EXHIBIT 10.23
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") is made and
entered into as of June 22, 1998 by and between UCAR INTERNATIONAL INC., a
Delaware corporation (the "Company"), and GILBERT E. PLAYFORD, an individual
residing in Vero Beach, Florida (the "Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to employ the Executive, and the
Executive desires to be employed, as the Company's President and Chief Executive
Officer on the terms and conditions set forth herein;
NOW, THEREFORE, the Company and the Executive, each intending
to be legally bound, hereby mutually covenant and agree as follows:
ARTICLE 1
DEFINITIONS
Defined terms used in this Agreement shall have the meanings
set forth below:
1.1 "ACCRUED OBLIGATIONS" shall mean, as of the date of
Termination of Employment, the sum of (A) the Executive's Starting Salary
through such date to the extent not theretofore paid, (B) the amount of any
bonus, incentive compensation, deferred compensation and other cash compensation
payable to the Executive as of such date but not yet paid, and (C) any vacation
pay, expense reimbursements and other cash entitlement accrued by the Executive
as of such date to the extent not theretofore paid.
1.2 "BANKRUPTCY" shall mean the commencement of a voluntary or
involuntary proceeding in a court of competent jurisdiction with respect to the
Company seeking relief under any federal or state bankruptcy, insolvency or
similar law, provided that such proceeding shall
have continued undismissed for 120 days or an order approving such proceeding
shall have been entered.
1.3 "STARTING SALARY" shall mean the amount set forth in
Section 3.1.
1.4 "BONUS PLAN" shall mean the cash bonus plan described in
Section 3.2(a).
1.5 "BOARD" shall mean the Board of Directors of the Company.
1.6 "CAUSE" shall mean (i) gross neglect or willful and
continuing refusal by the Executive to substantially perform his duties (other
than due to Disability), (ii) breach of Section 4.2, (iii) willful engagement in
conduct which is demonstrably injurious to the Company or its Subsidiaries
(including, without limitation, a breach of Section 4.1) or (iv) conviction or
plea of nolo contendere to a felony or a misdemeanor involving moral turpitude.
1.7 "CHANGE IN CONTROL" shall mean:
(a) the date that any "person" (as such term is used in
Section 13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) is or becomes the beneficial owner (as defined below, except
that such person shall be deemed to have "beneficial ownership" of all shares
that any such person has the right to acquire, whether such right is exercisable
immediately or only after the passage of time), directly or indirectly, of more
than 35% of the total voting power of the Company; or
(b) the date, following the expiration of any period of
two consecutive years, that individuals, who at the beginning of such period
constituted the Board (together with any new directors whose election by the
Board or whose nomination for election by the shareholders of the Company was
approved by a vote of 66-2/3% of the directors of the Company then still in
office who were either directors at the beginning of such period or whose
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election or nomination for election was previously so approved) cease for any
reason to constitute a majority of the Board then in office.
For purposes of clause (a), "beneficial owner" has the same meaning as defined
in Rules 13d-3 and 13d-5 under the Exchange Act, which shall in any event
include having the power to vote (or cause to be voted at such person's
direction) pursuant to contract, irrevocable proxy or otherwise, directly or
indirectly, voting power of the Company.
1.8 "COMPETITOR" shall have the meaning set forth in Section
4.2.
1.9 "CONFIDENTIAL INFORMATION" shall have the meaning set
forth in Section 4.1.
1.10 "DISABILITY" shall mean the inability of the Executive to
perform in all material respects his duties and responsibilities to the Company
or any Subsidiary by reason of a physical or mental disability or infirmity
which inability is reasonably expected to be permanent and has continued (i) for
a period of six consecutive months or (ii) such shorter period as the Company
may determine. The Executive (or his representative) shall furnish the Company
with satisfactory medical evidence documenting the Executive's disability or
infirmity.
1.11 "GOOD REASON" shall mean any (i) reduction in the
Executive's Starting Salary or opportunity to participate as set forth herein in
the Bonus Plan, (ii) a material adverse change in the UCAR Carbon Retirement
Plan, the UCAR Carbon Company Inc. Supplemental Retirement Income Plan, the
Equalization Benefit Plan for Participants of UCAR Carbon Retirement Plan or the
UCAR International Inc. Benefit Security Trust Agreement (as in effect on the
date hereof), (iii) relocation of the Participant's principal place of business
to a location which is more than 50 miles from its current location (without the
Executive's consent) or (iv) a material diminution in the Executive's duties,
responsibilities or reporting position as described in Article 2 (unless due to
a promotion or other increased responsibility).
