December 17, 2004
PERSONAL/CONFIDENTIAL
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HAND DELIVERED
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Mr. Gerald Broecker
Vice President
Selas Corporation of America
c/o Resistance Technology, Inc.
1260 Red Fox Road
Arden Hills, MN 55112
RE: SEPARATION PACKAGE
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Dear Jerry:
As a result of cost cutting efforts, Selas is eliminating your position. We
appreciate your past commitment and many contributions over the years to Selas.
We have always found you to be an asset to Selas, and you have consistently
acted with the highest integrity and professionalism. In recognition of your
commitment and past contributions, Selas is pleased to offer you the separation
package that is described below. Selas advises you to consult with legal counsel
of your choice in making the determination of whether to accept this separation
package.
1. You will resign, effective November 8, 2004 ("Resignation Date"), (a)
your employment with Selas and each of its subsidiaries, (b) each position you
hold as an officer of Selas and any of its subsidiaries, and (c) each position
you hold as a director of any subsidiary of Selas. At the time you sign this
Letter Agreement, you will also sign and deliver to me a letter of resignation
in the form of Exhibit A, which is hereby incorporated.
2. Selas will pay an equivalent to the employer's share of the premiums for
medical and dental insurance through November 8, 2005 if you elect and receive
COBRA coverage, or until you find other employment which provides you with
health insurance. You will remain responsible for the employee's share of the
premiums during this time period.
Thereafter, you will remain eligible as provided by law for continuing your
medical and dental insurance coverage for the remaining COBRA period (which,
under current law, will expire 18 months after your Resignation Date) at your
own expense. If you rescind this Letter Agreement pursuant to section 14 below,
Selas will not be obligated to make any payments specified in this section. You
will still have the right to continue to participate in Selas' medical and
dental plans upon timely payment of the full premiums therefore as provided
under COBRA.
Mr. Gerald Broecker
December 17, 2004
Page 2
3. For purposes of general communication, your separation from employment
will be represented by Selas and you as the elimination of a position as a
cost-cutting measure. If you wish me to do so, I would be glad to provide you
with a mutually agreeable letter of reference which we will draft together prior
to your leaving your employment.
4. Selas agrees to retain you as an independent consultant for consultation
and assistance regarding any transition issues (hereinafter the "Consulting
Services"). This independent contractor relationship will commence immediately
after the expiration of the revocation period set forth in section 14 of this
Agreement and end on November 8, 2005, ("Consulting Period") except that you may
terminate the consulting relationship at any time for any reason prior to
November 8, 2005, with one (1) month written notice. Upon termination of the
consulting relationship by you, all further payments of the retainer described
below will cease. You agree to notify me immediately if you accept other
consulting or employment elsewhere during this term. At all times during the
consulting relationship, you shall be an independent contractor and not an
employee, principle, agent, partner or joint venturer of Selas. During this
term, you shall provide up to 500 hours of Consulting Services as requested by
me, Bob Gallagher or by the Chairman of the Board of Directors of Selas. You
agree to be reasonably available in a manner consistent with the scope of the
Consulting Services hereunder. Your liaison at Selas for purposes of your
Consulting Services will be me, Bob Gallagher, or the Chairman of the Board of
Directors of Selas. In consideration for your Consulting Services, Selas shall
pay you a retainer of $10,500 per month. In addition, Selas will also pay all
reasonable business expenses you incur in providing the Consulting Services,
including reasonable travel, lodging, meals, and other expenses related to those
services, provided you submit to me a monthly expense report in a timely manner.
Because you will perform the Consulting Services as an independent contractor,
Selas will issue you a Form 1099 and not withhold any taxes. You will be solely
responsible for all taxes. Your consulting retainer payment will be paid on or
about the fifteenth day of each month during the consulting period and will be
mailed to your home address of record. You will, however, not be entitled to any
additional benefits such as vacation or sick pay during this consulting period
since you will no longer be a Selas employee. During this consulting period,
your Company stock options will not continue to vest. If you rescind this Letter
Agreement pursuant to section 14 below, Selas will not be obligated to make the
payments specified in this section.
