EMPLOYMENT AGREEMENT
THIS AGREEMENT by and between Snap-on Incorporated, a Delaware
corporation (the "Company"), and Xxxx X. Xxxxxxx (the "Executive"), is effective
as of April 27, 2001 (the "Effective Date").
W I T N E S S E T H:
WHEREAS, the Company wishes to provide for the employment by the
Company of the Executive, and the Executive wishes to serve the Company, in the
capacities and on the terms and conditions set forth in this Agreement;
NOW, THEREFORE, it is hereby agreed as follows:
1. TERM. The term of this Agreement (the "Term") shall commence as of
the Effective Date and end on the third anniversary of the Effective Date;
provided, however, that commencing on the second anniversary of the Effective
Date and on each subsequent anniversary of the Effective Date (each such
anniversary, a "Renewal Date"), the Term shall automatically be extended for one
additional year unless, not later than such Renewal Date, the Company or the
Executive shall have given notice not to extend the Term. During the Term, the
Company shall employ the Executive, and the Executive shall serve the Company,
on the terms and conditions set forth in this Agreement.
2. POSITION AND DUTIES. (a) Effective as of the resignation of the
Company's Chief Executive Officer, the Executive shall serve as the Chief
Executive Officer and President of the Company, with such duties and
responsibilities as are consistent with such positions and the Company's
by-laws, and such other duties and responsibilities not inconsistent therewith
as may from time to time be assigned to him by the Board of Directors of the
Company (the "Board"). As soon as practicable following the Effective Date, the
Company shall use its best efforts to cause the Executive to be appointed as a
member of the Board. During the Term, the Executive shall report solely to the
Board.
(b) During the Term, and excluding any periods of vacation and sick
leave to which the Executive is entitled, the Executive shall devote his full
attention and time during normal business hours to the business and affairs of
the Company and, to the extent necessary to discharge the responsibilities
assigned to the Executive under this Agreement, use the Executive's reasonable
best efforts to carry out such responsibilities faithfully and efficiently. It
shall not be considered a violation of the foregoing for the Executive to serve
on corporate, industry, civic or charitable
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boards or committees, so long as the Executive has received written consent in
advance of the commencement of each such service or to devote time to his
personal, legal and financial matters, as long as such activities, individually
or in the aggregate, do not materially interfere with the performance of the
Executive's responsibilities hereunder.
(c) During the Term, the Executive shall be based at the Company's
principal headquarters, except for travel reasonably required for the
performance of the Executive's duties hereunder.
3. COMPENSATION. (a) BASE SALARY. During the Term, the Executive shall
receive an initial annual base salary (the "Annual Base Salary") of $600,000,
which shall be paid in monthly increments of $50,000, except to the extent
deferred. The Annual Base Salary shall be payable in accordance with the
Company's regular payroll practice for its senior executives, as in effect from
time to time. During the Term, the Annual Base Salary shall be reviewed by the
Organization and Executive Compensation Committee of the Board (the
"Compensation Committee") at least annually. The Annual Base Salary may be
decreased by the Board only as part of (a) a restructuring of the Company's
compensation structure with respect to its elected officers, so long as the
Executive's targeted total annual cash compensation is not reduced or (b) an
across-the-board reduction in the compensation of the Company's elected
officers. To the extent that the Annual Base Salary is increased or decreased,
the term "Annual Base Salary" shall refer to the Annual Base Salary as so
increased or decreased.
