Document:

Exhibit 10.31

 

 

NATIONAL STARCH LLC

 

AND JAMES ZALLIE

 

EMPLOYMENT AGREEMENT

 

 

JULY 31, 2009

 

 

 

TABLE OF CONTENTS

 

	
CLAUSE
    	
 
    	
PAGE
    
	
 
    	
 
    	
 
    
	
1.
    	
DEFINITIONS
    	
1
    
	
2.
    	
TERM, JOB DESCRIPTION, DUTIES AND WORKING   HOURS
    	
3
    
	
3.
    	
PLACE OF WORK/TRAVEL
    	
3
    
	
4.
    	
SALARY
    	
3
    
	
5.
    	
INCENTIVE PLANS
    	
4
    
	
6.
    	
RETIREMENT BENEFITS
    	
5
    
	
7.
    	
WELFARE BENEFIT PLANS
    	
7
    
	
8.
    	
COMPANY CAR
    	
7
    
	
9.
    	
VACATION
    	
7
    
	
10.
    	
EXPENSES
    	
8
    
	
11.
    	
OTHER INTERESTS
    	
8
    
	
12.
    	
SHARE DEALING AND OTHER CODES OF CONDUCT
    	
8
    
	
13.
    	
TERMINATION AND SEVERANCE
    	
8
    
	
14.
    	
CONFIDENTIALITY
    	
11
    
	
15.
    	
POST-TERMINATION COVENANTS
    	
13
    
	
16.
    	
INTELLECTUAL PROPERTY
    	
13
    
	
17.
    	
HEALTH AND SAFETY
    	
14
    
	
18.
    	
DATA PROTECTION
    	
14
    
	
19.
    	
ENTIRE AGREEMENT
    	
14
    
	
20.
    	
NOTICES
    	
14
    
	
21.
    	
GOVERNING LAW
    	
14
    
	
22.
    	
JURISDICTION AND MEDIATION
    	
14
    
	
23.
    	
CONFIRMATION OF AGREEMENT
    	
15
    
	
24.
    	
SPECIFIC PERFORMANCE AND SURVIVAL
    	
15
    
	
25.
    	
INDEMNIFICATION
    	
15
    
	
26.
    	
SECTION 409A
    	
15
    
	
27.
    	
HEADINGS
    	
16
    
	
28.
    	
WAIVER
    	
16
    
	
29.
    	
SEVERABILITY
    	
16
    
				

 

1

 

THIS AGREEMENT is made on July 16, 2009

 

BETWEEN

 

(1)                             National Starch LLC a company which has its principal office at 10 Finderne Avenue, Bridgewater, NJ 08807 (the Company)

 

(2)                             James Zallie of 5 Sea Island Court , Skillman, NJ  08558

 

WHEREAS this Agreement sets out the terms and conditions that apply to your employment by the Company.

 

It is Agreed as follows:

 

1.                                 DEFINITIONS

 

In this Agreement the following terms shall have the following meanings:

 

AkeoNobel means Akzo Nobel NV a company which has its registered office at Strawlnskylaan 2555, 1070 AS Amsterdam, the Netherlands, its successors and assigns.

 

AkioNobel Group means AkzoNobel and any entity in which it owns, directly or indirectly, fifty percent (50%) or more of the value or voting rights.

 

Annual Incentive Plan or AIP means the National Starch Short Term Incentive Plan, as amended from time to time.

 

Award shall have the meaning set forth in the LTIP.

 

Business means the National Starch worldwide business (formerly known as the Natural Polymers Group of the National Starch and Chemical Company) carried on by the Company and other members of the AkzoNobel Group for which You have management responsibility and as identified on Schedule 1; subject to any future additions to, deletions from, or restructuring of the Business by AkzoNobel.

 

Cause means Executive’s a) gross negligence in the performance of his duties and responsibilities under Section 2; b) dishonesty or fraud with respect to the business, reputation or affairs of the Company; c) conviction of or entry of a plea of nolo contendere to a felony or crime involving moral turpitude; d) intentional or reckless failure to abide by the lawful rules and policies of the Company; or e) material breach of this Agreement, which, if curable, remains uncured following thirty (30) days written notice specifying the nature of the breach

 

Change of Control means either:

 

(i)             a change in ownership of more than 50% of the shares of the Company determined in accordance with the principles of Treasury Regulations 1.409A- 3(5)(v); or

 

1

 

(ii)           a change in the ownership of more than seventy percent (70%) of the assets of the Business, otherwise determined in accordance with the principles of Treasury Regulations 1.409A-3(5)(vii). The legal entities that own the assets of the Business are listed on Schedule 1.

 

Company means National Starch LLC, its successors and assigns.

 

Disabled means that you are unable to perform your duties under this Agreement by reason of physical or mental illness or disability extending over a period of twenty six (26) consecutive weeks or more, or 26 weeks in total within a 365-day period as determined in the reasonable judgment of a medical doctor selected by Company and the insurance carrier administering the long term disability plan of Company determines that you are disabled and eligible for long term disability benefits under such plan.

 

Good Reason means your voluntary separation from  service within one hundred and twenty (120) days of the initial existence of one  more of the following conditions arising without your consent; (a) the Company moves your Principal Work Location more than 50 miles from Bridgewater, New Jersey; (b) the Company materially diminishes your duties or responsibilities as President and CEO (c) the Company assigns its rights and obligations under this Agreement to a purchaser of the Business or the Company, and the purchaser does not assume the obligations of the Company under this Agreement or (d) a material breach of this Agreement by the Company which is not cured within thirty (30) days following receipt of notice specifying the nature of the breach. In order for a voluntary separation from service to be treated as termination of employment for Good Reason, you must provide notice to the Company and AkzoNobel within ninety (90) days of the initial existence of the condition that you do not consent to the condition and the Company fails to remedy the condition within thirty (30) days of receipt of such notice.

 

Interest means the holding or control, in either case directly or indirectly, of securities or debentures whether as legal or beneficial owner or in any other capacity.

 

LTIP means the National Starch Long Term Incentive Plan] as amended from time to time. 

 

Par shall have the meaning set forth in the LTIP.

 

Performance Period shall have the meaning set forth in the LTIP.

 

Principal Work Location means the offices of National Starch at 10 Finderne Avenue, Bridgewater, New Jersey 08807 or such other location as you may be based at from time to time in accordance with clause 3.1, but in no event further than 50 miles from Bridgewater, New Jersey;

 

2

 

You or Your refers to James Zallie.

 

2.             TERM, JOB DESCRIPTION, DUTIES AND WORKING HOURS

 

2.1           This Agreement shall commence on the date hereof and terminate the earlier of two years following a Change of Control or December 31, 2014.

 

2.2           As at the date of this Agreement (the Effective Date), you agree to continue to be employed as President and CEO of National Starch LLC and the National Starch business on the terms and conditions set forth herein.

 

2.3           You will diligently perform the duties and exercise the powers consistent with your position that are assigned to you from time to time by the Company, and unless prevented by sickness, injury or other incapacity, will devote the whole of your time, attention and abilities during your working hours to the business of the Company. You will report to Werner Fuhrmann, in his capacity as a Manager of the Company..

 

2.4           Your working hours shall be the normal business hours as specified at your Principal Work Location, together with such additional hours necessary for the proper performance of your duties (for which no additional payment shall be made  or time off in lieu afforded).

 

3.             PLACE OF WORK/TRAVEL

 

3.1           Your normal place of work shall be the Principal Work Location.

 

3.2           You will be required to undertake travel both domestically and internationally as necessary for the proper performance of your duties.

 

4.             SALARY

 

4.1           Your base salary rate at the Effective Date will not be less than US$360,000 per annum (less applicable taxes and any required deductions); except that effective as of the date on which a Change of Control occurs, your base salary rate for all purposes under this Agreement and the plans referenced herein shall be not less than US$  $ 400,000. To the extent your base salary rate is increased to $400,000, such increase shall be deemed to have occurred on the day before the Change of Control for purposes of applying the rules of any plan referenced herein. Salary will accrue on a daily basis and will be paid bi-monthly by direct deposit into your nominated bank account.

 

4.2           Your salary will be reviewed on an annual basis during your employment, with the effective date of any increase being 1 April. The Company may elect to change this date provided the change applies to all salaried employees. The Company is under no obligation to increase your salary following a salary review, but shall, under no circumstances decrease your salary. No salary review will take place after notice has  been given by either party to terminate your employment.

 

4.3           You will not be entitled to additional remuneration for service as an officer or director of the Company or of any other member of the AkzoNobel Group.

 

3

 

5.             INCENTIVE PLANS

 

You will be eligible to participate in the senior executive incentive plans described below or any applicable additional or replacement plans (subject always to the terms, conditions and rules of such plans as amended from time to time).

 

(a)           Annual Incentive Plan

 

The terms of the Annual Incentive Plan will be set on an annual basis by AkzoNobel. Details of the performance measures which apply, their weightings and the appropriate financial targets for the relevant financial year will be supplied to you separately. Your target bonus for the 2009 and subsequent performance years will be 50% of the base salary rate in effect on the last day of the performance period. The performance period is the calendar year. The bonus payable under the Annual Incentive Plan will range from zero to 100% of your base salary rate.

