exv10w1



 






EXHIBIT 10.1




EXECUTIVE EMPLOYMENT AGREEMENT




     EXECUTIVE EMPLOYMENT AGREEMENT dated March 14, 2005, between EAGLEPICHER INCORPORATED (the
“Company”) and ALBERT IEDEMA (the “Executive”).



     WHEREAS, it is the intention of the parties that Executive will be employed as the President
and Chief Executive Officer of the Company during a period of transition; and



     WHEREAS, it is the intention of the parties that during the transition the Company will
evaluate possible divestitures of business units or other assets in order to reduce debt, as well
as various other financing alternatives.



     NOW THEREFORE, the Company intends to employee the Executive in accordance with the following
terms and conditions:



     1. EMPLOYMENT AND DUTIES. The Company hereby employs the Executive, and the Executive accepts
employment, effective as of March 14, 2005, as President and Chief Executive Officer of the Company
and of Eagle-Picher Holdings, Inc. during the period of transition, to perform such duties
consistent with his position as may be assigned to him by the Board of Directors of the Company
(the “Board”). The Executive shall report directly to the Board of Directors of the Company. The
Executive shall devote substantially all of his time during normal business hours to the business
and affairs of the Company. The Executive shall not, during his employment pursuant to the
Agreement, engage in any other business activity or occupation for gain, profit or other pecuniary
advantage without the prior consent of the Board; provided, however, that such a prohibition shall
not prohibit the Executive from investing or trading for his own benefit in stocks, bonds,
securities or other forms of investment.



     2. TERM OF AGREEMENT. This Agreement shall be for a term of one (1) year.



     3. COMPENSATION; EXPENSES; BENEFITS.



               3(a) BASE SALARY. As compensation for his services hereunder in whatever capacity rendered
for the Company, the Company shall pay to the Executive a base salary, payable in equal
installments twice a month at such times as is customary with respect to the Company’s executives,
at a rate of $700,000 per year (“Base Salary”). The Executive will not be entitled to any
additional compensation for any further positions held with the Company.



               3(b) EXECUTIVE INCENTIVE BONUS. The Executive shall be entitled to a bonus based on his
achievement of objectives mutually agreed upon by the Board and the Executive. Said objectives
shall be quantified and reduced to writing by the Executive no later than one (1) month after the
effective date of this Agreement and submitted to the Board for approval. Any bonus earned
hereunder shall not be paid until approval by the Board of the Company’s audited financial
statements for the fiscal year to which the bonus relates. The parties agree that the Executive’s
target bonus shall be eighty percent (80%) of his base salary.



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               3(c) SPECIAL BONUS. The Executive shall be entitled to one special bonus, that will be
determined by the Board, in the target amount of up to One Million Two Hundred Thousand Fifty
Thousand Dollars ($1,250,000.00) based on his efforts in bringing the Company into compliance
with the terms of its senior secured debt, and a second special bonus, that will be determined by
the Board, in the target amount of up to One Million Two Hundred Thousand Fifty Dollars
($1,250,000.00) based on his efforts in reducing the Company’s debt.



               3(d) LONG TERM BONUS PROGRAM. The Executive shall not be entitled to participate in any Long
Term Bonus Program which is approved by the Board for executives of the Company.



               3(e) EMPLOYEE BENEFIT PLANS. The Executive shall be eligible to receive the value of all
pension, hospitalization, medical, and life insurance programs and/or other retirement, welfare and
fringe benefit plans, programs or arrangements (excluding the Company’s long-term disability
program for which the Executive shall receive coverage) in effect for executives of the Company
(the “Employee Benefit Plans”) in lieu of his participation in said Employee Benefit Plans.
Executive shall waive participation in all such plans in a form of waiver as required by the
Company. The Company shall provide the Executive with a list of said plans, along with the annual
cash value of each within thirty (30) days of the execution of this Agreement. Executive shall be
paid the cash value in equal monthly installments.



