EXHIBIT NO. 10(o)
EMPLOYMENT AGREEMENT
BETWEEN
THE HYDRAULIC COMPANY
and
XXXXX X. XXXXXXXX
dated as of June 11, 1990
THIS AGREEMENT, made effective June 11, 1990 by and between THE
HYDRAULIC COMPANY (the "Company"), a Delaware corporation, and
XXXXX X. XXXXXXXX of Eight Xxxxxxxx Xxxx, Xxx Xxxxxxxxx, Xxxxxxxxxxx
00000 (the "Executive"),
WITNESSETH THAT:
WHEREAS:
1. The Executive is a principal officer of the Company and an
integral part of its senior management who participates in the
decision-making process relative to short and long-term planning and
policy for the Company; and
2. The Board of Directors of the Company, at its meeting on
May 22, 1990 determined that it would be in the best interests of the
Company and its shareholders to enter into an employment agreement to
retain the services of the Executive; and,
3. The Executive is willing to serve the Company as a member of
its management on the terms and conditions set forth herein;
NOW, THEREFORE, it is hereby agreed by and between the parties
hereto as follows:
1. Employment. The Company agrees to continue the Executive in
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its employ, and the Executive agrees to remain in the employ of the
Company, for the period stated in Paragraph 3 hereof and upon the
other terms and conditions herein provided.
2. Position and Responsibilities. During the period of
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employment hereunder, the Executive agrees to serve the Company as
Vice President, Marketing and Communications, reporting directly to
the Chief Executive Officer of the Company, with such duties and
responsibilities, consistent with such position, as the Board of
Directors or the Chief Executive Officer may from time to time
determine. During said period, the Executive also agrees to serve, if
elected, as an officer and director of any other subsidiary or
affiliate of the Company.
3. Term and Duties.
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(a) Term of Employment. The term of the Executive's
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employment under this Agreement shall be deemed to have commenced as
of the date first above written and shall continue until May 31, 1992,
subject to extension as hereinafter provided. On the first day of
each month following the date first above written, the term of the
Executive's employment under this Agreement shall be automatically
extended unless prior thereto the Company shall deliver to the
Executive or the Executive shall deliver to the Company written notice
that such term of employment shall not be extended, in which case such
term shall end at the expiration of the then existing term of
employment under this Agreement, including any previous extensions,
and shall not be further extended except by agreement of the Company
and the Executive. Any such automatic extension shall be for one
additional full calendar month (for a total term upon such extension
of twenty-four full calendar months), unless the Executive will attain
age 65 prior to completion of twenty-four full calendar months
following the extension date, in which case the term of the
Executive's employment under this Agreement shall terminate on the
last day of the month in which the Executive attains age 65.
(b) Duties. During the period of employment hereunder and
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except for illness or incapacity and reasonable vacation period (which
shall not be less than 15 days in any calendar year), the Executive's
business time, attention, skill and efforts shall be exclusively
devoted to the business and affairs of the Company and its
subsidiaries; provided, however, that nothing in this Agreement shall
preclude the Executive from devoting time during reasonable periods
required for
(i) serving as an officer, director or member of a
committee of any company or organization involving no
conflict of interest with the company or any of its
subsidiaries or affiliates,
(ii) delivering lectures and fulfilling speaking
engagements, and
(iii) engaging in charitable and community activities,
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provided that such activities do not materially affect
or interfere with the performance of the Executive's
obligations to the Company.
4. Compensation.
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(a) For all services rendered by the Executive in any
capacity during employment under this Agreement, including services as
an executive officer, director, or member of any committee of the
Company or any subsidiary or affiliate thereof, the Company shall pay
the Executive a base salary at the rate of not less than $100,000 per
year, subject to such periodic increases as the Board of Directors of
the Company, or a committee designated by said Board, shall deem
appropriate in accordance with the Company's customary procedures and
practices regarding the salaries of Company officers with, however,
consideration of a preliminary salary review by December 31, 1990. In
no event shall the Executive's initial annual salary review be later
than June, 1991. Such salary shall be payable in accordance with the
customary payroll practices of the Company, but in no event less
frequently than monthly. Such periodic increases in salary, once
granted, shall not be subject to revocation.
(b) Executive shall be entitled to participate in any Company
incentive or bonus plan covering some or all of its executive officers
that is in effect during the period of his employment hereunder and to
receive benefits thereunder on a basis consistent with the overall
administration and intent of any such plan and with past practice, if
any, under such plan.
