[LETTERHEAD OF GROVE WORLDWIDE]
Mr. James A. Kolinski July 24, 1997
1373 Lindsay Lane
Hagerstown, MD 21742
PERSONAL & CONFIDENTIAL
Dear Mr. Kolinski:
1. Introduction.
Grove Worldwide (the "Company") believes that the establishment and
maintenance of a sound and vital management of the Company is essential to
the protection and enhancement of the interests of the Company, the
Company's ultimate parent company, Hanson PLC ("Hanson") and Hanson's
stockholders. The Company also recognizes that the possibility of a Change
in Control (as defined in Exhibit A), with the attendant uncertainties and
risks, might result in the departure or distraction of key employees of
the Company to the detriment of the Company, Hanson and Hanson's
stockholders, the Company has determined that it is appropriate to induce
key employees to remain with the Company, and to reinforce and encourage
their continued attention and dedication. Accordingly, subject to Section
2, upon your written acceptance of the terms of this agreement (the
"Agreement") evidenced by your signing below, the Company intends to
provide you the protections set forth herein as of the Effective Date.
The arrangements set out in this Agreement are a private contractual
arrangement with you and do not reflect the severance policy of the
Company to employees generally and accordingly your acceptance of the
terms of this Agreement will constitute your agreement to maintain the
terms of this Agreement confidential.
2. Effective Date and Term.
Notwithstanding anything else herein, this Agreement became effective (the
"Effective Date") as of March 1, 1997. This Agreement shall expire on the
earliest of (i) three (3) years from the Effective Date, provided that if
a Change in Control takes place prior to three (3) years from the
Effective Date, the duration of this Agreement shall be until two (2)
years after the Change in Control; or (ii) subject as otherwise provided
in Section 3 herein the date of your death or the termination of your
employment with the Company whether as a result of Disability (as defined
herein), retirement or any other reason prior to a Change in Control.
Notwithstanding anything in this Agreement to the contrary, if the Company
becomes obligated to make any payment or provide any benefit to you
pursuant to the terms hereof at or prior to the expiration of this
Agreement, then this Agreement shall remain in effect for such purposes
until all of the Company's obligations hereunder are fulfilled.
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Disability for purposes of this Agreement shall mean your inability to
perform your material duties and responsibilities due to the same or
related physical or mental illness for one hundred and eighty (180)
consecutive days. A termination for Disability shall be deemed to occur
when you are terminated by the Company by written notice while you remain
disabled.
3. Termination Following a Change in Control.
If a Change in Control occurs and your employment is terminated by the
Company without Cause (as defined in Section 5 herein) other than for
Disability or you terminate your employment with the Company for Good
Reason (as defined in Section 4 herein), during the period from the date
of the Change in Control to two (2) years after the date of such Change in
Control, then you shall be entitled to the amounts and benefits provided
in Section 6 herein upon such termination. In addition, notwithstanding
the foregoing, in the event you are either terminated by the Company
without Cause (other than for Disability) or you terminate your employment
for Good Reason, in either case within one hundred and eighty (180) days
prior to the occurrence of a Change in Control (based on an event that
occurred within such one hundred and eighty (180) day period prior to the
occurrence of a Change in Control), such termination shall, upon the
occurrence of a Change in Control, be deemed to be covered under the
Agreement and you shall be entitled to the amounts payable hereunder.
4. Termination for Good Reason.
A termination for Good Reason for purposes of this Agreement shall mean a
termination by you effected by a written notice of termination for Good
Reason given within sixty (60) days after the occurrence of the Good
Reason event. "Good Reason" shall mean the occurrence or failure to cause
the occurrence, as the case may be, without your express written consent,
of (i) any material diminution of your positions, duties or
responsibilities with the Company (except in connection with the
termination of your employment for Cause, Disability, as a result of your
death, or temporarily as a result of your illness or other absence) from
the highest position held within one hundred and eighty (180) days prior
to a Change in Control or the assignment to you of duties or
responsibilities that are inconsistent with your aforementioned highest
position; (ii) your removal from, or the non-reelection to your positions
with the Company held within one hundred and eighty (180) days prior to a
Change in Control; (iii) a relocation of the Company's principal United
States executive offices to a location more than twenty-five (25) miles
from where they are at the time of the Change in Control, or a relocation
by the Company of your principal office away from such principal United
States executive offices; (iv) a reduction by the Company of your rate of
annual base salary to a level below your highest rate of base salary
within one hundred and eighty (180) days prior to the Change in Control;
(v) a failure by Hanson or the Company (A) to continue any bonus plan,
program or arrangement in which you were entitled to participate during
the one hundred and eighty (180) days prior to the
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Change in Control (the "Bonus Plans"), provided that any such Bonus Plans
may be modified at Hanson's or the Company's discretion from time to time
but shall be deemed terminated if plans providing you with substantially
similar benefits are not substituted therefor ("Substitute Plans") or (B)
to consider you a participant in the Bonus Plans or Substitute Plans on
not less than the same target level of award and not more than the same
level of difficulty for achievability of such award as was applicable to
you immediately prior to any change in such plans, in accordance with the
Bonus Plans or Substitute Plans; or (vi) any breach by the Company of any
material provision of this Agreement, unless the applicable circumstances
under (i) through (vi) are fully corrected prior to the date of
termination specified in the notice of termination for Good Reason. The
notice of termination for Good Reason shall provide for a date of
termination not less than fifteen (15) nor more than sixty (60) days after
the date such notice of termination for Good Reason is given.
