EXHIBIT 10.21
Bucyrus International, Inc.
1100 Milwaukee Avenue
South Milwaukee, Wisconsin 53172-0500
July 27, 2004
Mr. Timothy W. Sullivan
President and Chief Executive Officer
Bucyrus International, Inc.
1100 Milwaukee Avenue
South Milwaukee, Wisconsin 53172-0500
Dear Tim:
This Letter Agreement will serve as an amendment and restatement
of all prior agreements entered into by and between you and Bucyrus
International, Inc. (the "Company"). Upon the effectiveness of this
Letter Agreement, all such prior agreements will be superceded and will
become null and without effect.
1. You will serve as the President and Chief Executive Officer of the
Company, reporting directly to the Company's Board of Directors
(the "Board"). In this position, you will be responsible for the
oversight of the day-to-day operations of the Company's business
and its strategic direction. You will also serve as a member of
the Board, without additional compensation for such service. Your
employment will continue subject to termination by either you or
the Company as outlined herein.
2. Your annual base salary will be $500,000, subject to review by the
Board from time to time. Your base salary will be paid in
accordance with the normal payroll practices of the Company. You
will be eligible to participate in the Company's Executive Officer
Incentive Plan and its equity-based compensation plans, in each
case, in accordance with the terms thereof and such agreements as
you may enter into thereunder.
3. Your continued employment with the Company will be subject to your
compliance with each provision of the restrictive covenants set
forth as Exhibit A to this Letter Agreement, which is incorporated
into and made part of this Letter Agreement.
4. You will be entitled to participate in all employee benefit plans
and programs generally applicable to senior executives of the
Company, including medical, dental, life insurance, disability
insurance and retirement plans, subject to eligibility
requirements and generally applicable terms of such plans. Your
retirement benefits will be based on all service with the Company,
including service prior to your rehire date, but you will not
receive any service for the periods during which you were not an
employee of the Company.
5. Your employment may be terminated by the Company at any time, with
or without cause. In the event your employment is terminated by
the Company for any reason other than cause, you will be entitled
to continuation of your base salary for one year immediately
following the effective date of termination, paid in accordance
with the normal payroll practices of the Company. Such salary
continuation will be in lieu of severance benefits under any other
Company severance plan, policy or arrangement. Except as required
by law or set forth in a relevant Company compensation or benefit
plan or agreement thereunder, no additional payments or benefits
will be paid to you in the event of the termination of your
employment.
6. Miscellaneous.
(a) Successors; Binding Agreement. This Agreement will inure to
the benefit of and be binding upon the Company's and your
personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees
and legatees, as applicable.
(b) Assignment. The services to be performed by you hereunder
are specific to you and may not be assigned by you. The
Company may not assign this Letter Agreement, or your
services hereunder, except to a person or entity that
acquires all or substantially all of the Company's business.
(c) Notice. For the purposes of this Letter Agreement, notices,
demands and all other communications will be in writing and
will be deemed to have been duly given when delivered by
hand (with receipt) or (unless otherwise specified) mailed
by United States certified or registered mail, return
receipt requested, postage prepaid, addressed as follows:
if to you, at your most recent address shown in the records
of the Company; and if to the Company, to the Company's
headquarters at 1100 Milwaukee Avenue, South Milwaukee,
Wisconsin 53172-0500, to the attention of: the Company's
Vice President Human Resources.
(d) Modification; Waiver. No provisions of this Letter Agree-
ment may be modified, waived or discharged unless such
waiver, modification or discharge is agreed to in writing
signed by you and the Chairman of the Board or such officer
of the Company as may be specifically designated by the
Board. No waiver by either party hereto at any time of any
breach by the other party hereto of, or compliance with, any
condition or provision of this Agreement to be performed by
such other party will be deemed a waiver of similar or dis-
similar provisions or conditions at the same or at any prior
or subsequent time.
(e) Governing Law; Interpretation. The validity,
interpretation, construction and performance of this Letter
Agreement will be governed by the laws of the State of
Wisconsin without regard to its conflicts of law principles.
The obligations of the Company and you under this Section 6
and Section 5 and Exhibit A hereto will survive the
termination of your employment with the Company.
(f) Withholding. Any amounts payable pursuant to this Letter
Agreement will be subject to applicable tax withholding, and
the Company may require a cash payment with respect to such
obligations as a condition of any such payment.
(g) Validity. The invalidity or unenforceability of any
provision or provisions of this Letter Agreement will not
affect the validity or enforceability of any other provision
of this Letter Agreement, which will remain in full force
and effect.
