Exhibit 10.1
SEPARATION AND CONSULTING AGREEMENT
This Agreement is entered into as of September 1, 2003 by and among
Millennium Chemicals Inc., Millennium America Holdings Inc., each a Delaware
corporation (collectively "the Company" or "Millennium"), and Xxxxxxx X. Xxxxxxx
(the "Executive").
WHEREAS, the Executive has served as President, Chief Executive Officer
and Chairman, of the Company; and
WHEREAS, the Executive and the Company wish to terminate the
Executive's employment on terms that are mutually beneficial to the Company and
the Executive, and to secure certain ongoing consulting services from the
Executive after such termination of employment; and
WHEREAS, the Executive agrees to terminate his employment relationship
with the Company and to render consulting services to the Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the Company and the Executive hereby enter into this agreement
(the "Agreement") as follows:
1. The Executive's employment with the Company shall terminate on
August 31, 2003 (the "Termination Date"). Until the Termination Date, Executive
shall continue as an active employee of the Company and shall aid and assist the
Company in effectuating an orderly transition of Executive's duties and
responsibilities to such individuals as may be designated by the Company. In
addition, the Executive hereby
resigns effective on and as of July 17, 2003 as a director and/or officer of the
Company and any and all subsidiaries and affiliates of the Company on which he
may serve in such capacity and as a member of all committees and as a trustee
for all trusts on which he serves at the request of the Company and its
subsidiaries and affiliates. The Executive agrees to sign and execute such
additional documents as may be necessary or appropriate to document any such
resignation.
2. The Executive acknowledges that upon the effectiveness of this
Agreement, the Company and its subsidiaries and affiliates will have no
obligation to provide the Executive with severance, retirement, incentive or
Change in Control benefits other than those described in this Agreement;
provided, however, that, except to the extent that (i) Section 6(b) of this
Agreement limits the discretion of the Compensation Committee to reduce the
Executive's 2003 annual incentive award under the Omnibus Incentive Compensation
Plan, nothing herein shall modify, amend or otherwise affect the Executive's
rights and benefits, if any, under the Millennium Chemicals Inc. Consolidated
Pension Plan (the "Qualified Pension Plan"), the Company's Supplemental
Executive Retirement Plan (the "PEP SERP"), the Company's 2003 Supplemental
Executive Retirement Plan (the "2003 SERP") the Savings and Investment Plan (the
"SIP"), the Supplemental Savings and Investment Plan (the "SSIP"), the Omnibus
Incentive Compensation Plan, the 2001 Executive Long Term Incentive Plan (the
"2001 ELTIP"), the 2002 Executive Long Term Incentive Plan (the "2002 ELTIP"),
the 2003 Executive Long Term Incentive Plan (the "2003 ELTIP"), the Long Term
Stock Incentive Plan, and the Salary and Bonus Deferral Plan (all such plans,
collectively, the "Plans") and the Change in Control Agreement between the
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Executive and the Company dated September 30, 2002 (the "Change in Control
Agreement").
3. The term of the Executive's consulting services to the Company under
this Agreement shall begin on September 1, 2003 and end on September 1, 2004
(the "Term"). During the Term, the Executive shall serve as a non-employee
consultant to the Company and shall perform services, including without
limitation providing strategic advice and direction to the Company, visiting
customers and vendors, assisting in the transition of the executives who shall
succeed the Executive at the Company, and participating in special projects as
requested by the Chairman, President or Executive Vice President of the Company
from time to time. Such services and assistance shall be performed in such
manner as is reasonably requested by the Chairman, President or Executive Vice
President of the Company, subject to the Executive's schedule. The Company shall
pay Executive a fee of $2,500 per workday for each day of consulting services
requested by the Chairman, President or Executive Vice President of the Company,
plus travel reimbursement as specified in Section 5.
