EXHIBIT 10.32
SECOND AMENDED AND RESTATED
SALARY CONTINUATION AND RETIREMENT BENEFIT AGREEMENT
THIS AGREEMENT is amended and restated as of the 30th day of June, 2000
(the "Effective Date"), by and between DEVCON INTERNATIONAL CORP., a Florida
corporation (the "Company"), and XXXXXX X. XXXXX, XX., an individual residing in
Palm Beach County, Florida (the "Employee").
RECITATIONS
WHEREAS the Company and the Employee entered into a Stock Retirement
and Salary Continuation Agreement dated June 1974 (the "Retirement Agreement");
and
WHEREAS the Company and the Employee amended and restated the
Retirement Agreement pursuant to a Life Insurance and Salary Continuation
Agreement by and between the Company and the Employee dated March 29, 1989 (the
"Life Insurance and Salary Continuation Agreement"); and
WHEREAS the Company and the Employee wish to recognize the
contributions by the Employee to the Company and to provide an additional
incentive to retain the Employee, upon whose services, effort, and judgment the
success of the Company is in part dependent; and
WHEREAS the Company and the Employee therefore wish to amend and
restate the Life Insurance and Salary Continuation Agreement as the Salary
Continuation and Retirement Benefit Agreement so as to provide the Employee with
a Retirement Benefit, and to provide the Surviving Spouse of the Employee with a
Survivor Benefit in accordance with the terms set forth herein.
AGREEMENT
NOW, THEREFORE, in consideration of the foregoing, of the mutual
promises hereinafter set forth and of other good and valuable consideration, the
sufficiency of which is hereby acknowledged, the parties hereto, intending to be
legally bound, hereby amend and restate the Life Insurance and Salary
Continuation Agreement as the Salary Continuation and Retirement Benefit
Agreement (the "Agreement"), and agree as follows:
Section 1. Salary Continuation Death Benefit. If the Employee shall
cease to be employed by the Company as a result of his Disability (as defined
below) or death, the Company shall pay monthly payments (as calculated below) as
provided herein for a period of sixty (60)
consecutive months, commencing on the first day of the calendar month coinciding
with or immediately following the date the Employee's employment is terminated
by reason of his Disability or death. For purposes of this Agreement, Disability
shall be defined to mean the Employee's permanent mental or physical disability
as determined by a licensed medical physician satisfactory to the Company. The
amount of each monthly payment shall be equal to the sum of (i) the Employee's
monthly salary for the last full month immediately preceding the month the
Employee's employment is terminated, and (ii) one-twelfth of the Employee's
annual bonus in the calendar year immediately preceding such termination. The
monthly payments shall be paid to the Employee, or if the Employee should die
before all of the payments required under this provision have been made, to the
beneficiary or beneficiaries designated by the Employee by written notice to the
Company, or if no beneficiary has been designated or then shall be living, to
the Employee's estate.
Section 2. Retirement Benefits.
(a) If the Employee's employment with the Company terminates on or
after the earlier of (i) March 31, 2003, or (ii) the date on which a Change in
Control of the Company occurs, and such termination is for any reason other than
the death or Disability (as defined in Section 1 hereof) of the Employee, then
the Company shall pay the Employee a monthly retirement benefit (the "Retirement
Benefit") equal to seventy-five percent (75%) of the Employee's highest monthly
base salary during the twenty-four-month period immediately preceding the date
on which the Employee's employment terminates (the "Retirement Date"). Payment
of the Retirement Benefit shall commence on the first day of the calendar month
coinciding with or immediately following the Employee's Retirement Date and
shall continue with the final payment being due on the first day of the calendar
month coinciding with or immediately preceding the date of the Employee's death.
(b) In the event that the Employee dies after his Retirement Date
and is survived by a spouse to whom he was married on his Retirement Date (the
"Surviving Spouse"), then the Company shall pay the Surviving Spouse a monthly
benefit equal to one hundred percent (100%) of the Employee's highest monthly
base salary during the twenty-four-month period immediately preceding his
Retirement Date (the "Survivor Benefit"). The Survivor Benefit shall be payable
to the Surviving Spouse on a monthly basis commencing on the first day of the
month immediately following the date on which the Employee dies and continuing
with the final payment being due on the earlier of (i) the first day of the
sixtieth calendar month following the date on which the Employee dies, or (ii)
the first day of the calendar month coinciding with or immediately preceding the
date of the Surviving Spouse's death.
