Exhibit 10.2
SEVERANCE AGREEMENT
THIS AGREEMENT is entered into as of the 23rd day of February, 1998 by
and between Global Industrial Technologies, Inc. a Delaware corporation (the
"Company"), and Xxxxxx X. Xxxxxx ("Executive").
W I T N E S S E T H
WHEREAS, the Company considers the establishment and maintenance of a
sound and vital management to be essential to protecting and enhancing the best
interests of the Company and its stockholders; and
WHEREAS, the Company recognizes that, as is the case with many publicly
held corporations, the possibility of a change in control may arise and that
such possibility may result in the departure or distraction of management
personnel to the detriment of the Company and its stockholders; and
WHEREAS, the Board (as defined in Section 1) has determined that it is
in the best interests of the Company and its stockholders to secure Executive's
continued services and to ensure Executive's continued dedication to his duties
in the event of any threat or occurrence of a Change in Control (as defined in
Section 1) of the Company; and
WHEREAS, the Board has authorized the Company to enter into this
Agreement.
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants and agreements herein contained, the Company and Executive hereby
agree as follows:
1. Definitions. As used in this Agreement, the following terms shall
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have the respective meanings set forth below:
(a) "Average Bonus Fraction" means a fraction, where the numerator is
the aggregate bonus compensation Executive has received during the lesser of (i)
the two (2) year period immediately preceding the year in which the Date of
Termination occurs or (ii) Executive's period of employment immediately
preceding the year in which the Date of Termination occurs and the denominator
is the aggregate amount of base salary that Executive has received during the
relevant period in clause (i) or (ii) above, as the case may be.
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(b) "Board" means the Board of Directors of the Company.
(c) "Bonus Amount" means the product of (i) Executive's current
annual rate of base salary on the Date of Termination (or, if greater, the
base salary in effect on the date of a Change in Control) and (ii) the
Average Bonus Fraction.
(d) "Cause" means (i) the willful and continued failure of Executive
to perform substantially his duties with the Company (other than any such
failure resulting from Executive's incapacity due to physical or mental
illness or any such failure subsequent to Executive being delivered a
Notice of Termination without Cause by the Company (or delivering a Notice
of Termination for Good Reason to the Company) after a written demand for
substantial performance is delivered to Executive by the Board which
specifically identifies the manner in which the Board believes that
Executive has not substantially performed Executive's duties, or (ii) the
willful engaging by Executive in illegal conduct or gross misconduct which
is demonstrably and materially injurious to the Company or its affiliates.
For purpose of this paragraph (d), no act or failure to act by Executive
shall be considered "willful" unless done or omitted to be done by
Executive in bad faith and without reasonable belief that Executive's
action or omission was in the best interests of the Company or its
affiliates. Any act, or failure to act, based upon authority given pursuant
to a resolution duly adopted by the Board, based upon the advice of counsel
for the Company or upon the instructions of the Company's chief executive
officer or another senior officer of the Company shall be conclusively
presumed to be done, or omitted to be done, by Executive in good faith and
in the best interests of the Company. Cause shall not exist unless and
until the Company has delivered to Executive a copy of a resolution duly
adopted by three-quarters (3/4) of the entire Board (excluding Executive if
Executive is a Board member) at a meeting of the Board (after reasonable
notice to Executive and an opportunity for Executive, together with
counsel, to be heard before the Board at such meeting), finding that in the
good faith opinion of the Board an event set forth in clauses (1) or (2)
has occurred and specifying the particulars thereof in detail. The Company
must notify Executive of any event constituting Cause within ninety (90)
days following the Company's knowledge of its existence or such event shall
not constitute Cause under this Agreement.
