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MATERIAL CONTRACTS
EXHIBIT 10.0 (V)
AMENDED AND RESTATED
MANAGEMENT AGREEMENT
This AMENDED and RESTATED MANAGEMENT AGREEMENT ("Agreement") is entered
into as of this 17th day of August, 1998, by and between Xxxxx Technologies,
Inc. (formerly known as Figgie International Inc. and hereinafter called the
"Company") and Xxxx X. Xxxxxxxxx (the "Executive").
WHEREAS, the Executive is presently in the employ of the Company as
President and Chief Executive Officer of the Company; and
WHEREAS, the Company desires to retain the employment of the Executive
and the Executive desires to continue to serve the Company in such capacity; and
WHEREAS, the Company and the Executive desire to set forth in a written
agreement the terms and provisions of such employment and of certain severance
and other payments to be made to the Executive under certain circumstances;
NOW THEREFORE, in consideration of the foregoing, the mutual covenants
and agreements set forth in this Agreement and for other good and valuable
consideration the receipt and sufficiency of which are hereby acknowledged, the
Company and the Executive agree as follows:
SECTION 1. TERM OF EMPLOYMENT AND COMPENSATION
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The Company will employ the Executive in accordance with the terms and
conditions set forth herein as of January 1, 1998 and extending for an initial
period ending December 31, 2000 (the "initial period"), subject, however, to
earlier termination as expressly provided herein. The Executive will continue to
serve the Company as President and Chief Executive Officer or in such other
future capacity
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as he and the Company might mutually agree and will devote his full business
time and best efforts to the satisfactory discharge of the responsibilities of
his offices, performing such other duties as might reasonably be requested by
the Company's Board of Directors. During the initial period the Executive will
be paid a base salary at an annual rate of Three Hundred Fifty Thousand Dollars
($350,000.00) in installments which are no less frequently than monthly,
together with such increases as the Compensation Committee of the Board of
Directors shall from time to time approve.
The initial period will be automatically extended for one (1)
additional year at the end of the initial period, and then again after each
successive year thereafter. However, either party may terminate this Agreement
at the end of the initial period, or at the end of any successive one (1) year
term thereafter, by giving the other party written notice of intent not to
renew, delivered at least three (3) months prior to the end of such initial
period or successive term.
In the event such notice of intent not to renew is properly delivered,
the term of the employment of the Executive shall then become indefinite and can
be terminated by the Company without notice. Similarly, subject to the
provisions of this Agreement relating to nondisclosure of confidential
information and non-interference with employees, customers and suppliers, the
Executive can quit, at any time thereafter, without notice to the Company.
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SECTION 2. BENEFIT PLANS
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During his employment, the Executive shall be entitled to participate
in all employee benefit plans and perquisites which are maintained or
established by the Company from time to time and which cover the Company's
senior executives provided he satisfies any applicable eligibility requirements
therefor. The Executive acknowledges the right of the Company to amend or
terminate such plans at any time in the exercise of its discretion. The
Executive further acknowledges that the Company may wish to maintain insurance
on his life for its benefit and agrees to submit to any physical examination
which may be required in order to obtain such insurance.
SECTION 3. EXPENSES
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The Executive will be reimbursed for all reasonable expenses incurred
by him in performing his duties hereunder provided that such expenses are
incurred and accounted for in accordance with the policies and procedures
established by the Company.
SECTION 4. EMPLOYMENT TERMINATIONS
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4.1 TERMINATION DUE TO RETIREMENT OR DEATH. In the event the
Executive's employment is terminated by reason of retirement or death during the
term of this Agreement, the Executive's employment with the Company shall be
deemed terminated as of the effective date of retirement or at the end of the
month in which such death occurs and all benefits will be determined in
accordance with the Company's retirement plans, survivor's benefits, insurance,
Compensation Plan for Executives and other applicable programs then in effect,
except that in the case of the death of the Executive the Company will pay a pro
rata portion of any bonus which would have been payable to the Executive under
Section 4.7a. hereof to his spouse if then living and otherwise to the executor
or administrator of his estate. In no event will the other benefits described in
the remainder of Section 4.7 hereof or the Severance Pay described in Section
4.8 hereof be paid in the event of death and in no event will any of
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the Severance Benefits and Severance Pay described in Sections 4.7 and 4.8
hereof be paid in the event of retirement. In the event of retirement, the
Executive shall, however, comply with the provisions of Sections 5.1 and 5.2
hereof.
