ex10_11.htm


     

     

     


    Exhibit
      10.1.1

    


    


    TRANSACTION
      BONUS AND SEVERANCE AGREEMENT

    BY
      AND BETWEEN

    SEQUA
      CORPORATION

    AND

    GERARD
      M. DOMBEK

    


    Sequa
      Corporation and its affiliates, subsidiaries, divisions, successors and assigns
      (collectively, the “Company”) and Gerard M. Dombek (the “Employee”) mutually
      agree to enter into this Transaction Bonus and Severance Agreement (the
“Agreement”) as of the 5th day of September, 2007, the terms and conditions of
      which are set forth below.

     

    
      	
              1.  

            	
              Effective
                Date

            


    

     

    The
      effective date of this Agreement (the “Effective Date”) is the date of the
“Effective Time” of the “Merger” as those terms are defined in that certain
      Agreement and Plan of Merger dated as of July 8, 2007 by and among Blue Jay
      Acquisition Corporation, Blue Jay Merger Corporation and the
      Company.  This Agreement shall be of no force and effect if such
      merger is not consummated.  In addition, this Agreement shall be of no
      force and effect if the employment of the Employee terminates for any reason
      prior to the Effective Date.

     

    
      	
              2.  

            	
              Transaction
                Bonus

            


    

     

    Subject
      to Section 6 below, if the Employee remains in the employment of the Company
      until the Effective Date, the Company shall pay to the Employee in a single
      lump
      sum within fifteen (15) days after the Effective Date, a bonus in the amount
      of
      $600,000.

     

    
      	
              3.  

            	
              Severance
                Payment

            


    

     

    Subject
      to Sections 4, 6 and 7 below, if (i) the Employee remains in the employment
      of
      the Company until the Effective Date, and (ii) his employment with the Company
      terminates within the two (2)-year period beginning on the Effective Date either
      by reason of an involuntary termination of employment by the Company without
      Cause (as defined below) or by reason of a termination of employment by the
      Employee for Good Reason (as defined below), the Company shall pay to the
      Employee in a single lump sum within sixty (60) days after such termination
      of
      employment a severance benefit in an amount equal to two (2) times the greater
      of the Employee’s rate of annual base salary as in effect on the date of this
      Agreement or the Employee’s rate of annual base salary as in effect immediately
      prior to such termination of employment; provided, however, that (A) the
      Employee’s entitlement to such payment shall be conditioned on the Employee’s
      execution, within fifty (50) days following such termination of employment,
      of
      an agreement and general release in a customary form to be provided by the
      Company in its sole good faith discretion and not revoking such release; (B)
      if
      the termination of the Employee’s employment occurs within the last fifty (50)
      days of a calendar year, the payment shall be made in the succeeding calendar
      year but no later than sixty (60) days after such termination of employment,
      and
      (C) in no event shall the Employee be entitled to such payment if the
      Employee’s

     


    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    


    employment
      terminates as a result of death or Disability.  It is expressly
      understood that said agreement and general release shall not require the
      Employee to waive (i) any right to indemnification the Employee may have under
      applicable bylaws or insurance policies maintained by the Company or its
      subsidiaries or (ii) any right to vested employee benefits.

     

    For
      purposes of this Agreement, the term “Cause” shall mean a reasonable and good
      faith determination by the Company that the Employee (i) has failed, including
      either willfully or grossly negligently, to perform the Employee’s duties; (ii)
      has engaged in misconduct which is injurious to the Company (including but
      not
      limited to violations of policies related to workplace practices and
      harassment); (iii) has been convicted of a crime (including conviction or a
      nolo
      contendere plea) involving, in the good faith judgment of the Company, fraud,
      dishonesty or moral turpitude; (iv) has breached any of the non-competition,
      non-disclosure, non-solicitation or other restrictive covenants contained in
      the
      employment agreement dated May 31, 2005 between the Company and the Employee,
      as
      amended by letter agreements dated May 10, 2006 and May 3, 2007 (the “Employment
      Agreement”) or any other employment or other agreement between the Company and
      the Employee; (v) has intentionally refused (except by reason of incapacity
      due
      to physical or mental illness or disability by the Employee) to devote his
      entire business time to the performance of his duties as an employee of the
      Company; (vi) has breached the provisions of the Company’s trade secrets
      agreement to which he is a party; (vii) has engaged in theft or misappropriation
      of assets of the Company; or (viii) has engaged in any willful, intentional
      or
      grossly negligent act having the effect of injuring the reputation or business
      of the Company; or (ix) materially breached the Company’s Code of
      Conduct.