(h) Entire Agreement. This Letter Agreement sets forth the
entire agreement of the parties hereto in respect of the
subject matter contained herein and supersedes all prior
agreements, promises, covenants, arrangements, communica-
tions, representations or warranties, whether oral or
written, by any officer, employee or representative of any
party hereto, including but not limited to the letter
agreement between you and the Company dated as August 8,
2000 and all amendments thereto. No agreements or
representations, oral or otherwise, express or implied, with
respect to the subject matter hereof have been made by
either party which are not set forth expressly in this
Letter Agreement.
(i) Counterparts. This Letter Agreement may be executed in one
or more counterparts, each of which will be deemed to be an
original but all of which together will constitute one and
the same instrument.
If you are in agreement with the foregoing, please execute this
Letter Agreement in the space provided and return it to the undersigned.
ACKNOWLEDGED AND AGREED: BUCYRUS INTERNATIONAL, INC.
/s/ Timothy W. Sullivan /S/ Frank P. Bruno
Timothy W. Sullivan By: Frank P. Bruno
Title: Vice President - Human
Resources
EXHIBIT A
RESTRICTIVE COVENANTS
For purposes of this Exhibit A, "Executive" will mean Timothy W.
Sullivan, President and Chief Executive Officer of Bucyrus
International, Inc.
1. Protection of Confidential Information. Executive acknowledges
that during the course of his employment with the Company, its
subsidiaries and affiliates, he will be exposed to documents and
other information regarding the confidential affairs of the
Company, its subsidiaries and affiliates, including without
limitation information about their past, present and future
financial condition, the markets for their products, key
personnel, past, present or future actual or threatened
litigation, trade secrets, current and prospective customer lists,
vendor sources, operational methods, acquisition plans, prospects,
plans for future development and other business affairs and
information about the Company and its subsidiaries and affiliates
not readily available to the public (the "Confidential
Information"). Executive further acknowledges that the services
to be performed by him as an employee of the Company in the
positions of President and Chief Executive Officer are of a
special, unique, unusual, extraordinary and intellectual
character. In recognition of the foregoing, Executive covenants
and agrees as follows:
1.1 No Disclosure or Use of Confidential Information. At no
time will Executive ever divulge, disclose, or otherwise use
any Confidential Information for purposes other than
carrying out his duties as an employee of the Company in the
best interests of the Company, unless and until such
information is readily available in the public domain by
reason other than Executive's unauthorized disclosure or use
thereof, unless such disclosure or use is expressly
authorized by the Board in writing in advance of such
disclosure.
1.2 Return of Company Property, Records and Files. Upon the
termination of Executive's employment with the Company at
any time for any reason, or at any other time the Board may
so direct, Executive will promptly deliver to the Company's
offices in South Milwaukee, Wisconsin all of the property
and equipment of the Company, its subsidiaries and
affiliates (including any cell phones, pagers, credit cards,
personal computers, etc.) and any and all documents,
records, and files, including any notes, memoranda, customer
lists, reports and any and all other documents, including
any copies thereof, whether in hard copy form or on a
computer disk or hard drive, which relate to the Company,
its subsidiaries, affiliates, successors or assigns, and/or
their respective past and present officers, directors,
employees or consultants (collectively, the "Company
Property, Records and Files"); it being expressly understood
that, upon termination of Executive's employment, Executive
will not be authorized to retain any of the Company
Property, Records and Files, except to the extent expressly
so authorized in writing by the Board.
2. Noncompetition. During the term of Executive's employment with
the Company and for the two-year period immediately following the
date of termination of Executive's employment at any time and for
any reason (the "Restricted Period"), Executive will not, directly
or indirectly, (i) enter the employ of, or render any consulting
services to, any entity that competes with the Company, or its
subsidiaries, affiliates (provided that such term as used in this
Section 2 will not include entities that are affiliates of the
Company solely by reason of being affiliates of American
Industrial Partners Capital Fund II, L.P.), successors, or
assigns, in the conduct of the "Business" (as defined in this
Section 2) in the United States and/or any foreign country within
which, during the 12-month period preceding Executive's
termination of employment, the Company, or its subsidiaries,
affiliates, successors, or assigns, engaged in the Business; or
(ii) assist or participate in any such competing entity in any
capacity, including without limitation, as an individual, partner,
shareholder, officer, director, principal, agent, trustee or
consultant; provided, however, Executive may own, directly or
indirectly, solely as a passive investment, securities of any
entity traded on any national securities exchange if Executive is
not a controlling person of, or a member of a group which
controls, such entity and does not, directly or indirectly own 5%
or more of any class of securities of such entity. For purposes
of this Section 2, the "Business" will mean (x) the manufacture
and/or sale of surface mining equipment and spare parts of the
kind manufactured, sold and provided by the Company or any
subsidiary, affiliate, successor or assign at any time during the
term of Executive's employment with the Company and which the
Company continues to manufacture, sell or produce during the
Restricted Period; (y) maintenance and service related to the
equipment and spare parts referenced in subsection (x) above; and
(z) the manufacture and/or sale of, and maintenance and service
related to, any surface mining equipment with respect to which,
prior to the date of termination of Executive's employment
hereunder, the Company or any subsidiary, affiliates, successor or
assign has or will have made a material financial investment in
contemplation of manufacturing, selling, maintaining or servicing.
