Exhibit (a)10.2
EMPLOYMENT AGREEMENT
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THIS AGREEMENT by and between Air Products and Chemicals, Inc., a Delaware
corporation (hereinafter "Air Products" or the "Company"), with its principal
office in Allentown, Pennsylvania, and Xxxx X. Xxxxxx (the "Executive"), an
individual residing at 0000 Xxxx Xxxx, Xxxx Xxxxx, Xxxxxxxx 00000, dated and
effective as of April 18, 2002.
WHEREAS, the Board of Directors of the Company (the "Board"), upon the
recommendation of the Management Development and Compensation Committee of the
Board (the "Committee"), has determined that it is in the best interests of the
Company and its shareholders to employ the Executive as the Chief Financial
Officer of the Company, and the Executive desires to serve in that capacity;
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. Employment Period. The Company shall employ the Executive, and the
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Executive shall serve the Company, on the terms and conditions set forth in this
Agreement, for the period beginning on or before June 1, 2002 (the "Employment
Date") and ending on May 31, 2007 (the "Employment Period"). The Employment
Period shall automatically renew beginning on June 1, 2007, for periods of one
year unless one party gives written notice to the other, at least 60 days prior
to the end of the initial or any one-year renewal period, that the Agreement
shall not be further extended. In addition, the Executive's employment may be
terminated as provided below in Section 4.
2. Position and Duties.
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(a) During the Employment Period, the Executive shall be employed as the
Chief Financial Officer of the Company. The Executive shall report to the Chief
Executive Officer of the Company (the "CEO") and perform such duties for the
Company as are related typically to the office of chief financial officer in the
manner reasonably directed by the CEO, in his sole discretion.
(b) During the Employment Period, and excluding any periods of vacation
and absence due to intermittent illness to which the Executive is entitled, and
services on corporate, civic or charitable boards or committees not
significantly interfering with the performance of his responsibilities to the
Company, the Executive shall devote his full time and attention during normal
business hours to the business and affairs of the Company and the Executive
shall use reasonable efforts to carry out all duties and responsibilities
assigned to him faithfully and efficiently.
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3. Compensation.
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(a) Base Salary. During the Employment Period, the Executive shall
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receive an annual base salary of $450,000, payable in accordance with the
regular payroll practices of the Company. The Executive's base salary shall be
reviewed on October 1, 2003.
(b) Initial Bonus and Stock Awards. The Executive shall be paid an
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initial bonus of $150,000 which will be included in Executive's first regular
pay cycle after employment, subject to normal withholding and employment taxes;
and shall be granted non-statutory stock options and deferred stock units under
the Company's Long-Term Incentive Plan in accordance with and subject to the
terms and conditions set forth in the form of awards agreement appended hereto
as Exhibit A. In addition, the Executive shall be eligible to receive, for the
portion of the Employment Period ending with the Company's fiscal year 2002 on
30 September 2002, a minimum bonus of $100,000 pursuant to the Company's Annual
Incentive Plan.
(c) Other Benefits. During the Employment Period: (i) the Executive
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shall be entitled to participate in all incentive, savings and retirement plans,
practices, policies and programs of the Company to at least the same extent as
other senior executives of the Company holding positions at the salary grade
applicable to Executive's position; (ii) the Executive and/or the Executive's
family, as the case may be, shall be eligible for participation, and shall
receive all benefits under, all welfare benefit plans, practices, policies and
programs provided by the Company (including, without limitation, medical,
prescription, dental, disability, salary continuation, employee life insurance,
group life insurance, accidental death and travel accident insurance plans and
programs) to at least the same extent as other senior executives of the Company;
and (iii) the Executive shall be entitled to, and the Company shall provide the
Executive with, five weeks of paid vacation during each calendar year, the
annual stipend for financial counseling, estate planning and tax preparation
provided for other senior executives, currently $8,000 annually, and the
Company's change in control arrangements applicable to other senior executives
as in effect from time to time.
(d) Expenses. During the Employment Period, the Executive shall be
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entitled to receive prompt reimbursement for all reasonable expenses incurred by
the Executive in carrying out the Executive's duties under this Agreement,
provided that the Executive complies with the generally applicable policies,
practices and procedures of the Company for submission of expense reports,
receipts, or similar documentation of such expenses.
(e) (i) Special Retirement Benefit. In addition to benefits earned
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under any qualified or nonqualified retirement plan or arrangement maintained by
the Company, the Executive shall earn a supplemental normal retirement benefit,
payable from the Company's general assets, equal to (1) minus the sum of (2) and
(3) (the "Pension Enhancement"), where:
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(1) is the normal retirement benefit that the Executive would have
received under the Air Products and Chemicals, Inc. Pension Plan for
Salaried Employees and Supplementary Pension Plan as each may be
amended from time to time (together, the "Pension Plans"), if the
Credited Service as defined in the Pension Plans included Executive's
service while employed by Motorola, Inc. ("Motorola") beginning on
May 1, 1973.
(2) is the normal retirement benefit earned by the Executive under
the Pension Plans; and
(3) is the normal retirement benefit earned by the Executive under
any qualified and/or nonqualified defined benefit plan(s) sponsored by
Motorola. Any benefit payable in the form of a lump sum will be
converted to an annuity based on an interest rate of 6% and the 1983
Unisex Group Annuity Mortality Tables.
The Executive shall earn a nonforfeitable right to the Pension Enhancement on
the fifth anniversary of the Employment Date or on an earlier Date of
Termination to the extent and as provided in Section 5. When the Executive earns
a nonforfeitable right to all or some of the Pension Enhancement under the terms
of this Agreement, Vesting Service as defined in the Pension Plans shall include
Executive's service while employed by Motorola.
