AMENDED AND RESTATED CHANGE IN CONTROL AGREEMENT
Exhibit 10.33
AMENDED AND RESTATED
CHANGE IN CONTROL AGREEMENT
CHANGE IN CONTROL AGREEMENT
This Amended and Restated Change in Control Agreement (this “Agreement”), dated as of
________________ __, 20__, is made by and between OM Group, Inc., a Delaware corporation (the
“Company”), and ____________________ (the “Executive”).
WHEREAS, the Company considers it essential to the best interest of the Company and its
stockholders that its management be encouraged to remain with the Company and to continue to devote
its full attention to the Company’s business;
WHEREAS, the Company recognizes that the possibility of a change in control may occur and that
the uncertainty arising as a result of a potential change in control may result in the departure or
distraction of management personnel to the detriment of the Company and its stockholders; and
WHEREAS, the Company’s Board of Directors (the “Board”) has determined that
appropriate steps should be taken to reinforce and encourage the continued attention and dedication
of key members of the Company’s management, including the Executive, to their assigned duties
without distraction in the face of a potential Change in Control; and
WHEREAS, the Executive has advised the Company that, in consideration of, among other things,
the Company’s entering into this Agreement with the Executive, it is Executive’s present intention
to remain in the employ of the Company unless and until a Change in Control occurs; and
WHEREAS, the Company and the Executive desire for this Amended and Restated Change in Control
Agreement to amend and supersede the Change in Control Agreement, dated June 8, 2005, between the
Company and the Executive (the “Prior Agreement”) and any other Change in Control
Agreements entered into prior to the date hereof;
NOW, THEREFORE, in consideration of the premises and the mutual covenants herein contained,
the Company and the Executive hereby agree as follows:
1. Definitions.
(a) “Additional Compensation” has the meaning set forth in Section 5(d).
(b) “Affiliate” means a person or entity that directly, or indirectly through one or
more intermediaries, controls, or is controlled by, or is under common control with, the person or
entity specified.
(c) “Agreement” has the meaning set forth in the Preamble.
(d) “Base Compensation” has the meaning set forth in Section 5(d).
(e) “Board” has the meaning set forth in the recitals.
(f) “Business Combination” has the meaning set forth in Section 1(h).
(g) “Cause” means (i) the willful and continued failure by the Executive to perform
his/her duties with the Company or one of its Affiliates (other than for Death, Disability or Good
Reason), after a written demand for substantial performance is delivered to the Executive by the
Board that specifically identifies the manner in which the Board believes the Executive has failed
to perform his/her duties, or (ii) illegal conduct or gross misconduct by the Executive involving
moral turpitude that is materially and demonstrably injurious to the Company. For purposes of
clause (ii) of the preceding sentence, no act or failure to act shall constitute “cause” unless it
is done, or omitted to be done, in bad faith or without Executive’s reasonable belief that such
action or omission was in the best interests of the Company. Any act, or failure to act, based
upon authority given Executive pursuant to a resolution duly adopted by the Board or based upon the
advice of counsel for the Company shall be conclusively presumed to be undertaken in good faith and
in the best interests of the Company;
(h) “Change in Control” means the occurrence of any of the following: (i) the
acquisition by any individual, entity or group (within the meaning of Section 13(d)(3) or 14(d)(2)
of the Exchange Act) (a “Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 33% or more of the then outstanding Voting Shares;
provided, however, that the following acquisitions shall not constitute a Change in
Control: (1) any acquisition directly from the Company; (2) any acquisition by the Company; (3) any
acquisition by any employee benefit plan (or related trust) sponsored or maintained by the Company
or any Subsidiary; or (4) any acquisition by any Person pursuant to a transaction that complies
with clauses (A), (B) and (C) of Section 1(h)(iii) below; or (ii) individuals who, as of the date
of this Agreement, constitute the Board (the “Incumbent Board”) cease for any reason (other
than death or disability) to constitute at least a majority of the Board; provided,
however, that any individual becoming a director subsequent to the date hereof, whose
election, or nomination for election by the Company’s stockholders, was approved by a vote of at
least two-thirds 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) shall be considered as though such individual was a
member of the Incumbent Board, but excluding for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or threatened election contest (within the
