Ex 10.1
CHANGE-IN-CONTROL AGREEMENT
THIS AGREEMENT (this "Agreement"), dated as of March 1, 2003, is between
John M. Kehoe, Jr., an individual ("Employee"), and The General Chemical Group
Inc., a Delaware corporation (the "Company" or "GCG").
R E C I T A L S
WHEREAS, the Company and its subsidiaries are in the business of
manufacturing, selling and distributing sodium carbonate (soda ash) and ice and
dust control products, including without limitation, calcium chloride in North
America (the "Business");
WHEREAS, the Company may in the future contemplate the sale or merger of
the Company, its key operating subsidiaries or the Business, and will require
Employee's assistance in the diligence process, the marketing and sale and the
closing of the transaction;
WHEREAS, as a result of the foregoing and because of his/her value to the
Company, the Company wishes to induce Employee, as a key employee of one of the
Company's subsidiaries, to continue its employment with the Company; and
WHEREAS, in consideration for such assistance the Company is willing to
provide to Employee the benefits described in this Agreement.
NOW, THEREFORE, in consideration of the foregoing recitals and the
covenants contained herein, Employee and the Company hereby agree as follows:
1. Definitions.
(a) A "Change-in-Control" shall be deemed to have taken place if, as
a result: (i) The Existing Shareholders cease to be the
"beneficial owners" (as defined in Rules 13d-3 and 13d-5 under
the Exchange Act, except that a 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 at
least 50% in the aggregate of the total voting power of stock of
the Company (including specifically General Chemical Industrial
Products), whether as a result of issuance of securities of the
Company, (including specifically General Chemical Industrial
Products), any merger, consolidation, liquidation or dissolution
of the Company (including specifically General Chemical
Industrial Products), any direct or indirect transfer of
securities by parent corporation or otherwise (for purposes of
this clause (i) and clause (ii) below, the Existing Shareholders
shall be deemed to beneficially own any voting stock of a
corporation (the "Specified Corporation") held by any other
corporation (the "Parent
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Corporation") so long as the Existing Shareholders beneficially
own (as so defined), directly or indirectly, at least 50% in the
aggregate, of the voting power of the voting stock of the Parent
Corporation); (ii) Any "person" (as such term is used in Section
13 (d) and 14 (d) of the Exchange Act), other than one or more of
the Existing Shareholders, is or becomes the beneficial owner (as
defined in clause (i) above), directly or indirectly, of more
than thirty-five percent (35%) of the total voting power of the
stock of the Company (including specifically General Chemical
Industrial Products); provided, however, that the Existing
Shareholders "beneficially own" (as so defined), directly or
indirectly, in the aggregate a lesser percentage of the total
voting power of stock of the Company (including specifically
General Chemical Industrial Products) than such other person and
do not have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the
Board of Directors of the Company (including specifically General
Chemical Industrial Products) (for the purposes of this clause
(ii), such other person shall be deemed to beneficially own any
voting stock of a Specified Corporation held by a Parent
Corporation, if such other person "beneficially owns" (as so
defined), directly or indirectly, more than 35% of the voting
power of the voting stock of such Parent Corporation and the
Existing Shareholders "beneficially own" (as so defined),
directly or indirectly, in the aggregate a lesser percentage of
the voting power of the voting stock of such Parent Corporation
and do not have the right or ability by voting power, contract or
otherwise to elect or designate for election a majority of the
Board of Directors of such Parent Corporation); (iii) Any period
of two (2) consecutive years transpires and individuals who at
the beginning of such period constituted the Board of Directors
of the Company (including specifically General Chemical
Industrial Products) (together with any new directors whose
election by such Board of Directors or whose nomination for
election by the shareholders of the Company (including
specifically General Chemical Industrial Products) was approved
by a vote of 66-2/3% of the directors of the Company (including
specifically General Chemical Industrial Products) then still in
office who were either directors at the beginning of such period
or whose election or nomination for election was previously so
approved) cease for any reason to constitute a majority of the
Board of Directors of the Company (including specifically General
Chemical Industrial Products) then in office; or (iv) assets are
sold to other than an Existing Shareholder, or a company
controlled by an Existing Shareholder and the value of which
totals more than 50% of the then asset value of General Chemical
Industrial Products.
