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EXHIBIT 10.aa
EMPLOYMENT CONTINUATION AGREEMENT
THIS AGREEMENT between BW/IP, Inc., a Delaware corporation (the
"Company"), and <> <> (the "Executive") dated as of this
2nd day of January 1996.
W I T N E S E T H :
WHEREAS, the Company has employed the Executive in an officer position
and has determined that the Executive holds an important position with the
Company;
WHEREAS, the Company believes that, in the event it is
confronted with a situation that could result in a change in ownership or
control of the Company, continuity of management will be essential to its
ability to evaluate and respond to such situation in the best interests of
shareholders;
WHEREAS, the Company understands that any such situation will
present significant concerns for the Executive with respect to his financial and
job security;
WHEREAS, the Company desires to assure itself of the
Executive's services during the period in which it is confronting such a
situation and to provide the Executive certain financial assurances to enable
the Executive to perform the responsibilities of his position without undue
distraction and to exercise his judgment without bias due to his personal
circumstances;
WHEREAS, to achieve these objectives, the Company and the
Executive desire to enter into an agreement providing the Company and the
Executive with certain rights and obligations upon the occurrence of a Change of
Control or Potential Change of Control (as defined in Section 2);
NOW, THEREFORE, in consideration of the premises and mutual covenants
herein contained, it is hereby agreed by and between the Company and the
Executive as follows:
1. Operation of Agreement. (a) Effective Date. The effective
date of this Agreement shall be the date on which a Change of Control occurs
(the "Effective Date"), provided that, except as provided in Section 1(b), if
the Executive is not employed by the Company on the Effective Date, this
Agreement shall be void and without effect.
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(b) Termination of Employment Following a Potential Change of
Control. Notwithstanding Section 1(a), if (i) the Executive's employment is
terminated by the Company Without Cause (as defined in Section 6(c)) after the
occurrence of a Potential Change of Control and prior to the occurrence of a
Change of Control and (ii) a Change of Control occurs within one year of such
termination, the Executive shall be deemed, solely for purposes of determining
his rights under this Agreement, to have remained employed until the date such
Change of Control occurs and to have been terminated by the Company Without
Cause immediately after this Agreement becomes effective.
2. Definitions. (a) Change of Control. For the purposes of
this Agreement, a "Change of Control" shall be deemed to have occurred if:
(i) any Person (as defined below) has acquired "beneficial
ownership" (within the meaning of Rule 13d-3, as promulgated under
Section 13(d) of the Securities Exchange Act of 1934, as amended (the
"Exchange Act")) of securities of the Company representing 30% or more
of the combined Voting Power (as defined below) of the Company's
securities;
(ii) within any 24 month period, the persons who were
directors of the Company immediately before the beginning of such
period (the "Incumbent Directors") shall cease (for any reason other
than death) to constitute at least a majority of the Board or the board
of directors of any successor to the Company, provided that any
director who was not a director at the beginning of such period shall
be deemed to be an Incumbent Director if such director (A) was elected
to the Board by, or on the recommendation of or with the approval of,
at least two-thirds of the directors who then qualified as Incumbent
Directors either actually or by prior operation of this Section
2(a)(ii) and (B) was not designated by a person who has entered into an
agreement with the Company to effect a Corporate Event, as described in
Section 2(a)(iii); or
(iii) the stockholders of the Company approve a merger,
consolidation, share exchange, division, sale or other disposition of
all or substantially all of the assets of the Company (a "Corporate
Event"), as a result of which the shareholders of the Company
immediately prior to such Corporate Event shall not hold, directly or
indirectly, immediately following such Corporate Event a majority of
the Voting Power of (x) in the case of a merger or consolidation, the
surviving or resulting corporation, (y) in the case of a share
exchange, the acquiring corporation or (z) in the case of a division or
a sale or other disposition of assets, each surviving, resulting or
acquiring corporation which, immediately following the relevant
Corporate Event, holds more than 10% of the consolidated assets of the
Company immediately prior to such Event.
