EXHIBIT 10.2
STATE OF NORTH CAROLINA
AGREEMENT
COUNTY OF MECKLENBURG
THIS AGREEMENT (this "Agreement") is entered into as of February 28,
2003 by and between XXXXX, INC., a North Carolina corporation (the "Company"),
and XXXXXXX X. XXXXXX ("Xxxxxx").
STATEMENT OF PURPOSE
Xxxxxx has been employed by the Company since June 28, 1996. On
November 10, 1997, the Company and Xxxxxx entered into an Executive Severance
Agreement (the "Severance Agreement"), whereby the Company provided Xxxxxx with
certain benefits. Xxxxxx currently holds the title of Vice President.
The Company has decided to permanently eliminate the job Xxxxxx is
performing for the Company. The Company and Xxxxxx have entered into
negotiations with a view toward resolving all issues relating to Xxxxxx'x
employment with the Company and the termination of that employment.
As a result of these negotiations, Xxxxxx and the Company have agreed
that Xxxxxx and the Company will terminate their relationship on the terms and
conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the Statement of Purpose and the
terms and provisions of this Agreement, the parties hereto mutually agree as
follows:
1. DEFINITIONS. Capitalized terms used in this Agreement that are not
expressly defined herein but are defined in the Severance Agreement have the
respective meanings given those terms in the Severance Agreement. In addition,
as used herein, the following terms shall have the following meanings:
(a) "Affiliate" with reference to the Company means any
Person that directly or indirectly is controlled by,
or is under common control with, the Company,
including each subsidiary of the Company. For
purposes of this definition the term "control" means
the possession, directly or indirectly, of the power
to direct or cause the direction of the management
and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.
(b) "Person" means any individual, corporation,
association, partnership, business trust, joint stock
company, limited liability company, foundation,
trust, estate or other entity or organization of
whatever nature.
(c) "Effective Date" with reference to this Agreement
means the eighth (8th) day following the execution of
this Agreement, if not a Saturday, Sunday
or legal holiday, and if such day is a Saturday,
Sunday or legal holiday, then the first business day
following such eighth (8th) day.
2. TERMINATION OF EMPLOYMENT; RESIGNATION FROM OFFICES. As the result
of the permanent elimination of his job, the Company does hereby terminate
Xxxxxx'x employment, with said termination to be effective as of March 28, 2003
(the "Termination Date"). Xxxxxx will remain on the payroll through March 28,
2003 and will be considered during the period March 1, 2003 to March 28, 2003 as
being on vacation, and in such connection will have no duties or
responsibilities except to consult from time to time with Company officials
regarding the transfer of his responsibilities to others. As requested by the
Company, Xxxxxx hereby resigns from all offices, directorships, committees and
positions he holds with the Company and its Affiliates, including but not
limited to, Vice President of the Company and President of Xxxxx Company, with
said resignation to be effective as of February 28, 2003. If requested by the
Company, Xxxxxx will execute any additional resignation letters, forms or other
documents that acknowledge his resignation from such employment, positions,
committees and offices.
3. PAYMENTS BY THE COMPANY. The Company agrees to pay or provide Xxxxxx
with the following:
(a) Compensation and benefits to which Xxxxxx is
otherwise entitled as an employee of the Company at
Xxxxxx'x current rate and status through March 28,
2003, in accordance with the Company's generally
applicable policies and procedures (payment for the
period March 1, 2003 through March 28, 2003 shall be
treated as vacation pay and shall exhaust Xxxxxx'x
accrued vacation entitlement);
(b) Compensation and benefits to which Xxxxxx is
otherwise entitled under the Severance Agreement in
accordance with the terms of the Severance Agreement.
For purposes hereof, the Company acknowledges and
agrees that Xxxxxx shall be considered to have been
involuntarily terminated Without Cause, and shall be
due all payments and benefits set forth in paragraph
4 of the Severance Agreement. The parties agree that
Xxxxxx is entitled to be paid $388,888 under
Paragraph 4(a) of the Severance Agreement, that the
payments described in Paragraph 3(a) hereof satisfy
the obligations described in Paragraph 4(b) of the
Severance Agreement and that Xxxxxx is entitled to
receive under Paragraph 4(c) of the Severance
Agreement the greater of (i) $35,802 or (ii) the
actual bonus earned through the Termination Date.
