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EXHIBIT 3
EMPLOYMENT AGREEMENT
THIS AGREEMENT, dated as of April 27, 1999, between Xxxxxxx Chemical
Company, a Delaware corporation ("Company"), Xxxxxx International, Inc., a
Delaware corporation ("Xxxxxx"), and Xxxx X. X'Xxxxxxx (hereinafter referred to
as the "Employee"),
WITNESSETH:
WHEREAS, the Employee currently serves as the Chairman and Chief
Executive Officer of Xxxxxx, and in such connection Xxxxxx and the Employee
have executed an Employment Agreement between such parties dated October 24,
1996 (the "Prior Employment Agreement"); and
WHEREAS, the Company has commenced certain actions which may lead to
the acquisition of a majority of issued and outstanding common stock of Xxxxxx
by the Company (with the date the majority of such issued and outstanding stock
is acquired by the Company being referred to herein as the "Acquisition Date",
provided that the Acquisition Date shall not be later than October 31, 1999);
and
WHEREAS, because of Employee's extensive experience and his
familiarity with the affairs of Xxxxxx, and because of the significant
challenges in consummating the acquisition of Xxxxxx and in integrating the
business of Xxxxxx with the Company's business, the Company wishes to assure
that it will continue to have the Employee available to perform duties for the
Company; and
WHEREAS, the Employee is willing to commit to (i) the performance of
his services for the Company under the terms and conditions set forth herein,
and (ii) refraining from competition with the Company or disclosing
confidential information of the Company for 18 months following his termination
of employment with the Company;
NOW, THEREFORE, in consideration of the mutual promises herein
contained and other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged, the parties hereto as follows:
1. Employment.
The parties hereto agree that, as of the Acquisition Date (as defined
in the Recitals to this Agreement), and provided that the Employee is serving
as an employee of Xxxxxx at that time, (a) the Company will employ the Employee
and the Employee hereby accepts such employment on the terms and conditions set
forth herein; and (b) the Employee as of such date releases and waives in their
entirety any and all rights he or any person or entity claiming through him may
have under the Prior Employment Agreement. It is understood that the Prior
Employment Agreement will remain in effect pursuant to its terms until the
Acquisition Date.
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2. Term of Employment.
(a) Subject to the provisions for termination set forth herein, the
term of the Employee's employment hereunder shall commence on the Acquisition
Date and shall extend until the second anniversary of the Acquisition Date.
This period shall be known as the "Employment Period."
(b) At the conclusion of the Employment Period and at on each
anniversary thereof, this Agreement shall automatically be extended for one
additional year unless the Company gives to the Employee (or vice versa) notice
of nonrenewal of the Agreement at least sixty (60) days prior to the date such
contract extension would begin.
3. Position and Duties
(a) The Employee's initial position shall be the highest ranking
Employee of Xxxxxx, operating as a wholly owned direct or indirect subsidiary
of the Company.
(b) The Employee shall devote his best efforts to the business and
affairs of the Company, to carrying out the responsibilities assigned to him
from time to time under this Agreement, and shall diligently follow and
implement all management policies and decisions of the Company.
4. Compensation
The Employee shall receive a beginning salary at an annual rate of
$350,000 (the "Base Salary"). The Base Salary may be increased from time to
time at the discretion of the Company. In addition, the Employee shall be
eligible to participate in any long-term or short-term cash incentive programs
which from time to time are made available to Xxxxxx'x officers and key
employees.
5. Working Facilities and Fringe Benefits; Expenses.
The Employee shall be furnished with office space, secretarial
assistance and such other facilities and services as are appropriate to his
position and adequate for the performance of his duties. The Company also shall
provide or cause Xxxxxx to provide to the Employee during the Employment Period
fringe benefits and perquisites at least equal to those provided to the
Employee immediately prior to the date thereof, and neither the Company nor
Xxxxxx shall discriminate against the Employee with respect to any vacation or
holiday plan, medical, hospital, life and disability insurance programs,
savings programs and other similar welfare benefit programs from time to time
made available to Xxxxxx'x officers and key employees. The Company or Xxxxxx
shall pay or reimburse Employee for all reasonable expenses actually incurred
or paid by him in the performance of services rendered by him pursuant to this
Agreement. Such expenses shall be supported by the documentary evidence
required to substantiate them as income tax deductions.
