DATED MARCH 30, 1998
MORRIS MECHANICAL HANDLING
-and-
M J MADDOCK
----------------
SERVICE AGREEMENT
---------------
THIS AGREEMENT is made the 30th day of March, One thousand nine hundred
and ninety-eight
BETWEEN:-
(1) MORRIS MECHANICAL HANDLING whose registered office is at P.O. Box 7,
North Road, Loughborough LE11 1RL.
(2) MICHAEL JOHN MADDOCK of Ulverscroft Close, Ashby Road, Gilmorton,
Lutterworth LE17 5LY.
WHEREBY IT IS AGREED THAT:-
1. INTERPRETATION AND DEFINITONS
1.1 In this Agreement the following words, phrases and expressions shall
have the following meanings:-
"the Board" the Directors of the Company present
at a meeting of the Directors or at a
duly convened meeting of a Committee
of the Directors
"the Commencement Date" the date of this agreement
"the Company" Morris Mechanical Handling Limited
"the Executive" Michael John Maddock
"the Group" the Company and its subsidiaries (as
defined in the Companies Act 1985 as
amended by the Companies Act 1989)
and any associated company (which
expression shall mean any company
which is not a subsidiary of which
not less than 20% of its equity share
capital is beneficially owned by the
Company) of the Company together with
MMH Holdings, Inc., a Delaware,
U.S.A. corporation.
1.2 Any reference to a statutory provision shall be deemed to include all
re-enactments and modifications of it or the provision referred to and any
regulations made under it or under the provision referred to.
1.3 The headings in this Agreement have been inserted for convenience
only. They are not to affect its interpretation.
2. THE EXECUTIVE'S APPOINTMENT
2.1 The Company will employ the Executive and the Executive will serve the
Company on and subject to the terms and conditions of this Agreement.
2.2 The Executive's employment began on the Commencement Date. The
Executive's period of continuous employment (taking into account any
employment with a previous employer which counts towards that period)
began on 2nd January 1989.
2.3 The Executive's employment will continue from the Commencement Date
and thereafter unless and until it is terminated pursuant to clause 10 or
by either:-
2.3.1 the Company giving to the Executive not less than twelve
months written notice; or
2.3.2 The Executive giving to the Company not less than twelve
months written notice.
3. THE EXECUTIVE'S DUTIES AND OBLIGATIONS
3.1 The Executive is to act as Vice President -- Middle East/Asia Pacific
Region of Morris Mechanical Handling, Inc., reporting to the Chairman.
3.2 Whilst the Executive is employed by the Company he will:-
3.2.1 perform his duties with reasonable skill and care and to the
best of his ability
3.2.2 comply with all reasonable directions from time to time given
to him by the Board and at all times keep the Board properly
informed of matters which come to his attention which may
materially affect the business of the Company or any member of
the Group
3.2.3 devote the whole of his working time, abilities and attention
to his duties
3.2.4 work such hours as the Company may reasonably require whether
or not these are outside normal business hours
3.2.5 at all times serve the Company and the Group well and
faithfully.
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3.3 Whilst the Executive is employed by the Company he will not:-
3.3.1 do anything which may in the reasonable opinion of the Board
bring any member of the Group into disrepute or harm the
goodwill or commercial image of any member of the Group or
which is or is likely to be damaging or prejudicial to the
business and/or commercial interests of the Company or the
Group
3.3.2 be engaged or interested (except with the prior written
approval of the Board) in any other trade, profession,
business or occupation (including any public or private
activity which in the reasonable opinion of the Board may
interfere with the proper performance of his duties) or hold
any directorship or other office in any company or other body
whether incorporated or unincorporated.
3.4 Nothing contained in this Agreement shall preclude the Executive from
holding not more than 3% of the issued shares or other securities of any
class of a company which are quoted or dealt in on a recognized Stock
Exchange.
3.5 The initial location of the Executive is at North Road, Loughborough.
The Executive will however travel both within the UK and abroad as may be
necessary for the proper performance of his duties and will spend nights
away from the initial location and/or his home where that is necessary for
the performance of his duties. The Executive will not be required without
his consent to locate his office on a full time basis whether permanently
or temporarily to any place outside a radius of 50 miles from the initial
location.
