UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
FORM
8-K
CURRENT
REPORT
Pursuant
to Section 13 or 15(d) of the Securities Exchange Act of 1934
Date of
Report (Date of earliest event reported): January 9, 2010
Colfax
Corporation
(Exact
name of registrant as specified in its charter)
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Delaware
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001-34045
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54-1887631
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(State
or other jurisdiction
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(Commission
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(I.R.S.
Employer
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of
incorporation)
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File
Number)
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Identification
No.)
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8730
Stony Point Parkway, Suite 150
Richmond,
VA 23235
(Address
of Principal Executive Offices) (Zip Code)
(804) 560-4070
(Registrant’s
telephone number, including area code)
Not
Applicable
(Former
name or former address, if changed since last report)
Check the
appropriate box below if the Form 8-K filing is intended to simultaneously
satisfy the filing obligation of the registrant under any of the following
provisions:
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o
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Written
communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
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o
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Soliciting
material pursuant to Rule 14a-12 under the Exchange Act (17 CFR
240.14a-12)
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o
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Pre-commencement
communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR
240.14d-2(b))
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¨
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Pre-commencement
communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR
240.13e-4(c))
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Item
2.02. Results of Operations and Financial Condition.
On
January 11, 2010, Colfax Corporation (the “Company”) issued a press release
regarding 2009 financial guidance. A copy of the Company’s press release is
attached to this report as Exhibit 99.1 and is incorporated in this Item by
reference. The Company has scheduled a conference call for 9:00 a.m. EST on
January 11, 2010 to discuss the items described in this report.
Item
5.02 Departure of Directors or Certain Officers; Election of Directors;
Appointment of Certain Officers; Compensatory
Arrangements of Certain Officers.
The Board
of Directors (the “Board”) of the Company has appointed Clay H. Kiefaber as the
Company’s President and Chief Executive Officer, effective January 9, 2010. Mr.
Kiefaber succeeds John A. Young, who resigned as President and Chief Executive
Officer and as a director of the Company, effective January 9, 2010. Mr.
Kiefaber will remain a director of the Company.
The full
text of the Company’s press release issued on January 11, 2010 is attached
hereto as Exhibit 99.1 and is incorporated in this report by
reference.
Biographical Information
Regarding Mr. Kiefaber
Mr.
Kiefaber, age 54, has served as a director of the Company since May 13, 2008. He
served as Group President of Masco Corporation from 2006 to 2007, during which
time he was responsible for a $2.8 billion group of business units. Prior to
serving as Group President, Mr. Kiefaber was Group Vice President of Masco
Builder Cabinet Group and President of Merillat Industries, each a subsidiary of
Masco Corporation. Mr. Kiefaber joined Merillat Industries in 1989.
Employment Arrangements with
Mr. Kiefaber
On
January 9, 2010, the Company and Mr. Kiefaber entered into an employment
agreement (the “Employment Agreement”). The following summary of the terms and
conditions of the Employment Agreement is qualified in its entirety by reference
to the full text of the Employment Agreement, which is attached hereto as
Exhibit 10.1.
Under the
Employment Agreement, Mr. Kiefaber’s employment with the Company may be
terminated for any reason by either party upon 60 days notice. The Company may
accelerate the termination date under the Employment Agreement so long as
payment is made to Mr. Kiefaber of the base salary amount that would have been
owed for the full notice period. The base salary of Mr. Kiefaber is set under
the Employment Agreement at $525,000 and his base salary may not be reduced
below the amount previously in effect without his written agreement. In
addition, Mr. Kiefaber is entitled to participate in our annual cash incentive
program in a target amount equal to 75% of his base salary then in effect. Mr.
Kiefaber also received a $50,000 signing bonus.
The
Employment Agreement also contains non-competition, non-solicitation and
non-disparagement restrictions during the term of the Employment Agreement and
for certain specified periods thereafter.
Further,
in connection with Mr. Kiefaber’s appointment, the Board approved a grant to him
of 102,124 stock options and 40,850 performance restricted stock units,
effective on January 11, 2010 (the “Grant Date”) pursuant to the terms of the
Company’s 2008 Omnibus Incentive Plan. The stock options vest in three equal
annual installments beginning with the first anniversary of the Grant Date
(subject to Mr. Kiefaber’s continued employment with the Company on each such
anniversary) and will have a per share exercise price equal to the closing price
of the Company’s common stock on the New York Stock Exchange on the Grant Date.
The performance restricted stock units will be earned if the Company has
cumulative adjusted earnings per share equal to at least 110% of the adjusted
earnings per share for the 2009 fiscal year for any four consecutive fiscal
quarters beginning with the first fiscal quarter of 2010 and ending with the
last fiscal quarter of 2013, and, if earned, will vest in two equal installments
upon the fourth and fifth anniversaries of the Grant Date, subject to Mr.
Kiefaber’s continued employment with the Company on each such
anniversary.
The
Employment Agreement also provides for Mr. Kiefaber to receive health insurance
and other benefits, including a relocation package, commensurate with the
benefits we provide our senior executives.
Separation Agreement with
Mr. Young
In
connection with Mr. Young’s resignation, the Company and Mr. Young entered into
a Separation Agreement and General Release (the “Separation Agreement”) on
January 9, 2010, which modifies the terms of the Executive Employment Agreement
between Mr. Young and the Company dated April 29, 2008, as amended effective as
of January 1, 2010 (the “Executive Employment Agreement”). The following summary
of the terms and conditions of the Separation Agreement is qualified in its
entirety by reference to the full text of the Separation Agreement, which is
attached hereto as Exhibit 10.2.
The
Separation Agreement provides that Mr. Young will be entitled to receive cash
payments of (i) $1,265,842 within 10 days of the date of his separation and (ii)
$300,000 following certain events but in no event later than March 15, 2011. In
addition, on January 9, 2010, vesting will accelerate in full for (i) 25,000
performance-based restricted stock units held by Mr. Young for which the
performance measures associated with such awards have been certified as met by
the Compensation Committee of the Board on August 25, 2009 but remained subject
to an additional service based vesting period, (ii) 20,833 stock options granted
to Mr. Young on May 7, 2008 that would have otherwise vested on May 7, 2010,
(iii) 50,403 stock options granted to Mr. Young on March 13, 2009 that would
have otherwise vested on March 13, 2010, and (iv) 50,403 stock options granted
to Mr. Young on March 13, 2009 that would have otherwise vested on March 13,
2011. The term for exercise of these accelerated stock options, as well as
20,834 vested stock options granted in 2008, have been amended so that they will
remain exercisable until March 31, 2012. In addition, 49,933 shares of Colfax
common stock granted to Mr. Young on May 7, 2008 that remain subject to delayed
delivery will be delivered in full to Mr. Young.
Item
9.01. Financial Statements and Exhibits.
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(d)
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Exhibits
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10.1
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Employment
Agreement, dated January 9, 2010, between Clay Kiefaber and Colfax
Corporation
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10.2
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Separation
Agreement, dated January 9, 2010, between John A. Young and Colfax
Corporation
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99.1
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Colfax
Corporation press release dated January 11,
2010
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SIGNATURES
Pursuant to the requirements of the
Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on
its behalf by the undersigned hereunto duly authorized.
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Colfax
Corporation
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Date:
January 11, 2010
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By:
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/s/ Thomas M. O’Brien
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Name:
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Thomas
M. O’Brien
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Title:
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Senior
Vice President, General Counsel and Secretary
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EXHIBIT
INDEX
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10.1
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Employment
Agreement, dated January 9, 2010, between Clay Kiefaber and Colfax
Corporation
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10.2
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Separation
Agreement, dated January 9, 2010, between John A. Young and Colfax
Corporation
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99.1
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Colfax
Corporation press release dated January 11,
2010
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EXHIBIT
10.1
CLAY
H. KIEFABER
EXECUTIVE
EMPLOYMENT AGREEMENT
THIS
EXECUTIVE EMPLOYMENT AGREEMENT (this “Agreement”) is entered into as
of January 9, 2010, (the “Effective Date”) by and
between Colfax Corporation, a Delaware corporation (the “Company”), and Clay H.
Kiefaber (the “Executive”).
1. Positions, Duties and
Term. The Company hereby employs the Executive as its
President and Chief Executive Officer and the Executive hereby accepts such
employment, on the terms and conditions set forth below.
1.1 Term. (a)
The Executive’s employment hereunder shall be on an “at-will” status and shall
commence as of the Effective Date. Either the Executive or the
Company may terminate the Executive’s employment for any reason by providing not
less than 60 days advance written notice; provided, however, that in lieu
of such notice, the Company may terminate the Executive’s employment upon less
than 60 days advance notice, so long as it pays the Executive severance pay or
provides a combination of severance pay and salary during a reduced notice
period that equals 60 days of Base Salary. Following termination of
employment, the Executive shall be provided any previously unpaid Compensation
Accrued at Termination (as defined below).
(b) Termination and Offices
Held. At the time Executive ceases to be an employee of the
Company, the Executive agrees that he shall resign from any office he holds with
the Company and its subsidiaries and any affiliates and, if then a member of the
Board of Directors, shall be deemed to have tendered his resignation as a member
of the Board.
