Exhibit 10.17
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made and entered into as of the 1st day of March,
2000, by and between LYDALL, INC., a Delaware corporation (the "Company"), and
Xxxxx X. Xxxxx (the "Executive").
W I T N E S S E T H
WHEREAS, the Company and the Executive (the "Parties") have agreed
to enter into this agreement (the "Agreement) relating to the employment of the
Executive by the Company and/or one of its subsidiaries;
NOW, THEREFORE, in consideration of the premises and mutual
covenants contained herein and for other good and valuable consideration, the
Parties, intending to be legally bound, agree as follows:
1. Term of Employment; Termination of Prior Agreement.
(a) The Company and/or one of its subsidiaries agrees to continue to
employ the Executive, and the Executive agrees to remain in the employment of
the Company and/or one of its subsidiaries, in accordance with the terms and
provisions of this Agreement.
(b) The Employment Period under this Agreement shall be the period
commencing as of the date of this Agreement and ending on the date of
termination of the Executive's employment pursuant to Section 5, 6 or 7 below,
whichever is applicable.
(c) Immediately upon the commencement of the Executive's employment
pursuant to the terms of this Agreement, that certain Agreement by and between
the Executive and the Company dated as of February 1, 2000 shall terminate and
shall be of no further force or effect.
2. Duties. It is the intention of the Parties that during the term
of the Executive's employment under this Agreement, the Executive will serve as
Division President of a subsidiary of the Company or in such other senior
management position as the Company shall determine. During the Employment
Period, the Executive will devote his full business time and attention and best
efforts to the affairs of the Company and its
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subsidiaries and his duties as Division President. The Executive will have such
duties as are appropriate to his position as Division President, and will have
such authority as required to enable the Executive to perform these duties.
Consistent with the foregoing, the Executive shall comply with all reasonable
instructions of the Board of Directors of the Company (the "Board").
3. Compensation and Benefits.
3.1 Salary. During the Employment Period, the Company will pay the
Executive a base salary at an initial annual rate of Two Hundred Twenty Thousand
Dollars ($220,000). The Company may, in its sole and absolute discretion,
increase the Executive's base salary in light of the Executive's performance,
inflation, changes in the cost of living and other factors deemed relevant by
the Company. The Executive's base salary may not be decreased during the term of
this Agreement. The Chief Executive Officer of the Company shall meet with the
Executive annually to review the Executive's performance, objectives and
compensation, including salary, bonus and stock options, and the Chief Executive
Officer shall then meet with the Compensation and Stock Option Committee of the
Board (the "Compensation Committee") to discuss the same. If the Compensation
Committee determines that any adjustments thereto are appropriate, such
committee shall make a recommendation to the full Board and the Board shall make
such adjustments, if any, as the Board deems appropriate and consistent with
this Agreement. The Executive's base salary will be paid in accordance with the
standard practices for other corporate executives of the Company.
3.2 Bonuses. During the Employment Period, the Executive will be
eligible to receive annually or otherwise such bonus awards, if any, as shall be
determined by the Board in its sole and absolute discretion after receiving the
recommendation of the Compensation Committee.
3.3 Benefit Programs. During the Employment Period, the Executive
will be entitled to participate on substantially the same terms as other senior
executives of the Company in all employee benefit plans and programs of the
Company (subject to any restrictions or eligibility requirements under such
plans and programs) from time to time in effect for the benefit of senior
executives of the Company, including, but not limited to, pension and other
retirement plans, profit sharing plans, stock incentive and annual incentive
bonus plans, group life insurance, hospitalization and surgical and major
medical cov-
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erages (excluding the Lydall, Inc. Executive Medical Plan), short-term and
long-term disability, and such other benefits as are or may be made available
from time to time to senior executives of the Company.
3.4 Vacations and Holidays. During the Employment Period, the
Executive will be entitled to vacation leave of three (3) weeks per year at full
pay or such greater vacation benefits as may be provided for by the Company's
vacation policies applicable to senior executives. The Executive will be
entitled to such holidays as are established by the Company for all employees.
3.5 Automobile. During the Employment Period, the Company will
provide the Executive with an automobile in accordance with Company policy.
