MODINE MANUFACTURING COMPANY EMPLOYMENT AGREEMENT
Exhibit
10.3
THIS
EMPLOYMENT AGREEMENT made and entered into as of the 15th day of June, 2007,
by
and between Modine Manufacturing Company, a Wisconsin corporation, having its
principal place of business in Racine, Wisconsin (the "Company"), and ▇▇▇▇▇▇
▇.
▇▇▇▇▇ on of Racine, Wisconsin ("Executive").
WHEREAS,
the Company has previously entered into an employment agreement with Executive;
and
WHEREAS,
the Company has previously entered into a change in control and termination
agreement with Executive;
WHEREAS,
the Company and Executive wish to consolidate the terms of the prior employment
agreement and the prior change in control and termination agreement into a
single employment agreement that complies with Section 409A of the Internal
Revenue Code; and
WHEREAS,
the Company desires to engage Executive and Executive is desirous of committing
himself to serve the Company for the period and on the terms herein provided.
NOW,
THEREFORE, in consideration of the foregoing and the respective covenants and
agreements of the parties herein contained, the parties hereto agree as
follows:
1. Employment;
Period of Employment.
The
period of employment shall be the period beginning on the date hereof and
terminating on the date 36 months after such date (the "Period of Employment"),
provided that for each day from and after the date hereof the Period of
Employment will automatically be extended for an additional day, unless either
the Company or Executive has given written notice to the other party of its
or
his election to cease such automatic extension, in which case the Period of
Employment shall be the 36-month period beginning on the date such notice is
received by such other party.
2. Definitions.
For
purposes of this Agreement:
2.1 “Actual
Bonus” shall mean the amount of Executive’s incentive bonus compensation
actually payable for a fiscal year under an incentive compensation plan
maintained by the Company.
2.2 "Affiliate"
or "Associate" shall have the meaning set forth in Rule 12b-2 under the
Securities Exchange Act of 1934, as amended.
2.3 "Average
Annual Earnings" shall mean the sum of Executive's Five-Year Average Base Salary
and his Five-Year Average Actual Bonus.
2.4 "Base
Salary" shall mean Executive's per annum base salary at the rate in effect
on
the date of a termination of employment; provided, however, that for purposes
of
Section 9, such rate shall in no event be less than the highest rate in
effective for Executive at any time during the Period of
Employment.
2.5 "Beneficiary"
shall mean the person or entity designated by Executive, by written instrument
delivered to the Company, to receive the benefits payable under this Agreement
in the event of his death. If Executive fails to designate a Beneficiary, or
if
no Beneficiary survives Executive, such death benefits shall be
paid:
(a) to
his
surviving spouse; or
(b) if
there
is no surviving spouse, to his living descendants per
stirpes;
or
(c) if
there
is neither a surviving spouse nor descendants, to his duly appointed and
qualified executor or personal representative.
2.6 A
"Change
in Control" shall be deemed to take place on the occurrence of any of the
following events:
(a) The
commencement by an entity, person or group (other than the Company or an
Affiliate or Associate) of a tender offer for at least 30% of the outstanding
capital stock of the Company entitled to vote in elections of directors ("Voting
Power");
(b) The
effective time of (i) a merger or consolidation of the Company with one or
more
other corporations as a result of which the holders of the outstanding Voting
Power of the Company immediately prior to such merger or consolidation (other
than the surviving or resulting corporation or any Affiliate or Associate
thereof) hold less than 50% of the Voting Power of the surviving or resulting
corporation, or (ii) a transfer of 30% of the Voting Power, or a Substantial
Portion of the Property, of the Company other than to an entity of which the
Company owns at least 50% of the Voting Power; or
(c) During
any period of 24 months that ends during the Period of Employment, regardless
of
whether such period commences before or after the effective date of this
Agreement, the persons who at the beginning of such 24-month period were
directors of the Company cease for any reason to constitute at least a majority
of the Board of Directors of the Company.
2.7 "Code"
shall mean the Internal Revenue Code of 1986, as amended.
2.8 "Defined
Contribution Plan" shall mean any plan that is a defined contribution plan
as
defined in Section 3(34) of the Employee Retirement Income Security Act of
1974,
as amended ("ERISA").
