MILACRON INC.
RETIREMENT & TRANSITION AGREEMENT FOR RONALD D.
BROWN
THIS RETIREMENT
& TRANSITION AGREEMENT FOR RONALD D. BROWN (the
“Agreement”) is made as of April 17, 2008 by and
between Milacron Inc., a Delaware corporation (the
“Company”) and Ronald D. Brown (the
“Executive”).
WHEREAS ,
the Executive intends to retire from the Company as President and
Chief Executive Officer; and
WHEREAS ,
the Company has not identified a successor for the Executive and
the Company desires to retain the Executive as President and Chief
Executive Officer of the Company until such successor is identified
and assumes the Executive’s responsibilities.
NOW,
THEREFORE , for good and valuable consideration, the Company
and the Executive hereby enter into this Agreement on the terms and
conditions hereinafter set forth:
The purpose of
this Agreement is to provide the Executive certain retirement
benefits and to ensure that the Executive’s responsibilities
as President and Chief Executive Officer are successfully
transitioned to the Executive’s successor.
Section 2.01
“Administrator” shall mean the Committee.
Section 2.02
“Agreement” shall mean this Retirement & Transition
Agreement for Ronald D. Brown.
Section 2.03
“Benefit” or “Benefits” shall mean the
benefits of the type that the Executive is entitled to receive
pursuant to Article III of the Agreement.
Section 2.04
“Benefit Period” shall mean the twenty-four month
period commencing on the Retirement Date.
Section 2.05
“Board” or “Board of Directors” shall mean
the Board of Directors of Milacron Inc.
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Section 2.06
“Bonus” shall mean 100% of the bonus earned by the
Executive (or that would have been earned by the Executive) under
the Milacron Inc. 2002 Short-Term Incentive Plan
(“STIP”) or similar successor or substitute annual
incentive plan or program had the Executive remained employed and a
participant in the STIP through the end of the applicable
“plan year” (as defined in the STIP), provided, the
amount so earned will be based on achievement of Company-wide
objective performance goals applicable thereunder (with Executive
deemed to have fully satisfied any individual performance goals)
without any exercise of negative discretion by the Committee to
reduce the amounts so earned and assuming (i) the 2008 annual
rate of “salary” (as defined in the STIP) is deemed to
be in effect for each applicable plan year and (ii) the
Executive’s potential base incentive award percentage under
Section 5.1 of the STIP will be 100% for the 2008 plan year
and 80% for the 2009 and 2010 plan years (or such other percentage
that would otherwise be applicable to the Executive in any similar
successor or substitute annual incentive plan or program and with
the final STIP award amount being more or less than, or equal to,
the base incentive award percentage, depending on performance as
provided under the terms of the STIP). For purposes of
Section 3.01(b), Bonus is the sum of: (i) the Bonus for
the 2008 and 2009 plan years and (ii) a pro-rated Bonus for
the 2010 plan year, with such proration to be determined by
multiplying the amount of the Bonus earned in 2010 by a fraction,
the numerator of which is the number of days of the Benefit Period
during the 2010 plan year, and the denominator of which is
365.
Section 2.07
“CEO” shall mean the Chief Executive Officer of
Milacron Inc., or if there is no CEO, then the highest ranking
officer of the Company.
Section 2.08
“Code” means the Internal Revenue Code of 1986, as
amended.
Section 2.09
“Committee” shall mean the Personnel and Compensation
Committee of the Board of Directors.
Section 2.10
“Company” shall mean Milacron Inc.
Section 2.11
“Disability” shall be as defined under the
Company’s long-term disability plan.
Section 2.12
“Executive” shall mean Ronald D. Brown
Section 2.13
“Long-Term Incentive Plan” shall mean the Milacron Inc.
2004 Long-Term Incentive Plan approved by the Company’s
stockholders and effective April 1, 2004, together with all
predecessor and similar successor or substitute intermediate and/or
long-term incentive compensation plans or programs.
Section 2.14
“Retirement” shall mean the Executive’s voluntary
termination of employment after May 8, 2008 and on or before
December 31, 2008, unless the Board and Executive hereafter
agree to any later date, that constitutes a “separation from
service” within the meaning of Section 409A of the
Code.
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Section 2.15
“Retirement Date” shall mean the earlier to occur of
(a) the last day of the 30-day period described in
Section 3.03(b) or (b) December 31, 2008, unless the
Board and Executive hereafter agree to any later date in which
Executive’s Retirement occurs.
Section 2.16
“Salary” shall mean an amount equal to the annual rate
of the Executive’s base salary payable to the Executive in
all capacities with the Company for 2008.
Section 2.17
“Separation Plan” shall mean the Milacron Inc.
Executive Retention/Separation Plan.
Section 2.18
“Subsidiary” shall mean any entity of which the Company
owns, directly or indirectly, more than 50% of the voting
securities.
The capitalized
terms used in this Agreement shall have the meanings given them in
this Article II, unless otherwise defined herein.