meaning of Rule 14a-11 of the Exchange Act) with respect to the election or removal of directors or
other actual or threatened solicitation of proxies or consents by or on behalf of a Person other
than the Board; or (iii) consummation of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the Company (a “Business
Combination”), in each case, unless following such Business Combination, (A) all or
substantially all of the individuals and entities who were the beneficial owners of the Voting
Shares immediately prior to such Business Combination beneficially own, directly or indirectly,
more than 50% of, respectively, the then-outstanding shares of common stock and the combined voting
power of the then-outstanding voting securities entitled to vote generally in the election of
directors, as the case may be, of the entity resulting from such Business Combination (including,
without limitation, an entity that as a result of such transaction owns the Company or
substantially all of the Company’s assets either directly or through one or more subsidiaries) in
- 2 -
substantially the same proportions relative to each other as their ownership immediately prior
to such Business Combination of the Voting Shares, (B) no Person (excluding any entity resulting
from such Business Combination or any employee benefit plan (or related trust) sponsored or
maintained by the Company or such entity resulting from such Business Combination) beneficially
owns, directly or indirectly, 15% or more of, respectively, the then-outstanding shares of common
stock of the entity resulting from such Business Combination, or the combined voting power of the
then-outstanding voting securities of such corporation except to the extent that such ownership
existed prior to the Business Combination and (C) at least a majority of the members of the board
of directors of the entity resulting from such Business Combination were members of the Incumbent
Board at the time of the execution of the initial agreement, or the action of the Board providing
for such Business Combination; or (iv) approval by the stockholders of the Company of a complete
liquidation or dissolution of the Company.
(i) “COBRA Period” has the meaning set forth in Section 6(a).
(j) “Code” means the Internal Revenue Code of 1986, as amended from time to time.
(k) “Company” means OM Group, Inc., a Delaware corporation, and any successor to its
business and/or assets which executes and delivers the agreement provided for in Section 12
of this Agreement or which otherwise becomes bound by all the terms and provisions of this
Agreement by operation of law.
(l) “Company Shares” has the meaning set forth in Section 5(e).
(m) “Disability” has the meaning set forth in Section 4(c).
(n) “Effective Date” has the meaning set forth in Section 3(b).
(o) “Exchange Act” means the Securities Exchange Act of 1934, as amended.
(p) “Excise Tax” has the meaning set forth in Section 10(a).
(q) “Executive” has the meaning set forth in the Preamble.
(r) “Firm” has the meaning set forth in Section 10(b).
(s) “Good Reason” means: (i) the assignment of any duties inconsistent with the
Executive’s position (including status, offices, titles and reporting requirements), authority,
duties or responsibilities, 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
continue to provide Executive with an annual base salary, employee benefits and an opportunity to
earn incentive and bonus compensation equal or greater to that which was provided to the Executive
by the Company immediately prior to the Effective Date, other than an isolated, insubstantial and
inadvertent failure not occurring in bad faith and which is remedied by the Company promptly after
the receipt of notice thereof given by the Executive; (iii) the
- 3 -
Company’s requiring the Executive to be based at or generally work from a primary business
location more than 50 miles from the location that the Executive was based at or generally worked
from prior to the Effective Date or the Company’s requiring the Executive to travel on Company
business to a substantially greater extent than required immediately prior to the Effective Date;
or (iv) any failure by the Company to comply with and satisfy Section 12 of this Agreement.
(t) “Incumbent Board” has the meaning set forth in Section 1(h).
(u) “Notice of Termination” has the meaning set forth in Section 4.
(v) “OMG Related Persons” has the meaning set forth in Section 9(c).
(w) “Options” has the meaning set forth in Section 5(e).
(x) “Person” has the meaning set forth in Section 1(h).
(y) “Prior Agreement” has the meaning set forth in the recitals.
(z) “Release” has the meaning set forth in Section 5.
(aa) “Retirement” has the meaning set forth in Section 4(b).
(bb) “Separation from Service” shall mean a separation from service as such term is
defined for purposes of Section 409A of the Code.
(cc) “Subsidiary” means an entity in which the Company directly or indirectly
beneficially owns 50% or more of the outstanding securities entitled to vote generally in the
election of directors of the entity.
