CONFIDENTIALITY, NON-COMPETE, SEVERANCE, AND CHANGE IN CONTROL AGREEMENT
Exhibit
10.1
CONFIDENTIALITY,
NON-COMPETE, SEVERANCE,
AND
CHANGE IN CONTROL AGREEMENT
This
Confidentiality, Non-Compete, Severance, and Change in Control Agreement (the
“Agreement”) is entered into as of this ____ day of _________, 20___ by and
between ____________________ (“Executive”), and Dresser-Rand Group Inc., a
Delaware corporation (the “Company”).
WHEREAS,
Executive is currently employed with the Company and, by virtue of that
employment will receive access to competitively sensitive, confidential,
proprietary and trade secret information relating to the current and planned
business of the Company; and
WHEREAS,
the Company and Executive wish to make certain arrangements to protect the value
of such information to the Company during Executive’s employment and following
such time as Executive’s employment with the Company may end; and
WHEREAS,
in exchange for such protections and in recognition of Executive’s anticipated
contributions to the Company, the Company and Executive wish further to make
arrangements for the potential payment of severance following the conclusion of
Executive’s employment with the Company under certain circumstances, including
following a change in control of the Company.
NOW,
THEREFORE, in consideration of the mutual representations, warranties, covenants
and agreements set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound hereby, agree as follows:
I.
DEFINITIONS.
(a) Affiliate. For
purposes of this Agreement, “Affiliate” shall mean any corporation, limited
liability company or similar entity which is under the control of the Company or
under common control with the Company.
(b) Base
Salary. For purposes of this Agreement, “Base Salary” shall
mean the annualized rate of salary authorized and being paid to Executive as of
the date in question, excluding any bonus, incentive plan payments, benefits,
equity compensation, and other forms of compensation that are not paid to
Executive on a regular, recurring basis under the Company’s standard payroll
practices.
(c) Cause. For
purposes of this Agreement, “Cause” shall mean the occurrence of any of the
following:
(i)
the material failure or refusal by Executive to
perform his duties hereunder (including, without limitation, Executive's
inability to perform such duties as a result of alcohol or drug abuse, chronic
alcoholism or drug addiction) or to devote substantially all of his business
time, attention and energies to the performance of his duties
hereunder;
(ii) any
willful, intentional or grossly negligent act by Executive having the effect of
materially injuring the interest, business or prospects of the Company, or any
of its subsidiaries, Affiliates, or divisions;
(iii) the
material violation or material failure by Executive to comply with the Company's
material published rules, regulations or policies, as in effect from time to
time;
(iv) Executive's
conviction of a felony offense or conviction of a misdemeanor offense involving
moral turpitude, fraud, theft or dishonesty;
(v) any
willful or intentional, misappropriation or embezzlement of the property of the
Company or any of its subsidiaries or Affiliates (whether or not a misdemeanor
or felony); or
(vi) a
material breach of any one or more of the covenants of this Agreement by
Executive;
provided, however, that in the
event that the Company determines to terminate Executive's employment pursuant
to clauses (i), (iii) or (vi) of this definition of Cause, such
termination shall only become effective if the Company shall first give
Executive written notice of such Cause, which notice shall identify in
reasonable detail the manner in which the Company believes Cause to exist and
indicates the steps required to cure such Cause, if curable, and Executive shall
fail within thirty (30) days of such notice to substantially remedy or
correct the same.
(d) Disability. For
purposes of this Agreement, “Disability” shall mean, for a period of not less
than 90 days within a given twelve month period, Executive’s physical or
mental incapacity to perform his essential
functions, with or without reasonable accommodations therefore, which
condition a mutually agreeable physician determines is likely to be continuous
and permanent.
(e) Voluntary Termination
without Good Reason. For purposes of this Agreement,
“Voluntary Termination without Good Reason” shall mean any termination by
Executive of Executive's employment with the Company other than a Voluntary
Termination with Good Reason.
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(f) Voluntary Termination with
Good Reason. For purposes of the Agreement, “Voluntary
Termination with Good Reason” shall mean the termination by Executive of
Executive's employment with the Company within forty-five (45) days
following the occurrence of any of the following events without his consent,
which is not cured by the Company, if curable, within 30 days as described
below:
(i)
a material diminution in Executive's duties
and responsibilities;
(ii)
the Company materially reduces the compensation or
benefits to which Executive is entitled as determined immediately prior to the
Change in Control;
(iii) a material breach of any one or more of the covenants of
this Agreement by the Company; or
(iv) if, as the result of a Change in Control (as defined
below), the Company’s headquarters offices are relocated to a location more than
fifty miles away from their location prior to such Change in Control,
necessitating Executive’s relocation to such new headquarters
location.
Provided, however, that
Executive must provide the Company with written notice within fifteen (15)
days following the first date on which Executive knows of the occurrence of an
event or action constituting Good Reason and the Company shall have
thirty (30) days following receipt of such notice to cure such event or
action.
