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EXHIBIT 99.1
TRANSITION AND RETIREMENT AGREEMENT
THIS AGREEMENT, dated as of February 25, 2005, is between IDEX
CORPORATION, a Delaware corporation with
its executive offices at 630 Dundee
Road, Suite 400, Northbrook, Illinois 60062
(the "Corporation"), and DENNIS K.
WILLIAMS (the "Executive").
RECITALS:
A. The Executive is currently employed as the Chairman of the
Board, President and Chief Executive
Officer of the Corporation pursuant to an
Employment Agreement dated April 14, 2000
(the "Employment Agreement").
B. The original term of the Employment Agreement expires on
April 30, 2005 and Executive has indicated
his desire to resign from his
position as President and Chief Executive
Officer effective as of March 22,
2005, and to retire as Chairman of the
Board effective as of the later of March
31, 2006 or the date of the Corporation's
annual meeting of shareholders in
2006.
C. The Corporation desires that the Executive assist in the
orderly transition of leadership and
management of the Corporation and the
Executive is willing to remain in an
executive Chairman capacity in order to
effect such transition.
D. The Corporation desires to receive from the Executive a
lengthening of the period during which the
Executive will not compete with the
business of the Corporation from two years
to a five-year period.
E. The Corporation and the Executive desire to enter into this
Agreement to set forth the terms of
Executive's continued employment and
retirement from the Corporation.
NOW, THEREFORE, in consideration of the promises and of the
covenants contained in this Agreement, the
Corporation and the Executive agree
as follows:
1. DEFINITIONS. The following definitions apply for purposes
of this Agreement.
(a) "Board of Directors" or "Board" means the Board of
Directors of the Corporation.
(b) "Cause" means a finding by the Board of Directors that any
of the following conditions exist:
(i) The Executive's willful and continued failure
substantially to perform his material duties under this
Agreement (other than as a result of his disability) if such
failure is not substantially cured within 15 days after
written notice is provided to the Executive.
(ii) The Executive's willful breach in a substantive
and material manner of his fiduciary duty or duty of loyalty
to the Corporation which is injurious to the financial
condition in more than a de minimus manner or the business
reputation of the Corporation.
(iii) The Executive's indictment for a felony offense
under the laws of the United States or any state thereof
(other than for a violation of motor or vehicular laws).
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(iv) A material breach by the Executive of any
restrictive covenant contained in Sections 11 and 12 of this
Agreement.
For purposes of this definition, no act or
failure to act will be deemed
"willful" unless effected by the Executive
not in good faith and without a
reasonable belief that his action or
failure to act was in or not opposed to the
Corporation's best interests.
(c) "Code" means the Internal Revenue Code of 1986, as
amended.
(d) "Corporation" means IDEX Corporation.
(e) "Effective Date" means March 22, 2005.
(f) "Fringe Benefits" means (i) medical, health and life
insurance, and (ii) other miscellaneous
fringe benefits (including, but not
limited to, the personal accident plan at
the level in effect on the date of
termination, and the use of the Corporation
provided automobile or auto use
allowance).
(g) "Retirement Date" means the later of March 31, 2006 or the
date of the Corporation's annual meeting of
shareholders in 2006.
2. EMPLOYMENT; DUTIES. Subject to the terms and conditions set
forth in this Agreement, the Corporation
hereby agrees to continue to employ the
Executive, and the Executive hereby agrees
to continue employment as Chairman of
the Board on and after the Effective Date
through and until his Retirement Date.
Subject to the terms and conditions set
forth in this Agreement, as of the
Effective Date, the Executive will resign
his position as President and Chief
Executive Officer of the Corporation. The
Executive will perform those duties
and discharge those responsibilities as are
commensurate with his position, and
as the Board of Directors may from time to
time reasonably direct, commensurate
with his position. In connection with the
performance of those duties, the
Corporation acknowledges that Executive may
perform those duties at locations
other than the Corporation's executive
office and it will not ordinarily require
the Executive to be present in the
Corporation's executive office more than six
days per month. The Executive agrees to
perform his duties and discharge his
responsibilities in a faithful manner and
to the best of his ability and to use
all reasonable efforts to promote the
interests of the Corporation. The
Executive may not accept other gainful
employment except with the prior consent
of the Board of Directors. With the prior
consent of the Board of Directors,
which will not be unreasonably withheld,
the Executive may become a director,
trustee or other fiduciary of other
corporations, trusts or entities.
Notwithstanding the foregoing, the
Executive may manage his passive investments
and be involved in charitable, civic and
religious interests so long as they do
not materially interfere with the
performance of the Executive's duties
hereunder.
3. COMPENSATION.
(a) From the Effective Date through April 27, 2005, the
Executive will receive $31,153.85 in each
bi-weekly payroll payment.
(b) Executive will receive $109,090.91 in each bi-weekly
payroll payment commencing with the May 11,
2005 payment and ending with payment
made on or prior to the earliest to occur
of (i) March 1, 2006, (ii) his
termination by the Corporation for Cause or
(iii) his voluntary resignation.
These payments will not be considered
"compensation" for purposes of the
Corporation's Supplemental Executive
Retirement Plan and, to the extent these
payments increase the Executive's accrued
benefit under the Corporation's
Retirement Plan, such increased accrued
benefit will be an offset to the
Executive's benefit under the Corporation's
Supplemental Executive Retirement
Plan.
(c) Executive will not be entitled to participate in any
bonus, long-term or short-term equity or
cash incentive compensation programs of
the Corporation in 2005 or 2006.
(d) The Corporation will deduct or withhold from all salary
and from all other payments made to the
Executive pursuant to this Agreement,
all amounts that may be required to be
deducted or withheld under any applicable
Social Security contribution, income tax
withholding or other similar law now in
effect or that may become effective during
the term of this Agreement.
