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EXHIBIT 10.2
AMENDMENT NO. 1 TO THE AMENDED
EMPLOYMENT RETENTION AGREEMENT
BETWEEN
SPECIALTY EQUIPMENT COMPANIES, INC.
AND
XXXXXX X. XXXXXX
WHEREAS, Specialty Equipment Companies, Inc. (the "Company") and Xxxxxx X.
Xxxxxx (the "Executive") entered into an Amended Employment Retention Agreement
dated as of July 26, 2000 (the "Agreement");
WHEREAS, the Company and the Executive wish to amend the Agreement to
modify the Executive's ability to voluntarily resign for Good Reason and to
provide for other modifications as set forth below (the "Amendment");
WHEREAS, the Company is entering into an Agreement and Plan of Merger, of
even date herewith, with United Technologies Corp. and Solar Acquisition Corp.
(collectively "UTC") pursuant to which UTC will acquire all shares of common
stock of the Company (the "Merger Agreement");
WHEREAS, the Company and the Executive wish for the Amendment provided
herein to be effective only upon the closing of the transaction set forth in the
Merger Agreement (the "Closing"); and
WHEREAS, all defined terms used herein shall have the meanings set forth in
the Agreement unless specifically defined herein.
NOW, THEREFORE, for mutual consideration the receipt of which is hereby
acknowledged, the Agreement is hereby amended as follows:
1. Section 1 of the Agreement is hereby amended by replacing such section in
its entirety with the following:
1. Term of Employment. The Company hereby agrees to employ the
Executive, and subject to Section 3 of this Agreement the Executive hereby
agrees to be employed by the Company, for the period commencing on May 1,
2000 and ending on the second anniversary of the Closing, unless terminated
earlier in accordance with Section 3 (the "Employment Period").
2. Section 2(b)(i) of the Agreement is hereby amended by replacing the first
sentence thereof in its entirety with the following:
As of the Effective Date and during the Employment Period thereafter,
the Company shall pay or cause to be paid to the Executive a base salary in
cash at an annual rate of (A) with respect to the portion of the Employment
Period on or before the
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Closing, at least $225,000; and (B) with respect to the portion of the
Employment Period thereafter, at least $175,000 (the "Guaranteed Base
Salary").
3. Section 2(b)(ii) of the Agreement is hereby amended by replacing such
section in its entirety with the following:
(ii) Cash Incentive Payments. The Executive shall be entitled to
receive a cash incentive payment of $67,500 in respect of 2000 and $100,000
in respect of 2001, such payments subject to the Executive's continued
employment during the Employment Period, and in lieu of, and not in
addition to, any other cash incentive payments he may be entitled to under
any other cash incentive plans.
4. Section 2 of the Agreement is hereby amended as follows by adding the
following new Sections 2(b)(iv), (v) and (vi):
(iv) Following the Closing, and during the Employment Period, the
Company shall pay or cause to be paid to the Executive a transition payment
such that when added to the actual salary and bonus paid during the year
the total is no less than (A) the annual base salary of Executive
immediately prior to the Closing, plus (B) an incentive amount equal to the
amount specified in Section 2(b)(ii), as modified above. The Transition
Payment will be paid in monthly installments, less tax withholding. The
Transition Payment shall not be treated as compensation under any of the
Company's retirement, welfare, executive compensation or other plans.
(v) Beginning on January 1, 2001, in lieu of the cash incentive plan
described in subsection (ii) for periods after the close of the Company's
fiscal year ending January 31, 2001, the Executive shall be eligible to
participate in the annual Incentive Compensation ("AIC") program of UTC at
the target ranges appropriate to Executive's compensation level and with
business performance and individual performance targets and objectives
consistent with program guidelines as applicable to peer executives.
(vi) Beginning on January 1, 2001, in lieu of participation in the
Long-Term Incentive Plan described in subsection (iii), the Executive shall
be entitled to participate in the Continuous Improvement Incentive Plan
("CIIP") of UTC and be eligible for grants of stock options in amounts and
on terms and conditions appropriate to Executive's compensation level
consistent with program guidelines as applicable to peer executives.
