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Exhibit 10.8
Millennium America Holdings Inc.
230 Half Mile Road
Red Bank, New Jersey 07701
(732) 933-5000
[Date]
[Name]
[Address]
Dear [Name]:
1. Introduction. Millennium America Holdings Inc. (the "Company") believes that
the maintenance of a sound and vital management of the Company and of Millennium
Chemicals Inc., which is the ultimate parent corporation of the Company (the
"Parent"), is essential to the protection and enhancement of the interests of
the Company, the Parent and their stockholders. The Company also recognizes that
the possibility of a Change in Control (as defined in Exhibit A) of the Parent,
with the attendant uncertainties and risks, might result in the departure or
distraction of key employees of the Company to the detriment of the Company, the
Parent and their shareholders. In light of the possibility of a Change in
Control of the Parent, the Company has determined that it is appropriate to
induce key employees to remain with the Company, and to reinforce and encourage
their continued attention and dedication. Accordingly, upon your written
acceptance of the terms of this agreement (the "Agreement") evidenced by your
signing below, the Company intends to provide you the protections set forth
herein as of the date first written above (the "Effective Date"). This Agreement
shall replace the prior agreement regarding change in control of the Parent and
the Company dated [Date], as amended, by and between you and the Company, and
said prior agreement is hereby rendered null and void and shall no longer have
any force and effect. [Not in new hire employee's agreement.]
2. Effective Date and Term. This Agreement shall expire on the earliest of (i)
the Termination Date, as defined herein provided that if a Change in Control
takes place prior to the Termination Date, the duration of this Agreement shall
be until two (2) years after the Change in Control; (ii) the date of your death
or termination as a result of Disability (as defined herein), your retirement or
other termination of your employment with the Company prior to a Change in
Control (except as otherwise provided in Section 3 herein), other than by the
Company without Cause (as defined in Section 5 herein) or by you for Good Reason
(as defined in Section 4 herein); or (iii) one hundred and eighty (180) days
after the date of your employment is terminated by the Company without Cause or
by you for Good Reason. The Termination Date shall initially be September 30,
2003 and shall automatically be extended for successive one (1) year periods as
of September 30, 2003 and as of each anniversary of the Termination Date, unless
notice is given in writing to you by the Company at least 180 days prior to
September 30, 2003, or any such anniversary of the Termination Date, of its
intention to not extend the Termination Date. Notwithstanding anything in this
Agreement to the contrary, if the Company becomes obligated to make any
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payment or provide any benefit to you pursuant to the terms hereof at or prior
to the expiration of this Agreement, then this Agreement shall remain in effect
for such purposes until all of the Company's obligations hereunder are
fulfilled. Disability for purposes of this Agreement shall mean your inability
to perform your 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 you are terminated by
the Company by written notice while you remain disabled.
3. Termination Following a Change in Control. If a Change in Control occurs and
your employment is terminated by the Company without Cause (other than for
Disability) or you terminate employment with the Company for Good Reason, during
the period running from the date of the Change in Control to two (2) years after
the date of such Change in Control, then you shall be entitled to the amounts
and benefits provided in Section 6 herein upon such termination. In addition,
notwithstanding the foregoing, in the event you are either terminated by the
Company without Cause other than for Disability or terminate your employment for
Good Reason within one hundred and eighty (180) days prior to the occurrence of
a Change in Control (based on an event that occurred within such one hundred and
eighty (180) day period prior to the occurrence of a Change in Control), such
termination shall, upon the occurrence of a Change in Control, be deemed to be
covered under this Agreement and you shall be entitled to the amounts payable
hereunder.
