EXHIBIT 2.4
EMPLOYEE BENEFITS AND COMPENSATION AGREEMENT
BETWEEN
FIRST MISSISSIPPI CORPORATION
AND
[NEWCO]
DATED , 1996
EMPLOYEE BENEFITS AND COMPENSATION AGREEMENT
This Agreement dated as of , 1996 between FIRST MISSISSIPPI
CORPORATION (the "Company"), a Mississippi corporation with offices at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇ and [Newco] ("Newco"), a Mississippi
corporation with offices at [ ], shall govern the rights and
obligations of the Company and Newco with respect to compensation and benefits
of the employees of each of the Company and Newco in connection with the
transaction effected by the Distribution, as described below. The term, the
Company, when used in this Agreement shall not be construed to include Newco
where such construction would have the effect of negating any obligation of
Newco hereunder. The term, Newco, when used shall not be construed to include
the Company where such construction would have the effect of negating any
obligation of the Company hereunder.
RECITALS
WHEREAS, the Company, Mississippi Chemical Corporation, a Mississippi
corporation ("Parent") and Miss Sub, Inc., a Mississippi corporation and a
wholly owned subsidiary of Parent ("Sub"), have entered into an Agreement and
Plan of Merger and Reorganization, dated as of , 1996 (the "Merger
Agreement"), providing for the Merger (as defined in the Merger Agreement) of
Sub with and into the Company, with the Company as the surviving corporation;
and
WHEREAS, pursuant to the terms of that certain Agreement and Plan of
Distribution dated as of , 1996 (the "Distribution Agreement"),
including the satisfaction or waiver of the conditions set forth in Article VI
of the Distribution Agreement, immediately prior to the Effective Time (as
defined in Section 1.2 of the Merger Agreement), the Board of Directors
expects to distribute all of the then-outstanding shares of Common Stock, par
value $ per share, of Newco ("Newco Common Stock") as a dividend to the
holders of Common Stock, par value $1.00 per share, of the Company ("Company
Common Stock"), on a pro rata basis (the "Spin-Off"); and
WHEREAS, the purpose of the Spin-Off is to make possible the Merger by
divesting the Company of the businesses and operations conducted or to be
conducted by Newco, which Parent is unwilling to acquire; and
WHEREAS, the Distribution Agreement sets forth or provides for certain
agreements between the Company and Newco in consideration of the separation of
their ownership, including this Employee Benefits and Compensation Agreement.
NOW, THEREFORE, in consideration of the premises and the mutual promises
contained in this Agreement, the Distribution Agreement and in the other
agreements and instruments provided for in such agreement, the parties hereto
agree as follows.
ARTICLE I
Definitions
"Company Stock Plans" means the First Mississippi Corporation 1995 Long-Term
Incentive Plan, the First Mississippi Corporation 1988 Long-Term Incentive
Plan, and the First Mississippi Corporation 1980 Long-Term Incentive Plan.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended.
"Transferred Employee" means each person employed by the Company other than
the Retained Employees and any other person who becomes an employee of the
Newco Group immediately after the Time of Distribution.
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Any capitalized terms not otherwise defined herein, shall have the meaning
set forth in the Distribution Agreement or the Merger Agreement.
ARTICLE II
Salary, Wages, Payroll and Related Benefits
2.1 Prior to the Time of Distribution, the Company and Newco shall cooperate
to transfer each Transferred Employee to the employ of Newco effective as of
the Time of Distribution.
2.2 With respect to the Transferred Employees and all other past, present,
active or inactive employees of the Initial Group (or their dependents or
beneficiaries), other than the Retained Employees, Newco shall assume the
liabilities and obligations with respect to, and continue to be responsible
for, all liabilities and obligations whatsoever in connection with claims made
by or on behalf of such persons in respect of salary, wages, benefits,
severance pay, salary continuation, COBRA continuation and similar obligations
relating to the continued employment, or the termination or alleged
termination of such persons' employment with the Newco Group, including,
without limitation, by reason of consummation of the transactions contemplated
in the Distribution Agreement or the Merger Agreement or otherwise and neither
the Company nor any member of the Company Group shall assume such liability.
