Exhibit 10.1
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made between Bruce A. Smith, an individual residing at 418
Rosewood Court, Powell, Ohio 43065 ("Employee"), and Denison International plc
(the "Company" or "Denison"), a corporation duly organized under the laws of
England and Wales, with registered offices at 107 Hammersmith Road, London,
England W14 OQH.
WHEREAS, the Board of Directors of the Company want to assure Denison of the
continued services of the Employee; and
WHEREAS, the parties agree that this Agreement shall supersede all prior
understandings between the parties, whether oral or written.
NOW THEREFORE, in consideration of the mutual promises of the Company and the
Employee contained in this Agreement, the Company and the Employee enter into
this Agreement with the terms and conditions set forth herein.
1. Employment
The Company agrees to employ and the Employee agrees to serve as Chief
Financial Officer of Denison, at its Marysville, Ohio USA headquarters,
and serve as a director on the Denison International plc Board of
Directors and any committee's or sub-committee's of the board as directed
by the Board of Directors.
2. Term
The term of this Agreement shall begin on the date executed and end
according to the provisions as stated in section(s) 7, 8, 10 and/or 12;
provided, however, the provisions of sections 11 and 13 shall survive the
termination of this Agreement.
3. Compensation
The Company shall pay the Employee annual total "Compensation" consisting
of a "Base Salary" of one-hundred-forty thousand-seven hundred US dollars
per year (US $140,700) payable by Denison Hydraulics Inc. in equal
semi-monthly installments, less withholdings required by law, and
"Directors Fees" of twelve thousand English pounds (UK (pound)12,000)
payable by Denison. The Employee shall also be entitled to Base Salary
increases as determined by the Compensation Committee of the Denison Board
of Directors.
4. Bonus Program
The Employee shall be entitled to an annual incentive bonus from the
Company based on meeting the goals as established by the Compensation
Committee of the Denison Board of Directors. This incentive bonus will be
based on a percentage of Compensation, with such percentgage determined by
the Compensation Committee of the Denison Board of Directors. Both the
goals for achievement of the annual incentive bonus and the percentage of
Compensation will be communicated to the Employee as early as feasibly
possible at the beginning of each calendar year. The timing of the payment
of any annual incentive bonus will be at the discretion of the Board of
Directors.
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5. Employment Benefits
The Employee shall be entitled to participate to the full extent of his
Base Salary in all Company benefit plans in which the employee presently
participates subject to the Company's right to eliminate any such benefit
plan or change any of the terms and conditions of such benefit plans. If
any benefit plan is replaced by a different plan, the Employee shall have
the right to participate in the new benefit plan on a basis comparable to
the Employee's present participation in existing plans. Notwithstanding
the Company's standard vacation benefit plan, the Employee will be
entitled to four (4) weeks annual vacation.
6. Share Option Plan
The Employee shall be entitled to participation in the Denison Employee
Share Option Plan.
7. Termination
This Agreement may be terminated by the Company without cause at any time
by giving written notice to the Employee of the Employee's termination. In
the event the Employee is terminated under this provision, the Employee
shall be entitled to receive the Employee's Base Salary and participation
in the Company's employee health insurance plan on the same terms as other
employees for a period of four (4) months after the date of the written
notice of termination. This period of continued salary and benefits shall
count as vested service for any of the service-vested employment benefits,
provided that such vesting service credit does not adversely affect the
qualification of any Company plan under applicable laws.
8. Discharge
The Company retains the right to discharge the Employee during the term of
this Agreement for cause. For purposes of this discharge provision in this
Agreement, cause shall be limited to mean (a) the Employee's willful
refusal or unreasonable failure to perform the Employee's duties as Chief
Financial Officer of the Company, after failure of the Employee to remedy
such willful refusal or unreasonable failure within thirty (30) days of
receiving specific written notice of such refusal or failure from the
Board of Directors; (b) the Employee's gross negligence in the Employee's
performance of duties as Chief Financial Officer of the Company, after
failure of the Executive to remedy such gross negligence within thirty
(30) days of receiving specific written notice of such negligence from the
Board of Directors; (c) the commitment of any illegal acts by the employee
against the Company; or (d) the Employee's conviction of a felony in any
court of law, whether or not such conviction is appealable. If the Board
of Directors concludes it has grounds to discharge the Employee in
accordance with this provision of the Agreement, the Chairman of the Board
shall provide written notice to the Employee of the grounds that are
asserted for the discharge under this section of the Agreement. The
Employee shall not be entitled to any additional salary or employment
benefits after the date of any such notice of discharge unless the
Employee appeals the notice of his discharge in accordance with the
provisions in section 9 of this Agreement and the Board of Directors
decides to withdraw the notice of discharge.