(e) "Change in Control" means the occurrence of any one of the
following events:
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(i) individuals who, on February 23, 1998, constitute the Board (the
"Incumbent Directors") cease for any reason to constitute at least a
majority of the Board, provided that any person becoming a director
subsequent to February 23, 1998, whose election or nomination for election
was approved by a vote of at least two-thirds of the Incumbent Directors
then on the Board (either by a specific vote or by approval of the proxy
statement of the Company in which such person is named as a nominee for
director, without written objection to such nomination) shall be an
Incumbent Director; provided, however, that no individual initially elected
or nominated as a director of the Company as a result of an actual or
threatened election contest with respect to directors or as a result of any
other actual or threatened solicitation of proxies or consents by or on
behalf of any person other than the Board shall be deemed to be an
Incumbent Director;
(ii) any "person" (as such term is defined in Section 3(a)(9) of the
Securities Exchange Act of 1934 (the "Exchange Act") and as used in
Sections 13(d)(3) and 14(d)(2) of the Exchange Act) is or becomes a
"beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of securities of the Company representing 30% or
more of the combined voting power of the Company's then outstanding
securities eligible to vote for the election of the Board (the "Company
Voting Securities"); provided, however, that the event described in this
paragraph (ii) shall not be deemed to be a Change in Control by virtue of
any of the following acquisitions: (A) by the Company or any Subsidiary,
(B) by any employee benefit plan (or related trust) sponsored or maintained
by the Company or any Subsidiary, (C) by any underwriter temporarily
holding securities pursuant to an offering of such securities, (D) pursuant
to a Non-Qualifying Transaction (as defined in paragraph (iii)), or (E)
pursuant to any acquisition by Executive or any group of persons including
Executive (or any entity controlled by Executive or any group of persons
including Executive);
(iii) the consummation of a merger, consolidation, statutory share
exchange or similar form of corporate transaction involving the Company or
any of its Subsidiaries that requires the approval of the Company's
stockholders, whether for such transaction or the issuance of securities in
the transaction (a "Business Combination"), unless immediately following
such Business Combination: (A) 60% or more of the total voting power of (x)
the corporation resulting from such Business Combination (the "Surviving
Corporation"), or (y) if applicable, the ultimate parent corporation that
directly or indirectly has beneficial ownership of 100% of
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the voting securities eligible to elect directors of the Surviving
Corporation (the "Parent Corporation"), is represented by Company Voting
Securities that were outstanding immediately prior to such Business
Combination (or, if applicable, is represented by shares into which such
Company Voting Securities were converted pursuant to such Business
Combination), and such voting power among the holders thereof is in
substantially the same proportion as the voting power of such Company
Voting Securities among the holders thereof immediately prior to the
Business Combination, (B) no person (other than any employee benefit plan
(or related trust) sponsored or maintained by the Surviving Corporation or
the Parent Corporation), is or becomes the beneficial owner, directly or
indirectly, of 30% or more of the total voting power of the outstanding
voting securities eligible to elect directors of the Parent Corporation
(or, if there is no Parent Corporation, the Surviving Corporation) and (C)
at least a majority of the members of the board of directors of the Parent
Corporation (or, if there is no Parent Corporation, the Surviving
Corporation) following the consummation of the Business Combination were
Incumbent Directors at the time of the Board's approval of the execution of
the initial agreement providing for such Business Combination (any Business
Combination which satisfies all of the criteria specified in (A), (B) and
(C) above shall be deemed to be a "Non-Qualifying Transaction"); or
(iv) the stockholders of the Company approve a plan of complete
liquidation or dissolution of the Company or a sale of all or substantially
all of the Company's assets.
Notwithstanding the foregoing, a Change in Control of the Company shall
not be deemed to occur solely because any person acquires beneficial ownership
of more than 30% of the Company Voting Securities as a result of the acquisition
of Company Voting Securities by the Company which reduces the number of Company
Voting Securities outstanding; provided, that, if after such acquisition by the
Company such person becomes the beneficial owner of additional Company Voting
Securities that increases the percentage of outstanding Company Voting
Securities beneficially owned by such person, a Change in Control of the Company
shall then occur.
(f) "Date of Termination" means (1) the effective date on which
Executive's employment by the Company terminates as specified in a prior written
notice by the Company or Executive, as the case may be, to the other, delivered
pursuant to Section 13 or (ii) if Executive's employment by the Company
terminates by reason of death, the date of death of Executive.
