SETTLEMENT AND SEVERANCE AGREEMENT
THIS SETTLEMENT AND SEVERANCE AGREEMENT ("Agreement") is
entered into as of the 28th day of August, 1998, by and between
XXXXXXX COMPANIES, INC., an Oklahoma corporation (the "Company")
and XXXXXX X. XXXXXX, an individual ("Xxxxxx") with respect to the
following:
W I T N E S S E T H
WHEREAS, Xxxxxx has resigned as Chairman of the Board and
Chief Executive Officer and as a member of the Board of Directors
of the Company effective July 18, 1998;
WHEREAS, the Company desires to provide Xxxxxx certain
benefits upon the severance of his employment status with the
Company; and
WHEREAS, Xxxxxx desires to receive those benefits in
exchange for certain promises and other consideration.
NOW, THEREFORE, BE IT RESOLVED, that the Company and
Xxxxxx, in consideration of the covenants herein set forth, agree
as follows:
1. Resignation and Retirement. Xxxxxx agrees to and
does hereby voluntarily resign and retire as the Company's Chief
Executive Officer. Xxxxxx also agrees to and does hereby volun-
tarily resign as Chairman and as a member of the Company's Board
of Directors (the "Board") and as a member of any committees of the
Company and/or the Board on which he currently serves. Xxxxxx
further agrees to and does hereby resign from all other positions
which he may currently hold as an officer or member of the board of
directors of any of the Company's subsidiaries and as a member of
any committees of such subsidiaries or their boards of directors.
All such resignations shall be effective July 18, 1998, and Xxxxxx
shall sign and deliver to the Company such other documents as may
be necessary to effect or reflect resignations as of that date.
Xxxxxx will receive his regular base pay and benefits through July
18, 1998.
2. Severance.
2.1 Salary Replacement. The Company will pay
Xxxxxx the sum of $1,250,000 (the "Salary Replacement Amount"),
which is the equivalent of two times Xxxxxx'x current annual base
pay. This gross amount will be paid in a lump sum payment within
ten (10) days after Xxxxxx signs this Agreement and delivers to the
Company the General Release described in paragraph 7.1. In the
event of Xxxxxx'x death, any unpaid portion of the Salary Replace-
ment Amount will be paid in the same manner to his executor or
personal representative, as applicable.
2.2 EVA Target Bonus. If the Company determines
at the conclusion of 1998 that Xxxxxx would, if his employment had
continued through 1998, have been eligible for a bonus (the "EVA
Target Bonus") under the Economic Value Added Incentive Bonus Plan
for Xxxxxxx Companies, Inc. and its Subsidiaries (the "EVA Plan")
earned through actual corporate performance during such year, the
Company will pay Xxxxxx a xxxxx amount equal to twice what he would
have earned had he remained Chief Executive Officer through the
balance of 1998 up to, but not to exceed, $1,125,000, which is the
equivalent of a maximum of two times Xxxxxx'x 1998 EVA Target
Bonus. The determination and calculation of the amount, if any, of
Xxxxxx'x XXX Target Bonus shall be made by the Company in accor-
dance with the EVA Plan as interpreted by the Company in its sole
discretion. The Company shall be fair and reasonable and shall
make its determination for Xxxxxx using the same criteria,
including any exclusions of extraordinary charges as has been done
in the past, as it uses for all other participants in the EVA Plan.
The EVA Target Bonus, if any, will be paid on or about March 15,
1999. In the event of Xxxxxx'x death prior to March 15, 1999 (or
any later payment date), the EVA Target Bonus, if any, will be paid
to his executor or personal representative, as applicable.
2.3 Bonus Bank. Under the EVA Plan a portion of
a participant's bonus is retained by the Company for potential
future payout and maintained in a bookkeeping account (the "Bonus
Bank"). Xxxxxx'x Bonus Bank is $225,922 and the Company will make
a distribution to Xxxxxx in the gross amount of $225,922 from his
Bonus Bank. This payment will be made within ten (10) days after
Xxxxxx signs the Agreement and delivers it to the Company with the
General Release described in paragraph 7.1. In the event of
Xxxxxx'x death prior to his receipt of his Bonus Bank, the Bonus
Bank will be paid to his executor or personal representative, as
applicable.
2.4 Accrued Vacation. The Company will pay Xxxxxx
for three (3) weeks' accrued and unused 1998 vacation in the gross
amount of $36,058 (the "Vacation Accrual"). The Vacation Accrual
will be paid within ten (10) days after Xxxxxx signs this Agreement
and delivers to the Company the General Release described in
paragraph 7.1.
