EXHIBIT 10.13
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (this "Agreement"), dated as of January 1, 2003
("Effective Date"), by and between ONDEO NALCO COMPANY, a Delaware corporation
(the "Company"), and Xxx X. Xxxxxxxxx (the "Executive").
B A C K G R O U N D
- - - - - - - - - -
The Executive is currently employed by the Company;
The Company and the Executive desire to enter into this Agreement,
effective as of the Effective Date, to set forth the terms and conditions of
Executive's continued employment with the Company as its Vice President and
President of the Pulp and Paper Group; and
The Company and the Executive agree that the terms and provisions of
this Agreement shall supersede the terms of all the Executive's prior Employment
Agreements, with the Company or its subsidiaries, except as specifically
provided below.
In consideration of the mutual covenants and promises contained herein,
the Company and the Executive, agree:
1. Employment. Subject to the terms and conditions set forth herein,
the Company shall continue the employment of the Executive as Vice President and
President of the Pulp and Paper Group and the Executive accepts such employment
for the Employment Term (See Section 3 below). During the Employment Term, the
Executive shall also perform such additional duties as may from time to time be
assigned to him by the Chief Operating Officer ("COO"), the Chief Executive
Officer ("CEO"), and Executive Vice President commensurate with the Executive's
position, including, but not limited to, serving as an officer or director of
affiliated entities.
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2. Performance. During the Employment Term, the Executive 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.
3. Employment Term. Subject to earlier termination pursuant to Section
5 below, the Employment Term shall begin upon the Effective Date and shall
initially continue for a period for three (3) years from such date (the "Initial
Term"). The Initial Term shall be automatically extended for successive
additional periods of one (1) year each commencing at the end of the Initial
Term and each anniversary thereafter (each such period, an "Additional Term")
unless either party shall have given written notice to the other party of
non-extension at least ninety (90) days prior to the end of the then applicable
Initial Term or Additional Term (the Initial Term and the Additional Term or
Terms, if applicable, collectively, is the "Employment Term").
4. Cause/Good Reason.
a. "Cause" shall mean: (1) the Executive's conviction of plea of nolo
contendere or guilty, to, or written admission of the commission of, a
felony (2) any breach by the Executive of any material provision of this
Agreement; (3) any act by the Executive involving moral turpitude, fraud or
misrepresentation with respect to his duties for the Company; or (4) gross
negligence or willful misconduct on the part of the Executive in the
performance of his duties as an employee, officer or member of the Company;
provided, however, the Company may not terminate the Executive's employment
under clauses (2), (3) or (4) above unless the Company first gives the
Executive notice of its intention to terminate and of the grounds for such
termination within 90 days after such event or circumstance is first
brought to the attention of the Chairman's Committee or the CEO by the
senior
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Human Resources Officer or senior Legal Office of the Company, and in the
case of a breach set forth in clause (2) above, the Executive either has
not, within 30 days following receipt of such notice, cured such Cause, or
in the event such Cause is curable but cannot be cured within such 30-day
period, has not taken all reasonable steps to cure such Cause.
b. "Good Reason" shall mean the occurrence of the following events without the
Executive's written consent, provided that such occurrence is not cured
within thirty (30) days of the Executive giving the Company written notice
thereof and such written notice is given within ninety (90) days following
the Executive's first knowledge of the occurrence of the event: (1) a
reduction in the Executive's rate of Base Salary while an employee of the
Company provided, however, the Company may reduce the Executive's Base
Salary up to 15% per year without constituting "Good Reason" provided the
rate reduction uniformly applies to other company executives which are
similarly situated; or (2) a breach by the Company of an material provision
of this Agreement.
c. Notice of non-extension by the Company shall be deemed a termination
without Cause at the end of the then current Employment Term and notice of
non-extension by the Executive shall be deemed a termination without Good
Reason at the end of the then current Employment Term. Notwithstanding the
foregoing, the Company's notice of non-extension of the then current
Employment Term shall not constitute a termination without Cause if such
notice is given by the Company to the Executive after his attainment of age
sixty-five (65) provided such employment termination is specifically
permitted as a stated exception from applicable federal and sate
discrimination laws based on the Executive's position and retirement
benefits.
