Exhibit 10.49



 




EXHIBIT
10.49



ARGO-TECH CORPORATION

23555 Euclid Avenue

Cleveland, OH 44117




October 28, 2005




Mr. John S. Glover

11965 Lambert Street

Tustin, CA 92782




Dear John:




	 	 	 
	Re:

	 	Severance Benefits Payable Upon a Change of Control






     Argo-Tech Corporation (the “Company”) considers the maintenance of a sound management
team to be essential to protecting and enhancing the best interests of the Company and its
stockholders. In this connection, the Company recognizes that the possibility of a change in
control may exist from time to time, and that this possibility, and the uncertainty and questions
it may raise among management and employees, may result in the departure or distraction of
management and other personnel to the detriment of the Company and its stockholders. Accordingly,
the Company has determined that appropriate steps should be taken to encourage the continued
attention and dedication of members of the Company’s management and other key employees, including
yourself, to their assigned duties without the distraction which may arise from the possibility of
a change in control of the Company.



     This letter agreement (this “Agreement”) is not an employment contract nor does it
alter your status as an at-will employee of the Company. Just as you remain free to leave the
employ of the Company at any time, so too does the Company retain its right to terminate your
employment without notice, at any time, for any reason. However, the Company believes that, both
prior to and at the time a change in control is anticipated or occurring, it is necessary to have
your continued attention and dedication to your assigned duties without distraction. Therefore,
should you still be an employee of the Company at such time, the Company agrees that you shall
receive the severance benefits hereinafter set forth in the event your employment with the Company
terminates in contemplation of or subsequent to a “Change in Control” (as defined in Section 1
hereof) under the circumstances described below.



     For good and valuable consideration, the sufficiency and receipt of which is acknowledged, the
Company and you agree as follows:



     1. Change in Control. No benefits shall be payable hereunder unless there shall have been a Change
in Control (as defined below) of the Company and your employment with the Company or any of its
subsidiaries shall have been terminated in accordance with Section 3 below. For purposes of this
Agreement, a “Change in Control” means the consummation of a transaction, whether in a single
transaction or in a series of related transactions that are consummated contemporaneously (or
consummated pursuant to contemporaneous agreements),



 









 




with any other party or parties on an arm’s-length basis, pursuant to which such party or parties (a) acquire (whether by merger, stock
purchase, recapitalization, reorganization, redemption, issuance of capital stock or otherwise)
more than 50% of the voting stock of the Company or (b) acquire assets constituting all or
substantially all of the assets of the Company and its subsidiaries on a consolidated basis.



     2. Termination of Employment Following a Change in Control.



          (a) If at any time after the date hereof any of the events described in Section 1 hereof
constituting a Change in Control of the Company occurs and in contemplation thereof, in connection
therewith or within 6 months thereafter (i) you involuntarily cease to be an employee of the
Company or any of its subsidiaries for any reason other than termination for Cause (as defined
below ), Disability (as defined below) or death or (ii) you terminate your employment with the
Company and its subsidiaries for Good Reason (as defined below ) then:





          (i) The Company shall pay to you in addition to other amounts that may be payable to
you in connection with the termination of your employment an amount equal to the sum of your
then current annual base salary and annual bonus for the preceding fiscal year, payable over
the one year period following your termination in regular installments in accordance with
the Company’s general payroll practices; and




          (ii) the Company shall provide you continued coverage under the Company’s group health
plans until the earlier of (x) one year following the Date of Termination and (y) the date
you become eligible for comparable coverage under health plans of any successor employer.



