Exhibit 10.10
EMPLOYMENT AGREEMENT
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THIS AGREEMENT is made and entered into as of the 1st day of March, 2000,
by and between LYDALL, INC., a Delaware corporation (the "Company"), and Xxxxx
X. Xxxxxxx (the "Executive").
W I T N E S S E T H
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WHEREAS, the Company and the Executive (the "Parties") have agreed to enter
into this agreement (the "Agreement) relating to the employment of the Executive
by the Company and/or one of its subsidiaries;
NOW, THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the Parties,
intending to be legally bound, agree as follows:
1. Term of Employment; Termination of Prior Agreement.
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(a) The Company and/or one of its subsidiaries agrees to continue to
employ the Executive, and the Executive agrees to remain in the employment of
the Company and/or one of its subsidiaries, in accordance with the terms and
provisions of this Agreement.
(b) The Employment Period under this Agreement shall be the period
commencing as of the date of this Agreement and ending on the date of
termination of the Executive's employment pursuant to Section 5, 6 or 7 below,
whichever is applicable.
(c) Immediately upon the commencement of the Executive's employment
pursuant to the terms of this Agreement, that certain Agreement by and between
the Executive and the Company dated as of February 1, 1999 shall terminate and
shall be of no further force or effect.
2. Duties. It is the intention of the Parties that during the term of the
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Executive's employment under this Agreement, the Executive will serve as
Executive Vice President of the Company and/or Division President of a
subsidiary of the Company or in such other senior management position as the
Company shall determine. During the Employment Period, the Executive will devote
his full business time and attention and best
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efforts to the affairs of the Company and its subsidiaries and his duties as
Executive Vice President of the Company and/or Division President of a
subsidiary of the Company. The Executive will have such duties as are
appropriate to his position as Executive Vice President of the Company and/or
Division President of a subsidiary of the Company, and will have such authority
as required to enable the Executive to perform these duties. Consistent with the
foregoing, the Executive shall comply with all reasonable instructions of the
Board of Directors of the Company (the "Board").
3. Compensation and Benefits.
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3.1 Salary. During the Employment Period, the Company will pay the
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Executive a base salary at an initial annual rate of Three Hundred Fifteen
Thousand Dollars ($315,000). The Company may, in its sole and absolute
discretion, increase the Executive's base salary in light of the Executive's
performance, inflation, changes in the cost of living and other factors deemed
relevant by the Company. The Executive's base salary may not be decreased during
the term of this Agreement. The Chief Executive Officer of the Company shall
meet with the Executive annually to review the Executive's performance,
objectives and compensation, including salary, bonus and stock options, and the
Chief Executive Officer shall then meet with the Compensation and Stock Option
Committee of the Board (the "Compensation Committee") to discuss the same. If
the Compensation Committee determines that any adjustments thereto are
appropriate, such committee shall make a recommendation to the full Board and
the Board shall make such adjustments, if any, as the Board deems appropriate
and consistent with this Agreement. The Executive's base salary will be paid in
accordance with the standard practices for other corporate executives of the
Company.
3.2 Bonuses. During the Employment Period, the Executive will be eligible
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to receive annually or otherwise such bonus awards, if any, as shall be
determined by the Board in its sole and absolute discretion after receiving the
recommendation of the Compensation Committee.
3.3 Benefit Programs. During the Employment Period, the Executive will be
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entitled to participate on substantially the same terms as other senior
executives of the Company in all employee benefit plans and programs of the
Company (subject to any restrictions or eligibility requirements under such
plans and programs) from time to time in effect for the benefit of senior
executives of the Company, including, but not limited
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to, pension and other retirement plans, profit sharing plans, stock incentive
and annual incentive bonus plans, group life insurance, hospitalization and
surgical and major medical coverages (excluding the Lydall, Inc. Executive
Medical Plan), short-term and long-term disability, and such other benefits as
are or may be made available from time to time to senior executives of the
Company.
3.4 Vacations and Holidays. During the Employment Period, the Executive
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will be entitled to vacation leave of five (5) weeks per year at full pay or
such greater vacation benefits as may be provided for by the Company's vacation
policies applicable to senior executives. The Executive will be entitled to such
holidays as are established by the Company for all employees.
