AMENDED AND RESTATED EXECUTIVE
EMPLOYMENT AGREEMENT
THIS AMENDED AND
RESTATED EXECUTIVE EMPLOYMENT AGREEMENT (this
“AGREEMENT”) is made and entered into as of August 17,
2009 (the “EFFECTIVE DATE”) by and among Thermadyne
Holdings Corporation, a Delaware corporation
(“HOLDINGS”), the subsidiaries of Holdings (together
with Holdings, “EMPLOYER”) and Paul D. Melnuk
(“EMPLOYEE”).
A. Employer
and Employee entered into an Executive Employment Agreement, dated
January 28, 2004 and amended on December 31, 2008,
pursuant to which Employer agreed to employ Employee as President
and Chief Executive Officer of Employer and Employee agreed to be
employed by Employer in such capacity (the “ORIGINAL
AGREEMENT”).
B. The
parties wish to amend and restate the Original Agreement on the
terms and conditions set forth in this Agreement.
NOW THEREFORE, for
and in consideration of the foregoing recitals, and in
consideration of the mutual covenants, agreements, understandings,
undertakings, representations, warranties and promises hereinafter
set forth, and intending to be legally bound thereby, Employer and
Employee do hereby covenant and agree as follows:
SECTION 1.
BASIC EMPLOYMENT PROVISIONS.
(a)
EMPLOYMENT AND TERM. Employer hereby employs Employee (hereinafter
referred to as the “EMPLOYMENT”) as Executive Chairman
of Employer and Employee agrees to be employed by Employer in such
capacity, all on the terms and conditions set forth herein. The
Employment shall be for a period (the “EMPLOYMENT
PERIOD”) that will commence on the Effective Date and
continue for two (2) years thereafter (unless the Employment
is earlier terminated as provided herein). For the purposes of this
Agreement, Holdings’ subsidiaries, as the case may be, shall
be the “Employer” only for tax, legal reporting,
payroll processing and similar purposes.
(b)
DUTIES. During the Employment Period, Employee shall serve as an
executive employee of Employer, and shall carry out the duties
described in Annex 1 (Position Description—Chairman of the
Board). Such duties may be revised from time to time at the written
agreement of Employee and the Board of Directors (the
“BOARD”). Employee agrees to devote such time and
attention to the business and affairs of Employer as is necessary
to discharge his duties and responsibilities provided
herein.
(c)
ELECTION AS CHAIR. Employer shall request that the Board elect
Employee to serve as Chairman of the Board during the Employment
Period, and if so elected Employer shall have the duties associated
with such role, as provided in the Bylaws of Employer or as
otherwise determined by the Board. Employee acknowledges
that the
members of the Board will determine whether to act in accordance
with such request, in their own judgment in the exercise of their
fiduciary duties, and agrees that the failure to elect Employee to
or to retain Employee in such office shall not be a breach of this
Agreement, so long as Employer complies with the other terms
hereof.
(a)
SALARY. Employer shall pay to Employee during the Employment Period
a salary as basic compensation for the services to be rendered by
Employee hereunder (“BASIC COMPENSATION”). The Basic
Compensation shall be $30,000 per month. Such salary shall accrue
and be payable in accordance with Employer’s payroll
practices in effect from time to time.
(b)
BONUS. At the Board’s sole discretion, Employee may be paid a
yearly bonus, in an amount (if any) and form (either cash, equity
or otherwise) as determined by the Board.
(c)
PARTICIPATION IN BENEFITS. During the Employment Period, Employee
shall be entitled to participate in such employee benefit plans,
programs and arrangements made generally available to, and on the
same terms as, full-time executive employees of Employer,
including, without limitation, four (4) weeks paid vacation
annually, 401(k) plans, excess savings plans, tax qualified profit
sharing plans and any other retirement plans, health, group life
(with optional additional coverage), short term disability, long
term disability (not to exceed sixty-percent (60%) of
Employee’s Basic Compensation otherwise payable to him for
the applicable period), hospitalization and such other benefit
programs as may be approved from time to time by Employer for its
full-time employees. Nothing herein shall affect Employer’
right to amend, modify or terminate any retirement or other benefit
plan at any time on a company-wide basis for similarly situated
employees.
(d)
STOCK OPTIONS AND GRANTS. Subject to Section 4 below,
Employee’s outstanding stock option awards to purchase shares
of Employer’s stock (the “OPTIONS”) and stock
grants shall continue to vest during the Employment Period and
shall otherwise operate in accordance with their existing
terms.