(ii) Notwithstanding the provisions of subsection (i), the
Pension Enhancement calculated under subsection (i) shall be paid in the form,
and at the time, elected by the Executive with respect to his benefit and/or as
provided for under the Supplementary Pension Plan; provided, however, that any
such Pension Enhancement benefit payment(s) shall be actuarially equivalent,
determined using the actuarial assumptions set forth in the Supplementary
Pension Plans for the corresponding calculations of the retirement benefit due
under the Supplementary Pension Plan, to the supplemental normal retirement
benefit calculated under subsection (i).
(iii) In the event Executive dies before the commencement of
benefits under this paragraph but after earning a nonforfeitable right to the
Pension Enhancement his surviving spouse shall receive the pre-retirement
spousal benefit associated with the Pension Enhancement, calculated and payable
in the same manner as the pre-retirement spousal benefit under the Supplementary
Pension Plan and with the corresponding pre-retirement spousal benefit offsets
for the calculation in subsection (i).
(iv) For purposes of subsections (i) and (ii), "normal retirement
benefit" shall mean a monthly benefit payable in the form of a single life
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annuity commencing on the first day of the month coincident with or next
following the date on which the Executive attains age 65.
(f) Temporary Living and Moving Expenses. The Company shall provide
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temporary housing for the Executive in a suitable residence in the vicinity of
its offices and shall pay the cost of the Executive commuting between such
residence and his current residence in Long Grove, Illinois until the Executive
relocates his residence to the vicinity of the Company's corporate headquarters
located in Allentown, Pennsylvania, on or before September 1, 2003. The Company
shall also reimburse Executive for moving and home seeking and buying expenses
incurred by Executive in accordance with its relocation policy for other senior
executives including the Full Home Sale Assistance Program as to which the
Company agrees that the stated limitations as to property value are waived for
the Executive.
4. Termination of Employment.
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(a) Death or Disability. The Executive's employment and the Employment
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Period shall terminate automatically upon the Executive's death or long term
disability during the Employment Period. "Disability" shall be as defined under
the Company's Long Term Disability Plan.
(b) By the Company. The Company may terminate the Executive's
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employment during the Employment Period for Cause or without Cause. "Cause"
means
(i) the willful and continued failure by the Executive to
substantially perform his duties with the Company (other than any such failure
resulting from his incapacity due to physical or mental illness or injury or any
such actual or anticipated failure after the issuance by the Executive of a
Notice of Termination for Good Reason) over a period of not less than thirty
days after a demand for substantial performance is delivered to the Executive by
the Board which identifies the manner in which the Board believes that the
Executive has not substantially performed his duties; or
(ii) the willful misconduct of the Executive materially and
demonstrably injurious to the Company (including, without limitation, any breach
by the Executive of Section 8 of this Agreement); provided that no act or
failure to act on the Executive's part will be considered willful if done, or
omitted to be done, by him in good faith and with reasonable belief that his
action or omission was in the best interest of the Company.
(c) Good Reason. The Executive may terminate employment for Good Reason
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or without Good Reason. "Good Reason" means:
(i) the assignment to the Executive of any duties inconsistent in
any material respect with paragraph (a) of Section 2 of this Agreement; or
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(ii) material failure by the Company to comply with any provision
of Section 3 of this Agreement, other than an isolated, insubstantial or
inadvertent failure that is not taken in bad faith and is remedied by the
Company within 30 days after receipt of written notice thereof from the
Executive.
A termination of employment by the Executive for Good Reason shall
be effectuated by giving the Company written notice ("Notice of Termination for
Good Reason") of the termination, setting forth in reasonable detail the
specific conduct of the Company that constitutes Good Reason and the specific
provision(s) of this Agreement on which the Executive relies. A termination of
employment by the Executive for Good Reason shall be effective on the fifth
business day following the date when the Notice of Termination for Good Reason
is given, unless the notice sets forth a later date (which date shall in no
event be later than 30 days after the notice is given). A termination of the
Executive's employment by the Executive without Good Reason shall be effected by
giving the Company at least 30 days' advance written notice of the termination.
(d) Date of Termination. The "Date of Termination" means the date of the
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Executive's death, the date of the Executive's Disability, the date the
termination of the Executive's employment by the Company for Cause or without
Cause or by the Executive for Good Reason or without Good Reason, as the case
may be, is effective. The Employment Period shall end on the Date of
Termination.
5. Obligations of the Company upon Termination.
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(a) By the Company Other Than for Cause; or By the Executive for Good
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Reason. If, during the Employment Period, the Company terminates the Executive's
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employment (other than for Cause) or the Executive terminates employment for
Good Reason, the Executive's right to the accrued Pension Enhancement calculated
based on the Executive's service to the Date of Termination shall become
nonforfeitable; and the Executive shall be entitled to a lump sum payment
(before taxes) equal to one year's current base salary, plus a 100% target bonus
for Executive's salary grade (currently 55% of base salary). The Company shall
also pay to the Executive, in a lump sum in cash within 30 days after the Date
of Termination, the Executive's accrued but unpaid cash compensation (the
"Accrued Obligations"), which shall include but not be limited to, (1) the
Executive's base salary through the Date of Termination that has not yet been
paid and an amount representing a 100% target bonus for the Executive's salary
grade for the year of termination, multiplied by 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 (the "Annual Bonus Amount"),
(2) any accrued but unpaid vacation pay, and (3) similar unpaid items that have
accrued or to which the Executive has become entitled as of the Date of
Termination, including declared but unpaid bonuses and unreimbursed employee
business expenses; provided, however, that the Company's obligation to make any
payments under this paragraph(a) to the extent any such payment shall not have
accrued as of the day before the Date of Termination shall also be
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conditioned upon the Executive's execution, and non-revocation, of a written
release, substantially in the form attached hereto as Annex 1 (the "Release"),
of any and all claims against the Company and all related parties with respect
to all matters arising out of the Executive's employment by the Company or the
termination thereof (other than any entitlements under the terms of this
Agreement to indemnification or under any other plans or programs of the Company
in which the Executive participated and under which the Executive has accrued
and is due a benefit). As further consideration for the Executive's Release, the
Company shall execute a release in favor of Executive, on the date the Release
becomes irrevocable, substantially in the form attached hereto as Annex 2.
