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Exhibit 10.2
AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
BETWEEN
IDEX CORPORATION
AND
XXXXX X. XXXXXXXXX
[XXXXXXX XXXX XXXXXXX XXXXX & GOODYEAR LETTERHEAD]
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AMENDED AND RESTATED
EMPLOYMENT AGREEMENT
THIS AGREEMENT, made as of the 22nd day of November, 1996, between IDEX
CORPORATION, a Delaware corporation with its executive offices at 000 Xxxxxx
Xxxx, Xxxxx 000, Xxxxxxxxxx, Xxxxxxxx 00000 ("IDEX"), and XXXXX X. XXXXXXXXX,
00 Xxxxxxx Xxxx, Xxxx Xxxxxx, Xxxxxxxx 00000 (the "Executive").
IDEX and the Executive entered into an Employment Agreement dated as of
January 22, 1988 (the "Effective Date") and executed by the Executive on May
10, 1989 and by IDEX on May 12, 1989 and subsequently amended as of January 13,
1993 and as of September 27, 1994. The parties now wish to modify certain
provisions of the Employment Agreement and to restate the Employment Agreement
in its entirety as modified. Therefore, IDEX and the Executive agree as
follows:
1. Introductory statement. The Executive has previously served as an
executive of Houdaille Industries, Inc. ("Houdaille"). IDEX purchased from
Houdaille all of the shares of stock of all of the active subsidiaries of
Houdaille other than Xxxx Xxxxx-Houdaille, Inc. (the "NonCrane Subsidiaries")
on January 22, 1988 and desires to secure the full-time services of the
Executive until at least the third anniversary of the Effective Date on the
terms and conditions as provided in this Agreement. The Executive is willing
to execute this Agreement with respect to his employment upon the terms and
conditions set
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forth in this Agreement. This Agreement amends and restates in its entirety
all previous employment agreements between the Executive and IDEX.
2. Agreement of employment. IDEX agrees to, and hereby does, employ the
Executive, and the Executive agrees to, and hereby does accept, employment by
IDEX, or one of its subsidiaries, as the case may be (hereafter in the
aggregate, the "Corporation"), as an executive of the Corporation, subject to
the provisions of the by-laws of the Corporation in respect of the duties and
responsibilities assigned from time to time by the Chief Executive Officer of
the Corporation and subject also at all times to the control of the Board of
Directors of the Corporation.
The Corporation shall not require the Executive to perform services
hereunder away from the Chicago, Illinois area of such frequency and duration
as would necessitate, in the reasonable judgment of the Executive, the
Executive moving his residence from the Chicago, Illinois area. Following an
Acquisition (as hereinafter defined), the Corporation shall not, in the
reasonable judgment of the Executive, (a) significantly reduce the scope of the
duties of the Executive hereunder or (b) significantly reduce the total
potential compensation of the Executive hereunder. If the Executive determines
in accordance
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with the preceding sentences that (a) the services required by the Corporation
necessitate that the Executive move his residence from the Chicago, Illinois
area, (b) the duties of the Executive hereunder have been significantly
reduced or (c) the total potential compensation of the Executive hereunder
has been significantly reduced, the Executive, in his sole discretion, may
deem that the Corporation has terminated his services and shall so notify the
Corporation in writing, in which case the Corporation shall be deemed to have
terminated the services of the Executive for all purposes of this Agreement
as of the date specified by the Executive in his notice to the Corporation.
3. Executive's obligations: vacations, automobile. During the period of
his full-time service under this Agreement, the Executive shall devote
substantially all of his time and energies during business hours to the
supervision and conduct, faithfully and to the best of his ability, of the
business and affairs of the Corporation, and to the furtherance of its
interests, and shall not accept other gainful employment except with the prior
consent of the Chief Executive Officer of the Corporation. With the approval
of the Chief Executive Officer of the Corporation, however, the Executive may
become a director, trustee or other fiduciary of other corporations, trusts or
entities. The Executive may take four weeks vacation each year with pay. The
Corporation shall furnish and maintain an
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automobile for the use of the Executive consistent with the policy of the
Corporation in effect at any time; provided, however, that at no time shall
the policy of the Corporation be materially less generous than the policy of
the Corporation in effect as of January 1, 1996.
