Change in Control Agreement - Molinini

Severance Agreement – McCausland

 

 

EX-10.1 2 w72254kexv10w1.htm EXHIBIT 10.1

Exhibit 10.1

AMENDED AND RESTATED
CHANGE OF CONTROL AGREEMENT

          This is an AMENDED AND RESTATED CHANGE OF CONTROL AGREEMENT (“Agreement”) dated December 31, 2008, between Airgas, Inc., a Delaware corporation (the “Company”), and Michael L. Molinini (the “Executive”).

BACKGROUND

          WHEREAS, the Executive is the current Executive Vice President and Chief Operating Officer of the Company and currently is a party to a Change of Control Agreement with the Company, dated January 26, 2000 (the “Prior Agreement”); and

          WHEREAS, the Company and Executive desire to minimize the risk of adverse tax consequences with respect to payment made under the Prior Agreement.

          NOW, THEREFORE, intending to be legally bound, and in consideration of the mutual promises and representations set forth in this Agreement, the Company and Executive agree that the Prior Agreement is hereby amended and restated as follows:

ARTICLE I — TERM OF AGREEMENT

     1.1 Term. The term of this Agreement shall commence as of the date hereof, and shall terminate upon the earlier of (i) Executive’s “Separation from Service” (as hereinafter defined) with the Company for any reason, or (ii) the later of (A) the date which is three years following the date on which a Change of Control occurred; or (B) the date as of which funding is required following a “Standstill Agreement” (as hereinafter defined) provided, however, that the Agreement shall remain in effect until Executive (or Executive’s beneficiary if Executive is not alive) has received any and all amounts to which Executive is entitled under this Agreement.

 


 

ARTICLE II – SEPARATION FROM SERVICE

     2.1 Change of Control Required. No amounts or benefits shall be paid or become payable to Executive under this Agreement unless Executive has a Separation from Service within three years following a Change of Control.

     2.2 Certain Definitions. For purposes of this Agreement:

          2.2.1 A “Change of Control” shall mean any one or more of the following:

     2.2.1.1 As a result of a tender offer, stock purchase, other stock acquisition, merger, consolidation, recapitalization, reverse split, sale or transfer of any asset or other transaction any person or group (as such terms are used in and under Section 13(d) of the Securities Exchange Act of 1934 (the “Exchange Act”)) other than the Company, any affiliate, or any employee benefit plan of the Company or an affiliate, shall become the beneficial owner (as defined in Rule 13-d under the Exchange Act) directly or indirectly of securities of the Company representing 20% or more of the combined voting power of the Company’s then outstanding securities; providing, however, that this provision shall not apply to Peter McCausland (“McCausland”), unless and until McCausland, together with all affiliates and associates, becomes the beneficial owner of 30% or more of the combined voting power of the Company’s then outstanding securities;

     2.2.1.2 The consummation of any merger of the Company or any sale or other disposition of all or substantially all of its assets, if the Company’s stockholders immediately before such transaction own, immediately after consummation of such transaction, equity securities (other than options and other rights to acquire equity securities) possessing less than 50% of the voting power of the surviving or acquiring corporation; or

     2.2.1.3 A change in the majority of the individuals who constitute the Board occurs during any period of two years for any reason without the approval of at least a majority of directors in office at the beginning of such period.

          2.2.2 A “Separation from Service” and “Separate from Service” shall mean Executive’s termination of employment with the Company and with each member of the controlled group (within the meaning of section 414 of the Internal Revenue Code of 1986 (the “Code”)) of which the Company is a member. Whether a

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Separation from Service has occurred shall be determined by the Board or its delegate on a basis consistent with rules under Code section 409A ) after consideration of all the facts and circumstances.

     2.3 Separation from Service Entitling Executive to Benefits. A Separation from Service within three years following a Change of Control for any reason set forth in this Section 2.3 shall entitle Executive to the amounts and benefits set forth in Section 3.1.