(b) ANNUAL CASH INCENTIVE. The Executive shall be eligible to
participate in the Company's annual cash incentive program in accordance with
its terms. The Executive's minimum target annual cash incentive opportunity (the
"Target Annual Incentive") under such program for fiscal 2001 shall be 100% of
Annual Base Salary. In the event that the performance taken into account under
such incentive program exceeds targeted levels, the Executive's bonus shall be
increased above the Target Annual Incentive, in proportion to the actual level
of achievement, subject to the maximum percentage provided by the terms of such
program, (i) with any eventual payout adjusted to reflect any change in the
Annual Base Salary during such year and (ii) multiplied by a fraction, the
numerator of which is the number of full months during such year during which
the Executive was employed by the Company as its Chief Executive Officer and
President and the denominator of which is 12. The Executive's bonus for the
portion of fiscal 2001 prior to the Executive becoming Chief Executive Officer
and President of the Company shall be determined using the annual base salary
and applicable percentage in effect with respect to the Executive immediately
prior to the Effective Date. For years following fiscal 2001, the Executive's
Target Annual Incentive shall be determined
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based on the Company's annual review of market practices and the Company's
compensation plans, subject in all events to a minimum of 85% of the Executive's
Annual Base Salary; provided, however, that such minimum Target Annual Incentive
may be decreased by the Board only as part of (a) a restructuring of the
Company's compensation structure with respect to its elected officers, so long
as the Executive's targeted total annual cash compensation is not reduced or (b)
an across-the-board reduction in the compensation of the Company's elected
officers.
(c) INCENTIVE COMPENSATION OTHER THAN ANNUAL CASH INCENTIVE. The
Executive shall be eligible to participate in the Company's other incentive
compensation plans in accordance with their terms. For each of fiscal 2001 and
fiscal 2002, the Executive's annualized target incentive opportunity under the
Company's intermediate incentive plan shall be $300,000, payable in accordance
with the terms of such plan. Future intermediate or long-term incentive
opportunities shall be determined by the Board in accordance with the Company's
annual review of market practices and the Company's compensation plans.
(d) OTHER BENEFITS. During the Term, the Executive shall be entitled
to participate in the benefit plans and perquisite programs of the Company that
are generally made available to other senior officers of the Company.
(e) EQUITY AWARDS.
(i) As soon as practicable following, and contingent upon,
shareholder approval of the Company's 2001 Incentive Stock and Awards Plan
(the "2001 Plan"), the Compensation Committee shall grant to the Executive
a stock option (the "Option") to purchase 200,000 shares of the Company's
common stock ("Company Stock") pursuant to the 2001 Plan. The Option shall
(w) be memorialized in the form of a stock option agreement having terms
and conditions no less favorable than the form of stock option agreement
used to make option grants under the 2001 Plan to other elected officers of
the Company during the month that the Option is granted, (x) have a ten
year term, (y) have a per share exercise price equal to the fair market
value (as defined in the 2001 Plan) of the Company Stock on the Option's
date of grant and (z) subject to the provisions hereof, vest and become
exercisable at the rate of one-half on each of the first two anniversaries
of its date of grant.
(ii) As soon as practicable following, and contingent upon,
shareholder approval of the 2001 Plan, the Compensation Committee shall
also grant to the Executive 100,000 restricted share units (the "Share
Units") pursuant to the 2001 Plan. Notwithstanding any provision of the
2001 Plan
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to the contrary, and subject to the provisions hereof, (x) the Share Units
shall be memorialized in the form of a deferred award agreement consistent
with the terms of the 2001 Plan, (y) the restrictions on the Share Units
shall lapse at the rate of one-third on their date of grant and one-third
on each of the first two anniversaries of their date of grant and (z)
subject to the provisions hereof, vested Share Units shall be credited in
shares of Common Stock upon the earlier of (1) the Executive's termination
of employment for any reason or (2) such earlier date that such Share Units
may be credited without causing the Company to lose its deduction with
respect to such Share Units pursuant to Section 162(m) of the Internal
Revenue Code of 1986, as it may be amended (the "Code"), subject to the
provisions of the 2001 Plan, including any provisions thereof with respect
to deferral. Dividend equivalents will be credited pursuant to the 2001
Plan with respect to such Share Units.
(iii) During the Term, the Executive shall be entitled to be
granted additional options to acquire Company Stock, restricted stock and
other equity awards at the discretion of the Compensation Committee.