3. Stock Options. Subject to the provisions of this
paragraph, the Compensation and Organization Committee of the Board
(the "Compensation Committee") by its approval and adoption of this
Agreement, as noted below, does hereby accelerate vesting (to the
extent not already vested) of the following nonqualified stock
options heretofore granted to Xxxxxx under the Xxxxxxx Companies,
Inc. 1990 Stock Option Plan (the "1990 SOP") and permit Xxxxxx (or
his executor or personal representative, as applicable) to exercise
and purchase during the two-year period from July 18, 1998 through
July 17, 2000 (the "Exercise Period") all or any part of the shares
subject to such stock options:
Number of Options Exercise Price
30,000 $24.9375
Provided, however, if, upon advice of counsel the
Compensation Committee determines it cannot or if it elects not to
amend the 1990 SOP to provide for extension of the exercise of the
referenced options through July 17, 2000, the Company shall notify
Xxxxxx of such determination and shall nonetheless pay Xxxxxx the
difference between the exercise price and the fair market value of
the Company common stock on the Exercise Date (herein referred to
as the "Spread"). At any time during the Exercise Period, Xxxxxx
may select the day (the "Exercise Date") as of which he shall be
entitled to be paid the Spread by the Company; provided, however,
that prior to 9:00 a.m., central time, on the day following the
Exercise Date, Xxxxxx shall notify the Company of his election to
exercise the stock options by receiving payment of the Spread. In
the event of Xxxxxx'x death, such right shall vest in Xxxxxx'x
executor or personal representative. The payment of the Spread
shall be made within five (5) days after the notice of election to
receive the Spread.
Likewise, the Compensation Committee, by its approval and
adoption set out below, does hereby accelerate vesting (to the
extent not already vested) of the following nonqualified stock
options heretofore granted to Xxxxxx under the Xxxxxxx Companies,
Inc. 1996 Stock Incentive Plan (the "1996 SIP") and permit Xxxxxx
(or his executor or personal representative, as applicable) to
exercise and purchase during the two-year period from July 18, 1998
through July 17, 2000 all or any part of the shares subject to such
stock options:
Number of Options Exercise Price
30,000 $19.7500
30,000 $16.3750
30,000 $17.5000
Notwithstanding anything to the contrary in each of the
nonqualified stock option agreements that Xxxxxx and the Company
have executed representing the stock options described in this
paragraph 3 granted under the 1996 SIP, such agreements are hereby
amended to provide that such nonqualified stock options are
exercisable in whole or in part by Xxxxxx (or his executor or
personal representative) during the two-year period from July 18,
1998 through July 17, 2000. Such option agreements, as herein
modified, shall continue in full force and effect in accordance
with their terms.
4. Restricted Stock Awards. The Compensation
Committee, by its approval and adoption noted below, hereby waives
all qualifying requirements and does hereby accelerate vesting and
distribution to Xxxxxx of 22,500 shares of restricted stock (plus
paid dividends attributable to such shares) awarded to Xxxxxx on
November 1, 1997 under the 1996 SIP which shares vested by time on
January 1, 1998 and 22,500 shares of restricted stock (plus paid
dividends attributable to such shares) awarded to Xxxxxx on
November 1, 1997 under the 1996 SIP which shares vested by
performance on March 31, 1998 (collectively, the "Vested Restricted
Shares"). Likewise, the Compensation Committee, by its approval
and adoption below, waives the qualifying requirements and accel-
erates both vesting and distribution of 45,000 additional shares of
restricted stock (plus paid dividends attributable to such shares)
awarded to Xxxxxx on November 1, 1997 under the 1996 SIP, 22,500
shares of which, but for the severance of the employment relation-
ship between Xxxxxx and the Company, would have vested on January
1, 1999 and 22,500 shares of which would have vested on January 1,
2000, respectively (collectively, the "Restricted Shares"). Other
than the Vested Restricted Shares and the Restricted Shares, all
other restricted shares or awards for which Xxxxxx might otherwise
have been eligible under the 1996 SIP or under any other Xxxxxxx
plan shall be forfeited. Distribution of the Vested Restricted
Shares and the Restricted Shares shall be made within ten (10) days
after Xxxxxx signs this Agreement and delivers to the Company the
General Release described in paragraph 7.1.
5. The Past Service Plan. The Compensation Committee,
by its approval and adoption noted below, waives any qualifying
requirements relating to vesting or distribution of the Xxxxxxx
Companies, Inc. Executive Past Service Benefit Plan (the "Past
Service Plan") as such requirements apply to the award made to
Xxxxxx on November 1, 1997 of $2,364,000 plus interest at the rate
of 7.5% from November 1, 1997 until paid. This benefit will be
paid in accordance with the election previously made by Xxxxxx
pursuant to the terms of the Past Service Plan and will commence on
November 1, 1999 after Xxxxxx has attained age 55; provided,
however, in the event of a "Change of Control" as defined in the
Past Service Plan, the benefit shall commence on the 1st day of the
month following the "Change of Control." Under the Internal
Revenue Service Code of 1986, as amended (the "IRC"), and the
regulations promulgated thereunder, the Past Service Plan benefit
will be subject to applicable employment taxes (FICA) and Medicare
taxes payable for the calendar year 1998. Xxxxxx has paid the
maximum employment taxes (FICA), and therefore no employment taxes
(FICA) will be due upon the execution of this Agreement. However,
the Company will withhold from the Salary Replacement Amount a sum
equal to 1.45% of Xxxxxx'x Past Service Plan benefit, representing
Xxxxxx'x Medicare taxes due on the Past Service Plan benefit.
