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EXHIBIT 10.17
EXECUTIVE EMPLOYMENT AGREEMENT
This Agreement is made and entered into as of May 22, 1998, (the
EFFECTIVE DATE") by and among Thermadyne Holdings Corporation, a Delaware
corporation ("HOLDINGS"), together with its subsidiaries as herein defined (all
called the "EMPLOYERS") and Xxxxxxx X. Xxxxxx ("EMPLOYEE").
WITNESSETH:
WHEREAS, Employers desire to continue to employ Employee upon the
terms set forth herein;
WHEREAS, Employee desires to continue to be employed by Employers and
to appropriately memorialize the terms and conditions of such employment;
WHEREAS, Holdings is entering into this Agreement by and on behalf of
itself and each trade or business in which its ownership and the value or voting
power is at least 50% (the "SUBSIDIARIES");
NOW THEREFORE, Employee and Employers, in consideration of the
agreements, covenants and conditions herein, hereby agree as follows:
SECTION 1. Basic Employment Provisions.
(a) Employment and Term. Employers hereby employ Employee (hereinafter
referred to as the "EMPLOYMENT") as Chairman of the Board, President and Chief
Executive Officer of Holdings and Employee agrees to be employed by Employers in
such capacities, all on the terms and conditions set forth herein. The
Employment shall be for a period (the "EMPLOYMENT PERIOD") that will (i)
commence on the Effective Date and continue for at least three years thereafter
(unless earlier terminated as provided herein) and (ii) renew on each
anniversary of the Effective Date for a three-year period, on the same terms and
conditions contained herein (unless earlier terminated as provided herein or
Employee is timely provided a notice of nonrenewal as provided herein), such
that the Employment Period shall extend for a period of three years from the
date of each such extension. The Employers must provide Employee with written
notice not less than 60 days in advance of the applicable anniversary of the
Effective Date in order to avoid renewal of the Employment Period on such
anniversary as described above. Notice shall be deemed given on the date it is
received by the Employee.
(b) Duties. Employee shall be subject to the direction and supervision
of the Board of Directors of Holdings (the "BOARD") and, as the Chief Executive
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Officer, shall have those duties and responsibilities which are assigned to him
during the Employment Period by the Board consistent with his positions,
provided that the Board shall not assign any greater duties or responsibilities
to the Employee than are necessary to the Employee's faithful and adequate
supervision of the overall management and businesses of the Employers. The Board
shall not take any action which results in a diminution of Employee's position,
authority, duties or responsibilities as of the date hereof. The parties
expressly acknowledge that the Employee shall devote all of his business time
and attention to the transaction of the Employer's businesses as is reasonably
necessary to discharge his supervisory management responsibilities hereunder.
Employee agrees to perform faithfully the duties assigned to him to the best of
his ability.
SECTION 2. Compensation.
(a) Salary. Employers shall pay to Employee during the Employment
Period a salary as basic compensation for the services to be rendered by
Employee hereunder. The initial amount of such salary shall be $538,400 per
annum. Such salary shall be reviewed no less frequently than annually by the
Board and may be increased upon the approval of the Board in its sole
discretion. Such salary shall accrue and be payable in accordance with the
payroll practices of Employers' subsidiary or subsidiaries in effect from time
to time. All such payments shall be subject to deduction and withholding
authorized or required by applicable law.
(b) Bonus. During the Employment Period, Employee shall additionally
participate in an annual bonus plan providing for an annual bonus opportunity of
not less than 100% of Employee's annual salary.
(c) Benefits. During the Employment Period, Employee shall be entitled
to participate in such other employee benefit plans, programs and arrangements
as are customarily accorded the executives of Employers, including without
limitation, tax qualified profit sharing and retirement plans, group life,
hospitalization and other insurance and vacations (but excluding stock option
and other stock- or equity-based compensation plans), on a basis no less
favorable than as of the date of this Agreement. Without limiting the foregoing,
the employee benefit plans, programs and arrangements in which Employee shall be
entitled to participate during the Employment Period shall be no less generous,
in the aggregate, than those in which such Employee was entitled to participate
immediately prior to the consummation of the merger between Holdings and Mercury
Acquisition Corporation.