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d. The Executive may be reassigned to different job duties at different
locations from time-to-time by the Company. If a reassignment does not
reduce the Executive's status, base pay, or welfare benefits, it shall not
be "Good Reason". Reassignments to positions within Suez or its
subsidiaries or affiliates will not constitute "Good Reason".
5. Compensation and Benefits. During the Employment Term, the Executive
shall be entitled to:
a. A Base Salary, payable in equal installments in accordance with the
Company's procedures, at an annual rate of $240,000 US Dollars;
b. Participation in the Company's annual executive incentive program,
currently known as the Management Incentive Plan ("MIP"), with a target
award of 50% of Base Salary;
c. Participation in the Company's Long-Term Cash Incentive Plan, currently
known as the Long-Term Cash Incentive Plan (the "LTCIP") with a target
award level of 50% of Base Salary;
d. Such other bonuses and compensation, if any, as the Company in its sole
discretion may award to the Executive;
e. Participation in a Company non-qualified deferred compensation program
(should such a program be created), subject to the eligibility requirements
of such program;
f. Participation in the various medical, dental, disability, life insurance,
pension, profit sharing and other qualified and non-qualified supplemental
employee benefit plans generally made available by the Company, from time
to time, for its employees, subject to the terms and conditions of the
applicable plan documents and all applicable laws;
g. Vacation and sick leave in accordance with the Company's established
practices for its senior executives;
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h. Be reimbursed by the Company for all reasonable expenses actually incurred
by the Executive in connection with the performance of the Executive's
duties hereunder in accordance with policies established by the Company
from time to time and upon presentation of appropriate documentation;
i. Participation in the SUEZ equity award or equity based programs and in
accordance with Plan provisions and based on the Company's determination of
the Executive's level of performance; and
j. Use of an automobile, to be provided by the Company, and, subject to the
terms of the Company's policy, reimbursement for gas, maintenance and
insurance costs and expenses incurred by the Executive with respect to such
automobile together with an additional "gross-up" payment to cover all
income and employment taxes imposed on the Executive during the Employment
Term attributable to imputed income derived from the personal use of such
automobile and the foregoing payments.
6. Termination.
a. General Rules. If not terminated earlier in accordance with the next
sentence, the employment hereunder shall terminate at the end of the
Employment Term as provided in Section 3 above. The employment of the
Executive hereunder and the Employment Term may be terminated earlier at
any time by written notice (1) by the Company with or without Cause (2) by
the Executive with or without Good Reason, other than Voluntary Retirement,
(3) by the Executive due to voluntary retirement by the Executive
("Voluntary Retirement"), (4) by the Company due to the Executive's
Disability, or (5) by the Executive due to his death.
b. Disability.
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(1) At any time after a Disability (as defined below) occurs, provided the
Executive has not then returned to his duties on a regular full-time
basis, the Company may terminate the Executive's employment effective
forthwith after giving notice to the Executive of such termination
provided the Chairman's Committee, upon advice of a medical doctor
selected in accordance with Section 6b. hereof, determines that
either: (a) the Executive has been incapable of performing his
essential duties and responsibilities under the Agreement for the
period specified in Section 6b.; or (b) based on the Executive's
current incapability, it is likely the Executive will remain incapable
of performing his essential duties and responsibilities under the
Agreement for the period specified in Section 6b.
(2) "Disability" shall mean the mental or physical incapacity of the
Executive such that (a) he qualifies for long-term disability benefits
under a Company's sponsored long-term disability policy or (b) he has
been incapable (or is likely to be incapable) as a result of illness,
disease, mental or physical disability, disorder, infirmity, or
impairment or similar cause of performing his essential duties and
responsibilities for any period of one hundred eighty (180) days
(whether or not consecutive) in any consecutive three hundred
sixty-five (365) day period. Disability shall be determined by an
approved medical doctor selected by the Company and the Executive. If
the Company and the Executive cannot agree on a medical doctor, each
party shall select a medical doctor and the two doctors shall select a
third who shall be the approved medical doctor for this purpose.
7. Payments and Benefits upon Termination.
a. Termination For Good Reason or Without Cause.