(g) Change in
Control. For purposes of this Agreement, a “Change in Control”
shall mean the first to occur of any of the following events:
(i) during
any 12-month period, the members of the Board (the “Incumbent Directors”) cease
for any reason other than due to death or disability to constitute at least a
majority of the members of the Board, provided that any director whose election,
or nomination for election by the Company’s stockholders, was approved by a vote
of at least a majority of the members of the Board who are at the time Incumbent
Directors shall be considered an Incumbent Director, other than any such
individual whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of directors
or other actual or threatened solicitation of proxies or consents by or on
behalf of a person other than the Board;
(ii) the
acquisition or ownership by any individual, entity or "group" (within the
meaning of Section 13(d)(3) of the Securities Exchange Act of 1934,
as amended (the “Exchange Act”)), other than the Company or any of its
Affiliates or Subsidiaries, or any employee benefit plan (or related trust)
sponsored or maintained by the Company or any of its Affiliates or Subsidiaries,
of beneficial ownership (within the meaning of Rule 13d-3 promulgated under the
Exchange Act) of 50% or more of the combined voting power of the Company's then
outstanding voting securities entitled to vote generally in the election of
directors;
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(iii) the
merger, consolidation or other similar transaction of the Company, as a result
of which the stockholders of the Company immediately prior to such merger,
consolidation or other transaction, do not, immediately thereafter, beneficially
own, directly or indirectly, more than 50% of the combined voting power of the
voting securities entitled to vote generally in the election of directors of the
merged, consolidated or other surviving company; or
(iv) the
sale, transfer or other disposition of all or substantially all of the assets of
the Company to one or more persons or entities that are not, immediately prior
to such sale, transfer or other disposition, Affiliates of the
Company.
A “Change
in Control” shall not be deemed to occur if the Company undergoes a bankruptcy,
liquidation or reorganization under the United States Bankruptcy
Code.
(h) Date of
Termination. For purposes of this Agreement, “Date of
Termination” shall mean the date on which Executive’s termination of employment
with the Company and any Affiliate occurs.
(i) Effective
Date. The Effective Date of this Agreement shall be the date
first indicated above.
(j) Non-Competition
Period. For purposes of this Agreement, the “Non-Competition
Period” will be the period described in Schedule A.
(k) Person. For
purposes of this Agreement, “Person” shall mean an individual, corporation,
partnership, limited liability company, limited liability partnership,
syndicate, person, trust, association, organization, or other entity, including
any Governmental Entity, and including any successor, by merger or otherwise, of
any of the foregoing.
2. EMPLOYMENT. Executive
acknowledges and agrees that his employment with the Company is at-will in
nature, and nothing herein shall be construed as a guarantee of continued
employment for a specific period or under particular terms or otherwise as
having altered the Executive’s at-will status.
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3. CONFIDENTIALITY,
NONCOMPETITION, ETC.
(a) Confidentiality.
(i) Executive
acknowledges that the business of the Company is intensely competitive and that
Executive's employment by the Company has required and will require that
Executive have access to and knowledge of confidential information of the
Company, which the Company has provided to Executive in the past and hereby
agrees to continue to provide to Executive during his future employment as
necessary to perform his assigned duties. Such Company confidential
information includes, but is not limited to, formulae, manufacturing processes,
distribution systems, research and development methods and techniques, the
identity of the Company's customers, the identity of the representatives of
customers with whom the Company has dealt, the kinds of services provided by the
Company to customers and offered to be performed for potential customers, the
manner in which such services are performed or offered to be performed, the
service needs of actual or prospective customers, pricing information,
information concerning the creation, acquisition or disposition of products and
services, customer maintenance listings, computer software applications and
other programs, personnel information and other trade secrets (the “Confidential
Information”). Confidential Information shall not include information
which (w) was publicly available prior to the date hereof, (x) was known by
Executive from a source other than through Executive's employment with, or
service as a director of, the Company, (y) is acquired by Executive from a third
party who was not subject to any restrictions as to its disclosure, or (z)
becomes publicly available subsequent to the date hereof, other than as a result
of an action by Executive. Executive expressly acknowledges the trade
secret status of the Confidential Information and that the Confidential
Information constitutes a protectible business interest of the
Company. Executive further acknowledges that the direct or indirect
disclosure of any such Confidential Information would place the Company at a
competitive disadvantage and would do damage, monetary or otherwise, to the
Company's business and that the engaging by Executive in any of the activities
prohibited by this Section 3 may constitute improper appropriation and/or use of
such information and trade secrets.
(ii) The
Company and Executive agree that, for purposes of this Section 3, except as
otherwise provided, the business of the Company shall mean the businesses
conducted by the Company and its Affiliates during the period of Executive's
employment by the Company. Executive acknowledges that the Company
engages in its business throughout the world.
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(iii) During
Executive's employment by the Company and at all times following the termination
of Executive's employment for any reason, Executive shall not, directly or
indirectly, whether individually, as a director, stockholder, owner, partner,
employee, principal or agent of any business, or in any other capacity, make
known, disclose, furnish, make available or utilize any of the Confidential
Information, other than in the proper performance of the duties contemplated
herein, or as required or requested by a court of competent jurisdiction or
other administrative or legislative body; provided, however, that, in
such event, Executive shall promptly notify the Company so that the Company may
seek a protective order or other appropriate remedy. If reasonably
practicable, Executive shall notify the Company prior to disclosing any of the
Confidential Information to a court or other administrative or legislative
body. Executive agrees to return all Confidential Information,
including all photocopies, extracts and summaries thereof, and any such
information stored electronically on tapes, computer disks or in any other
manner to the Company at any time upon request by the Company and upon the
termination of his employment for any reason.
(b) Non-Competition. During
the Non-Competition Period, Executive shall not in any city, town, county,
parish or other municipality in any state of the United States or in any other
market in the world that the Company or any of its subsidiaries, Affiliates,
successors or assigns engages in its business, directly or indirectly engage in
Competition (as defined below); provided, however, that it
shall not be a violation of this sub-paragraph for Executive to become the
registered or beneficial owner of up to five percent (5%) of any class of
the capital stock of a competing corporation registered under the Securities
Exchange Act of 1934, as amended, provided that Executive does not
actively participate in the business of such corporation until such time as this
covenant expires.
