AGREEMENT
THIS AGREEMENT, made and entered into as of the 22 day of
September, 1997 by and between THERMADYNE HOLDINGS CORPORATION, a Delaware
corporation with its principal office located in St. Louis, Missouri (together
with its successors and assigns permitted under this Agreement, the "Company"),
and Xxxxx X. Xxxxxxx, who resides at 0000 Xxxxxxx Xxxxx, Xxxxxxxxxxxx, Xxxxxxxx
00000 (the "Executive").
WITNESSETH:
WHEREAS, the Board of Directors of the Company has determined
that it would be in the best interests of the Company to provide for certain
benefits to the Executive in the event of certain terminations of employment,
upon the terms and conditions provided in this Agreement (the "Agreement");
WHEREAS, the Company may request that the Executive be
employed by the Company or one or more of its Subsidiaries; and
WHEREAS, the Company is entering into this Agreement by and
on behalf of itself and its Subsidiaries.
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
receipt of which is mutually acknowledged, the Company and the Executive
(individually a "Party" and together the "Parties") agree as follows:
1. Definitions:
(a) "Annual Compensation" shall mean (I) plus (II), where (I)
is the greater of Base Salary in effect on September 22, 1997 or Base
Salary in effect on the date of a Change in Control and (II) is the
greater of the Executive's target bonus for the fiscal year in which
the Change in Control occurs or the average of the annual bonus (in
either case, where applicable, a Bonus) payable with respect to the
two fiscal years immediately preceding a Change in Control.
(b) "Base Salary" shall mean the Executive's annualized base
rate of pay with the Company.
(c) "Beneficiary" shall mean the person or persons named by
the Executive pursuant to Section 12 hereof or, in the event no such
person is named or survives the Executive, his estate.
(d) "Board" shall mean the Board of Directors of the Company.
(e) "Cause" shall mean:
(I) dishonesty by Executive which results in
substantial personal enrichment at the expense of the
Company; or
(II) demonstratively willful repeated violations of
Executive's obligations under this Agreement which are
intended to result in material injury to the Company.
(f) "Change in Control" shall mean any of (I) any "person",
within the meaning of Section 13(d)(3) of the Securities Exchange Act
of 1934, as amended (the "Exchange Act"), other than any employee or
Subsidiary of the Company or any employee benefit plan (or related
trust) becomes the beneficial owner (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of securities of the Company
representing 30% or more of the combined voting power of the Company's
then outstanding voting securities; (II) the Company is merged or
consolidated with another person and as a result of such merger or
consolidation less than 70% of the outstanding voting securities of
the surviving or resulting person or parent thereof shall then be
owned in the aggregate by the stockholders of the Company immediately
prior to such merger or consolidation; (III) at any time after
September 22, 1997, individuals who constituted the Board of Directors
on such date (including, for this purpose, any new director whose
election or nomination for election by the Company's stockholders was
approved by a vote of at least three-fourths of the directors in
office on such date) cease for any reason to constitute at least a
majority of the Board of Directors; (IV) the consummation of a sale of
substantially all of the assets of the Company; or (V) the Company's
adoption of a plan of liquidation. A Change in Control shall also
include any series of transactions occurring during the term of this
Agreement which result in any of the changes described above.
(g) "Confidential Information" shall mean information about
the Company or any of its Subsidiaries or their respective businesses,
products and practices, disclosed to or known or obtained by Executive
as a direct or indirect consequence of or through the Executive's
employment with the Company, which information is not generally known
in the business in which the Company or such Subsidiaries are or may
be engaged. However, Confidential Information shall not include under
any circumstances any information with respect to the foregoing
matters which is (I) available to the public from a source other than
the Executive,
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(II) released in writing by the Company to the public or to persons
who are not under a similar obligation of confidentiality to the
Company and who are not parties to this Agreement, (III) obtained by
the Company from a third party not under a similar obligation of
confidentiality to the Company, (IV) required to be disclosed by any
court process or any government or agency or department of any
government, or (V) the subject of a written waiver executed by the
Company for the benefit of the Executive.
