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Exhibit 10.3(b)
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
BETWEEN
IDEX CORPORATION
AND
XXXXX X. XXXXXX
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AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of the 1st day of January, 1998, between IDEX
CORPORATION, a Delaware corporation with its executive offices at 000 Xxxxxx
Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000 ("IDEX"), and XXXXX X. XXXXXX, 0000
Xxxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxx 00000 (the "Executive").
IDEX and the Executive entered into an Employment Agreement dated as of
August 1, 1994 and subsequently amended as of September 27, 1994 and amended
and restated in its entirety as of November 22, 1996. The parties now wish to
modify certain provisions of the Employment Agreement and to restate the
Employment Agreement in its entirety as modified. Therefore, IDEX and the
Executive agree as follows:
1. Introductory statement. The Executive has previously served as
President of Viking Pump, Inc., a business unit of IDEX Corporation, and as
Vice President-Group Executive and Senior Vice President-Operations of IDEX
Corporation ("IDEX"). IDEX desires to secure the full-time services of the
Executive as President and Chief Operating Officer effective as of January 1,
1998, until at least December 31, 2001, on the terms and conditions as provided
in this Agreement. The Executive is willing to execute this Agreement with
respect to his employment upon the terms and conditions set forth in this
Agreement.
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2. Agreement of employment. IDEX agrees to, and hereby does, employ the
Executive, and the Executive agrees to, and hereby does accept, employment by
IDEX (hereafter, the "Corporation"), as President and Chief Operating Officer
of the Corporation, subject to the provisions of the by-laws of the Corporation
in respect of the duties and responsibilities assigned from time to time by the
Chief Executive Officer of the Corporation and subject also at all times to the
control of the Board of Directors of the Corporation.
The Executive has been elected to be a member of the Board of Directors as
of January 1, 1998 for a term ending at the time of the annual meeting of
shareholders in March, 1998. Subject to election by the shareholders of the
Corporation at such annual meeting, it is contemplated that the Executive will
continue to be elected to be a member of the Board of Directors. Further,
subject to yearly election by the Board of Directors in the exercise of its
judgment, it is contemplated that the Executive will continue to be elected to
the position of President and Chief Operating Officer.
The Corporation shall not require the Executive to perform services
hereunder away from the Chicago, Illinois area of such frequency and duration
as would necessitate, in the
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reasonable judgment of the Executive, the Executive moving his residence from
the Chicago, Illinois area.
3. Executive's obligations; vacations; automobile. During the period of
his full-time service under this Agreement, the Executive shall devote
substantially all of his time and energies during business hours to the
supervision and conduct, faithfully and to the best of his ability, of the
business and affairs of the Corporation, and to the furtherance of its
interests, and shall not accept other gainful employment except with the prior
consent of the Chief Executive Officer of the Corporation. With the approval
of the Chief Executive Officer of the Corporation, however, the Executive may
become a director, trustee or other fiduciary of other corporations, trusts or
entities. The Executive may take four weeks vacation each year with pay. The
Corporation shall furnish and maintain an automobile for the use of the
Executive consistent with the policy of the Corporation in effect at any time;
provided, however, that at no time shall the policy of the Corporation be
materially less generous than that in effect as of January 1, 1998.
4. Compensation.
4(a) Annual salary. The Corporation shall pay to the Executive for his
services under this Agreement a salary at the rate of $310,000 per year
commencing as of January 1, 1998,
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payable in equal monthly installments, and continuing during the period of his
full-time service hereunder; provided, however, that the Corporation shall in
good faith review the salary of the Executive, on an annual basis, with a view
to consideration of appropriate increases in such salary. If the Executive
dies during the period of his full-time service hereunder, service for any part
of the month of his death shall be considered service for the entire month.
4(b) Bonus. The Executive shall be entitled to receive an annual cash
bonus from the Corporation calculated pursuant to the Corporation's management
incentive compensation program in effect from time to time, but in an amount
not less than would result if such bonus were calculated pursuant to the
Corporation's management incentive compensation program in effect on January 1,
1998. The Board of Directors of the Corporation, in its discretion, may award
bonuses to the Executive in addition to those provided for above, as it may
from time to time determine. The Target Incentive Amount for the Executive
with respect to any calculation of bonus shall be at least 75% of his base
salary as of the end of the fiscal period of the Corporation for which the
bonus is calculated.
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5. Period of service and benefits.
5(a) Period of full-time service. The period of full-time service of the
Executive under this Agreement shall continue to December 31, 2001, and for
successive 12 month periods thereafter; provided, however, that the Corporation
may terminate at any time the full-time service of the Executive hereunder by
delivering written notice of termination to the Executive at least three months
prior to the effective date of such termination, or the Executive may resign
and terminate his full-time service hereunder at any time (i) if the
Corporation does not retain him in the positions of President and Chief
Operating Officer or if the Executive's scope of duties hereunder is
significantly reduced, (ii) at any time within the 24-month period following an
Acquisition (as hereinafter defined), liquidation or dissolution of the
Corporation, or (iii) if the services required to be performed by the Executive
would necessitate, in the reasonable judgment of the Executive, the Executive's
moving his residence from the Chicago, Illinois area by delivering written
notice of his intention to resign to the Corporation at least three months
prior to the effective date of such resignation.
