WMS INDUSTRIES INC. Waukegan, IL 60085
Exhibit
10.2
WMS
INDUSTRIES INC.
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
July 1,
2008
▇▇. ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
c/o WMS
INDUSTRIES INC.
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇,
▇▇ ▇▇▇▇▇
Dear
▇▇▇▇▇:
Reference
is made to the Executive Employment Agreement between you and WMS Industries
Inc., dated December 27, 2004 (the “Employment Agreement”). The
Employment Agreement is hereby amended as follows:
1. In
connection with management succession planning in which you have actively
participated, effective July 1, 2008 the position of President of the
Corporation will be held by a person other than you, while you will remain Chief
Executive Officer. Accordingly, Sections 2 and 13.4(ii) of the
Employment Agreement shall be amended by deleting the words “President
and”.
2. A new
Section 5.5 shall be added to the Employment Agreement to read as
follows:
“5.5
Post-Employment Health
Coverage. Following termination of employment, Executive, his
wife, ▇▇▇▇▇▇, and his son, Alexander, shall be reimbursed by the Corporation for
Covered Medical Expenses (as defined below) incurred by them during the periods
set forth below, and subject to the limitations set forth below, (the
“Post-Employment Health Benefits”). “Covered Medical Expenses” shall
mean (i) all medical and dental expenses incurred by Executive, ▇▇▇▇▇▇ or
▇▇▇▇▇▇▇▇▇, to the extent such expenses are not otherwise reimbursed or covered
by insurance or Medicare, and (ii) premiums for medical and dental insurance
paid by Executive, ▇▇▇▇▇▇ or Alexander; provided that Tamara’s expenses shall be
covered during the lifetime of Executive only if she is Executive’s wife at the
time such expense is incurred, and after Executive’s death, only if she is
Executive’s wife on the date of his death. Post-Employment Health
Benefits shall be provided to Executive and ▇▇▇▇▇▇, (i) for five years after
termination if Executive’s employment with the Corporation terminates on or
before June 30, 2012, other than termination by the Corporation without cause as
defined in Section 13.3 hereof, by Executive for good reason as defined in
Section 13.4 hereof or by death or permanent disability, or (ii) for the
lifetime of Executive and ▇▇▇▇▇▇ if Executive’s employment with the Corporation
terminates after June 30, 2012, or if it terminates earlier due to termination
by the Corporation without cause, termination by Executive for good reason or by
death or permanent disability. If clause (i) of such previous sentence is
applicable, Post-Employment Health Benefits shall be provided to Alexander for
the shorter
of (X) the applicable period set forth in clause (i) of the previous sentence
and (Y) until he reaches the age of 18, or while he remains a full-time student
after the age of 18 but in no event past the age of 23 (the “Child Age-Coverage
Limit”); and if clause (ii) of such previous sentence is applicable,
Post-Employment Health Benefits for Alexander shall continue until the Child
Age-Coverage Limit. Executive shall cooperate, and cause ▇▇▇▇▇▇ and
▇▇▇▇▇▇▇▇▇ to cooperate, with the Corporation by submitting to such physical
exams and completing such insurance application forms and other documents, by
enrolling in Medicare and other available insurance programs, and by submitting
appropriate claims for payment or reimbursement thereunder, all as the
Corporation shall request from time to time. If Executive is employed
by another entity after termination of employment by the Corporation, he will,
to the extent requested by the Corporation, participate in such health insurance
plans as are available through such other entity. Executive will pay
all taxes required to be paid by him, ▇▇▇▇▇▇ or Alexander, by reason of the
payment by the Corporation of Post-Employment Health Benefits, and Executive
agrees that the Corporation may withhold amounts to pay withholding taxes to the
extent required by applicable law, rule or regulation.”
3. Section 6
of the Employment Agreement shall be amended by adding the following sentence as
the second sentence of such section:
“The
amount of expenses eligible for reimbursement in a calendar year shall not
affect the expenses eligible for reimbursement in any other calendar
year.”
4. Section
9.1 of the Employment Agreement shall be amended so that the phrase “two years”
as it appears in Section 9.1 shall be changed to “four years”.
5. Sub-paragraph
(i) of Section 9.2 of the Employment Agreement shall be amended so that the
phrase “two years” appearing therein shall be changed to “four
years”.
6. Sub-paragraph
(ii) of Section 13.7(a) of the Employment Agreement shall be amended by
substituting the phrase “no later than 15th day of
the third month following the end of the fiscal year in which the Date of
Termination occurs” for the phrase “within 30 days after the Corporation
publicly announces its audited results for the fiscal year in which the Date of
Termination occurs ” at the beginning of said sub-paragraph.