ENTITLEMENT TO AND DESCRIPTION OF
BENEFITS
Section 3.01
Cash and Other Benefits. Upon the Executive’s Retirement and
subject to his satisfaction of the conditions specified in
Section 3.03 of the Agreement, the Executive shall be entitled
to receive the following Benefits as well as those referred to
under Section 3.02: (a) a cash severance Benefit equal to
24 months of the Executive’s aggregate Salary to which
the Executive would have been entitled during the Benefit Period,
(b) a Bonus as determined in accordance with
Section 2.06, (c) any accrued but unpaid vacation pay,
any similar unpaid items that have accrued and to which the
Executive has become entitled as of his Retirement Date, including
declared but unpaid Bonuses and unreimbursed employee business
expenses, (d) a stipend of $52,500 to cover miscellaneous
transition expenses including one year of appropriate outplacement
assistance, one year of financial and other similar planning, and
legal fees, (e) the Executive shall continue to be covered
under the Company’s group medical and dental plan (such
coverage and terms thereof shall be identical to that provided to
similarly-situated Company executives then working for the Company
and such coverage shall run concurrent with, and then extend
beyond, as applicable, the maximum period of coverage provided
under COBRA), long-term disability plan and life insurance plan for
the Benefit Period; and (f) the Benefit Period will be counted
as additional age and service for vesting and benefit accrual
entitlement purposes under all of the Company’s supplemental
pension plans; including the Supplemental Retirement Plan and the
Supplemental Executive Retirement Plan (collectively, the
“Supplemental Plans”), it being acknowledged that
Executive will be fully vested in such accrued benefit thereby (if
not otherwise vested); provided, however, that the amount of
Benefits to which the Executive is entitled under this Agreement
shall not be included in the calculation of his Highest Average
Compensation (as defined under the Supplemental Plans) in
connection with the benefits to which the Executive is entitled
under the Supplemental Plans, provided that the 2007 bonus paid in
2008 under the STIP will be included in computing his 2008
Compensation for the purpose of determining Highest Average
Compensation.
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Section 3.02
Long-Term Incentive Plan Benefits. In addition to the Benefits
payable under Section 3.01, the Executive’s outstanding
Long-Term Incentive Plan awards shall be treated as
follows:
(a) The
Benefit Period will be counted as service for vesting purposes for
all stock options and stock appreciation rights. All stock options
and stock appreciation rights shall otherwise remain in effect for
a period of 30 days following the end of the Benefit Period,
but not longer than the remainder of their stated term, as set
forth in the agreements and/or Agreements governing such awards.
For the avoidance of doubt, on the Retirement Date, Executive shall
be entitled to any “retirement” vesting and exercise
benefits provided in accordance with the terms of such respective
award agreement (if not otherwise qualifying as
“retired” thereunder) if more favorable to Executive
than that provided in this paragraph (a) above.
(b) The
Benefit Period will be counted as service for vesting purposes for
all long-term cash, restricted stock, stock units, deferred units
and/or performance share awards. In addition, the long-term cash,
restricted stock, stock units, deferred units and/or performance
share awards shall remain in effect for the restriction period
and/or performance period as set forth in the agreements and/or
plans governing such awards and any awards thereunder shall be
prorated (in the case of performance-based awards, only if the
Company attains the applicable performance target(s), determined as
and when determined under the applicable award agreement(s)) by
multiplying the award by a fraction, the numerator of which is the
number of days between the award date and the last day of the
Benefit Period, and the denominator of which is the number of days
of the award restriction and/or performance period; provided, on
the Retirement Date, Executive shall be deemed
“retired” for vesting purposes under each such
respective award agreement (if not otherwise qualifying as
“retired” thereunder) and to have active employment
service for the duration of the Benefit Period for any performance
period for the purpose of earning any performance-based long-term
incentive award granted prior to the date hereof, if more favorable
to Executive than that provided in this subparagraph
(b) above.
Section 3.03
Conditions to Entitlement to Benefit. To be eligible to receive any
Benefits under the Agreement upon his Retirement, the Executive
must (a) continue as President and CEO of the Company and
perform the duties of the President and CEO through the date in
which the Executive’s successor assumes the responsibilities
as CEO (or until December 31, 2008 if earlier),
(b) continue as an employee of the Company for a period of
30 days after the date the Executive’s successor assumes
the duties of CEO (or until December 31, 2008 if earlier),
(c) cease his employment on the Retirement Date, and
(d) execute (and not revoke during the seven-day revocation
period prescribed by the Age Discrimination in Employment Act of
1967, as amended, or any similar revocation period, if applicable)
the General Release substantially in the form attached hereto as
Appendix A no later than 60 days following the Retirement
Date. In addition, by accepting payment of any Benefit or any
benefit under the Company’s Supplemental Plans, the Executive
agrees not to be employed, or consult (in each case for a period of
2 years), in any business which is, or is about to be, engaged
in a business of the same or substantially the same nature as the
business of the Company or its subsidiaries without prior written
consent of the Company, and breach of this agreement by the
Executive shall be cause for termination of
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payment of the
Benefits provided hereunder (and this sentence shall be regarded as
an amendment of and shall supersede and replace any covenant
restricting Executive’s post-employment activities set forth
in the Supplemental Plans.).
