Exhibit 10.10(1)
December 16, 2005
Xx. Xxxxx X. Xxxxxx, III
[Address Omitted]
Dear Xxx:
This letter will serve as an agreement between you and Technitrol, Inc. ("TNL")
regarding, among other things, what constitutes a termination of your employment
at TNL and setting forth the rights and obligations of each of us upon the
occurrence of such a termination. We intend that this letter constitutes a legal
and binding agreement between us and we acknowledge good and valuable
consideration for our joint promises in this letter. This agreement supersedes
the letter between you and TNL dated July 1, 2004.
1. Reaffirmation of Past Agreements
We are parties to the letter agreements dated April 16, 1999, October 18,
2000, April 23, 2001 and this letter (collectively the "Letter Agreement"), as
well as the Technitrol, Inc. Supplemental Retirement Plan dated January 1, 1994,
which was amended on July l, 1999 and April 20, 2001 and which was amended and
restated in its entirety on January 1, 2002 (the "SERP") (the Letter Agreement
and the SERP are collectively the "Related Agreements"). All terms, conditions
and provisions of the Related Agreements shall continue to apply and be in full
force and effect as though set forth in full in their entirety.
2. Termination of Employment
Your employment with TNL shall terminate on December 31, 2010, or upon the
earlier occurrence of any of the following events to be effective from and after
the date of such event:
A. your death;
B. you become totally disabled;
C. TNL terminates your employment for "cause" (as defined below);
D. TNL terminates your employment for any reason other than
"cause" (as defined below);
E. you terminate your employment for "good reason" (as defined
below); or
F. you terminate your employment for any reason other than "good
reason", including your voluntary retirement.
3. Definitions
A. "Cause" means any of the following:
o (a) the occurrence of gross negligence or willful
misconduct which is materially injurious to TNL and
which, if susceptible of cure, is not cured within
thirty (30) days after notice to you which cites with
reasonable particularity the actions or omissions
believed to constitute such gross negligence or willful
misconduct; (b) conviction of or the entry of a pleading
of guilty or nolo contendere to any felony, unless the
Board of Directors of TNL concludes in good faith that
such event does not render you unable to effectively
manage TNL or materially and adversely affect TNL's
reputation or ongoing business activities; or (c)
misappropriation of TNL's funds or other dishonesty
which in the good faith opinion of the Board of
Directors of TNL, renders you unable to effectively
manage TNL or materially and adversely affects TNL's
reputation or ongoing business activities; or
o your continued and willful refusal to carry out in all
material respects a lawful written directive of the
Board of Directors of TNL; provided that prior to
termination for cause on this ground the Board will give
you written notice of the acts or omissions alleged to
constitute cause, stating them with reasonable
particularity, and will give you twenty (20) days to
cure such acts or omissions such that grounds for
termination for cause no longer exist at the end of such
twenty (20) day period.
B. "Change in Control" means any of the following:
(A) any one "person" or any "group" as defined in Section
3(a)(9) and 13(d)(3), respectively, of the Securities Exchange
Act of 1934, as amended (the "Act"), is or becomes the
"beneficial owner" (as defined in Rule 13(d)-3 of the Act),
directly or indirectly, of securities of TNL representing more
than fifty percent (50%) of the combined voting power of TNL's
then outstanding securities, or
(B) more than fifty percent (50%) of the assets of TNL and its
subsidiaries, which are used to generate more than 50% of the
earnings of TNL and its subsidiaries in any one of the last
three fiscal years, are disposed of, directly or indirectly,
by TNL (including stock or assets of a
subsidiary(ies)) in a sale, exchange, merger, reorganization
or similar transaction.
C. "Disability" or "complete disability" or "total disability"
shall mean that you are unable to engage in any substantial
gainful activity by reason of any medically determinable
physical or mental impairment which can be expected to result
in death or can be expected to last for a continuous period
not less than 12 months.
D. "Good Reason" means:
o a material change in your authority, duties or
responsibilities so as to be inconsistent with the role
of the Chief Executive Officer of TNL as they exist on
the date of this letter (unless you otherwise
voluntarily agree to such change); or
o TNL's continued failure to perform its material
obligations under the Letter Agreement which have not
been cured within twenty (20) days after written notice
from you setting forth the acts or omissions alleged to
constitute such a failure with reasonable particularity.
E. "Sec. 409A" means Section 409A of the Internal Revenue Code of
1986, as amended, and the rules and regulations promulgated
thereunder.
