Exhibit 99.1
February 14, 2006
Michael S. Carney
124 Sweetwater Oaks
Peachtree City, GA 30629
USA
Dear Mike,
This letter will serve to confirm the elements of your expatriate
assignment. It is intended that your assignment will be effective on or
about January 5, 2006 and shall remain in effect until terminated by either
party upon ninety (90) days prior written notice to the other party.
Notwithstanding this, except for cause, neither party may provide notice of
termination prior to March 31, 2007. You will be based in Schopfheim,
Germany as a Gardner Denver, Inc. international assignee on a temporary
assignment, with repatriation to Peachtree City, GA, United States, your
point of origin, or reassignment to another location based upon business
needs of the Company.
The terms and conditions of your assignment are summarized in this document
and the following attachments:
o Relocation Acknowledgment Clause
o International Assignment Tax Equalization Agreement
o Summary of International Assignment Provisions
This letter, together with its attachments, states our entire understanding
of your assignment. However, this letter does not modify, amend or supersede
written Gardner Denver, Inc. agreements and policies that are consistent
with enforceable provisions of this letter. You should not sign this letter
unless you understand it. While it is not the intention of the Company to do
so, some listed provisions may be changed from time to time as legal
requirements may dictate, new practices may require or for other reasons at
the discretion of the Company. In the event this should happen, notification
will be provided. If questions should arise concerning any provision listed
or any subsequent revisions to policies applicable to employees on
international assignment, you are urged to consult with your International
Assignment Consultant, Josi Mariano at Cendant Mobility, or Charles E.
Schaut, VP Human Resources.
You will be an employee of the home country company, paid on the home
country payroll. Salary actions, including timing and amounts of increases,
will be consistent with the salary program in effect in your home country.
While on assignment, incentive payments will be administered and paid
according to the programs in the payroll country.
While you are on International Assignment, Gardner Denver, Inc. will provide
you with a Goods & Services Allowance for the duration of your assignment.
This payment is designed to offset the additional cost of goods and services
between Peachtree City and Schopfheim (using Basel, Switzerland tables).
This payment will be a supplement to your cash compensation and will not be
considered a part of your normal base salary.
Semi-annual updates will occur to adjust the Allowance up or down if
necessary. Revision of the G&S Allowance will also be brought about by 10%
changes in the exchange rate (up or down) between the point of origin and
host locations.
Life insurance, retirement plans, disability and healthcare coverage will be
provided from your payroll country while on assignment. During your
pre-assignment consultation you will be provided further details regarding
how your medical coverage is affected by your international assignment.
Your assignment is conditional upon the issue and maintenance of valid
residency, work and/or any other permits necessary to legally reside and
work in Germany.
Gardner Denver, Inc. will not guarantee the length of any international
assignment. Your assignment will continue as long as mutually acceptable. A
long-term assignment is expected to be for a period of less than three
years. The actual time will vary and may be impacted by personal
emergencies, Company business circumstances or performance.
Upon the conclusion of your assignment in Germany, you will receive a
repatriation package which will include (i) an en-route travel allowance for
you and your family and (ii) a miscellaneous expense allowance. We will also
repatriate you by attempting to secure a similar position for you at one of
Gardner Denver's U.S. locations. In the event that no such position is
available, we would then provide you with twelve (12) months of severance
pay.
Any disputes under this letter that cannot be resolved through negotiations
between the parties shall be finally resolved by arbitration under the
Commercial Arbitration Rules of the American Arbitration Association, which
Rules are deemed to be incorporated by reference herein. The number of
arbitrators shall be 1. The seat, or legal place, of arbitration shall be
Chicago, Illinois. The governing law of this letter shall be the internal
law of the State of Illinois, USA, without regards to conflict of laws
principles. Judgment upon the award rendered by the arbitrator shall be
deemed final, binding and non-appealable.
Please acknowledge receipt of this letter and agreement with its terms by
signing the two originals and returning one to the person listed below.
Sincerely yours,
/s/ Ross J. Centanni February 14, 2006
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Signature Date
Ross J. Centanni
President, CEO & Chairman of the Board
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ACKNOWLEDGE AND CONCUR: /s/ Michael S. Carney February 19, 2006
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Michael S. Carney Date
...............................................................................
This signature denotes that you have read and understood the Assignment
Letter.