(c) Definition of
Competition. For purposes of this Agreement, “Competition”
means, for Executive's benefit or for the benefit of any other Person, firm or
entity, any of the following:
(i)
engaging in, or otherwise being employed by or acting as a
consultant or lender to, or being a director, officer, employee, principal,
licensor, trustee, broker, agent, stockholder, member, owner, joint venturer or
partner of, any other business or organization anywhere in the world which
directly competes with the business of the Company as the same shall be
constituted at any time during, or as to which the Company had specific
plans known to Executive to engage in
during or following, Executive’s employment;
(ii) soliciting
from any customer doing business with the Company as of Executive's Date of
Termination business directly competitive with the business of the Company with
such customer or such party;
(iii) soliciting
from any potential customer of the Company known
to Executive business directly competitive with the business of the
Company which has been the subject of a written or oral bid, offer or proposal
by the Company known to Executive, or of substantial preparation
known to Executive with a view to making
such a bid, proposal or offer, within six (6) months prior to Executive's
Date of Termination; or
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(d) Solicitation of Company
Employees. During Executive’s employment with the Company and
continuing through the date that is three (3) years after Executive’s Date of
Termination for any reason, Executive will not solicit the employment or
services of, or hire, any individual who is employed by or known by Executive to be
a consultant to the Company. In the event Executive’s
employment with the Company has ended, the foregoing restriction on solicitation
and hiring shall apply to any individual who was employed by or known by
Executive to be a consultant to the Company upon the Date of Termination or
within six (6) months prior thereto, unless
such Person is not an employee of, or a consultant to, the Company at the time
of such solicitation by Executive and has not been an employee of, or consultant
to the Company for six (6) months prior thereto.
(e) Acknowledgements Regarding
Covenants. Executive acknowledges that (i) the market for
the Company's business extends throughout the United States and the rest of the
world, and that Executive, individually and through his status as an officer of
the Company, is among a limited number of people engaged in the Company's
business on a nationwide and global basis; (ii) the scope and duration of the
restrictive covenants contained herein are reasonable and necessary to protect
the value of the Company’s Confidential Information given the nature of such
Confidential Information and of the Company’s business; and (iii) the
restrictive covenants and the other agreements contained herein are an essential
part of this Agreement. Executive further represents and warrants and
acknowledges and agrees that Executive has been, or has had the opportunity to
be, fully advised by counsel in connection with the negotiation, preparation,
execution and delivery of this Agreement.
(f) Non-Disparagement. Executive
agrees that both during and after termination of this Agreement he shall not
make any statement, written or verbal, in any forum or media, or take any
action, that is intended to injure or damage the goodwill, reputation or
business prospects of the Company; provided, however, that the foregoing shall
not apply to or restrict in any way the communication of information by
Executive to any state or federal law enforcement or administrative agency or in
a court, arbitration or administrative proceeding, and Executive will not be in
breach of the covenant contained above solely by reason of such communication or
testimony.
(g) Remedies. In
the event Executive breaches any of the provisions of this Section 3, the
Company and its subsidiaries, Affiliates, successors or assigns shall have the
following rights and remedies, each of which shall be independent of the others
and severally enforceable, and each of which shall be in addition to, and not in
lieu of, any other rights or remedies available to the Company or any of its
subsidiaries, Affiliates, successors or assigns at law or in equity under this
Agreement or otherwise:
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(i) The
right and remedy to have each and every one of the covenants in this Section 3
specifically enforced and the right and remedy to obtain injunctive relief, it
being agreed that any breach or threatened breach of any of the non-competition
or other restrictive covenants and agreements contained herein would cause
irreparable injury to the Company and its subsidiaries, Affiliates, successors
or assigns and that money damages would not provide an adequate remedy at law to
the Company and its subsidiaries, Affiliates, successors or
assigns.
(ii) Executive
acknowledges and agrees that the restrictive covenants and agreements contained
herein are reasonable and valid in geographic, temporal and subject matter scope
and in all other respects. If, however, any arbitrator or court
subsequently determines that any of such covenant or agreement, or any part
thereof, is invalid or unenforceable as written, then such provision shall be
reformed to the extent necessary (and to no greater extent) to be valid and
enforceable. If such provision cannot be so reformed, it shall be
deemed struck by the parties and the remainder of such covenants and agreements
shall not thereby be affected and shall be given full effect without regard to
the invalid portions.
(iii) If
any arbitrator or court determines that any of the restrictive covenants and
agreements, or any part thereof, is unenforceable because of the duration or
scope of such provision, such arbitrator or court shall have the power to reduce
the duration or scope of such provision, as the case may be, and, in its reduced
form, such provision shall then be enforceable to the maximum extent permitted
by applicable law.
4. RETURN OF COMPANY
PROPERTY. Executive agrees that following the termination of
employment for any reason, Executive shall return all property of the Company
and any of its subsidiaries, Affiliates and any divisions thereof which is then
in or thereafter comes into Executive's possession, including, but not limited
to, documents, contracts, agreements, plans, photographs, books, notes,
electronically stored data and all copies of the foregoing as well as any
automobile or other materials or equipment supplied by the Company to
Executive.
