EXECUTION COPY
NORTEK, INC., NORTEK HOLDINGS, INC. and XXXXXXX X. XXXXXX
AMENDED AND RESTATED EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (this "Agreement") among NORTEK, INC, a Delaware
corporation ("Nortek"), NORTEK HOLDINGS, INC., a Delaware corporation ("Nortek
Holdings") (Nortek and Nortek Holdings, collectively being referred to
hereinafter as "Employer"), and Xxxxxxx X. Xxxxxx, a resident of Rhode Island
(hereinafter called "Employee"), amends and restates that certain Employment
Agreement among Nortek, Prior Holdings (as defined below) and Employee dated as
of January 9, 2003 (the "Prior Agreement").
WHEREAS, on July 15, 2004, THL Buildco Holdings, Inc. and THL Buildco,
Inc., companies affiliated with Xxxxxx X. Xxx Partners, L.P., entered into a
stock purchase agreement with affiliates of Xxxxx & Company, L.P., Employee and
certain other parties (the "Stock Purchase Agreement"), pursuant to which THL
Buildco, Inc. agreed to purchase all the outstanding capital stock of the
then-existing Nortek Holdings, Inc. ("Prior Holdings");
WHEREAS, immediately following the Closing, as defined in the Stock
Purchase Agreement, (A) THL Buildco, Inc. merged with and into Prior Holdings
and Prior Holdings merged with and into Nortek, with Nortek continuing as the
surviving corporation, and (B) THL Buildco Holdings, Inc. became the new parent
company of Nortek and was renamed "Nortek Holdings, Inc" (which acquisition by
THL Buildco, Inc. and the related mergers are collectively referred to
hereinafter as the "Acquisition.");
WHEREAS, Employee was employed by Nortek and Prior Holdings as Chairman
and Chief Executive Officer and Employee possesses intimate knowledge of the
business and affairs of Nortek and has acquired certain confidential information
and data with respect to Nortek;
WHEREAS, at the time of the Acquisition, Employee was employed by Nortek
and Prior Holdings under the Prior Agreement;
WHEREAS, Employer desires to assure that it will have the benefit of the
continued service and experience of Employee as Chairman, President and Chief
Executive Officer of Employer and an integral part of its management for a
period of time and Employee is willing to enter into an agreement to such ends
upon the terms and conditions set forth in this Agreement; and
WHEREAS, Employee and Employer desire to enter into this Agreement, which
shall amend and restate the Prior Agreement and govern the terms of Employee's
employment with Employer as of the date of, and immediately following, the
Acquisition (the "Effective Time"). In consideration of the foregoing and the
mutual agreements herein contained, the parties mutually agree as follows:
1. Employment Period and Duties
(a) During the Employment Period, Employer shall employ Employee, and
Employee shall serve as an employee of Employer, provided, however, that if the
Stock Purchase Agreement is terminated according to its terms, then at the time
of such termination, this Agreement shall terminate and be of no force or
effect. For purposes of this Agreement, "Employment Period" shall mean the
period of time commencing at the Effective Time and ending, unless sooner
terminated pursuant to the provisions hereof, on December 31, 2009; provided
that on December 31, 2009 and each anniversary thereof, the Employment Period
shall automatically extend for one additional year unless written notice of
intent not to extend is delivered by Employer to Employee at least 90 days prior
to the scheduled end of the Employment Period.
(b) During the Employment Period, Employee shall serve as Chairman,
President and Chief Executive Officer of Employer, or in such other executive
capacity at a similar level of responsibility and with such other duties as the
board of directors of Nortek Holdings (the "Board") and Employee may from time
to time mutually determine, and Employee accepts employment on the terms and
conditions contained herein and agrees to devote a substantial part of his
working time and energies to the business of Employer and to faithfully and
diligently perform the customary duties of his office and such other duties,
reasonable vacations (of not less than four weeks per year) and time devoted to
charitable and community service, and absences due to illness and holidays
excepted. Such other duties may include the performance of services for any of
Employer's subsidiaries and, without further remuneration (except as otherwise
agreed), may also include service as an officer or director of one or more of
Employer's subsidiaries. Nothing herein shall prohibit Employee from managing or
supervising his personal investments or from devoting attention to his other
business interests that do not materially interfere with his obligations to
Employer hereunder or compete with Employer or its subsidiaries.
