CHEMTURA CORPORATION Middlebury, CT 06749
CHEMTURA
CORPORATION
000
Xxxxxx Xxxx
Middlebury,
CT 06749
December
8, 2008
BY HAND
DELIVERY
Xxxxxx X.
Xxxx
00 Xxxxxx
Xxxx
Roxbury,
CT 06783
Dear
Xxx:
As we
have discussed, your employment with Chemtura Corporation (the “Company”) will
terminate effective as of December 8, 2008 (the “Separation
Date”). The purpose of this letter (the “Agreement”) is to
serve as a “Notice of Termination,” as such term is defined in the Employment
Agreement between you and the Company, dated April 1, 2006 (the “Employment
Agreement”), indicating your resignation from all positions at the
Company, its subsidiaries and affiliates, including your resignation from the
positions of President, Chief Executive Officer and Chairman of the Company, and
to confirm the agreement between you and the Company concerning your severance
arrangements, as follows:
1. Final Compensation and
Payments.
(a) You
will receive each of the following: (i) pay for all work you have performed for
the Company during the current payroll period, through the Separation Date, to
the extent not previously paid; (ii) any annual bonus payable for fiscal year
2007 to the extent not already paid; and (iii) pay at your final base rate of
pay for the vacation days you have earned but not used as of the Separation
Date, as reflected on the books of the Company.
(b) As
soon as practicable following the Separation Date, and no later than thirty (30)
calendar days following such date, you shall also receive reimbursement for all
reasonable business travel and other expenses to which you are entitled,
provided that you submit such substantiation and documentation within fourteen
(14) days following the Separation Date. Any such reimbursement that
would constitute nonqualified deferred compensation subject to Code Section 409A
shall be subject to the following additional rules: (i) no reimbursement of any
such expense shall affect the right to reimbursement of any other such expense
in any other taxable year; (ii) reimbursement of the expense shall be made, if
at all, not later than the end of the calendar year following the calendar year
in which the expense was incurred; and (iii) the right to reimbursement shall
not be subject to liquidation or exchange for any other
benefit.
Xxxxxx X.
Xxxx
December
8, 2008
Page
2
2. Severance
Benefits. In consideration of your acceptance of this
Agreement and subject to (x) your meeting in full your obligations under this
Agreement, including without limitation, with respect to the release and waiver
of claims set forth in Paragraph 10 below; (y) your meeting in full your
obligations under the surviving provisions of the Employment Agreement,
including without limitation, the restrictive covenants set forth in Paragraphs
8, 9, and 10 of the Employment Agreement; and (z) any repayment obligation you
may have pursuant to Paragraphs 6(d)(3), (4), and (5) of the Employment
Agreement, the Company shall offer you the following severance payment and
benefits:
(a) The
Company will make a payment (the “Severance Payment”)
to you in the gross amount of four million dollars ($4,000,000), which is an
amount equivalent to: (i) two times your annual base salary in effect
immediately prior to the Separation Date, plus (ii) two times your target bonus
in effect immediately prior to the Separation Date. The Severance
Payment shall be paid in cash as follows: one million dollars ($1,000,000) on
January 15, 2009; one million dollars ($1,000,000) on March 13, 2009; and two
million dollars ($2,000,000) on June 15, 2009.
(b) For
the two-year period beginning on your Separation Date, you may elect to continue
your group health, dental, and vision benefits and life insurance coverage in
accordance with the provisions of COBRA (if applicable), the terms set forth
herein, applicable plan documents, and all other applicable legal
requirements. You will be provided with information and forms by
which you can select such benefits continuation under separate
cover. During the two-year period following the Separation Date, and
to the extent permitted by applicable plan documents or insurance contracts, the
Company will continue to pay the employer’s share of your monthly premiums for
such coverage on each scheduled monthly premium payment date, as required by
applicable plan documents, at the rates in effect immediately prior to your
Separation Date. In the event that the Company is unable to provide
this benefit under applicable plan documents or insurance contracts, the Company
shall pay you during such period the economic value of the employer’s share of
your monthly premiums on each scheduled monthly premium payment date. In
order to be eligible for Company contributions, however, you must (i) make a
timely COBRA election and/or life insurance continuation election; and (ii) pay
the remainder of the premium costs each month by sending a check to the Company
prior to each scheduled monthly premium payment date (or, at your election, by a
single check at the outset of your two-year coverage continuation
period). In the event that you decide not to sign this
Agreement, you will still be eligible to continue your group health, dental, and
vision benefits through COBRA by paying the full premiums associated with such
coverage plus a small administrative fee and by complying with any and all other
obligations required by law or applicable plan documents. To the
extent any reimbursements or other payments of expenses pursuant to this Section
2(b) constitute nonqualified deferred compensation subject to Code Section 409A,
such reimbursements or payments shall comply with the additional rules regarding
reimbursements set forth in Section 1(b).
