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EXHIBIT 10 (bb)
EMPLOYMENT AGREEMENT
THIS AGREEMENT (the "Agreement"), made as of the 3rd day of November,
1999, between ESCO ELECTRONICS CORPORATION, a Missouri corporation ("Company" or
"ESCO") and Xxxxxxx X. Xxxxxxxxxx, (the "Executive"),
WITNESSETH THAT:
WHEREAS, the Executive possesses executive skills and experience which
the Company believes are of substantial value and importance to the success of
the Company's business operations; and
WHEREAS, the Company wishes to retain the benefit of the services of
the Executive in connection with the conduct of its business; and
WHEREAS, the Executive is willing to render service on the terms
hereinafter set forth;
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, the parties agree as follows:
1. TERM. This Agreement shall commence effective as of November
3, 1999, and shall continue until November 3, 2002, or such
shorter period as may be mutually agreed upon, subject to the
termination provisions of this Agreement.
2. DUTIES. The Executive shall perform such duties normally
associated with the office(s) of Vice President and Chief
Financial Officer and such other duties assigned to him by the
CEO of the Company.
3. SALARY. The Executive shall be paid an annual salary of not
less than One Hundred and Twenty Thousand Dollars ($120,000)
during the term of this Agreement, increased in accordance
with the normal practices of the Company.
4. BONUS. The Executive shall be eligible to receive an annual
bonus during the term of this Agreement upon achieving
performance goals determined by the Human Resources and Ethics
Committee of the Board of Directors of the Company
("Committee") in accordance with and subject to the terms of
the Company's Performance Compensation Plan ("PCP") for senior
officers, as in effect from time to time.
5. OTHER INCENTIVE COMPENSATION. During the term of this
Agreement, the Executive shall be entitled to participate in
any stock options, restricted share awards, performance shares
and other executive compensation and benefits as the Committee
shall, from time to time determine in its discretion.
6. WELFARE BENEFITS. During the term of this Agreement, the
Executive shall be entitled to participate in such medical,
dental, life insurance, long-term disability
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insurance, and other benefits which the Company provides from
time to time to other senior executive officers.
7. EXECUTIVE PERQUISITES. The Executive's perquisites, if any,
including but not limited to, automobile (leased or
allowance), club membership, and telephone, shall continue for
the length of salary continuation provided in section 9, at
their current level of payment, including any associated fees
or reimbursement.
8. TERMINATION OF EMPLOYMENT IN CONNECTION WITH A CHANGE OF
CONTROL. If, during the term of this Agreement, the
Executive's employment is terminated in connection with a
Change of Control under circumstances which would cause the
benefits described in the Company's Severance Plan (the
"Severance Plan") to become payable to the Executive (the
"Severance Plan Benefits"), no further compensation or
benefits of any kind shall be payable under this Agreement but
the Severance Plan Benefits shall be paid in accordance with
the terms and conditions of the Severance Plan. Capitalized
terms not defined herein are defined in the Severance Plan
adopted August 10, 1995 by ESCO Electronics Corporation Board
of Directors.
9. TERMINATION OF EMPLOYMENT PRIOR TO TERMINATION IN CONNECTION
WITH A CHANGE OF CONTROL.
During the term of this Agreement, the Executive's employment
may be terminated for any reason or no reason without cause,
by ESCO upon written notice to the Executive. If the Executive
is deceased, any sum payable under these termination
provisions to the Executive and not otherwise directed by any
plan referenced herein shall be paid to Executive's spouse, if
any, and if none, to the beneficiary as designated in any
records on file with the ESCO Electronics Corporation
Retirement Plan, or if none to the Executive's estate.
A. TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE.
If, during the term of this Agreement, but under
circumstances not described in paragraph 8, above, the
Executive's employment is terminated by the Company for
reasons other than "Cause" (as hereinafter defined), then,
provided Executive executes the Standard Severance Agreement
and Release then in general use by ESCO for this purpose, the
Executive shall receive the following :
(1) The Company shall continue to pay the Executive his base
salary at the rate in effect at the date of such termination
of employment for 12 months following such termination
("Severance Period").
(2) As a supplement to the payment of the Executive's base
salary rate under subparagraph a, above, the Company shall
also pay the Executive his PCP Percentage (as hereinafter
defined) for 12 months following such termination. For this
purpose, his PCP Percentage shall be no less than his annual
percentage (of
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base salary) under the Company's Performance Compensation Plan
in which the Executive participates, for the last fiscal year
prior to the termination.
(3) Upon proper application by Executive and payment of the
employee portion of the premium, the Company shall furnish
Executive medical continuation in accordance with the
Consolidated Omnibus Budget Reconciliation Act of 1985, as
amended ("COBRA"); provided that during the period of his
eligibility the Executive will pay only the rate which active
employees pay for similar coverage for up to 6 months.