               3(f) AUTOMOBILE. The Company shall provide to the Executive the use of a reasonably priced
automobile for which the Company shall pay the cost of insurance, taxes, maintenance and business
related operating expenses upon presentation by the Executive of documentation supporting such
expenses, plus an additional amount necessary to pay all federal, state, local and payroll taxes on
all payments related to said automobile.



               3(g) BUSINESS EXPENSES. The Executive shall be entitled to reimbursement for his ordinary
and necessary business expenses incurred in the performance of his duties hereunder including
International-type Business Class travel for all flights of three (3) hours or more (including
travel to Europe), reimbursement for hotel costs (or housing costs if no hotel is used), and for
reasonable upgrade charges and business related entertainment expenses, provided that his claims
are documented in accordance with the Company’s usual rules and regulations, and are reviewed
quarterly by the Board and reimbursement approved by the Chairman of the Board.



               3(h) VACATION. The Executive shall be entitled to four (4) weeks vacation during the term
of this Agreement.



               3(i) RELOCATION COSTS. The Executive shall be entitled to reimbursement of reasonable
expenses for his relocation back to The Netherlands upon the termination of this Agreement.



     4. TERMINATION OF EMPLOYMENT. Notwithstanding any other provision of this Agreement, the
Executive’s employment may be terminated as follows:



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               4(a) CAUSE. Cause means any of the following: (i) the Executive engages in an act or acts of
dishonesty or engages in misconduct that constitutes a felony; or (ii) the Executive’s material
breach of his duties under this Agreement which breach is not cured by the Executive after receipt
of written notice of such breach from the Board to the Executive. The Company shall give the
Executive written notice of its decision to terminate the Executive pursuant to this Paragraph.
In the event the Executive is terminated for Cause pursuant to this Paragraph, the Company’s
obligations to pay Compensation, Expenses, or Benefits set forth in Paragraph 3 of this Agreement
shall cease on the date of termination, except for unpaid base salary and the unpaid cash value of
the Employee Benefit Plans for the period prior to the termination, less any amounts owed by
Executive to the Company. In such event, the Executive shall not be entitled to any bonus of any
type.



               4(b) BY COMPANY WITHOUT CAUSE. By the Company, other than pursuant Paragraphs 4(a), 4(e) or
4(f), in which event the Executive’s employment hereunder shall be deemed terminated, the Executive
shall be entitled to payments in accordance with the terms and conditions set forth in Appendix A
to this Agreement.



               4(c) BY EXECUTIVE WITH GOOD REASON. By the Executive, upon the occurrence of any of the
following events:




               4(c)(1) Removal of the Executive from the positions referred to in Paragraph 1.




               4(c)(2) Failure of the Company to maintain a commercially reasonable level of D&O
insurance.




In the event that Executive terminates his employment pursuant to Paragraph 4(c)(1) or (2),
Executive shall be entitled to payments in accordance with the terms and conditions set
forth in Appendix A to this Agreement.



               4(d) BY EXECUTIVE WITHOUT GOOD REASON. By the Executive, at any time and for any reason, in
which event the Executive’s employment hereunder shall be deemed terminated, the Company’s
obligations to pay Compensation, Expenses, or Benefits described in Paragraph 3 of this Agreement
shall cease on the date of such termination, except for unpaid and earned salary and unpaid cash
value of Employee Benefits Plans for the period prior to the termination. In such event, the
Executive shall not be entitled to any bonus of any type.



               4(e) DISABILITY. In case of the Executive’s disability, which for this purpose shall mean
that, as a result of illness or injury, the Executive is unable substantially to perform his duties
hereunder, the Company may terminate the Executive’s employment hereunder by giving him at least
thirty (30) days’ notice of termination. During the period of his disability, Executive shall
receive his Base Salary and a pro rata share of his bonuses, as determined in the discretion of the
Board. The Executive agrees that in the event of any dispute under this Paragraph, he will submit
to a physical examination by a licensed physician selected by the Company. If the Company
terminates the Executive’s employment pursuant to the foregoing, the Executive will be



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eligible to receive payments under the Company’s long-term disability policy, subject to the terms
of said Plan.




