EXHIBIT 10.9
AGREEMENT
WHEREAS, AMCOL International Corporation (the "Company") considers it
essential and in the best interests of the Company and its shareholders to
xxxxxx the continued employment of its key management personnel;
WHEREAS, Xxxxx Xxxx ("Employee") is considered a key management employee,
currently serving as Vice President of the Company; and
WHEREAS, the Company desires to assure the future continuity of Employee's
services in the event of any actual or threatened "Change in Control" (as
defined in Section 6 below) of the Company.
IT IS THEREFORE AGREED AS FOLLOWS:
1. Effect of Agreement. This Agreement shall be effective and binding
immediately upon its execution. However, except as specifically provided herein,
this Agreement shall not alter materially Employee's duties and obligations to
the Company and the remunera tion and benefits which Employee may reasonably
expect to receive from the Company in the absence of a Change in Control.
2. Employment On and After Change in Control. Provided that the employee is
an employee of the Company immediately prior to a Change in Control, the Company
shall employ Employee, and Employee shall accept such employment, effective upon
such Change in Control for a period of twenty-four (24) months after said Change
in Control subject to the terms and conditions stated herein.
3. Duties After Change in Control. Employee agrees that during the term of
his employment with the Company after a Change in Control, he shall perform the
duties described in Section 12 below and such other duties for the Company and
its subsidiaries consistent with his experience and training as the Board of
Directors of the Company (the "Board") or the Board's representatives shall
determine from time to time, which duties shall be at least substantially equal
in status, dignity and character to his duties at the date hereof. He shall also
have the title of Vice President. Employee further agrees to devote his entire
working time and attention to the business of the Company and its subsidiaries
and use his best efforts to promote such business.
4. Compensation Prior to a Change in Control. Prior to a Change in Control
the Company agrees to pay Employee compensation for his services in an amount,
and to provide him with life insurance, disability, health and other benefits,
as set by the Company from time to time. For the purpose of this Section,
compensation does not include any bonus or other incentive compensation plan or
stock purchase plan, which may vary from year to year at the discretion of the
Company.
5. Termination of Employment Prior to a Change of Control. Employee shall
be entitled to terminate his employment prior to a Change in Control at any time
upon sixty (60) days' prior written notice. The Company, shall be able to
terminate Employee's employment at any time prior to a Change in Control with or
without cause upon sixty (60) days' prior written notice (or the payment of
salary in lieu thereof). This Section shall not be construed to reduce any
accrued benefits payable in connection with any termination of Employee's
employment prior to a Change in Control.
Nothing expressed or implied in this Agreement shall create any right or
duty on the part of the Company or Employee to have Employee remain in the
employment of the Company prior to a Change in Control.
6. Termination of Employment On or After Change in Control.
(a) For purposes of this Agreement the term "Change in Control" means
the change in the legal or beneficial ownership of fifty-one
percent (51%) of the shares of the Company's common stock within
a six-month period other than by death or operation of law, or
the sale of ninety percent (90%) or more of the Company's assets
within a six-month period.
(b) Employee's employment on and after a Change in Control may be
terminated with just cause by the Company at any time upon not
less than ten (10) days' prior written notice. Prior to
termination for just cause on and after a Change in Control, the
Board of Directors shall by majority vote have declared that
Employee's termination is for just cause specifically stating the
basis for such determination. In the event such a termination
occurs, the provisions of Sections 9(a) and 12 below shall apply.
Employee's employment may be terminated on or after a Change
in Control without just cause pursuant to the constructive
termination procedures described in the next paragraph or by the
Company giving Employee not less than thirty (30) days' prior
written notice. In the event Employee's employment is terminated
pursuant to the preceding sentence:
(i) the provisions of Section 9(b) below shall apply; and
(ii) although Employee's employment term shall be deemed
terminated at the end of such notice period (or, in the case
of a constructive termination described in the next
paragraph, as of the date Employee notifies the Company
of such termination), such termination shall in no way
affect the term of this Agreement or Employee's duties and
obligations under Section 12 below.
