<PAGE>1
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, 1995
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
incorporation or organization) Identification No.)
4420 Sherwin Road
Willoughby, Ohio 44094
(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
<PAGE>
<PAGE>2
Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein,
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. [___ ]
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 4/10/96 $211,954,411
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
(13,676,565 shares outstanding as of 4/10/96)
Class B Common Stock, Par Value $0.10 Per Share
(4,724,193 shares outstanding as of 4/10/96)
Documents incorporated by reference: List the following documents
if incorporated by reference and the part of the Form 10-K into
which the document is incorporated: (1) any annual report to
security holders, (2) any proxy or information statement, and (3)
any prospectus filed pursuant to Rule 424(b) or (c) under the
Securities Act of 1933. (The listed documents should be clearly
described for identification purposes.)
Certain documents incorporated from prior filings (See Part IV)
<PAGE>
<PAGE>3
FIGGIE INTERNATIONAL INC.
Figgie International Inc., the registrant, hereby amends
the following items of its Annual Report on Form 10-K for 1995 as
set forth in the pages attached hereto:
Items 10, 11, 12, 13
<PAGE>
<PAGE>4
Item 10. Directors and Executive Officers of the Registrant
(a) Identification of Directors
Three Year
Term Expires
At Annual
Director Meeting of
Name and Principal Occupation Since Stockholders in
ALFRED V. GANGNES, age 75
Retired; former President, Figgie
International Inc. 1972 1996
JOHN S. LANAHAN, age 74
Consultant; former Senior Vice
President-Commercial, Chessie
System Railroads; former President
and Managing Director, the
Greenbrier Resort Hotel. 1985 1996
HARRISON NESBIT, II, age 69
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. 1969 1996
STEVEN L. SIEMBORSKI, age 41
Senior Vice President and Chief
Financial Officer, Figgie
International Inc., since
July 1, 1994; former Partner, Ernst &
Young; Certified Public Accountant 1994 1997
A. A. SOMMER, JR., age 72
Counsel, Morgan, Lewis & Bockius
LLP, Washington, D.C., law firm,
since October 1, 1994; former Partner,
Morgan, Lewis & Bockius; Chairman,
Public Oversight Board of the
American Institute of Certified
Public Accountants; Vice Chairman,
Board of Governors, National
Association of Securities Dealers. 1986 1997
<PAGE>
<PAGE>5
WALTER M. VANNOY, age 68 (1)
Retired; Chairman of the Board,
Figgie International Inc., from
May 18, 1994 to May 16, 1995;
Chief Executive Officer, Figgie
International Inc., from May 18,
1994 to January 3, 1995; Vice
Chairman of the Board, Figgie
International Inc., from February
1994 to May 1994; former President,
Vannoy Enterprises; former Vice
Chairman, McDermott International Inc.;
former President and Chief Operating
Officer, Babcock & Wilcox; Director,
Illinova Corp. 1981 1997
FRED J. BRINKMAN, age 67
Consultant; Partner, Arthur Andersen
LLP, public accountants, until 1989,
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., 1992 1998
F. RUSH McKNIGHT, age 66 (1)
Partner, Calfee, Halter & Griswold,
Cleveland, Ohio, law firm, and
Managing Partner from 1985 to 1991. 1985 1998
JOHN P. REILLY, age 52
Chief Executive Officer, Figgie
International Inc., since January 3,
1995; President, Figgie International
Inc., since February 1, 1995 and
Chairman of the Board of Figgie
International Inc. since May 16, 1995;
President and Chief Operating Officer,
Brunswick Corporation, from 1993 to
1994; President and Chief Executive
Officer, Tenneco Automotive, from
1987 to 1993; Director, Trinova
Corporation; Director, Atwood
Industries; Director, Barat
College. 1995 1998
(1) See discussion under the caption "CERTAIN TRANSACTIONS."
<PAGE>
<PAGE>6
(b) Identification of Executive Officers
Information with respect to the executive officers of Figgie
International Inc. (the "Corporation") is set forth under the caption
"Executive Officers of the Registrant" contained in Part I, Item 1 of
the Corporation's 1995 Form 10-K, which information is incorporated
herein by reference.
COMPLIANCE WITH SECTION 16(a) OF THE EXCHANGE ACT
Form 3s reporting the formation of a group were filed
with the Securities and Exchange Commission (the "SEC")
more than ten days after the formation on September 11, 1995 of
the group by Harry E. Figgie, III, Mark P. Figgie, Matthew P.
Figgie, The Harry E. Figgie, Jr. & Nancy F. Figgie Irrevocable
Trust, Matthew Figgie Trust, The Clarke-Reliance Corporation,
Nancy F. Figgie and The Figgie Family Foundation. The Form 3s filed
by Nancy Figgie and the Figgie Family Foundation were filed on
October 17, 1995, and the Form 3s filed by the other members of the
group were filed on October 13, 1995.