Xxxxxx X.
Xxxx
December
8, 2008
Page
3
(c) All
vested stock options shown on Exhibit A to this Agreement shall remain
outstanding and exercisable until the dates set forth on Exhibit
A. You have no vested grants of Restricted Stock under the Chemtura
2006 Long-Term Incentive Plan. All unvested stock options and
unvested Restricted Stock grants held by you shall automatically and immediately
be forfeited.
(d) The
Company shall pay you your vested account balances under the Chemtura 401(k)
Savings Plan and the Chemtura Supplemental Savings Plan (the “Deferred
Compensation Payment”) pursuant to the terms of the applicable plan and your
payment elections made thereunder as set forth in Exhibit B. All
other deferred compensation amounts unvested as of the Effective Date shall
automatically and immediately be forfeited.
3. Tax
Withholdings. All payments by the Company under this Agreement
will be reduced by all taxes and other amounts that the Company is required to
withhold under applicable law and all other deductions authorized by
you.
4. Acknowledgement of Full
Payment. You agree that the payments set forth herein shall be
the only form of compensation, payments, and benefits provided to you by the
Company, whether for services provided to the Company or otherwise, through the
Separation Date and that, except as expressly provided under this Agreement, no
further compensation, payment, or benefit is owed to you. Without
limiting the foregoing, you agree that you are not entitled to any payment,
grant, or benefit under the Company’s long-term incentive plans.
5. Status of Employee Benefits
and Paid Time Off. Except as otherwise expressly provided in
Paragraph 2(b) of this Agreement with respect to continuation of health, dental,
vision, and life insurance coverage, your participation in all employee benefit
plans of the Company will end as of the Separation Date, in accordance with the
terms of those plans. You will not continue to earn vacation or other
paid time off after the Separation Date.
Xxxxxx X.
Xxxx
December
8, 2008
Page
4
6. Restrictive
Covenants. You agree that you will continue to abide by the
restrictive covenants set forth in Paragraphs 8, 9, and 10 of the Employment
Agreement.
7. Non-Disclosure and
Non-Disparagement. You agree that you will not disclose this
Agreement or any of its terms or provisions, directly or by implication, except
(i) to members of your immediate family and to your legal and tax advisors, and
then only on condition that they agree not to further disclose this Agreement or
any of its terms or provisions to others; or (ii) to the extent this Agreement
is publicly disclosed by the Company. You agree not to publish or
disseminate, directly or indirectly, any statements, whether written or oral,
that are disparaging of the Company or any of its past or present officers or
directors in their capacity as such. The Company agrees not to
publish or disseminate, directly or indirectly, any statements, whether written
or oral, that are disparaging of you. You further agree that your
violation of this covenant will be deemed a material breach of this
Agreement.
8. Employee
Cooperation. You agree to cooperate reasonably with the
Company hereafter with respect to all matters arising during or related to your
employment, including but not limited to all matters in connection with any
governmental investigation, litigation or regulatory or other proceeding which
may have arisen or which may arise following the signing of this
Agreement. The Company will reimburse you for your out-of-pocket
expenses incurred in complying with Company requests hereunder, provided such
expenses are authorized by the Company in advance.
9. Return of Company Documents
and Other Property. In signing this Agreement, you give the
Company assurance that you have returned to it, or will return by the date this
Agreement is executed, any and all documents, materials and information related
to the business, whether present or otherwise, of the Company and its Affiliates
(as defined herein), and all keys, equipment and other property of the Company
and its Affiliates in your possession or control. Recognizing that
your employment with the Company has ended, you agree that you will not, for any
purpose, attempt to access or use any computer or computer network or system of
the Company or any of its Affiliates, including without limitation their
electronic mail systems. Further, you acknowledge that you have
disclosed to the Company all passwords necessary or desirable to enable the
Company to access all information which you have password-protected on its
computer network or system. For purposes of this Agreement, “Affiliate” shall mean
any corporation, organization, association, partnership, sole proprietorship or
other type of entity, whether incorporated or unincorporated, directly or
indirectly controlling or controlled by or under direct or indirect common
control with the Company.
