Exhibit (10)(b)
EMPLOYMENT AGREEMENT
THIS EMPLOYMENT AGREEMENT (this "Agreement") is entered
into as of this 19th day of September, 1995, between SUNDSTRAND
CORPORATION, a Delaware corporation (the "Company"), and Xxx X.
X'Xxxx ("Executive").
WHEREAS, Executive is employed as Chairman of the Board
and Chief Executive Officer of the Company and the Company
desires to assure the benefits of the Executive's future services
as Chairman of the Board, and Executive is willing to commit to
render such services, upon the terms and conditions set forth
below.
NOW, THEREFORE, in consideration of the premises and
mutual covenants contained herein, the parties have agreed as
follows:
1. EMPLOYMENT. The Company agrees to employ Executive
as Chairman of the Board, and Executive agrees to serve the
Company, upon the terms and conditions and for the period of
employment hereinafter set forth. Throughout the Employment
Period (as hereinafter defined), unless otherwise agreed in
writing by Executive and the Company, the Company shall neither
demote Executive nor assign to Executive any duties or
responsibilities that are inconsistent with his position as
Chairman of the Board and the duties, responsibilities and status
of such position.
2. EMPLOYMENT PERIOD. The term of the Executive's
employment under this Agreement shall commence as of October 1,
1995, and, subject to earlier termination of Executive's
employment and termination of this Agreement as provided in
Section 7, shall expire at the close of business on the date of
the Annual Meeting of Stockholders in 1997 (the "Employment
Period").
3. COMPENSATION. Throughout the Employment Period,
the Company shall pay or provide Executive with the following,
and Executive shall accept the same, as compensation for the
performance of his undertakings and the services to be rendered
by him under this Agreement.
(a) A salary payable not less often than bi-weekly, at
a rate not less than the highest salary rate he has
attained on an annualized basis but in no event
less than $650,000 per annum.
(b) Participation in the Company's Officer Incentive
Compensation Plan for the 1995 through 1997 plan
years, provided that for any plan year the bonus
amount will be prorated to reflect the actual
period of employment. Such bonus shall be
determined based upon the opportunity level under
the Plan for the Chairman of the Board and the
performance elements approved by the Compensation
Committee for the 1994 plan year.
(c) Participation in the Sundstrand Corporation Stock
Incentive Plan with respect to non-qualified stock
options granted thereunder.
(d) Participation in the following employee benefit
plans, policies, practices and arrangements
maintained by the Company in which Executive is
presently eligible to participate:
- Sundstrand Corporation Disability Plan
- Accidental Death Insurance
- Executive and Spouse Physical
- Sundstrand Corporation Group Life Insurance
Plan
- Use of Company Airplane
- Financial Services
- Snow Plowing and Other Personal Services
Such plans are hereinafter collectively referred to
as the "Benefit Plans". In the event Executive at
any time during the Employment Period is not
eligible to participate in any Benefit Plan for
which Executive was previously eligible or the
Company terminates or materially amends any Benefit
Plan, the Company shall provide to Executive
benefits comparable with those benefits that would
have been received by Executive if Executive
continued to participate in such Plans.
(e) Paid vacations in accordance with the Company's
vacation policy as in effect from time to time, and
all paid holidays given by the Company to its
executive officers.
4. EXPENSES. During the Employment Period, the
Company shall promptly pay or reimburse Executive for all
reasonable expenses incurred by Executive in the performance of
duties hereunder.
5. CONDITIONS OF EMPLOYMENT. Throughout the
Employment Period:
(a) The Company shall not require or assign duties to
Executive which would require him to move the
location of his principal business office or his
principal place of residence outside the City of
Rockford or the County of Winnebago, Illinois (the
"Rockford Area");
(b) The Company shall not require or assign duties to
Executive which would require him to spend more
than forty-five (45) normal working days away from
the Rockford Area during any consecutive
twelve-month period;
(c) The Company shall provide an office to Executive,
the location and furnishings of which shall be
equivalent to the offices provided to him on the
date of this Agreement; and
(d) The Company shall provide secretarial services and
other administrative services to Executive which
shall be equivalent to the secretarial services and
other administrative services provided to him on
the date of this Agreement.
