1
Exhibit 10.10
COMMERCIAL INTERTECH CORP.
--------------------------------------------------------------------------------
TERMINATION AND CHANGE OF CONTROL AGREEMENT FOR CORPORATE OFFICERS
--------------------------------------------------------------------------------
2
COMMERCIAL INTERTECH CORP.
--------------------------------------------------------------------------------
TERMINATION AND CHANGE OF CONTROL AGREEMENT
--------------------------------------------------------------------------------
1. Term and Application.....................................................................................1
2. Office and Duties........................................................................................1
3. Salary and Annual Incentive Compensation.................................................................2
4. Long-Term Compensation, Including Stock Options, and Benefits,
Deferred Compensation, and Expense Reimbursement................................................3
5. Termination of Employment................................................................................3
6. Termination Due to Normal Retirement, Death, or Disability...............................................4
7. Termination of Employment For Reasons Other Than Normal Retirement, Death or Disability..................5
8. Termination by the Company Without Cause and Termination by Executive for Good Reason During
the Extended Employment Period...........................................................................7
9. Definitions Relating to Termination Events...............................................................9
10. Excise Tax Limit........................................................................................13
11. Non-Competition and Non-Disclosure; Executive Cooperation...............................................15
12. Governing Law; Disputes; Arbitration....................................................................16
13. Miscellaneous...........................................................................................17
14. Indemnification.........................................................................................19
3
TERMINATION AND CHANGE OF CONTROL AGREEMENT
-------------------------------------------
THIS TERMINATION AND CHANGE OF CONTROL AGREEMENT ("Termination
Agreement") by and between COMMERCIAL INTERTECH CORP., an Ohio corporation (the
"Company"), and J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ ("Executive") is and shall become effective as
of October 1, 1996 (the "Effective Date").
W I T N E S S E T H
-------------------
The Board of Directors of the Company (the "Board") has determined that
it is in the best interests of the Company and its shareholders to assure that
the Company will have the continued dedication of the Executive, notwithstanding
the possibility, threat or occurrence of a Change of Control (as defined below)
of the Company. The Board believes it is imperative to diminish the inevitable
distraction of the Executive by virtue of the personal uncertainties and risks
created by a pending or threatened Change of Control and to encourage the
Executive's full attention and dedication to the Company currently and in the
event of any threatened or pending Change of Control, and to provide the
Executive with compensation and benefits arrangements upon a Change of Control
which ensure that the compensation and benefits expectations of the Executive
will be satisfied and which are competitive with those of other corporations.
Therefore, in order to accomplish these objectives, the Board has caused the
Company to enter into this Termination Agreement.
NOW, THEREFORE, IT IS HEREBY AGREED AS FOLLOWS:
1. TERM AND APPLICATION. The Term of this Termination Agreement shall
commence on the date hereof and shall terminate, except to the extent that any
obligation of the Company under this Termination Agreement remains unpaid as of
such time, on the date five (5) years from the date hereof (subject to earlier
termination in accordance with Section 5 below); PROVIDED, HOWEVER, that on or
after the Extension Date (as defined below), the Term of this Termination
Agreement shall be the Extended Employment Period (as defined below). As long as
the Extension Date has not occurred, commencing on the date five (5) years after
the date of this Termination Agreement and each anniversary date of this
Termination Agreement thereafter, the Term of this Termination Agreement shall
automatically be extended for one (1) additional year unless not later than on
(1) year prior to the date five (5) years after the date of this Termination
Agreement or subsequent anniversary date, the Company or Executive shall have
given written notice to the other of its intention not to extend this
Termination Agreement. If there is a conflict between the Employment Agreement,
if any, between the Company and Executive ("Employment Agreement") and this
Termination Agreement, this Termination Agreement shall supersede the Employment
Agreement; provided the Executive shall receive the more valuable payment, right
or benefit under the Employment Agreement (including without limitation, the
continuation of medical benefits under the Employment Agreement) and this
Termination Agreement. In no event shall any payment, right or benefit under the
Employment Agreement be reduced, eliminated or otherwise adversely affected by
this Termination Agreement. In no event shall Executive receive any payment,
right or benefit under both this Termination Agreement and the Employment
Agreement with respect to the same Date of Termination (as defined below).
2. OFFICE AND DUTIES.
4
(a) GENERALLY. During the Extended Employment Period, the
Executive's position (including status, offices, titles and reporting
requirements), authority, duties and responsibilities shall be at least
commensurate in all material respects with the most significant of those held,
exercised and assigned at any time during the 120-day period immediately
preceding the Extension Date.
During the Extended Employment Period it shall not be a
violation of the Employment Agreement or this Termination Agreement for the
Executive to (i) serve on corporate, civic or charitable boards or committees,
(ii) deliver lectures, fulfill speaking engagements or teach at educational
institutions, and (iii) manage personal investments, so long as the activities
listed in (i), (ii) and (iii) do not significantly interfere with the
performance of the Executive's responsibilities as an employee of the Company in
accordance with this Termination Agreement, and (iv) serve in any capacity
(whether as employee, officer, director or consultant) with respect to CUNO
Incorporated. It is expressly understood and agreed that, to the extent that any
activities have been conducted by the Executive prior to the Extension Date, the
continued conduct of such activities (or the conduct of activities similar in
nature and scope thereto) subsequent to the Extension Date shall not thereafter
be deemed to interfere with the performance of the Executive's responsibilities
to the Company.
(b) PLACE OF EMPLOYMENT. During the Extended Employment
Period, the Executive's services shall be performed at the location where the
Executive was employed immediately preceding the Extension Date or any office or
location less than thirty-five (35) miles from such location.
3. SALARY AND ANNUAL INCENTIVE COMPENSATION.
(a) BASE SALARY. During the Extended Employment Period,
the Executive shall receive an annual base salary, which shall be paid at a
monthly rate, at least equal to twelve (12) times the highest monthly base
salary paid or payable, including any base salary which has been earned but
deferred, to the Executive by the Company and its affiliated companies in
respect of the 12-month period immediately preceding the month in which the
Extension Date occurs ("Annual Base Salary"). During the Extended Employment
Period, the Annual Base Salary shall be reviewed no more than twelve (12) months
after the last salary increase awarded to the Executive prior to the Extension
Date and thereafter at least annually. Any increase in Annual Base Salary shall
not serve to limit or reduce any other obligation to the Executive under this
Termination Agreement. Annual Base Salary shall not be reduced after any such
increase and the term Annual Base Salary as utilized in this Termination
Agreement shall refer to Annual Base Salary as so increased. As used in this
Termination Agreement, the term "affiliated companies" shall include any company
controlled by, controlling or under common control with the Company.