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(b) Potential Change of Control. For the purposes of this
Agreement, a Potential Change of Control shall be deemed to have occurred if:
(i) a Person commences a tender offer (with reasonably
adequate financing) for securities representing at least 20% of the
Voting Power of the Company's securities;
(ii) the Company enters into an agreement the consummation of
which would constitute a Change of Control;
(iii) proxies for the election of directors of the Company are
solicited by anyone other than the Company; or
(iv) any other event occurs which is deemed to be a Potential
Change of Control by the Board.
(c) Person Defined. For purposes of this Section 2, "Person"
shall have the meaning ascribed to such term in Section 3(a)(9) of the Exchange
Act, as supplemented by Section 13(d)(3) of the Exchange Act; provided, however,
that Person shall not include (i) the Company or any subsidiary of the Company
or (ii) any employee benefit plan sponsored by the Company or any subsidiary of
the Company.
(d) Voting Power Defined. A specified percentage of "Voting
Power" of a company shall mean such number of the Voting Securities as shall
enable the holders thereof to cast such percentage of all the votes which could
be cast in an annual election of directors (without consideration of the rights
of any class of stock other than the common stock of the company to elect
directors by a separate class vote); and "Voting Securities" shall mean all
securities of a company entitling the holders thereof to vote in an annual
election of directors (without consideration of the rights of any class of stock
other than the common stock of the company to elect directors by a separate
class vote).
3. Employment Period. Subject to Section 6 of this Agreement,
the Company agrees to continue the Executive in its employ, and the Executive
agrees to remain in the employ of the Company, for the period (the "Employment
Period") commencing on the Effective Date and ending on the second anniversary
of the Effective Date. Notwithstanding the foregoing, if, prior to the Effective
Date, the Executive is demoted to a lower position than the position held on the
date first set forth above, the Board may declare that this Agreement shall be
without force and effect by written notice delivered to the Executive (i) within
30 days following such demotion and (ii) prior to the occurrence of a Potential
Change of Control or a Change of Control.
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4. Position and Duties. (a) No Reduction in Position. During
the Employment Period, the Executive's position (including titles), authority
and responsibilities shall be at least commensurate with those held, exercised
and assigned immediately prior to the Effective Date. It is understood that, for
purposes of this Agreement, such position, authority and responsibilities shall
not be regarded as not commensurate merely by virtue of the fact that a
successor shall have acquired all or substantially all of the business and/or
assets of the Company as contemplated by Section 12(b) of this Agreement. The
Executive's services shall be performed at the location where the Executive was
employed immediately preceding the Effective Date.
(b) Business Time. From and after the Effective Date, the
Executive agrees to devote substantially all of his attention during normal
business hours to the business and affairs of the Company, to the extent
necessary to discharge his responsibilities hereunder, except for (i) time spent
in managing his personal, financial and legal affairs, serving on corporate,
civic or charitable boards or committees or working for any charitable or civic
organization, in each case only if and to the extent not materially interfering
with the performance of such responsibilities, and (ii) periods of vacation and
sick leave to which he is entitled. It is expressly understood and agreed that
the Executive's continuing to serve on any boards and committees on which he is
serving or with which he is otherwise associated immediately preceding the
Effective Date shall be deemed not to interfere with the performance of the
Executive's services to the Company.
5. Compensation. (a) Base Salary. During the Employment
Period, the Executive shall receive a base salary at a monthly rate at least
equal to the monthly salary paid to the Executive by the Company and any of its
affiliated companies immediately prior to the Effective Date. The base salary
shall be reviewed at least once each year after the Effective Date, and may be
increased (but not decreased) at any time and from time to time by action of the
Board or any committee thereof or by any individual having authority to take
such action in accordance with the Company's regular practices. The Executive's
base salary, as it may be increased from time to time, shall hereafter be
referred to as "Base Salary". Neither the Base Salary nor any increase in Base
Salary after the Effective Date shall serve to limit or reduce any other
obligation of the Company hereunder.
