Exhibit 10.28
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made and entered into on this 7th day of January,
2004, BETWEEN:
(1) Crompton Corporation, a Delaware corporation with offices located at
000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxx 00000 (the "Company"); and,
(2) Xxxxxx X. Xxxx, residing at _____________________ ("the Employee").
THE COMPANY AND THE EMPLOYEE HEREBY AGREE, in consideration of the mutual
obligations and covenants set forth below, to the following terms and conditions
(all of which are subject to and not effective until ratification by the
Company's Board of Directors):
1. Employment
The Company shall employ the Employee as its President and Chief Executive
Officer, effective January 12, 2004, subject to approval by its Board of
Directors and subject to the terms and conditions specified in this Employment
Agreement ("the Employment"). In addition, Company shall nominate Employee as a
member of its Board of Directors effective January 12, 2004, subject to approval
by its Board of Directors and subject to the terms and conditions specified in
this Employment Agreement ("the Employment").
2. Place Of Employment
The Employment shall be based in Company's headquarters offices, currently
located at 000 Xxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxxxx 00000.
3. Duties
3.1 The Employee shall devote all of his time, attention, and best
efforts to the Company's business. The Employee shall faithfully and
diligently perform the duties and responsibilities assigned to him
by the Company. The Employee shall use his best efforts, judgment,
and energy to improve and advance the business and interests of the
Company in a manner consistent with the duties of the Employee's
position.
3.2 The Employee agrees to comply with all federal, state, and local
laws applicable to his Employment. The Employee also agrees to
comply with all of the Company's rules, regulations, and policies in
force during the Employment.
4. Exclusivity of Service
While employed by the Company, the Employee shall devote his entire working
time, attention, and energies to the Company's business.
5. Compensation and Benefits
5.1 The Company shall pay the Employee a base gross salary ("Salary") of
seven-hundred and eighty
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thousand dollars ($780,000) per year, payable in equal gross monthly
installments of sixty-five thousand dollars ($65,000). The Company
may make deductions or withholdings as required by applicable laws
and policies, or as may be or has been consented to by the Employee.
The Company shall review and, in its sole discretion, adjust
Employee's Salary on an annual basis, provided that the Salary shall
not be reduced below the initial level set forth in this Employment
Agreement.
5.2 The Employee shall also be entitled to earn an annual incentive
bonus of up to 160% of base salary, with a target of 100% of Salary.
The performance goals required to earn the annual incentive bonus
shall be approved by the Board of Directors and communicated to the
Employee, and shall be consistent with the Company's existing
policies for similarly-situated key executives.
5.3 The Employee shall also be granted stock options to acquire five
hundred thousand (500,000) shares of the Company's common stock on
January 19, 2004 (in lieu of any grants in October of 2004 which
would pertain to 2005), fifty percent of which will vest and become
exercisable on January 19, 2005 and the remaining fifty percent will
vest and become exercisable on January 19, 2006. The foregoing stock
options shall otherwise have the normal terms and conditions
applicable to the stock options granted to other key executives of
the Company under the Company's 1998 Long Term Incentive Plan in its
present or subsequently amended form.
5.4 The Employee shall also be granted a total of two hundred thousand
(200,000) shares of restricted stock on January 19, 2004, one-third
of which will vest each successive year following the grant until
said shares are fully vested (subject to Board of Directors approval
and Employee still being employed by the Company). Any and all
dividends will accrue to the benefit of the Employee, and Employee
shall be solely responsible for all taxes related to the stock
grants or exercises thereof under Sections 5.3 and 5.4 of this
Agreement. The foregoing restricted stock grant shall otherwise have
the normal terms and conditions applicable to the restricted stock
granted to other key executives of the Company under the Company's
1998 Long Term Incentive Plan in its present or subsequently amended
form.
5.5 The Company shall also provide Employee with reimbursement for
reasonable temporary living expenses in Connecticut during and up to
the conclusion of the first six months of this Employment Agreement,
provided that in no event shall Company's obligation in this regard
exceed six months of temporary living expenses. The provision of
this reimbursement, as well as the types of expenses which shall
qualify, shall at all times be governed by Company's policies
regarding temporary living or as the Board of Directors may
determine.
5.6 The Employee shall also be eligible to participate in any vacation,
life, disability or other similar insurance plans, medical and
dental plans or other employee welfare benefit plans that may be
provided by the Company for its key executives, in accordance with
the provisions of any such plans.