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In the event of termination of the Executive by the Corporation, the
Executive shall be entitled to receive his full annual salary and fringe
benefits in effect on the date of receipt of the notice of termination for a
continuing period of 24 months beginning with that month next following the
month during which he ceases to be actively employed. In the event of the
Executive's death, the balance of the continuing salary payments shall be made
to his wife, if surviving, or if not, to his estate in addition to any and all
other benefits payable under this Agreement upon his death.
In the event of resignation by the Executive as permitted under the first
paragraph of this Section 5(a), the Executive shall be entitled to receive his
full annual salary and fringe benefits in effect on the date of receipt of the
notice of resignation for a continuing period of 24 months beginning with that
next month following the month during which he ceases to be actively employed.
In the event of the Executive's death, in addition to any and all other
benefits payable under this Agreement upon his death, the balance of the
continuing salary payments shall be made to his wife, if surviving, or if not,
to his estate.
Except as otherwise provided in Section 5(c)(4), continuing fringe
benefits under this Section 5(a) shall be
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reduced to the extent of any fringe benefits provided by and available to the
Executive from any subsequent employer but shall not be limited by the terms of
any such fringe benefit of a subsequent employer.
In the event of termination of the Executive by the Corporation, the
Executive's death or disability, or resignation by the Executive as permitted
under the first paragraph of this Section 5(a), the Executive or his estate
shall receive a cash bonus for the entire fiscal year in which such
termination, death, or resignation occurs or disability commences. Such bonus
shall be calculated in accordance with the management incentive compensation
program of the Corporation in effect from time to time and shall in no event be
less than the full target amount for the Executive for such fiscal year. If no
policy of the Corporation then exists with regard to calculation and payment of
bonuses, the bonus shall be calculated and paid in accordance with the policy
of the Corporation in effect as of January 1, 1998.
In addition, in the event of termination of the Executive by the
Corporation, the Executive's death or disability, or the resignation by the
Executive (whether or not permitted under the first paragraph of this Section
5(a)), the Executive shall receive payment for accrued but unused vacation,
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which payment shall be equitably prorated based on the period of active
employment for that portion of the fiscal year in which the termination or
resignation becomes effective, death occurs, or disability commences, plus
payment for accrued but unused vacation for the prior fiscal year. Payment for
accrued but unused vacation shall be payable in one lump sum on the effective
date of termination or resignation, the date of death (or as soon thereafter as
practicable) or the date disability commences.
In the event of termination of the Executive by the Corporation or
resignation by the Executive as permitted under the first paragraph of this
Section 5(a) within 24 months following an "Acquisition" of the Corporation (as
hereinafter defined), the benefits to be provided to the Executive upon such
termination, regardless of the continued effectiveness of this Agreement or of
the provisions of this Section 5(a), shall be in an amount and character not
less generous than the benefits payable upon a termination of the Executive by
the Corporation as set forth in this Section 5(a).
For purposes of this Agreement, an "Acquisition" means (I) any transaction
or series of transactions which within a 12-month period constitute a change of
control where (i) at least 51 percent of the then outstanding common shares of
the Corporation are (for cash, property (including, without limitation, stock
in
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any corporation), or indebtedness, or any combination thereof), redeemed by
the Corporation or purchased by an person(s), firm(s) or entity(ies), or
exchanged for shares in any other corporation whether or not affiliated with
the Corporation, or any combination of such redemption, purchase or exchange,
or (ii) at least 51 percent of the Corporation's assets are purchased by any
person(s), firm(s) or entity(ies) whether or not affiliated with the
Corporation for cash, property (including, without limitation, stock in any
corporation) or indebtedness or any combination thereof, or (iii) the
Corporation is merged or consolidated with another corporation regardless of
whether the Corporation is the survivor, or (II) any substantial equivalent of
any such redemption, purchase, exchange, change, transaction or series of
transactions, merger or consolidation, constituting such change of control.
For purposes of this paragraph, the term "control" shall have the meaning
ascribed thereto under the Securities Exchange Act of 1934, as amended, and the
regulations thereunder. For purposes of clause (I)(ii) above or as appropriate
for purposes of clause (II) above, the Corporation shall be deemed to include
on a consolidated basis all subsidiaries and other affiliated corporations or
other entities with the same effect as if they were divisions.
The benefits provided for under this section shall be in lieu of, and not
in addition to, any and all benefits to which
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the Executive may be entitled under any bonus or severance program or policy
adopted by the Corporation from time to time unless otherwise expressly stated
therein.
