EXECUTION EDITION - April 2, 2001, 1:00 p.m.
RETIREMENT AND CONSULTING AGREEMENT
This RETIREMENT AND CONSULTING AGREEMENT (the "Agreement") is entered
into this 2nd day of April, 2001, by and between Xxxxxx Xxxxxxx Corporation (the
"Company" and together with its subsidiaries, parents, and affiliates, the
"Company Group") and Xx. Xxxxxxx X. Xxxxx (the "Executive").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Executive has announced his intention to retire from his
employment as President and Chief Executive Officer of the Company and as a
member and Chairman of the Company's Board of Directors (the "Board"); and
WHEREAS, the Company desires to secure the Executive's continued
employment for a reasonable period until a successor executive officer can be
identified; to obtain the Executive's cooperation in the search for a successor
and in facilitating the transition to new leadership; and to obtain, for such
successor's and the Company's benefit, the Executive's commitment to provide
post-employment consulting services and an agreement by the Executive not to
enter into post-employment competitive activities; and
WHEREAS, the parties have determined that it would be in their
respective best interests to provide for the Executive's retirement from the
Company on the terms and conditions set out in this Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the adequacy of which is hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:
I. Retirement.
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A. The Executive hereby irrevocably retires (except as otherwise
provided herein), without any further action on his part being required, from
each and every position of employment with and service to the Company, including
his present employment as President and Chief Executive Officer of the Company
and his service as a member and Chairman of the Board. This retirement shall
also apply to all of Executive's employment and service relationships with all
members of the Company Group, whether as officer, director, employee,
consultant, agent, fiduciary of any employee benefit plan or otherwise.
B. The Executive's complete retirement as set forth in Section I.A
shall be effective as of December 31, 2001 or, if earlier, the date as of which
the Board notifies the Executive in writing fifteen days prior to the effective
date that the Company no longer requires his services as President and Chief
Executive Officer or as a member of the Board (presently expected to be the date
on which the Company hires a new President and Chief Executive Officer) (the
"Retirement Date").
C. As requested, the Executive shall cooperate with the Company to
effectuate Executive's retirement from his positions of employment and service.
D. From and after the Retirement Date, the Executive shall have no
authority to act on behalf of the Company or the Company Group and shall not
hold himself out as having such authority or otherwise act in an executive
capacity.
E. During the period beginning on the Retirement Date and ending on the
second anniversary of the Retirement Date, the Executive shall serve and/or hold
himself ready to serve as a consultant to the Company, and will make himself
reasonably available to render support and advisory services to the Company
Group at the request of the Chief Executive Officer of the Company, in an
aggregate amount not to exceed ten (10) hours per month. During such period,
Executive shall be an independent contractor to the Company and shall not for
any purposes be deemed an employee of the Company.
II. Pre-Retirement Service and Compensation; Failure to Perform.
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A. From the date hereof until the Retirement Date (the "Transition
Period"), the Company will continue to employ the Executive as President and
Chief Executive Officer and the Executive shall continue to perform the duties
and responsibilities associated with those positions to the best of his
abilities. The Executive will also continue to serve as a member of the
Company's Board of Directors during the Transition Period. During the Transition
Period the Company shall continue to employ the Executive on terms and
conditions substantially equivalent to the terms and conditions of his
employment on the date hereof, as modified by this Agreement.
B. If, prior to the Retirement Date, Executive resigns his employment
for any reason or is terminated by the Company for "Cause" (as defined in the
Change of Control Employment Agreement by and between the Company and the
Executive, dated October 2, 1995 (together with any and all amendments thereto,
the "Change of Control Agreement")), the Company shall have no further
obligations to Executive pursuant to Section II or III of this Agreement and the
Executive shall have no obligation pursuant to Section I.D of this Agreement;
provided, however, that all other provisions of this Agreement shall survive in
accordance with their terms.
III. Special Post-Retirement Entitlements.
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In consideration of the covenants, agreements and acknowledgments of
the Executive contained in this Agreement:
A. Consulting Period Payments. For the first twenty-four (24) calendar
months beginning after the Retirement Date, the Company shall pay the Executive
$60,000 per month, payable in accordance with the Company's regular payroll
practices.
B. Retiree Medical. From and after the Retirement Date, Executive shall
be entitled to the same medical coverage as similarly-situated retired senior
executives of the Company.
