EXHIBIT 10.8
EMPLOYMENT AGREEMENT
Agreement dated June 1, 1995, between XXXX X. XXXXXX, XX. (the "Executive")
and COLTEC INDUSTRIES INC, a Pennsylvania corporation (the "Corporation").
WHEREAS, the Executive and the Corporation desire to set forth the terms
and conditions upon which the Executive shall be employed by the Corporation.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
herein contained, the parties agree as follows:
1. EMPLOYMENT TERM
The Corporation agrees to employ the Executive and the Executive agrees to
be employed by the Corporation, upon the terms and conditions contained in
this Agreement, for a period of five years commencing on the date hereof
and terminating on the fifth anniversary of the date hereof (the "Contract
Period"). The Contract Period shall be subject to earlier termination in
accordance with the provisions set forth in Section 6 below.
2. DUTIES
2.1 The Executive shall serve, subject to the supervision and control of the
Board of Directors of the Corporation (the "Board"), as Chairman of the
Board, President and Chief Executive Officer of the Corporation with the
responsibilities and authority, and status and perquisites which have
consistent with past practice, been delegated or granted by the Corporation
to its Chairman, President and Chief Executive Officer or are customarily
delegated or granted by similarly situated corporations to an employee
holding these positions. If Executive is appointed to additional offices
by the Corporation during the Contract Period, the Executive shall have the
responsibilities and authority, and status and perquisites consistent with
the past practices of the
Corporation or which are customarily delegated or granted by similarly
situated corporations to an employee holding such positions.
2.2 Executive agrees that during the Contract Period, he shall devote
substantially all of his full working time and attention and give his best
effort, skill and abilities exclusively to the business and interests of
the Corporation; provided, however, that the foregoing shall not be
construed to prohibit Executive's service as a (i) director or officer of
any trade association, civic, educational or charitable organization or
governmental entity or, subject to approval by the Board, as (ii) a
director of any corporation which is not a competitor of the Corporation,
provided that such service by Executive does not materially interfere with
the performance by Executive of the responsibilities delegated under
Section 2.1 above.
2.3 Executive shall carry out all responsibilities delegated in Section 2.1
above at the Company's headquarters at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx,
or at such other office or location within the New York metropolitan area
as the Board may, from time to time, deem appropriate after consultation
with Executive, except for travel reasonably required in the performance of
Executive's responsibilities.
3. COMPENSATION AND BENEFITS
Throughout the term hereof, unless otherwise specifically provided
elsewhere herein:
3.1 Executive shall receive an annual salary which is not less than his annual
salary on the date of this Agreement and shall have the opportunity for
periodic increases in accordance with the Corporation's regular practices.
3.2 Executive shall be entitled to participate, to the extent determined by the
Board, in all currently existing and future incentive compensation plans of
the Corporation including, but not limited to: the Annual Incentive Plan
for Certain Employees of Coltec Industries Inc and Its Subsidiaries, the
1994 Long-Term Incentive Plan of Coltec Industries Inc, and the Coltec
Industries Inc 1992 Stock Option and Incentive Plan
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(the "Incentive Compensation Plans"); provided, however, that the
Executive's participation in all incentive compensation plans shall be at a
level customarily approved by the Board for an employee with Executive's
responsibilities and shall not in any case be less than Executive's level
of participation in such plans on the date of this Agreement. Any payout
to Executive under an Incentive Compensation Plan shall be calculated and
made in accordance with the provisions of the respective plan, except as
elsewhere provided for in this Agreement.
3.3 Executive shall be entitled to receive all employee benefits, fringe
benefits and perquisites (including but not limited to the use of company
cars and limousines, club memberships and financial planning services
("Company Perquisites")) customarily made available to an employee with
Executive's responsibilities, and Executive shall be entitled to
participate in all applicable group, life, health, disability and accident
insurance plans and programs including, and not limited to, the Retirement
Savings Plan, the Retirement Program, Benefits Equalization Plan (the "BE
Plan") and Family Protection Plan as well as any other applicable
Corporation benefit plans and programs maintained currently upon terms and
at levels no less favorable than now exist or that shall be established or
maintained in the future for employees generally or for Corporation
executives.
