CONSULTING, CONFIDENTIALITY AND NON-COMPETITION
AGREEMENT AND RELEASE
MADE this 24th day of July, 1998 by and between
AMP Incorporated, a Pennsylvania corporation having its
principal office in Harrisburg, Pennsylvania, USA ("AMP",
which term shall be construed herein to include all
subsidiaries and affiliates of AMP Incorporated), and Xxxxx X.
Xxxxxx ("Consultant").
W I T N E S S E T H:
WHEREAS, Consultant was first employed by AMP on March
14, 1988 and became an officer of AMP in 1989; and
WHEREAS, as a result of said employment and executive
status, Consultant has acquired and may continue to acquire
confidential and proprietary knowledge relating to the general
business affairs and operations, and in particular to the
global technology and business development activities of AMP;
and
WHEREAS, Consultant has come forward indicating his
intention to voluntarily retire from AMP's employment
effective August 1, 1998, and
WHEREAS, the parties entered into an Employment
Agreement dated February 28, 1988 (the "Employment
Agreement"), certain terms and conditions of which are still
in effect, and the parties intend to formally terminate said
agreement, except as otherwise provided herein, and
WHEREAS, AMP desires to retain to itself the sole
benefit of Consultant's knowledge and information concerning
these technology and business development activities and to
continue to derive advice, counsel and services from
Consultant from time to time.
NOW, THEREFORE, in consideration of the mutual
covenants and undertakings hereafter set forth, the parties
agree as follows:
1. Independent Contractor Status. AMP agrees to
retain Consultant as an independent contractor carrying out
specific projects identified by AMP and Consultant agrees to
perform such consulting services for AMP as may be designated
from time to time by AMP's President and Chief Executive
Officer, or by AMP's Chairman of the Board, or by their
designee. Such projects shall include, but not be limited to,
those identified in the attachment hereto. Consultant will
perform services pursuant to this Agreement as an independent
contractor and this Agreement will not be considered to create
the relationship of employer and employee. Consultant is not
authorized to make any representations, contract or commitment
on behalf of AMP without the prior written consent of AMP's
President and Chief Executive Officer or AMP's Chairman of the
Board or their designee.
2. Term. The original term of this Agreement shall
be one year, beginning on August 1, 1998 and ending July 31,
1999. This Agreement may be extended by a writing executed by
both of the parties hereto on the same terms and conditions as
herein contained or otherwise as may be then mutually agreed
upon by the said parties.
3. Compensation/Consideration. Consultant will be
compensated as follows for his performance of active
consulting services, for his adherence to his non-competition
and confidentiality covenants, and for his other agreements
herein:
(a) Consultant will be paid a fee of $31,250 per
month for the period from August 1, 1998 through July
31, 1999, with such monthly fee payable in arrears by
the 15th day of the next following month, and will
receive a 1998 stock option award under AMP's Long
Term Equity Incentive Plan equal to 30,000 options,
which will vest on the third anniversary of grant,
have an exercise period extending to the tenth
anniversary of grant, and have an exercise price equal
to the date of grant fair market value. The $15,625
monthly amount due Consultant during his first two
years after leaving AMP's employment pursuant to
Section 7 of his Employment Agreement shall be paid to
Consultant (again in arrears by the 15th day of the
next following month) with respect to the period from
August 1, 1998 to July 31, 2000, during which period
the non-competition provisions of said Section 7 shall
continue to apply.
(b) Upon receipt from Consultant of a lump sum
payment of 44,835 pounds sterling, AMP will transfer
to Consultant AMP's interest in the Mercedes
automobile currently provided for Consultant's use in
the United Kingdom. If and only if Consultant opts to
purchase the automobile, AMP will make a pre-tax
payment to Consultant of $46,000. In return for such
payment, Consultant waives any repatriation allowance
and costs otherwise provided under AMP's international
assignee policy. This right to purchase the automobile
shall expire September 1, 1998, at which time the
vehicle, if not purchased, will be returned to AMP's
possession in the United Kingdom.
