EMPLOYMENT AGREEMENT
AGREEMENT, dated as of November 29, 1996, between EAGLE-PICHER
INDUSTRIES, INC. (the "Company"), having its principal executive offices at 580
Walnut Street, Cincinnati, Ohio 45201, and Wayne R. Wickens (the "Executive"),
residing at 7470 Pinehurst, Cincinnati, Ohio 45244.
W I T N E S S E T H :
WHEREAS, the Executive is employed on a full-time basis by the
Company and is currently serving as Senior Vice President and Group Executive of
the Company; and
WHEREAS, on January 7, 1991, the Company and certain of its
affiliates (collectively, the "Debtors") each filed a petition for relief under
chapter 11, title 11 of the United States Code (the "Bankruptcy Code") in the
United States Bankruptcy Court for the Southern District of Ohio, Western
Division (the "Bankruptcy Court"); and
WHEREAS, by order dated November 18, 1996 (the "Confirmation
Order") the Bankruptcy Court and the United States District Court for the
Southern District of Ohio, Western Division, confirmed the Third Amended
Consolidated Plan of Reorganization, dated August 28, 1996 (the "Plan"), in the
Debtors' chapter 11 cases; and
WHEREAS, the Plan contemplates that the Company and the
Executive will enter into this Agreement which is to
become effective on the Effective Date (as such term is defined in the Plan).
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter contained, the parties hereto agree as follows:
1. Employment; Effectiveness of Agreement. The obligation of
the Company to employ the Executive, and of the Executive to serve the Company,
pursuant to this Agreement shall become effective automatically on the
Effective Date.
2. Term. The term of Executive's employment hereunder
(hereinafter referred to as the "Term") shall commence on the Effective Date and
shall continue thereafter until the date which is thirty (30) months from and
after the date on which the Confirmation Order was entered by the Bankruptcy
Court, unless terminated earlier as hereinafter provided.
3. Duties and Extent of Services. During the Term, Executive
agrees to continue to serve as the Senior Vice President and Group Executive of
the Company faithfully and to the best of his ability under the direction of the
Chief Executive Officer and the Board of Directors of the Company (the "Board"),
and agrees to devote substantially all of his business time, energy and skill to
such
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employment. Executive agrees to perform the duties commensurate with the
position of Senior Vice President and Group Executive of the Company, which
shall include, without limitation, the duties set forth on Annex A hereto.
Executive agrees also to perform such specific duties and services of a senior
executive nature as the Chief Executive Officer of the Company or the Board
shall reasonably request consistent with Executive's position as Senior Vice
President and Group Executive. The principal place of employment of Executive
shall be Cincinnati, Ohio and, subject to such reasonable travel as the
performance of his duties may require, such principal place of employment shall
not be changed unless the Executive otherwise consents.
4. Compensation.
4.1 Base Salary. The Company agrees to pay or cause
to be paid to Executive during the Term, a base salary equal to the amount of
his base salary as at the date immediately preceding the Effective Date, subject
to adjustment as provided below (as so adjusted, the "Base Salary"). The Base
Salary shall be payable in accordance with the regular payroll policies of the
Company from time to time in effect, less such deductions as shall be required
to be withheld by applicable law and regulations. On each December 1 during the
Term, the Board or a committee
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thereof, shall review Executive's Base Salary as then in effect and may, but
shall not be obligated to, increase such salary by such amount as the Board (or
such committee), in its sole discretion, shall determine.
4.2 Discretionary Bonus. In addition to Base Salary,
the Executive shall be entitled to receive an annual cash bonus based on the
performance of the Company and of the Executive, the amount of which, if any,
shall be determined by the Board (or a committee thereof). Determinations made
by the Board (or such committee) with respect to the amount, if any, of annual
bonuses to be paid to Executive under this Agreement shall be final and
conclusive.
4.3 Benefits and Perquisites. During the Term, the
Company shall provide Executive with and Executive shall be entitled to the
following benefits and perquisites:
(a) participation in and the receipt of benefits
under (i) all of the Company's employee benefit plans and arrangements in effect
from time to time applicable to salaried employees of the Company, (ii) all
short-term and long-term incentive plans of the Company as in effect from time
to time, (iii) a supplemental executive retirement plan (the "SERP")
substantially in accordance with and no less favorable to Executive than the
terms,
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provisions and benefits under the supplemental executive retirement plan
currently provided by the Company, and (iv) any life insurance, health and
accident plan or arrangement made available by the Company, now or in the
future, to its executives and key management employees, subject to and on a
basis consistent with the terms, conditions and overall administration of such
plans and arrangements.
(b) four (4) weeks of paid vacation in each calendar
year.
(c) an automobile paid for by the Company for use in
the performance of his services under this Agreement, in a manner substantially
consistent with past practices.
(d) membership fees paid for by the Company with
respect to any of the Executive's business-related club memberships (it being
understood that such membership fees shall not include any fees for country
clubs or other similar, primarily social, clubs).
The Company also shall implement, as soon as reasonably
practicable after the Effective Date, a long-term incentive plan. Although the
ability to receive stock of the Company may not be available for such plan, the
plan nevertheless shall provide the Executive with opportunities and incentives
reasonably economically equivalent to those
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provided by similar companies, many of which do provide stock options and/or
other types of stock grants as components of their long-term incentive plans.
4.4 Expenses. Subject to such policies as may from
time to time be established by the Board, the Company shall pay or reimburse
Executive for all reasonable expenses actually incurred or paid by Executive
during the Term in the performance of his services under this Agreement, upon
presentation of expense statements or vouchers or such other supporting
information as the Company may require.
5. Termination.
5.1 Cause. The Company may terminate Executive's
employment hereunder for Cause. For the purposes of this Agreement, the Company
shall have "Cause" to terminate Executive's employment hereunder only by reason
of any one or more of the following:
(i) Executive's commission of any crime
(whether or not involving the Company or any of its
subsidiaries) which constitutes a felony in the
jurisdiction involved; or
(ii) Executive's commission of an act of
fraud upon the Company or any or its subsidiaries; or
(iii) Executive's willful failure to
perform in all material respects his duties hereunder
in accordance with the terms of this Agreement which
failure (other than by reason of death or disability)
continues
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uncorrected for a period of ten (10) days after
Executive shall have received written notice from the
Board stating with specificity the nature of such
failure or refusal.
5.2 Termination by the Executive. Executive may
terminate his employment hereunder upon thirty (30) days' prior written notice
to the Company for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean (i) the material diminution of the nature or scope of the duties
assigned to Executive from that contemplated by Section 3 hereof, (ii) a
reduction in Executive's Base Salary, or a material reduction in Executive's
fringe benefits or any other material failure by the Company to comply with
Section 4 hereof, other than any such reduction or failure as shall apply to all
salaried employees of the Company generally, (iii) ceased participation by
Executive, for any reason other than as a result of any action by Executive, in
any employee benefit plan of the Company with respect to which Executive is or
was, prior to such time, eligible to participate, (iv) the relocation of
Executive's principal place of employment more than twenty (20) miles from the
location specified in Section 3 hereof without Executive's consent, (v) the
requirement that Executive engage in a substantial amount of additional travel
(as compared to Executive's past practices) in the performance of his duties
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hereunder without Executive's consent, or (vi) any other material breach by the
Company of its obligations under this Agreement. Good Reason shall not exist in
the event of a sale or disposition of a subsidiary or division of the Company
and Executive either (a) voluntarily agrees to be employed by such subsidiary or
division, or (b) is offered a comparable position with the Company. For purposes
hereof, comparable shall encompass such items as salary, benefits, duties and
geographic location.
5.3 Notice of Termination. Any termination by the
Company pursuant to Section 5.1 above or by Executive pursuant to Section 5.2
above shall be communicated by written notice (the "Notice of Termination"),
which notice shall indicate the specific termination provision in this Agreement
relied upon for such termination.
5.4 Date of Termination. "Date of Termination"
shall mean (i) if Executive's employment is terminated pursuant to Section 5.1
or 5.2 hereof, the date specified in the Notice of Termination, and (ii) if
Executive's employment is terminated by the Company other than for Cause or by
Executive other than for Good Reason, the date on which a Notice of Termination
is given.
5.5 Payments upon Termination. (a) If the employment
of Executive with the Company is terminated (i)
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by the Company other than for Cause or (ii) by the Executive for Good Reason,
then Executive shall be entitled to receive from the Company, and the Company
shall pay to Executive, a lump sum severance payment equal to the greater of (x)
the aggregate Base Salary (at the rate in effect at the Date of Termination)
that Executive would have received for the remainder of the Term if his
employment had not been terminated, or (y) the aggregate amount of the Base
Salary (at the rate in effect at the Date of Termination) which would be paid
for a period of twenty-four (24) months, plus, in either case, such other
benefits or reimbursement of expenses payable to the Executive pursuant to
Sections 4.3 and 4.4 hereof (including, without limitation, the SERP), and less
such amounts as shall be required to be withheld by the Company pursuant to
applicable laws and regulations (the "Severance Amount"). The Severance Amount
shall not be present-valued and shall be payable by the Company to Executive
within thirty (30) days after Executive's termination. Executive shall not be
required to mitigate the Company's obligation to pay the full Severance Amount
by seeking employment or otherwise and the Severance Amount shall not be
decreased or otherwise offset as a result of any compensation received by
Executive from employment in any capacity. The Severance Amount shall be deemed
9
compensation payable to Executive for the purpose of determining the total
amount due Executive pursuant to the SERP.
(b) If the employment of Executive with the Company is
terminated (i) by the Company for Cause, or (ii) by the Executive other than for
Good Reason, then the Executive shall be entitled to receive, and the Company
shall pay to Executive, (x) all accrued and unpaid Base Salary and amounts due
Executive in respect of perquisites provided him hereunder through the Date of
Termination at the rate in effect at the time Notice of Termination is given,
(y) Base Salary payable in lieu of accrued and unused vacation days in
accordance with the policies of the Company from time to time in effect, and (z)
all accrued and unpaid benefits payable to Executive pursuant to any benefit
plan or otherwise through the Date of Termination. Upon the payment of the
foregoing amounts, the Company shall have no further obligations to Executive
under this Agreement.
5.6 Limited Payment Cap. (a) Notwithstanding any
other provision in this Agreement to the contrary, this Section 5.6 will apply
in the event that the Executive would receive payments under this Agreement or
under any other plan, agreement, program, or policy that is sponsored by the
Company, which relate to a change in
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control of the Company ("parachute payments"), and any such parachute payments
are determined by the Company to be subject to excise tax under Section 4999 of
the Internal Revenue Code of 1986, as amended (the "Code") ("excess parachute
payments"). If it is determined that such excise tax would cause the net
after-tax parachute payments to be paid to or on behalf of the Executive to be
less than what he would have netted, after federal, state and local income and
social security taxes, had the present value of his total parachute payments
equalled $1 less than three times his "base amount," as defined under Section
280G(b)(3)(A) of the Code, then such Executive's total parachute payments shall
be reduced (but by the minimum possible amount), so that their aggregate present
value equals $1 less than three times the Executive's base amount. If it is
determined that any payment to or on behalf of the Executive will be an excess
parachute payment, the Company shall promptly give the Executive notice to that
effect, a copy of the detailed calculation thereof, and an explanation of the
calculation of the reduction (if any) required hereunder. If a reduction
hereunder is required, the Executive may then elect which payments shall be
eliminated or reduced (as long as after such election the aggregate present
value of the remaining parachute payments is less than three times the
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Executive's base amount). The Executive shall advise the Company in writing of
his election within 10 days of his receipt of this notice. If no such election
is made by the Executive, the Company may elect which and how much of such
payments to eliminate or reduce to accomplish this required reduction, and shall
promptly thereafter pay or distribute for the Executive's benefit such amounts
as become due under this Agreement.
(b) It shall be assumed for purposes of the calculations
described in subsection (a) above that the Executive's income tax rate will be
computed based upon the maximum effective marginal federal, state and local
income tax rates and Medicare tax on earned income, with such maximum effective
federal income tax rate to be computed with regard to Section 68 of the Code,
and applying any available deduction of state and local income taxes for federal
income tax purposes. In the event that the Executive and the Company are unable
to agree as to the amount of the reduction described in subsection (a) above, if
any, the Executive shall select a law firm or public accounting firm from among
those regularly consulted by the Company regarding federal income tax matters,
such law firm or accounting firm shall determine the amount of such
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reduction, and such firm's determination shall be final and binding upon the
Executive and the Company.
6. Death or Disability.
6.1 Death. If Executive dies during the Term, this
Employment Agreement, other than the provisions of Section 6.3 hereof, shall
terminate.
6.2 Disability. If, during the Term, Executive
becomes physically or mentally disabled, whether totally or partially, so that
he is unable substantially to perform his services hereunder for (i) a period of
six (6) consecutive months or (ii) for shorter periods aggregating six (6)
months during any eighteen (18) month period, the Company may at any time after
the last day of the six (6) consecutive months of disability or the day on which
the shorter periods of disability equal an aggregate of six (6) months, by
written notice to Executive (the "Disability Notice"), terminate the Term of the
Executive's employment hereunder.
6.3 Payments upon Death or Disability. Upon a
termination due to the death or disability of Executive, Executive (or, in the
event of a termination as a result of the death of Executive, Executive's estate
(or a designated beneficiary thereof)) shall be entitled to receive from the
Company, and the Company shall pay to Executive (or Execu-
13
tive's estate, if applicable) the amount of any accrued and unpaid Base Salary
and other benefits and reimbursement of expenses payable to the Executive
hereunder pursuant to Sections 4.3 and 4.4 hereof as of the date of Executive's
death or the date of the Disability Notice, as applicable. In addition, for a
period of thirty (30) months following the date of such termination, the Company
shall continue to pay and provide to Executive and Executive's dependents at the
Date of Termination all medical benefits pursuant to any plans and programs in
which Executive was entitled to participate immediately prior to the Date of
Termination as if Executive were still employed by the Company pursuant hereto.
If Executive's participation in any plan or program pursuant to which such
medical benefits are provided to Executive is barred as a result of such
termination, the Company shall arrange to provide Executive and Executive's
dependents with benefits substantially similar on an after tax basis to those
which Executive was entitled to receive under such plan or program.
7. Non-Competition; Confidentiality.
7.1 Non-Competition. Executive agrees that, during
the Term and for a period of two years following the date of a termination of
Executive's employment under Section 5 hereof (the "Restricted Period"), he will
not,
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directly or indirectly, own, manage, operate or control, or participate in the
ownership, management, operation or control of, or be connected as an officer,
employee, partner, director or otherwise with, or have any financial interest
in, or aid or assist anyone else in the conduct of, any entity or business which
competes with any material business conducted by the Company or by any group,
division or subsidiary of the Company, in any area where such business is being
conducted, or for which negotiations to conduct business are pending, at the
date of such termination (a "Competitive Operation"); provided, however, that
Executive may acquire, solely as an investment and through market purchases,
securities of any corporation that are traded on any national securities
exchange or listed on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), if Executive is not a controlling person of, or a
member of a group which controls, such corporation; and Executive does not,
directly or indirectly, own more than one percent (1%) of any class of
securities of such corporation.
7.2 Confidential Information; Personal Relationships.
Executive agrees that, during the Term and thereafter, he shall keep secret and
retain in strictest confidence, and shall not use for his benefit or the benefit
15
of others, any and all confidential information relating to the Company,
including, without limitation, trade secrets, customer lists, financial plans or
projections, pricing policies, marketing plans or strategies, business
acquisition or divestiture plans, new personnel acquisition plans, technical
processes, inventions and other research projects heretofore or hereafter
learned by Executive, and he shall not disclose any such information to anyone
outside the Company or any of its subsidiaries, except as required by law in
connection with any judicial or administrative proceeding or inquiry (provided
prior written notice thereof is given by Executive to the Company) or except
with the Company's prior written consent, unless such information is known
generally to the public or the trade through sources other than Executive's
unauthorized disclosure.
7.3 Property of the Company. All memoranda, notes,
lists, records and other documents or papers (and all copies thereof), including
such items stored in computer memories, or microfiche or by any other means,
made or compiled by or on behalf of Executive, or made available to Executive,
relating to the Company or any successors thereto, are and shall be the property
of the Company or any such successor and shall be delivered to the Company or
any such successor promptly at any time on request.
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7.4 Employees of the Company. During the Restricted
Period, the Executive shall not, directly or indirectly, hire, solicit or
encourage to leave the employment of the Company, any of its employees or hire
any such employee who has left the employment of the Company.
7.5 Rights and Remedies Upon Breach. If Executive
breaches, or threatens to commit a breach of, any of the provisions of this
Section 7 (the "Restrictive Covenants"), the Company and any successor thereto
shall have the following rights and remedies, each of which shall be independent
of the other and severally enforceable, and all of which shall be in addition
to, and not in lieu of, any other rights and remedies available to the Company
under law or in equity.
