[caad 234]a
Exhibit 10.1(y)
TERMINATION AGREEMENT
THIS TERMINATION AGREEMENT has been entered into as of the 31st day of
March, 2000, between XXXXX INC., a Delaware corporation (the "Company"),
XXXXX-SUNDSTRAND GmbH & CO. KG, a German partnership (the "German
Subsidiary") and XXXXX X. XXXXXXX (the "Executive").
Executive is employed as President and Chief Operating Officer of the
Company. Executive and the Company are parties to the Employment Agreement
dated September 19, 1996 (the "Employment Agreement") and Executive and the
German Subsidiary are parties to the Post-Retirement Care Agreement dated
September 19, 1996 and amended as of August 20, 1998 (the "PRC Agreement").
Executive and the Company mutually desire to terminate Executive's employment
with the Company and the Employment Agreement and PRC Agreement upon the
terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, and for other good and valuable consideration, the receipt
and sufficiency of which is hereby acknowledged, the parties hereto,
intending to be legally bound hereby, do hereby unconditionally agree as
follows:
1. RESIGNATION AND EMPLOYMENT PERIOD. Executive resigned as Chief
Operating Officer of the Company effective as of January 20, 2000. Executive
shall continue to serve as President of the Company until March 31, 2000, at
which time Executive's employment under the Employment Agreement shall
terminate. The Company shall pay Executive the bonus to which he is due
under the 1990 Xxxxx Inc. Bonus Plan for the year ended December 31, 1999, by
no later than May 1, 2000.
2. ASSIGNMENT. The German Subsidiary herewith assigns, with the
express consent of the Executive, all rights and obligations under the PRC
Agreement to the Company, which accepts such assignment.
3. TERMINATION PAYMENTS. In recognition for the services rendered to
the Company and in consideration of the covenants and agreements of Executive
as set forth herein, the Company hereby agrees to pay, and Executive agrees
to accept as full compensation therefor, the following:
(a) The Company will make a lump sum payment to Executive on
March 31, 2000, in the amount of $1,200,000 in U.S. dollars, which
payment shall constitute full consideration for the covenant not to
compete agreed to in Section 8 below.
(b) As compensation for any and all future pension claims based
on the PRC Agreement, including, but not limited to, any future claims
for retirement pension and disability pension, the Company will make a
lump sum payment to Executive on March 31,
2000, in the amount $1,500,000 in U.S. dollars, which payment shall
constitute full settlement of any rights and claims of the Executive
based on the German Statutory Law (including, but not limited to, any
rights and claims based on the Gesetz zur Verbesserung der betrieblichen
Altersversorgung BetrAVG).
The above payments shall be in full satisfaction of all obligations of
the Company and its subsidiaries under the Employment Agreement and the PRC
Agreement. Executive authorizes and directs the Company to withhold in
accordance with applicable law from any payments made to Executive under this
Agreement, all payroll taxes and other payments required to be withheld by
the Company under federal, state or local laws. The determination of the
amount of any such withholding shall be made by the Company in its sole
discretion.
4. STOCK PURCHASE AGREEMENT. In further consideration of the
covenants and agreements of Xxxxxxx set forth in this Agreement, the Company,
or any subsidiary of the Company, and Executive and his spouse, Xxxxx Xxxxxxx
("Spouse") shall enter into a Stock Purchase Agreement providing that the
Company shall purchase from Executive and Spouse a total of 600,000 shares of
the Company's common stock at a price per share ("Purchase Price") computed
as follows:
The sum of the closing stock price for the Company's common stock as set
forth in THE WALL STREET JOURNAL for each trading day during the period
January 1, 2000, through March 31, 2000, divided by the number of trading
days used to arrive at this sum. For example, if there are 61 trading days
during said first quarter and the sum of the closing prices for such trading
days as set forth in THE WALL STREET JOURNAL was $793, the Purchase Price
would be $13 and the total payment to Executive and Spouse under the Stock
Purchase Agreement would be $7,800,000. The Stock Purchase Price shall
contain a customary representation and warranty from Executive and Spouse
that they own 600,000 shares of the common stock of the Company free and
clear of all liens and encumbrances and that they will deliver to the Company
good and marketable title to such stock, free and clear of all liens and
encumbrances. The closing for the stock purchase, which shall consist of
delivery of the total purchase price in exchange for stock certificates
representing the 600,000 shares, duly endorsed or with properly executed
stock powers attached, shall take place no later than April 10, 2000.