5(b)(1) Death benefit. If the Executive dies during the period of his
full-time service hereunder, his wife, if surviving, or if not, his estate
shall be entitled to receive his full annual salary in effect on the date of
his death for a continuing period of 12 months commencing on the first day of
the month immediately following the date of his death.
5(b)(2) Disability benefits. In the event the Executive ceases to be
actively employed by the Corporation for any reason during any period of his
disability, he shall be entitled to receive (i) his full annual salary in
effect on the date he ceased to be employed for a continuing period of 12
months from the date he ceases to be employed by the Corporation, and (ii) the
fringe benefits provided by the Corporation under its executive disability
policy in effect on the date he ceases to be employed.
5(b)(3) Determination of disability. Any question as to the existence,
extent or potentiality of disability of the Executive upon which the Executive
and the Corporation cannot agree shall be determined by a qualified independent
physician
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selected by the Executive and reasonably acceptable to the Corporation (or, if
the Executive is unable to make such selection, it shall be made by any adult
member of his immediate family). For the purpose of this Agreement,
"disability" shall mean a disability which is, or has the potential to become,
total and permanent and because of which the Executive is or may become
physically or mentally unable to substantially perform his regular duties as
President or Chief Operating Officer of the Corporation, as the case may be.
The determination of such physician made in writing to the Corporation and to
the Executive shall be final and conclusive for all purposes of this Agreement.
In the event of his disability, the Executive shall cease to be employed on
the last day of the month in which the Executive's disability is determined by
written agreement of the Executive and the Corporation or the written
determination of a physician, as the case may be.
5(c)(1) Retirement compensation and obligations. Upon the retirement or
resignation of the Executive or upon his termination from full-time service
with the Corporation, in either case pursuant to the provisions of this Section
5 hereof, the full-time service obligations of the Executive and the
Corporation to each other under Sections 2, 3 and 4 hereof shall cease, and the
Executive shall be entitled to receive benefits and compensation as specified
in the preceding provisions of this
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Section 5.
5(c)(2) Guarantee of pension benefits. In addition to the compensation
otherwise provided herein, the Executive and his beneficiaries shall be
entitled to receive the retirement and death benefits they would receive at the
times and under such optional arrangements as the Executive is entitled to
under the terms of any defined benefit retirement or pension plan adopted and
implemented by the Corporation for its executive office employees in effect at
the date of the Executive's retirement, resignation or termination (for
whatever reason) from full-time service with the Corporation or at any time
during the Executive's service with the Corporation (any such plan is referred
to hereafter as the "Plan") (such Plan shall include a lump sum option)
pursuant to the Plan provisions as in effect at the point in time during the
Executive's employment at which the Plan would provide the greatest benefits
for the Executive and his beneficiaries and, in addition, the greatest latitude
in choice of options (including, but not limited to, a lump sum option), but in
any event computed without reference to (i) any restrictions in the Plan upon
payments to the Executive, as described in Section 1.401(a)(4)-5(b) of the
Treasury Regulations; (ii) any restrictions in the Plan upon the maximum
contributions to the Plan or upon the maximum benefits payable under the Plan,
as the case may be, pursuant to Section 415 of
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the Internal Revenue Code of 1986, as in effect at such point in time (the
"Code"); (iii) any limitations on the amount of the Executive's compensation
that may be taken into account under the Plan pursuant to Section 401(a)(17) of
the Code or any successor section; (iv) the limitations on compensation that
would exclude any income attributable to the exercise of the nonqualified stock
options granted in replacement of Equity Appreciation Rights granted under the
First Restatement of the Amended and Restated 1988 Equity Appreciation Rights
Plan or the 1989 Equity Appreciation Rights Plan (hereafter the "EAR Plans");
(v) for purposes of determining eligibility for a lump sum distribution, any
condition under the Plan considered necessary to receive a lump sum
distribution, such as the submission of medical evidence of reasonable health
of the Participant or the meeting of a specified age or service requirement (in
other words the lump sum distribution shall be an election solely in the
discretion of the Executive); or (vi) any other restriction on the Executive's
benefits as determined under the Plan pursuant to the Code, to the Employee
Retirement Income Security Act of 1974, as in effect at such point in time
("ERISA") or to any other law affecting the determination of such benefits.
However, except as specifically described otherwise in the preceding sentence,
all calculations pursuant to this Section 5(c)(2) of benefits shall be made on
the basis of the actual years of service to the Corporation, including any
Affiliated Corporation and Company as defined under
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the Plan, and actual compensation of the Executive taken into account under the
applicable Plan provisions. In calculating the Executive's compensation and
years of service to the Corporation under the Plan for purposes of benefit
accrual and to determine active employment on any date relevant for any purpose
under the Plan, compensation shall be deemed to include amounts termed
severance and service shall be deemed to include the periods for which the
Executive receives payments termed severance (based on the period over which
the severance amount would have been paid if paid as compensation over the
entire period as to which severance is calculated) even if such amount is paid
as a lump sum settlement. To the extent that the benefits to which the
Executive or his beneficiaries are entitled under this Section 5(c)(2) are not
paid from the Trust under the Plan or from the IDEX Corporation Supplemental
Executive Retirement Plan, the Corporation shall pay such benefits directly
from its general assets.
