Document:

salary.htm

EXHIBIT 10.12

ASHLAND INC.

SALARY CONTINUATION PLAN

(as amended as of November 7, 2002)

The Ashland Inc. Salary Continuation Plan (the "Plan"), effective July 21, 1988,  is an employee  benefit plan which  provides  eligible  salaried employees of Ashland Inc. and its majority-owned subsidiaries (collectively
referred to herein as the "Company") with certain severance benefits if the individual's  employment  with the  Company  is  terminated  under  defined circumstances  after a Change in Control,  as defined in Section 4(b).  The details and purpose of the Plan are more fully explained below.

SECTION 1. PURPOSE

The  purpose  of the Plan is to  reduce  employee  concerns  about the possibility of a Change in Control, as defined below in Section 4(b). It is important that each employee be able to focus his or her full attention
and energy  toward the goals and  objectives  of the Company.  The Plan is also designed  to permit the  Company to retain its high  quality  work force by increasing  stability and improving morale and  productivity.  In addition, the Plan will  allow the  company  to  attract  and  retain  new  qualified employees.

SECTION 2. ADMINISTRATION

Ashland Inc.  ("Ashland")  shall be the Plan  Administrator  and shall administer  the  Plan.  Any  determinations  by the Vice  President,  Human Resources - Programs
and Services, or his or her designee, in carrying out, administering, or interpreting this Plan shall be final and binding for all purposes and upon all interested persons and their heirs,  successors,  and personal representatives. All costs associated with the Plan shall be borne by the Company.

SECTION 3. ELIGIBILITY

An  employee  who is  classified  on the  records of the  Company as a regular,  full-time  salaried  employee,  whether  exempt or  non-exempt as specified
in the Fair Labor  Standards  Act, as from time to time  amended, (excluding  hourly employees;  employees  covered by collective  bargaining agreements;  employees of subsidiaries,  entities, or partnerships in which the  Company  has a 50%  or  less  ownership  interest;  and  international employees,  except foreign nationals who
are located in Canada or those who are  U.S.  expatriates)  will  be  entitled  to  participate  in the  Plan, regardless of length of service. Employees who have entered into employment contracts with the Company will not be eligible to participate in the Plan.

At any time prior to a Change in Control,  as defined in Section 4(b), Ashland  reserves,  in its  complete  discretion,  the  right to amend  the eligible classes of employees.

SECTION 4. CONDITIONS FOR BENEFIT PAYMENTS

(a) A participant shall not be entitled to receive benefits under this Plan  prior  to  a  Change  in  Control,   as  defined  in  Section   4(b). Participation
in the Plan does not create a contract of employment  between the Company and its employees.  The Company reserves the right to terminate employees at any time for any reason,  just as employees  have the right to terminate their employment at any time for any reason.

(b) For purposes of the Plan,  a change in control of Ashland  (herein after  referred  to as a  "Change  in  Control")  shall be  deemed  to have occurred if:

(i) there shall be consummated (A) any  consolidation or merger of the Company, other than a consolidation or merger of the Company into or with a direct or indirect wholly-owned subsidiary, in which the Company is not the continuing  or  surviving  corporation  or
pursuant to which  shares of the Company's common stock would be converted into cash,  securities,  or other property,  other  than a merger  of the  Company  in which  the  individual holders of the Company's common stock  immediately prior to the merger have the  same  proportionate   ownership  of  common  stock  of  the  surviving
corporation immediately after the merger, or (B) any sale, lease, exchange, or transfer (in one transaction or a series of related transactions) of all or substantially all the assets of the Company, provided,  however, that no sale,  lease,  exchange or other transfer of all or  substantially  all the assets of the Company shall be deemed to occur unless  assets  constituting 80% of the total  assets of the  Company are  transferred  pursuant
to such sale, lease, exchange or other transfer; or

(ii)  the  Shareholders  of the  Company  shall  approve  any  plan or proposal for the liquidation or dissolution of the Company; or

(iii)  any  "person"  (as  such  term is used in  Sections  13(d)  and 14(d)(2) of the Securities  Exchange Act of 1934, as amended (the "Exchange Act")),  other than the  Company
or a  subsidiary  thereof or any  employee benefit plan sponsored by the Company or a subsidiary thereof, shall become the  beneficial  owner (within the meaning of Rule 13d-3 under the Exchange Act) of  securities  of Ashland  representing  50% or more of the  combined voting power of Ashland's then outstanding securities ordinarily (and apart from rights accruing in special  circumstances) having the
right to vote in the election of directors,  as a result of a tender or exchange offer, open market purchases, privately-negotiated purchases or otherwise; or

(iv) at any time during a period of two consecutive years, individuals who at the beginning of such period  constituted  the Board of Directors of Ashland  shall  cease for any  reason  to  constitute  at
least a  majority thereof,  unless the election or the  nomination  for election by Ashland's shareholders  of each new director during such two-year period was approved by a vote of at least  two-thirds of the directors then still in office who were directors at the beginning of such two-year period.

