Exhibit 10(b)
August 16, 2001 -- Revised August 27, 2001
PERSONAL AND CONFIDENTIAL
TERMINATION SETTLEMENT AGREEMENT AND GENERAL RELEASE
Xxxxxx Xxxxx
00 Xxxxxx Xxx
Xxxxxx, XX 00000
Dear Jorgen:
This letter describes our proposed agreement concerning the
termination of your employment with Xxx Xxxxxxxx Xxxxxxx (hereinafter,
"Xxxxxxxx," or the "Company"). The termination settlement pay and
benefits described below are available to you only if you execute this
Agreement, which includes a release of all claims, non-competition and
non-solicitation restrictions, and additional conditions as set forth
below.
Your "scheduled release date" is October 1, 2001. You will
continue to be paid your present base salary through that date.
Termination Settlement Pay - The total gross amount of
termination settlement pay available to you under this Agreement is
One Million Eight Hundred Sixty Thousand Dollars ($1,860,000.00). Such
termination settlement pay shall be provided to you in the form of
continuing semi-monthly payments at the annual rate of Nine Hundred
Thirty Thousand Dollars ($930,000.00) during the two-year period from
your scheduled release date through September 30, 2003. These
semi-monthly payments, which will be subject to appropriate deductions
for taxes, benefits and other required withholdings, will be included
in the calculation of Average Annual Compensation in accordance with
the terms of Xxx Xxxxxxxx Xxxxxxx Retirement Plan. The period during
which you receive termination settlement pay as continuing
semi-monthly payments is referred to hereinafter as the "settlement
payments period."
Resignation of Officer Positions - Effective as of the scheduled
release date, you resign from your position as an Officer of the
Company, and from all other positions you may currently hold as an
officer or director of any of the Company's subsidiaries or
affiliates. You shall sign and deliver to the Company such other
documents as may be necessary to effect or reflect such resignations.
Change in Control Employment Agreement - Your Change in Control
Employment Agreement with Xxxxxxxx dated December 16, 1999, will
terminate on the eighth day after your execution of this Agreement,
when this Agreement becomes effective and enforceable.
Benefits Status During Settlement Payments Period - During the
settlement payments period, you will be eligible to continue
participation in a number of employee benefits and services. These
include continuing participation in the following contributory benefit
plans:
Medical Plan
Dental Plan
Supplemental Life Insurance Plan
Employees' Savings Plan
Supplemental Savings Plan
Executive Life Insurance Plan
If you elect to continue your participation in the Xxxxxxxx
medical or dental plans after your scheduled release date and you
become eligible for coverage under any other medical or dental plans,
you agree to look to those other plans for your primary coverage.
Coverage under a Xxxxxxxx plan will only apply in accordance with
Xxxxxxxx'x Coordination of Benefits Provision as secondary payer.
During a settlement payments period, you will also be eligible
for many of the currently provided employee benefits and services.
However, following your scheduled release date you will not be
eligible for certain employee benefits, including:
Incentive Bonuses
Salary Continuation Plan
Long-Term Disability Plan
Vacation Accrual
Holiday Pay
Tuition Refund Plan
The following is information concerning specific benefits
provided under this Agreement as of your scheduled release date, at
the end of a settlement payments period or when you elect to begin
receiving pension benefits, as discussed below.
Xxx Xxxxxxxx Xxxxxxx Retirement Plan - Company records indicate
you will be eligible for a pension as of your scheduled release date.
If you continue to receive termination settlement pay as semi-monthly
payments until September 30, 2003, as set forth above, your retirement
date for all benefits purposes shall be October 1, 2003.
You may elect to retire and begin receiving pension payments
prior to October 1, 2003, on any date following your scheduled release
date. Once you elect to begin receiving pension payments, the
settlement payments period ends and you are eligible for only those
pension benefits and services available to retirees. At that time, the
balance of any termination settlement pay due you under this Agreement
must be taken as a lump sum or deferred to a specific future date.