For purposes of this Section 6(b), Employee shall be
considered as
having been terminated by the Company on or after a
Change in Control for other than just cause provided that he has
notified the Company of any of the following within ten (10) days
of the occurrence thereof:
(i) the assignment to Employee of any duties of substantially
lesser status, dignity and character than the duties as a
Vice President of the Company immediately prior to the
effective date of the Change in Control;
(ii) a post-Change in Control reduction by the Company in
Employee's annual base salary or bonus or incentive plan (as
in effect immediately prior to the effective date of the
Change in Control); (iii)relocation of Employee's office to
a location which is more than 35 miles from the location in
which Employee principally works for the Company immediately
prior to the effective date of the Change in Control; the
relocation of the appropriate principal executive office of
the Company or the Company's operating division or
subsidiary for which Employee performed the majority of his
services for the Company during the year prior to the
effective date of the Change in Control to a location which
is more than 35 miles from the location of such office
immediately prior to such date; or his being required by the
Company in order to perform duties of substantially equal
status, dignity and character to those duties he performed
immediately prior to the effective date of the Change in
Control to travel on the Company's business to a
substantially greater extent than is consistent with his
business travel obligations as of such date; or
(iv) the failure of the Company to continue to provide Employee
with benefits substantially equivalent to those enjoyed by
him under any of the Company's life insurance, medical,
health and accident or disability plans in which he was
participating immediately prior to the effective date of the
Change in Control, the taking of any action by the Company
which would directly or indirectly materially reduce any of
such benefits or deprive him of any material fringe benefit
enjoyed by him immediately prior to effective date of the
Change in Control, or the failure of the Company to provide
him with at least the number of paid vacation days to which
he is entitled on the basis of years of service under the
Company's normal vacation policy in effect immediately prior
to the effective date of the Change in Control.
(c) In the event Employee's employment is terminated on or after a
Change in Control in any manner not described in Section 6(b)
above:
(i) the provisions of Section 9(b) shall not apply and Employee
shall instead receive the sums and benefits described in
Section 9(a); and
(ii) such termination shall in no way affect the term of this
Agreement or Employee's duties or obligations under Section
12 below.
(d) Any termination of employment of Employee following the
commencement of any discussions by a shareholder or group of
shareholders owning legally or beneficially more than 20% of the
common stock or an officially designated representative of the
Board of Directors with a third party that results within 180
days in a Change in Control shall (unless such termination is for
cause or wholly unrelated to such discussions) be deemed to be a
termination of Employee on and after a Change in Control for
purposes of this Agreement.
7. Notice of Termination. Any termination by the Company or assertion of
termination by Employee shall be communicated by written notice of termination
to the other party at the following address:
AMCOL International Corporation Xx. Xxxxx Xxxx
One North Arlington AMCOL International Corporation
0000 Xxxx Xxxxx Xxxxx Xxx Xxxxx Xxxxxxxxx
Xxxxxxxxx Xxxxxxx, XX 00000 0000 Xxxx Xxxxx Xxxxx
Attn: Chairman of the Board Xxxxxxxxx Xxxxxxx, XX 00000
8. Disability. If as a result of Employee's incapacity due to physical or
mental illness, he shall have been absent from his duties with the Company for
one hundred eighty (180) days within any twelve-(12)-consecutive-month period
and within thirty (30) days after written notice of the Company's intention to
terminate his employment is given, Employee shall not have returned to the
performance of his duties with the Company substantially on a full-time basis,
the Company may terminate his employment for disability. This shall not
constitute a termination for the purposes of obtaining benefits pursuant to
Section 9.
9. Benefits Upon Termination And Leave Of Employment On or After Change in
the Control.
(a) If Employee is terminated for just cause on or after a
Change in Control, he shall only receive the accrued
sums and benefits payable to him through the date he is
terminated; the provisions of Section 9(b) below shall
not be applicable in such case and Employee shall not
receive (or shall cease receiving) the payments and
benefits described in Section 9(b).
