EXHIBIT 10.25
RETIREMENT AGREEMENT
THIS RETIREMENT AGREEMENT (hereafter, this "Agreement") is made as of the
1st day of December 2000, by and between OUTSOURCING SERVICES GROUP, INC. (the
"Company") and XXXXXXXXXXX XXXXXX ("Xxxxxx").
RECITALS
A. The Company and Xxxxxx have previously entered into an Employment and
Non-Competition Agreement (the "Employment Contract") dated as of December 31,
1997.
X. Xxxxxx is a party to the Company's Amended and Restated Stockholder
Agreement, dated as of June 30, 1997 (as amended, the "Stockholder Agreement").
X. Xxxxxx has terminated his employment as Chief Executive Officer of the
Company as of July 24, 2000, and has resigned his directorships with the Company
and each of its subsidiaries as of December 1, 2000.
D. The parties desire to enter into an agreement in order to define the
rights and responsibilities of each party in connection with Xxxxxx'x
resignation, and to ratify certain provisions of the Employment Contract.
NOW, THEREFORE, in consideration of the mutual covenants and conditions
herein, and other good and valuable consideration, the receipt and sufficiency
of which is hereby acknowledged, the parties agree as follows:
1. TRANSITORY CONSULTING ARRANGEMENT. Beginning December 1, 2000, and
ending on or about March 31, 2001 (the "Consulting Term"), Xxxxxx will provide
assistance to the Company's management as required in connection with concluding
the Revlon UK takeout opportunity, and the Allendale sponge business (the
"Projects"). Such assistance will include, but shall not be limited to,
generally advising the officers and directors with respect to the status of the
Projects, and performing such other duties in connection with the Projects as
Xxxxxx Xxxxx requests in his reasonable discretion. As compensation for these
services, Xxxxxx shall receive a monthly payment in the amount of Ten Thousand
Dollars ($10,000), payable on the last day of each month in the Consulting Term.
2. ADDITIONAL COMPENSATION. Xxxxxx shall continue to receive the salary
payments due to him under Section 3.01 of the Employment Contract, namely salary
at the rate of $300,000 per annum, payable in accordance with the normal payroll
practices of the Company, through December 31, 2000, in addition to monies
received pursuant to Section 1, above. In addition, through April 6, 2001, the
Company shall continue to provide Xxxxxx with the leased automobile he presently
uses, and the same insurance benefits to which he was entitled under the
Employment Contract. After December 31, 2000, Xxxxxx'x medical benefits may be
continued at Xxxxxx'x expense, consistent with Section 3.04 of the Employment
Contract
3. BONUS PLANS. Xxxxxx shall continue to participate in the Company's stock
option program and other management incentive programs, as described in Section
3.02 of the Employment Contract, for the fiscal year 2000.
4. REPURCHASE OF COMPANY SHARES. The Company hereby exercises its right
under the Stockholder Agreement to repurchase the 20,000 shares of common stock
of the Company, par value $0.001 per share (the "Company Shares") currently
owned by Xxxxxx. The Company shall purchase the Company Shares for Twenty-Six
Dollars ($26.00) per share, less the outstanding principal balance of the
promissory note made by Xxxxxx in favor of the Company (including any accrued
but unpaid interest), currently One Hundred Sixty Thousand Dollars
($160,000)(the "Purchase Price"). The Purchase Price shall be paid in full, in
cash, in January 2001, following the preparation and review of the Company's
unaudited financial statements for the year ending December 31, 2000.
5. DEEMED CONTINUED EMPLOYMENT. For purposes of the vesting of Xxxxxx'x
options to purchase 85,000 shares of the common stock of the Company ("Company
Stock"), at a price of Ten Dollars ($10.00) per share, as described in that
certain Stock Option Agreement, dated as of December 31, 1997, by and between
Xxxxxx and the Company (the "Options"; the "Option Agreement"), Xxxxxx shall be
deemed to be employed by the Company through December 31, 2000. As promptly as
possible after December 31, 2000, Xxxxxx shall exercise the Options in the
manner described in the Option Agreement and the shares of Company Stock issued
in respect of such exercise (the "Option Shares") shall be governed by the
Stockholder Agreement.
6. REPURCHASE OF OPTION SHARES. The Company shall exercise its right under
the Stockholder Agreement to repurchase the 85,000 Option Shares which will be
issued to Xxxxxx following exercise of the Options. The Company shall purchase
the Option Shares for Nineteen Dollars ($19.00) per share, for a total purchase
price of Seven Hundred Sixty-Five Thousand Dollars ($765,000)(the "Purchase
Price"). The Purchase Price shall be paid in cash in two installments of Three
Hundred Eighty-two Thousand Five Hundred Dollars ($382,500), one of which shall
be paid on or before January 31, 2001, and the other of which shall be paid on
or before April 30, 2001.
