expressly denied.
8. The undersigned is hereby advised to consult with an attorney of his or
her choice and the undersigned agrees that he or she has been afforded a period
of at least twenty-one (21) days to consider the terms of this release with such
attorney or with anyone else whom the Employee chooses to consult, that the
undersigned understands he or she has seven (7) days from the date of signing
this release in which to revoke it and that this release shall not become
effective or enforceable until this revocation period has expired.
9. Finally, the undersigned acknowledges that he or she is fully competent to
enter this release that he or she has carefully read and fully understands all
of the provisions of this release and the Executive Agreement and that he or she
has knowingly and voluntarily executed this release and the Executive Agreement
without any pressure or duress in exchange for full and sufficient consideration
for which he or she otherwise would not normally be entitled.
Dated:
----------------------------- ------------------------------------
Name:
15
