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EXHIBIT 10.1
EXECUTIVE EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement") is made and entered into as of this
20th day of January, 2000, by and between Waterlink, Inc., a Delaware
corporation (the "Company"), and Xxxx Xxxxx ("Executive").
W I T N E S S E T H :
WHEREAS, the Company desires to employ Executive as of the date hereof
as its Chief Financial Officer and Executive desires to be so employed;
NOW THEREFORE, in consideration of the premises and mutual covenants
contained herein and for other good and valuable consideration, the adequacy and
receipt of which are hereby acknowledged, the parties agree as follows:
1. EMPLOYMENT. The Company agrees to employ Executive and Executive
hereby agrees to serve the Company for the Term (as defined in Section 2 below)
of this Agreement, in the position and with the duties and responsibilities set
forth in Section 3 below, and upon the other terms and subject to the conditions
hereinafter stated.
2. TERM. The initial term (the "Initial Term") of this Agreement shall
commence on the date hereof and shall continue until the second anniversary of
the date hereof (the "Initial Expiration Date"); provided, however, that this
Agreement at all times shall be subject to earlier termination in accordance
with the provisions hereof. On the Initial Expiration Date and each anniversary
of the Initial Expiration Date, unless otherwise terminated in accordance with
the provisions hereof, the term of this Agreement automatically shall be
extended for an additional one year term (the "Extended Term"). For purposes of
this Agreement, "Term" means the Initial Term and, as so extended, the Extended
Term.
3. POSITION, DUTIES AND RESPONSIBILITIES.
3.1 POSITION, DUTIES AND RESPONSIBILITIES. During the Term,
Executive shall serve as the Chief Financial Officer of the Company,
and shall be responsible for the duties attendant to such office, which
duties will be generally consistent with his position as an executive
officer of the Company and such other managerial duties and
responsibilities with the Company, its affiliates, subsidiaries or
divisions as may be assigned by the Chief Executive Officer and/or the
Board of Directors of the Company (the "Board") consistent with
Executive's position, duties and responsibilities with the Company.
Executive will report directly to the Chief Executive Officer of the
Company. Executive's duties shall be performed principally at the
Company's executive offices which are located in the Canton, Ohio
Metropolitan Area (as defined below), and Executive shall not be
required to perform duties which would necessitate changing his present
residence (which Executive acknowledges is not required in connection
with his entering into this Agreement), unless Executive otherwise
agrees in writing. The Company shall reimburse Executive for his
reasonable out of pocket expenses incurred in spending nights in
Canton, Ohio in connection with his responsibilities under this
Agreement. For purposes of this Agreement, the term "Canton, Ohio
Metropolitan Area" shall encompass the City of Canton and the
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territory within fifteen (15) miles from that city in any direction.
The Company will promptly pay (or reimburse Executive for) all
reasonable moving expenses incurred by Executive relating to a change
of Executive's residences in connection with any such relocation to
which Executive has consented. Executive acknowledges and agrees that,
in connection with his employment hereunder, he may be required to
travel on behalf of the Company.
3.2 SERVICES TO BE PROVIDED. During the Term, Executive shall devote
all of his working time, attention and energies to the affairs of the Company
and its subsidiaries, affiliates and divisions and use his best efforts in the
performance of his duties to promote its and their best interests; provided,
however, that nothing herein shall preclude Executive from (i) serving on the
boards of directors of a reasonable number of other corporations (and retain any
director's fees received therefrom), trade associations or charitable
organizations, (ii) engaging in charitable activities and community affairs or
(iii) managing his personal investments and affairs; provided, however, that
such activities do not materially interfere with the performance of Executive's
duties under the Agreement.
4. SALARY.
4.1 BASE SALARY. During the Term, Executive shall be paid a base salary
(the "Base Salary"), payable in equal installments at such intervals as the
other executive officers of the Company are paid but not less often than
semi-monthly, at an annual rate of one hundred eighty-five thousand dollars
($185,000), subject to such increases, if any, as may be determined by the
Board.
4.2 ANNUAL BONUS. During the Term, Executive shall participate in any
long term and annual incentive compensation program as may be maintained by the
Company for the benefit of its executives. The Company shall establish an annual
incentive bonus plan pursuant to which Executive may earn in each year during
the Term, commencing with fiscal 2000, an amount ranging from 0% to 150% of his
Base Salary, subject to the achievement of certain performance goals established
by the Board, such performance goals to be derived from the Company's annual
operating plan. Executive shall be entitled to one hundred percent (100%) of
Base Salary in the event the Company's earnings per share for its 2000 fiscal
year equal or exceed thirty cents ($.30) per share. Executive also shall be
entitled to participate in the Company's fiscal 2000 bonus plan pertaining to
enhancing the Company's cash flow for fiscal 2000. Executive's bonus with
respect to the Company's 2000 fiscal year shall not be less than fifty thousand
dollars ($50,000).
