EMPLOYMENT AGREEMENT
THIS AGREEMENT entered into this ____ day of ________________, 1998, by
and between BETZDEARBORN INC., a Pennsylvania corporation (hereinafter called
the "Company") and ______________________________, an individual residing at
__________________________ (hereinafter called the "Employee").
W I T N E S S E T H:
[WHEREAS, the Company desires to have the benefit of Employee's
knowledge and experience in the affairs of the Company;
WHEREAS, the Employee desires to be employed by the Company upon the
terms and conditions hereinafter set forth
Or
WHEREAS, the Employee is presently employed by the Company in an
executive capacity and the Company desires to encourage such continued
employment by providing certain protections for the Employee and by extending
and entering into this Agreement with the Employee, and by granting the Employee
certain stock options, in return for which the Employee agrees to continue to be
employed by the Company on the terms set forth herein and refrain from certain
competitive activity.]
NOW, THEREFORE, and in consideration of the mutual covenants herein
contained, the Company and the Employee hereby mutually agree as follows:
1. Employment and Duties. The Company hereby employs the Employee and
the Employee hereby accepts employment with the Company upon the terms and
conditions hereinafter set forth. [The Employee represents and warrants that his
acceptance of employment with the Company has not breached, and the performance
of duties hereunder will not breach, any duty owed to any prior employer or
other entity, nor will the Employee's duties be restricted in any manner by any
such duty.] The Employee shall serve the Company in an executive capacity as an
employee of the Company and the Employee shall perform all duties and accept all
responsibilities incidental to such position (or with respect to periods prior
to or more than two years following a Change of Control (as defined in Section
6), such other position as may be assigned to the Employee during the term of
this Agreement by the Board of Directors of the Company (the "Board of
Directors") or its chief executive officer or any other officer as directed by
the Company), and the Employee shall cooperate fully with the
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Board of Directors, the Company's chief executive officer and the Company's vice
presidents. In such capacity, the Employee shall have all powers, duties, and
obligations as are customarily associated with Employee's position with the
Company. The Employee shall devote his best efforts, all of his skills, business
time, and business attention solely and exclusively to said position and in
furtherance of the business and interests of the Company except for
(a) time spent in managing his personal, financial and legal
affairs and serving on corporate, civic or charitable boards or
committees, in each case only if and to the extent not interfering with
the performance of such responsibilities, and
(b) periods of vacation to which he is entitled and periods of
approved leave of absence.
It is expressly understood and agreed that the Employee's continuing to serve on
any boards and committees on which he is serving or with which he is otherwise
associated immediately preceding the date hereof, or his service on any other
boards and committees of which the Company has been notified in writing and does
not object, in writing, within thirty (30) days after receipt of such notice,
shall not be deemed to interfere with the performance of the Employee's services
to the Company.
2. Term of Employment. This Agreement shall be effective upon execution
by both parties. The term of this Agreement (the "Term") shall begin, or be
deemed to have begun, on _____________ (the "Effective Date"). It shall continue
through the five-year period ending on the day before the fifth anniversary date
of the Effective Date, subject, however, to prior termination as herein
provided. In the event of a Change of Control (as defined in Section 6), the
Term of this Agreement shall not expire before the second anniversary of the
date of the Change of Control, subject, however, to prior termination as herein
provided.
3. Base Salary. For services hereunder, the Employee shall receive an
initial annual base salary (the "Base Salary") of $_________________, less
withholding required by law or agreed to by the Employee, which Base Salary may
be increased, but not decreased, by the Company during the Term of this
Agreement. In the event that the Company increases the Employee's initial Base
Salary, the amount of the initial Base Salary, together with any increase(s),
shall be his Base Salary. The Base Salary shall be payable in equal
installments, no less frequently than monthly, in accordance with the Company's
regular payroll practices.
4. Bonus. In addition to Base Salary, the Company may during the Term
of this Agreement, pay the Employee incentive bonus payments in the sole
discretion of the Board of Directors or the compensation committee of the Board
of Directors.
5. Fringe Benefits. The Company shall further provide the Employee with
all health and life insurance coverages, sick leave and disability programs,
tax-qualified retirement plans,
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stock option plans, paid holidays and vacations, expense reimbursement policies,
moving and relocation policies, perquisites, and such other fringe benefits of
employment as the Company may generally provide from time to time to actively
employed senior executives of the Company who are similarly situated.
Notwithstanding the preceding provisions of this Section 5, during the Term of
this Agreement (including extensions thereof) the Company shall provide the
Employee with;
(a) reimbursement for all reasonable expenses incurred by the
Employee in connection with the conduct of the Company's business on
presentation of reasonable and appropriate receipts and in accordance
with the Company's regular reimbursement policy applicable to senior
executives; and
(b) a minimum of four (4) weeks of paid vacation per year.
6. Termination of Employment.
(a) Termination of Employment Other Than by Employee. The
Employee's employment hereunder may be terminated by the Company
without any breach of this Agreement under the following circumstances:
(1) Death or Disability. The Employee's employment
hereunder shall terminate upon his death, and may be
terminated by the Company in the event of his Disability. For
purposes of this Agreement, "Disability" means in the judgment
of the Board of Directors, the inability, after any reasonable
accommodation required by law, of the Employee due to illness,
accident, or otherwise, to perform his duties for a period of
at least one hundred eighty (180) consecutive days, provided
that the Employee does not return to work on a substantially
full-time basis within thirty (30) days after Notice of
Termination is given by the Company pursuant to the provisions
of Sections 6(d) and 6(e)(2). The Employee agrees, in the
event of any dispute under this Section 6(a)(1) and if
requested by the Company, to submit to a physical examination
by a licensed physician selected by the Company, the cost of
such examination to be paid by the Company. This Section will
be interpreted and applied so as to comply with the provisions
of the Americans with Disabilities Act and any applicable
state or local laws.
