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EXHIBIT 10 (j)
EMPLOYMENT AGREEMENT
AGREEMENT, dated as of this first day of October, 1995 (the "Effective
Date"), by and between DETREX CORPORATION, a Michigan corporation (the
"Company"),and WILLIAM C. KING, an individual residing at 26281 Siena Drive,
Bonita Springs, Florida, 33923 ("Executive").
WITNESSETH:
WHEREAS, the Company and Executive are parties to a Temporary
Employment Agreement, dated April 11, 1995 (the "Temporary Agreement"); and
WHEREAS, the Company and Executive now desire to supersede the
Temporary Agreement with this Agreement and to have the terms and conditions of
Executive's employment with the Company governed by the terms and conditions
hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the parties hereto hereby agree as follows:
1. Employment and Duties.
(a) General. The Company hereby employs Executive, effective as of
the Effective Date, and Executive agrees upon the terms and conditions herein
set forth to serve, effective as of the Effective Date, as President and Chief
Executive Officer of the Company. In such capacities, Executive shall report
directly to the Board of Directors of the Company (the "Board"). Executive
shall perform all of the duties accorded to the positions of President and Chief
Executive Officer as provided in the bylaws of the Company. The parties
acknowledge that the Company is in the process of searching for a Chief
Operating Officer of the Company. The parties further acknowledge that, in the
event that a Chief Operating Officer is hired, Executive will continue as Chief
Executive Officer and may become Chairman of the Board or such other position as
is indicative of Executive's status as the Chief Executive Officer of the
Company. Regardless of whether a Chief Operating Officer is hired, Executive
will remain during the Term the Chief Executive Officer of the Company and
retain the corresponding responsibilities of general oversight and control as
provided in the Company's bylaws.
(b) Services. For so long as Executive is employed by the Company,
Executive shall, except as may from time to time be otherwise agreed to in
writing by the Company, devote his best efforts and attention to his duties
hereunder; shall faithfully serve the Company; shall in all respects conform to
and comply with the lawful and good faith directions and instructions given to
him by the Board; and shall use his best efforts to promote and serve the
interests of the Company.
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(c) No Other Employment. For so long as Executive is employed by
the Company, Executive shall not, directly or indirectly, render services to any
other person or organization for which he receives compensation without the
prior approval of the Board, except that, without the prior approval of the
Board, he may serve on the boards of directors of and perform consulting
services for other corporations during the Term, provided that such services do
not conflict with the execution of his duties as Chief Executive Officer or the
provisions of Section 5 below. In addition, no such approval will be required
if Executive seeks to perform inconsequential services without direct
compensation therefor in connection with the management of personal investments
or in connection with the performance of charitable and civic activities,
provided that such activities do not contravene the provisions of Section 5
hereof.
(d) Temporary Agreement Superseded. As of the Effective Date, the
Temporary Agreement is hereby superseded and replaced by this Agreement.
2. Term of Employment. The term of Executive's employment under
this Agreement (the "Term") shall commence on the Effective Date and continue
until September 30, 2000.
3. Compensation and Other Benefits. Subject to the provisions of
this Agreement, the Company shall pay and provide the following compensation and
other benefits to Executive during the Term as compensation for all services
rendered hereunder:
(a) Salary. The Company shall pay to Executive a salary (the
"Salary") at the initial rate of $100,000 per annum, payable to Executive in
accordance with the normal payroll practices of the Company for its executive
officers as are in effect from time to time, which Salary shall be in
consideration for Executive's services for a period of five full business days
every month while executing his duties hereunder, it being understood that
Executive will spend a reasonable amount of time on Company premises or in
personal contact with the Company's customers, suppliers or employees. The
amount of Executive's Salary will be reviewed not less often than annually by
the Board and may be increased, but not decreased below such amount, on the
basis of such review.
