Exhibit 10.iii.(p)
EXECUTIVE SEVERANCE AGREEMENT
This Executive Severance Agreement (the "Agreement) is dated as of
__________________, 1999 between __________________ (the "Executive") and
IMC Global Inc., a Delaware corporation (the "Company").
WHEREAS, the Company desires to retain the Executive as its Senior Vice
President, Environment, Health and Safety and the Executive desires to
continue in such position; and
WHEREAS, the Company and the Executive desire to provide appropriate
assurances for the Executive to continue to perform the Executive's duties
and responsibilities thereby promoting the stability of the Company.
NOW, THEREFORE, in consideration of the agreements and covenants contained
herein, the sufficiency of which is acknowledged, the Executive and the
Company hereby agree as follows:
1. Definitions. Each term defined herein shall be given its defined
meaning wherever used in this Agreement unless the context requires
otherwise.
(a) "Base Salary" means the Executive's annualized base salary as adjusted
from time to time.
(b) "Cause" means the Executive (i) grossly neglects her duties,
(ii) engages in misconduct; (iii) breaches a material provision of this
Agreement, including, but not limited to, Section 4; (iv) willfully fails
to cooperate fully with the Company in effecting a smooth transition of the
Executive's duties and responsibilities to such person(s) as may be
designated by the Company. Gross neglect means the willful failure to
perform the essential functions of the Executive's job or the willful
failure to carry out the Company's reasonable directions with respect to
material duties after the Executive is notified in writing by the Company
that the Executive is failing to perform these essential functions or
failing to carry out the reasonable directions of the Company. Such notice
shall specify the functions or directions that the Executive is failing to
perform and what steps need to be taken to cure and shall set forth the
reasonable time frame, which shall be at a minimum 45 days, within which to
cure. "Misconduct" means embezzlement or misappropriation of corporate
funds, or other acts of fraud, dishonesty, or self-dealing; provided,
however, that the Executive shall be given notice and an opportunity within
the next 45 days to explain her position and actions to the Company, which
shall then make a final decision; any significant violation of any
statutory or common law duty of loyalty to the Company; conviction for a
felony; or any significant violation of Company policy or any inappropriate
workplace conduct that seriously disrupts or interferes with Company
operations; provided, however, that if the policy violation or
inappropriate conduct can be cured, then the Executive shall be given
written notice of the policy violation or inappropriate conduct and a
reasonable opportunity to cure, which shall be at a minimum 45 days.
(c) "Company" means IMC Global Inc. and its subsidiaries, as they may exist
from time to time.
(d) "Effective Date" means the date first set forth above.
(e) "Good Reason" for termination of employment by the Executive shall mean
any of the following reasons explained below in paragraphs 1, 2 and 3. In
each case, to constitute a termination for Good Reason entitling the
Executive to Severance Benefits as described in Section 3 of this
Agreement, the following must occur:
(i) Within 90 days after the Executive has or reasonably should have
knowledge that Good Reason exists, the Executive must give the Company
written notice specifying the grounds for her belief that Good Reason
exists;
(ii) The Company shall then have a reasonable opportunity, which shall be
at least 45 days, to cure; and
(iii) If the Company cures the Good Reason within the cure period, then the
Executive shall have no right to terminate employment for Good Reason. If
the Company does not cure the Good Reason within the cure period, then
within 14 days of the completion of the cure period, the Executive may give
written notice of her intent to terminate her employment for Good Reason.
The effective date of such termination for Good Reason shall be two
calendar months after the date of the notice to terminate. At its sole
discretion, the Company shall have the right to accelerate the termination
date by paying the Executive her base pay for the balance of the two-month
notice period.
1. the continued failure by the Company, after notice and a reasonable
opportunity to cure, to (i) maintain for the initial term of this Agreement
the Executive's Base Salary at a rate equal to or higher than the rate in
effect on the Effective Date and for any subsequent term of the Agreement
maintain the Executive's Base Salary at a rate equal to or higher than the
rate in effect on the Effective Date; provided, however, that during any
such subsequent term, Good Reason shall not exist as the result of any
decrease in Base Salary if such decrease is incident to a general reduction
applied to corporate officers at a similar level as the Executive on a
proportionate and nondiscriminatory basis; (ii) provide for continued
participation on a comparable basis by the Executive in an annual bonus
plan maintained by the Company in which corporate officers at a similar
level as the Executive participate; (iii) provide for participation in
stock option and other equity incentive plans or programs maintained by the
Company from time to time in which corporate officers at a similar level as
the Executive participate; (iv) provide for participation in all Company
sponsored group or executive medical, dental, life, disability, retirement,
profit-sharing, thrift, non-qualified, deferred compensation, and other
plans maintained by the Company to the same extent as corporate officers at
a similar level as the Executive participate; (v) provide vacation, and
perquisites substantially equivalent to those provided by the Company to
corporate officers at a similar level as the Executive; or (vi) obtain the
express unconditional assumption of this Agreement as required by Section
8, it being understood that nothing contained in this clause alters the
Company's obligations under Section 8 of this Agreement; or
2. a significant adverse change, without the Executive's written consent
that continues after notice and a reasonable opportunity to cure, in
working conditions or status, including but not limited to a significant
adverse change in the nature or scope of the Executive's authority, powers,
functions, duties or responsibilities; provided, however, a change in the
Company's status such that it no longer has any equity securities
registered under Section 12(b) or 12(g) of the Securities Exchange Act of
1934, as amended, or that it becomes a subsidiary of another entity which
directly results in changes in the nature or scope of the Executive's
authority, powers, functions, duties or responsibilities shall not in and
of itself constitute Good Reason hereunder; or
3. a change, without the Executive's consent, in the Executive's primary
employment location to a location that is more than 50 miles from the
primary location of the Executive's employment as in effect immediately
prior to the Effective Date.