5. OWNERSHIP OF
INVENTIONS. Executive shall disclose promptly, to such
person(s) as may be designated by the Company for this purpose from
time-to-time, any and all information relating to all Inventions (as hereinafter
defined) which Executive makes or conceives or first reduces to practice during
his employment hereunder. The term “Inventions” for purposes of this
Agreement shall mean all inventions, improvements, works of authorship,
formulas, processes, methods, computer programs, databases, and trade secrets
(whether patentable or not) made or conceived or first reduced to practice by
Executive solely, or jointly with others, (i) in the performance of his
duties, (ii) with the use of time, material or facilities of the Company,
(iii) which relate to the Company's business, including any actual or
anticipated product, method, apparatus, substance or article of manufacture
within the Company's field of activity or its research and development efforts,
or (iv) which results from or is suggested by work performed for the
Company. Executive acknowledges that all Inventions shall be the
exclusive property of the Company and, to the extent that the ownership of such
Invention does not vest in the Company as a matter of law, he hereby assigns and
shall continue to assign to the Company, without further compensation, his
entire right, title and interest in and to all such Inventions and shall execute
all documents which the Company may deem necessary with respect
thereto. Executive shall make, at the sole discretion and expense of
the Company, such applications for United States and foreign patents covering
any Inventions as the Company may request. Executive shall execute,
acknowledge and deliver all papers, including applications, renewals,
assignments, and applications for re-issue, and do all other rightful acts which
the Company may consider necessary, to secure the Company's full rights to the
Inventions to secure patents or other registrations thereon, and to enforce the
Company's rights therein. The foregoing obligations shall survive the
termination of employment with the Company; provided, however, that the
Company will compensate Executive at a reasonable rate after such termination
for time or expenses actually spent at the Company's request on such
matters.
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Executive
represents, warrants and covenants that: (i) he does not have
applications for patents pending, either domestic or foreign, (ii) there is
no invention now in his possession which he will claim to be excluded herefrom,
(iii) his performance of the foregoing disclosure and assignment
provisions, and his performance of his duties as an employee of the Company will
not breach any invention assignment or proprietary information agreement with
any former employer or other party, and (iv) he will not bring to the
Company or use in the performance of his duties with the Company any documents
or materials of a former employer or third party that are not generally
available to the public or have not been legally transferred to the
Company.
6. SEVERANCE UPON TERMINATION
WITHOUT CHANGE IN CONTROL.
(a) Time of
Termination. Notwithstanding any provision of this Agreement
to the contrary, the employment of Executive hereunder shall terminate on the
first to occur of the following dates:
(i) the
date of Executive's death or Disability (as defined above);
(ii) the
date on which the Company shall give Executive written notice of termination
with or without Cause (as defined below);
(iii) the
date on which Executive gives the Company written notice of Voluntary
Termination with or without Good Reason (as defined below).
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(b) Payments After Involuntary
Termination Without Cause. In the event Executive's employment
hereunder is involuntarily terminated by the Company without Cause (and provided
that such termination is not within two (2) years following a Change in Control
as defined in Section 7 below), subject to Executive's compliance with
Section 6(d), Executive (or the Trustee named
in Executive's Last Will and Testament, if applicable) shall be entitled
to receive, as Executive's sole and exclusive remedy, (i) a payment equal to
“Standard Severance Amount” defined in Schedule A, payable in a lump sum payment
and subject to withholding of all applicable taxes with respect thereto and
deductions for insurance contributions), (ii) any earned but unpaid salary and
payment for accrued but unused vacation days, subject to and in accordance with
Company policies, through the Date of Termination, (iii) any bonus amount under
the Company’s Annual Incentive Plan previously earned in full but not yet paid
for fiscal years of the Company prior to the fiscal year in which the Date of
Termination occurs, and (iv) continued medical, dental, disability
and life insurance coverage at the active employee rate as provided to Executive
and his eligible dependents immediately prior to such termination for one (1)
year following such termination.
(c) Termination for Cause or
Voluntary Termination With or Without Good Reason. The Company
shall be entitled at any time, upon written notice to Executive, to terminate
Executive's employment hereunder for Cause. In the event that
Executive's employment hereunder shall be terminated for Cause, or due to a
Voluntary Termination by Executive with or without Good Reason, Executive shall
be entitled to receive, as his sole and exclusive remedy, (i) any earned
but unpaid salary and payment for accrued but unused vacation days, subject to
and in accordance with Company policies, through the Date of Termination and
(ii) any bonus amount under the Company’s Annual Incentive Plan previously
earned in full but not yet paid for fiscal years of the Company prior to the
fiscal year in which the Date of Termination occurs.
(d) Release Requirement for
Post-Termination Payments. As condition to the receipt of any
severance benefits pursuant to Section 6 or Section 7, Executive shall
execute, and not revoke, a release within 45 days of the Date of Termination, in
the form attached hereto as
Schedule B, with such changes as may be necessary or reasonably
required to take into account applicable state or federal law, releasing the
Company, and its subsidiaries and Affiliates, and its officers, directors,
employees, and agents, from any and all claims and from any and all causes of
action of any kind or character, including, but not limited to, all claims and
causes of action arising out of Executive’s employment with the Company or the
termination of such employment; provided that Executive shall not be expected to
waive any rights accruing under this Agreement; and provided further that if
Executive refuses to sign such release Executive will still be bound to his
obligations under this Agreement as if Executive signed such release and
received severance benefits pursuant to Section 6 or
Section 7. Notwithstanding the foregoing, nothing in the
required release or in any other provision of this Agreement shall alter any
rights Executive may have (i) with regard to equity awards pursuant to the
controlling grant agreements and plan documents, and (ii) with regard to
indemnification rights that may exist by virtue of Executive’s previous
employment with the Company.
