EXHIBIT 10.1
[NAME
ADDRESS]
Dear Mr. _________________:
Ashland Inc. considers the establishment and maintenance of a sound
and vital management to be essential to protecting and enhancing the best
interest of the Company and its shareholders. In this regard, the Company
recognizes that, as is the case with many publicly-held corporations, the
possibility of a Change in Control of the Company does exist and that such
possibility, and the uncertainty and questions which a Change in Control of
the Company may raise among management, may result in the departure or
distraction of management personnel to the detriment of the Company and its
shareholders. In addition, difficulties in attracting and retaining new
senior management personnel may be experienced. Accordingly, on the basis
of the recommendation of the Personnel and Compensation Committee of the
Board, the Board has determined that appropriate steps should be taken to
reinforce and encourage the continued attention and dedication of certain
members of the Company's management, including you, to their assigned
duties without distraction in the face of the potentially disruptive
circumstances arising from the possibility of a Change in Control of the
Company.
In order to encourage you to remain in the employ of the Company, this
Agreement sets forth those benefits which the Company will provide to you
in the event your employment with the Company terminates under the
circumstances specified in this Agreement.
SECTION A. DEFINITIONS
1. "Agreement" shall mean this letter agreement.
2. "Board" shall mean the Company's Board of Directors.
3. "Cause" shall occur hereunder only upon (A) the willful and
continued failure by you substantially to perform your duties with the
Company (other than any such failure resulting from your incapacity that is
less than 6 months in duration due to physical or mental illness or injury)
after a written demand for substantial performance is delivered to you by
the Board which specifically identifies the manner in which the
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Board believes that you have not substantially performed your duties, (B)
the willful engaging by you in gross misconduct materially and demonstrably
injurious to the Company after a written demand to cease such misconduct is
delivered to you by the Board, or (C) your conviction of or the entering of
a plea of nolo contendre to the commission of a felony involving moral
turpitude. For purposes of this paragraph, no act, or failure to act, on
your part shall be considered "willful" unless done, or omitted to be done,
by you not in good faith and without reasonable belief that your action or
omission was in the best interest of the Company. Notwithstanding the
foregoing, you shall not be deemed to have been terminated for Cause unless
and until there shall have been delivered to you a copy of a resolution
duly adopted by the affirmative vote of not less than three-quarters of the
entire membership of the Board at a meeting of the Board called and held
for the purpose, among others, (after at least 20 days prior notice to you
and an opportunity for you, together with your counsel, to be heard before
the Board), of finding that (i) in the good faith opinion of the Board you
failed to perform your duties or engaged in misconduct as set forth above
in subparagraph (A) or (B) of this paragraph, and that you did not correct
such failure or cease such misconduct after being requested to do so by the
Board, or (ii) as set forth in subparagraph (C) of this paragraph, you have
been convicted of or have entered a plea of nolo contendre to the
commission of a felony involving moral turpitude.
4. "Change in Control of the Company" shall be deemed to have occurred
if (i) there shall be consummated (A) any consolidation or merger of the
Company (a "Business Combination"), other than a consolidation or merger of
the Company into or with a direct or indirect wholly-owned subsidiary, in
which the shareholders of the Company own, directly or indirectly, less
than 50% of the then outstanding shares of common stock of the Business
Combination that are entitled to vote generally for the election of
directors of the Business Combination or pursuant to which shares of the
Company's Common Stock would be converted into cash, securities or other
property, other than a merger of the Company in which the holders of the
Company's Common Stock immediately prior to the merger have substantially
the same proportionate ownership of common stock of the surviving
corporation immediately after the merger, or (B) any sale, lease, exchange
or transfer (in one transaction or a series of related transactions) of all
or substantially all the assets of the Company, provided, however, that no
sale, lease, exchange or other transfer of all or substantially all the
assets of the Company shall be deemed to occur unless assets constituting
80% of the total assets of the Company are transferred pursuant to such
sale, lease, exchange or other transfer, or (ii) the shareholders of the
Company shall approve any plan or proposal for the liquidation or
dissolution of the Company, or (iii) any Person, other than the Company or
a Subsidiary thereof or any employee benefit plan sponsored by the Company
or a Subsidiary thereof, shall become the beneficial owner (within the
meaning of Rule 13d-3 under the Exchange Act) of securities of the Company
representing 15% or more of the combined voting power of the Company's then
outstanding securities ordinarily (and apart from rights accruing in
special circumstances) having the right to vote in the election of
directors, as a result of a tender or exchange offer, open market
purchases,
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privately-negotiated purchases or otherwise, without the approval of the
Board or (iv) at any time during a period of two (2) consecutive years,
individuals who at the beginning of such period constituted the Board shall
cease for any reason to constitute at least a majority thereof, unless the
election or the nomination for election by the Company's shareholders of
each new director during such two-year period was approved by a vote of at
least two-thirds of the directors then still in office who were directors
at the beginning of such two-year period.