(dd) “Term” means the period of time described in Section 2 hereof (including
any extension, continuation or termination described therein).
(ee) “Termination Date” has the meaning set forth in Section 4.
(ff) “Voting Shares” means at any time, the then-outstanding securities entitled to
vote generally in the election of directors of the Company.
(gg) “Without Cause” means termination of the Executive’s employment for reasons other
than for Death, Retirement, Disability or Cause.
2. Term. The Term of this Agreement shall commence on the date first written above
and shall continue in effect through December 31, 20__; provided, however, that
commencing on January 1, 20__ and each January 1 thereafter, the Term shall be automatically
extended for one (1) additional year unless, not later than September 30 of the preceding year, the
Company or the Executive shall have given written notice to the other party electing not to extend
the Term; and provided further, that if a Change in Control shall have occurred
during the Term, the Term shall expire on the last day of the twelfth (12th) month
following the month in
- 4 -
which such Change in Control occurred. Notwithstanding any other provision hereof, the Term
shall expire upon (a) any termination of the Executive’s employment prior to a Change in Control,
so long as such termination is not done in anticipation of or in connection with a Change in
Control, and (b) the Executive’s death or resignation prior to a Change of Control.
3. Change in Control.
(a) No benefits shall be payable hereunder unless a Change in Control occurs, and, during the
Term, the Executive’s employment with the Company is terminated either by the Executive for Good
Reason or by the Company Without Cause. This Agreement is not intended to apply to termination of
the Executive’s employment by reason of death, Disability or Retirement.
(b) The first date upon which a Change in Control as defined above takes place shall be known
as the “Effective Date.” Notwithstanding anything in this Agreement to the contrary, if a
Change in Control occurs and if the Executive’s employment with the Company is terminated by the
Company prior to the date on which the Change in Control occurs, and if it is reasonably
demonstrated by the Executive that such termination (i) was at the request of a third party who had
taken steps reasonably calculated to effect a Change in Control or (ii) was by the Company and
arose with or in anticipation of a Change in Control, then for all purposes of this Agreement, the
Executive’s employment shall be deemed to have been terminated by the Company Without Cause under
Section 4(f) of this Agreement and the “Effective Date” shall mean the date immediately
prior to the Termination Date (as defined in Section 4 hereof).
4. Termination of Employment. The Executive’s employment with the Company shall or
may be terminated, as the case may be, for any of the following reasons:
(a) termination of the Executive’s employment due to the Executive’s death;
(b) termination of the Executive’s employment by the Executive at or after the attainment of
age sixty-five (65) or pursuant to a duly adopted retirement policy of the Company
(“Retirement”);
(c) termination of the Executive’s employment either by the Executive or by the Company after
the Executive is physically or mentally incapacitated for a period of one hundred eighty (180)
consecutive days such that the Executive cannot substantially perform the Executive’s duties of
employment with the Company on a full-time basis (“Disability”);
(d) the Company may terminate the Executive’s employment at any time for Cause;
(e) the Executive may terminate his employment for Good Reason; and
(f) the Company may terminate Executive’s employment at any time Without Cause.
Except in the case of Retirement or death or as otherwise provided in Section 3(b) hereof,
termination of the Executive’s employment shall be effective only as of the earliest date
- 5 -
(hereinafter referred to as the “Termination Date”) specified by either the Executive or
the Company in a written notice of termination (“Notice of Termination”) delivered to the
other party hereto. Notwithstanding any provision herein to the contrary, if at any time prior to
a Change in Control, the Executive receives notice from the Company that the Executive shall be
placed in an income continuation status (i.e., where the Company agrees to (i) continue to pay the
Executive’s then existing salary or a modified level of salary continuation and/or all or some of
the Executive’s then existing employee benefits and (ii) relieve the Executive of the Executive’s
obligation to render services to the Company), the Executive’s employment, for the purpose of this
Agreement only, shall be deemed terminated as of the date of such notice and no benefits shall be
payable to the Executive hereunder.