5. ADDITIONAL RESIGNATIONS. Executive shall deliver to the Company
on March 31, 2000, his written resignation as an officer and director of the
Company and any and all subsidiaries of the Company, and as a member of all
committees, including administrative and similar committees for retirement,
bonus, profit sharing, health care and other fringe benefit plans of the
Company and any and all of its subsidiaries, said resignations to be in such
form as the Company shall reasonably request.
6. TERMINATION OF AGREEMENTS. The Employment Agreement and the PRC
Agreement shall terminate on March 31, 2000, and be of no further force or
effect from such date, without further action of the parties to this
Agreement.
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7. MUTUAL RELEASES. The Company, the German Subsidiary and Executive
shall execute and deliver to each other on March 31, 2000, the Mutual Release
substantially in the form attached hereto as Exhibit A.
8. COVENANT NOT TO COMPETE. Without the consent of the Company, the
Executive shall not, directly or indirectly, anywhere in the world, for the
period commencing on the date hereof and ending on December 31, 2001, be
associated or in any way connected as an owner, investor, partner, director,
officer, employee, agent, or consultant with any business entity directly
engaged in the manufacture and/or sale of products competitive with any
material product or product lines of the Company or any of its subsidiaries;
provided, however, that (i) the Executive shall not be deemed to have
breached this undertaking if his sole relation with such entity consists of
his holding, directly or indirectly, an equity interest in such entity not
greater than two percent (2%) of such entity's outstanding equity interest,
and the class of equity in which the Executive holds an interest is listed
and traded on a broadly recognized national or regional securities exchange,
and (ii) the Executive shall not be deemed to have breached this undertaking
if he is exclusively employed by a business unit which does not manufacture
and/or sell products competitive with any material product or product lines of
the Company or any of its subsidiaries. For purposes hereof, the term
"material product or product line of the Company" shall mean any product or
product line of the Company or any of its subsidiaries, the consolidated
gross sales of which during any calendar year during the five (5) year period
preceding the Executive's undertaking such employment were at least $10
million.
Executive shall not at any time after the date of this Agreement,
disparage the Company or any of its stockholders, directors, officers,
employees, or agents.
Executive acknowledges that: (a) the services performed by him under the
Employment Agreement are of a special, unique, unusual, extraordinary, and
intellectual character; (b) the business of the Company and its subsidiaries
is worldwide in scope and its products are marketed throughout the world; (c)
the Company and its subsidiaries compete with other businesses that are or
could be located in any part of the world; and (d) the provisions of this
Section 8 are reasonable and necessary to protect the Company's business.
If any covenant in this Section 8 is held to be unreasonable, arbitrary,
or against public policy, such covenant will be considered to be divisible
with respect to scope, time, and geographic area, and such lesser scope,
time, or geographic area, or all of them, as a court of competent
jurisdiction may determine to be reasonable, not arbitrary, and not against
public policy, will be effective, binding, and enforceable against the
Executive.
The period of time applicable to any covenant in this Section 8 will be
extended by the duration of any violation by the Executive of such covenant.
The Executive will, while the covenants under this Section 8 are in
effect, give notice to the Company, within ten days after accepting any other
employment, of the identity of the Executive's employer. The Company may
notify such employer that the Executive is bound by this Agreement
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and, at the Company's election, furnish such employer with a copy of this
Agreement or relevant portions thereof.
9. DISCLOSURE OF CONFIDENTIAL INFORMATION. Without the consent of the
Company, the Executive shall not disclose to any other person Confidential
Information (as defined below) concerning the Company or any of its
subsidiaries or the Company's or any of its subsidiaries' trade secrets of
which the Executive has gained knowledge during his employment with the
Company. Any trade secrets of the Company or any of its subsidiaries will be
entitled to all of the protections and benefits under the Iowa Code Annotated
Section 550.1 through 550.8 and any other applicable law. If any information
that the Company deems to be a trade secret is found by a court of competent
jurisdiction not to be a trade secret for purposes of this Agreement, such
information will, nevertheless, be considered Confidential Information for
purposes of this Agreement. The Executive hereby waives any requirement
that the Company submit proof of the economic value of any trade secret or
post a bond or other security. None of the foregoing obligations and
restrictions apply to any part of the Confidential Information that the
Executive demonstrates was or became generally available to the public other
than as a result of a disclosure by the Executive.
