RETIREMENT AND RELEASE AGREEMENT
1. Agreement
and Release.
(a) In
consideration of the agreement of Xxxxxxxxx
Xxxxx Incorporated
(the
“Company”)
to
provide to Xxxxxxxx
X. Xxxxxxxx
(“Xxxxxxxx”)
the
consideration, payments and rights set forth in, and subject to the terms and
conditions of, this Retirement and Release Agreement (the “Agreement”),
which
Agreement shall supercede and modify any inconsistent provisions of the Offer
Letter dated November 20, 2002, between the Company and Xxxxxxxx (the
“Offer
Letter”),
Xxxxxxxx hereby unconditionally releases and discharges the Company from any
claims, known or unknown, directly or indirectly related to or in any way
connected with his employment with or status as an officer of the Company or
his
retirement from his employment with the Company, including, without limitation,
the Offer Letter as of the Retirement Date (as hereinafter defined), and any
and
all claims and causes of action of any kind or nature whatsoever, known or
unknown, and whether specifically mentioned or not, which may exist or might
be
claimed to exist at or prior to the date of the retirement from Xxxxxxxx’x
employment (the “Claims”),
as
well as any future injuries, losses or damages not now known or anticipated
but
which may later develop or become discovered (including the effects or
consequences thereof), and which are attributable or connected to the Claims;
provided, that the foregoing shall not be deemed to release any obligations,
liability or responsibility arising from or related to the breach of this
Agreement.
(b) The
parties further agree and acknowledge that the claims or actions released herein
include, but are not limited to, those based on allegations of wrongful
discharge and/or breach of contract (except for the obligations created by
or
arising out of this Agreement), retaliation, any common law claims and those
alleging discrimination on the basis of race, color, sex, religion, national
origin, age, disability, or any other basis under Title VII of the Civil Rights
Act of 1964, as amended, the Age Discrimination in Employment Act of 1967
(“ADEA”), as amended, or any other federal, state, or local law, rule or
regulation. Xxxxxxxx also agrees that his rights under the aforementioned
statutes or any other federal, state or local law, rule or regulation are
effectively waived by this Agreement. The parties understand and acknowledge
that no rights or claims accrued to Xxxxxxxx under the Company’s benefit plans
through the Retirement Date, or rights or claims arising under the ADEA after
the execution of this Agreement, are waived hereby. Xxxxxxxx specifically
relinquishes any and all rights to employment or re-employment with the Company.
(c) Except
for the obligations created by or arising out of this Agreement, the Company,
on
its own behalf and on behalf of its subsidiaries, affiliates, officers,
directors, employees, successors and assigns, and each of them (collectively,
the “CDI Group”),
hereby releases and discharges Xxxxxxxx, as well as his trustees, agents,
attorneys, insurers, representatives, successors and assigns, from and with
respect to any and all claims, demands, rights, liens, agreements, contracts,
covenants, actions, suits, causes of action, obligations, debts, costs,
expenses, attorneys’ fees, damages, judgments, orders and liabilities of
whatever kind or nature in law, equity or otherwise, whether now know or
unknown, suspected or unsuspected, which it may have or hold against Xxxxxxxx,
now or in the future, arising out of or in any way connected with Xxxxxxxx’x
service as an officer, director, employee and/or agent of any member of the
CDI
Group, his separation from his position as an officer, director, employee and/or
agent of any member of the CDI Group, or any other transactions, occurrences,
acts or omissions or any loss, damage or injury whatever, known or unknown,
resulting from any act or omission by or on the part of Xxxxxxxx committed
or
omitted prior to the Retirement Date, provided that all such services, actions
or omissions by Xxxxxxxx were in good faith, and taken or omitted in a manner
which he believed to be in the best interest of the Company and its
shareholders, and not in violation of any federal or state criminal laws, any
provision of the Xxxxxxxx-Xxxxx Act of 2005, or Section 16 of the Securities
Exchange Act of 1934.
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2. Retirement
Pay.