(b) Per Diem and Hourly Compensation. In the case that Executive
spends more than five full business days during any month performing his duties
hereunder, the Company shall pay to Executive a per diem amount of $1,350 for
each additional full business day that Executive performs such duties. In
addition, the Company shall pay to Executive $200 per hour, up to a maximum of
$1,350 per day, for partial days worked in addition to the required five full
days per month or additional days for which a full per diem is paid. Executive
shall submit such time records showing days worked as shall be reasonably
necessary to document the hours and days actually worked. Executive shall be
paid such per diem and hourly compensation following submission of such
documentation in a manner consistent with the Company's normal payroll cycle.
The Company shall withhold
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income taxes, unemployment taxes and such other taxes as may be required by
applicable federal and state laws.
(c) Annual Bonus. Subject to such terms as the Compensation
Committee of the Board (the "Compensation Committee") shall specify, Executive
shall be eligible to participate in an annual incentive bonus program applicable
to the Company's senior executives, as in effect from time to time, in
accordance with the terms and conditions thereof. If Executive's employment
should end for any reason during a given bonus period, any unpaid but earned
bonus for any prior bonus period shall be paid to Executive in accordance with
the terms of the applicable bonus plan.
(d) Stock Options. Commencing as of the Effective Date, Executive
shall be eligible for option grants under the Company's 1993 Stock Option Plan
(the "Option Plan") for the Company's executive officers, as in effect from time
to time, in accordance with the terms and conditions thereof. Any options
granted to Executive under the Option Plan shall be subject to the terms and
conditions specified by the Compensation Committee. Subject to Section 6(f)
below, in the event of a Change in Control of the Company (as defined in Section
6(f)below), Executive shall become fully vested in accordance with the terms of
the Option Plan in any stock options at the time previously granted to Executive
thereunder.
(e) Expenses. The Company shall pay or reimburse Executive for all
reasonable out-of-pocket expenses incurred by Executive in connection with his
employment hereunder. Such expenses shall include, but shall not be limited to,
round-trip travel between Executive's home in Florida and the Company's offices
in Michigan at such times and as often as Executive reasonably may determine,
and all lodging and subsistence costs while Executive is on business trips, as
well as telex, telecopier and telephone calls and other normal and incidental
allowable expenses in accordance with the Company's standard policy. Such
expenses shall be paid upon the periodic submission of invoices and shall be
paid within thirty days after the date of such invoice. The reimbursement of
expenses under this Section 3(e) shall be subject to Executive's providing the
Company with such documentation of the expenses as the Company may from time to
time reasonably request. No expense payment or reimbursement under this Section
3(e) shall be "grossed up" or increased to take into account any tax liability
incurred by Executive as a result of such payment or reimbursement.
(f) Pension, Welfare and Fringe Benefits. During the Term,
Executive shall be eligible to participate in the Company's Executive Disability
Plan and in the Company's pension, medical and life insurance plans applicable
to senior officers of the Company in accordance with the terms of such plans as
in effect from time to time; provided, however, that, for eligibility purposes
under the Company's medical and life insurance plans, Executive shall be
considered a full-time employee. If Executive's employment terminates at the
end of the Term or prior to the end of the Term as a result of his termination
without Cause, resignation for Good Reason, or Disability (as such terms are
hereinafter defined), such termination of employment shall be treated as
retirement for
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purposes of the Company's post-retirement medical program and Executive will be
eligible to enroll immediately in such post-retirement medical program subject
to the terms and provisions of such program as in effect from time to time;
provided, however, such eligibility will be subject to his immediate and
continuous enrollment in the program as of the later to occur of the (i) the
end of the Continuation Period (as hereinafter defined) and (ii) the date of
Executive's termination of employment. The parties understand that Executive
shall be entitled only to such benefits as may be provided under a Company
postretirement medical program as in effect from time to time and that the
Company may change, modify, amend or terminate such program at any time;
provided, however, that no such change, modification, amendment or termination
shall be designed to affect solely the rights of Executive thereunder.
(g) Supplemental Pension. (i) Subject to the provisions of this
Section 3(g), Executive shall earn during the Term a supplemental monthly
pension for life (the "Pension") payable in the form of a straight life annuity
commencing with the month following the month in which Executive attains age 65.