4. Business Expenses. The Executive will be entitled to prompt
reimbursement for all reasonable, documented and necessary expenses incurred by
the Executive in performing his services hereunder, provided the Executive
properly accounts therefor in accordance with the policies and procedures
established by the Company.
5. Termination of Employment by the Company.
5.1 Involuntary Termination by the Company Other Than For Permanent
and Total Disability or Cause. The Company may terminate the Executive's
employment at any time other than (i) by reason of the Executive's Permanent and
Total Disability (as defined in Section 5.2) or (ii) for Cause (as defined in
Section 5.3), by giving the Executive a written notice of termination at least
30 days before the date of termination (or such lesser notice period as the
Executive may agree to). In the event of such a termination of employment
pursuant to this Section 5.1, the Executive shall be entitled to receive (i) the
benefits described in Section 8 if such termination of employment does not occur
within 12 months following a "Change of Control" (as defined in Section 10), or
(ii) the benefits described in Section 9 if such termination of employment
occurs within 12 months following a "Change of Control" (as defined in Section
10).
5.2 Termination Due to Permanent and Total Disability. If the
Executive incurs a Permanent and Total Disability, as defined below, the Company
may terminate the Executive's employment by giving the Executive written notice
of termination at least 30 days before the date of such termination (or such
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lesser notice period as the Executive may agree to). In the event of such
termination of the Executive's employment because of Permanent and Total
Disability, the Executive shall be entitled to receive (i) his base salary
pursuant to Section 3.1 through the date which is twelve months following the
date of such termination of employment, reduced by any amounts paid to the
Executive under any disability program maintained by the Company, such base
salary to be paid at the normal time for the payment of such base salary, (ii) a
bonus for the year of termination of employment and for the next succeeding year
(to be paid at the normal time for payment of such bonuses) in an amount equal
to the average of the three highest annual bonuses earned by the Executive under
the Company's annual incentive bonus plan for any of the five calendar years
preceding the calendar year of his termination of employment (or, if the
Executive was not eligible for a bonus for at least three calendar years in such
five-year period, then the average of such bonuses for all of the calendar years
in such five-year period for which the Executive was eligible), with any
deferred bonuses counting for the year earned rather than the year paid; (iii)
any other compensation and benefits to the extent actually earned by the
Executive under any other benefit plan or program of the Company as of the date
of such termination of employment, such compensation and benefits to be paid at
the normal time for payment of such compensation and benefits, and (iv) any
reimbursement amounts owing under Section 4. In addition, if the Executive
elects to continue coverage under the Company's health plan pursuant to COBRA,
the Company for a period of twelve months following termination of the
Executive's employment by reason of Permanent and Total Disability will pay the
same percentage of the Executive's premium for COBRA coverage for the Executive
and, if applicable, his spouse and dependent children, as the Company paid at
the applicable time for coverage under such plan for actively employed senior
executives generally. For the period of twelve months following the termination
of the Executive's employment by reason of Permanent and Total Disability, the
Company will continue to provide the life insurance benefits that the Company
would have provided to the Executive if the Executive had continued in
employment with the Company for such period, but only if the Executive timely
pays the portion of the premium for such coverage that senior executives of the
Company generally are required to pay for such coverage, if any. For purposes of
this Agreement, the Executive shall be considered to have incurred a Permanent
and Total Disability if and only if the Executive has incurred a disability
entitling the Executive to disability benefits under the Company's long-term
disability plan.