3.5 Automobile. During the Employment Period, the Company will provide the
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Executive with an automobile in accordance with Company policy.
4. Business Expenses. The Executive will be entitled to prompt
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reimbursement for all reasonable, documented and necessary expenses incurred by
the Executive in performing his services hereunder, provided the Executive
properly accounts therefor in accordance with the policies and procedures
established by the Company.
5. Termination of Employment by the Company.
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5.1 Involuntary Termination by the Company Other Than For Permanent and
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Total Disability or Cause. The Company may terminate the Executive's employment
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at any time other than (i) by reason of the Executive's Permanent and Total
Disability (as defined in Section 5.2) or (ii) for Cause (as defined in Section
5.3), by giving the Executive a written notice of termination at least 30 days
before the date of termination (or such lesser notice period as the Executive
may agree to). In the event of such a termination of employment pursuant to this
Section 5.1, the Executive shall be entitled to receive (i) the benefits
described in Section 8 if such termination of employment does not occur within
12 months following a "Change of Control" (as defined in Section 10), or (ii)
the benefits described in Section 9 if such termination of employment occurs
within 12 months following a "Change of Control" (as defined in Section 10).
5.2 Termination Due to Permanent and Total Disability. If the Executive
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incurs a Permanent and Total Disability,
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as defined below, the Company may terminate the Executive's employment by giving
the Executive written notice of termination at least 30 days before the date of
such termination (or such lesser notice period as the Executive may agree to).
In the event of such termination of the Executive's employment because of
Permanent and Total Disability, the Executive shall be entitled to receive (i)
his base salary pursuant to Section 3.1 through the date which is twelve months
following the date of such termination of employment, reduced by any amounts
paid to the Executive under any disability program maintained by the Company,
such base salary to be paid at the normal time for the payment of such base
salary, (ii) a bonus for the year of termination of employment and for the next
succeeding year (to be paid at the normal time for payment of such bonuses) in
an amount equal to the average of the three highest annual bonuses earned by the
Executive under the Company's annual incentive bonus plan for any of the five
calendar years preceding the calendar year of his termination of employment (or,
if the Executive was not eligible for a bonus for at least three calendar years
in such five-year period, then the average of such bonuses for all of the
calendar years in such five-year period for which the Executive was eligible),
with any deferred bonuses counting for the year earned rather than the year
paid; (iii) any other compensation and benefits to the extent actually earned by
the Executive under any other benefit plan or program of the Company as of the
date of such termination of employment, such compensation and benefits to be
paid at the normal time for payment of such compensation and benefits, and (iv)
any reimbursement amounts owing under Section 4. In addition, if the Executive
elects to continue coverage under the Company's health plan pursuant to COBRA,
the Company for a period of twelve months following termination of the
Executive's employment by reason of Permanent and Total Disability will pay the
same percentage of the Executive's premium for COBRA coverage for the Executive
and, if applicable, his spouse and dependent children, as the Company paid at
the applicable time for coverage under such plan for actively employed senior
executives generally. For the period of twelve months following the termination
of the Executive's employment by reason of Permanent and Total Disability, the
Company will continue to provide the life insurance benefits that the Company
would have provided to the Executive if the Executive had continued in
employment with the Company for such period, but only if the Executive timely
pays the portion of the premium for such coverage that senior executives of the
Company generally are required to pay for such coverage, if any. For purposes of
this Agreement, the Executive shall be considered to have incurred a Permanent
and Total Disability if and only if the Executive has
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incurred a disability entitling the Executive to disability benefits under the
Company's long-term disability plan.