4. Annual salary. The Corporation shall pay to the Executive for his
services under this Agreement a salary at the rate of $198,500 per year
commencing as of January 1, 1997, payable in equal monthly installments, and
continuing during the period of his full-time service hereunder; provided,
however, that the Corporation shall in good faith review the salary of the
Executive, on an annual basis, with a view to consideration of appropriate
increases in such salary. If the Executive dies during the period of his
full-time service hereunder, service for any part of the month of his death
shall be considered service for the entire month.
5. Period of service and benefits.
(a) Period of full-time service. The period of full-time service of the
Executive under this Agreement shall continue to the third anniversary of the
Effective Date, and for successive 12 month periods thereafter; provided,
however, that the Corporation may terminate at any time the full-time service
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of the Executive hereunder by delivering written notice of termination to the
Executive, or the Executive may resign and terminate his full-time service
hereunder at any time after the third anniversary of the Effective Date, by
delivering written notice of his intention to resign to the Corporation at
least 3 months prior to the effective date of such resignation.
In the event of termination of the Executive by the Corporation, the
Executive shall be entitled to receive his full annual salary and fringe
benefits in effect on the date of receipt of the notice of termination for a
continuing period of 24 months beginning with that month next following the
month during which he ceases to be actively employed. In the event of the
Executive's death, the balance of the continuing salary payments shall be made
to his wife, if surviving, or if not, to his estate in addition to any and all
other benefits payable under this Agreement upon his death.
In the event of resignation by the Executive as permitted by this
Agreement, the Executive shall be entitled to receive his full annual salary
and fringe benefits in effect on the date of receipt of the notice of
resignation for a continuing period to the effective date of his resignation
but not longer than three months.
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Except as otherwise provided in Section 5(c)(3), continuing fringe
benefits under this Section 5(a) shall be reduced to the extent of any fringe
benefits provided by and available to the Executive from any subsequent
employer but shall not be limited by the terms of any such fringe benefit of a
subsequent employer.
In the event of termination of the Executive by the Corporation or the
Executive's death or disability, the Executive or his estate shall receive a
cash bonus for the entire fiscal year in which such termination or death occurs
or disability commences. Such bonus shall be calculated in accordance with the
management incentive compensation program of the Corporation in effect from
time to time and shall in no event be less than the full target amount for the
Executive for such fiscal year. The bonus shall be payable in one lump sum in
accordance with and at the time prescribed by the Corporation's policy for
payment of annual bonuses to its executive employees for the year in which the
Executive's termination or death occurs or his disability commences. If no
policy of the Corporation then exists with regard to calculation and payment of
bonuses, the bonus shall be calculated and paid in accordance with the policy
of the Corporation in effect as of January 1, 1996.
In addition, in the event of either termination (including, without
limitation, because of the Executive's death
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or disability) of employment or resignation, the Executive shall receive
payment for accrued but unused vacation, which payment shall be equitably
prorated based on the period of active employment for that portion of
the fiscal year in which the termination or resignation becomes effective,
death occurs, or disability commences, plus payment for accrued but unused
vacation for the prior fiscal year. Payment for accrued but unused vacation
shall be payable in one lump sum on the effective date of termination or
resignation, the date of death (or as soon thereafter as practicable) or the
date disability commences.
In the event of termination of the Executive by the Corporation within 24
months following an "Acquisition" of the Corporation (as hereinafter defined),
the benefits to be provided to the Executive and his beneficiaries upon such
termination, regardless of the continued effectiveness of this Agreement or of
the provisions of this Section 5(a), shall be in an amount and character not
less generous than the benefits payable upon a termination of the Executive by
the Corporation as set forth in this Section 5(a). An "Acquisition" means (I)
any transaction or series of transactions which within a 12-month period
constitute a change of management or control where (i) at least 51 percent of
the then outstanding common shares of the Corporation are (for cash, property
(including, without limitation, stock in any corporation), or indebtedness, or
any combination thereof),
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redeemed by the Corporation or purchased by any person(s), firm(s) or
entity(ies), or exchanged for shares in any other corporation whether or not
affiliated with the Corporation, or any combination of such redemption,
purchase or exchange, or (ii) at least 51 percent of the Corporation's assets
are purchased by any person(s), firm(s) or entity(ies) whether or not
affiliated with the Corporation for cash, property (including, without
limitation, stock in any corporation) or indebtedness or any combination
thereof, or (iii) the Corporation is merged or consolidated with another
corporation regardless of whether the Corporation is the survivor, or
(II) any substantial equivalent of any such redemption, purchase, exchange,
change, transaction or series of transactions, merger or consolidation,
constituting such change of management or control. For purposes of this
paragraph, the term "control" shall have the meaning ascribed thereto under the
Securities Exchange Act of 1934, as amended, and the regulations thereunder,
and the term "management" shall mean the chief executive officer of the
Corporation. For purposes of clause (I)(ii) above or as appropriate for
purposes of clause (II) above, the Corporation shall be deemed to include on a
consolidated basis all subsidiaries and other affiliated corporations or other
entities with the same effect as if they were divisions.
