EXHIBIT (10.2)
Chief Executive Officer Severance Agreement
Tupperware Corporation
THIS EXECUTIVE SEVERANCE AGREEMENT is made, entered into, and is effective
this 1st day of June, 2003 (the "Effective Date"), by and between Tupperware
Corporation (the "Company"), a Delaware corporation, and X. X. Xxxxxx (the
"Executive").
WHEREAS, the Executive is currently employed by the Company as its Chief
Executive Officer; and
WHEREAS, the Executive possesses considerable experience and knowledge of
the business and affairs of the Company concerning its policies, methods,
personnel, and operations; and
WHEREAS, the Company is desirous of assuring, insofar as possible, that it
will continue to have the benefit of the Executive's services, and the Executive
is desirous of having such assurances; and
WHEREAS, the Board has determined that the appropriate steps should be
taken to reinforce and encourage the continued dedication of the Executive to
managing the Company.
NOW, THEREFORE, in consideration of the foregoing and of the mutual
covenants and agreements of the parties set forth in this Agreement, and of
other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto, intending to be legally bound, agree as
follows:
Article 1. Definitions
Wherever used in this Agreement, the following terms shall have the
meanings set forth below and, when the meaning is intended, the initial letter
of the word is capitalized:
(a) "Agreement" means this Chief Executive Officer Severance Agreement.
(b) "Base Salary" means, at any time, the then regular annual rate of pay
which the Executive is receiving as annual salary, excluding amounts:
(i) received under short- or long-term incentive or other bonus plans,
regardless of whether or not the amounts are deferred, or (ii)
designated by the Company as payment toward reimbursement of expenses.
(c) "Board" means the Board of Directors of the Company.
(d) "Cause" means:
(i) The willful and continued failure of the Executive to perform
substantially the Executive's duties with the Company or one of
its affiliates (other than any such failure resulting from
incapacity due to physical or mental illness), after a written
demand for substantial performance is delivered to the Executive
by the Board
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which specifically identifies the manner in which
the Board believes that the Executive has not substantially
performed the Executive's duties;
(ii) The willful engaging by the Executive in illegal conduct or gross
misconduct which is materially and demonstrably injurious to the
Company;
(iii) The willful violation by the Executive of any of the restrictive
covenants contained in Article 6; or
(iv) Conviction of, or a plea of nolo contendere to, a felony.
For purposes of this provision, no act or failure to act, on the part
of the Executive, shall be considered "willful" unless it is done, or
omitted to be done, by the Executive in bad faith or without
reasonable belief that the Executive's action or omission was in the
best interests of the Company. Any act, or failure to act, based upon
authority given pursuant to a resolution duly adopted by the Board or
based upon the advice of counsel for the Company shall be conclusively
presumed to be done, or omitted to be done, by the Executive in good
faith and in the best interests of the Company. The cessation of
employment of the Executive shall not be deemed to be for Cause unless
and until there shall have been delivered to the Executive a copy of a
resolution duly adopted by the affirmative vote of not less than
three-quarters (3/4) of the entire membership of the Board at a
meeting of the Board called and held for such purpose (after
reasonable notice is provided to the Executive and the Executive is
given an opportunity, together with counsel, to be heard before the
Board), finding that, in the good faith opinion of the Board, the
Executive is guilty of the conduct described in any one of
subparagraphs (i), (ii), (iii), or (iv) above, and specifying the
particulars thereof in detail.
(e) "Company" means Tupperware Corporation, a Delaware corporation, or any
successor thereto as provided in Article 8.
(f) "Disability" shall have the meaning ascribed to such term in the
Company's governing long-term disability plan, or if no such plan
exists, shall have such meaning as defined by the Board.
(g) "Effective Date" means the date specified in the opening sentence of
this Agreement.
(h) "Effective Date of Termination" means the date on which the
Executive's employment is terminated involuntarily without Cause by
the Company or on which the Executive terminates his employment with
Good Reason.