(f) "Severance Event" shall be deemed to have occurred if, and only if,
during the Term of this Agreement, which includes the initial term and any
extension or renewals as provided in Section 2, (i) the Executive's
employment is terminated by the Company other than for Cause or upon the
Executive's death or inability to perform the essential functions of her
position with or without reasonable accommodation or (ii) the Executive
terminates her employment for Good Reason. If, however, the Executive's
employment is terminated whether by the Executive with or without Good
Reason or by the Company with or without Cause in connection with a "change
in control" of the Company, as such phrase is defined in Section 5 of this
Agreement, such termination shall not constitute a Severance Event;
provided, however, the Executive's employment shall not be considered to
have terminated in connection with a change in control of the Company as so
defined unless such change in control has occurred in such manner and such
time as to have made Section 5 of this Agreement effective prior to the
Executive's termination.
2. Term. The term of this Agreement shall commence on the Effective
Date and shall terminate on the second anniversary of the Effective Date;
provided, however, that unless the Company gives written notice of its
intent to terminate the Agreement at least one calendar month prior to the
second anniversary of the Effective Date, this Agreement shall renew
automatically for an additional one year term and shall continue to renew
automatically for additional one year terms unless written notice of the
Company's intent to terminate the Agreement is given to the Executive at
least one calendar month prior to the expiration of the then current term.
3. Severance Benefits. Upon the occurrence of a Severance Event and the
execution of a general release (substantially in the form attached hereto
as Exhibit A) of all claims against the Company and other related entities
or persons without additional consideration, and upon the expiration of
any applicable revocation period, the Executive shall be entitled to
receive the following "Severance Benefits":
(a) An amount equal to the target award for the Executive under the
Company's Management Incentive Compensation Program ("MICP"), or successor
annual bonus plan in effect from time to time, for the fiscal year in which
the Severance Event Occurs reduced pro rata for that portion of the fiscal
year not completed as of the end of the month in which the Severance Event
occurs;
(b) An amount equal to the target award for the Executive under the
Company's 1996 Long-Term Incentive Plan, or successor long-term incentive
plan in effect from time to time, for the fiscal year in which the
Severance Event occurs reduced pro rata for that portion of the fiscal year
not completed as of the end of the month in which the Severance Event
occurs;
(c) An amount equal to two times the Executive's then current Base Salary,
payable in accordance with regular payroll procedures of the Company;
(d) An amount equal to two times the highest annual bonus earned under the
Company's Management Incentive Compensation Program, or successor annual
bonus plan in effect from time to time, during the three consecutive
complete bonus years immediately preceding the date on which the Severance
Event occurs; provided, however, that in the event that the Executive's
employment is terminated prior to the completion of three complete bonus
years, any prorated annual bonus received by the Executive shall be
annualized and the bonus years in which the Executive's employment
commences or terminates shall be deemed to be "complete bonus years" for
purposes of determining the highest annual bonus earned by the Executive
during the three complete bonus years immediately preceding the date on
which the Severance Event occurs;
(e) If the Executive timely and appropriately exercises her right to
continue her coverage under the Company's medical and dental plans as
provided under the Consolidated Omnibus Budget Reconciliation Act of 1985,
as amended ("COBRA"), then the Company will pay the employer portion (and
the Executive will pay the employee portion) of such premiums for the
Executive until the earlier of: (i) the expiration of the two year period
following the date of the Severance Event and (ii) the date on which the
Executive is no longer eligible to continue such coverage under clause
4980B(f)(2)(B)(ii), (iii), (iv) or (v) of COBRA. Except as provided in
this paragraph, the Executive's continued participation and coverage under
the group health insurance plans shall be governed by COBRA; and
(f) The Company shall continue the Executive's coverage under its life and
disability insurance policies until the earlier of (i) the expiration of
the two year period following the date of termination and (ii) the date on
which the Executive becomes eligible to participate in and receive similar
benefits under a plan or arrangement sponsored by another employer or under
any Company sponsored retirement plan. Participation shall be on the same
terms and conditions as are applicable to active employees.
Severance Benefits shall be subject to all applicable federal, state and
local deductions and withholdings. Those Severance Benefits described in
paragraphs (a) and (b) shall be paid in a lump sum within 30 days of the
Severance Event. At the option of the Company, the present value of the
Severance Benefits described in paragraphs 3 (c) and (d) above may be paid
in a lump sum at any point during the Severance Benefits period. The
Company's obligation to continue Severance Benefits shall cease immediately
if the Company has or would have had grounds to terminate the Executive's
employment immediately for Cause. In the event the Executive dies or
becomes disabled before all Severance Benefits are paid to her, the
remaining amounts due to her under Sections 3(c) and 3(d) shall be reduced
by the proceeds the Executive's estate receives under any life insurance
policy with respect to which the premiums are paid by the Company or any
benefits the Executive receives under any Company disability policy; but
subject to such reductions, those remaining amounts, if any, shall be paid
to the Executive or her estate. If any family member of the Executive is
receiving medical and/or dental coverage under Section 3(e) at the time of
the Executive's death or disability and such family member constitutes a
"qualified beneficiary" under COBRA, such medical and/or dental coverage
shall continue in accordance with the requirements of COBRA, provided that
such family member pays the full cost of the premium for such coverage.
The Executive understands and acknowledges that the Severance Benefits
constitute her sole benefits upon termination.