(b) ANNUAL INCENTIVE COMPENSATION. During the Extended
Employment Period, any annual incentive compensation payable to Executive shall
be paid in accordance with the Company's usual practices with respect to payment
of incentive compensation of senior executives, including, without limitation,
the Company's Senior Management Target Incentive Plan and Salaried Employee
Incentive Plan (except to the extent deferred). In addition to Annual Base
Salary, the Executive shall be awarded, for each fiscal year ending during the
Extended Employment Period, an annual bonus (the "Annual Bonus") in cash at
least equal to the highest average of the Executive's annual incentive
compensation for any two (2) full fiscal years in the most recent five (5) full
fiscal years (annualized in the event that the Executive was not employed by the
Company
2
5
for the whole of any such fiscal year or the fiscal year consisted of
less than twelve (12) months) (the "Recent Annual Bonus"). Each such Annual
Bonus shall be paid no later than the end of the third month of the fiscal year
next following the fiscal year for which the Annual Bonus is awarded, unless the
Executive shall elect to defer the receipt of such Annual Bonus.
4. LONG-TERM COMPENSATION, INCLUDING STOCK OPTIONS, AND BENEFITS,
DEFERRED COMPENSATION, AND EXPENSE REIMBURSEMENT
(a) EXECUTIVE COMPENSATION PLANS. During the Extended
Employment Period, the compensation plans, practices, policies and programs, in
the aggregate, including without limitation the long-term incentive features of
the Company's stock option and award plans, shall provide Executive with
benefits, options to acquire Company stock and compensation and incentive award
opportunities substantially no less favorable than those provided by the Company
under such plans and programs to senior executives in similar capacities. During
the Extended Employment Period, in no event shall such plans, practices,
policies and programs provide the Executive with incentive opportunities
(measured with respect to both regular and special incentive opportunities, to
the extent, if any, that such distinction is applicable), in each case, be less
favorable, in the aggregate, than the most favorable of those provided by the
Company and its affiliated companies for the Executive under such plans,
practices, policies and programs as in effect at any time during the 120-day
period immediately preceding the Extension Date or if more favorable to the
Executive, those provided generally at any time after the Extension Date to
other peer executives of the Company and its affiliated companies. For purposes
of this Termination Agreement, all references to "performance share plans" and
"performance shares" refer to such arrangements under the Company's stock option
and award plans and to any performance shares, performance units, stock grants,
or other long-term incentive arrangements adopted as a successor or replacement
to performance shares under such plans or other plans of the Company.
(b) EMPLOYEE AND EXECUTIVE BENEFIT PLANS. During the
Extended Employment Period, benefit plans, practices, policies and programs, in
the aggregate, shall provide Executive with benefits substantially no less
favorable than those provided by the Company to senior executives in similar
capacities. During the Extended Employment Period, in no event shall such plans,
practices, policies and programs provide the Executive with benefits which are
less favorable, in the aggregate, than the most favorable of such plans,
practices, policies and programs in effect for the Executive at any time during
the 120-day period immediately preceding the Extension Date or, if more
favorable to the Executive, those provided generally at any time after the
Extension Date to other peer executives of the Company and its affiliated
companies.
5. TERMINATION OF EMPLOYMENT.
(a) DEATH OR DISABILITY. The Executive's employment
shall terminate automatically upon the Executive's death during the Term of this
Termination Agreement. If the Company determines in good faith that the
Disability of the Executive has occurred during the Term of this Termination
Agreement, it may give to the Executive written notice in accordance with
Section 13(d) of this Termination Agreement of its intention to terminate the
Executive's employment. In such event, the Executive's Date of Termination is
effective on the 30th day after receipt of such notice by the Executive (the
"Disability Effective Date"), provided that, within the thirty (30) days after
such receipt, the Executive shall not have returned to full-time performance of
the Executive's duties.
3
6
(b) NOTICE OF TERMINATION. Any termination by the Company
for Cause, or by the Executive for Good Reason, shall be communicated by Notice
of Termination to the other party hereto given in accordance with Section 13(d)
of this Termination Agreement. For purposes of this Termination Agreement, a
"Notice of Termination" means a written notice which (i) indicates the specific
termination provision in this Termination Agreement relied upon, (ii) to the
extent applicable, sets 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 and (iii) if the Date of Termination (as defined
below) is other than the date of receipt of such notice, specifies the Date of
Termination (which date shall be not more than thirty (30) days after the giving
of such notice). The failure by the Executive or the Company to set forth in the
Notice of Termination any fact or circumstance which contributes to a showing of
Good Reason or Cause shall not waive any right of the Executive or the Company,
respectively, hereunder or preclude the Executive or the Company, respectively,
from asserting such fact or circumstance in enforcing the Executive's or the
Company's rights hereunder.
(c) DATE OF TERMINATION. "Date of Termination" means (i)
if the Executive's employment is terminated by the Company for Cause, or by the
Executive for Good Reason, the date of receipt of the Notice of Termination or
any later date specified therein, as the case may be, (ii) if the Executive's
employment is terminated by the Company other than for Cause or Disability, the
Date of Termination shall be the date on which the Company notifies the
Executive of such Date of Termination, and (iii) if the Executive's employment
is terminated by reason of death or Disability, or due to his voluntary decision
to retire on or after his Normal Retirement Date other than for Good Reason, the
Date of Termination shall be the date of death of the Executive, the Disability
Effective Date, or the date the Executive notifies the Company that the
Executive's employment will terminate, as the case may be. Notwithstanding the
foregoing, solely the transfer of an Executive to employment with an affiliated
companies shall not constitute a termination of employment with the Company.
