Exhibit 10.1
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is effective as of May 11,
2006, by and between Compass Minerals International, Inc., a Delaware
corporation ("Company"), and Xxxxxx X. Xxxxxxxxxxxxx ("Executive").
WHEREAS, Company desires to employ Executive on the terms and
conditions set forth herein; and
WHEREAS, Executive is willing to render services to Company on the
terms and conditions set forth herein with respect to such employment;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements contained herein, Company and Executive agree as
follows:
1. EMPLOYMENT. Company hereby employs Executive as President and Chief
Executive Officer ("CEO") upon the terms and conditions set forth herein, which
employment Executive hereby accepts. In addition, Company shall nominate
Executive to its Board of Directors ("Board").
2. EXCLUSIVE SERVICES. Executive shall devote all working time,
ability, and attention to the business of Company during the term of this
Agreement and shall not, directly or indirectly, render any services to or for
the benefit of any other business, corporation, organization, or entity, whether
for compensation or otherwise, without the prior knowledge and written consent
of Company's Board, which consent Company's Board shall not unreasonably
withhold; provided, however, that this Section 2 shall not prevent Executive's
involvement in civic/charitable activities that do not interfere with
performance of his duties).
3. DUTIES. Company hereby employs Executive as President and CEO, in
which position Executive shall perform for or on behalf of Company such duties
as are customary of Company's President and CEO and such other duties as
Company's Board shall assign from time to time in its discretion; shall render
his services at the principal business offices of Company in Overland Park,
Kansas, and as such may be located from time to time thereafter, unless
otherwise agreed in writing between Company's Board and Executive; and shall
perform such duties in accordance with Company's policies and practices,
including but not limited to its employment policies and practices, and subject
only to such limitation, instruction, direction, and control as Company's Board
may specify from time to time in its discretion; provided, however, that
Executive's performance of his duties hereunder shall at all times be subject to
Section 9, including but not limited to the "Good Reason" provision of Section
9.c.(3).
4. TERM. This Agreement shall begin on May 11, 2006 ("Commencement
Date") and shall continue to Executive's 65th birthday, unless earlier
terminated as provided herein.
5. COMPENSATION. As compensation for services rendered under this
Agreement, Executive shall receive the following:
a. BASE SALARY. Initially, Company shall pay Executive a base
salary ("Base Salary") of $450,000 per year, payable in accordance with
Company's regular payroll schedule, less applicable deductions and
withholdings. Company (1) shall review Executive's Base Salary at least
annually; (2) may increase Executive's Base Salary at any time in its
discretion; and (3) may decrease Executive's Base Salary at any time,
provided Executive consents in writing to such decrease.
b. ANNUAL BONUS. For calendar year 2006, Executive shall be
eligible to participate on a pro-rated basis in Company's Annual
Incentive Plan ("Plan"). For 2006, Executive's target under the Plan
shall be 80% of Base Salary, and Executive's actual bonus payment shall
be based on, among other items included in the Plan, Company's
financial goals as approved by the Board for 2006 and Executive's
individual goals, which Executive will develop and recommend to
Company's Compensation Committee sufficiently in advance for approval
by July 1, 2006; provided, that, in consideration of Executive's
agreeing to accept Company's President/CEO position, Executive's 2006
payment shall not be less than 45% of Executive's Base Salary. For
calendar year 2007 and beyond, Executive shall be eligible to receive
a bonus pursuant to an annual performance based incentive compensation
program to be established by the Board, with Executive's annual target
to be no less than 80% of Executive's then Base Salary, unless
Executive consents in writing to a lesser annual target. Payment of any
bonus described in this Section 5.b. shall be according to the
established plan and subject to Executive's continued employment by
Company through the date the bonus is paid pursuant to the annual
incentive compensation program.
c. INITIAL EQUITY GRANT. As of the Commencement Date, Company
shall grant 100,000 non-qualified stock options and 25,000 restricted
stock units to Executive through its customary equity award agreements,
which shall govern treatment of any and all stock options and
restricted stock units, except as otherwise provided herein.