If payments are being made, pursuant to this Section 5(c)(2), in the form
of an annuity or other periodic form of distribution, and the portion of the
total amount to be paid from the Trust under the Plan shall thereafter be
reduced after the date such payments have been determined pursuant to the
preceding paragraph, by virtue of the operation of restrictions in the Plan
upon payments to the Executive, as described in
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Section 1.401(a)(4)-5(b) of the Treasury Regulations, or by virtue of the
termination of the Plan (including the operation of Section 4045 of ERISA or
any successor section) or for any other reason other than the operation of the
provisions of the optional form selected under the Plan, the Corporation shall
increase, in an amount equal to any such reduction, the amount of the benefit
under this Section 5(c)(2) which is to be paid directly from its general
assets, and such increase shall be prorated over the remaining payments or used
to recalculate the annuity payments, as the case may be.
If payments are being made or have been made in full, pursuant to this
Section 5(c)(2), but the Executive or any of his beneficiaries is required to
make a payment to the Trustee under the Plan (whether in the form of a loss of
collateral, interest on such collateral or otherwise) as the result of the
application of the restrictions in the Plan upon payments to the Executive, as
described in Section 1.401(a)(4)-5(b) of the Treasury Regulations, or by virtue
of the termination of the Plan (including the operation of Section 4045 of
ERISA or any successor section) or for any other reason, the Corporation shall
reimburse the Executive or his beneficiaries, as the case may be, directly from
its general assets, for each such payment to the Trustee, and if the Executive
or any of his beneficiaries does not receive a deduction for federal, state
and/or local income
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tax purposes for such a payment and/or if such payment would result in the
imposition of any penalty tax because of such repayment, then the amount of
such reimbursement shall be increased by an amount such that after payment by
the Executive or his beneficiaries of all taxes, including, without limitation,
any interest or penalties imposed with respect to such reimbursement, the
Executive or his beneficiaries retain an amount from the Corporation
approximately equal to the amount repaid to the Trustee.
In the event (I) the Executive requests a lump sum distribution from the
Trustee or Committee under the Plan and is denied the request, regardless of
the reason for the denial, or (II) (i) if the Plan is amended to eliminate the
lump sum distribution option on future benefit accruals or (ii) the Executive
is not otherwise entitled to a lump sum distribution under the Plan terms and,
in the case of (i) or (ii), the Executive states in writing to the Corporation
at any time prior to the Executive or his beneficiaries receiving a benefit
under the Plan that he otherwise would have requested the lump sum distribution
option, the Corporation shall pay the Executive, or his beneficiaries, as the
case may be, in cash in a single lump sum benefit, an amount equal to the
benefit hereinbefore determined less any amount received by the Executive or
his beneficiaries from the Plan directly or indirectly in a single
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payment, regardless of the form of payment in which the benefit is being paid
or is to be paid under the Plan. In the case of a benefit provided under this
paragraph, the Corporation shall pay the Executive or his beneficiaries an
additional amount in cash in a single lump sum payment such that after payment
by the Executive or his beneficiaries of all federal, state, and/or local
income taxes (including, without limitation, any interest or penalties imposed
with respect to such taxes) imposed upon such single lump sum payment, the
Executive or his beneficiaries retain an amount that would have been retained
by him or them (without regard to any limitations as described in the first
paragraph of this Section 5(c)(2)) had he or they directly rolled the amount
from the Plan into an individual retirement account. If the Executive or his
beneficiaries receive the single lump sum payment from the Corporation under
this paragraph, the Executive and his beneficiaries agree to waive and/or
return to the Corporation all benefits to him or them that he or they
subsequently receive from the Plan. Notwithstanding the preceding sentence, if
the Executive or any of his beneficiaries does not receive a deduction for
federal, state and/or local income tax purposes for such benefits and/or if
such benefits would result in the imposition of any penalty tax because of such
repayment, then the amount of such waiver and/or return to the Corporation
shall be decreased by an amount such that after payment by the Executive or his
beneficiaries of all taxes,
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including, without limitation, any interest or penalties imposed with respect
to such waiver and/or return, the Executive or his beneficiaries incur no net
expense from such benefits he or they subsequently receive from the Plan. For
purposes of this Section, beneficiaries means the beneficiaries as determined
under the Plan.
