November 30, 1998
Xx. Xxxxx Xxxxxxxx
[Address]
Dear Xxxxx:
This letter is to confirm our agreement in connection with the settlement of
your rights arising from your employment agreement (the "Agreement") made as of
December 1, 1994 with Harmac Pacific Inc. (the "Company") as a result of the
acquisition of control of the Company by Xxxx & Xxxxxx, Inc. ("P&T") on February
2, 1998.
Under the Agreement, on the change in control, you were entitled to terminate
your employment on notice to the Company and to receive from the Company an
amount equal to three times the sum of your base salary for 1998 and the average
bonus paid to you in respect of 1995, 1996 and 1997.
You have since accepted employment with P&T as its Vice President Pulp Division,
which role includes acting as the President and Chief Operating Officer of the
Company.
I confirm that you and we have agreed to terminate the Agreement in its
entirety, without further liability of either party, effective August 31, 1998
in consideration of the following:
1. The payment to you by the Company of the sum of $557,500, the receipt of
which you hereby acknowledge; and
2. Our agreement that if on or before July 31, 1999 you resign on not less
than 30 days' notice or are dismissed from your employment by P&T:
a. the Company will pay you the further sum of $278,750;
b. unless you are then receiving long-term disability payments under the
Company's long-term disability plan, on the specified date of
termination you will be entitled to receive from the Company's pension
plans for its salaried employees and executive officers the benefits
payable in accordance with the terms of those plans;
c. until the earlier of the first anniversary of the date of the
termination of your employment and the end of the month in which you
commence employment with another employer that provides reasonably
comparable benefits and perquisites to its senior executives as those
provided by the Corporation:
Xx. Xxxxx Xxxxxxxx
November 30, 1998
Page 2
i. subject to your insurability, you will continue to be eligible
for all employee life, medical and dental insurance and other
benefits, other than pension and long-term disability benefits
under benefit plans and programs then in effect for executive and
key management employees of P&T and P&T shall provide same or, at
its option, shall purchase substantially comparable benefits
outside its existing plans and programs; provided, however, that
nothing herein shall be construed as limiting P&T's right to
terminate any such plan or program at any time or from time to
time; and
ii. P&T shall continue to provide the perquisites and benefits which
were provided to you at the time of the termination of your
employment, other than pension and long-term disability benefits,
and other than participation in any share option plan, or any
bonus or incentive plan or arrangement established for executive
officers of P&T; and
d. the Company shall reimburse you for employment relocation and
financial counselling and tax planning services actually incurred to
an aggregate maximum of $10,000, provided that the relevant consultant
has been approved in writing by the Company prior to the incurring of
such fees or expenses.
Please sign below to confirm your agreement with the foregoing terms and return
a signed copy to me, whereupon this will become a binding agreement.
Yours truly,
Xxxxxxx Xxxxxxxx
Chairman of the Board &
Chief Executive Officer
/s/ XXXXX XXXXXXXX
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Xxxxx Xxxxxxxx Date
