EXHIBIT 10.6
AGREEMENT
WHEREAS, AMCOL International Corporation (the "Company") considers it
essential and in the best interests of the Company and its shareholders to
xxxxxx the continued employment of its key management personnel;
WHEREAS, Xxxx X. Xxxxxxx ("Employee") is considered a key management
employee, currently serving as Senior Vice-President and Chief Financial Officer
of the Company; and
WHEREAS, the Company desires to assure the future continuity of Employee's
services in the event of any actual or threatened "Change in Control" (as
defined in Section 6 below) of the Company.
IT IS THEREFORE AGREED AS FOLLOWS:
1. Effect of Agreement. This Agreement shall be effective and binding
immediately upon its execution. However, except as specifically provided herein,
this Agreement shall not alter materially Employee's duties and obligations to
the Company and the remuneration and benefits which Employee may reasonably
expect to receive from the Company in the absence of a Change in Control.
2. Employment On and After Change in Control. Provided that the employee is
an employee of the Company immediately prior to a Change in Control, the Company
shall employ Employee, and Employee shall accept such employment, effective upon
such Change in Control for a period of thirty-six (36) months after said Change
in Control subject to the terms and conditions stated herein.
3. Duties After Change in Control. Employee agrees that during the term of
his employment with the Company after a Change in Control, he shall perform the
duties described in Section 12 below and such other duties for the Company and
its subsidiaries consistent with his experience and training as the Board of
Directors of the Company (the "Board") or the Board's representatives shall
determine from time to time, which duties shall be at least substantially equal
in status, dignity and character to his duties at the date hereof. He shall also
have the title of Vice-President and Chief Financial Officer. Employee further
agrees to devote his entire working time and attention to the business of the
Company and its subsidiaries and use his best efforts to promote such business.
4. Compensation Prior to a Change in Control. Prior to a Change in Control
the Company agrees to pay Employee compensation for his services in an amount,
and to provide him with life insurance, disability, health and other benefits,
at least equal to that which he presently receives, only with such changes as
shall be agreed upon between Employee and the Company. For the purpose of this
Section, compensation does not include any bonus or other incentive compensation
plan or stock purchase plan, which may vary from year to year at the discretion
of the Company.
5. Termination of Employment Prior to a Change of Control. Employee shall
be entitled to terminate his employment prior to a Change in Control at any time
upon sixty (60) days' prior written notice. The Company, shall be able to
terminate Employee's employment at any time prior to a Change in Control with or
without cause upon sixty (60) days' prior written notice (or the payment of
salary in lieu thereof). This Section shall not be construed to reduce any
accrued benefits payable in connection with any termination of Employee's
employment prior to a Change in Control.
Nothing expressed or implied in this Agreement shall create any right or
duty on the part of the Company or Employee to have Employee remain in the
employment of the Company prior to a Change in Control.
6. Termination of Employment On or After Change in Control.
(a) For purposes of this Agreement the term "Change in Control" means the
change in the legal or beneficial ownership of fifty-one percent (51%)
of the shares of the Company's common stock within a six-month period
other than by death or operation of law, or the sale of ninety percent
(90%) or more of the Company's assets within a six-month period.
(b) Employee's employment on and after a Change in Control may be
terminated with just cause by the Company at any time upon not less
than ten (10) days' prior written notice. Prior to termination for
just cause on and after a Change in Control, the Board of Directors
shall by majority vote have declared that Employee's termination is
for just cause specifically stating the basis for such determination.
In the event such a termination occurs, the provisions of Sections
9(a) and 12 below shall apply.
Employee's employment may be terminated on or after a Change in
Control without just cause pursuant to the constructive termination
procedures described in the next paragraph or by the Company giving
Employee not less than thirty (30) days' prior written notice. In the
event Employee's employment is terminated pursuant to the preceding
sentence:
(i) the provisions of Section 9(b) below shall apply; and
(ii) although Employee's employment term shall be deemed terminated at
the end of such notice period (or, in the case of a constructive
termination described in the next paragraph, as of the date
Employee notifies the Company of such termination), such
termination shall in no way affect the term of this Agreement or
Employee's duties and obligations under Section 12 below.
