EXHIBIT 10.62
EMPLOYMENT AGREEMENT
This Employment Agreement ("Agreement") is dated as of
January 29, 1998 between Xxxxxx X. Xxxxxx, Xx. (the "Executive") and
IMC Global Inc., a Delaware corporation (the "Company").
WHEREAS, the Company desires to employ the Executive as its
President and Chief Executive Officer and the Executive desires to
accept such employment, for the term and upon the other conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the agreements and
covenants contained herein, the sufficiency of which is acknowledged,
the Executive and the Company hereby agree as follows:
ARTICLE I
Employment
Section 1.01. Position; Term; Responsibilities. The Company
shall employ the Executive as its President and Chief Executive Officer
and, if elected, as a member of the Company's Board of Directors (the
"Board" or the "Board of Directors") . The Executive also agrees to
serve as Chairman of the Board, if so elected. The Executive's
employment hereunder shall commence on July 1, 1997 and end on October
31, 2000, unless employment is terminated earlier pursuant to Article
III (the "Employment Period"). Subject to the powers, authorities and
responsibilities vested in the Board under the General Corporation Law
of the State of Delaware, in duly constituted committees of the Board,
and in the Chairman of the Board, the Executive shall have
responsibility and authority for the overall strategic policies,
management and leadership of the Company. The Executive shall also
perform other executive and administrative duties (consistent with the
position of President and Chief Executive Officer) as the Executive may
reasonably be expected to perform on behalf of the Company, as may from
time to time be authorized or directed by the Board or its duly
authorized designee. The Executive agrees to be employed by the
Company in all such capacities for the Employment Period, subject to
all the covenants and conditions hereinafter set forth.
Section l.02. Duties. During the Employment Period, the
Executive shall perform faithfully the duties assigned to him hereunder
to the best of his abilities and devote his full and undivided business
time and attention to the transaction of the Company's business and not
engage in any other business activities except with the prior written
approval of the Board or its duly authorized designee.
ARTICLE II
Compensation
Section 2.01. Base Salary. As compensation for his services
hereunder, during employment the Company shall pay the Executive at the
rate of $650,000 per year, payable in installments in accordance with
the Company's normal payment schedule for senior management of the
Company. The Executive's salary may be increased from time to time by
the Board or its duly authorized designee in its sole discretion. The
Executive's annual salary in effect from time to time under this
Section 2.01 is hereinafter called his "Base Salary."
Section 2.02. Annual Bonus. During employment, the Company
shall provide the Executive the opportunity to earn an annual bonus,
pursuant to the Company's Management Incentive Compensation Program
(the "MICP") or successor bonus plan as in effect from time to time, at
the highest level in effect from time to time, as determined by the
Board or the Board's designee. Nothing in this Section 2.02 shall be
construed as limiting the Company's right to revise, amend or terminate
the MICP or other annual bonus plan in effect.
Section 2.03. Long-Term Incentives. During employment, the
Company shall provide the Executive the opportunity to earn long-term
incentive awards under the Company's 1996 Long-Term Incentive Plan (the
"LTIP") and 1988 Stock Option and Award Plan, as amended (the "Stock
Option Plan), or successor long-term incentive plan or plans as in
effect from time to time, at a level determined by the Board or the
Board's designee. Nothing in this Section 2.03 shall be construed as
limiting the Company's right to revise, amend or terminate any of the
Company's LTIP, Stock Option Plan or other long-term incentive plans,
including the amount of the target incentive.
Section 2.04. Retirement Benefits. Subject to Section 2.09,
the Company shall provide the Executive with participation in the
Company's Retirement Plan for Salaried Employees, Investment Plan for
Salaried Employees and Supplemental Executive Retirement Plan or
successor qualified and nonqualified retirement plans in effect from
time to time and provided by the Company to senior executive officers,
subject to the participation and eligibility requirements of such
plans. For purposes of determining benefits under any nonqualified
retirement plan in which the Executive participates, the Executive's
service shall include the period of his employment with The Vigoro
Corporation.
Section 2.05. Restricted Stock Award. The Company will
provide the Executive with an award of restricted stock of the Company.
The number of shares of restricted stock awarded to the Executive and
the terms of such award shall be governed by the Executive's restricted
stock award agreement and the Company's 1988 Stock Option and Award
Plan, as amended from time to time.
Section 2.06. Other Employee Benefits. Subject to Section
2.09, during employment, the Executive shall be entitled to participate
in all employee benefit plans, including, without limitation, group
health care and insurance, to take time off for vacation or illness,
and to receive all other fringe benefits as are from time to time made
available generally to the senior management of the Company. The
Executive's participation shall be in accordance with the terms and
conditions of the various plans, programs and policies, and as they are
modified from time to time.
