Exhibit 10.2
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CONSULTANCY AGREEMENT,
AMENDMENT TO EMPLOYMENT AGREEMENT
AND
AMENDMENT TO RESTRICTED STOCK AGREEMENTS
This Agreement is entered into as of the 11th day of November, 1996, by and
between Xxxxxxxx Corporation (the "Company"), an Iowa corporation, and Xxxx X.
Xxxx ("Xxxx").
WHEREAS, Xxxx is currently employed by the Company as its Chairman and Chief
Executive Officer pursuant to an Employment Contract dated July 1, 1992 (the
"Employment Contract"); and
WHEREAS, the Company and Xxxx desire to extend the term of Xxxx'x employment
with the Company, to provide for Xxxx'x services as consultant following the
termination of his employment with the Company.
NOW, THEREFORE, IT IS HEREBY AGREED by and between the Company and Xxxx as
follows:
1. EMPLOYMENT. Paragraph 1 of the Employment Contract is amended effective
January 1, 1997, by deleting the first sentence and inserting the following in
its place:
The Company hereby agrees to employ Xxxx through December 31, 1997, or
until such date after October 31, 1997, and before December 31, 1997, as
Xxxx shall specify in writing before October 31, 1997, that his employment
with Company shall be terminated, but in any event Xxxx shall remain the
Chairman of the Board of Directors through December 31, 1997.
2. COMPENSATION. Paragraph 2 of the Employment Contract is amended by adding
the following sentence at the end:
Xxxx and Company agree that Xxxx'x annual salary base rate shall be no less
than $500,000 for the period from July 1, 1997, through December 31, 1997
(or such earlier date as provided in Paragraph 1 above).
3. OTHER EMPLOYMENT RIGHTS. Paragraph 10 of the Employment Contract is
amended by adding the following sentence at the end:
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Notwithstanding anything to the contrary provided in this Agreement, Xxxx
shall not be eligible to participate in, and the Company shall have no
obligation to provide any benefits to Xxxx under the Company's Management
Incentive Plan for the period following June 30, 1997 (or any portion
thereof that Xxxx remains an employee of Company).
4. RESTRICTED STOCK AGREEMENTS.
(a) Paragraph 3 of the Restricted Stock Agreement dated September 22,
1992, by and between Company and Xxxx with respect to 20,000 shares of
restricted Company common stock (post the March 16, 1995, stock split)
is amended by deleting the date "October 31, 1997," and inserting in
its place, "the effective date of Employee's retirement from
employment with the Company under the then established rules of the
Company's tax-qualified retirement plan, but in any event no later
than September 21, 2002."
(b) Paragraph 3 of the Restricted Stock Agreement dated September 22,
1992, by and between Company and Xxxx with respect to 54,862 shares of
restricted Company common stock (post the March 16, 1995, stock split)
is amended by deleting the date "October 31, 1997," and inserting in
its place, "the effective date of Employee's retirement from
employment with the Company under the then established rules of the
Company's tax-qualified retirement plan, but in any event no later
than September 21, 2002."
5. ELECTION AS DIRECTOR. At the Annual Meeting of Stockholders held on
November 11, 1996, Xxxx was re-elected a Director for a term to expire in 1999.
The Company agrees to nominate him for re-election for a subsequent three-year
term at the Annual Meeting of Stockholders in 1999, and Xxxx agrees that he
will serve in such capacity, if elected.
6. ENGAGEMENT AS CONSULTANT. The Company hereby agrees to retain Xxxx as a
consultant following the termination of his employment through December 31,
2000, but subject to termination by either party at any time upon 90 days'
advance written notice. Xxxx hereby accepts such employment as a consultant to
the Company and agrees that during the period he is so retained he will render
such consulting services to the Company from time to time as the Chief
Executive Officer or the Board of Directors of the Company may reasonably
request. In order to be in a position to render such consulting services and
as a part of his duties as a member of the Board of Directors, Xxxx shall keep
himself reasonably informed as to the business and affairs of the Company.
Xxxx shall be available for conferences at times and places to be designated by
the Company during the term of his engagement as a consultant; it being
understood, however, that Xxxx shall not be required to be available for
conferences on less than three (3) calendar days' notice or at times when Xxxx
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has other regularly scheduled commitments, and that any one series of
conferences shall not require Xxxx'x attendance for more than five (5)
consecutive days. In addition, Xxxx shall be ready to furnish consultation and
advice by telephone, telegram or correspondence when reasonably requested.
