Exhibit (10)(o)
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement"), dated as of January 1,
2003, by and between The Lubrizol Corporation, an Ohio corporation (the
"Company"), and Xxxxxxx X. Xxxxxx (the "Executive");
WITNESSETH:
WHEREAS, the Executive is a senior executive of the Company and has
made and is expected to continue to make major contributions to the
profitability, growth and financial strength of the Company;
WHEREAS, the Company desires to encourage Executive to remain with the
Company for a number of years.
WHEREAS, this Agreement is not intended to alter materially the
compensation and benefits which the Executive could reasonably expect to receive
from the Company that are not addressed within this Agreement; and
WHEREAS, the Executive is willing to render services to the Company on
the terms and subject to the conditions set forth in this Agreement;
NOW, THEREFORE, the Company and the Executive agree as follows:
1. If the Executive remains in the employ of the Company until January 1, 2008,
he will receive 15,000 Lubrizol Common Shares
2. Executive will not have voting or dividend rights in number of shares listed
in 1. above, unless and until the Shares are issued.
3. The number of Shares listed in 1. above will be issued before January 1, 2008
if the Employee is employed by the Company upon the occurrence of any of the
following events:
A. At the discretion of the Organization and Compensation
Committee of the Board of Directors, upon the death of the
Executive.
B. If there is a Change of Control of the Company and Executive's
employment terminates prior to the earlier of January 1, 2008
or the third anniversary of the Change of Control, by the
Company for other than Good Cause or by the Executive for Good
Reason, or if there is a Change of Control and the Executive
terminates his employment for any reason during the 90 day
period commencing on the first anniversary of the Change in
Control.
i. For purposes of this Agreement, there will be a
"Change in Control" if any of the following events
occurs:
(a) The Company is merged, consolidated or
reorganized into or with another corporation
or other legal person, and immediately after
such merger, consolidation or reorganization
less than a majority of the combined voting
power of the then-outstanding securities of
such corporation or person immediately after
such transaction are held in the aggregate
by the holders of Voting Stock
(as that term is hereafter defined) of the
Company immediately prior to such
transaction;
(b) The Company sells all or substantially all
of its assets to any other corporation or
other legal person, less than a majority of
the combined voting power of the
then-outstanding securities of such
corporation or person immediately after such
sale are held in the aggregate by the
holders of Voting Stock of the Company
immediately prior to such sale;
(c) There is a report filed on Schedule 13D or
Schedule 14D-1 (or any successor schedule,
form or report), each as promulgated
pursuant to the Securities Exchange Act of
1934, as amended (the "Exchange Act"),
disclosing that any person (as the term
"person" is used in Section 13(d)(3) or
Section 14(d)(2) of the Exchange Act) has
become the beneficial owner (as the term
"beneficial owner" is defined under Rule
13d-3 or any successor rule or regulation
promulgated under the Exchange Act) of
securities representing 20% or more of the
combined voting power of the
then-outstanding securities entitled to vote
generally in the election of directors of
the Company ("Voting Stock");
(d) The Company files a report or proxy
statement with the Securities and Exchange
Commission pursuant to the Exchange Act
disclosing in response to Form 8-K or
Schedule 14A (or any successor schedule,
form or report or item therein) that a
change in control of the Company has or may
have occurred or will or may occur in the
future pursuant to any then existing
contract or transaction; or
(e) If during any period of two consecutive
years, individuals who at the beginning of
any such period constitute the Directors of
the Company cease for any reason to
constitute at least a majority thereof,
provided, however, that for purposes of this
clause (e), each Director who is first
elected, or first nominated for election by
the Company's stockholders by a vote of at
least two-thirds of the Directors of the
Company (or a committee thereof) then still
in office who were Directors of the Company
at the beginning of any such period will be
deemed to have been a Director of the
Company at the beginning of such period.
