Exhibit 10.29
RETIREMENT AGREEMENT AND RELEASE
THIS RETIREMENT AGREEMENT AND RELEASE ("Agreement") is made and entered
into by and between Xxxxxxx X. Xxxxxx ("Xxxxxx") and Pentair, Inc. ("Pentair").
1. Consideration. In consideration for the mutual promises and the
payments to Xxxxxx set forth herein, Xxxxxx acknowledges the full, complete, and
final settlement of any and all claims, actions, causes of action or costs,
including attorneys' fees, against Pentair and the members of the controlled
group of companies which includes Pentair (collectively, the "Group").
2. Retirement. Xxxxxx has retired as Chief Executive Officer of Pentair
effective as of January 1, 2001, and from full-time employment with Pentair, and
from such other offices or memberships as are listed on Schedule A effective as
of April 30, 2001. Xxxxxx shall continue to serve as Chairman of the Board of
Directors of Pentair (the "Board"), subject to the terms and provisions of an
Executive Consulting Agreement dated June 26, 2002, through the date of the
annual shareholders' meeting in 2002.
3. Stock and Equity Awards. Outstanding awards made to Xxxxxx under the
Pentair Omnibus Stock Incentive Plan (the "Omnibus Plan") and other equity
awards shall be paid as described below. Xxxxxx understands and agrees that the
payment of these awards as described herein is discretionary and not required
under the normal policies and procedures of Pentair, and that he would not be
entitled to these benefits without this Agreement.
a. Restricted Stock. All shares of restricted stock awarded to
Xxxxxx through April 30, 2001 under the Ownership Incentive Plan,
together with any shares of restricted stock awarded to Xxxxxx under
the Omnibus Plan or any other bonus program shall, to the extent not
currently vested, be vested as of the same date as the Incentive
Compensation Units discussed in paragraph 3(b) are paid.
b. Incentive Compensation Units ("ICUs"). All ICUs awarded to
Xxxxxx through April 30, 2001 under the Omnibus Plan shall be deemed to
be fully earned as of April 30, 2001 without regard to the relevant
period stated at the time of grant. The value of said awards shall be
calculated and paid to Xxxxxx as of April 30, 2001.
c. Stock Options. All outstanding stock options granted to
Xxxxxx through April 30, 2001 under the Omnibus Plan shall remain
outstanding and exercisable by him through their original maturity date
and the date any such option is first exercisable shall be accelerated
to April 30, 2001. To the extent options designated as incentive stock
options are exercised within thirty (30) days of April 30, 2001, they
shall retain their status as such; options exercised after this thirty
(30) day period shall be treated as nonqualified options.
In the event Xxxxxx shall sell any Pentair common stock
acquired pursuant to the exercise of an incentive stock option in a
disqualifying disposition, Xxxxxx shall immediately notify Pentair of
such disqualifying disposition and supply all information with respect
to such sale as is reasonably requested by Pentair. This notification
obligation shall apply regardless of whether such options were
exercised before or after April 30, 2001.
In the event Xxxxxx should die before all such options have
been exercised or otherwise lapse, the beneficiary designated by Xxxxxx
shall have six (6) months from the date of Xxxxxx'x death to exercise
any options then outstanding. Any options not so exercised shall lapse
at the end of said six (6) month period.
d. Continuing Securities Obligations. At the direction of
Pentair, Xxxxxx & Efron, P.A. will inform Xxxxxx in writing of its
understanding of his continuing obligations under applicable securities
laws for purposes of any transactions in Pentair common stock.
