EXHIBIT 10.2
EMPLOYMENT AGREEMENT dated the 12th day
of June, 1996 by and between WITCO
CORPORATION, a Delaware corporation (the
"Company"), and E. XXXX XXXX ("Executive");
1. EMPLOYMENT AND DUTIES OF EXECUTIVE
1.1 EMPLOYMENT; TITLE: DUTIES. The Company hereby employs Executive, and
Executive hereby accepts employment as President and Chief Executive Officer of
the Company and appointment as Chairman of the Board of Directors of the Company
(the "Board") to be effective upon a date specified by Executive but no later
than June 13, 1996. In these capacities the principal duties of Executive shall
be to establish the strategic direction, and the development and achievement of
plans and objectives, of the Company and the selection and management of senior
executives of the Company, its subsidiaries and affiliates. Executive shall
render such services as are necessary and desirable to protect and advance the
best interests of the Company, acting, in all instances, under the supervision
of and in accordance with the policies set by the Board. Without further
compensation, Executive agrees to serve (if requested to do so) as an officer
and/or director of any Subsidiary. A "Subsidiary" means a corporation in which
more than 50% of the stock having the ordinary power to elect directors is owned
directly or indirectly by the Company.
1.2 PERFORMANCE OF DUTIES. Executive shall devote substantially all his
time and efforts during normal business hours, excluding any periods of vacation
and sick leave, to the performance of his duties as chief executive officer of
the Company. It shall not be a violation of this Agreement during the Term (as
hereinafter defined) for Executive to (i) serve on corporate, civil or
charitable boards or committees, (ii) deliver lectures or fulfill speaking
engagements and (iii) manage his personal investments, so long as such
activities do not interfere with the performance of his duties as chief
executive officer of the Company in accordance with this Agreement. During the
Term and for a two-year period thereafter, Executive shall not (unless his
employment shall have
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terminated for any reason other than Cause) engage in or become employed,
directly or indirectly, in a business which competes with the business of the
Company and its Subsidiaries, nor shall he act as a consultant to or provide any
services to, whether on a remunerative basis or otherwise, the commercial or
professional business of any other person which competes with the business of
the Company and its Subsidiaries, without the written consent of the Board,
which may be given or withheld by the Board in its absolute discretion.
Competition with the business of the Company and its Subsidiaries shall mean
sales of any product or services where the Company's sales of the same or
similar products or services amount to 20% of the Company's total sales.
2. TERM OF EMPLOYMENT
The employment of Executive pursuant to this Agreement shall
commence on the date hereof and end three years thereafter, provided, however
that such employment shall continue for annual periods thereafter unless either
party to this Employment Agreement shall have provided six months written notice
to the other of his or its intention that such employment shall not so continue.
3. COMPENSATION AND BENEFITS
The Company shall pay Executive as compensation for all of the
services to be rendered by him hereunder during the Term, the Basic Salary, the
Bonus and other benefits as provided for and determined pursuant to Sections 4
through 7 of this Agreement.
4. BASIC SALARY/BONUS/STOCK OPTION
4.1 BASIC SALARY. The Company shall pay Executive, as compensation
for all of the services to be rendered by him hereunder an annual salary of
$750,000 (as adjusted by the Board from time to time) (the "Basic Salary"),
payable in substantially equal, semi-monthly payments, less such deductions
or amounts as are required to be deducted or withheld by applicable laws or
regulations, deductions for employee contributions to welfare benefit plans
provided by the Company to Executive and less such other deductions or amounts,
if any, as are authorized by Executive. The Basic
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Salary shall be prorated for the month and year in which employment by the
Company commences or terminates. The Basic Salary shall be reviewed at least
annually by the Organization and Compensation Committee of the Board.