 

(b)           Long Term Incentive Plan

 

You will be a participant in the LTIP, Grants are made annually under the LTIP for the 3-year performance cycle commencing on 1 January each year. The number of units granted in any given year may vary. The amount, if any, paid per unit at the end of the performance cycle is a function of performance during the period. LTIP payments will not be treated as pensionable compensation under the National Starch LLC Pension Plan, the National Starch LLC Excess Benefit Plan or any other defined contribution plan. Further, LTIP payments will not be used to determine the amount of benefits under any other employee benefit plan, unless such plan expressly provides otherwise. The rules of the LTIP and the details of your grant for the January 1, 2009 to December 31, 2011 performance period will be provided to you under separate cover. The Par  percentage of your LTIP grant(s) to be made in 2009, including any Bridging Awards as defined in the LTIP, will be 115% of base salary. Grants in future year may be at the same or a higher or lower percentage and will be determined by AkzoNobel at its sole discretion depending on a range of factors such as seniority, role and contribution and performance.

 

(c)           Executive Incentive Plan (EIP)

 

You will be a participant in the EIP, a special “single grant” plan for the top executive team of the Business. The rules of the EIP and the details of your grant will be provided to you under separate cover. EIP payments will not be (i) treated as pensionable compensation under the National Starch LLC Pension Plan, the National Starch LLC Excess Benefit Plan or other defined benefit pension plan; (ii) treated as eligible compensation under the Retirement Savings Plan of the ICI Group, the Executive Retirement Plan For Key Employees of the ICI Group or any other defined contribution plan; or (iii) otherwise used to determine the eligibility for or the amount of any benefit under any employee benefit plan sponsored or maintained by the Company or the AkzoNobel Group.

 

4

 

6.             RETIREMENT BENEFITS

 

6.1          Defined Benefit Pension Plan

 

(a)           General

 

You will remain a participant in the National Starch LLC Pension Plan and the National Starch LLC Excess Benefit Plan, as those plans are amended from time to time. The National Starch LLC Pension Plan is a tax qualified defined benefit plan. The National Starch LLC Excess Benefit Plan is an unfunded, nonqualified deferred compensation plan that replaces benefits that would have been paid under the National Starch LLC Excess Benefit Plan but for (i) limitations on the amount of pension payments imposed by Internal Revenue Code § 415, (ii) limitations on pensionable compensation imposed by Internal Revenue Code § 401(a)(17), and (iii) treatment of compensation deferred into the Executive Retirement Plan as non-pensionable. The National Starch LLC Excess Benefit Plan is subject to the claims of the Company and its general creditors.

 

(b)           Transfer From National Starch LLC To A Non-National Starch Business Akzo Nobel Entity

 

In the event that:

 

·                  Akzo Nobel sells the shares of National Starch LLC, where upon the completion of the sale National Starch LLC ceases to be a member of the Akzo Nobel Group; and

 

·                  You are actively employed by Akzo Nobel or a member of the Akzo Nobel Group immediately following the completion of such sale;

 

Then the following will occur:

 

(i)             Your benefit will be frozen under the National Starch LLC Pension Plan and National Starch LLC Excess Benefit Plan as of the date of the sale;

 

(ii)          Assets and liabilities equal to your frozen accrued benefit under the National Starch LLC Pension Plan will be transferred to an Akzo Nobel tax qualified defined benefit plan;

 

(iii)       The liability to pay your frozen accrued benefit under the National Starch LLC Excess Benefit Plan would be assumed by the relevant Akzo Nobel entity;

 

(iv)      Subsequent service with Akzo Nobel will not be counted for purposes of benefit accrual but will be counted as vesting service for purposes of determining eligibility for an unreduced pension under the Rule of 85 with respect to the National Starch LLC Pension Plan and National Starch LLC Excess Benefit Plan frozen accrued benefits; and

 

(v)         You will be eligible to participate on a prospective basis in the defined contribution plan of Akzo Nobel available to U.S. employees with the same job

 

5

 

level. Prior service recognized by National Starch LLC for vesting under the National Starch LLC Pension Plan would be recognized for vesting purposes under the relevant Akzo Nobel defined contribution plans.

 

6.2          Defined  Contribution Plan.

 

You will continue to be eligible to participate in the Retirement Savings Plan of the ICI Group (the “RSP”), as amended from to time. The RSP is a defined contribution 401(k) plan. It is anticipated that the RSP will be terminated at the end of 2009 and that assets and liabilities of RSP participants employed by the Company will be transferred to an Akzo Nobel or National Starch LLC defined contribution plan. In that event, your account in the RSP will be transferred to and become subject to the rules of the same defined contribution plan as the other non-union employees of National Starch LLC.

 

6.3          Executive Retirement Plan.

 

You will continue to be eligible to participate in the Executive Retirement Plan For Key Employees of the ICI Group For Post 2004 Deferrals (the “Post 2004 ERP” ), as amended from to time. Your account in the Executive Retirement Plan For Key Employees of the ICI Group For Pre-2005 Deferrals (“Pre-2005 ERP”) will continue to be administered in accordance with the rules of the Pre-2005 ERP, as amended from time to time. Post 2004 and Pre-2005 ERP (collectively “ERP”) accounts are hypothetically invested at the direction of the participant in identified mutual funds. The hypothetical investment is hedged through a grantor trust. The ERP and the grantor trust are subject to the claims of the Company and its general creditors.(1)

 

6.4          National Starch LLC Deferred Compensation and Survior Benefits Plans (the  “DCSBP”)

 

You will continue to be eligible to participate in the DCSBP. The DCSBP is a nonqualified deferred compensation plan. The DCSBP is subject to the claims of the Company and its general creditors. The DCSBP permits a small group of National Starch LLC executives to defer up to $100,000 per year of salary and/or Annual Incentive Plan bonus. The DCSBP is substantially similar to the former National Starch and Chemical Company Deferred Compensation and Survivor Benefits Plan (“NSC  DCSBP”). Currently, amounts deferred into the DCSBP accrue interest on the books of the Company at 2 percentage points above Moody’s composite corporate bond rate until termination of employment. After termination of employment, interest currently accrues at the Moody’s corporate bond rate. As of the Effective Date, you have not deferred any compensation into the DCSBP. It is anticipated that the DCSBP will be closed to new deferrals in 2010.

 

(1)          The ERP accounts of non-National Starch LLC employees and former employees will probably be transferred to an Akzo Nobel plan in 2010. It is not known at this time whether the ERP will remain in place for National Starch LLC or if it will become a participating employer in the Akzo Nobel plan.

 

6

 

6.5          Post-Retirement Welfare Benefits

 

You will be eligible for post retirement medical, dental, and prescription drug benefits to the same extent as other employees of National Starch LLC who retire on the same date as  you with the same age and service. For purposes of the preceding sentence, your service will be the aggregate of your post March 31, 2008 service with the Company and your service prior to April 1, 2008 with Indopeo, Inc. d/b/a National Starch and Chemical Company.

 

6.6          No Other Retirement Plans

 

For the avoidance of doubt, you are not eligible to participate in any other plan providing pension, deferred compensation, post retirement welfare, or other retirement benefits that is sponsored or maintained by any entity in the AkzoNobel Group other than National Starch or its successor.

 

7.             WELFARE BENEFIT PLANS

 

As of the Effective Date, you will be eligible to participate in the HealthPlus Program made available by the Company to its active salaried employees generally, and any applicable additional or replacement welfare benefit plan (subject always to the terms, conditions and rules of such plans, as amended from time to time). The HealthPlus Program will terminate effective December 31, 2009. Effective January 1, 2010, you will be eligible to participate in the same active welfare benefit plans available, generally, to the non-union employees of the Company.

 

8.              COMPANY CAR

 

You will be eligible for a company car in accordance with former National Starch & Chemical’s car policy, or any National Starch successor policy, applicable at your job level.

 

9.              VACATION

 

9.1           You will be eligible for vacation as determined under the National Starch LLC Vacation Policy (the “National Vacation Policy”) based on your job level and the aggregate of your post March 31, 2008 service with the Company and your service prior to April 1, 2008 with Indopco, Inc. d/b/a National Starch and Chemical Company. You will also be entitled to the applicable statutory or public holidays offered at your Principal Work Location.

 

9.2           Your vacation will accrue in accordance with the rules of the National Vacation Policy. There is no entitlement to pay in lieu of vacation not taken in any vacation year (other than as may arise upon termination of employment as specified in clause 9.3 below). Unused vacation will not carry over to the next year, except as otherwise permitted under the National Vacation Policy.

 

9.3           You are entitled to five (5) weeks of base salary in lieu of vacation (the “Special Vacation Payment”) upon your separation from service (as defined under Section 409A of the IRC, as amended). The Special Vacation Payment replaces the former National Starch and Chemical Company Senior Executive Vacation Plan. The Special Vacation Payment is not pensionable. You will not be entitled to any other payment for unused, accrued vacation. If applicable law

 

7

 

requires payment of any unused accrued vacation, the Special Vacation Payment shall be reduced by the amount of such payment.

