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EXHIBIT 10.9
OFFICER'S EMPLOYMENT AGREEMENT
Amended and Restated
THIS AGREEMENT, is made and entered into as of this ___ day of ________,
by and between KENNAMETAL INC., a corporation organized under the laws of the
Commonwealth of Pennsylvania (hereinafter referred to as "Kennametal" or the
"Corporation"), for and on behalf of itself and on behalf of its subsidiary
companies, and _________________ an individual (hereinafter referred to as
"Employee").
WITNESSETH:
WHEREAS, Employee acknowledges that by reason of employment by Kennametal,
it is anticipated that Employee will work with, add to, create, have access to
and be entrusted with trade secrets and confidential information belonging to
Kennametal which are of a technical nature or business nature or pertain to
future developments, the disclosure of which trade secrets or confidential
information would be highly detrimental to the interests of Kennametal; and
WHEREAS, in order to have the benefit of Employee's assistance, Kennametal
is desirous of employing or continuing the employment of Employee; and
WHEREAS, Kennametal and Employee have heretofore entered into and executed
an Officer Employment Agreement, as amended (the "Employment Agreement"); and
WHEREAS, Kennametal and Employee desire to amend and restate the Employment
Agreement on the terms and conditions hereinafter expressed.
NOW, THEREFORE, Kennametal and Employee, each intending to be legally bound
hereby, do mutually covenant and agree as follows:
1. (a) Subject to the terms and conditions set forth herein, Kennametal hereby
agrees to employ Employee as of the date hereof, and Employee hereby accepts
such employment and agrees to devote his full time and attention to the
business and affairs of Kennametal, in such capacity or capacities and to
perform to the best of his ability such services as shall be determined from
time to time by the Chief Executive Officer and the Board of Directors of
Kennametal until the termination of his employment hereunder.
(b) Employee's base salary, the size of bonus awards, if any, granted to him
and other emoluments for his services, if any, shall be determined by the
Board of Directors or its Committee on Executive Compensation, as
appropriate, from time to time in their sole discretion.
2. In addition to the compensation set forth or contemplated elsewhere herein,
Employee, subject to the terms and conditions of this agreement, shall be
entitled to participate in all group insurance programs, retirement income
(pension) plans, thrift plans and vacation and holiday programs normally
provided for other executives of Kennametal. Nothing herein contained shall be
deemed to limit or prevent Employee, during his employment hereunder, from being
reimbursed by Kennametal for out-of-pocket expenditures incurred for travel,
lodging, meals, entertainment expenses or any other expenses in accordance with
the policies of Kennametal applicable to the executives of Kennametal.
3. Employee's employment may be terminated with or without any reason for
termination by either party hereto at any time by giving the other party prior
written notice thereof, provided, however, that any termination on the part of
Kennametal shall occur only if specifically authorized by its Board of
Directors; provided, further, that termination by Kennametal for Cause (as
hereinafter defined) shall be made by written notice which states that it is a
termination for Cause; and provided, further, that termination by Employee,
other than termination for Good Reason (as hereafter defined) following a
Change-in-Control (as hereafter defined), shall be on not less than 30 days
prior written notice to Kennametal.
4. (a) In the event that Employee's employment is terminated by Kennametal prior
to a Change-in-Control (as hereinafter defined) and other than for Cause,
Employee will receive as severance pay, in
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addition to all amounts due him at the Date of Termination (as hereinafter
defined), an amount, payable promptly after the Date of Termination, equal to
three months' base salary at the annual rate in effect on the Date of
termination.
(b) In the event that Employee's employment is terminated (i) due to the
death of the Employee or (ii) by Employee following a Change-in-Control (as
hereafter defined) without Good Reason (as such term in defined in paragraph
4(h)) or prior to a Change-in-Control (as hereinafter defined), Employee will
not be entitled to receive any severance pay in addition to the amounts, if
any, due him at the Date of Termination (as hereinafter defined).