Xxxxxxxx will be permitted to retire from his employment with the Company,
whose
employment with the Company will terminate effective at the close of business
on
January 6, 2006 (the “Retirement
Date”),
subject to the provisions of paragraph 21 herein, and Xxxxxxxx will
receive Retirement Pay (the “Retirement
Pay”)
in the
amount of $275,000.00 payable to Xxxxxxxx in one lump sum on the later of either
January 13, 2006, or on the next business day following the expiration of the
seven (7) day revocation period set forth below in paragraph 21 (the “Payment
Date”). Effective with the execution of this Agreement and continuing through
January 6, 2006, Xxxxxxxx
is relieved of all duties and responsibilities on behalf of the Company, and
Xxxxxxxx is not authorized to act by or on behalf of the Company in any manner
whatsoever, it being understood that his employment is being continued through
January 6,2006, for the sole purpose of allowing him to receive certain benefits
set forth in this paragraph 2, effective with the execution of this Retirement
and Release Agreement. The Retirement Pay shall be deemed the pay due to
Xxxxxxxx under Section 11 of the Offer Letter. The Company will withhold
applicable federal, state and local income and/or occupational taxes as well
as
FICA taxes and other legally required deductions from the Retirement Pay, and
the parties agree that the payment described herein shall be made by sending
such payment to Xxxxxxxx’x home address at 000 Xxxxxxx Xxxxxx, Xxxxxxxxxx,
Xxxxxxxx, 00000. In addition, not as part of the Retirement Pay but as pay
and/or reimbursements to which Xxxxxxxx is entitled, Xxxxxxxx shall receive
(a)
his regular paychecks through the last regular pay period in 2005, plus
additional paychecks (i) covering the period through January 6, 2006, and (ii)
including payment for accrued but unused PTO days (20), and (b) on the Payment
Date, reimbursement for all unreimbursed normal and customary expenses incurred
by Xxxxxxxx on and prior to the Retirement Date in furtherance of the Company’s
business and in accordance with past custom and practice.
3. Incentive
Compensation Plan Payment.
The
parties acknowledge and agree that notwithstanding this Agreement and the
termination of Xxxxxxxx’x employment as of the Retirement Date, Xxxxxxxx is and
shall remain eligible to participate in the Company’s Incentive Compensation
Plan (the “IC
Plan”)
for
the entire calendar year of 2005, and the Company agrees that the IC Plan shall
not be modified in any manner so as to reduce or otherwise prejudice the
participation of Xxxxxxxx therein through the Retirement Date. On or before
March 15, 2006, and not as part of the Retirement Pay, Xxxxxxxx will receive
payment of $50,882.00 with respect to the operation and results of the Company
for 2005 under the IC Plan (the “IC
Plan Payment”),
in
accordance with the performance goals established for Xxxxxxxx for 2005 under
the IC Plan The Company will withhold applicable federal, state and local income
and/or occupational taxes as well as Medicare taxes and other legally required
deductions from the IC Plan Payment.
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4. Stock
Options.
Subject
to the provisions of paragraph 21 herein, Xxxxxxxx will receive $36,600.00
in
consideration for his unvested stock options. The Company will withhold
applicable taxes and other legally required deductions from the Stock Option
Payment.
5. Restricted
Stock.
Restrictions on the Restricted Stock awarded to Xx. Xxxxxxxx will lapse on
the
later of the date of his retirement or six (6) months after the date of the
signed Restricted Stock Award Agreements.
6. Director
Compensation
Directors fees for 2005 services rendered to Printing Specialties will be
forwarded to Xxxxxxxx upon receipt of such at Arlington Park.
7. Automobile
Allowance.
Subject
to the provisions of paragraph 21 herein, Xxxxxxxx will receive $11,500.00
in
lieu of his Company Automobile Allowance. The Company will withhold applicable
federal, state and local income and/or occupational taxes as well as Medicare
taxes and other legally required deductions from the Automobile
Allowance.
8. Health
Insurance COBRA Payments.
Subject
to the provisions of paragraph 21 herein and subject to the approval of the
health care provider of the Company, the Company will maintain Xxxxxxxx under
its health insurance plan as Xxxxxxxx currently is enrolled, and pay the full
amount of all insurance premiums for Xxxxxxxx through June 30, 2006. Thereafter,
the Company will pay the full amount of all insurance premiums for Xxxxxxxx
to
continue family health coverage commensurate with the coverage currently
maintained for Xxxxxxxx from July 1, 2006 through December 31, 2007, under
COBRA
at the Company’s cost; provided, however, the Company shall cease making such
payments and shall have no further obligation to make such payments in the
event
and at the time Xxxxxxxx becomes eligible for similar family health coverage,
with similar benefits and co-payments as under the Company’s health insurance
plan, with another employer on or prior to December 31, 2007. In the event
that
the Company’s health care provider will not permit Xxxxxxxx to be maintained
under the Company health insurance plan through June 30, 2006, then the Company
will pay the full amount of all health insurance premiums for Xxxxxxxx to
maintain family coverage under COBRA for a period of eighteen (18) months
beginning on February 1, 2006, subject to the other terms and conditions set
forth above.
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9. Return
of Company Property.