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9. Appeal of Discharge
The Employee shall have the right to appeal any notice of discharge issued
in accordance with section 8 of this Agreement. If the Employee decides to
appeal his notice of discharge, the Employee shall within thirty (30)
calendar days from the receipt of this notice of grounds asserted for
discharge under this Agreement submit in writing to the Chairman of the
Board the Employee's appeal and any opposing information and documentation
in rebuttal to the grounds asserted for the discharge. If the Employee
submits an appeal and opposing information or documentation to the
Chairman of the Board, the Board shall evaluate such information or
documentation. If after such review, the Board concludes it confirms its
decision to discharge the Employee in accordance with the grounds
identified in its initial notice, the Chairman of the Board shall deliver
a second written notice to the Employee explaining the Board's decision to
discharge the Executive and the final grounds for said discharge within
thirty (30) days after the Chairman of the Board received the appeal from
the Employee. If the Board decides not to discharge the Employee after
evaluation of the opposing information or documentation submitted by the
Employee, the Chairman of the Board shall deliver notice to the Employee
withdrawing the initial notice of discharge under this Agreement within
thirty (30) days after the Chairman of the Board received the appeal from
the Employee. The Employee shall not be entitled to any additional salary
or employment benefits during any appeal under this section unless the
Board of Directors decides to withdraw the notice of discharge of the
Employee in accordance with the provisions of this section of the
Agreement.
10. Resignation, Death or Disability
Except as provided in section 12 following a change of control, if the
Employee's employment is terminated by reason of the Employee's death,
disability or voluntary resignation, the Employee shall not be entitled to
receive any further Compensation or employee benefits other than amounts
or benefits that have accrued and remain unpaid as of the date of such
termination or as otherwise required by applicable law.
11. Covenants and Confidential Information
a. The Employee agrees that during the term of this Agreement and
during any period of time for which the Employee is receiving
Compensation under this Agreement, and for a period of two
years after the termination of this Agreement, that the
Employee will not, directly or indirectly, own, manage,
control or participate in the ownership, management or control
of, or be employed or engaged by or otherwise affiliated or
associated as a consultant, independent contractor or
otherwise with, any corporation, partnership, proprietorship,
firm, association or other business entity, or otherwise
engaged in any business, which is engaged in any manner in, or
otherwise competes with, the business of the Company or any of
the Company's subsidiaries (as conducted on the date the
Employee ceases to be employed by the Company in any
capacity); provided, however, that the ownership of not more
than one percent (1%) of the stock of any publicly traded
corporation shall not be deemed a violation of this covenant;
and
b. The Employee agrees that during the term of this Agreement and
at all time thereafter the Employee will not disclose any
confidential information relating to the Company that the
Employee has knowledge of, including, but not limited to,
business and corporate information, trademarks, manufacturing
processes and
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financial data (collectively, the "Confidential Material"),
except that in the event that the Employee is requested or
required (by subpoena, interrogatories, requests for documents
or information or similar process) to disclose any
Confidential Material, it is agreed that both parties will
cooperate and provide prompt notice of such request(s). If, in
the absence of any protective order or the receipt of a waiver
hereunder, the Employee, in the opinion of legal counsel, is
legally required to disclose Confidential Material to any
tribunal or else stand liable for contempt or suffer other
censure or penalty, he may disclose such information to such
tribunal without liability hereunder. Excluded from the term
Confidential Material is any material that has been publicly
issued or is readily available to the public.
12. Change of Control
For purposes of this Agreement, a change of control of Denison shall be
deemed to have occurred if and when (a) any person or group of persons
acting in concert shall have acquired ownership of or the right to vote or
direct the voting of shares of capital stock of the Company representing
sixty percent (60%) of the total voting power of the Company, or (b) the
Company shall have merged into, consolidated or formed a joint venture of
any type, with any corporation or organization, or merged another
corporation or organization into the Company, on the basis whereby less
than sixty percent (60%) of the total voting power of the surviving
corporation is represented by the shares held by the former shareholders
of the Company prior to such merger or consolidation, or (c) the Company
shall have sold substantially all of its shares or assets to another
corporation or organization or person. In the event of such change in
control of Denison during the term of this Agreement, should the Employee
leave the employ of Denison or the successor company, for whatever reason,
within twelve (12) months after the change in control, the Employee shall
be entitled to the following:
a. A lump sum payment from the Company or its successor equal to
the greater of (i) his annual Compensation immediately prior
to the change of control, plus his annual Compensation
immediately prior to the change of control multiplied by the
maximum annual bonus award percentage as approved by the
Compensation Committee of the Denison Board of Directors, or
(ii) his annual Compensation on the date employment with the
Company or the successor company terminates, plus his annual
Compensation on the date employment with the Company or the
successor company terminates multiplied by the agreed upon
maximum annual bonus percentage then in effect.