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1.12 "RETIREMENT" shall mean the voluntary resignation of the
Executive when eligible to receive a pension benefit under the UCAR Carbon
Retirement Plan.
1.13 "SEVERANCE AMOUNT" shall mean an amount equal to the sum
of Starting Salary plus the Bonus Award, which sum shall be multiplied by 2.99.
The "BONUS AWARD" is the bonus amount paid or payable under the Bonus Plan for
the calendar year ending on or before the date of Termination of Employment.
1.14 "SUBSIDIARY" shall mean any corporation, over 50% of the
voting stock of which is owned by the Company.
1.15 "TERM" shall mean the term of this Agreement as set forth
in Section 2.2, and shall include any renewal period described therein.
1.16 "TERMINATION OF EMPLOYMENT" shall mean the Executive's
death or Disability, termination by the Company of the Executive's employment
for Cause or without Cause, resignation by the Executive from the employ of the
Company for Good Reason or without Good Reason, Retirement of the Executive, or
termination of the Executive's employment at the end of the Term.
ARTICLE 2
EMPLOYMENT AND TERM
2.1 EMPLOYMENT. The Company hereby offers to employ the
Executive as the President and Chief Executive Officer of the Company, and the
Executive hereby accepts such employment, for the Term.
2.2 TERM. The term of this Agreement shall commence on the
date hereof and shall end, unless extended as hereinafter provided, on the fifth
anniversary of the date hereof. The term of this Agreement shall be extended
automatically for successive additional one-year periods at the end of such
five-year period and of each such renewal period, unless, no later than
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ninety days prior to any such renewal date, the Board gives written notice to
the Executive that the term of this Agreement shall not be so extended or
unless, no later than two years prior to any such renewal date, the Executive
gives written notice to the Board that the term of this Agreement shall not be
so extended.
2.3 DUTIES. During the Term, unless otherwise agreed in
writing by the parties, the Executive shall have all powers and duties
consistent with his position as set forth in Section 2.1.
ARTICLE 3
COMPENSATION AND BENEFITS
3.1 STARTING SALARY. For services performed by the Executive
for the Company pursuant to this Agreement, the Company shall pay the Executive
the Starting Salary in the amount of $500,000 per year (which may be increased
by the Board, in its discretion, and references herein to Starting Salary and in
other documents to base salary shall mean such amount as so increased) payable
in accordance with the Company's regular payroll practices. Any compensation
which may be paid to the Executive under any additional compensation or
incentive plan of the Company or which may be otherwise authorized from time to
time by the Board in its discretion (or an appropriate committee thereof) shall
be in addition to the Starting Salary.
3.2 ANNUAL BONUSES. The Executive shall be entitled to
participate in the UCAR International Inc. Officers Incentive Plan in accordance
with its terms, with a target award of 60% of the greater of target salary
midpoint or actual salary.
3.3 OTHER BENEFITS. In addition to the Starting Salary and
participation in the Bonus Plan, the Executive shall also be entitled to the
following:
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(a) STOCK OWNERSHIP. The Executive and the Company have
on the date hereof entered into a Non-Qualified Stock Option Agreement.
(b)PARTICIPATION IN BENEFIT PLANS. The Executive shall be
entitled to participate in the benefit arrangements (including, without
limitation, future long-term incentive and stock option plans) maintained by the
Company for its executives at a level commensurate with his position. The
Executive shall also be entitled to participate in all other welfare and benefit
plans maintained by the Company for its employees generally.
(c) PRIOR SERVICE. Notwithstanding Section 3.3(b), (1)
for the purpose of calculating the Executive's benefits under the Company's
retirement plans, the Executive shall earn (ratably over the five year period
following the date hereof) service credit (a) for his employment with Union
Carbide Corporation ("Union Carbide") for the period from January 1, 1972
through January 31, 1996 plus (b) for the period from February 1, 1996 through
the date hereof (which together total 26.5 years and is called the "Prior
Service") in addition to the service credit which he earns for the period of his
employment with the Company and (2) the amount of benefits receivable by the
Executive under the Company's retirement plans shall be likewise ratably offset
by the amount of benefits receivable by the Executive under retirement plans of
Union Carbide. Prior Service and such offset shall be earned and applied as
follows: on each anniversary of the date hereof, one-fifth (1/5) of the Prior
Service will be earned (i.e., recognized) and one-fifth (1/5) of the offset will
apply. For example, after three years of credited service with the Company,
sixty percent (60%) of the Prior Service will be recognized and the Executive's
retirement benefits from the Company will be subject to an offset of sixty
percent (60%) of the Executive's retirement benefits from Union Carbide.