5. Termination for Cause.
A termination for Cause means a termination by the Company effected by a
written notice of termination for Cause. The term "Cause" shall be limited
to your: (i) willful misconduct with regard to the Company or its
business, assets or employees; (ii) refusal to follow the proper written
direction of the Board of Directors of the Company (the "Board") or a more
senior officer of the Company, provided that the foregoing refusal shall
not be "Cause" if in good faith you believe that such direction is
illegal, unethical or immoral and you promptly so notify the Board or the
more senior officer (whichever is applicable); (iii) conviction of (or
pleading of nolo contendere to) a felony (other than a traffic violation);
(iv) breach of any fiduciary duty owed to the Company or any affiliate; or
(vi) dishonesty, misappropriation or fraud with regard to the Company
(other than good faith expense account disputes). The date of termination
for a termination for Cause shall be the date indicated in the notice of
termination.
6. Compensation on Termination.
If pursuant to Section 3 you are entitled to amounts and benefits under
this Section 6, subject to Section 10, the Company shall pay and provide
to you: (A) in a lump sum within five (5) days after such termination (or,
if such termination occurred within one hundred and eighty (180) days
prior to a Change in Control, within five (5) days after the Change in
Control) (i) two (2) times your highest annual base salary in effect
within one hundred and eighty (180) days prior to the Change in Control,
(ii) two (2) times the highest annual bonus paid or payable (excluding any
top hat payments, if applicable) to you for any of the last two (2)
completed years by the Company or its predecessors, (iii) any
un-reimbursed business expenses for the period prior to termination
payable in accordance with the Company's policies, and (iv) any base
salary, bonus, vacation pay or other deferred compensation accrued or
earned under law or in accordance with the Company's policies applicable
to you but not yet paid; (B) any other amounts or benefits due under the
then applicable employee benefit, incentive or equity plans of Hanson or
the Company applicable to you as shall be
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determined and paid in accordance with such plans, except to the extent
paid pursuant to (A) above; (C) two (2) years of additional service and
compensation credit (at your highest compensation level in the one hundred
and eighty (180) day period prior to the Change in Control) for pension
purposes under any defined benefit type qualified or non-qualified pension
plan or arrangement of the Company and its affiliates applicable to you,
measured from the date of termination of employment and not credited to
the extent that you are otherwise entitled to such credit during such two
(2) year period, which payments shall be made through and in accordance
with the terms of the non-qualified defined benefit pension plan or
arrangement if any then exists, or, if not, in an actuarially equivalent
lump sum (using the actuarial factors then applying in the Company's or
its affiliates' defined benefit plan covering you); (D) an amount equal to
two (2) years of the maximum Company contribution (assuming you deferred
the maximum amount and continued to earn your then current salary)
measured from the date of termination of your employment under any type of
qualified or non-qualified 401(k) plan (payable at the end of each such
year and not payable to the extent otherwise contributed to such plan);
and (E) payment by the Company of the premiums for you (except in the
case of death) and your dependents' health coverage for two (2) years from
the date of termination of your employment under the Company's health
plans which cover the senior executives of the Company or materially
similar benefits (to the extent not otherwise provided), provided that in
the case of termination within one hundred and eighty (180) days prior to
a Change in Control, the obligations under this subpart (E) shall only
exist to the extent that you or your dependents, as the case may be, had
timely elected or timely elect COBRA coverage which continued at the time
of the Change in Control and the obligation with regard to the period
prior to the Change in Control shall be limited to reimbursement of the
COBRA premiums previously paid or due for such period. Any amendment or
termination of benefits, equity or incentive plans within one hundred and
eighty (180) days prior to, or after, a Change in Control that is
detrimental to you shall be ignored with respect to (C), (D) and (E)
above. Payments under (E) above may, at the discretion of the Company, be
made by continuing your participation in the plan as a terminee, by paying
the applicable COBRA premium for you and your dependents, or by covering
you and your dependents under substitute arrangements, provided that, to
the extent you incur tax that you would not have incurred as an active
employee as a result of the aforementioned coverage or the benefits
provided thereunder, you shall receive from the Company an additional
payment in the amount necessary so that you will have no additional cost
for receiving such items or any additional payment.