(i) "Good Reason" means, without the Executive's express written consent,
the occurrence of any one or more of the following:
(i) The assignment of the Executive to duties materially inconsistent
with the Executive's authorities, duties, responsibilities, and
status (including offices, titles, and reporting requirements) as
Chief Executive Officer, or a material reduction or alteration in
the nature or status of the Executive's authorities, duties, or
responsibilities as Chief Executive Officer, other than an
insubstantial
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and inadvertent act that is remedied by the Company
promptly after receipt of notice thereof given by the Executive;
(ii) The Company's requiring the Executive to be based at a location
in excess of thirty-five (35) miles from the location of the
Executive's principal job location or office as of the Effective
Date; except for required travel on the Company's business to an
extent substantially consistent with the Executive's then present
business travel obligations;
(iii) A reduction by the Company of the Executive's Base Salary in
effect on the Effective Date hereof, or as the same shall be
increased from time to time;
(iv) The failure of the Company to continue in effect any of the
Company's short- and long-term incentive compensation plans, or
employee benefit or retirement plans, policies, practices, or
other compensation arrangements in which the Executive
participates unless such failure to continue the plan, policy,
practice, or arrangement pertains to all plan participants
generally; or the failure by the Company to continue the
Executive's participation therein on substantially the same
basis, both in terms of the amount of benefits provided and the
level of the Executive's participation relative to other
participants; and
(v) The failure of the Company to obtain a satisfactory agreement
from any successor to the Company to assume and agree to perform
the Company's obligations under this Agreement, as contemplated
in Article 8.
Notwithstanding anything to the contrary in this Agreement, the
removal of the Executive as Chairman of the Board shall not constitute
Good Reason. The Executive's right to terminate employment for Good
Reason shall not be affected by the Executive's incapacity due to
physical or mental illness. The Executive's continued employment shall
not constitute consent to, or a waiver of rights with respect to, any
circumstance constituting Good Reason.
(j) "Severance Benefits" mean the payments and benefits as provided in
Section 3.1.
Article 2. Term of Agreement
This Agreement will commence on the Effective Date, and shall continue in
effect irrevocably for three (3) full calendar years. However, at the end of the
first year of such three (3) year period, this Agreement shall be extended
automatically for one (1) additional year, unless the Company notifies the
Executive in writing, prior to the occurrence of the automatic extension, that
the term of this Agreement will not be extended. Moreover, upon the end of each
subsequent year, this Agreement shall also be extended automatically for one (1)
additional year, unless the Company otherwise notifies the Executive in writing
prior to the occurrence of such automatic extension. In the case where the
Company properly notifies the Executive that the Agreement will no longer be
extended, the Agreement will terminate at the end of the term, or extended term,
then in progress.
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Article 3. Severance Benefits
3.1. Termination without Cause or for Good Reason. In the event that the
Executive's employment is terminated involuntarily without Cause by the Company
or the Executive terminates his employment with Good Reason, the Company shall
pay to the Executive and provide him with total Severance Benefits equal to all
of the following:
(a) A lump-sum amount equal to the Executive's unpaid Base Salary,
accrued vacation pay, unreimbursed business expenses, and all
other items earned by and owed to the Executive through and
including the Effective Date of Termination.
(b) A lump-sum amount equal to the Executive's annual bonus amount
for the bonus plan year in which the Executive's Effective Date
of Termination occurs that the Executive would have earned had he
remained employed through the end of such bonus plan year (and
employed through such other period as may be required under the
annual bonus plan in order for the Executive to be vested in such
annual bonus amount), multiplied by a fraction, the numerator of
which is the number of days in the bonus plan year through the
Effective Date of Termination and the denominator of which is
three hundred and sixty-five (365). This payment will be in lieu
of any other payment to be made to the Executive under the annual
bonus plan in which the Executive is then participating for that
bonus plan year (except as provided in Section 3.1(c) below).
(c) A lump-sum amount equal to two (2) multiplied by the sum of: (i)
the Executive's highest annual rate of Base Salary in effect
during the twelve (12) months preceding the Executive's Effective
Date of Termination, and (ii) the Executive's highest annual
target bonus in effect during the twelve (12) months preceding
the Executive's Effective Date of Termination. Such amount shall
be paid regardless of actual performance under the annual bonus
plan.
(d) All long-term incentive awards shall be subject to the treatment
provided under the applicable long-term incentive plans and/or
the applicable award agreements thereunder, unless determined
otherwise by the Board in its discretion.
(e) A continuation for a twenty-four (24) month period of the
Executive's medical insurance and dental insurance coverage
(including family coverage if applicable). These benefits shall
be provided by the Company to the Executive beginning immediately
upon the Executive's Effective Date of Termination. Such benefits
shall be provided to the Executive at the same coverage level
(with all premium costs borne by the Company) as in effect as of
the Executive's Effective Date of Termination for a period of
twenty-four (24) months following the Executive's Effective Date
of Termination.
