Exhibit 10.1 Form of Employment / Severance
Agreement
Between the Company and certain executive
officers
Form I
CRANE CO.
EMPLOYMENT/SEVERANCE AGREEMENT
(Revised 3/95)
AGREEMENT by and between CRANE CO.,
a Delaware corporation (the “Company”), and [Name] (the
“Employee”), dated as of the
day of
, 2006.
The Board of Directors of the
Company (the “Board”), on the advice of its
Organization and Compensation Committee, has determined that it is
in the best interests of the Company and its shareholders to assure
that the Company will have the continued dedication of the
Employee, notwithstanding the possibility, threat, or occurrence of
a Change of Control (as defined below) of the Company. The Board
believes it is imperative to diminish the inevitable distraction of
the Employee by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control, to encourage
the Employee’s full attention and dedication to the Company
currently and in the event of any threatened or pending Change of
Control, and to provide the Employee with compensation arrangements
upon a Change of Control which provide the Employee with individual
financial security and which are competitive with those of other
corporations and, in order to accomplish these objectives, the
Board has caused the Company to enter into this
Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED
AS FOLLOWS:
l. Certain Definitions
.
(a) The “Effective Date”
shall be the first date during the “Change of Control
Period” (as defined in Section l(b)) on which a Change of
Control occurs. Anything in this Agreement to the contrary
notwithstanding, if the Employee’s employment with the
Company is terminated prior to the date on which a Change of
Control occurs, and it is reasonably demonstrated that such
termination (l) was at the request of a third party who has
taken steps reasonably calculated to effect a Change of Control or
(2) otherwise arose in connection with or anticipation of a
Change of Control, then for all purposes of this Agreement the
“Effective Date” shall mean the date immediately prior
to the date of such termination.
(b) The “Change of Control
Period” is the period commencing on the date hereof and
ending on the earlier to occur of (i) the third anniversary of
such date or (ii) the first day of the month next following
the Employee’s normal retirement date (“Normal
Retirement Date”) under Crane Co.’s Pension Plan for
Non Bargaining Employees effective January 1, 1985 or
under that retirement plan of a subsidiary of the Company in which
the Employee is a participant, or any successor retirement plan
(the “Retirement Plan”); provided ,
however , that commencing on the date one year after the
date hereof, and on each annual anniversary of such date (such date
and each annual anniversary thereof is hereinafter referred to as
the “Renewal
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Date”), the Change of Control Period shall
be automatically extended so as to terminate on the earlier of
(x) three years from such Renewal Date or (y) the first
day of the month coinciding with or next following the
Employee’s Normal Retirement Date, unless at least 60 days
prior to the Renewal Date the Company shall give notice that the
Change of Control Period shall not be so extended.
2. Change of Control . For
the purpose of this Agreement, a “Change of Control”
shall mean:
(i) The acquisition, other than from
the Company, by any individual, entity or group (within the meaning
of Section 13(d)(3) or 14(d)(2) of the Securities Exchange Act
of 1934, as amended (the “Exchange Act”)) of beneficial
ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 20% or more of either the then outstanding shares
of common stock of the Company or the combined voting power of the
then outstanding voting securities of the Company entitled to vote
generally in the election of directors, but excluding, for this
purpose, any such acquisition by the Company or any of its
subsidiaries, or any employee benefit plan (or related trust) of
the Company or its subsidiaries, or the Crane Fund, a charitable
trust under the laws of the State of Illinois, or any corporation
with respect to which, following such acquisition, more than 50%
of, respectively, the then outstanding shares of common stock of
such corporation and the combined voting power of the then
outstanding voting securities of such corporation entitled to vote
generally in the election of directors is then beneficially owned,
directly or indirectly, by substantially the same individuals and
entities who were the beneficial owners, respectively, of the
common stock and voting securities of the Company immediately prior
to such acquisition in substantially the same proportion as their
ownership, immediately prior to such acquisition, of the then
outstanding shares of common stock of the Company or the combined
voting power of the then outstanding voting securities of the
Company entitled to vote generally in the election of directors, as
the case may be; or
(ii) Individuals who, as of the date
hereof, constitute the Board (as of the date hereof the
“Incumbent Board”) cease for any reason to constitute
at least a majority of the Board, provided that any individual
becoming a director subsequent to the date hereof whose election,
or nomination for election by the Company’s shareholders, was
approved by a vote of at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board, but excluding, for
this purpose, any such individual whose initial assumption of
office is in connection with an actual or threatened election
contest relating to the election of the Directors of the Company
(as such terms are used in Rule 14a-11 of Regulation 14A
promulgated under the Exchange Act); or
(iii) Approval by the stockholders
of the Company of a reorganization, merger or consolidation, in
each case, with respect to which substantially the same individuals
and entities who were the respective beneficial owners of the
common stock and voting securities of the Company immediately prior
to such reorganization, merger or consolidation do not,
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following such reorganization, merger or
consolidation, beneficially own, directly or indirectly, more than
50% of, respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting
securities entitled to vote generally in the election of directors,
as the case may be, of the corporation resulting from such
reorganization, merger or consolidation, or a complete liquidation
or dissolution of the Company or of the sale or other disposition
of all or substantially all of the assets of the
Company.
