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Exhibit 10.20
RESIGNATION AGREEMENT
This Resignation Agreement (this "Agreement") by and between
Hercules Incorporated, a Delaware corporation (the "Company") and Vincent J.
Corbo (the "Executive"), is dated as of October 17, 2000.
WHEREAS, the Executive has been employed by the Company as its
Chief Executive Officer; and
WHEREAS, the Executive and the Company are parties to an
agreement dated as of August 12, 1998 (the "Employment Agreement"); and
WHEREAS, the Company and the Executive have agreed that it is in
the best interest of the Company and the Executive for the Executive to resign,
and they wish to set forth their mutual agreement as to the terms and conditions
of such resignation;
NOW, THEREFORE, the Company and the Executive hereby agree as
follows:
1. Resignation. Effective as of October 17, 2000 (the
"Resignation Date"), the Executive hereby resigns from his employment with the
Company, from his position as a member and Chairman of the Board of Directors of
the Company, and from all other positions the Executive may currently hold as an
officer or member of the board of directors of any of the Company's subsidiaries
or affiliates, pursuant to the provision of the Employment Agreement headed
"Special Circumstances." (The Company and all of its subsidiaries and affiliates
are hereinafter referred to as the "Hercules Entities.") The Company hereby
waives the 60-day advance notice required by such provision.
2. Severance Payments and Benefits. (a) The Company shall pay to
the Executive the sum of $3,135,000, representing two times his current base
salary and target annual bonus, in forty-eight semi-monthly installments of
$65,312.50 each, beginning as soon as practicable after the execution of this
Agreement (the "Execution Date"); provided, that if the Executive violates any
of the covenants contained in Sections 4 and 5 of this Agreement or in Section
10 of the Company's Employee Pension Restoration Plan (the "Pension Restoration
Plan") (such covenants, collectively, the "Covenants"), he shall forfeit his
right to receive any such installments that have not yet been paid; and
provided, further, that upon the death of the Executive, any such amounts that
have not yet been paid to the Executive and have not been forfeited shall be
paid as soon as practicable after the date of his death to the Executive's
surviving spouse or, if he has no surviving spouse, to his estate.
(b) The Company shall pay to the Executive, as soon as
practicable after the Execution Date, a cash payment of $2,832,753.83. If the
Executive should die before receiving such payment, it shall be paid to the
Executive's surviving spouse or, if he has no surviving spouse, to his estate.
(c) The Company shall provide the Executive with the pension
benefits to which he is entitled under the enhanced pension benefit set forth in
the provision of the Employment Agreement headed "Pension Adjustments" (the
"Enhanced Pension"), the
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Pension Plan of Hercules Incorporated, and the Pension Restoration Plan. The
Company and the Executive agree that the foregoing pension benefits are as set
forth in Schedule A hereto. Notwithstanding the foregoing, the Executive shall
forfeit his rights to benefits under the Pension Restoration Plan and the
Enhanced Pension if at any time after the Resignation Date he violates any of
the Covenants. In addition, the Executive shall be entitled to receive his
vested benefits under the Company's Savings and Investment Plan in accordance
with its terms.
(d) Until the first to occur of December 31, 2002 and the
Executive's death, the Company shall continue to provide the Executive and his
eligible dependents with medical, dental, vision and life insurance benefits
(including without limitation under the Hercules Executive Survivor Benefits
Program) on the same terms and conditions as other employees of the Company, as
in effect from time to time, as if he had remained employed during that period,
subject to his payment of such employee contributions, copayments and similar
charges as apply to employees generally; provided, that such continued benefits
shall terminate to the extent the Executive becomes eligible for the same type
benefits (i.e., medical, dental, vision and/or life insurance benefits) from
another employer. Notwithstanding the foregoing, the Executive shall forfeit all
rights under the preceding sentence if he violates any of the Covenants. The
period for the required continuation coverage under Section 601 et seq. of the
Employee Retirement Income S and Section 4980B of the Code (known as "COBRA"
benefits) shall be considered to begin on the Execution Date. The Executive
shall be also be entitled to such retiree medical and life insurance benefits
for which he may be eligible under the terms and conditions of the Company's
plans, as in effect from time to time, based upon his service through the
Resignation Date; provided, that such benefits shall not be provided to the
extent they would duplicate any benefits provided under the first sentence of
this Section 2(d).