Notwithstanding the above, these medical and dental insurance
benefits shall be discontinued prior to the end of the
twenty-four (24) month continuation period in the event the
Executive receives substantially similar benefits from a
subsequent employer, as determined solely by the Company in good
faith. However, if the benefits received from the subsequent
employer do not cover the preexisting medical conditions of the
Executive or a covered member of the Executive's
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family, the continuation period shall continue, but not beyond
the twenty-fourth (24th) month following the Executive's
Effective Date of Termination. For purposes of enforcing this
offset provision, the Executive shall have a duty to keep the
Company informed as to the terms and conditions of any subsequent
employment and the corresponding benefits earned from such
employment and shall provide, or cause to provide, to the Company
in writing correct, complete, and timely information concerning
the same.
(f) For a period of up to twenty-four (24) months following the
Executive's Effective Date of Termination, the Executive shall be
entitled, at the expense of the Company, to receive standard
outplacement services from a nationally recognized outplacement
firm of the Executive's selection. However, the Company's total
obligation shall not exceed seventy-five thousand dollars
($75,000).
3.2. Termination Due to Disability. The Executive's benefits shall be
determined in accordance with the Company's retirement, insurance, and other
applicable plans and programs then in effect if the Executive's employment with
the Company is terminated due to Disability.
3.3. Termination Due to Retirement or Death. The Executive's benefits shall
be determined in accordance with the Company's retirement, survivor's benefits,
insurance, and other applicable programs then in effect, if the Executive's
employment with the Company is terminated by reason of his voluntary normal
retirement (as defined under the then established rules of the Company's
tax-qualified retirement plan) or death.
3.4. Termination for Cause or by the Executive Other Than for Good Reason.
If the Executive's employment is terminated either: (a) by the Company for
Cause, or (b) voluntarily by the Executive other than for Good Reason, the
Company shall pay the Executive his full Base Salary at the rate then in effect,
accrued vacation, and other items earned by and owed to the Executive through
the Effective Date of Termination, plus all other amounts to which the Executive
is entitled under any compensation plans of the Company at the time such
payments are due, and the Company shall have no further obligations to the
Executive under this Agreement.
3.5. Notice of Termination. Any termination of the Executive's employment
by the Company for Cause or by the Executive for Good Reason shall be
communicated by Notice of Termination to the other party. For purposes of this
Agreement, a "Notice of Termination" shall mean a written notice which shall
indicate the specific termination provision in this Agreement relied upon, and
shall set forth in reasonable detail the facts and circumstances claimed to
provide a basis for termination of the Executive's employment under the
provision so indicated.
Article 4. Form and Timing of Severance Benefits
4.1. Form and Timing of Severance Benefits. The Severance Benefits
described in Sections 3.1(a) and 3.1(c) shall be paid in cash to the Executive
in a single lump sum as soon as practicable following the Effective Date of
Termination, but in no event beyond ten (10) calendar days from such date. Any
payment pursuant to Section 3.1(b) that the Executive may be entitled to shall
be made at the same time as any such annual bonus payment for such bonus plan
year would have been made absent the termination of the Executive's employment.
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4.2. Withholding of Taxes. The Company shall withhold from any amounts
payable under this Agreement all federal, state, city, or other taxes as legally
shall be required.
Article 5. The Company's Payment Obligation
5.1. Payment Obligations Absolute. The Company's obligation to make the
payments and the arrangements provided for herein shall be absolute and
unconditional, and shall not be affected by any circumstances including, without
limitation, any offset, counterclaim, recoupment, defense, or other right which
the Company may have against the Executive or anyone else. All amounts payable
by the Company hereunder shall be paid without notice or demand. Each and every
payment made hereunder by the Company shall be final, and the Company shall not
seek to recover all or any part of such payment from the Executive or from
whomsoever may be entitled thereto, for any reasons whatsoever.
The Executive shall not be obligated to seek other employment in
mitigation of the amounts payable or arrangements made under any provision of
this Agreement, and the obtaining of any such other employment shall in no event
effect any reduction of the Company's obligations to make the payments and
arrangements required to be made under this Agreement, except to the extent
provided in Section 3.1(e).
5.2. Contractual Rights to Benefits. This Agreement establishes and vests
in the Executive a contractual right to the benefits to which he is entitled
hereunder. However, nothing herein contained shall require or be deemed to
require, or prohibit or be deemed to prohibit, the Company to segregate,
earmark, or otherwise set aside any funds or other assets, in trust or
otherwise, to provide for any payments to be made or required hereunder.
Article 6. Restrictive Covenants
6.1. Disclosure of Information. Without the prior written consent of the
Company, or unless required by law or legal process, the Executive shall not, at
any time (whether during the term of this Agreement or thereafter), directly or
indirectly, use, attempt to use, disclose, or otherwise make known to any person
or entity (other than the Board):
(a) Any confidential or proprietary knowledge or information,
including without limitation, lists of customers or suppliers,
trade secrets, know-how, inventions, discoveries, processes, and
systems, as well as any data and records pertaining thereto,
which the Executive may acquire in the course of his employment.
