Document:

EX-10.15:

 

Exhibit 10.15

SETTLEMENT AGREEMENT AND RELEASE

     KNOW ALL PERSONS BY THESE PRESENT, that, HEALTH MANAGEMENT SYSTEMS, a New York
Corporation with principal offices located at 401 Park Avenue South, New York, New York, 10016,
Tax Identification No. 13-2770433 (hereinafter HMS) and the DISTRICT OF COLUMBIA, a municipal
corporation, hereby agree and stipulate as follows, in settlement of the contract actions pending
before the D.C. Contract Appeals Board (CAB), Nos. D-1162 and D-1189, captioned Appeal of
Health Management Systems, Inc.

     HMS, for and in consideration of the sum of Two Million Three Hundred Fifty One Thousand Forty
Two Dollars and No Cents ($2,351,042.00 ), lawful money of the United States, which sum the
DISTRICT OF COLUMBIA agrees to pay to the said HMS by check made payable to the order of HEALTH
MANAGEMENT SYSTEMS, INCORPORATED, the said HMS, for itself, its predecessors, successors, assigns,
parents, subsidiaries, affiliates, officers, directors, shareholders, subcontractors, suppliers,
and/or any other person or entity claiming by, through, or under it or them, shall release and
forever discharge the DISTRICT OF COLUMBIA, its agencies, instrumentalities, officers, agents,
servants, and employees, from any and all losses and any and all actions, damages, claims and
demands whatsoever, including, without limitation, (a) claims for contract balances and/or contract
retainage, (b) claims for equitable adjustments, (c) claims for interest, including interest under
the D.C. Quick Payment Act, D.C. Official Code § 2-221.01 (2001 ed.) et seq., (d) claims for
attorneys’ fees, costs, and/or expenses, which the said HMS now has or will have against the
DISTRICT OF COLUMBIA, its respective agencies, instrumentalities, officers, agents, servants, and
employees, or which HMS or any person or persons claiming by, through or under it now or hereafter
can. or may have, by reason of, relating to, and/or in any way arising out of: District of Columbia
Contract No. JA 91934, and any and all claims or matters of any nature raised or that could have
been raised in the following matters: Appeal of Health Management Systems, Inc. D.C.
Contract Appeals Board (CAB) Nos. D-1162 and D-l 189 or in any proceeding or matter involving or
pertaining to the same subject-matter before other administrative or judicial tribunals without
limitation.

     As further consideration for payment of said sum, it is hereby agreed that HMS will provide
full cooperation and all reasonable assistance to the DISTRICT OF COLUMBIA, its respective
agencies, instrumentalities, officers, agents, servants, and employees, including but not
necessarily limited to provision of relevant documents and testimony, in defense against any and
all further claims arising out of and/or relating to the above-described matters, to the extent
and in the event that they might be brought by third parties. In addition, HMS hereby represents
and warrants that it does not owe any subcontractors, third parties or vendors any amounts
relating to District of Columbia Contract No. JA 91934 and agrees to indemnify the District of
Columbia for any damages awarded in the event any subcontractor, third party or vendor establishes
in any action in which a court of competent jurisdiction fully adjudicates any claim brought by
such subcontractor, third party to vendor to the contrary. For this provision to have any force
and effect, the District must notify HMS within 45 days of service of process on the District of
Columbia of any such claim against the District pertaining to District of

 

 

Columbia Contract No. JA 91934.

     And it is expressly agreed, as a further consideration for said sum, that this release
includes all damages to HMS or for which HMS might seek contribution from, or might seek to impose
any responsibility or liability on, the DISTRICT OF COLUMBIA, resulting from the above-described
matter, whether now manifest or not, together with all direct and indirect consequences thereof,
which are now known or which may hereafter become known, the intention hereof being to release the
DISTRICT OF COLUMBIA, its agencies, instrumentalities, officers, agents, and employees,
completely, finally and absolutely from any and all liabilities arising wholly or partially out of
and/or in any way relating to the above-described matter, and over which HMS has or has had any
significant influence or control.