The Executive will not remove from the premises of the Company or any of
its subsidiaries (except to the extent such removal is for purposes of the
performance of the Executive's duties at home or while traveling, or except
as otherwise specifically authorized by the Company), any document, record,
notebook, plan, model, component, device, or computer software or code,
whether embodied in a disk or in any other form, that contains Confidential
Information (collectively, the "Proprietary Items"). The Executive
recognizes that, as between the Company and the Executive, all of the
Proprietary Items, whether or not developed by the Executive, are the
exclusive property of the Company or its subsidiaries, as the case may be.
Upon termination of Executive's employment with the Company, the Executive
will return to the Company all of the Proprietary Items in the Executive's
possession or subject to the Executive's control, and the Executive shall not
retain any copies, abstracts, sketches, or other physical embodiment of any
of the Proprietary Items.
For purposes of this Agreement, Confidential Information shall include
any and all information concerning the business and affairs of the Company,
including, without limitation, product specifications, data, know-how,
formulae, compositions, processes, designs, sketches, photographs, graphs,
drawings, samples, inventions and ideas, past, current, and planned research
and development, current and planned distribution methods and processes,
customer lists, current and anticipated customer requirements, price lists,
market studies, business plans, computer software and programs (including
object code and source code), computer software and database technologies,
systems, structures, and architectures (and related formulae, compositions,
processes, improvements, devices, know-how, inventions, discoveries, concepts,
ideas, designs, methods and information), historical financial statements,
financial projections and budgets, historical and projected sales, capital
spending budgets and plans, the names and backgrounds of key personnel,
agents, personnel training and techniques and materials, insurance products,
premium structures, information relating to suppliers and supplies, sales and
marketing information and strategy, notes, analysis, compilations, studies,
summaries, and other material prepared by or for the Company or any of its
subsidiaries containing
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or based, in whole or in part, on any information included in the foregoing,
and any information, however documented, that is a trade secret within the
meaning of the Iowa Code Annotated Section 550.1 through 550.8.
10. NONSOLICITATION. Without the written consent of the Company,the
Executive shall not, for a period of two (2) years following the termination
of Executive's employment with the Company: (a) employ or retain or arrange
to have any other person, firm, or other entity employ or retain or otherwise
participate in the employment or retention of any person who is an employee
or consultant of the Company or its subsidiaries; or (b) solicit or arrange
to have any other person, firm, or other entity solicit or otherwise
participate in the solicitation of business from any entity that was a
customer of the Company or any of its subsidiaries during the time of the
Executive's employment, whether or not the Executive had personal contact
with such person.
11. INJUNCTIVE RELIEF AND ADDITIONAL REMEDY; ESSENTIAL AND INDEPENDENT
COVENANTS
(a) The Executive acknowledges that the injury that would be
suffered by the Company as a result of a breach of the provisions of
this Agreement (including any provision of Sections 8, 9 and 10) would
be irreparable and that an award of monetary damages to the Company for
such a breach would be an inadequate remedy. Consequently, the Company
will have the right, in addition to any other rights it may have, to
obtain injunctive relief to restrain any breach or threatened breach or
otherwise to specifically enforce any provision of this Agreement, and
the Company will not be obligated to post bond or other security in
seeking such relief. Without limiting the Company's rights under this
Section 11 or any other remedies of the Company, if the Executive
breaches any of the provisions of Sections 8, 9 or 10, the Company will
have the right to cease making any payments otherwise due to the
Executive under this Agreement.
(b) The covenants by the Executive in Sections 8, 9, and 10 are
essential elements of this Agreement, and without the Executive's
agreement to comply with such covenants, the Company would not have
entered into this Agreement with the Executive, agreed to purchase
Company stock from Executive or Spouse, or agreed to make the payments
to Executive set forth in Section 2. The Company and the Executive have
independently consulted their respective counsel and have been advised
in all respects concerning the reasonableness and propriety of such
covenants (including, without limitation, the time period of restriction
and the geographical area of restriction set forth in Section 8), with
specific regard to the nature of the business conducted by the Company
and its subsidiaries. The Executive's covenants in Sections 8, 9 and 10
are independent covenants and the existence of any claim by the
Executive against the Company under this Agreement or otherwise, will
not excuse the Executive's breach of any covenant in Sections 8, 9, or
10.
12. LITIGATION EXPENSES. In connection with any claim or legal action
or proceeding brought under or involving this Agreement, whether brought by
Executive or by or on behalf of the
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Company, the nonprevailing party shall pay the other party's out-of-pocket
expenses, including attorneys' fees, incurred by such party in such claim or
legal action.