The amount of the Pension shall be determined in accordance with the benefit
formula and actuarial factors and assumptions set forth in the Detrex
Corporation Employees Retirement Plan (the "Retirement Plan"), as in effect on
the Effective Date, except that, for purposes of calculating the amount of the
Pension, the following shall apply: (A) Executive shall be entitled to receive
the Pension even if, at the time of his termination of employment, he is not
entitled to receive a pension under the Retirement Plan; (B) for purposes of
determining eligibility for benefits and calculating the amount of the Pension,
Executive shall be credited with years of vesting and accrual service equal to
the sum of (I) the number of whole months elapsed from April 1, 1995 to the date
of Executive's termination of employment hereunder divided by six plus (II)
five; (C) subject to Section 3(g)(ii) below, Executive shall be fully vested in
the Pension as of the Effective Date; (D) the amount of the Pension shall be
paid in the form of a 50% qualified joint and survivor annuity, unless Executive
shall elect in writing prior to his termination of employment to have the
Pension paid in another form of payment that may be elected under the Retirement
Plan; provided, however, that the Company shall have the right at any time
following Executive's termination of employment to pay the entire amount of the
remaining Pension to Executive (or his surviving spouse, if applicable) in a
lump sum (regardless of the amount of such lump sum) calculated in accordance
with the actuarial factors specified in the Retirement Plan applicable to
involuntary cashouts; (E) the amount of the Pension shall be reduced by the
amount of the retirement benefits payable to Executive (or his spouse) under the
Retirement Plan; (F) the monthly payments of the Pension shall not commence
until the latest to occur of (I) the date Executive attains the earliest
retirement age under the Retirement Plan, (II) the date Executive is no longer
entitled to receive payments of the Severance Amount and (III) the date of
Executive's termination of employment. If Executive should die prior to the
commencement of the Pension, his surviving spouse, if any, shall be entitled to
a death benefit for life equal the amount that would otherwise have been payable
to her if Executive had died immediately after Pension payments to him had
commenced on the latest date specified in clause (F) above (the "Reference
Date") of the previous sentence in the form of a 50% joint and survivor annuity
prior to the date of his
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death; provided, however, that the death benefit payable to Executive's
surviving spouse shall not commence until the Reference Date and (G) in
calculating the amount of the Pension, all applicable limits under the Internal
Revenue Code of 1986, as amended (the "Code"), shall apply (including, without
limitation, those under Section 401(a)(17) and Section 415). If the payment of
the Pension should commence prior to the time that Executive attains age 65,
the amount of the Pension shall be reduced in accordance with the reduction
factors set forth in the Retirement Plan. The Pension to Executive shall
terminate in the month in which Executive dies, and the death benefit, if any,
payable to his surviving spouse shall terminate with the month of her death.
No beneficiary may be elected to receive the death benefit other than
Executive's spouse.
(ii) Executive shall forfeit all right to the Pension if his
employment with the Company ends as a result of his resignation of employment
other than for Good Reason (as hereinafter defined) prior to the fifth
anniversary of the Effective Date.
4. Termination of Employment. Subject to the notice and other
provisions of this Section 4, the Company shall have the right to terminate
Executive's employment hereunder, and Executive shall have the right to resign,
at any time for any reason or for no stated reason.
(a) Termination for Cause; Resignation Without Good Reason. (i) If,
prior to the expiration of the Term, Executive's employment is terminated by the
Company for Cause or if Executive resigns from his employment hereunder other
than for Good Reason, Executive shall be entitled to payment of the pro rata
portion of Executive's Salary through and including the date of termination or
resignation as well as any unpaid per diem and hourly amounts and unreimbursed
expenses. Except to the extent required by the terms of Section 3(b), any
applicable grant to Executive in accordance with Section 3(d) above, Section
3(f), Section 3(g) or applicable law, Executive shall have no right under this
Agreement or otherwise to receive any other compensation or to participate in
any other plan, program or arrangement after such termination or resignation of
employment with respect to the year of such termination or resignation and later
years.
