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Exhibit 10.22
As of January 9, 1997
Mr. Eugene W. Teeter
15814 Rothbury Lane
San Antonio, Texas 78232
Dear Mr. Teeter:
The Board of Directors of Meyer Machine Company, a Delaware
corporation (the "Company"), which is an indirect wholly-owned subsidiary of
TCC Industries, Inc., a Texas corporation ("TCC"), has approved an agreement
between the Company and you in order to provide to you a severance payment as
additional incentive to continue your employment with the Company. Accordingly,
the Board has authorized such an agreement, and the terms thereof follow:
1. In the event that you terminate your employment with the
Company as a result of one or more of the following events
(collectively, the "Terminating Events" and each a "Terminating
Event"): (i) a Change in Control of the Company as defined in
paragraph 5, below; (ii) a Change of Circumstances as defined in
paragraph 6, below; (iii) the Company ceases to do business; (iv) in
the event (an "Insolvency Event") of the Company's bankruptcy,
insolvency or any assignment for the benefit of creditors, or any
other act by the Company to take advantage of any law providing for
relief to debtors, provided that you terminate your employment with
the Company within one (1) year of the occurrence of one or more of
the Terminating Events, you will be entitled to: (x) a lump-sum
payment (the "Special Severance Payment") equal to the sum of (A) the
highest one month's base salary in effect during the three year period
immediately preceding such termination, multiplied by the number of
full years you have then been employed by the Company or any affiliate
of the Company (including without limitation, TCC), (B) any bonuses
accrued but unpaid as of the effective date of termination, including,
without limitation, an amount equal to (i) the amount that would have
been earned under the TCC Industries, Inc. Annual Incentive Plan, as
amended from time to time (the "AIP"), for the fiscal year in which
such termination occurs had the Incentive Award (as defined in the AIP)
for that year not been subject to being forfeited due to termination,
i.e., you will be considered to have been employed for the entire such
year, (ii) multiplied by a fraction the numerator of which is the
number of days elapsed in such calendar year as of the date of such
termination, and the denominator of which is 365 (such amount to be
paid in the first quarter of the calendar year following the year in
which such termination occurs), and (C) any other compensation owed
to you by the Company as of the effective date of termination, and (y)
fringe benefits for a period of one year following such termination,
such as health insurance, auto allowance, any premiums becoming due
during such one year period with respect to any life insurance policy
on your life for which the Company, TCC or an affiliate of TCC has
previously made the premium payments, and payment for any unpaid
vacation not taken and accrued as of such termination, but excluding
any employer contribution under the Meyer Machine Company Profit
Sharing Plan for the
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year in which such termination occurs. Upon any such termination the
Company shall take such action and otherwise cooperate with you in
promptly causing the (1) beneficiary of such life insurance policy to
be changed from the Company to someone designated by you, and (2)
ownership of any such life insurance policy to be transferred to you,
including the right to designate the beneficiary. In addition, any
portion of any stock options granted by TCC which have not then vested
shall become exercisable in full for a period of six months following
the effective date of termination, or such lesser period as the option
would have been exercisable had your employment with the Company not
been terminated. Notwithstanding the foregoing, if the only
Terminating Event that occurs is a Terminating Event specified in
clause (iv) (relating to an Insolvency Event), then upon the voluntary
termination by you of your employment as a result of such Insolvency
Event, you shall be entitled to only one-half of the payments and
benefits provided for in clauses (x) and (y) above. To the extent
necessary, this letter shall constitute an amendment to any stock
options granted to you by TCC such that the vesting and exercise
provisions thereof shall be consistent with the first sentence of this
paragraph 1. In the event of the occurrence of any of the Terminating
Events and the voluntary termination of your employment by you within
one (1) year of such Terminating Event you shall be deemed to have
terminated your employment as a result of such Terminating Event;
provided that if the Terminating Event specified in clause (iv) (being
an Insolvency Event) occurs and one of the other Terminating Events
specified in clauses (i), (ii) or (iii) also occurs, you shall be
deemed to have terminated your employment as a result of such clause
(i), (ii) or (iii), and not clause (iv)."
2. In the event that your employment with the Company is
terminated by or at the instance of the Company at any time and for
any reason other than for Cause, as defined in paragraph numbered 7
below, you will be entitled to the Special Severance Payment, together
with (a) fringe benefits for a period of one (1) year following any
termination as referenced in (y) in paragraph numbered 1 above, (b)
the assignment of life insurance policies and benefits described in
paragraph 1 above, and (c) the acceleration of vesting, and extension
of date for exercise of stock options as described in paragraph
numbered 1 above.
3. The Company shall pay the Special Severance Pay Payment to you
within fifteen calendar days of the effective date of your termination
pursuant to paragraph numbered 1 or paragraph numbered 2, whichever is
applicable.
4. As a condition to the Company's obligation to pay the Special
Severance Payment in the event of the voluntary termination by you of
your employment with the Company pursuant to paragraph numbered 1, you
shalt provide written notice to the Company specifying (i) the
effective date of the termination, and (ii) which Terminating Event
constitutes a reason for your voluntary termination.
