AGREEMENT
AGREEMENT, dated as of May 1, 1989 between Handy & Xxxxxx, a
New York corporation, having its executive offices at 000 Xxxxx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000 (the "Company"), and Xxxxxxx X. Xxxxxx, residing at
Briarcliff Manor, New York (the "Executive").
W I T N E S S E T H:
WHEREAS, the Executive is currently employed by the Company as
Chairman of the Board, President and Chief Executive Officer;
WHEREAS, the Company and the Executive desire to enter into an
agreement relating to the continued employment of the Executive by the Company;
NOW, THEREFORE, in consideration of the covenants and
agreements hereinafter set forth, the parties hereto agree as follows:
1. EMPLOYMENT
1.1 The Company hereby agrees to employ the Executive, and the
Executive hereby agrees to accept employment with the Company and agrees to
serve, upon the terms and conditions herein contained, as the Company's
Chairman, President and Chief Executive Officer.
1.2 The term of employment under this Agreement shall commence
on May 1, 1989 and, subject to the terms hereof, shall continue through April
30, 1992; provided, however, that commencing in May 1990 and each May thereafter
the term of this Agreement may be extended by the Board of Directors of the
Company for one additional year. If not so extended, this Agreement shall
terminate at the end of the then current 3-year term. Such term of employment is
referred to hereinafter as the "Employment Term."
1.3 The Executive shall serve as Chief Executive Officer of
the Company and shall have such duties, responsibilities and authority as are
generally associated with such position. Throughout the period of his employment
hereunder, the Executive shall devote his best efforts and substantially all his
business time and services to the business and affairs of the Company except for
vacations, illness or incapacity, but nothing in this Agreement shall preclude
the Executive from (i) devoting reasonable periods required for (A) serving as a
director or member of a committee of any organization or company (other than
with respect to activities set forth in (C) below) involving no conflict of
interest with the Company provided that he is such a director or member as of
the date hereof or such directorship or membership has been approved by the
Board of Directors of the Company, (B) delivering lectures and fulfilling
speaking engagements, and (C) engaging in charitable and
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community activities provided that such activities do not materially interfere
with the performance of his duties hereunder or (ii) investing Executive's
assets in other companies so long as such investments do not require the
Executive's services or active management.
2. SALARY
2.1 The Executive shall be entitled to receive a base salary
at a rate of $300,000 per annum payable in accordance with the Company's payroll
policy from time to time in effect.
2.2 The Company may, in its sole discretion, increase the
Executive's base salary (the "Base Salary").
3. INCENTIVES
3.1 The Executive shall be eligible to receive awards on the
terms specified in the Company's Management Incentive Plan and the Company's
Long-Term Incentive Plan or any successor plans (the "Plans").
3.2 The Company may, in its sole discretion, grant awards to
the Executive in addition to those awards granted in Section 3.1.
4. TERMINATION
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4.1 In the event that the Executive's employment is terminated
by the Company (other than for Cause as hereinafter defined) or the Executive
terminates his employment for Good Reason, as hereinafter defined, prior to the
end of the Employment Term, then in either event, after the date of termination
of Executive's employment (the "Termination Date"), Company shall:
(a) Pay the Executive, his estate or beneficiaries in a
lump sum by the fifth business day after the Termination Date:
(i) an amount equal to the Executive's Base Salary
from the Termination Date to the end of the Employment Period,
plus
(ii) an amount equal to (A) the Incentive Pay that
the Executive became entitled to receive for the most recent
calendar year for which the Executive was actually awarded
under the Company's Management Incentive Plan multiplied by
(B) the number of years or portions thereof (computed on the
basis of a 365 day year) from the beginning of the calendar
year in which the Termination Date falls to the end of the
Employment Period.
