SEPARATION AGREEMENT AND GENERAL RELEASE
THIS SEPARATION AGREEMENT AND GENERAL RELEASE is made and
entered into as of this 19th day of October, 1995 by and between
XXXXXX X. XXXXXXXXX (the "Executive") and GENERAL SIGNAL
CORPORATION, a New York corporation (the "Company").
W I T N E S S E T H :
WHEREAS, the Executive has been employed by the Company
as its Chairman and Chief Executive Officer and in other
capacities; and
WHEREAS, on October 19, 1995 the Executive ceased to be
the Chairman and Chief Executive Officer of the Company, ceased all
other officer and employee positions with the Company and its
subsidiaries, and resigned his membership on the Boards of
Directors and all Committees of the Company and its subsidiaries;
and
WHEREAS, the Executive and the Company desire to settle
fully and finally all matters between them to date, including, but
in no way limited to, any issues that might arise out of the
Executive's employment or the termination of his employment;
NOW, THEREFORE, in consideration of the mutual covenants
and promises contained herein, the parties hereto, intending to be
legally bound hereby, agree as follows:
1. The Company shall pay to the Executive, in
accordance with the Company's standard payroll practices, his base
salary (at the rate in effect on October 19, 1995) until the
earlier of (i) December 31, 1996 or (ii) the date on which the
Executive commences substantially full-time employment as an
employee with any employer. The Executive shall notify the Company
immediately upon his acceptance of any employment prior to
December 31, 1996. The Executive has no duty or obligation to seek
any new employment.
2. The Executive shall receive a cash bonus for 1995 in
an amount equal to the product of (i) $612,692.37, multiplied by
(ii) the average percentage of target bonuses treated as earned by
other corporate officers participating in the General Signal
Corporation Incentive Compensation Plan (the "Bonus Plan") for 1995
(but excluding any guaranteed minimum bonus received by any
corporate officer pursuant to a contractual obligation of the
Company if such guaranteed minimum bonus represents a greater
percentage of the applicable target bonus than the percentage
determined pursuant to this subclause (ii) without regard to any
such minimum bonus or bonuses), multiplied by (iii) .8. Said bonus
shall be paid to the Executive at the same time that other 1995
bonuses are paid under the Bonus Plan.
3. The Company shall supplement the benefits payable in
respect of the Executive under the Corporate Retirement Plan of
General Signal Corporation and under the General Signal Corporation
Benefit Equalization Plan, as augmented pursuant to the Executive's
letter agreement with the Company dated April 15, 1988
(collectively, the "Pension Plans"), by providing to the Executive
(or to the Executive's beneficiary if applicable under the
applicable form of payment) the additional benefits that he would
have been entitled to receive under the Pension Plans if he
remained in employment with the Company until December 31, 1996
earning base salary at the rate in effect on October 19, 1995,
received the cash bonus payment described in Section 2 above, and
retired on December 31, 1996; provided, however, that the benefits
payable under the Pension Plans as modified by this Section 3 shall
be reduced by the actuarially equivalent value (as determined in
good faith by the Company and the enrolled actuary for the General
Signal Corporation Benefit Equalization Plan using the actuarial
assumptions and tables that apply to the respective Pension Plans)
of the benefits payable in respect of the Executive under the ITT
pension plans. Such supplemental benefits shall be treated as
additional benefits under the General Signal Corporation Benefit
Equalization Plan and shall be payable in the same form and
commencing at the same time as benefits payable under said Benefit
Equalization Plan.
4. In respect of all stock options granted to the
Executive under the General Signal Corporation 1985 Stock Option
Plan, under the General Signal Corporation 1989 Stock Option and
Incentive Plan and under the General Signal Corporation 1992 Stock
Incentive Plan and still outstanding on October 19, 1995 (the
"Options"), the Executive (or, in the event of his death, the
person entitled to exercise the applicable Option following his
death) shall have the right to exercise such Options until the
earlier of (i) October 19, 2000 or (ii) the expiration of the
stated option term of the applicable Option (without regard to and
without giving effect to any earlier expiration that could result
from the Executive's ceasing to be the Chief Executive Officer of
the Company, but giving effect to any earlier expiration by reason
of the Executive's death), provided, however, that in no event may
the Executive exercise any such Option unless it either was
exercisable on October 19, 1995 or became exercisable pursuant to
its terms prior to January 1, 1997 (as if he remained in employment
with the Company through December 31, 1996) and on or before the
date of exercise. The Executive shall have no right to exercise
any Option that would not have become exercisable prior to January
1, 1997 if he had remained in employment through and continuing
beyond December 31, 1996. By executing this Agreement, the Company
and the Executive agree that all of the Executive's Options and the
related option agreements are amended in accordance with the
foregoing provisions of this Section 4, and that all provisions of
such Options and option agreements shall remain in full force and
effect except as so amended.