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5.3 Termination for Cause. The Company may terminate the Executive's
employment immediately for Cause for any of the following reasons: (i) an act or
acts of dishonesty or fraud on the part of the Executive resulting or intended
to result directly or indirectly in substantial gain or personal enrichment to
which the Executive was not legally entitled at the expense of the Company or
any of its subsidiaries; (ii) a willful material breach by the Executive of his
duties or responsibilities under this Agreement resulting in demonstrably
material injury to the Company or any of its subsidiaries; (iii) the Executive's
conviction of a felony or any crime involving moral turpitude, (iv) habitual
neglect or insubordination (defined as refusal to execute or carry out
directions from the Board or its duly appointed designees) where the Executive
has been given written notice of the acts or omissions constituting such neglect
or insubordination and the Executive has failed to cure such conduct, where
susceptible to cure, within thirty days following such notice, or (v) a material
breach by the Executive of any of his obligations under the Lydall Employee
Agreement executed by the Executive and attached hereto as Exhibit A. The
Company shall exercise its right to terminate the Executive's employment for
Cause by giving the Executive written notice of termination specifying in
reasonable detail the circumstances constituting such Cause. In the event of
such termination of the Executive's employment for Cause, the Executive shall be
entitled to receive only (i) his base salary pursuant to Section 3.1 earned
through the date of such termination of employment plus his base salary for the
period of any vacation time earned but not taken for the year of termination of
employment, such base salary to be paid at the normal time for payment of such
base salary, (ii) any other compensation and benefits to the extent actually
earned by the Executive under any other benefit plan or program of the Company
as of the date of such termination of employment, such compensation and benefits
to be paid and at the normal time for payment of such compensation and benefits
and (iii) any reimbursement amounts owing under Section 4.
6. Termination of Employment by the Executive.
(a) Good Reason. The Executive may terminate his employment for Good
Reason by giving the Company a written notice of termination at least 30 days
before the date of such termination (or such lesser notice period as the Company
may agree to) specifying in reasonable detail the circumstances constituting
such Good Reason. In the event of the Executive's termination of his employment
for Good Reason, the Executive shall be entitled to receive (i) the benefits
described in Sec-
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tion 8 if such termination of employment does not occur within 12 months
following a "Change of Control" (as defined in Section 10), or (ii) the benefits
described in Section 9 if such termination of employment occurs within 12 months
following a "Change of Control" (as defined in Section 10). For purposes of this
Agreement, Good Reason shall mean (i) a significant reduction in the scope of
the Executive's authority, functions, duties or responsibilities from that which
is contemplated by this Agreement, (ii) any reduction in the Executive's base
salary, (iii) a significant reduction in the employee benefits provided to the
Executive (excluding the Lydall, Inc. Executive Medical Plan) other than in
connection with an across-the-board reduction similarly affecting substantially
all senior executives of the Company, or (iv) any material breach by the Company
of any provision of this Agreement without the Executive having committed any
material breach of the Executive's obligations hereunder or under the Lydall
Employee Agreement which breach is not cured within thirty days following
written notice thereof to the Company of such breach. In addition, in the case
of a termination of employment within 12 months following a "Change of Control"
(as defined in Section 10), Good Reason shall also include the relocation of the
Executive's office location to a location more than 50 miles away from the
Executive's then current principal place of employment. If an event constituting
a ground for termination of employment for Good Reason occurs, and the Executive
fails to give notice of termination within 90 days after the occurrence of such
event, the Executive shall be deemed to have waived his right to terminate
employment for Good Reason in connection with such event (but not for any other
event for which the 90-day period has not expired).
(b) Other. The Executive may terminate his employment at any time
and for any reason, other than pursuant to subsection (a) above, by giving the
Company a written notice of termination to that effect at least 30 days before
the date of termination (or such lesser notice period as the Company may agree
to); provided, however, that the Company following receipt of such notice from
the Executive may elect to have the Executive's employment terminate immediately
following its receipt of such notice. In the event of the Executive's
termination of his employment pursuant to this subsection (b), the Executive
shall be entitled to receive only (i) his base salary pursuant to Section 3.1
earned through the date of such termination of employment plus his base salary
for the period of vacation time earned but not taken for the year of termination
of employment, such base salary to be paid at the normal time for payment of
such base salary, (ii) any other compensation and
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benefits to the extent actually earned by the Executive under any other benefit
plan or program of the Company as of the date of such termination of employment,
such compensation and benefits to be paid at the normal time for payment of such
compensation and benefits, and (iii) any reimbursement amounts owing under
Section 4.