4. Termination for Good Reason. A termination for Good Reason for purposes of
this Agreement shall mean a termination by you effected by a written notice of
termination for Good Reason given within sixty (60) days after the occurrence of
the Good Reason event. "Good Reason" shall mean the occurrence or failure to
cause the occurrence, as the case may be, without your express written consent,
of (i) any material diminution of your positions, duties or responsibilities
with the Company or the Parent from the highest position held within one hundred
and eighty (180) days prior to a Change in Control (except in connection with
the termination of your employment for Cause, Disability, as a result of your
death, or temporarily as a result of your illness or other absence) or the
assignment to you of duties or responsibilities that are inconsistent with your
aforementioned highest position; (ii) your removal from, or the nonreelection to
your positions with the Parent or the Company held within one hundred and eighty
(180) days prior to a Change in Control; (iii) a relocation of the principal
United States executive offices of the Parent or the Company to a location more
than twenty-five (25) miles from where they are one hundred and eighty (180)
days prior to the Change in Control, or a relocation by the Company of your
principal office away from such principal United States executive offices; (iv)
a reduction by the Company of your rate of annual base salary to a level below
your highest rate of base salary within one hundred and eighty (180) days prior
to the Change in Control; (v) a failure by the Parent or the Company (A) to
continue any bonus plan, program or arrangement in which you were entitled to
participate during the one hundred and eighty (180) days prior to the Change in
Control (the "Bonus Plans"), provided that any such Bonus Plans may be modified
at the Parent's or the Company's discretion from time to time but shall be
deemed terminated if plans providing you with substantially similar benefits are
not substituted therefor ("Substitute Plans") or (B) to consider you 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 you immediately prior to any
change in such plans, in
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accordance with the Bonus Plans or Substitute Plans; or (vi) any breach by the
Parent or the Company of any material provision of this Agreement, unless the
applicable circumstances under (i) through (vi) are fully corrected prior to the
date of termination specified in the notice of termination for Good Reason. The
notice of termination for Good Reason shall provide for a date of termination
not less than fifteen (15) nor more than sixty (60) days after the date such
notice of termination for Good Reason is given.
5. Termination for Cause. A termination for Cause means a termination by the
Company effected by a written notice of termination for Cause. The term "Cause"
shall be limited to your: (i) willful misconduct with regard to the Company or
its business, assets or employees; (ii) refusal to follow the proper written
direction of the Board of Directors of the Company (the "Board") or a more
senior officer of the Company or the Parent, provided that the foregoing refusal
shall not be "Cause" if in good faith you believe that such direction is
illegal, unethical or immoral and you promptly so notify the Board or the more
senior officer (whichever is applicable); (iii) conviction of (or pleading of
nolo contenders to) a felony (other than a traffic violation); (iv) material
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). The date of termination for a termination
for Cause shall be the date indicated in the notice of termination.
6. Compensation on Termination. If pursuant to Section 3 you are entitled to
amounts and benefits under this Section 6, subject to Section 11, the Company
shall pay and provide to you:
(A) in a lump sum within five (5) days after such termination (or, if such
termination occurred within one hundred and eighty (180) days prior to a
Change in Control, within five (5) days after the Change in Control) the
sum of:
(i) two (2) times your highest annual base salary in effect within one
hundred and eighty (180) days prior to the Change in Control, computed
by including the amount of base salary deferred by you (voluntarily or
otherwise pursuant to the Millennium Chemicals Inc. Salary and Bonus
Deferral Plan (the "Deferral Plan"), the Millennium Savings and
Investment Plan (the "SIP"), the Millennium Chemicals Inc.
Supplemental Savings and Investment Plan (the "SSIP") or any other
agreement or plan that is or may have been in effect at the time of
such deferral) as part of the base salary for the year in which it was
accrued,
(ii) two (2) times the highest annual bonus paid or payable to you
with respect to any of the last three (3) completed fiscal years by
the Company or its predecessors or any affiliate of the Company or its
predecessors (which shall include any annual bonus payable under the
Millennium Chemicals Inc. Annual Performance Incentive Plan or the
Millennium Chemicals Inc. Omnibus Incentive Compensation Plan (the
"Omnibus Plan"), but in no event shall include amounts contributed or
allocated by the Company (or its predecessors or affiliates thereof)
on your behalf or paid to you under any supplemental executive bonus
plan or portion thereof applicable to
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you (including, without limitation, the Millennium Chemicals Inc.
