AMENDED AND RESTATED CHANGE OF
CONTROL
EMPLOYMENT AND SEVERANCE AGREEMENT
AGREEMENT
by and between Sensient Technologies Corporation, a Wisconsin
corporation (the “Company”), and (the
“Executive”), amended and restated as of the
day of
, 2008.
WHEREAS,
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 Executive, 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 Executive by virtue of the personal
uncertainties and risks created by a pending or threatened Change
of Control and to encourage the Executive’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
Executive with compensation and benefits arrangements upon a Change
of Control which ensure that the compensation and benefits
expectations of the Executive will be satisfied and which are
competitive with those of other corporations.
NOW,
THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
(a) The
“Effective Date” shall mean the first date during the
Change of Control Period (as defined in Section l(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 Executive’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
Executive 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, 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 the third anniversary
of the date hereof; provided, however, that commencing on the date
one year after the date hereof, and on each annual anniversary of
such date (such date and each annual anniversary thereof shall be
hereinafter referred to as the “Renewal Date”), unless
previously terminated, the Change of Control Period shall be
automatically extended so as to terminate three years from such
Renewal Date, unless at least 60 days prior to the Renewal
Date the Company shall give notice to the Executive that the Change
of Control Period shall not be so extended.
2. Change
of Control . For the purpose of this Agreement, a “Change
of Control” shall mean:
(a) The
acquisition 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 30% 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 for purposes of this
subsection (a), the following acquisitions shall not constitute a
Change of Control: (A) any acquisition directly from the
Company, (B) any acquisition by the Company, (C) any
acquisition by any employee benefit plan (or related trust)
sponsored or maintained by the Company or any corporation
controlled by the Company, or (D) any acquisition 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 September 10, 1998, 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 September 10,
1998, 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) Consummation
by the Company of a reorganization, merger or consolidation or sale
or other disposition of all or substantially all of the assets of
the Company or the acquisition of assets of another entity (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 Out
standing Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more
than 50% 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 or all or
substantially all of the Company’s assets either directly or
through one or more subsidiaries) in substantially the same
proportions as their owner ship, 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, 30% or more
of, respectively, the then outstanding shares of
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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 a complete liquidation or
dissolution of the Company taxed under Section 331 of the Code
or with the approval of a bankruptcy court pursuant to
Section 503(b)(1)(A) of Title II of the U.S. Bankruptcy
Code.
(e) Notwithstanding
the foregoing, a Change of Control as defined in this
Section 2 shall not be treated as a Change of Control for
purposes of this Agreement unless it constitutes a “change in
control event” within the meaning of Treasury
Regulation Section 1.409A-3(i)(5) or results in a
termination or liquidation of a plan within the meaning of Treasury
Regulation Section 1.409A-3(j)(4)(ix)(A) or (B) (as
applicable).
3.
Employment Period . The Company hereby agrees to continue
the Executive in its employ, and the Executive 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 third anniversary of such date
(the “Employment Period”).
(a)
Position and Duties .
(i) During the
Employment Period, (A) the Executive’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
Executive’s services shall be performed at the location where
the Executive was employed immediately preceding the Effective Date
or any office 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 Executive is entitled, the Executive 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
Executive hereunder, to use the Executive’s reasonable best
efforts to perform faithfully and efficiently such
responsibilities. During the Employment
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Period it shall
not be a violation of this Agreement for the Executive 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 Executive’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 Executive 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 Executive’s
responsibilities to the Company.
(i) Base
Salary . During the Employment Period, the Executive 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
Executive 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 and increased a minimum of 3% no more
than 12 months after the last salary increase awarded to the
Executive prior to the Effective Date and thereafter at least
annually. Any increase in Annual Base Salary shall not serve to
limit or reduce any other obligation to the Executive under this
Agreement and shall be commensurate with increases given to peer
executives. 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 Executive 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 greater of the highest bonus, if any, paid to
the Executive under the Company’s Management Incentive Plan
for Division Presidents or the Company’s Incentive
Compensation Plan for Elected Corporate Officers, or any comparable
bonus under any predecessor or successor plan, on: any one of the
last five annual bonus payment dates immediately preceding the
Effective Date; or any one annual bonus payment date coinciding
with or following the date on which the Executive attains age 50
and preceding the Effective Date (the “Recent Annual
Bonus”). Each such Annual Bonus shall be paid no later than
March 15 th of
the fiscal year following the fiscal year for which the Annual
Bonus is earned.
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(iii)
Incentive, Savings and Retirement Plans . During the
Employment Period, the Executive shall be entitled to participate
in all qualified and nonqualified incentive (cash and stock
related), savings and retirement plans, and/or comparable
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 Executive with incentive opportunities (measured 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 Executive 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 Executive, 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 Executive
and/or the Executive’s family, as the case may be, shall be
eligible for participation in and shall receive all benefits under
welfare benefit plans, practices, policies and programs provided by
the Company and its affiliated companies (including, without
limitation, medical, prescription, dental, disability, 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 Executive with benefits which are less favorable, in the
aggregate, than the most favorable of such plans, practices,
policies and programs in effect for the Executive at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, 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 Executive shall
be entitled to receive prompt reimbursement for all reasonable
expenses incurred by the Executive in accordance with the most
favorable policies, practices and procedures of the Company and its
affiliated companies in effect for the Executive at any time during
the 120-day period immediately preceding the Effective Date or, if
more favorable to the Executive, 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 Executive shall be
entitled to fringe benefits, including, without limitation, tax and
financial planning services, use of an automobile and payment of
related expenses, in accordance with the most favorable plans,
practices,
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programs and
policies of the Company and its affiliated companies in effect for
the Executive at any time during the 120-day period immediately
preceding the Effective Date or, if more favorable to the
Executive, 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 Executive
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 Executive 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 Executive, 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 Executive 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 Executive at any time
during the 120-day period immediately preceding the Effective Date
or, if more favorable to the Executive, as in effect generally at
any time thereafter with respect to other peer executives of the
Company and its affiliated companies.