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If, during the Employment Term, the Executive terminates his employment
with the Company for Good Reason or the Executive's employment is
terminated by the Company without Cause, (other than for Disability), the
Company shall have no liability or further obligation to the Executive
except that the Executive shall be entitled to receive:
(1) within 30 days after such termination of employment, any earned
but unpaid Base Salary for the period before termination and any
declared but unpaid bonuses for prior periods which have ended at the
time of such termination ("Entitlements");
(2) at the time provided in such plan, any rights to which he is
entitled in accordance with plan provisions under any employee benefit
plan, program or arrangement, fringe benefit or incentive plan,
including with respect to life insurance ("Rights");
(3) at the time MIP or LTCIP payments would otherwise have been paid,
a pro rata portion of the annual bonus he would have received under
the Company's MIP had the Executive remained employed by the Company
for the full fiscal year in which his termination occurs, multiplied
by the ratio of the number of days of his employment by the Company
during such fiscal year to 365 (the "Pro Rata Bonus") and a pro rata
portion of any payment he would have received under the Company's
LTCIP had he remained employed by the Company for the full long-term
incentive period or periods in which his termination occurs,
multiplied by the ratio of the number of days of his employment by the
Company during such period to the full number of days in such period
(the "Pro Rata Long-Term Incentive") (such amounts to be referred to
herein collectively as the "Pro Rata Bonus and Incentive Payments");
and
(4) within 30 days after termination, a lump sum severance payment
equal to one and one-half (1.5) times the sum of his Executive's
Annual Salary and MIP award
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("Severance Pay") (The MIP award will be calculated assuming
achievement of 100% of target under his MIP in effect for the fiscal
year in which his employment was terminated).
b. Additionally, upon termination, for Good Reason or without Cause, the
Company shall provide the Executive (and his eligible dependent) with
continued coverage under the Company's group medical and dental plans
("health plans" or "health plan" if singular) for an 18-month period
following the Executive's termination of employment with the Company;
provided, however, such continued coverage shall immediately cease upon the
Executive becoming eligible for coverage under a subsequent employer's
group health plan and the Executive agrees to pay the active employee
premium rate for the coverage. "Health plans" does not include life
insurance, accidental death and dismemberment insurance, or disability
insurance. Arrangement for such continued participation in the Company's
group health plan shall be accomplished, at the Company's election, either
through the Company's continuation of the Executive's coverage on a single
or family-coverage basis, as applicable, under the Company's group health
plan or by the Executive's direct payment of the monthly COBRA premiums
charged at the active employee rate for the COBRA coverage for a period of
18 months following the Executive's termination of employment, subject, at
all times to the Executive's eligibility for continued coverage under
COBRA. Notwithstanding the foregoing, the continuation period for group
health benefits under Section 4980B of the Code by reason of the
Executive's termination of employment with the Company shall be measured
form the Executive's actual date of termination of employment.
c. Termination Due to Voluntary Retirement, Death, or Disability. If, during
the Employment Term, the Executive terminates employment due to Voluntary
Retirement or his death, or his
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employment is terminated by the Company due to Disability, the Company
shall have no liability or further obligation to the Executive (or his
estate or designated beneficiaries under any Company-sponsored employee
benefit plan in the event of his death) except as follows:
(1) any Entitlements within 30 days of such termination of employment
or, if later, the date such Entitlements would otherwise be paid to
active employees of the Company;
(2) the Pro Rata Bonus and Incentive Payments, at the time such
payments would be paid to active employees; and
(3) any Rights at the time provided in the relevant plans.
d. Termination For Cause or Without Good Reason.
If, during the Employment Term, the Executive's employment is terminated by
the Company for Cause or by the Executive other than for Good Reason,
Voluntary Retirement or death, the Company shall have no liability or
further obligation to the Executive except as follows:
(4) within 30 days of such termination of employment, any earned but
unpaid Base Salary for the period prior to termination;
(5) any other earned but unpaid amounts including any declared but
unpaid bonuses for prior periods which have ended at the time of such
termination; and
(6) any Rights at the time provided in the relevant plans.
e. As a condition of receiving the payments and benefits provided under this
Section 7, other than the Entitlements, Rights, any right to COBRA benefits
paid solely by the Executive, and any accrued but unused vacation pay, the
Executive or his legally appointed representative (if he dies or is
disabled), shall be required to execute a release (in such form as
reasonably requested by the Company) releasing the Company and its
Affiliates (as such term is defined below) from any and all obligations and
liabilities to the Executive arising from or in
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connection with his employment or termination of employment with the
Company and any disagreements with respect to such employment, and such
release shall not apply with respect to any rights of the Executive to
indemnification under the Company's Certificate of Incorporation or
By-Laws.
f. The payments made pursuant to this Section 7 and Section 9 below, if any,
other than the Entitlements, shall be excluded from all pension and benefit
calculations under the employee benefit plans of the Company.
