-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, blQ5d6eWjtQoobAVSYJV0PoRStHodFZ99hpjRl8zJTDA6TsVtANBjxzV0Jj5nUqQ 6sb8MlTn2FVKuL3r8YObCw== 0000918507-95-000020.txt : 19950502 0000918507-95-000020.hdr.sgml : 19950502 ACCESSION NUMBER: 0000918507-95-000020 CONFORMED SUBMISSION TYPE: 10-K/A PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19941231 FILED AS OF DATE: 19950501 SROS: NASD FILER: COMPANY DATA: COMPANY CONFORMED NAME: FIGGIE INTERNATIONAL INC /DE/ CENTRAL INDEX KEY: 0000720032 STANDARD INDUSTRIAL CLASSIFICATION: GENERAL INDUSTRIAL MACHINERY & EQUIPMENT [3560] IRS NUMBER: 521297376 STATE OF INCORPORATION: DE FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-K/A SEC ACT: 1934 Act SEC FILE NUMBER: 001-08591 FILM NUMBER: 95533382 BUSINESS ADDRESS: STREET 1: 4420 SHERWIN RD CITY: WILLOUGHBY STATE: OH ZIP: 44094 BUSINESS PHONE: 2169532700 MAIL ADDRESS: STREET 1: 4420 SHERWIN RD CITY: WILLOUGHBY STATE: OH ZIP: 44094 FORMER COMPANY: FORMER CONFORMED NAME: FIGGIE INTERNATIONAL HOLDINGS INC DATE OF NAME CHANGE: 19870112 10-K/A 1 FIGGIE 10K AMENDMENT SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K/A Amendment No. 1 (Mark One) {X} ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1994 OR { } TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from _________ to ___________ Commission File Number: 1-8591 FIGGIE INTERNATIONAL INC. (Exact name of registrant as specified in its charter) Delaware 52-1297376 (State or other jurisdiction of (I.R.S. Employer Identification No.) incorporation or organization) 4420 Sherwin Road Willoughby, Ohio 44904 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (216) 953-2700 Securities registered pursuant to Section 12(b) of the Act: Title of each class Name of each exchange on which registered 10-3/8% Subordinated Debentures Pacific Stock Exchange Inc. Securities registered pursuant to Section 12(g) of the Act: Class A Common Stock, par value $.10 per share Title of class Class B Common Stock, par value $.10 per share Title of class Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to the filing requirements for at least the past 90 days. Yes {X} No { } Indicate by check mark if disclosure of delinquent filers pursuant to Item 405 of Regulation S-K is not contained herein, 1 and will not be contained, to the best of registrant's knowledge, in definitive proxy or information statements incorporated by reference in Part III of this Form 10-K or any amendment to this Form 10-K. {X} State the aggregate market value of the voting stock held by nonaffiliates of the registrant. The aggregate market value shall be computed by reference to the price at which the stock was sold, or the average bid and asked prices of such stock, as of a specified date within 60 days prior to the date of filing. (See the definition of affiliate in Rule 405.) At 4/10/95 $150,108,773 Indicate the number of shares outstanding of each of the registrant's classes of common stock, as of the latest practicable date. _________________________________________________________________ Class A Common Stock, Par Value $0.10 Per share (13,670,916 shares outstanding as of 4/10/95) Class B Common Stock, Par Value $0.10 Per share (4,724,869 shares outstanding as of 4/10/95) 2 FIGGIE INTERNATIONAL INC. Figgie International Inc., the registrant, hereby amends the following items of its Annual Report on Form 10-K for 1994 as set forth in the pages attached hereto: Items 10, 11, 12, 13 3 Item 10. Directors and Executive Officers of the Registrant (a) Identification of Directors Three Year Term Served as Expires at Annual Director Meeting of Name and Principal Occupation Since Stockholders in FRED J. BRINKMAN, age 66 1992 1995 Consultant; former Partner, Arthur Andersen LLP, public accountants, Senior Partner, Asia - Pacific area from 1978 to 1989 and Managing Partner of the firm's Washington, D.C. office from 1981 to 1987; Director, Washington Gas Light Co. and Charles E. Smith Residential Realty Inc. VINCENT A. CHIARUCCI, age 65 1989 1995 Retired; former President and Chief Operating Officer of Figgie International Inc., 1989 to 1995; Group Vice President of Figgie International Inc.'s Safety Products Distribution Group from 1988 to 1989; Business Consultant (self-employed) from 1986 to 1988; Director, Community Mutual Insurance Company. DALE S. COENEN, age 66(1) President and Director, Coenen & 1964 1995 Co., Inc., investments; Chairman of the Board and President, Trans-Industries, Inc., manufacturer of electronic information systems, environmental systems and mechanical assemblies; Director, The Clark-Reliance Corporation. (1) See discussion under the caption "CERTAIN TRANSACTIONS." 1 Three Year Term Served as Expires at Annual Director Meeting of Name and Principal Occupation Since Stockholders in JOHN P. REILLY, age 51 1995 1995 Chief Executive Officer, Figgie International Inc., since January 4, 1995; President, Figgie International Inc., since February 1, 1995; former President and Chief Operating Officer, Brunswick Corporation, 1993-1994; former President and Chief Executive Officer, Tenneco Automotive, 1987- 1993; Director, Trinova Corporation; Director, Atwood Industries; Director, Barat College. HAROLD B. SCOTT, age 77 1974 1995 Retired; Director, Key Trust N.A.; Chairman of the Board and Chief Executive Officer, Harold B. Scott, Inc.; former Chairman of the Board, Syracuse Supply Co.; former Chairman of the Board, Givaudan Corp.; former President and Chief Executive Officer, U.S.-U.S.S.R. Trade and Economic Council, Inc.; former Assistant Secretary, U.S. Department of Commerce. ALFRED V. GANGNES, age 74 1972 1996 Retired; former President, Figgie International Inc.; former Director, Evaluation Research Corporation. JOHN S. LANAHAN, age 72 1985 1996 Consultant; former Senior Vice President-Commercial, Chessie System Railroads; former President and Managing Director, the Greenbrier Resort Hotel. F. RUSH McKNIGHT, age 65(1) 1985 1996 Partner, Calfee, Halter & Griswold, Cleveland, Ohio, law firm; Managing Partner from 1985 to 1991. (1) See discussion under the caption "CERTAIN TRANSACTIONS." 