6. TERMINATION DUE TO NORMAL RETIREMENT, DEATH, OR DISABILITY
Upon an Executive's Date of Termination due to his voluntary
decision to retire on or after his Normal Retirement Date (other than for Good
Reason during the Extended Employment Period), death or Disability, the Term of
this Termination Agreement will immediately terminate and all obligations of the
Company and Executive under this Termination Agreement will immediately cease;
PROVIDED, HOWEVER, that subject to the provisions of Section 13(c), the Company
will pay Executive (or his beneficiaries or estate), and Executive (or his
beneficiaries or estate) will be entitled to receive, the following:
(a) The unpaid portion of Annual Base Salary at the rate
payable, in accordance with Section 3(a) hereof, at the Date of Termination, pro
rated through such Date of Termination, will be paid;
(b) All vested, nonforfeitable amounts owing and accrued
at the Date of Termination under any compensation and benefit plans, programs,
and arrangements in which Executive theretofore participated will be paid under
the terms and conditions of the plans, programs, and arrangements (and
agreements and documents thereunder) pursuant to which such compensation and
benefits were granted, including any supplemental retirement plan in which the
Executive may have participated;
4
7
(c) In lieu of any annual incentive compensation under
Section 3(b) for the year in which Executive's employment terminated (unless
otherwise payable under (b) above), Executive will be paid an amount equal to
the average annual incentive compensation paid to Executive in the three years
immediately preceding the year of termination (or, if Executive was not eligible
to receive or did not receive such incentive compensation for any year in such
three year period, the Executive's target annual incentive compensation for such
year(s) shall be used to calculate average annual incentive compensation)
multiplied by a fraction the numerator of which is the number of days Executive
was employed in the year of termination and the denominator of which is the
total number of days in the year of termination;
(d) Stock options then held by Executive will be
exercisable to the extent and for such periods, and otherwise governed, by the
plans and programs and the agreements and other documents thereunder pursuant to
which such stock options were granted; and
(e) If Executive's Date of Termination is due to
Disability, for the period extending from such Date of Termination until
Executive reaches age 65, Executive shall continue to participate in all
employee benefit plans, programs, and arrangements providing health, medical,
and life insurance in which Executive was participating immediately prior to the
Date of Termination, the terms of which allow Executive's continued
participation, as if Executive had continued in employment with the Company
during such period or, if such plans, programs, or arrangements do not allow
Executive's continued participation, a cash payment equivalent on an after-tax
basis to the value of the additional benefits Executive would have received
under such employee benefit plans, programs, and arrangements in which Executive
was participating immediately prior to the Date of Termination, as if Executive
had received credit under such plans, programs, and arrangements for service and
age with the Company during such period following Executive's Date of
Termination, with such benefits payable by the Company at the same times and in
the same manner as such benefits would have been received by Executive under
such plans (it being understood that the value of any insurance-provided
benefits will be based on the premium cost to Executive, which shall not exceed
the highest risk premium charged by a carrier having an investment grade or
better credit rating).
Amounts which are immediately payable above will be paid as promptly as
practicable after Executive's Date of Termination; PROVIDED, HOWEVER, to the
extent that or the Company would not be entitled to deduct any such payments
under Internal Revenue Code Section 162(m), such payments shall be made at the
earliest time that the payments would be deductible by the Company without
limitation under Section 162(m) (unless this provision is waived by the
Company). Any deferred payments shall be credited with the interest at a rate
applied to prevent the imputation of taxable income under the Code.
7. TERMINATION OF EMPLOYMENT FOR REASONS OTHER THAN NORMAL RETIREMENT,
DEATH OR DISABILITY
(a) TERMINATION BY THE COMPANY FOR CAUSE AND TERMINATION
BY EXECUTIVE. Upon an Executive's Date of Termination by the Company for Cause,
or voluntarily by Executive for reasons other than Good Reason or other than the
attainment of the Normal Retirement Date, death or Disability, the Term will
immediately terminate, and all obligations of the Company under Sections 1
through 4 of this Termination Agreement will immediately cease; PROVIDED,
HOWEVER, that subject to the provisions of Section 13(c), the Company shall pay
Executive (or his or her beneficiaries), and Executive (or his or her
beneficiaries) shall be entitled to receive, the following:
5
8
(i) The unpaid portion of Annual Base Salary at
the rate payable, in accordance with Section
4(a) hereof, at the Date of Termination, pro
rated through such Date of Termination, will
be paid; and
(ii) All vested, nonforfeitable amounts owing and
accrued at the Date of Termination under any
compensation and benefit plans, programs,
and arrangements in which Executive
theretofore participated will be paid under
the terms and conditions of the plans,
programs, and arrangements (and agreements
and documents thereunder) pursuant to which
such compensation and benefits were granted,
including any supplemental retirement plan
in which the Executive may have
participated.
Amounts which are immediately payable above will be paid as promptly as
practicable after the Executive's Date of Termination; PROVIDED, HOWEVER, to the
extent that the Company would not be entitled to deduct any such payments under
Internal Revenue Code Section 162(m), such payments shall be made at the
earliest time that the payments would be deductible by the Company without
limitation under Section 162(m) (unless this provision is waived by the
Company). Any deferred payment shall be credited with the interest at a rate
applied to prevent the imputation of taxable income under the Code.
(b) TERMINATION BY THE COMPANY WITHOUT CAUSE. Upon an
Executive's Date of Termination by the Company prior to the Extension Date
without Cause, the Term will terminate and all obligations of the Company and
Executive under Sections 1 through 4 of this Termination Agreement will
immediately cease; PROVIDED, HOWEVER, that subject to the provisions of Section
13(c) the Company shall pay to the Executive (or his or her beneficiaries) and
Executive (or his or her beneficiaries) shall be entitled to receive within, or
commencing within, thirty (30) days after the Date of Termination, the following
amounts:
(i) the Executive's Annual Base Salary through
the Date of Termination to the extent not
theretofore paid;
(ii) twenty-four (24) semi-monthly payments
during a twelve (12) consecutive month
period equal to the Executive's Annual Base
Salary divided by twenty-four (24);
provided, however, notwithstanding anything
to the contrary in the Termination Agreement
or in the Employment Agreement, none of such
amounts shall qualify Executive for any
incremental benefit under any plan or
program in which he has participated or
continues to participate;
(iii) stock options then held by Executive will be
exercisable to the extent and for such
periods, and otherwise governed, by the
plans and programs and the agreements and
other documents thereunder pursuant to which
such stock options were granted; and
(iv) all vested, nonforfeitable amounts owing and
accrued at the Date of Termination under any
compensation and benefit plans, programs,
and arrangements in which Executive
theretofore participated will be
6
9
paid under the terms and conditions of the
plans, programs, and arrangements (and
agreements and documents thereunder)
pursuant to which such compensation and
benefits were granted, including any
supplemental retirement plan in which the
Executive may have participated.
Amounts which are immediately payable above will be paid as promptly as
practicable after Executive's Date of Termination; PROVIDED, HOWEVER, to the
extent that or the Company would not be entitled to deduct any such payments
under Internal Revenue Code Section 162(m), such payments shall be made at the
earliest time that the payments would be deductible by the Company without
limitation under Section 162(m) (unless this provision is waived by the
Company). Any deferred payment shall be credited with the interest at a rate
applied to prevent the imputation of taxable income under the Code.
8. TERMINATION BY THE COMPANY WITHOUT CAUSE AND TERMINATION BY
EXECUTIVE FOR GOOD REASON DURING THE EXTENDED EMPLOYMENT
PERIOD.
