1
Exhibit 10(a)
EMPLOYMENT AGREEMENT
This EMPLOYMENT AGREEMENT (the "AGREEMENT") is made effective the 1st day
of January, 1995 between PARK-OHIO INDUSTRIES, INC., an Ohio corporation (the
"Company"), and JOHN J. MURRAY (the "Executive").
WHEREAS, the Company desires to employ and utilize the experience
ability and services of the Executive as its President and Chief Operating
Officer, and the Executive desires to be so employed, on the terms and
conditions of this Agreement.
NOW, THEREFORE, in consideration of the premises and the respective covenants
and agreements of the parties contained in this Agreement, the parties hereto
agree as follows:
1. EMPLOYMENT. The Company agrees to employ the Executive and the Executive
agrees to be so employed, in the capacity of President and Chief Operating
Officer of the Company.
2. TIME AND EFFORTS. During the Executive's employment, the Executive shall
diligently and conscientiously devote his full time and attention and best
efforts in discharging his duties as the Company's President and Chief
Operating Officer, provided that the Executive shall be permitted to
participate in his existing business activities if and to the extent that such
activities do not interfere with the performance of his duties hereunder.
3. PERFORMANCE OF SERVICES. The Executive's duties shall be performed at
the Company's principal place of business, and the Executive shall not be
required to relocate during the term of his employment.
4. COMPENSATION.
(A) CASH COMPENSATION. The Company shall pay to the Executive salary at a
rate of $250,000 per year (the "Base Salary"), subject to all applicable
withholding taxes, payable at the same times as salary payments to other
salaried corporate employees. Such Base Salary may be increased from time to
time at the discretion of the Board.
(B) STOCK OPTIONS. The Company shall grant to the Executive an option to
purchase 150,000 Shares, subject to the approval by the Company's
shareholders of the amendment to the Company's 1992 Stock Option Plan
("Plan"). The grant shall be pursuant to and in accordance with the Plan,
and the Stock Option Agreement with respect to such option grant shall be in
the form attached hereto as Exhibit A.
(C) MANAGEMENT INCENTIVE PLAN. The Executive will be entitled to participate
in any current or future management incentive plan of the Company, and the
Company shall pay or cause to be paid to the Executive, as a bonus, the
amount or amounts determined by the Compensation Committee of the Board and
approved by the Board to be payable. Such bonus shall be consistent with the
bonus program available to other executives in the Company.
5. BENEFITS. The Executive shall be entitled to benefits and perquisites
generally provided by the Company to its executive officers and such benefits
and perquisites as are recommended by the Compensation and Stock Option
Committee of the Company's Board of Directors and approved by the Board of
Directors and, if applicable, the Company's shareholders. The Executive shall
be entitled to health insurance on terms no less favorable than those currently
provided to any other executive of the
1
2
EMPLOYMENT AGREEMENT JANUARY 1, 1995
Company. The Company will pay or reimburse the Executive for the costs
incurred by him for annual physical examinations of the Executive performed by
the physicians at the medical facilities of his choice in Northeast Ohio
including all tests, procedures and analysis as the Executive or such
physicians may reasonably select. The Company will provide the Executive with
an American-built automobile in accordance with Company policy. The Company
will pay or reimburse the Executive for all reasonable costs incurred by him
and his family in moving to Cleveland.
6. DISABILITY. If the Executive is disabled for a consecutive period of not
less than six months during the Term to the extent that he is unable to perform
his regular duties as an employee of the Company, the Company may, at its sole
discretion, at any time after the expiration of such six-month period and prior
to the termination of such disability, terminate the Executive's employment
hereunder by giving him written notice of such termination. Such termination
shall not affect the Executive's rights under any long-term disability
insurance policy maintained by the Company. In the event that the Executive's
employment hereunder is terminated by the Company under this Section 6, the
Executive shall be entitled to a severance payment in an amount equal to the
then current Base Salary.
7. TERMINATION OF EMPLOYMENT.
(A) Anything herein to the contrary notwithstanding, the Company and the
Executive may by mutual consent, evidenced in a writing signed by both
parties, agree to the termination of the Executive's employment hereunder.
Also, the Executive may unilaterally determine to terminate his employment
upon 30 days written notice to the Company, and the Company shall have the
right, upon 30 days notice to the Executive, to terminate the Executive's
employment hereunder for cause. For purposes hereof, termination for "cause"
shall mean that the Executive has been convicted of a felony or has engaged
in the commission of a fraud or embezzlement upon the Company. Subject to
Section 7(b), the Company shall at all times have the right, upon 30 days
notice to the Executive, to terminate his employment without cause.
