EXHIBIT 10(18)
AZZ incorporated
1300 South University Drive, Suite 200
Fort Worth, Texas 76107
[CLASS B]
December 18, 2001
___________________________
___________________________
___________, ________ _____
Dear _______________:
AZZ incorporated (the "Company") considers it essential to the best
interest of its shareholders to foster the continued employment of key personnel
such as yourself (sometimes referred to below as the "Executive") in the event
of a change in control of the Company, whether it be on a friendly or an
unfriendly basis. The Company's Board of Directors (the "Board") recognizes that
the uncertainty which would result from a change in control could cause key
management personnel to terminate their employment at a time that their
continued employment is especially critical to the Company and its shareholders.
In order to encourage its key management personnel to remain with the
Company through a change in control and its aftermath, and in order to encourage
their continued attention and dedication and to avoid the distraction that would
exist in the absence of financial security, the Company is proposing that it
enter into this letter agreement (the "Agreement") with you under which you will
receive certain benefits in the event your employment by the Company is
terminated within a specified period subsequent to a change in control of the
Company (as defined in Section 4(a) below).
1. Term of Agreement. This Agreement shall commence on the date
hereof and shall continue in effect through March 1, 2002, provided, however,
that commencing on March 1, 2002 and each March 1 thereafter, the term of this
Agreement shall automatically be extended for one additional year unless, not
later than by November 30 of the preceding year, the Company shall have given
notice that it does not wish to extend this Agreement and provided, further,
that notwithstanding any such notice (the "Notice") by the Company not to
extend, if a Change in Control of the Company (each as hereinafter defined)
shall have occurred during the original or extended term of this Agreement, this
Agreement shall continue in effect until the latter of (i) the end of the
original or extended term; (ii) two years beyond the date on which the Change in
Control occurred; or (iii) until all payments, if any, required to be made by
the Company or otherwise to you under this Agreement shall have been paid in
full.
December 18, 2001
Page 2
2. Definitions. As used in this Agreement, the following terms shall
have the following meanings:
(a) Cause. A termination shall be for "Cause" if: (i) Executive is
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convicted of a crime involving moral turpitude or a crime providing
for a term of imprisonment in a federal or state penitentiary; or (ii)
Executive commits any willful malfeasance or gross negligence in the
discharge of duties to the Company or any of its subsidiaries, having
a material adverse effect on the Company or any of its subsidiaries,
their business or reputation; or (iii) Executive fails to correct
within five days after written notice from the Board, any specific
failure in performance of the duties of the Executive's position with
the Company.
(b) Disability. "Disability" shall mean, to the extent permitted by law
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and subject to the Americans with Disabilities Act or any applicable
state or local counterpart, those conditions described in the
definition of "disabled" or "disability" under the Company's long-term
disability benefit program.
(c) Employee Plan. "Employee Plan" shall mean an employee benefit plan of
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the Company or a trustee or other fiduciary holding securities for
such a plan.
(d) Good Reason. "Good Reason" shall mean, without your express written
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consent, the occurrence after a Change in Control of the Company of
any of the following circumstances unless, in the case of paragraphs
A, B, E, F, G, or H, such circumstances are fully corrected within 15
days of notice, which shall be given by the Executive to the Company,
of the existence of such a circumstance:
(A) The assignment of duties to you inconsistent with your present
status as ____________________ of the Company (or such other
title or titles as you may be holding immediately prior to the
Change in Control of the Company) or a substantial adverse
alteration in the nature or status of your responsibilities from
those in effect immediately prior to the Change in Control of the
Company;
(B) A reduction by the Company in your annual base salary in effect
on the date of the Change in Control of the Company;
(C) The relocation of the Company's principal executive offices to a
location outside of Tarrant County, Texas (or, if different, the
metropolitan area in which such offices are located immediately
prior to the change in control of the Company) or the Company's
requiring
December 18, 2001
Page 3
you to be based anywhere other than a site less than thirty (30)
miles from the site where you are now principally based except
for (i) required travel on Company business to an extent
substantially consistent with your present business travel
obligations and (ii) proposed relocations of which you have
already been informed in writing on or prior to the date of this
Agreement or to which you may hereafter consent;
(D) The failure by the Company, without your consent, to pay to you