C. No Further Benefits. Except as specifically set forth in this
Section III, this Agreement is in full and complete satisfaction of any rights
the Executive, or anyone claiming through the Executive, may have under the
Company's Supplemental Employee Retirement Plan (the "SERP"), or any other plan,
policy or program of any member of the Company Group or any agreement between
the Executive and any member of the Company Group providing for compensation,
whether cash or equity-based or otherwise, or benefits, whether welfare or
pension, except under the Company's qualified retirement plans, the Company's
Management Incentive Life Insurance Program, Accidental Death and Dismemberment
Program, Group Universal Life Program and Survivor Income Plan ("SIP"), all of
which shall be made available in accordance with their terms as from time to
time in effect and on a basis no less favorable than made available to similarly
situated retired senior executives.
D. Automobile. The Company shall continue to pay the lease payments on
the Executive's automobile in accordance with the current lease agreement until
the Retirement Date and shall reasonably cooperate with the Executive to enable
the Executive to assume such lease thereafter.
E. Accrued Vacation. As soon as practicable after the Retirement Date,
the Company shall pay to Executive the value of Executive's unused and unpaid
vacation, sick and personal time in accordance with the Company's regular
policies, including one week of vacation time per quarter, or portion of a
quarter, during the portion of calendar year 2001 ending on the Retirement Date,
less pay in respect of any vacation taken by the Executive during calendar year
2001.
F. Stock Options. On the Retirement Date, all options then held by the
Executive to purchase shares of Company common stock, whether or not previously
exercisable, shall be and remain exercisable until the date which is the tenth
anniversary of the grant of such option (or the originally scheduled expiration
date, if less than ten (10) years), subject to earlier termination as provided
in the relevant option plan and agreement.
G. Restricted Stock. All transfer and forfeiture restrictions on any
shares of restricted stock held by the Executive on the Retirement Date for
which all restrictions would otherwise lapse on February 27, 2007 shall lapse on
the Retirement Date. With respect to shares of restricted stock having transfer
or forfeiture restrictions otherwise lapsing on January 26, 2002 or March 1,
2003, all such restrictions shall lapse on January 26, 2002 if the Executive has
not violated those restrictions between the date hereof and January 26, 2002.
H. Year 2001 Bonus/LTIP. The Executive shall be entitled to a pro rata
portion of his annual bonus for the fiscal year 2001, to the extent earned
pursuant to the terms of Company's Executive Compensation Plan, payable at the
time that other executive bonuses for the fiscal year 2001 are paid. No payments
shall be made to Executive in respect of any long-term incentive award, except
as follows: Executive shall be entitled to a pro rata portion of the 2001
portion of the two-year long-term incentive award made to him for 2001-2002
based on the number of days worked in 2001, to the extent earned pursuant to the
terms of such award, payable at the time similar long-term executive awards are
paid.
I. Cash Payment. Without limiting the generality of Section III.C.,
upon execution of this Agreement, the Executive shall cease to be a SERP
participant and the Executive (and all persons claiming under or through him)
shall cease to have rights under or in respect of the SERP. In consideration of
the waiver of SERP benefits and the Executive's other undertakings in this
Agreement, the Company shall pay to the Executive, on January 7, 2002, an amount
equal to six million dollars ($6.0 million).
IV. Confidentiality.
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A. On the Retirement Date, the Executive shall return to the Company
all files, access keys, desk keys, ID badges and credit cards, and all such
other property, including without limitation, all originals and copies of papers
and notes (in any medium, including computer disks), whether Company Group
property or not, prepared, received or obtained by the Executive or his counsel
during the course of his employment with the Company, and all equipment and
property of the Company Group which may be in the Executive's possession or
under his control, including all such papers, work papers, notes, and equipment
in the possession of the Executive and his counsel. The Executive agrees that he
and his family and counsel shall not retain copies of any such papers, work
papers and notes, except as may be necessary for the Executive to discharge any
post-employment consulting services required under this Agreement.
Notwithstanding the foregoing, the Executive may retain copies of any employment
or benefits agreements between the Executive and the Company, this Agreement,
any publicly filed materials and any employee benefit plan and stock option plan
materials distributed generally to participants in any such plan by the Company.