               4(f) DEATH. Upon the death of the Executive, the Company shall continue to make payments
under Paragraphs 3(a) (“Base Salary”) for three (3) months from the date of death. In addition,
Executive’s estate shall be entitled to receive a pro rata share of Executive’s bonuses, as
determined in the discretion of the Board.



     5. INDEMNIFICATION. The Company will indemnify the Executive (and his estate) to the fullest
extent permitted by the laws of the State of Ohio that are in effect at the time of the subject act
or omission, or the Amended and Restated Articles of Incorporation and Regulations of the Company,
as in effect at such time or on the effective date of this Agreement, whichever affords or afforded
greater protection to the Executive (including payment of expenses in advance of final disposition
of a proceeding). Furthermore, the Executive shall be entitled to the protection of any insurance
policies the Company may elect to maintain generally for the benefit of its directors and officers,
against all costs, charges and expenses whatsoever incurred or sustained by him or his legal
representatives in connection with any action, suit or proceeding to which he (or his legal
representatives or other successors) may be made a party by reason of his being or having been a
director, officer or employee of the Company or his serving or having served any other enterprise
as a director, officer or employee at the request of the Company.



     6. SURVIVAL OF OBLIGATIONS. The obligations under Paragraphs 5 (Indemnification) shall
survive the termination of this Agreement for any reason, whether such termination is by the
Company, by the Executive, upon the expiration of this Agreement or otherwise.



     7. SEVERABILITY. In case any one or more of the provisions or part of a provision contained
in this Agreement shall for any reason be held to be invalid, illegal or unenforceable in any
respect in any jurisdiction, such invalidity, illegality or unenforceability shall be deemed not to
affect any other jurisdiction or any other provision or part of a provision of this Agreement, but
this Agreement shall be reformed and construed in such jurisdiction as if such provision or part of
a provision held to be invalid or illegal or unenforceable had never been contained herein and such
provision or part reformed so that it would be valid, legal and enforceable in such jurisdiction to
the maximum extent possible.



     8. ENTIRE AGREEMENT; AMENDMENT. This Agreement contains the entire agreement between the
Company and the Executive with respect to the subject matter hereof and supersedes all prior
written agreements. This Agreement may not be amended, waived, changed, modified or discharged
except by an instrument in writing executed by or on behalf of the party against whom any
amendment, waiver, change, modification or discharge is sought.



     9. NOTICES. All notices, requests, demands and other communications hereunder shall be in
writing and shall be deemed to have been duly given if delivered or mailed, postage prepaid, first
class as follows:



	 	 	 	 	 
	

	 	(a) TO THE COMPANY:
	 	(b) TO THE EXECUTIVE:






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	 	David G. Krall
	 	Eikenlaan 2
	

	 	EaglePicher Incorporated
	 	2245 BD Wassenaar
	

	 	8260 Northcreek Drive
	 	The Netherlands
	

	 	Suite 100	 	 
	

	 	Cincinnati, OH 45236	 	 





and/or to such other persons and addresses as either party shall have specified in writing to the
other.




     10. CONFIDENTIALITY. The Executive agrees that he will not, following his termination of
employment, for any reason whatsoever; use, disclose, furnish or make accessible, directly or
indirectly, in any manner or for any purpose unauthorized by the Company, any trade secrets,
confidential or proprietary information or any information, documents or materials owned, developed
or possessed by the Company, whether in tangible or intangible form, pertaining to the business of
the Company, including, without limitation, identities of clients and prospective clients,
identities of individual contacts at business entitles which are clients or prospective clients,
and business relationships provided, that this Paragraph 10 shall not apply to information
generally known to the public.



