Exhibit 10.1
THIS
AMENDMENT to the Employment Agreement (the “Agreement”) as of January 1, 2000,
by and between Harley-Davidson Financial Services, Inc., a Delaware corporation (the
“Company”), and Xxxxx X. Xxxxxxx (the “Executive”) is made as of the
1st day of June, 2006.
WHEREAS,
the Company and the Executive desire to amend the Agreement in certain respects in
connection with the planned termination of the Executive’s employment on August 1,
2006 (the “Termination Date”).
NOW,
THEREFORE, in consideration of the premises and promises contained herein, the parties
agree to amend the Agreement in the following respects:
| 1. |
Termination
of Employment. Effective as of the Termination Date, the Executive
voluntarily resigns her employment with and as an officer and director of the
Company. Notwithstanding Section 12.1 of the Agreement, the Agreement shall
expire on the Termination Date unless earlier terminated in accordance with its
terms. Upon the Executive’s acceptance of this Amendment, the Company
and/or Harley-Davidson, Inc. may issue a press release, jointly approved by the
Executive and the Company, announcing the Executive’s resignation as of
the Termination Date. |
| 2. |
Duties.
Without limiting the Executive’s obligations under Section 2 of the
Agreement, through the Termination Date, the Executive shall assist the Company
in its search for a successor as directed by the CEO of Harley-Davidson, Inc. |
| 3. |
Termination.
If the Executive remains employed through the Termination Date, then the
termination of the Executive’s employment as of the Termination Date shall
be treated as a termination of the Agreement by the Company pursuant to Section
12.4 of the Agreement, effective on the Termination Date, and subject to the
Executive’s compliance with paragraph 7 of this Amendment. As a result of
such termination, subject to the Executive’s compliance with paragraph 7
of this Amendment, the Executive shall be entitled to the payments and benefits
that Section 12.4 of the Agreement contemplates except that (a) the Company
shall not have any obligation to maintain any split-dollar life insurance on
the Executive’s life or to pay any premiums due on any split-dollar life
insurance on the Executive’s life, (b) the Executive acknowledges that, in
respect of Termination Payments, except for vested benefits of the Executive
under the deferred compensation plan of Harley-Davidson, Inc. in which the
Executive participates, the Company’s benefit, insurance, retirement or
other plans are only those of Harley-Davidson Financial Services, Inc. and
consist only of medical and dental plans, a 401(k) plan and any deferred
compensation plan and (c) the Bonus for 2006, the year in which the Executive’s
termination occurs, prorated as of the Termination Date, which is included in
the Termination Payments, shall be computed at 70% of current base salary, with
a calculated target rate of 100%, and shall be prorated for seven (7) months. |
| 4. |
Stock
Awards. The Executive acknowledges that, for purposes of outstanding awards
to the Executive under the Harley-Davidson, Inc. 1995 Stock Option Plan and the
Harley-Davidson, Inc. 2004 Incentive Stock Plan (the “Stock Awards”),
if the Executive remains employed through the Termination Date, then the
termination of the Executive’s employment as of the Termination Date will
constitute a cessation of the Executive’s employment otherwise than by
reason of Retirement (as such term is used in such plans), Disability (as such
term is used in such plans) or death. The Executive understands she can
exercise only those stock options that are vested as of the Termination Date,
and that she may exercise them only within 90 days after the Termination Date
and subject to window clearance. |
| 5. |
No
Disparaging Remarks. In addition to her other obligations under the
Agreement, prior to and following the Termination Date, the Executive will not
make any negative, disparaging, denigrating or derogatory statements to anyone,
either orally or in writing and whether true or not, in any form (including
without limitation by way of news media, the expression to news media of
personal views, opinions or judgments or communications over the Internet)
concerning any Company Parties (as defined below) or their business operations,
policies or practices. In consideration, the Company shall ensure that none of
Xxx Xxxxxxxx, Xxxx Xxxxxxxxx, Xxx Xxxxxxxxxx, Xxxxx Xxxx, Xxx Xxxxxxxxxx, Xxx
Xxxxx, Xxxx Xxxxx, Xxxxxxxx Xxxxxx, Xxxxx Xxxxxxx, Xxxxxx Xxxxx, Xxxxxx
Xxxxxxx, Xxxx Van Genderen or Xxxxx X. Xxxxxx will make any negative,
disparaging, denigrating or derogatory statements to anyone, either orally or
in writing and whether true or not, in any form (including without limitation
by way of news media, the expression to news media of personal views, opinions
or judgments or communications over the Internet) concerning the Executive or
her business practices. Negative, disparaging, denigrating or derogatory
statements as used in this paragraph shall include, but not be limited to, any
statements that may reasonably be considered to be detrimental to any of the
Company Parties, or the Executive, as the case may be, to their business
operations or to their business, professional or personal reputations. As used
herein, “Company Parties” means the Company, Harley-Davidson, Inc.,
any of their respective subsidiaries and their past, present and future
employees, directors, officers, agents, insurers, successors, assigns,
shareholders and any other representatives of any kind. |
| 6. |
Cooperation
and Indemnification. In addition to her other obligations under the
Agreement, prior to and following the Termination Date, the Executive will
cooperate with the Company and its legal and other advisors in connection with
any litigation, claims, investigations, administrative or other proceedings
involving any Company Parties with respect to matters occurring while the
Executive was employed by the Company. The Company reaffirms its indemnity
obligation to the Executive arising under the by-laws of the Company or
Harley-Davidson, Inc. for any matter that has arisen, arises or may arise in
the future in connection with the Executive’s employment with the Company,
subject to the terms (including the exceptions) of such indemnity obligations,
including without limitation the lawsuits that Harley-Davidson, Inc. disclosed
under the heading “Shareholder Lawsuits” in Note 8 to the
Consolidated Financial Statements included in its Quarterly Report on Form 10-Q
for the quarter ended March 26, 2006. |
2
| 7. |
Release.