5.7 The Company shall, in accordance with and to the extent of its
policies, pay ordinary and necessary business expenses incurred by
the Employee in performing his duties as a key executive, as well as
reasonable membership fees and reasonable business use charges at a
minimum of one (1) club of the Employee's choosing (and a maximum
number and type as otherwise determined by the Company's Board of
Directors). The Employee shall account promptly for all such
business expenses in the manner prescribed by the Company and shall
submit, on request, all records necessary to confirm that the
Employee's business use of any club is more than fifty percent (50%)
of the Employee's total use of such club.
5.8 During the Term (as defined herein below in Section 10.1 of this
Agreement), the Employee shall
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be entitled to use of an automobile of his choice, the gross value
of which is not to exceed sixty-thousand dollars ($60,000), which
shall be leased by the Company.
5.9 The Employee shall be entitled to certain financial assistance
(brokerage fees, etc.) in connection with the sale of his current
residence outside of Connecticut, consistent with the terms of
Company's relocation policies. By way of clarification, Employee
understands that Company shall have no obligation to purchase
Employee's current home or loan Employee money to purchase a new
home.
5.10 The Company intends to take such actions as may be reasonably
practicable so that its ability to take federal income tax
deductions with respect to the exercise of the options provided for
above is not limited by the application of Section 162(m) of the
Internal Revenue Code of 1986, as amended. However, Employee
acknowledges that it may not be feasible for the Company to preserve
full deductibility, and he therefore agrees to cooperate with the
Company in arranging to defer, under a mutually agreeable plan of
deferred compensation, receipt of shares of the Company's common
stock otherwise deliverable in connection with his exercise of such
options if and to the extent necessary to preserve such
deductibility.
5.11 Employee agrees to buy the Company's common stock with his own funds
from the Company at a timing and in an amount determined by the
Company's Board of Directors consistent with the Company's policies
and practices in such regard for similarly-situated key executives.
Employee also agrees to hold such stock for a minimum period of time
as established by the Company's Board of Directors consistent with
the Company's policies and practices in such regard for
similarly-situated key executives.
6. Reasonableness of Restrictions
The Employee acknowledges that, during the term of Employment, the Company will
provide the Employee with the use of and access to trade secrets and
confidential information. In turn, the Employee recognizes that, while
performing his duties hereunder he will have access to and come into contact
with trade secrets and confidential information belonging to the Company and
will obtain personal knowledge of and influence over its customers and/or
employees. The Employee therefore agrees that the restrictions contained in
Sections 7, 8, and 9 are reasonable and necessary to protect the legitimate
business interests of the Company both during and after the termination of the
Employment.
7. Confidentiality
7.1 The Employee shall neither during the Employment (except in the
proper performance of his duties) nor at any time (without limit)
after the termination thereof, howsoever arising, directly or
indirectly:
7.1.1 use for his own purposes or those of any other person,
company, business entity, or other organization
whatsoever, or,
7.1.2 disclose to any person, company, business entity, or
other organization whatsoever,
any trade secrets or confidential information relating or belonging
to the Company, including but not limited to any such information
relating to clients or customers, client or customer lists or
requirements, market information, business plans or dealings,
financial information and plans, trading models, market access
information, research activities, any document marked Confidential,
or any information which the Employee has been told is Confidential
or which he might reasonably expect the Company would regard as
Confidential, or any information which has been given the Company in
confidence by customers, suppliers, or other persons. Even if a
document has not been marked "Confidential," the Employee shall
treat the document and its contents as confidential information if
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the Employee has been told or otherwise knows or reasonably should
know the document and its contents are confidential.
7.2 The Employee shall not at any time during the continuance of the
Employment with the Company make any notes or memoranda relating to
any matter within the scope of the Company's business, dealings, or
affairs otherwise than for the benefit of the Company.
7.3 In the event of a breach or a threatened breach by the Employee of
the provisions of this Section, the Company shall be entitled to an
injunction restraining the Employee from disclosing, in whole or in
part, such information or from rendering any services to any person,
firm, corporation, association, or other entity to whom such
information has been disclosed or is threatened to be disclosed.
Nothing herein shall be construed as prohibiting the Company from
pursuing any other remedies available to the Company for such breach
or threatened breach, including the recovery of damages from the
Employee.
8. Trade Secrets
8.1 During the term of this Employment Agreement, the Employee
acknowledges that he will be afforded access to and become familiar
with various trade secrets of the Company, including, but not
necessarily be limited to the following: the Company's business
plans, financial information, marketing strategies, customer or
client lists, software and research and proprietary technology
information. The Employee acknowledges that these trade secrets are
owned and shall continue to be owned solely by the Company and that
they contain specialized and confidential information not generally
known in the industry and which constitute the Company's trade
secrets. The Employee recognizes and acknowledges that it is
essential to the Company to protect this trade secret information.