(c) During the Employment Period, Employer shall maintain an appropriately
appointed executive office for Employee in Providence, Rhode Island (or at such
other location as Employee and Employer shall mutually agree) of not less than
the size of Employee's current office and associated administrative space from
which Employee shall perform his duties and shall provide Employee with
executive secretarial and other administrative staff and services suitable to
his offices and duties, staffed by persons approved by Employee and with such
staff members' salaries and benefits as Employee shall approve.
(d) During the Employment Period, Employer shall not, without obtaining
Employee's consent, terminate the employment of any employee listed in Exhibit A
hereto.
2. Compensation
(a) Basic Salary. Employee shall receive a basic annual salary of not less
than $3,500,000 or such greater amount as determined from time to time at the
discretion of the Board (hereinafter called the "Basic Salary") during the
Employment Period, payable in equal monthly installments on the 15th day of each
month.
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(b) Incentive Compensation.
(i) Employer shall pay Employee incentive compensation determined by
multiplying $5,000,000 by a fraction, the numerator of which is the number of
days from January 1, 2004 to the Effective Time and the denominator of which is
366. Such incentive compensation shall be paid in cash at the Effective Time.
(ii) Employee shall not be entitled to earn any incentive or bonus
compensation during the Employment Period, other than as set forth in Section
2(b)(i) immediately above. The Board, however, may elect to award Employee
incentive or bonus compensation from time to time; provided that it does so
through an award that specifically designates Employee as the recipient and
provided further that any decision to make such an award, the amount of any such
award made, and all other terms and conditions thereof shall be at the
discretion of the Board. An award in one year shall not entitle Employee to an
award in any other year. Employee acknowledges that there is no direct or
implied agreement, promise or understanding of any kind to grant him incentive
or bonus compensation, other than as provided in Section 2(b)(i) hereof.
(c) Equity Issuance. THL-Nortek Investors, LLC (the "LLC") shall issue to
Employee at the Effective Time 23,586.66 Class C Units of the LLC, subject to
the terms and conditions of the Management Unit Subscription Agreement, dated as
of August 27, 2004, between Employee and the LLC.
(d) Life Time Medical Coverage.
(i) From and after the date upon which the Employment Period expires
or terminates for any reason (the "Triggering Date"), Employer shall
provide Employee and his Spouse for so long as they shall live with
lifetime Medical Coverage at no cost to Employee. For purposes of this
Agreement, (x) "Spouse" shall mean any individual married to Employee only
during the time such individual is married to Employee, provided that an
individual who is married to Employee at the time of Employee's death
shall be a Spouse for the remainder of such individual's lifetime and (y)
"Medical Coverage" shall mean all medical and dental benefits that are
provided Employee at the Effective Time, any medical or dental expense
that would be deductible by Employee under section 213 of the Internal
Revenue Code of 1986, as amended (the "Code"), including insurance
premiums, long term care benefits (determined without regard to any
limitation under section 213 of the Code), co-payments and deducible
amounts (all determined without regard to the deductible threshold set
forth in section 213(a) of the Code) if paid by the Employee directly, and
such other reasonable medical and dental expenses that Employer may
approve from time to time, but in no event shall Employer's reimbursement
obligation for Employee, his Spouse or dependents under this Section 2(d)
exceed $1,000,000 (exclusive of any gross up for taxes pursuant to
Sections 2(d)(iii) or 8 hereof) in the aggregate during Employee's and his
Spouse's lifetimes. Such Medical Coverage shall be extended to any
dependent of Employee but only for so long as such person remains a
"dependent" under the terms and conditions of Employer's health plan in
existence at the Effective Time. Employer shall make all reasonable
efforts to
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include Employee, his Spouse and dependents in any comprehensive medical
and/or dental plan provided to active employees from time to time.