     And it is expressly agreed, as a further consideration for said sum, that this release
includes all damages to HMS or for which HMS might seek contribution from, or might seek to impose
any responsibility or liability on, the DISTRICT OF COLUMBIA, resulting from the above-described
matter, whether now manifest or not, together with all direct and indirect consequences thereof,
which are now known or which may hereafter become known, the intention hereof being to release the
DISTRICT OF COLUMBIA, its agencies, instrumentalities, officers, agents, and employees,
completely, finally and absolutely from any and all liabilities arising wholly or partially out of
and/or in any way relating to the above-described matter, and over which HMS has any significant
influence or control.

     And it is further expressly agreed that the right to the payments to be made hereunder shall
not be assigned. Any assignment of the right to such payments shall be null and void and may be
disregarded by the DISTRICT OF COLUMBIA.

     And it is further expressly agreed that this Agreement represents the entire agreement of the
parties and shall be interpreted in accordance with the laws of the District of Columbia.

     And as further consideration for said sum, the undersigned, Robert M. Holster, expressly
warrants: (1) that he is the Chief Operating Officer of HMS and that he is legally competent and
fully authorized to execute this release for and on behalf of HMS, (2) that HMS has been
represented at all stages by counsel of its choosing, (3) that the undersigned has had full
opportunity to review and consult with counsel regarding this matter and this release, (4) that
the undersigned has fully informed her/himself of the contents and meaning of this release, and
(5) that, on behalf of HMS the undersigned agrees to this release without any reservation
whatsoever.

     And, the undersigned counsel for the District of Columbia hereby expressly warrants that they
are authorized to execute this agreement for and on behalf of the District of Columbia.

     IN WITNESS WHEREOF, this 3rd day of February, 2005, the Chief

2

 

Operating Officer, HMS, having complete and proper authority so to do, has executed
this document in the name of HMS.

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Health Management Systems, Incorporated
	 
	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	By:
	 	/s/ Robert M. Holster
	

	 	 	 	 	 	 	 	 
	

	 	 	 	 	 	 	 	Chief Operating Officer
	

	 	 	 	 	 	 	 	Health Management Systems, Incorporated
	State of

	 	 	)	 	 	 	 	 
	County/ City of

	 	 	)	 	 	 	 	 

     I, Laura Jo Cruz, a Notary Public in and for the State of New York, do hereby certify that
Robert M. Holster, whose
name is signed to the foregoing release, personally appeared before me, the said
         being personally known to me as the person who
executed the said release, and subscribed and swore to the above release and acknowledged the
same to be his act and deed in my presence. And the said
         , did further make oath that s/he had carefully read and fully
understands the same, and that her/his execution thereof was voluntary and without
reservation of any kind.

     Given under my hand and official seal this 3rd day of February, 2005.

	 	 	 	 	 
	 	 	/s/ Laura Jo Cruz
	 	 	 
	 	 	NOTARY PUBLIC
	 
	 	 	 	 
	My Commission Expires: 09/22/07
	 	 	 	 
	 
	 	 	 	 
	 	 	LAURA JO CRUZ

	 	 	Notary Public — State of New York

	 	 	No.01CR6098730

	 	 	Qualified in Kings County

	 	 	Commission Expires Sep. 22, 2007

	 
	 	 	 	 
	 	 	THE DISTRICT OF COLUMBIA
	 	 	a municipal corporation
	 	 	ROBERT J. SPAGNOLETTI
	 	 	Attorney General for the District of Columbia
	 
	 	 	 	 
	 	 	George C. Valentine, Deputy Attorney General
	 	 	Civil Litigation Division
	 
	 	 	 	 
	Date: 02/01/05

	 	By:
	 	/s/ Thomas J. Foltz
	

	 	 	 	 
	

