EXHIBIT 10.3
SEPARATION AGREEMENT
This Separation Agreement (the "Agreement") is made and entered into
this 31 day of May 2005, by and between The Xxxxxxxx and Xxxxxxxx Company, an
Ohio corporation ("Xxxxxxxx"), and Xxxx X. Xxxxxxx ("Medford"). Xxxxxxxx and
Medford are hereinafter sometimes referred to individually as a "Party" and
collectively as the "Parties."
WHEREAS, Medford currently serves as Executive Vice President, Chief
Financial Officer, and Chief administrative Officer of Xxxxxxxx and as a member
of the Board of Directors of Xxxxxxxx and as an officer and director of certain
Xxxxxxxx' subsidiaries and affiliates;
WHEREAS, Medford desires to retire and resign from his all of his
positions and offices of Xxxxxxxx and its subsidiaries and affiliates;
WHEREAS, Medford and Xxxxxxxx have previously entered into the
following agreements (a) a Change in Control Agreement (the "Change in Control
Agreement") executed on May 7, 2001, as amended and restated as of the 1st day
of December 2001, and as amended and restated as of the 11th day of November
2003, (b) an Officer's Agreement (the "Officer's Agreement") executed on October
17, 2002, ( c) a Change in Control Agreement executed on September 30, 2004 (the
"Further Change in Control Agreement"), and (d) a Retention Letter Agreement
dated July 20, 2004 (the "Retention Letter Agreement");
WHEREAS, Xxxxxxxx and Medford have agreed to treat Medford's
retirement as a termination for reasons other than a "Discharge for Cause" as
such term is defined in the Change in Control Agreement for purposes of his
severance benefits and payments;
WHEREAS, the Parties wish to memorialize the terms of their
separation, all as expressly reflected herein;
NOW, THEREFORE, for and in consideration of the promises and
covenants made between the Parties and other good and valuable consideration,
the receipt and sufficiency of which are hereby acknowledged, the Parties agree
as follows:
1. Termination Date. Effective June 1,2005 (the "Termination Date"),
Medford will retire and resign from all positions and offices he
holds as an employee and director of Xxxxxxxx and each of its
subsidiaries and affiliates on the condition that Medford will be
treated for purposes of his severance benefits and payments as
though he was terminated by Xxxxxxxx for reasons other than a
"Discharge For Cause" under the Change in Control Agreement. Medford
agrees to immediately execute any resignations and/or other
documents as Xxxxxxxx may reasonably request in connection with any
Xxxxxxxx' committees or boards on which Medford participated.
2. Severance Benefits and Payment. In connection with the termination
of Medford's employment with Xxxxxxxx and as full satisfaction for
any and all amounts to which Medford is entitled to receive from
Xxxxxxxx under the Change in Control Agreement, Further Change in
Control Agreement, Retention Letter Agreement, and Officer's
Agreement (collectively, the "Medford Agreements"), Xxxxxxxx agrees
to provide Medford those benefits and payments (collectively, the
"Severance Benefits") set forth on Exhibit A attached hereto and
made a part hereof. Unless otherwise provided herein or on Exhibit
A, the Severance Benefits shall be paid or made available by
Xxxxxxxx to Medford within thirty (30) days of the Termination Date.
With regard to that portion of the Severance Benefits listed on
Exhibit A which are lump sum payments listed under the heading,
"Non-Qualified Pension Plan Benefits" (including Part I, Part II and
Part III thereof) (collectively, the "Non-Qualified Pension Plan
Benefits") and Item 3 on page 2 of Exhibit A, however, such lump sum
payments shall be made by Xxxxxxxx to Medford on December 1, 2005,
OR SUCH LATER DATE AS REASONABLY REQUESTED BY MEDFORD IN ORDER TO
COMPLY WITH APPLICABLE LAWS. Medford acknowledges and agrees that
his receipt of the Non-Qualified Pension Plan Benefits, are subject
to his compliance with the non-compete provisions of The Xxxxxxxx
and Xxxxxxxx Company Supplemental Retirement Plan effective October
1, 1978, as amended and restated, as such plan has been combined
with the Officer's Salary Continuation Plan on October 1, 2002
(collectively, the "Plan"). If Medford is determined to have
violated such noncompetition provisions, Xxxxxxxx may suspend such
payments and Medford shall forfeit all rights to such payments as
provided by Section 21 of the Plan.
