Exhibit 10.1
AGREEMENT AND GENERAL RELEASE
THIS AGREEMENT made this 2nd day of December 1998 by and between
LYDALL, INC. (the "Company") and XXXXXXX X. XXXXXX (the "Executive").
W I T N E S S E T H :
WHEREAS, the Company and the Executive entered into an Agreement
dated March 1, 1995 (the "1995 Agreement") relating to the Executive's
employment as Chairman, President and Chief Executive Officer of the Company (a
copy of which is attached hereto); and
WHEREAS, the Executive has expressed his willingness effective as of
December 2, 1998 to voluntarily resign from these positions as well to
voluntarily resign from his membership on the Board of Directors, and the
Company is willing to accept such resignations; and
WHEREAS, in connection with such resignations, the Executive and the
Company have agreed to modify the 1995 Agreement as hereinafter set forth and
otherwise to fully and finally settle all matters between them to date,
including any issues that might arise out of the Executive's employment or the
termination of his employment;
NOW, THEREFORE, the Company and the Executive, in consideration of
the mutual covenants and promises contained herein, agree as follows:
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1. Resignation: On December 2, 1998 and effective as of that date, the
Executive shall tender his resignation as Chairman and Chief Executive
Officer of the Company and shall tender his resignation as a Director.
2. Modification of 1995 Agreement. Effective upon the Executive's
resignation on December 2, 1998 in accordance with Section 1 above, the
Company and the Executive agree as follows with respect to the 1995
Agreement (and the 1995 Agreement shall be deemed amended accordingly):
a. The Executive's resignation shall be considered as a termination
pursuant to Paragraph 4(a) of the 1995 Agreement (other than for cause).
b. The Executive's rate of "Annual Salary" for purposes of Paragraph
8 of the 1995 Agreement shall be $780,000 per annum.
c. The "Employment Period" for purposes of the 1995 Agreement shall
be the 30-month period beginning on December 2, 1998 and ending on June 1,
2001 (subject to earlier termination to the extent provided in clause (a)
or (c) of Paragraph 6 of the 1995 Agreement).
d. Exhibit A of the 1995 Agreement shall be modified to list only
the following Fringe Benefits:
(i) Medical Benefits
a. Lydall, Inc. Health Care Payment Plan for Salaried
Employees (includes dental benefits)
b. Lydall, Inc. Executive Medical Reimbursement Plan
(ii) Life Insurance
a. Executive Life Insurance Plan
b. Individual whole life polices (Formerly Senior
Officer Life Plan)
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(iii) Retirement Plans
a. Lydall, Inc. Pension Plan No. 1A
b. Lydall, Inc. Profit Sharing Plan No. 1
c. Lydall, Inc. 401(k) Plan
d. Lydall, Inc. Supplemental Executive Retirement
Plan
(iv) Stock Plans
All of Executive's options outstanding on December 2,
1998 under the Lydall, Inc. 1982 Stock Incentive
Compensation Plan and the Lydall, Inc. 1992 Stock
Incentive Compensation Plan
e. For the purpose only of determining the period during
which the medical benefits described in Section 2 (d)(i) above
shall be available to the Executive, the 30-month "Employment
Period" described in Section 2(c) above shall be treated as
extended until the date on which the Executive attains age 70,
provided, however, that (i) on and after the date on which the
Executive attains age 66, the Executive shall be required to
pay 50 percent of the cost of such medical coverage (but if
the Company self-insures, in no event more than 50 percent of
the COBRA rate applicable under the Company's group medical
plan), (ii) at such time as the Executive attains the earliest
age at which the Executive may qualify for Medicare, the
Executive shall enroll in Medicare Part A and Part B and shall
be required to continue such enrollment as a condition for the
continued applicability of this subsection (e), and (iii) to
the extent consistent with applicable law, the Company's
medical plans may be secondary to Medicare.
f. Any stock options described in Section 2(d)(iv)
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above that have not otherwise become exercisable by the end of
the Employment Period as defined in Section 2(c) above shall
become immediately exercisable on the last day of such
Employment Period. Any options described in Section 2(d)(iv)
above which are not incentive stock options within the meaning
of Section 422 of the Internal Revenue Code and which have
note been exercised prior to the end of the Employment Period
as defined in Section 2(c) above shall remain exercisable for
a period of one year after the end of such Employment Period
(but not beyond the term of such option).
g. The Company during the Employment Period as defined
in Section 2(c) above shall provide to the Executive at the
Company's expense tax preparation services comparable to those
provided by the Company to the Executive prior to the date of
this Agreement.
h. The Company shall forgive the outstanding loans from
the Company to the Executive existing on the date of the
Agreement and all accrued interest thereon.
i. If the Company determines that it is unable to
provide any Fringe Benefits listed in Section 2(d) above under
the terms of the applicable plan, the Company shall provide
substantially comparable benefits in some other manner;
provided, however, that on and after the date on which the
Executive attains age 66, the Company shall use its best
efforts to provide the medical coverage pursuant to Section
2(e) above in the most cost-effective manner.
j. For purposes of determining the Executive's "Final
Average Compensation" pursuant to the Company's Supplemental
Executive Retirement Plan, the Executive's last day of
employment shall be the last day of the "Employment Period"
described in Section 2(c) above.
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k. Except as modified as set forth above, the 1995
Agreement shall remain in full force and effect.
3. Additional Benefits. The Executive understands and agrees that the
consideration described in Section 2 above is more than the Executive would
otherwise be entitled to under the Company's existing plans and policies.