Item 11. Executive Compensation
DIRECTORS' COMPENSATION
The Directors, except for those who are also employees of
the Corporation, receive an annual stipend of $15,000 and an
attendance fee of $1,000 for each meeting of the Board. In
addition, the non-employee members of the Executive and Finance
Committee receive $3,000 per year, an attendance fee of $750 for
each meeting, and a participation fee of $750 for each regularly
scheduled telephonic meeting and $250 for each special telephonic
meeting. The non-employee members of the remaining committees
other than the Stock Option Committee receive $3,000 per year, an
attendance fee of $250 for each meeting, and a participation fee
of $250 for each telephonic meeting. The non-management
Directors receive an attendance fee of $750 for each separately
called meeting of non-management Directors.
The Corporation has agreed to pay a death benefit in the
amount of $200,000 to the estate of each Director, other than a
Director who is also an employee, upon his death. This benefit
is provided to a Director while in office and after retirement if
he has served five (5) years. The benefit is payable from the
general assets of the Corporation and the Corporation has insured
this liability by purchasing life insurance policies on the lives
of the eligible Directors.
<PAGE>
<PAGE>7
The Board of Directors and committee members also receive
travel and lodging expenses in connection with their attendance
at Board and committee meetings.
EXECUTIVE COMPENSATION
Summary of Compensation
The following table shows information concerning the
annual and long-term compensation earned during the last three
(3) fiscal years, if required, by the Corporation's Chief
Executive Officer ("CEO") and each of the three other executive
officers of the Corporation (the "Named Executive Officers").
<TABLE>
SUMMARY COMPENSATION TABLE
<CAPTION>
Long Term
Compensation
Annual Compensation Awards
Restricted Securities
Other Stock Underlying
Annual (1) Award(s) Options/ All Other(3)
Name and Principal Position Year Salary Bonus Compensation ($)(2) SARs (#) Compensation
<S> <C> <C> <C> <C> <C> <C> <C>
John P. Reilly (4)
Chairman, CEO and President 1995 $500,000 $250,000 $67,198 $165,000 500,000 $38,178
Steven L. Siemborski (5) 1995 350,000 108,000 412,500 -- -- 16,179
Senior Vice President and
Chief Financial Officer 1994 175,000 25,000 248,438 -- -- 60,363
L. A. Harthun 1995 239,166 80,000 -- -- 17,000 20,941
Senior Vice President - 1994 229,166 -- -- -- -- 18,520
Legal and Secretary 1993 219,000 -- -- 277,405 -- 23,026
Keith V. Mabee (6)
Vice President - 1995 192,916 52,000 -- -- 15,000 13,141
Corporate Relations 1994 152,666 -- -- 18,464 -- 12,919
<PAGE>
<PAGE>8
<FN>
<F1>
(1) (a) The amounts indicated with respect to Mr. Reilly represent
his use of a company car ($9,576), the payment of his moving expenses
($17,765) and club dues ($39,857).
(b) The amounts indicated with respect to Mr. Siemborski
represent the difference between the fair market values of the
37,500 shares of Class A Common Stock acquired by Mr. Siemborski
in each of 1995 and 1994 and the prices paid by Mr. Siemborski
for those shares.
<F2>
(2) The transfer and pledge restrictions on the restricted
shares reflected in the table are scheduled to lapse upon the
termination of the 1993 Restricted Stock Purchase Plan for
Employees (the "Restricted Stock Plan") on July 1, 1998 under the
terms of the plan. As of December 29, 1995, the aggregate number
of shares and the value of the shares of restricted stock held by
the executives (less the purchase price paid by the executive)
were as follows: Mr. Reilly, 30,000 shares of Class A Common
Stock having a market value (less purchase price) of $281,250;
Mr. Harthun, 17,613 shares of Class A Common Stock having a
market value (less purchase price) of $165,122; and Mr. Mabee,
7,338 shares of Class A Common Stock having a market value (less
purchase price) of $68,794.
<F3>
(3) Includes the following for 1995:
(a) The discounted value of the benefit to each of the Named
Executive Officers of the premium paid by the Corporation during
1995 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. Reilly -- $35,168;
Mr. Siemborski -- $13,210; Mr. Harthun -- $17,435; and Mr. Mabee
- -- $10,173.
(b) The allocations for 1995 of equivalent shares of Class A
Common Stock or Class B Common Stock under the Figgie
International Inc. Stock Ownership Trust and Plan for Salaried
Employees (the "ESOP for Salaried Employees"). The dollar values
as of December 29, 1995 of the allocations for each of the Named
Executive Officers of the Corporation are as follows: Mr. Reilly
- -- $3,010; Mr. Siemborski -- $2,969; Mr. Harthun -- $3,506; Mr.
Mabee -- $2,968.
<F4>
(4) Mr. Reilly became CEO of the Corporation on January 3,
1995, President of the Corporation on February 1, 1995 and
Chairman of the Board of Directors of the Corporation on May 16,
1995. He was not employed by the Corporation prior to 1995.
<F5>
(5) Mr. Siemborski became Senior Vice President and Chief
Financial Officer of the Corporation effective July 1, 1994. He
was not employed by the Corporation prior to 1994.
<F6>
(6) Mr. Mabee became an executive officer of the Corporation
on February 23, 1994.