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The benefits provided for under this section shall be in lieu of, and
not in addition to, any and all benefits to which the Executive and his
beneficiaries may be entitled under any bonus or severance program or policy
adopted by the Corporation from time to time unless otherwise expressly stated
therein.
(b)Death benefit. If the Executive dies during the period of his
full-time service hereunder, his wife, if surviving, or if not, his estate
shall be entitled to receive his full annual salary in effect on the date of
his death for a continuing period of nine months commencing on the first day
of the month immediately following the date of his death.
(c) (1) Retirement compensation and obligations. Upon the retirement or
resignation of the Executive or upon his termination from full-time service
with the Corporation, in either case pursuant to the provisions of this Section
5 hereof, the full-time service obligations of the Executive and the
Corporation to each other under Section Section 2, 3 and 4 hereof shall cease,
and the Executive shall be entitled to receive benefits and compensation as
specified in this Section 5 hereof.
(2) Guarantee of pension benefits. In addition to the
compensation otherwise provided herein, the Executive and his beneficiaries
shall be entitled to receive the retirement and
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death benefits they would receive at the times and under such optional
arrangements as the Executive is entitled to under the terms of any defined
benefit retirement or pension plan adopted and implemented by the Corporation
for its executive office employees in effect at the date of the Executive's
retirement, resignation or termination (for whatever reason) from full-time
service with the Corporation or at any time during the Executive's service
with the Corporation (any such plan is referred to hereafter as the "Plan")
(such Plan shall include a lump sum option) pursuant to the Plan provisions
as in effect at the point in time during the Executive's employment at which
the Plan would provide the greatest benefits for the Executive and his
beneficiaries and, in addition, the greatest latitude in choice of options
(including, but not limited to, a lump sum option), but in any event computed
without reference to (i) any restrictions in the Plan upon payments to the
Executive, as described in Section 1.401(a)(4)-5(b) of the Treasury
Regulations; (ii) any restrictions in the Plan upon the maximum contributions
to the Plan or upon the maximum benefits payable under the Plan, as the case
may be, pursuant to Section 415 of the Internal Revenue Code of 1986, as in
effect at such point in time (the "Code"); (iii) any limitations on the amount
of the Executive's compensation that may be taken into account under the Plan
pursuant to Section 401(a)(17) of the Code or any successor section; (iv) the
limitations on compensation that would exclude
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any income attributable to the exercise of the nonqualified stock options
granted in replacement of Equity Appreciation Rights granted under the First
Restatement of the Amended and Restated 1988 Equity Appreciation Rights Plan
or the 1989 Equity Appreciation Rights Plan (hereafter the "EAR Plans");
(v) for purposes of determining eligibility for a lump sum distribution, any
condition under the Plan considered necessary to receive a lump sum
distribution, such as the submission of medical evidence of reasonable health
of the Participant or the meeting of a specified age or service requirement
(in other words the lump sum distribution shall be an election solely in the
discretion of the Executive); or (vi) any other restriction on the Executive's
benefits as determined under the Plan pursuant to the Code, to the Employee
Retirement Income Security Act of 1974, as in effect at such point in time
("ERISA") or to any other law affecting the determination of such benefits.
However, except as specifically described otherwise in the preceding sentence,
all calculations pursuant to this Section 5(c)(2) of benefits shall be made
on the basis of the actual years of service to the Corporation, including any
Affiliated Corporation and Company as defined under the Plan, and actual
compensation of the Executive taken into account under the applicable Plan
provisions. In calculating the Executive's compensation and years of service
to the Corporation under the Plan for purposes of benefit accrual and to
determine active employment on any date relevant for any purpose under the
Plan,
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compensation shall be deemed to include amounts termed severance and service
shall be deemed to include the periods for which the Executive receives
payments termed severance (based on the period over which the severance amount
would have been paid if paid as compensation over the entire period as to
which severance is calculated) even if such amount is paid as a lump sum
settlement. To the extent that the benefits to which the Executive or his
beneficiaries are entitled under this Section 5(c)(2) are not paid from the
Trust under the Plan or from the IDEX Corporation Supplemental Executive
Retirement Plan, the Corporation shall pay such benefits directly from its
general assets.
