Exhibit 10.1
Execution Copy
EMPLOYMENT CONTINUATION, CONSULTING
AND NONCOMPETE AGREEMENT
     This EMPLOYMENT CONTINUATION, CONSULTING AND NONCOMPETE AGREEMENT (this
“Agreement”) is made and entered into on the 27th day of January, 2009 (the
“Effective Date”), by and between KAYDON CORPORATION, a Delaware corporation
(the “Company”), and KENNETH W. CRAWFORD, a resident of the State of Michigan
(“Crawford”).
W I T N E S S E T H:
     WHEREAS, Crawford resigned his positions as Senior Vice President, Chief
Financial Officer and Corporate Controller of the Company, as well as all
positions he held as an officer and/or director of subsidiaries of the Company,
effective January 27, 2009;
     WHEREAS, the Company wishes to continue to employ Crawford with the title
of Senior Vice President, Chief Accounting Officer during the period (the
“Interim Period”) commencing on the date of this Agreement and expiring on
June 30, 2009, and Crawford is willing to continue as an employee serving as the
Company’s Senior Vice President, Chief Accounting Officer during the Interim
Period;
     WHEREAS, upon expiration of the Interim Period, Crawford’s employment with
the Company shall terminate;
     WHEREAS, following termination of Crawford’s employment, the Company wishes
to engage Crawford to render consulting services to the Company and Crawford
wishes to accept such engagement on the terms set forth herein;
     WHEREAS, in order to fully protect the Company’s confidential information,
including confidential information acquired by Crawford during the period he was
employed by the Company and in partial consideration for the payments to be made
to Crawford hereunder, the Company and Crawford desire to provide for Crawford’s
agreement not to compete with the Company during the Consulting Term hereof as
specified herein; and
     WHEREAS, the Company and Crawford desire to set forth herein the terms and
conditions on which the Company will utilize the services of Crawford, and
Crawford will accept the terms and conditions set forth herein, including the
terms of Crawford’s agreement not to compete.
     NOW, THEREFORE, for and in consideration of the mutual covenants and
agreements herein contained, and other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, the parties hereto
agree as follows:
Initialed:                     
                    

 

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     1. Interim Period Employment. Subject to the terms and conditions of this
Agreement, as consideration for the payments to be made to Crawford hereunder,
the Company agrees to employ Crawford as, and Crawford hereby accepts employment
as, the Company’s Senior Vice President, Chief Accounting Officer during the
Interim Period. Crawford shall remain an employee of the Company during the
Interim Period.
     2. Interim Period Compensation and Benefits. (a) Until the date designated
by the Company after the Company appoints a Chief Accounting Officer or another
individual to perform the job functions performed by Crawford (the “Replacement
Date”), Crawford’s base compensation during the Interim Period shall be
$20,833.33 per month, which shall be paid in accordance with the Company’s
normal payroll practices.
          (b) After the Replacement Date, Crawford’s base compensation during
the Interim Period shall be $16,666.67 per month, which shall be paid in
accordance with the Company’s normal payroll practices.
          (c) During the Interim Period, Crawford shall remain eligible to
participate in the Company’s retirement plans, life insurance plan, medical,
dental and prescription drug insurance plans, and other employee benefit plans
on the same terms in which he participated in such benefit plans on the
Effective Date. Crawford shall remain eligible to participate in the Company’s
executive supplemental health care plan during the Interim Period.
          (d) On or before July 10, 2009, the Company shall pay Crawford an
amount in cash to compensate him for all vacation time he has accrued but has
not used as of June 30, 2009 in accordance with its standard practices.
     3. Termination of Change in Control Compensation Agreement. That certain
Amended Kaydon Corporation Change in Control Compensation Agreement (the “CIC
Agreement”) made and executed May 31, 2008 shall terminate and shall have no
further effect on and after July 1, 2009.
     4. Consulting Engagement and Term. Subject to the terms and conditions of
this Agreement, as further consideration for the payments to be made to Crawford
hereunder, the Company hereby retains Crawford to provide the consulting and
advisory services described in Section 5 below, and Crawford hereby accepts such
engagement. The term of consulting hereunder shall commence on the day following
the expiration of the Interim Period (the “Consulting Commencement Date”) and
shall continue thereafter until the earlier of (a) the date the Company notifies
Crawford that the consulting services to be provided hereunder are no longer
required, or (b) January 5, 2012, subject to extension of the term hereof upon
mutual agreement of the Company and Crawford prior to January 5, 2012 (such
term, the “Consulting Term” and, together with the Interim Period, the “Term”).
     5. Description of Services. (a) During the period between the Consulting
Commencement Date and January 5, 2011 (the “Initial Consulting Term”), Crawford
shall provide upon the reasonable request of the Company, consulting and
advisory services relating generally to the business operations, strategy,
budgeting and financial management of the