(f) RETIREMENT BENEFIT. The Executive shall continue to participate in
the Snap-on Incorporated Retirement Plan (the "Retirement Plan") and shall elect
the final average pay formula thereunder. In addition, the Executive shall be
eligible to participate in the Snap-on Incorporated Supplemental Executive
Retirement Plan (the "Supplemental Plan"). For purposes of calculating the
Executive's pension under the Supplemental Plan, the Executive's actual years of
continuous employment (used for purposes of determining vesting and eligibility)
and credited service (used to compute benefits) (such years of continuous
employment and credited service, "Years of Service") shall be multiplied by 1.5
(such multiplier, the "Multiplier"); provided, however, that the number of years
of credited service used for calculating the Executive's benefits under the
Supplemental Plan shall not exceed 35, after taking into account the application
of the Multiplier. The Executive shall be deemed to be eligible for an early
retirement benefit under the Supplemental Plan upon the attainment of age 50 and
10 years of continuous employment (after taking into account the application of
the Multiplier). Except as set forth in Section 5(a)(vi) hereof, the elements of
the Executive's compensation that will be used for purposes of calculating the
Executive's pension under the Supplemental Plan shall be determined in
accordance with the provisions of such plan.
4. TERMINATION OF EMPLOYMENT. (a) DEATH OR DISABILITY. The Company
shall be entitled to terminate the Executive's employment because of the
Executive's Disability during the Term. "Disability" means that the Executive is
disabled within the meaning of the Company's long-term disability
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policy (such that, if the Company maintains a long-term disability policy, the
Executive's employment may only be terminated for Disability under this
Agreement if he is eligible for benefits under such policy) or, if there is no
such policy in effect, that (i) the Executive has been substantially unable, for
120 business days within a period of 180 consecutive business days, to perform
the Executive's duties under this Agreement, as a result of physical or mental
illness or injury, and (ii) a physician selected by the Company or its insurers,
and acceptable to the Executive or the Executive's legal representative, has
determined that the Executive is disabled. A termination of the Executive's
employment by the Company for Disability shall be communicated to the Executive
by written notice, and shall be effective on the 30th day after receipt of such
notice by the Executive (the "Disability Effective Date"), unless the Executive
returns to full-time performance of the Executive's duties before the Disability
Effective Date. The Board may, if it deems such action to be in the best
interest of the Company, appoint an individual on a temporary basis during the
period prior to the Disability Effective Date to fulfill any duties that the
Executive is unable to perform. The Term shall terminate automatically upon the
Executive's death.
(b) TERMINATION BY THE COMPANY. The Company may terminate the
Executive's employment during the Term for Cause or without Cause.
(i) "Cause" shall mean that prior to the Executive's termination
of employment, the Executive shall have (A) engaged in any act of fraud,
embezzlement, or theft in connection with his duties as an executive or in
the course of employment with the Company or its subsidiaries; (B)
wrongfully disclosed any secret process or confidential information of the
Company or its subsidiaries; (C) participated without the written consent
of the Board in the management of any business enterprise which
manufacturers or sells any product or service competitive with any product
or service of the Company or its subsidiaries (other than the mere
ownership of less than five (5) percent of the securities in any enterprise
and exercise of any ownership rights related thereto); and in any such case
the act shall have been determined by the Board to have been materially
harmful to the Company; (D) failed in a willful and continued manner to
substantially perform his duties with the Company after a written demand
for substantial performance is delivered to the Executive by the Board,
which demand specifically identifies the manner in which the Board believes
that the Executive has not substantially performed the Executive's duties,
or (E) willfully engaged in conduct which is demonstrably and materially
injurious to the Company or its subsidiaries, monetarily or otherwise.
(ii) For purposes of Sections 4(b)(i)(D) and (E) hereof, no act,
or failure to act, on the Executive's part shall be deemed "willful" unless
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done, or omitted to be done, by the Executive not in good faith and without
reasonable belief that the Executive's act, or failure to act, was in the
best interest of the Company. The Executive may not be terminated for Cause
prior to his receipt of a copy of a resolution duly adopted by the
affirmative vote of not less than three-quarters (3/4) of the entire
membership of the Board at a meeting of the Board called and held for the
purpose of considering such termination (after reasonable notice to the
Executive and an opportunity for the Executive, together with his counsel,
to be heard before the Board) finding that the Executive was guilty of
conduct set forth in the definition of Cause herein, and specifying the
particulars thereof in detail.
