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EXHIBIT 10.39
EMPLOYMENT AGREEMENT
THIS AGREEMENT is made as of the 27th day of June, 2000, by and between
Aqua-Chem, Inc., a Delaware corporation (the "Company"), and James A. Kettinger
(the "Executive").
WITNESSETH:
WHEREAS, the Company desires to continue to employ Executive in the
capacity as Senior Vice President and Chief Financial Officer and Executive
desires to serve in such capacity; and
NOW, THEREFORE, in consideration of the mutual covenants contained herein,
the parties hereto agree as follows:
1. DEFINITIONS.
Whenever used in this Agreement, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial letter
of the word is capitalized:
(a) "Agreement" means this Employment Agreement.
(b) "Base Salary" means the salary of record paid to the Executive as
annual salary, excluding amounts received under incentive, stock
option or other bonus plans, whether or not deferred.
(c) "Beneficiary" means the persons or entities designated or deemed
designated by the Executive pursuant to Section 6(d) herein.
(d) "Board" means the Board of Directors of the Company.
(e) "Cause" means any of the following as determined by the Committee in
the exercise of good faith and reasonable judgment (i) the willful and
continued refusal by the Executive to perform the Executive's duties
hereunder, other than by reasons of health, after a written demand for
such performance is delivered to the Executive by the Company that
identifies the manner in which the Executive has refused to perform
the Executive's duties, (ii) the commission of an act by the Executive
constituting a felony under state or federal law, (iii) the habitual
abuse by the Executive of any substance (such as
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narcotics or alcohol) which materially affects the Executive's ability
to perform the Executive's duties, or (iv) the Executive's engaging in
an act of fraud, dishonesty or gross misconduct in connection with the
business of the Company, or (v) conduct by the Executive constituting
a material breach of this Agreement.
(f) "Committee" means the Compensation Committee of the Board.
(g) "Company" means Aqua-Chem, Inc., a Delaware corporation.
(h) "Effective Date" means the date this Agreement is executed on behalf
of the Company.
(i) "Effective Date of Termination" means the date on which a termination
of the Executive's employment occurs for any reason whatsoever.
(j) "Executive" means James A. Kettinger.
(k) "Good Reason" means, without the Executive's consent, the occurrence
of any one or more of the following:
(i) the reassignment of the Executive to duties materially
inconsistent with the Executive's present authorities, duties,
responsibilities, and status (including offices, titles and
reporting requirements) as an officer of the Company, or a
material reduction or material alteration in the nature or
status of the Executive's authorities, duties or
responsibilities, other than an act that is remedied by the
Company promptly after receipt of written notice thereof given
by the Executive, and other than a promotion of the Executive to
a position accepted by the Executive which includes duties,
responsibilities, and status associated with the position; or
(ii) a reduction by the Company of the Executive's Base Salary or
bonus opportunity as in effect on the Effective Date (other than
a reduction as part of an overall reduction in compensation
affecting all senior management of the Company) or the exclusion
of the Executive by the Company from such incentive compensation
programs as the Company may, from time to time, make available
to the senior management of the Company.
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(iii) The failure of the Company, after the receipt of written notice
from the Executive (specifically designated as being sent in
accordance with the terms of this Agreement) and a reasonable
opportunity to cure, to withdraw any direction previously given
to the Executive to either take an action or fail to take an
action which act or failure to act would constitute a violation
of a material applicable law or regulation.
(l) "Permanent Disability" shall have the meaning set forth in the
Company's long-term disability program as in effect from time to time.
(m) "Third Party" means any person(s) and/or business organization(s) of
any type other than the present shareholders of the Company and their
affiliates.
2. EMPLOYMENT TERM.
The employment term shall commence as of the Effective Date and shall
continue thereafter until the earlier of (i) 45 days after Executive's receipt
of written notice from the Company terminating employment pursuant to Section
6(b) of this Agreement; (ii) immediately upon Executive's receipt of written
notice terminating employment pursuant to Section 6(a) of this Agreement; (iii)
such date as the Company shall elect up to a maximum of 45 days after its
receipt of written notice from the Executive terminating employment pursuant to
Section 6(b) or 6(c) of this Agreement; or (iv) the Executive's death or
Permanent Disability.