 

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Company, including, but not limited to, consulting services regarding financial
and accounting issues for the Company and management and acquisition related
activities. The Company shall provide Crawford with at least two (2) weeks prior
notice of the Company’s need for Crawford’s services hereunder where feasible
and in any event shall give such prior notice as is practicable in the
circumstances. Crawford shall be available to provide a minimum of 160 hours of
such services in each quarter-year period of the Initial Consulting Term
(measured as consecutive three month periods commencing on the Consulting
Commencement Date and ending January 5, 2011), provided, however, that if the
Initial Consulting Term is not evenly divisible into three month periods, then
Crawford’s obligation to be available to provide services under this Agreement
after the final full three month period of the Initial Consulting Term shall be
adjusted to reflect the length of the final period of the Initial Consulting
Term.
          (b) During the period between January 6, 2011 and January 5, 2012 (the
“Subsequent Consulting Term”), Crawford shall provide upon the reasonable
request of the Company, consulting and advisory services relating generally to
the business operations, strategy, budgeting and financial management of the
Company, including, but not limited to, consulting services regarding financial
and accounting issues for the Company and management and acquisition related
activities. The Company shall provide Crawford with at least two (2) weeks prior
notice of the Company’s need for Crawford’s services hereunder where feasible
and in any event shall give such prior notice as is practicable in the
circumstances. Crawford shall be available to provide up to 160 hours of such
services in each quarter-year period of the Subsequent Consulting Term (measured
as consecutive three month periods commencing on January 6, 2011 and ending
January 5, 2012).
          (c) To preserve Crawford’s availability to the Company to perform the
services described herein during the Consulting Term, Crawford hereby agrees
that he shall not accept full-time employment with any other business or entity
during the Consulting Term. Other than the provisions of Section 10 hereof
preventing certain competitive activities, nothing herein shall prevent Crawford
from providing consulting services to, or accepting part-time employment with,
or membership on the board of directors of, any other business or entity.
          (d) Following the Consulting Term, and upon the request of the
Company, Crawford shall endeavor in good faith to provide those services
reasonably requested by the Company to assist the Company in preparing,
defending, managing, or otherwise responding to any audit, lawsuit, inquiry or
investigation related to the Company’s financial, tax, or accounting practices
or policies. The Company shall pay Crawford in the amount of $150 per hour
worked for any such services provided no later than 30 days after the end of the
month in which he provides such services.
     6. Place of Performance. The services to be performed by Crawford pursuant
to this Agreement shall be rendered at the Company’s offices in Ann Arbor,
Michigan and/or one or more other suitable locations designated by the Company
and acceptable to Crawford.
     7. Compensation; Expenses. (a) As consideration for Crawford’s consulting
services during the Initial Consulting Term hereunder, the Company shall make a
payment to Crawford in the annualized amount of $90,000.00 per year, or
$22,500.00 per quarter-year

 