4. Exclusivity of Services and Confidential/ Proprietary Information.
(a) Executive acknowledges that during her employment with the Company she
has developed, acquired, and had access to and will develop, acquire and
have access to trade secrets or other proprietary or confidential
information belonging to the Company and that such information gives the
Company a substantial business advantage over others who do not have such
information. Accordingly, the Executive agrees to the following
obligations that she acknowledges to be reasonably designed to protect the
Company's legitimate business interests without unnecessarily or
unreasonably restricting her post-employment opportunities:
(i) during employment with the Company and for a period of two years
following the Executive's termination of employment, regardless of the
reason for the termination or by whom initiated, she will not engage or
assist others in engaging in competition with the Company, directly or
indirectly, whether as an employer, proprietor, partner, stockholder (other
than the holder of less than 5% of the stock of a corporation the
securities of which are traded on a national securities exchange or in the
over-the-counter market), director, officer, employee, consultant, agent,
or otherwise, in the business of producing and distributing potash,
phosphate, animal feed ingredients or salt or any other significant
business in which the Company is engaged or is preparing to engage in at
the time of termination;
(ii) during employment with the Company and for a period of two years
following the Executive's termination of employment, regardless of the
reason for the termination or by whom initiated, she will not solicit, in
competition with the Company, directly or indirectly, any person who is a
client, customer or prospect (as such terms are defined below) (including,
without limitation, purchasers of the Company's products) for the purpose
of performing services and/or providing goods and services of the kind
performed and/or provided by the Company in the business of producing and
distributing potash, phosphate, animal feed ingredients or salt or any
other significant business in which the Company is engaged or is preparing
to engage in at the time of termination;
(iii) during employment with the Company and for a period of two years
following the Executive's termination of employment, regardless of the
reason for the termination or by whom initiated, she will not induce or
persuade or attempt to induce or persuade any employee or agent of the
Company to terminate her or her employment, agency, or other relationship
with the Company in order to enter into any employment agency or other
relationship in competition with the Company;
(iv) the covenants contained in this Section 4(a) shall apply within any
jurisdiction of North America, it being understood that the geographic
scope of the business and strategic plans of the Company extend throughout
North America and are not limited to any particular region thereof and that
such business may be engaged in effectively from any location in such area;
and
(v) as used herein, the terms "client," "customer" and "prospect" shall
be defined as any client, customer or prospect of any business in which the
Company is or has been substantially engaged within the one year period
prior to the Executive's termination of employment (a) to which or to whom
the Executive submitted or assisted in the submission of a presentation or
proposal of any kind on behalf of the Company; (b) with which or with whom
the Executive had substantial contact relating to the business of the
Company; or (c) about which or about whom the Executive acquired
substantial confidential or other information as a result of or in
connection with the Executive's employment, at any time during the one year
period preceding the Executive's termination of employment for any reason.
Notwithstanding the foregoing, if the Company consents in writing, it shall
not be a violation of this Section 4(a) for the Executive to engage in
conduct otherwise prohibited by this Section.
(b) The Executive agrees that she will not at any time during employment
or thereafter for the longest time permitted by applicable law, use,
disclose, or take any action which may result in the use or disclosure of
any trade secrets or other proprietary or confidential information of the
Company, except to the extent that the Company may specifically authorize
in writing. This obligation shall not apply when and to the extent that any
trade secret, proprietary or confidential information of the Company
becomes publicly available other than due to the Executive's act or
omission. In connection with this Section 4, the Executive has executed
and shall abide by the terms of the separate agreement attached hereto as
Exhibit B.
(c) The Executive agrees that upon termination of her employment she will
immediately surrender and return to the Company all records and other
documents obtained by her, entrusted to her, or otherwise in her possession
or control during the course of her employment by the Company, together
with all copies thereof; provided, however, that subject to Company review
and authorization, the Executive may retain copies of such documents as
necessary for the Executive's personal records for federal income tax
purposes.
(d) The Executive acknowledges that the provisions contained in this
Section 4 are reasonable and necessary because of the substantial harm that
would be caused to the Company by the Executive engaging in any of the
activities prohibited or restricted herein. Nevertheless, it is the intent
and understanding of each party hereto that if, in any action before any
court, agency or other tribunal legally empowered to enforce the covenants
contained in this Section 4, any term, restriction, covenant or promise
contained therein is found to be unenforceable due to unreasonableness or
due to any other reason, then such term, restriction, covenant or promise
shall be deemed modified to the extent necessary to make it enforceable by
such court or agency.
(e) The Executive acknowledges that her breach of this Section 4 will
result in immediate and irreparable harm to the Company's business
interests, for which damages cannot be calculated easily and for which
damages are an inadequate full remedy. Accordingly, and without limiting
the right of the Company to pursue all other legal or equitable remedies
available for the violation by the Executive of the covenants contained in
this Section 4, it is expressly agreed that remedies other than injunctive
relief cannot fully compensate the Company for the irreparable injury that
the Company could suffer due to any such violation, threatened violation or
continuing violation and that the Company shall be entitled to injunctive
relief, without the necessity of proving actual monetary loss, to prevent
any such violation, threatened violation or continuing violation thereof.
5. Change in Control.
(a) Effective Date. For purposes of this Section 5, the term "Effective
Date" shall mean the date on which a Change in Control of the Company (as
defined in Section 5(i)) occurs. This Section 5 shall not become
effective, and the Company shall have no obligation hereunder, if the
employment of the Executive with the Company shall terminate prior to a
Change in Control of the Company. If there is a Change in Control and this
Section becomes effective, then this Section shall govern the terms and
conditions of the Executive's employment and termination thereof and the
provisions of Sections 1, 2, 3, and 4 of this Agreement shall no longer be
effective.
