ADDENDUM “CHANGE OF CONTROL” TO EMPLOYMENT AGREEMENT
Exhibit 10.16
Final
Final
ADDENDUM “CHANGE OF CONTROL” TO EMPLOYMENT AGREEMENT
THIS ADDENDUM TO EMPLOYMENT AGREEMENT (the “Addendum”), made as of December 15, 2008,
between CALGON CARBON CORPORATION, the parent of Chemviron Carbon (together referred to herein as
the “Company”), and C.H.S. Majoor (“Employee”), presently residing in or near
Brussels, Belgium.
WITNESSETH:
WHEREAS, Employee is presently employed as Senior Vice President, Europe and Asia, of the
Company, in which capacity he has contributed materially to the Company’s success, pursuant to the
terms of an employment agreement, and an addendum thereto, each dated as of December 21, 2000,
between Employee and Chemviron Carbon (together, the “Original Agreement”), as amended by
an addendum dated January 1, 2004 with regard to change of control payments (the “Existing
Addendum”);
WHEREAS, after the execution of this Addendum, (i) the Original Agreement dated December 21,
2000 as well as its original addendum of the same date shall remain in effect, and (ii) the
Existing Addendum dated January 1, 2004 shall be replaced in its entirety by this Addendum; and
WHEREAS, the Board of Directors of the Company (the “Board”), has determined that it
is in the best interests of the Company and its stockholders to assure that the Company will have
the continued dedication of Employee, notwithstanding any possibility, threat or occurrence of a
Change of Control (as defined herein), and the Board believes it is imperative to diminish the
inevitable distraction of Employee by virtue of the personal uncertainties and risks created by a
pending or threatened Change of Control and to encourage Employee’s full attention and dedication
to the current Company in the event of any threatened or pending Change of Control, and to provide
Employee with compensation and benefits arrangements upon a Change of Control that ensure that the
compensation and benefits expectations of Employee will be satisfied and that are competitive with
those of other corporations;
NOW, THEREFORE, intending to be legally bound hereby, the parties hereto agree as follows:
1. Change of Control Payments.
(a) For all purposes of this Agreement, a “Change of Control” shall be deemed to have
occurred upon first to occur of:
(i) The acquisition by any individual, entity or group (a “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 20% or more of either (A) the then outstanding shares of common stock of
the Company (the “Outstanding Company Common Stock”) or (B) the combined voting power of
the then outstanding voting securities of the Company entitled to vote generally in the election of
directors (the “Outstanding Company Voting Securities”); provided, however,
that, for purposes of this Section 5(a), the following acquisitions shall not constitute a Change
of Control: (x) any acquisition directly from the Company, (y) any acquisition by the Company or
(z) any acquisition by any employee benefit plan (or related trust) sponsored or maintained by the
Company;
(ii) Any time at which individuals who, as of the date hereof, constitute the Board (the
“Incumbent Board”) cease for any reason to constitute at least two-thirds (2/3) of the
Board; provided, however, that any individual becoming a director subsequent
to the date hereof whose election, or nomination for election by the Company’s stockholders, was
approved by a vote of at least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the Incumbent Board,
provided, that for this purpose, the Incumbent Board shall not include any such individual
whose initial assumption of office occurs as a result of an actual or threatened election contest
with respect to the election or removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board (any individual not included
in the Incumbent Board by reason of this proviso shall be excluded permanently for purposes of
determining whether the Incumbent Board has at any time ceased for any reason to constitute at
least two-thirds (2/3) of the Board);
(iii) Consummation of a reorganization, merger, statutory share exchange or consolidation or
similar corporate transaction involving the Company or any of its subsidiaries, a sale or other
disposition of all or substantially all of the assets of the Company, or the acquisition of assets
or stock of another entity by the Company or any of its subsidiaries (each, a “Business
Combination”), in each case unless, following such Business Combination, (A) all or
substantially all of the individuals and entities that were the beneficial owners of the
Outstanding Company Common Stock and the Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more than 50% of the then
outstanding shares of common stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as the case may be, of the
corporation resulting from such Business Combination (including, without limitation, a corporation
that, as a result of such transaction, owns the Company or all or substantially all of the
Company’s assets either directly or through one or more subsidiaries) in substantially the same
proportions as their ownership immediately prior to such Business Combination of the Outstanding
Company Common Stock and the Outstanding Company Voting Securities, as the case may be, (B) no
Person (excluding any corporation resulting from such Business Combination or any employee benefit
plan (or related trust) of the Company or such corporation resulting from such Business
Combination) beneficially owns, directly or indirectly, 20% or more of, respectively, the then
outstanding shares of common stock of the corporation resulting from such Business Combination or
the combined voting power of the then outstanding voting securities of such corporation, except to
the extent that such ownership existed prior to the Business Combination, and (C) at least
two-thirds (2/3) of the members of the board of directors of the corporation resulting from such
Business Combination were members of the Incumbent Board at the time of the execution of the
initial agreement or of the action of the Board providing for such Business Combination; or
(iv) Approval by the stockholders of the Company of a complete liquidation or dissolution of
the Company.
