Exhibit 10.21
January 4, 2002
Xx. Xxxx X. Xxxxxxxx
0000 Xxxxx Xxxx
Xxxxx Xxxxxxxx, XX 00000
Dear Xxxx:
You are presently employed by C&D Technologies, Inc., a Delaware
corporation (the "Company"), in an executive capacity and the Company desires to
encourage such continued employment by providing certain protections for you by
entering into this Agreement with you, in return for which you agree to continue
to be employed by the Company on the terms set forth herein, to refrain from
certain competitive activity and to provide the Company with certain assurances
upon your departure. In consideration of same, the Company agrees to employ you,
and you agree to accept such employment, under the following terms and
conditions:
1. TERM OF EMPLOYMENT.
(a) Except for earlier termination as is provided in Section 9 or 10 below,
your employment under this Agreement shall be automatically renewed for
successive terms of one month each, unless either party shall have given to the
other party at least 30 days' prior written notice of the termination of this
Agreement (a "Termination Notice"). If such 30 days' prior written notice is
given by either party, (i) the Company shall, without any liability to you, have
the right, exercisable at any time after such notice is sent, to elect any other
person to the office or offices in which you are then serving and to remove you
from such office or offices, but (ii) all other obligations each of you and the
Company have to the other, including the Company's obligation to pay your
compensation and make available the medical and dental insurance to which you
are entitled hereunder, shall continue until the date your employment terminates
as specified in such notice.
2. COMPENSATION.
(a) You shall be compensated for all services rendered by you under this
Agreement at the rate of $150,000 per annum (such salary, as it is from time to
time adjusted, is herein referred to as the ("Base Salary"). Such Base Salary
shall be payable in periodic installments twice monthly in accordance with the
Company's payroll practices for salaried employees. The Compensation Committee
of the Board of Directors shall review such Base Salary prior to July 1, 2002
and on April 1 of each year thereafter during the term of this Agreement,
including any renewal term, and shall
make such adjustments, if any, as the Compensation Committee shall determine;
provided, however, that no adjustment shall reduce the Base Salary below
$150,000.
(b) If your employment hereunder shall be terminated (i) by the Company
without notice of Cause (as defined in Section 9(c)) therefor having been given
to you (other than pursuant to Section 9(a) or 9(b), or (ii) as a result of the
non-renewal of this Agreement pursuant to a Termination Notice given by the
Company under Section 1(a), then, in addition to paying you the Accrued
Obligations (as hereinafter defined), for a 180 day period after the effective
date of such termination, the Company shall pay you at the rate of your Base
Salary in effect at the time of such termination in periodic payments in
accordance with the Company's payroll practices for salaried employees;
provided, however, that your right to receive such payments, other than the
Accrued Obligations, shall be conditioned upon your execution of a Release (the
"Release"). Such Release shall be substantially in the form of Exhibit A hereto
but may be modified by the Company in its sole discretion as it deems
appropriate to reflect changes in law or circumstances arising after the date of
this Agreement; provided, however, that no such modification shall increase any
of your obligations to the Company over those contemplated by this Agreement,
including Exhibit A hereto. The term "Accrued Obligations" shall mean (i) your
Base Salary through the date of termination and (ii) all benefits that have
accrued to you under the terms of all employee benefits plans of the Company in
which you are entitled to participate.
3. DUTIES.
(a) During the term of your employment hereunder, including any renewal
thereof, you agree to serve as the Vice President & General Manager, Motive
Power Division of C&D Technologies, Inc. or in such other capacity with duties
and responsibilities of a similar nature as those initially undertaken by you
hereunder as the President of the Company may from time to time determine. Your
duties may be changed at any time and from time to time hereafter, upon mutual
agreement, consistent with office or offices in which you serve as deemed
necessary by the President of the Company. You also agree to perform such other
services and duties consistent with the office or offices in which you are
serving and its responsibilities as may from time to time be prescribed by the
Board of Directors, and you also agree to serve, if elected, as an officer
and/or director of the Company and/or any of the Company's other direct or
indirect subsidiaries without additional compensation, in all cases in
conformity to the by-laws of each such corporation.
(b) You shall devote your full employment energies, interest, abilities,
time and attention during normal business hours (excluding the vacation periods
provided in Section 4(b) below) exclusively to the business and affairs of the
Company, its parent corporation and subsidiaries, if any, and shall not engage
in any activity that conflicts or interferes with the performance of duties
hereunder; provided, however, that you may serve on the Board of Directors of
Interspiro, AB to the extent that your responsibilities related to that position
do not adversely affect your performance of duties hereunder.
-2-
(c) You agree to cooperate with the Company, including taking such
reasonable medical examinations as may be necessary, in the event the Company
shall desire or be required (such as pursuant to the terms of any bank loan or
any other agreement) to obtain life insurance insuring your life.
(d) You shall, except as otherwise provided herein, be subject to the
Company's rules, practices and policies applicable to the Company's senior
executive employees. Without limiting the generality of the foregoing, you
shall, with respect to the Company and its parents, subsidiaries, assets and
stockholders, act in a manner consistent with your fiduciary responsibilities as
an executive of the Company.