(e) The Executive shall be fully vested as of the Resignation
Date in his benefits under the Company's Director's Charitable Award Program,
subject to forfeiture if he violates any of the Covenants.
(f) The Company agrees to pay as incurred, within 10 days
following the Company's receipt of an invoice from the Executive, all reasonable
legal fees and expenses that the Executive may incur in connection with entering
into this Agreement.
(g) Until December 31, 2001, the Company will provide the
Executive with tax and financial advice and tax return preparation services in
accordance with the Company program in which he participates immediately before
the Resignation Date, at a cost not to exceed $20,000.
(h) As soon as practicable after the Execution Date, the
Company shall convey to the Executive title to the 1996 Jaguar XJS automobile
that he currently uses.
3. Equity Awards. (a) Schedule B hereto sets forth a complete
list of all of the Executive's currently outstanding awards under the Company's
Long Term Incentive Compensation Plan (the "LTIP"), other than the 60,600
restricted stock units provided for under the Employment Agreement and the
matching grant awards set forth on Schedule C hereto. The awards listed on
Schedule B, which consist of performance accelerated stock options ("PASOs"),
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regular stock options ("Options"), restricted stock (the "Schedule B Restricted
Stock") and restricted stock units (the "Schedule B RSUs"), are hereinafter
referred to as the "Equity Awards." Notwithstanding any provision in the LTIP or
the award agreements relating to the Equity Awards to the contrary, the
consequences of the termination of the Executive's employment for the Equity
Awards shall be as set forth in this Section 3. The PASOs that have not yet
vested shall vest on the earliest of (i) achievement of the applicable
performance target (without regard to any minimum vesting date), (ii) April 17,
2005, and (iii) 9.5 years after the applicable date of grant of the PASO, and
each PASO shall remain exercisable until the earlier of October 17, 2005 or the
expiration of its term. The Options that have not yet vested shall vest in full
on the Execution Date, and each Option shall remain exercisable until the
earlier of October 17, 2005 or the expiration of its term. All Schedule B
Restricted Stock and Schedule B RSUs shall vest in full as of the Execution
Date, and the Schedule B RSUs shall be settled in cash equal to the value
indicated on Schedule B plus any accumulated dividend equivalents as promptly as
practicable thereafter. It is expressly acknowledged that (i) the foregoing
consequences are different from those that would apply under the terms of the
Equity Awards and the LTIP, absent this Agreement and (ii) the Equity Awards
shall be treated in the same manner as other, comparable awards under the LTIP
in the event of a "change of control" of the Company (as defined in the LTIP).
(b) The Executive has heretofore been granted the opportunity
to participate in the Company's Matching Grant Program with respect to the
grants of restricted stock and restricted stock units identified on Schedule C
hereto. Such grants shall vest, and such restricted stock units shall be settled
in cash, in accordance with their terms, if the Executive completes the
exchanges with respect to such grants on or before January 2, 2001.
4. Mutual Nondisparagement. (a) The Executive shall not make,
participate in the making of, or encourage any other person to make, any
statements, written or oral, which criticize, disparage, or defame the goodwill
or reputation of, or which are intended to embarrass or adversely affect the
morale of, (i) any of the Hercules Entities or (ii) any of the present, former
or future directors, officers, executives, employees and/or shareholders of any
of the Hercules Entities in their respective capacities as such. The Executive
further agrees not to make any negative statements, written or oral, relating to
his employment, the termination of his employment, or any aspect of the business
of the Hercules Entities.
(b) Neither the Company, nor any individual while serving as
an officer or director of the Company, shall make, participate in the making of,
or encourage any employees or any other person to make, any statements, written
or oral, which criticize, disparage, or defame the reputation of, or which are
intended to embarrass, the Executive. The Company further agrees not to make any
negative statements, written or oral, relating to the Executive's employment or
the termination of his employment.
(c) Notwithstanding the foregoing, nothing in this Section 4
shall prohibit any person from making truthful statements when required by order
of a court or other body having Jurisdiction, or as otherwise may be required by
law or legal process.