(ii) Termination for "Cause" shall mean termination of Executive's
employment with the Company because of (A) his refusal (other than by reason of
the incapacity of Executive due to physical or mental illness) to perform his
duties hereunder, (B) the commission by Executive of a felony, or the
perpetration by Executive of a dishonest act or fraud against the Company or any
affiliate or subsidiary thereof, (C) any act or omission by Executive which is
the result of Executive's willful misconduct or gross negligence and which, in
the good faith opinion of the Board, is injurious in any material respect to the
financial condition, business or reputation of the Company or any of its
affiliates or subsidiaries or (D) a material breach by Executive of this
Agreement.
(iii) Termination of Executive's employment for Cause shall be
communicated by delivery to Executive of a written notice from the Company
stating that
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Executive has been terminated for Cause, specifying the particulars thereof and
the effective date of such termination. The date of a resignation by Executive
without Good Reason shall be the date specified in a written notice of
resignation from Executive to the Company. Executive shall provide at least
180 days' advance written notice of resignation without Good Reason.
(b) Involuntary Termination. (i) If prior to the expiration of the
Term, the Company terminates Executive's employment for any reason other than
Disability (as defined in Section 4(c) below) or Cause or Executive resigns from
his employment hereunder for Good Reason (such a resignation or termination
being hereinafter referred to as an "Involuntary Termination"), the Company
shall pay to Executive his Salary accrued up to and including the date of such
Involuntary Termination as well as any unpaid per diem and hourly amounts and
any unreimbursed expenses. In addition, in the event of Executive's Involuntary
Termination, the Company shall pay to Executive as severance (the "Severance
Amount") his Salary, at the annual rate in effect immediately prior to such
Involuntary Termination, for the two-year period beginning on the day
immediately following the date of such Involuntary Termination. The Severance
Amount shall be paid in payroll installments in accordance with the Company's
payroll practices in effect from time to time; provided, however, that the
Company, in its sole discretion, may at any time pay to Executive the then
remaining portion of the Severance Amount in a cash lump sum. Anything in this
Agreement to the contrary notwithstanding, no amounts shall be payable under
this Section 4(b) if Executive's employment with the Company ends at the
expiration of the Term in accordance with Section 2.
(ii) In the event of Executive's Involuntary Termination, Executive
shall continue to participate on the same terms and conditions as are in effect
immediately prior to such termination or resignation in the Company's health and
medical plans provided to Executive pursuant to Section 3(f) above at the time
of such Involuntary Termination until the earlier to occur of (A) the last day
in respect of which the Company is obligated to pay Executive a Severance Amount
in accordance with Section 4(b)(i) above and (B) the second anniversary of the
date of such Involuntary Termination (the "Continuation Period"). Anything
herein to the contrary notwithstanding, the Company shall have no obligation to
continue to maintain during the Continuation Period any plan or program solely
as a result of the provisions of this Agreement. If, during the Continuation
Period, Executive is precluded from participating in a plan or program by its
terms or applicable law or if the Company for any reason ceases to maintain such
plan or program, the Company shall provide Executive with compensation or
benefits the aggregate value of which, in the reasonable judgment of the
Company, is no less than the aggregate value of the compensation or benefits
that Executive would have received under such plan or program had he been
eligible to participate therein or had such plan or program continued to be
maintained by the Company. In addition, in the event of an Involuntary
Termination, Executive shall be credited with an additional 2 years of vesting
and accrual service for purposes of clause (B) of Section 3(g)(i) above.
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(iii) In the event of Executive's death prior to the payment of the
full Severance Amount, the balance of the Severance Amount shall continue to be
paid in periodic installments to Executive's Beneficiary; provided, however,
that the Company, in its sole discretion, may at any time pay such Beneficiary
the then remaining portion of the Severance Amount in a cash lump sum.