Upon an Executive's Date of Termination during the Extended
Employment Period by the Company without Cause or voluntarily by the Executive
for Good Reason, the Term of this Termination Agreement will immediately
terminate and all obligations of the Company and Executive under Sections 1
through 4 of this Termination Agreement will immediately cease; PROVIDED,
HOWEVER, that subject to the provisions of Section 13(c) the Company shall pay
Executive (or his or her beneficiaries), and Executive (or his or her
beneficiaries) shall be entitled to receive, the following:
(a) the Company shall pay to the Executive in a lump sum
in cash on the Date of Termination the aggregate of the following amounts:
(i) the sum of (1) the Executive's Annual Base
Salary through the Date of Termination to
the extent not theretofore paid, and (2) the
product of (x) the higher of (A) the Recent
Annual Bonus and (B) the Executive's current
Annual Bonus paid or payable for the
Company's fiscal year in which occurs the
Date of Termination, assuming Executive and
Company satisfy all conditions to
Executive's receiving the full Annual Bonus
at target (and annualized for any fiscal
year consisting of less than twelve (12)
full months or during which the Executive
was employed for less than twelve (12) full
months) (such higher amount being referred
to as the "Highest Annual Bonus") and (y) a
fraction, the numerator of which is the
number of days in the current fiscal year
through the Date of Termination, and the
denominator of which is 365;
(ii) the amount equal to two (2) times the sum of
(1) the Executive's Annual Base Salary and
(2) the Highest Annual Bonus. (Payment of
any amount under Section 8(a)(i) shall not
constitute a payment or discharge of the
Company's obligation under Section 8(a)(ii),
and VICE VERSA);
7
10
(iii) in lieu of any payment in respect of
performance shares, or other long term
incentive awards granted prior to the
Extension Date or in accordance with Section
4(a) hereof, for any performance period not
completed at the Executive's Date of
Termination, an amount equal to the cash
amount payable plus the value of any shares,
dividends or other property (valued at the
Date of Termination) payable upon the
achievement of the then existing performance
in respect of each tranche of such
performance shares or awards as if the Date
of Termination were the end of the
performance period, but in no event less
than one hundred percent (100%) of target,
multiplied by (A) with respect to any
tranche as of the Date of Termination for
which at least fifty percent (50%) of the
performance period has elapsed, one hundred
percent (100%), and (B) with respect to any
tranche as of the Date of Termination for
which less than fifty percent (50%) of the
performance period has elapsed, a fraction,
the numerator of which is the number of days
that have elapsed in the relevant
performance period and the denominator of
which is the total number of days in the
relevant performance period; and
(iv) to the extent not covered in (i), (ii),
(iii) or (iv), all vested, nonforfeitable
amounts owing or accrued at the Date of
Termination under any other compensation and
benefit plans, programs, and arrangements in
which Executive theretofore participated,
including any supplemental retirement plan
in which the Executive may have
participated, including any additional
accruals provided under such plan due to the
Change of Control, will be paid under the
terms and conditions of the plans, programs,
and arrangements (and agreements and
documents thereunder) pursuant to which such
compensation and benefits were granted.
(b) Stock options then held by Executive will be
exercisable and restricted stock held by the Executive will be vested to the
extent and for such periods, and otherwise governed, by the plans and programs
(and the agreements and other documents thereunder) pursuant to which such stock
options or restricted stock were granted;
(c) For two (2) years after the Executive's Date of
Termination, or such longer period as may be provided by the terms of the
appropriate plan, program, practice or policy, the Company shall continue
welfare plan benefits to the Executive and/or the Executive's family at least
equal to those which would have been provided to them in accordance with the
plans, programs, practices and policies described in Section 4(b) of this
Termination Agreement if the Executive's employment had not been terminated or,
if more favorable to the Executive, as in effect generally at any time
thereafter with respect to other peer executives of the Company and its
affiliated companies and their families, provided, however, that if the
Executive is employed with another employer and is eligible to receive medical
or other welfare benefits under another employer-provided plan, the medical and
other welfare benefits described herein shall be secondary to those provided
under such other plan during such applicable period of eligibility. For two (2)
years after the Executive's Date of Termination, or such longer period as may be
provided by the terms of the plan, the Company shall continue tax-qualified
defined contribution and supplemental retirement plan accruals for the
Executive, including participation and crediting of service, contributions and
8
11
compensation at least equal to what the Executive would have accrued in
accordance with such plans of the Company or affiliated companies if the
Executive's employment had not been terminated or, if more favorable to the
Executive, as in effect generally at any time thereafter with respect to other
peer executives of the Company and its affiliated companies. If such welfare
benefit or tax-qualified defined contribution plans, programs, or arrangements
do not allow Executive's continued participation, a cash payment equivalent on
an after-tax basis to the value of the additional benefits Executive would have
received under such employee benefit plans, programs, and arrangements in which
Executive was participating immediately prior to the Date of Termination, as if
Executive had received credit under such plans, programs, and arrangements for
service, compensation and age with the Company during such period following
Executive's Date of Termination, with such benefits payable by the Company at
the same times and in the same manner as such benefits would have been received
by Executive under such plans (it being understood that the value of any
insurance-provided benefits will be based on the premium cost to Executive,
which shall not exceed the highest risk premium charged by a carrier having an
investment grade or better credit rating);
(d) outplacement services the scope and provider of which
shall be selected by the Executive in his sole discretion, provided by the
Company at its sole expense as incurred;
(e) for two (2) years after Executive's Date of
Termination, a continued application of the Company's auto leasing policy in
effect on the Extension Date with respect to the Executive;
(f) for two (2) years after Executive's Date of
Termination, the payment of all regular lunch and country club membership dues
or fees in respect of any lunch or country club of which Executive is a member
on Executive's Date of Termination; and
(g) for two (2) years after Executive's Date of
Termination, the payment of normal insurance premiums with respect to the
insurance policies on the life of Executive under the Company's Group
Replacement Insurance Program, or any successor thereto.