(c) Contingent upon Consultant's faithful
adherence to his covenants herein and his continuing
non-competition, (1) AMP will extend the expiration
date of each AMP stock option grant Consultant holds
at retirement, including any options first granted to
him in 1998, beyond his August 1, 1998 retirement date
to the tenth-anniversary-of-grant expiration date that
was originally applicable to a given grant, and (2),
solely for purposes of the continued vesting and
payout to the Consultant of the 1996 and 1997
Performance Restricted Shares held by Consultant at
his retirement (which will be paid out, to the extent
vested, in January 1999, and January 2000,
respectively), Consultant's employment with AMP will
not be considered as terminated during the initial
term of this Agreement.
(d) At the start of each month Consultant shall
submit a written report to AMP's President and Chief
Executive Officer summarizing in reasonable detail his
AMP consulting services and his other non-AMP business
activities for the immediately prior month and his
planned AMP-related travel and consulting activities
for the current month. The $31,250 monthly payment
under paragraph (a) above will be contingent upon
receipt of this report, with the Agreement otherwise
continuing in full force and effect during any payment
deferral period resulting from a late report.
(e) Consultant will be paid ordinary and
reasonable travel and business expenses incurred while
performing consulting services hereunder. Expense
payments will be made upon presentment to and approval
by AMP's President and Chief Executive Officer of an
AMP expense voucher (with appropriate receipts
itemizing the expenses incurred). Expense vouchers
shall be submitted no later than ten (ten) days after
the end of the month of receipt of the credit card
xxxx(s) relating to the expenses.
(f) Consultant's "Pensionable Earnings" for
purposes of the AMP Incorporated Supplemental
Executive Pension Plan shall be the actual base
earnings and annual cash bonus paid or payable to him
during the period from August 1 1997 to July 31,1998,
and the enhanced benefit amount resultant from this
use of final year rather than three year average
earnings shall be payable to him beginning immediately
with no reduction for commencement prior to age 60.
Consultant shall otherwise be deemed eligible to
participate in the AMP Voluntary Early Retirement
Program in effect until August 15, 1998, which means
he will be eligible for an enhanced benefit under the
AMP Incorporated Pension Plan and Pension Restoration
Plans (which benefits are offsets to the enhanced
Supplemental Executive Pension Plan benefit) and for a
continuation of his AMP health care benefit coverage
to age 65 on the terms and conditions such health care
benefits are provided to active employees.
(g) Upon Consultant's August 1, 1998 retirement
from AMP, his status as an employee of AMP on
international assignment will end, and for periods of
time thereafter he will not be eligible for any of the
international assignment allowances, tax advance and
tax equalization payments, or other benefits afforded
under AMP's international assignee policies, with the
exceptions that the international assignee allowances
currently provided will be continued on a month-to-
month basis until the earlier of September 30, 1998 or
Consultant's actual repatriation to the United States
and repatriation costs and allowances (unless waived
pursuant to paragraph (b) above) will be covered if
repatriation occurs by September 30, 1998, and with
the further exception that the costs of his tax return
preparation and tax equalization will be covered for
the period of his international assignment ending no
later than September 30, 1998. Should Consultant not
promptly repatriate to the United States during the
two months following his retirement date, (1) AMP will
cover the costs of shipping his U.S.-stored household
goods to him in the United Kingdom and agrees to sell
or otherwise transfer over to him at fair market value
AMP's interest in any household goods and appliances
currently being provided to him, (2) AMP will
cooperate with Consultant within reasonable bounds in
whatever steps may be necessary to modify or update
his United Kingdom visa status, with the understanding
that consultant is personally responsible for filing
the necessary documents and obtaining the necessary
approvals to change his current visa status, (3) any
and all costs inherent in or resulting from
maintaining two residences or otherwise attributable
to cost-of-living differentials between the U.S. and
the United Kingdom will be solely the responsibility
of Consultant to bear, and (4) any and all U.S. and
United Kingdom taxes and tax compliance costs that
arise on and after October 1, 1998 attributable to
compensation paid to Consultant from AMP under this
agreement or otherwise on and after October 1, 1998
will be solely the responsibility of Consultant to
resolve and discharge.