(b) Subject to Employee's compliance with the provisions of Section
12(a) below, if Employee is terminated during the twenty-four
(24) month period beginning on and continuing after a Change in
Control other than for just cause (either at the discretion of
the Company's management or constructively by the operation of
Section 6), he shall
receive the following payments and benefits in lieu of any other
sums or benefits otherwise payable to him by the Company:
(i) all then accrued pay, benefits, executive compensation and
fringe benefits, including (but not limited to) pro rata
bonus and incentive plan earnings;
(ii) medical, health and disability benefits which are
substantially similar to the benefits the Company is
providing him as of the date of his employment is terminated
for a period of twenty-four (24) months thereafter; and
(iii)one dollar less than two times his base period
compensation.
The foregoing payments and benefits shall be deemed
compensation payable for the duties to be performed by Employee
pursuant to Section 12 below. For purposes of this Agreement, (A)
Employee's "base period compensation" is the average annual
"compensation" (as defined below) which was includable in his
gross income for his base period (i.e., his most recent five
taxable years ending before the date of the Change in Control);
and (B) if Employee's base period includes a short taxable year
or less than all of a taxable year, compensation for such short
or incomplete taxable year shall be annualized before determining
his average annual compensation for the base period. (In
annualizing compensation, the frequency with which payments are
expected to be made over an annual period shall be taken into
account. Thus, any amount of compensation for such a short or
incomplete taxable year that represents a payment that would not
be made more than once per year shall not be annualized). The sum
payable to Employee pursuant to Section 9(b)(iii) shall in any
and all cases be reduced by any compensation which Employee
receives, excluding stock option or other stock incentive bonus
plan compensation from the date of the Change in Control until
the termination date. For purposes of Section 9(iii) and the
definitions pertaining to said Section, Employee's "compensation"
is the compensation which was payable to him by the Company or a
related entity determined without regard to the following
Sections of the Internal Revenue Code of 1986, as amended (the
"Code"): 125 (cafeteria plans), 402(a)(8) (cash or deferred
arrangements), 402(h)(1)(B) (elective contributions to simplified
employee pensions), and, in the case of employer contributions
made pursuant to a salary reduction agreement, 403(b) (tax
sheltered annuities).
Except for the benefits described in Section 9(b)(ii) above,
the sums due pursuant to this Section 9(b) shall be paid in up to
two (2) annual installments commencing thirty (30) days after the
sums become due. All sums due shall be subject to appropriate
withholding and statutory requirements. Employee shall not be
required to mitigate the amount of any payment provided for in
this Section 9(b) by seeking other employment or otherwise.
Notwithstanding anything stated in this Section 9(b) to the
contrary, however, the amount of any payment or benefit provided
for in this Section 9(b) shall be reduced by no more than 50% by
any compensation earned by Employee as a result of employment by
another employer and the Company shall not be required to provide
medical, health and/or disability benefits to the extent such
benefits
would duplicate benefits received by Employee in connection
with his employment with any new employer.
Notwithstanding anything stated in this Agreement to the
contrary, if the amounts which are payable and the benefits which
are provided to Employee under this Agreement, either alone or
together with other payments which Employee has a right to
receive from the Company or any of its affiliates, would
constitute a "parachute payment" (as defined in Code Section
280G), such amounts and benefits shall be reduced, as necessary,
to the largest amount as will result in no portion of said
amounts and benefits being either not deductible as a result of
Code Section 280G or subject to the excise tax imposed by Code
Section 4999. The determination of any reduction in said amounts
and benefits pursuant to the foregoing proviso shall be made by
the Company in good faith, and such determination shall be
conclusive and binding on Employee. The amounts provided to
Employee under this Agreement in connection with a Change in
Control, if any, shall be deemed allocated to such amounts and/or
benefits to be paid and/or provided as the Company's Board of
Directors in its sole discretion shall determine.