     

    For
      purposes of this Agreement, the term “Good Reason” shall mean the existence of
      one or more of the following conditions arising without the consent of the
      Employee:  (i) a material diminution in the Employee’s base
      compensation; (ii) a material diminution in the Employee’s authority, duties or
      responsibilities; or (iii) a material change in the geographic location at
      which
      the Employee must perform the Employee’s services to the Company.  A
      material diminution in the Employee’s authority, duties or responsibilities
      within the meaning of clause (ii) of the preceding sentence shall not be deemed
      to have occurred merely because the Company ceases to be a public company or
      there is a change in the person or entity to whom the Employee reports or
      because the Employee’s title is changed, provided the Employee’s authority,
      duties and responsibilities otherwise remain substantially the
      same.  Notwithstanding the foregoing, the Employee’s termination of
      employment shall not be considered as for Good Reason unless the Employee
      provides written notice to the Company of the existence of the condition or
      conditions providing the basis for a Good Reason termination within ninety
      (90)
      days of the initial existence of the condition and the Company fails to remedy
      the condition within thirty (30) days after receiving such notice.

     

    For
      purposes of this Agreement, the term “Disability” shall have the meaning set
      forth in the Employee’s employment or similar agreement with the Company, or if
      there is no such agreement containing a definition of “Disability”, the term
“Disability” shall mean that the Employee is physically or mentally
      incapacitated so as to render the Employee incapable of performing the essential
      functions of the job and such incapacity cannot be reasonably accommodated
      by
      the Company without undue hardship.

     


    
      
        
        

      

      
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              4.  

            	
              Reduction
                for Other Severance
                Payments

            


    

     

    Anything
      in this Agreement to the contrary notwithstanding, if the Employee becomes
      entitled to the severance payment described in Section 3 above and is also
      entitled to severance payments described in the Employment Agreement or under
      any other plan, program, agreement or arrangement with the Company or other
      severance payments imposed by applicable law, the severance payment described
      in
      Section 3 above shall be reduced by the principal amount of any such other
      severance payments (even if such other severance payments are payable at a
      different time or in a different form than the severance payment described
      in
      Section 3 above).  In such event, the terms of such other severance
      plan, program, agreement or arrangement or applicable law shall continue to
      govern the time and form of payment of the amounts payable
      thereunder.  The severance payment described in Section 3 above shall
      be reduced only by cash severance payments made by reason of the termination
      of
      the Employee’s employment  and shall not be reduced by any other types
      of benefits that may be provided by reason of such termination of employment
      (including, but not limited to, continued medical or other welfare benefits
      or
      payments in kind, if any).

     

    
      	
              5.  

            	
              Withholding

            


    

     

    The
      Company shall withhold from any payment under this Agreement, or any payroll
      or
      other payment to the Employee, amounts of withholding and other taxes due in
      connection with any payment under this Agreement.

     

    
      	
              6.  

            	
              Golden
                Parachute Reduction

            


    

     

    Notwithstanding
      the other provisions of this Agreement, in the event that the amount of payments
      payable to the Employee under this Agreement, together with any payments or
      benefits payable under any other plan, program, arrangement or agreement
      maintained by the Company, would constitute an “excess parachute payment”
(within the meaning of Section 280G of the Internal Revenue Code of 1986,
      as amended), the payments under this Agreement shall be reduced (by the minimum
      possible amounts) until no amount payable to the Employee under this Agreement
      constitutes an “excess parachute payment” (within the meaning of
      Section 280G of the Internal Revenue Code of 1986, as amended);
provided, however, that no such reduction shall be made if the net
      after-tax payment (after taking into account Federal, state, local or other
      income and excise taxes) to which the Employee would otherwise be entitled
      without such reduction would be greater than the net after-tax payment (after
      taking into account Federal, state, local or other income and excise taxes)
      to
      the Employee resulting from the receipt of such payments with such
      reduction.  If, as a result of subsequent events or conditions
      (including a subsequent payment or absence of a subsequent payment under this
      Agreement or other plans, programs, arrangements or agreements maintained by
      the
      Company), it is determined that payments under this Agreement have been reduced
      by more than the minimum amount required to prevent any payments from
      constituting an “excess parachute payment,” then an additional payment shall be
      promptly made to the Employee in an amount equal to the additional amount that
      can be paid without causing any payment to constitute an “excess parachute
      payment.”  All determinations required to be made under this
      Section 6, including whether a payment would result in an “ex-