2.3 With respect to Retained Employees, except as specifically provided in
this Agreement and in Section 6.6 of the Merger Agreement, the Company shall
retain the liabilities and obligations with respect to, and continue to be
responsible for, all liabilities and obligations whatsoever in connection with
claims made by or on behalf of such persons in respect of salary, wages,
benefits, severance pay, salary continuation, COBRA continuation and similar
obligations relating to the continued employment, unpaid and unused vacation
benefits accrued and earned prior to the Time of Distribution and the
termination or alleged termination of such persons' employment with the
Company Group by reason of the consummation of the transactions contemplated
in the Distribution Agreement or the Merger Agreement or otherwise and neither
Newco nor any member of the Newco Group shall assume such liability.
ARTICLE III
Long Term Incentive Plans
3.1 Prior to the Time of the Distribution, the Company and Newco shall (i)
cooperate to amend the Company Stock Plans as may be necessary to provide for
the assumption of such plans by Newco to the extent set forth in Section 3.2
below, and (ii) take such other steps (consistent with applicable law and the
terms of such affected plans) as may be necessary to prevent the consummation
of the transactions contemplated by this Agreement, the Distribution Agreement
and the Merger Agreement (including the transfer of employment of any
Transferred Employee) from causing, resulting in or being treated as a
termination of employment or a change of control with respect to the Company
Stock Plans.
3.2 Effective as of the Time of Distribution, (i) Newco shall assume the
Company Stock Plans with respect to the participants in such plans who are
employees of the Newco Group or former employees or current or former
directors of the Company and its Subsidiaries and hold Company Options (as
defined below) as of the Time of Distribution (the "Newco Optionees"); (ii)
each outstanding option to purchase shares of Company Common Stock or to
purchase Company Convertible Debentures (a "Company Option") under the Company
Stock Plans, whether vested or unvested, exercisable or unexercisable, that
was granted to a person who, immediately after the Time of Distribution, is a
Newco Optionee, shall, subject to any required consent of the holder of such
Company Option, be exchanged for an option (a "Newco Option") to purchase the
number of shares of Newco Common Stock equal to the product of (1) the
quotient of (x) the fair market value of the Company Common Stock, and (y) the
fair market value of a share of Newco Common Stock (the "Conversion
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Ratio") and (2) the number of shares of Company Common Stock that the holder
of such option would have been entitled to receive had such holder exercised
such option in full and in the case of a Company Option exercisable for
Convertible Debentures, converted such Debentures into Company Preferred Stock
and then into Company Common Stock (not taking into account whether or not
such option or convertible debenture was in fact exercisable) (rounded to the
nearest whole share) at a per share exercise price equal to the per share
exercise price of such Company Options divided by the Conversion Ratio
(rounded to the nearest cent), which Newco Option shall be subject to the same
terms and conditions (including the vesting schedule) as the Company Option;
provided, however, that the Newco Option shall be exercisable only for Newco
Common Stock, and provided, further that, in the case of any Company Stock
Option to which Section 421 of the Internal Revenue Code of 1986, as amended
(the "Code") applies by reason of its qualification under any Sections 422-424
of the Code ("incentive stock options"), the option price, the number of
shares purchasable pursuant to such option and the terms and conditions of
exercise of such option shall be determined in order to comply with Section
424(a) of the Code; and (iii) the obligations of the Company with respect to
such Newco Options shall be transferred to and assumed by Newco. For purposes
of this Section 3.2, the fair market value of the Company Common Stock shall
be equal to the greater of (x) the average of the closing prices of Company
Common Stock on the New York Stock Exchange (the "NYSE") Composite
Transactions Reporting Systems, as reported by The Wall Street Journal, for
the ten (10) trading days immediately preceding the date that the Company
Common Stock commences trading on an ex-dividend basis (with respect to the
Distribution) or (y) the sum of (A) the average of the closing prices of the
Company Common Stock for the period from the ex-dividend date (with respect to
the Distribution) to the Time of Distribution and (B) the average of the
closing prices of the Newco Common Stock on the NYSE Composite Transactions
Reporting System, as reported by The Wall Street Journal, for the ten (10)
trading days following the tenth trading day after the Time of Distribution
(the "Newco Average Price"). The fair market value of a share of Newco Common
Stock shall be equal to the Newco Average Price. Effective as of the Time of
Distribution, each outstanding Company Convertible Debenture shall, subject to
any required consent of the holder of such Company Convertible Debenture, be
exchanged for a Newco debenture which shall be substantially identical to such
Company Convertible Debenture provided that such debenture shall be
convertible into securities of Newco based on a conversion rate which is
appropriately adjusted consistent with the adjustments with respect to the
exchange of Company Options for Newco Options. The Company and Newco agree to
enter into a supplemental indenture in accordance with the Company Convertible
Debenture indenture in connection with the exchange of such Company
Convertible Debentures.
