EXHIBIT 10.10
EMPLOYMENT AGREEMENT
Agreement dated June 1, 1995, between _____________ (the "Executive") and
COLTEC INDUSTRIES INC, a Pennsylvania corporation (the "Corporation").
WHEREAS, the Executive and the Corporation desire to set forth the terms
and conditions upon which the Executive shall be employed by the Corporation.
NOW, THEREFORE, in consideration of the foregoing and the mutual promises
herein contained, the parties agree as follows:
1. EMPLOYMENT TERM
The Corporation agrees to employ the Executive and the Executive agrees to
be employed by the Corporation, upon the terms and conditions contained in
this Agreement, for a period of three years commencing on the date hereof
and terminating on the third anniversary of the date hereof (the "Contract
Period"). The Contract Period shall be subject to earlier termination in
accordance with the provisions set forth in Section 5 below.
2. DUTIES
2.1 The Executive shall serve, subject to the supervision and control of the
Corporation's Chief Executive Officer, as Senior Vice President, Aerospace
of the Corporation with the responsibilities and authority, and status and
perquisites which have consistent with past practice, been delegated or
granted by the Corporation to an employee holding such position(s) or which
are customarily delegated or granted by similarly situated corporations to
an employee holding these position(s). If Executive is appointed to
additional offices by the Corporation during the Contract Period, the
Executive shall have the responsibilities and authority, and status and
perquisites consistent with the past practices of the Corporation or which
are customarily delegated or granted by similarly situated corporations to
an employee holding such position(s). Executive shall also perform any
additional
lawful services and assume any reasonable additional responsibilities, not
inconsistent with his position, as shall from time to time be assigned to
him by the Board of Directors of the Corporation (the "Board") or the Chief
Executive Officer.
2.2 Executive agrees that during the Contract Period, he shall devote
substantially all of his full working time and attention and give his best
effort, skill and abilities exclusively to the business and interests of
the Corporation; provided, however, that the foregoing shall not be
construed to prohibit Executive's service as a (i) director or officer of
any trade association, civic, educational or charitable organization or
governmental entity or, subject to approval by the Board, as (ii) a
director of any corporation which is not a competitor of the Corporation,
provided that such service by Executive does not materially interfere with
the performance by Executive of the responsibilities delegated under
Section 2.1 above.
2.3 Executive shall carry out all responsibilities delegated in Section 2.1
above at the Company's headquarters at 430 Park Avenue, New York, New York,
or at such other office or location within the continental United States as
the Board may, from time to time, deem appropriate after consultation with
Executive, except for travel reasonably required in the performance of
Executive's responsibilities.
3. COMPENSATION AND BENEFITS
Throughout the term hereof, unless otherwise specifically provided
elsewhere herein:
3.1 Executive shall receive an annual salary which is not less than his annual
salary on the date of this Agreement and shall have the opportunity for
periodic increases in accordance with the Corporation's regular practices.
3.2 Executive shall be entitled to participate, to the extent determined by the
Board, in all currently existing and future incentive compensation plans of
the Corporation including, but not limited to: the Annual Incentive Plan
for Certain Employees of Coltec Industries Inc and Its Subsidiaries, the
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1994 Long-Term Incentive Plan of Coltec Industries Inc and the Coltec
Industries Inc 1992 Stock Option and Incentive Plan (the "Incentive
Compensation Plans"), provided, however, that the Executive's
participation in all incentive compensation plans shall be at a level
customarily approved by the Board for an employee with Executive's
responsibilities and shall not in any case be less than Executive's level
of participation in such plans on the date of this Agreement. Any payment
to Executive under an Incentive Compensation Plan shall be calculated and
made in accordance with the provisions of the respective plan, except as
elsewhere provided for in this Agreement.
3.3 Executive shall be entitled to receive all employee benefits, fringe
benefits and perquisites (including but not limited to the use of company
cars, club memberships and financial planning services ("Company
Perquisites")) customarily made available to an employee with Executive's
responsibilities, and Executive shall be entitled to participate in all
applicable group, life, health, disability and accident insurance plans and
programs including, and not limited to, the Retirement Savings Plan, the
Retirement Program, Benefits Equalization Plan (the "BE Plan") and Family
Protection Plan as well as any other applicable Corporation benefit plans
and programs maintained currently upon terms and at levels no less
favorable than now exist or that shall be established or maintained in the
future for employees generally or for the Corporation's executives.
