EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of this
1st day of November, 2001, by and between Waterlink, Inc., a Delaware
corporation (the "Company"), and Xxxxxxx Xxxxxxxxxx ("Executive").
W I T N E S S E T H:
WHEREAS, the Company desires to employ Executive as of the date hereof
as its President and Chief Executive Officer and Executive desires to be so
employed;
NOW THEREFORE, in consideration. of the promises and mutual covenants
contained herein and for other good and valuable consideration, the adequacy and
receipt of which are hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT. The Company agrees to employ Executive and Executive
hereby agrees to serve the Company for the Term (as defined in Section 2 below)
of this Agreement, in the position and with the duties and responsibilities set
forth in Section 3 below, and upon the other terms and subject to the conditions
hereinafter stated.
2. TERM. The initial term (the "Initial Term") of this Agreement shall
commence on the date hereof and shall continue until the second anniversary of
the date hereof (the "Initial Expiration Date"); provided, however, that this
Agreement at all times shall be subject to earlier termination in accordance
with the provisions hereof. On the Initial Expiration Date and each anniversary
of the Initial Expiration Date, unless otherwise terminated in accordance with
the provisions hereof, the term of this Agreement shall automatically renew for
successive one year terms (the "Extended Term") unless and until either party
delivers notice of termination pursuant to Section 7.6 within 30 days of the
expiration of the then current term ("Non Renewal"). For purposes of this
Agreement, "Term" means the Initial Term and, as so extended, the Extended Term.
3. POSITION, DUTIES AND RESPONSIBILITIES.
3.1 POSITION, DUTIES AND RESPONSIBILITIES. During the Term,
Executive shall serve as either the President and Chief Executive Officer of the
Company or the Chief Executive Officer of the Company's Specialty Products
division, such position to be as determined by the Board of Directors of the
Company (the "Board") from time to time, and shall be responsible for the duties
attendant to such position, which duties will be generally consistent with his
position as an executive officer of the Company and such other managerial duties
and responsibilities with the Company, its affiliates, subsidiaries or divisions
as may be assigned by the Board consistent with Executive's position, duties and
responsibilities with the Company, as the Company then exists. Executive will
report directly to the Board. Executive shall also serve as an officer and/or
member of the Board of Directors of any subsidiary or affiliate of the Company,
if the Board should so request; provided, that the duties, authority and
responsibilities of Executive with such subsidiaries or affiliates shall be
commensurate, and in all events not less than, Executive's duties, authority and
responsibilities with the Company as set forth in this
Agreement. Executive acknowledges and agrees that, in connection, with his
employment hereunder, he may be required to travel on behalf of the Company.
3.2 SERVICES TO BE PROVIDED. During the Term, Executive shall
devote all of his working time, attention and energies to the affairs of the
Company and its subsidiaries, affiliates and divisions and use his best efforts
in the performance of his duties to promote its and their best interests;
provided, however, that nothing herein shall preclude Executive from (i) serving
on the boards of directors of a reasonable number of other corporations (and
retain any director's fees received therefrom), trade associations or charitable
organizations, (ii) engaging in charitable activities and community affairs or
(iii) managing his personal investments and affairs; provided, however, that
such activities do not materially interfere with the performance of Executive's
duties under the Agreement.
4. SALARY.
4.1 BASE SALARY. During the Term, Executive shall be paid a
base salary (the "Base Salary"), payable in equal installments at such intervals
as the other executive officers of the Company are paid but not less often than
semi-monthly, at an annual rate of Two Hundred Thousand Dollars ($200,000) until
the first anniversary of the date hereof. For each succeeding year during the
Term, the annual rate of the Base Salary shall be increased (but not decreased)
by such amount, if any, as may be determined by the Board.
4.2 ANNUAL BONUS. During the Term, Executive shall participate
in any long term and annual incentive compensation program as may be maintained
by the Company for the benefit of its executives. Pursuant to an annual
incentive bonus plan proposed by management of the Company and approved by the
Board, Executive may earn in each year during the Term, commencing with fiscal
2002, an amount (prorated for partial years) ranging from 0% to 50% of his Base
Salary, subject to the achievement of certain performance goals established by
the Board, such performance goals to be derived from the Company's annual
operating plan.
4.3 EQUITY OPPORTUNITY. During the Term, Executive shall be
eligible for stock option grants and similar awards under existing plans of the
Company, and under any future plans in which executive officers of the Company
are entitled to participate. The stock option will be exercisable in cumulative
annual increments of 50% of the shares subject thereto, commencing on the first
anniversary of the date of grant of such stock options.