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7 SEVERANCE UPON TERMINATION
FOLLOWING A CHANGE IN CONTROL.
(a) Termination Following Change
in Control. In the event Executive's employment hereunder
shall terminate as a result of (i) termination by the Company without Cause, or
(ii) Voluntary Termination by the Executive with Good Reason, within two (2)
years following the occurrence of a Change in Control, subject to Executive's
compliance with Section 6(d), Executive (or the Trustee named in Executive's Last Will and
Testament, if applicable) shall be entitled to receive, as Executive's
sole and exclusive remedy, (i) a payment equal to the “Change-In-Control
Severance Amount” defined in Schedule A, payable in a lump sum payment and
subject to withholding of all applicable taxes with respect thereto and
deductions for insurance contributions), (ii) any earned but unpaid salary and
payment for accrued but unused vacation days, subject to and in accordance with
Company policies, through the Date of Termination, (iii) any bonus amount under
the Company’s Annual Incentive Plan previously earned in full but not yet paid
for fiscal years of the Company prior to the fiscal year in which the Date of
Termination occurs, and (iv) continued medical, dental, disability and life
insurance coverage at the active employee rate as provided to Executive and his
eligible dependents immediately prior to such termination for two (2) year
following such termination.
8. EXCISE
TAX.
(a) Reduction. In
the event it shall be determined that any payment or distribution in the nature
of compensation (within the meaning of Section 280G(b)(2) of the Code) to or for
the benefit of Executive, whether paid or payable or distributed or
distributable pursuant to the terms of this Agreement (including, without
limitation, the accelerated vesting of incentive or equity awards held by
Executive) or otherwise (“Payments”) (i) constitute “parachute payments”
within the meaning of Section 280G of the Code, and (ii) but for this
Section 8 would be subject to the excise tax imposed by Section 4999
of the Code, or any comparable successor provisions (the “Excise Tax”), then the
Payments hereunder shall be either (a) provided to the Executive in full,
or (b) provided to the Executive as to such lesser extent which would
result in no portion of such benefits being subject to the Excise Tax, whichever
of the foregoing amounts, when taking into account applicable federal, state,
local and foreign income and employment taxes, the Excise Tax, and any other
applicable taxes, results in the receipt by the Executive, on an after-tax
basis, of the greatest amount of benefits, notwithstanding that all or some
portion of such benefits may be taxable under the Excise Tax.
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(b) Other
Terms. All determinations required to be made under this
Section 8 shall be made by the Company’s accounting firm (the “Accounting
Firm”). The Accounting Firm shall provide detailed supporting
calculations both to the Company and Executive. All fees and expenses
of the Accounting Firm shall be borne solely by the Company. Absent
manifest error, any determination by the Accounting Firm shall be binding upon
the Company and Executive. In the event of a reduction of benefits
hereunder, the Executive shall be given the choice of which benefits to
reduce. If the Executive does not provide written identification to
the Company of which benefits he chooses to reduce within ten (10) days after
written notice of the Accounting Firm’s determination, then the Company shall
select the benefits to be reduced. For purposes of making the
calculations required by this Section 8, the Accounting Firm may make
reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the application of the
Code and other applicable legal authority. The Company and the
Executive shall furnish to the Accounting Firm such information and documents as
the Accounting Firm may reasonably request in order to make a determination
under this Section 8. In any event, notwithstanding anything to
the contrary herein, any reduction in benefits under this Section 8 shall be
made in a manner consistent with the requirements of Section 409A of the Code,
and, to the extent required to avoid the imposition of any tax or penalty under
Code Section 409A, where two different Payments are subject to potential
reduction but payable at different times, such amounts shall be reduced on a pro
rata basis.
9. TIME OF PAYMENT; SECTION
409A.
(a) Time of
Payment. Unless otherwise provided, all of the payments due to
Executive under Sections 6(b) and 7(a) above shall be made within sixty (60)
days following the Date of Termination.
(b) Section 409A of the
Code. Notwithstanding any provision in this Agreement to the
contrary, if the payment of any compensation or benefit hereunder (including,
without limitation, any severance benefit) would be subject to additional taxes
and interest under Section 409A of the Code because the timing of such payment
is not delayed as provided in Section 409A(a)(2)(B) of the Code, then any such
payment or benefit that Executive would otherwise be entitled to during the
first six (6) months following the Date of Termination shall be accumulated and
paid or provided, as applicable, on the date that is six (6) months and one (1)
day after the Date of Termination (or if such date does not fall on a business
day of the Company, the next following business day of the Company), or such
earlier date upon which such amount can be paid or provided under Section 409A
of the Code without being subject to such additional taxes and
interest.
10. ENTIRE
AGREEMENT. This Agreement sets forth the entire agreement
between the parties with respect to its subject matter hereof and merges and
supersedes all prior discussions, agreements and understandings of every kind
and nature between them. This Agreement may not be changed or
modified except by an agreement in writing, signed by the parties
hereto.
11. EACH PARTY THE
DRAFTER. This Agreement and the provisions contained herein
shall not be construed or interpreted for or against any party to this Agreement
because that party drafted or caused that party's legal representative to draft
any of its provisions.
