Exhibit 10.2
FORM OF
EXECUTIVE SEVERANCE AGREEMENT
Dated as of ______________, 19___,
between
MILLENNIUM PETROCHEMICALS INC.,
a Delaware corporation (the "Company"), and
_____________________
("Executive")
TABLE OF CONTENTS
SECTION PAGE
Section 1. Termination Following Employment by Equistar.............. 1
Section 2. Rights and Benefits upon Termination...................... 3
(a) Salary and Other Payment at Termination................... 3
(b) Crediting of Additional Pension Benefit................... 3
(c) 401(k) Plan............................................... 4
(d) Insurance and Other Benefits.............................. 4
(e) Financial Counseling...................................... 4
(f) Outplacement.............................................. 5
(g) No Duty to Mitigate....................................... 5
Section 3. Other Benefit Plans....................................... 5
Section 4. Payment Obligations Absolute.............................. 5
Section 5. Conditions to Employer's Obligations...................... 5
Section 6. Special Tax Provision..................................... 6
Section 7. Confidentiality and Cooperation........................... 9
(a) Cooperation............................................... 9
(b) Release of Liability...................................... 9
Section 8. Term of Agreement.........................................10
Section 9. Indemnification...........................................10
Section 10. Arbitration...............................................11
(a) Arbitrable Matters........................................11
(b) Submission to Arbitration.................................11
(c) Arbitration Procedures....................................12
(d) Compliance with Decisions.................................12
(e) Costs and Expenses........................................13
Section 11. Notices...................................................13
Section 12. Miscellaneous.............................................14
(a) Assignment................................................14
(b) Construction of Agreement.................................14
(c) Amendment.................................................14
(d) Waiver....................................................14
(i)
(e) Severability..............................................14
(f) Successors................................................14
(g) Taxes.....................................................15
(h) Governing Law.............................................15
(i) Entire Agreement..........................................15
(j) Independent Representation................................15
(ii)
EXECUTIVE SEVERANCE AGREEMENT
THIS EXECUTIVE SEVERANCE AGREEMENT, is made and entered into this ___ day
of _________, 1997, by and between MILLENNIUM PETROCHEMICALS INC., a Delaware
corporation (hereinafter referred to as "Company"), and ____________________, an
individual (hereinafter referred to as "Executive").
WITNESSETH:
WHEREAS, the Board of Directors of the Company (the "Board") has authorized
the Company to enter into a severance agreement in the form hereof with
Executive;
WHEREAS, pursuant to an arrangement between Millennium and Equistar
Chemicals, LP ("Equistar"), Executive is expected to begin performing services
for Equistar on or about December 1, 1997 (the "Closing Date"), Executive has
been offered employment by Equistar, anticipated to be effective on or about
January 1, 1998, and it is in the best interest of the Company that Executive
accept this position without concern that Executive is distracted by personal
uncertainties and risks created by this new assignment;
WHEREAS, it is the Company's intent to assign this Agreement to Equistar
upon Executive's employment by Equistar and all obligations under this Agreement
shall be assumed by Equistar, unless specifically retained by Company;
NOW, THEREFORE, to assure the Company that it will have the continued
dedication of Executive and the availability of Executive's advice and counsel
prior to Executive's employment with Equistar, to induce Executive to remain in
the employ of the Company until employment by Equistar and further, to accept
employment with Equistar and for other good and valuable consideration, the
parties agree as follows:
SECTION 1. TERMINATION FOLLOWING EMPLOYMENT BY EQUISTAR.
Employer will provide or cause to be provided to Executive the rights and
benefits described in Section 2 of this Agreement in the event that Executive's
employment is terminated prior to January 1, 2001 (A) by the Employer (as
defined in the next paragraph) without Cause (as defined in Section 6) other
than for death, Disability (as defined below) or retirement upon reaching age
sixty-five (65) ("Normal Retirement Date") or (B) by the Executive effected by
written notice ("Constructive Termination Notice") within ninety (90) days after
any event that constitutes Constructive Termination for Good Reason, as defined
below. The Constructive Termination Notice shall provide for a date of
termination not less than ten (10) nor more than sixty (60) days after the date
of such Constructive Termination Notice.
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For purposes of this Agreement, "Employer" shall refer to the Company prior
to assignment of this Agreement to Equistar and shall refer to Equistar
following Equistar's assumption of the obligations under this Agreement. The
Executive's employment shall not be deemed to be terminated as a result of the
transfer of his employment to Equistar.
"Disability" for purposes of this Agreement shall mean Executive's
inability to perform his material duties and responsibilities due to the same or
related physical or mental illness for one hundred and eighty (180) consecutive
days. A termination for Disability shall be deemed to occur when Executive is
terminated by the Employer by written notice while Executive remains disabled.
