Exhibit 10(h)
EXECUTIVE AGREEMENT
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Agreement between Xxxx Corporation, a Virginia corporation ("Xxxx"), and
_________________ (the "Executive"), dated as of December 10, 1998.
Xxxx and the Executive agree as follows:
1. Definitions
As used in this Agreement:
(a) "Cause" means the willful and continued failure of the Executive to
substantially perform his duties; the willful engaging by the Executive in gross
misconduct significantly and demonstrably financially injurious to Olin; or
willful misconduct by the Executive in the course of his employment which is a
felony or fraud. No act or failure to act on the part of the Executive will be
considered "willful" unless done or omitted not in good faith and without
reasonable belief that the action or omission was in the interests of Olin or
not opposed to the interests of Olin.
(b) "Change in Control" means:
(i) Olin ceases to be, directly or indirectly, owned by at least
1,000 stockholders;
(ii) A person, partnership, joint venture, corporation or other
entity, or two or more of any of the foregoing acting as a "person" within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934, as amended
(the "Act"), other than Olin, a majority-owned subsidiary of Olin or an employee
benefit plan (or the plan's related trust) of Olin or such subsidiary, become(s)
the "beneficial owner" (as defined in Rule 13d-3 under such Act) of 20% or more
of the then outstanding voting stock of Olin;
(iii) During any period of two consecutive years, individuals
who at the beginning of such period constitute Olin's Board of Directors
(together with any new Director whose election by Olin's Board of Directors or
whose nomination for election by Olin's stockholders was approved by a vote of
at least two-thirds of the Directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason to constitute a
majority of the directors then in office;
(iv) All or substantially all of the business of Olin is
disposed of pursuant to a merger, consolidation or other transaction in which
Olin is not the surviving corporation or Olin combines with another company and
is the surviving corporation (unless the shareholders of Olin immediately
following such merger, consolidation, combination, or other transaction
beneficially own, directly or indirectly, more than 50%
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of the aggregate voting stock or other ownership interests of (x) the entity or
entities, if any, that succeed to the business of Olin or (y) the combined
company) or
(v) Approval by Olin's shareholders of (i) a sale of all or
substantially all the assets of Olin or (ii) a liquidation or dissolution of
Olin.
(c) "Disability" means that the Executive has suffered an incapacity
due to physical or mental illness which meets the criteria for disability
established at the time under Olin's short term disability plan.
(d) "Executive Severance" means:
(i) twelve months of the Executive's then current monthly salary
(without taking into account any reductions which may have occurred at or after
the date of a Change in Control); plus
(ii) an amount equal to the greater of (A) the Executive's
average annual award actually paid under Olin's short-term annual incentive
compensation plans or programs ("ICP") (including zero if nothing was paid or
deferred but including any portion thereof the Executive has elected to defer)
for the three years immediately preceding the date of Termination (or if the
Executive has not participated in ICP for such three completed fiscal years, the
average of any such awards for the shorter period of years in which the
Executive was a participant) and (B) the Executive's then current ICP standard
annual award.
(e) "Potential Change in Control" means:
(i) Olin has entered into an agreement the consummation of which
would result in a Change in Control;
(ii) any person (including Olin) publicly announces an intention
to take or to consider taking actions which if consummated would constitute a
Change in Control;
(iii) Olin learns that any person (other than an employee
benefit plan of Olin or a subsidiary of Olin (or the plan's related trust)) has
become the beneficial owner directly or indirectly of securities of Olin
representing 9.5% or more of the combined voting power of Olin's then
outstanding securities ordinarily entitled to vote in elections of directors; or
(iv) the Board of Directors of Olin adopts a resolution to the
effect that, for purposes of this Agreement, a Potential Change in Control of
Olin has occurred;
provided, if an event specified in clause (iii) above has occurred by or on the
date hereof, such event shall not be deemed a Potential Change in Control unless
such person acquires
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another 1% of such securities subsequent to the date hereof.
