Exhibit 10(q)
SENIOR EXECUTIVE RETENTION AGREEMENT
Agreement between Xxxx Corporation, a Virginia corporation ("Xxxx"), and
(the "Executive"), dated as of , 1999.
Xxxx and the Executive agree as follows:
1. Definitions. As used in this Agreement:
(a) "Brass" means the Brass division of Olin as operated on the date
hereof with such modifications thereto as are made in the ordinary course
of business.
(b) "Cause" means the willful and continued failure of the Executive to
substantially perform his duties; the willful engaging by the Executive in
gross misconduct significantly and demonstrably financially injurious to
the employer, or willful misconduct by the Executive in the course of his
employment which is a felony or fraud. No act or failure to act on the part
of the Executive will be considered "willful" unless done or omitted not in
good faith and without reasonable belief that the action or omission was in
the interests of the employer or not opposed to the interests of the
employer.
(c) "Chlor Alkali" means the Chlor Alkali Products division of Olin as
operated on the date hereof with such modifications thereto as are made in
the ordinary course of business.
(d) "Compete" means that the Executive becomes an owner, employee,
officer, director, partner or consultant of a business that competes with
the business of Olin, or any division or subsidiary of Olin, by selling,
offering to sell, or producing any product substantially similar to those
then sold or produced by Olin or any such division or subsidiary; provided
that the Executive shall not be deemed to Compete solely by virtue of
ownership of less than one percent of the outstanding securities of a
company whose stock is traded on a national securities exchange or by the
National Association of Securities Dealers Automated Quotation System.
(e) "Division Disposition" means:
(i) Any direct or indirect sale or other disposition of all or
substantially all of the business or assets of Chlor Alkali or Brass,
or both, in one or more transactions, to any person, partnership, joint
venture, corporation or other entity other than Olin, or a direct or
indirect majority-owned subsidiary of Olin; or
(ii) Any transaction by which Olin ceases to be the beneficial owner
of a majority of the capital stock or other equity interests in any
subsidiary corporation or other entity to which all or substantially
all of the assets or business of Chlor Alkali or Brass or both have
been transferred.
(f) "Employment Term" means the period beginning on the date of this
Agreement and ending on December 31, 2001.
(g) "Good Reason" means that:
(1) The employer reduces the Executive's total direct compensation
( i.e., the sum of base salary, the standard annual award under
short-term annual incentive compensation plans or programs and
standard awards under long-term incentive compensation plans or
programs) from the levels in effect on the date of this Agreement
other than a reduction due solely to the employer's financial
performance provided such performance is a relevant criterion under
such plan;
(2) The Executive's duties, position or reporting responsibilities
are diminished, provided that a reduction in the scale of the
Executive's duties solely as an effect of a Division Disposition or
the reasonable addition of executive responsibilities as a result of
realignment of duties shall not constitute Good Reason;
(3) The employer fails to substantially maintain benefit plans as
Olin's are in effect on the date of this Agreement, unless
reasonably equivalent arrangements (embodied in an on-going
substitute or alternative plan) have been made with respect to such
plans; or
(4) The employer requires the Executive to relocate the
Executive's then office to an area which is not within reasonable
commuting distance (i.e. no more than 50 miles one way), on a daily
basis, from the Executive's then residence.
(h) "Net After Tax Benefit" means the sum of (i) the total amounts
payable to the Executive under this Agreement, plus (ii) all other payments
and benefits which the Executive receives or is entitled to receive from
Olin that would constitute a Parachute Payment, less (iii) the amount of
federal income taxes payable with respect to the foregoing calculated at
the maximum marginal income tax rate in effect for the year in which the
foregoing shall be paid to the Executive, less (iv) the amount of excise
taxes imposed with respect to the payments and benefits described in (i)
and (ii) above by Section 4999 of the Internal Revenue Code of 1986, as
amended.
(i) "Parachute Payment" means any payment deemed to constitute a
"parachute payment" as defined in Section 280G of the Internal Revenue Code
of 1986, as amended.
(j) "Retention Factor" means a number equal to the number of months
remaining in the Employment Term at the time of a termination described in
Section 4, rounded up to the nearest whole month.