(c) In the event at or after a Change-in-Control and prior to the third
anniversary of the date of the Change-in-Control that Employee's employment
is terminated by Employee for Good Reason or by Kennametal other than for
Cause or Disability pursuant to paragraph 5, Employee will receive as
severance pay (in addition to all other amounts due him at the Date of
Termination) an amount equal to the product of:
(i) the lesser of
(x) two and eight tenths (2.8),
(y) a number equal to the number of calendar months remaining
from the Date of Termination to the Employee's Retirement Date
(as such term is hereafter defined) divided by twelve (12), or
(z) a number equal to the product obtained by multiplying thirty-
six (36) less the number of completed months after the date of
the Change-in-Control during which the Employee was employed and
did not have Good Reason for termination times one-twelfth
(1/12);
times
(ii) the sum of
(x) Employee's base salary at the annual rate in effect on the
Date of Termination (or, at Employee's election, at the annual
rate in effect on the first day of the calendar month immediately
prior to the Change-in-Control), plus
(y) the average of any bonuses which Employee was entitled to or
paid during the three most recent fiscal years ending prior to
the Date of Termination.
Such severance pay shall be paid by delivery of a cashier's or
certified check to the Employee at Kennametal's executive offices on a date
which is no later than five business days following the Date of
Termination.
In addition to the severance payments provided for in this paragraph
4(c), Employee also will receive the same or equivalent medical, dental,
disability and group insurance benefits as were provided to the Employee at
the Date of Termination, which benefits shall be provided to Employee for a
three year period commencing on the Date of Termination. The Employee shall
also be deemed and shall be credited for computing benefits, for vesting
and for all other purposes under any pension or retirement income plan of
Kennametal and under the Supplemental Executive Retirement Plan to have
continuously remained in the employment of Kennametal for the three year
period (or, if clause (i)(y) or clause (i)(z) above of this paragraph 4(c)
is applicable to determine the severance payments to be made, the lesser
period measured in years equal to clause (i)(y) or clause (i)(z) above,
whichever is applicable) following the Date of Termination at an annual
compensation equal to the sum of the base salary and bonus which were used
to compute the payment due the Employee under the first paragraph of this
Paragraph 4(c).
(d) If for any reason, whether by law or provisions of Kennametal's
employee medical, dental or group insurance, pension or retirement plan or
other benefit plans, any benefits which the Employee would be entitled to
under the foregoing subparagraph (c) of this Paragraph 4 cannot be paid
pursuant to such employee benefit plans, then Kennametal hereby
contractually agrees to pay to the Employee the difference between the
benefits which the Employee would have received in accordance with the
foregoing subparagraphs of this paragraph 4 if the relevant employee
medical, dental or group insurance or pension or retirement plan or other
benefit plan could have paid such benefit and the amount of
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benefits, if any, actually paid by such employee medical, dental or group
insurance or pension or retirement plan or other benefit plan. Kennametal
shall not be required to fund its obligation to pay the foregoing
difference.
(e) In the event of a termination of employment under the circumstances
above described in Paragraph 4(c), Employee shall have no duty to seek any
other employment after termination of Employee's employment with Kennametal
and Kennametal hereby waives and agrees not to raise or use any defense
based on the position that Employee had a duty to mitigate or reduce the
amounts due him hereunder by seeking other employment whether suitable or
unsuitable and should Employee obtain other employment, then the only
effect of such on the obligations of Kennametal hereunder shall be that
Kennametal shall be entitled to credit against any payments which would
otherwise be made for medical, dental or group insurance or similar
benefits (excluding, however, any credit against Kennametal payments
relating to pension or retirement benefits or the Supplemental Executive
Retirement Plan) pursuant to the benefit provisions set forth in the second
paragraph of Paragraph 4(c) hereof, any comparable payments to which
Employee is entitled under the employee benefit plans maintained by
Employee's other employer or employers in connection with services to such
employer or employers after termination of his employment with Kennametal.