(c) GOOD REASON. (i) The Executive may terminate employment for Good
Reason or without Good Reason. "Good Reason" means, without the Executive's
written consent, the occurrence of any of the following actions or failures to
act, which action or failure to act is not cured within ten business days
following the date on which the Executive advises the Company in writing of the
occurrence of such action or failure to act (such ten-day period, the "Cure
Period"):
(A) a material and adverse change in the Executive's status,
authority, duties or functions;
(B) except as provided in Section 3(a) hereof, any reduction in
the Executive's base salary;
(C) the failure by the Company to pay the Executive's
compensation when due;
(D) the relocation of the Executive's principal place of
employment to a location more than 50 miles from the
Executive's principal place of employment; or
(E) the failure of the Company to obtain from a successor the
assumption and agreement to perform this Agreement (as
described in Section 10(c) hereof) prior to the
effectiveness of any such succession.
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(ii) A termination of employment by the Executive for Good Reason
shall be effectuated by giving the Company written notice of the
termination, setting forth in reasonable detail the specific conduct of the
Company that constitutes Good Reason and the specific provision(s) of this
Agreement on which the Executive relies. A termination of employment by the
Executive for Good Reason shall be effective on the tenth business day
following the end of the Cure Period, unless the notice sets forth a later
date (which date shall in no event be later than 30 days following the end
of the Cure Period). The failure to set forth any fact or circumstance in
such notice of termination shall not constitute a waiver of the right to
assert, and shall not preclude the Executive from asserting such fact or
circumstance in an attempt to enforce any right under or provision of this
Agreement. Any election by the Executive to terminate his employment for
Good Reason shall not be deemed a voluntary termination of employment by
the Executive for the purpose of any other employee benefit or other plan.
(iii) A termination of the Executive's employment by the
Executive without Good Reason shall be effected by giving the Company 30
days written notice of the termination.
(d) DATE OF TERMINATION. The "Date of Termination" means the date of
the Executive's death, the Disability Effective Date or the date on which the
termination of the Executive's employment by the Company for Cause or without
Cause or by the Executive for Good Reason or without Good Reason is effective.
5. OBLIGATIONS OF THE COMPANY UPON TERMINATION OR NON-RENEWAL.
(a) OTHER THAN FOR CAUSE, DEATH OR DISABILITY, OR FOR GOOD REASON;
NON-RENEWAL. If the Company terminates the Executive's employment during the
Term for any reason other than Cause, death or Disability, or the Executive
terminates his employment for Good Reason, or if the Company provides the
Executive with notice, pursuant to Section 1 hereof, that the Term of the
Agreement shall not be extended (a "Non-Renewal"), then, subject to the
provisions of this Agreement, the Executive shall receive the payments and
benefits described in this Section 5(a).
(i) The Company shall pay (A) no later than ten business days
following the Date of Termination (the end of the Term in the case of a
Non-Renewal), the Executive's full Annual Base Salary to the Executive
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through the Date of Termination (or the end of the Term, as the case may
be), without regard to any reduction in Annual Base Salary which
constitutes Good Reason, together with all compensation and benefits then
payable to the Executive through the Date of Termination (or end of the
Term, as the case may be) under the terms of any compensation or benefit
plan, program or arrangement maintained by the Company during such period,
subject to the terms of such plans and (B) the Executive's normal
post-termination benefits to the Executive as such benefits become due, in
accordance with the terms of the relevant plans and agreements (the
obligations described in this paragraph (i), the "Accrued Obligations").
