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EXHIBIT 10(a)
FORM OF
GREAT LAKES CHEMICAL CORPORATION
STOCK OPTION AGREEMENT
THIS AGREEMENT, made as of the 1st day of April, 1998 (the "Effective
Date") by and between Great Lakes Chemical Corporation ( the "Company") and Xxxx
Xxxxxxx (the "Executive").
WITNESSETH:
WHEREAS, the Company and the Executive have entered into an employment
agreement dated as of the date hereof (the "Employment Agreement"), pursuant to
which the Executive will serve as the President and Chief Executive Officer of
the Company; and
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company to enter into this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto hereby agree as follows:
1. Grant of Option. The Company hereby grants to the Executive the right
and option (an "Option") to purchase, subject to the vesting provisions of
Section 3, all or any part of an aggregate of 700,000 shares of the Company's
common stock, par value $1.00 per share ("Common Stock") (such number, as
adjusted hereunder, being referred to as the "Option Shares"). The purchase
price per share of the Option shall be equal to the average of the closing
prices of the Common Stock over the five (5) consecutive trading day period
ending on March 17, 1998 (such price, as adjusted hereunder, being referred to
as the "Option Price"). The number of Option Shares and the Option Price shall
be subject to adjustment as provided in Section 10 hereof, including the
adjustment of the Option Price to reflect consummation of the Company's proposed
spinoff of Octel (the "Spinoff"); provided, however, that the number of Option
Shares shall not be subject to adjustment to reflect consummation of the
Spinoff, so that, after giving effect to the Spinoff, the Option shall represent
an option to acquire 700,000 shares of Common Stock of the post-Spinoff Company
at a price equal to the Option Price set forth in the preceding sentence, as
adjusted to reflect consummation of the Spinoff.
2. Term of Option. Subject to earlier termination as provided in Section
4, the Option shall expire and cease to be exercisable on the tenth anniversary
of the Effective Date (the "Termination Date").
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3. Vesting and Exercisability.
(a) Regular Vesting Schedule. An aggregate of 200,000 Option
Shares shall vest and become exercisable on the Effective Date and, except as
otherwise provided herein, the remaining 500,000 Option Shares shall vest
ratably on an annual basis on each of the first four anniversaries of the
Effective Date, provided that the Executive is employed by the Company on each
applicable vesting date, as follows:
Additional Number
of Shares Vesting Date
----------------- -------------
125,000 April 1, 1999
125,000 April 1, 2000
125,000 April 1, 2001
1215,000 Xxxxx 0, 0000
(x) Acceleration of Vesting. Upon (i) the occurrence of a
Change in Control (as defined in the Great Lakes Chemical Corporation 1993
Employee Stock Compensation Plan (the "1993 Plan")), (ii) termination of the
Executive's employment with the Company by reason of the death or Disability of
the Executive, (iii) termination of the Executive's employment by the Company
without Cause or (iv) termination of the Executive's employment by the Executive
for Good Reason, the Option Shares shall become immediately vested and fully
exercisable.
(c) Certain Definitions. For purposes of this Agreement,
"Cause," "Disability" and "Good Reason" shall have the respective meanings
ascribed to such terms under the Employment Agreement.
4. Termination of Employment
(a) Death; Disability; Without Cause; Good Reason. Upon the
termination of the Executive's employment (i) by reason of the death or
Disability of the Executive, (ii) by the Company without Cause, or (iii) by the
Executive for Good Reason, the Option shall remain exercisable until the
earliest of (1) the third anniversary of the Date of Termination (as defined in
the Employment Agreement), (2) the date on which Executive shall have breached
the provisions of Section 8 of the Employment Agreement (other than an isolated,
inadvertent breach), or (3) the Termination Date.
(b) Cause; Other than for Good reason. Upon termination of
the Executive's services by the Company for Cause or by the Executive (other
than for Good Reason), the:
(1) the unvested portion of the Option shall terminate
upon the Date of Termination and no longer be exercisable; and
(2) the vested portion of the Option shall remain
exercisable until the earliest of (x) the expiration of six
(6) months following the Date of
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Termination, (y) the date on which Executive shall have
breached the provisions of Section 8 of the Employment
Agreement (other than an isolated, inadvertent breach), or (z)
the Termination Date.
5. Method of Exercising Option.
(a) Full payment for the Option Shares purchased shall be
made at the time of any exercise under this Agreement. The option price shall
be payable to the Company either (i) in United States dollars in cash or by
check, bank draft, or postal or express money order, or (ii) through the deliver
of shares of Common Stock owned by the Executive for at least six (6 Months
prior to the date of exercise having a Fair Market Value on the date of exercise
equal to the full Option Price, or (iii) by a combination of (i) and (ii) above.