3. DUTIES.
During the employment term, the Executive shall serve as Senior Vice
President and Chief Financial Officer with such duties and responsibilities as
may reasonably be assigned or delegated to him from time to time according to
customary Company procedures. During the Executive's employment term, the
Executive shall devote the Executive's full time to the faithful and diligent
performance of the Executive's duties for the Company. Notwithstanding anything
herein to the contrary, nothing shall preclude the Executive from serving as a
director (or as a member of an advisory board) for the Financial Executives
Institute, Furlong Industrial Systems, Inc. or All American Transport, Inc., or
engaging in charitable and community affairs and managing the Executive's
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personal investments so long as such activities do not interfere with the
Executive's carrying out the Executive's duties and responsibilities under this
Agreement.
4. COMPENSATION.
(a) BASE SALARY. During the employment term, the Executive shall be paid
by the Company a Base Salary payable (after deduction of applicable
taxes) in accordance with the payroll practices of the Company.
Initially, the Base Salary shall be $193,350. It is agreed between
the parties that the Company shall review the Base Salary annually
and may, in the sole discretion of the Committee, adjust such Base
Salary.
(b) INCENTIVE COMPENSATION. The Executive shall, during the employment
term, be eligible to participate in such incentive compensation
programs as the Company may, from time to time, make available to
its senior executives. Executive's target bonus opportunity shall be
50% of Base Salary.
At the conclusion of the Company's fiscal year ended March 31, 2000,
Executive, in full and complete satisfaction of any and all bonuses
for such fiscal year and subject to the conditions of the following
sentence, was awarded a mutually agreed upon bonus of $52,500. The
Company paid Executive $45,938 of that amount and will pay the
balance of $6,562 in April, 2001 if Executive remains employed by
the Company on March 31, 2001.
5. OTHER EMPLOYEE BENEFITS.
(a) BENEFIT PLANS. During the employment term, the Executive shall be
entitled to participate in all employee benefit programs as the
Company, from time to time, makes available to the Company's senior
executives, including, without limitation, medical, disability and
life insurance, and retirement plans.
(b) VACATION. The Executive shall be entitled to reasonable paid annual
vacation periods in accordance with the Company's
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policies as in effect from time to time, but in no event shall such
vacation period be less than four weeks annually.
(c) REGULAR REIMBURSED BUSINESS EXPENSES. The Company shall reimburse
the Executive for all travel and other expenses reasonably incurred
by the Executive in the performance of the Executive's duties during
the employment term, including home office phone and fax and
cellular phone service, in accordance with the Company's policies.
(d) PROFESSIONAL ASSOCIATIONS. The Company shall reimburse Executive for
reasonable fees and expenses associated with membership in
professional associations.
6. TERMINATION OF EMPLOYMENT.
(a) TERMINATION BY THE COMPANY FOR CAUSE. In the event the Executive's
employment is terminated by the Company for Cause, the Executive
shall be entitled to the Executive's then current Base Salary
through the Effective Date of Termination.
(b) TERMINATION BY THE COMPANY WITHOUT CAUSE OR BY THE EXECUTIVE WITH
GOOD REASON. In the event the Executive's employment is terminated
by the Company without Cause or by the Executive with Good Reason,
then upon complying with the provisions of Section 6(f) of this
Agreement, but only upon such compliance, the Executive shall be
entitled to the following:
(i) SEVERANCE PAY. For a period of twelve (12) months following
the Effective Date of Termination, the Executive shall
continue to be paid the Executive's then current Base Salary
in accordance with the Company's normal payroll practices and
subject to withholding as required by law;
(ii) INCENTIVE COMPENSATION. In addition to the amount specified in
Section 6(b)(i), the Executive shall also be paid an amount
(subject to withholding as required by law) equal to the
average annual bonuses payable to the Executive under the
Company's short-term bonus program for management for the two
years ended prior
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to the Effective Date of Termination, payable at the Company's
option in equal installments (in accordance with the Company's
normal payroll periods) over the twelve month period following
the Effective Date of Termination or in a lump sum promptly
following the Effective Date of Termination. Any bonuses
pursuant to the terms of the Incentive Bonus Agreement
referred to in Section 8 hereof or the Retention Bonus
provisions of Section 9 hereof shall be excluded from the
foregoing calculation;
(iii) HEALTH AND DENTAL INSURANCE. If the Executive exercises the
Executive's COBRA rights with respect to medical and dental
insurance, the Executive shall be entitled to receive such
coverage for the 12 month period following the Effective Date
of Termination at a cost equal to the amount paid by
then-current employees of the Company for such coverage;
(iv) OUTPLACEMENT SERVICES. The Executive shall be furnished with
executive outplacement services for a period of up to 12
months paid for by the Company with such firm as the Company
then utilizes for such purposes; and
In the event the Executive does not comply with the provisions of
Section 6(f) of this Agreement, the Executive shall be entitled to
only the Executive's then current Base Salary through the Effective
Date of Termination.
