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Exhibit 10.18
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT is made as of December 1, 1997, by
and between CUNO INCORPORATED, Delaware corporation (the "Company"), and XXXX X.
XXXXXX (Executive").
RECITALS
WHEREAS, Executive is and has been serving as Chairman of the
Company's Board of Directors (the "Board") and Chief Executive Officer of the
Company and is an integral part of its management;
WHEREAS, Executive will attain age 65 in February of 2000 and
presently intends to continue in the Company's employ until that time, to retire
from his employment with the Company on February 28, 2000, and the Company
wishes to assure itself of Executive's continued employment through the
Executive's anticipated retirement date;
WHEREAS, the Company wishes to ensure that Executive will not
compete with the Company for a period of two years after the last date on which
he is either an employee of the Company or a member of the Board; and
WHEREAS, Executive is prepared to enter into this employment
agreement with the Company and to give the Company assurances it desires;
NOW, THEREFORE, in consideration of the premises and of the
mutual agreements herein set forth, the parties hereto have agreed and do hereby
mutually agree as follows:
1. Employment, Contract Period. During the period specified in
this Section 1, the Company shall employ Executive, and Executive shall serve
the Company, on the terms and subject to the
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conditions set forth herein. The term of Executive's employment hereunder shall
commence as of December 1, 1997 (the "Effective Date"), and, subject to prior
termination as provided in Section 5 hereof, shall continue through February 28,
2000. The term of Executive's employment hereunder is sometimes hereinafter
referred to as the "Contract Period".
2. Responsibility. At all times during the Contract Period,
Executive shall serve the Company as the Company's Chairman of the Board of
Directors and shall (a) devote such time and effort to the performance of duties
as assigned to him by the Board of Directors that are normally incident to the
office of Chairman of the Board of Directors, and (b) use his best efforts to
promote the interests of the Company and its affiliates.
3. Remuneration. At all times during the Contract Period, the
Company shall pay to Executive compensation as provided in this Section 3.
(a) Base Salary. The Corporation shall pay Executive a base
salary at an annual rate of not less than $100,000 paid on a monthly basis. The
annual rate of base salary may be increased at the discretion of the
Compensation Committee of the Board (the "Committee"). If increased, the annual
rate of base salary may not thereafter be decreased during the term of this
Agreement.
(b) Annual Incentive Compensation. The Corporation may
pay Executive an annual cash bonus under the provisions of the Company's
Management Incentive Plan or any successor plans, but only if and when
authorized by the Committee.
(c) Performance Shares. The Company shall grant to Executive,
effective as of the Effective Date, 40,000 Performance Shares of the Company's
Common Stock pursuant to the Company's 1996 Stock Incentive Plan and Performance
Stock Plan with respect to the three (3) year performance period ending on
October 31, 2000, to be distributed to Executive, if earned, no later than
January 31, 2001.
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4. Employee Benefits. Executive shall be included, to the
extent eligible thereunder (at the expense of the Company, if appropriate) under
the following plans ( and any plans that later may be adopted) providing
benefits for the Company's employees:
(a) Any thrift plans, profit-sharing plans, stock purchase
plans, and any and all similar and comparable benefits.
(b) Executive shall also be provided with a suitable
automobile allowance under the terms of the Company's executive automobile
program, and officer's and directors' liability insurance coverage in an amount
reasonably available.
5. Termination.
(a) On February 28, 2000. If not earlier terminated,
Executive's employment hereunder shall terminate a the close of business of
February 28, 2000.
(b) Death or Disability. Executive's employment hereunder will
terminate immediately upon Executive's death. The Company may terminate
Executive's employment hereunder immediately giving notice of termination if
Executive is disabled, by reason of physical or mental impairment, to such an
extent that he has been unable to substantially perform his duties under this
Agreement for an aggregate of 180 days (whether business or non-business days
and whether or not consecutive) during any period of twelve consecutive calendar
months.
(c) For "Cause". The Company may terminate Executive's
employment under this Agreement for "Cause " only on the basis of :
(i) Executive's willful and continued failure substantially to
perform his duties with the Company, after a written demand for substantial
performance is delivered to Executive by the Board, which written demand
specifically identifies the manner in which the Board believes Executive has not
substantially performed his duties, or
(ii) Executive's willful engagement in conduct materially and
demonstrably injurious to the Company.