10. Special Situations. The parties recognize that under certain
circumstances a Change in Control may occur under conditions which make it
inappropriate for Employee to receive the termination benefits or protection set
forth in this Agreement. Therefore, in the event that a Change in Control occurs
for any one of the following reasons, the provisions of Sections 2, 6 and 9
shall not apply:
(a) the purchase of more than fifty percent (50%) of the stock
of the Company by an employee stock ownership plan or
similar employee benefit plan of which Employee is a
participant; or
(b) the purchase of more than fifty percent (50%) of the stock
or ninety percent (90%) of the assets of the Company by a
group of individuals or entities including Employee as a
member or participant, including but not limited to those
transactions commonly known as a leveraged or other forms of
management buy-outs.
11. Disputes. Any dispute arising under this Agreement (except Section 12)
shall be promptly submitted to arbitration under the Rules of the American
Arbitration Association. An arbitrator is to be mutually agreed upon by the
parties or upon failure of agreement, designated by the American Arbitration
Association.
12. Non-Competition, Non-Solicitation, and Confidentiality.
(a) In consideration of this Agreement and other good and
valuable consideration, Employee agrees that for so long as
he is employed by the Company and for twenty-four (24)
months thereafter he shall not own manage, operate, control,
be employed by or otherwise engage in
any competitive business. Employee's agreement pursuant
to the preceding sentence shall be in addition to any other
agreement or legal obligation he may have with or to the
Company. For purposes of the preceding sentence, a
"competitive business" is any business engaged in the
production, refinement or sale of Bentonite and/or any
business conducted by the Company, its affiliates or any
subsidiaries thereof as of the date Employee's employment is
terminated. A business which is conducted by the Company,
its affiliates or any subsidiaries which is subsequently
sold by the Company is not a competitive business as of the
date such business is sold. An "affiliate" of the Company is
any company which either controls, is controlled by or is
under common control with the Company. The phrase "any
business conducted by the Company, its affiliates or any
subsidiaries thereof" includes not only current businesses
but also any new products, product lines or use of processes
under development, consideration or investigation on the
date Employee's employment with the Company is terminated.
Employee also agrees that during the twenty-four (24)
month period described in the first sentence of this Section
12(a) he will not directly or indirectly, on behalf of
himself or any other person or entity, make a solicitation
or conduct business, with any customer or potential customer
of the Company with which he had contact while employed by
the Company, its affiliates and/or any subsidiaries thereof,
with respect to any products or services which are
competitive with any business conducted by the Company, its
affiliates or any subsidiaries thereof. For purposes of the
preceding sentence, a "customer" is any person or entity
that has purchased goods or services from the Company, its
affiliates or any subsidiaries thereof within the
twenty-four (24) month period ending on the date Employee's
employment is terminated. A "potential customer" is any
person or entity that the Company solicited for business
within twelve (12) months prior to the date Employee's
employment with the Company is terminated.
The Company and Employee recognize that his
responsibilities have included product development, sales
and marketing of bentonite clay, xxxxxx'x earth,
nanocomposites and related products to various markets
including without limitation the foundry, agricultural,
plastic and well drilling industries and establishing
contacts and business relationships on behalf of the Company
in the domestic and international markets. Employee's
contacts on behalf of the Company represent substantial
assets of the Company which are entitled to protection. In
recognition of this situation, the covenants set forth in
this Section 12 shall apply to competitive businesses and
solicitation in the United States, Australia, Japan and
those countries of Europe and Asia in which the Company, its
affiliates and subsidiaries have conducted $100,000 or more
of business during the twelve-month period ending on the
date Employee's employment with the Company terminated.
Before and forever after his termination or
resignation, Employee shall keep confidential and refrain
from utilizing or disseminating any
confidential, proprietary or trade secret information
of the Company for any purpose other than furthering the
business interests of the Company.
(b) During Employee's employment hereunder and during two
(2) years following his resignation or the termination
of his employment hereunder for any reason, Employee
will not induce or attempt to influence any present or
future employee of the Company, its affiliates or any
subsidiaries thereof to leave its employ.