(b) Death or Disability. If the Executive's employment is terminated by
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reason of the Executive's death or Disability during the Employment Period, the
Company shall pay the Accrued Obligations to the Executive or the Executive's
estate or legal representative, as applicable, in a lump sum in cash within
30 days after the Date of Termination. In such event, the Company shall have no
further obligations under this Agreement or otherwise to or with respect to the
Executive other than with respect to the accrued Pension Enhancement, which,
subject to and conditioned upon the execution and non-revocation of a Release,
shall become nonforfeitable and shall be calculated on the basis of the
Executive's service to the Date of Termination and as provided under Section
3(e) of this Agreement; and for any entitlements under the terms of any other
plans or programs of the Company in which the Executive participated and under
which the Executive has accrued and is due a benefit.
(c) By the Company for Cause; By the Executive Other than for Good
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Reason. If the Executive's employment is terminated by the Company for Cause
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during the Employment Period, or the Executive voluntarily terminates employment
during the Employment Period, other than for Good Reason, the Company shall pay
the Executive the Executive's base salary through the Date of Termination that
has not been paid and the amount of any declared but unpaid bonuses, accrued but
unpaid vacation pay, and unreimbursed employee business expenses, and the
Company shall have no further obligations under this Agreement or otherwise to
or with respect to the Executive other than for any entitlements under the terms
of any other plans or programs of the Company in which the Executive
participated and under which the Executive has accrued or become entitled to a
benefit; provided however, that, in the event of such voluntary termination by
the Executive where the Date of Termination occurs on or after the third
anniversary of the Employment Date, and subject to and conditioned on the
execution and non-revocation of the Release, the Executive shall have a
nonforfeitable right to 50% of the Pension Enhancement calculated on the basis
of the Executive's service to the Date of Termination.
6. Non-exclusivity of Rights. Nothing in this Agreement shall prevent or
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limit the Executive's continuing or future participation in any plan, program,
policy or practice provided by the Company or any of its affiliated companies
for which the Executive may qualify. Vested benefits and other amounts that the
Executive is
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otherwise entitled to receive on or after the Date of Termination under any
plan, policy, practice or program of, or any contract or agreement with, the
Company or any of its affiliated companies shall be payable in accordance with
such plan, policy, practice, program, contract or agreement, as the case may be,
except as explicitly modified by this Agreement.
7. No Mitigation. In no event shall the Executive be obligated to seek
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other employment or take any other action by way of mitigation of the amounts
payable to the Executive under any of the provisions of this Agreement and such
amounts shall not be reduced, regardless of whether the Executive obtains other
employment.
8. Confidential Information; Non-solicitation; Non-competition.
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(a) The Executive agrees and acknowledges that by reason of his
employment by and service to the Company, he will have access to confidential
information of the Company and its affiliates, and, therefore, he agrees to be
subject to the Employee Patent, Copyright and Confidential Information Agreement
of the Company appended hereto as Exhibit B.
(b) The Executive acknowledges that the Company is generally engaged in
business throughout the world. During the Executive's employment by the Company
and for two years after the Date of Termination or the expiration of the final
Employment Period, the Executive agrees that he will not, unless acting with the
prior written consent of the Company, directly or indirectly, own, manage,
control, or participate in the ownership, management or control of, or be
employed or engaged by, or otherwise affiliated or associated with, as an
officer, director, employee, consultant, independent contractor or otherwise,
any other corporation, partnership, proprietorship, firm, association or other
business entity, or otherwise engage in any business, which is engaged in any
manner anywhere in any business which , as of the Date of Termination or
expiration of the final Employment Period, as applicable, is engaged in by the
Company, has been reviewed with the CEO for development to be owned or managed
by the Company, and/or has been divested by the Company but as to which the
Company has an obligation to refrain from involvement, but only for so long as
such restriction applies to the Company; provided, however, that the ownership
of not more than 5% of the equity of a publicly traded entity shall not be
deemed to be a violation of this paragraph.
(c) The Executive also agrees that he will not, directly or indirectly,
during the period described in paragraph (b), induce any person who is an
employee, officer, director, or agent of the Company, or any subsidiary or
affiliate, to terminate such relationship, or employ, assist in employing or
otherwise be associated in business with any present or former employee or
officer of the Company or of any subsidiary or affiliate of the Company,
including without limitation those who commence such positions with the Company
or any such subsidiary or affiliate after the Date of Termination.
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(d) For the purposes of this Section 8, the term "Company" shall be
deemed to include Air Products and the subsidiaries and affiliates of Air
Products.
