AMENDED and RESTATED
EMPLOYMENT AGREEMENT
This amended and restated Agreement, made as of the 17th day of January
1996, between Freedom Chemical Company, a corporation organized and existing
under the laws of the State of Delaware, with its executive offices at 0000
Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxxxxxxx, XX, (hereinafter referred to as the
"Company"), and XXXXXX X. KITCHEN, (hereinafter called the "Employee").
W I T N E S S E T H:
WHEREAS, the parties entered into an Employment Agreement dated as of the
31st day of May 1995; and
WHEREAS, the parties have agreed to amend and restate such Agreement to
incorporate certain changes;
NOW THEREFORE, in consideration of the Employee's continuing employment by
the Company at Cincinnati, Ohio, as Executive Vice President of the Company and
as President of Hilton Davis Chemical Co., and of the covenants hereinafter set
forth, it is mutually agreed as follows:
1. Employee's Services.
(a) General. The Employee shall faithfully and to the best of his
ability devote all of his working time exclusively to the performance of such
services for
the Company as may be assigned to him. The Employee shall make his assigned
headquarters at such place as the Company from time to time may direct. The
Employee shall not, for renumeration or profit, directly or indirectly, render
any service to, undertake any employment for, any other person, firm or
corporation, whether in an advisory or consulting capacity or otherwise, without
first obtaining the written consent of the Company.
(b) Hilton Davis. The assignment as President of Hilton Davis
Chemical Co. commences upon the date hereof and terminates upon notice by the
Company to the Employee, but in no event later than December 31, 1996. Upon
conclusion of such assignment, Employee, subject to the provisions of Section 4,
will be offered a position with the Company with duties and compensation
commensurate with or better than those described in this Agreement.
2. Compensation.
(a) Annual Base Salary. The Company shall pay to the Employee, in
full payment for the services performed by the Employee, a base salary of
$210,000 per annum. Performance and salary reviews will be undertaken in January
of each subsequent year.
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(b) Annual Management Bonus. Upon the achievement of predetermined
targets by the Company, the Company shall pay to the Employee an annual
management bonus. The incentive target and goals will he established for each
fiscal year. The payout range will be from 0-150% of target. The target shall be
no less than 50% of annual base compensation.
(c) Vacation. The Employee shall be entitled to a vacation with pay
of five (5) calendar weeks among each twelve months period of service. There
shall be no carry-over nor accumulation of unused vacation.
(d) Signing Bonus. The Employee shall be entitled to receive a one
time signing bonus in the amount of $40,000. This bonus shall be payable in
equal installments on March 1, 1996 and June 1, 1996.
3. Expenses
(a) Reimbursement of Expenses. The Company shall reimburse the
Employee, in accordance with policies and practices of the Company then in
effect, for (i) expense of moving in connection with a Company-directed change
of the Employee's headquarters under circumstances reasonably requiring a change
of residence, and (ii) travel, entertainment and other business expenses.
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(b) Car Allowance. The Company will provide a monthly allowance of
$800.00.
(c) During the term of the assignment set forth in Section l(b),
Employee will be reimbursed for the cost of renting an apartment in the
Cincinnati area, normal living expenses while in Cincinnati, including a rental
car, as well as weekly transportation expenses incurred by the Employee and
Employee's spouse for travel between Cincinnati and Charlotte.
4. Employment
(a) Duration of Agreement. The duration of this Agreement shall be
through December 31, 1996. After that date, this Agreement may be terminated by
either party with 60 days written notice, subject to the provisions of Section
4b.
(b) Termination of Employment.
I. The Company may terminate the Employee's employment for
Cause, as defined below, at any time and with no notice.
Cause shall mean:
A. Conviction of the Employee of a felony; or
B. Willful failure to substantially perform your duties,
other than any
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failure resulting from incapacity due to disability or
physical or mental illness; or
C. Default or non-performance by the Employee of any of
the provisions of this Agreement; or
D. Insubordination, provided, however, that the Employee
shall not be required to perform or cause to be per-
formed by others, any actions which are illegal,
unethical, unsafe or environmentally unsound. The
Employee shall not be terminated for refusing or
failing to perform any such actions.
II. The Company may terminate the Employee's employment
hereunder for reasons other than for Cause by giving
written notice to the Employee as stated in 4a. In the
event of such notice of termination, the Employee shall
receive the Employee's base salary in effect at the
time, which shall not be less than $210,000 per
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annum, and medical insurance benefits for a period of
twelve months, commencing with the date of the Company's
notice to the Employee. A prorated portion of the Annual
Management Bonus, based upon the amount of time the
Employee has worked since the last Annual Management
Bonus and management's assessment of performance against
targets, shall be paid to the Employee within 30 days of
notice of termination.