4.3 EQUITY OPPORTUNITY. During the Term, Executive shall be eligible
for stock option grants and similar awards under existing plans of the Company,
and under any future plans in which executive officers of the Company are
entitled to participate. In addition, as of the date of this Agreement, the
Company will grant to the Executive options to purchase One Hundred Thousand
(100,000) shares of the Company's Common stock (the "Stock Option") at the fair
market value of such shares on the date of grant under and in accordance with
the Company's 1997 Omnibus Incentive Plan (the Plan"). The Stock Option will be
exercisable in cumulative annual increments of 25% of the shares subject
thereto, commencing on the first anniversary of the date hereof, provided,
however, that the Stock Option shall become exercisable in full, without regard
to the vesting criteria otherwise contained herein or therein, upon the
occurrence of a Change of Control (as hereinafter defined) or the termination of
Executive's employment hereunder (x) by the Company, other than for Cause, death
or disability or (y) by the Executive for Good Reason.
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4.4 SUPPLEMENTAL EXECUTIVE RETIREMENT BENEFITS. During the Term,
Executive shall be eligible to participate in any supplemental executive
retirement plan(s), if any, made available to senior executive officers of the
Company.
5. EMPLOYEE BENEFITS.
5.1 BENEFIT PROGRAMS. During the Term, Executive shall participate with
other members of senior management of the Company in any pension profit-sharing,
stock option or similar plan or program of the Company now existing or
established hereafter for the benefit of its employees or senior executives of
the Company or its subsidiaries generally, to the extent that he remains
eligible under the general provisions thereof. Executive shall also be entitled
to participate in any group insurance, hospitalization, medical, health and
accident, disability or similar or nonsimilar plan or program of the Company now
existing or established hereafter for the benefit of its employees or senior
executives of the Company and its subsidiaries generally, to the extent that he
is eligible under the general provisions thereof.
5.2 AUTOMOBILE. During the Term, the Company will provide Executive
with a monthly automobile allowance or leased vehicle in an amount not to exceed
Seven Hundred Fifty Dollars ($750.00) and the Company shall be responsible for
costs associated with repairing, maintaining and insuring such vehicle.
5.3 VACATION; PERSONAL DAYS. During the Term, Executive shall be
entitled to annual vacation with pay during each year of his employment
hereunder provided that the vacation days taken are commensurate with past
practice of the Company for its senior Executives and do not materially
interfere with the operations of the Company.
5.4 KEY MAN INSURANCE. Executive agrees that the Company may at any
time and for the Company's own benefit, apply for and take out life, health,
accident, and/or other insurance covering Executive either independently or
together with others in any amount which the Company deems to be in its best
interests and the Company may maintain any existing insurance policies on the
life of Executive owned by the Company. The Company shall own all rights in any
such insurance policies and in the cash values and proceeds thereof and, except
as otherwise provided, Executive shall not have any right, title or interest
therein. Executive agrees to assist the Company at the Company's expense in
obtaining any such insurance by, among other things, submitting to the customary
examinations and correctly preparing, signing and delivering such applications
and other documents as may be required by insurers.
6. EXPENSES. The Company shall reimburse Executive upon presentation of
appropriate vouchers or receipts and in accordance with the Company's expense
reimbursement policies, for all reasonable expenses incurred by Executive in
connection with the performance of his duties under this Agreement.
7. TERMINATION. Executive's employment under this Agreement may be
terminated without any breach of this Agreement only under the following
circumstances:
7.1 DEATH. Executive's employment shall terminate upon his death.
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7.2 DISABILITY. In the event Executive shall be unable to render the
services or perform his duties hereunder by reason of illness, injury or
incapacity (whether physical, mental, emotional or psychological for a period of
either (i) one hundred eighty (180) consecutive days or (ii) two hundred seventy
(270) days in any consecutive three hundred sixty-five (365) day period (either
of such events shall constitute a "Disability" for purposes of this Agreement),
the Company shall have the right to terminate this Agreement.
7.3 TERMINATION OF EMPLOYMENT OF EXECUTIVE BY THE COMPANY FOR CAUSE.
The Company may terminate the employment of Executive for Cause (as hereinafter
defined). The term "Cause," as used herein, shall mean (a) Executive's willful
misconduct or gross neglect in the performance of his duties hereunder which in
either case has resulted, or is likely to result, in material economic damage to
the Company, (b) the material breach of this Agreement by Executive which has
resulted, or is likely to result in material economic damages to the Company or
(c) the final, non-appealable conviction of Executive of a felony which
constitutes a crime of moral turpitude. For purposes of Section 7.3(a), no act,
or failure to act, on Executive's part, will be considered "willful" unless done
or omitted to be done by him not in good faith and without a reasonable belief
that his action or omission was in furtherance of the Company's business.
