Contract
Exhibit
10.2
EXECUTIVE
CHANGE IN CONTROL AGREEMENT, dated as of November 1, 2007 (the “Effective
Date”), between XXXX CORPORATION, a Virginia corporation (“Xxxx”), and [•]
(“Executive”).
WHEREAS
Executive is a key member of Olin’s management;
WHEREAS
Olin believes that it is in its best interests, as well as those of its
stockholders, to assure the continuity of Executive for a fixed period of time
in the event of an actual or threatened change in control of Olin and whether
or
not such change in control is determined by the Board to be in the best interest
of its stockholders; and
WHEREAS
this Agreement is not intended to alter materially the compensation, benefits
or
terms of employment that Executive could reasonably expect in the absence of
a
change in control of Olin, but is intended to encourage and reward Executive’s
compliance with the wishes of the Board whatever they may be in the event that
a
change in control occurs or is threatened.
NOW,
THEREFORE, in consideration of the mutual agreements, provisions and covenants
contained herein, and intending to be legally bound hereby, the parties hereto
agree as follows:
SECTION
1. Definitions. As
used in this Agreement:
(a) “Board”
means the Board of Directors of Olin.
(b) “Cause”
means (i) the willful and continued failure of Executive to substantially
perform Executive’s duties (other than any such failure resulting from
Executive’s incapacity due to physical or mental illness or injury or any such
actual or anticipated failure after the issuance of a notice of Termination
by
Executive in respect of any event described in Section 1(e)(ii)); (ii) the
willful engaging by Executive in gross misconduct significantly and demonstrably
financially injurious to Olin; (iii) a willful breach by Executive of
Olin’s Code of Business Conduct; or (iv) willful misconduct by Executive in
the course of Executive’s employment which is a felony or fraud. No act or
failure to act on the part of Executive will be considered “willful” unless done
or omitted not in good faith and without reasonable belief that the action
or
omission was in the interests of Olin or not opposed to the interests of Olin
and unless the act or failure to act has not been cured by Executive within
14
days after written notice to Executive specifying the nature of such
violations. Notwithstanding the foregoing, Executive shall not be
deemed to have been terminated for Cause without (A) reasonable written
notice to Executive setting forth the reasons for Olin’s intention to terminate
for Cause, (B) an opportunity for Executive, together with Executive’s
counsel, to be heard before the Board and (C) delivery to Executive of a
notice of termination from the Board finding that, in the good faith opinion
of
75% of the entire membership of the Board, Executive was guilty of conduct
described above and specifying the particulars thereof in detail.
(c) “Change
in Control” means the occurrence of any one of the following
events:
(i) individuals
who, on the Effective Date, constitute the Board (the “Incumbent
Directors”) cease for any reason to constitute at least a majority of the
Board; provided that any person becoming a director subsequent to the
Effective Date, whose election or nomination for election was approved (either
by a specific vote or by approval of the proxy statement of Olin in which such
person is named as a nominee for director, without written objection to such
nomination) by a vote of at least two-thirds of the directors who were, as
of
the date of such approval, Incumbent Directors, shall be an Incumbent Director;
provided, however, that no individual initially appointed, elected
or nominated as a director of Olin as a result of an actual or threatened
election contest with respect to directors or as a result of any other actual
or
threatened solicitation of proxies or consents by or on behalf of any person
other than the Board shall be deemed to be an Incumbent Director;
(ii) any
“person” (as such term is defined in Section 3(a)(9) of the Securities
Exchange Act of 1934 (the “Exchange Act”) and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a
“beneficial owner” (as such term is defined in Rule 13d-3 under the
Exchange Act), directly or indirectly, of securities of Olin representing 20%
or
more of the combined voting power of Olin’s then outstanding securities eligible
to vote for the election of the Board (the “Olin Voting Securities”);
provided, however, that the event described in this
paragraph (ii) shall not be deemed to be a Change in Control if such event
results from any of the following: (A) the acquisition of Olin
Voting Securities by Olin or any of its subsidiaries, (B) the acquisition of
Olin Voting Securities by any employee benefit plan (or related trust)
sponsored or maintained by Olin or any of its subsidiaries, (C) the
acquisition of Olin Voting Securities by any underwriter temporarily holding
securities pursuant to an offering of such securities, (D) the acquisition
of Olin Voting Securities pursuant to a Non-Qualifying Transaction (as defined
in paragraph (iii)), or (E) the acquisition of Olin Voting Securities
by Executive or any group of persons including Executive (or any entity