(a) Specific Performance. The right and remedy to
have the Restrictive Covenants specifically enforced by any arbitrator or any
court having equity jurisdiction, it being acknowledged and agreed by Executive
that any such breach or threatened breach will cause irreparable injury to the
Company and that money damages will not provide an adequate remedy to the
Company.
(b) Accounting. The right and remedy to require
Executive to account for and pay over to the Company all compensation, profits,
monies, accruals, increments or
17
other benefits (collectively, "Benefits") derived or received by Executive as
the result of any transactions constituting a breach of any of the Restrictive
Covenants, and Executive shall account for and pay over such Benefits to the
Company.
7.6 Severability of Covenants. Executive acknowledges
and agrees that the Restrictive Covenants are reasonable and valid in
geographical and temporal scope and in all other respects. Notwithstanding the
foregoing, if any arbitrator or court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable or should be
reduced, the remainder of the Restrictive Covenants shall not thereby be
affected and shall be given full effect without regard to the invalid
Restrictive Covenants or portions thereof.
8. Insurance. The Company may, from time to time, apply for
and take out, in its own name and at its own expense, naming itself or others as
the designated beneficiary (which it may change from time to time), policies for
health, accident, disability or other insurance upon Executive in any amount
that it may deem necessary or appropriate to protect its interest. Executive
agrees to aid the Company in procuring such insurance by submitting to
reasonable medical examinations and by filling out, executing and
18
delivering such applications and other instruments in writing as may reasonably
be required by any insurance company to which the Company may apply for
insurance.
9. Indemnification. To the fullest extent permitted or
required by the laws of the State of Ohio, the Company shall indemnify and hold
harmless Executive, in accordance with the terms of such laws, if Executive is
made a party, or threatened to be made a party, to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that Executive is or was an officer or
director of the Company, or any subsidiary or affiliate of the Company in which
capacity Executive is or was serving at the Company's request, against expenses
(including reasonable attorneys' fees), judgments, fines and amounts paid in
settlement, all as actually and reasonably incurred by him in connection with
such action, suit or proceeding. In the event it becomes necessary for Executive
to take any action to enforce the indemnity provided herein, Executive shall be
promptly reimbursed by the Company for all costs and expenses associated
therewith (including reasonable attorneys' fees).
10. Arbitration. All disputes arising under or
related to this Agreement shall be resolved by arbitration.
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Such arbitration shall be conducted by an arbitrator mutually selected by the
Company and Executive (or, if the Company and Executive are unable to agree upon
an arbitrator within ten (10) days, then the Company and Executive shall each
select an arbitrator, and the arbitrators so selected shall mutually select a
third arbitrator, who shall resolve such dispute). Such arbitration shall be
conducted in accordance with the applicable rules of the American Arbitration
Association. Any decision rendered by an arbitrator pursuant hereto may be
enforced by a court of competent jurisdiction without review of such decision by
such court. The Company shall pay all of the fees and expenses of the
arbitrators and the other costs of arbitration. The Company also shall pay
Executive's reasonable legal fees and expenses incurred in connection with any
successful enforcement by Executive of his rights hereunder.
11. Miscellaneous.
11.1 Notices. Any notice or other communication
required or permitted hereunder shall be in writing and shall be delivered
personally, telecopied or sent by certified or registered mail, postage prepaid,
or by Federal Express or similar overnight courier. Any such notice shall be
deemed given when delivered:
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(i) if to the Company, to:
Eagle-Picher Industries, Inc.
580 Walnut Street
Cincinnati, Ohio 45201
Attn: General Counsel
Telecopy No.: (513) 721-3404
(ii) if to Executive, to:
Wayne R. Wickens
Eagle-Picher Industries, Inc.
580 Walnut Street
Cincinnati, Ohio 45201
Telecopy No.: (513) 721-2779
11.2 Waivers and Amendments. This Agreement may not
be amended, modified, superseded or cancelled except by a written instrument
signed by the Company and Executive. No delay on the part of any party in
exercising any right or remedy hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right or remedy, nor any
single or partial exercise of any such right or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy.
11.3 Survival. The provisions of Sections 7 and 9
hereof shall survive the Term, irrespective of the reasons for termination of
Executive's employment hereunder.
11.4 Governing Law. This Agreement shall be governed
by and construed in accordance with the law of the State of Ohio applicable to
agreements made and to be performed entirely within such State.
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11.5 Entire Agreement. This Agreement (including
the schedules, annexes and exhibits hereto) contain the entire agreement between
the parties with respect to the subject matter hereof and supersede all prior
agreements, proposals or representations, arrangements or understandings,
written or oral, with respect thereto.
11.6 Assignment. This Agreement, and any rights and
obligations hereunder, may not be assigned by any
22
party hereto without the prior written consent of the other party.
11.7 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.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
EAGLE-PICHER INDUSTRIES, INC.
By /s/ Thomas E. Petry
--------------------------------
Name: Thomas E. Petry
Title: Chairman of the Board
of Directors and Chief
Executive Officer
/s/ Wayne R. Wickens
-----------------------------------
Wayne R. Wickens
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ANNEX A
TO EMPLOYMENT AGREEMENT OF
WAYNE R. WICKENS
Position: Senior Vice President and Group Executive
Duties: Plans, directs and controls all activities in certain profit
centers (currently ten Automotive Divisions) through the general
managers of those entities. Those general managers are in turn
responsible for production, research, engineering,
marketing/sales, purchasing and human resources in their
operations.
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of November 29, 1996, between EAGLE-PICHER
INDUSTRIES, INC. (the "Company"), having its principal executive offices at 580
Walnut Street, Cincinnati, Ohio 45201, and Thomas E. Petry (the "Executive"),
residing at Four Lexington Circle, Terrace Park, Ohio 45174.
W I T N E S S E T H :
WHEREAS, the Executive is employed on a full-time basis by the
Company and is currently serving as Chairman of the Board of Directors and Chief
Executive Officer of the Company; and
WHEREAS, on January 7, 1991, the Company and certain of its
affiliates (collectively, the "Debtors") each filed a petition for relief under
chapter 11, title 11 of the United States Code (the "Bankruptcy Code") in the
United States Bankruptcy Court for the Southern District of Ohio, Western
Division (the "Bankruptcy Court"); and
WHEREAS, by order dated November 18, 1996 (the "Confirmation
Order") the Bankruptcy Court and the United States District Court for the
Southern District of Ohio, Western Division, confirmed the Third Amended
Consolidated Plan of Reorganization, dated August 28, 1996 (the "Plan"), in the
Debtors' chapter 11 cases; and
1
WHEREAS, the Plan contemplates that the Company and the
Executive will enter into this Agreement which is to become effective on the
Effective Date (as such term is defined in the Plan).
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter contained, the parties hereto agree as follows:
1. Employment; Effectiveness of Agreement. The obligation of
the Company to employ the Executive, and of the Executive to serve the Company,
pursuant to this Agreement shall become effective automatically on the
Effective Date.
2. Term. The term of Executive's employment hereunder
(hereinafter referred to as the "Term") shall commence on the Effective Date and
shall continue thereafter until the date which is thirty (30) months from and
after the date on which the Confirmation Order was entered by the Bankruptcy
Court, unless terminated earlier as hereinafter provided.
3. Duties and Extent of Services. During the Term, Executive
agrees to continue to serve as the Chairman of the Board of Directors and Chief
Executive Officer of the Company faithfully and to the best of his ability under
the direction of the Board of Directors of the Company (the
2
"Board"), and agrees to devote substantially all of his business time, energy
and skill to such employment. Executive agrees to perform the duties
commensurate with the position of Chairman of the Board of Directors and Chief
Executive Officer of the Company, which shall include, without limitation, the
duties set forth on Annex A hereto. Executive agrees also to perform such
specific duties and services of a senior executive nature as the Board shall
reasonably request consistent with Executive's position as Chairman of the Board
of Directors and Chief Executive Officer. The principal place of employment of
Executive shall be Cincinnati, Ohio and, subject to such reasonable travel as
the performance of his duties may require, such principal place of employment
shall not be changed unless the Executive otherwise consents.
4. Compensation.
4.1 Base Salary. The Company agrees to pay or cause
to be paid to Executive during the Term, a base salary equal to the amount of
his base salary as at the date immediately preceding the Effective Date, subject
to adjustment as provided below (as so adjusted, the "Base Salary"). The Base
Salary shall be payable in accordance with the regular payroll policies of the
Company from time to time in effect, less such deductions as shall be required
3
to be withheld by applicable law and regulations. On each December 1 during the
Term, the Board or a committee thereof, shall review Executive's Base Salary as
then in effect and may, but shall not be obligated to, increase such salary by
such amount as the Board (or such committee), in its sole discretion, shall
determine.
4.2 Discretionary Bonus. In addition to Base Salary,
the Executive shall be entitled to receive an annual cash bonus based on the
performance of the Company and of the Executive, the amount of which, if any,
shall be determined by the Board (or a committee thereof). Determinations made
by the Board (or such committee) with respect to the amount, if any, of annual
bonuses to be paid to Executive under this Agreement shall be final and
conclusive.
4.3 Benefits and Perquisites. During the Term, the
Company shall provide Executive with and Executive shall be entitled to the
following benefits and perquisites:
(a) participation in and the receipt of benefits
under (i) all of the Company's employee benefit plans and arrangements in effect
from time to time applicable to salaried employees of the Company, (ii) all
short-term and long-term incentive plans of the Company as in effect from time
to time, (iii) a supplemental executive
4
retirement plan (the "SERP") substantially in accordance with and no less
favorable to Executive than the terms, provisions and benefits under the
supplemental executive retirement plan currently provided by the Company, and
(iv) any life insurance, health and accident plan or arrangement made available
by the Company, now or in the future, to its executives and key management
employees, subject to and on a basis consistent with the terms, conditions and
overall administration of such plans and arrangements.
(b) four (4) weeks of paid vacation in each calendar
year.
(c) an automobile paid for by the Company for use in
the performance of his services under this Agreement, in a manner substantially
consistent with past practices.
(d) membership fees paid for by the Company with
respect to any of the Executive's business-related club memberships (it being
understood that such membership fees shall not include any fees for country
clubs or other similar, primarily social, clubs).
The Company also shall implement, as soon as reasonably
practicable after the Effective Date, a long-term incentive plan. Although the
ability to receive stock of the Company may not be available for such plan, the
plan
5
nevertheless shall provide the Executive with opportunities and incentives
reasonably economically equivalent to those provided by similar companies, many
of which do provide stock options and/or other types of stock grants as
components of their long-term incentive plans.
4.4 Expenses. Subject to such policies as may from
time to time be established by the Board, the Company shall pay or reimburse
Executive for all reasonable expenses actually incurred or paid by Executive
during the Term in the performance of his services under this Agreement, upon
presentation of expense statements or vouchers or such other supporting
information as the Company may require.
5. Termination.
5.1 Cause. The Company may terminate Executive's
employment hereunder for Cause. For the purposes of this Agreement, the Company
shall have "Cause" to terminate Executive's employment hereunder only by reason
of any one or more of the following:
(i) Executive's commission of any crime
(whether or not involving the Company or any of its
subsidiaries) which constitutes a felony in the
jurisdiction involved; or
(ii) Executive's commission of an act of
fraud upon the Company or any or its subsidiaries; or
6
(iii) Executive's willful failure to
perform in all material respects his duties hereunder
in accordance with the terms of this Agreement which
failure (other than by reason of death or disability)
continues uncorrected for a period of ten (10) days
after Executive shall have received written notice
from the Board stating with specificity the nature of
such failure or refusal.
5.2 Termination by the Executive. Executive may
terminate his employment hereunder upon thirty (30) days' prior written notice
to the Company for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean (i) the material diminution of the nature or scope of the duties
assigned to Executive from that contemplated by Section 3 hereof, (ii) a
reduction in Executive's Base Salary, or a material reduction in Executive's
fringe benefits or any other material failure by the Company to comply with
Section 4 hereof, other than any such reduction or failure as shall apply to all
salaried employees of the Company generally, (iii) ceased participation by
Executive, for any reason other than as a result of any action by Executive, in
any employee benefit plan of the Company with respect to which Executive is or
was, prior to such time, eligible to participate, (iv) the relocation of
Executive's principal place of employment more than twenty (20) miles from the
location specified in Section 3 hereof without Executive's consent, (v) the
requirement that Executive engage in a
7
substantial amount of additional travel (as compared to Executive's past
practices) in the performance of his duties hereunder without Executive's
consent, or (vi) any other material breach by the Company of its obligations
under this Agreement. Good Reason shall not exist in the event of a sale or
disposition of a subsidiary or division of the Company and Executive either (a)
voluntarily agrees to be employed by such subsidiary or division, or (b) is
offered a comparable position with the Company. For purposes hereof, comparable
shall encompass such items as salary, benefits, duties and geographic location.
5.3 Notice of Termination. Any termination by the
Company pursuant to Section 5.1 above or by Executive pursuant to Section 5.2
above shall be communicated by written notice (the "Notice of Termination"),
which notice shall indicate the specific termination provision in this Agreement
relied upon for such termination.
5.4 Date of Termination. "Date of Termination"
shall mean (i) if Executive's employment is terminated pursuant to Section 5.1
or 5.2 hereof, the date specified in the Notice of Termination, and (ii) if
Executive's employment is terminated by the Company other than for Cause or by
Executive other than for Good Reason, the date on which a Notice of Termination
is given.
8
5.5 Payments upon Termination. (a) If the employment
of Executive with the Company is terminated (i) by the Company other than for
Cause or (ii) by the Executive for Good Reason, then Executive shall be entitled
to receive from the Company, and the Company shall pay to Executive, a lump sum
severance payment equal to the greater of (x) the aggregate Base Salary (at the
rate in effect at the Date of Termination) that Executive would have received
for the remainder of the Term if his employment had not been terminated, or (y)
the aggregate amount of the Base Salary (at the rate in effect at the Date of
Termination) which would be paid for a period of twenty-four (24) months, plus,
in either case, such other benefits or reimbursement of expenses payable to the
Executive pursuant to Sections 4.3 and 4.4 hereof (including, without
limitation, the SERP), and less such amounts as shall be required to be withheld
by the Company pursuant to applicable laws and regulations (the "Severance
Amount"). The Severance Amount shall not be present-valued and shall be payable
by the Company to Executive within thirty (30) days after Executive's
termination. Executive shall not be required to mitigate the Company's
obligation to pay the full Severance Amount by seeking employment or otherwise
and the Severance Amount shall not be decreased or otherwise offset as a result
of
9
any compensation received by Executive from employment in any capacity. The
Severance Amount shall be deemed compensation payable to Executive for the
purpose of determining the total amount due Executive pursuant to the SERP.
(b) If the employment of Executive with the Company is
terminated (i) by the Company for Cause, or (ii) by the Executive other than for
Good Reason, then the Executive shall be entitled to receive, and the Company
shall pay to Executive, (x) all accrued and unpaid Base Salary and amounts due
Executive in respect of perquisites provided him hereunder through the Date of
Termination at the rate in effect at the time Notice of Termination is given,
(y) Base Salary payable in lieu of accrued and unused vacation days in
accordance with the policies of the Company from time to time in effect, and (z)
all accrued and unpaid benefits payable to Executive pursuant to any benefit
plan or otherwise through the Date of Termination. Upon the payment of the
foregoing amounts, the Company shall have no further obligations to Executive
under this Agreement.
5.6 Limited Payment Cap. (a) Notwithstanding any
other provision in this Agreement to the contrary, this Section 5.6 will apply
in the event that the Executive would receive payments under this Agreement or
10
under any other plan, agreement, program, or policy that is sponsored by the
Company, which relate to a change in control of the Company ("parachute
payments"), and any such parachute payments are determined by the Company to be
subject to excise tax under Section 4999 of the Internal Revenue Code of 1986,
as amended (the "Code") ("excess parachute payments"). If it is determined that
such excise tax would cause the net after-tax parachute payments to be paid to
or on behalf of the Executive to be less than what he would have netted, after
federal, state and local income and social security taxes, had the present value
of his total parachute payments equalled $1 less than three times his "base
amount," as defined under Section 280G(b)(3)(A) of the Code, then such
Executive's total parachute payments shall be reduced (but by the minimum
possible amount), so that their aggregate present value equals $1 less than
three times the Executive's base amount. If it is determined that any payment to
or on behalf of the Executive will be an excess parachute payment, the Company
shall promptly give the Executive notice to that effect, a copy of the detailed
calculation thereof, and an explanation of the calculation of the reduction (if
any) required hereunder. If a reduction hereunder is required, the Executive may
then elect which payments shall be eliminated or reduced (as long
11
as after such election the aggregate present value of the remaining parachute
payments is less than three times the Executive's base amount). The Executive
shall advise the Company in writing of his election within 10 days of his
receipt of this notice. If no such election is made by the Executive, the
Company may elect which and how much of such payments to eliminate or reduce to
accomplish this required reduction, and shall promptly thereafter pay or
distribute for the Executive's benefit such amounts as become due under this
Agreement.