2 Three Year Term Served as Expires at Annual Director Meeting of Name and Principal Occupation Since Stockholders in HARRISON NESBIT, II, age 68 1969 1996 Retired; Chairman and Director, Godine, Nesbit, McCabe & Co., an insurance brokerage firm, from 1987 to 1993; former General Agent, State of Virginia, Massachusetts Mutual Life Insurance Co.; Director, St. George Metals, Inc.; Director, O-Three Limited. C.B. ROBERTSON, III, age 60 1986 1997 President, CBR Associates, Inc., real estate development. STEVEN L. SIEMBORSKI, age 40 1994 1997 Senior Vice President and Chief Financial Officer, Figgie International Inc., since July 1, 1994; former Partner, Ernst & Young; Certified Public Accountant. A.A. SOMMER, JR., age 71 1986 1997 Counsel, Morgan, Lewis & Bockius, Washington, D.C., law firm, since October 1, 1994; former Partner, Morgan, Lewis & Bockius, 1979-1994; Chairman, Public Oversight Board of the American Institute of Certified Public Accountants; Vice Chairman, Board of Governors, National Association of Securities Dealers. WALTER M. VANNOY, age 67 Chairman of the Board, Figgie 1981 1997 International Inc., since May 18, 1994; former Chief Executive Officer, Figgie International Inc., 1994-1995; former Vice Chairman of the Board, Figgie International Inc., February 1994 - May 1994; President, Vannoy Enterprises; Director, Illinois Power Company; Director, ChemPower, Inc.; former Vice Chairman, McDermott International Inc.; former President and Chief Operating Officer, Babcock & Wilcox. 3 (b) Identification of Executive Officers Information with respect to the Executive Officers of the Corporation is set forth under the caption "Executive Officers of the Registrant" contained in Part I, Item 1 of the Corporation's 1994 Form 10-K, which information is incorporated herein by reference. Item 11. Executive Compensation DIRECTORS' COMPENSATION The Directors, except for those who are also employees of the Corporation, receive an annual stipend of $20,000. In addition, the non-employee members of the Finance & Executive Committee receive $9,000 per year and members of the remaining committees other than the Stock Option Committee receive $6,000 per year. The non-employee chairmen of committees receive an additional $1,000 per year for each chairmanship held except for the Chairman of the Stock Option Committee. The Corporation has agreed to pay a death benefit, in the amount of $200,000 to the estate of each Director, other than a director who is also an employee, upon his death. This benefit is provided to a Director while in office and after retirement if he has served five (5) years. The benefit is payable from the general assets of the Corporation and the Corporation has insured this liability by purchasing life insurance policies on the lives of the eligible Directors. The Board of Directors and committee members also receive travel and lodging expenses in connection with their attendance at Board and committee meetings. EXECUTIVE COMPENSATION Summary of Compensation The following table shows information concerning the annual and long-term compensation earned during the last three fiscal years by the Corporation's Chief Executive Officer as of December 31, 1994, each of the four other most highly compensated executives of the Corporation, and Harry E. Figgie, Jr., who resigned as Chief Executive Officer on May 18, 1994. 4 SUMMARY COMPENSATION TABLE
Long Term Compensation Awards Annual Compensation Name and Other Restricted Principal Annual Stock All Other Position Year Salary Bonus(1) Compensation(2) Award(s) (3) Compensation(4) Walter M. Vannoy (5) 1994 $333,333 0 $ 62,599 $1,039,563 $ 61,694 Chairman and CEO Vincent Chiarucci 1994 394,375 0 - 43,097 President 1993 371,875 0 1,434,825 47,838 1992 331,250 $332,050 - 39,187 L. A. Harthun 1994 229,166 0 - 18,520 Senior Vice President 1993 219,000 0 277,405 23,026 International, General Counsel and Secretary 1992 207,333 189,856 - 26,723 Steven L. Siemborski (6) 1994 175,000 25,000 248,438 60,363 Senior Vice President and Chief Financial Officer Charles C. Rieger, Jr. 1994 168,000 0 - 16,191 Senior Vice President 1993 161,000 0 - 19,210 1992 156,667 50,000 - 20,751 Harry E. Figgie, Jr. 1994 293,769 0 68,381 - 521,618 Former Chairman and CEO 1993 775,000 0 118,861 2,539,087 644,541 1992 695,000 663,692 92,758 - 957,662 5 (1) (a) Includes, except with respect to Mr. Siemborski, the full amount of the discretionary component of the bonus awarded with respect to the applicable fiscal year, although only one quarter of that bonus is paid in the year it is declared and the remaining three quarters of that bonus are paid in equal installments in each of the three years after the discretionary bonus is declared if the executive continues to be employed by the Corporation or if the termination of employment is due to death, disability or retirement. In cases of termination for any other reason, the Compensation Committee has sole discretion to determine whether the remaining bonus installments will be paid. (b) Mr. Siemborski earned a $25,000 incentive bonus pursuant to the terms of his employment agreement discussed in the section entitled "Employment and Severance Agreements." (2) (a) The amount indicated represents Mr. Vannoy's use of a company car ($9,735) and Mr. Vannoy's moving expenses ($52,864). (b) The amounts indicated represent the incremental cost to the Corporation of expenses associated with Mr. Figgie's use of a company car ($47,632, $46,971 and $34,653, in 1994, 1993 and 1992, respectively), aircraft ($8,558, $19,078 and $26,354, in 1994, 1993 and 1992, respectively) and club dues ($12,195, $39,753 and $31,751, in 1994, 1993 and 1992, respectively), and, for 1993, $13,059 relating to an interest free loan provided to Mr. Figgie at the time the restrictions on the restricted stock issued under the 1988 Restricted Stock Purchase Plan for Employees (the "1988 Restricted Stock Plan") were terminated in December 1992. (3) The transfer and pledge restrictions on the restricted shares reflected in the table with respect to 1994 and 1993 are scheduled to lapse upon the termination of the Restricted Stock Plan on July 1, 1998 under the terms of the plan. As of December 31, 1994, the aggregate number and the value of the shares (less the purchase price paid by the executive) of restricted stock held by the executives were as follows: Mr. Vannoy, 98,744 shares of Class A Common Stock and 16,753 shares of Class B Common Stock having a market value (less purchase price) of $594,016; Mr. Chiarucci, 91,000 shares of Class A Common Stock having a market value (less purchase price) of $466,888; Mr. Harthun, 17,613 shares of Class A Common Stock having a market value (less purchase price) of $90,267; Mr. Siemborski, 37,500 shares of Class A Common Stock having a market value (less purchase price) of $192,188; Mr. Rieger, 17,613 shares of Class A Common Stock having a market value (less purchase price) of $90,267; Mr. Figgie, 5,645 shares of Class A Common Stock and 10,000 shares of Class B Common Stock having a market value (less purchase price) of $81,431. (4) (a) Includes