EXHIBIT 10(l)
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August 31, 1989
EMPLOYMENT AND CONSULTING AGREEMENT
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Agreement dated as of the 15th day of October 1989, between
The Hydraulic Company ("THC") and William S. Warner ("Warner").
WHEREAS, Warner has been continuously employed by the
Company since 1948, and is currently employed by THC as Chairman
and Chief Executive Officer and a member of THC's Board and as
Chairman and Chief Executive Officer of Bridgeport Hydraulic
Company ("BHC") and a member of its Board and as Chairman and
Director of Main Street South Corporation, Chairman and Director
of Hydrocorp and Director of Timco, Inc. and Stamford Water
Company (the "Companies"); and
WHEREAS, Warner has reached retirement age on the date
hereof; and
WHEREAS, Warner has gained extensive, unique and valuable
knowledge and experience concerning the business of THC, BHC and
the Companies which THC, BHC and the Companies desire to utilize
in transitioning to new management from the date hereof until
January 1, 1990 and thereafter during the term of this agreement;
and
WHEREAS, Warner is willing to continue serving in his
present capacities with THC, BHC and the Companies through
December 31,1989 and, commencing January 1, 1990 to continue
serving as a Director of THC and to provide consulting services
to THC concerning the businesses of THC, BHC and the Companies as
an independent contractor; and THC desires to retain such
employment and consulting services of Warner;
NOW, THEREFORE, THC and Warner agree as follows:
1. Continued Employment. Consulting Services.
Directorship. THC agrees to employ Warner, and Warner agrees to
continue serving in his present capacities with THC, BHC and the
Companies, through December 31, 1989 ("Employment Term") as a
full-time employee pursuant to the terms of Warner's existing
employment agreement dated as of January 1, 1985 with THC, which
is incorporated herein by reference and made a part hereof.
Effective January 1, 1990 THC hereby retains Warner's consulting
services under this agreement and Warner hereby agrees to render
services to THC as provided herein, from January 1, 1990 to
December 31, 1996 ("Consulting Term"). During the Consulting
Term, Warner agrees to accept renomination and election to the
Board of Directors of THC by the shareholders of THC.
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2. Scope of Services. During the Consulting Term Warner
shall act as a business consultant to THC concerning the
businesses of THC, BHC and the Companies. Such consulting
services shall be provided at the times and in the manner
requested by the Chief Executive Officer of THC and agreed to by
Warner, it being expressly understood that Warner will be under
no obligation to render any specific number of hours of service,
and shall render only such services as he shall in good faith
determine to be appropriate. It is anticipated that Warner will
devote not more than 25% of his available time to providing
consulting services pursuant to this agreement, and it is agreed
that the payments required of THC hereunder shall be due and
payable regardless of whether Warner in fact is called upon to
provide any services hereunder.
3. Independent Contractor Status. It is agreed that
Warner shall, at the conclusion of his employment on December 31,
1989 and thereafter during the Consulting Term of this agreement,
act as an independent contractor and not as an employee of THC.
Accordingly, Warner will not be eligible on account of his
services as a consultant, for participation in or for the
benefits of any of the plans and programs provided by THC, BHC or
any of the Companies for their respective active employees.
However, anything set forth in the preceding sentence or
elsewhere herein to the contrary notwithstanding, Warner (or his
estate and/or eligible dependents) will be entitled to all of the
benefits of THC's Supplemental Retirement Plan, adopted by THC's
Board of Directors on May 26, 1987 as amended to the date of
execution of this agreement, together with any subsequent
amendments more favorable to Warner and generally applicable to
THC's retirees. Warner (or his estate and/or eligible
dependents) will also be entitled to all of the benefits
(including, without limitation, Retirement Plan benefits and
insurance benefits) of a retired employee of THC, BHC and the
Companies, and specifically the Companies' medical benefits and
medical insurance coverage at least as favorable as that
currently provided to retires and in effect at the date of
execution of this agreement during the consulting term and
thereafter during his lifetime extending to Warner and his spouse
during Warner's lifetime and continuing for the benefit of his
present souse on his death during her lifetime. Moreover, so
long as Warner serves as a Director of THC (or any of its
affiliates) after December 31, 1989, his compensation for such
service shall be the same as the Director's fees payable to other
non-employee Directors for such service and shall be payable to
Warner in addition to the compensation payable under Section 5 of
this agreement.