For purposes of this Section 6(b), Employee shall be considered as having been
terminated by the Company on or after a Change in Control for other than just
cause provided that he has notified the Company of any of the following within
ten (10) days of the occurrence thereof:
(i) the assignment to Employee of any duties of lesser status,
dignity and character than his duties immediately prior to the
effective date of the Change in Control or a substantial
reduction in the nature or status of his responsibilities from
those in effect immediately prior to the effective date of the
Change in Control;
(ii) a post-Change in Control reduction by the Company in Employee's
annual base salary or bonus or incentive plan (as in effect
immediately prior to the effective date of the Change in
Control);
(iii)relocation of Employee's office to a location which is more than
35 miles from the location in which Employee principally works
for the Company immediately prior to the effective date of the
Change in Control; the relocation of the appropriate principal
executive office of the Company or the Company's operating
division or subsidiary for which Employee performed the majority
of his services for the Company during the year prior to the
effective date of the Change in Control to a location which is
more than 35 miles from the location of such office immediately
prior to such date; or his being required by the Company in order
to perform duties of substantially equal status, dignity and
character to those duties he performed immediately prior to the
effective date of the Change in Control to travel on the
Company's business to a substantially greater extent than is
consistent with his business travel obligations as of such date;
or
(iv) the failure of the Company to continue to provide Employee with
benefits substantially equivalent to those enjoyed by him under
any of the Company's life insurance, medical, health and accident
or disability plans in which he was participating immediately
prior to the effective date of the Change in Control, the taking
of any action by the Company which would directly or indirectly
materially reduce any of such benefits or deprive him of any
material fringe benefit enjoyed by him immediately prior to
effective date of the Change in Control, or the failure of the
Company to provide him with at least the number of paid vacation
days to which he is entitled on the basis of years of service
under the Company's normal vacation policy in effect immediately
prior to the effective date of the Change in Control.
(c) In the event Employee's employment is terminated on or after a
Change in Control in any manner not described in Section 6(b)
above:
(i) the provisions of Section 9(b) shall not apply and Employee
shall instead receive the sums and benefits described in
Section 9(a); and
(ii) such termination shall in no way affect the term of this
Agreement or employee's duties or obligations under Section
12 below.
(d) Any termination of employment of Employee following the
commencement of any discussions by a shareholder or group of
shareholders owning legally or beneficially more than 20% of the
common stock or an officially designated representative of the
Board of Directors with a third party that results within 180
days in a Change in Control shall (unless such termination is for
cause or wholly unrelated to such discussions) be deemed to be a
termination of Employee on and after a Change in Control for
purposes of this Agreement.
7. Notice of Termination. Any termination by the Company or assertion of
termination by Employee shall be communicated by written notice of termination
to the other party at the following address:
AMCOL International Corporation Xxxx X. Xxxxxxx
One North Arlington Senior Vice-President and
0000 Xxxx Xxxxx Xxxxx Chief Financial Officer
Xxxxxxxxx Xxxxxxx, XX 00000 AMCOL International Corporation
ATTN: Chairman of the Board One North Arlington
0000 Xxxx Xxxxx Xxxxx
Xxxxxxxxx Xxxxxxx, XX 00000
8. Disability. If as a result of Employee's incapacity due to physical or
mental illness, he shall have been absent from his duties with the Company for
one hundred eighty (180) days within any twelve-(12)- consecutive-month period
and within thirty (30) days after written notice of the Company's intention to
terminate his employment is given, Employee shall not have returned to the
performance of his duties with the Company substantially on a full-time basis,
the Company may terminate his employment for disability. This shall not
constitute a termination for the purposes of obtaining benefits pursuant to
Section 9.
9. Benefits Upon Termination And Leave Of Employment On or After Change in
the Control.
(a) If Employee is terminated for just cause on or after a Change in
Control, he shall only receive the accrued sums and benefits
payable to him through the date he is terminated; the provisions
of Section 9(b) below shall not be applicable in such case and
Employee shall not receive (or shall cease receiving) the
payments and benefits described in Section 9(b).