(e) The Executive acknowledges and agrees that the restrictions
contained in this Section 8 are reasonable and necessary to protect and preserve
the legitimate interests, properties, goodwill and business of the Company and
its subsidiaries and affiliates, that the Company would not have entered into
this Agreement in the absence of such restrictions and that irreparable injury
will be suffered by the Company should the Executive breach the provisions of
this Section. The Executive represents and acknowledges that (i) the Executive
has been advised by the Company to consult the Executive's own legal counsel in
respect of this Agreement, and (ii) that the Executive has had full opportunity,
prior to execution of this Agreement, to review thoroughly this Agreement with
the Executive's counsel.
(f) The Executive further acknowledges and agrees that a breach of the
restrictions in this Section 8 will not be adequately compensated by monetary
damages. The Executive agrees that the Company shall be entitled to
(i) preliminary and permanent injunctive relief, without the necessity of
proving actual damages, or posting of a bond, (ii) an equitable accounting of
all earnings, profits and other benefits arising from any violation of this
Section 8, and (iii) enforce the terms, including requiring forfeitures, under
other plans, programs and agreements under which the Executive has been granted
a benefit contingent on a covenant similar to those contained in this Section 8,
which rights shall be cumulative and in addition to any other rights or remedies
to which the Company may be entitled. In the event that the provisions of this
Section 8 should ever be adjudicated to exceed the limitations permitted by
applicable law in any jurisdiction, it is the intention of the parties that the
provision shall be amended to the extent of the maximum limitations permitted by
applicable law, that such amendment shall apply only within the jurisdiction of
the court that made such adjudication and that the provision otherwise be
enforced to the maximum extent permitted by law.
(g) If the Executive breaches his obligations under this Section 8, he
agrees that suit may be brought, and that he consents to personal jurisdiction,
in the United States District Court for the Eastern District of Pennsylvania, or
if such court does not have jurisdiction or will not accept jurisdiction, in any
court of general jurisdiction in Allentown, Pennsylvania; consents to the
non-exclusive jurisdiction of any such court in any such suit, action or
proceeding; and waives any objection which he may have to the laying of venue of
any such suit, action or proceeding in any such court. The Executive also
irrevocably and unconditionally consents to the service of any process,
pleadings, notices or other papers.
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9. Successors.
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(a) This Agreement is personal to the Executive and, without the prior
written consent of the Company, shall not be assignable by the Executive
otherwise than by will or the laws of descent and distribution. This Agreement
shall inure to the benefit of and be enforceable by the Executive'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 shall 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 expressly to assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would have been required to perform it if no such succession had taken
place. As used in this Agreement, "Company" shall mean both the Company as
defined above and any such successor that assumes and agrees to perform this
Agreement, by operation of law or otherwise.
10. Arbitration. The Company and the Executive mutually consent to the
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resolution by arbitration, in accordance with the National Rules for the
Resolution of Employment Disputes of the American Arbitration Association, to be
held in Allentown, Pennsylvania, of all claims or controversies, other than a
claim which is primarily for equitable relief or an injunction to enforce a
right or remedy under Section 8 of this Agreement, arising out of the
Executive's employment (or its termination) that the Company may have against
the Executive or that the Executive may have against the Company or against its
officers, directors, shareholders, employees or agents in their capacity as
such. The parties shall share the fees and costs of the arbitrator and all other
costs in connection with any arbitration and each party shall bear its legal
fees and expenses. Any such arbitration proceedings must be instituted by the
party requesting a resolution within twelve months of the time that party knew,
or should have known, of the events or facts giving rise to the dispute
requiring resolution. The failure to institute arbitration proceedings within
such period shall constitute an absolute bar to the institution of any
proceedings and a waiver of all claims.
11. Legal Fees. The Company agrees to pay all legal fees incurred by the
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Executive in connection with the negotiation and preparation of this Agreement
up to $7,500.
12. Miscellaneous.
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(a) This Agreement shall be governed by, and construed in accordance
with, the laws of the Commonwealth of Pennsylvania, 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
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or modified except by a written agreement executed by the parties hereto or
their respective successors and legal representatives.
(b) All notices and other communications under this Agreement shall be
in writing and shall be given by hand to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive:
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Xx. Xxxx X. Xxxxxx
0000 Xxxx Xxxx
Xxxx Xxxxx, Xxxxxxxx 00000
With a required copy to:
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Xxxxxxx, Carton & Xxxxxxx
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000 Xxxxx Xxxxx Xxxxxx, Xxxxx 0000
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Xxxxxxx, Xxxxxxxx 00000-0000
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Attention: Xxxxxxx X. Xxxxx
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If to the Company:
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Air Products and Chemicals, Inc.
0000 Xxxxxxxx Xxxxxxxxx
Xxxxxxxxx, XX 00000-0000
Attention: General Counsel
With a required copy to:
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Xxxxxx, Xxxxx & Bockius LLP
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxxxx X. Xxxxxxxxxxxx
or to such other address as either party furnishes to the other in writing in
accordance with this paragraph (b) of Section 12. Notices 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. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.
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(d) Notwithstanding any other provision of this Agreement, the Company
may withhold from amounts payable under this Agreement all federal, state, local
and foreign taxes that are required to be withheld by applicable laws or
regulations.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provision of, or to assert any right under, this Agreement
(including, without limitation, the right of the Executive to terminate
employment for Good Reason pursuant to paragraph (c) of Section 5 of this
Agreement) shall not be deemed to be a waiver of such provision or right or of
any other provision of or right under this Agreement.
(f) This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument.
13. The respective rights and obligations of the parties hereunder shall
survive any termination of the Executive's employment to the extent necessary to
the intended preservation of such rights and obligations, including, but not by
way of limitation, those rights and obligations set forth in Sections 3, 5, 6, 8
and 10.
