EXHIBIT 99.1
FORM OF CHANGE IN CONTROL AGREEMENT
CHANGE IN CONTROL AGREEMENT
This Change in Control Agreement (this "Agreement"), dated as of June
8, 2005, is made by and between OM Group, Inc., a Delaware corporation (the
"Company"), and _____________ (the "Executive").
WHEREAS, the Company considers it essential to the best interest of the
Company and its stockholders that its management be encouraged to remain with
the Company and to continue to devote its full attention to the Company's
business;
WHEREAS, the Company recognizes that the possibility of a change in
control may occur and that the uncertainty arising as a result of a potential
change in control may result in the departure or distraction of management
personnel to the detriment of the Company and its stockholders; and
WHEREAS, the Company's Board of Directors (the "Board") has determined
that appropriate steps should be taken to reinforce and encourage the continued
attention and dedication of key members of the Company's management, including
the Executive, to their assigned duties without distraction in the face of a
potential Change in Control; and
WHEREAS, the Executive has advised the Company that, in consideration
of, among other things, the Company's entering into this Agreement with the
Executive, it is Executive's present intention to remain in the employ of the
Company unless and until a Change in Control occurs.
NOW, THEREFORE, in consideration of the premises and the mutual
covenants herein contained, the Company and the Executive hereby agree as
follows:
1. DEFINITIONS.
(a) "Additional Compensation" has the meaning set forth in
Section 5(d).
(b) "Affiliate" means a person or entity that directly, or
indirectly through one or more intermediaries, controls, or is controlled by, or
is under common control with, the person or entity specified.
(c) "Agreement" has the meaning set forth in the Preamble.
(d) "Base Compensation" has the meaning set forth in Section
5(d).
(e) "Board" has the meaning set forth in the recitals.
(f) "Cause" means (i) the willful and continued failure by the
Executive to perform his/her duties with the Company or one of its Affiliates
(other than for Death, Disability or Good Reason), after a written demand for
substantial performance is delivered to the Executive by the Board that
specifically identifies the manner in which the Board believes the Executive has
failed to perform his/her duties, or (ii) illegal conduct or gross misconduct by
the Executive involving moral turpitude that is materially and demonstrably
injurious to the Company. For purposes of clause (ii) of the preceding sentence,
no act or failure to act shall constitute "cause" unless it is done, or omitted
to be done, in bad faith or without Executive's reasonable belief that such
action or omission was in the best interests of the Company. Any act, or failure
to act, based upon authority given Executive pursuant to a resolution duly
adopted by the Board or based upon the advice of counsel for the Company shall
be conclusively presumed to be undertaken in good faith and in the best
interests of the Company;
(g) "Change in Control" means the occurrence of any of the
following: (i) the Company is merged, consolidated or reorganized into or with
another entity and, immediately after such merger, consolidation or
reorganization, the holders of Company voting stock immediately prior to the
transaction hold, in the aggregate, less than a majority of the combined voting
power of the then outstanding securities of the new entity, (ii) the Company
sells substantially all of its assets to another entity and, immediately after
such sale, the holders of Company voting stock immediately prior to the sale
hold, in the aggregate, less than a majority of the combined voting power of the
then outstanding securities of the purchaser, (iii) a report is filed, or is
required to be filed, on Schedule 13D or Schedule TO (or any successor form)
disclosing that any "person" has become a "beneficial owner" (as those terms are
defined by the Securities Exchange Act of 1934) of Company securities
representing 33% or more of the combined voting power of then outstanding
securities of the Company (iv) the Company files, or is required to file, a
report or proxy statement with the Securities and Exchange Commission disclosing
in response to Form 8-K or Schedule 14A (or any successor form) that a change in
control has or may have occurred, or will or may occur in the future, pursuant
to a then-existing contract or transaction; or (v) individuals who, as of the
date hereof, constitute the Board (the "Incumbent Board") cease for any reason
to constitute at least a majority of the Board, provided, however, that any
individual becoming a director subsequent to the date hereof whose election, or
nomination for election by the Company's stockholders, was approved by a vote of
at least two-thirds (2/3) of the directors comprising the Incumbent Board or the
nominating committee of the Incumbent Board shall be considered a member of the
Incumbent Board.