Lump sum payments and deferred termination settlement payments made
after pension payments begin will not be included in determining
service credit or in computing compensation under the Retirement Plan.
Group Medical Coverage - During a settlement payments period, you
may elect to continue your current Xxxxxxxx group medical coverage at
the regular employee contribution rate.
Group Dental Coverage - Dental coverage may be continued at the
regular employee contribution rate throughout a settlement payments
period. After the settlement payments period, you may continue group
dental coverage for up to an additional 18 months by paying 102% of
the premium cost of such coverage. Dental coverage is otherwise not
available after retirement.
Coverage under the Xxxxxxxx group dental plan will continue
through the last day of the month in which you terminate from the
group plan. If you are in the process of having dental work done which
requires more than one visit (for example, root canal work, etc.), you
will have 30 days from the first of the next month to have it
completed. The Xxxxxxxx group dental plan cannot be converted into an
individual membership.
Employee Stock Ownership Plan (ESOP) - When terminated from the
payroll on the last date of a settlements payments period, you may
take a distribution of your ESOP account, or, if the account balance
is $5,000 or more, defer the distribution. As a terminating employee
who is retirement eligible, you should refer to the Retiree/LTD
Medical Program for information on using the ESOP to fund retiree
medical coverage.
Retiree Medical Program - You will be eligible to participate in
the Retiree Medical Program upon or after retirement. Employees hired
prior to July 1, 1990 (Group 2) must maintain the full ESOP account
balance with the trustee for continued eligibility for retiree medical
coverage.
Life Insurance (Spouse and Child) - Coverage provided under this
plan will continue for a 31-day period following the date you retire.
During a settlement payments period, the amount of coverage under
spouse or child life insurance will continue at the coverage level in
effect on the scheduled release date. Within the 31-day period after
the date you retire or the end of the settlement payments period, if
applicable, you may convert to an individual policy without a
qualifying exam. If you wish to convert to an individual policy, you
must notify the Employee Benefits Department in order to arrange for
an insurance company representative to contact you with details on
conversion options. Please refer to Your Employee Benefits Book for
information on the conversion privilege.
Executive Life Insurance - Executive life insurance coverage will
continue during a settlement payments period at the same coverage
level as an active employee. At retirement, coverage levels are
adjusted to reflect a retirement benefit.
Estate Preservation Plan - You, or the policy owner, may retain
the policy by continuing the scheduled premium payments determined at
the time of inception. If you elect to discontinue this policy, the
Company will withdraw its cumulative premium payments from the
policy's cash value and have no further interest in the policy.
Savings Plan - You may continue to participate in the Employees'
Savings Plan during a settlement payments period at your rate of
contribution on the scheduled release date, unless you change the
contribution rate on a subsequent date. You may, in accordance with
the terms of the Plan, retain an account balance of over $5,000 after
your contributions end and defer withdrawal to a future date. When you
want to withdraw your account, you may call the Plan Record Keeper and
Trustee, Fidelity Investments, at 0-000-000-0000. A voluntary
withdrawal taken prior to the end of a settlement payments period may
result in suspension of participation and/or a negative tax impact.
Please refer to the current Employees' Savings Plan booklet.
Supplemental Savings Plan - If you participate in the
Supplemental Savings Plan, deferrals under the Plan may continue
during a settlement payments period. At the end of the settlement
payments period, the Supplemental Savings Plan will be paid to you in
a single lump sum unless you have previously made a timely deferral
election.
Stock Equivalent Unit Plan - During a settlement payments period,
the value of any awards will continue to be determined by stock price
appreciation and dividend credits. You will receive additional
information from the Manager of Executive Compensation concerning your
payment or deferral election.
Stock Option Plan -Your period for exercising any vested options
will be the time period available to Stock Option Plan participants
retiring under Xxx Xxxxxxxx Xxxxxxx Retirement Plan, subject to the
provisions of the section below entitled "Rights and Remedies in the
Event of Certain Breaches."
