1
EXHIBIT 10-T
AGREEMENT
XXXXXXX X. XXXXX
Purpose and Term of Agreement:
In anticipation of the consummation of the BetzDearborn transaction, this is to
confirm Xxxxxxx X. Xxxxx'x (VJC) agreement to remain as an employee of Hercules
Incorporated as President and Chief Operating Officer, or any other position
which may be mutually agreed upon, from July 29, 1998 through January 1, 2001.
During this term, the following conditions will apply.
Position/Title:
President and Chief Operating Officer of Hercules Incorporated and a member of
Hercules Incorporated Board of Directors.
Base Salary:
Effective August 1, 1998, his annualized base salary will be increased by
$100,000 to $550,000. At closing, his base salary will be set at no less than
75% of the highest annualized rate then in effect for the Chief Executive
Officer or co-Chief Executive Officer(s). Until this agreement expires his
annualized base salary will be increased as required to ensure that his rate is
no less than 75% of the highest annualized rate in effect for the Chief
Executive Officer or co-Chief Executive Officer(s).
Incentive Payments:
If VJC remains as an active employee of Hercules Incorporated as described above
through January 1, 2001, the following incentive payments will be provided:
A. Restricted Stock
A grant of Restricted Stock Units with a value of $2,000,000 on the
grant date and at the xxxxx xxxxx hereinafter defined. The xxxxx xxxxx
used to determine the actual number of units will be the closing price
of one share of Hercules Common Stock on August 4, 1998, as reported on
the Composite Tape for New York Stock Exchange Listed Companies and
published in the Eastern Edition of The Wall Street Journal. Such units
will accrue dividend equivalents and interest, payable at vesting.
These units will vest to you on January 1, 2001, and be payable, at
your option, in shares of Hercules Incorporated Common Stock or cash,
net of applicable taxes.
2
B. Cash
If still employed on January 1, 2001 as stipulated above, a cash award
of $1,000,000 will be earned and will be paid, net of applicable taxes.
Change of Control:
In the event of a solicited or unsolicited change of control of Hercules
Incorporated as defined in your Employment Contract dated June 29, 1995, the
provisions for payment of the following elements of this Agreement will be
applicable:
- Restricted Stock Incentive
- Cash Incentive
Where provisions may be made to provide for payment of Employment Contracts for
certain HPC individuals as a result of the Bluenose transaction, this
opportunity will not apply to you.
Pension Adjustments:
If still employed on January 1, 2001 as stipulated above, you will earn the
right to the following enhancements of pension benefit credits when you elect to
retire:
1. You shall be given credit for three additional years of
service for purposes of calculating pension benefits.
2. You shall be given credit for the number of additional years
of age for purposes of calculating pension benefits to the
extent needed to provide that you had attained age 60.
No additional credit for years of age shall be accounted for beyond the actual
attainment of age 60 if you remain an active employee of Hercules Incorporated,
but you will be eligible to earn additional years of service for purposes of
calculating pension benefits. However, under no circumstances will service
credit be applied beyond your attainment of age 65.
Mega Grant Stock Option Agreements:
1. For the PASO awards made under the LTICP on October 29, 1996,
it will be determined that all minimum vesting date(s)
requirements will be satisfied if you are still employed on
January 1, 2001.
2. For the PASO awards made under the LTICP on February 7, 1997,
it will be determined that all minimum vesting date(s)
requirements will be satisfied if you are still employed on
January 1, 2001.
The provisions for Accelerated Vesting as provided for in the Award Commitment
notices will remain applicable.
2
3
At the times when Xxxxxxx X. Xxxx receives Performance Accelerated Stock Options
(PASO's), otherwise known as Mega Grants, per the terms of his Employment
Agreement, then VJC will receive PASO's, otherwise known as Mega Grants, such
that the total PASO's, including those awarded on October 29, 1996 (300,000
shares), and February 7, 1997 (150,000 shares), are 75% of the total number of
shares granted to Xx. Xxxx. Terms and conditions for vesting will be the same as
applied for Xx. Xxxx under the conditions of the LTICP. Provision for
acceleration of vesting under special circumstances as described in this
agreement will not apply to these extra awards.
Matching Grant:
For the record, under the terms of the Matching Grant included in your
confirmation letter of February 28, 1997, the Restricted Stock Units and
Restricted Stock, with accrued dividend equivalents and interest, will vest to
you on May 1, 2000, and all other terms of the letter will apply.
At the time when Xxxxxxx X. Xxxx has the opportunity to participate in the
Hercules Matching Grant Program, VJC will have the opportunity to extend his
participation in the Program such that the multiplier for determining the
matching Restricted Stock is 75% of the multiplier in effect for Xx. Xxxx. Terms
and conditions for vesting of Restricted Stock will be the same as applied to
Xx. Xxxx under the conditions of the LTICP. Provisions for acceleration of
vesting under special circumstances as described in this agreement will not
apply to this extra grant feature.
Special Circumstances:
If because of extraordinary events VJC decides that it is in his best interests
and the best interests of HPC to resign with at least 60 days advance notice
prior to January 1, 2001, and with the agreement of the Compensation Committee
of the Board of Directors, then certain considerations will be provided:
1. At the time of the effective date of resignation you will be
paid in cash an amount equal to two (2) times the base annual
salary in effect at that time, less applicable taxes.
2. At the time of the effective date of resignation you will earn
the right to the enhancements of pension benefit credits when
you elect to retire as set forth in the Pension Adjustments
section above.
Accelerated vesting for the Mega Grants and vesting of Restricted Stock under
the Matching Grants will be determined by the terms of the Long Term Incentive
Plan, or any special action which may be authorized by the Compensation
Committee of the Board of Directors
3
4
Perquisites:
In determining the perquisites which will be provided through January 1, 2001,
you will have the option to elect whatever benefits you choose, as would be
reasonably made available to a senior HPC executive, up to a dollar value that
is 75% of the amount provided for perquisites for the Chief Executive Officer or
co-Chief Executive Officer(s). These perquisites may include such items as
automobile, country club memberships, eating club memberships, etc. but
specifically excludes the use of company-owned or leased aircraft for business
or personal travel. Any tax liabilities for perquisite payments will be
grossed-up.
Director's Charitable Award Program:
If VJC remains an active employee of Hercules Incorporated as described above
through January 1, 2001, and remains as a Director of Hercules Incorporated for
the same period, then he will become fully vested in the Program.
Company-owned Leased Aircraft:
VJC will have the authority to utilize company-owned or leased aircraft for
business travel only within the continental U.S. during a calendar year (or
pro-rata portion thereof) up to a value of $200,000. Rates for aircraft
utilization will be actual charges for leased equipment and for the calculated
effective operating rate for company-owned aircraft.
Death:
If, prior to the expiration of this agreement, VJC dies or becomes permanently
and totally disabled as determined under the provisions of the Long Term
Disability Plan, then his designated beneficiaries will receive the greater of
the base salary and pension considerations contained in the Special
Circumstances section, or the pro-rated value of the Incentive Payments and
Pension Adjustments set forth above.
For Hercules Incorporated
Reviewed and agreed: Reviewed and agreed:
/S/ R. Xxxxx Xxxxxxx /S/ Xxxxxxx X. Xxxxx
---------------------------------- ---------------------------
R. Xxxxx Xxxxxxx Xxxxxxx X. Xxxxx
Chairman and Chief Executive Officer
August 12, 1998 August 12, 1998
------------------------------------ ---------------------------
Date Date
4
