CHANGE OF CONTROL SEVERANCE AGREEMENT
AGREEMENT by and between Melamine Chemicals, Inc., a Delaware
corporation (the "Company") and____________ (the "Employee"), dated as
of the ____ day of __________, 19__.
The Board of Directors of the Company (the "Board"), has
determined that it is in the best interests of the Company and its
shareholders to assure that the Company will have the continued
dedication of the Employee, notwithstanding the possibility, threat or
occurrence of a Change of Control (as defined below) of the Company.
The Board believes it is imperative to diminish the inevitable
distraction of the Employee by virtue of the personal uncertainties
and risks created by a pending or threatened Change of Control and to
encourage the Employee's full attention and dedication to the Company
currently and in the event of any threatened or pending Change of
Control, and to provide the Employee with compensation and benefits
arrangements upon a Change of Control which ensure that the
compensation and benefits expectations of the Employee will be
satisfied and which are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board has
caused the Company to enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Certain Definitions. (a) The "Effective Date" shall mean the
first date during the Change of Control Period (as defined in Section
1(b)) on which a Change of Control (as defined in Section 2) occurs.
Anything in this Agreement to the contrary notwithstanding, if a
Change of Control occurs and if the Employee's employment with the
Company is terminated prior to the date on which the Change of Control
occurs, and if it is reasonably demonstrated by the Employee that such
termination of employment (i) was at the request of a third party who
has taken steps reasonably calculated to effect a Change of Control or
(ii) otherwise arose in connection with or anticipation of a Change of
Control (in each case, a "Potential Change of Control"), then for all
purposes of this Agreement the "Effective Date" shall mean the date
immediately prior to the date of such termination of employment.
(b) The "Change of Control Period" shall mean the period
commencing on the date hereof and ending on November 15, 19__, unless
otherwise extended by the Company.
2. Change of Control. For the purpose of this Agreement, a
"Change of Control" shall mean:
(a) The acquisition after the date hereof by any individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")) (a
"Person") of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20% or more of either (i) the
then outstanding shares of common stock of the Company (the
"Outstanding Company Common Stock") or (ii) the combined voting power
of the then outstanding voting securities of the Company entitled to
vote generally in the election of directors (the "Outstanding Company
Voting Securities"); provided, however, that the following
acquisitions shall not constitute a Change of Control: (i) any
acquisition directly from the Company, (ii) any acquisition by the
Company, (iii) any acquisition by any employee benefit plan (or
related trust) sponsored or maintained by the Company or any
corporation controlled by the Company or (iv) any acquisition by any
corporation pursuant to a transaction which complies with clauses (i),
(ii) and (iii) of subsection (c) of this Section 2; or
(b) 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 shareholders, was approved by a vote of
at least a majority of the directors then comprising the Incumbent
Board shall be considered as though such individual were a member of
the Incumbent Board, but excluding, for this purpose, any such
individual whose initial assumption of office occurs as a result of an
actual or threatened election contest with respect to the election or
removal of directors or other actual or threatened solicitation of
proxies or consents by or on behalf of a Person other than the Board;
or
(c) Approval by the shareholders of the Company of a
reorganization, merger or consolidation (a "Business Combination"), in
each case, unless, following such Business Combination, (i) all or
substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly,
more than 60% of, respectively, the then outstanding shares of common
stock and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors, as
the case may be, of the corporation resulting from such Business
Combination (including, without limitation, a corporation which as a
result of such transaction owns the Company through one or more
subsidiaries) in substantially the same proportions as their
ownership, immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (ii) no Person (excluding any employee
benefit plan (or related trust) of the Company or such corporation
resulting from such Business Combination) beneficially owns, directly
or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding
voting securities of such corporation except to the extent that such
ownership existed prior to the Business Combination and (iii) at least
a majority of the members of the board of directors of the corporation
resulting from such Business Combination were members of the Incumbent
Board at the time of the execution of the initial agreement, or of the
action of the Board, providing for such Business Combination; or
(d) Approval by the shareholders of the Company of (i) a complete
liquidation or dissolution of the Company or (ii) the sale or other
disposition of all or substantially all of the assets of the Company,
other than to a corporation, with respect to which following such sale
or other disposition, (A) more than 60% of, respectively, the then
