UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 10, 2008 ( October 10, 2008)
KMG Chemicals, Inc.
(Exact name of registrant as specified in its charter)
TEXAS |
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000-29278 |
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75-2640529 |
(State or other jurisdiction |
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(Commission |
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(IRS Employer |
of incorporation) |
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File Number) |
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Identification No.) |
9555 W. Sam Houston Pkwy S., Suite 600,
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77099 |
(Address of principal executive offices) |
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(Zip Code) |
Registrants telephone number, including area code 713-600-3800
(Former name or former address, if changed since last report.)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
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Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) |
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Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) |
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Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) |
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Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) |
Item 5.02(e) Compensatory Arrangements for Certain Officers
KMG Chemicals, Inc. (the Company) has approved an Executive Severance Plan (the Plan). The Plan provides that any regular, full-time employee of the Company, or any subsidiary thereof, who is designated in writing by the Compensation Committee of the Companys Board may become a participant in the Plan (Eligible Employee). As of the date of this report, no person has been designated in writing as an Eligible Employee under the Plan.
The Plan is an employee welfare benefit plan under Section 3.1 of the Employee Retirement Income Security Act of 1974, as amended, and supersedes any similar such plan entered into by the Company and any Eligible Employee. The Plan is designed to provide an Eligible Employee with severance benefits in the event that his or her employment is terminated by the Company.
Pursuant to the Plan, if an Eligible Employee is (i) affirmatively discharged from employment by the Company, other than a discharge for cause or poor performance, or (ii) voluntarily terminated from employment by the Company for Good Reason, as defined in the Plan, (a Qualifying Termination), such Eligible Employee will be entitled to severance benefits.
The amount of severance benefits that an Eligible Employee is permitted to receive under the terms of the Plan will be determined based on: (i) the participation level that the Eligible Employee has been assigned by the Boards Compensation Committee; (ii) whether the Eligible Employees Qualifying Termination occurred within thirty days prior to the effective date of a Change in Control, as defined in the Plan; and (iii) whether the Eligible Employees employment was terminated due to the Eligible Employees failure to substantially perform such Eligible Employees duties and responsibilities with the Company, other than any such failure resulting from incapacity due to physical or mental illness.
In order for an Eligible Employee to receive severance benefits under the Plan, he or she must execute and deliver a form to the Company releasing the Company from any and all claims against it (the Release Form). An Eligible Employee will cease to be eligible to receive severance benefits under the Plan upon the earlier of the following: (i) the Eligible Employees death or permanent disability, unless it occurs after the date the Release Form is executed; the Eligible Employees voluntary termination of employment for any reason other than Good Reason; (iii) the Eligible Employees failure to execute and deliver the Release Form by the date specified therein; or (iv) a Change of Control.
Item 9.01 Financial Statements and Exhibits
(d) |
Exhibits. |
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10.42 |
Executive Severance Plan, dated October 10, 2008, by and between the Company and its Eligible Employees. |
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
KMG Chemicals, Inc. |
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By: |
/s/ John V. Sobchak |
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Date: October 14, 2008 |
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John V. Sobchak, |
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Chief Financial Officer |
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Exhibit 10.42
KMG CHEMICALS, INC.