5. "COBRA" shall mean the Consolidated Omnibus Budget Reconciliation
Act, as amended.
6. "Common Stock" shall mean the common stock, par value $.01 per
share, of the Company.
7. "Company" shall mean Ashland Inc. and any successor to its business
and/or assets which executes and delivers the agreement provided for in
Section F, paragraph 1 hereof or which otherwise becomes bound by all the
terms and provisions of this Agreement by operation of law.
8. "Competitive Activity" shall have the meaning as set forth in
Section C, paragraph 2.
9. "Competitive Operation" shall have the meaning as set forth in
Section C, paragraph 2.
10. "Confidential Information" shall mean information relating to the
Company's, its divisions' and Subsidiaries' and their successors' business
practices and business interests, including, but not limited to, customer
and supplier lists, business forecasts, business and strategic plans,
financial and sales information, information relating to products, process,
equipment, operations, marketing programs, research, or product
development, engineering records, computer systems and software, personnel
records or legal records.
11. "Date Of Termination" shall mean: (A) if this Agreement is
terminated for Disability, thirty (30) days after the Notice of Termination
is given by the Company to you (provided that you shall not have returned
to the performance of your duties on a full-time basis during such thirty
(30) day period), (B) if your employment is terminated for Good Reason by
you, the date specified in the Notice of Termination, and (C) if your
employment is terminated for any other reason, the date on which a Notice
of Termination is received by you unless a later date is specified. For
purposes of applying the provisions of this paragraph 11, the determination
of when your employment is terminated shall be made consistent with the
Section 409A Provisions.
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12. "Disability" shall occur when: if, as a result of your incapacity
due to physical or mental illness, you shall have been absent from your
duties with the Company for six (6) consecutive months and shall not have
returned to full-time performance of your duties within thirty (30) days
after written notice is given to you by the Company.
13. "Exchange Act" shall mean the Securities Exchange Act of 1934, as
amended.
14. "Excise Tax" shall have the meaning as set forth in Section E.
15. "Good Reason" shall mean:
(a) without your express written consent, the assignment to you
after a Change in Control of the Company, of any duties
inconsistent with, or a significant diminution of, your positions,
duties, responsibilities or status with the Company immediately
prior to a Change in Control of the Company, or a diminution in
your titles or offices as in effect immediately prior to a Change
in Control of the Company or any removal of you from, or any
failure to reelect you to, any of such positions;
(b) a reduction by the Company in your base salary in effect
immediately prior to a Change in Control of the Company;
(c) the failure by the Company to continue in effect any savings,
stock ownership, pension, life insurance, health, dental and
accident or disability plan in which you are participating or are
eligible to participate at the time of a Change in Control of the
Company (or plans providing you with substantially similar
benefits), except as otherwise required by the terms of such plans
as in effect at the time of any Change in Control of the Company,
or the taking of any action by the Company which would adversely
affect your participation in or materially reduce your benefits
under any of such plans or deprive you of any material fringe
benefits enjoyed by you at the time of the Change in Control of
the Company or the failure by the Company to provide you with the
number of paid vacation days to which you are entitled in
accordance with the vacation policies of the Company in effect at
the time of a Change in Control of the Company, unless a
comparable plan is substituted therefor;
(d) the failure by the Company to continue in effect any incentive
plan or arrangement (including without limitation, the Company's
Incentive Compensation plan, annual bonus and contingent bonus
arrangements and credits and the right to receive performance
awards and similar incentive compensation benefits) in which you
are participating at the time of a Change in Control of the
Company (or to substitute and continue other plans or
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arrangements providing you with substantially similar benefits),
except as otherwise required by the terms of such plans as in
effect at the time of any Change in Control of the Company;
(e) the failure by the Company to continue in effect any plan or
arrangement to receive securities of the Company (including,
without limitation, any plan or arrangement to receive and
exercise stock options, stock appreciation rights, restricted
stock or grants thereof or to acquire stock or other securities of
the Company) in which you are participating at the time of a
Change in Control of the Company (or to substitute and continue
plans or arrangements providing you with substantially similar
benefits), except as otherwise required by the terms of such plans
as in effect at the time of any Change in Control of the Company,
or the taking of any action by the Company which would adversely
affect your participation in or materially reduce your benefits
under any such plan;
(f) the relocation after a Change in Control of your principal
place of business to a location that exceeds a 50 mile radius from
your principal place of business before the Change in Control,
except for required travel on the Company's business to an extent
substantially consistent with your present business travel
obligations, or, in the event you consent to any such relocation,
the failure by the Company to pay (or reimburse you for) all
reasonable moving expenses incurred by you relating to a change of
your principal residence in connection with such relocation and to
indemnify you against any loss (defined as the difference between
the actual sale price of such residence and the greater of (a)
your aggregate investment in such residence, or (b) the fair
market value of such residence as determined by Relocation
Properties Management LLC or other real estate appraiser
reasonably satisfactory to both you and the Company) realized in
the sale of your principal residence in connection with any such
change of residence;
(g) any breach by the Company of any material provision of this
Agreement; or
(h) any failure by the Company to obtain the assumption of this
Agreement by any successor or assign of the Company.