(h) AMP agrees that the services of Cendant
Mobility, Inc. will be available to Consultant on an
assigned sale basis to handle the settlement of his
home in Hershey, Pennsylvania. The settlement process
must be completed by December 31, 1998.
(i) While Consultant is providing consulting
services in Harrisburg, Pennsylvania, AMP will provide
him with office space and appropriate
administrative/clerical support.
4. Consultant's Covenants. In addition to
Consultant's obligation to perform consulting services
pursuant to Section 1 of this Agreement, Consultant
specifically covenants and agrees and it is an essential
condition of this Agreement that:
(a) He will not disclose to unauthorized persons
any information whatsoever relative to AMP's business
or the business of its subsidiaries and affiliates,
whether previously acquired or otherwise and, to that
end, he will at all times observe the strictest
secrecy with regard to all matters, without
limitation, concerning AMP's business, and this
obligation to secrecy shall continue not only through
the period of this Consulting Agreement and
performance hereunder but permanently thereafter.
(b) Consultant confirms his continuing post-
employment confidentiality obligations under the terms
and conditions of his Employment Agreement and Exhibit
F to his Employment Agreement, or otherwise entered
into between Consultant and AMP during Consultant's
employment with AMP.
(c) During the term of this Agreement and while he
is receiving any payment or other consideration from
AMP pursuant to this Agreement he will not engage in
or perform any services as an employee, partner,
owner, stockholder, consultant or advisor or otherwise
for any other business organization or individuals in
connection with any matter in respect of which the
interest of such other business organization or
individual is or might reasonably be expected by AMP
to be adverse to or inconsistent with that of AMP.
Ownership as an investor of not more than five percent
(5%) of the outstanding shares of stock of any company
having at least one hundred (100) shareholders shall
not in itself constitute a violation of this covenant.
(d) Consultant confirms his obligation to comply
with any and all convenants not to compete either
contained in the Employment Agreement and Exhibits, or
otherwise entered into between Consultant and AMP
during Consultant's employment with AMP.
(e) He will not take or remove from AMP's premises
without the written consent of the President and Chief
Executive Officer or the Chairman of the Board any
reports, papers, documents or any reproductions
thereof relating to AMP's business .
(f) He will not at any time act or conduct himself
in any manner which he knows or should have reason to
believe is inimical or contrary to AMP's best
interests.
(g) All intellectual property, whether patentable
or not, conceived, developed or reduced to practice in
the performance of Consultant's services under this
Agreement, including but not limited to inventions,
processes, know how, ideas, discoveries, designs,
improvements, methods, copyrights, trademarks,
software, mask works or the like and actual and
potential client contact lists, shall be and hereby is
assigned by Consultant to AMP, to include all such
rights throughout the world. Further, all models,
prototypes, contrivances and structures made or
prepared for AMP in the performance of services under
this Agreement shall be the property of AMP.
Consultant understands and agrees that all written or
other tangible data developed by Consultant in
performing services pursuant to this Agreement,
whether in printed or electronic form, and all films,
tapes, documents, reports, evaluations, plans,
specifications, drawings, programs, worksheets and
materials are works made for hire and that AMP will
have all right, title and interest in such data.
(h) Consultant confirms his post-employment
obligations under the terms and conditions of the
Intellectual Property Agreement, attached to the
Employment Agreement as Exhibit G, or otherwise
entered into between Consultant and AMP during
Consultant's employment with AMP.