 

10.          EXPENSES

 

The Company will reimburse you for reasonable out-of-pocket expenses incurred in the course of your employment in accordance with the Company’s expense reimbursement policy and subject to satisfactory evidence of payment.

 

11.          OTHER INTERESTS

 

Without the prior written consent of AkzoNobel, during the Term, you will not be directly or indirectly engaged, concerned or interested in any other business activity, trade or occupation nor hold directorships or other offices in or otherwise provide services to any corporation, partnership or other entity that is not a member of the AkzoNobel Group. Such consent shall not be unreasonably withheld.

 

12.          SHARE DEALING AND OTHER CODES OF CONDUCT

 

12.1         You will comply with the Akzo Nobel Code of Conduct or any additional or replacement code of conduct adopted by the Board of Directors of Akzo Nobel which may be applicable from time to time.

 

12.2         You will comply with all applicable rules and regulations of the Amsterdam Stock Exchange and any other relevant regulatory bodies, including all applicable regulatory codes on dealings in securities of Akzo Nobel.

 

13.          TERMINATION AND SEVERANCE

 

13.1         Any payments made pursuant to this Article 13 are subject to applicable tax and withholding and shall be conditioned on the delivery by you of a general release in the form attached hereto as Schedule 2. To the extent this Article 13 conflicts with the terms of the National Severance Plan (as hereafter defined), the AlP, or the LT1P this Article 13 shall control. You acknowledge and agree that all amounts paid to you under the National Severance Plan, the AIP or the LTIP shall constitute satisfaction of the Company’s obligation to pay such amounts under this Section 13

 

13.2         Except as provided in clause 13.10, you may terminate your employment by giving the Company not less than two weeks’ notice in writing.

 

13.3         Your employment and this Agreement will terminate automatically if you die or become Disabled , and you will not be entitled to any severance benefits under Section 13, except you shall receive (1) any accrued but unpaid Base Salary; (2) your bonus under AlP payable at target prorated according to the number of whole months worked during the year of termination and (3) your open Awards under LTIP determined and paid in accordance with the terms and conditions of the LTIP, prorated.

 

8

 

13.4       Absent Good Reason, if your employment should terminate by reason of your resignation prior to the end of the period to which any incentive plan (to include the Annual Incentive Plan, LTIP or EIP) or any replacement or equivalent arrangement in which you participate relates (the Incentive Period), you agree that you will not be entitled to any compensation for any loss of bonus/award or prospective bonus/award in respect of the Incentive Period, except to the extent required by law.

 

13.5       Without prejudice to any other rights the Company may have against you the Company may terminate your employment immediately for Cause and with no liability to make any further payment to you (other than in respect of salary accrued but not paid at the date of termination). For the avoidance of doubt, you will forfeit any right to any accrued but unpaid bonus under the Annual Incentive Plan and any outstanding awards (whether vested or not) under the LTIP or EIP or other incentive plan or any replacement or equivalent arrangement. This clause shall not restrict any other right the Company may have (whether at common law or otherwise) to terminate your employment summarily subject to the terms and conditions set forth herein.

 

13.6       If the  Company terminates your employment without Cause or if you terminate your employment for Good Reason, you will be eligible for  a lump sum severance payment calculated in accordance with the formula set forth in the National Starch LLC Severance Plan For Full and Part Time Salaried Employees (the “National Severance Plan”) annexed as Schedule 3. Aside from the calculation, this severance payment shall otherwise be subject to the terms, conditions and rules of the National Severance Plan as amended from time to time. The beginning of the calculation period will be July 23, 1983, when you commenced employment with the Company’s predecessor, Indopco, Inc. You shall also receive (a) your bonus under AlP payable at target prorated according to the number of whole months worked during the year of termination and (b) your outstanding Awards under LTIP determined and paid at no less than Par without proration in a single payment made within sixty (60) days after termination but otherwise in accordance with the terms and conditions of the applicable plan. If an Award has not yet been made for the Performance Period that begins in the year of termination, you will be deemed to have been  granted an Award for that Performance Period with a Par percentage equal to the Par percentage of the Award for the immediately preceding Performance Period.

 

13.7       On termination of your employment you will:

 

(i)                                immediately deliver to the Company all books, documents, papers, computer hardware (including any desktop, laptop, and/or blackberry, cell phones, computer software, computer records, computer data, credit cards, your company car together with its keys, and any other property relating to the business of or belonging to the Company or any other member of the AkzoNobel Group which is in your possession or under your control. You are not entitled to retain copies or reproductions of any documents, papers, files or computer or other electronic records relating to the business of or belonging to the Company or any other member of the Akzo Nobel Group; and

 

(ii)                             Immediately resign from any office you hold with the Company or any other member of the AkzoNobel Group (and from any related trusteeships) without any compensation for loss of office.

 

9

 

13.8                           You will not at any time after termination of your employment misrepresent yourself as being in any way concerned with or interested in the business of, or employed by, the Company or the AkzoNobel Group.

 

13.9                           The Company may suspend you during any period in which the Company is carrying out a disciplinary investigation into any alleged act of Cause relating to you. During such suspension you shall be paid your base salary.

 

13.10                     In the event of Change of Control prior to January 1, 2013, where you have not otherwise given notice of voluntary resignation and are employed by the Company immediately following the Change of Control, and the Company is not a member of the AkzoNobel Group following a Change of Control, the following terms and conditions will apply:

 

(i)                                     You will provide at least three months prior written notice during the two years following the Change of Control before terminating your employment with the Company;

 

(ii)                                  If the Company terminates your employment for any reason other than Cause prior to the second anniversary of the Change of Control, the Company will provide you with:

 

(a)  the lump sum severance payment calculated in accordance with the National Starch Plan as described in Section 13.6;

 

(b)  An additional severance payment of up to 78 weeks of base salary. If termination occurs after the 26th week following the Change of Control (“CIC”), the payment will be reduced by one week of base salary for each full week you are employed after the 26th week. For example:

 

	
Termination of Service
    	
 
    	
Weeks of Base Salary
    	
 
    
	
0   to 26 weeks after CIC
    	
 
    	
78
    	
 
    
	
32   weeks after CIC
    	
 
    	
74
    	
 
    
	
52   weeks after CIC
    	
 
    	
52
    	
 
    
	
78   weeks after CIC
    	
 
    	
26
    	
 
    
	
104   weeks after CIC
    	
 
    	
0
    	
 
    

 

A week of base salary is your annual salary divided by 52.

 

(c)  your bonus under AIP at target prorated according to the number of whole months worked during the year of termination. ) ; and

 

(d)  LTIP: if the purchaser of the Company or Business continues the LTIP or establishes a substantially similar plan and assumes any outstanding Awards, you will receive your outstanding Awards determined and paid at no less than Par without proration in a single payment made within sixty (60) days after termination but otherwise in accordance with the terms and conditions of the applicable plan. If an Award has not yet been made for the Performance Period that begins in the year of termination, the Award will be deemed to have a Par percentage equal to the Par percentage of the Award for the immediately

 

10

 

preceding Performance Period. If the purchaser of the Company or Business does not continue the LTIP or establish a substantially similar plan and assume any outstanding Awards, your outstanding Awards will be determined and paid pursuant to the terms of the LTIP and no further LTIP payment will be made.

 

13.11                     In the event of a Change of Control prior to January 1, 2013, where you have not otherwise given notice of voluntary termination and are employed within the AkzoNobel Group immediately following the Change of Control. The following terms and conditions will apply:

 

(i)                                     Absent Cause, AkzoNobel will not terminate your employment during the sixty (60) day period commencing from the Change of Control.

 

(ii)                                  During this sixty-day period AkzoNobel will actively seek suitable alternative employment at a comparable level of seniority and remuneration for you within the Akzo Nobel Group (e.g. Business Unit Managing Director).

 

(iii)                               Should a position at a comparable level not be offered within this sixty day period or if you and AkzoNobel cannot reach an agreement on the new position then your employment with the Akzo Nobel Group will terminate on the last day of the sixty (60) day period and then you will receive (a) a lump sum severance payment calculated in accordance with §13.6; (b) an additional lump sum severance payment of 70 weeks of base salary (c) your bonus under AIP at target prorated according to the number of whole months worked during the year of termination; and (d) LTIP; your outstanding Awards will be determined and paid within sixty days after termination but otherwise pursuant to the terms and conditions of the LTIP at no less than Par without proration and no further LTIP payment will be made.

 

In the event your employment with the AkzoNobel Group is terminated under the provisions of this Section 13.11 you will not be eligible to participate in the short team, long term or other incentive plans of the AkzoNobel Group, except as expressly provided in this Section 13.11.

