Exhibit (10)(cp)
 

 
KEY EMPLOYEE SEVERANCE PAY AGREEMENT

 
This Key Employee Severance Pay Agreement (this “Agreement”)  is made as of this
2nd day of April,  2012 between MET-PRO CORPORATION, a Pennsylvania corporation
with principal offices at 160 Cassell Road, Harleysville, Pennsylvania (the
“Corporation”), and NEAL E. MURPHY, with an address of 1004 Rock Creek Road ,
West Chester, Pa. 19380 (the “Employee”).
RECITALS
A.        Employee has been employed as a Vice President of the Corporation
since February 7, 2012 and as of the date of this Agreement he was appointed to
the positions of Vice-President-Finance, Chief Financial Officer, Chief
Accounting Officer, Secretary and Treasurer.
B.        In recognition of Employee’s status as a key employee and to provide
the Employee with a deserved measure of security in the event of a change in
control of the Corporation, the Corporation is willing to enter into this
Agreement.
NOW, THEREFORE, the parties hereto hereby agree as follows:
1.         Definitions.
(a)   Change in Control.  A “Change in Control” shall be deemed to have occurred
as of the date of the first of the following events occur:
(i)              If any “Person” (as hereafter defined) or “Group” (as hereafter
defined) of Persons, which Person or Group of Persons is not part of present
“Management” (as hereafter defined), acting alone or in concert, becomes the
“Beneficial Owner”  (as hereafter defined) directly or indirectly of securities
of the Corporation representing thirty (30%) percent or more of the combined
voting power of the Corporation’s then outstanding securities; or
(ii)             If there occurs a change in the composition of the Board of
Directors within any period of two years or less, as a result of which the
individuals who constitute the “Continuing Directors” (as hereafter defined)
cease for any reason to constitute at least a majority of the Board of Directors
in office at the beginning of such period; or
(iii)            If the shareholders approve of: (a) a reorganization, merger,
or consolidation, in each case with respect to which persons who were
shareholders of the Corporation immediately prior to such transaction do not,
immediately thereafter, own more than 50% of the combined voting power of the
reorganized, merged or consolidated corporation’s then outstanding securities
entitled to vote generally in the election of directors; or (b) the liquidation
or dissolution of the Corporation; or (c) the sale of all or
 
 
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substantially all of the Corporation’s assets; or
(iv)            If there shall be a change of control as defined by any other
agreement or plan to which the Corporation is party.
(b)           Person.  A “Person”  is defined in same manner that the term
“person” is defined and referred to in Sections 13(d)(3) and 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Act”).
(c)           Continuing Directors. The “Continuing Directors” consist of the
six persons who are members of the Board of Directors as constituted as of the
date of this Agreement; provided, however, that any individual who becomes a
Director subsequent to the date hereof whose election or nomination for election
by the Corporation’s shareholders was approved by a vote of at least a majority
of the Directors then comprising the Board of Directors of the Corporation shall
be considered a Continuing Director; except that any individual whose initial
election or appointment as a Director as a result of or in connection with
either an actual or threatened election contest (as such terms are used in Rule
14a-11 of Regulation 14A promulgated under the Act) or other actual or
threatened solicitation of proxies or consents by or on behalf of a person other
than the Board shall not be considered a Continuing Director.
(d)           Beneficial Owner of Securities.  A “Beneficial Owner of
Securities” shall be as defined in Rule 13d-3 promulgated under the Act.
(e)           Management.  “Management” shall mean the officers of the
Corporation in office at the effective date of this Agreement or their
successors elected by a majority of the Continuing Directors, either alone or
with any person who is a Continuing Director.
(f)           Compensation.  “Compensation” shall mean the annual base salary
(exclusive of bonuses, sick leave, vacation pay, or other extra compensation or
benefits) being paid to the Employee at the time when a Change in Control occurs
or thereafter, whichever is higher.
(g)           Involuntary Termination of Employment.  “Involuntary Termination
of Employment” shall mean
(i)    Termination of employment without “Cause”; or
(ii)   Termination of employment by the Employee for “Good Reason”;  provided,
however, that a termination of employment by Employee for Good Reason shall not
constitute an Involuntary Termination of Employment unless: (x) Employee first
notifies the Corporation (for purposes of this subsection “Corporation” shall
include any successor to the Corporation) in writing of the existence of an
event constituting Good Reason within ninety (90) days of the initial existence
of such event; (y) the Corporation fails to remedy the event constituting Good
Reason within thirty (30) days of such notice; and (z) Employee’s
 
 
 
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termination of  employment occurs no later than one (1) year following the
initial existence of the event constituting Good Reason.
(h)           Cause.  “Cause” for the purposes of Section 1(g)(i) shall mean
conviction for a felony, commission of any act constituting common law fraud,
habitual drunkenness or drug abuse, significant malfeasance or nonfeasance of
duty, or disloyalty to the Corporation.
(i)           Group.   “Group” shall be as used in Rule 13d-1 promulgated under
the Act.
(j)           Good Reason.  “Good Reason” shall mean one or more of the
following events: (i) a material diminution in Employee’s base compensation;
(ii) a material diminution in Employee’s authority, duties, or responsibilities
in effect immediately before such diminution; (iii) a material diminution in the
budget over which Employee retains authority; or (iv) a material change in the
geographic location at which Employee is required to perform services.
2.           Severance Pay.  In the event of a Change in Control of the
Corporation and the Involuntary Termination of Employee’s Employment within
eighteen (18) months thereafter, the Employee shall be entitled to receive
severance pay equal to eighteen (18) months’ Compensation.  Such severance pay
shall be due and payable in full at the time of Employee’s receipt of final
payment of his regular compensation.
3.           Continued Performance by Employee.  In consideration of the
granting of the benefits to him provided for by this Agreement, Employee agrees:
(a)           That he will continue to use his best efforts to perform his
duties as assigned by the Corporation; and
(b)           That, in the event a Change in Control is pending or threatened,
he will not voluntarily terminate his employment by the Corporation prior to an
actual Change in Control, but will continue to perform his duties in the same
manner and with the same effort as he had employed prior to the occurrence of
such events.
4.           Rights to Terminate Employment.  This Agreement is not an
employment agreement.  Nothing contained herein shall be deemed to preclude the
present management of the Corporation or the Employee from terminating
Employee’s employment, with or without cause, at any time.
5.           No Obligation to Maintain Reserves.  Nothing in this Agreement
shall obligate the Corporation to set aside or earmark any of its assets to fund
the obligation hereunder.
6.           Binding Effect.  This Agreement shall be binding upon and inure to
the benefit of the parties hereto, their heirs, executors, administrators,
successors and assigns.
 
 
 
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7.           Applicable Law.  This Agreement shall be interpreted under and
governed by the laws of the State of Pennsylvania without giving effect to its
conflict of laws provisions.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first above written.

   
MET-PRO CORPORATION
            /s/Neal E. Murphy  
By:
/s/Raymond J. De Hont  
Neal E. Murphy, Employee
   
 Raymond J. De Hont, President
 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 

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