controlled by Executive or any group of persons including
Executive);
(iii) the
consummation of a merger, consolidation, statutory share exchange or similar
form of corporate transaction involving (A) Olin or (B) any of its wholly owned
subsidiaries pursuant to which, in the case of this clause (B), Olin Voting
Securities are issued or issuable (any event described in the immediately
preceding clause (A) or (B), a “Reorganization”) or the sale or other
disposition of all or substantially all of the assets of Olin to an entity
that
is not an affiliate of Olin (a “Sale”), unless immediately following such
Reorganization or Sale: (1) more than 50% of the total voting power (in respect
of the election of directors, or similar officials in the case of an entity
other than a corporation) of (x) Olin (or, if Olin ceases to exist, the
entity resulting from such Reorganization), or, in the case of a Sale, the
entity which has acquired all or substantially all of the assets of Olin (in
either case, the “Surviving Entity”), or (y) if applicable, the
ultimate parent entity that directly or indirectly has beneficial ownership
of
more than 50% of the total voting power (in respect of the election of
directors, or similar officials in the case of an entity other than a
corporation) of the Surviving Entity (the “Parent Entity”), is
represented by Olin Voting Securities that were outstanding immediately prior
to
such Reorganization or Sale (or, if applicable, is represented by shares into
which such Olin Voting Securities were converted pursuant to such Reorganization
or Sale), (2) no person (other than any employee benefit plan (or related
trust) sponsored or maintained by the Surviving Entity or the Parent Entity),
is
or becomes the beneficial owner, directly or indirectly, of 20% or more of
the
total voting power (in respect of the election of directors, or similar
officials in the case of an entity other than a corporation) of the outstanding
voting securities of the Parent Entity (or, if there is no Parent Entity, the
Surviving Entity) and (3) at least a majority of the members of the board
of directors (or similar officials in the case of an entity other than a
corporation) of the Parent Entity (or, if there is no Parent Entity, the
Surviving Entity) following the consummation of the Reorganization or Sale
were,
at the time of the approval by the Board of the execution of the initial
agreement providing for such Reorganization or Sale, Incumbent Directors (any
Reorganization or Sale which satisfies all of the criteria specified in (1),
(2)
and (3) above being deemed to be a “Non-Qualifying
Transaction”);
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(iv) the
stockholders of Olin approve a plan of complete liquidation or dissolution
of
Olin.
Notwithstanding
the foregoing, if any person becomes the beneficial owner, directly or
indirectly, of 20% or more of the combined voting power of Olin Voting
Securities solely as a result of the acquisition of Olin Voting Securities
by
Olin which reduces the number of Olin Voting Securities outstanding, such
increased amount shall be deemed not to result in a Change in Control;
provided, however, that if such person subsequently becomes the
beneficial owner, directly or indirectly, of additional Olin Voting Securities
that increases the percentage of outstanding Olin Voting Securities beneficially
owned by such person, a Change in Control of Olin shall then be deemed to
occur.
(d) “Change
in Control Severance” means three times the sum of:
(i) twelve
months of Executive’s then current monthly salary (without taking into account
any reductions which may have occurred at or after the date of a Change in
Control); plus
(ii) an
amount
equal to the greater of (A) Executive’s average annual award actually paid in
cash (or, in the event that the award in respect of the calendar year
immediately prior to the year in which the date of Termination occurs has not
yet been paid, the amount of such award that would have been payable in cash
in
the year in which the date of Termination occurs had Executive not incurred
a
Termination) under Olin’s short-term annual incentive compensation plans or
programs (“ICP”) (including zero if nothing was paid or deferred but
including any portion thereof Executive has elected to defer and, for the
avoidance of doubt, excluding any portion of an annual award that Executive
does
not have a right to receive currently in cash) in respect of the three calendar
years immediately preceding the calendar year in which the date of Termination
occurs (or if Executive has not participated in ICP for such three completed
calendar years, the average of any such awards in respect of the shorter period
of years in which Executive was a participant) and (B) Executive’s then current
ICP standard annual award in respect of the year in which the date of
Termination occurs.
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Notwithstanding
the foregoing, in the event that an amount is payable to the Executive under
Section 4(a), such amount shall be treated as “executive severance” for
purposes of any Olin benefit plan that takes payments of “executive severance”
into account in determining benefits payable under such plan.