Section 3.04
Further Company Obligations. In exchange for, and as consideration
for the Executive delivering his executed General Release referred
to above, the Company shall deliver its executed General Release,
in substantially the same form attached hereto as Annex 1 to
Appendix A.
Section 3.05
Method of Payment. The cash Benefits to which the Executive is
entitled, as determined pursuant to Section 3.01, as
applicable, shall be paid in one or more lump sums, as provided in
this paragraph below, subject to all employment and withholding
taxes applicable to the type of payments made. For Benefits payable
pursuant to Section 3.01, the Salary, financial planning and
legal fee portion of the Benefit, together with interest provided
under Section 6.01, will be paid within 30 days from the
later of: (i) six months after Executive’s Retirement
Date; or (ii) after the expiration of any revocation period
for the General Release signed by the Executive pursuant to
Section 3.03, the outplacement benefit under
Section 3.01(d) shall be paid or provided as soon after
expiration of the revocation period of the General Release as may
be requested by Executive (to the extent not required to be
postponed to a later date pursuant to Section 409A(2)(B)(i) of
the Code and Treasury regulations thereunder), and the Bonus
portion of the Benefit will be paid at the same time as all other
STIP payments are paid for the applicable performance
period.
The Long-Term
Incentive Plan awards, referred to in Section 3.02(b), will be
determined, paid in the form, paid at the time (subject to
Section 6.01), and paid subject to applicable withholding, all
as provided in the respective award agreement(s), as modified in
Section 3.02(b).
The taxable
welfare benefits described in Section 3.01(e) (excluding the
disability benefit and death benefit) are intended to be exempt
from Section 409A of the Code as exempt medical reimbursement
benefits and in-kind medical benefits. In the event these benefits
are not so exempt from Section 409A of the Code, then the
benefits provided in Section 3.01(e) shall be subject to the
following additional rules: (i) the Executive must request
reimbursement of eligible expenses (to the extent required) within
120 days of the end of the tax year in which the expense is
incurred, (ii) the Company will reimburse the Executive within
90 days of the date the expense reimbursement request is
received in writing from the Executive (or such later date required
in Section 6.01), (iii) the benefits provided in
Section 3.01(e) may not be exchanged for cash or another
benefit, and (iv) benefits payable or provided under
Section 3.01(e) in one year may not affect the amount of
benefits payable or provided in another year.
Section 3.06
Death or Disability. If the Executive incurs a Disability or dies
before his Retirement Date, no Agreement payments or other benefits
will be due and owing to the Executive or, in the case of his
death, to his estate or beneficiary.
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If the Executive
incurs a Disability or dies after his Retirement Date, the
Committee shall cause any Benefits and other amounts due under the
Agreement to be paid to the Executive or, in the case of his death,
to the Executive’s designated beneficiary or to his
estate.
The
Executive’s beneficiary designation shall be made in the
manner, and at the time, prescribed by the Committee in its
reasonable discretion. In the absence of an effective beneficiary
designation hereunder, the Executive’s estate shall be deemed
to be the designated beneficiary.
Section 3.07
Nonduplication of Benefits. In the event of the payment of benefits
under the Executive Severance Agreement, if any, applicable to the
Executive, related to the termination of the Executive, the
Executive Severance Agreement shall continue in full force and
effect and the Executive only shall be entitled to the benefits
provided thereunder, so that there shall be no duplication of
Benefits provided under this Agreement.
Section 3.08
Coordination of Benefits. The Separation Plan shall remain in
effect and Executive shall be a participant thereunder until the
Executive’s Retirement Date, provided, however, the Executive
shall not be entitled to benefits under the Separation Plan unless
he incurs a “qualifying termination” (as defined in the
Separation Plan) before the Executive’s Retirement Date;
provided in the event of a “qualifying termination “
thereunder, Executive shall be entitled to all Benefits and other
rights and amounts due him and shall be subject to all obligations
under this Agreement in lieu of amounts and benefits due him and
obligations under the Separation Plan. The Company and the
Executive agree that the Executive will not become entitled to
benefits under the Separation Plan solely as a result of the
decrease in the Executive’s responsibilities in connection
with the Executive’s successor assuming the responsibilities
of CEO and/or President; provided, however, the Company agrees that
the Executive will continue to be entitled to the same compensation
and benefits previously extended to the Executive in 2008 through
the Retirement Date.
The Committee or
its designee shall, on the basis of information supplied by the
Company, calculate the amount of the Benefits payable to the
Executive, and determine the manner and time of payment of the
Benefits consistent with the provisions hereof, which type and
amount of benefits shall be determined by the Committee and
communicated to the Executive. The Company shall make such payments
as so determined to be due to the Executive. If a dispute with the
Executive arises, such dispute shall be resolved in accordance with
Section VII hereof.
TERM, AMENDMENT AND
TERMINATION
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No provision of
this Agreement may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing and
signed by the Executive and such officer as may be specifically
designated by the Board. No waiver by either party hereto at any
time of any breach by the other party hereto of, or compliance
with, any condition or p
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