8.2 The Employee further represents to the Company that, as an
inducement for his employment, the Employee will hold this
information in trust and confidence for the Company's sole benefit
and use during the Employment and after the Employment terminates,
the Employee agrees not to use this information for any purpose
whatsoever or to divulge this information to any person other than
the Company or persons to whom the Company has given without express
written authorization.
9. Post-Termination Obligations
9.1 Non-Competition. The Employee hereby agrees that, during his
employment by the Company pursuant to this Employment Agreement and
for a period of one (1) year following the termination for any
reason of his employment under this Employment Agreement, he will
not, directly or indirectly and in any way, whether as principal or
as director, officer, employee, consultant, agent, partner or
stockholder to another entity (other than by the ownership of a
passive investment interest of not more than 2.5% in a company with
publicly traded equity securities):
9.1.1 own, manage, operate, control, be employed by,
participate in, or be connected in any manner with the
ownership, management, operation, or control of any
business competing with any business of the Company in
the one (1) year immediately preceding such termination;
9.1.2 contact, interfere with, solicit on behalf of another,
or attempt to entice away from the Company (or any
affiliate or subsidiary of the Company):
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(i) any client or customer of the Company (or any
affiliate or subsidiary of the Company); or,
(ii) any contract, agreement or arrangement that the
Company (or any affiliate or subsidiary of the
Company) is actively negotiating with any other
party; or,
(iii) any prospective business opportunity that the
Company (or any affiliate or subsidiary of the
Company) has identified.
9.2 Non-Solicitation of Employees. The Employee hereby agrees that he
will not for a period of one (1) year immediately following the
termination of his employment, howsoever arising, either on his own
account or in conjunction with or on behalf of any other person,
company, business entity, or other organization whatsoever directly
or indirectly:
9.2.1 induce, solicit, entice or procure any person who is an
employee of the Company to leave such employment, where
that person is:
9.2.2 a Company Employee on the Termination date; or,
9.2.3 had been a Company Employee in any part of the one (1)
year immediately preceding the Termination Date;
9.2.4 accept into employment or otherwise engage or use the
services of any person who:
9.2.5 is a Company Employee on the Termination Date; or,
9.2.6 had been a Company Employee in any part of the one (1)
year immediately preceding the Termination Date.
9.3 Because of the Employee's knowledge of the Company's business, in
the event of the Employee's actual or threatened breach of the
provisions of this Section, the Company shall be entitled to, and
the Employee hereby consents to, an injunction restraining the
Employee from any of the foregoing. However, nothing herein shall be
construed as prohibiting the Company from pursuing any other
available remedies for such breach or threatened breach, including
the recovery of damages from the Employee. The Employee agrees that
the provisions of this Section are necessary and reasonable to
protect the Company in the conduct of its business. If any
restriction contained in this Section shall be deemed to be invalid
or unenforceable by reason of extent, duration, or geographic scope,
then the extent, duration, and geographic scope of such restriction
shall be deemed to be reduced to the fullest extent, duration, and
geographic scope permitted by law and enforceable.
9.4 The Employee agrees that in the event of receiving from any person,
company, business entity, or other organization an offer or
employment either during the continuance of this Employment
Agreement or during the continuance in force of any of the
restrictions set out herein, he will forthwith provide to such
person, company, business entity, or other organization making such
offer of employment a full and accurate copy of this Employment
Agreement signed by the parties hereto.
10. Term and Termination
10.1 The Company and the Employee agree that, unless sooner terminated
pursuant to Sections 10.6 or 10.7 of this Agreement, the term of the
Employee's employment under this Agreement, provided this Agreement
is ratified by the Company's Board of Directors, shall be for a
period commencing on January 12, 2004 through the end of January 11,
2007 (the "Term"). This Term shall
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automatically renew for successive one-year periods, unless either
party hereto provides the other with written notice to not renew at
least sixty (60) days prior to the expiration of the then-current
Term, in which case this Agreement shall expire of its own accord at
the end of the then-current Term.
10.2 On termination or expiration of this Agreement, the Employee shall
return to the Company in accordance with its instructions all of the
Company's proprietary technology and trading models, records,
software, models, reports, and other documents and any copies
thereof and any other property belonging to the Company which are in
the Employee's possession or under his control. The Employee shall,
if so required by the Company, confirm in writing his compliance
with his obligations under this Clause.