While it is not obligated to make any payment under
Paragraph 4(c) of the Severance Agreement at this
time, the Company agrees to pay Xxxxxx $35,802 within
thirty (30) days after the Effective Date. If a
larger amount is determined to be due under Paragraph
4(c) of the Severance Agreement, the Company will pay
the difference between the amount paid and the amount
due at the same time as payments are made to the
Company's other employees under the Company's Annual
Corporate Performance Incentive Plan for Officers.
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(c) Possession of the Company automobile used by Xxxxxx
in connection with his employment together with
conveyance of title to said automobile promptly
following the Effective Date of this Agreement;
(d) Health benefits for Xxxxxx under the Company's group
medical plan until the earlier of (a) the date Xxxxxx
becomes eligible for coverage under another
employer's plan, (b) his death or (c) March 28, 2004.
During this period, Xxxxxx will be required to pay
those amounts the Company's employees are customarily
required to pay from time to time for such coverage
and will be entitled to obtain at his expense
optional family/dependent medical coverage under the
Company's group medical plan. After March 28, 2004,
Xxxxxx may continue his coverage to the extent (if
any) and in the manner provided by the "COBRA"
provisions of federal law.
(e) Xxxxxx has participated in various Company sponsored
benefit plans including the Profit-Sharing
Retirement, 401-(k), Employee Stock Purchase and
Incentive Equity plans. Xxxxxx'x vested interest in
these plans shall be paid when and as provided in,
and otherwise subject to, the terms, provisions and
conditions of said plans, and nothing in this
Agreement shall modify or override the terms,
provisions or conditions of those plans.
(f) The Company will provide Xxxxxx, at no expense to
him, outplacement services through Manchester
Services or another provider selected by the Company
for a period of up to six months (or longer in the
Company's sole discretion) at a cost not to exceed
$12,500.
(g) In consideration for the non-competition covenant in
Section 7 hereof, Xxxxx agrees to pay Xxxxxx the sum
of $40,000. No withholdings for income or employment
taxes shall be made from the amount paid pursuant to
this Section 3(g).
4. TERMINATION OF THE COMPENSATION AND BENEFITS ASSURANCE AGREEMENT AND
ALL OTHER BENEFITS NOT SPECIFIED IN THIS AGREEMENT. On November 10, 1997, Xxxxxx
and the Company entered into a Compensation and Benefits Assurance Agreement
that was intended to provide Xxxxxx with certain compensation and benefits in
the event of the termination of his employment under certain specified
circumstances in connection with a Change in Control, as defined in the
Compensation and Benefits Assurance Agreement. It is agreed that this Agreement
is not being entered into in connection with a Change in Control, that Xxxxxx is
not entitled to receive any compensation or benefits under the Compensation and
Benefits Assurance Agreement, that the Compensation and Benefits Assurance
Agreement is hereby terminated and that neither party has any further rights and
obligations thereunder. The Company and Xxxxxx acknowledge and agree that all
other benefits and perquisites related to or resulting from Xxxxxx'x employment
and positions with the Company and its Affiliates, which are not described and
provided for in this Agreement, terminate on the Effective Date, and that the
Company has no further obligations with respect thereto.
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5. CONFIDENTIAL INFORMATION AND COMPANY PROPERTY. Xxxxxx acknowledges
that by reason of Xxxxxx'x employment by the Company, Xxxxxx has had access to
certain Company "Trade Secrets" (as defined in the North Carolina Trade Secrets
Protection Act, N.C.G.S. ss.66-152) and confidential product formulations
(collectively "Confidential Information"). Xxxxxx agrees that he shall not
directly or indirectly use, reveal, disclose or remove from the Company's
premises Confidential Information or material containing Confidential
Information, without the prior written consent of the Company. In addition,
Xxxxxx agrees that he will turn over and return to the Company no later than
March 28, 2003 all property whatsoever of the Company now in his possession
(including keys and credit cards).