(b) Annual Bonus. During the Employment Period, in addition to
the Base Salary, for each fiscal year of the Company ending during the
Employment Period, the Executive shall be afforded the opportunity to receive an
annual bonus on terms and conditions no less favorable to the Executive (taking
into account reasonable changes in the Company's goals and objectives) than the
annual bonus opportunity that had been made available to the Executive for the
fiscal year ended immediately prior to the Effective Date (the "Annual Bonus
Opportunity"). Any amount payable in respect of the Annual Bonus Opportunity
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shall be paid as soon as practicable following the year for which the amount (or
prorated portion) is earned or awarded, but not later than 90 days after the
close of the calendar year for which the bonus is payable, unless electively
deferred by the Executive pursuant to any deferral programs or arrangements that
the Company may make available to the Executive.
(c) Long-term Incentive Compensation Programs. During the
Employment Period, the Executive shall participate in all long-term incentive
compensation programs for key executives at a level that is commensurate with
the Executive's participation in such plans immediately prior to the Effective
Date, or, if more favorable to the Executive, at the level made available to the
Executive or other similarly situated officers at any time thereafter.
(d) Benefit Plans. During the Employment Period, the Executive
(and, to the extent applicable, his dependents) shall be entitled to participate
in or be covered under all pension, retirement, deferred compensation, savings,
medical, dental, health, disability, group life, accidental death and travel
accident insurance plans and programs of the Company and its affiliated
companies at a level that is commensurate with the Executive's participation in
such plans immediately prior to the Effective Date, or, if more favorable to the
Executive, at the level made available to the Executive or other similarly
situated officers at any time thereafter.
(e) Expenses. During the Employment Period, the Executive
shall be entitled to receive prompt reimbursement for all reasonable expenses
incurred by the Executive in accordance with the policies and procedures of the
Company as in effect immediately prior to the Effective Date. Notwithstanding
the foregoing, the Company may apply the policies and procedures in effect after
the Effective Date to the Executive, if such policies and procedures are more
favorable to the Executive than those in effect immediately prior to the
Effective Date.
(f) Vacation, Perquisites and Fringe Benefits. During the
Employment Period, the Executive shall be entitled to paid vacation, perquisites
and fringe benefits at a level that is commensurate with the paid vacation,
perquisites and fringe benefits available to the Executive immediately prior to
the Effective Date, or, if more favorable to the Executive, at the level made
available from time to time to the Executive or other similarly situated
officers at any time thereafter.
(g) Indemnification. During and after the Employment Period,
the Company shall indemnify the Executive and hold the Executive harmless from
and against any claim, loss or cause of action arising from or out of the
Executive's performance as an officer, director or employee of the Company or
any of its Subsidiaries or in any other capacity, including any fiduciary
capacity, in which the Executive serves at the request of the Company to the
maximum
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extent permitted by applicable law and the Company's Certificate of
Incorporation and By-Laws (the "Governing Documents"), provided that in no event
shall the protection afforded to the Executive hereunder be less than that
afforded under the Governing Documents as in effect immediately prior to the
Effective Date.
(h) Office and Support Staff. The Executive shall be entitled
to an office with furnishings and other appointments, and to secretarial and
other assistance, at a level that is at least commensurate with that provided to
other similarly situated officers.
6. Termination. (a) Death, Disability or Retirement. Subject
to the provisions of Section 1 hereof, this Agreement shall terminate
automatically upon the Executive's death, termination due to "Disability" (as
defined below) or voluntary retirement under any of the Company's retirement
plans as in effect from time to time. For purposes of this Agreement, Disability
shall mean the Executive's inability to perform the duties of his position, as
determined in accordance with the policies and procedures applicable with
respect to the Company's long-term disability plan, as in effect immediately
prior to the Effective Date.
(b) Voluntary Termination. Notwithstanding anything in this
Agreement to the contrary, following a Change of Control the Executive may, upon
not less than 30 days' written notice to the Company, voluntarily terminate
employment for any reason (including early retirement under the terms of any of
the Company's retirement plans as in effect from time to time), provided that
any termination by the Executive pursuant to Section 6(d) on account of Good
Reason (as defined therein) shall not be treated as a voluntary termination
under this Section 6(b).