6. CONTINUATION OF BENEFITS. If the Company shall
fail to observe or perform any covenant or agreement contained in
this Agreement to be observed or performed by the Company, then
Executive shall, until such time as Executive's Employment Period
hereunder would otherwise terminate pursuant to the provisions of
Section 2 or Section 7, continue to receive all benefits which
the Company has hereinabove in Section 3 agreed to pay to and
provide for Executive, in each case in the amounts and at the
times provided for in Section 3. The parties agree that, in such
event, such payments and benefits shall be deemed to constitute
liquidated damages for the Company's breach of this Agreement.
7. TERMINATION. This Agreement shall terminate upon
the following circumstances:
(a) The date of death of Executive during the
Employment Period; provided, however, that
Executive's estate, heirs and beneficiaries shall
be paid the full amount of Executive's salary
through the end of the sixth month following the
month in which his death occurs, but in no event
for any period thereafter, and all other benefits
which would be applicable to Executive or
Executive's estate, heirs and beneficiaries under
the Company's Benefit Plans in which Executive
participates as in effect on the date of
Executive's death;
(b) Following conviction of Executive of a felony, the
date as of which Executive's right to file an
appeal after conviction has expired, or if
Executive files an appeal after conviction, the
date as of which the appellate court fails to
reverse the conviction, and the Company shall pay
Executive his full salary through such date of
termination and the Company shall have no further
obligations to Executive under this Agreement
except with respect to any rights Executive might
otherwise have under the Company's Benefit plans as
in effect on the date of termination of Executive;
(c) The date as of which the Company elects to
terminate this Agreement in accordance with Section
10.
8. COVENANT NOT TO COMPETE. Without the consent of
the Company, Executive shall not at any time during the term of
this Agreement, or for a period of two years thereafter,
undertake employment as an owner, director, officer, employee or
consultant with any business entity directly engaged in the
manufacture and/or sale of products competitive with any material
product or product line of the Company; provided, however, that
Executive shall not be deemed to have breached this undertaking
if his sole relation with such entity consists of his holding,
directly or indirectly, an equity interest in such entity not
greater than two percent (2%) of such entity's outstanding equity
interest. For purposes hereof the term "material product or
product line of the Company" shall mean any product or product
line of the Company, the gross sales of which during any calendar
year during the five (5) year period preceding the Executive's
undertaking such employment were at least $50 million.
9. DISCLOSURE OF CONFIDENTIAL INFORMATION. Without
the consent of the Company, Executive shall not at any time
during the term of this Agreement, or for a period of two years
thereafter, disclose to any other business entity confidential
information concerning the Company or the Company's trade secrets
of which Executive has gained knowledge during his employment
with the Company.
10. BREACH OF SECTION 8 OR SECTION 9. In the event of
a breach by Executive of the provisions of Section 8 or Section 9
of this Agreement, the Company may terminate this Agreement under
Section 7(c), but only if the Company complies with the following
provisions:
(a) The Company shall provide Executive with written
notice of its belief that a breach of Section 8 or
Section 9 of this Agreement has occurred and shall
afford Executive sixty (60) days or such longer
period as the Company may determine to cure the
alleged breach.
(b) In the event Executive does not cure the breach,
the Company shall be required to institute a
judicial proceeding to determine whether a breach
of Section 8 or Section 9 of this Agreement has
occurred and Executive has not cured such breach.
(c) This Agreement may then be terminated only upon a
judicial determination that Executive has breached
the provisions of Section 8 or Section 9 and has
failed to cure such breach; provided, however, that
this Agreement may not be terminated until either
all appellate proceedings have been exhausted or
the time within which Executive may appeal an
adverse ruling has expired.
