EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of December 12, 1995, between
Fluke Corporation, a Washington corporation ("the Company"), and George
M. Winn ("Employee"), and supersedes the employment agreement dated
September 5, 1991.
1. Employment
(a) The Company hereby employs Employee to render services to
the Company in an executive capacity as President and Chief Operating
Officer of the Company. This Agreement is cancelable by action of the
Board upon 3 years notice, unless such employment is sooner terminated
as hereinafter provided. Employee currently serves as a member of the
Company's Board of Directors (the "Board") and the Company commits to
continue nominating Employee for election to the position of Director
during the period of employment under this Agreement.
(b) Employee hereby accepts employment under this Agreement and
agree to the Business, as defined below. For purposes of this
Agreement, "Business" shall mean those activities in which the Company
or any affiliated company (i.e., any corporation or other business
entity, or entities, that now or hereafter directly or indirectly
controls, is controlled by, or is under common control with, the
Company) is permitted to and does engage from time to time during the
period of employment under this Agreement.
(c) The Company through the Board shall retain full direction
and control of the manner, means and methods by which Employee performs
the services for which he is employed hereunder, provided that
Employee's duties and responsibilities shall be of substantially the
same character as, or equivalent to, those performed by a President and
Chief Operating Officer.
2. Compensation
(a) Base Salary - During the period of employment under this
Agreement, Employee shall be paid an annual base salary payable in bi-
weekly installments in an amount equal to the greater of (i) $322,000 or
(ii) such greater amount as the Board may from time to time determine.
Employee's base salary shall be reviewed by the Board at least annually
and will be adjusted as appropriate and consistent with Employee's
position and performance. Nevertheless, if there is a base salary
reduction for all of the Company's other executive officers, Employee's
base salary may be reduced but only in an amount not to exceed the
average percentage reduction that is applied to all the Company's other
executive officers and in no case shall be reduced below $246,000.
(b) Variable Compensation - During the period of employment
under this Agreement, Employee shall be eligible for an annual cash
bonus under a plan or comparable arrangement of equivalent economic
value providing him with a potential bonus of not less than 50% of base
salary in the event that performance standards established by the Board
are met.
(c) Non-Qualified Stock Option Plan - During the period of
employment under this Agreement, Employee shall participate in a Non-
Qualifie Stock Option Plan or comparable arrangement of equivalent
economic value providing him with an annual grant of stock options. The
number of option shares shall be based upon a competitive target range
of shares established through the evaluation of competitive survey data
and may be adjusted by a maximum of plus or minus 50% based upon his
individual contribution to the Company. As of the date of this
Agreement, the current range of competitive stock options for the
Employee is 15,750 - 26,250 shares.
(d) Supplemental Retirement Income and Pre-Retirement Death
Benefit Plan - During the period of employment under this Agreement,
Employee shall participate in the Supplemental Retirement Income and
Pre-Retirement Death Benefit Plan or in a comparable arrangement of
equivalent economic value.
(e) Other Plans - Employee shall be entitled to be granted
benefits under any other incentive or special compensation plans that
are made generally available to the Company's executive officers in
accordance with the terms, conditions and procedures under such plans.
(f) Fringe Benefits - Employee shall be entitled to all fringe
benefits that the Company makes generally available to other executive
officers, from time to time. The current fringe benefits include, by
way of example, the following:
(i) health and dental insurance
(ii) production bonus
(iii) retirement program
- defined benefit plan
- defined contribution plan
(iv) company car
(v) financial planning reimbursement
(vi) physical exam reimbursement
Without in any way limiting the foregoing, it is understood that
the Company shall provide Employee with certain additional benefits in
view of Employee's executive position and his status in the business and
financial community, without regard to whether or not such benefits are
provided to other Employees. The level and nature of the fringe
benefits that are provided shall, in general, be no less than those
benefits in place at the signing of this Agreement.
(g) Business Expense Reimbursement - Employee shall be
reimbursed by the Company for reasonable travel and other business
expenses incurred by Employee in the performance of his duties under
this Agreement in accordance with the general policy of the Company as
set and maintained by the Board.
