Exhibit 10.10 (1)
July 1, 2004
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.
1. Reaffirmation of Past Agreements
We are parties to the letter agreement dated April 16, 1999, October 18,
2000, April 23, 2001 and on the date hereof (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.
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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.
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C. "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.
D. "Disability" or "complete disability" or "total disability" shall
mean disability as defined in TNL's long term disability insurance
policy.
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 providing to you 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.
(ii) Total Disability: Upon termination of the Letter Agreement due
to your total 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:
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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.
(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 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:
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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 six month bonus period in
which termination occurred, pro rated to the date
of termination (without duplication with payments
made pursuant to subsection d. below);
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, in a lump sum or
installments as therein provided, 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 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.
You may elect to receive these amounts in a lump
sum at the then current rates paid by TNL, or TNL
will continue to pay them on your behalf when due
for the period indicated in the preceding
sentence.
(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.
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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
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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;
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(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
(vi) 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. 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
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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.
11. 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.
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.
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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
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