DATED 6th FEBRUARY 0000
X X X X X X X:
IMO INDUSTRIES (UK) LTD
- and -
XXXXX XXXXX
SEVERANCE AGREEMENT
THIS AGREEMENT dated this 6th day of February 1997
BETWEEN
IMO INDUSTRIES (UK) LIMITED, a company registered in
England, whose registered office is at Xxxxxxxxxxxx
Xxxxx, 00 Xxxxxxxxxx Xxxxxx, Xxxxxx XX0X 0XX ("the
Company")
and
XXXXX XXXXX of "The Hyde", Xxxxxxxxxxxx Xxxx, Xxxxxxxxx,
Xxxxxxxxxxx, Xxxxx XX0 0XX ("the Executive")
IT IS AGREED as follows:
1. Termination
The employment of the Executive with the Company and all
Associated Companies terminated by reason of redundancy on 31
December 1996 ("the Termination Date"). The Executive
confirms that he has received all salary and holiday pay which
has accrued due up to and including the Termination Date. The
Executive shall also receive following termination a statutory
redundancy payment of 6,300.00 (Six Thousand, Three Hundred
Pounds).
2. Expenses
The Company shall reimburse the Executive for all business
expenses properly and reasonably incurred by him up to and
including the Termination Date, subject to his compliance with
the Company's rules and procedures relating to expenses and
the production of satisfactory VAT receipts.
3. Management Incentive Compensation Program
The Executive shall be a full year participant in the IMO
Management Incentive Compensation Program for 1996. Any bonus
awarded will be paid at the normal due date for such
payment(s), less usual deductions. The fact that the
Executive's employment has terminated will not be a factor in
determining or calculating any bonus payable under the said
Program and the performance of the IMO Industries group (being
the Associated Companies) will be taken into account in
determining the amount of any bonus. The amount of any such
bonus paid under the said Program will be included in the
Executive's pensionable earnings from the Company.
4. Termination Payment
The Company shall on its own behalf and on behalf of all
Associated Companies, without admission of any liability, make
a termination payment to the Executive in the sum of
146,000.00 (One Hundred and Forty Six Thousand Pounds) as
compensation for loss of employment in respect of possible
claims of the type referred to in Clause 10 below, less tax in
accordance with Clause 15 below, such payment to be made
within 5 working days after the date of this Agreement.
5. Pension
5.1. The Company will, by way of further compensation for
possible claims of the type referred to in Clause 10
below, but without any admission of liability, procure
that the Trustees of the Xxxxx Controls Ltd Pension and
Life Assurance Plan ("the Plan") will enhance the
Executive's pension benefits under the Plan to provide
the Executive, on retirement on the Termination Date,
with an annual pension (prior to any commutation of
pension to provide a lump sum or any surrender of
pension to provide additional dependants' benefits, and
subject to Inland Revenue maximum benefit limits) of not
less than 108,000 (One Hundred and Eight Thousand Pounds),
and increasing in accordance with the rules of the Plan.
Benefits of those claiming under the Executive ("Dependants")
will be calculated accordingly. In calculating the pension of
108,000 (One Hundred and Eight Thousand Pounds) payable to the
Executive the Trustees shall be entitled to deduct the US benefit,
currently valued at US $26,508 per annum (15,490 Pounds applying an
exchange rate of 1 Pound = US $1.7113), which is payable to the
Executive under the Retirement Plan for Salaried US Employees of
IMO Industries Inc. and affiliates ("the US Plan"). A
deduction shall be applied on the same principles to any
benefits payable to the Dependant in respect of any US
benefit payable to the Dependant under the US Plan. The
additional cost to fund the enhanced benefits, as
determined by the Plan Actuaries, will be funded by the
Company.
5.2. If the Trustees of the Plan pay a pension either to the
Executive or to his Dependants which is less than the
relevant sum calculated in accordance with Clause 5.1
above, the Company will pay any deficiency to the
Executive or the Dependant (as appropriate) within seven
days of being notified of such shortfall.