Notwithstanding the foregoing provisions of Section
3(B)(i)(c) or 3(B)(i)(d) hereof, unless otherwise
determined in a specific case by majority vote of the
Board of Directors of the Company (the "Board"), a
"Change in Control" shall not be deemed to have
occurred for purposes of this Agreement solely
because (I) the Company, (II) an entity in which the
Company directly or indirectly beneficially owns 50%
or more of the voting securities (a
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"Subsidiary"), or (III) any Company-sponsored
employee stock ownership plan or any other employee
benefit plan of the Company, either files or becomes
obligated to file a report or a proxy statement under
or in response to Schedule 13D, Schedule 14D-1, Form
8-K or Schedule 14A (or any successor schedule, form
or report or item therein) under the Exchange Act,
disclosing beneficial ownership by it of shares of
Voting Stock, whether in excess of 20% or otherwise,
or because the Company reports that a change in
control of the Company has or may have occurred or
will or may occur in the future by reason of such
beneficial ownership.
ii. Good Cause means the Executive committed:
(a) an intentional act of fraud, embezzlement or
theft in connection with his duties or in
the course of his employment with the
Company and/or any of its subsidiaries;
(b) intentional wrongful damage to property of
the Company and/or any of its subsidiaries;
(c) intentional wrongful disclosure of secret
processes or confidential information of the
Company and/or any Subsidiary; or
(d) intentional wrongful engagement in any
Competitive Activity;
and any such act was harmful to the Company. For
purposes of this Agreement, no act, or failure to
act, on the part of the Executive will be deemed
"intentional" if it was due primarily to an error in
judgment or negligence, but will be deemed
"intentional" only if done, or omitted to be done, by
the Executive not in good faith and without
reasonable belief that his action or omission was in
the best interest of the Company. Notwithstanding the
foregoing, the Executive will not be deemed to have
been terminated for "Good Cause" hereunder unless and
until there is delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of
not less than three-quarters of the Board then in
office at a meeting of the Board called and held for
such purpose (after reasonable notice to the
Executive and an opportunity for the Executive,
together with his counsel, to be heard before the
Board), finding that, in the good faith opinion of
the Board, the Executive had committed an act set
forth above in Section 3(B)(ii) and specifying the
particulars thereof in detail. Nothing herein limits
the right of the Executive or his beneficiaries to
contest the validity or propriety of any such
determination.
iii. Good Reason means within three years after the Change
in Control upon the occurrence of any of the
following events:
(a) Failure to elect or reelect or otherwise to
maintain the Executive in the office or the
position, or a substantially equivalent
office or position, of or with the Company
and/or a Subsidiary, as the case may be,
which the
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Executive held immediately prior to a Change
in Control, or the removal of the Executive
as a Director of the Company (or any
successor thereto) if the Executive was a
Director of the Company immediately prior to
the Change in Control;
(b) A significant adverse change in the nature
or scope of the authorities, powers,
functions, responsibilities or duties
attached to the position with the Company
and any Subsidiary which the Executive held
immediately prior to the Change in Control,
a reduction in the aggregate of the
Executive's Base Pay and Incentive Pay
received from the Company and any
Subsidiary, or the termination or denial of
the Executive's rights to Employee Benefits
as herein provided, any of which is not
remedied within 10 calendar days after
receipt by the Company of written notice
from the Executive of such change, reduction
or termination, as the case may be;
(c) A determination by the Executive made in
good faith that as a result of a Change in
Control and a change in circumstances
thereafter significantly affecting his
position, including without limitation a
change in the scope of the business or other
activities for which he was responsible
immediately prior to a Change in Control, he
has been rendered substantially unable to
carry out, has been substantially hindered
in the performance of, or has suffered a
substantial reduction in, any of the
authorities, powers, functions,
responsibilities or duties attached to the
position held by the Executive immediately
prior to the Change in Control, which
situation is not remedied within 10 calendar
days after written notice to the Company
from the Executive of such determination;
(d) The liquidation, dissolution, merger,
consolidation or reorganization of the
Company or transfer of all or a significant
portion of its business and/or assets,
unless the successor or successors (by
liquidation, merger, consolidation,
reorganization or otherwise) to which all or
a significant portion of its business and/or
assets have been transferred (directly or by
operation of law) shall have assumed all
duties and obligations of the Company under
this Agreement pursuant to Section 4 hereof;
(e) The Company relocates its principal
executive offices, or requires the Executive
to have his principal location of work
changed, to any location which is over 25
miles from the location thereof immediately
prior to the Change of Control or to travel
away from his office in the course of
discharging his responsibilities or duties
hereunder significantly more (in terms of
either consecutive days or aggregate days in
any calendar year) than was required of him
prior to the Change of Control without, in
either case, his prior written consent; or
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(f) Without limiting the generality or effect of
the foregoing, any material breach of this
Agreement by the Company or any successor
thereto.