16. "Gross-up Payment" shall have the meaning as set forth in Section
E.
17. "Notice of Termination" shall mean a notice which shall indicate
the specific termination provision in this Agreement relied upon and shall
set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of your employment under the provision so
indicated. For purposes of applying the provisions of this paragraph 17,
the determination of when your employment is terminated shall be made
consistent with the Section 409A Provisions.
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18. "Payment" shall have the meaning as set forth in Section E.
19. "Person" shall have the meaning as set forth in the Sections 13(d)
and 14(d)(2) of the Exchange Act.
20. "Qualifying Termination" shall mean the termination of your
employment after a Change in Control of the Company while this Agreement is
in effect, unless such termination is (a) by reason of your death or
Disability, (b) by the Company for Cause, or (c) by you other than for Good
Reason.
21. "Salary Continuation Period" shall have the meaning set forth in
Section C, paragraph 1.
22. "Section 409A Provisions" shall mean those statutory provisions of
the Internal Revenue Code of 1986 (as amended) contained in Section 409A
thereof and the guidance promulgated by the US Department of Treasury or
any subdivision thereof interpreting Section 409A.
23. "Subsidiary" shall mean any corporation of which more than 20% of
the outstanding capital stock having ordinary voting power to elect a
majority of the board of directors of such corporation (irrespective of
whether or not at the time capital stock of any other class or classes of
such corporation shall or might have voting power upon the occurrence of
any contingency) is at the time directly or indirectly owned by the
Company, by the Company and one or more other Subsidiaries, or by one or
more other Subsidiaries.
SECTION B. TERM AND BENEFITS
This Agreement shall be in effect for two years from the date you
accept this Agreement and shall automatically renew for successive one (1)
year periods on the first day of each month. This Agreement may be
terminated by either party provided that at least fifteen (15) days advance
written notice is given by either party to the other party hereto prior to
the commencement of the next succeeding one (1) year period at which time
the Agreement shall terminate at the end of the next succeeding one (1)
year period. During the term of employment hereunder, you agree to devote
your full business time and attention to the business and affairs of the
Company and to use your best efforts, skills and abilities to promote its
interests.
This Agreement shall automatically terminate, without additional
notice, in the event of your death, Disability, or upon the effective date
of your retirement in the event you retire at your election or in
accordance with the Company's generally applicable retirement policies, as
in effect from time to time. Notwithstanding the first sentence of this
paragraph and the first and second sentences of this Section B, if a Change
in Control of the Company should occur while you are still an employee of
the
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Company and while this Agreement is in effect, then this Agreement shall
continue in effect from the date of such Change in Control of the Company
for a period of two years. Prior to a Change in Control of the Company,
your employment may be terminated by the Company for Cause at any time
pursuant to a Notice of Termination. In such event, you shall not be
entitled to the benefits provided hereunder. No benefits shall be payable
hereunder unless your employment is terminated without Cause or there shall
have been a Change in Control of the Company and your employment by the
Company shall thereafter terminate in accordance with Section D hereof.
