FORM OF CHANGE IN CONTROL SEVERANCE AGREEMENT (Chairman, President and CEO and Senior Vice Presidents)
EXHIBIT
10.1
FORM
OF
(Chairman,
President and CEO and Senior Vice Presidents)
This
AGREEMENT is by and between Harsco Corporation, a Delaware corporation
(the “Company”), and _________________ (the “Executive”), dated as of the __ day
of _______, 200__.
WHEREAS,
the Company recognizes that the current business environment makes it difficult
to attract and retain highly-qualified executives unless a certain degree of
security can be offered to such executives against organizational and personnel
changes which frequently follow Changes in Control (as defined below) of a
corporation; and
WHEREAS,
the Board of Directors recognizes the long and valued service which the
Executive has provided as an officer of Harsco and considers the Executive
to be
an important resource which the Company desires to retain; and
WHEREAS,
the Company desires to assure fair treatment of its key executives in the event
of a Change in Control and to allow them to make critical career decisions
without undue time pressure and financial uncertainty, thereby increasing their
willingness to remain with the Company notwithstanding the outcome of a possible
Change in Control transaction; and
WHEREAS,
the Company recognizes that its key executives will be involved in evaluating
or
negotiating any offers, proposals, or other transactions which could result
in
Changes in Control of the Company and believes that it is in the best interests
of the Company and its shareholders that such key executives be in a position,
free from personal financial and employment considerations, to be able to assess
objectively and pursue aggressively the interests of the Company’s shareholders
in making these evaluations and carrying on such negotiations; and
WHEREAS,
the Board of Directors (the “Board”) of the Company believes it is essential to
provide the Executive with compensation arrangements upon a Change in Control
which provide the Executive with individual financial security and which are
competitive with those of other corporations, and in order to accomplish these
objectives, the Board has caused the Company to enter into this Agreement;
and
WHEREAS,
the Company and the Executive have previously entered into an agreement, dated
_____________ (the “Prior Agreement”) regarding compensation to be paid to the
Executive in certain circumstances, including following a Change in Control;
and
WHEREAS,
the Company and the Executive desire to replace and supersede the Prior
Agreement with this Agreement;
NOW
THEREFORE, the parties, for good and valuable consideration and intending to
be
legally bound, agree as follows:
1. |
Certain
Definitions.
|
(a) |
The
“Term of the Agreement” is the period commencing on the date hereof and
ending on the third anniversary of such date provided,
however,
that (i) commencing on the date one year after the date hereof, and
on
each annual anniversary of such date (such date and each annual
anniversary thereof is hereinafter referred to as the “Renewal Date”), the
Term of the Agreement shall be automatically extended so as to terminate
three years from such Renewal Date, unless at least 60 days prior
to the
Renewal Date the Company shall give notice that the Term of the Agreement
shall not be so extended; and (ii) if a Change in Control occurs
during
the Term of the Agreement, the Term of the Agreement will expire
on the
last day of the Protection Period (as defined herein); and (iii)
if, prior
to a Change in Control, the Executive ceases for any reason to be
an
officer of the Company, thereupon without action, the Term of the
Agreement shall be deemed to have expired and this Agreement will
immediately terminate and be of no further
effect.
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(b) |
The
“Effective Date” shall be the first date during the “Term of the
Agreement” as defined in Section 1(a) on which a Change in Control occurs.
Anything in this Agreement to the contrary notwithstanding, if the
Executive’s employment with the Company is terminated prior to the date on
which a Change in Control occurs, and it is reasonably demonstrated
that
such termination (1) was at the request of a third party who has
taken
steps reasonably calculated to effect a Change in Control or (2)
otherwise
arose in connection with or anticipation of a Change in Control,
then for
all purposes of this Agreement the “Effective Date” shall mean the date
immediately prior to the date of such termination.