(b) "Cause" means (i) any act or acts by Employee resulting or
intended to result directly or indirectly in material gain or
personal enrichment of Employee at the expense of the Company;
(ii) Employee's indictment for
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or conviction of a felony; (iii) Employee's material breach of
the GCG Code of Conduct or (iv) Employee's breach of Section 3 or
Section 4 of this Agreement.
(c) Employee's employment shall be considered to have been terminated
by the Employee for "Good Reason" if (i) Employee voluntarily
terminates his/her employment with the Company because the
Company fails to employ him/her after a Change-in-Control in a
similar position having similar duties, and at an annual base
total compensation, bonus target amounts and benefits comparable
(except with respect to any reduction in benefits applicable to
all employees) to those enjoyed by Employee prior to such
Change-in-Control, or (ii) Employee voluntarily terminates
his/her employment because he/she is required after a
Change-in-Control to relocate to a place of employment more than
fifty (50) miles from his/her current place of employment.
(d) All references to "employment by the Company" or words of similar
import shall be read to mean employment by the Company or any of
its subsidiaries or affiliates.
(e) "Existing Shareholders" means those individuals and charitable
foundations who/which, as of the Effective Date, are shareholders
of The General Chemical Group Inc., their present or future
spouses and descendants and any trusts established for the
benefit of any of the foregoing, and their legal representatives
or any charitable foundation established by such persons.
2. Severance.
(a) If the Company terminates Employee's employment within two (2)
years following a Change-in-Control for any reason other than for
Cause, or the Employee terminates his/her employment with the
Company for Good Reason within two (2) years following a
Change-in-Control, then Employee will receive an amount of
severance pay as shown on Exhibit A (the "Severance"), payable
over the period referenced on Exhibit A (the "Severance Period").
During the Severance Period, Employee shall continue to receive
all medical and other benefits Employee is receiving at the time
of termination as if he/she were still employed by the Company,
except for long-term disability benefits. If Employee's
employment with the Company is terminated by the Company for
Cause during such two (2) year period, or Employee voluntarily
terminates his/her employment with the Company without Good
Reason during such two (2) year period, the Company shall not be
obligated to pay the Severance or make any other severance
payments and Employee shall only be entitled to receive his/her
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compensation (not including any discretionary incentive
compensation) earned up to and including the date of Employee's
termination.
(b) Notwithstanding the terms of any long term incentive plan, stock
option or restricted unit plan, supplemental executive savings or
pension plan, or other similar plan which may be in place
(collectively, the "Plans") in which Employee may participate,
upon the occurrence of the Change-in-Control and effective upon
such date (i) any and all dividends, awards, stock options
restricted units granted, and supplemental executive savings or
pension amounts accrued, to Employee under any of the Plans shall
be deemed to have fully vested and shall be paid to Employee
under the terms of the respective Plan, and all stock options
shall be fully exercisable, and (ii) with respect to stock
options, if after such vesting Employee has not exercised his/her
stock options, and Employee's employment with the Company is
terminated by the Company for reasons other than for Cause or by
the Employee for Good Reason, Employee shall have sixty (60) days
following such termination to exercise his/her stock options in
accordance with the provisions of the plan documents governing
the grant of such options.
(c) As a condition of the initiation of the payment of the Severance
described in this Section 2, Employee shall execute and deliver a
release document, in form and substance acceptable to the
Company, which releases the Company and its affiliates,
subsidiaries, officers, directors, shareholders, employees and
agents from any and all claims, actions, demands and liabilities
which may have arisen or could arise in connection with the
Employee's employment with, and termination of the Employee from,
the Company. The foregoing release shall not apply to any (i)
breach of the Company's obligations under this Agreement, or (ii)
claim for indemnity for which Employee may be entitled in
connection with any action or proceeding to which Employee is
made a party by reason of being an officer or employee of the
Company, to the extent such Employee is entitled to such
indemnity under the Company's Articles of Incorporation and
By-laws, or under applicable law.
(d) Notwithstanding anything to the contrary contained herein, in the
event that Employee's employment with the company has not been
terminated prior to two (2) years after a Change-in-Control, the
obligations of the Company to pay Severance as described in this
Section 2 shall terminate on such two-year anniversary of such
Change-in-Control and be of no further force or effect.