(2) Cause. The Company may terminate the Employee's
employment hereunder for Cause. For purposes of this
Agreement, the Company shall have "Cause" to terminate the
Employee's employment hereunder only upon:
(A) Commission by the Employee of a felony;
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(B) Commission by the Employee of any crime
involving moral turpitude;
(C) Commission by the Employee of any
material act of fraud or bad faith toward the
Company;
(D) Misappropriation by the Employee of any
funds, property or rights of the Company;
(E) The Employee's willful or continued
neglect (other than for reason of incapacity during
physical or mental illness) of his material duties
hereunder, provided, however, that during the period
commencing on a Change of Control and for two years
thereafter (the "Change of Control Period"), the
Employee has been provided with written reasonable
notice of such neglect by the Board of Directors or
the Company's chief executive officer and is provided
with a reasonable opportunity of not less than thirty
(30) days to cure such neglect;
(F) The Employee's habitual insobriety or
substance abuse;
(G) The Employee's entering into any
transaction or contractual relationship with, or
diversion of business opportunity from, the Company
(other than on behalf of the Company or with the
prior written consent of the Board of Directors);
(H) Breach by the Employee of the covenants
contained in Sections 10, 11 or 12; or
(I) Prior to a Change of Control, the
Employee materially violates the Company's statement
of Core Values as it currently exists or as it
changes from time to time, a copy of which the
Employee acknowledges having received, read and
understood prior to the execution of this Agreement.
(3) Without Cause. The Board of Directors or the
Company's chief executive officer may terminate the Employee's
employment with the Company at any time without cause.
(b) Voluntary Resignation by Employee. The Employee may
terminate his employment at any time.
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(c) Termination by Employee for Good Reason. Without limiting
the ability of the Employee to terminate his employment pursuant to
Section 6(b) hereof, within the Change of Control Period, the Employee
may also terminate his employment for Good Reason. However, he shall be
deemed to have terminated his employment for "Good Reason" only if he
terminates his employment within the Change of Control Period by giving
Notice of Termination pursuant to Sections 6(d) and 6(e)(3) within one
hundred eighty (180) days after the Employee has actual notice of the
occurrence of any of the following events (provided the Company does
not cure such event on a retroactive basis to the extent possible
within ten (10) days following its receipt of the Employee's Notice of
Termination):
(1) The Employee's title, position, authority or
responsibilities (including reporting responsibilities and
authority) are changed in a materially adverse manner.
(2) The Employee's Base Salary is reduced for any
reason other than in connection with the termination of his
employment.
(3) For any reason other than in connection with the
termination of the Employee's employment, the Company
materially reduces any fringe benefit provided to the Employee
under Section 5, below the level of such fringe benefit
provided generally other actively employed similarly situated
Employees of the Company, unless the Company agrees to fully
compensate the Employee for any such material reduction.
(4) A transfer of the Employee, without the
Employee's express written consent, to a location which is
outside the general metropolitan area in which the Employee's
principal place of business immediately preceding such
transfer is located, or which has a commuting distance greater
than the greater of thirty (30) miles or the distance of the
Employee's previous commute.
(5) The Company otherwise materially breaches or is
unable to perform its obligations under this Agreement.
(6) In the event of the sale of substantially all the
assets of the Company or the merger, consolidation, or
combination of the Company with another entity, the failure of
the purchaser of such assets or the survivor corporation of
such merger, consolidation or combination to assume the
obligations of the Company hereunder.
(d) Notice of Termination. Any termination of the Employee's
employment by the Company hereunder, or by the Employee other than
termination upon the
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Employee's death, shall be communicated by written Notice of
Termination to the other party. For purposes of this Agreement, a
"Notice of Termination" means a notice which during the Change of
Control Period shall indicate the specific termination provision in
this Agreement relied upon, and shall set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination
of the Employee's employment under the provision so indicated. The
failure by the Employee to set forth in the Notice of Termination any
fact or circumstance which contributes to a showing of Good Reason
shall not waive any right of the Employee hereunder or preclude the
Employee from asserting such fact or circumstance in enforcing his
rights hereunder. During any time not constituting the Change of
Control Period, the failure of the Company to indicate in the Notice of
Termination the specific termination provision in the Agreement relied
upon and to include reasonable detail of the facts and circumstances
claimed to provide the basis for termination shall not waive the right
of the Company to show that the Employee was terminated for Cause or
for Disability.
(e) Date of Termination. "Date of Termination" means:
(1) If the Employee's employment is terminated by his
death, the date of his death.
(2) If the Employee's employment is terminated by the
Company as a result of Disability pursuant to Section 6(a)(1),
the date that is thirty (30) days after Notice of Termination
is given; provided the Employee shall not have returned to the
performance of his duties on a full-time basis during such
thirty (30) day period.
(3) If the Employee terminates his employment for
Good Reason pursuant to Section 6(c) the date that is ten (10)
days after Notice of Termination is given (provided that the
Company does not cure such event during the ten (10) day
period).
(4) If the Employee terminates his employment other
than for Good Reason, the date that is thirty (30) days after
Notice of Termination is given; provided, in the sole
discretion of the Company, such date may be any earlier date
after Notice of Termination is given.
(5) If the Employee's employment is terminated by the
Company either for Cause pursuant to Section 6(a)(2) or other
than for Cause, the date on which the Notice of Termination is
given.
