Exhibit 8
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EARLY RETIREMENT AGREEMENT AND RELEASE
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This Early Retirement Agreement and Release (the "Agreement") is entered
into by XXXX X. XXXXXXX of Ridgewood, New Jersey ("Employee"), and XXXXXXXX
XXXXX & CO., a New Jersey corporation (the "Company") (collectively, the
"Parties"), in consideration of the respective agreements and promises of the
Parties contained in this Agreement. The Parties acknowledge that the terms and
conditions of this Agreement have been agreed to voluntarily and that such terms
are intended to be final and binding.
1. Employee and the Company acknowledge that the decision that Employee
retire early from employment by the Company was by mutual agreement. The
Company agrees to so state in all future requests for employment verification
and/or reference checks concerning Employee. Employee will retire as an
employee of the Company and from all offices of the Company he may hold,
including his office as Vice President Operations, effective December 31, 1999
(the "Retirement Date"); provided, however, it is understood that Employee shall
not resign as a member of the Board of Directors of the Company. Employee
understands and agrees that, from and after the Retirement Date, he no longer is
authorized to incur any expenses, obligations or liabilities on behalf of the
Company as an employee of the Company. Upon this Agreement becoming effective
pursuant to Section 15, and in consideration for acceptance of the terms
contained in this Agreement and the release of claims contained herein, and in
addition to any salary, compensation of any kind, or benefits owing to him as of
the Retirement Date, the Company agrees to provide Employee with the additional
compensation and benefits set forth in paragraphs a. through h. of this Section
1, to which he would not otherwise be entitled (the "Separation Benefits").
a. The Company will continue to pay Employee his base salary at
the annual rate of $216,500 for twenty-three (23) months through
November 30, 2001, on a bimonthly basis.
b. From the Retirement Date until the earlier of November 30,
2001, or the date on which Employee obtains subsequent full-time
employment (the "Continuation Period"), the Company shall continue
Employee's participation in the Company medical, vision and dental
plans in which he participated immediately prior to the Retirement
Date, subject to Employee's payment of all applicable contributions or
premiums at the rate applicable to employees of the Company in effect
from time to time. Employee acknowledges that the provision of
medical and dental benefits under this paragraph b. shall be in
satisfaction of Employee's right to elect continuation coverage under
Section 4980B of the Internal Revenue Code of 1986 and Sections 601
through 608 of the Employee Retirement Income Security Act of 1974
(collectively "COBRA") in respect of the Continuation Period.
c. The Company will continue to provide Employee with a life
insurance benefit in an amount equal to one times his annual base
salary until the Retirement Date; after which, the Company will
provide retiree life insurance coverage, which is currently a $6,000
annual term life policy.
d. Employee will continue to be eligible for his targeted
annual cash bonus under the Company's 1999 Management Incentive Award
Plan (the "1999 MIAP") projected at 100% of target to be 22% of his
salary pay grade mid-point of $236,900, all in accordance with the
terms of the 1999 MIAP.
e. As of the Retirement Date, and during the Continuation
Period, Employee will participate in, and accrue benefits under, the
Company's Supplemental Executive Retirement Plan until Employee
attains the age of 55 years on November 19, 2001. Throughout the
Continuation Period, Employee shall accrue retirement benefits as if
he were a full-time employee being paid at the same rate of pay as
provided in paragraph a. of this Section 1.
f. The Parties agree that Employee was granted non-qualified
stock options on March 9, 1998 in the amount of 5,000 shares of the
Company's common stock at an exercise price of $83.14 pursuant to the
Company's 1998 Stock Incentive Plan. With respect to all such options
that have not vested prior to the Retirement Date, the Company hereby
agrees to accelerate the vesting and exercisability of such options to
the Retirement Date. In all other respects Employee's rights and
obligations under the 1998 Stock Incentive Plan shall continue
unchanged and the parties acknowledge that for purposes of the 1998
Stock Incentive Plan and any option agreement entered into thereunder,
Employee's termination of employment on the Retirement Date shall
constitute "Retirement" as defined therein.
g. The Parties agree, with respect to the Long Term Cash
Incentive Plan (the "LTCIP") award granted to Employee in the
contingent target amount of $140,000, that Employee hereafter will
remain eligible for a three-fifths (60%) pro rata share of the
contingent target amount under the LTCIP.
h. The benefits provided in paragraphs b., e. and g. of this
Section 1 shall not survive the death of Employee.