For purposes of this Section 4.1, the determination of whether a
termination qualifies as a retirement will be made in accordance with the then
established rules and definitions of the Company's Retirement Income Plan II
which are applicable to salaried employees of the Company.
4.2 TERMINATION DUE TO DISABILITY. In the event the Executive during
the term of this Agreement becomes, in the opinion of the Company and based upon
reasonable medical opinion, so disabled as to be unable to satisfactorily
perform his duties hereunder, the Company will have the right upon thirty (30)
days written notice to the Executive to terminate the continued active service
of the Executive as President and Chief Executive Officer and the payment of
compensation and benefits under this Agreement, except as provided in this
Section 4.2. In such event, the Executive's benefits will be determined in
accordance with the Company's disability and other applicable plans and programs
then in effect, provided, however, that the Company will pay a pro rata portion
of any bonus which would have been payable to the Executive under Section 4.7a.
hereof. In no event will the other benefits described in the remainder of
Section 4.7 hereof or the Severance Pay described in Section 4.8 hereof be paid
in the event of the disability of the Executive. In the event of disability, the
Executive shall, however, comply with the provisions of Sections 5.1 and 5.2
hereof.
4.3 VOLUNTARY TERMINATION BY THE EXECUTIVE OTHER THAN FOR GOOD REASON.
The Executive may terminate his employment other than for Good Reason as such
term is defined in Section 4.4 hereof at any time by giving the Company written
notice of intent to terminate, delivered at least sixty (60) calendar days prior
to the effective date of such termination. The Company will pay the Executive
his full base salary, at the rate then in effect, through the effective date of
such termination, plus all other
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benefits to which the Executive has a vested right at that time (including but
not limited to unused vacation time, COBRA benefits and stock option benefits).
If such termination of employment is other than for Good Reason, the Executive
shall not be entitled to the Severance Benefits set forth in Section 4.7 hereof
or the Severance Pay set forth in Section 4.8 hereof. The Executive shall,
however, comply with the provisions of Sections 5.1 and 5.2 hereof.
4.4 VOLUNTARY TERMINATION BY THE EXECUTIVE WITH GOOD REASON. In the
event that the Executive terminates his employment with Good Reason as defined
below in this Section 4.4, the Executive will be entitled to receive the
Severance Benefits set forth in Section 4.7 hereof and, if he qualifies
therefor, the Severance Pay set forth in Section 4.8 hereof.
For purposes of this Agreement, an Executive shall be deemed to have
terminated his employment for "Good Reason" if his termination of employment
occurs:
a. within four (4) months after a Change in Control;
b. within four (4) months after:
i. the Board of Directors of the Company shall fail to
re-elect or shall remove the Executive from the
office of Chief Executive Officer;
ii. the Board of Directors of the Company shall make a
significant negative change in the nature or scope of
the authorities, powers, functions or duties of the
Executive hereunder;
iii. the Company shall fail to pay when due any
compensation due and owing to the Executive or shall
make a reduction in the Executive's then current base
salary or a material reduction in his benefits and
such failure is not corrected within ten (10) days
after notice thereof to the Company by the Executive;
iv. any pattern of harassment which occurs within the
first twelve (12) months after
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the execution of this Agreement, which is done with
the approval of the Board of Directors of the Company
and which impedes the Executive in the exercise of
his authorities, powers, functions or duties
hereunder in the manner in which they would normally
be exercised by a Chief Executive Officer; or
v. the Board of Directors of the Company has given the
Executive written notice of its intention not to
renew this Agreement.
In the event that the Executive shall terminate his employment with
Good Reason, he shall provide the Company with sixty (60) days advance notice of
his date of termination of employment.