1.2 Duties. The
Executive shall faithfully perform for the Company the duties incident to the
office of President and Chief Executive Officer and shall perform such other
duties of an executive, managerial or administrative nature as shall be
specified and designated from time to time by the Board. The
Executive shall devote substantially all of the Executive’s business time and
effort to the performance of the Executive’s duties hereunder, provided that in
no event shall this sentence prohibit the Executive from performing personal and
charitable activities and any other activities approved by the Board, so long as
such activities do not materially interfere with the Executive’s duties for the
Company or create a conflict of interest or the appearance of a conflict of
interest.
2. Compensation.
2.1 Salary. The
Company shall pay the Executive a base salary at an annual rate of $525,000 (the
“Base
Salary”). The Base Salary may be increased at the discretion
of the Board or the Compensation Committee of the Board (the “Committee”), as
applicable. Except as otherwise agreed in writing by the Executive,
the Base Salary shall not be reduced from the amount previously in
effect. The Base Salary shall be payable in equal biweekly
installments or in such other installments as shall be consistent with the
Company’s payroll procedures.
2.2 Annual Cash
Incentive. During the term of his employment under this
Agreement, the Executive shall be eligible to receive an annual cash bonus based
on performance objectives established by the Committee each year (the “Annual Cash
Incentive”). The Executive’s target Annual Cash Incentive
amount will be the percentage of Base Salary designated as the target by the
Committee, which amount shall be at least 75% of the Base Salary then in effect
for each applicable year. Notwithstanding the preceding, Executive’s
Annual Cash Incentive, if any, may be below (including zero), at, or above the
target based upon the achievement of the performance objectives.
2.3 Benefits. During
the term of his employment under this Agreement, the Executive shall be
permitted to participate in any group life, hospitalization or disability
insurance plans, health programs, pension and profit sharing plans, long-term
incentive plans and similar benefits that may be available to other senior
executives of the Company generally, on the same terms as may be applicable to
such other executives, in each case to the extent that the Executive is eligible
under the terms of such plans or programs.
2.4 Vacation. During
the term of his employment under this agreement, the Executive shall be entitled
to vacation of twenty (20) working days per year.
2.5 Expenses. The
Company shall pay or reimburse the Executive for all ordinary and reasonable
out-of-pocket expenses actually incurred (and, in the case of reimbursement,
paid) by the Executive during the term the Executive’s employment under this
Agreement, provided that the Executive submits such expenses in accordance with
the policies applicable to senior executives of the Company
generally.
2.6 Signing
Bonus. The Company shall pay to the Executive a single lump
sum payment of $50,000, to be payable with and in addition to the first biweekly
Base Salary payment made to the Executive pursuant to Section 2.1.
2.7 Relocation
Expenses. The Company shall reimburse the Executive for
relocation expenses associated with moving his residence to the Richmond,
Virginia area. Reimbursable expenses shall include closing costs
relating to the sale of his current home and the purchase of a new home, moving
expenses and reasonable temporary living expenses.
2.8 Equity
Awards. The Company shall make the following awards as of
January 11, 2010 (the “Grant
Date”) under the Colfax Corporation 2008 Omnibus Incentive Plan (the
“Stock Incentive
Plan”):
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(i)
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A
grant of performance restricted stock units covering 40,850 shares of the
Company’s common stock (the “Stock”), subject to the
terms of the CEO Performance Stock Unit Agreement attached hereto as Exhibit
A.
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(ii)
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A
grant of employee stock options covering 102,124 shares of Stock at an
exercise price equal to the closing price on the Grant Date, subject to
the terms of the Company’s standard stock option agreement currently in
use for executive grants under the Stock Incentive Plan, with vesting to
occur in three equal installments beginning on the first anniversary of
the Grant Date.
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2
2.9 Waiver and Release
Agreement. The Executive agrees to execute at the time of
Executive’s termination of employment a Waiver and Release Agreement in a form
provided to the Executive by the Company (the “Waiver and Release
Agreement”), consistent with the form attached hereto as Exhibit B, the terms
and conditions of which are specifically incorporated herein by
reference.
3.
Golden Parachute
Excise Tax Provisions. In
the event it is determined that any payment or benefit
(within the meaning of Section 280G(B)(2) of the Internal Revenue Code of 1986,
as amended (the “Code”)), to the Executive or
for his benefit paid or payable or distributed to or distributable pursuant to
the terms of this Agreement or otherwise in connection with, or arising out of,
his employment (“Payments”), would be subject
to the excise tax imposed by Section 4999 of the Code or any interest or
penalties are incurred by the Executive with respect to such excise tax (such
excise tax, together with any such interest and penalties, are hereinafter
collectively referred to as the “Excise Tax”), then the total Payments shall be reduced to the extent
the payment of such amounts would cause the Executive’s total termination
benefits to constitute an “excess” parachute payment under Section 280G of the
Internal Revenue Code of 1986, as amended (the “Code”) and by reason of such excess parachute payment the
Executive would be subject to an excise tax under Section 4999(a) of the Code,
but only if the Executive (or the Executive’s tax advisor) determines that the
after-tax value of the termination benefits calculated with the foregoing
restriction exceed those calculated without the foregoing
restriction. Except as otherwise expressly provided herein,
all determinations under this Section 3 shall be made at the expense of
the Company by a nationally recognized public accounting or consulting firm
selected by the Company and subject to the approval of Executive, which approval
shall not be unreasonably withheld. Such determination shall be
binding upon Executive and the Company.
3.1 Company
Withholding. Notwithstanding
anything contained in this Agreement to the contrary, in the event that,
according to the Determination, an Excise Tax will be imposed on any Payment or
Payments, the Company shall pay to the applicable government taxing authorities
as Excise Tax withholding, the amount of the Excise Tax that the Company has
actually withheld from the Payment or Payments.
4. Confidentiality;
Non-Competition and Non-Disclosure; Executive Cooperation;
Non-Disparagement.
4.1 Confidential
Information. The
Executive acknowledges that, during the course of his employment with the
Company, the Executive may receive special training and/or may be given access
to or may become acquainted with Confidential Information (as hereinafter
defined) of the Company. As used in this Section 4.1, “Confidential
Information” of the Company means all trade practices, business plans, price
lists, supplier lists, customer lists, marketing plans, financial information,
software and all other compilations of information which relate to the business
of the Company, or to any of its subsidiaries, and which have not been disclosed
by the Company to the public, or which are not otherwise generally available to
the public.
3
The
Executive acknowledges that the Confidential Information of the Company, as such
may exist from time to time, are valuable, confidential, special and unique
assets of the Company and its subsidiaries, expensive to produce and maintain
and essential for the profitable operation of their respective
businesses. The Executive agrees that, during the course of his
employment with the Company, or at any time thereafter, he shall not, directly
or indirectly, communicate, disclose or divulge to any Person (as such term is
hereinafter defined), or use for his benefit or the benefit of any Person, in
any manner, any Confidential Information of the Company or its subsidiaries
acquired during his employment with the Company or any other confidential
information concerning the conduct and details of the businesses of the Company
and its subsidiaries, except as required in the course of his employment with
the Company or as otherwise may be required by law. For purposes if
this Agreement, “Person” shall mean any individual, partnership, corporation,
trust, unincorporated association, joint venture, limited liability company or
other entity or any government, governmental agency or political
subdivision.
All
documents relating to the businesses of the Company and its affiliates
including, without limitation, Confidential Information of the Company, whether
prepared by the Executive or otherwise coming into the Executive's possession,
are the exclusive property of the Company and such respective subsidiaries, and
must not be removed from the premises of the Company, except as required in the
course of the Executive's employment with the Company. The Executive
shall return all such documents (including any copies thereof) to the Company
when the Executive ceases to be employed by the Company or upon the earlier
request of the Company or the Board.
4.2 Noncompetition. During
the term of this Agreement (including any extensions thereof) and for a period
of one (1)
year following the termination of the Executive's employment under this
Agreement for any reason, the Executive shall not, except with the Company's
express prior written consent, for the benefit of any entity or person
(including the Executive) compete with the Business (as hereinafter defined)
within the Territory. For purposes of this Agreement, “Business”
shall mean a company involved in the manufacture and sale of pumps, valves or
fluid handling systems of the kind that are produced by the Company or that are
competitive with the pumps, valves or fluid handling systems that are
produced by the Company. For purposes of this Agreement, “Territory”
shall mean the United States of America and any other jurisdictions in which the
Company does business at the time of termination of the Executive’s employment
under this Agreement.
4.3 Non-Solicitation. During the term of this Agreement
(including any extension thereof) and for a period of two (2) years
following the termination of the Executive’s termination
under this Agreement for any reason, the Executive shall not, except with the Company’s express prior
written consent, for the benefit of any entity or person (including the
Executive) solicit, induce or encourage any employee of the Company, or any of
its subsidiaries, to leave the employment of the Company or solicit,
induce or encourage any customer, or client of the Company, or any of its
subsidiaries, to cease or reduce its business with the Company or its
subsidiaries.
