SEPARATION AND CONSULTING AGREEMENT
This Separation and Consulting Agreement (the "Agreement") is entered into by
and between Xxxx Xxxxxxxx, residing at 0000 Xxxxxxx Xxxx Xxxxx, Xxxxxx Xxxxx,
Xxxxxxx 00000 (the "Employee") and Church & Xxxxxx Co., Inc., with its corporate
headquarters at 000 Xxxxx Xxxxxxxx Xxxxxx, Xxxxxxxxx, Xxx Xxxxxx 00000 (the
"Company").
WHEREAS, the Employee is employed by the Company as its Vice President, General
Counsel, and Secretary; and
WHEREAS, the Company and the Employee have agreed that the Employee will resign
and retire from his position as Vice President, General Counsel, and Secretary
effective as of September 30, 2002, or such later date as provided herein; and
WHEREAS, the Company and the Employee wish to fully settle all matters between
them arising out of the Employee's employment or his resignation and retirement
therefrom; and
WHEREAS, as a result of the personalized knowledge gained by the Employee during
his employment, the Company desires to retain the services of the Employee as an
independent consultant following his resignation and retirement.
NOW THEREFORE, in consideration of the mutual promises contained herein, the
parties hereto, intending to be legally bound, agree as follows:
1. Agreement to Resign and Retire.
1.1 The Employee hereby resigns and retires, effective September 30, 2002,
or such later date as provided in Section 1.1(a) or (b) below (the "Retirement
Date"), from his position as the Company's Vice President, General Counsel, and
Secretary. Until such time, the Employee will continue to be an employee of the
Company, subject to the terms of this Agreement, and the Employee will continue
to devote his full time and best efforts to performing his duties as the
Company's Vice President, General Counsel and Secretary, as assigned to him from
time to time in accordance with the Company's policies.
1.1(a) The Company may, in its sole discretion, delay the Retirement
Date beyond September 30, 2002, until such time as the Company hires an
individual to replace the Employee in his position as the Company's Vice
President, General Counsel, and Secretary, and such individual commences
employment with the Company; provided, however, except as provided in
Section 1.1(b) below, the Retirement Date shall not be later than December
31, 2002.
1.1(b) The Company may, in its sole discretion, extend the Retirement
Date beyond December 31, 2002, for additional three (3) month periods
commencing on January 1, 2003; provided that:
(i) The Company shall give the Employee no less than thirty (30)
days prior notice of its election to extend the Retirement for an
additional three (3) month period; and
(ii) The compensation paid to the Employee under Sections 1.2,
1.3, and 1.4 below, shall continue during such three (3) month period,
except that the Employee's regular base salary shall be increased to
$235,000 per annum effective as of January 1, 2003; and
(iii) The Annual Consulting Fee payable to the Employee in
accordance with the terms of the Consulting Agreement shall be
increased as described in Section 6.1 below.
1.2 Subject to Section 1.1(b), until the Retirement Date, the Company
will continue to pay the Employee his regular base salary of $225,000 per
annum (which became effective as of January 1, 2002), and the Employee
shall receive a par bonus for 2002 equal to 39% of his base salary prorated
for that portion of the year he is employed by the Company prior to the
Retirement Date payable at such time and manner as the Company normally
pays such bonuses (less required withholding).
1.3 Until the Retirement Date, the Employee may continue to utilize
any vacation time he has accrued under the Company's vacation policy. As
soon as practicable following the Retirement Date, the Company shall pay
the Employee in a single lump sum payment, less applicable withholding, for
any accrued, but unused vacation time in accordance with the terms of the
Company's vacation policy.
1.4 Until the Retirement Date, the Employee may continue to
participate in the Company's various retirement, health, welfare and fringe
benefit plans, programs, policies and arrangements ("Employee Benefit
Plans") for which the Employee is otherwise eligible, pursuant to the terms
of such plans. Following the Retirement Date, the Employee generally will
cease to participate in the Employee Benefit Plans, except to the extent
provided therein or by applicable law. Nothing in this Agreement or the
Consulting Agreement shall be interpreted to expand any right the Employee
may have under the Employee Benefit Plans unless otherwise expressly
provided herein.
1.5 Following the Retirement Date, the Employee will be eligible for
continued dental coverage for himself and his dependants in accordance with
the terms of the Consolidated Omnibus Budget Reconciliation Act of 1985
("COBRA"). The Employee shall be required to pay one-hundred percent (100%)
of the COBRA premiums for such coverage.