EXECUTIVE SEVERANCE PLAN
(EFFECTIVE AS OF OCTOBER 10, 2008)
TABLE OF CONTENTS
SECTION |
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PAGE |
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SECTION I BACKGROUND AND PURPOSE |
1 |
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SECTION II DEFINITIONS |
1 |
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2.1 |
Base Salary |
1 |
2.2 |
Cause |
2 |
2.3 |
Change of Control |
2 |
2.4 |
Company |
4 |
2.5 |
Comparable Offer of Employment |
4 |
2.6 |
Compensation Committee |
4 |
2.7 |
Eligible Employee |
4 |
2.8 |
ERISA |
5 |
2.9 |
Exchange Act |
5 |
2.10 |
Good Reason |
5 |
2.11 |
Internal Revenue Code |
5 |
2.12 |
Participation Level |
6 |
2.13 |
Plan |
6 |
2.14 |
Poor Performance |
6 |
2.15 |
Qualifying Termination |
6 |
2.16 |
Release Form |
6 |
2.17 |
Severance Benefits |
6 |
SECTION III ELIGIBILITY |
6 |
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3.1 |
Eligibility |
6 |
3.2 |
Release Form |
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3.3 |
Termination of Eligibility for Severance Benefits |
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SECTION IV SEVERANCE BENEFITS |
7 |
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4.1 |
General |
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4.2 |
Severance Benefits |
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4.3 |
Equity Compensation Benefit |
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4.4 |
Section 409A |
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4.5 |
Section 280G |
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SECTION V FUNDING |
11 |
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SECTION VI CLAIMS PROCEDURE |
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6.1 |
Filing and Initial Determination of Claim |
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6.2 |
Duty of Compensation Committee Upon Denial of Claim |
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6.3 |
Request for Review of Claim Denial |
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6.4 |
Decision on Review of Denial |
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SECTION VII ADMINISTRATION OF THE PLAN |
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7.1 |
Responsibilities |
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7.2 |
Allocation and Delegation of Compensation Committee Responsibilities |
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7.3 |
Actions of Fiduciaries |
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7.4 |
General Administrative Powers |
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7.5 |
Appointment of Professional Assistance |
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7.6 |
Discretionary Acts |
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7.7 |
Responsibility of Fiduciaries |
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7.8 |
Indemnity by Company |
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SECTION VIII AMENDMENT AND TERMINATION OF THE PLAN |
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SECTION IX VESTING |
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SECTION X STATUS OF EMPLOYMENT RELATIONS |
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SECTION XI RESTRICTIONS ON ASSIGNMENT |
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SECTION |
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PAGE |
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SECTION XII APPLICABLE LAW |
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SECTION XIII INTERPRETATION OF THE PLAN |
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KMG CHEMICALS, INC.
EXECUTIVE SEVERANCE PLAN
KMG CHEMICALS, INC. (the Company ) has adopted this severance plan, effective October 10, 2008 (the Effective Date ), in accordance with the terms and conditions contained herein.
The Plan is an employee welfare benefit plan under Section 3(1) of the Employee Retirement Income Security Act of 1974, as amended ( ERISA ). The Plan supersedes any prior severance plans, programs or policies of the Company covering Eligible Employees, both formal and informal. Any Eligible Employee who participates in this Plan shall not be entitled to any benefits under any other severance policy, plan or practice of the Company or any predecessor thereto.
Notwithstanding the foregoing, nothing in this Plan shall adversely affect the rights an individual Eligible Employee may have to severance payments under any written agreement executed by and between the Company and that Eligible Employee (a Severance Agreement ) or as required by applicable law; provided , however , that if any Eligible Employee that is a party to a Severance Agreement suffers a Qualifying Termination and is entitled to and is receiving the severance benefits intended to be provided under his or her Severance Agreement or as required by applicable law, such Eligible Employee shall not be entitled to receive severance benefits pursuant to this Plan.
The Plan is designed to provide an Eligible Employee with severance pay and benefits in the event that his or her employment is terminated by the Company.
All rights of Eligible Employees to benefits relating to this Plan shall be governed by a Severance and Release Agreement (the Release Form ), as determined and provided by the Company in connection with an Eligible Employees Qualifying Termination and the Plan.
If the terms of the Plan are inconsistent with other documents or other written or verbal communications provided by the Company or its representatives with respect to this severance program, the terms of the Plan shall govern. The Plan may not be amended or changed except in accordance with the provisions set forth below.
As used in the Plan:
For Eligible Employees who have been designated as having a Participation Level of I or II, any determination of Cause shall be made by the Companys Board of Directors. For Eligible Employees who have been designated as having a Participation Level of III, any determination of Cause shall be made by the Chief Executive Officer of the Company.
