SEVERANCE AGREEMENT
Exhibit 10.19
THIS SEVERANCE AGREEMENT (“Agreement”) is entered into as of the 7th day of
November, 2005, by and between OM Group, Inc., a Delaware corporation (the “Company”) and Xxxxxxx
Xxxxxxx Xxxxx, an executive officer of the Company (the “Executive”).
WHEREAS, the Company wishes to assure itself of the continuity of the Executive’s services;
and
WHEREAS, the Company and the Executive accordingly desire to enter into this Agreement on the
terms and conditions set forth below;
NOW, THEREFORE, in consideration of the premises and mutual covenants set forth herein, it is
hereby agreed by and between the parties as follows:
1.
Term of Agreement. The “Term” of this Agreement shall
commence on the date hereof and end on the third (3rd) anniversary of the date hereof;
provided, however, that the Compensation Committee of the Board of Directors may extend the Term in
one year increments. Notwithstanding the foregoing, this Agreement shall terminate automatically
in the event that any payment is made pursuant to Sections 5(c)-(g) of the Change in Control
Agreement between the Executive and the Company dated October 11, 2005.
2. Termination. (a) For purposes of this Agreement, “Termination”
shall mean: (i) termination of the employment of the Executive by the Company during the Term, for
any reason other than death, Disability (as defined below), or Cause (as described below), (ii) 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 Executive or
(iii) a material change in the Executive’s reporting structure, including such change as would
result from the resignation or termination of Xxxxxx X. Xxxxxxxxx as Chief Executive Officer of
the Company. Resignation by the Executive for any other reason shall not be
treated as a “Termination” under this Agreement.
(b) For purposes of this Agreement, “Disability” shall mean that 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.
(c) For purposes of this Agreement, “Cause” shall mean (i) commission of a felony by the
Executive (other than felonious operation of a motor vehicle), (ii) fraud, embezzlement or
misappropriation of funds, in each case involving or against the Company or any of its subsidiaries
or affiliates, (iii) an act or series of acts of dishonesty in the course of employment that are
materially inimical to the best interests of the Company or a subsidiary and, if the act or acts
are capable of being cured, the Executive fails to cure or take all reasonable steps to cure
within 30 days of notice from the Company to the Executive, and (iv) other than for
Disability, the Executive abandons and consistently fails to attempt to perform her duties and
responsibilities for 30 consecutive days after the Company has advised her in writing of that
failure.
3. Termination date and notice. Any notice of Termination of the
Executive’s employment by the Company or the Executive for any reason under Section 2 above shall
be upon no less than fifteen (15) days’ advance written notice (“Notice of Termination”). The date
of termination shall be the date specified by the Company or the Executive in the Notice of
Termination (“Date of Termination”). Any notices, requests, demands and other communications
provided for by this Agreement shall be sufficient if in writing and if personally delivered or
sent by registered or certified mail or by prepaid overnight courier to the Executive at the last
address the Executive has filed in writing with the Company or, in the case of the Company, to the
attention of the Secretary of the Company, at its principal executive offices.
4. Severance benefits. In the event of a
Termination described in Section 2 above, 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) | an amount equal to Executive’s annual base salary in effect prior to the date Notice of Termination is given; | ||
| (c) | the Executive’s bonus for the previously completed fiscal year of the Company, to the extent not theretofore paid; and | ||
| (d) | 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. |
The payments described in this Section 4 shall be payable on or before the tenth
(10th) day following the Termination Date pursuant to the Company’s normal payroll
practices, provided that the Executive executes a general release, which shall be in a form
mutually satisfactory to the Company and Executive and which shall include provisions that are
customary for a general release, including (i) provisions addressing the Executive’s release of the
Company from any future liability or suit, (ii) provisions addressing nonsolicitation of other
Company Executives and confidentiality, (iii) a six-month noncompete agreement pursuant to which
Executive shall agree not to acquire any financial or beneficial interest in, be employed by, or
own, manage, operate or control any entity (A) which is primarily engaged in any type of business
in which either the Company or its subsidiaries have been actively engaged, and (B) for which the
Executive has primary responsibility to act as general counsel immediately prior to the Termination
Date, (iv) provisions addressing nondisparagement of the Company and its officers, directors,
employees and agents; provided that the Company shall make a reciprocal
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commitment not to disparage the Executive, and (v) the waiver of continued participation in
any employee benefit or welfare plans.
5. Withholding. All payments to the Executive under this
Agreement will be subject to all applicable withholding of state and federal taxes.
6. Non-Alienation. The Executive shall not have any right
to pledge, hypothecate, anticipate or in any way create a lien upon any amounts provided under this
Agreement; and no amounts payable hereunder shall be assignable in anticipation of payment either
by voluntary or involuntary acts, or by operation of law. Nothing in this Section 6 shall limit
the Executive’s rights or powers to dispose of the Executive’s property by Last Will and Testament
or limit any rights or powers which the Executive’s executor or administrator would otherwise have.
This Agreement shall inure to the benefit of and be enforceable by the Executive’s personal or
legal representatives, executors, administrators, successors, heirs, designees, devisees and
legatees. If the Executive should die while any amount is still payable to the Executive hereunder
had the Executive continued to live, all such amounts shall be paid in accordance with the terms of
this Agreement to the Executive’s designated beneficiary or beneficiaries (pursuant to a written
beneficiary designation signed, dated, and delivered to the Company prior to the Executive’s
death), or if there are no beneficiaries, to the Executive’s estate.
7. Amendment. This Agreement may be amended or canceled
by mutual agreement of the parties in writing without the consent of any other person, and so long
as the Executive lives, no person, other than the parties hereto, shall have any rights under or
interest in this Agreement or the subject matter hereof.
8. Successors. This Agreement shall be binding upon and
inure to the benefit of the Company and any successor of the Company.
9. Employment Status. Nothing herein shall be deemed to
create an employment agreement between the Company and the Executive providing for the employment
of the Executive by the Company for any fixed period of time. The Executive’s employment with the
Company is terminable at will by the Company or the Executive, and each shall have the right to
terminate the Executive’s employment with the Company at any time, with or without Cause, subject
to (i) the notice provisions of this Agreement, and (ii) the Company’s obligation to provide
severance benefits if and as required by Section 4.
10. Severability. In the event that any provision or
portion of this Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall be unaffected thereby and shall remain in full force
and effect.
11. Counterparts. This Agreement may be
executed in one or more counterparts, each of which shall be an original but all of which together
shall constitute one and the same document.
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IN WITNESS WHEREOF, the Company and the Executive have executed this Agreement as of the day and
year first above written.
| COMPANY: | ||||
| OM GROUP, INC. | ||||
| By: | ||||
| Title: | ||||
| EXECUTIVE: | ||||
| Xxxxxxx Xxxxxxx Xxxxx | ||||
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