3.4 Executive shall be entitled to annual vacation and holidays in accordance
with the Corporation's established practice for its employees.
3.5 The Executive shall be entitled to receive reimbursement for all reasonable
out-of-pocket expenses incurred in performing his responsibilities
delegated in Section 2.1 above, provided that the Executive properly
accounts for such expenses in accordance with the Corporation's established
policies and the requirements of the Internal Revenue Code of 1986, as
amended.
4. INDEMNIFICATION
The Executive shall be entitled to indemnification by the Corporation to
the fullest extent permitted by law in respect
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of any actions or omissions which Executive has taken or has failed to take
as an employee, officer or director of the Corporation while carrying out
the responsibilities delegated under Section 2.1 above.
5. MANAGEMENT OF THE CORPORATION
During the Contract Period and subject to its fiduciary duties, the Board
shall not interfere with Executive's responsibilities in connection with
the normal day-to-day management of the Corporation's business matters and
will involve Executive, as a director, in determining the strategic
direction of the Corporation consistent with the Board's past practice and
its fiduciary duties to management and the Corporation's shareholders.
6. TERMINATION OF EMPLOYMENT
The Contract Period shall terminate prior to its term on the Date of
Termination as defined in Sections 6.2 and 6.3 below, following receipt by
the Executive or the Corporation, as the case may be, of a Notice of
Termination, as defined in Section 6.1 below.
6.1 "Notice of Termination" shall mean any purported termination of Executive's
employment by the Corporation or by Executive which shall be communicated
by written notice to the other party hereto in accordance with Section 9 of
this Agreement, and which shall (1) indicate the specific termination
provision in this Agreement relied upon, (2) set forth in reasonable detail
the facts and circumstances claimed to provide a basis for termination of
Executive's employment under the provision so indicated, and (3) set forth
the date on which the Executive's employment with the Corporation shall
terminate.
6.2 "Date of Termination" shall mean:
(a) thirty (30) days after Notice of Termination is given for termination
of employment due to Disability; provided that Executive shall not
have returned to the full-time performance of his duties during such
thirty (30) day period;
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(b) the date of death in the event of Executive's death;
(c) at least thirty days (30) but not more than sixty (60) days after
Notice of Termination is given for termination of employment for Good
Reason in respect of a termination covered by Sections 7.6 or 7.7
below;
(d) at least fifteen days (15) after Notice of Termination is given for
termination of employment for Cause;
(e) at least fifteen days (15) after Notice of Termination is given for
retirement after the age of 55 years but before the age of 65 years to
the extent such retirement is permitted under the Retirement Savings
Plan, the Retirement Program or the BE Plan ("Early Retirement"); or
(f) the date specified in the Notice of Termination for termination of
employment for any other reason.
6.3 This Agreement shall automatically terminate upon the earlier of
Executive's 65th birthday or the receipt by the Corporation of a Notice of
Termination for Early Retirement as provided in Paragraph 6.2(e) above
("Retirement Termination").
7. COMPENSATION UPON TERMINATION OR DURING DISABILITY
7.1 For purposes of this Agreement, "Disability", "Cause", "Good Reason" and
"Change-in-Control" shall have the meanings set forth below:
(a) DISABILITY - If, as a result of Executive's incapacity due to physical
or mental illness, Executive shall have become eligible for benefits
under the applicable long-term disability plan or policy of the
Corporation, Executive's employment may be terminated by the
Corporation for "Disability".
