Exhibit 10.27
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Fort Xxxxxx Corporation
0000 Xxxxx Xxxxxxxx
Xxxxx Xxx, Xxxxxxxxx 00000-0000
December 31, 0000
Xxxxxx X. Xxxxxxxx
Dear Andy:
This letter agreement (the "AGREEMENT") sets forth our mutual
agreement concerning your resignation as an executive officer and employee of
Fort Xxxxxx Corporation, a Delaware corporation (the "COMPANY").
1. RESIGNATION. (a) You hereby confirm that you have resigned,
effective as of October 18, 1996, from your position as Executive
Vice President of the Company and from all other officerships that you held as
of such date with the Company or any of its subsidiaries or affiliates, and
you hereby resign, effective as of December 31, 1996 (the "SEVERANCE EFFECTIVE
DATE"), as an employee of the Company and its subsidiaries and affiliates.
(b) The Company will continue to pay you your base salary at the
current rate of $330,000 per annum (the "BASE SALARY"), and you will continue
to participate in the employee benefit plans of the Company in which you are
currently participating, until the Severance Effective Date.
(c) You will have no authority to bind, or make any commitments or
otherwise act on behalf of, the Company or any of its subsidiaries or
affiliates in any manner whatsoever on or after October 18, 1996. You agree
not to take any action which would cause any third party to assume that you
have such authority.
(d) It is hereby expressly agreed that the termination of your
employment with the Company and its subsidiaries and affiliates will be
treated as a termination by the Company without "cause" for purposes of any
applicable plan, arrangement or agreement between you and the Company or its
subsidiaries or affiliates including, without limitation, the Stock Option
Agreement dated as of December 6, 1995 between the Company and you (the
"1995 OPTION AGREEMENT").
2. SEVERANCE BENEFITS. The Company will provide you with the
following severance payments and benefits:
(a) SALARY CONTINUATION. The Company will continue to pay you the
Base Salary over the period commencing on January 1, 1997 and ending on
October 18, 1998. Such amounts will be payable in accordance with the
Company's payroll practices.
(b) MIP BONUS. The Company will pay you a bonus in the amount of
$363,000 (the "1996 BONUS") pursuant to the terms of the Company's Management
Incentive Plan (the "MIP") for the year ending December 31, 1996. The 1996
Bonus will be paid to you at the time MIP bonuses for 1996 are generally paid
to participating employees.
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(c) ADDITIONAL BONUS. The Company will pay you an additional
bonus in the amount of $321,178, which will be paid to you as promptly as
practicable after January 31, 1998.
(d) BENEFIT PLAN PARTICIPATION. (i) HEALTH INSURANCE. The
Company will continue your health and dental insurance coverage, and continue
to pay the employer portion of the applicable premiums, until the earlier of
October 18, 1998 and the date on which you are covered under another group
health plan. You agree to promptly notify the Company in writing in the event
that you obtain coverage under another group health plan.
(ii) LIFE INSURANCE. The Company will continue your group life
insurance coverage, and continue to pay the employer portion of the applicable
premiums, until October 18, 1998.
(e) RETIREMENT PLANS. For purposes of (i) the Company's Profit
Sharing Plan (the "PROFIT SHARING PLAN") and (ii) the Company's Supplemental
Retirement Plan and the Supplemental Retirement Agreement dated as of
January 1, 1989 between the Company and you, as amended (collectively, the
"SERP"), you will be eligible for a Company contribution for the year ending
December 31, 1996 pursuant to the terms of the Profit Sharing Plan and the
SERP. Such Company contribution will be calculated in accordance with the
terms of the Profit Sharing Plan and the SERP, and will be allocated to you at
the time contributions for 1996 are generally allocated to participating
employees. Your vested accrued benefits under the SERP will be distributed to
you in a lump sum as promptly as practicable after you reach age 62. In lieu
of any benefits for periods beginning after the Severance Effective Date under
the Profit Sharing Plan and the SERP, the Company will pay to you in cash as
promptly as practicable after March 31, 1998 an amount equal to the Company
contribution that would have been allocated to your accounts under the Profit
Sharing Plan and the SERP for the year ending December 31, 1997 had your
employment continued through the end of such year, assuming that your Base
Salary remained at $330,000 per annum.