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(c) |
A
reference herein to a section of the Internal Revenue Code of 1986,
as
amended (the “Code”) or a subsection thereof shall be construed to
incorporate reference to any section or subsection of the Code enacted
as
a successor thereto, any applicable proposed, temporary or final
regulations promulgated pursuant to such sections and any applicable
interpretation thereof by the Internal Revenue Service.
|
(d) |
“Present
Value,” for purposes of this Agreement, shall be determined in accordance
with Section 280G(d) (4) of the Code as of the date specified for
such
determination, applying a discount rate, compounded no less
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2
frequently
than monthly, that is equivalent to the rate specified for such
determination.
|
(e) |
A
reference herein to a section of the Securities Exchange Act of 1934
(the
“Exchange Act”) or any Rule promulgated thereunder shall be construed to
incorporate reference to any section of the Exchange Act or any Rule
enacted or promulgated as a successor thereto.
|
2. |
Change
in Control.
For the purpose of this Agreement, a “Change in Control” shall mean:
|
(a) |
The
acquisition (other than from the Company) by any person, entity or
“group,” within the meaning of Section 13(d)(3) or 14(d)(2) of the
Exchange Act (a “Person”) (excluding,
for this purpose, the Company or its subsidiaries, or any employee
benefit
plan of the Company or its subsidiaries which acquires beneficial
ownership of voting securities of the Company) of beneficial ownership
(within the meaning of Rule 13d-3 promulgated under the Exchange
Act) of
20% or more of either the then outstanding shares of common stock
or the
combined voting power of the Company’s then outstanding voting securities
entitled to vote generally in the election of directors (the “Voting
Stock”); provided,
however,
that a Change in Control will not be deemed to have occurred if a
Person
becomes the beneficial owner of 20% or more of the Voting Stock as
a
result of a reduction in the number of shares of Voting Stock outstanding
pursuant to a transaction or series of transactions that is approved
by a
majority of the Incumbent Board (as defined below) unless and until
such
Person thereafter becomes the beneficial owner of any additional
shares of
Voting Stock of the Company representing 1% or more of the
then-outstanding Voting Stock of the Company, other than as a result
of a
stock dividend, stock split or similar transaction effected by the
Company
in which all holders of Voting Stock are treated equally; or
|
(b) |
Individuals
who, as of the date hereof, constitute the Board (the “Incumbent Board”)
cease for any reason to constitute at least a majority of the Board,
provided that any person becoming a director subsequent to the date
hereof
whose election, or nomination for election by the Company’s stockholders,
or appointment, was approved by a vote of at least a majority of
the
directors then comprising the Incumbent Board (either by a specific
vote
or by approval of the proxy statement of the Company in which such
person
is named as a nominee for director, without objection to such nomination
and other than an election or nomination of an individual whose initial
assumption of office is in connection with an actual or threatened
election contest relating to the election of the directors of the
Company,
as such terms are used in Rule 14a-11 of Regulation 14A promulgated
under
the Exchange Act) shall be, for purposes of this Agreement, considered
as
though such person were a member of the Incumbent Board; or
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3
(c) |
The
consummation of a reorganization, merger or consolidation, or sale
or
other disposition of all or substantially all of the assets of the
Company
or the acquisition of the stock or assets of another corporation
or other
transaction (each, a “Business Transaction”) with respect to which, in any
such case, the persons who were the stockholders of the Company
immediately prior to such Business Transaction do not, immediately
thereafter, own more than 50% of the combined voting power entitled
to
vote in the election of directors of the entity resulting from such
Business Transaction; or
|
(d) |
Approval
by the stockholders of the Company of a liquidation or dissolution
of the
Company or of the sale of all or substantially all the assets of
the
Company.
|
3. |
Protection
Period.
The Company hereby agrees to continue the Executive in its employ,
and the
Executive hereby agrees to remain in the employ of the Company, for
the
period commencing on the Effective Date and ending on the earlier
to occur
of (a) the third anniversary of such date; or (b) the date that this
Agreement otherwise terminates, as provided herein (the “Protection
Period”).
|
4. |
Terms
of Employment During Protection Period.
|
(a) |
Position
and Duties.
|
(i) |
During
the Protection Period, (A) the Executive’s position (including status,
offices, titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material respects
with the most significant of those held, exercised and assigned at
any
time during the 90-day period immediately preceding the Effective
Date and
(B) the Executive’s services shall be performed at the location where the
Executive was employed immediately preceding the Effective Date or
any
office or location less than twenty-five (25) miles from such location.