3.6 There are no disciplinary rules on the date of this Agreement which
are specifically applicable to the Executive (other than the provisions of
this Agreement). The Executive shall be expected to behave at all times in
a manner appropriate to his position and responsibilities and to comply
with any staff rules in force from time to time. The Board may however
introduce and amend such disciplinary rules as it thinks fit.
3.7 If the Executive is dissatisfied with any disciplinary action taken
against him or has any grievance relating to his employment he may apply
for redress to the Chairman of the Company whose decision shall be final
and binding, subject to any recourse to law which the Executive may have.
3.8 Unless the Board prescribes otherwise, and save as expressly provided
in the Agreement there will be no specific terms or conditions relating to
the Executive's hours of work. The Executive shall work such hours as may
be necessary or appropriate from time to time to carry out his duties
properly and effectively.
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4. RENUMERATION AND EXPENSES
4.1 The Executive will receive a salary at the rate of (pound)80,900 per
annum. This will be reviewed by the Board (or by any Compensation or
Remuneration Committee established for that purpose) at least once a year.
4.2 The salary is payable by equal monthly installments in arrears on the
last day of each month (or such other day as the Board shall from time to
time decide). It will be deemed to accrue from day to day.
4.3 The salary includes all remuneration or fees to which the Executive
shall be entitled as a Director or officer of any member of the Group.
4.4 The Company or the relevant Group member will reimburse all reasonable
travelling, hotel, entertaining and other expenses properly incurred by
the Executive in the performance of his duties. The Executive will provide
whatever receipts or other supporting documentation may be required and
will comply with the Company's policy and rules relating to the incurring
and reimbursement of expenditure as may be in force from time to time.
4.5 The Executive will be entitled to receive a bonus calculated and paid
in accordance with the provisions of the management bonus scheme from time
to time maintained by the Company.
4.6 For each of 1998 and 1999, the Executive shall receive an additional
payment in the amount of (pound)56,250.
4.7 The Executive shall be eligible to receive an initial option grant
with respect to _____ "Equity Units" (as defined under the Company's
Option Plan in accordance with the general terms set forth in Schedule A).
5. BENEFITS
5.1 The Company will provide for the private and business use of the
Executive a suitable motor car in accordance with the policy of the
Company as determined by the Board from time to time.
5.2 The Company will pay the cost of insuring, taxing and maintaining the
car and will reimburse the Executive all the business and private running
expenses thereof. The Executive will ensure that the car is serviced in
accordance with the manufacturer's recommendations and that he complies at
all time with the requirements and provisions of the policy of insurance
in force in respect of the car from time to time.
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5.3 The car is to remain the property of the Company. On termination of
this Agreement the Executive is to return it in good condition (fair wear
and tear excepted) to the Company together with its keys and all documents
relating to it.
5.4 The Executive shall be entitled to benefits under such private health
plan as the Board may determine from time to time (on the National Scale
appropriate to the nearest hospital to the Executive's home) under its
rules from time to time in force for the benefit of the Executive his
spouse and his children who are resident in the United Kingdom and are
under the age of 21 or who are more than that age but are engaged in a
full time course of education.
5.5 The Company will reimburse the Executive with all reasonable expenses
incurred by the Executive arising out of the Executive's use of his home
telephone.
6. PENSION
6.1 Subject to the terms of the Trust Deed, the Scheme rules and any other
scheme documentation from time to time in force the Executive will be
entitled to join and be a member of the pension scheme or schemes to be
established by the Company and the Company will procure that the benefits
to which the Executive is entitled pursuant to such scheme or schemes are
equal in value overall to the benefits which the Executive would have been
entitled to under the Trafalgar House Executive Pension Scheme ("the
Scheme") in respect of the Executive's service in the scheme to the
Commencement Date. If he does so he will make contributions to and will be
entitled to benefits under the Scheme in accordance with the Trust Deed
and rules relating to it for the time being in force.
6.2 A Contracting-Out Certificate issued under the Social Security Pension
Act 1975 is in force in respect of the Executive's employment.