3.4 Executive shall be entitled to annual vacation and holidays in accordance
with the Corporation's established practice for its employees.
3.5 The Executive shall be entitled to receive reimbursement for all reasonable
out-of-pocket expenses incurred in performing his responsibilities
delegated in Section 2.1 above, provided that the Executive properly
accounts for such expenses in accordance with the Corporation's established
policies and the requirements of the Internal Revenue Code of 1986, as
amended.
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4. INDEMNIFICATION
The Executive shall be entitled to indemnification by the Corporation to
the fullest extent permitted by law in respect of any actions or omissions
which Executive has taken or has failed to take as an employee, officer or
director of the Corporation while carrying out the responsibilities
delegated under Section 2.1 above.
5. TERMINATION OF EMPLOYMENT
The Contract Period shall terminate prior to its term on the Date of
Termination as defined in Sections 5.2 or 5.3 below following receipt by
the Executive or the Corporation, as the case may be, of a Notice of
Termination as defined in Section 5.1 below.
5.1 "Notice of Termination" shall mean any purported termination of Executive's
employment by the Corporation or by Executive which shall be communicated
by written notice to the other party hereto in accordance with Section 8 of
this Agreement, and which shall (1) indicate the specific termination
provision in this Agreement relied upon, (2) 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 (3) set forth
the date on which the Executive's employment with the Corporation shall
terminate.
5.2 "Date of Termination" shall mean:
(a) thirty (30) days after Notice of Termination is given for termination
of employment due to Disability; provided that Executive shall not
have returned to the full-time performance of his duties during such
thirty (30) day period;
(b) the date of death in the event of Executive's death;
(c) at least thirty days (30) but not more than sixty (60) days after
Notice of Termination is given for termination of employment for Good
Reason in respect of a termination
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covered by Sections 6.6 or 6.7 below;
(d) at least fifteen days (15) after Notice of Termination is given for
termination of employment for Cause;
(e) at least fifteen days (15) after Notice of Termination is given for
retirement after the age of 55 years but before the age of 65 years to
the extent such retirement is permitted under the Retirement Savings
Plan, the Retirement Program or the BE Plan ("Early Retirement"); or
(f) the date specified in the Notice of Termination for termination of
employment for any other reason.
5.3 This Agreement shall automatically terminate upon the earlier of
Executive's 65th birthday or the receipt by the Corporation of a Notice of
Termination for Early Retirement as provided in Paragraph 5.2(e) above
("Retirement Termination").
6. COMPENSATION UPON TERMINATION OR DURING DISABILITY
6.1 For purposes of this Agreement, "Disability", "Cause", "Good Reason" and
"Change-in-Control" shall have the meanings set forth below:
(a) DISABILITY - If, as a result of Executive's incapacity due to physical
or mental illness, Executive shall have become eligible for benefits
under the applicable long-term disability plan or policy of the
Corporation, Executive's employment may be terminated by the
Corporation for "Disability".
(b) CAUSE - Termination by the Corporation of Executive's employment for
"Cause" shall mean termination upon:
(i) the prolonged or repeated absence from duty without the consent
of the Board for reasons other than the Executive's incapacity
due to physical or mental illness;
(ii) the acceptance by Executive of a position with another employer
which conflicts with his duties as
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an employee of the Corporation without the consent of the Board;
(iii) the willful engaging by Executive in conduct relating to the
Corporation which is demonstrably and materially injurious to
the Corporation after a written demand for cessation of such
conduct is delivered to Executive by the Board, which demand
specifically identifies the manner in which the Board believes
the Executive has engaged in such conduct and the injury to the
Corporation;
(iv) a willful material breach of an established written policy or
procedure of the Corporation;
(v) Executive's conviction for a crime involving moral turpitude; or
(vi) the breach of Executive's Agreement set forth in Section 10.1
below.