4. BENEFITS.
(a) You shall have the benefit of such life and medical insurance, bonus,
stock option and other similar plans as the Company may have or may establish
from time to time, and in which you would be entitled to participate by reason
of your position with the Company, pursuant to the terms thereof. Also, to the
extent you have met the qualifications required, you may participate in the
Company's savings and retirement plans. The foregoing, however, shall not be
construed to require the Company to establish any such plans or to prevent the
Company from modifying or terminating any such plans, and no such action or
failure thereof shall affect this Agreement.
(b) You shall be entitled to a vacation of four weeks each year.
(c) The Company will provide you with an annual physical examination.
5. EXPENSES.
(a) The Company will reimburse you for reasonable expenses (consistent with
Company policy), including traveling expenses, incurred by you in connection
with the business of the Company, upon the presentation by you of appropriate
substantiation for such expenses.
(b) The Company shall provide to the title company insuring title to the
property, by wire transfer or cashier's check made payable to the title company,
the sum of $50,000 to be applied to the purchase price of a residence for you
(the "First Residence"), provided (i) that all conditions precedent to closing
on the First Residence that apply to you, as buyer, have been fulfilled or
satisfied (other than the payment of the aforesaid $50,00 toward the purchase
price thereof); (ii) the First Residence is located within 25 miles of the C&D
facility in Blue Xxxx, Pennsylvania; (iii) closing on the First Residence shall
occur on or before July 31, 2002; and, (iv) the purchase price of the First
Residence is equal to or greater than $50,000.
(c) C&D will additionally reimburse you up to the amount of $9,500 (grossed
up at C&D's standard rate) for costs associated with the purchase of and
relocation to the First Residence, to be applied to costs of surveys, title
insurance premiums, search fees, recording fees, and moving expenses, as soon as
administratively practicable after the submission of appropriate documentation
-3-
therefor. Amounts reimbursed will be deducted from amounts otherwise payable to
you or payable on your behalf pursuant to the Company's Relocation Program in
connection with the contemplated subsequent move of your family to a residence
located in the Blue Xxxx area (the "Second Residence") (i.e., no "double
payments").
(d) Should you voluntarily resign your employment with C&D within 12-months
from the date of closing on the First Residence, you agree to reimburse C&D for
the full amount reimbursed, as described in Section 5(c), plus the applicable
gross up. Further, any expenses reimbursed to you in connection with your
purchase of the First Residence (excluding the $50,000) shall be offset from
amounts otherwise payable to you or on your behalf under the Company's standard
Relocation Program in connection with your family's relocation to the Second
Residence.
(e) Notwithstanding anything to the contrary in Sections 5(b) or (c)
hereof, in the event below your employment is terminated prior to July 31, 2002
following a Change of Control (as defined below) for any reason other than
death, disability or for Cause pursuant to Sections 9(a), (b) or (c) without the
contingencies described in Section 5(b) having been satisfied, you shall be
entitled to receive the $50,000 payment referred to in Section 5(b) within five
(5) business days of your date of termination. Said payment shall be in addition
to those payable to you in a Change of Control Termination, as described.
(f) C&D will arrange for the continued payment to you of an allowance for
temporary living expenses in the amount of $2,000 per month, grossed up for
income tax purposes (at the rate currently in effect) through the earlier to
occur of the date of closing on the First Residence or July 31, 2002.
6. RESTRICTIVE COVENANTS.
(a) During such time as you shall be employed by the Company, and for the
applicable Restricted Period (as defined below) thereafter, you shall not,
without the written consent of the Board of Directors, directly or indirectly,
become associated with, render services to, invest in, represent, advise or
otherwise participate as an officer, employee, director, stockholder, partner,
agent of or consultant for, any business that, at the time your employment with
the Company ceases, is competitive with the business in which the Company is
engaged or in which the Company has taken affirmative steps to engage (a
"Competitive Business"); provided, however, that nothing herein (i) shall
prevent you from investing without limit in the securities of any company listed
on a national securities exchange, provided that your involvement with any such
company is solely that of a stockholder, and (ii) is intended to prevent you
from being employed during the applicable Restricted Period by any business
other than a Competitive Business. With respect to any termination of your
employment other than upon a Change of Control pursuant to Section 10, the
applicable Restricted Period shall be the period following the date your
employment terminates during which you are receiving the payments described in
Section 2(b) hereof, and with respect to a termination of your employment upon a
Change of Control pursuant to Section 10, the applicable Restricted Period shall
be the two-year period following the date your employment terminates.
-4-
(b) The parties hereto intend that the covenant contained in this Section 6
shall be deemed a series of separate covenants for each state, county and city.
If, in any judicial proceeding, a court shall refuse to enforce all the separate
covenants deemed included in this Section 6, because, taken together, they cover
too extensive a geographic area, the parties intend that those of such covenants
(taken in order of the states, counties and cities therein which are least
populous), which, if eliminated, would permit the remaining separate covenants
to be enforced in such proceeding, shall, for the purpose of such proceeding, be
deemed eliminated from the provisions of this Section 6.
7. CONFIDENTIALITY, NON-INTERFERENCE, INVENTIONS AND PROPRIETARY
INFORMATION.
