1
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
between
IDEX CORPORATION
and
XXXXX X. XXXXXX
2
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of the ____ day of December, 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, amended and
restated in its entirety as of November 22, 1996, further amended and restated
in its entirety as of January 1, 1998, and further amended as of January 1,
1998. 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, if the Executive is not serving as
Chief Executive Officer, 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. Subject to election by the shareholders of the Corporation
at annual meetings, it is contemplated that the Executive will continue to be
elected to be a member of the Board of Directors. Further, subject to 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 and will be elected to the position of Chief Executive
Officer as of April 1, 1999.
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 reasonable judgment of the Executive, the
Executive moving his residence from the Chicago, Illinois area.
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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 or, if the Executive
is serving as Chief Executive Officer, prior consent of the Board of Directors
of the Corporation. With the approval of the Chief Executive Officer of the
Corporation, or, if the Executive is serving as Chief Executive Officer, prior
consent of the Board of Directors of the Corporation, the Executive may become
a director, trustee or other fiduciary of other corporations, trusts or
entities. The Executive may take five 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 $330,000 per year
commencing as of January 1, 1999, payable in equal monthly installments, and
continuing during the period of his full-time service hereunder. If the
Executive shall be elected to serve as Chief Executive Officer, his salary
shall be at the rate of $440,000 per year commencing as of April 1, 1999. The
Corporation shall in good faith review the salary of the Executive, on an
annual basis,
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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 (the "MICP") 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. Notwithstanding the foregoing sentence, if the Executive
shall be elected to serve as Chief Executive Officer, the Target Incentive
Amount for the Executive for the period January 1, 1999 through March 31, 1999
shall be 75% of his base salary and the Target Incentive Amount shall be 80% of
his base salary for the period from April 1, 1999 to the end of the 1999 fiscal
period of the Corporation and for subsequent fiscal periods of the Corporation.
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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, Chief Operating
Officer and, if elected to serve as Chief Executive Officer, Chief Executive
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.
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
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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 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
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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, 1999.
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,
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
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not less generous than the benefits payable upon a termination of the Executive
by the Corporation as set forth in this Section 5(a). Further, upon such a
termination, in determining the bonus to be paid to the Executive under this
Section 5(a), he shall receive (i) a full year's bonus under the MICP at the
Target Incentive Amount in effect on the date of termination, or, if greater,
at the time of the Acquisition plus (ii) a proportionate bonus under the MICP
determined by multiplying the amount determined under (i) by a fraction, the
numerator of which is the number of whole calendar months in the calendar year
preceding the date of termination, and the denominator of which is 12.
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 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,
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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 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 18 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 18
months from the date he ceases to be employed by the Corporation,
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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 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
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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 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 the Internal Revenue Code of
1986, as in effect at such point in time (the "Code"); (iii) any limitations on
the amount of the
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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 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 (including, without limitation, amounts paid
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pursuant to Section 5(a)) and service shall be deemed to include the periods
for which the Executive receives such 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 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.
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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 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
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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 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
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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,
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 payments provided for in
Section 5(a) and Section 5(b)(2) of up to 24 or 18 months, respectively, (and
excluding any salary payments
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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, 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 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
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.
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(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 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.
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(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 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
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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
(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).
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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
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
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order, injunction or other equitable relief to enforce the provisions thereof.
The Employee 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.
5(e). Cost of living adjustments. All payments under Sections 5(c)(3)(i)
and (ii) hereof shall be appropriately increased at such time as the
Corporation shall first become obligated to make such payments, and at the
beginning of each year thereafter, in proportion to the amount, if any, by
which the Consumer Price Index (the "CPI") for the then most recently reported
month exceeds the CPI as of the month and year of the date the Executive ceased
to be employed. The CPI to be used hereunder shall be the CPI for All Urban
Consumers (CPI-U) (All Cities, All Items, 1982-84 = 100), published by the
Bureau of Labor Statistics of the United States Department of Labor. In the
event of any substantial change in the composition of the CPI to be used
hereunder or in the event of discontinuance or termination of such index, the
most appropriate available price index shall be substituted and utilized
hereunder.
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,
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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.
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
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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 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
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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, 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 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
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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 indemnify 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 Rights in event of change of control or liquidation.
9(a) Rights in event of change in management or control. In the event of
an Acquisition, the Executive, regardless of whether still employed by the
Corporation, 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 option, upon receipt of prior written notice of
the Acquisition from the Corporation, which such notice the Corporation is
hereby required to provide, prior to the Acquisition to elect to receive on the
consummation of the Acquisition, or for a period of 24 months after the
Acquisition to elect to receive on the date designated by the Executive, or
other beneficiary as the case may be, in either case within such 24-month
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period, a lump sum settlement of any one or more of the economic obligations of
the Corporation to the Executive or other beneficiary under this Agreement or
any other agreement, plan, policy or program of the Corporation.
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 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, in his or
her sole discretion. In addition, if the Executive or other beneficiary elects
to receive a lump sum settlement, such election may be withdrawn by the
Executive or other beneficiary with respect to any one or more of such
obligations at any time prior to receipt of payment by the Executive or other
beneficiary from the Corporation. Any lump sum payment shall be actuarially
computed by the Corporation in good faith on an equitable basis based on the
prevailing economic circumstances at the time of such election and shall
include an assumption
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regarding future cost of living increases based upon the average of the
monthly CPI for the five (5) calendar years immediately preceding the date of
election. Any lump sum pension guarantee under Section 5(c)(2) 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.
9(b) 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 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
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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 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
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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
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.
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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
(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
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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 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 ___, 1998
IDEX CORPORATION
By:
-------------------------------------
Xxxxxx X. Xxxxx, Chairman of the Board and
Chief Executive Officer
Date of Execution: December ___, 1998
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 ___, 1998