5. EMPLOYEE BENEFITS.
5.1 BENEFIT PROGRAMS. During the Term, Executive shall
participate with other members of senior management of the Company in any
pension, profit-sharing, stock option or similar plan or program of the Company
now existing or established hereafter for the benefit of its employees or senior
executives of the Company or its subsidiaries generally, to the extent that he
remains eligible under the general provisions thereof Executive shall also be
entitled to participate in any group insurance, hospitalization, medical, health
and accident, disability, life or similar plan or program of the Company now
existing or established hereafter
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for the benefit of its employees or senior executives of the Company and its
subsidiaries generally, to the extent that he is eligible under the general
provisions thereof.
5.2 AUTOMOBILE. During the Term, the Company will provide
Executive with a leased automobile comparable in quality, type and cost as those
provided to similarly situated management executives of the Company and
consistent with its policies as amended from time to time. The Company shall pay
or reimburse the Executive for all taxes, insurance premiums, maintenance,
repair and operating expenses (other than for expenses incurred when such
automobile is used for non-Company business purposes) incurred in the operation
of such automobile. Such automobile shall remain the property of the Company and
shall be returned to the Company immediately upon termination of this Agreement,
except as specified in Section 8.5 hereof, in which event such automobile shall
be returned to the Company not later than the end of the twelve month period set
forth in Section 8.5.
5.3 VACATION; PERSONAL DAYS. During the Term, Executive shall
be entitled to annual vacation with pay during each year of his employment,
hereunder provided that the vacation days taken are commensurate with past
practice of the Company for its senior executives and do not materially
interfere with the operations of the Company. Such vacation may be taken, in
Executive's discretion, at such time or times as are not inconsistent with the
reasonable business needs of the Company.
5.4 KEY MAN INSURANCE. Executive agrees that the Company may
at any time and for the Company's own benefit, apply for and take out life,
health, accident, and/or other insurance covering Executive either independently
or together with others in any amount which the Company deems to be in, its best
interests and the Company may maintain any existing insurance policies on the
life of Executive owned by the Company. The Company shall own all rights in any
such insurance policies and in the cash values and proceeds thereof and., except
as otherwise provided, Executive shall not have any right, title or interest
therein. Executive agrees to assist the Company at the Company's expense in
obtaining any such insurance by, among other things, submitting to the customary
examinations and correctly preparing, signing and delivering such applications
and other documents as may be required by insurers. Upon the termination of
Executive's employment, or if the Company elects to cancel any insurance
coverage on Executive owned by the Company, and if the policy so permits,
Executive shall have the option of acquiring such policy from the Company upon
written notice to the Company within thirty days after termination of employment
or after receiving notice from the Company of its intent to cancel such
insurance, by paying to the Company an amount equal to the cash surrender value
plus any unearned premium associated with such insurance. The Company agrees to
give Executive not less than thirty days notice of its intent to cancel any
insurance described in this Section 5.4.
6. EXPENSES. The Company shall reimburse Executive upon presentation of
appropriate vouchers or receipts and in accordance with the Company's expense
reimbursement policies, for all reasonable expenses incurred by Executive in
connection with the performance of his duties under this Agreement.
7. TERMINATION. Executive's employment under this Agreement may be
terminated without any breach of this Agreement only under the following
circumstances:
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7.1 DEATH. Executive's employment shall terminate upon his
death.
7.2 DISABILITY. In the event Executive shall be unable to
render the services or perform his duties hereunder by reason of illness, injury
or incapacity (whether physical, mental, emotional or psychological) for a
period of ninety (90) calendar days out of any period of one hundred and eighty
(180) consecutive calendar days during the Term, then the Company shall have the
right to terminate this Agreement.
7.3 TERMINATION OF EMPLOYMENT OF EXECUTIVE BY THE COMPANY FOR CAUSE.
The Company may terminate the employment of Executive for Cause (as hereinafter
defined). The term "Cause," as used herein, shall mean (a) Executive's willful
misconduct or gross neglect in the performance of his duties hereunder which in
either case has resulted, or is likely to result, in material economic damage to
the Company, (b) the material breach of this Agreement by Executive which has
resulted, or is likely to result, in material, economic damage to the Company or
(c) the final, non-appealable conviction of Executive of a felony which
constitutes a crime of moral turpitude. For purposes of Section 7.3(a), no act,
or failure to act, on Executive's part, will be considered "willful" unless done
or omitted to be done by him not in good faith and without a reasonable belief
that his action or omission was in furtherance of the Company's business.