Notwithstanding   the  foregoing,   any  transaction,   or  series  of transactions,  that  shall  result  in the  disposition  of  the  Company's
interest in Marathon Ashland Petroleum LLC,  including  without  limitation any transaction  arising out of that certain Put/Call,  Registration Rights and Standstill  Agreement dated January 1, 1998 among Marathon Oil Company, USX Corporation, the Company and Marathon Ashland Petroleum LLC, as amended from time to time, shall not be deemed to constitute a Change in Control.

(c) Benefits shall be payable to a participant under the Plan after a Change in Control has occurred if a participant's employment is terminated by the Company without Cause, as defined below, within two (2) years from the date of the Change in Control. For purposes of the
Plan, "cause" shall mean (i) the willful and continued failure of an employee to substantially perform his or her duties with the company (other than such failure resulting from the employee's incapacity due to physical or mental illness), or (ii) willful engaging by an employee in gross misconduct materially injurious to the Company.

SECTION 5.  AMOUNT OF BENEFITS

Following  a Change in  Control  and a  participant's  termination  of employment  within two (2) years  thereafter  without  Cause, a participant shall be entitled to receive
benefits under the Plan as described below:

(a) A participant shall be entitled to be paid in an undiscounted lump sum, within ten (10) business days after such participant's  termination of employment  without Cause, an amount equal to a specified portion of his or her current base compensation
(excluding any bonus compensation) based upon the greater of such participant's (a) aggregate years and months of service (whether or not  continuous),  or (b) current Job Band (or, if higher,  the Job  Band  of  such  participant  at the  time of the  Change  in  Control) calculated as follows:

	  	
Length of Service
	 	
Payment
	 
	  	
Up to 5 full years
	 	
3 months' base compensation
	 
	  	
More than 5 and up to 10 full years
	 	
6 months' base compensation
	 
	  	
More than 10 and up to 15 full years
	 	
1 year's base compensation
	 
	  	
More than 15 and up to 20 full years
	 	
1-1/2 year's base compensation 
	 
	  	
More than 20 full years
	 	
2 years' base compensation 
	 
	  	  	 	  	 
	  	
 Job Band
	 	
Payment
	 
	  	
Band 1 - 10
	 	
3 months' base compensation
	 
	  	
Band 11 - 22
	 	
6 months' base compensation
	 
	  	
Band 23 and above
	 	
1 year's base compensation
	 

(b) At the  sole  expense  of the  Company,  a  participant  shall  be entitled to the continuation of his or her medical,  dental, and group life benefits  in  effect  at
the  time of  such  participant's  termination  of employment  without  Cause for a period of six (6)  months  following  such participant's termination of employment.

(c) A participant  shall be reimbursed  for any legal fees or expenses incurred by the  participant to enforce the payment of Plan benefits within ten (10)  business days of providing  copies of applicable  invoices
to the Company.

(d) A  participant  shall be entitled to interest on the amount of any payments due under the Plan (but not timely  paid) in an amount  equivalent to the prime  rate of  interest  (quoted  by  Citibank,  N.A.  as
its prime commercial  lending rate) on the latest date practicable  prior to the date such payments should have been made, to and including the date it is made.

(e) Within ten (10) business days of the participant's  termination of employment  following a Change in Control, the Company shall provide, at no cost to the  participant,  individual  outside  assistance in finding
other employment.  Such  obligation  may be fulfilled by the Company  through the retention of an outplacement service for use by individual participants.

(f) Participants shall be entitled to receive any pension, disability, workers' compensation, other Company benefit plan distribution, payment for vacation accrued but not taken, statutory employment termination benefit, or any other compensation plan payment otherwise independently
due; however, in no event shall a participant who receives benefit under this Plan be entitled to additional severance payment pursuant to any other existing severance policy of the Company.

SECTION 6. ACCEPTANCE OF BENEFITS

If a participant receives and accepts all of the benefits provided under Section 5 of the Plan, he or she shall be deemed thereby to have waived any right or cause of action against the Company and its directors, officers, or employees arising from the termination of the
participant's employment.

SECTION 7. CLAIMS PROCEDURE

(a) Following a Change in Control and a  participant's  termination of employment,  the benefits  described in Section 5 of the Plan shall be paid as  described  therein  without  any  required  action  on
the part of such participant.