the rating payment paid by the Corporation on a split-dollar insurance policy for the benefit of Mr. Figgie and the discounted value of the benefit to each of the Executive Officers named in the Summary Compensation Table (the "named executive officers") of the premium paid by the Corporation during 1994 for one or more split-dollar insurance policies under which the executive receives an interest in the cash surrender value of the policy at the time when the ownership of the policy is split between the executive and the Corporation, which then becomes the beneficiary of a policy on the executive's life with a cash surrender value equivalent to the Corporation's premium payments. The Executive Officers paid a portion of the premium based upon a rate for term life insurance. The amounts reflected in the table for split-dollar insurance are as follows: Mr. Vannoy -- $41,387; Mr. Chiarucci -- $39,540; Mr. Harthun -- $13,446; Mr. Siemborski -- $8,203; Mr. Rieger -- $11,777; and Mr. Figgie -- $113,916. (b) Includes the monthly payments made by the Corporation to Mr. Figgie for 1994 in the aggregate amount of $407,702 under the Corporation's Senior Executive Benefits Program. The program formerly provided retirement and other benefits prior to retirement in the event that a person remained an employee of the Corporation after the normal retirement date of age 65 (or, in certain circumstances, age 62). (c) Includes the allocations for 1994 of equivalent shares of Class A Common Stock or Class B Common Stock under the Figgie International Inc. Stock Ownership Trust and Plan (the "ESOP"), the ESOP for 6 Salaried Employees and the Figgie International Inc. Stock Bonus Trust and Plan (the "Stock Bonus Plan"). The dollar values as of December 31, 1994 of the allocations for each of the named executive officers of the Corporation are as follows: Mr. Vannoy -- $3,557; Mr. Chiarucci -- $3,557; Mr. Harthun -- $5,074; Mr. Siemborski -- $2,160; and Mr. Rieger -- $4,414. (d) Includes fees paid to Mr. Vannoy in the amount of $16,750 for services as a director of the Corporation. (e) Includes $50,000 paid to Mr. Siemborski pursuant to the terms of his employment agreement. See the section entitled "Employment and Severance Agreements." (5) Mr. Vannoy became CEO of the Corporation on May 18, 1994 and Vice Chairman of the Corporation on February 16, 1994. He was not employed by the Corporation as an officer prior to 1994. (6) Mr. Siemborski became Senior Vice President and Chief Financial Officer of the Corporation effective July 1, 1994. He was not employed by the Corporation prior to 1994.
RETIREMENT PLANS Retirement Income Plan II All of the Executive Officers of the Corporation are currently accruing retirement income credits under, or will accrue them upon their satisfaction of the eligibility requirements set forth in, the Salaried Employee Retirement Income Provisions of the Figgie International Inc. Retirement Income Plan II (the "Salaried Provisions"), a defined benefit pension plan. The Salaried Provisions cover the salaried employees of the Corporation except employees of certain non-participating divisions and subsidiaries. Directors who are not employees are not entitled to receive retirement benefits under the Retirement Income Plan II. In general, the Salaried Provisions, as adopted effective July 31, 1993, provide that salaried employees accrue dollar units of retirement income credits for each calendar year of participation in the Salaried Provisions on the basis of their "Annual Pensionable Earnings." To receive full benefits under the Salaried Provisions, employees must contribute 2% of their "Annual Pensionable Earnings" over their "Covered Compensation." The following sets forth the percentage Annual Pensionable Earnings which is accrued as a Retirement Income Credit under the Salaried Provision: Annual Pensionable Earnings (1) 0-100% of Over 100% of Covered Covered Compensation Compensation (2) (2) Retirement Income Credit 0.7% 1.2% 7 (1) "Annual Pensionable Earnings" includes cash salaries and bonuses received by the participant but excludes any such earnings in excess of $150,000 for calendar year 1995 and $150,000 thereafter (plus any increase for cost-of-living as shall be prescribed by the Secretary of the Treasury pursuant to Sections 401(a)(17) and 415(d) of the Internal Revenue Code). (2) "Covered Compensation" means the average of the contributions and benefit bases in effect under Section 230 of the Social Security Act for each such calendar year in the 35 calendar years ending immediately prior to each calendar year. For calendar year 1995, Covered Compensation will equal $24,312. Generally, any salaried employee of the Corporation except employees of certain nonparticipating divisions and subsidiaries is eligible to participate in the Salaried Provisions after the earlier of the completion of one year of service or attainment of age 40. A participant becomes vested in the Salaried Provisions five years after the participant's hire date. Upon reaching normal retirement at age 65, each participant is generally entitled to receive an annual retirement benefit for life equal to the total of the retirement income credits accrued by him during his period of participation. Such benefit is not subject to any deduction for Social Security benefits. A reduced annual retirement income benefit may be payable to a retired employee under other actuarially equivalent forms of pay-out provided for in the Salaried Provisions. The Salaried Provisions also contain provisions for early retirement and preretirement death benefits payable to spouses and dependent children of certain deceased participants. During 1993, certain employees of the Corporation and its subsidiaries accrued retirement benefits under separate retirement plans of the Corporation which cover employees of its divisions or subsidiaries which are not or were not at the time participating under the Salaried Provisions or a prior plan which was terminated on November 21, 1988 (the "Prior Plan"). As of December 31, 1994, the annual benefits payable upon retirement under the Salaried Provisions, including accrued benefits from the Prior Plan, to the individuals named in the Summary Compensation Table are stated below. In determining such benefits, the executives' earnings were estimated through 1995 and were assumed not to exceed $150,000 after 1995. Covered Compensation ($24,312 for 1995) was assumed not to increase after 1995, the maximum allowable employer-funded benefit under the Internal Revenue Code (which is the greater of $118,800 or the accrued benefit as of December 31, 1982) was assumed to continue to retirement and executives were assumed to continue working until at least age 65 and to be fully vested. Based upon the 8 preceding assumptions, the annual benefits payable to such persons including benefits payable as a result of voluntary contributions and the accrued benefits from the Prior Plan are as follows: Mr. Vannoy -- $133; Mr. Chiarucci -- $13,704; Mr. Harthun -- $99,770; Mr. Siemborski -- $42,219; Mr. Rieger -- $44,118; and Mr. Figgie -- $130,590. Senior Executive Benefits Program The following plan table shows the annual benefits upon retirement at age 65 in 1994 for various combinations of compensation and lengths of service which may be payable under the Corporation's Senior Executive Benefits Program (the "SEBP") to the named executive officers. These amounts are paid in addition to the amounts payable under the Corporation's Salaried Provisions discussed above. 9 PENSION PLAN TABLE