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SECTION 3. Termination.
(a) Death or Disability. Employment of Employee under this Agreement
shall terminate automatically upon the death or total disability of Employee.
For the purpose of this Agreement, "TOTAL DISABILITY" shall be deemed to have
occurred if Employee shall have been unable to perform the duties of his
Employment due to mental or physical incapacity for a period of six (6)
consecutive months.
(b) Cause. The Board may terminate the Employment of Employee under
this Agreement for Cause. For the purposes of this Agreement, "CAUSE" shall be
deemed to be (i) dishonesty by Employee that results in substantial personal
enrichment at the expense of the Employers or (ii) demonstratively willful
repeated violations of Employee's obligations under this Agreement which are
intended to result in material injury to the Employers.
(c) Without Cause. Any of the Employers, acting alone, may terminate
the Employment of Employee under this Agreement without Cause.
(d) Constructive Termination. Employee may elect to terminate his
Employment under this Agreement upon a Constructive Termination Without Cause,
as defined below. For purposes of this Agreement, "CONSTRUCTIVE TERMINATION
WITHOUT CAUSE" shall mean a termination of the Employee's employment at his
initiative following the occurrence, without the Employee's prior written
consent, of one or more of the following events:
(i) receipt of notice from the Employers that the Employment
Period shall not be renewed as described in Section 1(a) above;
(ii) any failure by the Employers to comply with any of the
provisions of the Employment Agreement, other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by the Employers promptly after receipt of notice
thereof given by the Employee;
(iii) any reduction in any form of compensation, fringe
benefit, deferred compensation plan or perquisite applicable to the
Employee immediately prior to the effective time of the Employment
Agreement, including any reduction in salary or any reduction in bonus
percentage to less than the average of such bonus percentage for the
two fiscal years immediately preceding the effective time of the
Employment Agreement;
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(iv) the loss of any of the Employee's titles or positions in
effect at the effective time of the Employment Agreement;
(v) any change in the position to which the Employee reports
or the positions that report to the Employee at the effective time of
the Employment Agreement (reporting relationships);
(vi) the assignment to the Employee of any duties
inconsistent in any respect with the Employee's position (including
status, offices, titles and reporting relationships), authority,
duties or responsibilities as in effect at the effective time of the
Employment Agreement, or any other action by the Employers 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 Employers
promptly after receipt of notice thereof given by the Employee;
(vii) the relocation of the Employee's office location as
assigned to him by the Employers, to a location more than 25 miles
from his office location at the effective time of the Employment
Agreement;
(viii) any purported termination by the Employers of the
Employee's employment otherwise than as expressly permitted by Section
3(b) of this Agreement;
(ix) any failure by the Employers to comply with and satisfy
the provisions of Section 6 hereof, or failure by 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 Employers to assume expressly and agree to perform the
Employment Agreement in the same manner and to the same extent the
Employers would be required to perform it if no such succession had
taken place, provided, in either case, that the successor contemplated
by Section 6 hereof has received, at least 10 days prior to the giving
of notice of constructive termination by the Employee, written notice
from the Employers or the Employee of the requirements of the
provisions of Section 6 or of such failure;
(x) the removal or election or employment of any officer or
employee of the Employers without Employee's concurrence; and
(xi) failure to reelect Employee as both a member of the
Board and the Chairman of the Board or the removal of Employee as a
member of the Board or as Chairman of the Board.
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For purposes of this Agreement any good faith determination of "Constructive
Termination Without Cause" made by the Employee shall be conclusive.
SECTION 4. Compensation Following Termination.