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4.4 Cooperation With Regard to
Litigation. Executive
agrees to cooperate with the Company, during the term and thereafter (including
following Executive’s termination of employment for any reason), by making
himself available to testify on behalf of the Company or any subsidiary or
affiliate of the Company, in any action, suit, or proceeding, whether civil,
criminal, administrative, or investigative, and to assist the Company, or any
subsidiary or affiliate of the Company, in any such action, suit, or proceeding,
by providing information and meeting and consulting with the Board or its
representatives or counsel, or representatives or counsel to the Company, or any
subsidiary or affiliate of the Company, as may be reasonably requested and after
taking into account Executive’s post-termination responsibilities and
obligations. The Company agrees to reimburse Executive, on an
after-tax basis, for all reasonable expenses actually incurred in connection
with his provision of testimony or assistance.
4.5 Non-Disparagement. Executive
shall not, at any time during the Term and thereafter make statements or
representations, or otherwise communicate, directly or indirectly, in writing,
orally, or otherwise, or take any action which may, directly or indirectly,
disparage or be damaging to the Company, its subsidiaries or affiliates or their
respective officers, directors, employees, advisors, businesses or reputations,
nor shall members of the Board of Directors or Executive’s successor in office
make any such statements or representations regarding
Executive. Notwithstanding the foregoing, nothing in this
Agreement shall preclude Executive or his successor or members of the Board of
Directors from making truthful statements that are required by applicable law,
regulation or legal process.
4.6 Survival. The
provisions of this Section 4 shall survive the termination of the Term and any
termination or expiration of this Agreement.
4.7 Remedies. Executive
agrees that any breach of the terms of this Section 4 would result in
irreparable injury and damage to the Company for which the Company would have no
adequate remedy at law; Executive therefore also agrees that in the event of
said breach or any threat of breach and notwithstanding Section 5 the Company
shall be entitled to an immediate injunction and restraining order from a court
of competent jurisdiction to prevent such breach and/or threatened breach and/or
continued breach by Executive and/or any and all persons and/or entities acting
for and/or with Executive, without having to prove damages. The
availability of injunctive relief shall be in addition to any other remedies to
which the Company may be entitled at law or in equity, but remedies other than
injunctive relief may only be pursued in an arbitration brought in accordance
with Section 5. The terms of this paragraph shall not
prevent the Company from pursuing in an arbitration any other available
remedies for any breach or threatened breach of this Section 4, including but
not limited to the recovery of damages from Executive. Executive
hereby further agrees that, if it is ever determined, in an arbitration brought
in accordance with Section 5, that willful actions by Executive have constituted
wrongdoing that contributed to any material misstatement or omission from any
report or statement filed by the Company with the U.S. Securities and Exchange
Commission or material fraud against the Company, then the Company, or its
successor, as appropriate, may recover all of any award or payment made to
Executive, less the amount of any net tax owed by Executive with respect to such
award or payment over the tax benefit to Executive from the repayment or return
of the award or payment, pursuant to Section 3, and Executive agrees to repay
and return such awards and amounts to the Company within 30 calendar days of
receiving notice from the Company that the Board has made the determination
referenced above and accordingly the Company is demanding repayment pursuant to
this Section 4. The Company or its successor may, in its sole discretion, affect
any such recovery by (i) obtaining repayment directly from Executive; (ii)
setting off the amount owed to it against any amount or award that would
otherwise be payable by the Company to Executive; or (iii) any combination of
(i) and (ii) above.
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5.
Governing Law;
Disputes; Arbitration.
5.1 Governing
Law. This
Agreement is governed by and is to be construed, administered, and enforced in
accordance with the laws of the Commonwealth of
Virginia, without regard to conflicts of law principles. If
under the governing law, any portion of this Agreement is at any time deemed to
be in conflict with any applicable statute, rule, regulation, ordinance, or
other principle of law, such portion shall be deemed to be modified or altered
to the extent necessary to conform thereto or, if that is not possible, to be
omitted from this Agreement. The invalidity of any such portion shall
not affect the force, effect, and validity of the remaining portion
hereof. If any court determines that any provision of Section 4 is
unenforceable because of the duration or geographic scope of such provision, it
is the parties’ intent that such court shall have the power to modify the
duration or geographic scope of such provision, as the case may be, to the
extent necessary to render the provision enforceable and, in its modified form,
such provision shall be enforced.
5.2 Arbitration. Any
dispute or controversy arising under or in connection with this Agreement shall
be settled exclusively by arbitration in the City
of Richmond, Virginia by three arbitrators in accordance with the
National Rules for the Resolution of Employment Disputes of the American
Arbitration Association in effect at the time of submission to
arbitration. Judgment may be entered on the arbitrators’ award in any
court having jurisdiction. For purposes of entering any judgment
upon an award rendered by the arbitrators, the Company and Executive hereby
consent to the jurisdiction of any or all of the following
courts: (i) the United States District Court for the Fourth Circuit, (ii) any of the courts of the
Commonwealth of Virginia, or (iii) any other court having
jurisdiction. The Company and Executive further agree that any
service of process or notice requirements in any such proceeding shall be
satisfied if the rules of such court relating thereto have been substantially
satisfied. The Company and Executive hereby waive, to the fullest
extent permitted by applicable law, any objection which it may now or hereafter
have to such jurisdiction and any defense of inconvenient forum. The
Company and Executive hereby agree that a judgment upon an award rendered
by the arbitrators may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Each party shall
bear its or his costs and expenses arising in connection with any arbitration
proceeding pursuant to this Section 5. Notwithstanding any provision
in this Section 5, Executive shall be paid compensation due and owing under this
Agreement during the pendency of any dispute or controversy arising under or in
connection with this Agreement.
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5.3 WAIVER OF JURY
TRIAL. TO
THE EXTENT APPLICABLE, EACH OF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO
WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL FOR ANY CLAIM OR CAUSE OF ACTION
BASED UPON OR ARISING OUT OF THIS AGREEMENT OR ANY DEALINGS BETWEEN THEM
RELATING TO THE SUBJECT MATTER OF THIS AGREEMENT. This provision is
subject to Section 5, requiring arbitration of disputes hereunder.
6. Miscellaneous.
6.1 Integration. This
Agreement cancels and supersedes any and all prior agreements and understandings
between the parties hereto with respect to the employment of Executive by the
Company, any parent or predecessor company, and the Company’s subsidiaries
during the Term, but excluding existing contracts relating to compensation under
executive compensation and employee benefit plans of the Company and its
subsidiaries. This Agreement constitutes the entire agreement among
the parties with respect to the matters herein provided, and no modification or
waiver of any provision hereof shall be effective unless in writing and signed
by the parties hereto. Executive shall not be entitled to any payment
or benefit under this Agreement which duplicates a payment or benefit received
or receivable by Executive under such prior agreements and understandings or
under any benefit or compensation plan of the Company.
6.2 Successors;
Transferability. The
Company shall require any successor (whether direct or indirect, by purchase,
merger, consolidation or otherwise, and whether or not the corporate existence
of the Company continues) to all or substantially all of the business and/or
assets of the Company to expressly assume and agree to perform this Agreement in
the same manner and to the same extent that the Company would be required to
perform it if no such succession had taken place. As used in this
Agreement, “Company” shall mean the Company as hereinbefore defined and any
successor to its business and/or assets as aforesaid which assumes and agrees to
perform this Agreement by operation of law, or otherwise and, in the case of an
acquisition of the Company in which the corporate existence of the Company
continues, the ultimate parent company following such
acquisition. Subject to the foregoing, the Company may transfer and
assign this Agreement and the Company’s rights and obligations hereunder to
another entity that is substantially comparable to the Company in its financial
strength and ability to perform the Company’s obligations under this
Agreement. Neither this Agreement nor the rights or obligations
hereunder of the parties hereto shall be transferable or assignable by
Executive, except in accordance with the laws of descent and distribution or as
specified in Section 6.3.
6.3 Beneficiaries. Executive
shall be entitled to designate (and change, to the extent permitted under
applicable law) a beneficiary or beneficiaries to receive any compensation or
benefits provided hereunder following Executive’s death.
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6.4 Notices. Whenever
under this Agreement it becomes necessary to give notice, such notice shall be
in writing, signed by the party or parties giving or making the same, and shall
be served on the person or persons for whom it is intended or who should be
advised or notified, by Federal Express or other similar overnight service or by
certified or registered mail, return receipt requested, postage prepaid and
addressed to such party at the address set forth below or at such other address
as may be designated by such party by like notice:
If to the
Company:
Colfax
Corporation
Attn: General
Counsel
8730
Stony Point Parkway, Suite 150
Richmond,
VA 23235
With a
copy to:
Michael
Silver, Esquire
Hogan
& Hartson LLP
555
13th
Street NW
Washington,
D.C. 20004
If to
Executive:
Clay H.
Kiefaber
1812
Norway Rd.