2.9 "Five-Year
Average Base Salary" shall mean the average of Executive's per annum Base Salary
(determined without reference to the proviso in section 2.4) payable for the
five-year period ending on the last day of the Company's fiscal year immediately
preceding the fiscal year of Executive's Termination; provided, however, if
Executive had not been employed for the entire five-year period, "Five-Year
Average Base Salary" shall mean the average of Executive's per annum Base Salary
payable over his actual period of employment.
2.10 "Five-Year
Average Actual Bonus" shall mean the average of Executive's Actual Bonus payable
under the Company's Management Incentive Plan, or such equivalent successor
plan
as may be adopted by the Company, for the five-year period ending on the last
day of the Company's fiscal year immediately preceding the fiscal year of
Executive's Termination; provided, however, if Executive had not been employed
for the entire five-year period, "Five-Year Average Actual Bonus" shall mean
the
average of Executive's Actual Bonus payable over his actual period of
employment.
2.11 "Good
Cause" shall be deemed to exist if, and only if:
(a) Executive
engages in an act of dishonesty constituting a felony that results or is
intended to result directly or indirectly in gain or personal enrichment at
the
expense of the Company; or
(b) Executive
breaches any provision of section 12 (relating to confidential information),
and
such breach results in a demonstrably material injury to the
Company.
2.12 "Good
Reason" shall mean at least one of the following events has occurred without
the
consent of Executive:
(a) A
material diminution in Executive’s Base Salary;
(b) A
material diminution in Executive’s authority, duties or
responsibilities;
(c) A
material diminution in the authority, duties, or responsibilities of the
supervisor to whom Executive is required to report; or
(d) A
material diminution in the budget over which Executive retains
authority;
(e) A
material change in the geographic location at which Executive must perform
the
services; or
(f) Any
other
action or inaction that constitutes a material breach of the terms of this
Agreement
provided
that in any event set forth in this section 2.12, (i) Executive shall have
provided notice of the Good Reason condition to the Company and election to
terminate his employment under this Agreement within 90 days of the occurrence
of the Good Reason event and (ii) the Company’s 30 day cure period has expired.
An
election by Executive to terminate his employment for Good Reason shall not
be
deemed a voluntary termination of employment by Executive for the purpose of
this Agreement or any plan or practice of the Company.
2.13 "Severance
Period" shall mean the period beginning on the date Executive's employment
with
the Company terminates under circumstances described in section 9.1 of this
Agreement and ending on the date 36 months thereafter.
2.14 "Substantial
Portion of the Property of the Company" shall mean 50% of the aggregate book
value of the assets of the Company and its Affiliates and Associates as set
forth on the most recent balance sheet of the Company, prepared on a
consolidated basis, and reviewed by its regularly employed, independent,
certified public accountants.
2.15 "Target
Bonus" shall mean the amount of Executive's target annual incentive bonus
compensation for the fiscal year in which the date of a termination of
employment under circumstances described in section 9.1 below occurs, under
the
incentive bonus compensation plan maintained by the Company for such year;
provided, however, that such amount shall in no event be less than the highest
amount in effect for Executive at any time during the Period of
Employment.
2.16 "Welfare
Plan" shall mean any health and dental plan, disability plan, survivor income
plan or life insurance plan, as defined in Section 3(1) of ERISA, currently
or
hereafter made available by the Company in which Executive is eligible to
participate.
3. Position,
Duties; Responsibilities.
3.1 It
is
contemplated that during the Period of Employment, Executive shall continue
to
serve as a principal officer of the Company; currently Executive Vice President
and Chief Operating Officer. At all times during the Period of Employment,
Executive shall hold a position of responsibility and importance with duties
and
responsibilities at least equal in scope, responsibility and importance to
and
commensurate with the position of Executive Vice President and Chief Operating
Officer.
3.2 Throughout
the Period of Employment Executive shall devote his full time and undivided
attention during normal business hours to the business and affairs of the
Company except for reasonable vacations. The office of Executive shall be
located at the principal offices of the Company within the Racine, Wisconsin
area and Executive shall not be required to locate his office elsewhere without
his prior written consent.
4. Compensation;
Compensation Plans; Perquisites.
4.1 For
all
services rendered by Executive during the Period of Employment, Executive shall
be paid as compensation:
(a) A
base
salary, payable not less often than monthly, of no less than $449,000 per year,
with such increases in such rate as shall be awarded from time to time in
accordance with the Company's regular administrative practices of other salary
increases applicable to executives of the Company in effect on the date of
this
Agreement; and
(b) An
annual
incentive award or bonus under the Company's Management Incentive Plan, or
such
equivalent successor plan as may be adopted by the Company.
