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EXHIBIT 10.7
EMPLOYMENT AGREEMENT
EMPLOYMENT AGREEMENT (the "Agreement"), dated as of January __, 1997
between XXXXXX X. XXXXXXX, an individual with a residence address of 0 Xxxxx
Xxxx Xxxxx, Xxxxxxxxx 00, Xxxxxxx, Xxxxx Xxxxxx 00000 (the "Employee") and
AMTROL INC., a Rhode Island corporation with a principal place of business at
0000 Xxxxxxxx Xxxx, Xxxx Xxxxxxx, Xxxxx Xxxxxx 00000 (the "Company").
WHEREAS, the Company desires to assure itself of the benefit of the Employee's
services and experience for a period of time and the Employee is willing to
enter into an agreement to that end upon the terms and conditions herein set
forth.
NOW, THEREFORE, in consideration of the premises and covenants herein contained,
the parties hereto agree as follows:
1. Term of Agreement. Subject to the terms and conditions hereof, the term of
this Agreement shall commence on the date hereof and, subject to earlier
termination by the Employee or the Company as hereinafter provided, shall
continue for a period of two (2) years beginning on the first day of each month
after the date hereof. Such term of employment is hereinafter referred to as the
"Employment Period."
2. Services to be Rendered.
(a) During the Employment Period, the Employee shall serve the Company as its
Executive Vice President.
(b) The Employee agrees that he will, during the Employment Period, devote his
full business time, attention and ability to the business of the Company and its
subsidiaries as the Company's Executive Vice President and shall well and
faithfully serve the Company and its subsidiaries and shall exercise the powers
and authorities and fulfill the responsibilities hereby conferred upon him
honestly, diligently, in good faith and in the best interest of the Company and
its subsidiaries and use his best efforts to promote their interests. The
Employee may, however, serve as an outside director of any other corporation
provided Employee obtains the prior written consent of the Company, which shall
not be unreasonably withheld.
3. Compensation.
(a) In full payment for services rendered to the Company under this Agreement,
the Company shall pay the Employee a salary of Two Hundred Forty Thousand
Dollars ($240,000) per year during the first year of the Employment Period
("Base Salary"). The Compensation Committee of the Board of Directors of the
Company or in the absence of a Compensation
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Committee, the full Board of Directors of the Company shall determine the salary
to be paid to the Employee during subsequent years of the Employment Period.
(b) In addition to the compensation otherwise provided for in this Section 3,
during the Employment Period, the Employee also shall be entitled to: (i)
participate in the Company's stock option plans, in accordance with the terms
thereof, as from time to time may be in effect; (ii) by resolution of the
Compensation Committee, participate in the Company's incentive compensation
plans, in accordance with the terms thereof, as from time to time may be in
effect; (iii) participate in the Company's retirement plans, in accordance with
the terms thereof, as from time to time may be in effect; and (iv) participate
in such group life, disability, accident, hospital and medical insurance plans
("Welfare Plans") in accordance with the terms thereof, as from time to time may
be in effect; provided, that any such participation is generally appropriate to
Employee's responsibilities hereunder; and provided, further, that benefits and
terms of participation under the Welfare Plans may be changed by the Company
from time to time in its sole discretion. To the extent stock options are to be
granted in accordance with a Company stock option plan for the Company fiscal
year ending within the year Employee's employment with the Company terminates,
Employee shall be entitled to such options in accordance with the plan's terms.
(c) The Employee shall be entitled, during the Employment Period, to vacations
and fringe benefits consistent with the policies and practices of the Company.
(d) The Company shall provide the Employee, during the Employment Period, with
the use of a Company-owned or leased automobile, and will pay all taxes and
insurance on said vehicle in accordance with the Company's current standard
automobile policy.