	 	 	 	Thomas J. Foltz, Assistant Attorney General
	

	 	 	 	General Litigation I
	

	 	 	 	Civil Division
	

	 	 	 	Office of the Attorney General
	

	 	 	 	441 Fourth Street, N.W., 6th Floor South
	

	 	 	 	Washington, D.C, 20001
	

	 	 	 	ATTORNEYS FOR THE DISTRICT OF COLUMBIA

HMS I & II FINAL SETTLEMENT AGREEMENT 013105

3EX-10.34

 

EXHIBIT 10.34

EMPLOYMENT AGREEMENT

     THIS EMPLOYMENT AGREEMENT, effective March 28, 2005, is made by and between CUNO INCORPORATED,
a Delaware corporation (the “Company”), and MARK G. KACHUR (“Executive”).

RECITALS

     WHEREAS, Executive is and has been serving as Chairman of the Company’s Board of Directors
(the “Board”) and President and Chief Executive Officer of the Company and is an integral part of
its management;

     WHEREAS, Executive and the Company are parties to an Employment Agreement dated December 1,
2000, and which is set to expire on June 1, 2005;

     WHEREAS, Executive and the Company desire to continue their relationship with each other under
the terms of this Agreement;

     WHEREAS, the Company wishes to ensure that Executive will not compete with the Company for a
period of two years after the last date on which he is either an employee of the Company or a
member of the Board, whichever is later; and

     WHEREAS, Executive is prepared to enter into this employment agreement with the Company and to
give the Company assurances it desires;

     NOW, THEREFORE, in consideration of the premises and of the mutual agreements herein set
forth, the parties hereto have agreed and do hereby mutually agree as follows:

     Employment, Contract Period. During the period specified in this Section 1, the Company shall
employ Executive, and Executive shall serve the Company, on the term and subject to the conditions
set forth herein. The term of Executive’s employment hereunder shall commence as of December 1,
2004 (the “Effective Date”) and, subject to prior termination as provided in Section 6 hereof,
shall continue through November 30, 2008 (the “Expiration Date”). The term of Executive’s
employment hereunder is sometimes hereinafter referred to as the “Contract Period.”

     Responsibility. At all times during the Contract Period, Executive shall serve the Company as
the Company’s Chairman of the Board and Chief Executive Officer

 

 

and shall (a) devote his full business time and effort exclusively to the performance of
duties as assigned to him by the Board that are normally incident to the offices of Chairman of the
Board and Chief Executive Officer, and (b) use his best efforts to promote the interests of the
Company and its affiliates.

     Remuneration. At all times during the Contract Period, the Company shall pay to Executive
compensation as provided in this Section 3.

     Base Salary. The Corporation shall pay Executive a base salary at an annual rate of not less
than $550,000 paid at least on a monthly basis. The annual rate of base salary may be increased at
the discretion of the Compensation and Pension Committee of the Board (the “Committee”). If
increased, the annual rate of base salary may not thereafter be decreased during the term of this
Agreement.

     Annual Incentive Compensation. The Corporation may pay Executive an annual bonus under the
provisions of the Company’s Management Incentive Plan and the Executive Management Incentive Plan
or any successor plans but only if and when authorized by the Committee. The Executive’s combined
annual incentive compensation target under such plans shall be 100% of his base salary.

     Restricted Shares. The Company granted to Executive, on January 17, 2005, 18,228 restricted
shares of the Company’s Common Stock pursuant to the Company’s 1996 Stock Incentive Plan, and,
subject to the conditions of the restriction, shall vest on December 1, 2008.

     Long-Term Incentive Compensation. On December 1, 2005, December 1, 2006 and December 1, 2007,
respectively, the Company shall grant to the Executive annual Long-Term Incentive Awards. Each
Long-Term Incentive Awards shall have a value at the time of the grant equal to $1 million, using
the valuation method(s) then employed by the Company to value its employee long-term incentive
awards. Such Long-Term Incentive Awards shall be documented by separate agreements entered into by
the Company and the Executive at the time of the respective grant. In the event of a Change of
Control, as hereinafter defined, any Long-Term Incentive Award granted to the Executive after the
Change in Control shall be settled in cash, unless otherwise agreed to by Executive.