Employee must make all reasonable effort to obtain and to maintain (at
Employer's expense as provided herein) any form of comprehensive medical
and/or dental insurance that Employer may require from time to time. If
Employee is or becomes eligible for Medicare benefits, the coverage
provided by this Section shall be supplemental to Medicare coverage, Parts
A and B, and the Employee shall be required to submit claims to Medicare
before making any claim for medical care under this Section.
(ii) Upon the Triggering Date, or any time thereafter, upon the
written request of Employee or his Spouse, Employer shall authorize a lump
sum cash payment in lieu of lifetime Medical Coverage in an amount
established by the Board that is reasonably sufficient to provide the
lifetime Medical Coverage. For illustrative purposes, a sample calculation
of such lump sum cash payment is set forth in Exhibit B hereto.
(iii) Employer agrees to make a "gross up" payment to Employee to
cover any and all state and federal income taxes that may be due as a
result of the benefits provided under Section 2(d)(i) above and on any
lump sum payment under Section 2(d)(ii) above (and the tax on any such
"gross up" payment) as a consequence of providing such lifetime Medical
Coverage to Employee, his Spouse and his dependents.
(iv) Following the Triggering Date, Employee shall notify the
Employer of any change in (x) his marital status or (y) the status of his
dependents as "dependents," as soon as practicable following such change.
(e) Benefits. Employee shall be eligible to participate in any deferred
compensation, pension or other benefit plan in which executive personnel of
Employer are eligible to participate. In addition, other than as provided in
Section 16 hereof, Employee shall be entitled to receive all other benefits or
participate in any employee benefit plans generally available to executive
personnel of Employer, including without limitation, any hospital, medical,
accident, disability, life insurance, and dental coverage, any stock option or
savings plans, or any pension or other retirement benefit plans.
(f) Reimbursement and Perquisites. Employer shall promptly reimburse
Employee for all business expenses incurred by Employee during the Employment
Period; shall promptly pay or reimburse Employee for club and professional
association dues, assessments and fees for at least such clubs and associations
as Employee was a member of and Employer was making such payments or
reimbursements at the Effective Time; and shall provide to Employee for his
exclusive business and personal use two automobiles of his selection, pay all
expenses of ownership, operation, repair and maintenance of such vehicles,
provide a suitable substitute vehicle in the event either automobile is not
available for use by Employee for any reason and replace each such automobile
not less often than biannually with a new vehicle at the option of Employee.
Employer shall provide Employee with use of (or reimburse Employee for use of) a
private aircraft for business and personal travel in a manner consistent with
Employer's practice prior to the Effective Time, provided that, notwithstanding
the foregoing, Employee use of the
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private aircraft for personal travel shall be limited to not more than fifty
(50) hours per year. Any tax liability to Employee resulting from any of any of
payments, reimbursements or other provision of perquisites provided pursuant to
this Section 2(f) shall be solely Employee's responsibility.
3. Termination
(a) If Employee dies, the Employment Period or the Noncompete Period (as
defined in Section 4 hereof) shall end and his employment hereunder shall be
deemed to cease as of the date of his death.
(b) If Employee is incapacitated by accident, sickness, or otherwise so as
to render him, for a period of 365 consecutive days, mentally or physically
incapable of performing the services required of him under this Agreement (such
incapacity, a "Disability") and, if requested by Employee, the basis for such
incapacity is certified by a licensed physician, Employer, acting through its
Board, may terminate the Employment Period.
(c) Employee shall have the right to terminate the Employment Period
without Good Reason at any time by written notice to the Board, not less than 20
business days in advance of such termination.