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6. Special Signing Bonus and Restricted Stock Grants.
(a) Signing Bonus. On the Acquisition Date, the Company shall pay the
Employee a signing bonus of $100,000 in cash.
(b) Initial Grant of Restricted Stock. On the Acquisition Date, the
Company shall grant to the Employee a special grant of Company common stock
under the Company's restricted stock program, the number of such restricted
shares to be determined by dividing $300,000 by the closing price of the
Company's common stock on the New York Stock Exchange on the last regular
trading day immediately prior to the Acquisition Date. All restrictions on such
stock shall lapse on the day following the first anniversary of the Acquisition
Date if the Employee is still then employed by the Company or as otherwise
provided under Section 8 of this Agreement.
(c) Second Grant of Restricted Stock. If the Employee is still
employed by the Company on day following the first anniversary of the
Acquisition Date, then as of such date the Company shall grant to the Employee
a second special grant of Company common stock under the Company's restricted
stock program, the number of such restricted shares to be determined by
dividing $300,000 by the closing price of the Company's common stock on the New
York Stock Exchange on the last regular trading day immediately prior to the
date of such second grant. All restrictions on such second grant shall lapse on
the day following the second anniversary of the Acquisition Date if the
Employee is still then employed by the Company or as otherwise provided under
Section 8 of this Agreement.
(d) The payments and grants described in this Section 6 shall be in
lieu of any other long-term or short-term equity incentive programs during the
Employment Period, provided, however, that this shall not restrict the Employee
from participating in any long-term or short-term cash incentive programs which
from time to time are made available to Xxxxxx'x officers and key employees.
Any grant of options of the Company's common stock, any additional grant of
Company restricted stock, or any declaration of eligibility to participate in
any other long-term or short-term cash or equity incentive program maintained
by the Company during the Employment Period for employees other than Xxxxxx
employees shall be made in the sole and uncontrolled discretion of the
Compensation Committee of the Company's Board of Directors (the "Board").
7. Termination of Employment
(a) Death. The Employee's employment shall terminate upon his death.
(b) Disability. The Company may terminate the employment of the
Employee if, in the reasonable judgment of the Board, he becomes unable to
satisfactorily perform his duties and responsibilities hereunder during the
term of his employment because of mental or physical disability.
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(c) Cause. The Company may terminate the Employee's employment for
"Cause". For purposes of this Agreement, "Cause" is defined as (i) a material
breach by Employee of the terms of this Agreement, (ii) the conviction of
Employee of any criminal act that the Board shall, in its sole and absolute
discretion, deem to be or have the potential of being a material risk in any
manner to the Company or its reputation, or (iii) conduct by Employee in his
office with the Company that is grossly inappropriate and demonstrably likely
to lead to material injury to the Company, as determined by the Board acting
reasonably and in good faith; provided, however, that in the case of (iii)
above, such conduct shall not constitute Cause unless the Board shall have
delivered to Employee notice setting forth with specificity (x) the conduct
deemed to qualify as Cause, (y) reasonable action that would remedy such
objection, and (z) a reasonable time (not less than thirty (30) days) within
which Employee may take such remedial action, and Employee shall not have taken
such specified remedial action within such specified reasonable time.
(d) Termination by the Company without Cause. Notwithstanding the
foregoing provisions, the Company may terminate the Employee's employment
without Cause at any time, subject to the provisions of subsection 8(d) hereof.
(e) Date of Termination. "Date of Termination" shall mean (i) if the
Employee's employment is terminated by death pursuant to subsection 7(a), the
date of the Employee's death; (ii) if the Employee's employment is terminated
by the Company as a result of the Employee's disability pursuant to subsection
7(b), the date of such termination, (iii) if the Employee's employment is
terminated by the Company for Cause pursuant to subsection 7(c), the date that
the Notice of Termination is communicated to the Employee, after the expiration
of the right to take remedial action in the case of paragraph 7(c)(iii), and
(iv) if the employment is terminated by the Company without Cause pursuant to
subsection 7(d), the date the Notice of Termination is communicated to the
Employee.