For purposes of this Paragraph, no act, or failure to act, on
Executive's part shall be deemed "willful" unless knowingly done, or
omitted to be done, by Executive not in good faith and without
reasonable belief that Executive's action or omission was in the best
interests of the Corporation.
(c) GOOD REASON - Executive shall be entitled to terminate his employment
for Good Reason. For purposes of this Agreement, "Good Reason" shall
mean the occurrence, without Executive's express written consent, of
any of the following circumstances unless such circumstances are fully
corrected prior to the Date of Termination (as defined in Section 5.2
above), specified in the Notice of Termination:
(i) the terms of this Agreement are materially adversely altered by
action of the Corporation or the Corporation breaches in any
material respect any of its agreements set forth herein;
(ii) the failure of the Corporation to obtain a
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satisfactory agreement, required in Section 8 below, from any
successor to assume and perform this Agreement (a copy of the
agreement evidencing such assumption shall be provided by the
Corporation to Executive);
(iii) any purported termination of Executive's employment which is not
effected pursuant to a Notice of Termination satisfying the
requirements set forth in Section 5 above; for purposes of this
Agreement, no such purported termination shall be effective; or
(iv) Executive makes a determination in good faith that the cumulative
effect of actions by one or more of the members of the Board or
their agents or associates constitutes harassment or unreasonable
interference with the performance of Executive's day-to-day
duties under this Agreement (after a written demand for cessation
of such actions is delivered by Executive to the Chief Executive
Officer and to the Board which demand specifically identifies the
manner in which Executive believes that such Chief Executive
Officer or Board members (or their agents or associates) have
harassed Executive or unreasonably interfered with Executive's
ability to perform his day-to-day duties); provided, however,
that appropriate involvement of the Chief Executive Officer or
the Board members in regular reviews of those items which have,
consistent with the Corporation's past practices, been normally
within the purview of the Chief Executive Officer or Board's
responsibilities as well as any bona fide business disagreements
between the Executive and the Corporation shall not be taken into
account by Executive in making his determination under this
Agreement.
(v) Relocation of the Executive's place of employment to a location
outside the continental United States or relocation of the
Executive's place of employment within the continental United
States without reimbursing Executive his cost of
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relocation at a level at least as favorable as that provided
under the Corporation's policy and practice in effect on the date
of this Agreement.
Executive's right to terminate his employment pursuant to this
Paragraph shall not be affected by his incapacity due to physical
illness. In addition, Executive's continued employment with the
Corporation shall not constitute waiver of Executive's rights under
this Paragraph (c) nor constitute consent to any act or omission by
the Corporation constituting Good Reason.
(d) CHANGE-IN-CONTROL - A Change-in-Control shall be deemed to occur as of
the date on which any of the following occur:
(i) the acquisition, other than from the Corporation, by any
individual, entity or group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities and Exchange Act of 1934,
as amended (the "Exchange Act") of beneficial ownership (within
the meaning of Rule 13d-3 promulgated under the Exchange Act) of
20 percent or more of either the then outstanding shares of
common stock of the Corporation or the combined voting power of
the then outstanding voting securities of the Corporation
entitled to vote generally in the election of directors; or
(ii) Individuals who, as of the date of this Agreement, constitute the
Board (the "Incumbent Board") cease for any reason to constitute
at least a majority of the Board, provided that any individual
becoming a director subsequent to the date hereof whose election,
or nomination for election by the Corporation's shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual was a member of the Incumbent Board, but excluding,
for this purpose, any such individual whose initial assumption of
office is in connection with an actual or threatened election
contest relating to the
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election of the directors of the Corporation (as such terms are
used in Rule 14a-11 of Regulation 14A promulgated under the
Exchange Act); or
(iii) Approval by the shareholders of the Corporation of (1) a
reorganization, merger or consolidation, in each case, with
respect to which the individuals and entities who were the
respective beneficial owners of the common stock and voting
securities of the Corporation immediately prior to such
reorganization, merger or consolidation do not, following such
reorganization, merger or consolidation, beneficially own,
directly or indirectly, more than 50 percent of, respectively,
the then outstanding shares of common stock, and the combined
voting power of the then outstanding voting securities entitled
to vote generally in the election of directors, as the case may
be, of the corporation resulting from such reorganization, merger
or consolidation; (2) a complete liquidation or dissolution of
the Corporation; or of (3) the sale or other disposition of all
or substantially all of the assets of the Corporation.