(b) Right to Change in Control Severance Benefits. The Executive shall be
entitled to receive from the Company Change in Control Severance Benefits
as described in Section 5(g) herein, if during the term of this Agreement
there has been a Change in Control of the Company and there is a
Termination (as defined in Section 5(f)) prior to the expiration of the
Employment Term (as defined in Section 5(c)).
(c) Employment Term. For purposes of this Section 5, the term "Employment
Term" shall mean the period commencing on the Effective Date of this
Section 5 and ending on the earlier to occur of (1) the last day of the
month in which occurs the third anniversary of the Effective Date of this
Section 5 or (2) the last day of the month in which the Executive attains
mandatory retirement age pursuant to the terms of a mandatory retirement
plan of the Company as such were in effect and applicable to the Executive
immediately prior to the Effective Date of this Section 5.
(d) Employment. The Company hereby agrees to continue the Executive in its
employ, and the Executive hereby agrees to remain in the employ of the
Company, until the expiration of the Employment Term. During the
Employment Term, the Executive shall exercise such position and authority
and perform such responsibilities as are commensurate with the position and
authority being exercised and duties being performed by the Executive
immediately prior to the Effective Date of this Section 5, which services
shall be performed at the location where the Executive was employed
immediately prior to the Effective Date of this Section 5 or at such other
location as the Company may reasonably require; provided, that the
Executive shall not be required to accept another location that she deems
unreasonable in the light of her personal circumstances.
(e) Compensation and Benefits. During the Employment Term, the Executive
shall receive the following compensation and benefits:
1. She shall receive an annual base salary which is not less than her Base
Salary immediately prior to the Effective Date of this Section 5, with the
opportunity for increases, from time to time thereafter, which are in
accordance with the Company's regular executive compensation practices.
2. She shall be eligible to participate on a reasonable basis, and to
continue her existing participation, in annual incentive, stock option,
restricted stock, long-term incentive performance and any other
compensation plan which provides opportunities to receive compensation in
addition to her Base Salary which is the greater of (i) the opportunities
provided by the Company for executives with comparable duties or (ii) the
opportunities under any such plans in which she was participating
immediately prior to the Effective Date of this Section 5.
3. She shall be entitled to receive and participate in salaried employee
benefits (including, but not limited to, medical, life and accident
insurance, investment, stock ownership and disability benefits) and
perquisites which are the greater of (i) the employee benefits and
perquisites provided by the Company to executives with comparable duties or
(ii) the employee benefits and perquisites to which she was entitled or in
which she participated immediately prior to the Effective Date of this
Section 5.
4. She shall be entitled to continue to accrue credited service for
retirement benefits and to be entitled to receive retirement benefits under
and pursuant to the terms of the Company's qualified retirement plan for
salaried employees, the Company's supplemental executive retirement plan,
and any successor or other retirement plan or agreement in effect on the
Effective Date of this Section 5 in respect of her retirement, whether or
not a qualified plan or agreement, so that her aggregate monthly retirement
benefit from all such plans and agreements (regardless when she begins to
receive such benefit) will be not less than it would be had all such plans
and agreements in effect immediately prior to the Effective Date of this
Section 5 continued to be in effect without change until and after she
begins to receive such benefit.
(f) Termination. The term "Termination" shall mean termination, prior to
the expiration of the Employment Term, of the employment of the Executive
with the Company for any reason other than death, disability (as described
below), cause (as described below), or voluntary resignation (as described
below).
1. The term "disability" means physical or mental incapacity qualifying the
Executive for long-term disability under the Company's long-term disability
plan.
2. The term "cause" means (i) the willful and continued failure of the
Executive substantially to perform her duties with the Company (other than
any failure due to physical or mental incapacity) after a demand for
substantial performance is delivered to her by the Board of Directors which
specifically identifies the manner in which the Board believes she has not
substantially performed her duties or (ii) willful misconduct materially
and demonstrably injurious to the Company. No act or failure to act by the
Executive shall be considered "willful" unless done or omitted to be done
by her not in good faith and without reasonable belief that her action or
omission was in the best interest of the Company. The unwillingness of the
Executive to accept any or all of a change in the nature or scope of her
position, authorities or duties, a reduction in her total compensation or
benefits, a relocation that she deems unreasonable in light of her personal
circumstances, or other action by or request of the Company in respect of
her position, authority or responsibility that she reasonably deems to be
contrary to this Agreement, may not be considered by the Board of Directors
to be a failure to perform or misconduct by the Executive. Notwithstanding
the foregoing, the Executive shall not be deemed to have been terminated
for cause for purposes of this Section 5 unless and until there shall have
been delivered to her a copy of a resolution, duly adopted by a vote of
three-quarters of the entire Board of Directors of the Company at a meeting
of the Board called and held (after reasonable notice to the Executive and
an opportunity for the Executive and her counsel to be heard before the
Board) for the purpose of considering whether the Executive has been guilty
of such a willful failure to perform or such willful misconduct as
justifies termination for cause hereunder, finding that in the good faith
opinion of the Board the Executive has been guilty thereof and specifying
the particulars thereof.
3. The resignation of the Executive shall be deemed "voluntary" if it is
for any reason other than one or more of the following:
(a) The Executive's resignation or retirement (other than mandatory
retirement, as aforesaid) is requested by the Company other than for cause;
(b) Any significant change in the nature or scope of the Executive's
position, authorities or duties from those described in Section 5(d) of
this Agreement;
(c) Any reduction in her total compensation or benefits from that provided
in Section 5(e);
(d) The breach by the Company of any other provision of this Section 5; or
(e) The reasonable determination by the Executive that, as a result of a
Change in Control of the Company and a change in circumstances in her
position, she is unable to exercise the authorities and responsibility
attached to her position and contemplated by Section 5(d) of this
Agreement.