5. Severance Pay. If a Change in Control occurs, and, during the Term, Executive’s
employment with the Company is terminated either by the Executive for Good Reason or by the Company
Without Cause, then in addition to all other benefits that the Executive has earned prior to such
termination or to which Executive is otherwise entitled, the Company shall pay to the Executive as
severance pay, in a lump sum, the following amounts:
(a) the Executive’s full base salary earned through the Termination Date at the rate in effect
prior to the date Notice of Termination is given, to the extent not theretofore paid;
(b) the Executive’s bonus for the previously completed fiscal year of the Company, to the
extent not theretofore paid;
(c) the Executive’s target bonus (i.e. based on achievement of performance goals at the 100%
level) for the fiscal year in which the Notice of Termination was given, pro rated to reflect the
number of days the Executive was employed with the Company during such fiscal year;
(d) an amount equal to the product of (i) the sum of (x) the higher of the Executive’s annual
base salary in effect immediately prior to the Effective Date, or Executive’s annual base salary at
the highest rate in effect at any time since any Change in Control and (y) the amount of any
Additional Compensation (hereinafter defined) (the sum of such annual base salary and Additional
Compensation shall be referred to as Executive’s “Base Compensation”) and (ii) the
number two (2). The term “Additional Compensation” means the quotient of (i) the sum of
(x) the Executive’s annual (measured by a fiscal year) total incentive compensation, commissions,
and bonuses declared and/or received for each of the last three full fiscal years immediately
preceding the Effective Date, plus any amounts earned or properly allocable to any of the last
three fiscal years immediately preceding the Effective Date that were deferred under any
non-qualified deferred compensation program of the Company, and (y) any elective contributions that
are made by or on behalf of the Executive under any plan maintained by the Company that are not
includible in gross income under Section 125 or 402(e)(3) of the Internal Revenue Code of 1986, as
amended from time to time, but excluding moving or educational reimbursement expenses, amounts
realized from the exercise of any stock options, sale of restricted stock, and imputed income
attributable to any fringe benefit, divided by (ii) three; provided, however, that
in the event the Executive was employed by the Company for a period of time less than three full
fiscal years immediately preceding the Effective Date, the foregoing
- 6 -
provisions shall be adjusted to cause Executive’s Additional Compensation to be determined
based upon the average of such payments and benefits for the number of full fiscal years
immediately preceding the Effective Date in which the Executive was employed by the Company;
provided further that in the event the Executive was employed by the Company for a
period of time less than one full fiscal year, the foregoing provisions shall be adjusted to cause
Executive’s Additional Compensation to be determined based upon the projected target annual
payments and benefits that would be provided to the Executive immediately preceding the Effective
Date.
(e) in lieu of shares of common stock of the Company, par value $0.01 per share (“Company
Shares”) issuable upon exercise of options (“Options”), if any, granted to the
Executive under any Company stock option plan (which Options shall be deemed canceled upon the
making of the payment herein referred to), the Executive shall receive an amount in cash equal to
the aggregate spread between the exercise prices of all such Options that are outstanding and held
by the Executive (whether or not then fully vested or exercisable and taking into account only
options as to which the exercise price is less than the higher of (i) or (ii) as set forth below)
and the higher of (i) the mean of the high and low trading prices of Company Shares on the New York
Stock Exchange on the Termination Date or (ii) the highest price per Company Share actually paid in
connection with any Change in Control;
(f) all unvested shares of restricted stock of the Company, if any, granted to the Executive
under any Company equity compensation plan, shall immediately vest and shall be redeemed by the
Company for an amount in cash equal to the higher of (i) the mean of the high and low trading
prices of Company Shares on the New York Stock Exchange on the Termination Date or (ii) the highest
price per Company Share actually paid in connection with any Change in Control;
(g) an amount of cash equal to any unvested portion of the Executive’s interest in any of the
Company’s nonqualified retirement plans or tax-qualified pension plans as of the Termination Date.