4. The Executive further agrees to aid, assist and cooperate with the
Company following the Termination Date, as requested by the Company's General
Counsel, in connection with any investigation, dispute or litigation, dispute or
threatened investigation, dispute or litigation, including any investigation,
dispute or litigation in which the Executive may be called as a witness or
deponent. The Executive shall be paid a fee of $2,500 per day, plus travel
reimbursement as specified in Section 5.
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5. The Company shall reimburse the Executive for all reasonable and
necessary travel expenses incurred in connection with his services and
assistance pursuant to Section 3 or 4 of this Agreement requested by the
Company. Such travel expenses shall be paid by the Company to the Executive no
later than one month after a claim for reimbursement or payment is made,
appropriately documented and signed by the Executive. Any such claim for
reimbursement must be made by the Executive within 90 days of incurrence of such
expense.
6. In connection with the termination of Executive's employment and the
consulting services to be provided under Section 3 hereof, and in consideration
of the other provisions of this Agreement, including, without limitation, those
set forth in Section 11 hereof, the Company hereby agrees to pay and make
available to Executive the amounts and benefits set forth in this Section 6, in
addition to the payment of Executive's base salary until the Termination Date
and all earned but unused vacation for the year 2003:
a) [1 times the Executive's current base salary], to be paid to the
Executive promptly after the later of the Termination Date, or
such time as the Agreement becomes binding under Section 21
hereof, as Severance Pay; and [50% of Executive's current base
salary], to be paid to the Executive on January 15, 2004.
b) On or about February 15, 2004, the Company shall pay the
Executive an annual bonus for the calendar year 2003 under the
terms of the Omnibus Incentive Compensation Plan, multiplied by a
proration factor of 67% to reflect the Executive's active months
of service during 2003
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through the Termination Date. The amount of such bonus shall be
determined in the sole discretion of the Compensation Committee;
provided that:
(i) The Executive understands and agrees that the absolute
dollar award for the Executive's Company Award (as defined
hereafter), calculated prior to such pro-ration, will not,
under any circumstances, be more than the absolute dollar
award paid or payable to Xx. Xxx. The Compensation Committee
may determine in its sole discretion, that it is
appropriate, given the Company Award granted to Xx. Xxx and
the performance of the Executive in 2003, to award a lesser
amount.
(ii) The absolute dollar award for the Executive's Personal
Objective Award (as defined hereafter), calculated prior to
pro-ration shall not be more than the absolute dollar award
paid or payable to Xx. Xxx. The Compensation Committee may
determine, in its sole discretion, that it is appropriate
given the Personal Objective Award granted to Xx. Xxx and
the performance of the Executive in 2003, to award lesser
amount.
(iii) The term "Company Award" means the portion of the 2003
annual incentive award (if any) paid or payable to the
Executive, as the case may be, that is based on the
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performance of the Company or its majority-owned businesses
(as compared to the individual performance and objectives of
the Executive; and the term "Company Award Target" means the
dollar amount of the Company Award that would be paid or
payable to the Executive, as the case may be, subject to the
absolute dollar award amount paid or payable to Xx. Xxx,
prior to the Executive's pro-ration if the Company Award
portion of the 2003 annual incentive award were paid at 100%
of the targeted award, as established by the Compensation
Committee at its March 29, 2003 meeting. The term "Personal
Objectives Award" means the portion of the 2003 annual
incentive award paid or payable to the Executive as the case
may be, that is based on individual performance against
personal objectives; and the term "Personal Objectives Award
Target" means the dollar amount of the Personal Objectives
Award that would be paid or payable to the Executive, as the
case may be, subject to the absolute dollar award amount
paid or payable to Xx. Xxx, prior to pro-ration if the
Personal Objectives Award were paid at 100% of the targeted
award, as such targeted award was established by the
Compensation Committee at its March 29, 2003 meeting. For
the purposes of this
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Section 6(b), the term "paid or payable" shall include
amounts deferred under the SIP, SSIP or otherwise.
c) The Company will provide the Executive with outplacement
assistance for a period of one year (or longer subject to the
dollar limitation herein) following the Termination Date with a
firm mutually acceptable to the Company and the Executive subject
to a maximum value of $30,000.00 provided that the outplacement
service is initiated within 60 days of the Termination Date.
