1
Exhibit 10.59
October 14, 1999
Xxxx National Corporation
0000 Xxxxxxxxxxx Xxxxx
Xxxxxxxx Xxxxxxx, XX 00000
Gentlemen:
This letter agreement (the "1999 Letter Agreement") supplements and
amends in part the letter agreement of April 9, 1993 between me and Xxxx
National Corporation (the "Company"), a copy of which is attached ("Salary
Continuation Agreement"). I have discussed with Xxxxxxx Xxxx my desire to step
down as Vice President and Controller of the Company. After discussion, we have
mutually agreed to the following:
1. I agree to remain as an employee of the Company through
January 14, 2000 and will not commence employment with any
future employer until after that date. Between the date hereof
and the close of business on January 14, 2000, I will continue
to serve at the discretion of the Board of Directors of the
Company as the Vice President, Controller and Chief Accounting
Officer of the Company and in such positions with the direct
and indirect subsidiaries of the Company as I have on the date
hereof. I agree to perform the responsibilities of such
positions until such time as the Board of Directors of the
Company or an authorized officer of the Company otherwise
directs, but in no event later than January 14, 2000. My
employment with the Company shall terminate at the close of
business on January 14, 2000 and I hereby resign all positions
with the Company and each of its subsidiaries effective as of
the close of business on January 14, 2000 or such earlier date
as may be requested by the Company notwithstanding that I will
remain an employee of the Company until the close of business
on January 14, 2000.
2. In consideration of my performance of my agreement to remain
an employee of the Company through the close of business on
January 14, 2000 on the terms set forth in Section 1 above,
you have agreed as follows:
a. Paragraph L of the Salary Continuation Agreement is
amended and restated in its entirety to read as
follows:
2
"L. It is further understood and agreed that in the event my
employment with the Company should be terminated (i) by the
Company without cause prior to January 14, 2000 ("cause" for
this purpose means gross neglect of duty, material breach of
this Letter Agreement dated October 13, 1999 or of the Salary
Continuation Agreement dated April 9, 1993, dishonesty,
disloyalty, the inability to discharge my duties due to
alcohol or drug addiction, or other misconduct inimitable to
the best interests of the Company) or (ii) I have remained
employed by the Company pursuant to and subject to the terms
of Section 1 of the Letter Agreement dated October 13, 1999
until the close of business on January 14, 2000, I will
receive, in full and complete settlement of any claims for
compensation which I may have, a continuation of my annual
base salary, in effect at the time of the termination of
employment, for a period of up to twelve (12) months
immediately following such termination, payable in accordance
with the Company's payroll schedule; provided, however, that
in the event I obtain employment during said twelve (12) month
period (and upon obtaining such employment I will promptly
notify the Company of same), the payment of any unpaid balance
hereunder, effective as of the date of such new employment,
shall be:
(x) cancelled if the annual base salary of my new
employment equals or exceeds my annual base salary at
the Company at the time of my termination; or
(y) reduced to the amount by which my annual base salary
at the Company at the time of my termination exceeds
the annual base salary of my new employment prorated
on the basis of the time remaining in said twelve
(12) month period; or
(z) reduced by the amounts of any consulting or
self-employment income earned or paid to me during
such period.
I understand that I will not be entitled to any payments under
this Agreement unless (i) my employment is terminated by the
Company without cause prior to January 14, 2000 or (ii) I
remain employed by the Company pursuant to and subject to the
terms of Section 1 of the Letter Agreement dated October 13,
1999 until the close of business on January 14, 2000.
As used herein, "annual base salary of my new employment"
shall equal the greater of (x) the actual annual base salary
of my new employment or (y) the average annual base salary
payable to persons holding comparable positions as I then do
with my new employer with businesses comparable to my then-new
employer.
It is the intent of this Paragraph L that I will be assured of
the payment of an amount at least equal to my annual base
salary at the time of my termination at the Company for a
period of twelve (12) months following such termination as set
forth in subparagraph (i) and (ii) above as applicable,
whether through payments from the Company, my new employer, or
consulting or self-employment income
2
3
or a combination of payments from the Company and my new
employer and consulting and self-employment income. Promptly
upon obtaining my new employment or consulting or
self-employment, I will notify the Company of that fact and
provide details concerning my new position and compensation or
income. I further agree to use my best efforts to obtain
suitable employment following such termination. I will not be
entitled to any payments under any severance pay policy or
practice of the Company in effect at any time and this
Paragraph L shall be in lieu thereof."
b. The Company agrees to provide me with executive
outplacement services from the vendor of my choice
among the vendors made available by the Company until
I first obtain employment after the term of my
employment ends with the Company at the close of
business on January 14, 2000 but in no event longer
than twelve (12) months following such date.
