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EXHIBIT 10.34
[GRACE LETTERHEAD]
January 10, 1997
Xx. Xxxx Xxxxxxxxx
X. X. Xxxxx & Co.
Xxx Xxxx Xxxxxx Xxxx
Xxxx Xxxxx, XX 00000
Dear Xxxx:
This letter sets forth our agreement relating to your resignation as
Senior Vice President of X. X. Xxxxx & Co. (the "Company") and your retirement
from the Company as follows:
1. You will resign your position as Senior Vice President of the Company
and all other offices and directorships you hold with the Company's
subsidiaries and affiliates, on June 30, 1997, but continue to receive
your regular base salary through November 30, 1997 at which time you
will retire effective that date.
2. Following your retirement on November 30, 1997, as set forth in
paragraph 1 above, you will be entitled to the compensation and
benefits set forth below in accordance with and subject to the
following terms:
A. You will receive severance pay, equal to $172,038 (seven
months severance pay; a total of 12 months less the five month
continuation during 1997) paid in the form of continued salary
payments (i.e., in installments twice a month), beginning in
December 1997, or in a lump sum at any time prior to July 1,
1998 (less any installments previously received) if you so
elect.
B. Incentive Compensation
You will be considered for an annual incentive compensation
award for 1996 based on the financial performance of Container
Products, TEC Systems and Packaging and your individual
performance. Your 1996 award, which is subject to Board
approval, will be paid to you in March 1997, less the amount
you deferred. You will not be eligible for 1997 Incentive
Compensation.
C. Executive Salary Protection Plan and Split-Dollar Life
Insurance Plan
Your death benefit coverage under the Executive Salary
Protection Plan shall cease on December 30, 1997, while your
disability coverage under that Plan will cease on November 30,
1997, in accordance with the terms of that Plan. Your
participation in the Split-Dollar Life Insurance Plan will
cease on January 29, 1998, although you may purchase the
policy by reimbursing the Company for the premiums paid by the
Company for that policy in your behalf through the date of
your retirement. Estimated premiums paid by the Company
through November 30, 1997 are expected to total approximately
$490,000 for six policy years. The current cash value in the
policy is approximately $462,000. Your death benefit coverage
is $1,015,000.
D. Long-Term Incentive Plan
Your participation in the Company's Long-Term Incentive Plan
for the 1994-1996, 1995-1997, and 1996-1998 Performance
Periods will vest and be paid to you at the same time as other
participants. While you will participate for the full
1994-1996 cycle, your awards for 1995-1997 and 1996-1998
Performance Periods will be prorated as of your November 30,
1997 retirement date. In the event of a "change in control" of
the Company, your entitlement, if any, to receive payments
under the LTIP will be the same as those of other persons
holding Contingent
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Performance Units granted under the LTIP, including any
proration of awards consistent with the length of the
Performance Periods applicable to all other participants in
the corresponding Performance Periods.
E. Stock Options
Your December 5, 1991, December 3, 1992, November 4, 1993,
April 7, 1994 and March 2, 1995 stock option grants are fully
vested. The second and third installments of your March 7,
1996 award will vest upon your retirement on November 30, 1997
(the first installment will vest on March 7, 1997). Subject to
SEC requirements and restrictions (as to which you should
consult Xxx Xxxx), you will be free to exercise your stock
options (to the extent then vested) and to sell the shares
acquired on exercise following your resignation as an officer
of the Company on June 30, 1997. After your retirement, you
will have a three-year grace period during which you may
exercise your options.
F. Deferred Compensation
Your deferred compensation balances, estimated at $179,759.75
as of November 30, 1996, will be paid to you in accordance
with the distribution elections you have previously made, i.e.
in a lump sum payable on January 31, 1998.
X. Xxxxxxx and Investment Plan
Following your retirement, you may elect to take a lump sum
distribution under the Savings and Investment Plan, defer your
distribution until age 70 1/2, or elect to begin receiving
installment payments over a period of up to 10 years, in
accordance with the terms of the Plan. Your S&I balance as of
January 9, 1996 was $135,157. In March 1997, you will be
eligible to receive your Savings & Investment Replacement
payment for 1996 in an amount estimated to be $7,779. In March
1998, you will receive your replacement payment for 1997 based
on your S&I Plan compensation for 1997 and the tax law limit
in effect for 1997.
H. Benefits
Active benefit coverages will continue through June 30, 1998
for medical, dental and for applicable life coverages,
including Company-paid basic coverage of $590,000 if you do
not purchase your split dollar life insurance policy, unless
you elect to take your severance pay in a lump sum, in which
case all such coverages would cease at the end of the month as
of the date your lump sum severance payment is paid. Pension
Plan and Savings & Investment Plan participation will cease on
your November 30, 1997 retirement date. Long Term Disability
Plan and Business Travel Accident (BTA) Plan participation
will cease on June 30, 1997 provided, however, such BTA
coverage will be reinstated for the full period, as
applicable, during which your repatriation to France is taking
place. Of course, should the Company amend or terminate these
plans for all other employees, such amendment or termination
would apply to you.
Following June 30, 1998, your participation in all of Xxxxx's
life, medical and dental plans will cease. As provided under
Federal COBRA legislation, you may continue coverage under
Xxxxx's medical and dental plans for up to 18 months following
the date your group participation ends. Prior to June 30,
1998, you will receive the official Request for Continuation
of Group Coverage form, and confirmation of the COBRA medical
and dental rates that will apply to you. As a citizen and
resident of France, you would be eligible for medical coverage
under the French Social Insurance System.