(c) VOLUNTARY TERMINATION BY THE EXECUTIVE. In the event of a
termination of the Executive's employment by the Executive on the
Executive's own initiative other than for Good Reason, the Executive
shall be entitled to the Executive's then current Base Salary
through the Effective Date of Termination.
(d) DEATH OR PERMANENT DISABILITY OF THE EXECUTIVE. The employment term
shall terminate without notice and automatically upon the death or
Permanent Disability of Executive. Upon the termination of
Executive's employment by reason of death or Permanent Disability,
the Executive or, in
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the event of the Executive's death, the Executive's Beneficiary
shall be entitled to receive the Executive's then current Base
Salary through the Effective Date of Termination and incentive
compensation adjusted in such manner as the Board determines to be
appropriate to take into account that services were performed for
only a portion of the bonus period.
(e) BENEFITS. Except as and to the extent specifically provided to the
contrary in this Section 6, the Executive's compensation and
eligibility to participate in programs or receive benefits provided
by the Company shall terminate on the Effective Date of Termination.
(f) RELEASE. As condition precedents to receiving the severance benefits
described in Section 6(b) of this Agreement: (i) the Executive
shall, within 30 days after the Effective Date of Termination,
execute a Release in the form attached hereto as Exhibit A; and (ii)
the Executive shall not have revoked the Release within the seven
day revocation period provided by the Older Workers Benefit
Protection Act.
7. RESTRICTIONS.
(a) The Executive acknowledges and agrees that the Company's business is
by its nature international, the Company's business and customer
contacts have been established and maintained at great expense, the
Executive, by virtue of the Executive's position with the Company,
has and will continue to be privy to the Company's most confidential
business plans and strategies which, without the restrictions
hereinafter set forth, would enable the Executive to compete
unfairly with the Company and, accordingly, such restrictions are
reasonable and necessary to protect the legitimate interests of the
Company. As a result, and in order to induce the Company to enter
into this Agreement and to provide the benefits described in this
Agreement, the Executive agrees to the restrictions set forth in
Section 7 and simultaneous with the execution of this Agreement is
entering into the Employee Confidentiality and Proprietary
Information Agreement attached hereto as Exhibit B.
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(b) The Executive hereby covenants and agrees that at no time during the
employment term and for a period of twelve (12) months following the
Effective Date of Termination will the Executive directly or
indirectly in any capacity whatsoever (whether as an employee,
officer, director, consultant, partner, member, joint venturer,
agent, representative or otherwise) provide service, advice or
assistance of any nature to or acquire an ownership interest in (or
acquire the right to acquire an ownership interest in) a Competing
Business (as hereinafter defined). A "Competing Business" shall mean
and be limited to any business, regardless of the form of
organization, which (i) is engaged in the design, manufacture and/or
sale of products which are similar in design or function to and
otherwise compete with the products which were under design by the
Company or included in the Company's product lines during the twelve
month period preceding the Effective Date of Termination
(hereinafter referred to as "Competing Products") and which (ii)
sells, attempts to sell or markets (or during the twelve month
period preceding the Effective Date of Termination sold, attempted
to sell or marketed) any Competing Products within the United States
and/or any foreign country within which, during the twelve month
period preceding the Effective Date of Termination, the Company sold
any of its products (or was a party to an executory contract for the
sale of any of its products), attempted to sell, or marketed any of
its products other than by means of general advertising.
