February 24, 1998
Xx. Xxxxxxx X. Xxxxx
c/o Environment One Corporation
0000 Xxxxxxxx Xxxx
Xxxxxxxxx, XX 00000-0000
RE: EMPLOYMENT AGREEMENT
Dear Xxxxx:
This Employment Agreement (this "Agreement") sets forth our agreement
concerning the terms of your employment by Environment One Corporation ("E/One"
or the "Company") following its acquisition by Precision Castparts Corp. ("PCC")
pursuant to an Agreement and Plan of Merger dated February 24, 1998 (the "Merger
Agreement"), to become effective on the Tender Offer Acceptance Date as defined
in the Merger Agreement (the "Effective Date").
1. EMPLOYMENT OFFER.
1.1 EMPLOYMENT.
(a) You will hold the position of CEO/President of E/One beginning on
the Effective Date and perform those duties as are generally associated with
such a position. You will report to the President of PCC Flow Technologies,
Inc., and to the Board of Directors of E/One. You also agree to perform such
acts and duties as the President of PCC Flow Technologies, Inc. or the Board of
Directors of E/One may reasonably direct, to comply with all reasonable
applicable policies and procedures of E/One and, as reasonably applicable, its
parent and affiliates, and to devote such time, energy and skill to your
assignment as the President of PCC Flow Technologies, Inc. considers reasonably
necessary for the performance of your duties, provided that you will not be
required to relocate from the Albany, New York area.
(b) Your employment with E/One will continue under this Agreement
through the date that is one (1) year from the Effective Date, unless earlier
terminated by you or E/One as expressly provided in paragraph 2.1, below. Your
employment may continue beyond the one (1) year term of this Agreement, on an
at-will basis, by mutual
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February 24, 1998
Page 2
agreement of you and E/One. Your last day of employment with E/One is referred
to herein as your Separation Date.
1.2 SALARY.
During the term of this Agreement, you will be paid a base salary at
annual rate of $150,000, payable in installments on regular Company paydays,
subject to any salary increases approved by the Board of Directors of E/One and
the President of PCC Flow Technologies, Inc. consistent with the Company's
practice of considering salary increases in April of each year.
1.3 BENEFITS.
In addition to your base compensation, you will be entitled to
participate through December 31, 1998 in the E/One bonus plan as in effect
immediately prior to the Effective Date. For the three-month period January 1,
1999 through March 28, 1999 you will be entitled to participate in a bonus
program similar to the E/One bonus program in effect for calendar year 1998,
except that bonus targets will be determined by the Company's Board of Directors
in its sole discretion and will be keyed to 1999 objectives established by the
Company's Board of Directors. You will also continue to receive the same or
comparable non-bonus employee benefits as provided by E/One to you during your
employment immediately prior to the Effective Date, provided that (i) the E/One
stock option plans will be eliminated, and (ii) the E/One Deferred Compensation
Plan will be amended to eliminate the E/One stock investment provisions and to
provide for alternate investment options. Amounts received under the bonus plan
in respect of calendar year 1998 will be eligible for deferral under the E/One
Deferred Compensation Plan, but no other future deferrals will be permitted
under that plan. You will also be eligible to participate in PCC's stock option
and stock purchase programs in accordance with the terms of those programs.
2. TERMINATION OF AGREEMENT.
2.1 TERMINATION. The term of this Agreement shall be as stated in
subparagraph 1.1(b) (the "natural expiration date"), unless terminated earlier
as follows:
(a) This Agreement may be terminated by you for any reason upon 30
days' written notice to E/One after the date that is three months after the
Effective Date.
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February 24, 1998
Page 3
(b) This Agreement shall automatically terminate in the event of your
death or disability prior to the natural expiration date. For purposes of this
Agreement, "disability" shall mean inability to perform all or substantially all
of your responsibilities for a period of more than six (6) months.
2.2 Upon termination under Paragraph 2.1, you shall be entitled to receive
your base salary through the date of termination, payment for unused vacation
accrued through the date of termination, and no other compensation.
3. CONFIDENTIALITY, NON-SOLICITATION AND NON-COMPETITION.
3.1 PRESERVATION AND NON-USE OF CONFIDENTIAL INFORMATION. You acknowledge
that you have a fiduciary duty as an officer and employee of the Company not to
discuss Confidential Information obtained during your employment with the
Company. For purposes of this Agreement, "Confidential Information" means any
and all confidential or proprietary information concerning the Company or its
affiliates, joint venturers or other related entities (the "E/One Group"), the
disclosure of which could disadvantage the E/One Group. Confidential
Information includes trade secrets as defined under the Uniform Trade Secrets
Act.