8. Covenants of the Executive.
a. During the Executive's employment with the Company hereunder and for a
period of two (2) years thereafter, (1) the Executive 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); (2) the Executive 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 Affiliate (as such term is defined below)) at the time of
this Agreement or who shall subsequently become an employee of the Company
(or its Subsidiaries and Affiliates); and (3) the Executive will not
solicit, in competition with the Company, any person who is, or was at any
time within the twelve months prior to the Executive's termination of
employment, a customer of the business conducted by the Company (or its
Subsidiaries). For purposes of determining whether to permanently withhold,
or recover, payments from the Executive pursuant to Section 8(j) hereof;
the Chairman's Committee shall
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reasonably determine what constitutes a competing business; provided that
(1) the scope of businesses and the jurisdictions and marketing areas
within which the Executive has agreed not to compete pursuant to clause
(a)(1) of this Section 8 shall, for any challenged activity of the
Executive, be determined as of the date of any such activity and (2) the
Executive's ownership of securities of two percent (2%) or less of any
publicly traded class of securities of a public company shall not be
considered to be competition with the Company. For purposes of Section 7
and 8, "Subsidiary" shall mean a corporation in which the Company owns a
50% (or greater) ownership interest, and the term "Affiliate" shall mean
the ultimate parent of the Company ("Ultimate Parent") and the Subsidiaries
of the Ultimate Parent.
b. During the Executive's employment with the Company and thereafter, (1) the
Executive 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) the Executive 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
Executive 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 the Executive. All rights to new processes, techniques,
know-how, inventions, plans, products, patents and
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devices developed, made or invented by the Executive, alone or with others,
while an employee of 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 the
Executive 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 the Executive or otherwise
coming into the Executive's possession in the course of the performance of
the Executive's services under this Agreement, shall be the exclusive
property of Company and shall be delivered to Company and not retained by
the Executive (including, without limitations, any copies thereof) upon
termination of this Agreement for any reason whatsoever.
c. The Executive 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 the Executive or under which the Executive acquired the right
to grant licenses or become licensed, whether alone or jointly with others,
during the term of this Agreement. All of the Executive'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 the Executive to
anyone within one (1) year after the termination of his employment under
this Agreement, which relates to any matters pertaining to, applicable to,
or useful in connection with, the business of the Company
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shall be deemed to have been made or conceived or developed by the
Executive during the term of this Agreement, unless proved by the Executive
to have been made and conceived and developed after the termination of this
Agreement.
d. For all of the Executive's Inventions, the Executive will, upon request of
the Company, during the term of this Agreement and thereafter:
(1) execute and deliver all documents which the Company shall deem
necessary or appropriate to assign, transfer and convey to the
Company, all of the Executive'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
(2) do all other things (including the giving of evidence in suits and
other procedures) 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.
e. The Executive's obligations under paragraphs (b), (c), and (d) above do not
apply to Inventions for which no equipment, supplies facility or
confidential information of the Company was used, and which were developed
entirely on the Executive's own time unless the Inventions relate:
(1) to the business of the Company; or,
(2) to the Company's actual or demonstrably anticipated research or
development; or,
(3) the Inventions result from any work performed by the Executive for
the Company.
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f. The Executive hereby assigns to the Company the copyright in all works
prepared by the Executive which are either:
(1) within the scope of the Executive's employment; or,
(2) based upon information acquired from the Company not normally made
available to the publicly; or,
(3) commissioned by the Company but not within the Executive's scope
of employment.
