ex10_21.htm


    
 

    Exhibit
      10.2.1


    TRANSACTION
      BONUS AND SEVERANCE AGREEMENT

    BY
      AND BETWEEN

    SEQUA
      CORPORATION

    AND

    JOHN
      J. DOWLING III

    


    THIS
      TRANSACTION BONUS AND SEVERANCE AGREEMENT (the “Agreement”) is made this 23rd
      day of October, 2007 by and between Sequa Corporation and its affiliates,
      subsidiaries, divisions, successors and assigns (collectively, the “Company”)
      and John J. Dowling III (“Employee”).

     

    W
      I T N E
      S S E T H:

     

    WHEREAS,
      Sequa Corporation is a party to 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 Sequa Corporation (the “Merger Agreement”);
      and

     

    WHEREAS,
      in connection with the “Merger” contemplated by the Merger Agreement, the
      Company desires to provide additional consideration to the Employee for his
      continued employment through the “Effective Time” of the “Merger” (as such terms
      are defined in the Merger Agreement) and if the Employee is involuntarily
      terminated other than for cause or terminates for good reason within two years
      after the Effective Time; and

     

    WHEREAS,
      it is intended that the Company’s obligation to pay such consideration be
      conditioned on the Employee’s compliance with the non-competition provisions
      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”), subject to the terms
      hereof.

     

    NOW,
      THEREFORE, the Company and the Employee mutually agree to enter into this
      Agreement, 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 the Merger
      Agreement.  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, 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
      $750,000 (the “Transaction Bonus).”

     

    
      
        
        

      

      
        -1-

        
          

        

      

      
        
        

      

    

     

    
      	
              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 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 (the “Severance Benefit”); provided,
      however, that (A) the Employee’s entitlement to the Severance Benefit 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, (C) in no event shall the Employee be entitled
      to the Severance Benefit if the Employee’s employment terminates as a result of
      death or Disability; and (D) the Employee’s entitlement to the Severance Benefit
      shall be conditioned on his compliance with the non-competition provisions
      in
      the Employment Agreement, which shall
      similarly apply to the Severance Benefit.  An amount equal to $650,000
      of the Severance Benefit shall constitute additional consideration for the
      Employee’s non-competition agreement contained herein.

     

    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 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.

     

    
      
        
        

      

      
        -2-

        
          

        

      

      
        
        

      

    

    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.

     

    
      	
              4.  

            	
              Reduction
                of Severance Benefit

            


    

     

    Anything
      in this Agreement to the contrary notwithstanding, if the Employee becomes
      entitled to the Severance Benefit as 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 Benefit as 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 Benefit).  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 Benefit
      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).

     

    Additionally,
      if it is determined by a court of competent jurisdiction that the Employee
      breached the non-competition provisions contained in the Employment Agreement,
      (a) the Company’s obligation to provide the Severance Benefit shall cease and
      the Employee shall not be entitled to any further payments under this Agreement,
      (b) the Employee shall repay to the Company all of the Severance Benefits the
      Employee has already received that is consideration for the non-competition
      agreement contained in Section 3(D) herein, and (c) the Company shall have
      all
      other remedies available under applicable law.

     

    
      
        
        

      

      
        -3-

        
          

        

      

      
        
        

      

    

     

    
      	
              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 “excess 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 Benefit 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 Benefit shall
      be


     

    
      
        
        

      

      
        -4-

        
          

        

      

      
        
        

      

       

      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
        Benefit hereunder is subject to the 6-month delay, such Severance Benefit
        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.

     

    
      	
              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.

     

    
      
        
        

      

      
        -5-

        
          

        

      

       

    


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

     

                                    EMPLOYEE

    
 

                                    /s/
      John J.
      Dowling
      III                                            


                                    John
      J. Dowling
      III

     

                                    SEQUA
      CORPORATION

     

                                    By:     /s/
      Martin
      Weinstein                                   


                                        Martin
      Weinstein

     

    

 

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