If payments are being made, pursuant to this Section 5(c)(2), in the form
of an annuity or other periodic form of distribution, and the portion of the
total amount to be paid from the Trust under the Plan shall thereafter be
reduced after the date such payments have been determined pursuant to the
preceding paragraph, by virtue of the operation of restrictions in the Plan
upon payments to the Executive, as described in Section 1.401(a)(4)-5(b) of the
Treasury Regulations, or by virtue of the termination of the Plan (including
the operation of Section 4045 of ERISA or any successor section) or for any
other reason other than the operation of the provisions of the optional form
selected under the Plan, the Corporation shall increase, in an amount equal to
any such reduction, the amount of the benefit
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under this Section 5(c)(2) which is to be paid directly from its general
assets, and such increase shall be prorated over the remaining payments or
used to recalculate the annuity payments, as the case may be.
If payments are being made or have been made in full, pursuant to this
Section 5(c)(2), but the Executive or any of his beneficiaries is required to
make a payment to the Trustee under the Plan (whether in the form of a loss of
collateral, interest on such collateral or otherwise) as the result of the
application of the restrictions in the Plan upon payments to the Executive, as
described in Section 1.401(a)(4)-5(b) of the Treasury Regulations, or by virtue
of the termination of the Plan (including the operation of Section 4045 of
ERISA or any successor section) or for any other reason, the Corporation shall
reimburse the Executive or his beneficiaries, as the case may be, directly from
its general assets, for each such payment to the Trustee, and if the Executive
or any of his beneficiaries does not receive a deduction for federal, state
and/or local income tax purposes for such a payment and/or if such payment
would result in the imposition of any penalty tax because of such repayment,
then the amount of such reimbursement shall be increased by an amount such that
after payment by the Executive or his beneficiaries of all taxes, including,
without limitation, any interest or penalties imposed with respect to such
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reimbursement, the Executive or his beneficiaries retain an amount from the
Corporation approximately equal to the amount repaid to the Trustee.
In the event (I) the Executive requests a lump sum distribution from the
Trustee or Committee under the Plan and is denied the request, regardless of
the reason for the denial, or (II) (i) if the Plan is amended to eliminate the
lump sum distribution option on future benefit accruals or (ii) the Executive
is not otherwise entitled to a lump sum distribution under the Plan terms and,
in the case of (i) or (ii), the Executive states in writing to the Corporation
at any time prior to the Executive or his beneficiaries receiving a benefit
under the Plan that he otherwise would have requested the lump sum distribution
option, the Corporation shall pay the Executive, or his beneficiaries, as the
case may be, in cash in a single lump sum benefit, an amount equal to the
benefit hereinbefore determined less any amount received by the Executive or
his beneficiaries from the Plan directly or indirectly in a single payment,
regardless of the form of payment in which the benefit is being paid or is to
be paid under the Plan. In the case of a benefit provided under this
paragraph, the Corporation shall pay the Executive or his beneficiaries an
additional amount in cash in a single lump sum payment such that after payment
by the Executive or his beneficiaries of all federal, state, and/or
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local income taxes (including, without limitation, any interest or penalties
imposed with respect to such taxes) imposed upon such single lump sum payment,
the Executive or his beneficiaries retain an amount that would have been
retained by him or them (without regard to any limitations as described in the
first paragraph of this Section 5(c)(2)) had he or they directly rolled the
amount from the Plan into an individual retirement account. If the Executive
or his beneficiaries receive the single lump sum payment from the Corporation
under this paragraph, the Executive and his beneficiaries agree to waive and/or
return to the Corporation all benefits to him or them that he or they
subsequently receive from the Plan. Notwithstanding the preceding sentence, if
the Executive or any of his beneficiaries does not receive a deduction for
federal, state and/or local income tax purposes for such benefits and/or if
such benefits would result in the imposition of any penalty tax because of such
repayment, then the amount of such waiver and/or return to the Corporation
shall be decreased by an amount such that after payment by the Executive or his
beneficiaries of all taxes, including, without limitation, any interest or
penalties imposed with respect to such waiver and/or return, the Executive or
his beneficiaries incur no net expense from such benefits he or they
subsequently receive from the Plan. For purposes of this Section,
beneficiaries means the beneficiaries as determined under the Plan.