(b) In the event of a Covered Change of Control Event (as defined below), then Employee shall
receive the following: (i) Employee shall be paid in a lump sum on the date which is the tenth day
following the date of the Covered Change of Control Event, an amount equal to the sum of: (A) two
years of Employee’s then current base compensation and (B) two times the Change of Control Bonus
Amount (as hereinafter defined); provided, however, that the Employee shall only be
provided (x) eighteen months (not two years) of base compensation under subsection 1(b)(i)(A) above
and (y) 1.5 times (not two times) the Change of Control Bonus Amount under subsection 1(b)(i)(B)
above, if the applicable Covered Change in Control Event is made under Section 1(c)(i); with
the understanding that from the amounts payable under this subsection 1(b)(i) there shall be no
deduction of or compensation whatsoever with any statutory compensation in lieu of notice in
advance which maybe due to Employee under Belgian law; and (ii) Employee shall be entitled to
exercise all stock options and stock appreciation rights previously granted to Employee by the
Company, and shall be fully vested in all restricted stock, stock units
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and similar stock-based or incentive awards (assuming “maximum” satisfaction of any applicable performance
conditions) previously granted to Employee by the Company, regardless of any deferred vesting or
deferred exercise provisions of such arrangements. As used herein “Change of Control Bonus
Amount” shall mean the greater of (x) the current “target” amount of any cash bonus or short
term cash incentive plan in effect for Employee or (y) the average of the last three annual cash
bonuses paid by Company to Employee.
(c) “Covered Change of Control Event” shall mean (i) Employee’s cessation of his
employment with the Company without Good Reason (as defined below) during the period beginning on
the first anniversary of a Change of Control and ending on the ninetieth (90th) day
following the first anniversary of the Change of Control by giving the Company written notice of
Employee’s intention to cease employment with the Company at any time within such 90-day period,
(ii) the cessation of Employee’s employment by the Company other than for cause (serious reason)
during the three-year period after a Change of Control or (iii) the cessation of Employee’s
employment by Employee with Good Reason during the three-year period after a Change of Control. As
used herein, “Good Reason” shall mean without Employee’s express written consent, the
occurrence of any one or more of the following: (i) a material diminution of Employee’s
authorities, duties, responsibilities, and status (including offices, titles, and reporting
requirements) as an employee of the Company (any such diminution occurring as a result of the
Company’s ceasing to be a publicly traded entity shall be deemed material for purposes of the
foregoing); (ii) the Company’s requiring Employee to be based at a location in excess of
thirty-five miles from the location of Employee’s principal job location or office immediately
prior to such change; (iii) a reduction in Employee’s base salary or any material reduction by the
Company of Employee’s other compensation or benefits; (iv) the failure of the Company to obtain a
satisfactory agreement from any successor to the Company to assume and agree to perform the
Company’s obligations under this Addendum, as contemplated in Section 3 herein; (v) any purported
termination by the Company of Employee’s employment that is not effected pursuant to a notice of
termination in writing which shall indicate the specific termination provision relied upon, and
shall set forth in reasonable detail the facts and circumstances claimed to provide a basis for
termination of Employee’s employment under the provision so indicated, and (vi) a material breach
of the Original Agreement or this Addendum by the Company.
2. Certain Additional Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding, in the event it shall be
determined that any economic benefit or payment or distribution by the Company to or for the
benefit of Employee, whether paid or payable or distributed or distributable pursuant to the terms
of the Agreement or otherwise (“Payment”), would be subject to the excise tax imposed by
Section 4999 of the Internal Revenue Code of 1986 (“Code”) or any interest or penalties
with respect to such excise tax (such excise tax, together with any such interest and penalties,
are hereinafter collectively referred to as the “Excise Tax”), then Employee shall be
entitled to receive an additional payment (“Gross-Up-Payment”) in an amount such that after
payment by Employee of all taxes (including any interest or penalties imposed with respect to such
taxes), including any Excise Tax imposed upon the Gross-Up Payment, Employee retains an amount of
the Gross-Up Payment equal to the Excise Tax imposed upon the Payments; provided,
however, that the Employee’s agreement to, and compliance with, the provisions of any
confidentiality or non compete provisions in favor of the Company shall constitute personal
services to be rendered on or after the date of a change in ownership or control (as those terms
are used in treasury regulations promulgated under Code Section 280G) by the Employee for purposes
of determining whether or not an Excise Tax will be incurred, and the amount of the Payments under
this Agreement that are treated as reasonable compensation for such services shall in no event be
deemed to be less than the base salary earned by Employee at the time of his or her termination.