6. EMPLOYMENT TAXES AND WITHHOLDINGS. Xxxxxx acknowledges and agrees
that the Company shall withhold from the payments and benefits described in this
Agreement all taxes, including income and employment taxes, required to be so
deducted or withheld under applicable law.
7. NON-COMPETITION. Xxxxxx agrees that in consideration of the payments
and benefits described in Paragraphs 3(c), (d), (f) and (g) and the accelerated
payment of amounts under Paragraph 4(c) of the Severance Agreement, he will not
during the period March 28, 2003 through July 31, 2003, become employed by,
perform services for or consult with the following corporations, their
subsidiaries or affiliates which are involved in the manufacture of sandwich
crackers or snack foods, or their successors or assigns: Bake-Line Products,
Inc.; Ralcorp Holdings, Inc. and Tom's Foods Inc.
8. RELEASE OF THE COMPANY. Xxxxxx, on behalf of himself and his heirs,
personal representatives, successors and assigns, hereby releases and forever
discharges the Company and its Affiliates, and each and every one of their
respective present and former shareholders, directors, officers, employees and
agents, and each of their respective successors and assigns, from and against
any and all claims, demands, actions, causes of action, damages, costs and
expenses, including without limitation all "Employment-Related Claims," which
Xxxxxx now has or may have by reason of any thing occurring, done or omitted to
be done to the date of this Agreement; provided, however, this release shall not
apply to any claims that Xxxxxx may have for the payments or benefits expressly
provided for Xxxxxx or otherwise specifically referred to in this Agreement. For
purposes of this Agreement, "Employment-Related Claims" means all rights and
claims Xxxxxx has or may have:
(i) related to his employment by or status as an employee
of the Company or any of its Affiliates or the
termination of that employment or status or to any
employment practices and policies of the Company, or
its Affiliates; or
(ii) under the federal Age Discrimination in Employment
Act of 1967, as amended ("ADEA").
9. SPECIAL ADEA WAIVER ACKNOWLEDGEMENTS. XXXXXX ACKNOWLEDGES AND AGREES
THAT HE HAS READ THIS AGREEMENT IN ITS ENTIRETY AND THAT THIS AGREEMENT CONTAINS
A GENERAL RELEASE OF ALL KNOWN AND
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UNKNOWN CLAIMS, INCLUDING RIGHTS AND CLAIMS ARISING UNDER THE FEDERAL AGE
DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED ("ADEA"). XXXXXX FURTHER
ACKNOWLEDGES AND AGREES THAT:
(a) THIS AGREEMENT DOES NOT RELEASE, WAIVE OR DISCHARGE
ANY RIGHTS OR CLAIMS THAT MAY ARISE AFTER THE DATE OF
THIS AGREEMENT;
(b) HE IS ENTERING INTO THIS AGREEMENT AND RELEASING,
WAIVING AND DISCHARGING RIGHTS OR CLAIMS ONLY IN
EXCHANGE FOR CONSIDERATION THAT HE IS NOT ALREADY
ENTITLED TO RECEIVE;
(c) HE HAS BEEN ADVISED, AND IS BEING ADVISED IN THIS
AGREEMENT, TO CONSULT WITH AN ATTORNEY BEFORE
EXECUTING THIS AGREEMENT;
(d) HE HAS BEEN ADVISED, AND IS BEING ADVISED IN THIS
AGREEMENT, THAT HE HAS UP TO TWENTY-ONE DAYS (21)
DAYS WITHIN WHICH TO CONSIDER THIS AGREEMENT AND THAT
IF HE EXECUTES THIS AGREEMENT PRIOR TO THE EXPIRATION
OF THE TWENTY-ONE (21) DAY PERIOD, THEN HE EXPRESSLY
WAIVES HIS RIGHTS WITH RESPECT TO THE REMAINING TIME,
AND THAT THE AGREEMENT WILL BECOME EFFECTIVE THE
EIGHTH DAY AFTER HE SIGNS IT AS REFERENCED IN
PARAGRAPH 9 (e) BELOW; AND
(e) HE IS AWARE THAT HE MAY REVOKE THIS AGREEMENT AT ANY
TIME WITHIN SEVEN (7) DAYS AFTER THE DAY HE SIGNS