The Executive will be required to deliver a written instrument in form and substance reasonably
satisfactory to the Company releasing the Company and its Affiliates from any and all claims or
causes of action of any kind arising from or relating to the Executive’s employment with the
Company (a “Release”) before receiving payments hereunder. The payments described in this
Section 5 shall be payable on or before the fifth (5th) day following the
expiration of any revocation period relating to such Release, provided that no payments will be
made to Executive until such time as Executive has incurred a Separation from Service with the
Company. Notwithstanding anything to the contrary contained in this Section 5, if any
payment to the Executive, the payment date of which is determined by reference to the Executive’s
termination of employment, would constitute a “deferral of compensation” under Section 409A of the
Code and the Executive is a “specified employee” (as such phrase is defined in Section 409A of the
Code), the Executive (or the Executive’s beneficiary) will receive payment of the amounts described
in this Section 5 upon the earlier of (i) six (6) months following the Executive’s
Separation from Service with the Company or (ii) the Executive’s death. The payments described in
Sections 5(c)-(g) shall be in lieu of all other severance agreements or arrangements
otherwise due to the Executive under any other agreement, plan, arrangement or understanding
- 7 -
between the Company and the Executive.
6. Other Benefit Plans. If a Change in Control occurs and, during the Term,
Executive’s employment with the Company is terminated either by the Executive for Good Reason or by
the Company Without Cause, then:
(a) For a period of eighteen (18) months following the Termination Date (the “COBRA
Period”), the Company will arrange to provide the Executive, at no cost to the Executive, with
health benefits substantially similar to those that the Executive was receiving or entitled to
receive immediately prior to the Termination Date (or, if greater, immediately prior to the
reduction, termination, or denial described in Section 1(s)(ii)), except that the level of
such benefit to be provided to the Executive may be reduced in the event of a corresponding
reduction generally applicable to all recipients of or participants in such benefits. The COBRA
Period shall be considered to be the period during which the Executive shall be eligible for
continuation coverage under Section 4980B of the Code, and the Company shall reimburse the
Executive for the amount of the premiums for such continuation coverage; provided,
however, that without otherwise limiting the purposes or effect of Section 8, the
benefits otherwise receivable by the Executive pursuant to this Section 6(a) will be
reduced to the extent comparable benefits are actually received by the Executive from another
employer during the COBRA Period following the Executive’s Termination Date, and any such benefits
actually received by the Executive shall be reported by the Executive to the Company. If and to
the extent that any benefit described in this Section 6(a) is not or cannot be paid or
provided under any policy, plan, program or arrangement of the Company or any Subsidiary, as the
case may be, then the Company will itself pay or provide for the payment to the Executive, his
dependents and beneficiaries, of such benefits. Notwithstanding the foregoing, if the Company
determines that the provision of benefits under this Section 6(a) is likely to result in
negative tax consequences to the Executive, the Company will use its reasonable best efforts to
make other arrangements to provide a substantially similar benefit to the Executive that does not
have such negative tax consequences, which may include (i) making a lump sum payment at the
earliest time permitted under Section 409A of the Code, in an amount equal to the Company’s
reasonable determination of the present value of any such benefits that, if provided, would result
in negative tax consequences to the Executive and/or (ii) providing such benefit through insurance
coverage on the Executive’s behalf.
(b) The Executive will also be entitled to (i) a lump sum payment in an amount equal to the
present value of the cost of health coverage for an additional six months, provided that if the
payment described in this Section 6(b)(i) is subject to tax, the Company will pay to the
Executive an additional amount such that after payment by the Executive of all taxes so imposed on
such benefits and on such payments, the Executive retains an amount equal to such taxes and (ii) an
additional lump sum payment equal to the product of the lump sum payment set forth in Section
5(d) above multiplied by [.15], which payment is intended to cover the cost of continuing, for
an additional two years, disability coverage and the other benefit plans, programs and arrangements
that the Executive is entitled to participate in during his or her employment with the Company.
The payments provided for in this Section 6(b) will only be made to Executive in the event and at
the time that Executive incurs a Separation from Service with the Company.
- 8 -
(c) For a period of twenty-four (24) months following the Termination Date, the Company will
arrange to provide the Executive with term life insurance benefits substantially similar to those
that the Executive was receiving or entitled to receive immediately prior to the Termination Date
(or, if greater, immediately prior to the reduction, termination, or denial described in
Section 1(s)(ii)), except that the level of such benefit to be provided to the Executive
may be reduced in the event of a corresponding reduction generally applicable to all recipients of
or participants in such benefits. Without otherwise limiting the purposes or effect of Section
8, benefits otherwise receivable by the Executive pursuant to this Section 6(c) will be
reduced to the extent comparable benefits are actually received by the Executive from another
employer during the Continuation Period following the Executive’s Termination Date, and any such
benefits actually received by the Executive shall be reported by the Executive to the Company.
