The Registrant has entered into the attached Agreement with each
of the following executive officers of the Registrant:
Kerry L. Woody
Wayne E. Larsen
Gene E. Bunge
Robert J. Noel
James K. Sorenson
Gary J. Vroman
Lawrence C. Hammond
Ronald O. Weise
Thomas S. Plichta
THIS AGREEMENT made this 1st day of April, between LADISH CO.,
INC., a Wisconsin Corporation, hereinafter called the "Company", and
_________________________, an officer of the corporation hereinafter
W I T N E S S E T H T H A T :
WHEREAS, the Company desires to assure itself of the continuing
availability of Employee, and
WHEREAS, the Company desires to provide adequate security to the
WHEREAS, the Employee desires to maintain his relationship with the
Company to their mutual advantage, and
WHEREAS, the Employee desires to be afforded retirement, disability
and severance benefits,
NOW THEREFORE, in consideration of the mutual promises of the parties
hereto, it is hereby AGREED:
1. Other Benefits Affecting the Employee.
1.1 Any amount required to be paid hereunder (except amounts payable
under 10.1, and 10.2 hereof) shall be reduced by any benefit paid the
Employee or his beneficiary pursuant to the provisions of the LADISH CO.
SALARIED EMPLOYEES RETIREMENT PLAN.
2.1 Whenever used in the Contract, the following terms shall have
the respective meanings set forth below unless otherwise expressly
(a) The term "Company" means LADISH CO., INC., or any successor
(b) The term "Service" means the last continuous period of
employment of the Employee with the Company prior to his
retirement date, determined in accordance with reasonable
standards and policies adopted by the Company.
(c) The term "Compensation" means the total annual base salary
of the Employee, plus overtime pay, plus the following:
payments received after January 1, 1988 from Ladish Co.,
Inc.: bonuses, incentive compensation or special
compensation of any kind, the total of which shall not
exceed twenty percent (20%) of annual base salary.
(d) The term "Average Compensation" means the monthly average
of the Employee's "Compensation" for the period of the five
(5) years of highest compensation of the ten (10) years
next preceding his retirement date; provided further, that
if the Employee receives compensation for a part of a
calendar year, such compensation shall be projected to an
(e) The term "Disability" means incapacity, which in the
opinion of the Board of Directors of the Company prevents
the Employee from engaging in his usual employment activity
with the Company.
3.1 Undertaking by Employee. The Employee agrees that during the
term of this agreement and after any retirement from active employment, he
will remain available to the Company for consultation upon such reasonable
terms as to notice, time, place, fee and duration of consultation as the
Company may direct and will render such consultative services at the times
and in the place requested by the Company.
3.2 Expenses of Employee. The Company agrees that it will reimburse
the employee for all reasonable expenses incurred in rendering any such
consultative service to the Company.
4. Retirement Ages and Dates.
4.1 Normal. The normal retirement age shall be age 65 and the
normal retirement date shall be the first day of the calendar month
coincident with or next succeeding the date on which the Employee actually
retires following his 65th birthday. Upon such retirement, the Employee
will receive the benefit calculated at Section 5.1.
4.2 Early Retirement. An Employee who has reached age 55 and
accumulated at least 10 years of service may retire and receive a benefit
calculated in Section 5.2. The early retirement date shall be the first
day of the calendar month coincident with or next succeeding the date the
Employee actually retires under this paragraph.
4.3. Disability. In the event that the Board of Directors determines
that the Employee is disabled as herein defined, the Employee shall be
entitled to a disability retirement benefit as calculated pursuant to
Section 5.3, and the disability retirement date of the Employee shall be
the first day of the calendar month coincident with or next succeeding the
date the Employee ceased to receive long term disability payments under
Paragraph 10.3 or reaches normal retirement age, whichever is earlier.
5.1 Normal. If the Employee retires after attaining his normal
retirement age, he shall be entitled to a monthly normal retirement
benefit in an amount equal to 52-1/2% of his "Average Compensation,"
multiplied by a fraction, the numerator of which shall be his length of
"Service" in years (but no more than 35) and the denominator of which
shall be 35.