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(ii) |
During
the Protection Period, and excluding any periods of vacation and
sick
leave to which the Executive is entitled, the Executive agrees to
devote
reasonable attention and time during normal business hours to the
business
and affairs of the Company and, to the extent necessary to discharge
the
responsibilities assigned to the Executive hereunder, to use the
Executive’s reasonable best efforts to perform faithfully and efficiently
such responsibilities. During the Protection Period it shall not
be a
violation of this Agreement for the Executive to (A) serve on corporate,
civic or charitable boards or committees, (B) deliver lectures, fulfill
speaking engagements or teach at educational institutions and (C)
manage
personal investments, so long as such activities do not significantly
interfere with the performance of the
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4
Executive’s
responsibilities as an employee of the Company in accordance with
this
Agreement. It is expressly understood and agreed that to the extent
that
any such activities have been conducted by the Executive prior
to the
Effective Date, the continued conduct of such activities (or the
conduct
of activities similar in nature and scope thereto) subsequent to
the
Effective Date shall not thereafter be deemed to interfere with
the
performance of the Executive’s responsibilities to the Company.
|
(b) |
Compensation.
|
(i) |
Base
Salary.
During the Protection Period, the Executive shall receive a base
salary
(“Base Salary”) at a monthly rate at least equal to the highest monthly
base salary paid or payable to the Executive by the Company during
the
twelve-month period immediately preceding the month in which the
Effective
Date occurs. During the Protection Period, the Base Salary shall
be
reviewed at least annually and shall be increased at any time and
from
time to time as shall be substantially consistent with increases
in base
salary awarded in the ordinary course of business to other key executives
of the Company and its subsidiaries. Any increase in Base Salary
shall not
serve to limit or reduce any other obligation to the Executive under
this
Agreement. Base Salary shall not be reduced after any such increase.
|
(ii) |
Annual
Bonus.
In addition to Base Salary, the Executive shall be awarded, for each
fiscal year ending during the Protection Period, an annual bonus
(an
“Annual Bonus”) (either pursuant to the Incentive Compensation Plan of the
Company or otherwise) in cash at least equal to the average annual
cash
incentive payments received by the Executive from the Company and
its
subsidiaries in respect of the three fiscal years immediately preceding
the fiscal year in which the Effective Date occurs. Upon termination
of
the Protection Period, the Company shall pay the Executive an Annual
Bonus
for the year in which termination occurs, prorated to the end of
the
Protection Period.
|
(iii) |
Incentive,
Savings and Retirement Plans.
In addition to Base Salary and Annual Bonus payable as hereinabove
provided, the Executive shall be entitled to participate during the
Protection Period in all incentive, savings, pension, supplemental
executive retirement, and other retirement plans, deferred compensation
plans, stock option plans and other equity and long-term incentive
plans
and other plans, practices, policies and programs applicable to other
key
executives of the Company and its subsidiaries (including, without
limitation, the Company’s Incentive Compensation Plan, its Savings Plan
and its Supplemental
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5
Executive
Retirement Plan), in each case providing benefits which are the
economic
equivalent to those currently in effect or as subsequently amended.
Such
plans, practices, policies and programs, in the aggregate, shall
provide
the Executive with compensation, benefits and reward opportunities
at
least as favorable as the most favorable of such compensation,
benefits
and reward opportunities provided by the Company for the Executive
under
such plans, practices, policies and programs as in effect at any
time
during the 90-day period immediately preceding the Effective Date
or, if
more favorable to the Executive, as provided at any time thereafter
with
respect to other key executives of the Company and its subsidiaries.
|
(iv) |
During
the Protection Period, the Executive and/or the Executive’s family, as the
case may be, shall be eligible for participation in, and shall receive
all
benefits under, welfare benefit plans, practices, policies and programs
provided by the Company and its subsidiaries (including, without
limitation, medical, prescription, dental, disability, salary continuance,
employee life, group life, accidental death and travel accident insurance
plans and programs), at least as favorable as the most favorable
of such
plans, practices, policies and programs in effect at any time during
the
90-day period immediately preceding the Effective Date or, if more
favorable to the Executive and/or the Executive’s family, as in effect at
any time thereafter with respect to other key executives of the Company
and its subsidiaries.
|
(v) |
Expenses.