5. The Executive shall continue to vest in all Company
matching contributions under the General Signal Corporation
Deferred Compensation Plan made in respect of deferrals prior to
October 20, 1995 as if he remained in employment with the Company
until October 19, 1996. The Executive shall not be permitted to
make any contributions to said Deferred Compensation Plan or to
have any Company matching contributions credited on his behalf with
respect to any periods after October 19, 1995.
6. The Executive has elected or will elect to convert
his coverage under the Company's group-term life insurance program
to an individual universal life insurance policy with a death
benefit equal to $1,580,000. The Company shall pay the Executive's
premiums for such policy, but not beyond the earlier of
(i) December 31, 1996 or (ii) the date on which the Executive
commences substantially full-time employment as an employee with
any employer. If the Executive dies prior to the earlier of the
dates set forth in the preceding sentence, any remaining payments
under Section 1 or Section 2 of this Agreement shall be paid to his
estate or his personal representative at the time or times such
payments would have been made if the Executive had not died. In
addition, if the Executive elects continuation coverage under any
of the Company's group health plans pursuant to Part 6 of Subtitle
B of Title I of the Executive Retirement Income Security Act of
1974, as amended ("ERISA"), the Company shall pay the difference
between the full amount of the Executive's premiums for such
continuation coverage and the amount that the Executive would have
been required to pay for coverage if he had remained an employee of
the Company, but not beyond the earlier of (i) December 31, 1996 or
(ii) the date on which the Executive commences substantially full-
time employment as an employee with any employer. The Executive
shall pay the balance of such premiums, and such coverage shall
continue for the period provided under ERISA even though the
Company may cease to pay premiums under this Section 6 (provided
the Executive pays all the required premiums and otherwise
satisfies the requirements for continuation coverage).
7. Within 60 days after the execution of this
Agreement, the Company shall convey to the Executive ownership of
the automobile that the Company was providing for the use of the
Executive on October 19, 1995.
8. The Company shall reimburse the Executive for the
reasonable expenses (not including income taxes) incurred by the
Executive in renting an office in the Stamford/Greenwich,
Connecticut area and in obtaining shared secretarial, reception and
similar support services, but not beyond the earlier of
(i) December 31, 1996 or (ii) the date on which the Executive
commences substantially full-time employment as an employee with
any employer; provided, however, that any expenses pursuant to this
Section 8 shall be reimbursed by the Company only to the extent the
Company has approved in writing the amount of such expenses prior
to their being incurred. The Company's response to a request for
approval of such expenses shall not be unreasonably delayed.
9. The Executive understands and agrees that the
consideration described in the preceding Sections of this Agreement
is more than the Executive would otherwise be entitled to under the
Company's existing plans and policies. Except as otherwise
expressly provided in this Agreement, the Executive after
October 19, 1995 shall be entitled to none of the benefits or other
perquisites of employment extended to employees by the Company, and
the Executive shall have no right to any benefits under any plan,
program, policy or arrangement of the Company which are conditioned
on retirement or that would be available only if termination of
employment occurred after October 19, 1995. The payments and
benefits provided and to be provided to the Executive under
Sections 3, 4 and 5 of this Agreement shall be unaffected by any
new employment of the Executive after the effective date of this
Agreement.
10. The Executive, to the best of his knowledge, has
returned or will as soon as practicable (but in any event no later
than 30 days after execution of this Agreement) return to the
Company all Company Information and related reports, files,
memoranda, and records; credit cards, cardkey passes; door and
file keys; computer access codes; software; and other physical or
personal property which the Executive received or prepared or
helped prepare in connection with his employment and which are in
his actual possession or control on the date of this Agreement.
The Executive has not, to the best of his knowledge, retained and
will not intentionally retain any copies, duplicates,
reproductions, or excerpts thereof. The term "Company Information"
as used in this Agreement means all information relating to the
Company or any of its subsidiaries which is not already in the
public domain and which is regarded by the Company as confidential,
proprietary or private in nature, including, without limitation,
information received from third parties under confidential
conditions, technical, business, or financial information, and
other information concerning the business, contemplated future
business prospects, and other affairs of the Company. The Company
shall not treat information as confidential, proprietary or private
for purposes of this Agreement if it has treated the same
information as not being confidential, proprietary or private with
respect to any other former employee.
