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Exhibit (10)(y)
[SUNDSTRAND CORPORATION LETTERHEAD]
September 22, 1997
Xx. Xxxxxxx X. Xxxxxxxxx
0000 Xxxxxxxx Xxxxx
Xxxxxxxx, Xxxxxxxx 00000
Dear Xxxx:
The purpose of this letter agreement is to set forth terms and conditions
relating to certain aspects of your retirement from Sundstrand Corporation (the
"Company") effective December 31, 1997. Your signing below will indicate your
agreement with the provisions of this letter agreement, which supersedes all
prior negotiations, understandings and agreements and constitutes the entire
agreement between the Company and you, with both parties intending to be
legally bound and acknowledging that modifications hereto may be made only in
writing.
Your execution of this letter agreement will acknowledge your election to
retire effective December 31, 1997 (the "Retirement Date"). You will continue
to serve in your current capacities as Vice President and General Counsel and
Secretary of the Company for the remainder of 1997 or until a successor is
named by the Company, whichever is earlier. If your service in those
capacities ends earlier than December 31, 1997, you will still remain an
employee of the Company through December 31, 1997 with full continuation of
your benefits including accrued vacation and with continuation of your salary
at the rate provided for by this letter agreement. At the time requested by
the Company, you will announce, in a manner reasonably designated by the
Company, your intention to retire on December 31, 1997. Effective as of the
Retirement Date, you will resign from all offices, directorships and other
positions you hold with the Company and its subsidiaries and affiliates
(collectively, with the Company, the "Companies"), and you will thereafter
receive all retiree and other benefits to which you are entitled under the
applicable terms and conditions of all of the compensation and benefit plans,
programs and arrangements of the Companies, including but not limited to
retiree medical benefits and payment, in accordance with the terms of deferral,
of any compensation previously deferred by you. Your restricted stock awards
and your stock option awards will fully vest on December 31, 1997 without any
further approval or other action being required, and the continued
exercisability of your stock options will be governed by the relevant plans as
applicable to retirees. You will be paid $116,566 in February 1998,
representing your bonus earned in 1997 (from which the Company will withhold
federal and state income taxes and applicable payroll taxes).
As additional post-retirement benefits, the Company will reimburse you for
expenses which you incur in 1998 for (i) income tax return preparation and tax
and financial planning services, up to a limit of $4,700 and (ii) physical
examinations for you and your wife,
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Xx. Xxxxxxx X. Xxxxxxxxx
September 22, 1997
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including transportation and other expenses, in accordance with the policies of
the Company which are in effect for 1998 for executive physical examinations.
During the post-retirement period from January 1, 1998 through June 30,
1999, you will remain available to consult with the Company regarding matters
as to which you have special knowledge or experience, including litigation
matters which are pending as of the time of your retirement. Those consulting
services will not require more than 20 hours of working time from you during
any calendar month, and the specific scheduling of your consulting will be as
reasonably agreed upon between you and the Company. In addition, during the
months of January, February and March, 1998, the Company will provide you with
up to eight hours per month of secretarial support. That support will be
provided by Xxxxx Xxxxx, and the specific scheduling of her work for you will
be subject to her availability.
In connection with your transition to retirement, you will not receive
additional awards of restricted stock or stock options during the rest of 1997.
In addition, your travel on behalf of the Company (including your use of the
Company airplane) will be as approved in advance by the Chief Executive Officer
of the Company. Finally, your salary for the period from September 27, 1997
through December 31, 1997 will be reduced to $2,800 per biweekly pay period,
but that reduction will be offset by compensation included in the monthly
payments described in the following paragraph.
As consideration for the consulting services referred to above and for the
release and the noncompetition covenant set forth in this letter agreement, the
Company will make an initial payment in the amount of $70,000 on January 2,
1998 and thereafter an additional eighteen (18) monthly payments at the
beginning of each month in the amount of $25,000 each, commencing with the
month of January 1998 and ending with the month of June 1999; provided that if
at any time prior to receipt of such a monthly payment you have materially
breached any of the terms of this letter agreement, you shall not be entitled
to any further monthly payments; and provided further that you shall be
entitled to notice of any breach and offered 30 days in which to cure said
breach. If you fail to cure said breach within said 30 days, your remaining
payments shall be forfeited. Any dispute as to whether a breach has occurred
shall be subject to determination by a court of competent jurisdiction.