Notwithstanding events set forth in subsections (iii) and (iv) above, unless
otherwise determined by a majority vote of the Board, a "Change in Control"
shall not be deemed to have occurred solely because (i) the Company, (ii) an
entity of which the Company directly or indirectly beneficially owns 50% or more
of the entity's voting stock, or (iii) any employee stock ownership plan or any
other employee benefit plan sponsored by the Company, either files or becomes
obligated to file a report or proxy statement in response to Schedules 13D, TO
or 14A, or Form 8-K (or any successor form), disclosing beneficial ownership by
it of voting stock, whether in excess of 33% or otherwise, or because the
Company reports that a Change of Control has or may have occurred, or will or
may occur in the future, by reason of such beneficial ownership.
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(h) "Code" means the Internal Revenue Code of 1986, as amended
from time to time.
(i) "Company" means OM Group, Inc., a Delaware corporation,
and any successor to its business and/or assets which executes and delivers the
agreement provided for in Section 12 of this Agreement or which otherwise
becomes bound by all the terms and provisions of this Agreement by operation of
law.
(j) "Company Shares" has the meaning set forth in Section
5(e).
(k) "Disability" has the meaning set forth in Section 4(c).
(l) "Effective Date" has the meaning set forth in Section
3(b).
(m) "Excise Tax" has the meaning set forth in Section 10(a).
(n) "Executive" has the meaning set forth in the Preamble.
(o) "Firm" has the meaning set forth in Section 10(b).
(p) "Good Reason" means: (i) the assignment of any duties
inconsistent with the Executive's position (including status, offices, titles
and reporting requirements), authority, duties or responsibilities, or any other
action by the Company which results in a diminution in such position, authority,
duties or responsibilities, excluding for this purpose an isolated,
insubstantial and inadvertent action not taken in bad faith and which is
remedied by the Company promptly after receipt of notice thereof given by the
Executive; (ii) any failure by the Company to continue to provide Executive with
an annual base salary, employee benefits and an opportunity to earn incentive
and bonus compensation equal or greater to that which was provided to the
Executive by the Company immediately prior to the Effective Date, other than an
isolated, insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by the Company promptly after the receipt of notice thereof
given by the Executive; (iii) the Company's requiring the Executive to be based
at or generally work from a primary business location more than 50 miles from
the location that the Executive was based at or generally worked from prior to
the Effective Date or the Company's requiring the Executive to travel on Company
business to a substantially greater extent than required immediately prior to
the Effective Date; or (iv) any failure by the Company to comply with and
satisfy Section 12 of this Agreement.
(q) "Gross-Up Payment" has the meaning set forth in Section
10(a).
(r) "Notice of Termination" has the meaning set forth in
Section 4.
(s) "OMG Related Persons" has the meaning set forth in Section
9(c).
(t) "Options" has the meaning set forth in Section 5(e).
(u) "Payment" has the meaning set forth in Section 10(a).
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(v) "Retirement" has the meaning set forth in Section 4(b).
(w) "Term" means the period of time described in Section 2
hereof (including any extension, continuation or termination described therein).
(x) "Termination Date" has the meaning set forth in Section 4.
(y) "Underpayment" has the meaning set forth in Section 10(b).
(z) "Without Cause" means termination of the Executive's
employment for reasons other than for Death, Retirement, Disability or Cause.
2. TERM. The Term of this Agreement shall commence on the date first
written above and shall continue in effect through December 31, 2006; provided,
however, that commencing on January 1, 2006 and each January 1 thereafter, the
Term shall be automatically extended for one (1) additional year unless, not
later than September 30 of the preceding year, the Company or the Executive
shall have given written notice to the other party electing not to extend the
Term; and provided further, that if a Change in Control shall have occurred
during the Term, the Term shall expire no earlier than the last day of the
twelfth (12th) month following the month in which such Change in Control
occurred. Notwithstanding any other provision hereof, the Term shall expire upon
(a) any termination of the Executive's employment prior to a Change in Control,
so long as such termination is not done in anticipation of or in connection with
a Change in Control, and (b) the Executive's death or resignation prior to a
Change of Control.
