Exhibit 10(xi)
CONSULTING AGREEMENT
This CONSULTING AGREEMENT, dated this 10th day of April, 2000, by and
between Xxxxxxx-Xxxxxx Corporation, a Delaware corporation (the "Company") and
Xxxxx Xxxxx ("Xxxxx").
WITNESSETH:
WHEREAS, Xxxxx has been serving as the Chief Executive Officer and as a
member of the Board of Directors of the Company (the "Board");
WHEREAS, Xxxxx desires to retire from his position as the Chief
Executive Officer of the Company, and otherwise as an employee and officer of
the Company and all of its affiliates effective as of April 10, 2000, (the
"Retirement Date");
WHEREAS, in contemplation of compensation and benefit arrangements for
Xxxxx such as are provided herein the parties determined that no award would be
made in November 1999 to Xxxxx under the Long-Term Incentive Plan of the
Company;
WHEREAS, the parties hereto desire that, commencing after the
Retirement Date, Xxxxx will serve as a consultant to the Company as set forth
herein; and
WHEREAS, the parties desire to set forth the exact nature and the
amount of compensation and benefits to be provided to Xxxxx in respect of his
prior service as an employee and his consulting services to the Company.
NOW THEREFORE, the parties hereto agree as follows:
I. Retirement
1.1 Retirement from Position as Chief Executive Officer.
Xxxxx hereby confirms his retirement from his position as Chief
Executive Officer of the Company and hereby resigns, effective as of the
Retirement Date, from all of his other positions as an officer of the Company
and as a director and officer of each of its affiliates and, effective as of the
Retirement Date, Xxxxx shall cease to be an employee of the Company and each of
its affiliates for all purposes. Following the Retirement Date, Xxxxx shall
continue to serve as a member of the Board, subject to subsequent election of
the shareholders of the Company, and shall also serve the Company as a
consultant as provided for herein. Xxxxx'x status as a director of the Company
will not be affected by any provisions of this Section 1.1.
1.2. Compensation and Related Matters.
(a) Lump Sum Payment. The Company shall pay Xxxxx within
thirty (30) days after the Retirement Date, a lump sum amount equal to $600,000,
less deductions required by law, it being understood and agreed that the payment
of such sum shall be considered cash compensation earned while Xxxxx was an
employee of the Company, provided that such payment shall not be made until the
eighth day following the execution of this Agreement by Xxxxx.
(b) Medical, Dental and Prescription Benefits; Certain
Insurance Benefits. During the period commencing on the Retirement Date and
ending on October 9, 2004, the Company shall continue on behalf of Xxxxx and his
spouse the medical, dental, and prescription drug benefits provided to Xxxxx and
his spouse immediately prior to the Retirement Date. The foregoing shall be in
full satisfaction of the Company's obligation to Xxxxx to provide continuation
of coverage under Section 4980B of the Internal Revenue Code of 1986, as amended
(the "Code") and Sections 601-608 of the Employee Retirement Income Security Act
of 1974, as amended ("ERISA"). In addition, beginning with the expiration of
such period, the Company will reimburse Xxxxx, promptly after receipt of
evidence of payment thereof, for all contributions or premiums paid for coverage
under Medicare Supplemental Insurance ("Medigap") policies providing, to the
extent available, the benefits referred to in the first sentence of this Section
1.2(b) for Xxxxx and his spouse, for the remainder of their lives. During the
"Consulting Period," as defined in Section 2.1 of this Agreement, Xxxxx shall
also be entitled to that business travel accident and worker's compensation
insurance which the Company offers consultants to the Company in the ordinary
course of business, paid at Company expense.
(c) Automobile. The Company shall offer to sell to Xxxxx the
automobile currently provided to him by the Company, at wholesale value, in
accordance with the terms of the Company's current automobile policy.
(d) Financial Counseling. During the period extending from the
date of this Agreement to December 31, 2002, the Company will continue to
provide Xxxxx with financial counseling services of The Ayco Company, LP
("Ayco") substantially equivalent to those heretofore provided to him by Ayco,
such services to be provided at the expense of the Company.
(e) Withholding. The Company shall have the right to deduct
from any amounts payable under this Section 1.2, any taxes or other amounts
required by law to be withheld.