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5. The Executive's Covenants. (a) The Executive shall make
himself available to the Company following the Resignation Date to assist the
Hercules Entities, as may be requested by the Company, with respect to pending
and future litigations, arbitrations, governmental investigations or other
dispute resolutions relating to matters that arose during the Executive's
employment with the Company. The Company will reimburse the Executive for all
reasonable expenses and costs he may incur as a result of providing assistance
under this Section 5(a), upon receipt of proper documentation thereof.
(b) Confidentiality. The existence of and terms and conditions
of this Agreement shall be held confidential by the parties hereto, except for
disclosure (i) by the Company as may be required by applicable securities laws,
as determined by the Company upon the advice of counsel, (ii) by the Executive
to his legal and financial advisors and his spouse, each of whom shall be
instructed by the Executive to maintain the terms of this Agreement in strict
confidence in accordance with the terms hereof, (iii) by either party if
required by order of a court or other body having jurisdiction over such matter,
and (iv) by either party with the written consent of the other. In addition, the
Executive shall hold in a fiduciary capacity for the benefit of the Company all
secret or confidential information, knowledge or data relating to the Hercules
Entities and their respective businesses that he has obtained during his
employment by the Company and the other Hercules Entities that is not public
knowledge (other than as a result of the Executive's violation of this Section
5(b)) ("Confidential Information"). The Executive shall not communicate, divulge
or disseminate Confidential Information at any time, except with the prior
written consent of the Company or as otherwise required by law or legal process.
(c) Noncompetition and Nonsolicitation of Employees and
Customers. Until October 17, 2002, the Executive (A) shall not engage, anywhere
within the geographical areas in which any Hercules Entity is then conducting
its business operations, directly or indirectly, alone, in association with or
as a shareholder, principal, agent, partner, officer, director, employee or
consultant of any other organization, in any business (a "Competitive Business")
which competes with any business then being conducted by such Hercules Entity;
provided, that the foregoing shall not prohibit the Executive from owning a
maximum of two percent (2%) of the outstanding stock, of any publicly traded
corporation; (B) shall not solicit or encourage any officer, employee or
consultant of any of the Hercules Entities to leave the employ of any of the
Hercules Entities for employment by or with any Competitive Business; (C) shall
not solicit, divert or to take away, the business or patronage of any of the
customers or accounts, or prospective customers or accounts, of any Hercules
Entity, which were contacted, solicited or served by the Executive at any time
during the period of twelve months immediately preceding the Resignation Date;
and (D) shall not acquire, or assist any other party in acquiring, any shares of
any of the Hercules Entities, or otherwise seek, or assist any other party in
seeking to gain control of any of the Hercules Entities.
(d) The Executive acknowledges and agrees that because of the
nature of the business in which the Company and the other Hercules Entities are
engaged and because of the nature of the Confidential Information to which the
Executive has had access during his employment, it would be impractical and
excessively difficult to determine the actual damages of the Company and the
other Hercules Entities in the event the Executive breached any of the covenants
of Sections 5(b) and (c), and remedies at law (such as monetary damages) for any
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breach of the Executive's obligations under Sections 5(b) and (c) would be
inadequate. The Executive therefore agrees and consents that if he commits any
breach of a covenant under Sections 5(b) and (c) or threatens to commit any such
breach, the Company shall have the right (in addition to, and not in lieu of,
any other right or remedy that may be available to it) to temporary and
permanent injunctive relief from a court of competent jurisdiction, without
posting any bond or other security and without the necessity of proof of actual
damage. With respect to any provision of Sections 5(b) and (c) that is finally
determined to be unenforceable, the Executive and the Company hereby agree that
this Agreement or any provision hereof may be reformed so that it is enforceable
to the maximum extent permitted by law. If any of the covenants of Sections 5(b)
and (c) is determined to be wholly or partially unenforceable in any
jurisdiction, such determination shall not be a bar to or in any way diminish
the Company's right to enforce any such covenant in any other jurisdiction.