(c) Cause. The Company may terminate the Executive's
employment for Cause. For purposes of this Agreement, "Cause" means (i) the
Executive's conviction of a felony or the entering by the Executive of a plea of
nolo contendere to a felony charge, (ii) the Executive's gross neglect, willful
malfeasance or willful gross misconduct in connection with his employment
hereunder which has had a significant adverse effect on the business of the
Company and its subsidiaries, unless the Executive reasonably believed in good
faith that such act or nonact was in or not opposed to the best interests of the
Company, or (iii) repeated material violations by the Executive of his
obligations under Section 4 of this Agreement, which violations are demonstrably
willful and deliberate on the Executive's part and which result in material
damage to the Company's business or reputation.
(d) Good Reason. Following the occurrence of a Change of
Control, the Executive may terminate his employment for Good Reason. For
purposes of this Agreement, "Good Reason" means the occurrence of any of the
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following, without the express written consent of the Executive, after the
occurrence of a Change of Control:
(i) (A) the assignment to the Executive of any duties
inconsistent in any material adverse respect with the Executive's
position, authority or responsibilities as contemplated by Section 4 of
this Agreement, or (B) any other material adverse change in such
position, including titles, authority or responsibilities;
(ii) any failure by the Company to comply with any of the
provisions of Section 5 of this Agreement, other than an insubstantial
or inadvertent failure 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 more than 35 miles (or such other distance as shall
be set forth in the Company's relocation policy as in effect at the
Effective Time) from that location at which he performed his services
specified under the provisions of Section 4 immediately prior to the
Change of Control, except for travel reasonably required in the
performance of the Executive's responsibilities;
(iv) any other material breach of this Agreement by the
Company; or
(v) any failure by the Company to obtain the assumption and
agreement to perform this Agreement by a successor as contemplated by
Section 12(b).
In no event shall the mere occurrence of a Change of Control, absent any further
impact on the Executive, be deemed to constitute Good Reason.
(e) 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(e).
For purposes of this Agreement, a "Notice of Termination" means a written notice
given, in the case of a termination for Cause, within 10 business days of the
Company's having actual knowledge of the events giving rise to such termination,
and in the case of a termination for Good Reason, within 180 days of the
Executive's having actual knowledge of the events giving rise to such
termination, and which (i) indicates the specific termination provision in this
Agreement relied upon, (ii) 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 termination date
is other than the date of receipt of such notice, specifies the termination date
of the Executive's employment (which date shall be not more than 15 days after
the giving of such notice). The failure
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by the Executive to set forth in the Notice of Termination any fact or
circumstance which contributes to a showing of Good Reason shall not waive any
right of the Executive hereunder or preclude the Executive from asserting such
fact or circumstance in enforcing his rights hereunder.
(f) Date of Termination. For the purpose of this Agreement,
the term "Date of Termination" means (i) in the case of a termination for which
a Notice of Termination is required, the date of receipt of such Notice of
Termination or, if later, the date specified therein, as the case may be, and
(ii) in all other cases, the actual date on which the Executive's employment
terminates during the Employment Period.
7. Obligations of the Company upon Termination. (a) Death or
Disability. If the Executive's employment is terminated during the Employment
Period by reason of the Executive's death or Disability, this Agreement shall
terminate without further obligations to the Executive or the Executive's legal
representatives under this Agreement other than those obligations accrued
hereunder at the Date of Termination, and the Company shall pay to the Executive
(or his beneficiary or estate) (i) the Executive's full Base Salary through the
Date of Termination (the "Earned Salary"), (ii) any vested amounts or vested
benefits owing to the Executive under the Company's otherwise applicable
employee benefit plans and programs, including any compensation previously
deferred by the Executive (together with any accrued earnings thereon) and not
yet paid by the Company and any accrued vacation pay not yet paid by the Company
(the "Accrued Obligations"), and (iii) any other benefits payable due to the
Executive's death or Disability under the Company's plans, policies or programs
(the "Additional Benefits").
Any Earned Salary shall be paid in cash in a single lump sum
as soon as practicable, but in no event more than 30 days (or at such earlier
date required by law), following the Date of Termination. Accrued Obligations
and Additional Benefits shall be paid in accordance with the terms of the
applicable plan, program or arrangement.