9. DEFINITIONS RELATING TO TERMINATION EVENTS.
(a) "CAUSE." For purposes of this Termination Agreement,
"Cause" shall mean Executive's gross misconduct (as defined herein). For
purposes of this definition, "gross misconduct" shall mean (A) a felony
conviction in a court of law under applicable federal or state laws which
results in material damage to the Company or any of its subsidiaries or
materially impairs the value of Executive's services to the Company, or (B)
willfully engaging in one or more acts, or willfully omitting to act in
accordance with duties hereunder, which is demonstrably and materially damaging
to the Company or any of its subsidiaries, including acts and omissions that
constitute gross negligence in the performance of Executive's duties under this
Termination Agreement. Notwithstanding the foregoing, Executive may not be
terminated for Cause unless and until there shall have been delivered to him a
copy of a resolution duly adopted by a majority affirmative vote of the
membership of the Board of Directors of the Company (the "Board") (excluding
Executive, if he is then a member) at a meeting of the Board called and held for
such purpose (after giving Executive reasonable notice specifying the nature of
the grounds for such termination and not less than 30 days to correct the acts
or omissions complained of, if correctable, and affording Executive the
opportunity, together with his counsel,
9
12
to be heard before the Board) finding that, in the good faith opinion of the
Board, Executive was guilty of conduct which constitutes Cause as set forth in
this Section 9(a).
(b) "CHANGE OF CONTROL." For the purpose of this
Termination Agreement, a "Change of Control" shall mean:
(i) The acquisition by any individual, entity or
group (within the meaning of Section
13(d)(3) or 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the
"Exchange Act")) (a "Person") of beneficial
ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of
twenty percent (20%) or more of either (A)
the then-outstanding shares of common stock
of the Company (the "Outstanding Company
Common Stock") or (B) the combined voting
power of the then-outstanding voting
securities of the Company entitled to vote
generally in the election of directors (the
"Outstanding Company Voting Securities");
provided, however, that for purposes of this
subsection (i), the following acquisitions
shall not constitute a Change of Control:
(A) any acquisition directly from the
Company, (B) any acquisition by the Company,
(C) any acquisition by any employee benefit
plan (or related trust) sponsored or
maintained by the Company or any corporation
controlled by the Company, (D) any
acquisition by a lender to the Company
pursuant to a debt restructuring of the
Company, or (E) any acquisition by any
corporation pursuant to a transaction which
complies with clauses (A), (B) and (C) of
subsection (iii) of this Section 9;
(ii) Individuals who, as of the date hereof,
constitute the Board (the "Incumbent Board")
cease for any reason to constitute at least
a majority of the Board; provided, however,
that any individual becoming a director
subsequent to the date hereof whose
election, or nomination for election by the
Company's shareholders, was approved by a
vote of at least a majority of the directors
then comprising the Incumbent Board shall be
considered as though such individual were a
member of the Incumbent Board, but
excluding, for this purpose, any such
individual whose initial assumption of
office occurs as a result of an actual or
threatened election contest with respect to
the election or removal of directors or
other actual or threatened solicitation of
proxies or consents by or on behalf of a
Person other than the Board;
(iii) Consummation of a reorganization, merger or
consolidation or sale or other disposition
of all or substantially all of the assets of
the Company (a "Business Combination"), in
each case, unless, following such Business
Combination, (A) all or substantially all of
the individuals and entities who were the
beneficial owners, respectively, of the
Outstanding Company Common Stock and
Outstanding Company Voting Securities
immediately prior to such Business
Combination beneficially own, directly or
indirectly, more than fifty percent (50%)
of, respectively, the then-outstanding
shares of common stock and the combined
voting power of the then-
10
13
outstanding voting securities entitled to
vote generally in the election of directors,
as the case may be, of the corporation
resulting from such Business Combination
(including, without limitation, a
corporation which as a result of such
transaction owns the Company or all or
substantially all of the Company's assets
either directly or through one or more
subsidiaries) in substantially the same
proportions as their ownership, immediately
prior to such Business Combination of the
Outstanding Company Common Stock and
Outstanding Company Voting Securities, as
the case may be, (B) no Person (excluding
any corporation resulting from such Business
Combination or any employee benefit plan (or
related trust) of the Company or such
corporation resulting from such Business
Combination) beneficially owns, directly or
indirectly, twenty percent (20%) or more of,
respectively, the then outstanding shares of
common stock of the corporation resulting
from such Business Combination, or the
combined voting power of the then
outstanding voting securities of such
corporation except to the extent that such
ownership existed prior to the Business
Combination and (C) at least a majority of
the members of the board of directors of the
corporation resulting from such Business
Combination were members of the Incumbent
Board at the time of the execution of the
initial agreement, or of the action of the
Board, providing for such Business
Combination; or
(iv) Approval by the shareholders of the Company
of a complete liquidation or dissolution of
the Company.
(c) "DISABILITY" means the failure of Executive to render
and perform the services required of him under this Termination Agreement, for a
total of 180 days or more during any consecutive 12 month period, because of any
physical or mental incapacity or disability as determined by a physician or
physicians selected by the Company and reasonably acceptable to Executive,
unless, within 30 days after Executive has received written notice from the
Company of a proposed Date of Termination due to such absence, Executive shall
have returned to the full performance of his duties hereunder and shall have
presented to the Company a written certificate of Executive's good health
prepared by a physician selected by Company and reasonably acceptable to
Executive.
(d) "EXTENDED EMPLOYMENT PERIOD" shall mean the period
commencing on the Extension Date and ending on the third anniversary of such
date.
(e) "EXTENSION DATE" shall mean the first date during the
Term of this Termination Agreement on which a Change of Control occurs. Anything
in this Termination Agreement or the Employment Agreement to the contrary
notwithstanding, if a Change of Control occurs and if the Executive's employment
with the Company is terminated prior to the date on which the Change of Control
occurs, and if it is reasonably demonstrated by the Executive that such
termination of employment (i) was at the request of a third party who has taken
steps reasonably calculated to effect a Change of Control or (ii) otherwise
arose in connection with or anticipation of a Change of Control, then for all
purposes of the Employment Agreement the
11
14
"Extension Date" shall mean the date immediately prior to the date of such
termination of employment.
(f) "GOOD REASON." For purposes of this Termination
Agreement, "Good Reason" shall mean the occurrence of a Change of Control and
following which but not later than the second anniversary of the date of the
Change of Control there occurs, without Executive's prior written consent:
(i) the assignment to the Executive of any
duties inconsistent in any respect with the
Executive's position (including status,
offices, titles and reporting requirements),
authority, duties or responsibilities as
contemplated by Section 2(a) of this
Termination Agreement, or any other action
by the Company which results in a diminution
in such position, authority, duties or
responsibilities, excluding for this purpose
an isolated, insubstantial and inadvertent
action not taken in bad faith and which is
remedied by the Company promptly after
receipt of notice thereof given by the
Executive;
(ii) any failure by the Company to comply with
any of the provisions of Section 4 of this
Termination Agreement or the Employment
Agreement, other than an isolated,
insubstantial and inadvertent failure not
occurring in bad faith and which is remedied
by the Company promptly after receipt of
notice thereof given by the Executive;
(iii) the Company's requiring the Executive to be
based at any office or location other than
as provided in Section 2(b) hereof or the
Company's requiring the Executive to travel
on Company business to a substantially
greater extent than required immediately
prior to the Effective Date;
(iv) any failure by the Company to perform any
material obligation under, or breach by the
Company of any material provision of, this
Termination Agreement;
(v) any purported termination by the Company of
the Executive's employment otherwise than as
expressly permitted by this Termination
Agreement; or
(vi) any failure by the Company to comply with
and satisfy Section 12(b) of this
Termination Agreement.