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(g) "Disability" means termination of Executive's employment by the
Company due to Executive's absence from Executive's duties with the Company on a
full-time basis for at least one hundred eighty (180) consecutive days as a
result of Executive's incapacity due to physical or mental illness.
(h) "Good Reason" means, without Executive's express written consent,
the occurrence of any of the following events after a Change in Control:
(i) (A) any change in the duties or responsibilities of Executive that
is inconsistent in any material and adverse respect with Executive's
position(s), duties, responsibilities or status with the Company immediately
prior to such Change in Control (including any material and adverse diminution
of such duties or responsibilities); provided, however, that Good Reason shall
not be deemed to occur upon a change in duties or responsibilities that is
solely and directly a result of the Company no longer being a publicly traded
entity (other than such change which would have a material and adverse effect on
Executive's duties or responsibilities) and does not involve any other event set
forth in this paragraph (h) or (B) a material and adverse change in Executive's
titles or offices (including, if applicable, membership on the Board) with the
Company as in effect immediately prior to such Change in Control;
(ii) a reduction by the Company in Executive's rate of annual base
salary or annual target bonus opportunity (including any material and
adverse change in the formula for such annual bonus target) as in effect
immediately prior to such Change in Control or as the same may be increased
from time to time thereafter;
(iii) any requirement of the Company that Executive (A) be based
anywhere more than thirty (30) miles from the office where Executive is
located at the time of the Change in Control or (B) travel on Company
business to an extent substantially greater than the travel obligations of
Executive immediately prior to such Change in Control;
(iv) the failure of the Company to (A) continue in effect any material
employee benefit plan, compensation plan, welfare benefit plan or fringe
benefit plan in which Executive is participating immediately prior to such
Change in Control or the taking of any action by the Company which would
adversely affect Executive's participation in or reduce Executive's
benefits under any such plan, unless Executive is permitted to participate
in other plans providing Executive with substantially equivalent benefits,
or (B) provide Executive with paid vacation in accordance with
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the most favorable vacation policies of the Company as in effect for
Executive immediately prior to such Change in Control, including for
purposes of both (A) and (B), the crediting of all service for which
Executive had been credited under such plans and policies prior to the
Change in Control;
(v) any refusal by the Company to continue to permit Executive to
engage in activities not directly related to the business of the Company
which Executive was permitted to engage in prior to the Change in Control;
(vi) any purported termination of Executive's employment which is not
effectuated pursuant to Section 11(b) (and which will not constitute a
termination hereunder); or
(vii) the failure of the Company to obtain the assumption (and, if
applicable, guarantee) agreement from any successor (and Parent
Corporation) as contemplated in Section 10(b).
An isolated, insubstantial and inadvertent action taken in good faith
and which is remedied by the Company within ten (10) days after receipt of
notice thereof given by Executive shall not constitute Good Reason. Executive's
right to terminate employment for Good Reason shall not be affected by
Executive's incapacities due to mental or physical illness and Executive's
continued employment shall not constitute consent to, or a waiver of rights with
respect to, any event or condition constituting Good Reason; provided, however,
that Executive must provide notice of termination of employment within ninety
(90) days following Executive's knowledge of an event constituting Good Reason
or such event shall not constitute Good Reason under this Agreement.
(i) "Qualifying Termination" means a termination of Executive's
employment (i) by the Company other than for Cause or (ii) by Executive for Good
Reason. Termination of Executive's employment on account of death, Disability or
Retirement shall not be treated as a Qualifying Termination.
(j) "Retirement" means Executive's mandatory retirement (not including
any mandatory early retirement) in accordance with the Company's retirement
policy generally applicable to its salaried employees, as in effect immediately
prior to the Change in Control, or in accordance with any retirement arrangement
established with respect to Executive with Executive's written consent.
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(k) "Subsidiary" means any corporation or other entity in which the
Company has a direct or indirect ownership interest of 50% or more of the total
combined voting power of the then outstanding securities or interests of such
corporation or other entity entitled to vote generally in the election of
directors or in which the Company has the right to receive 50% or more of the
distribution of profits or 50% of the assets or liquidation or dissolution.