II. Consulting Period
2.1. Consulting Services.
During the period commencing on the Retirement Date and ending
on the third anniversary of the Retirement Date, April 9, 2003, (the "Consulting
Period"), Xxxxx agrees to serve the Company as a consultant and render such
advisory and consulting services to the Company and its affiliates in connection
with the business of the Company and its affiliates as may reasonably be
requested by the Board or the Chief Executive Officer of the Company, having due
regard to Xxxxx'x health, residence and personal circumstances at the time, in
connection with any matter with respect to which he has experience or special
competence by reason of his prior employment with the Company (the "Consulting
Services"). The Consulting Services shall be rendered at such locations as shall
be mutually convenient to the Company and Xxxxx. The Company agrees that the
Consulting Services shall be appropriate for a former Chief Executive Officer of
the Company.
2.2. Consulting Fees.
In consideration for the Consulting Services to be provided
the Company and for the acceptance of the terms contained in this Agreement,
provided Xxxxx is then available to perform Consulting Services for the Company,
and provided further, that Xxxxx is not in breach of, or has not committed a
material breach (which has not been cured), of any of the covenants contained in
Section 3.1 hereof,
(a) during the twelve (12) month period commencing on the
first anniversary of the Retirement Date, April 10, 2001,
the Company shall pay Xxxxx, in equal monthly
installments, a consulting fee at the annual rate of
$300,000; and
(b) during the twelve (12) month period commencing on the
second anniversary of the Retirement Date, April 10, 2002,
the Company shall pay Xxxxx, in equal monthly
installments, a consulting fee at the annual rate of
$200,000 (together with the payments to be made under
clause (a) of this Section 2.2, the "Consulting Fees").
During the Consulting Period, Xxxxx shall not be entitled to
compensation in addition to the Consulting Fees for serving as a member of the
Board. At any time while Xxxxx is serving on the Board following the Consulting
Period, Xxxxx shall be entitled to receive the same director fees and/or other
compensation that is paid by the Company to its outside directors generally for
their services on the Board, to the extent that Xxxxx, as a former employee of
the Company, is eligible therefor.
2.3. Reimbursement of Expenses.
During the Consulting Period, the Company shall promptly pay
Xxxxx the reasonable expenses incurred by him in the performance of the
Consulting Services, and his duties as a director of the Company, including,
without limitation, those incurred in connection with business related travel or
entertainment, or, if such expenses are paid directly by Xxxxx, shall promptly
reimburse him for such payment, provided that Xxxxx properly accounts therefor
in accordance with the Company's current expense reimbursement policy.
2.4. Non-Employee Status.
Xxxxx acknowledges that during the Consulting Period and
thereafter he will not be an "employee" (or person of similar status) of the
Company or any of its affiliates for purposes of the Code. Xxxxx acknowledges
that he will not be paid any "wages" (as defined in the Code) in respect of the
Consulting Services under Section 2.2 of the Agreement, and that he shall be
solely responsible for all taxes imposed on him by reason of the payment of the
Consulting Fees and/or any other compensation, benefits or other amounts payable
in respect of the Consulting Services.
III. General Provisions
3.1. Covenants.
(a) Unauthorized Disclosure. Xxxxx agrees and understands that
in his position with the Company, Xxxxx has been and will be exposed to and has
and will receive information relating to the confidential affairs the Company
and its affiliates, including but not limited to technical information,
intellectual property, business and marketing plans, strategies, customer
information, other information concerning the products, promotions, development,
financing, expansion plans, business policies and practices of the Company, its
affiliates, and other forms of information considered by the Company to be
confidential and in the nature of trade secrets ("Confidential Information").
Xxxxx agrees that during the Consulting Period and thereafter, Xxxxx will not
disclose such Confidential Information, either directly or indirectly, to any
third person or entity without the prior written consent of the Company;
provided, however, that (i) Xxxxx shall have no such obligation to the extent
such information is or becomes publicly known other than as a result of Xxxxx'x
breach of his obligations hereunder and (ii) Xxxxx may, after giving prior
notice to the Company to the extent practicable under the circumstances,
disclose such information to the extent required by applicable law or
governmental regulation or judicial or regulatory process. This confidentiality
covenant has no temporal, geographical or territorial restriction. Upon the
later of termination of the Consulting Period, or the conclusion of his service
as a director of the Company, Xxxxx will, to the extent requested by the Company
in writing, promptly supply to the Company all property, keys, notes, memoranda,
writings, lists, files, reports, customer lists, correspondence, tapes, disks,
cards, surveys, maps, logs, machines, technical data or any other tangible
product or document which has been produced by, received by or otherwise
submitted to Xxxxx during or prior to the Consulting Period or his service as a
director of the Company.
