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EXHIBIT 10.10
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), dated as of April 22, 1997 between
Xxxx X. Xxxxxxx, an individual with a residence address of 00 Xxxxxxxxx Xxxx,
Xxxxxx 0 Xxxxxxx (the "Employee") and AMTROL Management International Inc., a
Rhode Island corporation with a principal place of business at 0000 Xxxxxxxx
Xxxx, Xxxx Xxxxxxx, Xxxxx Xxxxxx 00000 (the "Company").
WHEREAS, the Company desires to assure itself of the benefit of the
Employee's services and experience for a period of time in order to fulfill its
obligations under that certain Executive Management Agreement of even date by
and between AMTROL Inc. ("AMTROL") and the Company (the "Management Agreement"),
and the Employee is willing to enter into an agreement to that end upon the
terms and conditions herein set forth.
NOW, THEREFORE, in consideration of the premises and covenants herein
contained, the parties hereto agree as follows:
1. TERM OF AGREEMENT. Subject to the terms and conditions hereof, the term
of this Agreement shall commence on the date hereof and, subject to earlier
termination by the Employee or the Company as hereinafter provided, shall
continue for a period of two (2) years beginning on the first day of each month
after the date hereof. Such term of employment is hereinafter referred to as the
"Employment Period."
2. SERVICES TO BE RENDERED.
(a) During the Employment Period, the Employee shall serve the
Company as its Chairman, President and Chief Executive Officer and consistent
with the Company's obligations under the Management Agreement, shall serve as
the Chairman, President and Chief Executive Officer of AMTROL.
(b) The Employee agrees that he will, during the Employment Period,
devote substantially all of his business time and attention and his full ability
to the business of the Company and the fulfillment of the Company's obligations
to AMTROL under the Management
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Agreement as the Chairman, President and Chief Executive Officer of the Company
and AMTROL and shall well and faithfully serve the Company and AMTROL and its
subsidiaries and shall exercise the powers and authorities and fulfill the
responsibilities hereby conferred upon him honestly, diligently, in good faith
and in the best interest of the Company and AMTROL and its subsidiaries and use
his best efforts to promote their interests. The Employee may, however, serve as
an outside director of any other corporation provided Employee obtains the prior
written consent of the Company and the Board of Directors of AMTROL, which shall
not be unreasonably withheld.
3. COMPENSATION.
(a) In full payment for services rendered to the Company under this
Agreement, the Company shall pay the Employee a salary of $440,000 per year
during the first year of the Employment Period ("Base Salary"), payable in equal
monthly installments. The Compensation Committee of the Board of Directors of
the Company or in the absence of a Compensation Committee, the full Board of
Directors of the Company shall determine the salary to be paid to the Employee
during subsequent years of the Employment Period.
(b) In addition to the compensation otherwise provided for in this
Section 3, during the Employment Period, the Employee also shall be entitled to:
(i) participate in the Company's and AMTROL's stock option plans, in accordance
with the terms thereof, as from time to time may be in effect; (ii) by
resolution of the Compensation Committee, participate in the Company's and
AMTROL's incentive compensation plans, in accordance with the terms thereof, as
from time to time may be in effect; (iii) participate in the Company's and
AMTROL's retirement plans, in accordance with the terms thereof, as from time to
time may be in effect or in some similar plan at the same or less cost to the
Company; and (iv) participate in such group life, disability, accident, hospital
and medical insurance plans ("Welfare Plans") in accordance with the terms
thereof, as from time to time may be in effect; provided, that any such
participation is generally appropriate to Employee's responsibilities hereunder;
and provided, further, that benefits and terms of participation under the
Welfare Plans may be changed by the Company from time to time in its sole
discretion. To the extent stock options are to be granted in
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accordance with a Company or AMTROL stock option plan for the Company fiscal
year ending within the year Employee's employment with the Company terminates,
Employee shall be entitled to such options in accordance with the plan's terms.
(c) The Employee shall be entitled, during the Employment Period, to
vacations and fringe benefits consistent with the policies and practices of the
Company, which shall be the same as the policies and practices of AMTROL.
(d) The Company shall provide the Employee, during the Employment
Period, with the use of a Company-owned or leased automobile, and will pay all
taxes and insurance on said vehicle, or will pay an allowance, grossed-up for
any income tax on a formula consistent with the X.X. Xxxxxxx Corporation plan.
