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EXHIBIT 10.15
LEAVE OF ABSENCE AGREEMENT
This Agreement (the "Agreement") made and entered into as of October 1,
1998, by the between Xxxxxxx Company, a Delaware corporation ("the Company")
and Xxxxxx X. Xxxxx, an individual ("Employee").
The purpose of this Agreement is to set forth the arrangements with
respect to Employee's resignation as an officer of the Company, and its
subsidiaries, divisions and affiliates, effective October 1, 1998, and related
matters. As of that date, Employee is relieved of all his titles, duties,
responsibilities and authority as an officer and otherwise with respect to the
Company.
Except as otherwise provided in this Agreement, for the period beginning
October 1, 1998, and continuing through September 30, 2002, Employee will be an
employee on a paid leave-of-absence. During Employee's paid leave-of-absence,
Employee will receive the salary continuation payments as described herein, but
Employee shall not hold any title or position with the Company, and Employee
shall have no titles, duties, responsibilities or authority with respect to the
Company, its business and/or operations.
As more fully provided hereinbelow, the salary continuation payments
described herein are in consideration of Employee's release of any and all
cause or causes of action he has, has had or may have against the Company and
also in consideration of Employee's agreement not to compete.
Commencing October 1, 1998 and ending December 31, 1998, Employee will
receive salary continuation payments at Employee's present salary equal to
$39,166.66 per month. Commencing January 1, 1999 and ending September 30, 2002,
Employee shall receive salary continuation payments equal to $18,277.78 per
month. The amounts payable to Employee under this Agreement are in lieu of any
amounts which may be payable to Employee for termination pay. The Company will
pay to Employee that sum which is equivalent to all unused, earned and accrued
vacation of Employee as of October 1, 1998. Employee shall not be entitled to
any future vacation pay accruals from and after the date of this Agreement.
Employee will be eligible to participate in the Second Restated Xxxxxxx
Company Salaried Savings and Investment Plan, subject to the terms and
provisions thereof, including any amendment or alteration thereof after the
date of this Agreement, throughout Employee's paid leave-of-absence. Usual and
customary withholding for personal designated deductions, including
participation in such Savings Plan, will be withheld throughout Employee's paid
leave-of-absence.
Employee's right to exercise nonqualified stock options that Employee
received pursuant to the Company 1982 Stock Option Plan and the 1991 Key
Employee Long-Term
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Incentive Plan will be administered in accordance with and be subject to the
respective provisions of those Plans, and shall continue so long as Employee is
employed by the Company and for such period of time as provided by such Plans
upon Employee's retirement.
The Company will continue Employee's coverage under the existing Company
Executive Survivor Income Plan, based upon Employee's most recent compensation
rate of $745,890.
Employee will be eligible, at the Company's expense, for outplacement
assistance, not to exceed $60,000, by an outplacement agency mutually agreeable
to Employee and Company. Arrangements for these services will be coordinated by
X.X. Xxxxxxxxx of Xxxxxxx Company.
Except as otherwise provided herein, benefits for Employee and his eligible
dependents, as outlined in "A Guide To Your Medical/Mental/Prescription Drug
Benefits" effective 1995, and under the Executive Income Survivor Plan, subject
to the respective terms and provisions thereof, including any amendment or
alteration thereof after the date of this Agreement, will be continued for
Employee as an employee, and, to the extent provided in such plans, upon
Employee's retirement. However, at such time as Employee is eligible for
coverage by the health plan of another employer, such health insurance shall be
deemed the primary health insurance coverage for Employee and his eligible
dependents.
Employee's tax obligations incurred while residing in the United Kingdom
during fiscal year ended April 1999 will be calculated in accordance with the
Company's written tax equalization policy. During the fiscal year ended April
1999, the Company will continue to retain monthly from Employee's salary
continuation payments, while Employee resides in the United Kingdom, an amount
which will represent the estimate of the theoretical tax on such payments.