IN WITNESS WHEREOF, the Executive has hereunto set the Executive's hand
and, pursuant to the authorization of the Committee, the Company has caused this
Agreement to be executed in its name on its behalf, all as of the day and year
first above written.
AIR PRODUCTS AND CHEMICALS, INC.
By
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Chairman, President and EXECUTIVE
Chief Executive Officer
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ANNEX 1
GENERAL RELEASE
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1. I, Executive, for and in consideration of certain payments to be made and the
benefits to be provided to me under the Employment Agreement, dated as of
April 18, 2002 (the "Agreement") with Air Products and Chemicals, Inc. (the
"Company"), and conditioned upon such payments and provisions, do hereby REMISE,
RELEASE, AND FOREVER DISCHARGE the Company and each of its past or present
subsidiaries and affiliates, its and their past or present officers, directors,
shareholders, partners, employees and agents, their respective successors and
assigns, heirs, executors and administrators, the pension and employee benefit
plans of the Company, or of its past or present subsidiaries or affiliates, and
the past or present trustees, administrators, agents, or employees of the
pension and employee benefit plans (hereinafter collectively included within the
term the "Company"), acting in any capacity whatsoever, of and from any and all
manner of actions and causes of actions, suits, debts, claims and demands
whatsoever in law or in equity, which I ever had, now have, or hereafter may
have, or which my heirs, executors or administrators hereafter may have, by
reason of any matter, cause or thing whatsoever from the beginning of my
employment with the Company to the date of these presents and particularly, but
without limitation of the foregoing general terms, any claims arising from or
relating in any way to my employment relationship and the termination of, and my
retirement from, my employment relationship with the Company, including but not
limited to, any claims which have been asserted, could have been asserted, or
could be asserted now or in the future under any federal, state or local laws,
including any claims under the Age Discrimination in Employment Act ("ADEA"), 29
U.S.C. Section 621 et seq., Title VII of the Civil Rights Act of 1964, 42 U.S.C.
Section 2000e et seq., the Pennsylvania Human Relations Act, any contracts
between the Company and me and any common law claims now or hereafter recognized
and all claims for counsel fees and costs; provided, however, that this Release
shall not apply to any entitlements under the terms of the Agreement or under
any other plans or programs of the Company in which I participated and under
which I have accrued and become entitled to a benefit other than under any
Company separation or severance plan or programs. Notwithstanding the foregoing,
I understand that I shall be indemnified by the Company as to any liability,
cost or expense for which I would have been indemnified during employment, in
accordance with the Company's certificate of incorporation or insurance
coverages to the extent in force for executives of the Company serving in
similar capacities generally, for actions taken on behalf of the Company within
the scope of his employment by the Company.
2. Subject to the limitations of paragraph 1 above, I expressly waive
all rights afforded by any statute which expressly limits the effect of a
release with respect to unknown claims. I understand the significance of this
release of unknown claims and the waiver of statutory protection against a
release of unknown claims.
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3. I hereby agree and recognize that my employment by the Company was
permanently and irrevocably severed on , 20 and the Company
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has no obligation, contractual or otherwise to me to hire, rehire or re-employ
me in the future. I acknowledge that the terms of the Agreement provide me with
payments and benefits which are in addition to any amounts to which I otherwise
would have been entitled.
4. I hereby agree and acknowledge that the payments and benefits
provided by the Company are to bring about an amicable resolution of my
employment arrangements and are not to be construed as an admission of any
violation of any federal, state or local statute or regulation, or of any duty
owed by the Company and that the Agreement was, and this Release is, executed
voluntarily to provide an amicable resolution of my employment relationship with
the Company.
5. I hereby certify that I have read the terms of this Release, that I
have been advised by the Company to discuss it with my attorney, and that I
understand its terms and effects. I acknowledge, further, that I am executing
this Release of my own volition with a full understanding of its terms and
effects and with the intention of releasing all claims recited herein in
exchange for the consideration described in the Agreement, which I acknowledge
is adequate and satisfactory to me. None of the above-named parties, nor their
agents, representatives, or attorneys have made any representations to me
concerning the terms or effects of this Release other than those contained
herein.
6. I hereby acknowledge that I have been informed that I have the right
to consider this Release for a period of 21 days prior to execution. I also
understand that I have the right to revoke this General Release for a period of
seven days following execution by giving written notice to the Company at
, Attention: General Counsel.
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7. I hereby further acknowledge that the terms of Section 8 of the
Agreement continue to apply for the balance of the time periods provided therein
and that I will abide by and fully perform such obligations.
Intending to be legally bound hereby, I execute the foregoing
Release this day of 20 .
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Witness Executive
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ANNEX 2
RELEASE
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1. Air Products and Chemicals, Inc., on its behalf and on behalf of its
subsidiaries and affiliates, their officers, directors, partners, employees and
agents, their respective successors and assigns, heirs, executors and
administrators (hereinafter collectively included within the term "Air
Products"), for and in consideration of the release of ("Executive")
-----------
executed in connection with the Agreement dated as of 18 April, 2002 between
Air Products and Executive (hereinafter the "Agreement"), and other good and
valuable consideration, does hereby REMISE, RELEASE, AND FOREVER DISCHARGE
Executive , his assigns, heirs, executors and administrators (hereinafter
collectively included within the term "Executive"), acting in any capacity
whatsoever, of and from any and all manner of actions and causes of actions,
suits, debts, claims and demands whatsoever in law or in equity, which it ever
had, now have, or hereafter may have, by reason of any matter, cause of thing
whatsoever from the beginning of Executive's employment with Air Products to the
date of this Release arising from or relating in any way to Executive's
employment relationship and the termination of his employment relationship with
Air Products, including but not limited to, any claims which have been asserted,
could have been asserted, or could be asserted now or in the future under any
federal, state or local laws, any contracts between Air Products and Executive,
other than the Agreement and the Employee Patent, Copyright and Confidential
Information Agreement entered into by Executive on , and any common law
------
claims now or hereafter recognized and all claims for counsel fees and costs,
but in no event shall this release apply to any action attributable to a
criminal act or to an action outside the scope of Executive's' employment.
