AGREEMENT
This Agreement (the "Agreement") is entered into on March 31, 2000,
effective as of December 1, 1999 between AMCOL International Corporation (the
"Company") and Xxxxx X. Xxxxxx, Xx. ("Employee").
WHEREAS, 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, Employee is considered a key management employee, currently
serving as Vice President of the Company and President of its Volclay
International Corporation subsidiary; and
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 as of
December 1, 1999. 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 twenty-four (24) months after said Change
in Control subject to the terms and conditions stated herein.
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 in Section 12 below 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 Vice President of the Company and such other titles as he may
have as of the Change in Control. Employee further agrees to devote his entire
working time and attention to the business of the Company and its subsidiaries
and use his best efforts to promote such business.
4. Compensation Prior to 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 set by 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.
5. Termination of Employment Prior to a Change of 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 able 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 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 (6) month period other than by
death or operation of law, or the sale of ninety percent (90%) or more of the
Company's assets within a six (6) month period.
(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 Sections 9(a) and 12 below 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 and
obligations under Section 12 below.
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 provided that he has notified the Company of any of the following
within ten (10) days of the occurrence thereof:
(i) the assignment to Employee of any duties of substantially lesser
status, dignity and character than the duties as a Vice President of
the Company 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 35
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 35 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.
(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 obligations under Section 12 below.
(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 twenty percent (20%) of the common stock or an officially
designated representative of the Board of Directors with a third party that
results within one hundred eighty (180) days in a Change in Control shall
(unless such termination is for 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, Xxxxxxxx 00000
Attention: Chief Executive Officer
Xx. Xxxxx X. Xxxxxx, Xx.
AMCOL International Corporation
One North Arlington
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxx Xxxxxxx, Xxxxxxxx 00000
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 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 Section 12(a)
below, if Employee is terminated during the twenty-four (24) 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 payable to him by the Company:
(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 of his employment is terminated for a period of twenty-four
(24) months thereafter; and
(iii) one dollar less than two 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 Section 12
below. 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 (5) 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). The sum payable
to Employee pursuant to Section 9(b)(iii) shall in any and all cases be
reduced by any compensation which Employee receives, excluding stock option
or other stock incentive bonus plan compensation from the date of the
Change in Control until the termination date. 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), 402(h)( 1 )(B) (elective
contributions to simplified employee pensions), 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 two (2) annual
installments commencing thirty (30) days after the sums become due. 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, however, the amount of any payment or benefit provided for in
this Section 9(b) shall be reduced by no more than 50% by any compensation
earned by Employee as a result of employment by another employer and 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; or
(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.
11. Dispute. Any dispute arising under this Agreement (except Section 12)
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. Non-Competition, Non-Solicitation, and Confidentiality.
(a) In consideration of this Agreement and other good and valuable
consideration, Employee agrees that for so long as he is employed by the Company
and for twelve (12) months thereafter he shall not own manage, operate, control,
be employed by or otherwise engage in any competitive business. Employee's
agreement pursuant to the preceding sentence shall be in addition to any other
agreement or legal obligation he may have with or to the Company. For purposes
of the preceding sentence, a "competitive business" is any business engaged in
the production, refinement or sale of Bentonite and/or any business conducted by
the Company, its affiliates or any subsidiaries thereof as of the date
Employee's employment is terminated. A business which is conducted by the
Company, its affiliates or any subsidiaries which is subsequently sold by the
Company is not a competitive business as of the date such business is sold. An
"affiliate" of the Company' is any company which either controls, is controlled
by or is under common control with the Company. The phrase "any business
conducted by the Company, its affiliates, joint ventures or any subsidiaries
thereof' includes not only current businesses but also any new products, product
lines or use of processes under development, consideration or investigation on
the date Employee's employment with the Company is terminated.
Employee also agrees that during the twelve (12) month period described in
the first sentence of this Section 12(a) he will not directly or indirectly, on
behalf of himself or any other person or entity, make a solicitation or conduct
business, with any customer or potential customer of the Company with which he
had contact while employed by the Company, its affiliates and/or any
subsidiaries thereof, with respect to any products or services which are
competitive with any business conducted by the Company, its affiliates or any
subsidiaries thereof. For purposes of the preceding sentence, a "customer" is
any person or entity that has purchased goods or services from the Company, its
affiliates or any subsidiaries thereof within the twelve (12) month period
ending on the date Employee's employment is terminated. A "potential customer"
is any person or entity that the Company
solicited for business within twelve (12) months prior to the date Employee's
employment with the Company is terminated.