3. Noninterference. During the term of Executive's employment with
the Company and for the Restricted Period, Executive will not,
directly or indirectly, solicit, induce, or attempt to solicit or
induce any officer, director, employee, agent or consultant of the
Company or any of its subsidiaries, affiliates, successors or
assigns to terminate his, her or its employment or other
relationship with the Company or its subsidiaries, affiliates,
successors or assigns for the purpose of associating with any
competitor of the Company or its subsidiaries, affiliates,
successors or assigns, or otherwise encourage any such person or
entity to leave or sever his, her or its employment or other
relationship with the Company or its subsidiaries, affiliates,
successors or assigns for any reason, other than pursuant to the
discharge of Executive's duties as an employee of the Company.
4. Nonsolicitation. During the term of Executive's employment with
the Company and for the Restricted Period, Executive will not,
directly or indirectly, solicit, induce, or attempt to solicit or
induce any customers, clients, vendors, suppliers, or consultants
then under contract to the Company or its subsidiaries,
affiliates, successors or assigns, to terminate his, her or its
relationship with the Company or its subsidiaries, affiliates,
successors or assigns, for the purpose of associating with any
competitor of the Company or its subsidiaries, affiliates,
successors or assigns, or otherwise encourage such customers,
clients, vendors, suppliers or consultants then under contract to
terminate his, her or its relationship with the Company or its
subsidiaries, affiliates, successors or assigns for any reason,
other than pursuant to the discharge of Executive's duties as an
employee of the Company.
5. Rights and Remedies upon Breach of a Restrictive Covenant. If
Executive breaches, or threatens to commit a breach of, any of the
provisions of Sections 1 through 4 above (the "Restrictive
Covenants"), the Company and its subsidiaries, affiliates,
successors or assigns will have the following rights and remedies,
each of which will be independent of the others and severally
enforceable, and each of which will be in addition to, and not in
lieu of, any other rights or remedies available to the Company or
its subsidiaries, affiliates, successors or assigns at law or in
equity.
5.1 Specific Performance. The right and remedy to have the
Restrictive Covenants specifically enforced by any court of
competent jurisdiction by injunctive decree or otherwise, it
being agreed that any breach or threatened breach of the
Restrictive Covenants would cause irreparable injury to the
Company or its subsidiaries, affiliates, successors or
assigns and that money damages would not provide an adequate
remedy to the Company or its subsidiaries, affiliates,
successors or assigns.
5.2 The right and remedy to require Executive to account for and
pay over to the Company or its subsidiaries, affiliates,
successors or assigns, as the case may be, all compensation,
profits, monies, accruals, increments or other benefits
derived or received by Executive as a result of any
transaction or activity constituting a breach of any of the
Restrictive Covenants.
5.3 Severability of Covenants. Executive acknowledges and
agrees that the Restrictive Covenants are reasonable and
valid in geographic and temporal scope and in all other
respects. If any court determines that any of the
Restrictive Covenants, or any part thereof, is invalid or
unenforceable, the remainder of the Restrictive Covenants
will not thereby be affected and will be given full force
and effect without regard to the invalid portions.
5.4 Modification By the Court. If any court determines that any
of the Restrictive Covenants, or any part thereof, is
unenforceable because of the duration or scope of such
provision, such court will have the power to reduce the
duration or scope of such provision, as the case may be (it
being the intent of the parties that any such reduction be
limited to the minimum extent necessary to render such
provisions enforceable), and, in its reduced form, such
provision will then be enforceable.
5.5 Enforceability in Jurisdictions. Executive intends to and
hereby confers jurisdiction to enforce the Restrictive
Covenants upon the courts of any jurisdiction within the
geographic scope of such covenants. If the courts of any
one or more of such jurisdictions hold the Restrictive
Covenants unenforceable by reason of the breadth of such
scope or otherwise, it is the intention of the Executive
that such determination not bar or in any way affect the
right of the Company or its subsidiaries, affiliates,
successors or assigns to the relief provided herein in the
courts of any other jurisdiction within the geographic scope
of such covenants, as to breaches of such covenants in such
other respective jurisdictions, such covenants as they
relate to each jurisdiction being, for this purpose,
severable into diverse and independent covenants.
5.6 Executive agrees that the Company will be entitled to
recover from Executive all costs, including attorneys' fees
and expert witness fees, which the Company incurs in
enforcing the Restrictive Covenants or pursuing damages for
the Executive's breach of the Restrictive Covenants.