(d) Employer, acting through the Board, shall have the right to terminate
the Employment Period for Cause (as hereinafter defined), without further
obligation hereunder on the part of Employer or Employee except payment to
Employee of amounts earned or accrued hereunder to the date of termination,
pursuant to the procedures specified in this Section 3(d); provided that the
Employment Period shall not be terminated for Cause if prior to the finding of
the Board with respect thereto, the Employment Period shall have terminated for
any other reason. For purposes of this Agreement, "Cause" shall mean: (i) the
willful and continued failure of Employee to perform substantially Employee's
material duties pursuant to Section 1(b) hereof (other than any such failure
resulting from, or contributed to by, incapacity due to physical or mental
illness), after a written demand for substantial performance is delivered to
Employee by the Board which notice is adopted at an in-person meeting of the
Board called and held for such purpose (after reasonable notice is provided to
Employee and Employee is given an opportunity, together with
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counsel, to be heard before the Board) and which notice specifically identifies
the manner in which Employee has not substantially performed his material
duties, or (ii) because of conviction of Employee of a crime involving theft,
embezzlement or fraud against Employer or a civil judgment in which Employer is
awarded damages from Employee in respect of a claim of loss of funds through
fraud or misappropriation by Employee. Performance by Employee of his duties
under Section 1(b) hereof shall be presumed to be substantially performed, and
any act, or failure or act, based upon authority given pursuant to a resolution
duly adopted by the Board or any committee of the Board or based upon the advice
of counsel for Employer (including members of its legal staff) or which has been
acquiesced in by the Board shall be conclusively presumed to be done, or omitted
to be done, by Employee consistent with his obligations under Section 1(b)
hereof. Termination of the Employment Period for Cause shall not occur unless
and until there shall have been delivered to Employee a copy of a resolution
duly adopted by the affirmative vote of all of the members of the Board
excluding Employee at an in-person meeting of the Board called and held for such
purpose (after notice of not less than 20 business days is provided to Employee
and Employee is given an opportunity, together with counsel, to be heard before
the Board), finding that, in the good faith opinion of the Board, termination
for Cause is justified based solely on information presented at such meeting.
(e) Employer, acting through the Board, shall have the right to terminate
the Employment Period without Cause, by written notice to Employee, not less
than 20 business days in advance of such termination.
(f) Good Reason. Employee shall have the right to terminate the Employment
Period at any time with Good Reason (as defined in Section 5) by written notice
to the Board.
(g) Any amounts due Employee hereunder in the event of termination of the
Employment Period shall be considered severance pay in consideration of his past
services and in consideration of his continued services from the date hereof,
are considered reasonable by Employer and not in the nature of a penalty, shall
not be reduced by compensation or income received by Employee from any other
employment or other source and shall not be offset by any claims Employer may
have against Employee; timely payment of such amounts is further agreed by the
parties hereto to be in full satisfaction and compromise of any claims arising
out of the performance or nonperformance of this Agreement that either party
might have against the other, other than any claims Employee may have under the
provisions of Section 8 hereof.
4. Noncompetition and Confidentiality
(a) Employee agrees that he shall not compete with Employer as hereinafter
provided for a period (the "Noncompete Period") equal to:
(i) if the Employment Period is terminated pursuant to Section 3(c)
or (d) hereof, one year beginning as of the first day following such
termination, or
(ii) if the Employment Period is terminated pursuant to Section
3(b), (e) or (f) hereof or as described in Section 5(a), clause (y), the
longer of (x) one year beginning as of the first day following such
termination of the Employment Period and (y) a period commencing on the
first day following such termination and ending on December 31, 2009.
(b) Employee's agreement not to compete with Employer during the
Noncompete Period shall be limited to prohibiting Employee from owning a greater
than 5% equity interest in, serving as a director, officer, employee or partner
of, or being a consultant to or co-venturer with any business enterprise or
activity that competes in North America with any line of business conducted by
Employer or any of its subsidiaries at the termination of the Employment Period
and accounting for more than 5% of Employer's gross revenues for its fiscal year
ending immediately prior to the year in which the Employment Period ends. During
the Noncompete Period, Employee agrees that he will not hire or attempt to hire
any person employed by Employer or any of its subsidiaries during the 24 month
period prior to the termination of the Employment Period, assist such a hiring
by any other person or entity, encourage any such employee to terminate his
relationship with Employer (or any such subsidiary) or solicit or encourage any
customer or vendor of Employer to terminate its relationship with Employer.
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(c) Employee shall hold in a fiduciary capacity for the benefit of
Employer all secret or confidential information, knowledge or data relating to
Employer or any of its subsidiaries, and their respective businesses, which
shall have been obtained by Employee during Employee's employment by Employer or
any of their predecessors and which shall not be or become public knowledge
(other than by acts by Employee or representatives of Employee in violation of
this Agreement). After termination of Employee's employment with Employer,
Employee shall not, without the prior written consent of Employer or as may
otherwise be required by law or legal process, communicate or divulge any such
information, knowledge or data to anyone other than Employer and those
designated by it.
