Exhibit 10.2
SEPARATION AND CONSULTING AGREEMENT
This Agreement is entered into as of August 1, 2003 by and among
Millennium Chemicals Inc., Millennium Inorganic Chemicals Inc., each a Delaware
corporation (collectively "the Company" or "Millennium"), and Xxxxx X. Xxxxx
[Xxxxx X. Xxxxxxxxxx],(the "Executive").
WHEREAS, the Executive has served as Senior Vice President - Technology
[Senior Vice President OE-Commercial] of the Company; and
WHEREAS, the Executive and the Company wish to terminate the
Executive's employment on terms that are mutually beneficial to the Company and
the Executive, and to secure certain ongoing consulting services from the
Executive after such termination of employment; and
WHEREAS, the Executive agrees to terminate his employment relationship
with the Company and to render consulting services to the Company.
NOW, THEREFORE, in consideration of the mutual promises and covenants
set forth herein, the Company and the Executive hereby enter into this agreement
(the "Agreement") as follows:
1. The Executive's employment with the Company shall terminate on July
31, 2003 (the "Termination Date"). Until the Termination Date, Executive shall
continue as an active employee of the Company and shall aid and assist the
Company in effectuating an orderly transition of Executive's duties and
responsibilities to such
individuals as may be designated by the Company. In addition, the Executive
hereby resigns effective on and as of the Termination Date as a director and/or
officer of the Company and any and all subsidiaries and affiliates of the
Company on which he may serve in such capacity and as a member of all committees
and as a trustee for all trusts on which he serves at the request of the Company
and its subsidiaries and affiliates. The Executive agrees to sign and execute
such additional documents as may be necessary or appropriate to document any
such resignation.
2. The Executive acknowledges that upon the effectiveness of this
Agreement, the Company and its subsidiaries and affiliates will have no
obligation to provide the Executive with severance, retirement, incentive or
Change in Control benefits other than those described in this Agreement;
provided, however, that, except to the extent that (i) Section 6(b) of this
Agreement limits the discretion of the Compensation Committee to reduce the
Executive's 2003 annual incentive award under the Omnibus Incentive Compensation
Plan; and (ii) Section 6(d) of this Agreement provides additional credited
service, for the purposes of computing the early retirement reduction factor,
under the Company's 2003 Supplemental Executive Retirement Plan (the "2003
SERP") [this subsection (ii) does not apply to Xx. Xxxxxxxxxx], nothing herein
shall modify, amend or otherwise affect the Executive's rights and benefits, if
any, under the Millennium Chemicals Inc. Consolidated Pension Plan (the
"Qualified Pension Plan"), the Company's Supplemental Executive Retirement Plan
(the "PEP SERP"), 2003 SERP, the Company's retiree medical benefit program, the
Savings and Investment Plan (the "SIP"), the Supplemental Savings and Investment
Plan (the "SSIP"), the Omnibus Incentive Compensation Plan, the 2001 Executive
Long Term
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Incentive Plan (the "2001 ELTIP"), the 2002 Executive Long Term Incentive Plan
(the "2002 ELTIP"), the 2003 Executive Long Term Incentive Plan (the "2003
ELTIP"), the Long Term Stock Incentive Plan, and the Salary and Bonus Deferral
Plan (all such plans, collectively, the "Plans") and the Change in Control
Agreement between the Executive and the Company dated September 30, 2002
(the "Change in Control Agreement").
3. The term of the Executive's consulting services to the Company under
this Agreement shall begin on August 1, 2003 and end on August 1, 2004 (the
"Term"). During the Term, the Executive shall serve as a non-employee consultant
to the Company and shall perform services, including without limitation
providing strategic advice and direction to the Company, visiting customers and
vendors, assisting in the transition of the executives who shall succeed the
Executive at the Company, and participating in special projects as requested by
the President or any Executive Vice President or Senior Vice President of the
Company from time to time. Such services and assistance shall be performed in
such manner as is reasonably requested by the President or any Executive Vice
President or Senior Vice President of the Company, subject to the Executive's
schedule. The Company shall pay Executive a fee of $1,000 per workday for each
day of consulting services requested by the President or any Executive Vice
President or Senior Vice President of the Company, plus travel reimbursement as
specified in Section 5.
