EXHIBIT 10.23
SEVERANCE AGREEMENT
(PRESENTED: MARCH 9, 2001)
This Severance Agreement hereafter, (the "Agreement") is made and entered into
as of March 31, 2001, by and between Xxxxxxx Company, a Delaware corporation
("the Company") and Xxxxxxx X. Xxxxx, an individual ("Employee").
PURPOSE
The purpose of this Severance Agreement is to set forth the arrangements with
respect to Employee's resignation as an officer of the Company, and its
subsidiaries, divisions and affiliates, and related matters, effective MARCH 16,
2001. As of that date, Employee is relieved of all his titles, duties,
responsibilities, and authority as an officer and otherwise with respect to the
Company.
TERMS AND CONDITIONS
A. As more fully provided herein below, the salary continuation payments
described herein are in consideration of Employee's release of any and
all cause or causes of action he has, has had, or may have against the
Company and also in consideration of Employee's agreement not to
compete.
Employee shall receive a lump sum severance payment in the amount of
$834,000 (eight hundred thirty four thousand dollars) payable within 60
days of retirement. Commencing March 16, 2001 (or as soon as
administratively possible), Employee shall begin receiving retirement
benefits from the Xxxxxxx Company tax qualified, Excess Benefit and
Supplemental Retirement Plans, estimated today to be $373,000 (three
hundred, seventy three thousand dollars) per year as determined by
single life annuity amounts. The amounts payable to Employee under this
Agreement are in lieu of any amounts which may be payable to Employee
for termination pay, including but not limited to, any prior agreement
and/or standard severance (i.e., one week per year of service) policy.
Employee has the right to request a lump sum payment option for any
portion of his annual non-qualified pension benefits.
Usual and customary withholding for tax purposes will be withheld from
your lump sum severance payments and from any other payments made to
Employee, to the extent required by law. All tax liability, with
respect to any and all payments or services received by Employee under
this Agreement (other than employer withholding and employer payroll
taxes), will be Employee's responsibility.
Employee agrees not to receive or make an election to receive any of
the pension benefits he earned while working for the Company in the
United Kingdom. The Employee also agrees to sign any documents
presented by the U.K. pension plan trustees transferring benefits from
the U.K. pension plan to the U.S. plan. Further, if the
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Employee does, at a future date, elect to receive pension benefits from
the U.K. pension plan, the value of those benefits will be deducted
from future pension payments to the extent permitted by law or from
other payments from Company benefit plans, including the Executive
Survivor Income Plan.
B. Employee shall also receive a prorated bonus in the amount of $67,800
[sixty seven, thousand eight hundred dollars), payable within 60 days
of his retirement date for performance year 2001,
C. Within sixty (60) days of the last day worked (i.e., March 16, 2001),
the Company will pay to Employee that sum which is equivalent to all
unused, earned, accrued prorated vacation of Employee as of the last
day worked. Employee shall not be entitled to any future vacation pay
accruals from and after the last day worked.
D. Employee's right to exercise nonqualified stock options that Employee
received pursuant to the Company 1982 Stock Option, the 1991 Key
Employee Long-Term Incentive Plan, and the Xxxxxxx Company Bonus
Replacement Stock Option Plan and the 2001 Long-Term Incentive Plan and
will be administered in accordance with and be subject to the
respective provisions of those Plans and Option Agreements, and shall
continue for such period of time as provided by such Plans and Option
Agreements upon Employee's retirement. The ability to utilize the
accelerated ownership feature of the Plans shall continue through March
16, 2001.
E. The Company will continue Employee's coverage under the existing
Company Executive Survivor Income Plan, based upon Employee's
compensation rate defined under this Agreement for the purposes of the
Plan at $2,271,000 (two million, two hundred, seventy one thousand
dollars).
F. Employee hereby irrevocably elects to retire March 16, 2001 and shall
be eligible for pension benefits through Xxxxxxx Company Salaried
Pension Plan, the Xxxxxxx Company Excess Benefit or Supplemental
Retirement Plan [collectively the "Pension Plans"). Employee will be
eligible for annual pension benefits based upon Employee's highest
consecutive three-year earnings during his last ten years of employment
with the Company. At the time Employee elects to begin receiving such
benefits, he should contact the Employee Benefits Department of the
Company.
G. Except as otherwise provided herein, benefits for Employee and his
eligible dependents, as outlined in "A Guide To Your
Medical/Mental/Prescription Drug Benefits" effective 1995, and under
the Executive Income Survivor Plan, subject to the respective terms and
provisions thereof, including any amendment or alteration thereof after
the date of this Agreement, will be continued for Employee to the
extent provided in such plans, upon Employee's retirement.
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H. Company will pay for financial planning and/or tax advice provided to
Employee, up to $10,000 (ten thousand dollars) for the 2001 tax year.