4.2 During
the Period of Employment Executive shall be and continue to be a full
participant in any and all executive incentive plans in which executives of
the
Company participate that are in effect on the date hereof and that may hereafter
be adopted, including, without limitation, any stock option, stock purchase,
stock appreciation right plans, restricted stock plans, or equivalent successor
plans that may be adopted by the Company, with at least the same reward
opportunities that have heretofore been provided. Nothing in this Agreement
shall preclude improvement of reward opportunities in such plans or other plans
in accordance with the present practice of the Company.
4.3 During
the Period of Employment, Executive shall be entitled to participate in
executive perquisites of the Company as determined by the Board of Directors
for
key employees, including without limitation, an office, secretarial and clerical
services, paid annual Mayo Clinic Visits and income tax and estate planning
services.
5. Employee
Benefit Plans.
5.1 Executive,
his dependents and beneficiaries, including, without limitation, any beneficiary
of a joint and survivor or other optional method of payment applicable to the
payment of benefits under a benefit plan and any disability plan of the Company,
shall be entitled to all payments and benefits during the Period of Employment
to which officers of the Company, their dependents and beneficiaries, are
entitled as the result of the employment of such officers under the terms of
employee plans and practices of the Company for which officers, their dependents
and beneficiaries, are eligible depending upon date hire, and to all payments
or
other benefits under any such plan or practice subsequent to the Period of
Employment as a result of participation in such plan or practice during
employment. Notwithstanding anything in this Section 5.1 to the contrary,
Executive shall be entitled to participate in such retiree medical and welfare
plans and other present or equivalent successor plans and practices of the
Company (if any), at the then current contribution rates for which salaried
employees, their dependents and beneficiaries are eligible, regardless of date
of hire or service credit as required by such plans, if Executive retires after
age 55 with at least ten years of service.
5.2 Nothing
in this Agreement shall preclude the Company from amending or terminating any
employee benefit plan or practice, but, it being the intent of the parties
that
Executive shall continue to be entitled during the Period of Employment to
perquisites as set forth in section 4.3 above and to benefits and service credit
for benefits under section 5.1 above through the Period of Employment
hereunder.
6. Supplemental
Retirement Benefit.
Since
certain limitations are placed on the amount of benefits receivable by
participants under certain of the Company's plans and disability plans and
amounts contributed by the Company to certain Defined Contribution Plans by
the
Code, the Company shall provide Executive and his beneficiaries with restorative
benefits equal to the benefits lost under those plans as a result of these
limitations. Payments of such supplemental benefits shall be made to Executive
or his beneficiaries in a manner consistent with the elections available under
the plans providing such supplemental benefits.
7. Effect
of Death or Disability Prior to a Change in Control.
7.1 In
the
event of the death of Executive during the Period of Employment and prior to
a
Change in Control, the legal representative of Executive shall be entitled
to
the compensation provided for in section 4.1 above for the month in which death
occurred.
7.2 In
the
event of the Disability of Executive during the Period of Employment and prior
to a Change in Control, Executive shall be entitled for a period of twelve
(12)
months to the benefits provided for in sections 4.1(a) and 4.1(b) above, at
the
rate being paid at the time of the commencement of Disability. After a
disability period of twelve (12) months, Executive shall receive disability
payments of 60% of the monthly compensation set forth in sections 4.1(a) and
4.1(b) less the amount of any Company group insured long-term disability
benefits he receives. These disability payments are to continue to be paid
to
Executive until the end of the Period of Employment. This shall not preclude
Executive from receiving disability benefits after the Period of Employment
under the Company's group long-term disability plan. The term "Disability"
as
used in this Agreement shall mean the person (i) is unable to engage in any
substantial gainful activity by reason of any medically determinable physical
or
mental impairment that can be expected to result in death or can be expected
to
last for a continuous period of not less than twelve months, (ii) is, by reason
of any medically determinable physical or mental impairment that can be expected
to result in death or can be expected to last for a continuous period of not
less than twelve months, receiving income replacement benefits for a period
of
not less than three months under an accident and health plan covering employees
of the participant’s employer, or (iii) is determined to be disabled by the
Social Security Administration.
8. Termination
of Employment Prior to a Change in Control.