5.2 Early. If the Employee retires pursuant to paragraph 4.2 before
attaining his normal retirement age, he shall be entitled to an early
retirement benefit computed as if it were a normal retirement benefit but
based upon his "Service" and "Average Compensation" as of his early
retirement date; such benefit to be reduced as of the date the first early
retirement benefit payment commences to the actuarial equivalent of the
amount payable at age 65, but by not more than 5/10 of one percent (1%)
for each month by which such Employee's first early retirement benefit
payment precedes the first of the month following his normal retirement
age. Effective for Early Retirements on or after 8/l/88, an employee
attaining age 60 with 30 or more years of Service shall not be subject to
the benefit reduction provided herein.
5.3 Disability. If the Employee suffers a disability as herein
defined, he shall be entitled to a deferred disability retirement benefit
payable upon the termination of his long term disability payments
described in paragraph 10.3, of the same amount as his normal retirement
benefit based on his years of "Service" had he become disabled at his
normal retirement age and on his "Average Compensation" to the date of his
6. Commencement and Duration of Benefits.
6.1 Commencement and Duration.
(a) Retirement benefits shall be paid monthly.
(b) A normal retirement benefit shall begin as of the normal
retirement date of the eligible Employee. The payments
shall be made monthly thereafter as of the first day of
each succeeding month during the lifetime of the retired
Employee or until he is re-employed by the Company.
(c) An early retirement benefit shall begin as of the early
retirement date of the eligible Employee, except that such
retired Employee may elect to have his early retirement
benefit begin as of the first day of any month following
his retirement, but not later than the first day of the
month following his 65th birthday. The payments shall be
made monthly thereafter as of the first day of each
succeeding month during the lifetime of the retired
Employee, or until he is re-employed by the company.
6.2 Re-employment by the Company.
(a) If a retired Employee receiving a normal retirement benefit
shall be re-employed by the Company, no further payments
shall be made during the period of such employment. Upon
his subsequent retirement, his retirement benefit shall
again commence on his subsequent retirement date in the
same amount as he was receiving prior to such
(b) If a retired Employee receiving an early retirement benefit
shall be re-employed by the Company prior to his normal
retirement age, no further payments shall be made during
the period of such employment. Upon his subsequent
retirement, his retirement benefit shall be calculated as
if the Employee were then first retired, based upon his
"Service" at the time of his prior retirement plus the
"Service" earned following the date of re-employment and
his "Average Compensation" at the time of his subsequent
(c) If a retired Employee receiving an early retirement benefit
shall be re-employed by the Company after his normal
retirement age, no further payments shall be made during
the period of such employment. Upon his subsequent
retirement his retirement benefit shall again commence on
his subsequent retirement in the same amount as he was
receiving prior to such re-employment.
(d) If an Employee receiving a disability retirement benefit
shall be re-employed by the Company upon the cessation of
such disability, then upon the subsequent termination of
his employment with the Company, his eligibility for a
retirement benefit hereunder and such benefit shall be
determined and calculated as if his employment were then
first terminated or he had then first retired, based upon
his "Service" at the time of his prior disability plus the
"Service" earned following the date of re-employment and
his "Average Compensation" at the time of his subsequent
termination of employment or retirement.
6.3 Options. If the Employee is entitled to an early or normal
retirement benefit, he may at any time during his active employment elect
either joint and survivor or ten (10) year certain options or among any
other settlement options then provided Employees of LADISH CO., INC. under
the then provisions of the Ladish Co. Salaried Employees Retirement Plan;
such benefit shall not be effective until actual retirement.
6.4 Payment to Legal Representative. In the event of a conservator,
guardian, or other legal representative of the estate of any retired
Employee shall be appointed by a court of competent jurisdiction,
retirement payments may be made to such conservator, guardian or other
legal representative, provided that proper proof of appointment and
continuing qualification is furnished. Any such payment shall be a
payment for the account of the retired Employee and shall be a complete
discharge of any liability of the Company hereunder.