     11. GOVERNING LAW. This Agreement shall be governed by and construed under the laws of the
State of Ohio.



     12. WAIVER AND FURTHER AGREEMENT. Any waiver of any breach of any terms or conditions of
this Agreement shall not operate as a waiver of any other breach of such terms or conditions or any
other term or condition, nor shall any failure to enforce any provision hereof operate as a waiver
of such provision or of any other provision hereof. Each of the parties hereto agrees to execute
all such further instruments and documents and to take all such further action as the other party
may reasonably require in order to effectuate the terms and purposes of this Agreement.



     13. MISCELLANEOUS; TAXES.



               13(a) The paragraph headings contained in this Agreement are for reference purposes only and
shall not in any way affect the meaning or interpretation of this Agreement, except that the
“WHEREAS” clauses set forth above are expressly incorporated in and form part of the terms of this
Agreement.



               13(b) Notwithstanding anything herein to the contrary, except as otherwise specifically
provided in Appendix B to this Agreement, the Executive shall be liable for paying all taxes of any
kind imposed on him with respect to the amounts and benefits payable to him hereunder.



               13(c) This Agreement is the entire agreement of the parties, and supersedes any other
agreements or understandings, written or oral, with respect to its subject matter.



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	 	 	EAGLEPICHER INCORPORATED
	 
	 	 	 	 
	

	 	By	 	 
	


	 	 	 	

	ALBERT IEDEMA

	 	 	 	PIERRE J. EVERAERT
	

	 	 	 	Member of the Board of Directors &
	

	 	 	 	Chairman of the Audit Committee.






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APPENDIX A



A. In the event Executive is terminated by the Company Without Cause or by the Executive with Good
Reason, Executive shall be entitled to receive the following, provided he signs a Separation
Agreement and Release in a form acceptable to the Company:




     (1) The balance of his Base Salary for the term of the Agreement, plus his Executive Incentive
Bonus for the year of his termination, paid at the discretion of the Board, but in no event less
than his target rate; and



     (2) The Special Bonuses set forth in Paragraph 3(c) in an amount determined in the discretion
of the Board based upon the accomplishments of the Executive as measured against the established
targets for each of said Bonuses.



 









 





APPENDIX B

EXCISE TAX GROSS UP



A. In the event any payment that is either received by the Executive or paid by the Company on his
behalf or any property or any other benefit provided to him under this Agreement or under any other
plan, arrangement or agreement with the Company or any member of the Company’s affiliated group (as
defined in Section 280G(d)(5) of the Internal Revenue Code (the “Code”))(collectively the “Company
Payments”), will be subject to the tax (the “Excise Tax”) imposed by Code Section 4999 or any
substantially similar tax that may hereafter be imposed by any taxing authority, the Company shall
pay to the Executive an additional amount (the “Gross-up Payment”) such that the net amount
retained by the Executive, after deduction of any Excise Tax on the Company Payments and any
federal, state, and local income and payroll taxes upon the Gross-up Payment provided for by this
Paragraph before deduction for any federal, state, and local income and payroll taxes on the
Company Payments, shall be equal to the Company Payments. In no event shall the Company have any
obligation to make any other payment to the Executive with respect to any federal, state or local
income, payroll or other tax with respect to the Company Payments.



B. The determination of whether any of the Company Payments and the Gross-up Payment (collectively
the “Total Payments”) will be subject to the Excise Tax and the amount of such Excise Tax will be
made by the Company’s independent certified public accountants appointed prior to any change in
ownership (as defined under Code Section 280G(b)(2)) or tax counsel selected by such accountants or
the Company, provided that such counsel advised the Company with regard to tax matters prior to any
such change in ownership (the “Accountants”). The value of any non-cash benefits or any deferred
payment or benefit shall be determined by the Accountants in accordance with the principles of Code
Section 280G. Any determination by the Accountants shall be binding upon the Company and the
Executive. Any Gross-Up Payment will be paid to the Executive within ten (10) business days of the
Accountant’s determination of the amount of such payment. If the Internal Revenue Service makes a
claim that would require the payment of Excise Tax in an amount greater than that calculated by the
Accountants, the provisions of Paragraph E shall control the determination of the amount of the
Excise Tax.