For purposes of this Section, any good faith determination of "Good Reason" made
by the Executive shall be conclusive.
(g) "NORMAL RETIREMENT DATE." For purposes of this
Termination Agreement, an Executive's Normal Retirement Date is his or her
attainment of age sixty-five (65).
12
15
10. EXCISE TAX LIMIT.
If Executive becomes entitled to one or more payments (with a
"payment" including, without limitation, the vesting of an option or other
non-cash benefit or property), whether pursuant to the terms of this Termination
Agreement or any other plan, arrangement, or agreement with the Company or any
affiliated company (the "Total Payments"), which are or could become subject to
the tax imposed by Section 4999 of the Internal Revenue Code of 1986, as amended
(the "Code") (or any similar tax that may hereafter be imposed) (the "Excise
Tax"), the Company shall reduce or eliminate the Total Payments, but only to the
extent necessary, such that no amount of the Total Payments shall be subject to
the Excise Tax.
For purposes of determining whether any of the Total Payments
will be subject to the Excise Tax:
(a) No part of the Total Payments shall be treated as
subject to the Excise Tax to the extent that, in the written opinion of
independent legal counsel, compensation consultants or auditors of nationally
recognized standing ("Independent Advisors") selected by the Company and
reasonably acceptable to Executive, the Total Payments (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 in excess of the base
amount within the meaning of Section 280G(b)(3) of the Code or are otherwise not
subject to the Excise Tax;
(b) The amount of the Total Payments which shall be
treated as subject to the Excise Tax shall be equal to the lesser of (i) the
total amount of the Total Payments or (ii) the total amount of excess parachute
payments within the meaning of Section 280G(b)(1) of the Code (after applying
clause (a) above); and
(c) The value of any non-cash benefits or any deferred
payment or benefit shall be determined by the Independent Advisors in accordance
with the principles of Sections 280G(d)(3) and (4) of the Code.
The Company agrees to indemnify and hold Executive harmless
from any tax, penalty or other charge or liability imposed upon Executive
resulting directly or indirectly from a Total Payment's (in whole or in part)
being subject to the Excise Tax after giving effect to any reduction directed by
the Company pursuant to the first paragraph of this Section 10, or from any tax,
penalty or other charge or liability resulting directly or indirectly from the
Company's obligation to indemnify and hold Executive harmless hereunder,
including investigation and attorneys' fees and expenses ("Indemnification
Obligation").
The Executive shall notify the Company in writing of any claim
by the Internal Revenue Service that, if successful, would require the payment
by the Company under its Indemnification Obligation. Such notification shall be
given as soon as practicable but no later than ten (10) business days after the
Executive is informed in writing of such claim and shall apprise the Company of
the nature of such claim and the date on which such claim is requested to be
paid. The Executive shall not pay such claim prior to the expiration of the
30-day period following the date on which it gives such notice to the Company
(or such shorter period ending on the date that any payment of taxes with
respect to such claim is due). If the Company notifies the Executive in
13
16
writing prior to the expiration of such period that it desires to contest such
claim, the Executive shall:
(i) give the Company any information reasonably
requested by the Company relating to such
claim,
(ii) take such action in connection with
contesting such claim as the Company shall
reasonably request in writing from time to
time, including, without limitation,
accepting legal representation with respect
to such claim by an attorney reasonably
selected by the Company,
(iii) cooperate with the Company in good faith in
order effectively to contest such claim, and
(iv) permit the Company to participate in any
proceedings relating to such claim;
provided, however, that the Company shall bear and pay directly all costs and
expenses (including additional interest and penalties) incurred in connection
with such contest and shall indemnify and hold the Executive harmless, on an
after-tax basis, for any Excise Tax or income or employment tax (including
interest and penalties with respect thereto) imposed as a result of such
representation and payment of costs and expenses. Without limitation on the
foregoing provisions of this Section 10, the Company shall control all
proceedings taken in connection with such contest and, at its sole option, may
pursue or forgo any and all administrative appeals, proceedings, hearings and
conferences with the taxing authority in respect of such claim and may, at its
sole option, either direct the Executive to pay the tax claimed and ▇▇▇ for a
refund or to contest the claim in any permissible manner, and the Executive
agrees to prosecute such contest to a determination before any administrative
tribunal, in a court of initial jurisdiction and in one or more appellate
courts, as the Company shall determine; provided, however, that if the Company
directs the Executive to pay such claim and ▇▇▇ for a refund, the Company shall
advance the amount of such payment to the Executive, on an interest-free basis
and shall indemnify and hold the Executive harmless, on an after-tax basis, from
any Excise Tax or income or employment tax (including income or employment or
interest or penalties with respect thereto) imposed with respect to such advance
or with respect to any imputed income with respect to such advance; and further
provided that any extension of the statute of limitations relating to payment of
taxes for the taxable year of the Executive with respect to which such contested
amount is claimed to be due is limited solely to such contested amount.
Furthermore, the Company's control of the contest shall be limited to issues
with respect to its Indemnification Obligation hereunder and the Executive shall
be entitled to settle or contest, as the case may be, any other issue raised by
the Internal Revenue Service or any other taxing authority. If, after the
receipt by the Executive of an amount advanced by the Company pursuant to this
Section 10, the Executive becomes entitled to receive any refund with respect to
such claim, the Executive shall (subject to the Company's complying with the
requirements of this Section 10) promptly pay to the Company the amount of such
refund (together with any interest paid or credited thereon after taxes
applicable thereto). If, after the receipt by the Executive of an amount
advanced by the Company pursuant to this Section 10, a determination is made
that the Executive shall not be entitled to any refund with respect to such
claim and the Company does not notify the Executive in writing of its intent to
contest such denial of refund prior to the expiration of thirty (30) days after
such determination, then such advance shall be forgiven
14
17
and shall not be required to be repaid and the amount of such advance shall
offset, to the extent thereof, the amount of Indemnification Obligation payment
required to be paid.