(b) It shall be assumed for purposes of the calculations
described in subsection (a) above that the Executive's income tax rate will be
computed based upon the maximum effective marginal federal, state and local
income tax rates and Medicare tax on earned income, with such maximum effective
federal income tax rate to be computed with regard to Section 68 of the Code,
and applying any available deduction of state and local income taxes for federal
income tax purposes. In the event that the Executive and the Company are unable
to agree as to the amount of the reduction described in subsection (a) above, if
any, the Executive shall select a law firm or public accounting firm from among
those regularly consulted by the Company regarding federal income tax matters,
such law firm
12
or accounting firm shall determine the amount of such reduction, and such firm's
determination shall be final and binding upon the Executive and the Company.
6. Death or Disability.
6.1 Death. If Executive dies during the Term, this
Employment Agreement, other than the provisions of Section 6.3 hereof, shall
terminate.
6.2 Disability. If, during the Term, Executive
becomes physically or mentally disabled, whether totally or partially, so that
he is unable substantially to perform his services hereunder for (i) a period of
six (6) consecutive months or (ii) for shorter periods aggregating six (6)
months during any eighteen (18) month period, the Company may at any time after
the last day of the six (6) consecutive months of disability or the day on which
the shorter periods of disability equal an aggregate of six (6) months, by
written notice to Executive (the "Disability Notice"), terminate the Term of the
Executive's employment hereunder.
6.3 Payments upon Death or Disability. Upon a
termination due to the death or disability of Executive, Executive (or, in the
event of a termination as a result of the death of Executive, Executive's estate
(or a designated beneficiary thereof)) shall be entitled to receive from the
13
Company, and the Company shall pay to Executive (or Executive's estate, if
applicable) the amount of any accrued and unpaid Base Salary and other benefits
and reimbursement of expenses payable to the Executive hereunder pursuant to
Sections 4.3 and 4.4 hereof as of the date of Executive's death or the date of
the Disability Notice, as applicable. In addition, for a period of thirty (30)
months following the date of such termination, the Company shall continue to pay
and provide to Executive and Executive's dependents at the Date of Termination
all medical benefits pursuant to any plans and programs in which Executive was
entitled to participate immediately prior to the Date of Termination as if
Executive were still employed by the Company pursuant hereto. If Executive's
participation in any plan or program pursuant to which such medical benefits are
provided to Executive is barred as a result of such termination, the Company
shall arrange to provide Executive and Executive's dependents with benefits
substantially similar on an after tax basis to those which Executive was
entitled to receive under such plan or program.
7. Non-Competition; Confidentiality.
7.1 Non-Competition. Executive agrees that, during
the Term and for a period of two years following the date of a termination of
Executive's employment under
14
Section 5 hereof (the "Restricted Period"), he will not, directly or indirectly,
own, manage, operate or control, or participate in the ownership, management,
operation or control of, or be connected as an officer, employee, partner,
director or otherwise with, or have any financial interest in, or aid or assist
anyone else in the conduct of, any entity or business which competes with any
material business conducted by the Company or by any group, division or
subsidiary of the Company, in any area where such business is being conducted,
or for which negotiations to conduct business are pending, at the date of such
termination (a "Competitive Operation"); provided, however, that Executive may
acquire, solely as an investment and through market purchases, securities of any
corporation that are traded on any national securities exchange or listed on the
National Association of Securities Dealers Automated Quotation System
("NASDAQ"), if Executive is not a controlling person of, or a member of a group
which controls, such corporation; and Executive does not, directly or
indirectly, own more than one percent (1%) of any class of securities of such
corporation.
7.2 Confidential Information; Personal Relationships.
Executive agrees that, during the Term and thereafter, he shall keep secret and
retain in strictest
15
confidence, and shall not use for his benefit or the benefit of others, any and
all confidential information relating to the Company, including, without
limitation, trade secrets, customer lists, financial plans or projections,
pricing policies, marketing plans or strategies, business acquisition or
divestiture plans, new personnel acquisition plans, technical processes,
inventions and other research projects heretofore or hereafter learned by
Executive, and he shall not disclose any such information to anyone outside the
Company or any of its subsidiaries, except as required by law in connection with
any judicial or administrative proceeding or inquiry (provided prior written
notice thereof is given by Executive to the Company) or except with the
Company's prior written consent, unless such information is known generally to
the public or the trade through sources other than Executive's unauthorized
disclosure.
7.3 Property of the Company. All memoranda, notes,
lists, records and other documents or papers (and all copies thereof), including
such items stored in computer memories, or microfiche or by any other means,
made or compiled by or on behalf of Executive, or made available to Executive,
relating to the Company or any successors thereto, are and shall be the property
of the Company or any such
16
successor and shall be delivered to the Company or any such
successor promptly at any time on request.
7.4 Employees of the Company. During the Restricted
Period, the Executive shall not, directly or indirectly, hire, solicit or
encourage to leave the employment of the Company, any of its employees or hire
any such employee who has left the employment of the Company.
7.5 Rights and Remedies Upon Breach. If Executive
breaches, or threatens to commit a breach of, any of the provisions of this
Section 7 (the "Restrictive Covenants"), the Company and any successor thereto
shall have the following rights and remedies, each of which shall be independent
of the other and severally enforceable, and all of which shall be in addition
to, and not in lieu of, any other rights and remedies available to the Company
under law or in equity.
(a) Specific Performance. The right and remedy to
have the Restrictive Covenants specifically enforced by any arbitrator or any
court having equity jurisdiction, it being acknowledged and agreed by Executive
that any such breach or threatened breach will cause irreparable injury to the
Company and that money damages will not provide an adequate remedy to the
Company.
17
(b) Accounting. The right and remedy to require
Executive to account for and pay over to the Company all compensation, profits,
monies, accruals, increments or other benefits (collectively, "Benefits")
derived or received by Executive as the result of any transactions constituting
a breach of any of the Restrictive Covenants, and Executive shall account for
and pay over such Benefits to the Company.
7.6 Severability of Covenants. Executive acknowledges
and agrees that the Restrictive Covenants are reasonable and valid in
geographical and temporal scope and in all other respects. Notwithstanding the
foregoing, if any arbitrator or court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable or should be
reduced, the remainder of the Restrictive Covenants shall not thereby be
affected and shall be given full effect without regard to the invalid
Restrictive Covenants or portions thereof.
8. Insurance. The Company may, from time to time, apply for
and take out, in its own name and at its own expense, naming itself or others as
the designated beneficiary (which it may change from time to time), policies for
health, accident, disability or other insurance upon Executive in any amount
that it may deem necessary or appropriate
18
to protect its interest. Executive agrees to aid the Company in procuring such
insurance by submitting to reasonable medical examinations and by filling out,
executing and delivering such applications and other instruments in writing as
may reasonably be required by any insurance company to which the Company may
apply for insurance.
9. Indemnification. To the fullest extent permitted or
required by the laws of the State of Ohio, the Company shall indemnify and hold
harmless Executive, in accordance with the terms of such laws, if Executive is
made a party, or threatened to be made a party, to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that Executive is or was an officer or
director of the Company, or any subsidiary or affiliate of the Company in which
capacity Executive is or was serving at the Company's request, against expenses
(including reasonable attorneys' fees), judgments, fines and amounts paid in
settlement, all as actually and reasonably incurred by him in connection with
such action, suit or proceeding. In the event it becomes necessary for Executive
to take any action to enforce the indemnity provided herein, Executive shall be
promptly reimbursed by the Company for all costs and
19
expenses associated therewith (including reasonable attorneys' fees).
10. Arbitration. All disputes arising under or related to this
Agreement shall be resolved by arbitration. Such arbitration shall be conducted
by an arbitrator mutually selected by the Company and Executive (or, if the
Company and Executive are unable to agree upon an arbitrator within ten (10)
days, then the Company and Executive shall each select an arbitrator, and the
arbitrators so selected shall mutually select a third arbitrator, who shall
resolve such dispute). Such arbitration shall be conducted in accordance with
the applicable rules of the American Arbitration Association. Any decision
rendered by an arbitrator pursuant hereto may be enforced by a court of
competent jurisdiction without review of such decision by such court. The
Company shall pay all of the fees and expenses of the arbitrators and the other
costs of arbitration. The Company also shall pay Executive's reasonable legal
fees and expenses incurred in connection with any successful enforcement by
Executive of his rights hereunder.
11. Miscellaneous.
11.1 Notices. Any notice or other communication
required or permitted hereunder shall be in writing
20
and shall be delivered personally, telecopied or sent by certified or registered
mail, postage prepaid, or by Federal Express or similar overnight courier. Any
such notice shall be deemed given when delivered:
(i) if to the Company, to:
Eagle-Picher Industries, Inc.
580 Walnut Street
Cincinnati, Ohio 45201
Attn: General Counsel
Telecopy No.: (513) 721-3404
(ii) if to Executive, to:
Thomas E. Petry
Eagle-Picher Industries, Inc.
580 Walnut Street
Cincinnati, Ohio 45201
Telecopy No.: (513) 721-2779
11.2 Waivers and Amendments. This Agreement may not
be amended, modified, superseded or cancelled except by a written instrument
signed by the Company and Executive. No delay on the part of any party in
exercising any right or remedy hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right or remedy, nor any
single or partial exercise of any such right or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy.
11.3 Survival. The provisions of Sections 7 and 9
hereof shall survive the Term, irrespective of the reasons for termination of
Executive's employment hereunder.
21
11.4 Governing Law. This Agreement shall be governed
by and construed in accordance with the law of the State of Ohio applicable to
agreements made and to be performed entirely within such State.
11.5 Entire Agreement. This Agreement (including
the schedules, annexes and exhibits hereto) contain the entire agreement between
the parties with respect to the subject matter hereof and supersede all prior
agreements, proposals or representations, arrangements or understandings,
written or oral, with respect thereto.
11.6 Assignment. This Agreement, and any rights and
obligations hereunder, may not be assigned by any party hereto without the prior
written consent of the other party.
11.7 Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an
22
original but all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
EAGLE-PICHER INDUSTRIES, INC.
By /s/ ANDRIES RUIJSSENAARS
------------------------
Name: Andries Ruijssenaars
Title: President and Chief
Operating Officer
/s/ THOMAS E. PETRY
------------------------
Thomas E. Petry
23
ANNEX A
TO EMPLOYMENT AGREEMENT OF
THOMAS E. PETRY
Position: Chairman and Chief Executive Officer
Duties: Serves as presiding officer of the Board of Directors. In that
capacity guides the deliberations and activities of that group.
Responsible for directing the Company toward the objective of
providing maximum profit and return on invested capital.
Establishes short-term and long-range objectives, plans, and
policies, subject to the approval of the Board of Directors.
Represents the Company before all of its constituencies,
including, without limitation, major customers, the financial
community, the Company's operations and host communities, and
the public.
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of November 29, 1996, between EAGLE-PICHER
INDUSTRIES, INC. (the "Company"), having its principal executive offices at 580
Walnut Street, Cincinnati, Ohio 45201, and Carroll D. Curless (the "Executive"),
residing at 2117 Beechcreek Lane, Cincinnati, Ohio 45233.
W I T N E S S E T H :
WHEREAS, the Executive is employed on a full-time basis by the
Company and is currently serving as Vice President and Controller of the
Company; and
WHEREAS, on January 7, 1991, the Company and certain of its
affiliates (collectively, the "Debtors") each filed a petition for relief under
chapter 11, title 11 of the United States Code (the "Bankruptcy Code") in the
United States Bankruptcy Court for the Southern District of Ohio, Western
Division (the "Bankruptcy Court"); and
WHEREAS, by order dated November 18, 1996 (the "Confirmation
Order") the Bankruptcy Court and the United States District Court for the
Southern District of Ohio, Western Division, confirmed the Third Amended
Consolidated Plan of Reorganization, dated August 28, 1996 (the "Plan"), in the
Debtors' chapter 11 cases; and
WHEREAS, the Plan contemplates that the Company and the
Executive will enter into this Agreement which is to
become effective on the Effective Date (as such term is defined in the Plan).
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter contained, the parties hereto agree as follows:
1. Employment; Effectiveness of Agreement. The obligation of
the Company to employ the Executive, and of the Executive to serve the Company,
pursuant to this Agreement shall become effective automatically on the Effective
Date.
2. Term. The term of Executive's employment hereunder
(hereinafter referred to as the "Term") shall commence on the Effective Date and
shall continue thereafter until the date which is thirty (30) months from and
after the date on which the Confirmation Order was entered by the Bankruptcy
Court, unless terminated earlier as hereinafter provided.
3. Duties and Extent of Services. During the Term, Executive
agrees to continue to serve as the Vice President and Controller of the Company
faithfully and to the best of his ability under the direction of the Chief
Executive Officer and the Board of Directors of the Company (the "Board"), and
agrees to devote substantially all of his business time, energy and skill to
such employment. Execu-
2
tive agrees to perform the duties commensurate with the position of Vice
President and Controller of the Company, which shall include, without
limitation, the duties set forth on Annex A hereto. Executive agrees also to
perform such specific duties and services of a senior executive nature as the
Chief Executive Officer of the Company or the Board shall reasonably request
consistent with Executive's position as Vice President and Controller. The
principal place of employment of Executive shall be Cincinnati, Ohio and,
subject to such reasonable travel as the performance of his duties may require,
such principal place of employment shall not be changed unless the Executive
otherwise consents.
4. Compensation.
4.1 Base Salary. The Company agrees to pay or cause
to be paid to Executive during the Term, a base salary equal to the amount of
his base salary as at the date immediately preceding the Effective Date, subject
to adjustment as provided below (as so adjusted, the "Base Salary"). The Base
Salary shall be payable in accordance with the regular payroll policies of the
Company from time to time in effect, less such deductions as shall be required
to be withheld by applicable law and regulations. On each December 1 during the
Term, the Board or a committee
3
thereof, shall review Executive's Base Salary as then in effect and may, but
shall not be obligated to, increase such salary by such amount as the Board (or
such committee), in its sole discretion, shall determine.
4.2 Discretionary Bonus. In addition to Base Salary,
the Executive shall be entitled to receive an annual cash bonus based on the
performance of the Company and of the Executive, the amount of which, if any,
shall be determined by the Board (or a committee thereof). Determinations made
by the Board (or such committee) with respect to the amount, if any, of annual
bonuses to be paid to Executive under this Agreement shall be final and
conclusive.
4.3 Benefits and Perquisites. During the Term, the
Company shall provide Executive with and Executive shall be entitled to the
following benefits and perquisites:
(a) participation in and the receipt of benefits
under (i) all of the Company's employee benefit plans and arrangements in effect
from time to time applicable to salaried employees of the Company, (ii) all
short-term and long-term incentive plans of the Company as in effect from time
to time, (iii) a supplemental executive retirement plan (the "SERP")
substantially in accordance with and no less favorable to Executive than the
terms,
4
provisions and benefits under the supplemental executive retirement plan
currently provided by the Company, and (iv) any life insurance, health and
accident plan or arrangement made available by the Company, now or in the
future, to its executives and key management employees, subject to and on a
basis consistent with the terms, conditions and overall administration of such
plans and arrangements.
(b) four (4) weeks of paid vacation in each calendar
year.
(c) an automobile paid for by the Company for use in
the performance of his services under this Agreement, in a manner substantially
consistent with past practices.
(d) membership fees paid for by the Company with
respect to any of the Executive's business-related club memberships (it being
understood that such membership fees shall not include any fees for country
clubs or other similar, primarily social, clubs).
The Company also shall implement, as soon as reasonably
practicable after the Effective Date, a long-term incentive plan. Although the
ability to receive stock of the Company may not be available for such plan, the
plan nevertheless shall provide the Executive with opportunities and incentives
reasonably economically equivalent to those
5
provided by similar companies, many of which do provide stock options and/or
other types of stock grants as components of their long-term incentive plans.
4.4 Expenses. Subject to such policies as may from
time to time be established by the Board, the Company shall pay or reimburse
Executive for all reasonable expenses actually incurred or paid by Executive
during the Term in the performance of his services under this Agreement, upon
presentation of expense statements or vouchers or such other supporting
information as the Company may require.
5. Termination.
5.1 Cause. The Company may terminate Executive's
employment hereunder for Cause. For the purposes of this Agreement, the Company
shall have "Cause" to terminate Executive's employment hereunder only by reason
of any one or more of the following:
(i) Executive's commission of any crime
(whether or not involving the Company or any of its
subsidiaries) which constitutes a felony in the
jurisdiction involved; or
(ii) Executive's commission of an act of
fraud upon the Company or any or its subsidiaries; or
(iii) Executive's willful failure to
perform in all material respects his duties hereunder
in accordance with the terms of this Agreement which
failure (other than by reason of death or disability)
continues
6
uncorrected for a period of ten (10) days after
Executive shall have received written notice from the
Board stating with specificity the nature of such
failure or refusal.