Ann
Arbor, MI 48104
If the
parties by mutual agreement supply each other with fax numbers for the purposes
of providing notice by facsimile, such notice shall also be proper notice under
this Agreement. In the case of Federal Express or other similar
overnight service, such notice or advice shall be effective when sent, and, in
the cases of certified or registered mail, shall be effective two days after
deposit into the mails by delivery to the U.S. Post Office.
6.5 Reformation. The
invalidity of any portion of this Agreement shall not be deemed to render the
remainder of this Agreement invalid.
6.6 Headings. The
headings of this Agreement are for convenience of reference only and do not
constitute a part hereof.
6.7 No General
Waivers. The
failure of any party at any time to require performance by any other party of
any provision hereof or to resort to any remedy provided herein or at law or in
equity shall in no way affect the right of such party to require such
performance or to resort to such remedy at any time thereafter, nor shall the
waiver by any party of a breach of any of the provisions hereof be deemed to be
a waiver of any subsequent breach of such provisions. No such waiver
shall be effective unless in writing and signed by the party against whom such
waiver is sought to be enforced.
6.8 Offsets;
Withholding. The
amounts required to be paid by the Company to Executive pursuant to this
Agreement shall not be subject to offset other than with respect to any amounts
that are owed to the Company by Executive due to his receipt of funds as a
result of his fraudulent activity. The foregoing and other provisions
of this Agreement notwithstanding, all payments to be made to Executive under
this Agreement, or otherwise by the Company, will be subject to withholding to
satisfy required withholding taxes and other required deductions.
8
6.9 Successors and
Assigns. This
Agreement shall be binding upon and shall inure to the benefit of Executive, his
heirs, executors, administrators and beneficiaries, and shall be binding upon
and inure to the benefit of the Company and its successors and
assigns.
6.10 Counterparts. This
Agreement may be executed in counterparts, each of which shall be deemed to be
an original but all of which together will constitute one and the same
instrument.
6.11 Representations of
Executive. Executive
represents and warrants to the Company that he has the legal right to enter into
this Agreement and to perform all of the obligations on his part to be performed
hereunder in accordance with its terms and that he is not a party to any
agreement or understanding, written or oral, which prevents him from entering
into this Agreement or performing all of his obligations hereunder.
6.12 Compensation Accrued at
Termination. For
purposes of this Agreement, “Compensation Accrued at Termination” means the
following:
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(i)
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The
unpaid portion of annual Base Salary at the rate payable, in accordance
with Section 2.1 hereof, at the date of Executive’s termination of
employment, pro rated through such date of termination, payable in
accordance with the Company’s regular pay
schedule;
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(ii)
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Except
as otherwise provided in this Agreement, all earned and unpaid and/or
vested, nonforfeitable amounts owing or accrued at the date of Executive’s
termination of employment under any compensation and benefit plans,
programs, and arrangements set forth or referred to in Sections 2.2 and
2.3 hereof (including any earned and vested Annual Cash Incentive) in
which Executive theretofore participated, payable in accordance with the
terms and conditions of the plans, programs, and arrangements (and
agreements and documents thereunder) pursuant to which such compensation
and benefits were granted or accrued;
and
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(iii)
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Reasonable
business expenses and disbursements incurred by Executive prior to
Executive’s termination of employment, to be reimbursed to Executive, as
authorized under Section 2.5, in accordance the Company’s reimbursement
policies as in effect at the date of such
termination.
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9
IN
WITNESS WHEREOF, the parties hereto have signed their names as of the day and
year first above written.
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COLFAX
CORPORATION
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By:
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/s/ Steven W.
Weidenmuller
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Name:
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Steven
W. Weidenmuller
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Title:
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Senior
Vice President, Human Resources
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/s/ Clay H. Kiefaber
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Clay
H. Kiefaber
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10
EXHIBIT
A
COLFAX
CORPORATION
2008
OMNIBUS INCENTIVE PLAN
CEO
PERFORMANCE STOCK UNIT AGREEMENT
Colfax Corporation, a Delaware
corporation (the “Company”), hereby grants stock units relating to shares of its
common stock, $.001 par value (the “Stock”), to the individual named below as
the Grantee. The terms and conditions of the grant are set forth in
this cover sheet and the attachment (collectively, the “Agreement”) and in the
Colfax Corporation 2008 Omnibus Incentive Plan (the “Plan”).
Grant
Date: January 11, 2010
Name of
Grantee: ____________________________________
Grantee’s
Social Security Number: _______-_______-______
Number of
Stock Units Covered by Grant: ____________
Performance
Condition on Stock Unit Eligibility:
Eligibility
to vest in the Stock Units covered by this grant is determined based on the
level of achievement of the Performance Criteria set forth in this
Agreement.
Vesting
Schedule for Stock Units After Application of the Performance
Criteria:
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Vesting Date
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Vesting Percentage
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4th
Anniversary of the Grant Date
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50 | % | ||
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5th
Anniversary of the Grant Date
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50 | % | ||
By signing this cover sheet, you agree
to all of the terms and conditions described in this Agreement and in the Plan,
a copy of which will be provided on request. You acknowledge that you
have carefully reviewed the Plan and agree that the Plan will control in the
event any provision of this Agreement should appear to be inconsistent with the
terms of the Plan. Certain capitalized terms used in this Agreement
are defined in the Plan and have the meaning set forth in the Plan.
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Grantee:
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Company:
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(Signature)
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Title:
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Attachment
This
is not a stock certificate or a negotiable instrument.
COLFAX
CORPORATION
2008
OMNIBUS INCENTIVE PLAN
CEO
PERFORMANCE STOCK UNIT AGREEMENT
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Stock
Unit Transferability
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This
grant is an award of stock units in the number of units set forth on the
cover sheet, subject to the performance criteria and the vesting
conditions described below (“Stock Units”). Your Stock Units
may not be transferred, assigned, pledged or hypothecated, whether by
operation of law or otherwise, nor may the Stock Units be made subject to
execution, attachment or similar process.
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Performance
Criteria
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Your eligibility for the Stock
Units shall be determined based on whether the Company achieves certain
performance criteria (“Performance Criteria”) for any four consecutive fiscal
quarters beginning with the first fiscal quarter of 2010 and ending with
the last fiscal quarter of 2013 (each such four quarters
a “Performance Period”). If the Performance
Criteria are achieved for a Performance Period, you become eligible
to vest in all of the Stock Units covered by this Agreement based on
additional Service
to the Company as provided below in the Section of this Agreement
concerning “Vesting.”
The
Company’s Performance Criteria will be achieved if the Company has
cumulative Adjusted Earnings Per Share for a Performance Period equal
to at least 110% of the Adjusted Earnings Per Share for the 2009 fiscal
year.
For
this purpose, “Adjusted Earnings Per Share” means the Company’s
consolidated total diluted earnings per share from continuing operations,
adjusted to exclude any amounts that are generally required to be reported
separately under United States generally accepted accounting principles
(“U.S. GAAP”) as extraordinary items and changes in accounting method, as
reported in the Company’s audited financial statements. By way
of example, the Company treats the following as extraordinary items: the
after-tax impact of asbestos liability and defense costs, asbestos
coverage litigation expense, restructuring costs such as severance,
outplacement or the cost to relocate production, asset impairment charges,
goodwill impairment charges, legacy legal adjustments, costs related to
unsuccessful acquisitions and costs associated with the early
extinguishment of debt. Adjusted Earnings Per Share also shall
exclude amounts reported in the Company’s audited financial statements as
provision for income taxes occurring after the Grant
Date. Furthermore, budgeted exchange rates shall be used to
account for net income under U.S. GAAP standards.
If
your Service terminates for any reason prior to the end of the last
Performance Period, then, except as otherwise set forth below, you will
forfeit all of your Stock Units immediately upon such
termination. If the Performance Criteria are not achieved
during any Performance Period, then you will forfeit all of your Stock
Units as of the end of the last Performance
Period.
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Vesting
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If
at the end of the last Performance Period there remain Stock Units covered
by this Agreement, your Stock Units shall vest according to the schedule
set forth on the cover sheet; provided, that, you remain in Service on the
relevant Vesting Dates. If your Service terminates for any
reason other than death or Disability, then, except as otherwise set forth
below, you will forfeit any Stock Units in which you have not yet become
vested.
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Death
or Disability
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If
the Performance Criteria are achieved for a Performance Period, but your
Service terminated because of your death or Disability before the end of
the Performance Period, your Stock Units shall fully and immediately vest
as of the date the Committee certifies achievement of the Performance
Criteria (the “Certification Date”).
If
the Performance Criteria are achieved for a Performance Period, and your
Service terminates because of your death or Disability following the end
of the Performance Period, your Stock Units shall fully and immediately
vest as of the date of your termination from Service or, if later, as of
the Certification Date.
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Delivery
of Stock Pursuant to Units
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Delivery
of the shares of Stock represented by your vested Stock Units shall be
made as soon as practicable upon vesting and in any event not later than
two and one-half months after the end of the calendar year in which they
vest.