7. Termination of Employment By Death. In the event of the death of
the Executive during the course of his employment hereunder, the Executive's
estate (or other person or entity having such entitlement pursuant to the terms
of the applicable plan or program) shall be entitled to receive (i) the
Executive's base salary pursuant to Section 3.1 earned through the date of the
Executive's death plus the Executive's base salary for the period of vacation
time earned but not taken for the year of the Executive's death, such base
salary to be paid at the normal time for payment of such base salary, (ii) a
bonus for the year of the Executive's death (to be paid within 90 days after the
Executive's death) in an amount equal to a pro rata portion of the average of
the three highest annual bonuses earned by the Executive under the Company's
annual incentive bonus plan for any of the five calendar years preceding the
calendar year of the Executive's death (or, if the Executive was not eligible
for a bonus for at least three calendar years in such five-year period, then the
average of such bonuses for all of the calendar years in such five-year period
for which the Executive was eligible), with any deferred bonuses counting for
the year earned rather than the year paid and with the pro rata portion being
determined by dividing the number of days of the Executive's employment during
such calendar year up to his death by 365 (366 if a leap year), (iii) any other
compensation and benefits to the extent actually earned by the Executive under
any other benefit plan or program of the Company as of the date of such
termination of employment, such compensation and benefits to be paid at the
normal time for payment of such compensation and benefits, and (iv) any
reimbursement amounts owing under Section 4. In addition, in the event of such
death, the Executive's beneficiaries shall receive any death benefits owed to
them under the Company's employee benefit plans. If the Executive's spouse
and/or dependent children elect to continue coverage under the Company's health
plan following the Executive's death pursuant to COBRA, the Company for a period
of 12 months following the Executive's death will pay the same percentage of the
premium for COBRA coverage for the Executive's spouse and/or dependent children,
as applicable, as the Company would have paid in respect of the
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Executive's coverage under such plan if the Executive had continued in
employment with the Company for such period.
8. Benefits Upon Termination Without Cause or For Good Reason (No
Change of Control). If (a) the Executive's employment hereunder shall terminate
(i) because of termination by the Company other than for Cause or Permanent and
Total Disability pursuant to Section 5.1, or (ii) because of termination by the
Employee for Good Reason pursuant to Section 6(a), and (b) such termination of
employment does not occur within 12 months following a "Change of Control" of
the Company (as defined in Section 10), the Executive shall be entitled to the
following:
(a) The Company shall pay to the Executive his base salary pursuant
to Section 3.1 earned through the date of such termination of employment
and any other compensation and benefits to the extent actually earned by
the Executive under any benefit plan or program of the Company as of the
date of such termination of employment, such base salary, compensation and
benefits to be paid at the normal time for payment of such base salary,
compensation and benefits.
(b) The Company shall pay the Executive any reimbursement amounts
owing under Section 4.
(c) The Company shall pay to the Executive in equal installments
spread over the period of 12 months beginning on the date of the
Executive's termination of employment an amount equal in the aggregate to
the sum of (i) the Executive's annual rate of base salary immediately
preceding his termination of employment, and (ii) the average of his
annual bonuses earned under the Company's annual incentive bonus plan for
the three calendar years preceding his termination of employment (or, if
the Executive was not eligible for a bonus in each of those three calendar
years, then the average of such bonuses for all of the calendar years in
such three-year period for which he was eligible), with any deferred
bonuses counting for the year earned rather than the year paid. Such
installments shall be paid at the times that salary payments are normally
made by the Company.
(d) If the Executive elects to continue coverage under the Company's
health plan pursuant to COBRA, then for the period beginning on the date
of the Executive's termination of employment and ending on the earlier of
(i) the
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date which is 12 months after the date of such termination of employment
or (ii) the date on which the Executive commences substantially full-time
employment as an employee of an employer that offers health benefits, the
Company will pay the same percentage of the Executive's premium for COBRA
coverage for the Executive and, if applicable, his spouse and dependent
children, as the Company paid at the applicable time for coverage under
such plan for actively employed senior executives generally. In addition,
for the period beginning on the date of the Executive's termination of
employment and ending on the earlier of (i) the date which is 12 months
after the date of such termination of employment or (ii) the date on which
the Executive commences substantially full-time employment as an employee
of an employer that offers life insurance benefits, the Company will
continue to provide the life insurance benefits that the Company would
have provided to the Executive if the Executive had continued in
employment with the Company for such period, but only if the Executive
timely pays the portion of the premium for such coverage that senior
executives of the Company generally are required to pay for such coverage,
if any. The Executive shall notify the Company promptly if he, while
eligible for benefits under this subsection (d), commences substantially
full-time employment as an employee of an employer that offers health
and/or life insurance benefits.