5. Selas shall pay you any accrued salary plus 158.62 hours of vacation
which represents your unused accrued and carry-over vacation compensation to
which you are entitled as of your Resignation Date. The vacation pay will be
paid to you on Selas' next regularly scheduled pay date and mailed to your home
address of record.
6. You will not be entitled to any bonus under any bonus plan for Selas
employees.
7. All life insurance and disability insurance benefits provided to you by
or through Selas will terminate on the Resignation Date.
8. The terms and conditions of this Letter Agreement will be treated as
confidential by the undersigned parties and will not be disclosed to any person
other than the parties'
Mr. Gerald Broecker
December 17, 2004
Page 3
attorneys, accountants, financial and tax advisors, and by you to your spouse
and by Selas only to its employees and Board members who have been informed of
the confidentiality requirements of this Letter Agreement, who have agreed to
abide by those requirements, and who have a legitimate business need to know.
Other disclosure may be made as required by law or by any legal proceeding
required by either party to enforce its or your rights under the terms and
conditions of this Letter Agreement. The parties acknowledge that Selas may be
required to disclose the terms of this Agreement in its filings with the
Securities and Exchange Commission.
9. Nothing in this Letter Agreement is intended to be or will be deemed to
be an admission by Selas or you that Selas or you or any of Selas' agents or
employees has violated any state, local or federal law statute, regulation or
ordinance, or principal of common law, or that Selas or you have engaged in any
wrongdoing.
10. You agree that you will not disparage Selas, its Board, its management,
or its employees in any respect. Selas agrees that its Board members and its
management will not disparage you in any respect.
11. You agree that by signing this Letter Agreement you are, for yourself
and anyone who asserts or obtains legal rights from you, releasing
unconditionally and forever discharging Selas, its subsidiaries, affiliates and
related entities, past and present Board members, officers, and employees and
any entity affiliated with any of the foregoing, ("Released Parties") from any
and all past or present claims, demands, obligations, actions, damages and
expenses of any nature, whether known or unknown, whether based in tort,
contract or other theory of recovery and whether for compensatory or punitive
damages, which you now have, whether known or unknown, on account of or in any
way arising out of the employment relationship between the parties and the
termination of the employment relationship, including but not limited to any
claims arising under Title VII of the Civil Rights Act of 1964, as amended, the
Americans with Disabilities Act, the Age Discrimination in Employment Act, the
Pennsylvania Human Relations Act, all other federal, state, or local civil
rights law or common law, including but not limited to, retaliatory discharge,
breach of contract, promissory estoppel, wrongful termination of employment,
defamation, intentional or negligent infliction of emotional distress, and/or
any other claims for unlawful employment practices, whether legal or equitable,
including claims for attorney's fees. You acknowledge that you have been paid
all wages and benefits due you as an employee of Selas as of the date you sign
this Letter Agreement, other than accrued salary and vacation compensation
specified in section 5. You agree not to institute or participate voluntarily in
any law suit or proceeding brought by any individual relating in any way to your
employment relationship with Selas up to the time of your signing this
Agreement. You acknowledge that this release includes a waiver of any right to
money or other individual remedies or damages awarded by any governmental agency
including the EEOC and understand that this Agreement does not prohibit you from
participating in any investigation or proceeding conducted by the EEOC. You also
acknowledge that you are not a prevailing party under state or federal law.
Mr. Gerald Broecker
December 17, 2004
Page 4
12. You acknowledge and confirm that you have not caused or permitted any
charge, compliant, lawsuit or any other action or proceeding whatsoever to be
filed against the Released Parties based on your employment or termination of
employment with Selas.
13. You have twenty-one (21) days, not counting the day you receive this
Letter Agreement, to consider this separation package. You acknowledge that if
you sign this Letter Agreement before the end of the 21-day period, it will be
your personal, voluntary decision to waive the remainder of the consideration
period. Selas and you agree that any changes in this Letter Agreement made prior
to signing do not automatically restart the 21-day period for consideration.
