EXHIBIT 10.26
NON-COMPETITION
AGREEMENT
This Agreement made as of the 1st day of March, 1996, between
IMC GLOBAL INC., a Delaware corporation ("Company"), KALIUM CHEMICALS,
LTD., a Delaware corporation and Xxxx X. Xxxxx ("Employee").
WHEREAS, the Company and The Vigoro Corporation, a Delaware
corporation, ("Vigoro") on the date stated above, have completed a
transaction whereby Vigoro has become a wholly-owned subsidiary of the
Company; and
WHEREAS, the Company desires to have the use of and access to
and to protect valuable confidential information relating to the
businesses of the Controlled Group in Employee's possession and other
confidential information which Employee may acquire during employment
by any Employer; and
WHEREAS, the Company has concluded that it is therefore in
the best interest of the Company to provide incentives for Employee to
continue to be employed in the Controlled Group and to secure
Employee's agreement to limitations on Employee's future business
activities in order to protect the Controlled Group from injury that
would occur if the confidential information became available to and
could be used by a competitor of any member of the Controlled Group;
NOW, THEREFORE, for valuable consideration which the parties
acknowledge and in consideration of the mutual covenants and agreements
contained herein, the Employee and the Company agree as follows:
1. Definitions. Each term defined herein shall be given its
defined
meaning wherever used in this Agreement, unless the context requires
otherwise.
"Vigoro" means Vigoro and its Subsidiaries, as they may exist
from time to
time, during Employee's employment with Vigoro or with the Company or
its affiliates in the Controlled Group.
"Cause" means (i) the engaging by the Employee in willful and
intentional conduct which has caused demonstrable and serious injury to
the Company, monetary or otherwise; (ii) conviction of, or plea of nolo
contendere by, the Employee for any felony; (iii) criminal conviction
of, or plea of nolo contendere by, the Employee for any other offense
involving dishonesty, breach of trust or moral turpitude; (iv) a breach
of fiduciary duty by the Employee involving personal profit; or (v)
willful refusal by the Employee to perform his duties or
responsibilities (unless significantly changed without the Employee's
consent), or gross negligence by the Employee in the performance of
such duties: provided, however, that the Employee shall have 30 days,
or such longer period as the Company may determine to be appropriate,
after written notice by the Company, to cure any conduct or act, if
curable, alleged in such notice to provide grounds for termination of
the Employee's employment for Cause.
"Controlled Group" means the Company and all affiliates of
the Company determined under Sections 414(b),(c),(m) and (o) of the
Internal Revenue Code of 1986, as amended.
"Effective Date" means the date first set forth above.
"Employer" means the Company and any Subsidiary or other
member of the Controlled Group which employs Employee on or after the
Effective Date.
"Good Reason" for termination of employment by an Employee
shall mean any of the following:
(a) the failure by the Employer to (i) maintain the
Employee's Base Salary at an annual rate equal to the rate in
effect immediately prior to the Effective Date, or as may be
increased from time to time by the Employer in accordance
with regular practices of the Company thereafter with respect
to employees with comparable duties; provided, however, that
Good Reason shall not exist as the result of any decrease in
Base Salary if such decrease is incident to a general
reduction applied to all senior corporate officers and other
key employees of all members of the Controlled Group on a
proportionate and nondiscriminatory basis; (ii) provide for
continued participation on a comparable basis by the Employee
in an annual bonus plan maintained by the Company or its
Subsidiaries in which employees with comparable duties
participate; (iii) provide for participation in stock option
and other equity incentive plans or programs maintained by
the Company or its Subsidiaries or any other member of the
Controlled Group from time to time in which employees with
comparable duties participate; (iv) provide for participation
in all Company or Subsidiary sponsored group or executive
medical, dental, life, disability, retirement, profit-
sharing, thrift, nonqualified and deferred compensation, and
other plans maintained by the Company or its Subsidiaries to
the same extent as employees with comparable duties
participate; (v) provide vacation and perquisites
substantially equivalent to those provided by the Company or
Subsidiaries to employees with comparable duties; or (vi)
obtain the express unconditional assumption of this Agreement
as required by Section 9; or
(b) any Employer changes the Employee's primary employment
location to a location that is more than 50 miles from the
primary location of such Employee's employment as in effect
immediately prior to the Effective Date; provided, however,
that the relocation of Employee on a nondiscriminatory basis
for bona fide business reasons shall not constitute Good
Reason hereunder; or
(c) a significant adverse change, without the Employee's
written consent, in working conditions or status, including
but not limited to (i) a significant adverse change in the
nature or scope of the Employee's authority, powers,
functions, duties or responsibilities; provided, however, a
change in the Company's status such that it no longer has any
equity securities registered under Section 12(b) or 12(g) of
the Securities Exchange Act of 1934, as amended, or that it
is a subsidiary of another entity and directly results in
changes in the nature or scope of the Employee's authority,
powers, functions, duties or responsibilities shall not in
and of itself constitute Good Reason hereunder, or (ii) a
reduction in the level of support services, staff,
secretarial and other assistance, office space and
accoutrements available to a level below that reasonably
necessary for the performance of such duties.