Section 2.07. Perquisites. During employment, the Company
also shall pay or reimburse the Executive for (i) his reasonable
expenses up to a maximum of $7,500 per calendar year in connection with
financial, tax, and estate planning advice and (ii) the cost of his
annual medical examination. Subject to Section 2.09, the Company shall
provide to the Executive all perquisites to which other senior
executive officers of the Company generally are entitled to receive and
other perquisites as the Board or the Board's designee deems
appropriate.
Section 2.08. Expense Reimbursements. The Company shall
reimburse the Executive for all proper expenses incurred by him in the
performance of his duties hereunder in accordance with the policies and
procedures established by the Board.
Section 2.09. Right to Change Plans. By reason of Sections
2.04 through 2.08, the Company shall not be obligated to institute,
maintain, or refrain from changing, amending or discontinuing any
benefit plan, program, policy or any perquisite, so long as such
changes are similarly applicable to other senior executive officers of
the Company.
ARTICLE III
Termination of Employment
Section 3.01. Termination. The Executive's employment may
be terminated as follows. Regardless of the reason for the termination
of employment or by whom initiated, the Executive remains obligated
under the provisions of Article IV of this Agreement. Upon
termination, the Executive or his estate shall receive payment for any
accrued but unpaid Base Salary under Section 2.01, vacation or bonus
and any unreimbursed expenses under Section 2.08. He shall also
receive benefits under those plans described in Sections 2.03, 2.04 and
2.05 as determined in accordance with the terms of the applicable plan
and any applicable award agreement. Unless otherwise stated in this
Agreement or in any applicable benefit plans, the Executive shall have
no right to salary or benefits after employment is terminated and the
Company shall have no further obligations to the Executive.
(a) Death: The Executive's employment will terminate upon
the Executive's death.
(b) Inability to Perform: The Company may terminate the Executive's
employment upon the Executive's incapacity or inability to perform his
essential duties and responsibilities, with or without reasonable
accommodation, for 90 consecutive days or periods aggregating 90 days
in any 12-month period because of an impairment of the Executive's
physical or mental health. Upon termination, the Executive shall
continue to receive his Base Salary from the date of termination until
the earlier of: the end of the Employment Period, the
Executive's eligibility for retirement benefits under any Company
plans, or the Executive's death. Such payments shall be made in
accordance with the Company's regular payroll procedures and shall be
reduced by any amounts received by the Executive pursuant to any
insurance policy, plan or other employee benefit provided to the
Executive by the Company.
(c) For Cause: The Company may terminate the Executive's
employment immediately if, in the Company's reasonable determination,
the Executive (i) "grossly neglects" his duties; (ii) engages in
"misconduct"; (iii) breaches a material provision of this Agreement
including but not limited to Article IV. "Gross neglect" means the
failure to perform the essential functions of the Executive's job or
the failure to carry out the Company's reasonable directions with
respect to material duties after the Executive is notified by the
Company that the Executive is failing to perform these essential
functions or failing to carry out the reasonable directions of the
Company. "Misconduct" means: embezzlement or misappropriation of
corporate funds, or other acts of fraud, dishonesty, or self-dealing;
willful refusal to perform, or substantial disregard of, assigned
duties; any significant violation of any statutory or common law duty
of loyalty to the Company or indictment for a felony.
(d) By the Company: The Company may terminate the
Executive's employment without cause or reason by giving the Executive
written notice, which shall set forth the date of termination. During
any notice period, the Executive shall cooperate fully with the Company
in achieving a smooth transition of the Executive's duties and
responsibilities to such person(s) as may be designated by the Company.
Upon termination and execution of a general release of all claims
against the Company and other related entities or persons, and upon the
expiration of any applicable revocation period the Executive shall be
entitled to receive the following "Severance Benefits":
1. Base Salary for the balance of the Employment Period,
payable in accordance with regular payroll procedures of the
Company;
2. An annual bonus for the balance of the Employment Period
equal to the highest annual bonus earned under the MICP, or
successor bonus plan in effect from time to time, during the three
consecutive complete bonus years immediately preceding the date on
which the Executive's employment is terminated ("Base Bonus").
3. The Executive shall continue his participation and
receive benefits under those employee benefit plans and
arrangements described in Section 2.06 for the balance of the
Employment Period or until the Executive becomes eligible to
participate in and receive similar benefits under a plan or other
arrangement sponsored by another employer or under any Company
sponsored retirement plan. Participation shall be on the same
terms and conditions as are applicable to active or retired
employees, as is applicable.
Severance Benefits shall be subject to all applicable federal, state
and local deductions and withholdings. At the option of the Company,
the present value of the Severance Benefits or balance thereof due to
the Executive under paragraphs 3.01(d)(1) or (2), determined pursuant
to section 280G(d)(4) of the Internal Revenue Code, may be paid in a
lump sum. The Company's obligation to continue to employ the Executive
or to continue Severance Benefits shall cease immediately if: (i) the
Executive has not satisfied his obligations to cooperate fully with a
smooth transition or (ii) the Company has grounds to terminate the
Executive's employment immediately as specified above in Sections
3.01(a), (b), or (c).
