EXHIBIT 10.2
CONFIDENTIAL SEPARATION AGREEMENT AND GENERAL RELEASE
This Confidential Separation Agreement and General Release (this
"Agreement") is entered into as of October 26, 2001 between Xxxxxxx Computer
Services, Inc. (including its affiliates and subsidiaries), a Delaware
corporation (the "Company"), and Xxxxxxx X. Xxxxxxxx (the "Executive").
WHEREAS, the Executive currently serves as a Senior Vice President of
the Company; and
WHEREAS, the Company and the Executive desire to set forth herein
their mutual agreement with respect to all matters relating to (i) the
Executive's cessation of employment with the Company, and (ii) the Executive's
release of claims, all upon the terms set forth herein.
NOW, THEREFORE, in consideration of the mutual promises and agreements
contained herein, the adequacy and sufficiency of which are hereby acknowledged,
the Company and the Executive hereby agree as follows:
1. Resignation; Termination of Employment. The Executive hereby
resigns as a Senior Vice President of the Company, and from all other positions
(if any) with the Company, effective as of the date hereof (the "Employment
Termination Date"). On the Employment Termination Date, the Executive shall
cease to be an employee and officer of, or have any other position with, the
Company or its subsidiaries or any affiliate of the Company or its subsidiaries.
2. Payment of Accrued Obligations. (a) Unless otherwise indicated
herein, the Company shall pay all Accrued Obligations (as defined in Section
2(b) hereof) to the Executive as soon as reasonably practicable following the
Employment Termination Date; provided, however, that any portion of the Accrued
Obligations subject to plans or policies of the Company shall be determined and
paid in accordance with the terms of the relevant plan or policy as applicable
to the Executive.
(b) For purposes of this Agreement, "Accrued Obligations" shall mean,
the following:
(i) in lieu of earned and/or accrued vacation pay and outstanding
expense reimbursements, the Executive's current base salary through
December 31, 2001 (to the extent not theretofore paid), payable in equal
monthly installments in accordance with the Company's retirement payroll
practices;
(ii) the cash balance accrued for the benefit of the Executive under
the Company's Capital Accumulation Plans, compounded at a 6% annual rate in
accordance with the plan documents, shall be paid in a lump sum;
(iii) amounts deferred by the Executive pursuant to the Company's 2001
Capital Accumulation Plan following January 1, 2001, which amounts shall be
returned to the Executive pursuant to the terms of such plan;
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(iv) the shares of common stock of the Company accrued for the benefit
of the Executive under the Company's Deferred Executive Incentive Plan; and
(v) all benefits which have accrued as of the Employment Termination
Date under the Company's Profit Sharing Plan and Supplemental Profit
Sharing Plan in accordance with the terms of each such plan;
3. Additional Payments and Benefits. Provided that the Executive has
not revoked the release contained in Section 9 hereof, and provided that the
Executive complies with Sections 6 and 7 hereof and complies in all material
respects with Section 13 hereof, the Company shall make the payments and provide
the benefits set forth in this Section 3, it being understood that if the
Executive fails to comply with Section 6 or 7 hereof or fails to comply with
Section 13 hereof in any material respect and if such failure is not
intentional, the Executive shall have 30 days to cure such failure, to the
extent that such failure is subject to cure, and if the Executive effects such
cure within such 30-day period, the Company's obligations pursuant to this
Section 3 shall not be affected by such failure:
(a) As soon as reasonably practicable following the Employment
Termination Date, the Company shall pay to the Executive the amount determined
by subtracting the amount payable pursuant to Section 2(b)(ii) hereof from the
amount the Executive would have received under the Company's Capital
Accumulation Plans if the balance were compounded at 12% per annum;
(b) During the period commencing on January 1, 2002 and ending
December 31, 2002, Company shall pay to the Executive the aggregate amount of
$235,000, payable in twelve equal monthly installments in accordance with the
Company's retirement payroll practices;
(c) Company shall pay to the Executive, in October, 2002, a pro-rata
share of his target bonus for fiscal year 2002 in a lump sum equal to $26,438.