The Executive agrees to submit all such works to the Vice President of
Research for approval prior to publication or oral dissemination. The
Executive also agrees to do all things (including the giving of evidence in
suits and other proceedings) which the Company shall deem necessary or
appropriate to obtain, maintain, and enable the Company to protect its
rights in and to such works.
g. The Executive hereby releases and allows the Company to use, for any lawful
purpose, any voice reproduction, photograph, or other video likeness of the
Executive made in the scope of the Executive's employment.
h. All expenses incident to any action required by the Company to assign
Inventions or copyrights to the Company or so taken in its behalf pursuant
to the terms of this Agreement shall be borne by the Company, including a
reasonable payment for the Executive's time and expenses involved if not
then in the Company's employ, which payment for such time shall not amount
to more than double the Executive's Base Salary for a period of time at the
rate being paid to the Executive by the Company at the time of termination
of employment.
i. The Executive acknowledges that a breach of his covenants contained in this
Section 8 may cause irreparable damage to the Company (or its Subsidiaries
and Affiliates), the exact
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amount of which will be difficult to ascertain, that the remedies at law
for any such breach will be inadequate and that the Pro Rata Bonus and
Incentive Payments, any Severance Pay and any other payments and benefits,
other than the Entitlements, Rights, any right to COBRA benefits paid
solely by the Executive, and any accrued but unused vacation pay are
additional consideration for the covenants contained in this Section.
Accordingly, the Executive agrees that if he breaches any of the covenants
contained in this Section, in addition to any other remedy which may be
available at law or in equity, the Company shall be entitled to specific
performance and injunctive relief. In addition, the breach of any of the
covenants contained in this Section shall entitle the Company to
permanently withhold, and, if applicable, to recover from the Executive any
amounts paid with respect to, the Pro Rata Bonus and Incentive Payments,
and Severance Pay and any other payments and benefits, other than the
Entitlements, Rights, any right to COBRA benefits paid solely by the
Executive, and any accrued but unused vacation pay. The Company shall
provide the Executive with at least five days prior written notice before
withholding of any payment provided for in the immediately preceding
sentence.
j. The Company and the Executive further acknowledge that the time, scope,
geographic area and other provisions of this Section have been specifically
negotiated by sophisticated commercial parties and agree that all such
provisions are reasonable under the circumstances of the activities
contemplated by this Agreement. If the agreements in this Section shall be
determined by any court of competent jurisdiction to be unenforceable by
reason of their extending for too great a time, or over too great a
geographical area, or by reason of their being too extensive in any other
respect, they shall be interpreted to extend only over the maximum time for
which they may be enforceable and/or over the maximum geographical
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area as to which they may be enforceable and/or to the maximum extent in
all other respects as to which they may be enforceable, all as determined
by such court in such action.
k. The Executive agrees to cooperate with the Company during this employment
hereunder and thereafter (including following the Executive's termination
of employment for any reason), by making himself reasonably available to
testify on behalf of the Company in any action, suit, or proceeding,
whether civil, criminal, administrative, or investigative, and to assist
the Company, in any such action, suit, or proceeding, by providing
information and meeting and consulting with the Company's Board of
Directors or its representatives or counsel, or representatives or counsel
to the Company, as reasonably requested; provided, however that the same
does not materially interfere with his then current professional activities
or important personal activities and is not contrary to the best interests
of the Executive. The Company agrees to reimburse the Executive, on an
after-tax basis, for all expenses including pre-approved legal expenses,
actually incurred in connection with his provision of testimony or
assistance, and, if during the period following the Employment Term, the
Company requests the Executive's cooperation for a period of greater than 8
hours per month, the Company agrees to reimburse the Executive at a rate of
$150.00 per hour.
l. The Executive agrees that, during his employment and thereafter (including
following the Executive's termination of employment for any reason) he will
not make statements or representations, or otherwise communicate, directly
or indirectly, in writing, orally, or otherwise, or take any action which
may, directly or indirectly, disparage the Company, its Subsidiaries or
Affiliates, or its or their respective officers, directors, employees,
advisors, business or reputations.