(f) Change of Control. As used in this Agreement, "Change of
Control" means:
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(1) the acquisition by any individual, entity or
group (within the meaning of Section 13(d)(3) or 14(d)(2) of
the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) (a "Person") of beneficial ownership (within the
meaning of Rule 13d-3 promulgated under the Exchange Act) of
voting securities of the corporation where such acquisition
causes such person to own 20% or more of the combined voting
power of the then outstanding voting securities of the Company
entitled to vote generally in the election of directors (the
"Outstanding Company Voting Securities"); provided, however,
that for purposes of this Subsection (1), the following
acquisitions shall not be deemed to result in a Change of
Control: (i) any acquisition directly from the Company, (ii)
any acquisition by the Company, (iii) any acquisition by any
employee benefit plan (or related trust) sponsored or
maintained by the Company or any corporation controlled by the
Company or (iv) any acquisition by any corporation pursuant to
a transaction that complies with clauses (i), (ii) and (iii)
of Subsection (3) below; and provided, further, that if any
Person's beneficial ownership of the Outstanding Company
Voting Securities reaches or exceeds twenty percent (20%) as a
result of a transaction described in clause (i) or (ii) above,
and such Person subsequently acquires beneficial ownership of
additional voting securities of the Company, such subsequent
acquisition shall be treated as an acquisition that causes
such Person to own twenty percent (20%) or more of the
Outstanding Company Voting Securities; or
(2) individuals who as of the date hereof, constitute
the Board of Directors (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board;
provided, however, that any individual becoming a director
subsequent to the date hereof whose election, or nomination
for election by the Company's shareholders, was approved by a
vote of at least two-thirds of the directors then comprising
the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or
removal of directors or other actual or threatened
solicitation of proxies or consents by or on behalf of a
Person other than the Board of Directors; or
(3) the approval by the shareholders of the Company
of a reorganization, merger or consolidation or sale or other
disposition of all or substantially all of the assets of the
Company ("Business Combination") or, if consummation of such
Business Combination is subject, at the time of such approval
by shareholders, to the consent of any government or
governmental agency, the obtaining of such consent (either
explicitly or implicitly by consummation); excluding, however,
such a Business Combination pursuant to
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which (i) all or substantially all of the individuals and
entities who were the beneficial owners of the Outstanding
Company Voting Securities immediately prior to such Business
Combination beneficially own, directly or indirectly, more
than sixty percent (60%) of, respectively, the then
outstanding shares of common stock and the combined voting
power of the then outstanding voting securities entitled to
vote generally in the election of directors, as the case may
be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation that
as a result of such transaction owns the Company or all or
substantially all of the Company's assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their ownership, immediately prior to such
Business Combination of the Outstanding Company Voting
Securities, (ii) no Person (excluding any employee benefit
plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns,
directly or indirectly, twenty percent (20%) or more of,
respectively, the then outstanding shares of common stock of
the corporation resulting from such Business Combination or
the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (iii)
at least a majority of the members of the board of directors
of the corporation resulting from such Business Combination
were members of the Incumbent Board at the time of the
execution of the initial agreement, or of the action of the
Board of Directors, providing for such Business Combination;
or
(4) approval by the shareholders of the Company of a
complete liquidation or dissolution of the Company.
Notwithstanding the foregoing, no Change of Control shall be
deemed to have occurred for purposes of this Agreement by reason of any
actions or events in which the Employee participates in a capacity
other than in his capacity as Employee (or as a director of the Company
or a subsidiary thereof, where applicable).
7. Amounts Payable Upon Termination of Employment or During Disability.
Upon termination of the Employee's employment with the Company during the Term,
the Company shall have the following obligations, provided, however, that any
item paid or payable under this Agreement shall be reduced by any amount paid or
payable to the Employee and the Employee's family with respect to the same type
of payment under the any Company-sponsored severance plan or as unemployment
compensation. For purpose of computing this reduction, if some payments are made
in a lump sum and others are made over time, any payment made over time shall be
discounted to present value using an interest rate of seven and one-quarter
percent (7.25%) per annum, before calculating any reduction under this Agreement
for any amount paid or payable to the Employee and the Employee's family under
any Company-sponsored severance plan or as unemployment compensation.
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(a) Death. If the Employee's employment is terminated by his
death, the Employee's beneficiary (as designated by the Employee in
writing with the Company prior to his death) shall be entitled to (i)
any Accrued Obligations then owing to the Employee or his beneficiary
(ii) two months Base Salary and (iii) if and when incentive bonuses are
paid for the fiscal year in which the Employee's date of death
occurred, a pro rata incentive bonus payment based on the target
percentage applicable to the Employee's employment grade as of the Date
of Termination. In addition, all Company stock option awards then held
by the Employee which would have become vested within the two year
period following the date of the Employee's death, shall be and become
vested as of the date of his death and shares of restricted stock then
held in the name of the Employee shall remain in the name of the
Employee (or his beneficiary) for a period of two years following the
date of the Employee's death and shall become vested during such period
at such times and in such proportions that such shares would otherwise
have become vested had the Employee remained in the employ of the
Company for such period. After the expiration of such two-year period,
any such shares of restricted stock that are not then vested shall be
forfeited. If the Employee's designated beneficiary does not survive
the Employee, benefits described in this Section 7(a) shall be paid to
the Employee's estate. As used in this Agreement, the term "Accrued
Obligations" means (i) the Employee's accrued and unpaid Base Salary
and accrued and unused vacation pay through the Date of Termination,
(ii) any compensation previously deferred by the Employee (together
with any accrued earnings thereon) and not yet paid by the Company and
any accrued vacation pay for the current year not yet paid by the
Company, (iii) any amounts or benefits owing to the Employee or to the
Employee's beneficiaries under the then applicable employee benefit
plans or policies of the Company and (iv) any amounts owing to the
Employee for reimbursement of expenses properly incurred by the
Employee prior to the Date of Termination and which are reimbursable in
accordance with the reimbursement policy of the Company.
(b) Disability.
(1) During any period that the Employee fails to
perform his duties hereunder as a result of incapacity due to
physical or mental illness ("Disability Period"), the Employee
shall continue to receive his Base Salary at the rate then in
effect for such period until his employment is terminated
pursuant to Section 6(a)(1); provided, however, that payments
of Base Salary shall be reduced by any amount payable to the
Employee under any disability benefit plan or plans of the
Company for the same period of time.