(a) any Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including in the securities beneficially owned by such Person any securities acquired directly from the Company or its Affiliates) representing 50% or more of the combined voting power of the Companys then outstanding securities, excluding (i) any Person who becomes such a Beneficial Owner in connection
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with a transaction described in clause (i) of paragraph (c) below, (ii) any Person that, as of the Effective Date of the Plan, holds more than 50% of the combined voting power of the Companys then outstanding securities; or
(b) the following individuals cease for any reason to constitute a majority of the number of directors then serving: individuals who, on the Effective Date of this Plan, constitute the Board and any new director (other than a director whose initial assumption of office is in connection with an actual or threatened election contest, including but not limited to a consent solicitation, relating to the election of directors of the Company) whose appointment or election by the Board or nomination for election by the Companys shareholders was approved or recommended by a vote of at least two-thirds (2/3) of the directors then still in office who either were directors on the Effective Date of this Plan or whose appointment, election or nomination for election was previously so approved or recommended; or
(c) there is consummated a merger or consolidation of the Company or any direct or indirect subsidiary of the Company with any other corporation, other than (i) a merger or consolidation which would result in the voting securities of the Company outstanding immediately prior to such merger or consolidation continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or any parent thereof) at least 60% of the combined voting power of the securities of the Company or such surviving entity or any parent thereof outstanding immediately after such merger or consolidation or (ii) a merger or consolidation effected to implement a recapitalization of the Company (or similar transaction) in which no Person is or becomes the Beneficial Owner, directly or indirectly, of securities of the Company (not including the securities Beneficially Owned by such Person any securities acquired directly from the Company or its Affiliates other than in connection with the acquisition by the Company or its Affiliates of a business) representing 50% or more of the combined voting power of the Companys then outstanding securities; or
(d) the shareholders of the Company approve a plan of complete liquidation or dissolution of the Company or there is consummated an agreement for the sale or disposition by the Company of all or substantially all of the Companys assets, other than a sale or disposition by the Company of all or substantially all of the Companys assets to an entity, at least 60% of the combined voting power of the voting securities of which are owned by shareholders of the Company in substantially the same proportions as their ownership of the Company immediately prior to such sale.
For purposes hereof:
Affiliate shall have the meaning set forth in Rule 12b-2 promulgated under Section 12 of the Exchange Act.
Beneficial Owner shall have the meaning set forth in Rule 13d-3 under the Exchange Act.
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Person shall have the meaning given in Section 3(a)(9) of the Exchange Act, as modified and used in Sections 13(d) and 14(d) thereof, except that such term shall not include (i) the Company or any of its subsidiaries, (ii) a trustee or other fiduciary holding securities under an employee benefit plan of the Company or any of its Affiliates, (iii) an underwriter temporarily holding securities pursuant to an offering of such securities or (iv) a corporation owned, directly or indirectly, by the shareholders of the Company in substantially the same proportions as their ownership of stock of the Company.
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Notwithstanding anything to the contrary contained herein, a Qualifying Termination for Good Reason shall occur only if (i) the Eligible Employee provides written notice to the Company of the occurrence of the event described in this Section 2.11 that constitutes Good Reason within thirty (30) days of the events initial existence, (ii) the Company fails to remedy the event within thirty (30) days of its receipt of such notice, and (iii) the Eligible Employee terminates his or her employment no later than sixty (60) days following the end of such cure period.
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Wherever appropriate, words used in the Plan in the singular may mean the plural, the plural may mean the singular, and the masculine may mean the feminine.
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Notwithstanding anything herein to the contrary, the Company shall have the right to cease all Severance Benefit payments and to recover payments previously made to the Eligible Employee should the Eligible Employee at any time breach the Eligible Employees undertakings under the terms of the Plan, the Release Form executed by the Eligible Employee to obtain the Severance Benefits under the Plan or the provisions of the Non-Disclosure, Non-Competition, and Work Product Disclosure Agreement (or other comparable agreement) executed by the Eligible Employee.
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Participation Level |
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Level Multiple |
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I |
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2.0 |
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II |
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1.5 |
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III |
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1.0 |
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Participation Level |
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Level Multiple |
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I |
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2.5 |
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II |
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2.0 |
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III |
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1.5 |
Participation Level |
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Level Multiple |
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I |
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1.0 |
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II |
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0.75 |
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III |
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0.5 |
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The provisions of this Section 4.3 shall not reduce or otherwise adversely affect any benefits that an Eligible Employee may have under the terms of any of the Companys equity compensation plans, or any individual award agreement issued to an Eligible Employee pursuant to any of such plans.
