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SETTLEMENT AGREEMENT AND
GENERAL AND SPECIAL RELEASE
1. PARTIES. The parties to this Settlement Agreement and General and Special
Release ("Agreement") are:
(a) Xxxxxx X. Xxxx, Xx. and Xxxxxxx X. Xxxx (collectively hereinafter
"Hood"), and
(b) XxXxxxxxx Xxxxxxx Corporation ("MDC").
2. RECITALS. This Agreement is entered into to effectuate Hood's
retirement from MDC, and the parties, through this Agreement, except as
expressly provided for herein agree to fully and finally settle all
claims, known and unknown, that either party may have against the other
arising from Hood's relationship with MDC and MDC's relationship with
Hood, including, but not limited to, claims relating to Hood's
employment, his retirement and the terms and scope of monetary payments
made by, or required to be made by, MDC to him under this and any other
agreement by and between MDC and Hood.
3. CONTRACTUAL TERMS. In consideration of the terms and covenants of this
Agreement, MDC agrees to permit, perform, allow or facilitate certain acts
on Hood's behalf and to pay certain monies, all as more fully set out
below:
(a) From the date of the execution of this Agreement until and including
December 31, 1996, Hood will continue in full-time employment at MDC;
(b) At the close of business on December 31, 1996, Hood will retire from
MDC;
(c) Hood will receive a payment under MDC's Senior Executive Performance
Sharing Plan ("PSP") equal to his Performance Adjusted Target
Incentive Compensation Award (XXX), determined during the first
quarter of 1997, subject to normal taxation and withholdings, which
payment shall be in complete satisfaction of any award under PSP for
the Plan Year 1996. Payment under this paragraph shall issue in
accordance with MDC's normal PSP cycle;
(d) Promptly following his retirement on December 31, 1996, Hood will
receive a lump-sum payment for all accrued and unused vacation days,
subject to normal taxation and withholding;
(e) The number of restricted shares of MDC stock granted under the two
Performance Accelerated Restricted Stock ("PARS") Agreements between
Hood and MDC dated February 18, 1994, shall remain unchanged. Subject
to the provisions of paragraphs 4(c) and 5(c) herein, shares shall
vest or be forfeited in accordance with the terms of the PARS
Agreements as if Hood was still employed by MDC through the
Performance Periods;
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(f) The number of restricted shares of MDC stock granted under the
Performance Accelerated Restricted Stock ("PARS") Agreement between
Hood and MDC dated March 20, 1995, shall be reduced from 24,000 to
16,000 shares. Subject to the provisions of paragraphs 4(c) and 5(c)
herein, such reduced number of shares shall vest or be forfeited in
accordance with the terms of the PARS Agreement as if Hood was still
employed by MDC through the Performance Periods;
(g) The number of restricted shares of MDC stock granted under the
Performance Accelerated Restricted Stock ("PARS") Agreement between
Hood and MDC dated February 1, 1996, shall be reduced from 10,000 to
1,667 shares. Subject to the provisions of paragraphs 4(c) and 5(c)
herein, such reduced number of shares shall vest or be forfeited in
accordance with the terms of the PARS Agreement as if Hood was still
employed by MDC through the Performance Periods;
(h) Any Long Term Incentive Plan (LTIP) or Performance Sharing Plan annual
incentive compensation amounts that previously would have been paid to
Hood but were deferred because they would not have been deductible due
to the compensation cap of Internal Revenue Code Section 162(m) (the
"162(m) Deferral"), together with additional amounts otherwise payable
to him from such deferrals shall continue to be deferred (the "Total
Deferral"). The deferred amounts included in the Total Deferral will
continue to earn interest at 11% until December 31, 1996; thereafter,
the Total Deferral will earn 7% interest compounded quarterly during
the deferral period. Subject to the provisions of paragraphs 4(c) and
5(c) herein, the Total Deferral and interest shall be paid to Hood by
MDC in the form of a ten (10) year annuity, payable in equal quarterly
installments of seventy-eight thousand two hundred eighty-two dollars
and forty cents ($78,282.40) beginning on April 1, 1997;
(i) Hood shall be entitled to receive other employee benefits in
accordance with MDC's established plans, including the Employee
Retirement Income Plan of MDC - Salaried Plan, the Supplemental
Employee Retirement Income Plan, the Employee Savings Plan of MDC
Salaried Plan and the Supplemental Employee Savings Plan, all in
accordance with the terms of such plans;
(j) Subject to the provisions of paragraphs 4(c) and 5(c) herein, Hood
shall be entitled to receive the relocation and retransportation
benefits set forth in paragraph 5 of the 2 May 1989 Memo Agreement
between MDC and Hood relating to his 1989 relocation from St. Louis to
Long Beach, CA (the "Relocation Benefits Agreement") together with
appropriate gross-up for income tax purposes (if Hood relocates to a
location other than St. Louis, Missouri, MDC shall only be responsible
for what such expenses would have been as if he relocated to St.
