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May 23, 2005
BY HAND DELIVERY
Xxxxxxx X. Xxxxxxx
000 Xxxxxx Xxxx
Xxxxxxx Xxxxx, Xxx Xxxxxxxxx 00000
Dear Xxxxxxx
This Letter Agreement sets forth the understanding between you and
GenTek Inc., a Delaware corporation (the "Company"), regarding your retirement
from employment with the Company.
1. Retirement. Your last day of active employment with the
Company will be July 1, 2005 (the "Retirement Date"). Notwithstanding the
previous sentence, you will cease to serve as (a) President and Chief Executive
Officer of the Company, (b) a member of the Company's Board of Directors and/or
(c) an authorized representative of the Company on May 23, 2005. During the
period beginning May 23, 2005 and ending on the Retirement Date, your title
shall be "Advisor to the Board" and you shall be available from your existing
office in New Hampshire at the Chairman's or incoming chief executive officer's
request for advisory services. You agree to use your best efforts to advance the
interests of the Company and its affiliates and to facilitate the successful
transition of the individual who succeeds you as the Company's Chief Executive
Officer. By signing below, you and the Company acknowledge and agree that your
retirement from employment will be considered a "Termination without Cause" and
you consent to (x) any change in your reporting responsibilities, titles and
elected or appointed offices and (y) any reduction by the Company in your bonus
opportunity, in each case as in effect immediately prior to entering into this
Agreement.
The Company confirms that, as a former Director, President and Chief
Executive Officer, you will be entitled to indemnification for any claims
arising against you as a result of your service to the Company in those
capacities as provided in Article VIII of the Second Amended and Restated
Certificate of Incorporation of GenTek Inc., and Article V of the GenTek Inc.
Amended and Restated By-laws dated November 10, 2003. The Company presently
intends to maintain Directors' and Officers' insurance to meet its
indemnification obligations for all current and former Directors and Officers of
the Company.
2. Retention Payment. To provide an incentive for you to remain
employed by the Company until the Retirement Date, we are offering you the
following retention benefits through the Retirement Date: (a) continued payment
of your base salary in effect as of the date herein, payable in accordance with
the customary payroll practices of the Company, (b) continued participation in
all employee benefit plans, programs and arrangements of the
Company that you currently participate in, under the terms generally made
available to the senior officers of the Company, (c) continued use of your
existing office in New Hampshire.
3. Severance Compensation. You and the Company hereby acknowledge
and agree that, subject to your compliance with Sections 3 and 4 of this Letter
Agreement, the Company shall provide you with: (a) a lump sum cash payment equal
to $1,563,000 (the "Severance Benefit"), payable within 60 days after your date
of retirement, pursuant to the terms of the GenTek Inc. Key Employee Retention
Plan (the "KERP); (b)$1,498,487 plus, as applicable, interest accrued as
provided pursuant to and payable under the General Chemical Corporation
Supplemental Savings and Retirement Plan as amended and restated effective
January 1, 1996 (the "SERP), the Employment Letter dated March 19, 2004 entered
into by and between you and the Company (the "Employment Letter") and the Joint
Plan of Reorganization entered into as of November 10, 2003 (the "Plan of
Reorganization") (representing the $993,761 Supplemental Savings component of
the SERP, the $289,726.02 vested portion of the Supplemental Pension component
of the SERP and the $215,000 SERP benefit protected under the Plan of
Reorganization); (c) your benefit accrued under the Supplemental Pension
component of the SERP for the period beginning on the date of emergence from
bankruptcy and ending on April 1, 2004 when the SERP was frozen, in an amount to
be determined by actuaries selected by the Company; (d) 170 shares of common
stock representing the restricted stock that vested pursuant to the GenTek Inc.
