Exhibit 10.19
APW LTD.
CHANGE IN CONTROL AGREEMENT
FOR
RICHARD D. CARROLL
This Agreement is made as of April 26, 2001 (the "Effective Date"),
between APW Ltd., a Bermuda corporation (the "Company"), and Richard D. Carroll
(the "Executive").
WHEREAS, the Executive is a valued employee of the Company; and
WHEREAS, the Company desires to enter into this Change in Control
Agreement with the Executive to provide the Executive with contractual
assurances to induce the Executive to remain as an employee of the Company
notwithstanding the possibility, threat or occurrence of a Change in Control (as
defined below) of APW Ltd.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
contained herein, the Executive and the Company agree as follows:
1. Employment and Duties. The Company hereby employs Executive as Vice
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President and Chief Financial Officer, with all powers and authority as are
customary to this position, and Executive hereby accepts employment with the
Company in accordance with the terms and conditions set forth herein. Executive
shall have such executive responsibilities as is customary with this position
and as the Company's Board of Directors or the President (as the case may be)
shall from time to time assign to him. Executive agrees to devote his full time
(excluding annual vacation time), skill, knowledge, and attention to the
business of the Company and the performance of his duties under this Agreement.
2. Termination, Bonus, and Severance Pay.
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a. As used in this Agreement, a Change in Control means:
(i) a sale of over 50% of the stock of APW Ltd. measured in
terms of voting power, other than in a public offering; or
(ii) the sale by APW Ltd. of over 50% of its business or
assets in one or more transactions over a consecutive 12-month
period; or
(iii) a merger or consolidation of APW Ltd. with or into any
other corporation or corporations such that the shareholders of APW
Ltd. prior to the merger or consolidation do not own at least 50% of
the surviving entity measured in terms of voting power; or
(iv) the acquisition by any means of more than 25% of
the voting power or common stock of APW Ltd. by any person or
group of persons (with group defined by the definitions under
Section 13(d)(3) of the Securities Exchange Act of 1934, as
amended); or
(v) the election of directors constituting a majority
of APW Ltd.'s board of directors pursuant to a proxy
solicitation not recommended by APW Ltd.'s board of directors.
b. As used in this Agreement, a Triggering Event means:
(i) (a) reducing the base salary paid to the
Executive or (b) a material reduction in Executive's bonus
opportunity or (c) reducing the total aggregate value of the
fringe benefits received by the Executive from the levels
received by the Executive at the time of a Change in Control
or during the 180 day period immediately preceding the Change
in Control; or
(ii) a material change in the Executive's position or
duties or the Executive's reporting responsibilities from the
levels existing at the time of a Change in Control or during
the 180 day period immediately preceding the Change in
Control; or
(iii) a change in the location or headquarters where
the Executive is normally expected to provide services to a
location of 40 or more miles from the previous location
existing at the time of the Change in Control or during the
180 day period immediately preceding the Change in Control.
c. If the Company terminates Executive's employment within
the period beginning six months prior to a Change in Control and ending
36 months following a Change in Control or Executive voluntarily
terminates his services following a Triggering Event that occurs within
36 months following the date of a Change in Control, the Company shall
pay to the Executive a lump sum equal to two and one-half times the sum
of (a) the highest per annum base rate of salary in effect with respect
to the Executive during the one-year period immediately prior to the
termination of employment plus (b) the highest annual bonus or
incentive compensation earned by the Executive under any cash bonus or
incentive compensation plan of the Company during the three complete
fiscal years of the Company immediately preceding the termination of
employment. Such lump sum shall be paid by the Company to the Executive
within twenty days after the Executive's termination of employment. In
addition, the Company, at the Company's cost, shall continue to provide
Executive with the welfare benefits and other perquisites Executive was
receiving at the time of the Change in Control for a period of two and
one-half years following Executive's termination of employment or such
earlier date as Executive becomes employed by another
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employer and becomes eligible for welfare benefits. For purposes hereof,
perquisites will include the Executive's right to lease a car or a car
allowance, as the case may be.
d. Notwithstanding any provision herein, no amounts will be due
under this Agreement in the event the Executive's employment is terminated by
the Company for cause. The term "for cause" shall mean solely the following
events:
(i) Executive has been convicted of a felony which has
adversely affected the Company's reputation;
(ii) Executive has materially misappropriated Company funds,
property or opportunities; or
(iii) Executive has materially breached any of the provisions
of this Agreement after having been provided by written notice a
reasonable opportunity (not less than 15 business days) to cure such
breach.