(d) All stock options granted to the Executive prior to January 1,
2001, which shall be outstanding on the Employment Termination Date and shall
not have become exercisable, shall become exercisable in full, effective as of
the Employment Termination Date, and the agreement relating to each stock option
granted to the Executive and outstanding on the date hereof shall be amended to
provide that the period during which such stock option may be exercised shall
end on the date which is 90 days following the Employment Termination Date or on
the date of expiration of such stock option, whichever occurs first, and each
such stock option shall expire if not exercised prior to such date; and
(e) The Company shall, for a period of one year from the date of the
Employment Termination Date and at its sole expense, not to exceed 15% of base
salary, provide the Executive with outplacement services, the scope and provider
of which shall be selected by the Executive.
4. COBRA Coverage. Pursuant to the Consolidated Omnibus Budget
Reconciliation Act of 1985 ("COBRA"), the Executive may elect to continue
coverage for the Executive and his dependents under the Company's medical,
dental and vision insurance policies
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for a period of up to 18 months following the Employment Termination Date. From
the Employment Termination Date through December 31, 2002, the Company shall pay
the difference between COBRA premiums and premiums that would have been payable
by the Executive had he remained in the employ of the Company. Premiums shall be
deducted from separation payments.
5. Federal and State Withholding. The Company shall deduct from the
amounts payable to the Executive pursuant to this Agreement the amount of all
required federal and state withholding taxes in accordance with the Executive's
Form W-4 on file with the Company and all applicable social security taxes.
6. Confidentiality. The Executive shall not, at any time, make use of
or disclose, directly or indirectly, any (i) trade secret or other confidential
or secret information of the Company or of any of its subsidiaries, or (ii)
other proprietary information (including but not limited to technical, business,
or financial) of the Company or of any of its subsidiaries, not available to the
public, to any individual or entity ("Confidential Information"), except to the
extent that such Confidential Information (a) becomes a matter of public record
or is published in a newspaper, magazine or other periodical, or on electronic
or other media, available to the general public, other than as a result of any
act or omission of the Executive or (b) is required to be disclosed by any law,
regulation or order of any court or regulatory commission, department or agency,
provided that the Executive gives prompt notice of such requirement to the
Company to enable the Company to seek an appropriate protective order. Within
five days following the Employment Termination Date, the Executive shall
surrender to the Company all records, memoranda, notes, plans, reports, computer
tapes and software and other documents and data which constitute Confidential
Information that he may then possess or have under his control (together with
all copies thereof).
7. Noncompetition; Nonsolicitation.
(a) During the period commencing on the Employment Termination Date
and ending on December 31, 2002, the Executive shall not, without the prior
express written consent of the President, Chief Executive Officer, or Chief
Operating Officer of the Company, in any direct mail/targeted communication or
commercial print capacity, directly or indirectly, through any person, firm or
corporation, alone or as a member of a partnership or as an officer, director,
stockholder, investor or employee of or consultant to any other corporation or
enterprise or otherwise, engage or be engaged, or assist any other person, firm,
corporation or enterprise in engaging or being engaged, in any business in which
the Executive was involved or had knowledge, being conducted by, or contemplated
by, the Company or any of its subsidiaries as of the Employment Termination Date
in any geographic area in which Executive performed substantial services for the
Company or any of its subsidiaries ("Competitive Business"); provided, however,
and subject to subsection 7(b), that the Executive may accept employment with
(1) a Competitive Business with annual sales revenue under $100,000,000 for each
of the five fiscal years preceding the Employment Termination Date; and (2) any
diversified corporation or enterprise having a business unit which competes with
the Company and a business unit which does not compete with the Company if,
prior to the acceptance of such employment, the Executive delivers to the
Company a written assurance from such corporation or enterprise addressed to the
Company and satisfactory to the Company that the Executive will render services
exclusively for the business unit which does not compete with the Company and
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will not render services, directly or indirectly, for the business unit which
competes with the Company.
(b) During the period commencing on the Employment Termination Date
and ending two years thereafter, the Executive shall not in any manner, directly
or indirectly:
(i) induce or solicit, or attempt to induce or solicit, any employee
of the Company or any of its subsidiaries to leave the employment thereof or in
any way interfere with the relationship of such employee with the Company or its
subsidiaries; or
(ii) induce or solicit, or attempt to induce or solicit, any customer,
supplier, licensee or other individual, corporation or other business
organization having a business relation with the Company or its subsidiaries to
cease doing business with the Company or its subsidiaries or in any way
interfere with the relationship between any such customer, supplier, licensee or
other person and the Company or its subsidiaries.