Vacation Pay - Any unused current year vacation accrued as of
your scheduled release date will be paid to you at that time. As you
are eligible for retirement benefits under Xxx Xxxxxxxx Xxxxxxx
Retirement Plan as of the scheduled release date, you will be granted
full year vacation accrual for the current year. There will be no
vacation accrual after the scheduled release date.
Outplacement Counseling Services - Arrangements will be made with
Xxx Xxxxx Xxxxxxxx, Inc. to provide you with outplacement counseling
services.
In order to remain eligible for this outplacement assistance, you
must initiate outplacement services with Xxx Xxxxx Xxxxxxxx, Inc. as
soon as possible and in any event not later than fourteen days
following your scheduled release date. You must also continue active
participation in the job search program as it is established by your
outplacement counselor.
Use of the Xxx Xxxxx Xxxxxxxx, Inc. outplacement facility and
counseling services will be available to you for a period of 12 months
following your scheduled release date unless you sooner become
re-employed, decline further services or voluntarily interrupt your
participation in the program for a 30-day period.
Non-Competition and Non-Solicitation Restrictions.
A. In consideration of the termination settlement pay and other
benefits provided to you under this Agreement, you agree that, prior
to October 1, 2003, you shall not directly or indirectly:
(1) as an employee, consultant, independent contractor, officer,
director, individual proprietor, investor, partner, stockholder,
agent, principal, joint venturer, or in any other capacity whatsoever
(other than as the holder of not more than one percent of the combined
voting power of the outstanding stock of a publicly held corporation
or company), be employed, work, consult, advise, assist, or engage in
any activity regarding any business, product, service or other matter
which: (a) is substantially similar to or competes with any business,
product, service or other matter regarding which you worked for the
Company, or any of its subsidiaries, during the three years prior to
your scheduled release date; or (b) concerns subject matters about
which you gained proprietary information of the Company, or any of its
subsidiaries, during the three-year period prior to your scheduled
release date;
(2) either alone or in association with others, solicit, divert
or take away, or attempt to divert or to take away, the business or
patronage of any of the clients, customers or accounts, or prospective
clients, customers or accounts, of the Company which were contacted,
solicited or served, directly or indirectly, by you while employed by
the Company; or
(3) either alone or in association with others: (a) solicit or
encourage any employee or independent contractor of the Company to
terminate his/her relationship with the Company; or (b) recruit, hire
or solicit for employment or for engagement as an independent
contractor, any person who is or was employed by the Company at any
time during your employment with the Company; provided, that this
Paragraph (3) shall not apply to such person whose employment with the
Company has been terminated for a period of twelve months or longer.
B. The geographic scope of the provisions of Paragraph A above
shall extend to anywhere the Company or any of its subsidiaries is
doing business, has done business or intends to do business.
C. If any restriction set forth in Paragraph A above is found by
any court of competent jurisdiction to be unenforceable because it
extends for too long a period of time or over too great a range of
activities or in too broad a geographic area, it shall be interpreted
to extend only over the maximum period of time, range of activities or
geographic area as to which it may be enforceable.
D. The non-competition restrictions set forth in Paragraph A
above supersede any non-competition restrictions of less than two
years in duration set forth in any agreement between you and the
Company or any subsidiary or predecessor, or in any Xxxxxxxx benefit
plan in which you are a participant, including but not limited to the
1971 Stock Option Plan.
Confidentiality -- You shall not disclose or use at any time any
secret or confidential information or knowledge obtained or acquired
by you during, after, or by reason of, employment with the Company or
any of its subsidiaries, as provided under applicable law and any and
all agreements between you and the Company or any of its subsidiaries
regarding your employment with the Company or the subsidiary.
Inventions - In accordance with any and all agreements between
you and the Company or any of its subsidiaries regarding your
employment, you shall disclose promptly and transfer and assign to the
Company all improvements and inventions in certain fields made or
conceived by you during employment with the Company or the subsidiary
and within the prescribed periods thereafter.