For purposes of this Agreement, "Constructive Termination for Good Reason"
means:
(i) the Executive is assigned to any duties or responsibilities that
are not comparable to Executive's position, offices, duties, responsibilities or
status with Equistar at the time of Executive's initial employment with Equistar
or on the Closing Date, or the Executive's reporting responsibilities or titles
are changed and the change results in a reduction of Executive's
responsibilities or position at Equistar from those in effect at the time of the
Executive's initial employment by Equistar or on the Closing Date;
(ii) a relocation of Equistar's principal executive offices to a
location more than twenty-five (25) miles from where they are at the time of
Executive's initial employment with Equistar, or the Executive is actually
transferred, or offered a proposed transfer, as evidenced in a written
communication from Employer to Executive, to another location other than the
location at which he was primarily assigned at the time of his initial
employment by Equistar;
(iii) a reduction of Executive's rate of annual base salary to a level
below Executive's rate of base salary at the time of the Executive's initial
employment by Equistar, or a reduction of the level of benefits or compensation
provided to Executive below the comparable level of benefits or compensation
payable to similarly situated Executives at Equistar;
(iv) a failure by the Employer (A) to continue any bonus plan,
program or arrangement provided by Employer, in which Executive was entitled to
participate as of January 1, 1998, or, if such plans have not been finalized as
of January 1, 1998, as of March 1, 1998 (the "Bonus Plans"), provided that any
such Bonus Plans may be modified at the Employer's discretion from time to time
but shall be deemed terminated if plans providing Executive with substantially
similar benefits are not substituted therefor ("Substitute Plans") or (B) to
consider Executive a participant in the Bonus Plans or Substitute Plans on not
less than the same target level of award and not more than the same level of
difficulty for achievability of such award as was applicable to Executive
immediately prior to any change in such plans, in accordance with the Bonus
Plans or Substitute Plans; or
(v) any breach by the Employer of any material provision of this
Agreement.
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SECTION 2. RIGHTS AND BENEFITS UPON TERMINATION. In the event Executive is
entitled to receive the rights and benefits described in this Section as a
result of the termination or Constructive Termination for Good Reason of
Executive's employment as described in Section 1 (collectively referred to as
"Termination"), the Employer agrees to provide or cause to be provided to
Executive the following rights and benefits.
(a) Salary and Other Payment at Termination. Employer shall pay to
Executive not later than five (5) days following Termination a lump-sum payment
in cash in the amount of (i) three (3) times Executive's Applicable Annual
Earnings (as defined below); (ii) any unreimbursed business expenses for the
period prior to Termination payable in accordance with Employer's policies, and
(iii) any base salary, bonus, vacation pay or other deferred compensation
accrued or earned under law or in accordance with the Employer's policies
applicable to Executive but not yet paid.
For purposes of this Agreement, "Applicable Annual Earnings" shall mean the
sum of Executive's highest annual base salary in effect within one hundred and
eighty (180) days of the last day of employment with the Company or Executive's
highest annual base salary within one hundred and eighty (180) days of
Termination, whichever is higher, plus the highest annual bonus paid or payable
to Executive for any of the last three (3) completed years by Equistar, the
Company or its predecessors. Applicable Annual Earnings shall include such
annual base salary and bonus whether or not paid on a deferred basis, including
without limitation, amounts contributed by or on behalf of Executive under an
Employer-sponsored plan, such as (i) a plan described in section 125 or 401(k)
of the Internal Revenue Code of 1986, as amended, or (ii) the Employer's
deferral plan or an "excess benefit plan" as defined in the Employee Retirement
Income Security Act of 1974, as amended. Notwithstanding the preceding
provisions of this paragraph, Applicable Annual Earnings does not include any
income attributable to stock options, stock appreciation rights, performance
awards other than awards under an executive bonus plan described above, dividend
credits, and restricted stock granted under, and dividends on shares acquired
pursuant to, any stock option plan, restricted stock plan or performance unit
plan.
(b) Crediting of Additional Pension Benefit. Employer shall cause
Executive to be credited with three (3) years of additional (i) age (not to
exceed age sixty-five (65)) and (ii) service credit (at the level of Executive's
Applicable Annual Earnings, to the extent accounted for under the Retirement
Plans, as defined below) for pension purposes under any defined benefit type
qualified or nonqualified pension plan or arrangement of the Employer and its
affiliates applicable to Executive (the "Retirement Plans"), measured from the
date of Termination and not otherwise credited, to the extent that Executive
would otherwise be entitled to such credit during such three (3) year period.
Payments to which Executive would be entitled under any of the Retirement Plans
as a result of this additional age and service credit shall be made through and
in accordance with the terms of the nonqualified defined benefit pension plan or
arrangement if any then exists, or, if not, in an actuarially equivalent lump
sum (using the actuarial factors then applying in the Employer's or its
affiliates' defined benefit plan covering Executive).
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If the method to calculate a retirement benefit under Employer's qualified
retirement plan and Supplementary Executive Retirement Plan is changed, then the
Executive shall be entitled to an amount under the new plan formula that is the
equivalent of the amount that would have been payable if the Executive had been
credited with the age and service credit described above. Payments attributable
to this enhanced retirement benefit shall be payable under the Employer's non-
qualified retirement plan for executives.
(c) 401(k) Plan. The Employer shall pay to Executive an amount equal to
three (3) years of the maximum Employer contribution (assuming Executive
deferred the maximum amount and continued to earn his then current salary)
measured from the date of Termination under any type of qualified or
nonqualified 401(k) plan (payable at the end of each such year and not payable
to the extent otherwise contributed to such plan).