I. Pensions
Under the Company's Retirement Plan for Salaried Employees and
the Supplemental Retirement Plan and assuming continuous
service through November 30, 1997, continuation of your base
salary through such date and a 1996 incentive award at your
target amount, your estimated annual benefit, on a straight
life basis, would be $204,039 beginning December 1, 1999 at
age 62 and $195,878 beginning December 1, 1997, at age 60. You
may, of course, elect any other payment option that is
available under the Plans. These gross benefit amounts,
indicated above, would be reduced by all benefits you are
eligible to receive under the French and Swiss retirement
plans.
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These offset amounts will be determined in November 1997 at
the time of your retirement. Of course, should the Company
amend or terminate any of the retirement plans for all other
similarly situated retirees, such amendment or termination
would apply to you.
J. Outplacement Assistance
The services of a specialized external company, nominated and
sponsored by the Company, will be provided to you for
executive-level assistance in job search and placement.
K. Perquisites
You may continue to use your company-provided leased car and
receive reimbursement for expenses incurred under the
Financial Counseling Program through December 1997. In the
event you wish to purchase your leased car, the Company will
arrange for you to do so on December 31, 1997, or on any
earlier date as you may select, at the then "fair market
value."
L. Tax Advice
The Company will continue to provide you with assistance of
Xxxxx & Xxxxx for the computation of your tax liabilities and
preparation of your U.S. tax returns for 1996, 1997 and 1998.
The Company will also provide for the services of Cabinet
Lefebrre to prepare your 1996, 1997 and 1998 French income tax
returns.
M. Unused Vacation Payment
You are entitled to paid vacation aggregating not less than
five weeks during 1997. You will be entitled to payment for
any unused vacation time in accordance with Company policy at
the time you retire on November 30, 1997, including any days
(up to ten) carried over from 1996 in accordance with vacation
policy.
N. Housing Loan
Your Company-provided housing loan in the amount of $350,000
will be repaid by you upon the sale of your home or by
December 31, 1997, if sooner.
O. Repatriation
The cost of your relocation to France and assistance with the
sale of your home in Florida will be provided as described in
the attached addendum to this letter.
This letter sets forth the entire agreement and understanding between
you and the Company concerning the compensation and benefit arrangements covered
by this letter, and it supersedes all prior agreements and understandings, if
any, concerning such subject matter between you and the Company. No
representation or promise concerning such subject matter has been made by the
Company that is not set forth in this letter.
Please confirm your agreement with the foregoing by signing a copy of
this letter where indicated below and returning it to me.
Sincerely,
/s/
Accepted and agreed to this 30 day of January 1997
/s/ Xxxx Xxxxxxxxx
-----------------------
Xxxx Xxxxxxxxx
cc: X. X. Xxxxxxxx
X. X. Xxxxxxx
X. X. Xxxxxx
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ADDENDUM
REPATRIATION
The Company will provide you with the following relocation assistance should you
and your family wish to be repatriated to France in 1997:
COST OF MOVE:
The Company will reimburse you for the cost of First Class air fare and
incidental expenses related to the relocation of you and your immediate family
back to France.
The Company will pay for the packing, transporting, unpacking and insurance of
all your household effects from Florida to France, provided that moving your
household effects is coordinated through the Grace International Human
Resources Department, using a moving company designated by the Department.
SALE OF RESIDENCE:
Xxxxx will offer to purchase your Florida residence for its Fair Market Value
("FMV"), established as described in this paragraph. The FMV of your Florida
residence will be established by securing and averaging two appraisals made by
professional appraisers selected by the International Human Resources
Department. If the appraisals vary by five (5) percent or more, a third
appraisal will be obtained, and the average of the two closer appraisals will
be the FMV of your Florida residence.
From the date the Company notifies you in writing of the FMV of your Florida
residence, you will have sixty (60) days to accept, in writing, to the
International Human Resources Department, the Company's offer to purchase your
residence at the FMV. You may, instead, elect to reject that offer and sell
your residence without assistance from the Company, in which case the Company
will be under no obligation to reimburse you for a sale price below the FMV or
for maintenance or carrying expenses.
Failure to accept, in writing, the established FMV within the 60-day period
described above will be deemed a rejection of the Company's offer to purchase
the residence at FMV.
Should you sell your Florida residence without the assistance of the Company,
the Company will nevertheless reimburse you for reasonable and documented
expenses that are incidental to the sale, such as any real estate commission,
attorney's fees (or bank service fees if in lieu of attorney's fees),
penalties for mortgage, transfer taxes, title evidence based on local
practice, and advertising expenses if no real estate commission is involved.
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GRACE MEMO
Human Resources
Boca Raton, Florida
DATE: January 30, 1997
TO: X. Xxxxxxxxx
FROM: X. X. Xxxxxxxx
SUBJECT: PARTICIPATION IN LTIPS - REVISED
cc: X. X. Xxxxxxx, Xx.
X. X. Xxxxxx
Your financial and market achievement components are based on the following
product lines and Corporate for the following LTIPs:
TARGETED PERFORMANCE UNITS
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Financial Market
Component Component Total
--------- --------- -----
1994 - 1996 Container (including
Sp. Polymers) 3,120.86 1,537.14 4,658
Corporate 2,329.00 2,329.00 4,658
-------- -------- -----
5,449.86 3,866.14 9,316
======== ======== =====
1995 -1997 Container (including
Sp. Polymers) 3,120.86 1,537.14 4,658
Corporate 2,329.00 2,329.00 4,658
-------- -------- -----
5,449.86 3,866.14 9,316
======== ======== =====
1996 - 1998 Container 936.66 461.34 1,398
Corporate 699.00 699.00 1,398
-------- -------- -----
1,635.66 1,160.34 2,796
======== ======== =====