▇▇. ▇▇▇▇▇
▇. ▇▇▇▇▇▇▇
July 1,
2008
Page
2
7. Section
14 of the Employment Agreement shall be amended to read in its entirety as
follows:
“Retirement: The
Corporation will pay to Executive during the first four years following
Executive’s Retirement Date, an “Annual Retirement Benefit equal to one-half
(1/2) of the annual base salary payable to Executive as of the Retirement date
(as defined below), but no less than Four Hundred Thirty-two Thousand Dollars
($432,000) per annum. The Annual Retirement Benefit shall be paid
during such four year period in equal monthly installments beginning on the
first day of the seventh month following Executive’s Retirement Date and on the
first day of each month thereafter; provided, however, that the initial payment
shall also include the aggregate amount of payments that would have been made
during the first six months following Executive’s Retirement Date if the
installment payments had commenced on the first day of the first month following
Executive’s Retirement Date. On the first day of the forty-ninth
(49th) month following Executive’s Retirement Date (the “Balloon Payment Date”),
the Corporation shall pay a lump sum retirement benefit (the “Balloon Payment”)
determined by discounting each monthly installment that would be paid if the
Annual Retirement Benefit were to continue to be paid in equal monthly
installments for the remainder of the Retirement Period (as defined below),
using the procedures set forth below. In the event that Executive
shall die before the retirement benefits provided for herein shall be fully
paid, an amount equal to the Lump Sum Death Payment shall be payable to his
estate within 90 days after the date of death. “Retirement
Date” shall mean the date of termination of Executive’s employment under this
Agreement, for whatever reason. “Retirement
Period” means the period beginning on the first day of the first month following
Executive’s Retirement Date and ending on the expiration of the number of years
or fractions thereof after March 21, 2000 that Executive is employed full time
by the Corporation. The “Lump
Sum Death Payment” or the Balloon Payment, as the case may be, shall be
determined as follows: Each scheduled monthly installment remaining
unpaid on the date of death and each monthly installment that would be paid if
the Annual Retirement Benefit were to be continued for the remainder of the
Retirement Period shall be discounted to the date of death or the Balloon
Payment Date, as the case may be, using the Designated Rate, and the aggregate
of such discounted values shall be the Lump Sum Death Payment or the Balloon
Payment, as the case may be. The “Designated Rate” shall mean the
treasury yield curve rate on the Balloon Payment Date or the date of death, as
the case may be (or on the closest date prior to such date for which such rate
is available) for 10 year U.S. Treasury Bonds published by the U.S. Department
of the Treasury. If 10 year maturity U.S. Treasury Bond daily yield
curve rates are no longer published, the Designated Rate shall be the treasury
yield curve rate for the next shortest maturity of U.S. Treasury Bonds for which
daily treasury yield curve rates are published by the U.S. Department of the
Treasury. The acceleration of any installments under this Section 14
is prohibited unless permitted by the final regulations issued by the Internal
Revenue Service under Code Section 409A.
8. The first
sentence of Section 15.1 of the Employment Agreement shall be amended by
substituting the following language for the portion of the sentence preceding “,
and (ii)”:
“If
during any 12-month period, (a) individuals who presently constitute the Board
of Directors of the corporation, or who have been recommended for election to
the Board by at least two-thirds of the Board consisting of individuals who are
either presently on the Board or are such recommended successors, cease for any
reason to constitute at least a majority of such Board or (b) both of the
following occur (i) any person or entity or group of affiliated persons or
entities who are not the owners of at least 15% of the outstanding shares of
voting securities of the Corporation on the date hereof acquire more than 50% of
the outstanding shares of the Corporation’s voting securities.”
9. The
second-to-last sentence of Section 15.1 of the Employment Agreement shall be
deleted.
10. Section
15.2 of the Employment Agreement shall be amended by adding the following phrase
to the end of the third sentence thereof:
“and
payment of the Gross-Up Payment shall be made by the Corporation within fifteen
business days following receipt by the Corporation and the Executive of such
supporting calculations.”
11. Section
15.2 of the Employment Agreement shall be further amended by adding the
following sentence at the end thereof:
“Notwithstanding
any provision of this Section 15.2 to the contrary, all Gross-Up Payments made
pursuant to this Section 15.2 shall be made no later than the last day of the
taxable year of the Executive following the taxable year of the Executive in
which the Executive paid the related taxes.”
12. The
amendments set forth in this letter agreement shall be effective as of July 1,
2008, notwithstanding any earlier date of execution of this letter agreement by
the parties. Except as expressly modified herein, the terms and
conditions of the Employment Agreement shall remain in full force and
effect.
Please
indicate your agreement to the foregoing by signing this letter in the place
provided below.
Very
truly yours,
WMS
INDUSTRIES INC.,
By: /s/ ▇▇▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇
▇▇▇▇▇▇▇▇
▇. ▇▇▇▇▇▇
Vice
President, General Counsel and Secretary
Accepted
and Agreed to:
/s/ ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇
▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