3. Noncompetition/Nonsolicitation. In exchange for the severance benefits
described above, during any period in which Employee is employed by,
or
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receiving severance benefits from, the Company, he/she agrees not to,
directly or indirectly, individually or injunction with another person
or entity:
(a) engage in any business, whether as owner, lender, employee,
consultant, agent or advisor, in North America (the "Territory")
which directly competes with the Business;
(b) solicit or contact potential customers on behalf of, invest in,
obtain any interest in, advise, lend money to, or guarantee the
debts or obligations of, any person or entity, which is engaged
in the Territory in the Business other than investments of not
more than one percent (1%) of the publicly traded securities of a
company that competes with the Business;
(c) solicit or accept business from any customers of the Company or
its subsidiaries or affiliates or actively seek prospective
customers, for the purposes of providing products or services in
the Territory which are the same as or substantially similar to
those provided by the Company in connection with its conduct of
the Business; or
(d) solicit, persuade or attempt to persuade, directly or through any
third party, any employee of the Company or its subsidiaries and
affiliates to terminate his or her service with the Company.
4. Confidential Information/Trade Secrets. During Employee's employment
with the Company and after Employee is no longer employed by the
Company, he/she agrees not to use, reveal or disclose any trade
secrets or confidential information of the Company. The term "trade
secrets" means (i) any scientific or technical information, design,
process, procedure, formula, invention or improvement of the Company,
without limitation, that is secret and of value and (ii) Company
information including, but not limited to, technical or non-technical
data, formula patterns, chemical formulations, compilations, devices,
methods, techniques, drawings, processes, financial data, and lists of
actual or potential customers which the Company takes reasonable
efforts to protect from disclosure. The term "confidential
information" means Company information that, although not a trade
secret, is not generally known and includes, but is not limited to,
sales and marketing information, customer account records, pricing,
costing and financial information relating to the business, accounts,
customers, employees and affairs of the Company; any information
marked "Confidential" by the Company; and any other similar Company
information that is not a trade secret. Promptly after termination of
Employee's employment with the Company for any reason, Employee agrees
to return to the Company any and all documents, memoranda, drawings,
notes, and other papers and items (including all copies thereof,
whether electronic or otherwise) embodying or containing any trade
secrets or confidential information of the Company which are in the
possession or control of Employee. The foregoing obligations are in
addition to, and do not supercede, any
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confidentiality, nondisclosure or other similar obligations Employee
may have, whether by agreement with the Company, by law or otherwise.
5. Remedies. Employee acknowledges and agrees that the Company would
suffer irreparable harm from a breach by Employee of the restrictive
covenants set forth in Section 3 or Section 4. Therefore, in the event
of the actual or threatened breach by Employee under Section 3 or
Section 4, the Company may, in addition and supplementary to any other
rights and remedies existing in its favor (including, without
limitation, its right to terminate Employee's employment), apply to
any court of law or equity of competent jurisdiction for specific
performance or injunctive or other relief in order to enforce or
prevent any violation of the provisions of Section 3 or Section 4.
Employee agrees not to raise the defense of an adequate remedy at law
in any such proceeding. Employee agrees that the existence of any
claim or cause of action by Employee against the Company, whether
predicted upon this Agreement or any other contract, shall not
constitute a defense to the enforcement by the Company of the
provisions of Section 3 or Section 4.
6. Occurrence of a Change-in-Control as Condition Precedent to Certain
Obligations under Agreement. The Company and Employee agree that the
occurrence of a Change-in-Control is a condition precedent to the
obligations of the Company set forth in Section 2 and that such
obligations shall be of no force and effect in the absence of a
Change-in-Control.
7. Notice. All notices and other communications required or permitted
under this Agreement shall be deemed to have been duly given and made
if in writing and if served either by personal delivery to the party
for whom intended (which shall include delivery by reputable overnight
courier) or three (3) business days after being deposited, postage
prepaid, certified or registered mail, return receipt requested, in
the United States mail bearing the address shown in this Agreement
for, or such other address as may be designated in writing hereafter
by, such party:
If to Employee: Mr. John M. Kehoe, Jr.
82 Ducks Head
PO Box 755
New Castle, NH 03854
If to the Company: The General Chemical Group Inc.