Return one original to: Charles E. Schaut
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Page 2
February 14, 2006
Michael S. Carney
124 Sweetwater Oaks
Peachtree City, GA 30629
USA
RELOCATION ACKNOWLEDGMENT CLAUSE
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I understand and agree that all relocation/allowance payments made to me or
on my behalf by Gardner Denver, Inc. prior to completing one year of
employment in the new assignment are in the nature of an advance, that is, I
have not earned those payments until I have completed one year of employment
in the new assignment.
In the event I resign, Gardner Denver, Inc. will not assume the cost for
return transportation to the home country or return shipment of furniture,
household goods, or personal effects except where mandated by law. Should I
choose to remain in the host location, my tax equalization calculation will
assume that I left the country within 30 days of separation. Should I resign
within the first 12 months I will be required to repay a prorated portion of
the relocation/assignment costs.
In the event of involuntary termination due to performance issues and/or job
restructuring, no reimbursement is required.
If my employment with Gardner Denver, Inc. terminates prior to one year of
service in the new assignment, at the time of termination of my employment I
authorize Gardner Denver, Inc. to withhold from my final paycheck any
assignment related monies due to Gardner Denver, Inc. in accordance with the
formula stated above. In the event the amount I owe Gardner Denver, Inc. is
greater than the amount of my final paycheck, I agree to pay the balance in
full to Gardner Denver, Inc. within thirty (30) days of my termination date.
/s/ Michael S. Carney February 19, 2006
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Michael S. Carney
Signature Date
Page 3
GARDNER DENVER, INC.
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INTERNATIONAL ASSIGNMENT TAX EQUALIZATION AGREEMENT
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I understand and agree that Gardner Denver, Inc. will reduce my compensation
by an estimated hypothetical tax. The estimated hypothetical tax is an
amount which approximates my periodic estimated tax deductions calculated
with reference to compensation, benefits, deductions and credits otherwise
available to me had I remained in my home country, except as otherwise
provided in this Agreement. In return, Gardner Denver, Inc. will advance
wages that I have not yet earned to assist with the payment of my actual
home and host country tax liabilities within the limits prescribed by this
Agreement.
I understand that these wage advances provided by Gardner Denver, Inc. for
payment of taxes constitutes an obligation by me to Gardner Denver, Inc.,
which will be reconciled with the final liabilities that are Gardner Denver,
Inc.'s responsibility through the annual tax equalization settlement
calculation. After completion of the tax equalization settlement statement
for each taxable year, I agree to repay any obligation for each taxable year
within thirty (30) days. If I fail to repay any obligation to Gardner
Denver, Inc. within thirty (30) days after completion of the tax
equalization settlement statement, then, unless Gardner Denver, Inc. and I
have agreed otherwise in writing, Gardner Denver, Inc. shall have the right
to:
a) reduce any foreign assignment allowances or reimbursements due to
me, and/or
b) reduce future amounts paid to me whether as wages, salary or other
compensation for services performed in light of my having received
wage advances that I have not yet earned.
The total obligation will become immediately due and payable if my
employment with Gardner Denver, Inc. or any of its affiliate corporations is
terminated, whether voluntarily or involuntarily.
If I fail to furnish tax records in response to a request by Gardner Denver,
Inc. pursuant to this Agreement, or cease employment with Gardner Denver,
Inc. or any of its subsidiaries for any reason before the tax records needed
to complete the year-end tax equalization settlement statement under this
Agreement are available, then Gardner Denver, Inc. shall have the right to
calculate such amounts by making reasonable assumptions of probable taxes.
If an amount is owed to Gardner Denver, Inc., Gardner Denver, Inc. shall
also have the right to require immediate payment of such amount, including
the right to reduce future amounts paid to me whether as wages, salary or
other compensation for services performed in light of my having received
wage advances that I have not yet earned, unless Gardner Denver, Inc. and I
have agreed otherwise in writing.
Any questions concerning this Agreement with Gardner Denver, Inc. have been
fully explained to my satisfaction. I accept that all interpretations under
this agreement shall be controlled by Gardner Denver, Inc. Gardner Denver,
Inc. shall have the right and privilege at any time it deems necessary and
proper to amend, add, or delete provisions to and from the Tax Equalization
Agreement without prior notice.
I understand and agree that all tax positions affecting income, deductions
and credits outside the scope of the Agreement (i.e., amounts not covered
under the Tax Equalization process) are the responsibility of the employee.
Gardner Denver, Inc. is not liable for any taxes, penalties, or interest
resulting from a successful challenge by any tax authority of any item not
covered under the Tax Equalization process.
In addition, I understand the employee is fully responsible for all
penalties and interest charges assessed by any tax authority due to the
employee's failure to (1) provide information to Rubin Brown LLP in a timely
basis, (2) notify Rubin Brown LLP of any significant personal income or
investment transactions, or (3) cooperate with Gardner Denver, Inc. with
respect to the tax equalization process.
