EXHIBIT 10.2
September 30, 1998
Xx. Xxxxxxx X. Xxxxxxxx
Binks Xxxxx Corporation
0000 Xxxxxxx Xxxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Dear Xxxx:
Following up on our recent discussions, this will confirm our
understanding and agreement relative to your employment with Binks Xxxxx
Corporation (the "Company"), under the following terms and conditions:
1. NATURE OF EMPLOYMENT. You will remain employed by The Company to
act in the capacities and with the titles of Vice President of Finance, Chief
Financial Officer and Treasurer of the Company.
2. TERM OF AGREEMENT. The initial term of this agreement will begin
on the date of the closing of the transactions contemplated under that
certain Agreement of Purchase and Sale of Assets and Stock, dated August 31,
1998, between the Company and Illinois Tool Works Inc. (the "ITW
Transaction"), and will, subject to prior termination in accordance with
paragraph 5 below, continue through and including March 31, 1999. Commencing
December 31,1998, if on or before the date that is 90 days prior to the last
day of the term of this agreement, the Company has not delivered to you a
written notice that the term of this agreement will not be extended, the term
of this agreement will be automatically extended each day thereafter by one
day, until a date which is 90 days after the Company delivers such a notice
to you. Upon termination of your employment, the Company will pay to you all
salary, benefits and other compensation described below accrued through the
effective date of termination, in addition to the items described in
paragraph 5 below.
3. COMPENSATION.
(a) As compensation for your services hereunder, the Company will
pay you a base salary of $10,833 per month during the term of this agreement,
payable in accordance with the standard payroll practices of the Company in
effect from time to time. The amount of your base salary may be increased
from time to time by the Company in accordance with its policies and
practices applicable to your peer executives.
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Binks Xxxxx Corporation
September 30, 1998
Page 2
(b) In addition to the foregoing base salary, the Company will pay
you certain stay bonuses at such times and in the amounts set forth in the
Payment Schedule attached hereto as EXHIBIT A.
4. BENEFIT PROGRAMS. Throughout the period of your employment hereunder,
in addition to the compensation and other benefits specified above, you will
continue to be eligible to participate in any employee benefit plan, pension
plan, incentive plan, group life, health or accident insurance, or other such
plan or policy which may presently be in effect or which may hereafter be
adopted by the Company for the benefit of all of its employees or your peer
executives, except stock option plans. With respect to any partial year of
employment hereunder, your benefits will be appropriately prorated to the
extent permitted under each subject plan or policy. Notwithstanding the
foregoing, you will be eligible to participate in the Company's current group
health plan through June 30, 1999 at the current employee contribution rates,
or, if later, until the end of the third calendar month that commences after
your termination of employment at the employee contribution rates in effect
on the date of your termination of employment. Such group health plan
coverage will continue for a period of six months following the end of the
third calendar month that commences following your termination of employment,
unless you obtain group coverage from a new employer, and the COBRA
continuation period will begin no earlier than the tenth month following the
month in which you have a termination of employment.
5. TERMINATION OF EMPLOYMENT.
(a) Anything contained in paragraph 2 above to the contrary
notwithstanding, the Company will at all times have the right to terminate
your employment for good cause, effective upon written notice to you. For
purposes of this paragraph 5(a), good cause for termination shall be deemed
to exist in the event (i) of your willful failure to perform your duties,
(ii) your conviction of a criminal violation excluding traffic offenses and
misdemeanors not involving dishonesty, fraud or breach of trust, or (iii)
your willful engagement in gross misconduct in the performance of your duties
that materially injures the Company. In the event the Company terminates
your employment pursuant to this paragraph 5(a), the Company will be
obligated to make payment to you of the base salary and stay bonus described
in paragraph 3 above, and the benefits described in paragraph 4 above through
the effective date of termination, as well as provide the benefits required
by applicable law.
(b) Anything contained in paragraph 2 above to the contrary
notwithstanding, you will at all times have the right to terminate your
employment for good reason, effective upon written notice to the Company.