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period, payable in equal monthly installments commencing on the Consulting
Commencement Date and continuing thereafter on the first day of each month,
provided, however, that if any such installment is due for a period of less than
one month, such installment may be pro-rated to reflect the duration of the
period for which such installment is due. At the end of each month of the
Initial Consulting Term, Crawford shall submit to the Company a description of
work performed in a form reasonably acceptable to the Company, along with
documentation regarding the number of hours of consulting services provided to
the Company. If, during any quarter-year period of the Initial Consulting Term
Crawford provides consulting services in excess of 160 hours (as adjusted in
accordance with Section 5(a) of this Agreement), Crawford will be compensated
for all such additional hours in the amount of $125 per hour worked.
          (b) As consideration for Crawford’s consulting services during the
Subsequent Consulting Term hereunder, the Company shall pay Crawford $150 per
hour worked for any services provided hereunder no later than 30 days after the
end of the month in which he provides the services. At the end of each month of
the Subsequent Consulting Term, Crawford shall submit to the Company a
description of work performed in a form reasonably acceptable to the Company,
along with documentation regarding the number of hours of consulting services
provided to the Company.
          (c) The Company shall reimburse Crawford for reasonable out-of-pocket
expenses, such as travel expenses and telephone, facsimile and telex expenses
incurred by Crawford directly in the performance by him of the services
hereunder in a manner consistent with the Company’s then reimbursement policies
and procedures; provided that (i) Crawford timely files expense reports on forms
designated by the Company to obtain reimbursement, (ii) Crawford provides copies
of receipts and other evidence substantiating all claimed expenses, and
(iii) the expenses are reimbursed no later than the end of the calendar year
following the calendar year in which the expenses are incurred.
          (d) If, pursuant to Section 4 of this Agreement, the Company elects to
terminate this Agreement prior to January 5, 2011, the Company shall pay
Crawford the amount in a cash lump sum equal to the aggregate minimum amount
which he would have received pursuant to Section 7(a) had the Initial Consulting
Term continued to January 5, 2011. The Company shall pay such amount to Crawford
no later than thirty calendar days after the Company elects to terminate this
Agreement.
     8. Taxes; 409A Compliance
          (a) Crawford shall not, by virtue of this Agreement, be considered an
employee of the Company after the Interim Period. After the Interim Period,
Crawford shall for all purposes be considered an independent contractor as set
forth in Section 13 hereof. Any and all sales, service, income and other taxes
applicable to any payments made by the Company to Crawford under this Agreement
shall be the sole responsibility and liability of Crawford. While the payments
under this Agreement are intended to be exempt from or comply with the
requirements of Section 409A of the Internal Revenue Code (“Section 409A”),
neither the Company nor any of its employees or agents shall have any obligation
to indemnify or hold Crawford harmless from any taxes Crawford may incur under
Section 409A.

 

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          (b) Notwithstanding anything herein to the contrary, if any amounts
payable to Crawford under this Agreement as a result of Crawford’s cessation of
employment or service with the Company constitute “nonqualified deferred
compensation” within the meaning of Section 409A, payment of such amounts shall
commence when Crawford incurs a “separation from service” within the meaning of
Treasury Regulation § 1.409A-1(h) (“Separation from Service”) from the Company
and all entities considered a single employer with the Company under Code
Section 414(b) or 414(c). If, at the time of Crawford’s Separation from Service,
Crawford is a “specified employee” (under Internal Revenue Code Section 409A),
any amount that constitutes “nonqualified deferred compensation” within the
meaning of Code Section 409A that becomes payable to Crawford on account of his
Separation from Service will not be paid until after the earlier of (i) the
expiration of the six-month period measured from the date of his Separation from
Service, or (ii) the date of his death (the “409A Suspension Period”). Within 14
calendar days after the end of the 409A Suspension Period, Crawford shall be
paid a lump sum payment in cash equal to any payments delayed because of the
preceding sentence, without interest. Thereafter, Crawford shall receive any
remaining benefits as if there had not been an earlier delay. For the purposes
of this Agreement, each payment that is part of a series of installment payments
shall be as a right to a series of separate payments within the meaning of Code
Section 409A.
     9. Confidentiality. Crawford acknowledges and agrees that the Trade Secrets
(as defined below) and the Confidential Information (as defined below), of the
Company and any parent or subsidiary of the Company and all physical embodiments
thereof (collectively referred to as the “Proprietary Information”) are
valuable, special and unique assets of the business of the Company and have been
developed by the Company and its subsidiaries and will continue to be developed
by the Company and its subsidiaries at considerable time and expense. Crawford
further acknowledges that access to such Proprietary Information is essential to
the performance of Crawford’s duties and responsibilities under this Agreement.
Therefore, in exchange for the benefits provided to him under this Agreement and
in order to obtain access to such Proprietary Information, Crawford agrees that,
except with respect to those duties assigned to him by the Company, Crawford
shall hold in strictest confidence all Proprietary Information and will not
reproduce, use, distribute, disclose, publish or otherwise disseminate any
Proprietary Information, in whole or in part, and will take no action causing,
or fail to take any action necessary to prevent causing, any Proprietary
Information to lose its character as Proprietary Information, nor willfully make
use of such information for Crawford’s own purposes or for the benefits of any
person, firm, corporation, association or other entity (except the Company)
under any circumstances, except that Crawford may disclose such Proprietary
Information pursuant to a court order, subpoena or other legal process, provided
that, at least ten (10) days (or such lesser period as is practicable given the
terms of any order, subpoena or other legal process) in advance of any legal
disclosure, Crawford shall furnish the Company with a copy of the judicial or
administrative order requiring that such information be disclosed together with
a written description of the information to be disclosed (which description
shall be in sufficient detail to allow the Company and its affiliates to
determine the nature and scope of the information proposed to be disclosed), and
Crawford covenants and agrees to cooperate with the Company and its affiliates
to deliver the minimum amount of information necessary to comply with such
order.