6. BENEFITS. In addition to the compensation pursuant to Section 5
hereof, Executive shall be entitled to or eligible for the following:
a. PARTICIPATION IN EMPLOYEE PLANS. Executive shall be
entitled to participate in any health, disability, and group term life
insurance plans (throughout Employee's employment, Company shall ensure
such group term life insurance plans provide for a minimum benefit for
Executive of one times Executive's then Base Salary); in salary
deferrals plan(s); in any pension, retirement, or profit sharing plans;
in any annual executive bonus or other compensation plans; and/or in
any other perquisites and/or benefit plans that Company extends
generally from time to time to its executives. In addition, (i)
Executive shall be entitled to an "executive physical," for which
Company, at Executive's election, will either pay directly or reimburse
Executive, in either case up to $3,000, adjusted annually according to
the Consumer Price Index, and (ii) Company shall pay Executive $2,000
adjusted annually according to the Consumer Price Index for the
purchase of such additional life insurance as Executive may elect.
b. VACATION. Executive shall be entitled to up to 5 weeks of
paid vacation annually.
c. EQUITY AWARDS. Subject to Board approval, Executive shall
be entitled to equity-based compensation awards that Company extends
generally from time to time to its executives, subject to the terms and
conditions of any respective equity-based compensation plans and award
agreements and the provisions of this Agreement.
d. RELOCATION. Company shall reimburse Executive for the
expenses he and his family incur in relocating to the Overland Park,
Kansas, area in accordance with Company's Relocation Plan and/or as
otherwise agreed by Company.
7. REIMBURSEMENT OF EXPENSES. Subject to such rules and procedures as
Company from time to time adopts or specifies, Company shall reimburse Executive
for reasonable business expenses properly incurred in the performance of his
duties under this Agreement.
8. RESTRICTIVE COVENANTS/CHANGE IN CONTROL SEVERANCE AGREEMENT.
Executive hereby agrees to (a) the terms of the separate Change In Control
Severance Agreement (including Restrictive Covenant Agreement), both of which
Executive agrees to execute; and (b) the terms of Company's standard
Confidentiality Agreement, which Executive also agrees to execute.
9. TERMINATION. This Agreement may be terminated as follows:
a. This Agreement and Executive's employment hereunder shall
automatically terminate in the event of Executive's death or
Disability.
b. Company may terminate this Agreement and Executive's
employment hereunder at any time, with or without Cause, upon written
notice to Executive. Executive may terminate this Agreement and his
employment hereunder at any time (including for voluntary retirement),
with or without Good Reason, upon 30 days written notice to Company
(for which notice period Executive shall be compensated even if Company
relieves Executive of his duties during such period).
c. For purposes of this Agreement
(1) "Disability" occurs when Executive is unable to
perform the essential functions of his position, with or
without reasonable accommodation, for more than thirty (30)
consecutive days after reaching maximum medical improvement.
(2) "Cause" means, in Company's good faith belief,
any of the following: (i) the conviction of Executive of, or
plea of guilty or no contest by Executive to, a felony or
misdemeanor involving moral turpitude; (ii) the indictment of
Executive for a felony or misdemeanor under the federal
securities laws; (iii) the willful misconduct or gross
negligence by Executive resulting in material harm to Company
or any Company subsidiary; (iv) fraud, embezzlement, theft, or
dishonesty by Executive against Company or any Company
subsidiary, or willful violation by Executive of a policy or
procedure of Company, resulting in any case in material harm
to Company; (v) material breach of any Confidentiality
Agreement or obligation and/or material breach of any
Restrictive Covenant Agreement or similar agreement by and
between Executive and Company; or (vi) material or intentional
falsification of any Company record. For purposes of this
Section, no act or failure to act by Executive shall be
considered "willful" unless done or omitted to be done by
Executive in bad faith and without reasonable belief that
Executive's action or omission was in the best interests of
Company or any Company subsidiaries. Any act, or failure to
act, based upon authority given pursuant to a resolution duly
adopted by the Board shall be conclusively presumed to be
done, or omitted to be done, by Executive in good faith and in
the best interests of Company. Company must notify Executive
in writing of any event constituting Cause within 90 days
following Company's knowledge of its existence or such event
shall not constitute Cause under this Agreement.
