EXHIBIT 10.20
September 1, 1995
Dear ---------------------:
This Agreement is to assure you that in the event you become entitled
to payments by operation of the Employment Agreement dated September 1,
1995 ("Employment Agreement") between you and IMC Global Inc.
("Global") due to a "Change in Control" (as that term is defined in
Attachment A to this Agreement) of Global, and if any of the payments
to be made under the Employment Agreement or any payments which are
construed as being made under the Employment Agreement, ("Agreement
Payments") will be subject to the tax ("Excise Tax") imposed by Section
4999 of the Internal Revenue Code of 1986, as amended ("Code") (or any
similar tax that may hereafter be imposed), Global shall pay to you at
the time specified in Paragraph (c) below an additional amount ("Gross-
up Payment") such that the net amount retained by you, after deduction
of any Excise Tax on the Total Payments (as hereinafter defined) and
any federal, state and local income tax and Excise Tax upon the Gross-
up payment provided for by this paragraph, but before deduction for any
federal, state or local income tax on the Agreement Payments, shall be
equal to the Total Payments.
a) For purposes of determining whether any of the Agreement
Payments will be subject to the Excise Tax and the amount of such
Excise Tax, (i) any other payments or benefits received or to be
received by you in connection with a change in control (as that term
is defined in Attachment A) of Global or your termination of
employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with Global, any person whose
actions result in a change of control of Global or any person
affiliated with Global or such person) (which, together with the
Agreement Payments, shall constitute the "Total Payments") shall be
treated as "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and all "excess parachute payments" within
the meaning of Section 280G(b)(1) of the Code shall be treated as
subject to the Excise Tax, unless in the opinion of tax counsel
selected by Global's independent auditors such other payments or
benefits (in whole or in part) do not constitute parachute payments,
or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(4) of the Code in excess of the base
amount within the meaning of Section 280G(b)(3) of the Code or are
otherwise not subject to the Excise Tax, (ii) the amount of the
September 1, 1995
Page 2
Total Payments which shall be treated as subject to the Excise Tax
shall be equal to the lesser of (a) the total amount of the Total
Payments or (b) the amount of excess parachute payments within the
meaning of, Section 280G(b)(1) of the Code (after applying clause
(i), above), and (iii) the value of any non-cash benefits or any
deferred payment or benefit shall be determined by Global's
independent auditors in accordance with the principles of Sections
280G(d)(3) and (4) of the Code.
b) For purpose of determining the amount of the Gross-up
Payment, you shall be deemed to pay federal income taxes at the
highest marginal rate of federal income taxation for the calendar
year in which the Gross-up Payment is to be made and the applicable
state and local income taxes at the highest marginal rate of
taxation for the calendar year in which the Gross-up Payment is to
be made, net of the maximum reduction in federal income taxes which
could be obtained from deduction of such state and local taxes. In
the event that the Excise Tax is subsequently determined to be less
than the amount taken into account hereunder at the time the Gross-
up Payment is made, you shall repay to Global at the time that the
amount of such reduction in Excise Tax is finally determined the
portion of the Gross-up Payment attributable to such reduction (plus
the portion of the Gross-up Payment attributable to the Excise Tax
and federal and state and local income tax imposed on the portion of
the Gross-up Payment being repaid by you if such repayment results
in a reduction in Excise Tax and/or a federal and state and local
income tax deduction), plus interest on the amount of such repayment
at the rate provided in Section 1274(b)(2)(B) of the Code. In the
event that the Excise Tax is determined to exceed the amount taken
into account hereunder at the time the Gross-up Payment is made
(including by reason of any payment the existence or amount of which
cannot be determined at the time of the Gross-up Payment), Global
shall make an additional Gross-up Payment in respect of such excess
(plus any interest payable with respect of such excess) at the time
that the amount of such excess is finally determined.
c) The Gross-up Payment or portion thereof provided for in
Paragraphs (a) and (b) above shall be paid not later than the
thirtieth day following payment of any amounts under your Employment
Agreement, provided, however, that if the amount of such Gross-up
Payment or portion thereof cannot be finally determined on or before
such day, Global shall pay to you on such day an estimate, as
determined in good faith by Global, of the minimum amount of such
payments and shall pay the remainder of such payments (together with
interest at the rate provided in Section 1274(b)(2)(B) of the Code)
as soon as the amount thereof can be determined, but in no event
September 1, 1995
Page 3
later than the forty-fifth day after payment of any amounts under
the Employment Agreement.
