Exhibit 10.20
March 31, 2000
Dr. Xxxx Xxxx
C&D Technologies, Inc.
Power Electronics Division
0000 X. Xxxxxxxxxx Xxxxx
Xxxxx 000
Xxxxxx, XX 00000-0000
Dear Xxxx:
You are presently employed by C&D Technologies, Inc., a Delaware
corporation (the "Company"), in an executive capacity and the Company desires to
encourage such continued employment by providing certain protections for you by
entering into this Agreement with you, in return for which you agree to continue
to be employed by the Company on the terms set forth herein, to refrain from
certain competitive activity and to provide the Company with certain assurances
upon your departure. In consideration of same, the Company agrees to employ you,
and you agree to accept such employment, under the following terms and
conditions:
1. TERM OF EMPLOYMENT.
(a) Except for earlier termination as is provided in Section 9 or 10
below, your employment under this Agreement shall be for the period commencing
on the date hereof (the "Effective Date") and terminating on February 27, 2001
(the "Initial Term" ).
(b) This Agreement shall be automatically renewed for successive terms
of one month each, unless either party shall have given to the other party at
least 30 days' prior written notice of the termination of this Agreement (a
"Termination Notice"). If such 30 days' prior written notice is given by either
party, (i) the Company shall, without any liability to you, have the right,
exercisable at any time after such notice is sent, to elect any other person to
the office or offices in which you are then serving and to remove you from such
office or offices, but (ii) all other obligations each of you and the Company
have to the other, including the Company's obligation to pay your compensation
and make available the medical and dental insurance to which you are entitled
hereunder, shall continue until the date your employment terminates as specified
in such notice.
2. COMPENSATION.
(a) You shall be compensated for all services rendered by you under
this Agreement at the rate of $210,000 per annum (such salary, as it is from
time to time adjusted, is herein referred to as the ("Base Salary"). Such Base
Salary shall be payable in periodic installments twice monthly in accordance
with the Company's payroll practices for salaried employees. The Compensation
Committee of the Board of Directors shall review such Base Salary prior to April
1, 2001 and each year thereafter during the term of this Agreement, including
any renewal term, and shall make such adjustments, if any, as the Compensation
Committee shall determine; provided, however, that no adjustment shall reduce
the Base Salary below $210,000.
(b) If your employment hereunder shall be terminated (i) by the Company
without notice of Cause (as defined in Section 9(c)) therefor having been given
to you (other than pursuant to Section 9(a) or 9(b) and notwithstanding the
provisions of Section 1(a)), or (ii) as a result of the non-renewal of this
Agreement pursuant to a Termination Notice given by the Company under Section
1(b) then, in addition to paying you the Accrued Obligations (as hereinafter
defined), for a 180 day period after the effective date of such termination (if
such termination occurs after the expiration of the Initial Term) or for the
greater of the remaining number of days of the Initial Term and 180 days (if
such termination occurs during the Initial Term) the Company shall pay you at
the rate of your Base Salary in effect at the time of such termination in
periodic payments in accordance with the Company's payroll practices for
salaried employees; provided, however, that your right to receive such payments,
other than the Accrued Obligations, shall be conditioned upon your execution of
a Release (the "Release"). Such Release shall be substantially in the form of
Exhibit A hereto but may be modified by the Company in its sole discretion as it
deems appropriate to reflect changes in law or circumstances arising after the
date of this Agreement; provided, however, that no such modification shall
increase any of your obligations to the Company over those contemplated by this
Agreement, including Exhibit A hereto. The term "Accrued Obligations" shall mean
(i) your Base Salary through the date of termination and (ii) all benefits that
have accrued to you under the terms of all employee benefits plans of the
Company in which you are entitled to participate.
3. DUTIES.
(a) During the term of your employment hereunder, including any renewal
thereof, you agree to serve as the Vice President-General Manager, Power
Electronics Division (the "Division") or in such other capacity with duties and
responsibilities of a similar nature as those initially undertaken by you
hereunder as the President of the Company may from time to time determine. Your
duties may be changed at any time and from time to time hereafter, upon mutual
agreement, consistent with office or offices in which you serve as deemed
necessary by the President of the Company. You also agree to perform such other
services and duties consistent with the office or offices in which you are
serving and its responsibilities as may from time to time be prescribed by the
Board of Directors, and you also agree to serve, if elected, as an officer
and/or director of the Company and/or any of the Company's other direct or
indirect subsidiaries without additional compensation, in all cases in
conformity to the by-laws of each such corporation. Unless you
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otherwise agree, you shall not be required to relocate your place of business to
a location that would increase your commuting distance by greater than 25 miles.
(b) You shall devote your full employment energies, interest,
abilities, time and attention during normal business hours (excluding the
vacation periods provided in Section 4(b) below) exclusively to the business and
affairs of the Company, its parent corporation and subsidiaries, if any, and
shall not engage in any activity that conflicts or interferes with the
performance of duties hereunder.