(a) Death or Disability. If the Employment Period is terminated
pursuant to the provisions of Section 3(a) above, this Agreement shall
terminate, and no further compensation shall be payable to Employee except that
Employee or Employee's estate, heirs or beneficiaries, as applicable, shall be
entitled, in addition to any other benefits to which Employee is or may become
entitled under any benefit plan, to receive Employee's then current basic
compensation, plus an amount in lieu of bonus, which amount shall be determined
as the average bonus received by Employee for the appropriate period (prorated
for partial portions thereof) for the previous 24 months hereunder and all other
benefits to which Employee would otherwise be entitled hereunder during the
Employment Period for a period of 24 months from the date the Employment Period
terminates.
(b) Termination for Cause or Voluntary Termination. If the Employment
Period is terminated for Cause or voluntarily by the Employee for reasons other
than those described in Section 3(a) or 3(d) above, no further compensation or
benefits shall be paid to Employee after the date of termination, but Employee
shall be entitled to receive benefits to which he is or may become entitled
pursuant to any benefit plan.
(c) Termination Without Cause; Constructive Termination. If the
Employment Period is terminated pursuant to Section 3(c) or 3(d)above, Employee
shall be entitled to continue to receive from Employers his then current basic
compensation hereunder, plus an amount in lieu of bonus, which amount shall be
determined as the average bonus received by Employee for the appropriate period
(prorated for partial portions thereof) for the previous 24 months, such amount
to continue to be paid in accordance with the payroll practices of Employers for
a period equal to the period remaining in the Employment Period immediately
prior to such termination and Employee shall further be entitled during such
period both to continue to receive the benefits to which he would otherwise be
entitled during the Employment Period pursuant to Section above and to
reimbursement for expenses incurred by Employee to own and maintain an
automobile as contemplated by Section below. Such continuation of compensation,
benefits and automobile expenses shall continue for the period described above
notwithstanding any earlier death or reemployment of Employee.
SECTION 5. Expense Reimbursement. Upon the submission of properly
documented expense account reports, Employers shall reimburse Employee for all
reasonable business-related travel and entertainment expenses incurred by
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Employee in the course of his Employment with Employers and for expenses
incurred by Employee to own and maintain an automobile.
SECTION 6. Assignability; Binding Nature. This Agreement shall be
binding and inure to the benefit of the parties, and their respective
successors, heirs (in the case of Employee) and assigns. No obligations of the
Employers under this Agreement may be assigned or transferred by the Employers
except that such obligations shall be assigned or transferred (as described
below) pursuant to a merger or consolidation of Holdings in which Holdings is
not the continuing entity, or the sale or liquidation of all or substantially
all of the assets of the Employers, provided that the assignee or transferee is
the surviving entity or successor to all or substantially all of the assets of
the Employers and such assignee or transferee assumes the liabilities,
obligations and duties of the Employers, as contained in this Agreement, either
contractually or as a matter of law. As used in this Agreement, the "Employers"
and "Holdings" shall mean the Employers and Holdings as hereinbefore defined,
respectively, and any successor to their business and/or assets as aforesaid
which assumes and agrees to perform this Agreement by operation of law, or
otherwise.
SECTION 7. Confidential Information.
(a) Non-Disclosure. During the Employment Period or at any time
thereafter, irrespective of the time, manner or cause of the termination of this
Agreement, Employee will not directly or indirectly reveal, divulge, disclose or
communicate to any person or entity, other than authorized officers, directors
and employees of the Employers, in any manner whatsoever, any Confidential
Information (as hereinafter defined) of Employers or any subsidiary of Employers
without the prior written consent of the Board.
(b) Definition. As used herein, "CONFIDENTIAL INFORMATION" means
information disclosed to or known by Employee as a direct or indirect
consequence of or through the Employment about Employers or any subsidiary of
Employers, or their respective businesses, products and practices which
information is not generally known in the business in which Employers or any
subsidiary of Employers is 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
Employee, (ii) released in writing by Employers to the public or to persons who
are not under a similar obligation of confidentiality to Employers and who are
not parties to this Agreement, (iii) obtained by Employee from a third party not
under a similar obligation of confidentiality to Employers, (iv) required to be
disclosed by any court process or any government or agency or department
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of any government, or (v) the subject of a written waiver executed by either
Employers for the benefit of Employee.
