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EXHIBIT 10.23
EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made as of the 13th day of August, 1998, by and
between Aqua-Chem, Inc., a Delaware corporation (the "Company"), and Xxxxxx X.
Xxxxx (the "Executive").
WITNESSETH:
WHEREAS, the Executive desires to be employed by the Company as
Division President, National Dynamics; and
WHEREAS, the Company desires to employ Executive in the capacity of Division
President, National Dynamics.
NOW, THEREFORE, in consideration of the mutual covenants contained
herein, the parties hereto agree as follows:
1. DEFINITIONS.
Whenever used in this Agreement, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial letter
of the word is capitalized:
(a) "Agreement" means this Employment Agreement.
(b) "Base Salary" means the salary of record paid to the Executive
as annual salary as set forth on Schedule A, excluding amounts
received under incentive or other bonus plans, whether or not
deferred.
(c) "Beneficiary" means the persons or entities designated or
deemed designated by the Executive pursuant to Section 11
herein.
(d) "Board" means the Board of Directors of the Company.
(e) "Cause" means any of the following as determined by the
Committee in the exercise of good faith and reasonable
judgment (i) the willful and continued refusal by the
Executive to perform his duties hereunder, other than by
reasons of health, after a written demand for such performance
is delivered to the Executive by the Company that identifies
the manner in which the Executive has refused to perform his
duties, (ii) the commission of an act by the Executive
constituting a felony under state or federal law, (iii) the
habitual abuse by the Executive of any substance (such as
narcotics or alcohol) which materially affects his ability to
perform his duties, or (iv) the Executive's engaging in an act
of fraud, dishonesty or gross misconduct in connection with
the business of the Company, or (v) conduct by the Executive
constituting a material breach of this Agreement.
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EXHIBIT 10.23
(f) As used herein a "Change In Control" shall be deemed to occur
if any of the following events occur:
(i) SALE. Those persons who are the holders of the shares
of Common Stock of the Company on August 5, 1998
and/or their affiliates, as a group, (the "Present
Common Stock Owners") at any time and for any reason
(a) cease to have the right to elect a majority of
the directors of the Company or to direct or cause
the direction of the management and policies of the
Company or (b) cease to own beneficially and of
record more than fifty percent (50%) of the
outstanding shares of Common Stock of the company on
a fully diluted basis; or
(ii) MERGER OR CONSOLIDATION. The Company merges or
consolidates with any other corporation or entity,
which results in the Present Common Stock owners (a)
ceasing to have the right to elect a majority of the
directors of the Company (or its successor) or to
direct or cause the direction of the management and
policies of the Company (or its successor) or (b)
ceasing to own beneficially and of record more than
fifty percent (50%) of the Common Stock of the
company (or its successor) on a fully diluted basis;
or
(iii) LIQUIDATION OR DISSOLUTION. The Company sells,
assigns or otherwise disposes all or substantially
all of the Company's assets in one or more
transactions or series of related transactions within
any period of 24 consecutive months other than to an
entity that the Present Common Stock Owners (a) have
the right to elect a majority of the directors or
direct or cause the direction of the management and
policies of and (b) own beneficially and of record
more than fifty percent (50%) of the outstanding
Common Stock (or comparable equity interest) of on a
fully diluted basis.
(g) "Committee" means the Compensation Committee of the Board.
(h) "Company" means Aqua-Chem, Inc., a Delaware corporation.
(i) "Effective Date" means the date this Agreement is executed on
behalf of the Company.
(j) "Effective Date of Termination" means the date on which a
termination of the Executive's employment occurs for any
reason whatsoever.
(k) "Executive" means Xxxxxx X. Xxxxx.
(l) "Good Reason" means, without the Executive's consent, the
occurrence of any one or more of the following:
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EXHIBIT 10.23
(i) the reassignment of the Executive to duties
materially inconsistent with the Executive's present
authorities, duties, responsibilities, and status
(including offices, titles and reporting
requirements) as an officer of the Company, or a
material reduction or material alteration in the
nature or status of the Executive's authorities,
duties or responsibilities, other than an act that is
remedied by the Company promptly after receipt of
written notice thereof given by the Executive, and
other than a promotion of the Executive to a position
accepted by the Executive which includes duties,
responsibilities, and status associated with the
position; or
(ii) a reduction by the Company of the Executive's Base
Salary or bonus opportunity as in effect on the
Effective Date (other than a reduction as part of an
overall reduction in compensation affecting all
senior management of the Company) or the exclusion of
the Executive by the Company from such incentive
compensation programs as the Company may, from time
to time, make available to the senior management of
the Company.
