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EXHIBIT 10.1
MANAGEMENT AGREEMENT
This MANAGEMENT AGREEMENT entered this 28th day of April,
1995, by and between Figgie International Inc. (the "Company") and
Xxxxxx X. Xxxxxxx (the "Executive").
WHEREAS, the Executive has served the Company for in excess of
twenty-nine (29) years - most recently as Senior Vice President -
International, General Counsel and Secretary; and
WHEREAS, the Executive has expressed a desire to retire from
his employment with the Company; and
WHEREAS, the Company wishes to retain the Executive in his
present capacity in order to obtain the advantages of his
experience and expertise particularly through the difficult period
which the Company is facing; and
WHEREAS, the Executive is willing to continue his employment
with the Company beyond his desired retirement date of April 30th,
1995 in accordance with and because of the provisions of this
Agreement; and
WHEREAS, the Company and the Executive desire to set forth in
a written agreement the terms and provisions of such employment and
of certain severance and other payments to be made to the Executive
under certain circumstances;
NOW THEREFORE, in consideration of the foregoing, the mutual
covenants set forth in this Agreement and for other good and
valuable consideration the receipt and sufficiency of which are
hereby acknowledged, the Company and the Executive agree as
follows:
Article 1. Term of Employment.
The Company will employ the Executive in accordance with the
terms and conditions set forth herein commencing on the date hereof
and extending to July 3, 1996, subject however, to extension by
mutual agreement of the parties or to earlier termination as
expressly provided herein. The Executive will continue to serve
the Company as Senior Vice President - International, General
Counsel and Secretary or in such other future capacity as he and
the Company might mutually agree and will devote his full business
time and best efforts to the satisfactory discharge of the
responsibilities of his office, performing such other duties
commensurate with such office as might reasonably be requested by
the Company's Chief Executive Officer.
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Article 2. Employment Terminations.
2.1 Termination Due to Retirement Or Death
In the event the Executive's employment is terminated by
reason of retirement or death during the term of this Agreement,
the benefits of the Executive, his survivors and beneficiaries will
be determined in accordance with the Company's retirement, Senior
Executive Benefits Program, insurance, Compensation Plan for
Executives and other applicable programs as in effect on the date
of this Agreement.
For purposes of this Section 2.1, the determination of
whether a termination qualifies as a retirement will be made in
accordance with the then established rules and definitions of the
Company's Senior Executive Benefits Program.
2.2 Termination Due to Disability. In the event the
Executive during the term of this Agreement becomes, in the opinion
of qualified medical authority, so disabled as to be unable to
satisfactorily perform his duties hereunder, the Company will have
the right to terminate the Executive's employment upon thirty (30)
days written notice to the Executive but will continue to be
obligated to pay the Executive those amounts of salary, guaranteed
bonus and other payments provided in this Agreement as if the
Executive had remained a full-time employee of the Company and
retired on July 3, 1996. Such payments shall be in lieu of the
payments due to the Executive prior to July 3, 1996 in accordance
with the Company's Senior Executive Benefits Program. After July
3, 1996, any remaining payments due under the Senior Executive
Benefits Program by reason of the disability or retirement of the
Executive shall be paid.
2.3 Voluntary Termination by the Executive. The
Executive may terminate this Agreement and his employment at any
time by giving the Company written notice of intent to terminate,
delivered at lease thirty (30) calendar days prior to the effective
date of such termination. The Company will pay the Executive his
full base salary, at the rate then in effect, through the effective
date of such termination, plus all other benefits to which the
Executive has a vested right at that time. In the event that the
voluntary termination of employment of the Executive shall be prior
to April 30, 1996, the bonus described in Section 3.2 hereof shall
not be paid. In the event that the voluntary termination of
employment of the Executive shall be subsequent to April 30, 1996,
such bonus will be paid.
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2.4 Termination by the Company Without Cause. The
Executive acknowledges that he is, has been and will continue at
all times to be an at-will employee of the Company and as such his
employment has been and continues to be terminable by either the
Executive or the Company at any time upon notice to the other and
for any reason not prohibited by law. However, if the Company
terminates the Executive's employment without Cause (as defined in
Section 2.5 hereof), the Executive, in his sole discretion, can
elect to receive the compensation described in either of the
following two options as he shall choose:
Option A: the Company will continue to pay to the Executive
for twenty-four (24) full calendar months following
the date of such termination his monthly base
salary at the rate in effect as of the date of such
termination in accordance with the Company's normal
payroll practices. In addition, the Company
throughout such twenty-four (24) calendar month
period will continue the Executive's life insurance
and health care benefits coverage on the same terms
and at the same cost to the Executive as would be
applicable to a similarly situated full-time
employee provided however, that in the event the
Executive begins to receive comparable life
insurance and health care benefits (determined at
the sole discretion of the Company) from a
subsequent employer during such twenty-four (24)
month period, the Company may immediately terminate
its life insurance and health care benefits
coverage of the Executive. Coverage under the
Company's health care benefits plan will be in lieu
of health care continuation under the Consolidated
Omnibus Budget Reconciliation Act ("COBRA") for
periods such coverage is in effect under this
Agreement.