For purposes of this Agreement, "Fair Market Value" shall have the meaning
ascribed to such term under the 1993 Plan. Upon written request by the
Executive, exercise under this Agreement may be done on a cashless basis through
a broker (i.e., the Executive shall be entitled to receive the Fair market Value
of the Option Shares, less the Option Price, without being required to pay the
Option Price). Subject to the terms and conditions hereof, the Option shall be
exercisable by notice to the Company on the form provided by the Company upon
request of the Executive. In the event the Options are being exercised by any
person or persons other than the Executive, the notice shall be accompanied by
proof, satisfactory to the Company, of the right of such person or persons to
exercise any right under this Agreement.
(b) At the time of exercise, the Executive shall pay to the
Company such amount as the Company reasonably deems necessary to satisfy its
obligation to withhold Federal, state or local income or other taxes incurred by
reason of such exercise or the transfer of Option Shares thereupon, by tendering
to the Company a check in the amount of such withholding or by electing to have
withheld upon exercise shares of Common Stock having a Fair Market Value equal
to the amount of such tax withholding.
6. Issuance of Shares. As promptly as practical after receipt of such
written notification of exercise and full payment of the option price and any
required tax withholding, the Company shall issue or transfer to the Executive
the number of Option shares with respect to which such Option has been exercised
(less shares withheld in satisfaction of tax withholding obligations, if any),
and shall deliver to the Executive a certificate or certificates therefor,
registered in the Executive's name. The Company may postpone such delivery
until it receives satisfactory proof that the issuance or transfer of such
Option Shares will not violate any of the provisions of the Securities Act of
1933, as amended (the "Securities Act"), or the Securities Exchange Act of 1934,
as amended, any rules or regulations of the Securities and Exchange commission
promulgated thereunder, or the requires of applicable state law relating to
authorization, issuance or sale of securities, or until there has been
compliance with the provisions of such acts or rules.
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7. Company; Executive.
(a) The term "Company" as used in this Agreement with
reference to employment shall include the Company and its subsidiaries, as
appropriate.
(b) Whenever the word "Executive" is used in any provision of
this Agreement under circumstances where the provision should logically be
construed to apply to the beneficiaries, the executors, the administrators, or
the person or persons to whom the Option may be transferred by will or by the
laws of descent and distribution, the word "Executive" shall be deemed to
include such person or persons.
8. Non-Transferability. The Option is not transferable by the Executive
otherwise than to a designated beneficiary upon death or by will or the laws of
descent and distribution, and is exercisable during the Executive's lifetime
only by the Executive. No assignment or transfer of all or any part of the
Option, or of the rights represented thereby, whether voluntary or involuntary,
by operation of law or otherwise (except to a designated beneficiary, upon
death, by will or the laws of descent and distribution), shall vest in the
assignee or transferee any interest or right herein whatsoever.
9. Rights as Shareholder. Neither the Executive nor any transferee of the
Option shall have any of the rights of a shareholder with respect to any Option
Shares except to the extent that certificate(s) for such Option Shares shall
have been issued upon the exercise of the Option as provided herein, and no
adjustment shall be made for cash distributions in respect of such Option Shares
for which the record date is prior to the date upon which such Executive or
transferee shall become the holder of record thereof.
10. Adjustments. Except as otherwise provided herein, in the event of any
change in the outstanding shares of Common Stock by reason of any stock dividend
or split, recapitalization, merger, consolidation, spinoff, combination or
exchange of shares or other corporate change, or any distributions to common
shareholders other than regular cash dividends, the Company shall make such
substitution or adjustment, if any, as it reasonably deems to be equitable, as
to the number or kind of shares of Common Stock subject to, or the Option Price
of, the Option under this Agreement.
11. Compliance with Law. Notwithstanding any of the provisions hereof, the
Executive hereby agrees that such Executive shall not exercise the Options, and
that the Company shall not be obligated to issue or transfer any shares to the
Executive hereunder, if the exercise hereof or the issuance or transfer of such
shares shall constitute a violation by the Executive or the Company of any
provisions of any law or regulation of any governmental authority. Any
reasonable determination in this connection by the Company shall be final,
binding and conclusive.