outstanding shares of common stock of such corporation and the
combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by all
or substantially all of the individuals and the entities who were the
beneficial owners, respectively, of the Outstanding Company Common
Stock and Outstanding Company Voting Securities immediately prior to
such sale or other disposition in substantially the same proportion as
their ownership, immediately prior to such sale or other disposition,
of the Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be, (B) less than 20% of, respectively,
the then outstanding shares of common stock of such corporation and
the combined voting power of the then outstanding voting securities of
such corporation entitled to vote generally in the election of
directors is then beneficially owned, directly or indirectly, by any
Person (excluding any employee benefit plan (or related trust) of the
Company or such corporation), except to the extent that such Person
owned 20% or more of the Outstanding Company Common Stock or
Outstanding Company Voting Securities prior to the sale or disposition
and (C) at least a majority of the members of the board of directors
of such corporation were members of the Incumbent Board at the time of
the execution of the initial agreement, or of the action of the Board,
providing for such sale or other disposition of assets of the Company
or were elected, appointed or nominated by the Board.
3. Employment Period. The Company hereby agrees to continue the
Employee in its employ and the Employee hereby agrees to remain in the
employ of the Company subject to the terms and conditions of this
Agreement, for the period commencing on the Effective Date and ending
on the second anniversary of such date (the "Employment Period").
4. Terms of Employment. (a) Position and Duties. (i) During
the Employment Period, (A) the Employee's position (including status,
offices, titles and reporting requirements), authority, duties and
responsibilities shall be at least commensurate in all material
respects with the most significant of those held, exercised and
assigned at any time during the 120-day period immediately preceding
the Effective Date and (B) the Employee's services shall be performed
at the location where the Employee was employed immediately preceding
the Effective Date or any office or location less than 35 miles from
such location.
(ii) During the Employment Period, and excluding any periods
of vacation and sick leave to which the Employee is entitled, the
Employee agrees to devote reasonable attention and time during normal
business hours to the business and affairs of the Company and, to the
extent necessary to discharge the responsibilities assigned to the
Employee hereunder, to use the Employee's reasonable best efforts to
perform faithfully and efficiently such responsibilities. During the
Employment Period it shall not be a violation of this Agreement for
the Employee to (A) serve on corporate, civic or charitable boards or
committees, (B) deliver lectures, fulfill speaking engagements or
teach at educational institutions and (C) manage personal investments,
so long as such activities do not significantly interfere with the
performance of the Employee's responsibilities as an employee of the
Company in accordance with this Agreement. It is expressly understood
and agreed that to the extent that any such activities have been
conducted by the Employee prior to the Effective Date, the continued
conduct of such activities (or the conduct of activities similar in
nature and scope thereto) subsequent to the Effective Date shall not
thereafter be deemed to interfere with the performance of the
Employee's responsibilities to the Company.
(b) Compensation. (i) Base Salary. During the Employment
Period, the Employee shall receive an annual base salary ("Annual Base
Salary"), which shall be paid at a monthly rate, at least equal to
twelve times the highest monthly base salary paid or payable,
including any base salary which has been earned but deferred to the
Employee by the Company and its affiliated companies in respect of the
twelve-month period immediately preceding the month in which the
Effective Date occurs. During the Employment Period, the Annual Base
Salary shall be reviewed no more than 12 months after the last salary
increase awarded to the Employee prior to the Effective Date and
thereafter at least annually and shall be first increased no more than
12 months after the last salary increase awarded to the Employee prior
to the Effective Date and thereafter at least annually by the higher
of (x) the average increase (excluding promotional increases) in base
salary awarded to the Employee for each of the three full fiscal years
(annualized in the case of any fiscal year consisting of less than
twelve full months or during which the Employee was employed for less
than twelve months) prior to the Effective Date, and (y) the
percentage increase (excluding promotional increases) in base salary
generally awarded to peer executives of the Company and its affiliated
companies for the year of determination. Any increase in Annual Base
Salary shall not serve to limit or reduce any other obligation to the
Employee under this Agreement. Annual Base Salary shall not be
reduced after any such increase and the term Annual Base Salary as
utilized in this Agreement shall refer to Annual Base Salary as so
increased. As used in this Agreement, the term "affiliated companies"
shall include any company controlled by, controlling or under common
control with the Company.