(a) In the course of (i) your employment with the Company hereunder, and
(ii) any prior employment with the Company, you will have and have had access to
Confidential or Proprietary Data or Information of the Company. You shall not at
any time divulge or communicate to any person nor shall you direct any Company
employee to divulge or communicate to any person (other than to a person bound
by confidentiality obligations similar to those contained herein and other than
as necessary in performing your duties hereunder) or use to the detriment of the
Company any of such Confidential or Proprietary Data or Information, except to
the extent the same (i) becomes publicly known other than through a breach of
this Agreement by you, (ii) was known to you prior to the disclosure thereof by
the Company to you from a source that was entitled to disclose it or (iii) is
subsequently disclosed to you by a third party who shall not have received it
under any obligation of confidentiality to the Company. The term "Confidential
or Proprietary Data or Information" as used in this Agreement, shall mean data
or information not generally available to the public, including personnel
information, financial information, customer lists, supplier lists, product and
tooling specifications, trade secrets, information concerning product
composition and formulas, tools and dies, drawings and schematics, manufacturing
processes, information regarding operations, systems and services, knowhow,
computer and any other electronic, processed or collated data, computer
programs, and pricing, marketing, sales and advertising data.
(b) You shall not, during the term of this Agreement and for the applicable
Restricted Period after the termination of your employment by the Company, for
your own account or for the account of any other person, (i) solicit or divert
to any Competitive Business any individual or entity who is a customer of the
Company or any subsidiary or affiliate of the Company or who was a customer of
the Company or any subsidiary or affiliate during the preceding twelve-month
period, (ii) employ, retain as a consultant, attempt to employ or retain as a
consultant, solicit or assist any Competitive Business in employing or retaining
as a consultant any current employee of the Company or any subsidiary or
affiliate or any person who was employed by the Company or any subsidiary or
affiliate during the preceding twelve-month period or (iii) otherwise interfere
with the Company's relationship with any of its suppliers, customers, employees
or consultants; provided, however, that you shall not be prohibited from
contacting suppliers or customers after termination of your employment with
regard to matters that do not violate your noncompetition or confidentiality
obligations contained in Sections 6(a) and 7(a) or interfere with the Company's
relationship with such parties.
-5-
(c) It is understood that you may, during your employment, conceive or
develop certain inventions, innovations or discoveries related to any business
in which the Company may be engaged, either solely or jointly with others. In
connection with the conception or development thereof, you agree to disclose
promptly to the Company all such inventions, innovations and discoveries, to
assign, and hereby do assign, to the Company all of your right, title and
interest in and to said inventions, innovations and discoveries, and to do all
things and sign all documents deemed by the Company to be necessary or
appropriate to vest in the Company, its successors and assigns, all of your
right, title and interest in and to such inventions, innovations or discoveries,
and to procure for the Company, at the Company's expense, patents, copyrights
and/or trademarks covering such inventions, innovations or discoveries in the
United States and its possessions and in foreign countries, at the discretion
and under the direction of the Company. In the event the Company is unable for
any reason to assure your signature on such documents, you irrevocably appoint
the Company and its duly authorized officers and agents as your agents and
attorneys-in-fact to execute such documents and to do such things with the same
legal force and effect as if executed or done by you.
(d) All written, electronic and other tangible materials, records and
documents made by you or coming into your possession during your employment
concerning any products, processes or equipment, manufactured, used, developed,
investigated or considered by the Company, or otherwise concerning the business
or affairs of the Company, shall be the sole property of the Company, and upon
termination of your employment, or upon request of the Company during your
employment, you shall promptly deliver the same to the Company. In addition,
upon termination of your employment, or upon request of the Company during your
employment, you will deliver to the Company all other Company property in your
possession or under your control, including, but not limited to, financial
statements, marketing and sales data, patent applications, drawings and other
documents, and all Company keys, credit cards, computer and telephone equipment
and automobiles.
8. EQUITABLE RELIEF. With respect to the covenants contained in Sections 6
and 7 of this Agreement, you agree that any remedy at law for any breach of said
covenants may be inadequate and that the Company shall be entitled to specific
performance or any other mode of injunctive and/or other equitable relief to
enforce its rights hereunder or any other relief a court might award.
9. EARLIER TERMINATION. Your employment hereunder shall terminate prior to
the Initial Term (or any renewal term, in the event of renewal) on the following
terms and conditions:
(a) This Agreement shall terminate automatically on the date of your death.
Notwithstanding the foregoing, if you die during the term of this Agreement, the
Company shall (i) continue to make payments to your estate of your Base Salary
as then in effect pursuant to this Agreement for 180 days after the date of your
death, and (ii) pay your estate any reimbursable expenses which otherwise would
have been paid to you to the date of your death.
(b) This Agreement shall be terminated if you are unable to perform your
duties hereunder for a period of any 180 days in any 365 consecutive day period
by reason of physical or mental disability. Notwithstanding the foregoing, if
this Agreement is terminated pursuant to this
-6-
Section 9(b), the Company shall pay any accrued but unpaid Base Salary through
the date of termination and any reimbursable expenses due to you hereunder. For
purposes of this Agreement "physical or mental disability" shall mean your
inability, due to health reasons, to discharge properly your duties of
employment, supported by the opinion of a physician satisfactory to both you and
the Company. If the parties do not agree on a physician mutually satisfactory to
both of you and the Company within ten days of written demand by one or the
other, a physician shall be selected by the president of the Pennsylvania
Medical Association, and the physician shall, within 30 days thereafter, make a
determination as to whether disability exists and certify the same in writing.