6.3 Under the terms of the Scheme currently in force and applicable to the
Executive, the Executive is entitled to retire early with the prior
written consent of both the Company and the trustees of the Scheme. The
Company hereby expressly grants its consent to the Executive retiring on
or at any time after his 62nd birthday should he wish to do so. The
Executive may in his absolute discretion retire on or after his 62nd
birthday but cannot be compelled by the Company to do so. The Company also
agrees to use all reasonable endeavours to procure the consent of the
trustees of the Scheme to the Executive retiring on or at any time after
his 62nd birthday should he wish to do so. The Company agrees to secure
the Executive's retirement on or at any time after his 62nd birthday on
the same basis as if the Executive had retired at age 65 and there shall
be no actuarial discounts applied to the Executive's entitlement for his
choosing to take early retirement. Insofar as it is required to do so in
order for this provision to be effective, the Company agrees to make such
payments as are necessary into the Scheme on behalf of the Executive to
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secure his early retirement without discounting his pension or lump sum
entitlement.
6.4 In the event that the Executive does choose to retire early, the
provisions relating to normal retirement age referred to elsewhere in this
Agreement shall be deemed altered to reflect the actual age at which the
Executive chooses to retire.
7. HOLIDAYS
7.1 The Executive will be entitled (in addition to normal pubic and Bank
holidays) to 25 working days' paid holiday each year. For these purposes
the holiday year. For these purposes the holiday year starts on the 1st
January.
7.2 If the employment of the Executive is terminated during any calendar
year he will be entitled to accrued holiday pay of one day's salary for
each day of his accrued entitlement which he has not taken. These
provisions will not apply if this Agreement is terminated pursuant to
clause 10.1 in which event the Executive will have no claim for accrued
holiday pay.
7.3 For the purposes of clause 7.2 holidays are deemed to accrue from day
to day and any holiday entitlement in respect of any holiday year not
utilized by the end of that year shall be forfeit.
7.4 All holidays are to be taken at times approved by the Board.
7.5 The Company may require the Executive to take any unused holiday
during any period of notice given by either party to terminate this
agreement.
8. SICKNESS AND MEDICAL EXAMINATION
8.1 If the Executive is prevented by sickness or injury from properly
performing his duties under this Agreement:-
8.1.1 during the first six continuous months of such absence he will
be entitled to continue to receive the salary and benefits set
out herein at full rate. After such period payment (other than
payment of any Statutory Sick Pay to which the Executive may
be entitled) will cease and the provisions of clause 8.3 will
apply.
8.1.2 He will claim all state sickness benefits available to him and
account to the Company for these during the period in which he
receives sick pay.
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8.2 Any salary paid to the Executive by virtue of clause 8.1.1 shall be
deemed to satisfy any entitlement of the Executive to receive Statutory
Sick Pay for the period to which the salary relates.
8.3 If the Executive continues for more than six continuous months to be
prevented by sickness or injury from properly performing his duties the
Executive will be entitled to such benefits as are available to him from
time to time under the rules of the permanent health insurance scheme of
the Company and the payment of salary or other benefits shall be at the
discretion of the Board. This clause takes effect subject to clause 10.
8.4 Salary paid by the Company to the Executive in respect of any period
of absence resulting from the negligence of a third party shall be
recoverable by the Company out of any damages he the is paid by or on
behalf of that third party.
8.5 The Board may at its discretion require the Executive to furnish
evidence satisfactory to it of any sickness or injury of the Executive. It
may also require him from time to time to undergo a medical examination by
a medical practitioner nominated by the Company. The Company will bear the
costs of any such examination and will be entitled to full disclosure of
the results.
9. CONFIDENTIALITY
9.1 By virtue of his senior position the Executive acknowledges that he
will acquire detailed knowledge of the commercial affairs and business
transactions of the Company and the Group including without limitation
trade secrets and confidential information about customers, suppliers,
terms of sale, terms of supply, plans for growth and expansion and
technical and product improvements and developments. The Executive is
hereby made expressly aware and agrees that all of such information ("the
Confidential Information") is the property of and confidential to the
Company and the Group.
9.2 The Executive shall keep secret and shall not at any time (either
during the continuance of this Agreement or after its termination
howsoever arising) divulge to any person or use of copy for his own or
another's benefit any of the Confidential Information. The Executive will
use reasonable endeavours to prevent the publication or disclosure of any
such information and will notify the Board forthwith of any instances of
disclosure of which he is aware.