(ii) Annual Bonus. In addition to Annual Base Salary, the
Employee shall be awarded, for each fiscal year ending during the
Employment Period, an annual bonus (the "Annual Bonus") in cash at
least equal to the executive's target bonus under the Company's Annual
Incentive Compensation Plan, or any comparable bonus under a successor
plan, for the last full fiscal year prior to the Change of Control
(annualized in the event that the Employee was not employed by the
Company for the whole such fiscal year) ( the "Recent Annual Bonus").
Each such Annual Bonus shall be paid no later than the end of the
third month of the fiscal year next following the fiscal year for
which the Annual Bonus is awarded, unless the Employee shall elect to
defer the receipt of such Annual Bonus.
(iii) Incentive, Savings and Retirement Plans. During the
Employment Period, the Employee shall be entitled to participate in
all incentive, savings and retirement plans, practices, policies and
programs applicable generally to other peer executives of the Company
and its affiliated companies, but in no event shall such plans,
practices, policies and programs provide the Employee with incentive
opportunities (measure with respect to both regular and special
incentive opportunities, to the extent, if any, that such distinction
is applicable), savings opportunities and retirement benefit
opportunities, in each case, less favorable, in the aggregate, than
the most favorable of those provided by the Company and its affiliated
companies for the Employee under such plans, practices, policies and
programs as in effect at any time during the 120-day period
immediately preceding the Effective Date or if more favorable to the
Employee, those provided generally at any time after the Effective
Date to other peer executives of the Company and its affiliated
companies.
(iv) Welfare Benefit Plans. During the Employment Period, the
Employee and/or the Employee's family, as the case may be, shall be
eligible for participation in and shall receive all benefits under the
welfare benefit plans, practices, policies and programs provided by
the Company and its affiliated companies (including, without
limitation, medical, prescription, dental, disability, salary
continuance, employee life, group life, accidental death and travel
accident insurance plans and programs) to the extent applicable
generally to other peer executives of the Company and its affiliated
companies, but in no event shall such plans, practices, policies and
programs provide the Employee with benefits which are less favorable,
in the aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Employee at any time during
the 120-day period immediately preceding the Effective Date or, if
more favorable to the Employee, those provided generally at any time
after the Effective Date to other peer executives of the Company and
its affiliated companies.
(v) Expenses. During the Employment Period, the Employee shall
be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Employee in accordance with the most
favorable policies, practices and procedures of the Company and its
affiliated companies in effect for the Employee at any time during the
120-day period immediately preceding the Effective Date or, if more
favorable to the Employee, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
its affiliated companies.
(vi) Fringe Benefits. During the Employment Period, the Employee
shall be entitled to fringe benefits, including, without limitation,
tax and financial planning services, payment of club dues, and if
applicable, use of an automobile and payment of related expenses, in
accordance with the most favorable plans, practices, programs and
policies of the Company and its affiliated companies in effect for the
Employee at any time during the 120-day period immediately preceding
the Effective Date or, if more favorable to the Employee, as in effect
generally at any time thereafter with respect to other peer executives
of the Company and its affiliated companies.
(vii) Office and Support Staff. During the Employment Period,
the Employee shall be entitled to an office or offices of a size and
with furnishings and other appointments, and to exclusive personal
secretarial and other assistance, at least equal to the most favorable
of the foregoing provided to the Employee by the Company and its
affiliated companies at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Employee, as
provided generally at any time thereafter with respect to other peer
executives of the Company and its affiliated companies.