(e) The Company will provide the Executive with outplacement
services selected by the Executive, at the Company's expense not to exceed
$10,000.
9. Benefits Upon Termination Without Cause or For Good Reason
(Change of Control). If (a) the Executive's employment hereunder shall terminate
(i) because of termination by the Company other than for Cause or Permanent and
Total Disability pursuant to Section 5.1, or (ii) because of termination by the
Employee for Good Reason pursuant to Section 6(a), and (b) such termination of
employment occurs within 12 months following a "Change of Control" of the
Company (as defined in Section 10), the Executive shall be entitled to the
following:
(a) The Company shall pay to the Executive his base salary pursuant
to Section 3.1 earned through the date of such termination of employment
and any other compensation and benefits to the extent actually earned by
the Executive under any benefit plan or program of the Company as of the
date of such termination of employment, such base salary, compensation and
benefits to be paid at the normal
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time for payment of such base salary, compensation and benefits.
(b) The Company shall pay the Executive any reimbursement amounts
owing under Section 4.
(c) The Company shall pay to the Executive as a severance benefit an
amount equal to two (2) times the sum of (i) his annual rate of base
salary immediately preceding his termination of employment, and (ii) the
average of his three highest annual bonuses earned under the Company's
annual incentive bonus plan for any of the five calendar years preceding
his termination of employment (or, if the Executive was not eligible for a
bonus for at least three calendar years in such five-year period, then the
average of such bonuses for all of the calendar years in such five-year
period for which the Executive was eligible), with any deferred bonuses
counting for the year earned rather than the year paid. Such severance
benefit shall be paid in a lump sum within 30 days after the date of such
termination of employment.
(d) The Company shall pay to the Executive as a bonus for the year
of termination of his employment an amount equal to a portion (determined
as provided in the next sentence) of the Executive's maximum bonus
opportunity under the Company's annual incentive bonus plan for the
calendar year of termination of the Executive's employment or, if none,
such portion of the bonus awarded to the Executive under the Company's
annual incentive bonus plan for the calendar year immediately preceding
the calendar year of the termination of his employment, with deferred
bonuses counting for the year earned rather than the year paid. Such
portion shall be determined by dividing the number of days of the
Executive's employment during such calendar year up to his termination of
employment by 365 (366 if a leap year). Such payment shall be made in a
lump sum within 30 days after the date of such termination of employment,
and the Executive shall have no right to any further bonuses under said
plan.
(e) During the period of 24 months beginning on the date of the
Executive's termination of employment, the Executive (and, if applicable,
the Executive's spouse and dependent children) shall remain covered by the
medical, dental, life insurance, and, if reasonably commercially available
through nationally reputable insurance carriers, long-term disability
plans of the Company that covered the
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Executive immediately prior to his termination of employment as if the
Executive had remained in employment for such period; provided, however,
that the coverage under any such plan is conditioned on the timely payment
by the Executive (or his spouse or dependent children) of the portion of
the premium for such coverage that actively employed senior executives
with the Company generally are required to pay for such coverage. In the
event that the Executive's participation in any such plan is barred, the
Company shall arrange to provide the Executive (and, if applicable, his
spouse and dependent children) with substantially similar benefits (but,
in the case of long-term disability benefits, only if reasonably
commercially available).
(f) The Company shall supplement the benefits payable in respect of
the Executive under the Company's Pension Plan and Supplemental Executive
Retirement Plan (and any successor plans thereto) (collectively, the
"Pension Plans") by paying the difference between (i) the benefits that
the Executive would have been entitled to receive under the Pension Plans
if he had been credited with two additional years of service (but no
additional years of age) for purposes of the benefit accrual formula under
the Pension Plans as of the date of termination of the Executive's
employment and (ii) the benefits that the Executive is entitled to receive
under the Pension Plans determined without regard to this subsection (f).