4.5 TERMINATION BY THE COMPANY OTHER THAN FOR CAUSE. The Executive
acknowledges that he is, has been and will continue at all times to be an
at-will employee of the Company and as such his employment has been and
continues to be terminable, subject to the terms and conditions of this
Agreement, by either the Executive or the Company at any time upon notice to the
other as provided for herein and for any reason not prohibited by law. However,
if the Company terminates the Executive's employment other than for "Cause" (as
defined in Section 4.6 hereof), the Executive will be entitled to receive the
Severance Benefits set forth in Section 4.7 hereof and, if he qualifies
therefor, the Severance Pay set forth in Section 4.8 hereof.
4.6 TERMINATION BY THE COMPANY FOR CAUSE. Nothing in this Agreement
will be construed to prevent the Company from terminating the Executive's
employment for Cause. As used herein, "Cause" will be determined by the Board of
Directors of the Company in the exercise of good faith and reasonable judgment
and will include (i) Executive's willful failure to perform his duties under
this Agreement within a reasonable period of time after receipt of written
notice from the Board of Directors of the Company setting forth in reasonable
detail the duties which the Executive has failed to perform and the corrective
actions expected of him; (ii) a breach of Executive's obligations under Section
5 below; (iii) indictment
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for, conviction of, or written confession to a crime against the Company or a
felony; or (iv) Executive shall have been found by the Board of Directors of the
Company to have been repeatedly and excessively abusing alcohol, drugs and/or
any other intoxicating or controlled substance. Upon any such termination all
rights, obligations and duties of the parties hereunder shall immediately cease,
except Executive's obligations under Section 5 hereof.
4.7 SEVERANCE BENEFITS. In the event that the Company shall terminate
the employment of the Executive other than for "Cause" as defined in Section 4.6
hereof, or in the event the Executive terminates his employment pursuant to
Section 4.4 hereof with Good Reason, the Company will, upon the effective date
of such termination and in lieu of any other severance which may otherwise be
payable:
a. Pay to the Executive in a cash lump sum a pro rata bonus under
the Bonus Plan with respect to the year in which he is
terminated, which Bonus shall be calculated using the formula
contained in the Bonus Plan based on the actual results of the
Company for such year but without any discretionary adjustment
of the amounts payable to the Executive that might otherwise
be permitted under the Bonus Plan. Such bonus will be paid to
the Executive on the same day as bonuses under the Plan are
paid to the executives of the Company who are still employed
with the Company.
b. Pay for the costs of outplacement services actually used by
the Executive; provided, however, that the total fee paid for
such services will be limited to an amount equal to seventeen
percent (17%) of the Executive's annual base salary rate as of
the effective date of termination of employment.
c. Pay to the Executive a cash lump sum, net of taxes, equal to
twelve (12) months of the monthly car allowance then
applicable to the Executive. Such payment shall be paid to the
Executive with thirty (30) days following his termination of
employment.
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d. Cause all stock options granted to the Executive pursuant to
the Company's Key Employees' Stock Option Plan (the "Option
Plan"), or the grant of any right under any future stock plan,
to become immediately exercisable in full and to remain fully
exercisable until the earlier of the date of expiration of the
option or one (1) year after his date of termination of
employment.
e. Provide to the Executive tax and/or legal consultation with
respect to the benefits granted hereunder up to a maximum cost
to the Company of Five Thousand Dollars ($5,000.00);
f. Provide assistance to the Executive in obtaining the financing
necessary for the Executive to exercise his stock options
during the period specified in Section 4.7d. hereof; and
g. Continue to be obligated to pay when due all other benefits to
which the Executive has a vested right according to the
provisions of any applicable retirement or other benefit plan
or program.