2. Notwithstanding any of the foregoing to the contrary, in the event
that a "Change in Control" of the Company (as defined in the Company's Senior
Executive Severance Protection Plan, as amended (the "Executive Severance
Plan")) occurs on or prior to November 30, 2001, the following provisions shall
apply:
a. Employee shall receive a lump-sum severance payment
determined in accordance with Section 4.2(c) of the Executive
Severance Plan,
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less any amounts previously paid to Employee under paragraph a. of
Section 1 of this Agreement.
b. Employee shall continue to participate and to accrue
benefits in the Company's Supplemental Executive Retirement Plan in
accordance with paragraph e. of Section 1 until the date of the Change
in Control, whereafter Employee shall be paid his Supplemental
Executive Retirement Plan benefits as determined in accordance with
Section 4.3 of the Supplemental Executive Retirement Plan.
3. If and when and for so long as the Company secures and maintains a
policy of directors and officers liability insurance, Employee shall have a
right to indemnification under such policy to the same extent as any other
present or former director or officer of the Company similarly situated.
4. In consideration of the payments and benefits provided hereunder and
for other good and valuable consideration, Employee agrees that for a period of
two (2) years following the Retirement Date, or from December 31, 1999 until
December 31, 2001, he will not solicit, on his behalf or on behalf of or in
conjunction with any person, company or other entity, any employees of the
Company or any of the customers or prospective customers contacted by him while
he was an employee of the Company. He further agrees not to compete with the
Company by engaging in or carrying on, full time or part time, a business
engaged in the paint and coatings industry, directly or indirectly, as an owner,
manager, operator, employee, participant or consultant, in any location or
facility located within the U.S. or abroad for a period of two (2) years
following the Retirement Date, or from December 31, 1999 until December 31,
2001.
5. It is mutually agreed that the Separation Benefits provided to
Employee under paragraphs a. through h. of Section 1 and under Section 2 of this
Agreement exceed what he is already entitled to under the Company's plans,
policies and practices.
6. All amounts payable and benefits provided under this Agreement shall
be paid or provided subject to the withholding of any taxes or other amounts
required by law to be withheld.
7. Employee represents that to the best of his knowledge he has returned
all property of any kind belonging to the Company; in the event, however, that
he has not done so, he agrees to return promptly any such remaining items to the
Company.
8. In consideration for the Separation Benefits provided to him under
paragraphs a. through h. of Section 1 and under Section 2 of this Agreement, and
except as regards the obligations of the Company set forth herein, Employee
agrees to release and forever discharge the Company, its subsidiaries,
affiliates, directors, officers, employees, agents, successors, and assigns
(collectively referred to as the "Releasee") from any and all obligations,
liabilities, damages, costs, claims, complaints, charges, or causes of actions
in law or equity (collectively "Claims") that Employee or his heirs,
administrators, successors, or assigns may now have or may ever have against the
Releasee whether accrued, absolute, contingent, unliquidated or
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otherwise, and whether known or unknown on the date hereof, and which have or
may have arisen out of any transaction or state of facts existing prior to the
date of execution of this Agreement, including but not limited to Claims in any
way related to Employee's employment with the Company or the termination of that
employment, and Claims based on federal, state, or local law or regulation or
common law, including but not limited to claims in any way related to the Age
Discrimination in Employment Act, Title VII of the Civil Rights Act of 1964, the
Civil Rights Act of 1866, the Civil Rights Act of 1991, the Equal Pay Act, the
Fair Labor Standards Act, the Americans with Disabilities Act, the Employee
Retirement Income Security Act, all applicable federal, state and local labor
and employment laws (including all laws concerning unlawful and unfair labor and
employment practices), breach of contract, wrongful discharge, defamation or
intentional infliction of emotional distress. This Section 8 shall not affect
Employee's right to retirement benefits accrued as of the Retirement Date under
any retirement plan qualified under the provisions of the Employee Retirement
Income Security Act of 1974, as amended.
9. Employee represents and agrees, with respect to any transaction or
state of facts existing prior to the date of execution of this Agreement, that
he has not filed any complaints, charges or lawsuits against the Releasee with
any government agency or any court.
10. Employee represents and agrees that, except for an announcement that
he has taken early retirement (which the Parties have mutually agreed upon as is
attached as an appendix hereto), he has and will keep the terms, amount and
existence of this Agreement completely confidential and that Employee has not
disclosed and will not disclose voluntarily any information concerning this
Agreement to anyone other than his immediate family, attorney and accountant,
who have been and will be informed of and bound by this confidentiality clause.
The Company agrees that it will keep the terms, amount and existence of this
Agreement confidential and will not disclose any information concerning this
Agreement to anyone other than as may be important in the ordinary course of its
businesses or as required under law or upon the advice of legal counsel. Except
for litigation arising out of the breach or enforcement of this Agreement, this
Agreement shall not be admissible in any legal proceeding.
11. Employee represents and agrees that he has not made or published and
will not make or publish any negative or disparaging statements, comments or
remarks regarding the Company or its subsidiaries, affiliates, directors,
officers or employees. Employee further agrees that he will not discourage, or
attempt to discourage, any person, firm, corporation, or business entity from
doing business with the Company. This Section 11 shall not be construed as
affecting any provision of Section 4.