Liberty Lane
Hampton, New Hampshire
Attn: Secretary
with a copy to the General Counsel at
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90 East Halsey Road
Parsippany, NJ 07054
8. Reformation; Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and
valid under applicable law, but if any provision of this Agreement is
finally determined by a court of competent jurisdiction to be
unenforceable or invalid under applicable law, such provision shall be
effective only to the extent of its enforceability or validity,
without affecting the enforceability or validity of the remainder of
this Agreement, and such court shall have jurisdiction to reform this
Agreement to the maximum extent permitted by law. In the event that
any such provision of this Agreement cannot be reformed, such
provision shall be deemed severed from this Agreement, but every other
provision of this Agreement shall remain in full force and effect.
9. Binding Effect; Waiver. The terms and provisions of this Agreement
shall be binding on and inure to the benefit of Employee, his/her
heirs, executors, administrators and other legal representatives. This
Agreement shall be binding on and inure to the benefit of the Company,
its successors (including those by operation of law) and assigns and
the purchaser of the Company due to a Change-in-Control, who shall
also be deemed a third party beneficiary hereunder and shall have the
right to enforce the provisions of this Agreement in the Company's
place and stead. The failure of the Company at any time or from time
to time to require performance of any of Employee's obligations under
this Agreement shall in no manner affect the Company's right to
enforce any provision of this Agreement at a subsequent time, and the
waiver of any rights arising out of any breach shall not be construed
as a waiver of any rights arising out of any subsequent or prior
breach.
10. Entire Agreement; Prior Agreements and Arrangements. Upon occurrence
of a Change-in-Control, the terms and provisions of this Agreement
shall supersede, and amend and restate in their entirety, all terms
and provisions of any existing employment agreements and arrangements
that Employee may have with the Company or any subsidiary or affiliate
thereof which relate to the payment of cash severance, including, but
not limited to, existing employee benefits, handbooks, programs,
practices and severance arrangements and all other arrangements
relating to the subject matter hereof ("Existing Employee
Arrangements"), except as expressly set forth herein. This Agreement
shall not affect other non-cash benefits Employee may be entitled to
under either the Company's benefit plans or applicable law, such as
COBRA or ERISA, for example. Nothing set forth in this Agreement shall
constitute a guarantee of employment for a particular period or
otherwise abrogate or modify Employee's the Existing Employee
Agreements in the absence of a Change-in-Control.
11. Withholding. Notwithstanding any other provision of this Agreement,
the Company may withhold from amounts payable under this Agreement,
and shall
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pay over to the appropriate authorities in a manner consistent with
all applicable requirements, all federal, state, local and foreign
taxes that are required to be withheld by applicable laws or
regulations.
12. Mitigation. Employee shall not be required to mitigate damages or the
amount of any payment or other benefit provided for in this Agreement
by seeking other employment, nor shall the amount of any payment or
other benefit provided for in this Agreement then or thereafter due to
Employee be reduced or modified by any compensation or other payment
or benefit earned or received by Employee as the result of or in
connection with any employment of the Employee by another employer
after the termination of Employee's employment with the Company.
13. Amendment. No amendment, modification, or waiver of any provision of
this Agreement shall be effective unless the same shall be in writing
and signed by the parties hereto.
14. Assignment. This Agreement is for personal services to be performed by
Employee and may not be assigned or transferred by Employee, nor may
the obligations of Employee be performed by any other party. All of
the rights and obligations of the Company under this Agreement are
fully assignable and transferable by the Company.
15. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed an original but all of which together shall
constitute one and the same instrument.
16. Headings. The various headings of this Agreement are inserted for
convenience only and shall not affect the meaning or interpretation of
this Agreement or any provisions hereof.
17. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Delaware without reference to
conflicts of laws principles.
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IN WITNESS WHEREOF, the parties hereto have executed or caused to be
executed this Agreement as of the date first above written.
EMPLOYEE:
/s/ John M. Kehoe, Jr.
---------------------------------
THE COMPANY:
THE GENERAL CHEMICAL
GROUP INC.
By: /s/ John D. Sanford
--------------------------
Name: John D. Sanford
Title: Executive Vice President,
Finance and Administration
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Exhibit A
Employee John M. Kehoe, Jr.
1. Severance: $ 25,000 / month
2. Severance Period: 24 months
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