1.6 Following the Retirement Date, the Employee shall be eligible to
apply for and receive medical insurance under the Company's Medical
Insurance Plan, as it may be amended from time to time. Benefits for
retirees are currently the same as those for active employees, but the Plan
is subject to amendment or termination at any time by the Company. If the
Employee elects not to apply for such coverage within thirty (30) days
following his Retirement Date or if the Employee terminates coverage under
the Medical Insurance Plan at any time for any reason, the Employee shall
not thereafter be eligible to reapply for coverage under the Medical
Insurance Plan. The Employee shall be required to pay one-hundred percent
(100%) of the premiums paid by the Company (or other cost of coverage, if
self insured in whole or in part) for coverage under the Medical Insurance
Plan. Upon the Employee's attainment of age 65, the Employee's coverage
under the Company's Medical Insurance Plan shall cease, except as otherwise
provided therein.
2. Stock Options. For a period of two (2) years following the Retirement
Date, the Company agrees that any issued and outstanding nonqualified stock
options granted to the Employee after December 31, 1998, under the Company's
1983, 1994, and 1998 Stock Option Plans shall continue to vest and be
exercisable as if the Employee were still actively employed. After such two (2)
year period, any remaining options shall automatically expire and terminate.
With respect to vested but unexercised nonqualified stock options granted to the
Employee prior to January 1, 1999, the Employee shall have three (3) years from
the Retirement Date to exercise such options.
3. Computer. Following the Employee's resignation and retirement, the
Company agrees to give the Employee the computer that was provided by the
Company to the Employee for use in his employment as of the execution date of
this Agreement; provided that, the Company expressly reserves the right to
remove any and all secret, confidential, proprietary or other sensitive
information, software, program, or application relating to the Company that the
Company determines, in its sole and absolute discretion, is necessary or
advisable prior to turning the computer over to the Employee. The Company
further reserves the right to remove any and all software, programs, or other
applications to the extent that failing to do so would violate any licensing or
usage agreement the Company may have. The Employee agrees to cooperate in the
identification and removal of all such items, and agrees not to make any copies
or otherwise retain or transfer any of such information.
4. No Other Severance. Except as provided in this Agreement, the Employee
shall not be entitled to receive any other payment, benefit or other form of
compensation as a result of his employment or his resignation and retirement
therefrom. Specifically, the Employee shall not be eligible for severance
benefits under any plan, program or arrangement sponsored or funded by the
Company, and he hereby waives any right to any such benefits.
5. Return of Company Property. Subject to Section 3 above, no later than
the Employee's Retirement Date, the Employee agrees to return any Company
property in the Employee's possession or control, including all equipment, the
original and all copies of books, notebooks, documents, reports, files,
memoranda, records, computer software and programs, correspondence, mailing
lists, client or contact lists, calendars, card files, rolodexes, cardkey
passes, door, file and computer keys, computer access codes or disks, company
charge cards, instructional employee manuals, and other Company property which
the Employee received or had control over during his employment with the
Company, except to the extent the Company and the Employee mutually agree such
item or items may be required by the Employee in connection with the performance
of services under the Consulting Agreement.
6. Consulting Agreement.
6.1 Agreement for Services. For a period of three (3) years following
the Employee's Retirement Date (each such year referred to hereinafter as a
"Consulting Year"), the Employee agrees to make himself available at the
Company's reasonable request to provide legal and other related services
the Company may reasonably request to the Company, its subsidiaries,
partnerships, joint ventures, and affiliates (including, without limitation
Armkel, LLC) in accordance with the terms set forth below (the "Consulting
Agreement"). Such services shall be performed at such locations as the
Company may reasonably request, and the Employee agrees to use his best
skill, efforts and judgment in performing such services. So long as
Employee renders services, as provided for in this Agreement and the
Consulting Agreement, in good faith and in accordance with the Company's
"Guidelines for Personal Business Conduct," and in accordance with the best
of his abilities, Employee shall be indemnified from any liability by the
Company arising from the course and scope of his employment or consulting
services to the Company, in the same manner and to the same extent as such
indemnification is provided to the executive officers of the Company
pursuant to the Company's Restated Articles of Incorporation and/or Bylaws.
