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EXHIBIT 10.7(a)
FIRST AMENDMENT
TO
FRANK J. HANSEN EMPLOYMENT AGREEMENT
HODGSON, RUSS, ANDREWS, WOODS & GOODYEAR
1800 ONE M & T PLAZA
BUFFALO, NY 14203-2391
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FIRST AMENDMENT
TO
EMPLOYMENT AGREEMENT
THIS AMENDMENT ("Amendment"), made as of the 27th day of September,
1994, between IDEX CORPORATION, a Delaware corporation with its executive
offices at 630 Dundee Road, Suite 400, Northbrook, Illinois 60062 ("IDEX" or
the "Corporation"), and FRANK J. HANSEN, an individual residing at 1716
Mulberry Drive, Libertyville, Illinois 60048 (the "Executive"), is the first
amendment to the Employment Agreement, dated as of August 1, 1994, between IDEX
and the Executive (the "Employment Agreement").
IDEX and the Executive agree as follows:
1. Introductory Statement. The Executive has served as an Executive
of IDEX. IDEX desires to continue the full-time services of the Executive on
the terms and conditions provided in the Employment Agreement, subject to the
amendments set forth in this Amendment. The Executive is willing to execute
this Amendment with respect to his employment upon the terms and conditions set
forth in this Amendment. This Amendment changes only the provisions of the
Employment Agreement set forth in this Amendment. In all other respects, the
Employment Agreement shall remain in effect as previously written and executed.
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2. Agreement of employment. The text of the second paragraph of
Section 2 of the Employment Agreement is replaced in its entirety as follows:
"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
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
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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. Period of full-time service. (a) A new sentence is added at the
end of the second paragraph of Subsection 5(a) of the Employment Agreement to
read in its entirety as follows:
"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."
(b) The second sentence of the fourth paragraph of Subsection 5(a) of
the Employment Agreement is replaced in its entirety as follows:
"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."
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4. Guarantee of pension benefits. (a) The text following
subparagraph (iv) in the first full paragraph of Subsection 5(c)(2) of the
Employment Agreement is replaced in its entirety as follows:
"or (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
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provisions. 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."
(b) The text of the last full paragraph of Subsection 5(c)(2) of the
Employment Agreement is replaced in its entirety as follows:
"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
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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 reimbursement, the Executive or his beneficiaries
retain an amount from the Corporation approximately equal to the
amount repaid to the Trustee."
(c) A new full paragraph is added to the end of Subsection 5(c)(2) of
the Employment Agreement to read in its entirety as follows:
"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
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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 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
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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."
5. Medical benefits. Subsection 5(c)(3) of the Employment
Agreement is replaced in its entirety as follows:
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"5(c)(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 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. Such 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 60th year or (b) the
Executive prior to the commencement of his 60th year dies or becomes
disabled while employed by the Corporation or (c) the Executive is
terminated at any time following an Acquisition. The Corporation may,
in its discretion, insure such 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
beneficiaries in the choice
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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. If the
Executive leaves the service of the Corporation prior to attaining age
55 as the result of his termination by the Corporation at any time
following an Acquisition, such benefits shall be reduced until the
Executive attains age 55 to the extent of any medical benefits
provided by and available to the Executive from any subsequent
employer without cost to the Executive or subject to full
reimbursement of any such cost by the Corporation to the Executive 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."
6. Termination. Section 7 of the Employment Agreement is amended
to read in its entirety as follows:
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"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 may
incur in connection therewith. 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
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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."
7. Additional payments by the Corporation. In Subsection 8(a) of
the Employment Agreement the words "any and all equity appreciation rights
plans of the Corporation" are replaced in their entirety by: "the Non-Qualified
Stock Option Plan for Officers of the Corporation".
8. Assurances on liquidation. A new Section 9 is added to the
Employment Agreement to read in its entirety as follows:
"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
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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 inability to act, his wife or, if
not surviving, his eldest surviving child, 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
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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 be
determined using 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 and
the mortality assumptions of the Unisex Pension 1984 Mortality Table.
For purposes of this Subsection, 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."
9. Binding effect. The second sentence of Section 12, which shall be
renumbered by this Amendment as Section 13, of the Employment Agreement is
replaced in its entirety as follows:
"In addition to inuring to the benefit of the Executive, Sections 5(a)
and 5(b) are intended to inure to the benefit of the Executive's
beneficiaries, Section 5(c)(2)
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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 and Section 8 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."
10. Renumbering of Sections. Sections 9, 10, 11, 12, 13, 14, 15 and
16 of the Employment Agreement are renumbered as Sections 10, 11, 12, 13, 14,
15, 16 and 17, respectively, of the Employment Agreement.
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IN WITNESS WHEREOF, the Executive has hereunto set his hand and the
Corporation has caused this Amendment to be executed in its name and on its
behalf as of the date first above written.
/s/ Frank J. Hansen
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Frank J. Hansen
DATE OF EXECUTION: October 25, 1994
IDEX CORPORATION
BY /s/ Donald N. Boyce
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Donald N. Boyce, President
DATE OF EXECUTION: October 25, 1994
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/ Kathryn F. Hansen
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Kathryn Hansen
DATE OF EXECUTION: October 25, 1994