(a) delivered in full, or
(b) delivered as to such lesser extent which would result in no portion of such benefits being subject to excise tax under Code Section 4999,
whichever of the foregoing amounts, taking into account the applicable federal, state and local income taxes and the excise tax imposed by Code Section 4999, results in the receipt by the Eligible Employee on an after-tax basis, of the greater amount of benefits, notwithstanding that all or some portion of such benefits may be taxable under Code Section 4999. Any determination required under this Section 4.5 shall be made in writing by the Companys independent public accountants (the Accountants ), whose determination shall be conclusive and binding upon the Executive and the Company for all purposes. For purposes of making the calculations required by this Section 4.5, the Accountants may make reasonable assumptions and approximations concerning applicable taxes and may rely on reasonable, good faith interpretations concerning the application of Code Sections 280G and 4999. The Company and the Eligible Employee shall furnish to the Accountants such information and documents as the Accountants may reasonably request in order to make a determination under this Section. The Company shall bear all costs the Accountants may reasonably incur in connection with any calculations contemplated by this Section 4.5. In the event that Subsection (a) above applies, then the Eligible Employee shall be responsible for any excise taxes imposed with respect to such benefits. In the event that Subsection (b) above applies, then the amount payable under Section 4.2 shall be reduced to the extent necessary to avoid imposition of such excise taxes.
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Funding for this Plan shall come solely from the general assets of the Company. All payments of Severance Pay shall be paid from the general assets of the Company. Neither the Company nor the Compensation Committee shall have any obligation to establish a trust or fund for the payment of benefits under the Plan or to insure any of the benefits under the Plan. None of the officers, members of the Board of Directors, or agents of the Company or the Compensation Committee guarantees in any manner the payment of benefits hereunder.
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The Compensation Committees decision shall be written in a manner calculated to be understood by the claimant. Any notice of a denial on review shall include (i) the specific reason or reasons for the denial on review; (ii) reference to the specific plan provisions on which the denial is based; (iii) a statement that the claimant is entitled to receive, upon request and free of charge, reasonable access to, and copies of all documents, records, and other information relevant to the claimants claim for benefits; and (iv) a statement of the claimants right to bring an action under Section 502(a) of ERISA. If notice of the decision on the review is not furnished in accordance with this Section 6.4, the claim shall be deemed denied and the Compensation Committee will have no further duty to review such claim.
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(e) to determine the amount of benefits payable to an Eligible Employee, in accordance with the Plan, and to provide a full and fair review to any Eligible Employee whose claim for benefits has been denied in whole or in part; and
(f) to designate other persons to carry out any duty or power which would otherwise be a fiduciary responsibility of the Compensation Committee, under the terms of the Plan.
7.5 Appointment of Professional Assistance . The Compensation Committee may engage accountants, attorneys and such other personnel as it deems necessary or advisable. The functions of any such persons engaged by the Compensation Committee shall be limited to the specific services and duties for which they are engaged, and such persons shall have no other duties, obligations or responsibilities under the Plan. Unless otherwise specifically so delegated, such persons shall exercise no discretionary authority or discretionary control respecting the management of the Plan.
7.6 Discretionary Acts . Any discretionary actions of the Compensation Committee with respect to the administration of the Plan shall be made in a manner which does not discriminate in favor of stockholders, officers and highly compensated employees.
7.7 Responsibility of Fiduciaries . The Compensation Committee and its assistants and representatives shall be free from all liability for their acts and conduct in the administration of the Plan except for acts of gross negligence, fraud or willful misconduct; provided, however, that the foregoing shall not relieve any of them from any responsibility or liability for any responsibility, obligation or duty that they may have pursuant to ERISA.
7.8 Indemnity by Company . In the event and to the extent not insured against by any insurance company pursuant to provisions of any applicable insurance policy, the Company shall indemnify and hold harmless the Compensation Committee and its assistants and representatives from any and all claims, demands, suits or proceedings in connection with the Plan that may be brought by the Companys employees or their legal representatives, or by any other person, corporation, entity, government or agency thereof, including any amounts paid in settlement, with the approval of the Compensation Committee, and any and all other losses, damages, interest, expenses, including counsel fees approved by the Compensation Committee, and penalties, including any penalties imposed by the Secretary of Labor pursuant to Section 502(l) of ERISA relating to any breaches of fiduciary responsibility under Part 4 of Title I of ERISA, arising from any action or failure to act, except where the same is judicially determined to be due to gross negligence, fraud, or willful misconduct of such individual in connection with the Plan.
The indemnification contained in this Section shall apply regardless of whether the event causing the liability arises in whole or in part from the negligence (other than judicially determined gross negligence) or other fault on the part of the individual, specifically including breaches of fiduciary responsibility under ERISA.