Accordingly, the Prior Service will be fully recognized, and the entire
retirement benefits from Union Carbide will be
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applied as an offset, as of the fifth anniversary of the date hereof. The
Company will make adjustments under its non-qualified retirement plans as
necessary to give effect to the foregoing. A further example of these
calculations has been separately provided to the Executive. The provisions of
this Section 3.3(c) are subject to the provisions of Sections 5.3(b) and 5.3(c).
(d) VACATION. The Executive shall be entitled to 5 weeks
vacation annually and paid holidays consistent with the Company's policies
applicable to executives.
ARTICLE 4
COVENANTS OF THE EXECUTIVE
4.1 CONFIDENTIALITY. The Executive acknowledges that, as a consequence of his
employment and position with the Company, the Executive will have access to and
become acquainted with confidential information of the Company and its
Subsidiaries. During the Term and at all times thereafter, the Executive shall
not, without the prior written consent of the Company, use, divulge, disclose or
make accessible to any other person, firm, partnership, corporation or other
entity any Confidential Information (as defined below) pertaining to the
business of the Company or any of its Subsidiaries, except while employed by the
Company, in the business of and for the benefit of the Company or any
Subsidiary. For purposes of this Section 4.1, "Confidential Information" shall
mean non-public (i) trade secrets, financial data, strategic business plans,
customer lists, sales and marketing information and plans and (ii) any other
technical, creative, proprietary and confidential information of the Company and
its Subsidiaries that is material to the business of the Company or its
Subsidiaries, which information described in either (i) or (ii) above was not
lawfully obtained by the Executive from a source independent of the Company or
its Subsidiaries or was not obtained in violation of such source's contractual
or other legal obligations or duties.
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4.2 NON-COMPETITION. The Executive shall not, during the Term
and for a period of two years following the Term, directly or indirectly (a)
own, manage, operate, join or control, or participate (or serve as a consultant
or similar position) in the ownership, management, operation or control of, any
business, entity, firm, partnership, corporation or other person, whether
private, governmental or quasi-governmental, which is engaged, directly or
indirectly, in the business of manufacturing or selling graphite or carbon
electrodes or any other business engaged in or being developed by the Company at
the time of the Executive's Termination of Employment (a "Competitor"), or (b)
solicit any person who is (or was during the six months prior to the Executive's
Termination of Employment) an employee of the Company to become an employee,
agent or independent contractor of a Competitor or any other business, or (c)
solicit any customer of the Company on behalf of any Competitor or any other
business; provided, however, that nothing in this Agreement shall preclude the
Executive from serving on the board of directors of any company with the prior
consent of the Company or managing his personal investments which do not exceed
5% of the equity of any Competitor (so long as, in the reasonable determination
of the Company, such activity does not materially interfere with his duties and
responsibilities hereunder).
4.3 ENFORCEMENT.
(a) The Executive agrees that the remedy at law for any
breach by him of any of the covenants and agreements set forth in this Section 4
will be inadequate and that, in the event of any such breach, the Company may,
in addition to the other remedies which may be available to it at law, obtain
injunctive relief prohibiting the Executive from the breach of such covenants
and agreements.
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(b) If any of the provisions of this Agreement shall
otherwise contravene or be invalid under the laws of any state or other
jurisdiction where it is applicable but for such contravention or invalidity,
such contravention or invalidity shall not invalidate all of the provisions of
this Agreement, but rather this Agreement shall be reformed and construed,
insofar as the laws of that state or jurisdiction are concerned, as not
containing the provision or provisions, but only to the extent that they are
contravening or are invalid under the laws of that state or jurisdiction, and
the rights and obligations created hereby shall be reformed and construed and
enforced accordingly.
(c) The Executive understands that the provisions of
Section 4 hereof may limit his ability to earn a livelihood in a business
similar to the business of the Company but nevertheless agrees and hereby
acknowledges that (i) such provisions do not impose a greater restraint than is
necessary to protect the goodwill or other business interests of the Company,
(ii) such provisions contain reasonable limitations as to time and the scope of
activity to be restrained and (iii) the consideration provided under this
Agreement, including, without limitation, any amounts or benefits provided under
Section 5, is sufficient to compensate the Executive for the restrictions
contained in this Section 4. In consideration of the foregoing and in light of
the Executive's education, skills and abilities, the Executive agrees that he
will not assert that, and it should not be considered that, any provisions of
this Section 4 prevented him from earning a living or otherwise are void,
voidable or unenforceable or should be voided or held unenforceable.