(iv) If, following an Involuntary Termination, Executive materially
breaches the provisions of Section 5 hereof, Executive shall not be eligible, as
of the date of such breach, for the payments and benefits described in this
Section 4(b), and any and all obligations and agreements of the Company with
respect to such payments and benefits shall thereupon cease.
(v) Resignation for "Good Reason" shall mean resignation by
Executive because of a material breach by the Company of its obligations to
Executive under this Agreement. Unless Executive provides written notification
of his intention to resign within 90 business days after Executive knows or has
reason to know of the occurrence of any such material breach, Executive shall be
deemed to have consented thereto and such material breach shall no longer
constitute Good Reason for purposes of this Agreement. If Executive provides
such written notice to the Company, the Company shall have 30 business days from
the date of receipt of such notice to effect a cure of the material breach
described therein (which cure shall be retroactive with respect to any monetary
matter) and, upon cure thereof by the Company to the reasonable satisfaction of
Executive, such material breach shall no longer constitute Good Reason for
purposes of this Agreement.
(vi) The date of termination of employment without Cause shall be
the date specified in a written notice of termination to Executive. The date of
resignation for Good Reason shall be the date specified in a written notice of
resignation from Executive to the Company; provided, however, that no such
written notice shall be effective unless the cure period specified in Section
4(b)(v) above has expired without the Company having corrected, to the
reasonable satisfaction of Executive, the event or events subject to cure.
(c) Termination Due to Disability. In the event of Executive's
Disability (as hereinafter defined), the Company shall be entitled to terminate
his employment. In the case that the Company terminates Executive's employment
due to disability, Executive shall be entitled to payment of the pro rata
portion of Executive's Salary through and including the date of termination as
well as any unpaid per diem and hourly amounts earned and unreimbursed expenses.
Notwithstanding anything contained in this Agreement to the contrary, if
Executive's employment should terminate due to Disability, the Company shall
continue to pay Executive his annual salary until the earliest to occur of (i)
the end of the six-month period following the date of such termination, (ii) the
date of Executive's death, (iii) the date Executive's Pension payments commence
and (iv) the first day on which Executive is entitled to benefits under the
Company's Executive Disability Plan. As used in this Section 4(c), the term
"Disability" shall mean a physical or mental incapacity that substantially
prevents him from performing his duties hereunder and that has continued for at
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least 60 days and that can reasonably be expected to continue indefinitely.
Any dispute as to whether or not Executive is disabled within the meaning of
the preceding sentence shall be resolved by a physician reasonably satisfactory
to Executive and the Company, and the determination of such physician shall be
final and binding upon both Executive and the Company.
(d) Death. Except as provided in Sections 3(g), 4(b)(iii) and this
Section 4(d), no Salary or benefits shall be payable under this Agreement
following the date of Executive's death. In the event of Executive's death, any
Salary earned by Executive up to the date of death, as well as any unpaid per
diem and hourly amounts earned and any unreimbursed expenses, plus any amount
earned and unpaid under Section 3(c) shall be paid to Executive's Beneficiary
within 30 days of such termination. Executive's Beneficiary shall also be
entitled to any death benefits which are provided under the terms of any plan,
program or arrangement referred to in Section 3(f) applicable to Executive at
the time of death.
(e) Beneficiary. For purposes of this Agreement, except as provided
in Section 3(g)(i), "Beneficiary" shall mean the person or persons designated in
writing by Executive to receive benefits under a plan, program or arrangement or
to receive the balance of the Severance Amount, if any, in the event of
Executive's death, or, if no such person or persons are designated by Executive,
Executive's estate. No Beneficiary designation shall be effective unless it is
in writing and received by the Company prior to the date of Executive's death.