(d) Insurance and Other Benefits. To the extent that Executive is eligible
thereunder, then for a period of thirty-six (36) months following Termination,
Executive (and his dependents, as applicable) shall continue to be covered at
Employer's expense by Employer's life insurance, medical, dental, accident and
disability plans or any successor to a plan or program in effect at Termination
for employees in the same class or category as Executive (hereafter individually
and collectively referred to as "Welfare Plan"), subject to the terms of the
Welfare Plan and to Executive's making any required contributions thereto which
contributions shall not exceed those charged to employees in the same class or
category in which Executive was employed by Employer. In the event that
Executive is ineligible to continue to be so covered under the terms of any
welfare Plan, or in the event that Executive is eligible but the benefits
applicable to Executive (and his dependents, as applicable) are not
substantially equivalent to such benefits immediately prior to Termination,
then, for a period of thirty-six (36) months following Termination, Equistar, at
its expense, shall provide to Executive (and his dependents, as applicable)
through other sources such benefits as may be necessary to make the benefits
applicable to Executive (and his dependents, as applicable) substantially
equivalent to those in effect immediately prior to Termination. Continuation
coverage provided pursuant to any group health plan maintained by Employer shall
be credited against, and not in addition to, any continuation coverage required
under the Consolidated Omnibus Budget Reconciliation Act of 1985 as amended
("COBRA"). Any retiree coverage provided to Executive shall be on the same terms
and conditions, including bridging of coverage, as that provided to executives
in the same class or category in which Executive was employed by Employer.
(e) Financial Counseling. For a period of one year following Termination,
Executive shall continue to be covered at Employer's expense under Employer's
financial counseling program, or any successor program in effect at Termination
for employees in the same class or category as Executive, subject to the terms
of such program. In the event that benefits available to Executive under that
financial counseling program are not substantially equivalent to the benefits
available to Executive at Termination, Employer, at its expense, shall provide
to Executive through other sources such benefits as may be necessary to make the
benefits available to Executive substantially equivalent to those in effect at
Termination.
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(f) Outplacement. Employer shall provide to Executive, at its expense but
not to exceed $40,000.00, outplacement assistance for Executive from a
professional outplacement assistance firm which is reasonably suitable to
Executive.
(g) No Duty to Mitigate. Executive's entitlement to benefits hereunder
shall not be governed by any duty to mitigate Executive's damages by seeking
further employment nor offset by any compensation which Executive may receive
from future employment.
SECTION 3. OTHER BENEFIT PLANS. The Employer shall pay to Executive any
other amounts or benefits due under the then applicable employee benefit
incentive or equity plans of the Employer applicable to Executive as shall be
determined and paid in accordance with such plans, except to the extent paid
pursuant to Section 2 above.
SECTION 4. PAYMENT OBLIGATIONS ABSOLUTE. Employer's obligation to pay or
provide, or to cause to be paid or provided to Executive the amounts and
benefits and to make the arrangements provided in this Agreement shall be
absolute and unconditional and shall not be affected by any circumstances
(including, without limitation, any set off, claim, counterclaim, recoupment,
defense or other right, which the Employer may have against Executive or anyone
else). All amounts payable by or on behalf of Employer hereunder shall be paid
without notice or demand. The amounts due under Section 2 are inclusive, and in
lieu of, any amounts payable under any other salary continuation or cash
severance arrangement of the Company and to the extent paid or provided under
any other such arrangement shall be offset against the amount due hereunder.
Each and every payment made hereunder by or on behalf of the Employer shall be
final and Employer and its subsidiaries or affiliates, for any reason
whatsoever, shall not seek to recover all or any part of such payment from
Executive or from whomever shall be entitled thereto. In no event shall an
asserted violation of any provision of this Agreement constitute a basis for
deferring or withholding any amount payable to, or on behalf of, Executive under
this Agreement.
SECTION 5. CONDITIONS TO EMPLOYER'S OBLIGATIONS. The Employer shall have no
obligation to provide or cause to be provided to Executive the rights and
benefits described in this Agreement if Employer terminates Executive's
employment for "Cause," which for purposes of this Agreement shall be defined
and limited to: (i) the continued and willful refusal by Executive to
substantially perform his duties (other than a willful refusal to perform a duty
which constitutes Constructive Termination for Good Reason or refusal resulting
from Executive's incapacity due to physical or mental illness), after demand for
substantial performance is delivered by the Partnership Governance Committee
which demand specifically identifies the manner in which Partnership Governance
Committee has determined that Executive has not substantially performed his
duties, and Executive's performance is not cured to the Partnership Governance
Committee's reasonable satisfaction within thirty (30) days from such demand;
(ii) the engagement by Executive in willful misconduct or dishonesty that is
materially injurious to the Company or Equistar, monetarily or otherwise; (iii)
Executive's final conviction of (or pleading nolo contendere to) a felony; (iv)
breach of any fiduciary duty owed to the Company or any affiliate; or (v)
dishonesty, misappropriation or fraud with regard to the Company (other than
good faith expense account disputes).