Notwithstanding the preceding, the Executive shall not be prohibited
from (i) acquiring less than five percent (5%) of the stock of any
publicly traded company which may be engaged in a Competing
Business, or (ii) being employed by or otherwise providing services
to a company which, among its various businesses, is engaged in a
Competing Business provided that the Executive is not directly or
indirectly involved in any capacity whatsoever in such Competing
Business.
(c) The Executive hereby covenants and agrees that, at all times during
the employment term and for a period of twelve (12) months following
the Effective Date of Termination, the Executive shall not directly
or indirectly, on behalf of himself or any other person, entity, or
business, employ or engage the services of or seek to employ or
engage the services of any person employed by the Company or any
agent who represents
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the Company during the period of six months prior to the Effective
Date of Termination, or otherwise encourage or entice any such
person to terminate or diminish their relationship with the Company.
(d) The Executive hereby acknowledges and agrees (i) the Executive's
education and experience are such that the foregoing restrictions
will not unduly interfere with the Executive's ability to earn a
livelihood, (ii) the Company would suffer irreparable harm in the
event of a violation of such restrictions, and (iii) accordingly, in
addition to any other remedies available to it, the Company shall be
entitled to injunctive relief without the posting of bond or other
collateral and the Executive shall not oppose the granting of such
relief. The Company shall be entitled to all costs, including
reasonable attorneys' fees, in enforcing such restrictions or
pursuing damages for breach.
8. INCENTIVE BONUS AGREEMENT.
Simultaneous with the execution of this Agreement, the Executive and the
Company are entering into an Incentive Bonus Agreement in the form attached
hereto (the "Incentive Bonus Agreement").
9. RETENTION BONUS.
Upon the consummation of a Company Sale as defined in Incentive Bonus
Agreement), the Executive shall be entitled to receive a "Retention Bonus" as
provided herein. Subject to the limitations stated herein, the Retention Bonus
shall be an amount equal to (1) Four Hundred Thousand Dollars ($400,000), minus
(2) the Net Amount Realized. In no event shall the Retention Bonus be less than
zero. As used herein, "Net Amount Realized" shall mean an amount equal to the
total payments the Executive is entitled to receive in accordance with the terms
of the Incentive Bonus Agreement prior to reduction for any withholding required
by law. The Retention Bonus shall be paid as follows: (1) if, prior to, on or
immediately following the Company Sale, the Executive is not offered employment
with the Company or its successor in the greater Milwaukee, Wisconsin area on
terms comparable to the terms of the Executive's employment hereunder excluding
this Retention Bonus and the Benefits provided under the Incentive Bonus
Agreement (hereinafter referred to as "Comparable Employment"), the entire
Retention Bonus shall be paid at the time of consummation of the
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Company Sale (the "Closing"); and (2) if, prior to, on or immediately following
the Closing, the Executive is offered Comparable Employment with the Company or
its successor, one-half of the Retention Bonus shall be paid at the time of the
Closing, and the remaining one-half of the Retention Bonus shall be paid six
months after the Closing provided the Executive accepts such Comparable
Employment and does not terminate employment with the Company or its successor
without Good Reason or the Executive's employment is not terminated by the
Company or its successor for Cause prior to the expiration of said six-month
period. In the event of (i) the refusal of the Executive to accept Comparable
Employment or (ii) the Executive's initial acceptance of Comparable Employment
followed by the termination of the Executive's employment during the six month
period thereafter by the Executive without Good Reason or by the Company for
Cause, the Executive shall not be entitled to receive the remaining one-half of
the Retention Bonus and the Company and its successor shall be relieved of any
obligation to pay the same.
In the event that (a) discussions are commenced with a third party with a
view towards the consummation of a transaction that would constitute a Company
Sale, (b) subsequent to the commencement of such discussions, the services of
the Executive are terminated by the Company for reasons other than Cause and (c)
within six months after the termination of the Executive's services a
transaction constituting a Company Sale is consummated then, in the event all of
the foregoing have occurred, upon the consummation of the Company Sale, the
Company shall pay the Executive the entire amount, if any, of the Retention
Bonus.