4. No Disparagement.
a. Unless otherwise required by a court of competent jurisdiction or
pursuant to any recognized subpoena power or as is reasonably
necessary in connection with any adversarial process between the
Executive and the Company, the Executive agrees and promises that he
will not make any oral or written statements or reveal any
information to any person, company, or agency which may be construed
to be negative, disparaging or damaging to the reputation or
business of the Company, its subsidiaries, directors, officers or
affiliates, or which would interfere in any way with the business
relations between the Company or any of its subsidiaries or
affiliates and any of their customers or potential customers.
b. Unless otherwise required by a court of competent jurisdiction or
pursuant to any recognized subpoena power or as is reasonably
necessary in connection with any adversarial process between the
Executive and the Company, the Company agrees and promises that
neither it nor its directors or officers will make any oral or
written statements or reveal any information to any person, company,
or agency which may be construed to be negative, disparaging or
damaging to the reputation or business of the Executive or any
member of his family or which
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would interfere in any way with the future business relationships of
the Executive.
5. Release and Discharge.
a. In consideration of the payments and benefits to the Executive
under this Agreement, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged by the
Executive, the Executive knowingly, voluntarily and unconditionally
hereby forever waives, releases and discharges, and covenants never
to xxx on, any and all claims, liabilities, causes of actions,
judgments, orders, assessments, penalties, fines, expenses and costs
(including without limitation attorneys' fees) and/or suits of any
kind arising out of any actions, events or circumstances before the
date of execution of this Agreement ("Claims") which the Executive
has, ever had or may have, including, without limitation, any Claims
arising in whole or in part from the Executive's employment or the
termination of the Executive's employment with the Company or the
manner of said termination; provided, however, that this Section
5(a) shall not apply to any of the obligations of the Company
specifically provided for in this Agreement or the 1995 Agreement
(as modified by this Agreement). This Agreement is intended as a
full and final settlement and compromise of each, every and all
Claims of every kind and nature, whether known or unknown, which
have been or could be asserted against the Company and/or any of its
subsidiaries, shareholders, officers, directors, agents, and
employees, past or present, and their respective heirs, successors
and assigns (collectively, the "Releasees"), including, without
limitation - -
(i) any Claims arising out of any employment
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agreement or other contract, side-letter, resolution, promise or
understanding of any kind, whether written or oral or express or
implied;
(ii) any Claims arising under the Age Discrimination in
Employment Act ("ADEA"), as amended, 29 U.S.C. ss.ss.621 et seq.;
and
(iii) any Claims arising under any federal, state, or local
civil rights, human rights, anti-discrimination, labor, employment,
contract or tort law, rule, regulation, order or decision,
including, without limitation, the Americans with Disabilities Act
of 1990, 42 U.S.C. ss.ss.12101 et seq., and Title VII of the Civil
Rights Act of 1964, 42 U.S.C.ss.ss.2000e et seq., and as each of
these laws have been or will be amended, except to the extent that
any governmental authority or other third party, i.e., other than
one of the Releasees, files a charge or institutes an investigation,
lawsuit or any preceeding against the Executive based on any event,
occurrence or omission during the period of the Executive's
employment with the Company, in which case the Executive will be
permitted to implead or bring a court action against the Company
and/or any or the Releases for indemnification of any liability or
other appropriate remedy, provided such impleader or court action
would be available but for this Agreement.
Notwithstanding anything to the contrary in this Section 5(a), the
Executive does not release (i) any claim he many have under any
employee benefit plan in which he was a participant during his
employment with the Company for the payment of a benefit thereunder
to which he would be entitled in respect to his employment through
December 2, 1998 in accordance with the terms of such plan or (ii)
any claim that he may have under this Agreement or the 1995
Agreement as modified by this Agreement.
The Executive understands that this Agreement affects significant
rights and represents and agrees that he has carefully read and
fully understands all of the provisions of this Agreement, that he
is voluntarily entering into this Agreement, and that he has been
advised to consult with and had in fact consulted with legal counsel
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before entering into this Agreement.
b. For good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the Company, the Company knowingly,
voluntarily and unconditionally hereby forever waives, releases and
discharges, and covenants never to xxx on, any and all claims,
liabilities, causes of actions, judgments, orders, assessments, penalties,
fines, expenses and costs (including without limitation attorneys' fees)
and/or suits of any kind arising out of any actions, events or
circumstances before the date of execution of this Agreement ("Claims")
which the Company has, ever had or may have; provided, however, that this
Section 5(b) shall not apply to any of the obligations of the Executive
specifically provided for in this Agreement or the 1995 Agreement (as
modified by this Agreement). This Agreement is intended as a full and
final settlement and compromise of each, every and all Claims of every
kind and nature, whether known or unknown, which have been or could be
asserted against the Executive, except to the extent that any governmental
authority or other third party, i.e., other than the Executive, files a
charge or institutes an investigation, lawsuit or any proceeding against
the Company based on any event, occurrence or omission during the period
of the Executive's employment with the Company, in which case the Company
will be permitted to implead or bring a court action against the Executive
for indemnification of any liability or other appropriate remedy, provided
such impleader or court action would be available but for this Agreement.
Notwithstanding anything to the contrary in this Section 5(b), the Company does
not release any
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claim that the Company may have under this Agreement or the 1995 Agreement as
modified by this Agreement.
6. Applicable Law. This Agreement shall be governed and construed in
accordance with the laws of the State of Connecticut, without reference to
principles of conflict of laws.
IN WITNESS WHEREOF, the parties have hereunto set their hands as of
the date first above written.
LYDALL, INC.
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Xxxxxxx X. Xxxxxx
By
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Xxxxx X. Xxxxxxx, Chairman,
Compensation and Stock Option
Committee