(e) “Termination”
means:
(i) Executive
is discharged by Olin, upon or following a Change in Control, other than for
Cause and other than due to Executive’s death or disability (which will be
deemed to occur if Executive becomes eligible to commence immediate receipt
of
disability benefits under the terms of Olin’s long-term disability plan);
or
(ii) Executive
terminates Executive’s employment in the event that upon or following a Change
in Control:
(A) (1)
Olin
requires Executive to relocate Executive’s principal place of employment by more
than fifty (50) miles from the location in effect immediately prior to the
Change in Control; provided, however, that an Executive whose
principal place of employment (immediately prior to the required relocation)
was
not located at Olin’s corporate headquarters (wherever located) will not have a
basis for Termination if Executive is required to relocate Executive’s principal
place of employment to the location of Olin’s then-current corporate
headquarters or (2) Olin requires Executive to travel on business to a
substantially greater extent than, and inconsistent with, Executive’s travel
requirements prior to the Change in Control (taking into account the number
and/or duration (both with respect to airtime and overall time away from home)
of such travel trips following the Change in Control as compared to a comparable
period prior to the Change in Control);
(B) Olin
reduces Executive’s base salary or fails to increase Executive’s base salary on
a basis consistent (as to frequency and amount) with Olin’s salary system for
executive officers as in effect immediately prior to the Change in
Control;
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(C) Olin
fails to continue Executive’s participation in Olin’s benefit plans (including,
without limitation, short-term and long-term cash and stock incentive
compensation) on substantially the same basis, both in terms of (1) the
amount of the benefits provided (other than due to Olin’s or a relevant
operation’s or business unit’s financial or stock price performance provided
such performance is a relevant criterion under such plan) and (2) the level
of Executive’s participation relative to other participants as exists
immediately prior to the Change in Control; provided that, with respect to
annual and long term incentive compensation plans, the basis with which the
amount of benefits and level of participation of Executive shall be compared
shall be the average benefit awarded to Executive under the relevant plan during
the three completed fiscal years immediately preceding the year in which the
date of Termination occurs;
(D) Olin
fails to substantially maintain its benefit plans as in effect immediately
prior
to the Change in Control, unless arrangements (embodied in an on-going
substitute or alternative plan) are then in effect to provide benefits that
are
substantially similar to those in effect immediately prior to the Change in
Control; or
(E) (1)
Executive is assigned any duties inconsistent in any adverse respect with
Executive’s position (including status, offices, titles and reporting lines),
authority, duties or responsibilities immediately prior to the Change in Control
or (2) Olin takes any action that results in a diminution in such position
(including status, offices, titles and reporting lines), authority, duties
or
responsibilities or in a substantial reduction in any of the resources available
to carry out any of Executive’s authorities, duties or responsibilities from
those resources available immediately prior to the Change in
Control.
Notwithstanding
anything to the contrary contained herein, Executive will not be entitled to
terminate employment and receive the payments and benefits set forth in Sections
4 and 5 as the result of the occurrence of any event specified in the foregoing
clause (ii) (each such event, a “Good Reason Event”) unless, within 90 days
following the occurrence of such event, Executive provides written notice to
Olin of the occurrence of such event, which notice sets forth the exact nature
of the event and the conduct required to cure such event. Olin will
have 30 days from the receipt of such notice within which to cure (such period,
the “Cure Period”). If, during the Cure Period, such event is
remedied, then Executive will not be permitted to terminate employment and
receive the payments and benefits set forth in Sections 4 and 5 as a result
of
such Good Reason Event. If, at the end of the Cure Period, the Good
Reason Event has not been remedied, Executive will be entitled to terminate
employment as a result of such Good Reason Event during the 45 day period that
follows the end of the Cure Period. If Executive terminates
employment during such 45 day period, so long as Executive delivered the written
notice to Olin of the occurrence of the Good Reason Event at any time prior
to
the expiration of this Agreement, for purposes of the payments, benefits and
other entitlements set forth in Sections 4 and 5 of this Agreement, the
termination of Executive’s employment pursuant thereto shall be deemed to be a
Termination before the expiration of this Agreement. If Executive
does not terminate employment during such 45 day period, Executive will not
be
permitted to terminate employment and receive the payments and benefits set
forth in Sections 4 and 5 as a result of such Good Reason Event.
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If
(x)
Executive’s employment is terminated prior to a Change in Control for reasons
that would have constituted a Termination if they had occurred upon or following
a Change in Control, (y) Executive reasonably demonstrates that such termination
of employment (or event described in clause (ii) above) occurred at the request
of a third party who had indicated an intention or taken steps reasonably
calculated to effect a Change in Control and (z) a Change in Control involving
such third party (or a party competing with such third party to effectuate
a
Change in Control) does occur, then for purposes of this Agreement, the date
immediately preceding the date of such termination of employment (or event
described in clause (ii) above) shall be treated as the date of the Change
in
Control, except that for purposes of determining the timing of payments and
benefits to Executive, the date of the actual Change in Control shall be treated
as the Executive’s date of termination of employment. In the event
that Executive’s employment terminates under the circumstances described in
clauses (x), (y) and (z) of the preceding sentence, such termination will be
considered a Termination for purposes of this Agreement, and Executive will
be
entitled to receive the payments and benefits described in Sections 4 and 5
of
this Agreement, provided that any such payments and benefits due under Section
4
or 5 shall be reduced by the payments and benefits Executive has already
received pursuant to the Executive Agreement, dated as of November 1, 2007,
between Executive and Olin (the “Executive Agreement”) in respect of Executive’s
termination of employment with Olin, and the remainder of the payments and
benefits payable pursuant to the Executive Agreement shall be
forfeited.
SECTION
2. Entire
Agreement; Prior Agreements. This Agreement (together with the
Executive Agreement) sets forth the entire understanding between Executive
and
Olin with respect to the subject matter hereof and thereof. All oral
or written agreements or representations, express or implied, with respect
to
the subject matter of this Agreement are set forth in this Agreement and the
Executive Agreement. All prior agreements, understandings and
obligations (whether written, oral, express or implied) between Executive and
Olin with respect to the subject matter hereof are terminated as of the date
hereof (including, specifically, that certain Executive Agreement, dated
November 1, 2002, between Executive and Olin) and are superseded by this
Agreement.
