EXHIBIT 10.9
AGREEMENT
THIS AGREEMENT made this 21 day of May, 1997, by and between
BANDAG, INCORPORATED, an Iowa Corporation ("Bandag"), and XXXXXXX X.
XXXXXXXX ("Xxxxxxxx").
WHEREAS, Xxxxxxxx has been employed by Bandag in an executive
capacity for a number of years; and
WHEREAS, the parties hereto desire to cease this relationship
under the terms and conditions hereinafter set forth;
NOW, THEREFORE, in consideration of the premises and the
following mutual agreements, it is agreed between the parties hereto as
follows:
1. Xxxxxxxx agrees to consult with an attorney prior to
signing this agreement and shall have twenty-one (21) days within which to
consider this agreement. If this agreement is signed by Xxxxxxxx, he may
revoke this agreement within seven (7) days following signing of this
agreement by Bandag and this agreement will become effective and
enforceable on, but not before, the date on which the seven-(7)-day
revocation period has expired.
2. Xxxxxxxx has resigned the position of Vice-President, North
American Sales of Bandag effective January 20, 1997, but has continued as
an employee of Bandag at an annual salary of $255,665 and shall continue
as an employee as herein provided until he accepts other employment.
Notwithstanding Xxxxxxxx'x employment by another employer, he shall still
continue to receive the severance payments provided for under paragraph 3
of this agreement.
3. Bandag agrees to pay Xxxxxxxx payments in the aggregate
amount of $766,995 during the period from June 1, 1997, through May 30,
2002, subject to withholding of applicable federal and state taxes and
subject to Xxxxxxxx'x performance of his obligations under this agreement.
The payments provided for in this paragraph shall be made notwithstanding
Xxxxxxxx'x acceptance of other employment not in violation of paragraph 11
herein. In addition to the above payments, Bandag shall within two weeks
of the last payment being made to Xxxxxxxx under this agreement, remit to
Xxxxxxxx or to his Individual Retirement Account ("XXX") a lump sum
representing the then present value of all Pension Plan and 401-K Benefits
that would have accrued with respect to the above payments in the event
Xxxxxxxx had not accepted other employment and had remained employed by
Bandag until May 30, 2002. Present value as used in this paragraph shall
be determined by using the short term (monthly) Applicable Federal Rates
as published by the Internal Revenue Service for the month preceding the
month of payment.
4. Bandag shall retain an outplacement agency (selected by
Xxxxxxxx) and pay the reasonable cost thereof through April 30, 1998.
5. Bandag shall reimburse Xxxxxxxx for moving household goods
from Muscatine, Iowa, to a new residence selected by Xxxxxxxx upon
termination of his employment with Bandag. Such reimbursement payments
shall be on a "grossed up" full tax effect basis.
6. Xxxxxxxx and his eligible dependents shall continue to
receive full benefits under the group insurance plans of Bandag until his
commencement of employment and qualification for immediate coverage under
the plans of another employer, provided that the insurance coverage under
the new employer's plan shall be equal to or exceed the insurance coverage
under the Bandag plan. In the event that the insurance coverage provided
by Xxxxxxxx'x new employer is less than the coverage under the Bandag
plan, then he may elect for himself and his dependents to continue to be
covered under the Bandag plan via COBRA (premiums paid by Bandag) until
May 30, 2002, and after that date Xxxxxxxx may continue medical and dental
coverage under COBRA with Bandag paying on behalf of Xxxxxxxx any COBRA
payments that may be due.
7. Subject to the performance by Bandag of its obligations
under this agreement, Xxxxxxxx agrees as to Bandag and all corporations,
divisions, subsidiaries, parent organizations, directors, officers,
shareholders, employees, agents, consultants, predecessors, successors,
assigns, heirs, or other entities or persons that are now, have been, or
may in the future be directly or indirectly related to or affiliated with
Bandag in any way (the "Releasees") that he unconditionally releases,
discharges, waives, and promises not to xxx with respect to all claims,
demands, actions, causes of action, rights, obligations, liabilities,
damages or losses of any kind, known or unknown, fixed or contingent
("claims"), that he may have or subsequently claim to have against the
Releasees or any one of them relating to his employment with Bandag or his
separation from that employment, which released Claims include but are not
limited to all Claims arising under any constitution, law, statute,
ordinance, regulation, rule, guideline, or common-law theory and
specifically all Claims arising under all employment, discrimination, or
wrongful discharge laws, regulations, or common-law theories, including
but not limited to the Age Discrimination in Employment Act of 1967, the
Iowa Statutes, the Employment Retirement Income Security Act of 1974, the
Civil Rights Act of 1866, the Civil Rights Act of 1964, the Civil Rights
Act of 1991, and the Americans with Disabilities Act of 1990 (all as
amended from time to time). He agrees that he cannot and will not bring
any lawsuit or charges on his behalf, whether civil, criminal, or
administrative, against the Releasees or any one of them with respect to
such released Claims, and that he unconditionally releases, discharges,
waives, and gives up his right to accept any relief obtained by any other
party on his behalf with respect to such released Claims.
8. Bandag and Xxxxxxxx agrees to keep substantive matters
concerning this Agreement, including the circumstances surrounding the
Agreement and the contents of this Agreement confidential. Bandag
understands that Xxxxxxxx may disclose the terms of this Agreement with
his wife, attorney, financial advisor or accountant of choice, but shall
specifically instruct these individuals that this information is
confidential and that they shall not relay this information to any other
individuals.