Executive shall not be deemed to have been terminated for Cause unless
and until, after reasonable notice to Executive the Board has determined that
Executive was guilty of the conduct described in clause (a) or (b) of the
preceding paragraph, and delivered to Executive a Notice of Termination (as
defined below) stating such determination and specifying with particulars
therein in detail.
7.4 TERMINATION OF EMPLOYMENT BY EXECUTIVE. Executive may terminate his
employment hereunder for Good Reason. For purposes of this Agreement, "Good
Reason" shall mean (A) any assignment to Executive of any duties inconsistent in
any material respect with his present duties as Chief Financial Officer of the
Company or a change in his position, duties, authority or responsibilities
without his express written consent or any other action by the Company which
results in a material diminution of the position, duties, authority, or
responsibility of Executive, (B) any removal of Executive without his consent
from, or any failure to re-elect Executive to, the office of Chief Financial
Officer of the Company, except in connection with termination of Executive's
employment for Cause or as a result of his death or disability, or by him other
than for Good Reason, (C) a reduction in Executive's Base Salary as in effect on
the date of this Agreement or as the same may be increased from time to time, or
a reduction in Executive's other benefits unless, with respect to a reduction of
benefits, all members of senior management of the Company are similarly
affected, (D) the Company shall materially breach any provision of this
Agreement, which breach shall continue unremedied for ten (10) days after the
Company shall have been given notice of such breach, (E) failure of the Company
to obtain from any successor the assumption of or the agreement to perform this
Agreement (as contemplated in Section 15 hereof), or (F) any purported
termination of Executive's employment which is not effected pursuant to the
Notice of Termination satisfying the requirements of Section 7.5. In addition,
Executive may terminate his employment hereunder other than for Good Reason.
7.5 NOTICE OF TERMINATION. Any termination of Executive's employment by
the Company or by Executive (other than a termination Pursuant to Section 7.1
above) shall be
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communicated by written Notice of Termination to the other party. For purposes
of this Agreement, a "Notice of Termination" shall mean a notice which shall
indicate the specific provision in this Agreement relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for termination of the Executive's employment under the provision so
indicated. Any purported termination not satisfying the requirements of this
Section 7.5 shall not be effected.
7.6 DATE OF TERMINATION. "Date of Termination" shall mean (i) if
Executive's employment is terminated by his death, the date of his death, (ii)
if Executive's employment is terminated pursuant to Section 7.5 above, the date
specified in the Notice of Termination, and (iii) if Executive's employment is
terminated for any other reason, the date on which a Notice of Termination is
given; provided that if within thirty (30) days after the Notice of Termination
is given pursuant to Section 7.3, the party receiving such Notice of Termination
notifies the other party that a dispute exists concerning the termination, the
Date of Termination shall be the date on which the dispute is finally
determined, either by mutual written agreement of the parties, by a binding and
final arbitration award or by a final judgment, order or decree of a court of
competent jurisdiction (the time for appeal having expired and no appeal having
been perfected); provided, further, that if the Company prevails in its
determination to terminate Executive for Cause in such arbitration or
litigation, the Date of Termination shall be the date specified in the Notice of
Termination.
8. COMPENSATION UPON TERMINATION.
8.1 COMPENSATION UPON TERMINATION UPON DEATH. In the event of the death
of Executive during the Term, Executive's designated beneficiary, or, in the
absence of such designation, the estate or other legal representative of
Executive (collectively, the "Estate"), shall be paid an amount equal to the sum
of (x) Executive's unpaid Base Salary through the month in which Executive's
death occurred (which shall be paid within thirty (30) days of Executive's
death), plus (y) an amount equal to the product of (1) the "Bonus Payment" (as
defined in Section 8.2), if any, with respect to the fiscal year in which
Executive's employment is terminated pursuant to Section 7.1, and (2) a
fraction, the numerator of which is the number of days during which Executive
rendered services and performed his duties hereunder during the fiscal year in
which his employment hereunder is so terminated and the denominator of which is
365; such amounts related to the Bonus Payment to be payable to Executive in
twelve (12) equal semi-monthly installments on the fifteenth and last day of
each month commencing on the fifteenth day of the month following the month in
which Executive's employment is terminated, other than any Bonus Payment that is
not then determined, which shall be paid when such Bonus Payment under Section
4.2 would otherwise have been due. Executive, or the Estate, shall be entitled
to other death benefits in accordance with the terms of the Company's benefit
programs and plans and the other provisions of this Agreement.