"Non-Competition Period" shall commence on the date
Employee's employment is terminated and continue for a period of
(a) Three years, if a Severance Event occurs on or before
the first anniversary of the Effective Date;
(b) Two years, if a Severance Event occurs after the first
anniversary of the Effective Date and on or before the second
anniversary thereof; and
(c) One year, if a Severance Event occurs after the second
anniversary of the Effective Date and on or before the third
anniversary thereof or if Employee's employment is terminated for a
reason other than a Severance Event.
"Severance Event" shall be deemed to have occurred if, and
only if, as of or after the Effective Date, but prior to the expiration
of the Severance Period, termination of Employee's employment with the
Company occurs, and such termination is:
(a) Employer-initiated for reasons other than Cause; or
(b) Employee-initiated within ninety (90) days after the
Employee first has or should have knowledge that Good
Reason exists.
"Severance Period" means a period of three (3) years from and
after the Effective Date.
"Subsidiary" means any corporation of which the securities
having a majority of the ordinary voting power in electing the board of
directors are, at the time of such determination, owned by the Company
or another Subsidiary.
2. Proprietary Rights.
(a) Employee acknowledges that each Employer and other
members of the Controlled Group 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 Controlled Group 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
Employee as a consequence of his employment by the Employer (including
information conceived, discovered or developed by Employee 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
Employer and other members of the Controlled Group 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, the data bases of Confidential
Information maintained in connection with such 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 Employee or with Employee's 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 Employee prior to employment with an
Employer, or may now or in the future be in the public domain, Employee
acknowledges that the compilation of that information contained in the
Proprietary Materials has or will cost the Employer and other members
of the Controlled Group a great effort and expense, and affords persons
to whom Proprietary Materials are disclosed, including Employee, a
competitive, advantage over persons who do not know the information or
have the compilation of the Proprietary Materials. Employee 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.
3. Confidentiality Duties. Employee 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) Comply with all instructions of the Company and the
Employer (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 Employer and other members of the
Controlled Group, and pursuant to directions of the Company or the
Employer.
(c) Exercise appropriate care to advise other employees of
the Company and the Employer (and, as appropriate, subcontractors) 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 or the Employer 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 Employer, except as the Company directs.
(f) Not publish, lecture on or otherwise disclose to any
person who is not an employee of the Company, except as the Company or
the Employer 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.
Upon the termination of employment for whatever reason, Employee (or in
the event of death, Employee's personal representative) shall promptly
surrender to the Company the original and all copies of Proprietary
Materials (including all notes, memoranda and the like concerning or
derived therefrom), whether prepared by Employee or others, which are
then in Employee's possession or control. Records of payments made by
the Company or any Employer to or for the benefit of Employee,
Employee's copy of this Agreement and other such things, lawfully
possessed by Employee which relate solely to taxes payable by Employee,
employee benefits due to Employee or the terms of Employee's employment
with the Company or any Employer, shall not be deemed Proprietary
Materials for purposes of this Section 3.
4. Non-Competition.
(a) During Employee's employment with the Company, or any
other members of the Controlled Group, Employee shall not, in any way,
directly or indirectly, manage, operate, control (or participate in any
of the foregoing), accept employment or a consulting position with or
otherwise advise or assist or be connected with or directly or
indirectly own or have any other interest in or right with respect to
(other than through ownership of not more than 5 % of the outstanding
shares of a corporation's stock which is listed on a national
securities exchange) any enterprise (other than for the Company or any
other member of the Controlled Group) which competes with Company or
its affiliates in the Controlled Group.
(b) During the Non-competition Period, Employee shall not
render employment or consulting services to any business enterprise in
North America (except to the Company or any member of its Controlled
Group) in a capacity in which Employee will directly supervise a
business which is directly competitive with the business which Employee
supervised during the one year period preceding the Severance Event.
(c) Employee recognizes that the foregoing limitations are
reasonable and properly required for the adequate protection of the
business of the Company, the Employers and the members of the
Controlled Group. If any such limitations are deemed to be
unreasonable by a court having jurisdiction of the matter and parties,
Employee hereby agrees and submits to the reduction of any such
limitations to such territory or time as to such court shall appear
reasonable.
(d) Employee agrees that the remedy at law for any breach of
the provisions of Sections 2 or 3 or this Section 4 shall be inadequate
and that the Company and any Employer shall be entitled to injunctive
relief in addition to any other remedies it may have.
5. Payments
(a) If Employee's employment is terminated because of a
Severance Event, the Employer shall pay the Employee:
(i) If the Severance Event occurs on or before the
first anniversary of the Effective Date, $1,380,000, in thirty-six (36)
monthly installments;
(ii) If the Severance Event occurs after the first
anniversary of the Effective Date and on or before the second
anniversary, $920,000, in twenty-four (24) monthly installments; and
(iii) If the Severance Event occurs after the second
anniversary of the Effective Date and on or before the third
anniversary, $460,000, in twelve (12) monthly installments.
