EXHIBIT 10.20
[GRAPHIC OMITTED]
Xxxxx X. Xxxxx
Vice President, Human Resources and Communications
Ashland Inc.
00 X. XxxxxXxxxxx Xxxx.
X.X. Xxx 000
Xxxxxxxxx, XX 00000-0000
Tel: 000 000-0000, Fax: 000 000-0000
October 26, 2006
Xxxx X. Xxxxxxxxx
0000 Xxxxx Xxxxxxx
Xxxxxxxxxx, XX 00000
Dear Xxxx:
This letter ("Letter Agreement") is intended to set forth the
understanding between you and Ashland Inc. ("Ashland"), regarding your
continued employment with, and future severance from, Ashland. This letter
supercedes and replaces any and all prior agreements between you and
Ashland, including your Executive Employment Agreement, concerning the
terms and conditions under which your separation from employment will
occur.
You and Ashland agree that, except as otherwise provided below,
effective October 16, 2006 you will no longer serve as Senior Vice
President of Ashland Inc. and President & Chief Operating Officer of the
chemical businesses. However your active employment will continue through
your Release Date, which will occur on the earlier of i) the date you elect
to terminate your active employment in order to accept employment outside
Ashland; or ii) March 31, 2007. You and Ashland agree that it is intended
that you will perform more than insignificant services as an employee of
Ashland until your Release Date.
Ashland agrees that during the remaining term of your active
employment, your base compensation will remain unchanged, and you will
continue to be eligible to participate in all compensation and benefit
programs offered to regular, full-time employees within your salary band;
provided that you will not be a participant in the FY 2007 Incentive
Compensation Plan or the 2007-2009 Long Term Incentive Plan, and you will
not receive a grant of Stock Appreciation Rights during the remainder of
calendar year 2006 or at any time thereafter. Your unvested restricted
stock, stock options and/or stock appreciation rights previously granted to
you by Ashland will continue to vest during this period.
On your Release Date, and subject to the terms of this Letter
Agreement, all unvested shares of restricted stock, stock options and stock
appreciation rights will become fully vested, and your options and/or stock
appreciation rights will thereafter be exercisable for their remaining
terms. Notwithstanding the preceding sentence, in the event and to the
extent the acceleration of any unvested shares of restricted stock, stock
options or stock appreciation rights
Xxxx X. Xxxxxxxxx
October 26, 2006
Page 2 of 4
triggers the application of Section 409A of the Internal Revenue Code, the
vesting of such restricted stock, stock options or stock appreciation
rights will be delayed to the earliest date necessary to avoid the
application of Section 409A. Your employment will terminate at the close of
business on your Release Date, and you will then be eligible to retire on
the first day of the month following your Release Date.
Subject to the terms of this Letter Agreement, following your Release
Date Ashland will also offer to you a Separation Agreement and General
Release (the "Separation Agreement") which will provide that six months
after your Release Date, Ashland will make a lump sum severance payment to
you equal to 24 months of base pay, using your rate of base pay in effect
on your Release Date; plus interest calculated over the six-month period
between your Release Date and the date of this payment, at a rate equal to
Ashland's average three-month money market rate, compounded quarterly; and
less all applicable tax withholdings. In addition, you will also be
eligible to receive executive level outplacement services during the
12-month period following your Release Date.
You understand and agree that the Separation Agreement offered to you
will contain a general release of any and all claims you may have against
Ashland, and a two-year non-competition agreement.
You further understand and agree that if, following your Release Date,
you refuse to sign the Separation Agreement within the time period provided
therein, your employment will be deemed to have terminated on your Release
Date, and you will be entitled only to those benefits ordinarily available
to employees in payroll classifications similar to the one you are in at
the time your employment terminates. Without limiting the generality of the
preceding sentence, you understand you will not be eligible for the lump
sum severance payment or the executive level outplacement services
discussed above.