4.8 SEVERANCE PAY. If the Executive executes the Non-Competition
Agreement attached hereto and delivers such executed Agreement to the Company no
later than thirty (30) days after the date of this Agreement, and if the
employment of the Executive is terminated by the Company other than for "Cause"
as defined in Section 4.6 hereof, or by the Executive pursuant to Section 4.4
hereof with Good Reason, the Executive shall be entitled to Severance Pay as
follows:
a. At the election of the Executive, the Company shall either
continue to pay to the Executive for the twenty-four (24)
months following his termination of employment, his monthly
base salary at the rate in effect as of the date of such
termination in accordance with the Company's normal payroll
practices or make a lump sum payment to the Executive of the
amount due above. Any such lump sum will be payable within
thirty (30) days after the date the Company receives written
notice of the Executive's election to
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receive the lump sum.
b. In addition, the Company, throughout such twenty-four (24)
month period, will continue the Executive's life insurance and
health care benefits coverage on the same terms and at the
same cost to the Executive as would be applicable to a
similarly situated full-time employee; provided, however, that
in the event the Executive begins to receive comparable life
insurance and health care benefits (determined at the sole
discretion of the Company) from a subsequent employer during
such period, the Company may immediately terminate its life
insurance and health care benefits coverage of the Executive.
Coverage under the Company's health care benefits plan will be
in lieu of health care continuation under the Consolidated
Omnibus Budget Reconciliation Act ("COBRA") for periods such
coverage is in effect under this Agreement.
4.9 VESTING OF STOCK OPTIONS. In the event of a Change in Control the
Committee under the Option Plan will cause all stock options granted to the
Executive pursuant to the Option Plan to become immediately exercisable in full.
Such stock options shall remain fully exercisable until their expiration.
In the event the proceeds from a sale or disposition of any of the
Affiliates which the Company owns on the date of this Agreement are used to
provide a dividend to the stockholders of the Company, then immediately upon the
effective date of such sale or disposition the Company will cause all stock
options granted to the Executive pursuant to the Option Plan to become
immediately exercisable in full and to remain fully exercisable so that the
Executive shall be entitled to become a stockholder of record such that the
Executive shall be entitled to receive the benefits of the dividend.
SECTION 5. COVENANTS
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5.1 DISCLOSURE OR USE OF INFORMATION. The Executive will at all times
during and after the term
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of his employment by the Company keep and maintain the confidentiality of all
Confidential Information and will not at any time either directly or indirectly
use such information for his own benefit or otherwise divulge, disclose or
communicate such information to any person or entity in any manner whatsoever
other than employees or agents of the Company or its Affiliates who have a need
to know such information and then only to the extent necessary to perform their
responsibilities on behalf of the Company or its Affiliates. As used herein,
"Confidential Information" will mean any and all information (excluding
information in the public domain) which relates to the business of the Company
and its Affiliates including without limitation all patents and patent
applications, copyrights applied for, issued to or owned by the Company or any
of its Affiliates, inventions, trade secrets, computer programs, engineering and
technical data, drawings or designs, manufacturing techniques, information
concerning pricing and pricing policies, marketing techniques, suppliers,
methods and manner of operations, and information relating to the identity
and/or location of all past, present and prospective customers of the Company
and its Affiliates.
5.2 CO-OPERATION. During the term of this Agreement and for a period of
twenty-four (24) months following its termination, the Executive will not
attempt to induce any employee of the Company or an Affiliate to terminate his
or her employment with the Company or an Affiliate nor will he take any action
with respect to any of the suppliers or customers of the Company and its
Affiliates which would have or might be likely to have an adverse effect upon
the business of the Company and its Affiliates. Executive hereby agrees not to
make any statement or take any action, directly or indirectly, that will
disparage or discredit the Company and its Affiliates, their Officers, Directors
of the Company, their employees or any of their products, or in any way damage
their reputation or ability to do business or conduct their affairs. Executive
agrees that subsequent to his termination of employment he will, in conjunction
with a Company request, reasonably co-operate with the Company in connection
with transition matters,
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disputes and litigation matters upon reasonable notice, at reasonable times, and
will be paid or reimbursed for reasonable expenses incurred by the Executive
relating to such matters.