7. PAYMENT OF SUPPLEMENTAL EMPLOYEE RETIREMENT PLAN ("SERP") BENEFITS. All
benefits to which Xxxxxx is entitled pursuant to that certain supplemental
retirement plan, by and between Xxxxxx and CCL Industries, Inc. ("CCL"), the
former owner of Kolmar Laboratories, Inc. ("Kolmar"), Xxxxxx'x former employer
and one of the Subsidiaries, will be paid out in full to Xxxxxx on or before
January 31, 2001. The parties agree that the exact value of Xxxxxx'x accumulated
SERP benefits shall be calculated at the Expiration Date, pursuant to the
documentation provided by CCL to the Company at the time the Company acquired
Kolmar, and is presently estimated to be approximately $600,000. The parties
hereto agree that such payment shall be structured in the manner which is most
advantageous to Xxxxxx from a tax perspective, provided that Company suffers no
detriment from such structuring.
8. NONCOMPETITION; NONSOLICITATION. Xxxxxx confirms that he shall remain
bound by the restrictive covenants in Sections 5.01 and 5.02 of the Employment
Contract, as follows:
a. The Company's formulas, sources of supply, cost and financial data,
customer arrangements, marketing plans and other non-public data have a unique
nature and value, derived in part from their status as non-public and
proprietary information. Xxxxxx agrees to preserve and protect the confidential
nature of said information, and not to disclose to any third parties, or use for
anyone's benefit except the benefit of the Company, any non-public information
about the Company or its business.
b. For two (2) years after the date of this Agreement, Xxxxxx will not
directly or indirectly, solicit, take away, or attempt to solicit or take away
any customer or employee of the Company either on his own behalf or on behalf of
any other person or entity which competes with the Company. Xxxxxx acknowledges
that this restriction applies to solicitation conducted directly, or indirectly
through subordinates or colleagues, and that any position with an enterprise
which engages in such activity is not allowed. The Company acknowledges that
this restriction extends only to the markets in which the Company currently
competes.
Upon a material breach by Xxxxxx of either of these covenants, the Company
will be entitled to pursue all remedies available to it, whether in law or in
equity. The Company's failure to pursue a particular remedy following a breach
by Xxxxxx shall not act as a waiver of the Company's right to pursue such remedy
at a later date.
9. MANAGEMENT TRANSITION. Xxxxxx shall continue to use his best efforts to
facilitate the effective transition to the Company's management of all customer
relationships and other material business relationships, and to preserve the
Company's goodwill with other parties.
10 ENTIRE OBLIGATION. The amounts paid to Xxxxxx by the Company pursuant to
paragraphs 1-4, 6, and 7 above represent the entire obligation of the Company to
Xxxxxx with respect to the Employment Contract and this Agreement, and Xxxxxx
has no entitlement under the Employment Contract or this Agreement, or any
amendments or supplements thereto, to additional compensation or other payments
from the Company.
11. ENTIRE AGREEMENT. This Agreement, in connection with the Stockholder
Agreement, the Option Agreement, and the Employment Contract as referenced
herein, constitutes the entire agreement between the Company and Xxxxxx with
respect to the subject matter hereof. The parties hereto acknowledge that no
representations, inducements, promises or agreements, oral or otherwise, have
been made by any party, or anyone acting on behalf of any party, which are not
embodied herein.
12. ATTORNEYS' FEES AND COSTS. If any action in law or in equity is
required to interpret or enforce the terms of this Agreement, the prevailing
party (as determined by the court or arbitrator) shall be entitled to recover
reasonable attorneys' fees, costs and related
disbursements, in addition to any other relief to which such party may be
entitled, to the extent awarded or allocated by the court or arbitrator.
13. GOVERNING LAW. This Agreement shall be governed by the laws of the
State of New York.
14. COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and each such counterpart hereof shall be deemed to be an original
instrument, but all such counterparts together shall constitute but one
agreement. Facsimile signatures shall be treated as if they were originals.
(Signature Page Follows)
[SIGNATURE PAGE - RETIREMENT AGREEMENT (XXXXXX)]
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the day and year first above written.
"Company"
OUTSOURCING SERVICES GROUP, INC.
By: /s/ Xxxxxx X. Xxxxx
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Name: Xxxxxx X. Xxxxx
Its: President and CEO
"Xxxxxx"
/s/ Xxxxxxxxxxx Xxxxxx
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XXXXXXXXXXX XXXXXX