(b) Cause and Voluntary Termination. If, during the Employment
Period, the Executive's employment shall be terminated for Cause or voluntarily
terminated by the Executive (other than on account of Good Reason following a
Change of Control), the Company shall pay the Executive (i) the Earned Salary in
cash in a single lump sum as soon as practicable, but in no event more than 10
days, following the Date of Termination, and (ii) the Accrued Obligations in
accordance with the terms of the applicable plan, program or arrangement.
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(c) Termination by the Company other than for Cause and
Termination by the Executive for Good Reason.
(i) Lump Sum Payments. If, during the Employment Period, the
Company terminates the Executive's employment other than for Cause or
following a Change of Control the Executive terminates his employment
for Good Reason, the Company shall pay to the Executive the following
amounts:
(A) the Executive's Earned Salary;
(B) a cash amount (the "Severance Amount") equal to two
and one fourth times the sum of (x) the Executive's
annual Base Salary and (y) an amount equal to the
greater of (1) the last annual bonus paid to the
Executive and (2) the product of (i) the Executive's
annual Base Salary and (ii) the average of the
percentages of the Executive's then current Base
Salary paid as an annual bonus with respect to each
of the last three calendar years ended prior to the
Change of Control;
(C) the Accrued Obligations.
The Earned Salary and Severance Amount shall be paid in cash in a
single lump sum as soon as practicable, but in no event more than 30
days (or at such earlier date required by law), following the Date of
Termination. Accrued Obligations shall be paid in accordance with the
terms of the applicable plan, program or arrangement.
(ii) Continuation of Benefits. If, during the Employment
Period, the Company terminates the Executive's employment other than
for Cause, or following a Change of Control the Executive terminates
his employment for Good Reason, the Executive (and, to the extent
applicable, his dependents) shall be entitled, after the Date of
Termination until the earlier of (1) the second anniversary of the Date
of Termination (the "End Date") and (2) the date the Executive becomes
eligible for comparable benefits under a similar plan, policy or
program of a subsequent employer, to continue participation in all of
the Company's employee and executive welfare and fringe benefit plans
(the "Benefit Plans"). To the extent any such benefits cannot be
provided under the terms of the applicable plan, policy or program, the
Company shall provide a comparable benefit under another plan or from
the Company's general assets. The Executive's participation in the
Benefit Plans will be on the same terms and conditions that would have
applied had the Executive continued to be employed by the Company
through the End Date.
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(iii) Car Allowance and Outplacement Services. In addition to
the benefits continuation described in Section 7(c)(ii), the Company
shall also continue to provide the Executive with the same car
allowance that was made available to the Executive immediately prior to
the Change of Control (or the use of the same automobile, if the
Company provided the Executive with such an automobile in lieu of a car
allowance) until the earlier of (x) the time that the Executive obtains
other employment or (y) the first anniversary of the Date of
Termination. The Company shall also make available to the Executive at
its expense the full services of a qualified independent outplacement
firm to assist the Executive in obtaining other employment.
(d) Discharge of the Company's Obligations. Except as
expressly provided in the last sentence of this Section 7(d), the amounts
payable to the Executive pursuant to this Section 7 (whether or not reduced
pursuant to Section 7(e)) following termination of his employment shall be in
full and complete satisfaction of the Executive's rights under this Agreement
and any other claims he may have in respect of his employment by the Company or
any of its Subsidiaries. Such amounts shall constitute liquidated damages with
respect to any and all such rights and claims and, upon the Executive's receipt
of such amounts, the Company shall be released and discharged from any and all
liability to the Executive in connection with this Agreement or otherwise in
connection with the Executive's employment with the Company and its
Subsidiaries. Nothing in this Section 7(d) shall be construed to release the
Company from its commitment to indemnify the Executive and hold the Executive
harmless from and against any claim, loss or cause of action arising from or out
of the Executive's performance as an officer, director or employee of the
Company or any of its Subsidiaries or in any other capacity, including any
fiduciary capacity, in which the Executive served at the request of the Company
to the maximum extent permitted by applicable law and the Governing Documents.
(e) Limit on Payments by the Company.