8.1 In
the
event of a termination by the Company without Good Cause or a termination by
Executive for Good Reason during the Period of Employment and prior to a Change
in Control, the provisions of this section 8 shall apply. Any provision of
this
Agreement to the contrary notwithstanding, the payments, benefits and other
matters provided in this section 8 in the event of such a Termination are in
addition to any such items provided by section 6.
8.2 In
the
event of a termination of employment pursuant to section 8.1 above, the Company
shall, as liquidated damages, severance pay, and payment for services rendered
in the past, pay to Executive an amount equal to the Average Annual Earnings
of
Executive during the remainder of the Period of Employment. Such amount shall
be
paid to Executive in a lump sum within 60 days after his date of termination
of
employment,
but not
earlier than the first date on which the Company may make such payment without
causing an additional tax to be paid by Executive under Section 409A of the
Internal Revenue Code and the regulations thereunder (“Section
409A”).
During
the remaining Period of Employment, Executive, his dependents and beneficiaries
shall continue to be entitled to all benefits under employee benefit plans
of
the Company as if Executive were still employed and the period for which such
payments are provided shall be continued service with the Company for the
purpose of continued credits under the employee benefits plans and for purposes
of determining payments and other rights in respect of awards made or accrued
prior to termination under Executive incentive plans referred to in section
4.2;
provided, however, if continued participation in any one or more of such plans
is not possible under the terms thereof, the Company shall provide substantially
identical benefits. In the event the Company contributions for coverage under
the Welfare Plans would be treated as deferred compensation under Section 409A
and contributions during the six (6) months following the date of Executive’s
separation from service would cause Executive to be subject to an additional
tax
under Section 409A, Executive shall pay the entire cost of coverage during
such
six-month period and the Company shall reimburse Executive for the amount that
the Company would have paid during such period on the first
date that the Company may make such payment without causing an additional tax
to
be paid by Executive under Section 409A.
8.3 If
prior
to a Change in Control the employment of Executive with the Company is
terminated by the Company for Good Cause or by Executive other than for Good
Reason, Executive's Base Salary shall be paid through the date of his
termination, and the Company shall have no further obligation to Executive
or
any other person under this Agreement. Such termination shall have no effect
upon Employee's other rights, including but not limited to, rights under the
Defined Contribution Plans and the Welfare Plans. In the event that Executive's
employment shall be terminated by the Company during the Period of Employment
and such termination is alleged to be for Good Cause, or the Company shall
withhold payments or provision of benefits because Executive is alleged to
be
engaged in Competition in breach of the provisions of section 12 below or for
any other reason, Executive shall have the right, in addition to all other
rights and remedies provided by law, at his election either to seek binding
arbitration within the Racine, Wisconsin area or other mutually agreeable area
under the rules of the American Arbitration Association, or to institute a
judicial proceeding; all costs of such arbitration or judicial proceeding
including all attorney fees, are to be borne by the Company if Executive
prevails.
9. Termination
of Employment Following a Change in Control.
9.1 The
following provisions will apply if a Change in Control occurs during Executive’s
active employment with the Company, and at any time during the 24 months after
the Change in Control occurs, the employment of Executive with the Company
is
terminated by the Company for any reason other than Good Cause or Executive
terminates his employment with the Company for any reason:
(a) Base
Salary and Bonus.
The
Company shall pay Executive an amount equal to three times the greater of:
(A)
the sum of Executive's Base Salary and Target Bonus, or (B) Executive's Average
Annual Earnings. Such amount shall be paid to Executive in a lump sum within
60
days after his date of termination of employment,
but not
earlier than six (6) months following the date of termination in the event
Executive terminates his employment with the Company for any reason.
(b) Pro
Rata Target Bonus.
The
Company shall pay Executive an amount equal to the pro rata portion of the
Target Bonus that is applicable to the period commencing on the first day of
the
fiscal year in which the employment of Executive is terminated and ending on
the
date of such termination. Such amount shall be paid to Executive in a lump
sum
within 60 days after his date of termination of employment,
but not
earlier than six (6) months following the date of termination in the event
Executive terminates his employment with the Company for any reason.
(c) Defined
Contribution Supplement.