3. CHANGE IN CONTROL.
(a) No benefits shall be payable hereunder unless a Change in
Control occurs, and, during the Term, the Executive's employment with the
Company is terminated either by the Executive for Good Reason or by the Company
Without Cause. This Agreement is not intended to apply to termination of the
Executive's employment by reason of death, Disability or Retirement.
(b) The first date upon which a Change in Control as defined
above takes place shall be known as the "Effective Date." Notwithstanding
anything in this Agreement to the contrary, if a Change in Control occurs and if
the Executive's employment with the Company is terminated by the Company prior
to the date on which the Change in Control occurs, and if it is reasonably
demonstrated by the Executive that such termination (i) was at the request of a
third party who had taken steps reasonably calculated to effect a Change in
Control or (ii) was by the Company and arose with or in anticipation of a Change
in Control, then for all purposes of this Agreement, the Executive's employment
shall be deemed to have been terminated by the Company Without Cause under
Section 4(f) of this Agreement and the "Effective Date" shall mean the date
immediately prior to the Termination Date (as defined in Section 4 hereof).
4. TERMINATION OF EMPLOYMENT. The Executive's employment with the
Company shall or may be terminated, as the case may be, for any of the following
reasons:
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(a) termination of the Executive's employment due to the
Executive's death;
(b) termination of the Executive's employment by the Executive
at or after the attainment of age sixty-five (65) or pursuant to a duly adopted
retirement policy of the Company ("Retirement");
(c) termination of the Executive's employment either by the
Executive or by the Company after the Executive is physically or mentally
incapacitated for a period of one hundred eighty (180) consecutive days such
that the Executive cannot substantially perform the Executive's duties of
employment with the Company on a full-time basis ("Disability");
(d) the Company may terminate the Executive's employment at
any time for Cause;
(e) the Executive may terminate his employment for Good
Reason; and
(f) the Company may terminate Executive's employment at any
time Without Cause.
Except in the case of Retirement or death or as otherwise provided in Section
3(b) hereof, termination of the Executive's employment shall be effective only
as of the earliest date (hereinafter referred to as the "Termination Date")
specified by either the Executive or the Company in a written notice of
termination ("Notice of Termination") delivered to the other party hereto.
Notwithstanding any provision herein to the contrary, if at any time prior to a
Change in Control, the Executive receives notice from the Company that the
Executive shall be placed in an income continuation status (i.e., where the
Company agrees to (i) continue to pay the Executive's then existing salary or a
modified level of salary continuation and/or all or some of the Executive's then
existing employee benefits and (ii) relieve the Executive of the Executive's
obligation to render services to the Company), the Executive's employment, for
the purpose of this Agreement only, shall be deemed terminated as of the date of
such notice and no benefits shall be payable to the Executive hereunder.
5. SEVERANCE PAY. If a Change in Control occurs, and, during the Term,
Executive's employment with the Company is terminated either by the Executive
for Good Reason or by the Company Without Cause, then in addition to all other
benefits that the Executive has earned prior to such termination or to which
Executive is otherwise entitled, the Company shall pay to the Executive as
severance pay, in a lump sum, the following amounts:
(a) the Executive's full base salary earned through the
Termination Date at the rate in effect prior to the date Notice of Termination
is given, to the extent not theretofore paid;
(b) the Executive's bonus for the previously completed fiscal
year of the Company, to the extent not theretofore paid;
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(c) the Executive's target bonus (i.e. based on achievement of
performance goals at the 100% level) for the fiscal year in which the Notice of
Termination was given, pro rated to reflect the number of days the Executive was
employed with the Company during such fiscal year;
(d) an amount equal to the product of (i) the sum of (x) the
higher of the Executive's annual base salary in effect immediately prior to the
Effective Date, or Executive's annual base salary at the highest rate in effect
at any time since any Change in Control and (y) the amount of any Additional
Compensation (hereinafter defined) (the sum of such annual base salary and
Additional Compensation shall be referred to as Executive's "Base Compensation")
and (ii) the lesser of the number two (2) or a fraction the numerator of which
is the number of months from and including the month in which a Termination Date
would occur by reason of Retirement and the denominator of which is twelve (12).