Option B: the Company will continue to make all of the
salary, bonus, retirement and other payments
provided in this Agreement as if the Executive had
remained a full-time employee of the Company until
July 3, 1996 and had retired on July 3, 1996. In
addition, the Company will continue the Executive's
life insurance and health care benefits coverage
until July 3, 1996 on the same terms and at the
same cost to the Executive as would be applicable
to a similarly situated full-time employee.
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The Company will also continue to be obligated to pay
when due all other benefits to which the Executive has a vested
right according to the provisions of any applicable retirement or
other benefit plan or program provided, however, that benefits
under the Company's Senior Executive Benefits Program will not
commence until the cessation of payments under Option A or Option
B, whichever shall have been selected by the Executive, and
provided further that payments under Option A or Option B shall be
in lieu of any severance pay which may otherwise be payable to the
Executive. Finally, coverage under the Company's health care
benefits plan under Option A or Option B will be in lieu of health
care continuation under the Consolidated Omnibus Budget
Reconciliation Act ("COBRA") for periods such coverage is in effect
under this Agreement.
Any election by the Executive shall be made in writing
within thirty (30) days after his date of termination of
employment. In the event the executive fails to make such election
on a timely basis he will be presumed to have elected Option B.
2.5 Termination For Cause. Nothing in this Agreement
will be construed to prevent the Company from terminating the
Executive's employment for Cause. As used herein, "Cause" will
include any material breach of this Agreement by the Executive or
any act by him of gross personal misconduct against the Company,
misappropriation of Company funds, insubordination, fraud,
dishonesty or gross neglect of or failure to perform the duties
reasonably required of him pursuant to this Agreement or any
conduct which is in violation of any applicable law or regulation
pertaining to the business of the Company.
2.6 Termination For Good Reason. If at any time the
Company, without the Executive's prior express written consent,
breaches or threatens to breach the provisions of this Agreement by
reducing or attempting to reduce the Executive's compensation,
benefits, rights, Status (as defined in Section 2.7) or
entitlements which he currently enjoys or which are provided by
this Agreement or by any plan or program in which the Executive
participates, the Executive will be entitled to terminate his
employment with the Company immediately and to receive all of such
payments and benefits he would have received had he been terminated
without Cause as provided in Section 2.4 above. The foregoing will
not apply to changes in benefits or perquisites which were
announced prior to the date of this Agreement. Such changes
include the reduction in the number of private clubs paid by the
Company to one (1) and the discontinuance of the provision of home
security to the Executive.
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2.7 Definition of "Status". For purposes of this
Agreement the word "Status" shall mean the relative perquisites and
stature of the Executive within the Company. "Status" shall be
determined on a relative basis taking into account the downsizing
of the Company so that a reduction in the size of the legal
department (not affecting the continued employment of the
Executive) or a reduction in the size of the budget of the legal
department will not be considered to be a reduction in the "Status"
of the Executive.
Article 3. Salary, Bonus and Retirement
3.1 Salary. During the period of this Agreement, the
Executive will be paid a base salary of no less than $20,000.00 per
month payable at such intervals as corresponds with the Company's
normal payroll practices.
3.2 Guaranteed Bonus. If the Executive remains in the
employ of the Company until April 30, 1996 or if the Executive's
employment with the Company is terminated pursuant to Sections 2.2,
2.4 or 2.6 hereof, he shall be paid, in addition to those bonus
installments already due the Executive pursuant to the Company's
Compensation Plan for Executives, a guaranteed lump sum bonus in
the amount of $80,000.00, $41,750.00 of which will be included in
the calculation base for determining the Executive's retirement
benefits pursuant to the Senior Executive Benefits Program and
$38,250.00 of which will not be included in such base calculation.
Such bonus payment shall be paid no later than April 30, 1996.