5.3 INJUNCTIVE RELIEF. In the event of a breach or threatened breach of
any of the provisions of this Section 5 by the Executive, the Company will be
entitled to preliminary and permanent injunctive relief, without bond or
security, sufficient to enforce the provisions thereof and the Company will be
entitled to pursue such other remedies at law or in equity as it deems
appropriate.
SECTION 6. MISCELLANEOUS
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6.1 SUCCESSORS. This Agreement is personal to the Executive and will
not be assignable by him without the prior written consent of the Company. This
Agreement may be assigned or transferred to and will be binding upon and inure
to the benefit of any Successor of the Company. As used herein, the term
"Successor" will include any person, firm, corporation or business entity which
acquires all or substantially all of the assets or succeeds to the business of
the Company.
6.2 ENTIRE AGREEMENT. This Agreement supersedes any prior agreements or
understandings, oral or written, between the Executive and the Company with
respect to the subject matter hereof and constitutes the entire agreement of the
parties with respect thereto.
6.3 MODIFICATION. This Agreement will not be varied, altered, modified,
canceled, changed, or in any way amended except by mutual agreement in a written
instrument executed by the Company and the Executive or their legal
representatives.
6.4 TAX WITHHOLDING. The Company may withhold from any benefits payable
under this Agreement all federal, state, city, or other taxes as may be required
pursuant to any law or governmental regulation or ruling.
6.5 GOVERNING LAW. To the extent not preempted by federal law, the
provisions of this Agreement will be construed and enforced in accordance with
the laws of the State of Ohio.
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6.6 INDEMNIFICATION. The Company has obtained an opinion of Xxxxxx
Xxxxxxxx LLP that the payments and benefits under this Agreement do not exceed
the maximum amount which can be paid to the Executive without incurring an
excise tax under Section 4999 of the Internal Revenue Code. If the Internal
Revenue Service asserts that the amounts payable to the Executive under this
Agreement nonetheless give rise to an excise tax under Section 4999 of the
Internal Revenue Code and the Executive co-operates with the Company in
appealing the determination of the Internal Revenue Service through whatever
level of administrative or judicial appeals is deemed appropriate by the
Company, the Company shall indemnify the Executive for the amount of such excise
tax, for any interest and penalties applicable thereto, and for any income or
excise taxes payable on such indemnification. The Company shall pay all costs of
challenging the determination that the excise tax applies to payments hereunder
including any administrative costs, court costs, attorney fees, and accounting
fees, whether incurred by the Company or incurred by the Executive.
6.7 DEFINITIONS.
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a. The term "Affiliate" shall mean any entity controlling,
controlled by or under common control with the Company,
including, but not limited to, divisions and subsidiaries of
the Company.
b. The term "Change in Control" shall include:
i. the first purchase of shares pursuant to a tender
offer or exchange (other than a tender offer or
exchange by the Company) for twenty-five percent
(25%) or more of the Company's common stock of any
class or any securities convertible into such common
stock other than any purchases prior to the date of
execution of this Agreement by Xxxxxxx X. Xxxx &
Associates, L.P. and its limited partnerships and
investment advisory clients;
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ii. the receipt by the Company of a Schedule 13D or other
advice after the date of execution of this Agreement
indicating that a person, other than Xxxxxxx X. Xxxx
& Associates, L.P. and its limited partnerships and
investment advisory clients, is the "beneficial
owner" (as that term is defined in Rule 13d-3 under
the Securities Exchange Act of 1934) of twenty-five
percent (25%) or more of the Company's common stock
of any class or any securities convertible in such
common stock calculated as provided in paragraph (d)
of said Rule 13d-3;
iii. the receipt by the Company of a Schedule 13D or other
advice after the date of execution of this Agreement
indicating that Xxxxxxx X. Xxxx & Associates, L.P.