(b) Subject to Employee's compliance with the provisions of Section
12(a) below, if Employee is terminated during the thirty-six (36)
month period beginning on and continuing after a Change in
Control other than for just cause (either at the discretion of
the Company's management or constructively by the operation of
Section 6), he shall receive the following payments and benefits
in lieu of any other sums or benefits otherwise payable to him by
the Company:
(i) all then accrued pay, benefits, executive compensation and
fringe benefits, including (but not limited to) pro rata
bonus and incentive plan earnings;
(ii) medical, health and disability benefits which are
substantially similar to the benefits the Company is
providing him as of the date of his employment is
terminated for a period of thirty-six (36) months
thereafter; and
(iii) one dollar less than three times his base period
compensation.
The foregoing payments and benefits shall be deemed compensation payable
for the duties to be performed by Employee pursuant to Section 12 below. For
purposes of this Agreement, (A) Employee's "base period compensation" is the
average annual "compensation" (as defined below) which was includable in his
gross income for his base period (i.e., his most recent five taxable years
ending before the date of the Change in Control); and (B) if Employee's base
period includes a short taxable year or less than all of a taxable year,
compensation for such short or incomplete taxable year shall be annualized
before determining his average annual compensation for the base period. (In
annualizing compensation, the frequency with which payments are expected to be
made over an annual period shall be taken into account. Thus, any amount of
compensation for such a short or incomplete taxable year that represents a
payment that would not be made more than once per year shall not be annualized).
The sum payable to Employee pursuant to Section 9(b)(iii) shall in any and all
cases be reduced by any compensation which Employee receives from the Company
from the date of the Change in Control until the termination date, excluding any
non-qualified deferred compensation, stock option compensation or other stock
incentive bonus plan compensation so received. For purposes of Section 9(iii)
and the definitions pertaining to said Section, Employee's "compensation" is the
compensation which was payable to him by the Company or a related entity
determined without regard to the following Sections of the Internal Revenue Code
of 1986, as amended (the "Code"): 125 (cafeteria plans), 402(a)(8) (cash or
deferred arrangements), 402(h)(1)(B) (elective contributions to simplified
employee pensions), and, in the case of employer contributions made pursuant to
a salary reduction agreement, 403(b) (tax sheltered annuities).
Except for the benefits described in Section 9(b)(ii) above, the sums due
pursuant to this Section 9(b) shall be paid in up to three (3) annual
installments commencing thirty (30) days after the sums become due. If on or
after the date any payment becomes due hereunder the Company at any time has a
funded debt-to-total capitalization ratio which equals or exceeds 1:1, upon
Employee's written request, the Company shall secure its payment of the
remaining annual installments with a letter of credit or other security
instrument as shall be reasonably acceptable to Employee. Such letter of credit
or other security instrument shall provide Employee with the ability to receive
the remaining installment(s) only if his payment is delinquent. All sums due
hereunder shall be subject to appropriate withholding and statutory
requirements. Employee shall not be required to mitigate the amount of any
payment provided for in this Section 9(b) by seeking other employment or
otherwise. Notwithstanding anything stated in this Section 9(b) to the contrary,
however, the amount of any payment or benefit provided for in this Section 9(b)
shall be reduced by no more than 50% by any compensation earned by Employee as a
result of employment by another employer and the Company shall not be required
to provide medical, health and/or disability benefits to the extent such
benefits would duplicate benefits received by Employee in connection with his
employment with any new employer.
Notwithstanding anything stated in this Agreement to the contrary, if the
amounts which are payable and the benefits which are provided to Employee under
this Agreement, either alone or together with other payments which Employee has
a right to receive from the Company or any of its affiliates, would constitute a
"parachute payment" (as defined in Code Section 280G), such amounts and benefits
shall be reduced, as necessary, to the largest amount as will result in no
portion of said amounts and benefits being either not deductible as a result of
Code Section 280G or subject to the excise tax imposed by Code Section 4999. The
determination of any reduction in said amounts and benefits pursuant to the
foregoing proviso shall be made by the Company in good faith, and such
determination shall be conclusive and binding on Employee. The amounts provided
to Employee under this Agreement in connection with a Change in Control, if any,
shall be deemed allocated to such amounts and/or benefits to be paid and/or
provided as the Company's Board of Directors in its sole discretion shall
determine.