(B) In the event of the termination of the Executive's employment with the
Company due to the Executive's resignation, the Executive shall be entitled
to receive from the Company a severance payment in an amount equal to fifty
percent (50%) of the then current Base Salary. Further, in the event that
the Executive's employment hereunder is terminated by the Company without
cause, the Executive shall be entitled to a severance payment in an amount
equal to the then current Base Salary.
(C) If the Executive's employment with the Company is terminated due to the
Executive's death, the beneficiaries designated by the Executive shall be
entitled to receive the proceeds from the Company paid life insurance.
(D) In the event of the termination of Executive's employment with the
Company for any reason whatsoever, any outstanding stock options of the
Company previously granted to the Executive shall become immediately
exercisable by the Executive.
8. CHANGE OF CONTROL. In the event of a Change in Control, as defined
below, Executive shall have the right within six months of such occurrence to
consider such event a termination of his employment as if the Executive was
terminated by the Company without cause and receive a severance payment in the
amount equal to the then current Base Salary. For purposes of this Agreement,
a "Change in Control" (assuming such event has not been previously reported)
shall mean a change in control of a nature that would be required to be
reported in response to Item 6(e) of Schedule 14A of Regulation 14A
2
3
EMPLOYMENT AGREEMENT JANUARY 1, 1995
promulgated under the Securities Exchange Act of 1934, as amended ("Exchange
Act"); provided, without limitation, that a Change in Control shall be deemed
to have occurred if and at such times as (i) any "person" within the meaning
of Section 14(d) of the Exchange Act becomes the beneficial owner, directly or
indirectly, of securities of the Company representing 40% or more of the
combined voting power of the Company's then outstanding securities, or
(ii) during any period of two consecutive years, individuals who at the
beginning of such period constitute the Board cease for any reason to
constitute at least a majority thereof unless the election, or the nomination
for election by the Company's shareholders, of each new director was approved
by a vote of at least two-thirds of the directors then still in office who
were directors at the beginning of the period, or (iii) the consummation of
the sale of substantially all of the assets of the Company.
9. BUSINESS EXPENSES. The Company shall reimburse the Executive for all
reasonable and necessary expenses incurred in carrying out his duties under
this Agreement, consistent with the Company's reimbursement policy generally
applicable to its executive officers. The Executive shall present to the
Company from time to time itemized accounts of such expenses in the usual form
required by the Company.
10. INDEMNIFICATION. The Executive shall be covered by the Company's
indemnification policies for Directors and Officers and shall be offered an
indemnification agreement in the form as may from time to time be in effect
with other Directors and Officers of the Company.
11. CONFIDENTIALITY; NON-COMPETITION; NON-SOLICITATION.
(A) It is expressly understood by the Company and the Executive that the
covenants contained in this Section 11 are an essential element of this
Agreement and that but for the agreement by the Executive to comply with
these covenants, the Company would not enter into this Agreement. The
Executive has independently consulted with his legal counsel and after such
consultation agrees that such covenants are reasonable and proper.
(B) The Executive hereby acknowledges that he will have (during the
Executive's employment) access, as a result of his duties and
responsibilities with the Company, to confidential information of the Company
and may have access, as a result of his duties and responsibilities with the
Company, to confidential information of affiliates or shareholders of the
Company, concerning matters affecting or relating to the business of the
Company, its affiliates or shareholders (collectively, "Confidential
Information") including but not limited to its corporate books and records,
its financial information, its personnel information, its customers and
suppliers, its prices or proceeds from sales, its products, its manner of
operation, its plans, processes, know-how, or other data, its trade secrets,
or any other information concerning the business of the Company, its
affiliates or its shareholders; provided, however, that the term
"Confidential Information" shall not include any information that is in the
public domain or is generally known to the public through no fault of the
Executive. To ensure the continued secrecy of this Confidential Information,
the Executive agrees that he will not at any time during the Executive's
employment, or at any time thereafter, in any manner, either directly or
indirectly, divulge, disclose or communicate to any person, firm, corporation
or entity in any manner whatsoever any Confidential Information, except as
directed by the Company. Upon the termination of Executive's employment with
the Company, the Executive shall deliver to the Company all Confidential
Information and all other documents, material or property of the Company in
the possession or under the control of the Executive. The Executive agrees
(i) not to engage in any business which directly or indirectly competes with
the Company or any of its affiliates or subsidiaries and (ii) except in his
performance of his duties as
3
4
EMPLOYMENT AGREEMENT JANUARY 1, 1995
President and Chief Operating Officer of the Company, not to induce or
attempt to persuade any current or future employee of the Company or
any of its affiliates or subsidiaries not to be employed by, or to terminate
such employee's employment with, such employee's employer.