(b) Any confidential or proprietary knowledge or information of a
confidential nature (including, but not limited to, all
unpublished matters) relating to, without limitation, the
business, properties, accounting, books and records, computer
systems and programs, trade secrets, or memoranda of the Company.
6.2. Noncompetition. Without the prior written consent of the Company,
during the term of this Agreement and for a period of twenty-four (24) calendar
months after the Executive's termination of employment for any reason, the
Executive shall not, directly or indirectly, whether as an owner, general
partner, officer, employee, consultant, director, stockholder, or otherwise, (a)
engage in any business that competes with the Company, as such business is then
conducted by the Company and in such geographies as the Company then operates,
for the Executive's own account; (b) render any services to any entity, firm, or
person (other than the Company) engaged in such
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activities; or (c) become interested in any such entity, firm, or person (other
than the Company) as a partner, shareholder, principal, agent, consultant, or in
any other relationship or capacity; provided, however, that notwithstanding the
above, the Executive may own, directly or indirectly, solely as an investment,
securities of any such entity that are traded on any national securities
exchange or NASDAQ if the Executive: (i) is not a controlling person of, or a
member of a group which controls, such entity, and (ii) does not, directly or
indirectly, own two percent (2%) or more of any class of securities of such
entity.
6.3. Nonsolicitation. Without the prior written consent of the Company,
during the term of this Agreement and for a period of twenty-four (24) calendar
months after the Executive's termination of employment for any reason, the
Executive shall not, directly or indirectly, employ or retain or solicit for
employment or solicit to provide services or arrange to have any other person,
firm, or other entity employ or retain or solicit for employment or solicit to
provide services, or otherwise participate in the employment or retention of any
person who is an employee, consultant, or independent contractor of the Company.
6.4. Nondisparagement. At any time (whether during the term of this
Agreement or thereafter), the Executive shall not make any statements, whether
written or oral, or take any other action relating to the Company or its
officers or directors that would disparage or otherwise harm the Company, its
business, or its reputation. Likewise, the Company will not make any statements,
whether written or oral, or take any other action relating to the Executive that
would disparage or otherwise harm the Executive or his reputation.
6.5. Acknowledgement of Covenants. The parties hereto acknowledge that the
Executive's services are of a special, extraordinary, and intellectual character
which gives him unique value, and that the business of the Company and its
subsidiaries is highly competitive, and that violation of any of the covenants
provided in this Article 6 would cause immediate, immeasurable, and irreparable
harm, loss, and damage to the Company not adequately compensable by a monetary
award. The Executive further acknowledges that he and the Company have
negotiated and bargained for the terms of this Agreement and that the Executive
has received adequate consideration for entering into this Agreement.
In the event of any such breach or threatened breach by the Executive of
any one or more of the covenants contained in this Article 6, the Company shall
be entitled to such equitable and injunctive relief as may be available to
restrain the Executive from violating the provisions hereof. Nothing herein
shall be construed as prohibiting the Company from pursuing any other remedies
available at law or in equity for such breach or threatened breach, including
the recovery of damages and the immediate termination of the employment of the
Executive hereunder.
6.6. Enforceability. If any court determines that the foregoing covenant,
or any part thereof, is unenforceable because of the duration or geographical
scope of such provision, or for any other reason, the duration or scope of such
provision, as the case may be, shall be reduced so that such provision becomes
enforceable and, in its reduced form, such provision shall then be enforceable
and shall be enforced.
Article 7. Legal Remedies
7.1. Dispute Resolution. The Company and the Executive shall each have the
right and option to elect to have any good faith dispute or controversy arising
under or in connection with this
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Agreement settled by litigation or arbitration. If arbitration is selected, such
proceeding shall be conducted by final and binding arbitration before a panel of
three (3) arbitrators in accordance with the laws and under the administration
of the American Arbitration Association.