6.2 During any period of Disability and until the earlier of the end of the
Contract Period or Executive's death, Executive shall receive all accrued
but unpaid salary plus all amounts or benefits payable or due to him
(including a pro rata share under Incentive Compensation Plans earned
during the year in which the Disability occurs) under the Corporation's
compensation and benefit plans and programs in which Executive is
participating at the commencement of any such period, plus an additional
payment from the Corporation (if necessary) such that the aggregate amount
received by Executive in the nature of salary continuation from all sources
equals Executive's base salary at the rate in effect at the commencement of
any such period. Thereafter, Executive shall be entitled to participate in
all applicable group, life, Family Protection Plan, health, disability and
accident insurance plans and programs as well as any other applicable
Corporation benefit plans and programs (including, but not limited to the
1992 Stock Option and Incentive Plan) in accordance with the terms of such
plans and programs; provided that such terms shall not
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be less advantageous to Executive than the terms in effect as of the date
hereof.
6.3 If Executive's employment shall be terminated by reason of Executive's
death, the Executive shall be entitled to the benefits provided below:
(a) The Corporation shall pay to Executive's estate as soon as practicable
after the date of Executive's death, Executive's full base salary
through the date of Executive's death, at the rate in effect at the
time of Executive's death, plus all other amounts to which Executive
is entitled under any benefit or compensation plan of the Corporation
including, but not limited to, a pro rata share under Incentive
Compensation Plans earned during the year in which Employee's death
occurs.
(b) After Executive's death, Executive's beneficiaries shall be entitled
to participate in all applicable group, life, health, disability and
accident insurance plans and programs as well as any other applicable
Corporation benefit plans and programs including, but not limited to,
the 1992 Stock Option and Incentive Plan, in accordance with the terms
of such plans and programs.
6.4 If Executive's employment shall be terminated as a result of a Retirement
Termination or as a result of a voluntary resignation for other than Good
Reason ("Resignation"), then Executive shall receive all accrued but unpaid
salary plus all amounts payable to him under the Corporation's compensation
(including, but not limited to a pro rata share under Incentive
Compensation Plans earned during the year the Retirement Termination or
Resignation occurs) and benefit plans and programs in which Executive is
participating at the time the Retirement Termination or Resignation becomes
effective. In the event of a Retirement Termination, Executive shall be
entitled to participate in all retirement and other plans and programs
effective on the Date of Termination to which he is eligible in accordance
with their terms.
6.5 If Executive's employment shall be terminated by the
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Corporation for Cause, then Executive shall be entitled to the following
benefits:
(a) The Corporation shall pay Executive's full base salary through the
Date of Termination at the rate in effect at the time Notice of
Termination is given plus all other amounts to which Executive is
entitled under any benefit or compensation plan of the Corporation,
excluding any bonus, other incentive compensation and vacation pay, if
any, otherwise payable to Executive pursuant to the terms of the
applicable plan or program of the Corporation, at the time such
payments are due.
(b) Executive shall be entitled to participate in all applicable group,
life, health, disability and accident insurance plans and programs,
only to the extent required by the terms of such plans, or only to the
extent required by Federal or state law.
6.6 If Executive's employment shall be terminated (1) by the Corporation for
other than Cause, (2) by Executive for Good Reason other than Good Reason
as specified in Section 6.7 below ("Section 6.7 Good Reason") then
Executive shall be entitled to the following benefits:
(a) The Corporation shall pay Executive, as soon as practicable following
the date of termination a sum equal to Executive's full base salary
through the Date of Termination at the rate in effect at the time
Notice of Termination is given plus all other amounts to which
Executive is entitled under any benefit or compensation plan of the
Corporation (including but not limited to a pro rata share under
Incentive Compensation Plans earned during the year in which
employment is terminated).
