May 15, 2001









EXHIBIT

10 (d)




 




October 5, 2001




 




Mr. Philip M. Rolchigo




Osmonics, Inc.




Fairfield Facilities




218 Little Falls Road




Cedar Grove, NJ  07009-1277




 




Dear Phil:




 




This letter will confirm our prior conversation.  I am happy to confirm that, as we discussed,

if you continue your employment with Osmonics, Inc. (the “Company”) through

July 31, 2001, the Company will pay you upon your termination of employment at

any time after July 31, 2001, a lump sum payment in the amount of $305,000 (the

“2001 Noncompetition Payment”).  Your

2001 Noncompetition Payment will be made within forty-eight (48) hours after

your termination of employment with the Company.  In consideration of the Company’s payment to you of the 2001

Noncompetition Payment you agree that, during the one year period beginning on

your termination of employment, you will not, without the Company’s prior

written approval, which approval shall not be unreasonably withheld: (i)

compete with the Company in the separations and filtration industry within the

markets which the Company is serving at the time of the termination of your

employment, (ii) divulge or use the Company’s confidential information, (iii)

solicit or otherwise assist anyone in hiring any of the Company’s employees,

nor (iv) interfere with or assist anyone in interfering with any of the

Company’s business relationships.




 




As we also discussed, if you remain in the employment of the Company

through July 31, 2002, the Company will pay you upon termination of your

employment with the Company at any time thereafter, the sum of three (3) times

your annual base salary plus your annual incentive target bonus for the fiscal

year in which your employment with the Company terminates (the “2002

Noncompetition Payment”) in addition to the 2001 Noncompetition Payment. The

2002 Noncompetition Payment will be paid in sixteen consecutive equal quarterly

payments.  The first payment will be due

on the last day of the first calendar quarter ending after your termination of

employment with the Company. In consideration of the Company’s payment to you

of the 2002 Noncompetition Payment, you agree that, during the four year period

beginning with your termination of employment, you will not, without the

Company’s prior written approval, which approval shall not be unreasonably

withheld: (i) compete with the Company in the separations and filtration

industry within the markets which the Company is serving at the time of the

termination of your employment, (ii) divulge or use the Company’s confidential

information, (iii) solicit or otherwise assist anyone in hiring any of the

Company’s employees, nor (iv) interfere




 




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with or assist anyone in interfering with any of the Company’s business

relationships. The 2002 Noncompetition Payments will cease if you breach your

obligations not to compete, not to disclose confidential information, not to

hire the Company’s employees, and not to interfere with the Company’s business

relationships.




 




You agree to notify the Company of any employment or consulting

arrangement you intend to accept prior to your acceptance and the Company

agrees to promptly review the proposed employment or consulting arrangement and

to notify you if it reasonably believes that such employment or consulting

would violate your obligation set forth above.




 




You will be entitled to your 2001 and 2002 Noncompetition Payments even

if the Company terminates your employment as long as the Company’s termination

of your employment is not for cause. 

Only your (i) embezzlement from the Company, (ii) commission of a felony

which materially harms the Company finances or its reputation, (iii) breach of

your obligation not to disclosure or use the Company’s confidential information

or (iv) breach of your obligations set forth below, will constitute cause.




 




Further, as we discussed, if at any time the Company wrongfully fails

to pay you your 2001 Noncompetition Payment or 2002 Noncompetition Payment, the

Company will be responsible for any and all legal fees you incur in enforcing

your rights under this agreement.  In

addition, if the Company wrongfully fails to pay your 2002 Noncompetition

Payment, the Company will be obligated to pay you twice the amount of 2002

Noncompetition Payment as liquidated damages.




 




It is further agreed that the amount of time you are required to spend

outside of your home state of New Jersey in connection with your employment

with the Company will be determined by you in the exercise of your professional

judgment.  However, in no event will you

be required to spend fifty percent (50%) or more of your time outside of New

Jersey so that you will be able to satisfy your custody requirements under your

50-50 joint custody arrangement with your spouse under your pending divorce.




 




After your termination of employment with the Company, and during the

three (3) year period beginning with the date of  your termination of employment, you agree to offer the Company a

first right of refusal to buy any invention created by you after your

termination of employment which involves separation and filtration in the

market then served by the Company.




 




If this letter agrees with your understanding of our discussion, please

sign this letter below where indicated and return a copy to me as soon as

possible.  This letter supercedes all

prior agreements between you and the company and the payments to be made

hereunder are in lieu of any and all other payments to be made to you under any

other plan providing for payments upon or as a result of  your termination of employment other than those

payments due under the company’s 




 




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401(k) plan or stock option plan.




 




I appreciate this opportunity to continue to work with you and to have

you assist the Company in developing and transitioning the development of those

products with which you have been involved to your successor.




 




Sincerely,




 




	

  OSMONICS, INC.


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
	

  /s/ Michael L. Snow


  	

   


  	

   


  
	

  Michael L. Snow


  	

   


  
	

  Chairman, Compensation Committee


  	

   


  
	

   


  	

   


  
	

   


  	

   


  
			





 




Agreed to and accepted this 

5  day of  Oct 

2001.




 




	

   


  	

   


  
	

   


  	

   


  
	

   /s/ Philip

  M. Rolchigo


  	

   


  	

   


  
	

  Philip M. Rolchigo


  	

   


  
	

   


  	

   


  
			





 




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