EXHIBIT 10.25
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AGREEMENT
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WHEREAS, AMCOL International Corporation (the "Company") considers it
essential and in the best interests of the Company and its shareholders to
xxxxxx the continued employment of its key management personnel;
WHEREAS, Xxxx X. Xxxxxxxx ("Employee") is considered a key management
employee, currently serving as Senior Vice President, Chief Financial Officer
and Treasurer of AMCOL International Corporation.
WHEREAS, the Company desires to assure the future continuity of Employee's
services in the event of any actual or threatened "Change in Control" (as
defined in Section 6 below) of the Company.
IT IS THEREFORE AGREED AS FOLLOWS:
1. Effect of Agreement. This Agreement shall be effective and binding
immediately upon its execution. However, except as specifically provided herein,
this Agreement shall not alter materially Employee's duties and obligations to
the Company and the remuneration and benefits which Employee may reasonably
expect to receive from the Company in the absence of a Change in Control.
2. Employment On and After Change in Control. Provided that the employee
is an employee of the Company immediately prior to a Change in Control, the
Company shall employ Employee, and Employee shall accept such employment,
effective upon such Change in Control for a period of thirty-six (36) months
after said Change in Control subject to the terms and conditions stated herein.
For purposes of this paragraph only, employment by a current or former
subsidiary of the Company, is the same as employment by the Company on or after
a Change in Control.
3. Duties After Change in Control. Employee agrees that during the term
of his employment with the Company after a Change in Control, he shall perform
the duties described herein and such other duties for the Company and its
subsidiaries consistent with his experience and training as the Board of
Directors of the Company (the "Board") or the Board's representatives shall
determine from time to time, which duties shall be at least substantially equal
in status, dignity and character to his duties at the date hereof. He shall also
have the title of Senior Vice President, Chief Financial Officer and Treasurer
of AMCOL International Corporation. Employee further agrees to devote his entire
working time and attention to the business of the Company and/or its current or
former subsidiaries and use his best efforts to promote such business.
4. Compensation Prior to a Change in Control. Prior to a Change in
Control the Company agrees to pay Employee compensation for his services in an
amount, and to provide him with life insurance, disability, health and other
benefits, as agreed between Employee and the Company from time to time. For the
purpose of this Section, compensation does not include any bonus or other
incentive compensation plan or stock purchase plan, which may vary from year to
year at the discretion of the Company.
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5. Termination of Employment Prior to a Change in Control. Employee shall
be entitled to terminate his employment prior to a Change in Control at any time
upon sixty (60) days prior written notice. The Company shall be entitled to
terminate Employee's employment at any time prior to a Change in Control with or
without cause upon sixty (60) days prior written notice (or the payment of
salary in lieu thereof). This Section shall not be construed to reduce any
accrued benefits payable in connection with any termination of Employee's
employment prior to a Change in Control.
Nothing expressed or implied in this Agreement shall create any right or
duty on the part of the Company or Employee to have Employee remain in the
employment of the Company prior to a Change in Control.
6. Termination of Employment On or After a Change in Control.
(a) For purposes of this Agreement the term "Change in Control" means
the change in the legal or beneficial ownership of fifty-one percent (51%)
of the shares of the Company's common stock within a six-month period other
than by death or operation of law, or the sale of ninety percent (90%) or
more of the Company's aggregate assets within a six-month period. Sale of
the Company's stock in a subsidiary or a subsidiary's assets shall not be
considered a Change in Control.
(b) Employee's employment on and after a Change in Control may be
terminated with just cause by the Company at any time upon not less than
ten (10) days prior written notice. Prior to termination for just cause on
and after a Change in Control, the Board of Directors shall by majority
vote have declared that Employee's termination is for just cause
specifically stating the basis for such determination. In the event such a
termination occurs, the provisions of Section 9(a) shall apply.
Employee's employment may be terminated on or after a Change in
Control without just cause pursuant to the constructive termination
procedures described in the next paragraph or by the Company giving
Employee not less than thirty (30) days prior written notice. In the event
Employee's employment is terminated pursuant to the preceding sentence:
(i) the provisions of Section 9(b) below shall apply; and
(ii) although Employee's employment term shall be deemed
terminated at the end of such notice period (or, in the case
of a constructive termination described in the next
paragraph, as of the date Employee notifies the Company of
such termination), such termination shall in no way affect
the term of this Agreement or Employee's duties or other
obligations.
