OFFICER’S EMPLOYMENT
AGREEMENT
This Amendment
No. 3 to Officer’s Employment Agreement, dated as of
December 8, 2008, by and between KENNAMETAL INC., a
corporation organized under the laws of the Commonwealth of
Pennsylvania (hereinafter referred to as “ Kennametal
” or the “ Corporation ”), for and on
behalf of itself and on behalf of its subsidiary companies, and
Carlos M. Cardoso, an individual (hereinafter referred to as
“ Employee’ ).
WHEREAS, the
Corporation and Employee are parties to that certain letter
agreement, dated March 8, 2003 and that certain
Officer’s Employment Agreement, dated as of April 29,
2003, as amended by that certain Amendment to Officer’s
Employment Agreement, dated as of December 17, 2003 and as
further amended by that certain letter agreement, dated
December 6, 2005 (collectively, the “ Employment
Agreement ”), and desire to amend the Employment
Agreement as set forth herein to ensure compliance with
Section 409A of the Internal Revenue Code of 1986, as amended,
and the regulations promulgated thereunder
(“Section 409A”); and
WHEREAS,
Section 12 of the Employment Agreement provides that the
Employment Agreement may only be amended by an instrument in
writing signed by each of the parties to the agreement.
NOW THEREFORE, in
consideration of the premises, the mutual covenants and agreements
contained herein; and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the
Corporation and Employee, intending to be legally bound, agree as
follows:
1.
Amendments . The parties hereto hereby amend the Employment
Agreement as follows:
A.
Section 3 . Section 3 of the Employment Agreement
is hereby amended by deleting the phrase “for
termination” and by deleting the phrase “, other than
termination for Good Reason (as hereafter defined) following a
Change in Control (as hereafter defined)”.
B.
Section 4 . Section 4 of the Employment Agreement
is hereby amended as follows:
i. Section 4(a)
is hereby amended and restated in its entirety to read as
follows:
“In the
event that Employee’s employment is involuntarily terminated
by Kennametal prior to a Change-in-Control (as hereinafter defined)
and other than for Cause, Employee will receive as severance pay,
in addition to all amounts due him at the Date of Termination (as
hereinafter defined), the continuance of the Employee’s base
salary (at the rate in effect on the Date of Termination and
subject to applicable deductions and withholdings) for twenty-four
(24) months following the Date of Termination, which salary
continuation will be directly offset by any subsequent salary or
employment during such twenty-four month period. Any severance pay
will be paid in substantially equal installments, no less
frequently than monthly, in accordance with Kennametal’s
established payroll policies and practices as in effect on the Date
of Termination beginning on the first normal pay date thereafter;
provided however, any payments that the Employee would be entitled
to during the first six months following the Date of Termination
shall be delayed and accumulated and paid on the first business day
of the seventh month following the Employee’s Date of
Termination (or, if earlier, the date of the Employee’s
death).”
ii. Section 4(c)
of the Employment Agreement is hereby amended by inserting the word
“involuntarily” before the phrase “by
Kennametal” appearing in the third line thereof, by replacing
the phrase “at Employee’s election” found in
clause (x) of subsection (ii) of this Section 4(c) with
the phrase “if greater” and the sentence following
clause (y) of subsection (ii) of this Section 4(c) is
deleted in its entirety and replaced with the following
language:
“Such
severance pay shall be paid by delivery of a cashier’s or
certified check to the Employee at Kennametal’s executive
offices on the first business day of the seventh month following
the Employee’s Date of Termination (or, if earlier, the date
of the Employee’s death).”
iii. Section 4(d)
is hereby deleted in its entirety, with the following language
inserted in lieu thereof:
“The
medical, dental, disability and group insurance benefits to be
provided under Paragraph 4(c) will be provided as
follows:
(i) Life
insurance benefits and disability benefits shall be provided
through the reimbursement of Employee’s premiums upon
conversion to individual policy.
(ii) The
first eighteen (18) months of medical and dental insurance
coverage will be available through the Consolidated Omnibus Budget
Reconciliation Act of 1985, as amended (“COBRA”).
Provided the Employee timely elects COBRA continuation coverage,
the Employee shall continue to participate in all medical and
dental insurance plans he was participating in on the date of
termination, and the Corporation shall pay the applicable premium.
To the extent that Employee had dependent coverage immediately
prior to termination of employment, such continuation of benefits
for Employee shall also cover Employee’s dependents for so
long as Employee is receiving benefits under this Paragraph and
such dependents remain eligible. The COBRA continuation period for
medical and dental insurance under this Paragraph shall be deemed
to run concurrent with the continuation period federally mandated
by COBRA, or any other legally mandated and applicable federal,
state, or local coverage period.
(iii) Following the conclusion of the COBRA
continuation period, the Corporation will provide coverage for the
remainder of the three year period as follows:
(a) If the
relevant medical plan is self insured (within the meaning of Code
Section 105(h)), and such plan permits coverage for the
Employee, then the Corporation will continue to provide coverage
during the three year period and will annually impute income to the
Employee for the fair market value of the premium.
(b) If, however,
the plan does not permit the continued participation following the
end of the COBRA continuation period as contemplated above, then
the Corporation will reimburse Employee for the actual cost to
Employee of a comparable individual medical or dental insurance
policy obtained by Employee.
(iv) Reimbursements to the Employee
pursuant to the provisions of this paragraph 4(d) will be available
only to the extent that (a) such expense is actually incurred
for any particular calendar year and reasonably substantiated;
(b) reimbursement shall be made no later than the end of the
calendar year following the yea
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