4. The Executive further agrees to aid, assist and cooperate with the
Company following the Termination Date, as requested by the Company's General
Counsel, in connection with any investigation, dispute or litigation, dispute or
threatened
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investigation, dispute or litigation, including any investigation,
dispute or litigation in which the Executive may be called as a witness or
deponent. The Executive shall be paid a fee of $1,000 per day, plus travel
reimbursement as specified in Section 5.
5. The Company shall reimburse the Executive for all reasonable and
necessary travel expenses incurred in connection with his services and
assistance pursuant to Section 3 or 4 of this Agreement requested by the
Company. Such travel expenses shall be paid by the Company to the Executive no
later than one month after a claim for reimbursement or payment is made,
appropriately documented and signed by the Executive. Any such claim for
reimbursement must be made by the Executive within 90 days of incurrence of such
expense.
6. In connection with the termination of Executive's employment and the
consulting services to be provided under Section 3 hereof, and in consideration
of the other provisions of this Agreement, including, without limitation, those
set forth in Section 11 hereof, the Company hereby agrees to pay and make
available to Executive the amounts and benefits set forth in this Section 6, in
addition to the payment of Executive's base salary until the Termination Date
and all earned but unused vacation for the year 2003:
a) [$ ___________], equal to 100% of the Executive's current base
salary, to be paid to the Executive promptly after the later of the
Termination Date, or such time as the Agreement becomes binding
under Section 21 hereof, as Severance Pay; and [$________], equal to
50% of the Executive's current base salary, to be paid to the
Executive on January 15, 2004.
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b) On or about February 15, 2004, the Company shall pay the Executive
an annual bonus for the calendar year 2003 under the terms of the
Omnibus Incentive Compensation Plan, multiplied by a proration
factor of 58% to reflect the Executive's active months of service
during 2003 through the Termination Date. The amount of such bonus
shall be determined in the sole discretion of the Compensation
Committee; provided that:
(i) The ratio of (w) The Executive's Company Award (as defined
hereafter)(calculated prior to such pro-ration) to (x) the
Executive's Company Award Target (as defined hereafter) shall
not be less than the ratio of (y) the aggregate of all Company
Awards paid or payable to Xx. Xxxxxx, Xxx. Xxxxxxxxx and
Messrs. Xxxxxxx and Xxxxxx (the "Peer Group") to (z) the
aggregate of the Peer Groups' Company Award Targets, as such
Company Award Targets were approved by the Compensation
Committee on March 29, 2003; and
(ii) The Executive's Personal Objective Award (as defined
hereafter) shall be 58% of the Executive's Personal Objective
Award Target (as defined hereafter), unless the Compensation
Committee determines in its sole discretion, after
consultation with the Chief Executive Officer of the Company,
that it is appropriate given the Personal Objective Awards
granted to
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the Peer Group and the performance of the Executive
in 2003 to award a greater or lesser amount.
(iii) The term "Company Award" means the portion of the 2003
annual incentive award (if any) paid or payable to the
Executive or the members of the Peer Group, as the case may
be, that is based on the performance of the Company or its
majority-owned businesses (as compared to the individual
performance and objectives of the Executive or members of the
Peer Group); and the term "Company Award Target" means the
dollar amount of the Company Award that would be paid or
payable to the Executive or the members of the Peer Group, as
the case may be, if the Company Award portion of the 2003
annual incentive award were paid at 100% of the targeted
award, as established by the Compensation Committee at its
March 29, 2003 meeting. The term "Personal Objectives Award"
means the portion of the 2003 annual incentive award paid or
payable to the Executive or the members of the Peer Group, as
the case may be, that is based on individual performance
against personal objectives; and the term "Personal Objectives
Award Target" means the dollar amount of the Personal
Objectives Award that would be paid or payable to the
Executive or the members of the Peer Group, as the case may
be, if the Personal Objectives Award
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were paid at 100% of the targeted award, as such targeted
award was established by the Compensation Committee at its
March 29, 2003 meeting. For the purposes of this Section 6(b),
the term "paid or payable" shall include amounts deferred
under the SIP, SSIP or otherwise.
c) The Company will provide the Executive with outplacement assistance
for a period of one year (or longer subject to the dollar limitation
herein) following the Termination Date with a firm mutually
acceptable to the Company and the Executive subject to a maximum
value of $30,000.00; provided that the outplacement service is
initiated within 60 days of the Termination Date. Participation is
forfeited if initiated after October 1, 2003.
d) All amounts to which the Executive is entitled under the terms of
the Qualified Pension Plan, the PEP SERP and the 2003 SERP; it being
understood and agreed that the Executive shall be deemed to have
30 years of Credited Service (as such term is defined under the
Qualified Pension Plan) solely for the purpose of determining the
Early Retirement Reduction Factors for the Executive's benefits
under the 2003 SERP.