SECTION
3. Term;
Executive’s Duties. (a) This Agreement expires at the
close of business on January 26, 2011, provided that beginning on January 26,
2009 and on each January 26 thereafter (any such January 26 being referred
to
herein as a “Renewal Date”) the term of this Agreement shall be extended
for one additional year unless Olin has provided Executive with written notice
at least 90 days in advance of the immediately succeeding Renewal Date that
the
term of this Agreement shall not be so extended; provided,
however, that if a Change in Control has occurred prior to the date
on
which this Agreement expires, this Agreement shall not expire prior to three
years following the date of the Change in Control; provided,
further, that the expiration of this Agreement will not affect any
of
Executive’s rights resulting from a Termination prior to such expiration. In the
event of Executive’s death while employed by Olin, this Agreement shall
terminate and be of no further force or effect on the date of Executive’s
death. Executive’s death will not affect any of Executive’s rights
resulting from a Termination prior to death.
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(b) During
the period of Executive’s employment by Olin, Executive shall devote Executive’s
full time efforts during normal business hours to Olin’s business and affairs,
except during vacation periods in accordance with Olin’s vacation policy and
periods of illness or incapacity. Nothing in this Agreement will preclude
Executive from devoting reasonable periods required for service as a director
or
a member of any organization involving no conflict of interest with Olin’s
interest, provided that no additional position as director or member shall
be
accepted by Executive during the period of Executive’s employment with Olin
without its prior consent.
SECTION
4. Change
in Control Severance Payment. (a) Subject to Section
4(b), in the event of a Termination occurring before the expiration of this
Agreement, Olin will pay Executive a lump sum in an amount equal to the Change
in Control Severance. The payment of the Change in Control Severance
will be made within 10 days following the date of Termination.
(b) Notwithstanding
Section 4(a), if Executive would otherwise have been required by Olin policy
to
retire at age 65, then if the date of Executive’s sixty-fifth birthday falls
during the 36-month period following the date of Termination, the amount payable
pursuant to Section 4(a) shall be reduced to the amount equal to the product
of
(i) the Change in Control Severance, multiplied by (ii) a fraction, the
numerator of which is the number of days from the date of Termination through
and including the date of Executive’s sixty-fifth birthday and the denominator
of which is 1095.
(c) If
on the
date of Termination, Executive is eligible and is receiving payments
under any then existing disability plan of Olin or its subsidiaries and
affiliates, then Executive agrees that all payments under such disability plan
may, and will be, suspended and offset (subject to applicable law) for 36 months
(or, if earlier, until Executive attains age 65, if Executive would otherwise
have been required by Olin policy to retire at age 65) following the date of
Termination. If, after such period, Executive remains eligible to
receive disability payments, then such payments shall resume in the amounts
and
in accordance with the provisions of the applicable disability plan of Olin
or
its subsidiaries and affiliates.
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SECTION
5. Other
Benefits. (a) If Executive becomes entitled to payment
under Section 4(a) or 4(b), as applicable, then (i) Executive will be treated
as
if Executive remained employed for service purposes for 36 months following
the
date of Termination. If the date of Termination is prior to January
1, 2008, the Executive will receive 36 months of service credit under all Olin
qualified and non-qualified defined benefit pension plans for which Executive
was eligible at the time of Termination. If the date of Termination
is after December 31, 2007, the Executive will receive 36 months of retirement
contributions to all Olin qualified and non-qualified defined contribution
plans
for which Executive was eligible at the time of the Termination. Such
contributions shall be based on the amount of the Executive
Severance. Such service credits or contributions shall be applied to
Olin’s qualified pension plans to the extent permitted under then applicable
law, otherwise such credit shall be applied to Olin’s non-qualified defined
benefit or defined contribution plan, as appropriate. Payments under
such non-qualified plans shall be due at the times and in the manner payments
are due Executive under Olin’s non-qualified defined benefit and defined
contribution pension plans, it being understood that Executive shall be
permitted to receive payments from Olin’s plans (assuming Executive otherwise
qualifies to receive such payments, is permitted to do so under the applicable
plan terms and elects to do so), during the period that Executive is receiving
payments pursuant to Section 4(a)), and that Executive’s defined benefit pension
benefit will be determined based on Executive’s actual age at the time
Executive’s pension benefit commences; and (ii) for 36 months from the date of
the Termination, Executive (and Executive’s covered dependents) will continue to
enjoy coverage on the same basis as a similarly situated active employee under
all Olin medical, dental, and life insurance plans to the extent Executive
was
enjoying such coverage immediately prior to the Termination. Except
as specifically permitted by Section 409A of the Internal Revenue Code of 1986,
as amended (the “Code”), and the regulations thereunder as in effect from time
to time (collectively, hereinafter, “Section 409A”), the coverage provided to
Executive during any calendar year will not affect the coverage to be provided
to Executive in any other calendar year. Executive’s entitlement to
insurance continuation coverage under the Consolidated Omnibus Budget
Reconciliation Act of 1985 would commence at the end of the period during which
insurance coverage is provided under this Agreement without offset for coverage
provided hereunder. Executive shall accrue no vacation during the 36
months following the date of Termination but shall be entitled to payment for
accrued and unused vacation for the calendar year in which the Termination
occurs. If Executive receives the Change in Control Severance (including the
amount referred to in Section 1(d)(ii)), Executive shall not be entitled to
an ICP award for the calendar year of Termination if Termination occurs during
the first calendar quarter. Even if Executive receives the Change in
Control Severance (including the amount referred to in Section 1(d)(ii)), if
Termination occurs during or after the second calendar quarter, Executive shall
be entitled to a prorated ICP award for the calendar year of Termination which
shall be determined by multiplying Executive’s then current ICP standard annual
award by a fraction, the numerator of which is the number of weeks in the
calendar year prior to the Termination and the denominator of which is
52. Executive shall accrue no ICP award following the date of
Termination. The accrued vacation pay and ICP award, if any, shall be
paid in a lump sum when the Change in Control Severance is paid.