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4. OTHER BENEFITS AND TERMS. Except as otherwise provided,
during the term of Executive's employment
through the Retirement Date, the
Executive will be entitled to the following
other benefits and terms:
(a) The Executive will be entitled to participate in the
Corporation's health and medical benefit
plans, any pension, profit sharing and
retirement plans, and any insurance
policies or programs from time to time
generally offered to all or substantially
all executive employees who are
employed by the Corporation. These plans,
policies and programs are subject to
change at the sole discretion of the
Corporation. Notwithstanding the foregoing,
life insurance benefits will be provided at
an amount not less than one times
base salary.
(b) The Executive will be entitled to any other fringe benefit
from time to time generally offered to all
or substantially all senior executive
employees who are employed by the
Corporation.
(c) The Corporation will provide the Executive with the use of
an automobile or an auto use allowance that
is commensurate with his position.
(d) The Executive will be entitled to limited use of the
Corporation's aircraft for non-business
purposes, not to exceed usage in excess
of incremental cost to the Corporation of
$110,000 (the "Personal Use
Limitation") during the period May 1 ,2005
through the Retirement Date, and
subject to the terms of the Corporation's
Aircraft Use Guidelines as amended
from time to time. If Executive relocates
his residence outside of the State of
Illinois, travel at the request of the
Corporation from his residence to the
Corporation's executive office and return
travel to his residence will not be
charged against the Personal Use
Limitation. Executive's use of the
Corporation's aircraft to attend board
meetings of corporations or entities
other than the Corporation will be charged
against the Personal Use Limitation.
If the Executive's use of the Corporation's
aircraft is for business purposes,
his spouse accompanying him on such travel
will not cause the use to be charged
against the Personal Use Limitation.
(e) The Corporation will pay on behalf of or reimburse the
Executive for personal legal and financial
advice in calendar year 2005 an
amount not to exceed $15,000 less amounts,
if any, claimed by the Executive
under the Employment Agreement for 2005
prior to the Effective Date.
(f) Notwithstanding anything to the contrary, for purposes of
determining the Executive's benefits under
the Corporation's Supplemental
Executive Retirement Plan, the Executive's
"compensation" shall include income
recognized by him with respect to the
Restricted Stock Award under Section 3(d)
of the Employment Agreement.
(g) Notwithstanding any provision in any stock option award
agreement with the Executive, with respect
to options which first become
exercisable within the calendar month of
March 2006, if Executive may not
exercise those options or may not sell
shares of the Corporation's stock because
of the Corporation's policies restricting
trading of shares by certain
individuals, the Corporation will, in its
discretion, which will be exercised in
a manner so as not to cause adverse tax
consequences to Executive under Section
409A of the Code, either (i) waive the
restrictions with respect to the
Executive (ii) allow Executive to sell the
shares received on exercise to the
Corporation, (iii) allow for the Executive
to sell the shares received on
exercise in a private sale transaction or
(iv) provide that those options remain
exercisable for a period of time, not to
exceed 30 days, following the date on
which the Executive is no longer restricted
from trading shares of the
Corporation.
(h) Except as specifically provided in Section 8, or as
required by law, the Executive acknowledges
that he, his spouse and dependents
will not receive health and medical
benefits following any termination of his
employment.
(i) If the Corporation does not amend its Supplemental
Executive Retirement Plan by December 15,
2005, to provide for distribution of
benefits on separation from service, the
Corporation agrees to allow the
Executive, in accordance with the
provisions of IRS Notice 2005-1 and any
further similar guidance, to elect to
terminate his participation in the
Supplemental Executive Retirement Plan in
2005 so that the amounts deferred
under the Supplemental Executive Retirement
Plan would be distributed to him and
causing such amounts to be included in
income in 2005.
(j) Condition (1) contained in Section 2(a) of The Restricted
Stock Award Agreement between the
Corporation and the Executive dated April 14,
2000 is hereby amended to read as
follows:
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1. Executive remains employed by IDEX as its Chairman
of the Board, and
5. VACATIONS. The Executive will be entitled to five weeks of
paid vacation each year. Unused vacation in
any year may not be carried over to
subsequent years.
6. REIMBURSEMENT FOR EXPENSES. The Corporation will reimburse
the Executive for expenses which the
Executive may from time to time reasonably
incur on behalf of the Corporation in the
performance of his responsibilities
and duties including, but not limited to,
professional dues and attendance at
professional conferences.
7. PERIOD OF EMPLOYMENT. Subject to the provisions of this
Section, the period of employment of the
Executive under this Agreement will
begin on the Effective Date and continue
until the Retirement Date.
Notwithstanding the foregoing:
(a) The Executive's employment will automatically terminate
upon the death of the Executive.
(b) The Corporation may terminate the Executive's employment
for Cause.
8. BENEFITS UPON TERMINATION OF EMPLOYMENT. The Corporation
will provide to the Executive the following
benefits in connection with his
termination of employment:
(a) Retirement. In connection with the Executive's retirement,
the Corporation will provide the
following:
(i) Additional Compensation. The Executive will
receive payments of $31,153.85 in each of 26 bi-weekly payroll
payments commencing with the April 6, 2006 payment. If the
Executive dies during the 26 bi-weekly payroll period, the
balance of the payments will be paid as provided in Section
13.
(ii) Bonus. The Executive will receive a bonus
payment equal to $1,296,000 payable in one lump sum on April
1, 2006 (or as soon thereafter as practicable). Of this
amount, $324,000 will be considered "compensation" for
purposes of the Corporation's Supplemental Executive
Retirement Plan.
(iii) Accrued Vacation. Executive will receive
payment for accrued but unused vacation, which payment will be
equitably prorated based on the period of