(e) Notwithstanding the foregoing, the Executive shall be
released from his obligations under Sections 5(a) and 5(c) above if (i) the
Company fails to make any payment or provide any benefit to the Executive under
this Agreement when it is due under the terms hereof, other than as a result of
the Executive's forfeiture thereof in accordance herewith as a result of the
Executive's violation of any of the Covenants, (ii) the Executive gives the
Company notice of such failure, and (iii) the Company fails to correct such
failure within 10 business days after receiving such notice.
6. Mutual Releases. (a) The Executive, on behalf of himself and
his successors, assigns, heirs and any and all other persons claiming through
the Executive, if any, and each of them, shall and does hereby forever relieve,
release, and discharge the Company and the other Hercules Entities and their
respective predecessors, successors, assigns, owners, attorneys,
representatives, affiliates, parent corporations, subsidiaries (whether or not
wholly-owned), divisions, partners and their officers, directors, agents,
employees, servants, executors, administrators, accountants, investigators,
insurers, and any and all other related individuals and entities, if any, and
each of them, in any and all capacities, from any and all claims, debts,
liabilities, demands, obligations, liens, promises, acts, agreements, costs and
expenses (including, but not limited to, attorneys' fees), damages, actions and
causes of action, of whatever kind or nature, including, without limitation, any
statutory, civil or administrative claim, or any claim, arising out of acts or
omissions occurring before the execution of this Agreement, whether known or
unknown, suspected or unsuspected, fixed or contingent, apparent or concealed
(collectively referred to as "claims"), including, but not limited to, any
claims based on, arising out of, related to or connected with the subject matter
of the Employment Agreement, this Agreement, the Executive's employment or the
termination thereof, and any and all facts in any manner arising out of, related
to or connected with the Executive's employment with, or termination of
employment from, the Company and its subsidiaries and affiliates, including, but
not limited to, any claims arising from rights under federal, state, and local
laws prohibiting discrimination on the basis of race, national origin, sex,
religion, age, marital status, pregnancy, handicap, ancestry, sexual
orientation, or any other form of discrimination, and any common law claims of
any kind, including, but not limited to, contract, tort, and property rights
including, but not limited to, breach of contract, breach of the implied
covenant of good faith and fair dealing, tortious interference with contract or
current or prospective economic advantage, fraud, deceit, misrepresentation,
defamation, wrongful termination, infliction of emotional distress, breach of
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fiduciary duty, and any other common law claim of any kind whatever. The
Executive expressly waives any and all rights under any applicable law with
respect to claims that he does not know or suspect to exist in his favor at the
time of executing this release, even though if known by him, such claims must
have materially affected his settlement with the Company.
(b) The Company, on behalf of itself and the other Hercules
Entities, their respective successors and assigns, and any and all other persons
claiming through any Hercules Entity, and each of them, shall and does hereby
forever relieve, release, and discharge the Executive and his successors,
assigns, and heirs, from any and all claims, debts, liabilities, demands,
obligations, liens, promises, acts, agreements, costs and expenses (including,
but not limited to, attorneys' fees), damages, actions and causes of action, of
whatever kind or nature, including, without limitation, any statutory, civil or
administrative claim, or any claim, arising out of acts or omissions occurring
before the execution of this Agreement, whether known or unknown, suspected or
unsuspected, fixed or contingent, apparent or concealed (collectively referred
to as "claims"), including, but not limited to, any claims based on, arising out
of, related to or connected with the subject matter of the Employment Agreement,
this Agreement, the Executive's employment or the termination thereof, and any
and all facts in any manner arising out of, related to or connected with the
Executive's employment with, or termination of employment from, the Company and
its subsidiaries and affiliates, including, but not limited to, any claims
arising from rights under federal, state, and local laws prohibiting
discrimination on the basis of race, national origin, sex, religion, age,
marital status, pregnancy, handicap, ancestry, sexual orientation, or any other
form of discrimination, and any common law claims of any kind, including, but
not limited to, contract, tort, and property rights including, but not limited
to, breach of contract, breach of the implied covenant of good faith and fair
dealing, tortious interference with contract or current or prospective economic
advantage, fraud, deceit, misrepresentation, defamation, wrongful termination,
infliction of emotional distress, breach of fiduciary duty, and any other common
law claim of any kind whatever. The Company expressly waives any and all rights
under any applicable law with respect to claims that it does not know or suspect
to exist in its favor at the time of executing this release, even though if
known by it, such claims must have materially affected its settlement with the
Executive.