(ii) The Company shall pay to the Executive, in a lump sum
payment within ten business days following the Date of Termination (or the
end of the Term, as the case may be) or, in the discretion of the Company,
in substantially equal monthly installments over a period of two years
following the Date of Termination (one year following the end of the Term
in the case of a Non-Renewal) (such period, the "Severance Period"), a
severance payment or payments which, in the aggregate, equal two times (one
times in the case of a Non-Renewal) the sum of (i) the Executive's Annual
Base Salary in effect immediately prior to the Date of Termination (or end
of the Term, as the case may be), without regard to any reduction thereof
which constitutes Good Reason plus (ii) the Executive's Target Annual
Incentive in effect immediately prior to the Date of Termination (or the
end of the Term, as the case may be) (such payments, the "Severance
Payments"). Except as provided in Section 5(a)(vi) below, the Severance
Payments hereunder shall not be included as compensation for purposes of
calculating the Executive's retirement benefits from the Company, and the
Severance Period shall not count as service for purposes of any benefit
plan or arrangement maintained by the Company.
(iii) Subject to Section 5(a)(ii) hereof, for a two-year period
(one year in the case of a Non-Renewal) following the Date of Termination
(or end of the Term, as the case may be) (or, if later, in accordance with
the existing plans, agreements and arrangements in effect between the
Executive and the Company), the Company shall provide the Executive with
continued health, disability, life and other insurance benefits
substantially similar to the benefits provided during such period to the
elected officers of the Company; provided, however, that the level of any
continued benefit shall be reduced to the extent that any such benefits are
being provided to the Executive by a subsequent employer.
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(iv) Each outstanding Company stock option held by the Executive,
whether or not vested and exercisable, shall become fully vested and
exercisable and, in the case of a non-qualified stock option, shall remain
outstanding and exercisable for a period of two years (one year in the case
of a Non-Renewal) or, if later, the period prescribed by the applicable
option agreement (but in no event later than the expiration date of such
option).
(v) Each outstanding Share Unit held by the Executive shall
become fully vested.
(vi) The Executive shall be credited with two additional Years of
Service (one Year of Service in the case of a Non-Renewal), prior to taking
into account the application of the Multiplier, for purposes of the
Supplemental Plan service formula set forth in Section 3(f) hereof and, if
the Executive has not yet attained age 50 as of the Date of Termination (or
the end of the Term, as the case may be), the Executive shall be deemed to
have attained age 50. The Severance Payments shall be deemed to be eligible
compensation for purposes of calculating the Executive's final average pay
under the Supplemental Plan, with the Annual Base Salary and Target Annual
Incentive elements of such Severance Payments deemed to have been paid over
the two-year period (one-year period in the case of a Non-Renewal)
following the Date of Termination (or the end of the Term, as the case may
be) in accordance with the Company's payment practices, as if the Executive
were still employed during such period. The Executive's pension benefit
shall be payable no earlier than the later of (A) the second anniversary
(the first anniversary in the case of a Non-Renewal) of the Date of
Termination (or the end of the Term, as the case may be) or (B) the date
that payment of pension benefits to the Executive is to commence pursuant
to the terms of the Supplemental Plan, in each case based on the
Executive's payment election made under the Supplemental Plan.
(b) DEATH AND DISABILITY. If the Executive's employment is terminated
by reason of the Executive's death or Disability during the Term, the Company
shall pay to the Executive (or his estate or legal representative, as the case
may be) the Accrued Obligations.
(c) BY THE COMPANY FOR CAUSE; BY THE EXECUTIVE OTHER THAN FOR GOOD
REASON. If the Executive's employment is terminated by the Company for Cause or
the Executive voluntarily terminates employment other than for Good Reason
during the Term, (i) the Company shall have no further payment or benefit
coverage obligations to the Executive, except that
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the Company shall pay to the Executive the Accrued Obligations and (ii) the
Executive shall forfeit the then unvested portions of the Option and the Share
Units and all previously vested options and other vested equity awards granted
on or after the Effective Date shall be treated according to the provisions of
the plan and agreements under which such awards were granted.
(d) NO DUPLICATION. Notwithstanding any other provision hereof, if a
termination of the Executive's employment entitles the Executive to severance
compensation under the Restated Senior Officer Agreement between the Executive
and the Company referred to in Section 11(f) hereof, then the Executive shall
not be entitled to any compensation and benefits under this Section 5.
