Exhibit 10.3
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this
“ Agreement ”) is entered into as of
November 13, 2008 (the “Effective Date”), by and
between Rockwood Specialties, Inc., a Delaware corporation
(the “ Company ”) and Thomas Riordan (the
“ Executive ”);
WHEREAS, the Company desires to
employ Executive as its Senior Vice President Law and
Administration;
WHEREAS, Executive desires to be so
employed.
NOW, THEREFORE, Executive and the
Company agree as follows:
1.
Employment; Term
. The Company agrees to employ
the Executive, and the Executive agrees to serve in the employ of
the Company, in the position and with the responsibilities, duties
and authority set forth in Section 2 and on the other terms
and conditions set forth in this Agreement. The
Executive’s employment shall constitute “at will”
employment. Subject to Section 7, the Executive’s
employment may be terminated at any time and for any reason.
The Executive’s employment shall automatically terminate at
the end of the month in which Executive attains age 70, unless the
Company and the Executive otherwise agree. Certain rights and
obligations of the Executive and the Company shall survive the
termination of Executive’s employment, as set forth in this
Agreement.
2.
Position, Duties
. The Executive shall serve in
the position of Senior Vice President Law and Administration of the
Company. The Executive shall perform, faithfully and
diligently, such service and duties, and shall have such
responsibilities, appropriate to said position, as shall be
assigned to him. The Executive shall report directly to the
Chief Executive Officer of the Company. The Executive agrees
to devote his entire business time, best efforts, skills and
attention to fulfilling the performance of his duties and
responsibilities hereunder. The Executive shall be based in
Princeton, New Jersey, except for travel required by Company
business.
3.
Salary . In consideration of the performance by
the Executive of the services set forth in Section 2 and his
observance of the other covenants set forth herein, the Company
shall pay to the Executive, and the Executive shall accept, a base
salary at the rate of $412,000 per annum, payable in accordance
with the standard payroll practices of the Company. The
Executive’s salary shall be reviewed at least annually for
potential increase, in accordance with the Company’s practice
in the U.S.
4.
Bonus . During the employment term, the
Executive will be eligible to earn an annual bonus award
(“Annual Bonus”), with a target bonus amount equal to
100% of Executive’s Base Salary (the “Target
Bonus”) based upon the achievement of performance goals
established by the Board. All Annual Bonus amounts shall be
paid in accordance with the terms and conditions of the
Company’s annual incentive plan or policy. In addition,
the Executive will be eligible to participate in the
Company’s long-term incentive plans available to
senior
executives of the Company in accordance with the
terms and conditions of such plans, as in effect from time to
time.
In the event the Company is required
to prepare a restatement of its financial results for a fiscal year
and the Board in good faith determines that the need for such
restatement was due to the intentional misconduct of one or more of
the senior executive officers of the Company, Executive shall,
within 60 days of receiving notice of such Board determination
(which notice shall state the reasons for the need for the
restatement, identify the misconduct and include calculations of
the impact thereof), reimburse the Company, net of taxes, for all
excess remuneration (as defined below) received by Executive in
connection with the Annual Bonus received by Executive with respect
to such fiscal year. For purposes of this provision, the term
“excess remuneration” means the excess of the Annual
Bonus payment made to Executive for such fiscal year over the
payment that would have been made to Executive for such fiscal year
had Executive’s payment been calculated based on the
financial statements as restated, as determined in the good faith
discretion of the Board.
5.
Expense Reimbursement
. During the employment term,
the Company shall reimburse the Executive for all reasonable and
necessary out-of-pocket expenses incurred by him in connection with
the performance of his duties hereunder, upon the presentation of
proper accounts therefor in accordance with the Company’s
policies (but in no event later than the last day of the calendar
year next following the calendar year in which the expenses were
incurred).
6.
Benefits .