8. Compensation and Other Rights of Employee Upon Termination
(a) Death. If the Employee's employment shall be terminated due to
death pursuant to subsection 7(a), then (i) Company shall make, until the
second anniversary of the Acquisition Date, payments of Base Salary at a rate
equal to the Base Salary annual rate on the date of death, (ii) all of the
Company's common stock owned by the Employee subject to conditions,
restrictions, or limitations which lapse over time or upon a subsequent event
shall immediately be free of all such conditions, restrictions and limitations,
but neither the Employee's estate nor any other person or entity shall be
entitled to any other grant of restricted stock, and (iii) all other rights of
the Employee and his estate, guardian, legal representatives and heirs under
the incentive, savings and welfare plans described in Sections 4 and 5 shall be
determined by the terms and conditions of such plans as in effect on the date
of Employee's death and Xxxxxx'x applicable program and practices as in effect
on the date of Employee's death, as applicable.
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(b) Disability. If the Employee's employment shall be terminated due
to disability pursuant to subsection 7(b), then (i) Company shall make, until
the second anniversary of the Acquisition Date, payments to Employee of his
Base Salary at a rate equal to the Base Salary annual rate on the date of
disability, (ii) all of the Company's common stock owned by the Employee
subject to conditions, restrictions, or limitations which lapse over time or
upon a subsequent event shall immediately be free of all such conditions,
restrictions and limitations, but Employee shall not be entitled to any further
grants of restricted stock, and (iii) all other rights of the Employee and his
estate, guardian, legal representatives and heirs under the incentive, savings
and welfare plans described in Sections 4 and 5 shall be determined by the
terms and conditions of such plans as in effect on the date of Employee's
disability and Xxxxxx'x applicable program and practices as in effect on the
date of Employee's disability.
(c) Termination by the Company for Cause or Termination by Employee
for any reason other than Death or Disability. If the Employee's employment
shall be terminated by (i) the Company for Cause pursuant to subsection 7(c),
or (ii) by the Employee for any reason other than death or disability, the
Company shall pay the Employee all Base Salary and payments owed to him up to
the Date of Termination. Any rights that Employee may have under the incentive,
savings and welfare plans described in Sections 4 and 5 shall be determined by
the terms and conditions of such plans as in effect on the Date of Termination
and Xxxxxx'x applicable programs and practices as in effect on the Date of
Termination, and all other rights under this Agreement shall be terminated.
(d) Termination by the Company without Cause. If the Employee's
employment shall be terminated by the Company without Cause pursuant to
subsection 7(d), then the Company shall pay to the Employee all Base Salary and
payments owed to him up to the Date of Termination. In addition,
(i) within thirty (30) days following the Date of Termination, the
Company shall pay to Employee a lump sum cash payment equal to
the aggregate amount of Base Salary that would have been payable
to the Employee between the Date of Termination and the second
anniversary of the Acquisition Date, computed at the Employee's
Base Salary rate in effect on the Date of Termination;
(ii) if the Date of Termination occurs on or before the first
anniversary of the Acquisition Date, then (A) as of the Date of
Termination all of the Company's common stock owned by the
Employee subject to conditions, restrictions, or limitations
which lapse over time or upon a subsequent event shall
immediately be free of all such conditions, restrictions and
limitations; and (B) in lieu of the grant of restricted stock
described in Section 6(c), within thirty (30) days following the
Date of Termination the Company shall pay the Employee a lump
sum cash payment of $300,000;
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(iii) if the Date of Termination occurs after the day following the
first anniversary of the Acquisition Date but before the second
anniversary of the Acquisition Date, then all of the Company's
common stock owned by the Employee subject to conditions,
restrictions, or limitations which lapse over time or upon a
subsequent event shall immediately be free of all such
conditions, restrictions and limitations;
(iv) except as expressly provided in this Agreement, any rights that
Employee may have under the incentive, savings and welfare plans
described in Sections 4 and 5 shall be determined by the terms
and conditions of such plans as in effect on the Date of
Termination and Xxxxxx'x applicable programs and practices as in
effect on the Date of Termination, and all other rights under
this Agreement shall be terminated; and
(v) through the second anniversary of the Acquisition Date, the
Company shall allow Employee and his family members to
participate in all Xxxxxx welfare plans described in Section 5
on the same terms and conditions and at the same cost as to
which they were entitled to participate immediately prior to the
Date of Termination. If the Employee or his family members shall
be ineligible to participate in any of such welfare plans as a
result of Employee's ceasing to be an employee of the Company or
Xxxxxx, then the Company shall arrange to provide the Employee
and his family members with substantially equivalent benefits as
if Employee remained employed by Xxxxxx throughout the
Employment Period.