Notwithstanding the preceding provisions of this Section 5(c)(2), in
calculating the benefit provided under this Section 5(c)(2) under the terms of
any Plan, compensation shall include in any year any amount otherwise excluded
from compensation in such year as a result of an election to defer income made
pursuant to the provisions of the IDEX Corporation 1996 Deferred Compensation
Plan for Officers and shall exclude in any year any amount that would otherwise
be included in compensation in a year which relates to an amount deferred in a
prior year under the provisions of the IDEX Corporation 1996 Deferred
Compensation Plan for Officers.
Notwithstanding the preceding provisions of this Section 5(c)(2), in
calculating the benefit provided under this Section 5(c)(2) under the terms of
the Plan, the following rules shall apply:
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(a) In computing average compensation for purposes of any benefit
formula under the Plan, compensation shall not include any income
includable in the Executive's income for income tax purposes attributable
to the exercise of stock options granted in replacement for Equity
Appreciation Rights under the EAR Plans at any time.
(b) An additional benefit under this Section 5(c)(2) shall be
payable in an amount equal to the benefit accrued at the rate provided in
the Plan's career average formula applied to the income includable in the
Executive's income for income tax purposes attributable to the exercise
of stock options granted in replacement of Equity Appreciation Rights
under the EAR Plans at any time.
5(c)(3) Supplemental retirement compensation.
(i) If the Executive ceases to be actively employed by the Corporation
upon resignation, termination, death or disability on or after December 31,
2002, or is receiving continuing salary payments or disability payments on or
after December 31, 2002, pursuant to Section 5(a) or Section 5(b)(2),
respectively, the Executive shall be entitled to receive, in addition to the
other benefits and compensation specified in this Section 5 and commencing upon
completion of the continuing salary
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payments provided for in Section 5(a) and Section 5(b)(2) of up to 24 or 12
months, respectively, (and excluding any salary payments pursuant to fringe
benefit plans), supplemental retirement compensation at the annual rate of 40%
of his Adjusted Salary (as that term is defined under 5(c)(3)(v) below)
calculated as of the date he ceases to be employed by the Corporation. Such
supplemental retirement compensation shall be paid in equal monthly
installments and such payments of supplemental retirement compensation shall
continue for a period of three years from the date continuing salary payments
under Section 5(a) and Section 5(b)(2) cease. Regardless of the Executive's
death prior to or after commencement of benefits under this paragraph, the
benefits provided for in this paragraph shall be paid to him, his wife, if
surviving, or his estate, as the case may be.
(ii) If the Executive ceases to be actively employed by the Corporation
upon resignation, termination or disability other than death (unless the
election under (iii) below is in effect on the date of the Executive's death)
on or after December 31, 2002, the Executive shall also be entitled to receive,
in addition to the other benefits and compensation specified in this Section 5,
supplemental retirement compensation at the annual rate of 20% of his Adjusted
Salary. Such supplemental retirement compensation shall be paid in equal
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monthly installments commencing on the first day of the month next following
the last payment under Section 5(c)(3)(i) and shall continue for the remainder
of his life.
(iii) If the Executive's spouse is surviving on the date that the
benefits under (i) commence, the Executive hereby elects in lieu of his
benefits under (i) or (ii) above, an actuarially equivalent joint and 50%
surviving spouse annuity calculated using the actuarial assumptions under the
Plan; provided, however, that he reserves the right to revoke such election at
any time prior to the commencement of payment of the benefits under (i); said
spouse's consent shall not be required for such revocation. If such election
is effective on the date of the Executive's death, any benefit payable pursuant
to Section 5(c)(3)(i) and (ii) shall commence immediately upon the date of his
death notwithstanding any other death benefits payable under this Agreement.
(iv) Notwithstanding any provision in this Section 5(c)(3) to the
contrary, if the Executive ceases to be actively employed by the Corporation
due to resignation, termination, death or disability prior to January 1, 2003,
but on or after December 31, 2001, then payments under Section 5(c)(3)(i) or
Section 5(c)(3)(ii) shall be made in an amount adjusted so that the present
value of benefit payments at
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the date of commencement is equivalent to the present value of the benefits
payable if benefit payments commenced at the time they otherwise would have
commenced if the Executive actually ceased to be actively employed on December
31, 2002, using an interest rate and mortality factor of one-half percent
(1/2%) per month without compounding.
(v) For purposes of this Agreement, the term Adjusted Salary shall mean
the highest base salary paid to the Executive at any time during the term of
this Agreement.
