Looking for an agreement? Search from over 1 million agreements now.

Severance Agreements

This is an actual contract by AIR Products & Chemicals.
Browse the agreement preview below and buy the entire agreement for $35
Search This Document
Company]


Date:


Name


Address


Dear Name:


Air Products and Chemicals, Inc. ("Air Products") considers a sound and vital management to be essential to protecting and enhancing its best interests and those of its shareholders. In this connection, Air Products recognizes that, as is the case with any publicly held corporation, the possibility of a change in control of Air Products may develop, although no such change is now expected or contemplated.


The Management Development and Compensation Committee of the Air Products Board of Directors and the Board believe it imperative that the Company and the Board be able to rely upon key members of the Company's management to continue in their positions and to act in the best financial interests of Air Products shareholders in the event of a bid, offer or proposal to take control of Air Products and following any change in control of Air Products. Therefore, the Committee and the Board have determined that appropriate steps should be taken to protect key members of the Company's management against significant negative personal financial consequences that might result from a change in control, and to reinforce and


encourage the continued attention and dedication of such key members of management to their duties without distraction should the possibility of a change in control of Air Products ever arise.


In order to induce you to remain in the employ of the Company and to assure your continued dedication and the availability of your advice and counsel during the possibility and pendency of, and following, a change in the control of Air Products, Air Products agrees that it will provide you, or cause you to be provided the severance benefits set forth in this severance agreement ("the Agreement") in the event your employment with the Company is terminated subsequent to a Change in Control under the circumstances described herein.


1. DEFINITIONS
-----------


"Act" means the Securities Exchange Act of 1934.


"Annual Incentive Plan" shall mean the Air Products and Chemicals, Inc. 1997 Annual Incentive Plan and/or any similar, successor or substitute short-term bonus plan, program or pay practice.


"Base Salary" shall mean your total annual salary payable by the Company in accordance with its normal compensation practices, including any amounts deferred pursuant to the Savings Plans or Code Section 125.


"Board" shall mean the Board of Directors of Air Products.


2


"Cause" shall mean either of the following:


(A) The willful and continued failure by you to substantially perform
your duties with the Company (other than any such failure
resulting from your incapacity due to physical or mental illness
or injury or any such actual or anticipated failure after the
issuance by you of a Termination Notice for Good Reason), over a
period of not less than sixty days after a demand for substantial
performance is delivered to you by the Board which specifically
identifies the manner in which the Board believes that you have
not substantially performed your duties; or


(B) The willful engaging by you in gross misconduct materially and
demonstrably injurious to the Company; provided that no act or
failure to act on your part will be considered willful if done, or
omitted to be done, by you in good faith and with reasonable
belief that your action or omission was in the best interest of
the Company, or if any member of the Board who was not a party to
such act or omission had actual knowledge of it for at least
twelve months.


"Change in Control" shall mean the first to occur of:


A. Stock Acquisition. Any "person", as such term is used in Sections
13(d) and 14(d) (2) of the Act, other than Air Products, or any
corporation a majority of whose outstanding stock entitled to vote is
owned, directly or indirectly, by Air Products (a


3


"Subsidiary"), or a trustee of an employee benefit plan sponsored
solely by Air Products and/or such a Subsidiary, is or becomes, other
than by purchase from Air Products or such a Subsidiary, the
"beneficial owner", as such term is defined in Rule 13d-3 under the
Act, directly or indirectly, of securities of Air Products
representing 20% or more of the combined voting power of Air Products'
then outstanding voting securities. Such a Change in Control will be
deemed to have occurred on the first to occur of: the date securities
are first purchased by a tender or exchange offeror, the date upon
which Air Products first learns of the acquisition of 20% or more of
such securities, or the later of the effective date of an agreement
for the merger, consolidation or other reorganization of Air Products,
or the date of approval thereof by a majority of Air Products'
shareholders.