(h) Net Economic Benefits - Notwithstanding Sections 2(b)
through 2(g), the Board or appropriate Board Committee shall nonetheless
retain complete discretion with respect to the adoption, modification,
termination or substitution of any compensation plans referred to in
such Sections. Benefits provided to Employee under this Agreement shall
not, however, be reduced by the Company except pursuant to Section 2(a)
without compensating adjustments being made so that the same approximate
net economic benefits will be received by the Employee.
(i) Withholding - The Company shall be entitled to withhold from
compensation such amounts on account of payroll taxes, income
taxes and other similar matters as are required to be withheld by
applicable law, rule or regulation of any appropriate governmental
authority.
3. Employee's Business Activities
During the period of employment under this Agreement, Employee may
serve as a member of the board of directors of other companies and
engage in other outside activities of his choice, provided that Employee
provides written notice to the Board of each significant outside
activity prior to engaging in such activity and receives approval of the
Board, which approval shall not be unreasonably withheld. Employee may
not, however, render services to or invest in any business competitive
with any existing or contemplated business of the Company except that
Employee may make personal investments in securities listed on a
national securities exchange or quoted in the Over-the-Counter Market
listing of the Wall Street Journal. A material breach of this Agreement
will be deemed to have occurred if a violation of this Section is not
cured within 30 days after written notification by the Board.
4. Termination by Company
(a) For Cause - Notwithstanding anything herein to the contrary,
the Board without liability may give Notice of Termination (as defined
in Section 10) to Employee for cause at any time. The Company shall not
be liable to Employee for any salary or other sums hereunder which have
not accrued before the Date of Termination (as defined in Section 11).
For purposes of this Agreement, the Company shall have "cause" to
terminate Employee's employment hereunder upon (i) the willful and
continued failure of Employee to substantially perform his duties with
the Company (other than any such failure resulting from Employee's
disability as defined in Section 8), after a written demand for
substantial performance is delivered to Employee by the Board which
specifically identifies the manner in which the Board believes the
Employee has not substantially performed his duties, and provided that
the Company shall provide Employee reasonable opportunity (not less than
two weeks) to cure such conduct, or (ii) the willful engaging by
Employee in gross misconduct materially and demonstrably injurious to
the Company. For purposes of this paragraph, no act, or failure to act,
on Employee's part shall be considered "willful" unless done, or omitted
to be done, by Employee not in good faith and without reasonable belief
that Employee's action or omission was in the best interest of the
Company.
(b) Without Cause - Notwithstanding anything herein to the
contrary, the Board may give Notice of Termination to Employee for any
reason without cause at any time. Employee's sole remedy for such
termination shall be the Severance Benefits set forth in Section 7 of
this Agreement. For the purposes of this Agreement, a termination
without cause shall occur upon any of the following events:
(i) a reduction by the Company of the Employee's
compensation, as defined in Section 2, in a manner not
permitted by Section 2; or
(ii) a material reduction in the level or nature of
Employee's status, title, position, authority or
responsibility as President and Chief Operating
Officer of the Company; or
(iii) the Employee is not elected to serve on the Board of
Directors of the Company; or
(iv) the Company's requirement that the Employee be based
somewhere other than where the Employee's office is
currently located or within a 50 mile radius of such
location; or
(v) the Company's requirement that the Employee travel on
Company business to an extent substantially in excess
of the business travel obligations currently required
by the Company; or
(vi) the Company materially breaches this Agreement; or
(vii) a Change of Control of the Company as defined in
Section 9.
In the case of subparagraphs (i) through (vi), the Employee shall
give the Company written notice specifically identifying the
unsatisfactory nature of such reduction, assignment or breach, and
providing a reasonable opportunity (not to exceed two weeks) for cure.
If no cure shall be effected, Employee may by Notice of Termination
elect to treat such action as a termination without cause. No such
notice is required in the case of subparagraph (vii).