11. LITIGATION EXPENSES. The Company shall pay to
Executive all out-of-pocket expenses, including attorneys' fees,
incurred by Executive in connection with any claim or legal
action or proceeding brought under or involving this Agreement,
whether brought by Executive or by or on behalf of the Company or
by another party; provided, however, the Company shall not be
obligated to pay to Executive out-of-pocket expenses, including
attorneys' fees, incurred by Executive in any claim or legal
action or proceeding involving Section 8 or Section 9 of this
Agreement if Company prevails in such litigation.
12. NOTICES. Notice given pursuant to this Agreement
shall be in writing and shall be deemed given when received and
if to the Company, to the Board of Directors of Sundstrand
Corporation, Attention: Vice President and General Counsel and
Secretary of the Company.
13. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon and shall inure to the benefit of the Company, its
successors and assigns and the Company shall require any
successor or assignee to expressly assume and agree to perform
this Agreement in the same manner and to the same extent that the
Company would be required to perform it if no such succession or
assignment had taken place. The term "the Company" as used
herein shall include such successors and assigns. The term
"successors and assigns" as used herein shall mean a corporation
or other entity acquiring all or substantially all the assets and
business of the Company (including this Agreement) whether by
operation of law or otherwise.
Neither this Agreement nor any right or interest
hereunder shall be assignable or transferable by Executive, his
beneficiaries or legal representatives, except by will or by the
laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by Executive's legal
representative.
14. WAIVER, MODIFICATION AND INTERPRETATION. No
provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is
agreed to in a writing signed by Executive and an appropriate
officer of the Company empowered to sign same by the Board of
Directors of the Company. No waiver by either party at any time
of any breach by the other party of, or compliance with, any
condition or provision of this Agreement to be performed by the
other party shall be deemed a waiver of similar or dissimilar
provisions or conditions at the same time or at any prior or
subsequent time. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of
the State of Illinois. The invalidity or unenforceability of any
provision of this Agreement shall not affect the validity or
enforceability of any other provision of this Agreement.
15. TERMINATION OF PRIOR EMPLOYMENT AGREEMENT;
CONSULTING AGREEMENT. Effective as of the date hereof, the
Employment Agreement between the Company and Executive entered
into as of October 3, 1994, is terminated and no further payments
will be made to Executive thereunder. Executive shall, upon
termination of the Employment Period, other than as a result of
termination pursuant to Section 7, and provided Executive is not
physically or mentally incapacitated, become a consultant to the
President and Chief Executive Officer pursuant to a Consulting
Agreement in the form of Exhibit A attached hereto, which
Executive and the Company shall enter into.
16. HEADINGS. The headings contained herein are for
reference purposes only and shall not in any way affect the
meaning or interpretation of any provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first written above.
SUNDSTRAND CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
---------------------------
Vice President and General
Counsel and Secretary
By: /s/ Xxx X. X'Xxxx
--------------------------
Executive
Exhibit A
CONSULTING AGREEMENT
This Agreement is made as of the 15th day of April,
1997, by and between Sundstrand Corporation, a Delaware
corporation (the "Company") and Xxx X. X'Xxxx ("Consultant").
WHEREAS, Consultant is the Chairman of the Board of
the Company;
WHEREAS, Consultant's employment as Chairman of the
Board will terminate effective as of the date of this Agreement,
and the Board of Directors wishes him to remain as a consultant
to assist the President and Chief Executive Officer, and
Consultant is willing to render such services upon the terms and
conditions set forth below.
NOW, THEREFORE, in consideration of the premises
and the mutual promises contained herein, and other good and
valuable consideration, the receipt and sufficiency of which is
hereby acknowledged, the parties agree as follows:
1. DUTIES. During the Consultation Period (as defined
below), Consultant shall provide the Chairman, President and
Chief Executive Officer of the Company with his best advice and
assistance on such matters as the Chairman, President and Chief
Executive Officer shall request, including relations with the
Company's investors and identification and evaluation of
potential acquisition candidates. The Company will not have the
right to direct or supervise the manner in which Consultant
performs services under this Consulting Agreement.
2. TERM. The term of this Agreement shall commence on
the date hereof and shall expire, subject to earlier termination
as hereinafter provided, on April 14, 2000 (the "Consultation
Period"). This Agreement may be extended or renewed upon mutual
agreement of the parties.