5.3. For the avoidance of doubt, the total figure of 108,000 (One
Hundred and Eight Thousand Pounds) referred to in Clause
5.1 above does not include any pension to which the Executive
is entitled as a result of service with a previous, non-IMO
employer (currently estimated to be 7,593.38 Pounds per annum)
which the Executive will receive in addition.
6. Stock Options
The Company shall, by way of further compensation for possible
claims of the type referred to in Clause 10 below, but without
any admission of liability, procure that, subject to the rules
of the IMO Industries Inc. Equity Incentive Plan for Key
Employees, the Executive shall receive accelerated vesting of
all options granted to him under the said Plan, effective on
the Termination Date and exercisable within three years
thereafter, pursuant to Section (a)(6)(B)(iii) of the Plan.
7. Insurances
The Company will until 20 January 1999 continue to provide the
Executive with:
7.1. Life assurance on the terms set out for Executive
Members in the Deed of Amendment of the Xxxxx Controls
Limited Pension and Life Assurance Plan ("the Plan")
dated 9 January 1996. For this purpose, the amount of
the Executive's annual basic salary will be treated as
155,500 (One Hundred Fifty Five Thousand Five Hundred Pounds),
and the amount of bonus payment will be that he receives for
the Plan Year ended 30 June 1997.
7.2. Private medical insurance cover.
Both benefits will be provided on terms no less favourable
than those which applied to the Executive immediately prior to
the Termination Date, PROVIDED ALWAYS that any subsequent
changes to either or both of such benefits applicable to all
Xxxxx executives in the UK shall apply equally to the
Executive.
8. Executive Payments
The fees of Xxxxxx Xxxxxxxx for tax services to the Executive
will be paid by the Company to the extent that those fees,
together with any other payments made to the Executive under
the discretionary Executive Payments Scheme by the Company for
1996, do not exceed US $10,000 (excluding VAT).
9. Legal Costs
The Company shall pay the Executive's reasonable legal costs,
inclusive of minor disbursements and VAT, provided that:
9.1. The Executive's solicitor provides the Company with
written confirmation that such legal costs were incurred
solely in advising the Executive regarding the
termination of his employment and the preparation of
this Agreement; and
9.2. payment is made by the Company directly to the
Executive's solicitor against receipt of a copy of an
invoice from the Executive's solicitor addressed to the
Executive.
10. Settlement and Waiver
10.1. The Executive accepts the sums and benefits to be
provided to him under the above Clauses of this
Agreement in full and final settlement of all claims and
rights of action (whether under statute, common law or
otherwise) in any jurisdiction in the world (including
but not limited to a claim for breach of contract,
unfair dismissal, wrongful dismissal or any other claim
which could be brought in the English Courts or
Industrial Tribunals pursuant to common law or the
Employment Rights Xxx 0000, the Sex Discrimination Xxx
0000, the Equal Pay Xxx 0000, Article 119 of the Treaty
of Rome, the Race Relations Xxx 0000 and the Disability
Discrimination Act 1995) which the Executive has or may
have against the Company or any Associated Company, its
or their officers or employees or shareholders, arising
from or connected with the Executive's employment or
holding of any office with the Company or any Associated
Company, the termination thereof, or any other matter
concerning the Company or any Associated Company
PROVIDED ALWAYS that this Clause 10 shall not apply to
or detract from any Company pension rights or pension
benefits which have accrued to the Executive up to the
Termination Date. The Executive hereby agrees that,
except for the sums and benefits referred to in this
Agreement, no other sums or benefits are due to him from
the Company or any Associated Company.
10.2. The Company confirms that it presently knows of no
existing or potential claims which the Company or any
Associated Company, their respective officers or
employees (or any of them), may have against the
Executive arising out of or in connection with his
employment or directorship of the Company or any
Associated Company (as the case may be), the termination
of such employment or directorship, or otherwise
howsoever.