5. Termination by Employee
In the event of Employee's voluntary termination which shall
include retirement pursuant to the Company's retirement program, the
Company shall not be liable to Employee for any salary or other sums
payable hereunder other than those which have accrued before the Date of
Termination except that the following benefits shall be provided as
follows:
(a) Pension Bridge Period - The Company will keep the Employee
on the payroll as a one hour per month employee for a bridging period if
such bridging period, which may not exceed 18 months, allows the
Employee to qualify for early retirement (minimum age 55 and 15 years of
service) or normal retirement (age 65) pursuant to the terms of the
Company's defined benefit Pension Plan.
(b) Health and Dental Coverage - If the Employee can qualify for
early retirement (minimum age 55 and 15 years of service) or normal
retirement (age 65) pursuant to the terms of the Company's defined
benefit Pension Plan at the time of voluntary termination (including the
bridging period if utilized under paragraph (a) above), the Company will
pay the Employee's and Employee spouse's health and dental insurance
coverage until age 65 or until Medicare-eligible, whichever occurs
first. Other qualified dependent health and dental coverage will be
made available to the Employee at Company cost.
(c) Stock Option Choice - The Company will give the Employee the
choice of having all outstanding stock options (i) become immediately
exercisable and have a term of one year in which to exercise such
options, or (ii) remain subject to all of the original terms of the
stock option agreements including the expiration term of the option and
any exercisability limitations.
6. Benefits Coverage Period
The Benefits Coverage Period for purposes of this Agreement shall
be defined as 36 months unless the Board has previously given notice of
cancellation to the Employee pursuant to Section 1(a) in which case the
number of months shall be reduced from 36 months by each whole month
from the date of the notice of cancellation to the Date of Termination.
In no case shall the Benefits Coverage Period be reduced below 12
months.
7. Severance Benefits
In the event of the termination (including death or disability as
defined in Section 8) of Employee's employment hereunder, other than
pursuant to Sections 4(a) or 5, the Company agrees to pay Employee (or
his beneficiary) the Severance Benefits defined in this Section.
Employee has no obligation to mitigate Severance Benefits paid under
this Agreement but if the Employee accepts employment while receiving
Severance Benefits hereunder, any Severance Benefits under Section 7(b)
which exceed one year of annual cash compensation will be reduced by the
actual cash compensation received by Employee from his new employer.
Such repayment of cash compensation by the Employee to the Company would
only relate to cash compensation by the Employee beginning in the
thirteenth month after the Date of Termination during concurrent monthly
periods and ending at the end of the Benefits Coverage Period. No such
reduction is applicable if the termination is pursuant to a Change of
Control.
(a) Variable Compensation - Variable compensation shall be paid
before the Date of Termination in an amount equal to 50% of base salary
as prorated based upon the number of days in the performance period or
periods up to and including the Date of Termination divided by the total
number of days in the performance period or periods.
(b) Cash Compensation - The Company shall pay to the Employee
before the Date of Termination a lump sum amount in cash equal to three
times the Employee's annual cash compensation, unless the Benefits
Coverage Period is less than 36 months in which case the lump sum amount
would be reduced by multiplying such lump sum amount by a fraction in
which the numerator is the Benefits Coverage Period and the denominator
is 36. Annual cash compensation for purposes of this Agreement shall be
the average cash compensation paid to or accrued for the Employee which
is attributable to the last three complete fiscal years prior to the
Date of Termination and would include but is not limited to base salary,
variable compensation and the production bonus.
(c) Non-Qualified Stock Option Plan - Subject to the terms of
any Non-Qualified Stock Option Plan adopted by the Company, Employee
will have the right to exercise any such stock options for the Benefits
Coverage Period. In the case of a Change of Control where the Company
is not the surviving entity, the Employee shall at the Date of
Termination be give the choice to either accept replacement stock
options of the surviving entity or receive a lump sum payment in cash
equal to the gain (the difference between the fair market value of the
stock of the Company at the Date of Termination and the exercise price
of the stock options) as if the Employee had exercised his stock options
at the Date of Termination.
(d) Supplemental Retirement Income and Pre-Retirement Death
Benefit Plan - A full annual contribution shall be made to the
Supplemental Retirement Income and Pre-Retirement Death Benefit Plan or
comparable plan in the year of termination and upon the Employee's
request the full balance in the Employee's account shall be paid in a
lump sum at the Date of Termination.
