EXHIBIT
10.19


 


EMPLOYMENT
AGREEMENT


 


WITH


 


MICHAEL
J. HARTNETT


 


This Employment Agreement
(the “Employment Agreement”) is dated as of this 18th day of December, 2000
(the “Commencement Date”), and made between Roller Bearing Company of America, Inc.,
a Delaware corporation (“Employer” or the “Company”), and Michael J. Hartnett
Ph.D. (“Employee”). Employer hereby employs Employee and Employee hereby
accepts employment, on the terms and conditions hereinafter set forth.


 


1.         DEFINITIONS.


 


As used in this Agreement,
and unless the context requires a different meaning, the following terms shall
be defined as follows:


 


“Competing Business” means
any business or commercial activity (including, without limitation, research
and development) that is carried on in any material respect during the Term by
Employer or any of Employer’s Affiliates. 


 


“Person” means any natural
person, partnership, corporation, trust, company or other entity.


 


“Territory” means the
geographical area in which the Employer or any of Employer’s Affiliates engages
in any business (other than an insignificant amount of business).


 


2.         TERM.


 


Subject to the terms and
conditions of this Agreement, the Company shall employ Employee as its
President and Chief Executive Officer, for a term commencing on the
Commencement Date hereof and continuing until December 17, 2005 unless
earlier terminated pursuant to the provisions of Section 7 hereof (the “Term”).


 


3.         DUTIES.


 


(a)        During the Term, Employee agrees to serve
Employer as its President, Chief Executive Officer and Chairman of its Board of
Directors (the “Board”), reporting to the Board, and in such other executive
capacities as may be requested from time to time by the Board or a duly
authorized committee thereof; provided that (i) Employee’s duties shall at
all times be limited to those commensurate with the foregoing offices, and (ii) Employee
shall not be obligated, without his consent, to relocate his principal office
location from Fairfield, Connecticut (or the surrounding area), although the
foregoing limitation is not intended to limit Employee’s requirement, in the
normal course of business, to travel to the Employer’s other business
locations. Employee shall serve, if elected, as a member of the Board, and
shall render similar such services for corporations directly or indirectly
controlled by Employer or by Roller Bearing Holding Company, Inc. (“Employer’s
Affiliates”) as Employer may from time to time


 





















 


reasonably request (but only
such services as shall be consistent with the duties Employee is to perform for
Employer and with Employee’s stature and experience). All duties and services
contemplated by this Section 3 are hereinafter referred to as the “Services.”


 


(b)       During the Term, Employee will devote his full
business time and attention to, and use his good faith efforts to advance, the
business and welfare of Employer; provided that the foregoing shall not
restrict Employee’s rights to engage in passive investment activities, to serve
on the boards of directors of other entities (so long as such activities are
not violative of Section 4 below), or to engage in civic and other similar
activities.


 


4.         CONFIDENTIAL INFORMATION AND COVENANT NOT TO
COMPETE.


 


(a)        Employee hereby agrees that, during the Term
and thereafter, he will not disclose to any Person, or otherwise use or exploit
in competition with Employer or Employer’s Affiliates, any of the proprietary
or confidential information or knowledge treated by the Employer or Employer’s
Affiliates as confidential, including without limitation, trade secrets,
processes, records of research, information included in proposals, reports,
methods, processes, techniques, computer software or programming, or budgets or
other financial information, regarding Employer or Employer’s Affiliates, its
or their business, properties or affairs obtained by him at any time (i) during
the Term or (ii) during any employment of Employee with the Employer or
any of Employer’s Affiliates prior to the Commencement Date (“Prior Employment”),
except to the extent required to perform the Services; PROVIDED that the
foregoing shall not apply to: (A) information in the public domain other
than by reason of a violation of this Agreement by Employee, or (B) information
that Employee is compelled to disclose by operation of law or legal process (so
long as Employee provides Employer with prior notice of any such compelled
disclosure and an opportunity to defend against such disclosure), or (C) information
generally known to Employee by reason of his particular expertise that is not
specific to the Employer.