SECTION C. TERMINATION PRIOR TO CHANGE IN CONTROL
1. Compensation Prior to a Change in Control. If you are terminated by
the Company without Cause during the term of this Agreement and prior to a
Change in Control of the Company, you shall be entitled to receive:
(a) payment of your highest salary during the prior two year
fiscal years preceding the fiscal year in which your Date of
Termination occurs for a period of two (2) years after your Date
of Termination in accordance with the Company's normal payroll
practices ("Salary Continuation Period"), provided, however, that
the first six months of payments of such salary shall be withheld
and paid in a single lump sum in the seventh calendar month after
the calendar month in which the Date of Termination occurs;
(b) continuation of your and your eligible dependents' existing
participation at regular employee rates, in effect from time to
time, in all of the Company's medical, dental and group life plans
or programs in which you were participating immediately prior to
your Date of Termination during the Salary Continuation Period and
any entitlement to COBRA continuation coverage under the medical
and dental plans shall run concurrently with the Salary
Continuation Period; provided, however, that said continuation of
coverage in the medical and dental plans during the Salary
Continuation Period shall be charged at the full cost for such
coverage (meaning the active employee contribution and the
Company's contribution) if the charging of active employee rates
for such coverage would result in a violation of the Section 409A
Provisions. In the event that your continued participation in any
such plan or program is for whatever reason impossible, the
Company shall arrange upon comparable terms to provide you with
benefits substantially equivalent on an after tax basis to those
which you and your eligible dependents are, or become, entitled to
receive under such plans and programs;
(c) if and when payments are made, payment in cash of any pro-rata
portion (up through your Date Of Termination) of any amounts you
would have received under the Company's performance unit/share
plans, incentive compensation plan
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and any other similar executive compensation plan in which you
were a participant immediately prior to your Date of Termination;
provided, however, if the Company should determine that the said
payment would constitute deferred compensation under the Section
409A Provisions, then said payment shall be made no earlier than
the first day of the seventh calendar month after the calendar
month in which the Date of Termination occurs; and
(d) outplacement services historically offered to displaced
employees by the Company under substantially the same terms and
fee structure as is consistent with an employee in your position,
provided, however, such outplacement services may not extend
beyond December 31 of the second calendar year after the calendar
year in which occurred your Date of Termination.
However, in the event that your employment with the Company is terminated
during the term of this Agreement and prior to a Change in Control of the
Company and such termination is on account of your death; your Disability;
your voluntary termination; your retirement; or if your employment is
terminated for Cause, you shall not be entitled to receive any benefits
under this Agreement.
2. Certain Restrictions
(a) Competitive Activity. In consideration of the foregoing, you
agree that if your employment is terminated during the term of
this Agreement and prior to a Change in Control of the Company,
then during a period ending 12 months following your Date of
Termination you shall not engage in any Competitive Activity;
provided, you shall not be subject to the foregoing obligation if
the Company breaches a material provision of this Agreement. If
you engage in any Competitive Activity during that period, the
Company shall be entitled to recover any benefits paid to you
under this Agreement. For purposes of this Agreement, "Competitive
Activity" shall mean your participation, without the written
consent of the General Counsel of the Company, in the management
of any business operation of any enterprise if such operation (a
"Competitive Operation") engages in substantial and direct
competition with any business operation actively conducted by the
Company or its divisions and Subsidiaries on your Date of
Termination. For purposes of this paragraph, a business operation
shall be considered a Competitive Operation if such business sells
a competitive product or service which constitutes (i) 15% of that
business's total sales or (ii) 15% of the total sales of any
individual subsidiary or division of that business and, in either
event, the Company's sales of a similar product or service
constitutes (i) 15% of the total sales of the Company or (ii) 15%
of the total sales of any individual Subsidiary or division of the
Company. Competitive Activity shall not include (i) the mere
ownership of securities in any enterprise, or (ii) participation
in the management of any enterprise or any business operation
thereof, other than in connection with a Competitive Operation of
such enterprise.
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(b) Non-Solicitation and Non-Interference. In consideration of the
foregoing, you agree that if your employment is terminated during
the term of this Agreement and prior to a Change in Control of the
Company, then during a period ending 12 months following your Date
of Termination you shall not, without the prior written consent of
the General Counsel of the Company, directly or indirectly, (1)
solicit for employment (which shall include services as an
employee, independent contractor or in any other like capacity)
any person employed by the Company or its affiliated companies as
of the date of such solicitation, or (2) solicit any customer or
other person with a business relationship with the Company or any
of its affiliated companies to terminate, curtail or otherwise
limit such business relationship, or (3) in any other manner
interfere in the business relationship the Company or any of its
affiliated companies have with any customer or any third party
service provider or other vendor.
(c) Injunctive Relief. In the event of a breach or threatened
breach of this paragraph 2 of Section C, each party agrees that
the non-breaching party shall be entitled to injunctive relief in
a court of appropriate jurisdiction to remedy any such breach or
threatened breach, the parties acknowledging that damages would be
inadequate and insufficient.
3. Release. In exchange for the benefits herein, you completely
release the Company to the fullest extent permitted by law from all claims
you may have against the Company on your Date of Termination except claims
related to (a) claims for benefits to which you are entitled under this
Agreement and (b) any applicable worker's compensation or unemployment
compensation laws.
SECTION D. TERMINATION FOLLOWING CHANGE IN CONTROL
1. Qualifying Termination. If your termination is a Qualifying
Termination, you shall be entitled to receive the payments and benefits
provided in this Section.