4. DISABILITY, DEATH AND TERMINATION.
(a) In the event of the Employee's inability to perform the
principal duties of his job at the Company due to physical or mental condition,
as determined by a physician ("Permanent Incapacitating Disability") for any
consecutive period of at least six (6) months with or without accommodation, the
Company may, at its election, terminate the Employee's employment hereunder. The
date of Permanent Incapacitating Disability shall be on the last day of such
period. In the event of any such termination, the Company shall be obligated (i)
for compensation earned by the Employee hereunder, but not yet paid, prior to
such termination, and (ii) to pay the Employee each month, for twenty-four (24)
consecutive months, an amount equal to the monthly Termination Benefit (the
"Disability Benefit"); provided, however, that the amount of the Disability
Benefit shall be reduced by any amounts received by the Employee in respect of
the Employee's disability from any employee benefit or disability plans
maintained by the Company (including any plans maintained by AMTROL in which the
Employee participates as an Employee of the Company or, pursuant to the
Management Agreement, as an officer of AMTROL).
(b) Except as provided in this Section 4(b), the obligations of the
Company under this Agreement shall terminate upon the death of the Employee. In
the event of the Employee's death during the term of this Agreement, the Company
shall be obligated (i) for
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compensation earned by the Employee hereunder, but not yet paid, prior to the
Employee's death, and (ii) to pay the Employee's estate each month, for
twenty-four (24) consecutive months, an amount equal to the monthly Termination
Benefit (the "Death Benefit"); provided, however, that the amount of the Death
Benefit shall be reduced by any amounts payable to the Employee's estate or
heirs in respect of the Employee's death from any insurance or plan maintained
by the Company which provides a death benefit to the Employee (including any
such insurance or plans maintained by AMTROL in which the Employee participates
as an Employee of the Company or, pursuant to the Management Agreement, as an
officer of AMTROL).
(c) The Employee may terminate this Agreement at any time by
providing written notice to the Company. In the event that (i) the Employee
voluntarily terminates employment with the Company without Good Reason, or (ii)
the Company terminates the Employee's employment for Cause, the Company's
obligations hereunder shall terminate and no further payments of any kind (other
than in respect of compensation earned by the Employee as determined hereunder
prior to such termination) shall thereafter be made by the Company to the
Employee hereunder.
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"Cause" as used within this Agreement means:
(i) any act or acts of the Employee constituting a felony (or its
equivalent) under the laws of the United States, any state thereof or any
foreign jurisdiction;
(ii) any material breach by the Employee of any employment agreement
with the Company or the policies of the Company or AMTROL or any of its
subsidiaries or the willful and persistent (after written notice to the
Employee) failure or refusal of the Employee to perform his duties of
employment or comply with any lawful directives of the Board of Directors
of the Company;
(iii) a course of conduct amounting to gross neglect, willful
misconduct or dishonesty; or
(iv) any misappropriation of material property of the Company by the
Employee or any misappropriation of a corporate or business opportunity of
the Company or its affiliates by the Employee.
"Good Reason" as used within this Agreement means:
(i) any material reduction by the Company of such Employee's duties,
responsibilities or titles;
(ii) any involuntary removal of such Employee from any position
previously held (except in connection with a promotion or a termination
for Cause, death or disability, or the voluntary termination by the
Employee other than for Good Reason);
(iii) within six months after a Change in Control; or
(iv) such other reasons (including non-employment-related reasons)
as may be approved by the Company, in its sole discretion, from time to
time.
provided, however, that a Good Reason shall not be deemed to have
occurred under clause (i) or (ii) unless the Employee notifies the Company
that he believes one of such events has occurred within 60 days after he
has knowledge of it and if it has, the Company shall not have cured it
within 60 days of receipt of such notice.
(d) The Company may terminate Employee's employment at any time
without Cause by providing written notice to the Employee. If the Company
terminates the Employee's employment without Cause or if the Employee
voluntarily terminates employment with the Company for Good Reason, the Company
shall:
(1) pay the Employee a monthly amount, for twenty-four (24)
consecutive months after termination, equal to one twelfth of the
Employee's
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annual average salary as computed by the Company for the prior
twenty-four (24) consecutive months, or if the Employee has not been
employed for twenty-four (24) consecutive months, for the number of
consecutive months employed, preceding the date of termination (the
"Termination Benefit") until the Termination Benefit is paid in
full;
(2) pay, on the date otherwise due and payable, the pro-rata
portion of any bonus or incentive compensation otherwise payable to
the Employee without regard to his termination with respect to the
fiscal period in which such termination occurs; and
(3) provide Employee with benefits in accordance with Section
3(b) (iv) and Section 3(d) for a period of twenty-four (24)
consecutive months after termination.
