1
Exhibit 10(xiii)
RETENTION AGREEMENT
This Agreement is made and entered into at Willoughby, Ohio by and
among Figgie International Inc., a Delaware corporation (the "Company") and
Xxxxxx X. Xxxxxxx (the "Executive") as of this 20th day of March, 1996.
WHEREAS, the Executive has been and continues to serve the Company as
the General Counsel; and
WHEREAS, the Company has determined to explore and evaluate strategic
alternatives to enhance stockholder value and such alternatives may include a
merger, consolidation or a sale of a portion or all of the Company; and
WHEREAS, the Company has determined that it is in its and its
stockholders best interests to assure that the Company will have the continued
dedication and service of the Executive during the term of this Agreement; and
WHEREAS, the Company has determined that the best way to assure that
the Company will have the continued service and dedication of the Executive is
to continue his employment as "employment at will" but to provide incentives
for him to remain an employee of the Company subject to the terms hereof;
NOW THEREFORE, the Executive and the Company agree as follows:
1. Employment At Will
The Company hereby agrees to continue the Executive in its employ and
the Executive agrees to remain in such employ as an employment at will
employee of the Company. Subject to the terms and conditions of this
Agreement, the Company retains the right to terminate the services of the
Executive at any time without cause and the Executive retains the right to
terminate his services for the Company at any time in his sole discretion.
2
2. Salary and Benefits
The continued service bonus provided for in this Agreement is intended
to be in addition to and not in lieu of any and all other benefits and
compensation which the Executive is currently receiving as an employee of the
Company. Accordingly, it is intended that the provisions hereof may have the
affect of increasing any such benefits to which the Executive might otherwise
be entitled pursuant to the Company's benefit plans or programs and may affect
the way the provisions under which such plans or programs or their related
benefits may be calculated or administered.
3. Continued Service Bonus
Unless this Agreement is earlier terminated pursuant to Paragraphs
7(a), (b), (d) or (e) hereof, effective on the earlier of (i) the Release Date
(as hereinafter defined); or (ii) the execution of an agreement for a merger,
consolidation, sale or divestiture of substantially all of the assets of any
one of the Interstate Electronics, Snorkel, Xxxxx or Xxxxxx Divisions of the
Company and as a result of such merger, consolidation, sale or divestiture,
the Board of Directors of the Company declares a dividend payable to the
shareholders (the "Effective Date"), then the Company will:
(a) grant the Executive the right to purchase 2,550 shares of common
stock pursuant to and in accordance with the 1993 Restricted
Stock Purchase Plan for Employees (the "RSPP"); and
(b) shall cause all options previously granted to the Executive
pursuant to the Key Employees' Stock Option Plan (the "Stock
Option Plan") to become immediately exercisable in full and shall
remain fully exercisable until the date of expiration of the
option.
3
4. Additional Service Bonus
Unless this Agreement is earlier terminated pursuant to Paragraphs
7(a), (b), (d) or (e) hereof, effective on the earlier of the (i) the
execution of an agreement for a merger, consolidation, sale or divestiture of
substantially all of the assets of the Company; or (ii) if the Company shall
make a significant negative change in the nature or scope of the authorities,
powers, functions or duties of the Executive and the Executive terminates his
employment within three months of such change (either being the "Release
Date"), the Company will:
(a) waive its right to repurchase any of the shares previously
purchased by the Executive pursuant to the RSPP; and
(b) make a lump sum payment of the amount due the Executive pursuant
to Section 2.4 of that certain Management Agreement by and
between the Company and the Executive dated February 1, 1996 (the
"Management Agreement") unless the Executive elects to receive
monthly payments in accordance with the Management Agreement. At
any time after the Release Date and upon written notice to the
Company, the Executive may elect to receive a lump payment of
whatever monthly payments are then remaining; and
(c) make a lump sum payment to the Executive, net of taxes, in an
amount equal to 12 months of the monthly car allowance then being
received by the Executive, unless the Executive elects to receive
12 consecutive monthly payments. At any time after the Release
Date and upon written notice to the Company, the Executive may
elect to receive a lump sum payment ofwhatever monthly payments
are then remaining.
4
5. Additional Bonus Considerations
In addition to the continued service bonus, the Executive will also be
entitledto receive on the Release Date those presently unpaid installments, if
any, of all bonuses previously awarded to the Executive pursuant to the
Compensation Plan forExecutives (the "Plan"). The Executive will also be
considered as a possiblerecipient of a bonus under such Plan with respect to
his 1996 performance and such consideration by the Management Development and
Compensation Committee of the Board of Directors will be made, and the payment
of such bonus shall be made to the Executive on the Release Date. The Company
in its sole discretion may also award to the Executive whatever additional
bonus it deems desirable taking into consideration the contribution which the
Executive makes toward the successful completion of a merger, consolidation or
the sale of a part of or all of the Company; and if awarded, will be paid to
the Executive on the Release Date.
6. Miscellaneous Benefits
It is the desire and intent of the Company to provide to the Executive
the following additional miscellaneous benefits at no cost to the Executive:
(a) tax planning and/or consultation with respect to the benefit
granted hereunder pursuant to a program initiated by the Company
to provide accounting or legal services;
(b) assistance in obtaining financing for the purchase of the
Executive's stock options granted pursuant to the Stock Option
Plan; and
(c) additional consideration to cover the tax implications should the
benefit hereunder trigger an excise tax.
5
7. Termination of Agreement
This Agreement will continue in full force and effect from the date
hereof until the earliest of:
a. the death of the Executive,
b. the determination by the Company upon reasonable medical evidence
that the Executive due to disability is no longer able to
effectively perform the customary duties of his position,
c. the completion of any payments to the Executive in accordance
with the terms and conditions contained herein,
d. the termination of the employment of the Executive for any of the
following reasons: (i) the Executive's willful failure to
perform his duties under this Agreement; (ii) conviction of a
felony; or (iii) repeated and excessive use of alcohol, drugs
and/or any other intoxicating or controlled substance,
e. The termination of the employment of the Executive without cause
by the Executive,
f. May 31, 1997.
Upon the termination of this Agreement, all rights and obligations of
theExecutive and the Company will terminate and the provisions hereof will be
of no further force or effect, except that the Company will continue even
after such termination to be obligated to make any payments provided for in
this Agreement and which were previously earned by the Executive while this
Agreement was in effect.
6
8. Successors
This Agreement is personal to the Executive and may not be assigned by
him. 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.
9. Modification
This Agreement will not be varied, altered, modified, canceled,
changed or in any way amended except by the mutual agreement of the Executive
and the Company set forth in a written instrument executed by them or their
respective legal representatives.
00.Xxx Withholding
The Company may withhold from any amounts payable under this Agreement
all federal, state, city or other taxes as may be required by law or any
governmental regulation or ruling.
11.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.
12.Entire Agreement
This Agreement and the Management Agreement supersede any prior
agreements or understandings oral or written between the Executive and the
Company pertaining to the subject matter hereof and constitutes the entire
agreement between them with respect thereto.
Figgie International Inc. Executive:
By: /s/ /s/
Xxxxxxx X. Xxxxxxx Xxxxxx X. Xxxxxxx