B. Change in Board. During any period of two consecutive years,
individuals who at the beginning of such period were members of the
Board cease for any reason to constitute at least a majority thereof,
unless the election or nomination for election by Air Products'
shareholders of each new director was approved by a vote of at least
two-thirds of the directors then still in office who were directors at
the beginning of the period. Such a Change in Control will be deemed
to have occurred on the date upon which the requisite majority of
directors fails to be elected by the shareholders of Air Products.


C. Other Events. Any other event or series of events which,
notwithstanding any other provision of this definition to the
contrary, is determined, by a majority of the outside


4


members of the Board serving in office at the time such event or events
occur, to constitute a Change in Control of Air Products for purposes of
this Agreement. Such a Change in Control will be deemed to have occurred on
the date of such determination or on such other date as said majority of
outside members of the Board shall specify.


Notwithstanding the foregoing, there shall not be a Change in Control if, in advance of such event, you agree in writing that such event shall not constitute a Change in Control.


"Code" means the Internal Revenue Code of 1986, as amended from time to time.


"Committee" means the Management Development and Compensation Committee of the Board or a successor Committee of the Board.


"Common Stock" means the common stock, $1 par value, of Air Products.


"Company" means Air Products and any successor in interest thereto, and any affiliate of Air Products in which it holds, directly or indirectly, a controlling interest and to whom your employment has been transferred with your consent.


"Contract Period" shall mean the period commencing on a Change in Control and ending three years following the Change in Control.


5


"Disability" shall exist where, as a result of your incapacity due to physical or mental illness or injury you have been absent from the performance of your duties with the Company for at least six consecutive months.


"Fiscal Year" shall mean the fiscal year of the Company which commences on October 1 of each calendar year and ends on September 30 of the following calendar year, or such other fiscal year as the Company may adopt for keeping its financial records.


"Good Reason" shall mean the occurrence of any of the following without your consent:


A. An adverse change, during the Contract Period, in your position or
office with the Company, or a diminution in the duties, reporting
responsibilities and authority with the Company which you held and
performed during the ninety-day period immediately preceding the
beginning of the Contract Period, or an assignment to you of duties or
responsibilities, which, in your reasonable judgment, are not
consistent with your status or position with the Company immediately
prior to the Change in Control; provided that, any of the foregoing in
connection with termination of your employment for Cause, Retirement
or Disability shall not constitute Good Reason.


B. The failure by the Company to pay you a Base Salary, in substantially
equal installments conforming with the Company's normal pay practices,
at a rate at least equal to your Base Salary rate in effect
immediately before the beginning of the


6


Contract Period or a failure to increase such Base Salary each
year, beginning one year after the last increase in your Base Salary
occurring before the beginning of the Contract Period, by an amount
which at least equals, on a percentage basis, the average annual
percentage increase in your Base Salary during the three full Fiscal
Years immediately preceding the beginning of the Contract Period;
provided, however, that the Company may reduce your Base Salary or
adjust your Base Salary on a smaller percentage basis if such
reduction or adjustment is no less favorable to you on a percentage
basis than the average annual percentage reduction or adjustment
during the applicable Fiscal Year for all Highly Compensated
Employees.


C. The failure by the Company to continue the Annual Incentive Plan
and/or initiate and maintain other plans, programs or practices
providing you with benefits substantially similar in type and amount
to those under the Annual Incentive Plan, or a failure to pay you
bonus awards each year during the Contract Period under the Annual
Incentive Plan or such similar bonus plan (together, the "Bonus
Plans"), beginning no later than one year after the date of your last
grant under the Annual Incentive Plan before the beginning of the
Contract Period, at least equal in amount to the average of the bonus
awards granted to you under the Annual Incentive Plan during and/or
for each of the three full Fiscal Years immediately preceding the
beginning of the Contract Period; provided, however, that the Company
may reduce or adjust your bonus awards paid each year to a lower
amount if such reduction or adjustment is on a basis no less favorable
to you than the basis upon which it reduces or adjusts


7


awards under the Bonus Plans or comparable plans for all Highly
Compensated Employees during the applicable Fiscal Year;