(1) For
each
calendar year ending during the Severance Period, the Company shall pay to
Executive a Supplemental Defined Contribution Benefit in an amount equal to
the
amount determined pursuant to clause a. below less the amount determined
pursuant to clause b. below:
a. the
amount that would have been allocated to Executive's accounts under all Defined
Contribution Plans ("Accounts") during such calendar year, assuming (A) that
the
amount of Executive's elective deferrals (as defined in Section 402(g)(3) of
the
Code) equals the amount of such elective deferrals Executive authorized in
the
calendar year immediately preceding the calendar year in which the date of
commencement of the Severance Period occurs; (B) that all the Company
contributions (except elective deferrals as defined in Section 402(g)(3) of
the
Code) were allocated to Executive's Accounts during such calendar year, in
the
amount that would have been allocated on behalf of Executive had Executive
been
actively employed during such calendar year; and (C) that Executive's rate
of
compensation (as defined in the applicable Defined Contribution Plan for
purposes of determining the Company contributions) during such calendar year
is
identical to such rate of compensation on the date immediately preceding his
termination of employment;
b. the
amount, if any, actually allocated to Executive's Accounts during such
year.
(2) Each
Supplemental Defined Contribution Benefit shall be paid to Executive in a lump
sum no later than 60 days after the end of each applicable calendar year during
the Severance Period,
but not
earlier than six (6) months following the date of termination in the event
Executive terminates his employment with the Company for any
reason.
(3) In
the
event of Executive's death prior to the end of the Severance Period, the
Supplemental Defined Contribution Benefit shall continue to accrue for the
duration of the Severance Period on the same basis as if Executive had not
died.
Such Supplemental Defined Contribution Benefit shall be payable to Executive's
Beneficiary at the same time and manner as such Benefit would have been paid
to
Executive.
(d) Acceleration
of Option Vesting; Lapse of Restrictions on Shares of Stock.
If upon
the date of termination of Executive’s employment Executive holds any options
with respect to stock of the Company, all such options will immediately become
vested and exercisable upon such date and will be exercisable for 36 months
thereafter. Any restrictions on stock of the Company owned by Executive on
the
date of termination of his employment will lapse on such date.
(e) Welfare
Plan Coverage.
During
the Severance Period, Executive and his spouse and other dependents will
continue to be covered by all Welfare Plans maintained by the Company in which
he and his spouse and other dependents were participating immediately prior
to
the date of his termination as if he continued to be an employee of the Company
and the Company will continue to pay the costs of coverage of Executive and
his
spouse and other dependents under such Welfare Plans on the same basis as is
applicable to active employees covered thereunder; provided that, if
participation in any one or more of such Welfare Plans is not possible under
the
terms thereof, the Company will provide substantially identical benefits. For
purposes of the continuation of Executive's group health plan coverage required
under Code Section 4980B, to the extent permitted by the applicable group health
plan, (i) the period of extended coverage referred to in Code Section
4890B(f)(2)(B)(i)(I) shall commence on the first date that follows the end
of
the Severance Period, and (ii) the applicable notice period provided under
Code
Section 4980B(f)(6)(B) shall commence on the first date that follows the end
of
the Severance Period. In the event the Company contributions for coverage under
the Welfare Plans would be treated as deferred compensation under Section 409A
and contributions during the six (6) months following the date of Executive’s
separation from service would cause Executive to be subject to an additional
tax
under Section 409A, Executive shall pay the entire cost of coverage during
such
six-month period and the Company shall reimburse Executive for the amount that
the Company would have paid during such period on the first
date that the Company may make such payment without causing an additional tax
to
be paid by Executive under Section 409A.
9.2 If
after
a Change in Control the employment of Executive with the Company is terminated
by the Company or Executive other than under circumstances set forth in section
9.1, Executive's Base Salary shall be paid through the date of his termination,
and the Company shall have no further obligation to Executive or any other
person under this Agreement. Such termination shall have no effect upon
Employee's other rights, including but not limited to, rights under the Defined
Contribution Plans and the Welfare Plans.
9.3 Notwithstanding
anything herein to the contrary, in the event the Company shall terminate the
employment of Executive for Good Cause hereunder, the Company shall give
Executive at least thirty (30) days prior written notice specifying in detail
the reason or reasons for Executive's termination.
9.4 This
section 9 shall have no effect, and the Company shall have no obligations under
this section 9, if Executive's employment terminates for any reason at any
time
other than during the 24 months following a Change in Control.