Executive Long Term Incentive Plan (or awards payable under the
Omnibus Plan with reference to such plan or that are similar to awards
under such plan), the Millennium Chemicals Inc. Long Term Incentive
Plan (or awards payable under the Omnibus Plan with reference to such
plan or that are similar to awards under such plan) or any other plan
commonly referred to by the Company as a "top-hat" plan or any
long-term incentive compensation, stock option or restricted stock
offered under the Omnibus Plan or any other plan such as the
Millennium Chemicals Inc. Long Term Stock Incentive Plan)), computed
by including the amount of any annual bonus deferred by you
(voluntarily or otherwise pursuant to the Deferral Plan, SIP, SSIP or
any other agreement or plan that is or may have been in effect at the
time of such deferral) as part of the annual bonus for the year in
which it was accrued,
(iii) any unreimbursed business expenses for the period prior to
termination payable in accordance with the Company's policies, and
(iv) any base salary, bonus, vacation pay or other deferred
compensation accrued or earned under law or in accordance with the
Company's plans or policies applicable to you but not yet paid plus
(y) any and all amounts payable to you (to the extent not otherwise
paid) under the terms of the Omnibus Plan or any other incentive bonus
plan applicable to you as if the termination of your employment had
occurred due to your Retirement (provided that if the amount of such
payment can not be calculated within five days of the Change in
Control, such amount can be paid to you within five days of the
earliest date such amount can be calculated, but no later than the
date provided under the terms of such plan for payments as a result of
Retirements), and (z) the Threshold Bonus Amount, as defined below;
(B) any other amounts or benefits due under the then applicable employee
benefit incentive or equity plans of the Company applicable to you as shall
be determined and paid in accordance with such plans, except to the extent
paid pursuant to (A) above;
(C) the greater of any benefit to which you are entitled under either
clause (i) or (ii), below, whichever is greater:
(i) any defined benefit type qualified and nonqualified pension plan
or arrangement of the Company and its affiliates applicable to you;
and
(ii) the Millennium Chemicals Inc. 2003 Supplemental Executive
Retirement Plan (the "2003 SERP"), together with any defined benefit
type qualified pension plan or arrangement of the Company and its
affiliates applicable to you,
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in each case after immediately vesting your benefits under the 2003 SERP or
other nonqualified pension plan or arrangement (disregarding the vesting
requirements in such plans or arrangements), and after adding two (2) years
of additional age, service and compensation credit (using, for such
purposes, the base salary and (to the extent applicable) annual bonus
calculated under Sections 6(A)(i) and (ii), respectively, as your deemed
compensation in such years) for pension purposes under such plans or
arrangements, measured from the date of termination of employment and not
credited to the extent that you are otherwise entitled to such credit
during such two (2) year period, which payments shall be made through and
in accordance with the terms of such nonqualified defined benefit pension
plans or arrangements if any then exists, or, if not, in an actuarially
equivalent lump sum (using the actuarial factors applicable for lump sum
calculations then applying in the Company's or its affiliates defined
benefit plan covering you and your actual age on the date of the
termination of your employment except to the extent otherwise provided in
any such plan);
(D) an amount equal to the maximum amount which would be contributed by the
Company to your account balance(s) (as Company matching contributions)
under the SIP, SSIP or other qualified 401 (k) plan or nonqualified excess
401 (k) plan, assuming you deferred the maximum amount and you continued
employment for two (2) years after the date of termination of employment at
the base salary and, to the extent applicable, the annual bonus calculated
under Sections 6(A)(i) and (ii), respectively, to the extent not otherwise
contributed to such plan, payable in a lump sum at the same time payment is
made under Section 6(A) hereof;
(E) payment by the Company of the premiums for you (except in the case of
death) and your dependents' health coverage for two (2) years from the date
of termination of employment under the Company's health plans which cover
the senior executives of the Company or materially similar benefits (to the
extent not otherwise provided), provided that in the case of termination
within one hundred and eighty (180) days prior to a Change in Control, the
obligations under this subpart (E) shall only exist to the extent that you
or your dependents, as the case may be, had timely elected or timely elect
COBRA coverage which continued at the time of the Change in Control and the
obligation with regard to the period prior to the Change in Control shall
be limited to reimbursement of the COBRA premiums previously paid or due
for such period, and
(F) two (2) years of financial planning and tax preparation services on
terms substantially similar to the services that are offered to you on the
date hereof (or the economic equivalent thereof).