10. Special Situations. The parties recognize that under certain
circumstances a Change in Control may occur under conditions which make it
inappropriate for Employee to receive the termination benefits or protection set
forth in this Agreement. Therefore, in the event that a Change in Control occurs
for any one of the following reasons, the provisions of Sections 2, 6 and 9
shall not apply:
(a) the purchase of more than fifty percent (50%) of the stock of the
Company by an employee stock ownership plan or similar employee
benefit plan of which Employee is a participant; or
(b) the purchase of more than fifty percent (50%) of the stock or
ninety percent (90%) of the assets of the Company by a group of
individuals or entities including Employee as a member or
participant, including but not limited to those transactions
commonly known as a leveraged or other forms of management buy-
outs.
11. Disputes. Any dispute arising under this Agreement (except Section 12)
shall be promptly submitted to arbitration under the Rules of the American
Arbitration Association. An arbitrator is to be mutually agreed upon by the
parties or upon failure of agreement, designated by the American Arbitration
Association.
12. Non-Competition, Non-Solicitation, and Confidentiality.
(a) In consideration of this Agreement and other good and valuable
consideration, Employee agrees that for so long as he is employed
by the Company and for thirty-six (36) months thereafter he shall
not own manage, operate, control, be employed by or otherwise
engage in any competitive business. Employee's agreement pursuant
to the preceding sentence shall be in addition to any other
agreement or legal obligation he may have with or to the Company.
For purposes of the preceding sentence, a "competitive business"
is any business engaged in the production, refinement or sale of
Bentonite and/or any business conducted by the Company, its
affiliates or any subsidiaries thereof as of the date Employee's
employment is terminated. A business which is conducted by the
Company, its affiliates or any subsidiaries which is subsequently
sold by the Company is not a competitive business as of the date
such business is sold. An "affiliate" of the Company is any
company which either controls, is controlled by or is under
common control with the Company. The phrase "any business
conducted by the Company, its affiliates or any subsidiaries
thereof" includes not only current businesses but also any new
products, product lines or use of processes under development,
consideration or investigation on the date Employee's employment
with the Company is terminated.
Employee also agrees that during the thirty-six (36) month
period described in the first sentence of this Section 12(a) he
will not directly or indirectly, on behalf of himself or any
other person or entity, make a solicitation or conduct business,
with any customer or potential customer of the Company with which
he had contact while employed by the Company, its affiliates
and/or any subsidiaries thereof, with respect to any products or
services which are competitive with any business conducted by the
Company, its affiliates or any subsidiaries thereof. For purposes
of the preceding sentence, a "customer" is any person or entity
that has purchased goods or services from the Company, its
affiliates or any subsidiaries thereof within the twenty-four
(24) month period ending on the date Employee's employment is
terminated. A "potential customer" is any person or entity that
the Company solicited for business within twelve (12) months
prior to the date Employee's employment with the Company is
terminated.
The Company and Employee recognize that his
responsibilities have included contacts with, and analysis of,
customers and potential customers throughout the United States
and certain foreign countries, in addition to certain operational
matters. Employee's contacts on behalf of the Company represent a
substantial asset of the Company which are entitled to
protection. In recognition of this situation, the covenants set
forth in this Section 12 shall apply to competition and
solicitation in each of the following countries in which the
Company, its affiliates and/or the subsidiaries thereof has
(have) conducted $500,000 or more of the business during the
12-month period ending on the date Employee's employment with the
Company is terminated:
(i) the United States;
(ii) the United Kingdom;
(iii) Germany;
(iv) Japan; and
(v) Canada.
Before and forever after his termination or resignation,
Employee shall keep confidential and refrain from utilizing or
disseminating any confidential, proprietary or trade secret
information of the Company for any purpose other than furthering
the business interests of the Company.