(d) It is agreed that Employer, in addition to any other remedies
available to it, shall be entitled to preliminary and permanent injunctive
relief against any breach or threatened breach by Employee of any of the
covenants in this Section 4. Employee and Employer further agree that, in the
event that any provision of this Section 4 shall be determined by any court of
competent jurisdiction to be unenforceable by reason of its being extended over
too great a time, too large a geographic area or too great a range of
activities, such provision shall be deemed to be modified to permit its
enforcement to the maximum extent permitted by law.
5. Severance Pay-Termination by Employer
(a) If (x) the Employment Period shall terminate by reason of Employer's
exercise of its right under Section 3(e) to terminate without Cause or in the
event Employee elects to terminate the Employment Period for Good Reason or (y)
Employee's employment is terminated due to the Employer's delivery of notice not
to extend the Employment Period pursuant to Section 1(a) hereof, Employer shall
thereafter be obligated to provide and Employee, or in the event of his death,
his estate, shall be entitled to receive, for a period of one year beginning as
of the first day following such termination (or, if longer, for a period
commencing on such date and ending on December 31, 2009):
(i) an amount for each year, payable in the manner set forth in
Section 2 hereof, equal to $1,750,000;
(ii) continued coverage, at the expense of the Employer, under the
same or equivalent disability, accident and life insurance policies as
Employee was covered by immediately prior to termination of the Employment
Period;
(iii) an executive office for Employee located outside of Employer's
headquarters but within Providence, Rhode Island and secretarial and other
administrative services, all reasonably suitable to Employee's then
current needs and consistent with his former offices and duties during the
Employment Period.; and
(iv) continuation of the perquisites specified in Section 2(f)
hereof.
(b) For purposes of this Agreement, "Good Reason" shall mean:
(i) any reduction of, or failure to pay, Employee's Basic Salary or
other compensation as described in Section 2(a) and 2(b)(i) hereof;
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(ii) any failure to provide the benefits or payments required by
Sections 2(c) ("Equity Issuance"), 2(d) ("Lifetime Medical Coverage"), 8
(Gross-Up Payment) and 10 (Indemnification) of this Agreement, any
deferred compensation plan established on or after the Effective Time in
which Employee is a participant, or Sections 6.4(a), 7.1, 8.2 or Article X
of the Securityholders Agreement by and among Employee, the LLC and
certain other parties, dated as of August 27, 2004 (the "Securityholders
Agreement") or the registration rights provided in the Registration Rights
Agreement (as defined in the Securityholders Agreement) when in effect.
(iii) assignment to Employee of any duties materially inconsistent
with his position (including status, offices and titles), authority,
duties or responsibilities as contemplated by Section 1(b) above or any
other action by Employer which results in a material diminution of such
position, authority, duties or responsibilities;
(iv) relocation of Employer's principal executive offices, or any
event that causes Employee to have his principal place of work changed, to
any location outside Providence, Rhode Island;
(v) any requirement by Employer that Employee travel away from his
office in the course of his duties significantly more than the number of
consecutive days or aggregate days in any calendar year than was required
of him prior to the Effective Time; and
(vi) without limiting the generality or effect of the foregoing, any
other material breach by Employer, LLC or any successor thereto or
transferee of substantially all the assets thereof, of this Agreement, the
Securityholders Agreement or the Registration Rights Agreement or any
material breach by the LLC of the Limited Liability Company Agreement with
respect to Employee;
provided, however, that Employee may not terminate the Employment Period
for Good Reason unless and until he has given Employer notice specifically
identifying the nature of the Good Reason and provided Employer a
reasonable opportunity to cure and the Good Reason continues uncured.
6. Death Benefit
If the Employment Period shall terminate by reason of Employee's death,
his estate or designated beneficiary shall thereafter be entitled to receive
from Employer a death benefit for a period of one year beginning as of the first
day following his death (or, if longer, for a period commencing on such date and
ending on December 31, 2009) in an annual amount equal to $1,750,000, such death
benefit shall be payable in the manner set forth in Section 2 hereof.