THIS AGREEMENT AND THAT THIS AGREEMENT WILL NOT
BECOME EFFECTIVE OR ENFORCEABLE UNTIL THE EIGHTH DAY
AFTER THE DATE THIS AGREEMENT IS SIGNED, ON WHICH
DAY, THE EFFECTIVE DATE, THIS AGREEMENT WILL
AUTOMATICALLY BECOME EFFECTIVE UNLESS PREVIOUSLY
REVOKED WITHIN THAT SEVEN-DAY PERIOD. HE IS ALSO
AWARE THAT TO AFFECT A REVOCATION, HE MAY, WITHIN THE
SEVEN-DAY PERIOD DELIVER (OR CAUSE TO BE DELIVERED)
TO THE PRINCIPAL OFFICE OF THE COMPANY NOTICE OF HIS
REVOCATION OF THIS AGREEMENT NO LATER THAN 5:00 P.M.
EASTERN TIME ON THE SEVENTH (7TH) DAY FOLLOWING HIS
EXECUTION OF THIS AGREEMENT.
10. EXTENSION OF STOCK OPTIONS. Notwithstanding any provisions to the
contrary in any Nonqualified Stock Option Agreement between the Company and
Xxxxxx, Xxxxxx shall be permitted to exercise, at any time between April 30,
2003 and the close of business on May 28, 2003, any exercisable stock option
which becomes exercisable prior to March 29, 2003.
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11. CONFIDENTIALITY OF THIS AGREEMENT; EMPLOYMENT REFERENCE. Xxxxxx
shall not at any time, directly or indirectly, discuss with or disclose to
anyone (other than to members of his immediate family, his attorney, his tax
advisors and the appropriate taxing authorities or as otherwise required by law,
hereinafter "Qualified Persons") the terms of this Agreement, including the
amounts payable hereunder. Xxxxxx further agrees that he shall not discuss with
anyone other than Qualified Persons the circumstances surrounding the
termination of his employment. If any person asks Xxxxxx about the above
matters, he will simply say that he resigned from the Company and all issues
relating to his employment have been resolved. Xxxxxx further agrees that for a
period of five years from the Effective Date, he will refrain from making
derogatory comments about the Company or its agents or affiliates to the
Company's customers, suppliers or employees. The Company agrees that for a
period of five years from the Effective Date, the Company and its officers will
likewise refrain from making derogatory comments about Xxxxxx to the Company's
customers, suppliers or employees. The Company further agrees that if any person
makes inquiry concerning Xxxxxx, the Company will advise such person only as to
the dates of Xxxxxx'x employment with the Company, the positions held and that
he voluntarily resigned from the Company.
12. APPLICABLE LAW. This Agreement is made and executed with the
intention that the construction, interpretation and validity hereof shall be
determined in accordance with and governed by the laws of the State of North
Carolina.
13. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Company, its successors and assigns. This Agreement shall be
binding upon and inure to the benefit of Xxxxxx, his heirs, executors and
administrators.
14. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes and
cancels all prior or contemporaneous oral or written agreements and
understandings between them with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by its duly authorized officers and its corporate seal to be hereunto affixed,
and Xxxxxx has hereunto set his hand and seal, all as of the day and year first
above written.
XXXXX, INC.
[CORPORATE SEAL]
ATTEST: By /s/ X. X. Xxxxx
---------------------------------
Vice President
/s/ B. Xxxxx Xxxxxxx
-----------------------------------
Secretary
/s/ Xxxxxxx X. Xxxxxx [SEAL]
---------------------------------
Xxxxxxx X. Xxxxxx
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