6. NON-EXCLUSIVITY OF RIGHTS. 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 for which the Executive may
qualify nor shall anything in this Agreement limit or otherwise affect such
rights as the Executive may have under any contract or agreement with the
Company. Vested benefits and other amounts that the Executive is otherwise
entitled to receive under any plan, policy, practice or program of, or any
contract of agreement with, the Company on or after the Date of Termination
shall be payable in accordance with the terms of each such plan, policy,
practice, program, contract or agreement, as the case may be, except as
explicitly modified by this Agreement.
7. FULL SETTLEMENT. The Company's obligation to make the payments
provided for in, and otherwise to perform its obligations under, this Agreement
shall not be affected by any set-off, counterclaim, recoupment, defense or other
claim, right or action that the Company may have against the Executive or
others. In no event shall the Executive be obligated to seek other employment or
take any other action by way of mitigation of the amounts payable to the
Executive under any of the provisions of this Agreement and, except as provided
in Section 5(a)(iii) hereof, such amounts shall not be reduced, regardless of
whether the Executive obtains other employment.
8. RESTRICTIVE COVENANTS.
(a) APPLICATION. The Executive shall be subject to the restrictive
covenants set forth in Sections 8(b), (c), (d) and (e) hereof (the "Restrictive
Covenants") during the Executive's employment and for the respective
post-employment period set forth herein. The Restrictive Covenant set forth in
Section 8(b) hereof shall apply for a period of (i) two years following the Date
of Termination, in the case of a termination of the Executive's employment by
the Company for Cause or
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by the Executive without Good Reason, (ii) one year following the Date of
Termination, in the case of a termination of the Executive's employment by the
Company without Cause or by the Executive for Good Reason or (iii) one year
following the end of the Term, in the case of a Non-Renewal (the applicable
period of employment and post-employment period, collectively, (the "Restrictive
Period")). The Restrictive Covenant set forth in Section 8(c) hereof shall apply
for a period of (i) two years following the Date of Termination, in the case of
a termination of the Executive's employment for any reason or (ii) two years
following the end of the Term, in the case of a Non-Renewal. The Restrictive
Covenants set forth in Sections 8(d) and 8(e) hereof shall apply indefinitely.
If the Executive violates any of the Restrictive Covenants during the
Restrictive Period, then, (i) to the extent that the Executive is entitled to
monthly Severance Payments, all such Severance Payments which have not yet been
paid shall be immediately forfeited, (ii) any further continuation of benefits
(as set forth in Section 5(a)(iii) hereof) shall immediately cease and (iii) in
addition to any forfeiture provisions contained in the Supplemental Plan, any
pension benefits to be paid under the Supplemental Plan shall be calculated as
if Section 5(a)(vi) of this Agreement did not exist.
(b) NON-COMPETITION. The Executive shall not, directly or indirectly,
engage, whether as an employee, employer, consultant, advisor or director, or as
an owner, investor, partner or stockholder (unless his interest is
insubstantial), in any business in an area or region in which the Company or any
subsidiary or affiliate then conducts business, which business is directly in
competition with a business then conducted by the Company or a subsidiary or
affiliate (such business, a "Competitive Business"). For purposes of this
Section 8(b), the Executive's interest as a stockholder shall be considered
insubstantial if such interest represents beneficial ownership of less than five
percent of the outstanding class of stock, and the Executive's interest as an
owner, investor or partner shall be considered insubstantial if such interest
represents ownership of less than five percent of the outstanding equity of the
entity. Notwithstanding the foregoing, the Executive's engaging or participating
in a non-Competitive Business (as determined in the discretion of the Company
prior to the commencement of such engagement or participation, which
determination shall not be unreasonably made) of an entity which also operates a
Competitive Business shall not constitute a violation of this Section 8(b).