     


    
      
        
        

      

      
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    cess
      parachute payment” and the assumptions to be utilized in arriving at such
      determination, shall be made by a Big Four accounting firm selected by the
      Company which shall provide detailed supporting calculations both to the Company
      and the Employee as requested by the Company or the Employee.  All
      fees and expenses of the accounting firm shall be borne solely by the Company
      and shall be paid by the Company.  All determinations made by the
      accounting firm under this Section 6 shall be final and binding upon the
      Company and the Employee.

     

    
      	
              7.  

            	
              Compliance
                with Internal Revenue Code Section
                409A

            


    

     

    If
      it
      should be determined that the severance payment described in Section 3 above
      constitutes a “deferral of compensation” subject to Section 409A of the Internal
      Revenue Code of 1986, as amended, then, notwithstanding anything in this
      Agreement to the contrary, (i) if the Employee is a “specified employee” (within
      the meaning of said Section 409A and the regulations thereunder and as
      determined by the Company in accordance with Section 409A) at the time of the
      Employee’s separation from service (as defined below), the distribution of the
      severance payment described in Section 3 above shall be delayed until the date
      which is 6 months after the date of the Employee’s separation from service (or,
      if earlier than the end of such 6-month period, the date of the Employee’s
      death) and (ii) the Employee shall not be deemed to have terminated from
      employment for purposes of Section 3 above unless the Employee has experienced
      a
“separation from service” within the meaning of said Section 409A and the
      regulations thereunder.  To the extent the severance payment hereunder
      is subject to the 6-month delay, such severance payment will be paid immediately
      after the end of such 6-month period.  If this Section 7 becomes
      applicable, this Agreement shall be interpreted and operated consistently with
      the requirements of Section 409A of the Internal Revenue Code of 1986, as
      amended, and the regulations thereunder.

     

    
      	
              8.  

            	
              Governing
                Law and Choice of
                Forum

            


    

     

    This
      Agreement shall be governed and construed in accordance with the laws of the
      State of New York without regard to its conflict of laws
      provisions.

     

    
      	
              9.  

            	
              Modification

            


    

     

    No
      modification of this Agreement shall be valid unless made in writing wherein
      specific reference is made to this Agreement and signed by both parties
      hereto.

     

    
      	
              10.  

            	
              Binding
                Effect

            


    

     

    This
      Agreement shall be binding upon the Employee, the Employee’s heirs, executors
      and administrators and shall inure to the benefit of the
      Company.  This Agreement shall be binding upon the Company (including
      its successors and assigns).  This Agreement may not be assigned by
      Employee, but may be assigned by Sequa Corporation to a purchaser of its
      business or assets.

     


    
      
        
        

      

      
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              11.  

            	
              Confidentiality

            


    

     

    Employee
      agrees that the terms of this Agreement are strictly confidential and he,
      without the prior written consent of the Company, shall not disclose in any
      way
      to any third person the terms and conditions of this
      Agreement.  Nothing in this Section shall be construed to prohibit the
      disclosure of such information by Employee to his immediate family members
      or to
      any legal or financial advisor, provided that persons to whom the disclosure
      is
      being made agree to be bound by the confidentiality provisions of this
      Section.  Nothing in this Section shall be construed to prohibit the
      disclosure by Employee of such information as may be required by
      law.

    


     

    IN
      WITNESS WHEREOF, the parties hereto knowingly and voluntarily executed this
      Agreement, as of the date first written above.

     

    
      	
              EMPLOYEE

            
	 
	 
	/s/
              Gerard M. Dombek        
	
              Gerard
                M. Dombek

            
	 
	 
	
              SEQUA
                CORPORATION

            
	 
	 
	 
	
              By: 
                /s/ Martin Weinstein      

            


    

    
 

     

     

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