3. COMPENSATION. The Company shall pay Consultant the
following, and Consultant shall accept the same, as compensation
for the performance of his undertakings and the services to be
rendered by him under this Agreement: An annual fee of $360,000,
payable in installments to be paid not less often than bi-weekly.
4. EMPLOYEE BENEFITS. Except as otherwise expressly
provided herein, employee benefits enjoyed by the Consultant
during his employment by the Company will be terminated, except
to the extent that such benefits are available to directors of
the Company or to other retired employees of the Company.
5. EXPENSES. Upon submission of appropriate invoices
or vouchers, the Company shall promptly pay or reimburse
Consultant for all reasonable expenses incurred by Consultant
during the Consultation Period in the performance of his duties
hereunder.
6. CONDITIONS OF CONSULTANT'S PERFORMANCE OF SERVICES.
Throughout the Consultation Period, (a) the Company shall not
require or assign projects to Consultant which would require him
to move the location of his principal business office or his
principal place of residence outside the City of Rockford or the
County of Winnebago, Illinois (the "Rockford Area"), (b) the
Company shall not require or assign projects to Consultant which
would require him to spend more than forty-five (45) normal
working days away from the Rockford Area during any consecutive
twelve-month period, (c) the Company shall provide office,
secretarial and administrative services, which shall be
reasonably satisfactory to Consultant, to assist Consultant in
the performance of his services under this Consulting Agreement.
7. CONTINUATION OF FEES. If the Company shall fail to
observe or perform any covenant or agreement contained in this
Agreement to be observed or performed by the Company, then
Consultant shall, until such time as the Consultation Period
hereunder would otherwise terminate pursuant to the provisions of
Section 2 or Section 8, continue to receive all fees which the
Company has hereinabove in Section 3 agreed to pay to and provide
for Consultant, in each case in the amounts and at the times
provided for in Section 3. The parties agree that, in such
event, such payments shall be deemed to constitute liquidated
damages for the Company's breach of this Agreement, and the
Company agrees that Consultant shall not be required to mitigate
his damages by seeking other employment or otherwise.
8. TERMINATION. This Agreement shall terminate upon
the following circumstances:
(a) The date of death of Consultant during the
Consultation Period; provided, however, that
Consultant's estate, heirs and beneficiaries
shall be entitled to receive the full amount
of his fee for the month in which death
occurs, and the Company shall have no
further obligations to Consultant under this
Agreement;
(b) Following the conviction of Consultant of a
felony, the date as of which Consultant's
right to file an appeal after conviction has
expired, or, if Consultant files an appeal
after conviction, the date as of which the
appellate court fails to reverse the
conviction, and the Company shall pay
Consultant his full fee through such date of
termination and the Company shall have no
further obligations to Consultant under this
Agreement; or
(c) The date as of which the Company elects to
terminate this Agreement in accordance with
Section 12.
9. COVENANT NOT TO COMPETE. Without the consent of
the Company, Consultant shall not at any time during the
Consultation Period undertake employment as an owner, director,
officer, employee or consultant with any business entity directly
engaged in the manufacture and/or sale of products competitive
with any material product or product lines of the Company;
provided, however, that Consultant shall not be deemed to have
breached this undertaking if his sole relation with such entity
consists of his holding, directly or indirectly, an equity
interest in such entity not greater than two percent (2%) of such
entity's outstanding equity interest. For purposes hereof, the
term "material product or product line of the Company" shall mean
any product or product line of the Company the gross sales of
which during any calendar year during the five (5) year period
preceding the Consultant's undertaking such employment were at
least $50 million.
10. DISCLOSURE OF CONFIDENTIAL INFORMATION. Without
the consent of the Company, Consultant shall not at any time
during the Consultation Period disclose to any other business
entity confidential information concerning the Company or the
Company's trade secrets of which Consultant has gained knowledge
during his employment with, or consultation to, the Company.