 

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          For purposes of this Agreement, the term “Trade Secrets” means
information, including but not limited to, any technical or nontechnical data,
formula, pattern, compilation, program, device, method, technique, drawing,
process, financial data, financial plan, product plan, list of actual or
potential customers or suppliers, or other information similar to any of the
foregoing, which derives economic value, actual or potential, from not being
generally known to, and not being readily ascertainable by proper means by,
other persons who can derive economic value from its disclosure or use. For
purposes of this Agreement, the term “Trade Secrets” does not include
information that Crawford can show by competent proof (i) was generally known to
the relevant public at the time the Company disclosed the information to
Crawford or Crawford developed the information for the Company; (ii) became
generally known to the public after disclosure to Crawford through no act or
omission of Crawford; or (iii) was disclosed to Crawford by a third party having
a bona fide right both to possess the information and to disclose the
information to Crawford.
          The term “Confidential Information” means any data or information of
the Company, other than Trade Secrets, regarding the business of the Company or
the Company’s policies and operations which is valuable to the Company and not
generally known to competitors of the Company. For purposes of this Agreement,
the term “Confidential Information” does not include information that Crawford
can show by competent proof (i) was generally known to the relevant public at
the time the Company disclosed the information to Crawford or Crawford developed
the information for the Company; (ii) became generally known to the public after
disclosure to Crawford through no act or omission of Crawford; or (iii) was
disclosed to Crawford by a third party having a bona fide right both to possess
the information and to disclose the information to Crawford.
          The provisions of this Section 9 will apply to Trade Secrets for so
long as such information remains a Trade Secret and to Confidential Information
during the Term and for a period of two (2) years following the expiration of
the Consulting Term.
     10. Non-Competition.
          (a) Agreement not to Compete. In order to fully protect the Company’s
Proprietary Information and the goodwill of its business, during the Consulting
Term, whether or not Crawford’s services to the Company pursuant to Section 5 of
this Agreement terminate prior to the expiration of the Consulting Term,
Crawford shall not, except as authorized in writing by the Company, directly or
indirectly, be employed as an executive or manager or in a financial or
accounting capacity by, render any such services to, assist in the management or
financial affairs of, or invest in, any person or enterprise which person or
enterprise is engaged in, or is planning to engage in, and shall not personally
engage in the business of designing or manufacturing custom-engineered,
performance-critical bearings and components, velocity control and sealing
products, and other products manufactured and/or sold by the Company (the
“Business”), in any market world wide (the “Territory”); provided that Crawford
may hold an investment in the Company or investments of $25,000 or less in any
other publicly held entity engaged in the Business. In furtherance of this
covenant not to compete, Crawford hereby acknowledges that the Company currently
does business, and shall continue to do business, throughout the Territory and
that in his former capacity as an officer

 