(l) "Termination Period" means the period of time beginning with a
Change in Control and ending three (3) years following such Change in Control.
Notwithstanding anything in this Agreement to the contrary, if (i) Executive's
employment is terminated prior to a Change in Control for reasons that would
have constituted a Qualifying Termination if they had occurred following a
Change in Control; (ii) Executive reasonably demonstrates that such termination
(or Good Reason event) was at the request of a third party who had indicated an
intention or taken steps reasonably calculated to effect a Change in Control;
and (iii) a Change in Control involving such third party (or a party competing
with such third party to effectuate a Change in Control) does occur, then for
purposes of this Agreement, the date immediately prior to the date of such
termination of employment or event constituting Good Reason shall be treated as
a Change in Control. For purposes of determining the timing of payments and
benefits to Executive under Section 4, the date of the actual Change in Control
shall be treated as Executive's Date of Termination under Section 1(f).
2. Obligation of Executive. In the event of a tender or exchange offer,
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proxy contest, or the execution of any agreement which, if consummated, would
constitute a Change in Control, Executive agrees not to voluntarily leave the
employ of the Company, other than as a result of Disability, Retirement or an
event which would constitute Good Reason if a Change in Control had occurred,
until the Change in Control occurs or, if earlier, such tender or exchange
offer, proxy contest, or agreement is terminated or abandoned.
3. Term of Agreement. This Agreement shall be effective on the date
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hereof and shall continue in effect until the first anniversary thereof;
provided, however, that the term of this Agreement shall automatically be
extended commencing on the first anniversary hereof for successive additional
one (1) year periods unless either party gives written notice not to extend the
term not less than ninety (90) days prior to the then next upcoming expiration
date; provided, further, that notwithstanding the delivery of any such notice,
this Agreement shall continue in effect for a period of three (3) years after a
Change in Control, if such Change in Control shall have occurred during the term
of this
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Agreement. Notwithstanding anything in this Section to the contrary, this
Agreement shall terminate if Executive or the Company terminates Executive's
employment prior to a Change in Control except as provided in Section 1(l).
4. Payments Upon Termination of Employment.
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(a) Qualifying Termination. If during the Termination Period the
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employment of Executive shall terminate pursuant to a Qualifying Termination,
then the Company shall provide to Executive:
(i) within ten (10) business days following the Date of Termination a
lump-sum cash amount equal to the sum of (A) Executive's base salary
through the Date of Termination and any bonus amounts which have become
payable, to the extent not theretofore paid or deferred, (B) a pro rata
portion of Executive's annual bonus for the fiscal year in which
Executive's Date of Termination occurs in an amount at least equal to (1)
Executive's Bonus Amount, multiplied by (2) a fraction, the numerator of
which is the number of days in the fiscal year in which the Date of
Termination occurs through the Date of Termination and the denominator of
which is three hundred sixty-five (365), and reduced by (3) any amounts
paid from the Company's annual incentive plan for the fiscal year in which
Executive's Date of Termination occurs and (C) any accrued vacation pay, in
each case to the extent not theretofore paid; plus
(ii) within ten (10) business days following the Date of Termination, a
lump-sum cash amount equal to (A) two and one-half (2.5) times Executive's
highest annual rate of base salary during the 12-month period immediately
prior to Executive's Date of Termination, plus (B) two and one-half (2.5)
times Executive's Bonus Amount.
(b) If during the Termination Period the employment of Executive shall
terminate pursuant to a Qualifying Termination, the Company shall continue to
provide, for a period of two (2) years and six (6) months following Executive's
Date of Termination, Executive (and Executive's dependents, if applicable) with
the same level of medical, dental, accident, disability and life insurance
benefits upon substantially the same terms and conditions (including
contributions required by Executive for such benefits) as existed immediately
prior to Executive's Date of Termination (or, if more favorable to Executive, as
such benefits and terms and conditions existed immediately prior to the Change
in Control); provided, that, if Executive cannot continue to participate in the
Company plans providing such benefits, the Company shall otherwise provide such
benefits on the same after-tax basis as if
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continued participation had been permitted (the Continued Benefits), provided,
further, that such Continued Benefits shall terminate on the date Executive
receives substantially equivalent coverage and benefits, without waiting periods
or pre-existing condition limitations, at the same or lower costs to Executive,
taking into consideration deductibles, premiums, and co-payment requirements,
under plans and programs of a subsequent employer (such coverage, benefits and
cost to be determined on a coverage-by-coverage or benefit-by-benefit basis).