7.2. Payment of Legal Fees. In the event that it shall be necessary or
desirable for the Executive to retain legal counsel and/or to incur other costs
and expenses in connection with the enforcement of any or all of his rights
under this Agreement, the Company shall pay (or the Executive shall be entitled
to recover from the Company) the Executive's attorneys' fees, costs, and
expenses in connection with a good faith enforcement of his rights including the
enforcement of any arbitration award. This shall include, without limitation,
court costs and attorneys' fees incurred by the Executive as a result of any
good faith claim, action, or proceeding, including any such action against the
Company arising out of, or challenging the validity or enforceability of, this
Agreement or any provision hereof. Notwithstanding anything to the contrary in
this Section 7.2, the Company shall not be required to pay any such costs or
legal fees (and shall be entitled to reimbursement by the Executive to the
extent that any such fees and costs have been paid to or on behalf of the
Executive by the Company) if the final arbiter of a dispute between the Company
and the Executive finds that the Executive's claim was frivolous and without
merit.
Article 8. Successors
The Company shall require any successor (whether direct or indirect, by
purchase, merger, reorganization, consolidation, acquisition of property or
stock, liquidation, or otherwise) of all or a significant portion of the assets
of the Company by agreement, in form and substance satisfactory to the
Executive, to expressly assume and agree to perform this Agreement in the same
manner and to the same extent that the Company would be required to perform if
no such succession had taken place. Regardless of whether such agreement is
executed, this Agreement shall be binding upon any successor in accordance with
the operation of law and such successor shall be deemed the "Company" for
purposes of this Agreement.
Article 9. Miscellaneous
9.1. Employment Status. This Agreement is not, and nothing herein shall be
deemed to create, an employment contract between the Executive and the Company
or any of its subsidiaries. Subject to the terms of any employment contract
between the Executive and the Company, the Executive acknowledges that the
rights of the Company remain wholly intact to change or reduce at any time and
from time to time his compensation, title, responsibilities, location, and all
other aspects of the employment relationship, or to discharge him at any time
(subject to any such change, reduction, or discharge possibly entitling the
Executive to the Severance Benefits pursuant to Section 3.1).
9.2. Entire Agreement. This Agreement contains the entire understanding of
the Company and the Executive with respect to the subject matter hereof. In
addition, to the extent that any Severance Benefits are provided to the
Executive under this Agreement, such Severance Benefits shall reduce, on a
dollar-for-dollar basis (or in the case of the benefits provided in Section
3.1(c), a month-for-month basis), any severance benefits to which the Executive
is entitled under any employment contract, severance agreement, policy, or
program of the Company, including, but not limited to, that certain Change in
Control Agreement between the Executive and the Company dated August 30, 1999.
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9.3. Notices. All notices, requests, demands, and other communications
hereunder shall be sufficient if in writing and shall be deemed to have been
duly given if delivered by hand or if sent by registered or certified mail to
the Executive at the last address he has filed in writing with the Company or,
in the case of the Company, at its principal offices.
9.4. Execution in Counterparts. This Agreement may be executed by the
parties hereto in counterparts, each of which shall be deemed to be original,
but all such counterparts shall constitute one and the same instrument, and all
signatures need not appear on any one counterpart.
9.5. Conflicting Agreements. The executive hereby represents and warrants
to the Company that his entering into this Agreement, and the obligations and
duties undertaken by him hereunder, will not conflict with, constitute a breach
of, or otherwise violate the terms of, any other employment or other agreement
to which he is a party, except to the extent any such conflict, breach, or
violation under any such agreement has been disclosed to the Board in writing in
advance of the signing of this Agreement.
9.6. Severability. In the event any provision of this Agreement shall be
held illegal or invalid for any reason, the illegality or invalidity shall not
affect the remaining parts of the Agreement, and the Agreement shall be
construed and enforced as if the illegal or invalid provision had not been
included. Further, the captions of this Agreement are not part of the provisions
hereof and shall have no force and effect.
Notwithstanding any other provisions of this Agreement to the contrary, the
Company shall have no obligation to make any payment to the Executive hereunder
to the extent, but only to the extent, that such payment is prohibited by the
terms of any final order of a federal or state court or regulatory agency of
competent jurisdiction; provided, however, that such an order shall not affect,
impair, or invalidate any provision of this Agreement not expressly subject to
such order.
9.7. Modification. No provision of this Agreement may be modified, waived,
or discharged unless such modification, waiver, or discharge is agreed to in
writing and signed by the Executive and by a member of the Board, as applicable,
or by the respective parties' legal representatives or successors.
9.8. Applicable Law. To the extent not preempted by the laws of the United
States, the laws of the State of Delaware shall be the controlling law in all
matters relating to this Agreement, and without giving effect to principles of
conflicts of laws.
IN WITNESS WHEREOF, the parties have executive this Agreement on this
1st day of June, 2003.
ATTEST Tupperware Corporation
By: By:
------------------------ ------------------------------
Corporate Secretary Title: Senior Vice President,
Human Resources
---------------------------------
X. X. Xxxxxx
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