The Executive shall be entitled to the payments and benefits that Section 12.4
of the Agreement contemplates only if, no sooner than the Termination Date, she
executes and delivers to the Company a standard release under which she
releases the Company and the Company Parties from all claims, charges, demands
and liabilities of any kind arising before or through the Termination Date. The
release shall be in the form attached hereto as Exhibit A. |
| 8. |
Effect
of Termination. For the avoidance of doubt, the provisions of this
Amendment shall survive the termination of the Agreement on the Termination
Date and shall remain in full force and effect. |
| 9. |
Effect
of Breach. If the Executive breaches any of the Executive’s promises
or obligations contained in the Agreement, including but not limited to her
obligations contained in Sections 9 and 10 of the Agreement, then the Company
has the right to immediately stop delivering the payments and benefits
described in paragraph 3. If the Company exercises its rights to stop
delivering the payments and benefits described in paragraph 3, then the
Executive will continue to be obligated to comply with all her obligations
contained in the Agreement, including but not limited to the obligations
contained in Sections 9 and 10 of the Agreement. Also, if the Company exercises
its rights to stop delivering the payments and benefits described in paragraph
3, then the Company will also have the right to pursue all additional rights it
has against the Executive pursuant to the Agreement, including but not limited
to all the rights described in Section 10.3 and Section 11 of the Agreement, as
well as any and all other legal rights it may have against the Executive for
breaching any of her obligations in the Agreement. |
| 10. |
Modification
of Non-Solicitation Covenant. Section 10.2(b) of the Agreement is amended
to read in its entirety as follows: |
| |
“(b)
solicit for employment or employ or become employed by any past,
present or future employee of the Company, or request, induce or
advise any employee to leave the employ of the Company, except that
(i) the Executive may solicit for employment and employ the Executive’s
current administrative assistant, Xxxxx Xxxxxxxxx, and (ii) the
Executive may solicit for employment and employ any past employee of
the Company whose employment with the Company ceased more than one
(1) year prior to the Termination Date; or” |
| 11. |
Arbitration.
Notwithstanding, but not negating, the third sentence of Section 13 of the
Agreement, if any arbitrator determines that the Executive has violated any of
her obligations contained in the Agreement, then the Company shall be entitled
to recover from the Executive, in addition to its damages, all costs and
expenses incurred in its enforcement efforts, including reasonable attorneys’ fees. |
| 12. |
Applicable
Law. This Amendment shall be governed by and construed in accordance with
the internal substantive laws of the State of Illinois, and the parties hereby
consent to the jurisdiction of Illinois courts over all matters relating to
this Amendment. |
3
| 13. |
Entire
Agreement. The Agreement, as amended by this Amendment, contains the entire
agreement of the parties in regard to the subject matter thereof, supersedes
all prior discussions, agreements and understandings of every kind between the
parties in regard to the subject matter thereof and may be changed only by a
written document signed by the party against whom enforcement of any waiver,
change, modification, extension or discharge is sought. Except as amended
hereby, the Agreement remains in full force and effect. |
| 14. |
Severability.