For purposes of this Section 6(b), Employee shall be considered as
having been terminated by the Company on or after a Change in Control for
other than just cause
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provided that he has notified the Company of any of the following within
thirty (30) days of the occurrence thereof:
(i) the assignment to Employee of any duties of lesser status,
dignity and character than his duties immediately prior to
the effective date of the Change in Control or a
substantial reduction in the nature or status of his
responsibilities from those in effect immediately prior to
the effective date of the Change in Control;
(ii) a post-Change in Control reduction by the Company in
Employee's annual base salary or bonus or incentive plan
(as in effect immediately prior to the effective date of
the Change in Control);
(iii) relocation of Employee's office to a location which is
more than 50 miles from the location in which Employee
principally works for the Company immediately prior to the
effective date of the Change in Control; the relocation of
the appropriate principal executive office of the Company
or the Company's operating division or subsidiary for
which Employee performed the majority of his services for
the Company during the year prior to the effective date of
the Change in Control to a location which is more than 50
miles from the location of such office immediately prior
to such date; or his being required by the Company, in
order to perform duties of substantially equal status,
dignity and character to those duties he performed
immediately prior to the effective date of the Change in
Control, to travel on the Company's business to a
substantially greater extent than is consistent with his
business travel obligations as of such date; or
(iv) the failure of the Company to continue to provide Employee
with benefits substantially equivalent to those enjoyed by
him under any of the Company's life insurance, medical,
health and accident or disability plans in which he was
participating immediately prior to the effective date of
the Change in Control, the taking of any action by the
Company which would directly or indirectly materially
reduce any of such benefits or deprive him of any material
fringe benefit enjoyed by him immediately prior to
effective date of the Change in Control, or the failure of
the Company to provide him with at least the number of
paid vacation days to which he is entitled on the basis of
years of service under the Company's normal vacation
policy in effect immediately prior to the effective date
of the Change in Control.
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v. the elimination of the title of Sr. Vice-President of the
Company alone does not constitute a termination for those
individuals that remain presidents of subsidiaries.
(c) In the event Employee's employment is terminated on or after a
Change in Control in any manner not described in Section 6(b) above:
(i) the provisions of Section 9(b) shall not apply and
Employee shall instead receive the sums and benefits
described in Section 9(a); and
(ii) such termination shall in no way affect the term of this
Agreement or Employee's duties or other obligations.
(d) Any termination of employment of Employee following the
commencement of any discussions by a shareholder or group of shareholders
owning legally or beneficially more than 20% of the common stock or an
officially designated representative of the Board of Directors with a third
party that results within 180 days in a Change in Control shall (unless
such termination is for just cause or wholly unrelated to such discussions)
be deemed to be a termination of Employee on and after a Change in Control
for purposes of this Agreement.
7. Notice of Termination. Any termination by the Company or assertion of
termination by Employee shall be communicated by written notice of termination
to the other party at the following address:
AMCOL International Corporation
One North Arlington
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
Attn: Chief Executive Officer
8. Disability. If as a result of Employee's incapacity due to physical or
mental illness, he shall have been absent from his duties with the Company for
one hundred eighty (180) days within any twelve-(l2)-consecutive-month period
and within thirty (30) days after written notice of the Company's intention to
terminate his employment is given, Employee shall not have returned to the
performance of his duties with the Company substantially on a full-time basis,
the Company may terminate his employment for disability. This shall not
constitute a termination for the purposes of obtaining benefits pursuant to
Section 9.
9. Benefits Upon Termination And Leave Of Employment On or After Change in
the Control.
(a) If Employee is terminated for just cause on or after a Change in
Control, he shall only receive the accrued sums and benefits payable to him
through the date he is terminated; the provisions of Section 9(b) below
shall not be applicable in such case and
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Employee shall not receive (or shall cease receiving) the payments and
benefits described in Section 9(b).
(b) Subject to Employee's compliance with the provisions of this
Agreement, if Employee is terminated during the thirty-six (36) month
period beginning on and continuing after a Change in Control other than for
just cause (either at the discretion of the Company's management or
constructively by the operation of Section 6), he shall receive the
following payments and benefits in lieu of any other sums or benefits
otherwise, including severance or severance benefit payments payable to him
by the Company. Any payments in accordance with any special retention or
non-competition agreements, if any, shall be made in accordance with their
terms.
(i) all then accrued pay, benefits, executive compensation and
fringe benefits, including (but not limited to) pro rata
bonus and incentive plan earnings;
(ii) medical, health and disability benefits which are
substantially similar to the benefits the Company is
providing him as of the date his employment is terminated
for a period of thirty-six (36) months thereafter; and
(iii) one dollar less than three (3) times his base period
compensation.
The foregoing payments and benefits shall be deemed compensation
payable for the duties to be performed by Employee pursuant to this
Agreement. For purposes of this Agreement, (A) Employee's "base period
compensation" is the average annual "compensation" (as defined below) which
was includable in his gross income for his base period (i.e., his most
recent five taxable years ending before the date of the Change in Control);
and (B) if Employee's base period includes a short taxable year or less
than all of a taxable year, compensation for such short or incomplete
taxable year shall be annualized before determining his average annual
compensation for the base period. (In annualizing compensation, the
frequency with which payments are expected to be made over an annual period
shall be taken into account. Thus, any amount of compensation for such a
short or incomplete taxable year that represents a payment that would not
be made more than once per year shall not be annualized). For purposes of
Section 9(iii) and the definitions pertaining to said Section, Employee's
"compensation" is the compensation which was payable to him by the Company
or a related entity determined without regard to the following Sections of
the Internal Revenue Code of 1986, as amended (the "Code"): 125 (cafeteria
plans), 402(a)(8) (cash or deferred arrangements), and in the case of
employer contributions made pursuant to a salary reduction agreement,
403(b) (tax sheltered annuities).