 

14.                               CONFIDENTIALITY

 

14.1                           Except insofar as such information is already in the public domain, you will keep secret and will not at any time (whether during your employment or thereafter) use for your own or another’s advantage, or reveal to any person, firm, company or organisation and shall use all reasonable endeavours to prevent the publication or disclosure of any information which you know or ought reasonably to have known to be confidential, concerning the Business, the Company, any member of the Akzo Nobel Group or any of its or their customers, potential customers or business partners, including without limitation:

 

(i)                                     trade secrets, formulas and other information of a sufficiently high degree of confidentiality as to amount to a trade secret;

 

11

 

(ii)                                  information concerning the way the Company or member of the Akzo Nobel Group is run, the manner in which it does business, and who it does business with and on what terms; and

 

(iii)                               information or items which have been marked to indicate that they are confidential or information which you were told was confidential at the time you acquired it or which you should have known was confidential.

 

The information described in (i), (ii) and (iii), above, includes but is not limited to:

 

(A)                              information relating to the salaries, remuneration packages, or other terms of employment of employees of the Company or member oldie Akzo Nobel Group;

 

(B)                                the business methods and information (including prices charged, discounts given to customers or obtained from suppliers, product development, marketing and advertising programs, costs, budgets, turnover, sales targets or other financial information);

 

(C)                                lists and particulars of suppliers and customers and the individual contacts at such suppliers and customers;

 

(D)                               details and terms of agreements with suppliers and customers;

 

(E)                                 manufacturing or production processes or know-how;

 

(F)                                 details as to the design of products and inventions or developments relating to future products;

 

(G)                                details of any promotions or future promotions or marketing or publicity exercises;

 

(H)                               details of any business plans or strategy; and

 

(I)                                    any information which may affect the value of the Business, the Company or any member of the Akzo Nobel Group,

 

unless such information was (i) disclosed by a third party without breach of any obligation of confidentiality; or (ii) become known or available to the public generally through no wrongful act.

 

14.2                           The restrictions in this clause 14 shall not apply to any disclosure or use authorized by the Company or required by law or by your employment.

 

14.3                           Nothing in this clause 14 is intended to waive the rights of the Company under any other confidentiality or secrecy agreement between you end the Company.

 

12

 

15.                               POST-TERMINATION COVENANTS

 

15.1                           For a period of fifteen (15) months after your termination of employment for any reason from the Company, you shall not, without the consent of AkzoNobel (or after a Change of Control, the Company or its parent,) for yourself, or as agent, partner, investor, consultant or employee of any person, firm or corporation, engage in any activity in connection with the development, manufacture, use or sale of a competitive product (as hereinafter defined) in any geographic location where the Company or the Business conducts business. A competitive product shall mean any product of a type sold or usable for substantially the same purposes as a product manufactured, developed or sold for or by the Business. In addition, you shall not solicit, any customer or potential customer of the Company or the Business during this period.

 

15.2                           During the first fifteen (15) months following your termination of employment from the Company, you shall keep the Company advised in writing of the name and address of each business organization for which you act as agent, partner, representative, investor, consultant or employee.

 

15.3                           During the first twelve (12) months following your termination of employment from the Company, you shall not directly or indirectly induce or assist in the inducement of any employee of the Company away from his or her employment with the Company or from the faithful discharge of his or her contractual and fiduciary obligations to serve the Company’s interests with undivided loyalty.

 

16.                               INTELLECTUAL PROPERTY

 

16.1                           Any invention or improvement made or conceived by you during your employment (whether during or after working hours) with the Company or its predecessor Indopco, Inc. d/b/a National Starch and Chemical Company relating in any way to the Company’s or Business’ products or any products in the process of development by the Company or the Business, or any similar or competitive products, or to the method of making or using any such products, or relating in any other manner to the Company or the Business shall be promptly disclosed in writing to the Company and shall be the sole property of the Company or the relevant Group- Company. Upon the Company’s or AkzoNobel’s request (whenever made) you shall execute and assign without further payment to the Company applications for letters patent for the United States and such foreign countries as the Company may designate and shall execute and deliver to the Company such other instruments as the Company deems necessary for it to obtain such letters patent and all rights therein. Any invention or improvement made or disclosed within twelve (12) months after termination of employment with the Company shall be rebuttably presumed to have been made or conceived during your employment.

 

16.2                           You are not obligated to assign to the Company your right to an invention for which no equipment, supplies, facility, or confidential information of the Company or the Business was used and which was developed entirely on your own time and which (i) does not relate to the Business, or (ii) does not result from any work performed by you for the Company or AkzoNobel Group.

 

13

 

17.                               HEALTH AND SAFETY

 

The health and safety of individuals and the safe operation of all activities are of fundamental importance within the Company’s operations. As an employee you are responsible to the Company and to your colleagues to work safely and you are required to keep yourself informed of current safety procedures and policy and of the Company’s rules in respect of safety and good practice.

 

18.                               DATA PROTECTION

 

As part of your employment you agree that the Company may retain and process data relevant to or connected with your employment with the Company including but not limited to payroll information, personnel records, attendance records, health records, disciplinary records and training records. It is agreed that the processing of such data is necessary for the efficient management of your employment by the Company.

 

19.                               ENTIRE AGREEMENT, AMENDMENT, COUNTERPARTS

 

This Agreement constitutes the entire agreement and understanding between the parties, and supersedes all other agreements both verbal and in writing between you and the Company.. This Agreement cannot be amended or modified except by a written instrument signed by both parties. This Agreement may be executed in counterparts, each of which shall be deemed an original and each of which shall constitute one and the same Agreement.

 

20.                               Notices

 

Any notice to be given to you under this Agreement may be served by hand, registered or certified U.S. Mail, or by private delivery service to you at your usual or last known address, with a copy to Hollis Gonorka Bad, Esq., Withers Bergman LLP, 430 Park Avenue, New York, NY 10022. Any notice to be given to the Company may be served by hand, registered or certified U.S. Mail or private delivery service to the Vice President of Human Resources of the Company at 10 Finderne Avenue Bridgewater, NJ 08807. Any notice served by registered or certified U.S. Mail or by private delivery service shall be deemed to have been served on the seventh working day following the date of posting.

 

21.                               GOVERNING LAW

 

This Agreement is governed by the internal laws of the State of New Jersey, United States of America, without regard to conflicts of law principles.

 

22.                               JURISDICTION AND MEDIATION

 

Except for an alleged breach by you of §§14, 15 or 16, you and the Company (“the Parties”) agree to mediate any dispute arising under this Agreement. In the event of any such dispute, the Parties, within thirty (30) days of a written request for mediation, shall attend a mediation to be conducted in Somerset County, New Jersey in order to make a good faith reasonable effort to resolve such dispute. The Parties shall attempt, in good faith, to agree to a mediator. If the Parties are unable to agree to a mediator, the Parties shall submit the matter to an alternative

 

14

 

dispute resolution provider located in Somerset County, New Jersey to appoint a mediator and conduct the mediation. If this good faith mediation effort fails to resolve the dispute arising under this Agreement, than either Party may commence an action to resolve such dispute; provided however, that any such action shall be brought in federal court to the extent such court has jurisdiction, or state court having situs in Somerset County, New Jersey and the Parties consent to the jurisdiction of such court and agree that such courts are a convenient forum for the resolution of the dispute. The Parties each waive personal service of process and consent that service of process upon either Party may be made by certified mail or registered mail, return receipt required, directed to the Party’s address set forth in the introductory paragraph hereof, and service so made shall be deemed completed five (5) days after the same shall have been so mailed.

 

23.                               CONFIRMATION OF AGREEMENT

 

This agreement shall cease to be without prejudice and subject to contract when it has been signed and dated by the Company.

 

24.                               SPECIFIC PERFORMANCE AND SURVIVAL

 

24.1                           You agree that (i) the Company, or any member of the Akzo Nobel Group have the right to specifically enforce your obligations under clauses 11, 14, 15, and 16 to the extent permitted by applicable law, (ii) monetary damages for breach of those provisions would be an inadequate remedy and (iii) the Company, and the Akzo Nobel Group shall also have such other rights and remedies for breach of those provisions as are permitted by applicable law.

 

24.2                           For the avoidance of doubt, clauses 13.7, 13.8, 14, 15, 16, 22, and 24 shall survive the termination of this Agreement.

 

25.                               INDEMNIFICATION

 

The Company shall indemnify you, hold you harmless and advance your costs and expenses that are subject to indemnification to the maximum extent permitted under Article XVII(b) of the Company’s Operating Agreement attached as Schedule 4 and applicable law, and shall provide for directors and officers liability insurance to insure you against claims in your capacity as an Officer or Manager. In the event that the Company amends the LLC Operating Agreement in a way that reduces or diminishes your right to indemnification, this Section 25 shall be construed to incorporate in its entirety the provisions of Article XVII(b) of the Company’s Operating Agreement as in effect as of the date hereof.

 

26.                               SECTION 409A

 

A termination of employment shall not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of amounts or benefits upon or following a termination of employment unless such termination is also a “Separation from Service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement references to a “resignation,” “termination,” “termination of employment” or like terms shall mean Separation from Service.