(b) If any participant believes that he or she is entitled to benefits provided under the Plan and has not received such benefits  within the time prescribed  by the Plan,  such  participant  may submit a written claim for
payment of such  benefits  to the  Company.  If such claim for  benefits is wholly or partially denied, the Company shall,  within thirty (30) business days after receipt of the claim,  notice the  participant  of the denial of the claim.  Such  notice of denial (i) shall be in  writing,  (ii) shall be written in a manner  calculated to be understood  by the  participant,  and
(iii) shall  contain (A) the  specific  reason or reasons for denial of the claim, (B) a specific reference to the pertinent Plan provisions upon which the  denial is based,  (C) a  description  of any  additional  material  or information  necessary to perfect the claim,  along with an  explanation of why such material or  information  is necessary,  and
(D) an explanation of the claim review  procedure,  in  accordance  with the  provisions  of this Section 7.

(c)  Within  sixty  (60)  business  days  after  the  receipt  by  the participant of a written notice of denial of the claim,  or such later time as shall be deemed
reasonable taking into account the nature of the benefit subject to the claim and any other attendant circumstances, the participant may file a written request with the Company that it conduct a full and fair review of the denial of the claim for benefits.  As a part of such full and fair  review,  the  participant  (or  such  participant's  duly  authorized representative) may review and photocopy pertinent documents (including
but not limited to the  participant's  personal history file) and submit issues and  comments  to the  Company  in  writing.  The  Company  shall  make its determination  in accordance with the documents  governing the Plan insofar as such  documents  are  consistent  with the  provisions  of the  Employee Retirement
Income Security Act of 1914 (herein "ERISA").

The Company  shall  promptly  deliver to the  participant  its written decision on the claim (in no event later than  thirty  (30)  business  days after the receipt of the aforesaid
request for review, except that if there are special circumstances (such as a conference with the participant or his or her  representative)  which require an extension of time,  the aforesaid thirty (30) business day period shall be extended to a reasonable period of time not to exceed sixty (60) business  days).  Such decision  shall (i) be written in a manner  calculated to be understood by the  participant,  (ii) include
the specific reason or reasons for the decision,  and (iii) contain a  specific  reference  to the  pertinent  Plan  provisions  upon which the decision is based.  If the decision on review is not  furnished  within the time  prescribed by this Section 7(c), the claim shall be deemed granted on review.

SECTION 8. AMENDMENTS AND TERMINATIONS

Ashland's  Board  of  Directors   shall  have  plenary   authority  to terminate,  modify,  or amend this Plan in such  respects  as it shall
deem advisable at any time prior to a Change in Control.

SECTION 9. SUCCESSORS BINDING AGREEMENT

(a) The Company will require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, by agreement in form and substance satisfactory to eligible
participants, expressly to assume and agree to provide benefits pursuant to this Plan in the same manner and to the same extent that the Company would be required to perform its obligations under the Plan if no such succession had taken place. Failure of the Company to obtain such agreement prior to the effectiveness of any such succession shall be a violation of this Plan and shall entitle eligible participants to compensation from the Company in the same amount and on the same terms as the participant would
be entitled pursuant to Section 5, except that for purposes of implementing the foregoing, the date on which any such succession becomes effective shall be deemed the date of the participant's termination of employment without Cause. As used in this Plan, "Company" shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which executes and delivers the agreement provided for in this Section 9 or which otherwise becomes bound by all the terms and provisions of
this Plan by operation of law.

(b) This Plan shall  inure to the benefit of and be  enforceable  by a participant's personal or legal representatives, executors, administrators, successors,  heirs, distributees,  devisees, and legatees. If a participant
should die while any amounts would still be payable to him or her hereunder if he or she had  continued to live,  all such  amounts,  unless  otherwise provided herein, shall be paid in accordance with the terms of this Plan to such participant's  devisee,  legatee, or other designee or, if there be no such designee, to his or her estate.

SECTION 10. WITHHOLDING TAXES

The Company is  authorized to withhold any tax required to be withheld from the amounts  payable to a participant  pursuant to this Plan which are considered taxable compensation to the participant.

SECTION 11. GOVERNING LAW

The  Plan  shall  be  governed  by the  laws  of the  Commonwealth  of Kentucky.ex109panichella.htm

EXHIIT 10.14

 

EMPLOYMENT AGREEMENT

 

THIS EMPLOYMENT AGREEMENT (the “Agreement”), dated this 8 day of July 2008, is between Ashland Inc., a Kentucky corporation (“Ashland”), having its principal place of business at 50 E. RiverCenter
Boulevard, Covington, KY 41011 and John E. Panichella (“Employee”).