11. Office Holdings and Nominee Shareholdings
The Executive shall, contemporaneously with the signing of
this Agreement :
11.1. resign in writing from all directorships and other
offices which he holds with the Company or any
Associated Company, as listed in Schedule 1 hereto, in
the form set out in the draft letter attached in
Schedule 2 hereto, such resignations taking effect from
the Termination Date or such earlier date as the Company
may have requested;
11.2. do all things necessary to transfer to the Company or to
any person whom it shall nominate with immediate effect,
his absolute, beneficial or any other interest in any
shares of the Company or any Associated Company which he
holds as a nominee, such transfer to be effected for nil
consideration and without any fee (including but not
limited to the signing of stock transfer forms and the
delivery up of share certificates and/or indemnities
relating thereto if required by the Company).
12. Company Property
The Executive hereby confirms that he has returned to the
Company all property (including but not limited to documents
and software, credit cards, keys and passes) belonging to it
or any Associated Company which has been in the Executive's
possession or under his control. Documents and software shall
include but not be limited to correspondence, files, reports,
minutes, plans, records, surveys, diagrams, computer
print-outs, floppy disks, manuals, customer documentation or
any other medium for storing information. The Executive's
obligations under this Clause 12 shall be deemed to include
the return of all copies, drafts, reproductions, notes,
extracts or summaries (howsoever made) of the aforementioned
documents and software.
13. Post-Termination Obligations
In consideration of the payment by the Company to the
Executive of 2,000.00 (Two Thousand Pounds), to be made
within 5 working days after the date of this Agreement, less
such tax contributions as the Company is required by law to
deduct, the Executive hereby agrees and undertakes:-
13.1. not to divulge or make use of (whether directly or
indirectly and whether for his own or another's benefit
or purposes) any trade secrets or confidential
information (including but not limited to business
plans, technical data, existing and potential projects,
financial information dealings and plans, customer
information, prices, sales specifications and
information, business developments and plans, research
plans or reports, sales or marketing programmes or
policies or plans, past and proposed business dealings
or transactions) belonging to or which relate to the
affairs of the Company or any Associated Company, or any
document marked "Confidential", or any information which
the Executive has been told is "Confidential" or which
he might reasonably expect the Company would regard as
"Confidential", or information which has been given in
confidence to the Company or any Associated Company by a
third party. This obligation shall apply from the
Termination Date and without limitation in time, but
shall not apply to any information in the public domain
other than by way of unauthorised disclosure whether by
the Executive or another person;
13.2. that he will, provided his responsibilities in relation
to any other employment or appointment are not
materially prejudiced, on the request of the Company or
any Associated Company:-
13.2.1. reasonably co-operate with it or them in assisting
with and/or answering any queries related to work
matters in which he was involved for the Company or the
IMO Industries group of companies generally; and/or
13.2.2. assist it or them in any threatened or actual
litigation concerning it or them where he has in his
possession or knowledge any facts or other matters which
the Company or any Associated Company reasonably
considers is relevant to such legal proceedings
(including but not limited to giving
statements/affidavits, meeting with their legal and
other professional advisors and attending any legal
hearing),
PROVIDED ALWAYS that the Company or the relevant
Associated Company shall reimburse the Executive for
reasonable expenses properly incurred by him in giving
such assistance, as are agreed by the Company;
13.3. not to make or publish, or cause to be made or
published, any derogatory or critical comments or
statements (whether orally or in writing) about the
Company or any Associated Company or their products or
respective officers or employees;
13.4. not to disclose or publish, directly or indirectly, the
existence or contents of this Agreement to any third
party, except to his spouse, professional advisers, the
Inland Revenue or otherwise as required by law, PROVIDED
ALWAYS that disclosure to his spouse and professional
advisers shall be on terms that they agree to keep the
same confidential; and
13.5. not to make, or cause to be made, any statement or
comments (whether orally or in writing) either to
employees of the Company or any Associated Company or to
the press or other public or trade media, concerning the
termination of the Executive's employment with the
Company or his resignation from any directorships or
other offices with the Company or any Associated Company
without the prior written consent of the Company as to
the contents thereof.
14. Statements and References
14.1. The Company hereby provides reciprocal undertakings to
the Executive in respect of the obligations referred to
in Clauses 13.3, 13.4 and 13.5 above. Further, the
Company will use reasonable endeavours to ensure the
compliance of its officers and employees with the said
obligations.