(viii) Vacation. During the Employment Period, the Employee
shall be entitled to paid vacation in accordance with the most
favorable plans, policies, programs and practices of the Company and
its affiliated companies as in effect for the Employee at any time
during the 120-day period immediately preceding the Effective Date or,
if more favorable to the Employee, as in effect generally at any time
thereafter with respect to other peer executives of the Company and
its affiliated companies.
5. Termination of Employment. (a) Death or Disability. The
Employee's employment shall terminate automatically upon the
Employee's death during the Employment Period. If the Company
determines in good faith that the Disability of the Employee has
occurred during the Employment Period (pursuant to the definition of
Disability set forth below), it may give to the Employee written
notice in accordance with Section 12(b) of this Agreement of its
intention to terminate the Employee's employment. In such event, the
Employee's employment with the Company shall terminate effective on
the 30th day after receipt of such notice by the Employee (the
"Disability Effective Date"), provided that, within the 30 days after
such receipt, the Employee shall not have returned to full-time
performance of the Employee's duties. For purposes of this Agreement,
"Disability" shall mean the absence of the Employee from the
Employee's duties with the Company on a full-time basis for 180
consecutive business days as a result of incapacity due to mental or
physical illness which is determined to be total and permanent by a
physician selected by the Company or its insurers and acceptable to
the Employee or the Employee's legal representative (such agreement as
to acceptability not to be withheld unreasonably).
(b) Cause. The Company may terminate the Employee's employment
during the Employment Period for Cause. For the sole and exclusive
purposes of this Agreement, "Cause" shall mean:
(i) the willful and continued failure of the Employee to perform
substantially the Employee's duties with the Company or one of its
affiliates (other than any such failure resulting from incapacity to
physical or mental illness), after a written demand for substantial
performance is delivered to the Employee by the Board or the Chief
Employee Officer of the Company which specifically identifies the
manner in which the Board or Chief Employee Officer believes that the
Employee has not substantially performed the Employee's duties, or
(ii) the willful engaging by the Employee in illegal conduct or
gross misconduct which is materially and demonstrably injurious to the
Company.
For purposes of this provision, no act or failure to act, on the part
of the Employee, shall be considered "willful" unless it is done, or
omitted to be done, by the Employee in bad faith or without reasonable
belief that the Employee's action or omission was in the best
interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or
upon the instructions of the Chief Employee Officer or a senior
officer of the Company or based upon the advice of counsel for the
Company shall be conclusively presumed to be done, or omitted to be
done, by the Employee in good faith and in the best interests of the
Company. The cessation of employment of the Employee shall not be
deemed to be for Cause unless and until there shall have been
delivered to the Employee a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters of the entire
membership of the Board at a meeting of the Board called and held for
such purpose (after reasonable notice is provided to the Employee and
the Employee is given the opportunity, together with counsel, to be
heard before the Board), finding that, in the good faith opinion of
the Board, the Employee is guilty of the conduct described in
subparagraph (i) or (ii) above, and specifying the particulars thereof
in detail.
(c) Good Reason. The Employee's employment may be terminated by
the Employee for Good Reason. For the sole and exclusive purposes of
this Agreement, "Good Reason" shall mean:
(i) the assignment to the Employee of any duties inconsistent in
any respect with the Employee's position (including status, offices,
titles and reporting requirements), authority, duties or
responsibilities as contemplated by Section 4(a) of this Agreement, 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 Employee;
(ii) any failure by the Company to comply with any of the
provisions of Section 4(b) of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by the Company promptly after receipt of notice
thereof given by the Employee;
(iii) the Company's requiring the Employee to be based at any
office or location other than as provided in Section 4(a)(i)(B) hereof
or the Company's requiring the Employee to travel on Company business
to a substantially greater extent than required immediately prior to
the Effective Date;
(iv) any purported termination by the Company of the Employee's
employment otherwise than as expressly permitted by this Agreement; or
(v) any failure by the Company to comply with and satisfy Section
11(c) of this Agreement.
For purposes of this Section 5(c), any good faith determination
of "Good Reason" made by the Employee shall be conclusive.