3. Certain Additional Payments by the Company.
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a. In the event it shall be determined that the severance benefits
payable to Executive under this Agreement or any other payments or benefits
received or to be received by the Executive (whether payable pursuant to the
terms of this Agreement, any other plan, agreement or arrangement) (the
"Payments") would be subject to the excise tax imposed by Section 4999 of the
Internal Revenue Code of 1986, as amended (the "Code") or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the "Excise Tax"), then the Executive shall be
entitled to receive an additional payment (a "Gross-Up Payment"). The Gross-Up
Payment shall be in an amount such that after payment by the Executive of all
taxes (including any interest or penalties imposed with respect to such taxes),
including, without limitation, any income taxes (and any interest and penalties
imposed with respect thereto) and excise tax imposed on the Gross-Up Payment,
the Executive retains an amount of the Gross-Up Payment equal to the Excise Tax
imposed upon the Payments.
b. Subject to the provisions of paragraph c. of this Section 3, all
determinations required to be made under this Section 3, including whether and
when a Gross-Up Payment is required and the amount of such Gross-Up Payment and
the assumptions to be utilized in arriving at such determination, shall be made
by a certified public accounting firm designated by the Executive (the
"Accounting Firm"), which shall provide detailed supporting calculations both to
the Company and the Executive within twenty business days of the receipt of
notice from the Executive that there has been a Payment, or such earlier time as
is requested by the Company. All fees and expenses of the Accounting Firm shall
be borne solely by the Company. Any Gross-Up Payment, as determined pursuant to
this Section 3,
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shall be paid by the Company to the Executive within five days of the receipt of
the Accounting Firm's determination. Any determination by the Accounting Firm
shall be binding upon the Company and the Executive. As a result of the
uncertainty in the application of Section 4999 of the Code at the time of the
initial determination by the Accounting Firm hereunder, it is possible that
Gross-Up Payments which will not have been made by the Company should have been
made ("Underpayment"), consistent with the calculations required to be made
hereunder. In the event that the Company exhausts its remedies pursuant to
paragraph c. of this Section 3 and the Executive thereafter is required to make
a payment of any Excise Tax, the Accounting Firm shall determine the amount of
the Underpayment that has occurred and any such Underpayment shall be promptly
paid by the Company to or for the benefit of Executive.
c. The Executive shall notify the Company in writing of any claim by the
Internal Revenue Service that, if successful, would require the payment by the
Company of the Gross-Up Payment. Such notification shall be given as soon as
practicable but no later than ten business days after the Executive is informed
in writing of such claim and shall describe the nature of such claim and the
date on which such claim is requested to be paid. The Executive shall not pay
such claim prior to the expiration of the thirty-day period following the date
on which he gives such notice to the Company (or such shorter period ending on
the date that any payment of taxes with respect to such claim is due). If the
Company notifies the Executive in writing prior to the expiration of such period
that it desires to contest such claim, the Executive shall:
(i) give the Company any information reasonably requested by the
Company relating to such claim,
(ii) take such action in connection with contesting such claim as
the Company shall reasonably request in writing from time to time, including,
without limitation, accepting legal representation with respect to such claim by
an attorney reasonably selected by the Company.
(iii) cooperate with the Company in good faith in order effectively
to contest such claim, and
(iv) permit the Company to participate in any proceedings relating
to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income tax (including interest and
penalties with respect thereto) imposed as a result of such representation and
payment of costs and expenses. Without limitation on the foregoing provisions of
this paragraph c. of Section 3, the Company shall control all proceedings taken
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in connection with such contest and, at its sole option, may
pursue or forego any and all administrative appeals, proceedings,
hearings and conferences with the taxing authority in
respect of such claim and may, at its sole option, either direct the
Executive to pay the tax claimed and sue for a refund or contest the
claim in any permissible manner, and the Executive agrees to prosecute
such contest to a determination before any administrative tribunal, in
a court of initial jurisdiction and in one or more appellate courts, as
the Company shall determine; provided, however, that if the Company
directs the Executive to pay such claim and sue for a refund, the
Company shall advance the amount of such payment to the Executive, on
an interest-free basis and shall indemnify and hold the Executive
harmless, on an after-tax basis, from any Excise Tax or income tax
(including interest or penalties with respect thereto) imposed with
respect to such advance or with respect to any imputed income with
respect to such advance; and provided, further, that any extension of
the statute of limitations relating to payment of taxes for the taxable
year of the Executive with respect to which such contested amount is
claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be limited to
issues with respect to which a Gross-Up Payment would be payable
hereunder and the Executive shall be entitled to settle or contest, as
the case may be, any other issue raised by the Internal Revenue Service
or any other taxing authority.
