Exhibit 10(dd)
AMENDMENT TO
EMPLOYMENT AGREEMENT
OF
XXXXXX X. XXXXXXXXXXX
THIS AMENDMENT made and entered into as of the 2nd day of July, 2002
by and between XXXXXX INTERNATIONAL, INC. (the "Company") and XXXXXX X.
XXXXXXXXXXX ("Executive");
W I T N E S S E T H:
WHEREAS, the Company and Executive entered into an Employment
Agreement, dated as of April 18, 1999, which Agreement became effective on
August 19, 1999, and which Agreement has previously been amended as of June 16,
1999, June 7, 2000 and February 14, 2002 (the Agreement as amended is
hereinafter referred to as the "Employment Agreement");
WHEREAS, the parties now desire to amend the Employment Agreement to
provide that Executive's employment and the Term shall end on August 1, 2002 and
that Executive shall receive compensation and benefits as hereinafter provided;
and WHEREAS, the parties desire to enter into this Amendment to the Employment
Agreement in order to provide for, among other things, an orderly relocation of
the Company's headquarters and transition of Executive's duties and
responsibilities.
NOW, THEREFORE, for and in consideration of the premises and the
mutual covenants and agreements contained herein and in the Employment
Agreement, the parties hereby agree to amend the Employment Agreement as
follows:
1.
Section 2(b) is hereby amended by deleting the present section in its
entirety and substituting the following in lieu thereof:
"(b) Executive's active employment under this Agreement
shall commence at the Effective Time and shall end on August 1, 2002
(the "Term"; the last day of the Term is hereinafter referred to as
the "Separation Date"), provided that Executive shall continue to
receive payment of his Base Salary monthly through July 31, 2003."
2.
The parties acknowledge and agree that Sections 3(a) through 3(g)
shall remain in effect through the Separation Date and cease to be in effect
thereafter, except for the following clarifications.
(a) The Base Salary owed to Executive pursuant to Section
3(a) for services between the date of this Amendment and the
Separation Date is $20,583.33 per month, plus customary gross-ups
including gross-ups usually paid at year-end. Such amounts shall be
payable in accordance with Section 3(a).
(b) Any amount owed to Executive pursuant to Section 3(b)
between the date of this Amendment and the Separation Date shall be
payable in accordance with Section 5.4(b). No amounts will be owed to
Executive under Section 3(b) on or after the Separation Date.
(c) The parties acknowledge that all obligations under
Section 3(c) of the Agreement have been satisfied.
(d) Commencing on the Separation Date and continuing until
July 31, 2003, Executive will be treated for purposes of the Xxxxxx
Retirement Plan as if he were on a paid authorized leave of absence
and will continue to be an active participant in the Xxxxxx Retirement
Plan. For the period from the Separation Date through July 31, 2003,
Executive will be paid $20,583.33 per month (subject to withholding of
all applicable taxes).
3.
Executive agrees and acknowledges that the provisions of Section 4 of
the Employment Agreement shall continue to apply to Executive after the
Separation Date in accordance with the terms thereof, except that Section 4(d)
is hereby amended by adding the following at the end of Section 4(d)(i):
"provided that the restrictions in this subsection shall only apply to
products produced or offered by the Company on the Separation Date"
4.
Section 5 is hereby amended as follows: (i) unless events or
circumstances have occurred prior to the Separation Date which give rise to a
claim under Sections 5.1 or 5.2 by Executive, as the case may be (it being
understood that any such claims shall not be duplicative of the rights under
Section 5.4, as added below), Sections 5.1 and 5.2 shall cease to be effective
on and after the Separation Date and (ii) the following new Section 5.4 shall be
added to the end of the present section:
"5.4 MUTUALLY AGREEABLE TERMINATION. Company and Executive
agree that Executive will terminate his active employment on the
Separation Date (as defined in Section 2(b) above) and that Executive
shall receive the compensation and benefits provided below. The period
from the Separation Date until August 1, 2004 is hereinafter referred
to as the "Separation Period." Consistent with the obligations under
this Employment Agreement (i) Executive shall not make (whether
written or oral), any statement that disparages the Company or its
present or future shareholders, affiliates, officers, directors,
employees or personnel (collectively, the "Company Persons") or the
professional or personal reputation of any of the Company Persons and
(ii) the Company
shall not make (whether written or oral), any statement that
disparages Executive or his personal or professional reputation.
