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Exhibit 10.0 (b)
AMENDED AND RESTATED
MANAGEMENT AGREEMENT
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This AMENDED and RESTATED MANAGEMENT AGREEMENT ("Agreement") is
entered into as of this 9th day of June, 1997, by and between Figgie
International Inc. (the "Company") and Xxxx X. Xxxxxxxxx (the "Executive").
WHEREAS, the Executive is presently in the employ of the Company
as President of the Xxxxx Aviation Division 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. DEFINITIONS. For purposes of this Agreement: the following terms
shall have the following meanings whenever used in this Agreement.
1.1 BUSINESS UNIT, "Business Unit" shall mean the Xxxxx Aviation
Division of the Company.
1.2 SALE OF THE COMPANY. "Sale of the Company" shall mean the
first to occur of the following:
a. any person (including any individual, firm, partnership,
association, trust, trustee, personal representative,
group as defined in Rule 13d-5 under the Securities
Exchange Act of 1934, as amended, body corporate,
corporation, unincorporated organization, syndicate or
other entity) (other than the Company) is or becomes the
beneficial owner, directly or indirectly, of (i)
securities of the Company representing 50% or more of the
combined voting power of the Company's then outstanding
securities or (II) assets of the Company comprising 50% or
more of such assets; or
b. the consummation of any consolidation or merger of the
company with any other entity, other than a merger or
consolidation which would result in the voting securities
of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding
or by being converted into voting securities of the
surviving
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entity), in combination with the ownership of any trustee
or other fiduciary holding securities under an employee
benefit plan of the Company, at least 50% of the combined
voting power of the voting securities of the Company or
such surviving entity outstanding immediately after such
merger or consolidation.
1.3 SALE OF THE BUSINESS UNIT. "Sale of the Business Unit" shall have
occurred when any person (other than the Company or any subsidiary of the
Company) is or becomes the beneficial owner, directly or indirectly, of assets
of the Business Unit comprising 50% or more of such assets.
1.4 NET PROCEEDS. "Net Proceeds" shall mean all cash consideration and
the fair market value of other consideration (at the time such consideration is
received) received by the Company in connection with the Sale of the Business
Unit, or, as applicable, the aggregate cash consideration and the fair market
value of other consideration (at the time such consideration is received)
received by the stockholders of the Company (or received by the Company if such
consideration is first received by the Company and then distributed to its
stockholders) in connection with the Sale of the Company (excluding, if
applicable, holdbacks and amounts deposited in escrow which amounts have not
been released ("Holdbacks")), less the legal fees, investment banking fees and
other costs associated with the Sale of the Business Unit or the Sale of the
Company, as applicable. "Net Proceeds" shall also include the value of any
long-term liabilities (including any and all debt obligations) of the Company or
Business Unit, as applicable, indirectly or directly assumed by the buyer or
successor entity, as applicable, in connection with the Sale of the Business
Unit or the Sale of the Company, as applicable. Net Proceeds shall be approved
by the Management Development, Compensation and Nominating Committee of the
Board of Directors of the Company and shall be final. At such time as any
Holdbacks are released to the stockholders (or to the Company if such Holdbacks
are first released to the Company and then distributed to its stockholders) such
holdbacks shall constitute a portion of Net Proceeds.
SECTION 2. TERM OF EMPLOYMENT
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The Company will employ the Executive in accordance with the terms and
conditions set forth herein commencing as of the date of this Agreement and
extending to December 31, 1998. The Executive will continue to serve the Company
as President of the Xxxxx Aviation Division or in such other future capacity as
he and the Company might mutually agree and will devote his full business time
and best efforts to the
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satisfactory discharge of the responsibilities of his offices, performing such
other duties as might reasonably be requested by the Company's Chief Executive
Officer.
The initial period of employment will be automatically extended for one
(1) additional year at the end of the initial term, 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 noninterference with employees, customers and suppliers, the
Executive can quit, at any time thereafter, without notice to the Company.