10. ASSIGNABILITY; BINDING NATURE.
This Agreement shall inure to the benefit of the Company and the Executive
and their respective successors, heirs (in the case of the Executive) and
permitted assigns. Except as specifically provided to the contrary in this
Agreement, no rights or obligations of the Company or Executive under the
Agreement may be assigned or transferred. Notwithstanding the preceding, this
Agreement may be assigned by the Company, but such assignment shall not relieve
the Company of its obligation hereunder.
11. BENEFICIARIES.
The Executive may designate one or more persons or entities as the primary
and/or contingent Beneficiaries of any payments owing to the Executive under
this Agreement. Such designation must be in the form of a signed writing
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reasonably acceptable to the Company. The Executive may make or change such
designation by a similar written instrument signed by the Executive and
delivered to the Company at any time.
12. ENTIRE AGREEMENT.
This Agreement contains the entire agreement between the Company and the
Executive and supersedes all prior agreements, understandings, discussions,
negotiations and undertakings, whether written or oral, between them with
respect thereto.
13. AMENDMENT OR WAIVER.
This Agreement cannot be changed, modified or amended without the prior
written consent of both the Executive and the Company. No waiver by either the
Company or the Executive at any time of any breach by the other party of any
condition or provision of this Agreement shall be deemed a waiver of a similar
or dissimilar condition or provision at the same or at any prior or subsequent
time. Any waiver must be in writing and signed by the Executive and the Chief
Executive Officer of the Company, as the case may be.
14. SEVERABILITY.
In the event that any provision or portion of this Agreement shall be
determined to be invalid or unenforceable for any reason, in whole or in part,
the remaining provisions of this Agreement shall be unaffected thereby and shall
remain in full force and effect to the fullest extent permitted by law.
15. SURVIVORSHIP.
The respective rights and obligations of the parties hereunder shall
survive any termination of this Agreement to the extent necessary to the
intended preservation of such rights and obligations.
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16. GOVERNING LAW.
This Agreement shall be governed by and construed and interpreted in
accordance with the laws of the State of Wisconsin without reference to
principles of conflicts of laws.
17. NOTICES.
Any notice given to either party shall be in writing and shall be deemed to
have been given when delivered personally or sent by certified or registered
mail, postage prepaid, return receipt requested, duly addressed to the party
concerned, if to the Company, at its principal office, and, if to the Executive,
at the address of the Executive shown on the Company's records, or at such other
address as such party may give notice of.
18. HEADINGS; CONSTRUCTION.
The headings of the paragraphs contained in this Agreement are for
convenience only and shall not be deemed to control or affect the meaning or
construction of any provision of this Agreement.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first written above.
/s/ James A. Kettinger
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James A. Kettinger, Individually
AQUA-CHEM, INC.
By: /s/ David M. Tenniswood
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David M. Tenniswood
President and Chief Executive Officer
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EXHIBIT A
GENERAL RELEASE
James A. Kettinger, (the "Executive"), for good and valuable consideration, the
receipt of which is hereby acknowledged, does hereby release and forever
discharge Aqua-Chem Inc. ("Aqua-Chem") and all of its past, present and future
officers, directors, agents, employees, attorneys, shareholders, employee
benefit plans, divisions, parent corporations, subsidiary corporation,
affiliated corporations, successors and assigns (collectively the "Released
Parties") from any and all actions, causes of action, claims, suits, debts,
covenants, contracts, demands or liabilities of any kind or character
whatsoever, whether known or unknown, which the Executive has had or now has
against the Released Parties (or any of them) related to anything occurring
prior to or on the present date.
Without limiting the generality of the foregoing, this release applies to any
claims, causes of action, demands or liabilities the Executive may have had or
now has:
1. Under the pursuant to the Age Discrimination in Employment Act, as amended.
2. Under or pursuant to Title VII of the civil Rights At of 1964, as amended;
the Civil Rights Act of 1991; the Wisconsin Fair Employment Act; the
Employee Retirement Income Security Act, as amended, or any other federal,
state or local statue or regulation relating to employment.
3. For libel, slander, defamation, damage to reputation, intentional or
negligent infliction of emotional distress, tortious interference with the
employment or business relationship or other tortious conduct or for
wrongful discharge or breach of contract whether express or implied.