9.3 The restrictions set out in clause 9.2 are not to apply to
information:-
9.3.1 divulged by the Executive in the proper performance of his
duties
9.3.2 required by an order of the Board any Court of competent
jurisdiction to be disclosed by the Executive
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9.3.3 within the public domain through no fault of the Executive.
10. TERMINATION
10.1 The company may (without prejudice to and in addition to any other
remedy and notwithstanding the provisions of clause 2.3) terminate this
Agreement (and Executive's employment) immediately and without notice or
payment in lieu of notice upon the death of Executive, the expiration of
the term hereof, or for "Cause". Cause shall exist if the Executive:-
10.1.1 becomes a patient within the meaning of the Mental Health Act
1983 or is otherwise absent from work through sickness or
disability for a period exceeding six months in any twelve
month period
10.1.2 is declared bankrupt by a court of competent jurisdiction,
applies for a receiving order or administration order, has a
receiving order or administration order made against him or
enters into any arrangement or composition with his creditors
or otherwise takes the benefit of any statutory provision for
the relief of insolvent debtors
10.1.3 without reasonable cause neglects refuses or fails to perform
all or any of his duties under this Agreement to an extent
which is material and continues to do so after having been
warned in writing by the Board about such neglect refusal or
failure
10.1.4 at any time and for whatever reason resigns from any
Directorship which he holds within the Group without the
consent of the Board or is disqualified from acting as a
Director.
10.2 A decision to terminate the Executive's employment pursuant to the
provisions of clause 10.1 shall be effective if taken or approved or
ratified by the Board and shall be communicated to the Executive in
writing.
10.3 The employment of the Executive and this Agreement will come to an
end automatically on the last day of the month in which the Executive
reaches normal retirement age (currently age 65), provided, however, that
the Executive may elect, in his sole discretion, to retire and terminate
his Employment and this Agreement upon his attainment of age 62.
10.4 Upon the termination of this Agreement under clause 10.1 or 10.3 the
Executive will be entitled to receive only the Accrued Benefits described
in clause 10.5.3(i). If Executive's employment is terminated during the
term hereof other
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than for Cause, death or the attainment of age 65, Executive shall be
entitled to receive all of the benefits described in clause 10.5.3.
10.5 The Executive's termination of this Agreement is governed under the
provisions set forth below.
10.5.1 Upon termination of this Agreement by Executive other than for
"Good Reason" (as hereinafter defined), Executive shall be
entitled to receive only the Accrued Benefits described in
clause 10.5.3(i).
10.5.2 Executive may terminate his employment under this Agreement
for Good Reason at any time during the term hereof unless this
Agreement has previously expired or been terminated by reason
of (i) the death of Executive, (ii) attainment by Executive of
age 65; (iii) termination of this Agreement by the Company for
Cause, or (iv) voluntary termination of this Agreement by
Executive other than for Good Reason. Termination by Executive
for "Good Reason" shall mean termination by Executive of his
employment hereunder because of:-
(i) the failure by the Company to pay or cause to be paid the
base salary, benefits, and bonus required by this Agreement
and a continuation of such failure for 10 days after the
Company receives notice thereof; or
(ii) a material diminishment in the responsibilities and
duties assigned to Executive by the Company or any other
material breach by the Company of any of the terms of this
Agreement and the continuation of such breach for thirty days
after the Company shall have received written notice of such
breach, which notice shall mean a notice that 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 under
the provision so indicated.
10.5.3 Upon any termination by Executive of his employment under this
Agreement for Good Reason, the Company shall forthwith:-
(i) pay or cause to be paid to Executive in cash the following
accrued benefits ("Accrued Benefits"): (A) all salary earned
or accrued through the termination date; (B) reimburse
Executive for any and all monies advanced by the Executive in
connection with Executive's employment for reasonable and
necessary expenses incurred by Executive through the
termination date; and (C) pay all other amounts and benefits
to which Executive may be entitled under the terms of any
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benefit plan of the Company. Payment of amounts other than
those described in subsection (C) hereof shall be made within
10 days after the termination date. Payment of amounts under
subsection (C) hereof shall be pursuant to the terms of any
such plans either by the Company or a trust implementing such
plan; and
(ii) pay or cause to be paid to Executive (a) for one year
after his termination, the annual base salary payable to
Executive hereunder immediately prior to such termination in
accordance with the Company's normal payroll practices, and
(b) a lump sum, payable upon termination, arrived at by
multiplying (pound)56,250 by a number equal to two minus "X",
where "X" equals the number of times Executive received the
additional amount payable pursuant to clause 4.6 hereof.