(c) You agree to cooperate with the Company, including taking such
reasonable medical examinations as may be necessary, in the event the Company
shall desire or be required (such as pursuant to the terms of any bank loan or
any other agreement) to obtain life insurance insuring your life.
(d) You shall, except as otherwise provided herein, be subject to the
Company's rules, practices and policies applicable to the Company's senior
executive employees. Without limiting the generality of the foregoing, you
shall, with respect to the Company and its parents, subsidiaries, assets and
stockholders, act in a manner consistent with your fiduciary responsibilities as
an executive of the Company.
4. BENEFITS.
(a) You shall have the benefit of such life and medical insurance,
bonus, stock option and other similar plans as the Company may have or may
establish from time to time, and in which you would be entitled to participate
by reason of your position with the Company, pursuant to the terms thereof.
Also, to the extent you have met the qualifications required, you may
participate in the Company's savings and retirement plans. The foregoing,
however, shall not be construed to require the Company to establish any such
plans or to prevent the Company from modifying or terminating any such plans,
and no such action or failure thereof shall affect this Agreement.
(b) You shall be entitled to a vacation of four weeks each year.
(c) The Company will provide you with an annual physical examination.
5. EXPENSES. The Company will reimburse you for reasonable expenses
(consistent with Company policy), including traveling expenses, incurred by you
in connection with the business of the Company, upon the presentation by you of
appropriate substantiation for such expenses.
6. RESTRICTIVE COVENANTS.
(a) During such time as you shall be employed by the Company, and for
the applicable Restricted Period (as defined below) thereafter, you shall not,
without the written consent of the Board of Directors, directly or indirectly,
become associated with, render services to, invest in,
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represent, advise or otherwise participate as an officer, employee, director,
stockholder, partner, agent of or consultant for, any business that, at the time
your employment with the Company ceases, is competitive with the business in
which the Company is engaged or in which the Company has taken affirmative steps
to engage (a "Competitive Business"); provided, however, that nothing herein (i)
shall prevent you from investing without limit in the securities of any company
listed on a national securities exchange, provided that your involvement with
any such company is solely that of a stockholder, and (ii) is intended to
prevent you from being employed during the applicable Restricted Period by any
business other than a Competitive Business. With respect to any termination of
your employment other than upon a Change of Control pursuant to Section 10, the
applicable Restricted Period shall be the period following the date your
employment terminates during which you are receiving the payments described in
Section 2(b) hereof, and with respect to a termination of your employment upon a
Change of Control pursuant to Section 10, the applicable Restricted Period shall
be the two-year period following the date your employment terminates.
(b) The parties hereto intend that the covenant contained in this
Section 6 shall be deemed a series of separate covenants for each state, county
and city. If, in any judicial proceeding, a court shall refuse to enforce all
the separate covenants deemed included in this Section 6, because, taken
together, they cover too extensive a geographic area, the parties intend that
those of such covenants (taken in order of the states, counties and cities
therein which are least populous), which, if eliminated, would permit the
remaining separate covenants to be enforced in such proceeding, shall, for the
purpose of such proceeding, be deemed eliminated from the provisions of this
Section 6.
7. CONFIDENTIALITY, NON-INTERFERENCE, INVENTIONS AND PROPRIETARY
INFORMATION.
(a) In the course of (i) your employment with the Company hereunder,
and (ii) any prior employment with the Company, you will have and have had
access to Confidential or Proprietary Data or Information of the Company. You
shall not at any time divulge or communicate to any person nor shall you direct
any Company employee to divulge or communicate to any person (other than to a
person bound by confidentiality obligations similar to those contained herein
and other than as necessary in performing your duties hereunder) or use to the
detriment of the Company any of such Confidential or Proprietary Data or
Information, except to the extent the same (i) becomes publicly known other than
through a breach of this Agreement by you, (ii) was known to you prior to the
disclosure thereof by the Company to you from a source that was entitled to
disclose it or (iii) is subsequently disclosed to you by a third party who shall
not have receive it under any obligation of confidentiality to the Company. The
term "Confidential or Proprietary Data or Information" as used in this
Agreement, shall mean data or information not generally available to the public,
including personnel information, financial information, customer lists, supplier
lists, product and tooling specifications, trade secrets, information concerning
product composition and formulas, tools and dies, drawings and schematics,
manufacturing processes, information regarding operations, systems and services,
knowhow, computer and any other electronic, processed or collated data, computer
programs, and pricing, marketing, sales and advertising data.
