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Ex.10.13
XXX X. XXXXXX, INC.
SEVERANCE AGREEMENT
Severance Agreement ("Agreement") made effective December 3, 1996
between Xxx X. Xxxxxx, Inc., a Pennsylvania corporation ("Weston") and Xxxxxxx
X. Xxxxxxxx ("Xxxxxxxx").
BACKGROUND
Xxxxxxxx is currently Weston's President and Chief Executive Officer
and a member of Weston's Board of Directors.
Weston and Xxxxxxxx have a written agreement with respect to Xxxxxxxx'x
employment ("Full Time Employment Agreement") dated as of December 1, 1988,
which is attached hereto as Exhibit X.
Xxxxxx and Xxxxxxxx have entered into (i) six separate Non-Qualified
Stock Option Agreements covering grants made on each of May 2, 1990, March 31,
1992, February 8, 1993, February 14, 1994, February 13, 1995, and February 26,
1996, respectively, attached hereto as Exhibits B-1 through B-6, (ii) a
Restricted Stock Award Agreement dated as of April 10, 1992 attached hereto as
Exhibit C, and (iii) two separate Supplemental Retirement Agreements dated as of
December 31, 1988 and December 31, 1990, respectively, attached hereto as
Exhibits D-1 and D-2. The agreements referred to in the preceding sentence are
collectively referred to as the "Benefit Agreements".
Weston acknowledges and recognizes that it would serve Weston's best
interests to provide Xxxxxxxx with certain additional benefits in the event that
Xxxxxxxx'x employment with Weston terminates under certain circumstances.
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Xxxxxxxx desires to receive the benefits on the terms and conditions
provided in this Agreement.
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual
covenants and agreements contained herein and intending to be legally bound
hereby, the parties hereto agree as follows:
1. Scope of Agreement. This Agreement shall become effective
if (i) Weston terminates Xxxxxxxx'x employment for reasons other than "cause"
(as defined in Section 2) or (ii) Xxxxxxxx resigns by reason of a "good-reason
resignation" (as defined in Section 3). This Agreement shall not apply if (i)
Xxxxxxxx'x employment with Weston terminates as a result of Xxxxxxxx'x death or
disability, (ii) Xxxxxxxx voluntarily terminates his employment for other than a
"good-reason resignation" or (iii) Weston terminates Xxxxxxxx'x employment for
"cause".
2. TERMINATION FOR CAUSE. For purposes of this Agreement,
"cause" shall mean that Xxxxxxxx committed or engaged in an intentional act of
(i) fraud, embezzlement or theft in connection with his duties or in the course
of his employment with Weston, (ii) wrongful damage to Weston's property, (iii)
wrongful disclosure of Weston's secret processes or confidential information, or
(iv) any other kind which is materially harmful to Weston. No act, or failure to
act, shall be deemed "intentional" if it was due primarily to an error in
judgment or negligence, but shall be deemed "intentional" only if done, or
omitted to be done, by Xxxxxxxx not in good faith and without reasonable belief
that his act or omission was in Weston's best interests.
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3. Good-Reason Resignation. For purposes of this Agreement,
Xxxxxxxx'x employment shall be deemed to have been terminated by reason of a
"good-reason resignation" if Xxxxxxxx elects in good faith to discontinue his
employment with Weston because his responsibilities, duties or authority have
changed materially from their level on the date hereof, which change
substantially reduces the rank or level, responsibility or scope of Xxxxxxxx'x
position with Weston (or its successor in the case of a merger, consolidation,
acquisition or transfer of substantially all of its business assets) below that
which he has on the date hereof as Weston's President and Chief Executive
Officer. If Xxxxxxxx elects to terminate his employment under this Section 3,
his written notice under Section 4 shall include the specific matter or matters
which Xxxxxxxx asserts constitute reason for a "good-reason resignation".
4. Employment Termination Date. Xxxxxxxx'x status as a Weston
employee shall terminate on the effective date the party initiating the
termination specifies in writing to the other ("Employment Termination Date"),
which date shall be at least 30 days after delivery of such notice. As of the
Employment Termination Date, Xxxxxxxx shall resign as a member of Weston's Board
of Directors, each committee thereof and the Board of Directors of each Weston
subsidiary.
