EXHIBIT 1
EMPLOYMENT AGREEMENT
This employment agreement (the "Agreement") is hereby entered into and
effective as of January 11, 2005 (the "Effective Date"), by and between OM
Group, Inc. ("Company"), and Xxxxx X. Xxxxxx (the "Executive").
WHEREAS, the Company desires to employ the Executive as interim Chief
Executive Officer until a permanent successor is named the Board of Directors of
the Company; and
WHEREAS, the Executive desires to serve in the capacity of interim
Chief Executive Officer;
NOW THEREFORE, in consideration of the mutual covenants and agreements
set forth herein, the parties agree as hereinafter set forth:
1. EMPLOYMENT AND DUTIES
The Company agrees to employ the Executive as interim Chief Executive
Officer of the Company ("CEO") for the Term (as defined in Section 2). The
Executive accepts employment as interim CEO of the Company for the Term and
agrees to perform all duties and responsibilities consistent with such
employment. The Executive agrees that he shall devote his full time to the
business of the Company and shall not engage in any activity that would be
competitive with the business activity of the Company.
2. TERM OF EMPLOYMENT
The Executive's term of employment (the "Term") under the Agreement
shall commence on the Effective Date and shall terminate as of the earliest of:
(i) the date a permanent CEO is named by the Company and assumes the duties
thereof; (ii) the Executive's resignation, death, or disability; (iii) the date
the Executive is terminated by the Board of Directors of the Company; or (iv)
December 31, 2005.
3. COMPENSATION AND BENEFITS
For his services during the Term, the Executive shall receive
compensation consisting of a base salary ("Base Salary") to be determined and
paid in the manner set forth below as well as the benefits and perquisites
described below.
(a) BASE SALARY. The Base Salary of the Executive
shall be determined by multiplying $900,000 by a fraction the
numerator of which shall be the actual number of calendar days
of the Term and the denominator of which shall be 365;
provided, however, that in no event shall such Base Salary be
less than $125,000. Subject to the provisions of Sections
3(a)(ii) and (iii), the Base Salary of the Executive shall be
payable as follows: (i) during 2005, the Executive shall
receive $125,000 which shall be paid in installments pursuant
to
the Company's usual payroll practices; (ii) in January 2006,
the Executive shall receive one-third of his remaining Base
Salary (Base Salary minus $125,000); (iii) in January 2007,
the Executive shall receive one-half of his remaining Base
Salary (Base Salary minus $125,000 minus the portion of his
Base Salary paid in January 2006) plus interest credits for
2006 pursuant to Section 3(a)(i); and (iv) in January 2008,
the Executive shall receive the remaining amount of his Base
Salary plus interest credits for 2006 and 2007 pursuant to
Section 3(a)(i).
(i) INTEREST CREDITS ON AMOUNTS PAID AFTER
2006. Interest credits at an annual rate of 5% shall
be paid with respect to portions of Base Salary paid
in 2007 and 2008 under Section 3(a) above.
(II) DELAY IN COMMENCEMENT OF PAYMENT AFTER
TERMINATION OF EMPLOYMENT. Notwithstanding any other
provision of the Agreement, except in the case of
death or disability (if earlier), no payment of Base
Salary shall be made after the Executive's
termination of employment until the date that is six
months after the date of his "separation from
service" (as defined within the meaning of Section
409A of the Internal Revenue Code of 1986, as amended
("Code")).
(III) NO ACCELERATION OF PAYMENTS. All
payments under this Section 3(a) shall be paid as
provided herein, and no payment shall be accelerated
as to time or schedule, except, in the case of the
Executive's death or disability, as permitted under
Section 409A of the Code.
(b) RETIREMENT AND WELFARE BENEFITS. During the Term,
the Executive shall be entitled to participate in the employee
benefit plans sponsored by the Company for executive
employees, including retirement plans, healthcare plans, and
group or other insurance plans (such as disability, life, and
accidental death and dismemberment insurance); provided that
the Executive meets the eligibility provisions of such plans
in effect from time to time, and provided further that the
Executive shall not be eligible to participate in the OM
Group, Inc. Restoration Benefit Plan.
(c) HOUSING. During the Term, the Executive shall be
furnished with a monthly housing allowance of $3,000.
(d) EXECUTIVE PERQUISITES. During the Term, the
Company shall provide the Executive with the following
perquisites:
(i) COMPANY AUTOMOBILE. The Company shall
furnish the Executive with a leased 2002 Audi A6
under the OMG Company Car Program.
(ii) DIRECT EXPENSES. The Company shall
reimburse the Executive for any reasonable expenses
incurred in the course of conducting business
activity for the Company.
(e) DEATH. In the event of the death of the Executive
prior to the entire distribution of his Base Salary, any
portion of his undistributed Base Salary shall be paid to his
designated beneficiary as soon as practicable.
