Exhibit 10.2
CHANGE IN CONTROL SEVERANCE AGREEMENT
This CHANGE IN CONTROL SEVERANCE AGREEMENT is effective as of May 11,
2006, by and between Compass Minerals International, Inc., a Delaware
corporation (the "Company"), and Angelo C. Brisimitzakis ("Executive").
WITNESSETH
WHEREAS, Company considers the establishment and maintenance of a sound
and vital management to be essential to protecting and enhancing the best
interests of Company and its stockholders; and
WHEREAS, Company recognizes that, as is the case with many publicly
held corporations, the possibility of a change in control may arise and that
possibility may result in the departure or distraction of management personnel
to the detriment of Company and its stockholders; and
WHEREAS, Company's Board of Directors (the "Board") has determined it
is in the best interests of Company and its stockholders to secure Executive's
continued services and to ensure Executive's continued dedication to Executive's
duties in the event of any threat or occurrence of a Change in Control (as
defined in Section 1) of Company;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements contained herein, Company and Executive agree as
follows:
1. DEFINITIONS. As used in this Agreement, the following terms have the
following meanings:
(a) "Bonus Amount" means the higher of (i) Executive's average
annual incentive bonuses during the last 3 completed fiscal years
before the Date of Termination (annualized in the event Executive was
not employed by Company (or its affiliates) for the whole of any such
fiscal year) and (ii) Executive's aggregate annual target bonus
(targeted at 100%) for the fiscal year in which the Date of Termination
occurs.
(b) "Cause" shall mean as it is defined in Executive's
separate Employment Agreement.
(c) "Change in Control" means the occurrence of any one of the
following events:
(i) a transaction or series of transactions (other
than an offering of Company's common stock to the general
public through a registration statement filed with the
Securities and Exchange Commission) whereby any "person" or
related "group" of "persons" (as such terms are used in
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of
1934, as amended (the "Exchange Act") (other than Company, any
of its subsidiaries, any employee benefit plan maintained by
Company or any of its Subsidiaries, or a "person" that, before
such transaction, directly or indirectly controls, is
controlled by, or is under common control with, Company)
directly or indirectly acquires beneficial ownership (within
the meaning of Rule 13d-3 under the Exchange Act) of
securities of Company possessing more than 50% of the total
combined voting power of Company's securities outstanding
immediately after such acquisition; or
(ii) during any period of two consecutive years,
individuals who, at the beginning of such period, constitute
the Board together with any new director(s) (other than a
director designated by a person who shall have entered into an
agreement with Company to effect a transaction described in
clause (i) above or clause (iii) below) whose election by the
Board or nomination for election by Company's stockholders was
approved by a vote of at least two-thirds of the directors
then still in office who either were directors at the
beginning of the two year period
or whose election or nomination for election was previously so
approved, cease for any reason to constitute a majority
thereof; or
(iii) the consummation by Company (whether directly
involving Company or indirectly involving Company through one
or more intermediaries) of (A) a merger, consolidation,
reorganization, or business combination; (B) a sale or other
disposition of all or substantially all of Company's assets;
or (C) the acquisition of assets or stock of another entity,
in each case other than a transaction:
(x) that results in Company's voting securities
outstanding immediately before the
transaction continuing to represent (either
by remaining outstanding or by being
converted into voting securities of Company
or the person that, as a result of the
transaction, controls, directly or
indirectly, Company or owns, directly or
indirectly, all or substantially all of
Company's assets or otherwise succeeds to
the business of Company (Company or such
person, the "Successor Entity")) directly or
indirectly, at least a majority of the
combined voting power of the Successor
Entity's outstanding voting securities
immediately after the transaction, and
(y) after which no person or group beneficially
owns voting securities representing 50% or
more of the combined voting power of the
Successor Entity; provided, however, that no
person or group shall be treated for
purposes of this subsection as beneficially
owning 50% or more of combined voting power
of the Successor Entity solely as a result
of the voting power held in Company before
the consummation of the transaction; or
(iv) Company's stockholders approve a liquidation
or dissolution of Company.
(d) "Date of Termination" means (i) the effective date of
Termination of Executive's employment as provided in Section 12 or (ii)
the date of Executive's death, if Executive is employed as of such
date.
(e) "Good Reason" shall mean as it is defined in Executive's
separate Employment Agreement. In connection therewith, Executive must
-- under this Agreement -- provide notice of termination of employment
pursuant to Section 12 within 90 days of Executive's knowledge of an
event constituting Good Reason or such event shall not constitute Good
Reason under this Agreement. Additionally, an isolated, insubstantial,
or inadvertent action taken in good faith and that is remedied by
Company within 10 days after receipt of notice thereof given by
Executive shall not constitute Good Reason.