(d) Notice of Termination. Any termination by the Company for
Cause, or by the Employee for Good Reason, shall be communicated by
Notice of Termination to the other party hereto given in accordance
with Section 12(b) of this Agreement. For purposes of this Agreement,
a "Notice of Termination" means a written notice which (i) indicates
the specific termination provision in this Agreement relied upon, (ii)
to the extent applicable, sets forth in reasonable detail the facts
and circumstances claimed to provide a basis for termination of the
Employee's employment under the provision so indicated and (iii) if
the Date of Termination (as defined below) is other than the date of
receipt of such notice, specifies the termination date (which date
shall be not more than thirty days after the giving of such notice).
The failure by the Employee or the Company to set forth in the Notice
of Termination any fact or circumstance which contributes to a showing
of Good Reason or Cause shall not waive any right of the Employee or
the Company, respectively, hereunder or preclude the Employee or the
Company, respectively, from asserting such fact or circumstance in
enforcing the Employee's or the Company's rights hereunder.
(e) Date of Termination. "Date of Termination" means (i) if the
Employee's employment is terminated by the Company for Cause, or by
the Employee for Good Reason, the date of receipt of the Notice of
Termination or any later date specified therein, as the case may be,
(ii) if the Employee's employment is terminated by the Company other
than for Cause or Disability, the Date of Termination shall be the
date on which the Company notifies the Employee of such termination
and (iii) if the Employee's employment is terminated by reason of
death or Disability, the Date of Termination shall be the date of
death of the Employee or the Disability Effective Date, as the case
may be.
6. Obligations of the Company upon Termination. (a) Good Reason
Other than for Cause, Death or Disability. If, during the Employment
Period, the Company shall terminate the Employee's employment other
than for Cause or Disability or the Employee shall terminate
employment for Good Reason and if on the Date of Termination the
executive has at least one year of service with the Company:
(i) the Company shall pay to the Employee in a lump sum in cash
within 30 days after the Date of Termination the aggregate of the
following amounts:
A. the sum of (1) the Employee's Annual Base Salary through the
Date of Termination to the extent not theretofore paid, (2) the
product of (x) the higher of (I) the Recent Annual Bonus and (II)
the Annual Bonus paid or payable, including any bonus or portion
thereof which has been earned but deferred (and annualized for any
fiscal year consisting of less than twelve full months or during
which the Employee was employed for less than twelve full months),
for the most recently completed fiscal year during the Employment
Period, if any (such higher amount being referred to as the
"Highest Annual Bonus") and (y) a fraction, the numerator of which
is the number of days in the current fiscal year through the Date
of Termination, and the denominator of which is 365 and (3) any
compensation previously deferred by the Employee (together with any
accrued interest or earnings thereon) and any accrued vacation pay,
in each case to the extent not theretofore paid (the sum of the
amounts described in clauses (1), (2) and (3) shall be hereinafter
referred to as the "Accrued Obligations"); and
B. the amount equal to the sum of (x) the Employee's Annual Base
Salary and (y) the Highest Annual Bonus; and
C. an amount equal to the difference between (a) the actuarial
equivalent of the benefit (utilizing actuarial assumptions no less
favorable to the Employee than those in effect under the Retirement
Plan (as defined below) immediately prior to the Effective Date,
except as specified below with respect to increases in base salary
and annual bonus) under or the qualified retirement plan in which
the Employee participates (the "Retirement Plan") and any excess or
supplemental retirement plan in which the Employee participates
(together, the "SERP") which the Employee would receive if the
Employee's employment continued for two years after the Date of
Termination assuming for this purpose that all accrued benefits are
fully vested, and, assuming the (1) the Employee's base salary
increased in each of the two years by the amount required by
Section 4(b)(i) had the Employee remained employed, and (2) the
Employee's annual bonus (annualized for any fiscal year consisting
of less than twelve full months or during which the Employee was
employed for less than twelve full months) in each of the two years
bears the same proportion to the Employee's base salary in such
year or fraction thereof as it did for the last full year prior to
the Date of Termination, and (b) the actuarial equivalent of the