(4) The Company shall continue to provide the Executive the
financial planning services which the Company was providing at
the date of such termination, until the federal income tax
filing deadline for the Executive's taxable year following the
taxable year during which such termination occurs.
(5) The Executive's life insurance and long term disability
benefits will terminate in accordance with the plans or
policies in effect at the time of such termination of
employment.
(6) All outstanding stock options shall become fully vested
and exercisable, and all earned awards outstanding under the
Company's Performance Share Plan shall be considered vested
and shall be paid out and/or distributed upon such
termination, subject to and in accordance with the terms of
the plan(s).
(7) If the Executive is not fully vested in his accrued
benefit under the ESCO Electronics Corporation Retirement Plan
("Retirement Plan") the Company shall pay the Executive the
lump sum actuarial equivalent of his accrued benefit under the
Retirement Plan, calculated using the same actuarial
assumptions as are used in calculating whether small lump sum
benefits become payable under the Retirement Plan.
(8) The Company shall make available executive outplacement
assistance which it determines to be appropriate for
Executive.
B. TERMINATION BY THE COMPANY FOR CAUSE.
If, during the term of this Agreement, the
Executive's employment is terminated for "Cause" (as hereafter
defined), he shall receive his regular salary and benefits
through the date of termination. All other benefits shall
cease unless specifically otherwise provided by the benefit
plan(s).
For purposes of this Agreement, "Cause" shall mean:
(1) Executive's willful and continued failure to substantially
perform his duties (other than as a result of incapacity due
to physical or mental condition), after a written demand for
performance is delivered to Executive which specifically
identifies the manner in which Executive has not substantially
performed his duties; or
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(2) Executive's disability or incapacity which extends for a
period of nine consecutive months and which renders Executive,
in the judgement of the Board, substantially unable to perform
the services for which he has been employed, or
(3) Executive's willful commission of misconduct which is
materially injurious to the Company, monetarily or otherwise;
provided that any material violation of the provisions of
paragraph 11 of this Agreement by Executive during his
employment shall constitute willful misconduct without further
proof of injury; or
(4) conviction of Executive of a felony, or
(5) a determination by the Board, after Executive has been
given written notice of the meeting of such Board at which
this question will be taken up and has had an opportunity to
appear before the Board at such meeting and defend himself,
that Executive has committed fraud, embezzlement, theft, or
misappropriation against or from the Company; or
(6) Executive's breach of any material provisions of this
Agreement.
For purposes of this paragraph 9, no act or failure
to act shall be considered "willful" unless done or omitted to
be done without good faith and without a reasonable belief
that the act or omission was in the best interest of ESCO.
C. TERMINATION BY THE EXECUTIVE FOR GOOD REASON.
If, during the term of this Agreement, but under
circumstances not described in paragraph 8, above, the
Executive terminates his employment for "Good Reason" (as
hereinafter defined), then, in addition to his regular salary
and benefits through the date of termination, provided the
Executive executes the Standard Severance Agreement and
Release then in general use by ESCO for this purpose, the
Executive shall receive the same compensation and benefits as
if the Company had terminated him other than for Cause. "Good
Reason" shall mean the occurrence of any one or more of the
following events:
(1) any failure by the Company to comply with any of the
provisions of this Agreement, other than an isolated failure
not occurring in bad faith and which is remedied by the
Company promptly after receipt of written notice thereof given
by the Executive and other than a failure to comply with
paragraphs 3 through 7 hereof inclusive solely by reason of a
reduction in compensation or benefits that applies to all
Senior Management employees;
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(2) the Company's requiring the Executive to move his
residence from the Greater St. Louis, Missouri area;
(3) the Company's assigning duties to Executive which are,
expressly or in practical effect, a material and substantial
demotion from or substantial reduction of Executive's present
executive or managerial responsibilities, whether or not
accompanied by a reduction in remuneration, provided the
Executive has given not less than 30 days' written notice to
ESCO's CEO of such demotion or reduction and such demotion or
reduction continues after a thirty day period; or
(4) any purported termination by the Company of the Executive
's employment otherwise than pursuant to a Change of Control
or for Cause as expressly permitted by this Agreement.
10. CONTINUED EMPLOYMENT NOT GUARANTEED. This Agreement is
intended to outline certain salary and benefits payable to
Executive under certain specified circumstances and shall not
be construed as a guarantee of the Executive's continued
employment, nor shall they limit the ability of ESCO's CEO to
terminate the employment relationship at any time, with or
without cause upon at least 30 days' advance written notice to
the Executive. None of the provisions of this Agreement shall
be construed as a guarantee on the part of the Executive that
he will continue to perform services for the Company, nor
shall they limit the ability of the Executive to resign at any
time upon at least 30 days' advance written notice to the
Company.