For purposes of clause (a) and (b) of the preceding paragraph,
Executive shall not be deemed to have been terminated for Cause unless and
until, after reasonable notice to Executive and an opportunity for him to be
heard before the Board, the Board has determined that Executive was guilty of
the conduct described in clause (a) or (b) of the preceding paragraph, and the
Board has delivered to Executive a Notice of Termination (as defined below)
stating such determination and specifying the particulars thereof in detail.
7.4 TERMINATION OF EMPLOYMENT BY RESIGNATION OF EXECUTIVE.
Notwithstanding anything to the contrary in Section 2 hereof the Term may be
terminated by Executive by delivering not less than thirty (30) days notice of
termination to the Company pursuant to Section 7.6 (provided that circumstances
did not then exist that would permit the Company to terminate Employee for
Cause).
7.5 NON RENEWAL. On the Initial Expiration Date and each
anniversary of the Initial Expiration Date either party may deliver notice of
termination pursuant to Section 7.6 within thirty (30) days of the expiration of
the then current term.
7.6 NOTICE OF TERMINATION. Any termination of Executive's
employment by the Company or by Executive (other than a termination pursuant to
Section 7.1 above) shall be communicated by written Notice of Termination to the
other party. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice which shall indicate the specific provision in this Agreement
relied upon and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment under
the provision so indicated, Any purported termination not satisfying the
requirements of this Section 7.6 shall not be effected except in the event of a
Non Renewal in which case the Company shall not be required to provide a basis
for termination other than Non Renewal of the Agreement.
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7.7 DATE OF TERMINATION. "Date of Termination" shall mean (i)
if Executive's employment is terminated by his death, the date of his death,
(ii) if Executive's employment is terminated pursuant to Section 7.6 above, the
date specified in the Notice of Termination, and (iii) if Executive's employment
is terminated for any other reason, the date on which a Notice of Termination is
given; provided that if within thirty (30) days after the Notice of Termination
is given pursuant to Section 7.3, the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the termination, the
Date of Termination shall be the date on which the dispute is finally
determined, either by mutual written agreement of the parties, by a binding and
final arbitration award or by a final judgment, order or decree of a court of
competent jurisdiction (the time for appeal having expired and no appeal having
been perfected); provided, further, that if the Company prevails in its
determination to terminate Executive for Cause in such arbitration or
litigation, the Date of Termination shall be the date specified in the Notice of
Termination.
8. COMPENSATION UPON TERMINATION.
8.1 COMPENSATION UPON TERMINATION UPON DEATH. In the event of
the death of Executive during the Term, Executive's designated beneficiary, or,
in the absence of such designation, the estate or other legal representative of
Executive (collectively, the "Estate"), shall be paid an amount equal to the sum
of (x) Executive's unpaid Base Salary through the month in which Executive's
death occurred (which shall be paid within thirty (30) days of Executive's
death), plus (y) an amount equal to the product of (1) the "Bonus Payment" (as
defined in Section 8.2), if any, with respect to the fiscal year in which
Executive's employment is terminated pursuant to Section 7.1, and (2) a
fraction, the numerator of which is the number of days during which Executive
rendered services and performed his duties hereunder during the fiscal year in
which his employment hereunder is so terminated and the denominator of which is
365; such amounts related to the Bonus Payment to be payable to Executive in
twelve (12) equal semi-monthly installments on the fifteenth and last day of
each month commencing on the fifteenth day of the month following the month in
which Executive's employment is terminated, other than any Bonus Payment that is
not then determined, which shall be paid when such Bonus Payment under Section
4.2 would otherwise have been due. Executive, or the Estate, shall be entitled
to other death benefits in accordance with the terms of the Company's benefit
programs and plans and the other provisions of this Agreement.
8.2 COMPENSATION UPON TERMINATION FOR DISABILITY. If
Executive's employment hereunder is terminated for Disability, Executive shall
be paid an amount equal to the sum of (x) any unpaid Base Salary for the month
in which the termination occurred (which shall be paid within thirty (30) days
of the date of termination) plus (y) an amount equal to the product of (1) the
"Bonus Payment" (as defined below), if any, with respect to the fiscal year in
which Executive's employment is terminated pursuant to Section 7.2, and (2) a
fraction, the numerator of which is the number of days during which Executive
rendered services and performed his duties hereunder during the fiscal year in
which his employment hereunder is terminated and the denominator of which is
365; such amounts related to the Bonus Payment to be payable to Executive in
twelve (12) equal semi-monthly installments on the fifteenth and last day of
each month commencing on the fifteenth day of the month following the mouth in
which Executive's employment is terminated, other than any Bonus Payment that is
not then determined, which shall be paid when such Bonus Payment under Section
4.2 would
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otherwise have been due. The amount provided for above shall be reduced by any
disability benefits received by Executive under plans maintained by the Company.