6. Other Benefits.
6.1 The Excess Plan. The Company has determined
that Xxxxxx, upon attaining age 55, will qualify for early
retirement income under the Consolidated Retirement Plan for
Xxxxxxx Companies, Inc. and Its Subsidiaries (the "Qualified
Plan"). Conditioned upon Xxxxxx qualifying for early retirement
income under the Qualified Plan, the Company hereby covenants and
agrees that Xxxxxx shall be eligible to receive annual payments
under the Xxxxxxx Companies, Inc. Executive Deferred Compensation
Plan (the "Excess Plan") upon the attainment by Xxxxxx of age 55;
provided, however, the Company, through the Compensation Committee,
has agreed and does hereby waive one (1) year of the 3% actuarial
reduction of benefits for early retirement prior to age 62 such
that upon Xxxxxx'x attainment of age 55 he would be entitled to
benefits under the Excess Plan as if he were 56. (For example, age
56 benefits of $161,798 per annum would be payable at age 55 and
age 62 benefits of $180,000 would be payable at age 61). Xxxxxx
shall be eligible to commence receiving benefits under the Excess
Plan upon attaining age 55, which benefits shall be paid in
accordance with the foregoing and the Excess Plan and Xxxxxx'x
elections as therein provided.
6.2 Life Insurance. The Company shall acquire a
standard rated paid up whole life insurance policy on Xxxxxx'x life
in the amount of $500,000 written by Metropolitan Life Insurance
Company, Hartford, Connecticut (the "Policy"). The Company shall
make application therefor as soon as shall be practicable following
the execution of this Agreement. The Company shall pay the
standard rate premium under the Policy and Xxxxxx shall pay any ex-
cess rate over the standard rate. Xxxxxx designates Xxxxx X.
Xxxxxx, trustee, as the primary beneficiary for the first $500,000
of the death benefit under the Policy. The Company shall be the
owner and secondary beneficiary and entitled to all dividends and
any death benefit proceeds under the Policy in excess of $500,000.
Under the Policy, Xxxxxx shall have the right to change the primary
beneficiary upon written notice to the Company and to Metropolitan
Life Insurance Company. Xxxxxx shall be responsible for all income
taxes resulting from the acquisition and maintenance of the Policy
by the Company.
6.3 Medical Insurance Premium Reimbursement. If
Xxxxxx exercises his right to continued coverage under the Xxxxxxx
Companies, Inc. Health Choice Medical Plan (the "Medical Plan")
pursuant to COBRA, the Company will pay the monthly premium for
such coverage in the approximate amount of $336 per month for up to
eighteen (18) months commencing July 18, 1998, or until Xxxxxx no
longer qualifies for continued coverage under COBRA due to
eligibility to participate in a group medical plan sponsored by or
available through another employer providing equivalent benefits to
his medical coverage with the Company, whichever is the earlier to
occur. Thereafter, to the extent Xxxxxx is eligible for coverage
as a retiree under the Medical Plan, the Company will pay the cost
of such coverage in the approximate amount of $5,000 per year until
Xxxxxx is eligible for Medicare or similar coverage or until he no
longer qualifies to participate in retiree medical coverage under
the Medical Plan for any reason provided therein.
6.4 Relocation/Home Sale Allowance. The Company
will pay Xxxxxx'x relocation expenses and will reimburse brokerage
expenses on the sale of Xxxxxx'x residence located at 00000 Xxxxxx
Xxxxx, Xxxxxxxx Xxxx, Xxxxxxxx 00000 up to $40,000 in the aggre-
gate. Xxxxxx shall present to the Company's Senior Vice President
and General Counsel vouchers representing payment by Xxxxxx of such
amounts together with such other documentation reasonably required
by such officer and the Company shall pay such reimbursement within
thirty (30) days of receipt.
6.5 Country Club. The Company shall reimburse
Xxxxxx for his monthly dues at the Quail Creek Golf and Country
Club, Oklahoma City, Oklahoma from August 1, 1998 through December
31, 1998 upon his presentation to the Company's Senior Vice
President and General Counsel of satisfactory evidence of such
payment by Xxxxxx.