 

WHEREAS, it is anticipated that Ashland will acquire all the stock of Hercules Incorporated (“Hercules”), pursuant to and in accordance with a Merger Agreement, to be executed by and between Hercules and Ashland (the “Merger Agreement”); and

 

Employee currently serves as President Aqualon Division of Hercules and Vice President, Hercules Incorporated, and has substantial experience, knowledge and skill associated with the operations and administration of this business unit and of Hercules; and

 

Ashland wishes to retain Employee upon the terms and conditions set forth in this Agreement, upon the completion of the acquisition of Hercules.

 

NOW THEREFORE, in consideration of the recitals and mutual covenants contained in this Agreement, the parties agree as follows:

 

1.           Employment.

 

	
1.1
	
Duties and Responsibilities.  Employee shall be employed by Ashland on a full-time basis effective as of the closing date of the transactions contemplated by the Merger Agreement (the “Commencement Date”).  Employee
shall serve as an executive officer of Ashland, in the role of President Aqualon and Vice President of Ashland Inc.  Employee shall also serve as a member of Ashland’s operating committee.  Employee shall faithfully, industriously and to the best of his ability perform the duties that may be required of him and shall devote his full business time, effort, skill and attention to the affairs of Ashland during his employment.  It is agreed that Employee’s performance during
the term of this Agreement will be measured in accordance with Ashland’s performance appraisal process.

 

	
1.2
	
Term.  The term of this Agreement shall be three (3) years from the Commencement Date (the “Term”). Employee understands and agrees that in the event this Agreement is not extended for a subsequent term, then upon its expiration
he will become an employee “at-will,” which means that either Employee or Ashland will be free to discontinue the employment relationship without penalty at any time thereafter, with or without notice and with or without Cause; provided that in the event the merger with Hercules does not 

 

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occur on or before June 30, 2009, this Agreement will lapse and no further obligations will be owed by either party hereunder.

 

	
1.3
	
Effect of Prior Agreements.  Employee acknowledges that except for those obligations Ashland has specifically assumed under the terms of the Merger Agreement with Hercules, Ashland and Hercules shall have no
obligations to Employee pursuant to any previous employment agreements between Employee and Hercules, or any of its subsidiaries, affiliates or predecessors in interest.

 

2.           Compensation and Benefits.

 

	
2.1
	
Base Compensation.  Ashland shall pay Employee an annual salary (“Base Compensation”) of Three Hundred Sixty Thousand Dollars ($360,000), less applicable withholdings, which shall be payable in accordance with its customary
payroll practices with respect to time and manner of payment.

 

	
2.2
	
Vacation.  Employee’s vacation eligibility will be in accordance with Ashland’s Vacation Benefit program, provided that Employee’s years of service with Hercules shall be counted for purposes of determining his eligibility
for vacation accrual under said vacation policy.

 

	
2.3
	
Periods not Worked.  Employee understands and agrees that except where some form of paid leave is provided under the regular policies of Ashland, Employee shall not receive compensation for workweeks in which no work is performed.

 

	
2.4
	
Employee Benefits. Employee’s position is in salary band 26, and as a regular, full-time employee of Ashland, he shall be entitled to participate in all benefits offered to employees in this band according to the terms and conditions of such
programs, as they may be amended from time to time.

 

	
2.5
	
Restricted Stock.  In order to assist Employee in meeting the stock ownership requirements applicable to his position and to encourage Employee to remain with Ashland, within 90 days of the Commencement Date Ashland will provide Employee
with a grant of shares of Ashland Inc. restricted stock equivalent in value to one and one-half (1.5) times Employee’s Base Compensation, the number of shares granted to be determined based on the closing price of Ashland Inc. common stock as reflected on the New York Stock Exchange (“NYSE”) composite tape as of the Commencement Date.  These shares of restricted stock will vest in full 48 months from the Commencement Date.  In the event Employee’s employment is terminated
less than 48 months from the Commencement Date either by Ashland without Cause and in its sole discretion, or due to Employee’s death or disability, then Employee shall receive accelerated pro-rata vesting of these shares of restricted stock, based on the number of months of employment completed as of the date his employment ended.  In the event Employee voluntarily elects to terminate 

 

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his employment or Ashland terminates his employment for Cause, as provided herein, less than 48 months from the Commencement Date, then all shares of restricted stock will not vest, and will be forfeited in their entirety.  Employee and Ashland agree that Ashland’s obligations under this section of the Agreement shall survive the expiration of the term of this Agreement.

 

	
2.6
	
Retention Bonus.  In order to encourage Employee’s continued service during the term of this Agreement, Ashland will provide Employee with a bonus (“Retention Bonus”) equal to Three Hundred Sixty Thousand Dollars ($360,000),
less applicable withholdings, to be paid as follows:  one-third of the Retention Bonus will be due upon Employee’s 12-month anniversary of service with Ashland; one-third of the Retention Bonus will be due upon Employee’s 24-month anniversary of service with Ashland, and the final one-third payment will be due as of Employee’s 36-month anniversary of service with Ashland.  Each Retention Bonus payment shall be made within 30 days of the date on which Employee becomes entitled
to receive said payment.