any portion of your current compensation, after the same shall
have become due and payable and within seven (7) days after
receipt by the Company of written notice from you specifying that
such compensation is due and has not been paid;
(E) The failure by the Company to continue in effect any compensation
plan in which you participate immediately prior to the Change in
Control of the Company which is material to your total
compensation, unless an equitable arrangement (embodied in an
ongoing substitute or alternative plan) has been made with
respect to such plan, or the failure by the Company to continue
your participation therein on a basis not materially less
favorable, both in terms of the amount of benefits provided and
the level of your participation relative to other participants,
as existed at the time of the Change in Control of the Company;
(F) The failure of the Company to continue to provide you with
benefits substantially similar to those enjoyed by you under the
AZZ incorporated Employee Benefit Plan & Trust or under any of
the Company's other deferred compensation plans, life insurance,
medical, health and accident, or disability plans in which you
were participating at the time of the Change in Control of the
Company, the taking of any action by the Company which would
directly or indirectly materially reduce any of such benefits or
deprive you of any material fringe benefit enjoyed by you at the
time of the Change in Control of the Company, or the failure by
the Company to provide you with the number of paid vacation days
to which you are entitled on the basis of any employment contract
with you or years of service with the Company in accordance with
the Company's normal vacation policy for officers in effect at
the time of the Change in Control of the Company;
December 18, 2001
Page 4
(G) The failure of the Company to obtain a satisfactory agreement
from any successor to assume and agree to perform this Agreement,
as contemplated in Section 4 hereof; or
(H) Any purported termination of your employment by the Company
except because of total disability, death or for Cause.
3. Potential Change in Control. For purposes of this Agreement, a
"Potential Change in Control of the Company" shall be deemed to have occurred if
(a) the Company enters into an agreement, consummation of which would result in
the occurrence of a Change in Control of the Company; (b) any person (including
the Company) publicly announces an intention to take or to consider taking
actions which if consummated would constitute a Change in Control of the
Company; (c) any person, other than an Employee Plan, who is or becomes the
beneficial owner, directly or indirectly, of 10% or more of the Common Stock
then outstanding, increases his beneficial ownership of such securities by 5% or
more of the Common Stock then outstanding; or (d) the Board adopts a resolution
to the effect that, for purposes of this Agreement, a Potential Change in
Control of the Company has occurred. You agree that, subject to the terms and
conditions of this Agreement, in the event of a Potential Change in Control of
the Company, you will remain in the employment of the Company until the earliest
of (i) a date which is nine (9) months after the occurrence of such Potential
Change in Control of the Company, (ii) the termination by you of your employment
with the Company by reason of death or Disability as defined in Subsection 2(b)
or (iii) the occurrence of a Change in Control of the Company.
4. Change in Control. No benefit shall be payable hereunder unless
there shall have been a change in control of the Company. For the purpose of
this Agreement, the term "Change in Control" of the Company shall mean a change
in control of a nature that would be required to be reported in response to Item
5(f) of Schedule 14A of Regulation 14A under the Securities Exchange Act of
1934, as amended (the "Exchange Act") provided, however, a change in control
shall be deemed to have occurred if: (A) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Exchange Act), other than a trustee or fiduciary
holding securities under an employee benefit plan of the Company, is or becomes
the "beneficial owner" (as defined in Rule 13(d)-3 under the Exchange Act),
directly or indirectly of securities of the Company representing 35% or more of
the combined voting power of the Company's then outstanding voting securities;
(B) there is a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in the
voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) at least 75% of the combined
voting power of the voting securities of the Company or such surviving entity
outstanding immediately after such merger or consolidation;
December 18, 2001
Page 5
or (C) the shareholders of the Company approve a plan of complete liquidation of
the Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.
5. Compensation Upon Termination. Following a Change in Control of
the Company, as defined by Subsection 4(a), upon termination of your employment
you shall be entitled to the following benefits:
(a) If your employment shall be terminated within two years by the Company
for Cause or by you other than for Good Reason, the Company shall pay
you your full base salary through the date of termination, plus all
other amounts to which you are entitled under any compensation or
benefit plan of the Company at the time such payments are due, and the
Company shall have no further obligations to you under this Agreement.