          (b) Your employment shall be deemed to be terminated for “Cause” if:





          (i) you are indicted or charged with, or plead guilty or nolo contendere to, (A) a
felony or (B) a crime involving moral turpitude that is either materially detrimental to the
Company or that which brings the Company into public disgrace or disrepute;




          (ii) in carrying out your duties of employment, you engage in conduct that constitutes
gross neglect or willful misconduct;




          (iii) you engage in willful misconduct resulting in or intended to result in direct
personal gain to you at the Company’s expense or that brings the Company into public
disgrace or disrepute, or you have made, or are aware of, any material misrepresentation to
V.G.A.T. Investors, LLC (“Parent”) or any of its subsidiaries in any Transaction
Document (as defined in that certain Agreement and Plan of Merger, dated the date hereof, by
and among Parent, the Company, AT Holdings Corporation, Greatbanc Trust Company, Vaughn
Merger Sub, Inc. and Paul R. Keen, as Stockholders’ Representative);




          (iv) you breach any material provision of this Agreement (including Section 4 hereof),
or you breach in any material respect any Company policy governing employee conduct in the
workplace, including without limitation, policies relating to the



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use of illicit drugs, alcohol abuse and sexual harassment, and such breach has not been cured prior to 30 days
following notice from the Company;




          (v) you repeatedly refuse to perform duties or responsibilities as reasonably directed
by the Board or any executive to whom you report; or




          (vi) you breach of a fiduciary obligation to the Company or materially breach any
confidentiality or non-competition obligations.



          (c) For purposes of this Agreement, “Good Reason” shall mean a termination of your employment
by you on thirty (30) days’ written notice to the Company following the occurrence of any of the
following events, which notice shall be given within 10 days following you become aware of such
occurrence, without your express prior written consent, unless all grounds for termination shall
have been fully cured prior to thirty (30) days after you give notice to the Company requesting
cure:





          (i) any failure of the Company to continue your employment as Vice President, Finance
of the Company;




          (ii) any material diminution in your then responsibilities or authorities or the
assignment you of duties that are materially inconsistent with, or materially impair your
ability to perform, the duties then assigned to you;




          (iii) any material breach by the Company of any of its obligations under this Agreement
which has not been cured prior to 30 days following notice from you of such breach or if the
Company decreases your then current salary (other than due to administrative error which is
cured promptly);




          (iv) any permanent relocation to a facility that is more than 60 miles from the then
current location of your employment with the Company; or




          (v) any failure of the Company to obtain the assumption in writing of its obligations
under this Agreement by any successor to all or substantially all of its business or assets
within thirty (30) days after any reconstruction, amalgamation, combination, merger,
consolidation, sale, liquidation, dissolution or similar transaction.



          (d) For purposes of this Agreement, “Disability” shall mean a determination by the Board of
Directors of the Company (the “Board”) in its good faith judgment with input from
appropriate medical personnel that you are unable to substantially perform your job
responsibilities as a result of chronic illness, physical, mental or any other disability for a
period of 180 days or more in any 365 consecutive day period. You shall co-operate and make
yourself available for any medical examination reasonably required by the Company with respect to
any determination of a Disability.




          (e) Notice of Termination. Any termination by the Company or by you shall be communicated by
Notice of Termination to the other party hereto given in accordance with Section 5(c) of this
Agreement. For purposes of this Agreement, a “Notice of Termination” means a written notice which
(i) indicates the specific termination provision in this Agreement




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relied upon, (ii) to the extent applicable, sets forth in reasonable detail the facts and circumstances claimed to provide a basis
for termination employment under the provision so indicated and (iii) if the date of termination of
your employment is other than the date of receipt of such notice, specifies the termination date
(which date shall be not more than thirty days after the giving of such notice). The failure by
you or the Company to set forth in the Notice of Termination any fact or circumstance which
contributes to a showing of Good Reason or Cause shall not waive any of your or the Company’s
rights hereunder, respectively, or preclude you or the Company, respectively, from asserting such
fact or circumstance in enforcing your or the Company’s rights hereunder.