(i) Application of Section 7(e). In the event that any amount
or benefit paid or distributed to the Executive pursuant to this
Agreement, taken together with any amounts or benefits otherwise paid
or distributed to the Executive by the Company or any affiliated
company (collectively, the "Covered Payments"), would be an "excess
parachute payment" as defined in Section 280G of the Code and would
thereby subject the Executive to the tax (the "Excise Tax") imposed
under Section 4999 of the Code (or any similar tax that may hereafter
be imposed), the provisions of this Section 7(e) shall apply to
determine the amounts payable to Executive pursuant to this Agreement.
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(ii) Calculation of Benefits. Immediately following delivery
of any Notice of Termination, the Company shall notify the Executive of
the aggregate present value of all termination benefits to which he
would be entitled under this Agreement and any other plan, program or
arrangement as of the projected Date of Termination, together with the
projected maximum payments, determined as of such projected Date of
Termination that could be paid without the Executive being subject to
the Excise Tax.
(iii) Imposition of Payment Cap. If the aggregate value of all
compensation payments or benefits to be paid or provided to the
Executive under this Agreement and any other plan, agreement or
arrangement with the Company exceeds the amount which can be paid to
the Executive without the Executive's incurring an Excise Tax, then the
amounts payable to the Executive under this Section 7 shall be reduced
(but not below zero) to the maximum amount which may be paid hereunder
without the Executive's becoming subject to such an Excise Tax (such
reduced payments to be referred to as the "Payment Cap"). In the event
that the Executive receives reduced payments and benefits hereunder,
the Executive shall have the right to designate which of the payments
and benefits otherwise provided for in this Agreement that he will
receive in connection with the application of the Payment Cap.
(iv) Application of Section 280G. For purposes of determining
whether any of the Covered Payments will be subject to the Excise Tax
and the amount of such Excise Tax,
(A) (x) whether Covered Payments are "parachute payments"
within the meaning of Section 280G of the Code, and
(y) whether there are "parachute payments" in excess
of the "base amount" (as defined under Section
280G(b)(3) of the Code) shall be determined in good
faith by the Company's independent certified public
accountants appointed prior to the Effective Date
(the "Accountants") or tax counsel selected by such
Accountants, and
(B) the value of any non-cash benefits or any deferred
payment or benefit shall be determined by the
Accountants in accordance with the principles of
Section 280G of the Code.
(v) Adjustments in Respect of the Payment Cap. If the
Executive receives reduced payments and benefits under this Section
7(e) (or this Section 7(e) is determined not to be applicable to the
Executive because the Accountants conclude that Executive is not
subject to any Excise Tax) and it is established pursuant to a final
determination of a court or an Internal Revenue Service proceeding (a
"Final Determination") that, notwithstanding the good faith of the
Executive and the Company in
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applying the terms of this Agreement, the aggregate "parachute
payments" within the meaning of Section 280G of the Code paid to the
Executive or for his benefit are in an amount that would result in the
Executive's being subject to an Excise Tax, then any amounts actually
paid to or on behalf of the Executive which are treated as excess
parachute payments shall be deemed for all purposes to be a loan to the
Executive made on the date of receipt of such excess payments, which
the Executive shall have an obligation to repay to the Company on
demand, together with interest on such amount at the applicable Federal
rate (as defined in Section 1274(d) of the Code) from the date of the
payment hereunder to the date of repayment by the Executive. If the
Executive receives reduced payments and benefits by reason of this
Section 7(e) and it is established pursuant to a Final Determination
that the Executive could have received a greater amount without
exceeding the Payment Cap, then the Company shall promptly thereafter
pay the Executive the aggregate additional amount which could have been
paid without exceeding the Payment Cap, together with interest on such
amount at the applicable Federal rate (as defined in Section 1274(d) of
the Code) from the original payment due date to the date of actual
payment by the Company.
8. Non-exclusivity of Rights. Except as expressly provided
herein, nothing in this Agreement shall prevent or limit the Executive's
continuing or future participation in any benefit, bonus, incentive or other
plan or program provided by the Company or any of its affiliated companies and
for which the Executive may qualify, nor shall anything herein limit or
otherwise prejudice such rights as the Executive may have under any other
agreements with the Company or any of its affiliated companies, including
employment agreements or stock option agreements. Amounts which are vested
benefits or which the Executive is otherwise entitled to receive under any plan
or program of the Company or any of its affiliated companies at or subsequent to
the Date of Termination shall be payable in accordance with such plan or
program.