(b) The Corporation shall pay Executive as soon as practicable following
the Date of Termination an additional payment equal to the sum of
Executive's full base salary plus the highest annual bonus received by
the Executive or by any individual serving as Senior Vice President,
Aerospace of the Corporation during any of the three previous years
multiplied by the higher of one (1) or the number of years (including
fractions thereof)
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remaining under the Contract Period.
(c) At Executive's option and as soon as practicable after his request,
the Corporation shall pay to Executive a sum of money equal to the
value of Executive's accrued balance of the BE Plan.
(d) For the longer of one year from the Date of Termination or until the
end of the Contract Period the Corporation shall continue to make
available to Executive all Company Perquisites, or, in the
alternative, the Corporation shall pay to Executive as soon as
practicable after Date of Termination a sum of money reasonably
approximating the cash value of the Company Perquisites.
Additionally, for such period of time Executive shall, subject to
Section 6.9, be allowed to participate in all applicable group, life,
health, disability and accident insurance plans and programs as well
as any other applicable Corporation benefit plans and programs
(including but not limited to the 1992 Stock Option and Incentive
Plan) as if he were an active employee (limited, in the case of
coverage under life insurance plans, to the level of coverage that the
Corporation is able to obtain on Executive's behalf based upon the
annual premium cost of providing Executive with life insurance during
Executive's last twelve months of employment with the Corporation), in
which Executive was participating 30 days prior to the time Notice of
Termination is given or comparable plans substituted therefor;
provided, however, that if Executive is ineligible (e.g., by operation
of law or the terms of the applicable plan) to continue to participate
in any such plan, the Corporation will provide Executive with a
comparable level of compensation or benefit.
6.7 If Executive's employment by the Corporation shall be terminated by
Executive for Good Reason where Executive has given Notice of Termination
to the Corporation within two years from the occurrence of an event
constituting a Change-of-Control, then Executive shall be entitled to the
benefits provided below.
(a) The Corporation shall pay Executive his full base salary
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through the Date of Termination at the rate in effect at the time
Notice of Termination is given, plus all other amounts to which
Executive is entitled under any benefit or compensation plan of the
Corporation (including but not limited to a pro rata share under
Incentive Compensation Plans earned during the year in which
employment is terminated).
(b) In lieu of any further base salary payments to Executive for period
subsequent to the Date of Termination, the Corporation shall pay to
Executive as severance pay a lump sum equal to three times (3x) the
sum of Executive's full base salary for one calendar year at the rate
in effect immediately prior to the time Notice of Termination is given
plus the highest annual bonus received by the Executive or any
individual serving as Senior Vice President, Aerospace of the
Corporation during any of the three preceding calendar years.
(c) In lieu of any further participation by Executive in the Family
Protection Plan, the Corporation shall transfer to Executive a fully
paid up insurance policy or policies then insuring the life of the
Executive pursuant to the terms of the Family Protection Plan, plus an
amount of money (the "Tax Adjustment") calculated to reimburse
Executive for any local, state or Federal income or other taxes which
he may be liable as a result of receiving the insurance policy or
policies and the Tax Adjustment amount.
(d) At Executive's option and as soon as practicable after his request,
the Corporation shall pay Executive a sum of money equal to the value
of Executive's accrued balance of the BE Plan.
(e) For three years from the Date of Termination the Corporation shall
continue to make available to Executive all Company Perquisites, or,
in the alternative, the Corporation shall pay to Executive as soon as
practicable after the Date of Termination a sum of money reasonably
approximating the cash value of the Company Perquisites.
Additionally, Executive shall, subject to Section 6.9, be allowed to
participate in all applicable
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group, life, health, disability and accident insurance plans and
programs as well as any other applicable Corporation benefit plans and
programs (including, but not limited to the 1992 Stock Option and
Incentive Plan) as if he were an active employee (limited, in the case
of coverage under life insurance plans, to the level of coverage that
the Corporation is able to obtain on Executive's behalf based upon the
annual premium cost of providing Executive with life insurance during
Executive's last twelve months of employment with the Corporation), in
which Executive was participating 30 days prior to the time Notice of
Termination is given or comparable plans substituted therefor;
provided, however, that if Executive is ineligible (e.g., by operation
of law or the terms of the applicable plan) to continue to participate
in any such plan, the Corporation will provide Executive with a
comparable level of compensation or benefit.