5. Severance Benefits and Payment Conditions.
(a) Benefits. If Weston terminates Xxxxxxxx'x
employment for reasons other than "cause" or Xxxxxxxx resigns by reason of a
"good-reason resignation", Xxxxxxxx shall receive the severance benefits set
forth herein in place of those provided for in Section 7 of the Full-Time
Employment Agreement, provided Xxxxxxxx satisfies
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each of the requirements of subsections (b), (c) and (d) hereof. Xxxxxxxx'x
entitlements under the Benefit Agreements and any employee benefit plan,
including Weston's vacation plan, applicable to a class of Weston employees
which includes Xxxxxxxx shall be as provided for therein without regard to this
Agreement, except as expressly provided in this Section. The severance benefits
under this Agreement are as set forth below:
(i) Weston shall pay Xxxxxxxx the greater of
$23,350 per month or his monthly base salary for 16 months. For purposes of this
subsection, Xxxxxxxx'x monthly base salary shall be one-twelfth of the annual
base salary at the rate in effect on the Employment Termination Date. Weston
shall make the payments under this subsection beginning with the first calendar
month after the Employment Termination Date in accordance with its regular pay
policies for employees. If Xxxxxxxx dies before the last monthly payment, the
remaining payments shall be paid to his estate.
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(ii) Weston shall pay Xxxxxxxx the amount he
earned under its Salary-At-Risk Program for the portion of the calendar quarter
to and including his Employment Termination Date. Weston shall make the payment
on or about the date Weston makes Salary- At-Risk payments to participating
employees.
(iii) For purposes of the Restricted Stock
Award Agreement dated as of April 10, 1992 attached hereto as Exhibit C, (A) the
installment which would vest on April 10, 1997 shall be deemed vested if this
Agreement becomes effective before that date and (B) a "good-reason resignation"
shall be treated as an involuntary termination which is not for "cause" (as
defined in the Restricted Stock Award Agreement).
(iv) The annual amount payable under
subsection 6(f) of the Supplemental Retirement Agreement dated as of December
31, 1988 attached hereto as Exhibit D-1 shall be the greater of $42,000
(regardless of Xxxxxxxx'x length of active service with Weston) or the amount
otherwise payable under subsection 6(f) thereof.
(v) For purposes of the Supplemental
Retirement Agreement dated as of December 31, 1990 attached hereto as Exhibit
D-2, a "good-reason resignation" shall be treated as an involuntary termination
which is not for "cause" (as defined in the Supplemental Retirement Agreement).
(vi) Weston shall provide medical, dental
and prescription plan benefits for Xxxxxxxx on the same basis as in effect for
active employees for 16 months or until he sooner elects that such coverages
cease. After such 16-month period, Xxxxxxxx may elect continuation coverage
completely at his own expense as provided by law.
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(vii) Weston shall provide Xxxxxxxx
outplacement services at Weston's expense at the level in effect on the
Employment Termination Date for executive employees.
(viii) Weston shall pay Xxxxxxxx an
automobile allowance at the level in effect on the Employment Termination Date
for six months, beginning with the first calendar month after the Employment
Termination Date.
(b) Cooperation Requirement. Xxxxxxxx shall provide
Weston such information pertaining to his employment with Weston as he may have
and assist Weston to transfer his duties to such successor or successors as
Weston may designate. Weston shall reimburse Xxxxxxxx for all reasonable
expenses he incurs in fulfilling his obligations under the preceding sentence.