(c) Nothing in this Section 7 shall prohibit the Executive from being
(i) a stockholder in a mutual fund or a diversified investment company or (ii) a
passive owner of not more than two percent of the outstanding stock of any class
of a corporation, any securities of which are publicly traded, so long as the
Executive has no active participation in the business of such corporation.
8. Scope of Covenants; Remedies. The following provisions shall apply
to the covenants of the Executive contained in Sections 6 and 7 hereof:
(a) the covenants contained in Section 6 shall apply on a nationwide
basis, which is the basis on which the Company is actively engaged in the
conduct of its businesses and in which customers are being solicited;
(b) without limiting the right of the Company to pursue all other
legal and equitable remedies available for violation by the Executive of the
covenants contained in Section 6 and 7 hereof, it is expressly agreed by the
Executive and the Company that such other remedies cannot fully compensate the
Company for any such violation and that the Company shall be entitled, in
addition to other rights and remedies existing in its favor, to a restraining
order or orders and other injunctive relief to prevent any such violation or any
continuing violation thereof; and
(c) the Company and the Executive each intends and agrees that the
covenants contained in Sections 6 and 7 hereof are reasonably designed to
protect the Company's legitimate business interests without unnecessarily or
unreasonably restricting the Executive's business opportunities, but that if in
any action before any court or agency legally empowered to enforce the covenants
contained in Sections 6 and 7 hereof any term, restriction, covenant or promise
contained therein is found to be unreasonable and accordingly unenforceable,
then such term, restriction, covenant or promise shall be deemed modified to the
extent necessary to make it enforceable by such court or agency.
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(d) the Executive agrees that he will submit himself to the personal
jurisdiction of the courts of the State of Illinois in any action by the Company
to obtain injunctive or other relief.
(e) the Executive agrees that, should he be found by a court of
competent jurisdiction to be in violation of either Section 6 or 7 herein, or
should either Section 6 or 7 herein be adjudged unenforceable by a court of
competent jurisdiction, he shall immediately forfeit and re-pay any amounts paid
to him hereunder, and due and owing to him if not yet paid, in additional to all
other remedies herein and available to the Company.
9. General Release. The Executive, on behalf of himself and anyone
claiming through him, hereby agrees not to xxx the Company or any of its
divisions, subsidiaries, affiliates or other related entities (whether or not
such entities are wholly owned) or any of the past, present or future directors,
officers, administrators, trustees, fiduciaries, employees, agents or attorneys
of the Company or any of such other entities, or the predecessors, successors or
assigns of any of them (hereinafter referred to as the "Released Parties"), and
agrees to release and discharge, fully, finally and forever, the Released
Parties from any and all claims, causes of action, lawsuits, liabilities, debts,
accounts, covenants, contracts, controversies, agreements, promises, sums of
money, damages, judgments and demands of any nature whatsoever, in law or in
equity, both known and unknown, asserted or not asserted, foreseen or
unforeseen, which the Executive ever had or may presently have against any of
the Released Parties arising from the beginning of time up to and including the
effective date of this Agreement, including, without limitation, all matters in
any way related to the Executive's employment by the Company or any of its
affiliates, the terms and conditions thereof, any failure to promote the
Executive and the termination or cessation of the Executive's employment with
the Company or any of its affiliates, and including, without limitation, any and
all claims arising under the Civil Rights Act of 1964, as amended, the Civil
Rights Act of 1991, the Civil Rights Act of 1866, the Age Discrimination in
Employment Act, the Older Workers' Benefit Protection Act, the Family and
Medical Leave Act, the Americans With Disabilities Act, the Employee Retirement
Income Security Act of 1974, the Illinois Human Rights Act, or any other
federal, state, local or foreign statute, regulation, ordinance or order, or
pursuant to any common law doctrine; provided, however, that nothing contained
in this Section 9 shall apply to, or release the Company from, any obligation of
the Company (i) contained in this Agreement or in any benefit plan of the
Company in which the Executive participates (excluding any plan providing
severance benefits upon termination of employment) or (ii) to indemnify the
Executive pursuant to any prior, written indemnification agreement with the
Executive, or the Company's certificate of incorporation or by-laws. The
consideration offered herein is accepted by the Executive as being in full
accord, satisfaction, compromise and settlement of any and all claims or
potential claims, and the Executive expressly agrees that he is not entitled to,
and shall not receive, any further recovery of any kind from the Company or any
of the other Released Parties, and that in the event of any further proceedings
whatsoever based upon any matter released herein, neither the Company nor any of
the other Released Parties shall have any further monetary or other obligation
of any kind to the Executive, including any obligation for any costs, expenses
or attorneys' fees incurred by or on behalf of the Executive. The Executive
agrees that he has no present or future right to employment with the Company or
any of the other Released Parties and that he will not apply for or otherwise
seek employment with any of them.