4.2 BONUS. Executive will be awarded and, unless deferred by Executive,
paid an annual cash bonus (the "Bonus") within ninety days after the close of
each fiscal year of the Company during the Term in an amount determined in
accordance with the provision of the Company's Officers' Annual Incentive
Program (the "OAIP") applicable to the Chief Executive Officer; provided,
however, that for the fiscal year ended December 31, 1996, the annual Bonus
shall be prorated to reflect the portion of such fiscal year during which
Executive was employed hereunder.
4.3 LTIP AWARD. Executive will receive pursuant to the terms of the
Company's Long Term Incentive Plan (the "Incentive Plan") a Target Award (as
defined in the Incentive Plan) of 17,800 shares of Common Stock of the Company
for the 1996-1998 performance period. The performance measurement and
corresponding performance target for that period is based on a targeted Return
on Equity (as defined in the Incentive Plan) for that three-year performance
period. The form of such award is set forth as Exhibit A to this Agreement.
4.4 STOCK OPTION GRANT. As of the Grant Date (as hereinafter defined),
Executive shall be awarded a non-qualified option to acquire 800,000 shares of
common stock, par value $5.00 per share, of the Company (the "Option") under the
1995 Stock Option Plan for Executives of Witco Corporation and its Subsidiaries
(the "Stock Option Plan") with an exercise price equal to the fair market value
of such shares of Company Common Stock (as determined pursuant to the Stock
Option Plan) on the trading day immediately prior to the public announcement of
Executive's employment by the Company (the "Grant Date"). The Option will vest
on a basis by which 50% of the shares subject to the Option shall become
exercisable one year from the Grant Date, an additional 25% of the shares shall
become exercisable on the second anniversary of the Grant Date and the remaining
25% shall become exercisable on the third anniversary of the Grant Date. The
Option will be evidenced by the form of Stock Option Agreement set forth as
Exhibit B to this Agreement.
4.5 RESTRICTED STOCK AWARD. As of the Grant Date, Executive shall be
awarded 30,000 shares of Company Common
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Stock subject to the restrictions set forth in Exhibit C hereto (the "Stock
Award").
4.6 MAKE-WHOLE AWARD. As of the Grant Date, Executive shall
receive (i) $500,000 (the "Signing Bonus") and (ii) a possible award of shares
of Company Common Stock subject to the restrictions set forth in Exhibit D
hereto (the "Contingent Stock Award") in an aggregate amount equal to the value
of the stock options, if any, which Executive will forfeit upon leaving his
employment with Albemarle Corporation ("Albemarle"). For purposes of determining
the number of shares of Company Common Stock subject to the Contingent Stock
Award, the shares shall be valued at the exercise price established for the
Option. For purposes of determining the stock option benefits forfeited from
Albemarle, the value shall be based upon the spread between the actual exercise
price of a forfeited Albemarle option and an assumed value of $23.00 per share.
Executive represents that he has endeavored to, and will continue to attempt to,
minimize the stock option benefits so forfeited. Not later than March 31, 1997,
a second installment of the Signing Bonus will be paid to Executive in an amount
equal to $500,000, less the amount received pursuant to the Company's Officers
Annual Incentive Program with respect to 1996 performance.
5. ADDITIONAL BENEFITS AND REIMBURSEMENT FOR EXPENSES
5.1 ADDITIONAL BENEFITS. The Company shall provide the following
additional benefits to Executive during the Term:
(i) participation upon the commencement of employment on an
equitable basis at the level of Chief Executive Officer in any compensation
plans which cover senior executives or employees of the Company, including
without limitation the Incentive Plan, the Stock Option Plan, the 1994 Deferred
Compensation Plan ("Deferred Plan"), the Excess Benefit and Compensation Cap
Plan of Witco Corporation ("Excess Plan") and any other plans which are
hereafter adopted and cover senior executives or employees of the Company.
(ii) full coverage for Executive and his eligible family members
under the Company's medical, dental, hospitalization and medical insurance and
reimbursement plans, participation in the Witco Corporation Retirement Plan (the
"Pension Plan") and the Supplemental Executive
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Retirement Plan of Witco Corporation (the "SERP") and group life insurance
programs covering senior executives of the Company, as they may exist from time
to time.