 


(b)       Employee hereby agrees that during the Term
and for a period of two years thereafter (the “Non-Compete Term”), he will not (i) engage
in or carry on, directly or indirectly, any Competing Business in any Territory
in which such Competing Business is then engaged in by the Employer or Employer’s
Affiliates, (ii) allow his name to be used by any Person engaged in any
Competing Business, (iii) invest in, directly or indirectly, any Person
engaged in any Competing Business, or (iv) serve as an officer or
director, employee, agent, associate or consultant of any Person engaged in a
Competing Business (other than Employer or any Employer’s Affiliate).
Notwithstanding the foregoing, the Non-Compete Term shall be only the Term hereof
in the event Employee’s employment hereunder is terminated by the Employer
hereunder without cause (as provided in Section 8(c) below). Subject
to Section 3(b) hereof, nothing herein shall prohibit the Employee
from (A) investing in any business that is not a Competing Business or (B) investing
in a publicly-held entity if such investment (individually or as part of a
group) is limited to not more than five percent (5%) of the outstanding equity
issue of such entity.


 


(c)        All intellectual properties developed by
Employee during the Term or during any Prior Employment and related to the
business (or foreseeable business prospects) of


 


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the Employer shall be for the
account of the Employer. Employee agrees to enter into such agreements
(including transfer documents) as may be reasonably required by Employer to
confirm the foregoing.


 


(d)       Employee shall not, during the Non-Compete
Term, directly or indirectly, solicit or induce or attempt to solicit or induce
any affiliate, director, agent, or employee of Employer or any of Employer’s
Affiliates or contractor then under contract to the Employer, to terminate his,
her or its employment or other relationship for the purpose of entering into an
employment or other relationship with any of the Employer’s competitors or for
any other purpose or no purpose. Employee shall not, during the Non-Compete
Term, directly or indirectly, solicit or induce or attempt to solicit or induce
any customer or supplier of Employer or of any of Employer’s Affiliates to
terminate his, her or its relationship for the purpose of entering into a
similar relationship with any competitors of Employer or Employer’s Affiliates
or for any other purpose or no purpose.


 


(e)        Employee agrees that the remedy at law for any
breach by him of any of the covenants and agreements set forth in this Section 4
will be inadequate and will cause immediate and irreparable injury to Employer
and that in the event of any such breach, Employer, in addition to the other
remedies which may be available to it at law, shall be entitled to obtain
injunctive relief prohibiting him (together with all those persons associated
with him) from the breach of such covenants and agreements.


 


(f)        The parties hereto intend that the covenants
and agreements contained in this Section 4 shall be deemed to include a
series of separate covenants and agreements, one for each and every county of
the states in which the Employer or any of the Employer’s Affiliates does
business. If, in any judicial proceeding, the duration or scope of any covenant
or agreement of Employee contained in this Section 4 shall be adjudicated
to be invalid or unenforceable, the parties agree that this Agreement shall be
deemed amended to reduce such duration or scope to the extent necessary to
permit enforcement of such covenant or agreement, such amendment to apply only
with respect to the operation of such covenant and agreement in the particular
jurisdiction in which such adjudication is made.


 


5.         INDEMNIFICATION.


 


Employer hereby agrees to
indemnify Employee to the maximum extent permitted by Delaware law at the time
of the assertion, against any liability against Employee arising out of or
relating to his status as an employee acting within the course and scope of
employment, officer or director of Employer or any Employer’s Affiliate at any
time during the Term, whether such liability is asserted during or after the
Term.


 


6.         BASE SALARY AND BENEFITS.


 


During the Term, Employer
shall pay Employee a salary at the rate of thirty-seven thousand five hundred
dollars ($37,500) per month payable at least as frequently as monthly and
subject to payroll deductions as may be necessary or customary in respect of
Employer’s salaried employees (“Base Salary”). The Base Salary will be subject
to an automatic annual increase


 


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effective December 1 of
each year during the Term in a percentage amount equal to the greater of (i) five
percent (5%) or (ii) the annual percentage increase in the All-Items
Consumer Price Index for All Urban Consumers for such year as determined for
the month of August. Employee shall also be entitled to receive the normal
executive benefits of Employer and the benefits set forth in Schedule A
hereto (the “Additional Benefits”) and to the following (the “Special Benefits”):


 


(a)        four weeks of paid vacation for each twelve
month period during the Term, to accrue PRO RATA during the course of each such
twelve month period; and


 


(b)       medical and hospitalization insurance
furnished to all other executive employees of Employer, as such insurance may
be in effect from time to time (subject always to the right of Employer to
amend such insurance).