Louis);
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(k) For purposes of determining amounts due to Hood by MDC under the terms
and conditions of the Restated Shared Appreciation Note between Hood
and MDC dated January 18, 1991 in the face amount of $665,000 (the
"Note"), Hood and MDC agree to the calculations and values set forth
in Schedule A hereto regarding the amount (the "Balance") payable by
Hood to MDC. Payment of the Balance shall be satisfied from the
proceeds received by MDC from the sale and closing of the property
known and numbered as 0000 Xxxx Xxxxxxxx Xxxx, Xxxxxx Xxxxxx, XX 00000
(the "Hood Residence"), which is subject to the April 29, 1989 Second
Deed of Trust in favor of MDC securing the Note. MDC will gross up
Hood's compensation for the tax consequence thereof in accordance with
the calculations in Schedule A; and
(l) From and after January 1, 1997, MDC shall assume responsibility for
dues and assessments and shall be entitled to all proceeds from the
sale of Hood's membership in the Virginia Country Club.
4. ADDITIONAL CONTRACTUAL TERMS & GENERAL AND SPECIAL RELEASE.
(a) In consideration of the terms and provisions of this Agreement, Hood,
on behalf of himself and herself and their successors, assigns,
attorneys, representatives, and any and all other related individuals
and entities, do hereby release and discharge MDC and its successors,
assigns, attorneys, affiliated components and corporations, and their
officers, directors, agents and employees from any and all claims,
liabilities, costs and expenses (including, but not limited to,
attorney's fees), damages, actions and causes of action, of whatever
kind or nature arising out of acts or omissions occurring before the
execution of this Agreement (collectively referred to as "claims"),
including, without limitation, any statutory, civil or administrative
claim, claims arising from rights under federal, state, and local laws
prohibiting discrimination on any basis (including age discrimination
and alleged violation of the Age Discrimination in Employment Act),
and common law claims of any kind, including, but not limited to,
contract, tort, and property rights claims including, but not limited
to, breach of contract, breach of the implied covenant of good faith
and fair dealing, tortious interference with contract or current or
prospective economic advantage, fraud, deceit, libel, slander,
misrepresentation, defamation, infliction of emotional distress, and
any other common law claim of any kind. Notwithstanding anything
herein to the contrary, except as provided below in this paragraph 4
herein the Indemnification Agreement dated June 21, 1991, by and
between MDC and Hood (the "Indemnification Agreement") will survive
this Agreement.
(b) The monies and other considerations outlined in paragraphs 3(a)
through (k) herein, the sufficiencies of which are expressly
acknowledged by Hood, are accepted by him in complete satisfaction of
all claims, known or unknown, disputed or otherwise.
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(c) In consideration of the terms and provisions of this Agreement, MDC,
on behalf of itself and its successors, assigns, attorneys,
representatives and any and all other related individuals and entities
does hereby release and discharge Hood, and their respective
successors, assigns and attorneys from any and all claims,
liabilities, costs and expenses (including but not limited to
attorneys' fees), damages, actions and causes of action, of whatever
kind or nature occurring before the execution of this Agreement
(collectively referred to as "Claims"), including, without limitation,
any statutory, civil or administrative claim, claims arising from
rights under federal, state and local laws prohibiting discrimination
on any basis (including age discrimination and alleged violations of
the Age Discrimination in Employment Act), and common law claims of
any kind, including, but not limited to, contract, tort, or property
rights claims including, but not limited to, breach of contract,
breach of the implied covenant of good faith and fair dealing,
tortious interference with contract or current or prospective economic
advantage, fraud, deceit, libel, slander, misrepresentation,
defamation, infliction of emotional distress, and any other common law
claim of any kind. Notwithstanding the foregoing, neither this release
and discharge nor the Indemnification Agreement shall protect Hood
from, and Hood agrees to indemnify and hold MDC harmless from and
against any and all liability incurred by MDC for violations of
paragraph 5(c) herein or of federal or state employment discrimination
laws by Hood or by MDC as a result of the conduct or activities of
Hood while an employee of MDC, or as a result of a serious violation
by him of MDC policy. Amounts payable to Hood under paragraphs 3(e),
(f), (g), (h) and (j) hereunder may be reduced and offset by MDC by an
amount or amounts deemed reasonably appropriate by MDC in its sole
discretion to satisfy such obligations of Hood.