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of the Company and in his capacity as an employee of the Company his
responsibilities have involved and will continue to involve the conduct of
Business throughout the Territory.
          (b) Non-Solicitation. (i) Crawford agrees that during the Consulting
Term and for a period of two (2) years after expiration of the Consulting Term
he will not, and he will not assist any of his affiliates to, directly or
indirectly, hire, recruit or otherwise solicit or induce any present or future
employee of the Company or any of its subsidiaries with whom Crawford has had,
or during the Term has, material contact to terminate its employment, contract,
relationship or arrangement with the Company or any of its subsidiaries, or
otherwise change its relationship with the Company or any of its subsidiaries,
or establish any relationship with Crawford or any of his affiliates.
               (ii) Crawford agrees that for the Consulting Term and for a
period of two (2) years after expiration of the Consulting Term he will not, and
he will not assist any of his affiliates to, directly or indirectly, engage,
recruit or otherwise solicit or induce any present or future customer or
supplier of the Company or any of its subsidiaries with whom Crawford has had,
or, during the Term, has material contact, to terminate its contract,
relationship or arrangement with the Company or any of its subsidiaries, or
otherwise change its relationship with the Company or any of its subsidiaries,
or establish any relationship with Crawford or any of his affiliates for
purposes of engaging in the Business.
          (c) Remedies. The parties recognize, acknowledge and agree that
(i) any breach or threatened breach of the provisions of Sections 9 and 10 shall
cause irreparable harm and injury to the Company and that money damages alone
will not provide an adequate remedy for such breach or threatened breach,
(ii) the duration, scope and geographical application of Sections 9 and 10 are
fair and reasonable under the circumstances of the Business, and are reasonably
required to protect the legitimate business interests of the Company, (iii) the
restrictions contained in Sections 9 and 10 will not prevent Crawford from
earning or seeking a livelihood, and (iv) the restrictions contained in
Sections 9 and 10 shall apply in all areas where such application is permitted
by law. Accordingly, Crawford agrees that the Company shall be entitled to have
the provisions of Sections 9 and 10 specifically enforced by any court having
jurisdiction, and that such a court may issue a temporary restraining order,
preliminary injunction or other appropriate equitable relief, without having to
prove the inadequacy of available remedies at law, having to post any bond or
any other undertaking. In addition, the Company shall be entitled to avail
itself of all such other actions and remedies available to it or any of its
affiliates under law or in equity and shall be entitled to such damages as it
sustains by reason of such breach or threatened breach. It is the express desire
and intent of the parties that the provisions of this Section 10 be enforced to
the full extent possible.
          (d) Severability. In light of the fact that the covenants set forth in
this Section 10 are reasonably required to protect the legitimate interests of
the Company, if any provision of Section 10(a) hereof is held to be
unenforceable because of the duration of such provision, the area covered
thereby or the scope of the activity restrained, the parties hereby expressly
agree that the court making such determination shall have the power to reduce
the duration and/or areas of such provision and/or the scope of the activity to
be restrained contained in such provision and, in its reduced form, such
provision shall then be enforceable. The parties hereto

 

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intend and agree that the covenants contained in Section 10(a) shall be
construed as a series of separate covenants, one for each municipality,
community or county included within the area designated by Section 10(a). Except
for geographic coverage, the terms and conditions of each such separate covenant
shall be deemed identical to the covenant contained in Section 10(a).
Furthermore, if any court shall refuse to enforce any of the separate covenants
deemed included in Section 10(a), then such unenforceable covenant shall be
deemed eliminated from the provisions hereof to the extent necessary to permit
the remaining separate covenants to be enforced in accordance with their terms.
The prevailing party in any action arising out of a dispute in respect of any
provision of this Section 10 shall be entitled to recover from the
non-prevailing party reasonable attorneys’ fees and costs and disbursements
incurred in connection with the prosecution or defense, as the case may be, of
any such action.
     11. Non-disparagement. Crawford will not make any statement, written or
oral, whether expressed as a fact, opinion or otherwise, to any person (or
induce any third party to make any such statement) which disparages, impugns,
maligns, defames, libels, slanders or otherwise casts in an unfavorable light
the other party, including, in the case of the Company, any officer, director,
shareholder or employee of the Company.
     12. Employee Benefits.
          (a) After Crawford’s employment with the Company terminates, Crawford
shall be able to elect continuation coverage under Part 6 of Title I of ERISA
(“COBRA”) pursuant to generally applicable rules governing COBRA continuation
coverage. To the extent Crawford elects COBRA continuation coverage, the Company
shall pay for Crawford’s entire COBRA premium and this amount shall be reported
as taxable income to Crawford on IRS Form 1099-MISC.
          (b) During the Term of this Agreement and contingent on Crawford’s
compliance with the terms hereof, restricted stock held by Crawford as of the
Effective Date, but not then vested, shall continue in full force and effect and
shall continue to vest in accordance with its terms, including terms relating to
the payment of dividends and the vesting of such restricted stock upon
Crawford’s death or permanent disability, and the terms of any benefit plan
governing such restricted stock, as if Crawford remained an employee of the
Company, provided, however, that if either (a) pursuant to Section 4 of this
Agreement, the Company elects to terminate this Agreement prior to January 5,
2012, or (b) a Change in Control (as defined in Section 5(a) of the CIC
Agreement) occurs, all restricted stock held by Crawford shall vest immediately.
The Company shall take such action, including the amendment of any award
agreements or governing benefit plans and the actions required by
Section 6(c)(iv) of the Kaydon Corporation 1999 Long Term Stock Incentive Plan,
as amended and restated, as shall be necessary to allow such continued vesting
and acceleration.
          (c) Effective as of the Effective Date, all stock option awards held
by Crawford as of the Effective Date, but not then vested, will terminate, cease
to be of any force or effect, and cease to be exercisable by Crawford.