(e) Fringe Benefits
(i) health, dental, and life insurance - Coverage shall
continue for the Benefits Coverage Period. If the Employee
accepts a job with another company during the Benefits Coverage
Period, the Company may reduce coverage under this subparagraph to
the extent that the Employee is receiving comparable coverages.
Term life insurance comparable to the pre-retirement death benefit
payable under the Supplemental Retirement Income and Pre-
Retirement Death Benefit Plan shall be provided to the Employee
for the Benefits Coverage Period.
(ii) accrued production bonus - The bonus will cease to
accrue as of the Date of Termination. The accrued bonus shall be
paid at the Date of Termination in an amount equal to the same
percentage of base salary utilized in the payment of the
production bonus for the immediately preceding semi-annual
production bonus period as prorated based upon the number of days
in the production bonus period up to and including the Date of
Termination divided by the total number of days in the production
bonus period.
(iii) defined benefit plan - Benefits will cease to accrue
as of the Date of Termination. The defined benefit plan will pay
the accrued benefit pursuant to the terms of the defined benefit
plan document and the Company will pay a lump sum benefit at the
Date of Termination equal to the difference between the lump sum
value of the accrued retirement benefit as of the Date of
Termination and the lump sum value of the accrued retirement
benefit as if the Employee had continued to accrue benefits for
the Benefits Coverage Period, assuming no change in the Employee's
compensation were to occur following the Date of Termination. The
lump sum value of the accrued retirement benefits shall be
computed utilizing the actuarial assumptions and interest rate
assumptions pursuant to the Company's defined benefit pension plan
at the Date of Termination.
(iv)defined contribution plan - Benefits will cease to
accrue as of the Date of Termination. The defined contribution
plan will pay the accrued benefit pursuant to the terms of the
defined contribution plan document and the Company will pay a lump
sum amount at the Date of Termination equal to $500 for each year
or partial year for the Benefits Coverage Period.
(f) Elections - All choices or options for payment must be made in
writing by the Employee and delivered to the Corporate Secretary within
10 days after Notice of Termination.
(g) Escrow - Upon the occurrence of an Anticipated Change in
Control of the Company, and upon Employee's written request, the Company
shall within two business days deposit in an escrow account with a
financial institution reasonably acceptable to Employee (the "Escrow
Agent"), an amount equal to the maximum severance benefits payable by
the Company as a lump sum under this Section 7 (assuming an election in
Section 7(c) to receive a lump sum payment in cash), to hold as security
for the Company's obligations under this Agreement. Employee and the
Company agree to execute the Escrow Agent's standard form of escrow
agreement providing that benefits in the event of any dispute will be
paid in accordance with a determination made under Section 17(b) of this
Agreement. As used in this Agreement, an "Anticipated Change in
Control" shall be deemed to occur if an event takes place which
indicates a reasonable probability that a Change of Control as defined
in Section 9 is likely to occur.
If the Anticipated Change in Control occurs but within a
reasonable time a Change of Control does not take place, the escrowed
funds shall be repaid and released to the Company upon written notice to
the Escrow Agent by the Company and Employee. If a Change of Control
occurs, the Escrow Agent shall immediately pay all the escrowed funds to
the Employee except in the case where the Employee chooses to exercise
his election under Section 7(c) to receive replacement stock options the
escrowed funds representing the lump sum payment in cash of the stock
options shall be returned to the Company.
8. Disability
Termination by the Company of employment based on "Disability"
shall mean termination because of the Employee's absence from duties
with the Company on a full-time basis for one hundred eighty (180)
consecutive days as a result of incapacity due to physical or mental
illness. During any period that the Employee fails to perform his
duties hereunder as a result of incapacity due to physical or mental
illness, he shall continue to receive his full base salary at the rate
then in effect and incentive compensation payable with respect to such
period until his employment is terminated for Disability, provided that,
after such termination, the Employee in addition to the severance
benefits of Section 7 shall be entitled to such other benefits as would
otherwise be due to him under any long-term disability insurance or
other coverage provided by the Company. If the Company so requests, the
Employee shall be examined by a doctor of his choosing and shall submit
to an examination by a doctor of the Company's choosing, and each doctor
shall certify whether the Employee's failure to perform his duties is
due to physical or mental illness. If the doctors of the Employee and
the Company do not agree, then the two doctors shall jointly select a
third doctor whose determination shall be accepted by both parties. All
costs associated with the doctors' certifications shall be borne by the
Company.