9. No Mitigation or Offset. The Executive shall have no
obligation to seek other employment and, except as expressly provided in
Sections 7(c)(iii) and 7(c)(iv), there shall be no offset against amounts due to
Executive under this Agreement on account of any remuneration attributable to
subsequent employment that he may obtain. The Company's obligation to make the
payments provided for in this Agreement and otherwise to perform its obligations
hereunder shall not be affected by any circumstances, including, without
limitation, any set-off, counterclaim, recoupment, defense or other right which
the Company may have against the Executive or others whether by reason of the
subsequent employment of the Executive or otherwise. In the event that the
Executive shall in good faith give a Notice of Termination for Good Reason and
it shall thereafter be determined that Good Reason did not exist, the employment
of the Executive shall, unless the Company and the Executive, shall otherwise
mutually agree, be deemed to have terminated, at the date of giving such
purported
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Notice of Termination, by mutual consent of the Company and the Executive and
the Executive shall be entitled to receive only his Earned Salary and the
Accrued Obligations which he would have been entitled to receive upon a
voluntary termination.
10. Legal Fees and Expenses. If the Executive asserts any
claim in any contest (whether initiated by the Executive or by the Company) as
to the validity, enforceability or interpretation of any provision of this
Agreement, the Company shall pay the Executive's legal expenses (or cause such
expenses to be paid) including, without limitation, his reasonable attorney's
fees, on a quarterly basis, upon presentation of proof of such expenses in a
form acceptable to the Company, provided that the Executive shall reimburse the
Company for such amounts, plus simple interest thereon at the 90-day United
States Treasury ▇▇▇▇ rate as in effect from time to time, compounded annually,
if the Executive shall not prevail, in whole or in part, as to any material
issue as to the validity, enforceability or interpretation of any provision of
this Agreement.
11. Confidential Information; Company Property. By and in
consideration of the salary and benefits to be provided by the Company
hereunder, including the severance arrangements set forth herein, the Executive
agrees that:
(a) Confidential Information. The Executive shall hold in a
fiduciary capacity for the benefit of the Company all secret or confidential
information, knowledge or data relating to the Company or any of its affiliated
companies, and their respective businesses, (i) obtained by the Executive during
his employment by the Company or any of its affiliated companies and (ii) not
otherwise public knowledge (other than by reason of an unauthorized act by the
Executive). After termination of the Executive's employment with the Company,
the Executive shall not, without the prior written consent of the Company,
unless compelled pursuant to an order of a court or other body having
jurisdiction over such matter, communicate or divulge any such information,
knowledge or data to anyone other than the Company and those designated by it.
(b) Company Property. Except as expressly provided herein,
promptly following the Executive's termination of employment, the Executive
shall return to the Company all property of the Company and all copies thereof
in the Executive's possession or under his control, except that the Executive
may retain his personal notes, diaries, Rolodexes, calendars and correspondence.
(c) Injunctive Relief and Other Remedies with Respect to
Covenants. The Executive acknowledges and agrees that the covenants and
obligations of the Executive with respect to confidentiality and Company
property relate to special, unique and extraordinary matters and that a
violation of any of the terms of such covenants and obligations will cause the
Company irreparable injury for which adequate remedies are not available at law.
Therefore, the
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Executive agrees that the Company shall be entitled to an injunction,
restraining order or such other equitable relief (without the requirement to
post bond) restraining Executive from committing any violation of the covenants
and obligations contained in this Section 11. These remedies are cumulative and
are in addition to any other rights and remedies the Company may have at law or
in equity. In no event shall an asserted violation of the provisions of this
Section 11 constitute a basis for deferring or withholding any amounts otherwise
payable to the Executive under this Agreement.
12. Successors. (a) This Agreement is personal to the
Executive and, without the prior written consent of the Company, shall not be
assignable by the Executive otherwise than by will or the laws of descent and
distribution. This Agreement shall inure to the benefit of and be enforceable by
the Executive's legal representatives.