5.3 Termination for Cause. The Company may terminate the Executive's
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employment immediately for Cause for any of the following reasons: (i) an act or
acts of dishonesty or fraud on the part of the Executive resulting or intended
to result directly or indirectly in substantial gain or personal enrichment to
which the Executive was not legally entitled at the expense of the Company or
any of its subsidiaries; (ii) a willful material breach by the Executive of his
duties or responsibilities under this Agreement resulting in demonstrably
material injury to the Company or any of its subsidiaries; (iii) the Executive's
conviction of a felony or any crime involving moral turpitude, (iv) habitual
neglect or insubordination (defined as refusal to execute or carry out
directions from the Board or its duly appointed designees) where the Executive
has been given written notice of the acts or omissions constituting such neglect
or insubordination and the Executive has failed to cure such conduct, where
susceptible to cure, within thirty days following such notice, or (v) a material
breach by the Executive of any of his obligations under the Lydall Employee
Agreement executed by the Executive and attached hereto as Exhibit A. The
Company shall exercise its right to terminate the Executive's employment for
Cause by giving the Executive written notice of termination specifying in
reasonable detail the circumstances constituting such Cause. In the event of
such termination of the Executive's employment for Cause, the Executive shall be
entitled to receive only (i) his base salary pursuant to Section 3.1 earned
through the date of such termination of employment plus his base salary for the
period of any vacation time earned but not taken for the year of termination of
employment, such base salary to be paid at the normal time for payment of such
base salary, (ii) any other compensation and benefits to the extent actually
earned by the Executive under any other benefit plan or program of the Company
as of the date of such termination of employment, such compensation and benefits
to be paid and at the normal time for payment of such compensation and benefits
and (iii) any reimbursement amounts owing under Section 4.
6. Termination of Employment by the Executive.
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(a) Good Reason. The Executive may terminate his employment for Good Reason
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by giving the Company a written notice of termination at least 30 days before
the date of such termination (or such lesser notice period as the Company may
agree to) specifying in reasonable detail the circumstances
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constituting such Good Reason. In the event of the Executive's termination of
his employment for Good Reason, the Executive shall be entitled to receive (i)
the benefits described in Section 8 if such termination of employment does not
occur within 12 months following a "Change of Control" (as defined in Section
10), or (ii) the benefits described in Section 9 if such termination of
employment occurs within 12 months following a "Change of Control" (as defined
in Section 10). For purposes of this Agreement, Good Reason shall mean (i) a
significant reduction in the scope of the Executive's authority, functions,
duties or responsibilities from that which is contemplated by this Agreement,
(ii) any reduction in the Executive's base salary, (iii) a significant reduction
in the employee benefits provided to the Executive (excluding the Lydall, Inc.
Executive Medical Plan) other than in connection with an across-the-board
reduction similarly affecting substantially all senior executives of the
Company, or (iv) any material breach by the Company of any provision of this
Agreement without the Executive having committed any material breach of the
Executive's obligations hereunder or under the Lydall Employee Agreement which
breach is not cured within thirty days following written notice thereof to the
Company of such breach. In addition, in the case of a termination of employment
within 12 months following a "Change of Control" (as defined in Section 10),
Good Reason shall also include the relocation of the Executive's office location
to a location more than 50 miles away from the Executive's then current
principal place of employment. If an event constituting a ground for termination
of employment for Good Reason occurs, and the Executive fails to give notice of
termination within 90 days after the occurrence of such event, the Executive
shall be deemed to have waived his right to terminate employment for Good Reason
in connection with such event (but not for any other event for which the 90-day
period has not expired).
(b) Other. The Executive may terminate his employment at any time and for
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any reason, other than pursuant to subsection (a) above, by giving the Company a
written notice of termination to that effect at least 30 days before the date of
termination (or such lesser notice period as the Company may agree to);
provided, however, that the Company following receipt of such notice from the
Executive may elect to have the Executive's employment terminate immediately
following its receipt of such notice. In the event of the Executive's
termination of his employment pursuant to this subsection (b), the Executive
shall be entitled to receive only (i) his base salary pursuant to Section 3.1
earned through the date of such termination of employment plus his base salary
for the period of va-
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cation time earned but not taken for the year of termination of employment, such
base salary to be paid at the normal time for payment of such base salary, (ii)
any other compensation and benefits to the extent actually earned by the
Executive under any other benefit plan or program of the Company as of the date
of such termination of employment, such compensation and benefits to be paid at
the normal time for payment of such compensation and benefits, and (iii) any
reimbursement amounts owing under Section 4.