14.2. The Company shall provide to any prospective employers
of the Executive on request an excellent reference
concerning the Executive's employment with the Company
and the IMO Industries group of companies. Requests for
such references should be addressed in the first
instance to the Finance Director of the Company or
alternatively to the Senior Vice-President, Human
Resources of IMO Industries Inc in Lawrenceville, New
Jersey, USA. Any reference given orally will be
consistent with the terms and spirit of any written
reference provided pursuant to this Clause 14.2.
15. Tax
The parties hereto believe that the first 30,000.00 (Thirty
Thousand Pounds) in value of the termination compensation
payment and benefits provided, or to be provided, to the
Executive pursuant to this Agreement are exempt from UK tax
and national insurance liability, and that any tax deducted by
the Company from the excess in value over 30,000 (Thirty Thousand
Pounds) may be deducted at source at the standard rate of 24% with
the Executive accounting to the Inland Revenue for the balance of
tax due based on his marginal rate.
16. Associated Companies
For the purposes of this Agreement:
16.1. An "Associated Company" includes any firm, company,
business entity or other organisation:
16.1.1. which is directly or indirectly controlled
by the Company; or
16.1.2. which directly or indirectly controls the
Company; or
16.1.3. which is directly or indirectly controlled
by a third party who also directly or indirectly
controls the Company; or
16.1.4. of which the Company or any Associated
Companies referred to in sub-clauses 16.1.1 to
16.1.3 above holds 20% or more of the issued share
capital; or
16.1.5. of which the Company or any Associated
Company is a partner.
16.2. All references in this Agreement and the Schedule
attached hereto to the Company or any Associated
Companies shall include any successor in title or assign
of the Company or any of the Associated Companies.
17. Severability
The various provisions and sub-provisions of this Agreement
are severable, and if any provision or identifiable part
thereof is held to be unenforceable by any court of competent
jurisdiction then such unenforceability shall not affect the
enforceability of the remaining provisions or identifiable
parts thereof in this Agreement.
18. Legal Advice
18.1. The Executive acknowledges that he has received
independent legal advice from a qualified lawyer as to
the terms and effect of this Agreement and in particular
its effect on his ability to pursue his rights before an
Industrial Tribunal. The qualified lawyer who has so
advised the Executive is Xxxxxxxxxxx X Xxxxxx of
Eversheds, Xxxxxx XX0 and he is a Solicitor of the
Supreme Court of England and Wales.
18.2. The Executive further confirms that he was advised by
the qualified lawyer referred to in Clause 18.1 above
that there is in force, and was at the time the advice
referred to above was received, a policy of professional
indemnity insurance covering the risk of claims by the
Executive in respect of loss arising in consequence of
that advice.
18.3. The qualified lawyer referred to in Clause 18.1 above
will, concurrent with the signing of this Agreement,
provide the Company with a letter in the form attached
hereto as Schedule 3.
18.4. It is agreed by the parties that the conditions
regulating Compromise Agreements contained in section
203 of the Employment Rights Xxx 0000, section 77(4) of
the Sex Discrimination Xxx 0000, section 72(4) of the
Race Relations Xxx 0000 and section 9 of the Disability
Discrimination Act 1995 are intended to be and have been
satisfied by this Severance Agreement.
19. Entire Agreement
The terms of this Agreement constitute the entire agreement
and understanding between the parties hereto, and supersede
and replace all prior negotiations, agreements, arrangements
or understandings (whether implied or expressed, orally or in
writing) concerning that subject-matter hereof, all of which
are hereby treated as terminated by mutual consent.
20. Governing Law
This Agreement is governed by English Law, and the parties
hereby submit to the exclusive jurisdiction of the English
Courts.
21. Headings
Headings are inserted for convenience only and shall not
affect the construction of this Agreement.
SIGNED by or on behalf of the parties on the date first above
written :
/s/ X.X. Xxxx
for and on behalf of
IMO INDUSTRIES (UK) LIMITED
/s/ X. Xxxxx
XXXXX XXXXX