(m) "Permanent Disability" shall have the meaning set forth in the
Company's long-term disability program as in effect from time
to time.
(n) "Third Party" means any person(s) and/or business
organization(s) of any type other than the present
shareholders of the Company and their affiliates.
2. EMPLOYMENT TERM.
The employment term shall commence as of the Effective Date and shall
continue thereafter until the earlier of (i) 45 days after Executive's receipt
of written notice from the Company terminating employment pursuant to Section
6(b) of this Agreement; (ii) immediately upon Executive's receipt of written
notice terminating employment pursuant to Section 6(a) of this Agreement; (iii)
such date as the Company shall elect up to a maximum of 45 days after its
receipt of written notice from the Executive terminating employment pursuant to
Section 6(b) or 6(c) of this Agreement; or (iv) the Executive's death or
Permanent Disability.
3. DUTIES.
During the employment term, the Executive shall serve as Division
President, National Dynamics with such duties and responsibilities as may
reasonably be assigned or delegated to him from time to time according to
customary Company procedures. During his employment term, the Executive shall
devote his full time to the faithful and diligent performance of his duties for
the Company. Notwithstanding anything herein to the contrary, nothing shall
preclude the Executive from engaging in charitable and community affairs and
managing his personal investments so long as such activities do not interfere
with his carrying out his duties and responsibilities under this Agreement.
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EXHIBIT 10.23
4. COMPENSATION.
(a) BASE SALARY. During the employment term, the Executive shall
be paid by the Company a Base Salary payable (after deduction
of applicable taxes) in accordance with the payroll practices
of the Company. Initially, the Base Salary shall be as set
forth on Schedule A attached hereto. It is agreed between the
parties that the Company shall review the Base Salary annually
and in light of such review may, in the sole discretion of the
Committee, adjust such Base Salary taking into account any
change in the Executive's then responsibilities, increases in
the cost of living, performance of the Executive, and other
pertinent factors.
(b) INCENTIVE COMPENSATION. The Executive shall, during the
employment term, be eligible to participate in such incentive
compensation programs as the Company may, from time to time,
make available to its senior executives.
5. OTHER EMPLOYEE BENEFITS.
(a) BENEFIT PLANS. During the employment term, the Executive shall
be entitled to participate in all employee benefit programs as
the Company, from time to time, makes available to the
Company's senior executives, including, without limitation,
medical, disability and life insurance, and retirement plans.
401K Employer match contributions are immediately 100% vested.
The Executive shall be provided with the use of a leased car
at the Company's expense and shall be entitled to such other
prerequisites set forth on Schedule A.
(b) VACATION. The Executive shall be entitled to reasonable paid
annual vacation periods in accordance with the Company's
policies as in effect from time to time, but in no event shall
such vacation period be less than that set forth on Schedule A
attached hereto.
(c) REGULAR REIMBURSED BUSINESS EXPENSES. The Company shall
reimburse the Executive for all travel and other expenses
reasonably incurred by the Executive in the performance of his
duties during the employment term, in accordance with the
Company's policies in effect from time to time.
6. TERMINATION OF EMPLOYMENT.
(a) TERMINATION BY THE COMPANY FOR CAUSE. In the event
the Executive's employment is terminated by the
Company for Cause, the Executive shall be entitled to
his then current Base Salary through the Effective
Date of Termination.
(b) TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY THE
EXECUTIVE WITH GOOD REASON. In the event the
Executive's employment is
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EXHIBIT 10.23
terminated by the Company without Cause or by the Executive
with Good Reason, then upon complying with the provisions of
Section 6(f) of this Agreement, but only upon such compliance,
the Executive shall be entitled to the following:
(i) SEVERANCE PAY. For a period of twelve (12) months
following the Effective Date of Termination, the
Executive shall continue to be paid his then current
Base Salary in accordance with the Company's normal
payroll practices and subject to withholding as
required by law; provided, however, that if at the
end of such twelve (12) month period the Executive,
despite continuing good faith and reasonable effects,
has been unable to obtain employment (including
self-employment), the Executive's Base Salary will be
continued until he obtains employment (including
self-employment) for up to an additional six (6)
months.