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3. Non-Competition. Although Medford's employment with Xxxxxxxx will be
terminated on the Termination Date, Medford will continue to be
bound by those obligations set forth in the Officer's Agreement that
survive termination of his employment, including, but not limited
to, the non-compete, non-solicitation and confidentiality
obligations set forth therein. For purposes of the non-compete and
non-solicitation provisions of the Officer's Agreement, the Parties
agree that the twelve month period shall commence upon the last to
occur of the following: (a) the Termination Date; or (b) December 1,
2005 or such later date as Medford may request for payment of
certain amounts as outlined in Section 2 above.
4. Medford Waiver. In consideration of Xxxxxxxx' agreement to treat
Medford's termination as a termination for reasons other than a
"Discharge for Cause" for purposes of Section 2 of the Change in
Control Agreement, Medford, for himself and his heirs and estate,
fully and completely releases Xxxxxxxx from any claim or liability
under the Medford Agreements (other than Xxxxxxxx' obligations under
Section 2 of the Change in Control Agreement), and fully and
completely releases each of Xxxxxxxx' subsidiaries and affiliated
companies, and each of their stockholders, directors, employees,
agents, representatives, successors, and assigns from any and all
claims, liabilities, promises, agreements, and lawsuits arising from
or related to Medford's employment with Xxxxxxxx, and retirement and
separation from employment, including any and all claims of race,
color, sex, national origin, ancestry, religion, disability, age or
other discrimination, harassment, or retaliation, including any and
all claims under the Ohio Civil Rights Act, Ohio Revised Code
("O.R.C.") Section 4112 (and sections following), the Ohio
Whistleblower's Act, O.R.C. Section 4113.52 (and sections
following), the Ohio Workers' Compensation Retaliation Law, O.R.C.
Section 4123.90, Title VII of the Civil Rights Act of 1964,42 USC
Section 2000e (and sections following), the Employee Retirement
Income Security Act, 29 USC Section 1001 (and sections following),
the Reconstruction Era Civil Rights Act, 42 USC Section 1981 (and
sections following), the Age Discrimination in Employment Act
("ADEA"), 29 USC Section 621 (and sections following), the Americans
with Disabilities Act, 42 USC Section 12101 (and sections
following), the Family and Medical Leave Act, 29 USC Section
2601(and sections following), the Worker Adjustment and Retraining
Notification Act, 29 USC Section 2100 (and sections following), and
the amendments to such laws, as well as any similar or related
statute(s) of Ohio or another state or district, and claims for
breach of contract, promissory estoppel, wrongful termination,
personal injury, defamation, loss of consortium, distress,
humiliation, loss of standing and prestige, public policy, or any
tort, whether such claims are known or unknown, which Medford now
has, or claims to have, against Xxxxxxxx relating to any event or
circumstance occurring prior to the seventh (7th) day following the
date of this Agreement, and also including any claims that may
depend upon the identity person(s) selected to perform some or all
of the duties that Medford formerly performed. Medford agrees not to
file any lawsuit against Xxxxxxxx in the future with respect to any
claim released under this Agreement. Medford waives any right to
reemployment with Xxxxxxxx, and agrees that Xxxxxxxx may reject any
application he may make for re-employment without any liability
whatsoever.
5. Right to Rescind. In accordance with applicable law, Medford
confirms that he has been given twenty-one (21) days to consider
whether to sign this Agreement, and has the right to rescind this
Agreement within a period of seven (7) calendar days following its
execution, by delivering written notice of revocation to Xxxxxxxx
c/o Xxxxxxx X. Xxxxxxx, Executive Vice President, Corporate Services
and Xxxxxxxx International, The Xxxxxxxx and Xxxxxxxx Company, Xxx
Xxxxxxxx Xxx, Xxxxxxxxx, Xxxx 00000, 937-4850978 (facsimile), and
that, in the event of such revocation, Xxxxxxxx shall have no
obligation to Medford under the Change in Control Agreement.
6. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Ohio without regard to
conflicts of laws principles.
7. Counterparts. This Agreement may be executed in one or more
counterparts, each of which will be deemed an original and all of
which together will constitute one and the same instrument.
8. Binding Agreement. The Parties hereto warrant that each has been
represented by counsel in connection with this Agreement, that they
have read this Agreement, that they intend to be legally bound by
the same, that they have entered into this Agreement freely and
voluntarily, and that they have the full right, power, authority and
capacity to enter into and execute the same. The Parties hereto
further warrant that this Agreement is entered into with no Party
relying upon any statement or representation made by any other Party
not expressly embodied in this Agreement.