     Annual Executive Review. Executive shall provide the Chairman of the Committee with a written
self-evaluation following the close of each Company fiscal year. Such self-evaluation shall
provide a review of the Executive’s performance against individual goals previously agreed to by
the Executive and the Committee. The Committee will review the self-evaluation with the Executive
at the next

 

 

regularly scheduled Committee meeting and will establish agreed upon individual goals for the
Executive for the next fiscal year.

     Employee Benefits. Executive, and to the extent applicable his spouse and dependents, shall
be included, to the extent eligible thereunder with respect to the requirements applicable to all
employees eligible thereunder, under any and all existing plans (and any plans that later may be
adopted) providing benefits for the Company’s employees. These plans, include, but are not limited
to:

     (a) The Company’s group life insurance plan, under which Executive shall be eligible for
life insurance equal to four times his then-current base salary as defined in the Plan or
the Group Replacement Insurance plan, at Executive’s option.

     (b) The Company’s hospitalization and medical plans, as provided to all Company employees.

     (c) The Company’s long-term disability plan, as provided to all Company employees.

     (d) Any pension, thrift plans, profit-sharing plans, stock purchase plans, and any and all
other similar or comparable benefits.

     (e) The SERP and any other supplemental executive retirement Plan or excess benefit plan.

Executive shall also be provided with a suitable automobile allowance of $1,500 per month under the
terms of the Company’s executive automobile program, automobile insurance, gas and maintenance,
paid vacation of at least four weeks per year, and officers’ and directors’ liability insurance
coverage in an amount reasonably available. Executive shall also be provided tax preparation and
estate planning counsel up to $30,000 per year, not to exceed a total of $75,000 during the term of
this Agreement.

Executive shall also be eligible to receive a Medicare supplement policy, arranged by the Company,
following termination or expiration of this Agreement. Such supplement policy shall be available
to the Executive and his spouse following the Expiration Date, or sooner if this Agreement is
terminated due to death or Disability of the Executive, as hereinafter defined. Executive and/or
his spouse will reimburse the Company for the cost of such supplemental policy.

Executive shall furthermore be provided with a mutually agreeable Change of Control Agreement,
providing benefits no less favorable to the Executive than contained in the current Change of
Control Agreement, dated October 1, 1996, as amended, between the parties. The current Change of
Control Agreement, as amended, shall remain in effect until a new Change of Control Agreement is
entered

 

 

into by the parties. The parties will use their best efforts to enter into a new Change of Control
Agreement by September 30, 2006.

Supplemental Executive Retirement Plan. Company agrees to grant to Executive a supplemental
executive retirement plan (“SERP”) that contains the following provisions:

(a) SERP retirement benefit calculated in accordance with the formula under the Pension Plan
for Salaried Employees of CUNO Incorporated, provided, however that such benefit will be
calculated (i) using base salary plus target award plan bonuses excluding the stock payout
premium, (ii) based upon average compensation of the highest 3 consecutive years during the
10 year period immediately preceding separation from service, and (iii) using years of
service as follows: (I) upon attainment of age 60, 12 years of service; (II) upon
attainment of age 62, 17 years of service; and (III) upon attainment of age 65, 25 years of
service.

(b) A SERP retirement benefit in the event of a change in control, calculated in the same
manner as a SERP retirement benefit, provided however, that such benefit will be calculated
(i) using 20 years of service, if greater than the service mentioned above; and (ii) based
upon Executive’s highest annualized base salary plus the greater of (I) an amount equal to
the highest earned annual target award bonus excluding the stock payout premium, or (II) an
amount equal to the highest target level bonus excluding the stock payout premium.

Termination.

(a) Death or Disability. Executive’s employment hereunder will terminate immediately upon
Executive’s death. The Company may terminate Executive’s employment hereunder immediately
upon giving notice of termination if Executive is disabled, by reason of physical or mental
impairment, to such an extent that he has been unable to substantially perform his duties
under this Agreement for an aggregate of 180 days (whether business or non-business days and
whether or not consecutive) during any period of twelve consecutive calendar months.