(c) It is expressly acknowledged by the Company and the
Executive that the foregoing provisions of this Section 6 shall not adversely
affect, release or waive:
(i) any claims or rights under this Agreement;
(ii) any rights the Executive may have to
indemnification pursuant to Delaware and/or other applicable law
or the by-laws and/or certificate of incorporation of the
Company; or
(iii) rights the Executive may have under any
directors or officers' insurance policy maintained by the Company
and in effect presently, which insurance the Company agrees to
maintain in full force and effect for the Executive for such
periods and on the same basis as for other former officers and
directors of the Company.
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7. Entire Agreement, Other Benefits, Secrecy Agreement. This
Agreement sets forth the entire agreement of the Company and the Executive with
respect to the subject matter hereof, and supersedes in their entirety the
Employment Agreement, the Employment Agreement dated as of August 24, 2000
between the Executive and the Company, any severance plan of any of the Hercules
Entities (including without limitation the Severance Pay Plan effective April
16, 2000 and the letter from June B. Barry to the Executive dated April 13,
2000) in their entirety. Without limiting the generality of the foregoing, the
Executive expressly acknowledges and agrees that except as specifically set
forth in this Agreement, he is not entitled to receive any severance pay,
severance benefits, compensation or employee benefits of any kind whatsoever
from any of the Hercules Entities. Notwithstanding the foregoing or any other
provision of this Agreement, this Agreement does not supersede the agreement
dated October 2, 1969 attached hereto as Exhibit D, which remains in full force
and effect.
8. Successors. This Agreement is personal to the Executive, and,
without the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives. This Agreement shall inure to the benefit of and be
binding upon the Company and its successors.
9. Amendment. This Agreement may be amended, modified or changed
only by a written instrument executed by the Executive and the Company.
10. Governing Law, Consent to Suit. (a) This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
without reference to principles of conflict of laws. The captions of this
Agreement are not part of the provisions hereof and shall have no force or
effect.
(b) The parties hereto irrevocably consent to jurisdiction in
the courts of the state of Delaware for resolution of any claim or dispute
arising hereunder, and such shall be the exclusive forum for the resolution of
such claim or dispute.
11. Notices. All notices and other communications hereunder shall
be in writing; shall be delivered by hand delivery to the other party or mailed
by registered or certified mail, return receipt requested, postage prepaid;
shall be deemed delivered upon actual receipt; and shall be addressed as
follows:
If to the Company:
Hercules Incorporated
1313 North Market Street
Wilmington, Delaware 19894-0001
Attention: General Counsel
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With a copy to:
David A. Katz, Esq.
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
If to the Executive:
Vincent J. Corbo
5 Southview Path
Southern Slopes
Chadds Ford, Pennsylvania 19317
With a copy to:
R. Franklin Balotti, Esq.
Richards, Layton & Finger
One Rodney Square
P.O. Box 551
Wilmington, Delaware 19899
or to such other address as either party shall have furnished to the other in
writing in accordance herewith.
12. Tax Withholding. Notwithstanding any other provision of this
Agreement, the Company may withhold from any amounts payable under this
Agreement, or any other benefits received pursuant hereto, such Federal, state
and/or local taxes as shall be required to be withheld under any applicable law
or regulation.
13. Violation of Covenants. Notwithstanding any other provision
of this Agreement, the Executive shall not forfeit any of his entitlements
hereunder as a result of a breach of any of the Covenants unless (i) the Company
gives the Executive notice of such breach, and (ii) the Executive fails to
either demonstrate to the Company's satisfaction that no breach in fact occurred
or to cure such breach, in either case within 10 business days after receiving
such notice.
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IN WITNESS WHEREOF, each of the parties hereto has duly
executed this Agreement as of the date first set forth above.
/s/ Vincent J. Corbo
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Vincent J. Corbo
HERCULES INCORPORATED
By: /s/ Thomas L. Gossage
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