          2.3.1 Voluntary Separation from Service for Good Reason. Executive may notify the Company of Executive’s intention to Separate from Service with the Company for “Good Reason” (as hereinafter defined), within three years following a Change of Control. However, Executive must provide notice of the existence of the Good Reason condition within 90 days of its initial existence and the Company shall have 30 days to cure the defects stated in such notice that would give rise to Good Reason. If the Company has not cured all such defects at the end of that 30-day period, Executive shall Separate from Service effective, for purposes of this Agreement, as of the date that Executive provided notice to the Company pursuant to the first sentence of this Section 2.3.1, and Executive shall be entitled to the amounts and benefits set forth in Section 3.1. For purposes of this Agreement, “Good Reason” shall mean any of the following:

     2.3.1.1 Material diminution in Executive’s base compensation;

     2.3.1.2 Material diminution in Executive’s authorities, duties or responsibilities;

     2.3.1.3 Material diminution in the authority, duties or responsibilities of the supervisor to whom Executive is required to report, including a requirement that Executive report to a Company officer or employee instead of reporting to the Board;

     2.3.1.4 Material diminution in the budget over which Executive retains authority;

     2.3.1.5 Material change in the geographic location at which Executive must provide services; or

     2.3.1.6 Any action or inaction that constitutes a material breach of any employment agreement between Executive and the Company.

          2.3.2 Involuntary Separation from Service Other Than for Cause. If the Company terminates Executive’s employment other than for Cause

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within three years following a Change of Control such that Executive incurs a Separation from Service, Executive shall be entitled to the amounts and benefits set forth in Section 3.1.

     2.4 Cause Defined. Executive’s termination of employment with the Company shall be for “Cause” if one or more of the following events occur:

          2.4.1 Executive’s willful misconduct or gross negligence in the performance of Executive’s duties;

          2.4.2 Executive’s commission of any act of fraud or embezzlement against the Company or Executive’s commission of a felony or any other offense involving moral turpitude; or

          2.4.3 Executive’s unauthorized dissemination of confidential information, observations, and data concerning the business plans, financial data, customer lists, trade secrets and acquisitions strategies of the Company and its subsidiaries which has a material adverse effect on the Company or its subsidiaries.

     2.5 No Other Amounts Payable. Except as provided in Section 2.3, no amounts or benefits shall be paid or become payable to Executive under this Agreement.

ARTICLE III — BENEFITS

     3.1 Benefits. If Executive’s employment with the Company terminates in a manner described in Section 2.3, the Company shall pay Executive the following amounts and provide to Executive the following benefits, subject to Sections 3.3 and 3.4:

          3.1.1 Cash Payment. As soon as practicable, but not later than 60 days following Executive’s Separation from Service (the date of payment being referred to herein as the “Payment Date”), the Company shall make a lump sum payment to Executive equal to two times the sum of (x) and (y), as described immediately hereafter. For this purpose, (x) equals the greater of Executive’s annual base salary as in effect (a) immediately prior to Executive’s Separation from Service, or (b) at the time a Change of Control occurred, and (y) equals the bonus amount last paid to Executive prior to the occurrence of the Change of Control under the Company’s annual executive bonus plan.

          3.1.2 Health Benefits. For a period of three years following Executive’s Separation from Service, the Company shall reimburse Executive all

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expenses related to medical, dental and prescription drug coverage, however, such benefit shall terminate if Executive is entitled to comparable coverage from a subsequent employer, to the extent permitted under Code section 4980B. The amount of expenses eligible for reimbursement during a taxable year shall not affect the expenses eligible for reimbursement during another taxable year. The reimbursement of such expenses must be made on or before the last day of Executive’s taxable year following the taxable year in which the expense was incurred. This right to reimbursement shall not be subject to liquidation or exchange for another benefit.

          3.1.3 Stock Options and Restricted Stock. All stock options and restricted stock grants awarded to Executive under any stock option or stock grant plans of the Company shall become fully vested upon a Change of Control and, notwithstanding any provision of any such option plan to the contrary, any stock option shall remain exercisable until that option’s expiration date, determined without regard to Executive’s Separation from Service.

     3.2 Reduction of Benefits.

          3.2.1 Reduced Payment. If any payment or benefit provided to Executive by the Company pursuant to this Agreement or otherwise (the “Payment”) shall be determined to be an “Excess Parachute Payment,” (as defined in Code section 280G(b)(1)), that would be subject to the excise tax imposed by Code section 4999, then the aggregate present value of amounts or benefits payable to Executive pursuant to this Agreement (the “Agreement Payments”) shall be reduced (but not below zero) to the Reduced Amount. The “Reduced Amount” shall be an amount expressed in present value that maximizes the aggregate present value of Agreement Payments without causing any payments or benefits hereunder to be an Excess Parachute Payment. Anything to the contrary notwithstanding, if the Reduced Amount is zero and it is determined further that any payment from the Company to Executive that is not an Agreement Payment would nevertheless be an Excess Parachute Payment, then the aggregate present value of Payments that are not Agreement Payments shall also be reduced (but not below zero) to an amount, if any, if the present value of such lesser amount maximizes the aggregate present value of Payments to Executive on an after-tax basis, taking into account income and excise taxes under Code section 1 and section 4999. For purposes of this Section 3.2 present value shall be determined in accordance with Code section 280G(d)(4).