(f) "Qualifying Termination" means a termination of
Executive's employment during the Termination Period (i) by Company
other than for Cause or (ii) by Executive for Good Reason.
(g) "Subsidiary" means any corporation or other entity in
which Company has a direct or indirect ownership interest of 50% or
more of the total combined voting power of the then outstanding
securities or interests of such corporation or other entity entitled to
vote generally in the election of directors or in which Company has the
right to receive 50% or more of the distribution of profits or 50% of
the assets on liquidation or dissolution.
(h) "Termination Period" means the period beginning with a
Change in Control and ending 2 years following such Change in Control.
Notwithstanding anything in this Agreement to the contrary, if (i)
Executive's employment is terminated before a Change in Control for
reasons that would have constituted a Qualifying Termination if they
had occurred after a Change in Control; (ii) Executive reasonably
demonstrates such termination (or Good Reason event) was at the request
of a third party who had indicated an intention or taken steps
reasonably calculated to effect a Change in Control; and (iii) a Change
in Control involving such third party (or a party competing with such
third party to effectuate a Change in Control) occurs, then, for
purposes of this Agreement, the date immediately before the date of
such
termination or event constituting Good Reason shall be treated as a
Change in Control. For purposes of determining the timing of payments
and benefits under Section 4, the date of the actual Change in Control
shall be treated as the Date of Termination under Section 1(d), and,
for purposes of determining the amount of payments and benefits to
Executive under Section 4, the date Executive's employment is actually
terminated shall be treated as the Date of Termination under Section
1(d).
2. OBLIGATION OF EXECUTIVE. In the event of a tender or exchange offer,
proxy contest, or the execution of any agreement that, if consummated, would
constitute a Change in Control, Executive agrees not to leave the employ of
Company voluntarily, except as provided in Section 1(h), until the Change in
Control occurs or, if earlier, then such tender or exchange offer, proxy
contest, or agreement is terminated or abandoned.
3. TERM OF AGREEMENT. This Agreement shall be effective on the date
hereof and shall continue in effect until December 31, 2008. On January 1, 2009,
and on each January 1 thereafter, the Term shall automatically extend for an
additional 1 year, unless either party gives written notice otherwise at least
60 days before the date such extension would be effective. This Agreement shall
continue in effect for a period of 2 years after a Change in Control,
notwithstanding the delivery of any such notice, if such Change in Control
occurs during the term of this Agreement. Notwithstanding anything in this
Section to the contrary, this Agreement shall terminate if Executive or Company
terminates Executive's employment before a Change in Control other than as
provided in Section 1(h).
4. PAYMENTS UPON TERMINATION OF EMPLOYMENT.
(A) QUALIFYING TERMINATION. In the event of a Qualifying
Termination, Company shall provide Executive the payments and benefits
set forth in subsections (b) and (c) of this Section.
(B) QUALIFYING TERMINATION -- CASH PAYMENTS. Within 30 days of
a Qualifying Termination, Company shall make a lump sum cash payment to
Executive of the following:
(i) an amount equal to Executive's base salary due,
pro-rata bonus compensation due, and unreimbursed business
expenses properly incurred through the Date of Termination;
and
(ii) an amount equal to 2 times the sum of (A)
Executive's highest annual rate of base salary during the
12-month period immediately before the Date of Termination,
plus (B) the higher of (x) Executive's Bonus Amount or (y)
Executive's annual target bonus for the fiscal year in which
the Date of Termination occurs.
(C) QUALIFYING TERMINATION -- BENEFITS. In the event of a
Qualifying Termination, Company shall allow Executive to continue to
participate in its medical, dental, accident, disability, and life
insurance benefit plans at the same level on which Executive was
enrolled as of the Change in Control (subject to generally applicable
changes to such plans) for 2 years or until Executive becomes eligible
for such benefits through another employer, whichever occurs first;
provided, that, if Executive cannot continue to participate in Company
plans providing such benefits, then Company shall otherwise provide
such benefits on the same after-tax basis as if continued participation
had been permitted.
(D) NON-QUALIFYING TERMINATION. In the event Company
terminates Executive's employment with Cause or Executive terminates
his employment without Good Reason, Company shall be obligated only to
pay Executive's base salary due through the Date of Termination and to
reimburse Executive for unreimbursed business expenses properly
incurred through the Date of Termination.