(ii) INCENTIVE COMPENSATION. In addition to the amount
specified in Section 6(b)(i), the Executive shall
also be paid an amount (subject to withholding as
required by law) equal to the target annual bonus
payable under the Company's annual bonus program for
management if the Effective Date of Termination is
within two years of the effective date of the
Agreement, or equal to the average annual bonus paid
to the Executive for the two years ended prior to the
Effective Date of Termination, if such date is more
than two years after the effective date of the
Agreement. This will be payable at the Company's
option in equal installments (in accordance with the
Company's normal payroll periods) over the eighteen
month period following the Effective Date of
Termination or in a lump sum promptly following the
Effective Date of Termination. With regard to the
Phantom Stock Plan, participants are eligible to
receive payment under the Plan unless termination was
for "Cause" (Cause includes such acts as violation of
confidentiality or noncompete agreements; acts of
fraud, dishonesty, or gross misconduct, and such
other acts which are deemed by the Board to
constitute a material breach of employment terms). In
the event of termination of employment (other than
for "Cause"), such Participant shall be entitled to
payout of the prorated Maturity Value of each Award
granted to such Participant, determined by
multiplying the Maturity Value of the Award by a
fraction, the numerator of which is the number of
months in the fiscal year ending on the Maturity Date
of such Award in which the Participant was employed
by Aqua-Chem (including the month of separation) and
the denominator is twelve.
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EXHIBIT 10.23
(iii) HEALTH AND DENTAL INSURANCE. If the Executive
exercises his COBRA rights with respect to medical
and dental insurance, the Executive shall be entitled
to receive such coverage for the 12 month period
following the Effective Date of Termination (or up to
18 months if the Executive has been unable to obtain
employment or become self-employed) at a cost equal
to the amount paid by then current employees of the
Company for such coverage;
(iv) OUTPLACEMENT SERVICES. The Executive shall be
furnished with outplacement services for a period of
up to 12 months paid for by the Company with such
firm as the Company then utilizes for such purposes;
and
(v) COMPANY AUTOMOBILE. The Executive shall be permitted
to use his leased Company automobile for 45 days
following the Effective Date of Termination and
during such period, shall have the right to purchase
such car from the leasing company at the price
specified in the lease.
In the event the Executive does not comply with the provisions
of Section 6(f) of this Agreement, the Executive shall be
entitled to his then current Base Salary through the Effective
Date of Termination.
(c) VOLUNTARY TERMINATION BY THE EXECUTIVE. In the event of a
termination of the Executive's employment by the Executive on
his own initiative other than for Good Reason, the Executive
shall be entitled to his then current Base Salary through the
Effective Date of Termination.
(d) DEATH OR PERMANENT DISABILITY OF THE EXECUTIVE. The employment
term shall terminate without notice and automatically upon the
death or Permanent Disability of Executive. Upon the
termination of the Executive's employment by reason of death
or Permanent Disability, the Executive or, in the event of his
death, the Executive's Beneficiary shall be entitled to
receive the Executive's then current Base Salary through the
Effective Date of Termination and incentive compensation
determined in accordance with Section 6(b)(ii) of this
Agreement.
(e) BENEFITS. Except as and to the extent specifically provided to
the contrary in this Section 6 or in Schedule A attached
hereto, the Executive's compensation and eligibility to
participate in programs or receive benefits provided by the
Company (other than those which have vested by virtue of
Executive's prior employment) shall terminate on the Effective
Date of Termination.
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EXHIBIT 10.23
(f) RELEASE. As condition precedents to receiving the severance
benefits described in Section 6(b) of this Agreement: (i) the
Executive shall, within 30 days after the Effective Date of
Termination, execute a Release in the form attached hereto as
Exhibit A; and (ii) the Executive shall not have revoked the
Release within the seven day revocation period provided by the
Older Workers Benefit Protection Act.
7. RESTRICTIONS.
(a) The Executive acknowledges and agrees that the Company's
business is by its nature international, the Company's
business and customer contacts have been established and
maintained at great expense, the Executive, by virtue of his
position with the Company, has and will continue to be privy
to the Company's most confidential business plans and
strategies which, without the restrictions hereinafter set
forth, would enable the Executive to compete unfairly with the
Company and, accordingly, such restrictions are reasonable and
necessary to protect the legitimate interests of the Company.
As a result, and in order to induce the Company to enter into
this Agreement and to provide the benefits described in this
Agreement, the Executive agrees to the restrictions set forth
in Section 7 and simultaneous with the execution of this
Agreement is entering into the Employee Confidentiality and
Proprietary Information Agreement attached hereto as Exhibit
B.