(k) "Retention Payment" means an amount equal to the Retention Factor,
multiplied by the sum of: (i) the Executive's monthly salary in effect
immediately prior to the termination; plus (ii) an amount equal to one-
twelfth of the higher of (A) Executive's standard annual award under Olin's
short-term annual incentive compensation plans or programs at the time of
the termination, or (B) the Executive's average annual award actually paid
under Olin's short-term annual incentive compensation plans or programs
(including zero if nothing was paid or deferred, but including any portion
the Executive elected to defer) for the three calendar years immediately
preceding the termination referred to in Section 4.
(l) "Tier 1 Executive Agreement" means the Executive Agreement, dated as
of December 14, 1998, between Olin and the Executive, and any amendment to
or substitution for such agreement.
2. Previous Agreement. This Agreement is in addition to and is not intended
to replace or supersede the Tier 1 Executive Agreement, or any successor
agreement, and does not modify or amend the Tier 1 Executive Agreement.
3. Term. This Agreement expires at the close of business on the earlier of
(i) December 31, 2001, or (ii) a Change in Control as defined in the Tier 1
Executive Agreement provided that if Executive accepts employment with Brass
or Chlor Alkali or a successor entity or one of their affiliates in connection
with a Division Disposition, the Agreement shall continue for a period of
three years after the date Executive begins such new employment. In the event
of the Executive's death while employed by Olin, this Agreement shall
terminate and be of no further force or effect on the date of his or her
death; provided that the Executive's death will not affect any of the
Executive's rights resulting from an event occurring prior to death.
4. Retention Payment and Related Benefits. In the event that (i) Olin
terminates the Executive's employment prior to the end of the Employment Term,
other than for Cause or Disability (as defined in the Tier 1 Executive
Agreement); or (ii) the Executive terminates his or her employment with Olin
for Good Reason after giving Olin at least three months' prior written notice:
(a) Olin will pay the Executive an amount equal to the Retention Payment,
in equal monthly installments for the remainder of the Employment Term,
beginning on the first day of the month immediately following the month in
which the termination occurs;
(b) Executive will receive service credit under all Olin pension plans
for which the Executive was eligible at the time of the termination (i.e.,
under Olin's qualified pension plans to the extent permitted under then
applicable law; otherwise such credit will be reflected in a supplementary
payment from Olin under one or more supplementary non-qualified pension
plans, to be due at the times and in the manner payments are due the
Executive under such supplementary non-qualified plan(s)) for a number of
months equal to the Retention Factor (such credit to be in addition to and
to run consecutively after, rather than concurrently with, any credit under
the Tier 1 Executive Agreement);
(c) Executive (including covered dependents) will continue to enjoy
coverage on the same basis as a similarly situated active employee under
all Olin medical, dental and life insurance plans to the extent Executive
was enjoying such coverage immediately prior to the termination, for a
number of months equal to the Retention Factor, (such coverage to be in
addition to, and to run consecutively after, rather than concurrently with,
any coverage under the Tier 1 Executive Agreement) and the Executive's
entitlement to insurance coverage under the Consolidated Omnibus Budget
Reconciliation Act would commence at the end of such period, without
offset;
(d) All stock options and shares of restricted stock, or other stock-
based compensation held by Executive immediately prior to the termination
shall vest effective upon the termination, and the exercise period for all
such options or other stock-based compensation shall be extended until the
full term of the relevant award;
(e) The balance (if any) in the Executive's "EVA Bonus Bank" at the time
of termination shall be paid in full, or, if a pro rata EVA Plan payout is
required under that Plan, then as soon as possible thereafter; and
(f) Any vesting requirements under the Olin Supplemental Contributing
Employee Ownership Plan shall be deemed satisfied in full.
(g) Each monthly installment payable for the remainder of the Employment
Term as provided under Section 4(a) shall be offset by amounts Executive
received as cash compensation from another "regular job" in the immediately
preceding month.