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Notwithstanding the preceding provisions of this Section 5(c)(2), in
calculating the benefit provided under this Section 5(c)(2) under the terms of
any Plan, compensation shall include in any year any amount otherwise excluded
from compensation in such year as a result of an election to defer income made
pursuant to the provisions of the IDEX Corporation 1996 Deferred Compensation
Plan for Officers and shall exclude in any year any amount that would otherwise
be included in compensation in a year which relates to an amount deferred in a
prior year under the provisions of the IDEX Corporation 1996 Deferred
Compensation Plan for Officers.
Notwithstanding the preceding provisions of this Section 5(c)(2), in
calculating the benefit provided under this Section 5(c)(2) under the terms of
the Plan, the following rules shall apply:
(a) In computing average compensation for purposes of any benefit
formula under the Plan, compensation shall not include any income
includable in the Executive's income for income tax purposes attributable
to the exercise of stock options granted in replacement for Equity
Appreciation Rights under the EAR Plans at any time.
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(b) An additional benefit under this Section 5(c)(2) shall be
payable in an amount equal to the benefit accrued at the rate provided in
the Plan's career average formula applied to the income includable in the
Executive's income for income tax purposes attributable to the exercise
of stock options granted in replacement of Equity Appreciation Rights
under the EAR Plans at any time.
(3) Medical benefits. The Executive and/or his wife, as the case
may be, shall be entitled to prompt reimbursement for all medical, dental,
hospitalization, convalescent, nursing, extended care facilities (including,
without limitation, long term care facilities such as convalescent and nursing
homes) and similar health and welfare expenses incurred by the Executive (or by
his wife in the event of the Executive's death or disability) for the Executive
or for the benefit of his wife or other dependents (hereinafter collectively
referred to as "medical benefits"). Such medical benefits shall continue at
all times while the Executive is employed by the Corporation, and thereafter
for the remainder of his life or the life of his wife, whichever shall be the
longer time, if (a) the Executive continues in the employ of the Corporation
until the commencement of his 56th year or (b) the Executive prior to the
commencement of his 56th year dies or becomes disabled while employed by the
Corporation or (c) the Executive ceases to be employed by the
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Corporation for any reason, whether voluntary or involuntary, at any time
following an Acquisition. The Corporation may, in its discretion, insure such
medical benefits; provided, however, that such benefits shall not be affected
by the existence or non-existence of any available insurance from any source,
shall not be limited by the terms of any such insurance or the failure of any
insurer to meet its obligations thereunder, shall not limit the Executive or
his wife or other dependents in the choice of any physician, medical care
facility or type of medical expenses in any way, and, except as provided in
the following sentence, shall not be affected by the availability of any
medical benefits provided by and available to the Executive from any
subsequent employer. Such medical benefits shall be reduced to the extent of
any medical benefits actually available and actually provided by any
subsequent employer to the Executive, his wife, or other dependents only
during the following periods:
(a) until the commencement of his 56th year if he ceases to be
employed by the Corporation as a result of his involuntary termination
following an Acquisition, or
(b) until the commencement of his 60th year if he ceases to be
employed by the Corporation as a result of his voluntary termination or
retirement prior to the commencement of his 60th year.
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Without limiting the foregoing, there shall be no such offset in the event of:
(a) termination for any reason after commencement of the Executive's
60th year,
(b) involuntary termination following an Acquisition, and after
commencement of the Executive's 56th year, or
(c) the death or disability of the Executive while in the active
employment of the Corporation.
In any case such reduction in medical benefits shall be only to the extent of
any medical benefits actually provided by and actually available to the
Executive (and/or his wife or other dependents) from any subsequent employer
without cost to the Executive (and/or his wife or other dependents) or subject
to full reimbursement of any such cost by the Corporation to the Executive
(and/or his wife or other dependents), but shall not be limited by the terms of
any such insurance or reimbursement. For purposes of this Agreement, the term
"medical expenses" shall include, but not be limited to, prescription drugs,
prosthetics, optical care (including corrective lenses) and travel and lodging
associated with medical expenses, with the selection of medical providers and
institutions and related travel and lodging to be
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solely in the discretion of the Executive (and/or his wife or other dependents).
(d) Confidentiality agreement. During the course of his employment, the
Executive has had and will have access to confidential information relating to
the lines of business of the corporation, its trade secrets, marketing
techniques, technical and cost data, information concerning customers and
suppliers, information relating to product lines, and other valuable and
confidential information relating to the business operations of the Corporation
not generally available to the public (the "Confidential Information"). The
parties hereby acknowledge that any unauthorized disclosure or misuse of the
Confidential information could cause irreparable damage to the Corporation.