7. Outplacement Services. If a Change in Control occurs, and, during the Term, the
Executive’s employment with the Company is terminated either by the Executive for Good Reason or by
the Company Without Cause, the Company shall provide the Executive reasonable outplacement services
for a period of up to one year of a nature customarily provided at the Executive’s executive
officer level.
8. No Mitigation Required. The Executive shall not be required to mitigate the amount
of any payment or benefit provided for in Section 5 or 6 by seeking other
employment or otherwise. Notwithstanding the foregoing, benefits otherwise receivable under
Section 6 of this Agreement shall be reduced to the extent that and for any period during
which the Executive is eligible to receive substantially similar benefits from another employer.
9. Restrictive Covenants of the Executive.
(a) Noncompetition. If a Change in Control occurs, and, during the Term, Executive’s
employment with the Company is terminated either by the Executive for Good Reason or by the Company
Without Cause, and the Executive is receiving payments from the Company pursuant to this Agreement,
then for a period of one (1) year from the Termination Date, the Executive agrees not to, without
the written consent of the Company, either directly or indirectly, engage in, make any investment
in, advise or consult with, assist or render any services to any person or entity in competition
with the business of the Company or its subsidiaries. Notwithstanding the foregoing, the Executive
may own less than one (1) percent of the combined voting power of all issued and outstanding voting
securities of any publicly-held corporation whose stock is traded on a major stock exchange or
quoted on NASDAQ.
(b) Confidential Information. Executive hereby agrees that the Executive shall not at
any time (whether employed by the Company or not), either directly or indirectly, disclose or make
known to any person or entity or use any confidential information, trade secret, or proprietary
information that the Executive acquired during the course of the Executive’s employment with the
Company that has not become public knowledge (other than by the Executive’s actions in violation of
this Agreement). Executive further agrees that upon the termination of the Executive’s employment
with the Company, or at any time upon the request of the Company, Executive shall deliver to the
Company any and all literature, documents, correspondence, and other materials and records
furnished to the Executive by the Company during the course of the Executive’s employment with the
Company. In no event shall an
- 9 -
asserted violation of the provisions of this Section 9(b) constitute a basis for
deferring or withholding any amounts otherwise payable to the Executive under this Agreement.
(c) Non-Disparagement. The Executive agrees that during his employment and at all
times thereafter, he will not, unless compelled by a court or governmental agency, make, or cause
to be made, any statement, observation or opinion, or communicate any information (whether oral or
written) regarding the Company, or its Affiliates, together with their respective directors,
partners, officers or employees (such entities, collectively, the “OMG Related Persons”),
which disparages the reputation or business of the Company or the OMG Related Persons;
provided, however, that such restriction shall not apply to statements,
observations, opinions or communications made in good faith in the fulfillment of the Executive’s
duties with the Company; and provided further, that such restriction shall cease to
apply and shall be of no further force and effect from and after the occurrence of a Change of
Control.
10. Additional Payments.
(a) Notwithstanding anything in this Agreement to the contrary, in the event it is determined
(in the manner provided herein) that any payment or distribution to or for Executive’s benefit,
whether paid or payable or distributed or distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement, policy, plan, program or arrangement or
similar right would be subject to the excise tax (the “Excise Tax”) imposed by Section 4999
of the Code (or any successor provision thereto), Executive shall have the choice either to (i)
surrender any payment (or portion thereof) or benefit provided hereunder in an amount or amounts
sufficient to ensure that Executive does not receive any “excess parachute payments” as such term
is defined in Section 280G of the Code or (ii) receive all payments and benefits provided hereunder
and, in such case, Executive will be responsible for paying the Excise Tax (which Excise Tax shall
be paid through the Company’s withholding of such tax from the payments or benefits provided to
Executive pursuant to the terms of this Agreement or otherwise).
