SEPARATION AGREEMENT
This SEPARATION AGREEMENT (this "Agreement") is made and is effective as
of the later of the dates set forth herein, by and among I. XXXXX XXXXX
("Xxxxx"), PHILIPP BROTHERS CHEMICALS, INC., a New York corporation ("PBC") and
PHIBRO-TECH, INC., a Delaware corporation (the "Company"), having their
principal place of business at Xxx Xxxxxx Xxxxx, Xxxx Xxx, Xxx Xxxxxx.
WHEREAS, Xxxxx has faithfully and responsibly served the Company as
President and Chief Operating Officer and a member of the Board of Directors of
the Company for a period in excess of ten (10) years;
WHEREAS, Xxxxx and the Board of Directors of the Company have determined
that it is in the parties' best interests to formalize the terms and conditions
of Xxxxx'x separation of employment to assure continued stability to both the
Company and Xxxxx and to set forth herein the parties' respective rights and
obligations;
NOW, THEREFORE, for and in consideration of the mutual premises and
covenants herein contained, and for other good and valuable consideration
receipt of which is hereby acknowledged, the parties hereto hereby agree as
follows:
1. Separation Date. Xxxxx'x employment as an officer, director, and
employee of the Company and all related entities (PBC, the Company, and their
subsidiaries and affiliates being collectively referred to as the "Companies")
will terminate effective as of the close of business on August 31, 1999 (the
"Separation Date"), and the Company agrees to accept Xxxxx'x resignation from
such positions effective as of the Separation Date. All communications and
correspondence relating to Xxxxx'x separation of employment from the Companies
shall make appropriate reference to such voluntary resignation.
2. Effective Date. This Separation Agreement shall become effective upon
the later to occur of: (a) the execution and delivery of (i) this Agreement,
(ii) the attached General Release and Waiver (the "General Release"), (iii) the
Stock Purchase Agreement between them of even date herewith (the "Stock Purchase
Agreement"), and (iv) the Consulting Agreement between Xxxxx and PBC (the
"Consulting Agreement"); and (b) the date and time as of which all waiting
periods and all of Seller's rights to withdraw, revoke or rescind his acceptance
and execution of the General Release shall have expired and terminated (such
date being referred to as the "Closing Date" or the "Effective Date").
3. Payment under Severance Agreement. On the Closing Date, the Company
shall pay to Xxxxx the amount of $862,660, by certified or bank cashier's check
or wire transfer to an account designated by Xxxxx. Such payment shall be in
full satisfaction and discharge of all the Company's obligations under Section
2(a) of that certain Severance Agreement dated February 21, 1995 between the
Company and Xxxxx (the "Xxxxxxxxx Agreement"). Notwithstanding the preceding
sentence, the
Company shall remain obligated under the Severance Agreement to pay a "Catch-up
Payment" if an "Extraordinary Event" (as such terms are defined in the Severance
Agreement) occurs within twelve (12) months of the Separation Date. For purposes
thereof, the "Severance Amount" (as defined in the Severance Agreement) shall be
deemed to be $2,862,660. Notwithstanding anything to the contrary herein, the
termination of Xxxxx'x employment as of the Separation Date shall be deemed and
treated for all purposes under the Severance Agreement and the Stockholders
Agreement as the occurrence of an "Actual or Constructive Termination" (as
defined in the Severance Agreement).
4. Expense Reimbursement. The Company shall reimburse Xxxxx for all of his
reasonable business expenses incurred in the performance of his duties as an
officer, director, and employee of the Company and all related entities, subject
to the submission of expense statements and receipts evidencing such payments to
the reasonable satisfaction of the Company.
5. Health Benefits. Xxxxx and his family shall be eligible to continue
their medical and health insurance coverage benefits at their own expense, at
standard non-subsidized rates, for the maximum period pursuant to the
Consolidated Omnibus Budget Reconciliation Act (COBRA). The Company agrees to
timely provide the forms necessary to permit Xxxxx and his family to elect to
continue such insurance coverage prior to their expiration.
6. Benefit Plans. From and after the Closing Date, Xxxxx shall have such
rights in and benefits under the Company's 401(k) Plan, The Retirement Plan of
Philipp Brother Chemicals, Inc. and the Company's Deferred Compensation Plan and
Trust as are provided by the terms thereof. Consistent with the underlying
Plans, the Companies will make all reasonable arrangements and process all forms
necessary to provide for expeditious distribution of any and all vested benefits
under such Plans, as requested by Xxxxx.