In addition, the Company shall pay to Executive, within ten (10)
business days following his Date of Termination, a lump sum payment in an amount
equal to the sum of (A) and (B), where (A) is the excess, if any, of (i) the
present value of the benefits to which Executive would be entitled under
Company's pension and retirement plans (whether or not intended to be qualified
under Section 401(a) of the Internal Revenue Code of 1986, as amended (the Code)
if Executive had continued in the employ of the Company for an additional two
(2) years and six (6) months following his Date of Termination earning during
such two year and six month period the rate of base salary and Bonus Amount in
effect as of his Date of Termination, over (ii) the present value of the benefit
to which Executive is actually entitled under such pension and retirement plans
as of his Date of Termination and (B) is the present value of the Company
contributions that would have been made under all Company savings programs
(whether or not intended to be qualified under Section 401(a) of the Code) if
Executive had continued in the employ of the Company for an additional two (2)
years and six (6) months following his Date of Termination earning during such
two year and six month period the rate of base salary and Bonus Amount in effect
as of his Date of Termination, assuming that the Company would have made the
maximum contributions permitted under such savings programs, and assuming, for
purposes of determining the amount of any Company matching contributions, that
Executive would have contributed the amount necessary to receive the maximum
matching contributions available under such savings programs.
For purposes of the preceding sentence, present value shall be
determined as of the Date of Termination and shall be calculated based upon a
discount rate equal to the applicable Federal rate as provided in Section
1274(b)(2)(B) of the Code and without reduction for mortality.
(c) If during the Termination Period the employment of Executive shall
terminate other than by reason of a Qualifying Termination, then the Company
shall pay to Executive within thirty (30) days following the Date of
Termination, a lump-sum cash amount equal to the sum of (i) Executive's base
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salary through the Date of Termination and any bonus amounts which have become
payable, to the extent not theretofore paid or deferred, and (ii) any accrued
vacation pay, in each case to the extent not theretofore paid.
5. Certain Additional Payments by the Company.
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(a) Notwithstanding anything in this Agreement to the contrary, in the
event it shall be determined that any payment, award, benefit or distribution
(or any acceleration of any payment, award, benefit or distribution) by the
Company (or any of its affiliated entities) or any entity which effectuates a
Change in Control (or any of its affiliated entities) to or for the benefit of
Executive (whether pursuant to the terms of this Agreement or otherwise) (the
"Payments") would be subject to the excise tax (the "Excise Tax") under Section
4999 of the Internal Revenue Code of 1986, as amended (the "Code"), then the
amounts payable to Executive under this Agreement shall be the greater of (i)
the Payment, if the result of subtracting the Excise Tax from the Payment is
more than the Safe Harbor Cap and (ii) the Payment, reduced to the maximum
amount as will result in no portion of the Payments being subject to the Excise
Tax (the "Safe Harbor Cap"), reducing first the payments under Section 4(a)(ii),
unless an alternative method of reduction is elected by Executive. For purposes
of reducing the Payments to the Safe Harbor Cap, only amounts payable to
Executive under this Agreement (and no other Payments) shall be reduced, unless
consented to by Executive.
(b) All determinations required to be made under this Sections 4 and 5
shall be made by the nationally recognized public accounting firm that is
retained by the Company (the "Accounting Firm"). In the event that the
Accounting Firm is serving as accountant or auditor for the individual, entity
or group effecting the Change in Control, Executive may appoint another
nationally recognized public accounting firm to make the determinations required
hereunder (which accounting firm shall then be referred to as the Accounting
Firm hereunder). If payments are reduced to the Safe Harbor Cap, the Accounting
Firm shall provide a reasonable opinion to Executive that he is not required to
report any Excise Tax on his federal income tax return. All fees, costs and
expenses (including, but not limited to, the costs of retaining experts) of the
Accounting Firm shall be borne by the Company. The determination by the
Accounting Firm shall be binding upon the Company and Executive (except as
provided in paragraph (c) below).