6.6 Automobile. The Company will transfer title
to the 1996 Cadillac Seville (the "Automobile") Xxxxxx was driving
on July 18, 1998 plus an amount for income taxes owed by Xxxxxx as
a result of the receipt of the Automobile (the "Gross-Up Payment").
The Gross-Up Payment shall be an amount sufficient to cover payment
by Xxxxxx of all federal and state income and payroll taxes
assessed on the value of the Automobile and on the Gross-Up Payment
(including any interest or penalties imposed with respect to such
taxes). The amount of the Gross-Up Payment required to be paid to
Xxxxxx shall be determined by Deloitte & Touche, Oklahoma City,
Oklahoma, which shall provide detailed supporting calculations both
to the Company and to Xxxxxx within fifteen (15) business days from
a request by the Company or Xxxxxx. The Xxxxx-Up Payment deter-
mined under this paragraph 6.6 shall be paid to Xxxxxx within five
(5) days of the later of (i) receipt of such determination and
(ii) transfer of title, but in no event more than thirty (30) days
after the transfer of title. The cost of performing all calcula-
tions with respect to determination of the applicable Gross-Up
Payment shall be paid solely by the Company.
7. Release and Indemnification.
7.1 Xxxxxx'x Release of the Company. Xxxxxx
agrees to execute the General Release attached as Exhibit A
contemporaneously with signing this Agreement. The General Release
(Exhibit A) shall except the obligations of the Company contained
in this Agreement. Xxxxxx represents to the Company that between
July 18, 1998 and the date he signs this Agreement and the General
Release, he has not filed nor commenced and has not authorized any
other person to file or commence on his behalf any affidavit,
charge, action or complaint against the Company with any court or
judicial or administrative agency. Xxxxxx further agrees that in
the event he may attempt to revoke, repudiate or rescind the
General Release at any time in the future, he shall immediately
return to the Company all of the payments and benefits received by
him under this Agreement and that return to the Company of such
payments and benefits shall be a contractual prerequisite to any
legal action brought or arbitration sought by Xxxxxx.
7.2 The Company's Release of Xxxxxx. The Company
agrees to execute the General Release attached as Exhibit B contem-
poraneously with signing this Agreement. The General Release
(Exhibit B) shall except the obligations of Xxxxxx as contained in
this Agreement. The Company represents to Xxxxxx that between July
18, 1998 and the date it signs this Agreement and the General
Release, it has not filed nor commenced and has not authorized any
other person to file or commence on its behalf any affidavit,
charge, action or complaint against Xxxxxx with any court or
judicial or administrative agency. Nothing in this paragraph,
however, is intended to modify or abrogate the consequences of
Xxxxxx'x breach of this Agreement, as described in paragraph 12.
7.3 Indemnification of Xxxxxx by the Company. The
Company will indemnify Xxxxxx with respect to any threatened,
pending or civil action, suit or proceeding, administrative or
investigative, in which he is or becomes a party by reason of his
status or former status as an officer or director of the Company or
one of its subsidiaries. This commitment of indemnification shall
include expenses (including attorney's fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred in
connection with such actions, suits or proceedings; provided,
however, that this indemnification obligation shall be applicable
only in accordance with the Company's bylaws which permit such
indemnification of an officer or a director if the officer or
director acted in good faith and in a manner reasonably believed to
be in, or not opposed to, the best interest of the Company and,
with respect to any criminal action or proceeding, had no reason-
able cause to believe that such conduct was unlawful.
8. Obligations Regarding Pending and Future Litigation.
Xxxxxx agrees to assist the Company and its representatives and
attorneys as reasonably requested with respect to pending and
future litigation, arbitrations or other dispute resolutions. This
shall include, if requested, being available to the Company and its
representatives and attorneys for interviews, depositions and/or
trial or arbitration testimony related to any pending or future
litigation in which Xxxxxx is or has been involved or with respect
to which Xxxxxx has relevant information. The Company will
reimburse Xxxxxx for reasonable attorney's fees of counsel for
Xxxxxx chosen by the Company. The Company shall also reimburse
Xxxxxx for his reasonable travel expenses and costs incurred as
part of his consultation and assistance. In addition, after July
17, 2000, the Company will also pay Xxxxxx a per diem of $1,000 for
each day or portion of more than 50% of a day Xxxxxx, at the
request of the Company, assists the Company in matters as to which
Xxxxxx is not a named defendant or alleged co-conspirator.