(f) "Termination" means:
(i) The Executive is discharged by Olin other than for Cause;
(ii) The Executive terminates his or her employment in the event
that:
(1) Olin requires the Executive to relocate the
Executive's then office to an area which is not within reasonable commuting
distance, on a daily basis, from the Executive's then residence, except that
prior to a Change in Control a requirement to relocate the Executive's office to
Olin's corporate headquarters is not a basis for Termination;
(2) Olin reduces the Executive's base salary or fails to
increase the Executive's base salary on a basis consistent (as to frequency and
amount) with Olin's exempt salary system as then in effect or, in the event of a
Change in Control, as in effect immediately prior to the Change in Control;
(3) Olin fails to continue the Executive's participation
in its benefit plans (including incentive compensation and stock options) on
substantially the same basis, both in terms of the amount of the benefits
provided (other than due to Olin's or a relevant operation's financial or stock
price performance provided such performance is a relevant criterion under such
plan) and the level of the Executive's participation relative to other
participants as exists on the date hereof; provided that, with respect to annual
and long term incentive compensation plans, the basis with which the amount of
benefits and level of participation of the Executive shall be compared shall be
the average benefit awarded to the Executive under the relevant plan during the
three completed fiscal years immediately preceding the date of Termination;
(4) The Executive suffers a Disability which prevents
the Executive from performing the Executive's duties with Olin for a period of
at least 180 consecutive days;
(5) Following a Change in Control, Olin fails to
substantially maintain its benefit plans as in effect at the time of the Change
in Control, unless reasonably equivalent arrangements (embodied in an on-going
substitute or alternative plan) have been made with respect to such plans; or
(6) The Executive's duties, position or reporting
responsibilities are diminished.
For purposes solely of clarification, it is understood that (i) if, in
connection with the spinoff of an Xxxx business or Olin's assets as a separate
public company to Olin's shareholders, the Executive accepts employment with,
and becomes employed at, the
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spunoff company or its affiliate, the termination of the Executive's employment
with Olin shall not be considered a "Termination" for purposes of this Agreement
provided a Change in Control shall not have occurred prior to the termination of
the Executive's employment with Olin and (ii) except as provided in paragraph
5(f), in connection with the sale of an Xxxx business to a third party or the
transfer or sale of an Xxxx business or Olin's assets to a joint venture to be
owned directly or indirectly by Olin with one or more third parties, if the
Executive accepts employment with, and becomes employed by, such buyer or its
affiliate or such joint venture or its affiliate in connection with such
transaction, such cessation of employment with Olin shall not be considered a
"Termination" for purposes of this Agreement.
2. Previous Change in Control Agreement. This Agreement supersedes and
replaces the Executive Agreement dated as of October 3, 1997 between Olin and
the Executive.
3. Term/Executive's Duties.
(a) This Agreement expires at the close of business on September 30,
2002, unless prior to that date there is a Change in Control, in which case this
Agreement will expire on the later of (i) the close of business on September 30,
2002, (ii) or three years following the date of the Potential Change in Control
or (iii) three years following the date of the Change in Control; provided that
the expiration of this Agreement will not affect any of the Executive's rights
resulting from a Termination prior to such expiration. In the event of the
Executive's death while employed by Olin, this Agreement shall terminate and be
of no further force or effect on the date of his or her death; provided that the
Executive's death will not affect any of the Executive's rights resulting from a
Termination prior to death.
(b) During the period of the Executive's employment by Olin, the
Executive shall devote his or her full time efforts during normal business hours
to Olin's business and affairs, except during reasonable vacation periods and
periods of illness or incapacity. Nothing in this Agreement will preclude the
Executive from devoting reasonable periods required for service as a director or
a member of any organization involving no conflict of interest with Olin's
interest, provided that no additional position as director or member shall be
accepted by the Executive during the period of his employment with Olin without
its prior consent.
(c) The Executive agrees that in the event of any Potential Change in
Control of Olin occurring from time to time after the date hereof, the Executive
will remain in the employ of Olin until the earlier of (i) the end of the six
month period following the occurrence of such Potential Change in Control and
(ii) a Change in Control during which time the Executive will have an office,
title, duties and responsibilities substantially consistent with those
applicable immediately prior to such Potential Change in Control.
4. Executive Severance Payment
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(a) In the event of a Termination occurring before the expiration of
this Agreement, Olin will pay the Executive a lump sum in an amount equal to the
Executive Severance. The payment will be made within 10 days of the Termination.
(b) In the event of a Termination after a Change in Control has
occurred, in addition to the Executive Severance paid under paragraph 4(a)
above, Olin will pay a Change in Control severance premium to the Executive in
an amount equal to two times the Executive Severance. The Change in Control
severance premium, if it becomes due, will be made within 10 days of the
Termination.
(c) The amount due under paragraph 4(a) and 4(b), if any, will be
reduced to the extent that, if such amount in the aggregate were paid in equal
monthly installments over a 12-month period (or in the event both paragraph 4(a)
and 4(b) are applicable, a 36-month period), no installment would be paid after
the Executive's sixty-fifth birthday.
