April 27, 2004 Vincent A. Calarco
April 27, 2004
Xxxxxxx X. Xxxxxxx
This letter is intended to set forth the agreement ("Agreement") regarding your
retirement from employment with Crompton Corporation ("Crompton") (Crompton,
together with all of its affiliates, shall herein be referred to as the "Company") effective
June 30, 2004 (the "Retirement Date").
1. Consideration. In consideration of your agreement to and your continued
compliance with each of the terms set forth in this Agreement, including the release set
forth in Section 4, the Company shall provide to you the following benefits to which you
are not otherwise entitled:
- Stock Options. You have been granted 372,500 options under the
Crompton Corporation 1998 Long-Term Incentive Plan (the "1998
LTIP") that will not have vested on the Retirement Date. The
Company will vest those options on the Retirement Date. You may
exercise any vested stock option granted to you under the 1998 LTIP
and the Crompton Corporation 1988 Long-Term Incentive Plans (the
"1988 LTIP") until the earlier of (i) the expiration date of the option, as
shown on Attachment 1 hereto, or (ii) June 30, 2009. All stock options
granted to you under the 1988 LTIP or the 1998 LTIP that are
incentive stock options shall be converted to nonqualified stock options
on the Retirement Date. Accordingly, you will be eligible to exercise
the stock options set out in Attachment 1 hereto on and after the
Retirement Date. - Restricted Stock. You have been granted 130,000 shares of restricted
stock under the 1998 LTIP which will not have vested on the
Retirement Date. The Company will vest 108,333 of those shares of
restricted stock on the Retirement Date. Accordingly, you will receive
the shares of restricted stock set out in Attachment 2 not later than
fifteen (15) business days following the Retirement Date. - Management Incentive Plan. The Company will pay you one half of
the annual bonus, if any, that you would have earned for the year
2004 if you had been a participant in the Management incentive Plan
during the entire year and met all of your personal objectives for the
year. - Consulting Agreement. On or before the Retirement Date, the
Company will enter into a consulting Agreement with you in the form
attached hereto as Attachment 3. - Automobile. As soon as practicable after the Retirement Date, the
Company shall assign to you the Company automobile currently used
by you. The Company shall thereafter have no further obligation for
insurance, maintenance or other expenses associated with such Company automobile. - Financial Planning and Tax Return Preparation. The Company will
reimburse you for expenditures you make for financial planning and
tax return preparation up to a maximum of $5,000 per annum for each
of the years 2005 through 2009. You agree to provide the Company
with evidence satisfactory to the Company of any such expenditures
for which reimbursement is sought.
- Other Effects of Retirement. Except as otherwise provided in this
Agreement, effective as of the Retirement Date, you shall be treated like any other
employee whose employment has terminated by reason of retirement.
- Resignation from the Board of Directors. Immediately following the
2004 Annual meeting of the Shareholders of the Company, you will
submit your written resignation from the Board of Directors of the
Company. As soon as reasonably practicable thereafter, you will
surrender your office at the Company's headquarters in Middlebury,
CT. - Termination of Participation. Except as otherwise provided in this
Agreement, your continued participation in each and every
Company benefit plan, policy, program or practice shall terminate
on the Retirement Date in accordance with the terms of such plan,
policy, program or practice. - Accrued Vacation Pay. Not later than fifteen (15) days following
the Retirement Date, the Company will pay you for your accrued
and unused vacation as of June 30, 2004. - 401(k) Plan Distribution. As soon as reasonably practicable
following the Retirement Date and in accordance with the terms of
the plan, the Company will cause the plan to distribute an amount
equal to the then current balance in your 401(k) account with the