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Withholding
Taxes
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You
agree, as a condition of this grant, that you will make acceptable
arrangements to pay any withholding or other taxes that may be due as a
result of vesting in Stock Units or your acquisition of Stock under this
grant. In the event that the Company determines that any
federal, state, local or foreign tax or withholding payment is required
relating to this grant, the Company will have the right to: (i) require
that you arrange such payments to the Company, (ii) withhold such amounts
from other payments due to you from the Company or any Affiliate, or (iii)
cause an immediate forfeiture of shares of Stock subject to the Stock
Units granted pursuant to this Agreement in an amount equal to the
withholding or other taxes due.
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Retention
Rights
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This
Agreement does not give you the right to be retained or employed by the
Company (or any Affiliates) in any capacity. The Company (and
any Affiliates) reserves the right to terminate your Service at any time
for any reason.
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Shareholder
Rights
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You
do not have any of the rights of a shareholder with respect to the Stock
Units unless and until the shares relating to the Stock Units has been
delivered to you. You will, however, be entitled to receive,
upon the Company’s payment of a cash dividend on outstanding Stock, a cash
payment for each Stock Unit that you hold as of the record date for such
dividend equal to the per-share dividend paid on the
Stock.
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Forfeiture
of Rights
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If
you should take actions in competition with the Company, the Company shall
have the right to cause a forfeiture of your unvested Stock
Units.
Unless
otherwise specified in an employment or other agreement between the
Company and you (including the Company’s Code of Ethics), you take actions
in competition with the Company if you directly or indirectly, own,
manage, operate, join or control, or participate in the ownership,
management, operation or control of, or are a proprietor, director,
officer, stockholder, member, partner or an employee or agent of, or a
consultant to any business, firm, corporation, partnership or other entity
which competes with any business in which the Company or any of its
Affiliates is engaged during your employment or other relationship with
the Company or its Affiliates or at the time of your termination of
Service.
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Adjustments
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In
the event of a stock split, a stock dividend or a similar change in the
Company stock, the number of Stock Units covered by this grant will be
adjusted (and rounded down to the nearest whole number) in accordance with
the terms of the Plan. Your Stock Units shall be subject to the
terms of the agreement of merger, liquidation or reorganization in the
event the Company is subject to such corporate activity in accordance with
the terms of the Plan.
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Applicable
Law
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This
Agreement will be interpreted and enforced under the laws of the State of
Delaware, other than any conflicts or choice of law rule or principle that
might otherwise refer construction or interpretation of this Agreement to
the substantive law of another jurisdiction.
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Consent
to Electronic Delivery
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The
Company may choose to deliver certain statutory materials relating to the
Plan in electronic form. By accepting this grant you agree that
the Company may deliver the Plan prospectus and the Company’s annual
report to you in an electronic format. If at any time you would
prefer to receive paper copies of these documents, as you are entitled to
receive, the Company would be pleased to provide copies. Please
contact the Corporate Secretary to request paper copies of these
documents.
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The
Plan
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The
text of the Plan is incorporated in this Agreement by
reference. Certain capitalized terms used in this Agreement are
defined in the Plan, and have the meaning set forth in the
Plan.
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Unless
otherwise specified in an employment or other agreement between the
Company and you, this Agreement and the Plan constitute the entire
understanding between you and the Company regarding this grant of Stock
Units. Any prior agreements, commitments or negotiations
concerning this grant are
superseded.
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By signing the cover sheet of this
Agreement, you agree to all of the terms and conditions described above and in
the Plan.
EXHIBIT
B
WAIVER
AND RELEASE AGREEMENT
THIS WAIVER AND RELEASE AGREEMENT is
entered into as of [TO BE
DETERMINATED AT TERMINATION OF EMPLOYMENT] (the “Effective Date”), by
_____________ (the “Executive”) in consideration of
the severance pay provided to the Executive by Colfax
Corporation (the “Company”) pursuant to the
Executive Employment Agreement (the “Employment Agreement”) by and
between the Company and the Executive (the “Severance Payment”).
1. Waiver
and Release. The Executive, on
his own behalf and on behalf of his heirs, executors, administrators, attorneys
and assigns, to the fullest extent permitted by law, hereby unconditionally and
irrevocably releases, waives and forever discharges the Company and each of its
affiliates, parents, successors, predecessors, and the subsidiaries, directors,
owners, members, shareholders, officers, agents, and employees of the Company
and its affiliates, parents, successors, predecessors, and subsidiaries
(collectively, all of the foregoing are referred to as the “Employer”), from any and all
causes of action, claims and damages, including attorneys’ fees, whether known
or unknown, foreseen or unforeseen, presently asserted or otherwise arising
through the date of his signing of the Waiver and Release Agreement, concerning
his employment or separation from employment. This release includes,
but is not limited to, any claim or entitlement to salary, bonuses (but not
including payment of any remaining bonus under the Employment Agreement), any
other payments, benefits or damages arising under any federal law (including,
but not limited to, Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act (“ADEA”), the Employee
Retirement Income Security Act of 1974, the Americans with Disabilities Act,
Executive Order 11246, the Family and Medical Leave Act, and the Worker
Adjustment and Retraining Notification Act, each as amended); any claim arising
under any state or local laws, ordinances or regulations (including, but not
limited to, any state or local laws, ordinances or regulations requiring that
advance notice be given of certain workforce reductions); and any claim arising
under any common law principle or public policy, including, but not limited to,
all suits in tort or contract, such as wrongful termination, defamation,
emotional distress, invasion of privacy or loss of consortium.
The Executive understands that by
signing this Waiver and Release Agreement he is not waiving any claims or
administrative charges, or any right to challenge the validity of a waiver of
claims under the ADEA which cannot be waived by law. He is waiving,
however, any right to monetary recovery or individual relief should any federal,
state or local agency (including the Equal Employment Opportunity
Commission) pursue any claim on his behalf arising out of or related to his
employment with and/or separation from employment with the Company.
The Executive further agrees without
any reservation whatsoever, never to sue the Employer or become a party to a
lawsuit on the basis of any and all claims of any type lawfully and validly
released in this Waiver and Release Agreement.
2. Acknowledgments. The Executive is
signing this Waiver and Release Agreement knowingly and
voluntarily. He acknowledges that:
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(a)
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He
is hereby advised in writing to consult an attorney before signing this
Waiver and Release Agreement;
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(b)
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He
has relied solely on his own judgment and/or that of his attorney
regarding the consideration for and the terms of this Waiver and Release
Agreement and is signing this Waiver and Release Agreement knowingly and
voluntarily of his own free
will;
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(c)
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He
is not entitled to the Severance Payment unless he agrees to and honors
the terms of this Waiver and Release
Agreement;
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(d)
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He
has been given at least [twenty-one (21)] [forty-five
(45)] calendar days to consider this Waiver and Release Agreement,
or he expressly waives his right to have at least [twenty-one (21)] [forty-five
(45)] days to consider this Waiver and Release
Agreement;
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(e)
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He
may revoke this Waiver and Release Agreement within seven (7) calendar
days after signing it by submitting a written notice of revocation to the
Employer. He further understands that this Waiver and Release
Agreement is not effective or enforceable until after the seven (7) day
period of revocation has expired without revocation, and that if he
revokes this Waiver and Release Agreement within the seven (7) day
revocation period, he will not receive the Severance
Payment;
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(f)
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He
has read and understands the Waiver and Release Agreement and further
understands that it includes a general release of any and all known and
unknown, foreseen or unforeseen claims presently asserted or otherwise
arising through the date of his signing of this Waiver and Release
Agreement that he may have against the Employer;
and
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(g)
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No
statements made or conduct by the Employer has in any way coerced or
unduly influenced him or her to execute this Waiver and Release
Agreement.
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3. No
Admission of Liability. This Waiver and
Release Agreement does not constitute an admission of liability or wrongdoing on
the part of the Employer, the Employer does not admit there has been any
wrongdoing whatsoever against the Executive, and the Employer expressly denies
that any wrongdoing has occurred.
4. Entire
Agreement. There are no
other agreements of any nature between the Employer and the Executive with
respect to the matters discussed in this Waiver and Release Agreement, except as
expressly stated herein, and in signing this Waiver and Release Agreement, the
Executive is not relying on any agreements or representations, except those
expressly contained in this Waiver and Release Agreement.
5. Execution. It is not
necessary that the Employer sign this Waiver and Release Agreement following the
Executive's full and complete execution of it for it to become fully effective
and enforceable.
6. Severability. If any provision
of this Waiver and Release Agreement is found, held or deemed by a court of
competent jurisdiction to be void, unlawful or unenforceable under any
applicable statute or controlling law, the remainder of this Waiver and Release
Agreement shall continue in full force and effect.
7. Governing
Law. This Waiver and
Release Agreement shall be governed by the laws of the State of Delaware,
excluding the choice of law rules thereof.
8. Headings. Section and
subsection headings contained in this Waiver and Release Agreement are inserted
for the convenience of reference only. Section and subsection
headings shall not be deemed to be a part of this Waiver and Release Agreement
for any purpose, and they shall not in any way define or affect the meaning,
construction or scope of any of the provisions hereof.
IN
WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the day
and year first herein above written.