(a) BASE SALARY - In payment of any additional Base Salary
payable to Executive for the Separation Period, Executive shall
receive a lump sum payment of $234,524.21 (subject to withholding of
all applicable taxes) on the Separation Date.
(b) BONUS AND INCENTIVES - In payment of Executive's prorata
bonus for the 2002 fiscal year and his bonus for the Separation
Period, Executive shall receive a lump sum payment of $231,425.79
(subject to withholding of all applicable taxes) on the Separation
Date.
(c) HEALTH AND LIFE INSURANCE COVERAGE - Executive's health
care coverage (including Exec-U-Care) and group term life insurance
coverage as in effect on the Separation Date shall be continued for the
Separation Period in the same manner as provided in Section 5.1(c)
above (without giving effect to any termination thereof), subject to
Executive's right to receive retiree life insurance under the terms of
such policy.
(d) RETIREE HEALTHCARE COVERAGE - The Company's retiree
healthcare coverage for Executive and his dependents shall commence at
the end of the Separation Period. The level of coverage and costs under
such plan for Executive and his dependents will be the same coverage
and costs provided on the Separation Date for executives and such
coverage shall be 100% vested and shall not be terminated in the future
(regardless of any termination of such coverage that may occur that
affects other executives). The obligations of this Section
5.4(d) shall terminate upon the later of: (i) the death of the
Executive and (ii) the death of his spouse.
(e) XXXXXX 401(K) PLANS - Executive shall receive an
additional payment with respect to the Separation Period for the
Xxxxxx 401(k) Plan and for the Xxxxxx Excess 401(k) Plan in the amount
of $31,867.20 in lieu of such amount becoming part of his account
under such Plans. Such payment shall be made to Executive within ten
(10) days of the Separation Date. Executive may request payment of his
account balances in the Xxxxxx 401(k) Plan and the Xxxxxx Excess
401(k) Plan in accordance with the terms of such plans.
(f) XXXXXX RETIREMENT PLAN - Executive shall receive a
payment with respect to the Separation Period for the Xxxxxx
Retirement Plan, as if he had earned one additional year of benefit
service and was two (2) years older, in the amount of $61,117.09. Such
payment shall be made to Executive within ten (10) days of the
Separation Date. Executive shall continue to participate in the Xxxxxx
Retirement Period through July 31, 2003, at which time he will cease
to be an Employee for purposes of the Xxxxxx Retirement Plan and shall
be eligible to retire and receive an Early Retirement Income based on
32 years of Benefit Service.
(g) SERP AND EXECUTIVE SERP - For purposes of the Xxxxxx,
Inc., and Subsidiaries Supplemental Retirement Benefit Plan ("SERP"),
and the Xxxxxx, Inc. Supplemental Retirement and Disability Plan For
Corporate Office Employees ("Supplemental SERP"), Executive shall be
entitled on the Separation Date to a 100% vested benefit under the
SERP and Supplemental SERP and shall be treated on the Separation Date
as if he had earned additional years of benefit
service equal to the length of the Separation Period and was two (2)
years older. Executive shall be paid his benefits under the SERP and
Supplemental SERP in a lump sum in the following amounts: SERP -
$136,590.29; Supplemental SERP $115,967.18. The lump sum payments to
Executive shall be made within ten (10) days of the Separation Date.
The Company shall have no further obligations to Executive in respect
of the SERP, the Supplemental SERP or any other retirement benefit
plan after the making of this payment, except for the obligations to
pay Executive's account in the Xxxxxx Excess 401(k) Plan and
Executive's rights under the Xxxxxx Retirement Plan and the Xxxxxx
401(k) Plan.
(h) EXECUTIVE LIFE INSURANCE PROGRAM - During the Separation
Period, the Company will continue to pay the premiums on the $250,000
executive life insurance policy as if Executive's employment had
continued for the Separation Period. The insurance policy (after the
payments referred to in the preceding sentence) shall be delivered to
Executive on the last day of Separation Period, free and clear of any
loans, liens or other encumbrances. Except for subsection (c) and this
subsection (h), the Company shall have no further obligations in
respect of the maintenance of life insurance for Executive.