12. Acquisition for Purpose of Investment. The Executive hereby represents
and warrants that any Option Shares acquired pursuant to the exercise of the
Option are acquired for his own account solely for the purpose of investment and
not with a view to, or
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for sale in connection with, any distribution thereof in violation of the
Securities Act. The Executive hereby acknowledges that the Option Shares have
not been registered under the Securities Act and may be sold or disposed of in
the absence of such registration only pursuant to an exemption from the
registration requirements of the Securities Act. The Company agrees to cause
the Option Shares to be registered, as specified in the Employment Agreement.
13. Employment Agreement Restrictions
(a) The Executive acknowledges that the sale, transfer and
other disposition of any Option Shares acquired pursuant to the exercise of the
Option are subject to restrictions pursuant to the Employment Agreement. The
Executive agrees to the placement on certificates representing any such Option
Shares of a legend (the "Legend"), substantially as set forth below:
"THE SALE, TRANSFER AND OTHER DISPOSITION OF THE
SECURITIES REPRESENTED BY THIS CERTIFICATE ARE
SUBJECT TO THE TERMS AND CONDITIONS OF THE
EMPLOYMENT AGREEMENT DATED AS OF APRIL 1, 1998,
BETWEEN GREAT LAKES CHEMICAL CORPORATION AND
XXXX XXXXXXX."
(b) The Legend shall be removed from any certificates
representing Option Shares acquired pursuant to the exercise of the Option at
such time as the sale, transfer or other disposition of such Option Shares are
no longer subject to the restrictions set forth in the Employment Agreement.
14. Notices. For purposes of this Agreement, all communications provided
for in this Agreement shall be in writing and shall be deemed to be duly given
when delivered or (unless otherwise specified) mailed by United States certified
or registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
Xxxx Xxxxxxx
00000 Xxxxxxxxxx Xxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
If to the Company:
Great Lakes Chemical Corporation
One Great Xxxxx Xxxxxxxxx
X.X. Xxx 0000
Xxxx Xxxxxxxxx, Xxxxxxx 00000-0000
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Attention: General Counsel
or to such other address as any party may have furnished to the other in writing
in accordance herewith.
15. Binding Effect. Subject to Section 8 hereof, this Agreement shall be
binding upon the heirs, executors, administrators and successors of the parties
hereto.
16. No Right to Employment. Neither the granting of this Option, nor the
exercised thereof, shall be construed as granting Executive any right to
continued employment by the Company or its subsidiaries. Subject to the terms
of the Employment Agreement, the right of the Company and its subsidiaries to
terminate Executive's employment at nay time and for any reason, is specifically
reserved.
17. Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Delaware without regard to its rules
relating to conflicts of laws.
18. Entire Agreement. This Agreement and the relevant provisions of the
Employment Agreement comprise the entire agreement between the parties hereto
with respect to the subject matter hereof, and may not be modified or terminated
orally.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
GREAT LAKES CHEMICAL CORPORATION
By: ___________________________________
Name: Xxxxxx X. Xxxx
Title: Chairman of the Board
___________________________________
Xxxx Xxxxxxx
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FORM OF
GREAT LAKES CHEMICAL CORPORATION
RESTRICTED STOCK AGREEMENT
THIS AGREEMENT, made as of the (Spin-off Date), by and between Great Lakes
Chemical Corporation (the "Company") and Xxxx Xxxxxxx (the "Executive").
W I T N E S E T H:
WHEREAS, the Company and the Executive have entered into an Employment
Agreement dated as of April 1, 1998 (the "Employment Agreement"), pursuant to
which the Executive will serve as President and Chief Executive Officer of the
Company; and
WHEREAS, the Board of Directors of the Company (the "Board") has determined
that it is in the best interests of the Company to enter into this Agreement.
NOW, THEREFORE, in consideration of the covenants and agreements herein
contained, the parties hereto hereby agree as follows:
1. Grant of Restricted Shares. The Company hereby grants to the Executive
an aggregate of 50,000 shares (the "Restricted Shares") of the Company's Common
Stock, par value $1.00 per share ("Common Stock"), subject to the terms and
conditions set forth in this Agreement. At such time as any portion of the
Restricted Shares cease to be subject to forfeiture pursuant to Paragraph 4(b),
such shares shall cease to constitute Restricted Shares hereunder.
2. Issuance of Stock. As of the date hereof, the Company will cause to be
issued in the name of the Executive a stock certificate or certificates
representing the Restricted Shares (less any shares withheld in satisfaction of
tax liabilities associated with the immediate vesting of certain Restricted
Shares, as set forth below). Such shares shall be issued as Restricted Shares
and will be held in the custody of the Company or its designee for the account
of the Executive, pending delivery to the Executive as set forth in Paragraph 5
below.