7. Disability Benefit
If the Employment Period shall terminate by reason of Employee's
Disability, Employee, or in the event of his death, his estate, shall thereafter
be entitled to receive from Employer: (i)
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for a period of one year commencing from the date of such termination (or, if
longer, for a period commencing on such date and ending on December 31, 2009), a
disability benefit in an annual amount equal to $1,750,000, payable in the
manner set forth in Section 2 hereof.
8. Gross-up Payment
(a) In the event that it is determined that any payment or benefit
provided by Employer or any of their predecessors to or for the benefit of
Employee, either under this Agreement or otherwise, and whether before or after
the date hereof, will be subject to the excise tax imposed by section 4999 of
the Code or any successor provision ("section 4999"), Employer will, prior to
the date on which any amount of the excise tax must be paid or withheld, make an
additional lump-sum payment (the "gross-up payment") to Employee. The gross-up
payment will be sufficient, after giving effect to all federal, state and other
taxes and charges (including interest and penalties, if any) with respect to the
gross-up payment, to make Employee whole for all taxes (including withholding
taxes) and any associated interest and penalties, imposed under or as a result
of section 4999.
(b) Determinations under this Section 8 will be made by the Employer's tax
accountant as of the Effective Time unless Employee has reasonable objections to
the use of that firm, in which case the determinations will be made by a
comparable firm chosen by Employee after consultation with Employer (the firm
making the determinations to be referred to as the "Firm"). The determinations
of the Firm will be binding upon Employer and Employee except as the
determinations are established in resolution (including by settlement) of a
controversy with the Internal Revenue Service to have been incorrect. All fees
and expenses of the Firm will be paid by Employer.
(c) If the Internal Revenue Service asserts a claim that, if successful,
would require Employer to make a gross-up payment or an additional gross-up
payment, Employer and Employee will cooperate fully in resolving the controversy
with the Internal Revenue Service. Employer will make or advance such gross-up
payments as are necessary to prevent Employee from having to bear the cost of
payments made to the Internal Revenue Service in the course of, or as a result
of, the controversy. The Firm will determine the amount of such gross-up
payments or advances and will determine after resolution of the controversy
whether any advances must be returned by Employee to Employer. Employer will
bear all expenses of the controversy and will gross Employee up for any
additional taxes that may be imposed upon Employee as a result of its payment of
such expenses.
(d) Employer shall provide Employee with a letter of credit no later than
the Effective Time covering Employee's potential exposure, if any, to the excise
tax imposed by section 4999 (or any payment resulting from such exposure) on
terms reasonably acceptable to Employer and Employee.
9. Expenses
Employer agrees to reimburse Employee for all reasonable expenses incurred
by Employee in connection with the negotiation of this Agreement, the Stock
Purchase Agreement and any other agreements and transactions contemplated
thereby.
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10. Indemnification
Anything in this Agreement to the contrary notwithstanding, Employer
agrees to pay all costs and expenses incurred by Employee in connection with the
enforcement of this Agreement and will indemnify and hold harmless Employee from
and against any damages, liabilities and expenses (including without limitation
fees and expenses of counsel) incurred by Employee in connection with any
litigation or threatened litigation, including any regulatory proceedings,
arising out of the making, performance or enforcement of this Agreement or
termination of the Employment Period.
11. Survival
Provisions of this Agreement shall survive any expiration or termination
of this Agreement, if so provided herein or if necessary or desirable to
accomplish the purposes of such provisions, including without limitation
Sections 4, 8 and 10 hereof.
12. Notices
All notices or other communications given hereunder shall be in writing
and shall be deemed to have been duly given if mailed by certified mail or hand
delivered, if to Employer, at 00 Xxxxxxx Xxxxx, Xxxxxxxxxx, Xxxxx Xxxxxx
00000-0000, attention of the General Counsel, with a copy to Xxxxxx X. Xxx
Partners, L.P., 00 Xxxxx Xxxxxx Xxxxxx, XX 00000, attention of Xxxxxxx XxXxxx,
or at such other address(es) as Employer shall have furnished to Employee in
writing, or if to Employee, at 000 Xxxxxx Xxxxxx, Xxxxxxxxxx XX 00000, or at
such other address as Employee shall have furnished to Employer in writing.