7. Arbitration.
Any dispute or controversy arising under or in connection with this
Agreement shall be settled exclusively by arbitration conducted in the
City of New York in the State of New York under the Commercial Arbitration
Rules then prevailing of the American Arbitration Association and such
submission shall request the American Arbitration Association to: (i)
appoint an arbitrator experienced and knowledgeable concerning the matter
then in dispute; (ii) require the testimony to be transcribed; (iii)
require the
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award to be accompanied by findings of fact and the statement of reasons
for the decision; and (iv) request the matter to be handled by and in
accordance with the expedited procedures provided for in the Commercial
Arbitration Rules. The determination of the arbitrators, which shall be
based upon a de novo interpretation of this Agreement, shall be final and
binding and judgment may be entered on the arbitrators' award in any court
having jurisdiction. All costs of the American Arbitration Association and
the arbitrator shall be borne as determined by the arbitrator.
8. Legal Fees.
In the event the Company does not make the payments due hereunder on a
timely basis and you collect any part or all of the payments provided for
hereunder or otherwise successfully enforce the terms of this Agreement by
or through a lawyer or lawyers, the Company shall pay all costs of such
collection or enforcement, including reasonable legal fees and other
reasonable fees and expenses which you may incur. The Company shall pay to
you interest at the prime lending rate as announced from time to time by
Citibank, N.A. on all or any part of any amount to be paid to you
hereunder that is not paid when due. The prime rate for each calendar
quarter shall be the prime rate in effect on the first day of the calendar
quarter.
9. No Duty to Mitigate/Set-off.
The Company agrees that if your employment with the Company is terminated
pursuant to this Agreement during the term of this Agreement, you shall
not be required to seek other employment or to attempt in any way to
reduce any amounts payable to you by the Company pursuant to this
Agreement. Further, the amount of any payment or benefit provided for in
this Agreement shall not be reduced by any compensation earned by you or
benefit provided to you as the result of employment by another employer or
otherwise. Except as otherwise provided herein and apart from any
disagreement between you and the Company concerning interpretation of this
Agreement or any term or provision hereof, the Company's obligations to
make the payments provided for in this Agreement and otherwise to perform
its obligations hereunder shall not be affected by any circumstances,
including without limitation, any set-off, counterclaim, recoupment,
defense or other right which the Company may have against you. The amounts
due under Section 6 are inclusive, and in lieu of, any amounts payable
under any other salary continuation or cash severance arrangement of the
Company on termination of employment that is or may become applicable to
you and to the extent paid or provided under any other such arrangement
shall be offset against the amount due hereunder.
10. Successors; Binding Agreement.
In addition to any obligations imposed by law upon any successor to the
Company, the Company will require any successor (whether direct or
indirect, by purchase, merger,
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consolidation or otherwise) to all or substantially all of the business
and/or assets of the Company to expressly assume and agree in writing to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken
place and this Agreement shall inure to the benefit of such successor. Any
such assignment shall not relieve the Company from liability hereunder.
This Agreement shall inure to the benefit of and be enforceable by your
personal or legal representatives, executors, administrators, successors,
heirs, distributees, devises and legatees. If you die while any amount
would still be payable to you hereunder if you had continued to live, all
such amounts, unless otherwise provided herein, shall be paid in
accordance with the terms of the Agreement to the executors, personal
representatives, estate trustees, or administrators of your estate. This
Agreement is personal to you and neither this Agreement nor any rights
hereunder may be assigned by you.
11. Notices.
Any notice or other communication required or permitted hereunder shall be
in writing and shall be delivered personally, or sent by registered mail,
postage prepaid as follows:
(i) If to the Company, at: Grove Worldwide, P 0 Box 21, Shady
Grove, PA 17256-0021, USA
Attention: Chief Executive Officer
(ii) If to you, to the last shown address on the books of the
Company.