 

In the event Employee’s employment is terminated prior to the payment of one or more of these Retention Bonus payments, either by Ashland without Cause and in its sole discretion, or due to Employee’s death or disability, then Employee shall immediately receive payment of the balance of the Retention Bonus.  However
Employee agrees that Ashland shall have no further obligation to make any Retention Bonus payment(s) under this section if, prior to the date on which a Retention Bonus payment would become due, Employee voluntarily elects to terminate his employment, or Ashland terminates his employment for Cause, as provided herein.

 

	
2.7
	
Incentive Compensation.  During the term of this Agreement, Employee shall be eligible to receive incentive compensation as follows:

 

	
  
	
(a)
	
2008 Incentive Compensation.  If the Commencement Date occurs on or before December 31, 2008, then for the remainder of calendar year 2008, Employee will remain eligible to receive incentive pay under the annual incentive compensation
program in which Employee was a participant immediately prior to the Commencement Date.

 

	
  
	
(b)
	
Ashland Incentive Compensation Plan.   Employee shall become eligible to participate in Ashland’s Incentive Compensation Plan as of the Commencement Date.  All terms and conditions governing Employee’s annual
incentive pay opportunity will be determined according to the terms and conditions of said plan.

 

	
  
	
(c)
	
Long-Term Incentive Plan. Employee will become eligible to participate in Ashland’s Long-Term Incentive Plan as of the Commencement Date. All terms and conditions governing Employee’s long-term incentive pay opportunity will be determined
according to the terms and conditions of said plan.

 

 

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2.8
	
Severance Benefits. In addition to those termination benefits otherwise provided for hereunder, Employee shall be eligible to receive benefits under Ashland’s normal severance pay policies in the event his employment is terminated by Ashland
without Cause and in its sole discretion during the term of this Agreement; provided that the severance benefit Employee is eligible to receive shall be not less than 18 months of Base Compensation. All other terms and conditions for payment of the above benefits shall be made in accordance with the terms and conditions of the applicable plan(s).

 

	
2.9
	
Change in Control.  Employee shall be eligible to receive those benefits offered to employees in his salary band in the event of a “Change in Control” of Ashland (as defined in the applicable plan) during the term of this Agreement;
provided that the minimum benefit Employee shall receive in the event of such Change in Control shall be two (2) years of Employee’s Base Compensation, a payment equal to Employee’s annual incentive pay target, and all  unvested equity compensation provided to Employee shall immediately vest.  All other terms and conditions for payment of the above benefits shall be made in accordance with the terms and conditions of the applicable plan(s).

 

	
3.
	
Non-Competition.  Employee understands and agrees that as a condition of his employment, contemporaneous with the execution of this Agreement, he will also execute the Ashland Service Agreement, a copy of which is attached
hereto as Exhibit I, and the terms and conditions of which are incorporated by reference as if fully set forth herein.  Provided however, that Employee specifically agrees that the restrictions provided in said Service Agreement shall extend for the greater of three (3) years from the date of the execution of this Agreement, or 18 months from the date Employee is no longer employed by Ashland in any capacity.

 

Employee understands that his obligations under the Ashland Service Agreement and the provisions of this section of this Agreement shall survive the expiration or early termination of this Agreement.  Employee further understands that his obligations under the Ashland Service Agreement will be in addition
to any obligations under any confidentiality and/or non-competition agreements executed by Employee prior to or during his employment with Hercules which are assumed by Ashland under the terms of the Merger Agreement.

 

4.           Confidentiality.

 

	
4.1
	
No Disclosure or Use of Confidential Information. During Employee’s employment with Ashland and thereafter, Employee shall not, directly or indirectly, (a) disclose or permit the disclosure of any Confidential Information to any person or
entity, or (b) use or permit the use of Confidential Information:  (i) in any way detrimental to Ashland, including in competition with Ashland; or (ii) for any purpose other than to benefit Ashland.   Upon Ashland’s request or termination of Employee’s employment, Employee shall 

 

 

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promptly return to Ashland all written or tangible Confidential Information.  For purposes hereof, “Confidential Information” means all information about Ashland and/or Hercules, and any subsidiaries, affiliates or predecessors in interest of either, which is disclosed to Employee, directly or indirectly, before or during Employee’s employment with Ashland and/or Hercules,  includ­ing: product design and manufacturing
information; any communications or corres­pondence identifying customers, prospects or projects; pricing and sales lists, business plans and strategies; pol­icies, techniques and concepts; employee compensation; financial reports; proprietary technology, trade secrets, research and development data and know-how; copyrighted and unprotected materials; and other secret or confidential information or data which pertains to Ashland.  Confidential Information does not include information which is or becomes
publicly available through an authorized or lawful disclosure.