Executive shall. be entitled to other disability compensation and benefits in
accordance with the Company's benefit programs and plans and the other
provisions of this Agreement. The "Bonus Payment' shall mean (a) if a
termination of employment occurs within the first four (4) months of a fiscal
year the bonus, if any, paid to Executive with respect to the immediately
preceding fiscal year pursuant to Section 4.2 hereof or (b) if a termination of
employment occurs after the first four months of a fiscal year, the bonus to be
paid to Executive pursuant to Section 4.2 hereof calculated after the end of the
fiscal year in which such termination occurs with respect to such year. The
parties shall have no further obligation, under this Agreement except that
Executive shall not be relieved of Executive's obligations under Sections 10 and
11 regarding confidentiality and non-competition.
8.3 COMPENSATION UPON TERMINATION BY THE COMPANY FOR CAUSE OR
BY RESIGNATION OF EXECUTIVE. If Executive's employment is terminated by the
Company For Cause or by Resignation of the Executive, the Company shall pay
Executive his Base Salary through the Date of Termination at the rate in effect
at the time Notice of Termination is given, as well as all accrued bonus
compensation through the Date of Termination. The parties shall have no other
obligations under this Agreement except that Executive shall not be relieved of
Executive's obligations under Sections 10 and 11 regarding confidentiality and
non-competition.
8.4 IMPROPER TERMINATION; NON RENEWAL.
(a) Subject to the provisions of Section 8.4(,b) hereof, if
(x) in breach of this Agreement, the Company shall terminate
Executive's employment other than pursuant to Section 7.3 (it being
understood that a purported termination pursuant to Section 7.3 which
is disputed and finally determined not to have been proper shall be a
termination by the Company in breach of this Agreement) or (y) the
Company shall not renew the then current Term which results from the
Company delivering to the Executive notice of termination for
Non-Renewal pursuant to Sections 7.5 and 7.6 hereof, then
(i) The Company shall pay Executive his full Base
Salary through the Date of Termination at the rate in effect
at the time Notice of Termination is given, as well as all
accrued bonus compensation through the Date of Termination;
plus
(ii) In lieu of all other salary and incentive
compensation payments which Executive would have earned under
this Agreement but for his termination, the Company shall pay
to Executive, as liquidated damages, an amount equal to the
annual Base Salary in effect as of the Date of Termination,
such amount to be payable to Executive in twenty-four (24)
equal semi-monthly installments on the fifteenth and last day
of each month, commencing on the fifteenth day of the month
following the month in which the Date of Termination occurs.
If the Company fails to make, within five (5) days of the
dates specified above, any two (2) payments required to be
made pursuant to this Section 8.4(a)(i) or (ii), the Company
shall pay to Executive, within ten (10) days of the date of
such second
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failure, in a lump sum, an amount equal to the sum of the
remaining payments (including any payments that the Company
failed to make) to which Executive would have been entitled
pursuant to Section 8.4(a)(i) and (ii) if such failures had
not occurred. The parties shall have no other obligations
under the Agreement except that Executive shall not be
relieved of Executive's obligations under sections 10 and 11
regarding confidentiality and non-competition.
(iii) In the event of a Change of Control while
Executive is receiving payments of liquidated damages under
Section ss.8.4(a)(ii), at Executive's option, Executive shall
be entitled to receive, in lieu of such payments, an amount
equal to the present value of the unpaid balance of such
payments, determined and payable in accordance with Section
8.4(b)(ii), as if the date of the Change of Control were the
Date of Termination, plus any Gross-Up Payment applicable
pursuant to Section 8.4(b)(iii).