14. You may rescind and revoke this Letter Agreement for any reason within
seven (7) days after you sign this Letter Agreement, and it will not become
effective or enforceable until this seven-day period has expired. To be
effective, the rescission must be in writing and delivered by hand or mailed to
Mark Gorder, President, Selas Corporation of America, 1260 Red Fox Road, Arden
Hills, MN 55112, within such seven-day period. If mailed, the rescission must be
(a) postmarked within the seven-day period; (b) properly addressed to me as
shown above; and (c) sent by certified mail, return receipt requested. This
Letter Agreement shall not become effective until the rescission period has
expired. You will not be entitled to any payment if you rescind this Letter
Agreement, other than salary, vacation, or other benefits payable as of your
Resignation Date.
15. You retain all stock options under the Company's stock option plans
that vested or became exercisable prior to your Resignation Date and you shall
be able to exercise these options in accordance with such stock option plans
during a period of not more than 90 days after your Resignation Date (but in no
event after the expiration date set forth in such option), after which date such
options shall expire; provided, however, that you shall be entitled to exercise
in full (a) options to purchase 6,000 shares granted to you on December 19, 2000
and (b) options to purchase 5,000 shares granted to you on July 26, 2004, in
each case on or prior to December 31, 2006, after which date such options shall
expire. You understand that any incentive stock options that you exercise more
than 90 days after your Resignation Date will be treated as non-qualified stock
options and will not be treated as incentive stock options.
16. You agree that you will not retain any copies of company property or
documents, except for those that I specifically authorize that you may retain
for purposes of performing the Consulting Services. You agree that this
obligation is ongoing and that if you subsequently discover any additional
Company property you will promptly return it to Selas. On or before your
Resignation Date, you agree to return promptly all other Company property and
equipment of any kind and all files, documents, and copies of such.
For the purposes of this section, "Confidential Information" means
information not readily available to persons not employed by Selas or others who
are not in a confidential relationship with Selas. Confidential information
includes, but is not limited to, financial, customer, pricing, sales, marketing,
investments, and strategic planning information and other
Mr. Gerald Broecker
December 17, 2004
Page 5
proprietary information further defined in the 1983 RTI, Inc. Patent and Secrecy
Agreement, which is attached hereto as Exhibit B and incorporated as if set
forth fully herein.
You recognize and acknowledge that during your employment with Selas, you
had access to, worked with and became familiar with Confidential Information of
Selas and its subsidiaries. You further agree that you have established
longstanding relationships with Selas' and its subsidiaries' customers, that
Selas and its subsidiaries are engaged in highly competitive activities, and
that Selas and its subsidiaries could suffer irreparable harm if you engage in
competitive activities.
You agree that until one year after the expiration or earlier termination
of the consulting arrangement described in section 4, you will not on your own
behalf or as a partner, officer, director, employee, agent, or consultant of any
other person or entity, directly or indirectly, engage in the business of
providing products or services to customers of Selas or any of its subsidiaries
which are the same or similar to services provided by Selas or any of its
subsidiaries. You and Selas agree that the products and services which Selas and
its subsidiaries provide to their customers include services related to
specialized industrial heat-processing systems used by manufacturers of steel,
glass, and other materials; hearing device components and systems, molded
plastics, medical plastics, termistors, capacitors, and other high technology
products.
You also agree that until one year after the expiration or earlier
termination of the consulting arrangement described in section 4, you will not
on your own behalf or as a partner, officer, director, employee, agent, or
consultant of any other person or entity, solicit or induce any employee of
Selas or any of its subsidiaries to leave their employment with Selas or any of
its subsidiaries or consider employment with another person or entity.
You further agree that until one year after the expiration or earlier
termination of the consulting arrangement described in section 4, you will not
solicit employment with any customers of Selas or any of its subsidiaries. You
also agree that until one year after the expiration or earlier termination of
the consulting arrangement described in section 4, you will not directly or
indirectly solicit employment with a competitor of Selas or any of its
subsidiaries. For purposes of this Letter Agreement, the term "competitor"
includes, but is not limited to, any person, firm, company, corporation, or
other legal entity engaged in the business of providing products or services
which are the same or similar to services provided by Selas or any of its
subsidiaries.
You further understand and agree that you will not disclose or communicate
any Confidential Information to any third party without the consent of Selas and
that you will not make use of Confidential Information on your own behalf or on
behalf of any third party.