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EXECUTIVE:
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[NAME
OF EXECUTIVE]
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EXHIBIT
10.2
SEPARATION
AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General
Release (the “Agreement”) is made and
entered as of this 9th day of
January, 2010 (the “Effective
Date”), by and among Colfax Corporation, a Delaware corporation (“Colfax” or the “Company”), and John A. Young
(hereinafter “Mr.
Young”).
WHEREAS, Mr. Young has served
Colfax as its President, Chief Executive Officer, and as a member of its Board
of Directors;
WHEREAS, Mr. Young and Colfax
are parties to an Executive Employment Agreement dated April 29, 2008, as
amended by the Amendment thereto entered into effective as of January 1, 2010
(the “Executive Employment
Agreement”); and
WHEREAS, Mr. Young and Colfax
have agreed that Mr. Young will terminate his employment relationship and resign
from all positions with Colfax, and all of its respective directly and
indirectly owned subsidiaries and affiliates, including all employment, officer
and board of directors and other positions, under the terms and conditions of
this Agreement.
NOW, THEREFORE, AND IN
CONSIDERATION of the mutual promises of the parties to this Agreement,
the receipt and sufficiency of which are hereby acknowledged, the parties agree
as follows:
1. Resignation From and
Termination of Employment. Mr. Young hereby resigns from
employment with Colfax and all of its directly and indirectly owned subsidiaries
and affiliates, and resigns from all the offices, directorships and other
positions he holds with Colfax and all of its directly and indirectly owned
subsidiaries and affiliates, including without limitation his positions as
President and Chief Executive Officer of Colfax and his position as a member of
the Board of Directors of Colfax, effective as of January 9, 2010 (the “Resignation
Date”). After the Resignation Date, Mr. Young shall not be
entitled to the receipt of any further payments or benefits from Colfax other
than those expressly provided for in this Agreement. The parties
hereto agree that this Agreement constitutes written notice to Colfax of Mr.
Young’s resignation from the Board. The parties further agree that no
additional amount shall be payable to Mr. Young on account of his resignation
under the Executive Employment Agreement.
2. Termination
Payments. Provided Mr. Young executes the General Release
Agreement described in Section 5 of this Agreement, Mr. Young shall receive the
following payments and benefits under this Agreement. The date Mr.
Young executes such General Release Agreement shall be referred to as the “General Release Effective
Date”.
(a) Compensation and
Benefits.
(i) Mr.
Young shall receive a lump sum payment of $1,265,842 within 10 business days of
the General Release Effective Date.
(ii)
Mr. Young shall receive
$300,000, payable 30 days following settlement or initial adjudication of the
Company’s insurance coverage trial in the New Jersey Superior Court, currently
in Mercer County, but in no event later than March 15, 2011.
(b) Health
Coverage. At the Company’s expense, Mr. Young and his spouse
and dependent children shall be entitled to continuation of health insurance
coverage (i.e., medical, dental and vision) under the Company’s group health
plan(s) in which Mr. Young was participating on the Effective Date of this
Agreement for a period of one (1) year from the Effective Date.
(c) Equity
Grants.
(i)
Stock
Options. As of the Effective Date, Mr. Young shall become
fully and immediately vested in 50,403 of Colfax employee stock options granted
under the Colfax Corporation 2008 Omnibus Incentive Plan (the “Stock Incentive Plan”) to Mr.
Young on March 13, 2009 and which otherwise would have vested on March 13, 2010,
in 50,403 of Colfax employee stock options granted under the Stock Incentive
Plan on March 13, 2009 and which otherwise would have vested on March 13, 2011,
and in 20,833 of Colfax employee stock options granted under the Stock Incentive
Plan on May 7, 2008 and which otherwise would have vested on May 7,
2010. Furthermore, all of Mr. Young’s outstanding vested Colfax
employee stock options, whether previously vested or becoming vested pursuant to
this Section 2(c)(i), shall be exercisable until March 31, 2012, notwithstanding
any otherwise applicable provision in the award agreement providing for
expiration of such stock options on the 90th day
after the date of termination of employment. For the avoidance of
doubt, the Company’s records indicate that 20,834 employee stock options were
previously vested without regard to this Section 2(c)(i).
(ii)
Performance-Based Stock
Units. Mr. Young’s 25,000 Colfax employee stock
units granted under the Stock Incentive Plan on May 7, 2008 subject to
performance criteria, which already have been achieved, and currently unvested
based on additional service vesting criteria, shall, as of the Effective Date of
this Agreement, become fully and immediately vested. With respect to
such stock units becoming vested, the Company will withhold from the shares
deliverable to Mr. Young the number of shares necessary to satisfy the minimum
statutory federal and state tax withholding requirements which the Company
determines are applicable in connection with such vesting and issuance of common
stock of the Company.
3. Accrued
Benefits. As of his Resignation Date, Mr. Young’s
participation in the benefits programs of Colfax shall terminate in accordance
with the terms of Colfax’s benefits plans and its standard policies and
procedures, except that: (A) subject to Section 2(b), Mr. Young may
elect to continue the health insurance coverage that he had maintained as an
employee pursuant to the Consolidated Omnibus Budget Reconciliation Act as
amended (“COBRA”); (B) Mr. Young shall be entitled to payment of his pension and
retirement savings benefits accrued under the Retirement Plan for Salaried US
Employees of Imo Industries, Inc. and Affiliates, the Colfax Corporation Excess
Benefit Plan and the Colfax Corporation 401(k) Savings Plan Plus at the time and
in the form elected under the applicable plan; (C) Mr. Young’s 49,933 shares of
Colfax common stock granted on May 7, 2008 that remain subject to the Deferred
Delivery Stock Ownership Agreement between Mr. Young and Colfax (the “Stock Ownership Agreement”)
shall be delivered within 10 business days of the General Release Effective
Date; (D) Mr. Young shall be entitled to indemnification as provided in the
Indemnification Agreement he entered into with the Company at the time of the
Company’s initial public offering; and (E) Colfax shall reimburse Mr. Young for
appropriate and reasonable expenses incurred on or before the Resignation Date,
if any, in accordance with the applicable policies and
procedures.
2
4. Effect on Other Agreements,
Ongoing Obligations.
(a) Section
6 of the Executive Employment Agreement (Confidentiality, Non-Competition and
Non-Disclosure; Executive Cooperation; and Non-Disparagement) is incorporated
herein by reference and shall remain in full force and effect in accordance with
its terms, except that Sections 6.2 and 6.3 shall be revised to provide as
follows:
6.2 Noncompetition. During
the term of this Agreement (including any extensions thereof) and for a period
of one (1) year following the termination of the Executive's employment under
this Agreement for any reason, the Executive shall not, except with the
Company's express prior written consent, for the benefit of any entity or person
(including the Executive) compete with the Business (as hereinafter defined)
within the Territory. For purposes of this Agreement, “Business”
shall mean a company involved in the manufacture and sale of pumps, valves or
fluid handling systems of the kind that are produced by the Company or that are
competitive with the pumps, valves or fluid handling systems that are produced
by the Company. For purposes of this Agreement, “Territory” shall
mean the United States of America.
6.3 Non-Solicitation. During
the term of this Agreement (including any extension thereof) and for a period of
three (3) years following the termination of the Executive’s termination under
this Agreement for any reason, the Executive shall not, except with the
Company’s express prior written consent, for the benefit of any entity or person
(including the Executive) solicit, induce or encourage any employee of the
Company, or any of its subsidiaries, to leave the employment of the Company or
solicit, induce or encourage any customer, or client of the Company, or any of
its subsidiaries, to cease or reduce its business with the Company or its
subsidiaries.
3
(b) Mr.
Young agrees to provide reasonable cooperation in the preparation of all Colfax
Securities and Exchange Commission filings through the first fiscal quarter of
2010, including the provision of any internal certifications that the Company
may reasonably request relating to Colfax’s internal controls, results of
operations and financial condition for the periods prior to the Effective Date,
in a form similar to the certification attached hereto as Exhibit
A. Further, Mr. Young understands and agrees that his ongoing
obligations under Section 6.4 of the Executive Employment Agreement specifically
include, but are not limited to, providing testimony and other assistance that
may be requested in connection with pending asbestos-related insurance coverage
disputes. Consistent with Section 6.4 of the Executive Employment
Agreement, all expenses paid by Mr. Young in complying with this Section 4(b)
shall be promptly reimbursed to Mr. Young upon submission to the
Company.
(c) Except
to the extent otherwise expressly provided in this Agreement, the Company’s
obligations to Mr. Young under the Executive Employment Agreement shall be
deemed satisfied and cancelled.
5. General
Release. In consideration of the payments described in Section
2 of this Agreement, Mr. Young agrees to execute a General Release Agreement at
the time he executes this Agreement in exactly the form attached hereto as Exhibit B, the terms and
conditions of which are specifically incorporated herein by
reference. If Mr. Young breaches this commitment, then the Company
shall be released from any further obligation to perform hereunder (including,
but not limited to, any obligation to make any further payments to or for the
benefit of Mr. Young pursuant to Section 2).
