EMPLOYMENT AGREEMENT
THIS AGREEMENT is entered into as of December 12, 1995, between
Fluke Corporation, a Washington corporation ("the Company"), and William
G. Parzybok, Jr. ("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 Chairman of the Board and
Chief Executive 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
agrees to devote his best efforts and substantially full time,
attention and energy 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 Chairman of the Board and Chief Executive 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)
$390,000 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 $250,000.
(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 60% 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-Qualified 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
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 Chairman of the Board and Chief Executive
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
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 60% 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 given 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 3rd day of January, 1996.
COMPANY: EMPLOYEE:
FLUKE CORPORATION
/s/Douglas G. McKnight /s/William G. Parzybok, Jr.
Officer William G. Parzybok, Jr.
Vice President, General Counsel
Title