B. The Executive hereby agrees that at any and all times he will hold
all Confidential Information (as defined below) in a fiduciary capacity for the
benefit of the Company and will not disclose to any third party or use for his
own benefit or for the benefit of any third party any such Confidential
Information; except as required to be disclosed by court order, subpoena or
other judicial or governmental administrative process or as otherwise consented
to by the Company. For purposes of this Agreement, "Confidential Information"
shall mean information in whatever form, including information that is written
or electronically stored, which has commercial value to any member of the
Company Group and which is created, discovered, developed, or otherwise becomes
known to any member of the Company Group and/or the Executive, or in which
property rights are held, assigned to or otherwise acquired by or conveyed to
any member of the Company Group, including any system, software, technical
information, trademark, copyrighted material, reports, records, documentation,
data, customer or supplier lists, tax or financial information (including the
revenues, profits, and costs associated with any member of the Company Group's
products or services), business or marketing plans, pricing information or
forecasts, "know-how," trade secrets, consultant contracts, subscription lists,
pricing policies, operational methods, market plans or strategies, business
acquisition plans, new recruiting plans, designs or design projects or research
projects. Confidential Information does not include information which becomes
generally known within the Company's industry through no act or omission by the
Executive. Any Confidential Information, whether or not developed by the
Executive, in whole or in part, prior to the Retirement Date, shall at all times
be the Company's exclusive property.
C. The Executive acknowledges and agrees that the Confidential
Information is a valuable business asset, and that this Section IV is necessary
to protect the Company Group's legitimate business interests.
D. The existence of and the terms and conditions of this Agreement
shall be held confidential by the parties hereto, except for disclosure (i) by
the Company to its legal, actuarial and accounting advisors, (ii) by the
Executive to his legal and financial advisors and family members, (iii) by
either party if required by order of a court or other body having jurisdiction
over such matter, or otherwise as required under the securities laws, and (iv)
by either party with the written consent of the other. Notwithstanding the
foregoing, nothing in this Agreement shall prevent the Executive from (x) using
on his own behalf or any future employer's behalf, his general knowledge or
experience in any area of professional activity, whether or not involving the
Executive's service with the Company or (y) referring to his performance of
services with the Company as descriptive of his ability or qualification for
employment or engagement by any other entity.
V. Solicitation and Competition; Cooperation.
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A. The Executive agrees that for a period commencing on the date hereof
and ending on the second anniversary of the Retirement Date (the "Restricted
Period"), he will not (i) solicit, entice or encourage any person employed by,
or an agent of, any member of the Company Group to terminate such person's
employment or agency, as the case may be, with such member of the Company Group
or (ii) divert, or attempt to divert, any person, concern, or entity from doing
business with any member of the Company Group, nor will he attempt to induce any
such person, concern or entity to cease being a customer or supplier any member
of the Company Group.
B. The Executive agrees that he shall not during the Restricted Period
(i) enter into the employ of or render any services to any Competitive Business
(as defined below) or (ii) engage in any Competitive Business for the
Executive's own account, or (iii) become interested in any Competitive Business
as an individual, partner, shareholder, creditor, director, officer, principal,
agent, employee, trustee, consultant or advisor or in any other relationship or
capacity; provided, however, that nothing in this Section V.B. shall prohibit
the Executive from being a stockholder owning not more than 1% of the
outstanding shares of a publicly owned business. Competitive Business for
purposes of this Agreement shall mean only an entity that has material
operations that directly compete with any member of the Company Group in the
sale of any products or delivery of any services sold by any such member of the
Company Group as of the date hereof.
C. Executive agrees that, at any time and from time to time, he will
execute any and all documents and will take all other actions which the Company
may deem reasonably necessary or appropriate to effectuate the terms of this
Agreement.
VI. Nondisparagement.
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A. The Executive hereby agrees that he shall not defame, disparage or
criticize any member of the Company Group, its products or services or any
former or existing employees, managers, directors, officers or agents in any
medium to any person or entity. Notwithstanding this provision, the Executive
may confer in confidence with his legal representatives and make truthful
statements in legal proceedings or as required by law. The Company shall have
sole and complete discretion regarding the timing, content and any and all
aspects of any internal or external announcement or other communication
concerning the Executive's Retirement from the Company; provided, however, that
any such announcement or communication is materially accurate and does not
defame, disparage or criticize the Executive. The Executive shall not
participate in any such communication without the advance consent of a
designated representative of the Board, which consent will not be unreasonably
withheld.
B. In addition to any and all other remedies available to the Company
for any material violation of Section V hereof by the Executive, the Executive
shall immediately forfeit any amount payable to the Executive pursuant to
Section III.
C. The Board shall use reasonable best efforts to cause the Company's
officers and directors not to defame, disparage or criticize the Executive;
provided, however, that nothing herein shall limit any confidential discussions
any of them may have with the Company's attorneys, or limit any truthful
statements made in any legal proceeding or as required by law.