4. Successors and Assigns to the Company
A. The Company will require any successor (whether direct or
indirect, by purchase, merger, consolidation, reorganization
or otherwise) to all or substantially all of the business
and/or assets of the Company, by agreement in form and
substance satisfactory to the Executive, expressly to assume
and agree to perform this Agreement in the same manner and to
the same extent the Company would be required to perform if no
such succession had taken place. This Agreement will be
binding upon and inure to the benefit of the Company and any
successor to the Company, including without limitation any
persons acquiring directly or indirectly all or substantially
all of the business and/or assets of the Company whether by
purchase, merger, consolidation, reorganization or otherwise
(and such successor will thereafter be deemed the "Company"
for the purposes of this Agreement), but will not otherwise be
assignable, transferable or delegable by the Company.
B. This Agreement inures to the benefit of and is enforceable by
the Executive's personal or legal representatives, executors,
administrators, successors, heirs, distributees and/or
legatees.
C. This Agreement is personal in nature and neither of the
parties hereto will, without the consent of the other, assign,
transfer or delegate this Agreement or any rights or
obligations hereunder except as expressly provided in Sections
4(A) and (B) above. Without limiting the generality of the
foregoing, the Executive's right to receive the benefits
hereunder is not assignable, transferable or delegable,
whether by pledge, creation of a security interest or
otherwise, other than by a transfer by his will or by the laws
of descent and distribution and, in the event of any attempted
assignment or transfer contrary to this Section 4(C), the
Company has no liability to pay any amount so attempted to be
assigned, transferred or delegated.
D. The Company and the Executive recognize that each party will
have no adequate remedy at law for breach by the other of any
of the agreements contained herein and, in the event of any
such breach, the Company and the Executive hereby agree and
consent that the other shall be entitled to a decree of
specific performance, mandamus or other appropriate remedy to
enforce performance of this Agreement.
5. For all purposes of this Agreement, all communications including without
limitation notices, consents, requests or approvals, provided for herein must be
in writing and will be deemed to have been duly given when delivered or five
business days after having been mailed by United States registered or certified
mail, return receipt requested, postage prepaid, addressed to the Company (to
the attention of the Secretary of the Company) at its principal executive office
and to the Executive at his principal residence, or to such other address as any
party may have furnished to the other in writing and in accordance herewith,
except that notices of change of address shall be effective only upon receipt.
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6. The validity, interpretation, construction and performance of this Agreement
is governed by the laws of the State of Ohio, without giving effect to the
principles of conflict of laws of such State.
7. If any provision of this Agreement or the application of any provision hereof
to any person or circumstances is held invalid, unenforceable or otherwise
illegal, the remainder of this Agreement and the application of such provision
to any other person or circumstances shall not be affected, and the provision so
held to be invalid, unenforceable or otherwise illegal shall be reformed to the
extent (and only to the extent) necessary to make it enforceable, valid and
legal.
8. No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing signed by the
Executive and the Company. No waiver by either party hereto at any time of any
breach by the other party hereto or compliance with any condition or provision
of this Agreement to be performed by such other party shall be deemed a waiver
of similar or dissimilar provisions or conditions at the same or at any prior or
subsequent time. No agreements or representations, oral or otherwise, expressed
or implied with respect to the subject matter hereof have been made by either
party which are not set forth expressly in this Agreement, other than the
Employment Agreement between Executive and the Company dated July 24, 2000,
which remains in full force and effect.
9. This Agreement may be executed in one or more counterparts, each of which
shall be deemed to be an original but all of which together will constitute one
and the same agreement.
IN WITNESS WHEREOF, the parties have caused this Agreement to be duly
executed and delivered as of the date first above written.
EXECUTIVE THE LUBRIZOL CORPORATION
By:
----------------------------- ----------------------------------
Chief Executive Officer
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