3. Dividends and Voting. After issuance in the name of the Executive of
Restricted Shares and so long as the Restricted Shares are outstanding, the
Executive shall have the right to vote and receive dividends with respect to
such shares, provided that any dividends paid with respect to such shares during
the period such shares remain subject to forfeiture pursuant to Paragraph 4(b)
shall be held in the custody of the Company or its
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designee for the account of the Executive and shall be subject to the same
restrictions as apply to the Restricted Shares. Without limiting the foregoing,
(a) in the event of a forfeiture of Restricted Shares, such dividends shall be
subject to the same restrictions as apply to the Restricted Shares. Without
limiting the foregoing, (a) in the event of a forfeiture of Restricted Shares,
such dividends shall be forfeited in the same proportion as such shares and (b)
when the Executive or his estate becomes entitled to a stock certificate
pursuant to Paragraph 5, the Executive or his estate shall be entitled to
receive all retained dividends less any dividends that may have been forfeited.
4. Restrictions.
(a) Nontransferability. While the Restricted shares remain
subject to forfeiture pursuant to Paragraph 4(b), neither the Restricted Shares
nor the right to vote or receive dividends thereon may be sold, transferred,
assigned, pledged or otherwise encumbered or disposed of by the Executive, or
subject to any debts or liabilities of the Executive; provided, however, that
Restricted Shares owned for at least six months may be transferred for the
purpose of exercising all or any portion of stock option awards granted to the
Executive, in which case a number of shares of Common Stock received upon
exercise of the Option equal to the number of Restricted Shares so transferred
shall thereafter be treated as Restricted Shares hereunder. Following such time
as any of the Restricted Shares cease to be subject to forfeiture pursuant to
Paragraph 4(b), the sale, transfer and other disposition of such shares shall
remain subject to the restrictions set forth in the Employment Agreement.
(b) Forfeiture; Lapse of Restrictions. Except as otherwise
provided in this Agreement, the Restricted Shares issued hereunder shall be
immediately forfeited and returned to the Company and all rights of the
Executive thereto shall terminate without further obligation a on the part of
the Company if the Executive's employment with the Company terminates.
Notwithstanding the foregoing, (1) forfeiture restrictions with respect to fifty
percent (50%) of the Restricted Shares (i.e., 25,000 shares) shall lapse as of
the date hereof and, provided the Executive is then in employment with the
Company, forfeiture restrictions with respect to twenty-five percent (25%) of
the Restricted Shares (i.e., 12,500 shares) shall lapse on each of the first and
second anniversaries of the Effective Date (as defined in the Employment
Agreement); (2) in the event that a, prior to the otherwise applicable vesting
date, (w) the Executive's employment with the Company terminates due to death or
Disability (as defined in the Employment Agreement), (x) the Executive's
employment is terminated by the Company other than for Cause (as defined in the
Employment Agreement, (y) the Executive's employment is terminated by the
Executive for Good Reason (as defined in the Employment Agreement), or (z) a
Change in Control (as defined in the Great Lakes Chemical Corporation 1993
Employee Stock Compensation Plan (the "1993 Plan")), shall occur while the
Executive is then in employment with the Company, the restrictions set forth in
this Paragraph 4 shall lapse and the Restricted Shares shall no longer be
subject to forfeiture.
5. Delivery of Certificates. At such time as any of the Restricted Shares
cease to be subject to the forfeiture restrictions set forth in Paragraph 4(b),
a stock certificate representing such number of shares of Common Stock (less any
shares withheld
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in satisfaction of tax withholding obligations, as set forth below), free of the
restrictions contained herein (other than those referred to in the last sentence
of Paragraph 4(a), if then applicable, and those imposed by law), will be issued
to the Executive or his estate as soon as practicable thereafter. In the event
the restrictions referred to in the last sentence of Paragraph 4(a) are then
applicable, the Executive agrees to the placement on certificates representing
any such shares of Common Stock of a legend (the "Legend") substantially as set
forth below:
"THE SALE, TRANSFER AND OTHER DISPOSITION
OF THE SECURITIES REPRESENTED BY THIS CER-
TIFICATE ARE SUBJECT TO THE TERMS AND
CONDITIONS OF THE EMPLOYMENT AGREEMENT
DATED AS OF APRIL 1, 1998, BETWEEN GREAT
LAKES CHEMICAL CORPORATION AND XXXX
XXXXXXX."