(2) Upon his termination of employment because of
Disability (as described in Section 6(a)(1)), the Employee
shall be entitled to (i) any Accrued Obligations then owing to
the Employee as of the Date of Termination and (ii) if
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and when incentive bonuses are paid for the fiscal year in
which the Employee's Date of Termination occurred, a pro rata
incentive bonus payment based on the target percentage
applicable to the Employee's employment grade as of the Date
of Termination. In addition, all Company stock option awards
then held by the Employee which would have become vested
within the two year period following the Date of Termination,
shall be and become vested as of the Date of Termination and
shares of restricted stock then held in the name of the
Employee shall remain in the name of the Employee for a period
of two years following the Date of Termination and shall
become vested during such period at such times and in such
proportions that such shares would otherwise have become
vested had the Employee remained in the employ of the Company
for such period. After the expiration of such two-year period,
any such shares of restricted stock that are not then vested
shall be forfeited. In the event of the Employee's death prior
to the time that all payments described in this Section 7(b)
have been completed, such payments and benefits shall be paid
to the Employee's beneficiary (as designated pursuant to
Section 7(a)), or, in the absence of a beneficiary designation
of the designated beneficiary does not survive the Employee,
to the Employee's estate.
(c) Termination by Company without Cause, or Termination by
Employee for Good Reason. In the event that the Company terminates the
Employee's employment without Cause or the Employee terminates his
employment for Good Reason within the Change of Control Period, the
Employee shall be entitled to the following payments and benefits:
(1) All Accrued Obligations.
(2) If the Date of Termination occurs during a period
not constituting a Change of Control Period;
(i) an amount equal to two (2) years of the
Base Salary applicable to the Employee on the Date of
Termination, payable in twenty-four (24) equal,
consecutive monthly payments, commencing no later
than thirty (30) days following the Date of
Termination; and
(ii) in each of the next two (2) fiscal
years ending after the Date of Termination, if an
incentive bonus is paid for such fiscal year, an
incentive bonus for such fiscal year based on the
nondiscretionary component of the target incentive
bonus determined using the Employee's Base Salary and
the target percentage applicable to employees in the
same employment grade as the Employee as of the Date
of Termination.
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(3) If the Date of Termination occurs within the
Change of Control Period, a lump sum cash payment payable no
later than thirty (30) days after the Date of Termination,
equal to three (3) times the sum of
(i) the Base Salary applicable to the
Employee on the Date of Termination (or if greater,
as of the date on which occurred an event giving rise
to a termination for Good Reason), and
(ii) the greater of:
(A) the incentive bonus that would
have been payable for the fiscal year which
includes the Date of Termination under the
incentive bonus program in effect as of the
date of the Change of Control, based on the
target percentage applicable to employees in
the same employment grade as the Employee
and his Base Salary as of the Date of
Termination (or if greater, as of the date
on which occurred an event giving rise to a
termination for Good Reason), and
(B) the average of the incentive
bonuses paid to the Employee by the Company
during the three (3) most recent fiscal
years of the Company ending prior to the
Date or Termination (or such shorter period
during which the Employee was employed by
the Company).
(4) The Employee, his spouse and their eligible
dependents (as defined in the applicable plan), as the case
may be, shall be entitled to participate in all Company
sponsored welfare benefit plans and programs for a period
equal to two (2) years after the Date of Termination (or if
the Date of Termination occurs within the Change of Control
Period, three (3) years after the Date of Termination), at the
same cost to the Employee and his eligible dependents as
charged to similarly situated active employees and their
dependents, provided that the applicable plans provide for
such continued participation. If the Date of Termination is
within the Change of Control Period, the Company shall pay to
the Employee within thirty (30) days following the Date of
Termination, an amount equal to three times the annualized
cost of any such benefits which cannot be provided to the
Employee and/or his eligible dependents pursuant to the terms
of such plans.
(5) if the Date of Termination is within the Change
of Control Period, all Company stock option awards then held
by the Employee shall be and become vested and exercisable for
the post termination exercise period set forth in the
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award and all restrictions on shares of restricted stock then
held in the name of the Employee shall be waived and such
shares shall be and become immediately vested.
(6) if the Date of Termination is not within the
Change of Control Period, all Company stock option awards then
held by the Employee which would have become vested within the
two year period following the Date of Termination, shall be
and become vested as of the Date of Termination and shares of
restricted stock then held in the name of the Employee shall
remain in the name of the Employee for a period of two years
following the Date of Termination and shall become vested
during such period at such times and in such proportions that
such shares would otherwise have become vested had the
Employee remained in the employ of the Company for such
period. After the expiration of such two-year period, any such
shares of restricted stock that are not then vested shall be
forfeited.
(7) a cash amount equal to the present value,
calculated using an interest rate of seven and one-quarter
percent (7.25%) per annum, of the difference between
(I) the lump sum value of the retirement
benefits that would have been payable or available to
the Employee under any defined benefit retirement
plan intended to meet the requirements of Section
401(a) of the Internal Revenue Code (a "Qualified
Plan"), under any nonqualified defined benefit
retirement plan (a "Nonqualified Plan"), maintained
by the Company or an affiliated company based on the
age and service the Employee would have attained or
completed had the Employee continued in the Company's
employ until the expiration of the second anniversary
of the Date of Termination (or if the Date of
Termination occurs within the Change of Control
Period, until the expiration of the third anniversary
of the Date of Termination), determined using, where
compensation is a relevant factor, his pensionable
compensation at the Date of Termination (or, if
greater, at the rate in effect on the date on which
occurred an event giving rise to a termination for
Good Reason), with such lump sum value being
calculated using, where applicable, assumptions
contained in the respective plans or, where such
assumptions are not applicable, an interest rate of
seven and one-quarter percent (7.25%) per annum; and
(II) the present value of the retirement
benefits that are payable or available to the
Employee under all Qualified Plans and Nonqualified
Plans maintained by the Company or an affiliated
company based on the age and service the Employee has
attained or completed as of the
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Employee's Date of Termination determined using,
where compensation is a relevant factor, his
pensionable compensation at the Date of Termination
(or, if greater, at the rate in effect on the date on
which occurred an event giving rise to a termination
for Good Reason), with such present value being
calculated using, where applicable, assumptions
contained in the respective plans or, where such
assumptions are not applicable, an interest rate of
seven and one-quarter percent (7.25%) per annum.