(b) For “Cause.” The Company may terminate Executive’s employment under this Agreement for
“Cause” as set forth herein. For purposes of this Agreement, “Cause” shall mean Executive’s
gross misconduct (as defined herein). For purposes of this definition, “gross misconduct”
shall mean (A) a felony conviction in a court of law under applicable federal or state laws
which results in material damage to the Company or any of its subsidiaries or

 

 

materially impairs the value of Executive’s services to the Company, or (B) willfully
engaging in one or more acts, or willfully omitting to act in accordance with duties
hereunder, which is demonstrably and materially damaging to the Company or any of its
subsidiaries, including acts and omissions that constitute gross negligence in the
performance of Executive’s duties under this Agreement. Notwithstanding the foregoing,
Executive may not be terminated for Cause unless and until there shall have been delivered
to him a copy of a resolution duly adopted by a majority affirmative vote of the membership
of the Board (excluding Executive, if he is then a member) at a meeting of the Board called
and held for such purpose (after giving Executive reasonable notice specifying the nature of
the grounds for such termination and not less than 30 days to correct the acts or omissions
complained of, if correctable, and affording Executive the opportunity, together with his
counsel, to be heard before the Board) finding that, in the good faith opinion of the
Board, Executive was guilty of conduct which constitutes Cause as set forth in this
subsection 6(b).

(c) Without “Cause.” The Company may terminate Executive’s employment under this Agreement
without “Cause” at any time, effective at such time as the Board may specify in a motion
duly adopted by the affirmative vote of two-thirds of the members of the Board then in
office.

(d) By Executive. The Executive may terminate this Agreement and his employment with the
Company pursuant thereto, at any time, with or without any breach of this Agreement by the
Company, by giving written notice to the Company. If the Executive terminates this
Agreement without any breach of this Agreement by the Company, such written notice shall be
given not less than two (2) months prior to the effective date of the termination. Unless
this Agreement is terminated by the Executive as a result of a breach of this Agreement by
the Company, for which damages and, if applicable, attorney’s fees and costs may be claimed
by the Executive, upon termination of this Agreement by the Executive, all rights and
obligations of the Executive under this Agreement shall cease upon the effective date of the
termination. This subparagraph shall not affect vested awards. Notwithstanding the
foregoing, in the event of a termination by Executive under this subsection 6(d) as a result
of a breach of this Agreement by the Company following a Change of Control, as hereinafter
defined, any amounts payable hereunder shall not cover a period extending beyond the
Expiration Date.

 

 

7. Compensation and Benefits Following Termination Without “Cause.” If the Company terminates
Executive’s employment under this Agreement without “Cause:”

(a) the Company shall pay to Executive, in immediately available funds, within 10 days of
the date of termination of Executive’s employment, a lump sum amount that is equal to the
lesser of: (i) the sum of (A) 24 months’ of base salary at the highest rate paid to
Executive before the termination, plus (B) two times the average of the annual cash bonuses,
if any, received by Executive under the provisions of the Company’s Incentive plans or any
successor plan with respect to each of the two most recent fiscal years of the Company ended
before the termination, or (ii) the balance of base salary and annual cash bonuses Executive
would be entitled to receive, under the provisions of the Company’s Incentive plans or any
successor plan, had he not been terminated and achieved 100% of his bonus goals, throughout
the remainder of this Agreement, until the Expiration Date;

(b) the restrictions on any restricted shares held by Executive immediately before the
termination of his employment shall expire simultaneously with the termination of his
employment;

(c) any options to purchase shares in the Company held by Executive immediately before the
termination of his employment that were not otherwise exercisable by Executive shall be
exercisable by Executive at any time during the 90-day period beginning immediately after
the date of termination of his employment;

(d) any other long term incentive awards held by the Executive immediately before the
termination of his employment shall become fully vested and exercisable; and

(e) with the exception of health and medical benefits, which the Company will provide for a
period of one year after termination, the Company shall not be obligated to pay any
compensation, benefits, or perquisites to Executive by reason of this Agreement after the
termination of his employment.