 

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          (d) After the expiration of the Interim Period, except as otherwise
provided in this Section 12, Crawford shall cease to be eligible to participate
in any of the benefit plans that the Company provides or makes available for its
employees, including without limitation retirement, disability and life
insurance, provided, however, that this Agreement shall have no effect on any
benefits in which Crawford is fully vested as of July 1, 2009. In addition,
following the Interim Period, the Company will not withhold or make payments for
income or Social Security taxes, make unemployment insurance or disability
insurance contributions, or obtain workers’ compensation insurance on Crawford’s
behalf.
     13. Independent Contractor. After the Interim Period, Crawford’s
relationship to the Company hereunder shall be that of an independent
contractor. Crawford shall not be an agent of the Company and shall have no
authority to act on behalf of the Company in any manner except in the manner and
to the extent that the Company may expressly agree in writing.
     14. Waiver. No failure on the part of either party hereto to exercise, and
no delay by either party hereto in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any right, power or remedy by either party hereto preclude any other
or further exercise thereof or the exercise by such party of any other right,
power or remedy. No express waiver or assent by either party hereto of any
breach of or default in any term or condition of this Agreement by the other
party shall constitute a waiver of or an assent to any succeeding breach of or
default in the same or any other term or condition hereof.
     15. Severability. All rights and restrictions contained in this Agreement
may be exercised and shall be applicable and binding only to the extent that
they do not violate any applicable laws and are intended to be limited to the
extent necessary so that they will not render this Agreement illegal, invalid or
unenforceable. If any term of this Agreement, or part thereof, not essential to
the commercial purpose of this Agreement shall be held to be illegal, invalid or
unenforceable by a court of competent jurisdiction, it is the intention of the
parties that the remaining terms hereof, or part thereof, shall constitute their
agreement with respect to the subject matter hereof and all such remaining
terms, or parts thereof, shall remain in full force and effect. To the extent
legally permissible, any illegal, invalid or unenforceable provision of this
Agreement shall be replaced by a valid provision, which will implement the
commercial purpose of the illegal, invalid or unenforceable provision.
     16. Notices. All notices, requests, demands or other communications
required or permitted to be given or made hereunder shall be in writing and
delivered personally or sent by prepaid United States mail, Federal Express or
other similar express courier, or by facsimile transmission to the intended
recipient thereof at its address or facsimile number set out below (or to such
other address or facsimile number as any party may from time to time duly notify
the others). Any such notice, demand or communication shall be deemed to have
been duly given immediately (if delivered personally, or given or made by
confirmed facsimile), the day after dispatch (if given or made by Federal
Express or other similar express courier to a location within the

 

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country in which it is dispatched), two days after dispatch (if given or made by
Federal Express or other similar express courier to a location outside the
country from which it is dispatched), three days after mailing (if given or made
by letter addressed to a location within the country in which it is posted), or
seven days after mailing (if made or given by letter addressed to a location
outside the country in which it is posted), and in proving the same it shall be
sufficient to show that the envelope containing the same was duly addressed,
stamped and posted, or that receipt of a facsimile was confirmed by the
recipient. The addresses and facsimile numbers of the parties for purposes of
this Agreement are:

         
 