Section 3.03. Termination for Good Reason. If the Executive
reasonably believes he has "Good Reason," as defined herein, to
terminate employment, he must give the Board written notice which sets
forth in reasonable detail the facts and circumstances claimed to
provide a basis for such termination and a reasonable opportunity to
cure, which shall be at a minimum forty-five (45) days. If the Board
fails to cure the Good Reason within a reasonable time, the Executive
may terminate employment by giving the Board thirty (30) days written
notice of his intention to terminate this Agreement. "Good Reason"
means, the permanent assignment of the Executive without his consent to
duties inconsistent with the Executive's authorities, duties,
responsibilities, and status as an officer of the Company; provided,
however, that an assignment of duties due to the Executive's
incapacity, temporary or otherwise, as determined by the Board or its
duly authorized designee, shall not trigger the Executive's right to
terminate for Good Reason. Upon termination and execution of a general
release of all claims against the Company and other related entities
and persons, and upon the expiration of any applicable revocation
period, the Executive shall receive the Severance Benefits provided in
Section 3.01(d) herein, subject to the terms, conditions and
limitations stated therein.
ARTICLE IV
Confidential Information
The Executive acknowledges that during his prior employment
with The Vigoro Corporation, with the Company to date, and during his
employment under this Agreement, he has developed and/or acquired and
will develop and/or acquire confidential information belonging to the
Company. Accordingly, the Executive agrees to undertake the following
obligations that he acknowledges to be reasonably designed to protect
the Company's legitimate business interests without unnecessarily or
unreasonably restricting the Executive's post-employment opportunities.
Section 4.01. Confidential Information/Proprietary Rights.
(a) The Executive acknowledges that the Company or any of its
subsidiaries or affiliates over which he shall have exercised, directly
or indirectly, any supervisory management, fiscal or operating control
(the "Managed Companies") has exclusive ownership of all information
useful in its business (including its dealings with suppliers,
customers and other third parties, whether or not a true "trade
secret"), which at the time or times concerned is not generally known
to persons outside of the Managed Companies engaged in businesses
similar to those conducted by such entities, and which has been or is
from time to time disclosed to, discovered by, or otherwise known by
the Executive as a consequence of his employment by the Company
(including information conceived, discovered or developed by the
Executive during his employment) (collectively, "Confidential
Information"). Confidential Information includes, but is not limited
to the following especially sensitive types of information:
(i) The identity, purchase and payment patterns of, and
special relations with, customers;
(ii) The identity, net prices and credit terms of , and
special relations with, the suppliers;
(iii) Inventory selection and management techniques;
(iv) Product development and marketing plans; and
(v) Finances except to the extent publicly disclosed.
(b) The term "Proprietary Materials" shall mean all business
records, documents, drawings, writings, software, programs and other
tangible things which were or are created or received by or for the
Company and other members of the Managed Companies in furtherance of
its business, including, but not limited to, those which contain
Confidential Information. For example, Proprietary Materials include,
but are not limited to, the following especially sensitive types of
materials: applications software, and printouts generated from such
data bases; market studies and strategic plans; customer, supplier and
employee lists; contracts and correspondence with customers and
suppliers; documents evidencing transactions with customers and
suppliers, sales calls reports, appointment books, calendars, expense
statements and the like, reflecting conversations with any company,
customer or supplier; architectural and engineering plans; and
purchasing, sales and policy manuals. Proprietary Materials also
include, but are not limited to, any such things which are created by
the Executive or with assistance and all notes, memoranda and the like
prepared using the Proprietary Materials and/or Confidential
Information.
(c) While some of the information contained in Proprietary
Materials may have been known to the Executive prior to employment with
The Vigoro Corporation or the Company, or may now or in the future be
in the public domain, the Executive acknowledges that the compilation
of that information contained in the Proprietary Materials has or will
cost the Managed Companies a great effort and expense, and affords
persons to whom Proprietary Materials are disclosed, including the
Executive, a competitive advantage over persons who do not know the
information or have the compilation of the Proprietary Materials. The
Executive further acknowledges that Confidential Information and
Proprietary Materials include commercially valuable trade secrets and
automatically become the Company's exclusive property when they are
conceived, created or received.
Section 4.02. Return of Company Property. When the
Executive shall cease to be employed by the Company, the Executive
shall surrender to the Company all Company property, including without
limitation, all Confidential Information, Proprietary Materials and all
records and other documents obtained by him or entrusted to him during
the course of his employment with the Company; provided, however, that
the Executive may retain copies of such documents as necessary for the
Executive's personal records for federal income tax purposes.