(h) "Constructive Termination Without Cause" shall mean a
termination of the Executive's employment at his initiative as
provided in Section 2 following the occurrence, without the
Executive's prior written consent, of one or more of the following
events:
(I) any failure by the Company to comply with any of
the provisions of this Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad
faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
(II) any reduction in any form of compensation,
fringe benefit, deferred compensation plan or perquisite
applicable to the Executive immediately prior to a Change in
Control, including any reduction in salary or any reduction
in bonus to less than the average of such bonus for the two
fiscal years immediately preceding a Change in Control;
(III) the loss of any of the Executive's titles or
positions in effect at the time of a Change in Control;
(IV) any change in the position to which the
Executive reports or the positions that report to the
Executive at the time of a Change in Control (reporting
relationships);
(V) the assignment to the Executive of any duties
inconsistent in any respect with the Executive's position
(including status, offices, titles and reporting
relationships), authority, duties or responsibilities as in
effect on the date of a Change in Control, or any other
action by the Company which results in a diminution in such
position, authority, duties or responsibilities excluding an
isolated, insubstantial and inadvertent action not taken in
bad faith and which is remedied by the Company promptly after
receipt of notice thereof given by the Executive;
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(VI) the relocation of the Executive's office
location as assigned to him by the Company, to a location
more than 25 miles from his office location at the time of a
Change in Control;
(VII) any purported termination by the Company of
the Executive's employment otherwise than as expressly
permitted by this Agreement for Cause;
(VIII) any failure by the Company to comply with and
satisfy Section 7 of this Agreement, provided that the
successor contemplated by Section 7 has received, at least 10
days prior to the giving of notice of constructive
termination by the Executive, written notice from the Company
or the Executive of the requirements of Section 7 of the
Agreement.
For purposes of this Section 1(h), any good faith determination of
"Constructive Termination Without Cause" made by the Executive shall
be conclusive.
(i) "Effective Date" shall mean September 22, 1997.
(j) "Initial Term" shall mean the two-year period commencing
on the Effective Date.
(k) "Subsidiary" shall mean any corporation in which the
Company either (I) controls more than 50% of the voting power of all
securities of such corporation or (II) owns more than 50% of the total
value of all equity securities of such corporation.
(1) "Termination Benefits" shall mean;
(I) an amount equal to the product of (A) Annual
Compensation times (B) 1.7565;
(II) immediate vesting and exercisability of all of
the Executive's options to purchase securities of the Company
outstanding at the time of the Executive's termination
without Cause or Constructive Termination Without Cause,
notwithstanding any contrary provisions of such options or
any plans pursuant to which they are granted; and
(III) at Executive's election, and subject to
Executive's payment on a monthly basis of the applicable
premiums set forth on Schedule A, continued medical, dental
and life insurance coverage in
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each case for two years following the date of the Executive's
termination without Cause or Constructive Termination Without
Cause as though the Executive's employment were continued in
effect during such time and without regard to any benefit
reductions implemented after the date of such termination;
provided that Executive may elect to receive one or more of
such coverages and not the others.
If the excise tax imposed by Section 4999 of the Internal Revenue Code
of 1986, as amended (the "Code"), would otherwise be imposed with
respect to any payments in the nature of compensation made pursuant to
this Agreement or otherwise, and if a reduction of such payments would
yield a greater after-tax benefit to the Executive, then such payments
shall be reduced in the manner and order specified by the Executive in
order that the Executive receive a greater after-tax benefit by reason
of elimination of an amount of such payment sufficient to avoid the
excise tax. A final determination as to the amount of the Termination
Benefit payment set forth in subsection (I) above, the value of the
other Termination Benefits and the excise tax under Section 4999 of
the Code, as well as any reduction thereof shall be contingent upon
the express approval of the Executive, which approval shall not be
unreasonably withheld. Executive's approval shall not be treated as
unreasonably withheld if counsel of Executive's selection advises that
the proposed reduction of such payments would not clearly result in an
increase in the after-tax benefit to Executive.
(m) "Term" shall mean the term of this Agreement as
described in Section 19.
2. Events Triggering Termination Benefits: In the event, within three
years following a Change in Control occurring during the Initial Term, the
Executive's employment is terminated by the Company without Cause or there is a
Constructive Termination Without Cause, then the Executive shall be entitled to
receive the Termination Benefits. The Termination Benefit described in Section
1(l)(I) shall be paid immediately upon such termination in a cash lump sum.
The failure of the Executive to effect a Constructive Termination Without Cause
as to any one event described in Section 1(h) shall not affect his entitlement
to effect a Constructive Termination Without Cause as to any other such event.
3. No Mitigation: No Offset: In the event of a termination of
employment under Section 2 of this Agreement, the Executive shall be under no
obligation to seek other employment, and there shall be no offset against the
Termination Benefits due the Executive under this Agreement on account of any
remuneration attributable to any subsequent employment that he may obtain.