4. Termination that entitles the Executive to the payments and benefits
provided in Section 5(g) shall not be deemed or treated by the Company as
the termination of the Executive's employment or the forfeiture of her
participation, award or eligibility for the purpose of any plan, practice
or agreement of the Company referred to in Section 5(e).
(g) Change in Control Severance Payments. In the event of and within 30
days following Termination, the Company shall pay to the Executive the
following benefits (collectively, "Change in Control Severance Payments"):
1. Her Base Salary and all other benefits due her as if she had remained an
employee pursuant to this Section 5 through the remainder of the month in
which Termination occurs, less applicable withholding taxes and other
authorized payroll deductions;
2. An amount equal to the target award for the Executive under the
Company's annual bonus plan for the fiscal year in which Termination
occurs, reduced pro rata for that portion of the fiscal year not completed
as of the end of the month in which Termination occurs; provided, however,
that if the Executive has deferred her award for such year under the plan,
the payment due the Executive under this Paragraph (2) shall be paid in
accordance with the terms of the deferral;
3. An amount equal to the target award for the Executive under the
Company's long-term incentive plan for the fiscal year in which Termination
occurs, reduced pro rata for that portion of the fiscal year not completed
as of the end of the month in which Termination occurs;
4. A lump sum severance allowance in an amount which is equal to the sum of
the amounts determined in accordance with the following subparagraphs (a)
and (b):
(a) an amount equal to three times the Executive's Base Salary at the rate
in effect immediately prior to Termination; and
(b) an amount equal to three times the highest annual bonus earned under
the Company's Management Incentive Compensation Program, or successor
annual bonus plan in effect from time to time, during the three consecutive
complete bonus years immediately prior to Termination; provided, however,
that in the event that the Executive's employment is terminated prior to
the completion of three complete bonus years, any prorated annual bonus
received by the Executive shall be annualized and the bonus years in which
the Executive's employment commences or terminates shall be deemed to be
"complete bonus years" for purposes of determining the highest annual bonus
earned by the Executive during the three complete bonus years immediately
prior to Termination.
(h) Non-Competition and Confidentiality. The Executive agrees that:
1. There shall be no obligation on the part of the Company to provide any
further Change in Control Severance Benefits (other than payments or
benefits already earned or accrued) described in Section 5(g) if, when and
so long as the Executive shall be employed by or otherwise engage in any
business which is competitive with any business of the Company or of any of
its subsidiaries, as such business existed as of the Effective Date of this
Section 5, in which the Executive was engaged during her employment, and if
such employment or activity is likely to cause serious damage to the
Company or any of its subsidiaries; and
2. during and after the Employment Term, she will not divulge or
appropriate to her own use or the use of others any secret or confidential
information pertaining to the businesses of the Company or any of its
subsidiaries obtained during her employment by the Company, it being
understood that this obligation shall not apply when and to the extent any
of such information becomes publicly known or available other than because
of her act or omission.
(i) Definition of "Change in Control". "Change in Control" of the Company
means, and shall be deemed to have occurred upon, the first to occur of
any of the following events:
1. the acquisition by any individual, entity or group (a "Person"),
including any "person" within the meaning of Section 13(d)(3) or 14(d)(2)
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), of
beneficial ownership within the meaning of Rule 13d-3 promulgated under the
Exchange Act, of 15% or more of either (i) the then outstanding shares of
common stock of the Company (the "Outstanding Common Stock") or (ii) the
combined voting power of the then outstanding securities of the Company
entitled to vote generally in the election of directors (the "Outstanding
Voting Securities"); excluding, however, the following: (A) any acquisition
directly from the Company (excluding any acquisition resulting from the
exercise of an exercise, conversion or exchange privilege unless the
security being so exercised, converted or exchanged was acquired directly
from the Company), (B) any acquisition by the Company, (C) any acquisition
by an employee benefit plan (or related trust) sponsored or maintained by
the Company or any corporation controlled by the Company or (D) any
acquisition by any corporation pursuant to a transaction which complies
with clauses (i), (ii) and (iii) of subsection (3) of this Section 5(i);
2. Individuals who, as of the effective date of this Section 5, constitute
the Board of Directors (the "Incumbent Board") cease for any reason to
constitute at least a majority of such Board; provided, that any individual
who becomes a director of the Company subsequent to the effective date of
this Section 5, whose election, or nomination for election by the Company's
stockholders, was approved by the vote of at least a majority of the
directors then comprising the Incumbent Board shall be deemed a member of
the Incumbent Board; and provided further, that any individual who was
initially elected as a director of the Company as a result of an actual or
threatened election contest, as such terms are used in Rule 14a-11 of
Regulation 14A promulgated under the Exchange Act, or any other actual or
threatened solicitation of proxies or consents by or on behalf of any
Person other than the Board shall not be deemed a member of the Incumbent
Board;
3. approval by the stockholders of the Company of a reorganization, merger
or consolidation of the Company or sale or other disposition of all or
substantially all of the assets of the Company (a "Corporate Transaction");
excluding, however, a Corporate Transaction pursuant to which (i) all or
substantially all of the individuals or entities who are the beneficial
owners, respectively, of the Outstanding Common Stock and the Outstanding
Voting Securities immediately prior to such Corporate Transaction will
beneficially own, directly or indirectly, more than 60% of, respectively,
the outstanding shares of common stock, and the combined voting power of
the outstanding securities of such corporation entitled to vote generally
in the election of directors, as the case may be, of the corporation
resulting from such Corporate Transaction (including, without limitation, a
corporation which as a result of such transaction owns the Company or all
or substantially all of the Company's assets either directly or indirectly)
in substantially the same proportions relative to each other as their
ownership, immediately prior to such Corporate Transaction, of the
Outstanding Common Stock and the Outstanding Voting Securities, as the case
may be, (ii) no Person (other than: the Company; any employee benefit plan
(or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company; the corporation resulting from such
Corporate Transaction; and any Person which beneficially owned, immediately
prior to such Corporate Transaction, directly or indirectly, 25% or more of
the Outstanding Common Stock or the Outstanding Voting Securities, as the
case may be) will beneficially own, directly or indirectly, 25% or more of,
respectively, the outstanding shares of common stock of the corporation
resulting from such Corporate Transaction or the combined voting power of
the outstanding securities of such corporation entitled to vote generally
in the election of directors and (iii) individuals who were members of the
Incumbent Board will constitute at least a majority of the members of the
board of directors of the corporation resulting from such Corporate
Transaction; or
4. the consummation of a plan of complete liquidation or dissolution of the
Company.