</FN>
</TABLE>
<PAGE>
<PAGE>9
Stock Options
The following tables provide information on grants of stock
options pursuant to the Figgie International Inc. Key Employees'
Stock Option Plan (the "Stock Option Plan") during the year ended
December 31, 1995. The Stock Option Plan is administered by the
Stock Option Committee of the Board of Directors, which has the
authority to determine the individuals to whom options are
granted and the terms of all grants thereunder. The Stock Option
Plan provides for the issuance of nonqualified stock options and
"incentive stock options," within the meaning of Section 422 of
the Internal Revenue Code, for the Corporation's Class A Common
Stock and the granting of stock appreciation rights ("SARs").
The options granted pursuant to the Stock Option Plan have terms
of up to 10 years from the date of grant and an exercise price
equal to one hundred percent (100%) of the fair market value on
the date of grant and are non-transferable.
Option Grants in Last Fiscal Year
The following table provides information related to options
granted or awarded to the Named Executive Officers during 1995.
<TABLE>
OPTION GRANTS IN LAST FISCAL YEAR
<CAPTION>
Potential Realizable Value at
Assumed Annual Rates of Stock
Number of % of Total Price Appreciation
Securities Options For Option Term (1)
Underlying Granted to Exercise
Options Employees or Base
Granted in Fiscal Price Grant Expiration
Name (#) Year ($/share) Date Date 0% 5% 10%
<S> <C> <C> <C> <C> <C> <C> <C> <C>
John P. Reilly(2) 500,000 62.85% $6.500 1/04/95 1/04/02 N/A $1,323,076 $3,083,331
L. A. Harthun (3) 17,000 2.14 7.625 2/14/95 2/14/02 N/A 52,770 122,977
Steven L. Siemborski 0 0.00 N/A N/A N/A N/A N/A N/A
Keith V. Mabee(3) 15,000 1.89 7.625 2/14/95 2/14/02 N/A 46,562 108,510
All Stockholders N/A N/A N/A N/A N/A N/A 53,667,653 125,068,454
All Optionees 793,500 100.00 7.177 Various 7 Years N/A 2,318,259 5,402,529
Options Gain as %
of all Stockholder
Gain N/A N/A N/A N/A N/A N/A 4.32% 4.32%
<FN>
<F1>
(1) The dollar amounts under these columns are the results of
calculations at assumed annual rates of stock price appreciation
of zero percent (0%), five percent (5%) and ten percent (10%).
These assumed rates of growth were selected by the SEC for
illustration purposes only. They are not intended to forecast
possible future appreciation, if any, of the Corporation's stock
price. For Optionees that received options with an exercise
price less than the market value on the date of grant, no gain is
possible without an increase in stock prices, which will benefit
all stockholders. A zero percent (0%) gain in stock price will
result in a zero percent (0%) benefit to such Optionees.
<F2>
(2) Mr. Reilly's option vests in twenty percent (20%)
increments of 100,000 shares on each of January 4, 1995, 1996,
1997, 1998 and 1999; however, vesting accelerates upon a change
in control (as defined in the Stock Option Plan).
<PAGE>
<PAGE>10
<F3>
(3) Mr. Harthun's and Mr. Mabee's options vest in one-third
(1/3) cumulative installments on each of February 14, 1996, 1997
and 1998.
</FN>
</TABLE>
Aggregated Option Exercises and Fiscal Year-end Option Values
Table
The following table provides information related to any stock
options exercised by the Named Executive Officers during 1995 and
the value of unexercised in-the-money options held by the Named
Executive Officers at December 31, 1995:
<TABLE>
AGGREGATED OPTION EXERCISES IN LAST FISCAL YEAR AND FISCAL
YEAR-END OPTION VALUES
<CAPTION>
Number of Securities
Underlying Unexercised Value of Unexercised
Shares Aquired Options at FY-End (#) In-the-Money Options/SARs
on Exercise Value Exercisable/ at FY-End ($) Exercisable/
Name (#)(1) Realized ($)(1) Unexercisable Unexercisable
<S> <C> <C> <C> <C>
John P. Reilly 0 0 100,000/400,000 $387,500/$1,550,000
L. A. Harthun 0 0 0/ 17,000 0/ 46,750
Steven L. Siemborski 0 0 0/ 0 0/ 0
Keith V. Mabee 0 0 0/ 15,000 0/ 41,250
<FN>
<F1>
(1) No options were exercised.
</FN>
</TABLE>
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 Figgie International Inc. Retirement Income Plan II.
<PAGE>
<PAGE>11
In general, the Salaried Provisions, as amended
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 two percent
(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 Provisions:
Annual
Pensionable Earnings (1)
0-100% of Over 100% of
Covered Covered
Compensation Compensation
(2) (2)
Retirement Income Credit 0.7% 1.2%
(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 1996 and
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 such calendar year.
For calendar year 1996, Covered Compensation will equal $25,920.
Generally, any salaried employee of the Corporation except
employees of certain non-participating 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 1995, 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").