7. Termination of Employment By Death. In the event of the death of the
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Executive during the course of his employment hereunder, the Executive's estate
(or other person or entity having such entitlement pursuant to the terms of the
applicable plan or program) shall be entitled to receive (i) the Executive's
base salary pursuant to Section 3.1 earned through the date of the Executive's
death plus the Executive's base salary for the period of vacation time earned
but not taken for the year of the Executive's death, such base salary to be paid
at the normal time for payment of such base salary, (ii) a bonus for the year of
the Executive's death (to be paid within 90 days after the Executive's death) in
an amount equal to a pro rata portion of the average of the three highest annual
bonuses earned by the Executive under the Company's annual incentive bonus plan
for any of the five calendar years preceding the calendar year of the
Executive's death (or, if the Executive was not eligible for a bonus for at
least three calendar years in such five-year period, then the average of such
bonuses for all of the calendar years in such five-year period for which the
Executive was eligible), with any deferred bonuses counting for the year earned
rather than the year paid and with the pro rata portion being determined by
dividing the number of days of the Executive's employment during such calendar
year up to his death by 365 (366 if a leap year), (iii) any other compensation
and benefits to the extent actually earned by the Executive under any other
benefit plan or program of the Company as of the date of such termination of
employment, such compensation and benefits to be paid at the normal time for
payment of such compensation and benefits, and (iv) any reimbursement amounts
owing under Section 4. In addition, in the event of such death, the Executive's
beneficiaries shall receive any death benefits owed to them under the Company's
employee benefit plans. If the Executive's spouse and/or dependent children
elect to continue coverage under the Company's health plan following the
Executive's death pursuant to COBRA, the Company for a period of 12 months
following the Executive's death will pay the same percentage of the premium for
COBRA
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coverage for the Executive's spouse and/or dependent children, as applicable, as
the Company would have paid in respect of the Executive's coverage under such
plan if the Executive had continued in employment with the Company for such
period.
8. Benefits Upon Termination Without Cause or For Good Reason (No Change of
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Control). If (a) the Executive's employment hereunder shall terminate (i)
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because of termination by the Company other than for Cause or Permanent and
Total Disability pursuant to Section 5.1, or (ii) because of termination by the
Employee for Good Reason pursuant to Section 6(a), and (b) such termination of
employment does not occur within 12 months following a "Change of Control" of
the Company (as defined in Section 10), the Executive shall be entitled to the
following:
(a) The Company shall pay to the Executive his base salary pursuant to
Section 3.1 earned through the date of such termination of employment and
any other compensation and benefits to the extent actually earned by the
Executive under any benefit plan or program of the Company as of the date
of such termination of employment, such base salary, compensation and
benefits to be paid at the normal time for payment of such base salary,
compensation and benefits.
(b) The Company shall pay the Executive any reimbursement amounts
owing under Section 4.
(c) The Company shall pay to the Executive in equal installments
spread over the period of 12 months beginning on the date of the
Executive's termination of employment an amount equal in the aggregate to
the sum of (i) the Executive's annual rate of base salary immediately
preceding his termination of employment, and (ii) the average of his annual
bonuses earned under the Company's annual incentive bonus plan for the
three calendar years preceding his termination of employment (or, if the
Executive was not eligible for a bonus in each of those three calendar
years, then the average of such bonuses for all of the calendar years in
such three-year period for which he was eligible), with any deferred
bonuses counting for the year earned rather than the year paid. Such
installments shall be paid at the times that salary payments are normally
made by the Company.
(d) If the Executive elects to continue coverage under the Company's
health plan pursuant to COBRA, then for
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the period beginning on the date of the Executive's termination of
employment and ending on the earlier of (i) the date which is 12 months
after the date of such termination of employment or (ii) the date on which
the Executive commences substantially full-time employment as an employee
of an employer that offers health benefits, the Company will pay the same
percentage of the Executive's premium for COBRA coverage for the Executive
and, if applicable, his spouse and dependent children, as the Company paid
at the applicable time for coverage under such plan for actively employed
senior executives generally. In addition, for the period beginning on the
date of the Executive's termination of employment and ending on the earlier
of (i) the date which is 12 months after the date of such termination of
employment or (ii) the date on which the Executive commences substantially
full-time employment as an employee of an employer that offers life
insurance benefits, the Company will continue to provide the life insurance
benefits that the Company would have provided to the Executive if the
Executive had continued in employment with the Company for such period, but
only if the Executive timely pays the portion of the premium for such
coverage that senior executives of the Company generally are required to
pay for such coverage, if any. The Executive shall notify the Company
promptly if he, while eligible for benefits under this subsection (d),
commences substantially full-time employment as an employee of an employer
that offers health and/or life insurance benefits.