4. Retirement Benefits. Xxxxxx shall receive payment from the
tax-qualified and non qualified retirement plans maintained by Pentair as
follows:
a. Pentair Pension Plan. The accrued benefit payable to Xxxxxx
under the Pentair Pension Plan shall be determined as of April 30, 2001
and Xxxxxx shall be entitled to receive payment of such vested accrued
benefit in accordance with applicable provisions of that plan.
b. Supplemental Retirement Payment. As a supplemental
retirement benefit, Xxxxxx shall be paid $60,900 monthly beginning on
May 1, 2001, said amount to be paid in the form of a life annuity. This
supplemental retirement benefit includes the benefit earned by Xxxxxx
under the 1988 Supplemental Executive Retirement Plan, plus an
enhancement to such benefit, as granted to Xxxxxx pursuant to the
discretion delegated to the Compensation and Human Resources Committee
of the Board. Xxxxxx understands and agrees that the enhancement to his
supplemental retirement benefit is being provided as consideration for
his agreement to the discharge of claims contained in Paragraph 8 of
this Agreement.
c. Retirement Savings and Stock Incentive Plan ("RSIP").
Xxxxxx shall be entitled to receive payment of his vested accrued
benefit under RSIP in accordance with applicable provisions of that
plan. Xxxxxx shall remain a participant in RSIP until such time as he
requests and receives payment of his vested accrued benefit. From and
after April 30, 2001, Xxxxxx shall not be entitled to make
contributions to RSIP, but shall be entitled to share in allocations of
contributions made by Pentair after such date, including matching or
employer discretionary contributions payable on account of service
completed by, deferrals authorized by, or compensation paid to, Xxxxxx
through April 30, 2001, to the extent required by the provisions of
RSIP. For this purpose, no payments made to Xxxxxx after April 30, 2001
shall be included as covered compensation.
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d. Non-Qualified Deferred Compensation Plan ("Sidekick").
Xxxxxx shall be entitled to receive payment of all amounts payable to
him under the terms and conditions of Sidekick in accordance with the
payment election made by him at the time he began participation in such
plan. From and after April 30, 2001, Xxxxxx shall not be entitled to
make contributions to Sidekick, but shall be entitled to share in
allocations of contributions made by Pentair after such date, including
matching or employer discretionary contributions payable on account of
service completed by, deferrals authorized by, or compensation paid to,
Xxxxxx through April 30, 2001, to the extent required by the provisions
of said plan. For this purpose, no payments made to Xxxxxx after April
30, 2001 shall be included as covered compensation.
e. Other Deferred Compensation Plan. To the extent Xxxxxx may
have amounts payable to him by reason of his participation in the
non-qualified deferred compensation plan maintained by Pentair prior to
implementation of Sidekick, Xxxxxx shall be entitled to receive payment
of such deferred compensation in accordance with the annual payment
elections made by him during the time he elected to participate in such
plan.
5. Insurance Benefits. Xxxxxx shall be eligible for coverage under
certain medical, dental, life and disability insurance benefits offered by
Pentair as described below. Xxxxxx understands and agrees that the payment by
Pentair for the benefits described below is discretionary and not required under
the normal policies and procedures of Pentair, and that he would not be entitled
to these benefits without this Agreement.
a. Medical Insurance. During the applicable COBRA continuation
period Xxxxxx shall receive medical insurance benefits as provided
under his Executive Consulting Agreement. Following the expiration of
the COBRA continuation period (i.e., October 31, 0000), Xxxxxx may
elect to begin participation in the Pentair Retiree Flex Plan
consistent with the terms and provisions of such plan. In addition to
the dollar credits provided to Xxxxxx and his spouse under the Retiree
Flex Plan, Pentair shall pay the balance of the premium cost for such
medical insurance option as Xxxxxx may elect. To the extent Xxxxxx or
his spouse incur medical expenses which are not covered by the retiree
medical plan, or by a Medicare supplement plan, as applicable, but such
expenses would have been covered under the medical insurance program in
effect for active employees on the date such expense is incurred,
Pentair shall reimburse Xxxxxx for the difference between the
reimbursement he received and the reimbursement then provided to active
Pentair employees. The coverage provided hereunder shall be available
to only Xxxxxx and his spouse on the date of his retirement, and shall
continue to be available to each of them until their respective deaths.