(b) If, within one year after the occurrence of a Change of
Control, (x) in breach of this Agreement, the Company shall terminate
Executive's employment other than pursuant to Section 7.3 (it being
understood that a purported termination pursuant to Section 7.3 which
is disputed and finally determined not to have been proper shall be a
Termination by the Company in breach of this Agreement) or (y) the
Company provides Executive notice of termination for Non Renewal
pursuant to Sections 7.5 and 7.6 hereof, then
(i) The Company shall pay Executive his full Base
Salary through the Date of Termination at the rate in effect
at the time Notice of Termination is given, as well as all
accrued bonus compensation through the Date of Termination;
plus
(ii) In lieu of all other salary and incentive
compensation payments which Executive would have earned under
this Agreement but for his termination, the Company shall pay
to Executive, as liquidated damages an amount equal to the
present value of the payments described in Section 8.4(a)(ii),
with the present value calculation based on the then current
Applicable Federal Rate as defined in Section 1274(d) of the
Internal Revenue Code of 1986, as amended (the "Termination
Payment"). All payments under this Section 8.4(b) shall be
made on or before the fifth day following the Date of
Termination other than any Bonus Payment that is not then
determined, which shall be paid within five (5) days after
calculated and in no event later than ninety (90) days after
the end of the fiscal year in which Executive's employment is
terminated. In addition, if the receipt of the lump sum
pursuant to the foregoing sentence would cause Executive to
pay federal income tax for the year of receipt at a higher
marginal rate than Executive would have paid for such year had
Executive's employment not been terminated (the "Original
Marginal Amount"), Executive shall not be required to mitigate
the amount of compensation payable to Executive hereunder, by
securing other employment or otherwise, nor will such
compensation be reduced by reason of Executive securing other
employment or for any other reason. The parties shall have no
further obligations under this Agreement EXCEPT as provided
for in
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Section 8.4(b)(iii) and Executive shall not be relieved of
Executive's obligations under Section 10 regarding
Confidentiality.
(iii) In the event that Executive becomes entitled to
the Termination Payment provided for in Section 8.4(b)(ii), if
any of the Termination Payment will be subject to the tax (the
"Excise Tax,") imposed by Section 4999 of the Code, the
Company shall pay to Executive at the time specified below, an
additional amount (the "Gross-Up Payment") such that the net
amount retained by Executive, after deduction of any Excise
Tax on the Termination Payment and any federal, state and
local income tax and Excise Tax upon the payment provided for
by this paragraph, shall be equal to the Termination Payment.
For purposes of determining whether any of the Termination
Payment shall be subject to the Excise Tax and the amount of
such Excise Tax, (x) any other payments or benefits received
or to be received by Executive in connection with a Change in
Control of the Company or the termination of Executive's
employment (whether pursuant to the terms of this Agreement or
any other plan, arrangement or agreement with the Company, any
person whose actions result in a Change in Control or any
person having such a relationship with the Company or such
person. as to require attribution of stock ownership between
the parties under section 318(a) of the Code) shall be treated
as "parachute payments" within the meaning of section
280G(b)(2) of the Code, and all "excess parachute payments"
within the meaning of section 280G(b)(1) shall be treated as
subject to the Excise Tax, unless in the opinion of tax
counsel selected by the Company's independent auditors and
acceptable to Executive such other payments or benefits (in
whole or in part) do not constitute parachute payments, or
such excess parachute payments (in whole or in part) represent
reasonable compensation for services actually rendered within
the meaning of section 280G(b)(4) of the Code, (y) the amount
of the Termination Payment which shall be treated as subject
to the Excise Tax shall be equal to the lesser of (A) the
total amount of the Termination Payment or (B) the amount of
excess parachute payments within the meaning of Sections
280G(b)(1) and (4) (after applying clause (x), above, and
after deducting any excess parachute payments in respect of
which payments have been made under this Section 8.4(b)), and
(z) the value of any non-cash benefits or any deferred payment
or benefit shall be determined by the Company's independent
auditors in accordance with the principles of Sections
280G(d)(3) and (4) of the Code. For purposes of determining
the amount of the Gross-Up Payment, Executive shall be deemed
to pay federal income taxes at the highest marginal rate of
federal income taxation in the calendar year in which the
Gross-Up Payment is to be made, and state and local income
taxes at the highest marginal rates of taxation in the state
and locality of Executive's residence upon the Date of
Termination, net of the maximum reduction in federal income
taxes which could be obtained from deduction of such state and
local taxes. In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account
hereunder at the time of termination of Executive's
employment, Executive shall repay to the Company at the time
that the amount of such reduction in Excise Tax is finally
determined the portion of the Gross-Up Payment attributable to
such reduction plus interest on the amount of such
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repayment at the rate provided in section 1274(b)(2)(B) of the
Code. In the event that the Excise Tax is determined to exceed
the amount taken into account hereunder at the time of the
termination of Executive's employment including by reason of
any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company
shall make an additional gross-up payment in respect of such
excess (plus any interest payable with respect to such excess)
at the time that the amount of such excess is finally
determined.