(f) OUTPLACEMENT. In lieu of any provision of or payment for
outplacement, an office and secretarial assistance, the Company will pay to
you $50,000 in cash as promptly as practicable after January 31, 1997.
(g) NO OTHER COMPENSATION OR BENEFITS; DEATH. Except as otherwise
specifically provided herein, you will not be entitled to any compensation or
benefits or to participate in any past, present or future employee benefit
programs or arrangements of the Company or any of its subsidiaries or
affiliates after the Severance Effective Date, PROVIDED that you will be
entitled to receive your vested accrued benefits under the Profit Sharing Plan
and the SERP in accordance with the terms and conditions thereof. In the
event of your death prior to the end of the period of payment provided for in
this paragraph 2, the Company will pay to your estate or designated
beneficiary any amounts that are or become payable pursuant to this
paragraph 2.
3. FORT XXXXXX STOCK. Your shares of Common Stock, par value
$.01 per share (the "COMMON STOCK"), of the Company (the "SHARES"), which
Shares were purchased by you pursuant to (i) the Amended and Restated
Management Equity Participation Agreement, dated as of August 8, 1988, by and
among FH Holdings Corp., a Delaware corporation, and the other parties
signatory thereto, as amended and supplemented from time to time
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(collectively, the "MEPA") and (ii) the Management Equity Agreement dated as
of April 30, 1991 (the "1991 MANAGEMENT EQUITY AGREEMENT") will remain subject
to the terms and conditions of the MEPA or the 1991 Management Equity
Agreement, as the case may be, and the Stockholders Agreement dated as of
March 1, 1995 (the "STOCKHOLDERS AGREEMENT") among the Company and the other
parties signatory thereto.
4. FORT XXXXXX STOCK OPTIONS. Your options (the "OPTIONS") to
purchase shares of Common Stock, which Options were granted to you pursuant to
(i) the MEPA, (ii) the 1991 Management Equity Agreement and (iii) the
1995 Option Agreement, will remain subject to, and will be exercisable in
accordance with, the terms and conditions of (A) the MEPA, the 1991 Management
Equity Agreement or the 1995 Option Agreement, as the case may be, and (B) to
the extent applicable, the Stockholders Agreement. For purposes of the
1995 Option Agreement, your employment shall be deemed to have terminated as
of the Severance Effective Date.
5. CONSULTING ENGAGEMENT. In consideration of the payments and
benefits provided to you hereunder, you agree to serve as a consultant to the
Company for the period (the "CONSULTING PERIOD") beginning on January 1, 1997
and ending on December 31, 1998. Your services hereunder during the
Consulting Period will consist of such consulting and advisory services, and
will be provided at such times, as may be reasonably requested (after taking
into account any obligations you may have to another employer) from time to
time by the Board of Directors or Chief Executive Officer of the Company;
PROVIDED, HOWEVER, that such services will not be required for more than 4
days during any one-month period. The Company will reimburse you for any
reasonable out-of-pocket expenses incurred by you in connection with the
performance of such consulting and advisory services, PROVIDED that such
expenses have been approved in writing in advance by the Chief Executive
Officer of the Company.
6. NONEMPLOYEE STATUS. You will not be treated as an employee of
the Company or any of its subsidiaries or affiliates at any time after the
Severance Effective Date (including, without limitation, during the Consulting
Period) for purposes of any past, present or future employee benefit plan,
program or arrangement of the Company or any of its subsidiaries or
affiliates.