I acknowledge having understood the Tax Equalization Agreement of Gardner
Denver, Inc. and understand the personal impact to this Agreement.
By signing, I accept all terms and conditions of this Tax Equalization
Agreement.
Acknowledgment and acceptance:
/s/ Michael S. Carney
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Michael S. Carney Employee ID Number
February 19, 2006
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Signature Date
Page 4
Summary of International Assignment Provisions
IA Name: Michael S. Carney
Assignment Location: Schopfheim, Germany
Payroll Location: Peachtree City, GA, USA
Payroll Calendar: Semi-monthly / 24 pay periods per year
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AMOUNT IN HOME OR HOST
COUNTRY CURRENCY FREQUENCY OF PAYMENT
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BASE SALARY USD 263,000.00 per annum USD 10,958.33 per pay period
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HYPOTHETICAL-TAX * USD (84,290.00) per annum USD (3,512.08) per pay period
(Deduction)
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DESTINATION SERVICES Direct billed to vendor by Cendant Mobility
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SHIPMENT OF AUTO TO AND FROM GERMANY Paid directly to vendor by Cendant Mobility
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VISA & IMMIGRATION Paid directly to vendor by Cendant Mobility
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SHIPMENT OF GOODS TO AND FROM Paid directly to vendor by Cendant
GERMANY AND FURNITURE RENTAL Mobility MAXIMUN USD 25,000
WHILE ON ASSIGNMENT DURING THE ASSIGNMENT
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Economy airfare, expenses reimbursed upon
EN-ROUTE TRAVEL submission to Cendant Mobility (approved
assignment expense report form and receipts)
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One-time payment of USD 3,000.00, per
MAJOR APPLIANCE ALLOWANCE client authorization
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MISCELLANEOUS RELOCATION PAYMENT Per Client authorization USD 10,958.33 through home payroll
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GOODS & SERVICES ALLOWANCE USD 75,624.00 per annum USD 3,151.00 per pay period
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TENANCY MANAGEMENT (Home Management Direct billed to Company
Services) by Cendant Mobility
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HOST COUNTRY HOUSING EUR 19,200.00 per annum EUR 800.00 per pay period (or paid
ALLOWANCE ** direct to landlord by Cendant Mobility)
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HOST UTILITIES Up to EUR 2,568.00 per annum EUR 107.00 per pay period
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An automobile will be made available in
AUTOMOBILE ALLOWANCE accordance with, and pursuant to, Gardner
Denver's fleet policy.
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EDUCATION Expenses reimbursed upon submission to
Cendant based on actual invoices
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Maximum allowance is USD 15,000 including
economy airfare, hotel & car rental,
ANNUAL HOME LEAVE expenses reimbursed upon submission to
Cendant Mobility (approved assignment
expense report form and receipts)
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Arranged and paid by local
management, or expenses reimbursed
EMERGENCY TRAVEL upon submission to Cendant Mobility
(approved assignment expense report
form and receipts)
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Your International Assignment will be covered by the Gardner Denver, Inc.
Tax Equalization Agreement. The Company's philosophy regarding tax
equalization is that as an international assignee, you will neither
materially gain nor lose from the difference in income and social tax
costs between your home and host countries, within certain parameters.
Gardner Denver, Inc. has retained an independent tax accounting firm, Rubin
Brown LLP to provide assistance with the preparation of both your home and
TAXES local country income tax returns and to prepare annual tax equalization
calculations. Please contact James R. Ritts (314) 290-3400 to arrange a tax
orientation meeting.
Payment of allowances will not commence until you have met with Rubin Brown
LLP and have completed all required steps necessary to implement a
hypothetical tax withholding.
Fees associated with personal financial planning and other tax services that
you request from Rubin Brown LLP shall be borne by you personally.
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REPATRIATION (1)
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REPATRIATION ALLOWANCE USD 10,958.33 per client authorization
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Economy airfare, expenses reimbursed upon
FINAL TRIP submission to Cendant Mobility (approved
assignment expense report form and receipts)
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<FN>
* Estimate - actual hypothetical home country tax will be determined after
your consultation with the Rubin Brown LLP.
** Host Country Housing Cost reflects rent/lease amount only. Any local tax
or other fees are in addition to amount indicated.
(1) While the Company cannot provide a guarantee of any specific assignment
upon return to your home country, the Company will attempt to assign you to
a position in keeping with both experience and performance.
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