After 1999 annual tax returns are completed, the hypothetical taxes retained
plus actual and estimated tax payments Employee may have made (without
reimbursement from the Company) will be compared with Price Waterhouse's final
calculation of theoretical taxes including non-company income (e.g. private
investment) and allowable deductions to determine any balance due to or from
Employee as applicable. The incremental tax on any non-company income that
result from expatriation will be paid by the Company only through the fiscal
year ended 1999.
The Company will make Employee's actual United Kingdom tax payments as
they become due with respect to fiscal year ended April 1999. The accounting
firm of Price Waterhouse will assist Employee, at Company's expense, in the
preparation and filing of Employee's foreign and domestic income tax returns
for the fiscal year ended April 1999. To the extent that there are foreign tax
carryovers benefits available to the Company, the Company retains the right to
recover these amounts.
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Except as provided above, usual and customary withholding for tax purposes
will be withheld from all monthly salary continuation payments through
September 30, 2002, and from any other payments made to Employee, to the extent
required by law. All tax liability, with respect to any and all payments
received by Employee under this Agreement (other than employer withholding and
employer payroll taxes), will be Employee's responsibility.
The Company will continue to provide housing, education reimbursement and
automobile benefits until April 30, 1999, as further set forth in Employee's
Letter of Understanding for Great Britain Assignment dated July 8, 1994.
The Company will pay moving expenses in accordance with the Company's
policy for Employee, his family and his household goods and furniture. Expenses
to Employee's point of origin, or alternate of Employee's choice, if lesser
cost to the Company, will be paid, provided Employee returns to that point by
April 30, 1999.
Employee shall and does hereby irrevocably elect to retire upon reaching
age 55 and then be eligible for pension benefits through the International
Retirement Plan, (the "IRP"). Pension benefits for which Employee will be
eligible will be based upon Employee's highest consecutive three-year earnings
during his last ten years of employment with the Company. Years of service for
this program will include the period while Employee is on leave-of-absence. At
the time Employee elects to begin receiving such benefits, he should contact
the Employee Benefits Department of the Company.
In further consideration of the foregoing, Employee agrees that, for the
respective Restricted Periods (as hereinafter defined). Employee shall not (i)
directly or indirectly, accept any employment, consult for or with, or
otherwise provide or perform any services of any nature to, for or on behalf of
any person, firm, partnership, corporation or other business or entity that
manufacturers, produces, distributes, sells or markets any of the Products (as
hereinbelow defined) in the Geographic Area (as hereinafter defined), or (ii)
directly or indirectly, permit any business firm which Employee, individually
or jointly with others, may own, manage, operate or control, to engage in the
manufacture, production, distribution, sale or marketing of any of the Products
in Geographic Area. For purposes of this paragraph, the term "Products" shall
mean ready-to-eat cereal products, toaster pastries, cereal bars, granola bars,
frozen waffles, crispy marshmallow squares, bagels, and any other similar
grain-based convenience food product and the term "Geographic Area" shall mean
any country in the world where the Company (including any subsidiary, division
or affiliate thereof) manufactures, produces, distributes, sells or markets any
of the Products at any time during the applicable Restricted Period (as defined
below). For purposes of this paragraph, the Restricted Period with respect to
the products, shall be four (4) years from the date of this Agreement.