Services of the physician shall be paid for by the Company. You shall fully
cooperate with the examining physician including submitting yourself to such
examinations as may be requested by the physician for the purpose of determining
whether you are disabled.
(c) This Agreement shall terminate immediately upon the Company's sending
you written notice terminating your employment hereunder for Cause. The Company
may terminate this Agreement for Cause, but only after written notice specifying
the Cause of such action shall have been rendered to you by the President of the
Company. "Cause" shall mean any of the following:
(i) Breach of this Agreement.
(ii) Refusal or inability (other than pursuant to Section 9(a)
or 9(b)) to perform duties assigned to you in accordance with the terms of this
Agreement or overt and willful disobedience of orders or directives issued to
you by the Company and within the scope of your duties to the Company.
(iii) Willful misconduct in the performance of your duties,
functions and responsibilities.
(iv) Commission of acts that are illegal in connection with
the performance of your duties, functions and responsibilities under this
Agreement.
(v) Commission of acts that would constitute a felony offense
during the term of this Agreement.
(vi) Violation of Company rules and regulations concerning
conflict of interest.
(vii) Gross mismanagement of the assets of the Company.
(viii) Gross incompetence, gross insubordination or gross
neglect in the performance of your duties hereunder or being under the habitual
influence of alcohol while on duty or possession, use, manufacture,
distribution, dispensation or sale of illegal drugs while on or off duty.
(ix) Any act or omission, whether or not included in the
foregoing, that a court of competent jurisdiction would determine to constitute
cause for termination.
-7-
Existence of Cause shall be conclusively determined for all purposes hereunder
by the President of the Company. Such advice and consultation shall be utilized
as such officer regards as appropriate, and no obligation or duty with respect
to any procedure or formality is created by this Agreement. If the Company
terminates this Agreement for Cause under this Section 9(c), the Company shall
not be obligated to make any further payments under this Agreement except for
the Accrued Obligations.
(d) Except as set forth in Section 10, your coverage under the benefits
program provided by the Company will cease effective on your termination date.
You will be entitled to elect continuation of your medical and dental benefits
at the same cost the Company pays, pursuant to the provisions of the
Consolidated Omnibus Budget Reconciliation Act ("COBRA"). Details with regard to
COBRA continuation coverage will be provided to you shortly after your
termination date.
(e) Except as set forth in Section 10, life insurance coverage will cease
upon your termination date. You may, however, apply to General American Life
Insurance Company (or such other insurance company as may provide group life
insurance to the Company's employees at the time) for an individual converted
life policy, with such application and payment of the first premium required to
be accomplished within 31 days after your termination date. Details regarding
this conversion option will be provided to you shortly after your termination
date.
(f) Accidental death and dismemberment and long term disability coverages
cease with your termination date and may not be extended or converted.
10. TERMINATION UPON A CHANGE OF CONTROL.
(a) In the event a Change of Control (as defined below) occurs, and within
24 months after such Change of Control: (i) your employment with the Company is
terminated by you pursuant to a Termination for Good Reason (as defined below);
or (ii) your employment with the Company is terminated by the Company for any
reason other than death, disability or for Cause pursuant to Sections 9(a), (b)
or (c); or (iii) this Agreement is not renewed due to a Termination Notice given
by the Company, as provided in Section 1(a), (the events under clauses (i), (ii)
and (iii) herein collectively called a "Change of Control Termination"), you
shall be entitled to receive the payments and benefits set forth in Section
10(e) and (f) below, which payments and benefits shall be in substitution for,
and not in addition to, the payments and benefits otherwise payable under
Section 2(a) or 2(b) of this Agreement in the event of termination. Your right
to receive such payments and benefits, other than the Accrued Obligations, shall
be in consideration of your agreements under this Agreement, including but not
limited to your agreement not to compete with the Company for two years after a
Change of Control pursuant to Section 6, and shall be conditioned upon your
execution of a Release. Such Release shall be substantially in the form of
Exhibit A but may be modified by the Company as it deems appropriate to reflect
changes in law or circumstances arising after the date of this Agreement;
provided that no such modification shall increase any of your obligations to the
Company over those contemplated by this Agreement, including Exhibit A hereto.