5.2 Termination by the Executive. Executive may
terminate his employment hereunder upon thirty (30) days' prior written notice
to the Company for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean (i) the material diminution of the nature or scope of the duties
assigned to Executive from that contemplated by Section 3 hereof, (ii) a
reduction in Executive's Base Salary, or a material reduction in Executive's
fringe benefits or any other material failure by the Company to comply with
Section 4 hereof, other than any such reduction or failure as shall apply to all
salaried employees of the Company generally, (iii) ceased participation by
Executive, for any reason other than as a result of any action by Executive, in
any employee benefit plan of the Company with respect to which Executive is or
was, prior to such time, eligible to participate, (iv) the relocation of
Executive's principal place of employment more than twenty (20) miles from the
location specified in Section 3 hereof without Executive's consent, (v) the
requirement that Executive engage in a substantial amount of additional travel
(as compared to Executive's past practices) in the performance of his duties
7
hereunder without Executive's consent, or (vi) any other material breach by the
Company of its obligations under this Agreement. Good Reason shall not exist in
the event of a sale or disposition of a subsidiary or division of the Company
and Executive either (a) voluntarily agrees to be employed by such subsidiary or
division, or (b) is offered a comparable position with the Company. For purposes
hereof, comparable shall encompass such items as salary, benefits, duties and
geographic location.
5.3 Notice of Termination. Any termination by the
Company pursuant to Section 5.1 above or by Executive pursuant to Section 5.2
above shall be communicated by written notice (the "Notice of Termination"),
which notice shall indicate the specific termination provision in this Agreement
relied upon for such termination.
5.4 Date of Termination. "Date of Termination" shall
mean (i) if Executive's employment is terminated pursuant to Section 5.1 or 5.2
hereof, the date specified in the Notice of Termination, and (ii) if Executive's
employment is terminated by the Company other than for Cause or by Executive
other than for Good Reason, the date on which a Notice of Termination is given.
5.5 Payments upon Termination. (a) If the employment
of Executive with the Company is terminated (i)
8
by the Company other than for Cause or (ii) by the Executive for Good Reason,
then Executive shall be entitled to receive from the Company, and the Company
shall pay to Executive, a lump sum severance payment equal to the greater of (x)
the aggregate Base Salary (at the rate in effect at the Date of Termination)
that Executive would have received for the remainder of the Term if his
employment had not been terminated, or (y) the aggregate amount of the Base
Salary (at the rate in effect at the Date of Termination) which would be paid
for a period of twenty-four (24) months, plus, in either case, such other
benefits or reimbursement of expenses payable to the Executive pursuant to
Sections 4.3 and 4.4 hereof (including, without limitation, the SERP), and less
such amounts as shall be required to be withheld by the Company pursuant to
applicable laws and regulations (the "Severance Amount"). The Severance Amount
shall not be present-valued and shall be payable by the Company to Executive
within thirty (30) days after Executive's termination. Executive shall not be
required to mitigate the Company's obligation to pay the full Severance Amount
by seeking employment or otherwise and the Severance Amount shall not be
decreased or otherwise offset as a result of any compensation received by
Executive from employment in any capacity. The Severance Amount shall be deemed
9
compensation payable to Executive for the purpose of determining the total
amount due Executive pursuant to the SERP.
(b) If the employment of Executive with the Company is
terminated (i) by the Company for Cause, or (ii) by the Executive other than for
Good Reason, then the Executive shall be entitled to receive, and the Company
shall pay to Executive, (x) all accrued and unpaid Base Salary and amounts due
Executive in respect of perquisites provided him hereunder through the Date of
Termination at the rate in effect at the time Notice of Termination is given,
(y) Base Salary payable in lieu of accrued and unused vacation days in
accordance with the policies of the Company from time to time in effect, and (z)
all accrued and unpaid benefits payable to Executive pursuant to any benefit
plan or otherwise through the Date of Termination. Upon the payment of the
foregoing amounts, the Company shall have no further obligations to Executive
under this Agreement.
5.6 Limited Payment Cap. (a) Notwithstanding any
other provision in this Agreement to the contrary, this Section 5.6 will apply
in the event that the Executive would receive payments under this Agreement or
under any other plan, agreement, program, or policy that is sponsored by the
Company, which relate to a change in
10
control of the Company ("parachute payments"), and any such parachute payments
are determined by the Company to be subject to excise tax under Section 4999 of
the Internal Revenue Code of 1986, as amended (the "Code") ("excess parachute
payments"). If it is determined that such excise tax would cause the net
after-tax parachute payments to be paid to or on behalf of the Executive to be
less than what he would have netted, after federal, state and local income and
social security taxes, had the present value of his total parachute payments
equalled $1 less than three times his "base amount," as defined under Section
280G(b)(3)(A) of the Code, then such Executive's total parachute payments shall
be reduced (but by the minimum possible amount), so that their aggregate present
value equals $1 less than three times the Executive's base amount. If it is
determined that any payment to or on behalf of the Executive will be an excess
parachute payment, the Company shall promptly give the Executive notice to that
effect, a copy of the detailed calculation thereof, and an explanation of the
calculation of the reduction (if any) required hereunder. If a reduction
hereunder is required, the Executive may then elect which payments shall be
eliminated or reduced (as long as after such election the aggregate present
value of the remaining parachute payments is less than three times the
11
Executive's base amount). The Executive shall advise the Company in writing of
his election within 10 days of his receipt of this notice. If no such election
is made by the Executive, the Company may elect which and how much of such
payments to eliminate or reduce to accomplish this required reduction, and shall
promptly thereafter pay or distribute for the Executive's benefit such amounts
as become due under this Agreement.
(b) It shall be assumed for purposes of the calculations
described in subsection (a) above that the Executive's income tax rate will be
computed based upon the maximum effective marginal federal, state and local
income tax rates and Medicare tax on earned income, with such maximum effective
federal income tax rate to be computed with regard to Section 68 of the Code,
and applying any available deduction of state and local income taxes for federal
income tax purposes. In the event that the Executive and the Company are unable
to agree as to the amount of the reduction described in subsection (a) above, if
any, the Executive shall select a law firm or public accounting firm from among
those regularly consulted by the Company regarding federal income tax matters,
such law firm or accounting firm shall determine the amount of such
12
reduction, and such firm's determination shall be final and binding upon the
Executive and the Company.
6. Death or Disability.
6.1 Death. If Executive dies during the Term, this
Employment Agreement, other than the provisions of Section 6.3 hereof, shall
terminate.
6.2 Disability. If, during the Term, Executive
becomes physically or mentally disabled, whether totally or partially, so that
he is unable substantially to perform his services hereunder for (i) a period of
six (6) consecutive months or (ii) for shorter periods aggregating six (6)
months during any eighteen (18) month period, the Company may at any time after
the last day of the six (6) consecutive months of disability or the day on which
the shorter periods of disability equal an aggregate of six (6) months, by
written notice to Executive (the "Disability Notice"), terminate the Term of the
Executive's employment hereunder.
6.3 Payments upon Death or Disability. Upon a
termination due to the death or disability of Executive, Executive (or, in the
event of a termination as a result of the death of Executive, Executive's estate
(or a designated beneficiary thereof)) shall be entitled to receive from the
Company, and the Company shall pay to Executive (or Execu-
13
tive's estate, if applicable) the amount of any accrued and unpaid Base Salary
and other benefits and reimbursement of expenses payable to the Executive
hereunder pursuant to Sections 4.3 and 4.4 hereof as of the date of Executive's
death or the date of the Disability Notice, as applicable. In addition, for a
period of thirty (30) months following the date of such termination, the Company
shall continue to pay and provide to Executive and Executive's dependents at the
Date of Termination all medical benefits pursuant to any plans and programs in
which Executive was entitled to participate immediately prior to the Date of
Termination as if Executive were still employed by the Company pursuant hereto.
If Executive's participation in any plan or program pursuant to which such
medical benefits are provided to Executive is barred as a result of such
termination, the Company shall arrange to provide Executive and Executive's
dependents with benefits substantially similar on an after tax basis to those
which Executive was entitled to receive under such plan or program.
7. Non-Competition; Confidentiality.
7.1 Non-Competition. Executive agrees that, during
the Term and for a period of two years following the date of a termination of
Executive's employment under Section 5 hereof (the "Restricted Period"), he will
not,
14
directly or indirectly, own, manage, operate or control, or participate in the
ownership, management, operation or control of, or be connected as an officer,
employee, partner, director or otherwise with, or have any financial interest
in, or aid or assist anyone else in the conduct of, any entity or business which
competes with any material business conducted by the Company or by any group,
division or subsidiary of the Company, in any area where such business is being
conducted, or for which negotiations to conduct business are pending, at the
date of such termination (a "Competitive Operation"); provided, however, that
Executive may acquire, solely as an investment and through market purchases,
securities of any corporation that are traded on any national securities
exchange or listed on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), if Executive is not a controlling person of, or a
member of a group which controls, such corporation; and Executive does not,
directly or indirectly, own more than one percent (1%) of any class of
securities of such corporation.
7.2 Confidential Information; Personal Relationships.
Executive agrees that, during the Term and thereafter, he shall keep secret and
retain in strictest confidence, and shall not use for his benefit or the benefit
15
of others, any and all confidential information relating to the Company,
including, without limitation, trade secrets, customer lists, financial plans or
projections, pricing policies, marketing plans or strategies, business
acquisition or divestiture plans, new personnel acquisition plans, technical
processes, inventions and other research projects heretofore or hereafter
learned by Executive, and he shall not disclose any such information to anyone
outside the Company or any of its subsidiaries, except as required by law in
connection with any judicial or administrative proceeding or inquiry (provided
prior written notice thereof is given by Executive to the Company) or except
with the Company's prior written consent, unless such information is known
generally to the public or the trade through sources other than Executive's
unauthorized disclosure.
7.3 Property of the Company. All memoranda, notes,
lists, records and other documents or papers (and all copies thereof), including
such items stored in computer memories, or microfiche or by any other means,
made or compiled by or on behalf of Executive, or made available to Executive,
relating to the Company or any successors thereto, are and shall be the property
of the Company or any such successor and shall be delivered to the Company or
any such successor promptly at any time on request.
16
7.4 Employees of the Company. During the Restricted
Period, the Executive shall not, directly or indirectly, hire, solicit or
encourage to leave the employment of the Company, any of its employees or hire
any such employee who has left the employment of the Company.
7.5 Rights and Remedies Upon Breach. If Executive
breaches, or threatens to commit a breach of, any of the provisions of this
Section 7 (the "Restrictive Covenants"), the Company and any successor thereto
shall have the following rights and remedies, each of which shall be independent
of the other and severally enforceable, and all of which shall be in addition
to, and not in lieu of, any other rights and remedies available to the Company
under law or in equity.
(a) Specific Performance. The right and remedy to
have the Restrictive Covenants specifically enforced by any arbitrator or any
court having equity jurisdiction, it being acknowledged and agreed by Executive
that any such breach or threatened breach will cause irreparable injury to the
Company and that money damages will not provide an adequate remedy to the
Company.
(b) Accounting. The right and remedy to require
Executive to account for and pay over to the Company all compensation, profits,
monies, accruals, increments or
17
other benefits (collectively, "Benefits") derived or received by Executive as
the result of any transactions constituting a breach of any of the Restrictive
Covenants, and Executive shall account for and pay over such Benefits to the
Company.
7.6 Severability of Covenants. Executive acknowledges
and agrees that the Restrictive Covenants are reasonable and valid in
geographical and temporal scope and in all other respects. Notwithstanding the
foregoing, if any arbitrator or court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable or should be
reduced, the remainder of the Restrictive Covenants shall not thereby be
affected and shall be given full effect without regard to the invalid
Restrictive Covenants or portions thereof.
8. Insurance. The Company may, from time to time, apply for
and take out, in its own name and at its own expense, naming itself or others as
the designated beneficiary (which it may change from time to time), policies for
health, accident, disability or other insurance upon Executive in any amount
that it may deem necessary or appropriate to protect its interest. Executive
agrees to aid the Company in procuring such insurance by submitting to
reasonable medical examinations and by filling out, executing and
18
delivering such applications and other instruments in writing as may reasonably
be required by any insurance company to which the Company may apply for
insurance.
9. Indemnification. To the fullest extent permitted or
required by the laws of the State of Ohio, the Company shall indemnify and hold
harmless Executive, in accordance with the terms of such laws, if Executive is
made a party, or threatened to be made a party, to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that Executive is or was an officer or
director of the Company, or any subsidiary or affiliate of the Company in which
capacity Executive is or was serving at the Company's request, against expenses
(including reasonable attorneys' fees), judgments, fines and amounts paid in
settlement, all as actually and reasonably incurred by him in connection with
such action, suit or proceeding. In the event it becomes necessary for Executive
to take any action to enforce the indemnity provided herein, Executive shall be
promptly reimbursed by the Company for all costs and expenses associated
therewith (including reasonable attorneys' fees).
10. Arbitration. All disputes arising under or related to this
Agreement shall be resolved by arbitration.
19
Such arbitration shall be conducted by an arbitrator mutually selected by the
Company and Executive (or, if the Company and Executive are unable to agree upon
an arbitrator within ten (10) days, then the Company and Executive shall each
select an arbitrator, and the arbitrators so selected shall mutually select a
third arbitrator, who shall resolve such dispute). Such arbitration shall be
conducted in accordance with the applicable rules of the American Arbitration
Association. Any decision rendered by an arbitrator pursuant hereto may be
enforced by a court of competent jurisdiction without review of such decision by
such court. The Company shall pay all of the fees and expenses of the
arbitrators and the other costs of arbitration. The Company also shall pay
Executive's reasonable legal fees and expenses incurred in connection with any
successful enforcement by Executive of his rights hereunder.
11. Miscellaneous.
11.1 Notices. Any notice or other communication
required or permitted hereunder shall be in writing and shall be delivered
personally, telecopied or sent by certified or registered mail, postage prepaid,
or by Federal Express or similar overnight courier. Any such notice shall be
deemed given when delivered:
20
(i) if to the Company, to:
Eagle-Picher Industries, Inc.
580 Walnut Street
Cincinnati, Ohio 45201
Attn: General Counsel
Telecopy No.: (513) 721-3404
(ii) if to Executive, to:
Carroll D. Curless
Eagle-Picher Industries, Inc.
580 Walnut Street
Cincinnati, Ohio 45201
Telecopy No.: (513) 721-2779
11.2 Waivers and Amendments. This Agreement may not
be amended, modified, superseded or cancelled except by a written instrument
signed by the Company and Executive. No delay on the part of any party in
exercising any right or remedy hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right or remedy, nor any
single or partial exercise of any such right or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy.
11.3 Survival. The provisions of Sections 7 and 9
hereof shall survive the Term, irrespective of the reasons for termination of
Executive's employment hereunder.
11.4 Governing Law. This Agreement shall be governed
by and construed in accordance with the law of the State of Ohio applicable to
agreements made and to be performed entirely within such State.
21
11.5 Entire Agreement. This Agreement (including the
schedules, annexes and exhibits hereto) contain the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
agreements, proposals or representations, arrangements or understandings,
written or oral, with respect thereto.
11.6 Assignment. This Agreement, and any rights and
obligations hereunder, may not be assigned by any party hereto without the prior
written consent of the other party.
11.7 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.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
EAGLE-PICHER INDUSTRIES, INC.
By /s/ THOMAS E. PETRY
-------------------------
Name: Thomas E. Petry
Title: Chairman of the Board
of Directors and Chief
Executive Officer
/s/ CARROLL D. CURLESS
-------------------------
Carroll D. Curless
22
ANNEX A
TO EMPLOYMENT AGREEMENT OF
CARROLL D. CURLESS
------------------
Position: Vice President and Controller
Duties: Directs and has responsibility for the Company's accounting
practices, the maintenance of its fiscal records, and the
preparation of its financial reports. Directs and has
overall supervisory responsibility for general and property
accounting, internal auditing, cost accounting, and
budgetary controls. Appraises operating results in terms of
costs, budgets, policies of operations, trends and increased
profit opportunities.
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of November 29, 1996, between EAGLE-PICHER
INDUSTRIES, INC. (the "Company"), having its principal executive offices at 580
Walnut Street, Cincinnati, Ohio 45201, and Andries Ruijssenaars (the
"Executive"), residing at 4875 Councilrock Lane, Cincinnati, Ohio 45243.