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12. WAIVER. The
failure of either party to this Agreement to enforce any of its terms,
provisions, or covenants shall not be construed as a waiver of the same or of
the right of such party to enforce the same. Waiver by either party
hereto of any breach or default by the other party of any term or provision of
this Agreement shall not operate as a waiver of any other breach or
default.
13. SEVERABILITY. In
the event that any one or more of the provisions of this Agreement shall be held
to be invalid, illegal or unenforceable, the validity, legality and
enforceability of the remainder of the Agreement shall not in any way be
affected or impaired thereby. Moreover, if any one or more of the
provisions contained in this Agreement shall be held to be excessively broad as
to duration, activity or subject, such provisions shall be construed by limiting
and reducing them so as to be enforceable to the maximum extent allowed by
applicable law.
14. NOTICES. Any
notice given hereunder shall be in writing and shall be deemed to have been
given when delivered by messenger or courier service (against appropriate
receipt), or mailed by registered or certified mail (return receipt requested),
addressed as follows:
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If
to the Company:
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West8Tower,
Suite 1000
10205
Westheimer
Xxxxxxx,
Xxxxx 00000
Attention: General
Counsel
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If
to Executive:
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at
the home address of record as last
provided
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to
the Company by Executive
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or at
such other address as shall be indicated to either party in
writing. Notice of change of address shall be effective only upon
receipt.
13
15. ARBITRATION; EXPENSES OF
ENFORCEMENT. Except as otherwise specifically provided in this
Agreement, the Company and Executive agree to submit exclusively to final and
binding arbitration any and all disputes or disagreements relating to or
concerning the interpretation, performance or subject matter of this Agreement
in accordance with the National Rules for the Resolution of Employment Disputes
of the American Arbitration Association (“AAA”) using a mutually acceptable
single arbitrator. The arbitration will take place in Houston,
Texas. Executive and the Company agree that the decision of the
arbitrator will be final and binding on both parties. Arbitration
shall be commenced by either party filing a demand for arbitration with the AAA
within 60 days after such dispute has arisen. Each party in such an
arbitration proceeding shall be responsible for the costs and expenses incurred
by such party in connection therewith (including attorneys’ fees) which shall
not be subject to recovery from the other party in the arbitration except that
any and all charges that may be made for the cost of the arbitration and the
fees of the arbitrators which shall in all circumstances be paid by the
Company. Any court having jurisdiction may enter a judgment upon the
award rendered by the arbitrator. Notwithstanding the provisions of
this Section 15, the Company may, if it so chooses, bring an action in any court
of competent jurisdiction for injunctive relief to enforce Executive’s
obligations under Sections 3, 4, or 5 hereof.
16. GOVERNING
LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of Texas, without regard to its conflict
of law rules.
17. JURISDICTION;
FORUM. By the execution and delivery of this Agreement, the
Company and Executive submit to the personal jurisdiction of any state or
federal court in the State of Texas in any suit or proceeding arising out of or
relating to this Agreement. To the extent that either party hereto
has or hereafter may acquire any immunity from jurisdiction of any court or from
any legal process (whether through service or notice, attachment prior to
judgment, attachment in aid of execution, execution or otherwise) with respect
to itself or its property, the parties each irrevocably waives such immunity in
respect of its obligations with respect to this Agreement. This
Section 17 is subject to the provisions of Section 15 hereof. THE
PARTIES HERETO AGREE THAT THEY HEREBY IRREVOCABLY WAIVE THE RIGHT TO TRIAL BY
JURY IN ANY ACTION TO ENFORCE, OR INTERPRET, THE PROVISIONS OF THIS
AGREEMENT.
18. INTERPRETATION. The
headings contained in this Agreement are for reference purposes only and shall
not affect in any way the meaning or interpretation of this
Agreement. Whenever the words “include” or “including” are used in
this Agreement, they shall be deemed to be followed by the words “without
limitation.”
19 COUNTERPARTS. This
Agreement may be executed in one or more counterparts, which, together, shall
constitute one and the same agreement.
20. CONFLICT. In the event of a conflict between the
terms of this Agreement and the terms of any present or future plan, policy or
procedure of the Company or any agreement between the Company and Executive,
including but not limited to a stock option agreement or a restricted share
agreement, the terms of this Agreement shall take precedence and
govern.
14
21. TERM AND
TERMINATION.
The term
of this Agreement (the “Term”) shall commence on the Effective Date and end on
the anniversary of the Effective Date first following six months prior notice by
the Company of its election to terminate the Agreement, unless prior to the
Company giving such notice or prior to the date the Agreement would otherwise
terminate, either:
(a) the
employment of Executive is terminated by the Company without Cause (and provided
that such termination is not within two (2) years following a Change in Control
as defined in Section 7), in which case the Term shall end on the last day of
the one-year period following the Date of Termination; or
(b) a Change in
Control shall have occurred, in which case the Term shall end on the last day of
the two-year period beginning on the date following the occurrence of a Change
in Control
(as
applicable, the “Agreement Termination Date”). The rights and
obligations of the parties hereunder arising before, on, or after the Agreement
Termination Date, including, without limitation, the obligation of the Company
to make payments pursuant to Paragraphs 6 and 7, if any, and the obligations of
the Executive to honor the restrictive covenants shall survive the termination
of the Agreement until fully discharged or satisfied.
[Remainder
of page intentionally left blank; signature page to follow]
15
IN
WITNESS WHEREOF, the parties hereto have duly executed this Agreement on the day
and year first above written.
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By:
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Name:
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Title:
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EXECUTIVE
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By:
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16
SCHEDULE
A
For
purposes of the foregoing Agreement, the additional terms listed below shall
have the definitions indicated.