(iii) six weeks vacation with pay in each calendar year.
(iv) use by Executive of an automobile of his choice in accordance
with Company policy.
(v) immediate participation and coverage in disability plans
provided by the Company for its senior executives.
(vi) the Company will reimburse Executive pursuant to the Company's
relocation plan for his relocation to Connecticut.
(vii) by virtue of this Agreement, the Executive will participate in
the SERP on the terms provided in Section 7 hereof (such plan as so amended
being the "SERP") and the Company shall hereafter maintain the SERP and
Executive shall be a participant therein.
(viii) pay the initiation, any bond and entry or other one time fees
for a country club and a lunch club in New York City, New York of Executive's
choosing.
(ix) pay the reasonable legal fees and expenses of counsel for
Executive for review of this Agreement and representation of Executive in any
dispute arising hereunder.
(x) the continuation of financial planning services by AMG for
Executive.
5.2 BUSINESS LOSS REIMBURSEMENT. In order to assure the ability of the
Executive to devote his undivided attention to his responsibilities hereunder,
Executive agrees that his wife will either (a) contract for the professional
management of Brenda's Interiors & Gifts, Inc. dba, The Golden Swan, or (b)
liquidate and dispose of that business, in either case not later than June 30,
1997. In the event Executive's wife determines to liquidate or dispose of the
business the Company will reimburse Executive and his wife for any loss
attributable thereto; provided, that the Company's reimbursement obligation
hereunder shall not exceed $750,000. Such reimbursement will be made
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promptly following Executive's accounting for any such loss in such reasonable
detail as the Company may require.
5.3 REIMBURSEMENT FOR EXPENSES. The Company shall pay or reimburse
Executive for all reasonable travel, entertainment and other business expenses
actually incurred or paid by him during the Term in the performance of his
services under this Agreement. Such expenses shall be accounted for in such
reasonable detail as the Company may require.
6. TERMINATION OF EMPLOYMENT
6.1 DEATH. If Executive dies during the Term, on the date of his
death this Agreement shall terminate.
6.2 DISABILITY. If, during the Term, Executive is subject to a
Disability (as hereinafter defined), the Company may, at any time thereafter
during the continuation of the Disability, terminate Executive's employment by
Notice of Termination. For purposes hereof the term "Disability" shall mean the
inability of Executive to perform Executive's duties of employment for the
Company pursuant to the terms of this Agreement, because of physical or mental
disability, where such disability shall have existed for a period of more than
120 consecutive days or an aggregate of 180 days in any 365-day period, and if a
long-term disability plan is maintained by the Company, Executive is entitled to
receive long-term disability payments under such plan. The existence of a
Disability means that Executive's mental and/or physical condition substantially
interferes with Executive's performance of his duties for the Company as
specified in this Agreement.
6.3 TERMINATION FOR CAUSE. During the Term the Company may terminate
Executive's employment hereunder for Cause at any time by Notice of Termination.
For purposes hereof the term "Cause" shall mean:
(a) The conviction of Executive for a felony, or the willful
commission by Executive of a criminal act that in the reasonable judgment of the
Board causes or will likely cause substantial economic damage to the Company or
substantial injury to the business reputation of the Company;
(b) The willful commission by Executive of an act of fraud in
the performance of his duties on behalf of the Company or a Subsidiary; or
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(c) The continuing willful failure of Executive to perform his
duties (other than any such failure resulting from Executive's incapacity due to
physical or mental illness) after written notice thereof (specifying the
particulars thereof in reasonable detail) and a reasonable opportunity to be
heard and cure such failure are given to Executive by the Board.