Employee's actual benefit (paid or payable), if any, under the
Retirement Plan and the SERP as of the Date of Termination;
(ii) for two years after the Employee's Date of Termination, or
such longer period as may be provided by the terms of the
appropriate plan, program, practice or policy, the Company shall
continue benefits to the Employee and/or the Employee's family at
least equal to those which would have been provided to them in
accordance with the plans, programs, practices and policies
described in Section 4(b)(iv) of this Agreement if the Employee's
employment had not been terminated in accordance with the most
favorable plans, practices, programs or policies of the Company and
its affiliated companies applicable generally to other peer
executives and their families during the 120-day period immediately
preceding the Effective Date or, if more favorable to the Employee,
as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies and
their families, provided, however, that if the Employee becomes
reemployed with another employer and is eligible to receive medical
or other welfare benefits under another employer provided plan, the
medical and other welfare benefits described herein shall be
secondary to those provided under such other plan during such
applicable period of eligibility. For purposes of determining
eligibility (but not the time of commencement of benefits) of the
Employee for retiree benefits pursuant to such plans, practices,
programs and policies, the Employee shall be considered to have
remained employed until two years after the Date of Termination and
to have retired on the last day of such period;
(iii) the Company shall, at its sole expense as incurred,
provide the Employee with outplacement services the scope and
provider of which shall be selected by the Employee in his sole
discretion; and
(iv) to the extent not theretofore paid or provided, the Company
shall timely pay or provide to the Employee any other amounts or
benefits required to be paid or provided or which the Employee is
eligible to receive under any plan, program, policy or practice or
contract or agreement of the Company and its affiliated companies
(such other amounts and benefits shall be hereinafter referred to
as the "Other Benefits").
(b) Death. If the Employee's employment is terminated by reason
of the Employee's death during the Employment Period, this Agreement
shall terminate without further obligations to the Employee's legal
representatives under this Agreement, other than for payment of
Accrued Obligations and the timely payment or provision of Other
Benefits. Accrued Obligations shall be paid to the Employee's estate
or beneficiary, as applicable, in a lump sum in cash within 30 days of
the Date of Termination. With respect to the provision of Other
Benefits, the term Other Benefits as utilized in this Section 6(b)
shall include, without limitation, and the Employee's estate and/or
beneficiaries shall be entitled to receive, benefits at least equal to
the most favorable benefits provided by the Company and affiliated
companies to the estates and beneficiaries of peer executives of the
Company and such affiliated companies under such plans, programs,
practices and policies relating to death benefits, if any, as in
effect with respect to other peer executives and their beneficiaries
at any time during the 120-day period immediately preceding the
Effective Date or, if more favorable to the Employee's estate and/or
the Employee's beneficiaries, as in effect on the date of the
Employee's death with respect to other peer executives of the Company
and its affiliated companies and their beneficiaries.
(c) Disability. If the Employee's employment is terminated by
reason of the Employee's Disability during the Employment Period, this
Agreement shall terminate without further obligations to the Employee,
other than for payment of Accrued Obligations and the timely payment
or provision of Other Benefits. Accrued Obligations shall be paid to
the Employee in a lump sum in cash within 30 days of the Date of
Termination. With respect to the provision of Other Benefits, the
term Other Benefits as utilized in this Section 6(c) shall include,
and the Employee shall be entitled after the Disability Effective Date
to receive, disability and other benefits at least equal to the most
favorable of those generally provided by the Company and its
affiliated companies to disabled executives and/or their families in
accordance with such plans, programs, practices and policies relating
to disability, if any, as in effect generally with respect to other
peer executives and their families at any time during the 120-day
period immediately preceding the Effective Date or, if more favorable
to the Employee and/or the Employee's family, as in effect at any time
thereafter generally with respect to other peer executives of the
Company and its affiliated companies and their families.