          3.2.2 Determination of Agreement Payments. All determinations required under this Section 3.2 shall be made by a national accounting firm retained by the Company at its own expense. The accounting firm shall provide the Company and the Executive with a report and supporting calculations within 15

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business days of the date Executive’s employment with the Company terminates or such earlier time as is requested by the Company. In addition, the accounting firm shall provide an opinion to Executive that the Executive has substantial authority not to report any excise tax on Executive’s federal income tax return with respect to the Agreement Payments. Any such determination by the accounting firm shall be binding upon the Company and Executive. Executive shall determine which and how much of the Agreement Payments or Payments, as the case may be, shall be eliminated or reduced consistent with the requirements of this Section 3.2, provided that, if Executive does not make such determination within 10 business days of the receipt of the calculations from the accounting firm, the Company shall elect which and how much of the Agreement Payments or Payments, as the case may be, shall be eliminated or reduced consistent with the requirements of this Section 3.2 and shall notify Executive promptly of such election. Within 10 business days thereafter, the Company shall pay to or distribute to or for the benefit of Executive such amounts are then due to Executive under this Agreement.

     3.3 Deferral of Benefits. If the Company, based on written advice of reputable counsel, a copy of which shall be provided to Executive, determines that in the aggregate any benefit or payment under this Agreement and under any other arrangement or agreement between the Company and Executive would not be deductible for federal income taxes by the Company solely as a result of the application of Code section 162(m), the payment of any amounts otherwise payable under this Agreement in the then current year shall be reduced, but not below zero, by the amount of any such non-deductible amounts. The Company shall pay the entire non-deductible amount to Executive during Executive’s first taxable year in which the Company reasonably anticipates, or should reasonably anticipate, that if the payment is made during such year, the deduction of such payment will not be barred by the application of Code section 162(m). The Company shall pay interest accrued on such deferred payments, calculated at the federal short-term rate, from the date that Executive would have been entitled to payment under this Agreement without application of this Section 3.3 until the date of payment. All scheduled payments to Executive pursuant to this Agreement and any other agreement between Executive and the Company that could be delayed to avoid the application of Code section 162(m) shall be delayed. In addition, payments made pursuant to this Section 3.3 that are made on or after Executive’s Separation from Service are subject to the delay for Specified Employees in Section 3.4.

     3.4 Delay for Specified Employees.

          3.4.1 Notwithstanding any other provision of this Agreement to the contrary, in the event that Executive is at the time of Executive’s Separation from Service a “Specified Employee” (as hereinafter defined) then any payment otherwise required to be made to Executive (calculated as of the Payment Date) shall be

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accumulated, deferred and paid in a lump sum to Executive (with interest on the amount deferred from the Payment Date until the day prior to the actual payment at the federal short-term rate on the Payment Date) on the day after the date that is six months from the date of Executive’s Separation from Service; provided, however, if Executive dies prior to the expiration of such six month period, payment to Executive’s beneficiary shall be made as soon as practicable following Executive’s death. Notwithstanding the forgoing, this Section 3.4.1 requires only that payments be delayed to the extent that such payments exceed the lesser of (i) two times Executive’s annualized compensation based upon the annual rate of pay for services provided to the Company for the taxable year of Executive preceding the taxable year of Executive’s Separation from Service (adjusted for any increase during that year that was expected to continue indefinitely if Executive had not incurred a Separation from Service) or (ii) two times the Code section 401(a)(17) compensation limit applicable in the year of Executive’s Separation from Service.

          3.4.2 Executive will be a “Specified Employee” for purposes of payments made pursuant to this Agreement if Executive is designated as a “Specified Employee” by the Company within the meaning and in accordance with Treasury Regulation Section 1.409A-1(i).

     3.5 Withholding Taxes. The Company shall withhold from any payments or benefits made under this Agreement all applicable federal, state and local income and employment taxes, as well as any other amounts required to be withheld under any law.

     3.6 Funding.

          3.6.1 Required Funding. The Company shall not be required to fund the amounts and benefits payable under this Agreement until a Change of Control occurs. Upon the occurrence of a Change of Control, the Company shall immediately contribute an amount to an irrevocable grantor trust, of which Executive is the beneficiary and a third-party is the trustee (a “Trust”), equal to 120% of the amounts that could become payable to Executive under this Agreement.