Participation is forfeited if initiated after November 1, 2003.
7. Executive specifically agrees that he will not at any time, during
or subsequent to the Termination Date, directly or indirectly use, divulge,
disclose or communicate to any person, firm or corporation in any manner
whatsoever, without the prior written consent of the Company or the affiliates
of the Company to which such information relates, any trade secret (as such term
is defined in 6 Delaware Code Annotated 'SS'2001(4)) or other confidential
information of the Company or any affiliate of the Company. A copy of such code
section is attached hereto. The Executive agrees not to disclose the terms or
the existence of this Agreement to any person, corporation or entity, except
that the Executive may communicate such terms to his counsel, tax and financial
advisors, members of his immediate family, prospective employers, tax
authorities and lenders.
8. Upon request by the Company, the Executive shall promptly return to
the Company all property of the Company and its subsidiaries in his possession
and control, including without limitation all lists, books and records (and all
copies thereof);
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all data and other information stored, recorded, maintained or operated by
electronic, mechanical or photographic process, whether computerized or not;
and, all copies of all management studies, business or strategic plans, budgets,
notebooks and all other printed, typed or written materials, documents and data
of or relating to the Company or any of its subsidiaries or affiliates.
9. Executive shall promptly disclose and assign in writing to the
Company any idea, discovery, invention or improvement relating to the business
of the Company and conceived or made by the Executive prior to the Termination
Date.
10. (a) This is an agreement for services to be rendered by the
Executive and cannot be assigned by him, and neither the Executive nor his
heirs, executor or administrator shall have any right to assign, encumber or
dispose of the right to receive any payments hereunder.
(b) This Agreement shall be binding upon, and inure to the benefit of
the Company and its successors and assigns.
11. Executive hereby accepts the consideration set forth in this
Agreement and agrees to waive all claims against the Company, their direct and
indirect subsidiaries and their respective former, current and future officers,
directors, employees, stockholders, agents, attorneys, and other representatives
and each of their predecessors and successors (collectively, "Affiliates") and
hereby releases and discharges the Company and its Affiliates from any and all
actions, causes of action, suits, debts, dues, sums of money, accounts,
covenants, contracts, controversies, agreements, promises, judgments, demands,
liability, claims and damages whatsoever, in law or equity, that Executive ever
had, now has, or hereafter can, shall or may have,
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for, upon or by reason of his employment with, service as a director of, or in
any other capacity relating to the Company and its Affiliates, including, but
not limited to, any claims arising under any federal, state or local law or
ordinance, tort, employment contract (express or implied), public policy, or any
other obligation, including, without limitation, any claims arising under Title
VII of the Civil Rights Act of 1964, as amended, the Age Discrimination in
Employment Act, as amended, the Older Workers Benefit Protection Act, the
Americans with Disabilities Act, the Family Medical Leave Act, any rights under
ERISA, Article 49B of the Annotated Code of Maryland, and all claims for
wrongful discharge, workers' compensation, wages, monetary or equitable relief,
vacation, compensation in lieu of vacation, disability, other employee fringe
benefits, benefit plans, medical plans, or attorneys' fees; provided, however,
that notwithstanding the foregoing, Executive reserves (i) any rights accrued
through the Termination Date that he may have pursuant to the Qualified Pension
Plan, PEP SERP, 2003 SERP, SIP, SSIP, Salary and Bonus Deferral Plan, Omnibus
Incentive Compensation Plan, 2001 ELTIP, 2002 ELTIP, 2003 ELTIP, Long Term Stock
Incentive Plan and Change in Control Agreement, (ii) his ability to seek and
obtain indemnification by the Company to the extent he is entitled to be
indemnified by the Company pursuant to this Agreement and the Restated
Certificate of Incorporation of the Company, and (iii) all claims relating to
the performance of the obligations of the Company under this Agreement,
including, without limitation, those set forth in Sections 4, 5 and 6 hereof.