Section 4.03. Confidentiality Duties. The Executive shall,
except as may be required by law, while an employee of the Company and
thereafter for the longest time permitted by applicable law:
(a) Preserve the confidentiality of Confidential Information
and Proprietary Materials and comply with all instructions of the
Company (whether oral or written) for preserving the confidentiality of
Confidential Information and Proprietary Materials.
(b) Use Confidential Information and Proprietary Materials
only at places designated by the Company or the Employer, in
furtherance of businesses of the Managed Companies.
(c) Exercise appropriate care to advise other employees of
the Company (and, as appropriate, contractors or others) of the
sensitive nature of Confidential Information and Proprietary Materials
prior to their disclosure, and to disclose the same only on a need-to-
know basis.
(d) Not copy all or any part of Proprietary Materials, except
as the Company directs.
(e) Not sell, give, loan or otherwise transfer any copy of
all or any part of Proprietary Materials to any person who is not an
employee of or otherwise engaged to provide services to the Company or
the Managed Companies.
(f) Not publish, lecture on or otherwise disclose to any
person who is not an employee of the Company, except as the Company
directs, all or any part of Confidential Information or Proprietary
Materials.
(g) Not use all or any part of any Confidential Information
or Proprietary Materials for the benefit of any third party without the
Company's written consent.
Section 4.04. Remedies. The following provisions shall
apply to the covenants of the Executive contained in Article IV:
(a) without limiting the right of the Company to pursue all other
legal and equitable remedies available for violation by the Executive
of the covenants contained in Article IV, it is expressly agreed by the
Executive and the Company that such other remedies cannot fully
compensate the Company for any such violation and that the Company
shall be entitled to injunctive relief, without the necessity
of proving actual monetary loss, to prevent any such violation or any
continuing violation thereof;
(b) each party intends and agrees that if in any action
before any court or agency legally empowered to enforce the covenants
contained in Article IV, any term, restriction, covenant or promise
contained therein is found to be unreasonable and accordingly
unenforceable, then such term, restriction, covenant or promise shall
be deemed modified to the extent necessary to make it enforceable by
such court or agency; and
(c) the covenants contained in Article IV shall survive the
conclusion of the Executive's employment by the Company.
ARTICLE V
Change in Control
Section 5.01. Effective Date. For purposes of this Article
V, the term "Effective Date" shall mean the date on which a Change in
Control of the Company (as defined in Section 5.09) occurs. This
Article V shall not become effective, and the Company shall have no
obligation hereunder, if the employment of the Executive with the
Company shall terminate prior to a Change in Control of the Company.
If there is a Change in Control and this Article becomes effective,
then this Article shall govern the terms and conditions of the
Executive's employment and termination thereof and the provisions of
Articles I, II, III and IV of this Agreement shall no longer be
effective.
Section 5.02. Right to Change in Control Severance Benefits.
The Executive shall be entitled to receive from the Company Change in
Control Severance Benefits as described in Section 5.07 herein, if
during the term of this Agreement there has been a Change in Control of
the Company and there is a Termination (as defined in Section 5.06)
prior to the expiration of the Employment Term (as defined in Section
5.03).
Section 5.03. Employment Term. For purposes of this Article
V, the term "Employment Term" shall mean the period commencing on the
Effective Date and ending on the earlier to occur of (a) the last day
of the month in which occurs the third anniversary of the Effective
Date or (b) the last day of the month in which the Executive attains
mandatory retirement age pursuant to the terms of a mandatory
retirement plan of the Company as such were in effect and applicable to
the Executive immediately prior to the Effective Date.
Section 5.04. Employment. The Company hereby agrees to
continue the Executive in its employ, and the Executive hereby agrees
to remain in the employ of the Company, until the expiration of the
Employment Term. During the Employment Term, the Executive shall
exercise such position and authority and perform such responsibilities
as are commensurate with the position and authority being exercised and
duties being performed by the Executive immediately prior to the
Effective Date of this Article V, which services shall be performed at
the location where the Executive was employed immediately prior to the
Effective Date of this Article V or at such other location as the
Company may reasonably require; provided, that the Executive shall not
be required to accept another location that he deems unreasonable in
the light of his personal circumstances.
Section 5.05. Compensation and Benefits. During the
Employment Term, the Executive shall receive the following compensation
and benefits:
(a) He shall receive an annual base salary which is not less
than his Base Salary immediately prior to the Effective Date of this
Article V, with the opportunity for increases, from time to time
thereafter, which are in accordance with the Company's regular
executive compensation practices.