VII. Acknowledgments and Release.
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A. In consideration of the Company's execution of this Agreement, and
except with respect to the Company's obligations arising under or preserved in
this Agreement, the Executive, for and on behalf of himself and his heirs and
assigns, hereby waives and releases any common law, statutory or other
complaints, claims, charges or causes of action arising out of or relating to
the Executive's employment or termination thereof, or his serving in any
capacity in respect of, the Company Group, both known and unknown, in law or in
equity, which the Executive may now have or ever had against the Company Group
(which for purposes of this Section VII shall also include not only each of its
parents, affiliates, and subsidiaries but also the employees, directors and
shareholders of the Company Group and each of its parents, affiliates and
subsidiaries), including, without limitation, any complaint, charge or cause of
action arising out of the Executive's employment with the Company or termination
thereof under the Age Discrimination in Employment Act of 1967 ("ADEA"), as
amended; the National Labor Relations Act, as amended; the Civil Rights Act of
1991; 42 U.S.C. 1981, as amended; the Americans With Disabilities Act of 1990;
Title VII of the Civil Rights Act of 1964, as amended; the Employee Retirement
Income Security Act of 1974, as amended; and any other federal, state and local
human rights laws. By signing this Agreement, the Executive acknowledges that he
intends to waive and release any rights known or unknown he may have under these
laws; provided, however, that the Executive does not waive or release claims
with respect to the right to enforce this Agreement. Without limiting the
generality of the foregoing, the Change of Control Agreement is hereby
extinguished and is of no further effect.
B. The Executive acknowledges that he has not filed, nor will he
initiate or cause to be initiated on his behalf, any complaint, charge, claim or
proceeding against the Company or any member of the Company Group before any
local, state or federal agency, court or other body relating to his employment
or the resignation thereof (each individually a "Proceeding"), nor will he
participate in any Proceeding, in each case, except as required by law. The
Executive represents that he is not aware of any basis on which such a
Proceeding could reasonably be instituted. The Executive waives any right he may
have to benefit in any manner from any relief (whether monetary or otherwise)
arising out of any Proceeding, including any Proceeding conducted by the Equal
Employment Opportunity Commission ("EEOC"). The Executive understands that by
entering into this Agreement, he will be limiting the availability of certain
remedies that he may have against the Company Group and limiting also his
ability to pursue certain claims against the Company Group.
C. The Executive acknowledges that he has been given twenty-one (21)
days from the date of receipt of this Agreement to consider all the provisions
of this Agreement and hereby agrees to waive the twenty-one (21) day period
provided under ADEA. He acknowledges that he has read this Agreement carefully,
has been advised to consult an attorney, and fully understands that by signing
below he is giving up certain rights which he may have to xxx or assert a claim
against the Company Group, as described in this Section VII and the other
provisions hereof. The Executive acknowledges that he has not been forced or
pressured in any manner whatsoever to sign this Agreement and the Executive
agrees to all of its terms voluntarily.
D. The Executive shall have seven (7) days from the date of execution
of this Agreement to revoke this Agreement (the "Rescission Period"), including
the release given under this Section VII with respect to all claims referred to
herein (including, without limitation, any and all claims arising under ADEA).
If the Executive revokes this Agreement, including, without limitation, the
release given under this Section VII, the Executive will be deemed not to have
accepted the terms of this Agreement, including without limitation any action
required by any Section of this Agreement.
E. In the event the Executive initiates or voluntarily participates in
any Proceeding, or if he fails to abide by any of the terms of this Agreement or
if he revokes this Agreement within the seven (7) day period provided under this
Section VII, the Company may, in addition to any other remedies it may have,
reclaim any amounts paid to him under the provisions of this Agreement and
terminate any benefits or payments that are subsequently due under this
Agreement, without waiving the release granted herein (except that such release
shall be waived, and reclaiming of payments made in the Rescission Period shall
also be waived, in the case of revocation during the Rescission Period).
F. The Executive acknowledges and agrees that the remedy at law
available to the Company for breach of any of his post-termination obligations
under this Agreement or his obligations under Section VII of this Agreement
would be inadequate and that damages flowing from such a breach may not readily
be susceptible to being measured in monetary terms. Accordingly, the Executive
acknowledges, consents and agrees that, in addition to any other rights or
remedies which the Company may have at law, in equity or under this Agreement,
upon adequate proof of his violation of any such provision of this Agreement,
the Company shall be entitled to immediate injunctive relief and may obtain a
temporary order restraining any threatened or further breach, without the
necessity of proof of actual damage.
G. Notwithstanding anything contained herein to the contrary, the
Company shall continue to indemnify and hold the Executive harmless pursuant to
the Company's Certificate of Incorporation and By Laws, and the Executive shall
continue to enjoy the benefits of the liability insurance policies maintained by
the Company, for the benefit of its directors and officers, including the
Executive.