6.1
Generally
. During the employment term,
the Executive will be eligible to participate in all benefit plans
and programs offered by the Company from time to time to its
employees of comparable seniority, subject to the terms and
conditions of such plans and programs as in effect from time to
time. Such plans and programs currently include the
following:
(i)
Rockwood Health Care Benefits
(medical, pharmaceutical, dental and vision),
(ii)
Rockwood Long-Term Disability
Plan,
(iii)
Rockwood Life and Accident
Plan,
(iv)
Rockwood Health Care and Dependent
Care Reimbursement Account,
(v)
Senior Executive Health
Plan,
(vi)
Personal Excess Liability Insurance
Program,
(vii)
Rockwood Retirement Plus Program
(Profit Share/401(k) and Money Purchase Plan), and
(viii)
Supplemental Executive Savings
Plan.
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6.2
Vacation
. During the employment term,
the Executive shall be entitled to four (4) weeks vacation on
an annual basis, which must be used in the year granted and not
carried over from year to year.
6.3
Company Car
. During the employment term,
the Executive will be provided (at no after-tax cost) with use of a
Company automobile, including reimbursement on a monthly basis for
expenses associated with operating the automobile including gas,
insurance and maintenance. The reimbursements and tax
gross-up payments called for by this Section 6.3 (as well as
by Sections 7.4, 7.5 and 7.6) shall be paid in accordance with the
Company’s reimbursement policy for senior executives (but in
no event later than the last day of the calendar year next
following the calendar year in which the Executive pays the
expenses or related taxes, respectively). Payment or
reimbursement of such amounts with respect to any calendar year
shall not affect the amount eligible for payment or reimbursement
in any other calendar year, and such payments and reimbursements
may not be exchanged for cash or another benefit.
7.
Termination of
Employment .
7.1
Death
. In the event of the death of
the Executive, the Company shall pay to the estate or other legal
representative of the Executive, within ninety (90) days of the
Executive’s death, (i) the salary accrued to the date of
the Executive’s death and not theretofore paid, (ii) any
earned but unpaid Annual Bonus for the fiscal year preceding the
fiscal year in which such termination occurs and (iii) a lump
sum pro rata portion of any Annual Bonus that Executive would have
been entitled to receive pursuant to Section 4 for the fiscal
year in which such termination occurs based upon the percentage of
the fiscal year that shall have elapsed through the date of
Executive’s termination of employment, payable when such
Annual Bonus would have otherwise been payable had
Executive’s employment not terminated, based on the Target
for the fiscal year in which termination occurs. Rights and
benefits of the estate or other legal representative of the
Executive under the benefit plans and programs of the Company shall
be determined in accordance with the terms and conditions of such
plans and programs. Neither the estate nor other legal
representative of the Executive nor the Company shall have any
further rights or obligations under this Agreement except as
provided in this Section 7.1.
7.2
Disability
. Upon Executive’s
permanent disability, the Company shall have the right to terminate
Executive’s employment with the Company hereunder immediately
with written notice. For these purposes, permanent disability
shall mean the Executive failing to perform his duties on a
full-time basis for a period of more than six (6) consecutive
months during any 12-month period due to a physical or mental
disability or infirmity. Notwithstanding the foregoing, in
the event that as a result of mental or physical incapacity
Executive earlier incurs a “separation from service”
within the meaning of Section 409A of the Internal Revenue
Code of 1986, as amended (“Section 409A”),
Executive will be deemed to have a termination of employment by
reason of permanent disability under this Agreement. In the
event of Executive’s termination be reason of permanent
disability, the Company shall pay to the Executive, within ninety
(90) days of the Executive’s termination, (i) the salary
accrued to the date of such termination and not theretofore paid,
(ii) any earned but unpaid Annual Bonus for the fiscal year
preceding the fiscal year in which such termination occurs and
(iii) a lump sum pro rata portion of any Annual Bonus that
Executive would have been entitled to receive pursuant to
Section 4 for the fiscal year in which such termination occurs
based upon the
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percentage of the fiscal year that
shall have elapsed through the date of Executive’s
termination of employment, payable when such Annual Bonus would
have otherwise been payable had Executive’s employment not
terminated, based on the Target for the fiscal year in which
termination occurs. Rights and benefits of the Executive
under the benefit plans and programs of the Company shall be
determined in accordance with the terms and conditions of such
plans and programs. Neither the Executive nor the Company shall
have any further rights or obligations under this Agreement, except
as provided in this Section 7.2 and Section 8.