(a) Standard Severance
Amount. For purposes of this Agreement, “Standard Severance
Amount” shall mean an amount equal to _______ times Executive’s Base Salary
(determined as of the Date of Termination). For purposes of this
definition, Executive’s Base Salary shall be determined without regard to any
reduction in compensation that would otherwise constitute Good Reason under
Section 1(f)(ii) of this Agreement occurring within three months preceding the
Date of Termination.
(b) Change-In-Control Severance
Amount. For purposes of this Agreement, “Change-In-Control
Severance Amount” shall mean an amount equal to _____ times
Executive’s Base Salary and annual incentive at target (determined as of the
Date of Termination). For purposes of this definition, Executive’s
Base Salary shall be determined without regard to any reduction in compensation
that would otherwise constitute Good Reason under Section 1(f)(ii) of this
Agreement occurring within three months preceding the Date of
Termination.
(c) Non-Competition
Period. For purposes of this Agreement, the “Non-Competition
Period” shall be the period during the Term and if Executive’s employment has
terminated during the Term continuing through the later of (i) the date that is
one (1) year after Executive’s Date of Termination, or (ii) the date that is two
(2) years after Executive’s Date of Termination in the event Executive’s
employment terminates as a result of termination by the Company without Cause or
Voluntary Termination by the Executive with Good Reason if either occurs within
two (2) years following the occurrence of a Change in Control.
SCHEDULE
B
DO
NOT SIGN PRIOR TO
FINAL DAY OF
EMPLOYMENT
This
RELEASE AGREEMENT (“Release Agreement”)
is made between DRESSER-RAND GROUP INC., a Delaware corporation (the “Company”) and (“Executive”).
WITNESSETH
WHEREAS, Executive and the Company have
entered into an Confidentiality, Non-Compete, Severance, and Change In Control
Agreement dated as of _______ ___, 2009 (the “Agreement”);
WHEREAS, pursuant to Section 6 and 7 of
the Agreement, the Company has agreed to provide certain severance payments to
Executive if Executive executes this Release Agreement and does not revoke
Executive's consent to this Release Agreement; and
WHEREAS, this Release Agreement and the
Company's obligations under Sections 6 and 7 of the Agreement (as may be
applicable) shall become effective only upon the “Effective Date” of this
Release Agreement (as defined below).
NOW,
THEREFORE, in consideration of the premises and mutual covenants contained
herein and for other good and valuable consideration, the receipt of which is
mutually acknowledged, the Company and Executive agree as follows:
1. Release.
(a) Executive,
on behalf of himself, his heirs, executors, administrators, successors and
assigns, hereby irrevocably and unconditionally releases the Company and its
subsidiaries, divisions and Affiliates, together with their respective owners,
assigns, agents, directors, partners, officers, employees, attorneys and
representatives and any of their predecessors and successors and each of their
estates, heirs and assigns (collectively, the “Company Releasees”)
from any and all charges, complaints, claims, liabilities, obligations,
promises, agreements, causes of action, rights, costs, losses, debts and
expenses of any nature whatsoever, known or unknown, which Executive or his
heirs, executors, administrators, successors or assigns ever had, now have or
hereafter can, will or may have (either directly, indirectly, derivatively or in
any other representative capacity) by reason of any matter, fact or cause
whatsoever against the Company or any of the other Company Releasees from the
beginning of time to the date of this Release Agreement, except those claims
which can not be released as a matter of law. This release includes,
without limitation, all claims arising out of, or relating to, Executive's
employment and/or end of his employment with the Company and all claims arising
under any federal, state and local labor, employment and/or anti-discrimination
laws including, without limitation, the federal Age Discrimination in Employment
Act, the Employee Retirement Income Security Act, the Americans with
Disabilities Act, Title VII of the Civil Rights Act of 1964, the Family and
Medical Leave Act, the Civil Rights Act of 1991, the Texas Commission on Human Rights Act, and comparable
federal, state, and local statutes and ordinances, each as
amended. Notwithstanding the foregoing, this release shall not
include any ongoing obligations of the
Company under the Agreement (including but not limited to the obligation to
provide severance pay and benefits to the Executive under Sections 6 and 7
thereof) and any rights provided under the Company’s bylaws and the
Company’s benefit plans and agreements with Executive related
thereto, including but not limited to stock options, and restricted stock plans
and agreements.
(b) Executive
shall execute the Release Agreement on a date which is no earlier than the date
upon which Executive's employment is terminated.
(c) Executive
acknowledges and agrees that the Company has fully satisfied any and all
obligations owed to Executive arising out of Executive's employment with the
Company, exclusive of any ongoing obligations of
the Company under the Agreement (including
but not limited to the obligation to provide severance pay and benefits to the
Executive under Sections 6 and 7 thereof) and any rights provided under the
Company’s bylaws and the Company’s benefit plans
and agreements with Executive related thereto, including but not
limited to stock options, and restricted stock plans and
agreements. Executive further acknowledges and agrees that the
Company and the other Company Releasees have fully complied with their COBRA
continuation coverage obligations.
(d) Executive
represents that he has no complaints, charges, or lawsuits pending against the
Company or any of the other Company Releasees. Executive further
covenants and agrees that neither he nor his heirs, executors, administrators,
successors or assigns will be entitled to any Personal recovery in any
proceeding of any nature whatsoever against the Company or any of the other
Company Releasees arising out of any of the matters released in this Section
1.