9. Noncompetition and Nonsolicitation Obligation.
9.1 Noncompetition Clause. Xxxxxx agrees that for
a period of one (1) year following July 18, 1998, he shall not,
directly or indirectly, own any interest in, operate, control or
participate in, as a partner, director, a holder of more than 5% of
the outstanding voting shares, principal, officer, or agent of,
enter into the employment of, act as a consultant to, or perform
any services for any person, firm, business, or corporation which
is engaged in the food distribution and marketing business in any
state or market area in which the Company operates or supplies
customers; provided, however, this covenant may be waived in
writing by the Interim Chairman of the Board or the Chief Executive
Officer in the sole discretion of either of them to permit Xxxxxx
to act as a consultant in the marketing business.
9.2 Nonsolicitation of Employees. Xxxxxx agrees
that for a period of two (2) years following July 18, 1998, he will
neither directly nor indirectly solicit or attempt to solicit any
employee of the Company to terminate his/her employment, nor
solicit or attempt to solicit any employee of the Company to go to
work for another employer (including Xxxxxx), nor hire any employee
of the Company to work for another employer (including Xxxxxx).
9.3 Acknowledgment of Reasonableness/Agreement to
Modification. The Company and Xxxxxx acknowledge that they have
attempted to specify a reasonable period of time, a reasonable area
and reasonable restrictions to which this covenant not to compete
and covenant of nonsolicitation of employees shall apply. The
Company and Xxxxxx agree that if a court or arbitrator(s) should
subsequently determine that the scope and terms of either the
covenant not to compete or the covenant of nonsolicitation of
employees is greater than reasonably necessary to protect the
Company's interest, the Company will waive those terms which are
found by a court or arbitrator(s) to be greater than reasonably
necessary to protect the Company's interest, and the Company and
Xxxxxx shall request that the court or arbitrator(s) reform this
Agreement specifying a reasonable period of time and such other
reasonable restrictions as the court or arbitrator(s) deem
necessary and enforceable.
10. Other Precluded Employment. Xxxxxx agrees that,
except with the prior written consent of the Company, he will not
at any time hereafter be employed or otherwise act as an "expert
witness" or "consultant" or in any similar capacity in any
litigation, arbitration, regulatory or agency hearing or other
adversarial and investigatory proceeding involving the Company.
11. Property and Information of the Company.
11.1 Return and Restriction on Use of Company
Property. Xxxxxx acknowledges that from time to time in the course
of performing his duties as a director and officer of the Company,
he has had an opportunity to inspect and use certain exclusive
property of the Company, in which he has no right or proprietary
interest. Xxxxxx has returned or will immediately return all
Company property, except as otherwise provided in this Agreement,
including without limitation any of the Company information
described in subparagraph 11.2.
11.2 Restriction on Use of Company Information.
Xxxxxx agrees that he will not at any time hereafter make any
independent use of or disclose to any other person or organization
any of the Company's confidential, private or proprietary informa-
tion. This prohibition shall apply to any information concerning
the Company including without limitation both written and unwritten
information relating to operations; business planning and strategy;
finance; accounting; legal strategies; sales; personnel, salaries
and management; customer names, addresses and contracts; customer
requirements; costs of providing products and service; operating
and maintenance costs; and pricing matters. This prohibition shall
also apply to any trade secrets of the Company, including without
limitation any techniques, methods, processes, data and similar
information.
12. Conditions to Continued Payments and Benefits.
Xxxxxx agrees that the Company's continuing obligations and his
retention of any severance or other payments or benefits to be
provided by the Company under this Agreement and to which he is not
otherwise entitled shall be contingent not only upon his execution
of the General Release described in paragraph 7.1, but also his
ongoing compliance with his obligations described elsewhere in this
Agreement, including without limitation, the obligations specified
in paragraphs 8, 9, 10, 11 and 13. Accordingly, Xxxxxx agrees that
any material breach of his obligations under this Agreement at any
time in the future shall entitle the Company to cease all payments
and benefits otherwise to be made or provided under this Agreement
and shall also entitle the Company to obtain immediate reimburse-
ment from Xxxxxx of any and all such payments and the value of such
benefits as he has previously received hereunder and to which he is
not otherwise entitled.
13. Confidentiality of Agreement. The parties represent
that, except for Xxxxxx'x discussions with his spouse, the
Company's discussions with the Compensation Committee, the Board
and certain Xxxxxxx associates on a need to know basis, and each of
their discussions with their respective attorneys, accountants or
other professional, confidential consultants, they have not
disclosed any details or specific provisions of the negotiations
with respect to this Agreement, nor its terms with any third
parties at any time prior to the execution hereof. The parties
further agree to maintain such negotiations and the terms of this
Agreement in confidence in the future and not to disclose such
information to third parties at any time, except as required to
obtain tax advice or, as mandated by the rules and regulations of
the Securities Exchange Commission or other government agency, for
purposes of enforcement of this Agreement or pursuant to court
order.