Annual Benefit for Years Remuner- of Credited Service Shown(1) ation(2) 10 Years 15 Years 20 Years 25 Years 30 Years 35 Years $125,000 $ 15,800 $ 38,991 $ 32,099 $ 25,207 $ 18,314 $ 11,423 150,000 26,634 50,741 42,349 33,957 25,565 17,173 175,000 37,667 66,991 58,599 50,207 41,815 33,423 200,000 48,301 83,241 74,849 66,457 58,065 49,673 225,000 59,134 99,491 91,099 82,707 74,315 65,923 250,000 69,967 115,741 107,349 98,957 90,565 82,173 300,000 91,634 148,241 139,849 131,457 123,065 114,673 400,000 134,967 213,241 204,849 196,457 188,065 179,673 450,000 156,634 245,741 237,349 228,957 220,565 212,173 500,000 178,300 278,241 269,849 261,457 253,065 244,673 (1) Annual benefits are computed on the basis of 100% joint and survivor benefit. The annual benefits reflected in the table constitute 65% of final covered remuneration, less assumed social security benefits of $21,582 and less assumed amounts of benefits payable under the Salaried Provisions. The benefits under the Salaried Provisions have been calculated based upon the assumptions that the amount of Covered Compensation, as defined in the Salaried Provisions, remains fixed and the amount of Annual Pensionable Earnings, as defined in the Salaried Provisions, is limited to amounts that do not exceed $150,000. (See the description of the Salaried Provisions set forth above.) The annual benefits will be increased by 10% of the final covered remuneration for a participant in the SEBP as of February 18, 1987 or a person hired prior to February 18, 1987 who completes 20 years of service. The annual benefits will be reduced by any retirement or deferred compensation plans of other employers. (2) Consists of base salary and the installment payments that have been received by an executive under the discretionary bonus component of the Corporation's incentive bonus arrangements.
10 As of December 31, 1994, the credit years of service for the 6 individuals named in the Summary Compensation Table are as follows: Walter M. Vannoy, 1 year; Vincent A. Chiarucci, 7 years; L. A. Harthun, 29 years; Steven L. Siemborski, 0 years; Charles C. Rieger, Jr., 12 years; and Harry E. Figgie, Jr., 30 years. Harry E. Figgie, Jr. is not accruing any additional benefits under the SEBP since his resignation from the Corporation. EMPLOYMENT AND SEVERANCE AGREEMENTS The Corporation entered into an employment agreement dated November 18, 1988 (the "Employment Agreement") with Harry E. Figgie, Jr., the former Chairman of the Board and former Chief Executive Officer of the Corporation. As noted above, Mr. Figgie resigned from both of his positions on May 18, 1994. The Employment Agreement, which was in effect during 1994, provided for Mr. Figgie's employment through December 31, 1995, at an annual base salary of at least $500,000. Mr. Figgie had the option under certain circumstances of extending his employment arrangement for an additional 3 years to December 31, 1998. In addition to his base salary, Mr. Figgie was entitled to receive both a discretionary bonus, which could not be less than 60% of his base salary for the fiscal year to which such bonus relates, and a formula-based bonus, and to participate in other benefit plans provided by the Corporation. Pursuant to the terms of the Employment Agreement, Mr. Figgie purchased 72,812 shares of Class A Common Stock and 27,188 shares of Class B Common Stock at a price of $1.00 per share pursuant to the 1988 Restricted Stock Plan as a sign-on bonus. Those shares were forfeitable under the terms of the 1988 Restricted Stock Plan until its termination in December 1992. The Employment Agreement also provided that the Corporation could terminate the employment of Mr. Figgie for cause or upon his disability (as defined) and that Mr. Figgie could terminate his employment for good reason (as defined, including actions by the Corporation resulting in a diminution of his position, authority, duties or responsibilities). The Employment Agreement provided that if Mr. Figgie elected to terminate his employment for good reason or his employment was terminated by the Corporation other than for cause, he would be entitled to receive an amount equal to (i) his base salary, discretionary bonus and formula-based bonus for the remaining term of the employment period, (ii) any unpaid bonuses previously awarded for years prior to such termination year, (iii) any other benefits provided under the Corporation's plans, programs and practices, and (iv) those amounts otherwise payable under his consulting arrangement (see discussion below). Further, the Employment Agreement provided that in the event Mr. Figgie's employment was terminated by the Corporation for cause or by Mr. Figgie other than for good reason, or in the event of his death or disability, Mr. Figgie (or his successor in 11 interest) would be entitled to receive only his base salary through the date of termination, any unpaid bonuses previously awarded for years prior to such termination year and such other benefits through the date of termination as may be available at such time pursuant to the terms of governing Corporation plans, programs and practices. The Employment Agreement provided that upon completion of his term of employment under the Employment Agreement (including any extension thereof to December 31, 1998), Mr. Figgie would become a consultant to the Corporation under the terms of the Employment Agreement for an additional three-year period at 55% of his prior level of compensation. The Corporation is discussing with Mr. Figgie the resolution of various matters relating to the Employment Agreement. The Corporation entered