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Exhibit 10.10.2
As of January 9, 1997
▇▇. ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Dear ▇▇. ▇▇▇▇▇▇▇▇:
Reference is made to that certain letter agreement ("Termination
Agreement") dated March 24, 1993, as amended by the letter agreement dated as
of April 14, 1993, between you and TCC Industries, Inc., which makes certain
provisions in the event of the termination of your employment with the Company
(the "Company"). To provide you with further incentive to continue serving as
chief executive officer of the Company, the Board of Directors of the Company
has authorized certain modifications to the Termination Agreement, which are as
follows:
A. Paragraph numbered 1 of the Termination Agreement is amended so as to
read as follows:
"1. In the event that you terminate your employment with the Company
as a result of one or more of the following events (collectively, the
"Terminating Events" and each a "Terminating Event"): (i) a Change in
Control of the Company as defined in paragraph 6, below; (ii) a Change of
Circumstances of either you or the Company as defined in paragraph 7,
below; (iii) the Company ceases to do business; (iv) in the event (an
"Insolvency Event") of the Company's bankruptcy, insolvency or any
assignment for the benefit of creditors, or any other act by the Company
to take advantage of any law providing for relief to debtors, provided
that you terminate your employment with the Company within one year of the
occurrence of one or more of the Terminating Events, you will be entitled
to: (x) a lump-sum payment (the "Special Severance Payment") equal to the
sum of (A) the highest one month's base salary in effect during the three
year period immediately preceding such termination, multiplied by the
number of full years you have then been employed by the Company or any
affiliate of the Company, (B) any bonuses accrued but unpaid as of the
effective date of termination, including, without limitation, an amount
equal to (i) the amount that would have been earned under the TCC
Industries, Inc. Annual Incentive Plan, as amended from time to time (the
"AIP"), for the fiscal year in which such termination occurs had the
Incentive Award (as defined in the AIP) for that year not been subject to
being forfeited due to termination, i.e., you will be considered to have
been employed for the entire such year, (ii) multiplied by a fraction the
numerator of which is the number of days elapsed in such calendar year as
of the date of such termination, and the denominator of which is 365 (such
amount to be paid in the first quarter of the calendar year following the
year in which such termination occurs), and (C) any other compensation
owed to you by the Company as of the effective date of termination, and (y)
fringe benefits for a period of one year following
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such termination, such as health insurance, auto allowance, any premiums
becoming due during such one year period with respect to any life
insurance policy on your life for which the Company or an affiliate of the
Company has previously made the premium payments, and payment for any
unpaid vacation not taken and accrued as of such termination. Upon any
such termination the Company shall take such action and otherwise
cooperate with you in promptly causing the (1) beneficiary of such life
insurance policy to be changed from the Company to someone designated by
you, and (2) ownership of any such life insurance policy to be transferred
to you, including the right to designate the beneficiary. In addition, any
portion of any stock options granted by the Company which have not then
vested shall become exercisable in full for a period of six months
following the effective date of termination, or such lesser period as the
option would have been exercisable had your employment with the Company
not been terminated. Notwithstanding the foregoing, if the only
Terminating Event that occurs is a Terminating Event specified in clause
(iv) (relating to an Insolvency Event), then upon the voluntary
termination by you of your employment as a result of such Insolvency
Event, you shall be entitled to only one-half of the payments and benefits
provided for in clauses (x) and (y) above. To the extent necessary, this
letter shall constitute an amendment to any stock options granted to you
by the Company such that the vesting and exercise provisions thereof shall
be consistent with the first sentence of this paragraph 1. In the event of
the occurrence of any of the Terminating Events and the voluntary
termination of your employment by you within one (1) year of such
Terminating Event you shall be deemed to have terminated your employment
as a result of such Terminating Event; provided that if the Terminating
Event specified in clause (iv) (being an Insolvency Event) occurs and one
of the other Terminating Events specified in clauses (i), (ii) or (iii)
also occurs, you shall be deemed to have terminated your employment as a
result of such clause (i), (ii) or (iii), and not clause (iv)."
B. Paragraph numbered 2 of the Termination Agreement is amended so as to
read as follows:
"2. In the event that your employment with the Company is terminated by or
at the instance of the Company at any time and for any reason other than for
Cause, as defined in paragraph numbered 8 below, you will be entitled to the
Special Severance Payment, together with (a) fringe benefits for a period of
one (1) year following any termination as referenced in (y) in paragraph
numbered 1 above, (b) the assignment of life insurance policies and benefits
described in paragraph 1 above, and (c) the acceleration of vesting and
extension of date for exercise of stock options as described in paragraph
numbered 1 above."
C. Paragraph numbered 3 of the Termination Agreement is amended so as to
read as follows:
"3. The Company shall pay the Special Severance Payment to you within
fifteen calendar days of the effective date of your termination pursuant to
paragraph numbered 1 or paragraph numbered 2, whichever is applicable."
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D. Paragraph numbered 4 of the Termination Agreement is amended so as to
read as follows:
"4. As a condition to the Company's obligation to pay the Special
Severance Payment in the event of the voluntary termination by you of your
employment with the Company pursuant to paragraph numbered 1, you shall provide
written notice to the Company specifying the (i) effective date of the
termination, and (ii) which of the Terminating Events constitutes a reason for
your voluntary termination."