The term "Additional Compensation" means the quotient of (i) the sum of (x) the
Executive's annual (measured by a fiscal year) total incentive compensation,
commissions, bonuses, amounts deferred under any non-qualified deferred
compensation program of the Company declared and/or received for each of the
last three full fiscal years immediately preceding the Effective Date, and (y)
any elective contributions that are made by or on behalf of the Executive under
any plan maintained by the Company that are not includible in gross income under
Section 125 or 402(e)(3) of the Internal Revenue Code of 1986, as amended from
time to time, but excluding moving or educational reimbursement expenses,
amounts realized from the exercise of any stock options, sale of restricted
stock, and imputed income attributable to any fringe benefit, divided by (ii)
three; provided, however, that in the event the Executive was employed by the
Company for a period of time less than three full fiscal years immediately
preceding the Effective Date, the foregoing provisions shall be adjusted to
cause Executive's Additional Compensation to be determined based upon the
average of such payments and benefits for the number of full fiscal years
immediately preceding the Effective Date in which the Executive was employed by
the Company; provided further that in the event the Executive was employed by
the Company for a period of time less than one full fiscal year, the foregoing
provisions shall be adjusted to cause Executive's Additional Compensation to be
determined based upon the projected target annual payments and benefits that
would be provided to the Executive immediately preceding the Effective Date.
(e) in lieu of shares of common stock of the Company, par
value $0.01 per share ("Company Shares") issuable upon exercise of options
("Options"), if any, granted to the Executive under any Company stock option
plan (which Options shall be deemed canceled upon the making of the payment
herein referred to), the Executive shall receive an amount in cash equal to the
aggregate spread between the exercise prices of all such Options that are
outstanding and held by the Executive (whether or not then fully vested or
exercisable and taking into account only options as to which the exercise price
is less than the higher of (i) or (ii) as set forth below) and the higher of (i)
the mean of the high and low trading prices of Company Shares on the New York
Stock Exchange** on the Termination Date or (ii) the highest price per Company
Share actually paid in connection with any Change in Control;
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** If the Company were to become listed on the NASDAQ Market or a different
primary stock exchange prior to a change in control, this agreement would
need to be amended to reflect revised listing.
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(f) all unvested shares of restricted stock of the Company, if
any, granted to the Executive under any Company equity compensation plan, shall
immediately vest and shall be redeemed by the Company for an amount in cash
equal to the higher of (i) the mean of the high and low trading prices of
Company Shares on the New York Stock Exchange on the Termination Date or (ii)
the highest price per Company Share actually paid in connection with any Change
in Control;
(g) an amount of cash equal to any unvested portion of the
Executive's interest in any of the Company's nonqualified retirement plans or
tax-qualified pension plans as of the Termination Date.
The payments described in this Section 5 shall be payable on or before the fifth
(5th) day following the Termination Date, provided that Executive delivers a
written instrument in form and substance reasonably satisfactory to the Company
releasing the Company and its Affiliates from any and all claims or causes of
action of any kind arising from or relating to the Executive's employment with
the Company. The payments described in Sections 5(c)-(g) shall be in lieu of all
other severance agreements or arrangements otherwise due to the Executive under
any other agreement, plan, arrangement or understanding between the Company and
the Executive.