8.2 COMPENSATION UPON TERMINATION FOR DISABILITY. If Executive's
employment hereunder is terminated for Disability, Executive shall be paid an
amount equal to the sum of (x) any unpaid Base Salary for the month in which the
termination occurred and for a period of six months thereafter plus (y) an
amount equal to the product of (1) the "Bonus Payment" (as defined below), if
any, with respect to the fiscal year in which Executive's employment is
terminated pursuant to Section 7.2, and (2) a fraction, the numerator of which
is the number of days during which Executive rendered services and performed his
duties hereunder during the fiscal year in which his employment hereunder is
terminated and the denominator of which is 365; such amounts to be payable to
Executive in twelve (12) equal semi-monthly installments on the fifteenth and
last
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day of each month commencing on the fifteenth day of the month following the
month in which Executive's employment is terminated, other than any Bonus
Payment that is not then determined, which shall be paid when such Bonus Payment
under Section 4.2 would otherwise have been due. The amount provided for above
shall be reduced by any disability benefits received by Executive under plans
maintained by the Company. Executive shall be entitled to other disability
compensation and benefits in accordance with the Company's benefit programs and
plans and the other provisions of this Agreement. The "Bonus Payment" shall mean
(a) if a termination of employment occurs within the first four (4) months of a
fiscal year the bonus, if any, paid to Executive with respect to the immediately
preceding fiscal year pursuant to Section 4.2 hereof (which for a termination in
fiscal 2000 shall be deemed to be One Hundred Eighty-Five Thousand Dollars
($185,000) or (b) if a termination of employment occurs after the first four
months of a fiscal year), the bonus to be paid to Executive pursuant to Section
4.2 hereof calculated after the end of the fiscal year in which such termination
occurs with respect to such year.
8.3 COMPENSATION UPON TERMINATION BY THE COMPANY FOR CAUSE OR BY
EXECUTIVE FOR OTHER THAN GOOD REASON OR UPON MANDATORY RETIREMENT. If
Executive's employment is terminated by the Company for Cause or by Executive
for other than Good Reason, the Company shall pay Executive his Base Salary
through the Date of Termination at the rate in effect at the time Notice of
Termination is given, as well as all accrued bonus compensation through the Date
of Termination, and the Company shall have no further obligations to Executive
under this Agreement, except as may be specifically provided herein.
8.4 IMPROPER TERMINATION; GOOD REASON.
(a) Subject to the provisions of Section 8.4(b) hereof, if (x) in
breach of this Agreement (including non-renewal), the Company shall
terminate Executive's employment other than pursuant to Section 7.3 (it
being understood that a purported termination Pursuant to Section 7.3
which is disputed and finally determined not to have been proper shall
be a termination by the Company in breach of this Agreement) or
(y) Executive shall terminate his employment for Good Reason, then
(i) The Company shall pay Executive his full Base Salary
through the Date of Termination at the rate in effect at the time
Notice of Termination is given, as well as all accrued bonus
compensation through the Date of Termination; plus
(ii) In lieu of all other salary and incentive compensation
payments which Executive would have earned under this Agreement but
for his termination, the Company shall pay to Executive, as
liquidated damages, an amount equal to the sum of (A) the Base
Salary in effect as of the Date of Termination and (B) the Bonus
Payment, such amounts to be payable to Executive in twenty-four
(24) equal semi-monthly installments on the fifteenth and last day
of each month, commencing on the fifteenth day of the month
following the month in which the Date of Termination occurs other
than any Bonus Payment that is not then determined, which shall be
paid in equal installments over the balance of such twenty-four
(24) installments commencing no later than ninety (90) days after
the end of the fiscal year in which Executive's employment is
terminated. If the Company fails to make, within five (5) days of
the dates specified above, any two (2) payments required to be made
pursuant
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to this Section 8.4(a)(i) or (ii), the Company shall pay to
Executive, within ten (10) days of the date of such second failure,
in a lump sum, an amount equal to the sum of the remaining payments
(including any payments that the Company failed to make) to which
Executive would have been entitled pursuant to Section 8.4(a)(i)
and (ii) if such failures had not occurred.