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The Plan, and any part thereof, is subject to amendment, waiver, individual adjustment or termination by the Compensation Committee at any time and from time to time, for any reason; provided , however , that, without an Eligible Employees written consent, no such amendment, waiver, adjustment or termination shall decrease or otherwise adversely affect (i) the rights or entitlements under the Plan possessed by an Eligible Employee, whether prior to or after the Qualifying Termination of such Eligible Employee, or (ii) the benefits under the Plan to which an Eligible Employee is then entitled or with respect to which such Eligible Employee may become entitled upon a Qualifying Termination. If not sooner terminated, this Plan shall terminate when all liabilities provided for hereunder have been fully discharged.
Any amendment to this Plan shall be effectuated by a written instrument signed by the Compensation Committee and shall be incorporated into the Plan document. Any amendment or restatement may be made retroactive if, in the judgment of the Compensation Committee, such retroactivity is necessary or advisable for any reason. Notwithstanding the above, this Plan may not be terminated or amended within two (2) years following a Change in Control.
No Eligible Employee shall have a vested right to any benefit under this Plan prior to the time a determination is made by the Compensation Committee that the particular Eligible Employee is entitled to receive benefits under the Plan.
The adoption and maintenance of the Plan shall not be deemed to constitute a contract between any Company and its employees or to be consideration for, or an inducement or condition of, the employment of any person. Nothing herein contained shall be deemed: (i) to give to any employee the right to be retained in the employ of the Company; (ii) to affect the right of the Company to discipline or discharge any employee at any time; (iii) to give the Company the right to require any employee to remain in its employ; or (iv) to affect any employees right to terminate his employment at any time.
The benefits provided hereunder are not subject in any manner to the debts or other obligations of the persons to whom they are payable. The interest of an Eligible Employee may not be sold, transferred, assigned or encumbered in any manner, either voluntarily or involuntarily, and any attempt so to anticipate, alienate, sell, transfer, assign, pledge, encumber, or charge the same shall be null and void.
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To the extent not preempted by ERISA, the Plan shall be construed, regulated, interpreted and administered under and in accordance with the laws of the State of Texas.
It is the intention of the Company that the Plan shall comply with the Internal Revenue Code, and the regulations thereunder, the requirements of ERISA and the corresponding provisions of any subsequent laws; the provisions of the Plan shall be construed to effectuate such intention.
IN WITNESS WHEREOF, KMG Chemicals, Inc. has caused the Plan to be signed by its duly authorized officer on this 10th day of October, 2008.
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KMG CHEMICALS, INC. |
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By: |
/s/ J. Neal Butler |
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Name: |
J. Neal Butler |
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Title: |
President and CEO |
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EXHIBIT A - 1
Release Forms
SEVERANCE AND RELEASE AGREEMENT FOR EMPLOYEES 40 AND OVER
This Severance and Release Agreement ( Agreement ) is by and between ( Employee ) and KMG Chemicals, Inc. ( Employer ).
1. Termination of Employment; Unpaid Wage and Benefits . Employee acknowledges that his/her employment is terminated effective , 200 . Employee acknowledges that all wages, unused but accrued vacation pay or other paid time off owing to Employee under Employers policies, and unpaid expense reimbursements due to Employee (if any) have been paid to Employee or will be paid to Employee within six days of the date of termination. Any expense reimbursements which have not been submitted yet, should be submitted within 5 days of termination and will be paid within 10 business days after submission.
2. Severance . In exchange for Employees promises in this Agreement and pursuant to Employers Executive Severance Plan, Employer will provide the severance payment to Employee in the sum of $ (the Severance ), less applicable withholdings, the receipt and sufficiency of which is hereby acknowledged, to be paid within 5 business days after the expiration of the revocation period discussed in paragraph 4 below. Employee understands and acknowledges that the Severance from Employer stated above is only made available to him/her in exchange for his/her promises made in this Agreement and is not otherwise due to Employee under the Executive Severance Plan or otherwise. Employee understands that he/she is responsible for the payment of all taxes due because of the Severance.
3. Release of all Claims . In consideration for the Severance from Employer stated above, Employee voluntarily and knowingly waives, releases, and discharges the Employer, its parent, predecessor, successor, subsidiary, and affiliate companies, and all of their employees, officers, directors, owners, agents and assigns from all claims, liabilities, demands, and causes of action, known or unknown, fixed or contingent, which Employee may have or claim to have against any of them as a result of Employees employment and/or termination from employment and/or as a result of any other matter arising through the date of Employees signature on this Agreement. Employee agrees not to file a lawsuit to assert any such released claims and Employee agrees not to accept any monetary damages or other personal relief (including legal or equitable relief) in connection with any administrative claim or lawsuit filed by any person or entity.