C. For purposes of determining the amount of the Gross-up Payment, the Executive shall be deemed to
pay federal income taxes at the highest marginal rate of federal income taxation applicable to the
Executive in the calendar year in which the Gross-up Payment is to be made and state and local
income taxes at the highest marginal rate of taxation applicable to the Executive in the state and
locality of the Executive’s residence for the calendar year in which the Company Payment is to be
made, net of the maximum reduction in federal income taxes which could be obtained by the Executive
from deduction of such state and local taxes if paid in such year.



D. In the event that the Excise Tax ultimately paid by the Executive, taking into account any
refund amount, is less than the amount taken into account hereunder at the time the Gross-up
Payment is made, the Executive shall repay to the Company, at the time that the Excise Tax is paid
or the refund is received, as applicable, the portion of the prior Gross-up Payment attributable to
such reduction (plus the portion of the Gross-up Payment attributable to the Excise Tax and
federal, state and local income tax imposed on the portion of the Gross-up Payment being repaid by
the





 









 







Executive if such repayment results in a reduction in Excise Tax or federal, state and local income
tax deduction), plus interest on the amount of such repayment at the rate provided in Code Section
1274(b)(2)(B).



E. The Executive shall notify the Company in writing of any claim by the Internal Revenue Service
that, if successful, would require the payment of any Excise Tax in excess of the amount determined
under Paragraph B. Such notification shall be given as soon as practicable but no later than five
business days after the Executive is informed in writing of such claim and shall apprise the
Company of the nature of such claim and the date on which such claim is requested to be paid. The
Executive shall not pay such claim before the expiration of the 30-day period following the date on
which it gave such notice to the Company (or such shorter period ending on the date that any
payment of taxes with respect to such claim is due). If the Company notifies the Executive in
writing before the expiration of such period that it desires to contest such claim, the Executive
shall:




     (1) give the Company any information reasonably requested by the Company relating to such
claim,



     (2) take such action in connection with contesting such claim as the Company shall reasonably
request in writing from time to time, including, without limitation, accepting legal representation
with respect to such claim by an attorney reasonably selected by the Company,



     (3) cooperate with the Company in good faith to contest such claim, and



     (4) permit the Company to participate in any proceedings relating to such claim.



     The Company shall bear and pay directly all costs and expenses (including additional interest,
deemed interest with respect to interest-free advances and penalties) incurred in connection with
such contest and shall indemnify and hold the Executive harmless, on an after-tax basis, for any
Excise Tax or income tax (including interest and penalties with respect thereto) imposed as a
result of such representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Appendix B, the Company shall control all proceedings taken in
connection with such contest and, at its sole option, may pursue or forego any and all
administrative appeals, proceedings, hearings and conferences with the taxing authority in respect
of such claim and may, at its sole option, either direct the Executive to pay the tax claimed and
sue for a refund or contest the claim in any permissible manner, and the Executive agrees to
prosecute such contest to a determination before any administrative tribunal, in a court of initial
jurisdiction and in one or more appellate courts, as the Company shall determine. If the Company
directs the Executive to pay such claim and sue for a refund, the Company shall advance the amount
of such payment to the Executive, on an interest-free basis and shall indemnify and hold the
Executive harmless, on an after-tax basis, from any Excise Tax or income tax (including interest or
penalties with respect thereto) imposed with respect to such advance or with respect to any imputed
income with respect to such advance. Furthermore, the Company’s control of the contest shall be
limited to issues with respect to which a Gross-Up Payment would be payable hereunder, and the
Executive shall be entitled to settle or contest, as the case may be, any other issue raised by the
Internal Revenue Service or any other taxing authority.