D. The failure by the Company to continue the Long-Term Incentive Plan
and/or initiate and maintain other plans, programs or practices
providing you with benefits substantially similar in type and amount
to those under the Long Term Incentive Plan or a failure to grant you
awards each year under the Long Term Incentive Plan and/or such
similar incentive plans (together, the "Incentive Plans"), beginning
one year after your last grant under the Long Term Incentive Plan
before the beginning of the Contract Period, at a level at least equal
in the aggregate to the average value, determined based on valuation
models normatively used by publicly held corporations of similar size
to the Company in setting long term incentive compensation levels, of
your aggregate annual awards granted each year under the Long Term
Incentive Plan during and/or for the last three Fiscal Years preceding
the beginning of the Contract Period; provided, however, that if the
Company provides the Incentive Plans or comparable plans for Highly
Compensated Employees, the Company may maintain the level of awards
granted to you each year under the Incentive Plans at a lower value if
such benefits are determined on a basis no less favorable to you than
for all Highly Compensated Employees during the applicable Fiscal
Year.


8


E. The failure by the Company to pay you in respect of any of your
deferred or other awards under the Bonus Plans or the Incentive Plans
when due and payable under the terms of said Plans;


F. The failure by the Company to pay (or reimburse you for) all
reasonable moving expenses incurred by you relating to a change of
your principal residence in connection with an employment related
relocation required by the Company and indemnify you against any
"loss" realized in the sale of your principal residence in connection
with such relocation, defined as the difference between the actual
sale price of such residence (net of all commissions, fees, taxes and
other closing costs borne by seller) and the higher of (a) your
aggregate investment in such residence or (b) the fair market value of
such residence as determined by a real estate appraiser designated by
you and reasonably satisfactory to the Company (who shall be either a
member of the Society of Real Estate Appraisers, the American
Institute of Real Estate Appraisers or the National Association of
Independent Fee Appraisers);


G. The failure by the Company to reimburse you for reasonable travel and
other business expenses in accordance with the Company's applicable
policies, procedures and practices provided that you properly account
for such expenses in accordance with then applicable Company policy;
and


9


H. A material reduction in your aggregate benefits, such as the failure
by the Company to either continue in effect any employee pension
benefit or welfare benefit plan, program or practice in which you are
eligible to participate immediately before the beginning of the
Contract Period, including but not limited to, the Pension Plans, the
Savings Plans, and the Company's life insurance, medical, dental,
health and accident, disability, severance and paid vacation plans,
programs and practices (such plans, programs and practices herein
together referred to as the "APCI Benefit Plans"), or, in lieu
thereof, to initiate and maintain other plans, programs or practices
providing you with benefits substantially similar in type and amount
to those under the APCI Benefit Plans, with your aggregate benefits
under the APCI Benefit Plans and such similar benefit plans (together,
the "Benefit Plans") comparable in type and amount to your benefits
under the APCI Benefit Plans immediately before the beginning of the
Contract Period, or the Company's failure to maintain for you any
other material fringe benefit or perquisite enjoyed by you immediately
before the beginning of the Contract Period.


I. Any purported termination of your employment for Disability or for
Cause which is not effected in accordance with the procedures required
in Section 4.


J. The failure of the Company to obtain the written assumption of this
Agreement by any successor of the Company prior to the effectiveness
of any such succession.


10


"Highly Compensated Employees" shall mean the highest paid one percent of employees of the Company together with all corporations, partnerships, trusts, or other entities controlling, controlled by, or under common control with, the Company.


"Long Term Incentive Plan" shall mean the Air Products and Chemicals, Inc. 1997 Long Term Incentive Plan and/or any similar, successor or substitute long-term incentive compensation plan or program.


"Notice Date" shall mean the date a Termination Notice prepared by the Company or you is received by you or the Company, respectively.


"Pension Plans" shall mean, the Air Products and Chemicals, Inc. Pension Plan for Salaried Employees, as amended from time to time together with any similar, succeeding or substitute plan, and the Supplementary Pension Plan of Air Products and Chemicals, Inc. as amended from time to time, together with any similar, succeeding or substitute plan, and any private annuity or pension agreement between you and the Company.