3. Employment Period . The
Company hereby agrees to continue the Employee in its employ, and
the Employee hereby agrees to remain in the employ of the Company,
for the period commencing on the Effective Date and ending on the
earlier to occur of (a) the third anniversary of such date or
(b) the first day of the month coinciding with or next
following the Employee’s Normal Retirement Date (the
“Employment Period”).
4. Terms of Employment
.
(a) Position and Duties
.
(i) During the Employment Period,
(A) the Employee’s position (including status, offices,
titles and reporting requirements) authority duties and
responsibilities shall be at least commensurate in all material
respects with those held, exercised and assigned at any time during
the 90-day period immediately preceding the Effective Date and
(B) the Employee’s services shall be performed at the
location where the Employee was employed immediately preceding the
Effective Date or any office or location less than thirty-five
(35) miles from such location.
(ii) During the Employment Period,
and excluding any periods of vacation and sick leave to which the
Employee is entitled, the Employee agrees to devote reasonable
attention and time during normal business hours to the business and
affairs of the Company and, to the extent necessary to discharge
the responsibilities assigned to the Employee hereunder, to use the
Employee’s reasonable best efforts to perform faithfully and
efficiently such responsibilities. It is expressly understood and
agreed that to the extent that any outside activities have been
conducted by the Employee prior to the Effective Date, the
continued conduct of such activities (or the conduct of activities
similar in nature and scope thereto) subsequent to the Effective
Date shall not thereafter be deemed to interfere with the
performance of the Employee’s responsibilities to the
Company.
(b) Compensation .
(i) Base Salary . During the
Employment Period, the Employee shall receive an annual base salary
(“Base Salary”) at a rate at least equal to twelve
times the highest monthly base salary paid or payable to the
Employee by the Company during the twelve-month period immediately
preceding the month in which the Effective Date occurs.
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During the Employment Period, the Base Salary
shall be reviewed at least annually and shall be increased at any
time and from time to time as shall be substantially consistent
with increases in base salary awarded in the ordinary course of
business to other key employees of the Company and its
subsidiaries. Any increase in Base Salary shall not serve to limit
or reduce any other obligation to the Employee under this
Agreement. Base Salary shall not be reduced after any such
increase.
(ii) Annual Bonus . In
addition to Base Salary, the Employee shall be eligible (but not
entitled) to receive, for each fiscal year during the Employment
Period, an annual bonus (an “Annual Bonus”) (either
pursuant to any incentive compensation plan maintained by the
Company or otherwise) in cash on the same basis as in the fiscal
year immediately preceding the fiscal year in which the Effective
Date occurs or, if more favorable to the Employee, on the same
basis as awarded at any time thereafter to other key employees of
the Company and its subsidiaries.
(iii) Incentive, Savings and
Retirement Plans . In addition to Base Salary and Annual Bonus
payable as hereinabove provided, the Employee shall be entitled to
participate during the Employment Period in all incentive, savings
and retirement plans, practices, policies and programs applicable
to other key employees of the Company and its
subsidiaries.
Such plans, practices, policies and
programs, in the aggregate, shall provide the Employee with
compensation, benefits and reward opportunities at least as
favorable in the aggregate as the most favorable of such
compensation, benefits and reward opportunities provided by the
Company for the Employee under such plans, practices, policies and
programs as in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to
the Employee, as provided at any time thereafter with respect to
other key employees of the Company and its subsidiaries.
(iv) Welfare Benefit Plans .