<PAGE>
<PAGE>12
As of December 31, 1995, the annual benefits payable upon
retirement under the Salaried Provisions, including accrued
benefits from the Prior Plan, to the Named Executive Officers are
stated below. In determining such benefits, the executives'
earnings were estimated through 1996 and were assumed not to
exceed $150,000 after 1996. Covered Compensation ($25,920 for
1996) was assumed not to increase after 1996, 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 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. Reilly --
$23,082; Mr. Siemborski -- $42,626; Mr. Harthun -- $99,819; and
Mr. Mabee -- $32,596.
Senior Executive Benefits Program
The following plan table shows the annual benefits upon
retirement at age 65 in 1995 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.
PENSION PLAN TABLE
Remuner-
ation(2) Annual Benefit for Years
of Credited Service Shown(1)
10 Years 15 Years 20 Years 25 Years 30 Years 35 Years
$125,000 $20,841 $42,493 $37,062 $31,632 $26,201 $20,770
150,000 29,296 55,177 48,557 41,937 35,317 28,697
175,000 40,130 71,427 64,807 58,187 51,567 44,947
200,000 50,963 87,677 81,057 74,437 67,817 61,197
225,000 61,796 103,927 97,307 90,687 84,067 77,447
250,000 72,630 120,177 113,557 106,937 100,317 93,697
300,000 94,296 152,677 146,057 139,437 132,817 126,197
350,000 115,963 185,177 178,557 171,937 165,317 158,697
400,000 137,630 217,677 211,057 204,437 197,817 191,197
450,000 159,296 250,177 243,557 236,937 230,317 223,697
500,000 180,963 282,677 276,057 269,437 262,817 256,197
(1) Annual benefits are computed on the basis of one hundred
percent (100%) joint and survivor benefit. The annual benefits
reflected in the table constitute sixty-five percent (65%) of
final covered remuneration prorated for service less than fifteen (15)
years, less assumed social security benefits of $22,464 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 for all years of
participation 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.) (Accrual under the Salaried Provisions
for years prior to 1996 may be less than as assumed.) The gross
annual benefits will be increased by ten percent (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.
<PAGE>
<PAGE>13
(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.
As of December 31, 1995, the credit years of service for the
4 individuals named in the Summary Compensation Table are as
follows: Mr. Reilly, 1 year; Mr. Harthun, 30 years; Mr.
Siemborski, 1 year; and Mr. Mabee, 2 years.
EMPLOYMENT AND SEVERANCE AGREEMENTS
The Corporation entered into an employment agreement dated
January 1, 1995 (the "Executive Agreement") with John P. Reilly.
The Executive Agreement provides for Mr. Reilly's employment as
CEO of the Corporation at an annual base salary of $500,000. In
addition to his base salary, Mr. Reilly is entitled to receive
the following: (i) a guaranteed lump sum payment of $250,000 if
he remains an employee of the Corporation until April 30, 1996;
(ii) 30,000 shares of the Corporation's Common Stock pursuant to
the terms of the Restricted Stock Plan; (iii) an option to
purchase 500,000 shares of the Corporation's Class A Common Stock
pursuant to the Stock Option Plan, at an option price equal to
the fair market value of such stock determined under the plan,
exercisable not later than the seventh anniversary of the date of
issuance. In addition, the Executive Agreement entitles Mr.
Reilly to participate in the Corporation's regular bonus and
benefit plans for senior executives. In the event of Mr.
Reilly's death or disability (as defined), Mr. Reilly's
employment shall be deemed to have terminated, except that the
Corporation will pay a pro rata portion of any guaranteed payment
or bonus otherwise payable. If the Corporation terminates Mr.
Reilly's employment without good cause (as defined), then the
Corporation must pay Mr. Reilly's base salary for the greater of
(i) two years or (ii) the remainder of the term of the Executive
Agreement. The Executive Agreement terminates on January 1,
1998, and will be automatically extended for successive one-year
periods unless the Corporation or Mr. Reilly gives notice of
termination.
The Corporation entered into a management agreement dated
April 28, 1995 (the "Management Agreement") with Luther A.
Harthun. The Management Agreement, as amended on January 31,
1996, provides for Mr. Harthun's continued employment until July
3, 1996 (unless mutually extended or terminated) as Senior Vice
President Legal and Secretary of the Corporation, at his
current base salary on April 28, 1995 and a guaranteed bonus to
be paid in 1996 of $80,000. If Mr. Harthun's employment is
terminated due to his retirement or death, his benefits will be
determined in accordance with the Corporation's other retirement
and benefit plans as in effect on the date of the Management
Agreement. In the event Mr. Harthun becomes disabled, the
Corporation may terminate his employment but will be obligated to
pay Mr. Harthun his base salary and guaranteed bonus as if Mr.
Harthun had remained a full time employee and retired on July 3,
1996. Such payments will be in lieu of the payments due Mr.
Harthun prior to July 3, 1996 pursuant to the Corporation's SEBP.
If Mr. Harthun voluntarily terminates his employment, he will
receive his full base salary through the termination date, and
will receive the guaranteed bonus only if such termination is
after April 30, 1996. If the Corporation terminates Mr.