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4. Non-Exclusive Employment. Warner will not be required
to devote his entire time and attention to providing consulting
services to THC and will be permitted to engage in any other
occupation or business during the Consulting Term; provided,
however, that he shall not engage in any occupation or business
which would result in a conflict with his then existing duties
and obligations under this agreement or as a member of the Board
of Directors of THC or any of its affiliates.
5. Compensation and Consulting Fees. THC agrees to pay
Warner as sole consideration for Warner's covenant against
competition reflected in Paragraph 4 above, the sum of $175,000,
payable to him or his designated beneficiary in eighty-four equal
monthly installments, with the first such installment payable on
January 1, 1990. Warner's "designated beneficiary" shall be such
person or persons as he may designate in and by a written
instrument signed by him and delivered to THC or, in default of
any such designation, his estate. This payment shall be made
regardless of whether Warner performs any actual services and
shall survive his death or his total or partial disability.
Consulting services pursuant to this agreement shall commence
upon the conclusion of Warner's full-time employment on
January 1, 1990. In addition to the foregoing payments, from the
commencement of such services and during the Consulting Term,
Warner shall be paid for such services during his lifetime and
notwithstanding any total or partial disability at the rate of
$25,000 per year, payable in equal monthly installments.
6. Reimbursement of Expenses. THC agrees to reimburse
Warner for all reasonable expenses which he incurs in providing
services under this agreement during the Consulting Term
including but not limited to:
(a) travel expenses;
(b) lodging expenses;
(c) reasonable entertainment expenses; and
(d) membership fees in business related clubs
including the Algonquin Club and dining only
membership in the Fairfield County Hunt Club.
THC also agrees to reimburse Warner for all reasonable expenses
incurred in consulting with attorneys, an actuary, and a
financial advisor in regard to this agreement, and the cost of
drafting and concluding this agreement and any Will and Trust
revisions related thereto.
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7. Logistical Support. THC shall, during the Term hereof
as agreed upon from time to time between Warner and the Chief
Executive Officer of THC, either provide Warner with suitable
office space, furnishings and equipment in the executive suite of
THC with qualified secretarial help as needed at no cost or
expense to Warner, or reimburse Warner for comparable office
facilities and secretarial service at another location of his
choice. Such reimbursement will be at mutually agreed amounts,
equal to THC's cost for public utility ratemaking purposes of
comparable office facilities and the expense incurred by THC for
comparable secretarial service.
8. Company Vehicle. THC shall either (i) provide Warner
with the exclusive use of a suitable company vehicle during the
Employment Term and Consulting Term for business and personal use
("Suitable" as used herein is intended to mean comparable to
vehicles provided THC's senior officers) or (ii) alternatively at
Warner's option during the Consulting Term, reimburse Warner
quarterly in an amount equal to the annual lease costs of such a
suitable vehicle. Under either option mileage attributed to
Warner's personal use shall be accounted for in the same manner
as that for THC's senior officers. THC shall provide all
maintenance, insurance, fuel and associated service with respect
to such vehicle, except that, should Warner elect alternative
(ii), THC shall reimburse Warner for the expense of insurance on
the vehicle. At the end of the Consulting Term, Warner may
purchase his then vehicle, if owned by THC, at the Company's then
book value.
9. Life Insurance. THC shall provide for Warner's benefit
until his death a supplemental death benefit of $50,000 (which is
equal to the death benefit Warner is presently entitled to under
THC's CBIA Key Man Insurance policy), such benefit to be
available under that policy or such other policy or self-
insurance plan as THC may elect.
10. Other Benefits. Warner shall be entitled to such other
fringe benefits as are normally provided to consultants by THC
during the Consulting Term hereof.
11. Term of This Agreement. This agreement shall continue
in effect until December 31, 1996, notwithstanding any total or
partial disability of Warner. Certain retirement and other
benefits shall survive such date should Warner or his spouse
survive December 31, 1996, as more particularly referenced
herein.
12. Entire Agreement. This agreement has been executed in
counterparts, each of which shall be deemed an original, and
contains all of the terms and conditions agreed upon by the
parties hereto; and no other agreements oral or otherwise
regarding the subject matter of this
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agreement shall be deemed to exist or bind either of the parties
hereto except the Employment Agreement between THC and Warner
incorporated herein by reference. Connecticut Law shall govern.
IN WITNESS WHEREOF, the parties have duly executed this
agreement as of the date first above written.
DATE OF EXECUTION THE HYDRAULIC COMPANY
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Witness:
__________________________ By: __________________________________
Witness:
__________________________ __________________________________
William S. Warner
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