Such benefits shall be payable in the same form and at the same time as
the benefits under the respective Pension Plans.
(g) Each stock option granted by the Company to the Executive and
outstanding immediately prior to termination of his employment shall be
fully vested and immediately exercisable and may be exercised by the
Executive (or, following his death, by the person or entity to which such
option passes) at any time prior to the expiration date of the applicable
option (determined without regard to any earlier termination of the option
that would otherwise occur by reason of termination of his employment).
Each restricted stock award granted by the Company to the Executive and
outstanding immediately prior to termination of the Executive's employment
shall be fully vested upon such termination of employment.
(h) The Company will pay the Executive a car allowance of $500 per
month for 24 months following termination of the Executive's employment to
replace the Company-
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leased automobile, which leased automobile will be returned to the Company
by the Executive on the date of termination of the Executive's employment.
(i) The Company will provide the Executive with out-placement
services selected by the Executive, at the Company's expense not to exceed
$10,000.
(j) The Company shall promptly pay all reasonable attorneys' fees
and related expenses incurred by the Executive in seeking to obtain or
enforce any right or benefit under this Agreement or to defend against any
claim or assertion in connection with this Agreement, but only to the
extent the Executive substantially prevails.
10. Change of Control. For the purposes of this Agreement, a "Change
of Control" shall be deemed to have occurred if (a) any person or persons acting
together which would constitute a "group" for purposes of Section 13(d) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act"), (other than
the Company or any subsidiary of the Company) shall beneficially own (as defined
in Rule 13d-3 of the Exchange Act), directly or indirectly, at least 25% of the
total voting power of all classes of capital stock of the Company entitled to
vote generally in the election of the Board; (b) Current Directors (as herein
defined) shall cease for any reason to constitute at least a majority of the
members of the Board (for this purpose, a "Current Director" shall mean any
member of the Board as of the date hereof and any successor of a Current
Director whose election, or nomination for election by the Company's
shareholders, was approved by at least a majority of the Current Directors then
on the Board); (c) the shareholders of the Company approve (i) a plan of
complete liquidation of the Company or (ii) an agreement providing for the
merger or consolidation of the Company other than a merger or consolidation in
which (x) the holders of the common stock of the Company immediately prior to
the consolidation or merger have, directly or indirectly, at least a majority of
the common stock of the continuing or surviving corporation immediately after
such consolidation or merger or (y) the Board immediately prior to the merger or
consolidation would, immediately after the merger or consolidation, constitute a
majority of the board of directors of the continuing or surviving corporation;
or (d) the shareholders of the Company approve an agreement (or agreements)
providing for the sale or other disposition (in one transaction or a series of
transactions) of all or substantially all of the assets of the Company.
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11. Golden Parachute Excise Tax.
(a) In the event that any payment or benefit received or to be
received by the Executive pursuant to this Agreement or any other plan, program
or arrangement of the Company or any of its affiliates would constitute an
"excess parachute payment" within the meaning of Section 280G of the Internal
Revenue Code of 1986, as amended (the "Code"), then the payments under this
Agreement shall be reduced (by the minimum possible amounts) until no amount
payable to the Executive under this Agreement constitutes an "excess parachute
payment" within the meaning of Section 280G of the Code; provided, however, that
no such reduction shall be made if the net after-tax payment (after taking into
account Federal, state, local or other income and excise taxes) to which the
Executive would otherwise be entitled without such reduction would be greater
than the net after-tax payment (after taking into account Federal, state, local
or other income and excise taxes) to the Executive resulting from the receipt of
such payments with such reduction. If, as a result of subsequent events or
conditions (including a subsequent payment or absence of a subsequent payment
under this Agreement or other plan, program or arrangement of the Company or any
of its affiliates), it is determined that payments under this Agreement have
been reduced by more than the minimum amount required to prevent any payments
from constituting an "excess parachute payment", then an additional payment
shall be promptly made to the Executive in an amount equal to the additional
amount that can be paid without causing any payment to constitute an excess
parachute payment.