No dependents or subsequent spouse, if any, of either Xxxxxx or his
spouse as herein described shall be or become eligible for the benefits
provided hereunder.
b. Dental Insurance. During the applicable COBRA continuation
period Xxxxxx shall receive such dental insurance benefits as are
provided under his Executive Consulting Agreement. Following the
expiration of the COBRA continuation period (i.e., October 31, 2002),
Pentair shall reimburse Xxxxxx and
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his spouse for such dental expenses as they may incur, to the extent
such expenses would have been paid or reimbursed under the provisions
of the dental insurance program made available to employees of Pentair
on the date such expense is incurred. The benefit herein described
shall be available to only Xxxxxx and his spouse on the date of his
retirement until their respective deaths. No dependent or subsequent
spouse, if any, of either of them shall be or become eligible for the
payment of benefits as herein described.
c. Life Insurance. For purposes of providing continuing life
insurance coverage to Xxxxxx, Pentair has entered into a Split Dollar
Agreement with the Xxxxxxx X. Xxxxxx Irrevocable Trust. Pursuant to
said agreement, Pentair shall contribute $48,000 annually toward the
purchase of an insurance policy on Xxxxxx'x life in the face amount of
$2,400,000. The rights and entitlements of both Pentair and Xxxxxx with
respect to this life insurance policy shall be governed by the terms
and provisions of said Split Dollar Agreement.
6. Change in Control. In the event of a change in control of Pentair,
as that term is defined in the Key Executive Employment and Separation Agreement
(the "KEESA") executed by Xxxxxx on August 23, 2000, Pentair shall deposit into
a grantor trust created for this purpose such amounts as shall be determined as
provided in said trust agreement. All amounts so deposited shall be used by the
trustee to pay to Xxxxxx such amounts as would otherwise be paid by Pentair
pursuant to this Agreement, together with such fees as the trustee may charge to
administer the grantor trust. At such time as no further payments are owed to
Xxxxxx pursuant to the provisions of this Agreement, any amounts remaining in
the trust shall revert to the grantor, or any successor thereto. Except for the
occurrence of a change in control, Pentair shall have no obligation to deposit
funds into any such grantor trust.
7. Taxation. Xxxxxx understands and agrees that various types of
payments or reimbursements made to him under this Agreement may result in
taxable income to him, and that he is responsible for properly reporting such
payments or reimbursements on his individual federal and state income tax
returns and for paying any such taxes as are required by applicable law.
8. Confidential Information Acquired During Employment. Xxxxxx agrees
that he will at all times continue to treat, as private, confidential and
privileged, any information, data, figures, projections, estimates, marketing
plans, customer lists, lists of contract workers, tax records, personnel
records, accounting procedures, formulas, contracts, business partners,
alliances, ventures and all other confidential information which Xxxxxx acquired
or created as an employee of the Group. Further, Xxxxxx agrees that he will not
at any time release any such information to any person, firm, corporation or
other entity at any time, except as may be required by law, or as specifically
agreed to in writing by Pentair prior to any such disclosure. Xxxxxx
acknowledges that any violation of this non-disclosure provision shall entitle
Pentair to appropriate injunctive relief and to any damages it may sustain due
to an improper disclosure.
9. Non-Solicitation/Non-Competition Agreement. Xxxxxx acknowledges that
during his employment with the Group, he became familiar with trade secrets,
know-how, executive personnel, business strategies, product development and
other confidential and proprietary information concerning the businesses of the
Group. In consideration for the
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compensation and benefits paid to Xxxxxx under this Agreement, Xxxxxx agrees
that he shall not at any time, either directly or indirectly, and without the
prior written consent of Pentair:
a. own, manage, control, participate in, consult with or
render services of any kind for any concern which engages in a business
which is competitive with any business being conducted, or contemplated
being conducted, by Pentair or any other Group member;
b. become an employee or agent of any publicly traded
corporation or other entity, or any division or subsidiary of such a
corporation or entity, where more than five percent (5%) of such
organization's business is in competition with any business being
conducted, or contemplated being conducted, by Pentair or any other
Group member;
c. participate in any plan or attempt to acquire the business,
assets or control of the voting stock of Pentair or any other Group
member, or in any manner interfere with the control of Pentair or any
other Group member, whether by friendly or unfriendly means;
d. induce or attempt to induce any individual to leave the
employ of Pentair or any other Group member or hire any such individual
who approaches him for employment; or
e. engage in or sponsor the solicitation of customers of
Pentair or any other Group member to do business with any competitor of
Pentair or any other Group member.