7.3
Termination by the Company For
Cause .
If the Company terminates the Executive’s employment for
Cause (as defined in Section 9(a)), the Company shall pay to
the Executive, within ninety (90) days of the Executive’s
termination, the salary accrued to the date of termination and not
theretofore paid and any earned but unpaid Annual Bonus for the
fiscal year preceding the fiscal year in which such termination
occurs. Executive will not be entitled to the Pro-Rata
Bonus. Rights and benefits of the Executive under the benefit
plans and programs of the Company shall be determined in accordance
with the terms and conditions of such plans and programs.
Neither the Executive nor the Company shall have any further rights
or obligations under this Agreement, except as provided in this
Section 7.3 and Section 8.
7.4
Termination by the Company
Without Cause Prior to a Change in Control
. If the Company terminates
the Executive’s employment prior to a Change in Control (as
defined in Section 9(c)), other than pursuant to
Section 7.1 (Death), 7.2 (Disability), or 7.3 (Cause), the
Company shall pay to the Executive, within ninety (90) days of the
Executive’s termination, the salary accrued to the date of
termination and not theretofore paid to the Executive and any
earned but unpaid Annual Bonus for the fiscal year preceding the
fiscal year in which such termination occurs. In addition,
Executive shall be entitled to receive a lump sum pro rata portion
of the Annual Bonus, if any, that Executive would have been
entitled to receive pursuant to Section 4 hereof for the
fiscal year in which such termination occurs (but only to the
extent of achievement of the applicable performance standards for
such year) based upon the percentage of the fiscal year that shall
have elapsed through the date of Executive’s termination of
employment, payable when such Annual Bonus would have otherwise
been payable had Executive’s employment not terminated;
provided, however, that to the extent the Annual Bonus is subject
to the exercise of negative discretion, such discretion shall not
be exercised to reduce Executive’s Annual Bonus by a greater
percentage than is applied generally to senior executives subject
to such discretion. In addition, subject to Executive’s
compliance with the provisions of Section 8 and in lieu of any
severance otherwise payable to Executive under any severance plan
or policy maintained by the Company, the Company shall:
(i)
pay to Executive for the duration of
the Severance Period (as defined below) a monthly amount, in
accordance with the Company’s normal payroll practice, equal
to the sum of (x) his monthly base salary and (y) 1/12
th of his average Annual Bonus paid with respect to the
last two fiscal years ending immediately prior to his termination
of employment. The Severance Period shall be a number of full
or partial months, not to exceed 24 months, equal to the sum of
eighteen months plus two weeks plus (A) if the Executive has
less than 10 years of service with the Company (or its affiliates
and predecessors), one week for each year of service or (B) if
the Executive has 10 or more years of service with the Company (or
its affiliates and predecessors), two weeks for each year of
service;
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(ii)
continue Executive’s Health
Care Benefits under COBRA until the earlier of (x) the date on
which Executive’s COBRA eligibility ceases, or (y) the
twelve (12) month anniversary of Executive’s termination of
employment;
(iii)
pay, in lieu of continuation of
benefits under the plans listed in Section 6.1(ii), (iii),
(iv), (v) and (vi), a lump-sum amount of $50,000, which shall
be paid within 60 days of Executive’s termination of
employment;
(iv)
provide continued use (at no
after-tax cost as provided in Section 6.3) of
Executive’s Company automobile for a period of twelve (12)
months; and
(v)
pay to the Executive, at the end of
the twelve (12) month period following termination of employment,
an amount equal to the maximum amount that the Company would have
been obligated to contribute on his behalf as matching
contributions to the Company’s qualified and non-qualified
retirement plans for such twelve (12) month period, based on the
Executive’s most recent deferral elections with respect to
such plans, plus the maximum amount that the Company would have
been obligated to contribute on his behalf as non-elective
contributions to the Company’s qualified and non-qualified
retirement plans for such twelve (12) month period, based on his
salary in effect immediately prior to his termination of
employment, in each case to the extent such amounts would have been
vested at the end of the twelve (12) month period under the terms
of such plans had he remained in employment for such
period;
provided, however, that the
Company’s obligations under this Section 7.4 shall
terminate if Executive does not execute and deliver to the Company
a release in the form attached hereto as Appendix A within
forty-five (45) days of termination of employment or revokes such
release within any applicable revocation period. The rights
and benefits of the Executive under the benefit plans and programs
of the Company (other than any severance plan or policy) shall be
determined in accordance with the terms and conditions of such
plans and programs. Neither the Executive nor the Company
shall have any further rights or obligations under this Agreement,
except as provided in this Section 7.4 and
Section 8.