(c) Nothing in this Agreement shall preclude or affect any
rights or benefits that may now or hereafter be provided for the
Executive or for which the Executive may be or become eligible under
any other form of compensation or employee benefit plan now existing
or that may hereafter be adopted or awarded by the Company,
Specifically, the Executive shall:
(i) participate in the Company's Retirement Plan for
Employees of The Hydraulic Company as well as any
related program under any "excess benefit plan" that
may be adopted during the period of the Executive's
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employment hereunder and in which the Executive is
designated by the Company's Board of Directors to
participate (hereinafter referred to collectively as
the "Retirement Program");
(ii) participate to the permitted extent the Executive
wishes in The Employee Savings and Investment Plan of
the Company and the related program under any excess
benefit plan (hereinafter referred to collectively as
the "Thrift and Savings Program");
(iii) participate in the salary continuation program in the
event of death in accordance with Board policy for
Company officers;
(iv) participate in the Company's death and disability
benefit plans and its medical, dental and health and
welfare plans; and
(vi) participate in equivalent successor plans of the
Company for which senior management employees are
eligible;
provided, however, that, subject to Paragraph 7(c)(iv), nothing in
this Agreement shall preclude the Company from amending or terminating
any such plan or program, on the condition that such amendment or
termination is applicable to all of the Company's senior management
employees generally.
5. Business Expenses. The Company shall pay or reimburse the
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Executive for all reasonable travel and other expenses incurred in
connection with the performance of the Executive's duties under this
Agreement in accordance with such procedures as the Company may from
time to time establish. The Company further agrees to furnish the
Executive with a private office and a private secretary and such other
assistance and accommodations, including an automobile and appropriate
club membership, as shall be suitable to the character of the
Executive's position with the Company and adequate for the performance
of the Executive's duties under this Agreement.
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6. Additional Benefits. Nothing in this Agreement shall affect
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the Executive's eligibility to participate in all group health,
dental, hospitalization, life, travel or accident or other insurance
plans or programs and all other perquisites, fringe benefits or
retirement plans or additional compensation, including termination pay
programs, which the Company may hereafter, in its sole and absolute
discretion, elect to make available to its senior management employees
generally, and the Executive shall be eligible to receive, during the
period of employment under this Agreement, all benefits and emoluments
for which key employees are eligible under every such plan, program,
perquisite or arrangement to the extent permissible under the general
terms and provisions thereof.
7. Relocation Expenses. The Company shall pay the reasonable
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moving expenses, up to a limit of $12,500, incurred by the Executive
in relocating his family residence into the service area of Bridgeport
Hydraulic Company if such relocation occurs prior to December 31,
1993. As used herein, "moving expenses" shall include the actual
costs of packing and transporting the Executive's family and household
goods and effects but shall not include costs associated with the sale
or purchase of any residence. Nothing herein shall be construed as an
obligation on the part of the Executive to relocate into the service
area of Bridgeport Hydraulic Company.
8. Termination of Employment. Notwithstanding any other
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provision of this Agreement, the Executive's employment under this
Agreement may be terminated:
(a) by the Company, in the event of the Executive's
serious, willful misconduct in respect of the Executive's duties under
this Agreement, including conviction for a felony or perpetration of a
common law fraud which has resulted or is likely to result in material
economic damage to the Company or any of its subsidiaries, by written
notice to the Executive, specifying the event relied upon for such
termination;
(b) by either the Company or the Executive, if the
Executive accepts employment or a consulting position with another
company; or
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(c) by the Executive, in the event of any (i) material
change by the Company of the Executive's functions,, duties or
responsibilities which change would cause his position with the
Company to become of less dignity, responsibility, importance or scope
from the position and attributes thereof described in Paragraph 2
above, (ii) assignment or reassignment by the Company or by one of its
subsidiaries of the Executive to another place of employment outside
of Fairfield County, Connecticut, (iii) liquidation, dissolution,
consolidation, or acquisition or merger of the Company, or transfer of
all or substantially all of its assets other than a transaction in
which a successor corporation with a net worth at least equal to that
of the Company assumes this Agreement and all obligations and
undertakings of the Company hereunder, or (iv) reduction in the
Executive's total compensation and benefits, as specified in Paragraph
4 above and as currently provided, or other material breach of this
Agreement by the Company or any of its subsidiaries, by thirty
(30) days written notice to the Company, specifying the event relied
upon for such termination and given within 180 days after such event.