In addition, for purposes of the Company's medical, dental and life
insurance programs, Executive shall be considered and deemed for a
period of one year following such termination or until Executive
attains the age of 65 or until reasonably equivalent benefits are
paid or extended by a new employer, whichever first occurs, to be a
full-time employee of the Company and be entitled to all benefits,
rights and privileges thereunder. If at the end of such year, if
Executive has not attained the age of 65 or has not previously
received or is not then receiving equivalent benefits from a new
employer, the Company shall arrange, at its sole cost and expense
(but not including premiums therefor), to enable Executive to
convert the coverage under such polices to equivalent individual
policies.
10.6 On the termination of the Executive's employment for any reason:-
10.6.1 the Executive will at the request of the Company immediately
resign from all directorships, offices and trusteeships within
the Group then held by him without compensation for loss of
office as such director, officer or trustee. The Executive
irrevocably authorizes the Company to appoint some person in
his name and on his behalf to sign any documents and do any
things necessary to effect such resignation should he fail to
do so himself.
10.6.2 the Company may deduct from any salary or wages due from it to
the Executive any monies which are due from wages due the
Executive to it or to the Group.
10.6.3 the Executive will return forthwith to the Company all books,
papers, records, correspondence, notes, memoranda, sketches,
technical drawings, specifications, and other documents and
all other property belonging to the Company or any Group
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Company, to the Company's Head Office or as the Board shall
otherwise direct.
10.7 Any provision of this Agreement which is expressed to have effect
after its termination will continue in force in accordance with its terms.
11. POST TERMINATION OBLIGATIONS
11.1 The Executive shall not, directly or indirectly, during the period of
twelve months immediately following the termination of this Agreement in
any Specified Capacity:-
11.1.1 solicit or endeavour to solicit orders from or entice away
from any Relevant Company as defined in clause 11.4.3 in
connection with any business falling within the definition of
"Specified Business" set out in clause 11.4.2 or deal with any
person, firm, company or organization who shall have been a
client or customer of any Relevant Company during the twelve
months preceding such termination; and
11.1.2 attempt to induce or persuade any person who was employed by
any Relevant Company at the date of the termination of this
agreement or at any time during the twelve months preceding
such termination to leave such employment.
11.2 The Executive shall not, directly or indirectly, during the period of
twelve months after the termination of this agreement within the Specified
Areas in any Specified Capacity carry on or be interested, engaged or
concerned in all or any of the Specified Businesses in competition with
(i) the Company or (ii) any member of the Group.
11.3 The restrictions in clauses 11.1 and 11.2
11.3.1 shall not apply to the Executive if this Agreement is
terminated by the Company in breach of contract or if an
industrial tribunal makes an award of compensation for unfair
dismissal against the Company in respect of the termination of
the Executive's employment; and
11.3.2 any period of notice which is worked by the Executive
following termination or notice of termination by the Company
shall be deducted from the twelve month period for which
paragraphs 11.1 and 11.2 would otherwise apply; and
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11.3.3 are considered by the parties to be reasonable in all the
circumstances and for the legitimate and necessary protection
of the Confidential Information customer and trade connection
of the Company and the Group. If, however, any restriction is
found by a Court to be void as going beyond what is reasonable
in all the circumstances the restrictions will apply with such
modifications as may be necessary to render them valid and
effective.
11.4 For the purposes of this clause:-
11.4.1 "Specified Capacity" means each of the following capacities:-
11.4.1.1 as principal whether solely or jointly with any other
person
11.4.1.2 as partner with any other person
11.4.1.3 as agent for any other person
11.4.1.4 as an employee of any other person
11.4.1.5 as an officer of any company or
11.4.1.6 as the owner of any interest in any shares or other
securities in any company (other than in accordance
with clause 3.4).