 


7.         EXPENSES.


 


Employer will pay or
reimburse Employee for such reasonable travel, entertainment, or other expenses
as he may incur on behalf of Employer during the Term in connection with the
performance of his duties hereunder. Employee shall furnish Employer with such
evidence that such expenses were incurred as Employer may from time to time
reasonably require or request.


 


8.         TERMINATION OF EMPLOYMENT.


 


Notwithstanding Section 1
hereof, the Term may be terminated prior to December 17, 2005, under the
following circumstances:


 


(a)        DEATH OR TOTAL DISABILITY. The Term shall
automatically and immediately terminate upon Employee’s death or “Total
Disability.” For purposes of this Agreement, “Total Disability” shall mean
Employee’s physical or mental incapacitation or disability that renders
Employee unable to perform the Services as performed prior to such
incapacitation or disability for a period of twenty-six (26) consecutive weeks
or during any one hundred fifty (150) business days (whether or not
consecutive) during any twelve (12) month period during the Term.


 


(b)       TERMINATION BY EMPLOYER FOR CAUSE. Employer,
at its election, shall have the right to terminate the Term, by written notice
to Employee to that effect, for “Cause”. The term “Cause” shall mean:


 


(i)            any act of fraud, embezzlement, theft or
commission of a crime involving moral turpitude;


 


(ii)           any material breach by Employee of any
material covenant, condition, or agreement in this Agreement (“Employee’s
Material Breach”); or


 


(iii)          any chemical dependency by Employee (other
than in connection with medicines prescribed for Employee).


 


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To terminate the Term
pursuant to this Section 8(b), Employer shall give written notice (“Cause
Notice”) to the Employee specifying the claimed Cause. If Employee fails to
cure the same within thirty (30) days after the receipt of the applicable Cause
Notice (or such longer period as may be reasonably required if such actions are
subject to cure), the Term shall terminate at the end of such thirty (30) day
period or such longer reasonable period, as the case may be. Notwithstanding
anything that may be interpreted to the contrary, it is expressly agreed that
no act of the type contemplated by or described in Section 8(b)(i) shall
be capable of being cured by Employee and the Employer may terminate Employee
immediately without the requirement for such cure period.


 


(c)        TERMINATION BY EMPLOYER WITHOUT CAUSE.
Employer shall have the right, at its election, to terminate the Term at any
time for any reason other than “Cause” upon not less than sixty (60) days prior
written notice to Employee.


 


(d)       TERMINATION BY EMPLOYEE. Employee shall have
the right, at his election, to terminate the Term at any time by written notice
to Employer upon not less than one hundred and twenty (120) days prior written
notice; provided, however, that (i) such notice period shall be thirty
(30) days in the case of a termination for “Good Reason”; and (ii) if such
termination is other than for Good Reason the Term, for purposes of Section 4(b) and
(d), shall continue through November 30, 2005.


 


(e)        SALARY AND BENEFITS IN EVENT OF TERMINATION.
Upon termination of the Term, the following shall be applicable,
notwithstanding anything to the contrary elsewhere herein:


 


(i)        If the Term is terminated by Employer pursuant
to Section 8(b) or by Employee pursuant to Section 8(d) other
than for “Good Reason,” Employee shall thereafter be entitled to the Base
Salary, the Special Benefits and the Additional Benefits only until the
effective date of such termination, unless otherwise agreed by Employer.


 


(ii)       If the Term is terminated (A) pursuant to
Employee’s death or Total Disability pursuant to Section 8(a) hereof,
or (B) by the Employer without Cause pursuant to Section 8(c) hereof,
or (C) by Employee with Good Reason pursuant to Section 8(d) hereof,
(x) Employer shall pay to Employee on the date of termination the Base Salary
due to Employee for the then remainder of the Term, net of any benefits paid to
Employee pursuant to any policy of disability insurance maintained by Employer,
plus a PRO RATA portion of the Employee’s annual bonus for the fiscal year of
the Employer in which such termination occurs (provided that in the case of
Employee’s death or Total Disability such payment and benefits shall extend for
no longer than two (2) years following such event), and (y) Employee shall
be entitled to the Special Benefits described in Section 6(b) hereof
for the then remainder of the Term.