(j) Excise Tax Payments. If any of the payments to be made under Section 5
or any payments which are construed as being made under Section 5, will be
subject to the tax (the "Excise Tax") imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") (or any similar tax
that may hereafter be imposed), the Company shall pay to the Executive at
the time specified in Paragraph 1 below an additional amount (the "Gross-up
Payment") such that the net amount retained by the Executive, after
deduction of any Excise Tax on the Total Payments (as hereinafter defined)
and any federal, state and local income tax and Excise Tax upon the Gross-
up Payment provided for by this paragraph, but before deduction for any
federal, state or local income tax on the Change in Control Severance
Payments, shall be equal to the Total Payments.
1. For purposes of determining whether any of the Change in Control
Severance Payments will be subject to the Excise Tax and the amount of such
Excise Tax, (i) any other payments or benefits received or to be received
by the Executive in connection with a Change in Control (as that term is
defined in Section 5(i)) of the Company or the Executive's termination of
employment (whether pursuant to the terms of this Agreement or any other
plan, arrangement or agreement with the Company, any person whose actions
result in a Change of Control of the Company or any person affiliated with
the Company or such person) (which, together with the Change in Control
Severance Payments, shall constitute the "Total Payments") shall be treated
as "parachute payments" within the meaning of Section 280G(b)(2) of the
Code, and all "excess parachute payments" within the meaning of Section
280G(b)(1) of the Code shall be treated as subject to the Excise Tax,
unless in the opinion of tax counsel selected by the Company's independent
auditors such other payments or benefits (in whole or in part) do not
constitute parachute payments, or such excess parachute payments (in whole
or in part) represent reasonable compensation for services actually
rendered within the meaning of Section 280G(b)(4) of the Code in excess of
the base amount within the meaning of Section 280G(b)(3) of the Code or are
otherwise not subject to the Excise Tax, (ii) the amount of the Total
Payments which shall be treated as subject to the Excise Tax shall be equal
to the lesser of (A) the total amount of the Total Payments or (B) the
amount of excess parachute payments within the meaning of Section
280G(b)(1) of the Code (after applying clause (i) above), and (iii) the
value of any non-cash benefits or any deferred payment or benefit shall be
determined by the Company's independent auditors in accordance with the
principles of Sections 280G(d)(3) and (4) of the Code.
2. For purposes of determining the amount of the Gross-up Payment, the
Executive shall be deemed to pay federal income taxes at the highest
marginal rate of federal income taxation for the calendar year in which the
Gross-up Payment is to be made and the applicable state and local income
taxes at the highest marginal rate of taxation for the calendar year in
which the Gross-up Payment is to be made, net of the maximum reduction in
federal income taxes which could be obtained from deduction of such state
and local taxes. In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account hereunder at the
time the Gross-up Payment is made, the Executive shall repay to the Company
at the time that the amount of such reduction in Excise Tax is finally
determined the portion of the Gross-up Payment attributable to such
reduction (plus the portion of the Gross-up Payment attributable to the
Excise Tax and federal and state and local income tax imposed on the
portion of the Gross-up Payment being repaid by the Executive if such
repayment results in a reduction in Excise Tax and/or a federal and state
and local income tax deduction), plus interest on the amount of such
repayment at the rate provided in Section 1274(b)(2)(B) of the Code. In
the event that the Excise Tax is determined to exceed the amount taken into
account hereunder at the time the Gross-up Payment is made (including by
reason of any payment, the existence or amount of which cannot be
determined at the time of the Gross-up Payment), the Company shall make an
additional Gross-up Payment in respect of such excess (plus any interest
payable with respect of such excess) at the time that the amount of such
excess is finally determined.
3. The Gross-up Payment or portion thereof provided for in Paragraphs 1and
2 above shall be paid not later than the thirtieth day following payment of
any amounts under this Section 5; provided, however, that if the amount of
such Gross-up Payment or portion thereof cannot be finally determined on or
before such day, the Company shall pay to the Executive on such day an
estimate, as determined in good faith by the Company, of the minimum amount
of such payments and shall pay the remainder of such payments (together
with 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
the forty-fifth day after payment of any amounts under this Section 5.
4. In the event that the amount of the estimated payments exceeds the
amount subsequently determined to have been due, such excess shall
constitute a loan by the Company to the Executive, payable on the fifth day
after demand by the Company (together with interest at the rate provided in
Section 1274(b)(2)(B) of the Code).