(b) During Employee's employment hereunder and during three (3) years
following his resignation or the termination of his employment
hereunder for any reason, Employee will not induce or attempt to
influence any present or future employee of the Company, its
affiliates or any subsidiaries thereof to leave its employ.
13. Other Agreements. Except to the extent expressly set forth herein, this
Agreement shall not modify or lessen any benefit or compensation to which
Employee is entitled under any agreement between Employee and the Company or
under any plan maintained by the Company in which he participates or
participated. Benefits or compensation shall be payable thereunder, if at all,
according to the terms of the applicable plan(s) or agree ment(s). The terms of
this Agreement shall supersede any existing agreement between Employee and the
Company executed prior to the date hereof to the extent any such Agreement is
inconsistent with the terms hereof.
14. Successors; Binding Agreement. The Company will require any successor
(whether direct or indirect by purchase, merger, consolidation or otherwise, to
all or substantially all of the business and/or assets of the Company) to
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.
This Agreement shall inure to the benefit of and be enforceable by
Employee's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees.
15. Injunction. The remedy at law for any breach of Section 12 will be
inadequate and the Company, its affiliates and any subsidiaries thereof would
suffer continuing and irreparable
injury to their business as a direct result of
any such breach. Accordingly, notwithstanding anything stated herein, if
Employee shall breach or fail to perform any term, condition or duty contained
in Section 12 hereof, then, in such event, the Company shall be entitled to
institute and prosecute proceedings in any court of competent jurisdiction,
either in law or in equity, to obtain the specific performance thereof by
Employee or to seek a temporary restraining order or injunctive relief, without
any requirement to show actual damages or post bond, to restrict Employee from
violating the provisions of Section 12; however, nothing herein shall be
construed to prevent the Company seeking such other remedy in the courts, in
case of any breach of this Agreement by Employee, as the Company may elect or
invoke. If court proceedings are instituted by the Company to enforce Section 12
hereof, and the Company is the prevailing party, the Company shall receive, in
addition to any damages awarded, reasonable attorneys' fees, court costs and
ancillary expenses.
16. Miscellaneous. This Agreement may not be modified or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by
Employee and such officers of the Company as may be specifically designated by
its Board for that purpose. Except for any failure to give the ten (10) day
notice described in Section 6(b) above, the failure of either party to this
Agreement to object to any breach by the other party or the non-breaching
party's conduct or conduct forbearance shall not constitute a waiver of that
party's rights to enforce this Agreement. 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 any subsequent breach by such other party or any
similar or dissimilar provisions or conditions at the same or 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 expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Illinois.
17. Severability. The parties hereto intend this Agreement to be enforced
to the maximum extent permitted by law. In the event any provision of this
Agreement is deemed to be invalid or unenforceable by any court of competent
jurisdiction, such provisions shall be deemed to be restricted in scope or
otherwise modified to the extent necessary to render the same valid and
enforceable. In the event the provisions of Section 12 cannot be modified or
restricted so as to be valid and enforceable, then the same as well as the
Company's obligation to make any payment or transfer any benefit to Employee in
connection with any termination of Employee's employment shall be deemed excised
from this Agreement, and this Agreement shall be construed and enforced as if
such provisions had originally been incorporated herein as so restricted or
modified or as if such provisions had not originally been contained herein, as
the case may be. The invalidity or unenforceability of any provision 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.
18. Survival. The obligations of the parties under this Agreement shall
survive the term of this Agreement.
19. Term of Agreement. The term of this Agreement shall commence on April
1, 1997 and end on March 31, 2000. Provided, however, that in the event
Employee's employment is terminated while this Agreement is in force, this
Agreement shall terminate when the Company has made all payments to Employee
required by Section 9 hereof and Employee has complied with the duties and
obligations described in Section 12 hereof (all of which duties and obligations
shall specifically survive the termination of the Employee's employment). To the
extent necessary for the Company's enforcement of the provisions of Section 12
above (but only for such purpose), Employee's employment term shall be deemed to
continue through the end of the Agreement term.
Date: _________________________
Employee AMCOL International Corporation
_______________________________ By: ___________________________________
Xxxx X. Xxxxxxx
Its: __________________________________
(50023B7E)