6. WELFARE BENEFIT PLANS. If a Change in Control occurs, and, during
the Term, Executive's employment with the Company is terminated either by the
Executive for Good Reason or by the Company Without Cause, then the Company
shall maintain in full force and effect, for the continued benefit of the
Executive and the Executive's dependents for two (2) years after the Termination
Date, all life insurance, health and accident, disability and other employee
benefit plans, programs and arrangements (excluding, however, any tax-qualified
and nonqualified retirement plan or program of the Company), in which Executive
was entitled to participate immediately prior to the Termination Date, provided
that the Executive's continued participation is possible under the general terms
and provisions of such welfare plans, programs and arrangements, and provided,
however, that in the event that the Executive's life insurance benefit is
provided through a split dollar program, the Company shall cause the policyowner
of any life insurance policy of the Executive's life under such program to
transfer the ownership of any such policy (with any cash value related thereto)
to the Executive. In the event that the Executive's participation in any such
welfare plan, program or arrangement is barred, or any such plan, program or
arrangement is discontinued or the benefits thereunder materially reduced, the
Company shall arrange to provide Executive with benefits substantially similar
to those which Executive was entitled to receive under such plans, programs and
arrangements immediately prior to the Termination Date. At the end of the period
of coverage herein provided for, the Executive shall have the option to have
assigned to the Executive at no cost and with no apportionment of prepaid
premiums, any assignable insurance owned by the Company and relating
specifically to the Executive.
7. OUTPLACEMENT SERVICES. If a Change in Control occurs, and, during
the Term, the Executive's employment with the Company is terminated either by
the Executive for Good Reason or by the Company Without Cause, the Company shall
provide the Executive reasonable outplacement services for a period of up to one
year of a nature customarily provided at the Executive's executive officer
level.
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8. NO MITIGATION REQUIRED. The Executive shall not be required to
mitigate the amount of any payment or benefit provided for in Section 5 or 6 by
seeking other employment or otherwise. Notwithstanding the foregoing, benefits
otherwise receivable under Section 6 of this Agreement shall be reduced to the
extent that and for any period during which the Executive is eligible to receive
substantially similar benefits from another employer.
9. RESTRICTIVE COVENANTS OF THE EXECUTIVE.
(a) Noncompetition. If a Change in Control occurs, and, during
the Term, Executive's employment with the Company is terminated either by the
Executive for Good Reason or by the Company Without Cause, and the Executive is
receiving payments from the Company pursuant to this Agreement, then for a
period of one (1) year from the Termination Date, the Executive agrees not to,
without the written consent of the Company, either directly or indirectly,
engage in, make any investment in, advise or consult with, assist or render any
services to any person or entity in competition with the business of the Company
or its subsidiaries. Notwithstanding the foregoing, the Executive may own less
than one (1) percent of the combined voting power of all issued and outstanding
voting securities of any publicly-held corporation whose stock is traded on a
major stock exchange or quoted on NASDAQ.
(b) Confidential Information. Executive hereby agrees that the
Executive shall not at any time (whether employed by the Company or not), either
directly or indirectly, disclose or make known to any person or entity any
confidential information, trade secret, or proprietary information that the
Executive acquired during the course of the Executive's employment with the
Company that has not become public knowledge (other than by the Executive's
actions in violation of this Agreement). Executive further agrees that upon the
termination of the Executive's employment with the Company, or at any time upon
the request of the Company, Executive shall deliver to the Company any and all
literature, documents, correspondence, and other materials and records furnished
to the Executive by the Company during the course of the Executive's employment
with the Company. In no event shall an asserted violation of the provisions of
this Section 9(b) constitute a basis for deferring or withholding any amounts
otherwise payable to the Executive under this Agreement.
(c) Non-Disparagement. The Executive agrees that during his
employment and at all times thereafter, he will not, unless compelled by a court
or governmental agency, make, or cause to be made, any statement, observation or
opinion, or communicate any information (whether oral or written) regarding the
Company, or its Affiliates, together with their respective directors, partners,
officers or employees (such entities, collectively, the "OMG Related Persons"),
which disparages the reputation or business of the Company or the OMG Related
Persons; provided, however, that such restriction shall not apply to statements,
observations, opinions or communications made in good faith in the fulfillment
of the Executive's duties with the Company; and provided further, that such
restriction shall cease to apply and shall be of no further force and effect
from and after the occurrence of a Change of Control.