Prohibited Statements - To the extent permitted by law, you shall
not make, publish or state, or cause to be made, published or stated,
any defamatory or disparaging statement, writing or communication
pertaining to the character, reputation, business practices,
competence or conduct of the Company, its subsidiaries, shareholders,
directors, officers, employees, agents, representatives or successors.
Rights and Remedies in the Event of Certain Breaches -- If the
Company reasonably determines that you have materially violated any of
your obligations under the above sections entitled "Non-Competition
and Non-Solicitation Restrictions," "Confidentiality," "Inventions,"
and "Prohibited Statements," then, in addition to any other remedies
at law or in equity it may have, the Company shall have the following
rights and remedies:
A. The Company may immediately terminate all termination
settlement pay and benefits provided to you under this Agreement, and
shall have no further obligation to provide such pay and benefits to
you.
B. The Company may cancel any and all options previously granted
to you under Xxx Xxxxxxxx Xxxxxxx 1971 Stock Option Plan, including
but not limited to grants that according to their terms are vested
(hereinafter referred to as "Covered Options"), effective as of the
date on which such violation began (the "Violation Date"); and
C. The Company may demand the return of any gain realized by you
as a result of your exercise of any Covered Options during the period
commencing one year prior to your scheduled release date and
continuing through the Violation Date. Upon demand, you shall pay to
the Company the amount of any gain realized or payment received as a
result of such exercises. At the option of the Company, such payment
shall be made by returning to the Company the number of shares of
common stock of the Company which you received in connection with such
exercise (with the Company then refunding the option price paid by
you), or in cash in the amount of the gain realized. If after such
demand you fail to return said shares or amounts, the Company shall
have the right to offset said amounts against any amounts, including
compensation, owed to you by the Company or to commence judicial
proceedings against you to recover said shares or amounts.
The rights and remedies set forth above supercede the provisions
of Paragraph 6(i)(6) of the 1971 Stock Option Plan, which contains a
more limited definition of the term "covered options."
Release of All Claims - In consideration of the termination
settlement pay and other benefits provided to you under this
Agreement, you do hereby, for yourself, your heirs, executors,
administrators and assigns, release and agree to indemnify and hold
harmless Releasee, as hereinafter defined, from any and all claims,
charges, complaints, damages, or causes of action, now existing, both
known and unknown, of every name and nature, including but not limited
to all claims of breach of contract or misrepresentation, wrongful
discharge, or arising from alleged violations of Title VII of the
Civil Rights Act of 1964, the Age Discrimination in Employment Act,
the Older Workers Benefits Protection Act, the Rehabilitation Act of
1973, the Americans with Disabilities Act, the Fair Labor Standards
Act, the Equal Pay Act, the Employee Retirement Income Security Act,
the Worker Adjustment and Retraining Notification Act, Chapter 151B of
Massachusetts General Laws, or any other local, state or federal law,
regulation or policy or any other claim relating to or arising out of
your employment with Xxx Xxxxxxxx Xxxxxxx or the termination thereof,
with the sole exception of any rights you may have under the Workers'
Compensation Act.
The term "Releasee" in the previous paragraph shall be defined to
include: Xxxxxxxx, its corporate affiliates, and each of its present
and former shareholders, directors, officers, agents, employees, and
successors; and all employee benefits plans of Xxxxxxxx (the "Plans"),
and all administrators, committees, insurers and fiduciaries of the
Plans, and all persons, members, agents, entities or parties claiming
by, through and under the named parties.
You acknowledge that prior to your execution of this release: you
have been provided with the option and opportunity of reviewing this
release with independent counsel of your own choosing and have, in
fact, consulted with your attorney concerning this Agreement; you are
competent to exercise this release; the only consideration for this
release is the termination settlement pay and benefits described
herein and no other promise or agreement has been made; your agreement
to execute this release has not been obtained by any duress; and you
fully understand that this document is intended to be a complete and
legally binding general release.