In the event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess shall
constitute a loan by Global to you, payable on the fifth day after
demand by Global (together with interest at the rate provided in
Section 1274 (b)(2)(B) of the Code).
All Gross-up Payments will be paid to you from the Trust Agreement
between IMC Fertilizer, Inc. and Wachovia Bank Trust Company, N.A.
which has been established to protect payment obligations of Global
under this Agreement. Any repayment due Global from you as a result
of the circumstances described in the last sentence of the preceding
paragraph shall be made by you after you have received such excess
amounts from the Trust.
This Agreement supersedes all previous agreements entered into
between you and Global concerning Gross-up Payments.
Global is pleased to be able to provide you with this additional
assurance of economic protection in the event of a change in
control.
Please sign, date and return one original of this letter.
Sincerely yours,
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Chairman and Chief Executive Officer
I have read this Agreement and
understand and accept its terms.
Executive
Date-------------------------
September 1, 1995
Page 4
ATTACHMENT A
DEFINITION OF A CHANGE IN CONTROL
"Change in Control" shall mean, and be deemed to have occurred as of
the first day that any one or more of the following conditions have
been satisfied.
(1) the acquisition by any individual, entity or group (a
"Person"), including any "person" within the meaning of Section 13
(d)(3) or 14(d)(2) of the Exchange Act, of beneficial ownership
within the meaning of Rule 13d-3 promulgated under the Exchange
Act, of 15% or more of either (i) the then outstanding shares of
common stock of the Company (the "Outstanding Company Common
Stock") or, (ii) the combined voting power of the then outstanding
securities of the Company entitled to vote generally in the
election of directors (the "Outstanding Company Voting
Securities"); excluding, however, the following: (A) any
acquisition directly from the Company (excluding any acquisition
resulting from the exercise of an exercise, conversion or exchange
privilege unless the security being so exercised, converted or
exchanged was acquired directly from the Company); (B) any
acquisition by the Company, (C) any acquisition by an employee
benefit plan (or related trust) sponsored or maintained by the
Company or any corporation controlled by the Company or (D) any
acquisition by any corporation pursuant to a transaction which
complies with clauses (i), (ii) and (iii) of subsection (3) of
this definition;
(2) individuals who, as of the date hereof, constitute the
Board of Directors (the "Incumbent Board") cease for any reason to
constitute at least a majority of such Board; provided that any
individual who becomes a director of the Company subsequent to the
date hereof whose election, or nomination for election by the
Company's stockholders, was approved by the vote of at least a
majority of the directors then comprising the Incumbent Board
shall be deemed a member of the Incumbent Board; and provided
further, that any individual who was initially elected as a
director of the Company as a result of an actual or threatened
election contest,
as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act, or any other actual or
threatened solicitation of proxies or consents by or on behalf of
any Person other than the Board shall not be deemed a member of
the Incumbent Board;
September 1, 1995
Page 5
(3) approval by the stockholders of the Company of a
reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company (a "Corporate Transaction"); excluding, however, a
Corporate Transaction pursuant to which (i) all or substantially
all of the individuals or entities who are the beneficial owners,
respectively, of the Outstanding Company Common Stock and the
Outstanding Company Voting Securities immediately prior to such
Corporate Transaction will beneficially own, directly or
indirectly, more than 60% of, respectively, the outstanding shares
of common stock, and the combined voting power of the outstanding
securities of such corporation entitled to vote generally in the
election of directors, as the case may be, of the corporation
resulting from such Corporate Transaction (including, without
limitation, a corporation which as a result of such transaction
owns the Company or all or substantially all of the Company's
assets either directly or indirectly) in substantially the same
proportions relative to each other as their ownership, immediately
prior to such Corporate Transaction, of the Outstanding Company
Common Stock and the Outstanding Company Voting Securities, as the
case may be, (ii) no Person (other than: the Company; the
corporation resulting from such Corporation Transaction; and any
Person which beneficially owned, immediately prior to such
Corporate Transaction, directly or indirectly, 25% or more of the
Outstanding Company Common Stock of the corporation resulting from
such Corporate Transaction or the combined voting power of the
outstanding securities of such corporation entitled to vote
generally in the election of directors, and (iii) individuals who
were members of the Incumbent Board will constitute at least a
majority of the members of the Board of Directors of the
corporation resulting from such Corporate Transaction; or
(4) approval by the stockholders of the Company of a plan of
complete liquidation or dissolution of the Company.