In the event such shares of Common Stock have not yet been registered under the
Securities Act of 1993, as amended (the "Securities Act"), as specified in the
Employment Agreement, the Executive also agrees to the inclusion on the Legend
of the following:
"THE SECURITIES REPRESENTED BY THIS CERTIFI-
CATE HAVE NOT BEEN REGISTERED UNDER THE
U.S. SECURITIES ACT OF 1933, AS AMENDED (THE
"SECURITIES ACT"), AND MAY NOT BE OFFERED,
SOLD, TRANSFERRED OR OTHERWISE DISPOSED
OF EXCEPT PURSUANT TO AN EFFECTIVE REGIS-
TRATION STATEMENT OR PURSUANT TO AN EX-
EMPTION FROM, OR IN A TRANSACTION NOT
SUBJECT TO, THE REGISTRATION REQUIRE-
MENTS OF THE SECURITIES ACT."
The Company shall take all actions necessary to remove the applicable
portions of the Legend at the time as such restrictions set forth in the
Employment Agreement cease to apply to such shares of Common Stock or such
shares are registered under the Securities Act, as the case may be. The Company
may postpone any such delivery until it receives satisfactory proof that the
issuance or transfer of such shares of Common Stock will not violate any of the
provisions of the Securities Act or the Securities Exchange of 1934, as amended,
any rules or regulations of the Securities and Exchange Commission promulgated
thereunder, or the requirements of applicable state law relating to
authorization, issuance or sale of securities, or until there has been
compliance with the provisions of such acts or rules.
6. Payment of Taxes. At the time Restricted Shares cease to be subject to
the forfeiture restrictions set forth in Paragraph 4(b) (or, if applicable, upon
the making of an election by the Executive under Section 83(b) of the Internal
Revenue Code of 1986, as amended), the Executive shall pay to the Company such
amount as the Company deems necessary to satisfy its obligation to withhold
Federal, state or local income or other taxes
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incurred by reason of such Restricted Shares ceasing to be subject to such
forfeiture restrictions (or by reason of such election) by tendering to the
Company a check in the amount of such withholding or by electing to have
withheld from the shares of Common Stock otherwise to be delivered to the
Executive (or with respect to which the Executive has made such election) shares
of Common Stock having a Fair Market Value (as defined in the 1993 Plan) equal
to the amount of such tax withholding.
7. Company; Executive. (a) The term "Company" as used in this Agreement
with reference to employment shall include the Company and its subsidiaries, as
appropriate.
(b) Whenever the word "Executive" is used in any provision of this
Agreement under circumstances where the provision should logically be construed
to apply to the beneficiaries, the executors, the administrators, or the person
or persons to whom the Restricted Shares may be transferred by will or by the
laws of descent and distribution, the word "Executive" shall be deemed to
include such person or persons.
8. Purchase for Purpose of Investment. The Executive hereby represents and
warrants that any Restricted Shares awarded hereunder are acquired for his own
account solely for the purpose of investment and not with a view to, or for sale
in connection with, any distribution thereof in violation of the Securities Act.
The Executive hereby acknowledges that the Restricted Shares have not been
registered under the Securities Act and may be sold or disposed of in the
absence of such registration only pursuant to an exemption from the registration
requirements of the Securities Act. The Company agrees to cause the Restricted
Shares to be registered, as specified in the Employment Agreement.
9. Notices. For purposes of this Agreement, all communications provided
for in this Agreement shall be in writing and shall be deemed to be duly given
when delivered or (unless otherwise specified) mailed by United States certified
or registered mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
Xxxx Xxxxxxx
[Address]
If, to the Company:
Great Lakes Chemical Corporation
[Address]
or to such other address as any party may have furnished to the other in writing
in accordance herewith.
10. Neither the granting of the Restricted Shares nor the vesting thereof
shall be construed as granting Executive any right to continued employment by
the Company.
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Subject to the terms of the Employment Agreement, the right of the Company to
terminate Executive's employment at any time and for any reason, is specifically
reserved.
11. Governing Law. This Agreement shall be construed and interpreted in
accordance with the laws of the State of Delaware, without regard to its rules
relating to conflicts of laws.
12. Entire Agreement. This Agreement and the relevant provisions of the
Employment Agreement comprise the entire agreement between the parties hereto
with respect to the subject matter hereof, and may not be modified or terminated
orally.
IN WITNESS WHEREOF, the parties hereto have executive this Agreement as of
the day and year first above written.
GREAT LAKES CHEMICAL CORPORATION
By: ______________________________________
__________________________________________
Xxxx Xxxxxxx
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