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10. Authority. The Executive expressly represents and warrants that he
is the sole owner of the actual and alleged claims, demands, rights, causes of
action and other matters that are released herein; that the same have not been
transferred or assigned or caused to be transferred or assigned to any other
person, firm, corporation or other legal entity; and that he has the full right
and power to grant, execute and deliver the general release, undertakings and
agreements contained herein.
11. Nondisparagement. Both the Executive and the Company shall refrain
from all conduct and statements, verbal or otherwise, that disparage or damage
or could disparage or damage the reputation, goodwill or standing in the
community of the other, including any of the Released Parties in the case of the
Company.
12. Nondisclosure. The Executive agrees that unless and until the
Company discloses the terms of this Agreement to the public, the Executive will
not disclose the existence or terms of this Agreement to any third party, except
his accountants, attorneys and spouse, each of whom shall be bound by this
nondisclosure provision, or as may be required to comply with legal process;
provided, however, that the Executive shall be entitled to disclose fully the
terms of Sections 6, 7 and 8 hereof to any employer or prospective employer of
the Executive. If a person not a party to this Agreement requests or demands, by
subpoena or otherwise, that the Executive disclose or produce this Agreement or
any terms or conditions hereof prior to the public disclosure thereof by the
Company, the Executive shall immediately notify the Company and shall give the
Company an opportunity to respond to such notice before taking any action or
making any decision in connection with such request or subpoena. The Executive
understands and agrees that this nondisclosure requirement is a material
inducement to the Company to enter into this Agreement.
13. Cooperation. For the period commencing on the Employment
Termination Date and ending one year following the Employment Termination Date,
the Executive shall be reasonably available to the Company to respond to
requests by the Company for information pertaining to or relating to the Company
and its affiliates which may be within the knowledge of the Executive. The
Executive will cooperate fully with the Company in connection with any and all
existing or future litigation brought by or against the Company or any of its
affiliates, to the extent the Company reasonably deems the Executive's
cooperation necessary. The Executive understands that he may be required to
devote up to three days (with a "day" defined for purposes of this Section as
any day when Executive devotes more than 30 minutes to such requests) during
each month of such one-year period to the fulfillment of his obligations under
this Section 13, provided that the devotion of such time does not unreasonably
interfere with the Executive's subsequent employment. The Company shall
reimburse the Executive for any reasonable out-of-pocket expenses incurred as a
result of such cooperation.
14. Company Property. Executive acknowledges and confirms he has
returned to the Company any and all property, keys, records, documents that have
come into his possession by virtue of his employment with the Company or its
affiliates. He further acknowledges and confirms that he has not retained copies
of any documents or computer media containing Confidential Information. Within
30 days of the Termination Date, Executive shall execute all appropriate
documents to effectuate the termination of the Split Dollar Life Insurance
policy taken out by the Company in the name of the Executive. Executive agrees
that all cash surrender value up to the aggregate premiums paid, shall be
retained by the Company.
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15. Successors; Binding Agreement. This Agreement shall inure to the
benefit of and be enforceable by the Executive and by his personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees and legatees. In the event of the death of the Executive while any
amounts are payable to the Executive hereunder, all such amounts, unless
otherwise provided herein, shall be paid in accordance with the terms of this
Agreement to such person or persons designated in writing by the Executive to
receive such amounts or, if no person is so designated, to the Executive's
estate.