4. Disability, Death and Termination.
(a) In the event of the Employee's inability to perform the principal duties of
his job at the Company due to physical or mental condition, as determined by a
physician ("Permanent Incapacitating Disability") for any consecutive period of
at least six (6) months with or without accommodation, the Company may, at its
election, terminate the Employee's employment hereunder. The date of Permanent
Incapacitating Disability shall be on the last day of such period. In the event
of any such termination, the Company shall be obligated (i) for compensation
earned by the Employee hereunder, but not yet paid, prior to such termination,
and (ii) to pay the Employee each month, for twenty-four (24) consecutive
months, an amount equal to the monthly Termination Benefit (the "Disability
Benefit"); provided, however, that the amount of the Disability Benefit shall be
reduced by any amounts received by the Employee in respect of the Employee's
disability from any employee benefit or disability plans maintained by the
Company.
(b) The obligations of the Company under this Agreement shall terminate upon the
death of the Employee.
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(c) The Employee may terminate this Agreement at any time by providing written
notice to the Company. In the event that (i) the Employee voluntarily terminates
employment with the Company without Good Reason, or (ii) the Company terminates
the Employee's employment for Cause, the Company's obligations hereunder shall
terminate and no further payments of any kind (other than in respect of
compensation earned by the Employee as determined hereunder prior to such
termination) shall thereafter be made by the Company to the Employee hereunder.
For purposes hereof, retirement on or after age 62 shall constitute voluntary
termination of employment by the Employee without Good Reason.
"Cause" as used within this Agreement means:
(i) any act or acts of the Employee constituting a felony (or its
equivalent) under the laws of the United States, any state thereof or any
foreign jurisdiction;
(ii) any material breach by the Employee of any employment agreement with the
Company or the policies of the Company or any of its subsidiaries or the willful
and persistent (after written notice to the Employee) failure or refusal of the
Employee to perform his duties of employment or comply with any lawful
directives of the Board of Directors of the Company;
(iii) a course of conduct amounting to gross neglect, willful misconduct or
dishonesty; or
(iv) any misappropriation of material property of the Company by the Employee or
any misappropriation of a corporate or business opportunity of the Company by
the Employee.
"Good Reason" as used within this Agreement means:
(i) any material reduction by the Company of such Employee's duties,
responsibilities or titles;
(ii) any involuntary removal of such Employee from any position previously held
(except in connection with a promotion or a termination for Cause, death or
disability, or the voluntary termination by the Employee other than for Good
Reason);
(iii) within six months after a Change in Control; or
(iv) such other reasons (including non-employment-related reasons) as may be
approved by the Company, in its sole discretion, from time to time; provided,
however, that a Good Reason shall not be deemed to have occurred under clauses
(i) or (ii) unless the employee notifies the Company that he believes one of
such events has occurred within 60 days after he has knowledge of it and if it
has, the Company shall not have cured it within 60 days of receipt of such
notice.
provided, however, that a Good Reason shall not be deemed to have occurred under
clause (i) or (ii) unless the Employee notifies the Company that he believes one
of such events has occurred within 60 days after he has knowledge of it and if
it has, the Company shall not have cured it within 60 days of receipt of such
notice.
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(d) The Company may terminate Employee's employment at any time without Cause by
providing written notice to the Employee. If the Company terminates the
Employee's employment without Cause or if the Employee voluntarily terminates
employment with the Company for Good Reason, the Company shall:
(1) pay the Employee a monthly amount, for twenty-four (24) consecutive months
after termination, equal to one twelfth of the Employee's annual average salary
as computed by the Company for the prior twenty-four (24) consecutive months, or
if the Employee has not been employed for twenty-four (24) consecutive months,
for the number of consecutive months employed, preceding the date of termination
(the "Termination Benefit") until the Termination Benefit is paid in full;
(2) pay, on the date otherwise due and payable, the pro-rata portion of any
bonus or incentive compensation otherwise payable to the Employee without regard
to his termination with respect to the fiscal period in which such termination
occurs; and
(3) provide Employee with benefits in accordance with Section 3(b) (iv) and
Section 3(d) for a period of twenty-four (24) consecutive months after
termination.
5. Confidentiality. For purposes of this Agreement, "proprietary information"
shall mean any information relating to the business of the Company or any of its
subsidiaries that has not previously been publicly released by duly authorized
representatives of the Company and shall include (but shall not be limited to)
Company information encompassed in all research, product development, designs,
plans, formulations and formulating techniques, proposals, marketing and sales
plans, financial information, costs, pricing information, strategic business
plans, customer information, and all methods, concepts, or ideas in or
reasonably related to the business of the Company.