3.3 Retirement Payments. Upon the Executive's
retirement from the Company at any time after May 31, 1996, the
Executive's annual benefit under the Company's Senior Executive
Benefits Program, computed prior to any Offsets under such Program,
will not be less than $218,295.00 per year for the remainder of his
life in accordance with the calculation prepared by the Company and
attached to this Agreement as Exhibit A.
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Article 4. Non-Diminution
It is expressly agreed by the Company and the Executive that
the benefits provided by this Agreement will be in addition to
benefits to which the Executive is now or will be entitled in
accordance with the provisions of the plans, agreements and
programs which are already provided for the benefit of the
Executive and which are not specifically modified in this
Agreement. Nothing contained in this Agreement will be interpreted
to diminish or inhibit in any way the Executive's right to such
benefits. To this end it is understood that the benefits provided
by this Agreement were offered by the Company to the Executive in
order to induce the Executive to continue in the employ of the
Company rather than to follow his expressed desire to retire.
Except as provided in Section 2.6 hereof, the Company will
undertake no action which would in any way reduce or diminish any
compensation, program, insurance, indemnities, plans, fringe
benefits or rights of any kind to which the Executive is now or
will be entitled to receive and no amendment, modification or
alteration of any kind will be made thereto or pertaining to the
Executive's Status, authority, duties, or office perquisites
without the Executive's prior express written consent. It is
agreed that the Company can modify, amend or terminate any and all
such programs, insurance, indemnities, plans, fringe benefits or
rights with respect to all other participants without the consent
of the Executive as long as provision is made for the continuation
of the program, insurance, indemnities, plans, fringe benefits or
rights for the Executive.
Article 5. Covenants
5.1 Disclosure or Use of Information. The Executive will at
all times during and after the term of his employment by the
Company keep and maintain the confidentiality of all Confidential
Information and will not at any time either directly or indirectly
use such information for his own benefit or otherwise divulge,
disclose or communicate such information to any person or entity in
any manner whatsoever other than employees or agents of the Company
who have a need to know such information and then only to the
extent necessary to perform their responsibilities on behalf of the
Company. As used herein, "Confidential Information" will mean any
and all information (excluding information in the public domain)
which relates to the business of the Company including without
limitation all patents and patent applications, copyrights applied
for, issued to or owned by the Company, inventions, trade secrets,
computer programs, engineering and technical data, drawings or
designs, manufacturing techniques, information concerning pricing
and pricing policies, marketing techniques, suppliers, methods and
manner of operations, and information relating to the identity
and/or location of all past, present and prospective customers of
the Company.
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5.2 Suppliers, Customers and Other Employees. During the term
of this Agreement and for a period of twenty-four (24) months
following its termination, the Executive will not attempt to induce
any employee of the Company to terminate his or her employment with
the Company nor will he take any action with respect to any of the
suppliers or customers of the of the Company which would have or
might be likely to have an adverse effect upon the business of the
Company.
5.3 Injunctive Relief. In the event of a breach or threatened
breach of any of the provisions of this Article 5 by the Executive,
the Company will be entitled to preliminary and permanent
injunctive relief, without bond or security, sufficient to enforce
the provisions thereof and the Company will be entitled to pursue
such other remedies at law or in equity as it deems appropriate.
Article 6 Miscellaneous
6.1 Successors. This Agreement is personal to the
Executive and will not be assignable by him without the prior
written consent of the Company. This Agreement may be assigned or
transferred to and will be binding upon and inure to the benefit of
any Successor of the Company. As used herein, the term "Successor"
will include any person, partnership, firm, corporation or business
entity which acquires all or substantially all of the assets of the
Company or which succeeds to its business whether by way of
purchase, acquisition, foreclosure, merger, consolidation or
otherwise.
6.2 Modification. This Agreement will not be varied,
altered, modified, canceled, changed, or in any way amended except
by mutual agreement in a written instrument executed by the Company
and the Executive or their legal representatives.
6.3 Tax Withholding. The Company may withhold from any
benefits payable under this Agreement all Federal, state, city, or
other taxes as may be required pursuant to any law or governmental
regulation or ruling.
6.4 Governing Law. To the extent not preempted by
Federal law, the provisions of this Agreement will be construed and
enforced in accordance with the laws of the State of Ohio.
IN WITNESS WHEREOF, the Executive and the Company have
executed this Agreement on this 28th day of April, 1995.
FIGGIE INTERNATIONAL INC. XXXXXX X. XXXXXXX
By:_______________________ ___________________________
Attest:___________________