Xxxxxxxx agrees that no later than the last day of his employment with the
Company, he shall return to the Company all Company property in his possession
or control, if any, including, but not limited to, all keys, documents, books
and other records and materials of the Company.
10. Outplacement
Services.
Subject
to the provisions of paragraph 21 herein,
in
lieu of
outplacement services, Xxxxxxxx will receive $5,000.00. The Company will
withhold applicable federal, state and local income and/or occupational taxes
as
well as Medicare taxes and other legally required deductions from the
Outplacement Services Payment.
11. Non-Competition.
Xxxxxxxx agrees that, for so long as the Company is not in default under this
Agreement, Xxxxxxxx will not, for a period of one (1) year from the Retirement
Date, directly or indirectly, without the prior written consent of the CEO
of
the Company, and with or without pay, provide consultative services to, accept
employment with, serve as a director or equivalent position of, or otherwise
render any professional or other services to, or participate as a partner,
venturer, shareholder, member or manager, or otherwise be connected with, Magna
Entertainment Corporation, its subsidiaries and affiliates. The Company shall
be
entitled to injunctive relief to enjoin Xxxxxxxx from any violation of this
Section 10 in addition to all other rights it may have at law or in
equity.
12. Deferred
Compensation Plan.
The
Company acknowledges and agrees that Xxxxxxxx shall be entitled to participate
in the Company’s Deferred Compensation Plan, as amended and restated (the
“DC
Plan”),
through the Retirement Date, and that the Company will make all normal Company
Contributions under such DC Plan based upon Xxxxxxxx’x participation therein for
2005 and 2006 as contemplated by the DC Plan.
13. 401(k)
Plan.
The
Company acknowledges and agrees that Xxxxxxxx shall be entitled to participate
in the Company’s Section 401(k) Profit Sharing Plan, as amended and restated
(the “401(k)
Plan”),
through the Retirement Date, and that the Company will make all normal Company
contributions under the 401(k) Plan based upon Xxxxxxxx’x participation therein
for 2005 and 2006 as
contemplated by the 401(k) Plan
14. Press
Release; Confidential Agreement.
The
parties agree that the terms of this Agreement and all discussions of this
Agreement shall be maintained confidential, except (i) for disclosure to their
respective attorneys, accountants and advisors, (ii) to the extent disclosure
is
required by applicable governmental law, rule and regulation or rules of the
NASDAQ Stock Market, and (iii) for the mutually acceptable Press Release to
be
released to the media at such time as mutually agreed between the Company and
Xxxxxxxx on the date this Agreement has been mutually executed by the parties,
and which Press Release may be included by the Company in any applicable Form
8-K and similar securities filings. The parties agree that they, their attorneys
and/or representatives shall not in any way divulge or cause to be divulged
any
terms, information or details of this Agreement or the discussion that preceded
it, except as provided above.
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15. Company
Affiliates.
The
parties understand that, as used in this Agreement, "Company" includes Xxxxxxxxx
Xxxxx Incorporated and its affiliates, and all of their past and present
officers, directors, employees, trustees, agents, attorneys, parents, partners,
members, affiliates, principals, insurers, the Company's subsidiaries,
predecessors, successors, and assigns, and all other entities, persons, firms
or
corporations liable or who might be claimed to be liable, none of whom admit
any
liability to Xxxxxxxx, but all of whom expressly deny any such liability.
Notwithstanding the foregoing and the releases otherwise set out in this
Agreement, the parties understand and acknowledge that no rights or claims
accrued to Xxxxxxxx under the Company’s benefit plans through the Retirement
Date are waived or released by Xxxxxxxx.
16.
Severability;
Governing Law; Headings.
Xxxxxxxx further understands, and it is his intent, that in the event this
Agreement is ever held to be invalid or unenforceable (in whole or in part)
as
to any particular type of claim or charge or as to any particular circumstances,
it shall remain fully valid and enforceable as to all other claims, charges
and
circumstances. The parties further agree that this Agreement is to be construed
under the laws of the Commonwealth of Kentucky, and that the section headings
used in this Agreement are for convenience only and shall not affect in any
way
the meaning or interpretation of this Agreement.
17. Confidential
Information.