7. Return of Property. Except for the laptop computer and the leased Range
Rover which is being provided to Xxxxx under the Consulting Agreement, Xxxxx
agrees to return all property of the Company or any affiliate thereof, including
but not limited to keys, correspondence, customer and mailing lists, files (in
electronic or tangible form), documents, reports, equipment, computers and
materials and other such property as may be in his possession.
8. Confidentiality. This Agreement and the General Release, the terms and
provisions thereof and the negotiations leading thereto, shall be and shall
remain confidential. The parties shall maintain such confidentiality, and shall
not reveal or discuss Xxxxx'x termination of employment other than as required
in good faith in the ordinary course, as in seeking new employment or a
successor, or with attorneys, accountants or tax advisors, or as required by
applicable securities or other law or stock market or accounting requirements,
or in other cases only with the prior written consent of the other party. Xxxxx
may advise potential employers, and the Companies agree to confirm, that Xxxxx
and the Companies amicably resolved their relationships and that Xxxxx
voluntarily resigned from his positions and employment with the Companies.
9. Releases.
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(a) Except for any rights Xxxxx may have under this Agreement, the Stock
Purchase Agreement, Section 2(b) and, if applicable, Section 2(c) of the
Severance Agreement and the Consulting Agreement, Xxxxx hereby releases the
Companies as provided in the General Release.
(b) Except for any rights it may have under this Agreement, the Stock
Purchase Agreement and the Consulting Agreement, each of the Companies for
itself and on behalf of its subsidiaries and affiliates forever releases and
discharges Xxxxx, his heirs, executors, administrators, legal representatives
and successors from any and all claims, demands, causes of action, and
liabilities of any kind whatsoever (upon any legal or equitable theory, whether
contractual, in tort, common law, statutory, federal, state, local or otherwise,
and including but not limited to any claims for equitable relief, compensatory,
punitive or other damages or expenses or for attorneys' fees, or costs or
disbursements of any kind), which the Companies ever had, now have, or may
hereafter have against Xxxxx by reason of any action, omission, transaction, or
occurrence occurring up to and including the Separation Date, in each case
authorized by the Chairman of the Board of PBC or otherwise performed or omitted
to be performed by Xxxxx in good faith and in a manner which Xxxxx reasonably
believed to be in or not opposed to the best interests of the Companies and not
unlawful. PBC and the Company covenant that, except for a proceeding brought to
enforce the terms and provisions of this Agreement, the General Release, the
Severance Agreement, the Stockholders Agreement, the Stock Purchase Agreement or
the Consulting Agreement, they will not at any time commence, maintain,
prosecute, participate in as a party, or permit to be filed by any other person
or entity on their behalf, any action, suit or proceeding (judicial,
administrative, arbitral, or other) against Xxxxx with respect to any act,
event, or occurrence, or any alleged failure to act, occurring up to and
including the Separation Date, in each case authorized by the Chairman of the
Board of PBC or otherwise performed or omitted to be performed by Xxxxx in good
faith and in a manner which Xxxxx reasonably believed to be in or not opposed to
the best interests of the Companies and not unlawful. PBC and the Company agree
that if they violate this covenant by suing Xxxxx or his heirs, executors,
administrators, legal representatives or successors, the Companies will pay all
costs and expenses of defending against the suit incurred by Xxxxx or his heirs,
executors, administrators, legal representatives or successors, including
reasonable attorneys' fees. This paragraph does not apply to claims which the
Companies may have, if any, that may arise out of the obligations of Xxxxx
specified in this Agreement, the General Release, the Severance Agreement, the
Stock Purchase Agreement or Consulting Agreement.