In each case the first installment shall be due on the first day of the
month following the month in which the Severance Event occurs and
subsequent installments shall be due on the first day of each
succeeding month until all installments have been paid.
(b) The Company has assessed the reasonableness of the
payments provided for herein and believes that the amounts provided are
both reasonable in the light of the benefits secured for the Company by
this Agreement and related to the business of the Company.
6. Obligation of Employer. The Company agrees to cause
Employee's Employer at the time of the Severance Event to make all
payments required hereunder to be made to Employee, and agrees that the
liability for making such payments and providing such benefits shall be
the sole and exclusive obligation of such Employer, provided, however,
that the foregoing notwithstanding, in the event that such benefits are
not so paid by the Employer, then such benefits shall be paid or caused
to be paid by the Company.
7. Enforcement. In the event the Company or the Employer
shall fail to pay to an Employee or successor any amounts due under
this Plan or under any of the plans, programs or arrangements referred
to herein as they come due, the Company and the Subsidiaries shall pay
interest on such amounts at the prime rate of interest as from time to
time published in The Wall Street Journal (Midwest Edition) until paid.
8. Non-assignment. Except as may be required by applicable
law, the payments which may become due to Employee shall not at any
time be subject in any manner to anticipation, alienation, sale,
transfer, assignment, pledge, encumbrance, charge, garnishment,
execution, or levy of any kind, either voluntary or involuntary,
including any such liability which is for alimony or other payments for
the support of a spouse or former spouse, or for any other relative of
the Employee, prior to actually being received by Employee; and any
attempt to anticipate, alienate, sell, transfer, assign, pledge,
encumber, charge or otherwise dispose of any right to benefits payable
hereunder shall be void.
9. Assumption. This Agreement shall inure to the benefit
of, and be binding upon, the successors and assignees of the Company
and each Employer. The Company and each Employer shall require any
successor or assignee, whether direct or indirect, by purchase, merger,
consolidation or otherwise, to all or substantially all the business or
assets of the Company or any Employer, expressly and unconditionally to
assume and agree to perform the Company's obligations or such
Employer's obligations under this Agreement.
10. Enforcement. The provisions of this Agreement shall be
regarded as divisible, and if any of the provision or any part of the
Agreement is decided invalid or unenforceable by a court of competent
jurisdiction, the validity and enforceability of the remainder of the
provisions or parts of the Agreement and the applicability thereof
shall not be affected.
11. Amendment. This Agreement may not be amended or
modified at any time except by written instrument executed by the
Company and the Employee.
12. Withholding. The Employer shall be entitled to withhold
from amounts to be paid to the Employee hereunder any federal, state or
local withholding or other taxes or charges which it is from time to
time required to withhold. The Company shall be entitled to rely on an
opinion of counsel if any question as to the amount or requirement of
any such withholding shall arise.
13. Governing Law; Arbitration. This Agreement and the
rights and obligations hereunder shall be governed by and construed in
accordance with the laws of the State of Illinois. Any dispute arising
out of this Agreement shall be determined by arbitration under the
commercial arbitration rules of the American Arbitration Association
then in effect and judgment upon any award pursuant to such arbitration
may be enforced in any court having jurisdiction thereof. The place of
arbitration shall be in the city with population of 100,000 or more
nearest to the Employee's place of employment immediately prior to the
Severance Event or in the nearest state or provincial capital if it is
closer to such place of employment than is such city.
14. Notice. Notices given pursuant to this Agreement shall
be in writing and shall be deemed given when received and if mailed,
shall be mailed by registered or certified mail, return receipt
requested, addressee only, postage prepaid, if to the Employer to IMC
Global Inc., 0000 Xxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx 00000, Attention
Xxxxxxxx X. Xxxxx, Senior Vice President and General Counsel, or if to
the Employee, at the address set forth below the Employee's signature
line of this Agreement, or to such other address as to the party to be
notified shall have given to the other.
15. No waiver. No waiver by either party at any time of any
breach by the other party of, or compliance with, any condition or
provision of this Agreement to be performed by the other party shall be
deemed a waiver of similar or dissimilar provision or condition at the
same time or any prior or subsequent time.
16. Certain Rules of Construction. No party shall be
considered as being responsible for the draft of this Agreement for the
purpose of applying any rule construing ambiguities against the drafter
or otherwise. No draft of this Agreement shall be taken into account
in construing this Agreement. The headings in this Agreement are for
reference only and shall not affect the meaning or interpretation of
any provision of this Agreement.
IN WITNESS WHEREOF, the parties have executed this agreement
as the day and year first written above.
KALIUM CHEMICALS, LTD. IMC GLOBAL INC.
By: _____________________ By:
______________________
Name: Name:
Title: Title:
Attest: ___________________ Attn:
____________________
Name: Name:
Title: Title:
___________________________
Xxxx X. Xxxxx
00000 Xxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