(c) Non-Competition Requirement. Weston's obligation
to make payments or provide benefits hereunder, including all payments under the
Benefit Agreements, shall terminate and Weston shall have all of the rights and
remedies provided for in Section 10 of the Full-Time Employment Agreement as
well as restitution of payments made or the cost of benefits provided hereunder
if Xxxxxxxx, without Weston's prior written approval, either directly or
indirectly, for his own account or for the account of another person or entity,
for a period of two years from and after the Employment Termination Date:
(i) acquires or holds a significant
financial interest in any competitor of Weston or any "Weston affiliate" (as
defined below);
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(ii) competes with Weston or any "Weston
affiliate" in soliciting any business from any person or entity that was at any
time during the two years immediately preceding the Employment Termination Date
a client of Weston or any "Weston affiliate" or potential client as to whom
Weston or any "Weston affiliate" had rendered a significant volume of service or
had a significant amount of direct business contact for the purpose of
soliciting future business; or
(iii) renders services to any competitor of
Weston or any "Weston affiliate", if such services are similar in nature (in
whole or in part) to services Xxxxxxxx rendered to Weston or any "Weston
affiliate" at any time during the two years immediately preceding the Employment
Termination Date.
For purposes of this Section, the term "Weston affiliate" shall mean any
business in which Weston owns directly or indirectly at least 50% of the equity
interests or 50% of the profit interests. This Section supersedes the
non-competition covenant of Section 8 of the Full Time Employment Agreement,
except as provided under Section 10 thereof. This Section replaces the
non-competition provisions of Section 13 of the Supplemental Retirement
Agreements until two years from the Employment Termination Date, at which time
such provisions become effective for a period of one additional year with
respect to benefits provided under the Supplemental Retirement Agreements as
modified by this Agreement.
(d) Release. Xxxxxxxx shall deliver an
executed release to Weston in the form attached as Exhibit E on or before the
Employment Termination Date.
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6. Acceleration Election. Weston may, at its option, at any
time or from time to time, in its absolute and sole discretion, accelerate the
time and the manner of making any one or more payments required by this
Agreement.
7. Non-Alienation. None of the rights or payments contemplated
under this Agreement may be sold, given away, assigned, transferred, pledged,
mortgaged, alienated, hypothecated or in any way encumbered or disposed of by
Xxxxxxxx, or any executor, administrator, heir, legatee, distributee, relative
or any other person or entity, whether or not in being, claiming under Xxxxxxxx
by virtue of this Agreement, and none of the rights or benefits contemplated by
this Agreement shall be subject to execution, attachment or similar process. Any
sale, gift, assignment, transfer, pledge, mortgage, alienation, hypothecation or
encumbrance, or other disposition of this Agreement or of such rights or
benefits contrary to the foregoing provisions, or the levy or any attachment or
similar process thereon, shall be null and void and without effect.
8. Taxes. Weston shall withhold from payments to Xxxxxxxx and
remit to the appropriate government agencies such payroll taxes and income
withholding as Weston determines is or may be necessary under applicable law
with respect to amounts paid under this Agreement.
9. General Obligation. The rights and benefits of Xxxxxxxx
hereunder shall be solely those of an unsecured creditor of Weston.
10. Waiver of Breach. Weston's failure to insist upon strict
compliance with any of the terms, covenants or conditions hereof shall not be
deemed a waiver of such term, covenant or condition, nor shall Weston's waiver
or relinquishment of any right or power
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hereunder at any one or more times be deemed a waiver or relinquishment of such
right or power at any other time or times.
11. Modification. This Agreement shall not be modified or
amended except by written instrument duly executed by Weston and Xxxxxxxx.
12. Severability. If any clause, sentence, paragraph, section,
or part of this Agreement shall be held by any court of competent jurisdiction
to be invalid, such judgment shall not affect, impair or invalidate any of the
other parts hereof.
13. Notices. Any notice required or permitted to be given
under this Agreement shall be sufficient if in writing and either hand-delivered
to the addressee or sent by registered or certified mail, if to Xxxxxxxx, to
Xxxxxxxx'x address as shown on Weston's books, and if to Weston, addressed to
the Chairman of Weston's Board of Directors at Weston's principal business
office
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located at Xxx Xxxxxx Xxx, Xxxx Xxxxxxx, Xxxxxxxxxxxx 00000-0000 or such other
address as Weston or Xxxxxxxx may designate in writing.