4. CONFIDENTIALITY
The Executive recognizes that the Executive's position with the Company
is one of trust and confidence. The Executive acknowledges that he knows of, and
that during the course of the Executive's employment with the Company, the
Executive will necessarily become acquainted with, confidential information
relating to the customers (including names, addresses, and telephone numbers) of
the Company, and trade secrets, processes, methods of operation, and other
information, which the Company regards as confidential and in the nature of
trade secrets (collectively "Confidential Information").
The Executive covenants and agrees that the Executive will not, at any
time during or after the termination of the Executive's relationship with the
Company, reveal, divulge, or make known to any person, firm, or corporation, any
Confidential Information made known to the Executive or of which the Executive
has become aware, regardless of whether developed, prepared, devised, or
otherwise created in whole or in part by the efforts of the Executive, except to
the extent that such disclosure is necessary to carry out the Executive's duties
for the Company.
The Executive agrees that upon termination of the Executive's
employment with the Company, he shall return to the Company all papers,
documents, and other property of the Company placed in the Executive's custody
or obtained by the Executive during the course of the Executive's employment
that relate to Confidential Information, and the Executive will not retain
copies of any such papers, documents, or other property for any purpose
whatsoever.
5. NON-COMPETITION
The Executive agrees that during the Term and for a period of one (1)
year following the Term, the Executive shall not engage, directly or indirectly,
alone or as a shareholder, partner, officer, director, employee, or consultant
of any other business organization in the business of the Company; provided,
however, that nothing herein shall prohibit the Executive from owning less than
five (5) percent of the outstanding capital stock of any publicly traded entity.
6. MISCELLANEOUS PROVISIONS
(a) ENTIRE AGREEMENT. The Agreement sets forth the entire
agreement and understanding between the parties with respect to the
employment of the Executive and supersedes all prior agreements,
arrangements, and understandings between the parties with respect
thereto.
(b) MODIFICATION. The Agreement may be amended, modified,
superseded, or cancelled, and the terms or covenants hereof may be
waived, only by a written instrument executed by both of the parties or
in the case of a waiver, by the party waiving compliance.
(c) WAIVER. The failure of either party at any time or times
to require performance of any provision hereof in no manner shall
affect the right at a later time to enforce the same. No waiver by
either party or a breach of any term or covenant contained in the
Agreement, whether by conduct or otherwise, in any one or more
instances, shall be deemed to be or construed as a further or
continuing waiver of any such breach or a waiver of any other term or
covenant contained in the Agreement.
(d) NOTICES. All notices given in connection with the
Agreement shall be in writing and shall be deemed to have been given:
(a) at the time delivered; (b) at the time faxed with confirmation by
the receiving party or agent; or (c) four (4) days after deposit at any
general branch of the official postal service of the United States of
America, enclosed in a registered or certified, postage-paid envelope
addressed to the respective parties as follows:
To the Executive: Xxxxx X. Xxxxxx
000 Xxxxxx Xxxxx
Xxxxxx, Xxxxxxxx 00000
To the Company: OM Group, Inc.
0000 Xxx Xxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
With a copy to: Xxxxxxx X. Xxxxxx, Esq.
Squire, Xxxxxxx & Xxxxxxx L.L.P.
0000 Xxx Xxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
(e) ASSIGNABILITY. The Agreement is personal to the Executive
and may not be assigned by the Executive to any other person, entity,
or organization. The Company may assign its rights, together with its
obligations hereunder, to a successor organization, and such rights and
obligations shall inure to, and be binding upon, any such successor.
(f) SURVIVAL OF PROVISIONS. The provisions of Section 4 shall
survive the termination of the Agreement indefinitely. The provisions
of Section 5 shall survive the termination of the Agreement for the
period of time specified therein.
(g) SEPARABILITY. Any term or provision of the Agreement which
is rendered unenforceable or invalid in any jurisdiction shall be
ineffective as to such jurisdiction to the extent of such invalidity or
unenforceability without rendering invalid or
unenforceable the remaining terms and provisions of the Agreement or
affecting the validity or enforceability of any of the provisions
hereof.
(h) ENFORCEMENT. The Executive acknowledges that the Company
may suffer substantial and irreparable damages not readily
ascertainable in terms of money in the event of the breach of any of
the Executive's obligations under Sections 4 and 5. The Executive
agrees that in addition to monetary damages, the Company has the right
and remedy to have such provisions specifically enforced by any court
of competent jurisdiction.
(i) GOVERNING LAW. The Agreement shall be construed in
accordance with, and governed by, the laws of the State of Ohio.
IN WITNESS WHEREOF, the parties have duly executed the Agreement as of
the date first written above.
OM GROUP, INC. EXECUTIVE:
By: /s/ Xxxxxxx X. Xxxxxx /s/ Xxxxx X. Xxxxxx
--------------------------------- ---------------------------------
Title: General Counsel Xxxxx X. Xxxxxx