In calculating the amount of annual bonus "paid or payable" to you for the
purposes of Section 6(A)(ii) hereof with respect to a particular year under the
Millennium Chemicals Inc. Annual Performance Incentive Plan, the Omnibus Plan or
any similar plan, if any amount would have been paid or payable to you with
respect to such year and was not paid to you due to a limitation in such plan
(or in your award under such plan) based on meeting a threshold, then the full
amount that would have been paid or payable to you, without taking into effect
such limitation, shall be deemed to be the bonus "paid or payable" to you under
such plan with respect to such year for the purpose of calculating the amount
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of such bonus under Section 6(A)(ii) hereof. Such amount shall be referred to
herein as the "Threshold Bonus Amount." Any amendment or termination of
benefits, equity or incentive plans within one hundred and eighty (180) days
prior to, or after, a Change in Control that is detrimental to you shall be
ignored with respect to (A), (B), (C), (D) and (E) above. Payments under (E)
above may, at the discretion of the Company, be made by continuing your
participation in the plan as a terminee, by paying the applicable COBRA premium
for you and your dependents, or by covering you and your dependents under
substitute arrangements, provided that, to the extent you incur tax that you
would not have incurred as an active employee as a result of the aforementioned
coverage or the benefits provided thereunder, you shall receive from the Company
an additional payment in the amount necessary so that you will have no
additional cost for receiving such items or any additional payment. The
provision of benefits to you and your dependants under (E) above shall not
adversely affect your eligibility, or your dependents' eligibility, to receive
the retiree medical benefits that you would have been entitled to receive on the
date of your termination. Section 8 hereof shall also continue to apply in all
instances.
7. 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
you (whether pursuant to the terms of the Agreement or any other plan,
arrangement or agreement with the Company, any person whose actions result in a
change of ownership covered by Section 28OG(b)(2) of the Internal Revenue Code
of 1986, as amended (the "Code") or any person affiliated with the Company or
such person) as a result of a change in ownership of the Parent covered by Code
Section 28OG(b)(2), but not including the payment provided for in this Section 7
(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 thereon,
is hereinafter collectively referred to as the "Excise Tax"), the Company shall
pay to you an additional amount (the "Tax Reimbursement Payment") such that
after payment by you of all taxes (including, without limitation, any payroll
tax, any income tax, any interest or penalties and any Excise Tax imposed on or
attributable to the Tax Reimbursement Payment itself), you retain 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 your adjusted gross income, and (B) the highest applicable marginal
rates of federal, state or local income tax for the calendar year in which the
Tax Reimbursement Payment is made or is to be made. The intent of this Section 7
is that after paying your federal, state and local income tax and any payroll
taxes with respect to the Tax Reimbursement Payment, you will be in the same
position as if you were not subject to the Excise Tax under Section 4999 of the
Code and did not receive the extra payments pursuant to this Section 7 and this
Section 7 shall be interpreted accordingly.
(b) Except as otherwise provided in Section 7(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 28OG(b)(2) of the Code)
and such payments in excess of
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the Code Section 28OG(b)(3) "base amount" shall be treated as subject to the
Excise Tax, unless, and except to the extent that, the Company's independent
certified public accountants appointed prior to the change in ownership covered
by Code Section 28OG(b)(2) or legal counsel 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 the Company and by you) (the "Accountant"),
deliver a written opinion to you, reasonably satisfactory to your legal counsel,
that you have 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
28OG(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 28OG of the Code.
(c) For purposes of determining the amount of the Tax Reimbursement
Payment, you 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 which would be disallowed due to the
inclusion of the Tax Reimbursement Payment in your adjusted gross income.