          3.6.2 Standstill Agreements. Notwithstanding Section 3.6.1, if a transaction is approved by the Board, including one that would constitute a Change of Control, and the transaction is accompanied by a Board approved standstill agreement that provides for (i) no further acquisition of Company securities by the shareholder(s) entering into the agreement and (ii) management autonomy for the Company’s management at the time the agreement is executed (a “Standstill Agreement”), the Board shall determine whether to contribute amounts to a Trust to fund benefits payable under this Agreement at the time the Standstill Agreement

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is executed. The Company shall fund such a Trust, however, if after such a transaction and the execution of a Standstill Agreement (i) the terms of the Standstill Agreement, including the management autonomy provision, are violated or (ii) the Company terminates any of its executive officers without Cause. If a Trust is to be funded under this Section 3.6.2, the Company shall immediately contribute an amount to the Trust equal to 120% of the amounts that could become payable to Executive under this Agreement.

          3.6.3 Payments from Trust and Reversions. To the extent any provision of this Agreement provides for a payment from the Company to Executive, the Company may direct the trustee of a Trust created pursuant to this Section 3.6 to make such payment to the extent that any remaining assets in the Trust are reasonably expected to be sufficient for any additional amounts or benefits that may be due Executive from the Company under this Agreement. No amount in a Trust may revert to the Company until 90 days after the expiration of the Term of this Agreement. Notwithstanding the above, if Executive has brought a lawsuit against the Company claiming amounts or benefits under this Agreement, no amounts from the Trust shall revert to the Company while such claim is pending.

     3.7 Legal Expenses.

          3.7.1 If Executive determines in good faith to retain legal counsel and/or to incur other reasonable costs or expenses in order to enforce any or all of Executive’s rights under this Agreement, the Company shall reimburse Executive for those attorneys’ fees, costs and expenses incurred in connection with non-frivolous actions to interpret or enforce Executive’s rights, provided that the Company will reimburse Executive only for such expenses incurred prior to the end of the second year following Executive’s Separation from Service. Reimbursements may be made until the end of the third year following Separation from Service.

          3.7.2 In addition, during each of the two years immediately following Executive’s Separation from Service or until a settlement or a final adjudication by a court of competent jurisdiction, if earlier, the Company will pay Executive his or her base pay as in effect immediately prior to the Change of Control or immediately prior to Executive’s Separation from Service, whichever is higher, ratably over the year in accordance with the Company’s customary payroll practices. Notwithstanding the forgoing, to the extent that the controversy or claim is settled or finally adjudicated by a court of competent jurisdiction prior to the end of the second year following Executive’s Separation from Service, Executive shall cease receiving salary continuation payments required by this Section 3.7.2 as of the date the claim or controversy is settled or resolved.

          3.7.3 During the period that Executive is receiving payment pursuant

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to Section 3.7.2, to the extent permitted under law, the Company will provide Executive with the same life, accidental death, and disability (short-term and long-term) insurance benefits Executive was receiving immediately prior to the Change of Control and the Company shall reimburse Executive all expenses related to medical, dental and prescription drug coverage, provided that the amount of such expense reimbursement during a taxable year shall not affect the expenses eligible for reimbursement during another taxable year, the reimbursement of such expenses must be made on or before the last day of Executive’s taxable year following the taxable year in which the expense was incurred and this right to reimbursement shall not be subject to liquidation or exchange for another benefit.

          3.7.4 Payments and the provision of benefits made pursuant to this Section 3.7 shall be in addition to, and not in derogation or mitigation of any other payment or benefit due Executive under this Agreement.

     3.8 No Duty of Mitigation. The Executive shall have no duty to seek new employment after his employment with the Company terminates or to take any other actions which could reduce the amounts the Company is obligated to pay or reduce the benefits the Company is required to provide under this Agreement.

ARTICLE IV — MISCELLANEOUS

     4.1 Modification of This Agreement. Executive acknowledges and agrees that no one employed by or representing the Company has any authority to make oral statements which modify, waive or discharge, in any manner, any provision of this Agreement. Executive further acknowledges and agrees that no provision of this Agreement may be modified, waived or discharged unless agreed to in writing, and signed and executed by Executive and the Board, or its delegate. Executive acknowledges and agrees that in executing this Agreement, Executive has not relied upon any representation or statement made by the Company or its representatives, other than those specifically stated in this Agreement.