H. The Executive hereby agrees that he will not reapply for employment
with or request to provide services to the Company following the Retirement
Date.
VIII. Miscellaneous.
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A. Notices. Any notice given pursuant to this Agreement to any party
hereto shall be deemed to have been duly given when mailed by registered or
certified mail, return receipt requested, or by overnight courier, or when hand
delivered as follows:
If to the Company:
Xxxxxx Xxxxxxx Corporation
Xxxxxxxxxx Xxxxxxxxx Xxxx
Xxxxxxx, Xxx Xxxxxx 00000-0000
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx
1285 Avenue of the Americas
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X. Xxxxxxx, Esq.
If to the Executive:
Xx. Xxxxxxx X. Xxxxx
00 Xxxxxxxxx Xxxx
Xxxxxxx Xxxxx, XX 00000
with a copy to:
Xxxxxxx Xxxxx LLP
00 Xxxxxxxxxx Xxxxxx
Xxxxxxxx, XX 00000
Attention: Xxxxxxx X. Xxxxxxx, Esq.
or at such other address as either party shall from time to time designate by
written notice, in the manner provided herein, to the other party hereto.
B. Successors. This Agreement shall be binding upon and inure to the
benefit of the parties, their respective heirs, successors and assigns.
C. Taxes. The Executive shall be responsible for the payment of any and
all required federal, state, local and foreign taxes incurred, or to be
incurred, in connection with any amounts payable to the Executive under this
Agreement. Notwithstanding any other provision of this Agreement, the Company
may withhold from amounts payable under this Agreement all federal, state, local
and foreign taxes that are required to be withheld by applicable laws and
regulations.
D. Severability. In the event that any provision of this Agreement is
determined to be invalid or unenforceable, the remaining terms and conditions of
this Agreement shall be unaffected and shall remain in full force and effect. In
addition, if any provision is determined to be invalid or unenforceable due to
its duration and/or scope, the duration and/or scope of such provision, as the
case may be, shall be reduced, such reduction shall be to the smallest extent
necessary to comply with applicable law, and such provision shall be
enforceable, in its reduced form, to the fullest extent permitted by applicable
law.
E. Counterparts. This Agreement may be executed by one or more of the
parties hereto on any number of separate counterparts and all such counterparts
shall be deemed to be one and the same instrument. Each party hereto confirms
that any facsimile copy of such party's executed counterpart of this Agreement
(or its signature page thereof) shall be deemed to be an executed original
thereof.
F. Non-Admission. Nothing contained in this Agreement shall be deemed
or construed as an admission of wrongdoing or liability on the part of the
Executive or on the part of the Company or any other person.
G. Entire Agreement. This Agreement is the entire agreement between the
Executive and the Company with respect to the subject matter hereof, including
without limitation any rights which may arise from the retirement of the
Executive from the Company. This Agreement supersedes all other agreements
pertaining to the subject matter hereof between the Executive and any member of
the Company Group, except to the extent specifically set forth herein. This
Agreement cannot be modified or amended except in a writing signed and agreed to
by the Executive and the Company.
H. Governing Law. This Agreement shall be governed by, and construed in
accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in that State; and the parties agree to the
jurisdiction of the Federal or state courts located within New Jersey.
I. Resolution of Disputes. Any disputes arising under or in connection
with the Executive's employment with the Company or this Agreement shall be
resolved by binding, confidential arbitration to be held in New York City in a
confidential, closed session in accordance with the rules and procedures of the
American Arbitration Association. The arbitrators may assess expenses, including
reasonable attorneys' fees, to either or both parties, taking into account the
circumstances of the case. Except as assessed by the arbitrator pursuant to the
previous sentence, each party shall bear its own expenses, including attorneys'
fees, in connection with any such dispute.
J. Cooperation. In partial consideration of the payments made to the
Executive pursuant to the provisions of this Agreement, during the period from
the date hereof through the second anniversary of the Retirement Date, the
Executive agrees to perform services for the Company by being "on call" and
available to assist the Company in any litigation matter or other matter on
which the Company may request the Executive's assistance including but not
limited to the handling or investigation of any administrative charges,
government inquiries or lawsuits involving the Company that relate to matters
that arose while the Executive was an employee of the Company and to consult
with the Company and its advisors, as requested, on business inquiries related
to any matters.
IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date and year first above written.
XXXXXX XXXXXXX CORPORATION
By: /s/ Xxxx X. Xxxxxx
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Name: Xxxx X. Xxxxxx
Title: Authorized Signatory
XXXXXXX X. XXXXX
/s/ Xxxxxxx X. Xxxxx
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