(3) Executive shall have "Good Reason" to terminate
this Agreement and his employment hereunder in the event of:
(i) a material adverse change in Executive's duties, in
Executive's reporting structure (except if Company appoints a
non-executive Chairman, in which case Executive shall not have
Good Reason unless such appointment occurs after a Change In
Control, as defined in Executive's separate Change In Control
Severance Agreement), or in Executive's responsibilities (as
set forth herein or as the same may be altered from time to
time thereafter); (ii) any reduction in Executive's Base
Salary (as set forth herein or as the same may be altered from
time to time), except as provided in this Agreement; (iii)
Company's relocation of Executive more than 50 miles from
Executive's primary office location (initially Overland Park,
Kansas) and more than 50 miles from Executive's principal
residence; or (iv) Company's sale to a entity that is not
publicly traded or that results in Company no longer being a
publicly traded entity. Before terminating this Agreement and
his employment hereunder for Good Reason, Executive must give
written notice to Company as to the details of the basis for
such Good Reason within 30 days following the date on which
Executive alleges the event giving rise to such Good Reason
occurred, and Company must have failed to provide a reasonable
cure within 30 days after its receipt of such notice.
10. SEVERANCE. In the event of a termination of this Agreement under
Section 9, the following shall apply:
a. If this Agreement and Executive's employment hereunder
terminates as a result of Executive's Disability, then Executive shall
receive the following: (i) his Base Salary, benefits earned, and
business expenses properly incurred through the date of termination;
and (ii) 60% of his then-current Base Salary for 12 months after such
termination of employment, during which time Executive shall be
eligible to participate in Company's then applicable health care plan
at the then regular employee contribution rate; provided that, if
Executive cannot continue to participate in Company plans providing
such benefits, then Company shall otherwise provide such benefits on
the same after-tax basis as if continued participation had been
permitted.
b. If Company terminates this Agreement and Executive's
employment hereunder without Cause or if Executive terminates this
Agreement and Executive's employment hereunder with Good Reason, then
Executive shall receive the following as soon as is reasonably
practicable after the effective date of the release referenced in
Section 10.e.: (i) his Base Salary, benefits earned, business expenses
properly incurred, and pro-rated annual performance based incentive
compensation through the date of termination; (ii) the lesser of (a) an
amount equal to 2 times Executive's highest annual Base Salary rate
during the 12 month period immediately before such termination or (b)
continuation of his Base Salary to age 65; (iii) reimbursement, up to a
maximum of 18 months, for premium payments for any COBRA coverage
Executive elects, if any; and (iv) immediate vesting of all stock
options and/or restricted stock units granted through the date of
termination, regardless of the provisions of any other agreement.
c. For any termination other than those listed in Sections
10.a.-b., Executive shall receive only his Base Salary, benefits
earned, and business expenses properly incurred through the date of
termination.
d. Upon termination for any reason, Executive (i) shall
provide reasonable cooperation to Company at Company's expense in
winding up Executive's work for Company and transferring that work to
other individuals as designated by Company, and (ii) shall reasonably
cooperate with Company in any investigation or litigation/future
investigation or litigation as requested by Company.
e. To be eligible for any payments under this Section beyond
regular employee benefits earned through the date of termination,
Executive must (i) execute and deliver to Company a final and complete
release in a form that is reasonably acceptable and approved by
Company, and (ii) in Company's good faith belief, be in full compliance
with his Restrictive Covenant Agreement and his Confidentiality
Agreement.
f. In connection with any severance payments under Section
10.b., Executive shall have no duty to mitigate his damages by seeking
other employment, and Company shall not be entitled to set off against
amounts payable hereunder any compensation that he may receive from
future employment.
g. In the event of a Qualifying Termination after a Change In
Control under Executive's separate Change In Control Severance
Agreement, the provisions of that separate agreement shall apply.
11. DELAY OF PAYMENTS. In the event any payment or distribution to be
made hereunder constitutes "deferred compensation" subject to Section 409A of
the Internal Revenue Code and Executive is determined to be a specified employee
(as defined in Section 409A), such payment or distribution shall not be made
before the date that is six months after the termination of Executive's
employment (or, if earlier, the date of the Executive's death). Payments to
which a specified employee would otherwise be entitled during the first six
months following the date of termination shall be accumulated and paid on the
first date of the seventh month following the date of termination.
12. RESOLUTION OF DISPUTES.
a. Any dispute or claim arising out of or relating to this
Agreement (except those for alleged breach of the Restrictive Covenant
Agreement and/or Confidentiality Agreement) or any termination of
Executive's employment shall be settled by final and binding
arbitration in Xxxxxxx County, Kansas, in accordance with the National
Rules for the Resolution of Employment Disputes of the American
Arbitration Association.
b. Other than attorney's fees (which are recoverable only as
otherwise provided by law), the costs of the arbitration shall be borne
by Company.
c. Any dispute or claim governed by this Section 12 shall be
heard by 1 arbitrator; provided, however, that either party may elect
to have any dispute governed by this Section 12 to be resolved by a
panel of three arbitrators, in which case the party electing same shall
bear any additional costs resulting from such election, the provisions
of Section 12.b. notwithstanding.