11. BUSINESS MATERIALS. All written materials, records
and documents made by the Consultant or coming into his
possession concerning the business or affairs of the Company or
any of its affiliates shall be the sole property of the Company
and its affiliates; and, upon the termination of the Consultation
Period or upon the request of the Company at any time, the
Consultant shall promptly deliver the same to the Company.
12. BREACH OF SECTION 9 OR SECTION 10. In the event of
a breach by Consultant of the provisions of Section 9 or Section
10 of this Agreement, the Company may terminate this Agreement
under Section 8(c), but only if the Company complies with the
following provisions:
(a) The Company shall provide Consultant with
written notice of its belief that a breach
of Section 9 or Section 10 of this Agreement
has occurred and shall afford Consultant
sixty (60) days or such longer period as the
Company may determine to cure the alleged
breach.
(b) In the event Consultant does not cure the
breach, the Company shall be required to
institute a judicial proceeding to determine
whether a breach of Section 9 or Section 10
of this Agreement has occurred and
Consultant has not cured such breach.
(c) This Agreement may then be terminated only
upon a judicial determination that
Consultant has breached the provisions of
Section 9 or Section 10 and has failed to
cure such breach; provided, however, that
this Agreement may not be terminated until
either all appellate proceedings have been
exhausted or the time within which
Consultant may appeal an adverse ruling has
expired.
13. LITIGATION EXPENSES. The Company shall pay to
Consultant out-of-pocket expenses, including attorneys' fees,
incurred by Consultant in connection with any claim or legal
action or proceeding brought under or involving this Agreement,
whether brought by Consultant or by or on behalf of the Company
or by another party; provided, however, the Company shall not be
obligated to pay to Consultant out-of-pocket expenses, including
attorneys' fees, incurred by Consultant in any claim or legal
action or proceeding involving Section 9 or Section 10 of this
Agreement if Company prevails in such litigation.
14. INDEPENDENT CONTRACTOR. Nothing contained herein
shall constitute the Consultant an employee or agent of the
Company, but the relationship of the Consultant to the Company
shall be one of an independent contractor.
15. NOTICES. Notices given pursuant to this Agreement
shall be in writing and shall be deemed given when received and
if mailed shall be mailed by United States registered or
certified mail, return receipt requested, addressee only, postage
prepaid if to the Company, to the Board of Directors of
Sundstrand Corporation, Attention: Vice President and General
Counsel and Secretary, X.X. Xxx 0000, 0000 Xxxxxxxx Xxxxxx,
Xxxxxxxx, Xxxxxxxx 00000, or if to Consultant, at 0000 Xxxxxxxx
Xxxx, Xxxxxxxx, Xxxxxxxx 00000, or to such other address as
either party may have previously designated by notice to the
other party given in the foregoing manner.
16. SUCCESSORS. This Agreement may not be assigned by
the Company, and the obligations of the Company provided for in
this Agreement shall be binding legal obligations of any
successor to the Company by purchase, merger, consolidation or
otherwise. This Agreement may not be assigned by Consultant
during his life and, upon his death, will be binding upon and
inure to the benefit of his heirs, legatees and the legal
representatives of his estate.
17. WAIVER, MODIFICATION AND INTERPRETATION. No
provisions of this Agreement may be modified, waived or
discharged unless such waiver, modification or discharge is
agreed to in a writing signed by Consultant and an appropriate
officer of the Company empowered to sign same by the Board. No
waiver by either party at any time of any breach by the other
party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party shall be deemed a
waiver of similar or dissimilar provisions or conditions at the
same time or at any prior subsequent time. The validity,
interpretation, construction and performance of this Agreement
shall be governed by the laws of the State of Illinois. The
invalidity or unenforceability of any provision of this Agreement
shall not affect the validity or enforceability of any other
provision of this Agreement.
18. HEADINGS. The headings contained herein are for
reference purposes only and shall not in any way affect the
meaning or interpretation of any provision of this Agreement.
IN WITNESS WHEREFORE, the parties hereto have
executed this Agreement on the day and year first written above.
SUNDSTRAND CORPORATION
By:
--------------------------
Vice President and General
Counsel and Secretary
By:
--------------------------
Consultant