(f) The term "Change-in-Control" shall mean a change in control of a nature
that would be required to be reported in response to Item 6(e) of Schedule
14A promulgated under the Securities Exchange Act of 1934 as in effect on
the date hereof ("1934 Act"), or if Item 6(e) is no longer in effect, any
regulations issued by the Securities and Exchange Commission pursuant to
the 1934 Act which serve similar purposes; provided that, without
limitation, such a change in control shall be deemed to have occurred if
(A) Kennametal shall be merged or consolidated with any corporation or
other entity other than a merger or consolidation with a corporation or
other entity all of whose equity interests are owned by Kennametal
immediately prior to the merger or consolidation, or (B) Kennametal shall
sell all or substantially all of its operating properties and assets to
another person, group of associated persons or corporation, or (C) any
"person" (as such term is used in Sections 13(d) and 14(d) of the 1934
Act), is or becomes a beneficial owner, directly or indirectly, of
securities of Kennametal representing 25% or more of the combined voting
power of Kennametal's then outstanding securities coupled with or followed
by the existence of a majority of the board of directors of Kennametal
consisting of persons other than persons who either were directors of
Kennametal immediately prior to or were nominated by those persons who were
directors of Kennametal immediately prior to such person becoming a
beneficial owner, directly or indirectly, of securities of Kennametal
representing 25% or more of the combined voting power of Kennametal's then
outstanding securities.
(g) For purposes of this agreement "Date of Termination" shall mean:
(i) if Employee's employment is terminated due to his death or
retirement, the date of death or retirement, respectively; or
(ii) if Employee's employment is terminated for any other reason, the
date on which the termination becomes effective as stated in the
written notice of termination given to or by the Employee.
(h) The term "Good Reason" for termination by the Employee shall mean the
occurrence of any of the following at or after a Change-in-Control:
(i) without the Employee's express written consent, the assignment to
the Employee of any duties materially and substantially inconsistent
with his positions, duties, responsibilities and status with
Kennametal immediately prior to a Change-in-Control, or a material
change in his reporting responsibilities, titles or offices as in
effect immediately prior to a Change-in-Control, or any removal of the
Employee from or any failure to re-elect the Employee to any of such
positions, except in connection with the termination of the Employee's
employment due to Cause (as hereinafter defined) or as a result of the
Employee's death;
(ii) a reduction by Kennametal in the Employee's base salary as in
effect immediately prior to any Change-in-Control;
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(iii) a failure by Kennametal to continue to provide incentive
compensation, under the rules by which incentives are provided,
comparable to that provided by Kennametal immediately prior to any
Change-in-Control;
(iv) the failure by Kennametal to continue in effect any benefit or
compensation plan, stock option plan, pension plan, life insurance
plan, health and accident plan or disability plan in which Employee is
participating immediately prior to a Change-in-Control (provided,
however, that there shall not be deemed to be any such failure if
Kennametal substitutes for the discontinued plan, a plan providing
Employee with substantially similar benefits) or the taking of any
action by Kennametal which would adversely affect Employee's
participation in or materially reduce Employee's benefits under any of
such plans or deprive Employee of any material fringe benefit enjoyed
by Employee immediately prior to a Change-in-Control;
(v) the failure of Kennametal to obtain the assumption of this
Agreement by any successor as contemplated in paragraph 11 hereof;
(vi) the relocation of the Employee to a facility or a location more
than 50 miles from the Employee's then present location, without the
Employee's prior written consent; or
(vii) any purported termination of the employment of Employee by
Kennametal which is not for Cause as provided in paragraph 5.