 

	
4.2
	
Ownership of Works.  All ideas, discoveries, inventions, improvements, artworks, compositions, conceptions, and materials (including materials within the scope of the copyright laws) (“Works”) prepared or conceived by Employee
during the term of this Agreement and usable in or relating to Ashland’s business shall be the property of Ashland and Employee hereby assigns and agrees to assign to Ashland all of Employee’s right, title and interest in such Works.  Employee shall not use, or transfer to others, any Works other than in connection with Ashland’s business or with Ashland’s written consent.  Employee agrees to execute all papers, and otherwise provide proper assistance, at Ashland’s
request and expense, during and subsequent to Employee’s employment by Ashland to enable Ashland or its nominees to obtain patents, copyrights, and other legal protection for the Works in any country.

 

	
4.3
	
Confidentiality of this Agreement.  Employee agrees that he will keep the terms of this Agreement completely confidential, and will not hereafter disclose any information concerning this Agreement to anyone except his immediate family,
financial advisors and/or attorney: provided that they agree in advance of said disclosure to keep this information confidential and not disclose it to others.  However, the obligation to treat information contained herein as confidential will not apply to any information Ashland has disclosed pursuant to United States securities laws, the rules of the New York Stock Exchange, or the rules of any other stock exchange on which Ashland stock is listed.

 

	
5.  
	
Injunctive Relief.  Employee agrees that (a) the provisions of Sections 3 and 4 are reasonable and necessary to protect the legitimate interests of Ashland
and (b) any violation of Sections 3 or 4 will result in irreparable injury to Ashland, the exact amount of which will be difficult to ascertain, and that the remedies at law for any such violation would not be reasonable or adequate compensation to Ashland for such a violation.  Accordingly, Employee agrees that if he violates any provisions of Sections 3 or 4, Ashland shall be entitled to specific performance and injunctive relief, without posting bond or other security, and without the necessity of
proving actual damages.

 

 

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Employee and Ashland agree that any controversy or claim arising out of or relating to other sections of this Agreement, or the breach thereof, shall be settled exclusively by arbitration in accordance with the Center for Public Resources’ Model ADR Procedures and Practices, and judgment upon the award rendered
by the arbitrator(s) may be entered in any court having jurisdiction thereof.

 

6.           Early
Termination.

 

	
6.1
	
Termination for Cause. Ashland may terminate this Agreement for Cause at any time during its term.  Upon a termination for Cause, no further compensation under this Agreement will be owed to Employee. “Cause” shall be defined
for the purposes of this Agreement as being:

 

	
  
	
(a)
	
any act or omission by Employee which reasonably constitutes dishonesty, disloyalty, fraud, deceit, gross negligence, willful misconduct or recklessness, including, but not limited to the willful violation of Ashland’s by-laws, Business Responsibilities of an Ashland Employee, or other corporate policies and procedures governing employee conduct;

 

	
  
	
(b)
	
Employee’s insubordination; “Insubordination” shall be defined as Employee’s refusal or willful failure to perform specifically assigned duties relating to his position;

 

	
  
	
(c)
	
Employee’s inattention to, neglect of or any other failure to competently perform any assigned duties, unless such failure is due to Employee’s incapacity as a result of the Employee’s physical or mental illness;

 

	
  
	
(d)
	
any act by Employee that constitutes a conviction of any felony under the laws of the United States; or

 

	
  
	
(e)
	
Employee’s breach of any material portion of this Agreement.

 

	
6.2
	
Termination due to Death or Disability. In addition, this agreement will automatically terminate, and except for those benefits specified under paragraphs 2.5 and 2.6 of this Agreement, no further compensation under this Agreement will be owed
to Employee in the event either of the following should occur during its term:

 

	
  
	
(a)
	
Employee becomes disabled and subsequently becomes eligible to receive payments under Ashland’s Long Term Disability Plan; or

 

	
  
	
(b)
	
In the event of the Employee’s death.   Provided, however, that Ashland will not be relieved of any obligations under its employee benefits plans which arise due to Employee’s death.

 

 

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Any payments owed under this Agreement following Employee’s death will be paid to Employee’s estate.