In order to facilitate and encourage your efforts to obtain future
employment, Ashland agrees that in the event you secure other employment
prior to March 31, 2007, you may discontinue your employment with Ashland
upon providing me with at least 10-days advance written notice of your
intent to do so. In such case you will remain eligible to receive the
accelerated vesting of restricted stock, stock options and/or stock
appreciation rights on your Release Date, and will be offered the
Separation Agreement provided for above. In addition, Ashland will increase
the amount of the lump sum severance payment offered to you in the
Separation Agreement by an amount equal to the remaining base compensation
you would have received under this Letter Agreement in the event your
employment had continued through March 31, 2007, less all applicable tax
withholdings.
Xxxx X. Xxxxxxxxx
October 26, 2006
Page 3 of 4
In addition from the date of this Agreement forward, you agree that
you will not disparage Ashland or its employees at any time, and Ashland
agrees that it will not disparage you at any time, and that, if any inquiry
is made concerning your employment, no negative reference of any kind will
be made.
However, Ashland will be relieved of any further obligations under
this Letter Agreement, and of any obligation to offer or complete the
Separation Agreement if any of the following should occur:
(1) you elect to terminate your employment with Ashland prior to March
31, 2007 without providing at least 10-days written notice of your
intent to do so;
(2) Ashland terminates your employment for cause prior to your Release
Date; For the purposes of this letter, termination for cause will
arise if you: (a) substantially fail to perform your duties with
Ashland, unless such failure is due to your incapacity as a result of
physical or mental illness; or (b) you engage in willful misconduct or
gross negligence in performing your duties.
(3) you are disabled prior to your Release Date, and you become
eligible to receive payments under Ashland's long term disability plan
at any time thereafter; or
(4) in the event of your death prior to your Release Date. Provided,
however, that Ashland will not be relieved of any obligations under
its employee benefits plans, including the SERP, which arise due to
your death.
You understand and agree that in exchange for your promises and the
releases contained herein, you are receiving benefits to which you are not
otherwise entitled, and that said benefits are just and equitable
compensation for your promises and releases. You understand and agree that
this Letter Agreement does not constitute discrimination on the basis of
your age, and by signing this Letter Agreement you release any and all
claims you may have against Ashland Inc., its owners, stockholders,
predecessors, successors, assigns, agents, directors, officers, employees,
representatives, attorneys, divisions, subsidiaries, affiliates, and all
persons acting by, through, under, or in concert with any of them
(collectively "Releasees"), jointly and individually, from any and all
liability arising from the formation, terms and/or conditions of this
Letter Agreement relating to discrimination on the basis of age, including
claims under
Xxxx X. Xxxxxxxxx
October 26, 2006
Page 4 of 4
the Age Discrimination in Employment Act (the "ADEA"), which is located at
00 Xxxxxx Xxxxxx Code, Sections 621 through 634.
You understand and agree that you are advised to consult with an
attorney prior to signing this Letter Agreement. You further agree that you
have been given at least 21 days in which to consider whether to sign this
Letter Agreement, and an additional seven (7) days after the date on which
you sign this Letter Agreement in which to revoke this Letter Agreement.
Revocation, to be effective, must be in writing and delivered to me at
the following address: Xxxxx Xxxxx, Vice President Human Resources, Ashland
Inc., 00 X. XxxxxXxxxxx Xxxxxxxxx, Xxxxxxxxx, Xxxxxxxx 00000, either by
hand or mail within a seven (7) day period following your execution of this
General Release. You understand and agree that if delivered by mail, your
revocation must be:
1. Postmarked within the seven (7) day period;
2. Properly addressed as noted above; and
3. Sent by Certified Mail, Return Receipt Requested.
To evidence your acceptance of the foregoing, please sign and date
each original of this Letter Agreement in the space provided for your
signature, and return one original to me on or before November 17, 2006.
Should you have any questions, please feel free to contact me.
Sincerely yours,
/s/ Xxxxx X. Xxxxx
------------------------
Xxxxx X. Xxxxx
Agreed to and accepted
this 3rd day of November, 2006.
/s/ Xxxx X. Xxxxxxxxx
----------------------------
Xxxx X. Xxxxxxxxx
cc: Xxxxx X. Xxxxxxx