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(b) Subject to the provisions of Section 2(c), all determinations required to be made under
this Article 2, including the amount of any Payment which shall be attributable to personal
services in accordance with the proviso to Section 2(a), whether a Gross-Up Payment is required,
the amount of such Gross-Up Payment and the assumptions to be used in arriving at such
determinations, shall be made by the Company’s regular outside independent public accounting firm,
or, if such firm will not agree to comply with the obligations imposed on it pursuant to this
Section 2(b), such other outside independent accounting firm as the Company shall designate with
Employee’s consent, which consent shall not be unreasonably withheld (the “Accounting
Firm”), which shall provide detailed supporting calculations both to the Company and Employee
within fifteen (15) business days of the effective date of termination, if applicable, or such
earlier time as is requested by the Company. In the event that the Accounting Firm has at any time
served as accountant or auditor for the individual, entity or group affecting the Change of
Control, Employee may appoint another nationally recognized accounting firm to make the
determinations required hereunder (which accounting firm shall then be referred to as the
Accounting Firm hereunder). The initial Gross-Up Payment, if any, as determined pursuant to this
Section 2(b), shall be paid to Employee on the date which is the first day following the six (6)
month anniversary of the date of termination, at the same time as the payment of the separation
pay. If the Accounting Firm determines that no Excise Tax is payable by Employee, it shall furnish
Employee with an opinion that he or she has substantial authority not to report any Excise Tax on
his or her federal income tax return. Any determination by the Accounting Firm shall be binding
upon the Company and Employee. 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 which will not have been made by the Company should have been made
(“Underpayment”), consistent with the calculations required to be made hereunder. In the
event that the Company exhausts its remedies pursuant to Section 2(c) and Employee thereafter is
required to make a payment of any Excise Tax, the Accounting Firm shall determine the amount of the
Underpayment that has occurred and any such Underpayment shall be immediately paid by the Company
to or for the benefit of Employee. Neither the Company nor Employee shall have any right to
request a redetermination of the amount of any Underpayment by the Accounting Firm. All fees and
expenses of the Accounting Firm incurred pursuant to this Section 2(b) shall be paid by the
Company.
(c) Employee shall notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Company of the Gross-Up Payment. Such
notification shall be given as soon as practicable but no later than thirty (30) business days
after the later of either (i) the date Employee has actual knowledge of such claim, or (ii) thirty
(30) business days after Employee receives from the Internal Revenue Service either a written
report proposing imposition of the Excise Tax or a statutory notice of deficiency with respect
thereto, and shall apprise the Company of the nature of such claim and the date on which such claim
is requested to be paid. Employee shall not pay such claim prior to the expiration of the
thirty-day period following the date on which he gives such notice to the Company (or such shorter
period ending on the date that any payment of taxes with respect to such claim is due). If the
Company notifies Employee in writing prior to the expiration of such period that it desires to
contest such claim, Employee shall: (i) give the Company any information reasonably requested by
the Company relating to such claim, (ii) take such action in connection with contesting such claim
as the Company shall reasonably request in writing from time to time, including, without
limitation, accepting legal representation with respect to such claim by an attorney reasonably
selected by the Company, (iii) cooperate with the Company in good faith in order effectively to
contest such claim, (iv) permit the Company to participate in any proceedings relating to such
claim; provided, however, that the Company 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 Employee harmless, on an after-tax basis, for any Excise Tax or income
tax, including interest and penalties with respect thereto, imposed as a result of such
representation and payment of costs and expenses. Without limitation of the foregoing provisions
of this
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Section 2(c), the Company shall control all proceedings taken in connection with such contest
and, at its sole option, may pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in respect of such claim and may, at its sole
option, either direct Employee to request or accede to a request for an extension of the statute of
limitations with respect only to the tax claimed, or pay the tax claimed and xxx for a refund or
contest the claim in any permissible manner, and Employee 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 the Company shall determine; provided, however, that if
the Company directs Employee to pay such claim and xxx for a refund, the Company shall advance the
amount of such payment to Employee, on an interest-free basis and shall indemnify and hold Employee
harmless, on an after-tax basis, from any Excise Tax or income tax, including interest or penalties
with respect thereto, imposed with respect to such advance or with respect to any imputed income
with respect to such advance; and further provided that any extension of the
statute of limitations requested or acceded to by Employee at the Company’s request and relating to
payment of taxes for the taxable year of Employee with respect to which such contested amount is
claimed to be due is limited solely to such contested amount. Furthermore, the Company’s control
of the contest shall be limited to issues with respect to which a Gross-Up Payment would be payable
hereunder and Employee 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.