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(b) You shall not, during the term of this Agreement and for the
applicable Restricted Period after the termination of your employment by the
Company, for your own account or for the account of any other person, (i)
solicit or divert to any Competitive Business any individual or entity who is a
customer of the Company or any subsidiary or affiliate of the Company or who was
a customer of the Company or any subsidiary or affiliate during the preceding
twelve-month period, (ii) employ, retain as a consultant, attempt to employ or
retain as a consultant, solicit or assist any Competitive Business in employing
or retaining as a consultant any current employee of the Company or any
subsidiary or affiliate or any person who was employed by the Company or any
subsidiary or affiliate during the preceding twelve-month period or (iii)
otherwise interfere with the Company's relationship with any of its suppliers,
customers, employees or consultants; provided, however, that you shall not be
prohibited from contacting suppliers or customers after termination of your
employment with regard to matters that do not violate your noncompetition or
confidentiality obligations contained in Sections 6(a) and 7(a) or interfere
with the Company's relationship with such parties.
(c) It is understood that you may, during your employment, conceive or
develop certain inventions, innovations or discoveries related to any business
in which the Company may be engaged, either solely or jointly with others. In
connection with the conception or development thereof, you agree to disclose
promptly to the Company all such inventions, innovations and discoveries, to
assign, and hereby do assign, to the Company all of your right, title and
interest in and to said inventions, innovations and discoveries, and to do all
things and sign all documents deemed by the Company to be necessary or
appropriate to vest in the Company, its successors and assigns, all of your
right, title and interest in and to such inventions, innovations or discoveries,
and to procure for the Company, at the Company's expense, patents, copyrights
and/or trademarks covering such inventions, innovations or discoveries in the
United States and its possessions and in foreign countries, at the discretion
and under the direction of the Company. In the event the Company is unable for
any reason to assure your signature on such documents, you irrevocably appoint
the Company and its duly authorized officers and agents as your agents and
attorneys-in-fact to execute such documents and to do such things with the same
legal force and effect as if executed or done by you.
(d) All written, electronic and other tangible materials, records and
documents made by you or coming into your possession during your employment
concerning any products, processes or equipment, manufactured, used, developed,
investigated or considered by the Company, or otherwise concerning the business
or affairs of the Company, shall be the sole property of the Company, and upon
termination of your employment, or upon request of the Company during your
employment, you shall promptly deliver the same to the Company. In addition,
upon termination of your employment, or upon request of the Company during your
employment, you will deliver to the Company all other Company property in your
possession or under your control, including, but not limited to, financial
statements, marketing and sales data, patent applications, drawings and other
documents, and all Company keys, credit cards, computer and telephone equipment
and automobiles.
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8. EQUITABLE RELIEF. With respect to the covenants contained in
Sections 6 and 7 of this Agreement, you agree that any remedy at law for any
breach of said covenants may be inadequate and that the Company shall be
entitled to specific performance or any other mode of injunctive and/or other
equitable relief to enforce its rights hereunder or any other relief a court
might award.
9. EARLIER TERMINATION. Your employment hereunder shall terminate prior
to the Initial Term (or any renewal term, in the event of renewal) on the
following terms and conditions:
(a) This Agreement shall terminate automatically on the date of your
death. Notwithstanding the foregoing, if you die during the term of this
Agreement, the Company shall (i) continue to make payments to your estate of
your Base Salary as then in effect pursuant to this Agreement for 180 days after
the date of your death, and (ii) pay your estate any reimbursable expenses which
otherwise would have been paid to you to the date of your death.
(b) This Agreement shall be terminated if you are unable to perform
your duties hereunder for a period of any 180 days in any 365 consecutive day
period by reason of physical or mental disability. Notwithstanding the
foregoing, if this Agreement is terminated pursuant to this Section 9(b), the
Company shall pay any accrued but unpaid Base Salary through the date of
termination and any reimbursable expenses due to you hereunder. For purposes of
this Agreement "physical or mental disability" shall mean your inability, due to
health reasons, to discharge properly your duties of employment, supported by
the opinion of a physician satisfactory to both you and the Company. If the
parties do not agree on a physician mutually satisfactory to both of you and the
Company within ten days of written demand by one or the other, a physician shall
be selected by the president of the Pennsylvania Medical Association, and the
physician shall, within 30 days thereafter, make a determination as to whether
disability exists and certify the same in writing. Services of the physician
shall be paid for by the Company. You shall fully cooperate with the examining
physician including submitting yourself to such examinations as may be requested
by the physician for the purpose of determining whether you are disabled.
(c) This Agreement shall terminate immediately upon the Company's
sending you written notice terminating your employment hereunder for Cause. The
Company may terminate this Agreement for Cause, but only after written notice
specifying the Cause of such action shall have been rendered to you by the
President of the Company. "Cause" shall mean any of the following:
(i) Breach of this Agreement.
(ii) Refusal or inability (other than pursuant to Section 9(a)
or 9(b)) to perform duties assigned to you in accordance with the terms of this
Agreement or overt and willful disobedience of orders or directives issued to
you by the Company and within the scope of your duties to the Company.
(iii) Willful misconduct in the performance of your duties,
functions and responsibilities.
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(iv) Commission of acts that are illegal in connection with
the performance of your duties, functions and responsibilities under this
Agreement.
(v) Commission of acts that would constitute a felony offense
during the term of this Agreement.
(vi) Violation of Company rules and regulations concerning
conflict of interest.