6.4 GOOD REASON TERMINATION OF EMPLOYMENT BY EXECUTIVE. During the
Term, Executive may terminate his employment hereunder at any time for Good
Reason by providing Notice of Termination to the Company. Good Reason
shall mean:
(a) (i) The assignment by the Board to Executive of duties
without Executive's express written consent, which (x) are materially different
than Executive's duties contemplated by Section 1.1 hereof, or (y) result, in
either a significant reduction in Executive's authority and responsibility as
President and Chief Executive Officer of the Company, or (ii) without
Executive's express written consent, the removal of Executive from, or any
failure to reappoint or reelect Executive to the foregoing positions, except in
connection with the termination of Executive's employment by the Company for
Cause, or by reason of Executive's death, Disability or voluntary termination,
or (iii) except for Executive's termination of employment by the Company for
Cause, or by reason of Executive's death, Disability or voluntary termination,
the failure of Executive to be elected or appointed Chairman of the Board of the
Company;
(b) The Company's requiring Executive to be based anywhere other
than the Company's current principal executive offices (unless such headquarters
is relocated with Executive's consent);
(c) Breach by the Company of its obligations under this Agreement
if such breach is not corrected to the reasonable satisfaction of Executive
within thirty days after the Board is notified by Executive of such breach;
(d) A Change of Control shall occur;
(e) Any termination by the Company of Executive's employment
otherwise than as permitted by this Agreement; or
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(f) Any reduction by the Company of the annual basic salary
payable to Executive.
For purposes of this Agreement the term "Change of Control" shall mean:
(A) any "person" (as such term is used in Sections 13(d) and
14(d) of the Securities Exchange Act of 1934, as amended (the "Act"), other than
a trustee or other fiduciary holding securities under an employee benefit plan
of the Company or a Subsidiary, becomes the "beneficial owner" (as defined in
Rule 13d-3 under the Act), directly or indirectly, of securities of the Company
representing 20% or more of the combined voting power of the Company's then
outstanding securities;
(B) 33-1/3% of the Board of Directors consists of individuals
other than the members of the Board of Directors on the Commencement Date (the
"Incumbent Directors"); provided, however, that any person becoming a director
subsequent to the Commencement Date whose election or nomination for election
was approved by at least two-thirds of the directors who at the time of such
election or nomination comprised the Incumbent Directors shall for purposes of
this definition be considered an Incumbent Director;
(C) the shareholders of the Company approve, or if no shareholder
approval is required or obtained, the Company completes a merger, consolidation
or similar transaction of the Company with or into any other corporation, or a
binding share exchange involving the Company's securities occurs, other than any
such transaction which would result in the voting securities of the Company
outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least a majority of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such transaction; or
(D) the shareholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition by the
Company of all or substantially all the Company's assets.
6.5 NOTICE OF TERMINATION. Any purported termination of
employment by the Company by reason of Executive's Disability or for Cause,
or by Executive for
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Good Reason or voluntary termination shall be communicated by a Notice of
Termination to the other party hereto. For purposes of this Agreement, a "Notice
of Termination" shall mean a written notice given by Executive or a person
authorized by the Board on behalf of the Company, as the case may be, which
shall indicate the specific basis for termination and shall set forth in
reasonable detail the facts and circumstances claimed to provide a basis for
termination of any payments under this Agreement. Executive shall not be
entitled to give a Notice of Termination that Executive is terminating his
employment with the Company for Good Reason based upon a Change of Control more
than two years following the occurrence of the event alleged to constitute a
Change of Control.
6.6 PAYMENTS ON TERMINATION.
(a) Termination Benefits. If Executive is
terminated by the Company other than by reason of Executive's death, Disability
or for Cause, or if the Executive terminates his employment for Good Reason,
then the Company shall pay Executive the aggregate of the following amounts
within thirty (30) days after the termination of Executive's employment:
(i) A. the sum of (1) Basic Salary through
the Date of Termination to the extent not theretofore paid, (2) the product of
(x) the Bonus targeted for Executive for the then current fiscal year of the
Company and (y) a fraction, the numerator of which is the number of days in the
then current fiscal year through the Date of Termination, and the denominator of
which is 365 and (3) any compensation previously deferred by the Executive
(together with any accrued interest or earnings thereon) and any accrued
vacation pay, in each case to the extent not theretofore paid (the sum of the
amounts described in clauses (1), (2) and (3) being hereinafter referred to as
the "Accrued Obligations"); and
B. the amount equal to the product of
three times the Executive's annual compensation (including amounts paid under
the OAIP and amounts earned under the Incentive Plan (whether or not paid))
based on his five year average total compensation amounts (or such lesser period
as Executive may have been employed hereunder).