11. The Executive agrees that in the course of his
employment with the Company, he has acquired Company Information as
defined in Section 10. The Executive understands and agrees that
such Company Information has been disclosed to the Executive in
confidence and for Company use only. Unless otherwise required by
a court of competent jurisdiction or pursuant to any recognized
subpoena power, or as is reasonably necessary in connection with
any adversarial process between the Executive and the Company, the
Executive understands and agrees that he (i) will keep Company
Information confidential at all times after his employment with the
Company, (ii) will not disclose or communicate Company Information
to any third party, and (iii) will not make use of Company
Information on the Executive's own behalf, or on behalf of any
third party. In view of the nature of the Executive's employment
and the nature of Company Information which the Executive has
received during the course of his employment, the Executive agrees
that any unauthorized disclosure to third parties of Company
Information or other violation, or threatened violation, of this
Agreement would cause irreparable damage to the trade secret status
of Company Information and to the Company, and that, therefore, the
Company shall be entitled to an injunction prohibiting the
Executive from any such disclosure, attempted disclosure,
violation, or threatened violation. When Company Information
becomes generally available to the public other than by the
Executive's acts or omissions, it is no longer subject to these
restrictions. However, Company Information shall not be deemed to
come under this exception merely because it is embraced by more
general information which is or becomes generally available to the
public. The undertakings set forth in this Section 11 shall
survive the termination of this Agreement or other arrangements
contained in this Agreement.
12. Unless otherwise required by a court of competent
jurisdiction or pursuant to any recognized subpoena power or as is
reasonably necessary in connection with any adversarial process
between the Executive and the Company, the Executive agrees and
promises that he will not make any oral or written statements or
reveal any information to any person, company, or agency which may
be construed to be negative, disparaging or damaging to the
reputation or business of the Company, its subsidiaries, directors,
officers or affiliates, or which would interfere in any way with
the business relations between the Company or any of its
subsidiaries or affiliates and any of their customers or potential
customers.
13. Unless otherwise required by a court of competent
jurisdiction or pursuant to any recognized subpoena power or as is
reasonably necessary in connection with any adversarial process
between the Executive and the Company, the Company agrees and
promises that neither it nor its directors or officers will make
any oral or written statements or reveal any information to any
person, company, or agency which may be construed to be negative,
disparaging or damaging to the reputation or business of the
Executive or any member of his family or which would interfere in
any way with the future business relationships of the Executive.
14. The Executive represents and agrees that, unless
compelled by legal process or as is reasonably necessary in
connection with any adversarial process between the Company and the
Executive, he will keep the terms of this Agreement completely
confidential, and that he will not hereafter disclose any
information concerning this Agreement to anyone except his
financial, legal or tax advisor(s), his accountants, and his
immediate family; provided that these individuals agree to keep
said information confidential and not disclose it to others.
15. The Company represents and agrees that, unless
compelled by legal process or applicable legal requirements, or as
is reasonably necessary in connection with any adversarial process
between the Company and the Executive, it will keep the terms of
this Agreement completely confidential, and that it will not
hereafter disclose any information concerning this Agreement to
anyone except its financial, legal or tax advisor(s), its
accountants, its directors, and those employees of the Company who
have a need to know about its terms; provided that these
individuals agree to keep said information confidential and not
disclose it to others; and provided further that the Executive
shall have the opportunity to review and comment upon any proposed
public disclosure pursuant to applicable legal requirements with
respect to any of the terms of this Agreement.
16. In consideration of the payments and benefits to the
Executive under this Agreement (including, without limitation, the
right to exercise Options as set forth in Section 4 hereof), and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Executive, the
Executive shall not, during the Noncompetition Period (as
hereinafter defined), directly or indirectly, act as a director,
officer, employee, manager, trustee, agent, partner, advisor, joint
venturer, or consultant of, with or to, or otherwise engage in, any
business or businesses that actually compete to a substantial
extent with those businesses the Company and its subsidiaries
engaged in on October 19, 1995 which competition is reasonably
likely to have a material adverse effect on the Company and its
subsidiaries taken as a whole. For purposes of this Section 16,
the "Noncompetition Period" shall mean the period beginning on
October 19, 1995 and ending on December 31, 1997.