5. In the event that Employee (a) shall be guilty of malfeasance, willful
misconduct or gross negligence in the performance of the services contemplated
by this agreement, or (b) shall not make his services available to Kennametal on
a full time basis in accordance with paragraph 1 hereof for any reason
(including Disability) other than arising from Employee's incapacity due to
physical or mental illness or injury which does not constitute Disability and
other than by reason of the fact Employee's employment has been terminated under
the circumstances described in paragraph 4(a), or (c) shall breach the
provisions of paragraph 8 hereof (the matters described in subparagraphs (a),
(b) and (c) are collectively referred to as "Cause"), Kennametal shall have the
right, exercised by resolution adopted by a majority of its Board of Directors,
to terminate Employee's employment for Cause by giving prior written notice to
Employee of its election so to do. In that event, Employee's employment shall be
deemed terminated for Cause, Employee shall not be entitled to the benefits set
forth in paragraph 4 which shall not be paid or payable and Kennametal only
shall have the obligation to pay Employee the unpaid portion of Employee's base
salary for the period from the last period from which Employee was paid to the
Date of Termination; provided, however, that if Employee's employment is
terminated as a result of the Disability of Employee, the benefits set forth in
paragraph 4 shall not be paid or payable but Employee shall be entitled to
receive the annual supplement under the Supplemental Executive Retirement Plan
and Employee's employment by Kennametal shall not be deemed terminated for
purposes of the Long-Term Disability Plan, Retirement Income Plan for US
Salaried Employees or any other benefit plan which so provides. For purposes of
this agreement "Disability" shall mean such incapacity due to physical or mental
illness or injury which results in the Employee's being absent from his
principal office at Kennametal's offices for the entire portion of 180
consecutive business days. Prior to a Change-in-Control, a decision by the Board
of Directors of Kennametal that "Cause" exists shall be in the discretion of the
Board of Directors and shall be final and binding upon the Employee and his
rights hereunder. After a Change-in-Control, "Cause" shall not be deemed to
include opposition by Employee to such a Change-in-Control or any matter
incidental thereto and any determination by the Board of Directors that "Cause"
existed shall not be final or binding upon the Employee or his rights hereunder
or entitled to any deference in any court or other tribunal.
6. Employee understands and agrees that, except to the extent Employee is
entitled to the benefits provided in paragraph 4(c) hereof, in the event
Employee resigns or his employment is terminated for any reason other than death
or Disability prior to his "Retirement Date" (as hereinafter defined), he will
forfeit any interest he may have in any Kennametal retirement income plan
(except to the extent vested by actual service to date of separation as per the
plan provisions), and all other benefits dependent upon continuing service. The
term "Retirement Date" shall mean the first day of the month following the day
on which Employee attains his sixty-fifth birthday, or at Employee's request,
any other day that Kennametal's Board of Directors may approve in writing.
7. Nothing herein contained shall affect the right of Employee to participate in
and receive benefits under and in accordance with the then current provisions of
any retirement income, profit-sharing, additional year-end or periodic
remuneration or bonus, incentive compensation, insurance or any other employee
welfare plan or
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program of Kennametal and all payments hereunder shall be in addition to any
benefits received thereunder (including long term disability payments).
8. During the period of employment of Employee by Kennametal and for three years
thereafter, (provided, however, that this paragraph 8 shall not apply to the
Employee following a termination of Employee's employment (x) if a
Change-in-Control, shall have occurred prior to the Date of Termination or (y)
if Employee's employment is terminated by Kennametal other than for Cause), he
will not, in any geographic area in which Kennametal is offering its services
and products, without the prior written consent of Kennametal:
(a) directly or indirectly engage in, or
(b) assist or have an active interest in (whether as proprietor, partner,
investor, shareholder, officer, director or any type of principal
whatsoever), or
(c) enter the employ of, or act as agent for, or advisor or consultant to,
any person, firm, partnership, association, corporation or business
organization, entity or enterprise which is or is about to become directly
or indirectly engaged in, any business which is competitive with any
business of Kennametal or any subsidiary or affiliate thereof in which
Employee is or was engaged; provided, however, that the foregoing
provisions of this paragraph 8 are not intended to prohibit and shall not
prohibit Employee from purchasing, for investment, not in excess of 1% of
any class of stock or other corporate security of any company which is
registered pursuant to Section 12 of the Securities Exchange Act of 1934.
Employee acknowledges that the breach by him of the provisions of this
paragraph 8 would cause irreparable injury to Kennametal, acknowledges and
agrees that remedies at law for any such breach will be inadequate and consents
and agrees that Kennametal shall be entitled, without the necessity of proof of
actual damage, to injunctive relief in any proceedings which may be brought to
enforce the provisions of this paragraph 8. Employee acknowledges and warrants
that he will be fully able to earn an adequate livelihood for himself and his
dependents if this paragraph 8 should be specifically enforced against him and
that such enforcement will not impair his ability to obtain employment
commensurate with his abilities and fully acceptable to him.