ARTICLE IV
Non-Tax-Qualified Benefit Plans
4.1 Prior to the Time of the Distribution, the Company and Newco shall (i)
cooperate to amend the First Mississippi Corporation 1986 Deferred Income
Plan, the First Mississippi Corporation 1989 Deferred Compensation Plan for
Outside Directors and the First Mississippi Corporation Benefits Restoration
Plan as may be necessary to provide for the assumption of such Plans by Newco
as set forth in Section 4.2 below, and (ii) take such other steps (consistent
with applicable law and the terms of the affected plans) as may be necessary
to prevent the consummation of the transactions contemplated by this
Agreement, the Distribution Agreement and the Merger Agreement (including the
transfer of employment of any Transferred Employee) from causing, resulting in
or being treated as a termination of employment, cessation of service as a
director or a change of control with respect to such plans.
4.2 Effective as of the Time of Distribution, each of the First Mississippi
Corporation 1986 Deferred Income Plan, the First Mississippi Corporation 1989
Deferred Compensation Plan for Outside Directors and the First Mississippi
Corporation Benefits Restoration Plan shall be transferred from the Company to
Newco and Newco shall assume such plans and (i) succeed the Company as the
plan sponsor, plan administrator, employer or other party under such plan and
any agreements related thereto and be vested with any and all of the powers,
duties, rights and privileges of such plan sponsor, plan administrator,
employer or other party thereunder; and (ii) assume and agree to perform and
discharge all of the duties and obligations of the employer, sponsor and/or
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plan administrator thereunder and to pay, and be solely responsible for all of
the liabilities and obligations of any kind (whether absolute, accrued,
contingent or otherwise) of the employer, sponsor and/or plan administrator
thereunder in respect of, arising under or required to be performed with
respect to the Transferred Employees and Retained Employees under any such
plan, agreement or arrangement.
ARTICLE V
Employee Welfare Benefit Plans
5.1 Prior to the Time of the Distribution, the Company and Newco shall (i)
cooperate to amend the First Mississippi Corporation Life, AD&D, Medical and
Dental Plan; the First Mississippi Corporation Flexible Benefits Plan; and the
First Mississippi Corporation Long-Term Disability Plan as may be necessary to
provide for the assumption by Newco of the liabilities of such plans in
accordance with the provisions set forth below, and (ii) take such other steps
(consistent with applicable law and the terms of the affected plan) as may be
necessary to prevent the consummation of the transactions contemplated by this
Agreement, the Distribution Agreement and the Merger Agreement (including the
transfer of employment of any Transferred Employee) from causing, resulting in
or being treated as a termination of employment with respect to such plans.
5.2 Effective as of the Time of Distribution, Newco shall assume the First
Mississippi Corporation Life, AD&D, Medical and Dental Plan and any existing
retiree health or life benefit plan agreement, plan or trust and, pursuant to
the terms of such plans assume the liability with respect to and honor or
cause its insurance carriers to honor all claims for benefits incurred by (i)
Transferred Employees (or their dependents or beneficiaries) under such plans
at any time, (ii) all other past, present, active or inactive employees or
retirees of the Initial Group (or their dependents or beneficiaries) other
than Retained Employees at any time and (iii) Retained Employees prior to the
Time of Distribution in accordance with the terms of such plans, and without
interruption as a result of the transactions contemplated by this Agreement,
the Distribution Agreement or the Merger Agreement and the Company shall be
relieved of and shall not assume such liability. As soon as administratively
possible after the Time of Distribution, the Company shall transfer all funds
of the Company's plan (including funds for any contributions or premiums due
from the Company or any subsidiaries of the Company which have accrued as of
the Time of Distribution) to the plan.