(b) If, within one year after the occurrence of a Change of
Control, (x) in breach of this Agreement, the Company shall terminate
Executive's employment other than pursuant to Section 7.3 (it being
understood that a purported termination pursuant to Section 7.3 which
is disputed and finally determined not to have been proper shall be a
Termination by the Company in breach of this Agreement) or
(y) Executive shall terminate his employment for Good Reason, then
(i) The Company shall pay Executive his full Base Salary
through the Date of Termination at the rate in effect at the time
Notice of Termination is given, as well as all accrued bonus
compensation through the Date of Termination; plus
(ii) In lieu of all other salary and incentive compensation
payments which Executive would have earned under this Agreement
but for his termination, the Company shall pay to Executive as
liquidated damages a lump sum amount equal to the present value,
based on the Applicable Federal Rate (as defined in Section
1274(d) of the Internal Revenue Code of 1986, as amended (the
"Code")), of (A) the Base Salary in effect as of the Date of
Termination and (B) the Bonus Payment (such payment being referred
to as the "Termination Payment"); provided, however, that for
purposes of this Section 8.4(b), the Bonus Payment shall not be
less than the Executive's Base Salary then in effect with respect
to fiscal year 2000. The Bonus Payment for subsequent fiscal years
shall be calculated as provided in Section 8.2 above. All payments
under this Section 8.4(b) shall be made on or before the fifth day
following the Date of Termination other than any Bonus Payment
that is not then determined, which shall be paid within five (5)
days after calculated and in no event later than ninety (90) days
after the end of the fiscal year in which Executive's employment
is terminated. In addition, if the receipt of the lump sum
pursuant to the foregoing sentence would cause Executive to pay
federal income tax for the year of receipt at a higher marginal
rate than Executive would have paid for such year had Executive's
employment not been terminated (the "Original Marginal Amount"),
Executive shall receive an additional amount such that the amount
retained by executive after the payment of federal income taxes on
such lump sum shall be the same as if such lump sum had been taxed
at the Original Marginal Rate. Executive shall not be required to
mitigate the amount of compensation payable to Executive
hereunder, by securing other employment or otherwise, nor will
such compensation be reduced by reason of Executive securing other
employment or for any other reason.
(iii) In the event that Executive becomes entitled to the
Termination Payment provided for in Section 8.4(b)(ii), if any of
the Termination Payment will be subject to the tax (the "Excise
Tax,") imposed by Section 4999 of the Code, the Company shall pay
to Executive at the time specified below, an additional amount
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(the "Gross-Up Payment") such that the net amount retained by
Executive, after deduction of any Excise Tax on the Termination
Payment and any federal, state and local income tax and Excise Tax
upon the payment provided for by this paragraph, shall be equal to
the Termination Payment. For purposes of determining whether any
of the Termination Payment will be subject to the Excise Tax and
the amount of such Excise Tax, (x) any other payments or benefits
received or to be received by Executive in connection with a
Change in Control of the Company or the termination of Executive's
employment (whether pursuant to the terms of this Agreement or any
other plan, arrangement or agreement with the Company, any person
whose actions result in a Change in Control or any person having
such a relationship with the Company or such person as to require
attribution of stock ownership between the parties under section
318(a) of the Code) shall be treated as "parachute payments"
within the meaning of section 280G(b)(2) of the Code, and all
"excess parachute payments" within the meaning of section
280G(b)(l) shall be treated as subject to the Excise Tax, unless
in the opinion of tax counsel selected by the Company's
independent auditors and acceptable to Executive such other
payments or benefits (in whole or in part) do not constitute
parachute payments, or such excess parachute payments (in whole or
in part) represent reasonable compensation for services actually
rendered within the meaning of section 280G(b)(4) of the Code,
(y) the amount of the Termination Payment which shall be treated
as subject to the Excise Tax shall be equal to the lesser of (A)
the total amount of the Termination Payment or (B) the amount of
excess parachute payments within the meaning of Sections
280G(b)(1) and (4) (after applying clause (x), above, and after
deducting any excess parachute payments in respect of which
payments have been made under this Section 8.4(b)), and (z) the
value of any non-cash benefits or any deferred payment or benefit
shall be determined by the Company's independent auditors in
accordance with the principles of Sections 280G(d)(3) and (4) of
the Code. For purposes of determining the amount of the Gross-Up
Payment, Executive shall be deemed to pay federal income taxes at
the highest marginal rate of federal income taxation in the
calendar year in which the Gross-Up Payment is to be made, and
state and local income taxes at the highest marginal rates of
taxation in the state and locality of Executive's residence upon
the Date of Termination, net of the maximum reduction in federal
income taxes which could be obtained from deduction of such state
and local taxes. In the event that the Excise Tax is subsequently
determined to be less than the amount taken into account hereunder
at the time of termination of Executive's employment, Executive
shall repay to the Company at the time that the amount of such
reduction in Excise Tax is finally determined the portion of the
Gross-Up Payment attributable to such reduction plus interest on
the amount of such repayment at the rate provided in section
1274(b) (2) (B) of the Code. In the event that the Excise Tax is
determined to exceed the amount taken into account hereunder at
the time of the termination of Executive's employment including by
reason of any payment the existence or amount of which cannot be
determined at the time of the Gross-Up Payment), the Company shall
make an additional gross-up payment in respect of such excess
(plus any interest payable with respect to such excess) at the
time that the amount of such excess is finally determined.