If the scope of any restriction contained in this paragraph 8 is too broad
to permit enforcement of such restriction to its full extent, then such
restriction shall be enforced to the maximum extent permitted by law and
Employee and Kennametal hereby consent and agree that such scope may be
judicially modified in any proceeding brought to enforce such restriction.
9. (a) Employee acknowledges and agrees that in the course of his employment
by Kennametal, Employee may work with, add to, create or acquire trade
secrets and confidential information ("Confidential Information") which
could include, in whole or in part, information:
(i) of a technical nature such as, but not limited to, Kennametal's
manuals, methods, know-how, formulae, shapes, designs, compositions,
processes, applications, ideas, improvements, discoveries, inventions,
research and development projects, equipment, apparatus, appliances,
computer programs, software, systems documentation, special hardware,
software development and similar items; or
(ii) of a business nature such as, but not limited to, information
about business plans, sources of supply, cost, purchasing, profits,
markets, sales, sales volume, sales methods, sales proposals, identity
of customers and prospective customers, identity of customers' key
purchasing personnel, amount or kind of customers' purchases and other
information about customers; or
(iii) pertaining to future developments such as, but not limited to,
research and development or future marketing or merchandising.
Employee further acknowledges and agrees that (i) all Confidential
Information is the property of Kennametal; (ii) the unauthorized use,
misappropriation or disclosure of any Confidential Information would
constitute a breach of trust and could cause irreparable injury to
Kennametal; and (iii) it is essential to the protection of Kennametal's
goodwill and to the maintenance of its competitive position that all
Confidential Information be kept secret and that Employee not disclose any
Confidential Information to others or use any Confidential Information to
the detriment of Kennametal.
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Employee agrees to hold and safeguard all Confidential Information in
trust for Kennametal, its successors and assigns and Employee shall not
(except as required in the performance of Employee's duties), use or
disclose or make available to anyone for use outside Kennametal's
organization at any time, either during employment with Kennametal or
subsequent thereto, any of the Confidential Information, whether or not
developed by Employee, without the prior written consent of Kennametal.
(b) Employee agrees that:
(i) he will promptly and fully disclose to Kennametal or such officer
or other agent as may be designated by Kennametal any and all
inventions made or conceived by Employee (whether made solely by
Employee or jointly with others) during employment with Kennametal (1)
which are along the line of the business, work or investigations of
Kennametal, or (2) which result from or are suggested by any work
which Employee may do for or on behalf of Kennametal; and
(ii) he will assist Kennametal and its nominees during and subsequent
to such employment in every proper way (entirely at its or their
expense) to obtain for its or their own benefit patents for such
inventions in any and all countries; the said inventions, without
further consideration other than such salary as from time to time may
be paid to him by Kennametal as compensation for his services in any
capacity, shall be and remain the sole and exclusive property of
Kennametal or its nominee whether patented or not; and
(iii) he will keep and maintain adequate and current written records
of all such inventions, in the form of but not necessarily limited to
notes, sketches, drawings, or reports relating thereto, which records
shall be and remain the property of and available to Kennametal at all
times.
(c) Employee agrees that, promptly upon termination of his employment, he
will disclose to Kennametal, or to such officer or other agent as may be
designated by Kennametal, all inventions which have been partly or wholly
conceived, invented or developed by him for which applications for patents
have not been made and shall thereafter execute all such instruments of the
character hereinbefore referred to, and will take such steps as may be
necessary to secure and assign to Kennametal the exclusive rights in and to
such inventions and any patents that may be issued thereon any expense
therefor to be borne by Kennametal.
(d) Employee agrees that he will not at any time aid in attacking the
patentability, scope, or validity of any invention to which the provisions
of subparagraphs (b) and (c), above, apply.
10. In the event that (a) Employee institutes any legal action to enforce his
rights under, or to recover damages for breach of this agreement, or (b)
Kennametal institutes any action to avoid making any payments due to Employee
under this agreement, Employee, if he is the prevailing party, shall be entitled
to recover from Kennametal any actual expenses for attorney's fees and other
disbursements incurred by him in relation thereto.