Company to you or to your rollover XXX at your election. - Benefit Equalization Plan Distribution. As soon as reasonably
practicable following the Retirement Date, the Company will cause
the Benefit Equalization Plan to pay over to you in cash the
balance in your Benefit Equalization Plan Account after withholding
such amount as is required to satisfy tax withholding requirements. - Employee Stock Ownership Plan ("ESOP") Distribution. As soon
as reasonably practicable following the Retirement Date, the
Company will cause the ESOP to pay over to you in cash or
securities the balance of your ESOP account with the Company. - Supplemental Retirement Agreement. Not later than fifteen days
following the Retirement Date, the Company shall pay to you the
sum of Eleven Million Eight Hundred Seventeen Thousand Two
hundred Twenty - Six Dollars ($11,817,226) in accordance with the
terms of, and in full satisfaction and discharge of its obligations to
you under your Supplemental Retirement Agreement, dated as of
October 21, 1999. - Medical and Dental Coverage. Effective July 1, 2004, you and
your spouse are eligible to participate in the Supplemental Medical
and Dental Plan for Executives of Crompton Corporation in
accordance with the terms of such plan, a copy of which is
attached hereto as Attachment 4 and incorporated herein by
reference. - Restrictions on Sale of Stock. The Company will impose no
restrictions on your sale of shares of the Company's stock after the
Retirement Date. You will of course remain subject to all
requirements of law with respect to the purchase and sale of
securities. - Tax Withholding. All amounts paid by the Company (including
amounts paid under the 1988 LTIP and the 1998 LTIP) under this
Agreement will be subject to the applicable tax and social security
withholding and reporting.
3. Return of Company Property. By signing below, you represent that you
will return to the Company, on or before the Retirement Date, all Company property
including, without limitation, credit cards, identification badges, parking tags and keys to
any Company facilities, and any reports, files, memoranda, records and software,
computer access codes or disks, instructional manuals, and any other physical or
personal property that you received in connection with your employment with the
Company that you have in your possession, and that you have not retained any copies,
duplicates, reproductions or excerpts thereof; provided, that you may retain your laptop
computer and the office equipment located in your home office.
4. Release and Other Promises. The intent of this section is to secure your
promise not to xxx the Company, or anyone connected with it for any Claims (as
hereinafter defined) you may have against the Released Parties (as hereinafter
defined) in connection with your employment or separation from employment, in return
for the benefits described in this Agreement. Accordingly, in exchange for the benefits
described in Section 1 above ("Consideration"), you hereby agree as follows:
(a) Release. Except as otherwise provided in this Section 4(a), you
hereby release the Company and all of its past, present and/or future
divisions, affiliates and subsidiaries, and its and their officers, directors,
stockholders, trustees, employees, agents, representatives,
administrators, attorneys, insurers, employee benefit plans, fiduciaries,
predecessors, successors and assigns, in their individual and/or
representative capacities (hereinafter collectively referred to as the
"Released Parties"), from any and all causes of action, suits, agreements,
promises, damages, disputes, controversies, contentions, differences,
judgments, claims and demands of any kind whatsoever ("Claims") which
you or your heirs, executors, administrators, successors and assigns ever
had, now have or may have against the Released Parties, whether legal
or equitable, whether known or unknown to you, and whether asserted or
unasserted, (i) arising out of, in connection with, or otherwise by reason of
your employment and/or cessation of employment with the Company,
including without limitation claims under the SERA Agreement or any
other agreement with the Company, or (ii) otherwise involving facts which
occurred on or prior to the date that you sign this Agreement.