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For purposes of this Agreement, a "Change in Control" of the
Company shall mean (i) the acquisition of beneficial ownership (as
defined in Rule 13d-3 under the Securities Exchange Act of 1934, as
amended (the "Exchange Act")), directly or indirectly, by any "person"
(as such term is used in Sections 13(d) and 14(d) of the Exchange
Act), other than the Company or Executive or an entity directly or
indirectly controlled by Executive, of securities of the Company
representing a majority or more of the combined voting power of the
Company's then outstanding securities, (ii) the failure, for any
reason, of the individuals who presently constitute the Board of
Directors (the "Incumbent Board") to constitute at least a majority
thereof, provided that any director whose election has been approved in
advance by directors representing at least two-thirds (2/3) of the
directors comprising the Incumbent Board or by Executive shall be
considered, for these purposes, as though such director were a member
of the Incumbent Board, (iii) the stockholders of the Company approve a
merger or consolidation of the Company with any other corporation,
other than a merger or consolidation which would result in the voting
securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least a
majority of the combined voting power of the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation, and such merger or consolidation occurs; or
(iv) the stockholders of the Company approve a plan of complete
liquidation of the Company or an agreement for the sale or disposition
by the Company of all or substantially all of the Company's assets.
(c) If Executive terminates his employment under this Agreement for
Good Reason, the Company shall pay all other damages for any and all
loss of benefits which Executive would have received under the
Company's employee benefit plans if the Company had not breached this
Agreement and had Executive's employment continued for the full Term as
then in effect (including, without limitation, benefits Executive would
have been entitled to receive pursuant to any of the Company's pension,
profit sharing and other deferred compensation plans had his employment
continued for such Term at the rate of compensation specified herein),
and including all legal fees and expenses incurred by him as a result
of such termination and in enforcing his rights.
8.5 CONTINUED MAINTENANCE OF BENEFIT PLANS. Unless Executive is
terminated for Cause, death, Mandatory Retirement or by Executive for other than
Good Reason, the Company shall maintain in full force and effect, for the
continued benefit of Executive for one (1) year commencing upon the Date of
Termination, all medical, hospitalization, health and accident insurance
benefits, plans or programs in which Executive was entitled to participate
immediately prior to the Date of Termination. In the event that Executive's
participation in any such benefits, plan or program is barred, the Company shall
arrange to provide Executive with benefits substantially similar to those which
Executive would otherwise have been entitled to receive under such plans and
programs.
9. INDEMNIFICATION.
9.1 The Company agrees to indemnify Executive to the fullest extent
permitted by applicable law consistent with the Company's Certificate of
Incorporation and Bylaws as in effect on the date hereof with respect to any
acts or non-acts he may have committed while he was an
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officer, director, and/or employee (i) of the Company or any subsidiary thereof,
or (ii) at the request of the Company, of any other entity.
9.2 The Company agrees to maintain for Executive, during the Term and
for a period of five (5) years thereafter, a directors' and officers' liability
insurance policy not less favorable than any policy that the Company maintains
for its directors and executive officers in general.
10. CONFIDENTIAL INFORMATION.
10.1 Executive hereby acknowledges that, in the course of his
employment by the Company, he will have access to secret and confidential
information which relates to or affects all aspects of the business and affairs
of the Company, its subsidiaries, affiliates or divisions, and which are not
available to the general public ("Confidential Information"). Without limiting
the generality of the foregoing, Confidential Information shall include
information relating to inventions, developments, specifications, technical and
engineering data, information concerning the filing or pendency of patent
applications, business ideas, trade secrets, products under development,
production methods and processes, sources of supply, marketing plans, and the
names of any customers or prospective customers or of any persons who have or
shall have traded or dealt with the Company. Accordingly, Executive agrees that,
except as required by the performance of his duties hereunder, he will not, at
any time during the Term and for a period commencing on the Date of Termination
and concluding upon the earlier to occur of (a) two (2) years after such Date of
Termination and (b) the date subsequent to such Date of Termination upon which
the Company is in material breach of any material provision of this Agreement
(provided that Executive notifies the Company in writing of such breach and the
Company does not cure such breach within ten (10) days of the receipt of such
notice from Executive), disclose or furnish any Confidential Information to any
person, firm, corporation or other entity without the express prior written
consent of the Company. Notwithstanding the foregoing, the term Confidential
Information shall not include information or data which (i) is now or hereafter
in the public domain, other than as a result of the breach of this Section 10 by
Executive, (ii) prior to the date of commencement of Executive's employment by
the Company was known to Executive (iii) is, after the Date of Termination,
lawfully acquired by Executive from a third party who, to Executive's knowledge,
is not prohibited from disclosing such data or information to Executive or (iv)
is required to be disclosed by court order or other legal process. In the event
that Executive receives a request or demand to disclose all or any part of the
Confidential Information under the terms of a subpoena or order issued by a
court of competent jurisdiction or otherwise, Executive agrees to (x) promptly
notify the Company of the existence, terms and circumstances surrounding such a
request so that the Company may seek a protective order or other appropriate
relief or remedy and (y) if disclosure of such information is required, disclose
such information and, subject to reimbursement by the Company of Executive's
expenses, cooperate with the Company in its efforts to obtain an order or other
reliable assurance that confidential treatment will be accorded to such portion
of the disclosed information which the Company so designates.
