SUPPLEMENTARY EXECUTIVE RETIREMENT PLAN AGREEMENT
This Agreement, between Xxxxxxxx, Inc., a Minnesota corporation
("Xxxxxxxx"), and Xxxxx X. Xxxxxxx (the "Executive") is made and entered into
this 5th day of November, 1996.
WHEREAS, the Executive has, and is expected to provide, valuable services
to Xxxxxxxx as its Chief Executive Officer; and
WHEREAS, Xxxxxxxx desires to provide the Executive with a meaningful
pension benefit upon his termination of employment with Xxxxxxxx, taking into
account the benefits to which the Executive is otherwise due from other sources;
and
WHEREAS, Xxxxxxxx desires to encourage the Executive to continue his
employment with Xxxxxxxx.
THEREFORE, Xxxxxxxx and the Executive hereby agree as follows:
1. PURPOSE. The purpose of this Agreement is to provide an unfunded
deferred compensation benefit for the Executive, who is a member of a select
group of management employees of Xxxxxxxx as that term is used in the Employee
Retirement Income Security Act of 1974, as amended.
2. RETIREMENT PENSION BENEFIT.
(a) If the Executive's employment with Xxxxxxxx is terminated,
whether voluntary or involuntary, (except in the event of Executive's
death), he will be paid an annual retirement pension benefit equal to 50%
of the average of the annual cash compensation (and excluding all non-cash
compensation such as income recognized as a result of the exercise of stock
options or the sale of stock so acquired) paid to Executive by Xxxxxxxx for
the five (5) calendar years preceding the calendar year which includes
Executive's termination date but not less than $137,500, less the Reduction
Amount (defined in Section 3).
(b) If Executive's termination of employment occurs prior to his 65th
birthday, he will be paid an annual pension benefit equal to $137,500, less
the Reduction Amount.
3. The Reduction Amount for purposes of this Agreement shall mean an
amount which for calculation purposes only equals the sum of (a) the aggregate
of twelve (12) monthly payments received by Executive or/and Xxxx Xxxxxxx under
Executive's Dupont Employee Pension Plan or any other deferred compensation plan
attributable to contributions by Dupont or its affiliates ("Dupont Plans") and
(b) an amount which equals the one year value of a joint and
100% survivor annuity on the lives of Executive and Xxxx Xxxxxxx which could
be purchased with Executive's vested benefits attributable to (i) Company
contributions in Company Sponsored Employee Plans and (ii) Executive's
$15,600 automatic deferral (the "Automatic Deferral") to Company Sponsored
Employee Plans as required under his Employment Agreement with Xxxxxxxx dated
March 1, 1988, calculated, in each case, as of the date of Executive's
termination of employment. The following additional rules apply to the
calculation of the Reduction Amount:
(a) The monthly payments under the Dupont Plans shall be $4,583
($55,000 annually) during Executive's life and $1,833 ($22,000 annually)
upon his death.
(b) The annuity valuation shall be based upon Executive's and Xxxx
Xxxxxxx'x ages as of Executive's termination date, provided, however, that
if Xxxx Xxxxxxx is not surviving on such termination date, the annuity
shall be a single life annuity on the life of Executive.
(c) "Company Sponsored Employee Plans" shall include all qualified
and non-qualified employee pension benefit plans, as defined in Section
3(2)(A) of the Employee Retirement Security Act of 1974.
(d) For purposes of Section 3(b)(i), "Company contributions"
shall not include any salary reduction or deferred compensation
amounts elected by Executive or other contributions made by Executive.
Nothing herein shall affect Executive's right to receive any amounts included in
the Reduction Amount nor any elections made with respect to the receipt or
deferral of such amounts.
4. PAYMENT OF RETIREMENT PENSION BENEFITS. Retirement pension benefits
payable to Executive under Section 2(a) or 2(b) above shall continue for
Executive's life and, after his death, if he is survived by his spouse, Xxxx
Xxxxxxx, shall continue to be paid to her for the duration of her life. All
payments under this Agreement shall cease as of the date of the death of the
survivor of Executive and Xxxx Xxxxxxx. The annual pension benefits payable to
Executive in any calendar year pursuant to Section 2(a) or 2(b) above shall be
paid to Executive or to Xxxx Xxxxxxx in twelve (12) equal monthly installments,
commencing the first day of the calendar month following the date of Executive's
termination of employment.
5. FORFEITURE OF BENEFITS. Notwithstanding anything herein to the
contrary, no retirement pension benefits shall be payable to the Executive or
his spouse or beneficiaries under this Agreement if Executive's employment is
terminated for Cause, as defined in that certain employment agreement between
Executive and Xxxxxxxx dated March 1, 1988.
6. ASSIGNMENT OF BENEFITS. Neither the Executive, nor his spouse may
assign or alienate benefits payable under this Agreement, whether voluntary or
involuntary, or directly or
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indirectly, except that the Executive may assign the retirement pension
benefits payable under this Agreement to a trust or similar investment entity
provided such trust or entity was established by the Executive and the sole
beneficiaries thereunder during the Executive's lifetime are limited to the
Executive and/or his immediate family (as defined in Code Section 267).
7. NO GUARANTY OF EMPLOYMENT. The existence of this Agreement does not
constitute a guaranty or contract of employment between the Executive and
Xxxxxxxx and nothing in this Agreement shall modify or amend any employment
agreement between the Executive and Xxxxxxxx or to otherwise restrict or
interfere with the right of Xxxxxxxx to terminate the employment of Executive or
the right of Executive to terminate his employment with Xxxxxxxx in accordance
with the terms of any employment agreement then in existence, or, in the absence
of any such employment agreement, at any time at its or his will.