6.8 In addition to the benefits set forth in Sections 6.6 and 6.7, in the event
that Executive's employment shall be terminated (1) by the Corporation for
other than Cause, (2) by Executive for Good Reason other than Section 6.7
Good Reason, or (3) by Executive for Section 6.7 Good Reason then:
(a) The Company shall also pay to Executive all reasonable legal fees and
expenses incurred by Executive as a result of such termination
(including all such fees and expenses, if any, incurred in contesting
or disputing any such termination (including cost associated with
legal consultation even if no actual contest or dispute results) or in
seeking to obtain or enforce any right or benefit provided by this
Agreement or in connection with any tax audit or proceeding to the
extent attributable to the application of Section 4999 of the Internal
Revenue Code of 1986, as amended (the "Code"), to any payment or
benefit provided hereunder), except any such fees or expenses incurred
by Executive in seeking to enforce a claim which is determined by an
arbitrator, pursuant to Section 14 below, to have been frivolous in
nature or not brought or pursued in good faith.
(b) In the event that Executive becomes entitled to payments
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under the provisions of either Section 6.6 or 6.7 (the "Severance
Payments"), if Executive will be subject to the tax (the "Excise Tax")
imposed by Section 4999 of the Code, the Corporation shall pay to
Executive at the time or times specified in Paragraph (h) below, an
additional amount (the "Gross-Up Payment") such that the net amount
retained by Executive, after deduction of (i) any additional Excise
Tax payable by Executive as a result of Executive's receipt of the
Severance Payments and (ii) any additional federal, state and local
income tax and Excise tax payable by Executive as a result of
Executive's receipt of the Gross-Up Payments shall be equal to the
Severance Payments. For purposes of determining whether any of the
Severance Payments will be subject to the Excise Tax and the amount of
such Excise Tax, (i) the Severance Payments, payments provided for in
this paragraph and any other payments or benefits received or to be
received by Executive in connection with a Change-in-Control of the
Corporation or Executive's termination of employment (whether pursuant
to the terms of this Agreement or any other plan, arrangement or
agreement with the Corporation, any person whose actions result in a
Change-in-Control or any person affiliated with the Corporation or
such person) shall be treated as "parachute payments" within the
meaning of Section 280G(b)(2) of the Code, and all "excess parachute
payments" within the meaning of Section 280G(b)(1) shall be treated as
subject to the Excise Tax, unless and to the extent that in the
opinion of tax counsel selected by the Corporation's independent
auditors and acceptable to Executive, such other payments or benefits
(in whole or in part) do not constitute parachute payments, or such
excess parachute payments (in whole or in part) and represent
reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(4) of the Code in excess of the base amount
within the meaning of Section 280G(b)(3) of the Code, or are otherwise
not subject to the Excise Tax, (ii) the amount of the Severance
Payments which shall be treated as subject to the Excise Tax shall be
equal to the lesser of (A) the total amount of the Severance Payments
or (B) the amount of excess parachute payments within the meaning of
Section 280G(b)(1) (after applying clause (i) above),
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(iii) any payment pursuant to this Paragraph shall be treated as
subject to the Excise Tax in its entirety and (iv) the value of any
non-cash benefits or any deferred payment of benefit shall be
determined by the Corporation's independent auditors in accordance
with the principles of Sections 280G(d)(3) and (4) of the Code. For
purposes of determining the amount of the Gross-Up Payment, Executive
shall be deemed to pay federal income taxes at the highest marginal
rate of federal income taxation in the calendar year in which the
Gross-Up Payment is to be made and state and local income taxes at the
highest marginal rate of taxation in the state and locality of
Executive residence on the Date of Termination, not of the maximum
reduction in federal income taxes which could be obtained from
deduction of such state and local taxes. In the event that the Excise
Tax is subsequently determined to be less than the amount taken into
account hereunder at the time of termination of Executive's
employment, Executive shall repay to the Corporation at the time that
the amount of such reduction in Excise Tax is finally determined, the
portion of the Gross-Up Payment attributable to such reduction (plus
the portion of the Gross-Up Payment attributable to the Excise Tax and
federal and state and local income tax imposed on the Gross-Up Payment
being repaid by Executive) plus interest accrued from the date such
Gross-Up Payment is made to Executive to the date of such repayment on
the amount of such repayment at the rate provided in Section
1274(b)(2)(B) of the Code. In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder at the
time of the termination of Executive's employment (including by reason
of any payment the existence or amount of which cannot be determined
at the time of the Gross-Up Payment), the Corporation shall make an
additional gross-up payment in respect of such excess (plus any
interest payable with respect to such excess) at the time that the
amount of such excess is finally determined.