This waiver, release and discharge includes, but is not limited to: (1) claims arising under federal, state, or local laws regarding employment or prohibiting employment discrimination such as, without limitation, Title VII of the Civil Rights Act of 1964, the Equal Pay Act, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the National Labor Relations Act, Section 1981 of the Civil Rights Act of 1866, the Americans with Disabilities Act, the Fair Labor Standards Act, the Family and Medical Leave Act (FMLA), Chapters 21, 61 and 451 of the Texas Labor Code, the Sarbanes Oxley Act of 2002, the Comprehensive Omnibus Budget Reconciliation act of 1985 (COBRA), and the Worker Adjustment and Retraining Notification (WARN) Act, (2) claims for breach of oral or written express or implied contract or promissory estoppel or quantum meruit, (3) claims for personal injury, harm, or other damages (whether intentional or unintentional and whether occurring on the job or not, including, without limitation, negligence, defamation, misrepresentation, fraud, intentional infliction of emotional distress, assault, battery, invasion of privacy, and other such claims), (4) claims growing out of any legal restrictions on the Employers right to terminate its employees including any claims based on
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any violation of public policy or retaliation for filing a workers compensation claim, (5) claims for workers compensation, wages or any other compensation other than any pending workers compensation benefits claim, or (6) claims for benefits including, without limitation, those arising under the Employee Retirement Income Security Act.
Nothing in this Section 3 shall be construed to restrict or prevent Employee from filing a charge or claim with the Equal Employment Opportunity Commission ( EEOC )or any other state or federal administrative agency or from participating in an investigation conducted by such administrative agency. However, Employee understands and recognizes that even if a charge is filed by Employee or on Employees behalf with an administrative agency, Employee will not be entitled to any damages relating to any event which occurred prior to Employees execution of this Agreement.
4. Release of Age Discrimination Claims . In addition, Employee acknowledges that this Agreement is written in a manner calculated to be understood by Employee and that Employee in fact understands the terms, conditions and effect of this Agreement. This Agreement refers to rights or claims arising under the Age Discrimination in Employment Act and Older Workers Benefit Protection Act. This Agreement does not impose any condition precedent, any penalty, or any other limitation adversely affecting the Employees right to file a charge or complaint, including a challenge to the validity of this Agreement, with the EEOC, or to participate in any investigation or proceeding conducted by the EEOC.
Employee further agrees and acknowledges the following:
· Employee does not waive rights or claims that may arise after the date this Agreement is executed;
· Employee waives rights or claims only in exchange for consideration in addition to anything of value to which Employee is already entitled;
· Employee is hereby advised in writing to consult with an attorney prior to executing the Agreement;
· Employee acknowledges that he/she had reasonable and sufficient time to consult with an attorney prior to executing this Agreement, and has either done so or has freely chosen not to do so;
· Employee acknowledges that Employer provided him/her with Annex I as an attachment to this Agreement;
· Annex I informs the Employee in writing in a manner calculated to be understood by the Employee, as to all employees considered for termination and offer of severance, all eligibility factors by which employees were selected for termination and offer of severance, any time limits applicable to the termination and offer of severance, the job titles and ages of all employees selected for termination and offer of severance, and the ages of all employees considered, but not selected for termination and offer of severance;
· Employee has forty-five (45) days in which to consider this Agreement and Annex I to this Agreement before accepting, but need not take that long if the Employee does not wish to (and Employee acknowledges that any decision to sign this Agreement prior to the expiration of the 45 day period was knowing and voluntary and not because of Employers fraud, misrepresentation or a threat to withdraw or alter the offer);
· this Agreement allows a period of seven (7) days following execution of the Agreement in which Employee may revoke this Agreement;
· this Agreement shall not become effective or enforceable until the seven (7) day revocation period has expired; and,
· Employee fully understands all of the terms of this waiver agreement and knowingly and voluntarily enters into this Agreement.