     4.2 Notices. All notices required or permitted hereunder shall be made in writing by hand-delivery, certified or registered first-class mail, facsimile transmission or air courier guaranteeing overnight delivery to the other party at the following addresses:

 

 

 

 

 

 

 

To Company:

 

 Airgas, Inc.

 

 

 

 

 259 N. Radnor-Chester Road

 

 

 

 

 Radnor, PA 19087-8675

 

 

 

 

 Attention: Corporate Secretary

 

 

 

 

 

 

 

To Executive:

 

 Mike Molinini

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 1111 Woodview Way

 

 

 

 

 Malvern, PA 19355

or to such other address as either of such parties may designate in a written notice served upon the other party in the manner provided herein. All notices required or permitted hereunder shall be deemed duly given and received when delivered by hand, if personally delivered; on the fifth day next succeeding the date of mailing if sent by certified or registered first-class mail, when received if sent by facsimile transmission, and on the next business day, if timely delivered to an air courier guaranteeing overnight delivery.

     4.3 Employment Status. Unless an agreement between the Company and the Executive provides otherwise, the Company and Executive acknowledge that, notwithstanding this Agreement, the employment of Executive by the Company is “at will,” and the Company may terminate Executive’s employment with the Company at any time, although certain terminations as specified in Article II will entitle Executive to amounts and benefits from the Company.

     4.4 Other Arrangements Not Affected. Except as otherwise provided herein, this Agreement shall not have any effect on any other benefit plan, arrangement or agreement under which Executive currently participates, has in the past participated, or may in the future participate.

     4.5 Applicable Law. The parties have agreed that this Agreement shall be governed by, construed and enforced in accordance with the laws of the Commonwealth of Pennsylvania without giving effect to conflict of law principles.

     4.6 Headings. The headings used throughout this Agreement have been used for convenience only and do not constitute matter to be considered in interpreting this Agreement.

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     IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the dates indicated below:

 

 

 

 

 

 

 

 

 

Michael L. Molinini

 

AIRGAS, INC.

 

 

 

 

 

 

 

 

 

 

 

Signature:
              

 

/s/ Michael L. Molinini

 

          

 

By:

 

/s/ Peter McCausland

 

      Peter McCausland

 

 

 

 

 

 

 

 

 

 

 

Date:

 

December 26, 2008          

 

Title:

 

Chairman and Chief Executive Officer

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Date: December 31, 2008                       

 

           

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EX-10.12 3 w74288exv10w12.htm EX-10.12

Exhibit 10.12

AMENDED AND RESTATED
EXECUTIVE SEVERANCE AGREEMENT

     This Amended and Restated Executive Severance Agreement (the “Agreement”) is made as of the 29th day of May 2009 by and between Airgas, Inc., a Delaware corporation (the “Company”), and Peter McCausland (the “Executive”).

     WHEREAS, Executive is an executive of the Company, currently serving as its Chairman of the Board, President and Chief Executive Officer; and

     WHEREAS, the Company and Executive previously entered into a letter agreement for severance payments, dated July 24, 1992 (the “Prior Agreement”), pursuant to which Executive is entitled to certain payments and benefits in the event that Executive’s employment is terminated as set forth in the Prior Agreement; and

     WHEREAS, the Company and Executive previously entered into a Change of Control Agreement, dated March 17, 1999 (as amended, restated, or otherwise modified from time to time, the “COC Agreement”), pursuant to which Executive is entitled to certain payments and benefits in the event of a termination of his employment in connection with a Change of Control as defined in and set forth in the COC Agreement; and

     WHEREAS, the Company and Executive desire to amend and restate the provisions of the Prior Agreement in their entirety to comply with the requirements of section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations issued thereunder, and to eliminate any conflicts with the provisions of the COC Agreement.

     NOW, THEREFORE, in consideration of the foregoing and the mutual covenants and agreements hereinafter set forth, and intending to be legally bound hereby, the Company and Executive (individually a “Party” and together, the “Parties”) agree that the Prior Agreement is hereby amended and restated as follows:

     1. Definitions.

          (a) “Board” shall mean the Board of Directors of the Company.

          (b) “Cause” shall be as defined in Section 2.4 of the COC Agreement.

          (c) “Change of Control” shall be as defined in Section 2.2.1 of the COC Agreement.

          (d) “Code” means the Internal Revenue Code of 1986, as amended.

          (e) “Good Reason” shall be as defined in Section 2.3.1 of the COC Agreement.