4. Effect of Termination
(i) Death or Retirement: Upon termination of the Letter
Agreement due to your death, or your voluntary
retirement after the age of 62, then (in addition to the
benefits referred to in Sections 6(b) and (c) of the
Letter Agreement relating to vesting of the PBRS upon
death), TNL will pay you or your estate a sum equal to:
a. The unpaid portion of your base salary
through the end of the month in which
termination occurs;
b. any bonus (commensurate with those paid to
other executives) for the six month bonus
period in which termination occurs pro rated
to the date of termination; and
c. any other ordinary course benefits to which
you were entitled as an employee of TNL
and/or pursuant to the Letter Agreement
which were then due but unpaid at the date
of your death, such as
reimbursement for expenses not yet paid and
incurred in accordance with TNL's policy.
d. all of the benefits referred to in this
Section 4(i) (including those contained in
Sections 6(b) and (c) of the Letter
Agreement) will be paid not later than
thirty (30) days after the date of your
death or retirement.
(ii) Total Disability: Upon termination of the Letter
Agreement due to your complete disability, then (in
addition to providing to you the benefits referred to in
Sections 6(b) and (c) of the Letter Agreement relating
to vesting of the PBRS upon disability)TNL will pay you
a sum equal to:
a. The unpaid portion of your base salary
through the end of the month in which
termination is determined to have occurred;
b. any bonus (commensurate with those paid to
other executives) for the six month bonus
period in which termination is determined to
have occurred, pro rated to the date of
termination;
c. any other ordinary course benefits to which
you were entitled as an employee of TNL
and/or pursuant to the Letter Agreement
which were then due but unpaid at the date
of your disability, such as reimbursement
for expenses not yet paid and incurred in
accordance with TNL's policy; and
d. the benefits payable under TNL's long-term
disability plan.
e. the benefits set forth in subsections a.
thru c. above and the benefits referred to
in Sections 6(b) and (c) of the Letter
Agreement will be paid not later than thirty
(30) days after the date on which your
complete disability is deemed to commence.
(iii) By TNL for Cause or by You Without Good Reason: Upon
termination of the Letter Agreement by TNL for Cause or
by you without Good Reason, TNL will pay you, within
thirty (30) days after the date of your termination, a
sum equal to:
a. The unpaid portion of your base salary
through the effective date of termination;
and
b. any other ordinary course benefits to which
you were entitled as an employee of TNL
and/or pursuant to the Letter Agreement
which were then due but unpaid at the date
of termination, such as reimbursement for
expenses not yet paid and incurred in
accordance with TNL's policy.
(iv) By TNL Without Cause or by You for Good Reason: Upon
termination of the Letter Agreement by TNL without Cause
or by you for Good Reason, you will receive all of the
benefits set forth in Section 8 of the Letter Agreement
as though a Change in Control had occurred, with respect
to any shares of restricted stock held by you on the
date of such termination which have not yet vested or
which are subject to additional holding period(s). In
addition, TNL will pay you a sum equal to (in the case
of the payments due under Section 8 of the Letter
Agreement or subsections (a), (c) and (d) below, such
payment shall be made in a lump sum within thirty (30)
days from the date of your termination or, if necessary,
in the opinion of counsel, to ensure that this Letter
Agreement is in compliance with Sec. 409A, on the date
that is six months after your termination of
employment):
a. The unpaid portion of your base salary
through the date of termination;
b. any bonus (commensurate with those paid to
other executives) for the twelve month bonus
period in which termination occurred, pro
rated to the date of termination (without
duplication with payments made pursuant to
subsection d. below) and paid within 2-1/2
months after the end of the year in which
your termination occurs or, if necessary, in
the opinion of counsel, to ensure that this
Letter Agreement is in compliance with Sec.
409A, on the date that is six months after
your termination of employment;
c. any other ordinary course benefits to which
you were entitled as an employee of TNL
and/or pursuant to the Letter Agreement
which were then due but unpaid at the date
of termination, such as reimbursement for
expenses not yet paid and incurred in
accordance with TNL's policy; and
d. the amount set forth in subsections 8(a) and
(b) of the Letter Agreement, except that (1)
such amount shall not be payable if
termination occurs at any time after a
Change in Control, and (2) if such
termination occurs at any time after August
21, 2008, you will be entitled to one year's
base salary (instead of two) and six months
of bonus (commensurate with those paid to
other executives) (instead of one year); and
e. health and life insurance benefits on your
behalf as you were receiving them on the
date of termination along with your health
club membership, in each case for the
applicable time period corresponding to the
salary severance period (that is, one year
or two years) provided in subsection d(2)
above. TNL will continue to pay these
expenses on your behalf when due for the
period indicated in the preceding sentence.