The Employee agrees to regard and preserve as confidential all proprietary
information pertaining to the Company's business that has been or may be
obtained by the Employee in the course of his employment with the Company,
whether he has such information in his memory or in writing or other physical
form. The Employee will not, without prior written authority from the Company to
do so, use for his benefit or purposes, or disclose to any other person, firm,
partnership, corporation or other entity, either during the term of his
employment hereunder or thereafter, any proprietary information connected with
the business or developments of the Company, except as required in connection
with the performance by the Employee of his duties and responsibilities as an
employee of the Company. This provision shall not apply after the proprietary
information has been voluntarily disclosed to the public, independently
developed and disclosed by others, or otherwise enters the public domain through
lawful means.
6. Removal of Documents or Objects. The Employee agrees not to remove from the
premises of the Company, except as an employee of the Company in pursuit of the
business of the Company or any of its subsidiaries, or except as specifically
permitted in writing by the Company, any document (regardless of the medium on
which it is recorded), object, computer program, computer source code, object
code or data (the "Documents") containing or reflecting
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any proprietary information of the Company. The Employee recognizes that all
such Documents, whether developed by him or by someone else, are the exclusive
property of the Company.
7. Non-Competition. The Employee agrees that during the Employment Period and
for a period of two (2) years after such Employment Period terminates or is
terminated, he will not in any way, directly or indirectly, manage, operate,
control, solicit officers or employees of the Company, accept employment, a
directorship or a consulting position with or otherwise advise or assist or be
connected with or own or have any other interest in or right with respect to
(other than through ownership of not more than one percent (1%) of the
outstanding shares of a corporation's stock which is listed on a national
securities exchange) any enterprise which competes or shall compete with the
Company, by engaging in or otherwise carrying on the research, development,
manufacture or sale of any product of any type developed, manufactured or sold
by the Company or any subsidiary thereof, whether now or hereafter (to the
extent that any such product is under consideration by the Board of Directors of
the Company at the time the Employee's employment terminates or is terminated).
8. Corporate Opportunities. The Employee agrees that during the Employment
Period he will not take any action which might divert from the Company or any
subsidiary of the Company any opportunity which would be within the scope of any
of the present or future businesses of the Company or any of its subsidiaries
(which future businesses are then under consideration by the Board of Directors
of the Company), the loss of which has or would have had, in the reasonable
judgment of the Board of Directors of the Company, an adverse effect upon the
Company, unless the Board of Directors of the Company has given prior written
approval.
9. Relief. It is understood and agreed by and between the parties hereto that
the service to be rendered by the Employee hereunder, and the rights and
privileges granted to the Company by the Employee hereunder, are of a special,
unique, extraordinary and intellectual character, which gives them a peculiar
value, the loss of which cannot be reasonably or adequately compensated in
damages in any action at law, and that a breach by the Employee of any of the
provisions contained in this Agreement will cause the Company great irreparable
injury and damage.
The Employee hereby expressly agrees that the Company shall be entitled to the
remedies of injunction, specific performance and other equitable relief to
prevent a breach of this Agreement by the Employee. The Employee further
expressly agrees that in the event the Employee breaches the non-competition
provisions of Section 7 of this Agreement or the confidentiality provisions of
Section 5 of this Agreement, the balance of any payments due under this
Agreement shall be forfeited by the Employee. The provisions of this Section 9
shall not, however, be construed as a waiver of any of the rights which the
Company may have for damages or otherwise.
10. Warranty. The Employee hereby warrants that he is free to enter into
this Agreement and to render his services pursuant hereto.
11. Non-Assignability. Except as otherwise provided herein, this Agreement may
not be assigned by either the Company or the Employee.