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For purposes of the Agreement, no act of failure to act on Executive's part
shall be considered "willful" unless done, or omitted to be done, by Executive
not in good faith and without reasonable belief that his action or omission was
in the best interest of the Company. Executive shall not be deemed to have been
terminated for Cause unless and until there shall have been delivered to
Executive a copy of a resolution duly adopted by the affirmative vote if not
less than two-thirds of the entire membership of the Board at a meeting of the
Board called and held for that purpose, finding that in the good faith opinion
of the Board, Executive was guilty of conduct set forth in clause (i) or clause
(ii) of this subsection 5(c) and specifying the particulars thereof in detail.
No termination of Executive's employment by the Company for "Cause" shall be
effective unless and until it is communicated by the Company to Executive by a
written notice that refers to either or both of clause (i) or clause (ii) of
this subsection 5(c) as the specific termination provision or provisions relied
upon by the Company and that sets forth in reasonable detail the facts and
circumstances claimed to provide a basis for termination of Executive's
employment under the provision or provisions so indicated
(d) Without "Cause". The Company may terminate Executive's
employment under this Agreement without "Cause" at anytime, effective at such
time as the Board may specify in a motion duly adopted by the affirmative vote
of two-thirds of the members of the Board then in office.
6. Compensation and Benefits Following Termination Without
"Cause". If the Company terminates Executive's employment under this Agreement
without "Cause:"
(a) the Company shall pay to Executive, in immediately
available funds, within 10 days of the date of termination of Executive's
employment, a lump sum amount that is equal to the sum of (A) 24 months of base
salary at the highest rate paid to Executive before the termination, plus (B)
two times the average of the annual cash bonuses, if any, received by Executive
under the provisions of the Company's Incentive Plans or any successor plan with
respect to each of the two most recent fiscal years of the Company ended before
the termination.
(b) the restrictions on any restricted shares held by
Executive immediately before the termination of his employment shall terminate
simultaneously with the termination of his employment;
(c) any options to purchase shares in the Company held by
Executive immediately before the termination of his employment that
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were not otherwise exercisable by Executive shall be exercisable by Executive at
any time during the 90 day period beginning immediately after the date of
termination of his employment; and
(d) the Company shall not be obligated to pay any
compensation, benefits, or perquisites to Executive by reason of this Agreement
after the termination of his employment.
If Executive receives any payments under this Agreement as a result of
termination of his employment following a termination without Cause, those
payments shall be in lieu of any and all other claims or rights that Executive
may have for severance, separation, and/or salary continuation pay upon that
termination of his employment. Nothing in the Section 6 shall diminish
Executive's right to receive any payment or to enjoy any benefit required to be
paid or provided by the Company to Executive under any plan, practice, or
commitment of the Company that would have continued after the termination of
Executive's employment under this agreement if Executive's employment with the
Company had continued through February 28, 2000 and then terminated.
7. Compensation and Benefits Following Termination on Account
of Disability. If the Company terminates Executive's employment under subsection
5(b) of the Agreement by reason of Executive's disability:
(a) the Company shall pay and provide to Executive, not later
than 75 days after the end of the fiscal year in which the termination occurs,
that portion of the total bonus, if any, to which he would have been entitled
had he continued to be employed under this Agreement through the end of the
fiscal year in which the termination occurs, equal to that total bonus
multiplied by a fraction, the numerator of which is the number of days in the
fiscal year ending on or before the date of Executive's termination and the
denominator of which is 365;
(b) the restrictions on any restricted shares held by
Executive immediately before the termination of his employment shall terminate
simultaneously with the termination of his employment; and
(c) the Company shall not be obligated to pay any
compensation, benefits, or perquisites to Executive by reason of this Agreement
after the termination of his employment.
Nothing in this Section 7 shall diminish Executive's right to receive any
payment or to enjoy any benefit required to be paid or provided by the Company
to Executive under any plan, practice, or commitment of the Company that would
have continued after the termination of Executive's
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employment under the Agreement if Executive's employment with the Company had
continued through February 28, 2000 and then terminated.
8. Miscellaneous Services following Termination of Employment.
Following termination of his employment under this Agreement and for so long as
Executive remains a member of the Board, Executive shall make himself available
at all reasonable times for consultation by and with the Company's officers and
directors.