13. Other Agreements. Except to the extent expressly set forth herein, this
Agreement shall not modify or lessen any benefit or compensation to which
Employee is entitled under any agreement between Employee and the Company or
under any plan maintained by the Company in which he participates or
participated. Benefits or compensation shall be payable thereunder, if at all,
according to the terms of the applicable plan(s) or agreement(s). The terms of
this Agreement shall supersede any existing agreement between Employee and the
Company executed prior to the date hereof to the extent any such Agreement is
inconsistent with the terms hereof.
14. Successors; Binding Agreement. The Company will require any successor
(whether direct or indirect by purchase, merger, consolidation or otherwise, to
all or substantially all of the business and/or assets of the Company) to
expressly assume and agree to perform this Agreement in the same manner and to
the same extent that the Company would be required to perform it if no such
succession had taken place.
This Agreement shall inure to the benefit of and be enforceable by
Employee's personal
or legal representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
15. Injunction. The remedy at law for any breach of Section 12 will be
inadequate and the Company, its affiliates and any subsidiaries thereof would
suffer continuing and irreparable injury to their business as a direct result of
any such breach. Accordingly, notwithstanding anything stated herein, if
Employee shall breach or fail to perform any term, condition or duty contained
in Section 12 hereof, then, in such event, the Company shall be entitled to
institute and prosecute proceedings in any court of competent jurisdiction,
either in law or in equity, to obtain the specific performance thereof by
Employee or to seek a temporary restraining order or injunctive relief, without
any requirement to show actual damages or post bond, to restrict Employee from
violating the provisions of Section 12; however, nothing herein shall be
construed to prevent the Company seeking such other remedy in the courts, in
case of any breach of this Agreement by Employee, as the Company may elect or
invoke. If court proceedings are instituted by the Company to enforce Section 12
hereof, and the Company is the prevailing party, the Company shall receive, in
addition to any damages awarded, reasonable attorneys' fees, court costs and
ancillary expenses.
16. Miscellaneous. This Agreement may not be modified or discharged unless
such waiver, modification or discharge is agreed to in writing and signed by
Employee and such officers of the Company as may be specifically designated by
its Board for that purpose. Except for any failure to give the ten (10) day
notice described in Section 6(b) above, the failure of either party to this
Agreement to object to any breach by the other party or the non-breaching
party's conduct or conduct forbearance shall not constitute a waiver of that
party's rights to enforce this Agreement. 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 any subsequent breach by such other party or any similar or dissimilar
provisions or condi tions at the same or any prior or subsequent time. No
agreements or representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by either party which are
not expressly set forth in this Agreement. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Illinois.
17. Severability. The parties hereto intend this Agreement to be enforced
to the maximum extent permitted by law. In the event any provision of this
Agreement is deemed to be invalid or unenforceable by any court of competent
jurisdiction, such provisions shall be deemed to be restricted in scope or
otherwise modified to the extent necessary to render the same valid and
enforceable. In the event the provisions of Section 12 cannot be modified or
restricted so as to be valid and enforceable, then the same as well as the
Company's obligation to make any payment or transfer any benefit to Employee in
connection with any termination of Employee's employment shall be deemed excised
from this Agreement, and this Agreement shall be construed and enforced as if
such provisions had originally been incorporated herein as so restricted or
modified or as if such provisions had not originally been contained herein, as
the case may be. The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement which shall remain in full force and effect.
18. Survival. The obligations of the parties under this Agreement shall
survive the term of this Agreement.
19. Term of Agreement. The term of this Agreement shall commence on April
1, 1997 and end on March 31, 2000. Provided, however, that in the event
Employee's employment is terminated while this Agreement is in force, this
Agreement shall terminate when the Company has made all payments to Employee
required by Section 9 hereof and Employee has complied with the duties and
obligations described in Section 12 hereof (all of which duties and obligations
shall specifically survive the termination of the Employee's employment). To the
extent necessary for the Company's enforcement of the provisions of Section 12
above (but only for such purpose), Employee's employment term shall be deemed to
continue through the end of the Agreement term.
Date: _______________________
Employee AMCOL International Corporation
_____________________________ By: _________________________________________
Xxxxx Xxxx
Its: ________________________________________
500232A9
