EXHIBIT 10.15
AGREEMENT
WHEREAS, AMCOL International Corporation (the "Company") considers it
essential and in the best interests of the Company and its shareholders to
foster the continued employment of its key management personnel;
WHEREAS, Gary L. Castagna ("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
remuneration 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, at least equal to that which
he presently receives, only with such changes as shall be agreed upon between
Employee and the Company. 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 lesser status,
dignity and character than his duties immediately prior to
the effective date of the Change in Control or a substantial
reduction in the nature or status of his responsibilities
from those in effect 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 Gary L. Castagna
One North Arlington Vice-President
1500 West Shure Drive AMCOL International Corporation
Arlington Heights, IL 60004 One North Arlington
ATTN: Chairman of the Board 1500 West Shure Drive
Arlington Heights, IL 60004
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 there-after; 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 from the Company from
the date of the Change in Control until the termination date, excluding any
non-qualified deferred compensation, stock option compensation or other
stock incentive bonus plan compensation so received. 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 three (3) annual
installments
commencing thirty (30) days after the sums become due. If on or after the
date any payment becomes due hereunder the Company at any time has a funded
debt-to-total capitalization ratio which equals or exceeds 1:1, upon
Employee's written request, the Company shall secure its payment of the
remaining annual installments with a letter of credit or other security
instrument as shall be reasonably acceptable to Employee. Such letter of
credit or other security instrument shall provide Employee with the ability
to receive the remaining installment(s) only if his payment is delinquent.
All sums due hereunder 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 buyouts.
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 or similar minerals, absorbent polymers 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 contacts with, and analysis of, customers and potential customers
throughout the United States and certain foreign countries, in addition to
certain operational matters. Employee's contacts on behalf of the Company
represent a substantial asset of the Company which are entitled to
protection. In recognition of this situation, the covenants set forth in
this Section 12 shall apply to competition and solicitation in the United
States, United Kingdom, Germany, Japan, Canada, Thailand, and those
countries in which the Company, its affiliates and/or the subsidiaries
thereof has (have) conducted $200,000 or more of the business during the
12-month period ending on the date Employee's employment with the Company
is 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 conditions 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, 1998 and end on March
31, 2001. 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
/s/ Gary L. Castagna By: /s/ John Hughes
Gary L. Castagna Its: President & CEO