7. ENGAGING IN COMPETITION WITH THE COMPANY. (a) Through
October 18, 1998, except as the Company may otherwise expressly agree in
writing, you will not become an employee, owner (except for passive
investments of not more than three percent of the outstanding shares of, or
any other equity interest in any company or entity listed or traded on a
national securities exchange or in an over-the-counter securities market),
officer, agent, consultant or director of any firm or person which
(i) directly competes with a line or lines of business of the Company or any
subsidiary of the Company located in North America or the United Kingdom and
which accounts for ten percent (10%) or more of the Company's or such
subsidiary's gross sales, revenues or earnings before taxes, (ii) derives ten
percent (10%) or more of such firm's or person's gross sales, revenues or
earnings before taxes from a line or lines of business which directly competes
with a line or lines of business of the Company or any subsidiary of the
Company located in North America or the United Kingdom or (iii) is a
distributor (other than a retailer) of any of the products of the Company or
any subsidiary of the Company, or any of the products of any other firm or
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person which directly competes with a line or lines of business of the Company
or any subsidiary of the Company located in North America or the
United Kingdom. The Company agrees that it will, at your request, consult
with you from time to time concerning the application of the foregoing
restrictions. You and the Company agree that the scope of your noncompetition
covenant will be as set forth in this Section 7(a), notwithstanding any
noncompetition covenant contained in any other agreement between you and the
Company.
(b) CONFIDENTIALITY. You hereby agree to observe the terms of any
confidentiality or secrecy agreement that you have entered into with the
Company or any of its subsidiaries or affiliates prior to the date hereof
(including, without limitation, the Employees' Agreement with regard to
Proprietary Information including Inventions, Patents, Copyrights, Trade
Secrets and Confidential Information between you and the Company), the terms
of which are incorporated herein by reference as if such terms were set forth
herein in full.
(c) REMEDIES. You acknowledge and agree that a breach of any of
the covenants contained in this Section 7 may result in material and
irreparable injury to the Company or its subsidiaries or affiliates for which
there is no adequate remedy at law, that it will not be possible to measure
damages for such injuries precisely and that, in the event of such a breach or
threat thereof, in addition to any other remedies that may otherwise be
available for a breach of this Section 7 (including, without limitation, the
remedies described in the MEPA, the 1991 Management Equity Agreement and the
1995 Option Agreement), the Company will be entitled to seek a temporary
restraining order and/or a preliminary or permanent injunction (without the
necessity of a bond) restraining you from engaging in activities prohibited by
this Section 7 or such other relief as may be required to specifically enforce
any of the covenants in this Section 7. The parties agree that the
restrictions contained in this Section 7 are reasonable. However, if for any
reason it is determined that the restrictions under this Section 7 are not
reasonable or the consideration therefor is inadequate, such restrictions will
be interpreted or modified to include as much of the duration and scope
identified in this Section 7 as will render such restrictions valid and
enforceable.
8. COOPERATION. From and after the date hereof, you will (i)
cooperate in all reasonable respects (after taking into account any employment
obligations you may have) with the Company and its affiliates and their
respective directors, officers, attorneys and experts in connection with the
conduct of any action, proceeding, investigation or litigation involving the
Company or any of its affiliates, including any such action, proceeding,
investigation or litigation in which you are called to testify and (ii)
promptly respond to all reasonable requests by the Company and its affiliates
relating to information concerning actual or prospective customers of the
Company which may be in your possession. If you are called to testify in
connection with the ongoing antitrust investigation involving the Company in
Ohio, Florida and New York, you will be entitled to consult with counsel
designated by the Company at the Company's expense. The Company will
reimburse you for any reasonable out-of-pocket expenses incurred by you in
connection with your compliance with this Section 8, PROVIDED that such
expenses have been approved in writing in advance by the Chief Executive
Officer of the Company.
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9. RETURN OF PROPERTY. On or prior to the date hereof, you will
surrender to the Company all property of the Company and its affiliates in
your possession and all property made available to you in connection with your
employment by the Company, including, without limitation, any and all records,
manuals, customer lists, notebooks, computers, computer programs and files,
papers, electronically stored information and documents kept or made by you in
connection with your employment.