 


(f)        GOOD REASON. For purposes of this Agreement,
Good Reason shall mean any of the following which occurs subsequent to the date
of this Agreement:


 


(i)        a substantial reduction in the Employee’s
position, duties, responsibilities and status with the Company inconsistent
with the Employee’s duties,


 


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responsibilities and status
immediately prior to a change in the Employee’s titles or offices, or any
removal of the Employee from or any failure to reelect the Employee to any of
such positions, except in connection with the termination of his employment for
disability, retirement or Cause or by the Employee other than for Good Reason;
PROVIDED that such reduction or removal occurs at a time when (A) Employee
does not have a majority of the voting power of the Company or (B) Employee
has a majority of the voting power of the Company, but, notwithstanding
Employee’s objections, the Board of Directors of the Company has approved the
taking of such actions;


 


(ii)       a relocation of Employee without his consent
to a location more than 75 miles from the Company’s headquarters at Fairfield,
Connecticut;


 


(iii)      any material breach by the
Company of any provision of this Agreement; or


 


(iv)     any failure by the Company to obtain the
assumption of this Agreement by any successor or assign of the Company.


 


(g)       DELIVERY OF RECORDS UPON TERMINATION. Upon
termination of the Term, Employee will deliver to Employer all records of
research, proposals, reports, memoranda, computer software and programming,
budgets and other financial information, and other materials or records
(including any copies thereof) made, used or obtained by Employee in connection
with his employment by Employer and/or any Employer’s Affiliate.


 


9.         MISCELLANEOUS.


 


(a)        MODIFICATION AND WAIVER OF BREACH. No waiver
or modification of this Employment Agreement shall be binding unless it is in
writing signed by the parties hereto and expressly stating that it is intended
to modify this Agreement. No waiver of a breach hereof shall be deemed to
constitute a waiver of a future breach, whether of a similar or dissimilar
nature.


 


(b)       NOTICES. All notices and other communications
required or permitted under this Employment Agreement shall be in writing,
served personally on, or made by certified or registered United States mail to,
the party to be charged with receipt thereof. Notices and other communications
served in person shall be deemed delivered when so served. Notices and other
communications served by mail shall be deemed delivered hereunder 72 hours
after deposit of such notice or communication in the United States Post Office
as certified or registered mail with postage prepaid and duly addressed to whom
such notice or communications is to be given, in the case of


 


(i)        Employer:


 


Roller Bearing Holding
Company, Inc.


c/o Roller Bearing Company of
America, Inc.


60 Round Hill Road


Fairfield, Connecticut  06430


 


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with a copy (which shall not
constitute notice to Employer) to:


 


Whitney Acquisition II Corp.


177 Broad Street


Stamford, Connecticut 06901


Attention:     David
A. Scherl


                      Michael
C. Salvator


                      William
Dawson


 


(ii)       Employee:


 


Michael J. Hartnett


c/o Roller Bearing Company of
America, Inc.


60 Round Hill Road


Fairfield, Connecticut  06430


 


Any party may change said
party’s address for purposes of this Section by giving to the party
intended to be bound thereby, in the manner provided herein, a written notice
of such change.


 


(c)        COUNTERPARTS. This instrument may be executed
in one or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same Employment Agreement.


 


(d)       GOVERNING LAW. This Employment Agreement shall
be construed in accordance with, and governed by, the internal laws of the
State of Delaware applicable to agreements executed and to be performed in such
state without regard to principles of choice of law or conflicts of laws.


 


(e)        COMPLETE EMPLOYMENT AGREEMENT. This Employment
Agreement and its Exhibits and Schedules, together contain the entire agreement
between the parties hereto with respect to the subject matter of this
Employment Agreement and supersedes all prior and contemporaneous oral and
written negotiations, commitments, writings, and understandings with respect to
the subject matter of Employee’s relationship with Employer, including that
certain Employment Agreement, dated June 23, 1997 between the Company and
the Employee.