14. Arbitration. Any controversy or claim arising out of or
relating to this Agreement or the breach thereof shall be settled by arbitration
in the City of Philadelphia in accordance with the rules of the American
Arbitration Association then in effect. The decision of the arbitrator shall be
final and binding upon the parties, and judgment upon the decision rendered in
such arbitration may be entered in any court having jurisdiction.
15. Binding Agreement. This Agreement shall inure to the
benefit of and be binding upon Weston and its successors, whether by merger,
consolidation, stock purchase, acquisition of substantially all of Weston's
business assets, or otherwise, and upon Xxxxxxxx, his heirs and legal
representatives. This Agreement shall not be assignable by Xxxxxxxx and shall be
assignable by Weston only to a person or entity which becomes a successor in
interest to Weston and which is bound hereby.
16. Captions. The captions of the various provisions shall not
be deemed a part of this Agreement and shall not be construed in any way to
limit the contents hereof but are inserted herein only for reference and for
convenience of the parties.
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17. Governing State Law. This Agreement may be executed at
different times in different places, but all questions concerning the
construction or validity hereof, or relating to performance hereunder, shall be
determined in accordance with the laws of the Commonwealth of Pennsylvania.
IN WITNESS WHEREOF, Weston has caused this Agreement to be executed by
its duly authorized officers, and Xxxxxxxx has hereunto set his hand and seal as
of the day and year first above written.
ATTEST: XXX X. XXXXXX, INC.
By:
------------------- --------------------------- Secretary
(SEAL)
----------------------------
Xxxxxxx X. Xxxxxxxx
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EXHIBIT E
CROSS RELEASE
Xxx X. Xxxxxx, Inc. ("Weston") and Xxxxxxx X. Xxxxxxxx ("Xxxxxxxx")
entered into a Severance Agreement made effective December 3, 1996. To satisfy
the requirement of subsection 5(d) of the Severance Agreement, Xxxxxxxx and
Xxxxxx hereby grant the other the Releases set forth below:
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1. Release by Weston. Weston, on behalf of itself and its subsidiaries,
irrevocably and unconditionally releases and forever discharges Xxxxxxxx, his
heirs, administrators and legal representatives from any and all manner of
actions, causes, matters, suits, debts, dues, accounts, bonds, covenants,
agreements, judgments, claims, controversies, guarantees, warranties, damages,
labilities, or demands of any nature whatsoever in law or equity, whether or not
known to it, which it has ever had, now has, or hereafter can, shall or may
have, for, upon, or by reason of any matter, action, omission to act,
transaction, practice, conduct, thing or cause of any kind whatsoever from the
beginning of the world to the date it executes this Release. Such remise,
release and discharge of Xxxxxxxx includes, without limitation, any and all
claims under any and all federal or state statutes or the common law and extends
without limitation to any and all acts, practices or conduct by Xxxxxxxx whether
or not it has knowledge of such acts, omissions, practices, conduct or the
effects thereof, or if any such effects exist or may in the future exist as a
result of any acts, omissions, practices, or conduct that occurred prior to the
date it executes this Release.
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2. Limitation on Weston's Release. Notwithstanding the foregoing, this
Release shall not prevent Weston from enforcing its rights under the Severance
Agreement.