(c) For the purposes of this Agreement, the term "Change in
Control" shall mean:
(i) Approval by the shareholders of the Company of a
reorganization, merger, consolidation or other form of corporate transaction or
series of transactions, in each case, with respect to which persons who were the
shareholders of the Company immediately
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prior to such reorganization, merger or consolidation or other transaction do
not, immediately thereafter, own more than fifty percent (50%) of the combined
voting power entitled to vote generally in the election of directors of the
reorganized, merged or consolidated company's then outstanding voting
securities, in substantially the same proportions as their ownership immediately
prior to such reorganization, merger, consolidation or other transaction, or a
liquidation or dissolution of the Company or the sale of all or substantially
all of the assets of the Company (unless such reorganization, merger,
consolidation or other corporate transaction, liquidation, dissolution or sale
is subsequently abandoned); or
(ii) Individuals who, as of the Effective Date,
constitute the Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board, provided that any person becoming a director
subsequent to the Effective Date whose election, or nomination for election by
the Company's shareholders, was approved by a vote of at least a majority of the
directors then comprising 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, for purposes of this Agreement, considered
as though such person were a member of the Incumbent Board; or
(iii) The acquisition (other than from the Company)
by any person, entity or "group", within the meaning of Section 13(d)(3) or
14(d)(2) of the Securities Exchange Act, of beneficial ownership (within the
meaning of Rule 13-d promulgated under the Securities Exchange Act) of more than
twenty-five percent (25%) of either the then outstanding shares of the Company's
Common Stock or the combined voting power of the Company's then outstanding
voting securities entitled to vote generally in the election of directors
(hereinafter referred to as the ownership of a "Controlling Interest")
excluding, for this purpose, any acquisitions by (1) the Company or its
Subsidiaries, (2) any person, entity or "group" that as of the Effective Date
owns beneficial ownership (within the meaning of Rule 13d-3 promulgated under
the Securities Exchange Act) of a Controlling Interest, or (3) any employee
benefit plan of the Company or its subsidiaries.
Section 3. Claims Procedure. In the event that any Employee or any
beneficiary claims to be entitled to benefits under this Agreement and the
Company determines that such claim should be denied in whole or in part, the
Company shall, in writing, notify such claimant within ninety (90) days of
receipt of such claim that his claim has been denied, setting forth the specific
reasons for such denial. Such notification shall be written in a manner
reasonably expected to be understood by such Employee or any beneficiary and
shall set forth the pertinent sections of the Agreement relied on, and where
appropriate, an explanation of how the claimant can obtain review of such
denial. Within sixty (60) days after the mailing or delivery by the Company of
such notice, such claimant may request, by mailing or delivery of written notice
to the Company, a review and/or hearing by the Company of the decision denying
the claim. If the claimant fails to request such a review and/or hearing within
such sixty (60) day period, it shall be conclusively determined for all purposes
of this Agreement that the denial of such claim by the Company is correct. If
such claimant requests a hearing within such sixty (60) day period,
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the Company shall designate a time (which time shall not be less than seven (7)
nor more than sixty (60) days from the date of such claimant's notice to the
Company) and a place for such hearing, and shall promptly notify such claimant
of such time and place. A claimant or his authorized representative shall be
entitled to inspect all pertinent documents and to submit issues and comments in
writing. If only a review is requested, the claimant shall have sixty (60) days
after filing a request for review to submit additional written material in
support of the claim. After such review and/or hearing, the Company shall
promptly determine whether such denial of the claim was correct and shall notify
such claimant in writing of its determination with sixty (60) days after such
review and/or hearing or after receipt of any additional information submitted.
Section 4. Unfunded Arrangement. The obligations of the Company under
this Agreement shall be paid from the general assets of the Company and not from
any particular fund. It is intended that this arrangement shall constitute an
"unfunded" arrangement for a select group of management or highly compensated
employees under the Employee Retirement Income Security Act of 1974, as amended.
Any assets acquired by the Company relating to this arrangement shall be subject
to the claims of the Company's creditors, shall be considered general assets of
the Company and shall not be subject to any claims by the Employee or any
beneficiary thereof. Nothing contained in this Agreement shall be interpreted to
grant to any Employee or any beneficiary, any right, title or interest in any
assets of the Company, and the Employee and any beneficiaries shall be unsecured
general creditors of the Company with respect to any rights they may have to
benefits under the Agreement.
Section 5. Notices. All notices under this Agreement shall be in
writing and shall be given by personal delivery, by telegram, or by registered
or certified mail, postage prepaid, return receipt requested, to the parties at
the addresses as follows (or at such other address as any of the parties may
hereafter specify in writing from time to time):
To the Company: Devcon International Corp.
0000 X. Xxxxxxx Xxxxxx Xxxxx
Xxxxx 000
Xxxxxxxxx Xxxxx, Xxxxxxx 00000
Attention: Chief Financial Officer
To the Employee: Xxxxxx X. Xxxxx, Xx.
0000 Xxxxxxx Xxxxx Xxxx
Xxxx Xxxxx, Xxxxxxx 00000
Notices, if personally delivered, shall be deemed to have been received on the
date delivered; if by telegram, on the date sent; and if given by registered or
certified mail, on the third business day after mailed.
