EMPLOYMENT AGREEMENT
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Agreement made this 1st day of August, 1995, by and between GELMAN SCIENCES,
INC. ("Employer") and KIM A. DAVIS ("Employee").
1. Employment.
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A. Employer hereby offers to Employee and Employee hereby
accepts continued employment by Employer on the conditions set forth herein.
2. Duties.
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A. Employee has been appointed and shall continue to serve
Employer as President and Chief Operating Officer, reporting in such capacity
directly to the Chief Executive Officer of Employer ("CEO").
B. Employee's duties and powers in such capacity shall be as
determined, from time to time, by CEO.
3. Term.
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A. The term of this Agreement shall be three (3) years beginning
August 1, 1995, which term shall be automatically extended one (1) year on
August 1, 1996 and on August 1 of each year thereafter, unless Employer shall
have given:
(1) not less than six (6) months written notice of
termination to Employee where there has been no change in control of
Employer; or
(2) where there has been a change in control of Employer,
not less than twelve (12) months written notice of termination to
Employee.
B. This Agreement shall be automatically earlier terminated and
the earlier termination shall supersede the later effective date of an Employer
written notice of termination of Agreement provided for in Paragraph 3.A., only
in the following manner:
(1) Upon the death of Employee; or
(2) Upon Employee's resignation, at any time, after ninety
(90) calendar days written notice to Employer where there has been no
change in control of Employer, in which event Employee shall not be
entitled to any additional compensation or benefits; or
(3) Upon Employee's disability whereby Employee is unable to
perform the essential duties of his assigned position for a period
exceeding one hundred eighty (180) calendar days within a one (1) year
period; or
(4) Upon Employer's termination of Employee, without cause,
at any time, after Employer has given ninety (90) calendar days written
notice of termination to Employee, in which event Employee shall become
eligible for termination compensation as set forth in Paragraph 4.C
below; or
(5) Upon Employee's resignation within one (1) year of a
change in control of Employer, after ninety (90) calendar days written
notice to Employer, in which event Employee shall become eligible for
termination compensation in the amount as determined in Paragraph 4.C
below; or
(6) Upon Employer's termination of Employee for violating
any of the provisions of Paragraph 7 below, in which event Employee shall
not be entitled to any additional compensation or benefits.
4. Compensation.
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A. Employer shall pay, and Employee shall accept, as base
compensation for all services rendered, not less than the amount received per
annum effective as of August 1, 1995, less appropriate payroll taxes
("salary"), payable in equal installments in accordance with Employer's normal
payroll periods, with annual reviews and adjustments, if any, at the discretion
of CEO, as approved by the Employer's Board of Directors ("Board").
B. Employee shall, following the conclusion of each full
Employer fiscal year of active employment, become eligible for an incentive
bonus, established at the discretion of the Board, which incentive bonus
effective for the Employer's 1996 fiscal year and the fiscal years thereafter,
shall consist of an amount equal to:
(1) Fifty percent (50%) of the Employee's current annual
salary for achieving the corporate goals, established at the discretion
of Board; or
(2) Seventy-five percent (75%) of the Employee's current
annual salary for exceeding the corporate stretch goals, established at
the discretion of the Board. Incentive bonus, if any, shall be payable
to Employee on or before the seventieth (70th) calendar day after the
Employer's fiscal year end.
C. If this Agreement is earlier terminated pursuant to Paragraph
3.B.(4) or 3.B.(5), Employee shall become eligible for termination compensation
as follows:
(1) Where there has been no change in control of Employer,
and:
(a) the Employer is achieving or exceeding the
projected performance plan as approved by the Board, a severance
amount equal to the amount of base compensation and incentive bonus
the Employee would have received in the year of termination, for
the greater of the remaining balance of the contract or two (2)
years;
(b) the Employer is not achieving the projected
performance plan as approved by the Board, a severance amount equal
to the amount of base compensation the Employee would have received
in the year of termination, for the greater of the remaining
balance of the contract or two (2) years;
(2) Where there has been a change in control of Employer,
and:
(a) the Employer is achieving or exceeding the
projected performance plan as approved by the Board, a severance
amount equal to the amount of base compensation and incentive bonus
the Employee would have received in the year of termination, for
the remaining balance of the contract plus two (2) years;
(b) the Employer is not achieving the projected
performance plan as approved by the Board, a severance amount equal
to the amount of base compensation the Employee would have received
in the year of termination, for the remaining balance of the
contract plus two (2) years;
(c) immediate vesting of all stock options and awards;
and,
(d) immediate payment of all incentive awards earned.