In the event Xxxxxx breaches or threatens to breach any obligation
under this paragraph 7, Pentair may apply to any court of competent jurisdiction
for specific performance and/or injunctive relief or other relief to enforce the
obligations of Xxxxxx under this paragraph 7 or to prevent any violations of
said paragraph. Pentair may also pursue any other remedies available to it on
account of a breach or threatened breach of this paragraph 7, including the
costs and reasonable attorneys' fees incurred by it in enforcing its rights
under this paragraph 7. In addition to the other remedies herein provided,
Xxxxxx and any person claiming benefits thereunder through Xxxxxx shall forfeit
any right to future payments under paragraph 4(b).
10. Discharge of Claims. Xxxxxx, on behalf of himself, his agents,
representatives, attorneys, assignees, heirs, executors and administrators,
hereby releases and forever discharges Pentair and all other Group members, and
the past and present employees, agents, insurers, officials, officers,
directors, divisions, parents, subsidiaries and successors of any of them from
any and all claims and causes of action of any type arising, or which may have
arisen, out of or in connection with his employment or termination of employment
with Pentair and the other members of the Group, including, but not limited to
claims, demands or actions arising under the Federal Fair Labor Standards Act,
the Age Discrimination in Employment Act of 1967, 29 U.S.C.ss.626, as amended by
Public Law 101.433 (1990) (the "Older Workers Benefit Protection Act"), Title
VII of the Civil Rights Act of 1964, 42 X.X.X.xx. 2000e, et seq., the Americans
with Disabilities Act, 29 X.X.X.xx. 2101, et seq., the Family Medical Leave Act,
the Minnesota Human Rights Act, Minn. Xxxx.xx. 363.01, et seq., any other
federal, state or local statute, ordinance,
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regulation or order regarding employment, compensation for employment,
termination of employment, or discrimination in employment, and the common law
of any state.
Xxxxxx further understands that this discharge of claims extends to,
but is not limited to, all claims which he may have as of the date of this
Agreement against Pentair or any other Group member, based upon statutory or
common law claims for defamation, libel, slander, assault, battery, negligent or
intentional infliction of emotional distress, negligent hiring or retention,
breach of contract, promissory estoppel, fraud, wrongful discharge, or any other
theory, whether legal or equitable, including all claims for items of
compensation and benefits except as prohibited by law.
Xxxxxx represents that no claim or cause of action covered by this
Agreement has been assigned or otherwise transferred or given to anyone.
11. Cooperation. Xxxxxx agrees that, beginning May 1, 2002, he will be
available by telephone to respond to such reasonable requests for information as
Pentair may make. In addition, Xxxxxx further agrees that at the request of
Pentair, he will, at any time, cooperate with and assist Pentair (including
cooperation and assistance in any matters involving claims or lawsuits against
Pentair or any other Group member) where Xxxxxx has or may have knowledge of the
facts involved. Xxxxxx also agrees that he will, at the reasonable request of
Pentair, execute, if necessary, any further documents or instruments necessary
or appropriate to evidence his separation from service as an officer or director
of Pentair or any Group member, including but not necessarily limited to the
forms, if any, attached hereto as Schedule X. Xxxxxx further agrees that he will
not voluntarily aid, assist, or cooperate with anyone who has claims against
Pentair or any other Group member, or with their attorneys or agents in any
claims or lawsuits which such person may bring against Pentair or any other
Group member. Nothing in this Agreement prevents Xxxxxx from testifying at an
administrative hearing, arbitration, deposition, or in court, in response to a
lawful and properly served subpoena.
12. Merger. This Agreement and the Executive Consulting Agreement
between Xxxxxx and Pentair dated June 26, 2002, supersede and replace all prior
oral and written agreements and understandings between Xxxxxx and Pentair,
including, but not limited to, any KEESA which Xxxxxx may have executed. Xxxxxx
understands and agrees that all claims which he has or may have against Pentair
or any other Group member are fully released and discharged by this Agreement.
