Document:

EX-10.1

 

Exhibit 10.1

Officer’s Employment Agreement

     THIS AGREEMENT, is made and entered into as of this Date day of Month, Year, by and
between KENNAMETAL INC., (hereinafter referred to as “Kennametal” or the “Corporation”), a
corporation organized under the laws of the Commonwealth of Pennsylvania, for and on behalf of
itself and on behalf of its subsidiary companies, and Officer’s Name, an individual (hereinafter
referred to as “Employee”).

WITNESSETH:

     WHEREAS, Employee acknowledges that by reason of employment by Kennametal, it is anticipated
that Employee will work with, add to, create, have access to and be entrusted with trade secrets
and confidential information belonging to Kennametal which are of a technical nature or business
nature or pertain to future developments, the disclosure of which trade secrets or confidential
information would be highly detrimental to the interests of Kennametal; and

     WHEREAS, in order to have the benefit of Employee’s assistance, Kennametal is desirous of
employing or continuing the employment of Employee; and

     NOW, THEREFORE, Kennametal and Employee, each intending to be legally bound hereby, do
mutually covenant and agree as follows:

	1.	 	(a) Subject to the terms and conditions set forth herein, Kennametal hereby agrees to employ
Employee as of the date hereof, and Employee hereby accepts such employment and agrees to
devote his full time and attention to the business and affairs of Kennametal, in such capacity
or capacities and to perform to the best of his ability such services as shall be determined
from time to time by the Chief Executive Officer and the Board of Directors of Kennametal
until the termination of his employment hereunder.

(b) Employee’s base salary, the size of bonus awards, if any, granted to him and other
emoluments for his services, if any, shall be determined by the Board of Directors or its
Compensation Committee, as appropriate, from time to time in their sole discretion.

2. In addition to the compensation set forth or contemplated elsewhere herein, Employee shall be
entitled to participate in all employee benefit plans, programs and arrangements as and to the
extent provided to other executives of Kennametal, subject to the terms and conditions of this
agreement and the terms and conditions from time to time of such plans, programs and arrangements.
Nothing herein contained shall be
deemed to limit or prevent Employee, during his employment hereunder, from being

 

 

 reimbursed by
Kennametal for out-of-pocket expenditures incurred for travel, lodging, meals, entertainment
expenses or any other expenses in accordance with the policies of Kennametal applicable to the
executives of Kennametal.

3. Employee’s employment may be terminated with or without any reason for termination by either
party hereto at any time by giving the other party prior written notice thereof, provided, however,
that any termination on the part of Kennametal shall occur only if specifically authorized by its
Board of Directors; provided, further, that termination by Kennametal for Cause (as hereinafter
defined) shall be made by written notice which states that it is a termination for Cause; and
provided, further, that termination by Employee, other than termination for Good Reason (as
hereafter defined) following a Change-in-Control (as hereafter defined), shall be on not less than
30 days prior written notice to Kennametal.

	4.	 	(a) In the event that Employee’s employment is terminated by Kennametal prior to a
Change-in-Control (as hereinafter defined) and other than for Cause, Employee will receive, as
severance pay, in addition to all amounts due him at the Date of Termination (as hereinafter
defined), the continuance of the Employee’s base salary (at the rate in effect on the Date of
Termination and subject to applicable deductions and withholdings) for twelve (12) months
following the Date of Termination. Any severance pay will be paid in accordance with
Kennametal’s established payroll policies and practices as in effect on the Date of
Termination. Notwithstanding the foregoing, Kennametal may discontinue any such severance
payments if Kennametal reasonably determines that Employee has violated any provision of this
Agreement.

(b) In the event that Employee’s employment is terminated (i) due to the death of the
Employee or (ii) by Employee following a Change-in-Control (as hereafter defined) without
Good Reason (as such term in defined in paragraph 4(h)) or prior to a Change-in-Control (as
hereinafter defined), Employee will not be entitled to receive any severance pay in addition
to the amounts, if any, due him at the Date of Termination (as hereinafter defined).