Xxxxxxxx further acknowledges that in the course of his employment with the
Company, he acquired knowledge of a confidential nature regarding the Company,
and he agrees that if this knowledge is divulged, privately or in public,
irreparable harm may be caused to the Company. This confidential information
may
include, but is not limited to, information regarding the Company's business
practices, trade secrets, plans, customer lists, contracts, financial and market
data, marketing reports, business opportunities and other information of a
confidential nature. In consideration of the Retirement Pay received by
Xxxxxxxx, he agrees and covenants that he shall not divulge, publicly or
privately, any specified or other such confidential information regarding any
aspect of the Company's business acquired during or as a result of his
employment with the Company until such information is known to the general
public or disclosed in public filings. Furthermore, to the extent that
disclosure of any such information is controlled by statute, regulation or
other
law, Xxxxxxxx agrees that he is bound by such laws and that this Agreement
does
not operate as a waiver of any such non-disclosure requirement. In the event
of
any breach of this Agreement and covenant, the Company shall be entitled to
injunctive relief, in addition to all other rights it may have at law or in
equity.
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18. Non-Disparagement.
(a) Xxxxxxxx
agrees that, for so long as the Company is not in default under the terms of
this Agreement, he shall not directly or indirectly make or ratify any public
statement, oral or written, to any person that disparages the Company, its
subsidiaries or affiliates, or its directors, officers and
employees.
(b) The
Company agrees that, for so long as Xxxxxxxx is not in default under the terms
of this Agreement, it shall not, and shall cause its subsidiaries, affiliates,
and officers not to, directly or indirectly, make or ratify any public
statement, oral or written, to any person that disparages, either professionally
or personally, Xxxxxxxx.
19. Indemnification.
The
Company will, to the maximum extent permitted by applicable law, indemnify
Xxxxxxxx and hold him harmless from and against any and all claims, liabilities,
judgments, fines, penalties, costs and expenses (including, without limitation,
reasonable attorney’s fees, costs of investigation and experts, settlements and
other amounts actually incurred by Xxxxxxxx in connection with the defense
of
any action, suit or proceeding, and in connection with any appeal thereon)
incurred by Xxxxxxxx in any and all future, threatened, pending or completed
actions, suits or proceedings, whether civil, criminal, administrative or
investigative (including, without limitation, actions, suits or proceedings
brought by or in the name of the Company), arising, directly or indirectly,
by
reason of Xxxxxxxx’x status, actions or inaction as an officer, director,
employee or agent of the Company or any of its subsidiaries or affiliates,
so
long as he acted in good faith, in a manner he believed to be in the best
interest of the Company and its shareholders, and not in violation of any
federal or state criminal laws, any provision of the Xxxxxxxx-Xxxxx Act of
2005,
or Section 16 of the Securities Exchange Act of 1934. The Company shall promptly
advance to Xxxxxxxx upon request any and all expenses incurred by Xxxxxxxx
in
defending any and all such actions, suits or proceedings to the maximum extent
permitted by applicable law.
20. Acknowledgement
of Understanding.
Xxxxxxxx acknowledges that he has read this Agreement, fully understands each
and every provision, and signs it voluntarily and knowingly. Xxxxxxxx also
acknowledges that in consideration of accepting the payment described above,
he
may be giving up possible future administrative and/or legal or other claims.
Xxxxxxxx also acknowledges that he has been advised by the Company to consult
an
attorney prior to executing this Agreement. Furthermore, the parties hereby
acknowledge and agree that Xxxxxxxx has twenty-one (21) days from his receipt
of
this Agreement in which to consider it and that this Agreement may be revoked
by
Xxxxxxxx within seven (7) calendar days after he executes it. Any such
revocation shall be in writing and shall be delivered to the Company within
this
seven (7) calendar day period. Any revocation received by the Company thereafter
shall be null and void and of no force and effect. The parties also acknowledge
and agree that this Agreement shall not be effective or enforceable until the
seven (7) day revocation period expires.
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21. Xxxxxxxx
agrees that between January 6 and January 13, 2006, he will execute an
additional release covering the period from the effective date of the Agreement
through January 6, 2006. Xxxxxxxx agrees that all Company covenants which relate
to obligations of the Company beyond January 6, 2006, will be contingent upon
the execution of the additional release. Xxxxxxxx further agrees that should
he
fail or refuse to execute an additional release, his employment will be deemed
to have terminated effective December 21, 2005, and Xxxxxxxx will forfeit the
remaining consideration provided for in paragraphs 4, 7, 8 and 10, but said
forfeiture will not affect the sufficiency of the consideration provided for
herein or the enforceability of this Agreement.
[Signatures
appear on next page]
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WITNESS
the
signatures of the parties hereto:
XXXXXXXX:
_/s/
Xxxxxxxx X. Goodrich_______________
Xxxxxxxx
X. Xxxxxxxx
Date:_______________________________
COMPANY:
XXXXXXXXX
XXXXX INCORPORATED
By:_/s/
Xxxxxx X. Skehan_______________
Xxxxxx
X. Xxxxxx
Executive
Vice-President and
Chief
Operating Officer
Date:________________________________
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