If, not later than November 30, 1997, you elect in writing to receive your
pension benefits from the Company not as a lump sum payable in January 1998 but
as a monthly retirement benefit (with a joint and survivor feature) commencing
in July 1999, (i) the amount of the monthly payments to be made to you as
described in the preceding paragraph of this letter agreement will be $29,250
instead of $25,000 and (ii) the Company will pay you a supplemental monthly
retirement benefit (with a joint and survivor feature) in the amount of
$781.86, commencing in July 1999. If you elect to receive your pension
benefits as a lump sum payable in January 1998, the Company will pay you a
supplemental monthly retirement benefit (with a joint and survivor feature) in
the amount of $176.05, commencing in July 1999. Either of such supplemental
monthly retirement benefits shall be payable for the
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Xx. Xxxxxxx X. Xxxxxxxxx
September 22, 1997
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period you would have otherwise received a regular monthly pension payment
under the terms of the pension plan.
You acknowledge that the payment of taxes with respect to any payments or
benefits provided by the Company is your sole responsibility, whether or not
income taxes are withheld by the Company, and you agree to hold the Company
harmless from any obligation in connection therewith, including interest and
penalties.
You acknowledge that you have been a senior executive officer of the
Company and (i) are privy to and have knowledge of trade secrets and other
Confidential Information (defined below), (ii) have developed long term
personal relationships with many of the Companies' customers as a result of
your employment with the Company, and (iii) have occupied a position of trust
and confidence with respect to the Companies' customers and Confidential
Information. For purposes of this letter agreement, "Confidential Information"
shall mean trade secrets and confidential or proprietary information regarding
designs, inventions, existing and proposed new products, processes, techniques,
testing and servicing procedures, know how, programs, equipment, prototypes,
costs, margins and pricing structures, business plans, projections, market
analyses and marketing plans, sales figures and customer relationships,
customer lists, confidential manufacturing and financial data and any other
information regarding the Companies not generally known or a matter of public
knowledge or available from other sources without restrictions and not bound to
any obligation of confidentiality to the Company. You also acknowledge that
the Companies conduct their business worldwide and that your duties and
responsibilities have been worldwide.
You agree that during the period beginning on the date hereof and ending
two years from the Retirement Date you will not directly or indirectly
influence or attempt to influence any of the Companies' customers or
prospective customers in a manner to divert or attempt to divert business away
from the Companies. In addition, you agree that for the period aforestated you
will not own, manage, operate, participate in, perform services for or
otherwise carry on, assist or be connected with any business engaged in the
design, development, manufacture and/or sale of products or services
competitive with any of the present products or services of the Companies,
without the prior written consent of the Company's Chief Executive Officer,
which consent will not be unreasonably withheld; provided, however, that you
may own, directly or indirectly, solely as an investment, publicly traded
securities of any company as long as you do not participate in the management
of that company and you do not, directly or indirectly, own more than one
percent (1%) of any class of securities of that company.
You agree that from and after the date hereof you will not, without the
written consent of the Company's Chief Executive Officer, disclose to others
any trade secrets or other Confidential Information of which you have
knowledge. The foregoing notwithstanding, you agree at all times to comply
with the terms and conditions of that certain "Employee Patent
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Xx. Xxxxxxx X. Xxxxxxxxx
September 22, 1997
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and Confidential Information Agreement" previously executed by you. You also
agree to turn over to the Company on the Retirement Date all copies of
documents and other written, printed or graphic matter and computer materials
in your possession or control that relate to the Companies' business.
You agree not to divulge or to disclose, without prior written permission
from the Company's Chief Executive Officer, at any time in the future any
information concerning the terms of this letter agreement unless required by
court process or order of court or otherwise as required by law; provided,
however, that you may disclose such information, on a confidential basis, to
members of your immediate family, your attorneys, your tax advisers, and/or
your financial and estate advisers. In view of the positions you held with the
Companies, you agree to favorably promote the Companies, their management and
businesses in your dealings with third parties and, to that end, you further
agree not to engage in any conduct harmful to the Companies or their employees
or businesses and not to publish or otherwise make any statement which is
critical of the Companies, their employees or their businesses or products.