W I T N E S S E T H :
WHEREAS, the Executive is employed on a full-time basis by the
Company and is currently serving as President and Chief Operating Officer of the
Company; and
WHEREAS, on January 7, 1991, the Company and certain of its
affiliates (collectively, the "Debtors") each filed a petition for relief under
chapter 11, title 11 of the United States Code (the "Bankruptcy Code") in the
United States Bankruptcy Court for the Southern District of Ohio, Western
Division (the "Bankruptcy Court"); and
WHEREAS, by order dated November 18, 1996 (the "Confirmation
Order") the Bankruptcy Court and the United States District Court for the
Southern District of Ohio, Western Division, confirmed the Third Amended
Consolidated Plan of Reorganization, dated August 28, 1996 (the "Plan"), in the
Debtors' chapter 11 cases; and
WHEREAS, the Plan contemplates that the Company and the
Executive will enter into this Agreement which is to
1
become effective on the Effective Date (as such term is defined in the Plan).
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter contained, the parties hereto agree as follows:
1. Employment; Effectiveness of Agreement. The obligation of
the Company to employ the Executive, and of the Executive to serve the Company,
pursuant to this Agreement shall become effective automatically on the
Effective Date.
2. Term. The term of Executive's employment hereunder
(hereinafter referred to as the "Term") shall commence on the Effective Date and
shall continue thereafter until the date which is thirty (30) months from and
after the date on which the Confirmation Order was entered by the Bankruptcy
Court, unless terminated earlier as hereinafter provided.
3. Duties and Extent of Services. During the Term, Executive
agrees to continue to serve as the President and Chief Operating Officer of the
Company faithfully and to the best of his ability under the direction of the
Chief Executive Officer and the Board of Directors of the Company (the "Board"),
and agrees to devote substantially all of his business time, energy and skill to
such employment.
2
Executive agrees to perform the duties commensurate with the position of
President and Chief Operating Officer of the Company, which shall include,
without limitation, the duties set forth on Annex A hereto. Executive agrees
also to perform such specific duties and services of a senior executive nature
as the Chief Executive Officer of the Company or the Board shall reasonably
request consistent with Executive's position as President and Chief Operating
Officer. The principal place of employment of Executive shall be Cincinnati,
Ohio and, subject to such reasonable travel as the performance of his duties may
require, such principal place of employment shall not be changed unless the
Executive otherwise consents.
4. Compensation.
4.1 Base Salary. The Company agrees to pay or cause
to be paid to Executive during the Term, a base salary equal to the amount of
his base salary as at the date immediately preceding the Effective Date, subject
to adjustment as provided below (as so adjusted, the "Base Salary"). The Base
Salary shall be payable in accordance with the regular payroll policies of the
Company from time to time in effect, less such deductions as shall be required
to be withheld by applicable law and regulations. On each December 1 during the
Term, the Board or a committee
3
thereof, shall review Executive's Base Salary as then in effect and may, but
shall not be obligated to, increase such salary by such amount as the Board (or
such committee), in its sole discretion, shall determine.
4.2 Discretionary Bonus. In addition to Base Salary, the
Executive shall be entitled to receive an annual cash bonus based on the
performance of the Company and of the Executive, the amount of which, if any,
shall be determined by the Board (or a committee thereof). Determinations made
by the Board (or such committee) with respect to the amount, if any, of annual
bonuses to be paid to Executive under this Agreement shall be final and
conclusive.
4.3 Benefits and Perquisites. During the Term, the Company
shall provide Executive with and Executive shall be entitled to the following
benefits and perquisites:
(a) participation in and the receipt of
benefits under (i) all of the Company's employee benefit plans and arrangements
in effect from time to time applicable to salaried employees of the Company,
(ii) all short-term and long-term incentive plans of the Company as in effect
from time to time, (iii) a supplemental executive retirement plan (the "SERP")
substantially in accordance with and no less favorable to Executive than the
terms,
4
provisions and benefits under the supplemental executive retirement plan
currently provided by the Company, and (iv) any life insurance, health and
accident plan or arrangement made available by the Company, now or in the
future, to its executives and key management employees, subject to and on a
basis consistent with the terms, conditions and overall administration of such
plans and arrangements.
(b) four (4) weeks of paid vacation in each calendar
year.
(c) an automobile paid for by the Company for use in
the performance of his services under this Agreement, in a manner substantially
consistent with past practices.
(d) membership fees paid for by the Company with
respect to any of the Executive's business-related club memberships (it being
understood that such membership fees shall not include any fees for country
clubs or other similar, primarily social, clubs).
The Company also shall implement, as soon as reasonably
practicable after the Effective Date, a long-term incentive plan. Although the
ability to receive stock of the Company may not be available for such plan, the
plan nevertheless shall provide the Executive with opportunities and incentives
reasonably economically equivalent to those
5
provided by similar companies, many of which do provide stock options and/or
other types of stock grants as components of their long-term incentive plans.
4.4 Expenses. Subject to such policies as may from
time to time be established by the Board, the Company shall pay or reimburse
Executive for all reasonable expenses actually incurred or paid by Executive
during the Term in the performance of his services under this Agreement, upon
presentation of expense statements or vouchers or such other supporting
information as the Company may require.
5. Termination.
5.1 Cause. The Company may terminate Executive's
employment hereunder for Cause. For the purposes of this Agreement, the Company
shall have "Cause" to terminate Executive's employment hereunder only by reason
of any one or more of the following:
(i) Executive's commission of any
crime (whether or not involving the Company
or any of its subsidiaries) which constitutes
a felony in the jurisdiction involved; or
(ii) Executive's commission of an
act of fraud upon the Company or any or its
subsidiaries; or
(iii) Executive's willful failure to
perform in all material respects his duties hereunder
in accordance with the terms of this Agreement which
failure (other than by reason of death or disability)
continues
6
uncorrected for a period of ten (10) days after
Executive shall have received written notice from the
Board stating with specificity the nature of such
failure or refusal.
5.2 Termination by the Executive. Executive
may terminate his employment hereunder upon thirty (30) days' prior written
notice to the Company for Good Reason. For purposes of this Agreement, "Good
Reason" shall mean (i) the material diminution of the nature or scope of the
duties assigned to Executive from that contemplated by Section 3 hereof, (ii) a
reduction in Executive's Base Salary, or a material reduction in Executive's
fringe benefits or any other material failure by the Company to comply with
Section 4 hereof, other than any such reduction or failure as shall apply to all
salaried employees of the Company generally, (iii) ceased participation by
Executive, for any reason other than as a result of any action by Executive, in
any employee benefit plan of the Company with respect to which Executive is or
was, prior to such time, eligible to participate, (iv) the relocation of
Executive's principal place of employment more than twenty (20) miles from the
location specified in Section 3 hereof without Executive's consent, (v) the
requirement that Executive engage in a substantial amount of additional travel
(as compared to Executive's past practices) in the performance of his duties
7
hereunder without Executive's consent, or (vi) any other material breach by the
Company of its obligations under this Agreement. Good Reason shall not exist in
the event of a sale or disposition of a subsidiary or division of the Company
and Executive either (a) voluntarily agrees to be employed by such subsidiary or
division, or (b) is offered a comparable position with the Company. For purposes
hereof, comparable shall encompass such items as salary, benefits, duties and
geographic location.
5.3 Notice of Termination. Any termination by the
Company pursuant to Section 5.1 above or by Executive pursuant to Section 5.2
above shall be communicated by written notice (the "Notice of Termination"),
which notice shall indicate the specific termination provision in this Agreement
relied upon for such termination.
5.4 Date of Termination. "Date of Termination"
shall mean (i) if Executive's employment is terminated pursuant to Section 5.1
or 5.2 hereof, the date specified in the Notice of Termination, and (ii) if
Executive's employment is terminated by the Company other than for Cause or by
Executive other than for Good Reason, the date on which a Notice of Termination
is given.
5.5 Payments upon Termination. (a) If the employment
of Executive with the Company is terminated (i)
8
by the Company other than for Cause or (ii) by the Executive for Good Reason,
then Executive shall be entitled to receive from the Company, and the Company
shall pay to Executive, a lump sum severance payment equal to the greater of (x)
the aggregate Base Salary (at the rate in effect at the Date of Termination)
that Executive would have received for the remainder of the Term if his
employment had not been terminated, or (y) the aggregate amount of the Base
Salary (at the rate in effect at the Date of Termination) which would be paid
for a period of twenty-four (24) months, plus, in either case, such other
benefits or reimbursement of expenses payable to the Executive pursuant to
Sections 4.3 and 4.4 hereof (including, without limitation, the SERP), and less
such amounts as shall be required to be withheld by the Company pursuant to
applicable laws and regulations (the "Severance Amount"). The Severance Amount
shall not be present-valued and shall be payable by the Company to Executive
within thirty (30) days after Executive's termination. Executive shall not be
required to mitigate the Company's obligation to pay the full Severance Amount
by seeking employment or otherwise and the Severance Amount shall not be
decreased or otherwise offset as a result of any compensation received by
Executive from employment in any capacity. The Severance Amount shall be deemed
9
compensation payable to Executive for the purpose of determining the total
amount due Executive pursuant to the SERP.
(b) If the employment of Executive with the Company is
terminated (i) by the Company for Cause, or (ii) by the Executive other than for
Good Reason, then the Executive shall be entitled to receive, and the Company
shall pay to Executive, (x) all accrued and unpaid Base Salary and amounts due
Executive in respect of perquisites provided him hereunder through the Date of
Termination at the rate in effect at the time Notice of Termination is given,
(y) Base Salary payable in lieu of accrued and unused vacation days in
accordance with the policies of the Company from time to time in effect, and (z)
all accrued and unpaid benefits payable to Executive pursuant to any benefit
plan or otherwise through the Date of Termination. Upon the payment of the
foregoing amounts, the Company shall have no further obligations to Executive
under this Agreement.
5.6. Limited Payment Cap. (a) Notwithstanding any
other provision in this Agreement to the contrary, this Section 5.6 will apply
in the event that the Executive would receive payments under this Agreement or
under any other plan, agreement, program, or policy that is sponsored by the
Company, which relate to a change in
10
control of the Company ("parachute payments"), and any such parachute payments
are determined by the Company to be subject to excise tax under Section 4999 of
the Internal Revenue Code of 1986, as amended (the "Code") ("excess parachute
payments"). If it is determined that such excise tax would cause the net
after-tax parachute payments to be paid to or on behalf of the Executive to be
less than what he would have netted, after federal, state and local income and
social security taxes, had the present value of his total parachute payments
equalled $1 less than three times his "base amount," as defined under Section
280G(b)(3)(A) of the Code, then such Executive's total parachute payments shall
be reduced (but by the minimum possible amount), so that their aggregate present
value equals $1 less than three times the Executive's base amount. If it is
determined that any payment to or on behalf of the Executive will be an excess
parachute payment, the Company shall promptly give the Executive notice to that
effect, a copy of the detailed calculation thereof, and an explanation of the
calculation of the reduction (if any) required hereunder. If a reduction
hereunder is required, the Executive may then elect which payments shall be
eliminated or reduced (as long as after such election the aggregate present
value of the remaining parachute payments is less than three times the
11
Executive's base amount). The Executive shall advise the Company in writing of
his election within 10 days of his receipt of this notice. If no such election
is made by the Executive, the Company may elect which and how much of such
payments to eliminate or reduce to accomplish this required reduction, and shall
promptly thereafter pay or distribute for the Executive's benefit such amounts
as become due under this Agreement.
(b) It shall be assumed for purposes of the calculations
described in subsection (a) above that the Executive's income tax rate will be
computed based upon the maximum effective marginal federal, state and local
income tax rates and Medicare tax on earned income, with such maximum effective
federal income tax rate to be computed with regard to Section 68 of the Code,
and applying any available deduction of state and local income taxes for federal
income tax purposes. In the event that the Executive and the Company are unable
to agree as to the amount of the reduction described in subsection (a) above, if
any, the Executive shall select a law firm or public accounting firm from among
those regularly consulted by the Company regarding federal income tax matters,
such law firm or accounting firm shall determine the amount of such
12
reduction, and such firm's determination shall be final and binding upon the
Executive and the Company.
6. Death or Disability.
6.1 Death. If Executive dies during the Term, this
Employment Agreement, other than the provisions of Section 6.3 hereof, shall
terminate.
6.2 Disability. If, during the Term, Executive
becomes physically or mentally disabled, whether totally or partially, so that
he is unable substantially to perform his services hereunder for (i) a period of
six (6) consecutive months or (ii) for shorter periods aggregating six (6)
months during any eighteen (18) month period, the Company may at any time after
the last day of the six (6) consecutive months of disability or the day on which
the shorter periods of disability equal an aggregate of six (6) months, by
written notice to Executive (the "Disability Notice"), terminate the Term of the
Executive's employment hereunder.
6.3 Payments upon Death or Disability. Upon a
termination due to the death or disability of Executive, Executive (or, in the
event of a termination as a result of the death of Executive, Executive's estate
(or a designated beneficiary thereof)) shall be entitled to receive from the
Company, and the Company shall pay to Executive (or Executive's
13
estate, if applicable) the amount of any accrued and unpaid Base Salary and
other benefits and reimbursement of expenses payable to the Executive hereunder
pursuant to Sections 4.3 and 4.4 hereof as of the date of Executive's death or
the date of the Disability Notice, as applicable. In addition, for a period of
thirty (30) months following the date of such termination, the Company shall
continue to pay and provide to Executive and Executive's dependents at the Date
of Termination all medical benefits pursuant to any plans and programs in which
Executive was entitled to participate immediately prior to the Date of
Termination as if Executive were still employed by the Company pursuant hereto.
If Executive's participation in any plan or program pursuant to which such
medical benefits are provided to Executive is barred as a result of such
termination, the Company shall arrange to provide Executive and Executive's
dependents with benefits substantially similar on an after tax basis to those
which Executive was entitled to receive under such plan or program.
7. Non-Competition; Confidentiality.
7.1 Non-Competition. Executive agrees that, during
the Term and for a period of two years following the date of a termination of
Executive's employment under Section 5 hereof (the "Restricted Period"), he will
not,
14
directly or indirectly, own, manage, operate or control, or participate in the
ownership, management, operation or control of, or be connected as an officer,
employee, partner, director or otherwise with, or have any financial interest
in, or aid or assist anyone else in the conduct of, any entity or business which
competes with any material business conducted by the Company or by any group,
division or subsidiary of the Company, in any area where such business is being
conducted, or for which negotiations to conduct business are pending, at the
date of such termination (a "Competitive Operation"); provided, however, that
Executive may acquire, solely as an investment and through market purchases,
securities of any corporation that are traded on any national securities
exchange or listed on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), if Executive is not a controlling person of, or a
member of a group which controls, such corporation; and Executive does not,
directly or indirectly, own more than one percent (1%) of any class of
securities of such corporation.
7.2 Confidential Information; Personal Relationships.
Executive agrees that, during the Term and thereafter, he shall keep secret and
retain in strictest confidence, and shall not use for his benefit or the benefit
15
of others, any and all confidential information relating to the Company,
including, without limitation, trade secrets, customer lists, financial plans or
projections, pricing policies, marketing plans or strategies, business
acquisition or divestiture plans, new personnel acquisition plans, technical
processes, inventions and other research projects heretofore or hereafter
learned by Executive, and he shall not disclose any such information to anyone
outside the Company or any of its subsidiaries, except as required by law in
connection with any judicial or administrative proceeding or inquiry (provided
prior written notice thereof is given by Executive to the Company) or except
with the Company's prior written consent, unless such information is known
generally to the public or the trade through sources other than Executive's
unauthorized disclosure.
7.3 Property of the Company. All memoranda, notes,
lists, records and other documents or papers (and all copies thereof), including
such items stored in computer memories, or microfiche or by any other means,
made or compiled by or on behalf of Executive, or made available to Executive,
relating to the Company or any successors thereto, are and shall be the property
of the Company or any such successor and shall be delivered to the Company or
any such successor promptly at any time on request.
16
7.4 Employees of the Company. During the Restricted
Period, the Executive shall not, directly or indirectly, hire, solicit or
encourage to leave the employment of the Company, any of its employees or hire
any such employee who has left the employment of the Company.
7.5 Rights and Remedies Upon Breach. If Executive
breaches, or threatens to commit a breach of, any of the provisions of this
Section 7 (the "Restrictive Covenants"), the Company and any successor thereto
shall have the following rights and remedies, each of which shall be independent
of the other and severally enforceable, and all of which shall be in addition
to, and not in lieu of, any other rights and remedies available to the Company
under law or in equity.
(a) Specific Performance. The right and remedy to
have the Restrictive Covenants specifically enforced by any arbitrator or any
court having equity jurisdiction, it being acknowledged and agreed by Executive
that any such breach or threatened breach will cause irreparable injury to the
Company and that money damages will not provide an adequate remedy to the
Company.