(b) For purposes of the Agreement, a "Change of Control" shall be deemed to
have occurred if: (i) any person (as defined in Section 3(a)(9) of the
Securities Exchange Act of 1934, as
-8-
amended (the "Exchange Act") and as used in Sections 13(d) and 14(d) thereof)),
excluding the Company, any subsidiary and any employee benefit plan sponsored or
maintained by the Company or any subsidiary (including any trustee of any such
plan acting in his capacity as trustee), but including a "group" as defined in
Section 13(d)(3) of the Exchange Act, becomes the beneficial owner (as defined
in Rule 13d-3 under the Exchange Act) of shares of the Company having at least
30% of the total number of votes that may be cast for the election of directors
of the Company; (ii) the shareholders of the Company shall approve any merger or
other business combination of the Company, sale of all or substantially all of
the Company's assets or combination of the foregoing transactions (a
"Transaction"), other than a Transaction involving only the Company and one or
more of its subsidiaries, or a Transaction immediately following which the
shareholders of the Company immediately prior to the Transaction continue to
have a majority of the voting power in the resulting entity (excluding for this
purpose any shareholder of the Company owning directly or indirectly more than
10% of the shares of the other company involved in the Transaction) and no
person is the beneficial owner of at least 30% of the shares of the resulting
entity as contemplated by Section 10(b)(i) above; or (iii) within any 24-month
period beginning on or after the date hereof, 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 of Directors of the Company or the board of directors of
any successor to the Company, provided that any director who was not a director
as of the date hereof shall be deemed to be an Incumbent Director if such
director 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
10(b)(iii), unless such election, recommendation or approval was the result of
an actual or threatened election contest of the type contemplated by Regulation
14a-11 under the Exchange Act or any successor provision. Notwithstanding the
foregoing, no Change of Control of the Company shall be deemed to have occurred
for purposes of this Agreement by reason of any actions or events in which you
participate in a capacity other than in your capacity as an executive or
director of the Company.
(c) For purposes of the Agreement, a "Termination for Good Reason" means a
termination by you by written notice given within 90 days after the occurrence
of the Good Reason event. A notice of Termination for Good Reason shall indicate
the specific termination provision in Section 10(d) relied upon and shall set
forth in reasonable detail the facts and circumstances claimed to provide a
basis for Termination for Good Reason. Your failure to set forth in such notice
any facts or circumstances that contribute to the showing of Good Reason shall
not waive any of your rights hereunder or preclude you from asserting such fact
or circumstance in enforcing your rights hereunder. The notice of Termination
for Good Reason shall provide for a date of termination not less than 10 nor
more than 60 days after the date such Notice of Termination for Good Reason is
given.
(d) For purposes of the Agreement, "Good Reason" shall mean the occurrence,
without your express written consent, of any of the following circumstances,
unless such circumstances are fully corrected prior to the date of termination
specified in the notice of Termination for Good Reason as contemplated in
Section 10(c) above: (i) any material diminution of your positions, duties or
responsibilities hereunder (except in each case in connection with the
termination of your
-9-
employment for Cause pursuant to Section 9(c) or due to disability or death
pursuant to Section 9(a) or 9(b) or temporarily as a result of your illness or
other absence), or the assignment to you of duties or responsibilities that are
inconsistent with your position under the Agreement at the time of a Change of
Control; (ii) your removal from, or your nonreelection to, the officer positions
with the Company specified in this Agreement; (iii) relocation of the Company's
principal executive offices to a location more than 25 miles from its location
at the time of the Change of Control; (iv) failure by the Company, after a
Change of Control, (A) to continue any bonus plan, program or arrangement in
which you are entitled to participate immediately prior to the Change of Control
(the "Bonus Plans"), provided that any such Bonus Plans may be modified at the
Company's discretion from time to time but shall be deemed terminated if (x) any
such plan does not remain substantially in the form in effect prior to such
modification and (y) if plans providing you with substantially similar benefits
are not substituted therefor ("Substitute Plans"), or (B) to continue you as a
participant in the Bonus Plans and Substitute Plans on at least the same basis
as to potential amount of the bonus and substantially the same level of criteria
for achievability thereof as you participated in immediately prior to any change
in such plans or awards, in accordance with the Bonus Plans and the Substitute
Plans; (v) any material breach by the Company of any provisions of this
Agreement; or (vi) failure of any successor to the Company to promptly
acknowledge in writing the obligations of the Company hereunder.
(e) Upon a Change of Control Termination, as provided in Section 10(a), the
Company shall pay or provide you the following payments and benefits:
(i) The Company shall pay to you the Accrued Obligations in a
lump sum within five business days after the date of termination.
(ii) The Company shall pay to you as severance pay, not later
than the tenth day following the date of your execution and delivery of the
Release required pursuant to Section 10(a) of this Agreement:
(A) a lump sum payment in an amount equal to two years
of your base salary; and
(B) a lump sum payment in an amount equal to two of
your annual incentive bonuses, such payment to be equal to the greater of
bonuses paid to you with respect to each of the two most recently completed
(i) the amount of all incentive bonuses paid to you with respect to each of
the two most recently completed fiscal years of the Company for which a bonus
has been paid or (ii) the incentive bonus paid to you with respect to the most
recently completed fiscal year of the Company for which a bonus has been paid
plus an amount equal to your Target Bonus (as hereinafter defined); provided,
however, that if you have been employed by the Company for less than two years,
such payment shall be equal to the greater of (x) the amount of the incentive
bonus paid to you with respect to the most recently completed fiscal year of
the Company for which a bonus has been paid plus your Target Bonus or (y) the
amount of your Target Bonus multiplied by two. The term "Target Bonus" shall
mean the incentive bonus that would have been payable for the fiscal year that
includes the date on which your employment terminates under the incentive bonus
program in effect as of the date of the Change of Control, assuming that you had
been entitled to receive an amount in respect of such bonus based solely upon
the target percentage
-10-
applicable to employees in the same employment grade as you and your Base Salary
as of the date of termination (or if greater, your Base Salary as of the date on
which occurred an event giving rise to a Change of Control Termination), and
without regard to actual performance.