2. Notice of Termination. Except as provided in Section F, paragraph
1, any termination of your employment following a Change in Control of the
Company shall be communicated by written Notice of Termination to the other
party hereto. No termination shall be effective without such Notice of
Termination.
3. Compensation Upon Termination After a Change in Control.
(a) If your termination is a Qualifying Termination, then the
Company shall pay to you as severance pay (and without regard to
the provisions of any benefit or incentive plan), in a lump sum
cash payment on the fifth (5th) day of the seventh calendar month
following the month in which occurs your Date of
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Termination, an amount equal to three (3) times the sum of (i)
your highest annual base compensation plus (ii) the highest target
annual incentive compensation (expressed as a percentage of base
compensation for all applicable incentive compensation plans) in
respect of the prior three (3) fiscal years preceding the fiscal
year in which your Date of Termination occurs.
(b) If your termination is a Qualifying Termination, the Company
shall, in addition to the payments required by the preceding
paragraph:
(i) provide for continuation of your and your eligible
dependents' participation at regular employee rates, in
effect from time to time, in all of the Company's medical,
dental and group life plans or programs in which you were
participating immediately prior to your Date of Termination
for a period ending on the December 31 of the second calendar
year following the calendar year in which your Date of
Termination occurred and any entitlement to COBRA
continuation coverage under the medical and dental plans
shall run concurrently with said period; provided, however,
that said continuation of coverage in the medical and dental
plans during all or part of such period shall be charged at
the full cost for such coverage (meaning the active employee
contribution and the Company's contribution) if the charging
of active employee rates for such coverage during all or part
of such period would result in a violation of the Section
409A Provisions. In the event that your continued
participation in any such plan or program is for whatever
reason impossible, the Company shall arrange upon comparable
terms to provide you with benefits substantially equivalent
on an after tax basis to those which you and your eligible
dependents are, or become, entitled to receive under such
plans and programs;
(ii) provide for full payment in cash of any performance
unit/share awards in existence on your Date of Termination
less any amounts paid to you under the applicable performance
unit/share plan upon a Change in Control of the Company
pursuant to the provisions of such plan; provided, however,
if the Company should determine that the said payment would
constitute deferred compensation under the Section 409A
Provisions, then said payment shall be made no earlier than
the first day of the seventh calendar month after the
calendar month in which the Date of Termination occurs;
(iii) provide for payment in cash of any incentive
compensation (a) for the fiscal year during which the Change
in Control of the Company occurred and any prior fiscal years
for which you have not yet received payment, and (b) payment
of the pro-rata portion (up through your Date of Termination)
of any incentive compensation for the fiscal year in which
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your Date of Termination occurs calculated on the basis of
the target bonus percentage of base compensation in the
applicable incentive compensation plan (or plans); provided,
however, if the Company should determine that the said
payment would constitute deferred compensation under the
Section 409A Provisions, then said payment shall be made no
earlier than the first day of the seventh calendar month
after the calendar month in which the Date of Termination
occurs;
(iv) provide benefits or compensation under any compensation
plan, arrangement or agreement not in existence as of the
date hereof but which may be established by the Company prior
to your Date of Termination at such time as payments are made
thereunder to the same extent as if you had been a full-time
employee on the date such payments would otherwise have been
made or benefits vested; provided, however, if the Company
should determine that the said payment would constitute
deferred compensation under the Section 409A Provisions, then
said payment shall be made no earlier than the first day of
the seventh calendar month after the calendar month in which
the Date of Termination occurs;
(v) for one (1) year after your Date of Termination, provide
and pay for outplacement services, by a firm reasonably
acceptable to you, that has historically been offered to
displaced employees generally by the Company under
substantially the same terms and fee structure (but limited
in an amount not to exceed 15 percent of your annual base
compensation for the year in which your Date of Termination
occurs or your annual base compensation with the Company
immediately before the Change in Control, if greater) as is
consistent with an employee in your then current position
(or, if higher, your position immediately prior to the Change
in Control of the Company);
(vi) for one (1) year after your Date of Termination, provide
and pay for financial planning services, by a firm reasonably
acceptable to you, that have historically been offered to you
under substantially the same terms and fee structure as is
consistent with an employee in your then current position
(or, if higher, your position immediately prior to the Change
in Control of the Company);
(vii) pay to you an amount equal to the value of all unused,
earned and accrued vacation as of your Date of Termination
pursuant to the Company's policies in effect immediately
prior to the Change in Control of the Company; provided,
however, said payment shall be made no earlier than the first
day of the seventh calendar month after the calendar month in
which the Date of Termination occurs; and
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(viii) provide for the immediate vesting of all stock options
and all stock appreciation rights held by you, as of your
Date of Termination, under any Company stock option plan and
stock appreciation rights plan and all such stock options and
stock appreciation rights shall be exercisable for the
remaining terms of the said options and rights.