Except to the extent otherwise required by law, the only claims which Xxxxxx may
hereafter assert against Pentair or any other Group member are limited to an
alleged breach of this Agreement.
13. Minnesota Law Applies. The terms of this Agreement will be governed
by the substantive laws of the State of Minnesota, without regard to any choice
of laws provisions thereof, and it shall be construed and enforced thereunder.
All disputes arising out of or relating to this Agreement shall be subject to
the jurisdiction of the state court sitting in the County of Hennepin, State of
Minnesota, and both parties hereby irrevocably submit to the jurisdiction of
such court.
14. Invalidity. If any one or more of the terms of this Agreement are
deemed to be invalid or unenforceable by a court of law, the validity,
enforceability, and legality of the remaining provisions of this Agreement will
not in any way be affected or impaired thereby.
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15. Amendment. This Agreement may be modified only by a subsequent
written agreement signed by the parties hereto.
16. Xxxxxx Understandings and Recission Rights. Xxxxxx warrants that
(a) other than as stated herein, no promise or inducement has been offered to
him for this Agreement; (b) this Agreement is executed without reliance upon any
statement or representation of Pentair or its representatives concerning the
nature and extent of any claims or liability therefor, if any; (c) Xxxxxx is
legally competent to execute this Agreement and accepts full responsibility
therefor; (d) Pentair, by this Agreement, has advised Xxxxxx to consult with an
attorney regarding the purpose and effect of this Agreement; (e) Pentair has
allowed Xxxxxx at least twenty-one (21) days within which to consider this
Agreement; and (f) Xxxxxx may choose to sign this Agreement at any time prior to
the end of this twenty-one (21) day consideration period.
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Xxxxxx understands that he may nullify and rescind this Agreement as
far as it extends to his release of claims arising under Minn. Stat. ss. 363.01
et seq., the Minnesota Human Rights Act, and under the Age Discrimination in
Employment Act of 1967, 29 U.S.C. ss. 626, as amended by Public Law 101.433
(1990) (the "Older Workers Benefit Protection Act") at any time within fifteen
(15) days from the date of his signature below and, in the event of such
election, Xxxxxx shall be entitled to receive only $1,000, which the parties
acknowledge is consideration for Xxxxxx'x release of all claims other than those
arising under Minn. Stat. ss. 363.01 et seq., the Minnesota Human Rights Act,
and under the Age Discrimination in Employment Act of 1967, 29 U.S.C. ss. 626,
as amended by Public Law 101.433 (1990) (the "Older Workers Benefit Protection
Act"). In the event Xxxxxx elects to nullify and rescind portions of his release
under this Agreement pursuant to this paragraph, he must indicate his desire to
do so in writing and deliver that writing to Xxx X. Xxxxxxx, Vice President,
Human Resources, Pentair, Inc., Waters Edge Plaza, 0000 Xxxxxx Xxxx X0 Xxxx, Xx.
Xxxx, XX 00000-0000, by hand or by certified mail. Xxxxxx further understands
that if he exercises his rescission rights hereunder, Pentair will not be bound
by the terms of this Agreement (except the obligation to pay Xxxxxx $1,000), and
Xxxxxx will have to disgorge and repay to Pentair in full any monies and
benefits received pursuant to this Agreement other than such $1,000 sum.
Dated: June 26, 2002 /s/ Xxxxxxx X. Xxxxxx
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Xxxxxxx X. Xxxxxx
Subscribed and sworn to before me
this 26th day of June, 2002.
/s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Notary Public
Dated: June 27, 2002 PENTAIR, INC.
By /s/ Xxxxx X. Xxxxxxx
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Its Vice President, Human Resources
Subscribed and sworn to before me
this 27th day of June, 2002.
/s/ Xxxxx X. Xxxxxxxxx
---------------------------------
Notary Public
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SCHEDULE A
Positions Held by Xxxxxxx X. Xxxxxx
at Pentair
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Company Title
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Pentair, Inc. Chief Executive Officer
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The Pentair Foundation Director
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