13. SUCCESSORS. This Agreement may not be assigned by the Company, and
the obligations of the Company provided for in this Agreement shall be
binding legal obligations of any successor to the Company by purchase,
merger, consolidation, or otherwise. This Agreement may not be assigned by
the Executive during his life, and upon his death will be binding upon and
inure to the benefit of his heirs, legatees, and the legal representatives
of his estate.
14. ENTIRE AGREEMENT; MODIFICATION, WAIVER, AND INTERPRETATION. This
Agreement contains the entire agreement between the parties with respect to
the subject matter of this Agreement and supersedes all prior agreements and
understandings, oral or written, between the parties hereto with respect to
the subject matter of this Agreement. No provision of this Agreement may be
modified, waived, or discharged unless such waiver, modification, or
discharge is agreed to in a writing signed by the Executive and an
appropriate officer of the Company empowered to sign same by the Board of
Directors of the Company. No waiver by either party at any time of any breach
by the other party of, or compliance with, any condition or provision of this
Agreement to be performed by the other party shall be deemed a waiver of
similar or dissimilar provisions or conditions at the same time or at any
prior or subsequent time. This Agreement shall be deemed to have been
executed in Ames, Iowa and the validity, interpretation, construction, and
performance of this Agreement shall be governed by the laws of the State of
Iowa without regard to conflicts of laws principles.
15. SEVERABILITY. If any provision of this Agreement is held invalid
or unenforceable by any court of competent jurisdiction, the other provisions
of this Agreement will remain in full force and effect. Any provision of this
Agreement held invalid or unenforceable only in part or degree will remain in
full force and effect to the extent not held invalid or unenforceable.
16. COUNTERPARTS. This Agreement may be executed in one or more
counterparts, each of which will be deemed to be an original copy of this
Agreement and all of which, when taken together, will be deemed to constitute
one and the same agreement.
17. HEADINGS. The headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of any
provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first written above.
XXXXX INC.
By: /s/ XXXXX X. XXXXXXX
------------------------------------------
Xxxxx X. Xxxxxxx, Executive Vice President
XXXXX-SUNDSTRAND GmbH & CO. KG
By: _________________________________________
/s/ XXXXX X. XXXXXXX
-----------------------------------------
Xxxxx X. Xxxxxxx, Executive
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EXHIBIT A
MUTUAL RELEASE AND COVENANT NOT TO XXX
THIS MUTUAL RELEASE AND COVENANT NOT TO XXX has been entered into as of
the 31st day of March, 2000, between XXXXX INC., a Delaware corporation (the
"Company"), XXXXX-SUNDSTRAND GmbH & CO. KG, a German partnership (the "German
Subsidiary"), and XXXXX X. XXXXXXX (the "Executive"). The Company, the
German Subsidiary and Executive are parties to that certain Termination
Agreement dated as March 31, 2000 (the "Termination Agreement"), providing,
among other things, for a lump sum payment of $2,700,000 from the Company to
Executive, and for the purchase by the Company of 600,000 shares of its
common stock from Executive and his spouse, and for certain covenants and
agreements from Executive. The aforesaid payments, covenants and agreements
are in full satisfaction of each party's rights and obligations under the
Employment Agreement dated September 19, 1996, between the Company and
Executive (the "Employment Agreement") and the Post-Retirement Care Agreement
dated September 19, 1996 and amended as of August 20, 1998, between Executive
and Xxxxx-Sundstrand GmbH & Co., a subsidiary of the Company (the "PRC
Agreement").
NOW, THEREFORE, in consideration of the payments, covenants and
agreements provided for in the Termination Agreement, the mutual covenants
and agreements herein contained, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged,
the parties hereto, intending to be legally bound hereby, do hereby
unconditionally agree as follows:
1. EXECUTIVE RELEASE. Executive, on behalf of himself, his agents,
legal representatives, heirs and assigns and any and all other parties
claiming or who might hereafter claim any right through Executive
(collectively whether one or more the "Executive Releasing Party") does
forever release and discharge the Company and the German Subsidiary, their
subsidiaries and affiliates and their past and present officers, directors,
employees, agents, representatives, stockholders, advisors, counsel, joint
venturers, partners, predecessors, successors and assigns, and all other
related persons, corporations and other entities who are or might be liable
(all of the foregoing collectively referred to as the "Released Parties"),
from all claims, rights of action, causes of action, liabilities and demands
of every kind and character whatsoever, known or unknown, developed or
undeveloped, including, without limitation, age discrimination claims under
the Age Discrimination in Employment Act, which Executive or any Executive
Releasing Party, individually or in any and all other capacities, now has or
under any circumstances could or might have against any or all of the
Released Parties in connection with, arising out of, or regarding in any way
the Employment Agreement or PRC Agreement or any other matter relating to
Executive's employment by the Company, its subsidiaries and their
predecessors.