The parties also agree that covenants by the Executive not to make unauthorized
use or disclosures of the Confidential Information are essential to the growth
and stability of the business of the Corporation. Accordingly, the Executive
agrees to the confidentiality covenants set forth in this section.
The Executive agrees that, except as required by his duties with the
Corporation or as authorized by the Corporation in writing, he will not use or
disclose to anyone at any time, regardless of whether before or after the
Executive ceases to be employed by the Corporation, any of the Confidential
Information
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obtained by him in the course of his employment with the Corporation.
The Executive agrees that since irreparable damage could result from his
breach of the covenants in this Section 5(d) of this Agreement, in addition to
any and all other remedies available to the Corporation, the Corporation shall
have the remedies of a restraining order, injunction or other equitable relief
to enforce the provisions thereof. The Employee consents to jurisdiction in
Lake County, Illinois on the date of the commencement of any action for
purposes of any claims under this Section 5(d). In addition, the Executive
agrees that the issues in any action brought under this section will be limited
to claims under this section, and all other claims or counterclaims under other
provisions of this Agreement will be excluded.
6. Compensation under this Agreement not exclusive. Except as expressly
stated to the contrary in this Agreement, the compensation and benefits payable
by the Corporation to the Executive under the provisions of this Agreement
shall be in addition to and separate and apart from such additional
compensation or incentives and such retirement, disability or other benefits as
the Executive may be entitled to under any present or future extra compensation
or bonus plan, stock option plan, share purchase agreement, pension plan,
disability
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insurance plan, medical insurance plan, life insurance program, or other plan
or arrangement of the Corporation established for its executives or
employees, and the provisions of this Agreement shall not affect any such
compensation, incentives or benefits. The Board of Directors of the
Corporation, in its discretion, may award the Executive such additional
compensation, incentives or benefits, pursuant to such plans or otherwise, as
it may from time to time determine.
7. Termination of this Agreement. This Agreement shall terminate when the
Corporation has made the last payment provided for hereunder; provided,
however, that the obligations set forth under Section 5(d) of this Agreement
shall survive any such termination and shall remain in full force and effect.
Without the written consent of the Executive, the Corporation shall have no
right to terminate this Agreement prior thereto. In the event the Executive,
or his beneficiaries, as the case may be, and the Corporation shall disagree as
to their respective rights and obligations under this Agreement, and the
Executive or his beneficiaries are successful in establishing, privately or
otherwise, that his or their position is substantially correct, or that the
Corporation's position is substantially wrong or unreasonable, or in the event
that the disagreement is resolved by settlement, the Corporation shall pay all
costs and expenses, including counsel fees, which the Executive or his
beneficiaries
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may incur in connection therewith directly to the provider of the services or
as may otherwise be directed by the Executive or his beneficiaries. The
Corporation shall not delay or reduce the amount of any payment provided
for hereunder or setoff or counterclaim against any such amount for any reason
whatever; it is the intention of the Corporation and the Executive that the
amounts payable to the Executive or his beneficiaries hereunder shall continue
to be paid in all events in the manner and at the times herein provided. All
payments made by the Corporation hereunder shall be final and the Corporation
shall not seek to recover all or any part of any such payments for any reason
whatsoever.
8. Additional payments by Corporation.
(a) Notwithstanding anything in this Agreement or any other agreement
to the contrary, in the event it shall be determined that any payment or
distribution by the Corporation or any affiliate (as defined under the
Securities Act of 1933, as amended, and the regulations thereunder) thereof
or any other person to or for the benefit of the Executive, whether paid or
payable or distributed or distributable pursuant to the terms of this
Agreement, pursuant to that certain shareholder purchase and/or sale agreement
between Executive and the Corporation made as of January 22, 1988, as amended
and restated, pursuant to all
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non-qualified stock option plans of the Corporation now or hereafter in effect,
pursuant to the IDEX Corporation Supplemental Executive Retirement Plan,
pursuant to the IDEX Corporation 1996 Deferred Compensation Plan for
Officers, any other plan of deferred compensation, or pursuant to any other
agreement or arrangement with the Corporation or any affiliate thereof now or
hereafter in effect (a "Payment"), would be subject to the excise tax imposed
by Section 4999 of the Code, or any successor statute thereto, or any interest
or penalties with respect to such excise tax (such excise tax, together with
any such interest and penalties, are hereinafter collectively referred to as
the "Excise Tax"), then the Executive shall be entitled to receive an
additional payment (a "Gross-Up Payment") in an amount such that after payment
by the Executive of all taxes (including, without limitation, any interest or
penalties imposed with respect to such taxes and any Excise Tax) imposed upon
the Gross-Up Payment, the Executive retains an amount of the Gross-Up Payment
equal to the Excise Tax imposed upon the Payments.