(b) CAUSE - Termination by the Corporation of Executive's employment for
"Cause" shall mean termination upon:
(i) the prolonged or repeated absence from duty without the consent
of the Board for reasons other than the
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Executive's incapacity due to physical or mental illness;
(ii) the acceptance by Executive of a position with another employer
which conflicts with his duties as an employee of the Corporation
without the consent of the Board;
(iii) the willful engaging by Executive in conduct relating to the
Corporation which is demonstrably and materially injurious to
the Corporation after a written demand for cessation of such
conduct is delivered to Executive by the Board, which demand
specifically identifies the manner in which the Board believes
the Executive has engaged in such conduct and the injury to the
Corporation;
(iv) a willful material breach of an established written policy or
procedure of the Corporation;
(v) Executive's conviction for a crime involving moral turpitude; or
(vi) the breach of Executive's Agreement set forth in Section 11.1
below.
For purposes of this Paragraph, no act, or failure to act, on
Executive's part shall be deemed "willful" unless knowingly done, or
omitted to be done, by Executive not in good faith and without
reasonable belief that Executive's action or omission was in the best
interests of the Corporation.
(c) GOOD REASON - Executive shall be entitled to terminate his employment
for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean the occurrence, without Executive's express written consent, of
any of the following circumstances unless such circumstances are fully
corrected prior to the Date of Termination (as defined in Section 6.2
above), specified in the Notice of Termination:
(i) the terms of this Agreement are materially
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adversely altered by action of the Corporation or the Corporation
breaches in any material respect any of its agreements set forth
herein;
(ii) the failure of the Corporation to obtain a satisfactory
agreement, required in Section 8 below, from any successor to
assume and perform this Agreement (a copy of the agreement
evidencing such assumption shall be provided by the Corporation
to Executive);
(iii) any purported termination of Executive's employment which is not
effected pursuant to a Notice of Termination satisfying the
requirements set forth in Section 6 above; for purposes of this
Agreement, no such purported termination shall be effective; or
(iv) Executive makes a determination in good faith that the cumulative
effect of actions by one or more of the members of the Board or
their agents or associates constitutes harassment or unreasonable
interference with the performance of Executive's day-to-day
duties under this Agreement (after a written demand for cessation
of such actions is delivered by Executive to the Board which
demand specifically identifies the manner in which Executive
believes that such Board members (or their agents or associates)
have harassed Executive or unreasonably interfered with
Executive's ability to perform his day-to-day duties); provided,
however, that appropriate involvement of Board members in regular
reviews of those items which have, consistent with the
Corporation's past practices, been normally within the purview of
the Board's responsibilities shall not be taken into account by
Executive in making his determination under this Agreement.
(v) Relocation of the Executive's place of employment to a location
outside New York City without the concurrence of Executive.
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Executive's right to terminate his employment pursuant to this
Paragraph shall not be affected by his incapacity due to physical
illness. In addition, Executive's continued employment with the
Corporation shall not constitute waiver of Executive's rights under
this Paragraph (c) nor constitute consent to any act or omission by
the Corporation constituting Good Reason.
(d) CHANGE-IN-CONTROL - A Change-in-Control shall be deemed to occur as of
the date on which any of the following occur:
(i) the acquisition, other than from the Corporation, by any
individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities and Exchange Act of 1934,
as amended (the "Exchange Act") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of
20 percent or more of either the then outstanding shares of
common stock of the Corporation or the combined voting power of
the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors; or
(ii) Individuals who, as of the date of this Agreement, constitute the
Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board, provided that any individual
becoming a director subsequent to the date hereof whose election,
or nomination for election by the Corporation's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual was a member of the Incumbent Board, but excluding,
for this purpose, any such 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
Corporation (as such terms are used in Rule 14a-11 of Regulation
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14A promulgated under the Exchange Act); or
(iii) Approval by the shareholders of the Corporation of (1) a
reorganization, merger or consolidation, in each case, with
respect to which the individuals and entities who were the
respective beneficial owners of the common stock and voting
securities of the Corporation immediately prior to such
reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation, beneficially own,
directly or indirectly, more than 50 percent of, respectively,
the then outstanding shares of common stock, and the combined
voting power of the then outstanding voting securities entitled
to vote generally in the election of directors, as the case may
be, of the corporation resulting from such reorganization, merger
or consolidation; (2) a complete liquidation or dissolution of
the Corporation; or of (3) the sale or other disposition of all
or substantially all of the assets of the Corporation.