Restricted Stock Agreement (the "Restricted Stock Agreement"); (e) 25,754 shares
of common stock representing the shares for which restrictions have lapsed
pursuant to and subject to the terms of the GenTek Inc. "Emergence Shares"
Restricted Stock Agreement ("Emergence Shares Agreement"); (f) the escrowed
dividends in respect of your shares of Restricted Stock forfeited pursuant to
the Emergence Shares Agreement as soon as administratively possible after March
19, 2006; (g) an option to purchase 3,162 shares of common stock (at an exercise
price of $11.03), representing the vested options pursuant to the 2003
Management and Directors Incentive Plan of GenTek Inc. Stock Option Agreement
(the "Stock Option Agreement"), which option expires ten years following the
"Grant Date" (as defined in the Stock Option Agreement); (h) $40,076.92,
representing accrued but unused vacation; (i) continued medical and dental
coverage for a period of 36 months pursuant to the KERP; (j) retiree health
benefits during the period commencing on the date following your Retirement Date
and ending on the date you cease to receive retirement income, which benefit is
secondary to, and offset by, Medicare pursuant to the SERP; (k) gross up
payments if an excise tax is imposed by Section 4999 of the Internal Revenue
Code (which would only be triggered upon a change in control) with respect to
the Severance Benefit; and (1) reimbursement for any incurred business expenses
pursuant to the Company's expense reimbursement program. Any continuation of
medical and dental coverage under the KERP or the SERP will be provided to you
at the same cost as active employees. If the Company increases, decreases or
otherwise modifies the amount or kind of medical or dental benefits provided to,
or the contributions or copayments of, such active employees generally, such
increase, decrease or modification shall be applicable to the medical or dental
benefits provided to you under this Section 2.
You further acknowledge and agree that the payments and benefits
described in this Section 2 fully satisfy any and all of the Company's
obligations to you in connection with your retirement from employment with the
Company under the Employment Letter, the GenTek Inc. 2003 Management and
Directors Incentive Plan, the KERP, the Stock Option Agreement, the Emergence
Shares Agreement, the Restricted Stock Agreement, the SERP and the Plan of
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Reorganization. Nothing in this Letter Agreement will modify any additional
payments or benefits or the treatment of any equity based compensation awards
that may be provided to you pursuant to any qualified plans.
4. Waiver Agreement. You agree to sign and be bound by a general
Waiver and Release of Claims in the form attached hereto as Exhibit A (the
"Waiver"), which shall be considered an integral part of this Letter Agreement.
You also acknowledge and agree that any payments and benefits that you are
entitled to from the Company under Section 2 of this Letter Agreement or
otherwise in connection with your retirement from employment with the Company
are subject to your execution and non-revocation of the Waiver.
5. Restrictive Covenants. You acknowledge and agree that in
consideration for the payments and benefits that you are receiving hereunder,
you shall be subject to the restrictive covenants as set forth in the GenTek
Inc. Retention Plan Participation Agreement dated March 21, 2003 entered into by
and between you and the Company and Section 4.03 of the KERP.
6. Non-Disclosure of Letter Agreement and Waiver. You agree not
to disclose the terms or existence of this Letter Agreement and the Waiver to
any person, agency, institution, company, or other entity unless the Company
agrees to such disclosure in advance and in writing, provided that you may,
without such permission (a) disclose that your employment has terminated and
make such disclosures as are required by law, including disclosures to taxing
agencies, and disclose the terms of this agreement to your spouse and immediate
family members, attorney(s), accountant(s), tax advisor(s) and other
professional service provider(s), as reasonably necessary, and (b) disclose the
terms and existence of the covenants described or contained in Section 4 hereof
to prospective future employers; provided in each case that you instruct such
person(s) that the terms of this Letter Agreement and the Waiver are strictly
confidential and are not to be revealed to anyone else except as required by
law.
7. Entire Agreement. This Letter Agreement and the Waiver
constitute the entire understanding between you and the Company regarding your
retirement from employment with, or otherwise from, the Company and shall
supersede any and all prior agreements with respect thereto. You acknowledge and
agree that the payments and benefits set forth in this Letter Agreement shall
constitute the only payments and benefits that you will be entitled to receive
from the Company, its stockholders, its predecessors or its affiliates in
connection with your retirement from employment or otherwise and you hereby
waive your right to receive any other such payments.
8. Tax Withholding. All payments made pursuant to this Letter
Agreement and the Waiver shall be subject to the withholding of any amounts
required by Federal, state or local law.
9. Additional Documents. In order to effectuate the foregoing,
you agree to execute any additional documents as may be reasonably requested
from time to time by the Company.
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10. Validity. The invalidity or unenforceability of any provision
or provisions of this Agreement shall not affect the validity or enforceability
of any other provision of this Letter Agreement which shall remain in full force
and effect.
11. Arbitration. Any dispute or controversy arising under or in
connection with the Letter Agreement or otherwise in connection with your
employment with the Company shall be settled by arbitration.
Please indicate your acceptance of the terms and provisions of this
Letter Agreement and the Waiver by signing both copies of this Letter Agreement
and the Waiver and returning one copy of each to me. The other copy of each is
for your files. By signing below, you acknowledge and agree that you have
carefully read this Letter Agreement in its entirety; fully understand and agree
to its terms and provisions; and intend and agree that it be final and legally
binding on you and the Company. This Letter Agreement shall be governed and
construed under the internal laws of Delaware and may be executed in several
counterparts.