 

15

 

This Agreement is intended to comply with the applicable requirements of Internal Revenue Code § 409A (hereafter “409A”) and shall be limited, construed and interpreted in accordance with such intent, If any provision of this Agreement would cause you to incur any additional tax or interest under 409A, including final regulations or any other guidence issued by the Secretary of the Treasury and/or the Internal Revenue Service with respect thereto, the Company shall, after consulting with you, reform such provision but only to the extent such reformation can be done without any additional cost to the Company or any AkzoNobol Group. Neither the Company nor any member of the AkzoNobel Group shall have any liability to you for any taxes that may be due by you under Internal Revenue Code § 1409A.

 

By signing this Agreement, you are acknowledging and agreeing that if you are determined to be a “specified employee” (as defined under 409A), that any payments of nonqualified deferred compensation including any severance payments subject to Section 409A due you from the Company under this Agreement or otherwise during the first six (6) months following your “separation from service” (as defined under 409A) will be delayed until the seventh (7th) month following your separation from service.

 

27.                               HEADINGS

 

The headings or titles of clauses, or sub clauses are given solely for convenience of reference and shall not be deemed to modify or affect in any way the text or meaning of a clause or sub clause.

 

28.                               WAIVER

 

By an instrument in writing similarly executed, you or a duly authorized officer of the Company may waive compliance by the other party with any specifically identified provision of this Agreement that such other party was or is obligated to comply with or perform; provided, however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure. No failure to exercise and no delay in exercising any right, remedy, or power hereunder preclude any other or further exercise of any other right, remedy, or power provided herein or at law or in equity.

 

29.                               SEVERABILITY

 

A.           If any provision of this Agreement is found by a proper court to be unreasonable and/or unenforceable, then such provision shall be considered amended to that considered reasonable and enforceable by the court, and as amended, shall be enforced; all remaining terms and conditions shall continue in full force and effect.

 

B.             If any provision of this Agreement is hold to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement.

 

16

 

30.                               ASSIGNMENT

 

The Company may assign, without your consent, all its rights, duties and obligations under this Agreement to another member of the AkzoNobel Group, to the purchaser of fifty percent (50%) or more of the assets of the Business or to any affiliate of such purchaser.

 

 

	
NATIONAL STARCH LLC
    
	
 
    
	
BY:
    	
/s/ [ILLEGIBLE]
    	
 
    	
/s/   H. Hutmacher
    
	
 
    	
 
    	
 
    	
H.   HUTMACHER
    
	
DATED:
    	
Aug 26, 2009
    	
 
    	
Aug   31, 2009
    

 

 

	
/s/ James Zallie
    	
 
    
	
JAMES ZALLIE
    	
 
    
	
 
    	
 
    
	
DATED:
    	
July 31, 2009
    	
 
    
				

 

17

 

Attachment 1

 

National Severance Plan

 

 

(Former NSC plan document to be attached)

 

18Exhibit 10.32

 

NATIONAL STARCH LLC

 

SEVERANCE PLAN FOR

 

FULL TIME AND PART TIME NON-UNION EMPLOYEES

 

 

TABLE OF CONTENTS

 

	
ARTICLE I
    	
PURPOSE AND   EFFECTIVE DATE
    	
1
    
	
1.1
    	
Purpose
    	
1
    
	
1.2
    	
Effective Date
    	
1
    
	
ARTICLE II
    	
DEFINITIONS
    	
2
    
	
2.0
    	
 
    	
2
    
	
2.1
    	
Adjusted Service Date
    	
2
    
	
2.1.1
    	
 
    	
2
    
	
2.1.2
    	
 
    	
2
    
	
2.1.3
    	
 
    	
2
    
	
2.1.4
    	
 
    	
3
    
	
2.1.5
    	
 
    	
4
    
	
2.2
    	
Administrative Committee
    	
4
    
	
2.3
    	
Administrator
    	
4
    
	
2.4
    	
Base Compensation
    	
4
    
	
2.5
    	
Board
    	
5
    
	
2.6
    	
Cause
    	
5
    
	
2.7
    	
COBRA Coverage
    	
5
    
	
2.8
    	
Code
    	
5
    
	
2.9
    	
Company
    	
5
    
	
2.10
    	
Employee
    	
5
    
	
2.11
    	
Excess Severance Payment
    	
5
    
	
2.12
    	
ERISA
    	
5
    
	
2.13
    	
Former National Starch Employee
    	
5
    
	
2.14
    	
Group
    	
6
    
	
2.15
    	
Henkel Group
    	
6
    
	
2.16
    	
Involuntary Termination
    	
6
    
	
2.16.1
    	
 
    	
6
    
	
2.16.2
    	
 
    	
6
    
	
2.16.3
    	
 
    	
6
    
	
2.16.4
    	
 
    	
6
    
	
2.16.5
    	
 
    	
6
    
	
2.16.6
    	
 
    	
6
    
	
2.16.7
    	
 
    	
7
    
	
2.17
    	
Notice of Termination
    	
7
    
	
2.18
    	
Part-Time Employee
    	
7
    
	
2.19
    	
Participant
    	
7
    
	
2.20
    	
Payment Due Date
    	
7
    
	
2.21
    	
Plan
    	
7
    
	
2.22
    	
Plan Year
    	
7
    
	
2.23
    	
Prior Severance Payment
    	
7
    
	
2.24
    	
Release
    	
8
    
	
2.25
    	
§
    	
8
    
	
2.26
    	
Separation From Service
    	
8
    
				

 

i

 

	
2.26.1
    	
Permanent, Significant Reduction In Hours Worked
    	
8
    
	
2.27
    	
Severance Payment
    	
8
    
	
2.28
    	
Shareholder
    	
8
    
	
2.29
    	
Specified Participant
    	
8
    
	
2.30
    	
Temporary Employee
    	
9
    
	
2.31
    	
Termination Date
    	
9
    
	
2.32
    	
Week’s Compensation
    	
9
    
	
2.33
    	
Year of Service
    	
9
    
	
ARTICLE III
    	
PARTICIPATION
    	
10
    
	
3.1
    	
Eligibility
    	
10
    
	
3.2
    	
Ineligible Salaried Employees
    	
10
    
	
3.3
    	
Sale of Business Rule
    	
11
    
	
3.4
    	
Death, Termination For Cause, or Resignation
    	
12
    
	
3.5
    	
Disability
    	
12
    
	
ARTICLE IV
    	
BENEFITS
    	
13
    
	
4.1
    	
Notice; Pay in Lieu of Notice
    	
13
    
	
4.2
    	
Additional Benefits - With Release
    	
13
    
	
4.2.1
    	
Severance Payment
    	
13
    
	
4.2.2
    	
Outplacement
    	
14
    
	
4.2.3
    	
Six Month Retiree Medical/COBRA   Coverage Subsidy
    	
14
    
	
4.3
    	
Maximum Severance Payment
    	
15
    
	
4.4
    	
Specified Participant Rule
    	
15
    
	
ARTICLE V
    	
PLAN   ADMINISTRATION
    	
16
    
	
5.1
    	
Operation of the Plan
    	
16
    
	
5.2
    	
External Audits
    	
16
    
	
5.3
    	
Named Fiduciary
    	
16
    
	
5.4
    	
Returned Checks
    	
16
    
	
5.5
    	
Fees and Expenses
    	
16
    
	
5.6
    	
Rules for Administering the Plan
    	
16
    
	
ARTICLE VI
    	
CLAIMS
    	
18
    
	
6.1
    	
General
    	
18
    
	
6.2
    	
Denial
    	
18
    
	
6.3
    	
Appeals
    	
18
    
	
ARTICLE VII
    	
PLAN   AMENDMENTS
    	
20
    
	
7.1
    	
Amending Authority
    	
20
    
	
7.1.1
    	
 
    	
20
    
	
7.1.2
    	
 
    	
20
    
	
7.2
    	
Plan Termination
    	
20
    
	
ARTICLE VIII
    	
GENERAL
    	
21
    
	
8.1
    	
Summary Plan Description
    	
21
    
	
8.2
    	
Right of Setoff
    	
21
    
	
8.3
    	
Governing Law
    	
21
    
	
8.4
    	
Impact On Other Benefits
    	
21
    
	
8.5
    	
Tax Withholding
    	
22
    
	
8.6
    	
Section 409A
    	
22
    
				

 

ii

 

ARTICLE I

 

PURPOSE AND EFFECTIVE DATE

 

1.1          Purpose.  The purpose of the National Starch LLC Severance Plan For Full Time and Part-Time Non-Union Employees (the “Plan”) is to provide eligible employees who are involuntarily terminated from employment by the Company with the benefits set forth in this Plan.

 

1.2          Effective Date.  The Plan is effective on April 1, 2008.

 

 

ARTICLE II

 

DEFINITIONS

 

2.0          The following words and phrases used in this Plan shall be given the meanings stated unless different meanings are clearly required by the context in which used.  The headings and titles of articles are given solely for convenience of reference and shall not be deemed to modify or affect in any way the text or meaning of the article or section to which appended.  Capitalized nouns are used throughout the Plan text for the terms defined by this and other Articles.  Pronouns, wherever used, shall be deemed to include both plural and singular as well as masculine and feminine.