10.3 Any termination or expiration of the employment shall be without
prejudice to any right the Company may have in respect of any breach
by the Employee of any provisions of this Agreement which may have
occurred prior to such termination.
10.4 In the event of termination or expiration of this Agreement however
arising, the Employee agrees that he will not at any time after such
termination or expiration represent himself as still having any
connection with the Company, except as a former employee for the
purpose of communicating with prospective employers or complying
with any applicable statutory requirements.
10.5 Upon termination or expiration of this Agreement however arising,
the Employee shall continue to be bound by the provisions of
Sections 7, 8, and 9 of this Agreement. In all cases, the treatment
of the stock options and restricted stock upon termination of
employment shall be governed by the Company's 1998 Long Term
Incentive Plan in its present or subsequently amended form.
10.6 Termination For Cause: Notwithstanding any provisions in this
Agreement, the Company may immediately terminate this Agreement for
Cause upon the occurrence of any of the following: (a) Employee's
death; (b) Employee's disability, such that he is unable to
substantially and continually perform his employment duties for a
period of 60 (sixty) days or more; (c) Employee's conviction for a
felony; (d) Employee's breach of this Agreement or his duties of
employment; (e) Employee's violation of Company's policies which
would normally and customarily result in termination of employment;
(f) Employee's actual engagement in an act of moral turpitude or an
act that substantially impairs the reputation of the Company or
which could create criminal or civil liability for the Company; or
(g) Employee's engagement in any act of fraud or dishonesty.
In the event that this Agreement is terminated for either of the
reasons stated in Section 10.6(a) or (b) above, then Company's sole
obligations under this Agreement shall consist of the following: (1)
payment of Employee's Salary through the date of termination; (2)
payout of all accrued but unused paid time off; and (3) provision to
Employee of his insurance continuation rights pursuant to COBRA.
Regarding annual incentive bonus, Employee shall be deemed to have
earned a pro rata portion of said bonus at the target rate.
In the event that this Agreement is terminated for any of the
reasons stated in Section 10.6(c), (d), (e), (f), or (g), then
Company's sole obligations under this Agreement shall consist of the
following: (1) payment of Employee's Salary through the date of
termination; (2) payout of all accrued but unused paid time off; and
(3) provision to Employee of his insurance continuation rights
pursuant to COBRA. Regarding annual incentive bonus, Employee shall
be deemed to have not earned any portion of said bonus.
10.7 Termination Without Cause or Resignation For Good Reason:
Notwithstanding any provisions in this Agreement, the Company may
immediately terminate this Agreement Without Cause at anytime, in
which case the Company's sole obligations under this Agreement shall
consist of the following: (1)
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payment over course of normal pay periods to Employee of Salary for
the lesser of a period of two (2) years following the date of
termination or through the end of the then-current Term; (2) payment
to Employee over course of normal timing his annual incentive bonus
with Employee being deemed to have met his target for the lesser of
a period of two years following the date of termination or through
the end of the then-current Term; and (3) continuation at Company
cost of the benefits provided to Employee pursuant to Sections 5.6
and 5.8 of this Agreement for a period of two (2) years following
the date of termination or through the end of the then-current Term.
The Employee may resign his employment upon the occurrence of the
following, in which case the Company's sole obligations under this
Agreement shall be the same as if the Company terminated this
Agreement Without Cause: Company's continued and material breach of
this Agreement, which breach is not cured within thirty (30) days of
Company's receipt from Employee of written notice of breach stating
the specific bases and dates of breach. As a condition precedent to
Employee's receipt of the payments and continued benefits described
in this Section 10.7, Employee will execute a general release of all
claims against Company and Employee will continue to abide by and
comply with the terms of Sections 7, 8 and 9 of this Agreement.
10.8 Expiration of Agreement: In the event that either party hereto
provides notice of non-renewal pursuant to the terms of Section 10.1
above of this Agreement, then the Company's sole obligations shall
be to pay out and perform its obligations pursuant to the terms of
this Agreement only through the expiration date, and the Company
shall not have any other continuing obligations to Employee
thereafter. In said event, Employee shall be obligated to perform
through the date of expiration, and Employee shall be further
obligated to abide by and comply with all of his obligations
thereafter as set forth in Sections 7, 8 and 9 of this Agreement.