(ii) for the remainder of the Term, unless Executive becomes
reemployed with another employer and is eligible to receive medical, disability
and other welfare
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benefits under plans of such employer, the Company shall continue benefits to
Executive and/or Executive's eligible family members at least equal to those
which would have been provided to them in accordance with the plans, programs,
practices and policies described in Section 5.1(ii) and (v) as if the
Executive's employment had not been terminated; for purposes of determining
eligibility of Executive for retiree benefits pursuant to such plans, practices,
programs and policies, Executive shall be considered to have remained employed
until the end of the Term and to have retired on the last day of such period;
(such continuation of such benefits for the applicable period herein set forth
being hereinafter referred to as "Welfare Benefit Continuation");
(b) Death Benefits. If Executive's
employment is terminated by reason of Executive's death during the Term, this
Agreement shall terminate without further obligation to Executive's legal
representatives under this Agreement, other than for payment of Accrued
Obligations (which shall be paid to Executive's estate or beneficiary, as
applicable, in a lump sum in cash within 30 days of such death) and the timely
payment or provision of the Welfare Benefit Continuation to Executive's eligible
family members for the remainder of the Term;
(c) Disability Benefits. If Executive's
employment is terminated by reason of the Executive's Disability during the
Term, this Agreement shall terminate without further obligation to Executive,
other than for (i) payment of Accrued Obligations (which shall be paid to
Executive in a lump sum in cash within 30 days of the Date of Termination) and
the timely payment or provision of the Welfare Benefit Continuation to
Executive's eligible family members for the remainder of the Term;
(d) Cause; Other than for Good Reason
Termination. If the Executive's employment shall be terminated for Cause during
the Term, this Agreement shall terminate without further obligation to Executive
other than the obligation to pay to Executive Basic Salary through the Date of
Termination plus the amount of any compensation award by the Company to
Executive previously deferred by Executive, in each case to the extent
theretofore unpaid. If Executive voluntarily terminates his employment during
the Term, excluding a termination for Good Reason, this Agreement shall
terminate on the Date of Termination without further obligations to Executive,
other than for Accrued Obligations, which shall be paid to Executive in a lump
sum in cash within 30 days of the Date of Termination.
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7. SERP PROVISION
The Company has delivered to Executive a full and correct copy of
the SERP and related trust agreement as in effect on the date hereof. The
Executive is hereby designated as a participant under the SERP and,
notwithstanding the provisions of Section 3.1 of the SERP, Executive will be
entitled to 40% of the normal supplemental retirement benefit upon retirement as
an active officer of the Company within three years of his commencement of
employment, 60% of the normal supplemental retirement benefit if such retirement
occurs on or after three years of employment but before completion of five years
and 100% of the normal supplemental retirement benefit if such retirement occurs
on or after five years of employment.
8. MISCELLANEOUS
8.1 SURVIVAL. The provisions of Sections 6, 7 and this Section 8 shall
survive termination of this Agreement and remain enforceable according to their
terms.
8.2 SEVERABILITY. The invalidity or unenforceability of any provision of
this Agreement shall not affect the validity or enforceability of any other
provisions hereof.