 

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          (f) “Notice of Termination” means a written notice which (i) indicates the specific Cause for termination, and (ii) briefly summarizes the facts deemed to provide a basis for the Cause for termination of Executive’s employment under the provision so indicated.

          (g) “Termination Date” shall mean the last day of Executive’s employment with the Company.

          (h) “Termination of Employment” shall mean the termination of Executive’s active employment relationship with the Company.

     2. Termination of Employment Not Related to a Change of Control.

          (a) Termination Not Related to a Change of Control. In the event that Executive’s employment with the Company is terminated by the Company for any reason other than Cause, and not in connection with a Change of Control, Executive shall be entitled to the benefits provided in subsection (b) of this Section 2.

          (b) Compensation Upon Termination Not Related to a Change of Control. Subject to the provisions of this Agreement, in the event a termination described in subsection (a) of this Section 2 occurs, the Company shall provide Executive with the following:

               i. Executive shall receive a cash payment equal to two (2) times Executive’s annual base salary as in affect immediately prior to the Termination Date. Except as otherwise provided in this Agreement, payment shall be made in a lump sum within thirty (30) days after the date that is six (6) months following the Termination Date.

               ii. Executive shall receive cash payments equal to the premium cost that Executive pays, at COBRA rates, to continue the Company’s medical and dental coverage for Executive and, where applicable, Executive’s spouse and dependents, if receiving such coverage on the Termination Date, for a period of thirty-six (36) months following the Termination Date. Except as provided in Section 19(b), payments shall be made commencing within thirty (30) days after the date that is six (6) months following Termination Date, with the first such payment to include the amounts payable hereunder for the months preceding such first payment.

               iii. All stock options and restricted stock held by Executive will become fully vested and exercisable, as the case may be, on the Termination Date, and all stock options shall remain exercisable after the Termination Date until the option’s expiration date, without regard to Executive’s Termination of Employment.

          (c) Notice of Termination. Any termination described in this Section 2 shall be communicated by a Notice of Termination to Executive given in accordance with Section 13 hereof.

     3. Termination of Employment in Connection with a Change of Control.

 

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          (a) Termination in Connection with a Change of Control. In the event that Executive’s employment with the Company is terminated in connection with a Change of Control, as set forth in Section 2.3 of the COC Agreement, including but not limited to a voluntary resignation by Executive for Good Reason, Executive shall be entitled to the benefits provided in subsection (b) of this Section 3, in addition to the benefits provided for in the COC Agreement.

          (b) Compensation upon Termination in Connection with a Change of Control. Subject to the provisions of this Agreement, in the event a termination described in subsection (a) of this Section 3 occurs, the Company shall provide Executive with a cash payment equal to two (2) times the greater of executive’s annual base salary as in effect (i) immediately prior to the Termination Date, or (ii) at the time a Change of Control occurred. Except as otherwise provided in this Agreement, payment shall be made in a lump sum within thirty (30) days after the date that is six (6) months following the Termination Date.

          (c) Notice of Termination. Any termination on account of this Section 3 shall be communicated as provided for in the COC Agreement.

     4. Other Payments. The payments due under Sections 2 and 3 hereof shall be in addition to and not in lieu of any payments or benefits due to Executive under any other plan, policy or program of the Company, except that no cash payments shall be paid to Executive under the Company’s then current severance pay policies. In addition, Executive shall receive any amounts earned, accrued or owing but not yet paid to Executive as of the Termination Date, payable in a lump sum in the first payroll following the Termination Date, in accordance with the terms of any applicable benefit plans and programs of the Company.

     5. No Mitigation. Executive shall not be required to mitigate the amount of any payment or benefit provided for in this Agreement by seeking other employment or otherwise, nor shall the amount of any payment or benefit provided for herein be reduced by any compensation earned by other employment or otherwise.

     6. Non-Exclusivity of Rights. Except as provided in Section 4, nothing in this Agreement shall prevent or limit Executive’s continuing or future participation in or rights under any benefit, bonus, incentive or other plan or program provided by the Company or any of its subsidiaries or affiliates and for which Executive may qualify.

     7. No Set-Off. The Company’s obligation to make the payments provided for in this Agreement and otherwise to perform its obligations hereunder shall not be affected by any circumstances, including, without limitation, any set-off, counterclaim, recoupment, defense or other right which the Company may have against Executive or others.

     8. Taxes. Any payment required under this Agreement shall be subject to all requirements of the law with regard to the withholding of taxes, filings, making of reports and the like, and the Company shall use its best efforts to satisfy promptly all such requirements.