During the Employment Period, the Employee and/or the
Employee’s family, as the case may be, shall be eligible for
participation in and shall receive all benefits under welfare
benefit plans, practices, policies and programs provided by the
Company and its subsidiaries (including, without limitation,
medical, prescription, dental, disability, salary continuance,
employee life, group life, accidental death and travel accident
insurance plans and programs), at least as favorable as the most
favorable of such plans, practices, policies and programs in effect
at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Employee and/or the
Employee’s family, as in effect at any time thereafter with
respect to other key employees of the Company and its
subsidiaries.
(v) Expenses . During the
Employment Period, the Employee shall be entitled to receive prompt
reimbursement for all reasonable expenses incurred by
the
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Employee in accordance with the most favorable
policies, practices and procedures of the Company and its
subsidiaries in effect at any time during the 90-day period
immediately preceding the Effective Date or, if more favorable to
the Employee, as in effect at any time thereafter with respect to
other key employees of the Company and its subsidiaries.
(vi) Fringe Benefits . During
the Employment Period, the Employee shall be entitled to fringe
benefits, including use of an automobile and payment of related
expenses, in accordance with the most favorable plans, practices,
programs and policies of the Company and its subsidiaries in effect
at any time during the 90-day period immediately preceding the
Effective Date or, if more favorable to the Employee, as in effect
at any time thereafter with respect to other key employees of the
Company and its subsidiaries.
(vii) Office and Support
Staff . During the Employment Period, the Employee shall be
entitled to an office or offices of a size and with furnishings and
other appointments, and to secretarial and other assistance, at
least equal to the most favorable of the foregoing provided to the
Employee by the Company and its subsidiaries at any time during the
90-day period immediately preceding the Effective Date or, if more
favorable to the Employee, as provided at any time thereafter with
respect to other key employees of the Company and its
subsidiaries.
(viii) Vacation . During the
Employment Period, the Employee shall be entitled to paid vacation
in accordance with the most favorable plans, policies, programs and
practices of the Company and its subsidiaries as in effect at any
time during the 90-day period immediately preceding the Effective
Date or, if more favorable to the Employee, as in effect at any
time thereafter with respect to other key employees of the Company
and its subsidiaries.
5. Termination .
(a) Death or Disability .
This Agreement shall terminate automatically upon the
Employee’s death. If the Company determines in good faith
that the Disability of the Employee has occurred (pursuant to the
definition of “Disability” set forth below), it may
give to the Employee written notice (given in accordance with
Section 12(b) hereof) of its intention to terminate the
Employee’s employment. In such event, the Employee’s
employment with the Company shall terminate effective on the 30th
day after receipt of such notice by the Employee (the
“Disability Effective Date”), provided that, within the
30 days after such receipt, the Employee shall not have returned to
full-time performance of the Employee’s duties. For purposes
of this Agreement, “Disability” means disability which,
at least 26 weeks after its commencement, is determined to be total
and permanent by a physician selected by the Company or its
insurers and acceptable to the Employee or the Employee’s
legal representative (such agreement as to acceptability not to be
withheld unreasonably).
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(b) Cause . The Company may
terminate the Employee’s employment for “Cause.”
For purposes of this Agreement, “Cause” shall
constitute either (i) personal dishonesty or breach of
fiduciary duty involving personal profit at the expense of the
Company; (ii) repeated violations by the Employee of the
Employee’s obligations under Section 4(a) of this
Agreement which are demonstrably willful and deliberate on the
Employee’s part and which are not remedied in a reasonable
period of time after receipt of written notice from the Company;
(iii) the commission of a criminal act related to the
performance of duties, or the furnishing of proprietary
confidential information about the Company to a competitor, or
potential competitor, or third party whose interests are adverse to
those of the Company; (iv) habitual intoxication by alcohol or
drugs during work hours; or (v) conviction of a
felony.
(c) Good Reason . The
Employee’s employment may be terminated by the Employee for
Good Reason. For purposes of this Agreement, “Good
Reason” means:
(i) the assignment to the Employee
of any duties inconsistent in any respect with the Employee’s
position (including status, offices, titles and reporting
requirements), authority, duties or responsibilities as
contemplated by Section 4(a) of this Agreement, or any other
action by the Company which results in a diminution in such
position, authority, duties or responsibilities, 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 Employee;
(ii) any failure by the Company to
comply with any of the provisions of Section 4(b) of this
Agreement, 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
Employee;
(iii) the Company’s
requ