(b) All determinations required to be made under this Section 11
shall be made by a nationally recognized independent accounting firm mutually
agreeable to the Company and the Executive (the "Accounting Firm") which shall
provide detailed supporting calculations to the Company and the Executive as
requested by the Company or the Executive. All fees and expenses of the
Accounting Firm shall be borne solely by the Company and shall be paid by the
Company upon demand of the Executive as incurred or billed by the Accounting
Firm. All determinations made by the Accounting Firm pursuant to this Section 11
shall be final and binding upon the Company and the Executive.
(c) To the extent any payment or benefit is to be reduced pursuant
to this Section 11, the severance payment described in Section 8(c) or 9(c) will
first be reduced, then the bonus described in Section 9(d), and then the
supplemental pen-
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sion benefits described in Section 9(f), in each case only to the extent
necessary.
12. Entitlement to Other Benefits. Except as otherwise provided in
this Agreement, this Agreement shall not be construed as limiting in any way any
rights or benefits that the Executive or his spouse, dependents or beneficiaries
may have pursuant to any other plan or program of the Company.
13. Indemnification. The parties agree to execute a separate
Indemnification Agreement in the form attached as Exhibit B.
14. General Provisions.
14.1 No Duty to Seek Employment. The Executive shall not be under
any duty or obligation to seek or accept other employment following termination
of employment, and no amount, payment or benefits due to the Executive hereunder
shall be reduced or suspended if the Executive accepts subsequent employment,
except as expressly set forth herein.
14.2 Deductions and Withholding. All amounts payable or which become
payable under any provision of this Agreement shall be subject to any deductions
authorized by the Executive and any deductions and withholdings required by law.
14.3 Notices. All notices, demands, requests, consents, approvals or
other communications (collectively "Notices") required or permitted to be given
hereunder or which are given with respect to this Agreement shall be in writing
and may be personally served or may be faxed with a copy deposited in the United
States mail, registered or certified, return receipt requested, postage prepaid,
addressed as follows:
To the Company: Lydall, Inc.
X.X. Xxx 000
Xxx Xxxxxxxx Xxxx
Xxxxxxxxxx, XX 00000-0000
Attn: Chief Executive Officer
To the Executive: Xxxxx X. Xxxxx
0 Xxxx Xxxxx Xxxx
Xxxxxxxxxxx, XX 00000
or such other address as such party shall have specified most recently by
written notice. Notice mailed as provided herein shall be deemed given on the
fifth business day following the
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date so mailed or on the date of actual receipt, whichever is earlier.
14.4 No Disparagement. The Executive shall not during the period of
his employment with the Company, nor during the two-year period beginning on the
date of termination of his employment for any reason, disparage the Company or
any of its subsidiaries or affiliates or any of their shareholders, directors,
officers, employees or agents. The Executive agrees that the terms of this
Section 14.4 shall survive the term of this Agreement and the termination of the
Executive's employment.
14.5 Proprietary Information and Inventions. The Lydall Employee
Agreement previously executed by the Executive and attached hereto as Exhibit A
is incorporated by reference in this Agreement, and the Executive agrees to
continue to be bound thereby.
14.6 Covenant to Notify Management. The Executive agrees to abide by
the ethics policies of the Company as well as the Company's other rules,
regulations, policies and procedures. The Executive agrees to comply in full
with all governmental laws and regulations as well as ethics codes applicable.
In the event that the Executive is aware or suspects the Company, or any of its
officers or agents, of violating any such laws, ethics, codes, rules,
regulations, policies or procedures, the Executive agrees to bring all such
actual and suspected violations to the attention of the Company immediately so
that the matter may be properly investigated and appropriate action taken. The
Executive understands that the Executive is precluded from filing a complaint
with any governmental agency or court having jurisdiction over wrongful conduct
unless the Executive has first notified the Company of the facts and permits it
to investigate and correct the concerns.