and/or its limited partnerships and investment
advisory clients, is the "beneficial owner" (as that
term is defined in Rule 13d-3 under the Securities
Exchange Act of 1934) of thirty percent (30%) or more
of the Company's combined common stock including any
securities convertible into such common stock
calculated as provided in paragraph (d) of said Rule
13d-3;
iv. the date of approval by stockholders of the Company
of an agreement providing for any consolidation or
merger of the Company in which the Company will not
be the continuing or surviving corporation or
pursuant to which shares of capital stock, of any
class or any securities convertible into such capital
stock, of the Company would be converted into cash,
securities, or other property, other than a merger of
the Company in which the holders of common stock of
all classes of the Company immediately prior to the
merger would have the same proportion of ownership of
common stock of the surviving corporation immediately
after the merger;
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v. the date of the approval by stockholders of the
Company of any sale, lease, exchange, or other
transfer (in one transaction or a series of related
transactions) of all or substantially all the assets
of the Company;
vi. the adoption of any plan or proposal for the
liquidation (but not a partial liquidation) or
dissolution of the Company; or
vii. such other event as the Compensation Committee of the Board of
Directors shall, in its sole and absolute discretion, deem to
be a "Change in Control."
6.8 REPLACEMENT OF EXISTING CONTRACT. This Agreement will replace the
Management Agreement dated June 9, 1997 between the Company and the Executive.
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IN WITNESS WHEREOF, the Executive and the Company have executed this
Agreement as of the day and year first above written.
XXXXX TECHNOLOGIES, INC.
By: /s/
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Xxxx X. Xxxxxxxxx
And: /s/
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Xxxxx X. Xxxxxxx
/s/
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Xxxxxxx X. Xxxxxxx
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NON-COMPETITION AGREEMENT
In consideration of the promises and covenants of Xxxxx Technologies,
Inc. (formerly known as Figgie International Inc. and hereinafter called
"Xxxxx") contained in the Amended and Restated Management Agreement between the
Executive and Xxxxx including the possible payment of twenty-four (24) months of
Severance Pay to the Executive under certain circumstances, the Executive hereby
agrees that the Executive will not, for a period of two (2) years after his
termination of employment from Xxxxx, directly or indirectly, for himself or for
others, in any state of the United States or in any foreign country where Xxxxx
or any of its Affiliates (as defined below) is then conducting business:
(1) engage, as an employee, partner, or sole proprietor, in
any business segment of any person or entity which
competes, directly or indirectly, with the product lines
of Xxxxx or its Affiliates; or
(2) in connection with any product lines of Xxxxx or its
Affiliates, render advice, consultation, or services to or
otherwise assist any other person or entity which
competes, directly or indirectly, with Xxxxx or any of its
Affiliates with respect to such product lines.
For the purposes of this Agreement, the term "Affiliates" shall mean any entity
controlled by or under common control with Xxxxx during the period the Executive
is employed by Xxxxx or a division or subsidiary of Xxxxx, including, but not
limited to, Xxxxx divisions and subsidiaries.
In the event of a breach or threatened breach of any of the provisions
of this Agreement by the Executive, Xxxxx will be entitled to preliminary and
permanent injunctive relief, without bond or security, sufficient to enforce the
provisions hereof and Xxxxx will be entitled to pursue such other remedies at
law or in equity as it deems appropriate.
The Executive understands that the foregoing restrictions may limit his
ability to engage in certain business pursuits during the period provided for
above, but acknowledges that he will receive sufficiently higher Severance Pay
from Xxxxx than he would otherwise receive to justify such restriction. The
Executive acknowledges that he understands the effect of the provisions of this
Agreement, that he has
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had reasonable time to consider the effect of these provisions, and that he was
encouraged to and had an opportunity to consult an attorney with respect to
these provisions. Xxxxx and the Executive consider the restrictions contained in
this Agreement to be reasonable and necessary. Nevertheless, if any aspect of
these restrictions is found to be unreasonable or otherwise unenforceable by a
Court of competent jurisdiction, the parties intend for such restrictions to be
modified by such Court so as to be reasonable and enforceable and, as so
modified by the Court, to be fully enforced.
IN WITNESS WHEREOF, the Executive has executed this Agreement as of
this 17th day of August, 1998.
/s/
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Xxxx X. Xxxxxxxxx
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