(c) Return of Property. Upon termination of the Employment, Employee
will surrender to Employers all Confidential Information, including without
limitation, all lists, charts, schedules, reports, financial statements, books
and records of the Employers or any subsidiary of the Employers, and all copies
thereof, and all other property belonging to the Employers or any subsidiary of
the Employers, provided Employee shall be accorded reasonable access to such
Confidential Information subsequent to the Employment Period for any proper
purpose as determined in the reasonable judgment of any of the Employers.
SECTION 8. Agreement Not to Compete.
(a) Termination for Cause. In the event that the Employee is
terminated for Cause or voluntarily terminates his Employment with Employers
other than as a constructive termination, Employee hereby agrees that for a
period of one (1) year following such termination, he shall not, either in his
own behalf or as a partner, officer, director, employee, agent or shareholder
(other than as the holder of less than 5% of the outstanding capital stock of
any corporation with a class of equity security registered under Section 12(b)
or Section 12(g) of the Securities Exchange Act of 1934, as amended) engage in,
invest in or render services to any person or entity engaged in the businesses
in which Employers or any subsidiary of Employers are then engaged and situated
within any country. Nothing contained in this Section 8(a) shall be construed as
restricting the Employee's right to sell or otherwise dispose of any business or
investments owned or operated by Employee as of the date hereof.
(b) Termination Without Cause or for Disability; Constructive
Termination. In the event that the Employment of Employee is terminated by
Employers without Cause or as a result of the total disability of Employee or by
Employee as a constructive termination, Employee hereby agrees that during the
period that Employee accepts payments from the Employers pursuant to Section or
Section above, as applicable, neither he nor any affiliate shall, either in his
own behalf or as a partner, officer, director, employee, agent or shareholder
(other than as the holder of less than 5% of the outstanding capital stock of
any corporation with a class of equity security registered under Section 12(b)
or Section 12(g) of the Securities Exchange Act of 1934, as amended) engage in,
invest in or render services to any person or entity engaged in the businesses
in which Employers or any subsidiary of Employers is then engaged and situated
within any country. Nothing contained in this Section 8(b) shall be construed as
restricting the Employee's right to sell or otherwise dispose of any business or
investments owned or operated by Employee as of the date hereof. In the event of
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Employee's violation of the provisions of Section 8(b), the right of Employee to
receive any further payment pursuant to Section 4(a) or 4(c) above, as
applicable, shall immediately terminate and the Employers shall be entitled to
secure reimbursement from Employee for all payments made to Employee subsequent
to the date of any such violation. The parties hereto hereby acknowledge and
agree that the provisions of the immediately preceding sentence shall be the
sole and exclusive remedy of the Employers in respect of any violation of this
Section 8(b).
SECTION 9. Agreement Not to Solicit Employees. Employee agrees that,
for a period of three (3) years following the termination of the Employment
Period, other than by Employers without Cause or as a result of the total
disability of Employee or by Employee as a constructive termination, and only by
reason of voluntary termination or termination for Cause, neither he nor any
affiliate shall, on behalf of any business engaged in a business competitive
with Employers or any subsidiary of Employers, solicit or induce, or in any
manner attempt to solicit or induce, any person employed by, or any agent of,
either of Employers or any subsidiary of Employers to terminate his employment
or agency, as the case may be, with either of Employers or such subsidiary;
provided that such limitations shall not apply if the contact with the Employee
or consultant is initiated by a third party on a "blind basis" such as through a
head hunter.
SECTION 10. No Violation. Employee hereby represents and warrants to
Employers that the execution, delivery and performance of this Agreement by
Employee does not, with or without the giving of notice or the passage of time,
or both, conflict with, result in a default, right to accelerate or loss of
rights under any provision of any agreement or understanding to which the
Employee or, to the best knowledge of Employee, any of Employee's affiliates are
a party or by which Employee, or to the best knowledge of Employee, Employee's
affiliates may be bound or affected.