Such released Claims include, without limitation, any and all Claims under
Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1871, the
Civil Rights Act of 1991, the Fair Labor Standards Act, the Family and
Medical Leave Act of 1993, the Americans With Disabilities Act, the
Employee Retirement Income Security Act of 1974 (including, without
limitation, any claim for severance pay), the Connecticut Fair Employment
Practices Act, and any and all other federal, state or local laws, statutes,
rules and regulations pertaining to employment (each as amended); any
and all Claims under state contract or tort law; any and all Claims based
on the design or administration of any Company employee benefit plan or
program or arising under any Company policy, procedure, or employee
benefit plan; any and all Claims for wages, commissions, bonuses,
continued employment with the Company in any position, and
compensatory, punitive or liquidated damages; and any and all Claims for
attorneys' fees and costs. Notwithstanding the foregoing, nothing
contained herein shall interfere with or waive your right to enforce this
Agreement in a court of competent jurisdiction, and nothing herein shall
prevent you from challenging the validity of the release under the Older
Workers' Benefits Protection Act contained in Section 4(c);
(b) Remedy for Breach of Promises. To the extent this provision is not
prohibited by applicable law, if you commence, continue, join in, or in any
other manner attempt to assert any Claim released herein against the
Released Parties (exclusive of Claims described in Section 4(c) below), or
otherwise breach the promises made in this Agreement, you shall
reimburse the Released Parties for all attorneys' fees incurred by the
Released Parties in defending against such a Claim and the Company
shall have a right to the return of all Consideration paid to you pursuant to
this Agreement (exclusive of that portion of the Consideration described
in Section 4(c) below), together with interest thereon from the date the
same was paid to you, and to cease furnishing to you any further
Consideration described in this Agreement (exclusive of that portion of
the Consideration described in Section 4(c) below); provided that this
right of return of such Consideration and the cessation of payment of
further Consideration is without prejudice to the Released Parties' other
rights hereunder, including any right to obtain an agreement and release
of any and all claims against the Released Parties;
(c) Release of Claims Under the Age Discrimination in Employment
Act of 1967, as amended. The Claims released by you pursuant to this
Section 4 also include any and all Claims arising under the Age
Discrimination in Employment Act of 1967, as amended by the Older
Workers' Benefit Protection Act of 1990. You acknowledge and agree
that 20% of the cash value of the Consideration described in Section 1
above has been paid to you solely in order to effect a valid waiver of your
claims under the Age Discrimination in Employment Act of 1967;
(d) No Lawsuits. To the extent this provision is not prohibited by
applicable law, you hereby represent that you have not filed, and shall not
hereafter file, any claim against the Released Parties relating to your
employment and/or separation from employment with the Company, or
otherwise involving facts which occurred on or prior to the date that you
signed this Agreement, other than a Claim that the Company has failed to
provide you with the Consideration described in this Agreement;
(e) Continued Confidentiality Obligation. You understand and agree
that in the course of your employment with the Company, you have
acquired confidential information and trade secrets concerning personal,
business, financial, technical and other information and material,
including the Company's operations, processes, technology, contracts,
future plans and methods of doing business, which are the property of the
Company and which involve the Company and the Company's employees,
which information you understand and agree would be extremely
damaging to the Company if disclosed to a competitor or a third party.
You understand and agree that such information has been divulged to you
in confidence, and you agree to forever keep such information secret
and confidential, and that you shall not communicate or disclose to any
third party, or use for your own account, without prior written consent of
the Company, any of the aforementioned information or material, except
as required by law, unless and until such information or material becomes
generally available to the public through no fault of yours. In view of the
nature of your employment and the information and trade secrets which
you have received during the course of your employment, you likewise
agree that the Company would be irreparably harmed by any violation, or
threatened violation, of the prohibited disclosure of trade secrets and that,
therefore, the Company shall be entitled to an injunction prohibiting you
from any violation or threatened violation of such disclosure restrictions;
- Nondisparagement. Neither you nor the Released Parties shall
make any statements, orally or in writing, regardless of whether such
statements are truthful, nor take any actions, which (i) in any way could
disparage the other, or which foreseeably could harm the reputation
and/or goodwill of the other, or (ii) in any way, directly or indirectly, could
knowingly cause or encourage or condone the making of such statements
or the taking of such actions by anyone else; provided, that nothing
contained in this Section 4(f) shall prevent you or the Released Parties
from cooperating fully with any governmental agency or restrict you or the
Released Parties in any manner in the defense of any action brought by a
third party against you or the Released Parties.
(g) Business Activities.
- Non-Solicitation of Employees. During the one year period
commencing on the Retirement Date (the "Restricted Period"),
you shall not, directly or indirectly, either on your own behalf or
on behalf of any other person, firm or corporation, solicit or
induce, or attempt to solicit or induce, any employee of the
Company to leave the employment of the Company.