  The Company:   Third Floor
 
      315 E. Eisenhower Parkway
 
      Ann Arbor, Michigan 30342
 
      Facsimile: (734) 680-2085
 
      Attn: Debra Crane  
 
  Crawford:   Kenneth W. Crawford
 
      22679 Waycroft Drive
 
      Novi, Michigan 48375

Any party may change the address or facsimile number to which notices, requests,
demands or other communications to such party shall be delivered or mailed by
giving notice thereof to the other parties hereto in the manner provided herein.
     17. Governing Law. Regardless of the place of execution, place of
performance or otherwise, this Agreement and all amendments, modifications or
supplements thereto, and the rights of the parties hereunder, shall be governed
by and construed and enforced in accordance with the laws of the State of
Michigan.
     18. Agreement Non-Assignable. The parties acknowledge that this Agreement
has been entered into as a result of, among other things, the special skills of
Crawford, and agree that this Agreement may not be assigned or transferred by
Crawford, in whole or in part, without the prior written consent of the Company.
The parties further agree that this Agreement may not be assigned by Kaydon
except (a) to a direct or indirect subsidiary of the Company, if the Company
guarantees the performance of its assignee to Crawford in writing, (b) to the
Company’s successor by merger or the acquirer of all or substantially all of the
Company’s assets, or (c) with Crawford’s prior written consent, which consent
shall not be unreasonably withheld.
     19. Headings. The headings as to the contents of particular sections are
inserted only for convenience and shall not be construed as a part of this
Agreement or as a limitation on or enlargement of the scope of any of the terms
or provisions of this Agreement.
     20. Entire Agreement. This Agreement supersedes all prior discussions and
agreements between the parties with respect to the subject matter hereof and
contains the sole and entire agreement between the parties with respect to the
matters covered hereby. This Agreement shall not be modified or amended except
by an instrument in writing signed by or on behalf of the parties hereto.

 

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     21. Arbitration.
          (a) Arbitrable Disputes: Crawford and the Company agree to resolve any
claims they may have with each other (except, if either Crawford or the Company
so elects, any dispute for which injunctive relief is a principal remedy)
through final and binding arbitration in accordance with this Section 21.
          (b) The Arbitration: The arbitration shall be in accordance with the
then-current arbitration rules and procedures for employment disputes governing
arbitrations administered by the American Arbitration Association (AAA), except
as provided in this Section 21. Arbitration shall take place in the State of
Michigan before an experienced employment arbitrator licensed to practice law in
that state who has been selected in accordance with subsection (c). The
arbitrator may not modify or change this Agreement in any way. Crawford and the
Company hereby agree to submit to personal jurisdiction in the State of Michigan
for such arbitration and in any jurisdiction necessary for the enforcement of
any arbitration award.
          (c) Selection of the Arbitrator: The arbitrator shall be selected as
follows: AAA shall give each party a list of 11 arbitrators drawn from its panel
of employment dispute arbitrators. Each party may strike all names on the list
it deems unacceptable. If only one common name remains on the lists of both
parties, that individual shall be designated as the Arbitrator. If more than one
common name remains on the lists of both parties, the parties shall strike names
alternately from the list of common names until only one remains. The party who
did not initiate the claim shall strike first. If no common name exists on the
lists of both parties, AAA shall furnish an additional list and the process
shall be repeated. If no arbitrator has been selected after two lists have been
distributed, then the parties shall strike alternately from a third list, with
the party initiating the claim striking first, until only one name remains. That
person shall be designated as the arbitrator. Striking decisions must be made
and communicated to the other party and AAA within 20 calendar days after the
date of the transmittal communication relaying the arbitrators remaining for
selection. In the event a party does not make a timely strike, the other party
may select the arbitrator from the names remaining.
          (d) Fees and Expenses: Each party shall pay the fees of his or its
attorneys, the expenses of his or its witnesses, and any other expenses that
party incurs in connection with the arbitration, but all costs of the
arbitration itself, including the fees of the arbitrator, the cost of any record
or transcript of the arbitration, administrative fees, and other fees and costs
shall be paid in equal shares by the plaintiffs and defendants.
          (e) Exclusive Remedy: Arbitration in this manner shall be the
exclusive remedy for any claim that must be arbitrated pursuant to this
Section 21. Should Crawford or the Company attempt to resolve such a claim by
any method other than arbitration pursuant to this Section 21, the responding
party will be entitled to recover from the initiating party all damages,
expenses, and attorneys’ fees incurred as a result of that breach.

 

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     IN WITNESS WHEREOF, the Company and Crawford have caused this Agreement to
be executed as of the date first written above.
THE COMPANY:

            Kaydon Corporation:
      By:   /s/ Debra K. Crane         Name:   Debra K. Crane        Title:  
Vice President, General Counsel and Secretary     
 
Crawford:    
 
       
 
/s/ Kenneth W. Crawford
 
Kenneth W. Crawford