9.5 If
Executive's employment with the Company terminates under circumstances described
in section 9.1, then upon Executive's subsequent death, all unpaid amounts
payable to Executive under sections 9.1(a) or 9.1(b), or section 10 shall be
paid to his Beneficiary, all amounts payable under section 9.1(c) shall be
paid
pursuant to the terms of said section to his spouse or other beneficiary under
the applicable plans, and if section 9.1 applies, his spouse and other
dependents shall continue to be covered under all applicable Welfare Plans
during the remainder of the Severance Period, if any, pursuant to section
9.1(e).
9.6 The
Company shall pay Executive's reasonable attorneys' fees and legal expenses
in
connection with any judicial proceeding to enforce, construe or determine
Executive's right to payments and benefits under this section 9, if Executive
is
a Prevailing Party in such litigation. Executive shall be deemed a "Prevailing
Party" if (a) a court enters a judgment in his favor in connection with such
litigation, or (b) the Company and Executive enter into a written agreement
of
settlement of such litigation. If Executive is not a Prevailing Party in such
litigation, the Company shall pay Executive's reasonable attorney's fees and
legal expenses in connection therewith, up to a maximum of $100,000.
10. Excise
Tax.
10.1 In
the
event that a Change in Control shall occur, and a final determination is made
by
legislation, regulation, ruling directed to Executive or the Company, by court
decision, or by independent tax counsel described in section 10.2 below, that
the aggregate amount of any payment made to Executive (a) hereunder, and (b)
pursuant to any plan, program or policy of the Company in connection with,
on
account of, or as a result of, a Change in Control ("Total Payments") will
be
subject to the excise tax provisions of Section 4999 of the Code, or any
successor section thereof, Executive shall be entitled to receive from the
Company, in addition to any other amounts payable hereunder, a lump sum payment
(the "Gross-Up Payment"), sufficient to cover the full cost of such excise
taxes
and Executive's federal, state and local income and employment taxes on this
additional payment, so that the net amount retained by Executive, after the
payment of all such excise taxes on the Total Payments, and all federal, state
and local income and employment taxes and excise taxes on the Gross-Up Payment,
shall be equal to the Total Payments. The Total Payments, however, shall be
subject to any federal, state and local income and employment taxes thereon.
For
this purpose, Executive shall be deemed to be in the highest marginal rate
of
federal, state and local taxes. The Gross-Up Payment shall be made at the same
time as the payments described in section 9.1 above.
10.2 Employer
and Executive shall mutually and reasonably determine the amount of the Gross-Up
Payment to be made to Executive pursuant to section 10.1. Prior to the making
of
any such Gross-Up Payment, either party may request a determination as to the
amount of such Gross-Up Payment. If such a determination is requested, it shall
be made promptly, at the Company's expense, by independent tax counsel selected
by Executive and approved by the Company (which approval shall not unreasonably
be withheld), and such determination shall be conclusive and binding on the
parties. The Company shall provide such information as such counsel may
reasonably request, and such counsel may engage accountants or other experts
at
the Company's expense to the extent that they deem necessary or advisable to
enable them to reach a determination. The term "independent tax counsel," as
used herein, shall mean a law firm of recognized expertise in federal income
tax
matters that has not previously advised or represented either party. It is
hereby agreed that neither the Company nor Executive shall engage any such
firm
as counsel for any purpose, other than to make the determination provided for
herein, for three years following such firm's announcement of its
determination.
10.3 In
the
event the Internal Revenue Service subsequently adjusts the excise tax
computation made pursuant to sections 10.1 and 10.2 above, the Company shall
pay
to Executive, or Executive shall pay to the Company, as the case may be, the
full amount necessary to make either Executive or the Company whole had the
excise tax initially been computed as subsequently adjusted, including the
amount of any underpaid or overpaid excise tax, and any related interest and/or
penalties due to the Internal Revenue Service.
11. No
Obligation to Mitigate Damages.
Executive
shall not be required to mitigate the amount of compensation and benefits under
this Agreement by seeking employment with others, or otherwise, and the amount
of such compensation and benefits shall not be reduced or offset in any way
by
any income or benefits earned by Executive from another employer or other source
after the termination becomes effective.
12. Confidential
Information; Non Compete.
12.1 Executive
agrees not to disclose (either while in the Company's employ, or at any time
thereafter), to any person not employed by the Company, or not engaged to render
services to the Company, except with the prior written consent of an officer
authorized to act in the matter by the Board of Directors of the Company, any
confidential information obtained by him while in the employ of the Company,
including, without limitation, information relating to any of the Company's
inventions, processes, formulae, plans, devises, compilations of information,
methods of distribution, customers, client relationships, marketing strategies
or trade secrets; provided, however, that this provision shall not preclude
Executive from use or disclosure of information known generally to the public
or
of information not considered confidential by persons engaged in the business
conducted by the Company or from disclosure required by law or Court order.