6.5 Incompetency. In the event that it shall be considered by the
company that a retirement benefit is payable but that the Employee is
unable to care for his affairs because of illness or accident, any payment
due (unless a prior claim therefor shall have been made by a duly
qualified guardian or other legal representative) may, in the discretion
of the Company be paid to the spouse, parent, child, brother or sister of
the Employee or to any other person or institution deemed by the Company
to be maintaining or responsible for the maintenance of Employee; or in
any such instances, then in the discretion of the Company, payment may be
made by depositing the same in a responsible bank in Wisconsin in the name
of the Employee. Any such payment shall be a payment for the account of
the Employee and shall be a complete discharge of any liability of the
7. Non-Alienation of Benefits.
7.1 Non-Alienation. No benefit payable at any time hereunder shall
be subject in any manner to alienation, sale, transfer, assignment, pledge
or encumbrance of any kind. Any attempt to alienate, sell, transfer,
assign, pledge or otherwise encumber any such benefit, whether presently
or thereafter payable shall be void. No retirement benefit shall in any
manner be liable for or subject to the debts or liabilities of the
Employee or retired Employee entitled to any retirement benefit, or
subject to or reachable by garnishment, attachment, execution or other
legal process or proceeding by or on behalf of any judgment creditor or
other creditor of or claimant against the retired Employee to whom such
benefit is or may be payable. If the Employee or retired Employee shall
attempt to alienate, sell, transfer, assign, pledge, or otherwise encumber
his benefits under the Plan, or any part thereof, or if by reason of his
bankruptcy or other event happening at any time, such benefits would
devolve upon anyone else or.would not be enjoyed by him, then the Company,
in its discretion, may suspend his interest in any such benefit and hold
or apply it to or for the benefit of the Employee, his spouse, children or
other dependents, or any of them, in such manner as the Company may deem
8. Vesting. The Employee will have vested rights under this
contract to a benefit at such time as he has accumulated ten (10) years of
service in the employment of the Company.
No provision of this contract shall interfere with the company's
right to terminate the Employee's services for any cause sufficient to it.
In the event of such termination, an Employee who has not become vested
under this provision shall have no rights pursuant to this contract
9. Applicable Law.
9.1 Applicable Law. This contract shall be governed by the laws of
the State of Wisconsin and be binding upon and inure to the benefit of the
personal representatives of the Employee and the successors or assigns of
the Company. This contract is not subject to principal provisions of the
Employee Retirement Income Security Act of 1974 pursuant to statutory
exceptions from such Act.
10. Other Benefits. Application for Retirement.
10.1 Other Benefits. The company agrees to maintain in effect and at
(a) Group term life insurance coverage of $200,000 face amount
in effect until retirement and payable on death of the
employee to his designated beneficiary; and
(b) Group term life insurance of $100,000 face amount in effect
(c) Group hospital, surgical, major medical, dental and vision
care coverage for the Employee and his spouse, and the
survivor of them, in such form and manner as covers all
salaried employees of the Company.
10.2 Severance Pay. In addition to the other benefits provided in
this contract, the Employee is entitled to severance pay in the event his
employment with the Company is involuntarily terminated other than for
cause. Severance pay will be based upon one (1) month's base salary at
time of termination multiplied by years of service up to a maximum total
of twenty-four (24) months. At the employee's option, severance pay may
be paid in a lump sum or installments.
10.3 Long-Term Disability Benefit. Prior to the time that the
Employee receives a retirement benefit, the company will provide a
long-term disability benefit if he suffers a disability as herein defined.
The amount of the long-term disability benefit payment will be 66-2/3% of
base pay, less the sum of the following, but only for the period payments
under (a), (b) or (c) or any combination thereof, are being made
subsequent to the time the Employee is entitled to a disability benefit:
(a) Any Workers compensation payment (except fixed statutory
payments for the loss of any bodily member);
(b) Social Security disability benefits; and
(c) Any other disability benefit he may receive because of such
disability as a result of any other disability program
sponsored by the Company, to the extent that such benefits
have been provided for by premiums or other payments paid
by or at the expense of the Company.
If the disability ceases prior to his 65th birthday, long-term
disability benefit payments shall cease, and if he is not re-employed by
the Company upon such cessation, he shall be entitled to an early
retirement benefit beginning on the date disability ceases, computed as
provided in subsection 5.2 hereof upon."Average Compensation" and
"Service" on the date of the beginning of his disability.
In no event will long-term disability benefits extend beyond the
Employee's 65th birthday.
10.4 Application for Retirement. When the Employee becomes eligible
for a retirement benefit and wishes to retire, he shall apply for such
benefits by signing an application form furnished by the Company and shall
also furnish the Company with such documents, evidence, data, or
information in support of such application as the Company considers
necessary or desirable.