5. Section 3(c) of the Agreement is hereby amended by replacing such section
in its entirety with the following:
(c) Good Reason. The Executive may terminate the Executive's
employment for Good Reason (A) at any time during the Employment Period in
the case of Good Reason as described in clauses (i), (ii), (iii) or (iv),
below, or (B) on or after the second anniversary of the Closing in the
cases of Good Reason as described in clause (v) below.
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For the purposes of this Agreement, "Good Reason" means any one of the
following events:
(i) any failure by the Company to comply with any provision of
Sections 2(b)(i), 2(b)(ii) (both as modified by this Amendment) or
Section 2(b)(iv), 2(b)(v), or 2(b)(vi), other than an isolated,
insubstantial and inadvertent failure not occurring in bad faith and
which is remedied by the Company promptly after receipt of notice
thereof given by the Executive;
(ii) any failure by the Company to comply with and satisfy
Section 11(c) of this Agreement;
(iii) any reassignment of the Executive, within two years after
the Closing, without his written consent, to a work location located
more than 50 miles from his work location at the Effective Date;
(iv) the Executive no longer reports to Xxxxxxx Xxxxxxxxxxx; or
(v) a material change by the Company in the Executive's title,
authority, working conditions, function reporting responsibilities,
status or any other action by the Company (other than a change in the
Executive's reporting relationship to Xxxxxxx Xxxxxxxxxxx) which would
cause the Executive's position with the Company to become one of
materially less responsibility, importance, or scope from the position
and attributes thereof described in Section 2(a)(i) above, or which
material action or change would unreasonably add to the burdens of his
duties, excluding for this purpose an isolated, insubstantial and
inadvertent action not taken in bad faith and which is remedied by the
Company promptly after receipt of notice thereof given by the
Executive, provided, however, that the hiring of additional executives
whose responsibilities overlap those of the Executive shall not
necessarily constitute Good Reason.
6. Section 4 of the Agreement is hereby amended by inserting before the colon
at the end of the first paragraph thereof the following:
; provided, however, that any lump sum amount payable under this
Section 4 shall be decreased by the total amount of Transition Benefit paid
to the Executive during the term of this Agreement, in accordance with
Section 2(b)(iv), and provided further that any amount payable under this
Section 4 shall be based upon the Guaranteed Base Salary in effect
immediately prior to the Closing, and provided finally that if the amounts
specified in Section 4 have not become payable before the second
anniversary of the Closing and Executive has not been terminated by the
Company for Cause or resigned without Good Reason, then the amounts
specified in Section 4 shall be paid to Executive in a lump sum upon the
second anniversary of the Closing whether or not the Executive remains
employed by the Company following the second anniversary of the Closing:
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7. Section 7 of the Agreement is hereby amended by replacing such section in
its entirety with the following:
7. Non-competition. The Executive agrees that while he is employed
hereunder and for a period of one year following the termination of the
Executive's employment for any reason, and occurring at any time, including
any time after the end of the Employment Period, the Executive shall not be
employed by or enter into or engage in or be connected with or engage to
work for any individual, firm or corporation which is engaged in or
connected with any business that competes, directly or indirectly, with the
Company (including, without limitation, in the supply of equipment for the
food retail, food service or beverage industries), unless he obtains the
express written approval of the Vice President, Human Resources of Carrier
Corporation (or his or her functional equivalent), who shall grant or
withhold consent in his or her sole discretion after the Executive's full
disclosure of the nature of the intended arrangement. The obligations of
this Section 7 shall survive the termination of this Agreement.
8. The amendments made by this Amendment shall be effective from and after the
Closing conditional on the occurrence of the Closing on or before March 1, 2001.
If for any reason the Closing does not occur on or before March 1, 2001, the
amendments made by this Amendment shall have no effect.
IN WITNESS WHEREOF, the Executive and the Company have executed this
Amendment as of the 13th day of October, 2000.
EXECUTIVE: XXXXXX X. XXXXXX
/s/ Xxxxxx X. Xxxxxx
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Signature
COMPANY: SPECIALTY EQUIPMENT COMPANIES, INC.
By: /s/ Xxxx Xxxxxxxxxxx
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Name: Xxxx Xxxxxxxxxxx
Title: President & CEO