7.2 During any period of Disability and until the earlier of the end of the
Contract Period or Executive's death, Executive shall receive all accrued
but unpaid salary plus all amounts or benefits payable or due to him
(including, but not limited to, a pro rata share under Incentive
Compensation Plans earned during the year in which the Disability occurs)
under the Corporation's compensation and benefit plans and programs in
which Executive is participating at the commencement of any such period,
plus an additional payment from the Corporation (if necessary) such that
the aggregate amount received by Executive in the nature of salary
continuation from all sources equals Executive's base salary at the rate in
effect at the commencement of any such period. Thereafter, Executive shall
be entitled to participate in all applicable group, life, Family Protection
Plan, health, disability and accident insurance plans and programs as well
as any other applicable Corporation benefit plans and programs (including,
but not limited to the 1992 Stock Option and Incentive Plan) in accordance
with the terms of such plans and programs; provided that such terms shall
not be less advantageous to Executive than the terms in effect as of the
date hereof.
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7.3 If Executive's employment shall be terminated by reason of Executive's
death, the Executive shall be entitled to the benefits provided below:
(a) The Corporation shall pay to Executive's estate as soon as practicable
after the date of Executive's death, Executive's full base salary
through the date of Executive's death, at the rate in effect at the
time of Executive's death, plus all other amounts to which Executive
is entitled under any benefit or compensation plan of the Corporation
(including, but not limited to, a pro rata share under Incentive
Compensation Plans earned during the year in which the Executive's
death occurs).
(b) After Executive's death, Executive's beneficiaries shall be entitled
to participate in all applicable group, life, health, disability and
accident insurance plans and programs as well as any other applicable
Corporation benefit plans and programs (including, but not limited to,
the 1992 Stock Option and Incentive Plan) in accordance with the terms
of such plans and programs.
7.4 If Executive's employment shall be terminated as a result of a Retirement
Termination or as a result of a voluntary resignation for other than Good
Reason ("Resignation"), then Executive shall receive all accrued but unpaid
salary plus all amounts payable to him under the Corporation's compensation
(including, but not limited to, a pro rata share under Incentive
Compensation Plans earned during the year the Retirement Termination or
Resignation occurs) and benefit plans and programs in which Executive is
participating at the time the Retirement Termination or Resignation becomes
effective. In the event of a Retirement Termination, Executive shall be
entitled to participate in all retirement and other plans and programs
effective on the Date of Termination to which he is eligible in accordance
with their terms.
7.5 If Executive's employment shall be terminated by the Corporation for Cause,
then Executive shall be entitled to the following benefits:
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(a) The Corporation shall pay Executive, Executive's full base salary
through the Date of Termination at the rate in effect at the time
Notice of Termination is given plus all other amounts to which
Executive is entitled under any benefit or compensation plan of the
Corporation, excluding any bonus, other incentive compensation and
vacation pay, if any, otherwise payable to Executive pursuant to the
terms of the applicable plan or program of the Corporation, at the
time such payments are due.
(b) Executive shall be entitled to participate in all applicable group,
life, health, disability and accident insurance plans and programs
only to the extent required by the terms of such plans, or to the
extent required by Federal or state law.
7.6 If Executive's employment shall be terminated (1) by the Corporation for
other than Cause, (2) by Executive for Good Reason other than Good Reason
as specified in Section 7.7 below ("Section 7.7 Good Reason") then
Executive shall be entitled to the following benefits:
(a) The Corporation shall pay Executive, as soon as practicable following
the date of termination a sum equal to Executive's full base salary
through the Date of Termination at the rate in effect at the time
Notice of Termination is given plus all other amounts to which
Executive is entitled under any benefit or compensation plan of the
Corporation (including but not limited to a pro rata share under
Incentive Compensation Plans earned during the year in which
employment is terminated).