17. For a period of five years from the date of this
Agreement (the "Restricted Period"), except as specifically
requested in writing by the Company, the Executive, singly or with
any other person or directly or indirectly, shall not propose,
enter into, or agree to enter into, or encourage any other person
to propose, enter into, or agree to enter into (i) any form of
business combination, acquisition or other transaction relating to
the Company, (ii) any form of restructuring, recapitalization or
similar transaction with respect to the Company, or (iii) any
demand, request or proposal to amend, waive or terminate any
provision of this Section 17 of this Agreement. Furthermore,
during the Restricted Period, except as specifically requested in
writing by the Company, the Executive shall not, singly or with any
other person or directly or indirectly, (1) acquire, or offer,
propose or agree to acquire, by tender offer, purchase or
otherwise, any voting securities of the Company except through the
exercise of Options, (2) make, or in any way participate in, any
solicitation of proxies or written consents with respect to voting
securities of the Company (it being understood that the mere
execution of a proxy or written consent shall not be treated as
constituting participation in such a solicitation), (3) become a
participant in any election contest with respect to the Company,
(4) seek to influence any person with respect to the voting or
disposition of any voting securities of the Company, (5) demand a
copy of the Company's list of stockholders or its other books and
records, (6) participate in or encourage the formation of any
partnership, syndicate or other group that owns or seeks or offers
to acquire beneficial ownership of any voting securities of the
Company or that seeks to affect control of the Company or for the
purpose of circumventing any provision of this Agreement or (7)
otherwise act to seek or to offer to control or influence, in any
manner, the management, Board of Directors or policies of the
Company.
During the period beginning on October 19, 1995 and
ending on December 31, 1997, the Executive shall not directly or
indirectly solicit for employment any of the current directors,
officers or managers of the Company.
18. In consideration of the payments and benefits to the
Executive under this Agreement (including, without limitation, the
right to exercise Options as set forth in Section 4 hereof), and
for other good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Executive, the
Executive knowingly, voluntarily and unconditionally hereby forever
waives, releases and discharges, and covenants never to xxx on, any
and all claims, liabilities, causes of actions, judgments, orders,
assessments, penalties, fines, expenses and costs (including
without limitation attorneys' fees) and/or suits of any kind
arising out of any actions, events or circumstances before the date
of execution of this Agreement ("Claims") which the Executive has,
ever had or may have, including, without limitation, any Claims
arising in whole or in part from the Executive's employment or the
termination of the Executive's employment with the Company or the
manner of said termination; provided, however, that this Section 18
shall not apply to any of the obligations of the Company
specifically provided for in this Agreement. This Agreement is
intended as a full and final settlement and compromise of each,
every and all Claims of every kind and nature, whether known or
unknown, which have been or could be asserted against the Company
and/or any of its subsidiaries, shareholders, officers, directors,
agents, and employees, past or present, and their respective heirs,
successors and assigns (collectively, the "Releasees"), including,
without limitation --
(1) any Claims arising out of any employment agreement
or other contract, side-letter, resolution, promise
or understanding of any kind, whether written or
oral or express or implied;
(2) any Claims arising under the Age Discrimination in
Employment Act ("ADEA"), as amended, 29 U.S.C.
621 et seq.; and
(3) any Claims arising under any federal, state, or
local civil rights, human rights, anti-
discrimination, labor, employment, contract or tort
law, rule, regulation, order or decision,
including, without limitation, the Americans with
Disabilities Act of 1990, 42 U.S.C. 12101 et
seq., and Title VII of the Civil Rights Act of
1964, 42 U.S.C. 2000e et seq., and as each of
these laws have been or will be amended,
except to the extent that any governmental authority or other third
party, i.e., other than one of the Releasees, files a charge or
institutes an investigation, lawsuit or any proceeding against the
Executive based on any event, occurrence or omission during the
period of the Executive's employment with the Company, in which
case the Executive will be permitted to implead or bring a court
action against the Company and/or any of the Releasees for
indemnification of any liability or other appropriate remedy,
provided such impleader or court action would be available but for
this Agreement.
Notwithstanding anything to the contrary in this
Section 18, the Executive does not release (i) any claim he may
have under any employee benefit plan in which he was a participant
during his employment with the Company for the payment of a benefit
thereunder to which he would be entitled upon his termination of
employment on October 19, 1995 in accordance with the terms of such
plan or (ii) any claim that he may have under this Agreement.
19. The Executive understands that this Agreement
affects significant rights and represents and agrees that he has
carefully read and fully understands all of the provisions of this
Agreement, that he is voluntarily entering into this Agreement,
and that he has been advised to consult with and has in fact
consulted with legal counsel before entering into this Agreement.