6 No Other
Consideration. Mr. Young affirms that the terms stated herein
are the only consideration for signing this Agreement and that no other
representations, promises, or agreements of any kind have been made by any
person or entity to cause him to sign this Agreement. Mr. Young has
accepted the terms of this Agreement because he believes them to be fair and
reasonable and for no other reason.
7. No
Admission. It is understood and agreed by all parties that
this Agreement does not constitute an admission of liability or wrongdoing on
the part of Colfax and that by entering into this Agreement Colfax does not
admit that there has been any wrongdoing whatsoever against any person or
entity, and it expressly denies that any wrongdoing has occurred. It
is understood and agreed by all parties that this Agreement is purely an offer
of compromise.
8. Death. In
the event of Mr. Young’s death (regardless of whether occurring on or prior to
the Resignation Date), the Company shall provide any benefits and payments set
forth in Section 2 that have not previously been paid to Mr. Young (including
the right of such beneficiary to exercise any unexercised stock options) to the
beneficiary designated by Mr. Young in writing (which designation, where
applicable, shall be effected in accordance with the terms and conditions of the
applicable plan documents and procedures) or, if no such beneficiary shall be
named or be living at the time of his death, to his estate.
9. Withholding. All
compensation-related payments to be made to Mr. Young under this Agreement, or
otherwise by Colfax, shall be subject to withholding to satisfy required
withholding taxes and other required deductions.
4
10. Modification. This
Agreement may not be released, discharged, abandoned, supplemented, changed, or
modified in any manner, orally or otherwise, except by an instrument in writing
signed and duly executed by each of the parties hereto.
11. Entire
Agreement. This Agreement contains and constitutes the entire
understanding and agreement between the parties on its subject matter, and,
except as otherwise provided herein, it supersedes and cancels all previous
negotiations, agreements, commitments, and writings in connection
herewith. If a conflict or inconsistency is found between the terms
of this Agreement and any other agreement, the terms of this Agreement shall
prevail.
12. Waiver. Failure
to insist upon strict compliance with any term, covenant, or condition of this
Agreement shall not be deemed a waiver of such term, covenant, or condition, nor
shall any waiver or relinquishment of any right or power under this Agreement at
any time or times be deemed a waiver or relinquishment of such right or power at
any other time or times.
13. Severability. Invalidity
or unenforceability of any provision of this Agreement shall in no way affect
the validity of enforceability of any other provision.
14. Assignability. Colfax
may, without the consent of Mr. Young, assign its rights and obligations under
this Agreement to any successor entity.
15. Choice of Law and Dispute
Resolution. The terms of this Agreement shall be governed by
the laws of the Commonwealth of Virginia. Any dispute or other
controversy arising from this Agreement shall be resolved in accordance with the
provisions of Sections 6.7 and 7 of the Executive Employment Agreement, which
are incorporated herein by reference.
16. Counterparts. This
Agreement may be executed in two or more counterparts, each of which shall be
deemed to be an original, but all of which together will constitute one and the
same Agreement.
17. Acknowledgements. Mr.
Young hereby acknowledges that he has carefully read and fully understands the
provisions of this Agreement, including the General Release Agreement, that he
has had the opportunity to fully discuss it with counsel, and that he knows the
contents
of the Agreement. Mr. Young further acknowledges that he is signing
this Agreement voluntarily and without coercion because he believes it is fair
and reasonable and for no other reason.
5
IN WITNESS WHEREOF, the undersigned
have executed this Agreement as of the date set forth below.
|
COLFAX
CORPORATION
|
|
|
By:
|
/s/ Steven W.
Weidenmuller
|
|
Name:
Steven W. Weidenmuller
|
|
|
Title:
Senior Vice President, Human Resources
|
|
|
Date:
January 9, 2010
|
|
|
JOHN
A. YOUNG
|
|
|
/s/ John A. Young
|
|
|
Date:
January 9, 2010
|
|
6
EXHIBIT
A
CERTIFICATION
I hereby certify that I have read the
[Annual Report on Form 10-K][Quarterly Report on Form 10-Q] and that no facts
have come to my attention that cause me to believe that the Chief Executive
Officer of Colfax Corporation should not sign the certifications required under
Section 302 and Section 906 of the Sarbanes-Oxley Act of 2002.
|
Dated:
|
|
|
|
|
|
John
A. Young
|
EXHIBIT
B
GENERAL
RELEASE AGREEMENT
THIS GENERAL RELEASE AGREEMENT is
entered into as of January 9, 2010 (the “Effective Date”), by John A.
Young (the “Executive”)
in consideration of the severance pay provided to the Executive by Colfax
Corporation (the “Company”) pursuant to the
Separation Agreement and General Release (the “Employment Agreement”) by and
between the Company and the Executive (the “Severance
Payment”).
1. General
Release. The Executive, on
his own behalf and on behalf of his heirs, executors, administrators, attorneys
and assigns, to the fullest extent permitted by law, hereby unconditionally and
irrevocably releases, waives and forever discharges the Company and each of its
affiliates, parents, successors, predecessors, and the subsidiaries, directors,
owners, members, shareholders, officers, agents, and employees of the Company
and its affiliates, parents, successors, predecessors, and subsidiaries
(collectively, all of the foregoing are referred to as the “Employer”), from any and all
causes of action, claims and damages, including attorneys’ fees, whether known
or unknown, foreseen or unforeseen, presently asserted or otherwise arising
through the date of his signing of the General Release Agreement, concerning his
employment or separation from employment. This release includes, but
is not limited to, any claim or entitlement to salary, bonuses (but not
including payment of any remaining bonus under the Employment Agreement), any
other payments, benefits or damages arising under any federal law (including,
but not limited to, Title VII of the Civil Rights Act of 1964, the Americans
with Disabilities Act, Executive Order 11246, the Family and Medical Leave Act,
and the Worker Adjustment and Retraining Notification Act, each as amended); any
claim arising under any state or local laws, ordinances or regulations
(including, but not limited to, any state or local laws, ordinances or
regulations requiring that advance notice be given of certain workforce
reductions); and any claim arising under any common law principle or public
policy, including, but not limited to, all suits in tort or contract, such as
wrongful termination, defamation, emotional distress, invasion of privacy or
loss of consortium.
The Executive understands that by
signing this General Release Agreement he is not waiving any claims or
administrative charges. He is waiving, however, any right to monetary
recovery or individual relief should any federal, state or local agency
(including the Equal Employment Opportunity Commission) pursue any claim on his
behalf arising out of or related to his employment with and/or separation from
employment with the Company.
The Executive further agrees without
any reservation whatsoever, never to sue the Employer or become a party to a
lawsuit on the basis of any and all claims of any type lawfully and validly
released in this General Release Agreement.
2. Acknowledgments. The Executive is
signing this General Release Agreement knowingly and voluntarily. He
acknowledges that:
(a) He
is hereby advised in writing to consult an attorney before signing this General
Release Agreement;
(b) He
has relied solely on his own judgment and/or that of his attorney regarding the
consideration for and the terms of this General Release Agreement and is signing
this General Release Agreement knowingly and voluntarily of his own free
will;
(c) He
is not entitled to the Severance Payment unless he agrees to and honors the
terms of this General Release Agreement;
(d) He
has read and understands the General Release Agreement and further understands
that it includes a general release of any and all known and unknown, foreseen or
unforeseen claims presently asserted or otherwise arising through the date of
his signing of this General Release Agreement that he may have against the
Employer; and
(e) No
statements made or conduct by the Employer has in any way coerced or unduly
influenced him to execute this General Release Agreement.
3. No
Admission of Liability. This General
Release Agreement does not constitute an admission of liability or wrongdoing on
the part of the Employer, the Employer does not admit there has been any
wrongdoing whatsoever against the Executive, and the Employer expressly denies
that any wrongdoing has occurred.
4. Entire
Agreement. There are no
other agreements of any nature between the Employer and the Executive with
respect to the matters discussed in this General Release Agreement, except as
expressly stated herein, and in signing this General Release Agreement, the
Executive is not relying on any agreements or representations, except those
expressly contained in this General Release Agreement.
5. Execution. It is not
necessary that the Employer sign this General Release Agreement following the
Executive's full and complete execution of it for it to become fully effective
and enforceable.
6. Severability. If any provision
of this General Release Agreement is found, held or deemed by a court of
competent jurisdiction to be void, unlawful or unenforceable under any
applicable statute or controlling law, the remainder of this General Release
Agreement shall continue in full force and effect.
7. Governing
Law. This General
Release Agreement shall be governed by the laws of the State of Delaware,
excluding the choice of law rules thereof.
8. Headings. Section and
subsection headings contained in this General Release Agreement are inserted for
the convenience of reference only. Section and subsection headings
shall not be deemed to be a part of this General Release Agreement for any
purpose, and they shall not in any way define or affect the meaning,
construction or scope of any of the provisions hereof.