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Employee has been given this Agreement to consider on , 200 and any notice of acceptance or revocation should be made by Employee by hand delivery, mail, fax or email to [insert name, address, fax and email]. Nothing in Section 3 shall be construed to restrict or prevent Employee from filing a charge or complaint, including a challenge to the validity of this Agreement, with the EEOC or from participating in an investigation or proceeding conducted by the EEOC. However, Employee understands and recognizes that even if a charge is filed by Employee or on Employees behalf with an administrative agency, Employee will not be entitled to any damages relating to any event which occurred prior to Employees execution of this Agreement.
5. No Admission . Employee understands this Agreement is not and shall not be deemed or construed to be an admission by Employer of any wrongdoing of any kind or of any breach of any contract, law, obligation, policy, or procedure of any kind or nature.
6. Entire Agreement . Employee has carefully read and fully understands all of the terms of this Agreement. Employee agrees that this Agreement sets forth the entire agreement between the Employer and Employee regarding all issues except that it does not replace existing agreements (if any) regarding confidentiality, non-disclosure or non-solicitation obligations.
7. Representations; Modifications; Severability . Employee acknowledges that Employee has not relied upon any representations or statements, written or oral, not set forth in this Agreement. This Agreement cannot be modified except in writing and signed by both parties. If any part of this Agreement is found to be unenforceable by a court of competent jurisdiction, then such unenforceable portion will be severed from and shall have no effect upon the remaining portions of the Agreement.
8. Applicable Law . This Agreement shall be governed by and interpreted under the laws of the State of Texas without regard to conflict of laws. The parties agree that any dispute concerning this Agreement shall be brought only in a court of competent jurisdiction in Harris County, Houston, Texas unless applicable law requires the filing in another forum.
[Rest of Page Intentionally Left Blank]
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9. Employee and Employer . The benefits and obligations of this Agreement apply not only to the Employer and Employee, but also, respectively, to the Employers parent, predecessor, successor, subsidiary, and affiliate companies, and all of their employees, officers, directors, owners, agents and assigns, and the Employees children, spouse, family, heirs, executors, legal representatives, and/or successors or assigns and any claims they may have regarding Employees employment with Employer. Employee represents and warrants that Employee has full power, authority, and capacity to make the commitments contained in this Agreement and that Employee has not assigned or transferred all or any portion of any claim released by this Agreement.
AGREED AND ACCEPTED on this day of , 200 .
I have read, and understand, and voluntarily agree to enter into, the Agreement set forth above.
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AGREED AND ACCEPTED on this day of , 200 .
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KMG Chemicals, Inc. |
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Annex I
[Please consult your attorney about the information to be disclosed in Annex I]
This Annex I includes information relevant to the employment termination program of which your termination is a part. Annex I includes information regarding:
(a) Any class, unit, or group of individuals covered by such program, any eligibility factors for such program, and any time limits applicable to such program; and
(b) the job titles and ages of all individuals eligible or selected for the program, and the ages of all individuals in the same job classification or organizational unit who are not eligible or selected for the program.
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EXHIBIT A - 2
SEVERANCE AND RELEASE AGREEMENT FOR EMPLOYEES UNDER 40
This Severance and Release Agreement ( Agreement ) is by and between ( Employee ) and KMG Chemicals, Inc. ( Employer ).
1. Termination of Employment; Unpaid Wage and Benefits . Employee acknowledges that his/her employment is terminated effective , 200 . Employee acknowledges that all wages, unused but accrued vacation pay or other paid time off owing to Employee under Employers policies, and unpaid expense reimbursements due to Employee (if any) have been paid to Employee or will be paid to Employee within six days of the date of termination. Any expense reimbursements which have not been submitted yet, should be submitted within 5 days of termination and will be paid within 10 business days after submission.
2. Severance . In exchange for Employees promises in this Agreement and pursuant to Employers Executive Severance Plan, Employer will provide the severance payment to Employee in the sum of $ (the Severance ), less applicable withholdings, the receipt and sufficiency of which is hereby acknowledged, to be paid within 5 business days after Employee signs this Agreement. Employee understands and acknowledges that the Severance from Employer stated above is only made available to him/her in exchange for his/her promises made in this Agreement and is not otherwise due to Employee under the Executive Severance Plan or otherwise. Employee understands that he/she is responsible for the payment of all taxes due because of the Severance.