9. Change of Control
For purposes of this Agreement, a Change of Control shall be
deemed to occur:
(a) upon the date the Company is informed by receiving a report
on Schedule 13D of the Exchange Act or similar report that any person
(as such term is used in sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended ["the Exchange Act"]), together with
such person's Affiliates and Associates as defined in Rule 12b-2 of the
Exchange Act, is or has become the "beneficial owner" (as defined in
Rule 13d-3 of the Exchange Act; provided, that a person shall not be
deemed to beneficially own securities acquired pursuant to the Employee
Stock Purchase Plan of the Company or other plans generally applicable
to employees, officers or Directors of the Company), directly or
indirectly, of securities of the Company representing 25% or more of the
combined voting power of the Company's then outstanding securities,
except that there will not be a Change of Control as the result of an
acquisition of securities by the Company, which by reducing the number
of shares outstanding, increases the proportionate number of shares
beneficially owned by any person to 25% or more of the securities of the
Company then outstanding; provided, however, that if a person becomes
the beneficial owner of 25% or more of the securities of the Company
then outstanding by reason of share purchases by the Company and shall,
after such share purchases by the Company, become the beneficial owner
of any additional securities of the Company, then a Change of Control
will occur unless such person disposes of such additional securities of
the Company within 10 days, or
(b)upon the first purchase of the Company's Common Stock pursuant
to a tender or exchange offer (other than a tender or exchange offer
made by the Company) seeking to acquire securities representing 25% or
more of the combined voting power of the Company's then outstanding
securities, or
(c)upon the first date on which Continuing Directors, as defined
in Article VI of the Company's Articles of Incorporation, cease for any
reason to constitute at least a majority of the Board of Directors, or
(d)the Company is merged or consolidated with another corporation
and as a result of such merger or consolidation less than 75% of the
outstanding voting securities of the surviving or resulting corporation
shall then be owned in the aggregate by the former stockholders of the
Company, or
(e)the Company transfers substantially all of its assets to
another corporation which is not a wholly owned subsidiary of the
Company.
10. Notice of Termination
Any purported termination by the Company or by the Employee shall
be communicated by written Notice of Termination to the other party
hereto. For purposes of this Agreement, a "Notice of Termination" shall
mean a notice which shall indicate the specific termination provision in
this Agreement relied upon and shall set forth in reasonable detail the
facts and circumstances claimed to provide a basis for termination of
employment under the provision so indicated. In the case of a
termination resulting from a Change of Control, no such Notice of
Termination is required.
11. Date of Termination
"Date of Termination" shall mean (a) if employment is to be
terminated for Disability, thirty (30) days after Notice of Termination
is given, (b) if employment is to be terminated by the Company for
Cause, the date on which a Notice of Termination is given, (c) if
employment is to be terminated as a result of a Change of Control, the
date of occurrence of such Change of Control, and (d) if employment is
to be terminated by the Employee or by the Company for any other reason,
the date specified in the Notice of Termination, which shall be a date
no earlier than ninety (90) days after the date on which a Notice of
Termination is given, unless an earlier date has been agreed to by the
party receiving the Notice of Termination either in advance of, or
after, receiving such Notice of Termination. Notwithstanding anything
in the foregoing to the contrary, if the party receiving the Notice of
Termination has not previously agreed to the termination, then within
thirty (30) days after any Notice of Termination is given, the party
receiving such Notice of Termination may notify the other party that a
dispute exists concerning the termination, in which event the Date of
Termination shall be the date set either by mutual written agreement of
the parties or by the arbitrators in a proceeding as provided in Section
17(b) hereof.
12. Payment Obligations Absolute
The Company's obligations to pay the Employee the compensation and
to make the arrangements provided herein shall be absolute and
unconditional and shall not be affected by any circumstances, including,
without limitation, any set-off (except that the Company shall be
entitled to withhold from compensation such amounts on account of
payroll taxes, income taxes and other similar matters as are required to
be withheld by applicable law, rule or regulation of any appropriate
governmental authority), counterclaim, recoupment, defense or other
right which the Company or any of its subsidiaries may have against him.
