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EXHIBIT 10.1 (a)
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.
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(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).
(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
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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.
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
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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.
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(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:
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
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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
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