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Notwithstanding the foregoing, Employer shall not be deemed to have terminated
Executive for Cause without (i) reasonable written notice to Executive setting
forth the reasons for Employer's intention to terminate Executive for Cause and
(ii) an opportunity for Executive, together with his counsel, to be heard before
the Partnership Governance Committee. Notwithstanding any contrary provision of
this Agreement, it is specifically agreed that Cause shall not include any act
or omission by Executive in the good faith exercise of Executive's business
judgment as an officer of the Company or Equistar.
Termination for Cause shall be effected by a written notice of termination
for Cause. If Executive is terminated for Cause, Employer, in accordance with
and subject to the provisions of the immediately preceding paragraph, shall not
be required to provide Executive with at least sixty (60) days advance written
notice of such termination for Cause. If Executive is terminated for a reason
other than for Cause, Employer shall be required to provide sixty (60) days
advance written notice to Executive unless Executive agrees to a shorter notice
period. Regardless of the reason for termination, Executive shall receive, an
addition to any other payments provided to Executive hereunder or otherwise,
payment for his accrued base salary and a vacation allowance based on years of
service through his termination date.
SECTION 6. SPECIAL TAX PROVISION. (a) Anything in this Agreement to the
contrary notwithstanding, in the event that any amount or benefit paid, payable,
or to be paid, or distributed, distributable, or to be distributed to or with
respect to Executive (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with Equistar or the Company, any person
whose actions result in a change of ownership covered by Section 280G(b)(2) of
the Internal Revenue Code of 1986, as amended (the "Code") or any person
affiliated with Equistar or the Company or such person) as a result of a change
in ownership covered by Code Section 280G(b)(2) (collectively, the "Covered
Payments") is or becomes subject to the excise tax imposed by or under Section
4999 of the Code (or any similar tax that may hereafter be imposed), and/or any
interest or penalties with respect to such excise tax (such excise tax, together
with such interest and penalties, is hereinafter collectively referred to as the
"Excise Tax"), Employer shall pay to Executive an additional amount (the "Tax
Reimbursement Payment") such that after payment by Executive of all taxes
(including, without limitation, any interest or penalties and any Excise Tax
imposed on or attributable to the Tax Reimbursement Payment itself) Executive
retains an amount of the Tax Reimbursement Payment equal to the sum of (i) the
amount of the Excise Tax imposed upon the Covered Payments, and (ii) without
duplication, an amount equal to the product of (A) any deductions disallowed for
federal, state or local income tax purposes because of the inclusion of the Tax
Reimbursement Payment in Executive's adjusted gross income, and (B) the highest
applicable marginal rate of federal, state or local income taxation,
respectively, for the calendar year in which the Tax Reimbursement Payment is
made or is to be made. The intent of this Section 6 is that after paying
Executive's federal, state and local income tax and any payroll taxes, Executive
will be in the same position as if Executive was not subject to the Excise Tax
under Section 4999 of the Code and did not receive the extra payments pursuant
to this Section 6 and this Section 6 shall be interpreted accordingly.
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(b) Except as otherwise provided in Section 6(a), for purposes of
determining whether any of the Covered Payments will be subject to the Excise
Tax and the amount of such Excise Tax, (i) such Covered Payments will be treated
as "parachute payments" (within the meaning of Section 280G(b)(2) of the Code)
and such payments in excess of the Code Section 280G(b)(3) "base amount" shall
be treated as subject to the Excise Tax, unless, and except to the extent that,
Employer's independent certified public accountants appointed prior to the
change in ownership covered by Code Section 280G(b)(2) or legal counsel
(reasonably acceptable to Executive) appointed by such public accountants, (or,
if the public accountants decline such appointment and decline appointing such
legal counsel, such independent certified public accountants as promptly
mutually agreed on in good faith by Employer and Executive) (the "Accountant"),
deliver a written opinion to Executive, reasonably satisfactory to Executive's
legal counsel, that Executive has a reasonable basis to claim that the Covered
Payments (in whole or in part) (A) do not constitute "parachute payments," (B)
represent reasonable compensation for services actually rendered (within the
meaning of Section 280G(b)(4) of the Code) in excess of the "base amount"
allocable to such reasonable compensation, or (C) such "parachute payments" are
otherwise not subject to such Excise Tax (with appropriate legal authority,
detailed analysis and explanation provided therein by the Accountant); and (ii)
the value of any Covered Payments which are non-cash benefits or deferred
payments or benefits shall be determined by the Accountant in accordance with
the principles of Section 280G of the Code.
(c) For purposes of determining the amount of the Tax Reimbursement
Payment, Executive shall be deemed: (i) to pay federal, state and/or local
income taxes at the highest applicable marginal rate of income taxation for the
calendar year in which the Tax Reimbursement Payment is made or is to be made,
and (ii) to have otherwise allowable deductions for federal, state and local
income tax purposes at least equal to those disallowed due to the inclusion of
the Tax Reimbursement Payment in Executive's adjusted gross income.