(vii) Gross mismanagement of the assets of the Company.
(viii) Gross incompetence, gross insubordination or gross
neglect in the performance of your duties hereunder or being under the habitual
influence of alcohol while on duty or possession, use, manufacture,
distribution, dispensation or sale of illegal drugs while on or off duty.
(ix) Any act or omission, whether or not included in the
foregoing, that a court of competent jurisdiction would determine to constitute
cause for termination.
Existence of Cause shall be conclusively determined for all purposes hereunder
by the President of the Company. Such advice and consultation shall be utilized
as such officer regards as appropriate, and no obligation or duty with respect
to any procedure or formality is created by this Agreement. If the Company
terminates this Agreement for Cause under this Section 9(c), the Company shall
not be obligated to make any further payments under this Agreement except for
the Accrued Obligations.
(d) Except as set forth in Section 10, your coverage under the benefits
program provided by the Company will cease effective on your termination date.
You will be entitled to elect continuation of your medical and dental benefits
at the same cost the Company pays, pursuant to the provisions of the
Consolidated Omnibus Budget Reconciliation Act ("COBRA"). Details with regard to
COBRA continuation coverage will be provided to you shortly after your
termination date.
(e) Except as set forth in Section 10, life insurance coverage will
cease upon your termination date. You may, however, apply to General American
Life Insurance Company (or such other insurance company as may provide group
life insurance to the Company's employees at the time) for an individual
converted life policy, with such application and payment of the first premium
required to be accomplished within 31 days after your termination date. Details
regarding this conversion option will be provided to you shortly after your
termination date.
(f) Accidental death and dismemberment and long term disability
coverages cease with your termination date and may not be extended or converted.
10. TERMINATION UPON A CHANGE OF CONTROL.
(a) In the event a Change of Control (as defined below) occurs, and
within 24 months after such Change of Control: (i) your employment with the
Company is terminated by you pursuant to a Termination for Good Reason (as
defined below); or (ii) your employment with the Company
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is terminated by the Company for any reason other than death, disability or for
Cause pursuant to Sections 9(a), (b) or (c); or (iii) this Agreement is not
renewed due to a Termination Notice given by the Company, as provided in Section
1(b), (the events under clauses (i), (ii) and (iii) herein collectively called a
"Change of Control Termination"), you shall be entitled to receive the payments
and benefits set forth in Section 10(e) and (f) below, which payments and
benefits shall be in substitution for, and not in addition to, the payments and
benefits otherwise payable under Section 2(a) or 2(b) of this Agreement in the
event of termination. Your right to receive such payments and benefits, other
than the Accrued Obligations, shall be in consideration of your agreements under
this Agreement, including but not limited to your agreement not to compete with
the Company for two years after a Change of Control pursuant to Section 6, and
shall be conditioned upon your execution of a Release. Such Release shall be
substantially in the form of Exhibit A but may be modified by the Company as it
deems appropriate to reflect changes in law or circumstances arising after the
date of this Agreement; provided that no such modification shall increase any of
your obligations to the Company over those contemplated by this Agreement,
including Exhibit A hereto.
(b) For purposes of the Agreement, a "Change of Control" shall be
deemed to have occurred if: (i) any person (as defined in Section 3(a)(9) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act") and as used in
Sections 13(d) and 14(d) thereof)), excluding the Company, any subsidiary and
any employee benefit plan sponsored or maintained by the Company or any
subsidiary (including any trustee of any such plan acting in his capacity as
trustee), but including a "group" as defined in Section 13(d)(3) of the Exchange
Act, becomes the beneficial owner (as defined in Rule 13d-3 under the Exchange
Act) of shares of the Company having at least 30% of the total number of votes
that may be cast for the election of directors of the Company; (ii) the
shareholders of the Company shall approve any merger or other business
combination of the Company, sale of all or substantially all of the Company's
assets or combination of the foregoing transactions (a "Transaction"), other
than a Transaction involving only the Company and one or more of its
subsidiaries, or a Transaction immediately following which the shareholders of
the Company immediately prior to the Transaction continue to have a majority of
the voting power in the resulting entity (excluding for this purpose any
shareholder of the Company owning directly or indirectly more than 10% of the
shares of the other company involved in the Transaction) and no person is the
beneficial owner of at least 30% of the shares of the resulting entity as
contemplated by Section 10(b)(i) above; or (iii) within any 24-month period
beginning on or after the date hereof, the persons who were directors of the
Company immediately before the beginning of such period (the "Incumbent
Directors") shall cease (for any reason other than death) to constitute at least
a majority of the Board of Directors of the Company or the board of directors of
any successor to the Company, provided that any director who was not a director
as of the date hereof shall be deemed to be an Incumbent Director if such
director was elected to the Board by, or on the recommendation of or with the
approval of, at least two-thirds of the directors who then qualified as
Incumbent Directors either actually or by prior operation of this Section
10(b)(iii), unless such election, recommendation or approval was the result of
an actual or threatened election contest of the type contemplated by Regulation
14a-11 under the Exchange Act or any successor provision. Notwithstanding the
foregoing, no Change of Control of the Company shall be deemed to have occurred
for purposes of this Agreement by reason of any actions or events in which you
participate in a capacity other than in your capacity as an executive or
director of the Company.