(c) In the event at or after a Change-in-Control and prior to the third anniversary of the
date of the Change-in-Control that Employee’s employment is terminated by Employee for Good
Reason or by Kennametal other than for Cause or Disability pursuant to paragraph 5, Employee
will receive as severance pay (in addition to all other amounts due him at the Date of
Termination) an amount equal to the product of:

	 	(i)	 	the lesser of

(x) two and eight tenths (2.8),

(y) a number equal to the number of calendar months remaining from the Date
of Termination to the Employee’s Retirement Date (as such term is hereafter
defined) divided by twelve (12), or

(z) a number equal to the product obtained by multiplying thirty-six (36)
less the number of completed months after the date of the

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Change-in-Control
during which the Employee was employed and did not have Good Reason for
termination times one-twelfth (1/12);

	 	 	times

	 	(ii)	 	the sum of

(x) Employee’s base salary at the annual rate in effect on the Date of
Termination (or, at Employee’s election, at the annual rate in effect on the
first day of the calendar month immediately prior to the Change-in-Control),
plus

(y) the average of any bonuses which Employee was entitled to or paid during
the three most recent fiscal years ending prior to the Date of Termination
or, if the Employee is employed for less than one year, the target bonus for
the year in which the termination occurred.

Such severance pay shall be paid by delivery of a cashier’s or certified check to the
Employee at Kennametal’s executive offices on a date which is no later than five business
days following the Date of Termination.

     In addition to the severance payments provided for in this paragraph 4(c), Employee
also will receive the same or equivalent medical, dental, disability and group insurance
benefits as were provided to the Employee at the Date of Termination, which benefits shall
be provided to Employee for a three year period commencing on the Date of Termination.

(d) If for any reason, whether by law or provisions of Kennametal’s employee medical,
dental, disability or group insurance benefit plans, any benefits which the Employee would
be entitled to under the foregoing subparagraph (c) of this paragraph 4 cannot be paid
pursuant to such employee benefit plans, then Kennametal hereby contractually agrees to pay
to the Employee the difference between the benefits which the Employee would have received
in accordance with the foregoing subparagraphs of this paragraph 4 if the relevant employee
medical, dental, disability or group insurance benefit plan could have paid such benefit and
the amount of benefits, if any, actually paid by such employee medical, dental, disability
or group insurance benefit plan. Kennametal shall not be required to fund its obligation to
pay the foregoing difference.

(e) In the event of a termination of employment under the circumstances above described in
paragraph 4(c), Employee shall have no duty to seek any other employment after termination
of Employee’s employment with Kennametal and Kennametal hereby waives and agrees not to
raise or use any defense based on the position that Employee had a duty to mitigate or
reduce the amounts due him hereunder by seeking other employment whether suitable or
unsuitable and should Employee obtain other employment, then the only effect
of such on the obligations of Kennametal hereunder shall be that Kennametal shall be
entitled to credit against any payments which would otherwise be made for

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 medical, dental,
disability or group insurance pursuant to the benefit provisions set forth in the second
paragraph of paragraph 4(c) hereof, any comparable payments to which Employee is entitled
under the employee benefit plans maintained by Employee’s other employer or employers in
connection with services to such employer or employers after termination of his employment
with Kennametal.

(f) The term “Change-in-Control” shall mean a change in control of a nature that would be
required to be reported in response to Item 6(e) of Schedule 14A promulgated under the
Securities Exchange Act of 1934 as in effect on the date hereof (“1934 Act”), or if Item
6(e) is no longer in effect, any regulations issued by the Securities and Exchange
Commission pursuant to the 1934 Act which serve similar purposes; provided that, without
limitation, such a change in control shall be deemed to have occurred if (A) Kennametal
shall be merged or consolidated with any corporation or other entity other than a merger or
consolidation with a corporation or other entity all of whose equity interests are owned by
Kennametal immediately prior to the merger or consolidation, or (B) Kennametal shall sell
all or substantially all of its operating properties and assets to another person, group of
associated persons or corporation, or (C) any “person” (as such term is used in Sections
13(d) and 14(d) of the 1934 Act), is or becomes a beneficial owner, directly or indirectly,
of securities of Kennametal representing 25% or more of the combined voting power of
Kennametal’s then outstanding securities coupled with or followed by the existence of a
majority of the board of directors of Kennametal consisting of persons other than persons
who either were directors of Kennametal immediately prior to or were nominated by those
persons who were directors of Kennametal immediately prior to such person becoming a
beneficial owner, directly or indirectly, of securities of Kennametal representing 25% or
more of the combined voting power of Kennametal’s then outstanding securities.