          (f) Release. The severance payments and such benefits to be provided by the Company pursuant
to this Section 2 shall (i) be in lieu of any other payments by the Company to you and (ii) be
subject to your execution (other than in the case of your death) of a release agreement in
substantially the form attached hereto as Exhibit A,




     3. Nonsolicitation; Etc. You acknowledges that in the course of your employment with the
Company you will become familiar with the Company’s and its subsidiaries’ trade secrets and other
confidential information concerning the Company and such subsidiaries (collectively, the
“Confidential Information”) and that your services will be of special, unique and
extraordinary value to the Company and its subsidiaries. Therefore, you agree and acknowledge
that:



          (a) Nonsolicitation. During the two-year period following your termination of employment with
the Company, you shall not directly or indirectly (i) induce or attempt to induce any employee of
the Company or any of its subsidiaries to leave the employ of the Company or such subsidiary, or in
any way interfere with the relationship between the Company or any subsidiary and any employee
thereof, including inducing or attempting to induce any union, employee or group of employees to
interfere with the business or operations of the Company or its subsidiaries or (ii) hire any
person who was an employee of the Company or any subsidiary unless at least twelve months has
elapsed since the termination of such employee’s employment with the Company or any subsidiary, as
the case may be. Furthermore, during the one-year period following the termination of your
employment of the Company, you shall not directly or indirectly induce or attempt to induce any
customer, supplier, distributor, franchisee, licensee or other business relation of the Company or
any subsidiary to cease doing business with the Company or such subsidiary, or in any way interfere
with the relationship between any such customer, supplier, distributor, franchisee, licensee or
business relation and the Company or any subsidiary.




          (b) Confidentiality.





          (i) The continued success of the Company and its subsidiaries and other affiliates
depends upon the use and protection of a large body of confidential and proprietary information, including, without limitation, confidential and proprietary
information now existing or to be developed in the future. “Confidential Information” will
be defined to include all information of any sort (whether merely remembered or embodied in
a tangible or intangible form or medium) that is (i) related to the Company’s or its
subsidiaries’ or other affiliates’ prior, current or potential business or operations



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and (ii) not generally or publicly known. Confidential Information includes, without
limitation, the information, observations and data of the Company and its subsidiaries and
other affiliates including, without limitation, designs, drawings, photographs and other
works and reports (including, without limitation, all Company Works); programs, software,
source code, object code, diagrams, flow charts, manuals, documentation and databases;
know-how, data, designs, specifications, improvements, inventions, devices, new
developments, methods and processes, whether patentable or unpatentable and whether or not
reduced to practice; all technology and trade secrets; information concerning development,
acquisition or investment opportunities in or reasonably related to the Company’s or its
subsidiaries’ or other affiliates’ business or industry of which you are aware or become
aware during the term of your employment, the persons or entities that are current, former
or prospective suppliers or customers of any one or more of them during your employment with
the Company; development, transition and transformation plans, methodologies and methods of
doing business, strategic, marketing and expansion plans, including plans regarding planned
and potential sales, pricing and cost information, financial and business plans, employee,
customer and supplier lists and telephone numbers, locations of sales representatives, new
and existing programs and services, prices and terms, customer service, integration
processes, requirements and costs of providing service, support and equipment; and all
similar and related information in whatever form or medium.




          (ii) You shall not disclose or use for your own account any of such Confidential
Information, except as reasonably necessary for the performance of your duties of employment
with the Company, without the prior written consent of the Board, unless and to the extent
that any Confidential Information (i) becomes generally known to and available for use by
the public other than as a result of your breach or actions in violation of this Agreement
or other improper acts or omissions to act or otherwise (ii) is required to be disclosed
pursuant to any applicable law or court order, provided, however that, you must give Company
prompt written notice of any such legal requirement, disclose no more information than is so
required and seek confidential treatment where available, and cooperate fully with all
efforts by the Company to obtain a protective order or similar confidentiality treatment for
such information. Upon the termination of your employment hereunder, or at any other time
the Company may request in writing, you agree to deliver to the Company all memoranda,
notes, plans, records, reports, notebooks (and similar repositories of or containing
Confidential Information) and other documents (and all copies, summaries and extracts
thereof, in whatever form or medium) relating to the business or operations of the Company
or its subsidiaries or other affiliates or that otherwise constitute Confidential
Information, and at any time thereafter, if any such materials are brought to your attention
or you discover them in your possession or control, you shall deliver such materials to the
Company immediately upon such notice or discovery



          (c) Inventions and Patents. If you creates, invents, designs, develops, contributes to or
improves any works of authorship, inventions, whether patentable or unpatentable and whether or not
reduced to practice, know-how, data, processes, methods, programs, systems, materials, documents or
other work product or other intellectual property, either alone or in conjunction with third
parties, at any time during your employment by or