Section 6. Withholding Taxes. The Company shall withhold from any and
all payments made by the Company pursuant to this Agreement an amount that shall
satisfy the
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Company's legal obligation to withhold any and all appropriate federal, state,
and local taxes, including without limitation those taxes imposed upon the
Employee by the Federal Insurance Contributions Act ("FICA"), as applicable to
any and all payments made by the Company pursuant to this Agreement.
Section 7. Certain Additional Payments by the Company. Anything in this
Agreement to the contrary notwithstanding, in the event it shall be determined
that any payment, distribution or other action by the Company to or for the
benefit of the Employee (whether paid or payable or distributed or distributable
pursuant to the terms of this Agreement or otherwise, (including any additional
payments required under this Section 7) (a "Payment") would be subject to an
excise tax imposed by Section 4999 of the Internal Revenue Code of 1986, as
amended (the "Code"), or any interest or penalties are incurred by the Employee
with respect to any such excise tax (such excise tax, together with any such
interest and penalties, are hereinafter collectively referred to as the "Excise
Tax"), the Company shall make a payment to the Employee (a "Gross-Up Payment")
in an amount such that after payment by the Employee of all taxes (including any
Excise Tax) imposed upon the Gross-Up Payment, the Employee retains (or has had
paid to the Internal Revenue Service on his behalf) an amount of the Gross-Up
Payment equal to the sum of (x) the Excise Tax imposed upon the Payments and (y)
the product of any deductions disallowed because of the inclusion of the
Gross-Up Payment in the Employee's adjusted gross income and the highest
applicable marginal rate of federal income taxation for the calendar year in
which the Gross-Up Payment is to be made. For purposes of determining the amount
of the Gross-Up Payment, the Employee shall be deemed to (i) pay federal income
taxes at the highest marginal rates of federal income taxation for the calendar
year in which the Gross-Up Payment is to be made, and (ii) pay applicable state
and local income taxes at the highest marginal rate of taxation for the calendar
year in which the Gross-Up Payment is to be made, net of the maximum reduction
in federal income taxes which could be obtained from deduction of such state and
local taxes.
Section 8. Governing Law. This Agreement shall be governed by and
construed and interpreted in accordance with the laws of the State of Florida
without regard to its conflicts or choice of laws.
Section 9. Entire Agreement. This Agreement constitutes the entire
agreement among the parties with respect to the subject matter hereof and
supersedes all prior agreements, under-standings, negotiations and discussions,
both written and oral, between or among the parties hereto with respect to such
subject matter. This Agreement may not be amended or modified in any way except
by a written instrument executed by both parties.
Section 10. Benefits; Binding Effect. This Agreement shall be for the
benefit of, and shall be binding upon, the parties hereto and their respective
heirs, personal representatives, executors, legal representatives, successors
and assigns.
Section 11. No Waivers. The waiver by any party hereto of the other
party's prompt and complete performance, or breach or violation of any provision
of this Agreement shall not
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operate as, nor be construed to be, a waiver of any subsequent breach or
violation, and the waiver by any party hereto to exercise any right or remedy
that he or it may possess shall not operate as, nor be construed to be, the
waiver of such right or remedy by the other party or a bar to the exercise of
such right or remedy by such party upon the occurrence of any subsequent breach
or violation.
Section 12. Severability. The invalidity of any provisions of this
Agreement shall not affect the enforceabi1ity of the remaining provisions of
this Agreement or any part hereof, all of which are inserted conditionally on
their being valid in law, and, in the event that a provision of this Agreement
shall be declared invalid by a court of competent jurisdiction, this Agreement
shall be construed as if such invalid provision had not been inserted.
Section 13. Section Headings; Other. The section and other headings
contained in this Agreement are for reference purposes only and shall not affect
in any way the meaning or interpretation of any or all of the provisions of this
Agreement.
Section 14. Attorneys' Fees. In the event of any litigation arising out
of or relating to this Agreement, the prevailing party shall be entitled to
recover all costs and expenses incurred therein, including, without limitation,
reasonable attorneys' fees and costs, including appellate attorneys' fees and
costs and other fees and costs resulting from any action to confirm the award or
enforce the judgment resulting therefrom, and such costs, expenses and fees
shall be included in and made a part of any judgment or award rendered in such
litigation.
Section 15. Counterparts. This Agreement may be executed in any number
of counterparts and by the separate parties hereto in separate counterparts, all
of which shall be deemed to be an original and one and the same instrument.
[The signature page follows.]
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IN WITNESS WHEREOF, each of the undersigned has executed as of the day
first written above.
THE COMPANY:
DEVCON INTERNATIONAL CORP.
By: /S/ XXXXXXX X. XXXXXXX
-----------------------------
Xxxxxxx Xxxxxxx,
Executive Vice President
THE EMPLOYEE:
By: /S/ XXXXXX X. XXXXX, XX.
-----------------------------
Xxxxxx X. Xxxxx, Xx.
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