(d) If, after the receipt by Employee of an amount advanced by the Company pursuant to Article
2, Employee becomes entitled to receive any refund with respect to such claim, Employee shall
(subject to the Company’s complying with the requirements of Article 2(c)) immediately thereafter
pay to the Company the amount of such refund (together with any interest paid or credited thereon
after taxes applicable thereto). If, after the receipt by Employee of an amount advanced by the
Company pursuant to Section 2(c), a determination is made that Employee shall not be entitled to
any refund with respect to such claim and the Company does not notify Employee in writing of its
intent to contest such denial of refund prior to the expiration of thirty (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.
(e) In the event that any state or municipality or subdivision thereof in the United States
shall subject any Payment to any special tax which shall be in addition to the generally applicable
income tax imposed by such state, municipality, or subdivision with respect to receipt of such
Payment, the foregoing provisions of this Article 2 shall apply, mutatis mutandis, with respect to
such special tax.
(f) In the event that Employee is ever subject in Belgium to a tax which is substantially
similar to the above described Excise Tax (that is, in the nature of a tax to be paid in addition
to any normal taxes, which additional tax is being imposed solely due to what is deemed to be an
excessive amount of Payments being made to Employee in connection with a Covered Change in Control
Event), then Employee shall be entitled to receive a Gross-Up Payment with respect thereto in
accordance with the terms of this Section 2.
3. Amendments, waivers, etc.
No amendment of any provision of this Addendum, and no postponement or waiver of any such
provision or of any default, misrepresentation, or breach of warranty or covenant hereunder,
whether intentional or not, shall be valid unless such amendment, postponement or waiver is in
writing and signed by or on behalf of the Company and Employee. No such amendment, postponement or
waiver shall be deemed to extend to any prior or subsequent matter, whether or not similar to the
subject matter of such amendment, postponement or waiver.
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No failure or delay on the part of the Company or Employee in exercising any right, power or
privilege under this Addendum shall operate as a waiver thereof nor shall any single or partial
exercise of any right, power or privilege hereunder preclude any other or further exercise thereof
or the exercise of any other right, power or privilege.
4. Assignment.
The rights and duties of the Company under this Addendum may be transferred to, and shall be
binding upon, any person or company which acquires or is a successor to the Company, its business
or a significant portion of the assets of the Company by merger, purchase or otherwise, and the
Company shall require any such acquirer or successor by Addendum in form and substance reasonably
satisfactory to Employee, expressly to assume and agree to perform this Addendum in the same manner
and to the same extent that the Company, as the case may be, would be required to perform if no
such acquisition or succession had taken place. Regardless of whether such Addendum is executed,
this Addendum shall be binding upon any acquirer or successor in accordance with the operation of
law and such acquirer or successor shall be deemed the “Company”, as the case may be, for purposes
of this Addendum. Except as otherwise provided in this Section 4, neither the Company nor Employee
may transfer any of their respective rights and duties hereunder except with the written consent of
the other party hereto.
5. Integration; counterparts.
This Addendum, along with the Original Agreement dated December 21, 2000 and its addendum of
the same date, constitutes the entire agreement among the parties and supersedes any prior
understandings, agreements, Addendums or representations by or among the parties, written or oral,
to the extent they relate to the subject matter hereof, and shall have the effect described in the
second recital hereto. This Addendum may be executed in one or more counterparts, each of which
shall be deemed an original but all of which together shall constitute one and the same instrument.
WITNESS the due execution hereof as of the date first above written.
| Attest: | CALGON CARBON CORPORATION | |||||||||
| /s/ Xxxx X. Xxxxxx | By: | /s/ Xxxx X. Xxxxxx | ||||||||
| Title: | President & CEO | |||||||||
Witness: |
||||||||||
| /s/ Xxxxxxx Xxxxxxx | By: | /s/ C.H.S. Majoor | ||||||||
| Xxxxxxx Xxxxxxx | C.H.S. Majoor | |||||||||
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