(b) He shall be eligible to participate on a reasonable
basis, and to continue his existing participation, in annual incentive,
stock option, restricted stock, long-term incentive performance and any
other compensation plan which provides opportunities to receive
compensation in addition to his Base Salary which is the greater of (i)
the opportunities provided by the Company for executives with
comparable duties or (ii) the opportunities under any such plans in
which he was participating immediately prior to the Effective Date of
this Article V.
(c) He shall be entitled to receive and participate in
salaried employee benefits (including, but not limited to, medical,
life and accident insurance, investment, stock ownership and disability
benefits) and perquisites which are the greater of (i) the employee
benefits and perquisites provided by the Company to executives with
comparable duties or (ii) the employee benefits and perquisites to
which he was entitled or in which he participated immediately prior to
the Effective Date of this Article V.
(d) He shall be entitled to continue to accrue credited
service for retirement benefits and to be entitled to receive
retirement benefits under and pursuant to the terms of the Company's
qualified retirement plan for salaried employees, the Company's
supplemental executive retirement plan, and any successor or other
retirement plan or agreement in effect on the Effective Date of this
Article V in respect of his retirement, whether or not a qualified plan
or agreement, so that his aggregate monthly retirement benefit from all
such plans and agreements (regardless when he begins to receive such
benefit) will be not less than it would be had all such plans and
agreements in effect immediately prior to the Effective Date of this
Article V continued to be in effect without change until and after he
begins to receive such benefit.
Section 5.06. Termination. The term "Termination" shall
mean termination, prior to the expiration of the Employment Term, of
the employment of the Executive with the Company for any reason other
than death, disability (as described below), cause (as described
below), or voluntary resignation (as described below).
(a) The term "disability" means physical or mental
incapacity qualifying the Executive for long-term disability under the
Company's long-term disability plan.
(b) The term "cause" means (i) the willful and continued
failure of the Executive substantially to perform his duties with the
Company (other than any failure due to physical or mental incapacity)
after a demand for substantial performance is delivered to him by the
Board of Directors which specifically identifies the manner in which
the Board believes he has not substantially performed his duties or
(ii) willful misconduct materially and demonstrably injurious to the
Company. No act or failure to act by the Executive shall be considered
"willful" unless done or omitted to be done by him not in good faith
and without reasonable belief that his action or omission was in the
best interest of the Company. The unwillingness of the Executive to
accept any or all of a change in the nature or scope of his position,
authorities or duties, a reduction in his total compensation or
benefits, a relocation that he deems unreasonable in light of his
personal circumstances, or other action by or request of the Company in
respect of his position, authority or responsibility that he reasonably
deems to be contrary to this Agreement, may not be considered by the
Board of Directors to be a failure to perform or misconduct by the
Executive. Notwithstanding the foregoing, the Executive shall not be
deemed to have been terminated for cause for purposes of this Article V
unless and until there shall have been delivered to him a copy of a
resolution, duly adopted by a vote of three-quarters of the entire
Board of Directors of the Company at a meeting of the Board called and
held (after reasonable notice to the Executive and an opportunity for
the Executive and his counsel to be heard before the Board) for the
purpose of considering whether the Executive has been guilty of such a
willful failure to perform or such willful misconduct as justifies
termination for cause hereunder, finding that in the good faith option
of the Board the Executive has been guilty thereof and specifying the
particulars thereof.
(c) The resignation of the Executive shall be deemed
"voluntary" if it is for any reason other than one or more of the
following:
(i) The Executive's resignation or retirement (other than
mandatory retirement, as aforesaid) is requested by the Company
other than for cause;
(ii) Any other significant change in the nature or scope of
the Executive's position, authorities or duties from those
described in Sections 1.01 and 1.02 of this Agreement;
(iii) Any other reduction in his total compensation or
benefits from that provided in Section 5.04;
(iv) The breach by the Company of any other provision of this
Article V; or
(v) The reasonable determination by the Executive that, as a
result of a Change in Control of the Company and a change in
circumstances in his position, he is unable to exercise the
authorities and responsibility attached to his position and
contemplated by Sections 1.01 and 1.02 of this Agreement.
(d) Termination that entitles the Executive to the payments
and benefits provided in Section 5.07 shall not be deemed or treated by
the Company as the termination of the Executive's employment or the
forfeiture of his participation, award or eligibility for the purpose
of any plan, practice or agreement of the Company referred to in
Section 5.05.