(i) STOCK OPTIONS - On the Separation Date, (i) Executive's
Nonqualified Stock Option (Time Option), dated August 19, 1999 for
15,000 shares and Nonqualified Stock Option (Time Option), dated June
1, 2000, for 7,500 shares (which amount includes shares already
vested) shall become fully vested and immediately exercisable (such
Options are hereinafter referred to as the "Time Options"), and (ii)
Executive's Nonqualified Stock Options granted under the Xxxxxx
International, Inc. 2000 Stock Incentive Plan, for 20,000 shares
on June 29, 2001, and for 15,000 shares on February 19, 2002 (which
amount includes shares already vested) shall become fully vested and
immediately exercisable (hereinafter the "2000 Plan Options").
Executive shall have until August 1, 2005 to exercise the Time Options
and the 2000 Plan Options. The Time Options and the 2000 Plan Options
are hereby amended to the extent necessary to reflect the provisions
of this Section 5.4(i).
(j) EMPLOYEE STOCKHOLDER AGREEMENT - As of the Separation
Date, Executive's termination shall be treated as qualifying as a
termination by the Company for a reason other than for Cause for
purposes of Article IV of the Employee Stockholders Agreement, dated
as of August 19, 1999 (the "Employee Stockholders Agreement"), and the
other provisions of such agreement. Executive's rights and obligations
as set forth in the Employee Stockholders Agreement shall continue
after the Separation Date, including Executive's rights to sell shares
of Common Stock subject to the Employee Stockholders Agreement
commencing on August 19, 2004.
(k) ACCRUED VACATION - Executive shall be paid his accrued
vacation on the Separation Date.
(l) BUSINESS EXPENSES - Executive shall be reimbursed on or
before the Separation Date for all reasonable business expenses for
which he has submitted Company expense reports. Executive shall also
be reimbursed for all other reasonable business expenses he has
incurred or paid through the Separation Date promptly after submission
of a Company expense report for such expenses.
(m) MISCELLANEOUS - Executive hereby waives any rights to
receive office space, an administrative assistant and reasonable
expenses related thereto
for the Separation Period. In lieu of such benefits, the Company will
(i) assign and transfer to Executive his current automobile, free and
clear of all liens and encumbrances, (ii) pay Executive the amount of
$20,000 (less applicable withholding taxes), and (iii) transfer to
Executive the Company's rights (if any) to memberships in any
recreational or social clubs of which Executive is currently a
member."
5.
The parties agree and acknowledge that Section 5.3 and Sections 6
through 17 of the Employment Agreement shall remain in effect, even after the
Separation Date in accordance with the terms thereof.
6.
Except for the rights under the Employment Agreement, as amended
hereby, and the Employee Stockholders Agreement, and the rights under the
related Company plans, programs and benefit arrangements, (i) Executive has no
other rights or claims, contractual or otherwise, as against the Company or any
of the Company Persons or claims arising out of Executive's employment by and
Executive's service as an officer of the Company and the termination of such
employment and service and (ii) the Company has no other rights or claims
contractual or otherwise, as against Executive or claims against Executive
arising out of Executive's exercise of his responsibilities and duties as an
employee or an officer of the Company.
Executive affirms that he has been given at least forty-five (45) days
within which to consider this release and its consequences, that he has seven
days following his signing of this Amendment to revoke and cancel the terms and
conditions contained herein and the terms and conditions of this Amendment shall
not become effective or enforceable until the seven-day revocation period has
expired, and that, prior to the execution of this Amendment, he has been
advised by the Company to consult with, and has consulted with, an attorney of
his choice concerning the terms and conditions set forth herein.
This Amendment to the Employment Agreement shall be effective on the
date of this Amendment. Except as hereby modified, the Employment Agreement
shall remain in full force and effect.
IN WITNESS WHEREOF, the undersigned have executed this Amendment as of
the day and year first written above.
XXXXXX INTERNATIONAL, INC.
By:
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EXECUTIVE
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XXXXXX X. XXXXXXXXXXX