5. CONFIDENTIALITY. For purposes of this Agreement, "proprietary
information" shall mean any information relating to the business of the Company
or AMTROL or any of its subsidiaries that has not previously been publicly
released by duly authorized representatives of the Company or AMTROL and shall
include (but shall not be limited to) AMTROL information encompassed in all
research, product development, designs, plans, formulations and formulating
techniques, proposals, marketing and sales plans, financial information, costs,
pricing information, strategic business plans, customer information, and all
methods, concepts, or ideas in or reasonably related to the business of AMTROL.
The Employee agrees to regard and preserve as confidential all proprietary
information pertaining to AMTROL's business that has been or may be obtained by
the Employee in the course of his employment with the Company or its provision
of services under the Management Agreement, whether he has such information in
his memory or in writing or other physical form. The Employee will not, without
prior written authority from the Company to do so, use for his benefit or
purposes, or disclose to any other person, firm, partnership, corporation or
other entity, either during the term of his employment hereunder or thereafter,
any proprietary information connected with the business or developments of the
Company or AMTROL, except as required in connection with the performance by the
Employee of his duties and responsibilities as an employee of the Company. This
provision shall not apply after the proprietary information has been voluntarily
disclosed to the public, independently developed and disclosed by others, or
otherwise enters the public domain through lawful means.
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6. REMOVAL OF DOCUMENTS OR OBJECTS. The Employee agrees not to remove from
the premises of the Company or AMTROL, except as an employee of the Company in
pursuit of the business of the Company or AMTROL or any of its subsidiaries, or
except as specifically permitted in writing by the Company, any document
(regardless of the medium on which it is recorded), object, computer program,
computer source code, object code or data (the "Documents") containing or
reflecting any proprietary information of the Company or AMTROL. The Employee
recognizes that all such Documents, whether developed by him or by someone else,
are the exclusive property of the Company or AMTROL, as the case may be.
7. NON-COMPETITION. The Employee agrees that during the Employment Period
and for a period of two (2) years after such Employment Period terminates or is
terminated, he will not in any way, directly or indirectly, manage, operate,
control, solicit officers or employees of AMTROL, accept employment, a
directorship or a consulting position with or otherwise advise or assist or be
connected with or own or have any other interest in or right with respect to
(other than through ownership of not more than one percent (1%) of the
outstanding shares of a corporation's stock which is listed on a national
securities exchange) any enterprise which competes or shall compete with AMTROL,
by engaging in or otherwise carrying on the research, development, manufacture
or sale of any product of any type developed, manufactured or sold by AMTROL or
any subsidiary thereof, whether now or hereafter (to the extent that any such
product is under consideration by the Board of Directors of AMTROL at the time
the Employee's employment terminates or is terminated).
8. CORPORATE OPPORTUNITIES. The Employee agrees that during the Employment
Period he will not take any action which might divert from AMTROL or any
subsidiary of AMTROL any opportunity which would be within the scope of any of
the present or future businesses of AMTROL or any of its subsidiaries (which
future businesses are then under consideration by the Board of Directors of
AMTROL), the loss of which has or would have had, in the reasonable judgment of
the Board of Directors of AMTROL, an adverse effect upon AMTROL, unless the
Board of Directors of AMTROL has given prior written approval.
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9. RELIEF. It is understood and agreed by and between the parties hereto
that the service to be rendered by the Employee hereunder, and the rights and
privileges granted to the Company by the Employee hereunder, are of a special,
unique, extraordinary and intellectual character, which gives them a peculiar
value, the loss of which cannot be reasonably or adequately compensated in
damages in any action at law, and that a breach by the Employee of any of the
provisions contained in this Agreement will cause the Company great irreparable
injury and damage.
The Employee hereby expressly agrees that the Company shall be entitled to
the remedies of injunction, specific performance and other equitable relief to
prevent a breach of this Agreement by the Employee. The Employee further
expressly agrees that in the event the Employee breaches the non-competition
provisions of Section 7 of this Agreement or the confidentiality provisions of
Section 5 of this Agreement, the balance of any payments due under this
Agreement shall be forfeited by the Employee. The provisions of this Section 9
shall not, however, be construed as a waiver of any of the rights which the
Company may have for damages or otherwise.