(b) Notwithstanding
the foregoing Section 5(a), no such service credit or insurance coverage will
be
afforded by this Agreement with respect to any period after Executive’s
sixty-fifth birthday, if Executive would otherwise have been required by Olin
policy to retire at age 65.
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(c) In
the
event of a Termination, Executive will be entitled at Olin’s expense to
outplacement counseling and associated services in accordance with Olin’s
customary practice at the time or, if more favorable to Executive, in accordance
with such practice immediately prior to the Change in Control, with respect
to
its senior executives who have been terminated other than for
Cause. It is understood that the counseling and services contemplated
by this Section 5(c) are intended to facilitate the obtaining by Executive
of
other employment following a Termination, and payments or benefits by Olin
in
lieu thereof will not be available to Executive. The outplacement
services will be provided for a period of 12 months beginning within 10 days
following the date of Termination.
(d) If
Executive becomes entitled to the payment under Section 4(a), then at the
end of the period for insurance coverage provided in accordance with Section
5(a), if Executive at such time has satisfied the eligibility requirements
to
participate in Olin’s post-retirement medical and dental plan, Executive shall
be entitled to continue in Olin’s medical and dental coverage (including
dependent coverage) on terms and conditions no less favorable to Executive
as in
effect prior to the Change in Control for Executive until Executive reaches
age
65; provided, that if Executive obtains other employment which offers medical
or
dental coverage to Executive and Executive’s dependents, Executive shall enroll
in such medical or dental coverage, as the case may be, and the corresponding
coverage provided to Executive hereunder shall be secondary coverage to the
coverage provided by Executive’s new employer so long as such employer provides
Executive with such coverage; provided further that except as specifically
permitted by Section 409A, the coverage provided to Executive during any
calendar year will not affect the coverage to be provided to Executive in any
other calendar year.
(e) If
there
is a Change in Control, Olin shall not reduce or diminish the insurance coverage
or benefits which are provided to Executive under Section 5(a) or 5(d) during
the period Executive is entitled to such coverage; provided Executive makes
the
premium payments required by active employees generally for such coverage,
if
any, under the terms and conditions of coverage applicable to
Executive.
SECTION
6. Participation
in Change in Control; Section 4999 of Internal Revenue
Code. (a) In the event that Executive participates or
agrees to participate by loan or equity investment (other than through ownership
of less than 1% of publicly traded securities of another company) in a
transaction (referred to in this Section 6(a) as an “acquisition”) which would
result in an event described in Section 1(c)(i) or (ii), Executive must promptly
disclose such participation or agreement to Olin. If Executive so participates
or agrees to participate, no payments due under this Agreement or by virtue
of
any Change in Control provisions contained in any compensation or benefit plan
of Olin will be paid to Executive until the acquiring group in which Executive
participates or agrees to participate has completed the acquisition. In the
event Executive so participates or agrees to participate and fails to disclose
Executive’s participation or agreement, Executive will not be entitled to any
payments under this Agreement or by virtue of Change in Control provisions
in
any Olin compensation or benefit plan, notwithstanding any of the terms hereof
or thereof.
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(b) (i) Anything
in this Agreement to the contrary notwithstanding and except as set forth below,
in the event it shall be determined that any Payment would be subject to the
Excise Tax, then Executive shall be entitled to receive an additional payment
(the “Gross-Up Payment”) in an amount such that, after payment by
Executive of all taxes (and any interest or penalties imposed with respect
to
such taxes), including, without limitation, any income and employment taxes
(and
any interest and penalties imposed with respect thereto) and Excise Tax imposed
upon the Gross-Up Payment, Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments. Olin’s obligation
to make Gross-Up Payments under this Section 6 shall not be conditioned
upon Executive’s termination of employment.