If Executive is called upon to render services of this nature, he shall, in
consideration therefor and as a condition thereto, receive reasonable
compensation for the services rendered and reimbursement for any travel or other
out-of-pocket expenses incurred in connection therewith.
9. Benefit. This Agreement shall inure to the benefit of and
be enforceable by Executive's personal and legal representatives, executors,
administrators, successors, heirs, distributees, devisees, legatees. If
Executive should die while any amounts are still payable to Executive hereunder,
all such amounts, unless otherwise provided herein, shall be paid in accordance
with the terms of this Agreement to Executive's devisee, legatee, or other
designee or, if there be no such designee, to Executive's estate.
10. Successor to the Company. The Company shall require any
successor or assign (whether direct or indirect, by purchase, merger,
consolidation or otherwise) to all or substantially all the business and/or
assets of the Company, by agreement in form and substance satisfactory to
Executive, expressly, absolutely and unconditionally to 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 or assignment had
taken place.
11. Confidential Information and Noncompetition. Executive
agrees and acknowledges that Executive's talents, skills, and experience are
unique, and that the Company has invested considerable efforts and money in
developing and compiling customer lists, supplier lists, and trade and market
information, in developing business techniques and practices, and in maintaining
valuable market relationships; that such items and all other information that
relates to the business of the Company, the business of any customer or supplier
of the Company, or the business of any person, firm, or corporation that
consults with or is affiliated with the Company, constitute for purposes hereof
the "Confidential Information" of the Company; and that the Confidential
Information is valuable property of the Company and is vital to the operation
and continuation of the
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Company's business. Confidential Information shall not include information so
generally known as to be part of the public domain.
Executive acknowledges that the Company has and will disclose Confidential
Information to Executive and afford him access to Confidential Information in
connection with his employment with the Company. Executive agrees that he shall
use such Confidential Information solely for the benefit of the Company.
Executive further acknowledges that the grant of 40,000 Performance Shares
referred to in Section 3(c) is being made by the Company in order to induce
Executive to agree to the restrictions contained in this Section 11 and that
Executive has received valuable consideration commensurate with those
restrictions. Accordingly, Executive agrees and acknowledges that:
(a) Except as required in the performance of his duties as an
employee of the Company, Executive shall not at any time, either directly or
indirectly, use, divulge, disclose, or communicate to any person, firm, or
corporation in any manner whatsoever any Confidential Information.
(b) Executive has been given access to the Company's
Confidential Information solely for purposes relating to his employment by the
Company. Executive shall have no rights in such Confidential Information or any
letters patent, copyrights, or other proprietary rights relating thereto, and
Executive hereby assigns to the Company any supplemental or additional
information relating to the Confidential Information acquired by Executive,
whether solely or in collaboration with others, that relates in any manner to
either the subject of Executive's work for the Company or any business of the
Company during the Contract Period ("Improvements"). Executive will disclose
promptly in writing to the Company all such Improvements or information
supplemental or related thereto, and such Improvements shall be treated for all
purposes as Confidential Information hereunder.
(c) During the Contract Period and thereafter, at the request
of the Company and without expense to Executive, Executive shall cooperate in
the procurement of any patent, copyright, trademark, or trade name protection in
the Company's name that may be necessary or desirable to vest, or to perfect the
record of , title of the Confidential Information in the Company. Executive
agrees to execute all documents and do all things necessary or desirable in any
controversy or otherwise to aid Company in obtaining and enforcing proper
protection of its Confidential Information.
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(d) During the period commencing on the Effective Date and
ending on the second anniversary of the first date on which Executive is neither
employed by the Company nor a member of the Board (the "Restriction Period"),
Executive shall not, directly or indirectly, own, operate, have any other than a
minor financial interest in, be employed by, or in any other manner take part in
or consult with any business that is the same as, similar to, or competitive
with the business of the Company as such business is conducted during the
Contract Period. During the Restriction Period, Executive shall not solicit
(other than for the benefit of the Company during the Contract Period) any sale
or purchase to or from any person who is or was a customer or supplier of the
Company during the term of Executive's employment by the Company, either as an
employee, agent, consultant, licensee, independent contractor, owner, or
otherwise.
(e) At any time upon request of the Company and upon
termination of his employment by the Company, Executive shall deliver to the
Company, and shall not retain for his own or another's use, any and all lists,
information, notes, memoranda, documents, devices, and any other material, and
all copies thereof, relating to Executive's work or the products or business of
the Company of which Executive had knowledge.