III. "Termination" shall also be deemed to have occurred with
any of the following events:
A. Reduction, without the prior consent of the Employee, of
the Employee's salary, or
B. Reduction without the prior consent of the Employee of
any benefit under any of the company's employee benefit
programs in which the Employee shall participate, other
than a reduction
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that affects all senior executives of the Company; or
C. Default or non-performance by the Company of any of the
provisions of this Agreement; or
D. If, at the conclusion of the assignment set forth in
Section 1 (b), (i) Employee is not offered a position
with the Company, or (ii) the position offered is
unacceptable.
In the event of such termination, the Employee shall receive the
Employee's base salary in effect at the time, which shall not be
less than $210,000 per annum, and medical insurance benefits for a
period of twelve months, commencing with the date of the Company's
notice to the Employee. A prorated portion of the Annual Management
Bonus, based upon the amount of time the Employee has worked since
the last Annual Management Bonus, shall be paid to the Employee
within 30 days of notice of termination.
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IV. "Termination" shall also be deemed to have occurred with
the following event:
A. The current Chairman and President of the Company cease
to be employed in senior management positions of the
Company; or
B. A Change of Control (as hereafter defined) occurs after
which (i) Employee is terminated for any reason other
than Cause, or (ii) there is a reduction in Employee's
salary in effect immediately prior to the Change in
Control, or there is a material reduction in the
responsibilities of the Employee, and as a result of
either, resigns his employment with the Company.
In the event of such termination, the Employee shall receive one
hundred fifty percent (150%) of the Employee's base salary in effect
at the time, which shall not be less than $210,000 per annum, and
medical insurance benefits for a period of twelve months, commencing
with the
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date of the Company's notice to the Employee. A prorated portion of
the Annual Management Bonus, based upon the amount of time the
Employee has worked since the last Annual Management Bonus, shall be
paid to the Employee within 30 days of notice of termination.
5. Confidentiality - Non Compete. Employee will sign the Company's
Confidentiality Non-Compete Letter as part of this employment agreement. See
Attachment B.
6. Employee Benefits. The Employee shall be eligible to participate in
FCC's standard benefit program as well as the Company's Executive Benefits
Program, plus paid life insurance at four times the salary of the employee's
annual base salary. Where applicable, the Employee shall be deemed vested for
benefits as of the Employee's first day of employment.
7. Indemnification. In recognition of the Employee's need for substantial
protection against personal liability in his role as an officer of the Company,
the Company shall provide indemnification to the fullest extent permitted by law
and to the extent insurance is maintained for the continued coverage of the
Employee under an officer's liability insurance policy.
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8. Special Pension Adjustment Payment. The Employee has completed
approximately eighteen (18) years of service with his former employer. In
recognition of this tenure and the Employee's resignation, the Company agrees to
make a special annual cash payment to the Employee in the amount of five percent
(5%) of base pay. The intent of this financial adjustment is to partially
recognize the break in service and its impact on the current pension benefits of
the Employee. This financial adjustment will continue for the next five years or
until any part of the Employee's equity position in the Company is redeemed. Tn
addition to this pension adjustment payment, the Employee will be enrolled with
full immediate vesting in the pension plan of the Freedom Textile Chemicals Co.
and the Freedom Chemical Company Supplemental Executive Retirement Plan.
9. Assignability. This Agreement shall enure to the benefit of any
assignee of the Company, and the Employee specifically agrees on demand to
execute any and all necessary documents in connection therewith.
10. Notices. Any notice expressly provided for under this Agreement shall
be in writing, shall be given either manually or by mail, telegram, radiogram or
cable, and shall be deemed sufficiently given if and when re-
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ceived by the party to be notified at its address first set forth above or if
and when mailed by registered mail, postage prepaid, addressed to such party at
such address. Either party may, by notice to the other, change its address for
receiving such notices.
11. Equity Participation.
(a) The Company believes that it is important for the Employee to
own equity in the Company. The Employee as of the date of this agreement owns
355.90 shares of Freedom Chemical Company stock.
(b) The Employee is a participant in the Company's 1994 Management
Incentive Equity Plan which currently provides the employee with 400 options.
See Agreement Attachment C. Employee will be granted options for one hundred
(100) additional Series B shares pursuant to such Plan. Company management
agrees to make its best effort to the Company's board of directors that all
options under the Plan become fully vested in the event of a Change of Control.
For purposes of this Agreement a "Change of Control" shall have the same meaning
as set forth in such Plan.
(c) Entire Agreement. This Agreement supersedes all previous
contracts for personal services between the Company and the Employee, provided
that neither
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party is relieved from any obligations to the other arising under any such
previous contract while it was in force. This Agreement constitutes the entire
understanding between the parties hereto with reference to the subject matter
hereof and shall not be changed or modified except by written instrument signed
by both parties.
IN WITNESS WHEREOF the Company has caused this Agreement to be executed by
duplicate by a proper and duly authorized representative thereof, and the
Employee has signed this Agreement in duplicate, as of the day and year first
above written.
FREEDOM CHEMICAL COMPANY
/s/ Xxxx X. Xxxxx /s/ Xxxxxx X. Kitchen
------------------------- -------------------------------
Xxxx X. Xxxxx Xxxxxx X. Kitchen
President & CEO Employee
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