(b) In addition to any Pension Benefits to which the
Executive is entitled under the Handy & Xxxxxx Pension Plan for
Salaried Employees and any supplemental executive retirement plan of
the Company or any successor plans thereto, pay the Executive a lump
sum amount, in cash, equal
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to the actuarial equivalent of the excess of (x) the retirement pension
(determined as a straight life annuity commencing at age 65) which the
Executive would have accrued under the terms of such Plans (without
regard to any amendment to such Plans made subsequent to a Change in
Control and on or prior to the Termination Date, which amendment
adversely affects in any manner the computation of retirement benefits
thereunder), determined as if the Executive had accumulated (after the
Termination Date) additional months of service credit thereunder until
the end of the Employment Term at the Executive's highest annual rate
of compensation during the twelve (12) months immediately preceding the
Termination Date, and (y) the retirement pension (determined as a
straight life annuity commencing at age sixty-five (65) which the
Executive had then accrued pursuant to the provisions of such Plans.
For purposes of this Section 4.1(b), "actuarial equivalent" shall be
determined using the same methods and assumptions utilized under such
Plans immediately prior to the Termination Date.
(c) Arrange to provide the Executive with life,
disability, accident and health insurance benefits substantially
similar to those which the Executive is receiving immediately prior to
the event which gave rise to the Executives termination until the end
of the Employment Period. Benefits otherwise receivable by the
Executive pursuant to this Section 4.1(c) shall be
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reduced to the extent comparable benefits are actually received by the
Executive during such period following the Executives termination of
employment and any such benefits actually received by the Executive
shall be reported to the Company.
(d) Transfer to the Executive all right, title and
interest to any Company car being used by Executive immediately prior
to the event giving rise to the Executive's termination.
4.2 In the event that the Executive's employment is terminated
by the Company (other than for Cause as hereinafter defined) or the Executive
terminates his employment for Good Reason, as hereinafter defined, prior to the
end of the Employment Term, the Executive shall, until the end of the Employment
Term, be entitled to be provided with office space, secretarial services and all
other benefits and entitlements which are afforded to senior executives of the
Company at the time of Executive's termination of employment.
4.3 Change in Control. For purposes of this Agreement, "Change
in Control" means the occurrence of one of the following:
(a) any "person," as such term is used in Sections
13(d) and 14(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act") (other than the Company, any trustee or other fiduciary
holding securities under an employee benefit plan of the Company or
any corporation
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owned, directly or indirectly, by the stockholders of the Company in
substantially the same proportions as their ownership of stock of the
Company), is or becomes the "beneficial owner" (as defined in Rule
13d-3 under the Exchange Act), directly or indirectly, of securities
of the Company representing 25% or more of the combined voting power of
the Company's then outstanding securities;
(b) during any period of two consecutive years (not
including any period prior to the execution of this amendment to the
Executive Agreement), individuals who at the beginning of such period
constitute the Board of Directors of the Company (the "Board"), and any
new director (other than a director designated by a person who has
entered into an agreement with the Company to effect a transaction
described in clause (a), (c) or (d) of this Section) whose election by
the Company's stockholders was approved by a vote of at least
two-thirds (2/3) of the directors then still in office who either were
directors at the beginning of the period or whose election or
nomination for election was previously so approved, cease for any
reason to constitute at least a majority thereof;
(c) the stockholders of the Company approve a merger or
consolidation of the Company with any other corporation; other than (i)
a merger or consolidation which would result in the voting securities
of the
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Company outstanding immediately prior thereto continuing to represent
(either by remaining outstanding or by being converted into voting
securities of the surviving entity) more than 70% of the combined
voting power of the voting securities of the Company or such surviving
entity outstanding immediately after such merger or consolidation or
(ii) a merger or consolidation effected to implement a
recapitalization of the Company (or similar transaction) in which no
"person" (as hereinabove defined) acquires more than 50% of the
combined voting power of the Company's then outstanding securities; or
(d) the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all of the Company's
assets.
5. DEATH OR PERMANENT DISABILITY
5.1 In the event the Executive becomes totally and permanently
disabled (as defined in the Company's Pension Plan for Salaried Employees as in
effect on the date hereof ("Permanent Disability")) prior to the end of the
Employment Term, the Executive shall continue to receive compensation equal to
the Executive's then current Base Salary until the end of the Employment Term;
provided, however, that any such payments shall be reduced by any disability
benefits
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actually paid during such period to the Executive under the Company's Pension
Plan for Salaried Employees or other Company plan. The Executive shall also be
entitled to continued participation in the medical plans of the Company
available generally to disabled corporate office salaried employees.