(iii) The Company shall continue the participation of you and
your dependents for a period of two years after the date of termination in all
health, medical and accident, life and other welfare plans (as defined in
Section 3(l) of ERISA), in which you were participating immediately prior to the
date of termination, except for any disability plans; provided, however, that to
the extent the Company's plans do not permit such continued participation or
such participation would have an adverse tax impact on such plans or on the
other participants in such plans, the Company may instead provide materially
equivalent benefits to you outside of such plans; provided, further, that under
such circumstances, (i) medical insurance benefits may be provided by the
Company paying any COBRA premiums (COBRA coverage, in any event, to be measured
from the date of termination of employment) and (ii) if the Company is unable to
continue your life insurance coverage, the Company shall pay you an amount equal
to twice the premium paid during the year prior to termination or if you convert
the insurance to an individual policy, the Company shall pay the premium for
such insurance for two years. You shall complete such forms and take such
physical examinations as reasonably requested by the Company. To the extent you
incur any tax obligation as a result of the provisions of this Section 10(e)
that you would not have incurred if you remained an employee of the Company and
had continued to participate in the benefit plans as an employee, the Company
shall pay to you, at the time the tax is due, an amount to cover such taxes and
the taxes on the amount paid to cover such taxes.
(iv) All outstanding stock options and restricted stock awards
that have been granted to you by the Company at any time but have not yet vested
and upon which vesting depends solely upon the passage of time, shall
immediately vest or become nonforfeitable, as the case may be. In the event the
foregoing sentence becomes applicable, the Company agrees to cause the Board of
Directors to take all steps necessary to implement the foregoing sentence.
(v) All amounts payable to you upon a Change of Control under
the Company's Supplemental Executive Retirement Plan and Deferred Compensation
Plan shall be paid to you in accordance with the respective terms of those
plans.
(vi) The Company, at its expense, shall provide you with
outplacement services at a level appropriate for the most senior executive
employees through an outplacement firm of your choice for a period of up to one
year after the date of the Change of Control Termination.
(f) (i) In the event that any payment, coverage or benefit
(collectively, the "Covered Benefits") provided to you by the Company or an
Affiliate (as defined below) is or becomes subject to the excise tax imposed
under Section 4999 or any successor provision of the Internal Revenue Code of
1986, as amended (the "Code"), or you incur interest or penalties with respect
to that excise tax (that excise tax, together with any interest and penalties,
are hereinafter collectively referred to as the "Excise Tax"), the Company shall
pay you an additional amount (a "Gross-Up Bonus") at the time or times specified
in Section 10(f)(iii)(z) below. The amount of the Gross-Up Bonus shall
-11-
equal the quotient determined by dividing (x) the Excise Tax attributable to the
Covered Benefits by (y) one minus the highest marginal income tax rate, where
the term "highest marginal income tax rate" means the sum of the highest
combined local, state and federal personal income tax rates (including any state
unemployment compensation tax rate, any surtax rate as well as the Medicare
hospital insurance tax rate imposed on employees under the Federal Insurance
Contributions Act) as in effect for the calendar year to which the Excise Tax
attributable to the Covered Benefits relates, provided that in determining the
highest tax rate for federal purposes both the deductibility of state and local
income tax payments and the reduction in the deductibility of itemized
deductions shall be taken into account; it being the intention of the parties
hereto that your net after tax position (after taking into account any interest
or penalties imposed with respect to such taxes) upon receipt of the Covered
Benefits is no less advantageous to you than the net after tax position you
would have had if Section 4999 of the Code had not been applicable to any
portion of the Covered Benefits.
(ii) All determinations to be made under this Section 10(f),
including the determination of whether an Excise Tax is payable and the amount
thereof, shall be made by a law firm practicing in the Philadelphia,
Pennsylvania metropolitan area that is knowledgeable in tax law matters, which
firm shall be selected and paid for by the Company and acceptable to you. If tax
counsel's determinations are not finally accepted by the Internal Revenue
Service upon audit, then appropriate adjustments shall be computed (with a
Gross-Up Bonus, if applicable) by that tax counsel based upon the final amount
of the Excise Tax so determined.
(iii) For purposes of this Section 10(f):
(x) An "Affiliate" shall mean any successor to the Company, any member of
an affiliated group including the Company (determining using the definition in
Section 1504 of the Code) or any entity that becomes a memember of such an
affiliated group as a result of the transaction causing the Change of Control.
(y) When determining the amount of the Gross-Up Bonus, you will be deemed
to have otherwise allowable deductions for federal, state and local tax purposes
at least equal to those disallowed because of the inclusion of the Gross-Up
Bonus in your adjusted gross income.
(z) The portion of the Gross-Up Bonus attributable to a Covered Benefit
shall be paid to you within 10 business days following the provision to you of
the Covered Benefit. In the event that the amount of Excise Tax due exceeds the
amount of Excise Tax determined by tax counsel, the Company shall pay you an
additional Gross-Up Bonus in respect of that excess at the time that the amount
of the excess is determined under Section 10(f)(ii). In the event the amount of
Excise Tax due is less than the amount of Excise Tax determined by tax counsel,
you shall repay the Company the portion of the Gross-Up Bonus attributable
thereto at the time that the amount of the reduction in Excise Tax is determined
under Section 10(f)(ii); provided, however, that if any portion of the amount
you must repay to the Company has been paid to any federal, state or local tax
authority, your repayment of that portion shall be postponed until the tax
authority has actually refunded or credited that amount to you.
