December 8, 1995
PERSONAL & CONFIDENTIAL
Mr. Joel S. Friedman
320 Wildwood Road
Stamford, Connecticut 06903
Dear Joel:
The severance provisions offered to you on behalf of General Signal are listed
below. These have assumed that you are retiring based on your comments.
1. Termination of Active Employment
You will remain on the payroll as an active employee through December 31,
1995. During that time, you will be able to answer questions and
contribute
to an orderly transition of your duties and responsibilities. It should
not be
necessary for you to come into the office on a regular basis to accomplish
this transition.
2. Incentive Compensation
You will be eligible for the 1995 Incentive Compensation payment as
determined and paid in 1996.
3. Transition Payment
Since you do not wish to take advantage of outplacement services, you will
be paid a one-time lump sum of $84,000. In addition, title for the company
car which you are now using will be transferred to you as soon as
practicable in January, 1996.
4. Pension Benefits
Effective December 31, 1995, you will elect early retirement under the
qualified Corporate Retirement Plan of the Company (supplemented by the
Company's Benefit Equalization Plan to the extent necessary). Your pension
benefits will commence on January 1, 1996 in the form you elect. It is
understood that, provided you meet the life expectancy requirement, you
will
be able to receive your pension benefits in a lump sum distribution. Under
the Corporate Retirement Plan, your pension calculation will be based on
your age and service as of January 1, 1996 and the highest earnings years
would be 1991-1995.
In addition, the Company will supplement the pension benefits payable to
you under the Corporate Retirement Plan and under the Company s Benefit
Equalization Plan (the Pension Plans ), by providing to you the additional
pension benefits that you would have been entitled to receive under the
Pension Plans if you remained in employment with the Company until
November 1, 1999 by giving recognition to such additional age and service
credit. Such supplemental benefits will be treated as additional benefits
under the Benefit Equalization Plan and will commence on November 1,
1999 in the form you elect.
5. Severance Payment
A severance payment of $525,000 will be paid to you through the bi-weekly
payroll for 18 months. If you would prefer that this payment be extended
for up to four years, please contact Liz Conklyn to make these
arrangements.
Because you will not be an employee during this period, you will not be
able
to participate in the Company s qualified savings plan nor accrue
additional
credit for the qualified pension plan.
6. Deferred Compensation Plan
You will be paid all Company matching contributions that will be forfeited
under the Company s Deferred Compensation Plan made in respect to
deferrals prior to December 31, 1995 in January 1996. You will not be
permitted to make any contributions to the Deferred Compensation Plan or
to have any Company matching contributions credited on your behalf with
respect to any periods after December 31, 1995.
7. Stock Options
Upon retirement, you will have five years (or the expiration of the term if
that comes first) to exercise your vested options. Options that have been
held
by you for one year but not completely vested will continue to vest
according to their original vesting schedule and be exercisable as
indicated
above. I will request that the Personnel and Compensation Committee
consider extending this treatment to options that have been held by you for
less than one year at the December 14, 1995 meeting (such options normally
terminate at retirement) by authorizing the Company to amend such option
agreements.
8. Confidential Information
You will keep confidential all confidential and trade secret information
concerning the Company, its businesses, and its prospects which has become
known to you.
9. Waiver and Release
In consideration of the terms of the severance agreement and the payments
referred to in it, you waive and release any and all rights or claims
that you
have, as of the date of the execution of the agreement, against the
Company,
its affiliated companies or any of their respective officers, directors,
agents,
employees, successors or assigns. The rights and claims so waived and
released shall include, but not be limited to, those arising under
local, state
and federal statute or common law (including claims of breach of promise
and wrongful discharge), and any law relating to sex, age, race,
religious,
handicap or national origin discrimination (including any claims under
Title
VII of the Civil Rights Act of 1964, the Civil Rights Act of 1991, the
Age
Discrimination in Employment Act and the Older Worker s Benefit
Protection Act).
Please feel free to call either me or Liz Conklyn if you have any questions.
After
your review, if you agree to the terms outlined in this letter, please sign
and return
to me the enclosed copy of this letter.
Sincerely,
/s/ Michael Lockhart
-------------------
Michael D. Lockhart
MDL:cm
/s/ Joel S. Friedman
Agreed to: _____________________________
Joel S. Friedman
December 21, 1995
Date: _____________________________