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(c) For purposes of the Agreement, a "Termination for Good Reason"
means a termination by you by written notice given within 90 days after the
occurrence of the Good Reason event. A notice of Termination for Good Reason
shall indicate the specific termination provision in Section 10(d) relied upon
and shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for Termination for Good Reason. Your failure to set forth in
such notice any facts or circumstances that contribute to the showing of Good
Reason shall not waive any of your rights hereunder or preclude you from
asserting such fact or circumstance in enforcing your rights hereunder. The
notice of Termination for Good Reason shall provide for a date of termination
not less than 10 nor more than 60 days after the date such Notice of Termination
for Good Reason is given.
(d) For purposes of the Agreement, "Good Reason" shall mean the
occurrence, without your express written consent, of any of the following
circumstances, unless such circumstances are fully corrected prior to the date
of termination specified in the notice of Termination for Good Reason as
contemplated in Section 10(c) above: (i) any material diminution of your
positions, duties or responsibilities hereunder (except in each case in
connection with the termination of your employment for Cause pursuant to Section
9(c) or due to disability or death pursuant to Section 9(a) or 9(b) or
temporarily as a result of your illness or other absence), or the assignment to
you of duties or responsibilities that are inconsistent with your position under
the Agreement at the time of a Change of Control; (ii) your removal from, or
your nonreelection to, the officer positions with the Company specified in this
Agreement; (iii) relocation of the Division's principal executive offices to a
location more than 25 miles from its location at the time of the Change of
Control; (iv) failure by the Company, after a Change of Control, (A) to continue
any bonus plan, program or arrangement in which you are entitled to participate
immediately prior to the Change of Control (the "Bonus Plans"), provided that
any such Bonus Plans may be modified at the Company's discretion from time to
time but shall be deemed terminated if (x) any such plan does not remain
substantially in the form in effect prior to such modification and (y) if plans
providing you with substantially similar benefits are not substituted therefor
("Substitute Plans"), or (B) to continue you as a participant in the Bonus Plans
and Substitute Plans on at least the same basis as to potential amount of the
bonus and substantially the same level of criteria for achievability thereof as
you participated in immediately prior to any change in such plans or awards, in
accordance with the Bonus Plans and the Substitute Plans; (v) any material
breach by the Company of any provisions of this Agreement; or (vi) failure of
any successor to the Company to promptly acknowledge in writing the obligations
of the Company hereunder.
(e) Upon a Change of Control Termination, as provided in Section 10(a),
the Company shall pay or provide you the following payments and benefits:
(i) The Company shall pay to you the Accrued Obligations in a
lump sum within five business days after the date of termination.
(ii) The Company shall pay to you as severance pay, not later
than the tenth day following the date of your execution and delivery of the
Release required pursuant to Section 10(a) of this Agreement:
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(A) a lump sum payment in an amount equal to two
years of your Base Salary; and
(B) a lump sum payment in an amount equal to two of
your annual incentive bonuses, such payment to be equal to the greater of (i)
the amount of all incentive bonuses paid to you with respect to each of the two
most recently completed fiscal years of the Company for which a bonus has been
paid or (ii) the incentive bonus paid to you with respect to the most recently
completed fiscal year of the Company for which a bonus has been paid plus an
amount equal to your Target Bonus (as hereinafter defined); provided, however,
that if you have been employed by the Company for less than two years, such
payment shall be equal to the greater of (x) the amount of the incentive bonus
paid to you with respect to the most recently completed fiscal year of the
Company for which a bonus has been paid plus your Target Bonus or (y) the amount
of your Target Bonus multiplied by two. The term "Target Bonus" shall mean the
incentive bonus that would have been payable for the fiscal year that includes
the date on which your employment terminates under the incentive bonus program
in effect as of the date of the Change of Control, assuming that you had been
entitled to receive an amount in respect of such bonus based solely upon the
target percentage applicable to employees in the same employment grade as you
and your Base Salary as of the date of termination (or if greater, your Base
Salary as of the date on which occurred an event giving rise to a Change of
Control Termination), and without regard to actual performance.