5.3 Effective as of the Time of Distribution, Newco shall assume the First
Mississippi Corporation Flexible Benefits Plan and pursuant to the terms of
such plan, assume the liability with respect to and honor or cause its
insurance carriers to honor all claims for benefits incurred by (i)
Transferred Employees (or their dependents or beneficiaries) under such plan
at any time, (ii) all other past, present, active or inactive employees of the
Initial Group (or their dependents or beneficiaries) other than Retained
Employees at any time and (iii) Retained Employees prior to the Time of
Distribution in accordance with the terms of such plan, without interruption
as a result of the transactions contemplated by this Agreement, the
Distribution Agreement or the Merger Agreement and the Company shall be
relieved of and shall not assume such liability. As soon as administratively
possible after the Time of Distribution, the Company shall transfer all funds
of the Company's plan (including funds for any contributions or premiums due
from the Company or any subsidiaries of the Company which have accrued as of
the Time of Distribution) to the plan.
5.4 Effective as of the Time of Distribution, Newco shall assume the First
Mississippi Corporation Long-Term Disability Plan and pursuant to the terms of
such plan, assume the liability with respect to and honor or cause its
insurance carriers to honor all claims for benefits incurred by (i)
Transferred Employees (or their dependents or beneficiaries) under such plan
at any time, (ii) all other past, present, active or inactive employees of the
Initial Group (or their dependents or beneficiaries) other than Retained
Employees at any time and (iii) Retained Employees prior to the Time of
Distribution in accordance with the terms of such plan, without interruption
as a result of the transactions contemplated by this Agreement, the
Distribution Agreement or the Merger Agreement and the Company shall be
relieved of and shall not assume such liability.
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ARTICLE VI
Tax-Qualified Defined Contribution Plans
6.1 Prior to the Time of the Distribution, the Company and Newco shall (i)
cooperate to amend each of the First Mississippi Corporation 401(k) Savings
Plan and the First Mississippi Employee Stock Ownership Plan as may be
necessary to provide for the such assumption of such plans by Newco as set
forth below, and (ii) take such other steps (consistent with applicable law
and the terms of the affected plan) as may be necessary to prevent the
consummation of the transactions contemplated by this Agreement, the
Distribution Agreement and the Merger Agreement (including the transfer of
employment of any Transferred Employee) from causing, resulting in or being
treated as a termination of employment with respect to the Transferred
Employees who are participants in such plans.
6.2 Effective as of the Time of Distribution, each of the First Mississippi
Corporation 401(k) Savings Plan and the First Mississippi Employee Stock
Ownership Plan shall be transferred from the Company to Newco (and the Company
shall transfer the related trusts (including funds for any contributions due
from the Company or subsidiaries of the Company which have accrued or that
have been deducted from payroll as of the Time of Distribution) and Newco
shall assume such plans and (i) succeed the Company as the plan sponsor, plan
administrator, employer or other party under such plans and any agreements
related thereto and be vested with any and all of the powers, duties, rights
and privileges of such plan sponsor, plan administrator, employer or other
party thereunder; and (ii) assume and agree to perform and discharge all of
the duties and obligations of the employer, sponsor and/or plan administrator
thereunder and to pay and be solely responsible for all of the liabilities and
obligations of any kind (whether absolute, accrued, contingent or otherwise)
of the employer, sponsor and/or plan administrator thereunder in respect of,
arising under or required to be performed under any such plan, agreement or
arrangement.
6.3 Effective as of the Time of Distribution, each Retained Employee's
account balance in the First Mississippi Corporation 401(k) Savings Plan and
the First Mississippi Employee Stock Ownership Plan shall become fully vested
and non-forfeitable without regard to such Retained Employee's length of
service. As soon as practicable following the Time of Distribution, Newco
shall cause the accounts of Retained Employees in the First Mississippi
Corporation 401(k) Savings Plan and the First Mississippi Employee Stock
Ownership Plan to be distributable to them.