However, if it is necessary, in the opinion
of counsel, to ensure that this Letter
Agreement is in compliance with Sec. 409A,
you may pay any or all of these expenses
when due until the date that is six months
after the date of your termination of
employment and TNL will reimburse you for
such expenses that you have paid on the date
which is six months after your termination
date.
(v) General.
a. Any indemnification obligations of TNL to
which you are entitled as a director,
officer and employee of TNL, whether by
contract or pursuant to TNL's charter or
by-laws, relating to the period prior to
termination, shall survive such termination
but no payment relating to such obligations
shall be paid to you after termination of
your employment until the date which is six
months after the date of your termination
and shall thereafter be paid to you as and
when due in accordance with applicable law
and the constituent documents of TNL.
b. The obligations of TNL in this Section 4
(together with TNL's obligations to you
under the SERP, TNL's Restricted Stock Plan
(or any substitute therefor) and the
"Technitrol, Inc. Retirement
Plan") shall be in lieu of any other
damages, compensation or benefits to which
you might be entitled, directly or
indirectly, in connection with the Related
Agreements.
c. The payments due to you under this Section 4
are expressly conditioned upon the execution
and delivery by you and/or your personal
representatives of a valid general release,
not revoked, rescinded or withdrawn, in form
and content reasonably acceptable to you and
TNL, pursuant to which you shall release TNL
from all claims relating to your employment
or otherwise, except TNL's continuing
obligations under subsection 4(v) a. above.
5. Participation in Restricted Stock Plan
From and after December 31, 2004, you will participate in TNL's
Restricted Stock Plan (or any substitute therefor) in accordance with its terms.
Your awards will be determined by the Board of Directors in the same fashion as
awards are determined for other participants.
6. Capacity and Duties.
You shall devote your full working time, energy, skill and best
efforts to the performance of your duties set forth in the Letter Agreement, in
a manner which will faithfully and diligently further the business and interests
of TNL and its subsidiaries, and shall not be employed by, or participate or
engage in, or be a part of in any manner, the management or operation of any
other business enterprise without the prior written consent of the Board, which
consent may be granted or withheld in its sole discretion.
7. Confidentiality.
You acknowledge a duty of confidentiality owed to TNL and shall not,
at any time during or after your employment by TNL, retain in writing, use,
divulge, furnish, or make accessible to anyone, without the express
authorization of the Board, any trade secret, private or confidential
information or knowledge of TNL or any of its subsidiaries obtained or acquired
while so employed. All computer software, customer lists, price lists, contract
forms, catalogs, books, records, and files and know-how acquired while an
employee of TNL, are acknowledged to be the property of TNL and shall not be
duplicated, removed from TNL's possession, or made use of other than in pursuit
of TNL's business; and, upon termination of employment for any reason, you shall
promptly deliver to TNL, without further demand, all copies thereof which are
then in your possession or control.
8. Inventions and Improvements.
During the term of your employment, you shall promptly communicate
to TNL all ideas, discoveries and inventions which are or may be useful to TNL
or its business. You acknowledge that all ideas, discoveries, inventions, and
improvements which are made, conceived, or reduced to practice by you and every
item of knowledge relating to TNL's business interests (including potential
business interests) gained by you during your employment are the property of
TNL, and you irrevocably assign all such ideas, discoveries, inventions,
improvements, and knowledge to TNL for its sole use and benefit, without
additional compensation. The provisions of this Section shall apply whether such
ideas, discoveries, inventions, improvements or knowledge are conceived, made or
gained by you alone or with others, whether during or after usual working hours,
whether on or off the job, whether applicable to matters directly or indirectly
related to TNL's business interests (including potential business interests),
and whether or not within the specific realm of your duties. It shall be
conclusively presumed that ideas, inventions, and improvements relating to TNL's
business interests or potential business interests conceived during the six
month period following termination of employment are, for the purposes of this
Agreement, conceived prior to termination of employment. You shall, upon request
of TNL, at any time during or after your employment with TNL, sign all
instruments and documents requested by TNL and otherwise cooperate with TNL to
protect its right to such ideas, discoveries, inventions, improvements, and
knowledge, including applying for, obtaining, and enforcing patents and
copyrights thereon in any and all countries.