(e) The Company will provide the Executive with outplacement services
selected by the Executive, at the Company's expense not to exceed $10,000.
9. Benefits Upon Termination Without Cause or For Good Reason (Change
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of Control). If (a) the Executive's employment hereunder shall terminate (i)
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because of termination by the Company other than for Cause or Permanent and
Total Disability pursuant to Section 5.1, or (ii) because of termination by the
Employee for Good Reason pursuant to Section 6(a), and (b) such termination of
employment occurs within 12 months following a "Change of Control" of the
Company (as defined in Section 10), the Executive shall be entitled to the
following:
(a) The Company shall pay to the Executive his base salary pursuant to
Section 3.1 earned through the date of such termination of employment and
any other compensation and benefits to the extent actually earned by the
Executive under any benefit plan or program of the Company as
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of the date of such termination of employment, such base salary,
compensation and benefits to be paid at the normal time for payment of such
base salary, compensation and benefits.
(b) The Company shall pay the Executive any reimbursement amounts
owing under Section 4.
(c) The Company shall pay to the Executive as a severance benefit an
amount equal to two (2) times the sum of (i) his annual rate of base salary
immediately preceding his termination of employment, and (ii) the average
of his three highest annual bonuses earned under the Company's annual
incentive bonus plan for any of the five calendar years preceding his
termination of employment (or, if the Executive was not eligible for a
bonus for at least three calendar years in such five-year period, then the
average of such bonuses for all of the calendar years in such five-year
period for which the Executive was eligible), with any deferred bonuses
counting for the year earned rather than the year paid. Such severance
benefit shall be paid in a lump sum within 30 days after the date of such
termination of employment.
(d) The Company shall pay to the Executive as a bonus for the year of
termination of his employment an amount equal to a portion (determined as
provided in the next sentence) of the Executive's maximum bonus opportunity
under the Company's annual incentive bonus plan for the calendar year of
termination of the Executive's employment or, if none, such portion of the
bonus awarded to the Executive under the Company's annual incentive bonus
plan for the calendar year immediately preceding the calendar year of the
termination of his employment, with deferred bonuses counting for the year
earned rather than the year paid. Such portion shall be determined by
dividing the number of days of the Executive's employment during such
calendar year up to his termination of employment by 365 (366 if a leap
year). Such payment shall be made in a lump sum within 30 days after the
date of such termination of employment, and the Executive shall have no
right to any further bonuses under said plan.
(e) During the period of 24 months beginning on the date of the
Executive's termination of employment, the Executive (and, if applicable,
the Executive's spouse and dependent children) shall remain covered by the
medical, dental, life insurance, and, if reasonably commercially
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available through nationally reputable insurance carriers, long-term
disability plans of the Company that covered the Executive immediately
prior to his termination of employment as if the Executive had remained in
employment for such period; provided, however, that the coverage under any
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such plan is conditioned on the timely payment by the Executive (or his
spouse or dependent children) of the portion of the premium for such
coverage that actively employed senior executives with the Company
generally are required to pay for such coverage. In the event that the
Executive's participation in any such plan is barred, the Company shall
arrange to provide the Executive (and, if applicable, his spouse and
dependent children) with substantially similar benefits (but, in the case
of long-term disability benefits, only if reasonably commercially
available).