Section 5.07. Change in Control Severance Benefits. In the
event of and within 30 days following Termination, the Company shall
pay to the Executive the following benefits (collectively, "Change in
Control Severance Benefits"):
(a) His Base Salary and all other benefits due him as if he
had remained an employee pursuant to this Article V through the
remainder of the month in which Termination occurs, less applicable
withholding taxes and other authorized payroll deductions;
(b) The amount equal to the target award for the Executive
under the Company's annual bonus plan for the fiscal year in which
Termination occurs, reduced pro rata for that portion of the fiscal
year not completed as of the end of the month in which Termination
occurs; provided, that if the Executive has deferred his award for such
year under the plan, the payment due the Executive under this Paragraph
(b) shall be paid in accordance with the terms of the deferral; and
(c) A lump sum severance allowance in an amount which is equal to the
sum of the amounts determined in accordance with the following
subparagraphs (i) and (ii):
(i) an amount equivalent to three times the Executive's Base
Salary at the rate in effect immediately prior to Termination; and
(ii) an amount equivalent to three times the average of the
annual incentive compensation received or deferred by the
Executive for the three fiscal years immediately prior to the
fiscal year in which Termination occurs.
Section 5.08. Non-Competition and Confidentiality. The
Executive agrees that:
(a) There shall be no obligation on the part of the Company to provide
any further Change in Control Severance Benefits (other than payments
or benefits already earned or accrued) described in Section 5.07 if,
when and so long as the Executive shall be employed by or otherwise
engage in any business which is competitive with any business of the
Company or of any of its subsidiaries, as such business existed as of
the Effective Date of this Article V, in which the Executive was
engaged during his
employment, and if such employment or activity is likely to
cause serious damage to the Company or any of its
subsidiaries; and
(b) during and after the Employment Term, he will not
divulge or appropriate to his own use or the use of others any secret
or confidential information pertaining to the businesses of the Company
or any of its subsidiaries obtained during his employment by the
Company, it being understood that this obligation shall not apply when
and to the extent any of such information becomes publicly known or
available other than because of his act or omission.
Section 5.09. Definition of "Change in Control". "Change in
Control" of the Company means, and shall be deemed to have occurred
upon, the first to occur of any of the following events:
(a) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), of beneficial ownership within the meaning of
Rule 13d-3 promulgated under the Exchange Act, of 15% or more of either
(i) the then outstanding shares of common stock of the Company (the
"Outstanding Common Stock") or (ii) the combined voting power of the
then outstanding securities of the Company entitled to vote generally
in the election of directors (the "Outstanding Voting Securities");
excluding, however, the following: (A) any acquisition directly from
the Company (excluding any acquisition resulting from the exercise of
an exercise, conversion or exchange privilege unless the security being
so exercised, converted or exchanged was acquired directly from the
Company), (B) any acquisition by the Company, (c) any acquisition by an
employee benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or (D) any
acquisition by any corporation pursuant to a transaction which complies
with clauses (i), (ii) and (iii) of subsection (c) of this Section
5.09;
(b) individuals who, as of the effective date of this
Article V, constitute the Board of Directors (the "Incumbent Board")
cease for any reason to constitute at least a majority of such Board;
provided, that any individual who becomes a director of the Company
subsequent to the effective date of this Article V, whose election, or
nomination for election by the Company's stockholders, was approved by
the vote of at least a majority of the directors then comprising the
Incumbent Board shall be deemed a member of the Incumbent Board; and
provided further, that any individual who was initially elected as a
director of the Company as a result of an actual or threatened election
contest, as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act, or any other actual or threatened
solicitation of proxies or consents by or on behalf of any Person other
than the Board shall not be deemed a member of the Incumbent Board;
(c) approval by the stockholders of the Company of a
reorganization, merger or consolidation of the Company or sale or other
disposition of all or substantially all of the assets of the Company (a
"Corporate Transaction"); excluding, however, a Corporate Transaction
pursuant to which (i) all or substantially all of the individuals or
entities who are the beneficial owners, respectively, of the
Outstanding Common Stock and the Outstanding Voting Securities
immediately prior to such Corporate Transaction will beneficially own,
directly or indirectly, more than 60% of, respectively, the outstanding
shares of common stock, and the combined voting power of the
outstanding securities of such corporation entitled to vote generally
in the election of directors, as the case may be, of the corporation
resulting from such Corporate Transaction (including, without
limitation, a corporation which as a result of such transaction owns
the Company or all or substantially all of the Company's assets either
directly or indirectly) in substantially the same proportions relative
to each other as their ownership, immediately prior to such Corporate
Transaction, of the Outstanding Common Stock and the Outstanding Voting
Securities, as the case may be, (ii) no Person (other than: the
Company; any employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the Company;
the corporation resulting from such Corporate Transaction; and any
Person which beneficially owned, immediately prior to such Corporate
Transaction, directly or indirectly, 25% or more of the Outstanding
Common Stock or the Outstanding Voting Securities, as the case may be)
will beneficially own, directly or indirectly, 25% or more of,
respectively, the outstanding shares of common stock of the corporation
resulting from such Corporate Transaction or the combined voting power
of the outstanding securities of such corporation entitled to vote
generally in the election of directors and (iii) individuals who were
members of the Incumbent Board will constitute at least a majority of
the members of the board of directors of the corporation resulting from
such Corporate Transaction; or
(d) the consummation of a plan of complete liquidation or
dissolution of the Company.