into an employment agreement dated October 28, 1994 (the "Agreement") with Walter M. Vannoy. Mr. Vannoy's Agreement provides for Mr. Vannoy's employment as Vice- Chairman of the Board of Directors between February 16, 1994 and May 18, 1994, as Chief Executive Officer from May 18, 1994 until such time as a new Chief Executive Officer is duly elected and takes office (the "New CEO Start Date"), and as Chairman of the Board from May 18, 1994 until 90 days after the New CEO Start Date. Mr. Vannoy's annual base salary under the Agreement is $400,000. In addition to his base salary, Mr. Vannoy is entitled to receive a discretionary bonus under the regular bonus programs of the Corporation, to participate in other benefit plans provided by the Corporation, and to be reimbursed for all reasonable expenses incurred while performing his duties under the Agreement. Pursuant to the Agreement, the 115,497 shares of restricted stock granted to Mr. Vannoy under the 1993 Restricted Stock Purchase Plan For Employees are subject to repurchase by the Corporation upon termination of Mr. Vannoy's employment with the Corporation as if he had retired. Further, the Agreement provides that in the event Mr. Vannoy's employment is terminated due to death or disability (as defined), by the Corporation without good cause (as defined), or by Mr. Vannoy for good reason (as defined), Mr. Vannoy (or his successor in interest) would be entitled to a pro rata portion of any bonus payable to Mr. Vannoy under the Agreement and the base salary that Mr. Vannoy would have otherwise received: (i)if employment is terminated prior to the 90th day following the New CEO Start Date, for the number of days subsequent to his termination of employment which is equal to the number of days between February 16, 1994 and his date of termination of employment; or (ii)if terminated after the 90th day following the New CEO Start Date, for the number of days between his date of termination of employment and such date which represents the number of days after the 90th day following the New CEO Start Date as will equal the number of days between February 16, 1994 and the 90th day following the New CEO Start Date (the "Separation Day"). The Agreement provides that upon completion of his term of employment under the Agreement until the Separation Day, Mr. Vannoy will continue to serve the Corporation 12 on a part-time basis with such title, if any, as the Board of Directors deems appropriate. The Corporation entered into an employment Agreement dated July 1, 1994 (the "Employment Contract") with Steven L. Siemborski. The Employment Contract provides for Mr. Siemborski's employment as Senior Vice President and Chief Financial Officer of the Corporation, at an annual base salary of $350,000. In addition to his base salary, Mr. Siemborski is entitled to receive: (i) a special $50,000 transition payment, an incentive bonus of $25,000 for reducing financial consulting fees by 50% during his first four months of employment (to be paid on June 30, 1995) and an additional incentive bonus of $50,000 for reducing such financial consulting fees to zero (0) by June 30, 1995 (to be paid on June 30, 1995) during the first year of the Employment Contract; (ii) the greater of a bonus of $50,000 or the bonus payable to him with respect to the 1995 calendar year under the regular bonus programs of the Corporation during the second year of the Employment Contract; and (iii) a discretionary bonus under the regular bonus programs of the Corporation during the third and fourth years of the Employment Contract. Mr. Siemborski also received the right to purchase 150,000 shares of Figgie's Common Stock, the class to be determined by the Stock Option Committee, for one dollar ($1.00) per share in four annual increments of 37,500 shares beginning July 1, 1994 (such rights to expire if not exercised by Mr. Siemborski prior to the following November 1st), to participate in other benefit plans provided by the Corporation, and to be reimbursed for all reasonable expenses incurred while performing his duties under the Employment Contract. Further, the Employment Contract provides that in the event Mr. Siemborski's employment is terminated due to death or disability (as defined), Mr. Siemborski (or his successor in interest) would be entitled to the pro rata portion of any bonus which would have been payable during the second, third and fourth years of the Employment Contract and to his stock purchase rights under the Employment Contract. The Employment Contract also provides that in the event Mr. Siemborski's employment is terminated by the Corporation without good cause (as defined) or by Mr. Siemborski for good reason (as defined), Mr. Siemborski would be entitled to his stock purchase rights under the Employment Contract and to severance pay based upon the date of termination of his employment as follows: (i) if employment is terminated during the first year of the Employment Contract, a proportional amount of $400,000 with respect to the year of his termination and $400,000, $350,000 and $350,000 over the succeeding three years; (ii) if employment is terminated during the second year of the Employment Contract, a proportional amount of $400,000 with respect to the year of his termination and $350,000 and $350,000 over the next succeeding two years; or (iii) if employment is terminated during the third year of the Employment Contract, a 13 proportional amount of $350,000 with respect to the year of his termination and $350,000 over the succeeding one year period. In May 1989, all corporate officers and corporate level department heads, other than Mr. Figgie, who reported to the Chief Executive Officer of the Corporation, entered into severance agreements (the "Severance Agreements") with the Corporation which become effective in the event of a change of control of the Corporation (as defined). The Severance Agreements provide compensation in the event that within 3 years of such change of control the executive is terminated other than for cause (as defined) or such employment terminates because the executive's duties, title, compensation, employee benefits or place of employment are adversely changed. In addition, if the executive terminates his employment during a period of 30 days following the end of 6 months after a change of control, the executive is entitled to severance compensation. Upon termination of employment where severance compensation is payable under the Severance Agreements, the executive is entitled to receive a payment comprised of 2 times his highest annual base salary, discretionary