For purposes of calculating the retirement benefits
which would have become payable under such plans, there shall
be taken into consideration both the additional benefits
attributable to the additional service provided for herein and
the benefits which would have vested under such plans as a
result of such service, but which were otherwise forfeited. If
the Date of Termination occurs within the Change of Control
Period, such amount shall be paid in a lump sum within thirty
(30) days following the Date of Termination. If the Date of
Termination occurs within a period not constituting a Change
of Control Period, such amount shall be paid under the same
terms and at the same time as if paid under the Qualified Plan
or Nonqualified Plan to which the additional benefit relates.
Notwithstanding the foregoing, in the event that the Date of
Termination occurs within the Change of Control Period, and the
Employee subsequently violates any of the covenants contained in
Section 12 hereof, the Employee shall return to the Company a pro rata
portion (based on the period of time elapsed from the Date of
Termination as compared to the period during which the Employee was
required to be subject to such covenants following the Date of
Termination) of any payments made under Section 7(c)(3) or (7) which,
together with all other Covered Payments (as defined in Section 8(a)
hereof, exceed 299% of the Employee's "base amount" as defined in
Section 280G(b)(3) of the Internal Revenue Code and which constitute
"parachute payments" within the meaning of Section 280G(b)(2)(A), as
determined by the Accountants (as defined in Section 8 hereof).
(d) Termination by Employee Other Than for Good Reason, or
Termination by Company for Cause. In the event that the Employee
terminates his employment other than for Good Reason or the Company
terminates his employment for Cause, the Employee shall not be entitled
to any compensation except as set forth below:
(1) Any Base Salary that is accrued but unpaid, any
vacation that is accrued but unused, and any business expenses
that are properly reimbursable in accordance with Company
policies then in effect, but which are unreimbursed -- all, as
of the Date of Termination.
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(2) Any other rights and benefits (if any) provided
under plans and programs of the Company (excluding any bonus
program), determined in accordance with the applicable terms
and provisions of such plans and programs.
(e) No Duty to Mitigate Damages. After any Date of
Termination, the Employee shall have no obligation to seek other
employment and shall have the right to be otherwise employed and any
compensation of any type whatsoever earned in connection with such
other employment by the Employee shall not reduce or otherwise by
setoff against any amount due to the Employee hereunder.
(f) Release of Employment Claims. As a condition to the
receipt of payments described Section 7(c) or 7(d), other than Accrued
Obligations, the Employee agrees to execute a general release in favor
of the Company, any and all of its affiliates, its employees, agents
and all others acting on behalf of the Company, and its successors and
assigns of all claims arising out of or in connection with the
Employee's employment with the Company and the termination of such
employment, in such form and containing such provisions as the Company
may reasonably request, provided, however, that such release shall not
include or be construed to include a release of any obligation of the
Company arising under this Agreement or any obligation under the
express terms of any "employee benefit plan" as defined in Section 3(3)
of the Employee Retirement Income Security Act of 1974, as amended.
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8.8.8. Certain Further Payments by the Company.
(a) Tax Reimbursement Payment. In the event that any amount or
benefit paid or distributed to the Employee by the Company or any
company controlling, controlled by or under common control with the
Company (an "Affiliated Company"), whether pursuant to this Agreement
or otherwise (collectively, the "Covered Payments"), is or becomes
subject to the tax (the "Excise Tax") imposed under Section 4999 of the
Internal Revenue Code or any similar tax that may hereafter be imposed,
the Company shall pay to the Employee at the time specified in Section
8(e) below, the Tax Reimbursement Payment (as defined below). The Tax
Reimbursement Payment is defined as an amount, which when added to the
Covered Payments and reduced by any Excise Tax on the Covered Payments
and any federal, state and local income tax and Excise Tax on the Tax
Reimbursement Payment provided for by this Agreement (but without
reduction for any federal, state or local income or employment tax on
such Covered Payments), shall be equal to the sum of (i) the amount of
the Covered Payments, and (ii) an amount equal to the product of any
deductions disallowed for federal, state or local income tax purposes
because of the inclusion of the Tax Reimbursement Payment in the
Employee's adjusted gross income and the highest applicable marginal
rate of federal, state or local income taxation, respectively, for the
calendar year in which the Tax Reimbursement Payment is to be made. In
lieu of paying the amount of the Tax Reimbursement Payment to the
Employee, the Company may pay such amount to the applicable taxing
authorities on the Employee's behalf and provide evidence of such
payment to the Employee of such payment on or before the time that the
Tax Reimbursement Payment would otherwise be payable to the Employee
pursuant to Section 8(e) hereof.
(b) Determining Excise Tax. For purposes of determining
whether any of the Covered Payments will be subject to the Excise Tax
and the amount of such Excise Tax,
(1) such Covered Payments will be treated as
"parachute payments" within the meaning of Section 280G of the
Code, and all "parachute payments" in excess of the "base
amount" (as defined under Section 280G(b)(3) of the Code)
shall be treated as subject to the Excise Tax, unless, and
except to the extent that, in the opinion of the Company's
independent certified public accountants, which, in the case
of Covered Payments made after the Change of Control, shall be
the Company's independent certified public accountants
appointed prior to the Change of Control, or tax counsel
selected by such accountants (the "Accountants"), such Covered
Payments (in whole or in part) either do not constitute
"parachute payments" or represent reasonable compensation for
services actually rendered (within the meaning of Section
280G(b)(4) of the Internal Revenue Code) in excess of the
"base amount," or such "parachute payments" are otherwise not
subject to such Excise Tax, and
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(2) the value of any non-cash benefits or any
deferred payment or benefit shall be determined by the
Accountants in accordance with the principles of Section 280G
of the Internal Revenue Code.