If Executive receives any payments under this Agreement as a result of termination of his
employment following a termination without Cause, those payments shall be in lieu of any and all
other claims or rights that Executive may have for severance, separation, and/or salary
continuation pay upon that termination of his employment.

 

 

8. Compensation and Benefits Following Termination on Account of Death or Disability. If the
Company terminates Executive’s employment under subsection 6(a) of this Agreement by reason of
Executive’s death or disability:

(a) the Company shall pay and provide to Executive, not later than 75 days after the end of
the fiscal year in which the termination occurs, that portion of the total bonus, if any, to
which he would have been entitled had he continued to be employed under this Agreement
through the end of the fiscal year in which the termination occurs, equal to the total bonus
multiplied by a fraction, the numerator of which is the number of days in the fiscal year
ending on or before the date of Executive’s termination and the denominator of which is 365;

(b) the restrictions on any restricted shares or any other equity or Long-Term Incentive
awards held by Executive immediately before the termination of his employment shall
terminate simultaneously with the termination of his employment and any and all such awards
shall become immediately exercisable.

 

 

(c) Miscellaneous Services following Termination of Employment. Following termination of his
full-time employment under this Agreement, Executive shall make himself available at all
reasonable times for consultation by and with the Company’s officers and directors. If
Executive is called upon to render services of this nature, he shall, in consideration
therefor and as a condition thereto, receive reasonable compensation for the services
rendered and reimbursement for any travel or other out-of-pocket expenses incurred in
connection therewith. In addition, Executive agrees to cooperate with the Company
(including following termination of Executive’s employment for any reason), on a reasonable
basis when cooperation would not unreasonably interfere with Executive’s employment by
making himself available to testify on behalf of the Company or any subsidiary or affiliate
of the Company, in any action, suit, or proceeding, whether civil, criminal, administrative,
or investigative, and to assist the Company, or any subsidiary or affiliate of the Company,
in any such action, suit, or proceeding, by providing information and meeting and consulting
with the Board and its representatives or counsel, or representatives or counsel of or to
the Company, or any subsidiary or affiliate of the Company, as requested; provided, however,
this provision shall not apply to any action between the Executive and the Company to
enforce this Agreement. The Company agrees to reimburse Executive, on an after-tax basis,
for all expenses actually incurred in connection with his provision of testimony or
assistance.

	10.  	Benefit. This Agreement shall inure to the benefit of and be enforceable by
Executive’s personal and legal representatives, executors, administrators, successors,
heirs, distributed, devisees, and legatees. If Executive should die while any amounts are
still payable or will be payable to Executive hereunder, all such amounts, unless otherwise
provided herein, shall be paid in accordance with the terms of this Agreement to
Executive’s devisee, legatee, or other designee or, if there be no such designee, to
Executive’s estate.

	11.  	Successor to the Company. The Company shall require any successor or assign (whether
direct or indirect by purchase, merger, consolidation or otherwise) to all or substantially
all the business and/or assets of the Company, by agreement in form and substance
satisfactory to Executive, expressly, absolutely and unconditionally to assume and agree to
perform this Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place.

 

 

12. Confidential Information and Noncompetition. Executive agrees and acknowledges that
Executive’s talents, skills, and experience are unique, and that Company has invested considerable
efforts and money in developing and compiling customer lists, supplier lists, and trade and market
information, in developing business techniques and practices, and in maintaining valuable market
relationships; that such items and all other information that relates to the business of the
Company, the business of any customer or supplier of the Company, or the business of any person,
firm, or corporation that consults with or is affiliated with the Company, constitute for purposes
hereof the “Confidential Information” of the Company; and that the Confidential Information is
valuable property of the company and is vital to the operation and continuation of the Company’s
business. Confidential Information shall not include information so generally known as to be part
of the public domain. Executive acknowledges that the Company has and will disclose Confidential
Information to Executive and afford him access to Confidential Information in connection with his
employment with the Company. Executive agrees that he shall use such Confidential Information
solely for the benefit of the Company. Executive further acknowledges that the grant of restricted
shares referred to in section 3(c) is being made by the Company in order to induce Executive to
agree to the restrictions contained in this Section 12 and that Executive has received valuable
consideration commensurate with those restrictions. Accordingly, Executive agrees and acknowledges
that:

(a) Except as required in the performance of his duties as an employee of
the Company, Executive shall not at any time, either directly or indirectly, use,
divulge, disclose. or communicate to any person, firm, or corporation in any manner
whatsoever any Confidential Information.

(b) Executive shall be given access to the Company’s Confidential Information solely for
purposes relating to his employment by the Company. Executive shall have no rights in such
Confidential Information or any letters patent, copyrights, or other proprietary rights
relating thereto, and Executive hereby assigns to the Company any supplemental or additional
information relating to the Confidential Information acquired by Executive, whether solely
or in collaboration with others, that relates in any manner to either the subject of
Executive’s work for the Company or any business of the Company during the Contract Period
(“Improvements”). Executive will disclose promptly in writing to the Company all such
Improvements or information supplemental or related thereto, and such Improvements shall be
treated for all purposes as Confidential Information hereunder.

 

 

(c) During the Contract Period and thereafter, at the request of the Company and without
expense to Executive, Executive shall cooperate in the procurement of any patent, copyright,
trademark, or trade name protection in the Company’s name that may be necessary or desirable
to vest, or to perfect the record of, title to the Confidential Information in the Company.
Executive agrees to execute all documents and do all things necessary or desirable in any
controversy or otherwise to aid Company in obtaining and enforcing proper protection of its
Confidential Information.

(d) During the period commencing on the Effective Date and ending on the second anniversary
of the first date on which Executive is neither employed by the Company nor a member of the
Board (the “Restriction Period”), Executive shall not, directly or indirectly, own, operate,
have any other than a minor financial interest in, be employed by, or in any other manner
take part in or consult with any business that is the same as, similar to, or competitive
with the business of the Company as such business is conducted during the Contract Period.
During the Restriction Period, Executive shall not solicit (other than for the benefit of
the Company during the Contract Period) any sale or purchase to or from any person who is or
was a customer or supplier of the Company during the term of Executive’s employment by the
Company, either as an employee, agent, consultant, licensee, independent contractor; owner,
or otherwise. Furthermore, during the Restriction Period, Executive shall not, directly or
indirectly, hire or solicit any employee of the Company.

(e) At any time upon request of the Company and upon termination of his employment by the
Company, Executive shall deliver to the Company, and shall not retain for his own or
another’s Use, any and all lists, information, notes, memoranda, documents, devices, and any
other material, and all copies thereof, relating to Executive’s work or the products or
business of the company of which Executive had knowledge.

(f) If any provision of this Section 12 is determined by any court of competent jurisdiction
to be unenforceable by reason of its extending for too great a period of time or over too
great a geographical area, it shall be interpreted to extend only over the maximum period of
time for which it may be enforceable, or over the maximum geographical area to which it may
be enforceable, or both; and such partial unenforceability shall not affect any other
provision of this Agreement. Executive acknowledges that, in light of the proprietary
interest of the Company in the Confidential Information, the restrictions set forth herein
are reasonable and that the remedies at law for the breach of any provision of this Section
12 are inadequate. Accordingly, in the event of any

 

 

breach, or reasonable belief as to the existence or imminence of a breach, of the provisions
hereof, the Company shall be entitled to injunctive relief to enjoin the breach (in addition
to any other legal and equitable remedies that the Company may have, including an equitable
accounting of gain to Executive resulting from the breach), together with all costs and
expenses, including reasonable attorney’s fees, related to the enforcement by the Company of
its rights hereunder.

	13.  	Validity. The invalidity or unenforceability of any provision of this Agreement shall
not affect the validity or enforceability of any other provision of this Agreement, which
shall remain in full force and effect.