5. Protection of the Company's Interests.
(a) No Competing Employment. For so long as Executive is employed
by the Company and continuing for two years after the termination of such
employment or resignation therefrom (such period being referred to hereinafter
as the "Restricted Period"), Executive shall not, unless he receives after the
Effective Date the prior written consent of the Board, directly or indirectly,
own an interest in, manage, operate, join, control, lend money or render
financial or other assistance to or participate in or be connected with, as an
officer, employee, partner, stockholder, consultant or otherwise, any
individual, partnership, firm, corporation or other business organization or
entity that competes with the Company; provided, however, that this Section 5(a)
shall not proscribe Executive's ownership, either directly or indirectly, of
less than five percent of any class of securities which are listed on a national
securities exchange or quoted on the automated quotation system of the National
Association of Securities Dealers, Inc.
(b) No Interference. During the Restricted Period, Executive shall
not, whether for his own account or for the account of any other individual,
partnership, firm, corporation or other business organization (other than the
Company), intentionally solicit, endeavor to entice away from the Company, or
otherwise interfere with the relationship of the Company with, any person who is
employed by or otherwise engaged to perform services
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for the Company or any person or entity who is, or was within the then most
recent twelve-month period, a customer, client or supplier of the Company.
(c) Secrecy. Executive recognizes that the services to be performed
by him hereunder are special, unique and extraordinary in that, by reason of his
employment hereunder, he may acquire confidential information and trade secrets
concerning the operation of the Company or its affiliates or subsidiaries, the
use or disclosure of which could cause the Company or its affiliates or
subsidiaries substantial losses and damages which could not be readily
calculated and for which no remedy at law would be adequate. Accordingly,
Executive covenants and agrees with the Company that he will not at any time,
except in performance of Executive's obligations to the Company hereunder or
with the prior written consent of the Board, directly or indirectly disclose to
any person any secret or confidential information that he may learn or has
learned by reason of his association with the Company, or any of its
subsidiaries and affiliates. The term "confidential information" means any
information not previously disclosed to the public or to the trade by the
Company's management with respect to the Company's, or any of its affiliates' or
subsidiaries', products, facilities and methods, trade secrets and other
intellectual property, systems, procedures, manuals, confidential reports,
product price lists, customer lists, financial information (including the
revenues, costs or profits associated with any of the Company's products),
business plans, prospects or opportunities.
(d) Exclusive Property. Executive confirms that all confidential
information is and shall remain the exclusive property of the Company. All
business records, papers and documents kept or made by Executive relating to the
business of the Company, its affiliates and subsidiaries shall be and remain the
property of the Company. Upon the termination of his employment with the
Company or upon the request of the Company at any time, Executive shall
promptly deliver to the Company, and shall not without the consent of the Board
retain copies of, any written materials not previously made available to the
public, or records and documents made by Executive or coming into his possession
concerning the business or affairs of the Company or any of its affiliates or
subsidiaries; provided, however, that subsequent to any such termination, the
Company shall provide Executive with copies (the cost of which shall be borne by
Executive) of any documents which are requested by Executive and which Executive
has determined in good faith are (i) required to establish a defense to a claim
that Executive has not complied with his duties hereunder or (ii) necessary to
Executive in order to comply with applicable law.
(e) Injunctive Relief. Without intending to limit the remedies
available to the Company, Executive acknowledges that a breach of any of the
covenants contained in this Section 5 may result in material irreparable injury
to the Company or its affiliates or subsidiaries for which there is no adequate
remedy at law, that it will not be possible to measure damages for such injuries
precisely and that, in the event of such a breach or threat thereof, the Company
shall be entitled to obtain a temporary restraining order and/or a preliminary
or permanent injunction restraining Executive from engaging in activities
prohibited by this Section 5 or such other relief as may be required to
specifically enforce
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any of the covenants in this Section 5. Without intending to limit the remedies
available to Executive, Executive shall be entitled to seek specific
performance of the Company's obligations under this Agreement.