Notwithstanding the foregoing in this Section 5.1, any medical
coverage provided to the Executive under this Section 5.1 shall be secondary to
any similar coverage provided to the Executive by any successor employer, so
that the Executive will only be reimbursed for medical costs under this
Agreement to the extent he is not reimbursed for such costs by a successor
employer.
5.2 In the event of the Executives death during the Employment
Term, the Executive's estate or designated beneficiaries shall continue to
receive compensation equal to the Executives then current Base Salary until the
end of the Employment Term; provided, however, that any such payments shall be
reduced by any survivor benefits payable during such period to the Executives
estate or any designated beneficiary under the Company's Pension Plan for
Salaried Employees, calculated on the assumption that such benefits will be paid
over the longest period for payment of survivor benefits permitted under the
Company's Pension Plan for Salaried Employees and the U.S. Internal Revenue
Code.
5.3 Any termination by the Company on account of the
Executives Permanent Disability shall be communicated by a Notice of Disability
Termination.
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For purposes of this Agreement, a "Notice of Disability Termination" shall mean
a written notice which sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of the Executive's
employment under Section 5.1. For purposes of this Agreement, no such purported
termination by the Company shall be effective without such Notice of Disability
Termination.
6. TERMINATION FOR GOOD REASON
6.1 The Executive may terminate his employment hereunder for
Good Reason at any time during the Employment Term. For purposes of this
Agreement, "Good Reason" shall mean any of the following (without the Executives
express prior written consent):
(a) There shall be a material diminution in the
Executive's position, duties, responsibilities and status with Company
as the same are in effect on the date of this Agreement or as the same
may be increased in the future.
(b) The Executive's reporting responsibilities, titles
or offices in effect on the date of this Agreement or as the same may
be increased in the future shall be materially reduced.
(c) The Executive shall be removed from or shall not be
re-elected to the position referred to in Section 1.1, provided that
this Section
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6.1(c) shall not be deemed to include termination of Executive's
employment for Cause or as a result of the Executive's substantial
disability, death or retirement pursuant to a Company sponsored
retirement plan.
(d) The Executive's Base Salary shall be reduced.
(e) Except for awards under Section 3.2, the Company
shall fail to continue in effect any Company plan providing for
Incentive Pay, Pension Benefits, Fringe Benefits or Expense
Reimbursement in effect on the date of this Agreement without adopting
a replacement plan or plans which is or are, in the aggregate, no less
favorable to the Executive than those the Executive enjoys at the date
of this Agreement.
(f) Company's principal executive offices shall be
moved to a location outside New York County or Westchester County, New
York, or Fairfield County, Connecticut.
(g) Company shall require the Executive to be based
anywhere other than at Company's principal executive offices or if the
Executive consents to such required move, Company fails to reimburse
the Executive for moving expenses and any difference between the sale
price of his old principal residence and the purchase price of his new
principal residence in connection with such move.
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(h) The number of days per year allowed for the
Executives Vacation is reduced.
(i) Company breaches any provision of this Agreement.
(j) Any successor to Company fails to assume this
Agreement.
(k) Any purported termination of the Executives
employment which is not effected pursuant to a notice of termination
satisfying the requirements of Sections 5 or 7 of this Agreement,
and, for purposes of this Agreement, no such purported termination
shall be effective.
6.2 Any purported termination of the Executive's employment
pursuant to Section 6.1 shall be communicated by written Notice of Termination
for Good Reason. "Notice of Termination for Good Reason" shall mean a notice
indicating the specific termination provision in Section 6.1 relied upon and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.