(b) Accounting. The right and remedy to require
Executive to account for and pay over to the Company all compensation, profits,
monies, accruals, increments or
17
other benefits (collectively, "Benefits") derived or received by Executive as
the result of any transactions constituting a breach of any of the Restrictive
Covenants, and Executive shall account for and pay over such Benefits to the
Company.
7.6 Severability of Covenants. Executive acknowledges
and agrees that the Restrictive Covenants are reasonable and valid in
geographical and temporal scope and in all other respects. Notwithstanding the
foregoing, if any arbitrator or court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable or should be
reduced, the remainder of the Restrictive Covenants shall not thereby be
affected and shall be given full effect without regard to the invalid
Restrictive Covenants or portions thereof.
8. Insurance. The Company may, from time to time, apply for
and take out, in its own name and at its own expense, naming itself or others as
the designated beneficiary (which it may change from time to time), policies for
health, accident, disability or other insurance upon Executive in any amount
that it may deem necessary or appropriate to protect its interest. Executive
agrees to aid the Company in procuring such insurance by submitting to
reasonable medical examinations and by filling out, executing and
18
delivering such applications and other instruments in writing as may reasonably
be required by any insurance company to which the Company may apply for
insurance.
9. Indemnification. To the fullest extent permitted or
required by the laws of the State of Ohio, the Company shall indemnify and hold
harmless Executive, in accordance with the terms of such laws, if Executive is
made a party, or threatened to be made a party, to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that Executive is or was an officer or
director of the Company, or any subsidiary or affiliate of the Company in which
capacity Executive is or was serving at the Company's request, against expenses
(including reasonable attorneys' fees), judgments, fines and amounts paid in
settlement, all as actually and reasonably incurred by him in connection with
such action, suit or proceeding. In the event it becomes necessary for Executive
to take any action to enforce the indemnity provided herein, Executive shall be
promptly reimbursed by the Company for all costs and expenses associated
therewith (including reasonable attorneys' fees).
10. Arbitration. All disputes arising under or related to this
Agreement shall be resolved by arbitration.
19
Such arbitration shall be conducted by an arbitrator mutually selected by the
Company and Executive (or, if the Company and Executive are unable to agree upon
an arbitrator within ten (10) days, then the Company and Executive shall each
select an arbitrator, and the arbitrators so selected shall mutually select a
third arbitrator, who shall resolve such dispute). Such arbitration shall be
conducted in accordance with the applicable rules of the American Arbitration
Association. Any decision rendered by an arbitrator pursuant hereto may be
enforced by a court of competent jurisdiction without review of such decision by
such court. The Company shall pay all of the fees and expenses of the
arbitrators and the other costs of arbitration. The Company also shall pay
Executive's reasonable legal fees and expenses incurred in connection with any
successful enforcement by Executive of his rights hereunder.
11. Miscellaneous.
11.1 Notices. Any notice or other communication
required or permitted hereunder shall be in writing and shall be delivered
personally, telecopied or sent by certified or registered mail, postage prepaid,
or by Federal Express or similar overnight courier. Any such notice shall be
deemed given when delivered:
20
(i) if to the Company, to:
Eagle-Picher Industries, Inc.
580 Walnut Street
Cincinnati, Ohio 45201
Attn: General Counsel
Telecopy No.: (513) 721-3404
(ii) if to Executive, to:
Andries Ruijssenaars
Eagle-Picher Industries, Inc.
580 Walnut Street
Cincinnati, Ohio 45201
Telecopy No.: (513) 721-2779
11.2 Waivers and Amendments. This Agreement may not
be amended, modified, superseded or cancelled except by a written instrument
signed by the Company and Executive. No delay on the part of any party in
exercising any right or remedy hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right or remedy, nor any
single or partial exercise of any such right or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy.
11.3 Survival. The provisions of Sections 7 and 9
hereof shall survive the Term, irrespective of the reasons for termination of
Executive's employment hereunder.
11.4 Governing Law. This Agreement shall be governed
by and construed in accordance with the law of the State of Ohio applicable to
agreements made and to be performed entirely within such State.
21
11.5 Entire Agreement. This Agreement (including
the schedules, annexes and exhibits hereto) contain the entire agreement between
the parties with respect to the subject matter hereof and supersede all prior
agreements, proposals or representations, arrangements or understandings,
written or oral, with respect thereto.
11.6 Assignment. This Agreement, and any rights and
obligations hereunder, may not be assigned by any party hereto without the prior
written consent of the other party.
11.7 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.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
EAGLE-PICHER INDUSTRIES, INC.
By /s/ THOMAS E. PETRY
----------------------------
Name: Thomas E. Petry
Title: Chairman of the Board
of Directors and Chief
Executive Officer
/s/ ANDRIES RUIJSSENAARS
----------------------------
Andries Ruijssenaars
22
ANNEX A
TO EMPLOYMENT AGREEMENT OF
ANDRIES RUIJSSENAARS
Position: President and Chief Operating Officer
Duties: Directs, administers and coordinates the activities of the
Company in accordance with policies, goals and objectives
established by the Chief Executive Officer and the Board of
Directors. Assists the Chief Executive Officer in the
development of Company policies and goals for, among others,
operations, personnel, financial performance and growth. Has
direct line responsibility for all operating units.
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of November 29, 1996, between EAGLE-PICHER
INDUSTRIES, INC. (the "Company"), having its principal executive offices at 580
Walnut Street, Cincinnati, Ohio 45201, and James A. Ralston (the "Executive"),
residing at 2486 Royalview Court, Cincinnati, Ohio 45244.
W I T N E S S E T H :
WHEREAS, the Executive is employed on a full-time basis by the
Company and is currently serving as Vice President, General Counsel and
Secretary of the Company; and
WHEREAS, on January 7, 1991, the Company and certain of its
affiliates (collectively, the "Debtors") each filed a petition for relief under
chapter 11, title 11 of the United States Code (the "Bankruptcy Code") in the
United States Bankruptcy Court for the Southern District of Ohio, Western
Division (the "Bankruptcy Court"); and
WHEREAS, by order dated November 18, 1996 (the "Confirmation
Order") the Bankruptcy Court and the United States District Court for the
Southern District of Ohio, Western Division, confirmed the Third Amended
Consolidated Plan of Reorganization, dated August 28, 1996 (the "Plan"), in the
Debtors' chapter 11 cases; and
WHEREAS, the Plan contemplates that the Company and the
Executive will enter into this Agreement which is to
become effective on the Effective Date (as such term is defined in the Plan).
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter contained, the parties hereto agree as follows:
1. Employment; Effectiveness of Agreement. The obligation of
the Company to employ the Executive, and of the Executive to serve the Company,
pursuant to this Agreement shall become effective automatically on the Effective
Date.
2. Term. The term of Executive's employment hereunder
(hereinafter referred to as the "Term") shall commence on the Effective Date and
shall continue thereafter until the date which is thirty (30) months from and
after the date on which the Confirmation Order was entered by the Bankruptcy
Court, unless terminated earlier as hereinafter provided.
3. Duties and Extent of Services. During the Term, Executive
agrees to continue to serve as the Vice President, General Counsel and Secretary
of the Company faithfully and to the best of his ability under the direction of
the Chief Executive Officer and the Board of Directors of the Company (the
"Board"), and agrees to devote substantially all of his business time, energy
and skill to
2
such employment. Executive agrees to perform the duties commensurate with the
position of Vice President, General Counsel and Secretary of the Company, which
shall include, without limitation, the duties set forth on Annex A hereto.
Executive agrees also to perform such specific duties and services of a senior
executive nature as the Chief Executive Officer of the Company or the Board
shall reasonably request consistent with Executive's position as Vice President,
General Counsel and Secretary. The principal place of employment of Executive
shall be Cincinnati, Ohio and, subject to such reasonable travel as the
performance of his duties may require, such principal place of employment shall
not be changed unless the Executive otherwise consents.
4. Compensation.
4.1 Base Salary. The Company agrees to pay or cause
to be paid to Executive during the Term, a base salary equal to the amount of
his base salary as at the date immediately preceding the Effective Date, subject
to adjustment as provided below (as so adjusted, the "Base Salary"). The Base
Salary shall be payable in accordance with the regular payroll policies of the
Company from time to time in effect, less such deductions as shall be required
to be withheld by applicable law and regulations. On each December 1 during the
Term, the Board or a committee
3
thereof, shall review Executive's Base Salary as then in effect and may, but
shall not be obligated to, increase such salary by such amount as the Board (or
such committee), in its sole discretion, shall determine.
4.2 Discretionary Bonus. In addition to Base Salary, the
Executive shall be entitled to receive an annual cash bonus based on the
performance of the Company and of the Executive, the amount of which, if any,
shall be determined by the Board (or a committee thereof). Determinations made
by the Board (or such committee) with respect to the amount, if any, of annual
bonuses to be paid to Executive under this Agreement shall be final and
conclusive.
4.3 Benefits and Perquisites. During the Term, the Company
shall provide Executive with and Executive shall be entitled to the following
benefits and perquisites:
(a) participation in and the receipt of benefits
under (i) all of the Company's employee benefit plans and arrangements in effect
from time to time applicable to salaried employees of the Company, (ii) all
short-term and long-term incentive plans of the Company as in effect from time
to time, (iii) a supplemental executive retirement plan (the "SERP")
substantially in accordance with and no less favorable to Executive than the
terms,
4
provisions and benefits under the supplemental executive retirement plan
currently provided by the Company, and (iv) any life insurance, health and
accident plan or arrangement made available by the Company, now or in the
future, to its executives and key management employees, subject to and on a
basis consistent with the terms, conditions and overall administration of such
plans and arrangements.
(b) four (4) weeks of paid vacation in each calendar
year.
(c) an automobile paid for by the Company for use in
the performance of his services under this Agreement, in a manner substantially
consistent with past practices.
(d) membership fees paid for by the Company with
respect to any of the Executive's business-related club memberships (it being
understood that such membership fees shall not include any fees for country
clubs or other similar, primarily social, clubs).
The Company also shall implement, as soon as reasonably
practicable after the Effective Date, a long-term incentive plan. Although the
ability to receive stock of the Company may not be available for such plan, the
plan nevertheless shall provide the Executive with opportunities and incentives
reasonably economically equivalent to those
5
provided by similar companies, many of which do provide stock options and/or
other types of stock grants as components of their long-term incentive plans.
4.4 Expenses. Subject to such policies as may from
time to time be established by the Board, the Company shall pay or reimburse
Executive for all reasonable expenses actually incurred or paid by Executive
during the Term in the performance of his services under this Agreement, upon
presentation of expense statements or vouchers or such other supporting
information as the Company may require.
5. Termination.
5.1 Cause. The Company may terminate Executive's
employment hereunder for Cause. For the purposes of this Agreement, the Company
shall have "Cause" to terminate Executive's employment hereunder only by reason
of any one or more of the following:
(i) Executive's commission of any
crime (whether or not involving the Company
or any of its subsidiaries) which constitutes
a felony in the jurisdiction involved; or
(ii) Executive's commission of an
act of fraud upon the Company or any or its
subsidiaries; or
(iii) Executive's willful failure to
perform in all material respects his duties hereunder
in accordance with the terms of this Agreement which
failure (other than by reason of death or disability)
continues
6
uncorrected for a period of ten (10) days after
Executive shall have received written notice from the
Board stating with specificity the nature of such
failure or refusal.
5.2 Termination by the Executive. Executive may
terminate his employment hereunder upon thirty (30) days' prior written notice
to the Company for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean (i) the material diminution of the nature or scope of the duties
assigned to Executive from that contemplated by Section 3 hereof, (ii) a
reduction in Executive's Base Salary, or a material reduction in Executive's
fringe benefits or any other material failure by the Company to comply with
Section 4 hereof, other than any such reduction or failure as shall apply to all
salaried employees of the Company generally, (iii) ceased participation by
Executive, for any reason other than as a result of any action by Executive, in
any employee benefit plan of the Company with respect to which Executive is or
was, prior to such time, eligible to participate, (iv) the relocation of
Executive's principal place of employment more than twenty (20) miles from the
location specified in Section 3 hereof without Executive's consent, (v) the
requirement that Executive engage in a substantial amount of additional travel
(as compared to Executive's past practices) in the performance of his duties
7
hereunder without Executive's consent, or (vi) any other material breach by the
Company of its obligations under this Agreement. Good Reason shall not exist in
the event of a sale or disposition of a subsidiary or division of the Company
and Executive either (a) voluntarily agrees to be employed by such subsidiary or
division, or (b) is offered a comparable position with the Company. For purposes
hereof, comparable shall encompass such items as salary, benefits, duties and
geographic location.
5.3 Notice of Termination. Any termination by the
Company pursuant to Section 5.1 above or by Executive pursuant to Section 5.2
above shall be communicated by written notice (the "Notice of Termination"),
which notice shall indicate the specific termination provision in this Agreement
relied upon for such termination.
5.4 Date of Termination. "Date of Termination"
shall mean (i) if Executive's employment is terminated pursuant to Section 5.1
or 5.2 hereof, the date specified in the Notice of Termination, and (ii) if
Executive's employment is terminated by the Company other than for Cause or by
Executive other than for Good Reason, the date on which a Notice of Termination
is given.
5.5 Payments upon Termination. (a) If the employment
of Executive with the Company is terminated (i)
8
by the Company other than for Cause or (ii) by the Executive for Good Reason,
then Executive shall be entitled to receive from the Company, and the Company
shall pay to Executive, a lump sum severance payment equal to the greater of (x)
the aggregate Base Salary (at the rate in effect at the Date of Termination)
that Executive would have received for the remainder of the Term if his
employment had not been terminated, or (y) the aggregate amount of the Base
Salary (at the rate in effect at the Date of Termination) which would be paid
for a period of twenty-four (24) months, plus, in either case, such other
benefits or reimbursement of expenses payable to the Executive pursuant to
Sections 4.3 and 4.4 hereof (including, without limitation, the SERP), and less
such amounts as shall be required to be withheld by the Company pursuant to
applicable laws and regulations (the "Severance Amount"). The Severance Amount
shall not be present-valued and shall be payable by the Company to Executive
within thirty (30) days after Executive's termination. Executive shall not be
required to mitigate the Company's obligation to pay the full Severance Amount
by seeking employment or otherwise and the Severance Amount shall not be
decreased or otherwise offset as a result of any compensation received by
Executive from employment in any capacity. The Severance Amount shall be deemed
9
compensation payable to Executive for the purpose of determining the total
amount due Executive pursuant to the SERP.
(b) If the employment of Executive with the Company is
terminated (i) by the Company for Cause, or (ii) by the Executive other than for
Good Reason, then the Executive shall be entitled to receive, and the Company
shall pay to Executive, (x) all accrued and unpaid Base Salary and amounts due
Executive in respect of perquisites provided him hereunder through the Date of
Termination at the rate in effect at the time Notice of Termination is given,
(y) Base Salary payable in lieu of accrued and unused vacation days in
accordance with the policies of the Company from time to time in effect, and (z)
all accrued and unpaid benefits payable to Executive pursuant to any benefit
plan or otherwise through the Date of Termination. Upon the payment of the
foregoing amounts, the Company shall have no further obligations to Executive
under this Agreement.
5.6 Limited Payment Cap. (a) Notwithstanding any
other provision in this Agreement to the contrary, this Section 5.6 will apply
in the event that the Executive would receive payments under this Agreement or
under any other plan, agreement, program, or policy that is sponsored by the
Company, which relate to a change in
10
control of the Company ("parachute payments"), and any such parachute payments
are determined by the Company to be subject to excise tax under Section 4999 of
the Internal Revenue Code of 1986, as amended (the "Code") ("excess parachute
payments"). If it is determined that such excise tax would cause the net
after-tax parachute payments to be paid to or on behalf of the Executive to be
less than what he would have netted, after federal, state and local income and
social security taxes, had the present value of his total parachute payments
equalled $1 less than three times his "base amount," as defined under Section
280G(b)(3)(A) of the Code, then such Executive's total parachute payments shall
be reduced (but by the minimum possible amount), so that their aggregate present
value equals $1 less than three times the Executive's base amount. If it is
determined that any payment to or on behalf of the Executive will be an excess
parachute payment, the Company shall promptly give the Executive notice to that
effect, a copy of the detailed calculation thereof, and an explanation of the
calculation of the reduction (if any) required hereunder. If a reduction
hereunder is required, the Executive may then elect which payments shall be
eliminated or reduced (as long as after such election the aggregate present
value of the remaining parachute payments is less than three times the
11
Executive's base amount). The Executive shall advise the Company in writing of
his election within 10 days of his receipt of this notice. If no such election
is made by the Executive, the Company may elect which and how much of such
payments to eliminate or reduce to accomplish this required reduction, and shall
promptly thereafter pay or distribute for the Executive's benefit such amounts
as become due under this Agreement.