(b) The Executive and/or the Corporation shall notify each other in
writing as soon as practicable of any claim by the Internal Revenue Service
that, if successful, would require the payment by the Corporation of the
Gross-Up Payment. Such notification shall state the nature of such claim and
the date on
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which such claim is requested to be paid. Neither the Executive nor the
Corporation shall pay such claim for taxes prior to the expiration of
the thirty-day period following the date on which the notice is given (or such
shorter period ending on the date that any payment of taxes with respect to
such claim is due). If the Executive or Corporation (hereafter the "Notifying
Party") notifies the other party in writing prior to the expiration of such
period that it desires to contest such claim, such other party shall take such
action, in connection with contesting such claim as the Notifying Party shall
reasonably request in writing from time to time, including, without limitation,
accepting legal representation with respect to such claim by an attorney
selected by the Notifying Party and approved by the other party, provided,
however, that the Corporation shall bear and pay directly all costs and
expenses (including additional interest and penalties and counsel fees as
submitted) incurred in connection with such contest and shall indemnify and
hold the Executive harmless, on an after-tax basis, for any Excise Tax or
income tax, including interest and penalties with respect thereto, imposed as a
result of such representation and payment of costs and expenses. Furthermore,
if the Corporation is the Notifying Party, the Corporation's control of the
contest shall be limited to issues with respect to which a Gross-Up Payment
would be payable hereunder and the Executive shall be entitled to settle or
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contest, as the case may be, any other issue raised by the Internal Revenue
Service or any other taxing authority.
9. Assurances on liquidation. The Corporation agrees that until the
termination of this Agreement as above provided, it will not voluntarily
liquidate or dissolve, or enter into or be a party to any other transaction the
effect of which would be to materially reduce the net assets or operations of
the Corporation, without first making a written agreement with the Executive or
other beneficiary, satisfactory to and approved by him or such beneficiary in
writing within 30 days of receipt of a notice from the Corporation of such
proposed liquidation, dissolution or other transaction, in fulfillment of or in
lieu of its obligations to him or such beneficiary under this Agreement or any
other agreement, plan, policy or program of the Corporation or, in the absence
of such agreement, paying him or such beneficiary in a lump sum settlement of
all such obligations prior to such proposed liquidation, dissolution or other
transaction. Notwithstanding anything in the preceding sentence to the
contrary, in the event that pursuant to the preceding sentence the Corporation
is obligated to pay to the Executive or such beneficiary in a lump sum
settlement all of the obligations of the Corporation to the Executive or such
beneficiary under this Agreement or any other agreement, plan, policy or
program of the Corporation, the Executive or, in the event of his death or
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inability to act, his wife or, if not surviving, his eldest surviving child (or
in the event of their inability to act, such person who has the legal power to
act on their behalf), shall have the right, in his or her sole discretion, to
elect not to receive a lump sum settlement of the obligations of the
Corporation to the Executive or other beneficiary under Section 5(c)(3) of
this Agreement and, in lieu thereof, to receive a guaranty (including, without
limitation, a letter of credit), in form and substance satisfactory to the
Executive or other beneficiary, as the case may be, in his or her sole
discretion, of the payment of such obligations from any entity satisfactory to
the Executive or other beneficiary, as the case may be, in his or her sole
discretion. Any lump sum settlement shall reflect a reasonable assumption of
cost-of-living adjustments, if appropriate to such obligation, and shall be
determined using the mortality assumptions of the "applicable mortality table"
under Section 417(e) of the Code and either (i) the interest rate that would be
used (as of the date of payment) by the Pension Benefit Guaranty Corporation
for purposes of valuing a lump sum distribution upon a plan termination on the
January 1 of the calendar year in which the single sum is paid or (ii) the
"applicable interest rate" under Section 417(e) of the Code, determined as of
the first month of the calendar year in which the single sum is paid, whichever
would produce the greater single sum amount. For purposes of this Subsection,
the
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Corporation shall be deemed to include on a consolidated basis all
subsidiaries and other affiliated corporations or other entities with the same
effect as if they were divisions.