(d) The Executive will not be required to mitigate the amount of any
payment provided for in paragraph 4(a) or 4(b) by seeking other employment or
otherwise, nor shall any compensation received by the Executive from a third
party reduce such payment except as explicitly provided in this Agreement.
Except as may otherwise be expressly provided herein, nothing in this Agreement
will be deemed to reduce or limit the rights which the Executive may have under
any employee benefit plan, policy or arrangement of Olin. Except as expressly
provided in this Agreement, payments made under paragraphs 4 or 5(e) shall not
be affected by any set-off, counterclaim, recoupment, defense or other claim
which Olin may have against the Executive.
(e) If the Executive receives the Executive Severance, the Executive
will not be entitled to receive any other severance otherwise payable to the
Executive under any other severance plan of Olin. If on the Termination date the
Executive is eligible and is receiving payments under any then existing Olin
disability plan, then the Executive agrees that all such payments may, and will
be, suspended and offset for 12 months (or in the event paragraph 4(b) is also
applicable, 36 months) (subject to applicable law) following the Termination
date. If after such period the Executive remains eligible to receive disability
payments, then such payments shall resume in the amounts and in accordance with
the provisions of the applicable Olin disability plan.
(f) In the event the Executive, in connection with the sale of an Xxxx
business to a third party or the transfer of an Xxxx business or Olin assets to
a joint venture which would be owned directly or indirectly by Olin with one or
more third parties, ceases to be employed by Olin and with Olin's consent
becomes employed by the buyer or its affiliate or the joint venture or its
affiliate, the Executive shall be entitled to the benefits provided under
paragraph 4(a) (using Olin figures at the time of new employment) (subject to
paragraphs 4(c), 4(d) and 4(e)) and the first sentence of paragraph 5(a)
(subject to paragraph 5(c)), and paragraph 5(d), if the Executive has a
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Termination as defined in paragraph 1(f) with his new employer (with the new
employer being substituted for Olin in such paragraph 1(f) and without giving
any effect to the Change in Control references contained therein following such
new employment) within 12 months of becoming employed by such new employer.
Any cash compensation amounts paid under this paragraph 4(f) shall be reduced by
any severance, job transition or employment termination payments such Executive
receives in cash from his or her new employer in connection with the
Termination. In connection with this paragraph 5(f), in no event shall the
Change in Control provisions of this Agreement be applicable once the Executive
ceases to be employed by Olin.
5. Other Benefits
(a) If the Executive becomes entitled to payment under paragraph 4(a),
the Executive will receive 12 months service credit under all Olin Pension Plans
for which the Executive was eligible at the time of the Termination (i.e., under
Olin's qualified Pension Plans to the extent permitted under then applicable
law, otherwise such credit will be reflected in a supplementary pension payment
from Olin to be due at the times and in the manner payments are due the
Executive under such qualified pension plans), and for 12 months from the date
of the Termination the Executive (including covered dependents) will continue to
enjoy coverage on the same basis as a similarly situated active employee under
all Olin medical, dental, and life insurance plans to the extent the Executive
was enjoying such coverage immediately prior to the Termination. The Executive's
entitlement to insurance coverage under the Consolidated Omnibus Budget
Reconciliation Act would commence at the end of the period during which
insurance coverage is provided under this Agreement without offset for coverage
provided hereunder. The Executive shall accrue no vacation during the 12 months
following the date of Termination but shall be entitled to payment for accrued
and unused vacation for the calendar year in which the Termination occurs. If
the Executive receives the Executive Severance (including the amount referred to
in paragraph 1(d)(ii)), the Executive shall not be entitled to an ICP award for
the calendar year of Termination if Termination occurs during the first calendar
quarter. Even if the Executive receives the Executive Severance (including the
amount referred to in paragraph 1(d)(ii)) and if Termination occurs during or
after the second calendar quarter, the Executive shall be entitled to a prorated
ICP award for the calendar year of Termination which shall be determined by
multiplying his or her then current ICP standard by a fraction the numerator of
which is the number of weeks in the calendar year prior to the Termination and
the denominator of which is 52. The Executive shall accrue no ICP award
following the date of Termination. The accrued vacation pay and ICP award, if
any, shall be paid in a lump sum when the Executive Severance is paid.
(b) If the Executive becomes entitled to payment under paragraph 4(b),
the pension credit and insurance coverage provided for in paragraph 5(a) will be
for an additional 24-month period beyond the period provided in paragraph 5(a).