2. EXECUTIVE COVENANT NOT TO XXX. Executive, on behalf of himself and
any and all Executive Releasing Parties, covenants and agrees that Executive
will not xxx, institute, cause to be instituted, assist in instituting or
permit to be instituted, on behalf of Executive or any Executive Releasing
Party, any proceeding before any court, tribunal or other body, or otherwise
bring any
challenge or assist in any challenge, with respect to any claim or matter of
any and every nature whatsoever that has been, could have been, or could ever
be asserted against any or all of the Released Parties in connection with,
arising out of, or regarding in any way the Employment Agreement or PRC
Agreement or any other matter relating to Executive's employment by the
Company, its subsidiaries and their predecessors.
3. COMPANY AND GERMAN SUBSIDIARY RELEASE. The Company and the German
Subsidiary, on their own behalf and all of their subsidiaries and any and all
other parties claiming or who might hereafter claim any right through the
Company (collectively whether one or more the "Company Releasing Party") do
forever release and discharge Executive from all claims, rights of action,
causes of action, liabilities and demands of every kind and character
whatsoever, known or unknown, developed or undeveloped, which the Company,
the German Subsidiary or any Company Releasing Party now has or under any
circumstances might have against Executive in connection with, arising out
of, or regarding in any way the Employment Agreement or PRC Agreement or any
other matter relating to Executive's employment by the Company, its
subsidiaries and their predecessors.
4. COMPANY AND GERMAN SUBSIDIARY COVENANT NOT TO XXX. The Company and
the German Subsidiary, on their own behalf and any and all Company Releasing
Parties, covenant and agrees that they will not xxx, institute, cause to be
instituted, assist in instituting or permit to be instituted, on behalf of
the Company or any Company Releasing Party, any proceeding before any court,
tribunal or other body, or otherwise bring any challenge or assist in any
challenge, with respect to any claim or matter of any and every nature
whatsoever that has been, could have been, or could ever be asserted against
Executive in connection with, arising out of, or regarding in any way the
Employment Agreement or PRC Agreement or any other matter relating to
Executive's employment by the Company, its subsidiaries and their
predecessors.
5. COMPLETE DEFENSE. This Agreement may be pleaded as a full and
complete defense to, or an abatement of, and may be used as the basis for an
injunction against any action, suit or other proceeding of any kind
whatsoever which may be instituted, prosecuted, maintained or attempted in
breach of this Agreement.
6. SPECIFIC PERFORMANCE. The parties hereto acknowledge that damages
would be an inadequate remedy for any breach of the provisions of this
Agreement and agree that the obligations of the parties hereunder shall be
specifically enforceable.
7. TERMINATION AGREEMENT. Notwithstanding anything in this Agreement
to the contrary, this Agreement shall not limit or affect the rights or
remedies in any way whatsoever of any party under the Termination Agreement.
8. ENTIRE AGREEMENT; MODIFICATION AND INTERPRETATION. This Agreement
contains the entire agreement between the parties with respect to the subject
matter of this Agreement and supercedes all prior agreements and
understandings, oral or written, between the parties hereto with respect to
the subject matter of this Agreement. This Agreement shall be deemed to have
been
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executed in Ames, Iowa and the validity, interpretation, construction, and
performance of this Agreement shall be governed by the laws of the State of
Iowa applicable to agreements made and to be entirely performed therein,
without regard to conflicts of laws principles.
9. COUNTERPARTS. This Agreement may be executed in counterparts with
the same force and effect as if each of the signatories had executed the same
document.
10. HEADINGS. The headings contained herein are for reference purposes
only and shall not in any way affect the meaning or interpretation of any
provision of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
XXXXX INC.
By: /s/ XXXXX X. XXXXXXX
--------------------------------------------
Xxxxx Xxxxxxx, Executive Vice President
XXXXX-SUNDSTRAND GmbH & CO. KG
By: --------------------------------------------
/s/ XXXX X. XXXXXXX
--------------------------------------------
Xxxx X. Xxxxxxx, Executive
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