(5) Release. In exchange for good and valuable
consideration described above, including but not limited to
the consideration in the form of cash compensation, a 1998
stock option grant, an enhanced pension benefit, continuing
health care benefits to age 65, and extensions of stock
options and Performance Restricted Share awards beyond
termination of employment, Consultant, on his own behalf and
on behalf of any heirs, representatives, executors,
administrators, successors and assigns, agrees to release and
forever discharge AMP, each and every officer, director, and
employee of AMP and their successors and assigns, and any
person, firm, corporation, association or partnership
affiliated with the AMP, whether currently known or unknown to
the Consultant (collectively, "Releasees"), from all actions,
suits, debts, covenants, contracts, agreements, judgments,
claims and demands whatsoever, in law or equity (collectively,
"claims"), whether known or unknown to Consultant, arising out
of or in any way connected with Consultant's employment with
AMP or the termination of that employment, with the
understanding that as a retiree from AMP Consultant has rights
to receive his accrued AMP-provided pension benefits, to
receive his accumulated Employee Savings and Thrift Plan and
Deferred Compensation Plan account balances, to retain his
split-dollar life insurance coverage and those rights are
continuing and unaffected by this release. By this release,
Consultant understands that he is giving up all claims against
AMP, or against any person acting on AMP's behalf, related to
his employment with AMP and the termination of that
employment. Further, Consultant agrees that his release
includes but is not limited to claims for breach of contract,
impairment of economic opportunity, wrongful discharge,
intentional infliction of emotional harm, promissory estoppel,
defamation, fraud, misrepresentation, or any other tort, and
also claims arising under Title VII of the Civil Rights Act of
1964, 42 U.S.C. 2000e et seq. (relating to sex, race, and
certain other kinds of job discrimination); the Age
Discrimination in Employment Act, 29 U.S.C. 929 et seq.
(relating to age discrimination in employment); the
Pennsylvania Human Relations Act, 43 Pa. Cons. Stat. Xxx. 951
et seq. (relating to all the above-mentioned forms of job
discrimination); and any other foreign, federal, state or
municipal statute, ordinance, executive order or regulation
relating to discrimination in employment or in any way
pertaining to employment relationships, which against the
above-described Releasees Consultant now has or ever had (but
not which may arise subsequent to the date of execution of
this Agreement). Consultant represents and warrants that he
has disclosed all actual or suspected violations of foreign,
federal, state and local law or regulations of which he is
aware, and Consultant releases the Releasees from any claims
related thereto, both directly and derivatively.
6. Age Discrimination in Employment Act Notice. The
following information is required by federal law to be
included in an agreement of this type:
(a) Consultant has 21 days in which to review this
Agreement, including the above release, sign
and date it, and return an executed copy to AMP. Consultant is
advised to consult an attorney prior to signing.
(b) Following Consultant's signing of this
Agreement, Consultant has an additional seven days
in which to revoke this Agreement. To be effective,
Consultant's revocation must be in writing, signed, dated,
and provided to AMP (Attn: X.X. Xxxxxx) at X.X. Xxx 0000,
Xxxxxxxxxx, XX 00000-0000, no later than seven days from the
date on which Consultant first signed and dated his
acceptance of this Agreement.
7. Employment References. Requests for employment
references directed to AMP will be responded to by the CEO or
by the Chairman of the Board and will be neutral in scope.
8. No Assignments. This Agreement is personal to
Consultant and he shall not assign either this Agreement or
any of his rights, benefits or interests herein and this
provision applies equally to Consultant's wife, estate or
anyone else claiming through Consultant. No right, benefit or
interest under this Agreement shall be subject to
anticipation, alienation, sale, assignment, pledge,
encumbrance or charge, and any attempt to anticipate,
alienate, sell, assign, pledge, encumber or charge the same
shall be void. No right, benefit or interest under this
Agreement shall in any manner be liable for or subject to the
debts, contracts, liabilities, or torts of Consultant. If
Consultant should become bankrupt or attempt to anticipate,
alienate, sell, assign, pledge, encumber or charge any right,
benefit or interest under this Agreement, then such right,
benefit or interest shall, in the sole uncontrolled discretion
of AMP, cease and determine.