11. The terms and provisions of this agreement shall be binding upon, and shall
inure to the benefit of, Employee and Kennametal, it subsidiaries and affiliates
and their respective successors and assigns.
12. This agreement constitutes the entire agreement between the parties hereto
and supersedes all prior agreements and understandings, whether oral or written,
among the parties with respect to the subject matter hereof. This agreement may
not be amended orally, but only by an instrument in writing signed by each of
the parties to this agreement.
13. The invalidity or unenforceability of any provision of this agreement shall
not affect the other provisions hereof, and this agreement shall be construed in
all respects as if such invalid or unenforceable provision were omitted.
14. Any pronoun and any variation thereof used in this agreement shall be deemed
to refer to the masculine, feminine, neuter, singular or plural, as the identity
of the parties hereto may require.
15. Kennametal shall be entitled as a condition to paying any severance pay or
providing any benefits hereunder upon a termination of the Employee's employment
to require the Employee to deliver on or before the making of any severance
payment or providing of any benefit a release in the form of Exhibit A attached
hereto.
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16. (a) At the time of making payment to an Employee entitled to receive the
severance payment computed in accordance subsection 4(c)(i) and
4(c)(ii) of this agreement, the Corporation shall determine whether the
Employee is expected to be subject to the tax (the "Excise Tax") imposed by
section 4999 of the Internal Revenue Code of 1986, as amended (the "Code"),
with respect to any payment or benefit received, or to be received, by
Employee under this agreement or in connection with a change in control of
the Corporation, or the termination of the Employees' employment (whether
pursuant to the terms of this agreement or any other plan, arrangement or
agreement with the Corporation, any person whose actions result in a change
in control or any person affiliated with the Corporation or such person)
(collectively, the "Total Payments"). If the Corporation determines that the
Employee will be subject to the Excise Tax, the Corporation shall
immediately send a written notice to the Employee which sets forth that the
Employee will be subject to the Excise Tax and the Corporation's computation
of the Total Payments, of the amount of Total Payments which constitute
"parachute payments" as defined in section 28OG(b)(2) of the Code
("parachute payments") resulting in the imposition of the Excise Tax, and of
the amount of Total Payments which the Employee would retain after giving
effect to the Employee's receipt of the Excise Tax Payment (as hereafter
defined) and payment of applicable taxes. Employee shall have five (5)
business days after receipt of the foregoing notice and computation to
deliver a written waiver to the Corporation irrevocable waiving the
Employee's right to receive an amount of Total Payments equal to the
"parachute payments" from any specified type of the Total Payments. If the
Corporation had already withheld any Contract Payments due to the Excise Tax
prior to receipt of such waiver, the Corporation upon receipt of such waiver
shall immediately pay to Employee any withheld Contract Payments which would
have been paid had the Corporation had the Employee's written waiver prior
to the date the Corporation withheld any such payments.
(b) If
(i) after giving effect to any waiver by the Employee pursuant to
subsection (a) above, the Employee will be subject to the Excise
Tax with respect to any portion of the Total Payments and
(ii) the Employee After Tax Net (as hereafter defined) would be less
than the Minimum Amount (as hereafter defined),
then the Corporation shall pay to Employee an additional amount (the "Excise
Tax Payment") such that the Employee After Tax Net shall be equal to the
Minimum Amount. The Excise Tax Payment, if any, under this subsection shall
be made to Employee within fifteen (15) business days of Employee's Date of
Termination.
(c) The "Employee After Tax Net" is the portion of the Total Payments which
the Employee retains or would retain after payment of all federal and any
state and local income taxes on the Total Payments and of the Excise Tax.
