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EXHIBIT 10
AGREEMENT AND MUTUAL RELEASE
THIS AGREEMENT AND MUTUAL RELEASE made this 21 day of July,
2000, by and between SONOCO PRODUCTS COMPANY, a South Carolina Corporation
("Sonoco" or "the Company"), doing business in the State of South Carolina and
XXXXX X. XXXXXXXX ("Executive").
W I T N E S S E T H:
WHEREAS, Executive has elected to take early retirement from Sonoco and
resign from the Board of Director's (the "Board") of Sonoco effective at 11:00
a.m. Eastern Daylight Time on July 21, 2000 (the "Effective Date"), and he and
Sonoco have agreed to end his employment relationship and service as a member of
the Board as of such date.
NOW, THEREFORE, in consideration of the mutual covenants stated herein
and other good and valuable consideration, the sufficiency of which is hereby
acknowledged, the parties agree as follows:
1. SERP BENEFIT. Executive shall be entitled to begin receiving his
retirement benefits from Sonoco's Supplemental Executive Retirement Plan
("SERP"), commencing on August 1, 2002. In addition to the retirement benefits
that he is entitled to receive pursuant to such Plan, Sonoco agrees to
supplement Executive's SERP by paying him a monthly sum of money to reflect what
Sonoco would have paid him in retirement benefits if he had continued to be
employed until July 31, 2002, based on final average earnings calculated on his
continued employment through July 21, 2000. Starting August 1, 2002, Executive's
annual SERP payment, prior to offsets for Primary Social Security and the Sonoco
Retirement Plan, will be $536,559.
2. SALARY CONTINUATION. Executive shall receive as salary continuation
the sum of $116,333.00 per month for the 24 months following the Effective Date
subject to all applicable withholding and payroll taxes. Notwithstanding the
above, all amounts to be paid under this Section 2 shall be reduced and offset
by all compensation income received or receivable by the Executive pursuant to
full-time or substantially full-time employment ("Qualifying Employment") during
the 24-month period following the Effective Date; however, Executive is not
required to seek or accept Qualifying Employment. Immediately upon commencing
Qualifying Employment, Executive shall notify Sonoco of his Qualifying
Employment and his base compensation receivable from such Qualifying Employment.
Sonoco shall immediately reduce the monthly payment by such base compensation.
At the end of the 24-month period, the Executive shall certify to Sonoco the
total compensation that he received during such 24-month period, and pay to
Sonoco any amounts due Sonoco to reflect the reduction and offset as provided
above.
3. YEAR 2000 BONUS. In February of 2001, Executive shall be entitled to
be paid as a bonus under the Annual Bonus Plan for Executives of Sonoco, a
percentage of
THIS AGREEMENT IS SUBJECT TO ARBITRATION PURSUANT TO SECTION 21
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the salary paid to him during 2000 prior to the Effective Date calculated by
using his formula bonus for the corporate EPS component and the percentage of
the Company's corporate officer group for the strategic driver component.
4. EQUITY. At the Effective Date, the Executive shall become 100%
vested in the 175,000 currently unvested stock options previously granted to the
Executive under Sonoco's 1991 Key Employee Stock Plan. In addition, on the
Effective Date, the Executive shall become 100% vested in 11,322 shares of the
Restricted Stock granted to him on December 31, 1999. The remaining Restricted
Stock granted to Executive on December 31, 1999 shall be cancelled. In January
of 2001, the Executive shall receive the Restricted Stock granted to him on
October 20, 1994.
5. VACATION PAY. Pursuant to Sonoco's Vacation Pay Policy, the
Executive will receive payment for any unused 2000 vacation. Payment will be
made within 30-days of the Effective Date.
6. MEDICAL AND DENTAL COVERAGE. Pursuant to Sonoco's Benefit Policy,
retiree medical and dental coverage for the Executive and his spouse will
continue on the same fee-sharing basis as for other retirees. Notwithstanding
the above, such coverage shall cease when the Executive is eligible for medical
coverage from another employer. When the Executive subsequently retires from
other employment, the Executive may elect to resume participation in Sonoco's
medical and dental plans (subject to the same provisions on the cessation of
coverage in the event coverage is offered by another employer). Sonoco reserves
the right to change these medical and dental plans or increase the Executive's
contribution to such plans for coverage in the future, as long as Executive's
contribution is consistent with other retirees.