Preliminary consultations may begin earlier.
c. If I am receiving monies pursuant to Paragraph L of
the Salary Continuation Agreement, the Company agrees
that until April 1, 2000, I may continue to use the
car the Company currently provides to me. I agree I
will pay for the gas and routine maintenance. The
Company will provide insurance as currently provided.
It will be at the Company's discretion whether or not
to make any major expenditures with respect to such
car.
3. In consideration of the Company's agreeing to the provisions
of Section 2 of this Letter Agreement, I hereby agree as
follows:
a. I agree to the provisions of Section 1 of this Letter
Agreement.
b. I will keep confidential the terms of this Letter
Agreement until it is made public by the Company in
its SEC filings.
c. Unless required by law, I will not publicly comment
in a manner adverse to the Company concerning the
status, plans or prospects of the business of the
Company or any matter involving the Company.
d. I will cooperate fully with the Company and the
Company's counsel in connection with any present and
future actual or threatened litigation or
administrative proceeding involving the Company that
relates to events, occurrences or matters related to
the period of my employment with the Company. This
cooperation will include but not be limited to (i)
making myself reasonably available for interviews and
discussions with the Company's counsel as well as for
depositions and trial testimony; (ii) if depositions
or trial testimony are to occur, making myself
reasonably available and cooperating in the
preparation therefore as and to the extent that the
Company or its counsel reasonably requests; and (iii)
refraining from impeding the Company's prosecution or
defense of such litigation or administrative
proceeding. Further, at the request of the Chairman
or
3
4
President of the Company I will make myself
reasonably available for consultation and advice to
employees of the Company and its subsidiaries at
times and for periods that are mutually agreeable; it
is understood that under normal circumstances the
obligation under this sentence will be substantially
performed within the first 18 months after
termination. I understand that I will be reimbursed
by the Company for my reasonable travel, lodging,
long distance telephone and similar expenses,
incurred in connection with such cooperation.
e. At the request of the Company, I will assist in the
preparation of a job description for use in the
Company's search for my successor and in the
transition of my responsibilities to such person.
f. I will not receive any bonus with respect to the 1999
fiscal year of the Company.
g. In recognition of my voluntary resignation of my
employment, all of my stock option grants from the
Company will terminate on the last day of my
employment.
h. My participation in the Executive Medical Expense
Reimbursement Plan (MERP) and long-term disability
plan will cease as to expenses incurred or events
after January 14, 2000 or such earlier date as my
employment should terminate. Any future crediting
under any Supplemental Retirement Plan (SERP) of the
Company will cease on January 14, 2000 or such
earlier date as my employment should terminate. My
participation in health, dental and life insurance
programs, as well as the Company's 401(K) Plan, the
1999 Employee Stock Purchase Plan and the Deferred
Compensation Plan for Executives and Other Senior
Management shall continue through the end of the
period in which I am receiving payments under
Paragraph L of the Salary Continuation Agreement at
the same cost to me as available to other employees
generally. My participation in the Xxxx National
Group Retirement Plan shall be governed by the terms
of such plan.
i. I may use the name of the chief executive officer of
the Company or his delegate as a reference in my
employment search.
4. In entering into this Letter Agreement, I acknowledge the
confidentiality, non-solicitation and non-competition and
other restrictions imposed on me by the remaining provisions
of the Salary Continuation Agreement, and confirm that I
understand that these restrictions and all other provisions of
the Salary Continuation Agreement, except as specifically
amended by this Letter Agreement, remain in full force and
effect, without alteration. I represent that prior to signing
this Letter Agreement, I have read, fully understand and
voluntarily agree to the terms and conditions stated above,
that I was not coerced to sign this Letter Agreement, that I
was not under duress at the time I signed this Letter
Agreement, and that, prior to signing this Letter Agreement, I
had adequate
4
5
time to consider its terms, including the opportunity should I
have chosen to discuss this Letter Agreement and its legal
consequences with an attorney of my choice.
5. This Letter Agreement shall be binding upon and inure to the
benefit of the Company and any successor of or to the Company.
Very truly yours,
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
Agreed to and acknowledged as of the 14th
day of October, 1999 in Xxxxxxxx Heights, Ohio.
XXXX NATIONAL CORPORATION
By: /s/ Xxxxxx X. Xxxx
-----------------------------------------
Xxxxxx X. Xxxx,
Xx. Vice President, General Counsel
5