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engagement with the Company (“Works”), to the extent that such Works were created, invented, designed, developed, contributed to, or improved
with the use of any Company resources and/or within the scope of such employment or engagement
and/or relate to the business or operations, or actual or demonstrably anticipated research or
development, of the Company or its subsidiaries or other affiliates (collectively, the “Company
Works”), you shall promptly and fully disclose such Company Works to the Company. Any
copyrightable work falling within the definition of Company Works shall be deemed a “work made for
hire” as such term is defined in 17 U.S.C. § 101. You hereby (i) irrevocably assigns, transfers
and conveys, to the extent permitted by applicable law, all right, title and interest in and to the
Company Works on a worldwide basis (including, without limitation, rights under patent, copyright,
trademark, trade secret, unfair competition and related laws) to the Company or such other entity
as the Company shall designate, to the extent ownership of any such rights does not automatically
vest in the Company under applicable law and (ii) waives any moral rights therein to the fullest
extent permitted under applicable law. You agree that you will not use any Company Works for your
personal benefit, the benefit of a competitor, or for the benefit of any other person or entity
other than the Company. You agree to execute any further documents and take any further actions
requested by the Company to assist it in validating, effectuating, maintaining, protecting,
enforcing, perfecting, recording, patenting or registering any of its rights hereunder.




          (d) Enforcement. The parties to this Agreement hereby agree and stipulate that (i) the
restrictions contained in this Agreement are reasonable and necessary in order to protect the
Company’s and its subsidiaries’ legitimate business interests and (ii) in the event of any breach
or violation of this Agreement or of any provision hereof by you, the Company and its subsidiaries
will have no adequate remedy at law and will suffer irreparable loss and damage thereby. The
parties hereby further agree and stipulate that in the event of any such breach or violation,
either threatened or actual, the Company’s and its subsidiaries’ rights shall include, in addition
to any and all other rights available to the Company and its subsidiaries at law or in equity, the
right to seek and obtain any and all injunctive relief or restraining orders available to it in
courts of proper jurisdiction, so as to prohibit, bar, and restrain any and all such breaches or
violations by you. The prevailing party to any legal action, arbitration or other proceeding
commenced in connection with enforcing any provision of this Section 3, including without
limitation, obtaining the injunctive relief provided by this Section 3 shall be entitled to recover
all court costs, reasonable attorneys’ fees, and related expenses incurred by such party. You
further agree that no bond need be filed in connection with any request by the Company and its
subsidiaries for a temporary restraining order or for temporary or preliminary injunctive relief.




          (e) Additional Acknowledgments. You acknowledge that the provisions of this Section 3 are in
consideration of: (i) employment with the Company, (ii) the issuance of certain limited liability
company interests of V.G.A.T. Investors, LLC to you and (iii) additional good and valuable
consideration as set forth in this Agreement. In addition, you acknowledge (i) that the business
of the Company and its subsidiaries is international in scope and without geographical limitation
and (ii) notwithstanding the state of incorporation or principal office of
the Company or any of its subsidiaries, or any of their respective executives or employees
(including you), it is expected that the Company will have business activities and have valuable
business relationships within its industry throughout the world. You acknowledge that you have
carefully read this Agreement and has given careful consideration to the restraints imposed upon
you by this Agreement, and are in full accord as to their necessity for the reasonable and proper




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protection of confidential and proprietary information of the Company and its subsidiaries now
existing or to be developed in the future. You expressly acknowledge and agree that each and every
restraint imposed by this Agreement is reasonable with respect to subject matter, time period and
geographical area.




     4. Successors.



          (a) This Agreement is personal to you and without the prior written consent of the Company
shall not be assignable by you otherwise than by will or the laws of descent and distribution.
This Agreement shall inure to the benefit of and be enforceable by the your legal representatives.




          (b) This Agreement shall inure to the benefit of and be binding upon the Company and its
successors and assigns.