(ii) Subject
to the provisions of Section 6(b)(iii), all determinations required to be
made under this Section 6(b), including whether and when a Gross-Up Payment
is required, the amount of such Gross-Up Payment and the assumptions to be
utilized in arriving at such determination, shall be made by KPMG LLP or such
other nationally recognized certified public accounting firm as may be
designated by Executive (the “Accounting Firm”). The
Accounting Firm shall provide detailed supporting calculations both to Olin
and
Executive within 15 business days of the receipt of notice from Executive that
there has been a Payment or such earlier time as is requested by
Olin. The Accounting Firm shall not determine that no Excise Tax is
payable by Executive unless it delivers to Executive a written opinion that
failure to report the Excise Tax on Executive’s applicable federal income tax
return would not result in the imposition of a negligence or similar
penalty. All fees and expenses of the Accounting Firm shall be borne
solely by Olin. Any Gross-Up Payment, as determined pursuant to this
Section 6(b), shall be paid by Olin to Executive within 5 days of the
receipt of the Accounting Firm’s determination and in no event shall such date
be later than the last day of the calendar year after the calendar year in
which
the applicable Excise Tax is paid. Any determination by the
Accounting Firm shall be binding upon Olin and Executive. As a result
of the uncertainty in the application of Section 4999 of the Code at the
time of the initial determination by the Accounting Firm hereunder, it is
possible that Gross-Up Payments that will not have been made by Olin should
have
been made (the “Underpayment”), consistent with the calculations required
to be made hereunder. In the event Olin exhausts its remedies
pursuant to Section 6(b)(iii) and Executive thereafter is required to make
a payment of any Excise Tax, the Accounting Firm shall determine that amount
of
the Underpayment that has occurred and any such Underpayment shall be paid
by
Olin to or for the benefit of Executive within 5 days of receipt of the
Accounting Firm’s determination.
(iii) Executive
shall notify
Olin in writing of any claims by the Internal Revenue Service that, if
successful, would require the payment by Olin of the Gross-Up
Payment. Such notification shall be given as soon as practicable but
not later than 30 days after Executive actually receives notice in writing
of
such claim and shall apprise Olin of the nature of such claim and the date
on
which such claim is requested to be paid; provided, however, that the failure
of
Executive to notify Olin of such claim (or to provide any required information
with respect thereto) shall not affect any rights granted to Executive under
this Section 6(b) except to the extent that Olin is materially prejudiced
in the defense of such claim as a direct result of such
failure. Executive shall not pay such claim prior to the expiration
of the 30-day period following the date on which Executive gives such notice
to
Olin (or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If Olin notifies Executive in writing
prior to the expiration of such period that Olin desires to contest such claim,
Executive shall:
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(A) give
Olin
any information reasonably requested by Olin relating to such
claim;
(B) take
such
action in connection with contesting such claim as Xxxx shall reasonably request
in writing from time to time, including, without limitation, accepting legal
representation with respect to such claim by an attorney selected by Olin and
reasonably acceptable to Executive;
(C) cooperate
with Olin in good faith in order to effectively contest such claim;
and
(D) permit
Olin to participate in any proceedings relating to such claim;
provided,
however, that Olin shall bear and pay directly all costs and expenses
(including additional interest and penalties) incurred in connection with such
contest, and shall indemnify and hold Executive harmless, on an after-tax basis,
for any Excise Tax or income or employment tax (including interest and
penalties) imposed as a result of such representation and payment of costs
and
expenses. Without limitation on the foregoing provisions of this
Section 6(b)(iii), Olin shall control all proceedings taken in connection
with such contest, and, at its sole discretion, may pursue or forego any and
all
administrative appeals, proceedings, hearings and conferences with the
applicable taxing authority in respect of such claim and may, at its sole
discretion, either direct Executive to pay the tax claimed and xxx for a refund
or contest the claim in any permissible manner, and Executive agrees to
prosecute such contest to a determination before any administrative tribunal,
in
a court of initial jurisdiction and in one or more appellate courts, as Xxxx
shall determine; provided, however, that, if Olin directs
Executive to pay such claim and xxx for a refund, Olin shall advance the amount
of such payment to Executive, on an interest-free basis, and shall indemnify
and
hold Executive harmless, on an after-tax basis, from any Excise Tax or income
tax (including interest or penalties) imposed with respect to such advance
or
with respect to any imputed income in connection with such advance; and
provided, further, that any extension of the statute of
limitations relating to payment of taxes for the taxable year of Executive
with
respect to which such contested amount is claimed to be due is limited solely
to
such contested amount. Furthermore, Olin’s control of the contest
shall be limited to issues with respect to which the Gross-Up Payment would
be
payable hereunder, and Executive shall be entitled to settle or contest, as
the
case may be, any other issue raised by the Internal Revenue Service or any
other
taxing authority.