5. Payments Upon Termination by a Division. In the event that, in connection
with a Division Disposition, the Executive accepts employment with, and
becomes employed by, the Division or a successor entity or one of their
affiliates, and within three (3) years thereafter, (a) such new employer
terminates the Executive's employment, other than for Cause or Disability (as
defined in the Tier 1 Executive Agreement); or (b) the Executive terminates
his or her employment with such new employer for Good Reason:
(a) Olin will pay the Executive an amount equal to the product of: (i)
the Retention Factor plus twelve, multiplied by (ii) the sum of (A) the
Executive's monthly salary in effect at the time of the Division
Disposition; plus (B) one-twelfth of the higher of (I) Executive's standard
annual award under Olin's short-term annual incentive compensation plans or
programs at the time of the Division Disposition, or (II) the Executive's
average annual award actually paid under Olin's short-term annual incentive
compensation plans or programs (including zero if nothing was paid or
deferred, but including any portion the Executive elected to defer) for the
three calendar years
immediately preceding the Division Disposition. Such payment shall be made
in equal monthly installments during the remainder of the Employment Term,
beginning on the first day of the month immediately following the month in
which such termination occurs. Such payment shall be reduced by any
severance, job transition or employment termination payments such Executive
receives in cash from his or her new employer in connection with the
termination, and by any cash payments Executive receives under paragraph
4(f) of the Tier 1 Executive Agreement;
(b) Executive will receive service credit under all Olin pension plans
for which the Executive was eligible at the time of the Division
Disposition (i.e., under Olin's qualified pension plans to the extent
permitted under then applicable law; otherwise such credit will be
reflected in a supplementary payment from Olin under one or more
supplementary non-qualified pension plans, to be due at the times and in
the manner payments are due the Executive under such supplementary non-
qualified plan(s)), for a number of months equal to the Retention Factor
plus twelve (net of any number of months of such credit, if any, that
Executive receives under the Tier 1 Executive Agreement);
(c) Executive (including covered dependents) will continue to enjoy
coverage on the same basis as a similarly situated active employee under
all Olin medical, dental and life insurance plans to the extent Executive
was enjoying such coverage immediately prior to the Division Disposition,
for a number of months equal to the Retention Factor plus twelve, (less the
number of months, if any, of such coverage that Executive receives under
the Tier 1 Executive Agreement) and the Executive's entitlement to
insurance coverage under the Consolidated Omnibus Budget Reconciliation Act
will commence at the end of such period, without offset; and
(d) Executive shall be entitled, at Olin's expense, to outplacement
counseling and associated services in accordance with Olin's customary
practice at the time with respect to senior executives terminated without
Cause, but only to the extent Executive does not receive such benefits
under the Tier 1 Executive Agreement.
(e) Any amounts payable under Section 5(a) shall be offset by amounts
Executive receives as cash compensation for full-time employment or full-
time consulting services.
6. Limitation on "Parachute" Payments. If any amounts payable to the
Executive pursuant to this Agreement which are deemed by the Executive to
constitute Parachute Payments, when added to any other payments which are
deemed by the Executive to constitute Parachute Payments, would result in the
imposition on the Executive of an excise tax under Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code"), the amounts payable
under Section 4 or 5, as the case may be, shall be reduced by the smallest
amount necessary to avoid the imposition of such excise tax; but shall be
reduced only if, by reason of such reduction, the Executive's Net After Tax
Benefit shall exceed the Net After Tax Benefit if such reduction were not
made. The foregoing calculations (including any calculations required under
the definition of Net After Tax Benefit) shall be made, at Olin's expense, by
Olin and the Executive. If no agreement on the calculations is reached within
five days after the date of the termination triggering the payment, then the
calculations shall be made, at Olin's expense by a nationally-recognized
accounting firm and outside counsel mutually acceptable to the Executive and
Olin. In the event it becomes necessary to limit any payments under this
Agreement, the Executive's insurance shall be the last payments to be so
limited; any other payments payable under this Agreement shall be payable when
due until the remaining maximum permissible amount has been paid to the
Executive under this Section 6.