(e) Executive
has resigned from all positions, if any, with the board of directors of the
Company and any officer and/or director positions of any parent, subsidiary, or
Affiliate of the Company.
2. Return of
Company Property. Executive represents and agrees that
Executive has returned to the Company all property of the Company or any of the
Company Releasees, including, but not limited to, documents, contracts,
agreements, plans, photographs, books, notes, reports, files, memoranda, records
and software, credit cards, cardkey passes, door and file keys, computer access
codes or disks and instructional manuals, and other physical or electronic
property that Executive received and/or prepared or helped prepare in connection
with Executive's employment with the Company, and that Executive has not
retained any copies, duplicates, reproductions or excerpts thereof.
3. No
Admission of Wrongdoing. Nothing herein is to be deemed to
constitute an admission of wrongdoing by the Company or any of the other Company
Releasees.
B-2
4. Consultation
with Attorney/Voluntary Agreement. Executive acknowledges that
(i) the Company has advised Executive of his right to consult with an attorney
prior to executing this Release Agreement, (ii) Executive has carefully read and
fully understands all of the provisions of this Release Agreement, and (iii)
Executive is entering into this Release Agreement, including the releases set
forth in Paragraph 1 above, knowingly, freely and voluntarily in exchange for
good and valuable consideration.
5. Consideration
& Revocation Period.
(a) Executive
acknowledges that he has been provided at least twenty-one (21) calendar days to
consider the terms of this Release Agreement, although he may sign it
sooner.
(b) Executive
will have seven (7) calendar days from the date on which he signs this Release
Agreement to revoke his consent to the terms of this Release
Agreement. Such revocation must be in writing and must be addressed
as follows: General Counsel, Dresser-Rand Group Inc., West8Tower,
00000 Xxxxxxxxxx, Xxxxxxx, Xxxxx 00000. Notice of such revocation must be
received within the seven (7) calendar days referenced above. In the
event of such revocation by Executive, this Release Agreement shall not become
effective and Executive shall not have any rights to severance benefits under
Sections 6 or 7 of the Agreement.
(c) Provided
that Executive does not revoke this Release Agreement, this Release Agreement
shall become effective on the eighth (8th) calendar day after the date on which
Executive signs this Release Agreement (the “Effective
Date”).
6. Assignment. This
Release Agreement is Personal to Executive and may not be assigned by
Executive. This Agreement will inure to the benefit of the Company
and the other Company Releasees and their successors and assigns.
7. Waiver
and Amendments. Any waiver, alteration, amendment, or
modification of any of the terms of this Release Agreement shall be valid only
if made in writing and signed by the parties hereto; provided, however, that any
such waiver, alteration, amendment, or modification is consented to on the
Company’s behalf by a properly authorized corporate officer. No
waiver by either of the parties hereto of their rights hereunder shall be deemed
to constitute a waiver with respect to any subsequent occurrences or
transactions hereunder unless such waiver specifically states that it is to be
construed as a continuing waiver.
8. Severability
and Governing Law. If any covenants or such other provisions
of this Release Agreement are found to be invalid or unenforceable by a final
determination of a court of competent jurisdiction (a) the remaining terms and
provisions hereof shall be unimpaired and (b) the invalid or unenforceable term
or provision hereof shall be deemed replaced by a term or provision that is
valid and enforceable and that comes closest to expressing the intention of the
invalid or unenforceable term or provision hereof. THIS RELEASE
AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE
STATE OF TEXAS, WITHOUT REGARD TO ITS CONFLICT OF LAW RULES.
B-3
9. Section
Headings and Definitions. The headings contained in this
Release Agreement are for reference purposes only and shall not affect in any
way the meaning or interpretation of this Release Agreement. Whenever
the words “include” or “including” are used in this Release Agreement, they
shall be deemed to be followed by the words “without
limitation.” Capitalized terms not defined in this Release Agreement
shall have the meaning given to such terms in the Agreement.
10. Entire
Agreement. This Release Agreement and the Agreement constitute
the entire understanding and agreement of the parties hereto regarding the
employment of Executive. This Release Agreement supersedes all prior
negotiations, discussions, correspondence, communications, understandings, and
agreements between the parties relating to the subject matter of this Release
Agreement.
11. Jurisdiction;
Forum. Executive acknowledges that any disputes under the
Agreement or this Release Agreement shall be subject to the arbitration
provisions of Section 15 of the Agreement. Subject to that provision,
by the execution and delivery of this Release Agreement, Executive submits to
the personal jurisdiction of any state or federal court in the State of Texas in
any suit or proceeding arising out of or relating to this Release
Agreement. To the extent that Executive may acquire any immunity from
jurisdiction of any Texas court or from any legal process (whether through
service or notice, attachment prior to judgment, attachment in aid of execution,
execution or otherwise) with respect to himself or his property, Executive
irrevocably waives such immunity in respect of his obligations with respect to
this Release Agreement. Executive agrees that an appropriate,
convenient and non-exclusive forum for any and all disputes between the parties
hereto arising out of this Release Agreement or the transactions contemplated
hereby shall be in any state or federal court in the State of
Texas.
12. Counterparts. This
Release Agreement may be executed in two or more counterparts, each of which
shall be deemed to be an original but all of which together shall constitute one
and the same instrument. The execution of this Release Agreement may
be by actual or facsimile signature.
IN
WITNESS WHEREOF, the undersigned have executed this Release Agreement as of the
dates indicated below.
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By:
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Date
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Title:
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Executive
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Date
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B-4