(d) (i) (A) In the event that prior to the time you have filed any of your
tax returns for the calendar year in which the change in ownership event covered
by Code Section 28OG(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, you
shall repay to the Company, 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 and payroll tax imposed on the portion of the Tax
Reimbursement Payment being repaid by you, 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 a determination described in (A) above is
made by the Accountant after the filing by you of any of your tax returns for
the calendar year in which the change in ownership event covered by Code Section
28OG(b)(2) occurred but prior to one (1) year after the occurrence of such
change in ownership, you shall file at the request of the Company amended tax
returns in accordance with the Accountant's determination, but no portion of the
Tax Reimbursement Payment otherwise payable to the Company shall be required to
be refunded to the Company until actual refund or credit of such portion has
been made to you, and interest payable to the Company shall not exceed the
interest received or credited to you by such tax authority for the period it
held such
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portion (less any tax you must pay on such interest and which you are unable to
deduct as a result of payment of the refund).
(C) In the event you receive a refund pursuant to (B) above and
repay such amount to the Company, you shall thereafter file for any refunds or
credits that may be due to you by reason of the repayments to the Company. You
and the Company shall mutually reasonably agree upon the course of action, if
any, to be pursued (which shall be at the expense of the Company) if your 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), the Company 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 between you and the Internal
Revenue Service (or other taxing authority) that relates to the payment provided
for under this Section 7, subject to the second sentence of subpart (i)(C)
above, you shall permit the Company to control issues related to this Section 7
(at its expense), provided that such issues do not potentially materially
adversely affect you, but you shall control any other issues that you may have
with the Internal Revenue Service (or other taxing authority). In the event the
issues are interrelated, you and the Company shall in good faith cooperate so as
not to jeopardize resolution of either issue, but if the parties cannot agree
you shall make 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, you shall permit the representative of the Company to accompany
you, and you and your representative shall cooperate with the Company and its
representative.
(iv) With regard to any initial filing for a refund or any other action
required pursuant to this Section 7 (other than by mutual agreement) or, if not
required, agreed to by the Company and you, you shall cooperate fully with the
Company, and the Company shall bear the expense for the preparation of any such
filing or amended tax return, provided that the foregoing shall not apply to
actions that are provided herein to be at your sole discretion.
(e) The Tax Reimbursement Payment, or any portion thereof, payable by the
Company 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). The
Company shall use its commercially reasonable 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 28OG(b)(2) of the Code, the Company shall pay you the Tax
Reimbursement Payment set forth in an opinion from counsel recognized as
knowledgeable in the relevant areas selected by you, and reasonably acceptable
to the Company, within five (5) days after delivery of such opinion. In
accordance with Section 17, the Company may withhold from the Tax Reimbursement
Payment and deposit with the applicable taxing authorities such amounts as they
are required to withhold by
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applicable law. To the extent that you are required to pay estimated or other
taxes on amounts received by you beyond any withheld amounts, you 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) The Company shall be responsible for all charges of the Accountant and,
if Section 7(e) is applicable, the reasonable charges for the opinion given by
your counsel.
(g) You and the Company shall mutually agree on and promulgate further
guidelines in accordance with this Section 7 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 7(d)(i)(C) hereof.
8. Indemnification. (a) The Company and the Parent, jointly and severally, agree
that if you are 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 you are or were a director or officer
of the Company or the Parent or their predecessor, and/or any other affiliate of
any of such companies, or are or were 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 while serving as a director, officer, member, employee, fiduciary or
agent, you shall be indemnified and held harmless by the Company and the Parent
to the fullest extent authorized by Delaware 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 you in connection therewith, and
such indemnification shall continue as to you even if you have ceased to be an
officer, director, member, fiduciary or agent, or are no longer employed by the
company, and shall inure to the benefit of your heirs, executors and
administrators.
(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 you in connection with any Proceeding shall be
paid by the Company and the Parent in advance upon your request and the giving
by you of any undertakings required by applicable law.