IN WITNESS WHEREOF, the parties hereto have caused these presents to
be executed the day and year first above written, and in the case of
LADISH CO., INC., the same has been signed and its corporate seal affixed
by authority of its Board of Directors.
LADISH CO., INC.
(AFFIX CORPORATE SEAL)
AMENDED PAYMENT AND SECURITY AGREEMENT
This AMENDED PAYMENT AND SECURITY AGREEMENT is made this 14th day of
October, 1997, by and between LADISH CO., INC., a Wisconsin corporation
(the "Company"), and the PENSION BENEFIT GUARANTY CORPORATION ("PBGC"),
acting on behalf of itself and on behalf of the defined benefit plans
sponsored by the Company and listed in Exhibit A hereto (the "Plans").
WHEREAS, the Company is the sponsor of the defined benefit pension
plans set forth in Exhibit A hereto, which plans are covered by Title IV
of the Employee Retirement Security Act of 1974, as amended ("ERISA"); and
WHEREAS, the Company applied for and received conditional waivers of
the minimum funding standards for the Plans ("Funding Waivers") for plan
year 1995 from the United States Internal Revenue Service ("IRS") under
section 412(d) of the Internal Revenue Code of 1986, as amended (the
"Code"), and section 303 of ERISA.
WHEREAS, as a condition of those Funding Waivers the Company was
required to provide security to the Plans and entered into that Payment
and Security Agreement, dated June 17, 1997, with the PBGC (the "Prior
WHEREAS, the Company has applied under section 412(d) of the Code and
section 303 of ERISA to the IRS for Funding Waivers for plan year 1996;
WHEREAS, the Company and PBGC have reached an understanding on
additional funding payments to the Plans during the 1997 calendar year and
for the 1996 and 1997 plan years, which payments will satisfy Company's
obligations under the Prior Agreement, satisfy minimum funding for the
1996 and 1997 plan years, and allow the Company to withdraw its
application for Funding Waivers for plan year 1996.
NOW, THEREFORE, IT IS AGREED THAT:
(a) Unless otherwise defined herein, the following terms, which are
defined in the Prior Agreement, have the meaning given them in the Prior
Agreement: "Collateral", "Intercreditor Agreement", "PBGC Liens", "Senior
Liens", and "Secured Obligations". Further, the following terms which are
defined in the Intercreditor Agreement and used herein shall have the
meaning given to them in that document: Lender Agent; Noteholder Agent.
(b) In addition, the following terms shall have the following
meanings, unless the context otherwise requires:
"Agreement": this Amended Payment and Security Agreement as the
same may from time to time be amended or supplemented.
"Event of Default": an Event of Default as defined in section 8
of this Agreement.
"1998 Funding Goal": minimum funding requirements for the 1998
plan year for Plans 001,006 and 013 of zero, and for Plans 004 and
016 of $6,000,000 and $900,000, respectively.
"Plan 003": the Ladish Hourly Employees Plan.
"Plan 014": the Ladish Kentucky Steelworkers Local No. 7513 and
"Required Credit Balance": for each of the Plans, as of the end
of the plan year ending after December 31, 1997, the credit balance
in the funding standard account maintained for each such plan
pursuant to section 412 of the Code and 302 of ERISA as of December
31, 1997, adjusted for interest to the end of the plan year.
2. Grant of Security Interest.
The security interests under the Uniform Commercial Code in and to
certain of the Collateral, in favor of the Plans and the PBGC, granted by
the Company under the Prior Agreement to secure the timely payment of the
Secured Obligations, shall continue after the execution of this Agreement.
As provided in the Prior Agreement and the Intercreditor Agreement, these
PBGC Liens are subordinate to the Senior Liens, and PBGC's rights with
respect to the Collateral are subject to the terms of that Intercreditor
3. Actions by the Company with respect to the Plans.
(a) Payments. The Company agrees to make the following contributions
to the Plans:
(i) During calendar year 1997, the Company will contribute
Three Million One Hundred Ninety-Seven Thousand Seven Hundred
and Seventy-Two Dollars ($3,197,772) to the Plans;
(ii) In addition to the above payments, during the fourth
quarter of calendar year 1997, the Company will contribute Ten
Million Dollars ($10,000,000) to the Plans; and
(iii) On or before January 15, 1998, the Company will contribute
an additional Seven Hundred Fourteen Thousand Five Hundred and
Fifty-One Dollars ($714,551) to the Plans.