Xxxx shall keep the Company informed from time to time of his regularly
scheduled commitments and where he can be reached for such consultation and
advice. Notwithstanding the foregoing, Xxxx, upon ten (10) days' prior notice
to the Company, may select any period up to two (2) consecutive calendar months
in any calendar year in which he may not be obligated to render the consulting
services contemplated hereby.
7. COMPENSATION FOR SERVICES AS CONSULTANT. In consideration of the agreement
of Xxxx to be ready to furnish consulting services and of the consulting
services to be rendered by Xxxx pursuant to Paragraph 6, the Company agrees to
pay Xxxx at a rate commensurate with the consulting services requested of him
from time to time, but in no event at a rate of less than $150,000 per year.
The compensation payable Xxxx in accordance with this Paragraph 7 shall be paid
from time to time at regular intervals. In addition, Xxxx will be reimbursed
for all legitimate business expenses incurred in connection with the provision
of consulting services to the Company. During his engagement as a consultant,
Xxxx shall be entitled to the perquisites existing during his prior employment,
including same or equivalent club memberships reimbursement, company automobile
in accordance with Company policy, office space and support services, use of
the Company aircraft on Company business, use of Company accommodations on
Company business, and tax and financial planning from KPMG Peat Marwick.
8. HEALTH COVERAGE AFTER TERMINATION OF EMPLOYMENT.
(a) As additional consideration for the consultancy services to be
provided by Xxxx under this Agreement, the Company agrees to provide
at no cost to Xxxx (other than any applicable income taxes) the
following benefits: (i) Medicare Supplement coverage for Xxxx that is
the same coverage as provided for other retirees of the Company; (ii)
Xxxx'x spouse will be covered by an individual Medicare Supplement
plan; (iii) Xxxx and his spouse will receive the same dental and
prescription drug coverage as is provided to Company employees; and
(iv) participation by Xxxx and his spouse in the Company's officer
medical reimbursement program.
(b) Following the termination of the consultancy under this Agreement,
Xxxx will be eligible to continue the Medicare Supplement coverage at
the cost applicable to a retiree from employment with the Company with
the same number of years of continuous active service as an employee
as Xxxx. Further, Medicare Supplement coverage for Xxxx'x spouse,
dental coverage, prescription drug coverage and participation in the
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Company's officer medical reimbursement program will be terminated.
At her election, the Medicare Supplement coverage may be continued by
Xxxx'x spouse under an individual coverage plan with the premiums to
be invoiced directly to Xxxx'x spouse.
9. RENEWAL OF CONSULTANCY. The term of Xxxx'x consultancy as provided in
Paragraph 6 above may be renewed for up to two (2) subsequent one-year (1)
terms by mutual agreement of the parties.
10. NON-COMPETITION. Paragraph 6(a) of the Employment Contract is deleted and
the following is inserted in its place:
Xxxx agrees that during the period of his employment by the Company and
during the period that he is a consultant to the Company and for a period
of three (3) years following the termination of his consultancy, he shall
not consult with, accept employment with, become or invest in, or in any
way aid or abet any proprietorship, partnership, corporation or other
business entity that is a competitor of the Company in the United States
of America ("Prohibited Action"), except with the prior written consent of
the Company.
11. INDEPENDENT CONTRACTOR. The parties agree that while acting as a
consultant, Xxxx shall at all times be an independent contractor and that
nothing herein shall be construed to cause Xxxx to be an employee of the
Company.
12. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the benefit of and
shall be binding upon the successors and assigns of the Company. Xxxx may not
assign this Agreement, in whole or in part.
13. GOVERNING LAW. This Agreement and the validity of its provisions shall be
construed according to the laws of the State of Iowa.
14. ENTIRE AGREEMENT. This Agreement contains all the understandings and
representations between the parties with respect to the subject of this
Agreement.
15. AMENDMENT OR MODIFICATION; WAIVER. No provision of this Agreement may be
amended or modified unless such amendment or modification is agreed to in
writing. No provision to be performed by a party may be waived by the other
except by in writing. No waiver by either party shall be deemed a waiver of a
similar or dissimilar provision.
16. HEADING. Headings of the sections of this Agreement are intended solely
for convenience and no provision of this Agreement is to be construed by
reference to the title of any section.
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IN WITNESS WHEREOF, pursuant to authorization of its Board of Directors, the
Company has caused this Agreement to be signed and Xxxx has set his hand as of
the 11th day of November, 1996.
XXXXXXXX CORPORATION XXXX X. XXXX
By: /s/ E. T. Xxxxxxxx III /s/ Xxxx X. Xxxx
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E. T. Xxxxxxxx III
Chairman of the Executive Committee
of the Board of Directors
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