EXHIBIT 10.16
1997 FORM 10-K
AMENDMENT NO. 1
to
EMPLOYMENT AGREEMENT
AMENDMENT NO. 1 dated March 17, 1998 (this "Amendment") to EMPLOYMENT
AGREEMENT made and entered into November 7, 1996 (the "Original Agreement") by
and between BUCYRUS INTERNATIONAL, INC., a Delaware corporation formerly known
as Bucyrus-Erie Company, and DANIEL J. SMOKE.
TERMS used in this Amendment that are defined in the Original Agreement and
not defined otherwise in this Amendment shall have the meanings assigned to
such terms in the Original Agreement.
THE COMPANY and the Executive desire to amend and modify various provisions of
the Original Agreement:
NOW, THEREFORE, the parties hereby agree as follows:
1. Base Salary.
Effective as of November 7, 1997, the Executive's Base Salary shall be
increased to $185,000 per annum, with a retroactive payment to be made by the
Company to the Executive as soon as reasonably practicable.
2. Relocation Allowance.
After the Executive joined the Company, he relocated from Holland, Michigan,
and, in connection with such relocation, the Executive has been attempting to
sell his former residence in Holland, Michigan. The Company shall continue to
cover the Executive's sale of his former residence in Holland, Michigan under
the Company's Relocation of Salaried Employees Policy, and continue to
reimburse the Executive for his reasonable costs in connection with the sale
of his former permanent residence in Holland, Michigan, under the Company's
Relocation of Salaried Employees Policy, until September 30, 1998,
irrespective of any shorter time limits that may be provided for in such
Policy or the Original Agreement.
3. Change in Control.
3.1 The provisions of Section 10(b) and 10(c) of the Original Agreement
shall apply with respect to (i) the Change in Control of the Company that
resulted from the acquisition of the Company by American Industrial Partners
effective September 26, 1997 (the "AIP Change in Control") and (ii) any
subsequent Change in Control of the Company that takes place during the Term.
3.2 For purposes of any Change in Control of the Company other than the AIP
Change in Control:
(a) The definition of a "Change of Control of the Company" in Section
10(a)(ii) of the Original Agreement shall be modified as follows:
(i) Clause (A) shall be modified by replacing the phrase "on the date
of this Agreement" with "on September 26, 1997" and by changing "20%" to
"50%";
(ii) The first clause of Clause (D) shall be modified to read "During
any period of two consecutive years (but not including any period of
time prior to September 26, 1997,)"; and
(iii) Clauses (E) and (F) shall be deleted.
(b) The definition of "Qualifying Termination" in Section 10(a)(vi) of the
Original Agreement shall be modified by deleting clause (C) and inserting the
word "or" before clause (B).
(c) The provisions of Section 10(b) of the Original Agreement shall be
modified as follows:
(i) The reference to six (6) months in line 1 is changed to twelve
(12) months; and
(ii) The following proviso shall be added at the end of Section 10(b):
"provided, however, that if the Qualifying Termination is by the
Executive without Good Reason, the Severance Benefit shall be for a
period of twelve (12) months rather than eighteen (18) months."
3.3 For purposes of the definition of "Good Reason" in Section 10(a)(v) of
the Original Agreement, the phrase "Effective Date" in Clauses (B) and (C)
shall mean the date of this Amendment.
4. Options.
4.1 It is proposed that the Executive subscribe for and purchase up to 750
shares of the Company's Common Stock at a price of $100.00 per share.
4.2 If the Executive subscribes for and purchases shares of the Company's
Common Stock as described in Section 4.1, (i) the Executive will be granted
options ("Options") under the Company's 1998 Management Stock Option Plan (the
"Option Plan") and (ii) the Executive will enter into a Stockholders Agreement
(the "Stockholders Agreement") with the Company, American Industrial Partners
Acquisition Company, LLC, and certain other Management Stockholders.
4.3 The Options will have an Exercise Price of $100.00 per share, and the
number of Option Shares issuable upon exercise of the Options shall be seven
times the number of shares of Common Stock that the Executive subscribes for
and purchases as described in Section 4.1.
4.4 Notwithstanding anything in the Original Agreement, the Stockholders
Agreement, the Option Plan, or any Option to the Contrary, in the event of the
termination of the Executive's employment during the Term by the Company
without Cause, the unvested portion of any Options held by the Executive that
would otherwise have vested through the later of (i) January 1, 2000, or (ii)
one year following the effective date of the Executive's termination of
employment with the Company (the "Severance Vesting Date") shall immediately
vest, and all vested Options held by Executive (including those vesting
pursuant to this clause) shall remain exercisable through the Severance
Vesting Date, whereupon such Options shall terminate in full. In determining
the extent of such Option vesting, (a), it shall be assumed that all
performance-based targets for the Plan Year in which Executive's employment
terminates and all subsequent Plan Years through the Severance Vesting Date
are achieved at the 100% level, and (b) with respect to the Plan Year in which
the Severance Vesting Date occurs, such Option vesting shall be pro rata
through the Severance Vesting Date.
4.5 The provisions of Sections 5 and 6 of the Original Agreement, having
previously been performed, are hereby deleted and Section 10(d) of the
Original Agreement is deleted. Section 10(c) of the Original Agreement shall
be modified as follows:
(a) Clause (i) shall be modified by replacing the phrase "the Stock
Options and Stock Appreciation Rights granted to Executive under the Stock
Incentive Plan ("Options and SARs")" with "any Options granted to Executive
under the Option Plan ("Options")";
(b) Clause (i) shall be modified by deletion of the words "and SARs"
from line 11.
EXCEPT AS provided in this Amendment, the Original Agreement continues in full
force and effect in accordance with its terms.
BUCYRUS INTERNATIONAL, INC.
By: /s/ W. R. Hildebrand /s/Daniel J. Smoke
Its President & CEO DANIEL J. SMOKE