All amounts payable by the Company hereunder shall be paid without
notice or demand. Except as expressly provided herein, the Company
waives all rights which it may now have or may hereafter have conferred
upon it, by statute or otherwise, to terminate, cancel or rescind this
Agreement in whole or in part.
13. Non-Competition
During the Benefits Coverage Period, Employee agrees that he will
not, directly or indirectly, as principal, agent, owner, employee, or
otherwise engage in direct and substantial competition with the Company
in the United States. The Employee may request in writing a
determination by the Board that a proposed occupation will not
constitute direct and substantial competition with the Company and such
determination shall not be unreasonably withheld. Direct and
substantial competition with the Company shall be limited to what would
be competitive at the Date of Termination. This section shall not apply
to a termination resulting from a Change of Control.
14. Assignment and Transfer
Employee's rights and obligations under this Agreement shall not
be transferable by assignment or otherwise, and any purported
assignment, transfer, or delegation shall be void. Employee's rights
hereunder shall not be subject to anticipation, sale, assignment,
pledge, encumbrance or charge, and any attempt to anticipate, sell,
assign, pledge, encumber or charge the same shall be void.
15. Insurance and Indemnity
(a) During Period of Employment - The Company shall, to the
extent permitted by law, include Employee during his period of
employment under a directors and officers liability insurance policy
maintained for its directors and officers, with coverage at least as
favorable to Employee in amount and every other material respect as the
coverage of other directors and officers covered thereby. The Company
shall indemnify and hold the Employee harmless to the fullest extent
authorized by the Company's Articles of Incorporation and Bylaws and no
less favorable than the Company's other executive officers.
(b) After Termination of Employment - The Company's obligation
to provide insurance and indemnify Employee under this Section 15 shall
survive expiration or termination of this Agreement with respect to
proceedings or threatened proceedings based on acts or omissions of
Employee occurring during Employee's employment with the Company or with
any affiliated company. Such obligations shall be binding upon the
Company's successors and assigns and shall inure to the benefit of
Employee's heirs and personal representatives.
16. Confidential Information
The Employee shall not at any time during the period of his
employment or thereafter, except as required in the course of his
employment with the Company or as authorized in writing by the Board of
Directors of the Company, directly or indirectly use, disclose,
disseminate, or reproduce any Confidential Information. All notes,
notebooks, memoranda and similar repositories of information ("Items")
containing or relating in any way to Confidential Information shall be
the property of the Company. All such Items made or compiled by
Employee or made available to Employee during Employee's employment with
the Company, including all copies thereof, shall be delivered to the
Company by Employee upon termination of his employment with the Company
or at any other time upon request of the Company. "Confidential
Information" means information not generally known relating to the
business of the Company or any third parties that is contributed to,
developed by, disclosed to, or known to Employee in his course of
employment by the Company, including but not limited to customer lists,
specifications, data, research, test procedures and results, know-how,
services used, and information regarding past, present, and prospective
plans and methods of purchasing, accounting, engineering, business,
marketing, merchandising, selling and servicing used by the Company.
17. Miscellaneous
(a) Governing Law - This Agreement shall be governed by and
construed according to the laws of the State of Washington.
(b) Dispute Resolution - The parties agree to work together in
good faith to resolve any dispute arising under this Agreement, and to
explore resolution of the dispute through methods of alternative dispute
resolution. If the parties are unable to resolve a dispute, it shall be
settled by arbitration in Seattle, Washington, in accordance with the
Commercial Arbitration Rules of the American Arbitration Association
then in effect. However, if an event takes place which indicates a
reasonable probability that a Change of Control as defined in Section 9
is likely to occur, or a Change of Control as defined in Section 9
occurs, Employee may proceed with litigation without any necessity of
pursuing arbitration or alternative dispute resolution. Additionally,
if both parties agree that neither arbitration nor any other method of
alternative dispute resolution is suitable to resolve the dispute, they
may proceed with litigation. Judgment upon any award may be entered in
any court having jurisdiction over the subject matter of the dispute.