10. NO PUBLIC COMMENT. You and the Company agree to refrain from
making, directly or indirectly, now or at any time in the future (i) any
derogatory comment concerning the other party or any of such other party's
subsidiaries or affiliates, current or former directors, officers or employees
or (ii) any other comment that could reasonably be expected to be detrimental
to the business or financial prospects of the other party or any of such other
party's subsidiaries or affiliates, to the news or other media, any employees
of such other party or any of its subsidiaries or affiliates, or any
individual or entity with whom such other party or any of its subsidiaries or
affiliates has or may reasonably expect to have a business relationship.
11. BREACH OF AGREEMENT. (a) In the event of any material breach
by you of any provision of Section 7, 8, 9 or 10 of this Agreement, which
breach, if susceptible to cure, is not cured by you in accordance with
Section 11(b) below, the Company will cease to have any obligation to make
payments or provide benefits to you under this Agreement.
(b) If the Company believes that you have materially breached any
provision of Section 7, 8, 9 or 10 of this Agreement, the Company will provide
you prompt written notice of such alleged breach, which notice will identify
which provision(s) allegedly has been violated and specify in reasonable
detail what action or inaction by you constitutes the grounds for such
allegation. You will be provided at least 20 days to cure any such alleged
breach (unless the breach is such that it cannot be cured). In the event that
any such breach is cured by you pursuant to this Section 11(b) to the
reasonable satisfaction of the Company, the Company's obligations under this
Agreement will continue in effect retroactive to the date of such breach.
12. RELEASE.
(a) GENERAL RELEASE. (i) In consideration of the payments and
benefits provided to you under this Agreement, you hereby release and forever
discharge the Company, its subsidiaries and affiliates and each of their
respective officers, employees, directors and agents from any and all claims,
actions and causes of action (collectively, "CLAIMS"), including, without
limitation, any Claims arising under any applicable federal, state, local or
foreign law, that you may have, or in the future may possess, arising out of
(x) your employment relationship with and service as an employee or officer of
the Company or any of its subsidiaries or affiliates, and the termination of
such relationship or service, or (y) any event, condition, circumstance or
obligation that occurred, existed or arose on or prior to the date hereof;
PROVIDED, HOWEVER, that the release set forth in this Section 12(a)(i) will
not apply to (A) the obligations of the Company under this Agreement and (B)
the obligations of the Company and its subsidiaries to continue to provide
officer indemnification. You further agree that the payments and benefits
described in this Agreement will be in full satisfaction of any and all claims
for payments or benefits, whether express or implied, that you may have
against the Company or any of its subsidiaries or affiliates arising out of
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your employment relationship, your service as an employee or officer of the
Company or any of its subsidiaries or affiliates and the termination thereof.
(ii) The Company and its subsidiaries and affiliates hereby release
and forever discharge you, your estate and your legal representatives from any
and all Claims, including, without limitation, any Claims arising under any
applicable federal, state, local or foreign law, that it may have, or in the
future may possess, arising out of (x) your employment relationship with and
service, on or prior to the date hereof, as an employee or officer of the
Company or any of its subsidiaries or affiliates, and the termination of such
relationship or service, or (y) any event, condition, circumstance or
obligation that occurred, existed or arose on or prior to the date hereof;
PROVIDED, HOWEVER, that the release set forth in this Section 12(a)(ii) will
not apply to (A) your obligations under this Agreement and the plans and
agreements referred to herein, (B) any act or omission of yours which is in
violation of any applicable civil or criminal law or regulation and (C) any
materially false or misleading statement made by you to any customer,
distributor or supplier of the Company or any of its subsidiaries or
affiliates.