(iii) The Company shall continue the participation of you and
your dependents for a period of two years after the date of termination in all
health, medical and accident, life and other welfare plans (as defined in
Section 3(l) of ERISA), in which you were participating immediately prior to the
date of termination, except for any disability plans; provided, however, that to
the extent the Company's plans do not permit such continued participation or
such participation would have an adverse tax impact on such plans or on the
other participants in such plans, the Company may instead provide materially
equivalent benefits to you outside of such plans; provided, further, that under
such circumstances, (i) medical insurance benefits may be provided by the
Company paying any COBRA premiums (COBRA coverage, in any event, to be measured
from the date of termination of employment) and (ii) if the Company is unable to
continue your life insurance coverage, the Company shall pay you an amount equal
to twice the premium paid during the year prior to termination or if you convert
the insurance to an individual policy, the Company shall pay the premium for
such insurance for two years. You shall complete such forms and take such
physical examinations as reasonably requested by the Company. To the extent you
incur any tax obligation as a result of the provisions of this Section 10(e)
that you would not have incurred if you remained an employee of the Company and
had continued to participate in the benefit plans as an employee, the Company
shall pay to you, at the time the tax is due, an amount to cover such taxes and
the taxes on the amount paid to cover such taxes.
(iv) All outstanding stock options and restricted stock awards
that have been granted to you by the Company at any time but have not yet vested
and upon which vesting depends solely upon the passage of time, shall
immediately vest or become nonforfeitable, as the case may be. In the event the
foregoing sentence becomes applicable, the Company agrees to cause the Board of
Directors to take all steps necessary to implement the foregoing sentence.
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(v) All amounts payable to you upon a Change of Control under
the Company's Supplemental Executive Retirement Plan and Deferred Compensation
Plan shall be paid to you in accordance with the respective terms of those
plans.
(vi) The Company, at its expense, shall provide you with
outplacement services at a level appropriate for the most senior executive
employees through an outplacement firm of your choice for a period of up to one
year after the date of the Change of Control Termination.
(f) (i) In the event that any payment, coverage or benefit
(collectively, the "Covered Benefits") provided to you by the Company or an
Affiliate (as defined below) is or becomes subject to the excise tax imposed
under Section 4999 or any successor provision of the Internal Revenue Code of
1986, as amended (the "Code"), or you incur interest or penalties with respect
to that excise tax (that excise tax, together with any interest and penalties,
are hereinafter collectively referred to as the "Excise Tax"), the Company shall
pay you an additional amount (a "Gross-Up Bonus") at the time or times specified
in Section 10(f)(iii)(z) below. The amount of the Gross-Up Bonus shall equal the
quotient determined by dividing (x) the Excise Tax attributable to the Covered
Benefits by (y) one minus the highest marginal income tax rate, where the term
"highest marginal income tax rate" means the sum of the highest combined local,
state and federal personal income tax rates (including any state unemployment
compensation tax rate, any surtax rate as well as the Medicare hospital
insurance tax rate imposed on employees under the Federal Insurance
Contributions Act) as in effect for the calendar year to which the Excise Tax
attributable to the Covered Benefits relates, provided that in determining the
highest tax rate for federal purposes both the deductibility of state and local
income tax payments and the reduction in the deductibility of itemized
deductions shall be taken into account; it being the intention of the parties
hereto that your net after tax position (after taking into account any interest
or penalties imposed with respect to such taxes) upon receipt of the Covered
Benefits is no less advantageous to you than the net after tax position you
would have had if Section 4999 of the Code had not been applicable to any
portion of the Covered Benefits.
(ii) All determinations to be made under this Section 10(f),
including the determination of whether an Excise Tax is payable and the amount
thereof, shall be made by a law firm practicing in the Philadelphia,
Pennsylvania metropolitan area that is knowledgeable in tax law matters, which
firm shall be selected and paid for by the Company and acceptable to you. If tax
counsel's determinations are not finally accepted by the Internal Revenue
Service upon audit, then appropriate adjustments shall be computed (with a
Gross-Up Bonus, if applicable) by that tax counsel based upon the final amount
of the Excise Tax so determined.
(iii) For purposes of this Section 10(f):
(x) An "Affiliate" shall mean any successor to the
Company, any member of an affiliated group including the Company (determining
using the definition in Section 1504 of the Code) or any entity that becomes a
member of such an affiliated group as a result of the transaction causing the
Change of Control.
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(y) When determining the amount of the Gross-Up
Bonus, you will be deemed to have otherwise allowable deductions for federal,
state and local tax purposes at least equal to those disallowed because of the
inclusion of the Gross-Up Bonus in your adjusted gross income.
(z) The portion of the Gross-Up Bonus attributable
to a Covered Benefit shall be paid to you within 10 business days following the
provision to you of the Covered Benefit. In the event that the amount of Excise
Tax due exceeds the amount of Excise Tax determined by tax counsel, the Company
shall pay you an additional Gross-Up Bonus in respect of that excess at the time
that the amount of the excess is determined under Section 10(f)(ii). In the
event the amount of Excise Tax due is less than the amount of Excise Tax
determined by tax counsel, you shall repay the Company the portion of the
Gross-Up Bonus attributable thereto at the time that the amount of the reduction
in Excise Tax is determined under Section 10(f)(ii); provided, however, that if
any portion of the amount you must repay to the Company has been paid to any
federal, state or local tax authority, your repayment of that portion shall be
postponed until the tax authority has actually refunded or credited that amount
to you.
