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Exhibit 10.02
Revised to show additions agreed on May 14, 1999
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VIA EXPRESS
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April 9, 1999
Personal and Confidential
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Xx. Xxxxxxx X. Xxxxxxx
00000 Xxxx Xxxx Xxxx
Xxxxxx Xxxx, XX 00000
Dear Xxxxx:
On behalf of Commercial Intertech Corp., I am pleased to extend an offer of
employment, the terms of which are detailed as follows:
- TITLE
President & Chief Operating Officer, effective May 1, 1999, or as soon
as practicable.
- RESPONSIBILITIES
Reporting to the Chief Executive Officer, you will have overall
responsibility for "top line" and "bottom line" results via guidance
and direction of management in the development, production, promotion
and sale of the Company's products.
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Xx. Xxxxxxx X. Xxxxxxx -2- April 9, 1999
- BOARD OF DIRECTORS
As corporate officers must be elected by the Board of Directors, this
action will be recommended to our Board after your acceptance.
You will also be named a Director by the Board as soon as practicable
after your acceptance and thereafter submitted for election by the
shareholders at the March 2000 annual meeting of shareholders.
- EMPLOYMENT AGREEMENT
While it is our desire that you will complete your business career at
Commercial Intertech, an initial employment agreement is for a three
year period. If you should involuntarily without cause leave the
Company, we will provide a severance amount equal to your annual base
salary paid in monthly installments for a period of two years plus
customary benefits.
- SUCCESSION
Effective March 1, 2000, you will be named Chief Executive Officer of
Commercial Intertech Corp. In addition, if not appointed Chief
Executive Officer by March, 2000, you have the option to leave the
Company and receive 36 months of salary, customary benefits, and a
relocation allowance to return to Chicago.
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Xx. Xxxxxxx X. Xxxxxxx -3- April 9, 1999
- COMPENSATION
Base Salary - $375,000 per year
1999 Guaranteed Bonus - $120,000 payable in December 1999.
With your promotion to Chief Executive Officer on March 1, 2000, the
Management Evaluation & Compensation Committee will increase your
salary appropriate with your additional responsibilities (range of
$430K-$570K) and establish your annual incentive target at 70% of base
salary (maximum of 140% upon achievement of performance goals).
- LONG-TERM INCENTIVES
The following long-term incentives, which represent median levels for
the Chief Executive Officer position for comparable sized durable goods
manufacturers, will be granted to you effective May 1, 1999, or the
date you join the Company:
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Xx. Xxxxxxx X. Xxxxxxx -4- April 9, 1999
Restricted Shares -
15,000 shares granted conditioned only upon your continued
employment by the Company for five years. During the five year
restricted period you will receive dividends and vote the
shares, although the share certificates will be legended and
held in escrow by our Corporate Secretary.
If you should involuntarily without cause leave the Company at
any time during the five year period, the shares will vest 20%
per year of accrued employment with the Company.
Non-qualified Stock Options -
A grant of NQSO of 35,000 shares for ten years, exercisable
one-half in two years and one-half in three years. The
exercise price will be the fair market value on the date of
the grant.
Performance Shares -
30,000 shares to be granted for the three-year period
commencing November 1998, with maximum 45,000 shares that can
be earned based on achievement of performance targets (senior
officers are measured on corporate XXX) during the three-year
performance cycle. At the end of the three-year period
dividends will be paid on all earned shares.
- SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN
In addition to participation in the Salaried Pension Plan, the Company
agrees to provide a Supplemental Executive Retirement Plan (SERP)
utilizing base salary and annual incentive to be valued at age 65 to be
equivalent to 25 years of service with Commercial Intertech with an
offset for any qualified plans from prior employers. It is understood
that an accommodation will be developed that will provide some SERP
coverage in the event of a change of control prior to vesting in five
years.
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Xx. Xxxxxxx X. Xxxxxxx -5- April 9, 1999
- BENEFIT PROGRAMS
You will be entitled to participate in various Company benefit programs
as soon as eligibility requirements are fulfilled. Such programs
include salaried pension plan, 401(k), non-qualified savings and stock
purchase plan, medical, hospitalization, GRIP (life), disability, and
accidental death and dismemberment insurance. Some modest contributions
on your part may be required depending upon selected coverage levels.
- AUTOMOBILE ALLOWANCE
Commercial Intertech will provide a $1100 per month allowance plus
insurance and gasoline credit card.
- VACATION
You will be eligible for four weeks vacation annually.
- RELOCATION
The Company will provide customary key executive reimbursement for
moving expenses and normal costs associated with the purchase of a
residence in the Youngstown area and the sale of your primary residence
in Illinois.
Additionally, Commercial Intertech agrees to provide reasonable
temporary living expenses for a mutually agreed upon period, and a
payment of one-half month base salary for incidental relocation
expenses.
- CHANGE OF CONTROL
In the event of termination after a change of control of the Company,
you will receive compensation and benefits commensurate with your
position.
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Xx. Xxxxxxx X. Xxxxxxx -6- April 9, 1999
- MEMBERSHIPS
The Company will pay initiation fees and dues for memberships to The
Youngstown Country Club and The Youngstown Club. Any assessments will
be your responsibility.
- TAX SERVICE
The Company will pay for the annual preparation of your Federal and
State tax returns by an outside firm.
Xxxxx, over the last several weeks we have spent many hours discussing
Commercial Intertech and your role in its continuing growth. From the outset of
our discussions, I have been operating from the premise that we are really
searching for our next Chief Executive Officer - the fifth in the history of the
Company - with the Chief Operating Officer the interim step to this final
position. Please understand that we feel your initial responsibilities as COO
critical at this point in our history - there are many challenges and much to
accomplish. But the COO position and its accompanying responsibilities is not a
"make-or-break" assignment. That is to say, you are not on trial, i.e., "I must
prove my worth as COO before I receive the CEO promotion." The Board of
Directors joins me in expressing our collective confidence in your ability to
lead the Company as the next CEO.
I personally look forward to working with you and I am excited about the future
of Commercial Intertech under your leadership.
In summary, this offer of employment is conditioned upon the completion of a
full physical examination to the satisfaction of the Company physician.
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Xx. Xxxxxxx X. Xxxxxxx -7- April 9, 1999
Xxxxx, I hope you find this offer acceptable. If you agree with the terms,
please sign the acceptance on a copy of the letter and return it to me.
We look forward to welcoming Xxxxxxx and you into the Commercial Intertech
family!
Sincerely,
Acceptance
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The above terms and conditions are accepted this ____ day of _______________,
1999.
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Xxxxxxx X. Xxxxxxx