SECTION 3. 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
executives provided he satisfies any applicable eligibility requirements
therefor.
SECTION 4. CONTINUED SERVICE BONUS.
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4.1 AMOUNT OF CONTINUED SERVICE BONUS. As of the earlier of (i) Sale of
the Company and (ii) Sale of the Business Unit (such earlier date, the "Release
Date")
(a) the company shall pay to the Executive in a cash lump sum
a transaction bonus determined as follows:
(i) if paid upon the Sale of the Business Unit, the
transaction bonus shall equal to two tenths of one percent
(0.2%) of the Net Proceeds.
(ii) if paid upon the Sale of the Company, the transaction
bonus shall equal two-tenths of one percent (0.2%) of the
portion of the Net Proceeds of the Sale of the Company
which is allocable to the Business Unit, the amount and
method of which allocation shall be determined by the
acquirer and approved by the Management Development,
Compensation and Nominating Committee of the Board of
Directors of the Company and shall be final.
(b) the Company shall pay to the Executive in a cash lump sum
those presently unpaid installments, if any, of all
bonuses previously awarded to the Executive pursuant to
the
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Compensation Plan for Executives (the "Bonus Plan"); and
(c) the Company shall pay to the Executive in a cash lump sum
a pro-rata bonus under the Bonus Plan with respect to the
year in which the Release Date occurs, which bonus shall
be based on the Executive's performance through the date
of sale under the Xxxxx Aviation business plan for such
year.
4.2 CONDITION PRECEDENT TO RECEIPT OF CONTINUED SERVICE BONUS. As a
condition precedent to receiving the Continued Service Bonus described in
Section 4.2 hereof, the Executive must relinquish all claim that he has
immediately prior to the Sale of the Company or the Sale of the Business, to any
stock options which are not exercisable in accordance with their terms. If for
some reason the Executive fails to relinquish such options and receives an
amount in exchange for such options, the amount payable under Section 4.1 hereof
shall be reduced by the amount received by the Executive for such options.
4.3 EFFECT ON EMPLOYEE BENEFIT PLANS. No amount paid or payable to the
Executive under this Agreement shall constitute salary or compensation for the
purposes of any employee benefit plan maintained by Figgie.
SECTION 5. EMPLOYMENT TERMINATIONS
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5.1 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, 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 5.6a. hereof. In no event will the other benefits described in the
remainder of Section 5.6 or the severance pay described in Section 5.7 be paid
in the event of death and in no event will any of the severance benefits
described in Section 5.6 or severance pay described in Section 5.7 be paid in
the event of retirement.
For purposes of this Section 5.1, 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 tax qualified defined benefit
plan.
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5.2 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 to terminate this
Agreement (but not the Executive's employment) upon thirty (30) days written
notice to the Executive. 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, except that in the case of the disability of
the Executive the Company will pay a pro rata portion of any bonus which would
have been payable to the Executive under Section 5.6a. hereof. In no event will
the other benefits described in the remainder of Section 5.6 or the severance
pay described in Section 5.7 be paid in the event of the disability of the
Executive.
5.3 VOLUNTARY TERMINATION BY THE EXECUTIVE. The Executive may terminate
his employment at any time by giving the Company written notice of intent to
terminate, delivered at least ninety (90) 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 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). In such event, the Executive shall not be entitled
to the Severance Benefits set forth in Section 5.6 hereof and shall not be
entitled to the severance pay set forth in Section 5.7 hereof. The Executive
shall, however, comply with the provisions of Sections 6.1 and 6.2 hereof.
5.4 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 5.5 hereof), the Executive will be entitled to receive the
Severance Benefits set forth in Section 5.6 hereof and the Severance Pay set
forth in Section 5.7 hereof.
5.5 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 and without any further duty or
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obligation under this Agreement. As used herein, "Cause" will be determined by
the Company in the exercise of good faith and reasonable judgment and will
include any breach of this Agreement by the Executive or any act by him of gross
personal misconduct, insubordination, misappropriation of Company funds, fraud,
dishonesty, gross neglect of or failure to perform the duties reasonably
required of him pursuant to this Agreement or any conduct which is in violation
of any applicable law or regulation pertaining to the business of the Company.