(c) If payments are reduced to the Safe Harbor Cap as provided in
Section 5(a)(ii) and if it is established pursuant to a final determination of a
court or an Internal Revenue Service (the "IRS") proceeding which has been
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finally and conclusively resolved, that Payments have been made to, or provided
for the benefit of, Executive by the Company, which are in excess of the
limitations provided in this Section 5(a)(ii) (hereinafter referred to as an
"Excess Payment"), such Excess Payment shall be deemed for all purposes to be a
loan to Executive made on the date Executive received the Excess Payment and
Executive shall repay the Excess Payment to the Company on demand, together with
interest on the Excess Payment at the applicable federal rate (as defined in
Section 1274(d) of the Code) from the date of Executive's receipt of such Excess
Payment until the date of such repayment. As a result of the uncertainty in the
application of Section 4999 of the Code at the time of the determination, it is
possible that Payments which will not have been made by the Company should have
been made (an "Underpayment"), consistent with the calculations required to be
made under this Section 5. In the event that it is determined (1) by the
Accounting Firm, the Company (which shall include the position taken by the
Company, or together with its consolidated group, on its federal income tax
return) or the IRS or (2) pursuant to a determination by a court, that an
Underpayment has occurred, the Company shall pay an amount equal to such
Underpayment to Executive within ten (10) days of such determination together
with interest on such amount at the applicable federal rate from the date such
amount would have been paid to Executive until the date of payment.
6. Confidential Information and Non-Solicitation.
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(a) Executive agrees to keep secret and retain in the strictest
confidence all Confidential Information which relates to the Company, its
Subsidiaries and affiliates. Confidential Information (a) means information (i)
that is learned by Executive from the Company or any of its Subsidiaries or
affiliates before or after the date of this Agreement (other than Confidential
Information that was known by Executive on a nonconfidential basis prior to the
disclosure thereof), (ii) that is commercially valuable to the Company and (iii)
that is not published or of public record or otherwise generally known (other
than through failure of Executive to fully perform his obligations hereunder)
and (b) includes, without limitation, customer lists, client lists, trade
secrets, pricing policies and other business affairs of the Company, its
Subsidiaries and affiliates. Executive agrees not to disclose any such
Confidential Information to anyone outside the Company or any of its
subsidiaries or affiliates, whether during or after his period of services with
the Company, except (x) as such disclosure may be required or appropriate in
connection with his service or (y) when required to do so by a court of law, by
any governmental agency having supervisory authority over the business of the
Company or by any administrative or legislative body (including a committee
thereof) with apparent jurisdiction to order him to divulge, disclose or
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make accessible such information. Executive agrees to give the Company advance
written notice of any disclosure pursuant to clause (y) of the preceding
sentence and to cooperate with any efforts by the Company to limit the extent of
such disclosure. Upon request by the Company, Executive agrees to deliver
promptly to the Company upon termination of his services from the Company, or at
any reasonable time thereafter as the Company may request, all Company,
subsidiary or affiliate memoranda, notes, records, reports, manuals, drawings,
designs, computer files in any media and other documents (and all copies
thereof) relating to the Company's or any Subsidiary's or affiliate's business
and all property of the Company or any Subsidiary or affiliate associated
therewith, which he may then possess or have under his direct control.
(b) Executive hereby covenants and agrees that, at all times during the
term of this Agreement and for a one year period following his Date of
Termination for any reason, Executive shall not employ or seek to employ any
person employed at that time by the Company or any of its Subsidiaries or its
affiliates who is engaged in or concerned with or interested in a business which
conducts the same or similar business in any way or degree in competition with
the Company, or otherwise encourage or entice such person or entity to leave
such employment.
7. Withholding Taxes. The Company may withhold from all payments due to
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Executive (or his beneficiary or estate) hereunder all taxes which, by
applicable federal, state, local or other law, the Company is required to
withhold therefrom.