5. CONTINUING OBLIGATIONS.
(a) Acknowledgments by Hood. Hood hereby acknowledges the following:
(i) MDC is engaged in, among other things, the business of
researching, designing, developing, manufacturing, selling and
distributing on a worldwide basis fighter and military transport
aircraft, commercial aircraft, helicopters, missiles, satellite
launch vehicles, and certain related and other businesses (the
"Business").
(ii) In connection with the Business, MDC has expended a great deal of
time, money and effort to develop and maintain the secrecy and
confidentiality of substantial proprietary trade secret
information and other confidential business information which, if
misused or disclosed, could be very harmful to the Business and
could cause MDC to lose its competitive edge in the marketplace.
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(iii) Hood desires to become entitled to receive the benefits
contemplated by this Agreement but which MDC would not make
available to him but for his signing and agreeing to abide by the
terms of this Section 5.
(iv) Hood recognizes and acknowledges that his position with MDC
provides him with access to certain of MDC's confidential and
proprietary trade secret information and other confidential
business information.
(v) MDC compensates its employees to, among other things, develop and
preserve goodwill with its customers on MDC's behalf and business
information for MDC's ownership and use.
(vi) Hood recognizes and acknowledges that MDC in all fairness would
need certain protection in order to ensure that Hood does not
appropriate and misuse any confidential information entrusted to
him during the course of his employment with MDC, or take any
other action which could result in a loss of MDC's goodwill that
was generated on MDC's behalf and at its expense, and, more
generally, to prevent Hood from having an unfair competitive
advantage over MDC.
(b) Confidential Information.
(i) Hood agrees to keep secret and confidential, and not to use or
disclose to any third parties, any of MDC's confidential and
proprietary trade secret information or other confidential
business information concerning the Business acquired by Hood
during the course of, or in connection with, his employment with
MDC. MDC considers and treats as confidential (among other
things) its engineering, design and technical data, computer
software and programs, component sourcing and supply information,
pricing policies, operational methods, strategic plans, internal
financial information, research and development plans and
activities, and business acquisition and expansion plans, and,
except as provided herein, Hood agrees to treat such information
as secret and confidential so long as such information does not
become generally known to the public through no fault or wrongful
act of Hood.
(ii) Hood acknowledges that any and all notes, records, sketches,
computer diskettes and other documents obtained by or provided to
him, or otherwise made, produced or compiled during the course of
his employment with MDC, which contain any such confidential MDC
information, regardless of the type of medium in which it is
preserved, are the sole and exclusive property of MDC and shall
be surrendered to MDC upon his retirement.
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(c) Post-Termination Hood Liabilities. In addition to the continuing
liability of Hood provided for in paragraph 4(c) herein, Hood
agrees that, at any time prior to the vesting or forfeiture of
all restricted stock under the PARS agreements pursuant to
paragraphs 3(e), (f) or (g), or the payment of deferred
compensation pursuant to paragraph 3(h), or the relocation and
retransportation benefits under paragraph 3(j), Hood shall
forfeit all rights to (1) vesting or otherwise receiving any
restricted stock under the PARS agreements pursuant to paragraphs
3(e), (f) and (g), and (2) vesting and receipt of deferred
compensation pursuant to paragraph 3(h), and (3) the payments
otherwise due to him under paragraph 3(j) if he, on his own
behalf or on behalf of any other person, firm, corporation or
entity in the world:
(i) provides any services for any of MDC's significant
competitors, representatives, suppliers or customers or
provides any general business, technical or strategic
consulting or planning with respect to the Business for any
such companies. Hood recognizes that such companies could
benefit greatly if they were to obtain MDC's confidential
information. Hood may request permission to provide services
to or consult with any company that may be included in the
category of MDC's significant competitors, representatives,
suppliers or customers. The written denial or grant of such
a request by MDC's President and Chief Executive Officer
shall be conclusive and binding on the parties hereto. The
grant of such a request will not be unreasonably withheld,
and if the request is granted, Hood will not be held in
violation of this paragraph 5(c) for providing services to
or consulting with such company in accordance with the terms
of the request;
(ii) knowingly solicits, entices, induces, hires, employs or
seeks to employ any salesperson, engineer, technician,
manager or executive-level employee of MDC, who was employed
by MDC on the date hereof, to provide any services with
respect to the Business; or
(iii)breaches or violates paragraphs 5(b), (d) or (e) or any MDC
policy regarding confidentiality.