For purposes of this Agreement, a "Change in Control" of the
Company shall mean (i) the acquisition of beneficial ownership (as defined in
Rule 13d-3 under the Securities Exchange Act of 1934, as amended (the "Exchange
Act")) , directly or indirectly, by any "person" (as such term is used in
Sections 13(d) and 14 (d) of the Exchange Act), other than the Company or
Executive or an entity directly or indirectly controlled by Executive, of
securities of the Company representing a majority or more of the combined voting
power of the Company's then outstanding securities, (ii) the failure, for any
reason, of the individuals who presently constitute the Board of Directors (the
"Incumbent Board") to constitute at least a majority thereof, provided that any
director whose election has been approved in advance by directors representing
at least two-thirds (2/3) of the directors comprising the Incumbent Board or by
Executive shall be considered, for these purposes, as though such director were
a member of the Incumbent Board, (iii) the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation, other than a
merger or consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to represent (either by
remaining outstanding or by being converted into voting securities of the
surviving entity) at least a majority of the combined voting power of the voting
securities of the Company or such surviving entity outstanding immediately after
such merger or consolidation, and such merger or consolidation occurs; or (iv)
the stockholders of the Company approve a plan of complete liquidation of the
Company or an agreement for the sale or disposition by the Company of all or
substantially all of the Company's assets.
8.5 CONTINUED MAINTENANCE OF BENEFIT PLANS. Unless Executive
is terminated for Cause, Death, Disability or by Resignation of Executive, the
Company shall maintain in full force and effect, for the continued benefit of
Executive for twelve (12) months commencing upon the Date of Termination, (i)
all medical, hospitalization, health and accident insurance benefits in which
Executive was entitled to participate immediately prior to the Date of
Termination, and (ii) the automobile benefit specified in Section 5.2 above. In
the event that Executive's participation in any such benefits is barred, the
Company shall arrange to provide Executive with benefits substantially similar
to those which Executive would otherwise have been entitled to receive under
such benefits.
9. INDEMNIFICATION.
9.1 The Company agrees to indemnify Executive to the fullest
extent permitted by applicable law consistent with the Company's Certificate of
Incorporation and Bylaws as in effect on the date hereof with respect to any
acts or non-acts he may have committed while he was an officer, director, and/or
employee (i) of the Company or any subsidiary thereof, or (ii) at the request of
the Company, of any other entity.
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9.2 The Company agrees to maintain for Executive, during the
Term a general liability insurance policy not less favorable than any policy
that the Company maintains for similarly situated executives in general.
10. CONFIDENTIAL INFORMATION.
10.1 Executive hereby acknowledges that, in the course of his
employment by the Company, he will have access to secret and confidential
information which relates to or affects all aspects of the business and affairs
of the Company, its subsidiaries, affiliates or divisions, and which are not
available to the general public ("Confidential Information"). Without limiting
the generality of the foregoing, Confidential Information shall include
information relating to inventions, developments, specifications, technical and
engineering data, information concerning the filing or pendency of patent
applications, business ideas, trade secrets, products under development,
production methods and processes, sources of supply, marketing plans, and the
names of any customers or prospective customers or of any persons who have or
shall have traded or dealt with the Company. Accordingly, Executive agrees that,
except as required by the performance of his duties hereunder, he will not, at
any time during the Term and thereafter, disclose or furnish any Confidential
Information to any person, firm, corporation or other entity without the express
prior written consent of the Company. Notwithstanding the foregoing, the term
Confidential Information shall not include information or data which (i) is now
or hereafter in the public domain, other than as a result of the breach of this
Section 10 by Executive, (ii) prior to the date of commencement of Executive's
employment by the Company was known to Executive (iii) is, after the Date of
Termination, lawfully acquired by Executive from a third party who, to
Executive's knowledge, is not prohibited from disclosing such data or
information to Executive or (iv) is required to be disclosed by court order or
other legal process. In the event that Executive receives a request or demand to
disclose all or any part of the Confidential Information under the terms of a
subpoena or order issued by a court of competent jurisdiction or otherwise,
Executive agrees to (x) promptly notify the Company of the existence, terms and
circumstances surrounding such a request so that the Company may seek a
protective order or other appropriate relief or remedy and (y) if disclosure of
such information is required, disclose such information and, subject to
reimbursement by the Company of Executive's expenses, cooperate with the Company
in its efforts to obtain an order or other reliable assurance that confidential
treatment will be accorded to such portion of the disclosed information which
the Company so designates.