 


(f)        NON-TRANSFERABILITY OF EMPLOYEE’S INTEREST.
None of the rights of Employee to receive any form of compensation payable
pursuant to this Employment Agreement shall be assignable or transferable. Any
attempted assignment, transfer, conveyance, or other disposition of any
interest in the rights of Employee hereunder shall be void.


 


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IN WITNESS WHEREOF, the
undersigned have executed this Employment Agreement on the day and year first
above written.


 


	
   

  	
  EMPLOYEE:

  
	
   

  	
   

  
	
   

  	
  /s/ Michael
  J. Hartnett

  	
   

  
	
   

  	
  MICHAEL J.
  HARTNETT

  
	
   

  	
   

  
	
   

  	
  EMPLOYER:

  
	
   

  	
   

  
	
   

  	
  ROLLER
  BEARING COMPANY OF AMERICA,

  
	
   

  	
  INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  /s/ Anthony
  S. Cavalieri

  	
   

  
	
   

  	
   

  	
  Anthony S.
  Cavalieri

  	
   

  
	
   

  	
   

  	
  Chief
  Financial Officer

  	
   

  
					



 


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SCHEDULE A


 


MICHAEL HARTNETT


 


EMPLOYEE BENEFITS


 


1.         Continuation of existing
life insurance coverage in the amount of $1,500,000, with Employee’s designees
as beneficiaries.


 


2.         Executive Medical
Coverage ($6000 supplemental coverage).


 


Dental
insurance.


 


Prescription
drug coverage.


 


The above
benefits are subject to change at any time at the discretion of the Board of
Directors of Employer; provided that such coverages provided to Employee shall
at all times be consistent with coverages provided to others of Employer’s
executive employees.


 


3.         Disability insurance (as
currently provided by Roller Bearing Company, provided that such insurance may
be modified from time to time at the discretion of the Board of Directors of
Employer).


 


4.         Employee shall be
entitled to an annual performance bonus with respect to each fiscal year of the
Employer during which Employee remains an employee of the Company beginning
with the fiscal year ending March 31, 2001, in an amount determined as a
percentage of Employee’s Base Salary, based on the following criteria:


 


	
  Percentage of Actual EBITDA to
  Plan

  	
   

  	
  Amount of Bonus

  
	
   

  	
   

  	
   

  
	
  Less than 90%

  	
   

  	
  Discretion of Board of
  Directors

  
	
   

  	
   

  	
   

  
	
  90% to 99.9%

  	
   

  	
  100% of Base Salary

  
	
   

  	
   

  	
   

  
	
  100% to 109.9%

  	
   

  	
  150% of Base Salary

  
	
   

  	
   

  	
   

  
	
  110% or higher

  	
   

  	
  200% of Base Salary

  



 


The amount payable under this
paragraph 3, if any, shall be paid to Employee within fifteen (15) days
following the delivery of the Company’s financial statements for each fiscal
year of the Employer during the Term, but in no event later than one hundred
twenty (120) days following the end of such fiscal year.


 


“Plan” shall
mean the operating plan established by the Employee, in his status as CEO of
Employer and as approved by the Board within thirty (30) days following the
beginning of each fiscal year, as applicable to Employer and all of Employer’s
Affiliates and as applicable to the determination of bonuses payable to others
of Employer’s (and Employer’s Affiliates) employees to the extent such bonuses
are calculated by reference to operating results.


 


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“EBITDA” shall
mean the income of the Employer and the Employer’s Affiliates increased by
interest, taxes, depreciation and amortization, calculated in a manner
consistent with the calculation of the Plan.


 


For the
purposes hereof, (i) the performance bonus for the fiscal year ending March 31,
2001 shall encompass the period beginning April 1, 2000 and the plan for
such fiscal year shall be [$                      ];
and (ii) the performance bonus for the period April 1, 2005 through December 17,
2005 shall be calculated on the basis of the Plan for fiscal year ending March 31,
2006, pro rated for the applicable short period.


 


5.         Contributions by Employer
to 401(K) or other pension or profit sharing plans pursuant to arrangements
applicable to all executive level employees.


 


6.         The Employer shall
maintain an apartment in Los Angeles for use by the Employee while on business.


 


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