(f) The Company shall supplement the benefits payable in respect of
the Executive under the Company's Pension Plan and Supplemental Executive
Retirement Plan (and any successor plans thereto) (collectively, the
"Pension Plans") by paying the difference between (i) the benefits that the
Executive would have been entitled to receive under the Pension Plans if he
had been credited with two additional years of service (but no additional
years of age) for purposes of the benefit accrual formula under the Pension
Plans as of the date of termination of the Executive's employment and (ii)
the benefits that the Executive is entitled to receive under the Pension
Plans determined without regard to this subsection (f). Such benefits shall
be payable in the same form and at the same time as the benefits under the
respective Pension Plans.
(g) Each stock option granted by the Company to the Executive and
outstanding immediately prior to termination of his employment shall be
fully vested and immediately exercisable and may be exercised by the
Executive (or, following his death, by the person or entity to which such
option passes) at any time prior to the expiration date of the applicable
option (determined without regard to any earlier termination of the option
that would otherwise occur by reason of termination of his employment).
Each restricted stock award granted by the Company to the Executive and
outstanding immediately prior to termination of the Executive's employment
shall be fully vested upon such termination of employment.
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(h) The Company will pay the Executive a car allowance of $500 per
month for 24 months following termination of the Executive's employment to
replace the Company-leased automobile, which leased automobile will be
returned to the Company by the Executive on the date of termination of the
Executive's employment.
(i) The Company will provide the Executive with out-placement services
selected by the Executive, at the Company's expense not to exceed $10,000.
(j) The Company shall promptly pay all reasonable attorneys' fees and
related expenses incurred by the Executive in seeking to obtain or enforce
any right or benefit under this Agreement or to defend against any claim or
assertion in connection with this Agreement, but only to the extent the
Executive substantially prevails.
10. Change of Control. For the purposes of this Agreement, a "Change
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of Control" shall be deemed to have occurred if (a) any person or persons acting
together which would constitute a "group" for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (other than
the Company or any subsidiary of the Company) shall beneficially own (as defined
in Rule 13d-3 of the Exchange Act), directly or indirectly, at least 25% of the
total voting power of all classes of capital stock of the Company entitled to
vote generally in the election of the Board; (b) Current Directors (as herein
defined) shall cease for any reason to constitute at least a majority of the
members of the Board (for this purpose, a "Current Director" shall mean any
member of the Board as of the date hereof and any successor of a Current
Director whose election, or nomination for election by the Company's
shareholders, was approved by at least a majority of the Current Directors then
on the Board); (c) the shareholders of the Company approve (i) a plan of
complete liquidation of the Company or (ii) an agreement providing for the
merger or consolidation of the Company other than a merger or consolidation in
which (x) the holders of the common stock of the Company immediately prior to
the consolidation or merger have, directly or indirectly, at least a majority of
the common stock of the continuing or surviving corporation immediately after
such consolidation or merger or (y) the Board immediately prior to the merger or
consolidation would, immediately after the merger or consolidation, constitute a
majority of the board of directors of the continuing or surviving corporation;
or (d) the shareholders of the Company approve an agreement (or agreements)
providing for the sale or other disposition (in one transaction
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or a series of transactions) of all or substantially all of the assets of the
Company.
11. Golden Parachute Excise Tax.
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(a) In the event that any payment or benefit received or to be
received by the Executive pursuant to this Agreement or any other plan,
program or arrangement of the Company or any of its affiliates would
constitute an "excess parachute payment" within the meaning of Section 280G
of the Internal Revenue Code of 1986, as amended (the "Code"), then the
payments under this Agreement shall be reduced (by the minimum possible
amounts) until no amount payable to the Executive under this Agreement
constitutes an "excess parachute payment" within the meaning of Section
280G of the Code; provided, however, that no such reduction shall be made
if the net after-tax payment (after taking into account Federal, state,
local or other income and excise taxes) to which the Executive would
otherwise be entitled without such reduction would be greater than the net
after-tax payment (after taking into account Federal, state, local or other
income and excise taxes) to the Executive resulting from the receipt of
such payments with such reduction. If, as a result of subsequent events or
conditions (including a subsequent payment or absence of a subsequent
payment under this Agreement or other plan, program or arrangement of the
Company or any of its affiliates), it is determined that payments under
this Agreement have been reduced by more than the minimum amount required
to prevent any payments from constituting an "excess parachute payment",
then an additional payment shall be promptly made to the Executive in an
amount equal to the additional amount that can be paid without causing any
payment to constitute an excess parachute payment.