7. SPLIT DOLLAR LIFE INSURANCE. Sonoco will continue the Officer Split
Dollar Life Insurance Policies for the Executive under the current terms,
conditions and agreements.
8. OTHER BENEFITS.
(a) HOME SALE PROTECTION. Sonoco shall pay to the Executive an
amount equal to the net loss after deducting real estate expenses the Executive
may incur on the sale of his home in Hartsville, South Carolina up to a maximum
of 10% of the Executive's investment, not to exceed $100,000, plus one-time
reasonable moving expenses.
(b) SECRETARIAL ASSISTANCE. Sonoco shall provide the Executive
with needed secretarial assistance at its corporate headquarters in Hartsville,
South Carolina for up to 12 months after the Effective Date.
(c) FINANCIAL CONSULTING. Sonoco shall reimburse the Executive
for financial and tax planning fees incurred by the Executive through July 31,
2002 up to a total maximum of $30,000.
(d) LEGAL FEES. Sonoco shall reimburse the Executive for its
reasonable
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fees in negotiating this Agreement.
9. NON-DISCLOSURE OF INFORMATION. Executive hereby acknowledges that
the Company maintains secret and confidential information, including, but not
limited to long-range business plans, executive personnel and staff reviews and
plans, marketing plans, sales data, product technology, customer lists, pricing
data, and cost information. During the course of Executive's past employment
with the Company such secret and confidential information has or may have become
known to him. Full protection of the Company business makes it essential that
the Executive not appropriate such secret or confidential information for his
own use, or disclosure. Executive agrees that Executive will not disclose to
anyone or use for his own benefit, any Company secret or confidential
information obtained by Executive during the term of his employment. Provided,
however, the foregoing obligations shall not apply with respect to any
information which (i) at the time of disclosure or thereafter is generally
available to and known by persons generally in the packaging industry or the
public (other than as a result of a disclosure directly or indirectly by
Executive or his advisors), (ii) becomes available to Executive on a
nonconfidential basis from a source other than the Company or its advisors,
provided that such source is not and was not bound by a confidentiality
agreement with the Company which was known to Executive, (iii) has been
independently acquired or developed by Executive after the Effective Date
without violating any of Executive's obligations under this Agreement; or (iv)
lost its confidential nature due to the passage of time. Executive further
covenants and agrees not to disclose the terms and conditions of this Agreement,
other than to his immediate family and his legal and financial advisors.
Executive agrees to promptly deliver to Company all letters, notes,
notebooks, reports, customer lists, sales data, technology data, price data,
costing information and other materials of a secret or confidential nature
relating to the business of the Company and which may be in Executive's
possession or under his control.
10. COVENANT NOT TO COMPETE OR SOLICIT.
(a) The Executive agrees that he will not, without the prior
written consent of the Company, for a period of two (2) years after the
Effective Date (the "Noncompetition Period"), participate directly or indirectly
in any Competing Business (hereinafter defined) as an owner, partner, investor,
agent, director, officer, employee, financier, guarantor or otherwise provide
material assistance to any Competing Business anywhere in the world. For
purposes of this Section 10, a "Competing Business" shall be the manufacture,
distribution or sale of industrial and consumer packaging products the same as
or competitive with those manufactured or distributed by the Company
Notwithstanding the foregoing, the Employee's direct or indirect ownership of
debt or equity securities of a publicly held business entity shall not be, for
purposes of this section, participation in a Competing Business if such
securities do not have the right to cast more than 5% of the votes entitled to
be cast in the election of the board of directors or other managing body of such
entity.
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(b) The Executive further agrees that he will not during the
Noncompetition Period directly or indirectly solicit, influence or attempt to
influence, any person or entity who is a customer, supplier or contracting party
with or utilizes the services of the Company to discontinue or alter its
relationship with the Company. Further, the Executive will not during the
Noncompetition Period directly or indirectly disturb, entice or hire away or in
any other manner persuade any present or future employee, service provider,
agent, director, officer or employee of the Company to terminate, discontinue,
withdraw, curtail or cancel its relationship with the Company.