     9. Reduction of Benefits. If any payment or benefit provided to Executive by the Company pursuant to this Agreement or otherwise, including any payments due under the COC

 

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Agreement, may be considered an “Excess Parachute Payment”, as defined in Code section 280G(b)(1), then in that event, the provisions of sections 3.2.1 and 3.2.2 of the COC Agreement shall govern, and the references in the COC Agreement to the “Payment” and “Agreement Payments” shall include the aggregate of all amounts due to Executive under both this Agreement and the COC Agreement, and the “Agreement” shall mean both this Agreement and the COC Agreement, in determining whether there shall be any reduction of benefits.

     10. Deferral of Benefits. If the Company, based on written advice of reputable counsel, a copy of which shall be provided to Executive, determines that in the aggregate any benefit or payment under this Agreement and under any other arrangement or agreement between the Company and Executive would not be deductible for federal income taxes by the Company solely as a result of the application of Code section 162(m), the payment of any amounts otherwise payable under this Agreement in the then current year shall be reduced, but not below zero, by the amount of any such non-deductible amounts. The Company shall pay the entire non-deductible amount to Executive during Executive’s first taxable year in which the Company reasonably anticipates, or should reasonably anticipate, that if the payment is made during such year, the deduction of such payment will not be barred by the application of Code section 162(m). The Company shall pay interest accrued on such deferred payments, calculated at the federal short-term rate, from the date that Executive would have been entitled to payment under this Agreement without application of this Section 10 until the date of payment. All scheduled payments to Executive pursuant to this Agreement and any other agreement between Executive and the Company that could be delayed to avoid the application of Code section 162(m) shall be delayed. In addition, payments made pursuant to this Section 10 that are made on or after the Termination Date are subject to the provisions of Section 19 of this Agreement.

     11. Confidential Information. Executive shall remain subject to the terms and conditions of Executive’s Employee Confidentiality Agreement, which shall continue in full force and effect, except as specifically modified herein.

     12. Term of Agreement. This Agreement shall continue in full force and effect for the duration of Executive’s employment with the Company so long as Executive holds the position of Chief Executive Officer of the Company; provided, however, that after the termination of Executive’s employment during the term of this Agreement, this Agreement shall remain in effect until all of the obligations of the Parties hereunder are satisfied or have expired.

     13. Notice. All notices and other communications required or permitted hereunder or necessary or convenient in connection herewith shall be in writing and shall be delivered personally or mailed by registered or certified mail, return receipt requested, or by overnight express courier service, as follows:

 

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          If to the Company, to:

Airgas, Inc.
259 N. Radnor-Chester Road
Suite 100
Radnor, PA 19087
Attn: General Counsel

          If to Executive, to:

Peter McCausland
1113 Brynlawn Road
Villanova, PA 19085

or to such other names or addresses as the Company or Executive, as the case may be, shall designate by notice to the other Parties hereto in the manner specified in this Section; provided, however, that if no such notice is given by the Company following a change of control, notice at the last address of the Company or to any successor pursuant to this Section 13 shall be deemed sufficient for the purposes hereof. Any such notice shall be deemed delivered and effective when received in the case of personal delivery, five days after deposit, postage prepaid, with the U.S. Postal Service in the case of registered or certified mail, or on the next business day in the case of overnight express courier service.

     14. Governing Law. This Agreement shall be governed by and interpreted under the laws of the State of Delaware without giving effect to any conflict of laws provisions.

     15. Contents of Agreement, Amendment and Assignment.

          (a) This Agreement supersedes all prior agreements, and sets forth the entire understanding between the Parties hereto with respect to the subject matter hereof and cannot be changed, modified, extended or terminated except upon written amendment executed by Executive and executed on the Company’s behalf by a duly authorized officer. Notwithstanding, it is specifically understood and agreed that in the event if any conflict between the provisions of this Agreement and the COC Agreement, the provisions of this Agreement are to control. The provisions of this Agreement may provide for payments to Executive under certain compensation or bonus plans under circumstances where such plans would not provide for payment thereof. It is the specific intention of the Parties that the provisions of this Agreement shall supersede any provisions to the contrary in such plans, and such plans shall be deemed to have been amended to correspond with this Agreement without further action by the Company or the Board, except to the extent that shareholder or other approvals are required by the terms of such plans in order to amend such plans.