10.2 Executive hereby acknowledges and agrees that any and all
models, prototypes, notes, memoranda, notebooks, drawings, records, plans,
documents or other material in physical form which contain or embody
Confidential Information, whether created or prepared by Executive or by others
("Confidential Materials"), which are in Executive's possession or under his
control, are the sole property of the Company. Accordingly, Executive hereby
agrees that, upon the termination of his employment with the Company, whether
pursuant to this Agreement or otherwise, or at the Company's earlier request,
Executive shall return to the Company all Confidential Materials and all copies
thereof in his possession or under his control and shall not retain any copies
of Confidential Materials.
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11. NON-COMPETITION.
11.1 Executive agrees that during the Term, anywhere in the
world, and for one (1) year from the Date of Termination, in any states in the
United States or any countries outside the United States where the Company then
has done business or is actively contemplating doing business, Executive shall
not, directly or indirectly, whether as an individual on Executive's own
account, or as a shareholder, partner, joint venturer, director, officer,
employee, consultant, creditor and/or agent, of any person, firm or organization
or otherwise, directly or indirectly:
(a) engage in, carry on or have any interest in a business
competitive with the Company's businesses as such businesses are
constituted on the Date of Termination.
(b) enter into, engage in, or be employed by or consult with
any business in competition with the Company on matters competitive
with the Company's businesses as such businesses are constituted on the
Date of Termination.
(c) employ, assist in employing or otherwise associate in
business with any then current or former employee of the Company,
(d) induce any person who is a then current or former
employee, officer, agent, affiliate or customer of the Company to
terminate the relationship, and
(e) induce any customer or supplier of the Company to refuse
to do business with the Company on as favorable terms as previously
done with the Company.
11.2 Anything to the contrary herein notwithstanding, the
provisions of this Section 11 shall not be deemed violated by the purchase
and/or ownership by Executive of shares of any class of equity securities (or
options, warrants or rights to acquire such securities, or any securities
convertible into or exchangeable or exercisable for such securities) (x) of the
Company (or any successor thereto), (y) representing (together with any
securities which would be acquired upon the exercise of any such options,
warrants or rights or upon the conversion of any other security convertible into
or exchangeable or exercisable for such securities) three percent (3%) or less
of the outstanding shares of any such class of equity securities of any :issuer
whose securities are traded on a national securities exchange or listed by
NASDAQ, the National Quotation Bureau Incorporated or any similar organization;
provided, however, that Executive shall not be otherwise connected with or
active in the business of the issuers described in this Section 11.2 or (z) of
any entity which is then employing Executive.
12. REMEDY FOR BREACH. Executive hereby acknowledges that in the event
of any breach or threatened breach by him of any of the provisions of Sections
10 or 11 of this Agreement, the Company would have no adequate remedy at law and
could suffer substantial and irreparable damage. Accordingly, Executive hereby
agrees that, in such event, the Company shall be entitled, and notwithstanding
any election by the Company to claim damages, to obtain a temporary and/or
permanent injunction to restrain any such breach or threatened breach or to
obtain specific performance of any such provisions, all without prejudice to any
and all other remedies which the Company may have at law or in equity.
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13. INVENTIONS, DISCOVERIES, ETC.
(a) Executive agrees that any process, product, substance or
other item discovered or invented by Executive and all information
developed by Executive in performance of Executive's duties hereunder
shall be and shall remain the property of the Company.
(b) Executive will immediately disclose in writing to the
Company all ideas, creations, inventions, discoveries and improvements,
whether or not patentable or copyrightable and whether or not fixed in
any mode of expression or reduced to practice that Executive conceives
of during his employment with the Company, alone or with others in the
performance of Executive's duties hereunder (the "Discoveries").
Executive agrees to maintain complete records of all creative or
inventive activities and to deliver such records including, but not
limited to, all memoranda, notes, records, reports, manuals, drawings,
blueprints and any other documents or recorded items that pertain to
Executive's inventive activities during the period of this Agreement to
the Company at the termination of employment pursuant to this Agreement
or as otherwise requested by the Company,
(c) Executive agrees that all Discoveries which relate to the
actual or anticipated business of the Company or the actual or
anticipated research and development of the Company or which are
suggested by or result from any work performed by Executive in the
course of his employment, or which result from the use of Company
facilities, equipment, supplies or confidential information, are the
sole and exclusive property of the Company, and the Company shall have
the right to use such Discoveries and to obtain patent, copyright,
and/or trade secret protection or any other form of legal protection
for such Discoveries in the United States and any other country. To the
extent such Discoveries can be protected by copyright and are deemed in
any way to fall within the definition of "work made for hire" as
defined in 17 U.S.C., ss. 101, such Discoveries shall be considered to
have been produced under contract for the Company as "work made for
hire."