(e)
WITHHOLDING TAXES. The compensation and benefits to be provided to
Employee pursuant to this Agreement shall all be subject to
withholding and deductions for applicable federal, state and local
taxes and other items, if any, authorized or required by law to be
withheld.
(a)
DEATH OR DISABILITY. Employment of Employee under this Agreement
shall terminate automatically upon the death or total disability of
Employee. For the purpose of this Agreement, a “TOTAL
DISABILITY” shall be deemed to have occurred if Employee
shall have been unable to perform the duties of his Employment due
to mental or physical incapacity for a period of six
(6) consecutive months.
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(b)
CAUSE. The Board may terminate the Employment of Employee under
this Agreement for Cause. For the purposes of this Agreement,
“CAUSE” shall be deemed to be: (i) the conviction
of a crime by Employee constituting a felony or other crime
involving moral turpitude; (ii) an act of dishonesty by
Employee that resulted in or was intended to result in gain to or
personal enrichment of Employee at Employer’s expense;
(iii) the willful engaging by Employee in misconduct which is
injurious to Employer; (iv) Employee’s failure to comply with
the material terms of this Agreement, which is not remedied by
Employee within thirty (30) days after receipt of written
notice thereof given by Employer; (v) failure by Employee to
comply fully with any lawful directives of the Board or Employer,
which is not remedied by Employee within thirty (30) days
after receipt of written notice thereof given by Employer or the
Board; (vi) misappropriation by Employee of Employer’s
funds; (vii) habitual abuse of alcohol, narcotics or other
controlled substances by Employee; (viii) gross negligence in
the performance of Employee’s duties and responsibilities
hereunder, or (ix) failure to perform or adhere to the Code of
Ethics adopted by the Board, as the same may be amended by the
Board from time to time, a copy of which has been delivered to
Employee as adopted by the Board as of the date hereof.
(c)
WITHOUT CAUSE. Employer may terminate the Employment of Employee
under this Agreement without Cause.
(d)
CONSTRUCTIVE TERMINATION. Employee may elect to terminate his
Employment under this Agreement upon a Constructive Termination
Without Cause (as defined below) by providing Employer written
notice within thirty (30) days of Employee becoming aware of
such Constructive Termination Without Cause. Failure to provide
such notice within thirty (30) days shall constitute a waiver
of Employee’s rights under this Section 3(d). For
purposes of this Agreement, “CONSTRUCTIVE TERMINATION WITHOUT
CAUSE” shall mean a termination of Employee’s
employment at his initiative following the occurrence, without
Employee’s prior written consent, of one or more of the
following events:
(i)
any failure by Employer to comply with any of the material
provisions of this Agreement which is not remedied by Employer
within thirty (30) days after receipt of written notice
thereof given by Employee;
(ii)
any purported termination by Employer of Employee’s
employment otherwise than as expressly permitted by Section 3(a) or
(b) of this Agreement;
(iii)
any failure by Employer to comply with and satisfy the provisions
of Section 6 hereof, or failure by any successor (whether
direct or indirect, by purchase, merger, consolidation or
otherwise) to all or substantially all of the business and/or
assets of Employer to assume expressly and agree to perform this
Agreement in the same manner and to the same extent Employer would
be required to perform it if no such succession had taken place;
provided that the successor contemplated by Section 6 hereof
has received, at least ten (10) days prior to the giving of
notice of constructive termination by Employee, written notice from
Employer or Employee of the requirements of the provisions of
Section 6 or of such failure;
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(iv)
at any time during the Employment Period, the Board (a) fails
to elect Employee to serve as Chairman of the Board or
(b) reassigns Employee to a position other than as Chairman of
the Board; or
(v)
a material reduction in Employee’s duties and
responsibilities.
SECTION 4.
COMPENSATION FOLLOWING TERMINATION OR EXPIRATION.