9. Payments Upon Termination of Employment. In the event of
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any termination by the Executive pursuant to Paragraph 8(c) above, or
in the event the Executive's employment under this Agreement is
terminated by the Company for any reason other than one of those
specified in Paragraphs 8(a) or 8(b) above, the Company shall, as
liquidated damages or severance pay, or both, promptly pay to the
Executive and provide the Executive and the dependents, beneficiaries
and estate of the Executive as follows:
(a) The Company shall pay the Executive, at his option,
either as a lump sum or in equal monthly installments over the
unexpired portion of the term of employment provided for in Paragraph
3(a) above, a cash amount equal to the present value of the excess of
(i) the salary provided in Paragraph 4(a) above, as in effect at the
time of termination, for a period of 12 months (commencing with the
month in which termination shall have occurred) less the amounts, if
any, the Executive would have paid in cash in respect of employee
benefits provided for in Paragraph 4(c)(iv) above if the Executive
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were still employed, over (ii) the amounts, if any, paid to the
Executive pursuant to any severance or termination pay program or
arrangement of the Company or any of its subsidiaries.
(b) The Company shall also pay the Executive a lump sum
cash amount equal to the present value of the excess of (i) the
aggregate benefit that would have been paid under the Retirement
Program described in Paragraph 4(c)(i) above as in effect on the date
first above written, if the Executive had continued to be employed and
to be entitled to service credit for eligibility and benefit purposes
during the unexpired portion of the term of employment provided for in
Paragraph 3(a) above, at an annual rate of compensation equal to that
used to calculate the payments provided by Paragraph 9(a) above,
calculated on the basis of the higher of the Executive's salary for
the 12 months immediately preceding the month in which termination
shall have occurred or the compensation amount used in the benefit
formula under said Retirement Program, and assuming that the Executive
is fully vested in such benefit, or (ii) the aggregate benefit
actually payable under the Retirement Program and any successor
retirement program of the Company consisting of a tax-qualified
pension plan and a related excess benefit plan. In clarification of
the immediately preceding sentence, the aggregate benefit that would
have been paid under the Retirement Program shall be calculated as of
the normal or early retirement date for which the Executive would have
qualified, assuming the Executive were still employed on that date and
were fully vested in such benefit, and which would produce the highest
present value.
(c) The Company shall also pay the Executive a lump sum
cash amount equal to the present value of the aggregate contributions
or payments, if any, that would have been made by the Company or any
of its subsidiaries under the Thrift and Savings Program described in
Paragraph 4(c)(ii) above, or any successor program of the Company in
effect on the date on which termination shall have occurred, if the
Executive had continued to be employed, and to participate in the
Thrift and Savings Program or such successor program to the same
extent as the Executive participated for the last month during which
the Executive was permitted to participate, during the unexpired
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portion of the term of employment provided for in Paragraph 3(a) above,
at an annual rate of compensation equal to that used to calculate the
payments provided by Paragraph 9(a) above.
(d) For purposes of calculating the lump sum cash payments
provided by Paragraphs 9(a), (b) and (c) above, present value shall be
determined by using a discount factor equal to one percentage point
below the prime rate as published in The Wall Street Journal as of the
date on which termination shall have occurred.
(e) For a period of 24 months (commencing with the month in
which termination shall have occurred), the Executive shall continue
to be entitled to all employee benefits provided for in Paragraph
4(c)(iv) above, as if the Executive were still employed during such
period under this Agreement, with benefits based upon the compensation
used to calculate the payments provided by Paragraph 9(a) above, and
if and to the extent that such benefits shall not be payable or
provided under any such plan, the Company shall pay or provide such
benefits on an individual basis. The medical, dental health and
welfare benefits provided for in Paragraph 4(c)(iv) above, in
accordance with this Paragraph 9(e) shall be secondary to any
comparable benefits provided by another employer provided that an
appropriate refund is made of any reduction in the amount paid
pursuant to Paragraph 9(a)(i) which had assumed that such benefits
would be primary.
10. Source of Payments; Interest. All payments provided for in
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Paragraphs 4, 5, 6 and 9 above shall be paid in cash from the general
funds of the Company. Any payments not made within thirty (30) days
after termination or such time as they may otherwise be due hereunder
shall bear interest at the interest rate used to establish the
discount factor provided for in Paragraph 9(d). The Company shall not
be required to establish a special or separate fund or other
segregation of assets to assure such payments.
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11. Litigation Expenses.