If any provision of this Amendment shall be prohibited by or invalid under
applicable law, or otherwise determined to be unenforceable, such provision
shall be ineffective to the extent of such prohibition or invalidity without
invalidating the remainder of such provision or the remaining provisions of
this Amendment. The headings in this Amendment are for convenience of reference
only and shall not limit or otherwise affect the meaning hereof. Capitalized
terms used but not defined in this Amendment are used as defined in the
Agreement. |
| 15. |
Continuing
Effect. The Agreement is affirmed, ratified and continued, as amended by
this Amendment. |
IN
WITNESS WHEREOF, the parties have caused this Amendment to be executed as of the date
first above written.
| EXECUTIVE: |
COMPANY: |
|
HARLEY-DAVIDSON FINANCIAL SERVICES, INC. |
/s/ Xxxxx X. Xxxxxxx |
By: /s/ Xxxxx X. Xxxxxx |
| Xxxxx X. Xxxxxxx |
Xxxxx X. Xxxxxx |
4
Exhibit A
RELEASE AGREEMENT
This
Release Agreement (the “Agreement”), by and between Harley-Davidson Financial
Services, Inc., a Delaware corporation (the “Company”), and Xxxxx X. Xxxxxxx
(the “Executive”) is made as of the ____ day of August, 2006. Executive enters
into this Agreement on behalf of herself, her spouse, heirs, successors, assigns,
executors, and representatives of any kind, if any, pursuant to an Employment Agreement
(the “Employment Agreement”) as of January 1, 2000, by and between the Company
and Executive, as amended by the Amendment To Employment Agreement between the parties
made as of June 1, 2006 (the “Amendment”).
| 1. |
In
consideration for the Company’s willingness to enter into the Amendment,
and to deliver the Executive the various payments and benefits that Section
12.4 of the Employment Agreement contemplates by virtue of the Amendment, which
Executive acknowledges are greater than Executive is entitled to under the
Company’s normal policies and procedures, Executive releases the Company,
its parent Harley-Davidson, Inc., its subsidiaries, related and affiliated
companies, and each of their past and present employees, directors, officers,
successors, executors, assigns and representatives (referred to in this
Agreement as “Released Parties”) from all claims, charges, demands,
and liabilities of any kind arising before or through the date of this
Agreement. This release includes, but is not limited to, all claims, charges,
demands and liabilities arising out of or in connection with Executive’s
employment with the Company, the Transition Agreement between the Executive and
Harley-Davidson, Inc., any other contract between the Executive and the Company
or the termination of the Executive’s employment. Executive also releases
and waives any claim or right to further compensation, benefits, reinstatement
of employment, damages, penalties, attorneys’ fees, costs or expenses of
any kind from the Company or any of the other Released Parties. Notwithstanding
the foregoing, nothing in this release shall affect any rights, if any,
Executive may have (1) under the Employment Agreement (including the
Amendment), (2) to any vested benefits under any funded 401(k) plan of the
Company and any welfare benefit plan of the Company and to any vested benefits
under any deferred compensation plan of Harley-Davidson, Inc. in which the
Executive participates, (3) to so-called “COBRA” health insurance
benefits, (4) to any vested benefits under outstanding awards to the Executive
under the Harley-Davidson, Inc. 1995 Stock Option Plan and the Harley-Davidson,
Inc. 2004 Incentive Stock Plan (the “Stock Awards”) or (5) in respect
of any indemnity obligation of the Company arising under the by-laws of the
Company or Harley-Davidson, Inc. for any matter that has arisen, arises or may
arise in the future in connection with the Executive’s employment with the
Company, subject to the terms (including the exceptions) of such indemnity
obligations, including without limitation the lawsuits that Harley-Davidson,
Inc. disclosed under the heading “Shareholder Lawsuits” in Note 8 to
the Consolidated Financial Statements included in its Quarterly Report on Form
10-Q for the quarter ended March 26, 2006. |
| 2. |
Executive
fully understands and acknowledges that the general release contained in
paragraph 1 above includes a release of any rights or claims Executive may have
under the Age Discrimination in Employment Act; Title VII of the Civil Rights
Act of 1964; the Americans with Disabilities Act; the Federal Family and
Medical Leave Act; the Equal Pay Act; the Illinois Human Rights Act; Executive
Order 11246; the Rehabilitation Act of 1973; the Civil Rights Act of 1991; the
Employee Retirement Income Security Act of 1974; and any other federal, state
or local laws or regulations of any kind. The general release contained in this
Agreement also includes, but is not limited to, a release by Executive of any
claims for wrongful termination or any tort, breach of contract or invasion of
privacy claims. The release covers both claims that Executive knows about and
those she may not know about. |
| 3. |
Executive
states that she has not filed or joined in any complaints, charges, lawsuits or
proceedings of any kind against the Company or any of the other Released
Parties. |
| 4. |
Executive
promises never to file or join in any complaints or proceedings of any kind
asserting any claims that are released in this Agreement. If Executive breaks
this promise and files or voluntarily joins in any complaint or proceeding
based on any claim that Executive has released, the Company reserves the right
to cease any remaining payments and benefits to which she may otherwise be
entitled pursuant to the Employment Agreement or otherwise. In that event,