(a)
DEATH OR DISABILITY. If the Employment Period is terminated
pursuant to Section 3(a) above due to the death or Total Disability
of Employee, this Agreement shall terminate, and no further
compensation shall be payable to Employee’s estate, heirs or
beneficiaries, as applicable, except that Employee or
Employee’s estate, heirs or beneficiaries, as applicable,
shall be entitled to receive (i) Employee’s then current
Basic Compensation until the second anniversary of the Effective
Date; provided that, at Employee’s option, to be exercised by
Employee or his estate or representative, as the case may be,
Employee shall be entitled to receive the present value of the
aggregate amount (at a 12% discount) of such payments in a lump sum
within thirty (30) days after termination of the Employment Period,
(ii) any unreimbursed expenses pursuant to Section 5
below, and (iii) in the event of termination due to Total
Disability, until the second anniversary of the Effective Date,
medical and dental insurance coverage and benefits to which
Employee would otherwise be entitled during the Employment Period
pursuant to Section 2(c) above; provided that Employee shall
continue to make the same contributions toward such coverage as
Employee was making on the date of termination, with such
adjustments to such contributions as are made generally for all
Employer’s full-time executive employees; further provided
that in such event Employee shall no longer be entitled to
participate in any of Employer’s 401(k) plans, excess savings
plans, tax qualified profit sharing plans or any other retirement
plans. Thereafter Employer shall have no further obligations or
liabilities hereunder to Employee or Employee’s estate or
legal representative or otherwise, as the case may be. If the
Employment Period is terminated pursuant to Section 3(a) above due
to the death or Total Disability of Employee, any Options held by
Employee that have vested as of the date of termination shall
remain exercisable for a period of six (6) months following
such date of termination (or, if earlier, until the expiration of
the term of such Options), whereupon such Options shall
terminate.
(b)
TERMINATION FOR CAUSE OR VOLUNTARY TERMINATION. If the Employment
Period is terminated for Cause or voluntarily by Employee for
reasons other than those described in Sections 3(a) or 3(d) above,
this Agreement shall terminate and no further compensation or
benefits shall be paid to Employee after the date of termination,
but Employee shall be entitled to receive benefits to which he is
or may become entitled pursuant to any benefit plan which by its
terms survive termination. If the Employment Period is terminated
(i) for Cause, all Options held by Employee, whether vested or
unvested, shall terminate immediately upon the date of termination
or (ii) voluntarily by Employee for reasons other than those
described in Sections 3(a) or 3(d) above, all Options held by
Employee that have vested as of the date of termination shall
remain exercisable for a period of ninety (90) days following
such date of termination (or, if earlier, until the expiration of
the term of such Options), whereupon such Options shall
terminate.
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(c)
TERMINATION WITHOUT CAUSE; CONSTRUCTIVE TERMINATION. If the
Employment Period is terminated pursuant to Sections 3(c) or 3(d)
above, this Agreement shall terminate and Employee shall be
entitled (i) to continue to receive from Employer his then
current Basic Compensation, such amount to continue to be paid in
accordance with the payroll practices of Employer until the second
anniversary of the Effective Date; provided that, at
Employee’s option, Employee shall be entitled to receive the
present value of the aggregate amount (at a 12% discount) of such
payments in a lump sum within thirty (30) days after termination of
the Employment Period, (ii) any unreimbursed expenses pursuant
to Section 5 below, and (iii) until the second
anniversary of the Effective Date, to continue to receive the
benefits to which he would otherwise be entitled during the
Employment Period pursuant to Section 2(c) above; provided that
Employee shall continue to make the same contributions toward such
coverage as Employee was making on the date of termination, with
such adjustments to contributions as are made generally for all
Employer’s full-time executive employees; further provided
that in such event Employee shall no longer be entitled to
participate in any of Employer’s 401(k) plans, excess savings
plans, tax qualified profit sharing plans or any other retirement
plans. If the Employment Period is terminated pursuant to Sections
3(c) or 3(d) above, (i) any Options held by Employee that have
vested as of the date of termination shall remain exercisable for a
period expiring on the earlier of ninety (90) days following
the second anniversary of the Effective Date or one (1) year
following such date of termination (or, if earlier, until the
expiration of the term of such Options), whereupon such Options
shall terminate and (ii) any Options held by Employee that
have not vested as of the date of termination shall continue to
vest until the second anniversary of the Effective Date, and upon
such vesting, shall remain exercisable for a period of ninety
(90) days thereafter, provided that, in the event Employee
fails to comply with Section 7 through Section 11 of this
Agreement, Employee shall immediately forfeit all outstanding
Options, whether vested or unvested. In the event of
Employee’s death during the period in which he is entitled to
continued payment of his Basic Compensation under this
Section 4(c), such Basic Compensation shall be continue to be
payable to Employee’s estate, heirs or beneficiaries, as
applicable, for the period described above, but any other
compensation or benefits payable to Employee shall immediately
cease upon Employee’s death. The sums received by Employee
under this Section 4(c) shall be considered liquidated damages in
respect of claims based on any provisions of this Agreement or any
claims arising out of Employee’s employment with Employer,
and the commencement of the payment of such sums by Employer shall
not begin until Employee executes and delivers a general release of
all claims in form and substance satisfactory to
Employer.
(d)
EXPIRATION OF THE AGREEMENT. If this Agreement expires pursuant to
the provisi
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