(d) (i) (A) In the event that prior to the time Executive has filed any
of Executive's tax returns for the calendar year in which the change in
ownership event covered by Code Section 280G(b)(2) occurred, the Accountant
determines, for any reason whatsoever, the correct amount of the Tax
Reimbursement Payment to be less than the amount determined at the time the Tax
Reimbursement Payment was made, Executive shall repay to the employer, at the
time that the amount of such reduction in Tax Reimbursement Payment is
determined by the Accountant, the portion of the prior Tax Reimbursement Payment
attributable to such reduction (including the portion of the Tax Reimbursement
Payment attributable to the Excise Tax and federal, state and local income tax
imposed on the portion of the Tax Reimbursement Payment being repaid by
Executive, using the assumptions and methodology utilized to calculate the Tax
Reimbursement Payment (unless manifestly erroneous)), plus interest on the
amount of such repayment at the rate provided in section 1274(b)(2)(B) of the
Code.
(B) In the event that the determination set forth in (A) above is
made by the Accountant after the filing by Executive of any of Executive's tax
returns for the calendar year in which the change in ownership event covered by
Code Section 280G(b)(2) occurred but prior to
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one (1) year after the occurrence of such change in ownership, Executive shall
file at the request of Employer an amended tax return in accordance with the
Accountant's determination, but no portion of the Tax Reimbursement Payment
shall be required to be refunded to Employer until actual refund or credit of
such portion has been made to Executive, and interest payable to Employer shall
not exceed the interest received or credited to Executive by such tax authority
for the period it held such portion (less any tax Executive must pay on such
interest and which Executive is unable to deduct as a result of payment of the
refund).
(C) In the event Executive receives a refund pursuant to (B) above
and repays such amount to Employer, Executive shall thereafter file for any
refunds or credits that may be due to Executive by reason of the repayments to
Employer. Executive and Employer shall mutually agree upon the course of action,
if any, to be pursued (which shall be at the expense of Executive) if
Executive's claim for such refund or credit is denied.
(ii) In the event that the Excise Tax is later determined by the
Accountant or the Internal Revenue Service to exceed the amount taken into
account hereunder at the time the Tax Reimbursement Payment is made (including
by reason of any payment the existence or amount of which cannot be determined
at the time of the Tax Reimbursement Payment), Employer shall make an additional
Tax Reimbursement Payment in respect of such excess (plus any interest or
penalties payable with respect to such excess) once the amount of such excess is
finally determined.
(iii) In the event of any controversy with the Internal Revenue
Service (or other taxing authority) under this Section 6, subject to the second
sentence of subpart (i)(C) above, Executive shall permit Employer to control
issues related to this Section 6 (at its expense), provided that such issues do
not potentially materially adversely affect Executive, but Executive shall
control any other issues. In the event the issues are interrelated, Executive
and Employer shall in good faith cooperate so as not to jeopardize resolution of
either issue, but if the parties cannot agree Executive shall made the final
determination with regard to the issues. In the event of any conference with any
taxing authority as to the Excise Tax or associated income taxes, Executive
shall permit the representative of Employer to accompany Executive, and
Executive and Executive's representative shall cooperate with Employer and its
representative.
(iv) With regard to any initial filing for a refund or any other
action required pursuant to this Section 6 (other than by mutual agreement) or,
if not required, agreed to by Employer and Executive, Executive shall cooperate
fully with Employer, provided that the foregoing shall not apply to actions that
are provided herein to be at Executive's sole discretion.
(e) The Tax Reimbursement Payment, or any portion thereof, payable by
Employer shall be paid not later than the fifth (5th) day following the
determination by the Accountant, and any payment made after such fifth (5th)
day shall bear interest at the rate provided in Code Section 1274(b)(2)(B).
Employer shall use its best efforts to cause the Accountant to promptly deliver
the initial determination required hereunder and, if not delivered, within
ninety (90) days after the change in ownership event covered by Section
280G(b)(2) of the Code, Employer shall pay
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Executive the Tax Reimbursement Payment set forth in an opinion from counsel
recognized as knowledgeable in the relevant areas selected by Executive, and
reasonably acceptable to Employer, within five (5) days after delivery of such
opinion. In accordance with Section 12(g), Employer may withhold from the Tax
Reimbursement Payment and deposit into applicable taxing authorities such
amounts as they are required to withhold by applicable law. To the extent that
Executive is required to pay estimated or other taxes on amounts received by
Executive beyond any withheld amounts, Executive shall promptly make such
payments. The amount of such payment shall be subject to later adjustment in
accordance with the determination of the Accountant as provided herein.
(f) Employer shall be responsible for all charges of the Accountant and if
(e) is applicable the reasonable charges for the opinion given by Executive's
counsel.
(g) Executive and Employer shall mutually agree on and promulgate further
guidelines in accordance with the Section 6 to the extent, if any, necessary to
effect the reversal of excessive or shortfall Tax Reimbursement Payments. The
foregoing shall not in any way be inconsistent with Section 6(d)(i)(C) hereof.
SECTION 7. CONFIDENTIALITY AND COOPERATION.