Upon any such termination all rights, obligations and duties of the parties
hereunder shall immediately cease, except Executive's obligations under Section
4 hereof.
5.6 SEVERANCE BENEFITS. In the event that the Company shall terminate
the employment of the Executive other than for "Cause" as defined in Section 5.5
hereof, the Company will, upon the effective date of such termination:
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, in the event that a Sale of the Company
or a Sale of the Business Unit occurs during the period that
would have constituted the term of this Agreement absent such
termination of employment, the bonus payments described in
Section 4 hereof.
d. 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
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program.
5.7 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 5.5 hereof, the Executive shall be entitled to Severance
Pay as follows:
a. The Company shall 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.
b. In addition, the Company, throughout such twenty-four 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.
SECTION 6. COVENANTS
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6.1 DISCLOSURE OR USE OF INFORMATION. The Executive will at all times
during and after the term 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 who have a need
to know such information and then only to the extent necessary to perform their
responsibilities on behalf of the Company. As used herein, "Confidential
Information" will mean any and all information (excluding information in the
public domain) which relates to
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the business of the Company including without limitation all patents and patent
applications, copyrights applied for, issued to or owned by the Company,
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.
6.2 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 to terminate his or her employment
with the Company nor will he take any action with respect to any of the
suppliers or customers of the Company which would have or might be likely to
have an adverse effect upon the business of the Company. Executive hereby agrees
not to make any statement or take any action, directly or indirectly, that will
disparage or discredit the Company, its Officers, Directors, employees or any of
its products, or in any way damage its reputation or ability to do business or
conduct its affairs. Executive agrees that subsequent to his termination of
employment he will, in conjunction with a Company request, reasonably cooperate
with the Company in connection with transition matters, 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.
6.3 INJUNCTIVE RELIEF. In the event of a breach or threatened breach of
any of the provisions of this Section 4 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 7. MISCELLANEOUS
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7.1 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 or the Division.
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7.2 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.
7.3 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.
7.4 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.
7.5 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.
7.6 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 Sections 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.
7.7 REPLACEMENT OF EXISTING CONTRACTS. This Agreement will replace the
Management Agreement dated December 9, 1994 between Figgie and the Executive and
the Retention Agreement dated July 17, 1996 between Figgie 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.
FIGGIE INTERNATIONAL INC.
By: /s/ Xxxxxxx X. Xxxxxxx
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Xxxxxxx X. Xxxxxxx
Attest: /s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
/s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
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NON-COMPETITION AGREEMENT
In consideration of the promises and covenants of Figgie International
Inc. ("Figgie" or the "Company") contained in the Amended and Restated
Management Agreement between the Executive and Figgie 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,
without the prior written consent of the Company, for a period of two (2) years
after his termination of employment from Figgie, directly or indirectly, for
himself or for others, in any state of the United States or in any foreign
country where Xxxxx Aviation Division 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 Aviation Division; or
(2) in connection with any product lines of Xxxxx Aviation
Division, render advice, consultation, or services to or
otherwise assist any other person or entity which
competes, directly or indirectly, with Xxxxx Aviation
Division with respect to such product lines.
For the purposes of this Agreement, employment with the purchaser of the Xxxxx
Aviation Division or the Company subsequent to the Sale of the Business Unit or
Sale of the Company, as such terms are defined in the Amended and Restated
Management Agreement dated June 9, 1997 between the Executive and Figgie, will
not constitute competition under this Non-competition Agreement.
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 compensation,
benefits and severance pay from Figgie 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 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. Figgie
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.
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IN WITNESS WHEREOF, the Executive has executed this Agreement as of
this 13th day of June, 1997.
/s/ Xxxx X. Xxxxxxxxx
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Xxxx X. Xxxxxxxxx