10.2 Executive hereby acknowledges and agrees that any and all models,
prototypes, notes, memoranda, notebooks, drawings, records, plans, documents or
other material in physical form which contain or embody Confidential
Information, whether created or prepared by Executive or by others
("Confidential Materials"), which are in Executive's possession or under his
control, are the sole property of the Company. Accordingly, Executive hereby
agrees that, upon the termination of
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his employment with the Company, whether pursuant to this Agreement or
otherwise, or at the Company's earlier request, Executive shall return to the
Company all Confidential Materials and all copies thereof in his possession or
under his control and shall not retain any copies of Confidential Materials.
11. NON-COMPETITION.
11.1 Executive agrees that he shall not, so long as he shall be
employed by the Company in any capacity (whether pursuant to this Agreement or
otherwise) own, manage, operate, control or participate in the ownership,
management, operation or control or be employed by or connected in any manner
with, any business, firm or corporation which is or may be in competition with
the business of the Company, its subsidiaries, affiliates or divisions without
the express written consent of the Company.
11.2 Executive agrees that for a period commencing on the Date of
Termination and concluding upon the earlier to occur of (a) one (1) year after
such Date of Termination and (b) the date subsequent to such Date of Termination
upon which the Company is in material breach of any material provision of this
Agreement (provided that Executive notifies the Company in writing of such
breach and the Company does not cure such breach within ten (10) days of the
receipt of such notice from Executive), Executive shall not own operate, control
or participate in the ownership, management, manage operation or control, or be
employed by or connected in any manner in the "Territory" (as defined below)
with, any business, firm or corporation which is engaged in or competes with the
business of the Company, its subsidiaries, affiliates or division as such
business is constituted on the Date of Termination. The Territory shall mean any
country in the world in which the Company or any of its subsidiaries maintains
offices or manufacturing facilities or has employees at the Date of Termination,
it being acknowledged that the Company's business is and is intended to continue
to be international in nature.
11.3 Anything to the contrary herein notwithstanding, the provisions of
this Section 11 shall not be deemed violated by the purchase and/or ownership by
Executive of shares of any class of equity securities (or options, warrants or
rights to acquire such securities, or any securities convertible into or
exchangeable or exercisable for such securities) (x) of the Company (or any
successor thereto), (y) representing (together with any securities which would
be acquired upon the exercise of any such options, warrants or rights or upon
the conversion of any other security convertible into or exchangeable or
exercisable for such securities) three percent (3%) or less of the outstanding
shares of any such class of equity securities of any issuer whose securities are
traded on a national securities exchange or listed by NASDAQ, the National
Quotation Bureau Incorporated or any similar organization; provided, however,
that Executive shall not be otherwise connected with or active in the business
of the issuers described in this Section 11.3 or (z) of any entity which is then
employing Executive.
12. REMEDY FOR BREACH. Executive hereby acknowledges that in the event
of any breach or threatened breach by him of any of the provisions of Sections
10 or 11 of this Agreement, the Company would have no adequate remedy at law and
could suffer substantial and irreparable damage. Accordingly, Executive hereby
agrees that, in such event, the Company shall be entitled, and notwithstanding
any election by the Company to claim damages, to obtain a temporary and/or
permanent injunction to restrain any such breach or threatened breach or to
obtain specific
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performance of any such provisions, all without prejudice to any and all other
remedies which the Company may have at law or in equity.
13. NOTICES. All notices and other communications hereunder 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, or
by telecopy (immediately followed by telephone confirmation of delivery of such
telecopy with the intended recipient of such notice and by notice in writing
sent promptly by registered or certified mail as provided above) to the parties
to this Agreement at the following addresses or at such other address for a
party as shall be specified by like notice:
To the Company: Waterlink, Inc.