Section 5.10. Excise Tax Payments. If any of the payments
to be made under Article V or any payments which are construed as being
made under Article V, will be subject to the tax (the "Excise Tax")
imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code") (or any similar tax that may hereafter be
imposed), the Company shall pay to the Executive at the time specified
in Paragraph (c) below an additional amount (the "Gross-up Payment")
such that the net amount retained by the Executive, after deduction of
any Excise Tax on the Total Payments (as hereinafter defined) and any
federal, state and local income tax and Excise Tax upon the Gross-up
Payment provided for by this paragraph, but before deduction for any
federal, state or local income tax on the Change in Control Severance
Payments, shall be equal to the Total Payments.
(a) For purposes of determining whether any of the Change in
Control Severance Payments will be subject to the Excise Tax and the
amount of such Excise Tax, (i) any other payments or benefits received
or to be received by the Executive in connection with a Change in
Control (as that term is defined in Section 5.09) of the Company or the
Executive's termination of employment (whether pursuant to the terms of
this Agreement or any other plan, arrangement or agreement with the
Company, any person whose actions result in a Change of Control of the
Company or any person affiliated with the Company or such person)
(which, together with the Change in Control Severance Payments, shall
constitute the "Total Payments") shall be treated as "parachute
payments" within the meaning of Section 280G(b)(2) of the Code, and all
"excess parachute payments" within the meaning of Section 280G(b)(1) of
the Code shall be treated as subject to the Excise Tax, unless in the
opinion of tax counsel selected by the Company's independent auditors
such other payments or benefits (in whole or in part) do not constitute
parachute payments, or such excess parachute payments (in whole or in
part) represent reasonable compensation for services actually rendered
within the meaning of Section 280G(b)(4) of the Code in excess of the
base amount within the meaning of Section 280G(b)(3) of the Code or are
otherwise not subject to the Excise Tax, (ii) the amount of the Total
Payments which shall be treated as subject to the Excise Tax shall be
equal to the lesser of (A) the total amount of the Total Payments or
(B) the amount of excess parachute payments within the meaning of
Section 280G(b)(1) of the Code (after applying clause (i) above), and
(iii) the value of any non-cash benefits or any deferred payment or
benefit shall be determined by the Company's independent auditors in
accordance with the principles of Sections 280G(d)(3) and (4) of the
Code.
(b) For purposes of determining the amount of the Gross-up
Payment, the Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation for the calendar
year in which the Gross-up Payment is to be made and the applicable
state and local income taxes at the highest marginal rate of taxation
for the calendar year in which the Gross-up 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. In the event
that the Excise Tax is subsequently determined to be less than the
amount taken into account hereunder at the time the Gross-up Payment is
made, the Executive shall repay to the Company at the time that the
amount of such reduction in Excise Tax is finally determined the
portion of the Gross-up Payment attributable to such reduction (plus
the portion of the Gross-up Payment attributable to the Excise Tax and
federal and state and local income tax imposed on the portion of the
Gross-up Payment being repaid by the Executive if such repayment
results in a reduction in Excise Tax and/or a federal and state and
local income tax deduction), plus interest on the amount of such
repayment at the rate provided in Section 1274(b)(2)(B) of the Code.
In the event that the Excise Tax is determined to exceed the amount
taken into account hereunder at the time the Gross-up Payment is made
(including by reason of any payment, the existence or amount of which
cannot be determined at the time of the Gross-up Payment), the Company
shall make an additional Gross-up Payment in respect of such excess
(plus any interest payable with respect of such excess) at the time
that the amount of such excess is finally determined.
(c) The Gross-up Payment or portion thereof provided for in
Paragraphs (a) and (b) above shall be paid not later than the thirtieth
day following payment of any amounts under this Article V; provided,
however, that if the amount of such Gross-up Payment or portion thereof
cannot be finally determined on or before such day, the Company shall
pay to the Executive on such day an estimate, as determined in good
faith by the Company, of the minimum amount of such payments and shall
pay the remainder of such payments (together with interest at the rate
provided in Section 1274(b)(2)(B) of the Code) as soon as the amount
thereof can be determined, but in no event later than the forty-fifth
day after payment of any amounts under this Article V.
(d) In the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such
excess shall constitute a loan by the Company to the Executive, payable
on the fifth day after demand by the Company (together with interest at
the rate provided in Section 1274(b)(2)(B) of the Code).
(e) All Gross-up Payments will be paid to the Executive from
the Trust Agreement between IMC Global Inc. and Wachovia Bank Trust
Company, N.A., which has been established to protect payment
obligations of the Company under this Agreement. Any repayment due the
Company from the Executive as a result of the circumstances described
in the last sentence of the preceding paragraph shall be made by the
Executive after the Executive has received such excess amounts from
the Trust.
