Exhibit (c)(3)
[FORM OF EMPLOYMENT AGREEMENT]
Nalco Chemical Company
Xxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
(000) 000-0000
[DATE]
[Executive]
Nalco Chemical Company
Xxx Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Dear [Executive]
Upon completion of the proposed merger (the "Merger") between H2O
Acquisition Co. (the "Purchaser"), a whollyowned subsidiary of Degremont S.A.
(the "Parent"), and Nalco Chemical Company (the "Company"), Parent shall
cause the Company to offer you employment with the Company on the terms and
conditions described in the attached "Terms of Employment Contract between Nalco
Chemical Company and [Executive]," which are incorporated into this letter
agreement (the "Agreement") by reference. By signing this Agreement you hereby
accept employment with the Company on such terms and conditions. This offer of
employment is conditioned upon the completion of the Merger and shall become
effective at the Effective Time (as defined in the Agreement and Plan of Merger
by and among the Parent, Purchaser and the Company (the "Merger Agreement")) of
the Merger.
You, as well as the Parent and Purchaser, agree to enter into a more
definitive employment agreement that reflects these terms and conditions
promptly after the date of this Agreement.
In the event of any inconsistency between the terms of this Agreement and
the terms of the Merger Agreement, the terms of this Agreement will control.
Very truly yours,
Date:______________________________ DEGREMONT S.A.
By:__________________________
Name:
Title:
Date:______________________________ H2O ACQUISITION CO.
By:__________________________
Name:
Title:
Accepted and agreed to:
____________________________
[Executive]
Date: ________________
-2-
1. Settlement of Key Executive Agreements*
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. 3 Times Base Salary >
>
> Payout in cash at time of change in control ("CIC")
. 3 Times Regular Management >
Incentive Plan ("MIP") >
. 3 Times Supplemental MIP > Deferred for three years in cash with interest.
> To vest and be paid at end of three years if
> employed or in event of prior death,
> disability, termination by Company without
> "cause" or by executive for "good reason"
> or retirement on or after age 62
. 97/98 Outstanding > assuming a performance level of 100%
Performance Share Awards > of the target award
. Outstanding Restricted Stock >
including 1995 Performance >
Share Plan >
> Payout in cash at time of CIC
. Stock Options >
>
. 280G Tax Gross-up Payment >
2. Provisions
----------
Duration . Three years
. One-year evergreen after three years
. Six months' notice of non-renewal
Position . Chief Executive Officer for Xx. Xxxxxx; Senior
Executive for other executives
. Responsibilities and duties as assigned by Board
for Xx. Xxxxxx and by the Board and Chief Executive
Officer for other executives
Compensation . Current salary with opportunity for increase
. Compensation opportunities comparable to those
provided to similar senior executives
---------------
* Payments to be excluded from pension and benefit calculations.
. Participation in all incentive and benefit plans
provided to similar senior executives
Retention Payment . Two times sum of salary plus regular target MIP
bonus (as of June 22, 1999) payable in cash if
employed by Company three years from date of CIC;
payment to be excluded from pension and benefit
calculations and from 280G gross-up obligation
Termination Provisions*
. Death, Disability and . Accrued Amounts**
Retirement . Long term incentives in accordance with plan
provisions
. By Company without "Cause" or . Accrued Amounts
Resignation by Executive for . Long term incentives in accordance with plan
"Good Reason"*** provisions
. Two times (for Messrs. Buchholz, Lambe, Xxxxxx,
Xxxxxx and Xxxxxx) and 1.5 times (for Messrs. Brannon,
Burns, Xxxxxx and Xxx) salary plus regular target MIP
bonus; not to exceed age 65
- Payment to be offset by Retention Payment if such
termination occurs within two years of receipt of
Retention Payment
. Additional pension credit equal to three years less
number of years worked from date of CIC
. Welfare benefits continuation for same period
. By Company for "Cause" or . Accrued salary
Resignation without "Good . Unpaid earned amounts
Reason"***
Restrictive Covenants . Non-competition and non-solicitation of customers
and employees during employment and for two years
thereafter
. Perpetual non-disclosure, non-disparagement and
availability for litigation support
Taxes . Full CIC gross-up for current merger (excluding
Retention Payment); for future CIC, full CIC gross-up
(excluding Retention Payment), but only in the event
of termination without "Cause" or resignation for
"Good Reason" following future CIC
Elective Deferral . Flexible elective deferral plan with tax-sheltered
investment alternatives
--------------------
* Applicable both prior and subsequent to any future change in control;
payments to be excluded for pension and benefit calculation purposes.
** Salary and pro rata bonus at target for year of termination plus unpaid
earned amounts.
*** "Good Reason" and "Cause" similar to definition in merger agreement.
Legal Fees and Expenses . Reimbursement of reasonable costs unless actions
found to be in bad faith or frivolous
Settlement of Disputes . Arbitration; injunctive relief