(d) Agreement to Refrain from Using Disparaging Comments. Hood shall
indefinitely refrain, in writing and orally, from using examples or
narrative which are derogatory of MDC, its present or former
management, its policies or practices, or any other matter bearing on
the reputation or good name of MDC.
(e) Agreement re Cooperation. Hood agrees to readily and fully cooperate
with MDC should it become necessary to develop factual bases to
protect or defend MDC's business interests.
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(f) Acknowledgment Regarding Restrictions. Hood recognizes and agrees that
the provisions of this Section 5 are reasonable and enforceable
because, among other things, (1) he is receiving compensation under
this Agreement and (2) there are many other areas in which, and
companies for which, he could work in view of his background, and this
paragraph 5 therefore does not impose any undue hardship on him. He
further recognizes and agrees that the provisions of this paragraph 5
are reasonable and enforceable in view of MDC's legitimate interests
in protecting its confidential information and customer goodwill and
the limitations contained therein on the duration and geographic scope
of, and activities covered by, such provisions.
6. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of and
shall be binding upon the successors and assigns of the parties hereto, and
each of them. In the case of MDC, this Agreement is intended to release and
inure to the benefit of MDC's affiliated components and corporations, their
divisions and shareholders, officers, directors, agents, representatives,
employees, and any and all other related individuals and entities, if any,
individually as well as in the capacity indicated.
7. INTEGRATION. This Agreement, the Indemnification Agreement (as modified
herein), paragraph 5 of the Relocation Benefits Agreement and Note
constitute a single, integrated written contract expressing the entire
agreement of the parties to this Agreement concerning its subject matters;
all other agreements between Hood and MDC are hereby terminated, and to the
extent required by such other agreements, this Agreement shall constitute a
terminating amendment to such other agreements. No covenants, agreements,
or warranties of any kind, whether express or implied in law or fact, have
been made by any party to this Agreement, except as specifically set forth
in this Agreement. All prior and contemporaneous discussions and
negotiations have been and are merged and integrated into, and are
superseded by, this Agreement.
8. MODIFICATIONS. No modification, amendment or waiver of any of the
provisions contained in this Agreement, or any future representation,
promise, or condition in connection with the subject matter of this
Agreement, shall be binding upon any party hereto unless made in writing
and signed by such party or by a duly authorized officer or agent of such
party.
9. SEVERABILITY. In the event that any provision of this Agreement should be
held to be void, voidable, unlawful or for any reason unenforceable, the
remaining portions of this Agreement shall remain in full force and effect.
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10. NON-ASSIGNMENT OF CLAIMS. Hood and MDC each represent and warrant that he
and it has not assigned or transferred any portion of the claims released
herein to any other individual, firm, corporation, or other entity, and
that no other individual, firm, corporation or other entity has any lien,
claim or interest in any of such claims, including but not limited to, any
claim or interest arising out of, related to or connected with the matters
referenced herein. Hood and MDC each covenant and agree not to bring,
induce, or assist, in any claim, action or proceeding of any kind or nature
against the other party, directly or indirectly, regarding, connected with,
arising out of, or relating to in any manner the matters released by this
Agreement and to indemnify the other party from and against all liability
of any kind relating in any way to the activities described in this
paragraph.