 

	
6.3
	
Termination for Other Reasons.  Ashland may terminate this contract at any time during its term, for any reason other than those enumerated above, and shall thereafter only be obligated to provide the following to Employee:

 

	
(a)  
	
payment of the greater of (i) the balance of the Base Compensation Employee would have received if his employment had continued for the full term of this Agreement, or (ii) the amount of severance pay payable to employees in his salary band whose employment is terminated without Cause under Ashland’s normal severance pay policies; and

 

	
(b)  
	
payment of those amounts Employee would have otherwise been eligible to receive under Ashland’s Incentive Compensation and Long-Term Incentive Pay plans, pro-rated through his last day of active employment, which will be paid in accordance with all other terms and conditions of said plans; and

 

	
(c)  
	
pro-rata vesting of those shares of restricted stock granted to Employee pursuant to section 2.5 of this Agreement; and

 

	
(d)  
	
payment of the balance of the Retention Bonus provided for in section 2.6 of this Agreement.

 

In such event, Employee’s termination shall be deemed without Cause, and Employee will remain eligible to receive those benefits ordinarily provided under Ashland’s employee benefits plans to employees who are terminated without Cause.

 

	
7.
	
Notices. Any notice required or desired to be given under this Agreement shall be deemed given if in writing mailed or delivered
as follows:

 

	
  
	
If to Employee:

 

With a copy to:

 

 

If to Ashland:

 

With a copy to:

 

 

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8.
	
Successors and Assigns.  This Agreement shall be binding upon and inure to the benefit of Ashland and its successors
and assigns.

 

	
9.
	
Waiver. No waiver of any breach of any term or provision of this Agreement shall be construed to be, nor shall be, a waiver
of any other breach of this Agreement.  No waiver shall be binding unless in writing and signed by the party waiving the breach.

 

	
10.
	
Modification.  This Agreement may not be amended or modified other than by a written agreement signed by Employee
and an authorized representative of Ashland.  No company practice or policy of Ashland shall change the provisions of this Agreement.

 

	
11.
	
Severability. The provisions of this Agreement are independent and severable from each other, and no provisions shall be affected
or rendered invalid or unenforceable if any other provision or provisions is deemed invalid or unenforceable by a court or arbitrator or competent jurisdiction.

 

	
12.
	
No Violation of any Other Contract Binding Upon Employee. Employee warrants and represents to Ashland that Employee is not
subject to any covenants, agreements or restrictions, including any covenants, agreements or restrictions arising out of any prior employment that would be breached or violated by Employee’s execution of this Agreement or by his performance of his duties hereunder.

 

	
13.
	
Attorney’s Fees.  Any signatory to this Agreement who is the prevailing party in any legal proceeding against any other signatory brought under or with relation to this Agreement shall be entitled to recover court
costs, reasonable attorney fees, and all other out-of-pocket costs of litigation, including deposition, trace, and witness costs, from the non-prevailing party.

 

	
14.
	
Governing Law.  This Agreement shall be deemed to have been executed and delivered within the state of Ohio, and shall be construed, enforced and governed by, the laws of the State of Ohio without regard to principles
of conflict of laws and without regard to any law requiring construction against the party preparing the document.

 

-8-  

  

  

  

IN WITNESS WHEREOF, the parties hereto have executed this Agreement the date first above written.

 

07/08/08

 

	         /s/ John E. Panichella	 	 	 	 	 
	 John E. Panichella	 	 	 	 	 
	 	 	 	 	 	 

 

  -- and ---

 

ASHLAND INC.

 

	 By:	/s/ Susan B. Esler 	 	 	 	 	 
	 Its:	 VP HR & Communications	 	 	 	 	 
	 	 	 	 	 	 	 

  -9-

  

  

  

Exhibit I

EMPLOYEE AGREEMENT

 

As an employee of Ashland Inc. or any of its divisions or subsidiaries1  (collectively call "Ashland"), you may be exposed to Confidential information about Ashland's business processes,
products and developments.  In order that you fully understand and accept your responsibilities as an Ashland employee, you are asked to review and agree to the terms printed below by signing this Agreement.

 

In consideration of my employment or continued employment with Ashland, the salary or wages, increase and promotions and other benefits received by me during such employment, and in consideration of being given access to Confidential information when required, I hereby agree as follows:

 

Article 1 - Professional Conduct

I agree to follow Ashland's policies and guidelines with respect to the conduct of its business as described in the Business Responsibilities of an Ashland Employee.  I will use my best efforts to comply with both the letter and the spirit of all laws and regulations applicable to my duties as an employee
of Ashland.  I further agree to adhere to the highest ethical standards of conduct in all of my business activities and to act at all times in the best interest of Ashland.

 

Article 2 - Confidential Information

Ashland has defined Confidential Information to mean trade secrets, know-how, and other information relating to Ashland's business practices and prospective business interests (including, but not limited to):  customer lists, fore-casts, business and strategic plans, financial and sales information, products,
processes, equipment, manufacturing operations, marketing programs, research, product development, engineering, computer systems, software, personnel and legal records.