12. (a) The Company agrees to indemnify and hold Executive
harmless from and against any costs, expenses (including, without limitation,
reasonable legal fees and expenses), judgments, fines, penalties and amounts
paid in settlement which
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he may incur or to which he may become subject on or after the date hereof by
reason of his prior service as an employee of the Company and its Affiliates to
the fullest extent permitted under, and in accordance with, the provisions of
the Restated Certificate of Incorporation of the Company and Delaware law.
(b) Executive agrees to indemnify and hold the Company and its
Affiliates harmless from and against any costs, expenses (including, without
limitation, reasonable legal fees and expenses), judgments and amounts paid in
settlement (but excluding any fines or penalties) that they may incur or to
which they may become subject on or after the date hereof by reason of any
failure on the part of the Company and its Affiliates to withhold properly any
amounts in accordance with the provisions of Section 18 hereof from the payments
made to Executive pursuant to this Agreement or otherwise.
13. Each of Executive and the Company hereby expressly covenant and
agree that the other party will suffer irreparable damage in the event any of
the provisions of Sections 7, 8, 9, 10 or 12 hereof are not performed or are
otherwise breached and that the other party shall be entitled as a matter of
right (without the need to prove actual damages) to an injunction or injunctions
and other relief to prevent a breach or violation by the other party and to
secure its enforcement of such provisions. Resort to such equitable relief,
however, shall not constitute a waiver of any other rights or remedies which the
party seeking such relief may have. The Company and the Executive hereby agree
that, as it is critically important to protect the confidentiality of
information relating to the individual bonuses awarded to executives of the
Company, the Company hereby agrees to deliver a certificate to the Executive
executed by the
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Company's Chief Executive Officer and its Chief Financial Officer certifying
that any bonus paid to the Executive under Section 6(b) hereof or under any of
the Plans has been correctly calculated as required by such Section or such
plans, and the Executive hereby agrees that absent manifest error he will rely
on such certificate and does not have the right to demand any further disclosure
of confidential financial information, including such other executives' bonuses.
14. (a) Executive represents and warrants to the Company as follows:
(i) he has full legal right, power and authority to enter into and perform all
of his obligations under this Agreement; (ii) the execution and delivery of this
Agreement by him will not violate any other agreement to which he is a party;
(iii) no consent of any third party is required for the execution and
performance of this Agreement by him; and (iv) this Agreement has been duly
executed and delivered by him and constitutes a legal, valid and binding
agreement of him, enforceable in accordance with its terms, subject to
bankruptcy, insolvency, fraudulent conveyance, reorganization, moratorium and
similar laws, now or hereafter in effect, affecting creditors' rights and
remedies generally and to general principles of equity.
(b) The Company represents and warrants to Executive as follows: (i) it
has all requisite corporate power and authority to enter into this Agreement and
to consummate the transactions contemplated hereby; (ii) the execution, delivery
and performance of this Agreement has been duly authorized and approved by all
required corporate action on the part of the Company; (iii) this Agreement has
been duly executed and delivered by the Company and is a legal, valid and
binding obligation of the Company, enforceable against it in accordance with its
terms, subject to bankruptcy,
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insolvency, fraudulent conveyance, reorganization, moratorium and similar laws,
now or hereafter in effect, affecting creditors' rights and remedies generally
and to general principles of equity; (iv) the execution and delivery of this
Agreement by the Company will not constitute a breach under (with or without
notice or the passage of time or both) or violate the Company's Restated
Certificate of Incorporation or by-laws, any agreement to which the Company is a
party or any law, regulation, rule or ordinance to which the Company is subject
and (v) no consent of any third party is required for the execution and
performance of this Agreement by the Company.
15. All notices, requests and other communications to any party
hereunder, other than a revocation notice provided under Section 21 below, shall
be given or made in writing and mailed (by registered or certified mail or by
overnight courier) or delivered by hand as follows:
(a) if to the Company, to it at:
Millennium Chemicals Inc.