ARTICLE VI
Miscellaneous
Section 6.01. Dispute Resolution: The Executive and the
Company shall not initiate legal proceedings relating in any way to
this Agreement or to the Executive's employment or termination from
employment with the Company until thirty days after the party against
whom the claim is made ("respondent") receives written notice from the
claiming party of the specific nature of any purported claims and the
amount of any purported damages attributable to each such claim. The
Executive and the Company further agree that if respondent submits the
claiming party's claim to the CPR Institute for Dispute Resolution or
JAMS/Endispute for nonbinding mediation prior to the expiration of such
thirty day period, the claiming party may not institute arbitration or
other legal proceedings against respondent until the earlier of: (a)
the completion of good-faith mediation efforts or (b) 90 days after the
date on which the respondent received written notice of the claimant's
claim(s); provided, however, that nothing in this Section shall
prohibit the Company from pursuing injunctive or other equitable relief
against the Executive prior to, contemporaneous with, or subsequent to
invoking or participating in these dispute resolution processes. The
Company shall pay the cost of the mediator.
Section 6.02. Notices. All notices, requests or other
communications provided for in this Agreement shall be made, if to the
Company, to the Senior Vice President, Human Resources, and if to the
Executive, to Xxxxxx X. Xxxxxx, Xx. All notices, requests or other
communications provided for in this Agreement shall be made in writing
either (a) by personal delivery to the party entitled thereto, (b) by
facsimile with confirmation of receipt, (c) by mailing in the United
States mails or (d) by express courier service. The notice, request,
or other communication shall be deemed to be received upon personal
delivery, upon confirmation of receipt of facsimile transmission, or
upon receipt by the party entitled thereto if by United States mail or
express courier service; provided, however, that if a notice, request,
or other communication is not received during regular business hours,
it shall be deemed to be received on the next succeeding business day
of the Company.
Section 6.03. Authority; No Conflict. The Executive
represents and warrants to the Company that he has full right and
authority to execute and deliver this Agreement and to comply with the
terms and provisions hereof and that the execution and delivery of this
Agreement and compliance with the terms and provisions hereof by the
Executive will not conflict with or result in a breach of the terms,
conditions or provisions of any agreement, restriction or obligation by
which the Executive is bound.
Section 6.04. Assignment and Succession. This Agreement
shall be binding upon and shall operate for the benefit of the parties
hereto and their respective legal representatives, legatees,
distributees, heirs, successors and assigns. The rights and
obligations of the Company under this Agreement may be assigned to and
shall inure to the benefit of and be binding upon its successors and
assigns. The Executive acknowledges that the services he renders
pursuant to this Agreement are unique and personal. Accordingly, the
Executive may not delegate or assign any of his duties hereunder.
Section 6.05. Headings. The Article, Section, paragraph and
subparagraph headings are for convenience of reference only and shall
not define or limit the provisions hereof.
Section 6.06. Applicable Law. This Agreement shall at all
times be governed by and construed, interpreted and enforced in
accordance with the internal laws (as opposed to conflict of laws
provisions) of the State of Illinois.
Section 6.07. Termination of Prior Agreements. As of the
effective date of this Agreement, the Non-Competition Agreement, dated
February 29, 1996, and the Employment Agreement, dated April 1, 1996,
and the related tax-gross-up agreement, dated April 16, 1996, all
between the parties hereto, shall be terminated and of no further force
or effect, and each party thereto agrees that it or he shall have no
further rights thereunder, including, without limitation, any claims
for breach of contract. The Executive's participation in and right to
collect payments or benefits under the Vigoro Corporation Severance
Plan, dated November 13, 1995 also shall terminate on the effective
date of this Agreement.
Section 6.08. Entire Agreement, Amendment, Waiver. This
Agreement constitutes the entire agreement between the Company and the
Executive with respect to the subject matter hereof. This Agreement
supersedes any prior agreement made between the parties. The parties
may not amend this Agreement except by written instrument signed by
both parties. No waiver by either party at any time of any breach by
the other of any provision of this Agreement shall be deemed a waiver
of similar or dissimilar provision at the same time or any prior of
subsequent time.
Section 6.09. Severability. The provisions of this
Agreement shall be regarded as durable, and if any provision or portion
thereof is declared invalid or unenforceable by a court of competent
jurisdiction, the validity and enforceability of the remainder and
applicability thereof shall not be affected.
IN WITNESS WHEREOF, the Company has caused this Agreement to
be signed by its duly authorized officer and the Executive has signed
this Agreement as of the day and year first above written.
IMC GLOBAL INC.
By: ________________________________
____________________________________
Xxxxxx X. Xxxxxx, Xx.
Title: ________________________________