I. In further consideration of the foregoing, Employee agrees that, for
the respective Restricted Periods (as hereafter defined), Employee
shall not:
(i) directly or indirectly, accept any employment, consult for or
with, or otherwise provide or perform any services of any
nature to, for or on behalf of any person, firm, partnership,
corporation or other business or entity that manufactures,
produces, distributes, sells or markets any of the Products
(as herein below defined) in the Geographic Area (as
hereinafter defined), including, but not limited to, General
Xxxxx, Kraft/Post, Quaker, Nabisco, Pepsi/Frito Lay,
Xxxxxx-Xxxxxxx, M&M/Mars, Pillsbury/Grand Met, Malto Meal,
Ralcorp Cereal, and/or any private label cereal company and/or
(ii) directly or indirectly, permit any business firm which
Employee, individually or jointly with others may own, manage,
operate, or control, to engage in the manufacture, production,
distribution, sale or marketing of any of the Products in the
Geographic Area.
For purposes of this non-compete provision, the term "Products" shall
mean ready-to-eat cereal products, toaster pastries, cereal bars,
granola bars, frozen waffles, crispy marshmallow squares, bagels, and
any other similar grain-based convenience food. For purposes of this
non-compete provision, the term "Geographic Area" shall mean any
country in the world where the Company (including any subsidiary,
division or affiliate thereof) manufactures, produces, distributes,
sells or markets any of the Products at any time during the applicable
Restricted Period (as defined below). For purposes of this paragraph,
the Restricted Period with respect to the Products shall be two (2)
years from the date of this Agreement
J. As a result of the lump sum payments, the Company, its subsidiaries,
divisions and affiliates (including the directors, officers and
employees of any of them) shall have no further obligations of any kind
or nature to Employee, including, without limitation, obligations for
any termination, severance or vacation pay, bonus, etc., except as
specifically provided herein and except as may be provided under the
applicable eligible Company benefit plans in accordance with their
terms.
K. Employee further agrees to and shall return to the Company no later
than his last day worked, without limitation, all files, documents,
correspondence, memoranda, customer and client lists, prospect lists,
subscription lists, contracts, pricing policies, operational methods,
marketing plans or strategies, product development techniques or plans,
business acquisition plans, employee records, technical processes,
designs and design projects, inventions, research project
presentations, proposals, quotations, data, notes, records,
photographic slides, chromes, photographs, posters, manuals, brochures,
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internal publications, books, films, drawings, videos, sketches, plans,
outlines, computer disks, computer files, work plans, specifications,
credit cards, keys (including elevator, pass, building and door keys),
identification cards, and any other documents, writings and materials
that Employee came to possess or otherwise acquire as a result of
and/or in connection with the Company. Should Employee later find any
Company property in his possession, Employee agrees to immediately
return it.
L. Employee agrees that he will not divulge any/all proprietary and/or
confidential business information, except to the extent required
pursuant to a legal subpoena or a legal proceeding.
M. Employee agrees to conduct himself in a manner that reflects positively
on the Company. Similarly, the Company agrees to conduct itself in a
manner that reflects positively on Employee. Employee agrees to
cooperate truthfully and fully with the Company in connection with any
and all existing or future investigations or litigation of any nature
brought against it or its affiliates involving events which occurred
during his employment with the Company. Employee agrees to notify the
Company immediately if subpoenaed or asked to appear as a witness in
any matter related to the Company or its affiliates. The Company will
reimburse Employee for reasonable out-of-pocket expenses and, if
approved in advance, attorney's fees incurred as a result of such
cooperation. Nothing herein shall prevent Employee from communicating
with or participating in any government investigation.
N. Employee has carefully read this Severance Agreement and understands
its contents. Employee recognizes that he will have no further job
responsibilities at Xxxxxxx Company.
O. Employee has been advised to seek legal council to understand its full
force and effect. Employee has been given the opportunity to consult
with a lawyer.
P. On behalf of Employee, his relatives, executors and administrators,
Employee irrevocably and unconditionally releases, waives and forever
discharges the Company, its owners, stockholders, affiliates,
subsidiaries, agents, directors, officers, employees, representatives,
insurance carriers, attorneys, advisors, and their predecessors,
successors, heirs, executors, administrators and assigns (collectively
"Releases") from any and all claims, demands and causes of action he
has or may claim to have arising from or relating in any way to his
employment, leave of absence, or separation of employment. This
includes, but is not limited to all claims under the Age Discrimination
in Employment Act of 1967 (as amended), Title VII of the Civil Rights
Act of 1964, as amended, Section 1981 of the Civil Rights Act of 1986,
as amended, the Civil Rights Act of 1991, the Xxxxxxx-Xxxxxx Civil
Rights Act and any other employment discrimination laws, the Family
Medical Leave Act of 1993, the Rehabilitation Act of 1993, the Equal
Pay Act of 1963, the Uniform Services Employment and
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Reemployment Rights Act of 1964, ERISA, Americans and Disabilities Act,
the Workers Adjustment and Retraining Notification Act (WARN), and any
common law or other federal, state or local law or ordinance.
Employee agrees that this Severance Agreement is intended to and shall
preclude any claim that his separation was in retaliation for
exercising any right to which Employee is entitled under the provisions
of an employee benefit plan, or for the purpose of interfering with the
attainment of any right to which Employee may become entitled under
such a plan or under the Employee Retirement Income Security Act of
1974, as amended, in violation of Section 510 of ERISA, 29 USC Sec.