(g) Upon the occurrence of a Change of Control, if the Company fails to
perform any of its obligations under this Agreement or the Company or any other
person asserts the invalidity of any provision of this Agreement and you incur
any costs in successfully enforcing or defending any of the provisions of this
Agreement, including legal fees and expenses and court costs, the Company shall
reimburse you for all such costs incurred by you.
11. ENTIRE AGREEMENT; MODIFICATION. This Agreement, together with
Exhibit A hereto and all rights to which you are entitled under all employee
benefit plans in which you participate, constitutes the full and complete
understanding of the parties, and will, on the Effective Date, supersede all
prior agreements and understandings, oral or written, between the parties,
except for the employment offer letter dated February 3, 2000 between you and
the Company ("Offer Letter") and the Agreement Relating to Intellectual Property
and Confidential Information dated February 11, 2000 between you and the Company
("Confidentiality Agreement"); provided, however, that if the terms of any of
such employee benefit plan, or such Confidentiality Agreement shall be
inconsistent with the provisions of the Agreement, the provisions of this
Agreement shall control, and if the terms of the Offer Letter are inconsistent
with the provisions of this Agreement, the terms of the Offer Letter shall
control. This Agreement may not be modified or amended except by an instrument
in writing signed by the party against which enforcement thereof may be sought.
Each party to this Agreement, acknowledges that no representations, inducements,
promises or agreements, oral or written, have been made by either party or
anyone acting on behalf of either party, which are not embodied herein and that
no other agreement, statement or promise not set forth or referred to in this
Agreement shall be valid or binding.
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12. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
13. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement shall not operate as or be construed as a waiver of
any subsequent breach.
14. NO MITIGATION REQUIRED. Upon a termination of your employment by
the Company without Cause pursuant to Section 2(b) or upon a Change of Control
pursuant to Section 10, you shall have no obligation to seek other employment
but shall not be prohibited from doing so, and no compensation paid to you as
the result of any other employment shall reduce any payment required to be made
by the Company hereunder.
15. NOTICES. All notices hereunder shall be in writing and shall be
sent by express mail or by certified or registered mail, postage prepaid, return
receipt requested: if to you, to your residence as listed in the Company's
records; and if to the Company, to the address set forth above with copies to
the President.
16. ASSIGNABILITY; BINDING EFFECT. This Agreement shall not be assigned
by either party, except that it may be assigned by the Company to an acquirer of
all or substantially all of the assets of the Company or other successor to the
Company, subject to your rights arising from a change of control as provided in
Section 10. This Agreement shall be binding upon and inure to the benefit of
you, your legal representatives, heirs and distributees, and shall be binding
upon and inure to the benefit of the Company, its successors and assigns.
17. NONDISPARAGEMENT. You agree not to publicly or privately disparage
the Company, its personnel, products or services either during or upon
termination of your employment with the Company.
18. SURVIVAL. All of the provisions of this Agreement that by their
terms are to be performed or that otherwise are to endure after the termination
of your employment by the Company shall survive the termination of your
employment and shall continue in effect for the respective periods therein
provided or contemplated.
19. GOVERNING LAW. All questions pertaining to the validity,
construction, execution and performance of this Agreement shall be construed and
governed in accordance with the laws of the Commonwealth of Pennsylvania,
without giving effect to the conflicts or choice of law provisions thereof.
20. HEADINGS. The headings of this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
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21. COUNTERPARTS. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original but all of which
together shall constitute one and the same instrument.
If this Agreement correctly sets forth our understanding, please sign
the duplicate original in the space provided below and return it to the Company,
whereupon this shall constitute the employment agreement between you and the
Company effective and for the term as stated herein.
C&D TECHNOLOGIES, INC.
By:/s/ Xxxx X. Xxxxxxx, Xx.
----------------------------
Title: President and CEO
Agreed as of the date first above written:
/s/ Xxxx Xxxx
--------------------------------
Xxxx Xxxx
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EXHIBIT A
RELEASE
This Release is made this _____ day of _______________, ____ by and
between C&D Technologies, Inc. ("Employer") and _________________ ("Employee").
Recitals:
WHEREAS, the parties are parties to an Employment Agreement (the
"Employment Agreement") dated __________, pursuant to which Employee was
employed by Employer; and
WHEREAS, the Employment Agreement has terminated; and
WHEREAS, your execution and delivery of this Release is a condition to
the Employer's obligations to pay certain compensation and benefits to you under
the Employment Agreement;
NOW THEREFORE, the parties hereto, intending to be legally bound, in
consideration of the mutual promises and undertakings set forth herein, do
hereby agree as follows:
1. As of _____________________, ____, Employee's employment with
Employer shall terminate, and Employee shall have no further job
responsibilities to perform for Employer; provided, however, that Employee shall
cooperate with Employer in transitioning Employee's job responsibilities as
Employer shall reasonably request, provided that Employee shall be entitled to
receive reasonable compensation for any services rendered after such date and
shall not be obligated to take any action that would interfere with any
subsequent employment of Employee or otherwise result in economic hardship to
Employee.