(c) Unless otherwise provided in this Agreement or in the
applicable compensation or stock option plan or program, all
payments shall be made to you within thirty (30) days after your
Date of Termination. The benefits in this Agreement are in
addition to all accrued and vested benefits to which you are
entitled under any of the Company's plans and arrangements (to the
extent accrued and vested benefits are relevant under the
particular plan or arrangement), including but not limited to, the
accrued vested benefits to which you are eligible and entitled to
receive under any of the Company's qualified and non-qualified
benefit or retirement plans, or any successor plans in effect on
your Date of Termination hereunder. For these purposes, accrued
and vested benefits shall include any extra, special or additional
benefits under such qualified and non-qualified benefit or
retirement plans that become due because of the Change in Control.
(d) You shall not be required to mitigate the amount of any
payment provided for in this Section by seeking other employment
or otherwise, nor shall the amount of any payment provided for in
this Section be reduced by any compensation earned by you as the
result of employment by another employer after your Date of
Termination, or otherwise. Except as provided herein, the Company
shall have no right to set off against any amount owing hereunder
any claim which it may have against you.
4. Certain Restrictions
(a) Competitive Activity. In consideration of the foregoing, you
agree that if your termination from employment is a Qualifying
Termination, then during a period ending 24 months following your
Date of Termination you shall not engage in any Competitive
Activity; provided, you shall not be subject to the foregoing
obligation if the Company breaches a material provision of this
Agreement. If you engage in any Competitive Activity during that
period, the Company shall be entitled to recover any benefits paid
to you under this Agreement. For purposes of this Agreement,
"Competitive Activity" shall mean your participation, without the
written consent of the General Counsel of the Company, in the
management of any business operation of any enterprise if such
operation (a "Competitive Operation") engages in substantial and
direct competition with any business operation actively conducted
by the Company or its divisions and Subsidiaries on your Date of
Termination. For purposes of this paragraph, a business operation
shall be considered a Competitive Operation if such business sells
a competitive product or service which constitutes (i) 15% of
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that business's total sales or (ii) 15% of the total sales of any
individual subsidiary or division of that business and, in either
event, the Company's sales of a similar product or service
constitutes (i) 15% of the total sales of the Company or (ii) 15%
of the total sales of any individual Subsidiary or division of the
Company. Competitive Activity shall not include (i) the mere
ownership of securities in any enterprise, or (ii) participation
in the management of any enterprise or any business operation
thereof, other than in connection with a Competitive Operation of
such enterprise.
(b) Non-Solicitation and Non-Interference. In consideration of the
foregoing, you agree that if your termination from employment is a
Qualifying Termination, then during a period ending 24 months
following your Date of Termination you shall not, without the
prior written consent of the General Counsel of the Company,
directly or indirectly, (1) solicit for employment (which shall
include services as an employee, independent contractor or in any
other like capacity) any person employed by the Company or its
affiliated companies as of the date of such solicitation, or (2)
solicit any customer or other person with a business relationship
with the Company or any of its affiliated companies to terminate,
curtail or otherwise limit such business relationship, or (3) in
any other manner interfere in the business relationship the
Company or any of its affiliated companies have with any customer
or any third party service provider or other vendor.
(c) Injunctive Relief. In the event of a breach or threatened
breach of this paragraph 4 of Section D, each party agrees that
the non-breaching party shall be entitled to injunctive relief in
a court of appropriate jurisdiction to remedy any such breach or
threatened breach, the parties acknowledging that damages would be
inadequate and insufficient.