Except for the benefits described in Section 9(b)(ii) above, the sums
due pursuant to this Section 9(b) shall be paid in up to three (3) annual
installments commencing thirty (30) days after the sums become due. If on
or after the date any payment becomes due
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hereunder the Company at any time has a funded debt-to-total capitalization
ratio which equals or exceeds 1.1, the Company shall secure its payment of
the remaining annual installments with a letter of credit or other security
instrument as shall be reasonably acceptable to Employee. Such letter of
credit or other security instruments shall provide Employee with the
ability to receive the remaining installment(s) only if his payment is
delinquent. All sums due shall be subject to appropriate withholding and
statutory requirements. Employee shall not be required to mitigate the
amount of any payment provided for in this Section 9(b) by seeking other
employment or otherwise. Notwithstanding anything stated in this Section
9(b) to the contrary, the Company shall not be required to provide medical,
health and/or disability benefits to the extent such benefits would
duplicate benefits received by Employee in connection with his employment
with any new employer.
Notwithstanding anything stated in this Agreement to the contrary, if
the amounts which are payable and the benefits which are provided to
Employee under this Agreement, either alone or together with other payments
which Employee has a right to receive from the Company or any of its
affiliates, would constitute a "parachute payment" (as defined in Code
Section 280G), such amounts and benefits shall be reduced, as necessary, to
the largest amount as will result in no portion of said amounts and
benefits being either not deductible as a result of Code Section 280G or
subject to the excise tax imposed by Code Section 4999. The determination
of any reduction in said amounts and benefits pursuant to the foregoing
proviso shall be made by the Company in good faith, and such determination
shall be conclusive and binding on Employee. The amounts provided to
Employee under this Agreement in connection with a Change in Control, if
any, shall be deemed allocated to such amounts and/or benefits to be paid
and/or provided as the Company's Board of Directors in its sole discretion
shall determine.
10. Special Situations. The parties recognize that under certain
circumstances a Change in Control may occur under conditions which make it
inappropriate for Employee to receive the termination benefits or protection set
forth in this Agreement. Therefore, in the event that a Change in Control occurs
for any one of the following reasons, the provisions of Sections 2, 6 and 9
shall not apply:
(a) the purchase of more than fifty percent (50%) of the stock of the
Company by an employee stock ownership plan or similar employee benefit
plan of which Employee is a participant;
(b) the purchase of more than fifty percent (50%) of the stock or
ninety percent (90%) of the assets of the Company by a group of individuals
or entities including Employee as a member or participant, including but
not limited to those transactions commonly known as a leveraged or other
forms of management buy-outs; or
(c) A transaction or series of transactions involving the Company,
whether by way of a merger, exchange, sale or other method, where the party
ultimately acquiring the Company's bentonite business offers to the
Company's shareholders the opportunity to buy shares of its capital stock
as part of the transaction.
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11. Dispute. Any dispute arising under this Agreement shall be promptly
submitted to arbitration under the Rules of the American Arbitration
Association. An arbitrator is to be mutually agreed upon by the parties or upon
failure of agreement, designated by the American Arbitration Association.
12. Other Agreements. Except to the extent expressly set forth herein,
this Agreement shall not modify or lessen any benefit or compensation to which
Employee is entitled under any agreement between Employee and the Company or
under any plan maintained by the Company in which he participates or
participated. Benefits or compensation shall be payable thereunder, if at all,
according to the terms of the applicable plan(s) or agreement(s). The terms of
this Agreement shall supersede any existing agreement between Employee and the
Company executed prior to the date hereof to the extent any such Agreement is
inconsistent with the terms hereof. Payments pursuant to this Agreement are in
lieu of any severance payments.
13. Successors; Binding Agreement. The Company will require any successor
(whether direct or indirect by purchase, merger, consolidation or otherwise, to
all or substantially all of the business and/or assets of the Company) to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.
This Agreement shall inure to the benefit of and be enforceable by
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
14. Miscellaneous. This Agreement may not be modified or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by
Employee and such officers of the Company as may be specifically designated by
its Board for that purpose. Except for any failure to give the thirty (30) day
notice described in Section 6(b) above, the failure of either party to this
Agreement to object to any breach by the other party or the non-breaching
party's conduct or conduct forbearance shall not constitute a waiver of that
party's rights to enforce this Agreement. 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 any subsequent breach by such other party or any
similar or dissimilar provisions or conditions at the same or 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 expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Illinois.
15. Survival. The obligations of the parties under this Agreement shall
survive the term of this Agreement.
16. Term of Agreement. The term of this Agreement shall commence on April
15, 2001 and end on April 14, 2004; provided, however, that in the event
Employee's employment is terminated while this Agreement is in force, this
Agreement shall terminate when the Company has made all payments to Employee
required by Section 9 hereof and Employee has complied with the duties and
obligations described herein.
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Date: _______________
EMPLOYEE AMCOL INTERNATIONAL CORPORATION
______________________________ By _________________________________
Xxxx X. Xxxxxxxx
Its: _________________________________
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