The Company and Employee recognize that his responsibilities have included
product development, sales and marketing of bentonite clay, xxxxxx'x earth,
nanocomposites and related products to various markets including without
limitation the foundry, agricultural, plastic and well drilling industries and
establishing contacts and business relationships on behalf of the Company in the
domestic and international markets. Employee's contacts on behalf of the Company
represent substantial assets of the Company which are entitled to protection. In
recognition of this situation, the covenants set forth in this Section 12 shall
apply to competitive businesses and solicitation in the United States,
Australia, Japan, China, India, Thailand, Egypt, Canada, Mexico and those other
countries of Europe, North America, South America and Asia in which the Company,
its affiliates, joint ventures and subsidiaries are located or have conducted
$100,000 or more of business during the twelve (12) month period ending on the
date Employee's employment with the Company terminated.
Before and forever after his termination or resignation, Employee shall
keep confidential and refrain from utilizing or disseminating any confidential,
proprietary or trade secret information of the Company for any purpose other
than furthering the business interests of the Company.
(b) During Employee's employment hereunder and during one (1) year
following his resignation or the termination of his employment hereunder for any
reason, Employee will not induce or attempt to influence any present or future
employee of the Company, its affiliates or any subsidiaries thereof to leave its
employ.
(c) In consideration of the covenant not to compete the Company will pay
one/twelfth (1/12) of Employee's annual base salary each month for a total of
twelve (12) months. The Company may at its sole discretion for any reason
whatsoever not make these payments if it so elects and the covenant not to
compete will end at the end of the month in which the Company elects to cease
payment.
13. 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.
14. 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.
15. Injunction. The remedy at law for any breach of Section 12 will be
inadequate and the Company, its affiliates and any subsidiaries thereof would
suffer continuing and irreparable injury to their business as a direct result of
any such breach. Accordingly, notwithstanding anything stated herein, if
Employee shall breach or fail to perform any term, condition or duty contained
in Section 12 hereof, then, in such event, the Company shall be entitled to
institute and prosecute proceedings in any court of competent jurisdiction,
either in law or in equity, to obtain the specific performance thereof by
Employee or to seek a temporary restraining order or injunctive relief, without
any' requirement to show actual damages or post bond, to restrict Employee from
violating the provisions of Section 12; however, nothing herein shall be
construed to prevent the Company' seeking such other remedy in the courts, in
case of any breach of this Agreement by Employee, as the Company may elect or
invoke. If court proceedings are instituted by the Company to enforce Section 12
hereof, and the Company is the prevailing party, the Company shall receive, in
addition to any damages awarded, reasonable attorneys' fees, court costs and
ancillary expenses.
16. 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 ten (10) 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.
17. Severability. The parties hereto intend this Agreement to be enforced
to the maximum extent permitted by law. In the event any provision of this
Agreement is deemed to be invalid or unenforceable by any court of competent
jurisdiction, such provisions shall be deemed to be restricted in scope or
otherwise modified to the extent necessary to render the same valid and
enforceable. In the event the provisions of Section 12 cannot be modified or
restricted so as to be valid and enforceable, then the same as well as the
Company's obligation to make any payment or transfer any benefit to Employee in
connection with any termination of Employee's employment shall be deemed excised
from this Agreement, and this Agreement shall be construed and enforced as if
such provisions had originally been incorporated herein as so restricted or
modified or as if such provisions had not originally been contained herein, as
the case may be. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement which shall remain in full force and effect.
18. Survival. The obligations of the parties under this Agreement shall
survive the term of this Agreement.
19. Term of Agreement. The term of this Agreement shall commence on
December 1, 1999 and end on December 1, 2002; 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 in Section 12 hereof (all of which duties and obligations
shall specifically survive the termination of the Employee's employment). To the
extent necessary for the Company's enforcement of the provisions of Section 12
above (but only for such purpose), Employee's employment term shall be deemed to
continue through the end of the Agreement term.
EMPLOYEE AMCOL INTERNATIONAL CORPORATION
/s/ Xxxxx X. Xxxxxx By: /s/ Xxxxx Xxxxxx
Xxxxx X. Xxxxxx Its: President