 

I agree that I will promptly disclose to Ashland all trade secrets or inventions made or conceived by me, either alone or with others, during my employment with Ashland.  I also agree that I will not use or disclose to anyone any Confidential Information of Ashland, except with the written consent of Ashland
or as required in my duties as an employee of Ashland.  This obligation shall continue until such Confidential Information becomes generally known to the public without participation on my part.

 

I agree that the same obligation to protect Confidential Information shall apply to the information of any third party obtained by me as an Ashland employee and with respect to which Ashland has an obligation of secrecy.  Further, I agree not 

 

 

_______________________________  
1 Subsidiaries or divisions, which have their own Employee or Service Agreements are not
included hereunder.

 

 

 

 

 

to use or disclose to Ashland any confidential information of any previous employer or other third party to whom I have an obligation of secrecy.  I also agree to immediately provide Ashland with a copy of any agreement I may have with a prior employer that affects my employment with Ashland.

 

Article 3 - Intellectual Property Ownership

I understand Intellectual Property of Ashland to mean any invention, discovery, work of authorship, computer program, design, trademark or any other non-physical property, including ownership of copyright as based on the work-for-hire doctrine, which was not developed entirely on my own time or, even if developed on
my own time: (1) relates to the business of Ashland or to Ashland's actual or anticipated research or development; or (2) results from any work performed by me for Ashland.

 

Article 4 - Intellectual Property Rights

Upon the request of Ashland and at Ashland's expense, I or my legal representative will assign, and hereby do assign and convey to Ashland, my entire right in and to any patent or inventions or discoveries, and registrations or works of authorship which are the property of Ashland under Article 3; assist Ashland and
its agents in preparing documents for the protection of such Intellectual Property in all countries of the world; sign and deliver to Ashland all papers necessary for the assignment or patent applications and patents the registration of copy-rights; and will give all information and testimony, sign all papers and do all things which may be needed or requested by Ashland to obtain, extend, re-issue, maintain for enforce such Intellectual Property Rights.  When any assistance relating to such Intellectual
Property Rights is rendered after my employment, I understand that Ashland will pay me a reasonable sum for my time and expenses.

 

Article 5 - Documents

I acknowledge that all originals and copies of drawings, blueprints, manuals, reports, notebooks, notes, calendars, photographs, computer programs in whatever form and other data, and any other recorded, written, printed or electronically-stored matter, whether considered confidential or not, relating to research, operations
and/or the business of Ashland, made or received by me during my employment, are the property of Ashland.  I will upon termination of my employment, return such information or documents to Ashland, retaining no copies for myself.  I also agree to return to Ashland all other physical or personal property of Ashland.

 

Article 6 - Noncompetition

I agree that for a period of eighteen (18) months from the date of my termination of employment with Ashland for any reason, I will not be employed by or participate in, or have any interest (directly or indirectly) in any business which 

 

 

 

 

  

 

involves an area of technology or business in which I worked for Ashland during the last two (2) years of my employment with Ashland and which might require me to disclose or misuse any Confidential Information of Ashland.  I further agree that for a period of eighteen (18) months, I will not interfere with,
disrupt or attempt to disrupt the relationship, contractual or otherwise, with respect to the business carried on by Ashland with any other party, including other Ashland employees.  I agree that these restrictions are reasonable and shall apply to the same geographical area over which I had primary responsibility during the last two (2) years of my employment with Ashland.

 

Article 7 - Employment at Will

I understand that I have the right to terminate my employment with Ashland for any reason at any time, with or without notice.  I understand that Ashland has the same right.  I further acknowledge that I do not have a contract of employment with Ashland and that, in the future, I will not have any
contractual rights of employment unless such rights are made part of a written agreement executed by me and by a Vice President or a higher level officer of Ashland.

 

Article 8 - Acceptance

I have read this Agreement carefully and I understand and voluntarily agree to comply with its terms.  I understand that in the event that Ashland should waive any part of this Agreement of that any part should be determined to be unenforceable, the remaining provisions shall remain in effect.

 

 

DATE THIS 8 DAY OF JULY 2008

 

WITNESS:

 

__________________________

 

	 	 /s/ John E. Panichella	 	 
	 	(SIGNATURE)	 	 
	 	 	 	 
	 	 	 	 
	 	 John E. Panichella	 	 
	 	(PRINT NAME)	 	 

 

:
 

	  ACCEPTED	 	 
	 ASHLAND INC.	 	 
	 	 	 	 
	 	 	 	 
	 	 	 	 
	 BY:	/s/ Susan B. Esler 	 	 
	 TITLE:	 Vice President, Human Resources & Communications

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