The
Agreement herein made in this section 12.1 shall be in addition to, and not
in
limitation or derogation of, any obligations otherwise imposed by law upon
Executive in respect of confidential information and trade secrets of the
Company, its subsidiaries and Affiliates. If Executive shall at any time violate
any obligation of his under section 12.1 in a manner that results in
demonstrably material injury to the Company, he shall immediately forfeit his
right to any benefits under this Agreement, and Employer shall thereafter have
no further obligation hereunder to Executive or his spouse, Beneficiary or
any
other person.
12.2 Subject
to the provisions of section 8.3 above, there shall be no obligation on the
part
of the Company to make any further payments under Section 8 or provide any
benefits required under this Agreement pursuant to Section 8 if Executive shall,
during the period that such payments are being made or benefits provided, engage
in Competition with the Company as hereinafter defined.
12.3 The
word
"Competition" for the purposes of this section 12.3 and any other provision
of
this Agreement shall mean (a) taking a management position with or control
of a
business engaged in the design, development, manufacture, marketing or
distribution of products, that constituted 5% or more of the sales of the
Company and its subsidiaries and Affiliates during the last fiscal year of
the
Company preceding the termination of Executive's employment, in any geographical
area in which the Company, its subsidiaries or Affiliates is at the time
engaging in the design, development, manufacture, marketing or distribution
of
such products; provided, however, that in no event shall ownership of less
than
5% of the outstanding capital stock entitled to vote for the election of
directors of a corporation with a class of equity securities held of record
by
more than 500 persons, standing alone, be deemed Competition with the Company
within the meaning of this section 12.3, (b) soliciting any person who is a
customer of the businesses conducted by the Company, or any business in which
Executive has been engaged on behalf of the Company and its subsidiaries or
Affiliates at any time during the term of this Agreement on behalf of a business
described in clause (a) of this section 12.3, or (c) inducing or attempting
to
persuade any employee of the Company or any of its subsidiaries or Affiliates
to
terminate his or her employment relationship in order to enter into employment
with a business described in clause (a) of this section 12.3.
13. Notices.
All
notices, requests, demands and other communications provided for by this
Agreement shall be in writing and shall be sufficiently given if and when mailed
in the continental United States by registered or certified mail or personally
delivered to the party entitled thereof at the address given from time to time
by the parties to this Agreement that address shall be such address as the
addressee may have given most recently by a similar notice. Any such notice
delivered in person shall be deemed to have been received on the date of
delivery.
14. General
Provisions.
14.1 There
shall be no right of setoff or counterclaim in respect of any claim, debt or
obligation against any payments to Executive, his dependents, beneficiaries
or
estate, provided for in this Agreement.
14.2 The
Company and Executive recognize that each party will have no adequate remedy
at
law for breach by the other of any of the agreements contained in this Agreement
and, in the event of any such breach, the Company and Executive hereby agree
and
consent that the other shall be entitled to a decree of specific performance,
mandamus or other appropriate remedy to enforce performance of such
agreements.
14.3 No
right
or interest to or in any payments shall be assignable by Executive; provided,
however, that this provision shall not preclude him from designating one or
more
beneficiaries to receive any amount that may be payable after his death and
shall not preclude the legal representative of his estate from assigning any
right hereunder to the person or persons entitled thereto under his will or,
in
the case of intestacy, to the person or persons entitled thereto under the
laws
of intestacy applicable to his estate.
14.4 No
right,
benefit or interest hereunder, shall be subject to anticipation, alienation,
sale, assignment, encumbrance, charge, pledge, hypothecation, or setoff in
respect of any claim, debt or obligation, or to execution, attachment, levy
or
similar process, or assignment by operation of law. Any attempt, voluntary
or
involuntary, to effect any action specified in the immediately preceding
sentence shall, to the full extent permitted by law, be null, void and of no
effect.
14.5 No
waiver
by any party at any time of any breach by the other party of, or compliance
with, any condition or provision of this Agreement to be performed by such
other
party shall be deemed a waiver of any other provisions or conditions at the
same
time or at any prior or subsequent time.
