EXHIBIT 10.82
EXECUTIVE SEVERANCE AGREEMENT
This Executive Severance Agreement (the "Agreement") is dated as of the
19th day of March 1999 between J. Xxxxxxxx Xxxxx (the "Executive") and
IMC Global Inc., a Delaware corporation (the "Company").
WHEREAS, the Company desires to retain the Executive as its Senior Vice
President and Chief Financial Officer 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 his 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
his 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 his 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
his intent to terminate his 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 his 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 extensions 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 his
position with or without reasonable
accommodation or (ii) the Executive
terminates his 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 his right to continue his 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 him, the remaining amounts due to
him 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 his 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 his sole benefits upon
termination.
4. Exclusivity of Services and Confidential/ Proprietary
Information.
(a) Executive acknowledges that during his employment
with the Company he 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 he acknowledges to be reasonably designed to
protect the Company's legitimate business
interests without unnecessarily or unreasonably
restricting his 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, he 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, he 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, he will
not induce or persuade or attempt to
induce or persuade any employee or agent
of the Company to terminate his 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 he 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 his
employment he will immediately surrender and
return to the Company all records and other
documents obtained by him, entrusted to him, or
otherwise in his possession or control during the
course of his 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 his 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 he deems
unreasonable in the light of his personal
circumstances.
(e) Compensation and Benefits. During the Employment
Term, the Executive shall receive the following
compensation and benefits:
1. He shall receive an annual base salary which
is not less than his 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. He shall be eligible to participate on a
reasonable basis, and to continue his
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 his 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 he was participating
immediately prior to the Effective Date of
this Section 5.
3. He 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 he was entitled or in
which he participated immediately prior to
the Effective Date of this Section 5.
4. He 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 his retirement,
whether or not a qualified plan or agreement,
so that his aggregate monthly retirement
benefit from all such plans and agreements
(regardless when he 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 he 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 his duties with the
Company (other than any failure due to
physical or mental incapacity) after a demand
for substantial performance is delivered to
him by the Board of Directors which
specifically identifies the manner in which
the Board believes he has not substantially
performed his 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 him not in good faith and without
reasonable belief that his 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
his position, authorities or duties, a
reduction in his total compensation or
benefits, a relocation that he deems
unreasonable in light of his personal
circumstances, or other action by or request
of the Company in respect of his position,
authority or responsibility that he
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 him 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 his 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 his 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 his position, he is
unable to exercise the authorities and
responsibility attached to his 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 his
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. His Base Salary and all other benefits due
him as if he 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 his 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 his
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, he will
not divulge or appropriate to his 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 his 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 his 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 1 and 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
he 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 his 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 his 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
his 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 him hereunder, and the Executive has acted in
good faith to perform his obligations under this
Section 5, the Company irrevocably authorizes the
Executive from time to time to retain counsel of
his choice at the expense of the Company to
represent him in connection with the protection
and enforcement of his rights hereunder,
including without limitation representation in
connection with termination of his 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 his sole judgment use of common counsel
could be prejudicial to him or would not be
likely to reduce the fees and expenses chargeable
hereunder to the Company, the Executive agrees to
use his 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 his 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 J. Xxxxxxxx Xxxxx
IMC Global Inc. 00 X. Xxxxxx Xx.,
0000 Xxxxxxx Xxxx #0000
Xxxxxxxxxx, XX 00000 Xxxxxxx, 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. J. XXXXXXXX XXXXX
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:
------------------------- -----------------------------