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A.
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In
the event of a Change of Control, for purposes of calculating the
Executive’s benefit under the Company’s Supplemental
Executive Retirement Plan A (effective January 1, 2005) and
the Company’s Supplemental Executive Retirement Plan B
(effective as of January 1, 2005), each as amended from time
to time (collectively, the “SERP”), if the Executive is
a SERP participant, the Executive will be deemed to have received
three additional years of base salary in amounts equal to the
Executive’s Annual Base Salary as of the Effective Date as
increased for purposes of this subparagraph in each of such three
years by the percentage increase (if positive) in the
Executive’s Annual Base Salary from the year prior to the
year which the Effective Date occurs to the year in which the
Effective Date occurs. Notwithstanding anything in the SERP or in
the Company’s Executive Income Deferral Plan, as amended from
time to time (the “EIDP”) to the contrary, in the event
of a Change of Control, for purposes of determining the
“annual bonus” amount for Final Compensation under the
SERP, the measurement period shall be the greater of any one of the
last five annual bonus
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payment dates
immediately preceding the Effective Date or any one annual bonus
payment date coinciding with or following the date on which the
Executive attains age 50 and preceding the Effective Date as set
forth in Section 4(b)(ii) of this Agreement and the lump sum
distribution payments under the SERP and the EIDP shall be made as
soon as administratively feasible, but no later than 5 business
days after the Effective Date, subject to the 6-Month Delay Period
(as defined under Section 12 below) only if and to the extent
such delay is required under Section 409A of the Code and the
regulations thereunder.
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B.
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If
upon a Change of Control, the Executive vests in any of the
Executive’s restricted stock grants under any of the
Company’s equity plans or arrangements and becomes subject to
income and/or employment taxes as a result of such vesting (the
“Vesting Taxes”) and the executive’s restricted
stock agreement provides for a tax gross-up payment, the Company
shall pay to the Executive additional payments (a “Restricted
Stock Reimbursement”) in amounts such that after payment by
the Executive of all income, employment, state, local or foreign
taxes imposed on such Restricted Stock Reimbursement, the Executive
Retains an amount of the Restricted Stock Reimbursement equal to
the Vesting Taxes. The Restricted Stock Reimbursement will be paid
as soon as administratively feasible, but no later than 5 business
days after the Effective Date, subject to the 6-Month Delay Period
(as defined under Section 12 below) only if and to the extent
such delay is required under Section 409A of the Code and the
regulations thereunder.
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5.
Termination of Employment .
(a)
Death or Disability . The Executive’s employment shall
terminate automatically upon the Executive’s death during the
Employment Period. If the Company determines in good faith that the
Disability of the Executive has occurred during the Employment
Period (pursuant to the definition of Disability set forth below),
it may give to the Executive written notice in accordance with
Section 12(b) of this Agreement of its intention to terminate the
Executive’s employment. In such event, the Executive’s
employment with the Company shall terminate effective on the
Disability determination date (the “Disability Effective
Date”), provided that , within the 30 days after
such receipt, the Executive shall not have returned to full-time
performance of the Executive’s duties. For purposes of this
Agreement, “Disability” means that (i) the
Executive is unable to engage in any substantial gainful activity
by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than
12 months; or (ii) the Executive is, by
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reason of any
medically determinable physical or mental impairment that can be
expected to result in death or can be expected to last for a
continuous period of not less than 12 months, receiving income
replacement benefits for a period of not less than 3 months
under an accident and health plan covering the Executive. The
determination of Disability shall be made by a physician selected
by the Company or its insurers and acceptable to the Executive or
the Executive’s legal representative.
(b)
Cause . The Company may terminate the Executive’s
employment during the Employment Period for Cause. For purposes of
this Agreement, “Cause” shall mean:
(i) the willful
and continued failure of the Executive to perform substantially the
Executive’s duties with the Company or one of its affiliates
(other than any such failure resulting from incapacity due to
physical or mental illness or following the Executive’s
delivery of a Notice of Termination for Good Reason), after a
written demand for performance is delivered to the Executive by the
Chief Executive Officer of the Company which specifically
identifies the manner in which the Chief Executive Officer believes
that the Executive has not substantially performed the
Executive’s duties, or
(ii) the willful
engaging by the Executive 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
Executive, shall be considered “willful” unless it is
done, or omitted to be done, by the Executive in bad faith or
without reasonable belief that the Executive’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
Executive 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 Executive in
good faith and in the best interests of the Company. The cessation
of employment of the Executive shall not be deemed to be for Cause
unless and until there shall have been delivered to the Executive 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 Executive and the Executive is
given an opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the
Executive is guilty of the conduct described in subparagraph
(i) or (ii) above, and specifying the particulars thereof
in detail. Any termination of the Executive’s employment by
the Company during the Employment Period (other than a termination
under Section 5(a)) shall be deemed to be a termination other
than for Cause unless it meets all requirements of this
Section 5(b).
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(c)
Good Reason . The Executive’s employment may be
terminated by the Executive for Good Reason. For purposes of this
Agreement, “Good Reason” shall mean:
(i) the assignment
to the Executive of any duties inconsistent in any respect with the
Executive’s position (including status, offices, titles and
reporting requirements), authority, duties or responsibilities as
contemplate
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