(c) Executive agrees that, based upon his present knowledge of
the Company and its business operations around the world, the foregoing
restrictions and the worldwide applicability and duration thereof are, under all
of the circumstances, reasonable and necessary to safeguard the interests of the
Company.
(d) The Executive agrees that remedies at law for any breach
by him of the provisions in this Section 10 will be inadequate in that any
breach will result in immediate and irreparable injury to the Company.
Therefore, in the event of a breach of this Section 10 by the Executive, in
addition to any and all legal and equitable remedies which may be available, the
Company may enforce this Section 10 by an injunction in a suit in equity,
without the necessity of proving actual damage, and that a temporary restraining
order may be granted immediately upon the commencement of any such suit, without
notice, and further that a preliminary injunction may be granted during the
pendency of any such suit. In the event that any of the agreements above stated
are found by a court to be too broad in scope or time to be enforceable, the
parties request and agree that they may be reduced by a court of competent
jurisdiction to such lesser breadth as may be necessary to make them
enforceable.
(e) The covenants set forth in this Section 10 shall operate
independently of any other provisions in this Contract, and shall be independent
of, in addition to and not in lieu of, any non-compete agreements or forfeiture
provisions contained in other agreements, and shall operate regardless of any
breach or alleged breach of this Agreement by either party, and shall survive
the expiration or other termination, amendment or extension of this Agreement.
11. MUTUAL NONDISPARAGEMENT. Executive shall not make any public
statements, encourage others to make statements or release information intended
to disparage or defame any of the Sonoco Parties (as defined in Section 13). The
Company shall not make public statements, encourage others to make statements or
release information intended to disparage or defame Executive's reputation.
Notwithstanding the foregoing, nothing in this Section 11 shall prohibit any
person from making such statements when required by order of a court or other
body having jurisdiction. Except to the extent consistent with the press release
to be issued by the Company in connection with the Executive's termination of
employment or with the prior written consent of the Company, the Executive will
not make any direct or indirect written or oral statements to the press,
television, radio or other media concerning any matters pertaining to the
business and affairs of the Company or any Sonoco Party or pertaining to any
matters
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related to Executive's employment or separation from employment with the Company
12. LEGAL OBLIGATION OF SONOCO. The parties agree that Sonoco has no
prior legal obligation to make the additional payments or provisions that are
exchanged for the promises contained herein, except for the payments (i) under
Section 5, (ii) a portion of the SERP payments under Section 1 attributable to
service through the Effective Date, and (iii) the Restricted Stock granted to
Executive on October 20, 1994 referenced in Section 4 ("Required Payments").
13. MUTUAL RELEASE. In consideration of Sonoco's agreement to provide
Executive with the payments and benefits listed in this Agreement, Executive, on
behalf of himself, his spouse, his heirs, and assigns, and Sonoco, on behalf of
its successors and assigns, agree not to bring suit or otherwise assert any
claim against each other and in the case of Sonoco, its affiliates,
shareholders, successors, assigns, officers, directors, agents, attorneys and
employees (a "Sonoco Party"), on matters arising from Executive's employment
with or separation from Sonoco. Sonoco and Executive mutually release each
other, and in the case of the release of Sonoco by Executive, any Sonoco Party,
from any and all claims, demands, suits, actions, and causes of action of any
nature whatsoever that they have or may have against each other at any time
prior to the signing of this Agreement, as well as all claims resulting from
Executive's employment with and separation from Sonoco including but not limited
to The Age Discrimination in Employment Act, 29 U.S.C. ss. 621-634; the Older
Worker Benefit Protection Act, 29 U.S.C. ss.623, 626 and 631; Title VII of the
Civil Rights Act of 1964, 42 U.S.C. xx.xx. 2000e, et seq.; Section 1981 of the
Civil Rights Act of 1866, 42 U.S.C. ss. 1981; the Equal Pay Act of 1963, 29
U.S.C. ss. 206; the Fair Labor Standards Act, 29 U.S.C. xx.xx. 201, et seq.; the
Consolidated Omnibus Budget Reconciliation Act of 1985, 42 U.S.C ss. 13995(9(c);
Executive Order 11246; Executive Order ss. 11141; section 503 of the
Rehabilitation Act of 1973, 29 U.S.C. xx.xx. 701 et seq.; the Employee
Retirement Income Security Act of 1974, 29 U.S.C. xx.xx. 1001, et seq.; the
South Carolina Human Affairs Law, S. C. Code (1976), as amended Section 1-13-80,
et seq.; the Americans with Disabilities Act, 42 U.S.C. xx.xx. 12101, et seq.;
the Family and Medical Leave Act, 29 U.S.C. ss.2601 et seq.; The Civil Rights
Act of 1991, 42 U.S.C. ss.1981 et seq.; any and all claims which could arise
from or relate to common law, local law, or a State of South Carolina ruling,
law, court decision, constitutional provision, code section or regulation,
including, without limitation, those relating to discrimination, worker's
compensation, benefits, unemployment insurance compensation and industrial
welfare.