 

2.1          “Adjusted Service Date” means, unless otherwise provided in a Benefit Schedule, the first day of an Employee’s employment with the Group; adjusted to reflect breaks in service under rules promulgated by the Administrator and the rules set out below.

 

2.1.1       To the extent provided in this Plan, or an agreement between a member of the Group and a predecessor employer or an affiliate of such predecessor employer, or a resolution of the Board, the Adjusted Service Date may reflect service recognized by a predecessor employer that was not a member of the Group at the time the service was performed.

 

2.1.2       Except as provided in subsection 2.1.4, below, if an Employee ceases to be employed by the Group for the reasons stated under the Sale of Business Rule of Section 3.3, and is subsequently reemployed by the Group, and the new organization, immediately following the transaction, recognizes service recognized by this Plan for purposes of severance, the Adjusted Service Date shall be based on the date the Employee is reemployed.  Such prior service shall not be used to determine the Adjusted Service Date or Years of Service.

 

2.1.3       If an Employee has received a Prior Severance Payment on account of a prior termination of employment from a member of the Group or predecessor employer,

 

2

 

service used to determine such Prior Severance Payment shall not be used to determine the Adjusted Service Date or Years of Service.  However, the Administrator may use such service to determine the Adjusted Service Date and Years of Service if the reemployed Employee pays to the Company an amount equal to one hundred percent (100%) of such Prior Severance Payment prior to receipt of a subsequent Notice of Termination or such shorter time period set by the Administrator.

 

2.1.4       Notwithstanding the above, Service with a predecessor employer shall be recognized to determine the Adjusted Service Date and Years of Service for the Employee groups described, below:

 

	
Employee Group
    	
 
    	
Service Recognized
    
	
 
    	
 
    	
 
    
	
Employees   who transferred to the books of the Company effective April 1, 2008 from   Indopco, Inc. d/b/a National Starch and Chemical Company.
    	
 
    	
Pre-April 1,   2008 service recognized under the National Starch and Chemical Company   Severance Plan For Full Time and Part Time Non-Union Employees.
    
	
 
    	
 
    	
 
    
	
Employees   who transfer to the books of the Company from ICI Group Services Inc. on or   after April 1, 2008 and prior to the date the Company ceases to be a   member of the Group in which Akzo Nobel N.V. is the ultimate parent.
    	
 
    	
Pre   transfer service recognized under the ICI Severance Plan For Corporate Staff   or any successor severance plan.
    
	
 
    	
 
    	
 
    
	
Employees   who transfer to the books of the Company from The Glidden Company on or after   April 1, 2008 and prior to the date the Company ceases to be a member of   the Group in which Akzo Nobel N.V. is the ultimate parent.
    	
 
    	
Pre   transfer service recognized under the Termination and Cash Payment Plan of   ICI Paints or any successor severance plan.
    
	
 
    	
 
    	
 
    
	
“IT   Employees” as that term is defined in the Master Implementation Agreement by   and between Akzo Nobel N.V. and 
    	
 
    	
Pre-April 3,   2008 service recognized under the National Starch and Chemical Company   Severance Plan For Full Time and Part Time Non-Union Employees plus service 
    

 

3

 

	
Henkel   KGaA dated April 3, 2008, who transfer to the books of the Company after   April 2, 2008 and prior to April 1, 2010 from the Henkel Group.
    	
 
    	
with   the Henkel Group on or after April 3, 2008 through the day prior to the   date of transfer to the Company from the Henkel Group.
    
	
 
    	
 
    	
 
    
	
Former   National Starch Employees hired on or after April 1, 2008 and prior to   January 1, 2010 and did not receive a Prior Severance Payment from the   Henkel Group.
    	
 
    	
Pre-April 3,   2008 service recognized under the National Starch and Chemical Company   Severance Plan For Full Time and Part Time Non-Union Employees.
    

 

2.1.5       Service for any given period of time may only be counted once in determining the Adjusted Service Date or Years of Service.

 

2.2          “Administrative Committee” means the committee appointed by the Board to perform the duties of the Administrative Committee; provided that until such time as the Company ceases to be a member of the Group of which Akzo Nobel N.V. is the ultimate parent, the Administrative Committee shall be the Employee Benefits Administration Committee of ICI American Holdings Inc.

 

2.3          “Administrator” means the Company or such persons designated by it to assume the duties of the Administrator.

 

2.4          “Base Compensation” means the annualized base salary rate and, if applicable, annualized sales commissions of a Participant determined as of the Termination Date.  Base Compensation includes pre-tax employee contributions under any qualified defined contribution plan with a Code Section 401(k) arrangement, salary deferrals under any unfunded, nonqualified plan maintained by the Company for management employees, and amounts deferred (including employee premiums) under a flexible spending account established pursuant to Section 125 of the Code.  Base Compensation does not include overtime, shift differential, long term incentive award payments, short term incentive bonuses or any other form of compensation which is not described in the preceding sentences of this Section.

 

4

 

2.5          “Board” means the Board of Managers of National Starch LLC.

 

2.6          “Cause” means termination of employment by action of the Company for dishonesty, insubordination, flagrant violation of rules and regulations of the Company, negligence, misconduct, or commission of a felony.

 

2.7          “COBRA Coverage” means federally-mandated health and dental continuation coverage.  For purposes of this Plan, COBRA Coverage does not include continuation coverage for a Code Section 125 Healthcare Spending Account.

 

2.8          “Code” means the Internal Revenue Code of 1986, as amended.

 

2.9          “Company” means National Starch LLC.

 

2.10        “Employee” means any person in pay status with the Company who is a common law employee of the Company and is identified in the human resources information system, payroll system or other records of the Company as an Employee.  Consultants, independent contractors and other individuals not classified by the Company as Employees are not Employees.

 

2.11        “Excess Severance Payment” means the portion of any Severance Payment that exceeds two (2) times the Code § 401(a)(17) limit in effect for the calendar year in which the Participant’s Separation From Service occurs.

 

2.12        “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

 

2.13        “Former National Starch Employee” means an Employee (other than an IT Employee referenced in subsection 2.1.4) who was employed by Indopco, Inc., Ablestik Laboratories or Acheson Industries Inc. on April 3, 2008 when those companies were sold by ICI American Holdings Inc. to an affiliate of Henkel KGaA.

 

5

 

2.14        “Group” means the Company, the ultimate parent of the Company, and any entity in which the ultimate parent directly or indirectly holds at least a fifty percent (50%) ownership interest, in value or voting power.  As of the Effective Date, the ultimate parent was Akzo Nobel N.V.

 

2.15        “Henkel Group” means Indopco, Inc., Acheson Industries, Inc. and Ablestik Laboratories or any successor thereto in which Henkel KGaA holds, directly or indirectly, a fifty percent (50%) or more ownership interest.

 

2.16        “Involuntary Termination” means the involuntary termination of employment from the Group by reason of the elimination of a job position or a reduction in force subject to the rules of subsections 2.16.1 through 2.16.7 below.

 

2.16.1     A voluntary resignation is not an Involuntary Termination.

 

2.16.2     A termination of employment described in Section 3.3 or 3.4 is not an Involuntary Termination.

 

2.16.3     A transfer of employment from one member of the Group to another is not an Involuntary Termination.

 

2.16.4     A termination of employment for Cause is not an Involuntary Termination.

 

2.16.5     A termination of employment initiated by the Company where the Company in its sole discretion has determined that the Employee is unable to perform his job satisfactorily is not an Involuntary Termination.

 

2.16.6     If an eligible Employee is offered a full time equivalent position by a member of the Group prior to his Termination Date, is not required to relocate, and refuses the position, such Employee’s subsequent termination of employment by the Company is not an Involuntary Termination.

 

6

 

2.16.7     If an Employee has a written contract of employment for a fixed term, the termination of the Employee at the end of such fixed term is not an Involuntary Termination.

 

2.17        “Notice of Termination” means the oral or written notice given to a Participant specifying his Termination Date; provided that the Notice of Termination need not specify the exact date so long as a “not earlier than date” is specified in the notice.

 

2.18        “Part-Time Employee” means an Employee who is employed on a less than full-time basis who is identified on the human resources information system and other records of the Company in a classification that anticipates that the Employee will be employed at twenty (20) or more hours per week on a continuous basis as compared to a temporary or seasonal basis.

 

2.19        “Participant” means an Employee of the Company who satisfies the eligibility criteria of Article III.

 

2.20        “Payment Due Date” means the date stated in the Release by which payment must be made.  The Payment Due Date may not be later than the March 15 following the calendar year of the Termination Date.  If the Payment Due Date is not stated in the Release, the Payment Due Date may be no later than fifteen (15) days and two months following the Termination Date.

 

2.21        “Plan” means the National Starch LLC Severance Plan For Full Time and Part-time Non-Union Employees.

