THIRD AMENDED AND RESTATED
EXECUTIVE EMPLOYMENT AGREEMENT
THIS THIRD 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 Terry Downes
(“EMPLOYEE”).
A. Holdings
and Employee entered into a Second Amended and Restated Executive
Employment Agreement, dated January 1, 2004 and amended on
December 31, 2008, pursuant to which Holdings agreed to employ
Employee as Vice President — Global Corporate Development and
Employee agreed to be employed by Holdings 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 Vice President
— Chief Operating Officer 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
that will (i) commence on the Effective Date and continue for
one (1) year thereafter (unless the Employment is earlier
terminated as provided herein) (the “INITIAL EMPLOYMENT
PERIOD”) and (ii) renew on the first anniversary of the
Effective Date and each anniversary thereafter for a one-year
period (any such additional period, a “RENEWAL
PERIOD”), on the same terms and conditions contained herein
(unless earlier terminated as provided herein or either party
provides the other party written notice not less than ninety
(90) days in advance of the applicable anniversary of the
Effective Date in order to avoid renewal of the Employment on such
anniversary. The Initial Employment Period and any Renewal Periods,
if any, together shall constitute the “EMPLOYMENT
PERIOD” for purposes of this Agreement. 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.
As Executive Vice President — Chief Operating Officer,
Employee shall report directly to the President of Employer (the
“PRESIDENT”) and shall perform such duties as are
customary for such position as the President may from time to time
reasonably direct. Employee shall devote all of his full business
time and attention to the business and affairs of Employer as is
reasonably necessary to discharge his responsibilities hereunder.
Employee agrees to perform faithfully the duties assigned to him to
the best of his ability and shall comply with the
employment
policies of Employer. In the performance of his duties hereunder,
Employee shall at all times report and be subject to the lawful
direction of the President and perform his duties hereunder subject
to and in accordance with the directives of the President and the
by-laws of Employer and applicable law. During the Employment
Period, Employee shall not become an employee of any person or
entity other than Employer. This Section 1(b) shall not be
construed to prohibit Employee from serving on the board of
directors of one or more other entities (with the prior consent of
the Board of Directors of Employer (the
“BOARD”).
(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 $340,000 per annum. Such salary shall accrue
and be payable in accordance with Employer’s payroll
practices in effect from time to time.
(b) ANNUAL
INCENTIVE COMPENSATION. During the Employment Period, Employee
shall be eligible for an annual incentive bonus opportunity at a
target of 50% of Employee’s Basic Compensation as in effect
on January 1 of such year (up to a maximum opportunity of 100% of
Basic Compensation). The actual amount of any such bonus shall be
determined by and in accordance with the terms of Employer’s
Annual Incentive Plan as in effect from time to time.
(c) BONUS
AWARD. Employee shall receive a bonus award with a grant value of
$75,000, consisting of (i) performance-based restricted stock
in the amount of $37,500 (valued based on the closing price of
Employer’s stock on the Effective Date) pursuant to the terms
of Employer’s Amended and Restated 2004 Stock Incentive Plan
(the “2004 PLAN”) and (ii) performance cash in the
amount of $37,500. Additionally, such award shall (a) be
subject to, and shall vest upon the achievement of, the performance
criteria established by the Compensation Committee of the Board
over a measurement period beginning January 1, 2010 and ending
December 31, 2012 and (b) vest, if it vests at all, upon
the approval by the Board of the audited financial statements for
Employer and its subsidiaries for the fiscal year ended
December 31, 2012.
(d) LONG TERM
INCENTIVE AWARDS. During the Employment Period, Employee shall be
entitled to receive annual long-term incentive awards on terms
consistent with Employee’s position and other similarly
situated executives of Employer.
(e) PARTICIPATION
IN BENEFIT PLANS. 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’s right to amend, modify or
terminate any retirement or other benefit plan at any time on a
company-wide basis for similarly situated employees.
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(f) CAR
ALLOWANCE. During the Employment Period, Employee shall be entitled
to receive an annual car allowance of $500 per month (the
“CAR ALLOWANCE”), which shall be administered in
accordance with Employer’s then-current policy for similarly
situated executives. The right to receive a Car Allowance shall
cease upon the termination or expiration of the Employment Period
for any reason whatsoever.
(g) OUTSTANDING
LONG-TERM INCENTIVE AWARDS. Employee’s outstanding stock
option awards to purchase shares of Employer’s stock (the
“OPTIONS”) and restricted stock awards and other awards
granted to Employee by Employer under the 2004 Plan or any
successor plan thereto shall, both during and upon the termination
or expiration of the Employment Period, operate in accordance with
the terms of Employee’s applicable award agreement(s),
including, without limitation, with respect to vesting and
exercisability rights. Notwithstanding the foregoing, in the event
Employee violates any of the provisions of Section 7 through
Section 11 following the termination or expiration of his
Employment, Employee shall immediately forfeit all options and
similar awards which may have been exercisable following
termination or expiration of employment with Employer.
(h) 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.
(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 or
disloyalty 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.
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(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:
(1) 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;
(2) without
Employee’s consent, any reduction in Basic Compensation,
bonus percentage, or material reduction in duties, unless a similar
reduction in basic compensation or bonus percentage is made with
respect to similarly situated executives of Employer;
(3) any
purported termination by Employer of Employee’s employment
otherwise than as expressly permitted by Section 3(a) or
(b) of this Agreement; or
(4) 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.
(e) FAILURE
TO MAINTAIN RESIDENCE. Employee shall be required to maintain his
primary personal residence within fifty (50) miles of the
location of Employer’s corporate headquarters during the
Employment Period. If Employee fails to maintain such required
residence, unless the location of his residence is otherwise
approved by the Board, (i) Employee shall be deemed to have
voluntarily resigned his Employment, whereupon Employee’s
Employment shall automatically terminate and
(ii) Employee’s rights to compensation, benefits or
other payments following such termination of Employment shall be
strictly limited to those provided in Section 4(b)
below.
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 through the end of the pay period in which
Employee’s death or Total Disability occurred, (ii) a
pro rata portion (based on a fraction the numerator of which is the
number of days Employee worked in the year of Employee’s
death or Total Disability and denominator of which is 365) of the
bonus set forth in Section 2(b)
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which Employee
would have been entitled to receive for the year in which
termination occurs if the performance objectives established in
Employer’s Annual Incentive Plan are achieved, (iii) any
unreimbursed expenses pursuant to Section 5 below, and
(iv) in the event of termination due to Total Disability,
during the two (2) year period following such date of
termination, medical and dental insurance coverage and benefits to
which Employee would otherwise be entitled during the Employment
Period pursuant to Section 2(e) 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. 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.
(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.
(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 Employer’s payroll practices until the first
anniversary of the date of termination, (ii) to receive a pro
rata portion (based on a fraction the numerator of which is the
number of days Employee worked in the year of termination and
denominator of which is 365) of the bonus set forth in Section 2(b)
which Employee would have been entitled to receive for the year in
which termination occurs if the performance objectives established
in Employer’s Annual Incentive Plan are achieved, and
(iii) until the first anniversary of the date of termination,
to continue to receive the benefits to which he would otherwise be
entitled during the Employment Period pursuant to Section 2(e)
above; provided that Employee shall continue to make the same
contributions toward such coverage as Employee was
making
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