	(g)	 	For purposes of this agreement “Date of Termination” shall mean:

(i) if Employee’s employment is terminated due to his death or retirement, the date
of death or retirement, respectively; or

(ii) if Employee’s employment is terminated for any other reason, the date on which
the termination becomes effective as stated in the written notice of termination
given to or by the Employee.

(h) The term “Good Reason” for termination by the Employee shall mean the occurrence of any
of the following at or after a Change-in-Control:

(i) without the Employee’s express written consent, the diminution of
responsibilities or the assignment to the Employee of any duties materially and
substantially inconsistent with his positions, duties, responsibilities and status
with Kennametal immediately prior to a Change-in-Control, or a
material change in his reporting responsibilities, titles or offices as in effect
immediately prior to a Change-in-Control, or any removal of the Employee

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from or any
failure to re-elect the Employee to any of such positions, except in connection with
the termination of the Employee’s employment due to Cause (as hereinafter defined)
or as a result of the Employee’s death;

(ii) a reduction by Kennametal in the Employee’s base salary as in effect
immediately prior to any Change-in-Control;

(iii) a failure by Kennametal to continue to provide incentive compensation, under
the rules by which incentives are provided, comparable to that provided by
Kennametal immediately prior to any Change-in-Control;

(iv) the failure by Kennametal to continue in effect any benefit or compensation
plan, stock option plan, retirement plan, life insurance plan, health and accident
plan or disability plan in which Employee is actively participating immediately
prior to a Change-in-Control (provided, however, that there shall not be deemed to
be any such failure if Kennametal substitutes for the discontinued plan, a plan
providing Employee with substantially similar benefits) or the taking of any action
by Kennametal which would adversely affect Employee’s participation in or materially
reduce Employee’s benefits under any of such plans or deprive Employee of any
material fringe benefit enjoyed by Employee immediately prior to a
Change-in-Control;

(v) the failure of Kennametal to obtain the assumption of this Agreement by any
successor as contemplated in paragraph 11 hereof;

(vi) the relocation of the Employee to a facility or a location more than 50 miles
from the Employee’s then present location, without the Employee’s prior written
consent; or

(vii) any purported termination of the employment of Employee by Kennametal which is
not for Cause as provided in paragraph 5.

5. In the event that Employee (a) shall be guilty of malfeasance, willful misconduct or gross
negligence in the performance of the services contemplated by this agreement, or (b) shall not make
his services available to Kennametal on a full time basis in accordance with paragraph 1 hereof for
any reason (including Disability) other than arising from Employee’s incapacity due to physical or
mental illness or injury which does not constitute Disability and other than by reason of the fact
Employee’s employment has been terminated under the circumstances described in paragraph 4(a), or
(c) shall breach the provisions of paragraph 8 hereof (the matters described in subparagraphs (a),
(b) and (c) are collectively referred to as “Cause”), Kennametal shall have the right, exercised by
resolution adopted by a majority of its Board of Directors, to terminate Employee’s employment for
Cause by giving prior written notice to Employee
of its election so to do. In that event, Employee’s employment shall be deemed terminated for
Cause, Employee shall not be entitled to the benefits set forth in paragraph 4 which

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shall not be
paid or payable and Kennametal only shall have the obligation to pay Employee the unpaid portion of
Employee’s base salary for the period from the last period from which Employee was paid to the Date
of Termination; provided, however, that if Employee’s employment is terminated as a result of the
Disability of Employee, the benefits set forth in paragraph 4 shall not be paid or payable but
Employee shall be entitled to receive all benefits to which Employee is entitled under Kennametal’s
plans then in effect as a result of Employee’s Disability. For purposes of this agreement
“Disability” shall mean such incapacity due to physical or mental illness or injury which results
in the Employee’s being absent from his principal office at Kennametal’s offices for the entire
portion of 180 consecutive business days. Prior to a Change-in-Control, a decision by the Board of
Directors of Kennametal that “Cause” exists shall be in the discretion of the Board of Directors
and shall be final and binding upon the Employee and his rights hereunder. After a
Change-in-Control, “Cause” shall not be deemed to include opposition by Employee to such a
Change-in-Control or any matter incidental thereto and any determination by the Board of Directors
that “Cause” existed shall not be final or binding upon the Employee or his rights hereunder or
entitled to any deference in any court or other tribunal.