(c) Applicable Tax Rates and Deductions. For purposes of
determining the amount of the Tax Reimbursement Payment, the Employee
shall be deemed:
(1) to pay federal income taxes at the highest
applicable marginal rate of federal income taxation for the
calendar year in which the Tax Reimbursement Payment is to be
made,
(2) to pay any applicable state and local income
taxes at the highest applicable marginal rate of taxation for
the calendar year in which the Tax Reimbursement Payment is to
be made, net of the maximum reduction in federal income taxes
which could be obtained from the deduction of such state or
local taxes if paid in such year (determined without regard to
limitations on deductions based upon the amount of the
Employee's adjusted gross income), and
(3) to have otherwise allowable deductions for
federal, state and local income tax purposes at least equal to
those disallowed because of the inclusion of the Tax
Reimbursement Payment in the Employee's adjusted gross income.
(d) Subsequent Events. In the event that the Excise Tax is
subsequently determined by the Accountants to be less than the amount
taken into account hereunder in calculating the Tax Reimbursement
Payment made, the Employee shall repay to the Company, at the time that
the amount of such reduction in the Excise Tax is finally determined,
the portion of such prior Tax Reimbursement Payment that has been paid
to the Employee or to federal, state or local tax authorities on the
Executive's behalf and that would not have been paid if such Excise Tax
had been applied in initially calculating such Tax Reimbursement
Payment, plus interest on the amount of such repayment for the period
from the date the prior Tax Reimbursement Payment was received by the
Employee to the date of such repayment, at the rate provided in Section
1274(b)(2)(B) of the Internal Revenue Code. Notwithstanding the
foregoing, in the event any portion of the Tax Reimbursement Payment to
be refunded to the Company has been paid to any federal, state or local
tax authority, repayment thereof shall not be required until actual
refund or credit of such portion has been made to the Employee, and
interest payable to the Company shall not exceed interest received or
credited to the Employee by such tax authority for the period it held
such portion. The Employee and the Company shall mutually agree upon
the course of action to be pursued (and the method of allocating the
expenses thereof) if the Employee's good faith claim for refund or
credit is denied.
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In the event that the Excise Tax is later determined by the
Accountants to exceed the amount taken into account hereunder at the
time the Tax Reimbursement Payment is made (including, but not limited
to, by reason of any payment the existence or amount of which cannot be
determined at the time of the Tax Reimbursement Payment), the Company
shall make an additional Tax Reimbursement Payment in respect of such
excess (which Tax Reimbursement Payment shall include any interest or
penalty payable with respect to such excess) at the time that the
amount of such excess is finally determined.
(e) Date of Payment. The portion of the Tax Reimbursement
Payment attributable to a Covered Payment shall be paid to the Employee
within ten (10) business days following the payment of the Covered
Payment. If the amount of such Tax Reimbursement Payment (or portion
thereof) cannot be finally determined on or before the date on which
payment is due, the Company shall either pay to the Employee an amount
estimated in good faith by the Accountants to be the minimum amount of
such Tax Reimbursement Payment and shall pay the remainder of such Tax
Reimbursement Payment (which Tax Reimbursement Payment shall include
interest at the rate provided in Section 1274(b)(2)(B) of the Code) as
soon as the amount thereof can be determined, but in no event later
than forty-five (45) calendar days after payment of the related Covered
Payment. In the event that the amount of the estimated Tax
Reimbursement Payment exceeds the amount subsequently determined to
have been due, such excess shall be repaid or refunded pursuant to the
provisions of Section 8(d) above.
9. Nonexclusivity of Rights. Nothing in this Agreement shall prevent or
limit the Employee's continuing of future participation in any incentive, fringe
benefit, deferred compensation, or other plan or program provided by the Company
and for which the Employee may qualify, nor shall anything herein limit or
otherwise affect such rights as the Employee may have under any other agreements
with the Company; provided, however, that the Employee shall not be eligible for
participation in the Company-sponsored severance plan, hereby waives
participation in such plan and acknowledges that the provisions of this
Agreement regarding severance payments shall exclusively govern the Company's
obligations regarding the payment of severance to the Employee. Amounts that are
vested benefits or that the Employee is otherwise entitled to receive under any
plan or program of the Company at or after the Date of Termination, shall be
payable in accordance with such plan or program.
10. Developments. Employee shall disclose fully, promptly and in
writing to the Company any and all inventions, discoveries, improvements,
modifications and other intellectual property rights, whether patentable or not
which Employee has conceived, made or developed, solely or jointly with others,
while employed by the Company and which (i) relate to the business, work or
activities of the Company or (ii) result from or are suggested by the carrying
out of Employee's duties hereunder or from or by any information that Employee
may receive while employed by the Company. Employee hereby assigns, transfers
and conveys to the
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Company all of Employee's rights, title and interest in and to any and all such
inventions, discoveries, improvements, modifications and other intellectual
property rights and agrees to take all such actions as may be requested by the
Company at any time and, with respect to any such invention, discovery,
improvement, modification or other intellectual property rights, to confirm or
evidence such assignment, transfer and conveyance. Furthermore, at any time and
from time to time, upon the request of the Company, Employee shall execute and
deliver to the Company any and all instruments, documents and papers, give
evidence and do any and all other acts that, in the opinion of counsel for the
Company, are or may be necessary or desirable to document such assignment,
transfer and conveyance or to enable the Company to file and prosecute
applications for and to acquire, maintain and enforce any and all patents,
trademark registrations or copyrights under United States or foreign law with
respect to any such inventions, discoveries, improvements, modifications or
other intellectual property rights or to obtain any extension, validation,
reissue, continuance or renewal of any such patent, trademark or copyright. The
Company shall be responsible for the preparation of any such instruments,
documents and papers and for the prosecution of any such proceedings and shall
reimburse Employee for all reasonable expenses incurred by Employee incurred in
connection with compliance with the provisions of this Section 10.
. Confidential Information.