11.4.2 "Specified Business" means each of the following taken
separately:-
11.4.2.1 the design, manufacture, sale and distribution of
cranes, lifting equipment and associated and
component products and/or
11.4.2.2 each other business and/or activity of each member of
the Group with or in which the Executive has been
involved or had responsibility for during the 12
months immediately preceding the termination of this
agreement.
11.4.3 "Relevant Company" means (i) the Company; and (ii) any member
of the Group.
11.4.4 "Specified Areas" includes the United Kingdom and countries
forming part of the Middle East/Asia Pacific region.
11.5 Each of the obligations contained in clause 11.1 above shall be a
separate and several obligation.
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12. INVENTIONS
12.1 If at any time during the continuance of this Agreement the Executive
shall discover, make or conceive either by himself or jointly with any
other person or persons any invention, discovery, formula, design,
process, adaptation or improvement ("Intellectual Property") which relates
to or is connected with or capable of being worked or employed in
connection with any trade or business for the time being carried on by the
Company and or the Group he shall forthwith supply in writing full
particulars concerning the same to the Company.
12.2 All ("Intellectual Property") which is either made in the course of
the normal duties of the Executive or in the course of duties falling
outside his normal duties but specifically assigned to him shall upon the
discovery making or conception thereof belong to and vest in the Company
absolutely and beneficially together with all rights to apply for patent
or other protection thereby obtained. The Executive shall if so required
by the Company and at the expense of the Company take all such steps and
execute such documents as may be necessary fully and effectually to vest
in the Company or as it may direct the full benefit of the said
Intellectual Property and to give to the Company or its nominees such
protection as it may require in respect thereof in any part of the world
whether by way of patents or otherwise howsoever.
12.3 In the event of any dispute arising between the Company and the
Executive as to whether or not any invention communicated falls within the
scope of sub-clause 12.2 hereof application will be made jointly by the
Company and the Executive to the Comptroller General of Patents in
accordance with Section 8 of the Patents Act 1977 for determination of the
matter and his decision shall be final and binding.
12.4 The Executive acknowledges that inventions may reasonably be expected
to result from the carrying out of his normal duties and of any duties
specifically assigned to him within the meaning of Section 39(1)(a) of the
Patents Act 1977.
12.5 The Executive acknowledges that because of the nature of his duties
and the particular responsibilities arising from the nature of his duties
he has a special obligation to further the interests of the undertaking of
the Company and the Group within the meaning of Section 39(1)(a) of the
Patents Act 1977.
12.6 The Executive hereby irrevocably appoints the Company to be his
attorney in his name and on his behalf to execute such instrument or do
such things and generally to use his name for the purpose of giving to the
Company (or its nominee) the benefit of the provisions of this clause and
in favour of any third party a certificate in writing signed by any
Director or Secretary of the Company that any instrument or act falls
within the authority hereby conferred shall be conclusive evidence that
such is the case. It is hereby agreed between the parties that the
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provisions of this Clause 12 shall survive in their entirety the
termination of the Executive's employment for whatsoever reason.
13. NOTICES
13.1 Any notice to be given under this Agreement to the Executive may be
given to him personally or sent to him by prepaid first class letter
addressed to him at his last known place of residence. Any notice to be
given to the Company may be served by leaving it at or sending it by
prepaid first class letter to its registered office for the time being.
13.2 Any notice served by post shall be deemed to have been served
forty-eight hours after it was posted and proof that the notice was
properly addressed, pre-paid and posted shall be sufficient evidence of
service.
14. GOVERNING LAW
This agreement shall be interpreted and enforced in accordance with the
laws of England.
15. SUPERSESSION OF PREVIOUS AGREEMENTS
This Agreement supersedes and is in substitution for any subsisting
agreements between the Company (or any Group member) and the Executive
relating to his employment. All such subsisting agreements are terminated
by mutual consent with effect from the Commencement Date.
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IN WITNESS whereof the parties have executed this Agreement on the date
set out above.
EXECUTED as a Deed by
MORRIS MECHANICAL HANDLING LIMITED
in the presence of:-
/s/ Steve Davis
Director
SIGNED as a DEED by the
said MICHAEL JOHN MADDOCK /s/ Michael John Maddock
in the presence of:
/s/ L.J. Belton
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