11. MISCELLANEOUS TERMS. Each of the parties to this Agreement further
represents, warrants, and agrees as follows:
(a) Each of the parties has had the opportunity to review this Agreement
and seek advice on the advisability of making the settlement provided
for herein and executing this Agreement, including the opportunity to
consult with the legal counsel of the party's choice. Hood
acknowledges that he has been given the opportunity to consider
settling the claims referenced herein, in accordance with the terms of
this Agreement, for twenty-one (21) days, and that he may take as much
of that time as he wants to consider the Agreement before signing it.
Hood also acknowledges that he may revoke this agreement within seven
(7) days of the date he signs it, and that if he does not revoke the
Agreement within seven (7) days, the Agreement will be effective,
binding and enforceable;
(b) Each of the parties has read the Agreement carefully, knows and
understands the contents thereof, and has made such investigation of
the facts pertaining to the settlement and this Agreement and of all
matters pertaining hereto as it deems necessary or desirable;
(c) The terms of this Agreement are contractual and result from
discussions between the parties;
(d) Each party agrees that such party will not take any action which would
interfere with the performance of this Agreement by any of the parties
hereto or which would adversely affect the status of the rights
provided for, or the claims surrendered, herein; and
(e) In entering into this Agreement and the settlement provided for
herein, the parties, and each of them, acknowledge that this Agreement
is, except as expressly provided for herein intended to be final and
binding between MDC and Hood, and, except as expressly provided for
herein, is further intended to be effective as a full and final accord
and satisfaction between them. Each party relies on the finality of
this Agreement as a material factor inducing that party's execution of
this Agreement.
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12. SETTLEMENT. The parties hereto acknowledge and covenant that this Agreement
represents a settlement of disputed rights and claims and that by entering
into this Agreement, no party hereto admits or acknowledges the existence
of any liability or wrongdoing, all such liability being expressly denied.
No provision of this Agreement, or of any related document, shall be
construed as an admission or concession of liability, of any wrongdoing or
of any preexisting liability.
13. CONFIDENTIALITY. Hood and MDC agree that the existence, fact, terms, or
provisions of or information concerning this Agreement shall remain
confidential and shall not be disclosed to the mass media or the press, or
to any person, firm, corporation, or other entity (collectively referred to
as "any person") with the sole and exclusive exceptions of: (a) as required
by any governmental agency or court, or otherwise required by law, so long
as the party being compelled to disclose provides the other party with
written notice of such requirement fifteen (15) days prior to the required
disclosure; (b) to Hood's attorney or accountant as may be required for the
rendition of professional services, so long as any such attorney or
accountant is informed of this confidentiality agreement prior to the
disclosure of information protected by it and agrees to abide by its terms;
(c) to a limited number of MDC employees tasked with implementation of the
terms of the Agreement; (d) to a Court(s) of competent jurisdiction should
either party be required to enforce any provisions hereunder or to xxx for
breach; and (e) to Hood's prospective employers on a very limited basis. In
the unlikely event that Hood is requested or required to share the
particulars of this Agreement with prospective employers, MDC shall be
notified prior to any proposed disclosure and shall narrowly tailor and
limit the scope of such communications.
14. GOVERNING LAW. This Agreement shall be construed in accordance with the
laws of the State of Missouri.
IN WITNESS WHEREOF, the parties hereto have approved and executed this
Agreement on the date(s) specified below.
/s/ Xxxxxx X. Xxxx, Xx.
------------------------------------- December 10, 1996
Xxxxxx X. Xxxx, Xx.
/s/ Xxxxxxx X. Xxxx
------------------------------------- December 10, 1996
Xxxxxxx X. Xxxx
s/s Xxxxx X. Xxxxxxxxxxx
------------------------------------- December 9, 0000
XxXxxxxxx Xxxxxxx Corporation
By: Xxxxx X. Xxxxxxxxxxx
President & CEO
SCHEDULE A
TO
SETTLEMENT AGREEMENT AND
GENERAL AND SPECIAL RELEASE
Original cost basis of home (1/10/92) $1,330,000
Current Fair Market Value (12/96) $1,037,500
Hood Proportionate Share:
Amount payable to pay Senior Deed of Trust $365,000
Amount payable to Hood
o Down Payment $300,000
o Capital Improvements $8,942
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Total $673,942
MDC Proportionate Share $363,558
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Total $1,037,500
Tax Gross-Up for depreciation of home value $292,890