0000 Xxxxxxx Xxxxxx, X.X.
Xxxxxx, XX 00000-0000
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Attention: Chief Executive Officer
To Executive: Xxxx Xxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxx, Xxxx 00000
Telephone: 000-000-0000
Telecopy: 000-000-0000
All such notices and communications shall be deemed to have been
received on the date of personal delivery, on the date that the telecopy is
confirmed as having been received or on the third business day after the mailing
thereof, as the case may be.
14. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties hereto with respect to the employment matters contemplated
herein and supersedes all prior agreements or understandings among the parties
related to such employment matters.
15. BINDING EFFECT; THIRD PARTY BENEFICIARIES. Except as otherwise
provided herein, this Agreement shall be binding upon and inure to the benefit
of the Company and its successors and assigns and upon Executive. "Successors
and assigns" shall mean, in the case of the Company, any successor pursuant to a
merger, consolidation, or sale, or other transfer of all or substantially all of
the assets of the Company. The Company shall require any successor (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company, by agreement in
form and substance satisfactory to Executive, to expressly assume and agree to
perform this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession had taken place.
Failure of the Company to obtain such agreement prior to the effectiveness of
any such succession shall be a breach of this Agreement and shall entitle
Executive to compensation from the Company in the same amount and on the same
terms as if Executive terminated his employment for Good Reason, except that for
purposes of implementing the foregoing, the date on which any such succession
becomes effective shall be deemed the Date of Termination. As used in this
Agreement, "Company" shall mean Waterlink, Inc. and any successor to its
business and/or assets.
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16. NO ASSIGNMENT. Except as contemplated by Section 15 above, this
Agreement shall not be assignable or otherwise transferable by either party.
17. AMENDMENT OR MODIFICATION; WAIVER. No provision of this Agreement
may be amended or waived unless such amendment or waiver is authorized by the
Chief Executive Officer or the Board and is agreed to in writing, signed by
Executive and by an officer of the Company thereunto duly authorized. Except as
otherwise specifically provided in this Agreement, no waiver by either party
hereto of any breach by the other party hereto of any condition or provision of
this Agreement to be performed by such other party shall be deemed a waiver of a
similar or dissimilar provision or condition at the same or at any prior or
subsequent time.
18. FEES AND EXPENSES. The Company will reimburse Executive for the
reasonable attorney's fees incurred by him in connection with the negotiation
and preparation of this Agreement. If either party institutes any action or
proceedings to enforce any rights the party has under this Agreement, or for
damages by reason of any alleged breach of any provision of this Agreement, or
for a declaration of each party's rights or obligations hereunder or to set
aside any provision hereof, or for any other arbitral or judicial remedy, each
party shall be responsible for its own costs and expenses incurred thereby,
including but not limited to, attorneys' fees and disbursements; provided,
however, that if the employment of Executive is purported to be terminated for
Cause subsequent to the occurrence of a Change of Control, the Company shall
promptly pay and be solely responsible for all fees and expenses incurred by
Executive in contesting such purported termination or the grounds therefor,
including, without limitation, attorneys' fees and disbursements.
19. GOVERNING LAW; ARBITRATION. The validity, interpretation,
construction, performance and enforcement of this Agreement shall be governed by
the internal laws of the State of Ohio, without regard to its conflicts of law
rules. Any controversy or claim arising out of or relating to this Agreement,
shall be settled by binding arbitration in accordance with the rules of the
American Arbitration Association, and judgment upon such award rendered by the
arbitrators may be entered in any court having jurisdiction thereof. The
arbitration shall be held in Cleveland, Ohio or such other place as may be
agreed upon at the time by the parties to the arbitration. Subject to Section 18
hereof, the expense of such arbitration shall be borne by the Company.
20. TITLES. Titles to the Sections and subsections in this Agreement
are intended solely for convenience and no provision of this Agreement is to be
construed by reference to the title of any Section.
21. COUNTERPARTS. This Agreement may be executed in one or more counter
parts, which together shall constitute one agreement. It shall not be necessary
for each party to sign each counterpart so long as Each party has signed at
least one counterpart.
22. SEVERABILITY. Any term or provision of this Agreement which is
invalid or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms and
provisions of this Agreement in any other jurisdiction.
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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first set forth above.
WATERLINK, INC.
By:/s/T. Xxxxx Xxxx
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Name: T. Xxxxx Xxxx
Title: Chief Executive Officer
/s/Xxxx Xxxxx
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Xxxx Xxxxx
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