SECTION E. ADDITIONAL PAYMENTS BY THE COMPANY
Notwithstanding anything to the contrary in this Agreement, and subject to
the terms and conditions of this Section E, in the event that any payment
or distribution by the Company to or for your benefit, whether paid or
payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise (a "Payment"), would be subject to the excise tax
imposed by Section 4999 of the Internal Revenue Code of 1986, as amended,
or any interest or penalties with respect to such excise tax (such excise
tax, together with any such interest or penalties, are hereinafter
collectively referred to as the "Excise Tax"), the Company shall pay to you
an additional payment (a "Gross-up Payment") in an amount such that after
payment by you of all taxes (including any interest or penalties imposed
with respect to such taxes), including any income, employment and Excise
Tax imposed on any Gross-up Payment, you retain an amount of the Gross-up
Payment equal to the Excise Tax imposed upon the Payments. Notwithstanding
the preceding sentence, in the event the Payment does not exceed the
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Safe Harbor Limit by the greater of (a) $50,000 or (b) ten percent (10%) of
the Safe Harbor Limit, then the Payment shall be reduced by the amount
necessary to make the payment equal to the Safe Harbor Limit. The Company
shall determine which payments under this Agreement shall be reduced by the
operation of the preceding sentence. The Safe Harbor Limit shall mean an
amount that is one dollar ($1) less than the amount that would result in
the imposition of the Excise Tax. You and the Company shall make an initial
determination as to whether a Gross-up Payment is required and the amount
of any such Gross-up Payment. You and the Company shall make an initial
determination as to whether a Gross-up Payment is required and the amount
of any such Gross-up Payment. If you and the Company can not agree on
whether a Gross-up Payment is required or the amount thereof, then an
independent nationally recognized accounting firm, appointed by you, shall
determine the amount of the Gross-up Payment. The Company shall pay all
expenses which you may incur in determining the Gross-up Payment. You shall
notify the Company in writing of any claim by the Internal Revenue Service
which, if successful, would require the Company to make a Gross-up Payment
(or a Gross-up Payment in excess of that, if any, initially determined by
the Company and you) within ten days of the receipt of such claim. The
Company shall notify you in writing at least ten days prior to the due date
of any response required with respect to such claim if it plans to contest
the claim. If the Company decides to contest such claim, you shall
cooperate fully with the Company in such action; provided, however, the
Company shall bear and pay directly or indirectly all costs and expenses
(including additional interest and penalties) incurred in connection with
such action and shall indemnify and hold you harmless, on an after-tax
basis, for any Excise Tax or income tax, including interest and penalties
with respect thereto, imposed as a result of the Company's action. If, as a
result of the Company's action with respect to a claim, you receive a
refund of any amount paid by the Company with respect to such claim, you
shall promptly pay such refund to the Company. If the Company fails to
timely notify you whether it will contest such claim or the Company
determines not to contest such claim, then the Company shall immediately
pay to you the portion of such claim, if any, which it has not previously
paid to you. Notwithstanding anything to the contrary in this Section E, to
the extent any Gross-up Payment would be considered deferred compensation
for purposes of Section 409A Provisions, the manner and time of payment,
and the provisions of this Section E, shall be adjusted to the extent
necessary (but only to the extent necessary) to comply with the
requirements of the Section 409A Provisions with respect to such payment so
that the payment does not give rise to the interest or additional tax
amounts provided by the Section 409A Provisions; and further provided, that
if, notwithstanding anything herein to the contrary, the Gross-up Payment
cannot be made to conform to the requirements of the Section 409A
Provisions, the amount of the Gross-up Payment shall be determined without
regard to any gross-up for any penalties that may apply under the Section
409A Provisions.
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SECTION F. MISCELLANEOUS
1. Assumption of Agreement. The Company will require any successor
(whether direct or indirect, by purchase, merger, consolidation, share
exchange or otherwise) to all or substantially all of the business and/or
assets of the Company, by agreement in form and substance satisfactory to
you, expressly to assume and 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. Failure of the Company to obtain
such agreement prior to the effectiveness of any such succession shall be a
breach of a material provision of this Agreement and shall entitle you to
compensation in the same amount and on the same terms as you would be
entitled pursuant to Section D, except that for purposes of implementing
the foregoing, the date on which any such succession becomes effective
shall be deemed your Date of Termination without a Notice of Termination
being given.
2. Confidentiality. All Confidential Information which you acquire or
have acquired in connection with or as a result of the performance of
services for the Company, whether under this Agreement or prior to the
effective date of this Agreement, shall be kept secret and confidential by
you unless (a) the Company otherwise consents, (b) the Company breaches any
material provision of this Agreement, or (c) you are legally required to
disclose such Confidential Information by a court of competent
jurisdiction. This covenant of confidentiality shall extend beyond the term
of this Agreement and shall survive the termination of this Agreement for
any reason. If you breach this covenant of confidentiality, the Company
shall be entitled to recover from any benefits paid to you under this
Agreement its damages resulting from such breach.
3. Employment. You agree to be bound by the terms and conditions of
this Agreement and to remain in the employ of the Company during any period
following any public announcement by any person of any proposed transaction
or transactions which, if effected, would result in a Change in Control of
the Company until a Change in Control of the Company has taken place.
However, nothing contained in this Agreement shall impair or interfere in
any way with the right of the Company to terminate your employment for
Cause prior to a Change in Control of the Company.