To the extent the termination compensation and any other
amounts received as a result of termination are subject to the excise tax of
Internal Revenue Code Section 4999 (or any successor statute), the severance
amount shall be increased by a one (1) time calculation (without a pyramid
effect) of the product derived by multiplying the "excess parachute payments"
(as defined in Code Section 4999) as initially calculated by the applicable
excise tax rate (currently twenty percent (20%)).
Change in control of the Employer means:
i) the acquisition of beneficial ownership by
any person or entity (or more than one (1) person or entity
acting as a group) of a majority of the outstanding voting
shares of Employer: or
ii) a tender offer made and consummated for at
least thirty-three percent (33%) of Employer's common stock;
or
iii) the acquisition of beneficial ownership by
any person or entity (or more than one (1) person or entity
acting as a group) of more than fifty-one percent (51%) of
the total fair market value of the Employer's assets; or
iv) a majority of the members of the Board are
replaced within a one (1) year period.
The severance amount shall be payable in equal annual
installments to the Employee, which annual installments shall be further
divided into equal payments made at the same frequency as Employee's salary,
less appropriate payroll taxes, commencing with the first payroll period
following Employee's termination, conditioned on Employee's execution of a
release agreement acknowledging that Employee is entitled to no other
compensation and benefits, except as provided in this Agreement, and
effectively waiving any and all claims against Employer, its officers,
directors, employees, affiliates, subsidiaries, successors and assigns arising
out of Employee's employment or separation from employment with Employer. The
Employer shall have the right, at its option and without penalty, to accelerate
payments owed to the Employee.
5. Expenses.
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A. Employer shall reimburse Employee, upon presentation of
proper documentation, for reasonable expenses incurred by Employee in the
performance of his assigned duties.
B. Employer shall provide Employee with an automobile befitting
Employee's status among other executive employees as President and Chief
Operating Officer, by which to perform his assigned duties, at no cost to the
Employee.
6. Benefits.
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A. Employee shall be eligible to participate in all benefit
programs that Employer makes available, from time to time, to executive
employees, including such benefit programs as medical, dental, life, long-term
disability, 401(k), and others, on the same terms and conditions as other
executive employees.
B. (1) Employee shall be covered by an additional, separate,
whole life insurance policy in the amount of One Million Dollars
($1,000,000) designed to be, and premiums paid annually for a paid up
policy in ten (10) years, the face value of which shall be payable to the
Employee's designated beneficiary upon the Employee's death, except for
the events described in Paragraph 6.B.(2) below (excluding Employee's
death) in which case only the vested portion of the policy (as defined in
Paragraph 6.B.(3) below) shall be payable to Employee's designated
beneficiary;
(2) The premiums for the whole life insurance policy shall
continue to be paid by the Employer during Employee's employment with
Employer and after Employee's separation from employment with Employer
while Employer is making payments to Employee pursuant to Paragraph 4.C,
unless the Employee resigns employment under Paragraph 3.B.(2), 4.B.(2)
above, or the Employee is terminated from employment under Paragraph
3.B.(6) above, or this Agreement is terminated pursuant to Paragraph 3.A
above, or the Employee dies, or Employee violates a covenant set forth in
Exhibit A, in which event the Employer's obligations to continue paying
the whole life insurance policy premiums shall cease;
(3) The whole life insurance policy and its cash value
shall become incrementally vested to the Employee at the rate of ten
percent (10%) of the whole life insurance policy's face and cash value
for each full year after August 1, 1995 the Employer is obligated to
continue paying the premiums on the whole life insurance policy as
provided in Paragraph 6.B.(2) above;
(4) At such time as the Employer is no longer obligated to
make payments pursuant to Paragraph 4.C, the Employer shall transfer
ownership of said policy to Employee.
C. Employee shall be eligible for up to six (6) weeks paid
vacation annually, scheduled by mutual agreement between Employee and CEO.
D. Employer shall, during the term of this Agreement, pay the
dues and assessments required for Employee to maintain full membership
privileges at Travis Pointe Country Club.