ARTICLE VII
Tax-Qualified Defined Benefit Plans
7.1 Prior to the Time of the Distribution, the Company and Newco shall (i)
cooperate to amend the Retirement Plan for Employees of First Mississippi
Corporation as may be necessary to provide for the assumption of such plans by
Newco as set forth below, (ii) provide that the Retained Employees will cease
to accrue benefits under such plans as of the Time of Distribution and (iii)
take such other steps (consistent with applicable law and the terms of the
affected plan) as may be necessary to prevent the consummation of the
transactions contemplated by this Agreement, the Distribution Agreement and
the Merger Agreement (including the transfer of employment of any Transferred
Employee) from causing, resulting in or being treated as a termination of
employment or a change of control with respect to the Transferred Employees
who are participants in such plan.
7.2 Effective as of the Time of Distribution, each Retained Employee's
accrued benefit under the Retirement Plan for Employees of First Mississippi
Corporation shall become fully vested and nonforfeitable without regard to
such Retained Employee's length of service. Effective as of the Time of
Distribution, the Company shall transfer to Newco and Newco shall assume the
Retirement Plan for Employees of First Mississippi Corporation (and the
Company shall transfer the related trust (including funds for any
contributions or premiums due from the Company or subsidiaries of the Company
which have accrued as of the Time of
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Distribution)). In connection with such transfer and assumption Newco shall
(i) succeed the Company as the plan sponsor, plan administrator, employer or
other party under such plan and any agreements related thereto and be vested
with any and all of the powers, duties, rights and privileges of such plan
sponsor, plan administrator, employer or other party thereunder; and (ii)
assume and agree to perform and discharge all of the duties and obligations of
the employer, sponsor or plan administrator thereunder and to pay, and be
solely responsible for all of the liabilities and obligations of any kind
(whether absolute, accrued, contingent or otherwise) of the employer, sponsor
and/or plan administrator thereunder in respect of, arising under or required
to be performed with respect to the Retained Employees and the Transferred
Employees under such plan.
ARTICLE VIII
Retained Employees
8.1 Rights. The rights of Retained Employees with respect to the periods
following the Time of Distribution will be governed by the Merger Agreement.
ARTICLE IX
Miscellaneous
9.1 Governing Law. This Agreement and the transactions contemplated hereby
shall be construed in accordance with and governed by the internal laws of the
State of Mississippi.
9.2 Entire Agreement. This Agreement constitutes the entire understanding of
the parties hereto with respect to the subject matter hereof, superseding all
negotiations, prior discussions and prior agreements. To the extent a subject
is specifically covered in this Agreement and to the extent any other
agreement is in conflict herewith, this Agreement, if more specific, shall
control.
9.3 Parties In Interest. Neither party may assign its rights or delegate any
of its duties under this Agreement without prior written consent of the other.
This Agreement shall be binding upon and shall inure to the benefit of the
parties hereto and their respective successors and assigns. Nothing contained
in this Agreement, express or implied, is intended to confer upon any third
party any benefits, rights or remedies.
9.4 Effectiveness. This Agreement shall become effective at the Time of
Distribution and may be terminated by the parties at any time prior thereto by
written agreement.
9.5 Reformation and Severability. If any provision of this Agreement shall
be held to be invalid, unenforceable or illegal in any jurisdiction under any
circumstances for any reason, (i) such provision shall bc reformed to the
minimum extent necessary to cause such provision to be valid, enforceable and
legal and preserve the original intent of the parties, or (ii) if such
provision cannot be so reformed, such provision shall be severed from this
Agreement. Such holding shall not affect or impair the validity,
enforceability or legality of such provision in any other jurisdiction or
under any other circumstances. Neither such holding nor such reformation or
severance shall affect or impair the legality, validity or enforceability of
any other provision of this Agreement to the extent that such other provision
is not itself actually in conflict with any applicable law.
9.6 Titles and Heading. All titles and headings have been inserted solely
for the convenience of the parties and are not intended to be a part of this
Agreement or to affect its meaning or interpretation.
9.7 No Reliance. No third party is entitled to rely on any of the
representations, warranties and agreements of the parties contained in this
Agreement. The parties assume no liability to any third party because of any
reliance on the representation, warranties and agreements of the parties
contained in this Agreement.
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IN WITNESS WHEREOF the Parties have caused this Agreement to be executed by
their duly authorized officers as of this day of , 1996.
First Mississippi Corporation
By: _________________________________
Title:
[Newco]
By: _________________________________
Title:
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