9. Survival of Undertakings. Notwithstanding the
condition for payment as set forth in Section 4 herein, if
this Agreement is terminated pursuant to any provision or
provisions herein set forth or for the convenience of the
parties hereto or by Consultant for any reason, Consultant's
undertakings as set forth in Section 4, shall nevertheless
survive for a continuous period of 24 months from the date of
any such termination of this Agreement with no further cost or
obligation for payment to Consultant by AMP.
10 Entire Agreement. This Agreement constitutes the
entire understanding between AMP and Consultant with reference
to its subject matter and shall not be changed or modified
except by a written instrument signed by the parties hereto.
11. Waiver/Estoppel. No term or condition of this
Agreement shall be deemed to have been waived, nor shall there
by an estoppel to enforce any term or provision of this
Agreement, except by a written instrument of the party charged
with such waiver or estoppel executed with the same formality
attending the execution of this Agreement.
12. Cooperation in Litigation. Consultant agrees to
provide AMP with reasonable cooperation and assistance,
including the taking of depositions and the giving of
testimony at trial if deemed necessary, for all lawsuits for
which Consultant's testimony may be warranted. AMP will
reimburse Consultant for any reasonable and necessary expense
incurred as a result of such cooperation and assistance.
13. Indemnity Agreement. AMP acknowledges that the
terms of the Indemnity Agreement between Consultant and AMP
dated October 22, 1996 shall remain effective until ten years
after the date as of which Consultant ends his service as an
employee of AMP or the final termination of all proceedings
and derivative proceedings in respect of which Consultant is
or may be entitled to be granted rights of indemnification
under the terms of that agreement.
14. Executive Severance Agreement. Consultant Agrees
that the Executive Severance Agreement dated October 22, 1996
between him and AMP applicable upon a change of control of AMP
terminates as of his August 1, 1998 retirement date.
15. Severability. Should any part, term or provision
of this Agreement be determined by any court to be illegal or
invalid, such finding shall not affect the validity of the
remaining parts, terms and provisions of this Agreement.
16. No Admission. This Agreement shall not be
construed as an admission by AMP of any liability to you or of
the violation of any statute or legal or equitable obligation.
17. Governing Law. This Agreement shall be governed
by and construed under the laws of the Commonwealth of
Pennsylvania, without respect to the Commonwealth's conflicts
of laws provisions, and applicable federal law.
IN WITNESS WHEREOF, the parties hereto have caused
this Agreement to be executed as of the day and year first
above written intending to be legally bound.
AMP Incorporated
Attest: /s/ X. X. Xxxxxxxx
---------------------- By: /s/ X. X. Xxxxxx
Xxxxx X. Xxxxxxxx ---------------------
Corporate Secretary Its: President & CEO
RELEASE:
By his signature below, Consultant certifies that he has read the terms of this
Agreement, that he has had the opportunity to discuss this Agreement with his
attorney, that AMP has advised him he has up to twenty one (21) days to review
this Agreement and the meaning and consequences of it with his attorney, and
that he understands its terms and effects. Consultant acknowledges that he is
executing this Agreement voluntarily, with a full understanding of its terms and
effects, intending to be legally bound hereby, in exchange for consideration,
which he acknowledges is adequate and satisfactory to him. Consultant
understands he has seven (7) days from the execution of this Agreement to advise
AMP that he is revoking it, and he understands that at the end of the seven-day
period, if he does not revoke it, it will be in full force and effect.
Consultant intends for this Agreement to comply with Section 201 of the Older
Workers Benefit Protection Act of 1990.
ACCEPTED AND AGREED:
/s/ X. X. Xxxxxx
___________________________ Date: 7/24/98
Xxxxx X. Xxxxxx