7.5
Termination by Executive With
Good Reason Prior to a Change in Control
. If, prior to a Change in
Control, the Executive terminates his employment with the Company
within one hundred and eighty (180) days of the occurrence of an
event giving rise to Good Reason (as defined in Section 9(b)),
the Company shall pay to the Executive, within ninety (90) days of
the Executive’s termination, the salary accrued to the date
of termination and not theretofore paid to the Executive and any
earned but unpaid Annual Bonus for the fiscal year preceding the
fiscal year in which such termination occurs. In addition,
Executive shall be entitled to receive a lump sum pro rata portion
of the Annual Bonus, if any, that Executive would have been
entitled to receive pursuant to Section 4 hereof for the
fiscal year in which such termination occurs (but only to the
extent of achievement of the applicable performance standards for
such year) based upon the percentage of the fiscal year that shall
have elapsed through the date of Executive’s termination of
employment, payable when such Annual Bonus would have otherwise
been payable had Executive’s employment not terminated;
provided, however, that to the extent the Annual Bonus is subject
to the exercise of negative discretion, such discretion shall not
be exercised to reduce Executive’s Annual Bonus by a
greater
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percentage than is applied generally
to senior executives subject to such discretion. In addition,
subject to Executive’s compliance with the provisions of
Section 8 and in lieu of any severance otherwise payable to
Executive under any severance plan or policy maintained by the
Company, the Company shall:
(i)
pay to Executive for the duration of
the Severance Period a monthly amount, in accordance with the
Company’s normal payroll practice, equal to the sum of
(x) his monthly base salary at the rate in effect immediately
prior to Executive’s termination of employment (or, if
higher, at the rate in effect immediately prior to the event giving
rise to the Good Reason condition) and (y) 1/12 th
of his average Annual Bonus paid with respect to the last two
fiscal years ending immediately prior to his termination of
employment;
(ii)
continue Executive’s Health
Care Benefits under COBRA until the earlier of (x) the date on
which Executive’s COBRA eligibility ceases, or (y) the
twelve (12) month anniversary of Executive’s termination of
employment;
(iii)
pay, in lieu of continuation of
benefits under the plans listed in Section 6.1(ii), (iii),
(iv), (v) and (vi), a lump-sum amount of $50,000, which shall
be paid within 60 days of Executive’s termination of
employment;
(iv)
provide continued use (at no
after-tax cost as provided in Section 6.3) of
Executive’s Company automobile for a period of twelve (12)
months; and
(v)
pay to the Executive, at the end of
the twelve (12) month period following termination of employment,
an amount equal to the maximum amount that the Company would have
been obligated to contribute on his behalf as matching
contributions to the Company’s qualified and non-qualified
retirement plans for such twelve (12) month period, based on the
Executive’s most recent deferral elections with respect to
such plans, plus the maximum amount that the Company would have
been obligated to contribute on his behalf as non-elective
contributions to the Company’s qualified and non-qualified
retirement plans for such twelve (12) month period, based on his
salary in effect immediately prior to his termination of employment
(or, if higher, at the rate in effect immediately prior to the
event giving rise to the Good Reason condition), in each case to
the extent such amounts would have been vested at the end of the
twelve (12) month period under the terms of such plans had he
remained in employment for such period;
provided, however, that the
Company’s obligations under this Section 7.5 shall
terminate if Executive does not execute and deliver to the Company
a release in the form attached hereto as Appendix A within
forty-five (45) days of termination of employment or revokes such
release within any applicable revocation period. The rights
and benefits of the Executive under the benefit plans and programs
of the Company (other than any severance plan or policy) shall be
determined in accordance with the terms and conditions of such
plans and programs. Neither the Executive nor the Company
shall have any further rights or obligations under this Agreement,
except as provided in this Section 7.5 and
Section 8.