bonus and formula-based bonus awards through the date of his termination of employment, together with payments relating to the fair market value of any restricted stock forfeited pursuant to the terms of the related restricted stock purchase plan by such executive, all amounts payable which had previously been deferred on such executive's behalf and amounts provided under the Corporation's compensation or retirement plans to the extent such executive participated in such plan or plans at the time of such change of control. These payments are subject to reduction to the extent necessary to keep the aggregate amount of such severance compensation within the limits imposed by Section 280G of the Internal Revenue Code. COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION The Management Development & Compensation Committee of the Board of Directors consists of Harrison Nesbit, II, Dale S. Coenen, Fred J. Brinkman, Alfred V. Gangnes, John P. Reilly and Walter M. Vannoy. During 1994, the same individuals other than Mr. Reilly served on that Committee as well as Harry E. Figgie, Jr., Dr. Harry E. Figgie, III and Russell W. McFall. Until his retirement from the Corporation on May 18, 1994, Harry E. Figgie, Jr. was the Chairman of the Board of the Corporation and its Chief Executive Officer and the Chairman of the Board of The Clark-Reliance Corporation. Dr. Figgie is the President of The Clark-Reliance Corporation and, until March 15, 1994, was Vice Chairman of Technology and Strategic Planning of the Corporation. Mr. Coenen is a director of The Clark-Reliance Corporation. 14 The Stock Option Committee of the Board of Directors currently consists of Dale S. Coenen, A.A. Sommer, Jr. and Fred J. Brinkman. During 1994, the same individuals served on that Committee. On August 25, 1993, the Corporation made a loan to Harry E. Figgie, Jr. to enable him to acquire restricted shares under the Restricted Stock Plan. The loan was in the amount of $156,450, was payable on demand and bore an interest rate equal to the Bank of Boston's prime rate. The full amount of the loan was repaid in April 1994. Nancy Figgie, the wife of Harry E. Figgie, Jr., was Vice President of Facilities Planning of the Corporation until her resignation in February 1994; Matthew Figgie, the son of Harry E. Figgie, Jr., was Director of Mergers and Acquisitions, Currency Trading and Corporate Investments of the Corporation prior to his resignation in May 1994; and Dr. Harry E. Figgie, III was Vice Chairman and a Director of the Corporation until his resignation from those positions in March and May 1994, respectively. In 1994, Mrs. Figgie, Matthew Figgie and Dr. Figgie collectively received from the Corporation $388,419. As of October 30, 1991, the Corporation purchased $1,000,000 of 10% Convertible Subordinated Debentures due October 30, 2001 issued by Trans-Industries, Inc. The debentures provide for prepayment without premium of $142,857 per year commencing in 1995 and the additional optional prepayments at declining premiums over the same period. The debentures are convertible at any time at the option of the Corporation into common stock of Trans-Industries at $2.00 per share. Mr. Coenen is President, Chairman of the Board and a shareholder of Trans-Industries and Mr. Harry E. Figgie, Jr. is also a shareholder of Trans-Industries. The common stock of Trans-Industries is publicly traded in the over-the-counter market. The purchase was approved by the Board of Directors with Mr. Figgie and Mr. Coenen abstaining. 15 Item 12. Security Ownership of Certain Beneficial Owners and Management PRINCIPAL STOCKHOLDERS The stockholders named in the following table are those which are known to the Corporation to be the beneficial owners of 5% or more of the Corporation's Class A Common Stock or Class B Common Stock. Unless otherwise indicated, the information is as of December 31, 1994. For purposes of this table, and as used elsewhere in this Form 10-K, the term "beneficial owner" means any person who, directly or indirectly, has or shares the power to vote, or to direct the voting of, a security or the power to dispose, or to direct the disposition of, a security. Except as otherwise indicated, the Corporation believes that each individual owner listed below exercises sole voting and dispositive power over his or its shares.
Amount and Nature of Name and Address of Beneficial Percent Title of Class Beneficial Owner Ownership of Class Class A Common Stock NewSouth Capital Management, Inc. 755 Crossover Lane, Suite 233 Memphis, Tennessee 38117 2,094,785(1) 15.3% Class A Common Stock The Goldman Sachs Group, L.P. 85 Broad Street New York, NY 10004 1,865,300(2) 13.6% Class A Common Stock Wellington Management Company 75 State Street Boston, MA 02109 803,000(3) 5.9% Class A Common Stock First Pacific Advisors, Inc. 11400 West Olympic Boulevard, Suite 1200 Los Angeles, CA 90064 755,000(4) 5.5% Class B Common Stock Harry E. Figgie, Jr. 37001 Shaker Boulevard Hunting Valley, Ohio 44022 759,534(5) 16.1% (1) This amount, as reflected in a report on Schedule 13G dated June 3, 1994, consists of 2,007,785 shares as to which the reporting person claims sole voting power, 87,000 shares as to which the reporting person claims shared voting power and 2,094,785 shares as to which the reporting person claims sole dispositive power. 16 (2) This amount, as reflected in a report on Schedule 13G dated February 10, 1995, filed by The Goldman Sachs Group, L.P., Goldman Sachs & Co. and Goldman Sachs Equity Portfolios, Inc. (on behalf of Goldman Sachs Small Cap Equity Fund), as a group, consists of 1,865,300 shares as to which The Goldman Sachs Group, L.P. and Goldman Sachs & Co. claim shared voting power and shared dispositive power and 1,228,500 shares as to which Goldman Sachs Equity Portfolios, Inc. (on behalf of Goldman Sachs Small Cap Equity Fund) claims shared voting power and shared dispositive power. (3) This amount, as reflected in a report on Schedule 13G dated February 3, 1995, consists of 565,300 shares as to which the reporting person claims shared voting power and 803,000 shares as to which the reporting person claims shared dispositive power. (4) This amount, as reflected in a report on Schedule 13G dated February 13, 1995, consists of 755,000 shares as to which the reporting person claims shared voting power and shared dispositive power. (5) For a description of Mr. Figgie's beneficial ownership, see the table under the caption "STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND A FORMER EXECUTIVE OFFICER" and footnotes (5), (10) and (11) thereto.