(b) The Corporation shall pay Executive as soon as practicable following
the Date of Termination an additional payment equal to the sum of
Executive's full base salary plus the highest annual bonus received by
the Executive or by any individual serving as Chairman and CEO of the
Corporation during any of the three previous years multiplied by the
higher of three (3) or the number of years (including fractions
thereof) remaining under the Contract Period.
(c) At Executive's option and as soon as practicable after
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his request, the Corporation shall pay to Executive, a sum of money
equal to the value of Executive's accrued balance of the BE Plan.
(d) For the longer of three years from the Date of Termination or until
the end of the Contract Period the Corporation shall continue to make
available to Executive all Company Perquisites, or, in the
alternative, the Corporation shall pay to Executive as soon as
practicable after Date of Termination a sum of money reasonably
approximating the cash value of the Company Perquisites.
Additionally, for such period of time Executive shall, subject to
Section 7.9, be allowed to participate in all applicable group, life,
health, disability and accident insurance plans and programs as well
as any other applicable Corporation benefit plans and programs
(including, but not limited to, the 1992 Stock Option and Incentive
Plan) as if he were an active employee (limited, in the case of
coverage under life insurance plans, to the level of coverage that the
Corporation is able to obtain on Executive's behalf based upon the
annual premium cost of providing Executive with life insurance during
Executive's last twelve months of employment with the Corporation), in
which Executive was participating 30 days prior to the time Notice of
Termination is given or comparable plans substituted therefor;
provided, however, that if Executive is ineligible (e.g., by operation
of law or the terms of the applicable plan) to continue to participate
in any such plan, the Corporation will provide Executive with a
comparable level of compensation or benefit.
7.7 If Executive's employment by the Corporation shall be terminated by
Executive for Good Reason where Executive has given Notice of Termination
to the Corporation within two years from the occurrence of an event
constituting a Change-of-Control, then Executive shall be entitled to the
benefits provided below.
(a) The Corporation shall pay Executive his full base salary through the
Date of Termination at the rate in effect at the time Notice of
Termination is given, plus all other amounts to which Executive is
entitled under any benefit
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or compensation plan of the Corporation (including, but not limited
to, a pro rata share under Incentive Compensation Plans earned during
the year in which employment is terminated).
(b) In lieu of any further base salary payments to Executive for period
subsequent to the Date of Termination, the Corporation shall pay to
Executive as severance pay a lump sum equal to five times (5x) the sum
of Executive's full base salary for one calendar year at the rate in
effect immediately prior to the time Notice of Termination is given
plus the highest annual bonus received by the Executive or any
individual serving as Chairman and CEO of the Corporation during any
of the three preceding calendar years.
(c) In lieu of any further participation by Executive in the Family
Protection Plan, the Corporation shall transfer to Executive a fully
paid up insurance policy or policies then insuring the life of the
Executive pursuant to the terms of the Family Protection Plan, plus an
amount of money (the "Tax Adjustment") calculated to reimburse
Executive for any local, state or Federal income or other taxes which
he may be liable as a result of receiving the insurance policy or
policies and the Tax Adjustment amount.
(d) At Executive's option and as soon as practicable after his request,
the Corporation shall pay Executive a sum of money equal to the value
of Executive's accrued balance of the BE Plan.