The Company agrees to direct its officers elected by its Board of Directors not
to make disparaging remarks about you.
You hereby unconditionally release and forever discharge the Companies and
their divisions and their directors, officers, employees and agents, and their
respective predecessors, successors, heirs, personal representatives and
assigns, from any and all actions, claims, rights, lawsuits, damages and
expenses (including attorneys' fees) of any kind, known or unknown, fixed or
contingent, liquidated or unliquidated, in law or in equity, and whether
arising from tort, statute or contract, which you or your heirs or personal
representatives now have, or have ever had, arising from your employment and
other relationships with the Companies; provided, however, that this release
and discharge does not apply to any rights or claims arising under this letter
agreement or under any benefit plan of the Company in which you are a vested
participant. This release and discharge includes a waiver of any claim you may
have under local, state or federal law, including but not limited to the
Illinois Human Rights Act, Title VII of the Civil Rights Act of 1964, the
Employee Retirement Income Security Act, the Americans with Disabilities Act,
and the Age Discrimination in Employment Act of 1967, as amended by the Older
Workers Benefit Protection Act, in each case as amended, (the "ADEA") and the
law of defamation, libel, slander, invasion of privacy, intentional infliction
of emotional distress, interference with contractual relations, retaliatory
discharge, breach of contract, wrongful discharge, implied contracts or implied
covenants of good faith, or fair dealing, and any other statute, authority or
law. You agree not to sue the Company or any of the other released entities or
persons with respect to claims covered by the foregoing release. You also
agree that the additional compensation which is referred to in the third, sixth
and seventh paragraphs of this letter agreement will be payable to you only if
you execute and deliver to the Company on or after the Retirement Date a waiver
and release in the form attached hereto as Exhibit A.
By signing below, you acknowledge your understanding that conduct contrary
to the provisions of this letter agreement on your part will constitute a
breach of this letter
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EXHIBIT (10)(Y)
Xx. Xxxxxxx X. Xxxxxxxxx
September 22, 1997
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agreement by you which is likely to cause irreparable harm to the Company.
Therefore, you hereby acknowledge and agree that, in the event of a breach of
this letter agreement by you, damages constitute an inadequate remedy at law
and that the Company shall be entitled to specific performance of the terms of
this letter agreement, attorneys fees and/or injunctive relief. This letter
agreement shall be construed in accordance with the laws of the State of
Illinois (other than its conflicts of laws principles) applicable to contracts
made and to be performed entirely within Illinois, and you and the Company
agree that courts in Illinois shall have personal jurisdiction over both
parties in any lawsuit with respect to this letter agreement or your employment
and other relationships with the Companies, and venue for any such suit shall
lie in any state or federal court in the City of Rockford, Illinois. You
acknowledge and agree that you would not otherwise be entitled to receive from
the Company the consideration set forth in the third, sixth and seventh
paragraphs of this letter agreement but for the agreement of the Company herein
to provide such consideration. You also acknowledge and agree that this letter
agreement is not in connection with an exit incentive, early retirement, or
other employment termination program offered to a group or class of employees.
As to your release and waiver of rights under the ADEA, you acknowledge
that you are hereby advised to consult with an attorney prior to executing this
release and have been given a period of 21 days within which to consider its
terms. You further acknowledge being informed that for a period of 7 days
following your execution of this letter agreement, you have the right to revoke
said document and that it shall not become effective or enforceable until such
revocation period has expired.
Very truly yours,
SUNDSTRAND CORPORATION
/s/ Xxxxxx X. Xxxxxxx
Xxxxxx X. Xxxxxxx
President and Chief Executive Officer
I have read and agree to the terms and conditions stated above.