During the Protection Period, the Executive shall be entitled to
an office
or offices of a size and with furnishings and other appointments,
and to
secretarial and other assistance, at least equal to the most favorable
of
the foregoing provided to the Executive by the Company and its
subsidiaries at any time during the 90-day period immediately preceding
the Effective Date or, if more favorable to the Executive, as provided
at
any time thereafter with respect to other key executives of the Company
and its subsidiaries.
|
(vi) |
Vacation.
During the Protection Period, the Executive shall be entitled to
paid
vacation and holidays in accordance with the most favorable plans,
policies, programs and practices of the Company and its subsidiaries
as in
effect at any time during the 90-day period immediately preceding
the
Effective Date or, if more favorable to the Executive, as in effect
at any
time thereafter with respect to other key executives of the Company
and
its subsidiaries.
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6
5. |
Certain
Terms Relating to Termination.
|
(a) |
Disability.
If the Company determines in good faith that the Disability of the
Executive has occurred (pursuant to the definition of “Disability” set
forth below) during the Protection Period, it may give to the Executive
written notice of its intention to terminate the Executive’s employment.
In such event, the Executive’s employment with the Company shall terminate
effective on the 30th day after receipt of such notice by the Executive
(the “Disability Effective Date”), provided that, within the 30 days after
such receipt, the Executive shall not have returned to full-time
performance of the Executive’s duties. For purposes of this Agreement,
“Disability” means disability which, at least 26 weeks after its
commencement, is determined to be total and permanent by a physician
selected by the Company or its insurers and acceptable to the Executive
or
the Executive’s legal representative (such agreement as to acceptability
not to be withheld unreasonably).
|
(b) |
Cause.
During the Protection Period, the Company may terminate the Executive’s
employment for “Cause.” For purposes of this Agreement, “Cause” means (i)
an act or acts of personal dishonesty taken by the Executive and
intended
to result in substantial personal enrichment of the Executive at
the
expense of the Company, (ii) repeated violations by the Executive
of the
Executive’s obligations under Section 4(a) of this Agreement which are
demonstrably willful and deliberate on the Executive’s part and which are
not remedied in a reasonable period of time after receipt of written
notice from the Company or (iii) the conviction of the Executive
of a
felony.
|
(c) |
Good
Reason.
Notwithstanding anything to the contrary contained herein, during
the
Protection Period, the Executive’s employment may be terminated by the
Executive for Good Reason. For purposes of this Agreement, “Good Reason”
means:
|
(i) |
the
assignment to the Executive of any duties inconsistent in any respect
with
the Executive’s position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as contemplated
by
Section 4(a) of this Agreement, or any other action by the Company
which
results in a diminution in such position, authority, duties or
responsibilities, excluding for this purpose an isolated, insubstantial
and inadvertent action not taken in bad faith and which is remedied
by the
Company promptly after receipt of notice thereof given by the Executive;
|
(ii) |
any
failure by the Company to comply with any of the provisions of Section
4(b) of this Agreement, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and
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7
which
is remedied by the Company promptly after receipt of notice thereof
given
by the Executive;
|
(iii) |
the
Company’s requiring the Executive to be based at any office or location
other than that described in Section 4(a)(i)(B) hereof, except for
travel
reasonably required in the performance of the Executive’s
responsibilities;
|
(iv) |
any
purported termination by the Company of the Executive’s employment
otherwise than as expressly permitted by this Agreement; or
|
(v) |
any
failure by the Company to comply with and satisfy Section 12(c) of
this
Agreement.
|
For
purposes of this Section 5(c), any good faith determination of “Good Reason”
made by the Executive shall be conclusive. Anything in this Agreement to the
contrary notwithstanding, a termination by the Executive for any reason during
the 30-day period immediately following the first anniversary of the Effective
Date shall be deemed to be a termination for Good Reason for all purposes of
this Agreement.
(d) |
Notice
of Termination.