(e) Employee understands that during the term of this Agreement the
Company may determine, in its sole discretion, that it is in the best interest
of the Company to make changes in the operations, management structure,
corporate form or reporting relationship of Xxxxxx, and acknowledges that any
change in Employee's position or responsibilities set forth in Section 3(a) or
change in geographic location of his employment resulting from any such change
will not constitute a breach of this Agreement by the Company.
9. Covenant Restricting. Competition: Nondisclosure of Confidential
Information.
(a) The Employee acknowledges that his services are special and
unique, and of an unusual and extraordinary character which gives them peculiar
value, the loss of which cannot adequately be compensated in damages.
Therefore, the Employee agrees that he will not, except with the written
consent of the Company, for a continuous period of eighteen (18) months
commencing immediately following termination of the Employee's employment
hereunder, directly or indirectly engage or become interested in, as a partner,
director, officer, principal, agent or employee, any business which competes
with products produced, marketed or in development by the Company or Xxxxxx at
the time of such termination.
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(b) The Employee acknowledges that in his employment he is or will be
making use of, acquiring or adding to, confidential information of the Company
and Xxxxxx, and is or will be familiar with the Company's and Xxxxxx'x
business, activities, employees, customers and suppliers. Therefore, in order
to protect the Company's and Xxxxxx'x confidential information and to protect
other employees who depend upon the Company for regular employment, Employee
agrees that, except in connection with his employment by the Company, or with
the, consent of the Company, he will not during or after the term of his
employment hereunder in any way utilize any of said confidential information
and he will not copy, reproduce, or take with him the original or any copies of
said confidential information and will not disclose any of said confidential
information to anyone.
In the event of a breach of the covenants contained in this Section 9,
The Company shall be entitled to an injunction restraining such breach in
addition to any other remedies provided by law.
If any provision of this Section 9 is adjudged by a court to be
invalid or unenforceable, the same will in no way affect any other provision of
this Section 9 or any other part of this Agreement, the application of such
provision in any other circumstances or the validity or enforceability of this
Agreement. If any such provision, or any part thereof, is held to be
unenforceable because of the duration of such provision or the area covered
thereby, the parties agree that the court making such determination will have
the power to reduce the duration and/or area of such provision, and/or to
delete specific words or phrases, and in its reduced form such provision will
then be enforceable and will be enforced.
10. Reimbursement of Certain Taxes.
(a) Anything in this Agreement to the contrary notwithstanding and
except as set forth below, in the event it shall be determined that any payment
or distribution by the Company to or for the benefit of the Employee (whether
paid or payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise, but determined without regard to any additional
payments required under this Section 10) (a "Payment") would be subject to the
excise tax imposed by Section 4999 of the Code or any interest or penalties are
incurred by the Employee with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereinafter collectively
referred to as the "Excise Tax"), then the Employee shall be entitled to
receive an additional payment (a "Gross-Up Payment") in an amount such that
after payment by the Employee of all taxes (including any interest or penalties
imposed with respect to such taxes), including, without limitation, any income
taxes (and any interest and penalties imposed with respect thereto) and Excise
Tax imposed upon the Gross-Up Payment, the Employee retains an amount of the
Gross-Up Payment equal to the Excise Tax imposed upon the Payments.
(b) Subject to the provisions of Section 10(c), all determinations
required to be made under this Section 10, including whether and when a
Gross-Up Payment is required
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and the amount of such Gross-Up Payment and the assumptions to be utilized in
arriving at such determination, shall be made by a certified public accounting
firm as may be designated by the Company (the "Accounting Firm") which shall
provide detailed supporting calculations both to the Company and the Employee
within 15 business days of the receipt of notice from the Employee that there
has been a Payment, or such earlier time as is requested by the Company. All
fees and expenses of the Accounting Firm shall be borne solely by the Company.