6. Employee understands and agrees that, except to the extent Employee is entitled to the benefits
provided in paragraph 4(c) hereof, in the event Employee resigns or his employment is terminated
for any reason other than death or Disability prior to his “Retirement Date” (as hereinafter
defined), he will forfeit any interest he may have in any Kennametal retirement plan (except to the
extent vested by actual service to date of separation as per the plan provisions), and all other
benefits dependent upon continuing service. The term “Retirement Date” shall mean the first day of
the month following the day on which Employee attains his sixty-fifth birthday, or at Employee’s
request, any other day that Kennametal’s Board of Directors may approve in writing.

7. Nothing herein contained shall affect the right of Employee to participate in and receive
benefits under and in accordance with the then current provisions of any employee benefit plan,
program or arrangement of Kennametal and all payments hereunder shall be in addition to any
benefits received thereunder (including long term disability payments).

8. During the period of employment of Employee by Kennametal and for three years thereafter,
(provided, however, that this paragraph 8 shall not apply to the Employee following a termination
of Employee’s employment (x) if a Change-in-Control, shall have occurred prior to the Date of
Termination or (y) if Employee’s employment is terminated by Kennametal other than for Cause), he
will not, in any geographic area in which Kennametal is offering its services and products, without
the prior written consent of Kennametal:

(a) directly or indirectly engage in, or

(b) assist or have an active interest in (whether as proprietor, partner, investor,
shareholder, officer, director or any type of principal whatsoever), or

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(c) enter the employ of, or act as agent for, or advisor or consultant to, any person, firm,
partnership, association, corporation or business organization, entity or enterprise which
is or is about to become directly or indirectly engaged in, any business which is
competitive with any business of Kennametal or any subsidiary or affiliate thereof in which
Employee is or was engaged; provided, however, that the foregoing provisions of this
paragraph 8 are not intended to prohibit and shall not prohibit Employee from purchasing,
for investment, not in excess of I% of any class of stock or other corporate security of any
company which is registered pursuant to Section 12 of the Securities Exchange Act of 1934.

     Employee acknowledges that the breach by him of the provisions of this paragraph 8 would cause
irreparable injury to Kennametal, acknowledges and agrees that remedies at law for any such breach
will be inadequate and consents and agrees that Kennametal 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 paragraph 8. Employee acknowledges and warrants that he will be fully able
to earn an adequate livelihood for himself and his dependents if this paragraph 8 should be
specifically enforced against him and that such enforcement will not impair his ability to obtain
employment commensurate with his abilities and fully acceptable to him.

     If the scope of any restriction contained in this paragraph 8 is too broad to permit
enforcement of such restriction to its full extent, then such restriction shall be enforced to the
maximum extent permitted by law and Employee and Kennametal hereby consent and agree that such
scope may be judicially modified in any proceeding brought to enforce such restriction.

	9.	 	(a) Employee acknowledges and agrees that in the course of his employment by Kennametal,
Employee may work with, add to, create or acquire trade secrets and confidential information
(“Confidential Information”) which could include, in whole or in part, information:

(i) of a technical nature such as, but not limited to, Kennametal’s manuals,
methods, know-how, formulae, shapes, designs, compositions, processes, applications,
ideas, improvements, discoveries, inventions, research and development projects,
equipment, apparatus, appliances, computer programs, software, systems
documentation, special hardware, software development and similar items; or

(ii) of a business nature such as, but not limited to, information about business
plans, sources of supply, cost, purchasing, profits, markets, sales, sales volume,
sales methods, sales proposals, identity of customers and prospective customers,
identity of customers’ key purchasing personnel, amount or kind of customers’
purchases and other information about customers; or

(iii) pertaining to future developments such as, but not limited to, research and
development or future marketing or merchandising.