14. Future Comments and Public Statements. The Company
and Xxxxxx agree not to make any comments in the future with
respect to the other which would disparage or be likely to cause
harm to the good name and reputation of the other, including the
subsidiaries, officers, directors and associates of the Company.
The Company and Xxxxxx further agree that any public information
releases or statements relating to Xxxxxx and the Company, except
such public statements and filings as are mandated by the rules and
regulations of the Securities Exchange Commission or other
government agency, shall be prepared through coordination between
them and/or their attorneys and shall be mutually agreeable to both
parties prior to release.
15. Arbitration of Disputes. The parties agree that the
subject matter of this Agreement relates to interstate commerce.
All disputes, claims or controversies between Xxxxxx and the
Company arising out of or related to this Agreement or out of the
parties' prior employment relationship shall be settled by arbi-
tration as provided herein. This agreement to arbitrate shall
survive the termination or rescission of this Agreement. All
arbitration shall be in accordance with the Rules of the American
Arbitration Association and shall be undertaken pursuant to the
Federal Arbitration Act. Arbitration will be held in Oklahoma
City, Oklahoma unless the parties mutually agree to another loca-
tion. The decision of the arbitrator(s) will be enforceable in any
court of competent jurisdiction. In the event the Company is the
prevailing party in such an arbitration, each party shall bear
its/his own costs and attorneys' fees in connection with the
arbitration; if, however, Xxxxxx is the prevailing party in such
arbitration, the Company shall pay his reasonable costs and
attorneys' fees. The parties agree that punitive, liquidated or
indirect damages shall not be awarded by the arbitrator(s).
Nothing in this agreement to arbitrate shall preclude either party
from obtaining injunctive relief from a court of competent
jurisdiction prohibiting any on-going breaches by the other of his
(its) continuing obligations pending arbitration.
16. No Representations. In executing this Agreement and
the General Releases attached as Exhibits A and B, it is understood
and expressly agreed that, except for representations specifically
made in this Agreement, the parties shall rely solely on their own
independent analysis, judgment, belief and knowledge and the advice
of their respective attorneys. The parties represent to one
another that they have not been influenced in any way whatsoever in
executing this Agreement and the attached Exhibits A and B by any
representations made by the other or the other's attorneys or
representatives. The parties and their attorneys expressly except
and assume the risk that their independent analysis and their own
judgments, beliefs and knowledge on which they rely in executing
this Agreement and the General Releases attached as Exhibits A and
B may prove to be inaccurate or different and expressly agree that
the terms of this Agreement shall be in all respects effective and
not subject to termination or rescission by any such inaccuracy or
difference.
17. Successors Bound; Assignability. This Agreement
shall be binding on Xxxxxx and the Company and their respective
heirs, successors and assigns, including without limitation any
corporation or other entity into which the Company may be merged,
reorganized or liquidated, or by which it may be acquired. The
Company's obligations under this Agreement may be assigned without
limitation; however, as the obligations to be performed and the
services to be rendered by Xxxxxx under this Agreement are unique
based upon his skills and qualifications, Xxxxxx'x obligations
under this Agreement may not be assigned nor may Xxxxxx'x right to
receive various amounts of money be assigned, pledged, mortgaged
nor hypothecated in any manner whatsoever.
18. Taxation. All payments made to Xxxxxx in accordance
with paragraphs 2.1 (Salary Replacement Amount), 2.2 (EVA Target
Bonus), 2.3 (Bonus Bank), 2.4 (Accrued Vacation), 3 (Stock
Options), 4 (Restricted Stock Awards), 5 (The Past Service Plan),
6.1 (The Excess Plan), 6.2 (Life Insurance), 6.3 (Medical Insurance
Premium Reimbursement), 6.4 (Relocation/Home Sale Allowance), 6.5
(Country Club), 6.6 (Automobile) and any other payment required
under this Agreement will be reduced by or Xxxxxx will pay
applicable withholding and employment taxes (FICA) and Medicare
taxes, as assessed under the IRC and the regulations promulgated
thereunder, and the applicable state tax laws. The amount of such
reduction for applicable withholding and employment taxes (FICA)
and Medicare taxes shall be determined by the Company in accordance
with the IRC and the regulations promulgated thereunder and the
applicable state tax laws and the regulations promulgated there-
under as interpreted by the Company in its sole discretion. It is
further agreed by Xxxxxx, in the event it is determined that any
additional FICA or Medicare taxes are due by the Company with
respect to payments which have been or are to be made to Xxxxxx
under this Agreement or any plan, program or agreement referenced
under this Agreement, and if such taxes have not previously been
withheld by the Company, then, Xxxxxx shall reimburse the Company
for such taxes. In the event that Xxxxxx fails to reimburse the
Company for such taxes, within five (5) days from the Company's
request, the Company may offset the amount of such taxes from sums
which are to be paid Xxxxxx under this Agreement or under any plan,
program or agreement referenced in this Agreement.