(e) For five years from the Date of Termination the Corporation shall
continue to make available to Executive all Company Perquisites, or,
in the alternative, the Corporation shall pay to Executive as soon as
practicable after the Date of Termination a sum of money reasonably
approximating the cash value of the Company Perquisites. Additionally
, Executive shall, subject to Section 7.9, be allowed to participate
in all applicable group, life, health, disability and accident
insurance plans and programs as well as any other applicable
Corporation benefit plans and programs (including, but
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not limited to, the 1992 Stock Option and Incentive Plan) as if he
were an active employee (limited, in the case of coverage under life
insurance plans, to the level of coverage that the Corporation is able
to obtain on Executive's behalf based upon the annual premium cost of
providing Executive with life insurance during Executive's last twelve
months of employment with the Corporation), in which Executive was
participating 30 days prior to the time Notice of Termination is given
or comparable plans substituted therefor; provided, however, that if
Executive is ineligible (e.g., by operation of law or the terms of the
applicable plan) to continue to participate in any such plan, the
Corporation will provide Executive with a comparable level of
compensation or benefit.
7.8 In addition to the benefits set forth in Sections 7.6 and 7.7, in the event
that Executive's employment shall be terminated (1) by the Corporation for
other than Cause, (2) by Executive for Good Reason other than Section 7.7
Good Reason, or (3) by Executive for Section 7.7 Good Reason then:
(a) The Company shall also pay to Executive all reasonable legal fees and
expenses incurred by Executive as a result of such termination
(including all such fees and expenses, if any, incurred in contesting
or disputing any such termination (including cost associated with
legal consultation even if no actual contest or dispute results) or in
seeking to obtain or enforce any right or benefit provided by this
Agreement or in connection with any tax audit or proceeding to the
extent attributable to the application of Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code"), to any payment or
benefit provided hereunder), except any such fees or expenses incurred
by Executive in seeking to enforce a claim which is determined by an
arbitrator, pursuant to Section 14 below, to have been frivolous in
nature or not brought or pursued in good faith.
(b) In the event that Executive becomes entitled to payments under the
provisions of either Section 7.6 or 7.7 (the "Severance Payments"), if
Executive will be subject to the tax (the "Excise Tax") imposed by
Section 4999 of the
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Code, the Corporation shall pay to Executive at the time or times
specified in Paragraph (h) below, an additional amount (the "Gross-Up
Payment") such that the net amount retained by Executive, after
deduction of (i) any additional Excise Tax payable by Executive as a
result of Executive's receipt of the Severance Payments and (ii) any
additional federal, state and local income tax and Excise tax payable
by Executive as a result of Executive's receipt of the Gross-Up
Payments shall be equal to the Severance Payments. For purposes of
determining whether any of the Severance Payments will be subject to
the Excise Tax and the amount of such Excise Tax, (i) the Severance
Payments, payments provided for in this paragraph and any other
payments or benefits received or to be received by Executive in
connection with a Change-in-Control of the Corporation or Executive's
termination of employment (whether pursuant to the terms of this
Agreement or any other plan, arrangement or agreement with the
Corporation, any person whose actions result in a Change-in-Control or
any person affiliated with the Corporation or such person) shall be
treated as "parachute payments" within the meaning of Section
280G(b)(2) of the Code, and all "excess parachute payments" within the
meaning of Section 280G(b)(1) shall be treated as subject to the
Excise Tax, unless and to the extent that in the opinion of tax
counsel selected by the Corporation's independent auditors and
acceptable to Executive, such other payments or benefits (in whole or
in part) do not constitute parachute payments, or such excess
parachute payments (in whole or in part) and represent reasonable
compensation for services actually rendered within the meaning of
Section 280G(b)(4) of the Code in excess of the base amount within the
meaning of Section 280G(b)(3) of the Code, or are otherwise not
subject to the Excise Tax, (ii) the amount of the Severance Payments
which shall be treated as subject to the Excise Tax shall be equal to
the lesser of (A) the total amount of the Severance Payments or (B)
the amount of excess parachute payments within the meaning of Section
280G(b)(1) (after applying clause (i) above), (iii) any payment
pursuant to this Paragraph shall be treated as subject to the Excise
Tax in its entirety and (iv) the value of any non-cash benefits or any
deferred
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payment of benefit shall be determined by the Corporation's
independent auditors in accordance with the principles of Sections
280G(d)(3) and (4) of the Code. For purposes of determining the
amount of the Gross-Up Payment, 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 Executive residence on the Date
of Termination, not 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 Executive's employment, Executive shall repay to the
Corporation 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 Executive)
plus interest accrued from the date such Gross-Up Payment is made to
Executive to the date of such repayment on the amount of such
repayment at the rate provided in Section 1274(b)(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 Executive's 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 Corporation 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.