7. Undertakings of Employee.
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A. The parties acknowledge that Employer is engaged in the
business of manufacturing, distributing and selling microporous membranes,
filters and microfiltration products, worldwide. Employee, because of his
position with Employer, will obtain, or have access to, highly confidential,
proprietary information and trade secrets and, as a result, Employee agrees
that:
(1) Employee will execute, and at all times honor and
comply with all of the conditions set forth in, the Confidentiality and
Patent Protection Agreement attached hereto and made a part hereof as
Exhibit A; and
(2) At all times during Employee's employment, and for
three (3) years following the termination of Employee's employment,
Employee will not, directly or indirectly, without the express written
consent of Employer's Board, perform service for, aid, assist, own,
operate, have any financial interest in, or serve as employee, officer,
director, agent, partner, consultant, part-owner, shareholder, or engage
in, any microporous filter business which is competitive with Employer,
or with microporous products provided by Employer, or with microporous
products provided by Employer, and among the remedies set forth in the
above-referenced Confidentiality and Patent Protection Agreement.
B. Employer relies upon Employee's representation that Employee
will:
(1) competently perform all assigned duties;
(2) carry out all policies, directives and decisions of
Employer's Board and CEO;
(3) not withhold from Employer's Board or CEO, and will
promptly report to CEO, any information which may affect Employer's
business;
(4) refrain from any conduct which is illegal, dishonest,
fraudulent, or detrimental to Employer's business, as determined by
Employer's Board; and
(5) devote his entire time, attention and energies to the
operations of Employer and shall not, during the term of this Agreement,
without consent of the Board, be engaged in any other business activity
requiring any amount of his business time, whether or not such business
activity is pursued for gain, profit or pecuniary advantage.
8. Entire Agreement.
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This Agreement supersedes and cancels all prior agreements,
whether verbal or written, between Employer and Employee and constitutes the
entire Agreement between the parties. Any amendment or agreement supplemental
hereto shall not be binding upon either party unless executed in writing by
Employer and the Employee.
9. Miscellaneous.
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A. This Agreement shall be binding upon and inure to the benefit
of the parties and their respective heirs, successors, personal representatives
and assigns.
B. This Agreement shall be interpreted in accordance with and
governed by the laws of the State of Michigan.
C. Any and all notices or any other communication provided for
herein shall be given in writing by certified mail, return receipt requested,
which shall be addressed to the addresses shown immediately below each party's
signature unless notice of a change of address is furnished to the other
parties in the manner provided in this paragraph.
D. This Agreement will be executed simultaneously in two (2) or
more counterparts, each of which shall be deemed an original but all of which
shall constitute one (1) and the same instrument and agreement.
E. Each paragraph of this Agreement or portion thereof shall be
treated as severable, to the end that if any paragraph or portion thereof shall
be declared illegal, invalid or unenforceable, this Agreement shall be
interpreted so that part only is invalid, without invalidating the remainder of
this Agreement, which shall remain in full force and effect as though such
paragraph or portion thereof had never been contained in this Agreement, and
the affected part shall be interpreted, consistent with the law, to carry out
the intent of the parties.
IN WITNESS WHEREOF, the parties have signed this Employment Agreement as
of the date first above written.
WITNESSES: GELMAN SCIENCES, INC.
/s/ John A. Geishecker Jr. By /s/ Charles Gelman
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Its Chairman
600 South Wagner Road
Ann Arbor, MI 48106-1448
/s/ Kim A. Davis
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KIM A. DAVIS
5366 Hidden Pines Ct.
Brighton, Mi. 48116-7729
Exhibit A
CONFIDENTIALITY AND PATENT PROTECTION AGREEMENT
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This Agreement entered into as of the date last hereinafter written by
and between the undersigned employee (hereinafter "Employee") and GELMAN
SCIENCES, INC., a Michigan corporation (herein "Employer"), pertaining to the
employment of the Employee by the Employer:
WHEREAS, the Employer requires that all employees, as a condition of
their employment, covenant and agree with the Employer to hold its Trade
Secrets in utmost respect and confidence and not to use or disclose such
information in any way in conflict with the Employer's interest.
NOW, THEREFORE, in consideration of the premises upon which this
Agreement is based and of the engagement of the Employee as an employee of the
Employer, the Employee hereby expressly covenants and agrees as follows:
The Employer is engaged in the manufacture, distribution and sale of
microporous membranes, textiles and microfiltration products, worldwide. In
conducting such business, the Employer has developed, collected, compiled,
organized, analyzed and/or systematized certain information including (but not
necessarily limited to) customer information, market studies and research,
marketing methods and techniques, operating and pricing policies, product
formulae, product designs and technologies, operating and pricing policies,
product formulae, product designs and technologies, manufacturing processes and
technologies, innovative research and development, and certain computer
software, which information is used by the Employer in conducting its said
business, gives the Employer an advantage or the opportunity to gain an
advantage over its competitors and potential competitors who do not know or use
it, and is not public information and is not generally known in the industry;
such information being collectively and individually referred to herein as
"Trade Secrets". The Employer expects to develop, collect, compile, organize,
analyze and/or systematize the same or similar kinds of information and to
conceive and invent new products, devices, manufacturing processes, software
and technologies, continually and in the future, which information and
inventions shall become Trade Secrets belonging to the Employer and shall be
protected by this Agreement.