4. Arbitration. Any controversy or claim arising out of or relating to
this Agreement, or the breach thereof, shall be settled exclusively by
arbitration in accordance with the Center for Public Resources' Model ADR
Procedures and Practices, and judgment upon the award rendered by the
arbitrator(s) may be entered in any court having jurisdiction thereof.
Notwithstanding the foregoing, the Company shall not be restricted from
seeking equitable relief, including injunctive relief as set forth in
paragraph 5 of this Section, in the appropriate forum. Any cost of
arbitration will be paid by the Company. In the event of a dispute over the
existence of Good Reason or Cause after a Change in Control of the Company,
the Company shall continue to pay
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your salary, bonuses and plan benefits pending resolution of the dispute.
If you prevail in the arbitration, the amounts due to you under this
Agreement are to be immediately paid to you.
5. Injunctive Relief. You acknowledge and agree that the remedy of the
Company at law for any breach of the covenants and agreements contained in
paragraph 2 of this Section and in Section C, paragraph 2 will be
inadequate, and that the Company will be entitled to injunctive relief
against any such breach or any threatened, imminent, probable or possible
breach. You represent and agree that such injunctive relief shall not
prohibit you from earning a livelihood acceptable to you.
6. Notice. For the purposes of this Agreement, notices and all other
communications provided for in this Agreement shall be in writing and shall
be deemed to have been duly given when delivered or mailed by United States
registered mail, return receipt requested, postage prepaid, addressed to
the respective addresses set forth on the first page of this Agreement,
provided that all notices to the Company shall be directed to the attention
of the General Counsel of the Company, 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.
7. Indemnification. The Company will indemnify you to the fullest
extent permitted by the laws of the Commonwealth of Kentucky and the
existing By-laws of the Company, in respect of all your services rendered
to the Company and its divisions and Subsidiaries prior to your Date of
Termination. You shall be entitled to the protection of any insurance
policies the Company now or hereafter maintains generally for the benefit
of its directors, officers and employees (but only to the extent of the
coverage afforded by the existing provisions of such policies) to protect
against all costs, charges and expenses whatsoever incurred or sustained by
you in connection with any action, suit or proceeding to which you may be
made a party by reason of your being or having been a director, officer or
employee of the Company or any of its divisions or Subsidiaries during your
employment therewith.
8. Further Assurances. Each party hereto agrees to furnish and execute
such additional forms and documents, and to take such further action, as
shall be reasonably and customarily required in connection with the
performance of this Agreement or the payment of benefits hereunder.
9. Miscellaneous. No provision of this Agreement may be modified,
waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by you and such officer(s) as may be
specifically designated by the Board. No waiver by either party hereto at
any time of any breach by the other party hereto of, or compliance with,
any condition or provision 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. No agreements or
representations, oral or
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otherwise, express or implied, with respect to the subject matter hereof
have been made by either party which are not set forth expressly in this
Agreement.
10. Termination of other Agreements. Upon execution by both parties,
this Agreement shall terminate all prior employment and severance
agreements between you and the Company and its divisions or Subsidiaries.
11. Severability. 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 shall remain in full force and
effect.
12. Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed to be an original but all of
which together will constitute one and the same instrument.
13. Legal Fees And Expenses. Any other provision of this Agreement
notwithstanding, the Company shall pay all legal fees and expenses which
you may incur as a result of the Company's unsuccessful contesting of the
validity, enforceability or your interpretation of, or determinations
under, any part of this Agreement.
14. Section 409A Provisions And Compliance. Notwithstanding any other
provision of this Agreement to the contrary, the parties shall in good
faith amend this Agreement to the limited extent necessary to comply with
the requirements of the Section 409A Provisions in order to ensure that any
amounts paid or payable hereunder are not subject to the additional 20%
income tax thereunder while maintaining to the maximum extent practicable
the original intent of this Agreement.
15. Governing Law. This Agreement shall be governed in all respects by
the laws of the Commonwealth of Kentucky.
16. Agreement Binding on Successors. This Agreement shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. This Agreement shall inure to the benefit of and be
enforceable by your personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and legatees. If
you should die while any amounts would still be payable to you hereunder if
you had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to
your devisee, legatee, or other designee or, if there be no such designee,
to your estate.
17. Headings. All Headings are inserted for convenience only and shall
not affect any construction or interpretation of this Agreement.
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If this Agreement correctly sets forth our agreement on the subject
matter hereof, please sign and return to the Company the enclosed copy of
this Agreement which will then constitute our agreement on this matter.
Sincerely,
ASHLAND INC.
By: ____________________
ACCEPTED this _______ day of
____________________, 200___.
_____________________________
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