(C) This Paragraph 11 shall remain in full force and effect after termination
of this Agreement for one year.
(D) Without intending to limit the remedies available to the Company, the
Executive agrees that damages at law will be an insufficient remedy to the
Company in the event that the Executive violates any of the provisions of
this Section 11, and that the Company may apply for and, upon the requisite
showing, have injunctive relief in any court of competent jurisdiction to
restrain the breach or threatened breach of or otherwise to specifically
enforce any of the covenants contained in this Section 11. The Executive
further agrees that the Company, in seeking a remedy for any such violation
of this Section 11 (including the relief described in the preceding
sentence), shall not be required to make a showing as to the materiality or
importance of any such violation.
12. SUCCESSORS; BINDING AGREEMENT. This Agreement and all rights of the
Company hereunder shall inure to the benefit of and be enforceable by the
Company, its successors and assigns. This Agreement and all rights of the
Executive hereunder shall inure to the benefit of, and be enforceable by him,
his personal or legal representatives.
13. MODIFICATIONS AND WAIVERS. No provisions of this Agreement may be
modified or amended unless such modification or amendment is authorized by the
Company's Board of Directors and is agreed to in writing, signed by the
Executive and by another executive officer of the Company. No waiver by either
party hereto of any breach by the other party hereto or any condition or
provision of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at
any prior or subsequent time.
14. NOTICES. All notices, demands and other communications made or given in
connection with this Agreement shall be in writing and personally delivered,
sent by telecopy, or mailed by registered or certified mail, postage paid,
addressed to the respective parties as follows:
To the Company: Park-Ohio Industries, Inc.
600 Tower East
20600 Chagrin Boulevard
Cleveland, Ohio 44122
To the Executive: Mr. John J. Murray
1730 Governors Way
Blue Bell, Pennsylvania 19422
or to such other addresses as either party may furnish to the other in writing
in the manner set forth above. All notices shall be effective upon receipt.
15. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement of
the parties hereto relating to the subject matter hereof and there are no
written or oral terms or representations made by either party other than those
contained herein.
16. GOVERNING LAW. The validity, interpretation, construction, performance
and enforcement of this Agreement shall be governed by the laws of the State of
Ohio.
4
5
EMPLOYMENT AGREEMENT JANUARY 1, 1995
17. ARBITRATION. Except as otherwise provided in Section 11 hereof with
respect to injunctive relief for certain acts, any controversy or claim arising
out of or relating to this Agreement shall be settled by arbitration in
Cleveland, Ohio in accordance with the Commercial Arbitration Rules of the
American Arbitration Association (the "Rules"). The arbitration proceeding
shall be conducted by three arbitrators, two of whom shall be selected in
accordance with a procedure set forth in Section 13 of the Rules and the third
of whom shall be a retired judge selected by mutual agreement of the other
selected arbitrators, provided such a person is a member in good standing of
the bar of any state of the United States of America. The decision of the
arbitrators shall be in writing and presented in separate findings of fact and
conclusions of law. The award of the arbitrators shall be final and binding
on the parties from which no appeal may be taken unless clearly erroneous as a
matter of law, and judgment upon such award may be entered in any court having
jurisdiction thereof. The arbitrators, in the award, may assess the fees and
expenses of the arbitrators, and the arbitration proceeding, and the witnesses
and attorneys' fees of the parties, or any part thereof, against any party or
parties, taking into account the circumstances of the case; provided, however,
that all fees and expenses shall be assessed against the Company if the Employee
prevails on any issue raised.
18. INVALIDITY. The invalidity or unenforceability of any term or terms of
this Agreement shall not invalidate, make unenforceable or otherwise affect any
other term of this Agreement which shall remain in full force and effect.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly
executed as of the date first above written.
PARK-OHIO INDUSTRIES, INC.
By: /s/ Edward F. Crawford
-------------------------------------------
Title: Chairman and Chief Executive Officer
----------------------------------------
/s/ John J. Murray
----------------------------------------------
John J. Murray
5