- Non-Solicitation of Customers. During the Restricted Period,
you shall not, directly or indirectly, either on your own behalf or
on behalf of any other person, firm or corporation, solicit or
attempt to divert away from the Company any person or
business enterprise that was a customer of the Company at any
time in the last twenty-four (24) months of your employment with
the Company. - Reasonableness of Restrictions. You acknowledge that you
have carefully read and considered the provisions of this
Section 4 and, having done so, agree that the restrictions set
forth in this Section 4 (including, but not limited to, the duration
and geographic scope of the restrictions set forth in this Section
4), are fair and reasonable and are reasonably required for the
protection of the interests of the Company, and do not preclude
you from earning a livelihood, nor do they unreasonably impose
limitations on your ability to earn a living. You further agree
that the potential harm to the Company of the non-enforcement
of these restrictions outweighs any potential harm to you of their
enforcement by injunction or otherwise.
(h) Cooperation with the Company. You shall fully cooperate and
assist the Company in any dispute in which the Company is involved and
in which you may have been involved. Such cooperation and assistance
shall be provided at a time and in a manner which is mutually agreeable to
you and the Company, and shall include providing information, and
documents, submitting to depositions, providing testimony and general
cooperation to assist the Company in defending its position with reference
to any matter. You will be reimbursed in accordance with the Company's
expense reimbursement policy for any reasonable out-of-pocket expense
you incur in fulfilling your obligations under this subparagraph. In the
event that the Company determines at any time and from time to time, in
its sole discretion, that you have failed to meet your obligations under this
Section 4(h), the Company shall provide you with written notice of such
determination outlining the reasons therefore and providing you a
reasonable opportunity, in light of all of the circumstances, to cure such
failure.
5. Non-Admission of Liability. The Company is providing you with the
Consideration described in Section 1 of this Agreement solely to ease the impact of
your separation from employment with the Company. The fact that the Company is
offering this Consideration to you should not be understood as an admission that the
Company has violated your rights (or the rights of anyone else) in any manner
whatsoever.
6. Acknowledgments. By signing this Agreement below, you hereby
acknowledge as follows:
(a) Sufficiency of Consideration. The Consideration received by you
and to be received by you in the future pursuant to this Agreement in
exchange for the release contained in Section 4 and the other promises
contained in this Agreement, are greater in value than anything else to
which you would be entitled from the Company if you did not execute this
Agreement, and the benefits described in this Agreement are being
provided to you in place and stead of any separation benefits to which you
might otherwise be entitled under any applicable policy, plan, and/or
procedure of the Company or under any prior agreement between
yourself and the Company;
(b) No Other Wages or Benefits Due. Except as described in this
Agreement, you have been paid all wages and attendant benefits due you
from the Company in consideration of the services you rendered while
employed by the Company, including but not limited to vacation pay, sick
or disability pay, overtime pay, holiday pay, expense reimbursement,
bonuses, payments due you from the Company pursuant to any
agreement or other contract to which you and/or the Company was a
party, and any and all monetary or other benefits that are or were due you
pursuant to policies of the Company in effect prior to the Retirement Date;
(c) Entire Agreement; Prior Agreements. This Agreement contains the
entire agreement between yourself and the Company regarding the
subject matters hereto and, as such, fully supersedes any and all prior
agreements or understandings between you and the Company pertaining
to the subject matter addressed in this Agreement, except as to any
continuing obligations under the SERA Agreement that are referenced
and incorporated herein. Specifically, for example, effective on the date
you execute this Agreement, your Employment Agreement with the
Company becomes null and void in all respects. In agreeing to the terms
of this Agreement, you are not relying upon any written or oral promise or
representation made to you by any employee or representative of the
Company, other than the promises contained herein. This Agreement
may not be amended, superseded, cancelled, or terminated other than in
writing and unless the writing is signed both by you or your attorney and
by the Company or its attorney or other designated representative; and
(d) No Duress. You have not been forced or pressured in any manner
whatsoever to sign this Agreement, and you have agreed to all of its
terms voluntarily. You have read this Agreement in its entirety and have
been given at least twenty-one (21) days to consider all of its terms. You
have been advised to consult with an attorney and any other advisors of
your choice prior to signing this Agreement. You fully understand that by
signing below you are giving up any right which you may have to xxx or
bring any other Claims against the Company, including but not limited to
the right to xxx or bring any other Claims against the Company under the
Age Discrimination in Employment Act of 1967, as amended (the
"ADEA").