5. All Gross-up Payments will be paid to the Executive from the Trust
established under the Trust Agreement between IMC Global Inc. and Wachovia
Bank Trust Company, N.A., which has been established to protect payment
obligations of the Company under this Agreement. Any repayment due the
Company from the Executive as a result of the circumstances described in
the last sentence of the preceding paragraph shall be made by the Executive
after the Executive has received such excess amounts from the Trust.
6. If there are any changes in the Code which otherwise would or might
affect the workings of this Section 5(j), then Section 5(j) shall be deemed
to be revised in such a way as to provide to the Executive the maximum
benefits she would be entitled to receive under the current language of
Section 5(j) and the Code.
(k) Enforcement Costs. The Company is aware that upon the occurrence of a
Change in Control, the Board of Directors or a stockholder of the Company
may then cause or attempt to cause the Company to refuse to comply with its
obligations under this Section 5, or may cause or attempt to cause the
Company to institute, or may institute, litigation seeking to have this
Section 5 declared unenforceable, or may take, or attempt to take, other
action to deny the Executive the benefits intended under this Section 5.
In these circumstances, the purpose of this Section 5 could be frustrated.
It is the intent of the parties that the Executive not be required to incur
the legal fees and expenses associated with the protection or enforcement
of her rights under this Section 5 by litigation or other legal action
because such costs would substantially detract from the benefits intended
to be extended to the Executive hereunder, nor be bound to negotiate any
settlement of her rights hereunder under threat of incurring such costs.
Accordingly, if at any time after the Effective Date of this Section 5, it
should appear to the Executive that the Company is or has acted contrary to
or is failing or has failed to comply with any of its obligations under
this Section 5 for the reason that it regards this Section 5 to be void or
unenforceable or for any other reason, or that the Company has purported to
terminate her employment for cause or is in the course of doing so in
either case contrary to this Section 5, or in the event that the Company or
any other person takes any action to declare this Section 5 void or
unenforceable, or institutes any litigation or other legal action designed
to deny, diminish or to recover from the Executive the benefits provided or
intended to be provided to her hereunder, and the Executive has acted in
good faith to perform her obligations under this Section 5, the Company
irrevocably authorizes the Executive from time to time to retain counsel of
her choice at the expense of the Company to represent her in connection
with the protection and enforcement of her rights hereunder, including
without limitation representation in connection with termination of her
employment contrary to this Section 5 or with the initiation or defense of
any litigation or other legal action, whether by or against the Executive
or the Company or any director, officer, stockholder or other person
affiliated with the Company, in any jurisdiction. The reasonable fees and
expenses of counsel selected from time to time by the Executive as
hereinabove provided shall be paid or reimbursed to the Executive by the
Company on a regular, periodic basis upon presentation by the Executive of
a statement or statements prepared by such counsel in accordance with its
customary practices, up to a maximum aggregate amount of $200,000. Counsel
so retained by the Executive may be counsel representing other officers or
key executives of the Company in connection with the protection and
enforcement of their rights under similar agreements between them and the
Company, and, unless in her sole judgement use of common counsel could be
prejudicial to her or would not be likely to reduce the fees and expenses
chargeable hereunder to the Company, the Executive agrees to use her best
efforts to agree with such other officers or executives to retain common
counsel.
(l) Successors and Assigns. Except as otherwise provided herein, this
Section 5 shall be binding upon and inure to the benefit of the Executive
and his legal representatives, heirs, and assigns; provided, however, that
in the event of the Executive's death prior to payment or distribution of
all amounts, distributions, and benefits due him under this Section 5, each
such unpaid amount and distribution shall be paid in accordance with this
Section 5 to the person or persons designated by the Executive to the
company to receive such payment or distribution and in the event the
Executive has made no applicable designation, to the person or persons
designated by the Executive as the beneficiary or beneficiaries of proceeds
of life insurance payable in the event of the Executive's death under the
Company's group life insurance plan.
6. Dispute Resolution. The Executive and the Company shall not initiate
arbitration or other legal proceeding (except for any claim under Section
4) against the other party or against any directors, officers, employees,
agents or representatives of the Company or its affiliates, relating in any
way to this Agreement, to the Executive's retention by the Company, to the
termination of this Agreement or of such retention, or to any or all other
claims for employment or other discrimination under any federal, state or
local law, regulation, ordinance or executive order until 30 days after the
party against whom the claim(s) is made ("respondent") receives written
notice from the claiming party of the specific nature of any purported
claim(s) and, to the extent known or reasonably anticipated, the amount of
any purported damages attributable to each such claim(s). The Executive
and the Company further agree that if respondent submits the claiming
party's claim(s) to the CPR Institute for Dispute Resolution or
JAMS/Endispute for nonbinding mediation prior to the expiration of such 30
day period, the claiming party may not institute arbitration or other legal
proceedings against respondent until the earlier of: (a) the completion of
good-faith mediation efforts or (b) 90 days after the date on which the
respondent received written notice of the claimant's claim(s). The
mediation shall be conducted in Chicago, Illinois or such other location to
which the parties may agree. The Company agrees to pay the cost of the
mediator's services.
Subject to the foregoing, the Executive and the Company agree that any and
all claims or disputes relating to this Agreement, to the termination of
this Agreement or to such retention, to the Executive's termination of
employment or to her retention, that one party or that the Executive may
have against any directors, officers, employees, agents, or representatives
of the Company or its affiliates, including without limitation, claims for
employment or other discrimination under any federal, state, or local law,
regulation, ordinance, or executive order, shall be submitted for
arbitration and resolved by an arbitrator selected in accordance with the
rules and procedures of the CPR Institute for Dispute Resolution or
JAMS/Endispute, it being understood and agreed that no more than one
arbitrator shall be retained for any arbitration conducted hereunder. The
arbitration proceeding shall be conducted in Chicago, Illinois or such
other location to which the parties may agree. If either party pursues a
claim and such claim results in an arbitrator's decision or award, both
parties agree to accept such decision or award as final and binding, and
judgment upon the decision or award rendered by the arbitrator may be
entered in any court having jurisdiction thereof. The parties shall share
the cost of the arbitrator's services. Notwithstanding any of the
foregoing provisions of this Section, the Company may in its discretion
immediately pursue any and all available legal and equitable remedies for
the Executive's breach, threatened breach or continuing breach of any
provision of Section 4 in any court, agency, or other tribunal of competent
jurisdiction.