2
IN
WITNESS WHEREOF, the undersigned has duly executed this Agreement as of the day
and year first herein above written.
|
EXECUTIVE:
|
|
/s/ John A. Young
|
|
JOHN
A. YOUNG
|
3
EXHIBIT 99.1
 |
|
Colfax
Corporation
|
|
8730
Stony Point Parkway
|
||
|
Suite
150
|
||
|
Richmond,
VA 23235
|
||
|
USA
|
||
|
Tel: (804)
560-4070
|
||
|
Fax: (804)
560-4076
|
||
|
www.colfaxcorp.com
|
|
FOR IMMEDIATE RELEASE
|
|
|
CONTACT:
|
|
|
Mitzi
Reynolds
|
|
|
(804)
327-5689
|
|
|
mitzi.reynolds@colfaxcorp.com
|
COLFAX
NAMES BOARD MEMBER CLAY KIEFABER
PRESIDENT
AND CHIEF EXECUTIVE OFFICER, SUCCEEDING JOHN YOUNG
Company
Reaffirms 2009 Earnings and Sales Guidance
Richmond, VA, January 11, 2010 –
Colfax Corporation (NYSE: CFX), a global leader in fluid-handling
solutions for critical applications, today announced that Clay H. Kiefaber has
been named President and Chief Executive Officer effective today, succeeding
John A. Young in these positions. Kiefaber spent nearly 20 years in
increasingly senior executive positions at Masco Corporation and has served on
the Colfax Board of Directors since the Company’s IPO in 2008. Young,
who has been with Colfax since 1995 and has served as President and CEO since
2000, has also resigned from the Colfax Board and is expected to remain an
advisor to the Company.
Kiefaber,
54, has extensive experience in strategic planning, lean manufacturing, business
integration, and leadership development across several
industries. Most recently, he was a Group President at Masco, where
he was responsible for a $2.8 billion group of architectural coatings, windows,
and spa business units. Under his direction, the group’s operating
income and cash flow increased significantly. Prior to becoming a Group
President at Masco, Kiefaber was Group Vice President of Masco Builder Cabinet
Group. He previously spent 14 years in increasingly senior positions
in Masco’s Merillat Industries subsidiary, where, as President, he achieved
record revenues, industry-leading margins, developed the leading brand in the
industry, and won awards for manufacturing excellence.
Mitchell
P. Rales, Chairman of the Board of Directors of Colfax, said, “I have known Clay
Kiefaber for over 20 years, and he is an extremely talented and proven leader
with a superb track record. He is also passionate about the same core
values that Colfax embraces and is committed to driving the Colfax Business
System throughout the organization. We are fortunate he has agreed to lead the
Company in the next phase of its growth. As a member of our Board,
Clay already has a deep understanding of our businesses, and under his direction
Colfax will continue to pursue both organic growth initiatives and strategic
acquisitions. The Board and I look forward to working with him in his new role
as we continue to position Colfax to take full advantage of its many
opportunities.”
Rales
added, “On behalf of the Board, I want to acknowledge the many contributions
John Young has made over the years and the major role he has played in the
Company’s growth since its inception. We thank him for his dedicated
service and wish him continued success in his future endeavors.”
Young
said, “I am very proud of where Colfax is today and what we have accomplished
over the last 14 years. I look forward to pursuing other professional
opportunities with the confidence that Colfax will enjoy continued success for
many years to come.”
Kiefaber
said, “Colfax has a tremendous product portfolio, industry-leading application
expertise, a strong balance sheet, and is well positioned for long-term
growth. I look forward to working closely with the Board and
leadership team as we work hard to build Colfax into a world-class company in
the years ahead.”
Kiefaber
holds an M.B.A. degree from the University of Colorado and a B.A. degree from
Miami University.
Outlook
Colfax
also reaffirmed its previous 2009 guidance of adjusted earnings per share of
$0.88 to $0.94 and organic sales decline of 8% to 10%. See below for
a discussion of these non-GAAP financial measures.
Conference
Call and Webcast
Colfax
will host a conference call to discuss this announcement today at 9:00 a.m.
ET. The call will be open to the public through (877) 218-1796 or
(706) 679-2386 by entering the following conference ID: 49440740. The
call will also be available via webcast at Colfax's website:
http://www.colfaxcorp.com under the "Investor Relations" section. The
audio of this call will be archived on the website later today and will be
available for 30 days.
Non-GAAP
Financial Measures
Colfax
has provided in this press release estimated adjusted earnings per share and
organic sales growth (decline) for 2009 that have not been prepared in
accordance with GAAP. Adjusted earnings per share exclude actual and estimated
restructuring and other related charges, asbestos coverage litigation expenses
and asbestos liability and defense costs. Organic sales growth (decline)
excludes the impact of acquisitions and foreign exchange rate
fluctuations. These non-GAAP financial measures assist Colfax in
comparing its operating performance on a consistent basis because, among other
things, it removes the impact of changes in our capital structure and asset
base, non-recurring items such as legacy asbestos issues and items outside the
control of its operating management team.
Non-GAAP
financial measures should not be considered in isolation from, or as a
substitute for, financial information calculated in accordance with GAAP.
Investors are encouraged to review the reconciliation of non-GAAP measures to
their most directly comparable GAAP financial measures. A reconciliation of the
non-GAAP financial measures presented above to the comparable GAAP measures have
been provided in the financial tables included in this press
release.
About
Colfax Corporation
Colfax
Corporation is a global leader in critical fluid-handling products and
technologies. Through its global operating subsidiaries, Colfax manufactures
positive displacement industrial pumps and valves used in oil & gas, power
generation, commercial marine, global naval and general industrial markets.
Colfax’s operating subsidiaries supply products under the well-known brands
Allweiler, Fairmount Automation, Houttuin, Imo, LSC, Portland Valve, Tushaco,
Warren and Zenith. Colfax is traded on the NYSE under the ticker “CFX.”
Additional information about Colfax is available at www.colfaxcorp.com.
Cautionary
Note Concerning Forward-Looking Statements
This
press release may contain forward-looking statements, including forward-looking
statements within the meaning of the U.S. Private Securities Litigation Reform
Act of 1995. Such forward-looking statements include, but are not limited to,
statements concerning Colfax’s plans, objectives, expectations and intentions
and other statements that are not historical or current facts. Forward-looking
statements are based on Colfax’s current expectations and involve risks and
uncertainties that could cause actual results to differ materially from those
expressed or implied in such forward-looking statements. Factors that could
cause Colfax’s results to differ materially from current expectations include,
but are not limited to factors detailed in Colfax’s reports filed with the U.S.
Securities and Exchange Commission as well as its Annual Report on Form 10-K
under the caption “Risk Factors”. In addition, these statements are based on a
number of assumptions that are subject to change. This press release
speaks only as of this date. Colfax disclaims any duty to update the information
herein.
The term
“Colfax” in reference to the activities described in this press release may mean
one or more of Colfax's global operating subsidiaries and/or their internal
business divisions and does not necessarily indicate activities engaged in by
Colfax Corporation.
Colfax
Corporation
Reconciliation
of Estimated 2009 Net Income Per Share to Adjusted Net Income Per
Share
Amounts
in Dollars
(unaudited)
|
EPS Range
|
||||||||
|
Estimated
net income per share - fully diluted
|
$ | 0.46 | $ | 0.52 | ||||
|
Restructuring
and other related charges incurred as of October 2, 2009
|
0.17 | 0.17 | ||||||
|
Estimated
fourth quarter restructuring and other related charges (1)
|
0.06 | 0.06 | ||||||
|
Asbestos
coverage litigation
|
0.19 | 0.19 | ||||||
|
Asbestos
liability and defense costs (2)
|
0.00 | 0.00 | ||||||
|
Estimated
adjusted net income per share - fully diluted
|
$ | 0.88 | $ | 0.94 | ||||
|
1
|
Represents
estimated costs related to restructuring and other related charges
implemented through November 3, 2009. Additional costs for
actions implemented subsequent to this date through December 31, 2009 are
expected to range from $.05 and $.07 per
share.
|
|
2
|
Updated
as of November 16, 2009, the filing date of our Form 10-Q for the period
ended October 2, 2009, to include the impact of the favorable court ruling
on October 14, 2009 net of the revaluation of the Company's 15-year
estimate for asbestos-related
liabilities.
|
Colfax
Corporation
Sales
Change
(amounts
in millions)
(unaudited)
|
Sales
Range
|
||||||||||||||||
|
$
|
%
|
$
|
%
|
|||||||||||||
|
For
the year ended December 31, 2008
|
$ | 605 | $ | 605 | ||||||||||||
|
Components
of change:
|
||||||||||||||||
|
Existing
businesses – estimated
|
(59 | ) | -10 | % | (49 | ) | -8 | % | ||||||||
|
Acquisitions
– estimated
|
1 | 0 | % | 1 | 0 | % | ||||||||||
|
Foreign
currency translation –estimated
|
(32 | ) | -5 | % | (32 | ) | -5 | % | ||||||||
|
Total
– estimated
|
(90 | ) | -15 | % | (80 | ) | -13 | % | ||||||||
|
Estimated
for the year ended December 31, 2009
|
$ | 515 | $ | 525 | ||||||||||||