"Retirement" shall mean (1) your voluntary retirement before attaining the normal retirement age under the Pension Plans, with an immediate non-actuarially reduced pension under the Pension Plans, provided that Termination for Good Reason before such normal retirement age shall not be deemed a Retirement for purposes of this Agreement even though you are eligible for and elect to receive, an immediate non-actuarially reduced pension under the Pension Plans, or (2) Termination of Employment in accordance with any retirement


11


arrangement other than under the Pension Plans which is established with your consent with respect to you, provided that Termination for Good Reason shall not be deemed a Retirement for purposes of this Agreement even though you are eligible to retire, and receive benefits under, any such retirement arrangement, or (3) mandatory retirement as set forth under a policy of the Company as it existed prior to the Change in Control or as agreed to by you following a Change in Control.


"Savings Plans" shall mean the Air Products and Chemicals, Inc. Retirement Savings and Stock Ownership Plan, as amended from time to time, together with any similar, succeeding or substitute plan, and the Air Products and Chemicals, Inc. Supplementary Savings Plan, as amended from time to time, together with any similar, succeeding or substitute plan.


"Target Annual Bonus" shall mean the target bonus under the Annual Incentive Plan which is approved by the Committee for the applicable Fiscal Year for Highly Compensated Employees at your grade level or other comparable compensation level, or, if no such target bonus has been determined for such Fiscal Year, such target bonus for the most recent Fiscal Year for which one was determined;


"Termination Date" means the effective date of a Termination of Employment for any reason, including death, Disability, or Retirement, whether by the Company or you.


12


"Termination", "Termination of Employment" or "Termination of your Employment" shall mean the termination of your employment with the Company, whether by you or the Company.


"Termination Notice" shall mean the notice required by Subsection 3A.


2. TERM OF AGREEMENT
-----------------


This Agreement will commence on the date of your signing hereof and will continue while you are in the active employment of the Company until 30 September 2001 and, beginning on 1 October 2001 and each one year anniversary thereof, the term of this Agreement will automatically be extended for one additional year unless, at least (90) ninety days prior to such date, either party gives written notice to the other that it does not wish to extend this Agreement. Notwithstanding any such written notice, if a Change in Control shall have occurred prior to receipt of the notice or does occur within (90) ninety days of receipt of the notice, the attempted termination of the Agreement by the Company shall be ineffective and the Agreement shall continue until the end of your Contract Period. If a Change in Control otherwise occurs during the term of this Agreement, this Agreement will continue in effect until the end of the Contract Period.


3. TERMINATION PROCEDURES
----------------------


A. Termination Notice. During the Contract Period, any Termination of Employment by the Company or by you must be communicated by a written Termination Notice


13


to the other party hereto. The "Termination Notice" must (i) specify the Termination Date; (ii) indicate the specific provisions in this Agreement, if any, applicable to the Termination and set forth in reasonable detail the facts and circumstances, if any, claimed to provide a basis for application of the provision so indicated; (iii) if given by the Company to you for other than Disability or Cause, specify, with supporting calculations, the amount the Company believes to be payable to you under this Agreement as a result of such Termination; and (iv) contain a copy of any other notice, resolution, demand or other document required to effect a Termination under provisions of the Agreement identified in (ii) above.


B. Additional Termination Procedures.


(i) During the Contract Period the Company may not Terminate your Employment for Cause unless and until: (a) there has been delivered to you a copy of a resolution Terminating your Employment for Cause duly adopted by the affirmative vote of not less than three-quarters of the entire membership of the Board; (b) such resolution was adopted at a meeting of the Board called and held for the purpose of considering such resolution; (c) you were provided reasonable notice of the Board's intent to consider the resolution and a reasonable opportunity, together with your counsel, to be heard by the Board at such meeting; and (d) the resolution finds, in the good faith opinion of the Board, that you have engaged in conduct constituting Cause and specifies the particulars thereof in detail, which particulars must be consistent with those specified in the notice of the Board meeting given to you.