(d) Each of the covenants of this Section 4 is given by
the Executive as part of the consideration for this Agreement and as an
inducement to the Company to enter into this Agreement and accept its
obligations hereunder.
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ARTICLE 5
TERMINATION
5.1 TERMINATION OF AGREEMENT. This Agreement shall terminate
at the end of the Term.
5.2 PROCEDURES APPLICABLE TO TERMINATION FOR CAUSE AND
RESIGNATION FOR GOOD REASON.
(a) TERMINATION FOR CAUSE. If the Company determines that
Cause exists, it shall notify the Executive. The Executive may be terminated for
Cause upon 30 days' prior written notice. Such termination shall be effected by
a majority vote of the Board after the Executive shall have had the opportunity
(along with counsel) to be heard, unless within 15 days after receiving such
notice the Executive shall have cured the Cause to the reasonable satisfaction
of the Board.
(b) RESIGNATION FOR GOOD REASON. The Executive must give
at least 45 days prior written notice of his intent to resign for Good Reason.
During such 45-day period, the Company shall have the opportunity to cure the
Good Reason during the first 30 days of such notice period. If no notice is
given within 45 days after the event giving rise to Good Reason, the Good Reason
shall be deemed to have been waived.
5.3 OBLIGATIONS OF THE COMPANY UPON TERMINATION OF EMPLOYMENT.
(a) ACCRUED OBLIGATIONS AND OTHER BENEFITS. In the event
of Termination of Employment for any reason, the Company shall pay to the
Executive or, in the event of the Executive's death, his heirs or estate the
following:
(i) all Accrued Obligations in a lump sum within
ten days after the date of Termination of Employment; and
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(ii) all benefits accrued by the Executive as of
the date of Termination of Employment under all qualified and
nonqualified retirement, pension, profit sharing and similar plans of
the Company to such extent, in such manner and at such time as are
provided under the terms of such plans and arrangements.
(b) TERMINATION WITHOUT CAUSE OR RESIGNATION FOR GOOD
REASON. In the event that the Company terminates the Executive's employment
during the Term without Cause (but excluding Termination of Employment by reason
of the Executive's death or disability or under the circumstances described in
Section 5.3(c)), or the Executive resigns from his employment during the Term
for Good Reason, in addition to the amounts payable under Section 5.3(a):
(i) the Company shall pay the Severance Amount to
the Executive in a lump sum within ten days after the date of
Termination of Employment;
(ii) the Executive's pension benefit under all
applicable pension plans shall be increased by the amount he would
have accrued had he had an additional three (3) years of age and an
additional three (3) years of service, and, in addition, the
Executive shall then become entitled to retire immediately and
receive a pension benefit that is not actuarially reduced for early
commencement of payment;
(iii) the Company shall continue all benefit
coverage of the Executive and his dependents provided under the
Company's benefit policies applicable to retired executives; and
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(iv) if such termination or resignation occurs
prior to the fifth anniversary of the date hereof, all Prior Service
will be fully recognized (and the entire retirement benefits from
Union Carbide will apply as an offset) as described in Section 3.3(c)
as of the date of Termination of Employment (rather than as of such
fifth anniversary).
(c) TERMINATION FOLLOWING CHANGE IN CONTROL OR
BANKRUPTCY. If the Company terminates the Executive's employment during the Term
without Cause (but excluding Termination of Employment by reason of the
Executive's death or Disability) or the Executive resigns from his employment
during the Term for Good Reason, in each case within two years after a Change in
Control or Bankruptcy, in addition to the amounts payable under Section 5.3(a):
(i) the Company shall pay to the Executive, in a
lump sum within ten days after the date of Termination of Employment,
an amount equal to the result of the multiplication of (i) the sum of
the Starting Salary plus the Bonus Award by (ii) 2.99;
(ii) the Executive's pension benefit under all
applicable pension plans shall be increased by the amount he would
have accrued had he had an additional three (3) years of age and an
additional three (3) years of service, and, in addition, the
Executive shall then become entitled to retire immediately and
receive a pension benefit that is not actuarially reduced for early
commencement of payment;
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(iii) the Company shall continue all benefit
coverage of the Executive and his dependents provided under the
Company's benefit policies applicable to retired executives; and
(iv) if such termination or resignation occurs
prior to the fifth anniversary of the date hereof, all Prior Service
will be fully recognized (and the entire retirement benefits from
Union Carbide will apply as an offset) as described in Section 3.3(c)
as of the date of Termination of Employment (rather than as of such
fifth Anniversary).