Any Gross-Up Payment, as determined pursuant to this Section 10, shall be paid
by the Company to the Employee within five days of the receipt of the
Accounting Firm's determination. Any determination by the Accounting Firm shall
be binding upon the Company and the Employee. As a result of the uncertainty in
the application of Section 4999 of the Code at the time of the initial
determination by the Accounting Firm hereunder, it is possible that Gross-Up
Payments which will not have been made by the Company should have been made
("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
Section 10(c) and the Employee thereafter is required to make a payment of any
Excise Tax, the Accounting Firm shall determine the amount of the Underpayment
that has occurred and any such Underpayment shall be promptly paid by the
Company to or for the benefit of the Employee.
(c) The Employee shall notify the Company in writing of any claim by
the Internal Revenue Service that, if successful, would require the payment by
the Company of the Gross-Up Payment. Such notification shall be given as soon
as practicable but no later than ten business days after the Employee is
informed in writing of such claim and shall apprise the Company of the nature
of such claim and the date on which such claim is requested to be paid. The
Employee shall not pay such claim prior to the expiration of the 30-day period
following the date on which it gives such notice to the Company (or such
shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Company notifies the Employee in writing prior to
the expiration of such period that it desires to contest such claim, the
Employee shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim
by an attorney reasonably selected by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Employee harmless, on an
after-tax basis, for any Excise Tax
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or income tax (including interest and penalties with respect thereto) imposed
as a result of such representation and payment of costs and expenses. Without
limitation of the foregoing provisions of this Section 10(c), the Company shall
control all proceedings taken in connection with such contest and, at its sole
option, may pursue or forgo any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim and
may, at its sole option, either direct the Employee to pay the tax claimed and
xxx for a refund or contest the claim in any permissible manner, and the
Employee agrees to prosecute such contest to a determination before any
administrative tribunal, in a court of initial jurisdiction and in one or more
appellate courts, as the Company shall determine; provided, however, that if
the Company directs the Employee to pay such claim and xxx for a refund, the
Company shall advance the amount of such payment to the Employee, on an
interest-free basis and shall indemnify and hold the Employee harmless, on an
after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with
respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment
of taxes for the taxable year of the Employee with respect to which such
contested amount is claimed to be due is limited solely to such contested
amount. Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable hereunder and
the Employee shall be entitled to settle or contest, as the case may be, any
other issue raised by the Internal Revenue Service or any other taxing
authority.
(d) If, after the receipt by the Employee of an amount advanced by the
Company pursuant to Section 10(c), the Employee becomes entitled to receive any
refund with respect to such claim, the Employee shall (subject to the Company's
complying with the requirements of Section 10(c)) promptly pay to the Company
the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by the Employee of an
amount advanced by the Company pursuant to Section 10(c), a determination is
made that the Employee shall not be entitled to any refund with respect to such
claim and the Company does not notify the Employee in writing of its intent to
contest such denial of refund prior to the expiration of 30 days after such
determination, then such advance shall be forgiven and shall not be required to
be repaid and the amount of such advance shall offset, to the extent thereof,
the amount of Gross-Up Payment required to be paid.
11. Assignment.
This Agreement is binding upon and shall be for the benefit of the
successors and assigns of the Company, including any corporation or any other
form of business organization with which the Company may merge or consolidate,
or to which it may transfer substantially all of its assets. Employee shall not
assign his interest in this Agreement or any pan thereof.
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12. Consent of the Company.
Any act, request, approval, consent or opinion of the Company under
this Agreement must be in writing and may be authorized, given or expressed
only by resolution of the Board or by the Chief Executive Officer of the
Company.
13. Notice
For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall be
deemed to have been duly given when delivered or mailed by United States
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Company:
Chief Executive Officer
Xxxxxxx Chemical Company
000 Xxxxx Xxxxxxx Xxxx
Xxxxxxxxx, Xxxxxxxxx 00000
If to the Employee:
Xxxx X. X'Xxxxxxx
000 Xxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000
or to such other address as either party may have furnished to the other in
writing.