5(c)(4) Medical benefits. The Executive and/or his wife, as the case may
be, shall be entitled to prompt reimbursement for all medical, dental,
hospitalization, convalescent, nursing, extended care facilities (including,
without limitation, long term care facilities such as convalescent and nursing
homes) and similar health and welfare expenses incurred by the Executive (or by
his wife in the event of the Executive's death or disability) for the Executive
or for the benefit of his wife or other dependents (hereinafter collectively
referred to as "medical benefits"). Such medical benefits shall continue at
all times while the Executive is employed by the Corporation, and thereafter
for the remainder of his life or the life of his wife, whichever shall be the
longer time. The Corporation may, in its discretion, insure such
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medical benefits; provided, however, that such benefits shall not be affected
by the existence or non-existence of any available insurance from any source,
shall not be limited by the terms of any such insurance or the failure of any
insurer to meet its obligations thereunder, shall not limit the Executive or
his wife or other dependents in the choice of any physician, medical care
facility or type of medical expenses in any way, and, except as provided in the
following sentence, shall not be affected by the availability of any medical
benefits provided by and available to the Executive from any subsequent
employer. Such medical benefits shall be reduced to the extent of any medical
benefits actually available and actually provided by any subsequent employer to
the Executive, his wife, or other dependents only until the commencement of his
60th year if he ceases to be employed by the Corporation as a result of his
resignation or retirement prior to the commencement of his 60th year. Without
limiting the foregoing, there shall be no such offset in the event of:
(a) termination for any reason after commencement of the Executive's
60th year,
(b) resignation permitted under the first paragraph of Section 5(a),
(c) involuntary termination following an Acquisition, or
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(d) the death or disability of the Executive while in the active
employment of the Corporation.
In any case such reduction in medical benefits shall be only to the extent of
any medical benefits actually provided by and actually available to the
Executive (and/or his wife or other dependents) from any subsequent employer
without cost to the Executive (and/or his wife or other dependents) or subject
to full reimbursement of any such cost by the Corporation to the Executive
(and/or his wife or other dependents), but shall not be limited by the terms of
any such insurance or reimbursement. For purposes of this Agreement, the term
"medical expenses" shall include, but not be limited to, prescription drugs,
prosthetics, optical care (including corrective lenses) and travel and lodging
associated with medical expenses, with the selection of medical providers and
institutions and related travel and lodging to be solely in the discretion of
the Executive (and/or his wife or other dependents).
5(d) Confidentiality agreement. During the course of his employment, the
Executive has had and will have access to confidential information relating to
the lines of business of the Corporation, its trade secrets, marketing
techniques, technical and cost data, information concerning customers and
suppliers, information relating to product lines, and other valuable and
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confidential information relating to the business operations of the Corporation
not generally available to the public (the "Confidential Information"). The
parties hereby acknowledge that any unauthorized disclosure or misuse of the
Confidential Information could cause irreparable damage to the Corporation.
The parties also agree that covenants by the Executive not to make unauthorized
use or disclosures of the Confidential Information are essential to the growth
and stability of the business of the Corporation. Accordingly, the Executive
agrees to the confidentiality covenants set forth in this section.
The Executive agrees that, except as required by his duties with the
Corporation or as authorized by the Corporation in writing, he will not use or
disclose to anyone at any time, regardless of whether before or after the
Executive ceases to be employed by the Corporation, any of the Confidential
Information obtained by him in the course of his employment with the
Corporation.
The Executive agrees that since irreparable damage could result from his
breach of the covenants in this Section 5(d) of this Agreement, in addition to
any and all other remedies available to the Corporation, the Corporation shall
have the remedies of a restraining order, injunction or other equitable relief
to enforce the provisions thereof. The Employee
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consents to jurisdiction in Lake County, Illinois on the date of the
commencement of any action for purposes of any claims under this Section 5(d).
In addition, the Executive agrees that the issues in any action brought under
this section will be limited to claims under this section, and all other claims
or counterclaims under other provisions of this Agreement will be excluded.
6. Compensation under this Agreement not exclusive. Except as expressly
stated to the contrary in this Agreement, the compensation and benefits payable
by the Corporation to the Executive under the provisions of this Agreement
shall be in addition to and separate and apart from such additional
compensation or incentives and such retirement, disability or other benefits as
the Executive may be entitled to under any present or future extra compensation
or bonus plan, stock option plan, share purchase agreement, pension plan,
disability insurance plan, medical insurance plan, life insurance program, or
other plan or arrangement of the Corporation established for its executives or
employees, and the provisions of this Agreement shall not affect any such
compensation, incentives or benefits. The Board of Directors of the
Corporation, in its discretion, may award the Executive such additional
compensation, incentives or benefits, pursuant to such plans or otherwise, as
it may from time to time determine.
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7. Termination of this Agreement. This Agreement shall terminate when the
Corporation has made the last payment provided for hereunder; provided,
however, that the obligations set forth under Section 5(d) of this Agreement
shall survive any such termination and shall remain in full force and effect.
Without the written consent of the Executive, the Corporation shall have no
right to terminate this Agreement prior thereto. In the event the Executive,
or his beneficiaries, as the case may be, and the Corporation shall disagree as
to their respective rights and obligations under this Agreement, and the
Executive or his beneficiaries are successful in establishing, privately or
otherwise, that his or their position is substantially correct, or that the
Corporation's position is substantially wrong or unreasonable, or in the event
that the disagreement is resolved by settlement, the Corporation shall pay all
costs and expenses, including counsel fees, which the Executive or his
beneficiaries may incur in connection therewith directly to the provider of the
services or as may otherwise be directed by the Executive or his beneficiaries.