          (b) All of the terms and provisions of this Agreement shall be binding upon and inure to the benefit of and be enforceable by the respective heirs, representatives, successors and assigns of the Parties hereto. If Executive should die after the Termination Date and while any amount payable hereunder would still be payable to Executive hereunder if Executive had continued to live, all such amounts, unless otherwise provided herein, shall be paid in accordance

 

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with the terms of this Agreement to Executive’s devises, legates or other designees or, if there is no such designee, to Executive’s estate.

     16. Severability. If any provision of this Agreement or application thereof to anyone or under any circumstances shall be determined to be invalid or unenforceable, such invalidity or unenforceability shall not affect any other provisions or applications of this Agreement which can be given effect without the invalid or unenforceable provision or application.

     17. Remedies Cumulative; No Waiver. No right conferred upon the Parties by this Agreement is intended to be exclusive of any other right or remedy, and each and every such right or remedy shall be cumulative and shall be in addition to any other right or remedy given hereunder or now or hereafter existing at law or in equity. No delay or omission by a Party in exercising any right, remedy or power hereunder or existing at law or in equity shall be construed as a waiver thereof.

     18. Miscellaneous. All section headings are for convenience only. This Agreement may be executed in several counterparts, each of which is an original. It shall not be necessary in making proof of this Agreement or any counterpart hereof to produce or account for any of the other counterparts.

     19. Section 409A.

          (a) Interpretation. This Agreement shall be interpreted to avoid any penalty sanctions under section 409A of the Code. If any payment or benefit cannot be provided or made at the time specified herein without incurring sanctions under section 409A of the Code, then such benefit or payment shall be provided in full at the earliest time thereafter when such sanctions will not be imposed. All payments to be made upon Termination of Employment under this Agreement may only be made upon a “separation from service” under section 409A of the Code. For purposes of section 409A of the Code, each payment made under this Agreement shall be treated as a separate payment. In no event may Executive, directly or indirectly, designate the calendar year of payment.

          (b) Payment Delay. Notwithstanding any provision to the contrary in this Agreement, if on the Termination Date, Executive is a “specified employee” (as such term is defined in section 409A(a)(2)(B)(i) of the Code and its corresponding regulations) as determined by the Company (or any successor thereto) in its sole discretion in accordance with its “specified employee” determination policy, then all cash severance payments payable to Executive under this Agreement that are deemed as deferred compensation subject to the requirements of section 409A of the Code shall be postponed for a period of six months following Executive’s “separation from service” with the Company (or any successor thereto). The postponed amounts shall be paid to Executive in a lump sum within thirty (30) days after the date that is six (6) months following Executive’s “separation from service” with the Company (or any successor thereto). If Executive dies during such six-month period and prior to payment of the postponed cash amounts hereunder, the amounts delayed on account of section 409A of the Code shall be paid to the personal representative of Executive’s estate within sixty (60) days after Executive’s death. No interest shall be paid on any amounts delayed pursuant to this subsection.

 

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          (c) Reimbursements. All reimbursements provided under this Agreement shall be made or provided in accordance with the requirements of section 409A, including, where applicable, the requirement that (i) any reimbursement is for expenses incurred during Executive’s lifetime (or during a shorter period of time specified in this Agreement), (ii) the amount of expenses eligible for reimbursement during a calendar year may not affect the expenses eligible for reimbursement in any other calendar year, (iii) the reimbursement of an eligible expense will be made on or before the last day of the taxable year following the year in which the expense is incurred, and (iv) the right to reimbursement is not subject to liquidation or exchange for another benefit. If expenses are incurred in connection with any tax audit or litigation, any reimbursements for such expenses to which Executive may be entitled shall be paid not later than the end of Executive’s taxable year following Executive’s taxable year in which (i) the tax audit or litigation is resolved if no taxes are paid or (ii) the taxes that are subject to such audit or litigation are remitted to the taxing authority. Any tax gross up payments to be made hereunder shall be made not later than the end of Executive’s taxable year next following Executive’s taxable year in which the related taxes are remitted to the taxing authority.

     IN WITNESS WHEREOF, the undersigned, intending to be legally bound, have executed this Agreement as of the date first above written.

 

 

 

 

 

AIRGAS, INC.

 

 

 

 

 

By: /s/ Dwight Wilson

 

 

 

Attest: /s/ Judy Pellegrino

 

 

Its: Senior Vice President, Human Resources 

 

 

 

 

 

 

/s/ Vickie Perry

 

/s/ Peter McCausland

 

 

 

Witness

 

PETER MCCAUSLAND