8. Reimbursement of Expenses. If any contest or dispute shall arise
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under this Agreement involving termination of Executive's employment with the
Company or involving the failure or refusal of the Company to perform fully in
accordance with the terms hereof, the Company shall reimburse Executive, on a
current basis, for all reasonable legal fees and expenses, if any, incurred by
Executive in connection with such contest or dispute (regardless of the result
thereof), together with interest in an amount equal to the prime rate of Bank of
America from time to time in effect, but in no event higher than the maximum
legal rate permissible under applicable law, such interest to accrue from the
date the Company receives Executive's statement for such fees and expenses
through the date of payment thereof, regardless of whether or not Executive's
claim is upheld by a court of competent jurisdiction; provided, however,
Executive shall be required to repay any such amounts to the Company to the
extent that a court issues a final and non-appealable order setting forth the
determination that the position taken by Executive was frivolous or advanced by
Executive in bad faith.
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9. Scope of Agreement. Nothing in this Agreement shall be deemed to
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entitle Executive to continued employment with the Company or its Subsidiaries,
and if Executive's employment with the Company shall terminate prior to a Change
in Control, Executive shall have no further rights under this Agreement (except
as otherwise provided hereunder); provided, however, that any termination of
Executive's employment during the Termination Period shall be subject to all of
the provisions of this Agreement.
10. Successors; Binding Agreement.
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(a) This Agreement shall not be terminated by any Business Combination.
In the event of any Business Combination, the provisions of this Agreement shall
be binding upon the Surviving Corporation, and such Surviving Corporation shall
be treated as the Company hereunder.
(b) The Company agrees that in connection with any Business Combination,
it will cause any successor entity to the Company unconditionally to assume (and
for any Parent Corporation in such Business Combination to guarantee), by
written instrument delivered to Executive (or his beneficiary or estate), all of
the obligations of the Company hereunder. Failure of the Company to obtain such
assumption and guarantee prior to the effectiveness of any such Business
Combination that constitutes a Change in Control, shall be a breach of this
Agreement and shall constitute Good Reason hereunder and shall entitle Executive
to compensation and other benefits from the Company in the same amount and on
the same terms as Executive would be entitled hereunder if Executive's
employment were terminated following a Change in Control by reason of a
Qualifying Termination. For purposes of implementing the foregoing, the date on
which any such Business Combination becomes effective shall be deemed the date
Good Reason occurs, and shall be the Date of Termination if requested by
Executive.
(c) This Agreement shall inure to the benefit of and be enforceable by
Executive's personal or legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If Executive shall die
while any amounts would be payable to Executive hereunder had Executive
continued to live, all such amounts, unless otherwise provided herein, shall be
paid in accordance with the terms of this Agreement to such person or persons
appointed in writing by Executive to receive such amounts or, if no person is so
appointed, to Executive's estate.
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11. Notice. (a) For purposes of this Agreement, all notices and other
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communications required or permitted hereunder shall be in writing and shall be
deemed to have been duly given when delivered or five (5) days after deposit in
the United States mail, certified and return receipt requested, postage prepaid,
addressed as follows:
If to the Executive:
Xxxxxx X. Xxxxxx
0000 Xxxxxxxxx Xxxxxx
Xxxxxx, XX 00000
If to the Company:
Global Industrial Technologies, Inc.
0000 Xxx Xxxxxxx Xxxxxx, Xxxxx 0000
Xxxxxx, XX 00000
Attention: General Counsel
or to such other address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of address shall
be effective only upon receipt.
(b) A written notice of Executive's Date of Termination by the Company
or Executive, as the case may be, to the other, shall (i) indicate the specific
termination provision in this Agreement relied upon, (ii) to the extent
applicable, 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 (iii) specify the termination date (which date shall be not
less than fifteen (15) (thirty (30), if termination is by the Company for
Disability) nor more than sixty (60) days after the giving of such notice). The
failure by Executive or the Company to set forth in such notice any fact or
circumstance which contributes to a showing of Good Reason or Cause shall not
waive any right of Executive or the Company hereunder or preclude Executive or
the Company from asserting such fact or circumstance in enforcing Executive's or
the Company's rights hereunder.