(b) All determinations required to be made under this Section 10, (including whether
an Excise Tax is payable by the Executive and the amount of such Excise Tax) shall be made by a
nationally-recognized legal or accounting firm (the “Firm”) mutually agreeable to both the
Executive and the Company. The Firm will submit its determination and detailed supporting
calculations to both Executive and the Company within fifteen (15) calendar days after the
Termination Date, if applicable, or such earlier time or times as may be requested by the Executive
or the Company. If the Firm determines that no Excise Tax is payable by the Executive, it shall,
at the same time as it makes such determination, furnish the Executive and Company with an opinion
that both Executive and Company have substantial authority not to report any Excise Tax on any
income or employment tax return.
(c) The Executive and the Company shall each provide the Firm access to and copies of any
books, records and documents in the possession of the Company or Executive, as the case may be,
reasonably requested by the Firm, and otherwise cooperate with the Firm in connection with the
preparation and issuance of the determination contemplated by Section 10(b) hereof.
- 10 -
(d) The fees and expenses of the Firm for its services in connection with the determinations
and calculations contemplated by Section 10(b) hereof shall be borne by the Company. If
such fees and expenses are initially paid by the Executive, the Company shall reimburse the
Executive the full amount of such fees and expenses within five business days after receipt from
the Executive of a statement therefor and reasonable evidence of the Executive’s payment thereof.
11. Withholding of Taxes. The Company may withhold from any amounts payable under
this Agreement all federal, state, city or other taxes as the Company reasonably determines to be
required pursuant to any law or government regulation, order or ruling.
12. Successors, Binding Agreement. The Company shall 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, by agreement in form and substance satisfactory to the
Executive, 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.
Failure of the Company to obtain such agreement prior to the effectiveness of any such succession
shall be a breach of this Agreement and shall entitle the Executive to compensation from the
Company in the same amount and on the same terms as the Executive would be entitled hereunder if
the Company had terminated the Executive’s employment Without Cause after a Change in Control
occurring at the time of succession, except that for purposes of implementing the foregoing, the
date on which any such succession becomes effective shall be deemed the Termination Date. This
Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or legal
representatives, executors, administrators, successors, heirs, distributees, devisees and legatees.
If the Executive should die while any amounts would still be payable to the Executive hereunder
if the Executive had continued to live, all such amounts, unless otherwise provided herein, shall
be paid in accordance with the terms of this Agreement to the Executive’s devises, legates, or
other designee or, if there be no such designee, to the Executive’s estate.
13. Notices. Notices and all other communications provided for in this Agreement
shall be in writing and shall be deemed to have been duly given when delivered or mailed by (i)
United States registered mail, return receipt requested, postage prepaid, or (ii) reputable
overnight courier service (i.e. Federal Express), in each case, addressed to the respective address
set forth in this Section 13 or to such other address as either party may have furnished to
the other in writing in accordance herewith, except that notices of change of address shall be
effective only upon receipt:
| To the Company: | OM Group, Inc. | |||
| 0000 Xxx Xxxxx | ||||
| 000 Xxxxxx Xxxxxx | ||||
| Xxxxxxxxx, XX 00000 | ||||
| Attn: General Counsel | ||||
| To the Executive: | _____________________ | |||
| _____________________ | ||||
| _____________________ |
- 11 -
14. Miscellaneous. No provisions of this Agreement may be modified, waived or
discharged unless such modification, waiver or discharge is agreed to in writing signed by the
Executive and such officer as may be specifically designated by the Board; provided, that the
Company shall have the right to terminate its obligations to the Executive under this Agreement by
written notice given to the Executive at any time prior to a Change in Control, so long as such
termination is not done in anticipation of or in connection with a Change in Control. No waiver by
either party hereto at any time of any breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by such other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the same or at any prior or subsequent
time. This Agreement constitutes the entire agreement between the Company and the Executive with
respect to the subject matter hereof and, except to the extent a specific compensation program
provides for benefits upon a change in control relative to that program, which provisions shall
remain in effect, no agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are not set forth
expressly in this Agreement. Without limiting the generality of the foregoing, this Agreement
supersedes and replaces in its entirety any prior agreement relating to the subject matter hereof,
including, without limitation, the Prior Agreement.
15. Validity. The invalidity or unenforceability of any one or more provisions 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.
16. Counterparts. This Agreement may be executed in one or more counterparts, any of
which may be executed and delivered via facsimile, each of which shall be deemed to be an original,
and all of which together shall constitute one and the same instrument.