(b) Non-competition. By and in consideration of the Company's
entering into this Agreement and the payments to be made and benefits to be
provided by the Company hereunder and in consideration for the amounts received
and to be received by Xxxxx hereunder, and further in consideration of Xxxxx'x
exposure to Confidential Information, Xxxxx agrees that he will not, during the
Consulting Period, or so long as he is receiving benefits under this Agreement,
whichever is greater (the "Non-competition Term"), directly or indirectly, own,
manage, operate, join, control, be employed by, or participate in the ownership,
management, operation or control of, or be connected in any manner with,
including but not limited to holding any position as a shareholder, director,
officer, consultant, independent contractor, employee, partner, or investor in,
any Restricted Enterprise (as defined below); provided that in no event shall
ownership of less than 1% of the outstanding equity securities of any issuer
whose securities are registered under the Securities and Exchange Act of 1934,
as amended, standing alone, be prohibited by this Section 3.1(b). For purposes
of this paragraph, the term "Restricted Enterprise" shall mean any person,
corporation, partnership or other entity that competes, directly or indirectly,
with any business or activity conducted or proposed to be conducted by the
Company or any of its subsidiaries as of the Retirement Date.
(c) Non-solicitation. During the Non-competition Term, Xxxxx
shall not, and shall not cause any other person to, interfere with or harm, or
attempt to interfere with or harm, the relationship of the Company or any of its
affiliates with, or endeavor to entice away from the Company or any of its
affiliates, or hire, any person who at any time during the Xxxxx'x employment
with the Company or the Consulting Period was an employee or customer of the
Company or any of its affiliates or otherwise had a material business
relationship with the Company or any of its affiliates.
(d) Remedies. Xxxxx agrees that any breach of the terms of
this Section 3.1 would result in irreparable injury and damage to the Company
and/or its affiliates for which the Company and/or its affiliates would have no
adequate remedy at law; Xxxxx therefore also agrees that in the event of said
breach or any threat of breach, the Company and/or its affiliates, as
applicable, shall be entitled to an immediate injunction and restraining order
to prevent such breach and/or threatened intentional breach and/or continued
breach by Xxxxx and/or any and all persons or entities acting for or with Xxxxx,
without having to prove damages, in addition to any other remedies to which the
Company and its affiliates may be entitled at law or in equity. The terms of
this paragraph shall not prevent the Company and its affiliates from pursuing
any other available remedies for any breach and/or threatened intentional breach
hereof, including but not limited to the recovery of damages from Xxxxx. The
parties hereto further agree that the provisions of the covenants contained in
this Section 3.1 are reasonable and necessary to protect the businesses of the
Company and its affiliates because of Xxxxx'x access to Confidential Information
and his material participation in the operation of such businesses. Xxxxx hereby
acknowledges that due to the global aspects of the Company's and its affiliates'
businesses and competitors it would not be appropriate to include any geographic
limitation on this Section 3.1. Should a court or arbitrator determine, however,
that any provision of the covenants contained in this Section 3.1 are not
reasonable or valid, either in period of time, geographical area, or otherwise,
the parties hereto agree that such covenants should be interpreted and enforced
to the maximum extent which such court or arbitrator deems reasonable or valid.
The existence of any claim or cause of action by Xxxxx against
the Company or its affiliates under this Agreement shall not constitute a
defense to the enforcement by the Company of the covenants contained in Section
3.1(a).
Anything contained in Section 3.1(d) to the contrary
notwithstanding, the Company shall be required to give Xxxxx prior written
notice of any claimed failure by him to comply with any provision of Section
3.1(b) or (c). If Xxxxx shall, within fifteen (15) days after such notice, be in
all material respects in compliance with the provisions of Section 3.1(b) or (c)
that is involved, the Company shall not, by virtue of the provisions of this
Agreement, be entitled to an immediate injunction and restraining order to
prevent such breach, provided, however, that nothing contained herein shall
relieve Xxxxx from any liability for actual damages occurring as a result of any
breach by him of the provisions of this Agreement.
3.2. Independence, Severability and Non-Exclusivity.
Each of the rights enumerated in this Agreement hereof shall
be independent of the others and shall be in addition to and not in lieu of any
other rights and remedies available to the Company or Xxxxx at law or in equity.