9. Noncompetition.
During the term of your employment and for two (2) years after any
termination of employment, you shall not directly or indirectly:
(i) engage, directly or indirectly, anywhere in the world,
in the manufacture, assembly, design, distribution or
marketing of any product or equipment substantially
similar to or in competition with any product or
equipment which at any time during the term of such
employment or the immediately preceding twelve month
period has been manufactured, sold or distributed by TNL
or any subsidiary or any product or equipment which TNL
or any subsidiary was developing during such period for
future manufacture, sale or distribution;
(ii) be or become a stockholder, partner, owner, officer,
director or employee or agent of, or a consultant to or
give financial or other assistance to, any person or
entity considering engaging in any such activities or so
engaged;
(iii) seek in competition with the business of TNL to procure
orders from or do business with any customer of TNL;
(iv) solicit, or contact with a view to the engagement or
employment by, any person or entity of any person who is
an employee of TNL;
(v) seek to contract with or engage (in such a way as to
adversely affect or interfere with the business of TNL)
any person or entity who has been contracted with or
engaged to manufacture, assemble, supply or deliver
products, goods, materials or services to TNL; or
engage in or participate in any effort or act to induce any of
the customers, associates, consultants, or employees of TNL or
any of its affiliates to take any action which might be
disadvantageous to TNL or any of its affiliates; except that
nothing in this Agreement shall prohibit you from owning, as a
passive investor, in the aggregate not more than 5% of the
outstanding publicly traded stock of any corporation so
engaged. The duration of your covenants set forth in this
Section shall be extended by a period of time equal to the
number of days, if any, during which you are in violation of
the provisions contained in this Agreement.
10. Certain Change in Control Payment Timing Issues.
If a Change in Control occurs and you are entitled to payment
pursuant to Section 8 of the Letter Agreement for that reason, then (a) if the
Change in Control event is one which is described in Sec. 409A, all benefits due
you shall be paid to you immediately upon the Change in Control and (b) if the
Change in Control event is not one which is described in Sec. 409A, the benefits
due to you shall be paid on the date which is six months after the termination
of your employment.
11. Injunctive and Other Relief.
A. You acknowledge that the covenants contained in this Agreement
are fair and reasonable in light of the consideration paid
under this Agreement, and that damages alone shall not be an
adequate remedy for any breach by you of such covenants, and
accordingly expressly agree that, in addition to any other
remedies which TNL may have, TNL shall be entitled to
injunctive relief in any court of competent jurisdiction for
any breach or threatened breach of any such covenants by you.
Nothing contained in this Agreement shall prevent or delay TNL
from seeking, in any court of competent jurisdiction, specific
performance or other equitable remedies in the event of any
breach or intended breach by you of any of your obligations
under this Agreement.
B. Notwithstanding the equitable relief available to TNL, you, in
the event of a breach of your covenants contained in Sections
7, 8 and 9 of this Agreement, understand that the
uncertainties and delays inherent in the legal process would
result in a continuing breach for some period of time,
and therefore, continuing injury to TNL until and unless TNL
can obtain such equitable relief. Therefore, in addition to
such equitable relief, TNL shall be entitled to monetary
damages for any such period of breach until the termination of
such breach, in an amount deemed reasonable to cover all
actual and consequential losses, plus all monies received by
you as a result of said breach and all costs and attorneys'
fees incurred by TNL in enforcing this Agreement. If you
should use or reveal to any other person or entity any
confidential information, this will be considered a continuing
violation on a daily basis for so long a period of time as
such confidential information is made use of by you or any
such other person or entity.
12. Miscellaneous Provisions
A. Neither you nor TNL will assign the Letter Agreement without
the prior written consent of the other. The Letter Agreement
will bind any successors to TNL by merger or stock purchase.
B. Notices shall be as set forth in the Related Agreements.
C. The Related Agreements are the entire agreement between us
regarding the subject matter to which it relates and supersede
all prior agreements and understandings, oral or written. They
cannot be amended, changed or modified except in a writing
signed by both parties.
D. The Letter Agreement will be governed and construed in
accordance with Pennsylvania law.
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E. The invalidity or unenforceability of any particular provision
or part of any provision of the Letter Agreement shall not
affect the other provisions or parts of the Letter Agreement.
If any provision of the Letter Agreement is determined to be
invalid or unenforceable by a court of competent jurisdiction,
such provision shall be interpreted to provide protection as
nearly equivalent to that found to be invalid or unenforceable
and if any such provision shall be so determined to be invalid
or unenforceable by reason of the duration or geographical
scope of the covenants contained in this Agreement, such
duration or geographical scope, or both, shall be considered
to be reduced to a duration or geographical scope to the
extent necessary to cure such invalidity.
If the foregoing meets with your approval, please sign where indicated below and
return a signed copy to me.
Sincerely,
TECHNITROL, INC.
/s/ Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
Vice President, Human Resources
ACCEPTED AND AGREED
Witness:
/s/ Xxxxx X. Xxxxx /s/ Xxxxx X. Xxxxxx, III
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Xxxxx X. Xxxxx Xxxxx X. Xxxxxx, III