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(iv) If,
after the receipt
by Executive of an amount advanced by Olin pursuant to Section 6(b)(iii),
Executive becomes entitled to receive any refund with respect to such claim,
Executive shall (subject to Olin’s complying with the requirements of
Section 6(b)(iii)) promptly pay to Olin the amount of such refund (together
with any interest paid or credited thereon after taxes applicable
thereto). If, after the receipt by Executive of an amount advanced by
Olin pursuant to Section 6(b)(iii), a determination is made that Executive
shall
not be entitled to any refund with respect to such claim, and Olin does not
notify Executive in writing of its intent to contest such denial of refund
prior
to the expiration of 30 days after such determination, then such advance shall
be forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up Payment
required to be paid.
(v) Notwithstanding
any
other provision of this Section 6(b), Olin may, in its sole discretion,
withhold and pay over to the Internal Revenue Service or any other applicable
taxing authority, for the benefit of Executive, all or any portion of the
Gross-Up Payment, and Executive hereby consents to such
withholding.
(c) For
purposes of this Section 6:
(i) “Excise
Tax”
means the excise tax imposed by Section 4999 of the Code, together with any
interest or penalties imposed with respect to such excise tax.
(ii) “Payment”
means
any
payment or distribution in the nature of compensation (within the meaning of
Section 280G(b)(2) of the Code) to or for the benefit of Executive, whether
paid or payable pursuant to this Agreement or otherwise.
SECTION
7. Successors;
Binding Agreement. (a) Olin will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise)
to
all or substantially all of the business or assets of Olin, by agreement, in
form and substance satisfactory to Executive, expressly to assume and agree
to
perform this Agreement in the same manner and to the same extent that Olin
would
be required to perform if no such succession had taken place. Failure
of Olin to obtain such assumption and agreement prior to the effectiveness
of
any such succession will be a breach of this Agreement and entitle Executive
to
compensation from Olin in the same amount and on the same terms as Executive
would be entitled to hereunder had a Termination occurred on the succession
date. As used in this Agreement, “Olin” means Olin as defined in the
preamble to this Agreement and any successor to its business or assets which
executes and delivers the agreement provided for in this Section 7 or which
otherwise becomes bound by all the terms and provisions of this Agreement by
operation of law or otherwise.
(b) This
Agreement shall be enforceable by Executive’s personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees and
legatees.
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SECTION
8. Notices. For
the purpose of this Agreement, notices and all other communications provided
for
herein shall be in writing and shall be deemed to have been duly given when
delivered or mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed as follows:
If
to
Executive:
[•]
If
to
Olin:
Xxxx
Corporation
000
Xxxxxxxxxx Xxxxx
Xxxxx
0000
Xxxxxxx,
XX 00000-0000
Attention:
Corporate Secretary
or
to
such other address as either party may have furnished to the other in writing
in
accordance herewith, except that notices of change of address shall be effective
only upon receipt.
SECTION
9. Governing
Law. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the Commonwealth of Virginia
(without giving effect to its principles of conflicts of law).
SECTION
10. Counterparts. This
Agreement may be executed in one or more counterparts, each of which shall
be
deemed to be an original but all of which together will constitute one and
the
same Agreement.
SECTION
11. No
Mitigation. Executive will not be required to mitigate the amount
of any payment provided for in this Agreement by seeking other employment or
otherwise, nor shall any compensation received by Executive from a third party
reduce such payment except as explicitly provided in this
Agreement. Except as may otherwise be expressly provided herein,
nothing in this Agreement will be deemed to reduce or limit the rights which
Executive may have under any employee benefit plan, policy or arrangement of
Olin and its subsidiaries and affiliates. Except as expressly
provided in this Agreement and subject to Section 17(b), payments made pursuant
to this Agreement shall not be affected by any set-off, counterclaim,
recoupment, defense or other claim which Olin and its subsidiaries and
affiliates may have against Executive.
SECTION
12. Withholding
of Taxes. Olin may withhold from any benefits payable under this
Agreement all federal, state, city or other taxes as shall be required pursuant
to any law or governmental regulation or ruling.
SECTION
13. Non-assignability. This
Agreement is personal in nature and neither of the parties hereto shall, without
the consent of the other, assign or transfer this Agreement or any rights or
obligations hereunder, except as provided in Section 7 above. Without
limiting the foregoing, Executive’s right to receive payments hereunder shall
not be assignable or transferable, whether by pledge, creation of a security
interest or otherwise, other than a transfer by will or by the laws of descent
or distribution, and, in the event of any attempted assignment or transfer
by
Executive contrary to this Section 13, Olin shall have no liability to pay
any
amount so attempted to be assigned or transferred.
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SECTION
14. No
Employment Right. This Agreement shall not be deemed to confer on
Executive a right to continued employment with Olin.
SECTION
15. Disputes/Arbitration. (a) Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration at Olin’s corporate headquarters in
accordance with the rules of the American Arbitration Association then in
effect. Judgment may be entered on the arbitrator’s award in any
court having jurisdiction; provided, however, that Executive shall be entitled
to seek specific performance of Executive’s right to be paid during the pendency
of any dispute or controversy arising under or in connection with this
Agreement.
