KEY EMPLOYEE SEVERANCE PAY AGREEMENT
Exhibit
(10)(am)
SECOND AMENDED AND RESTATED
This
Second Amended and Restated Key Employee
Severance Pay Agreement (this “Agreement”) is made as of this 3rd day
of December, 2008 between MET-PRO
CORPORATION, a Pennsylvania corporation with principal offices 000 Xxxxxxx Xxxx,
Xxxxxxxxxxxx, Xxxxxxxxxxxx (the “Corporation”), and XXXX X. XXXXXX, of 000 Xxxxx
Xxxx, Xxxxxxxxxxxx, XX 00000 (the “Employee”).
RECITALS
A. Employee has
been employed by the Corporation since March 15, 1980. In
October 1997, he was appointed to the position of Vice President-Finance and
Secretary. In June 2006, he was appointed to the position of Senior
Vice-President-Finance and Secretary. During the period of his employment, he
has performed his duties ably, demonstrating loyalty to the Corporation and
greatly benefiting it.
B. In
recognition of Employee’s status as a key employee and to provide the Employee
with a deserved measure of security in the event of a change in control of the
Corporation, the Corporation entered into a Key Employee Severance Pay Agreement
on July 6, 1999 which was replaced in its entirety
by an Amended and Restated Key Employee Severance Pay Agreement on April 4,
2008 (the “Prior
Agreement”).
C. The Corporation and Employee desire to amend and
restate the Prior Agreement to comply with Section
409A of the Internal Revenue Code of 1986, as amended, and to replace the
Prior Agreement in its entirety with this
Agreement.
NOW,
THEREFORE, the parties hereto hereby agree as follows:
1. Definitions.
(a) Change in
Control. A “Change in Control” shall be deemed to have
occurred as of the date of the first of the following events
occur:
(i) If any
“Person” (as hereafter defined) or “Group” (as hereafter defined) of Persons,
which Person or Group of Persons is not part of present “Management” (as
hereafter defined), acting alone or in concert, becomes the “Beneficial
Owner” (as hereafter defined) directly or indirectly of
securities of the Corporation representing thirty (30%) percent or more of the
combined voting power of the Corporation’s then outstanding securities;
or,
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(ii) If there
occurs a change in the composition of the Board of Directors within any period
of two years or less, as a result of which the individuals who constitute the
“Continuing Directors” (as hereafter defined) cease for any reason to constitute
at least a majority of the Board of Directors in office at the beginning of such
period; or
(iii) If the
shareholders approve of: (a) a reorganization, merger, or consolidation, in each
case with respect to which persons who were shareholders of the Corporation
immediately prior to such transaction do not, immediately thereafter, own more
than 50% of the combined voting power of the reorganized, merged or consolidated
corporation’s then outstanding securities entitled to vote generally in the
election of directors; or (b) the liquidation or dissolution of the
Corporation; or (c) the sale of all or substantially all of the Corporation’s
assets; or
(iv) If there
shall be a change of control as defined by any other agreement or plan to which
the Corporation is party.
(b) Person. A
“Person” is defined in same manner that the term “person” is defined
and referred to in Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the “Act”)).
(c) Continuing
Directors. The “Continuing Directors” consist of the seven persons
who are members of the Board of Directors as constituted as of the date of this
Agreement; provided, however, that any individual who becomes a Director
subsequent to the date hereof whose election or nomination for election by the
Corporation’s shareholders was approved by a vote of at
least a majority of the Directors then comprising the Board of Directors of the
Corporation shall be considered a Continuing Director; except that any
individual whose initial election or appointment as a Director as a result of or
in connection with either an actual or threatened election contest (as such
terms are used in Rule 14a-11 of Regulation 14A promulgated under the Act) or
other actual or threatened solicitation of proxies or consents by or on behalf
of a person other than the Board shall not be considered a Continuing
Director.