17 STOCK OWNERSHIP OF DIRECTORS, EXECUTIVE OFFICERS AND A FORMER EXECUTIVE OFFICER The following table and notes thereto set forth information, as of January 17, 1995, with respect to the beneficial ownership of shares of Class A and Class B Common Stock by each Director, each Executive Officer named in the Summary Compensation Table, and Harry E. Figgie, Jr. (who resigned as Chief Executive Officer, Chairman and Director of the Corporation on May 18, 1994) and, as a group, by the current Directors and Executive Officers of the Corporation, based upon information furnished to the Corporation by such persons.
Amount of Beneficial Ownership as of January 17,1995 (1) Class A Percentage Class B Percentage Name of Beneficial Owner Common Stock of Class Common Stock of Class Fred J. Brinkman 500 * 3,000 * Vincent A. Chiarucci 28,904(2) * 9,050(2) * Dale S. Coenen 300 * 3,000 * Alfred V. Gangnes 22,371(3) * 12,504(3) * John S. Lanahan 358 * 6,536 * F. Rush McKnight 1,315(4) * 6,503(4)(5) * Harrison Nesbit, II 1,005(6) * 6,562(6) * John P. Reilly 30,000 * 0 * C.B. Robertson, III 2,500(7) * 9,000 * Harold B. Scott 7,600(8) * 4,500 * Steven L. Siemborski 37,866(2) * 324(2) * A. A. Sommer, Jr. 2,250 * 7,750 * Walter M. Vannoy 100,511(2) * 23,446(2) * L. A. Harthun 19,390(2) * 6,319(2) * Charles C. Rieger, Jr. 22,724(2) * 7,089(2) * Harry E. Figgie, Jr.(9) 328,060(10) 2.4% 759,534(5)(11) 16.1% All Current Directors and Executive Officers as a Group** (16 persons) 285,836(2) 2.1% 106,154(2) 2.2% * Less than 1%. ** Does not include the beneficial ownership of Messrs. Figgie and Chiarucci who are not current Executive Officers of the Corporation. 18 (1) Except as otherwise indicated in footnotes (2), (3), (8) and (11), each Director, Executive Officer or former Executive Officer owning shares listed or included in this table exercises sole voting and dispositive power over such shares. (2) These amounts include shares of Class A and Class B Common Stock held by the ESOP, the ESOP for Salaried Employees and the Stock Bonus Plan which are subject to certain pass-through voting and tendering rights. Participants in those plans are entitled to instruct the Trustee, on a confidential basis, on how to vote and how to respond to a tender or exchange offer for shares allocated to their accounts and on how to vote and how to respond to a tender or exchange offer for certain of the unallocated shares. Under the trust agreement, as amended in November 1994, allocated and unallocated shares for which no instructions are received can be voted or tendered by the Trustee. Each active participant is entitled to instruct the Trustee as to the voting or tendering of a portion of the unallocated shares in the proportion that his prior year's compensation (subject to a maximum amount of compensation) bears to the prior year's compensation of all active participants. The numbers of shares of Class A and Class B Common Stock held by the ESOP for Salaried Employees, the ESOP and the Stock Bonus Plan which have been allocated to the named Executive Officers and all current Executive Officers as a group, including the numbers of shares expected to be allocated as of December 31, 1994, are as follows: (1) allocated shares in the ESOP for Salaried Employees: Mr. Vannoy -- 195 shares of Class A Common Stock and 78 shares of Class B Common Stock; Mr. Chiarucci -- 1,152 shares of Class A Common Stock and 547 shares of Class B Common Stock; Mr. Harthun -- 1,355 shares of Class A Common Stock and 634 shares of Class B Common Stock; Mr. Siemborski -- 120 shares of Class A Common Stock and 48 shares of Class B Common Stock; Mr. Rieger -- 1,261 shares of Class A Common Stock and 590 shares of Class B Common Stock; and all current Executive Officers as a group -- 3,152 shares of Class A Common Stock and 1,440 shares of Class B Common Stock; (2) allocated shares in the ESOP: Mr. Vannoy -- 300 shares of Class B Common Stock; Mr. Chiarucci -- 792 shares of Class B Common Stock; Mr. Harthun -- 1,003 shares of Class B Common Stock; Mr. Siemborski -- 180 shares of Class B Common Stock; Mr. Rieger -- 892 shares of Class B Common Stock; and all current Executive Officers as a group -- 2,692 shares of Class B Common Stock; and (3) allocated shares in the Stock Bonus Plan: Mr. Chiarucci -- 16 shares of Class B Common Stock; Mr. Harthun -- 4,517 shares of Class B Common Stock; Mr. Rieger -- 830 shares of Class B Common Stock; and all current Executive Officers as a group -- 5,347 shares of Class B Common Stock. The numbers of shares of Class A and Class B Common Stock held by the ESOP for Salaried Employees which have not been allocated and are reflected in the table above as beneficially owned by the named executive officers and all current Executive Officers as a group are as follows: Mr. Vannoy -- 422 shares of Class A Common Stock and 165 shares of Class B Common Stock; Mr. Chiarucci -- 422 shares of Class A Common Stock and 165 shares of Class B Common Stock; Mr. Harthun -- 422 shares of Class A Common Stock and 165 shares of Class B Common Stock; Mr. Siemborski -- 246 shares of Class A Common Stock and 96 shares of Class B Common Stock; Mr. Rieger -- 422 shares of Class A Common Stock and 165 shares of Class B Common Stock; and all current Executive Officers as a group -- 1,933 shares of Class A Common Stock and 758 shares of Class B Common Stock. (3) Mr. Gangnes shares voting and dispositive power with respect to 22,371 shares of Class A Common Stock and 12,504 shares of Class B Common Stock with his wife. (4) These amounts do not include 575 shares of Class A Common Stock and 575 shares of Class B Common Stock owned by Mr. McKnight's wife. (5) These amounts do not include 47,493 shares of Class B Common Stock held in a trust established by Mr. Figgie for a member of his immediate family. Mr. McKnight serves as 1 of 3 trustees of such trust. 