2. Employer shall pay to the Employee the amounts contemplated pursuant
to Section __ of the Employment Agreement, less applicable deductions; provided
however, the first payment shall not be due and payable until ten days after the
execution by Employee and delivery to Employer of this Release.
3. For and in consideration of the monies and benefits paid to Employee
by Employer, as more fully described in Section 2 above, and for other good and
valuable consideration, Employee hereby waives, releases and forever discharges
Employer, its assigns, predecessors, successors, and affiliated entities, and
its current or former stockholders, officers, directors, administrators, agents,
servants and employees, individually and as representatives of the corporate
entity (hereinafter collectively referred to as "Releasees"), from any and all
claims, suits, debts, dues, accounts, reckonings, bonds, bills, specialties,
covenants, contracts, bonuses, controversies, agreements, promises, charges,
complaints, damages, sums of money, interest, attorney's fees and costs, or
causes of action of any kind or nature whatsoever whether in law or equity,
including, but not limited to, all claims arising out of his/her employment or
termination of employment with Employer, such as
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all claims for wrongful discharge, breach of contract, either express or
implied, interference with contract, emotional distress, fraud,
misrepresentation, defamation, claims arising under the Civil Rights Acts of
1964 and 1991 as amended, the Americans With Disabilities Act, the Age
Discrimination in Employment Act (ADEA), the National Labor Relations Act, the
Fair Labor Standards Act, the Employee Retirement Income Security Act of 1974
(ERISA), the Family and Medical Leave Act, the Pennsylvania Human Relations Act,
the Pennsylvania Wage Payment & Collection Law, the Pennsylvania Minimum Wage
Act of 1968, the Pennsylvania Equal Pay Law, and any and all other claims
arising under federal, state or local law, rule, regulation, constitution,
ordinance or public policy whether known or unknown, arising up to and including
the date of execution of this Release; provided, however that the parties do not
release each other from any claim of breach of the terms of this Release. This
release of rights does not extend to claims that may arise after the date of
this Release. Employee agrees that Employee will not initiate any charge or
complaint or institute any claim or lawsuit against Releasees or any of them
based on any fact or circumstance occurring up to and including the date of the
execution by Employee of this Release.
4 Employee agrees that the payments made and other consideration
received pursuant to this Release are not to be construed as an admission of
legal liability by Releasees or any of them and that no person or entity shall
utilize this Release or the consideration received pursuant to this Release as
evidence of any admission of liability since Releasees expressly deny liability.
5 Employee affirms that the only consideration for the signing of this
Release are the terms stated herein and in the Employment Agreement and that no
other promise or agreement of any kind has been made to Employee by any person
or entity whatsoever to cause Employee to sign this Release.
6 Employee and Employer affirm that the Employment Agreement and this
Release set forth the entire agreement between the parties with respect to the
subject matter contained herein and supersede all prior or contemporaneous
agreements or understandings between the parties with respect to the subject
matter contained herein. Further, there are no representations, arrangements or
understandings, either oral or written, between the parties, which are not fully
expressed herein. Finally, no alteration or other modification of this Release
shall be effective unless made in writing and signed by both parties.
7 Employee acknowledges that Employee has been given a period of at
least 21 days within which to consider this Release.
8 Following the execution of this Release, the Employee has a period of
7 days from the date of execution to revoke this Release, and this Release shall
not become effective or enforceable until the revocation period has expired.
9 Employee certifies that Employee has returned to Employer all keys,
identification cards, credit cards, computer and telephone equipment and other
property or information of Employer in Employee's possession, custody, or
control including, but not limited to, any information contained in any computer
files maintained by Employee during Employee's
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employment with Employer. Employee certifies that Employee has not kept the
originals or copies of any documents, files, or other property of Employer which
Employee obtained or received during Employee's employment with Employer.
10 Employee acknowledges that Employer advised Employee to consult with
an attorney prior to executing this Release.
11 Employee affirms that Employee has carefully read this Release, that
Employee fully understands the meaning and intent of this document, that
Employee has signed this Release voluntarily and knowingly, and that Employee
intends to be bound by the promises contained in this Release for the
consideration described in Section 2 above.
IN WITNESS WHEREOF, Employee and the authorized representative of
Employer have executed this Release on the dates indicated below:
C&D TECHNOLOGIES, INC.
Dated:_____________________ By:______________________________
Title:__________________________
Dated:_____________________ ______________________________
Xxxx Xxxx
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ENDORSEMENT
I, ___________________________________, hereby acknowledge that I was
given 21 days to consider the foregoing Release and voluntarily chose to sign
the Release prior to the expiration of the 21-day period.
I declare under penalty of perjury under the laws of the Commonwealth
of Pennsylvania that the foregoing is true and correct.
EXECUTED this ________ day of ______________, ____, at
_______________________________________, Pennsylvania.
-------------------------------
Xxxx Xxxx
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