13. Governing Law
This Agreement shall be governed by the laws of the State of Rhode Island
and Providence Plantations.
14. Severability
The provisions of this Agreement are severable, and in the event that any
one or more paragraphs are deemed illegal or unenforceable, the remaining
paragraphs shall remain in full force and effect.
15. Effectiveness/Prior Agreements
This Agreement shall be binding on Employee and Employer as of the date
hereof. If the Effective Time does not occur, this Agreement shall be of no
force and effect. As of the Effective Time, the Prior Agreement shall terminate
and no payments shall thereafter be made thereunder. Under no circumstances
shall the Closing or the Acquisition or any shareholder approval thereof or any
event relating thereto be deemed a "Change of Control" for any purposes under
the Prior Agreement. This Agreement will constitute the entire agreement between
Employer and Employee and will supersede all prior negotiations and written or
oral agreements with respect to the full time employment of Employee by
Employer, including the Prior Agreement and all other prior employment
agreements between Employee and Employer or any
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of its predecessors, except as explicitly provided herein. No changes,
alterations or modifications may be made to this Agreement, except by a writing
signed by each of the parties hereto.
16. Waivers and Acknowledgements
Employee acknowledges that he is not a participant in the Nortek, Inc.
Change in Control Severance Benefit Plan for Key Employees, As Amended and
Restated June 12, 1997 or any similar plan and waives any and all rights to
participate in the Nortek, Inc. Second Amended and Restated Change in Control
Severance Benefit Plan for Key Employees or any other such plans. Employee
acknowledges that he is not now a participant in any SERP sponsored by Nortek,
Nortek Holdings or any of their affiliates and he hereby waives any right to
such participation hereafter. Employee acknowledges that Exhibit C hereto sets
forth all life insurance policies to which Employer and he, or any trust
established by him, are a party and agrees that, upon the transfer of those life
insurance policies from Employer to Employee, any split dollar agreements
associated with any of those policies has terminated and Employer has no further
obligation with respect to those policies and agreements, including without
limitation the payment of any further premiums.
17. Assignment
Neither Employer nor Employee may make any assignment of this Agreement or
any interest herein, by operation of law or otherwise, without the prior written
consent of the other; provided, however, that Nortek and Nortek Holdings each,
in the event that it shall hereafter, consolidate with, or merge into, any other
entity or transfer all or substantially all of its properties or assets to
another entity, may assign its rights and obligations under this Agreement
without the consent of Employee to such other entity. This Agreement shall inure
to the benefit of and be binding upon Employer and Employee, their respective
successors, executors, administrators, heirs and permitted assigns.
18. Counterparts.
This Agreement may be executed simultaneously in one or more counterparts,
each of which shall be deemed to be an original, but all of which together shall
constitute one and the same agreement.
19. Acknowledgements.
The parties agree that the following are to be accomplished at the
Effective Time: (a) payment to Employee of incentive compensation as specified
in Section 2(b)(i) hereof; (b) payment to Employee in accordance with Section 6
of the amended and restated agreement between Nortek and Employee dated as of
the 1st of June, 2001; (c) forgiveness of the principal and interest outstanding
at the Effective Time on the loan to Employee described in section 2(f) of the
Prior Agreement; and (d) transfer to Employee of all life insurance policies
listed on Exhibit C hereto.
[Remainder of page intentionally blank]
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as
of August 27, 2004.
NORTEK, INC.
By:______________________________
Name:
Title:
NORTEK HOLDINGS, INC.
By:______________________________
Name:
Title:
_________________________________
Xxxxxxx X. Xxxxxx
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EXHIBIT A
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EXHIBIT B
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EXHIBIT C
LIFE INSURANCE POLICIES
AIG Sun America, Policy No. 7013959A
Prudential Policy No. 00-000-000
New York Life Policy No. 00-000-000
New York Life Policy No. 00-000-000
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