Harthun's employment other than for cause (as defined), Mr.
Harthun can elect to receive, in lieu of any other severance
<PAGE>
<PAGE>14
payments which may be due Mr. Harthun, either (i) his base salary
and health and life insurance benefits for twenty-four months
following the date of such termination or (ii) his salary,
guaranteed bonus, retirement and other payments provided in the
Management Agreement as if Mr. Harthun had remained a full time
employee and retired on July 3, 1996. In addition, the
Corporation will continue to be obligated to pay when due all
other benefits Mr. Harthun is due under the Corporation's other
retirement and benefit plans. If Mr. Harthun retires from the
Corporation after May 31, 1996, he will receive those retirement
benefits to which he would be entitled under the Corporation's
SEBP.
The Corporation entered into a retention agreement dated
March 20, 1996 (the "Management Retention Agreement") with Mr.
Harthun that supplements the Management Agreement until May 31,
1997. Unless the Management Retention Agreement is earlier
terminated by Mr. Harthun without cause or by the Corporation
based on Mr. Harthun's death or disability or for cause (as
defined), the Management Retention Agreement grants to Mr.
Harthun a continued service bonus, as an incentive for Mr.
Harthun to remain an employee of the Corporation, payable on the
earlier of (i) the execution of an agreement for a merger,
consolidation, sale or divestiture of substantially all of the
assets of the Corporation, (ii) the termination by Mr. Harthun of
his employment within three months of the Corporation making a
significant negative change in the nature or scope of his
authorities, powers, functions or duties (the earlier of (i) or
(ii) being "Mr. Harthun's Release Date"), or (iii) the execution
of an agreement for a merger, consolidation, sale or divestiture
of substantially all of the assets of any one of the Interstate
Electronics, Snorkel, Scott or Taylor Divisions of the
Corporation and a corresponding declaration by the Board of
Directors of a dividend payable to stockholders. The continued
service bonus provides the right to purchase 2,935 shares of the
Corporation's common stock under the Restricted Stock Plan and
immediate vesting of all options previously granted to Mr.
Harthun pursuant to the Stock Option Plan. On Mr. Harthun's
Release Date, if any, Mr. Harthun will be entitled to an
additional service bonus consisting of: (a) a lump sum payment
or monthly payments in an amount equal to the payments that Mr.
Harthun may elect to receive under the Management Agreement if he
is terminated without cause, (b) a lump sum payment or monthly
payments, in an amount equal to 12 months of the monthly car
allowance being received by Mr. Harthun on Mr. Harthun's Release
Date, (c) a waiver of the Corporation's right to repurchase
shares previously purchased by Mr. Harthun pursuant to the
Restricted Stock Plan, (d) any then unpaid installments of
bonuses previously awarded to Mr. Harthun pursuant to the
Corporation's Compensation Plan for Executives, and (e) such
additional bonuses as the Management Development and Compensation
Committee of the Board of Directors may award to Mr. Harthun with
respect to his 1996 performance and his contribution toward the
successful completion of a merger, consolidation or the sale of a
part or all of the Corporation.
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
<PAGE>
<PAGE>15
(which was paid in 1994), an incentive bonus of $25,000 for
reducing financial consulting fees by fifty percent (50%) during
his first four months of employment (which was paid on June 30,
1995) and an additional incentive bonus of $50,000 for reducing
such financial consulting fees to zero by June 30, 1995 (which
was 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 (which was paid); 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 the Corporation'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 for 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 that year and $350,000 for each of
the next succeeding two years; or (iii) if employment is
terminated during the third year of the Employment Contract, a
proportional amount of $350,000 with respect to that year and
$350,000 for the succeeding year.
The Corporation entered into a management agreement dated
February 23, 1995 (the "Officer Agreement") with Keith V. Mabee.
The Officer Agreement provides for Mr. Mabee's employment until
February 23, 1998, and automatic extensions for successive one
year terms thereafter, as Vice President - Corporate Relations of
the Corporation. Either the Corporation or Mr. Mabee may
terminate the Officer Agreement on February 23, 1998 or at the
end of any successive one year term thereafter. If Mr. Mabee's
employment is terminated due to his retirement or death, his
benefits will be determined in accordance with the Corporation's
retirement and benefit plans then in effect in which Mr. Mabee is
a participant. In the event Mr. Mabee becomes disabled, the
Corporation may terminate his employment, and Mr. Mabee's
benefits will be determined in accordance with the Corporation's
disability and other applicable plans then in effect. If the
Corporation terminates Mr. Mabee's employment other than for
cause (as defined), the Corporation will continue to pay Mr.
Mabee his monthly base salary then in effect, as well as his life
<PAGE>
<PAGE>16
insurance and health care benefits (unless comparable benefits
are provided by a subsequent employer), for 24 full calendar
months following the date of such termination. In such an event,
Mr. Mabee will also be entitled to reimbursement for the cost of
outplacement services up to fifteen percent (15%) of his annual
base salary. In the event of any termination, the Corporation
will be obligated to pay when due all other benefits to which Mr.