(a) Cooperation. Executive agrees that, at all times following
Termination, Executive will furnish such information and render such assistance
and cooperation as may reasonably be requested in connection with any litigation
or legal proceedings concerning the Company, any of its subsidiaries or
affiliates or Equistar (other than any legal proceedings arising out of or
concerning Executive's employment or its Termination). In connection with such
cooperation, Employer will pay or reimburse Executive for reasonable expenses.
(b) Release of Liability. Executive hereby represents and covenants that
prior to the time he is eligible to receive any payments provided for in Section
2 of this Agreement, he will execute and deliver to the Employer, on a form
reasonably satisfactory to Employer and the Executive, a separate release and
waiver, which, without limiting the generality of the foregoing, shall include a
release and discharge of the Company, its subsidiaries and affiliates or
Equistar, and its and their directors, Partnership Governance Committee,
officers, employees, owners, agents, successors and assigns from any and all
suits, causes of action, demands, claims, charges, complaints, liabilities,
costs, losses, damages, injuries, bonds, judgments, attorneys' fees and
expenses, in any form whatsoever, in law or in equity, whether known or unknown,
whether suspect or unsuspected, arising out of Executive's employment with
Company or with Equistar through his Termination, including, without limitation,
claims arising under any federal, state or local law for breach of an implied
covenant of good faith and fair dealing, breach of contract, defamation,
slander, negligent misrepresentation, fraud, intentional or negligent
interference with business relations, and employment discrimination, including,
but not limited to, claims under the Age Discrimination in Employment Act, the
Americans with Disabilities Act and the Texas Commission on Human Rights Act,
except to the extent that Executive's rights are vested under the terms of
employee benefit plans
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sponsored by Equistar or the Company and except with respect to such rights or
claims (other than agreements herein to perform future employment-related
actions) as may arise after termination.
SECTION 8. TERM OF AGREEMENT. This Agreement shall remain in effect until
three (3) years from the date of Executive's employment by Equistar, unless
otherwise terminated by resolution of the Company's Board of Directors prior to
Executive's employment by Equistar. Employer shall notify Executive in writing
of the effective date of termination if the Company's Board determines to
terminate this Agreement. It is the Employer's intention to provide or cause to
be provided to Executive the benefits set forth herein if Executive is
terminated from employment by Equistar and the other applicable conditions are
satisfied.
SECTION 9. INDEMNIFICATION. (a) The Company and Equistar, jointly and
severally, agree that if Executive is made a party to or threatened to be made a
party to any action, suit or proceeding, whether civil, criminal, administrative
or investigative (a "Proceeding"), by reason of the fact that Executive is or
was a director or officer of the Company, Equistar, and/or any other affiliate
of any of such companies, or is or was serving at the request of any of such
companies as a director, officer, member, employee, fiduciary or agent of
another corporation or of a partnership, joint venture, trust or other
enterprise, including, without limitation, service with respect to employee
benefit plans, whether or not the basis of such Proceeding is alleged action in
an official capacity as a director, officer, member, employee, fiduciary or
agent, Executive shall be indemnified and held harmless by the Company and
Equistar to the fullest extent authorized by Texas law (or, if different, the
law applicable to such company), as the same exists or may hereafter be amended,
against all Expenses incurred or suffered by Executive in connection therewith,
and such indemnification shall continue as to Executive even if Executive has
ceased to be an officer, director, member, fiduciary or agent, or is no longer
employed by Employer, and shall inure to the benefit of Executive's heirs,
executors and administrators. With respect to the obligations set forth in this
Section 9, the Company and Equistar shall become liable hereunder with respect
to any Proceeding which arises out of or relates to events occurring on or after
July 1, 1996, except to the extent that the liability relates to service with or
for another assignee under Section 12(f) hereof (in which case such assignee
shall be liable).
(b) As used in this Agreement, the term "Expenses" shall include, without
limitation, damages, losses, judgments, liabilities, fines, penalties, excise
taxes, settlements and reasonable costs, reasonable attorneys' fees, reasonable
accountants' fees, and reasonable disbursements and costs of attachment or
similar bonds, investigations, and any reasonable expenses of establishing a
right to indemnification under this Agreement.
(c) Expenses incurred by Executive in connection with any Proceeding shall
be paid by the Company and Equistar in advance upon Executive's request and the
giving by Executive of any undertakings required by applicable law.
(d) Executive shall give the Company and Equistar prompt notice of any
claim made against Executive for which indemnity will or could be sought under
this Agreement. In addition,
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Executive shall give the Company and Equistar such information and cooperation
as they may reasonably require and as shall be within Executive's power and at
such times and places as are reasonably convenient for Executive.
(e) With respect to any Proceeding as to which Executive notifies the
Company and Equistar of the commencement thereof: (i) the Company and/or
Equistar will be entitled to participate therein at their own expense; and (ii)
except as otherwise provided below, to the extent that they may wish, the
Company and/or Equistar, jointly with any other indemnifying party similarly
notified, will be entitled to assume the defense thereof. Executive also shall
have the right to employ Executive's own counsel in such Proceeding and the fees
and expenses of such counsel shall be at the expense of Employer.