11. CONFIDENTIAL INFORMATION; COMPANY PROPERTY; NONSOLICITATION;
COMPANY INTERESTS. By and in consideration of the mutual
promises contained herein, and the compensation and benefits
to be provided by the Company hereunder, the Executive agrees
that:
a. The Executive shall hold in a fiduciary capacity for the
benefit of the Company and will not, during the period of his
employment disclose to anyone, directly or indirectly, any
trade secret or confidential information regarding the
business of ESCO Electronics Corporation or any subsidiary
company, including without limitation such information
referred to in paragraph 11(d) hereof. 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, Company
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, all (i) obtained by the Executive during his
employment by the Company, and (ii) not otherwise public
knowledge (other than because of an unauthorized act by the
Executive or another individual). Upon the termination of
employment, the Executive will return to the Company all such
Confidential Information in his position which is in written,
tangible, electronic,
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magnetic, or other reproducible form without retaining any
copies thereof. After termination of employment, the Executive
shall not communicate or divulge such Confidential Information
to anyone except (a) an authorized representative of the
Company, 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 the Company, 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. Except as expressly provided herein, promptly following the
Executive's termination of employment, the Executive shall
return to the Company all property of the Company and all
copies thereof in the Executive's possession or under his
control or to which he has access nor shall he attempt to
reproduce or have reproduced any such property, except that
the Executive may retain his diaries, Rolodexes, and
calendars.
c. During the period commencing on the date hereof through one
(1) year following the termination of Executive's employment
or through the Severance Period, whichever is longer, the
Executive will not solicit or otherwise induce any employee of
the Company or any Company Affiliate to leave the employ of
the Company or such Company Affiliate or to become associated,
whether as an employee, officer, partner, director, consultant
or otherwise, with any business organization.
d. Executive will not, during the period of his employment and
for a period of one (1) year from the date he ceases to be
employed by the Company, directly or indirectly, either for
himself 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
he became acquainted while employed as an Executive for the
Company. The Executive specifically agrees that the one (1)
year period is reasonable.
If the Executive fails to comply with any of his
undertakings hereunder, except as otherwise required by law no
further payments or contractual benefits shall be provided to
or in respect of the Executive by the Company pursuant to this
Agreement or otherwise. The provisions of paragraph 12 shall
not apply to any alleged violations of this paragraph, and the
Company shall be entitled to obtain temporary and permanent
injunctive relief, as well as damages, before any court of
competent jurisdiction in St. Louis County for any violation
of the provisions of this paragraph by Executive.
12. ENFORCEMENT - ARBITRATION. Except as provided in paragraph 11,
any controversy or claim arising out of or relating to the
application, interpretation or enforcement of this Agreement,
and any claim of every nature and description by the Executive
against the Company and/or any of its parent, subsidiary,
affiliated entities, corporation, partnerships, and their
members, officers, directors,
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managers, partners, employees, fiduciaries, administrators,
agents or attorneys or by the Company against the Executive
which cannot be settled by negotiation of the parties,
including, but not limited to, any and all claims arising
subsequent to the date of this Agreement under each of the
statutes, common law, contractual and other authorities
enumerated in Exhibit A, attached hereto and made a part
hereof, shall be settled by final and binding arbitration
administered by the American Arbitration Association
("Association") under its Employment Dispute Resolution Rules
(as amended and effective on November 1, 1993, subject to the
then-current fees) and judgement on the award rendered by the
arbitration may be entered in any court having jurisdiction
thereof subject to the following provisions, except as
otherwise mutually agreed by the parties with respect to a
particular dispute or provision at the time:
a. If the parties cannot agree upon an arbitrator, a
seven-person panel shall be submitted to the parties by the
Association. If there is a non-selection of the first such
panel, the Association shall submit a second seven-person
panel to the parties. If there is still a non-selection, the
Association shall then appoint a single arbitrator in
accordance with its rules subject to each party's objection
for cause, and if the claim involves an alleged statutory
violation, the arbitrator shall be an attorney.
b. The initiating party shall pay one-half of the
administrative fee(s) and the defending party shall pay
one-half of such fee(s).
c. Each party may take two (2) depositions and the deposition
of any expert as a matter or right, and the parties may engage
in additional prehearing discovery only for good cause shown
to the arbitrator. Any documents to be introduced in evidence
and any documents subpoenaed, as well as a list of all
witnesses to be called, shall be submitted to the other party
at least thirty (30) days prior to the initial hearing date
unless the arbitrator otherwise orders.
d. Any hearing shall be recorded by a professional reporter.