Mabee has a vested right.
The Corporation entered into a retention agreement dated
March 20, 1996 (the "Officer Retention Agreement") with Mr. Mabee
that supplements the Officer Agreement until May 31, 1997.
Unless the Officer Retention Agreement is earlier terminated by
Mr. Mabee without cause or by the Corporation based on Mr.
Mabee's death or disability or for cause (as defined), the
Officer Retention Agreement grants to Mr. Mabee a continued
service bonus, as an incentive for Mr. Mabee to remain an
employee of the Corporation, payable on the earlier of (i) the
execution of an agreement for a merger, consolidation, sale or
divestiture of substantially all of the assets of the
Corporation, (ii) the termination by Mr. Mabee of his employment
within three months of the Corporation making a significant
negative change in the nature or scope of his authorities,
powers, functions or duties (the earlier of (i) or (ii) being
"Mr. Mabee's Release Date"), or (iii) the execution of an
agreement for a merger, consolidation, sale or divestiture of
substantially all of the assets of any one of the Interstate
Electronics, Snorkel, Scott or Taylor Divisions of the
Corporation and a corresponding declaration by the Board of
Directors of a dividend payable to stockholders. The continued
service bonus provides the right to purchase 3,668 shares of the
Corporation's common stock under the Restricted Stock Plan and
immediate vesting of all options previously granted to Mr. Mabee
pursuant to the Stock Option Plan. On Mr. Mabee's Release Date,
if any, Mr. Mabee will be entitled to an additional service bonus
consisting of: (a) a lump sum payment or monthly payments in an
amount equal to 24 full calendar months of Mr. Mabee's salary in
effect on Mr. Mabee's Release Date, (b) a lump sum payment or
monthly payments, in an amount equal to 12 months of the monthly
car allowance being received by Mr. Mabee on Mr. Mabee's Release
Date, (c) a waiver of the Corporation's right to repurchase
shares previously purchased by Mr. Mabee pursuant to the
Restricted Stock Plan, (d) any then unpaid installments of
bonuses previously awarded to Mr. Mabee pursuant to the
Corporation's Compensation Plan for Executives, and (e) such
additional bonuses as the Management Development and Compensation
Committee of the Board of Directors may award to Mr. Mabee with
respect to his 1996 performance and his contribution toward the
successful completion of a merger, consolidation or the sale of a
part or all of the Corporation.
In May 1989, all corporate officers and corporate level
department heads who reported to the CEO 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). Mr. Harthun
is the only officer who entered into such an agreement
who is still an employee of the Corporation. 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
<PAGE>
<PAGE>17
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 by such executive pursuant to the terms of the
related restricted stock purchase plan, 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 and Nominating
Committee of the Board of Directors consists of Harrison Nesbit,
II (Chairman), Fred J. Brinkman, Alfred V. Gangnes, F. Rush
McKnight, John P. Reilly (ex-officio and non-voting), A.A.
Sommer, Jr. and Walter M. Vannoy. During 1995, the same
individuals and Dale S. Coenen served on that Committee. Mr.
Reilly became CEO of the Corporation on January 3, 1995,
President of the Corporation on February 1, 1995 and Chairman of
the Board of Directors of the Corporation on May 16, 1995. Until
January 3, 1995, Mr. Vannoy was CEO of the Corporation, and until
May 16, 1995, he was Chairman of the Board of Directors.
The Stock Option Committee of the Board of Directors
currently consists of A. A. Sommer, Jr. (Chairman), Fred J.
Brinkman and Harrison Nesbit, II. During 1995, the same
individuals and Dale S. Coenen served on that Committee.
On October 30, 1995, Trans-Industries, Inc., whose President
and Chairman of the Board at the time was Dale S. Coenen, a
director of the Corporation until the Corporation's annual
meeting on October 17, 1995 and a shareholder of
Trans-Industries, repurchased $1,000,000 of 10% Convertible
Subordinated Debentures, due October 30, 2001, sold by
Trans-Industries, Inc. to the Corporation on October 30, 1991 for
the face amount plus accrued interest. The debentures provided
for prepayment without premium of $142,857 per year commencing in
1995 and additional optional prepayments at declining premiums
over the same period. The debentures were convertible at any
time at the option of the Corporation into common stock of
Trans-Industries at $2.00 per share. The common stock of
Trans-Industries is publicly traded in the over-the-counter
market.
Item 12. Security Ownership of Certain Beneficial Owners and
Management
<PAGE>
<PAGE>18
PRINCIPAL STOCKHOLDERS
The stockholders named in the following table are those
which are known to the Corporation to be the beneficial owners of
five percent (5%) or more of the Corporation's Class A Common
Stock or Class B Common Stock. Unless otherwise indicated, the
information is as of April 10, 1996. 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.
1000 Ridgeway Loop Road, Suite 233
Memphis, TN 38120 1,827,991(1) 13.4%
Class A Common Stock The Capital Group Companies, Inc.