9. Special Tax Provision.
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a. Except as otherwise provided in this Section 9, if any amount or benefit
paid to the Executive, (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Company or any person
affiliated with the Company), as a result of any change in ownership of the
Company covered by Code Section 280G(b)(2) ("Change in Control")
(collectively, the "Covered Payments") is subject to the excise tax imposed
by Section 4999 of the Code and/or any interest or penalties with respect
to such excise tax (such excise tax is hereinafter referred to as the
"Excise Tax"), the Company shall pay to the Executive as additional payment
(the "Tax Reimbursement Payment") in an amount such that after payment by
the Executive of all taxes (including any Excise Tax) (including without
limitation, income taxes) imposed upon the Tax Reimbursement Payment, the
Executive retains an amount of the Tax Reimbursement Payment equal to the
Excise Tax imposed upon the Covered Payments. Notwithstanding the
foregoing, this Section 9 will apply to Covered Payments which are subject
to the Excise Tax by reason of a Change in Control only where the Executive
is terminated without Cause by the Company or resigns for Good Reason from
the Company's employ within two years of such Change in Control.
b. To determine the amount of the Tax Reimbursement Payment, the Executive
shall be deemed to (1) pay Federal income taxes at the highest applicable
marginal rate of Federal income taxation for the calendar year in which the
Tax Reimbursement Payment is to be made and (2) pay any applicable state
and local income taxes at the highest applicable marginal rate of income
taxation for the calendar year in which the Tax Reimbursement Payment is to
be made, net of the maximum reduction in Federal income taxes which could
be obtained from deduction of such state and local taxes if paid in such
year.
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c. (1)(a) If the Company's outside legal counsel (based on calculations made
by a benefits consulting firm appointed by the Company or by the
Company's independent certified public accountants) or the Company's
independent certified public accountants (the "Tax Advisor")
determines, the correct amount of the Tax to be less than the amount
determined when the Tax Reimbursement Payment was made, the
Executive shall repay the Company, within thirty days after the
amount of such reduction in Tax Reimbursement Payment is determined
by the Tax Advisor, the portion of the prior Tax Reimbursement
Payment attributable to such reduction (including the portion of the
Tax Reimbursement Payment attributable to the Excise tax and
federal, state and local income tax imposed on the portion of the
Tax Reimbursement Payment being repaid by the Executive, using the
assumptions and methodology used to calculate the Tax Reimbursement
Payment (unless manifestly erroneous)), plus interest on the
repayment at the rate provided in Section 6621(a)(1) of the Code.
(b) If the determination set forth in (9) above is made by the Tax
Advisor after the filing by the Executive of any of his tax returns
for the calendar year in which the change in ownership event covered
by Code Section 280G(b)(2) occurred, but prior to the date the
statute of limitations has expired for refund claims, the Executive
shall file at the request of the Company an amended tax return in
accordance with the Tax Advisors determination, but no portion of
the Tax Reimbursement Payment shall be required to be refunded to
the Company until actual refund or credit of such portion has been
made to the Executive, and interest payable to the Company shall not
exceed the interest received or credited to the Executive by such
tax authority for the time it held
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such portion (less any tax the Executive must pay on such interest
and which the Executive is unable to deduct as a result of payment
of the refund). If the Excise Tax is later determined by the Tax
Advisor or the Internal Revenue Service to exceed the amount taken
into account hereunder when the Tax Reimbursement Payment is made
(including by reason of any payment the existence or amount of which
cannot be determined at the time of the Tax Reimbursement Payment),
the Company shall make an additional Tax Reimbursement Payment in
respect of such excess (plus any interest or penalties payable with
respect to such excess) once the amount of such excess is finally
determined.
(2) If any controversy with the Internal Revenue Service (or other
existing authority) arises under this Section 9, the Executive shall
permit the Company to control issues related to this Section 8,
provided such issues do not potentially materially adversely affect
the Executive; provided further, however, the Company shall bear and
pay directly all costs and expenses (including additional interest
and penalties) incurred in connection with such context and shall
indemnify and hold the Executive harmless, on an after-tax basis,
for any Excise Tax or income tax thereon, including interest and
penalties, which is payable to the Executive pursuant to the
provisions of Section 9a. If any issues do potentially materially
adversely affect the Executive, the Executive and the Company shall
in good faith cooperate so as not to jeopardize resolution of the
issues, but if the parties cannot agree the Company shall make the
final determination with regard to the issues; provided further,
however, that the Company shall bear and
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pay directly all costs and expenses (including additional interest
and penalties) incurred in connection with such contest and shall
indemnify and hold the Executive harmless, on an after-tax basis,
for any Excise Tax or income tax thereon, including interest and
penalties, which is payable to the Executive pursuant to the
provisions of Section 9a. If any conference occurs with any taxing
authority about the Excise Tax or associated income taxes, the
Executive shall permit a Company representative to accompany the
Executive, and the Executive and his representative shall cooperate
with the Company and its representative.