     5. Miscellaneous.



          (a) This Agreement and any dispute, disagreement, or issue of construction or interpretation
arising hereunder whether relating to its execution, its validity, the obligations provided therein
or performance shall be governed or interpreted according to the internal laws of the State of New
York applicable to contracts entered into and to be performed solely within such State without
regard to choice of law considerations. The parties hereto hereby waive, to the fullest extent by
applicable law, any right to trial by jury with respect to any action or proceeding arising out of
or relating to this Agreement.




          (b) Any disputes with regard to this Agreement that is not resolved by mutual agreement, other
than as provided in Section 3(d) hereof, shall be resolved by binding arbitration before the
American Arbitration Association (“AAA”) in New York City pursuant to the rules of AAA.
The arbitration shall be governed by the United States Arbitration Act, 9 U.S.C. §§1-16 and shall
be conducted in accordance with the rules and procedures of AAA. Any judgment upon the reward
rendered by the arbitrator may be entered in any court having jurisdiction thereof. The
arbitrator’s decision shall set forth a reasoned basis for any award of damages or findings of
liability. The arbitrator shall not have the power to award damages in excess of actual
compensatory damages and shall not multiply actual damages or award punitive damages, and each
party hereby irrevocable waives any claim to such damages. The costs of AAA and the arbitrator
shall be borne by the Company. Each party shall bear its own costs (including, without limitation,
legal fees and fees of any experts) and out-of-pocket expenses.




          (c) All notices, demands or other communications to be given or delivered under or by reason
of the provisions of this Agreement will be in writing and will be deemed to have been given when
delivered personally, mailed by certified or registered mail, return receipt requested and postage
prepaid, or sent via a nationally recognized overnight courier, or sent via facsimile to the
recipient with telephonic confirmation by the sending party. Such notices, demands and other
communications will be sent to the address indicated below:




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	If to you:
	 
	 	 
	 
	 	 
	John S. Glover
	 
	 	 
	11965 Lambert Street
	Tustin, CA 92782
	 
	 	 
	If to the Company:
	 
	 	 
	V.G.A.T. Investors LLC
	 
	 	 
	c/o Vestar Capital Partners IV, L.P.
	245 Park Avenue, 41st Floor
	New York, New York 10167
	Telecopy: (212) 808 4922
	Attention:

	 	John Woodard
	 

	 	General Counsel
	 
	 	 
	and
	 	 
	 
	 	 
	c/o Greenbriar Equity Group LLC
	555 Theodore Fremd Avenue
	Rye, New York 10580
	Telecopy: (914) 925-9699
	Attention:

	 	Reginald L. Jones
	 

	 	John Daileader
	 
	 	 
	with a copies to (which shall not constitute notice to the Company):
	 
	 	 
	Kirkland & Ellis LLP
	Citigroup Center
	153 East 53rd Street
	New York, NY 10022
	Telecopy: (212) 446-4900
	Attention:

	 	Michael Movsovich, Esq.
	 

	 	Christopher Neumann, Esq.





or such other address or to the attention of such other person as the recipient party shall have
specified by prior written notice to the sending party. Any notice under this Agreement shall be
deemed to have been given when so delivered, sent or mailed.




          (d) Subject to the provisions of Section 2(a), there shall be no limitation on the ability of
the Company to terminate your employment at any time with or without Cause.




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          (e) Whenever possible, each provision of this Agreement will be interpreted in such manner as
to be effective and valid under applicable law, but if any provision of this Agreement is held to
be invalid, illegal or unenforceable in any respect under any applicable law or rule in any
jurisdiction, such invalidity, illegality or unenforceability will not affect any other provision
or any other jurisdiction, but this Agreement will be reformed, construed and enforced in such
jurisdiction as if such invalid, illegal or unenforceable provision had never been contained
herein.




          (f) The captions of this Agreement are not part of the provisions hereof and shall have no
force or effect. This Agreement may not be amended or modified otherwise than by a written
agreement executed by the parties hereto or their respective successors and legal representatives.




          (g) The Company may withhold from any amounts payable under this Agreement such Federal,
state, local or foreign taxes as shall be required to be withheld pursuant to any applicable law or
regulation.