(E) CONDITION PRECEDENT. As a condition precedent to receipt
of the payments and benefits provided by subsections (b) and (c) of
this Section, Executive must execute an Agreement acceptable to Company
that contains a release of any and all claims substantially in the
following form:
Executive (on behalf of Executive and anyone claiming through
or on behalf of Executive) hereby releases Company (as defined herein)
and any and all of its subsidiaries, affiliated entities, related
companies, successors, and assigns and any and all current/former
officers, directors, employees, and
agents, without limitation ("Company Affiliates") from any and all
claims, demands, and causes of action ("claims"), known or unknown,
suspected or unsuspected, that Executive has or may have had against
any of them before the date Executive signs this Agreement, to the
maximum extent permitted by law and without limitation. This release
includes, but is not limited to, the following: claims related to or
concerning Executive's employment with Company; claims sounding in
contract and/or tort; claims for discrimination/harassment/retaliation
under local, state, or federal law, including but not limited to Title
VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the
Americans with Disabilities Act, the Age Discrimination in Employment
Act, and any other federal, state, or local law; claims under the
Family and Medical Leave Act; claims under any Company policy and/or
practice; and all other claims, whether common law or contract, all to
the maximum extent permitted by law and without limitation.
5. ADDITIONAL REIMBURSEMENT PAYMENT BY COMPANY. If Executive is subject
to the excise tax imposed by Section 4999 of the Internal Revenue Code with
respect to any payment or benefit payable by Company following a Change of
Control (ignoring for this purpose any payment under this Section 5), then
Company shall pay to Executive an additional payment (a "Reimbursement Payment")
in an amount such that, after payment by Executive of all taxes (including,
without limitation, any income taxes and any interest and penalties imposed with
respect thereto, and any excise tax) imposed upon the Reimbursement Payment,
Executive retains an amount of the Reimbursement Payment equal to the amount
Executive pays as a result of such excise tax. For purposes of determining the
amount of the Reimbursement Payment, Executive shall be deemed to pay applicable
federal, state, and local income taxes at the highest marginal rates of income
taxation for the calendar year in which the Reimbursement Payment is to be made,
net of the maximum reduction in federal income taxes that could be obtained from
deduction of such state and local taxes.
6. DELAY OF PAYMENTS. In the event that any payment or distribution to
be made hereunder constitutes "deferred compensation" subject to Section 409A of
the Internal Revenue Code and Executive is determined to be a specified employee
(as defined in Section 409A), such payment or distribution shall not be made
before the date that is six months after the termination of Executive's
employment (or, if earlier, the date of the Executive's death).
7. WITHHOLDING TAXES. Company may withhold from all payments under this
Agreement all required taxes and/or other withholdings.
8. RESOLUTION OF DISPUTES; REIMBURSEMENT OF LEGAL FEES.
(A) Any dispute or controversy arising under or in connection
with this Agreement (other than disputes related to the Restrictive
Covenant Agreement referenced in Section 9) shall be settled by final,
binding arbitration in Johnson County, Kansas, in accordance with the
National Rules for the Resolution of Employment Disputes of the
American Arbitration Association then in effect. Except as provided
herein, Company shall bear the costs of the arbitration.
(B) Any dispute or claim governed by this Section 8 shall be
heard by 1 arbitrator; provided, however, that either party may elect
to have any dispute governed by this Section 8 to be resolved by a
panel of three arbitrators, in which case the party electing same shall
bear any additional costs resulting from such election, the provisions
of Section 8(A) notwithstanding.
(C) If Executive prevails in any contest or dispute under this
Agreement involving termination of Executive's employment with Company
or involving Company's refusal to perform fully in accordance with the
terms hereof, then Company shall reimburse Executive for all reasonable
legal fees and related expenses incurred in connection with such
contest or dispute.
9. RESTRICTIVE COVENANTS. Executive hereby agrees to the terms of
Company's Restrictive Covenant Agreement attached hereto, which Restrictive
Covenant Agreement Executive also hereby agrees to execute.
10. SCOPE OF AGREEMENT. Nothing in this Agreement shall be deemed to
entitle Executive to continued employment with Company and, if Executive's
employment with Company terminates before a Change in Control, then Executive
shall have no further rights under this Agreement (except as otherwise provided
hereunder).
11. SUCCESSORS; BINDING AGREEMENT.
(a) This Agreement shall survive any business combination and
shall be binding upon the surviving entity of any business combination
(in which case any such surviving entity shall be treated as Company
hereunder).
(b) In connection with any business combination, Company will
cause any successor entity to Company unconditionally to assume by
written instrument delivered to Executive (or his beneficiary or
estate) all of the obligations of Company hereunder. Company's failure
to obtain such assumption before the effective date of any such
business combination constitutes Good Reason. For purposes of
implementing the foregoing, the date on which any such business
combination becomes effective shall be deemed the date Good Reason
occurs and shall be the Date of Termination, if requested by Executive.