(d) Executive agrees to assist the Company in every way to
obtain, and from time to time to enforce, its legal rights to such
Discoveries in the United States and any other country, without
additional compensation. Executive agrees to execute at the Company's
request all assignments of rights and other documents necessary to
ensure and perfect the Company's rights in such Discoveries and to
obtain patents, copyrights and any other form of legal protection under
the laws of the United States of America and any foreign country
designated by the Company.
(e) Executive's obligations under subsection (d) above shall
continue beyond the termination of his employment with the Company.
14. NOTICES. All notices and other communications hereunder shall be in
writing and shall be deemed to have been given if delivered personally or sent
by registered or certified mail (return receipt requested), postage prepaid, or
by telecopy (immediately followed by telephone confirmation of delivery of such
telecopy with the intended recipient of such notice
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and by notice in writing sent promptly by registered or certified mail as
provided above) to the parties to this Agreement at the following addresses or
at such other address for a party as shall be specified by like notice:
To the Company: Waterlink, Inc.
000 Xxxxx Xxxxxxx Xxxxxx
Xxxxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy. (000) 000-0000
Attention: Chairman of the Board
With copies to: Xxxxxxx X. Xxxx, Esq.
Benesch, Friedlander, Xxxxxx & Aronoff LLP
0000 XX Xxxxx
000 Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
To Executive: Xxxxxxx Xxxxxxxxxx
000 Xxxxxxx Xxxxx
Xxxxxxxx, XX 00000
Telephone: (000) 000-0000
All such notices and communications shall be deemed to have been
received on the date of personal delivery, on the date that the telecopy is
confirmed as having been received or on the third business day after the mailing
thereof, as the case may be.
15. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties hereto with respect to the employment matters contemplated
herein and supersedes all prior agreements or understandings among the parties
related to such, employment matters.
16. BINDING EFFECT; THIRD PARTY BENEFICIARIES. Except as otherwise
provided herein., this Agreement shall be binding upon and inure to the benefit
of the Company and its successors and assigns and upon Executive. "Successors
and assigns" shall mean, in the case of the Company, any successor pursuant to a
merger, consolidation, or sale, or other transfer of all or substantially all of
the assets of the Company. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle
Executive to compensation from the Company in the same amount and on the same
terms as if the Company provided Executive Notice of Termination for Non
Renewal, except that for purposes of implementing the foregoing, the date on
which any such succession becomes
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effective shall be deemed the Date of Termination. As used in this Agreement,
"Company" shall mean Waterlink, Inc. and any successor to its business and/or
assets.
17. NO ASSIGNMENT. Except as contemplated by Section 16 above, this
Agreement shall not be assignable or otherwise transferable by either party.
18. AMENDMENT OR MODIFICATION; WAIVER. No provision of this Agreement
may be amended or waived unless such amendment or waiver is authorized by the
Chief Executive Officer or the Board and is agreed to in writing, signed by
Executive and by an officer of the Company thereunto duly authorized. Except as
otherwise specifically provided in this Agreement, no waiver by either party
hereto of any breach by the other party hereto of any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of a
similar or dissimilar provision or condition at the same or at any prior or
subsequent time.
19. GOVERNING LAW; ARBITRATION. The validity, interpretation,
construction, performance and enforcement of this Agreement shall be governed by
the internal laws of the State of Ohio, without regard to its conflicts of law
rules. Any controversy or claim arising out of or relating to this Agreement,
shall be settled by binding arbitration in accordance with the rules of the
American Arbitration Association, and judgment upon such award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. The
arbitration, shall be held in Canton, Ohio or such other place as may be agreed
upon at the time by the parties to the arbitration.
20. TITLES. Titles to the Sections and subsections in this Agreement
are intended solely for convenience and no provision of this Agreement is to be
construed by reference to the title of any Section.
21. COUNTERPARTS. This Agreement may be executed in one or more counter
parts, which together shall constitute one agreement. It shall not be necessary
for each party to sign each counterpart so long as each party has signed at
least one counterpart.
22. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms and
provisions of this Agreement in any other jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first set forth above.
WATERLINK, INC.
By:/s/Xxxxxx Xxxxxx
----------------
Its:Chairman
/s/Xxxxxxx Xxxxxxxxxx
---------------------
Xxxxxxx Xxxxxxxxxx
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