(b) It shall be assumed for purposes of the calculations
described in subsection (a) above that the Executive's income tax rate will be
computed based upon the maximum effective marginal federal, state and local
income tax rates and Medicare tax on earned income, with such maximum effective
federal income tax rate to be computed with regard to Section 68 of the Code,
and applying any available deduction of state and local income taxes for federal
income tax purposes. In the event that the Executive and the Company are unable
to agree as to the amount of the reduction described in subsection (a) above, if
any, the Executive shall select a law firm or public accounting firm from among
those regularly consulted by the Company regarding federal income tax matters,
such law firm or accounting firm shall determine the amount of such
12
reduction, and such firm's determination shall be final and binding upon the
Executive and the Company.
6. Death or Disability.
6.1 Death. If Executive dies during the Term, this
Employment Agreement, other than the provisions of Section 6.3 hereof, shall
terminate.
6.2 Disability. If, during the Term, Executive
becomes physically or mentally disabled, whether totally or partially, so that
he is unable substantially to perform his services hereunder for (i) a period of
six (6) consecutive months or (ii) for shorter periods aggregating six (6)
months during any eighteen (18) month period, the Company may at any time after
the last day of the six (6) consecutive months of disability or the day on which
the shorter periods of disability equal an aggregate of six (6) months, by
written notice to Executive (the "Disability Notice"), terminate the Term of the
Executive's employment hereunder.
6.3 Payments upon Death or Disability. Upon a
termination due to the death or disability of Executive, Executive (or, in the
event of a termination as a result of the death of Executive, Executive's estate
(or a designated beneficiary thereof)) shall be entitled to receive from the
Company, and the Company shall pay to Executive (or Executive's
13
estate, if applicable) the amount of any accrued and unpaid Base Salary and
other benefits and reimbursement of expenses payable to the Executive hereunder
pursuant to Sections 4.3 and 4.4 hereof as of the date of Executive's death or
the date of the Disability Notice, as applicable. In addition, for a period of
thirty (30) months following the date of such termination, the Company shall
continue to pay and provide to Executive and Executive's dependents at the Date
of Termination all medical benefits pursuant to any plans and programs in which
Executive was entitled to participate immediately prior to the Date of
Termination as if Executive were still employed by the Company pursuant hereto.
If Executive's participation in any plan or program pursuant to which such
medical benefits are provided to Executive is barred as a result of such
termination, the Company shall arrange to provide Executive and Executive's
dependents with benefits substantially similar on an after tax basis to those
which Executive was entitled to receive under such plan or program.
7. Non-Competition; Confidentiality.
7.1 Non-Competition. Executive agrees that, during
the Term and for a period of two years following the date of a termination of
Executive's employment under Section 5 hereof (the "Restricted Period"), he will
not,
14
directly or indirectly, own, manage, operate or control, or participate in the
ownership, management, operation or control of, or be connected as an officer,
employee, partner, director or otherwise with, or have any financial interest
in, or aid or assist anyone else in the conduct of, any entity or business which
competes with any material business conducted by the Company or by any group,
division or subsidiary of the Company, in any area where such business is being
conducted, or for which negotiations to conduct business are pending, at the
date of such termination (a "Competitive Operation"); provided, however, that
Executive may acquire, solely as an investment and through market purchases,
securities of any corporation that are traded on any national securities
exchange or listed on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), if Executive is not a controlling person of, or a
member of a group which controls, such corporation; and Executive does not,
directly or indirectly, own more than one percent (1%) of any class of
securities of such corporation.
7.2 Confidential Information; Personal Relationships.
Executive agrees that, during the Term and thereafter, he shall keep secret and
retain in strictest confidence, and shall not use for his benefit or the benefit
15
of others, any and all confidential information relating to the Company,
including, without limitation, trade secrets, customer lists, financial plans or
projections, pricing policies, marketing plans or strategies, business
acquisition or divestiture plans, new personnel acquisition plans, technical
processes, inventions and other research projects heretofore or hereafter
learned by Executive, and he shall not disclose any such information to anyone
outside the Company or any of its subsidiaries, except as required by law in
connection with any judicial or administrative proceeding or inquiry (provided
prior written notice thereof is given by Executive to the Company) or except
with the Company's prior written consent, unless such information is known
generally to the public or the trade through sources other than Executive's
unauthorized disclosure.
7.3 Property of the Company. All memoranda, notes,
lists, records and other documents or papers (and all copies thereof), including
such items stored in computer memories, or microfiche or by any other means,
made or compiled by or on behalf of Executive, or made available to Executive,
relating to the Company or any successors thereto, are and shall be the property
of the Company or any such successor and shall be delivered to the Company or
any such successor promptly at any time on request.
16
7.4 Employees of the Company. During the Restricted
Period, the Executive shall not, directly or indirectly, hire, solicit or
encourage to leave the employment of the Company, any of its employees or hire
any such employee who has left the employment of the Company.
7.5 Rights and Remedies Upon Breach. If Executive
breaches, or threatens to commit a breach of, any of the provisions of this
Section 7 (the "Restrictive Covenants"), the Company and any successor thereto
shall have the following rights and remedies, each of which shall be independent
of the other and severally enforceable, and all of which shall be in addition
to, and not in lieu of, any other rights and remedies available to the Company
under law or in equity.
(a) Specific Performance. The right and remedy to
have the Restrictive Covenants specifically enforced by any arbitrator or any
court having equity jurisdiction, it being acknowledged and agreed by Executive
that any such breach or threatened breach will cause irreparable injury to the
Company and that money damages will not provide an adequate remedy to the
Company.
(b) Accounting. The right and remedy to require
Executive to account for and pay over to the Company all compensation, profits,
monies, accruals, increments or
17
other benefits (collectively, "Benefits") derived or received by Executive as
the result of any transactions constituting a breach of any of the Restrictive
Covenants, and Executive shall account for and pay over such Benefits to the
Company.
7.6 Severability of Covenants. Executive acknowledges
and agrees that the Restrictive Covenants are reasonable and valid in
geographical and temporal scope and in all other respects. Notwithstanding the
foregoing, if any arbitrator or court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable or should be
reduced, the remainder of the Restrictive Covenants shall not thereby be
affected and shall be given full effect without regard to the invalid
Restrictive Covenants or portions thereof.
8. Insurance. The Company may, from time to time, apply for
and take out, in its own name and at its own expense, naming itself or others as
the designated beneficiary (which it may change from time to time), policies for
health, accident, disability or other insurance upon Executive in any amount
that it may deem necessary or appropriate to protect its interest. Executive
agrees to aid the Company in procuring such insurance by submitting to
reasonable medical examinations and by filling out, executing and
18
delivering such applications and other instruments in writing as may reasonably
be required by any insurance company to which the Company may apply for
insurance.
9. Indemnification. To the fullest extent permitted or
required by the laws of the State of Ohio, the Company shall indemnify and hold
harmless Executive, in accordance with the terms of such laws, if Executive is
made a party, or threatened to be made a party, to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that Executive is or was an officer or
director of the Company, or any subsidiary or affiliate of the Company in which
capacity Executive is or was serving at the Company's request, against expenses
(including reasonable attorneys' fees), judgments, fines and amounts paid in
settlement, all as actually and reasonably incurred by him in connection with
such action, suit or proceeding. In the event it becomes necessary for Executive
to take any action to enforce the indemnity provided herein, Executive shall be
promptly reimbursed by the Company for all costs and expenses associated
therewith (including reasonable attorneys' fees).
10. Arbitration. All disputes arising under or related to this
Agreement shall be resolved by arbitration.
19
Such arbitration shall be conducted by an arbitrator mutually selected by the
Company and Executive (or, if the Company and Executive are unable to agree upon
an arbitrator within ten (10) days, then the Company and Executive shall each
select an arbitrator, and the arbitrators so selected shall mutually select a
third arbitrator, who shall resolve such dispute). Such arbitration shall be
conducted in accordance with the applicable rules of the American Arbitration
Association. Any decision rendered by an arbitrator pursuant hereto may be
enforced by a court of competent jurisdiction without review of such decision by
such court. The Company shall pay all of the fees and expenses of the
arbitrators and the other costs of arbitration. The Company also shall pay
Executive's reasonable legal fees and expenses incurred in connection with any
successful enforcement by Executive of his rights hereunder.
11. Miscellaneous.
11.1 Notices. Any notice or other communication
required or permitted hereunder shall be in writing and shall be delivered
personally, telecopied or sent by certified or registered mail, postage prepaid,
or by Federal Express or similar overnight courier. Any such notice shall be
deemed given when delivered:
20
(i) if to the Company, to:
Eagle-Picher Industries, Inc.
580 Walnut Street
Cincinnati, Ohio 45201
Attn: President
Telecopy No.: (513) 721-2779
(ii) if to Executive, to:
James A. Ralston
Eagle-Picher Industries, Inc.
580 Walnut Street
Cincinnati, Ohio 45201
Telecopy No.: (513) 721-3404
11.2 Waivers and Amendments. This Agreement may not
be amended, modified, superseded or cancelled except by a written instrument
signed by the Company and Executive. No delay on the part of any party in
exercising any right or remedy hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right or remedy, nor any
single or partial exercise of any such right or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy.
11.3 Survival. The provisions of Sections 7 and 9
hereof shall survive the Term, irrespective of the reasons for termination of
Executive's employment hereunder.
11.4 Governing Law. This Agreement shall be governed
by and construed in accordance with the law of the State of Ohio applicable to
agreements made and to be performed entirely within such State.
21
11.5 Entire Agreement. This Agreement (including
the schedules, annexes and exhibits hereto) contain the entire agreement between
the parties with respect to the subject matter hereof and supersede all prior
agreements, proposals or representations, arrangements or understandings,
written or oral, with respect thereto.
11.6 Assignment. This Agreement, and any rights and
obligations hereunder, may not be assigned by any party hereto without the prior
written consent of the other party.
11.7 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.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
EAGLE-PICHER INDUSTRIES, INC.
By /s/ Thomas E. Petry
--------------------------------
Name: Thomas E. Petry
Title: Chairman of the Board
of Directors and Chief
Executive Officer
/s/ James A. Ralston
-----------------------------
James A. Ralston
22
ANNEX A
TO EMPLOYMENT AGREEMENT OF
JAMES A. RALSTON
Position: Vice President, General Counsel and Secretary
Duties: As chief legal officer directs the legal affairs of the Company.
Provides legal counsel and guidance in the ordinary and special
activities of the Company to insure maximum protection of its
legal rights utilizing broad familiarity with most legal
disciplines. Participates in senior management policy
deliberations. Directs the defense of suits or claims and
manages the prosecution of the Company's claims against others.
Supervises the legal aspects of Company transactions and the
preparation of reports and statements of a legal nature.
Supervises the environmental compliance function within the
Company. Serves as Secretary in accordance with the charter,
by-laws, and other legal requirements. Coordinates meetings of
the Board of Directors and keeps minutes of such meetings.
Attends to Company notices and correspondence, and conducts
relations with shareholders on matters concerning meetings of
shareholders or share holdings.
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of November 29, 1996, between EAGLE-PICHER
INDUSTRIES, INC. (the "Company"), having its principal executive offices at 580
Walnut Street, Cincinnati, Ohio 45201, and David N. Hall (the "Executive"),
residing at 8200 Brill Road, Cincinnati, Ohio 45243.
W I T N E S S E T H :
WHEREAS, the Executive is employed on a full-time basis by the
Company and is currently serving as Senior Vice President and Chief Financial
Officer of the Company; and
WHEREAS, on January 7, 1991, the Company and certain of its
affiliates (collectively, the "Debtors") each filed a petition for relief under
chapter 11, title 11 of the United States Code (the "Bankruptcy Code") in the
United States Bankruptcy Court for the Southern District of Ohio, Western
Division (the "Bankruptcy Court"); and
WHEREAS, by order dated November 18, 1996 (the "Confirmation
Order") the Bankruptcy Court and the United States District Court for the
Southern District of Ohio, Western Division, confirmed the Third Amended
Consolidated Plan of Reorganization, dated August 28, 1996 (the "Plan"), in the
Debtors' chapter 11 cases; and
WHEREAS, the Plan contemplates that the Company and the
Executive will enter into this Agreement which is to
become effective on the Effective Date (as such term is defined in the Plan).
NOW, THEREFORE, in consideration of the premises and the
mutual agreements hereinafter contained, the parties hereto agree as follows:
1. Employment; Effectiveness of Agreement. The obligation of
the Company to employ the Executive, and of the Executive to serve the Company,
pursuant to this Agreement shall become effective automatically on the Effective
Date.
2. Term. The term of Executive's employment hereunder
(hereinafter referred to as the "Term") shall commence on the Effective Date and
shall continue thereafter until the date which is thirty (30) months from and
after the date on which the Confirmation Order was entered by the Bankruptcy
Court, unless terminated earlier as hereinafter provided.
3. Duties and Extent of Services. During the Term, Executive
agrees to continue to serve as the Senior Vice President and Chief Financial
Officer of the Company faithfully and to the best of his ability under the
direction of the Chief Executive Officer and the Board of Directors of the
Company (the "Board"), and agrees to devote substantially all of his business
time, energy and skill to
2
such employment. Executive agrees to perform the duties commensurate with the
position of Senior Vice President and Chief Financial Officer of the Company,
which shall include, without limitation, the duties set forth on Annex A hereto.
Executive agrees also to perform such specific duties and services of a senior
executive nature as the Chief Executive Officer of the Company or the Board
shall reasonably request consistent with Executive's position as Senior Vice
President and Chief Financial Officer. The principal place of employment of
Executive shall be Cincinnati, Ohio and, subject to such reasonable travel as
the performance of his duties may require, such principal place of employment
shall not be changed unless the Executive otherwise consents.
4. Compensation.
4.1 Base Salary. The Company agrees to pay or cause
to be paid to Executive during the Term, a base salary equal to the amount of
his base salary as at the date immediately preceding the Effective Date, subject
to adjustment as provided below (as so adjusted, the "Base Salary"). The Base
Salary shall be payable in accordance with the regular payroll policies of the
Company from time to time in effect, less such deductions as shall be required
to be withheld by applicable law and regulations. On each December 1 during the
Term, the Board or a committee
3
thereof, shall review Executive's Base Salary as then in effect and may, but
shall not be obligated to, increase such salary by such amount as the Board (or
such committee), in its sole discretion, shall determine.
4.2 Discretionary Bonus. In addition to Base Salary,
the Executive shall be entitled to receive an annual cash bonus based on the
performance of the Company and of the Executive, the amount of which, if any,
shall be determined by the Board (or a committee thereof). Determinations made
by the Board (or such committee) with respect to the amount, if any, of annual
bonuses to be paid to Executive under this Agreement shall be final and
conclusive.
4.3 Benefits and Perquisites. During the Term, the
Company shall provide Executive with and Executive shall be entitled to the
following benefits and perquisites:
(a) participation in and the receipt of benefits
under (i) all of the Company's employee benefit plans and arrangements in effect
from time to time applicable to salaried employees of the Company, (ii) all
short-term and long-term incentive plans of the Company as in effect from time
to time, (iii) a supplemental executive retirement plan (the "SERP")
substantially in accordance with and no less favorable to Executive than the
terms,
4
provisions and benefits under the supplemental executive retirement plan
currently provided by the Company, and (iv) any life insurance, health and
accident plan or arrangement made available by the Company, now or in the
future, to its executives and key management employees, subject to and on a
basis consistent with the terms, conditions and overall administration of such
plans and arrangements.
(b) four (4) weeks of paid vacation in each calendar
year.
(c) an automobile paid for by the Company for use in
the performance of his services under this Agreement, in a manner substantially
consistent with past practices.
(d) membership fees paid for by the Company with
respect to any of the Executive's business-related club memberships (it being
understood that such membership fees shall not include any fees for country
clubs or other similar, primarily social, clubs).
The Company also shall implement, as soon as reasonably
practicable after the Effective Date, a long-term incentive plan. Although the
ability to receive stock of the Company may not be available for such plan, the
plan nevertheless shall provide the Executive with opportunities and incentives
reasonably economically equivalent to those
5
provided by similar companies, many of which do provide stock options and/or
other types of stock grants as components of their long-term incentive plans.
4.4 Expenses. Subject to such policies as may from
time to time be established by the Board, the Company shall pay or reimburse
Executive for all reasonable expenses actually incurred or paid by Executive
during the Term in the performance of his services under this Agreement, upon
presentation of expense statements or vouchers or such other supporting
information as the Company may require.
5. Termination.
5.1 Cause. The Company may terminate Executive's
employment hereunder for Cause. For the purposes of this Agreement, the Company
shall have "Cause" to terminate Executive's employment hereunder only by reason
of any one or more of the following:
(i) Executive's commission of any crime
(whether or not involving the Company or any of its
subsidiaries) which constitutes a felony in the
jurisdiction involved; or
(ii) Executive's commission of an act of
fraud upon the Company or any or its subsidiaries; or
(iii) Executive's willful failure to perform
in all material respects his duties hereunder in
accordance with the terms of this Agreement which
failure (other than by reason of death or disability)
continues
6
uncorrected for a period of ten (10) days after
Executive shall have received written notice from the
Board stating with specificity the nature of such
failure or refusal.