(b) If your employment by the Company shall be terminated before two years
following a Change in Control (i) by the Company other than for Cause
or Disability or (ii) by you for Good Reason, then you shall be
entitled to the benefits provided below:
(A) the Company shall pay you within 15 days after the date of
termination your full base salary through the date of termination
at the rate in effect at the time of your termination of
employment, plus any other amounts to which you are entitled
under any compensation plan of the Company, at the time such
payments are due;
(B) in lieu of any further salary payments to you for periods
subsequent to the date of termination, the Company shall pay as
severance pay to you within 15 days after the date of termination
(i) a lump sum cash severance payment (the "Severance Payment")
in an amount equal to two times your "base amount" (within the
meaning of section 280G(b)(3) of the Internal Revenue Code of
1986, as amended (the "Code")) and (ii) all options held by you
for the purchase of Company shares shall fully vest and become
immediately exercisable;
(C) The Company shall also reimburse to you all legal fees and
expenses incurred by you in seeking to obtain or enforce any
right or benefit provided by Section 5(b);
December 18, 2001
Page 6
(D) You shall not be required to mitigate the amount of any payment
provided for in Section 5(b) by seeking other employment or
otherwise, nor shall the amount of any payment or benefit
provided for in this Section 3 be reduced by any compensation
earned by you as a result of employment after the Service Term by
another employer or otherwise or by retirement benefits earned or
paid.
6. Successors. The Company will require any successor (either direct
or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and perform this Agreement. Failure of the Company to obtain such
assumption and agreement prior to the effectiveness of any such succession shall
be a breach of this Agreement and shall entitle you to compensation from the
Company in the same amount and on the same terms as you would be entitled
hereunder following a Change in Control of the Company (except that for purposes
of implementing the foregoing, the date on which any such succession becomes
effective shall be deemed to be the date on which you become entitled to such
compensation from the Company). As used in this Agreement, Company shall mean
the Company as hereinbefore defined and any successor to its business or assets.
7. Binding Agreement. This Agreement shall inure to the benefit of
and be enforceable by your heirs, personal representatives and assigns. If you
should die while any amount would still be payable to you hereunder if you had
continued to live, unless otherwise provided herein, such amount shall be paid
in accordance with the terms of this Agreement to your heirs, personal
representatives or assigns.
8. Notice. Notices and other communications pursuant to this
Agreement shall be deemed to have been given if in writing (i) delivered
personally or by documented courier or delivery service; or (ii) mailed by
registered or certified mail (return receipt requested and postage prepaid) to
the following listed persons at the addresses specified below, or to such other
persons or addresses as the party entitled to notice shall give, in the manner
hereinabove described, to the others entitled to notice:
If to the Executive:
__________________________
__________________________
__________________________
If to AZZ incorporated:
December 18, 2001
Page 7
AZZ incorporated
1300 South University Drive, Suite 200
Fort Worth, Texads 76107
Attn: President and CEO
With a copy to:
Shannon, Gracey, Ratliff & Miller, L.L.P.
3800 Carter Burgess Tower
777 Main Street
Fort Worth, Texas 76102
Attn: Sam Rosen
9. Miscellaneous. 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 you and such officer as may be authorized to act on the
Company's behalf. No waiver by either party hereto at any time of any breach by
the other party hereto of, or non-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. No agreements or representations, oral or other, express or
implied, with respect to the subject matter hereof have been made by either
party which are not expressly set forth in this Agreement. The validity,
interpretation, construction and performance of this Agreement shall be governed
by the laws of the State of Texas. All references to sections of the Exchange
Act or to the Internal Revenue Code of 1986, as amended, shall be deemed also to
refer to any successor provisions to such sections. Any payments provided for
hereunder shall be paid net of any applicable withholding required under
federal, state or local law.
10. Validity. The validity 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.
11. 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.
12. Arbitration. Any dispute or controversy arising under or in
connection with this Agreement shall be settled, at the Company's expense,
exclusively by arbitration in Tarrant County, Texas in accordance with the rules
of the American Arbitration Association then in effect. Judgment may be entered
on the arbitrator's award in any court having jurisdiction; provided, however,
that the Executive shall be entitled to seek specific performance of his right
to be paid compensation, other than the Severance Payment, for
December 18, 2001
Page 8
service performed to the end of his employment by the Company during the
pendency of any dispute or controversy arising under or in connection with this
Agreement.
If this letter sets forth our agreement on the subject matter hereof,
kindly sign and return to the Company the enclosed copy of this letter which
will then constitute our agreement on this subject.
Sincerely,
AZZ incorporated
By: ______________________________________
David H. Dingus, President and CEO
Agreed to this _____ day of _____________, 2002:
EXECUTIVE:
_________________________________________
Name: ___________________________________
Position: _______________________________