(b) This Agreement shall inure to the benefit of and be
binding upon the Company and its successors. The Company shall require any
successor to all or substantially all of the business and/or assets of the
Company, whether direct or indirect, by purchase, merger, consolidation,
acquisition of stock or otherwise, by an agreement in form and substance
satisfactory to the Executive, expressly to assume and agree to perform this
Agreement in the same manner and to the same extent as the Company would be
required to perform if no such succession had taken place.
13. Miscellaneous. (a) Applicable Law. This Agreement shall be
governed by and construed in accordance with the laws of the State of Delaware,
applied without reference to principles of conflict of laws.
(b) Arbitration. Except to the extent provided in Section
11(c), any dispute or controversy arising under or in connection with this
Agreement shall be resolved by binding arbitration. The arbitration shall be
held in Los Angeles, California and, except to the extent inconsistent with this
Agreement, shall be conducted in accordance with the Expedited Employment
Arbitration Rules of the American Arbitration Association (or such other
voluntary arbitration rules applicable to employment contract disputes) in
effect at the time of the arbitration, supplemented, as necessary, by those
principles which would be applied by a court of law or equity. The arbitrator
shall be acceptable to both the Company and the Executive. If the parties cannot
agree on an acceptable arbitrator, the dispute shall be heard by a panel of
three arbitrators, one appointed by each of the parties and the third appointed
by the other two arbitrators.
(c) Amendments. This Agreement may not be amended or modified
otherwise than by a written agreement executed by the parties hereto or their
respective successors and legal representatives.
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(d) Entire Agreement. This Agreement constitutes the entire
agreement between the parties hereto with respect to the matters referred to
herein. No other agreement relating to the terms of the Executive's employment
by the Company, oral or otherwise, shall be binding between the parties unless
it is in writing and signed by the party against whom enforcement is sought.
There are no promises, representations, inducements or statements between the
parties other than those that are expressly contained herein. The Executive
acknowledges that he is entering into this Agreement of his own free will and
accord, and with no duress, that he has read this Agreement and that he
understands it and its legal consequences.
(e) Notices. All notices and other communications hereunder
shall be in writing and shall be given by hand-delivery to the other party or by
registered or certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to the Executive: at the home address of the Executive noted on the
records of the Company
If to the Company: BW/IP INC.
▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇ ▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: General Counsel
with a copy to: Debevoise & ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn.: ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, Esq.
or to such other address as either party shall have furnished to the other in
writing in accordance herewith. Notice and communications shall be effective
when actually received by the addressee.
(f) Tax Withholding. The Company shall withhold from any
amounts payable under this Agreement such Federal, state or local taxes as shall
be required to be withheld pursuant to any applicable law or regulation.
(g) Severability; Reformation. In the event that one or more
of the provisions of this Agreement shall become invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of the
remaining provisions contained herein shall not be affected thereby. In the
event that any of the provisions of any of Section 11(a) are not enforceable in
accordance with its terms, the Executive and the Company agree that such Section
shall be reformed to make such Section enforceable in a manner which provides
the Company the maximum rights permitted at law.
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(h) Waiver. Waiver by any party hereto of any breach or
default by the other party of any of the terms of this Agreement shall not
operate as a waiver of any other breach or default, whether similar to or
different from the breach or default waived. No waiver of any provision of this
Agreement shall be implied from any course of dealing between the parties hereto
or from any failure by either party hereto to assert its or his rights hereunder
on any occasion or series of occasions.
(i) Counterparts. This Agreement may be executed in
counterparts, each of which shall be deemed an original but all of which
together shall constitute one and the same instrument.
(j) Captions. The captions of this Agreement are not part of
the provisions hereof and shall have no force or effect.
IN WITNESS WHEREOF, the Executive has hereunto set his hand
and the Company has caused this Agreement to be executed in its name on its
behalf, and its corporate seal to be hereunto affixed and attested by its
Secretary, all as of the day and year first above written.
BW/IP INC.
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By: ▇▇▇▇▇ ▇. ▇▇▇▇▇
Title: Chairman
EXECUTIVE:
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