Any termination of the Executive’s employment by the Company for Cause or
by the Executive for Good Reason shall be communicated by Notice
of
Termination to the other party hereto given in accordance with Section
13(b) of this Agreement. For purposes of this Agreement, a “Notice of
Termination” means a written notice which (i) indicates the specific
termination provision in this Agreement relied upon, (ii) sets forth
in
reasonable detail the facts and circumstances claimed to provide
a basis
for termination of the Executive’s employment under the provision so
indicated and (iii) if the Date of Termination (as defined below)
is other
than the date of receipt of such notice, specifies the termination
date
(which date shall be not more than fifteen (15) days after the giving
of
such notice). The failure by the Executive to set forth in the Notice
of
Termination any fact or circumstance which contributes to a showing
of
Good Reason shall not waive any right of the Executive hereunder
or
preclude the Executive from asserting such fact or circumstance in
enforcing his rights hereunder.
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(e) |
Date
of Termination.
“Date of Termination” means the date of receipt of the Notice of
Termination or any later date specified therein, as the case may
be;
provided,
however,
that (i) if the Executive’s employment is terminated by the Company other
than for Cause or Disability, the Date of Termination shall be the
date on
which the Company notifies the Executive of such termination and
(ii) if
the Executive’s employment is terminated by reason of death or Disability,
the Date of Termination shall
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8
be
the date of death of the Executive or the Disability Effective
Date, as
the case may be.
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6. |
Obligations
of the Company upon Termination During the Protection
Period.
|
(a) |
Death.
If the Executive’s employment is terminated during the Protection Period
by reason of the Executive’s death, this Agreement shall terminate without
further obligations under this Agreement to the Executive’s
representatives, other than those obligations accrued or earned and
vested
(if applicable) by the Executive as of the Date of Termination, including,
for this purpose (i) the Executive’s full Base Salary through the Date of
Termination at the rate in effect on the Date of Termination or,
if
higher, at the highest rate in effect at any time from the 90-day
period
preceding the Effective Date through the Date of Termination (the
“Highest
Base Salary”), (ii) the product of the Annual Bonus paid to the Executive
for the last full fiscal year and a fraction, the numerator of which
is
the number of days in the current fiscal year through the Date of
Termination, and the denominator of which is 365 and (iii) any
compensation previously deferred by the Executive (together with
any
accrued interest thereon) and not yet paid by the Company and any
accrued
vacation pay not yet paid by the Company (such amounts specified
in
clauses (i), (ii) and (iii) are hereinafter referred to as “Accrued
Obligations”). All such Accrued Obligations shall be paid to the
Executive’s estate or beneficiary, as applicable, in a lump sum in cash
within 30 days of the Date of Termination. Anything in this Agreement
to
the contrary notwithstanding, the Executive’s family shall be entitled to
receive benefits at least equal to the most favorable benefits provided
by
the Company and any of its subsidiaries to surviving families of
executives of the Company and such subsidiaries under such plans,
programs, practices and policies relating to family death benefits,
if
any, in accordance with the most favorable plans, programs, practices
and
policies of the Company and its subsidiaries in effect at any time
during
the 90-day period immediately preceding the Effective Date or, if
more
favorable to the Executive and/or the Executive’s family, as in effect on
the date of the Executive’s death with respect to other key executives of
the Company and its subsidiaries and their families.
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(b) |
Disability.
If the Executive’s employment is terminated during the Protection Period
by reason of the Executive’s Disability, this Agreement shall terminate
without further obligations to the Executive, other than those obligations
accrued or earned and vested (if applicable) by the Executive as
of the
Date of Termination, including for this purpose, all Accrued Obligations.
All such Accrued Obligations shall be paid to the Executive in a
lump sum
in cash within 30 days of the Date of Termination. Anything in this
Agreement to the contrary notwithstanding, the Executive shall be
entitled
after the Disability Effective Date to receive disability and other
benefits at least equal to the most favorable of
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9
those
provided by the Company and its subsidiaries to disabled executives
and/or
their families in accordance with such plans, programs, practices
and
policies relating to disability, if any, of the Company and its
subsidiaries in effect at any time during the 90-day period immediately
preceding the Effective Date or, if more favorable to the Executive
and/or
the Executive’s family, as in effect at any time thereafter with respect
to other key executives of the Company and its subsidiaries and
their
families.
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(c) |
Cause;
Other than for Good Reason.