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(a) In the event of any litigation or other proceeding
between the Company and the Executive with respect to the subject
matter of this Agreement and the enforcement of rights hereunder, the
Company shall reimburse the Executive for all reasonable costs and
expenses relating to such litigation or other proceeding, including
reasonable attorneys' fees and expenses, provided that such litigation
or proceeding results in any
(i) settlement requiring the Company to make a payment to
the Executive, or
(ii) judgment or order in favor of the Executive enforcing
any provision of this Agreement or awarding any payment
or other consideration to the Executive, regardless of
whether such judgment or order is subsequently reversed
on appeal or in a collateral proceeding.
In no event shall the Executive be required to reimburse the Company
for any of the costs and expenses relating to such litigation or other
proceeding. The obligation of the Company under this Paragraph 10
shall survive the termination for any reason of this Agreement
(whether such termination is by the Company, by the Executive, upon
the expiration of this Agreement or otherwise).
12. Income Tax Withholding. The Company may withhold from any
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payments made under this Agreement all Federal, State, City or other
taxes as shall be required pursuant to any law or governmental
regulation or ruling.
13. Entire Understanding. This Agreement contains the entire
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understanding between the Company and the Executive with respect to
the subject matter hereof and supersedes any prior employment
agreement between the Company and the Executive, except that this
Agreement shall not affect or operate to reduce any benefit or
compensation inuring to the Executive of a kind elsewhere provided and
not expressly provided in this Agreement.
14. Severability. If, for any reason, any one or more of the
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provisions or part of a provision contained in this Agreement shall be
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held to be invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other
provision or part of a provision of this Agreerment not held so
invalid, illegal or unenforceable, and each other provision or part of
a provision shall to the full extent consistent with law continue in
full force and effect. If this Agreement is held invalid or cannot be
enforced, then to the full extent permitted by law any prior agreement
between the Company and the Executive shall be deemed reinstated as if
this Agreement had not been executed.
15. Consolidation, Merger, or Sale of Assets. Nothing in this
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Agreement shall preclude the Company from consolidating or merging
into or with, or transferring all or substantially all of its assets
to, another corporation or acquiring entity which assumes this
Agreement and all obligations and undertakings of the Company
hereunder. Upon such a consolidation, merger or transfer of assets
and assumption, the term, "the Company," as used
herein shall mean such other corporation or acquiring entity and this
Agreement shall continue in full force and effect.
16. Notices. All notices, requests, demands and other
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communications required or permitted hereunder shall be given in
writing and shall be deemed to have been duly given if delivered or
mailed, postage prepaid, first class as follows:
(a) to the Company:
The Hydraulic Company
000 Xxxx Xxxxxx
Xxxxxxxxxx, Xxxxxxxxxxx 00000
Attention: Secretary
(b) to the Executive:
Xxxxx X. Xxxxxxxx
Eight Xxxxxxxx Xxxx
Xxx Xxxxxxxxx, Xxxxxxxxxxx 00000
or to such other address as either party shall have previously
specified in writing to the other.
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17. No Attachment. Except as required by law, no right to
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receive payments under this Agreement shall be subject to anticipation
commutation, alienation, sale, assignment, encumbrances, charge,
pledge, or hypothecation or to execution, attachment, levy, or similar
process or assignment by operation of law, or any attempt, voluntary
or involuntary, to effect any such action shall be null, void and of
no effect.
18. Binding Agreement. This Agreement shall be binding upon,
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and shall inure to the benefit of, the Executive and the Company and
their respective permitted successors and assigns.
19. Modification and Waiver. This Agreement may not be modified
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or amended except by an instrument in writing signed by the parties
hereto. No term or condition of this Agreement shall be deemed to
have been waived, nor shall there be any estoppel against the
enforcement of any provision of this Agreement except by written
instrument signed by the party charged with such waiver or estoppel.
No such written waiver shall be deemed a continuing waiver unless
specifically stated therein, and each such waiver shall operate only
as to the specific term or condition waived and shall not constitute a
waiver of such term or condition for the future or as to any act other
than that specifically waived.
20. Headings of No Effect. The paragraph headings contained in
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this Agreement are included solely for convenience of reference and
shall not in any way affect the meaning or interpretation of any of
the provisions of this Agreement.
21. Governing Law. This Agreement and its validity,
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interpretation, performance, and enforcement shall be governed by the
laws of the State of Connecticut.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed and its seal to be affixed hereunto by its officers thereunto
duly authorized, and the Executive has signed this Agreement, all as
of the date first above written.
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ATTEST: THE HYDRAULIC COMPANY
/s/XXXXXXX X. XXXXXXX By /s/XXXX X. XXXXXXXX
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Secretary Xxxx X. XxXxxxxx
Chief Executive Officer
/S/XXXXX X. XXXXXXXX
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Xxxxx X. Xxxxxxxx
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