7. DISCHARGE FOR CAUSE
7.1 The Company shall have the right to terminate the
employment of the Executive for Cause. If the Company exercises such right, its
obligation under this Agreement to make any further payments to the Executive
shall thereupon cease and terminate. As used herein, the term "Cause" shall be
limited to (a) action by the
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Executive involving willful malfeasance having a material adverse effect on the
Company, (b) substantial and continuing refusal by the Executive in willful
breach of this Agreement to perform the duties ordinarily performed by a chief
executive officer (other than any such failure resulting from the Executive's
incapacity due to physical or mental illness or any such actual or anticipated
failure following a Change in Control of the Company after the issuance of a
Notice of Termination for Good Reason by the Executive 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 (c) the
Executive being convicted of a felony; provided that any such action or refusal
by the Executive shall not constitute "Cause" if, in good faith, the Executive
believed such action or refusal to be in or not opposed to the best interests of
the Company, or if the Executive shall be entitled, under applicable law or the
Certificate of Incorporation or By-Laws of the Company, to be indemnified with
respect to such action or refusal. Termination of the Executive pursuant to
Section 7 shall be communicated by a Notice of Termination. For purposes of this
Agreement a "Notice of Termination" shall mean delivery to the Executive of a
copy of a resolution duly adopted by the affirmative vote of not less than
three-quarters of the entire membership of the Company's Board of Directors at a
meeting of the Board called and held for the purpose (after reasonable notice to
the
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Executive and reasonable opportunity for the Executive, together with the
Executive's counsel, to be heard before the Board prior to such vote), finding
that in the good faith opinion of the Board the Executive was guilty of conduct
set forth in the third sentence of this Section 7 and specifying the particulars
thereof in detail. For purposes of this Agreement, no such purported termination
of the Executive's employment shall be effective without such Notice of
Termination.
8. EXPENSES
8.1 The Executive is authorized to incur reasonable expenses
for promoting the business of the Company including expenses for travel and
similar items. The Company will reimburse the Executive for all such expenses
upon presentation by the Executive from time to time of an itemized account of
such expenditures in accordance with the Company's procedures in effect at the
commencement of the Employment Term.
9. EMPLOYEE BENEFITS
9.1 In addition to the Plans as specified in Section 3.1, the
Executive shall be included to the extent eligible thereunder under any and all
plans providing benefits for its senior executives.
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9.2 The Executive shall be included in all incentive, profit
sharing, bonus, stock option, or other similar or comparable plans applicable to
senior executives of the Company in accordance with the terms thereof.
10. NO OBLIGATION TO MITIGATE DAMAGES - NON-COMPETE
10.1 The Executive shall not be required to mitigate damages
or the amount of any payment provided for under this Agreement by seeking other
employment or otherwise, nor shall the amount of any payment provided for under
this Agreement be reduced by any compensation earned by the Executive as the
result of employment by another employer after the termination of his employment
hereunder or otherwise.
10.2 In the event that the Executive should terminate his
employment other than for Good Reason and subsequently directly or indirectly
enters into competition with the Company prior to the end of the Employment Term
the Executive shall not be entitled to any payments pursuant to this Agreement
(and shall return any payments so made) after such termination of his
employment.
11. TAX GROSS-UP PAYMENT
11.1 If any payments under this Agreement or any other
payments or benefits received or to be received by the Executive (whether
pursuant to the terms of
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this Agreement or any other plan, arrangement or agreement with the Company)
(the "Severance Payments"), will be subject to the tax (the "Excise Tax")
imposed by section 4999 of the Internal Revenue Code (the "Code") (or any
similar tax that may hereafter be imposed), the Company shall pay at the time
specified below, an additional amount (the "Gross-Up Payment") such that the net
amount retained by the Executive, after deduction of any Excise Tax on the
Severance Payments and any federal, state and local income tax and Excise Tax
upon the payment provided for by this Section 11, shall be equal to the
Severance Payments. For purposes of determin ing whether any of the Severance
Payments will be subject to the Excise Tax and the amount of such Excise Tax,
(a) all Severance Payments shall be treated as "parachute payments" within the
meaning of section 28OG(2) of the Code, and all "excess parachute payments"
within the meaning of section 28OG(b)(1) shall be treated as subject to the
Excise Tax, unless in the opinion of tax counsel selected by the Company's
independent auditors and acceptable to the Executive such Severance payments (in
whole or in part) do not constitute parachute payments, or such excess parachute