2. Subject to the limitations of paragraph 1 above, Air Products
expressly waives all rights afforded by any statute which expressly limits the
effect of a release with respect to unknown claims. Air Products understands the
significance of this release of unknown claims and the waiver of statutory
protection against a release of unknown claims.
3. Air Products hereby certifies that it has been advised by counsel in
the preparation and review of this Release.
Intending to be legally bound hereby, Air Products executes the
foregoing Release this day of 20 .
---- ------------ --
Air Products and Chemicals, Inc.
By:
---------------------------- ----------------------------
Witness
14
Exhibit A
16 May 2002
Subject: 2002 Long-Term Incentive Plan Awards
Dear Executive:
In consideration of your decision to join the Air Products team, and to
recognize your potential contributions to our business, align your
accountabilities and goals with our global strategy, and provide you with a
competitive pay and wealth accumulation opportunity, you are hereby granted the
following 2002 Awards under the Air Products Long-Term Incentive Plan:
o A Nonstatutory Stock Option to purchase 100,000 shares of Air Products
Common Stock at a purchase price of $52.19 per share, which is 100%
of the 15 May 2002 Fair Market Value of a share of Common Stock;
o 3,000 Cycle 1B and 6,000 Cycle 2 Performance Share Deferred Stock
Units for performance periods ending with fiscal year 2002, each Unit
being equivalent in value to one share of Common Stock; and
o 4,000 Special Deferred Stock Units with a three-year deferral
period, each Unit being equivalent in value to one share of Common
Stock.
Your 2002 Awards have been approved by authority of the Management Development
and Compensation Committee of the Board of Directors (the "Committee"), subject
to and contingent upon your agreement to the conditions described in Schedule A
(the "Conditions"). Please countersign this letter, make a copy for your
records, and return the original of the letter to Xxx Xxxx by 31 May 2002 in
acknowledgement of your receipt of a copy of the text of the Long-Term Incentive
Plan (the "Plan"), and your agreement to be bound by the provisions of the Plan,
the Conditions and by any determinations made by the Committee with respect to
your 2002 Awards as contemplated or permitted by the Plan and/or the Conditions.
This letter, together with Schedules A, B, C, and D appended hereto, constitutes
the agreement governing your 2002 Awards (this "Awards Agreement"). Your 2002
Awards are also at all times subject to the applicable provisions of the Plan.
Neither your 2002 Awards, this Awards Agreement or the Plan constitute a
contract of employment, nor do
15
they guarantee your continued employment for any period required for all or any
of your 2002 Awards to vest or become exercisable, or to be earned or paid out.
Except as indicated in this Awards Agreement, all capitalized words used herein
have the meanings described in the Plan.
WITNESSETH the due execution of this Awards Agreement at Allentown, Pennsylvania
effective as of the 15th day of May 2002 intending to be legally bound hereby.
AIR PRODUCTS AND CHEMICALS, INC.
By: /s/ Xxxx X. Xxxxx III
-----------------------------
Xxxx X. Xxxxx III
ACKNOWLEDGED AND AGREED this 20th day of May 2002.
EXECUTIVE
/s/ Xxxx X. Xxxxxxx
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Schedules
16
SCHEDULE A
2002 AWARDS UNDER THE PLAN ARE SUBJECT TO THE FOLLOWING CONDITIONS:
1. You continue to comply with the terms of your employee patent and trade
secret agreement and with all other agreements with, and obligations and
duties to, the Company and any of its subsidiaries and affiliates
(together, the "Company"), and refrain from conducting yourself in a manner
adversely affecting the Company;
2. Without limiting the generality of the foregoing, while employed by the
Company and for two years following your separation from service with the
Company for any reason, you
Refrain from engaging in any activity in competition with the Company,
whether as an officer, director, employee, consultant, advisor, agent,
broker, independent contractor, partner, shareholder, or principal of any
corporations, partnership, proprietorship, firm, association, person or
other entity;
Refrain from undertaking any employment or activity wherein the fulfillment
of your duties would call upon you to reveal, to make judgments on, or
otherwise to use any "confidential information" of the Company;
Refrain from directly or indirectly, either for yourself or for any other
person, diverting or taking away or attempting to divert or take away (or
calling on or soliciting or attempting to call on or solicit) any of the
Company's customers or patrons, including but not limited to those upon
whom you called or whom you solicited or with whom you became acquainted
while employed by the Company; and
Refrain from directly or indirectly or by action in concert with others,
inducing or influencing (or seeking to induce or influence) any person who
is engaged (as an employee, agent, independent contractor, or otherwise) by
the Company to terminate his or her employment or engagement.
If, in the Committee's sole discretion, it is determined that you have breached
any of the foregoing Conditions, after notice by registered mail directed to
your last known address, all of your outstanding awards under the Plan will be
completely terminated. Notwithstanding any other provisions hereof, following or
in connection with a Change in Control, the foregoing Conditions shall lapse and
be of no further force or effect.