d. If, after the receipt by the Executive of an amount
advanced by the Company pursuant to paragraph c. of this Section 3, the
Executive becomes entitled to receive any refund with respect to such
claim, the Executive shall (subject to the Company's complying with the
requirements of paragraph c. of this Section 3) promptly pay to the
Company the amount of such refund (together with any interest paid or
credited thereon after taxes applicable thereto). If after the receipt
by the Executive of an amount advanced by the Company pursuant to
paragraph c. of this Section 3, a determination is made that the
Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of its
intent to contest such denial of refund prior to the expiration of
thirty days after such determination, then such advance shall be
forgiven and shall not be required to be repaid and the amount of such
advance shall offset, to the extent thereof, the amount of Gross-Up
Payment required to be paid.
4. Confidential Information. As a supplement to any other
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confidentiality provisions applicable to the Executive, Executive acknowledges
that all Confidential Information is and shall continue to be the exclusive
proprietary property of the Company, whether or not disclosed to or entrusted to
the custody of Executive. Executive will not, either during the term hereof or
at any time thereafter, disclose any Confidential Information, in whole or in
part, to any person or entity other than to employees or affiliates of the
Company, for any reason or purpose, unless the Company gives its prior written
consent to such disclosure. Executive also will not, either during the term
hereof or at any time thereafter, use in any manner any Confidential Information
for his own purposes or for the benefit of any person or entity except the
Company and its affiliates whether such use consists of duplication, removal,
oral communication, disclosure, transfer or other unauthorized use thereof,
unless the Company gives its prior written consent to such use. As used herein,
the term
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"Confidential Information" refers to all information and materials not in the
public domain belonging to, used by or in the business of the Company (the
"Business") relating to its business strategies, products, pricing, customers,
technology, programs, costs, employee compensation, marketing plans,
developmental plans, computer programs, computer systems, inventions,
developments, formulae, processes, designs, drawings, trade secrets of every
kind and character and competitive information. "Confidential Information" also
includes confidential information belonging to other companies and disclosed to
the Executive by the Company.
5. Non-competition and Inventions.
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a. During the period of employment of Executive and for a period of
one year after Executive's termination of employment for any reason,
Executive shall not directly or indirectly as a principal, agent, owner,
employee, consultant, advisor, trustee, beneficiary, distributor, partner,
co-venturer, officer, director, stockholder or in any other capacity, nor
will any entity owned by Executive:
(i) divert or attempt to divert any business from the Company
or engage in any act likely to cause any customer or supplier of the
Company to discontinue or curtail its business with the Company or to
do business with another entity, firm, business, activity or
enterprise directly or indirectly competitive with the Company; or
(ii) contact, sell or solicit to sell or attempt to contact,
sell or solicit to sell products competitive to those sold by the
Company to any customer of the Company with which Executive had
contact while performing services for the Company; or
(iii) solicit or attempt to solicit any employee of the Company
for employment or retention.
Notwithstanding the provisions above, Executive may acquire securities of
any entity the securities of which are publicly traded, provided that the
value of the securities of such entity held directly or indirectly by
Executive immediately following such acquisition is less than 5% of the
total value of the then outstanding class or type of securities acquired.
b. Executive acknowledges and agrees that the restrictions set forth
in this section 5 are founded on valuable consideration and are reasonable
in duration and geographic area in view of the circumstances under which
this Agreement is executed and that such restrictions are necessary to
protect the legitimate interests of the Company. If, in any judicial
proceeding, a court shall refuse to enforce any separate covenant set forth
herein, then such unenforceable covenant shall be deemed eliminated from
this section 4 for the purpose of that proceeding to the extent necessary
to permit the remaining separate covenants to be enforced.