Each party shall have at least thirty (30) days to submit
post-hearing briefs, and the hearing shall not be deemed
closed until after the date for submission of such briefs. Any
extensions are subject to the control of the arbitrator.
e. The arbitration provisions of this Agreement shall not
apply to any claims by the Executive for benefits if they are
not payable by the Company or if there is another final and
binding dispute resolution in the plan, for Workers'
Compensation or unemployment compensation or as excluded in
paragraph 11, hereof.
f. Notice of any claim must be given by the aggrieved party in
writing to the other party within nine (9) months of the date
the aggrieved party first has knowledge of the event, or
should have knowledge of the event giving rise to the
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claim; otherwise, the claim shall be void and deemed waived
even if there is a federal or state statute of limitations
which would have given more time to pursue the claim. The
written notice shall identify and describe the nature of each
claim asserted, the statutes, regulation, Agreement provision
or other authority on which it is based and a brief statement
of the facts supporting such claim. The notice shall be sent
by certified mail to the last address supplied in writing by
the other party.
g. The arbitrator acting under this Agreement may award
damages, and any other relief (s)he deems just and proper
which is provided in any statute applicable to the claim,
including attorney's fees, arbitration costs and
administrative fees, including but not limited to those
previously paid by the parties under 12(b). The decision of
the arbitrator shall be final and binding on all parties and
anyone claiming by or through them. The remedy provided in
this paragraph 12 shall be the exclusive remedy for all
unsettled disputes between the parties except those
specifically excepted in subparagraph (e) above.
13. If ESCO is the Employer, any agreement, representation, or
other action of the "Employer" herein shall be ESCO's own
obligation, enforceable by Executive against ESCO. If a
subsidiary of ESCO is the Employer, then ESCO agrees to cause
the Employer to honor any such agreement, representation, or
other action of the "Employer" herein; the obligation of
Executive, however, shall remain ESCO's and shall be
enforceable by Executive only against ESCO or, in accordance
with section 14 below, ESCO's successor or assignee.
14. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of the Executive and shall be binding upon the
Company, and its successors and assigns.
15. AMENDMENT. This Agreement may be amended by mutual written
agreement of the parties. The parties also recognize the
possibility of circumstances arising in which this Agreement
would be terminated by mutual written agreement without
terminating Executive's employment.
16. GOVERNING LAW. This Agreement shall be construed and
interpreted in accordance with the laws of the State of
Missouri, excluding Missouri's choice of law rules, and except
to the extent governed by federal law.
17. CONSULTANT SERVICES. The Company may ask the Executive to
serve as a Consultant to the Company from time to time after
the Executive's employment ceases. For one year after the
Executive's employment terminates, if the Executive is
receiving the compensation and benefits outlined in paragraph
8, 9(a) or 9(c), then the Executive agrees to perform up to 80
hours of consulting without additional compensation other than
as provided herein and reimbursement of any reasonable
out-of-pocket expenses necessarily required or approved in
advance.
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IN WITNESS WHEREOF, the foregoing Agreement has been executed effective
as of 12 November, 1999.
/s/ X.X. Xxxxxxxxxx
_______________________________ ESCO ELECTRONICS CORPORATION
Date: 11/12/99 By: /s/ X.X. Xxxxxx
__________________________ ________________________________
Title: VP Admin
________________________________
Date: 12 Nov. 99
________________________________
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EXHIBIT A TO EMPLOYMENT AGREEMENT
(MISSOURI)
o Title VII of the Civil Rights Act of 1964, as amended.
o Age Discrimination in Employment Act, as amended (including the Older
Workers Benefit Protection Act).
o The Civil Rights Acts of 1866, 1870 and 1871.
o The Civil Rights Act of 1991.
o Fair Labor Standards Acts, as amended, (including Xxxxx-Xxxxxx,
Xxxxx-Xxxxx, and Service Contracts Acts) and any state labor standards
acts.
o Occupational Safety and Health Act
o Employee Polygraph Protection Act
o Worker Adjustment and Retraining Notification Act
o Family and Medical Leave Act
o The United States and Missouri Constitutions.
o National Labor Relations Act, as amended.
o Employee Retirement Income Security Act, as amended.
o Americans with Disabilities Act.
o Family and Medical Leave Act.
o Missouri Human Rights Act.
o Missouri Service Letter Statute.
o Missouri Final Pay Act
o All other common law and federal, state and local civil rights acts, acts
regulating any term, condition, or privilege of employment, acts regulating
the employment or reemployment of veterans or privacy rights, and all other
regulations, orders and executive orders relating to any term, condition or
privilege of employment.
o This Agreement and all other contractual rights
o Benefits payable by the Company and for which there is not another final
and binding dispute resolution procedure provided in the plan, after
exhaustion of any other such procedure.
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