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EXHIBIT 10 (dd)
October 18, 1999
Xx. Xxxxxx Xxxxx
0 Xxxxx Xxxx
Xx. Xxxxx, XX 00000
RE: SEVERANCE AGREEMENT
Dear Xxxxxx:
As we have discussed, your employment relationship with ESCO is being
terminated effective December 31,1999 (referred to in this Agreement as the
"Effective Date" or "Termination Date") and you agree to end your active
employment on or before that date when requested to do so in writing by ESCO. It
is important, therefore, to set forth all of the terms concerning your
employment termination in exchange for your release of all claims and demands of
every nature and description (except as expressly preserved below) against ESCO
(as defined below) in this Severance Agreement and Release ("Agreement"). The
following constitutes all of the terms of our Agreement:
1. PARTIES. In this Agreement, "you" means Xxxxxx Xxxxx together with
your heirs, executors, successors, personal representatives, assigns and all
other persons and entities claiming by and through you. By "ESCO" we mean to
include ESCO Electronics Corporation, the parent corporation and all of its
subsidiaries, all of their related corporations, affiliates, including without
limitation, partnerships, departments, divisions, organizations, entities,
benefit plans, successors and assigns of each and all of them, and their
fiduciaries, administrators, partners, directors, officers, agents, attorneys
and employees of any of them.
2. SEVERANCE COMPENSATION AND BENEFITS.
(a) ESCO shall continue to pay you (or your estate, if you die) your
Base Salary at the rate in effect at the date of such Termination of employment
("Termination") for 24 months following such termination ("Severance Period").
The payments will be deposited into your checking account on each regular
employee pay day, commencing with the first regular employee pay day after
December 31, 1999. Except as provided herein, ESCO shall have no obligation to
make any further payment of compensation or benefits to you (including without
limitation, salary, vacation pay, severance pay, or pension contributions) and
shall have no obligation to provide you with any fringe benefits (including
without limitation life insurance, dental insurance, health and medical
insurance, and disability protection).
(b) As a supplement to the payment of the your base salary rate under
subparagraph a, above, ESCO shall also pay you (or your estate, if you die) your
Average Performance Compensation Plan ("PCP) Percentage for 24 months following
such termination. For this purpose, your Average PCP Percentage shall be your
average annual percentage (of base salary) under ESCO's Performance Compensation
Plan for the five consecutive fiscal years
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immediately preceding the fiscal year in which the Termination occurs
(disregarding the highest and lowest percentage).
(c) The lump sum actuarial equivalent of a supplemental retirement
benefit equal to the difference between (a) the amounts which would have been
payable under any tax-qualified defined benefit retirement plan (and any
non-qualified supplement to such plan) of ESCO's applicable to you
(collectively, the "Retirement Plan") if you had remained employed by the
Company at your Base Salary and Average PCP rate for two years after the Date of
Termination and (b) the amounts actually payable under the Retirement Plan.
(d) If you are eligible for participation in the ESCO's retiree medical
plan, you shall participate therein in accordance with its terms; otherwise upon
proper application by you and payment of the employee portion of the premium,
ESCO shall furnish you medical continuation in accordance with the Consolidated
Omnibus Budget Reconciliation Act of 1985, as amended ("COBRA"); provided that
during the period of your eligibility you will pay only the rate which active
employees pay for similar coverage for up to 18 months. ESCO reserves the right
to change insurance carriers for active employees during this period with the
possibility of corresponding changes in and effects on your coverage.
(e) ESCO shall continue to provide you the financial planning services
which ESCO was providing at the date of such termination, until the federal
income tax filing deadline for your second taxable year following the taxable
year during which such Termination occurs.
(f) Your life insurance and long term disability benefits will
terminate in accordance with these programs in effect at the time of such
termination of employment.
(g) You shall have the right to convert any split dollar life insurance
policy on your life which is in effect at the date of such termination into an
individual policy with you as the sole owner of such policy, except that ESCO
shall be entitled to repayment of all premiums paid by ESCO on such policy.
(h) ESCO shall continue to pay your club membership dues and related
fees (which it is paying at the time of such termination) for 24 months
following such termination, or until your death, if you die during such 24
months period.
(i) ESCO shall continue the automobile allowance which it is providing
you at the date of such Termination, for 24 months following such Termination or
until your death if you die during such 24 months period.