(c) The payments provided for in Paragraph (b) above shall be made at any
time during the 90-day period preceding each due date for making
payment of such Excise Taxes; provided, however, that if the amounts
of such payments cannot be finally determined on or before each such
date, the Corporation shall pay to Executive on such date an estimate,
as determined in good faith by the Corporation,
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of the minimum amount of such payments and shall pay the remainder of
such payments then due as soon as the amount thereof can be
determined. In the event that the amount of the estimated payments
exceeds the amount subsequently determined to have been due, such
excess shall constitute a loan by the Corporation to Executive on the
fifth day after demand by the Corporation (together with interest at
the rate provided in Section 1274(b)(2)(B) of the Code).
7.9 Executive shall be required immediately after the Date of Termination to
take reasonable steps to seek appropriate employment elsewhere; provided,
however, that if Executive obtains employment that would result in a
violation of the noncompetition provisions of Section 11 of this Agreement
and if Executive is unable to accept such employment because the
Corporation will not release Executive from Executive's noncompetition
obligation, Executive shall nevertheless be deemed to have satisfied the
requirement of this Section to seek other employment. Upon receipt of
written notice from Executive that Executive has been reemployed by another
company or entity on a full-time basis (or would have been reemployed but
for the noncompetition provisions of Section 11 of this Agreement) benefits
otherwise receivable by Executive pursuant to Subsections 7.6(d) or 7.7(e)
shall be reduced to the extent comparable benefits are made available to
Executive at his new employment and any such benefits actually received by
Executive shall be reported to the Corporation. Nothing herein contained
shall obligate Executive to accept employment elsewhere, where the duties,
status, responsibilities, compensation and benefits are not at least equal
to that of his current position.
8. SUCCESSORS; BINDING AGREEMENT
The Corporation will 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 Corporation to expressly assume and
agree to perform this Agreement in the same manner and to the same extent
that the Corporation would be required to perform it if no such succession
had taken place. Failure of the Corporation to obtain such assumption and
agreement prior to the
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effectiveness of any such succession shall be a breach of this Agreement
and shall entitle Executive to terminate this Agreement for Good Reason.
As used in this Agreement, "Corporation" shall mean the Corporation and any
successor to its business and or assets as aforesaid which assumes and
agrees to perform this Agreement by operation of law, or otherwise.
9. NOTICE
For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to
have been duly given when delivered or mailed by United States registered
mail, return receipt requested, postage prepaid, addressed to the Executive
at Xxx Xxxxxx Xxxxx Xxxxx, Xxx. 0X, Xxx Xxxx, Xxx Xxxx 00000, and to the
Corporation at 000 Xxxx Xxxxxx, Xxx Xxxx, Xxx Xxxx 00000 to the attention
of the Board with a copy to the Secretary of the Corporation or to such
other address as either party may have furnished to the other in writing in
accordance herewith, except that notice of change of address shall be
effective only upon receipt.
10. MODIFICATION; WAIVER
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing and signed
by Executive and such officer of the Corporation as may be specifically
designated by the Board. No waiver by either party hereto at any time of
any breach by the other party hereto of, or compliance with, any condition
or provision of this Agreement to be performed by such other party shall be
deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time.
11. NONCOMPETITION
11.1 Until the Date of Termination, Executive agrees not to enter into
competitive endeavors and not to undertake any commercial activity which
is contrary to the best interests of the Corporation or its affiliates,
including becoming an employee, owner (except for passive investments of
not more than three
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percent of the outstanding shares of, or any other equity interest in, any
company or entity listed or traded on a national securities exchange or in
an over-the-counter securities market), officer, agent or director of (a)
any firm or person engaged in the operation of a business engaged in the
acquisition of industrial businesses or (b) any firm or person which either
directly competes with a line or lines of business of the Corporation
accounting for ten percent (10%) or more of the Corporation's gross
revenues or earnings before taxes or derives ten percent (10%) or more of
such firm's or person's gross revenues or earnings before taxes from a line
or lines of business which directly compete with the Corporation.