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As a result of this extension of salary and benefits eligibility, the
Company, its subsidiaries, divisions and affiliates (including the directors,
officers and employees of any of them) shall have no further obligations of any
kind or nature to Employee, including, without limitation, obligations for any
termination, severance or vacation pay, except as specifically provided herein
and except as may be provided under the Company benefit plans in accordance
with their terms. Employee agrees not to divulge any confidential or
proprietary information regarding the Company and Employee further agrees to
and shall immediately return to the Company all files, documents,
correspondence, memoranda, customer and client lists, prospect lists,
subscription lists, contracts, pricing policies, operational methods, marketing
plans or strategies, product development techniques or plans, business
acquisition plans, employee records, technical processes, designs and design
projects, inventions, research projects presentations, proposals, quotations,
data, notes, records, photographic slides, chromes, photographs, posters,
manuals, brochures, internal publications, books, films, drawings, videos,
sketches, plans, outlines, computer disks, computer files, work plans,
specifications, credit cards, keys (including elevator, pass, building and door
keys), identification cards, and any other documents, writings and materials
that Employee came to possess or otherwise acquire as a result of and/or in
connection with the Company. Employee agrees to conduct himself in a manner
that reflects positively on the Company. Similarly, the Company agrees to
conduct itself in a manner that reflects positively on Employee. Nothing
contained in this Agreement, nor any actions taken by the Company, its
subsidiaries, divisions and affiliates (including the directors, officers, and
employees of any of them) constitute any admission of fault, liability or
wrongdoing of any kind, and the Company, its subsidiaries, divisions and
affiliates (including the directors, officers and employees of any of them)
each specifically denies any liability to Employee on any theory.
It is understood that the monthly salary continuation payments as provided
in this Agreement shall continue to be made to Employee through September 30,
2002, whether or not Employee secures new employment. For purposes of this
Agreement, Employee will be deemed to have secured new employment upon being
employed by another company and becoming eligible for coverage under the health
plan of that company, whereupon such company's health coverage shall be and be
deemed to be the primary health coverage for Employee and his eligible
dependents. Employee will not be deemed to have secured new employment as a
result of business activities or services rendered by Employee to others on a
part-time basis or otherwise as an independent contractor; provided, however,
that nothing herein shall release Employee or Employee's obligation hereunder
not to render such activities or services in connection with the manufacture,
production, distribution, sale or marketing the Products in the Geographical
Area, as above provided.
Employee hereby acknowledges and agrees that these arrangements set forth
the sole and entire obligations of the Company, its subsidiaries, divisions and
affiliates (including the directors, officers and employees of any of them) to
Employee. Employee's signature in the
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space below shall conclusively evidence his acceptance of the terms set forth
herein. Employee hereby resigns all of his titles, offices and positions with
the Company and its subsidiaries, divisions and affiliates, effective October
1, 1998. Employee's signature also releases, remises and discharges the
Company, its subsidiaries, divisions and affiliates (including the directors,
officers and employees of any of them), fully, absolutely and unconditionally,
of and from any and all claims, demands, actions, cause or causes of action,
known or unknown, which Employee has, has had or may have against any of them
including, but not limited to, the Age Discrimination in Employment Act, from
the beginning of time to the day and date of these presents, except for matters
arising under or contemplated by this Agreement. Execution on behalf of the
Company releases, remises and discharges Employee fully, absolutely and
unconditionally, of and from any and all claims, demands, actions, cause or
causes of action, known or unknown, which the Company, its subsidiaries,
divisions and affiliates has, has had or may have against him, from the
beginning of time to the date and date of these presents, except for matters
arising under or contemplated by this Agreement.
This Agreement shall be construed and interpreted under the laws of the
State of Michigan, including conflict of laws. It is agreed that any
controversy, claim or dispute between the parties, directly or indirectly,
concerning this Agreement or the breach thereof shall only be resolved in the
Circuit Court of Xxxxxxx County, or the United States District Court for the
Western District of Michigan, whichever court has jurisdiction over the subject
matter thereof, and the parties hereby submit to the jurisdiction of said
courts.
Employee acknowledged that he has reviewed this Agreement with his own
independent counsel of his choosing and has been advised by such counsel with
respect thereto.
For purposes of any construction or interpretation of this Agreement, all
terms and provisions thereof shall be deemed to have been mutually drafted by
both of the parties.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement
as of the day and date first above written in Battle Creek, Michigan.
Xxxxxxx Company
By: /s/ Xxxxxxx X. Xxxxx /s/ Xxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx Xxxxxx X. Xxxxx
General Counsel and
Secretary
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