7. Successors; Offsets; Non-competition; Release.
(a) Olin will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all
of the business or assets of Olin, by agreement, in form and substance
satisfactory to the Executive, expressly to assume and agree to perform
this Agreement in the same manner and to the same extent that Olin would be
required
to perform if no such succession had taken place. Failure of Olin to obtain
such assumption and agreement prior to the effectiveness of any such
succession will be a breach of this Agreement and entitle the Executive to
compensation from Olin in the same amount and on the same terms as the
Executive would be entitled to hereunder had a triggering event occurred on
the succession date. As used in this Agreement, "Olin" means Olin as
defined in the preamble to this Agreement and any successor to its business
or assets which executes and delivers this Agreement or which otherwise
becomes bound by all the terms and provisions of this Agreement by
operation of law or otherwise.
(b) This Agreement shall be enforceable by the Executive's personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
(c) In the event that, without Olin's consent, which consent will not be
unreasonably withheld, the Executive Competes during the Employment Term,
the Executive will forfeit the right to receive amounts due from Olin under
this Agreement after the date Executive begins to Compete and will forfeit
any right to continued insurance coverage under this Agreement after such
date; provided that nothing in this Section shall be deemed to reduce or
otherwise impair in any manner, Executive's right to receive payments or
insurance benefits, if any, under any other plan, agreement or arrangement.
(d) Following termination of Executive's employment, Olin may require
Executive to release Olin from any and all employment, wrongful termination
and/or discrimination claims as a condition to making payments under this
Agreement, any such release to be in substantially the form required of
other former Olin employees.
(e) The Executive will not be required to mitigate the amount of any
payment provided for in this Agreement by seeking other employment or
otherwise. Nothing in this Agreement, including any offset or similar
provision will be deemed to reduce or limit the rights which the Executive
may have under any other employee benefit plan, policy or arrangement of
Olin.
8. Notices. For the purpose of this Agreement, notices and all other
communications provided for herein shall be in writing and shall be deemed to
have been duly given when delivered or mailed by United States registered or
certified mail, return receipt requested, postage prepaid, addressed as
follows:
If to the Executive:
If to the Company: Xxxx Corporation
000 Xxxxxxx 7
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
Attention: Corporate Secretary
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.
9. Governing Law. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the State of Connecticut
(without giving effect to its conflicts of law).
10. 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 Olin. 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. 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.
11. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of which
together will constitute one and the same Agreement.
12. Withholding of Taxes. Olin may withhold from any benefits payable under
this Agreement all federal, state, city or other taxes as shall be required
pursuant to any law or governmental regulation or ruling.
13. Non-assignability. This Agreement is personal in nature and neither of
the parties hereto shall, without the consent of the other, assign or transfer
this Agreement or any rights or obligations hereunder, except as provided in
paragraph 7 above or except to any direct or indirect majority owned
subsidiary of Olin. Without limiting the foregoing, the Executive's right to
receive payments hereunder shall not be assignable or transferable, whether by
pledge, creation of a security interest or otherwise, other than a transfer by
his will or by the laws of descent or distribution, and, in the event of any
attempted assignment or transfer by the Executive contrary to this paragraph,
Olin shall have no liability to pay any amount so attempted to be assigned or
transferred.
14. No Employment Right. This Agreement shall not be deemed to confer on the
Executive a right to continued employment with Olin.
15. Disputes/Arbitration.
(a) Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration at Olin's corporate
headquarters in accordance with the rules of the American Arbitration
Association then in effect. Judgment may be entered on the arbitrator's
award in any court having jurisdiction; provided, however, that the
Executive shall be entitled to seek specific performance of the Executive's
right to be paid during the pendency of any dispute or controversy arising
under or in connection with this Agreement.
(b) Olin shall pay all reasonable legal fees and expenses, as they become
due, which the Executive may incur to enforce this Agreement through
arbitration or otherwise unless the arbitrator determines that Executive
had no reasonable basis for his claim. Should Olin dispute the entitlement
of the Executive to such fees and expenses, the burden of proof shall be on
Olin to establish that the Executive had no reasonable basis for his claim.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the day and year first above set forth.
Xxxx Corporation
By:
__________________________________
Accepted and Agreed:
_________________________
Name
Title:
