AGREEMENT RE: TERMINATION FOLLOWING
CHANGE OF CONTROL OR ASSET SALE
This AGREEMENT is made and dated as of December 14, 2004, between Xxxxxx X.
Xxxxxxxxx ("Executive") and Selas Corporation of America ("Selas").
WHEREAS, Executive has been effective in performing his services to Selas;
and
WHEREAS, Executive is Chief Financial Officer, Vice President, Treasurer
and Secretary of Selas; and
WHEREAS, Selas recognizes the valuable services that Executive has rendered
and desires to induce Executive to continue his active participation in the
business of Selas by giving Executive certain assurances in the event of major
changes in the structure or control of Selas;
NOW, THEREFORE, in consideration of the agreements herein contained, and
intending to be legally bound, the parties hereto agree as follows:
1. Termination Payment. If a Change of Control of Selas occurs during the
term of this Agreement, and if Executive's employment by Selas is Involuntarily
Terminated within one year after such Change of Control, Selas shall pay or
cause to be paid to Executive, simultaneously with such Involuntary Termination,
two years base salary at the base salary rate being earned by Executive
immediately prior to the Change of Control or immediately prior to such
Involuntary Termination, whichever is greater, together with all unpaid bonus,
salary and benefits due to Executive. If a Change of Control of Selas occurs
during the term of this Agreement, all stock options previously granted to
Executive under any Selas stock option plan or otherwise shall vest immediately
upon such Change of Control and be exercisable in accordance with the terms of
such stock options. If an Asset Sale occurs during the term of this
Agreement, and if Executive's employment by Selas is Involuntarily Terminated
within one year after such Asset Sale, Selas shall pay or cause to be paid to
Executive, simultaneously with such Involuntary Termination, two years base
salary at the base salary rate being earned by Executive immediately prior to
such Asset Sale or immediately prior to such Involuntary Termination, whichever
is greater, together with all unpaid bonus, salary and benefits due to
Executive; PROVIDED, HOWEVER, that Selas need not make such payment if the
purchaser in such Asset Sale or an affiliate of such purchaser offers to employ
Executive commencing at the time of closing of the Asset Sale at not less than
the same rate of compensation (including both base salary and good faith bonus
potential) and level of benefits as Executive was receiving immediately prior to
the Asset Sale and does not Involuntarily Terminate Executive's employment
during the one year period after the consummation of the Asset Sale. Selas
agrees that any agreement to sell substantially all of the assets of Selas shall
include a provision obligating the purchaser to fulfill any of Selas'
obligations to Executive under this Agreement should Selas fail to fulfill said
obligations. With respect to payment of bonus and benefits as provided in this
section, if any bonus or benefits plan would compensate Executive only on the
condition that Executive remains employed through the end of the applicable
year, said condition shall not prevent Executive from receiving a pro rata
portion of said bonus or benefits in the event of an Involuntary Termination
within one year of a Change of Control or Asset Sale. If an Asset Sale occurs
during the term of this Agreement, all stock options previously granted to
Executive under any Selas stock option plan or otherwise shall vest immediately
upon such Asset Sale and be exercisable in accordance with the terms of such
stock options. For the purposes of any compensation, benefits, or other sums to
be paid to Executive under this section, "simultaneously with" shall mean that
any earned but unpaid vacation, and any unpaid salary and bonus, shall be
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paid within three business days of an Involuntary Termination; any other
employee benefits shall be paid according to the terms of the applicable plans;
and the severance in an amount equal to two years base salary to be paid under
this Agreement shall be paid in a lump sum within two weeks of an Involuntary
Termination. Notwithstanding any other provision hereof, the obligations of
Selas hereunder shall arise, if at all, only in connection with the earlier of
the first Change of Control or first Asset Sale to occur after the date hereof;
any second Change of Control or second Asset Sale which may occur within the one
year period following the first Change of Control or first Asset Sale shall
neither diminish nor trigger again the obligations set forth herein to the
extent that such obligations may be applicable, it being understood that such
obligations shall in no event extend beyond one year after the first Change of
Control or Asset Sale.
The following terms used herein have the meanings set forth below:
"Asset Sale" means the sale of the assets of Selas (including the stock of
subsidiaries of Selas) to which are attributable 90% or more of the consolidated
sales volume of Selas; notwithstanding the foregoing and without limiting the
generality of the foregoing, the sale of all or substantially all of the assets
or stock of Selas' Precision Miniature Medical and Electronics Products Business
shall constitute an Asset Sale.
"Cause" means the following, provided that, in the case of circumstances
described in clauses (iv) through (vi) below, Selas shall have given written
notice thereof to Executive, and Executive shall have failed to remedy the
circumstances as determined in the sole discretion of the Board of Directors of
Selas within 30 days thereafter: (i) fraud or dishonesty in connection with
Executive's employment or theft, misappropriation or embezzlement of Selas's
funds; (ii) conviction of any felony, crime involving fraud or knowing
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misrepresentation, or of any other crime (whether or not such felony or crime is
connected with his employment) the effect of which in the judgment of the Board
of Directors of Selas is likely to adversely affect Selas or its affiliates;
(iii) material breach of Executive's employment obligations; (iv) repeated and
consistent failure of Executive to be present at work during normal business
hours unless the absence is because of a Disability; (v) willful violation of
any express direction or requirement established by the Board of Directors of
Selas, as determined by a majority of Board of Directors of Selas; (vi)
insubordination, gross incompetence or misconduct in the performance of, or
gross neglect of, Executive's duties hereunder, as determined by a majority of
Board of Directors of Selas; or (vii) use of alcohol or other drugs which
interfere with the performance by Executive of his duties, or use of any illegal
drugs or narcotics.
"Change of Control" of Selas means the acquisition by any "person"(as such
term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934
(the "Exchange Act"), including any affiliate or associate as defined in Rule
12b-2 under the Exchange Act of such person, other than Selas, any trustee or
other fiduciary holding securities under an employee benefit plan of Selas, or
any corporation owned, directly or indirectly, by the shareholders of Selas in
substantially the same proportion as their ownership of capital stock of Selas,
becomes a "beneficial owner" (as defined in Rule 13d-3 under the Exchange Act),
directly or indirectly, of 50% or more of the combined voting power of Selas'
then outstanding securities.
"Disability" of Executive means that after being provided with any
accommodation or leave required of Selas by law, the Executive still shall be
physically or mentally incapacitated and as a result thereof shall be unable to
continue substantially proper performance of his duties (reasonable absences
because of sickness for up to six consecutive months excepted). If Executive
shall not agree with a determination to terminate him because of
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Disability, the question of Executive's ability shall be submitted to an
impartial and reputable physician selected either by a mutual agreement of the
parties or by the then president of the Medical Society of the county in which
Executive is employed, and such physician's determination of disability shall be
binding on the parties.
"Involuntary Termination" (or "Involuntarily Terminated") means (a) any
termination of employment of the Executive by Executive following (i) any
reduction without his consent within the year following a Change of Control or
Asset Sale in the amount of annual base compensation or in the employee benefits
(but not in the amount of bonuses) inuring to Executive, as compared to the
level of base compensation or benefits inuring to Executive immediately prior to
the preceding Change of Control or Asset Sale, (ii) the imposition on Executive
of a requirement that he change the location of his principal employment to a
location more than 20 miles from the location immediately prior to the Change of
Control or Asset Sale in order to maintain his employment or to maintain his
compensation at its level immediately prior to the preceding Change of Control
or Asset Sale if such change of location would impose a substantial burden on
the Executive in commuting from his then residence to the new place of
employment or (iii) the assignment to the Executive of duties that do not
constitute managerial duties or duties for which his training and experience do
not qualify him or (b) any termination of the employment of Executive by Selas
other than for Cause, death or Disability.
2. Other Benefits. This Agreement shall not prejudice Executive's or his
beneficiary's right to receive any death, disability, pension, 401-k, qualified
benefit, or other benefits under any contract or plan otherwise due to Executive
upon or following termination.
3. No Duty to Mitigate. Executive's benefits hereunder shall be considered
severance pay in consideration of his past service to Selas, and pay in
consideration of his
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continued service from the date hereof, and his entitlement thereto shall not be
governed by any duty to mitigate his damages by seeking further employment, nor
offset by any compensation which he may receive from future employment.
4. Withholding; Other Tax Matters. Any payment required under this
Agreement shall be subject to all applicable requirements of law with regard to
withholding, filing, making of reports and the like.
5. Term. This Agreement shall terminate, except to the extent that any
obligation hereunder remains unpaid as of such time, upon the earlier of (i) the
termination of Executive's employment with Selas prior to a Change of Control or
Asset Sale for any reason; or (ii) the termination of Executive's employment
with Selas (or any successor) after a Change of Control or Asset Sale for any
reason other than by Involuntary Termination.
6. Miscellaneous.
a. This Agreement represents the entire agreement of the parties hereto
with respect to the subject matter hereof and supersedes all prior agreements in
connection therewith. Without limiting the generality of the preceding sentence,
Executive hereby acknowledges that Selas shall have no obligation to him under
the termination program established in 1986.
b. In the event that any provision of this Agreement shall be determined
to be invalid, the remaining provisions shall be unaffected thereby and shall
remain in full force and effect.
c. This Agreement shall not be assignable by Executive, but Selas'
obligation under the third sentence of Section 1 in connection with an Asset
Sale may be assigned by Selas to the purchaser in connection with such Asset
Sale if the Executive becomes
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an employee of the purchaser or an affiliate immediately after the Asset Sale,
in which case the assignee shall expressly assume and agree to perform the
obligations set forth in the second sentence of Section 1 in connection with
such Asset Sale in the same manner and to the same extent as if it were Selas
and Selas shall by virtue thereof and without further act be released from its
obligations hereunder.
d. Any notice given hereunder shall be deemed to be given when
personally delivered or mailed by certified or registered mail, return receipt
requested, addressed to Selas at its principal offices or addressed to Executive
at his latest address shown on the employment records.
e. A waiver of breach of any provision hereof shall not be construed as
a waiver of any subsequent breach hereof.
f. If it is necessary for Executive to xxx for payment hereunder, and
such suit results in any payment to Executive, the employer shall pay
Executive's reasonable counsel fees relating to such litigation.
g. This Agreement may be amended, waived or terminated only by written
instrument signed by both parties hereto.
h. This Agreement shall be construed in accordance with the laws of the
Commonwealth of Pennsylvania.
i. Upon the occurrence of a Change of Control or Asset Sale, Selas or
its assignee waives, and will not assert, any right to set off the amount of any
claims, liabilities, damages or losses Selas or its assignee may have against
any amounts payable by it to Executive hereunder, and any amounts payable to or
otherwise accrued for the account of Executive in respect of any period prior to
the termination of this Agreement shall be paid when due.
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j. Nothing herein shall diminish Selas' right to terminate the
employment of the Executive prior to a Change of Control or Asset Sale or impose
any obligation to make any payment to the Executive in connection with any such
termination.
[Signatures begin on the next page]
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IN WITNESS WHEREOF, Selas and Executive have executed this Agreement as of
the date first above written.
SELAS CORPORATION OF AMERICA
By: /s/ Xxxxxxx X. XxXxxxx
---------------------------------------
Name: Xxxxxxx X. XxXxxxx
Title: Chairman of the Board
/s/ Xxxxxx X. Xxxxxxxxx
---------------------------------------
Xxxxxx X. Xxxxxxxxx
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