333 South Hope Street
Los Angeles, CA 90071 1,210,500(2) 8.9%
Class A Common Stock The Prudential Insurance Company of
America
Prudential Plaza
Newark, NJ 07102-3777 1,037,400(3) 7.6%
Class A Common Stock Wilmington Trust Corporation
1100 North Market Street
Wilmington, DE 19890 763,882(4) 5.6%
Class A Common Stock Wellington Management Company
75 State Street
Boston, MA 02109 690,100(5) 5.0%
Class B Common Stock The Figgie Family Group
37001 Shaker Boulevard
Hunting Valley, OH 44022 968,888(6) 20.5%
Class B Common Stock Mentor Partners LP
500 Park Avenue
New York, NY 10022 433,300(7) 9.2%
(1) This amount, as reflected in a report on Schedule 13G dated
February 13, 1996 and as of December 31, 1995, consists of
1,737,991 shares as to which the reporting person claims sole
voting power, 90,000 shares as to which the reporting person
claims shared voting power and 1,827,991 shares as to which the
reporting person claims sole dispositive power. The reporting
person does not claim any shared dispositive power.
(2) This amount, as reflected in a report on Schedule 13G dated
February 9, 1996 and as of December 31, 1995, filed jointly by
The Capital Group Companies, Inc. ("CGC") and Capital Guardian
Trust Company ("CGTC"), consists of 1,152,500 shares as to which
CGC and CGTC claim sole voting power and 1,210,500 shares as to
which CGC and CGTC claim sole dispositive power. The reporting
persons do not claim any shared voting power or shared
dispositive power.
<PAGE>
<PAGE>19
(3) This amount, as reflected in a report on Schedule 13G dated
February 13, 1996 and as of December 31, 1995, consists of
791,000 shares as to which the reporting person claims sole
voting power, 243,400 shares as to which the reporting person
claims shared voting power, 791,000 shares as to which the
reporting person claims sole dispositive power and 246,400 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, 1996 and as of December 31, 1995, filed by
Wilmington Trust Corporation ("WT Corporation") and Wilmington
Trust Company ("WT Company") consists of 7,497 shares as to which
WT Corporation and WT Company claim sole voting and dispositive
power and 756,385 shares as to which WT Corporation and WT
Company claim shared voting and dispositive power.
(5) This amount, as reflected in a report on Schedule 13G dated
January 29, 1996 and as of December 31, 1995, consists of 370,500
shares as to which the reporting person claims shared voting
power and 690,100 shared as to which the reporting person claims
shared dispositive power. The reporting person does not claim
any sole voting power or sole dispositive power.
(6) This amount, as reflected in a report on Schedule 13D/A
dated December 5, 1995, filed by Harry E. Figgie, Jr., Nancy F.
Figgie, Harry E. Figgie, III, Mark P. Figgie, Matthew P. Figgie,
The Figgie Family Foundation and The Clarke-Reliance Corporation,
as a group, consists of 609,534 shares as to which Harry E.
Figgie, Jr. claims sole voting and dispositive power, 57,881
shares, as to which Nancy F. Figgie claims sole voting and
dispositive power, 105,995 shares as to which Harry E. Figgie,
III claims sole voting and dispositive power, 58,189 shares as to
which Mark P. Figgie claims sole voting and dispositive power,
613 shares as to which Matthew P. Figgie claims sole voting and
dispositive power, 2,112 shares as to which The Figgie Family
Foundation claims sole voting and dispositive power and as to
which Harry E. Figgie, Jr. claims shared voting and dispositive
power and 134,564 shares as to which The Clarke-Reliance
Corporation claims sole voting and dispositive power. Except as
indicated, the reporting persons do not claim any shared voting
power or shared dispositive power. The members of the Figgie
Family Group filed a report on Schedule 13D/A with the SEC on
September 11, 1995 to report their formation of a "group" for the
purpose of disposing of their investment in the Corporation.
(7) This amount, as reflected in a report on Schedule 13G dated
December 27, 1995 and as of December 31, 1995, consists of
433,300 shares as to which the reporting person claims sole
voting and dispositive power. The reporting person does not
claim any shared voting power or shared dispositive power.
<PAGE>
<PAGE>20
STOCK OWNERSHIP OF DIRECTORS AND EXECUTIVE OFFICERS
The following table and notes thereto set forth information, as
of March 31, 1996, with respect to the beneficial ownership of
shares of Class A and Class B Common Stock by each Director, each
Named Executive Officer and, as a group, by the Directors and
Executive Officers of the Corporation, based upon information
furnished to the Corporation by such persons.
Amount of Beneficial
Ownership as of March 31,
1996(1)
Class A Percentage Class B Percentage
Name of Beneficial Owner Common Stock of Class Common Stock of Class
Fred J. Brinkman 500 * 3,600 *
Alfred V. Gangnes 22,371(2) * 12,504(2) *
John S. Lanahan 358 * 6,536 *
F. Rush McKnight 1,315(3) * 6,503(3) *
Harrison Nesbit, II 1,005(4) * 6,562(4) *
John P. Reilly 230,304(5)(6) 1.7% 281(5) *
Steven L. Siemborski 75,417(5) * 526(5) *
A. A. Sommer, Jr. 2,250 * 7,750 *
Walter M. Vannoy 98,392(5) * 23,605(5) *
L. A. Harthun 23,613(5)(7) * 611(5) *
Keith V. Mabee 13,417(5)(8) * 732(5) *
All Directors and Executive
Officers as a Group (11 persons) 468,942(5) 3.4% 69,210(5) 1.5%
* Less than one percent (1%).