 

2.22        “Plan Year” means the calendar year; provided that the initial Plan Year shall be a short year beginning April 1 2008 and ending December 31, 2008.

 

2.23        “Prior Severance Payment” means a severance, separation or other payment made to an Employee on account of a prior termination of employment from the Company or the Group, or a predecessor employer, to the extent such payment was based on service that would be

 

7

 

recognized by this Plan to determine the Adjusted Service Date or Years of Service if such payment had not been made.

 

2.24        “Release” means an irrevocable, binding release, in the form prescribed by the Company, which must be executed by a Participant to receive the benefits described in Section 4.2.

 

2.25        “§” means Section.

 

2.26        “Separation From Service” means the Participant’s termination of employment with the Company and the Group by reason of death, retirement or otherwise.  Except as otherwise provided in subsection 2.26.1, below, the provisions of Treasury Regulations § 1.409A-1(h) shall be applied in determining when a termination of employment has occurred.

 

2.26.1    Permanent, Significant Reduction In Hours Worked.  Separation From Service will also occur on the date after which the Employer and the Participant reasonably anticipate a permanent reduction in the level of bona fide services to be provided by the Participant to the Group to a level that is forty nine percent (49%) or less of the average level of bona fide services performed during the twelve (12) months immediately preceding such date.

 

2.27        “Severance Payment” means the lump sum payment described in Section 4.2

 

2.28        “Shareholder” means any entity that directly owns more than fifty percent (50%) of the voting power and value of the Company.  On the Effective Date, the Shareholder was ICI American Holdings Inc.

 

2.29        “Specified Participant” means a Participant who is a “specified employee” within the meaning of Treasury Regulations § 1.409A-1(i) on his Separation From Service.  The specified

 

8

 

employee identification date is December 31 of the calendar year preceding the calendar year of Separation From Service.

 

2.30        “Temporary Employee” means any Employee (other than a Part-Time Employee) who is hired to perform seasonal, temporary, part-time or other services on a less than full-time basis.

 

2.31        “Termination Date” means the date that a Participant’s employment is terminated by the Company pursuant to the Notice of Termination.

 

2.32        “Week’s Compensation” means one fifty-second (1/52) of a Participant’s Base Compensation.

 

2.33        “Year of Service” means a twelve (12) month period measured from a Participant’s Adjusted Service Date and each anniversary thereof.

 

9

 

ARTICLE III

 

PARTICIPATION

 

3.1          Eligibility.  Except as otherwise provided in this Article, every full time and part-time non-union Employee of the Company shall be eligible for a benefit under this Plan if he terminates employment with the Group by reason of an Involuntary Termination.  Any Employee who becomes entitled to a benefit under this Plan by reason of the preceding sentence is referred to as a Participant.  Eligibility to participate shall end when the Employee ceases to be a full time or part-time Employee of the Company or becomes ineligible by reason of Section 3.2.

 

3.2          Ineligible Salaried Employees.  Even if the criteria of Section 3.1 are met, the following Employees are not eligible to participate in this Plan:

 

(i)            Temporary Employees;

 

(ii)           Employees who are members of a collective bargaining unit to which this Plan has not been extended by a collective bargaining agreement;

 

(iii)          Employees entitled to a severance type payment under any other plan, policy, arrangement, or agreement which would obligate the Company or other member of the Group to make such payment;

 

(iv)          Leased employees within the meaning of Section 414(n) of the Code;

 

(v)           Nonresident aliens who are not performing services for the Group in the United States;

 

(vi)          Any Employee who has agreed in writing that he is not eligible for a benefit under this Plan or for severance benefits in general;

 

10

 

(vii)         Any secondee or other Employee who has an enforceable right to resume employment or to be recalled to employment with any member of the Group;

 

(viii)        Any individual who is a student working for the Company as an intern or cooperative;

 

(ix)           Any Employee who has been seconded to the Company on an international assignment from a non-U.S. member of the Group;

 

(x)            Any Employee who detassels corn or performs other agricultural work; and

 

(xi)           Any consultant, independent contractor or other individual who is not classified as an Employee by the Company without regard to any determination by the Internal Revenue Service, Department of Labor or other governmental agency, that such individual is a common law employee of the Company.

 

3.3          Sale of Business Rule.  In the case where an otherwise eligible Employee is no longer employed by the Group because of the sale of the stock of the Company or any member of the Group, but the Employee continues to be employed by the Company, such Employee is not eligible for benefits under this Plan.  In the case of the sale, lease, or other transfer of all or a portion of the assets, products, services or operations of the Company to another organization outside the Group, an otherwise eligible Employee is not eligible for benefits under the Plan if either of the following occurs:

 

(i)            the Employee is employed by the new organization immediately following the sale, transfer or lease or is so employed within a time period specified in an agreement between the Company and the new organization; or

 

(ii)           the Company terminates the employment of an Employee who did not accept an offer of employment from the new organization where the new organization offered compensation which was comparable to the compensation provided by the Company and

 

11

 

did not require the Employee to relocate more than fifty (50) miles from his place of employment as a condition of being employed by the new organization.  If the Base Compensation offered by the new organization to such Employee is equal or greater than Base Compensation provided by the Company, compensation is deemed to be comparable for purposes of this clause (ii).

 

3.4          Death, Termination For Cause, or Resignation.  If an otherwise eligible Employee who has been given a Notice of Termination dies, is terminated for Cause, or resigns prior to his Termination Date, neither he nor his heirs or assignees, shall be entitled to receive any benefits under this Plan.

 

3.5          Disability.  If an otherwise eligible Employee who has been given a Notice of Termination is absent on his Termination Date by reason of a disability, such Employee will not be entitled to benefits under this Plan, unless he waives the right to any short-term or long-term disability benefits payable after the Termination Date under any employee welfare benefit plan maintained or sponsored by the Company or another member of the Group.

 

12

 

ARTICLE IV

 

BENEFITS

 

4.1          Notice; Pay in Lieu of Notice.  A Participant shall be provided advance oral or written notification of his Termination Date through a Notice of Termination.  The Notice of Termination will provide a minimum period of two weeks’ notice.  If the Termination Date set out in the Notice of Termination occurs prior to the end of the minimum notice period, the Company shall pay the Participant in lieu of such notice an amount equal to the Two Weeks’ Compensation he would be entitled to as minimum notice less the number of full or partial Weeks’ Compensation attributable to the period of actual notice.  A Notice of Termination is deemed delivered on the earlier of (i) the date it is given orally; (ii) the date a written Notice of Termination is hand delivered, or (iii) the third day following the deposit in the U.S. mail of a written Notice of Termination.

 

4.2          Additional Benefits - With Release.  If a Participant executes a binding, irrevocable Release by the date prescribed by the Company (which shall not in any event be later than 2-1/2 months following the year in which the Termination Date occurred), he shall be entitled to the benefits described in this Section.

 

4.2.1       Severance Payment.  In addition to notice or pay in lieu of notice, a Participant shall be paid a lump sum Severance Payment on or after his Termination Date  but no later than the Payment Due Date.  The Severance Payment will be equal to the greater of the Minimum Severance Payment or the amount determined in accordance with the following formula:

 

Severance Payment = Two Weeks’ Compensation x Full Years of Service x Age Factor

 

The Age Factor is determined by the Participant’s age on his Termination Date from the following table:

 

13

 

	
Age on Termination Date
    	
 
    	
Factor
    	
 
    
	
40 through 44 years inclusive
    	
 
    	
1.10
    	
 
    
	
45 through 49 years inclusive
    	
 
    	
1.20
    	
 
    
	
50 through 54 years inclusive
    	
 
    	
1.30
    	
 
    
	
55 through 59 years inclusive
    	
 
    	
1.40
    	
 
    
	
60 years or more
    	
 
    	
1.50
    	
 
    

 

The Minimum Severance Payment is 12 Weeks’ Compensation, except that Participants in Job Class 27 or above shall have a Minimum Severance Payment of 52 Weeks’ Compensation.  With respect to any Participant with less than 6 full Years of Service, the Minimum Severance Payment will be reduced by the number of weeks of notice or pay in lieu of notice given the Participant under Section 4.1; provided that the Minimum Severance payment of 52 Week’s Compensation for Job Class 27 may not be reduced below 46 weeks’ compensation.

 

4.2.2       Outplacement.  The Company will provide outplacement services to Employees who are exempt from the Fair Labor Standards Act.  The amount and type of outplacement services provided to an exempt Employee shall be determined by the Company, consistent with the past practice of the Company; provided that in no event will outplacement services be provided to a Participant after the last day of the second taxable year following the taxable year of Separation From Service.  For the avoidance of doubt, the proviso of the preceding sentence does not create an obligation of the Company to provide outplacement services for that period of time.