10. Indemnification. The Companies shall continue any indemnification
obligations arising by statute, or under any directors and officers' liability
insurance policy covering Xxxxx, in each case to the same extent as other
directors and officers remain covered from time to time, or the Certificate of
Incorporation or Bylaws of any of the Companies in effect as of the Separation
Date. The Companies agree that if Xxxxx is made a party, or is threatened to be
made a party, to any action, suit or proceeding, whether civil, criminal,
administrative or investigative (a "Proceeding"), by reason of the fact that he
is or was a stockholder, director, officer or employee of any of the Companies
or is or was serving at the request of the Companies as a director, officer,
member, employee or agent of another corporation, partnership, joint venture,
trust or other enterprise, including service with respect to employee benefit
plans, whether or not the basis of such Proceeding is Xxxxx'x alleged action in
an official capacity while serving as a director, officer, member, employee or
agent, Xxxxx shall be indemnified and held harmless by the Companies to the
fullest extent legally permitted or
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authorized by the Companies' certificates of incorporation or bylaws or
resolutions of such Company's Board of Directors, against all cost, expense,
liability and loss (including, without limitation, reasonable attorney's fees,
judgments, fines, ERISA excise taxes or penalties and amounts paid or to be paid
in settlement with the approval of the Company) reasonably incurred or suffered
by Xxxxx in connection therewith, and such indemnification shall continue as to
Xxxxx even if he has ceased to be a director, officer, member, employee or agent
of either of the Companies or other entity and shall inure to the benefit of his
heirs, executors, administrators, legal representatives or successors, in each
case to the same extent as other directors and officers remain covered from time
to time. The Companies shall advance to Xxxxx all reasonable costs and expenses
incurred by him in connection with a Proceeding within 20 days after receipt by
the Companies of a written request for such advance, accompanied by an
undertaking by Xxxxx to repay the amount of such advance if it shall ultimately
be determined that he is not entitled to be indemnified against such costs and
expenses. Xxxxx shall be entitled to indemnification under this Section so long
as he meets the standard of conduct specified in Section 145 of the Delaware
General Corporation Law or Section 722 of the New York Business Corporation Law,
as the case may be. In addition, the Companies hereby agree to indemnify and
hold Xxxxx, and his heirs, executors, administrators, legal representatives,
successors and assigns, harmless from and against any and all claims, loss,
damage, liability, cost or expense, including but not limited to reasonable
attorneys' fees, incurred in defense of any such claim, arising out of or
related to Xxxxx'x positions and employment with the Companies and the
Companies' business, including but not limited to actions or claims against the
Companies for copyright infringement or securities violations, other than in
respect of the embezzlement or misappropriation of funds of the Companies or
other acts of fraud against the Companies.
11. General Indemnification. The parties hereto hereby agree to indemnify
each other for all damages and loss (including without limitation, costs and
expenses of litigation and reasonable attorneys' fees) resulting from a breach
of this Agreement by the other party.
12. Benefit. This Agreement shall bind and inure to the benefit of the
heirs, executors, administrators, legal representatives, successors and assigns
of Xxxxx and the successors and assigns of the Companies.
13. Entire Agreement; Paragraph Titles. This Agreement, the General
Release, the Stock Purchase Agreement and the Consulting Agreement contain the
entire agreement between the parties with respect to the subject matter hereof,
and supersede any and all prior agreements or understandings, oral or written,
between the parties with respect to the subject matter hereof and thereof (other
than Section 2(b) and, if applicable, Section 2(c) of the Severance Agreement).
This Agreement may not be modified other than by a writing signed on behalf of
both parties. In executing this Agreement, neither party is relying upon any
statement or representation beyond this Agreement or the General Release, the
Stock Purchase Agreement or the Consulting Agreement. Paragraph headings are
included in this Agreement for reference only, are not part of this Agreement,
and do not in any way modify any of the terms of this Agreement.
14. No Admission. Nothing contained in this Separation Agreement or in the
General Release, nor the furnishing of the consideration for the Separation
Agreement and General Release,
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shall be deemed or construed at any time to be an admission by either Xxxxx or
the Companies of any improper or unlawful conduct.
15. Governing Law. This Agreement shall be governed by and construed and
enforced in accordance with the laws of the State of New York.
IN WITNESS WHEREOF, the parties hereto have executed and delivered this
Agreement this 1st day of September, 1999.
PHIBRO-TECH, INC.
/s/ I. Xxxxx Xxxxx By: /s/ Xxxxxx X. Xxxxxxxxx
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I. Xxxxx Xxxxx Xxxxxx X. Xxxxxxxxx, Vice President
PHILIPP BROTHERS CHEMICALS, INC.
By: /s/ Xxxx X. Xxxxxxxx
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