-12-
(g) Upon the occurrence of a Change of Control, if the Company fails to
perform any of its obligations under this Agreement or the Company or any other
person asserts the invalidity of any provision of this Agreement and you incur
any costs in successfully enforcing or defending any of the provisions of this
Agreement, including legal fees and expenses and court costs, the Company shall
reimburse you for all such costs incurred by you.
11. ENTIRE AGREEMENT; MODIFICATION. This Agreement, together with Exhibit A
hereto and all rights to which you are entitled under all employee benefit plans
in which you participate, constitutes the full and complete understanding of the
parties, and will, on the Effective Date, supersede all prior agreements and
understandings, oral or written, between the parties, except for the Agreement
Relating to Intellectual Property and Confidential Information dated December
28, 2000 between you and the Company ("Confidentiality Agreement"); provided,
however, that if the terms of any of such employee benefit plan or
Confidentiality Agreement shall be inconsistent with the provisions of the
Agreement, the provisions of this Agreement shall prevail. This Agreement may
not be modified or amended except by an instrument in writing signed by the
party against which enforcement thereof may be sought. Each party to this
Agreement, acknowledges that no representations, inducements, promises or
agreements, oral or written, have been made by either party or anyone acting on
behalf of either party, which are not embodied herein and that no other
agreement, statement or promise not set forth or referred to in this Agreement
shall be valid or binding.
12. SEVERABILITY. Any term or provision of this Agreement which is invalid
or unenforceable in any jurisdiction shall, as to such jurisdiction, be
ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction.
13. WAIVER OF BREACH. The waiver by either party of a breach of any
provision of this Agreement shall not operate as or be construed as a waiver of
any subsequent breach.
14. NO MITIGATION REQUIRED. Upon a termination of your employment by the
Company without Cause pursuant to Section 2(b) or upon a Change of Control
pursuant to Section 10, you shall have no obligation to seek other employment
but shall not be prohibited from doing so, and no compensation paid to you as
the result of any other employment shall reduce any payment required to be made
by the Company hereunder.
15. NOTICES. All notices hereunder shall be in writing and shall be sent by
express mail of by certified registered mail, postage prepaid, return receipt
requested: if to you, to your residence as listed in the Company's records; and
if to the Company, to the address set forth above with copies to the President.
16. ASSIGNABILITY; BINDING EFFECT. This Agreement shall not be assigned by
either party, except that it may be assigned by the Company to an acquirer of
all or substantially all of the assets of the Company or other successor to the
Company, subject to your rights arising from a change of
-13-
control as provided in Section 10. This Agreement shall be binding upon and
inure to the benefit of you, your legal representatives, heirs and distributees,
and shall be binding upon and inure to the benefit of the Company, its
successors and assigns.
17. NONDISPARAGEMENT. You agree not to publicly or privately disparage the
Company, its personnel, products or services either during or upon termination
of your employment with the Company.
18. SURVIVAL. All of the provisions of this Agreement that by their terms
are to be performed or that otherwise are to endure after the termination of
your employment by the Company shall survive the termination of your employment
and shall continue in effect for the respective periods therein provided or
contemplated.
19. GOVERNING LAW. All questions pertaining to the validity, construction,
execution and performance of this Agreement shall be construed and governed in
accordance with the laws of the Commonwealth of Pennsylvania, without giving
effect to the conflicts or choice of law provisions thereof.
20. HEADINGS. The headings of this Agreement are intended solely for
convenience of reference and shall be given no effect in the construction or
interpretation of this Agreement.
21. COUNTERPARTS. This Agreement may be executed in several counterparts,
each of which shall be deemed to be an original but all of which together shall
constitute one and the same instrument.
If this Agreement correctly sets forth our understanding, please sign the
duplicate original in the space provided below and return it to the Company,
whereupon this shall constitute the employment agreement between you and the
Company effective and for the term as stated herein.
C&D TECHNOLOGIES, INC.
By: /s/ Xxxx Xxxxxxx
Title: President
Agreed as of the date first above written:
/s/ Xxxx X. Xxxxxxxx
--------------------------------
Xxxx X. Xxxxxxxx
-14-
EXHIBIT A
RELEASE
This Release is made this _____ day of _______________, ____ by and between
C&D Technologies, Inc. ("Employer") and _________________ ("Employee").
RECITALS:
WHEREAS, the parties are parties to an Employment Agreement (the
"Employment Agreement") dated __________, pursuant to which Employee was
employed by Employer; and
WHEREAS, the Employment Agreement has terminated; and
WHEREAS, your execution and delivery of this Release is a condition to the
Employer's obligations to pay certain compensation and benefits to you under the
Employment Agreement;
NOW THEREFORE, the parties hereto, intending to be legally bound, in
consideration of the mutual promises and undertakings set forth herein, do
hereby agree as follows:
1. As of _____________________, ____, Employee's employment with Employer
shall terminate, and Employee shall have no further job responsibilities to
perform for Employer; provided, however, that Employee shall cooperate with
Employer in transitioning Employee's job responsibilities as Employer shall
reasonably request, provided that Employee shall be entitled to receive
reasonable compensation for any services rendered after such date and shall not
be obligated to take any action that would interfere with any subsequent
employment of Employee or otherwise result in economic hardship to Employee.
