AGREEMENT
---------
This Agreement is made as of this 20th day of May 1999 by and between
Central Sprinkler Corporation (the "Parent Company"), Central Sprinkler Company
(the "Company"), Central Castings Corporation, Central Sprinkler Export Company,
Central CPVC Corporation and Xxxxxx X. Xxxxx. (The five companies are
collectively referred to herein as the "Companies").
WHEREAS Xx. Xxxxx has continuously served the Companies since July 8,1986
in various executive capacities.
WHEREAS the Companies desire to obtain the benefit of Xx. Xxxxx'x unique
experience, ability and services in a new position with new reporting
responsibilities. It is agreed that he will devote his best efforts to the
Companies in this new position and reporting role, subject to the terms and
conditions of compensation and severance contained herein.
1. Effective the date hereof, Xx. Xxxxx will report directly to the
Chief Financial Officer of the Companies and assume the role and title
of Vice President, Financial Reporting and Control.
2. Compensation for such services will consist of continuation of Xx.
Xxxxx'x base salary of $175,000, participation in the Companies'
Management Incentive Compensation Plan at a 35% bonus level,
participation in the Companies' stock option plans as well as
continuation of the fringe benefits currently in place.
3. In the event the Companies elect to terminate the employment of Xx.
Xxxxx without cause, subsequent to the date hereof, Xx. Xxxxx shall be
entitled to separation pay in the amount of twelve months of current
base salary or payment in accordance with the Companies' severance
policy for vice presidents then in effect, whichever is more. The
Companies will continue to provide Xx. Xxxxx with family health and
life insurance until the end of such twelve-month period at the same
share of costs as for other active employees. During the twelve-month
period, Xx. Xxxxx'x stock options would continue to vest and remain
exercisable. The Companies further agree to provide prepaid
outplacement services for one year at Manchester similar to those
received by other executives upon their termination from Central.
4. If Xx. Xxxxx, prior to October 31, 1999, deems the reporting
relationship or his responsibilities unsatisfactory for any reason, he
may elect to receive the separation package enumerated in Section 3.
However, in order to receive such package, he must remain actively
employed and effectively help with a transition for up to three
1
months, at the Company's option, after notice of his separation. These
three months will be part of the twelve months of severance.
5. After October 31, 1999, upon the occurrence of the events specified
below, and if he notifies the Companies within two weeks of such event
of his intention to resign, Xx. Xxxxx will be deemed to have good cause
to terminate employment and receive the separation pay package
enumerated in section 3 above:
a) Xx. Xxxxx'x compensation (base salary and bonus level), is reduced
by the Companies below the level in force on the date hereof.
b) Xx. Xxxxx'x role as second highest financial officer of the
Companies or reporting are further reduced or diminished beyond that
contemplated herein.
c) Xx. Xxxxx'x assigned office and workspace in Lansdale does not
remain comparable to what it currently is.
6. It is understood that to receive any of these benefits noted above
after termination, Xx. Xxxxx would be required to sign a release
similar to the attached.
7. If there is a change of ownership within the next year at Central
Sprinkler and Xx. Xxxxx remains with the company and cooperates
effectively and satisfactorily for a period of six months after such
change of control, he will receive a bonus of $50,000. The sole
determination of whether Xx. Xxxxx'x cooperation has been effective and
satisfactory will be by the CEO and CFO of the company at the end of
the aforementioned six months.
8. Parent Company. The Parent Company shall cause the Company to perform
each of its obligations hereunder. The Parent Company hereby guarantees
such obligations to Xx. Xxxxx.
9. Termination of Other Agreements. All other employment or severance
related arrangements except for the indemnification agreement dated
September 18, 1986 between the Companies and Xx. Xxxxx are hereby
terminated, and neither party shall have any further rights, duties,
liabilities or obligations hereunder.
10. Notice. All notices and other communications required or permitted
hereunder or necessary or convenient in connection herewith shall be in
writing and shall be delivered personally or mailed by registered or
certified mail, return receipt requested, or by overnight express
courier service, as follows:
If to the Company or the Parent Company, to:
Central Sprinkler Corporation
000 Xxxxx Xxxxxx Xxxxxx
Xxxxxxxx, Xxxxxxxxxxxx 00000
Attention: X. Xxxxxx Xxxxxxxx
2
With a copy to:
Xxxxxx X. Xxxxxxxxx, Esquire
Xxxxxx, Xxxxx & Xxxxxxx
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000-0000
If to Xx. Xxxxx, to:
Xxxxxx X. Xxxxx
00 Xxxxxx Xxxx
Xxxxxxxxxx, XX 00000
11. General. The terms of this Agreement shall be governed by the laws of
the Commonwealth of Pennsylvania.
Xx. Xxxxx may not assign his interest in this Agreement.
This Agreement shall be binding upon and inure to the benefit of the
Company and the Parent Company, and Xx. Xxxxx and their heirs,
successors and assigns.
IN WITNESS WHEREOF, the parties hereto, each intending to be legally
bound, have hereunto duly executed this Agreement the day and year
first written above.
CENTRAL SPRINKLER COMPANY
Witness: /s/ Xxxxx Xxxxxxxx By: /s/ X. Xxxxxx Xxxxxxxx
-------------------------- -------------------------
Title: CEO
Witness: /s/ Xxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxx
-------------------------- -------------------------
Xxxxxx X. Xxxxx
3