Xxxxxx X.
Xxxx
December
8, 2008
Page
5
10. Release and Waiver of Claims
by You. You hereby agree and acknowledge that by signing this
Agreement and accepting the benefits to be provided to you hereunder, and for
other good and valuable consideration provided for in this Agreement, you are
waiving your right to assert any form of legal claim against the Company and its
affiliates and all of its and their respective past, present, and future
directors, shareholders, officers, employees, agents and representatives, their
respective successors and assigns, and all others connected with it and them,
both individually and in their official capacities whatsoever for any alleged
action, inaction or circumstance existing or arising from the beginning of time
through the Effective Date. Your waiver and release herein is intended to bar
any form of legal claim, charge, complaint or any other form of action (jointly
referred to as “Claims”) against the Company seeking any form of relief
including, without limitation, equitable relief (whether declaratory, injunctive
or otherwise), the recovery of any damages or any other form of monetary
recovery whatsoever (including, without limitation, back pay, front pay,
compensatory damages, emotional distress damages, punitive damages, attorneys
fees and any other costs) for any alleged action, inaction or circumstance of
any kind, nature or description whatsoever, whether known or unknown, apparent
or not apparent, contingent or absolute, accrued or unaccrued, matured or
unmatured, foreseeable or unforeseeable, liquidated or unliquidated, unsuspected
or unanticipated which you ever had, now have, may have, or may claim to have
against the Company existing or arising through the Effective Date.
Without
limiting the foregoing general waiver and release, you specifically waive and
release the Company from any Claim arising from or related to your employment
relationship with the Company, the Employment Agreement and your separation from
service, including, without limitation:
(a)
Claims under any state or federal discrimination, fair employment practices or
other employment related statute, regulation or executive order (as they may
have been amended through the Effective Date) prohibiting discrimination or
harassment based upon any protected status including, without limitation, race,
national origin, age, gender, marital status, disability, veteran status or
sexual orientation. Without limitation, specifically included in this Paragraph
are any Claims arising under the federal Age Discrimination in Employment Act,
the Older Workers Benefit Protection Act, the Civil Rights Acts of 1866 and
1871, Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991,
the Equal Pay Act, the Americans With Disabilities Act and any other similar
federal or state statute;
(b)
Claims under any state or federal employment related statute, regulation or
executive order (as they may have been amended through the Effective Date)
relating to terms and conditions of employment. Without limitation, specifically
included in this Paragraph are any Claims arising under the National Labor
Relations Act, the Employee Retirement Income Security Act of 1974 and the
Consolidated Omnibus Budget Reconciliation Act;
Xxxxxx X.
Xxxx
December
8, 2008
Page
6
(c)
Claims under any state or federal common law theory, including, without
limitation, wrongful discharge, breach of express or implied contract,
promissory estoppel, unjust enrichment, breach of a covenant of good faith and
fair dealing, violation of public policy, defamation, interference with
contractual relations, intentional or negligent infliction of emotional
distress, invasion of privacy, misrepresentation, deceit, fraud or negligence;
and
(d) Any
other Claim arising under state or federal law.
It
is the Company’s desire and intent to make certain that you fully understand the
provisions and effects of this Agreement. To that end, you have been
advised and given the opportunity to consult with legal counsel for the purpose
of reviewing the terms of this Agreement.
11. Release of Claims by the
Company. The Company hereby agrees and acknowledges that by
signing this Agreement for good and valuable consideration provided for in this
Agreement, the Company is waiving its right to assert any form of Claims against
you, your heirs, estate, agents, successor and assigns whatsoever for any
alleged action, inaction or circumstance existing or arising from the beginning
of time through the Effective Date. The Company’s waiver and release
herein is intended to bar any form of Claim against you seeking any form of
relief including, without limitation, equitable relief (whether declaratory,
injunctive or otherwise), the recovery of any damages or any other form of
monetary recovery whatsoever (including, without limitation, compensatory
damages, emotional distress damages, punitive damages, attorneys fees and any
other costs) for any alleged action, inaction or circumstance of any kind,
nature or description whatsoever, arising through the Effective Date, as defined
below, provided
however, and
notwithstanding any other provision of this Agreement to the contrary, the
release by the Company does not: (i) limit in any way the Company’s right to
enforce this Agreement or to enforce any violations of the Employment Agreement
that occur after the date hereof or any claims arising based on actions by you
or events occurring after the date hereof, (ii) release any claims based on
fraud or a violation of law by you (provided that the Company is not aware at
this time of any fraudulent activity or criminal wrongdoing by you, and the
Company is not aware at this time of any act by you that could give rise to a
violation of federal, state, or local statute, rule or regulation), (iii)
release any other act or omission for which the Company would not have the power
to indemnify you pursuant to Section 145 of the Delaware General Corporate Law,
or (iv) release any rights under applicable law which cannot be waived or
released pursuant to any agreement; provided further,
that references to the “awareness” of the Company in Paragraphs 11 and 12 shall
refer only to the actual knowledge of the members of the Board (excluding, for
purposes of clarification, you).