11. Severability
The various provisions and sub-provisions of this Employment Agreement are
severable, and if any provision or sub-provision or identifiable part thereof is
held to be invalid or unenforceable by any court of competent jurisdiction, then
such invalidity or unenforceability shall not affect the validity of
enforceability of the remaining provisions or sub-provisions or identifiable
parts in this Employment Agreement.
12. Warranty
The Employee represents and warrants that he is not prevented by any other
Employment Agreement, arrangement, contract, understanding, Court Order or
otherwise, which in any way directly or indirectly conflicts, is inconsistent
with, or restricts or prohibits him from fully performing the duties of the
Employment, in accordance with the terms and conditions of this Employment
Agreement.
13. Notices
Any notice to be given hereunder may be delivered (a) in the case of the Company
by certified mail addressed to its Registered Office and (b) in the case of the
Employee, either to him personally or by certified mail to his last known
residence address. Notices served by mail shall be deemed given when they are
mailed.
14. Waivers and Amendments
No act, delay, omission, or course of dealing on the part of any party hereto in
exercising any right, power, or remedy hereunder shall operate as, or be
construed as, a waiver thereof or otherwise prejudice such party's rights,
powers, and remedies under this Employment Agreement. This Employment Agreement
may be amended only by a written instrument signed by the Employee and a duly
authorized officer of the Company.
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15. Prior Agreements
This Employment Agreement cancels and is in substitution for all previous
letters of engagement, offer letters, agreements, and arrangements (whether oral
or in writing) relating to the subject-matter hereof between the Company and the
Employee, all of which shall be deemed to have been terminated by mutual
consent. This Employment Agreement constitutes the entire terms and conditions
of the Employee's employment and no waiver, amendment or modification thereof
shall be valid unless in writing, signed by the parties, and only to the extent
therein set forth.
16. Arbitration Jurisdiction and Governing Law
Except for disputes arising under or in connection with Sections 7, 8, and 9 of
this Agreement, all disputes arising under or in connection with this Employment
Agreement or concerning in any way the Employee's employment or cessation
thereof shall be submitted exclusively to arbitration in Middlebury, Connecticut
under the Commercial Arbitration Rules of the American Arbitration Association
then in effect, and the decision of the arbitrator shall be final and binding
upon the parties. Judgment upon the award rendered may be entered and enforced
in any court having jurisdiction. The Employee consents to personal jurisdiction
of any state or federal court sitting in Connecticut, in order to enforce any
arbitration judgment or the rights of the Company under Sections 7, 8, and 9 and
waive any objection that such forum is inconvenient. The Employee hereby
consents to service of process in any such action by U.S. mail or other
commercially reasonable means of receipted delivery. This Employment Agreement
shall be governed by and construed in accordance with the laws of the State of
Connecticut. The parties hereby waive their rights to a trial by a jury of their
peers.
17. Assignability
The rights and obligations contained herein shall be binding on and inure to the
benefit of the successors and assigns of the Company. The Employee may not
assign his rights or obligations hereunder without the express written consent
of the Company's Board of Directors.
18. Headings; Construction
The headings contained in this Employment Agreement are inserted for reference
and convenience only and in no way define, limit, extend, or describe the scope
of this Employment Agreement or the meaning or construction of any of the
provisions hereof. As used herein, unless the context otherwise requires, the
single shall include the plural and vice versa, words of any gender shall
include words of any other gender, and "or" is used in the inclusive sense.
19. Survival of Terms
If this Employment Agreement is terminated for any reason, the provisions of
Sections 7, 8, 9, and 10 of this Agreement shall survive, and the Employee
and/or the Company, as the case may be, shall continue to be bound by the terms
thereof to the extent provided therein.
20. Employee Acknowledgment
THE EMPLOYEE REPRESENTS THAT HE HAS HAD AMPLE OPPORTUNITY TO REVIEW THIS
AGREEMENT AND THE EMPLOYEE ACKNOWLEDGES THAT HE UNDERSTANDS THAT IT CONTAINS
IMPORTANT CONDITIONS OF THE EMPLOYMENT AND THAT IT EXPLAINS POSSIBLE
CONSEQUENCES, BOTH FINANCIAL AND LEGAL, IF THE EMPLOYEE BREACHES THE AGREEMENT.
AS WITNESS the hands of a duly authorized officer of the Company and of the
Employee the day and year first before written.
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SIGNED by _______________________ )
[company representative] for and )
on behalf of Crompton Corporation )
Date: January 12, 2004
--------------------------
SIGNED by _______________________ )
Xxxxxx X. Xxxx )
Date: January 7, 2004
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