In particular, the Executive acknowledges that he has been given
twenty-one (21) days during which time he has carefully considered
and voluntarily approved the terms of this Agreement. The
Executive understands that, pursuant to the provisions of the ADEA,
he shall have a period of seven (7) days from the date of execution
of this Agreement during which he may revoke this Agreement via
hand delivery of a notice of revocation to the Company's offices to
the attention of Xxxxx X. Xxxxx, Xx., General Counsel. This
Agreement shall not become effective or enforceable until the
revocation period has expired.
20. In the event of any breach by the Executive of this
Agreement, the Executive shall forfeit (to the extent permitted by
law) all payments and benefits hereunder (including, without
limitation, payments and benefits already received, any profits
realized with respect to shares of Company stock acquired upon
exercise after January 19, 1996 of an Option that was exercisable
on October 19, 1995, and any profits realized with respect to
shares of Company stock acquired upon exercise after October 19,
1995 of an Option that was not exercisable on October 19, 1995) to
the extent in excess of the payments and benefits he would have
received following termination of his employment on October 19,
1995 in the absence of this Agreement. To the extent that any
payments or benefits already received or any profits with respect
to Company stock are forfeited, the Executive shall promptly pay
all such forfeited payments and benefits and all such forfeited
profits to the Company. In addition, either party to this
Agreement may seek other legal and equitable relief in the event of
any breach of this Agreement by the other party.
21. The Company's obligations to make payments, to
transfer property, and to provide benefits hereunder shall be
subject to the Executive's satisfaction of any applicable
withholding requirements.
22. Nothing in this Agreement shall be construed as
limiting or in any other way affecting the Executive's rights to
indemnification under the Company's charter or bylaws or under the
Indemnification Agreement dated May 1, 1988 between the Company and
the Executive. Notwithstanding any other provision of this
Agreement, to the extent that the Executive is by reason of his
status as an officer, director or employee of the Company or any of
its subsidiaries prior to October 19, 1995, a witness or
interviewed or deposed as a potential witness in any action, suit,
arbitration, alternate dispute resolution mechanism, investigation,
administrative hearing or any other proceeding whether civil,
criminal, administrative, or investigative, other than one
initiated by the Executive, the Executive will be indemnified by
the Company against all expenses actually and reasonably incurred
by the Executive in connection therewith or as a result thereof.
In addition, for 1995 and for at least six years thereafter, the
Company agrees to include the Executive within the coverage of any
directors' and officers' liability insurance policy covering
officers and directors of the Company generally with respect to his
services to the Company as an officer and director through October
19, 1995.
23. The Company shall from time to time designate a
specific officer of the Company who shall be the principal contact
at the Company for the Executive in matters dealing with the
operation of this Agreement and shall notify the Executive of such
designation. Until further notice to the Executive, such
designatee shall be Xxxxxxxxx X. Xxxxxxx.
24. This Agreement constitutes the entire understanding
and agreement between the Company and the Executive with regard to
all matters herein and supersedes all prior oral and written
agreements and understandings of the parties with respect to such
matters, whether express or implied. There are no other
agreements, conditions, or representations, oral or written,
express or implied, with regard thereto. This Agreement may be
amended only in a writing of even or subsequent date, signed by all
parties hereto.
25. If any term or provision of this Agreement, or the
application thereof to any person or circumstances, will to any
extent be invalid or unenforceable, the remainder of this
Agreement, or the application of such terms to persons or
circumstances other than those as to which it is invalid or
unenforceable, will not be affected thereby, and each term of this
Agreement will be valid and enforceable to the fullest extent
permitted by law.
26. This Agreement shall be construed and enforced in
accordance with the laws of the State of Connecticut without
reference to its choice of law provisions and shall be binding upon
the parties and their respective heirs, executors, successors and
assigns.
27. This Agreement does not constitute any admission of
wrongdoing, or evidence thereof, on the part of any parties hereto
or the Releasees. Except as required by court order, or to enforce
the terms of this Agreement, this Agreement may not be used in any
court or administrative proceeding.
28. This Agreement may be executed in several
counterparts, each of which shall be deemed to be an original, but
all of which together shall constitute one and the same instrument.
IN WITNESS WHEREOF, the Company and the Executive have
caused this Agreement to be executed as of the date first above
written.
GENERAL SIGNAL CORPORATION
/s/ Xxxxxxx Xxxxxxxx
By:____________________________
Its
WITNESS:
/s/ Xxxx Xxxx /s/ Xxxxxx X. Xxxxxxxxx
_____________________ _______________________________
Xxxxxx X. Xxxxxxxxx