(d)TERMINATION UNDER OTHER CIRCUMSTANCES. The Executive
acknowledges that the Company's obligations hereunder upon a Termination of
Employment by reason of the Executive's death or Disability, the termination of
the Executive's employment during the Term by the Company for Cause, resignation
by the Executive from the employ of the Company during the Term without Good
Reason, Retirement of the Executive, or termination of the Executive's
employment at the end of the Term (regardless of which party gives notice of
non-renewal or the reasons therefor) are limited to those provided in Section
5.3(a).
ARTICLE 6
MISCELLANEOUS
6.1 BINDING EFFECT. This Agreement shall be binding upon and
inure to the benefit of the heirs and representatives of the Executive and the
successors and assigns of the Company. The Company shall require any successor
(whether direct or indirect, by purchase, merger, reorganization,
consolidation, acquisition of asset or stock, liquidation or otherwise), by
agreement in form and substance reasonably satisfactory to the Executive,
expressly to assume and agree to perform this Agreement in the same manner and
to the same extent that the Company would be required to perform this Agreement
if no such succession had taken place.
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Regardless whether such agreement is executed, this Agreement shall
be binding upon any successor of the Company in accordance with the operation of
law and such successor shall be deemed the "Company" for purposes of this
Agreement.
6.2 NOTICES. All notices, requests, demands and other
communications hereunder shall be in writing and shall be deemed to have been
duly given if delivered by hand or mailed within the continental United States
by first class certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Board or the Company, to:
UCAR International Inc.
39 Old Ridgebury Road, Section J4
Danbury, CT 06817
Attention: General Counsel
To the Executive, to:
Gilbert E. Playford
5200 St. Andrews Island Dr.
Grand Harbor
Vero Beach, FL 32967-7296
Such addresses may be changed by written notice sent to the other party at the
last recorded address of that party.
6.3 TAX WITHHOLDING. The Company shall provide for the
withholding of any taxes required to be withheld by federal, state and local law
with respect to any payment in cash, shares of capital stock and/or other
property made by or on behalf of the Company to or for the benefit of the
Executive under this Agreement or otherwise. The Company may, at its option: (i)
withhold such taxes from any cash payments owing from the Company to the
Executive, (ii) require the Executive to pay to the Company in cash such amount
as may be required to satisfy
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such withholding obligations and/or (iii)
make other satisfactory arrangements with the Executive to satisfy such
withholding obligations.
6.4 NO ASSIGNMENT. Except as otherwise expressly provided in
Section 6.1, this Agreement is not assignable by any party and no payment to be
made hereunder shall be subject to anticipation, alienation, sale, transfer,
assignment, pledge, encumbrance or other charge.
6.5 EXECUTION IN COUNTERPARTS. This Agreement may be executed
by the parties hereto in one or more counterparts, each of which shall be deemed
to be an original, but all such counterparts shall constitute one and the same
instrument, and all signatures need not appear on any one counterpart.
6.6 JURISDICTION AND GOVERNING LAW. Jurisdiction over disputes
with regard to this Agreement shall be exclusively in the courts of the State of
Connecticut, and this Agreement shall be construed and interpreted in accordance
with and governed by the laws of the State of Connecticut, other than the
conflict of laws provisions of such laws.
6.7 SEVERABILITY. If any provision of this Agreement shall be
adjudged by any court of competent jurisdiction to be invalid or unenforceable
for any reason, such judgment shall not affect, impair or invalidate the
remainder of this Agreement.
6.8 ENTIRE AGREEMENT. Except as otherwise provided in Section
3.3, this Agreement embodies the entire understanding of the parties hereto, and
supersedes all other oral or written agreements or understandings between them
regarding the subject matter hereof. No change, alteration or modification
hereof may be made except in a writing, signed by each of the parties hereto.
The headings in this Agreement are for convenience and reference only and shall
not be construed as part of this Agreement or to limit or otherwise affect the
meaning hereof.
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IN WITNESS WHEREOF, the parties hereto have executed and
delivered this Agreement as of the day and year first above written.
UCAR INTERNATIONAL INC.
By: /s/ Robert D. Kennedy__________________
Name: Robert D. Kennedy
Title: Chairman
/s/ Gilbert E. Playford________________
Gilbert E. Playford