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9. Entire Agreement. This Agreement sets forth the entire agreement and
understanding of the Parties relating to the subject matter
contained herein and merges all prior discussions, correspondence,
agreements, promises, commitments, contracts or other instruments or
understandings between them and no Party shall be bound by any
subsequent instrument, agreement or representation pertaining to the
subject matter contained herein unless expressed in writing and
signed by the Parties hereto.
IN WITNESS WHEREOF, the Parties have hereunto set their hands
as of the date first written above.
/s/ Xxxx X. Xxxxxxx
-------------------------
Xxxx X. Xxxxxxx
THE XXXXXXXX AND XXXXXXXX COMPANY
By.: ______________________________
Its._______________________________
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EXHIBIT A
RETIREMENT BENEFITS ESTIMATE
XXXX XXXXXXX
Address: 2312 Annandale PI Benefit Commencement Date: 06/01/2005
City: Beavercreek Last Date Employed: 05/31/2005
Xxxxx/Xxx: XX 00000 Date of Birth: 05/24/1950
Date of Hire: 03/18/1974 Credited Service: 31.25 years
QUALIFIED PENSION PLAN BENEFIT ANNUITY LUMP SUM
--------- -------------
Eligible for a monthly life annuity benefit in the amount of $2,680.00
NON-QUALIFIED PENSION PLAN BENEFIT
PART I: SALARY CONTINUATION BENEFIT
Present Value of lump sum benefit is $1,271,172.00
PART II: SUPPLEMENTAL BENEFIT
Present Value of lump sum benefit is $2,643,032.00
PART III: DEFERRED COMPENSATION
Present Value of lump sum benefit is $ 819,528.00
PART IV: SOCIAL SECURITY SUPPLEMENT - PAYABLE UNTIL AGE 62
Eligible for a monthly annuity benefit in the amount of $1.919.00
--------- -------------
$4,599.00 $4,733,732.00
RETIREE MEDICAL PLAN
Benefit will commence 06/01/2005 and includes coverage options for medical,
prescription drugs, dental, vision and life insurance.
NOTES:
- Retiree Medical Plan is subject to amendment from time to time.
- Alternate forms of payment other than monthly life annuity are available
for the Qualified and the Non-Qualified benefits.
- Details of the plan provisions are found in the plan documents.
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Exhibit A (Continued)
1. Pursuant to the Retention Letter Agreement, Xxxxxxxx shall make a one time
payment of One Hundred Twenty Five Thousand Dollars ($125,000) and the
Restricted Stock Award granted pursuant to such Retention Letter Agreement
shall vest upon the Termination Date.
2. In lieu of further participation in the personal performance bonus and
incentive bonus programs for fiscal year 2005 in which Medford currently
participates, Xxxxxxxx shall make a one-time payment to Medford at the
time bonuses under such programs have been determined and are payable in
an amount equal to a pro rata portion (determined based on the portion of
the fiscal year completed prior to the Termination Date) of the amounts
Associate would have earned had he remained employed throughout the entire
fiscal year (using fiscal year 2004's personal performance bonus
percentage).
3. Pursuant to Xxxxxxxx' standard policies and the Retention Letter
Agreement, Xxxxxxxx shall make a one-time payment to Medford on December
1, 2005 in the amount of Seven Hundred Thirty Thousand Dollars ($730,000).
4. Medford shall be responsible for any federal, state or local income taxes
payable as a result of any payments or other benefits provided under this
Agreement. Current tax laws require that FICA and Local taxes (if
applicable) be paid on the present value of all non-qualified plan
benefits as soon as the benefit is determinable (at
severance/termination), regardless of whether the benefit is payable at
that time or at some future date.
5. As of the Termination Date, eligibility, vesting and benefit accrual
service under the Xxxxxxxx defined benefit plan, the Xxxxxxxx 401(k)
savings plan and any nonqualified plans maintained by Xxxxxxxx shall
cease, and Medford shall no longer be eligible to make elective deferrals
into, nor receive an allocation of any Xxxxxxxx contribution under, the
Xxxxxxxx 401(k) savings plan.
6. Medford acknowledges that sixty (60) days after the Termination Date, the
incentive stock options he has available for exercise shall convert to
non-qualified stock options if he has not exercised them before that date.
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