11. NON-COMPETITION AND NON-DISCLOSURE; EXECUTIVE COOPERATION.
(a) NON-COMPETITION. Without the consent in writing of
the Board, upon the Executive's Date of Termination for any reason, Executive
will not, for a period of six (6) consecutive calendar months thereafter, acting
alone or in conjunction with others, directly or indirectly (i) engage (either
as owner, investor, partner, stockholder, employer, employee, consultant,
advisor or director (other than as below)) in any business in the continental
United States which is a material business conducted by the Company or any of
its subsidiaries on the date of the consummation of a Change of Control in which
he has been directly engaged, or has supervised as an executive, on the date of
the consummation of the Change of Control and which is directly in competition
with a material business conducted by the Company or any of its subsidiaries on
the date of the consummation of the Change of Control; (ii) induce any customers
of the Company or any of its subsidiaries with whom Executive has had contacts
or relationships, directly or indirectly, during and within the scope of his
employment with the Company or any of its subsidiaries, to curtail or cancel
their business with such companies or any of them; or (iii) induce, or attempt
to influence, any employee of the Company or any of its subsidiaries to
terminate employment. The provisions of subparagraphs (i), (ii), and (iii) above
are separate and distinct commitments independent of each of the other
subparagraphs. It is agreed that the ownership of not more than one percent of
the equity securities of any company having securities listed on an exchange or
regularly traded in the over-the-counter market shall not, of itself, be deemed
inconsistent with clause (i) of this paragraph (a), neither shall service
(whether as an employee, officer, director or consultant) with respect to CUNO
Incorporated, nor shall service as a member of a board of directors on which
Executive is serving on the Date of Termination (including any successor board
thereto) be deemed, of itself, to be inconsistent with clause (i) of this
paragraph (a). The Executive and the Company agree that the value to be assigned
to the obligations of the Executive under this paragraph (a) is an amount equal
to fifty percent (50%) of Executive's Annual Base Salary and Recent Annual
Bonus. Violation of Section 11(a) or (b) shall not require Executive to return
any payment or benefit previously distributed to Executive.
(b) NON-DISCLOSURE. Executive shall not at any time
(including following Executive's Date of Termination for any reason), disclose,
use, transfer, or sell, except in the course of employment with or other service
to the Company, any confidential or proprietary information of the Company or
any of its subsidiaries so long as such information has not otherwise been
disclosed or is not otherwise in the public domain, except as required by law or
pursuant to legal process.
(c) COOPERATION WITH REGARD TO LITIGATION. Executive
agrees to cooperate with the Company (including following Executive's Date of
Termination for any reason), on a reasonable basis when cooperation would not
unreasonably interfere with Executive's employment by making himself available
to testify on behalf of the Company or any subsidiary or affiliate of the
Company, in any action, suit, or proceeding, whether civil, criminal,
administrative, or investigative, and to assist the Company, or any subsidiary
or affiliate of the Company, in any such action, suit, or proceeding, by
providing information and meeting and consulting with the Board and its
representatives or counsel, or representatives or counsel of or to the Company,
or any subsidiary or affiliate of the Company, as requested; PROVIDED, HOWEVER,
this subsection (c) shall not apply to any action between the Executive and the
Company to enforce this Termination Agreement. The Company
15
18
agrees to reimburse Executive, on an after-tax basis, for all expenses actually
incurred in connection with his provision of testimony or assistance.
(d) RELEASE OF EMPLOYMENT CLAIMS. Executive agrees, as a
condition to receipt of the termination payments and benefits provided
hereunder, that he will execute a release agreement, in a form satisfactory to
the Company, releasing any and all claims arising out of Executive's employment
(other than claims made pursuant to any indemnities provided under the articles
or by-laws of the Company, under any directors or officers liability insurance
policies maintained by the Company or enforcement of this Termination
Agreement).
(e) SURVIVAL. Notwithstanding any provision of this
Termination Agreement to the contrary, the provisions of this Section 11 shall
survive the termination or expiration of this Termination Agreement, shall be
valid and enforceable, and shall be a condition precedent to the Executive (or
his or her beneficiaries) receiving any amounts payable hereunder. The
obligations of Executive under this Section 11 and any comparable type of
obligation under the Employment Agreement are expressly conditioned upon
Company's satisfaction of its obligations to Executive under this Termination
Agreement and the Employment Agreement.
12. GOVERNING LAW; DISPUTES; ARBITRATION.
(a) GOVERNING LAW. This Termination Agreement is governed
by and is to be construed, administered, and enforced in accordance with the
laws of the State of Ohio, without regard to Ohio conflicts of law principles,
except insofar as federal laws and regulations may be applicable. If under the
governing law, any portion of this Termination Agreement is at any time deemed
to be in conflict with any applicable statute, rule, regulation, ordinance, or
other principle of law, such portion shall be deemed to be modified or altered
to the extent necessary to conform thereto or, if that is not possible, to be
omitted from this Termination Agreement. The invalidity of any such portion
shall not affect the force, effect, and validity of the remaining portion
hereof. If any court determines that any provision of Section 11 is
unenforceable because of the duration or geographic scope of such provision, it
is the parties' intent that such court shall have the power to modify the
duration or geographic scope of such provision, as the case may be, to the
extent necessary to render the provision enforceable and, in its modified form,
such provision shall be enforced.
(b) REIMBURSEMENT OF EXPENSES IN ENFORCING RIGHTS AND
FUNDING OF OBLIGATION. On and after the Extension Date, all reasonable costs and
expenses (including fees and disbursements of counsel) incurred by Executive in
seeking to enforce rights pursuant to this Termination Agreement shall be paid
on behalf of or reimbursed to Executive promptly by the Company, whether or not
Executive is successful in asserting such rights; PROVIDED, HOWEVER, that no
reimbursement shall be made of such expenses relating to any unsuccessful
assertion of rights if and to the extent that Executive's assertion of such
rights was in bad faith or frivolous, as determined by independent counsel
mutually acceptable to Executive and the Company and made without reference to
or not related to a Change of Control. Immediately prior to the Extension Date
but not less than five (5) days prior thereto, the Company agrees to maintain a
minimum amount in a rabbi trust (or to provide to the trustee of such rabbi
trust) an irrevocable letter of credit in an amount equal to such minimum amount
(and callable at will by such trustee) sufficient to fund any such litigation
and the aggregate present value of all liabilities potentially owed to the
Executive under this Agreement as if he or she had incurred a termination of
employment by the Company other than for Cause.