If any provision of this Agreement is hereafter construed or adjudicated to be
invalid or unenforceable, the same shall not affect the remainder of the
Agreement or rights or remedies which shall be given full effect without regard
to the invalid portions.
3.3 Non-Exclusivity of Rights
Nothing in this Agreement shall limit or reduce such rights as
Xxxxx may have under any of the following Plans of the Company and any amounts
or benefits which Xxxxx is or shall become entitled to receive under any of
those Plans shall be paid or provided in accordance with the provisions of the
Plans: Long-Term Incentive Plan; Retirement Plan; Retirement Benefits
Restoration Plan; Deferred Compensation Plan and Savings and Investment Plan.
Except as specifically provided in the next to last sentence of Section 2.2 of
this Agreement, nothing contained herein shall be interpreted or construed in
any way to limit the rights and duties the Company and Xxxxx owe each other by
virtue of Xxxxx'x status as a director of the Company.
3.4. Successors.
This Agreement shall be binding upon and shall inure to the
benefit of the Company and any and all of its successors and assigns, which, for
purposes of this Agreement, shall include a corporation or other entity
acquiring all or substantially all of the assets and business of the Company, as
the case may be, whether by operation of law or otherwise. The Company shall
require its successors and assigns to expressly assume and agree to perform this
Agreement in the same manner and to the same extent that the Company would be
required to perform it if no such succession or assignment had taken place.
Neither this Agreement nor any right or interest hereunder shall be assignable
or transferable by Xxxxx, his beneficiaries or legal representatives, except by
will or by the laws of descent and distribution. This Agreement shall inure to
the benefit of and be enforceable by Xxxxx'x legal personal representative.
3.5. Notices.
All notices, consents or other communications required or
permitted to be given by any party hereunder shall be in writing and shall be
given by personal delivery, or certified or registered mail, postage prepaid, as
follows:
To the Company:
Attn: __________________________
Xxxxxxx-Xxxxxx Corporation, Xxxxx 000
0000 Xxxx Xxxxxx Xxxx
Xxxxxxxxx, Xxx Xxxxxx 00000
To Xxxxx:
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or at such other address as either party may from time to time specify to the
other. Any notice, consent or other communication required or permitted to be
given hereunder shall be deemed to have been given on the date of mailing or
personal delivery and shall be conclusively presumed to have been received on
the fourth business day following the date of mailing or, in the case of
personal delivery, the day of delivery thereof, except that a change of address
shall not be effective until actually received.
3.6. Modifications and Waivers.
No term, provision or condition of this Agreement may be
modified or discharged unless such modification or discharge is authorized by
the Board and is agreed to in writing and signed by Xxxxx. No waiver by either
party hereto of any breach by the other party hereto of any term, provision or
condition of this Agreement to be performed by such other party shall be deemed
a waiver of similar or dissimilar provisions or conditions at the same or at any
prior or subsequent time.
3.7. Entire Agreement.
This Agreement constitutes the entire understanding between
the parties hereto relating to the subject matter hereof, superseding all
negotiations, prior discussions, preliminary agreements and agreements relating
to the subject matter hereof made prior to the date hereof.
3.8. Governing Law.
This Agreement shall be governed by and construed in
accordance with the laws of the State of New Jersey, without giving effect to
conflicts of laws principles thereof. Notwithstanding the foregoing, and except
with respect to any proceeding for an injunction and restraining order under
Section 3.1(d), if a dispute hereunder shall exist either party shall have the
right (but not the obligation), in addition to all other rights and remedies
provided by law, to compel arbitration of the dispute in the County of Bergen,
State of New Jersey, under the rules of the American Arbitration Association, by
giving written notice of arbitration to the other party within thirty (30) days
after notice of such dispute has been received by the party to whom notice has
been given; any decision and award under the arbitration shall be final and
binding on the parties hereto, and judgment on the decision and award may be
entered in any court of competent jurisdiction, and
3.9. Headings.
The headings contained in this Agreement are for reference
purposes only and shall not affect the meaning or interpretation of this
Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement on
the day and year set forth above.
/s/ Xxxxx Xxxxx
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Xxxxx Xxxxx
XXXXXXX-XXXXXX CORPORATION.
By: /s/ Xxxxx X. X'Xxxxx
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Name: Xxxxx X. X'Xxxxx
Title: General Counsel & Secretary
Approved: /s/ Xxxx X. Xxxxx
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Name: Xxxx X. Xxxxx
Title: Chairman,Executive
Compensation Committee