The Corporation shall not delay or reduce the amount of any payment provided
for hereunder or setoff or counterclaim against any such amount for any reason
whatever; it is the intention of the Corporation and the Executive that the
amounts payable to the Executive or his beneficiaries hereunder shall continue
to be paid in all events in the manner and at the
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times herein provided. All payments made by the Corporation hereunder shall be
final and the Corporation shall not seek to recover all or any part of any such
payments for any reason whatsoever.
8. Additional payments by Corporation.
8(a) Notwithstanding anything in this Agreement or any other agreement to
the contrary, in the event it shall be determined that any payment or
distribution by the Corporation or any affiliate (as defined under the
Securities Act of 1933, as amended, and the regulations thereunder) thereof or
any other person to or for the benefit of the Executive, whether paid or
payable or distributed or distributable pursuant to the terms of this
Agreement, pursuant to that certain shareholder purchase and sale agreement
between Executive and the Corporation made as of January 22, 1988, as amended
and restated, pursuant to all non-qualified stock option plans of the
Corporation now or hereafter in effect, pursuant to the IDEX Corporation
Supplemental Executive Retirement Plan, pursuant to the IDEX Corporation 1996
Deferred Compensation Plan for Officers, pursuant to any other plan of deferred
compensation, or pursuant to any other agreement or arrangement with the
Corporation or any affiliate thereof now or hereafter in effect (a "Payment"),
would be subject to the excise tax imposed by Section 4999 of the Code,
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or any successor statute thereto, or any interest or penalties with respect to
such excise tax (such excise tax, together with any such interest and
penalties, are hereinafter collectively referred to as the "Excise Tax"), then
the Executive shall be entitled to receive an additional payment (a "Gross-Up
Payment") in an amount such that after payment by the Executive of all taxes
(including, without limitation, any interest or penalties imposed with respect
to such taxes and any Excise Tax) imposed upon the Gross-Up Payment, the
Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
8(b) The Executive and/or the Corporation shall notify each other in
writing as soon as practicable of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Corporation of the
Gross-Up Payment. Such notification shall state the nature of such claim and
the date on which such claim is requested to be paid. Neither the Executive
nor the Corporation shall pay such claim for taxes prior to the expiration of
the thirty-day period following the date on which the notice is given (or such
shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Executive or Corporation (hereafter the "Notifying
Party") notifies the other party in writing prior to the expiration of such
period that it desires to contest such claim, such other
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party shall take such action, in connection with contesting such claim as the
Notifying Party shall reasonably request in writing from time to time,
including, without limitation, accepting legal representation with respect to
such claim by an attorney selected by the Notifying Party and approved by the
other party, provided, however, that the Corporation shall bear and pay
directly all costs and expenses (including additional interest and penalties
and counsel fees as submitted) incurred in connection with such contest and
shall indemnity and hold the Executive harmless, on an after-tax basis, for any
Excise Tax or income tax, including interest and penalties with respect
thereto, imposed as a result of such representation and payment of costs and
expenses. Furthermore, if the Corporation is the Notifying Party, the
Corporation's control of the contest shall be limited to issues with respect to
which a Gross-Up Payment would be payable hereunder and the Executive shall be
entitled to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority.
9. Assurances on liquidation. The Corporation agrees that until the
termination of this Agreement as above provided, it will not voluntarily
liquidate or dissolve, or enter into or be a party to any other transaction the
effect of which would be to materially reduce the net assets or operations of
the Corporation, without first making a written agreement with the
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Executive or other beneficiary, satisfactory to and approved by him or such
beneficiary in writing within 30 days of receipt of a notice from the
Corporation of such proposed liquidation, dissolution or other transaction, in
fulfillment of or in lieu of its obligations to him or such beneficiary under
this Agreement or any other agreement, plan, policy or program of the
Corporation or, in the absence of such agreement, paying him or such
beneficiary in a lump sum settlement of all such obligations prior to such
proposed liquidation, dissolution or other transaction. Notwithstanding
anything in the preceding sentence to the contrary, in the event that pursuant
to the preceding sentence the Corporation is obligated to pay to the Executive
or such beneficiary in a lump sum settlement all of the obligations of the
Corporation to the Executive or such beneficiary under this Agreement or any
other agreement, plan, policy or program of the Corporation, the Executive or,
in the event of his death or inability to act, his wife or, if not surviving,
his eldest surviving child (or in the event of their inability to act, such
person who has the legal power to act on their behalf), shall have the right,
in his or her sole discretion, to elect not to receive a lump sum settlement of
the obligations of the Corporation to the Executive or other beneficiary under
Section 5(c)(4) of this Agreement and, in lieu thereof, to receive a guaranty
(including, without limitation, a letter of credit), in form and substance
satisfactory to the Executive or
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other beneficiary, as the case may be, in his or her sole discretion, of the
payment of such obligations from any entity satisfactory to the Executive or
other beneficiary, as the case may be, in his or her sole discretion. Any lump
sum settlement shall reflect a reasonable assumption of cost-of-living
adjustments, if appropriate to such obligation, and shall be determined using
the mortality assumptions of the "applicable mortality table" under Section
417(e) of the Code and either (i) the interest rate that would be used (as of
the date of payment) by the Pension Benefit Guaranty Corporation for purposes
of valuing a lump sum distribution upon a plan termination on the January 1 of
the calendar year in which the single sum is paid or (ii) the "applicable
interest rate" under Section 417(e) of the Code, determined as of the first
month of the calendar year in which the single sum is paid, whichever would
produce the greater single sum amount. For purposes of this Subsection, the
Corporation shall be deemed to include on a consolidated basis all subsidiaries
and other affiliated corporations or other entities with the same effect as if
they were divisions.