payments (in whole or in part) represent reasonable compensation for services
actually rendered within the meaning of section 28OG(b)(4) of the Code in excess
of the base amount within the meaning of section 28OG(b)(3) of the Code, or are
otherwise not subject to the Excise Tax, (b) the amount of the Severance Pay-
ments which shall be treated as subject to the Excise Tax shall be equal to the
lesser
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of (1) the total amount of the Severance Payments or (2) the amount of excess
parachute payments within the meaning of section 28OG(b)(1) (after applying
clause (a), above), and (c) the value of any non-cash benefits or any deferred
payment or benefit shall be determined by the Company's independent auditors in
accordance with the principles of section 28OG(d)(3) and (4) of the Code. For
purposes of determining the amount of the Gross-Up Payment, the Executive shall
be deemed to pay federal income taxes at the highest marginal rate of federal
income taxation in the calendar year in which the Gross-Up Payment is to be made
and state and local income taxes at the highest marginal rate of taxation in the
state and locality of the Executive's residence on the Termination Date, net of
the maximum reduction in federal income taxes which could be obtained from
deduction of such state and local taxes. In the event that the Excise Tax is
subsequently determined to be less than the amount taken into account hereunder
at the time of termination of the Executive's employment, the Executive shall
repay to the Company at the time that the amount of such reduction in Excise Tax
is finally determined the portion of the Gross-Up Payment attributable to such
reduction (plus the portion of the Gross-Up Payment attributable to the Excise
Tax and federal and state and local income tax imposed on the Gross-Up Payment
being repaid by the Executive if such repayment results in a reduction in Excise
Tax and/or a federal and state and local income tax deduction) plus interest on
the amount of such repayment at the rate provided in section
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1274(2)(B) of the Code. In the event that the Excise Tax is determined to exceed
the amount taken into account hereunder at the time of the termination of the
Executives employment (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Gross-Up Payment), the
Company shall make an additional gross-up payment in respect of such excess
(plus any interest payable with respect to such excess) at the time that the
amount of such excess is finally determined. Any payment to be made to the
Executive under this Section shall be payable within five (5) days of his
Termination Date.
12. NOTICES
12.1 All notices or communications hereunder shall be in
writing, addressed as follows:
To the Company:
Handy & Xxxxxx
000 Xxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: The Secretary
To the Executive:
Xxxxxxx X. Xxxxxx
00 Xxxxxxxx Xxxxx
Xxxxxxxxxx Xxxxx, XX 00000
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Any such notice or communication shall be sent by certified or registered mail,
return receipt requested, postage prepaid, addressed as above (or to such other
address as such party may designate in writing from time to time), and the
actual date of receipt, as shown by the receipt therefor, shall determine the
time at which notice was given.
13. SEPARABILITY; LEGAL FEES
13.1 If any provision of this Agreement shall be declared to
be invalid or unenforceable, in whole or in part, such invalidity or
unenforceability shall not affect the remaining provisions hereof which shall
remain in full force and effect. The Company shall pay all legal fees and other
fees and expenses which the Executive may incur in obtaining compensation or
other benefits under this Agreement; provided, however, that the Company shall
not pay such fees and expenses if the Company prevails against the Executive
unless there shall have been a Change in Control prior to the Executive's
termination.
14. ASSIGNMENT
14.1 This Agreement shall be binding upon and inure to the
benefit of the heirs and representatives of the Executive and the assigns and
successors of the
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Company, but neither this Agreement nor any rights hereunder shall be assignable
or otherwise subject to hypothecation by the Executive or by the Company.
15. ENTIRE AGREEMENT
15.1 This Agreement represents the entire agreement of the
parties and shall supersede any and all previous contracts, arrangements or
understandings between the Company and the Executive with respect to the subject
matter hereof. No provision of this Agreement shall be construed to limit any
rights which the Executive may have under any of the Company's benefit plans.
The Agreement may be amended at any time by mutual written agreement of the
parties hereto.
16. GOVERNING LAW
16.1 This Agreement shall be construed, interpreted, and
governed in accordance with the laws of the State of New York.
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IN WITNESS WHEREOF, the Company has caused this Agreement to
be duly executed and the Executive has hereunto set his hand, as of the 1st day
of May, 1989.
Dated: Sept. 28, 1989 HANDY & XXXXXX
ATTEST: By: _______________________
Group Vice President
/s/ Xxxxxx X. Xxxxx /s/ X.X. Xxxxxx
---------------------------- ------------------------
Secretary Executive
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