For purposes of this paragraph 5(b), good reason for termination shall be
deemed to exist if, without your written consent (i) you are assigned to new
duties involving a
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Binks Xxxxx Corporation
September 30, 1998
Page 3
material amount of your time that are not of an executive or supervisory
nature or do not involve the level of responsibility generally comparable to
responsibilities of your duties prior to the Closing Date, (ii) your duties
and responsibilities are substantially reduced from those of your present
position, excluding reductions that are a normal consequence of the Company
ceasing to be publicly owned, (iii) there occurs any material reduction in
your aggregate compensation, incentive and benefit package in effect on the
Closing Date, excluding (in the case of an incentive or benefit package
whose benefits are proportionate to the performance of you or the Company)
reductions in benefits resulting from diminished performance of the Company
or you; or (iv) you are an officer of the Company as of the Closing Date and
thereafter the Company shall require you to perform services outside of a
fifty-mile radius of the Company's offices at which your are currently based
except for travel on the Company's business that the Company reasonably
requires. In the event you terminate your employment pursuant to this
paragraph 5(b), or the Company terminates your employment other than for
cause, the Company will be obligated to make immediate payment to you of the
base salary and stay bonus described in paragraph 3 above through the
remaining term of the Agreement in a single lump sum, and the benefits
described in paragraph 4 above, as well as provide the benefits required by
applicable law.
(c) Anything contained in paragraph 2 above to the contrary
notwithstanding, you will have the right at all times to terminate your
employment, by resignation at any time, effective upon fourteen (14) days'
written notice to the Company. In the event you terminate your employment
pursuant to this paragraph 5(c), the Company will be obligated to make
payment to you of the second and fourth stay bonuses described on Exhibit A
(if not earlier paid), the base salary and remaining stay bonuses described
in paragraph 3(a) above and the benefits described in paragraph 4 above
through the effective date of termination, as well as provide the benefits
required by applicable law.
(d) In the event your employment is terminated on account of your
death or disability, the Company will be obligated to make payment to you (or
your beneficiary) of the second and fourth stay bonuses described in Exhibit
A (if not earlier paid), the base salary described in paragraph 3 above
through the effective date of termination, the remaining stay bonuses
described in paragraph 3 above through the remaining term of this agreement
(or until all stay bonuses have been paid), and the benefits described in
paragraph 4 above through the effective date of termination, as well as
provide the benefits required by applicable law.
(e) Should you terminate your employment with the Company prior to
March 31, 1999, pursuant to paragraph 5(c) above, you agree to provide
consulting services to the Company on mutually agreeable terms.
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Binks Xxxxx Corporation
September 30, 1998
Page 4
6. AMENDMENT TO EMPLOYMENT SECURITY AGREEMENT. That certain
Employment Security Agreement (the "Employment Security Agreement"), dated
July 2, 1996, between you and the Company will be amended, effective as of
the date hereof, in accordance with the Amendment to Employment Security
Agreement attached hereto as EXHIBIT B. Upon the occurrence of a Corporate
Transaction as defined in the Employment Security Agreement (other than the
ITW Transaction) the Company will be obligated to make immediate payment to
you of all stay bonuses described in Exhibit A which were not paid prior to
the occurrence of the Corporate Transaction.
7. NON-ASSIGNABILITY. You will not transfer or assign this agreement
or any of your rights or obligations hereunder and any such purported or
attempted assignment or transfer shall be void.
8. NOTICES. Any and all notices, requests, demands or other
communications under this agreement shall be in writing and shall be deemed
to have been given when delivered personally, when sent by telecopier to the
designated fax number of the party being notified, or when mailed by
certified mail, return receipt requested, addressed to the party being
notified at the address of such party first set forth above, or at such other
address as such party may hereafter have designated by written notice;
PROVIDED, HOWEVER, that any notice of change of address shall not be
effective until its receipt by the party to be charged therewith.
9. WAIVERS AND AMENDMENTS. None of the terms or conditions of this
agreement may be waived, amended or modified except by means of a written
instrument signed by the party to be charged therewith.
10. SUCCESSORS AND ASSIGNS. This agreement shall be binding upon and
shall inure to the benefit of us and our respective heirs, executors,
administrators, representatives, successors and permitted assigns.
If the foregoing accurately reflects our entire agreement and
understanding as to the subject matter hereof, kindly acknowledge same by
countersigning and returning to the Company a duplicate copy of this letter.
Very truly yours,
BINKS XXXXX CORPORATION
By: /s/ Xxxxx X. Xxxxxxx
--------------------
Xxxxx X. Xxxxxxx
Its: Chairman and Chief Executive Officer
Acknowledged, Accepted
and Agreed to:
/s/ Xxxxxxx X. Xxxxxxxx
-----------------------
Name: Xxxxxxx X. Xxxxxxxx
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EXHIBIT A
PAYMENT SCHEDULE
SEPTEMBER OCTOBER NOVEMBER DECEMBER JANUARY FEBRUARY MARCH
ITEM 1998 1998 1998 1998 1999 1999 1999 TOTAL
---- --------- ------- -------- -------- ------- -------- ------ -----
SALARY 10,833 10,833 10,833 10,833 10,833 10,833 10,833 75,831
1ST STAY 65,000 65,000
BONUS
2ND STAY 65,000 65,000
BONUS
3RD STAY 5,417 5,417 5,417 5,417 5,417 5,417 32,502
BONUS
4TH STAY 32,502 32,502
BONUS
--------------------------------------------------------------------------------------------------- -------
75,833 81,250 16,250 16,250 16,250 16,250 48,750 270,833
------------------------------------------------------------------------------------------------------------------ -------
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OTHER TERMS AND CONDITIONS
(1) ALL PAYMENTS DESCRIBED ON THE ABOVE PAYMENT SCHEDULE WILL BE PAID IN
THE MONTH INDICATED EXCEPT AS DESCRIBED IN TERMS (3), (4) AND (5)
BELOW.