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10. ADDITIONAL PAYMENTS.
(a) Notwithstanding anything in this Agreement to the
contrary, in the event it is determined (as hereafter provided) that any payment
or distribution to or for Executive's benefit, whether paid or payable or
distributed or distributable pursuant to the terms of this Agreement or
otherwise pursuant to or by reason of any other agreement, policy, plan, program
or arrangement or similar right (a "Payment"), would be subject to the excise
tax imposed by Section 4999 of the Code (or any successor provision thereto), or
any interest or penalties with respect to such excise tax (such excise tax,
together with any such interest and penalties, are hereafter collectively
referred to as the "Excise Tax"), then Executive shall be entitled to receive an
additional payment or payments (a "Gross-Up Payment") in an amount such that,
after payment by the Executive of all taxes (including federal, state, and local
taxes and any interest or penalties imposed with respect to such taxes and
including any Excise Tax) imposed upon the Gross-Up Payment, the Executive
retains (or has withheld and credited on the Executive's behalf for tax
purposes) an amount of the Gross-Up Payment equal to the Excise Tax imposed upon
the Payments.
(b) Subject to the provisions of Section 10(e) hereof, all
determinations required to be made under this Section 10, (including whether an
Excise Tax is payable by the Executive, the amount of such Excise Tax, whether a
Gross-Up Payment is required, and the amount of such Gross-Up Payment) shall be
made by a nationally-recognized legal or accounting firm (the "Firm") selected
by the Executive in the Executive's sole discretion. The Executive agrees to
direct the Firm to submit its determination and detailed supporting calculations
to both Executive and the Company within fifteen (15) calendar days after the
Termination Date, if applicable, or such earlier time or times as may be
requested by the Executive or the Company. If the Firm determines that any
Excise Tax is payable by the Executive and that a Gross-Up Payment is required,
the Company shall pay the Executive the required Gross-Up Payment within five
(5) business days after receipt of such determination and calculations. If the
Firm determines that no Excise Tax is payable by the Executive, it shall, at the
same time as it makes such determination, furnish the Executive with an opinion
that the Executive has substantial authority not to report any Excise Tax on the
Executive's federal income tax return. Any determination by the Firm as to the
amount of the Gross-Up Payment shall be binding upon the Executive and the
Company. As a result of the uncertainty in the application of Section 4999 of
the Code (or any successor provision thereto) at the time of the initial
determination by the Firm hereunder, it is possible that Gross-Up Payments which
will not have been made by the Company should have been made (an
"Underpayment"). In the event that the Company exhausts its remedies pursuant to
Section 10(e) hereof and the Executive thereafter are required to make a payment
of any Excise Tax, the Executive may direct the Firm to determine the amount of
the Underpayment (if any) that has occurred and to submit its determination and
detailed supporting calculations to both the Executive and the Company as
promptly as possible. Any such Underpayment shall be promptly paid by the
Company to the Executive, or for the Executive's benefit, within five (5)
business days after receipt of such determination and calculations.
(c) The Executive and the Company shall each provide the Firm
access to and copies of any books, records and documents in the possession of
the Company or Executive, as the case may be, reasonably requested by the Firm,
and otherwise cooperate with the Firm in connection with the preparation and
issuance of the determination contemplated by Section 10(b) hereof.
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(d) The fees and expenses of the Firm for its services in
connection with the determinations and calculations contemplated by Section
10(b) hereof shall be borne by the Company. If such fees and expenses are
initially paid by the Executive, the Company shall reimburse the Executive the
full amount of such fees and expenses within five business days after receipt
from the Executive of a statement therefor and reasonable evidence of the
Executive's payment thereof.