Notwithstanding any provision of this Agreement to the contrary, Executive
agrees that his breach of the provisions of this Section 11.1 shall permit
the Corporation to terminate Executive's employment for Cause in accordance
with Section 6.1(b) hereof.
11.2 After the Date of Termination and for a period of time equal in years to
the multiple of annual salary received by Executive pursuant to Sections
7.6(b) and 7.7(b) (the "Non-Competition Period"), Executive agrees not to
become an employee, owner (except for passive investments of not more than
three percent of the outstanding shares of, or any other equity interest
in, any company or entity listed or traded on a national securities
exchange or in an over-the-counter securities market), officer, agent or
director of any firm or person which directly and substantially competes
with a business of the Corporation accounting for ten percent (10%) or more
of the Corporation's gross revenues or earnings before taxes. During the
Non-Competition Period, Executive will be available to answer questions
and provide advice to the Corporation; provided, however, that such
requirement shall not unreasonably interfere with any other of
Executive's activities which Executive is then pursuing and which are
not otherwise prohibited by this Section 11. Also, during the Non-
Competition Period, Executive will retain in confidence any and all
confidential information known to him concerning the Corporation and
its business and shall not use or disclose such information without
the approval of the Corporation except to the extent such information
becomes public or as may be required by law.
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11.3 Executive acknowledges and agrees that damages for breach of the
covenant not to compete in this Section 11 will be difficult to determine
and will not afford a full and adequate remedy, and therefore Executive
agrees that the Corporation, in addition to seeking actual damages pursuant
to the procedures set forth in Section 14 below, may seek specific
enforcement of the covenant not to compete in any court of competent
jurisdiction, including, without limitation, by the issuance of a temporary
or permanent injunction, without the necessity of a bond. Executive and
the Corporation agree that the provisions of this covenant not to compete
are reasonable. However, should any court or arbitrator determine that any
provision of this covenant not to compete is unreasonable, either in period
of time, geographical area, or otherwise, the parties agree that this
covenant not to compete should be interpreted and enforced to the maximum
extent which such court or arbitrator deems reasonable.
12. VALIDITY
The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this
Agreement, which shall remain in full force and effect.
13. COUNTERPARTS
This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original but all of which together will constitute one
and the same instrument.
14. ARBITRATION
Except as contemplated by Section 11.3 of this Agreement, any dispute or
controversy arising under or in connection with this Agreement shall be
settled exclusively by arbitration in New York, New York, or other location
mutually agreed upon by the parties to the arbitration, in accordance with
rules of the American Arbitration Association, and judgment upon such award
rendered by the arbitrator may be entered in any court having jurisdiction
over such proceeding.
15. GOVERNING LAW
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This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York.
16. ENTIRE AGREEMENT; SURVIVAL OF CERTAIN PROVISIONS
This Agreement constitutes the whole agreement of the Corporation and the
Executive. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter of this Agreement have been
made by either party which are not expressly set forth in this Agreement.
The Employment Agreement dated July 1, 1991 between the Corporation and the
Executive is hereby canceled and superseded by this Agreement.
The obligations of the Corporation under Section 7 above and the
Executive's obligations under Section 11 above shall survive the expiration
of the term of this Agreement.
17. WITHHOLDING
Any payments made to Executive under this Agreement shall be paid net of
any applicable withholding required under Federal, state or local law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COLTEC INDUSTRIES INC
By Xxxxxxxx X. Xxxxxx
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/S/ Xxxx X. Xxxxxx, Xx.
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XXXX X. XXXXXX, XX.