19. Severability. In the event that any one or more of
the provisions of this Agreement or any word, phrase, clause,
sentence or any portion thereof shall be deemed to be illegal or
unenforceable for any reason, such provision or portion shall be
modified or deleted in such a manner as to make this Agreement, as
modified, legal and enforceable to the fullest extent permitted
under applicable law.
20. Entire Agreement. This Agreement supersedes all
prior agreements or understandings and, together with the General
Releases attached as Exhibits A and B, constitutes the entire
Agreement between the Company and Xxxxxx with regard to the subject
matter hereof. There are no agreements, understandings, specific
restrictions, warranties or representations relating to such
subject matter between the parties (or any of their respective
representatives or agents) other than those set forth herein.
21. Counterparts. This Agreement may be executed in two
or more counterparts, each of which will take effect as an original
and all of which shall evidence one and the same Agreement.
22. Amendment and Modification. This Agreement may only
be amended, modified or terminated prior to the end of its term by
the mutual agreement of the parties. Such agreement by the Company
shall be made by the affirmative vote of a majority of the
Compensation Committee.
23. No Admission of Wrongdoing. Nothing in this
Agreement shall be construed in any way as an admission by the
Company of any act, practice or policy of discrimination or a
breach of contract, in violation of law or otherwise.
24. Notices. All notices and other communications
hereunder shall be in writing and shall be given by hand delivery
to the other party or by telefacsimile transmission, registered or
certified mail, return receipt requested, postage prepaid,
addressed as follows:
If to Xxxxxx:
Xx. Xxxxxx X. Xxxxxx
00000 Xxxxxx Xxxxx
Xxxxxxxx Xxxx, Xxxxxxxx 00000
Fax: (000) 000-0000 (in care of Vedder, Price,
Xxxxxxx & Kammholz)
With a copy to:
Vedder, Price, Xxxxxxx & Kammholz
000 Xxxxx Xx Xxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. Xxxxxxx, Esq.
Xxxxxxx X. Xxxxx, Esq.
Fax: (000) 000-0000
If to the Company:
Xxxxxxx Companies, Inc.
0000 Xxxxxxxxx Xxxx.
P. O. Xxx 00000
Xxxxxxxx Xxxx, XX 00000
Attention: Xxxxx X. Xxxxxx, Senior Vice President,
General Counsel and Secretary
Fax: (000) 000-0000
With a copy to:
McAfee & Xxxx A Professional Corporation
Tenth Floor, Two Leadership Square
000 X. Xxxxxxxx
Xxxxxxxx Xxxx, XX 00000-0000
Attention: Xxxx X. Xxx, Esq.
Fax: (000) 000-0000
and
Wachtell, Lipton, Xxxxx & Xxxx
00 Xxxx 00xx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxxxxx X. Xxxxxx, Esq.
Fax: (000) 000-0000
or to such other address as either party shall have furnished to
the other in writing in accordance herewith. Notice and communica-
tions shall be effective when actually received by the addressee.
25. Governing Law. Except as provided in paragraph 15,
the terms of this Agreement shall be governed by and construed in
accordance with the laws of the State of Oklahoma.
EXECUTED the day and year first above written.
"COMPANY" XXXXXXX COMPANIES, INC., an
Oklahoma corporation
By XXXXXXX X. XXXX
Xxxxxxx X. Xxxx
President and Chief Operating
Officer
"XXXXXX" XXXXXX X. XXXXXX
Xxxxxx X. Xxxxxx
APPROVAL AND ADOPTION
The foregoing Settlement and Severance Agreement
between Xxxxxxx Companies, Inc. and Xxxxxx X. Xxxxxx is hereby
approved, ratified and adopted this 28th day of August, 1998.
COMPENSATION AND ORGANIZATION
COMMITTEE
By XXX X. XXXXXX
Xxx X. Xxxxxx, Chairman
EXHIBIT A
NOTICE: Various State and Federal laws, including
Title VII of the Civil Rights Act of 1964, the Age Discrimination
in Employment Act, the Americans With Disabilities Act and the
Veterans Reemployment Rights Act, prohibit employment discrimina-
tion based on age, sex, race, color, national origin, religion or
disability or veteran status. These laws are enforced through
the Equal Opportunity Employment Commission (EEOC), the United
States Department of Labor and state human rights commissions, or
similar agencies. Before executing this General Release, you
should review it carefully and consult with your lawyer. You
have up to twenty-one (21) days to decide whether you wish to
sign it. Further, you may revoke this General Release within
seven (7) days following execution and this General Release shall
not become effective or enforceable until that revocation period
has expired. Any revocation must be in writing and must be
received by Xxxxx X. Xxxxxx, Senior Vice President, General
Counsel and Secretary, Xxxxxxx Companies, Inc., 0000 Xxxxxxxxx
Xxxxxxxxx, Xxxxxxxx Xxxx, Xxxxxxxx 00000, within the seven-day
period following execution of this General Release.