	14.  	Counterparts. This Agreement may be executed in one or more counterparts, each of
which shall be deemed to be an original but all of which together will constitute one and
the same instrument.

	15.  	Legal Fees and Expenses. Except for fees and expenses related to the Company’s
enforcement of the provisions of Section 12, the Company shall pay all legal fees and
expenses that Executive may incur as a result of the Company’s contesting the validity,
enforceability, or Executive’s interpretation of, or determinations under, this Agreement.
With respect to the provisions of Section 12, above, if the Executive prevails in any
action brought by the Company pursuant to Section 12, the Executive shall be entitled to
recover his reasonable legal fees and expenses incurred by him.
	 
	16.  	Notice. All notices under this Agreement shall be in writing and shall be deemed effective
when delivered in person, or three days after deposit thereof in the official U.S. mails, postage
prepaid, for delivery as registered or certified mail, addressed as follows:

     If to the Company:

CUNO Incorporated

Attention: Corporate Secretary

400 Research Parkway

Meriden, Connecticut 06450

     If to the Executive:

Mark G. Kachur

 

 

In lieu of personal notice or notice by deposit in the official U.S. mails, a party may give notice
by confirmed telegram or fax. Either party may change the address to which notice to that party
may be mailed by notifying the other party of the change in the manner contemplated in this
section.

17. Effect on Termination and Change of Control Agreement.

(a) Executive and the Company have entered into a Termination and Change of Control
Agreement dated as of October 1, 1996, as amended, pursuant to which Executive may become
entitled to severance compensation if Executive’s employment is terminated under certain
circumstances following a Change in Control, as defined in that agreement (the “Change in
Control Agreement’). Executive and the Company intend that if a Change in Control, as
defined in the Change in Control Agreement, occurs and thereafter Executive receives any
payments pursuant to Section 7 of this Agreement (any “Section 7 Payments”), the payments
otherwise due under the Change in Control Agreement will be reduced by the full amount of
the Section 7 Payments.

(b) Notwithstanding the foregoing, in the event of a Change of Control resulting in a
termination of Executive’s employment without “Cause”, to the extent not then issued,
Executive immediately shall be issued the balance of the non-qualified stock options, if
any, eligible to be issued pursuant to Paragraph 3(d). In addition, all Restricted Shares,
if any, issued pursuant to Paragraph 3(c) and all non-qualified stock options issued
pursuant to Paragraph 3(d) shall fully vest and be fully exercisable immediately upon
termination of the Executive’s employment without “Cause” following the Change of Control.

(c) The provisions of this Section 17 shall prevail over any inconsistent language in the
Change in Control Agreement and, to the extent necessary to be effective shall be deemed to
be an amendment to the Change in Control Agreement.

	18.  	Entire Agreement. This Agreement replaces and supercedes the Employment Agreement
dated December 1, 2000, between the Executive and the Company, and expresses the entire
agreement of the parties with respect to the subject matter hereof, and all promises,
representations, understandings, arrangements, and prior agreements are merged herein and
superseded hereby. Notwithstanding the foregoing, nothing herein shall affect or diminish
previous awards granted to the Executive. No person, other than pursuant to a resolution
of the Board, shall have any authority on behalf of the Company to agree to modify or
change this Agreement or anything in

 

 

	   	reference thereto, and any such modification or change must be in writing and signed by
both parties.

19. Governing Law. This Agreement has been entered into in, and is intended to be performed
primarily within, the State of Connecticut and shall be construed, interpreted, and governed in
accordance with the laws of the State of Connecticut.

IN WITNESS WHEREOF, the parties have executed this Agreement, as of the date first written above.

	 	 	 
	EXECUTIVE	 	CUNO INCORPORATED
	 
	 	 
	 
	 	 
	/s/ Mark G. Kachur

	 	By: /s/ John A. Tomich
	 

	 	 
	MARK G. KACHUR

	 	          JOHN A. TOMICH
	

	 	          General Counsel and Secretary

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