14


(ii) During the Contract Period, the Company may not Terminate your Employment for Disability if you return to the performance of your duties on a substantially full-time basis within forty-five days of receiving the Termination Notice specifying Disability as the basis for Termination.


C. Termination Date. "Termination Date" shall be: (i) if your employment is terminated due to your death, the date of your death, (ii) if your employment is terminated for Disability, at least forty-five days after the Termination Notice is given (provided that you have not returned to the full-time performance of your duties during such period) and, (iii) if your employment is terminated for any other reason, the date specified in the Termination Notice by the party giving the Notice, which date must be at least forty-five days after the Termination Notice if given by you for Good Reason or by the Company for any reason other than Cause; provided, however, that if within forty-five days after any Termination Notice is given, the party receiving such Termination Notice notifies the other party that a dispute exists, the Termination Date will be the date on which the dispute is finally determined, either by mutual written agreement of the parties, by a binding arbitration award or by a final judgment, order or decree of a court of competent jurisdiction (which is not appealable or with respect to which the time for appeal therefrom has expired and no appeal has been perfected); and provided further, however, that your Termination Date shall be extended by a notice of dispute only if such notice is given in good faith and the party giving such notice pursues the resolution of such dispute with reasonable diligence, and your Termination Date shall in no event be extended beyond the end of the Contract Period.


15


D. Continuation of Salary and Benefits During Pendency of Dispute. Until any dispute or controversy referred to in Subsection 3C above is finally resolved in accordance with such Subsection, the Company will (i) continue to pay you your full Base Salary at the higher of the rates in effect on the date your Termination Notice is received or immediately before any purported reduction in your Base Salary constituting Good Reason, and (ii) continue your participation in all Benefit Plans in which you were participating before such notice date provided that your continued participation in such Plans is possible under the general terms and conditions thereof. If your continued participation in any such Benefit Plan is barred by the terms thereof, the carrier or otherwise, the Company will arrange to provide you with benefits substantially similar to those which you would receive under such Plan. You will be entitled to seek specific performance of your rights under this Subsection 3D until your Termination Date during the dependency of any dispute or controversy arising under or in connection with this Agreement.


4. COMPENSATION UPON TERMINATION OF EMPLOYMENT.
--------------------------------------------


A. Termination for Cause, Death, Disability, or Retirement. If during the Contract Period the Company terminates your employment for Cause, or your employment terminates due to death, Disability or Retirement, the Company shall pay to you on the Termination Date your full Base Salary and accrued vacation pay through the Termination Date, plus any benefits or awards which have been earned by you or become payable to you under any policy or employee compensation or benefit plan of the Company. The benefits payable to you, or due to your death, Disability, Retirement or other Termination of Employment under all Benefit


16


Plans, Bonus Plans and Incentive Plans in which you are participating before such Termination of Employment, will be paid as provided under such Plans and the Company will have no further obligation.


B. Termination Without Cause, Death, Retirement or Disability or for Good Reason. If during the Contract Period the Company Terminates your Employment other than for death, Retirement, Disability or Cause (it being understood that a purported termination for Disability or Cause which is disputed and finally determined not to have been proper or which is not effected in accordance with the procedures required in Section 3 will be a Termination other than for Cause or Disability), or you Terminate your Employment for Good Reason, then Air Products will provide you or cause you to be provided the payments and benefits described below in this Subsection 4B.


(i) Cash Payment. The Company will pay to you on or before the fifth day following your Termination Date, a lump sum cash payment equal to the sum of the following amounts:


(a) Your Base Salary through your Termination Date at the higher of the rate in effect on the Termination Date or the rate in effect immediately before any purported reduction in your Base Salary constituting Good Reason (such amount to be reduced by the amount of any Base Salary payments previously paid by the Company to you for the same period or any portion thereof under Subsection 3D above or otherwise);


17


(
-- End of Preview --
Home| About Us| FAQ| Subscription | Contact Us |