(c) This Agreement shall inure to the benefit of and be
enforceable by Executive's personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees,
and legatees. If Executive dies while any amounts would be payable to
Executive hereunder, then all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to
such person or persons appointed in writing by Executive to receive
such amounts or, if no person is so appointed, to Executive's estate.
12. NOTICE.
(a) For purposes of this Agreement, all notices and other
communications required or permitted hereunder shall be in writing and
shall be deemed to have been duly given when delivered or 5 days after
deposit in the United States mail, certified and return receipt
requested, postage prepaid, addressed as follows:
If to Executive:
-----------------------------------------------------
If to Company: Compass Minerals International, Inc.
9900 West 109th Street
Overland Park KS 66210
Attention: Vice President Human Resources
or to such other address as either party may have furnished to the
other in writing in accordance herewith, except that notices of change
of address shall be effective only upon receipt.
(b) A written notice of the Date of Termination shall (i)
indicate the specific termination provision in this Agreement relied
upon; (ii) to the extent applicable, set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated; and (iii)
specify the termination date, which date shall be not less than 15 days
or more than 60 days after the giving of such notice. The failure to
set forth in such notice any fact or circumstance that contributes to a
showing of Good Reason or Cause shall not waive any right hereunder or
preclude Executive or Company from asserting such fact or circumstance
in enforcing Executive's or Company's rights hereunder.
13. FULL SETTLEMENT. Company's obligation to make any payments provided
for in this Agreement and otherwise to perform its obligations hereunder shall
be in lieu and in full settlement of all other severance payments to Executive
under any other severance or employment agreement between Executive and Company
and any severance plan of Company. Company's obligations hereunder shall not be
affected by any set-off, counterclaim, recoupment, defense, or other claim,
right, or action that Company may have against Executive or
others. In no event shall Executive be obligated to seek other employment or
take other action by way of mitigation of the amounts payable to Executive under
any of the provisions of this Agreement and, except as provided in Section 4(c),
such amounts shall not be reduced whether or not Executive obtains other
employment.
14. SURVIVAL. The respective obligations and benefits afforded to
Company and Executive as provided in Sections 4 (to the extent that payments or
benefits are owed as a result of a termination of employment that occurs during
the term of this Agreement), 5 (to the extent that Payments are made to
Executive as a result of a Change in Control that occurs during the term of this
Agreement), 6, 7, 8, 9, 11(c), and 13 shall survive the termination of this
Agreement.
15. GOVERNING LAW; VALIDITY. Interpretation and/or enforcement of this
Agreement shall be subject to and governed by the laws of the State of Kansas,
irrespective of the fact that one or both of the parties now is or may become a
resident of a different state and notwithstanding any authority to the contrary.
The invalidity or unenforceability of any provision of this Agreement shall not
affect the validity or enforceability of any other provision of this Agreement,
which other provisions shall remain in full force and effect.
16. COUNTERPARTS. This Agreement may be executed in counterparts, each
of which shall be deemed to be an original and all of which together shall
constitute one and the same instrument.
17. MISCELLANEOUS. For purposes of interpretation/enforcement, the
parties to this Agreement shall be considered joint authors, and this Agreement
shall not be strictly construed against either such party. No provision of this
Agreement may be modified or waived unless such modification or waiver is agreed
to in writing and signed by Executive and by a duly authorized officer of
Company. No waiver by either party at any time of any breach by the other party
of, or compliance with, any condition or provision of this Agreement to be
performed by such other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same or at any prior or subsequent time. Failure
by Executive or Company to insist upon strict compliance with any provision of
this Agreement or to assert any right hereunder, including without limitation,
the right of Executive to terminate employment for Good Reason, shall not be
deemed to be a waiver of such provision or right or any other provision or right
of this Agreement. Except as otherwise specifically provided herein, the rights
of, and benefits payable to, Executive, his estate, or his beneficiaries
pursuant to this Agreement are in addition to any rights of, or benefits payable
to, Executive, his estate, or his beneficiaries under any other employee benefit
plan or compensation program of Company.
IN WITNESS WHEREOF, Company and Executive have executed this Agreement
as of the date and year first above written.
EXECUTIVE: ON BEHALF OF COMPANY:
/s Angelo C. Brisimitzakis By: /s David J. D'Antoni
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Angelo C. Brisimitzakis David J. D'Antoni, Director and Chair,
Compensation Committee
Approved by the Board of Directors on the 11th day of May, 2006.