EXHIBIT 10.23
SEVERANCE AGREEMENT
AGREEMENT by and between AMTROL INC., a Rhode Island corporation
("AMTROL"), AMTROL Holdings Inc., a Delaware corporation, ("Holdings" and
together with AMTROL, the "Company") and Xxxxxxx X. Xxxxxxxx (the "Executive"),
dated as of the 29th day of October, 2004.
The Boards of Directors of Holdings and AMTROL (the "Boards") have
determined that it is in the best interests of the Company and its shareholders
to assure that the Company will have the continued service and dedication of the
Executive. In addition, the Boards believe it is imperative to diminish the
inevitable distraction of the Executive by virtue of the personal uncertainties
and risks created by a pending or threatened Change of Control and to encourage
the Executive's full attention and dedication to the Company currently and in
the event of any threatened or pending Change of Control, and to provide the
Executive with severance arrangements currently and upon a Change of Control
which ensure that the compensation expectations of the Executive will be
satisfied and which are competitive with those of other corporations. Therefore,
in order to accomplish these objectives, the Boards have caused the Company to
enter into this Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. In the event Executive's employment with the Company is terminated
without Cause (as defined below) within one (1) year subsequent to a Change of
Control (as defined below), AMTROL will continue Executive's then current annual
base salary for a period of twelve (12) months, subject to withholdings required
by law and other applicable deductions. In the event of a Change of Control,
Executive will only be entitled to receive the salary continuation payments
discussed above if the Executive's employment with the Company is involuntarily
terminated as a result of the Change of Control. Additionally, Executive will be
entitled to accelerated payment by AMTROL of any amounts earned pursuant to the
Management Incentive Compensation Plan as described in the summary to such plan
as of the date of termination of employment.
For the purpose of this Agreement a "Change of Control" shall mean:
(i) There shall have occurred a change in control which the Company
would be required to report in response to Item 1 of Form 8-K promulgated
under the Securities Exchange Act of 1934, as amended (the "Exchange
Act"), or if such regulation is no longer in effect, any regulations
promulgated by the Securities and Exchange Commission pursuant to the
Exchange Act which are intended to serve similar purposes;
(ii) The acquisition, other than from the Company, by any
individual, entity or group (within the meaning of Section 13(d)(3) or
14(d)(2) of the Exchange Act) of beneficial ownership (within the meaning
of Rule 13d-3 promulgated under the Exchange Act) of 50% or more of either
the then outstanding shares of common stock of the Company (the
"Outstanding Company
Common Stock") or the combined voting power of the then outstanding voting
securities of the Company entitled to vote generally in the election of
directors (the "Company Voting Securities"), provided, however, that any
acquisition by the Company or its subsidiaries, or any employee benefit
plan (or related trust) of the Company or its subsidiaries, or any
corporation with respect to which, following such acquisition, more than
50% of, respectively, the then outstanding shares of common stock of such
corporation and the combined voting power of the then outstanding voting
securities of such corporation entitled to vote generally in the election
of directors is then beneficially owned, directly or indirectly, by all or
substantially all of the individuals and entities who were the beneficial
owners, respectively, of the Outstanding Company Common Stock and Company
Voting Securities immediately prior to such acquisition in substantially
the same proportion as their ownership, immediately prior to such
acquisition, of the Outstanding Company Common Stock and Company Voting
Securities, as the case may be, shall not constitute a Change of Control;
or
(iii) Individuals who, as of January 1, 2004, constitute the Boards
(the "Incumbent Boards") cease for any reason to constitute at least a
majority of the Boards, provided that any individual becoming a director
subsequent to January 1, 2004 whose election, or nomination for election
by the Company's shareholders, was approved by a vote of at least a
majority of the directors then comprising the Incumbent Boards shall be
considered as though such individual were a member of the Incumbent
Boards; or
(iv) Approval by the stockholders of the Company of (x) a complete
liquidation or dissolution of the Company, (y) the sale or other
disposition of all or a material portion of the assets of the Company, or
(z) a reorganization, merger or consolidation, in each case, with respect
to which all or substantially all of the individuals and entities who were
the respective beneficial owners of the Outstanding Company Common Stock
and Company Voting Securities immediately prior to such reorganization,
merger or consolidation do not, following such reorganization, merger or
consolidation, beneficially own, directly or indirectly, more than 50% of,
respectively, the then outstanding shares of common stock and the combined
voting power of the then outstanding voting securities entitled to vote
generally in the election of directors, as the case may be, of the
corporation resulting from such reorganization, merger or consolidation;
provided, however, "reorganization" for the purposes of this subsection
1(iv)(z) shall not include any voluntary or involuntary bankruptcy or
insolvency filing by or against the Company.
For purposes of this Agreement, "Cause" means:
(i) an act or acts of personal dishonesty taken by the Executive and
intended to result in substantial personal enrichment of the Executive at
the expense of the Company,
(ii) repeated violations by the Executive of the Executive's
obligations of employment which are demonstrably willful and deliberate on
the Executive's part and which are not remedied in a reasonable period of
time after receipt of written notice from the Company, or
(iii) the conviction of the Executive of a felony or a crime
involving moral turpitude.
2. Nothing in this Severance Agreement alters the "at-will" nature of
Executive's Employment with the Company.
3. The salary continuation payments discussed above are in lieu of any
other severance or salary continuation payments to which Executive may have been
entitled pursuant to any agreements with the Company and/or Company policy or
practice.
4. Executive is not entitled to any salary continuation payments pursuant
to this Severance Agreement in the event Executive resigns his employment with
the Company at any time prior to or subsequent to a Change of Control.
5. In the event the Executive's employment is terminated at any time
for any reason, the Company agrees to provide Director's and Officer's liability
insurance for Executive for an appropriate tail period and to indemnify
Executive for any claims made against Executive as a result of his employment
with the Company.
IN WITNESS WHEREOF, the Executive has hereunto set his hand and, pursuant
to the authorization from their Boards of Directors, AMTROL and Holdings have
caused these presents to be executed in their names on their behalf, all as of
the day and year first above written.
AMTROL Inc. AMTROL Holdings Inc.
By: /s/ Xxxxxx X. Xxxxxxxxxx By: /s/ Xxxxxx X. Xxxxxxxxxx
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Xxxxxx X. Xxxxxxxxxx Xxxxxx X. Xxxxxxxxxx
EXECUTIVE
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