Date: September 22 , 1997
/s/ Xxxxxxx X. Xxxxxxxxx
Xxxxxxx X. Xxxxxxxxx
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EXHIBIT A
WAIVER AND RELEASE
FOR VALUE RECEIVED, I, Xxxxxxx X. Xxxxxxxxx, in connection with that certain
letter agreement by and between Sundstrand Corporation (the "Company") and
myself, dated September 22, 1997, with respect to my retirement from employment
with the Company (the "Letter Agreement"), do hereby agree as follows:
1. Release
(a) I hereby unconditionally release and forever discharge the Company
and its subsidiaries and affiliates (collectively, with the Company, the
"Companies") and their divisions and their directors, officers, employees
and agents, and their respective predecessors, successors, heirs, personal
representatives and assigns, from any and all actions, claims, rights,
lawsuits, damages and expenses (including attorneys' fees) of any kind, know
or unknown, fixed or contingent, liquidated or unliquidated, in law or in
equity, and whether arising from tort, statute or contract, which I or my
heirs or personal representatives now have, or have ever had, arising from
my employment and other relationships with the Companies. This includes a
waiver of any claim I may have under local, state or federal law, including
but not limited to the Illinois Human Rights Act, Title VII of the Civil
Rights Act of 1964, the Employee Retirement Income Security Act, the
Americans with Disabilities Act, and the Age Discrimination in Employment
Act of 1967, as amended by the Older Workers Benefit Protection Act, in each
case as amended, (the "ADEA") and the law of defamation, libel, slander,
invasion of privacy, intentional infliction of emotional distress,
interference with contractual relations, retaliatory discharge, breach of
contract, wrongful discharge, implied contracts or implied covenants of good
faith, or fair dealing, and any other statute, authority or law; provided,
however, the foregoing release shall not apply to any claim relating to my
rights and benefits under the Letter Agreement or under any benefit plan of
the Company in which I am a vested participant.
(b) I also acknowledge and agree that by entering into the Letter
Agreement and executing this waiver and release I can never make claim or
demand upon or sue the Companies or any of the other released entities or
persons with respect to claims covered by the foregoing release.
2. Representations and Warranties
I hereby represent and warrant that: (a) I have no pending claims against
the Companies (or any of the other released entities or persons covered by
the foregoing release) with any municipal, state, federal or other
governmental or nongovernmental entity; and (b) that I will not file any
such claims with respect to any events occurring on or before the date
hereof, other than to enforce the Letter Agreement.
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3. Acknowledgment
(a) I hereby acknowledge that: (i) the Company has given me adequate time
to review and consider this waiver and release; (ii) that the Company has
advised, and does hereby in writing advise, me to consult with an attorney
before signing this waiver and release; (iii) that I have read this waiver
and release in its entirety; (iv) that I have had ample opportunity to
confer with my own attorney for assistance and advice concerning this waiver
and release; (v) that I understand the terms of this waiver and release;
(vi) that I understand that the terms of this waiver and release are legally
enforceable; (vii) that I have entered into this waiver and release freely
and voluntarily and was in no manner coerced into signing it; (viii) that
neither this waiver and release nor the discussion and negotiation leading
to it are or were, in any manner, discriminatory; and (ix) that I was, and
hereby am, encouraged to discuss any questions, problems, or issues
concerning this waiver and release with the Company before signing it.
(b) I acknowledge that it is my intent that my waiver with regard to ADEA
fully comply with the Older Workers Benefit Protection Act, and,
accordingly, I further acknowledge and agree that: (i) the compensation and
benefits to which I am entitled as a result of the Letter Agreement exceed
in nature and scope those which I otherwise would have been entitled to
receive; (ii) I have been given at least twenty-one (21) days within which
to consider this waiver and release (but I may sign this waiver and release
and return it to the Company before the end of those twenty-one (21) days if
I elect to do so); and (iii) I have the right to revoke this waiver and
release in full within seven (7) calendar days after my execution hereof and
that after such time this waiver and release shall become enforceable and
irrevocable.
4. Continued Applicability of Letter Agreement
Notwithstanding this waiver and release, the terms of the Letter Agreement
are and remain valid, binding and in full force and effect.
Dated: ___________________________ _____________________________
Xxxxxxx X. Xxxxxxxxx