(j) All outstanding stock options shall become fully exercisable, all
restricted shares shall become fully vested, and all awards outstanding under
the ESCO's Performance Share Plan shall be considered fully earned and vested
and shall be paid out upon such termination, in accordance with the terms of the
plan(s).
(k) ESCO shall provide you with outplacement assistance.
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3. REGULAR AND ENHANCED BENEFITS. Attached to this letter as a
Supplement is a schedule listing those regular employment benefits which survive
this Agreement and a more detailed explanation of certain enhanced benefits.
This Supplement also describes all of the regular (that is, non-severance)
compensatory amounts and benefits (the "Regular Benefits") which are accrued and
payable to you as of your last day of employment. The amounts, terms, and
conditions of those Regular Benefits which are governed by separate written
employee benefit plans, programs, or agreements (the "Benefit Plans") are not
fully set forth on the Supplement and such Regular Benefits shall continue to be
governed by their respective Benefit Plans; the terms of the Benefit Plans are
not modified by this Agreement. You acknowledge that under the terms of the
Benefit Plans themselves, the termination of your employment may adversely
affect some or all of the Regular Benefits referred to in the Supplement, or
require you to act promptly to avoid a forfeiture or other adverse result. You
acknowledge that you have reviewed the terms of the Benefit Plans and understand
how those terms affect your Regular Benefits in connection with your
Termination.
4. (a) RELEASE OF ESCO. In consideration of the enhanced Severance
Payment and benefits described in Paragraph 2, the other provisions set forth
herein, and other good and valuable consideration, except for enforcement of the
provisions and benefits specifically and explicitly promised, preserved and set
forth in this Agreement, you do hereby voluntarily and knowingly, both
individually and as a member of any class, and on behalf of your heirs, personal
representatives, successors, and assigns, RELEASE, ACQUIT AND FOREVER DISCHARGE
ESCO, its predecessors, successors and assigns, subsidiary and affiliated
corporations, firms, partnerships, business entities, and benefit plans, and all
of their officers, directors, employees, agents, fiduciaries, administrators,
partners, and attorneys, FROM ANY AND ALL DEMANDS, CLAIMS, ACTIONS AND DAMAGES
(whether known or unknown, foreseen or unforeseen, direct or indirect,
liquidated or not yet fully in being) of every nature and description including,
but not limited to, back pay, front pay, statutory liquidated damages,
compensatory and punitive damages, liabilities, suits, costs, expenses, and
compensation in any form, including attorneys' fees and reinstatement, in any
way arising in whole or in part, out of your employment with and the termination
of your employment on or about the Effective Date including, but not limited to,
any and all of your rights under any and all federal, state or local statutes,
regulations, ordinances, executive orders, policies or under common law or any
alleged employee policy, manual, or contract of employment governing ESCO's
employment practices, the terms and conditions of your employment, or any
benefits of any nature and description allegedly contracted for or promised to
you, except only those sums specifically set forth in the foregoing provisions
of this Agreement. THE FOREGOING INCLUDES YOUR AGREEMENT TO WAIVE AND RELEASE
ANY AND ALL RIGHTS under all federal, state or local constitutional and
statutory provisions, orders and regulations prohibiting discrimination based on
race, color, sex, age, religion, handicap or disability, national origin,
ancestry, citizenship, disabled or other veteran's status or any other type of
employment discrimination prohibited by applicable law, including, but not
limited to, (a) Title VII of the Civil Rights Act of 1964, as amended, (b) The
Age Discrimination in Employment Act, as amended (including the Older Workers
Benefit Protection Act), (c) The Civil Rights Acts of 1866, 1870 and 1871, (d)
The Civil Rights Act of 1991, (e) The United States, and Missouri Constitutions,
(f) The National Labor Relations Act, (g) The Employee Retirement
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Income Security Act, (h) The Americans with Disabilities Act, (i) the Family and
Medical Leave Act (j) The Employee Retirement Income Security Act, (k) The
Missouri Human Rights Act, (l) and Missouri Service Letter Statute, and (m) all
other federal, state and local civil rights acts, regulations, orders and
executive orders relating to any term, condition or privilege of employment.
(b) You acknowledge and agree that you are fully aware that there are
various federal, state and municipal laws which prohibit employment
discrimination based on (among other personal characteristics) the following:
race, color, age, sex, pregnancy, marital status, sexual orientation,
citizenship, religion, creed, national origin or ancestry, military or national
guard service, disability, handicap, mental, psychological record or prior
convictions, or entitlement to pension or employee benefits including
retirement, pension, stock or other incentive plans, and severance.