If the Executive’s employment shall be terminated during the Protection
Period for Cause, this Agreement shall terminate without further
obligations to the Executive, other than the obligation to pay to
the
Executive the Highest Base Salary through the Date of Termination
plus the
amount of any compensation previously deferred by the Executive (together
with accrued interest thereon). If the Executive terminates employment
during the Protection Period other than for Good Reason (including
by
reason of retirement), this Agreement shall terminate without further
obligations to the Executive, other than those obligations accrued
or
earned and vested (if applicable) by the Executive through the Date
of
Termination, including for this purpose, the Executive’s Base Salary
through the Date of Termination at the rate in effect on the Date
of
Termination plus the amount of any compensation previously deferred
by the
Executive (together with accrued interest thereon). All such amounts
under
this Section 6(c) shall be paid to the Executive in a lump sum in
cash
within 30 days of the Date of
Termination.
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(d) |
Good
Reason; Other than for Cause, Disability or Death.
|
(i) |
If,
during the Protection Period, the Company shall terminate the Executive’s
employment other than for Cause, Disability, or death or if the Executive
shall terminate his employment for Good Reason, the Company shall
pay to
the Executive in a lump sum in cash within 30 days after the end
of any
revocation period contained in the Company’s standard release agreement
(the “Release Agreement”) the aggregate of the following amounts:
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(A) |
the
Executive’s full base salary and vacation pay accrued (for vacation not
taken) through the Date of Termination at the rate in effect at the
time
of the Date of Termination plus pro-rated incentive
compensation under the Company’s annual incentive compensation plan
through the Date of Termination at the same percentage rate (i.e.,
percentage of the Executive’s previous year-end salary) applicable to the
calendar year immediately prior to the Date of Termination, plus
all other
amounts to which the Executive is entitled under any compensation
plan,
program, practice or policy
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10
of
the Company in effect at the time such payments are due; and
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(B) |
in
the event any compensation has been previously deferred by the Executive,
all amounts previously deferred (together with any accrued interest
thereon) and not yet paid by the Company; and
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(C) |
a
lump sum severance payment in an amount equal to three times the
Executive’s Base Salary.
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(ii) |
Notwithstanding
the provisions of Section 6(d)(i), no payments shall be made under
Section
6(d)(i) if the Executive declines to sign and return the Release
Agreement
or revokes such Release Agreement within the time period provided
therein.
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7. |
Compliance
with Section 409A of the Code.
To the extent applicable, it is intended that this Agreement comply
with
the provisions of Section 409A of the Code. This Agreement
shall be
administered in a manner consistent with this intent, and any provision
that would cause the Agreement to fail to satisfy Section 409A
of the
Code shall have no force and effect until amended to comply with
Section 409A of the Code (which amendment may be retroactive
to the
extent permitted by Section 409A of the Code and may be made
by the
Company without the consent of the Executive). In particular, to
the
extent the Executive becomes entitled to receive payment subject
to
Section 409A upon an event that does not constitute a permitted
distribution event under Section 409A(a)(2) of the Code, then
notwithstanding anything to the contrary in this Agreement, payment
will
be made to the Executive on the earlier of (a) the Executive’s
“separation from service” with the Company (determined in accordance with
Section 409A); provided,
however,
that if the Executive is a “specified employee” (within the meaning of
Section 409A), the Executive’s date of payment shall be made on the
date which is 6 months after the date of the Executive’s separation from
service with the Company or (b) the Executive’s
death.
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8. |
Non-exclusivity
of Rights.
Nothing in this Agreement shall prevent or limit the Executive’s
continuing or future participation in any benefit, bonus, incentive
or
other plans, programs, policies or practices, provided by the Company
or
any of its subsidiaries and for which the Executive may qualify,
nor shall
anything herein limit or otherwise affect such rights as the Executive
may
have under any stock option or other agreements with the Company
or any of
its subsidiaries. Amounts which are vested benefits or which the
Executive
is otherwise entitled to receive under any plan, policy, practice
or
program of the Company or any of its subsidiaries at or subsequent
to the
Date of Termination shall be payable in accordance with such plan,
policy,
practice or program.
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9. |
Full
Settlement.