7. Executive specifically agrees that he will not at any time,
during or subsequent to the Termination Date, directly or indirectly use,
divulge, disclose or communicate to any person, firm or corporation in any
manner whatsoever, without the prior written consent of the Company or the
affiliates of the Company to which such
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information relates, any trade secret (as such term is defined in 6 Delaware
Code Annotated 'SS'2001(4)) or other confidential information of the Company or
any affiliate of the Company. A copy of such code section is attached hereto.
The Executive agrees not to disclose the terms or the existence of this
Agreement to any person, corporation or entity, except that the Executive may
communicate such terms to his counsel, tax and financial advisors, members of
his immediate family, prospective employers, tax authorities and lenders.
8. The Executive shall promptly return to the Company all property of
the Company and its subsidiaries in his possession and control, including
without limitation all lists, books and records (and all copies thereof); all
data and other information stored, recorded, maintained or operated by
electronic, mechanical or photographic process, whether computerized or not;
and, all copies of all management studies, business or strategic plans, budgets,
notebooks and all other printed, typed or written materials, documents and data
of or relating to the Company or any of its subsidiaries or affiliates. In
addition, the Executive shall purchase the automobile leased by the Company on
behalf of the Executive pursuant to the terms and conditions specific by the
leasing company.
9. Executive shall promptly disclose and assign in writing to the
Company any idea, discovery, invention or improvement relating to the business
of the Company and conceived or made by the Executive prior to the Termination
Date.
10. (a) This is an agreement for services to be rendered by the
Executive and cannot be assigned by him, and neither the Executive nor his
heirs,
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executor or administrator shall have any right to assign, encumber or dispose of
the right to receive any payments hereunder.
(b) This Agreement shall be binding upon, and inure to the benefit of
the Company and its successors and assigns.
11. Executive hereby accepts the consideration set forth in this
Agreement and agrees to waive all claims against the Company, their direct and
indirect subsidiaries and their respective former, current and future officers,
directors, employees, stockholders, agents, attorneys, and other representatives
and each of their predecessors and successors (collectively, "Affiliates") and
hereby releases and discharges the Company and its Affiliates from any and all
actions, causes of action, suits, debts, dues, sums of money, accounts,
covenants, contracts, controversies, agreements, promises, judgments, demands,
liability, claims and damages whatsoever, in law or equity, that Executive ever
had, now has, or hereafter can, shall or may have, for, upon or by reason of his
employment with, service as a director of, or in any other capacity relating to
the Company and its Affiliates, including, but not limited to, any claims
arising under any federal, state or local law or ordinance, tort, employment
contract (express or implied), public policy, or any other obligation,
including, without limitation, any claims arising under Title VII of the Civil
Rights Act of 1964, as amended, the Age Discrimination in Employment Act, as
amended, the Older Workers Benefit Protection Act, the Americans with
Disabilities Act, the Family Medical Leave Act, any rights under ERISA, Article
49B of the Annotated Code of Maryland, and all claims for wrongful discharge,
workers' compensation, wages, monetary or equitable relief, vacation,
compensation in lieu of vacation, disability, other employee fringe benefits,
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benefit plans, medical plans, or attorneys' fees; provided, however, that
notwithstanding the foregoing, Executive reserves (i) any rights accrued through
the Termination Date that he may have pursuant to the Qualified Pension Plan,
PEP SERP, 2003 SERP, retiree medical benefit program, SIP, SSIP, Salary and
Bonus Deferral Plan, Omnibus Incentive Compensation Plan, 2001 ELTIP, 2002
ELTIP, 2003 ELTIP, Long Term Stock Incentive Plan and Change in Control
Agreement, (ii) his ability to seek and obtain indemnification by the Company to
the extent he is entitled to be indemnified by the Company pursuant to this
Agreement and the Restated Certificate of Incorporation of the Company, and
(iii) all claims relating to the performance of the obligations of the Company
under this Agreement, including, without limitation, those set forth in Sections
4, 5 and 6 hereof.