6. General Provisions.
(a) Source of Payments. All payments provided under this Agreement,
other than payments made pursuant to a plan which provides otherwise, shall be
paid in cash from the general funds of the Company, and no special or separate
fund shall be established, and no other segregation of assets made, to assure
payment. Executive shall have no right, title or interest whatever in or to any
investments which the Company may make to aid the Company in meeting its
obligations hereunder. To the extent that any person acquires a right to
receive payments from the Company hereunder, such right shall be no greater than
the right of an unsecured creditor of the Company; provided, however, that this
provision shall not be deemed to waive or abrogate any preferential or other
rights to payment accruing to Executive under applicable bankruptcy laws by
virtue of Executive's status as an employee of the Company.
(b) No Other Severance Benefits. Except as specifically set forth
in this Agreement, Executive covenants and agrees that he shall not be entitled
to any other form of severance benefits from the Company, including, without
limitation, benefits otherwise payable under any of the Company's regular
severance policies, in the event his employment hereunder ends for any reason
and, except with respect to obligations of the Company expressly provided for
herein, Executive unconditionally releases the Company and its subsidiaries and
affiliates, and their respective directors, officers, employees and
stockholders, or any of them, from any and all claims, liabilities or
obligations under this Agreement or under any severance or termination
arrangements of the Company or any of its subsidiaries or affiliates for
compensation or benefits in connection with his employment or the termination
thereof.
(c) Tax Withholding. Payments to Executive of all compensation
contemplated under this Agreement shall be subject to all applicable tax
withholding.
(d) Notices. Any notice hereunder by either party to the other shall
be given in writing by personal delivery, or certified mail, return receipt
requested, or (if to the Company) by telex or facsimile, in any case delivered
to the applicable address set forth below:
(i) To the Company: Detrex Corporation
24901 Northwestern Highway
Suite 500
Southfield, Michigan 48075
Attention: Secretary
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With a copy to:
Arbie R. Thalacker, Esq.
Shearman & Sterling
599 Lexington Avenue
New York, New York 10022
(ii) To Executive: William C. King
26281 Siena Drive
Bonita Springs, Florida 33923
or to such other persons or other addresses as either party may specify to the
other in writing.
(e) Representation by Executive. Executive represents and warrants
that his entering into this Agreement does not, and that his performance under
this Agreement and consummation of the transactions contemplated hereby will
not, violate the provisions of any agreement or instrument to which Executive is
a party, or any decree, judgment or order to which Executive is subject, and
that this Agreement constitutes a valid and binding obligation of Executive in
accordance with its terms. Breach of this representation will render all of the
Company's obligations under this Agreement void ab initio.
(f) Change in Control Defined. For purposes of Section 3(d) above, a
"Change in Control of the Company" shall mean:
(i) The acquisition by any individual, entity or group (within the
meaning of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act")) of beneficial ownership (within the
meaning of Rule l3d-3 under the Exchange Act) of 50 percent or more of
either (A) the then outstanding shares of Common Stock (the "Outstanding
Company Common Stock") or (B) the combined voting power of the then
outstanding voting securities of the Company entitled to vote generally in
the election of directors (the "Outstanding Company Voting Securities");
provided, however, that the following acquisitions shall not constitute a
Change of Control: (1) any acquisition directly from the Company (excluding
an acquisition by virtue of the exercise of a conversion privilege), (2)
any acquisition by the Company, (3) any acquisition by any employee benefit
plan (or related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (4) any acquisition by any
corporation pursuant to a reorganization, merger or consolidation which
would not be a Change of Control under Section 6(f)(iii) below; or
(ii) Individuals who, as of the effective date of the Option Plan,
constitute the Board (the "Incumbent Board") ceasing for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director
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subsequent to the Effective Date whose election, or nomination for election
by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Board will be
considered as though such individual were a member of the Incumbent Board,
but excluding, for this purpose, any such individual whose initial
assumption of office occurs as a result of either an actual or threatened
election contest (as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act) or other actual or threatened
solicitation of proxies or consents by or on behalf of a person other than
the Board; or
(iii) The approval by the shareholders of the Company of a
reorganization, merger or consolidation, in each case, unless following
such reorganization, merger or consolidation, (A) more than 50