(b) Plan Mergers. Before December 31, 1997, the Company will merge
certain of the Plans as follows:
(i) Plan 006 and Plan 019 will merge with Plan 003. (Plan 006
will be the surviving plan)
(ii) Plan 001 will merge with Plan 014. (Plan 001 will be the
(c) Allocation of Payments. The payments described in (a), above,
shall be allocated among the Plans (including the merged plans as
described in (b)) as determined by the Company in order to meet its 1998
4. PBGC Release.
Upon completion of the actions contemplated in section 3(a) and (b),
and the receipt by PBGC of a certified statement from the Plans' actuary
stating that the minimum funding requirements for 1998 will meet the 1998
Funding Goal, PBGC agrees to release the PBGC Liens on the Collateral,
including the Third Mortgage and Security Agreement PBGC filed against the
real property of the Company in Milwaukee County in the State of
Wisconsin. PBGC will execute and deliver to the Company all termination
statements and mortgage releases as the Company deems necessary to effect
5. Intercreditor Agreement.
In conjunction with the Company and PBGC entering into the Prior
Agreement, PBGC entered into the Intercreditor Agreement with the Lender
Agent and the Noteholder Agent. The Company, though not a party to the
Intercreditor Agreement, agreed to be bound by its terms. The
Intercreditor Agreement set forth the respective positions and rights of
the parties thereto to the Collateral. Upon release of the PBGC Lien, PBGC
agrees (a) that the Intercreditor Agreement is no longer necessary; (b)
that the Intercreditor Agreement should be terminated; and (c) that PBGC
will take all actions necessary to terminate that agreement. The Company
agrees to obtain the consent of the Lender Agent and Noteholder Agent to
the termination of the Intercreditor Agreement.
6. Representations and Warranties of the Company.
The Company represents and warrants, to the best of its knowledge,
(a) the Company is duly organized and validly existing under the law
of the State of Wisconsin, and the chief place of business of the Company
is located within the State of Wisconsin;
(b) the Company has all necessary corporate authority to execute,
deliver and perform the obligations under this Agreement;
(c) the Company is the lawful owner of all of the Collateral and had
complete authority to grant a security interest in this Collateral;
(d) all information supplied and statements made in any financial or
credit statements or application for credit prior to the execution of this
Agreement are true and correct as of the date furnished and as of the date
hereof in all material respects.
7. Covenants of the Company.
(a) Credit Balance Requirements. The Company agrees that it will
preserve the Required Credit Balance for each of the Plans for four
consecutive plan years, starting with the plan year ending December 31,
1998, provided, however, that the Required Credit Balance may be taken
into account for purposes of calculating the "deficit reduction
contribution" described in section 412(l) of the Code.