12. Employee represents and agrees that he has not appropriated for his
own use, has not disclosed, and will not appropriate for his own use, disclose
to any third party, or authorize anyone else to disclose, unless authorized by
the Company in writing, any secret, confidential, proprietary or financial
information concerning the operations, future plans, methods of doing business,
or financial condition of the Company or its subsidiaries or affiliates, any
customer lists, customer files or other information relating to the customers of
the Company or its subsidiaries or affiliates, or any lists of the Company's
shareholders that he obtained as a result
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of his employment with the Company and which is not otherwise publicly available
(unless it became publicly available in violation of this Section 12 or any
other agreement of Employee).
13. As a further material inducement to the Company to enter into this
Agreement, Employee agrees that in the event Employee materially breaches this
Agreement or it is discovered that any material representation made herein was
false when made, the Company may cease all further payment or provision of the
Separation Benefits provided for in paragraphs a. through h. of Section 1 of
this Agreement and the payments described in Section 2 of this Agreement and
Employee shall immediately return to the Company as liquidated damages any
payments made to Employee under paragraph a. of Section 1 and paragraph a. of
Section 2 of this Agreement.
14. Employee understands and acknowledges that he has been given a
period of twenty-one (21) days to review and consider this Agreement before
signing it. Employee further understands that he may use as much of this
twenty-one (21) day period as he wishes prior to signing.
15. Employee may revoke this Agreement within seven (7) days of signing
it and this Agreement shall not be effective until the period during which
Employee may revoke this Agreement has expired without Employee having revoked
this Agreement. Revocation shall be made by sending a written notice of
revocation to:
Xxxx Xxxxx
President
Xxxxxxxx Xxxxx & Co.
00 Xxxxxxxx Xxxxx Xxxx
Xxxxxxxx, Xxx Xxxxxx 00000.
For this revocation to be effective, written notice must be received no later
than the close of business of the seventh day after Employee signs this
Agreement. If Employee revokes this Agreement, it shall not be effective or
enforceable, and Employee will not receive any of the Separation Benefits
described in Section 1 and Section 2 of this Agreement.
16. All notices and communications provided for in this Agreement (other
than the notice of revocation provided for in Section 15) shall be in writing
and shall be deemed to have been duly given when personally delivered or sent by
certified mail, return receipt requested, postage prepaid; if to Employee,
addressed to him at his most recent address as provided to the Company in
writing, and if to the Company, addressed to Xxxx Xxxxx, President, at Xxxxxxxx
Xxxxx & Co., 00 Xxxxxxxx Xxxxx Xxxx, Xxxxxxxx, Xxx Xxxxxx 00000, or to such
other address as any party may have furnished to any other party in accordance
herewith. All notices and communications (other than the notice of revocation
provided for in Section 15) shall be deemed to have been received on the date of
delivery thereof or on the third business day after the mailing thereof, except
that notice of change of address shall be effective only upon receipt.
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17. Employee acknowledges and agrees that he freely and voluntarily
entered into this Agreement, that he has been encouraged to consult an attorney
before signing this Agreement, that he had an opportunity to review this
Agreement with an attorney of his choice, and has had sufficient time to do so.
Employee further acknowledges and agrees that he fully understands the terms of
this Agreement.
18. The Parties acknowledge and agree that this Agreement constitutes
the complete agreement between them and that no oral modification of this
Agreement is permissible. The Parties further acknowledge and agree that this
Agreement and the terms contained herein, except as otherwise provided in
paragraphs b. through g. of Section 1 and in Section 2, supersede all previous
contracts, agreements and plans between the Parties including, without
limitation, the Executive Severance Plan, with respect to the subject matter
hereof, and that all previous contracts, agreements and plans between the
Parties shall become null and void upon execution of this Agreement.
19. Nothing in this Agreement is to be understood as an admission by
the Company of any liability on its part under any federal, state, or local law
or regulation or common law.
20. This Agreement shall be binding upon any and all successors and
assigns of Employee and the Company.
21. In the event that any provision in this Agreement is found to be void
as against public policy, illegal or otherwise unenforceable, the remaining
provisions of the Agreement shall in no way be affected or impaired thereby.
22. Except for issues or matters as to which federal law is applicable,
this Agreement shall be governed by and construed and enforced in accordance
with the laws of the State of New Jersey without giving effect to the conflicts
of law principles thereof.
Dated: December 7, 1999
/s/ Xxxxxxx X. Xxxx /s/ Xxxx X. Xxxxxxx
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Witness Xxxx X. Xxxxxxx
XXXXXXXX XXXXX & CO.
By: /s/ Xxxxxxx Xxxx
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Name: Xxxxxxx Xxxx
Title: Chairman & Chief
Executive Officer
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