 

4.2.3       Six Month Retiree Medical/COBRA Coverage Subsidy.  If a Participant executes a binding Release and timely elects COBRA Coverage, the Company shall subsidize, for six months following the month in which the Termination Date occurs, the difference between the amount normally charged to similarly situated COBRA participants and the amount charged to active employees for the same level of coverage.  If such a Participant is eligible for retiree medical and dental benefits under a group health plan maintained by

 

14

 

the Company and elects retiree medical and dental instead of COBRA Coverage, the Company will subsidize the full cost of such coverage for six (6) months following the Termination Date.

 

4.3          Maximum Severance Payment.  Notwithstanding any other provision of this Plan, the Severance Payment may not exceed a maximum of 104 Weeks’ Compensation.

 

4.4          Specified Participant Rule.  Notwithstanding any other provision of this Plan, the Excess Severance Payment due a Specified Participant shall be paid no earlier than the first day of the seventh (7th) month following the month of his Separation From Service.

 

15

 

ARTICLE V

 

PLAN ADMINISTRATION

 

5.1          Operation of the Plan.  The Administrator shall carry out the provisions of the Plan except to the extent its duties have been delegated to persons designated by resolution of the Administrator except as otherwise provided in this Plan.  The Administrator has the authority to appoint agents to carry out its fiduciary responsibilities and to remove same.  The Administrator shall establish the terms and conditions under which such agents serve, and shall evaluate their performance.

 

5.2          External Audits.  The Administrator shall arrange for external audits of Plan operations sufficient to meet requirements of law and generally accepted business practice.

 

5.3          Named Fiduciary.  The Administrator is the “named fiduciary” required by law with respect to operation of the Plan.

 

5.4          Returned Checks.  If any check payable to a Participant is returned for any reason, the payment shall revert to the general assets of the Company and the Participant shall forfeit all rights to such payment, unless a claim is filed with the Administrator no later than three (3) years after the date the check was drawn.

 

5.5          Fees and Expenses.  The Company shall pay the fees of third parties providing services to the Plan.

 

5.6          Rules for Administering the Plan.  The Administrator, in its sole discretion, may establish rules for the administration of the Plan, prescribe appropriate forms, and adopt procedures for the handling and denial of claims.  Except as specifically provided elsewhere in this Plan, the Administrator shall have the exclusive right to interpret, construe, and implement the provisions of the Plan.  The Administrator shall decide all questions concerning the Plan and its administration, including without limitation, the determination of eligibility for and the

 

16

 

amount of any benefits.  The decisions and the records of the Administrator shall be conclusive and binding upon the Participants and any other person having any interest under this Plan.

 

17

 

ARTICLE VI

 

CLAIMS

 

6.1          General.  The Administrator will notify Participants of all rights and obligations under the Plan.  For purposes of this Article, an Employee making a claim for a benefit shall be referred to as a “claimant.”  The claimant shall file the claim with and in the manner prescribed by the Administrator.  The Administrator shall make the initial determination concerning rights of the claimant and the amount of benefits, if any, payable under this Plan.  Claims submitted more than one (1) year after the Termination Date are automatically denied.

 

6.2          Denial.  If the Administrator denies the claim for benefits under the Plan in whole or in part, the Administrator will notify the claimant in writing within ninety (90) days of receipt of the claim unless the Administrator determines that special circumstances require an extension of time to process the claim.  If an extension of time for processing the claim is required (not to exceed an additional ninety (90) days beyond the initial 90-day period), the Administrator will notify the claimant in writing within the initial ninety (90) day period that extra time is needed.  The extension notice shall indicate the special circumstances requiring an extension and the date by which the Administrator expects to render its decision.  Any denial shall be written in a manner calculated to be understood by the claimant and shall state (i) the specific reason or reasons for denial; (ii) specific reference to pertinent Plan provisions on which the denial is based; (iii) a description of any additional material or information necessary for the claimant to perfect the claim; (iv) an explanation of why such material or information is necessary; and (v) the steps to be taken if the claimant wishes to submit his claim for review.

 

6.3          Appeals.  No claimant, or his duly authorized representative, whose claim is denied in whole in part may, later than sixty (60) days after receipt of the written notice of denial, (i) make written request for review by the Administrative Committee; (ii) review, free of charge, documents, records and other information relevant to the claim; (iii) submit issues and comments in writing; and/or (iv) submit written evidence or documentation supporting his claim.  The Administrative Committee shall make and notify claimant of its decision no later than sixty (60) days after receiving a claimant’s request for review and any written evidence or statements,

 

18

 

unless the Administrative Committee determines that special circumstances require additional time (not to exceed an additional sixty (60) days beyond the initial sixty (60) day period) to review the denial.  If the Administrative Committee determines that such special circumstances require an extension of time, the Administrative Committee will notify the claimant in writing within the initial sixty (60) day period.  The notice of extension shall describe the special circumstances requiring the extension of time and the date by which the Administrative Committee expects to render its decision.

 

In the case of a decision upholding the denial of the claim, the Administrative Committee shall notify the claimant in writing of its decision and shall set forth in a manner calculated to be understood by the claimant:

 

(i)                                     the specific reason or reasons for upholding the denial of the claim;

 

(ii)           reference to specific Plan provisions on which the benefit determination is based;

 

(iii)          a statement that the claimant is entitled, upon request and free of charge, reasonable access to and copies of the documents, records and other information relevant to a claim for benefits; and

 

(iv)          a statement of claimant’s rights to bring an action under Section 502(a) of ERISA.

 

19

 

ARTICLE VII

 

PLAN AMENDMENTS

 

7.1          Amending Authority.

 

7.1.1       Except as provided in subsection 7.1.2, below, the Board shall have the power to amend the Plan.

 

7.1.2       No amendment may be made to the Plan without the consent of the Board of Directors, or its equivalent, of the Shareholder the extent that such amendment:

 

(i)            Provides a subsidy for any employee welfare benefit other than a subsidy for COBRA Coverage or retiree medical and dental benefits;

 

(ii)           Extends the subsidy for COBRA Coverage beyond one hundred percent (100%) of the cost of six (6) month’s coverage;

 

(iii)          Increases the Minimum Separation Payment above 12 Weeks’ Compensation;

 

(iv)          Changes the definition of Base Compensation used to calculate the Payment formula in a manner that would increase the Severance Payment;

 

(v)           Allows the Severance Payment to exceed 104 Weeks’ Compensation; or

 

(vi)          Adds any change of control or similar provisions.

 

7.2          Plan Termination.  The Board may, in its sole discretion, determine that it is no longer feasible to maintain the Plan.  Upon such a finding, the Board may terminate the Plan.

 

20

 

ARTICLE VIII

 

GENERAL

 

8.1          Summary Plan Description.  To the extent the summary plan description or any other writing or any oral communication to an Employee conflicts with this Plan, the Plan document will control.

 

8.2          Right of Setoff.  The Company may withhold from any pay, in lieu of notice or Severance Payment when it is paid any and all amounts owed to the Company by the Participant including, without limitation, the outstanding balance on any loan to the Employee from the Company, the fair market value of Company property in the possession of the Participant, and cash advances in excess of reimbursable expenses.  If the Administrator determines that under applicable law the above amounts cannot be withheld without the consent of the Participant, no portion of the pay in lieu of notice or Severance Payment shall be due under the Plan until the Participant provides such consent.  Without limiting the foregoing, the Administrator may reduce the amount of any Separation Payment before it is paid or made available in order to satisfy a debt of the Participant to the Company or other member of the Group where such debt is incurred in the ordinary course of the service relationship between the Participant and the Company; provided that such offset does not exceed $5,000 in a given year and the reduction is made at the same time and in the same amount as the debt otherwise would have been due and collected from the Participant by the Employer.

 

8.3          Governing Law.  The terms of this Plan shall be construed and enforced to comply with ERISA, the Code and federal common law.  The provisions of the Plan are intended to control over state law under the preemptive authority of ERISA.  If any provision of this Plan shall be held illegal or invalid for any reason, such determination shall not affect the remaining provisions of this Plan.

 

8.4          Impact On Other Benefits.  Except as otherwise provided herein, any amounts paid to a Participant under this Plan shall have no effect on the Participant’s rights or benefits under any other employee benefit plan sponsored by the Group.  Further, such amounts shall not be used to

 

21

 

determine eligibility for or the amount of any benefit under any employee benefit plan, policy, or arrangement sponsored by a member of the Group.

 

8.5          Tax Withholding.  The Company shall withhold federal, state, and local taxes in such amounts as the Company, in its sole discretion, determines necessary to meet any withholding obligations under the law.

 

8.6          Section 409A.  This Plan is intended to comply with the applicable requirements of Code § 409A, as amended, and shall be limited, construed and interpreted in accordance with such intent.  If any provision of this Plan would cause a Participant to incur any additional tax or interest under Code § 409A, including any regulations or other guidance issued by the Secretary of Treasury and the Internal Revenue Service with respect thereto, the Company will use commercially reasonable efforts to reform such provision.  Notwithstanding the preceding, neither the Company nor any member of the Group will be liable to the Participant for any additional taxes, interest or penalties resulting from a failure to meet the requirements of Code § 409A.

 

22

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00185-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00185-of-00352.parquet"}]]