14.7 Amendments and Waivers. No provision of this Agreement may be
modified, waived or discharged unless such waiver, modification or discharge is
agreed to in writing signed by the Executive and the Company. No waiver by
either Party hereto at any time of any breach by the other Party hereto of, or
compliance with, any condition or provision of this Agreement to be performed by
such other Party shall be deemed a waiver of similar or dissimilar provisions or
conditions at the same or at any prior or subsequent time.
14.8 Beneficial Interests. This Agreement shall inure to the benefit
of and be enforceable by a) the Company's successors and assigns and b) the
Executive's personal and le-
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gal representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. If the Executive shall die while any amounts are still
payable to him hereunder, all such amounts, unless otherwise provided herein,
shall be paid in accordance with the terms of this Agreement to the Executive's
devisee, legatee, or other designee or, if there be no such designee, to the
Executive's estate.
14.9 Successors. The Company will require any successors (whether
direct or indirect, by purchase, merger, consolidation or otherwise) to all or
substantially all of the business and/or assets of the Company to assume
expressly and agree to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform.
14.10 Assignment. This Agreement and the rights, duties, and
obligations hereunder may not be assigned or delegated by any Party without the
prior written consent of the other Party and any attempted assignment or
delegation without such prior written consent shall be void and be of no effect.
Notwithstanding the foregoing provisions of this Section 14.10, the Company may
assign or delegate its rights, duties and obligations hereunder to any affiliate
or to any person or entity which succeeds to all or substantially all of the
business of the Company or one of its subsidiaries through merger, consolation,
reorganization, or other business combination or by acquisition of all or
substantially all of the assets of the Company or one of its subsidiaries.
14.11 Choice of Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Connecticut.
14.12 Statute of Limitations. The Executive and the Company hereby
agree that there shall be a one year statute of limitations for the filing of
any requests for arbitration or any lawsuit relating to this Agreement or the
terms or conditions of Executive's employment by the Company. If such a claim is
filed more than one year subsequent to the Executive's last day of employment it
shall be precluded by this provision, regardless of whether or not the claim has
accrued at that time.
14.13 Right to Injunctive and Equitable Relief. The Executive's
obligations under Section 14.4 are of a special and unique character, which
gives them a peculiar value. The Company cannot be reasonably or adequately
compensated for damages in an action at law in the event the Executive breaches
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such obligations. Therefore, the Executive expressly agrees that the Company
shall be entitled to injunctive and other equitable relief without bond or other
security in the event of such breach in addition to any other rights or remedies
which the Company may possess or be entitled to pursue. Furthermore, the
obligations of the Executive and the rights and remedies of the Company under
Section 14.4 and this Section 14.13 are cumulative and in addition to, and not
in lieu of, any obligations, rights, or remedies as created by applicable law.
14.14 Severability or Partial Invalidity. The invalidity or
unenforceability of any provisions of this Agreement shall not affect the
validity or enforceability of any other provision of this Agreement, which shall
remain in full force and effect.
14.15 Entire Agreement. This Agreement, along with the Lydall
Employee Agreement and the Indemnification Agreement by and between the
Executive and the Company, constitutes the entire agreement of the Parties and
supersedes all prior written or oral and all contemporaneous oral agreements,
understandings, and negotiations between the Parties with respect to the subject
matter hereof. This Agreement may not be changed orally and may only be modified
in writing signed by both Parties. This Agreement, along with the Lydall
Employee Agreement and the Indemnification Agreement, is intended by the Parties
as the final expression of their agreement with respect to such terms as are
included herein and therein and may not be contradicted by evidence of any prior
or contemporaneous agreement. The Parties further intend that this Agreement,
along with the Lydall Employee Agreement and the Indemnification Agreement,
constitutes the complete and exclusive statement of their terms and that no
extrinsic evidence may be introduced in any judicial proceeding involving such
agreements.
14.16 Counterparts. This Agreement may be executed in any number of
counterparts, each of which when so executed shall be deemed an original but all
of which together shall constitute one and the same instrument.
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IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by its duly authorized officer and the Employee has hereunto set his
hand as of the day and year first above written.
LYDALL, INC.
By:
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Xxxxxxxxxxx X. Xxxxxxxxxxx Date
President and Chief
Executive Officer
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Xxxxx X. Xxxxx Date