b. Full participation in the employee health plan of the Company
or the successor company on the same terms as applied to the
Employee and his dependents immediately prior to his
termination of employment for a period of six (6) months,
followed by all rights as granted under COBRA after the
initial six-month period. Except as required by COBRA or other
applicable law, the provisions of this section 12(b) shall
terminate should the Employee successfully secure employment
with another company or organization that includes the
Employee's participation in an employee health benefits
program.
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13. Arbitration
Any controversy or claim arising out of or relating to this Agreement, or
the breach thereof, shall be settled by arbitration in accordance with the
rules of the American Arbitration Association for labor and employment
disputes, and judgment upon the award rendered by the arbitrator shall be
deemed to possess the power to issue mandatory orders and restraining
orders in connection with such arbitration; provided, however, that
nothing in this section of this Agreement shall be construed so as to deny
the Company the right and power to seek and obtain injunctive relief in a
court of equity for any breach or threatened breach by the Employee of the
Employee's covenants contained in this Agreement. The arbitration panel
shall have no authority to award punitive damages. Such arbitration shall
be conducted before a panel of three persons, one chosen by each party and
the third selected by the two party-selected arbitrators. The award issued
by the arbitration panel may be confirmed in a judgment by any federal or
state court of competent jurisdiction. All reasonable costs of both
parties, as determined by the arbitrators, including but not limited to
(a) the costs, including reasonable attorneys' fees, of the arbitration;
(b) the fees and expenses of the AAA and the arbitrators and (c) the
costs, including reasonable attorneys' fees, necessary to confirm the
award in court shall be allocated between the parties by the arbitration
panel.
14. Governing Law
This Agreement shall be governed by and construed in accordance with the
laws of the state of Ohio, without giving effect to conflicts of laws
principles thereof which might refer such interpretations to the laws of a
different state or jurisdiction.
15. Successors and Assigns
The rights and obligations of the Company under this Agreement shall inure
to the benefit of, and shall be binding upon, the Company and its
successors and assigns.
16. Notices
Any notice to be given under this Agreement must be in writing and will be
deemed duly given (a) when personally delivered and receipted for, or (b)
two (2) business days after having been dispatched by a nationally
recognized overnight courier service addressed to the parties at the
following addresses, or at such other address as is given in writing by
either party to the other as follows:
To Employee: Mr. Bruce A. Smith
P.O. Box 1886
Powell, Ohio 43065
To the Company Denison International plc.
or the Board of Directors: c/o Mastershouse
107 Hammersmith Road
London W14 0QH
United Kingdom
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17. Severability
If any provision of this Agreement or its application to any circumstances
shall be determined by any court of competent jurisdiction to be
unenforceable to any extent, the remainder of this Agreement or the
application of such provision to other circumstances shall not thereby be
affected; and each provision of the Agreement shall be valid and enforced
to the fullest extent permitted by law.
18. Waiver
No waiver by the Company or the Employee of any failure by the Employee or
the Company, respectively, to keep or perform any provision of this
Agreement shall be deemed to be a waiver of any preceding or succeeding
breach of the same or other provision.
19. Amendment
No addition to, or mediation of, this Agreement shall be of any force or
effect unless in writing and signed by or on behalf of both parties.
20. Counterparts
This Agreement may be executed by the parties hereto in separate
counterparts, each of which when so executed and delivered shall be an
original but all such counterparts together shall constitute one and the
same instrument.
Denison International plc has caused this Employment Agreement to be executed
and delivered by a duly authorized officer, and Bruce A. Smith has executed and
delivered this Agreement.
DENISON INTERNATIONAL PLC
By: /s/ J. Colin Keith
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Its: Chairman
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Date: July 16, 2003
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BRUCE A. SMITH
By: /s/ Bruce A. Smith
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Date: July 16, 2003
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