7. Confidentiality of this Agreement. You shall keep this Agreement and its
terms and provisions strictly confidential, except that you may disclose the terms of this
Agreement, on a need to know basis, to federal, state or local authorities, legal counsel
and financial advisors, provided you instruct such persons that the information you
have disclosed to them is to remain confidential.
8. Severability. The provisions of this Agreement are severable and as
such, if any part of this Agreement is found to be unenforceable, the remaining parts
shall remain valid and enforceable; provided, however, that if you are declared entitled
to litigate any Claims settled by the terms of this Agreement (exclusive of Claims
described in Section 4(c) above), then you shall remit to the Company the
Consideration paid to you pursuant to this Agreement (together with interest thereon)
prior to and as a condition precedent to the commencement or continuation of any
proceedings related to such claims.
9. Notice. Any notice that may be given, or is required to be given, under
this Agreement, will be in writing and will be delivered personally or sent by telecopy or
by certified mail, postage prepaid, return receipt requested and addressed to the
receiving party at the address listed above or such other address as may be
designated by either party hereafter in writing.
10. Arbitration. Any dispute or controversy arising under or in connection with
this Agreement shall be settled exclusively by arbitration, conducted before a panel of
three arbitrators in the State of Connecticut, in accordance with the rules of the
American Arbitration Association then in effect. Judgment may be entered on the
arbitrator's award in any court having jurisdiction; provided, however, that the Company
shall be entitled to seek a restraining order or injunction in any court of competent
jurisdiction to prevent any continuation of any violation of Section 4 of this Agreement
and you hereby consent that such restraining order or injunction may be granted
without the necessity of the Company's posting any bond. The expenses of such
arbitration shall be shared equally by you and the Company.
11. Injunctive Relief. You agree that in addition to any other remedy at law or
in equity or in this Agreement, the Company shall be entitled to a temporary restraining
order and both preliminary and permanent injunctions restraining you from violating any
provision of Section 4 of this Agreement.
12. Successors and Assigns. This Agreement shall bind and inure to the
benefit of the parties and their respective successors and assigns, legal
representatives and heirs; provided, however, that you may not assign this Agreement
or any of your rights or interest herein, in whole or in part, to any other person or entity
without the prior written consent of the Company.
13. Choice of Law. The validity, interpretation, construction and performance
of this Agreement shall be governed by the laws of the State of Connecticut, without
regard to that state's choice of law provisions.
14. Effective Date. The agreements described in this Agreement shall
become effective on the day you sign and deliver this Agreement to the Company,
except that your agreement to waive any Claims pursuant to Section 4(c) of this
Agreement shall not become effective until the 8th day following the date you sign this
Agreement. You may revoke your agreement to waive such Claims pursuant to Section
4(c) of this Agreement within seven (7) days after you sign this Agreement by delivering
written notice of revocation to me. In the event of such revocation, you shall not be
entitled to receive, nor shall you receive, the Consideration set forth in Section 1 of this
Agreement.
CROMPTON CORPORATION
By:______________________
Its:
Accepted and agreed as of
This 27th day of April 2004.
Xxxxxxx X. Xxxxxxx
STATE OF _____________________)
:ss
COUNTY OF ____________________)
On this ___ day of _______________(month), ___________(year), before me
personally came Xxxxxxx X. Xxxxxxx, to me known, and known to me to be the person
described as the employee in, and who executed, the foregoing Agreement, and the
employee duly acknowledged to me that he executed the same.
__________________________________