This release covers both claims that the parties know about and they
may not know about. This release covers Claims made before courts, agencies and
any other forum. It covers claims for any damages, costs, experts' fees,
attorneys' fees and other relief.
However, this release does not apply to claims that the Executive may
have to benefits under the Company's retirement or welfare plans, including
arrangements pursuant to which amounts are payable to Executive with respect to
deferred compensation.
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14. INDEMNIFICATION: D&O INSURANCE COVERAGE. To the fullest extent
permitted by law, the Company will indemnify the Executive (including the
advancement of expenses) for any judgments, fines, amounts paid in settlement
and reasonable expenses, including attorney's fees, incurred by the Executive in
connection with the defense of any lawsuit or other claim to which he is made a
party by reason of being or having been an officer, director or employee of the
Company or any Sonoco Party. In addition, the Company shall cause Executive to
be covered (with respect to acts, errors or omissions which shall have occurred
on or before the Effective Date) under such director and officer liability
insurance policies as the Company shall from time to time have in effect for its
then-active officers and directors to the same extent as coverage is available
thereunder to the then-active officers and directors for acts, errors or
omissions during their periods of service to the Company.
15. BREACH BY EITHER PARTY. Executive agrees that if he breaches
Section 13 of this Agreement, he will pay all costs and expenses incurred by any
Sonoco Party in its defense of such a suit, including reasonable attorney's
fees, and shall entitle the Company to suspend any payments provided herein
except for Required Payments. If it is ultimately determined that the Executive
breached Section 13, the Company shall recover all amounts previously paid under
this Agreement except for Required Payments and shall be relieved of any
obligation to make further payments under this Agreement except for Required
Payments. If it is ultimately determined that the Executive did not breach
Section 13, Sonoco will pay Executive all payments which were suspended plus
interest at the prime rate as quoted in the Wall Street Journal and shall begin
to make all future payments required under the Agreement. A suit or counterclaim
by a Sonoco Party to recover the sums paid hereunder shall be permitted to
protect the consideration paid and will not be considered by Executive to be
retaliatory. If Sonoco breaches Section 13 of this Agreement, or if Executive
breaches Section 9 or Executive or the Company breaches Section 11 of this
Agreement, the breaching party shall be required to pay to the other party the
legal fees and expenses incurred to enforce the terms of Sections 9, 11 or 13,
and pay such actual damages as may be proven as a result of any breach. The
parties further agree that in the event the Company believes that Executive is
in violation of Section 10 of this Agreement, the Company shall give written
notice to Executive of its belief that Executive is in violation of Section 10
and Executive shall have thirty (30) days after receipt of such notice to cure
any alleged breach. If Executive does not cure an alleged breach of Section 10
after written notice from the Company, the Company may exercise its rights under
Section 10(d) to seek injunctive relief and, in the event the Company obtains a
preliminary injunction after notice and an opportunity to be heard, it may
suspend any remaining payments to Executive under this Agreement except for
Required Payments, pending a final determination as to whether Executive
breached Section 10. If it is finally determined that Executive breached Section
10 of this Agreement, the Company will not be required to pay to Executive the
suspended payments and Executive will be required to reimburse the Company for
its legal fees and expenses. If it is finally determined that Executive did not
breach Section 10 of this Agreement, the Company will pay Executive the
suspended payments, with interest from the date suspended at the prime rate as
quoted in the Wall Street Journal, plus the legal fees and expenses incurred by
Executive. If the Company fails at any time to make the payments or
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provide the benefits set forth in Sections 1 through 8 of this Agreement (except
where suspension and non-payment is permitted by this paragraph of the
Agreement), and the Company fails to cure any breach after thirty (30) days
written notice from Executive, the Executive will be released from the
obligations of Section 10 and the Company will be required to pay Executive the
amounts due, plus legal fees and expenses incurred in enforcing those sections
of this Agreement.