-----------------------------------------------------------------
GENERAL RELEASE
In consideration of the terms and provisions of the
Settlement and Severance Agreement and other consideration
offered to me by Xxxxxxx Companies, Inc. ("Xxxxxxx") as described
therein entered into as of August 28, 1998 (the "Agreement"), and
the benefits I will receive thereunder, I, on behalf of myself
and my heirs, successors and assigns, release and discharge
Xxxxxxx, its parent, successors, affiliates, subsidiaries,
partners, employees, officers, directors and agents (hereinafter
referred to collectively as the "Company") from all claims,
liabilities, demands and causes of action known or unknown, fixed
or contingent, which I may now have or claim to have against the
Company as a result of my past employment and the termination of
that relationship with the Company or otherwise with respect to
any acts, omissions or events occurring prior to the execution of
this General Release, and do hereby covenant not to file a
lawsuit to assert such claims. This includes but is not limited
to claims arising under Federal, State, or local laws prohibiting
employment discrimination (including the Age Discrimination in
Employment Act), relating to any prior written or oral contracts
pertaining to employment or severance or growing out of any legal
or equitable restrictions on the Company's rights not to continue
an employment relationship with its employees, claims for unem-
ployment insurance benefits from the Oklahoma Employment Security
Commission or other similar agencies in Oklahoma or any other
state, claims under the Oklahoma Worker's Compensation Act or
other similar statutes in Oklahoma or any other state, but not to
include any claims under the Employee Retirement Income Security
Act with regard to vested rights in any of the Company's quali-
fied retirement plans. In addition, I hereby waive any rights
that I may have under the Age Discrimination in Employment Act as
a result of my past employment and the severance of that rela
tionship. This General Release excepts the obligations of the
Company as contained in the Agreement.
I have carefully reviewed and fully understand all the
provisions of the arrangement as described in the Agreement, this
General Release, and the foregoing Notice, which set forth the
entire agreement between me and the Company. I acknowledge that
the Company has given me a 21-day period which began on September
4, 1998, to consider this General Release and the Agreement and
has advised me to seek independent legal advice as to these
matters. I further acknowledge that I have not relied upon any
representation or statement, oral or written, by the Company not
set forth in those materials and documents.
DATED this 4th day of September, 1998.
----------------------------------
Xxxxxx X. Xxxxxx
STATE OF OKLAHOMA )
) ss:
COUNTY OF OKLAHOMA )
The foregoing instrument was acknowledged before me
this 4th day of September, 1998, by Xxxxxx X. Xxxxxx.
--------------------------------
Notary Public
My commission expires:
---------------------
[SEAL]
EXHIBIT B
GENERAL RELEASE
Xxxxxxx Companies, Inc. (the "Company"), for itself and
on behalf of its subsidiaries, predecessors, successors, offi-
cers, directors, shareholders, agents, employees, representa-
tives, heirs, successors, assigns, attorneys and insurers, hereby
fully releases, acquits and forever discharges Xxxxxx X. Xxxxxx
("Xxxxxx"), his agents, representatives, heirs, successors,
assigns, attorneys and insurers from any and all claims, demands
and causes of action, for damages, or any other relief, in law or
equity, arising out of, attributable to or related to the employ-
ment of Xxxxxx by the Company and for his acting as an officer
and director of the Company with respect to any acts, omissions
or events occurring prior to the execution of this General
Release. This General Release excepts (i) the obligations of
Xxxxxx as contained in that certain Settlement and Severance
Agreement between the Company and Xxxxxx dated as of August 28,
1998, and (ii) Xxxx Xxxx Xxxxxx, Xx. v. Xxxxxx X. Xxxxxx, et al.,
CIV 96-1679-M and Xxxxxxx Xxxxxxxxx v. Xxxxxx X. Xxxxxx, et al.,
CIV 96-1808-M, both pending in the United States District Court
for the Western District of Oklahoma, and any successor or other
derivative case or cases making the same or similar allegations.
DATED this 4th day of September, 1998.
XXXXXXX COMPANIES, INC.
By
Xxxxx X. Xxxxxx
Senior Vice President,
General Counsel and Secretary
STATE OF OKLAHOMA )
) ss:
COUNTY OF OKLAHOMA )
The foregoing instrument was acknowledged before me
this 4th day of September, 1998, by Xxxxx X. Xxxxxx as Senior
Vice President, General Counsel and Secretary of Xxxxxxx
Companies, Inc.
---------------------------------
Notary Public
My commission expires:
----------------------
[SEAL]