17. Jurisdiction, Choice of Law. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of the State of Ohio. In the event of
any dispute or controversy arising under or in connection with this Agreement Executive and the
Company hereby irrevocably consent to the jurisdiction of the Common Pleas Court of the State of
Ohio (Cuyahoga County) or the United States District Court for the Northern District of Ohio.
18. Legal Fees and Expenses.
(a) It is the intent of the Company that the Executive not be required to incur the legal
expenses associated with (i) the interpretation of any provision in, or obtaining of any right or
benefit under, this Agreement or (ii) the enforcement of his rights under this Agreement by
litigation or other legal action, because the cost and expense thereof would substantially detract
from the benefits intended to be extended to the Executive hereunder. Accordingly, the Company
irrevocably authorizes the Executive from time to time to retain counsel of his choice, at the
expense of the Company as hereafter provided, to represent the Executive in connection with the
interpretation or enforcement of this Agreement, including the initiation or defense of any
litigation or other legal action, whether by or against the Company or any Director, officer,
stockholder or other person affiliated with the Company, in any jurisdiction. Notwithstanding any
existing or prior attorney-client relationship between the Company and such counsel, the
- 12 -
Company irrevocably consents to the Executive’s entering into an attorney-client relationship
with such counsel, and in that connection the Company and the Executive agree that a confidential
relationship shall exist between the Executive and such counsel. The Company shall pay or cause to
be paid and shall be solely responsible for any and all attorneys’ and related fees and expenses
incurred by the Executive under this Section 18, but only if, and to the extent and at the
earliest date(s) that, such actions are determined to be permitted without violating Section 409A
of the Code.
(b) Without limiting the obligations of the Company pursuant to Section 18(a), in the
event a Change in Control occurs, the performance of the Company’s obligations under Sections
5, 6 and 7 and this Section 18 will be secured by amounts deposited or to be deposited
in trust pursuant to certain trust agreements to which the Company will be a party providing that
the benefits to be paid pursuant to Sections 5,6 and 7 and the fees and expenses of counsel
selected from time to time by the Executive pursuant to Section 18(a) will be paid, or
reimbursed to the Executive if paid by the Executive, either in accordance with the terms of such
trust agreements, or, if not so provided, on a regular, periodic basis upon presentation by the
Executive to the trustee of a statement or statements prepared by such counsel in accordance with
its customary practices. Any failure by the Company to satisfy any of its obligations under this
Section 18(b) will not limit the rights of the Executive hereunder. Subject to the
foregoing, the Executive will have the status of a general unsecured creditor of the Company and
will have no right to, or security interest in, any assets of the Company or any Subsidiary.
19. Section 409A of the Code. To the extent applicable, it is intended that the
compensation arrangements under this Agreement be in full compliance with Section 409A of the Code.
To the extent any provision in this Agreement is or will be in violation of Section 409A of the
Code, the Agreement shall be amended in such manner as the parties may agree such that the
Agreement is or remains in compliance with Section 409A and the intent of the parties is maintained
to the maximum extent possible. In particular, to the extent that the Executive becomes entitled
to a payment or benefit under this Agreement that would constitute a “deferral of compensation”
under Section 409A of the Code and the date that the payment would be made or benefit provided does
not constitute a permitted distribution date under Section 409A(a)(2) of the Code, then
notwithstanding anything to the contrary in this Agreement, such payment or benefit will be made or
provided, to the extent necessary to comply with the provisions of Section 409A of the Code, to the
Executive on the earlier of (a) the Executive’s Separation from Service with the Company;
provided, however, that if the Executive is a “specified employee” (within the
meaning of Section 409A), the Executive’s date of payment shall be the date that is six months
after the date of the Executive’s Separation from Service with the Company, or (b) the Executive’s
death. Reference to Section 409A of the Code is to Section 409A of the Internal Revenue Code of
1986, as amended, and will also include any proposed, temporary or final regulations, or any other
guidance, promulgated with respect to such Section by the U.S. Department of the Treasury or the
Internal Revenue Service.
- 13 -
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first
written above.
| OM GROUP, INC |
||||
| By: | ||||
| Name: | ||||
| Title: | ||||
ACCEPTED AND AGREED TO AS OF THIS __ DAY OF _______________, 20__
__________________________________________
Executive
Executive