(f) If any provision of this Section 11 is determined by any
court of competent jurisdiction to be unenforceable by reason of its extending
for too great a period of time or over too great a geographical area, it shall
be interpreted to extend only over the maximum period of time for which it may
be enforceable, or over the maximum geographical area to which it may be
enforceable, or both; and such partial unenforceability shall not affect any
other provision of this Agreement. Executive acknowledges that, in light of the
proprietary interest of the Company in the Confidential Information, the
restrictions set forth herein are reasonable and that the remedies at law for
the breach of any provision of this Section 11 are inadequate. Accordingly, in
the event of any breach, or reasonable belief as to the existence or imminence
of a breach, of the provisions hereof, the Company shall be entitled to
injunctive relief to enjoin the breach (in addition to any other legal and
equitable remedies that the Company may have, including an equitable accounting
of gain to Executive resulting from the breach), together with all costs and
expenses, including reasonable attorneys' fees, related to the enforcement by
the Company of its rights hereunder.
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12. Validity. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or enforceability of
any other provision of this Agreement, which shall remain in full force an
effect.
13. Counterparts. This Agreement may be executed in one or
more counterparts, each of which shall be deemed to be an original but all or
which together will constitute one and the same instrument.
14. Legal Fees and Expenses. Except for fees incurred in the
enforcement of Section 11 herein, the Company shall pay all legal fees and
expenses that Executive may incur as a result of the Company's contesting the
validity, enforceability, or Executive's interpretation of, or determinations
under, this Agreement.
15. Notices. All notices under this Agreement shall be in
writing and shall be deemed effective when delivered in person, or three days
after deposit thereof in the official U.S. mails, postage prepaid, for delivery
as registered or certified mail, addressed as follows:
If to the Company:
Cuno Incorporated
President and Chief Executive Officer
000 Xxxxxxxx Xxxxxxx
Xxxxxxx, XXXX 00000
If to Executive:
Xxxx X. Xxxxxx
0000 Xxx Xxxx Xxxxx
Xxxxxxxx, XX 00000
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In lieu of personal notice or notice by deposit in the official U.S. mails, a
party may give notice by confirming telegram or fax. Either party may change the
address to which notice to that party may be mailed by notifying the other party
of the change in the manner contemplated in this section.
16. Effect on Existing Termination and Change of Control.
Executive and the Company are parties to a Termination and Change of Control
Agreement dated as of October 1, 1996, pursuant to which Executive may become
entitled to severance and consulting compensation if Executive's employment is
terminated under certain circumstances following a Change in Control, as defined
in that agreement (the "Change in Control Agreement"). Executive and the Company
intend that if a Change in Control, as defined in the Change in Control
Agreement, occurs and thereafter Executive receives any payments pursuant to
Section 6 of this Agreement (any "Section 6 Payments"), the entire amount of
such Section 6 Payments will be treated as damages paid to the Executive by the
Company as a result of the Company's breach of an employment contract with the
Executive, with the result that the payments otherwise due under the Change in
Control Agreement, will be reduced by the full amount of the Section 6 Payments.
The provisions of this Section 6 shall prevail over any inconsistent language in
the Change in Control Agreement and, to the extent necessary to be effective,
shall be deemed to be an amendment to the Change in Control Agreement.
17. Entire Agreement. This agreement expresses the entire
agreement of the parties with respect to the subject matter hereof, and all
promises, representations, understanding, arrangements, and prior agreements are
merged herein and superseded hereby. No person, other than pursuant to a
resolution of the Board, shall have any authority on behalf of the Company to
agree to modify or change this Agreement or anything in reference thereto, and
any such modification or change must be in writing and signed by both parties.
18. Governing Laws. This Agreement has been entered into in,
and is intended to be performed primarily within, the State of Connecticut and
shall be construed, interpreted, and governed in accordance with the laws of the
State of Connecticut.
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IN WITNESS WHEREOF, the parties have executed this Agreement
as of the date first written above.
EXECUTIVE: CUNO INCORPORATED
By: /s/ Xxxx X. Xxxxxx By: /s/ Xxxx X. Xxxxxx
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Xxxx X. Xxxxxx Counsel and Secretary
11/20/97
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