SECTION 11. Captions. The captions, headings and arrangements used in
this Agreement are for convenience only and do not in any way affect, limit or
amplify the provisions hereof.
SECTION 12. Notices. All notices required or permitted to be given
hereunder shall be in writing and shall be deemed delivered, whether or not
actually received, two days after deposited in the United States mail, postage
prepaid, registered or certified mail, return receipt requested, addressed to
the party to whom notice is being given at the specified address or at such
other address as such party may designate by notice:
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Employers: Thermadyne Holdings Corporation
c/o DLJ Merchant Banking Partners II, L.P.
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxx X. Xxxxxx
Fax: (000) 000-0000
and
Thermadyne Holdings Corporation
000 Xxxxx Xxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxx and Xxxxxxxxx X. Xxxxxxxxx
Fax: (000) 000-0000
with a copy to:
Xxxxx Xxxx & Xxxxxxxx
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxx X. Xxxxx, Xx.
Fax: (000) 000-0000
Employee: Xxxxxxx X. Xxxxxx
c/o Thermadyne Holdings Corporation
000 Xxxxx Xxxxxx Xxxx
Xx. Xxxxx, Xxxxxxxx 00000
SECTION 13. Invalid Provisions. If any provision of this Agreement is
held to be illegal, invalid or unenforceable under present or future laws, such
provisions shall be fully severable, and this Agreement shall be construed and
enforced as if such illegal, invalid or unenforceable provision had never
comprised a part of this Agreement; the remaining provisions of this Agreement
shall remain in full force and effect and shall not be affected by the illegal,
invalid or unenforceable provision or by its severance for this Agreement. In
lieu of each such illegal, invalid or unenforceable provision, there shall be
added automatically as part of this Agreement a provision as similar in terms to
such illegal, invalid or unenforceable provision as may be possible and be
legal, valid and enforceable.
SECTION 14. Amendments. This Agreement may be amended in whole or
in part only by an instrument in writing setting forth the particulars of such
amendment and duly executed by an officer of Employers and by Employee.
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SECTION 15. Waiver. No delay or omission by any party hereto to
exercise any right or power hereunder shall impair such right or power to be
construed as a waiver thereof. A waiver by any of the parties hereto of any of
the covenants to be performed by any other party or any breach thereof shall not
be construed to be a waiver of any succeeding breach thereof or of any other
covenant herein contained. Except as otherwise expressly set forth herein, all
remedies provided for in this Agreement shall be cumulative and in addition to
and not in lieu of any other remedies available to any party at law, in equity
or otherwise.
SECTION 16. Counterparts. This Agreement may be executed in multiple
counterparts, each of which shall constitute an original, and all of which
together shall constitute one and the same Agreement.
SECTION 17. Governing Law. This Agreement shall be construed and
enforced according to the laws of the State of Missouri.
SECTION 18. Payment Upon Death of Employee. In the event of the death
of Employee during the term hereof, any unpaid payments due either prior to
Employee's death or after Employee's death shall be payable as designated by
Employee in writing to Employers. In the event of the death of all such persons
so designated by Employee, either prior to the death of the Employee or during
any time when payments are due as provided herein, or in the event Employee
fails to so designate, or withdraws all such designations, said payments
thereafter shall be made to the Employee or to Employee's estate.
SECTION 19. Prior Employment Agreement. This Agreement supersedes
any and all other employment, change-in-control, severance or similar agreements
between Employee and Employers.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement as of the date first above written.
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EMPLOYERS:
THERMADYNE HOLDINGS CORPORATION
By /s/ XXXXXXXXX X. XXXXXXXXX
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Title
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EMPLOYEE:
/s/ XXXXXXX X. XXXXXX
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Xxxxxxx X. Xxxxxx
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