16
19
13. MISCELLANEOUS.
(a) INTEGRATION. This Termination Agreement modifies and
supersedes any and all prior agreements and understandings between the parties
hereto with respect to the employment of Executive by the Company and its
subsidiaries, except for the Employment Agreement and contracts relating to
compensation under executive compensation and employee benefit plans of the
Company and only to the extent enforceable. Subject to the rights, benefits and
obligations provided for in such executive compensation contracts and employee
benefit plans of the Company, this Termination Agreement and the Employment
Agreement together constitute the entire agreement among the parties with
respect to the matters herein provided, and no modification or waiver of any
provision hereof shall be effective unless in writing and signed by the parties
hereto. Executive shall not be entitled to any payment, right or benefit under
this Termination Agreement which duplicates a payment, right or benefit received
or receivable by Executive under such prior agreements and understandings with
the Company or under any benefit or compensation plan of the Company.
(b) NON-TRANSFERABILITY. Neither this Termination
Agreement nor the rights or obligations hereunder of the parties hereto shall be
transferable or assignable by Executive, except in accordance with the laws of
descent and distribution or as specified in Section 13(c). The Company may
assign this Termination Agreement and the Company's rights and obligations
hereunder, and shall assign this Termination Agreement, to any Successor (as
hereinafter defined) which, by operation of law or otherwise, continues to carry
on substantially the business of the Company prior to the event of succession,
and the Company shall, as a condition of the succession, require such Successor
to agree to assume the Company's obligations and be bound by this Termination
Agreement. For purposes of this Termination Agreement, "Successor" shall mean
any person that succeeds to, or has the practical ability to control (either
immediately or with the passage of time), the Company's business directly, by
merger or consolidation, or indirectly, by purchase of the Company's voting
securities or all or substantially all of its assets, or otherwise.
(c) BENEFICIARIES. Executive shall be entitled to
designate (and change, to the extent permitted under applicable law) a
beneficiary or beneficiaries to receive any compensation or benefits payable
hereunder following Executive's death.
(d) NOTICES. Whenever under this Termination Agreement it
becomes necessary to give notice, such notice shall be in writing, signed by the
party or parties giving or making the same, and shall be served on the person or
persons for whom it is intended or who should be advised or notified, by Federal
Express or other similar overnight service or by certified or registered mail,
return receipt requested, postage prepaid and addressed to such party at the
address set forth below or at such other address as may be designated by such
party by like notice:
If to the Company: Commercial Intertech Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: Secretary
17
20
With copies to: Commercial Intertech Corp.
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: General Counsel
If to Executive: ___________________________________
___________________________________
___________________________________
If the parties by mutual agreement supply each other with telecopier numbers for
the purposes of providing notice by facsimile, such notice shall also be proper
notice under this Termination Agreement. In the case of Federal Express or other
similar overnight service, such notice or advice shall be effective when sent,
and, in the cases of certified or registered mail, shall be effective 2 days
after deposit into the mails by delivery to the U.S. Post Office.
(e) REFORMATION. The invalidity of any portion of this
Termination Agreement shall not deemed to render the remainder of this
Termination Agreement invalid.
(f) HEADINGS. The headings of this Termination Agreement
are for convenience of reference only and do not constitute a part hereof.
(g) NO GENERAL WAIVERS. The failure of any party at any
time to require performance by any other party of any provision hereof or to
resort to any remedy provided herein or at law or in equity shall in no way
affect the right of such party to require such performance or to resort to such
remedy at any time thereafter, nor shall the waiver by any party of a breach of
any of the provisions hereof be deemed to be a waiver of any subsequent breach
of such provisions. No such waiver shall be effective unless in writing and
signed by the party against whom such waiver is sought to be enforced.
(h) NO OBLIGATION TO MITIGATE. Executive shall not be
required to seek other employment or otherwise to mitigate Executive's damages
on or after Executive's Date of Termination nor shall the amount of any payment
hereunder be reduced by any compensation earned by the Executive as a result of
employment by another employer; PROVIDED, HOWEVER, that, to the extent Executive
receives from a subsequent employer health or other insurance benefits that are
substantially similar to the benefits referred to in this Termination Agreement,
any such benefits to be provided by the Company to Executive following the Term
shall be correspondingly reduced.
(i) OFFSETS; WITHHOLDING. The amounts required to be paid
by the Company to Executive pursuant to this Termination Agreement shall not be
subject to offset, counterclaim, recoupment, defense or other claim, right or
action which the Company may have against Executive or others, other than with
respect to any amounts that are owed to the Company by Executive due to his
receipt of Company funds as a result of his fraudulent activity. The foregoing
and other provisions of this Termination Agreement notwithstanding, all payments
to be made to Executive under this Termination Agreement will be subject to
required withholding taxes and other required deductions.
18
21
(j SUCCESSORS AND ASSIGNS. This Termination Agreement
shall be binding upon and shall inure to the benefit of Executive, his heirs,
executors, administrators and beneficiaries, and shall be binding upon and inure
to the benefit of the Company and its successors and assigns.
14. INDEMNIFICATION.
All rights to indemnification by the Company now existing in
favor of Executive as provided in the Company's Articles of Incorporation or
Code of Regulations or pursuant to other agreements in effect on or immediately
prior to the Extension Date shall continue in full force and effect from the
Extension Date (including all periods after the expiration of the Term), and the
Company shall also advance expenses for which indemnification may be ultimately
claimed as such expenses are incurred to the fullest extent permitted under
applicable law, subject to any requirement that Executive provide an undertaking
to repay such advances if it is ultimately determined that Executive is not
entitled to indemnification; PROVIDED, HOWEVER, that any determination required
to be made with respect to whether Executive's conduct complies with the
standards required to be met as a condition of indemnification or advancement of
expenses under applicable law and the Company's Articles of Incorporation, Code
of Regulations, or other agreement shall be made by independent counsel mutually
acceptable to Executive and the Company (except to the extent otherwise required
by law). After the date hereof, the Company shall not amend its Articles of
Incorporation or Code of Regulations or any agreement in any manner which
adversely affects the rights of Executive to indemnification thereunder. Any
provision contained herein notwithstanding, this Termination Agreement shall not
limit or reduce any rights of Executive to indemnification pursuant to
applicable law. In addition, the Company will maintain directors' and officers'
liability insurance in effect and covering acts and omissions of Executive,
during the Term and for a period of six years thereafter, on terms substantially
no less favorable as those in effect on the Extension Date.
IN WITNESS WHEREOF, Executive has hereunto set his hand and
the Company has caused this instrument to be duly executed as of the day and
year first above written.
COMMERCIAL INTERTECH CORP.
By: _________________________________
Name:________________________________
Title:_______________________________
J. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
_____________________________________
19