(b) All determinations required to be made under this Section 11 shall
be made by a nationally recognized independent accounting firm mutually
agreeable to the Company and the Executive (the "Accounting Firm") which
shall provide detailed supporting calculations to the Company and the
Executive as requested by the Company or the Executive. All fees and
expenses of the Accounting Firm shall be borne solely by the Company and
shall be paid by the Company upon demand of the Executive as incurred or
billed by the Accounting Firm. All determinations made by the Accounting
Firm pursuant to this Section 11 shall be final and binding upon the
Company and the Executive.
(c) To the extent any payment or benefit is to be reduced pursuant to
this Section 11, the severance payment de-
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scribed in Section 8(c) or 9(c) will first be reduced, then the bonus
described in Section 9(d), and then the supplemental pension benefits
described in Section 9(f), in each case only to the extent necessary.
12. Entitlement to Other Benefits. Except as otherwise provided in
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this Agreement, this Agreement shall not be construed as limiting in any way any
rights or benefits that the Executive or his spouse, dependents or beneficiaries
may have pursuant to any other plan or program of the Company.
13. Indemnification. The parties agree to execute a separate
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Indemnification Agreement in the form attached as Exhibit B.
14. General Provisions.
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14.1 No Duty to Seek Employment. The Executive shall not be under any
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duty or obligation to seek or accept other employment following termination
of employment, and no amount, payment or benefits due to the Executive
hereunder shall be reduced or suspended if the Executive accepts subsequent
employment, except as expressly set forth herein.
14.2 Deductions and Withholding. All amounts payable or which become
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payable under any provision of this Agreement shall be subject to any
deductions authorized by the Executive and any deductions and withholdings
required by law.
14.3 Notices. All notices, demands, requests, consents, approvals or
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other communications (collectively "Notices") required or permitted to be
given hereunder or which are given with respect to this Agreement shall be
in writing and may be personally served or may be faxed with a copy
deposited in the United States mail, registered or certified, return
receipt requested, postage prepaid, addressed as follows:
To the Company: Lydall, Inc.
X.X. Xxx 000
Xxx Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Chief Executive Officer
To the Executive: Xxxxx X. Xxxxxxx
00 Xxxxxxxxx Xxxxx
Xxxxx Xxxxxxx, XX 00000
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or such other address as such party shall have specified most recently by
written notice. Notice mailed as provided herein shall be deemed given on
the fifth business day following the date so mailed or on the date of
actual receipt, whichever is earlier.
14.4 No Disparagement. The Executive shall not during the period of
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his employment with the Company, nor during the two-year period beginning
on the date of termination of his employment for any reason, disparage the
Company or any of its subsidiaries or affiliates or any of their
shareholders, directors, officers, employees or agents. The Executive
agrees that the terms of this Section 14.4 shall survive the term of this
Agreement and the termination of the Executive's employment.
14.5 Proprietary Information and Inventions. The Lydall Employee
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Agreement previously executed by the Executive and attached hereto as
Exhibit A is incorporated by reference in this Agreement, and the Executive
agrees to continue to be bound thereby.
14.6 Covenant to Notify Management. The Executive agrees to abide by
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the ethics policies of the Company as well as the Company's other rules,
regulations, policies and procedures. The Executive agrees to comply in
full with all governmental laws and regulations as well as ethics codes
applicable. In the event that the Executive is aware or suspects the
Company, or any of its officers or agents, of violating any such laws,
ethics, codes, rules, regulations, policies or procedures, the Executive
agrees to bring all such actual and suspected violations to the attention
of the Company immediately so that the matter may be properly investigated
and appropriate action taken. The Executive understands that the Executive
is precluded from filing a complaint with any governmental agency or court
having jurisdiction over wrongful conduct unless the Executive has first
notified the Company of the facts and permits it to investigate and correct
the concerns.
14.7 Amendments and Waivers. No provision of this Agreement may be
----------------------
modified, waived or discharged unless such waiver, modification or
discharge is agreed to in writing signed by the Executive and the Company.