8.3 NOTICES. All notices, demands and requests required or permitted to
be given under the provisions of this Agreement shall be deemed duly given if
made in writing and delivered personally or mailed by postage prepaid
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certified or registered mail, return receipt requested, which notices shall be
addressed as follows:
If to the Company:
Witco Corporation
Xxx Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: Chairman of the Organization and
Compensation Committee
with copies to:
Witco Corporation
Xxx Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxxxx 00000-0000
Attention: General Counsel and Corporate
Secretary
If to Executive:
E. Xxxx Xxxx
with copies to:
Xxxxxxx Xxxxxx, Esq.
Jones, Walker, Waechter, Poitevent, Carrere
& Xxxxxxx
Four United Plaza
0000 Xxxxxx Xxxxx Xxxx
Xxxxx Xxxxx, XX 00000
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By notifying the other parties in writing, given as aforesaid, any party
may from time-to-time change its address or the name of any person to whose
attention notice is to be given, or may add another person, to whose attention
notice is to be given, in connection with notice to any party.
8.4 ASSIGNMENT AND SUCCESSORS. Neither this Agreement nor any of his
rights or duties hereunder may be assigned or delegated by Executive. This
Agreement is not assignable by the Company except to any successor in interest
which takes over all or substantially all of the business of the Company, as it
is conducted at the time of such assignment. Any corporation into or with which
the Company is merged or consolidated or which takes over all or substantially
all of the business of the Company shall be deemed to be a successor of the
Company for purposes hereof. This Agreement shall be binding upon and, except as
aforesaid, shall inure to the benefit of the parties and their respective
successors and permitted assigns. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company, by
written agreement in form and substance satisfactory to Executive, to expressly
assume and agree to perform this Agreement and the SERP in the same manner and
to the same extent that the Company would be required perform it if no such
succession had taken place.
8.5 ENTIRE AGREEMENT, WAIVER AND OTHER.
(A) INTEGRATION. This Agreement, Exhibits thereto and benefits
referred to herein contain the entire agreement of the parties hereto on its
subject matter and supersede all previous agreements between the parties hereto,
written or oral, express or implied, covering the subject matter hereof. No
representations, inducements, promises or agreements, oral or otherwise, not
embodied herein, shall be of any force or effect.
(B) NO WAIVER. No waiver or modification of any of the provisions
of this Agreement shall be valid unless in writing and signed by or on behalf of
the party granting such waiver or modification. No waiver by any party of any
breach or default hereunder shall be deemed a waiver of any repetition of such
breach or default or shall be deemed a waiver of any other breach or default,
nor shall it in any way affect any of the other terms or conditions of this
Agreement or the enforceability thereof. No failure of a
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party hereto to exercise any power given such party hereunder or to insist upon
strict compliance with any obligation hereunder, and no custom or practice at
variance with the terms hereof, shall constitute a waiver of the right of a
party hereto to demand strict compliance with the terms hereof.
Executive shall not have the right to sign any waiver or
modification of any provisions of this Agreement on behalf of the Company, nor
shall any action taken by Executive reduce his obligations under this Agreement.
This Agreement may not be supplemented or rescinded except by
instrument in writing signed by all of the parties. Neither this Agreement nor
any of the rights of any of the parties hereunder may be terminated except as
provided herein.
8.6 GOVERNING LAW. This Agreement shall be governed by and construed,
and the rights and obligations of the parties hereto enforced, in accordance
with the laws of the State of Delaware.
8.7 HEADINGS. The Section and Subsection headings contained herein are
for reference purposes only and shall not in any way affect the meaning or
interpretation of this Agreement.
8.8 TERMINATION PRIOR TO START DATE. The Company may not terminate
this Agreement prior to the commencement of
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employment hereunder except in the event of Executive's death prior thereto.
IN WITNESS WHEREOF, the parties have executed this Agreement as
of the date first written above.
WITCO CORPORATION
By: /s/ Xxxxxxx X. Xxxxx
-------------------------------
Xxxxxxx X. Xxxxx
Member of Board of
Directors and Chairman,
Organization and
Compensation Committee
/s/ E. GARY GOOK
-------------------------------
E. XXXX XXXX