(1) Except as otherwise indicated in footnotes (2), (5), and (6)
and as limited by the terms of applicable restricted stock plans,
each Director or Executive Officer owning shares listed or
included in this table exercises sole voting and dispositive
power over such shares. The shares shown include 210,667 shares
of Class A Common Stock with respect to which certain Executive
Officers have a right to acquire beneficial ownership within
sixty (60) days.
(2) 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.
(3) 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.
(4) 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.
(5) These amounts include shares of Class A and Class B Common
Stock held by the Figgie International Inc. Stock Ownership Trust
and Plan (the "ESOP") and the ESOP for Salaried Employees which
are subject to certain pass-through voting and tendering rights.
Participants in those plans are entitled to instruct the trustee
of the plans (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 and the ESOP which have been allocated to the Named
Executive Officers, Mr. Vannoy and all Executive Officers and<PAGE>
<PAGE>21
Directors as a group, including estimates of the numbers of
shares to be allocated as of December 31, 1995, are as follows:
(1) allocated shares in the ESOP for Salaried Employees: Mr.
Reilly -- 221 shares of Class A Common Stock and 70 shares of
Class B Common Stock; Mr. Siemborski -- 334 shares of Class A
Common Stock and 109 shares of Class B Common Stock; Mr. Harthun
- -- 250 shares of Class A Common Stock and 89 shares of Class B
Common Stock; Mr. Mabee -- 442 shares of Class A Common Stock and
150 shares of Class B Common Stock; Mr. Vannoy -- 415 shares of
Class A Common Stock and 138 shares of Class B Common Stock; and
all Executive Officers and Directors as a group -- 1,662 shares
of Class A Common Stock and 556 shares of Class B Common Stock;
and (2) allocated shares in the ESOP: Mr. Siemborski -- 206
shares of Class B Common Stock; Mr. Harthun -- 311 shares of
Class B Common Stock; Mr. Mabee -- 371 shares of Class B Common
Stock; Mr. Vannoy -- 353 shares of Class B Common Stock; and all
Executive Officers and Directors as a group -- 1,241 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 and the
ESOP which have not been allocated and are reflected in the table
above as beneficially owned by the Named Executive Officers, Mr.
Vannoy and all Executive Officers and Directors as a group are
as follows: (1) unallocated shares in the ESOP for Salaried
Employees: Mr. Reilly -- 83 shares of Class A Common Stock and
211 shares of Class B Common Stock; Mr. Siemborski -- 83 shares
of Class A Common Stock and 211 shares of Class B Common Stock;
Mr. Harthun -- 83 shares of Class A Common Stock and 211 shares
of Class B Common Stock; Mr. Mabee -- 83 shares of Class A Common
Stock and 211 shares of Class B Common Stock; Mr. Vannoy -- 83
shares of Class A Common Stock and 211 shares of Class B Common
Stock; and all Executive Officers and Directors as a group -- 415
shares of Class A Common Stock and 1,055 shares of Class B Common
Stock; and (2) no unallocated shares in the ESOP.
(6) This amount includes 200,000 shares that may be acquired
within sixty (60) days by exercising a stock option.
(7) This amount includes 5,667 shares that may be acquired
within sixty (60) days by exercising a stock option.
(8) This amount includes 5,000 shares that may be acquired
within sixty (60) days by exercising a stock option.
<PAGE>
<PAGE>22
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 1995, the Corporation paid Calfee, Halter &
Griswold $2,646,891.
Certain transactions or relationships relating to the
Corporation are described under the caption "Compensation
Committee Interlocks and Insider Participation" in Item 11.
The Corporation entered into an employment agreement dated
October 28, 1994 (the "Agreement") with Walter M. Vannoy. The
Agreement provides for Mr. Vannoy's employment as Vice-Chairman
of the Board of Directors between February 16, 1994 and May 18,
1994, as CEO from May 18, 1994 until such time as a new CEO is
duly elected and takes office (the "New CEO Start Date"), and as
Chairman of the Board from May 18, 1994 until a new Chairman is
named. 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. In accordance with 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 pursuant to the provisions of the
Restricted Stock Plan relating to repurchases from retirees.
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 as follows: (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
on a part-time basis with such title, if any, as the Board of
Directors deems appropriate.
<PAGE>
<PAGE>23
Pursuant to the requirements of the Securities Exchange Act of
1934, the Registrant has duly caused this amendment to be signed
on its behalf by the undersigned,thereunto duly authorized.
FIGGIE INTERNATIONAL INC.
(Registrant)
Date: April 29, 1996 By: /s/ L.A. Harthun
L. A. Harthun
Senior Vice President-Legal
and Secretary