1140, except as specifically altered and/or modified by the Severance
Agreement. Nothing in the Agreement shall be construed as barring any
other claims under Section 502 ERISA.
Employee agrees he has not filed any charges, claims, or lawsuits
against the Company involving any aspect of his employment that have
not been terminated as of the date of this Agreement. If Employee has
filed any charges, claims, or lawsuits against the Company, Employee
agrees to seek immediate dismissal with prejudice and provide written
confirmation immediately (i.e., court order, and/or agency
determination) as a condition to receiving any benefits under this
Agreement. Employee additionally waives and releases any right he may
have to recover in any lawsuit or proceeding brought by him, an
administrative agency, or any other person on his behalf or which
includes him in any class. If Employee breaches any portion of this
Release of Claims.
Employee acknowledges that he will be liable for all expenses,
including costs and reasonable attorney's fees incurred by any entity
released in defending the lawsuit or claim, regardless of the outcome.
Q. Employee accepts the terms and conditions of the Agreement knowingly
and voluntarily.
R. Employee agrees and acknowledges that the consideration (severance pay
and benefits) described in this Agreement is in full settlement of any
and all such aforementioned claims, demands and causes of action he has
or may have.
S. The Company agrees to indemnify, hold and save harmless Employee from
and against any and all claims, liens, demands, damages, liability,
actions, causes of action, settlement costs, and approved attorney's
fees and expenses sustained or asserted against Employee arising out
of, resulting from, or attributable to Employee's conduct during his
employment with the Company; provided however, that the Company shall
not be liable hereunder to indemnify or hold and save harmless Employee
against liability for damages arising during the term of his employment
involving willful
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misconduct, theft, malfeasance, unlawful activity, and/or immorality.
Nothing in this provision shall waive any eligible coverage provided in
surviving provisions of any applicable Directors and Officers Liability
insurance policy.
T. Employee understands and agrees that signing this Severance Agreement
and accepting the consideration for it shall not be deemed or construed
as an admission of liability or responsibility at any time for any
purpose. Liability for any and all claims is expressly denied by
Xxxxxxx Company.
U. Employee has disclosed to the Company any information in his possession
concerning any conduct involving the Company that Employee has any
reason to believe involves any false claims to the United States or is
or may be unlawful or violates Company Policy in any respect.
V. Employee signs this Severance Agreement knowingly and voluntarily with
full intent to release the Company, its subsidiaries, affiliates,
agents, employees, directors, shareholders and any other parties acting
on behalf of the Company.
W. Employee has had at least twenty-one (21) days to consider this
Agreement. Employee is aware that he may sign and return the Agreement
before the end of twenty-one (21) days. If Employee does so, Employee
agrees that his signature was done knowingly and voluntarily, without
any improper inducement by the Company.
X. Employee understands that this Severance Agreement shall not affect any
right to any vested benefits under the terms and provisions of the
Company's defined benefit plans in which Employee is eligible and
participates, except as specifically adhered and/or modified by this
Severance Agreement.
Y. Employee also understands that the Company is not obligated to offer
employment to him now or in the future.
Z. Employee understands that the Nondisclosure Confidentiality Agreement
that he signed shall remain in full force and effect indefinitely.
AA. Employee understands that if he disavows or revokes this Agreement, or
if the Agreement is found to be unenforceable by a court of law in an
action initiated by Employee, Employee agrees to immediately pay to
Xxxxxxx Company all amounts received, or to authorize the Company to
offset this indebtedness from any account he may have.
BB. Employee agrees that if any provision of this Severance Agreement is
invalid or unenforceable by a court of law, it will not effect the
validity or enforceability of any other provision of this Agreement
which shall remain in full force and effect.
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CC. Employee agrees that the construction, interpretation, and performance
of this Agreement shall be governed by the laws of Michigan, including
conflict of laws. It is agreed that any controversy, claim or dispute
between the parties, directly or indirectly, concerning this Agreement
or the breach thereof shall only be resolved in the Circuit Court of
Xxxxxxx County, or the United States District Court for the Western
District of Michigan, whichever court has jurisdiction over the subject
matter thereof, and the parties hereby submit to the jurisdiction of
said courts.
DD. For purposes of any construction or interpretation of this Severance
Agreement, all terms and provisions thereof shall be deemed to have
been mutually drafted by both of the parties.
EE. Employee acknowledges and agrees that this is the entire Severance
Agreement and the only promises made to him are those contained within
this document.
IN WITNESS WHEREOF, the parties hereto have duly executed this Agreement as of
the day and date first above written in Battle Creek, Michigan.
By: /s/ Xxxxxx X. Xxxxxxxxx /s/ Xxxxxxx X. Xxxxx
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Xxxxxx X. Xxxxxxxxx Xxxxxxx X. Xxxxx
Chairman of the Board,
President and Chief Executive Officer
March 16, 2001 December 6th 2001
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Date Date
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