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     Employee further acknowledges and agrees that (i) all Confidential Information is the
property of Kennametal; (ii) the unauthorized use, misappropriation or disclosure of any
Confidential Information would constitute a breach of trust and could cause irreparable
injury to Kennametal; and (iii) it is essential to the protection of Kennametal’s goodwill
and to the maintenance of its competitive position that all Confidential Information be kept
secret and that Employee not disclose any Confidential Information to others or use any
Confidential Information to the detriment of Kennametal.

     Employee agrees to hold and safeguard all Confidential Information in trust for
Kennametal, its successors and assigns and Employee shall not (except as required in the
performance of Employee’s duties), use or disclose or make available to anyone for use
outside Kennametal’s organization at any time,
either during employment with Kennametal or subsequent thereto, any of the Confidential
Information, whether or not developed by Employee, without the prior written consent of
Kennametal.

	(b)	 	Employee agrees that:

(i) he will promptly and fully disclose to Kennametal or such officer or other agent
as may be designated by Kennametal any and all inventions made or conceived by
Employee (whether made solely by Employee or jointly with others) during employment
with Kennametal (1) which are along the line of the business, work or investigations
of Kennametal, or (2) which result from or are suggested by any work which Employee
may do for or on behalf of Kennametal; and

(ii) he will assist Kennametal and its nominees during and subsequent to such
employment in every proper way (entirely at its or their expense) to obtain for its
or their own benefit patents for such inventions in any and all countries; the said
inventions, without further consideration other than such salary as from time to
time may be paid to him by Kennametal as compensation for his services in any
capacity, shall be and remain the sole and exclusive property of Kennametal or its
nominee whether patented or not; and

(iii) he will keep and maintain adequate and current written records of all such
inventions, in the form of but not necessarily limited to notes, sketches, drawings,
or reports relating thereto, which records shall be and remain the property of and
available to Kennametal at all times.

(c) Employee agrees that, promptly upon termination of his employment, he will disclose to
Kennametal, or to such officer or other agent as may be designated by Kennametal, all
inventions which have been partly or wholly conceived, invented or developed by him for
which applications for patents have
not been made and shall thereafter execute all such instruments of the character
hereinbefore referred to, and will take such steps as may be necessary to secure

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and assign
to Kennametal the exclusive rights in and to such inventions and any patents that may be
issued thereon any expense therefor to be borne by Kennametal.

(d) Employee agrees that he will not at any time aid in attacking the patentability, scope,
or validity of any invention to which the provisions of subparagraphs (b) and (c), above,
apply.

10. In the event that (a) Employee institutes any legal action to enforce his rights under, or to
recover damages for breach of this agreement, or (b) Kennametal institutes any action to avoid
making any payments due to Employee under this agreement, Employee, if he is the prevailing party,
shall be entitled to recover from Kennametal any actual expenses for attorney’s fees and other
disbursements incurred by him in relation thereto.

11. The terms and provisions of this agreement shall be binding upon, and shall inure to the
benefit of, Employee and Kennametal, it subsidiaries and affiliates and their respective successors
and assigns.

12. This agreement constitutes the entire agreement between the parties hereto and supersedes all
prior agreements and understandings, whether oral or written, among the parties with respect to the
subject matter hereof. This agreement may not be amended orally, but only by an instrument in
writing signed by each of the parties to this agreement; provided, however, the Company may, solely
to the extent necessary to comply with Section 409A of the Code, modify the terms of this agreement
if it is determined that such terms would subject any payments or benefits hereunder to the
additional tax and/or interest assessed under Section 409A of the Code.

13. The invalidity or unenforceability of any provision of this agreement shall not affect the
other provisions hereof, and this agreement shall be construed in all respects as if such invalid
or unenforceable provision were omitted.

14. Any pronoun and any variation thereof used in this agreement shall be deemed to refer to the
masculine, feminine, neuter, singular or plural, as the identity of the parties hereto may require.

15. Kennametal shall be entitled as a condition to paying any severance pay or providing any
benefits hereunder upon a termination of the Employee’s employment to require the Employee to
deliver on or before the making of any severance payment or providing of any benefit a release in
the form of Exhibit A attached hereto.

