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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
perio