(d) Cause; Other than for Good Reason. If the Employee's
employment shall be terminated for Cause during the Employment Period,
this Agreement shall terminate without further obligations to the
Employee other than the obligation to pay to the Employee (x) his
Annual Base Salary through the Date of Termination, (y) the amount of
any compensation previously deferred by the Employee, and (z) Other
Benefits, in each case to the extent theretofore unpaid. If the
Employee voluntarily terminates employment during the Employment
Period, excluding termination for Good Reason, this Agreement shall
terminate without further obligations to the Employee, other than for
Accrued Obligations and the timely payment or provision of Other
Benefits. In such case, all Accrued Obligations shall be paid to the
Employee in a lump sum in cash within 30 days of the Date of
Termination.
7. Non-exclusivity of Rights. Nothing in this Agreement shall
prevent or limit the Employee's continuing or future participation in
any plan, program, policy or practice provided by the Company or any
of its affiliated companies and for which the Employee may qualify,
nor shall anything herein limit or otherwise affect such rights as the
Employee may have under any contract or agreement with the Company or
any of its affiliated companies. Amounts which are vested benefits or
which the Employee is otherwise entitled to receive under any plan,
policy, practice or program of or any contract or agreement with the
Company or any of its affiliated companies at or subsequent to the
Date of Termination shall be payable in accordance with such plan,
policy, practice or program or contract or agreement except as
explicitly modified by this Agreement.
8. Full Settlement. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its
obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action
which the Company may have against the Employee or others. In no
event shall the Employee be obligated to seek other employment or take
any other action by way of mitigation of the amounts payable to the
Employee under any of the provisions of this agreement and such
amounts shall not be reduced whether or not the Employee obtains other
employment. The Company agrees to pay as incurred, to the full extent
permitted by law, all legal fees and expenses which the Employee may
reasonably incur as a result of any contest (regardless of the outcome
thereof) by the Company, the Employee or others of the validity or
enforceability of, or liability under, any provision of this Agreement
or any guarantee of performance thereof (including as a result of any
contest by the Employee about the amount of any payment pursuant to
this Agreement), plus in each case interest on any delayed payment at
the applicable Federal rate provided for in Section 7872(f)(2)(A) of
the Internal Revenue Code of 1986, as amended (the "Code").
9. Certain Reduction of Payments by the Company.
(a) Anything in this Agreement to the contrary notwithstanding,
in the event it shall be determined that any payment or distribution
by the Company to or for the Employee's benefit (whether paid or
payable or distributed or distributable pursuant to the terms of this
Agreement or otherwise) (a "Payment") would be nondeductible by the
Company for Federal income tax purposes because of Section 280G of the
Code, then the aggregate present value of amounts payable or
distributable to or for your benefit pursuant to this Agreement (such
payments or distributions pursuant to this Agreement are hereinafter
referred to as "Agreement Payments") shall be reduced (but not below
zero) to the Reduced Amount. The "Reduced Amount" shall be an amount
expressed in present value which maximizes the aggregate present value
of Agreement Payments without causing any Payment to be nondeductible
by the Company because of Section 280G of the Code. For purposes of
this Section 9, present value shall be determined in accordance with
Section 280G(d)(4) of the Code.
(b) All determinations required to be made under this Section 9
shall be made at the Company's expense by a nationally recognized
accounting firm acceptable to the Employee (the "Accounting Firm")
which shall provide detailed supporting calculations both to the
Company and the Employee within 15 business days of the Date of
Termination or such earlier time as is requested by the Company. Any
such determination by the Accounting Firm shall be binding upon the
Company and the Employee. The Employee shall determine which and how
much of the Agreement Payments (or, at the election of the Employee,
other payments) shall be eliminated or reduced consistent with the
requirements of this Section 9, provided that, if the Employee does
not make such determination within ten business days of the receipt of
the calculations made by the Accounting Firm, the Company shall elect
which and how much of the Agreement Payments shall be eliminated or
reduced consistent with the Requirements of this Section 9 and shall
notify the Employee promptly of such election. Within five business
days thereafter, the Company shall pay the Employee or distribute to
or for the Employee's benefit such amounts as are then due to the
Employee under this Agreement.