4. Regarding any right which the Executive might have to current or future
employment with Aqua-Chem, its divisions or affiliated companies, and the
Executive affirms that he will not seek employment in the future with
Aqua-Chem, its divisions or affiliated companies.
The Executive acknowledges that he has been advised in writing (1) to consult
with an attorney prior to executing the General Release, and (2) that he had at
least twenty-one (21) days to consider this General Release prior to executing
it.
For a period of seven (7) days following the execution of this General Release,
the Executive shall have the right to revoke this General Release, and this
General Release shall not become effective or enforceable until seven (7) days
following such execution.
IN WITNESS WHEREOF, the undersigned has executed this General Release this
day of , 2000.
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James A. Kettinger
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EXHIBIT B
EMPLOYEE CONFIDENTIAL AND PROPRIETARY INFORMATION AGREEMENT
Name
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Place
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In consideration of my employment in any capacity and of the
salary or wages paid for my services in the course of employment by Aqua-Chem,
Inc., or a Division of Aqua-Chem, Inc., or a wholly-owned subsidiary of
Aqua-Chem, Inc., or any corporation owned or controlled by Aqua-Chem, Inc.,
hereinafter called COMPANY, I agree as follows:
1. I agree that from the time of entering the COMPANY'S employ until one
year after termination of my employment, I will promptly communicate to an
official of the COMPANY and/or such other persons as may be designated by the
COMPANY from time to time, all significant technical or business innovations and
all inventions, whether patentable or unpatentable, made or conceived by me
alone or jointly with others, capable of use in connection with the business,
work or investigations of the COMPANY or resulting from or suggested by any work
which I may do for or on behalf of the COMPANY, or at its request, and
improvements thereon, or inventions and innovations made on company time or with
company materials, and I agree to assign, and by these presents do hereby
assign, all of my right, title and interest in and to such inventions and
innovations to the COMPANY, and I agree upon request to execute specific
assignments to the COMPANY of such inventions and innovations, together with all
rights thereunder in the United States and all foreign countries, and I will
execute all papers and perform all other lawful acts which the COMPANY or its
nominees deems necessary or advisable, for the preparation, filing, prosecution
and maintenance of patent applications and/or patents of the United States and
foreign countries and for the transfer of any and all interests therein to the
COMPANY including the execution of original, divisions, continuing, extended and
reissue applications, preliminary statements, affidavits, and concessions and
the giving of testimony with respect to discoveries, applications and patents
and otherwise assist the COMPANY or its nominees in every proper way to obtain
for its benefit patents, copyrights or other legal protection for such
inventions or innovations or for publications pertaining to them in any and all
countries, said inventions and innovations to be the exclusive property of the
COMPANY or its nominees, whether or not patented or copyrighted. It is
understood that all expenses in connection with carrying on any of the above are
to be borne by the COMPANY.
2. I further agree to make and maintain adequate and current written
records of all such inventions and innovations in the form of notes, sketches,
drawings, or reports relating thereto, which records shall be and remain the
property of and available to the COMPANY at all times, and upon any termination
of employment, promptly to deliver to the COMPANY all drawings, blueprints,
manuals, letters, notes, notebooks, reports, models, computer programs, data and
disks, and other materials (including all copies) which are of a secret and
confidential nature relating to the business of the COMPANY or its affiliates,
and which are in my possession or under my control.
3. I hereby acknowledge that certain techniques, manufacturing equipment
and processes have been developed by the COMPANY which have achieved the status
of trade secrets, and that additional trade secrets may be developed during the
course of my employment; and I agree that I will not, without written approval
of the COMPANY, publish or otherwise disclose or authorize anyone else to
publish or disclose, or use to the detriment of the COMPANY, either during the
term of my employment or thereafter, any information, knowledge or data of the
COMPANY or its customers, vendors or any other third party with whom the COMPANY
conducts business, which I may receive or develop during the course of my
employment relating to inventions, discoveries, formulas, processes, machines,
manufacturers, compositions, computer programs, accounting methods, information
systems or business or financial plans or reports, marketing strategies, pricing
information, customer lists, prospective customer lists, or other matters which
are of a secret or confidential nature acquired in the course of my employment
under this Agreement or heretofore with any company controlled by Aqua-Chem,
Inc.
Social Security No.
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Date
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