E. Paragraph numbered 5 of the Termination Agreement is amended so as to
read as follows:
"5. The obligations of the Company under this letter agreement are
undertaken in consideration of your many years of service to the Company and in
order to induce you to continue those services to the Company, and shall not
expire until the Company shall have paid and performed each of its obligations
to you following any termination of your employment, regardless of when such
termination occurs. The parties acknowledge that this letter agreement is
intended to be construed broadly and liberally in order to confer upon you the
specified benefits in the event of the termination of your employment."
F. Paragraph numbered 6 of the Termination Agreement is amended so as to
read as follows:
"6. Change in Control means: (i) the election of one or more individuals
to the Board of Directors of the Company which results in one-third or
more of the Directors of the Company being individuals who have not served
as Directors for at least two years, unless such individuals have been
elected or nominated as Directors by at least two-thirds of the Directors
of the Company who have served for at least two years (or if you serve on
the Board, by a simple majority, along with your vote in favor); (ii) the
election of one or more individuals to the Board of Directors of the
Company which results in a majority of the Directors of the Company being
persons who are not Directors of the Company on January 9, 1997, (iii) the
sale or other disposition (whether directly or indirectly, and whether by
way of merger, consolidation, sale of assets or sale of stock of any
entity affiliated with the Company) by the Company of both A.L. Investors,
Inc. and ▇▇▇▇▇ Machine Company (subsidiaries of the Company), or the sale
of all or substantially all of the assets of the Company, to any person
(as such term is defined in the Securities Exchange Act of 1934), the
consolidation of the Company with any person, or the merger of the Company
with any person, as a result of which consolidation or merger the Company
or an affiliate of the Company, as of the date of this letter agreement,
is not the surviving entity; (iv) the sale or transfer of the common
stock of the Company and/or any one or more of its shareholders, in one or
more related or unrelated transactions, to one or more persons under
circumstances whereby any person and its "affiliates" (as hereinafter
defined) shall together own, after such
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sales and transfers, at least one-fourth of the outstanding shares, unless
such sale or transfer has been approved in advance by three-fourths of the
Directors of the Company who have been Directors of the Company for at
least two years (or if you serve on the Board, by a simple majority of
such Directors, along with your vote in favor); (v) the sale or transfer
by the Company and/or one or more of its shareholders, in one or more
related or unrelated transactions, to one or more persons under
circumstances whereby any person and its affiliates shall own, after such
sale or transfer, in excess of one-half of the outstanding shares of the
Company; (vi) the issuance by the Company, in a single transaction or a
series of related transactions including a merger or consolidation in
which the Company is the surviving entity, of shares which constitute more
than one-half of the shares of the Company, outstanding immediately prior
to the first such transaction; or (vii) the liquidation of the Company. As
used in this letter, an "affiliate" shall mean any person that, directly
or indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, any other person or who,
by agreement (whether written or oral), is acting in concert with any such
person."
G. Paragraph numbered 7 of the Termination Agreement is amended so that
the reference in said Paragraph to the "Dallas metropolitan area" shall
instead be to the "Austin metropolitan area".
H. The Termination Agreement is amended by adding thereto a new paragraph
numbered 11, which reads as follows:
"11. The obligations of the Company to you under this letter agreement
shall be independent of, and shall not be subject to, any condition,
obligation or offset except as expressly set forth in this letter
agreement. In particular, any obligation of the Company to pay any amount
of money to you shall not be subject to offset against any liability or
amount owed by you to the Company, except to the extent that either (i)
you consent to the offset in writing at the time of the offset, (ii) the
amount so offset has been reduced to final, nonappealable, judgment in
favor of the Company against you in a court having jurisdiction or (iii)
such liability or amount is owed by you to the Company as a result of a
breach by you of any of your fiduciary duties to the Company. If any legal
action or other proceeding, including an arbitration proceeding instituted
pursuant to the next succeeding sentence, is brought for the enforcement
of this letter agreement, or because of an alleged dispute, breach,
default or misrepresentation in connection with any of the provisions of
this letter agreement, the successful or prevailing party will be entitled
to recover reasonable attorney's fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it or he
may be entitled. Except in connection with seeking injunctive relief to
which any party hereto may reasonably believe it or he is entitled
hereunder, or as otherwise expressly provided for by this letter
agreement, any dispute, controversy or claim arising out of or relating to
this letter agreement, or the breach, termination or invalidity thereof,
shall be settled by arbitration in accordance with the commercial
arbitration rules of the American Arbitration Association as then in
effect; provided, that the place of the arbitration shall
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be Austin, Texas. Any award or determination entered in any arbitration
initiated pursuant to this letter agreement shall be binding and
conclusive on the parties, and shall be enforceable in any court having
jurisdiction with respect to the matter. If it is ultimately determined in
any such proceeding that the Company wrongfully withheld payment of any
portion of the Special Severance Payment or other obligation of the
Company to you under this letter agreement prior to such determination,
then you shall be entitled to recover from the Company an amount equal to
18% per annum on such amount, from the date such amount should have been
paid until it is paid, and such recovery shall be in addition to such
other sums to which you are entitled hereunder. Unless otherwise provided
above, each Party shall pay its or his own expenses incurred in connection
with a proceeding pursuant to this paragraph numbered 11."
If you are in agreement with the foregoing, please so indicate by signing
the enclosed copy of this letter and returning the same to the undersigned.
TCC Industries, Inc.
By: /s/ ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
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Its: Secretary
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Agreed to as of the date of this letter.
/s/ ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇
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