2. Employer shall pay to the Employee the amounts contemplated pursuant to
Section __ of the Employment Agreement, less applicable deductions; provided
however, the first payment shall not be due and payable until ten days after the
execution by Employee and delivery to Employer of this Release.
3. For and in consideration of the monies and benefits paid to Employee by
Employer, as more fully described in Section 2 above, and for other good and
valuable consideration, Employee hereby waives, releases and forever discharges
Employer, its assigns, predecessors, successors, and affiliated entities, and
its current or former stockholders, officers, directors, administrators, agents,
servants and employees, individually and as representatives of the corporate
entity (hereinafter collectively referred to as "Releasees"), from any and all
claims, suits, debts, dues, accounts, reckonings, bonds, bills, specialties,
covenants, contracts, bonuses, controversies, agreements, promises, charges,
complaints, damages, sums of money, interest, attorney's fees and costs, or
causes of action of any kind or nature whatsoever whether in law or equity,
including, but not limited to, all claims arising out of his/her employment or
termination of employment with Employer, such as all
A-1
claims for wrongful discharge, breach of contract, either express or implied,
interference with contract, emotional distress, fraud, misrepresentation,
defamation, claims arising under the Civil Rights Acts of 1964 and 1991 as
amended, the Americans With Disabilities Act, the Age Discrimination in
Employment Act (ADEA), the National Labor Relations Act, the Fair Labor
Standards Act, the Employee Retirement Income Security Act of 1974 (ERISA), the
Family and Medical Leave Act, the Pennsylvania Human Relations Act, the
Pennsylvania Wage Payment & Collection Law, the Pennsylvania Minimum Wage Act of
1968, the Pennsylvania Equal Pay Law, and any and all other claims arising under
federal, state or local law, rule, regulation, constitution, ordinance or public
policy whether known or unknown, arising up to and including the date of
execution of this Release; provided, however that the parties do not release
each other from any claim of breach of the terms of this Release. This release
of rights does not extend to claims that may arise after the date of this
Release. Employee agrees that Employee will not initiate any charge or complaint
or institute any claim or lawsuit against Releasees or any of them based on any
fact or circumstance occurring up to and including the date of the execution by
Employee of this Release.
4 . Employee agrees that the payments made and other consideration received
pursuant to this Release are not to be construed as an admission of legal
liability by Releasees or any of them and that no person or entity shall utilize
this Release or the consideration received pursuant to this Release as evidence
of any admission of liability since Releasees expressly deny liability.
5 . Employee affirms that the only consideration for the signing of this
Release are the terms stated herein and in the Employment Agreement and that no
other promise or agreement of any kind has been made to Employee by any person
or entity whatsoever to cause Employee to sign this Release.
6. Employee and Employer affirm that the Employment Agreement and this
Release set forth the entire agreement between the parties with respect to the
subject matter contained herein and supersede all prior or contemporaneous
agreements or understandings between the parties with respect to the subject
matter contained herein. Further, there are no representations, arrangements or
understandings, either oral or written, between the parties, which are not fully
expressed herein. Finally, no alteration or other modification of this Release
shall be effective unless made in writing and signed by both parties.
7. Employee acknowledges that Employee has been given a period of at least
21 days within which to consider this Release.
8. Following the execution of this Release, the Employee has a period of 7
days from the date of execution to revoke this Release, and this Release shall
not become effective or enforceable until the revocation period has expired.
9. Employee certifies that Employee has returned to Employer all keys,
identification cards, credit cards, computer and telephone equipment and other
property or information of Employer in Employee's possession, custody, or
control including, but not limited to, any information contained in any computer
files maintained by Employee during Employee's
A-2
employment with Employer. Employee certifies that Employee has not kept the
originals or copies of any documents, files, or other property of Employer which
Employee obtained or received during Employee's employment with Employer.
10. Employee acknowledges that Employer advised Employee to consult with an
attorney prior to the executing this Release.
11. Employee affirms that Employee has carefully read this Release, that
Employee fully understands the meaning and intent of this document, that
Employee has signed this Release voluntarily and knowingly, and that Employee
intends to be bound by the promises contained in this Release for the
consideration described in Section 2 above.
IN WITNESS WHEREOF, Employee and the authorized representative of Employer
have executed this Release on the dates indicated below:
C&D TECHNOLOGIES, INC.
Dated: By:
--------------------- ---------------------------------
Title:
------------------------------
Dated:
--------------------- -----------------------------
Xxxx X. Xxxxxxxx
A-3
ENDORSEMENT
I, ___________________________________, hereby acknowledge that I was given
21 days to consider the foregoing Release and voluntarily chose to sign the
Release prior to the expiration of the 21-day period.
I declare under penalty of perjury under the laws of the Commonwealth of
Pennsylvania that the foregoing is true and correct.
EXECUTED this ________ day of ______________, ____, at
_______________________________________, Pennsylvania.
-----------------------------
Xxxx X. Xxxxxxxx
A-4