(a) Employee acknowledges that, by reason of Employee's
employment by the Company, Employee will have access to confidential
information of the Company and its subsidiaries and affiliates,
including, without limitation, information and knowledge pertaining to
products, inventions, discoveries, improvements, innovations, designs,
ideas, trade secrets, proprietary information, manufacturing,
packaging, advertising, distribution and sales methods, sales and
profit figures, customer and client lists and relationships between
such entities and dealers, distributors, sales representatives,
wholesalers, customers, clients, suppliers and others who have business
dealings with them ("Confidential Information"). Employee acknowledges
that such Confidential Information is a valuable and unique asset of
such entities and covenants that both during and after the Term,
Employee will not disclose any Confidential Information to any person
(except as Employee's duties as an executive of the Company may
require) without the prior written authorization of the Board of
Directors or the Company's chief executive officer. The obligation of
confidentiality imposed by this Section 11 shall not apply to
information that becomes generally known to the public through no act
of Employee in breach of this Agreement.
(b) Employee acknowledges that all documents, files and other
materials received from the Company during the Term (with the exception
of documents relating to Employee's compensation or benefits to which
Employee is entitled following the Term) are for use of Employee solely
in discharging Employee's duties and responsibility hereunder and that
Employee has no claim or right to the continued use or possession of
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such documents, files or other materials following termination of
Employee's employment by the Company. Employee agrees that, upon
termination of employment, Employee will not retain any such documents,
files or other materials and will promptly return to the Company any
documents, files, or other materials in Employee's possession or
custody.
12. Non-Competition. During the Term and without regard to its
termination for any reason, whether voluntary or involuntary, and for a period
of two (2) years after termination of employment with Company for any reason,
Employee shall not unless acting pursuant hereto or with the prior written
consent of the Board of Directors:
(a) directly or indirectly own, manage, operate, finance,
join, control or participate in the ownership, management, operation,
financing or control of, or be connected as an officer, director,
employee, partner, principal, agent, representative, consultant or
otherwise with, or use or permit Employee's name to be used in
connection with any Competing Business (defined below) or any entity
which would require by necessity use of Confidential Information;
provided, however, that notwithstanding the foregoing, this provision
shall not be construed to prohibit the passive ownership by Employee of
not more than 1% of the capital stock of any corporation which is
engaged in any of the foregoing businesses having a class of securities
registered pursuant to the Securities Exchange Act of 1934;
(b) solicit or divert to any Competing Business any individual
or entity which is a customer of the Company or its subsidiaries or
affiliates, or was such a customer at any time during the preceding
twelve (12) months from the date of Employee's employment termination;
or
(c) employ, attempt to employ, solicit or assist any Competing
Business in employing any current employee of the Company or its
subsidiaries or affiliates or any individual who was employed by the
Company or its subsidiaries or affiliates within the preceding twelve
(12) month period from Employee's employment termination.
The term "Competing Business" shall mean any business or enterprise
engaged in the business of manufacturing and sale of water treatment and process
chemicals or services or in any other business engaged in by the Company or its
subsidiaries or affiliates within (i) any state of the United States or the
District of Columbia or (ii) any foreign country in which the Company has
engaged in any such business within the prior year or, during the Term, or has
undertaken preparation to engage.
In the event that the provisions of Section 11 or 12 should ever be
adjudicated to exceed the time, geographic, product or other limitations
permitted by applicable law in any jurisdiction,
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then such provisions shall be deemed reformed in such jurisdiction to the
maximum time, geographic, product or other limitations permitted by applicable
law.
13. Equitable and Other Relief. The Employee acknowledges that the
restrictions contained in Sections 10, 11 and 12 hereof are, in view of the
nature of the business of the Company, reasonable and necessary to protect the
legitimate interests of the Company and that any violation of any provision of
those Sections will result in irreparable injury to the Company. The Employee
also acknowledges that in the event of any such violation, the Company shall be
entitled to preliminary and permanent injunctive relief, without the necessity
of proving actual damages, and to an equitable accounting of all earnings,
profits and other benefits arising from any such violation, which rights shall
be cumulative and in addition to any other rights or remedies to which the
Company may be entitled. The Employee agrees that in the event of any such
violation, or any other matter arising out of or relating to this Agreement, an
action may be removed to or commenced by the Company for any such preliminary
and permanent injunctive relief and other equitable relief or any other cause of
action in any federal or state court of competent jurisdiction in the state of
Pennsylvania. The Employee hereby waives, to the fullest extent permitted by
law, any objection that Employee may now or hereafter have to such jurisdiction
or to the laying of the venue of any such suit, action or proceeding brought in
such a court and any claim that such suit, action or proceeding has been brought
in or removed to an inconvenient forum. The Employee agrees that effective
service of process may be made upon Employee by mail under the notice provisions
contained in Section 14 hereof. In the event the Company files suit against
Employee to enforce any provision of Sections 10, 11 or 12, or in the event the
Company files suit against the Employee or is otherwise involved in litigation
or arbitration concerning the Agreement or the employment relationship of the
parties, and a court of competent jurisdiction or the arbitrator, as applicable,
finds in favor of the Company on any such matter, Employee shall reimburse the
Company its reasonable costs and attorneys' fees incurred in connection with
such suit or arbitration.
14. Notices. Any notice given to either party to this Agreement shall
be in writing, and shall be deemed to have been given when delivered personally
or sent by certified mail, postage prepaid, return receipt requested, duly
addressed to the party concerned, at the address indicated below or to such
changed address as such party may subsequently give notice of:
If to the Company:
BetzDearborn Inc.
0000 Xxxxxxxx Xxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attn: General Counsel
If to the Employee:
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15. Indemnification. To the extent provided under the Company's
Articles of Incorporation or Bylaws, the Employee shall be indemnified by the
Company to the maximum extent permitted under applicable law. The provisions of
this Section 15 shall survive the Date of Termination with respect to acts or
omissions occurring prior to such date.