(b) Olin
shall pay all reasonable legal fees and expenses, as they become due, which
Executive may incur prior to the third anniversary of the expiration of this
Agreement to enforce this Agreement through arbitration or otherwise unless
the
arbitrator determines that Executive had no reasonable basis for Executive’s
claim. Should Olin dispute the entitlement of Executive to such fees and
expenses, the burden of proof shall be on Olin to establish that Executive
had
no reasonable basis for Executive’s claim. All reimbursable expenses
shall be reimbursed to Executive as promptly as practicable and in any event
not
later than the last day of the calendar year after the calendar year in which
the expenses are incurred, and the amount of expenses eligible for reimbursement
during any calendar year will not affect the amount of expenses eligible for
reimbursement in any other calendar year.
(c) If
any
payment which is due to Executive hereunder has not been paid within ten (10)
days of the date on which such payment was due, Executive shall be entitled
to
receive interest thereon from the due date until paid at an annual rate of
interest equal to the Prime Rate reported in the Wall Street Journal, Northeast
Edition, on the last business day of the month preceding the due date,
compounded annually.
SECTION
16. Miscellaneous. (a) Except
as specifically provided in Section 17(d), no provisions of this Agreement
may be modified, waived or discharged unless such modification, waiver or
discharge is agreed to in writing signed by Executive and Olin. No
waiver by either party hereto at any time of any breach by the other party
hereto of, or compliance with, any condition or provision of this Agreement
to
be performed by such other party shall be deemed a waiver of similar or
dissimilar provisions or conditions at the same or at any prior or subsequent
time.
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(b) The
invalidity or unenforceability of any provisions of this Agreement shall not
affect the validity or enforceability of any other provisions of this Agreement,
which shall remain in full force and effect to the fullest extent permitted
by
law.
(c) Executive
may not cumulate the benefits provided under this Agreement with any severance
or similar benefits (“Other Severance Benefits”) that Executive may be
entitled to by agreement with Olin (including, without limitation, pursuant
to
the Executive Agreement or any other employment, severance or termination
agreement, plan, arrangement or policy) or under applicable law in connection
with the termination of Executive’s employment. Subject to
Section 17(b), to the extent that Executive receives any Other Severance
Benefits, then the payments and benefits payable hereunder to Executive shall
be
reduced by a like amount. To the extent Olin is required to provide
payments or benefits to Executive under the Worker Adjustment and Retraining
Notification Act (or any state, local or foreign law relating to severance
or
dismissal benefits), the benefits payable hereunder shall be first applied
to
satisfy such obligation.
SECTION
17. Section
409A. (a) It is intended that the provisions of this
Agreement comply with Section 409A, and all provisions of this Agreement shall
be construed and interpreted in a manner consistent with the requirements for
avoiding taxes or penalties under Section 409A.
(b) Neither
Executive nor any of Executive’s creditors or beneficiaries shall have the right
to subject any deferred compensation (within the meaning of Section 409A)
payable under this Agreement or under any other plan, policy, arrangement or
agreement of or with Olin or any of its affiliates (this Agreement and such
other plans, policies, arrangements and agreements, the “Olin Plans”) to any
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance,
attachment or garnishment. Except as permitted under Section 409A,
any deferred compensation (within the meaning of Section 409A) payable to
Executive or for Executive’s benefit under any Olin Plan may not be reduced by,
or offset against, any amount owing by Executive to Olin or any of its
affiliates.
(c) If,
at the time of Executive’s separation from service (within the meaning of
Section 409A), (i) Executive shall be a specified employee (within the meaning
of Section 409A and using the identification methodology selected by Olin from
time to time) and (ii) Olin shall make a good faith determination that an amount
payable under an Olin Plan constitutes deferred compensation (within the meaning
of Section 409A) the payment of which is required to be delayed pursuant to
the
six-month delay rule set forth in Section 409A in order to avoid taxes or
penalties under Section 409A, then Olin (or its affiliate, as applicable) shall
not pay such amount on the otherwise scheduled payment date but shall instead
accumulate such amount and pay it, without interest, on the first business
day
after such six-month period.
15
(d) Notwithstanding
any provision of this Agreement or any Olin Plan to the contrary, in light
of
the uncertainty with respect to the proper application of Section 409A, Olin
reserves the right to make amendments to this Agreement and any Olin Plan as
Xxxx xxxxx necessary or desirable to avoid the imposition of taxes or penalties
under Section 409A. In any case, except as specifically provided in
Section 6(b), Executive is solely responsible and liable for the satisfaction
of
all taxes and penalties that may be imposed on Executive or for Executive’s
account in connection with any Olin Plan (including any taxes and penalties
under Section 409A), and neither Olin nor any affiliate shall have any
obligation to indemnify or otherwise hold Executive harmless from any or all
of
such taxes or penalties.
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IN
WITNESS WHEREOF, the parties have caused this Agreement to be executed and
delivered as of the day and year first above set forth.
XXXX
CORPORATION
______________________________
_________________________
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