00 Xxxxx Xxxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention: Senior Vice President, General Counsel and Secretary
(b) if to Executive, to him at:
or such address as such party may hereafter specify for the purpose of notice to
the other party hereto. Each such notice, request or other communication shall
be effective when, if delivered by hand, received by the party to which it is
addressed or, if mailed in the manner described above, on the third business day
after the date of mailing.
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16. The rights and obligations of the Company under this Agreement
shall inure to the benefit and be binding upon its successors and assigns and
any entity to which its assets and business may be transferred by operation of
law or otherwise. This Agreement is personal to Executive, and Executive shall
not, without the written consent of the Company, assign his rights or
obligations hereunder other than by will or the laws of descent and
distribution, but the provisions hereof shall inure to the benefit of and be
enforceable by Executive's heirs and legal representatives. The parties agree
that the obligations of the Company pursuant to Section 6 hereof shall survive
Executive's death and shall be performed in accordance with the terms thereof
(with payments to be made at the direction of the executor or executrix of
Executive's estate or other appropriate representative).
17. This Agreement shall be construed in accordance with and governed
by the substantive laws of the State of Delaware, without regard to the choice
of law rules thereof.
18. The Company shall have the right to withhold from all payments to
be made to Executive hereunder (other than payments made under Section 5 hereof)
and account for amounts which it reasonably determines may be subject to
applicable Federal, state and local income withholding taxes, Social Security
and other employment-related taxes.
19. Executive and the Company hereby expressly agree to reimburse and
indemnify the other party for any costs and expenses (including, without
limitation, reasonable legal fees and expenses) incurred by the other party to
the extent such
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other party successfully obtains relief from a court of competent jurisdiction
to enforce the terms and provisions of this Agreement.
20. This Agreement supersedes any prior contracts, understandings,
discussions and agreements between Executive and the Company and constitutes the
complete understanding between the parties with respect to the subject matter
hereof. No statement, representation, warranty or covenant has been made by
either party with respect hereto except as expressly set forth therein.
21. Executive acknowledges that he has been advised by the Company that
he is entitled to a period of at least forty-five (45) days within which to
consider this Agreement before signing it, if he wishes. Executive expressly
acknowledges that he has taken sufficient time to consider this Agreement before
signing it. This Agreement will not become effective or binding on the parties
until seven (7) days after it is signed by the Executive, during which time
Executive may revoke this Agreement if he wishes to do so. Any revocation must
be in writing and delivered to the Company at the address set forth in Section
15 hereof so as to be received within seven (7) days after it is signed by the
Executive.
22. Executive acknowledges and agrees that he is fully aware of his
right to discuss any and all aspects of this matter with an attorney of his
choice, that the Company has advised him to exercise this right, that he has
carefully read and fully understands all of the provisions of this Agreement,
that he is voluntarily entering into this Agreement, and that this Agreement
provides significant consideration in excess of the consideration to which he
would otherwise be entitled.
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23. Executive acknowledges and agrees that the document entitled Older
Workers Benefit Protection Act Informational Requirements for Severance
Benefits, attached hereto as Exhibit A, sets forth in an understandable manner,
the job title and ages of all individuals selected for the reduction in force
program, and the ages of those individuals by job title who were not selected
for the reduction in force program.
24. (a) This Agreement may be amended or waived if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by
Executive and the Company or in the case of a waiver, by the party against whom
the waiver is to be effective.
(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and shall not be exclusive of any rights or
remedies provided by law or at equity.
25. This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement shall become effective
when each party hereto shall have received counterparts hereof signed by the
other party hereto.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed in its corporate name by one of its officers duly authorized to enter
into
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and execute this Agreement, and Executive has manually signed his name hereto,
as of the date first written above.
Date:_____________________
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Xxxxxxx X Xxxxxxx
Millennium Chemicals Inc.; and
Millennium America Holdings Inc.
Date:_____________________ By:
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