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12. Merger or Consolidation. In the event of a "Change of Control" (as such term
is defined in the Indenture dated as of November 1, 1996 between AMTROL
Acquisition, Inc. and the Bank of New York, as Trustee, as amended by the First
Supplemental Indenture date November 13, 1996), this Agreement may be assigned
and transferred to such successor in interest as an asset of the Company upon
such assignee assuming the Company's obligations hereunder, in which event the
Employee agrees to continue to perform his duties and obligations according to
the terms and conditions hereof for such assignee or transferee of this
Agreement subject to Employee's right to terminate for Good Reason in accordance
with Section 4(c)(iii).
13. Withholding. The Company shall have the right to withhold the amount of
taxes, which in the determination of the Company, are required to be withheld
under law with respect to any amount due or paid under this Agreement.
14. Notices. All notices and other communications which are required or may be
given under this Agreement shall be in writing and shall be deemed to have been
given if delivered personally or sent by registered or certified mail, return
receipt requested, postage prepaid:
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(a) If to the Company,
AMTROL INC.
0000 Xxxxxxxx Xxxx
Xxxx Xxxxxxx, Xxxxx Xxxxxx 00000
Attention: President
With a copy to:
Xxxxxxxx, Xxxxx & Xxxxxx
0000 Xxxxx Xxxxxx
Xxxxxxxxxx, Xxxxx Xxxxxx 00000
Attention: Xxxxxxxx X. Xxxxxxx, Esq.
(b) If to the Employee, to him at such address as set forth on the title page
hereof or as he shall otherwise have specified by notice in writing to the
Company.
15. Governmental Regulation. Nothing contained in this Agreement shall be
construed so as to require the commission of any act contrary to law and
wherever there is any conflict between any provision of this Agreement and any
statute, law, ordinance, order or regulation, the latter shall prevail, but in
such event any such provision of this Agreement shall be curtailed and limited
only to the extent necessary to bring it within the legal requirements.
16. Governing Law; Jurisdiction. This Agreement shall be governed by and
construed in accordance with the laws of the State of Rhode Island. Any suit,
action or proceeding against the Employee with respect to this Agreement, or any
judgment entered by any court in respect of any thereof, may be brought in any
court of competent jurisdiction in the State of Rhode Island and the Employee
hereby submits to the exclusive jurisdiction of such courts for the purpose of
any such suit, action, proceeding or judgment. The Employee hereby irrevocably
waives any objections which he may now or hereafter have to the laying of the
venue of any suit, action or proceeding arising out of or relating to this
Agreement brought in any court of competent jurisdiction in the State of Rhode
Island and hereby further irrevocably waives any claim that any such suit,
action or proceeding brought in any such court has been brought in any
inconvenient forum. No suit, action or proceeding against the Company with
respect to this Agreement may be brought in any court, domestic or foreign, or
before any similar domestic or foreign authority other than in a court of
competent jurisdiction in the State of Rhode Island, and the Employee hereby
irrevocably waives any right which he may otherwise have had to bring such an
action in any other court, domestic or foreign, or before any similar domestic
or foreign authority. The Company hereby submits to the jurisdiction of such
courts for the purpose of any such suit, action or proceeding. The Employee
irrevocably waives his right to trial by jury with regard to any suit, action,
or proceeding with respect to this Agreement; provided, however, that if such
waiver of the right to jury trial shall be held unenforceable, the invalidity or
unenforceability of this provision shall not impair the validity or
enforceability of any other provision of this Agreement.
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17. Entire Agreement. This Agreement sets forth the entire understanding of the
parties in respect of the subject matter contained herein and supersedes all
prior agreements, arrangements and understandings relating to the subject matter
including, but not limited to that certain Special Termination Agreement by and
between the Company and the Employee dated April 11, 1996, but specifically
excluding that certain Management Stockholder's Agreement by and between AMTROL
Holdings, Inc. and the Employee dated November 13, 1996.
18. Amendment. This Agreement may not be modified or amended or any term or
provision waived or discharged except in writing, signed by both parties hereto
or their duly authorized representatives.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the
date first above written.
Employee: Company:
________________________________ AMTROL INC.
Xxxxxx X. Xxxxxxx
By: _______________________________
Title: ____________________________
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