(c) You also acknowledge and agree that you fully understand and are
aware that there are federal, state and municipal agencies which enforce and
administer these laws and ensure their enforcement.
5. COVENANT NOT TO XXX. You agree never to institute, directly or
indirectly, any proceeding of any kind against ESCO on account of any matters
over which you have waived your rights in this Agreement, and to tender back the
Severance Pay and extra benefits enumerated in Paragraph 2, together with
interest at the rate of Nine Percent (9%) per annum, prior to attempting to
bring any such suit.
6. ACKNOWLEDGMENT OF CONSIDERATION TO WHICH YOU WOULD NOT OTHERWISE BE
ENTITLED. You acknowledge that under this Agreement you are to receive
consideration to which you would not otherwise be entitled, absent this
Agreement. This consideration includes the Severance Pay and Benefits described
in Paragraph 2.
7. You acknowledge that you have been given the opportunity to consult
with an attorney regarding this agreement, and that you fully understand this
agreement and the effect of signing it.
8. ACCEPTANCE PERIOD. ESCO has informed you and you acknowledge that
you have up to forty-five (45) days from the date you receive this Agreement to
sign and accept it. It will then not become effective until eight (8) days after
you sign it. During the seven (7) days after you execute this document you may
revoke your acceptance. If you choose to revoke this Agreement, you must notify
ESCO no later than seven (7) days after you sign it. If you do not return the
signed Agreement to X. X. Xxxxx within forty-five (45) days after receiving this
Agreement, ESCO will consider your non-action a refusal to agree to this
Agreement. You will, therefore, not be given the consideration described in
Paragraph 2 or any other discretionary payments or benefits provided herein.
9. OWBRA INFORMATION FURNISHED: You acknowledge receipt, on October
18, 1999 of Attachment "A" to this Agreement.
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10.CONFIDENTIAL INFORMATION: ESCO PROPERTY, NONSOLICITATION; ESCO
INTERESTS. By and in consideration of the benefits to be provided by ESCO
hereunder, including the severance arrangements set forth herein, you agree
that:
(a) You will hold in a fiduciary capacity for the company and you will
not, during the period of your employment, disclose to anyone, directly or
indirectly, any trade secret or confidential information regarding the business
of ESCO Electronics Corporation or any subsidiary company. Confidential
Information for this purpose shall include, but not be limited to, trade
secrets, audit information, ethics investigation information, product
information, engineering information, manufacturing information, customer lists,
employees, ESCO policies and procedures, bidding and proposal information or
strategy, product cost or pricing information, any employee's compensation,
benefits or skills and specialties and financial information (i) obtained by you
during your employment by ESCO, and (ii) not otherwise public knowledge (other
than because of an unauthorized act by you or another individual). Upon your
Termination, you will return to ESCO all such Confidential Information in your
possession which is in written, tangible, electronic, magnetic, or other
reproducible form without retaining any copies thereof. After termination of
employment, you shall not communicate or divulge such Confidential Information
to anyone except (a) an authorized representative of ESCO, or (b) to someone
else when compelled by an order or subpoena of a court or other governmental
body after at least two (2) weeks prior written notice to ESCO, if possible, and
if such written notice is not possible, then with as much written or oral notice
as is possible under the circumstances.
(b) Upon your Termination, you shall immediately return to ESCO all of
the ESCO's property, including without limitation, keys, credit cards, files,
lists, records, personal computers and related equipment, including computer
disks and other data used by you or ESCO in rendering services hereunder, or
otherwise, which may be in the your possession or under your control, or to
which you have access, without retaining any copies or computerized duplicates
thereof.
(c) You will not solicit or otherwise induce any employee of ESCO or
any ESCO Affiliate to leave the employ of ESCO or such ESCO Affiliate or to
become associated, whether as an employee, officer, partner, director,
consultant or otherwise, with any business organization.
(d) You will not, during the period of your employment and for a period
of two (2) years from the date you cease to be employed by ESCO, directly or
indirectly, either for yourself or for any other person, divert or take away or
attempt to divert or take away (call on or solicit or attempt to call on or
solicit) any of the Company's customers or distributors, including, but not
limited to, those with whom you became acquainted as an employee of ESCO. You
specifically agree that the two (2) year period is reasonable in light of the
payments and benefits provided by ESCO pursuant to this Contract.
