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EXHIBIT 10.33
January 24, 2001
Xx. Xxxxxxx X. Xxxxxx
00 X. Xxxxxxxx Xxxxx, #0X
Xxxxxxx, XX 00000
Dear Xxxxxxx:
This letter when executed by you will represent our agreement with
respect to your separation of employment from Xxxxxx Co. ("XXXXXX") and its
parent, Xxxxxx Holding Co. (PA), Inc. ("HOLDING") (the term "COMPANY" shall
refer to Xxxxxx or Holding or both, and any and all of Holding's subsidiaries,
ventures or affiliates, as the context shall determine), as follows:
1. Acceptance of this letter by your signature below will constitute
your resignation as an officer and employee of the Company, effective February
19, 2001, subject to the terms of this letter. The Company agrees that your
resignation shall be treated as a termination of your employment under Section
6.3 ("Not For Cause or For Good Reason") of your Employment Agreement dated as
of November 24, 1997 (such Employment Agreement, as amended by Amendment No. 1
dated as of January 1, 1999 and Amendment No. 2 dated as of September 1, 2000,
is referred to herein as the "Employment Agreement"), and, as a result, you will
be entitled to the payments and benefits called for by the Employment Agreement
for a termination of your employment pursuant to such Section 6.3, including the
amount of $500,000 less any taxes that may be required to be withheld, to be
paid in accordance with the Company's normal payroll practices over a period of
one year commencing February 19, 2001, which the parties hereto agree will
constitute payment in full of the amount or amounts due under clauses (b)(1) and
(2) of Section 6.3.
2. For a period of 12 months following the effective date of your
resignation, you shall continue to participate in the Company's health, life and
disability insurance programs or, to the extent that such continued coverage is
not permissible, the Company shall pay for the cost of comparable coverage,
under COBRA with respect to health insurance; provided, however, that such
coverage shall terminate prior to the expiration of the 12-month period to the
extent that you receive similar benefits from subsequent employment. Upon
execution of this agreement, you will receive payment for your accrued vacation
time, which the parties agree to be 200 hours.
3. The Company shall transfer to you ownership of the automobile and
computer that you have been using through the date of your resignation.
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4. The Company hereby engages you as a consultant for one year
commencing on February 19, 2001 to provide the Company with advisory services
from time to time as reasonably requested by the Company subject to your
reasonable availability. In your role as a consultant, you will work directly
for the Board of Directors of the Company and your primary responsibilities will
be (i) assisting in development of a clear and concise strategy for the Company,
(ii) working with employees and customers during the period of your transition
to retain key employees, customer relationships and industry visibility, and
(iii) performing such other assignments as may be mutually agreed upon by you
and the Board of Directors of the Company. Your retention as a consultant shall
not be terminable by the Company except if you have willfully refused to
substantially perform such consulting services as had been mutually agreed upon
and as shall have been reasonably requested by the Board of Directors of the
Company (other than any such refusal resulting from your incapacity due to
mental illness or physical illness or injury), after a demand for substantial
performance has been delivered to you by the Board of the Company, where such
demand specifically identifies the manner in which the Board believes that you
have refused to substantially perform your duties and the passage of a
reasonable period of time (not to be less than 20 days) for you to comply with
such demand, and such failure continues. The parties can extend this agreement
by mutual written agreement.
5. You shall also serve as a Director and Vice Chairman of the Board of
the Company during the period of your consultancy.
6. For your services as a consultant, you will be paid a monthly (or
more frequent) consulting fee at an annual rate of $265,000. In addition, your
reasonable business expenses shall be reimbursed upon presentation of supporting
documentation. You shall also have the use of a Franklin Park office and the
services of an assistant through the consulting period. In the event of a sale
transaction, a bankruptcy or similar filing involving the Company, or your
death, prior to the payment to you of the full $265,000, any remaining monthly
(or more frequent) payments of such $265,000 shall become immediately payable.
7. Of the 500 unvested options to acquire Company stock at a $2,421
strike price per share currently held by you, 200 shall be forfeited upon your
execution of this letter agreement. Options for the remaining 300 shares shall
continue to be outstanding and shall vest in accordance with the terms of the
options if the requirements for vesting thereunder are satisfied.
8. You shall have the right to put your "excess rollover shares" in the
Company back to the Company at the greater of $2,421 per share or the stock's
fair market value, as determined under the shareholder agreement dated as of
November 24, 1997, between July 1, 2001 and December 31, 2001.
9. As further consideration for your consulting services, the Company
shall pay you a bonus of $250,000 on February 18, 2002 or such earlier date as
the Board of Directors may determine in its discretion.
10. Upon the closing of a Sale Transaction, if you were active in the
transaction, you will be paid an additional transaction bonus of not less than
$250,000 nor more than $1,000,000, the final amount of such transaction bonus to
be determined by the Board in its sole discretion, based on the transaction
price and your role in and contribution toward the transaction.
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11. You and the Company agree not to disparage one another.
12. This agreement will be binding upon the successors and assigns of
the Company.
13. You and the Company agree to execute mutual releases required by
Section 6.4 of the Employment Agreement prior to the payment of any amounts
hereunder. As a further condition of this agreement, you agree to adhere to the
non-competition, non-disclosure of proprietary information, and other provisions
of Section 7 of the Employment Agreement.
Please indicate your acceptance of the terms hereof by signing in the
appropriate space below.
Very truly yours,
Xxxxxx Co.
By:_______________________________
Name: Xxxx X. Xxxxxx
Title: Vice President, Secretary
& General Counsel
Xxxxxx Holding Co. (PA), Inc.
By:_______________________________
Name: Xxxx X. Xxxxxx
Title: Vice President, Secretary
& General Counsel
Agreed and accepted:
Dated:____________, 2001
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Xxxxxxx X. Xxxxxx
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