(c) Notwithstanding the foregoing paragraphs 5(a) and 5(b), no such
service credit or insurance coverage will be afforded by this Agreement with
respect to
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any period after the Executive's sixty-fifth birthday.
(d) In the event of a Termination, the Executive will be entitled at
Olin's expense to outplacement counseling and associated services in accordance
with Olin's customary practice at the time (or, if a Change in Control shall
have occurred, in accordance with such practice immediately prior thereto) with
respect to its senior executives who have been terminated other than for Cause.
It is understood that the counseling and services contemplated by this paragraph
5(d) are intended to facilitate the obtaining by the Executive of other
employment following a Termination, and payments or benefits by Olin in lieu
thereof will not be available to the Executive.
(e) Notwithstanding the provisions of Section 10 of the Olin Senior
Executive Pension Plan (the "Senior Plan"), if the Executive is in active
employment with Olin at the date of a Change in Control but has not attained age
55 at such date, the Executive shall (if then a Participant in the Senior Plan)
nevertheless automatically be paid the lump-sum amount called for by such
Section 10, except that such lump-sum amount will be calculated first, by
calculating the sum equal to the annual benefit which would otherwise be payable
to the Executive at age 65 under all Olin pension plans assuming the Executive
had terminated his or her employment with Olin on the date of the Change in
Control, second, by multiplying such sum by 72%, which is the current percentage
applicable in the calculation of benefits paid to employees retiring from active
service with Olin at age 55 under the early retirement provisions of the Olin
Employees Pension Plan, third, by determining the then lump-sum actuarial value
of the product resulting from the second step, and fourth, by deducting from
such lump-sum actuarial value the then lump-sum actuarial value of the
Executive's accrued annual benefits under all other Olin pension plans. The
actuarial value shall be determined as the amount needed to purchase a fixed
annuity through Metropolitan Life Insurance Company ("Metropolitan") or its
successor immediately prior to the Change in Control. In the event such annuity
is not available through Metropolitan, then Prudential Insurance Company or an
insurance company with comparable rating by A.M. Best & Company shall be
substituted for Metropolitan. A lump-sum payment under this paragraph 5(e) will
be used to reduce any payments under the Senior Plan which may become due to the
Executive thereafter. The purpose of this paragraph 5(e) is to ensure that an
Executive who is less than age 55 at the time of the Change in Control receives
a lump-sum payment which when combined with the value of the Executive's pension
benefits from all other Olin pension plans preserves the 72% age 55, subsidized
early retirement factor, rather than the actuarial reduction. Such lump-sum
payment shall be discounted by the same interest rate used by the insurance
company to determine the actuarial value to provide for the deferral of the
benefit until the Executive reaches age 55.
(f) If the Executive becomes entitled to the payment under paragraph
4(b), at the end of the period for insurance coverage provided in accordance
with paragraph 5(b), the Executive shall be entitled to continue in Olin's
medical and dental coverage (including dependent coverage) on terms and
conditions no less favorable to the Executive as in effect prior to the Change
in Control for the Executive until the Executive
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reaches age 65; provided that if the Executive obtains other employment which
offers medical or dental coverage to the Executive and his or her dependents,
the Executive shall enroll in such medical or dental coverage, as the case may
be, and the corresponding coverage provided to the Executive hereunder shall be
secondary coverage to the coverage provided by the Executive's new employer so
long as such employer provides the Executive with such coverage.
(g) If there is a Change in Control, Olin shall not reduce or diminish
the insurance coverage or benefits which are provided to the Executive under
paragraph 5(a), 5(b) or 5(f) during the period the Executive is entitled to such
coverage; provided the Executive makes the premium payments required by active
employees generally for such coverage, if any, under the terms and conditions of
coverage applicable to the Executive. Following a Change in Control, incentive
compensation plans in which the Executive participates shall contain reasonable
financial performance measures and shall be consistent with practice prior to
the Change in Control.
6. Participation in Change in Control/Section 4999 of Internal Revenue
Code
(a) In the event that the Executive participates or agrees to
participate by loan or equity investment (other than through ownership of less
than 1% of publicly traded securities of another company) in a transaction
("acquisition") which would result in an event described in paragraph 1(b)(i) or
(ii), the Executive must promptly disclose such participation or agreement to
Olin. If the Executive so participates or agrees to participate, no payments due
under this Agreement or by virtue of any Change in Control provisions contained
in any compensation or benefit plan of Olin will be paid to the Executive until
the acquiring group in which the Executive participates or agrees to participate
has completed the acquisition. In the event the Executive so participates or
agrees to participate and fails to disclose his participation or agreement, the
Executive will not be entitled to any payments under this Agreement or by virtue
of Change in Control provisions in any Olin compensation or benefit plan,
notwithstanding any of the terms hereof or thereof.