          (h) Your or the Company’s failure to insist upon strict compliance with any provision of this
Agreement or the failure to assert any right you or the Company may have hereunder shall not be
deemed to be a waiver of such provision or right or any other provision or right of this Agreement.




          (i) From and after the Effective Date this Agreement shall supersede any other agreement
between the parties with respect to the subject matter hereof.




* * * * * * * * *




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     If this letter correctly sets forth our agreement on the subject matter hereof, kindly sign
and return to the Company this letter and the enclosed copy of this letter which will then
constitute our agreement on this subject. We will return the copy of this letter to you.



	 	 	 	 	 
	 	Sincerely,



ARGO-TECH CORPORATION


 	 
	 	By:  	/s/ Paul R. Keen
 	 
	 	 	Name:  	Paul R. Keen 	 
	 	 	Title:  	Vice President 	 
	 



Agreed to as of October __, 2005




	 
	 

	 

	  /s/ John S. Glover

	 

	John S. Glover







 









 





Exhibit A




FORM OF RELEASE AGREEMENT




          In consideration of receipt of severance payments and benefits as set forth in Section 2 of
the Letter Agreement, dated as of                     , 2005, by and between Argo-Tech Corporation (the
“Company”) and [  ] (the “Letter Agreement”), I,                                         , hereby release and
discharge the Company, and each of its employees, officers, directors, stockholders, agents,
subsidiaries and other affiliates from, and waive any and all claims, demands, damages, causes of
action or suits (collectively, “Claims”) of any kind or nature whatsoever that I may have
had or may now have against any of them (including, without limitation, any Claims arising out of
or related to my employment with the Company or the termination thereof), whether arising under
contract, tort, statute or otherwise, and whether I know of the claim or not, including, without
limitation, Claims arising under Title VII of the Civil Rights Act of 1964, the Age Discrimination
in Employment Act, the Americans with Disabilities Act, the Equal Pay for Equal Work Act, and any
other applicable federal, state or local statutes, rules, codes, or ordinances. Notwithstanding
anything herein to the contrary this release does not cover (i) my rights to the severance payments
and benefits provided in Section 2 of the Letter Agreement; (ii) my rights to any vested or accrued
benefits or rights under the applicable terms of Company plans, programs, or arrangements; (iii)
any Claim by me to enforce the rights arising under or preserved by the Letter Agreement that
survive expressly survive termination of my employment; (iv) any Claim by me to enforce
indemnification rights as provided in the Company’s articles of incorporation and (v) my rights in
my capacity as an equity holder of V.G.A.T. Investors, LLC and/or AT Holdings Corporation unless
such right is terminated by its terms due to the termination of my employment with the Company.




          I have not, and shall not hereafter, institute any lawsuit of any kind whatsoever, or file any
complaint or charge, against the Company or any of its former or present employees, officers,
directors, stockholders, agents, subsidiaries, or affiliates, and any of their successors or
assigns, under any federal, state or local statute, rule, regulation or principle of common law
growing out of events released hereunder. I shall not seek employment or reemployment with the
Company. I acknowledge that I have had at least 21 days to review and consider this release
agreement before accepting it. I have been advised to consult with an attorney before signing this
release agreement.




          This release agreement and any dispute, disagreement, or issue of construction or
interpretation arising hereunder whether relating to its execution, its validity, the obligations
provided therein or performance shall be governed or interpreted according to the internal laws of
the State of New York applicable to contracts entered into and to be performed solely within such
State without regard to choice of law considerations. The parties hereto hereby waive, to the
fullest extent by applicable law, any right to trial by jury with respect to any action or
proceeding arising out of or relating to this Agreement.




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	[     ]
	 	 
	 
	 	 
	 
	 	 
	Dated:
	 	 
	 

	 	 





	 	 	 
	 

	 	Acknowledged and Agreed as of
	 
	 	 
	 

	 	___, ___:
	 
	 	 
	ARGO-TECH CORPORATION
	 
	 	 
	By:
	 	 
	 

	 	 
	 

	 	Name:
	 

	 	Title:







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