No Known Claims Against You - The undersigned Senior Vice
President of Human Resources represents that he knows of no claims
that the Company or any Releasee has against you.
Indemnification - Nothing in this Agreement or the above release
of all claims shall constitute a release or waiver of any future
application of the indemnification provisions in the Company's
By-laws.
Company Property - You agree that, not later than your scheduled
release date, you will return all equipment, files, documents, credit
cards, and any other property belonging to Xxx Xxxxxxxx Xxxxxxx.
Cooperation and Assistance - You agree to make yourself
reasonably available to the Company to respond to reasonable requests
by the Company for information concerning matters involving facts or
events, relating to the Company or any of the Company's subsidiaries
or affiliates, that may be within your knowledge, and to cooperate
with and assist the Company and any subsidiary or affiliate as
reasonably requested with respect to any pending and future
litigation, arbitration or other dispute resolution relating to any
matter in which you were involved during your employment with the
Company. The Company will reimburse you for your reasonable travel
expenses and other costs that you incur as a result of your
cooperation and assistance under this paragraph.
Basic Fringe Benefit Rights - If you decide not to accept and
sign this Agreement, your rights to certain fringe benefits upon
termination will not be altered by your decision. These include your
rights under applicable laws and benefit plan provisions to accrued
and unused vacation pay as of your scheduled release date, conversion
rights under group life insurance plans, and continuation of group
medical and dental coverage under COBRA, and as well as any other
rights you have to future benefits as a benefits plan participant
under the federal Employee Retirement Income Security Act of 1974
(ERISA).
Non-Assignment - The termination settlement pay and benefits
under this Agreement are personal to you and are expressly declared to
be non-assignable and non-transferable. You shall have no right to
commute, sell, assign, transfer or convey any payment hereunder. This
Agreement shall be binding upon any successor to the business of Xxx
Xxxxxxxx Xxxxxxx, but shall not otherwise be assignable.
Payment to Estate - Should you die after this Agreement becomes
effective and enforceable but before all termination settlement
payments are completed, your estate will receive a lump sum payment of
any balance of termination settlement pay due.
Governing Law - This Agreement shall be governed by and construed
in accordance with the laws of the Commonwealth of Massachusetts,
without regard to its conflict of laws provisions.
Headings - Headings of the various provisions used herein are for
convenience of reference only and shall not alter the meaning of the
provisions.
Severability - You agree that should any of the provisions of
this Agreement be declared or determined by any court to be illegal or
invalid, the validity of the remaining parts, terms or provisions
shall not be affected thereby.
Review - Xxxxxxxx previously offered you a Termination Settlement
Agreement on August 16, 2001, provided you a period of more than 21
days in which to review and consider the Agreement, and advised you to
consult with an attorney before signing the Agreement. The changes
from the original reflected in this Agreement were negotiated by your
attorney on your behalf, and you agree that these changes do not
restart the running of the 21-day review period set forth in the Age
Discrimination in Employment Act for waiving rights and claims under
that statute.
If, after review, you agree to and accept the terms and
conditions of this letter, please sign and return the enclosed copy of
this letter not later than September 10, 2001.
Revocation - Federal law provides you with the right to revoke
this Agreement during the seven days following your signing of the
Agreement. A revocation must be in writing and delivered to me. This
Agreement does not become effective or enforceable until after the
seven-day revocation period has passed, or if you revoke the Agreement
during that period.
I would like to take this opportunity to extend my personal
thanks for your past support and my best wishes for your future.
Sincerely,
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
Senior Vice President
Human Resources
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AGREED AND ACCEPTED:
I hereby accept and agree to all of the terms and provisions of this
Agreement.
/s/ Xxxxxx Xxxxx /s/ Xxxxxxx X. Xxxxx
Signature WITNESS: Signature
8/29/01
Date
