EX-10.1



 





Exhibit 10.1








			
	March 14, 2006
	 	 






Mr. Michael Wessner

President

J&L Industrial Supply Company

20921 Lahser

Southfield, MI 48034-4432



Dear Mike:




This letter is to inform you that you are eligible to receive the following compensation in the
event of completion of a successful sale of the J&L Industrial Supply, whether by sale of all or
substantially all of the stock or assets of J&L Industrial Supply (the “Closing”) by Kennametal
Inc. (“Seller”).



Incentive Payment




Upon Closing, you will receive a cash Incentive Payment in the amount of $1,794,000.



Treatment of Options/Restricted Stock Awards/Incentive Bonus Awards




Upon Closing, (i) all stock options held by you will be immediately vested and you shall have until
the sooner of one year from the Closing or the original expiration date of the options to exercise
such options; and (ii) all restricted stock awards that can be vested shall be vested, it being
understood that vesting of restricted stock awards under the Stock and Incentive Plan of 2002 may
not be accelerated and will be forfeited as of the Closing. In compensation for the forfeited
restricted stock, Seller will make a cash payment to you equal to the value of the restricted stock
forfeited as of the Closing based on the fair market value of the stock (as defined in the plan) as
of the Closing.



Any incentive bonus awards pursuant to those Incentive Bonus Award agreements dated as of July 27,
2004 and July 25, 2005 shall continue in accordance with their terms, it being understood that such
awards terminate and are forfeited upon termination of employment with Seller for any reason other
than death, disability or retirement, prior to payout and, therefore, such awards shall terminate
and be forfeited if the Closing has occurred prior to the payout date of such awards.



Severance Protection




In the event that (i) the buyer does not make you a “qualified employment offer” and your
employment with the buyer does not commence or is terminated by you or the buyer within one year of
Closing, or (ii) employment with the buyer is involuntarily terminated by the buyer within one year
of Closing, or (iii) there is a substantial diminution of duties or a material reduction in
compensation in the aggregate followed by a termination by the buyer or you within one year of
Closing, then Seller will pay you an amount (the “Severance Payment”) equal to $1,131,500 . It is
understood and agreed that the above severance payment will be paid less any amount of severance
provided by buyer. A “qualified employment offer” is any offer of employment with comparable
duties and responsibilities at not less than current base and targeted bonus or comparable
aggregate compensation with reasonable equivalent benefits in the aggregate.



Non-Solicitation of Employees/Confidentiality




You agree that, during your employment with Seller or any affiliate of Seller (each a “Seller
Entity”) and for two (2) years after the Closing, you may not, directly or indirectly, induce
and/or attempt to induce any employee of any Seller Entity to terminate employment or hire and/or
participate in the hiring and/or interviewing of any employee of any Seller Entity. An



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employee of any Seller Entity means any person who is a current employee of any Seller Entity,
any person who is an employee of any Seller Entity as of the Closing and/or any person who was
employed by any Seller Entity within six (6) months of the date of any action by you that violates
this paragraph.



You further agree that all confidential information obtained by you while employed by a Seller
Entity is the property of such Seller Entity, that unauthorized use, misappropriation or disclosure
of any such confidential information would constitute a breach of trust and could cause irreparable
injury to Seller, and that it is essential to the protection of Seller’s goodwill and to the
maintenance of its competitive position that all such confidential information be kept secret and
not disclosed to any third party or used in any way to the detriment of Seller. Accordingly, you
agree to hold and safeguard all such confidential information and to not (except as required in the
performance of your duties with a Seller Entity), use or disclose or make available to anyone, at
any time, other than any other Seller Entity, either during your employment with a Seller Entity or
subsequent thereto, any confidential information.



Until publicly disclosed, you also agree to keep the existence and terms of this letter agreement
confidential and not to disclose the existence or any of the terms of this letter agreement to
anyone other than Markos I. Tambakeras, Carlos M. Cardoso, Michael G. Pepperney, your attorney or
me.



You acknowledge that the breach by you of the provisions of this section entitled “Non-Solicitation
of Employees/Confidentiality” would cause irreparable injury to Seller, and that remedies at law
for any such breach will be inadequate. Accordingly, you consent and agree that Seller shall be
entitled, without the necessity of proof of actual damage, to injunctive relief in any proceedings
which may be brought to enforce the provisions of this section, in addition to whatever remedies
are available at law. You acknowledge that you will be fully able to earn an adequate living for
yourself and your dependents if this section should be specifically enforced against you and that
such enforcement will not impair your ability to obtain employment commensurate with your abilities
and fully acceptable to you. If the scope of any restriction contained in this section is too
broad to permit enforcement to its full extent, then such restriction shall be enforced to the
maximum extent permitted by law and you and Seller hereby consent and agree that such scope may be
judicially modified in any proceeding brought to enforce such restriction.



Additional Matters




The foregoing payments will be made on the thirty (30) days following the Closing, or sooner if
reasonably practicable, and all such payments will be subject to legally required withholdings and
deductions.



You understand and agree that the payments set forth in this letter take into account and therefore
are in lieu of any payments owed to you under the Prime Bonus Plan for fiscal 2006. In the event
that the Closing does not occur by December 15, 2006, this letter shall be null and void and you
will promptly receive any amounts due to you for your Prime Bonus Plan payment for fiscal 2006.



This letter comprises the entire agreement between the parties regarding the matters set forth
herein and supersedes any prior discussions or documents concerning this subject matter. The
provisions contained herein can be modified only by a subsequent writing signed by the parties to
this letter.



This letter agreement will be terminated in the event that you are terminated for cause prior to
the Closing.



Your Officer’s Employment Agreement with Seller dated January 30, 2001 will be terminated and shall
be of no further force or effect as of the Closing except that the provisions contained therein
regarding confidentiality shall continue in accordance with their terms.



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This letter shall be governed by the internal laws of the Commonwealth of Pennsylvania without
reference to its conflict of laws provisions.



You acknowledge that this letter agreement may be filed with the Securities and Exchange
Commission.



Please confirm your agreement with the foregoing by signing below where indicated. Please return
an originally signed copy to me.



If you have any additional questions or concerns, please call me.



	 	 	 	 	 
	 	Sincerely,

 	 
	 	/s/ Kevin R. Walling
 	 
	 	 	 
	 	Kevin R. Walling

Vice President, Chief Human Resources Officer 	 
	 



cc: Markos I. Tambakeras, Carlos M. Cardoso, Michael G. Pepperney





AGREED TO:



/s/ Michael P. Wessner

Print Name: Michael P. Wessner

Date: 3-14-06





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