10. Definitions. For purposes of this Agreement, the term "year" shall
mean fiscal year, the term "dependents" shall have the same meaning as
pursuant to Section 152 of the Code and the terms "his 56th year" and "his
60th year" shall mean immediately following the Executive's 55th birthday and
59th birthday respectively. For purposes of this Agreement, disability shall
mean a disability which is, or has the potential to be, total and permanent and
because of which the Executive is or may become physically or mentally unable
to substantially perform his regular duties as an Executive of the Corporation.
Any question as to the existence, extent or potentiality of disability of the
Executive upon which the Executive and the Corporation cannot agree shall be
determined by a qualified independent physician selected by the Executive and
reasonably acceptable to the Corporation (or, if the Executive is unable to
make such selection, it shall be made by any adult member of his immediate
family). The determination of such physician made in writing to the
Corporation and to the Executive shall be final and conclusive for all purposes
of this Agreement.
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11. Amendments. This Agreement may not be amended or modified orally,
and no provision hereof may be waived, except in a writing signed by the parties
hereto, and specifically the agreement of any beneficiary, wife, dependents or
other potential or actual third party beneficiary shall not be required, except
as specifically provided for in this Agreement.
12. Assignment. This Agreement cannot be assigned by either party hereto
except with the written consent of the other.
13. Binding effect. This Agreement shall be binding upon and inure to the
benefit of the personal representatives and successors in interest of the
Executive and any successors in interest of the Corporation. In addition to
inuring to the benefit of the Executive, Section Section 5(a) and 5(b) are
intended to inure to the benefit of the Executive's beneficiaries, Section
5(c)(2) is intended to inure to the benefit of the Executive's beneficiaries,
to the extent contemplated in that provision, Section 5(c)(3) is intended to
inure to the benefit of the Executive's wife and his dependents, and Section
7, Section 8 and Section 9 are intended to inure to the benefit of the
Executive's beneficiaries; such provisions shall be enforceable by the
aforesaid beneficiaries, wife and/or dependents, as the case may be, who upon
the Executive's death shall be deemed successors in interest.
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14. Choice of law. This Agreement shall be governed by the law of the
State of Illinois (excluding the law of the State of Illinois with regard to
conflicts of law) as to all matters, including but not limited to matters of
validity, construction, effect and performance.
15. Notice. Except as otherwise provided in this Agreement, all notices
and other communications given pursuant to this Agreement shall be deemed to
have been properly given if personally delivered or mailed, addressed to the
appropriate party at the address of such party as shown at the beginning of
this Agreement, postage prepaid, by certified mail or by Federal Express or
similar overnight courier service. A copy of any notice sent pursuant to this
section shall also be sent to Xxxxxxx, Xxxx, Xxxxxxx, Xxxxx & Goodyear, 0000
Xxx X & X Xxxxx, Xxxxxxx, Xxx Xxxx, 00000, Attention: Xxxxxxx X. Xxxxx, Esq.
and Xxxxxx Xxxxxxx, Esq. Any party may from time to time designate by written
notice given in accordance with the provisions of this paragraph any other
address or party to which such notice or communication or copies thereof shall
be sent.
16. Severability of provisions. In case any one or more of the provisions
contained in this Agreement shall be invalid, illegal or unenforceable in any
respect, the validity, legality and enforceability of the remaining provisions
contained
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herein shall not in any way be effected or impaired thereby and this
Agreement shall be interpreted as if such invalid, illegal or unenforceable
provision was not contained herein.
17. Titles. Titles are provided herein for convenience only and are not to
serve as a basis for interpretation or construction of this Agreement.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Corporation has caused this Agreement to be executed in its name and on its
behalf as of the date first above written.
/s/ Xxxxx X. Xxxxxxxxx
-----------------------------------
Xxxxx X. Xxxxxxxxx
DATE OF EXECUTION: December 9, 1996
IDEX CORPORATION
By /s/ Xxxxxx X. Xxxxx
--------------------------------
Xxxxxx X. Xxxxx, President
DATE OF EXECUTION: December 9, 1996
The undersigned hereby executes this Amendment to evidence her agreement
to be bound by the terms of Subsection 5(c)(2) of the Employment Agreement.
/s/ Xxxxxx X. Xxxxxxxxx
--------------------------------
Xxxxxx X. Xxxxxxxxx
DATE OF EXECUTION: December 9, 1996