	16.	 	(a) At the time of making payment to an Employee entitled to receive the severance payment
computed in accordance subsection 4(c)(i) and 4(c)(ii) of this agreement, the Corporation
shall determine whether the Employee is expected to be subject to the tax (the “Excise Tax”)
imposed by section 4999 of the Internal Revenue Code of 1986, as amended (the
“Code”), with respect to any
payment or benefit received, or to be received, by Employee under this agreement or in
connection with a change in control of the Corporation, or the termination of the

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Employees’
employment (whether pursuant to the terms of this agreement or any other plan, arrangement
or agreement with the Corporation, any person whose actions result in a change in control or
any person affiliated with the Corporation or such person) (collectively, the “Total
Payments”). If the Corporation determines that the Employee will be subject to the Excise
Tax, the Corporation shall immediately send a written notice to the Employee which sets
forth that the Employee will be subject to the Excise Tax and the Corporation’s computation
of the Total Payments, of the amount of Total Payments which constitute “parachute payments”
as defined in section 28OG(b)(2) of the Code (“parachute payments”) resulting in the
imposition of the Excise Tax, and of the amount of Total Payments which the Employee would
retain after giving effect to the Employee’s receipt of the Excise Tax Payment (as hereafter
defined) and payment of applicable taxes. Employee shall have five (5) business days after
receipt of the foregoing notice and computation to deliver a written waiver to the
Corporation irrevocable waiving the Employee’s right to receive an amount of Total Payments
equal to the “parachute payments” from any specified type of the Total Payments. If the
Corporation had already withheld any Contract Payments due to the Excise Tax prior to
receipt of such waiver, the Corporation upon receipt of such waiver shall immediately pay to
Employee any withheld Contract Payments which would have been paid had the Corporation had
the Employee’s written waiver prior to the date the Corporation withheld any such payments.

	(b)	 	If

	 	(i)	 	after giving effect to any waiver by the Employee pursuant to
subsection (a) above, the Employee will be subject to the Excise Tax with
respect to any portion of the Total Payments and
	 
	 	(ii)	 	the Employee After Tax Net (as hereafter defined) would be less
than the Minimum Amount (as hereafter defined),

then the Corporation shall pay to Employee an additional amount (the “Excise Tax Payment”)
such that the Employee After Tax Net shall be equal to the Minimum Amount. The Excise Tax
Payment, if any, under this subsection shall be made to Employee within fifteen (15)
business days of Employee’s Date of Termination.

(c) The “Employee After Tax Net” is the portion of the Total Payments which the Employee
retains or would retain after payment of all federal and any state and local income taxes on
the Total Payments and of the Excise Tax. The “Minimum Amount” is an amount equal to the
severance pay computed in accordance with subsection 4(c)(i) and 4(c)(ii) of this agreement
less the federal, state and/or local income taxes which would be owing by the Employee on
such severance pay (ignoring any Excise Tax Payment). For purposes of determining whether
any of the Total Payments will be subject to the Excise Tax and the amount of such Excise
Tax, (i) all Total Payments shall be treated as parachute
payments and all “excess parachute payments” within the meaning of Section 280G(b)(1) shall
be treated as subject to the Excise Tax, unless in the opinion of tax counsel selected by
the Board of Directors, such Total Payments (in whole or

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in part) do not constitute
parachute payments, or such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within the meaning of Section
280G(b)(4) of the Code in excess of the base amount within the meaning of Section 280G(b)(3)
of the Code, or are otherwise not subject to the Excise Tax, (ii) the amount of the Total
Payments which shall be treated as subject to the Excise Tax shall be equal to the lesser of
(A) the total amount of the Total Payments or (B) the amount of excess parachute payments
within the meaning of Section 280G(b)(1) (after applying clause (i), above) of the Code, and
(iii) the value of any non-cash benefits or any deferred payment or benefit shall be
determined by the Corporation’s independent auditors in accordance with the principles of
Section 280G(d)(3) and (4) of the Code. For purposes of determining the Minimum Amount and
the Excise Tax Payment, Employee shall be deemed to pay federal income taxes at Employee’s
highest marginal rate of federal income taxation in the calendar year in which the Excise
Tax Payment is to be made and state and local income taxes at Employee’s highest marginal
rate of taxation in the state and locality of Employee’s residence on the Date of
Termination, net of the maximum reduction in federal income taxes which could be obtained
from deduction of such state and local taxes.