(c) The payments provided for in Paragraph (b) above shall be made at any
time during the 90-day period preceding each due date for making
payment of such Excise Taxes; provided, however, that if the amounts
of such payments
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cannot be finally determined on or before each such date, the
Corporation shall pay to Executive on such date an estimate, as
determined in good faith by the Corporation, of the minimum amount of
such payments and shall pay the remainder of such payments then due as
soon as the amount thereof can be determined. In the event that the
amount of the estimated payments exceeds the amount subsequently
determined to have been due, such excess shall constitute a loan by
the Corporation to Executive on the fifth day after demand by the
Corporation (together with interest at the rate provided in Section
1274(b)(2)(B) of the Code).
6.9 Executive shall be required immediately after the Date of Termination to
take reasonable steps to seek appropriate employment elsewhere; provided,
however, that if Executive obtains employment that would result in a
violation of the noncompetition provisions of Section 10 of this Agreement
and if Executive is unable to accept such employment because the
Corporation will not release Executive from Executive's noncompetition
obligation, Executive shall nevertheless be deemed to have satisfied the
requirement of this Section to seek other employment. Upon receipt of
written notice from Executive that Executive has been reemployed by another
company or entity on a full-time basis (or would have been reemployed but
for the noncompetition provisions of Section 10 of this Agreement) benefits
otherwise receivable by Executive pursuant to Subsections 6.6(d) or 6.7(e)
shall be reduced to the extent comparable benefits are made available to
Executive at his new employment and any such benefits actually received by
Executive shall be reported to the Corporation. Nothing herein contained
shall obligate Executive to accept employment elsewhere, where the duties,
status, responsibilities, compensation and benefits are not at least equal
to that of his current position.
7. SUCCESSORS; BINDING AGREEMENT
The Corporation will require any successor (whether direct or indirect, by
purchase, merger, consolidation or otherwise) to all or substantially all
of the business and/or assets of the Corporation to expressly assume and
agree to perform this
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Agreement in the same manner and to the same extent that the Corporation
would be required to perform it if no such succession had taken place.
Failure of the Corporation to obtain such assumption and agreement prior to
the effectiveness of any such succession shall be a breach of this
Agreement and shall entitle Executive to terminate this Agreement for Good
Reason. As used in this Agreement, "Corporation" shall mean the
Corporation and any successor to its business and or assets as aforesaid
which assumes and agrees to perform this Agreement by operation of law, or
otherwise.
8. NOTICE
For the purpose of this Agreement, notices and all other communications
provided for in the Agreement shall be in writing and shall be deemed to
have been duly given when delivered or mailed by United States registered
mail, return receipt requested, postage prepaid, addressed to the Executive
at 10 Westhaven Lane, White Plains, New York 10605, and to the Corporation
at 430 Park Avenue, New York, New York 10022 to the attention of the Board
with a copy to the Secretary of the Corporation or to such other address as
either party may have furnished to the other in writing in accordance
herewith, except that notice of change of address shall be effective only
upon receipt.
9. MODIFICATION; WAIVER
No provision of this Agreement may be modified, waived or discharged unless
such waiver, modification or discharge is agreed to in writing and signed
by Executive and such officer of the Corporation 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 shall be
deemed a waiver of similar or dissimilar provisions or conditions at the
same or at any prior or subsequent time.