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c. The Executive hereby sells, transfers and assigns to the Company
the entire right, title and interest of the Executive in and to all inventions,
ideas, disclosures and improvements, whether patented or unpatented, and
copyrightable materials, made or conceived by the Executive, solely or jointly,
or in whole or in part, during the period Executive is bound by this Agreement
which (i) relate to methods, apparatus, designs, products, processes or devices
sold, leased, used or under construction or development by the Company or any
subsidiary or (ii) otherwise relate to or pertain to the business, functions or
operations of the Company or any subsidiary, or (iii) arise (wholly or partly)
from the efforts of the Executive during the Term hereof in connection with his
performance of his duties hereunder. The Executive shall communicate promptly
and disclose to the Company, in such form as the Company requests, all
information, details and data pertaining to the aforementioned inventions,
ideas, disclosures and improvements; and, whether during the term hereof or
thereafter, the Executive shall execute and deliver to the Company such formal
transfers and assignments and such other papers and documents as may be required
of the Executive to permit the Company to file and prosecute the patent
applications and, as to copyrightable material, to obtain copyright thereon.
This provision does not relate to any invention for which (i) no equipment,
supplies, facilities or trade secret information of the Company was used and
which was developed entirely on the Executive's own time and which does not
relate (A) directly to the business of the Company, or (B) to the Company's
actual or demonstrably anticipated research or development; or (ii) does not
result in any work performed by the Executive for the Company.
d. The provisions in this paragraph are a supplement to any other
confidentiality and non-compete provisions applicable to the Executive in any
other agreements.
6. Miscellaneous.
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a. This Agreement shall be governed by and construed in accordance
with the internal laws of the State of Wisconsin, without reference to
principles of conflict of laws. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect. This Agreement may not
be amended or modified otherwise than by a written agreement executed by the
parties hereto or their respective successors and legal representatives.
b. All notices and other communications hereunder shall be in writing
and shall be given by hand delivery to the other party or by registered or
certified mail, return receipt requested, postage prepaid, addressed as follows:
If to the Executive, to his address appearing on the records of the Company.
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If to the Company: APW Ltd.
N22 W23685 Ridgeview Parkway West
Waukesha, WI 53188-1013
Attention: President
With a copy to: Quarles & Brady LLP
411 East Wisconsin Avenue
Milwaukee, WI 53202
Attention: Anthony W. Asmuth III, Esq.
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
c. The invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other provision of this
Agreement.
d. The Company may withhold from any amounts payable under this Agreement
such federal, state, local or foreign taxes as shall be required to be withheld
pursuant to any applicable law or regulation.
e. The Executive's or the Company's failure to insist upon strict
compliance with any provisions hereof or any other provision of this Agreement
or the failure to assert any right the Executive or the Company may have
hereunder, including, without limitation, the right of the Executive to
terminate employment for cause pursuant to this Agreement, shall not be deemed
to be a waiver of such provision or right or any other provision or right of
this Agreement.
f. The Executive and the Company acknowledge that, except as may otherwise
be provided herein or under any other written agreement between the Executive
and the Company, the employment of the Executive by the Company is "at will" and
the Executive's employment may be terminated by the Company at any time.
g. The Company agrees that if it breaches any payment obligation hereunder,
the Company will pay all reasonable attorney fees and costs incurred by
Executive in enforcing Executive's rights hereunder.
h. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original, but all of which together shall
constitute one and the same instrument.
i. If the Company sells, leases, exchanges or otherwise disposes of, in a
single transaction or series of related transactions, all or substantially all
of its property and assets,
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or if the Company ceases to exist as a separate entity as a result of
a merger, spin-off, reorganization or otherwise, then the Company
will, as a condition precedent to any such transaction, cause
effective provision to be made so that the person or entity acquiring
such property and assets or succeeding to the business of the Company
as the surviving entity of a merger, spin-off, reorganization or
otherwise, as applicable, becomes bound by, and replaces the Company
under, this Agreement.
7. Injunctive Relief. Executive acknowledges and agrees that irreparable
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injury will result to the Company in the event Executive breaches any covenant
contained in this Agreement and that the remedy at law for such breach will be
inadequate. Therefore, if Executive engages in any act in violation of the
provisions of this Agreement, the Company shall be entitled, in addition to such
other remedies and damages as may be available to it by law or under this
Agreement, to injunctive or other equitable relief to enforce the provisions
hereof.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the date first above written.
APW Ltd.
By: /s/ R. G. Sim
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/s/ Richard D. Carroll
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Richard D. Carroll
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