(b) Annual Informational Requirements. The Company will furnish to
PBGC annual audited financial statements (including a balance sheet,
income statement, statement of operation and cash flow, and statement of
retained earnings) of the Company, accompanied by the opinion thereon of
its independent certified public accountant, within 120 days after the
close of each fiscal year. The Company also will provide PBGC with annual
actuarial valuation reports for all defined benefit pension plans
sponsored by the Company within 60 days after becoming available, and the
annual Form 5500's with all schedules and attachments for each Plan when
(c) Other Informational Requirements. The Company shall furnish to
PBGC copies of quarterly financial statements (unaudited). Additionally,
the Company will notify' PBGC whether it has made required contributions
for its two largest plans, such notice to be given within 10 days of the
date the contribution is due. The Company also will furnish to PBGC such
other financial statements or reports it has generated as PBGC may
8. Events of Default.
If one or more of the following events or conditions shall occur,
PBGC shall have the remedies provided below in section 9:
(a) the Company fails to make any payment required under this
Agreement, and such failure continues for 5 days;
(b) the Company otherwise fails to satisfy any term or condition of
(c) the Company becomes insolvent or goes out of business;
(d) there is a material and adverse change in the business or
financial condition of the Company;
(e) a trustee, receiver or custodian is appointed over all or
substantially all of the property of the Company;
(f) any proceeding in bankruptcy or reorganization is instituted by
or against the Company;
(g) the Company makes a general assignment for the benefit of
(h) any representation, warranty or certification made by the
Company, in this Agreement, or in any document furnished in connection
therewith by the Company, shall prove to have been materially false or
misleading as of the time made or furnished in any materially adverse
(i) PBGC shall have instituted proceedings under Section 4042 of
ERISA seeking termination or appointment of a trustee in respect of any
defined benefit plan sponsored by the Company; or the Company shall have
furnished to PBGC or any participant in the Plans a notice of intent to
terminate the Plan under Section 4041(c) of ERISA;
9. Rights and Remedies.
PBGC, in its sole discretion, may elect to pursue one or more of the
following remedies. PBGC may waive any default, or remedy any default in
any reasonable manner, without waiving any other prior or subsequent
(a) General Remedies. If one or more of the Events of Default
occurs, PBGC may pursue any remedy available in law or equity;
(b) Specific Remedies. Should an Event of Default described in
subsection (a) or (b) of Section 8 occur, a lien in the Collateral of the
Company in favor of PBGC shall arise on the date said default occurs in
the amount of any missed payment or due contribution.
(c) No remedy recited in this Agreement shall limit PBGC in any
manner from pursuing any and all additional remedies provided by
The Company assumes liability for, and agrees to indemnify the Plans
and PBGC against, and on written demand to pay, or to reimburse the Plans
and PBGC (and each of their employees, directors, and agents) against the
payment of any or all liabilities, obligations, losses, damages,
penalties, claims, suits, actions, costs, expenses and disbursements,
including legal fees and expenses of any kind and nature imposed on,
incurred by, or asserted against the Plans or PBGC relating to or arising
out of this Agreement.
This Agreement shall terminate upon receipt by PBGC of a
certification from the actuary for the Plans that the Required Credit
Balance has been preserved, as provided in section 7(a), for each of the
Plans through the end of the plan year that ends during the calendar year
(a) Amendments. The Company understands that this Agreement cannot
be changed or terminated orally, can only be modified upon the written
consent of the parties hereto, and that it is for the benefit of and
binding upon the Company and its respective successors and assigns.
(b) Counterparts. This Agreement may be executed in one or more
counterparts, all of which taken together shall constitute one and the
(c) Governing Law. This Agreement, and the rights and obligations of
the parties hereunder shall be governed by and construed in accordance
with the laws of the State of Wisconsin except to the extent such laws are
superseded by Federal law.
(d) Notices. All notices and other communications hereunder shall be
in writing and shall be delivered to the intended recipient at the Address
for Notices specified below or at such other address as shall be
designated by any of them in a notice to each other party set forth
therein. All notices and other communications shall be deemed to have been
duly given, in the case of transmission by telecopy, when sent; in the
case of hand delivery, when received; or in the case of mail, three
business days after the date deposited in the mail addressed as described
Address for Notices:
If to the Company: Ladish Co. Inc.
5481 South Packard Avenue
Cudahy, Wisconsin 53110
Attn: Wayne E. Larsen
If to PBGC: Pension Benefit Guaranty Corp.
1200 K Street, N.W.
Washington, D.C. 20005
Attention: Executive Director
(With a copy to the Office of the General Counsel)
(e) Anti-waiver and severability. PBGC's failure to exercise any
right, remedy or option under this Agreement, or any delay by PBGC in
exercising any of them, will not operate as a waiver. The Company
understands that the only way PBGC may waive its rights is in writing
signed by an authorized agent of PBGC. All of PBGC's rights and remedies
under this Agreement are cumulative and not exclusive of each other. If
any provision of this Agreement is unenforceable for any reason, it shall
not affect the enforceability of the other provisions of this Agreement.
IN WITNESS WHEREOF, this Agreement has been duly executed and
delivered as of the day stated above.
PENSION BENEFIT GUARANTY CORPORATION
By: /s/ Ellen Hennessy
Deputy Executive Director and Chief
LADISH CO., INC.
By: /s/ Wayne E. Larsen
Wayne E. Larsen
Vice President of Law/Finance & Secretary