The "Minimum Amount" is an amount equal to the severance pay computed in
accordance with subsection 4(c)(i) and 4(c)(ii) of this agreement less the
federal, state and/or local income taxes which would be owing by the
Employee on such severance pay (ignoring any Excise Tax Payment). For
purposes of determining whether any of the Total Payments will be subject to
the Excise Tax and the amount of such Excise Tax, (i) all Total Payments
shall be treated as parachute payments and all "excess parachute payments"
within the meaning of Section 280G(b)(1) shall be treated as subject to the
Excise Tax, unless in the opinion of tax counsel selected by the Board of
Directors, such Total Payments (in whole or in part) do not constitute
parachute payments, or such excess parachute payments (in whole or in part)
represent reasonable compensation for services actually rendered within the
meaning of Section 280G(b)(4) of the Code in excess of the base amount
within the meaning of Section 280G(b)(3) of the Code, or are otherwise not
subject to the Excise Tax, (ii) the amount of the Total Payments which shall
be treated as subject to the Excise Tax shall be equal to the lesser of (A)
the total amount of the Total Payments or (B) the amount of excess parachute
payments within the meaning of Section 280G(b)(1) (after applying clause
(i), above) of the Code, and (iii) the value of any non-cash benefits or any
deferred payment or benefit shall be determined by the Corporation's
independent auditors in accordance with the principles of Section 280G(d)(3)
and (4) of the Code. For purposes of determining the Minimum Amount and the
Excise Tax Payment, Employee shall be deemed to pay federal income taxes at
Employee's highest
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marginal rate of federal income taxation in the calendar year in which the
Excise Tax Payment is to be made and state and local income taxes at
Employee's highest marginal rate of taxation in the state and locality of
Employee's residence on the Date of Termination, net of the maximum
reduction in federal income taxes which could be obtained from deduction of
such state and local taxes.
(d) In the event that the Excise Tax is subsequently determined to be less
than the amount taken into account in arriving at any payment made pursuant
to subsection (b) above, Employee shall repay to the Corporation at the time
that the amount of such reduction in Excise Tax is finally determined the
portion of the Excise Tax Payment attributable to such reduction (plus the
portion of the Excise Tax Payment attributable to the Excise Tax and federal
and state and local income tax imposed on the Excise Tax Payment being
repaid by Employee if such repayment results in a reduction in Excise Tax
and/or a federal and state and local income tax deduction) plus interest on
the amount of such repayment from the date the Excise Tax Payment was
initially made to the date of repayment at the rate provided in Section
1274(b)(2)(B) of the Code (the "Applicable Rate"). In the event that the
Excise Tax is determined to exist although the Corporation did not believe
it existed in arriving at its determination in subsection (a) above or
although the Corporation believed it existed but the actual amount exceeds
the amount taken into account in arriving at any payment made pursuant to
subsection (b) above (including by reason of any payment the existence or
amount of which cannot be determined at the time of the Excise Tax Payment),
the Corporation shall make an additional Excise Tax Payment in respect of
such amount or such excess (plus any interest or penalties payable with
respect thereto) at the time that the amount of such excess is finally
determined.
17. This agreement shall be governed by the laws of the Commonwealth of
Pennsylvania.
WITNESS the due execution hereto as of the day and year first above written.
ATTEST: KENNAMETAL INC.
________________________________ By:_________________________________
WITNESS: Employee:
________________________________ By:_________________________________(Seal)
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Exhibit A
RELEASE
KNOW ALL MEN BY THESE PRESENTS that the undersigned for good and valuable
consideration, the receipt of which is hereby acknowledged, and intending to be
legally bound, hereby releases, remises, quitclaims and discharges completely
and forever Kennametal Inc. and its directors, officers, employees, subsidiaries
and affiliates from any and all claims, causes of action or rights which the
undersigned has or may have, whether arising by virtue of contract or of
applicable state laws or federal laws, and whether such claims, causes of action
or rights are known or unknown; provided, however, that this Release shall not
release, remise, quitclaim or discharge any claims, causes of action or rights
which the undersigned may have (i) under that certain Amended and Restated
Employment Agreement dated as of __________, ____, between the undersigned and
Kennametal Inc., (ii) to any unreimbursed expense account or similar
out-of-pocket reimbursement amounts owing the undersigned, or (iii) under the
bylaws of Kennametal Inc. or the applicable state corporate statutes to
indemnification for having served as an officer and/or employee of Kennametal
Inc. and/or its subsidiaries.
DATE:____________________________ ___________________________