16. Taxes. Anything in this Agreement to the contrary notwithstanding,
all payments required to be made hereunder by the Company to the Employee shall
be subject to withholding of such amounts relating to taxes as the Company may
reasonably determine that it should withhold pursuant to any applicable law or
regulations. In lieu of withholding such amounts, in whole or in part, however,
the Company may, in its sole discretion, accept other provision for payment of
taxes, provided that it is satisfied that all requirements of the law affecting
its responsibilities to withhold such taxes have been satisfied.
17. Enforcement of Rights. With respect to any Termination of
Employment of the Employee occurring during the Change of Control Period, all
legal fees and expenses and court and arbitration expenses, incurred by the
Employee in connection with seeking to obtain or enforce any right or benefit
provided for in this Agreement shall be paid by the Company, to the extent
permitted by law, provided that the Employee is successful in whole or in part
as to such claims as the result of litigation, arbitration, or settlement.
18. Further Assistance. For a period of two (2) years following the
Employee's Date of Termination, the Employee shall be available, upon reasonable
notice, to provide assistance and information to the Company on all matters that
relate to work for which the Employee had responsibility or to which the
Employee devoted attention during employment; provided that the such assistance
does not materially interfere with other the Employee's other employment
obligations and duties, and the Company agrees to pay the Employee for any
reasonable out-of-pocket expenses incurred by the Employee in connection with
such assistance.
19. Governing Law/Captions. This Agreement shall be construed in
accordance with, and pursuant to, the laws of the State of Pennsylvania without
giving effect to conflict of law provisions. The captions of this Agreement
shall not be part of the provisions hereof, and shall have no force or effect.
20. Contents of Agreement, Amendment and Assignment. This Agreement
sets forth the entire understanding between the parties hereto with respect to
the subject matter hereof, supersedes any prior employment agreement between the
parties and shall not be changed, modified or terminated except upon written
amendment executed by the Company and the
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Employee. All of the terms and provisions of this Agreement shall be binding
upon and inure to the benefit of and be enforceable by the successors and
assigns of the parties hereto, except that the duties and responsibilities of
the Employee hereunder are of a personal nature and shall not be assignable or
delegable in whole or in part by the Employee. This Agreement is assignable by
the Company, including without limitation to any entity, including a purchaser
of all or part of the Company's or a succeeding employer's business, and shall
apply with equal effect if, during the Term of this Agreement, the Employee
shall become employed by or work for any one or more of the subsidiaries or
affiliates of the Company. In the event that the Company, which term includes
any succeeding employer hereunder, shall sell substantially all of its operating
assets of the division or unit in which the Employee in engaged to a third party
which agrees in writing to assume all of the Company's obligations hereunder,
then the Company shall, upon the closing of any such transaction, have no
further duties or obligations hereunder.
21. Severability. If any provision of this Agreement or application
thereof to anyone or under any circumstances is adjudicated to be invalid or
unenforceable in any jurisdiction, such invalidity or unenforceability shall not
affect any other provision or application of this Agreement which can be given
effect without the invalid or unenforceable provision or application and shall
not invalidate or render unenforceable such provision or application in any
other jurisdiction; PROVIDED, HOWEVER, that with respect to any Termination of
Employment of the Employee during a period not constituting a Change of Control
Period, if the Company, in its reasonable discretion, determines that such
invalid or unenforceable provision goes to the essence of this Agreement so that
its invalidity relieves one party from the obligation of rendering substantial
performance hereunder, then the provisions of this Section 21 shall not be
effective and such invalid or unenforceable provision shall not be severable
from the remainder of this Agreement.
22. Survival. Notwithstanding the termination of the Term by reason of
a Date of Termination, the obligations of the Employee under Sections 10, 11, 12
or 18 hereof shall survive and remain in full force and effect for the periods
therein provided, and the provisions for equitable relief against the Employee
in Section 13 hereof shall continue in force. Additionally, the expiration of
the Term by reason of a Date of Termination shall not relieve the Company of its
obligations under Sections 7, 8, 15 or 17 hereof.
23. Remedies Cumulative; No Waiver. No remedy conferred upon the
Company by this Agreement is intended to be exclusive of any other remedy, and
each and every such remedy shall be cumulative and shall be in addition to any
other remedy given hereunder or now or hereafter existing at law or in equity.
No delay or omission by the Company in exercising any right, remedy or power
hereunder or existing at law or in equity shall be construed as a waiver
thereof, and any such right, remedy or power may be exercised by the Company
form time to time and as often as may be deemed expedient or necessary by the
Company in its sole discretion.
-22-
24. Arbitration. In the event of any dispute or claim relating to or
arising out of this Agreement or the employment relationship between the parties
or the termination of such relationship, such dispute shall be fully, finally
and exclusively resolved by a panel of three neutral arbitrators to be mutually
agreed upon by the parties. Such arbitration will be decided under the
employment dispute resolution rules of the American Arbitration Association and
will be held in Philadelphia, Pennsylvania. If the parties cannot agree upon
such arbitrators within twenty (20) days after submission of a party's request
for arbitration in writing, the arbitrators will be selected in accordance with
the procedures of the American Arbitration Association. Any such arbitration
proceedings must be instituted within the first to occur of (a) six months after
knowledge that the claimed wrong or breach occurred, or (b) one year after the
claimed wrong or breach occurred. The parties agree that the existence, content
and result of any arbitration proceeding shall be confidential, except to the
extent that the Company determines it is required to disclose such matters in
accordance with applicable laws. Nothing in this Section precludes the Company
from seeking the relief set forth under Section 13 of the Agreement in any other
forum.
25. Gender. As used herein, masculine pronouns shall include the
feminine, as the context requires.
IN WITNESS WHEREOF, the parties have executed this Agreement on the
date first above written.
BETZDEARBORN INC.
By:_______________________________________
Title:____________________________________
ATTEST:
-----------------------------
Title: ______________________
[CORPORATE SEAL]
EMPLOYEE:
__________________________________________
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