(e) The Executive agrees to notify the Company in writing of
any claim by the Internal Revenue Service that, if successful, would require the
payment by the Company of a Gross-Up Payment. Such notification shall be given
as promptly as practicable but no later than ten (10) business days after the
Executive actually receives notice of such claim. The Executive agrees to
further apprise the Company of the nature of such claim and the date on which
such claim is requested to be paid (in each case, to the extent known by the
Executive). The Executive agrees not to pay such claim prior to the earlier of
(i) the expiration of the 30-calendar-day period following the date on which the
Executive gives such notice to the Company and (ii) the date that any payment or
amount with respect to such claim is due. If the Company notifies the Executive
in writing at least five (5) business days prior to the expiration of such
period that it desires to contest such claim, the Executive agrees to:
(i) provide the Company with any written records or
documents in the Executive's possession relating to
such claim reasonably requested by the Company,
(ii) take such action in connection with contesting such
claim as the Company shall reasonably request in
writing from time to time, including without
limitation accepting legal representation with
respect to such claim by an attorney competent in
respect of the subject matter and reasonably selected
by the Company,
(iii) cooperate with the Company in good faith in order
effectively to contest such claim, and
(iv) permit the Company to participate in any proceedings
relating to such claim, provided, however, that the
Company shall bear and pay directly all costs and
expenses (including interest and penalties) incurred
in connection with such contest and shall indemnify
and hold the Executive harmless, on an after-tax
basis, for and against any Excise Tax or income tax,
including interest and penalties with respect
thereto, imposed as a result of such representation
and payment of costs and expenses. Without limiting
the foregoing provisions of this Section 10(e), the
Company shall control all proceedings taken in
connection with the contest of any claim contemplated
by this Section 10(e) and, at its sole option, may
pursue or forego any and all administrative appeals,
proceedings, hearings and conferences with the taxing
authority in respect of such claim (provided,
however, that the Executive may participate therein
at Executive's own
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cost and expense) and may, at its option, either
direct Executive to pay the tax claimed and ▇▇▇ for a
refund or contest the claim in any permissible
manner, and the Executive agrees to prosecute such
contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in
one or more appellate courts, as the Company shall
determine; provided, however, that if the Company
directs the Executive to pay the tax claimed and ▇▇▇
for a refund, the Company shall advance the amount of
such payment to the Executive on an interest-free
basis and shall indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax
or income tax including interest or penalties with
respect thereto, imposed with respect to such
advance; and provided further, that any extension of
the statute of limitations relating to payment of
taxes for Executive's taxable year with respect to
which the contested amount is claimed to be due is
limited solely to such contested amount. Furthermore,
the Company's control of any such contested claim
shall be limited to issues with respect to which a
Gross-Up Payment would be payable hereunder and the
Executive shall be entitled to settle or contest, as
the case may be, any other issue raised by the
Internal Revenue Service or any other taxing
authority.
(f) If, after the receipt by the Executive of an amount
advanced by the Company pursuant to Section 10(e) hereof, the Executive receives
any refund with respect to such claim, the Executive agrees (subject to the
Company's complying with the requirements of Section 10(e) hereof) to promptly
pay to the Company the amount of such refund (together with any interest paid or
credited thereon after any taxes applicable thereto). If, after the Executive's
receipt of an amount advanced by the Company pursuant to Section 10(e) hereof, a
determination is made that the Executive is not entitled to any refund with
respect to such claim and the Company does not notify Executive in writing of
its intent to contest such denial of refund prior to the expiration of thirty
(30) calendar days after such determination, then such advance shall be forgiven
and shall not be required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Gross-Up Payment required to be
paid pursuant to this Section 10.
11. WITHHOLDING OF TAXES. The Company may withhold from any amounts
payable under this Agreement all federal, state, city or other taxes as the
Company reasonably determines to be required pursuant to any law or government
regulation, order or ruling.
12. SUCCESSORS, BINDING AGREEMENT. The Company shall require any
successor (whether direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or assets of the
Company, by agreement in form and substances satisfactory to the Executive, to
expressly 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 this
Agreement and shall entitle the Executive to compensation from the Company in
the same amount and on the same terms as the Executive would be entitled
hereunder if the Company had terminated the Executive's employment Without Cause
after a Change in Control occurring at the time of
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succession, except that for purposes of implementing the foregoing, the date on
which any such succession becomes effective shall be deemed the Termination
Date. This Agreement shall inure to the benefit of and be enforceable by the
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive should
die while any amounts would still be payable to the Executive hereunder if the
Executive had continued to live, all such amounts, unless otherwise provided
herein, shall be paid in accordance with the terms of this Agreement to the
Executive's devises, legates, or other designee or, if there be no such
designee, to the Executive's estate.