Not later than the Effective Date, the Company will take appropriate
steps, in form and substance satisfactory to the Executive, to ensure
the
Company’s financial ability to meet its financial obligations to the
Executive
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11
under
this Agreement through the escrowing of sufficient funds with a
financially sound and reputable escrow agent, the securing of a
letter of
credit in favor of the Executive from a financially sound and reputable
banking or financial institution, or other similar financial arrangement
with an independent entity. The Company’s obligation to make the payments
provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any set-off, counterclaim, recoupment,
defense or other claim, right or action which the Company may have
against
the Executive or others. In no event shall the Executive be obligated
to
seek other employment or take any other action by way of mitigation
of the
amounts payable to the Executive under any of the provisions of
this
Agreement. The Company agrees to pay, to the full extent permitted
by law,
all legal fees and expenses which the Executive may reasonably
incur as a
result of any contest (regardless of the outcome thereof) by the
Company
or others of the validity or enforceability of, or liability under,
any
provision of this Agreement or any guarantee of performance thereof
(including as a result of any contest by the Executive about the
amount of
any payment pursuant to Section 10 of this Agreement), plus in
each case
interest at the applicable Federal rate provided for in Section
7872(f)(2)
of the Code.
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10. |
Reduction
of Payments by the Company.
|
(a) |
Anything
in this Agreement to the contrary notwithstanding, in the event it
shall
be determined that any payment or distribution by the Company 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)
(a
“Payment”) would be nondeductible by the Company for Federal income tax
purposes because of Section 280G of the Code, then the amounts payable
or
distributable to or for the benefit of the Executive pursuant to
this
Agreement (such payments or distributions pursuant to this Agreement
are
hereinafter referred to as “Agreement Payments”) shall be reduced in such
a way that their aggregate Present Value shall be equal to the Reduced
Amount. The “Reduced Amount” shall be an amount expressed in Present Value
which maximizes the aggregate present value of Agreement Payments
without
causing any Payment to be nondeductible by the Company because of
Section
280G of the Code.
|
(b) |
All
determinations required to be made under this Section 10 shall be
made by
an independent accounting firm selected by the Company (the “Accounting
Firm”) which shall provide detailed supporting calculations both to the
Company and the Executive within 15 business days of the Date of
Termination or such earlier time as is requested by the Company and,
if
requested by the Executive, an opinion that he has substantial authority
not to report any excise tax on his Federal income tax return with
respect
to the Agreement Payments. Any such determination by the Accounting
Firm
shall be binding upon the Company and the Executive. The Executive
shall
determine which and how much of the Agreement Payments shall be eliminated
or reduced consistent with the requirements
|
12
of
this Section 10, provided that, if the Executive does not make
such
determination within ten business days of the receipt of the calculations
made by the Accounting Firm, the Company shall elect which and
how much of
the Agreement Payments shall be eliminated or reduced consistent
with the
requirements of this Section 10 and shall notify the Executive
promptly of
such election. Within five business days thereafter, the Company
shall pay
to or distribute to or for the benefit of the Executive such amounts
as
are then due to the Executive under this Agreement.
|
(c) |
As
a result of the uncertainty in the application of Section 280G of
the Code
at the time of the initial determination by the Accounting Firm hereunder,
it is possible that Agreement Payments will have been made by the
Company
which should not have been made (“Overpayment”) or that additional
Agreement Payments which will not have been made by the Company could
have
been made (“Underpayment”), in each case, consistent with the calculations
required to be made hereunder. In the event that the Accounting Firm,
based upon the assertion of a deficiency by the Internal Revenue
Service
against the Executive which the Accounting Firm believes has a high
probability of success determines that an Overpayment has been made,
any
such Overpayment paid or distributed by the Company to or for the
benefit
of the Executive shall be repaid by the Executive to the Company
together
with interest at the applicable Federal rate provided for in Section
7872(f)(2) of the Code; provided,
however,
that no amount shall be payable by the Executive to the Company if
and to
the extent such deemed payment would not either reduce the amount
on which
the Executive is subject to tax under Section 1 and Section 4999
of the
Code or generate a refund of such taxes. In the event that the Accounting
Firm, based upon controlling precedent or other substantial authority,
determines that an Underpayment has occurred, any such Underpayment
shall
be promptly paid by the Company to or for the benefit of the Executive
together with interest at the applicable Federal rate provided for
in
Section 7872(f)(2) of the Code.
|
11. |
Confidential
Information.