(d) You shall give the Company and the Parent prompt notice of any claim
made against you for which indemnity will or could be sought under this
Agreement. In addition, you shall give the Company and the Parent such
information and cooperation as it may reasonably require and as shall be within
your power and at such times and places as are reasonably convenient for you.
(e) With respect to any Proceeding as to which you notify the Company and
the Parent of the commencement thereof: (i) the Company will be entitled to
participate therein
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at its own expense; and (ii) except as otherwise provided below, to the extent
that it may wish, the Company jointly with any other indemnifying party
similarly notified will be entitled to assume the defense thereof. You also
shall have the right to employ your own counsel in such Proceeding and the fees
and expenses of such counsel shall be at the expense of the Company.
(f) The Company and the Parent shall not be liable to indemnify you under
this Agreement for any amounts paid in settlement of any Proceeding effected in
any manner which would impose any penalty or limitation on you without its
written consent. Neither the Company nor the Parent shall settle any Proceeding
without your written consent. Neither the Company, the Parent nor you 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 8 shall not be exclusive of any other right which you 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.
9. Arbitration. Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration conducted in the City
of New York in the State of New York under the Commercial Arbitration Rules then
prevailing of the American Arbitration Association and such submission shall
request the American Arbitration Association to: (i) appoint an arbitrator
experienced and knowledgeable concerning the matter then in dispute; (ii)
require the testimony to be transcribed; (iii) require the award to be
accompanied by findings of fact and the statement for reasons for the decision;
and (iv) request the matter to be handled by and in accordance with the
expedited procedures provided for in the Commercial Arbitration Rules. The
determination of the arbitrators, which shall be based upon a de novo
interpretation of this Agreement, shall be final and binding and judgment may be
entered on the arbitrators' award in any court having jurisdiction. All costs of
the American Arbitration Association and the arbitrator shall be borne as
determined by the arbitrator.
10. Legal Fees. In the event the Company does not make the payments due
hereunder on a timely basis and you collect any part or all of the payments
provided for hereunder or otherwise successfully enforce the terms of this
Agreement by or through a lawyer or lawyers, the Company shall pay all costs of
such collection or enforcement, including reasonable legal fees and other
reasonable fees and expenses which you may incur. The Company shall pay to you
interest at the prime lending rate as announced from time to time by Citibank,
N.A. on all or any part of any amount to be paid to you hereunder that is not
paid when due. The prime rate for each calendar quarter shall be the prime rate
in effect on the first day of the calendar quarter.
11. No Duty to Mitigate/Set-off. The Company agrees that if your employment with
the Company is terminated pursuant to this Agreement during the term of this
Agreement, you shall not be required to seek other employment or to attempt in
any way to reduce any amounts payable to you by the Company pursuant to this
Agreement. Further, the amount of any payment or benefit provided for in this
Agreement shall not be reduced by any compensation earned by you or benefit
provided to you as the result of employment by
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another employer or otherwise. Except as otherwise provided herein and apart
from any disagreement between you and the Company concerning interpretation of
this Agreement or any term or provision hereof, the Company's obligations to
make the payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any circumstances, including
without limitation, any set-off, counterclaim, recoupment, defense or other
right which the Company may have against you. The amounts due under Section 6
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.
12. Successors; Binding Agreement. In addition to any obligations imposed by law
upon any successor to the Company, the Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation or otherwise) to
all or substantially all of the business and/or assets of the Company to
expressly assume and agree in writing to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform it
if no such succession had taken place and this Agreement shall inure to the
benefit of such successor. Any such assignment shall not relieve the Company
from liability hereunder, for periods prior to such assignment, but shall
relieve the Company from liability for periods after such assignment. Reference
to the Company herein shall also include any successor to the Company. This
Agreement shall inure to the benefit of and be enforceable by your personal or
legal representatives, executors, administrators, successors, heirs,
distributees, devises and legatees. If you die while any amount would still be
payable to you hereunder if you had continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of the
Agreement to the executors, personal representatives, estate trustees, or
administrators of your estate. This Agreement is personal to you and neither
this Agreement nor any rights hereunder may be assigned by you.