10. NONCOMPETITION
10.1 Until the Date of Termination, Executive agrees not to enter
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into competitive endeavors and not to undertake any commercial activity
which is contrary to the best interests of the Corporation or its
affiliates, including becoming an employee, owner (except for passive
investments of not more than three percent of the outstanding shares of, or
any other equity interest in, any company or entity listed or traded on a
national securities exchange or in an over-the-counter securities market),
officer, agent or director of (a) any firm or person engaged in the
operation of a business engaged in the acquisition of industrial businesses
or (b) any firm or person which either directly competes with a line or
lines of business of the Corporation accounting for ten percent (10%) or
more of the Corporation's gross revenues or earnings before taxes or
derives ten percent (10%) or more of such firm's or person's gross revenues
or earnings before taxes from a line or lines of business which directly
compete with the Corporation. Notwithstanding any provision of this
Agreement to the contrary, Executive agrees that his breach of the
provisions of this Section 10.1 shall permit the Corporation to terminate
Executive's employment for Cause in accordance with Section 5.1(b) hereof.
10.2 After the Date of Termination and for a period of time equal in years to
the multiple of annual salary received by Executive pursuant to Sections
6.6(b) and 6.7(b) (the "Non-Competition Period"), Executive agrees not to
become an employee, owner (except for passive investments of not more than
three percent of the outstanding shares of, or any other equity interest
in, any company or entity listed or traded on a national securities
exchange or in an over-the-counter securities market), officer, agent or
director of any firm or person which directly and substantially competes
with a business of the Corporation accounting for ten percent (10%) or more
of the Corporation's gross revenues or earnings before taxes. During the
Non-Competition Period, Executive will be available to answer questions and
provide advice to the Corporation; provided, however, that such requirement
shall not unreasonably interfere with any other of Executive's activities
which Executive is then pursuing and which are not otherwise prohibited by
this Section 10. Also, during the Non-Competition Period, Executive will
retain in confidence any and all confidential information known to him
concerning the Corporation and its business and shall not use or disclose
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such information without the approval of the Corporation except to the
extent such information becomes public or as may be required by law.
10.3 Executive acknowledges and agrees that damages for breach of the covenant
not to compete in this Section 10 will be difficult to determine and will
not afford a full and adequate remedy, and therefore Executive agrees that
the Corporation, in addition to seeking actual damages pursuant to the
procedures set forth in Section 13 below, may seek specific enforcement of
the covenant not to compete in any court of competent jurisdiction,
including, without limitation, by the issuance of a temporary or permanent
injunction, without the necessity of a bond. Executive and the Corporation
agree that the provisions of this covenant not to compete are reasonable.
However, should any court or arbitrator determine that any provision of
this covenant not to compete is unreasonable, either in period of time,
geographical area, or otherwise, the parties agree that this covenant not
to compete should be interpreted and enforced to the maximum extent which
such court or arbitrator deems reasonable.
11. VALIDITY
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 shall remain in full force and effect.
12. COUNTERPARTS
This Agreement may be executed in several counterparts, each of which shall
be deemed to be an original but all of which together will constitute one
and the same instrument.
13. ARBITRATION
Except as contemplated by Section 10.3 of this Agreement, any dispute or
controversy arising under or in connection with this Agreement shall be
settled exclusively by arbitration in New York, New York, or other location
mutually agreed upon by the parties to the arbitration, in accordance with
rules of the American Arbitration Association, and judgment upon such
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award rendered by the arbitrator may be entered in any court having
jurisdiction over such proceeding.
14. GOVERNING LAW
This Agreement shall be governed by and construed and enforced in
accordance with the laws of the State of New York.
15. ENTIRE AGREEMENT; SURVIVAL OF CERTAIN PROVISIONS
This Agreement constitutes the whole agreement of the Corporation and the
Executive. No agreements or representations, oral or otherwise, express or
implied, with respect to the subject matter of this Agreement have been
made by either party which are not expressly set forth in this Agreement.
The obligations of the Corporation under Section 6 above and the
Executive's obligations under Section 10 above shall survive the expiration
of the term of this Agreement.
16. WITHHOLDING
Any payments made to Executive under this Agreement shall be paid net of
any applicable withholding required under Federal, state or local law.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the day and year first above written.
COLTEC INDUSTRIES INC
By _______________________
__________________________
EXECUTIVE
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