You agree not to use Confidential Information, during the term of this
Agreement or after its termination, for any personal or business purpose, either
for your own benefit or that of any other person, corporation, government or
other entity.
You also agree that you will not disclose or disseminate any Confidential
Information, directly or indirectly, at any time during the term of this
Agreement or after its termination, to any person, agency, or court unless
compelled to do so pursuant to legal process (E.G., a summons or subpoena) or
otherwise required by law and then only after providing the Company with prior
notice and a copy of the legal process.
3.2 NON-SOLICITATION AND NON-COMPETITION. You agree that you will not,
without the express written consent of the Board, for a period of one (1) year
following your Separation Date directly or indirectly (by yourself or in
conjunction with any other person, company or organization), solicit or divert
any employee, customer or vendor of the Company or any of its affiliates, joint
venturers or other related entities. You further agree that you will not,
without the express written consent of the Board of Directors, for a period of
one (1) year following your Separation Date, directly or indirectly, accept
Xx. Xxxxxxx X. Xxxxx
February 24, 1998
Page 4
employment with any person or entity involved in, or enter into any business
relationship that involves, the business of manufacturing or selling low
pressure sewage systems or grinder pumps (including, but not limited to, as a
consultant, vendor, partner, officer or director). The foregoing shall not
preclude your employment by a distributor of the Company's products in the case
of your voluntary termination of employment with the Company. You specifically
acknowledge and agree that the terms of this provision are reasonable in every
respect and, in particular, because of the competitive and specialized nature of
the Company's business, that it is reasonable not to include any geographic
limitation in this provision.
4. RETURN OF PROPERTY.
On or before your Separation Date, except as agreed to by the Company, you
will return all property belonging to E/One, including, but not limited to, all
documents, business machines, computers, computer hardware and software
programs, computer data, telephones (cellular, mobile or otherwise), pagers,
keys, card keys, credit cards and other Company-owned property.
5. ASSISTANCE IN DEFENSE OF LITIGATION OR CLAIMS.
In the event E/One requests assistance during the period of one (1) year
following your Separation Date, you agree to provide reasonable assistance in
defense of ongoing or future litigation or claims about which you have knowledge
without additional compensation. Thereafter, you agree to provide reasonable
assistance and will be paid for your assistance at an hourly rate equal to your
hourly equivalent rate of pay as of your Separation Date (for up to seven (7)
hours in one day) or per diem rate equal to eight (8) times your hourly
equivalent rate of pay as of your Separation Date (for more than seven (7) hours
in one day). You will be reimbursed for any reasonable expenses incidental to
this assistance approved in advance by the Company. The Company will reasonably
accommodate your scheduling needs.
6. RIGHT TO CONSULT WITH ATTORNEY.
You have the right to consult with an attorney or financial advisor at your
own expense regarding this Agreement.
Xx. Xxxxxxx X. Xxxxx
February 24, 1998
Page 5
7. DISPUTE RESOLUTION.
You agree that any dispute (1) concerning the interpretation or
construction of this Agreement, (2) arising from your employment with or
termination of employment from E/One, (3) relating to any compensation or
benefits you may claim, or (4) relating in any way to any claim by you for
reinstatement or reemployment by E/One after execution of this Agreement shall
be submitted to final and binding confidential arbitration. Except as
specifically provided herein, the arbitration shall be governed by the rules of
the American Arbitration Association or such other rules as agreed to by the
parties with such arbitration to occur in Albany, New York. Each party shall be
responsible for its or his own costs and attorneys' fees relating to mediation
and arbitration. Both parties agree that the procedures outlined in this
paragraph are the exclusive methods of dispute resolution.
8. ENTIRE AGREEMENT.
This Agreement contains the entire agreement between you and E/One
concerning the subject matters discussed herein. Any modification of this
Agreement shall be effective only if in writing and signed by each party or its
duly authorized representative. This Agreement supersedes all prior employment
agreements between you and E/One or any corporation affiliated with or related
to E/One. The terms of this Agreement are contractual and not mere recitals.
If for any reason any provision of this Agreement shall be held invalid in whole
or in part, such invalidity shall not affect the remainder of this Agreement.
This Agreement shall be construed in accordance with the laws of the state
of New York (without regard to the conflicts of laws provisions thereof).
Xx. Xxxxxxx X. Xxxxx
February 24, 1998
Page 6
In order to reflect your voluntary acceptance and agreement with these
terms, please sign and return the enclosed copy of this letter.
Sincerely,
Environment One Corporation
By:
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Name:
---------------------
Title:
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ACKNOWLEDGMENT AND AGREEMENT:
I have read this Employment Agreement and voluntarily enter into this Employment
Agreement after careful consideration and the opportunity to review it with
financial or legal counsel of my choice.
Date
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Xxxxxxx X. Xxxxx