Very truly yours,
/s/ Xxxx X. Xxxxxxx, Xx.
Xxxx X. Xxxxxxx, Xx.
Chairman of the Board of Directors
Agreed, Acknowledged and Accepted:
/s/ Xxxxxxx X. Xxxxxxx
---------------------------------------
Xxxxxxx X. Xxxxxxx
Date: May 23, 2005
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EXHIBIT A
WAIVER AND RELEASE OF CLAIMS
In exchange for payments and benefits described in the attached
Letter Agreement, dated May 23, 2005 (the "Letter Agreement"), which I
acknowledge I would not otherwise be entitled to receive, I freely and
voluntarily agree to enter into and be bound by this Waiver and Release of
Claims ("Waiver"):
1. I acknowledge that my employment with the Company and all
subsidiaries and affiliates thereof, terminated on July 1, 2005 (the "Retirement
Date"). I further acknowledge that the Company delivered this Waiver to me on
May 23, 2005.
2. I, and anyone claiming through me (including without
limitation my heirs, and agents, representatives and assigns), hereby
irrevocably waive and forever release and discharge the Company, its parents,
subsidiaries, affiliates, officers, directors, employees, agents, predecessors,
successors and assigns (the "Releasees"), from any and all liabilities of any
nature whatsoever, known and unknown, fixed or contingent, arising out of, based
on, or related to my employment by the Company or any other Releasee, the
termination of such employment, and any dealings, transactions or events
involving the Releasees occurring prior to or on the Retirement Date, including
but not limited to claims under the Civil Rights Act of 1866; the Civil Rights
Act of 1871; the Civil Rights Act of 1964, as amended; the Age Discrimination in
Employment Act, of 1966; the Older Workers Benefit Protection Act of 1990; the
Americans with Disabilities Act of 1990; the Employment Retirement Income
Security Act of 1974; the Rehabilitation Act of 1973; the Family and Medical
Leave Act; the Worker Adjustment and Retraining Notification ("WARN") Act; and
any other federal, state or local law, rule or regulation, or common law claim.
This includes, but is not limited to, all wrongful termination and "constructive
discharge" claims, all discrimination claims, all claims relating to any
contracts of employment, whether express or implied, any covenant of good faith
and fair dealing, whether express or implied, and any tort of any nature. This
release is for any relief, no matter how denominated, including but not limited
to wages, back pay, front pay, benefits, compensatory damages, or punitive
damages. I also agree not to commence or cooperate in the prosecution or
investigation of any lawsuit, administrative action or other claim or complaint
against the Releasees, except as required by law. This release does not include
any claims for my vested interest in any employee benefit plan of the Company
and does not extend to claims that may arise after the date this Waiver.
3. I understand and agree that this Waiver will be binding on me
and my heirs, administrators and assigns. I acknowledge that I have not assigned
any claims or filed or initiated any legal proceedings against any of the
Releasees.
4. Except as may be required by law, I agree that I will not
disclose the existence or terms of this Waiver to anyone except my accountant,
attorney or spouse, each of whom shall also be bound by this confidentiality
provision.
5. I understand that I have twenty-one (21) days to consider
whether to sign this Waiver and return it to the Chairman of the Board of
Directors of the Company or his
designee. The Company hereby advises me of my right to consult with an attorney
before signing the Waiver, and I acknowledge that I have had an opportunity to
consult with an attorney and have either held such consultation or have
determined not to consult with an attorney.
6. I understand that I may revoke my acceptance of this Waiver by
delivering notice of my revocation to the Chairman of the Board of the Company
within seven (7) days of the day I sign the Waiver. If I do not revoke my
acceptance of this Waiver within seven days of the day I sign it, it will be
legally binding and enforceable.
7. I acknowledge and agree that if any provision of this Waiver
is found, held or deemed by a court of competent jurisdiction to be void,
unlawful or unenforceable under any applicable statute or controlling law, the
remainder of this Waiver shall continue in full force and effect.
8. This Waiver is deemed made and entered into in the Delaware,
and in all respects shall be interpreted, enforced and governed under the
internal laws of Delaware to the extent not preempted by federal law.
* * * * *
I acknowledge and agree that I have carefully read and fully
understand all of the provisions of this Waiver and that I voluntarily enter
into this Waiver by signing below. Upon execution, I agree to deliver a signed
copy of this Waiver to the Chairman of the Board of the Company.
/s/ Xxxxxxx X. Xxxxxxx
---------------------------
Xxxxxxx X. Xxxxxxx
Date: May 23, 2005
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