14. Governing Law.
This Agreement shall be governed by and construed in accordance with
the laws of the State of Tennessee applicable to contracts made and to be
performed therein.
15. Enforcement Expenses and Arbitration.
The Company agrees to reimburse the Employee for all costs and
expenses incurred by him (including the reasonable fees of his counsel) in
successfully enforcing any of his rights under this Agreement or any claim
arising out of the breach thereof. In addition, the parties acknowledge the
relative economic power of the Company versus the Employee, and the ability of
the Company to resist the conclusion of litigation should the Employee
institute legal proceedings to enforce this Agreement or to recover damages for
the breach thereof. In recognition of this, any controversy or claim arising
out of or relating to this Agreement shall be settled by arbitration in
accordance with the Commercial Arbitration Rules of the American Arbitration
Association, at the sole election of the Employee; provided, however, that an
action by the Company to enforce its rights under Section 9 hereof shall be
excluded from the arbitration provisions of this Section.
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Any such election by Employee shall be made by written notice given to
the Company any time after such controversy or claim arises, and in the event
Employee is served with process relating to any court proceeding concerning any
such claim or controversy commenced by the Company, such election, to be
effective, shall be made by written notice within 15 days of the time Employee
is served with such process. Commencement of court proceedings by Employee
shall be deemed an election not to arbitrate. In the event the Company
commences court proceedings (other than an action by the Company solely to
enforce its rights under Section 9 hereof) and is given notice of the election
to arbitrate by the Employee within the time period set forth above, the
Company agrees to promptly dismiss such court proceedings and submit to
arbitration. In the event of such arbitration, judgment upon the award rendered
by the arbitrators may be entered in any court having jurisdiction thereof.
16. Miscellaneous
Anything in this Agreement to the contrary notwithstanding, all
payments required to be made by the Company hereunder to the Employee, his
estate or legal representatives shall be subject to the withholding of such
amounts relating to taxes as the Company may reasonably determine it should
withhold pursuant to any applicable law or regulation.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date and year first above written.
XXXXXXX CHEMICAL COMPANY
By: /s/Xxxxxx X. Xxxxxxxxx
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Name: Xxxxxx X. Xxxxxxxxx
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Its: Senior VP and General Counsel
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XXXXXX INTERNATIONAL, INC.
By: /s/Xxxx Xxxxxx
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Name: Xxxx Xxxxxx
--------------------------------
Its: CFO and Treasurer
---------------------------------
EMPLOYEE
/s/Xxxx X. X'Xxxxxxx
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Xxxx X. X'Xxxxxxx
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[to be retyped on Xxxxxxx letterhead]
April 27, 1999
Xxxx X. X'Xxxxxxx
Xxxxxx International, Inc.
Re: Grant of Stock Options
Dear Xxxx:
This will confirm our agreement that, effective upon the date Xxxxxxx
Chemical Company becomes the owner of a majority of the issued and outstanding
stock of Xxxxxx International, Inc. (provided that such date is not later than
October 31, 1999), Xxxxxxx Chemical Company shall grant to you an option to buy
5,000 shares of common stock of Xxxxxxx Chemical Company. In accordance with
its standard practices, such options shall (i) be non-qualified options (rather
than incentive stock options), (ii) be exercisable at a price equal to the
closing price of Xxxxxxx Chemical Company common stock on the New York Stock
Exchange on the last regular trading day immediately prior to the date such
options are granted; (iii) provide that one-half of such options shall vest and
become exercisable on the first anniversary of the date of grant, and the other
held shall vest and become exercisable on the second anniversary of the date of
grant; and (iv) contain such other terms as are customary for grants of options
to senior executives of Xxxxxxx Chemical Company. This grant of options is in
addition to and not in lieu of any compensation and benefits provided for under
the Employment Agreement of even date herewith between you, Xxxxxx
International, Inc. and Xxxxxxx Chemical Company.
Very truly yours,
Xxxxxx X. Xxxxxxxxx
Senior Vice President
and General Counsel