13. Notices. Any notice or other communication required or permitted hereunder
shall be in writing and shall be delivered personally, or sent by registered
mail, postage prepaid as follows:
(i) If to the Company or the Parent, at:
230 Half Mile Road
Red Bank, New Jersey 07701
Attention: C. William Carmean, Senior Vice President,
General Counsel and Secretary
(ii) If to you, at the last shown
address on the books of the
Company or the Parent.
Any such notice shall be deemed given when so delivered personally, or, if
mailed, five (5) days after the date of deposit (in the form of registered or
certified mail, return receipt requested, postage prepaid) in the United States
postal system. Any party may by notice designate another address or person for
receipt of notices hereunder.
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14. Not an Agreement of Employment. This is not an agreement assuring employment
and the Company reserves the right to terminate your employment at any time with
or without Cause, subject to the payment provisions hereof if such termination
is after, or within one hundred and eighty (180) days prior to, a Change in
Control. You acknowledge that you are aware that you shall have no claim against
the Company 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 your rights under any other
agreement with the Company.
15. Miscellaneous. No provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is agreed to in writing
and signed by you and such officer as may be specifically designated by the
Board. No waiver by either party hereto at any time of any breach by the other
party hereto of, or compliance with, any condition or provision shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time. This Agreement constitutes the entire Agreement
between the parties hereto pertaining to the subject matter hereof and
supersedes any prior agreements between the Company and you. No agreements or
representations, oral or otherwise, express or implied, with respect to the
subject matter hereof have been made by either party which are not expressly set
forth in this Agreement. All references to any law shall be deemed also to refer
to any successor provisions to such laws. For the avoidance of doubt, the
Company and you concur that the contribution of assets by Millennium
Petrochemicals Inc. to Equistar Chemicals Inc. ("Equistar") on December 1, 1997,
does not constitute a Change in Control under this Agreement or any other
agreement or plan of the Parent and its affiliates affecting you (including any
stock option agreement or restricted stock agreement with the Parent). In
addition, (i) the sale or disposition of all or any part of the Parent's
interests in Equistar (and all subsequent sales and dispositions of any
securities or assets received as proceeds thereof, or as proceeds of proceeds)
shall not be deemed to constitute a Change in Control under this Agreement or
any other agreement or plan affecting you, and (ii) if the Parent sells or
disposes of all or any part of the Parent's interests in Equistar indirectly
(either through the sale or other disposition of any entity that owns, directly
or indirectly, all or any part of the Parent's interests in Equistar, or
otherwise), then the sale or disposition of the Parent's interests in Equistar
(and all subsequent sales and dispositions of any securities or assets received
as proceeds thereof or as proceeds of proceeds) shall be ignored and disregarded
in determining whether any such Change in Control has occurred, either under
this Agreement or under any other agreement or plan of the Parent or its
affiliates affecting you. By way of illustration, if an indirect subsidiary of
the Parent that owns the Parent's interests in Equistar together with certain
other assets is sold, then, in determining whether a Change in Control has
occurred, all relevant determinations shall be made pursuant to the assumption
that (y) such subsidiary owns only such other assets, and (z) neither such
subsidiary nor the Parent owns, either directly or indirectly, the interests in
Equistar.
16. Independent Representation. You acknowledge that you have been advised by
the Company to have the Agreement reviewed by independent counsel and have been
given the opportunity to do so.
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17. Withholding Taxes. The Company may withhold from any and all amounts payable
under this Agreement such federal, state and local taxes as may be required to
be withheld pursuant to any applicable law or regulation.
18. Governing Law. This Agreement shall be construed, interpreted, and governed
in accordance with the laws of the State of Delaware without reference to rules
relating to conflicts of law.
Very truly yours,
MILLENNIUM AMERICA HOLDINGS INC.
By:
--------------------------------------
William M. Landuyt
President and Chief Executive Officer
Agreed and Accepted
as of the date first written above:
MILLENNIUM CHEMICALS INC.