(b) Anything in this Agreement to the contrary notwithstanding, in the
event that it shall be determined that any payment or distribution by Olin to or
for the benefit of the Executive (whether paid or payable or distributed or
distributable) pursuant to the terms of this Agreement or otherwise
(collectively, the "Payments") but determined without regard to any additional
payments required under this paragraph 6(b), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended, the
Executive shall be entitled to receive an additional payment (the "Gross-Up
Payment") in an amount equal to (i) the amount of the excise tax imposed on the
Executive in respect of the Payments (the "Excise Tax") plus (ii) all federal,
state and local income, employment and excise taxes (including any interest or
penalties imposed with respect to such taxes) imposed on the Executive in
respect of the Gross-Up Payment, such that after payments of all such taxes
(including any applicable interest or penalties) on the Gross-Up Payment, the
Executive retains a portion of the Gross-Up Payment equal to the Excise Tax.
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7. Successors; Binding Agreement
(a) Olin will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of the
business or assets of Olin, by agreement, in form and substance satisfactory to
the Executive, expressly to assume and agree to perform this Agreement in the
same manner and to the same extent that Olin would be required to perform if no
such succession had taken place. Failure of Olin to obtain such assumption and
agreement prior to the effectiveness of any such succession will be a breach of
this Agreement and entitle the Executive to compensation from Olin in the same
amount and on the same terms as the Executive would be entitled to hereunder had
a Termination occurred on the succession date. As used in this Agreement, "Olin"
means Olin as defined in the preamble to this Agreement and any successor to its
business or assets which executes and delivers the agreement provided for in
this paragraph 7 or which otherwise becomes bound by all the terms and
provisions of this Agreement by operation of law or otherwise.
(b) This Agreement shall be enforceable by the Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
8. Notices. For the purpose of this Agreement, notices and all other
communications provided for herein 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 Executive:
If to the Company: Xxxx Corporation
000 Xxxxxxx 7
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Attention: Corporate Secretary
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
9. Governing Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the Commonwealth
of Virginia (without giving effect to its conflicts of law).
10. Miscellaneous. No provisions of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is agreed to
in
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writing signed by the Executive and Olin. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party
shall be deemed a waiver of similar or dissimilar provisions or conditions at
the same or at any prior or subsequent time. No agreements or representations,
oral or otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same Agreement.
12. Withholding of Taxes. Olin may withhold from any benefits
payable under this Agreement all federal, state, city or other taxes as shall be
required pursuant to any law or governmental regulation or ruling.
13. Non-assignability. This Agreement is personal in nature and
neither of the parties hereto shall, without the consent of the other, assign or
transfer this Agreement or any rights or obligations hereunder, except as
provided in paragraph 7 above. Without limiting the foregoing, the Executive's
right to receive payments hereunder shall not be assignable or transferable,
whether by pledge, creation of a security interest or otherwise, other than a
transfer by his will or by the laws of descent or distribution, and, in the
event of any attempted assignment or transfer by the Executive contrary to this
paragraph, Olin shall have no liability to pay any amount so attempted to be
assigned or transferred.
14. No Employment Right. This Agreement shall not be deemed to
confer on the Executive a right to continued employment with Olin.
15. Disputes/Arbitration.
(a) Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration at Olin's corporate
headquarters in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's award in
any court having jurisdiction; provided, however, that the Executive shall be
entitled to seek specific performance of the Executive's right to be paid during
the pendency of any dispute or controversy arising under or in connection with
this Agreement.
(b) Olin shall pay all reasonable legal fees and expenses, as they
become due, which the Executive may incur to enforce this Agreement through
arbitration or otherwise unless the arbitrator determines that Executive had no
reasonable basis for his claim. Should Olin dispute the entitlement of the
Executive to such fees and expenses, the burden of proof shall be on Olin to
establish that the Executive had no reasonable basis for his claim.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed
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and delivered as of the day and year first above set forth.
XXXX CORPORATION
By: ______________________________
Xxxxxx X. Xxxxxxx
Chairman of the Board, President
and Chief Executive Officer
_________________________
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