You understand that any breach of these paragraphs would cause irreparable
harm to Selas, and that, therefore, Selas shall be entitled to an injunction
prohibiting you from any such breach. This provision with respect to injunctive
relief will not, however, diminish the rights of Selas to claim and recover
damages in addition to injunctive relief. You expressly acknowledge
Mr. Gerald Broecker
December 17, 2004
Page 6
that the undertaking regarding Confidential Information set forth above shall
survive the expiration or termination of other agreements or duties in this
Letter Agreement.
If you breach any of your obligations contained in the paragraphs set forth
in this section 17 of this Letter Agreement, all consulting amounts paid and/or
owed to you pursuant to this Letter Agreement at the election of Selas, shall be
forfeited and returned to Selas. If you breach any of your obligations contained
herein, Selas shall be able to pursue all legal and equitable remedies
available. You may also be liable to Selas for any and all costs, including
attorney's fees, incurred in enforcing this Letter Agreement.
17. You acknowledge and agree that Selas' payments to you and all other
promises of Selas to you set forth in this Letter Agreement constitute full and
adequate consideration for this Letter Agreement and that, if you do not sign
this Letter Agreement or if you rescind pursuant to section 14, or otherwise
challenge the effectiveness of all or any part of this Letter Agreement at any
time, or breach any of your obligations contained in this Letter Agreement at
any time, Selas shall have no obligation to provide any portion of the
consideration. If either you or Selas breaches this Letter Agreement, the
breaching party will pay all reasonable costs, including attorneys' fees,
incurred by the non-breaching party in enforcing this Letter Agreement.
18. This Letter Agreement may not be modified or amended in any way except
in a writing signed by both parties. This Letter Agreement shall be binding upon
and inure to the benefit of the parties and their respective heirs, successors,
and assigns and shall be interpreted in accordance with the laws of the
Commonwealth of Pennsylvania.
19. If any provision of this Letter Agreement is held to be illegal,
invalid or unenforceable under present or future laws, rules, or regulations,
such provision shall be fully severable, and this Letter Agreement shall be
construed and enforced as if such illegal, invalid or unenforceable provision
had never comprised a part of this Letter Agreement, and the remaining
provisions of this Letter Agreement shall remain in full force and effect and
shall not be affected by the illegal, invalid or unenforceable provision or by
its severance from this Letter Agreement.
20. This Letter Agreement, the Stock Option Plan and the RTI Patent and
Secrecy Agreement executed on June 30, 1983 (which is attached hereto as Exhibit
B and incorporated as if set forth fully herein), constitutes the entire
agreement of the parties concerning its subject matter and supersedes all prior
agreements, statements, promises and negotiations, written or oral, concerning
such subject matter.
21. By signing this Letter Agreement, you acknowledge that you have had the
opportunity to be represented by your own attorney, that you have read and
understood the terms of this Letter Agreement, and that you are voluntarily
entering into this Letter Agreement to resolve any disputes with Selas and to
receive the benefits of this separation package.
Mr. Gerald Broecker
December 17, 2004
Page 7
Please indicate your acceptance of this separation package by signing,
dating, and returning to me the extra copy of this Letter Agreement that I have
enclosed for you within the time provided in section 14. I look forward to
hearing from you.
SELAS CORPORATION OF AMERICA
By /s/ Mark S. Groder
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Mark S. Gorder, President
Mr. Gerald Broecker
December 17, 2004
Page 8
ACCEPTANCE
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I accept and agree to the terms of this Letter Agreement.
Dated: 12/17/04 /s/ Gerald Broecker
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Gerald Broecker
Mr. Mark Gorder
President
Selas Corporation of America
1260 Red Fox Road
Arden Hills, MN 55112
Dear Mark:
I voluntarily resign, effective November 8, 2004, (a) my employment
with Selas Corporation of America ("Selas") and each of its subsidiaries, (b)
each position I hold as an officer of Selas and any of its subsidiaries, and (c)
each position I hold as a director of any subsidiary of Selas.
Yours truly,
Mr. Gerald Broecker
Vice President
Selas Corporation of America
EXHIBIT A
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