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4. Consulting After Termination of Employment: In the event of a
termination of Executive's employment under circumstances entitling Executive
to receive the Termination Benefits as described in Section 2, Executive agrees
to provide consulting services to the Company in accordance with the provisions
of this Section 4. The term of such consulting services shall be eighteen
months. For the eighteen months of consulting, the Company shall pay Executive
$6,754.72 per month, in advance. In consideration of such payments, the
Executive shall be obligated to provide up to, but not more than, seventy-five
days for the eighteen month term. Payments described in this Section 4 shall be
made to the Executive whether or not the Company calls upon Executive to render
any consulting services. The consulting services required of Executive pursuant
to this Agreement shall be with respect to those matters and in the areas of
expertise that were within the scope of Executive's employment pursuant to this
Agreement and Executive shall not be required to perform services not fairly
comprehended as within the scope of services as herein defined. Any request by
Company to Executive to render consulting services shall be upon a reasonable
advance notice and the Company shall exercise such call in good faith in order
to minimize interference with Executive's other duties, responsibilities or
endeavors. In preparation for and while performing consulting services at the
request of the Company, Executive shall be reimbursed for all reasonable
expenses incurred, promptly upon presentation of documentation thereof to the
Company; provided, however, that Company shall advance to Executive at his
request, subject to the Executive's obligation to subsequently submit the
appropriate documentation, advances to cover anticipated travel expenses,
including transportation and hotel, for travel requested by the Company. While
serving as a consultant, Executive shall be provided indemnification and
insurance with respect to his efforts substantially in accordance with that
provided under Section 5 hereof, determined as if Executive, in performing the
consulting services, had been an employee of the Company.
5. Indemnification/Insurance:
(a) The Company agrees to indemnify the Executive to the
fullest extent permitted by applicable law consistent with the
Company's Certificate of Incorporation in effect as of the Effective
Date with respect to any acts or non-acts he may have committed during
the period during which he was an officer, director and/or employee of
the Company or any Subsidiary thereof, or of any other entity of which
he served as an officer, director or employee at the request of the
Company.
(b) The Company agrees to obtain a directors' and officers'
liability insurance policy covering the Executive and to continue and
maintain such policy. The amount of coverage provided for Executive
shall be reasonable in relation to the Executive's position and
responsibilities during his employment during the Term.
(c) The obligations of the Company as set forth in parts (a)
and (b) of this Section shall survive the Executive's termination of
employment and any termination of this Agreement (whether such
termination is by the Company, by the Executive, upon the
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expiration of this Agreement or otherwise) with respect to any acts or
omissions that occurred prior to the Executive's termination of
employment or termination of this Agreement.
6. Effects of Agreement on Other Benefits and Rights of Executive:
Nothing in this Agreement shall prevent or limit the Executive's continuing or
future participation in any plan, program, policy or practice provided by the
Company or any of its affiliated companies and for which the Executive may
qualify, nor shall anything herein limit or otherwise affect such rights as the
Executive may have under any contract or agreement with the Company or any of
its affiliated companies. Amounts which are vested benefits or which the
Executive is otherwise entitled to receive under any plan, policy, practice or
program of or any contract or agreement with the Company or any of its
affiliated companies at or subsequent to any termination pursuant to Section 2
shall be payable in accordance with such plan, policy, practice or program or
contract or agreement except as explicitly modified by this Agreement.
7. Assignability: Binding Nature: This Agreement shall be binding upon
and inure to the benefit of the Parties and their respective successors, heirs
(in the case of the Executive) and assigns. No obligations of the Company under
this Agreement may be assigned or transferred by the Company except that such
obligations shall be assigned or transferred (as described below) pursuant to a
merger or consolidation in which the Company is not the continuing entity, or
the sale or liquidation of all or substantially all of the assets of the
Company, provided that the assignee or transferee is the surviving entity or
successor to all or substantially all of the assets of the Company and such
assignee or transferee assumes the liabilities, obligations and duties of the
Company, as contained in this Agreement, either contractually or as a matter of
law. The Company will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all of
the business and/or assets of the Company to assume expressly and agree to
perform this Agreement in the same manner and to the same extent Company would
be required to perform it if no such succession had taken place. As used in
this Agreement, "Company" shall mean the Company as hereinbefore defined and
any successor to its business and/or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise.
8. Representation: The Company presents and warrants that it is fully
authorized and empowered to enter into this Agreement and that the performance
of its obligations under this Agreement will not violate any agreement between
the Company and any other person or entity.
9. Entire Agreement: Except to the extent otherwise provided herein,
this Agreement contains the entire understanding and agreement between the
Parties concerning the subject matter hereof and supersedes any prior
agreement.
10. Amendment or Waiver: No provision in this Agreement may be amended
unless such amendment is agreed to in writing and signed by both the Executive
and an authorized officer of the Company. No waiver by either Party of any
breach by the other Party of any condition or provision contained in this
Agreement to be performed by such other Party shall be deemed a waiver of a
similar or dissimilar condition or provision at the same or any prior or
subsequent time. Any waiver
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must be in writing and signed by the Executive or an authorized representative
of the Company, as the case may be.