19 (6) These amounts do not include 2,405 shares of Class A Common Stock and 47 shares of Class B Common Stock owned by Mr. Nesbit's wife. (7) This amount does not include 2,500 shares of Class A Common Stock owned by Mr. Robertson's wife. (8) This amount includes 3,600 shares of Class A Common Stock for which Mr. Scott has shared voting and dispositive power as a co-trustee of a trust and 500 shares of Class A Common Stock for which Mr. Scott has shared voting and dispositive power as the custodian of a custodial account for his minor children. (9) Harry E. Figgie, Jr. resigned from his positions as the Corporation's Chief Executive Officer and Chairman of the Board as well as a member of the Board on May 18, 1994. (10) The aggregate number of shares beneficially owned by Mr. Figgie excludes a total of 40,401 shares of Class A Stock beneficially owned, or that may be deemed to be beneficially owned, by members of Mr. Figgie's immediate family, certain Figgie family trusts and Clark-Reliance Corporation, an Ohio corporation ("Clark-Reliance") of which Mr. Figgie was Chairman of the Board and Chief Executive Officer until his resignation on October 19, 1994 and is presently Chairman Emeritus of the Board. (As of December 28, 1994, Mr. Figgie owned 22.7% of the outstanding shares of common stock of Clark- Reliance, Mr. Figgie's wife owned 22.7% of the outstanding shares of common stock of Clark-Reliance, and each of Mr. Figgie's adult sons, Dr. Harry E. Figgie, III, Dr. Mark P. Figgie, and Matthew P. Figgie, owned 18.2% of the outstanding shares of common stock of Clark-Reliance.) Of the excluded shares: (i) 37,844 shares of Class A Common Stock are owned by Clark-Reliance; (ii) 2,499 shares of Class A Common Stock are held in trust for Matthew P. Figgie, Mr. Figgie's son, for which Dr. Harry E. Figgie, III, Mr. McKnight and Mr. David L. Carpenter act as trustees; and (iii) 58 shares of Class A Common Stock are owned by Mr. Figgie's wife. (11) This amount consists of 759,534 shares of Class B Common Stock as to which Mr. Figgie has sole voting power, 749,534 shares of Class B Common Stock as to which Mr. Figgie has sole dispositive power, and 10,000 shares of Class B Common Stock as to which Mr. Figgie has shared dispositive power. Based upon Mr. Figgie's Schedule 13D filed on January 6, 1995 (showing beneficial ownership information as of December 19, 1994) and the January 1995 Form 4, the aggregate number of shares beneficially owned by Mr. Figgie includes 13,537 shares of Class B Common Stock held in his account with the Clark-Reliance Employee Profit Sharing and Savings and Trust Plan and excludes a total of 415,938 shares of Class B Stock beneficially owned, or that may be deemed to be beneficially owned, by members of Mr. Figgie's immediate family, The Figgie Family Foundation, certain Figgie family trusts and Clark-Reliance (see footnote 10 above). Of the excluded shares: (i) 134,564 shares of Class B Common Stock are owned by Clark-Reliance; (ii) 57,881 shares (excluding those held in trust as noted below) of Class B Common Stock are owned by Mr. Figgie's wife; (iii) 465 shares (excluding those held in trust as noted below) of Class B Common Stock are owned by Matthew P. Figgie, Mr. Figgie's son; (iv) 58,486 shares of Class B Common Stock are beneficially owned by Dr. Harry E. Figgie, III, Mr. Figgie's son; (v) 58,189 shares (excluding those held in trust as noted below) of Class B Common Stock are owned by Dr. Mark P. Figgie, Mr. Figgie's son; (vi) 2,112 shares of Class B Common Stock are owned by The Figgie Family Foundation, of which Mr. Figgie is one of six trustees; (vii) 51,750 shares of Class B Common Stock are held in trust for Mr. Figgie's wife; (viii) 47,493 shares of Class B Common Stock are held in trust for Matthew P. Figgie, for which Dr. Harry E. Figgie, III, Mr. McKnight and Mr. David L. Carpenter act as trustees; (ix) 2,499 shares of Class B Common Stock are held in trust for Dr. Mark P. Figgie, for which National City Bank acts as trustee; and (x) 2,499 shares of Class B Common Stock are held in trust for Matthew P. Figgie, for which National City Bank acts as trustee.
20 Item 13. Certain Relationships and Related Transactions CERTAIN TRANSACTIONS Mr. McKnight, a member of the Board of Directors, is a partner in the law firm of Calfee, Halter & Griswold which performs legal services for the Corporation. For services rendered during 1994, the Corporation paid Calfee, Halter & Griswold $3,574,338. Certain transactions or relationships relating to the Corporation and Harry E. Figgie, Dr. Figgie and Mr. Coenen are described under the caption "Compensation Committee Interlocks and Insider Participation" in Item 11 and are incorporated by reference. 21 Pursuant to the requirements of the Securities Exchange Act of 1934, the Company has duly caused this amendment to be signed on its behalf by the undersigned, thereunto duly authorized. FIGGIE INTERNATIONAL INC. (Company) Date: May 1, 1995 By: /s/ L. A. Harthun L. A. Harthun Senior Vice President, General Counsel and Secretary 22 -----END PRIVACY-ENHANCED MESSAGE-----