8. FUNDING OF PAYMENTS. In order to assure the performance by Xxxxxxxx
or its successor of its obligations under this Agreement, Xxxxxxxx may deposit
in trust an amount equal to the maximum payment that will be due Executive under
the terms hereof. Under a written trust instrument, the Trustee shall be
instructed to pay to Executive (or to Xxxx Xxxxxxx, as the case may be) the
amount to which Executive shall be entitled under the terms hereof, and the
balance, if any, of the trust not so paid or reserved for payment shall be
repaid to Xxxxxxxx. If and to the extent there are not amounts in trust
sufficient to pay Executive or Xxxx Xxxxxxx under this Agreement, Xxxxxxxx shall
remain liable for any and all payments due to Executive or to Xxxx Xxxxxxx. In
accordance with the terms of such trust, at all times during the term of this
Agreement Executive and Xxxx Xxxxxxx shall have no rights, other than as
unsecured general creditors of Xxxxxxxx to any amounts held in trust and all
trust assets shall be general assets of Xxxxxxxx and subject to the claims of
creditors of Xxxxxxxx.
9. RESTRICTIONS ON COMPETITION. So long as payments are being made to
Executive under this Agreement, Executive shall not, without the prior written
consent of Xxxxxxxx, accept employment or render service to any person, firm or
corporation directly or indirectly in competition with Xxxxxxxx or affiliate
thereof, in the United States or any of its territories or possessions, or
directly or indirectly enter into or in any manner take part in or lend his
name, counsel or assistance to any venture, enterprise, business or endeavor,
either as proprietor, principal, investor, partner, director, officer, employee,
consultant, advisor, agent, independent contractor, or in any other capacity
whatsoever for any purpose which would be competitive with the business of
Xxxxxxxx or any affiliate thereof, or any of their respective successors,
provided, however, that the foregoing shall not be deemed to prohibit Executive
from acquiring an equity interest not in excess of 5% in any company, the shares
of which are listed on any national stock exchange or are traded and quoted on
the National Association of Securities Dealers Automated Quotations System.
10. TITLE TO CERTAIN TANGIBLE PROPERTY. All tangible materials (whether
original or duplicate) including, but not in any way limited to, equipment
purchase agreements, file or data base materials in whatever form, books,
manuals, sales literature, equipment price lists, training
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materials, customer lists and records, customer files, correspondence,
documents, contracts, orders, messages, memoranda, notes, agreements,
invoices, receipts, lists, software listings or printouts, specifications,
models, computer programs, and records of any kind in the possession or
control of Executive which in any way relate or pertain to Xxxxxxxx'x
business, including the business of the subsidiaries or affiliates of
Xxxxxxxx, whether furnished to Executive by Xxxxxxxx or prepared, compiled or
required by Executive during his employment with Xxxxxxxx, shall be the sole
property of Xxxxxxxx. At any time upon request of Xxxxxxxx, Executive shall
deliver all such materials to Xxxxxxxx.
11. TRADE SECRETS AND CONFIDENTIAL INFORMATION. Executive will not,
without the express written consent of Xxxxxxxx directly or indirectly
communicate or divulge to, or use for his own benefit or the benefit of any
other person, firm, association or corporation, any of Xxxxxxxx'x or its
subsidiaries' or affiliates' trade secrets, proprietary data or other
confidential information including, by way of illustration, the information
described in Section 10, which trade secrets, proprietary data and other
confidential information were communicated to or otherwise learned or acquired
by Executive in the course of his employment with Xxxxxxxx, except that
Executive may disclose such matters to the extent that disclosure is required
(a) in the course of his employment with Xxxxxxxx or (b) by a court or other
governmental agency of competent jurisdiction. As long as such matters remain
trade secrets, proprietary data or other confidential information, Executive
will not use such trade secrets, proprietary data or other confidential
information in any way or in any capacity other than to further Xxxxxxxx'x
interests.
12. THE COMPLETE AGREEMENT. This Agreement represents the complete
Agreement between Xxxxxxxx and Executive concerning the subject matter hereof
and supersedes all prior agreements or understandings, written or oral. No
attempted modification or waiver of any of the provisions hereof shall be
binding on either party unless in writing and signed by both Executive and
Xxxxxxxx.
13. NOTICES. Any notice required or permitted to be given hereunder shall
be in writing and shall be effective three business days after it is properly
sent by registered or certified mail, if to Sheldahl to President, Sheldahl,
Inc., 0000 Xxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxxx 00000, or if to Executive at his
residence address, or to such other address as either party may from time to
time designate by notice.
14. ASSIGNABILITY. This Agreement may not be assigned by either party
without the prior written consent of the other party, except that no consent is
necessary for Xxxxxxxx to assign this Agreement to a corporation succeeding to
substantially all the assets or business of Xxxxxxxx whether by merger,
consolidation, acquisition or otherwise, so long as such successor corporation
expressly assumes all of the obligations of Xxxxxxxx under this Agreement. This
Agreement shall be binding upon Executive, his heirs and permitted assigns and
Xxxxxxxx, its successors and permitted assigns.
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15. APPLICABLE LAW. It is the intention of the parties hereto that all
questions with respect to the construction and performance of this Agreement and
the rights and liabilities of the parties hereto shall be determined in
accordance with the laws of the State of Minnesota.
XXXXXXXX, INC.
By /s/ Xxxxx X. Xxxxxx
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Xxxxx X. Xxxxxx, Chairman of the Board
/s/ Xxxxx X. Xxxxxxx
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Xxxxx X. Xxxxxxx
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