16. Notices. All notices and other communications required or
permitted under this Agreement shall be in writing and shall be deemed to have
been duly given by a party hereto when delivered personally or by overnight
courier or five days after deposit in the United States mail, postage prepaid to
the following address of the other party hereto (or to such other address of
such other party as shall be furnished in accordance herewith):
If to the Company, to:
Xxxxxxx Computer Services, Inc.
0000 Xxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000-0000
Attention: Chief Executive Officer
with a copy to:
Xxxxxxx Computer Services, Inc.
0000 Xxxxx Xxxxx
Xxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
If to the Executive, to:
Xx. Xxxxxxx X. Xxxxxxxx
At his last known address on the records of the Company
17. Governing Law; Validity. The interpretation, construction and
performance of this Agreement shall be governed by and construed and enforced in
accordance with the internal laws of the State of Illinois without regard to the
principle of conflicts of laws.
18. Counterparts. This Agreement may be executed in two counterparts,
each of which shall be deemed to be an original and both of which together shall
constitute one and the same instrument.
19. Miscellaneous. No provision of this Agreement may be modified or
waived unless such modification or waiver is agreed to in writing and executed
by the Executive and by a duly authorized officer of the Company. No waiver by
either party hereto at any time of any breach by the other party hereto of, or
compliance with, any condition or provision 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. Failure by the
Executive or the Company to insist upon strict compliance with any provision of
this Agreement or to
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assert any right which the Executive or the Company may have hereunder shall not
be deemed to be a waiver of such provision or right or any other provision or
right of this Agreement. Any other understanding(s) and agreement(s), oral or
written, respecting the Executive's employment status or relationship with the
Company, or any subject matter hereof, are hereby superseded and canceled,
except to the extent they are general plans or policies of the Company.
20. No Admission. Nothing in this Agreement is intended to, or shall
be construed as, an admission by the Company or any of the other Released
Parties that it violated any law, interfered with any right, breached any
obligation or otherwise engaged in any improper or illegal conduct with respect
to the Executive or otherwise. The Company, for itself and the other Released
Parties, hereby expressly denies any such illegal or wrongful conduct.
21. ACKNOWLEDGMENT BY EXECUTIVE. BY EXECUTING THIS AGREEMENT, THE
EXECUTIVE EXPRESSLY ACKNOWLEDGES THAT HE IS MAKING CERTAIN WAIVERS UNDER THE AGE
DISCRIMINATION IN EMPLOYMENT ACT. THE EXECUTIVE FURTHER ACKNOWLEDGES HE HAS READ
THIS AGREEMENT CAREFULLY, THAT HE FULLY UNDERSTANDS ITS TERMS AND CONDITIONS,
THAT HE HAS BEEN ADVISED TO CONSULT WITH AN ATTORNEY PRIOR TO EXECUTING THIS
AGREEMENT, THAT HE HAS BEEN ADVISED THAT HE HAS 30 DAYS FROM THE DATE OF RECEIPT
WITHIN WHICH TO DECIDE WHETHER OR NOT TO EXECUTE THIS AGREEMENT AND THAT HE
INTENDS TO BE LEGALLY BOUND BY IT. DURING A PERIOD OF SEVEN DAYS FOLLOWING THE
DATE OF HIS EXECUTION OF THIS AGREEMENT, THE EXECUTIVE SHALL HAVE THE RIGHT TO
REVOKE THE RELEASE CONTAINED IN SECTION 9 OF THIS AGREEMENT OF CLAIMS UNDER THE
AGE DISCRIMINATION IN EMPLOYMENT ACT BY SERVING WITHIN SUCH PERIOD WRITTEN
NOTICE OF REVOCATION. IF THE EXECUTIVE EXERCISES HIS RIGHTS UNDER THE PRECEDING
SENTENCE, HE SHALL FORFEIT ALL AMOUNTS PAYABLE TO HIM PURSUANT TO SECTION 3 OF
THIS AGREEMENT.
IN WITNESS WHEREOF, the Company has caused this Agreement to be
executed by a duly authorized officer of the Company and the Executive has
executed this Agreement as of the day and year first above written.
XXXXXXX COMPUTER SERVICES, INC.
By
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EXECUTIVE:
-----------------------------------
Xxxxxxx X. Xxxxxxxx
DATE:
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