Notwithstanding the pendency of any such dispute or controversy, the
Company will continue to pay Employee his full compensation in effect
when the notice giving rise to the dispute was given (including, but not
limited to, base salary and continued participation in all compensation,
benefit and insurance plans in which Employee was participating when the
notice giving rise to the dispute was given), until the dispute is
finally resolved.
(c) Attorneys Fees - In the event any suit or proceeding is
instituted by one party against the other arising out of this Agreement,
the prevailing party shall be entitled to recover its attorneys fees and
expenses of litigation or arbitration.
(d) Rights Cumulative - The rights and remedies provided by this
Agreement are cumulative, and the exercise of any right or remedy by
either party hereto (or by its successor), whether pursuant to this
Agreement or to law, shall not preclude or waive its right to exercise
any or all other rights and remedies. The rights and remedies herein
are cumulative to any other rights the parties hereto may have by law,
statute, ordinance, or otherwise.
(e) Nonwaiver - No failure or neglect of either party hereto in
any instance to exercise any right, power, or privilege hereunder or
under law shall constitute a waiver of any other right, power, or
privilege or of the same right, power, or privilege in any other
instance. All waivers by either party hereto must be contained in a
written instrument signed by the party to be charged and, in the case of
the Company, by a duly authorized officer other than Employee.
(f) Entire Agreement - This Agreement contains the entire
understanding between the parties hereto and supersedes any prior
written or oral agreements between them respecting the subject matter
hereof between the parties hereto. There are no representations,
agreements, arrangements, or understandings, oral or written, between
and among the parties hereto relating to the subject matter hereof which
are not fully expressed herein.
(g) Amendment - This Agreement may be amended only by a writing
signed by Employee and by a duly authorized representative of the
Company other than Employee.
(h) Severability - If any term, provision, covenant, or
condition of this Agreement, or the application thereof to any person,
place or circumstance, shall be held by a court of competent
jurisdiction to be invalid, unenforceable, or void, the remainder of
this Agreement and such term, provision, covenant, or condition as
applied to other persons, places and circumstances shall remain in full
force and effect.
(i) Headings - The headings and captions of this Agreement are
provided for convenience only and are intended to have no effect in
construing or interpreting this Agreement.
(j) Notices - Any notice, request, consent, or approval required
or permitted to be given under this Agreement or pursuant to law shall
be sufficient if in writing, and personally delivered to Employee or by
registered or certified mail to Employee's residence (as noted in the
Company's records), or if personally delivered to the Company's
Corporate Secretary at the Company's principal office, as the case may
be.
(k) Parachute Payment Limitation - Notwithstanding any other
provisions of this Agreement, if any severance benefits under Section 7
of this Agreement are characterized as "Excess Parachute Payments" under
Section 280G of the Internal Revenue Code of 1986 (the "Code"), then the
following rules shall apply:
(i) The Company shall compute the net value to the
Employee of all such severance benefits after reduction for the
excise taxes imposed by Code Section 4999 and for any normal
income taxes that would be imposed on Employee if such severance
benefits constituted Employee's sole taxable income.
(ii) The Company shall next compute the maximum amount of
severance benefits that can be provided without any benefits being
characterized as Excess Parachute Payments and reduce the result
by the amount of any normal income taxes that would be imposed on
Employee if such reduced severance benefits constituted Employee's
sole taxable income.
If the result derived in subparagraph (i) is greater than the
result derived in subparagraph (ii), then the Company shall pay Employee
the full amount of severance benefits without reduction. If the result
derived from subparagraph (i) is not greater than the result derived in
subparagraph (ii), then the Company shall pay the Employee the maximum
amount of severance benefits that can be provided without any benefits
being characterized as Excess Parachute Payments.
IN WITNESS WHEREOF, the parties hereto have subscribed their names
this 22nd day of December, 1995.
COMPANY: EMPLOYEE:
FLUKE CORPORATION
/s/Douglas G. McKnight /s/George M. Winn
Officer George M. Winn
Vice President, General Counsel
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