No waiver by either Party hereto at any time of any breach by the other
Party hereto of, or compliance with, any condition or provision of this
Agreement to be performed by such other Party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same or at any prior
or subsequent time.
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14.8 Beneficial Interests. This Agreement shall inure to the benefit
--------------------
of and be enforceable by a) the Company's successors and assigns and b) the
Executive's personal and legal representatives, executors, administrators,
successors, heirs, distributees, devisees and legatees. If the Executive
shall die while any amounts are still payable to him hereunder, all such
amounts, unless otherwise provided herein, shall be paid in accordance with
the terms of this Agreement to the Executive's devisee, legatee, or other
designee or, if there be no such designee, to the Executive's estate.
14.9 Successors. The Company will require any successors (whether
----------
direct or indirect, by purchase, merger, consolidation or otherwise) to all
or substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the
same extent that the Company would be required to perform.
14.10 Assignment. This Agreement and the rights, duties, and
----------
obligations hereunder may not be assigned or delegated by any Party without
the prior written consent of the other Party and any attempted assignment
or delegation without such prior written consent shall be void and be of no
effect. Notwithstanding the foregoing provisions of this Section 14.10, the
Company may assign or delegate its rights, duties and obligations hereunder
to any affiliate or to any person or entity which succeeds to all or
substantially all of the business of the Company or one of its subsidiaries
through merger, consolation, reorganization, or other business combination
or by acquisition of all or substantially all of the assets of the Company
or one of its subsidiaries.
14.11 Choice of Law. This Agreement shall be governed by and construed
-------------
in accordance with the laws of the State of Connecticut.
14.12 Statute of Limitations. The Executive and the Company hereby
----------------------
agree that there shall be a one year statute of limitations for the filing
of any requests for arbitration or any lawsuit relating to this Agreement
or the terms or conditions of Executive's employment by the Company. If
such a claim is filed more than one year subsequent to the Executive's last
day of employment it shall be precluded by this provision, regardless of
whether or not the claim has accrued at that time.
14.13 Right to Injunctive and Equitable Relief. The Executive's
----------------------------------------
obligations under Section 14.4 are of a special
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and unique character, which gives them a peculiar value. The Company cannot
be reasonably or adequately compensated for damages in an action at law in
the event the Executive breaches such obligations. Therefore, the Executive
expressly agrees that the Company shall be entitled to injunctive and other
equitable relief without bond or other security in the event of such breach
in addition to any other rights or remedies which the Company may possess
or be entitled to pursue. Furthermore, the obligations of the Executive and
the rights and remedies of the Company under Section 14.4 and this Section
14.13 are cumulative and in addition to, and not in lieu of, any
obligations, rights, or remedies as created by applicable law.
14.14 Severability or Partial Invalidity. The invalidity or
----------------------------------
unenforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.
14.15 Entire Agreement. This Agreement, along with the Lydall Employee
----------------
Agreement and the Indemnification Agreement by and between the Executive
and the Company, constitutes the entire agreement of the Parties and
supersedes all prior written or oral and all contemporaneous oral
agreements, understandings, and negotiations between the Parties with
respect to the subject matter hereof. This Agreement may not be changed
orally and may only be modified in writing signed by both Parties. This
Agreement, along with the Lydall Employee Agreement and the Indemnification
Agreement, is intended by the Parties as the final expression of their
agreement with respect to such terms as are included herein and therein and
may not be contradicted by evidence of any prior or contemporaneous
agreement. The Parties further intend that this Agreement, along with the
Lydall Employee Agreement and the Indemnification Agreement, constitutes
the complete and exclusive statement of their terms and that no extrinsic
evidence may be introduced in any judicial proceeding involving such
agreements.
14.16 Counterparts. This Agreement may be executed in any number of
------------
counterparts, each of which when so executed shall be deemed an original
but all of which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Company has caused this Agreement to
be executed by its duly authorized officer and the Employee has hereunto set his
hand as of the day and year first above written.
LYDALL, INC.
By:
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Xxxxxxxxxxx X. Xxxxxxxxxxx Date
President and Chief
Executive Officer
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Xxxxx X. Xxxxxxx Date