(c) As a result of the uncertainty in the application of Section
280G of the Code at the time of the initial determination by the
Accounting Firm hereunder, it is possible that Agreement Payments will
have been made by the Company which should not have been made
("Overpayment") or that additional Agreement Payments which will have
not been made by the Company could have been made ("Underpayment"), in
each case, consistent with the calculations required to be made
hereunder. In the event that the Accounting Firm determines that an
Overpayment has been made, any such Overpayment shall be treated for
all purposes as a loan to the Employee which the Employee shall repay
to the Company together with interest at the applicable Federal rate
provided for in Section 7872(f)(2) of the Code. In the event that the
Accounting Firm determines that an Underpayment has occurred, any such
Underpayment shall be promptly paid by the Company to or for the
benefit of the Employee together with interest at the applicable
Federal rate provided for in Section 7872(f)(2) of the Code.
10. Confidential Information. The Employee shall hold in a
fiduciary capacity for the benefit of the Company all secret or
confidential information, knowledge or data relating to the Company or
any of its affiliated companies and their respective businesses, which
shall have been obtained by the Employee during the Employee's
employment by the Company or any of its affiliated companies and which
shall not be or become public knowledge (other than by acts by the
Employees or representatives of the Employee in violation of this
Agreement). After termination of the Employee's employment with the
Company, the Employee shall not, without the prior written consent of
the Company or as may otherwise be required by law or legal process,
communicate or divulge any such information, knowledge or data to
anyone other than the Company and those designated by it. In no event
shall an asserted violation of the provisions of this Section 10
constitute a basis for deferring or withholding any amounts otherwise
payable to the Employee under this Agreement.
11. Successors. (a) This Agreement is personal to the Employee
and without the prior written consent of the Company shall not be
assignable by the Employee otherwise than by will or the laws of
descent and distribution. This Agreement shall inure to the benefit
of and be enforceable by the Employee's legal representatives.
(b) This Agreement shall inure to the benefit of and be binding
upon the Company and its successors and assigns.
(c) The Company will 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 to
assume expressly 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. As used in this
Agreement, "Company" shall mean the Company as hereinbefore defined
and any successor to its business and/or assets as aforesaid which
assumes and agrees to perform this Agreement by Operation of law, or
otherwise.
12. Miscellaneous. (a) This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware,
without reference to principles of conflict of laws. The captions of
this Agreement are not part of the provisions hereof and shall have no
force or effect. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto
or their respective successors and legal representatives.
(b) All notices and other communications hereunder shall be in
writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage
prepaid, addressed as follows:
If to the Employee:
If to the Company:
Melamine Chemicals, Inc.
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Attention: Chief Financial Officer
or to such other address as either party shall have furnished to the
other in writing in accordance herewith. Notice and communications
shall be effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other
provision of this Agreement.
(d) The Company may withhold from any amounts payable under this
Agreement such Federal, state, local or foreign taxes as shall be
required to be withheld pursuant to any applicable law or regulation.
(e) The Employee's or the Company's failure to insist upon strict
compliance with any provision hereof or any other provision of this
Agreement or the failure to assert any right the Employee or the
Company may have hereunder, including, without limitation, the right
of the Employee to terminate employment for Good Reason pursuant to
Sections 5(c)(i)-(v) of this Agreement, shall not be deemed to be a
waiver of such provision or right or any other provision or right of
this Agreement.
(f) The Employee and the Company acknowledge that, except as may
otherwise be provided under any other written agreement between the
Employee and the Company, the employment of the Employee by the
Company is "at will" and, prior to the Effective Date, the Employee's
employment may be terminated by either the Employee or the Company at
any time prior to the Effective Date. Moreover, if prior to the
Effective Date, the Employee's employment with the Company terminates,
except in connection with a Potential Change of Control, then the
Employee shall have no further rights under this Agreement. From and
after the Effective Date this Agreement shall supersede any other
agreement between the parties with respect to the subject matter
hereof.
IN WITNESS WHEREOF, the Employee has hereunto set the Employee's
hand and, pursuant to the authorization from its Board of Directors,
the Company has caused these presents to be executed in its name on
its behalf, all as of the day and year first above written.
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Employee
MELAMINE CHEMICALS, INC.
By:
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President and Chief Executive Officer