12. (a) The Company agrees to indemnify and hold Executive harmless
from and against any costs, expenses (including, without limitation, reasonable
legal fees and expenses), judgments, fines, penalties and amounts paid in
settlement which he may incur or to which he may become subject on or after the
date hereof by reason of his prior service as an employee of the Company and its
Affiliates to the fullest extent permitted under, and in accordance with, the
provisions of the Restated Certificate of Incorporation of the Company and
Delaware law.
(b) Executive agrees to indemnify and hold the Company and its
Affiliates harmless from and against any costs, expenses (including, without
limitation, reasonable legal fees and expenses), judgments and amounts paid in
settlement (but excluding any fines or penalties) that they may incur or to
which they may become subject on or after the date hereof by reason of any
failure on the part of the Company
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and its Affiliates to withhold properly any amounts in accordance with the
provisions of Section 18 hereof from the payments made to Executive pursuant to
this Agreement or otherwise.
13. Each of Executive and the Company hereby expressly covenant and
agree that the other party will suffer irreparable damage in the event any of
the provisions of Sections 7, 8, 9, 10 or 12 hereof are not performed or are
otherwise breached and that the other party shall be entitled as a matter of
right (without the need to prove actual damages) to an injunction or injunctions
and other relief to prevent a breach or violation by the other party and to
secure its enforcement of such provisions. Resort to such equitable relief,
however, shall not constitute a waiver of any other rights or remedies which the
party seeking such relief may have. The Company and the Executive hereby agree
that, as it is critically important to protect the confidentiality of
information relating to the individual bonuses awarded to executives of the
Company, the Company hereby agrees to deliver a certificate to the Executive
executed by the Company's Chief Executive Officer and its Chief Financial
Officer certifying that any bonus paid to the Executive under Section 6(b)
hereof or under any of the Plans has been correctly calculated as required by
such Section or such plans, and the Executive hereby agrees that absent manifest
error he will rely on such certificate and does not have the right to demand any
further disclosure of confidential financial information, including such other
executives' bonuses.
14. (a) Executive represents and warrants to the Company as follows:
(i) he has full legal right, power and authority to enter into and perform all
of his obligations under this Agreement; (ii) the execution and delivery of this
Agreement by
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him will not violate any other agreement to which he is a party; (iii) no
consent of any third party is required for the execution and performance of this
Agreement by him; and (iv) this Agreement has been duly executed and delivered
by him and constitutes a legal, valid and binding agreement of him, enforceable
in accordance with its terms, subject to bankruptcy, insolvency, fraudulent
conveyance, reorganization, moratorium and similar laws, now or hereafter in
effect, affecting creditors' rights and remedies generally and to general
principles of equity.
(b) The Company represents and warrants to Executive as follows: (i) it
has all requisite corporate power and authority to enter into this Agreement and
to consummate the transactions contemplated hereby; (ii) the execution, delivery
and performance of this Agreement has been duly authorized and approved by all
required corporate action on the part of the Company; (iii) this Agreement has
been duly executed and delivered by the Company and is a legal, valid and
binding obligation of the Company, enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency, fraudulent conveyance, reorganization,
moratorium and similar laws, now or hereafter in effect, affecting creditors'
rights and remedies generally and to general principles of equity; (iv) the
execution and delivery of this Agreement by the Company will not constitute a
breach under (with or without notice or the passage of time or both) or violate
the Company's Restated Certificate of Incorporation or by-laws, any agreement to
which the Company is a party or any law, regulation, rule or ordinance to which
the Company is subject and (v) no consent of any third party is required for the
execution and performance of this Agreement by the Company.
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15. All notices, requests and other communications to any party
hereunder, other than a revocation notice provided under Section 21 below, shall
be given or made in writing and mailed (by registered or certified mail or by
overnight courier) or delivered by hand as follows:
(a) if to the Company, to it at:
Millennium Chemicals Inc.