16. ATTORNEY FOR EXECUTIVE. Executive certifies that he has been
informed by Sonoco, through the terms of this Agreement, that he was advised to
review and discuss the terms of this Agreement with an attorney of his choice
prior to signing this Agreement and an attorney of his choice has reviewed and
discussed the terms of this Agreement with the Executive.
17. RIGHT TO REVOKE. Executive certifies that Sonoco has notified him
he has twenty-one (21) days from his receipt of this Agreement in which to
execute said Agreement. In addition, Executive has been informed that the
Agreement may be revoked by the Executive for a period of seven (7) days after
its execution. No payment shall be due hereunder until after the passage of
seven (7) days from its execution, as indicated in the first Section hereof.
After that time, this Agreement becomes irrevocable.
18. COOPERATION. Executive agrees that he will assist any Sonoco Party
in the defense of any claims or potential claims that may be made or threatened
to be made against any Sonoco Party in any action, suit or proceeding, whether
civil, criminal, administrative or investigative (a "Proceeding"), and will
assist the Sonoco Parties in the prosecution of any claims that may be made by
any Sonoco Party in any Proceeding, to the extent that such claims may relate to
the period of Executive's employment by the Company. The Company will consult
with Executive, and make reasonable efforts to schedule such assistance so as
not to materially disrupt Executive's business and personal affairs. Executive
agrees, unless precluded by law, to promptly inform the Company if Executive is
asked to participate (or otherwise become involved) in any Proceeding involving
such claims that may be filed against any Sonoco Party. Executive also agrees,
unless precluded by law, to promptly inform the Company if Executive is asked to
assist in any investigation (whether governmental or private) of any Sonoco
Party (or their actions), regardless of whether a lawsuit has then been filed
against any Sonoco Party with respect to such investigation. The Company agrees
to reimburse Executive for all of Executive's reasonable out-of-pocket expenses
associated with such assistance, including travel expenses.
19. ENTIRE AGREEMENT. This Agreement contains the entire agreement
between the parties and supersedes any prior agreement (except for the
Executives obligations under the agreements incident to the Officer Split Dollar
Life Insurance Policies) between the parties with respect to the subject matter
and no amendment or other modification of this Agreement shall be valid or
binding on any party unless in writing and signed by the party against whom
enforcement is sought.
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20. GOVERNING LAW. This Agreement shall be governed by and construed in
accordance with the laws of the State of South Carolina and rights and
obligations of the parties under this Agreement shall be binding upon and inure
to the benefit of their respective heirs, successors, assigns and legal
representatives.
21. ARBITRATION. Any controversy or claim relating to this Agreement,
except for Court action initiated by the Company, at its sole discretion, to
enforce the Executive's covenants in Sections 9, 10 and 11 shall be settled
exclusively by arbitration in Columbia, South Carolina in accordance with the
rules of the American Arbitration Association then in effect. Any arbitration
award will be binding on the parties and may be enforced in any court having
jurisdiction.
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IN WITNESS WHEREOF, the parties have executed this Agreement on the day
and the year first written above.
/s/Xxxxx X. Xxxxxxxx
--------------------
Xxxxx X. Xxxxxxxx
SONOCO PRODUCTS COMPANY
By: /s/Xxxxxxx X. Xxxxx
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Its: Chairman of the Board