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If you fail to comply with any of the undertakings hereunder, no
further payments or benefits shall be provided by ESCO.
11. ENTIRE AGREEMENT. You agree that this document contains the final
and entire agreement between you and ESCO and that there are no representations,
inducements, arrangements or promises made by ESCO to you, or on which you
relied in executing this Agreement, either oral or written, other than those
expressly contained herein.
12. GOVERNING LAW AND SEVERABILITY. This Agreement has been entered
into in the State of Missouri, and the validity, interpretation and legal effect
of this Agreement shall be governed by the laws of the State of Missouri;
exclusive of its choice of law provisions. Furthermore, any claim, dispute or
disagreement which may arise must be resolved within the State of Missouri and
in accordance with the substantive laws of the State of Missouri governing
contracts entered into and performed within the State. You agree to the
jurisdiction of the courts of this State and will use such courts to resolve any
dispute not resolved by discussions and negotiation of the parties.
The invalidity or unenforceability of any provision of this Agreement
in any circumstance shall not affect the validity or enforceability of any other
provision of this Agreement, and except to the extent such provision is invalid
or unenforceable, this Agreement shall remain in full force and effect. Any
provision in this Agreement which is prohibited or unenforceable in any
jurisdiction shall, as to such jurisdiction, be ineffective only to the extent
that such provision is prohibited or unenforceable, without invalidating or
affecting the remaining provisions hereof in such jurisdiction, and any such
prohibition or unenforceability in any jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.
13. WAIVER OF BREACH. Failure of either party to exercise any of its
rights outlined in this Agreement shall not be construed as a Waiver or prevent
any party from thereafter enforcing the terms and conditions of the Agreement.
14. CHANGE OF CONTROL PRIOR TO DECEMBER 31, 1999. In the event that
there is a Change of Control as defined in ESCO's Severance Plan (the "Severance
Plan") prior to December 31, 1999, this Agreement shall become null and void and
the employees rights and obligations shall be governed by the terms of the
Severance Plan.
15. NON-ADMISSION. You agree and acknowledge that ESCO does not admit
in any way that the terms and conditions of your employment or your separation
from ESCO was in any way improper. Neither this Agreement or the offer this
Agreement describes constitutes, nor shall it be construed as, an admission by
ESCO of any liability or wrongdoing or any violation of federal, state or local
laws, regulation or ordinance and, to the contrary, any such interpretation or
inference is specifically denied.
16. DISCLOSURE. You agree that you will not disclose the terms of this
Agreement to any person other than your spouse, your attorney, or a financial
advisor without the written
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consent of ESCO. You agree to advise such persons that the terms of this
Agreement are confidential. Breach of this provision shall be considered a
material breach of this agreement.
17. BINDING EFFECT. This agreement shall be binding upon and inure to
the benefit of the parties and their respective heirs, executors,
administrators, legal representatives, successors and assigns.
18. REMEDIES. ESCO and you agree that, if either party breaches any of
the provisions of this Agreement, the non-breaching party shall be entitled to
all legal and equitable remedies provided by law, including restitution of any
monies paid pursuant to this Agreement. Moreover, the party that prevails in any
litigation related to a breach of this agreement shall be entitled to be
reimbursed by the opposing party for reasonable attorneys' fees, expenses and
court costs incurred in such litigation.
19. CONSULTANT SERVICES. ESCO may ask you to serve as a consultant to
ESCO from time to time after your employment ceases. Until January 1, 2002, you
agree to perform such consulting services as part of this Agreement and
recognize that this Agreement covers such consulting services without any
additional compensation other than provided herein.
ESCO ELECTRONICS CORPORATION
By: /s/ Xxxxxx X. Xxxxx
_________________________________________
Title: Chairman, President & CEO
_________________________________________
Date: October 18, 1999
_________________________________________
I ACKNOWLEDGE THAT I HAVE FULLY READ THE ABOVE AND VOLUNTARILY ACCEPT IT WITH
KNOWLEDGE THAT IT CONTAINS EVERYTHING I HAVE BEEN PROMISED AND A FULL AND
COMPLETE RELEASE OF ALL CLAIMS OF EVERY NATURE AND DESCRIPTION AGAINST ESCO (AS
DEFINED IN PARAGRAPH NUMBER 1, ABOVE).
/s/ Xxxxxx Xxxxx
______________________________________________
Xxxxxx Xxxxx
10/18/99
______________________________________________
Date
10/12/99
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