(b) The Executive hereby covenants and agrees that at no time
during the employment term and for a period of twelve (12)
months following the Effective Date of Termination will the
Executive directly or indirectly in any capacity whatsoever
(whether as an employee, officer, director, consultant,
partner, member, joint venturer, agent, representative or
otherwise) provide service, advice or assistance of any nature
to or acquire an ownership interest in (or acquire the right
to acquire an ownership interest in) a Competing Business (as
hereinafter defined). A "Competing Business" shall mean and be
limited to any business, regardless of the form of
organization, which (i) is engaged in the design, manufacture
and/or sale of products which are similar in design or
function to and otherwise compete with the products which were
under design or manufactured by the National Dynamics Division
of the Company or included in the Company's National Dynamics
Division product lines during the twelve month period
preceding the Effective Date of Termination. Notwithstanding
the preceding, the Executive shall not be prohibited from (i)
acquiring less than five percent (5%) of the stock of any
publicly traded company which may be engaged in a Competing
Business, or (ii) being employed by or otherwise providing
services to a company which, among its various businesses, is
engaged in a Competing
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EXHIBIT 10.23
Business provided that the Executive is not directly
or indirectly involved in any capacity whatsoever in
such Competing Business.
(c) The Executive hereby covenants and agrees that, at
all times during the employment term and for a period
of twelve (12) months following the Effective Date of
Termination, the Executive shall not directly or
indirectly, on behalf of himself or any other person,
entity, or business, employ or engage the services of
or seek to employ or engage the services of any
person employed by the National Dynamics Division of
the Company or any agent who represents the National
Dynamics Division of the Company during the period of
six months prior to the Effective Date of
Termination, or otherwise encourage or entice any
such person to terminate or diminish their
relationship with the National Dynamics Division of
the Company.
(d) The Executive hereby acknowledges and agrees (i) the
Executive's education and experience are such that
the foregoing restrictions will not unduly interfere
with his ability to earn a livelihood, (ii) the
Company would suffer irreparable harm in the event of
a violation of such restrictions, (iii) accordingly,
in addition to any other remedies available to it,
the Company shall be entitled to injunctive relief
without the posting of bond or other collateral and
the Executive shall not oppose the granting of such
relief, and, (iv) the Company is agreeing to employ
the Executive in reliance on the foregoing
restrictions and agreements. The Company shall be
entitled to all costs, including reasonable
attorneys' fees, in enforcing such restrictions or
pursuing damages for breach.
8. CHANGE IN CONTROL.
In the event of a Change In Control, the Executive shall be eligible,
as hereinafter set forth, to receive from the Company (or its successor pursuant
to such Change In Control) a "Change In Control Bonus" in an amount equal to (i)
$225,000, minus (ii) all amounts to be paid to the Executive in purchase or
cancellation of the stock or options described in the attached Equity
Compensation Package. An amount equal to one-half of the Change In Control Bonus
shall be paid to the Executive on the date of the Change In Control if, but only
if, the Executive is either (i) then employed by the Company, or its successor
or (ii) his employment was terminated within the 90 days preceding the date of
the Change In Control at the election of the Company for reasons other than
"Cause" or by the Executive for "Good Reason." The remaining one-half of the
Change In Control Bonus shall be paid to the Executive 180 days after the date
of the Change In Control if, but only if, the Executive is either (i) then
employed by the Company or its successor or (ii) his employment was terminated
within the 180 day period following the date of the Change In Control at the
election of the Company (or its successor pursuant to such Change In Control)
for reasons other than "Cause" or by the Executive for "Good Reason."
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EXHIBIT 10.23
9. ASSIGNABILITY; BINDING NATURE.
This Agreement shall inure to the benefit of the Company and the
Executive and their respective successors, heirs (in the case of the Executive)
and permitted assigns. Except as specifically provided to the contrary in this
Agreement, no rights or obligations of the Company or Executive under the
Agreement may be assigned or transferred. Notwithstanding the preceding, the
rights and obligations of the Company may be assigned or transferred pursuant to
a Change In Control provided that such assignee or transferee assumes the
liabilities, obligations and duties of the Company, as contained in this
Agreement, either contractually or as a matter of law.
10. BENEFICIARIES.
The Executive may designate one or more persons or entities as the
primary and/or contingent Beneficiaries of any payments owing to the Executive
under this Agreement. Such designation must be in the form of a signed writing
reasonably acceptable to the Company. The Executive may make or change such
designation by a similar written instrument signed by the Executive and
delivered to the Company at any time.
11. ENTIRE AGREEMENT.
This Agreement together with all Schedules and Exhibits attached hereto
contains the entire agreement between the Company and the Executive and
supersedes all prior agreements, understandings, discussions, negotiations and
undertakings, whether written or oral, between them with respect thereto.
12. AMENDMENT OR WAIVER.
This Agreement cannot be changed, modified or amended without the prior
written consent of both the Executive and the Company. No waiver by either the
Company or the Executive at any time of any breach by the other party of any
condition or provision of this Agreement shall be deemed a waiver of a similar
or dissimilar condition or provision at the same or at any prior or subsequent
time. Any waiver must be in writing and signed by the Executive and an
authorized officer of the Company, as the case may be.