7. Entire Agreement, Amendment, Waiver. This Agreement constitutes the
entire agreement between the Company and the Executive with respect to the
subject matter hereof. This Agreement supersedes any prior agreements made
between the parties with respect to the subject matter hereof. The parties
may not amend this Agreement except by written instrument signed by both
parties. No waiver by either party at any time of any breach by the other
of any provision of this Agreement shall be deemed a waiver of similar or
dissimilar provision at the same time or any prior or subsequent time.
8. Assumption. This Agreement shall inure to benefit of, and be binding
upon, the successors and assignees of the Company. The Company shall
require any successor or assignee, whether direct or indirect, by purchase,
merger, consolidation or otherwise, to all or substantially all of the
business or assets of the Company, expressly and unconditionally to assume
and agree to perform the Company's obligations under this Agreement.
9. Notice. Any notice, request, or other communication required or
permitted to be given hereunder shall be made to the addresses hereinafter
set forth or to any other address designated by either of the parties
hereto by notice similarly given:
If to the Company: If to the Executive:
Senior Vice President, Human Resources
IMC Global Inc.
0000 Xxxxxxx Xxxx
Xxxxxxxxxx, XX 00000
All such notices, requests or other communications shall be sufficient if
made in writing either (i) by personal delivery to the party entitled
thereto, (ii) by registered or certified mail, return receipt requested or
(iii) by express courier service. The notice, request or other
communication shall be deemed effective upon personal delivery or upon
actual or constructive receipt by the party entitled thereto if by
registered or certified mail or express courier service; provided, however,
that a notice, request or other communication received after regular
business hours shall be deemed to be received on the next succeeding
business day of the Company.
10. Severability. The provisions of this Agreement shall be regarded as
durable, and if any provision or portion thereof is declared invalid or
unenforceable by a court of competent jurisdiction, the validity and
enforceability of the remainder and applicability thereof shall not be
affected.
11. Applicable Law. This Agreement shall at all times be governed by and
construed, interpreted and enforced in accordance with the internal laws
(as opposed to the conflict of laws provisions) of the State of Illinois.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed by
its duly authorized officer and the Executive has signed this Agreement as
of the day and year first above written.
IMC GLOBAL INC.
By:________________________ __________________________
Title: Chairman of the Board of
Directors and Chief Executive
Officer
EXHIBIT A
WAIVER AND RELEASE OF CLAIMS
In exchange for the Severance Benefits described in the attached
Executive Severance Agreement (the "Agreement"), which I acknowledge I
would not otherwise be entitled to receive, I freely and voluntarily
agree to this WAIVER AND RELEASE OF CLAIMS ("WAIVER"):
1. My employment with IMC Global Inc. will terminate effective
_______________________.
2. I acknowledge that the Severance Benefits described in the
attached Agreement are the sole payments to which I am entitled and
that I am not entitled to any additional severance payments.
3. I, and anyone claiming through me, hereby waive and release any
and all claims that I may have ever had or that I may now have against
IMC Global Inc., its parents, divisions, partnerships, affiliates,
subsidiaries, and other related entities and their successors and
assigns, and past, present and future officers, directors, employees,
agents and attorneys of each of them in their individual or official
capacity (hereinafter collectively referred to as "Released Parties").
Among the claims that I am waiving are claims relating to my employment
or termination of employment, including, but not limited to, claims of
discrimination in employment brought under the Age Discrimination in
Employment Act, Title VII of the Civil Rights Act of 1964, the
Americans With Disabilities Act or other federal, state or local
employment discrimination, employment, wage laws, ordinances or
regulations or any common law or statutory claims of wrongful discharge
or breach of contract or any other common law or statutory claims;
whether for damages, lost wages or for any other relief or remedy.
4. I understand and agree that this WAIVER will be binding on me and
my heirs, administrators and assigns. I acknowledge that I have not
assigned any claims or filed or initiated any legal proceedings against
any of the Released Parties.
5. Except as may be required by law, I agree that I will not disclose
the existence or terms of this WAIVER to anyone except my accountant,
attorney or spouse, each of whom shall also be bound by this
confidentiality provision.
6. I understand that I have twenty-one (21) days to consider whether
to sign this WAIVER and return it to B. Xxxxxxx Xxxxxxxxx, Senior Vice
President, Human Resources of IMC Global Inc. IMC Global Inc. hereby
advises me of my right to consult with an attorney before signing the
WAIVER and I acknowledge that I have had an opportunity to consult with
an attorney and have either held such consultation or have determined
not to consult with an attorney.
7. I understand that I may revoke my acceptance of this WAIVER by
delivering notice of my revocation to B. Xxxxxxx Xxxxxxxxx within seven
(7) days of the day I sign the WAIVER. If I do not revoke my
acceptance of this WAIVER within seven days of the day I sign it, it
will be legally binding and enforceable.
IMC GLOBAL INC. AGREED AND ACCEPTED:
By: __________________________ ___________________________
Title: ________________________ ___________________________
Print Name
Date:_________________________ Date:_______________________