14.6 Except
as
herein provided, Executive shall not have any present right, title or interest
whatsoever in or to any investments that the Company may make to aid it in
meeting is obligations under this Agreement. Nothing contained in this Agreement
shall create or be construed to create a trust of any kind, or a fiduciary
relationship between the Company and Executive or any other person.
14.7 In
the
event of Executive's death or a judicial determination of his incompetence,
reference in this agreement to Executive shall be deemed, where appropriate,
to
refer to his legal representative or, where appropriate, to his Beneficiary
or
Beneficiaries.
14.8 This
Agreement shall be binding upon and shall inure to the benefit of Executive,
his
heirs and legal representatives, and the Company and its successors, including,
without limitation, any corporate or corporations acquiring directly or
indirectly all or substantially all of the assets of the Company whether by
merger, consolidation, sale or otherwise (and such successors shall thereafter
be deemed embraced with the term "the Company" for the purposes of this
Agreement).
14.9 In
the
event that any provision of this agreement, or portion thereof, shall be
determined to be invalid or unenforceable for any reason, in whole or in part,
the remaining provisions of this Agreement and parts of such provision not
so
invalid or unenforceable shall be unaffected thereby and shall remain in full
force and effect to the fullest extent permitted by law.
14.10 This
Agreement may be executed in counterparts, each of which shall be deemed an
original.
14.11 For
purposes of this Agreement, (a) employment or termination of employment of
Executive shall mean employment or termination of employment with the Company
and all Affiliates, (b) Base Salary, Target Bonus, Five-Year Average Base Salary
and Five-Year Average Actual Bonus shall include remuneration received by
Executive from the Company and all Affiliates, and (c) the terms Defined
Contribution Plan and Welfare Plan maintained or made available by the Company
shall include any such plans of any Affiliate of the Company.
14.12 The
validity, interpretation, construction, performance and enforcement of this
Agreement shall be governed by the laws of the State of Wisconsin.
15. Entire
Agreement; Amendment or Modification.
15.1 This
Agreement contains the entire Agreement between the Company and Executive and
supersedes any and all previous agreements; written or oral; between the parties
relating to the subject matter hereof, including without limitation the
Employment Agreement dated as May 31, 2005 between Executive and the Company
and
the Change of Control and Termination Agreement effective May 31, 2005 between
Executive and the Company.
15.2 No
provision of this Agreement may be amended, modified or waived unless such
amendment, modification or waiver shall be authorized by the Board of Directors
of the Company or any authorized committee of the board of Directors and shall
be agreed to in writing, signed by Executive and by an officer of the Company
hereunto duly authorized.
16. Compliance
with Section 409A of the Internal Revenue Code.
If
any
payment or benefit provided under this Agreement is reasonably determined by
either party to be subject to for any reason to a material risk of additional
tax under Section 409A of the Code, Executive and the Company agree to take
such
reasonable steps as may be appropriate to avoid such additional tax without
materially changing the economic value of the Agreement to either
party.
17. Benefits
Unfunded.
All
rights under this Agreement of Executive and his spouse, Beneficiary or other
beneficiary under a benefit plan, shall at all times be entirely unfunded,
and
no provision shall at any time be made with respect to segregating any assets
of
the Company for payment of any amounts due hereunder. None of Executive, his
spouse, Beneficiary or any other beneficiary under a benefit plan shall have
any
interest in or rights against any specific assets of the Company, and Executive
and his spouse, Beneficiary or other beneficiary shall have only the rights
of a
general unsecured creditor of the Company. Notwithstanding the preceding
provisions of this section 17, the Officer Nomination and Compensation Committee
of the Board of Directors of the Company, in its discretion, shall have the
right, at any time and from time to time, to cause amounts payable or
potentially payable to Executive, his spouse or his Beneficiary to be paid
to
the trustee of a Rabbi Trust or any similar trust to be established by the
Company.
IN
WITNESS WHEREOF, the parties hereto have executed this Agreement this 15th
day
of June, 2007.
BY:
/s/
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
▇▇▇▇▇
▇.
▇▇▇▇▇▇▇
President
and Chief Executive Officer
EXECUTIVE
▇▇▇▇▇▇
▇.
▇▇▇▇▇
/s/
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇▇▇
▇.
▇▇▇▇▇
(SEAL)
Attest:
/s/
▇▇▇▇ ▇. ▇▇▇▇▇
▇▇▇▇
▇.
▇▇▇▇▇, Secretary