The Company agrees to pay the Employee an Annual Consulting Fee for
services provided up to the Maximum Hour Allotment for each Consulting Year
as set forth below. The Annual Consulting Fee shall be payable in twelve
(12) equal monthly installments, in arrears, whether or not the Company
requires the Employee to provide services up to the Maximum Hour Allotment
for the Consulting Year. If the Company requests the Employee to provide
services that exceed the Maximum Hour Allotment for any Consulting Year,
and the Employee agrees to do so, upon submitting reasonable documentation
of the same, the Company agrees to pay the Employee $275 for each hour of
service provided in excess of the Maximum Hour Allotment for the Consulting
Year. The Company agrees to reimburse the Employee for all reasonable
travel and other reasonable and necessary out-of-pocket business related
expenses incurred by the Employee at the request of the Company in
connection with the performance of services under the Consulting Agreement;
provided that the Employee shall be required to submit reasonable
documentation of such expenses to the Company prior to receiving
reimbursement. If the Employee's Retirement Date is on or before December
31, 2002, the Maximum Hour Allotment and Annual Consulting Fee for each of
the three (3) Consulting Years following the Employee's Retirement Date
shall be as follows:
--------------------------------------------------------------------------------
Consulting Year Maximum Hour Allotment Annual Consulting Fee
-------------------- -------------------------------- ------------------------
-------------------- -------------------------------- ------------------------
1 750 $225,000
-------------------- -------------------------------- ------------------------
2 375 $112,500
-------------------- -------------------------------- ------------------------
3 188 $56,250
--------------------------------------------------------------------------------
Notwithstanding the foregoing chart, if the Company extends the
Retirement Date beyond December 31, 2002, pursuant to Section 1.1(b) above,
the Maximum Hour Allotment and Annual Consulting Fee for each of the three
(3) Consulting Years following the Employee's Retirement Date shall be as
follows:
--------------------------------------------------------------------------------
Consulting Year Maximum Hour Allotment Annual Consulting Fee
-------------------- -------------------------------- ------------------------
-------------------- -------------------------------- ------------------------
1 750 $235,000
-------------------- -------------------------------- ------------------------
2 375 $117,500
-------------------- -------------------------------- ------------------------
3 188 $58,750
--------------------------------------------------------------------------------
6.2 Termination for Cause. The Company may terminate the Employee's
employment and/or the Consulting Agreement at any time for Cause. Any
termination shall be effective on the date of delivery of notice of such
termination to the Employee if notice is provided in person, by hand
delivery or facsimile, or one (1) day after the Company sends notice to the
Employee if such notice is sent via Federal Express or other overnight
delivery service, or, in all other cases, the termination shall be
effective three (3) days after the Company sends notice to the Employee. In
the event of termination for Cause under subsections (a) (b) (c) or (d) of
this Section, the Company shall have no further obligations to make any
payments or provide any benefits under the Consulting Agreement after the
date of the event given rise to termination for Cause under subsections (a)
(b) (c) or (d). For purposes of this Section "Cause" shall mean the
following: (a) the Employee's conviction of or plea of guilty or nolo
contendere to a felony or crime involving moral turpitude; (b) the
Employee's personal dishonesty, willful violation of any laws, rule or
regulation (other than minor traffic violations or similar offenses), or
Employer's obtaining evidence of employee's breach of any covenant
contained in Sections 9 or 10 hereof; (c) the Employee's mismanagement or
nonperformance in the conduct of the services requested by the Company; or
(d) alcohol or substance abuse or addiction on the part of the Employee.
Notwithstanding the foregoing, no act or omission described in (c) above
shall constitute "Cause" unless the Company notifies the Employee in
writing of the acts or omissions that the Company believes constitute
Cause, the Company first meets with Employee to discuss the same (which the
Company shall use its best efforts to schedule within two weeks of any such
notice), and the Employee fails to cure such acts or omissions to the
Company's reasonable satisfaction within 72 hours of such meeting. However,
if said meeting is not held within two weeks due to the refusal of the
Employee to be present at such meeting, then the Employee's employment will
be deemed terminated for Cause 72 hours after the expiration of such two
week period, unless the Employee will have cured such acts or omissions
constituting Cause to the Company's reasonable satisfaction within such
time period.