(c) NON-SOLICITATION. The Executive shall not, directly or indirectly,
whether as employee, employer, consultant, advisor or director, or as an owner,
investor, partner, stockholder or otherwise, (i) solicit or induce any client or
customer of the Company or a subsidiary or affiliate, or entity with which the
Company or a subsidiary or affiliate has a business relationship, to curtail,
cancel,
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not renew or not continue his or her or its business with the Company or any
subsidiary or affiliate, (ii) hire any person who is then, or who within 180
days prior to the Date of Termination was, an employee of, or a consultant or
independent contractor to, the Company or a subsidiary or affiliate or (iii)
solicit or induce any person who is an employee of, or a consultant or
independent contractor to, the Company or a subsidiary or affiliate to curtail,
cancel, not renew or not continue his or her or its employment, consulting or
other relationship with the Company or any subsidiary or affiliate.
(d) CONFIDENTIALITY. Except pursuant to the performance of the
Executive's duties to the Company during his employment with the Company or with
the consent of the Company, the Executive shall not take, disclose, use, sell or
otherwise transfer any confidential or proprietary information of the Company or
any subsidiary or affiliate, including but not limited to information regarding
current and potential customers, clients, counterparts, organization, employees,
finances and financial results, and methods of operation, transactions and
investments, so long as such information has not otherwise been disclosed to the
public or is not otherwise in the public domain, except as required by law or
pursuant to legal process; and the Executive shall return to the Company,
promptly following the Date of Termination, any information, documents,
materials, data, manuals, computer programs or device containing information
relating to the Company or any subsidiary or affiliate, and each of their
customers, clients and counterparts, which came into the Executive's possession
or control during his employment.
(e) COOPERATION WITH THE COMPANY. The Executive shall cooperate fully
with the Company in the defense or prosecution of any claims or actions now in
existence or which may be brought in the future against or on behalf of the
Company or its subsidiaries or affiliates which relate to events or occurrences
that transpired while the Executive was employed by the Company. The Executive's
full cooperation in connection with such claims or actions shall include, but
not be limited to, being available to meet with counsel to prepare for discovery
or trial and to act as a witness on behalf of the Company and its subsidiaries
and affiliates at mutually convenient times. The Company shall reimburse the
Executive for any reasonable out-of-pocket expenses incurred in connection with
the Executive's performance of obligations pursuant to this Section 8(e). To the
maximum extent permitted by law, the Executive agrees that he will notify the
Chairman of the Board if the Executive is contacted by any government agency
relating to a matter involving the Company, by any other person contemplating or
maintaining any claim or legal action against the Company or its subsidiaries
and affiliates, or by any agent or attorney of such person.
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(f) ENFORCEABILITY. It is the intention of the parties that the
provisions of this Section 8 shall be enforceable to the fullest extent
permissible under applicable law, but that if any portion or provision of this
Section 8 shall to any extent be declared illegal or unenforceable by a court of
competent jurisdiction, then the court may amend such portion or provision so as
to comply with law in a manner consistent with the intention of this Agreement.
9. DISPUTE RESOLUTION; ATTORNEYS' FEES. All disputes arising under or
related to the employment of the Executive or the provisions of this agreement
shall be settled by arbitration under the rules of the American Arbitration
Association then in effect, such arbitration to be held in Kenosha, Wisconsin,
as the sole and exclusive remedy of either party and judgement on any
arbitration award may be entered in any court of competent jurisdiction;
provided, however, that the Company may go to court to enforce the provisions of
Section 8 hereof. The Company agrees to pay, as incurred, to the fullest extent
permitted by law, all legal fees and expenses that the Executive may reasonably
incur as a result of any contest (regardless of the outcome) by the Company, the
Executive or others of the validity or enforceability of or liability under, or
otherwise involving, any provision of this Agreement, together with interest on
any delayed payment at the applicable federal rate provided for in Section
7872(f)(2)(A) of the Code; provided, however, that such reimbursement of legal
fees and expenses shall be contingent on the Executive having brought or
defended such contest in good faith. The Company shall also pay all reasonable
legal fees and expenses incurred by the Executive in connection with the
preparation and negotiation of this Agreement.