(f) The Company and Equistar shall not be liable to indemnify Executive
under this Agreement for any amounts paid in settlement of any Proceeding
effected without its written consent. Neither the Company nor Equistar shall
settle any Proceeding in any manner which would impose any penalty or limitation
on Executive without Executive's written consent. Neither the Company, Equistar
nor Executive will unreasonably withhold or delay their consent to any proposed
settlement.
(g) The right to indemnification and the payment of expenses incurred in
defending a Proceeding in advance of its final disposition conferred in this
Section 9 shall not be exclusive of any other right which Executive may have or
hereafter may acquire under any statute, provision of the certificate of
incorporation or by-laws of the Company, agreement, vote of stockholders or
disinterested directors or otherwise.
SECTION 10. ARBITRATION.
(a) Arbitrable Matters. Any dispute under this Agreement arising between
the parties shall be settled by binding arbitration. In the event of any dispute
between Executive and Employer hereunder, either party shall be entitled to
submit the dispute to arbitration. The arbitration proceeding shall be held in
Houston, Texas (unless otherwise mutually agreed by the parties), and shall be
conducted in accordance with the Center for Public Resources ("CPR") Rules for
Non-Administered Arbitration of Business Disputes. The arbitration shall be
conducted by a sole arbitrator appointed in accordance with the rules
established by CPR (the "Arbitrator").
Any arbitration between Executive and Employer pursuant to this Agreement
shall be governed by the United States Arbitration Act, 9 U.S.C. (S)(S) 1-16 (or
its successor). If the United States Arbitration Act is determined by the
Arbitrator not to apply to this type of employer/employee agreement based on
precedential legal authority, the parties agree to arbitrate any dispute under
the Texas General Arbitration Act, V.A.T.S. Art. 238-6 et. seq. (or its
successor).
(b) Submission to Arbitration. The party submitting any matter arising out
of this Agreement to arbitration (the "demanding party") shall do so by
delivering written notice thereof
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(the "arbitration notice") to the other party (the "noticed party"). In addition
to indicating the demanding party's intention to commence arbitration
proceedings, the arbitration notice shall state the nature, with reasonable
detail, of the dispute and the demanding party's claim or claims, the question
or questions to be submitted for decision or award by arbitration and the relief
or remedy sought. A copy of the arbitration notice shall be concurrently
provided to CPR, along with a copy of this Agreement and a request to appoint an
Arbitrator. Either party may bring an action in any court of competent
jurisdiction to compel arbitration under this Agreement.
(c) Arbitration Procedures. The Arbitrator shall apply the substantive law
(and the law of remedies, if applicable) of the State of Texas as applicable to
the claim asserted. The Federal Rules of Evidence shall apply. The Arbitrator
shall have no authority to change this Agreement unless otherwise agreed by both
parties. The Arbitrator, and not any federal, state, or local court or agency,
shall have exclusive authority to resolve any dispute relating to the
interpretation, applicability, enforceability or formation of this Agreement,
including but not limited to any claim that all or any part of this Agreement is
void or voidable. Any party may be represented by an attorney or other
representative selected by the party.
The Arbitrator shall have jurisdiction to hear and rule on pre-hearing
disputes and is authorized to hold pre-hearing conferences by telephone or in
person as the Arbitrator deems necessary. The Arbitrator shall have the
authority to entertain a motion to dismiss and/or a motion for summary judgment
by any party and shall apply the standards governing such motions under the
Federal Rules of Civil Procedure.
At any time after the date of receipt of the arbitration notice, each party
can make discovery requests of the other in any form permitted under the Federal
Rules of Civil Procedure. The recipient of a discovery request shall have
twenty (20) days after the receipt of such request to object to any or all
portions of such request, and shall respond to any portions of such request not
so objected to within thirty (30) days of the receipt of such request. All
objections shall be in writing and shall indicate the reasons for such
objections. The objecting party shall insure that all objections and responses
are received by other parties within the above time periods. Any party seeking
to compel discovery following receipt of an objection shall file with the other
party and the Arbitrator a motion to compel, including a copy of the initial
request and the objection. The Arbitrator shall allow ten (10) days for
responses to the motion to compel before ruling. Claims of privilege and other
objections shall be determined as they would in federal court in a case applying
Texas law.
At least thirty (30) days before the arbitration, the parties must exchange
lists of witnesses, including any expert witnesses, and copies of all exhibits
intended to be used at the arbitration. Each party shall have the right to
subpoena witnesses and documents for the arbitration. Either party may arrange
for a court reporter to provide a stenographic record of proceedings. The cost
of the court reporter will be paid by the Company or Equistar.
(d) Compliance with Decisions. To the extent permissible under applicable
law, the parties agree that the award of the Arbitrator shall be final and
binding and shall be subject only to
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the judicial review permitted by the United States Arbitration Act or other
applicable arbitration law pursuant to Section 10(a) hereof. Judgment on the
arbitration award may be entered and enforced in any court having jurisdiction
over the parties or their assets. It is the intent of the parties that the
arbitration provisions hereof be enforced to the fullest extent permitted by
applicable law.