6.3 Termination upon Death or Disability. This Agreement and the
Consulting Agreement shall automatically terminate in the event the
Employee dies or suffers a disability that renders the Employee unable to
perform the services requested by the Company to its reasonable
satisfaction. If the Consulting Agreement terminates during the first two
(2) Consulting Years following the Retirement Date due to the Employee's
death or disability, the Company will pay to the Employee, his estate, or
designated beneficiary, in a single lump sum payment, for the year of such
death or disability, the sum of (a) the remaining unpaid portion of the
consulting fee due for such year, plus (b) $150/hour in the case of death,
or $75/hour in the case of disability, for each hour Employee actually
worked in such year (i.e., either Year 1 or Year 2, as the case may be),
but only with respect to the hours worked in the particular year in which
the death or disability actually occurred. Thus, for example, if Employee
dies or becomes disabled in Year 2, he (or his estate or beneficiary) will
only be paid the remaining unpaid Consulting Fee for Year 2 plus the
special death or disability payments for hours worked in Year 2, and not
for any hours worked in Year 1. Thereafter the Company shall have no
further obligation to make any further payments or provide any benefits
under the Consulting Agreement to the Employee, his estate, beneficiaries,
heirs, or assigns. If the Consulting Agreement terminates on or after the
second anniversary following the Retirement Date due to the Employee's
death or disability, the Company shall have no further obligation to make
any payments or provide any benefits under the Consulting Agreement
(including, without limitation, any unpaid portion of an Annual Consulting
Fee) to the Employee, his estate, beneficiaries, heirs or assigns, except
for any previously earned but unpaid fees.
6.4 Independent Contractor. The Employee shall perform the services
requested by the Company under the Consulting Agreement as an independent
contractor and shall not be deemed an employee of the Company. Accordingly,
the Company will not withhold federal or state income, social security, or
other taxes from the consulting fee paid under the terms of the Consulting
Agreement, unless otherwise required by law. Further, during the term of
the Consulting Agreement, the Employee is free to render legal and other
related services to third parties as the Employee sees fit. Notwithstanding
the foregoing, the Employee shall not be permitted to engage in any
activity in competition with (including rendering legal services to a
competitor) any of the businesses conducted by the Company, its
subsidiaries, partnerships, joint ventures, or affiliates, without the
prior written approval of the Company. Employee may apply for a waiver of
these restrictions, which the Company may grant in its reasonable
discretion.
7. Ongoing Assistance. Following the termination of the Consulting
Agreement, the Employee shall execute any and all documents and take any and all
actions which the Company may reasonably request to effect the transition of the
projects being worked on by the Employee at the time of termination and, subject
to mutual agreement regarding time and compensation, the Employee agrees to make
himself available with respect to, and to cooperate in conjunction with, any
litigation or investigation arising from events that occurred during the
Employee's employment or provision of services under the Consulting Agreement
(whether such litigation or investigation is pending or subsequently initiated)
involving the Company or any of its affiliates or other Released Parties (as
defined below), including providing testimony and preparing to provide testimony
if so requested by the Company or any of its affiliates.
8. Releases. The Employee hereby releases the Company and its agents,
employees, representatives, officers, directors, shareholders, trustees,
attorneys, affiliates, subsidiaries, joint ventures, partnerships and any
employee benefit plan fiduciary, and the successors and assigns of each
(collectively referred to as the "Released Parties") from any debts, duty,
claim, counterclaim, cost, expense, cause of action, liability or other
obligation, whether known or unknown, against the Released Parties, which the
Employee may have relating to the employment of the Employee or the Employee's
resignation and retirement therefrom, including, without limitation, any dispute
arising prior to the date of execution of the Agreement under the Age
Discrimination in Employment Act of 1967; the Civil Rights Acts of 1964 and
1991; the Americans with Disabilities Act of 1990; and any other federal or
state statute or regulation under which the Employee may have a potential claim;
and any claim based on theories of contract, tort, or other equitable or legal
grounds; Provided, however, that (i) this Release shall only relate to claims
relating to Employee's employment or the termination thereof, and (ii) this
Section 8 shall not apply to any claim the Employee may have for accrued vested
benefits under any federal or state workers' compensation act, under the
Employee Retirement Income Security Act of 1974, or with respect to any
obligation of the Company specifically provided for in or pursuant to this
Agreement. The Employee affirms that he will not cause or permit to be filed on
his behalf any charge, complaint or action before any court or administrative
agency alleging discrimination or any unfair employment practices, whether know
or unknown, against the Released Parties relating to the employment of the
Employee or the Employee's resignation and retirement.