Any such notice shall be deemed given when so delivered personally, or, if
mailed, five (5) days after the date of deposit (in the form of registered
or certified mail, return receipt requested, postage prepaid) in the
United States postal system. Any party may by notice designate another
address or person for receipt of notices hereunder.
12. Not an Agreement of Employment.
This is not an agreement assuring employment and the Company reserves the
right to terminate your employment at any time with or without Cause,
subject to the payment provisions hereof if such termination is after, or
within one hundred and eighty (180) days prior to, a Change in Control.
You acknowledge that you are aware that you shall have no claim against
the Company hereunder or for deprivation of the right to receive the
amounts hereunder as a result of any termination that does not
specifically satisfy the requirements hereof. The foregoing shall not
affect your rights under any other agreement with the Company.
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13. Miscellaneous.
No provisions 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 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
shall be deemed a waiver of similar or dissimilar provisions or conditions
at the same or at any prior or subsequent time. This Agreement constitutes
the entire Agreement between the parties hereto pertaining to the subject
matter hereof and supersedes any prior agreements between the Company and
you. No agreements or representations, oral or otherwise, 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. All
references to any law shall be deemed also to refer to any successor
provisions to such laws.
14. Acknowledgment.
You acknowledge that you: (a) have read this Agreement, understand its
terms and that it has been entered into by you voluntarily; (b) that the
payments to be made hereunder constitute additional compensation to you;
(c) have had sufficient opportunity to consider this Agreement and discuss
it with advisors of your choice, including your attorney and accountants;
(d) have been informed that you have the right to consider this Agreement
for a period of at least 21 days prior to entering into it; (e) have taken
sufficient time to consider this Agreement before signing it; and (f) have
the right to revoke this Agreement for a period of 7 days following the
Agreement's execution by giving written notice to the Company.
15. Release.
As a material inducement to the Company to enter into this Agreement, you
agree for yourself and your heirs, successors, and assigns that upon
receipt of the amounts payable under this Agreement you hereby release and
forever discharge the Company and any parent or affiliate thereof, its or
their respective directors, officers, employees, agents, representatives,
successors and assigns, from any and all claims, demands, actions,
liability, damages, back pay, attorney fees, or rights of any and every
kind or nature, accrued or unaccrued, known or unknown, arising out of or
in any manner relating to your employment and termination of employment
with the Company or its parents or affiliates including without limitation
any alleged violation of Title VII of the Civil Rights Act of 1964, the
Age Discrimination in Employment Act of 1967, the Employee Retirement
Income Security Act of 1974, as the same may have been or be amended from
time to time or any other federal, state or local law, regulation or
ordinance (except for your existing accrued rights under the Company's (or
any affiliate of the Company) pension plan, saving plan, health and
welfare benefit plans, and the rights already granted to you under the
Stock Option Scheme of Hanson PLC and/or any long term incentive plan of
the Company, and except as expressly set forth
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herein). If requested by the Company you agree to execute a further formal
waiver and release at the time of termination of your employment and the
payment by the Company of the amounts payable under this Agreement in the
terms set out or substantially in the terms set out in this Section 16.
16. Withholding Taxes.
The Company may withhold from any and all amounts payable under this
Agreement such federal, state and local taxes as may be required to be
withheld pursuant to any applicable law or regulation.
17. Governing Law.
This Agreement shall be construed, interpreted, and governed in accordance
with the laws of the State of Delaware without reference to rules relating
to conflicts of law.
Very truly yours,
By: /s/ Robert C. Stift
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Robert C. Stift
Chairman and Chief Executive Officer
Agreed and Accepted this
24th day of July 1997
/s/ James A. Kolinski
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James A. Kolinski
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EXHIBIT A
Change in Control
For purposes of this Agreement, the term "Change in Control" shall mean the sale
or transfer, directly or indirectly, of substantially all of the Company's
business and assets to an entity not affiliated with Hanson PLC, or the
purchase, directly or indirectly, by an entity not affiliated with Hanson PLC of
more than 50% of the outstanding shares of the common stock of the Company. For
purposes of this definition, an affiliate of Hanson PLC refers to any person or
business entity, directly or indirectly, controlling, controlled by, or under
the common control with Hanson PLC, with the term "control" referring to any
person or business entity owning, directly or indirectly, more than a 50% equity
interest in the controlled entity or possessing the power to direct or cause the
direction of the management or policies of the controlled entity.
Only one (1) Change in Control may take place under this Agreement.
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