(d) In the event that the Excise Tax is subsequently determined to be less than the amount
taken into account in arriving at any payment made pursuant to subsection (b) above,
Employee shall repay to the Corporation at the time that the amount of such reduction in
Excise Tax is finally determined the portion of the Excise Tax Payment attributable to such
reduction (plus the portion of the Excise Tax Payment attributable to the Excise Tax and
federal and state and local income tax imposed on the Excise Tax Payment being repaid by
Employee if such repayment results in a reduction in Excise Tax and/or a federal and state
and local income tax deduction) plus interest on the amount of such repayment from the date
the Excise Tax Payment was initially made to the date of repayment at the rate provided in
Section 1274(b)(2)(B) of the Code (the “Applicable Rate”). In the event that the Excise Tax
is determined to exist although the Corporation did not believe it existed in arriving at
its determination in subsection (a) above or although the Corporation believed it existed
but the actual amount exceeds the amount taken into account in arriving at any payment made
pursuant to subsection (b) above (including by reason of any payment the existence or amount
of which cannot be determined at the time of the Excise Tax Payment), the Corporation shall
make an additional Excise Tax Payment in respect of such amount or such excess (plus any
interest or penalties payable with respect thereto) at the time that the amount of such
excess is finally determined.

17. The provisions of this agreement will be administered, interpreted and construed in a manner
intended to comply with Section 409A, the regulations issued thereunder or any exception thereto
(or disregarded to the extent such provision cannot be so
administered, interpreted, or construed). If the Company determines in good faith that any amounts
to be paid to Employee under this agreement are subject to Section 409A of the Code, then the
Company may, to the extent necessary, adjust the form and/or the

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 timing of such payments as
determined to be necessary or advisable to be in compliance with Section 409A. If any payment must
be delayed to comply with Section 409A, then the deferred payment will be paid at the earliest
practicable date permitted by Section 409A. Notwithstanding any provision of this agreement to the
contrary, Employee acknowledges and agrees that the Company shall not be liable for, and nothing
provided or contained in this agreement will be construed to obligate or cause the Company to be
liable for, any tax, interest or penalties imposed on Employee related to or arising with respect
to any violation of Section 409A.

18. This agreement shall be governed by the laws of the Commonwealth of Pennsylvania.

     WITNESS the due execution hereto as of the day and year first above written.

	 	 	 	 	 	 	 
	 	 	KENNAMETAL INC.	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	 	 	 
	 

	 	 	 	 

   David W. Greenfield
	 	 
	 

	 	 	 	   Vice President, Secretary	 	 
	 

	 	 	 	   and General Counsel	 	 
	 
	 	 	 	 	 	 
	 	 	Employee:	 	 
	 
	 	 	 	 	 	 
	 	 	 	 	 
	 

	 	 	 	Officer’s Name	 	 

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Exhibit A

FORM OF RELEASE

[to be updated at the time of execution

in accordance with then existing law]