Xxxxxx X.
Xxxx
December
8, 2008
Page
7
12. Claims Not
Released. Notwithstanding the foregoing releases in Paragraphs
10 and 11, this Agreement does not release (i) you or the Company from any
obligation expressly set forth in this Agreement, or (ii) your rights to
indemnification, advancement and director’s and officer’s liability insurance
coverage as provided in Paragraph 13 hereof. If the Company hereafter
discovers claims or facts in addition to or different than those which it is now
are aware of, knows or believes to exist with respect to the subject matter of
this Agreement and which, if known or suspected at the time of entering into
this Agreement, may have materially affected this Agreement and its decision to
enter into it, the Company does not release or waive, and expressly preserves
any right, claim or cause of action that might arise as a result of such
different or additional claims or facts.
13. Indemnification. Notwithstanding
anything to the contrary herein, you shall retain all indemnification,
advancement and director’s and officer’s liability insurance rights you possess
immediately prior to the Separation Date, including, but not limited to, any
rights set forth in Paragraph 4(g) of the Employment Agreement, any indemnity
agreements you entered into with the Company, and any rights provided in the
certificate of incorporation or bylaws of the Company as in effect immediately
prior to the Effective Date. All such rights to indemnification,
advancement and director’s and officer’s liability insurance shall remain in
full force and effect, according to their terms. In addition, the
Company shall maintain you as a named insured on its directors and officers
insurance policies through at least the fifth (5th) anniversary of the Effective
Date, or for so long as the Company maintains any directors and officers
insurance policies for any officers or directors, on terms and conditions that
are no less favorable than those provided to any officer or
director.
14. Miscellaneous.
(a) This
Agreement shall be governed by and construed in accordance with the laws of the
State of Connecticut, without regard to conflicts of laws principles thereof,
except to the extent that federal law applies.
(b) This
letter contains the entire agreement between you and the Company and replaces
and supersedes all prior and contemporaneous agreements, communications and
understandings, whether written or oral, with respect to your employment and its
termination and all related matters; provided, however, that
Paragraphs 6(d)(3), 6(d)(4), 6(d)(5), 8, 9, 10, 11, 12, 18, 21 and 22 (and the
applicable definitions set forth in Paragraph 1) of the Employment Agreement
shall remain in full force and effect.
Xxxxxx X.
Xxxx
December
8, 2008
Page
8
(b) No
person, other than pursuant to a resolution duly adopted by the members of the
Company’s Board of Directors, shall have the authority on behalf of the Company
to agree to modify, amend, or waive any provision of this
Agreement. Further, this Agreement may not be modified or amended
orally, but only by a written agreement signed by both parties. Each
party to this Agreement acknowledges and agrees that no breach of this Agreement
by the other party or failure to enforce or insist on its or his rights under
this Agreement shall constitute a waiver or abandonment of any such rights or
defense to enforcement of such rights.
(c) This
Agreement and the rights, interests and obligations of the Company hereunder
shall inure to the benefit of and be enforceable by any parent, subsidiary or
affiliate of the Company or to any person, corporation, partnership or entity
that succeeds to all or substantially all of the business or assets of the
Company, and the Company shall require any such 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 to expressly
assume and agree to perform this Agreement. This Agreement shall
inure to the benefit of and be enforceable by you and your personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If you should die while any amount would still
be payable to you hereunder had you continued to live, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to your devisee, legatee or other designee or, if there is no such
designee, to your estate.
(d) This
Agreement is to be construed as a whole, according to its fair meaning, and not
strictly for or against any of the parties.