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7.6
Termination by the Company
Without Cause or Termination by Executive With Good Reason
Following a Change in Control . If, following the occurrence of a Change in
Control, the Company (or successor) terminates the
Executive’s employment other than pursuant to
Section 7.1 (Death), 7.2 (Disability), or 7.3 (Cause), or the
Executive terminates his employment within one hundred and eighty
(180) days of the occurrence of an event giving rise to Good
Reason, the Company (or successor) shall pay to the Executive,
within sixty (60) days of the Executive’s termination, the
salary accrued to the date of termination and not theretofore paid
to the Executive and any earned but unpaid Annual Bonus for the
fiscal year preceding the fiscal year in which such termination
occurs. In addition, Executive shall be entitled to receive a
lump sum pro rata portion of the Annual Bonus, if any, that
Executive would have been entitled to receive pursuant to
Section 4 hereof for the fiscal year in which such termination
occurs (but only to the extent of achievement of the applicable
performance standards for such year) based upon the percentage of
the fiscal year that shall have elapsed through the date of
Executive’s termination of employment, payable when such
Annual Bonus would have otherwise been payable had
Executive’s employment not terminated; provided, however,
that to the extent the Annual Bonus is subject to the exercise of
negative discretion, such discretion shall not be exercised to
reduce Executive’s Annual Bonus by a greater percentage than
is applied generally to senior executives subject to such
discretion. In addition, subject to Executive’s
compliance with the provisions of Section 8 and in lieu of any
severance otherwise payable to Executive under any severance plan
or policy maintained by the Company, the Company (or successor)
shall:
(i)
pay the Executive, within sixty (60)
days of termination, a cash lump sum payment in an amount equal to
the number of months (including partial months) in the Severance
Period multiplied by the sum of (x) his monthly base salary at
the rate in effect immediately prior to Executive’s
termination of employment (or, if higher, at the rate in effect
immediately prior to the event giving rise to the Good Reason
condition) and (y) 1/12 th of his average Annual
Bonus paid with respect to the last two fiscal years ending
immediately prior to his termination of employment;
(ii)
continue Executive’s Health
Care Benefits under COBRA until the earlier of (x) the date on
which Executive’s COBRA eligibility ceases, or (y) the
twelve (12) month anniversary of Executive’s termination of
employment;
(iii)
pay, in lieu of continuation of
benefits under the plans listed in Section 6.1(ii), (iii),
(iv), (v) and (vi), a lump-sum amount of $50,000, which shall
be paid within 60 days of Executive’s termination of
employment;
(iv)
provide continued use (at no
after-tax cost as provided in Section 6.3) of a Company
automobile for a period of twelve (12) months; and
(v)
pay to the Executive, at the end of
the twelve (12) month period following termination of employment,
an amount equal to the maximum amount that the Company (or
successor) would have been obligated to contribute on his behalf as
matching contributions to the Company’s (or
successor’s) qualified and non-qualified retirement plans for
such twelve (12) month period, based on the Executive’s most
recent deferral elections with respect to such plans, plus the
maximum amount that the
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Company (or successor) would have
been obligated to contribute on his behalf as non-elective
contributions to the Company’s (or successor’s)
qualified and non-qualified retirement plans for such twelve (12)
month period, based on his salary in effect immediately prior to
his termination of employment (or, if higher, at the rate in effect
immediately prior to the event giving rise to the Good Reason
condition), in each case to the extent such amounts would have been
vested at the end of the twelve (12) month period under the terms
of such plans had he remained in employment for such
period;
(vi)
provide to the Executive
outplacement support for a period of up to twelve (12) months
following termination of employment; and
(vii)
provide to the Executive the
Gross-Up Payment (as defined in Section 10(a)) in accordance
with Section 10.
Notwithstanding the foregoing provisions of this
Section 7.6, if the Change in Control fails to qualify as a
“change of control” for purposes of Section 409A
of the Internal Revenue Code or if Section 409A otherwise so
requires, the accrued and unpaid sal