13. NOTICES. For purposes of this Agreement, all notices and other
communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered or 5 days after deposit in the
United States mail, certified and return receipt requested, postage prepaid,
addressed as follows:
If to Executive:
-----------------------------------------------------
If to Company: Compass Minerals International, Inc.
0000 Xxxx 000xx Xxxxxx
Xxxxxxxx Xxxx XX 00000
Attention: Vice President Human Resources
Either party may change its address for notice by giving notice in accordance
with the terms of this Section 13.
14. GENERAL PROVISIONS.
a. GOVERNING LAW AND CONSENT TO JURISDICTION. Interpretation
and/or enforcement of this Agreement shall be subject to and governed
by the laws of the State of Kansas, irrespective of the fact that one
or both of the parties now is or may become a resident of a different
state and notwithstanding any authority to the contrary.
b. INVALID PROVISIONS. If any provision of this Agreement is
held to be illegal, invalid, or unenforceable, then such provision
shall be fully severable, and this Agreement shall be construed and
enforced as if such illegal, invalid, or unenforceable provision had
never comprised a part hereof; and the remaining provisions hereof
shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance
herefrom. Furthermore, in lieu of such illegal, invalid, or
unenforceable provision there shall be added automatically as a part of
this Agreement a provision as similar in terms to such illegal,
invalid, or unenforceable provision as may be possible and still be
legal, valid, and enforceable.
c. CONSTRUCTION OF AGREEMENT. This Agreement and the
agreements attached hereto or referenced herein (including but not
limited to the Restrictive Covenant Agreement, Confidentiality
Agreement, and Change In Control Severance Agreement) set forth the
entire understanding of the parties and supersede all prior agreements
or understandings, whether written or oral, with respect to the subject
matter hereof. Except as expressly provided herein, in the event of any
conflict between this Agreement and the other agreements attached
hereto or referenced herein, this Agreement shall govern. No terms,
conditions, or warranties (other than those contained herein), and no
amendments or modifications hereto shall be binding unless made in
writing and signed by the parties hereto. This Agreement shall not be
strictly construed against either party.
d. BINDING EFFECT. This Agreement shall extend to and be
binding upon and inure to the benefit of the parties hereto, their
respective heirs, representatives, successors, and assigns. This
Agreement may not be assigned by Executive, but may be assigned by
Company to any person or entity that succeeds to the ownership or
operation of the business in which Executive is primarily employed by
Company.
e. WAIVER. The waiver by either party hereto of a breach of
any term or provision of this Agreement shall not operate or be
construed as a waiver of a subsequent breach of the same provision by
any party or of the breach of any other term or provision of this
Agreement.
f. TITLES. Titles of the Sections herein are used solely for
convenience and shall not be used for interpretation or construing any
word, clause, Section, or provision of this Agreement.
g. COUNTERPARTS. This Agreement may be executed in two or more
counterparts, each of which shall be deemed an original, but which
together shall constitute one and the same instrument.
h. INDEMNIFICATION. Company shall indemnify Executive in
accordance with its policies and practices and to the full extent
permitted by the general laws of the State of Delaware, now or
hereafter in force, including the advance of expenses under procedures
provided by such laws. Further, Company shall insure Executive is
covered by its D&O insurance policy to the same extent as any other
Director or Officer, as applicable.
i. BOARD APPROVAL. This Agreement is subject to approval by
Company's Board of Directors and shall not become effective and/or
enforceable unless and until such approval.
IN WITNESS WHEREOF, Company and Executive have executed this Agreement
as of the date and year first above written.
EXECUTIVE: ON BEHALF OF COMPANY:
/s Xxxxxx X. Xxxxxxxxxxxxx By: /s Xxxxx X. X'Xxxxxx
-------------------------- --------------------
Xxxxxx X. Xxxxxxxxxxxxx Xxxxx X. X'Xxxxxx, Director and Chair,
Compensation Committee
Approved by the Board of Directors on the 11th day of May, 2006.