17
SCHEDULE B
NONSTATUTORY STOCK OPTIONS
Vesting and Expiration. You can first purchase shares of Common Stock ("Shares")
----------------------
as follows: (i) up to one-third of the Shares may be purchased on or after
15 May 2005 and (ii) up to an additional one-third of such Shares may be
purchased on or after 15 May 2006 and 2007, respectively. The Options cannot be
exercised with respect to fractional Shares, and accordingly, the number of
Shares will be rounded down to the nearest Share on the first two of the
foregoing dates and up to the nearest Share on the third such date to eliminate
fractional Shares. The Options were granted on 15 May 2002 and will continue for
a period of ten (10) years and one day from such grant date and will expire and
no longer be exercisable on 16 May 2012.
How to Exercise. You may purchase Shares by delivering to the Company at its
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principal offices in Allentown, Pennsylvania, written notice of exercise of the
Option on forms to be provided by the Company and the full purchase price of the
Shares. Payment of the purchase price may be made in cash; by the delivery of an
irrevocable exercise notice coupled with irrevocable instructions to a
designated broker to simultaneously sell the Shares and deliver to the Company
on the settlement date the portion of the proceeds representing the purchase
price and any taxes to be withheld; or by delivery or attestation of ownership
of other shares of Common Stock owned by you. Payment of any taxes required to
be withheld at the time of exercise may be made in cash (including from a broker
on the settlement date) or by having the number of Shares acquired in the
exercise reduced by an amount equal in value to the amount of such taxes
required to be withheld.
In the event of a Change in Control, Options become exercisable earlier than
described above. You would be able to purchase all of the Shares following the
later of a Change in Control or the first date more than six months from 15 May
2002 following a Change in Control. Further, during the 30-day period following
a Change in Control, Options may be surrendered for payment of 100% of the
"spread" between the value of the Shares (as said value is defined in Section
10(a)(A) of the Plan), and the purchase price.
Termination of Stock Options at End of Employment. Options terminate as of the
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close of business on the last day of your employment with the Company (or a
Subsidiary), unless your employment ends due to your death, Disability, or
Retirement on or after 15 May 2005, in which case the Options will be extended
for the remaining term of the award (that is, will become vested and be
exercisable) as if you had continued to be an active employee of the Company.
18
Assignment and Transfer. Options are nonassignable and nontransferable except to
-----------------------
your Designated Beneficiary; by will or by the laws of descent and distribution;
or by gift to family members or to trusts of which only family members are
beneficiaries (but only on and after the date upon which, and to the extent,
such Option has become exercisable and subject to such administrative procedures
and to such restrictions and conditions as the officers of the Company shall
determine to be consistent with the purposes of the Plan and the interests of
the Company and/or to be necessary or appropriate for compliance with all
applicable tax and other legal requirements). Subject to the foregoing, you may
so transfer Options by gift only by delivering to the Company at its principal
offices in Allentown, Pennsylvania, written notice of the intent to transfer the
Options on forms to be provided by the Company.
19
SCHEDULE C
DEFERRED STOCK UNITS
PERFORMANCE SHARES. Deferred Stock Units known as Performance Shares will earn
------------------
out at the end of Fiscal Year 2002 and entitle you to receive from the Company
at the end of the Deferral Period a Share of Common Stock (and related Dividend
Equivalents) but only if and to the extent the following Operating Return on Net
Assets (XXXXX) objectives ("Performance Objectives") are attained by the Company
for the respective periods specified.
Performance Objectives
CYCLE 1B CYCLE 2
--------------------------------- --------------------------------
FY01/02
AVERAGE Earnout FY02 Earnout
XXXXX* Factor XXXXX Factor
----- ------ ----- ------
12.0% 150% 12.0% 200%
11.75% 100% 11.0% 100%
11.0% 50% 10.9% 75%
10.9% or below 0% 10.8% 50%
*The XXXXX achieved for FY01 was 11.1%.
XXXXX calculations will be based upon the Company's Consolidated Operating
Income divided by the average (5 point) net segment assets for the appropriate
fiscal period. Upon the Committee's determination of the extent to which
Performance Objectives have been attained, any Performance Shares (and related
Dividend Equivalents) not earned out will be completely forfeited in their
entirety.
Performance Share Deferral Period
The Deferral Period which applies to one-half of the Cycle 1B and all of the
Cycle 2 Performance Shares ends on the earlier of (i) the date two years
following your Retirement or Disability, and (ii) your death, but in no event
earlier than 15 May 2003. The Deferral Period which applies to the other half
of the Cycle 1B Performance Shares ends on 15 May 2003.
SPECIAL DEFERRED STOCK UNITS. Special Deferred Stock Units will entitle you to
----------------------------
receive from the Company at the end of the Deferral Period a Share of Common
Stock (and related Dividend Equivalents) for each Unit. The Deferral Period
which applies to the Special Deferred Stock Units ends on 15 May 2005.
PAYMENT OF DEFERRED STOCK UNITS. Except as provided in the next paragraph,
-------------------------------
payment in respect of Deferred Stock Units, together with related Dividend
20
Equivalents, will be made only following the end of the applicable Deferral
Period. Payment of Deferred Stock Units will be delivered net of appropriate
taxes and may be made in Shares, cash or both, as determined by the Committee.
Following or in connection with a Change in Control, the Committee may in its
sole discretion determine to pay in full any or all outstanding Deferred Stock
Units, together with any Dividend Equivalents, for the period for which such
Units have been outstanding, notwithstanding that the Performance Objectives
have not yet been achieved or that the Deferral Periods as to such Deferred
Stock Units have not been completed. Such payment may be in cash or in Shares,
or a combination thereof, as determined by the Committee, and will be due and
payable to you following the Committee's determination to pay said Deferred
Stock Units, but in no event earlier than the occurrence of a Change in Control.