(e) If
any portion or provision of this Agreement is to any extent declared illegal or
unenforceable by a court of competent jurisdiction, then the remainder of this
Agreement, or the application of such portion or provision in circumstances
other than those as to which it is so declared illegal or unenforceable, shall
not be affected thereby, and each portion and provision of this Agreement shall
be valid and enforceable to the fullest extent permitted by law.
(f) The
captions and headings in this Agreement are for convenience only and in no way
define or describe the scope or content of any provision of this
Agreement.
Xxxxxx X.
Xxxx
December
8, 2008
Page
9
(g) This
Agreement may be executed by the parties in any number of counterparts, each of
which shall be deemed an original, but all of which shall constitute one and the
same agreement.
If the
terms of this Agreement are acceptable to you, please sign, date and return it
to me after the Separation Date, within twenty-one (21) days of the date you
receive it. Please
note that in order to be eligible for the severance benefits provided herein,
you must timely sign and return the Agreement after the Separation Date (and no later
than twenty-one (21) days after the date you receive the
Agreement). This Agreement will not be effective, and will never take
effect, if you sign the letter on or prior to the Separation
Date. You may revoke this Agreement at any time during the
seven (7) days immediately following the date of your timely
signing. If you do not revoke it, then, at the expiration of that
seven-day period (the “Effective Date”),
this letter will take effect as a legally-binding agreement between you and the
Company on the basis set forth above. The enclosed copy of this
letter, which you should also sign and date, is for your records.
|
Sincerely,
|
|
CHEMTURA
CORPORATION
|
|
/s/ Xxxx X. Xxxxxxxx (for Xxxxx X.
Xxxxxxxx)
|
|
Xxxxx
X. Xxxxxxxx
|
|
Chairman,
Compensation Committee
|
I hereby agree to the terms and
conditions set forth above. I have been given at least twenty-one
(21) days to consider this Agreement, and I have chosen to execute this
Agreement on the date set forth below. I intend that this Agreement
will become a binding agreement between Chemtura Corporation and me if I do not
revoke my acceptance within seven (7) days. Accepted and
agreed:
|
Signature:
|
/s/ Xxxxxx X. Xxxx
|
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Xxxxxx
X. Xxxx
|
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Date:
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December
14, 2008
|
EXHIBIT
A
Vested
and Exercisable Options on the Effective Date
Xxxxxx X.
Xxxx
00 Xxxxxx
Xxxx
Roxbury,
CT 06783
|
Grant Date
|
Expiration
Date
|
Plan ID
|
Grant Type
|
Granted
|
Xxxxx
Xxxxx
|
Outstanding
|
Exercisable
|
|||||||||||||||
|
01/20/2004
|
03/08/2009
|
98 |
Non-Qualified
|
500,000 | $ | 7.64 | 500,000 | 500,000 | ||||||||||||||
|
02/23/2005
|
03/08/2009
|
98
|
Non-Qualified
|
300,000 | $ | 12.92 | 300,000 | 300,000 | ||||||||||||||
|
03/06/2006
|
03/08/2009
|
98
|
|
Non-Qualified
|
330,000 | $ | 10.75 | 330,000 | 220,000 | |||||||||||||
|
06/06/2006
|
03/08/2009
|
98
|
Non-Qualified
|
220,000 | $ | 10.75 | 220,000 | 146,667 | ||||||||||||||
|
02/16/2007
|
03/08/2009
|
2006
|
Non-Qualified
|
75,000 | $ | 12.06 | 75,000 | 18,7500 | ||||||||||||||
|
02/28/2008
|
03/08/2009
|
2006
|
Non-Qualified
|
375,000 | $ | 8.71 | 375,000 | 0 | ||||||||||||||
|
Totals
|
|
1,800,000 | 1,800,000 | 1,185,417 | ||||||||||||||||||
EXHIBIT
B
Deferred
Compensation Payment Schedule
Xxxxxx X.
Xxxx
00 Xxxxxx
Xxxx
Roxbury,
CT 06783
|
Applicable Plan
|
Date
|
Compensation Type
|
Current Value
|
Date Payable
|
|||||
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Chemtura
Supplemental Savings Plan
|
12/09/08
|
Cash
– Lump Sum Distribution
|
$ | 572,250 |
06/09/2009
|
||||
|
Chemtura 401(k) Savings
Plan
|
12/09/08
|
401(k) contributions
|
$ | 129,938 |
When withdrawn after
age 59 1/2
|
||||