10. WARRANTY. The Employee hereby warrants that he is free to enter into
this Agreement and to render his services pursuant hereto.
11. NON-ASSIGNABILITY. Except as otherwise provided herein, this Agreement
may not be assigned by either the Company or the Employee, except that Employee
may assign his rights to receive compensation or other payments hereunder to a
financial institution as collateral for a loan incurred to purchase stock of
AMTROL or AMTROL Holdings, Inc..
12. MERGER OR CONSOLIDATION. In the event of a "Change of Control" (as
such term is defined in the Indenture dated as of November 1, 1996 between
AMTROL Acquisition, Inc. and the Bank of New York, as Trustee, as amended by the
First Supplemental Indenture date November 13, 1996), this Agreement may be
assigned and transferred to such successor in interest as an asset of the
Company upon such assignee assuming the Company's obligations hereunder, in
which event the Employee agrees to continue to perform his duties and
obligations
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according to the terms and conditions hereof for such assignee or transferee of
this Agreement subject to Employee's right to terminate for Good Reason in
accordance with Section 4(c)(iii).
13. WITHHOLDING. The Company shall have the right to withhold the amount
of taxes, which in the determination of the Company, are required to be withheld
under law with respect to any amount due or paid under this Agreement.
14. NOTICES. All notices and other communications which are required or
may be given under this Agreement 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:
(a) If to the Company,
AMTROL Management International Inc.
0000 Xxxxxxxx Xxxx
Xxxx Xxxxxxx, Xxxxx Xxxxxx 00000
Attention: President
With a copy to:
Xxxxxxxx, Xxxxx & Xxxxxx
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
(b) If to the Employee, to him at such address as set forth on the
title page hereof or as he shall otherwise have specified by notice in writing
to the Company.
15. GOVERNMENTAL REGULATION. Nothing contained in this Agreement shall be
construed so as to require the commission of any act contrary to law and
wherever there is any conflict between any provision of this Agreement and any
statute, law, ordinance, order or regulation, the latter shall prevail, but in
such event any such provision of this Agreement shall be curtailed and limited
only to the extent necessary to bring it within the legal requirements.
16. GOVERNING LAW; JURISDICTION. This Agreement shall be governed by and
construed in accordance with the laws of the State of Rhode Island. Any suit,
action or proceeding against the Employee with respect to this Agreement, or any
judgment entered by any
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court in respect of any thereof, may be brought in any court of competent
jurisdiction in the State of Rhode Island and the Employee hereby submits to the
exclusive jurisdiction of such courts for the purpose of any such suit, action,
proceeding or judgment. The Employee hereby irrevocably waives any objections
which he may now or hereafter have to the laying of the venue of any suit,
action or proceeding arising out of or relating to this Agreement brought in any
court of competent jurisdiction in the State of Rhode Island and hereby further
irrevocably waives any claim that any such suit, action or proceeding brought in
any such court has been brought in any inconvenient forum. No suit, action or
proceeding against the Company with respect to this Agreement may be brought in
any court, domestic or foreign, or before any similar domestic or foreign
authority other than in a court of competent jurisdiction in the State of Rhode
Island, and the Employee hereby irrevocably waives any right which he may
otherwise have had to bring such an action in any other court, domestic or
foreign, or before any similar domestic or foreign authority. The Company hereby
submits to the jurisdiction of such courts for the purpose of any such suit,
action or proceeding. The Employee irrevocably waives his right to trial by jury
with regard to any suit, action, or proceeding with respect to this Agreement;
provided, however, that if such waiver of the right to jury trial shall be held
unenforceable, the invalidity or unenforceability of this provision shall not
impair the validity or enforceability of any other provision of this Agreement.
17. ENTIRE AGREEMENT. This Agreement sets forth the entire understanding
of the parties in respect of the subject matter contained herein and supersedes
all prior agreements, arrangements and understandings relating to the subject
matter, but specifically excluding that certain Management Stockholder's
Agreement by and between AMTROL Holdings, Inc. and the Employee dated November
13, 1996.
18. AMENDMENT. This Agreement may not be modified or amended or any term
or provision waived or discharged except in writing, signed by both parties
hereto or their duly authorized representatives.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of
the date first above written.
Employee: Company:
AMTROL MANAGEMENT
---------------------------------- INTERNATIONAL INC.
By: XXXXX X. XXXXXXXX
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Title: DIRECTOR
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