(3) With regard to any initial filing for a refund or any other
action required pursuant to this Section 9 (other than by mutual
agreement) or, if not required, agreed to by the Company and the
Executive, the Executive shall cooperate fully with the Company.
d. The Company shall use its best efforts to cause the Tax Advisor to promptly
deliver the initial determination required hereunder within forty-five (45)
days after the change in ownership covered by Section 280G(b)(2) of the
Code. The Tax Reimbursement Payment, or any portion thereof, payable by the
Company shall be paid not later than the thirtieth (30th) day following the
determination by the Tax Advisor or as soon as practicable thereafter. The
amount of such payment shall be subject to later adjustment in accordance
with the determination of the Tax Advisor as provided herein.
e. The Company shall be responsible for all charges of the Tax Advisor, any
benefits consulting firm appointed by the Company and the Company's
independent certified accountants.
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f. The Executive and the Company shall mutually agree on and promulgate
further guidelines in accordance with this Section 9 to the extent, if any,
necessary to effect the reversal of an excessive, or a shortfall in, the
Tax Reimbursement Payments.
g. The payments made pursuant to this Section 9 shall be excluded from all
pension and benefit calculations under the employee benefit plans of the
Company.
10. 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:
If to the Executive:
Xxx X. Xxxxxxxxx
000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
If to the Company:
ONDEO Nalco Company
Xxx XXXXX Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
11. General
a. Governing Law. The validity, interpretation, construction and performance
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.
b. 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
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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.
c. Assignability. The Executive may not assign his interest in or delegate
his duties under this Agreement. This Agreement is for the employment
of the Executive, personally, and the services to be rendered by him
under this Agreement must be rendered by him and no other person. The
Executive represents and warrants to the Company that the Executive has
no contracts or agreements of any nature that the Executive has entered
into with any other person, firm or corporation that contain any
restraints on the Executive'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. Notwithstanding
anything else in this Agreement to the contrary, the Company shall
assign this Agreement to, and all rights hereunder shall inure to the
benefit of, any person, firm or corporation resulting from the
reorganization of the Company or succeeding to the business or assets
of the Company by purchase, merger or consolidation and the Company
shall require the assignee or assume this Agreement in writing.
d. Compliance with Rules and Policies. The Executive 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. In addition, the
Executive, where applicable, shall comply in all material respects with
all laws, rules and
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regulations that are generally applicable to the Company, and its
employees, directors and officers.
e. Arbitration. (1) The parties shall use their reasonable best efforts
and good will to settle all disputes by amicable negotiations. The
Company and the Executive 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 the Executive's
employment 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.
(2) 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 the Executive shall be entitled to appoint one
arbitrator. These two appointed arbitrators shall then
appoint a third arbitrator by their mutual agreement.
(3) 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.
(4) 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
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the arbitrator or arbitral panel may be entered in any court
having jurisdiction thereof.
(5) 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.
(6) The Company and the Executive 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 of
dispute includes a finding that the Executive's claims in
such contest or dispute were frivolous or brought in bad
faith.
f. Withholding. The Company shall withhold from all amounts due hereunder
any applicable withholding taxes payable to federal, state, local or
foreign taxing authorities.
g. 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
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in writing by the parties hereto. Notwithstanding the foregoing, the
following agreements are not superseded by this Agreement and are to
remain in effect: (1) the Death Benefit Agreement, if any, between the
Company and the Executive, which the Company, in its discretion, may
replace with an insured benefit; and (2) the Agreement, if any, to
Restore Benefits Reduced by ERISA-Related Limits between the Company
and the Executive.
h. Duration. Notwithstanding the Employment Term hereunder, the applicable
sections of this Agreement shall continue for so long as any
obligations remain under this Agreement.
i. Survival. The covenants set forth in [this] Section shall survive and
continue to be binding upon the Executive notwithstanding the
termination of this Agreement for any reason whatsoever.
j. 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.
k. Counterparts. This Agreement may be executed in two or more
counterparts, all of which taken together shall constitute one
instrument.
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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.
ONDEO NALCO COMPANY
Date: ______________________ ___________________________________
Name:
Title:
EXECUTIVE
Date: ______________________ ___________________________________
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