percent of the then outstanding shares of common stock of the corporation
resulting from such reorganization, merger or consolidated and the combined
voting power of the then outstanding voting securities of such corporation
entitled to vote generally in the election of directors is then
beneficially owned, directly or indirectly, by all or substantially all of
the individuals and entities who were the beneficial owners, respectively,
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities immediately prior to such reorganization, merger or
consolidation in substantially the same proportions as their ownership,
immediately prior to such reorganization, merger or consolidation, of the
Outstanding Company Common Stock and Outstanding Company Voting Securities,
as the case may be, and (B) at least a majority of the members of the board
of directors of the corporation resulting from such reorganization, merger
or consolidation were members of the Incumbent Board at the time of the
execution of the initial agreement providing for such reorganization,
merger or consolidation, or
(iv) The approval by the shareholders of the Company of (A) a
complete liquidation or dissolution of the Company or (B) the sale or other
disposition of all or substantially all of the assets of the Company, other
than to a corporation, with respect to which following such sale or
other disposition, (1) more than 50 percent of the then outstanding shares
of common stock of such corporation and the combined voting power of the
then outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned, directly
or indirectly, by all or substantially all of the individuals and entities
who were the beneficial owners, respectively, of the Outstanding Company
Common Stock and Outstanding Company Voting Securities immediately prior to
such sale or other disposition in substantially the same proportion as
their ownership, immediately prior to such sale or other disposition, of
the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, and (2) at least a majority of the members
of the board of directors of such corporation were members of the Incumbent
Board at the time of the execution of the initial agreement or action of
the Board providing for such sale or other disposition of assets of the
Company.
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(g) Limited Waiver. The waiver by the Company or Executive of a
violation of any of the provisions of this Agreement, whether express or
implied, shall not operate or be construed as a waiver of any subsequent
violation of any such provision.
(h) Assignment; Assumption of Agreement. No right, benefit or
interest hereunder shall be subject to assignment, encumbrance, charge, pledge,
hypothecation or setoff by Executive in respect of any claim, debt, obligation
or similar process. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business or assets of the Company to assume expressly
and to agree to perform this Agreement in the same manner and to the same extent
that the Company would be required to perform it if no such succession had taken
place.
(i) Amendment; Actions by the Company. This Agreement may not be
amended, modified or cancelled except by written agreement of Executive and the
Company. Any and all determinations, judgments, reviews, verifications,
adjustments, approvals, consents, waivers or other actions of the Company
required or permitted under this Agreement shall be effective only if undertaken
by the Company pursuant to authority granted by a resolution duly adopted by the
Board; provided, however, that by resolution duly adopted in accordance with
this Section 6(i), the Board may delegate its responsibilities hereunder to one
or more of its members other than Executive.
(j) Severability. If any term or provision hereof is determined to
be invalid or unenforceable in a final court or arbitration proceeding, (i) the
remaining terms and provisions hereof shall be unimpaired and (ii) the invalid
or unenforceable term or provision shall be deemed replaced by a term or
provision that is valid and enforceable and that comes closest to expressing the
intention of the invalid or unenforceable term or provision.
(k) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Michigan (determined
without regard to the choice of law provisions thereof).
(l) Entire Agreement. This Agreement sets forth the entire
agreement and understanding of the parties hereto with respect to the matters
covered hereby and supersedes all prior agreements and understandings of the
parties with respect to the subject matter hereof, including the Temporary
Agreement.
(m) Headings. The headings and captions of the sections of this
Agreement are included solely for convenience of reference and shall not control
the meaning or interpretation of any provisions of this Agreement.
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(n) Counterparts. This Agreement may be executed by the parties
hereto in counterparts, each of which shall be deemed an original, but both such
counterparts shall together constitute one and the same document.
IN WITNESS WHEREOF, the parties have executed this Agreement effective
as of the day and year first written above.
DETREX CORPORATION
By: Arbie R. Thalacker
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Title: Chairman of the Board
William C. King
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William C. King