TO: Officer’s Name

DATE: Date

     For good and valuable consideration, the receipt of which is hereby acknowledged, and
intending to be legally bound, you hereby release, remise, quitclaim and discharge completely and
forever Kennametal Inc. and its directors, officers, employees, subsidiaries and affiliates
(collectively, the “Company”) from any and all claims, causes of action or rights which you have or
may have, whether arising by virtue of contract or of applicable state laws or federal laws, and
whether such claims, causes of action or lights are known or unknown, including but not limited to
claims relating in any way to compensation and benefits and related to or resulting from your
employment with the Company or its termination, claims arising under any public policy or any
statutory, tort or common law, or any provision of state, federal or local law including, but not
limited to, the Pennsylvania Human Relations Act, the Americans with Disabilities Act, Title VII of
the Civil Rights Act of 1964, the Civil Rights Act of 1991, Sections 1981-1988 of Title 42 of the
U. S. Code, Older Workers’ Benefit Protection Act, Family and Medical Leave Act, the Fair Labor
Standards Act, Pennsylvania Wage Payment and Collection laws, the Age Discrimination in Employment
Act of 1967, the Employee Retirement Income Security Act of 1974, all as amended; provided,
however, that this Release shall not release, raise, quitclaim or discharge any claims, causes of
action or rights which you may have: (i) under that certain Officer’s Employment Agreement dated
as of [                    ] between the undersigned and Kennametal Inc. (the “Employment Agreement”); (ii)
to any unreimbursed expense account or similar out-of-pocket reimbursement amounts owing the
undersigned; or (iii) under the bylaws or any agreement of Kennametal Inc. or any subsidiary
thereof applicable to you or the applicable state corporate statutes to indemnification for having
served as an officer, director and/or employee of Kennametal Inc. and/or its subsidiaries or as a
fiduciary of any employee benefit plan applicable to former employees generally.

     You must agree to immediately return all of the Company’s equipment, documents and property,
agree to forever waive your right to receive on your or any other person’s behalf any monies,
benefits, or damages from the Company other than those provided herein or in the Employment
Agreement. You must also agree to maintain the confidentiality of this Release and not reveal the
terms set forth herein to anyone other than your accountant, attorney or spouse.

     By signing below, you acknowledge your continuing obligations under the Employment Agreement
including, but not limited to, paragraphs 8-10 thereof.

     Your failure to abide by any of the above stated obligations will result in irreparable harm
to the Company and entitle the Company to require you to specifically perform your obligations
under this Release, recover any damages that may flow from
this

 

 

Agreement and obtain appropriate injunctive relief. Should you file a claim or charge
against the Company, you agree that the Company may present this agreement for purposes of having
your claim or charge dismissed.

     Any severance payments due to you under the Employment Agreement are conditioned on your
execution and non-revocation of this Release.

     You should carefully consider the matters outlined in this letter. If, after due deliberation
and consultation with lawyers or such professional advisors as you deem appropriate, the above is
agreeable to you, please sign the attached copy of this letter and return the original to the
Company for my files. Please retain a copy for your own records.

     You may take up to twenty-one (21) days to consider this Release. Should you accept this
severance offer by signing your name below, you will then have seven (7) days to reconsider your
decision. If you choose to revoke your acceptance of this offer you must do so by writing to the
Company within the seven (7) day revocation period. No severance payments will be made to you
until the seven (7) day revocation period has expired.

	 	 	 	 	 
	 

	 	AGREED TO AND ACCEPTED BY	 	 
	 
	 	 	 	 
	 

	 	 

          Officer’s Name
	 	 

Dated:                                                            

- 2 -EX-10.2

 

Exhibit 10.2

	 	 	 
	

	Kevin Walling

Vice President and

Chief Human Resource Officer

Kennametal Inc.

1600 Technology Way

P.O. Box 231

Latrobe, PA 15650 USA

Telephone 724.539.4612

Fax 724.539.4710

kevin.walling@kennametal.com

www.kennametal.com

December 5, 2006

Kennametal Inc.

Attn: Markos I. Tambakeras

         Executive Chairman

1600 Technology Way

Latrobe, PA 15650

Dear Markos:

     This letter will serve to confirm your discussions earlier today with the
Compensation Committee concerning healthcare coverage under your Amended and Restated
Executive Employment Agreement (“Agreement”) dated December 6, 2005. On July 2, 2007,
Kennametal will pay you $223,583, subject to normal withholding for payroll taxes, in
full and final payment and settlement of any and all obligations to you under Section
4(e) of the Agreement concerning the Company’s obligation to provide healthcare (medical,
dental, vision and flexible account plans) coverage through enrollment in the Company’s
group plans upon expiration of your rights under COBRA (June 30, 2008).

     If you are in agreement with the foregoing, please sign and return to my attention
the enclosed duplicate copy of this letter.

Very truly yours,

/s/ Kevin R. Walling

Agreed and Accepted:

/s/ Markos I. Tambakeras      

Markos I. Tambakeras

Date: December 7, 2006 

	cc:  	 	Ronald M. DeFeo

Chair Compensation Committee

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