(d) Beneficial Owner of
Securities. A “Beneficial Owner of Securities” shall be as
defined in Rule 13d-3 promulgated under the Act.
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(e) Management. “Management”
shall mean the officers of the Corporation in office at the effective date of
this Agreement or their successors elected by a majority of the Continuing
Directors, either alone or with any person who is a Continuing
Director.
(f) Compensation. “Compensation”
shall mean the annual base salary (exclusive of bonuses, sick leave, vacation
pay, or other extra compensation or benefits) being paid to the Employee at the
time when a Change in Control occurs or thereafter, whichever is
higher.
(g) Involuntary Termination of
Employment. “Involuntary Termination of Employment” shall
mean
(i) Termination
of employment without “Cause”; or
(ii) Termination of employment by the Employee for “Good
Reason”; provided, however, that a termination of employment by
Employee for Good Reason shall not constitute an Involuntary Termination of
Employment unless: (x) Employee first notifies the Corporation (for purposes of
this subsection “Corporation” shall include any successor to the Corporation) in
writing of the existence of an event constituting Good Reason within ninety (90)
days of the initial existence of such event; (y) the Corporation fails to remedy
the event constituting Good Reason within thirty (30) days of such notice; and
(z) Employee’s termination of employment occurs no later than one (1)
year following the initial existence of the event constituting Good
Reason and not later than eighteen (18)
months following the date of a Change in Control.
(h) Cause. “Cause”
for the purposes of Section 1(g)(i) shall mean conviction for a felony,
commission of any act constituting common law fraud, habitual drunkenness or
drug abuse, significant malfeasance or nonfeasance of duty, or disloyalty to the
Corporation.
(i) Group. “Group”
shall be as used in Rule 13d-1 promulgated under the Act.
(j) Good Reason. “Good Reason” shall mean one or more of the
following events: (i) a material diminution in Employee’s base compensation;
(ii) a material diminution in Employee’s authority, duties, or
responsibilities; (iii) a material
diminution in the budget over which Employee retains authority; or (iv) a
material change in the geographic location at which Employee is required to
perform services.
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2. Severance
Pay. In the event of a Change in Control of the Corporation
and the Involuntary Termination of Employee’s Employment within eighteen (18)
months thereafter, the Employee shall be entitled to receive severance pay equal
to eighteen (18) months’ Compensation. Such severance pay shall be
due and payable in full at the time of Employee’s receipt of final payment of
his regular compensation.
3. Continued Performance by
Employee. In consideration of the granting of the benefits to
him provided for by this Agreement, Employee agrees:
(a) That he will
continue to use his best efforts to perform his duties as assigned by the
Corporation; and
(b) That, in the
event a Change in Control is pending or threatened, he will not voluntarily
terminate his employment by the Corporation prior to an actual Change in
Control, but will continue to perform his duties in the same manner and with the
same effort as he had employed prior to the occurrence of such
events.
4. Rights to Terminate
Employment. This Agreement is not an employment
agreement. Nothing contained herein shall be deemed to preclude the
present management of the Corporation or the Employee from terminating
Employee’s employment, with or without cause, at any time.
5. No Obligation to Maintain
Reserves. Nothing in this Agreement shall obligate the
Corporation to set aside or earmark any of its assets to fund the obligation
hereunder.
6. Binding
Effect. This Agreement shall be binding upon and inure to the
benefit of the parties hereto, their heirs, executors, administrators,
successors and assigns.
7. Applicable
Law. This Agreement shall be interpreted under and governed by
the laws of the State of Pennsylvania without giving effect to its conflict of
laws provisions.
IN
WITNESS WHEREOF, the parties have executed this Agreement as of the date first
above written.
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MET-PRO
CORPORATION
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/s/
Xxxx X.
Xxxxxx
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By:
/s/ Xxxxxxx X. Xx
Xxxx
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Xxxx
X. Xxxxxx, Employee
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Xxxxxxx
X. Xx Xxxx, President
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