If paid in cash, you will receive payment of an amount in respect of each
Deferred Stock Unit equal to a Share of Common Stock valued as prescribed by the
formula set forth in Plan Section 10(e).
TERMINATION OF DEFERRED STOCK UNITS AT END OF EMPLOYMENT. Your Performance Share
--------------------------------------------------------
Deferred Stock Units terminate automatically as of the close of business on the
last day of your employment with the Company (or a Subsidiary), unless your
employment ends due to your death, Disability or Retirement on or after 15 May
2003. Your Special Deferred Stock Units terminate automatically as of the close
of business on the last day of your employment with the Company (or a
Subsidiary), unless your employment ends due to your death, Disability or
Retirement on or after 15 May 2003.
21
SCHEDULE D
CERTAIN DEFINITIONS
"Retirement" as used in Schedules B and C means separating from service with the
Company or a Subsidiary with the right to begin receiving immediate payment(s)
of all or some of the Pension Enhancement as defined and as provided in the
Employment Agreement between Executive and the Company dated and effective as of
18 April 2002.
"Disability" means permanent and total disability of an employee as determined
by, or under delegation of authority to management from, the Committee in
accordance with uniform principles consistently applied, upon the basis of such
evidence as the Committee (or its delegate) deems necessary and desirable.
22
Exhibit B
AIR PRODUCTS AND CHEMICALS, INC.
STYLIZED LOGO
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EMPLOYEE PATENT, COPYRIGHT, AND CONFIDENTIAL INFORMATION AGREEMENT
In consideration of my employment by Air Products and Chemicals, Inc., its
divisions, affiliates and subsidiaries (all, collectively, referred to
hereinafter as the Company), I agree that I will:
A. Communicate to the Company promptly and fully in writing, in such format as
the Company may deem appropriate, all inventions made or conceived by me
whether alone or jointly with others from my time of entering the Company's
employ until I leave, and as requested, to assign to the Company those of
such inventions which (1) relate to a field of business, research or
investigation in which the Company has an interest, or (2) result from, or
are suggested by, any work which I may do for or on behalf of the Company;
B. Make and maintain adequate permanent records of all such inventions, in the
form of memoranda, notebook entries, drawings, print-outs or reports
relating thereto, in keeping with then current Company procedures. I agree
that these records, as well as the inventions themselves, shall be and
remain the property of the Company at all times;
C. Cooperate with and assist the Company and its nominees, at their sole
expense, during my employment and thereafter, in securing and protecting
patent rights in which I am a named inventor or other similar rights in the
United States and foreign countries. In this connection, I specifically
agree to execute all papers which the Company deems necessary to protect
its interests including the execution of assignments of invention and to
give evidence and testimony, as may be necessary, to secure and enforce the
Company's rights;
D. Except as the Company may otherwise authorize in writing, not use or
disclose to others, reproduce or copy at any time, except as my Company
duties may require, either during or subsequent to my employment, any
private information of the Company or of others as to whom the Company has
an obligation of confidentiality which may come to my attention or be
developed by me during the course of my employment other than information
which is or becomes public knowledge in a lawful manner;
E. Upon termination of my employment with the Company, deliver to it all
records, data and memoranda of any nature which are in my possession or
control and which relate to my employment or the activities of the Company,
including, for example, notebooks, diaries, reports, photographs, films,
manuals and computer software media.
F. Following termination of my employment, honor and abide by my continuing
obligation of confidentiality. I agree that, in any situation which arises
and involves a question of my freedom to disclose particular information to
a subsequent employer or anyone else, I will contact the Company in writing
and elicit its opinion on my freedom to make such a disclosure.
It is also agreed that:
G. All creative works which I produce during my employment and which relate to
the Company's business or technology shall be considered to have been
prepared for the Company as a part of and in the course of my employment.
Any such work shall be owned by the Company regardless of whether it would
otherwise be considered a work made for hire. Such works shall include,
among other things, computer programs and documentation, non-dramatic
literary works (e.g. professional papers and journal articles), visual arts
(e.g. pictorial, graphic and three dimensional), sound recordings, motion
pictures and other audiovisual works.
H. Nothing in this agreement shall bind me or the Company to any specific
period of service or employment, nor shall the termination of such
employment in any way affect the obligations assumed by me herein. Further,
this agreement replaces any and all prior agreements or understandings
between me and the Company concerning these subjects;
I. This agreement shall bind my heirs, executors, and administrators, and
shall inure to the benefit of the successors and assigns of the Company.
J. I will not disclose to any other employee of the Company any information as
to which I owe a continuing obligation of confidentiality to a previous
employer or client. Any inventions, patented or unpatented, which were made
or conceived by me prior to my employment are excluded from the operation
of this agreement, and I warrant that there are no such inventions, other
than those listed by me in the space provided on the attached Prior
Invention(s) List.
(L.S.)
--------------------------------------
Signature of Employee
WITNESS: --------------------------
DATED: ----------------------------
(List invention information on the attached Prior Invention(s) List.)
Exhibit B
PRIOR INVENTION(S) LIST
ATTACHMENT TO EMPLOYEE PATENT, COPYRIGHT AND CONFIDENTIAL INFORMATION
AGREEMENT
Dated: --------------------------------------
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Employee Name
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Date
Description of Patent Numbers or Assignment or disposition
Invention Application Numbers employee has made or will make
(if any) of invention
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Employee Signature
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Date
WITNESS:
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DATED:
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