5. Change in Control means: (i) the sale or other disposition of
the Company or TCC (whether directly or indirectly, and whether by way
of merger, consolidation, sale of assets or sale of stock of the
Company or TCC), or the sale by the Company or TCC of all or
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substantially all of the assets of the Company or TCC to any person
(as such term is defined in the Securities Exchange Act of 1934), the
consolidation of the Company or TCC with any person, or the merger of
the Company or TCC with any person, as a result of which consolidation
or merger the Company, TCC or an affiliate of TCC as of the date of
this letter agreement, is not the surviving entity; (ii) the sale or
transfer by (A) the Company and/or TCC, and/or any subsidiary of or
affiliate of TCC then in control, directly or indirectly, of the
Company (whether one or more, a "Control Affiliate"), or (B) TCC
and/or one or more of its shareholders, in one or more related or
unrelated transactions, to one or more persons under circumstances
whereby any person and its "affiliates" (as hereinafter defined) shall
own, after such sale or transfer, in excess of one-half of the
outstanding shares of the Company or TCC, as the case may be; (iii)
the issuance by the Company, TCC and/or any Control Affiliate, in a
single transaction or a series of related transactions including a
merger or consolidation in which the Company, TCC and/or any Control
Affiliate, as the case may be, is the surviving entity, of shares
which constitute more than one-half of the shares of the Company, TCC
or such Control Affiliate, as the case may be, outstanding immediately
prior to the first such transaction, (iv) the liquidation of the
Company, TCC or any Control Affiliate, as the case may be, or (v) the
election of one or more individuals to the Board of Directors of TCC
which results in a majority of the Directors of TCC be in a persons
who are not Directors of TCC on January 9, 1997. As used in this
letter, an "affiliate" shall mean any person that, directly or
indirectly, through one or more intermediaries, controls, or is
controlled by, or is under common control with, any other person or
who, by agreement (whether written or oral), is acting in concert
with any such person.
6. A Chance of Circumstances shall be deemed to have occurred if,
in your sole judgment, there has been: (i) a material reduction or
change in your duties or reporting responsibilities or a removal from
or failure to be elected to a previously held position, including
without limitation a removal from an officer position in the
department in which you are now employed or a relocation of your
employment outside of the San Antonio metropolitan area; (ii) a breach
by the Company of any provision of this letter; (iii) a material
reduction in your salary or the fringe benefits of employment made
available to you by the Company, which reduction is not also
applicable to all Company employees; (iv) a material diminution in
your status, working conditions or economic benefits; or (v) any
action which substantially impairs your prestige in relation to any
other employee of the Company.
7. Cause means conduct which, in the Company's sole opinion,
constitutes; (i) fraud or dishonesty; (ii) inability to perform due to
alcoholism; (iii) inability to perform due to improper and illegal use
of drugs; (iv) excessive absenteeism other than for major illness or
similar serious situations; or (v) inattention to your duties and
responsibilities to the Company, after prior written warning by the
Company.
8. This letter shall be construed and enforced in accordance
with, and the validity and performance hereof shall be governed by the
laws of the State of Texas.
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9. This letter constitutes the entire agreement between you and
the Company regarding the subject matter hereof and supersedes all
prior and contemporaneous agreements and understandings in connection
herewith.
10. The obligations of the Company under this letter agreement are
undertaken in consideration of your many years of service to the
Company and in order to induce you to continue those services to the
Company, and shall not expire until the Company shall have paid and
performed each of its obligations to you following any termination of
your employment, regardless of when such termination occurs. The
parties acknowledge that this letter is intended to be construed
broadly and liberally in order to confer upon you the specified
benefits in the event of the termination of your employment.
11. The obligations of the Company to you under this letter
agreement shall be independent of, and shall not be subject to, any
condition, obligation or offset except as expressly set forth in this
letter agreement. In particular, any obligation of the Company to pay
any liability or amount of money to you shall not be subject to offset
against any amount owed by you to the Company, except to the extent
that either (i) you consent to the offset in writing at the time of
the offset, (ii) the amount so offset has been reduced to final,
nonappealable, judgment in favor of the Company against you in a court
having jurisdiction or (iii) such liability or amount is owed by you
to the Company as a result of a breach by you of any of your fiduciary
duties to the Company. If any legal action or other proceeding,
including, an arbitration proceeding instituted pursuant to the next
succeeding sentence, is brought for the enforcement of this letter
agreement, or because of an alleged dispute, breach, default or
misrepresentation in connection with any of the provisions of this
letter agreement, the successful or prevailing, party will be entitled
to recover reasonable attorney's fees and other costs incurred in that
action or proceeding, in addition to any other relief to which it or
he may be entitled. Except in connection with seeking injunctive
relief to which any party hereto may reasonably believe it or he is
entitled hereunder, or as otherwise expressly provided for by this
letter agreement, any dispute, controversy or claim arising, out of or
relating to this letter agreement, or the breach, termination or
invalidity thereof, shall be settled by arbitration in accordance with
the commercial arbitration rules of the American Arbitration
Association as then in effect; provided, that the place of the
arbitration shall be San Antonio, Texas. Any award or determination
entered in any arbitration initiated pursuant to this letter agreement
shall be binding, and conclusive on the parties, and shall be
enforceable in any court having jurisdiction with respect to the
matter. If it is ultimately determined in any such proceeding that the
Company wrongfully withheld payment of any portion of the Special
Severance Payment or other obligation of the Company to you under this
letter agreement prior to such determination, then you shall be
entitled to recover from the Company an amount equal to 18% per annum
on such amount, from the date such amount should have been paid until
it is paid, and such recovery shall be in addition to such other sums
to which you are entitled hereunder. Unless otherwise provided above,
each Party shall pay its or his own expenses incurred in connection
with a proceeding pursuant to this paragraph numbered 11.
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If you are in agreement with the foregoing, please so indicate by
signing the enclosed copy of this letter and returning the same to the
undersigned.
Meyer Machine Company
By: /s/ FRANK W. DENIUS
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Its: Assistant Secretary
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Agreed to as of the date of this letter.
/s/ EUGENE W. TEETER
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Eugene W. Teeter
Agreed to as of the date of this letter.
TCC Industries, Inc.
By: /s/ FRANK W. DENIUS
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Its: Secretary
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