11. Severability: In the event that any provision or portion of this
Agreement shall be determined to be invalid or unenforceable for any reason, in
whole or in part, the remaining provisions of this Agreement shall be
unaffected thereby and shall remain in full force and effect to the fullest
extent permitted by law.
12. Beneficiaries/References: The Executive shall be entitled to
select (and change, to the extent permitted under any applicable law) a
beneficiary or beneficiaries to receive any compensation or benefit payable
hereunder following the Executive's death by giving the Company written notice
thereof. In the event of the Executive's death or a judicial determination of
his incompetence, reference in this Agreement to the Executive shall be deemed,
where appropriate, to refer to his beneficiary, estate or other legal
representative.
13. Governing Law/Jurisdiction: This Agreement shall be governed by
and construed and interpreted in accordance with the laws of Missouri without
reference to principles of conflict of laws.
14. Disputes
(a) All costs, fees and expenses including attorney fees, of
any arbitration or litigation in connection with this Agreement which
results in any decision or settlement requiring the Company to make a
payment to the Executive, including, without limitation, attorneys'
fees of both the Executive and the Company, shall be borne by, and be
the obligation of, the Company. In no event shall the Executive be
required to reimburse the Company for any of the costs or expenses,
including attorney's fees, incurred by the Company relating to
arbitration or litigation. The obligation of the Company under this
Section 14 shall survive the termination for any reason of this
Agreement (whether such termination is by the Company, by the
Executive, upon the expiration of this Agreement or otherwise).
(b) In the event that any person asserts that any of the
payments or benefits provided to or in respect of Executive pursuant
to this Agreement or otherwise, by or on behalf of the Company, are
subject to excise taxes under Section 4999 of the Code, the Company
shall assume the cost of dispute with such person incurred by or on
behalf of the Executive until such time as Executive agrees, which
agreement shall not be unreasonably withheld, that pursuit of that
dispute is not prudent.
(c) Pending the outcome or resolution of any litigation or
arbitration, the Company shall continue payment of all amounts due the
Executive without regard to any dispute.
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15. Notices: Any notice given to either Party shall be in writing and
shall be deemed to have been given when delivered personally or sent by
certified or registered mail, postage prepaid, return receipt requested, duly
addressed to the Party concerned at the address indicated below or to such
changed address as such Party may subsequently give such notice of:
If to the Company or the Board:
Thermadyne Holdings Corporation
000 Xxxxx Xxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
ATTENTION: Chief Financial Officer
If to the Executive:
Xxxxx X. Xxxxxxx
0000 Xxxxxxx Xxxxx
Xxxxxxxxxxxx, Xxxxxxxx 00000
16. Confidential Information:
(a) Non-Disclosure: During the Term or at any time
thereafter, irrespective of the time, manner or cause of the
expiration of the Term, Executive will not directly or indirectly
reveal, divulge, disclose or communicate to any person or entity,
other than authorized officers, directors and employees of the
Company, in any manner whatsoever, any Confidential Information
without the prior written consent of the Board.
(b) Return of Property: Upon the Executive's termination of
employment, Executive will surrender to the Company all Confidential
Information, including without limitation, all lists, charts,
schedules, reports, financial statements, books and records of the
Company or any Subsidiary, and all copies thereof, and all other
property belonging to the Company or any Subsidiary, provided
Executive shall be accorded reasonable access to such Confidential
Information subsequent to the Executive's termination of employment
for any proper purpose as determined in the reasonable judgment of the
Company.
17. Headings: The headings of the sections contained in this Agreement
are for convenience only and shall not be deemed to control or affect the
meaning or construction of any provision of this Agreement.
18. Counterparts: This Agreement may be executed in two or more
counterparts.
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19. Term of Agreement: This Agreement shall remain in effect for the
Initial Term and thereafter to the extent necessary to maintain this Agreement
in effect for a period of 36 months following any Change in Control during the
Initial Term. In addition, the respective rights and obligations of the Parties
hereunder shall survive any termination of this Agreement to the extent
necessary to the intended preservation of such rights and obligations.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date first written above.
THERMADYNE HOLDINGS CORPORATION
By /s/ XXXXX X. XXXX
--------------------------------------
Xxxxx X. Xxxx
Senior Vice President &
Chief Financial Officer
EXECUTIVE
/s/ XXXXX X. XXXXXXX
----------------------------------------
Xxxxx X. Xxxxxxx
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MONTHLY INSURANCE PREMIUM
SCHEDULE A - XXXXX X. XXXXXXX
1ST TWELVE 2ND TWELVE
MONTHS MONTHS
------ ------
Medical $536.40 $557.86
Dental 46.58 48.44
Executive Supplement 458.08 476.40
Life Insurance 51.45 53.51