10. Definitions. For purposes of this Agreement, the term "year" shall
mean fiscal year, the term "dependents" shall have the same meaning as pursuant
to Section 152 of the Code and the term "his 60th year" shall mean immediately
following the Executive's 59th birthday. Any reference in this Agreement to
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the Code or ERISA or to related regulations shall be deemed to include any
subsequent amendments to the Code or ERISA or related regulations and to
include any successor provision of law or related regulation.
11. Amendments. This Agreement may not be amended or modified orally, and
no provision hereof may be waived, except in a writing signed by the parties
hereto, and specifically the agreement of any beneficiary, wife, dependents or
other potential or actual third party beneficiary shall not be required, except
as specifically provided for in this Agreement.
12. Assignment. This Agreement cannot be assigned by either party hereto
except with the written consent of the other.
13. Binding effect. This Agreement shall be binding upon and inure to the
benefit of the personal representatives and successors in interest of the
Executive and any successors in interest of the Corporation. In addition to
inuring to the benefit of the Executive, Sections 5(a) and 5(b) are intended to
inure to the benefit of the Executive's beneficiaries, Section 5(c)(2) is
intended to inure to the benefit of the Executive's beneficiaries, to the
extent contemplated in that provision, Section 5(c)(4) is intended to inure to
the benefit of the Executive's wife and his dependents, Sections 5(c)(3)(i) and
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(ii) is intended to insure to the benefit of the Executive's wife, to the
extent of any election under Section 5(c)(3)(iii) and Section 7, Section 8 and
Section 9 are intended to inure to the benefit of the Executive's
beneficiaries; such provisions shall be enforceable by the aforesaid
beneficiaries, wife and/or dependents, as the case may be, who upon the
Executive's death shall be deemed successors in interest.
14. Choice of law. This Agreement shall be governed by the law of the
State of Illinois (excluding the law of the State of Illinois with regard to
conflicts of law) as to all matters, including but not limited to matters of
validity, construction, effect and performance.
15. Notice. Except as otherwise provided in this Agreement, all notices
and other communications given pursuant to this Agreement shall be deemed to
have been properly given if personally delivered or mailed, addressed to the
appropriate party at the address of such party as shown at the beginning of
this Agreement, postage prepaid, by certified mail or by Federal Express or
similar overnight courier service. A copy of any notice sent pursuant to this
section shall also be sent to Xxxxxxx, Xxxx, Xxxxxxx, Xxxxx & Goodyear, 0000
Xxx X & X Xxxxx, Xxxxxxx, Xxx Xxxx 00000, Attention: Xxxxxxx X. Xxxxx, Esq.
and Xxxxxx Xxxxxxx, Esq. Any party may from time to time designate
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by written notice given in accordance with the provisions of this paragraph any
other address or party to which such notice or communication or copies thereof
shall be sent.
16. Severability of provisions. In case any one or more of the provisions
contained in this Agreement shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained herein shall not in any way be effected or impaired thereby and this
Agreement shall be interpreted as if such invalid, illegal or unenforceable
provision was not contained herein.
17. Titles. Titles are provided herein for convenience only and are not
to serve as a basis for interpretation or construction of this Agreement.
[THE REMAINDER OF THIS PAGE IS INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Corporation has caused this Agreement to be executed in its name and on its
behalf as of the date first above written.
_______________________________________________
Xxxxx X. Xxxxxx
Date of Execution: December ___, 1997
IDEX CORPORATION
By:____________________________________________
Xxxxxx X. Xxxxx, Chairman of the Board and
Chief Executive Officer
Date of Execution: December ___, 1997
The undersigned hereby executes this Amendment to evidence her agreement
to be bound by the terms of Subsection 5(c)(2) and 5(c)(3) of the Employment
Agreement.
_______________________________________________
Xxxxxxx Xxxxxx
DATE OF EXECUTION: December ___, 1997