5.2 Termination by the Executive. Executive may
terminate his employment hereunder upon thirty (30) days' prior written notice
to the Company for Good Reason. For purposes of this Agreement, "Good Reason"
shall mean (i) the material diminution of the nature or scope of the duties
assigned to Executive from that contemplated by Section 3 hereof, (ii) a
reduction in Executive's Base Salary, or a material reduction in Executive's
fringe benefits or any other material failure by the Company to comply with
Section 4 hereof, other than any such reduction or failure as shall apply to all
salaried employees of the Company generally, (iii) ceased participation by
Executive, for any reason other than as a result of any action by Executive, in
any employee benefit plan of the Company with respect to which Executive is or
was, prior to such time, eligible to participate, (iv) the relocation of
Executive's principal place of employment more than twenty (20) miles from the
location specified in Section 3 hereof without Executive's consent, (v) the
requirement that Executive engage in a substantial amount of additional travel
(as compared to Executive's past practices) in the performance of his duties
7
hereunder without Executive's consent, or (vi) any other material breach by the
Company of its obligations under this Agreement. Good Reason shall not exist in
the event of a sale or disposition of a subsidiary or division of the Company
and Executive either (a) voluntarily agrees to be employed by such subsidiary or
division, or (b) is offered a comparable position with the Company. For purposes
hereof, comparable shall encompass such items as salary, benefits, duties and
geographic location.
5.3 Notice of Termination. Any termination by the
Company pursuant to Section 5.1 above or by Executive pursuant to Section 5.2
above shall be communicated by written notice (the "Notice of Termination"),
which notice shall indicate the specific termination provision in this Agreement
relied upon for such termination.
5.4 Date of Termination. "Date of Termination" shall
mean (i) if Executive's employment is terminated pursuant to Section 5.1 or 5.2
hereof, the date specified in the Notice of Termination, and (ii) if Executive's
employment is terminated by the Company other than for Cause or by Executive
other than for Good Reason, the date on which a Notice of Termination is given.
5.5 Payments upon Termination. (a) If the employment
of Executive with the Company is terminated (i)
8
by the Company other than for Cause or (ii) by the Executive for Good Reason,
then Executive shall be entitled to receive from the Company, and the Company
shall pay to Executive, a lump sum severance payment equal to the greater of (x)
the aggregate Base Salary (at the rate in effect at the Date of Termination)
that Executive would have received for the remainder of the Term if his
employment had not been terminated, or (y) the aggregate amount of the Base
Salary (at the rate in effect at the Date of Termination) which would be paid
for a period of twenty-four (24) months, plus, in either case, such other
benefits or reimbursement of expenses payable to the Executive pursuant to
Sections 4.3 and 4.4 hereof (including, without limitation, the SERP), and less
such amounts as shall be required to be withheld by the Company pursuant to
applicable laws and regulations (the "Severance Amount"). The Severance Amount
shall not be present-valued and shall be payable by the Company to Executive
within thirty (30) days after Executive's termination. Executive shall not be
required to mitigate the Company's obligation to pay the full Severance Amount
by seeking employment or otherwise and the Severance Amount shall not be
decreased or otherwise offset as a result of any compensation received by
Executive from employment in any capacity. The Severance Amount shall be deemed
9
compensation payable to Executive for the purpose of determining the total
amount due Executive pursuant to the SERP.
(b) If the employment of Executive with the Company is
terminated (i) by the Company for Cause, or (ii) by the Executive other than for
Good Reason, then the Executive shall be entitled to receive, and the Company
shall pay to Executive, (x) all accrued and unpaid Base Salary and amounts due
Executive in respect of perquisites provided him hereunder through the Date of
Termination at the rate in effect at the time Notice of Termination is given,
(y) Base Salary payable in lieu of accrued and unused vacation days in
accordance with the policies of the Company from time to time in effect, and (z)
all accrued and unpaid benefits payable to Executive pursuant to any benefit
plan or otherwise through the Date of Termination. Upon the payment of the
foregoing amounts, the Company shall have no further obligations to Executive
under this Agreement.
5.6 Limited Payment Cap. (a) Notwithstanding any
other provision in this Agreement to the contrary, this Section 5.6 will apply
in the event that the Executive would receive payments under this Agreement or
under any other plan, agreement, program, or policy that is sponsored by the
Company, which relate to a change in
10
control of the Company ("parachute payments"), and any such parachute payments
are determined by the Company to be subject to excise tax under Section 4999 of
the Internal Revenue Code of 1986, as amended (the "Code") ("excess parachute
payments"). If it is determined that such excise tax would cause the net
after-tax parachute payments to be paid to or on behalf of the Executive to be
less than what he would have netted, after federal, state and local income and
social security taxes, had the present value of his total parachute payments
equalled $1 less than three times his "base amount," as defined under Section
280G(b)(3)(A) of the Code, then such Executive's total parachute payments shall
be reduced (but by the minimum possible amount), so that their aggregate present
value equals $1 less than three times the Executive's base amount. If it is
determined that any payment to or on behalf of the Executive will be an excess
parachute payment, the Company shall promptly give the Executive notice to that
effect, a copy of the detailed calculation thereof, and an explanation of the
calculation of the reduction (if any) required hereunder. If a reduction
hereunder is required, the Executive may then elect which payments shall be
eliminated or reduced (as long as after such election the aggregate present
value of the remaining parachute payments is less than three times the
11
Executive's base amount). The Executive shall advise the Company in writing of
his election within 10 days of his receipt of this notice. If no such election
is made by the Executive, the Company may elect which and how much of such
payments to eliminate or reduce to accomplish this required reduction, and shall
promptly thereafter pay or distribute for the Executive's benefit such amounts
as become due under this Agreement.
(b) It shall be assumed for purposes of the calculations
described in subsection (a) above that the Executive's income tax rate will be
computed based upon the maximum effective marginal federal, state and local
income tax rates and Medicare tax on earned income, with such maximum effective
federal income tax rate to be computed with regard to Section 68 of the Code,
and applying any available deduction of state and local income taxes for federal
income tax purposes. In the event that the Executive and the Company are unable
to agree as to the amount of the reduction described in subsection (a) above, if
any, the Executive shall select a law firm or public accounting firm from among
those regularly consulted by the Company regarding federal income tax matters,
such law firm or accounting firm shall determine the amount of such
12
reduction, and such firm's determination shall be final and binding upon the
Executive and the Company.
6. Death or Disability.
6.1 Death. If Executive dies during the Term, this
Employment Agreement, other than the provisions of Section 6.3 hereof, shall
terminate.
6.2 Disability. If, during the Term, Executive
becomes physically or mentally disabled, whether totally or partially, so that
he is unable substantially to perform his services hereunder for (i) a period of
six (6) consecutive months or (ii) for shorter periods aggregating six (6)
months during any eighteen (18) month period, the Company may at any time after
the last day of the six (6) consecutive months of disability or the day on which
the shorter periods of disability equal an aggregate of six (6) months, by
written notice to Executive (the "Disability Notice"), terminate the Term of the
Executive's employment hereunder.
6.3 Payments upon Death or Disability. Upon a
termination due to the death or disability of Executive, Executive (or, in the
event of a termination as a result of the death of Executive, Executive's estate
(or a designated beneficiary thereof)) shall be entitled to receive from the
Company, and the Company shall pay to Executive (or Execu-
13
tive's estate, if applicable) the amount of any accrued and unpaid Base Salary
and other benefits and reimbursement of expenses payable to the Executive
hereunder pursuant to Sections 4.3 and 4.4 hereof as of the date of Executive's
death or the date of the Disability Notice, as applicable. In addition, for a
period of thirty (30) months following the date of such termination, the Company
shall continue to pay and provide to Executive and Executive's dependents at the
Date of Termination all medical benefits pursuant to any plans and programs in
which Executive was entitled to participate immediately prior to the Date of
Termination as if Executive were still employed by the Company pursuant hereto.
If Executive's participation in any plan or program pursuant to which such
medical benefits are provided to Executive is barred as a result of such
termination, the Company shall arrange to provide Executive and Executive's
dependents with benefits substantially similar on an after tax basis to those
which Executive was entitled to receive under such plan or program.
7. Non-Competition; Confidentiality.
7.1 Non-Competition. Executive agrees that, during
the Term and for a period of two years following the date of a termination of
Executive's employment under Section 5 hereof (the "Restricted Period"), he will
not,
14
directly or indirectly, own, manage, operate or control, or participate in the
ownership, management, operation or control of, or be connected as an officer,
employee, partner, director or otherwise with, or have any financial interest
in, or aid or assist anyone else in the conduct of, any entity or business which
competes with any material business conducted by the Company or by any group,
division or subsidiary of the Company, in any area where such business is being
conducted, or for which negotiations to conduct business are pending, at the
date of such termination (a "Competitive Operation"); provided, however, that
Executive may acquire, solely as an investment and through market purchases,
securities of any corporation that are traded on any national securities
exchange or listed on the National Association of Securities Dealers Automated
Quotation System ("NASDAQ"), if Executive is not a controlling person of, or a
member of a group which controls, such corporation; and Executive does not,
directly or indirectly, own more than one percent (1%) of any class of
securities of such corporation.
7.2 Confidential Information; Personal Relationships.
Executive agrees that, during the Term and thereafter, he shall keep secret and
retain in strictest confidence, and shall not use for his benefit or the benefit
15
of others, any and all confidential information relating to the Company,
including, without limitation, trade secrets, customer lists, financial plans or
projections, pricing policies, marketing plans or strategies, business
acquisition or divestiture plans, new personnel acquisition plans, technical
processes, inventions and other research projects heretofore or hereafter
learned by Executive, and he shall not disclose any such information to anyone
outside the Company or any of its subsidiaries, except as required by law in
connection with any judicial or administrative proceeding or inquiry (provided
prior written notice thereof is given by Executive to the Company) or except
with the Company's prior written consent, unless such information is known
generally to the public or the trade through sources other than Executive's
unauthorized disclosure.
7.3 Property of the Company. All memoranda, notes,
lists, records and other documents or papers (and all copies thereof), including
such items stored in computer memories, or microfiche or by any other means,
made or compiled by or on behalf of Executive, or made available to Executive,
relating to the Company or any successors thereto, are and shall be the property
of the Company or any such successor and shall be delivered to the Company or
any such successor promptly at any time on request.
16
7.4 Employees of the Company. During the Restricted
Period, the Executive shall not, directly or indirectly, hire, solicit or
encourage to leave the employment of the Company, any of its employees or hire
any such employee who has left the employment of the Company.
7.5 Rights and Remedies Upon Breach. If Executive
breaches, or threatens to commit a breach of, any of the provisions of this
Section 7 (the "Restrictive Covenants"), the Company and any successor thereto
shall have the following rights and remedies, each of which shall be independent
of the other and severally enforceable, and all of which shall be in addition
to, and not in lieu of, any other rights and remedies available to the Company
under law or in equity.
(a) Specific Performance. The right and remedy to
have the Restrictive Covenants specifically enforced by any arbitrator or any
court having equity jurisdiction, it being acknowledged and agreed by Executive
that any such breach or threatened breach will cause irreparable injury to the
Company and that money damages will not provide an adequate remedy to the
Company.
(b) Accounting. The right and remedy to require
Executive to account for and pay over to the Company all compensation, profits,
monies, accruals, increments or
17
other benefits (collectively, "Benefits") derived or received by Executive as
the result of any transactions constituting a breach of any of the Restrictive
Covenants, and Executive shall account for and pay over such Benefits to the
Company.
7.6 Severability of Covenants. Executive acknowledges
and agrees that the Restrictive Covenants are reasonable and valid in
geographical and temporal scope and in all other respects. Notwithstanding the
foregoing, if any arbitrator or court determines that any of the Restrictive
Covenants, or any part thereof, is invalid or unenforceable or should be
reduced, the remainder of the Restrictive Covenants shall not thereby be
affected and shall be given full effect without regard to the invalid
Restrictive Covenants or portions thereof.
8. Insurance. The Company may, from time to time, apply for
and take out, in its own name and at its own expense, naming itself or others as
the designated beneficiary (which it may change from time to time), policies for
health, accident, disability or other insurance upon Executive in any amount
that it may deem necessary or appropriate to protect its interest. Executive
agrees to aid the Company in procuring such insurance by submitting to
reasonable medical examinations and by filling out, executing and
18
delivering such applications and other instruments in writing as may reasonably
be required by any insurance company to which the Company may apply for
insurance.
9. Indemnification. To the fullest extent permitted or
required by the laws of the State of Ohio, the Company shall indemnify and hold
harmless Executive, in accordance with the terms of such laws, if Executive is
made a party, or threatened to be made a party, to any threatened, pending or
completed action, suit or proceeding, whether civil, criminal, administrative or
investigative, by reason of the fact that Executive is or was an officer or
director of the Company, or any subsidiary or affiliate of the Company in which
capacity Executive is or was serving at the Company's request, against expenses
(including reasonable attorneys' fees), judgments, fines and amounts paid in
settlement, all as actually and reasonably incurred by him in connection with
such action, suit or proceeding. In the event it becomes necessary for Executive
to take any action to enforce the indemnity provided herein, Executive shall be
promptly reimbursed by the Company for all costs and expenses associated
therewith (including reasonable attorneys' fees).
10. Arbitration. All disputes arising under or related to this
Agreement shall be resolved by arbitration.
19
Such arbitration shall be conducted by an arbitrator mutually selected by the
Company and Executive (or, if the Company and Executive are unable to agree upon
an arbitrator within ten (10) days, then the Company and Executive shall each
select an arbitrator, and the arbitrators so selected shall mutually select a
third arbitrator, who shall resolve such dispute). Such arbitration shall be
conducted in accordance with the applicable rules of the American Arbitration
Association. Any decision rendered by an arbitrator pursuant hereto may be
enforced by a court of competent jurisdiction without review of such decision by
such court. The Company shall pay all of the fees and expenses of the
arbitrators and the other costs of arbitration. The Company also shall pay
Executive's reasonable legal fees and expenses incurred in connection with any
successful enforcement by Executive of his rights hereunder.
11. Miscellaneous.
11.1 Notices. Any notice or other communication
required or permitted hereunder shall be in writing and shall be delivered
personally, telecopied or sent by certified or registered mail, postage prepaid,
or by Federal Express or similar overnight courier. Any such notice shall be
deemed given when delivered:
20
(i) if to the Company, to:
Eagle-Picher Industries, Inc.
580 Walnut Street
Cincinnati, Ohio 45201
Attn: General Counsel
Telecopy No.: (513) 721-3404
(ii) if to Executive, to:
David N. Hall
Eagle-Picher Industries, Inc.
580 Walnut Street
Cincinnati, Ohio 45201
Telecopy No.: (513) 721-2779
11.2 Waivers and Amendments. This Agreement may not
be amended, modified, superseded or cancelled except by a written instrument
signed by the Company and Executive. No delay on the part of any party in
exercising any right or remedy hereunder shall operate as a waiver thereof, nor
shall any waiver on the part of any party of any such right or remedy, nor any
single or partial exercise of any such right or remedy preclude any other or
further exercise thereof or the exercise of any other right or remedy.
11.3 Survival. The provisions of Sections 7 and 9
hereof shall survive the Term, irrespective of the reasons for termination of
Executive's employment hereunder.
11.4 Governing Law. This Agreement shall be governed
by and construed in accordance with the law of the State of Ohio applicable to
agreements made and to be performed entirely within such State.
21
11.5 Entire Agreement. This Agreement (including the
schedules, annexes and exhibits hereto) contain the entire agreement between the
parties with respect to the subject matter hereof and supersede all prior
agreements, proposals or representations, arrangements or understandings,
written or oral, with respect thereto.
11.6 Assignment. This Agreement, and any rights and
obligations hereunder, may not be assigned by any party hereto without the prior
written consent of the other party.
11.7 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.
IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first above written.
EAGLE-PICHER INDUSTRIES, INC.
By /s/ Thomas E. Petry
---------------------------
Name: Thomas E. Petry
Title: Chairman of the Board
of Directors and Chief
Executive Officer
/s/ David N. Hall
---------------------------
David N. Hall
22
ANNEX A
TO EMPLOYMENT AGREEMENT OF
DAVID N. HALL
POSITION: Senior Vice President and Chief Financial Officer
DUTIES: Plans, directs and controls the Company's overall financial plans
and policies, and its accounting practices, and conducts the
Company's relationship with lending institutions and the
financial community. Directs treasury, budgeting, audit, tax,
accounting, information management, insurance and certain
administrative functions. Develops and coordinates necessary and
appropriate accounting and statistical data for all departments.