Executive also agrees that she will reimburse the Company for any pay already
paid to Executive pursuant to the Section 12.4 of Employment Agreement;
provided, however, this does not restrict Executive from proceeding against
Company in the event the Company breaches this Agreement and, in such event,
the Executive shall not be responsible for the Company’s or any other
Released Parties’ costs of defense. This Paragraph does not apply to a
charge filed with or an investigation or proceeding conducted by the EEOC or
any EEOC referral agency, but Executive understands that she is not eligible
for or entitled to any monetary relief, damages, reinstatement of employment or
any remedy whatsoever as a result of any such agency’s investigation or
proceeding. |
| 5. |
By
making this Agreement, the Company does not admit any liability to Executive
and expressly denies any such liability. |
| 6. |
Executive
agrees to return all tangible Company property to the Company including all
documents, reports, credit cards, computer equipment, phones, identification
cards and pagers, if any are still in her possession. Executive agrees that any
money which she owes Company as the result of credit card charges, personal
advances, or other similar items, if not paid, will be deducted from her
paycheck or from any other payments to be made to her. Executive further
represents that she has returned all other property and information belonging
to the Company, including, but not limited to, all Executive information,
personnel information (including but not limited to all files, investigation
and meeting notes, employment statistics and all other information collected in
connection with her performance of duties for the Company, but not including
copies of any information contained in Executive’s personnel file to which
Executive is legally entitled), confidential business information, technical
and product information, pricing information and customer information such as
customer lists and customer identification information, brochures,
specifications, quotations, marketing strategies, inventory records, sales
records, or other similar material; provided that the foregoing information,
brochures, etc., shall not include information that is available to the public.
Executive acknowledges that she has not kept any copies, nor made or retained
any abstracts or notes, of such information to be returned hereunder. Executive
further reaffirms that she will keep completely confidential and share with no
other person, employer or entity, any information she acquired at Company
relating to any of the confidential matters described in this paragraph.
Executive further agrees that she will comply with all terms of the Employee
Commitment agreement, as well as the Employment Agreement (including the
Amendment). In the event that Executive breaks this promise, the Company
reserves the right to cease any remaining payments and benefits. |
2
| 7. |
Executive
and the Company agree that publicly neither party will make any comments in
relation to the termination of her employment that are in any way inconsistent
with the press release published by the Company. For this purpose, public
comments by the Company include only those reflected in a press release of the
Company and those made on behalf of the Company by the persons identified in
Paragraph 5 of the Amendment. All requests for a job reference from the Company
should be addressed to: |
| |
Xxxxxx
Xxxxx, Vice President
Human Resources
Harley-Davidson Motor Company
0000 X. Xxxxxx Xxxxxx
Xxxxxxxxx, XX 00000
000-000-0000 |
| 8. |
It
is agreed and understood that Executive shall be solely responsible for any
individual tax liability imposed on Executive for the payments made pursuant to
the Employment Agreement, except for any Company statutory tax withholding
obligations. |
| 9. |
This
is the whole release agreement between Executive and Company and the other
Released Parties. No promises or oral or written statements have been made to
Executive other than those in this Agreement. If any portion of this Agreement
is found to be unenforceable, then Executive, Company and the other Released
Parties desire that all other portions that can be separated from it or
appropriately limited in scope, shall remain fully valid and enforceable. |
| 10. |
This
Agreement may not and shall not be deemed or construed to have been modified,
amended, rescinded, cancelled or waived in whole or in part except by a written
instrument signed by all parties. |
| 11. |
Executive
shall have twenty-one (21) days to consider whether to sign this release
Agreement. Executive acknowledges that the Company encouraged her to seek
advice regarding this release Agreement from legal counsel of her choosing, and
that Executive may revoke this release Agreement by delivering a written notice
of revocation within seven (7) days of signing this release Agreement to the
person and place identified in paragraph 10 above. The effective date of the
Agreement will be the eighth day after Executive signs it if she does not
revoke it. |
3
EXECUTIVE ACKNOWLEDGES THAT SHE HAS
READ THIS AGREEMENT, SHE UNDERSTANDS IT, SHE KNOWS IT CONTAINS A GENERAL RELEASE OF ALL
KNOWN AND UNKNOWN CLAIMS, AND SHE IS VOLUNTARILY ENTERING INTO IT.
| __________________________________________ |
_____________________________ |
| XXXXX X. XXXXXXX |
Date |
WITNESSED: |
__________________________________________ |
_____________________________ |
| Witness’ Name |
Date |
HARLEY-DAVIDSON FINANCIAL SERVICES, INC |
By:_______________________________________ |
_____________________________ |
| |
Date |
Title:_____________________________________ |
4