(b) SPECIFIC RELEASE OF ADEA CLAIMS. In consideration of the
payments and benefits provided to you under this Agreement, you hereby release
and forever discharge the Company, each of its subsidiaries and affiliates and
each of their respective officers, employees, directors and agents from any
and all claims, actions and causes of action that you may have as of the date
you sign this Agreement arising under the Federal Age Discrimination in
Employment Act of 1967, as amended, and the applicable rules and regulations
promulgated thereunder ("ADEA"). By signing this Agreement, you hereby
acknowledge and confirm the following: (i) you were advised by the Company in
connection with your termination to consult with an attorney of your choice
prior to signing this Agreement and to have such attorney explain to you the
terms of this Agreement, including, without limitation, the terms relating to
your release of claims arising under ADEA; (ii) you have been given a period
of not fewer than 21 days to consider the terms of this Agreement and to
consult with an attorney of your choosing with respect thereto; and (iii) you
are providing the release and discharge set forth in this Section 12(b) only
in exchange for consideration in addition to anything of value to which you
are already entitled.
13. MISCELLANEOUS.
(a) ENTIRE AGREEMENT. This Agreement, the MEPA, the
1991 Management Equity Agreement (including the Company's Management Equity
Plan), the 1995 Option Agreement (including the Company's 1995 Stock Incentive
Plan) and the Stockholders Agreement set forth the entire agreement and
understanding of the parties hereto with respect to the matters covered hereby
and supersede and replace any express or implied prior agreement (including,
without limitation, the Employment Agreement dated December 10, 1993, as
amended effective January 1, 1995, between the Company and you) with respect
to the terms of your employment and the termination thereof which you may have
had with the Company or any of its subsidiaries or affiliates. This Agreement
may be amended only by a written document signed by the parties hereto.
(b) GOVERNING LAW. This Agreement will be governed by, and
construed in accordance with, the laws of the State of New York.
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(c) NO MITIGATION. It is expressly agreed that you will not be
required to mitigate any payments or benefits due to you from the Company or
its affiliates under this Agreement or otherwise by seeking alternative
employment, nor will any payments from, or benefits provided by, the Company
or any of its affiliates be reduced by any amounts or benefits received in
connection with any such alternative employment (except as may be required
under this Agreement or the terms of the applicable benefit plan, arrangement
or agreement).
(d) WITHHOLDING TAXES. Any payments made or benefits provided to
you under this Agreement will be reduced by any applicable withholding taxes.
(e) NOTICES. Any notices required or made pursuant to this
Agreement will be in writing and will be deemed to have been given when
delivered or mailed by United States certified mail, return receipt requested,
postage prepaid, as follows:
if to Xxxxxx X. Xxxxxxxx:
(address)
with a copy to:
Xxxxxx X. Xxxxxx, Xx. & Associates
Xxxxxxxxx Xxxxx, Xxxxx 000
000 Xxxxxxxxxx Xxxxxx
Xxxxx Xxx, XX 00000
if to the Company:
Fort Xxxxxx Corporation
0000 Xxxxx Xxxxxxxx
Xxxxx Xxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxx XX
with a copy to:
Xxxxxxx X. Xxxxxxxx
Shearman & Sterling
000 Xxxxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
or to such other address as either party may furnish to the other in writing
in accordance with this Section 13(e). Notices of change of address will be
effective only upon receipt.
14. REVOCATION. This Agreement may be revoked by you within the
7-day period commencing on the date you sign this Agreement (the "REVOCATION
PERIOD"). In the event of any such revocation by you, all obligations of the
Company under this Agreement and will terminate and be of no further force and
effect as of the date of such revocation.
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No such revocation by you will be effective unless it is in writing and signed
by you and received by the Company prior to the expiration of the Revocation
Period.
FORT XXXXXX CORPORATION
By /s/ Xxxxx X. Xxxxxx XX
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Name: Xxxxx X. Xxxxxx XX
Title: Vice President
Accepted and Agreed:
/s/ Xxxxxx X. Xxxxxxxx
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Xxxxxx X. Xxxxxxxx
Dated: December 31, 1996