9. Bandag shall indemnify and hold Xxxxxxxx harmless from and
against all liability, recoveries of judgment, claims and demands asserted
against him arising out of his acts as an officer and employee of Bandag
during the period of his employment and shall furnish him at Bandag's
expense with legal counsel and expense reimbursement in connection with
any such claims against him. Bandag acknowledges that Xxxxxxxx has
cooperated to the fullest extent possible in the preparation and
presentation by Bandag of its prosecution and defense of claims presently
pending. Xxxxxxxx agrees that in the event Bandag becomes involved in any
other legal or administrative claims or other proceedings relating to
events that occurred during his employment with Bandag, he will cooperate
to the fullest extent possible, subject however to the work requirements
of his then current employment demands, in the preparation and
presentation by Bandag of its prosecution or defense, including but not
limited to the signing of affidavits or other documents providing
information requested by Bandag.
10. Subject to the performance by Xxxxxxxx of his obligations
under this agreement, Bandag unconditionally releases, discharges, waives,
and promises not to xxx with respect to all claims, demands, actions,
causes of action, rights, obligations, liabilities, damages, or losses of
any kind, known or unknown, fixed or contingent that Bandag may have or
subsequently claim to have against Xxxxxxxx relating to his employment
with Bandag or his separation from that employment.
11. Xxxxxxxx agrees that he shall not, prior to January 22,
1999 (without express written consent of Bandag) engage directly or
indirectly, whether as an employee, consultant or independent contractor,
alone or in conjunction with others in any venture, or in the manufacture,
sale, distribution of any machinery, equipment or product relating
thereto, which is in competition with the process, products or retreading
system, of Bandag. This covenant not to compete shall extend to any
geographical area within North America in which the products of Bandag or
any Bandag affiliate are manufactured or marketed into any customers or
markets of Bandag or any Bandag affiliates which now exist. The parties
agree that the aforementioned covenant not to compete shall be subject to
specific performance in any jurisdiction in North America in which Bandag
conducts business. This covenant not to compete is subject to the
performance by Bandag of its obligations under this agreement.
12. Bandag agrees to furnish Xxxxxxxx with a letter of
reference from Xxxxxx X. Xxxxxx, Chairman, President and CEO ("Xxxxxx") in
the form of the attached letter of recommendation. Bandag represents that
Xxxxxx is prepared and will also issue subsequent letters of
recommendation to specific employers upon request by Xxxxxxxx, which
letters will be highly favorable to Xxxxxxxx.
13. Bandag shall pay the reasonable attorneys' fees incurred by
Xxxxxxxx for counsel and review in connection with this agreement.
14. Any controversy or claim arising out of, or relating to,
this Agreement, or its breach, shall be settled by arbitration in
accordance with the then governing rules of the American Arbitration
Association. Judgment upon the award rendered may be entered and enforced
in any court of competent jurisdiction. The arbitrator(s) shall have the
power and authority to award attorneys fees and costs in the event of a
breach of this agreement to the prevailing party.
15. This agreement constitutes the entire agreement between the
parties and shall be binding upon the successors and assigns of the
parties hereto.
IN WITNESS WHEREOF, the parties have executed this agreement as
of the day and year first above written.
/s/ Xxxxxxx Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
BANDAG, INCORPORATED
By: /s/ Xxxx X. Lodge 5/21/97
MEMORANDUM OF INTERPRETATION
In order to avoid any confusion or future misunderstandings as
to the scope of the non-compete provision in paragraph 11 of this
Agreement between Bandag, Incorporated and Xxxxxxx X. Xxxxxxxx made as of
the 21 day of May, 1997, the parties agree to the following
interpretation:
I. The non-compete provision shall not prevent Xxxxxxxx from
becoming an employee, equity owner, or affiliate of a
Bandag franchise provided such franchisee, its
subsidiaries, affiliates, and/or commonly-owned or
controlled entities are one hundred percent Bandag.
Further, the non-compete provision does not prevent
Xxxxxxxx from becoming a Bandag franchisee alone or in
conjunction with other provided that such other parties are
one hundred percent Bandag.
II. The non-compete provision does prohibit Xxxxxxxx from
engagement with new tire companies, whether as an employee,
consultant, or independent contractor.
Dated this 21 day of May, 1997.
/s/ Xxxxxxx Xxxxxxxx
Xxxxxxx X. Xxxxxxxx
BANDAG, INCORPORATED
By:
/s/ Xxxx X. Lodge
May 29, 1997
Xx. Xxxxxxx X. Xxxxxxxx
000 Xxxxx Xxxxxx
Xxxxxxxxx, XX 00000
Dear Xxxx:
This letter clarifies paragraph 3 of the Agreement between Bandag,
Incorporated and yourself dated the 21 day of May, 1997, concerning the
scheduling of payments in the aggregate of $766,995.00. The
aforementioned aggregate payment shall commence June 1, 1997 and shall be
paid to you in semimonthly installments of $9,833.27; provided, however,
that for a period of thirty (30) days prior to December 31 of each year,
commencing 1997, (until such time as the total amount of the aggregate
payments has been paid to you) you may notify Bandag, Incorporated in
writing of your election to either decrease the payments or accelerate the
receipt of the payments for the following year, including the payment of
the then remaining sum due to you under the Agreement. If your notice to
Bandag, Incorporated states that you wish to accelerate all future
payments, Bandag, Incorporated will accelerate payments for the year
following any such election by you. Any election to accelerate payment to
you shall be irrevocable as to such payment when made, but you shall be
able to exercise such election for payments due on any subsequent year.
All of the above-discussed payments are subject to withholding of
applicable federal and state taxes.
Thank you for your cooperation and best wishes to you in your search for
new endeavors.
Dated this 21 day of May, 1997.
Bandag, Incorporated
By: /s/ Xxxx X. Lodge /s/ Xxxxxxx Xxxxxxxx
Xxxx X. Lodge Xxxxxxx X. Xxxxxxxx
Vice President
Employee Services