(for purposes of Section 8 only)
By:
---------------------------------- --------------------------------------
William M. Landuyt [Name]
Chairman, President and Chief
Executive Officer
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EXHIBIT A
Change in Control
For purposes of this Agreement, the term "Change in Control" shall mean (i)
any "person" as such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934 ("Act") (other than the Parent, any trustee or other
fiduciary holding securities under any employee benefit plan of the Parent or
any company owned, directly or indirectly, by the stockholders of the Parent in
substantially the same proportions as their ownership of Common Stock of the
Parent), becoming the "beneficial owner" (as defined in Rule 13d-3 under the
Act), directly or indirectly, of securities of the Parent representing
twenty-five percent (25%) or more of the combined voting power of the Parent's
then outstanding securities; (ii) during any period of two consecutive years
(not including any period prior to October 1, 1996), individuals who at the
beginning of such period constitute the Board of Directors of the Parent, and
any new director (other than a director designated by a person who has entered
into an agreement with the Parent to effect a transaction described in clause
(i), (iii), or (iv) of this paragraph or a director whose initial assumption of
office occurs as a result of either an actual or threatened election contest (as
such terms are used in Rule 14a-11 of Regulation 14A promulgated under the Act)
or other actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Board of Directors of the Parent) whose
election by the Board of Directors or nomination for election by the Parent's
stockholders was approved by a vote of at least two-thirds of the directors then
still in office who either were directors at the beginning of the two-year
period or whose election or nomination for election was previously so approved,
cease for any reason to constitute at least a majority of the Board of
Directors; (iii) the merger or consolidation of the Parent with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Parent outstanding immediately prior thereto continuing
to represent (either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than fifty percent (50%) of the
combined voting power of the voting securities of the Parent or such surviving
entity outstanding immediately after such merger or consolidation; provided,
however, that a merger or consolidation effected to implement a recapitalization
of the Parent (or similar transaction) in which no person (other than those
covered by the exceptions in (i) above) acquires more than twenty-five percent
(25%) of the combined voting power of the Parent's then outstanding securities
shall not constitute a Change in Control or (iv) the stockholders of the Parent
approve a plan of complete liquidation of the Parent or the closing of the sale
or disposition by the Parent of all or substantially all of the Parent's assets
other than the sale or disposition of all or substantially all of the assets of
the Parent to one or more Subsidiaries (as defined below) of the Parent or to a
person or persons who beneficially own, directly or indirectly, at least fifty
percent (50%) or more of the combined voting power of the outstanding voting
securities of the Parent at the time of the sale or disposition; provided,
however, (y) the sale or disposition of all or any part of the Parent's
interests in Equistar (and all subsequent sales and dispositions of any
securities or assets received as proceeds thereof, or as proceeds of proceeds)
shall not be deemed to constitute a Change in Control, and (z) if the Parent
sells or disposes of all or any part of the Parent's interests in Equistar
indirectly (either through the sale or other disposition of any entity that
owns, directly or indirectly, all or any part of the Parent's interests in
Equistar, or otherwise), then the sale or disposition of the Parent's interests
in
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Equistar (and all subsequent sales and dispositions of any securities or assets
received as proceeds thereof, or as proceeds of proceeds) shall be ignored and
disregarded in determining whether any such Change in Control has occurred. By
way of illustration, if an indirect subsidiary of the Parent that owns the
Parent's interests in Equistar together with certain other assets is sold, then,
in determining whether a Change in Control has occurred, all relevant
determinations shall be made pursuant to the assumption that (y) such subsidiary
owns only such other assets, and (z) neither such subsidiary nor the Parent
owns, either directly or indirectly, the interests in Equistar. "Subsidiary"
shall have the meaning set forth in Section 424 of the Code and the term shall
also include any partnership, limited liability company or other business entity
if the Parent owns, directly or indirectly, securities or other ownership
interests representing at least fifty percent (50%) of the ordinary voting power
or equity or capital interests of such entity. Only one (1) Change in Control
may take place under this Agreement.
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