3. Release of all Claims . In consideration for the Severance from Employer stated above, Employee voluntarily and knowingly waives, releases, and discharges the Employer, its parent, predecessor, successor, subsidiary, and affiliate companies, and all of their employees, officers, directors, owners, agents and assigns from all claims, liabilities, demands, and causes of action, known or unknown, fixed or contingent, which Employee may have or claim to have against any of them as a result of Employees employment and/or termination from employment and/or as a result of any other matter arising through the date of Employees signature on this Agreement. Employee agrees not to file a lawsuit to assert any such released claims and Employee agrees not to accept any monetary damages or other personal relief (including legal or equitable relief) in connection with any administrative claim or lawsuit filed by any person or entity.
This waiver, release and discharge includes, but is not limited to: (1) claims arising under federal, state, or local laws regarding employment or prohibiting employment discrimination such as, without limitation, Title VII of the Civil Rights Act of 1964, the Equal Pay Act, the Age Discrimination in Employment Act, the Older Workers Benefit Protection Act, the National Labor Relations Act, Section 1981 of the Civil Rights Act of 1866, the Americans with Disabilities Act, the Fair Labor Standards Act, the Family and Medical Leave Act (FMLA), Chapters 21, 61 and 451 of the Texas Labor Code and, the Sarbanes Oxley Act of 2002, Comprehensive Omnibus Budget Reconciliation act of 1985 (COBRA), the Worker Adjustment and Retraining Notification (WARN) Act, (2) claims for breach of oral or written express or implied contract or promissory estoppel or quantum meruit, (3) claims for personal injury, harm, or other damages (whether intentional or unintentional and whether occurring on the job or not, including, without limitation, negligence, defamation, misrepresentation, fraud, intentional infliction of emotional distress, assault, battery, invasion of privacy, and other such claims), (4) claims growing out of any legal restrictions on the Employers right to terminate its employees including any claims based on any violation of public policy or retaliation for filing a workers compensation claim, (5) claims for workers compensation, wages or any other compensation other than any pending workers compensation
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benefits claim, or (6) claims for benefits including, without limitation, those arising under the Employee Retirement Income Security Act.
Nothing in this Section 3 shall be construed to restrict or prevent Employee from filing a charge or claim with the Equal Employment Opportunity Commission or any other state or federal administrative agency or from participating in an investigation conducted by such administrative agency. However, Employee understands and recognizes that even if a charge is filed by Employee or on Employees behalf with an administrative agency, Employee will not be entitled to any damages relating to any event which occurred prior to Employees execution of this Agreement.
4. No Admission . Employee understands this Agreement is not and shall not be deemed or construed to be an admission by Employer of any wrongdoing of any kind or of any breach of any contract, law, obligation, policy, or procedure of any kind or nature.
5. Entire Agreement . Employee has carefully read and fully understands all of the terms of this Agreement. Employee agrees that this Agreement sets forth the entire agreement between the Employer and Employee regarding all issues except that it does not replace existing agreements (if any) regarding confidentiality, non-disclosure or non-solicitation obligations.
6. Representations; Modifications; Severability . Employee acknowledges that Employee has not relied upon any representations or statements, written or oral, not set forth in this Agreement. This Agreement cannot be modified except in writing and signed by both parties. If any part of this Agreement is found to be unenforceable by a court of competent jurisdiction, then such unenforceable portion will be severed from and shall have no effect upon the remaining portions of the Agreement.
7. Applicable Law . This Agreement shall be governed by and interpreted under the laws of the State of Texas without regard to Conflict of Laws. The parties agree that any dispute concerning this Agreement shall be brought only in a court of competent jurisdiction in Harris County, Houston, Texas unless applicable law requires the filing in another forum.
8. Employee and Employer . The benefits and obligations of this Agreement apply not only to the Employer and Employee, but also, respectively, to the Employers parent, predecessor, successor, subsidiary, and affiliate companies, and all of their employees, officers, directors, owners, agents and assigns, and the Employees children, spouse, family, heirs, executors, legal representatives, and/or successors or assigns and any claims they may have regarding Employees employment with Employer. Employee represents and warrants that Employee has full power, authority, and capacity to make the commitments contained in this Agreement and that Employee has not assigned or transferred all or any portion of any claim released by this Agreement.
AGREED AND ACCEPTED on this day of , 200 .
I have read, and understand, and voluntarily agree to enter into, the Agreement set forth above.
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Employee Signature & Printed Name |
AGREED AND ACCEPTED on this day of , 200 .
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KMG Chemicals, Inc. |
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