(2) PAYMENT OF THE 4TH STAY BONUS AND ANY DISCRETIONARY BONUS WILL BE
OFFSET AGAINST PAYMENT UNDER THE EMPLOYMENT SECURITY AGREEMENT DATED
07/02/96, AS AMENDED.
(3) PAYMENT OF THE 4TH STAY BONUS WILL BE MADE ON THE EARLIER OF A)
03/31/99 OR B) XXXXXXX X. XXXXXXXX'X LAST DAY OF EMPLOYMENT WITH THE
COMPANY.
(4) PAYMENT OF THE 2ND STAY BONUS WILL BE MADE WITHIN 30 DAYS AFTER THE
CLOSING DATE OF THE SALE TRANSACTIONS CONTEMPLATED UNDER THE PURCHASE
AGREEMENT BETWEEN THE COMPANY AND ITW, BUT IN NO EVENT LATER THAN
12/31/98.
(5) THE 3RD STAY BONUS WILL BEGIN BEING EARNED THE DAY AFTER THE CLOSING
DATE OF THE SALE TRANSACTIONS CONTEMPLATED UNDER THE PURCHASE
AGREEMENT BETWEEN THE COMPANY AND ITW AND WILL BE PAID RATABLY EACH
PAY PERIOD THEREAFTER IN THE MONTHLY AMOUNTS SHOWN ABOVE.
AMENDMENT
This Amendment to Employment Security Agreement (this "Amendment") dated
as of September 30, 1998 is by and between BINKS XXXXX CORPORATION (the
"Company") and Xxxxxxx X. Xxxxxxxx (the "Employee").
WHEREAS, the Company and the Employee entered into that certain
Employment Security Agreement dated July 2, 1996 (the "Employment Security
Agreement") providing for certain payments and benefits to the Employee by
the Company in the event of a Change of Control (as defined in the Employment
Security Agreement); and
WHEREAS, the Company and the Employee desire to amend the Employment
Security Agreement as more specifically set forth hereinafter;
NOW, THEREFORE, in consideration of the agreement hereinafter set forth
and for other good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged, the parties hereto agree as follows:
1. Section 3 of the Employment Security Agreement is hereby amended by
adding the following:
(d) All amounts and benefits provided in Sections 3(a) and 3(b)
hereof will be paid or provided automatically by the Company in the event of
a "Corporate Transaction" as defined below. In such event, references to
your termination of employment in Section 3(a) and 3(b) hereof shall be
deemed to refer to such Corporate Transaction, and the amount payable
pursuant to Section 3(a) shall be paid upon the occurrence of the Corporate
Transaction. For purposes hereof, "Corporate Transaction" means (i) a change
of control occurring after September 1, 1998, (ii) individuals who, as of
August 1, 1998, constituted the Board of Directors of the Company (the
"Incumbent Board") cease for any reason to constitute at least a majority of
the Board of Directors of the Company, provided that an individual whose
election or nomination for election by the Company's stockholders was
approved by at least a majority of the Incumbent Board (other than an
election or nomination of an individual whose initial assumption of office is
in connection with an actual or threatened election contest relating to the
election of the Directors of the Company) shall be deemed to be a member of
the Incumbent Board, or (iii) approval by the stockholders of the Company (or
the occurrence without the approval of the stockholders of the Company) of
any one or more of the following (X) a merger, reorganization or
consolidation of or by the Company, (Y) a liquidation or dissolution of the
Company or (Z) the sale or other disposition of 50% or more of the assets of
Binks Sames France SA in one transaction or a series of related transactions.
2. This Amendment shall be effective as of the day hereof.
3. Except as expressly amended hereby, the Employment Security
Agreement shall continue in full force and effect.
BINKS XXXXX CORPORATION
By: ___________________________ _________________________
Xxxxx X. Xxxxxxx Xxxxxxx X. Xxxxxxxx
Its Chairman and Chief Executive Officer