All Trade Secrets belonging to the Employer and all records pertaining
thereto, including (without limitation) those which may be created or developed
by the Employee, are and shall be and remain the property of the Employer. The
Employee will not ever utilize any Trade Secret belonging to the Employer or
any record pertaining thereto for his benefit or for the benefit of others, or
for any purpose other than in the ordinary course of and in the furtherance of
the Employer's business.
The Employee will not ever publish or disclose, nor permit to be
published or disclosed, any Trade Secrets belonging to the Employer to anyone
not authorized to have access thereto without the prior written consent of the
Chief Executive Officer of the Employer ("CEO"). Moreover, the Employee agrees
to report forthwith to the Employer's Board or CEO any violation of this or any
other policy of the Employer applicable to its Trade Secrets, known to or which
may come to the knowledge of the Employee.
The Employee will have no obligation of confidentiality as to any
information which is or hereafter becomes generally known among the Employer's
competitors or to the public otherwise than by an unauthorized disclosure by
the Employee or by other improper means. Neither shall the Employee be held to
violate this Agreement by receiving any Trade Secret of the Employer from a
third party having the right to transmit the same, but in such case the
obligations or confidentiality, non-use and non-disclosure set forth in
Paragraphs 2 and 3 above shall apply to all such information so received.
The Employee shall promptly disclose to the Employer's Board or CEO all
inventions, discoveries and improvements which the Employee may make, either
solely or jointly with others, while in the employ of the Employer, relating to
products, manufacturing technologies or software used, manufactured or sold by
the Employer during the period of the Employee's employment with the Employer,
or the use, manufacture, development or sale of which was in contemplation by
the Employer during the period of the Employee's employment with the Employer,
and the Employee hereby agrees to assign to the Employer all of the Employee's
interest in and to the same, including the Employee's interest in and to any
domestic and foreign patent rights therein and any renewals thereof. All
expenses of filing any patent applications shall be borne solely by the
Employer, but the Employee shall cooperate in filing and supporting any such
applications.
This Agreement shall survive the termination of employment of the Employee
and shall continue with respect to each and all of the Employer's Trade Secrets
in conception or existence as of the date of termination, until the same shall
have become generally known among the Employer's competitors and potential
competitors or to the public at large, other than by unauthorized disclosure by
the Employee or other improper means. The Employee agrees that upon the
termination of his employment he will immediately return to the Employer all
materials, records and drawings provided to the Employee by the Employer or any
of its customers, or generated by the Employee relative to the Trade Secrets of
the Employer.
In the event of a breach of threatened breach by the Employee of this
Agreement, it is agreed that the Employer would suffer immediate and
irreparable injuries of such a nature and magnitude that money damages would
not adequately compensate the Employer and that injunctive relief would be
essential for its protection. Such relief shall be without prejudice to any
other remedy which the Employer may have or be entitled to receive at law or in
equity. To the extent permitted by law, the Employee waives the requirement of
bond as a precondition to issuance of any such injunction.
If any of the provisions of this Agreement shall be held to be
unenforceable for any reason by any Court having jurisdiction of the same, such
provision shall be deemed amended by giving to it that construction most
consistent with this writing which such Court may find to be enforceable in the
matter before it, and all remaining terms and provisions of this Agreement
shall not fall, but this Agreement shall be deemed amended by such holding for
purposes only of the jurisdiction of such Court, and as so amended shall remain
in full force and effect.
This Agreement is a prerequisite of employment of the Employee, and need
not be signed or otherwise formally accepted by the Employer in order to become
binding upon the Employee, but shall be deemed and held so binding and
enforceable from and after the date the Employee was first engaged as an
employee of the Employer. The Employee acknowledges receipt of a true and
correct copy of this Agreement and acknowledges that he has read and
understands all of the terms and provisions hereof.
Executed this 1st day of August, 1995.
EMPLOYEE: /s/ Kim A. Davis
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KIM DAVIS
SS Number ###-##-####
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Address 5366 Hidden Pines Ct.
Brighton, Mi. 48116-7729