3. Release by Xxxxxxxx. Xxxxxxxx, for himself, his heirs, and personal
and legal representatives, except as provided in Section 4 hereof, does hereby
irrevocably and unconditionally release, remise and forever discharge Weston,
its subsidiaries, affiliates, divisions, officers, directors and employees (the
"Releasees"), and each of them, however denominated, past, present and future,
and their predecessors, successors and assigns, of and from any and all manner
of actions, causes, matters, suits, dues, bonds, judgments, debts, accounts,
covenants, agreements, claims, controversies, guarantees, warranties, damages,
liabilities, or demands of any nature whatsoever in law or equity, whether or
not now known to him which he ever had, now has or hereafter can, shall or may
have, for, upon, or by reason of any matter, action, omission to act,
transaction, practice, conduct, cause or thing of any kind whatsoever from the
beginning of the world to the date hereof. Such release, remise and discharge of
the Releasees includes without limitation any and all claims under any and all
federal and state statutes or common law and extends without limitation, to any
and all acts, practices or conduct by the Releasees, or the effects thereof,
whether or not Xxxxxxxx now has knowledge of such acts, omissions, practices,
conduct or the effects thereof, if any such effects exist or may in the future
exist as a result of any act, omission, practice or conduct that occurred prior
to the date hereof. Except as provided in Section 4, this release shall
specifically include, but not be limited to, the following:
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(a) any and all claims and matters of any kind which arise or
might arise, or which otherwise relate to Xxxxxxxx'x employment with Weston or
Xxxxxxxx'x termination of employment pursuant to the Severance Agreement;
(b) any and all claims for wages and benefits (including
without limitation salary, stock, stock options, commissions, bonuses, severance
pay, health and welfare benefits, vacation pay and any other fringe-type
benefit);
(c) any and all claims for wrongful discharge, breach of
contract (whether written or oral, express or implied), and implied covenants of
good faith and fair dealing;
(d) any and all claims for alleged employment discrimination
on the basis of age, race, color, religion, sex, national origin, veteran
status, disability and/or handicap, in violation of any federal, state or local
statute, ordinance, judicial precedent or executive order, including but not
limited to claims for discrimination under the following statutes: Title VII of
the Civil Rights Act of 1964, 42 U.S.C. Section2000e et seq., the Civil Rights
Act of 1866, 42 U.S.C. Section1981, the Age Discrimination in Employment Act, 29
U.S.C. Section621 et seq., the Older Workers Benefit Protection Act, the
Rehabilitation Act of 1972, 29 U.S.C. Section701 et seq., the Americans with
Disabilities Act, 42 U.S.C. Section1201 et seq., and the Pennsylvania Human
Relations Act, 43 P.S. Section951 et seq.;
(e) any and all claims under any federal or state statute
relating to employee benefits;
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(f) any and all claims in tort, including but not limited to
any claims for fraud, misrepresentation, defamation, interference with contract
or prospective economic advantage, intentional infliction of emotional distress
and/or negligence;
(g) any and all claims for additional commissions,
compensation or damages of any kind; and
(h) any and all claims for attorneys' fees and costs.
4. Limitation on Xxxxxxxx'x Release. This Release (a) shall not prevent
Xxxxxxxx from enforcing his rights under the Severance Agreement in accordance
with the terms thereof, (b) shall have no applicability to Weston's obligations
under the Benefit Agreements (as defined in the Severance Agreement) or benefits
payable under the terms of any "employee pension benefit plan" within the
meaning of the Employee Retirement Income Security Act of 1974, as amended, and
(c) shall not release Weston from any obligation it might otherwise have to
indemnify Xxxxxxxx and hold him harmless from any claims made against him
arising out of his activities as an officer or director of Weston, to the same
extent as Weston is or may be obligated to indemnify and hold harmless any other
officer or director.
5. Review and Revocation. Xxxxxxxx acknowledges that he has had the
opportunity to review this Release and to consider its terms with his attorneys
and advisors. Xxxxxxxx has twenty-one (21) days from the date of distribution of
this Release to him to review it and seven (7) days after the execution date of
this Release to revoke it. This Release shall not be effective unless and until
Xxxxxxxx executes it and the seven-day period has expired.
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UNDERSTOOD AND AGREED:
Witness: ------------------------
Xxxxxxx X. Xxxxxxxx
By
----------------------------------- Date
Attest: XXX X. XXXXXX, INC.
By By
--------------------------- ---------------------------- Secretary
(Corporate Seal)
Date
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STATE OF ____________________ :
: SS:
COUNTY OF ___________________ :
Before me, _________________ , on this day personally appeared Xxxxxxx
X. Xxxxxxxx, known to me to be the person whose name is subscribed to the
foregoing instrument, and acknowledged to me that he executed such instrument
for the purposes and consideration therein expressed.
Given under my hand and seal of office this _________ day of
____________________, _______.
___________________________
NOTARY PUBLIC in and for
___________________________