00 Xxxxx Xxxxxx
Xxxx Xxxxxx, Xxxxxxxx 00000
Attention: Senior Vice President, General Counsel and Secretary
(b) if to Executive, to him at:
or such address as such party may hereafter specify for the purpose of notice to
the other party hereto. Each such notice, request or other communication shall
be effective when, if delivered by hand, received by the party to which it is
addressed or, if mailed in the manner described above, on the third business day
after the date of mailing.
16. The rights and obligations of the Company under this
Agreement shall inure to the benefit and be binding upon its successors and
assigns and any entity to which its assets and business may be transferred by
operation of law or otherwise. This Agreement is personal to Executive, and
Executive shall not, without the written consent of the Company, assign his
rights or obligations hereunder other than by will or the laws of descent and
distribution, but the provisions hereof shall inure to the benefit of and be
enforceable by Executive's heirs and legal representatives. The parties agree
that the obligations of the Company pursuant to Section 6 hereof shall survive
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Executive's death and shall be performed in accordance with the terms thereof
(with payments to be made at the direction of the executor or executrix of
Executive's estate or other appropriate representative).
17. This Agreement shall be construed in accordance with and governed
by the substantive laws of the State of Delaware, without regard to the choice
of law rules thereof.
18. The Company shall have the right to withhold from all payments to
be made to Executive hereunder (other than payments made under Section 5 hereof)
and account for amounts which it reasonably determines may be subject to
applicable Federal, state and local income withholding taxes, Social Security
and other employment-related taxes.
19. Executive and the Company hereby expressly agree to reimburse and
indemnify the other party for any costs and expenses (including, without
limitation, reasonable legal fees and expenses) incurred by the other party to
the extent such other party successfully obtains relief from a court of
competent jurisdiction to enforce the terms and provisions of this Agreement.
20. This Agreement supersedes any prior contracts, understandings,
discussions and agreements between Executive and the Company and constitutes the
complete understanding between the parties with respect to the subject matter
hereof. No statement, representation, warranty or covenant has been made by
either party with respect hereto except as expressly set forth therein.
21. Executive acknowledges that he has been advised by the Company
that he is entitled to a period of at least forty-five (45) days within which
to consider this
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Agreement before signing it, if he wishes. Executive expressly acknowledges that
he has taken sufficient time to consider this Agreement before signing it. This
Agreement will not become effective or binding on the parties until seven (7)
days after it is signed by the Executive, during which time Executive may revoke
this Agreement if he wishes to do so. Any revocation must be in writing and
delivered to the Company at the address set forth in Section 15 hereof so as to
be received within seven (7) days after it is signed by the Executive.
22. Executive acknowledges and agrees that he is fully aware of his
right to discuss any and all aspects of this matter with an attorney of his
choice, that the Company has advised him to exercise this right, that he has
carefully read and fully understands all of the provisions of this Agreement,
that he is voluntarily entering into this Agreement, and that this Agreement
provides significant consideration in excess of the consideration to which he
would otherwise be entitled.
23. Executive acknowledges and agrees that the document entitled Older
Workers Benefit Protection Act Informational Requirements for Severance
Benefits, attached hereto as Exhibit A, sets forth in an understandable manner,
the job title and ages of all individuals selected for the reduction in force
program, and the ages of those individuals by job title who were not selected
for the reduction in force program.
24. (a) This Agreement may be amended or waived if, and only if, such
amendment or waiver is in writing and signed, in the case of an amendment, by
Executive and the Company or in the case of a waiver, by the party against whom
the waiver is to be effective.
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(b) No failure or delay by any party in exercising any right, power or
privilege hereunder shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and shall not be exclusive of any rights or
remedies provided by law or at equity.
25. This Agreement may be signed in any number of counterparts, each of
which shall be an original, with the same effect as if the signatures thereto
and hereto were upon the same instrument. This Agreement shall become effective
when each party hereto shall have received counterparts hereof signed by the
other party hereto.
IN WITNESS WHEREOF, the Company has caused this Agreement to be duly
executed in its corporate name by one of its officers duly authorized to enter
into and execute this Agreement, and Executive has manually signed his name
hereto, as of the date first written above.
Date:
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Xxxxx X. Xxxxx [Xxxxx X. Xxxxxxxxxx]
Millennium Chemicals Inc.; and
Millennium Inorganic Chemicals Inc.
Date: By:
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