(e) Costs and Expenses. The Employer shall promptly pay or reimburse
Executive for all costs and expenses, including, without limitation, attorneys'
fees and witnesses' fees, incurred by Executive as a result of any arbitration
(regardless of the outcome thereof) arising out of this Agreement. All expenses
of such arbitration, including the reasonable fees and expenses of legal counsel
for Executive and the costs and expenses incurred by the Arbitrator, shall be
borne by Employer.
SECTION 11. NOTICES. All notices, requests, demands and other
communications required or permitted to be given hereunder (hereinafter referred
to as "notices") shall be in writing and shall be deemed to have been duly given
if delivered by-hand, given by prepaid telecopy, telex or telegram, or mailed
via certified or registered U.S. mail, to the party to receive such notice at
such party's address set forth below; provided that either party may change its
address for notice by giving to the other party written notice of such change.
If to Company:
Millennium Petrochemicals Inc.
11500 North Lake Drive
Cincinnati, OH 45249
Attn: President
With a copy to:
Millennium Petrochemicals Inc.
99 Wood Ave S.
Iselin, NJ 08830
Attn: General Counsel
If to Equistar:
1221 McKinney Street
Houston, Texas 77010
Attn: Partnership Governance Committee
If to Executive:
The last address on the books of the Employer.
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Any notice given pursuant to this Agreement shall be deemed received (i) if
delivered by-hand, when delivered; (ii) if sent by telecopy, telex or telegram,
24 hours after sending; and (iii) if mailed, when delivered.
SECTION 12. MISCELLANEOUS.
(a) Assignment. No right, benefit or interest hereunder shall be subject
to assignment, anticipation, alienation, sale, encumbrance, charge, pledge,
hypothecation or set-off in respect of any claim, debt or obligation, or to
execution, attachment, levy or similar process; provided, however, that
Executive may assign any right, benefit or interest hereunder if such assignment
is permitted under the terms of any plan or policy of insurance, or annuity
contract governing such right, benefit or interest.
(b) Construction of Agreement. Nothing in this Agreement shall be
construed to amend any provision of any plan or policy of the Company or
Equistar except as otherwise expressly noted herein. This Agreement is not, and
nothing herein shall be deemed to create, a commitment of continued employment
of Executive by the Company or any of its subsidiaries or by Equistar. The
Employer reserves the right to terminate Executive's employment at any time with
or without Cause, subject to the payment provisions hereof. Executive
acknowledges that he is aware that he shall have no claim against the Company or
Equistar hereunder or for deprivation of the right to receive the amounts
hereunder as a result of any termination that does not specifically satisfy the
requirements hereof. The foregoing shall not affect Executive's rights under any
other agreement with the Company or Equistar. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. Whenever
the context of this Agreement so requires, the masculine gender includes the
feminine gender, and words used in the singular or plural will include the
other. The words "herein" "hereunder" and other similar compounds of the word
"here" refer to the entire Agreement and not to any particular section or
provision.
(c) Amendment. This Agreement may not be amended, modified or canceled
except by written agreement of the parties or their respective successors and
legal representatives.
(d) Waiver. No provision of this Agreement may be waived except by a
writing signed by the party to be bound thereby.
(e) Severability. In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, the
remaining provisions of this Agreement shall remain in full force and effect to
the fullest extent permitted by law.
(f) Successors. This Agreement is personal to Executive and without the
prior written consent of the Company or Equistar shall not be assignable by
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. The Company will require Equistar to assume this
Agreement on Executive's employment with Equistar, and to agree to perform this
Agreement in the
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same manner and to the same extent that the Company would be required to perform
this Agreement if no such succession had taken place. Failure of the Company to
obtain such assumption and agreement shall constitute a breach of this Agreement
and shall entitle Executive to compensation from the Company in the same amount
and on the same terms as he would be entitled hereunder with respect to
Constructive Termination for Good Reason.
This Agreement shall be binding upon and inure to the benefit of the
Company, Equistar and any successor organization or organizations which shall
success to substantially all of the business and/or assets of the Company
(whether direct or indirect by means of merger, consolidation, acquisition of
substantially all the assets of the of the Company, or otherwise, including by
operation of law).
(g) Taxes. Any payment or delivery required under this Agreement shall be
subject to all requirements of the law with regard to withholding of taxes,
filing, making of reports and the like.
(h) Governing Law. THIS AGREEMENT SHALL BE GOVERNED AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS, WITHOUT GIVING EFFECT TO ITS
CONFLICTS OF LAW PRINCIPLES.
(i) Entire Agreement. Except as otherwise provided in Section 4 hereof,
this Agreement sets forth the entire agreement and understanding of the parties
hereto with respect to the matters covered hereby.
(j) Independent Representation. Executive acknowledges that he has been
advised by the Company to have the Agreement reviewed by independent counsel and
has been given the opportunity to do so.
[END OF PAGE]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the ____
day of ________________________, 19___.
MILLENNIUM PETROCHEMICALS INC.
By:
---------------------------
Name:
Title:
EXECUTIVE
By:
---------------------------
ACCEPTED AND AGREED BY:
EQUISTAR CHEMICALS, LP
By:
-----------------------------
Name:
Title:
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