The Executive shall hold in a fiduciary capacity for the benefit
of the
Company all secret or confidential information, knowledge or data
relating
to the Company or any of its subsidiaries, and their respective
businesses, which shall have been obtained by the Executive during
the
Executive’s employment by the Company or any of its subsidiaries and which
shall not be or become public knowledge (other than by acts by the
Executive or his representatives in violation of this Agreement).
After
termination of the Executive’s employment with the Company, the Executive
shall not, without the prior written consent of the Company, communicate
or divulge any such information, knowledge or data to anyone other
than
the Company and those designated by it. In no event shall an asserted
violation of the provisions of this Section 11 constitute a basis
for
deferring or withholding any amounts otherwise payable to the Executive
under this Agreement.
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13
12. |
Successors.
|
(a) |
This
Agreement is personal to the Executive and without the prior written
consent of the Company shall not be assignable by the Executive otherwise
than by will or the laws of descent and distribution. This Agreement
shall
inure to the benefit of and be enforceable by the Executive’s legal
representatives.
|
(b) |
This
Agreement shall inure to the benefit of and be binding upon the Company
and its successors and assigns.
|
(c) |
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 assume expressly
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. As used in this Agreement, “Company” shall mean the Company
as hereinbefore defined and any successor to its business and/or
assets as
aforesaid which assumes and agrees to perform this Agreement by operation
of law or otherwise.
|
13. |
Miscellaneous.
|
(a) |
This
Agreement shall be governed by and construed in accordance with the
laws
of the State of Delaware, without reference to principles of conflict
of
laws. The captions of this Agreement are not part of the provisions
hereof
and shall have no force or effect. This Agreement may not be amended
or
modified otherwise than by a written agreement executed by the parties
hereto or their respective successors and legal representatives.
|
(b) |
All
notices and other communications hereunder shall be in writing and
shall
be given by hand delivery to the other party or by registered or
certified
mail, return receipt requested, postage prepaid, addressed as follows:
|
If
to
the Executive:
___________________
___________________
___________________
14
If
to
the Company:
Harsco
Corporation
X.X.
Xxx
0000
Xxxx
Xxxx, XX 00000-0000
Attention:
President and Chief Operating Officer
or
to
such other address as either party shall have furnished to the other in writing
in accordance herewith. Notice and communications shall be effective when
actually received by the addressee.
(c) |
The
invalidity or unenforceability of any provision of this Agreement
shall
not affect the validity or enforceability of any other provision
of this
Agreement.
|
(d) |
The
Company may withhold from any amounts payable under this Agreement
such
Federal, state or local taxes as shall be required to be withheld
pursuant
to any applicable law or regulation.
|
(e) |
The
Executive’s failure to insist upon strict compliance with any provision
hereof shall not be deemed to be a waiver of such provision or any
other
provision thereof.
|
(f) |
This
Agreement contains the entire understanding of the Company and the
Executive with respect to the subject matter hereof and supersedes
any
prior agreements relating to the subject matter hereof, including,
without
limitation, the Prior Agreement. Notwithstanding the preceding sentence,
this Agreement does not supersede or override the provisions of any
stock
option, employee benefit or other plan, program, policy or practice
in
which Executive is a participant or under which the Executive is
a
beneficiary.
|
(g) |
The
Executive and the Company acknowledge that the employment of the
Executive
by the Company prior to the Effective Date is “at will”, and, prior to the
Effective Date, may be terminated by either the Executive or the
Company
at any time. Upon a termination of the Executive’s employment or upon the
Executive’s ceasing to be an officer of the Company, in each case, prior
to the Effective Date, there shall be no further rights under this
Agreement.
|
15
IN
WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant to the
authorization from its Board of Directors, the Company has caused these presents
to be executed as of the day and year first above written.
EXECUTIVE |
||
HARSCO CORPORATION | ||
|
|
|
By: |
||
Title |
Attest:
SECRETARY
16