10. SUCCESSORS. (a) This Agreement is personal to the Executive and,
without the prior written consent of the Company, shall not be assignable by the
Executive otherwise than by will or the laws of descent and distribution. This
Agreement shall inure to the benefit of and be enforceable by the Executive's
legal representatives.
(b) This Agreement shall inure to the benefit of and be binding upon
the Company and its successors and assigns.
(c) The Company shall 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 expressly to
assume and agree to perform this Agreement in the same manner and to the same
extent that the Company would have been required to perform it if no such
succession had taken place. As used in this Agreement, the "Company" shall mean
both the Company as defined above and any such successor that assumes and agrees
to perform this Agreement, by operation
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of law or otherwise.
11. MISCELLANEOUS. (a) This Agreement shall be governed by, and
construed in accordance with, the laws of the State of Wisconsin, without
reference to principles of conflict of laws. The captions of this Agreement are
not part of the provisions hereof and shall have no force or effect. This
Agreement may not be amended or modified except by a written agreement executed
by the parties hereto or their respective successors and legal representatives.
(b) All notices and other communications under this Agreement shall be
in writing and shall be given by hand delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
c/o Snap-on Incorporated
00000 Xxxxxxxxx Xxxxx
X. X. Xxx 0000
Xxxxxxx, XX 00000-0000
If to the Company:
Snap-on Incorporated
00000 Xxxxxxxxx Xxxxx
X. X. Xxx 0000
Xxxxxxx, XX 00000-0000
Attention: General Counsel
or to such other address as either party furnishes to the other in writing in
accordance with this Section 11(b). Notices and communications shall be
effective when actually received by the addressee.
(c) The invalidity or unenforceability of any provision of this
Agreement shall not affect the validity or enforceability of any other provision
of this Agreement. If any provision of this Agreement shall be held invalid or
unenforceable in part, the remaining portion of such provision, together with
all other provisions of this Agreement, shall remain valid and enforceable and
continue in full force and effect to the fullest extent consistent with law.
(d) Notwithstanding any other provision of this Agreement, the
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Company may withhold from amounts payable under this Agreement all federal,
state, local and foreign taxes that are required to be withheld by applicable
laws or regulations.
(e) The Executive's or the Company's failure to insist upon strict
compliance with any provisions of, or to assert, any right under, this Agreement
(including, without limitation, the right of the Executive to terminate
employment for Good Reason) shall not be deemed to be a waiver of such provision
or right or of any other provision of or right under this Agreement.
(f) The Executive and the Company acknowledge that, as of the
Effective Date, this Agreement supersedes any other agreement between them
concerning the subject matter hereof (including but not limited to the letter
agreement between the Company and the Executive, dated as of October 27, 2000)
and that, following the Effective Date, no such agreement shall be of any
further force or effect. As soon as practicable following the execution of this
Agreement, the Company and the Executive shall enter into a Restated Senior
Officer Agreement and an Indemnification Agreement, each of which shall be
consistent with the form of such agreement entered into by the Company and its
current Chief Executive Officer.
(g) The rights and benefits of the Executive under this Agreement may
not be anticipated, assigned, alienated or subject to attachment, garnishment,
levy, execution or other legal or equitable process except as required by law.
Any attempt by the Executive to anticipate, alienate, assign, sell, transfer,
pledge, encumber or charge the same shall be void. Payments hereunder shall not
be considered assets of the Executive in the event of insolvency or bankruptcy.
(h) This Agreement may be executed in several counterparts, each of
which shall be deemed an original, and said counterparts shall constitute but
one and the same instrument.
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IN WITNESS WHEREOF, the Executive has hereunto set the Executive's
hand and, pursuant to the authorization of its Board, the Company has caused
this Agreement to be executed in its name on its behalf, all as of the day and
year first above written.
SNAP-ON INCORPORATED
By: /s/ Xxxxxx X. Xxxxxx
---------------------------------
Title:
/s/ Xxxx X. Xxxxxxx
-------------------------------------
EXECUTIVE
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