12. Full Settlement. The Company's obligation to make any payments
---------------
provided for in this Agreement and otherwise to perform its obligations
hereunder shall be in lieu and in full settlement of all other severance
payments to Executive under any other severance or employment agreement between
Executive and the Company, and any severance plan of the Company. The
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Company's obligations hereunder shall not be affected by any set-off,
counterclaim, recoupment, defense or other claim, right or action which the
Company may have against Executive or others. In no event shall Executive be
obligated to seek other employment or take other action by way of mitigation of
the amounts payable to Executive under any of the provisions of this Agreement
and, except as provided in Section 4(b), such amounts shall not be reduced
whether or not Executive obtains other employment.
13. Employment with Subsidiaries. Employment with the Company for
----------------------------
purposes of this Agreement shall include employment with any Subsidiary.
14. Survival. The respective obligations and benefits afforded to the
--------
Company and Executive as provided in Sections 4 (to the extent that payments or
benefits are owed as a result of a termination of employment that occurs during
the term of this Agreement), 5 (to the extent that Payments are made to
Executive as a result of a Change in Control that occurs during the term of this
Agreement), 6, 7, 8, 10(c) and 12 shall survive the termination of this
Agreement.
15. GOVERNING LAW; VALIDITY. THE INTERPRETATION, CONSTRUCTION AND
-----------------------
PERFORMANCE OF THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE INTERNAL LAWS OF THE STATE OF DELAWARE WITHOUT REGARD TO THE
PRINCIPLE OF CONFLICTS OF LAWS. 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 OTHER PROVISIONS SHALL REMAIN IN
FULL FORCE AND EFFECT.
16. Counterparts. This Agreement may be executed in counterparts, each
------------
of which shall be deemed to be an original and all of which together shall
constitute one and the same instrument.
17. Miscellaneous. No provision of this Agreement may be modified or
-------------
waived unless such modification or waiver is agreed to in writing and signed by
Executive and by a duly authorized officer of the Company. 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. Failure by Executive
or the Company to insist upon strict compliance with any provision of this
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Agreement or to assert any right Executive or the Company may have hereunder,
including without limitation, the right of Executive to terminate employment for
Good Reason, shall not be deemed to be a waiver of such provision or right or
any other provision or right of this Agreement. Except as otherwise specifically
provided herein, the rights of, and benefits payable to, Executive, his estate
or his beneficiaries pursuant to this Agreement are in addition to any rights
of, or benefits payable to, Executive, his estate or his beneficiaries under any
other employee benefit plan or compensation program of the Company.
IN WITNESS WHEREOF, the Company has caused this Agreement to be executed
by a duly authorized officer of the Company and Executive has executed this
Agreement as of the day and year first above written.
Global Industrial Technologies, Inc.
By:
-------------------------------
X. X. Xxxxxxx
Title: Chairman and
Chief Executive Officer
By:
-------------------------------
Xxxxxx X. Xxxxxx
Title: Vice President - Communications
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Schedule of Omitted Documents
1. Severance Agreement dated February 23, 1998 by and between the Company
and Xx. Xxxx X. Xxxxx; identical to the Severance Agreement with Xx. Xxxxxx
X. Xxxxxxx filed herewith, except as to the party.
2. Severance Agreement dated February 23, 1998 by and between the Company
and Xx. Xxxxxxx Xxxxxx; identical to the Severance Agreement with Xx. Xxxxxx
X. Xxxxxxx filed herewith, except as to the party.
3. Severance Agreement dated February 23, 1998 by and between the Company
and Xx. Xxxxx X. Xxxxxxx; identical to the Severance Agreement with Xxxxxx
X. Xxxxxx filed herewith.
4. Severance Agreement dated February 23, 1998 by and between the Company
and Xx. Xxxxxxx X. Xxxxxxx; identical to the Severance Agreement with Xxxxxx
X. Xxxxxx filed herewith.