13. NOTICES. 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 (i) United States registered mail, return receipt
requested, postage prepaid, or (ii) reputable overnight courier service (i.e.
Federal Express), in each case, addressed to the respective address set forth in
this Section 13 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:
To the Company: OM Group, Inc.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn: General Counsel
with a copy to: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
Squire, ▇▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ L.L.P.
▇▇▇▇ ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
To the Executive:
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14. MISCELLANEOUS. No provisions of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is agreed to
in writing signed by the Executive and such officer as may be specifically
designated by the Board; provided, that the Company shall have the right to
terminate its obligations to the Executive under this Agreement by written
notice given to the Executive at any time prior to a Change in Control, so long
as such termination is not done in anticipation of or in connection with a
Change in Control. 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. This Agreement constitutes the entire agreement between the
Company and the Executive with respect to the subject matter hereof and, except
to the extent a specific
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compensation program provides for benefits upon a change in control relative to
that program, which provisions shall remain in effect, no agreements or
representations, oral or 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. Without limiting the generality of the foregoing,
this Agreement supersedes and replaces in its entirety any prior agreement
relating to the subject matter hereof.
15. VALIDITY. The invalidity or unenforceability of any one or more
provisions 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.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, any of which may be executed and delivered via facsimile, each of
which shall be deemed to be an original, and all of which together shall
constitute one and the same instrument.
17. JURISDICTION, CHOICE OF LAW. The validity, interpretation,
construction and performance of this Agreement shall be governed by the laws of
the State of Ohio. In the event of any dispute or controversy arising under or
in connection with this Agreement Executive and the Company hereby irrevocably
consent to the jurisdiction of the Common Pleas Court of the State of Ohio
(Cuyahoga County) or the United States District Court for the Northern District
of Ohio.
18. LEGAL FEES AND EXPENSES. It is the intent of the Company that the
Executive not be required to incur the legal expenses associated with (i) the
interpretation of any provision in, or obtaining of any right or benefit under,
this Agreement or (ii) the enforcement of his rights under this Agreement by
litigation or other legal action, because the cost and expense thereof would
substantially detract from the benefits intended to be extended to the Executive
hereunder. Accordingly, the Company irrevocably authorizes the Executive from
time to time to retain counsel of his choice, at the expense of the Company as
hereafter provided, to represent the Executive in connection with the
interpretation or enforcement of this Agreement, including the initiation or
defense of any litigation or other legal action, whether by or against the
Company or any Director, officer, stockholder or other person affiliated with
the Company, in any jurisdiction. Notwithstanding any existing or prior
attorney-client relationship between the Company and such counsel, the Company
irrevocably consents to the Executive's entering into an attorney-client
relationship with such counsel, and in that connection the Company and the
Executive agree that a confidential relationship shall exist between the
Executive and such counsel. The Company shall pay or cause to be paid and shall
be solely responsible for any and all attorneys' and related fees and expenses
incurred by the Executive under this Section 18.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date first written above.
OM GROUP, INC
By:
---------------------------
Name: ▇▇▇▇▇ ▇▇▇▇▇▇
Title: Chief Executive Officer
ACCEPTED AND AGREED TO AS OF THIS 8TH DAY OF JUNE, 2005
------------------------
Name of Executive
SCHEDULE OF EXECUTIVES PARTY TO CIC AGREEMENTS WITH THE COMPANY
R. ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇▇, Chief Financial Officer
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, Director of Investor Relations
▇▇▇▇▇▇ ▇. ▇▇▇, Vice President and General Manager, Nickel Group
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President and General Manager, Cobalt Group