13. SEVERABILITY.
In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, in whole or in part,
the remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
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EXHIBIT 10.23
14. SURVIVORSHIP.
The respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
15. GOVERNING LAW.
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of Wisconsin without reference to
principles of conflicts of laws.
16. NOTICES.
Any notice given to either party shall be in writing and shall be
deemed to have been given when delivered personally or sent by certified or
registered mail, postage prepaid, return receipt requested, duly addressed to
the party concerned, if to the Company, at its principal office, and, if to the
Executive, at the address of the Executive shown on the Company's records, or at
such other address as such party may give notice of.
17. HEADINGS; CONSTRUCTION.
The headings of the paragraphs contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this agreement as of
the date first written above.
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, Individually
AQUA-CHEM, INC.
By: /s/ XX Xxxxxx
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Xxxxxxx X. Xxxxxx,
Chairman and Chief Executive Officer
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EXHIBIT 10.23
SCHEDULE A
Effective For Calendar Year 1998
EXECUTIVE: Xxxxxx X. Xxxxx
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TITLE: Division President
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GRADE: 32
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DIVISION: National Dynamics
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BASE SALARY: $225,000
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EFFECTIVE DATE: ------------------------------------------
INCENTIVE COMPENSATION:
Management Incentive Plan Target: 35% of Base Salary
Phantom Stock Plan Target: 30% of Base Salary
Equity Compensation As per attached
OTHER EMPLOYEE BENEFITS:
General:
- Participation in all employee benefit
programs as the Company, from time-to-time, makes available to
the Company's senior executives.
Life Insurance:
- Universal Life Policy: $1,000,000 - Owned by the Executive,
paid by the Company (subject to insurability and based on
standard rates)
- $200,000 Accidental Death and Dismemberment (subject to
insurability and based on standard rates)
Vacation:
- Four (4) weeks / annually
Company Automobile:
- Lease vehicle
- Selection based on CEO approval
Other:
- Company subsidized membership at a country club of choice.
- $5,000 annual maximum
- Includes cost of annual membership fees (qtrly
minimums excluded)
- Financial planning / tax preparation: $3,000 annual max
- Home PC / Fax will be provided by the Company
- Professional Associations
/s/ XX Xxxxxx
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Date: 8/13/98
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EXHIBIT 10.23
EXHIBIT A
GENERAL RELEASE
________________________, (the "Employee"), for good and valuable consideration,
the receipt of which is hereby acknowledged, does hereby release and forever
discharge Aqua-Chem, Inc. ("Aqua-Chem") and all of its past, present and future
officers, directors, agents, employees, attorneys, shareholders, employee
benefit plans, divisions, parent corporations, subsidiary corporations,
affiliated corporations, successors and assigns (collectively the "Released
Parties") from any and all actions, causes of action, claims, suits, debts,
covenants, contracts, demands or liabilities of any kind or character
whatsoever, whether known or unknown, which the Employee has had or now has
against the Released Parties (or any of them) related to anything occurring
prior to or on the present date; provided, that Employee shall not be deemed to
have released any rights, benefits, or claims Employee may have under the
Aqua-Chem 1998 Stock Option Plan or Employee's Non-Statutory Stock Option
Agreement, dated first day of employment.
Without limiting the generality of the foregoing, this release applies to any
claims, causes of action, demands or liabilities the Employee may have had or
now has:
1. Under or pursuant to the Age Discrimination in Employment Act, as
amended.
2. Under or pursuant to Title VII of the Civil Rights Act of 1964, as
amended; the Civil Rights Act of 1991; the Wisconsin Fair Employment Act; the
Employee Retirement Income Security Act, as amended, or any other federal, state
or local statute or regulation relating to employment.
3. For libel, slander, defamation, damage to reputation, intentional or
negligent infliction of emotional distress, tortuous interference with the
employment or business relationship or other tortuous conduct or for wrongful
discharge or breach of contract whether express or implied.
4. Regarding any right which the Employee might have to current or future
employment with Aqua-Chem, its divisions or affiliated companies, and the
Employee affirms that he will not seek employment in the future with Aqua-Chem,
its divisions or affiliated companies.
The Employee acknowledges that he has been advised in writing (1) to consult
with an attorney prior to executing this General Release, and (2) that he had at
least twenty-one (21) days to consider this General Release prior to executing
it.
For a period of seven (7) days following the execution of this General Release,
the Employee shall have the right to revoke this General Release, and this
General Release shall not become effective or enforceable until seven (7) days
following such execution.
IN WITNESS WHEREOF, the undersigned has executed this General Release this______
day of____________________ , 19__.
____________________________________