9. Nondisclosure. During the Employee's employment with the Company and
during the term of the Consulting Agreement, the Employee has and will have
access to and become acquainted with the Company's confidential and proprietary
information, including, but not limited to, information or plans regarding
customer relationships; personnel, sales, marketing, and financial operations
and methods; trade secrets; formulas; devices; inventions; processes; and other
compilations of information, records, and specifications (collectively
"Proprietary Information"). The Employee shall not disclose, transfer, or permit
access to any of the Company's Proprietary Information directly or indirectly,
or use it in any way, either during the term of this Agreement or at any time
thereafter, except as required in the course of his employment or provision of
services under the Consulting Agreement for the Company or as authorized in
writing by the Company. All files, records, documents, computer-recorded
information, drawings, specifications, equipment and similar items relating to
the business of the Company, whether prepared by the Employee or otherwise
coming into his possession or control, shall remain the exclusive property of
the Company and shall not be removed from the premises of the Company except
when (and only for the period) necessary to carry out the Employee's duties
hereunder, and if removed shall be immediately returned to the Company upon any
termination of this Agreement. Notwithstanding the foregoing, Proprietary
Information shall not include (i) information which is or becomes general public
knowledge except through disclosure by the Employee in violation of this
Agreement; (ii) information that may be required to be disclosed by applicable
law; (iii) information disclosed to the Employee without obligation of
confidence by a third party; and (iv) information that is, or has been developed
without having violated this Agreement. The Employee further agrees to keep the
terms and provisions of this Agreement confidential.
10. Nondisparagement. The Employee represents and warrants that, during the
course of his employment with the Company, he has conducted himself in a manner
consistent with the "Guidelines for Personal Business Conduct," as disseminated
to employees from time to time and has done nothing which may adversely affect
the goodwill enjoyed by the Company; and the Employee agrees to continue to do
so during the term of this Agreement and the Consulting Agreement and to
reexecute said Guidelines in his capacity as an independent
contractor/consultant.
11. Remedies. The Employee acknowledges that a material breach or
threatened material breach on the Employee's part of any nondisclosure or
nondisparagement covenants contained herein will cause such damage to the
Company as will be irreparable and for that reason the Employee further agrees
that the Company shall be entitled as a matter of right to an injunction from
any court of competent jurisdiction (without the need to post bond or prove
irreparable injury or inadequate remedy at law), restraining any further
violation of such covenants by the Employee. The rights to injunction shall be
cumulative and in addition to any and all other remedies the Company may have,
including, specifically, recovery of money damages and any other legal or
equitable relief available.
12. Taxes. The Employee agrees that the Employee will be fully and solely
responsible for any income or other tax liability imposed on Employee in his
capacity as an "independent contractor."
13. Acknowledgement. The Employee acknowledges that he has carefully read
and fully understands all of the terms of this Agreement, including without
limitation the releases contained herein. The Employee further acknowledges that
the consideration provided for herein represents amounts and benefits greater
than he otherwise would be entitled to receive absent this Agreement, and that
the Employee has entered into this Agreement willingly, freely, without threat,
duress, coercion, undue influence, or intimidation of any kind. The Employee
further acknowledges that he has been advised to consult with an attorney of his
choosing prior to executing this Agreement. The Employee has had, or has had the
opportunity to have, this Agreement in his possession for at least twenty-one
(21) days and has had that same period to consider whether to sign it. Once
accepted, the Employee's acceptance to this Agreement can be revoked only within
the seven (7) day period following the date of its execution by the Employee.
After the expiration of seven (7) days, this Agreement will become effective and
legally binding in all aspects.
14. Entire Agreement. In executing this Agreement, the Employee is not
relying on any oral representation or statement by any employee, agent, or
representative of the Company regarding the subject matter, basis, or effect of
this Agreement. Rather this Agreement constitutes the entire agreement between
the parties with respect to the subject matter hereof and supercedes all prior
agreements between the parties with respect to such matters unless specifically
provided otherwise herein. This Agreement may be modified or amended only by an
instrument in writing signed by both parties hereto.
15. Reformation. If any provision of this Agreement is determined to be
invalid, illegal, or unenforceable, in whole or in part, neither the validity of
the remaining parts of such provision nor the validity of any other provision of
this Agreement shall in any way be affected thereby. In lieu of such invalid,
illegal, or unenforceable provision, there shall be added automatically as part
of this Agreement a provision as similar in terms to such invalid, illegal, or
unenforceable provision as may be possible to be valid, legal, and enforceable.
16. Governing Law. This agreement shall be governed by and construed and
enforced in accordance with the laws of the State of Delaware without reference
to its conflicts of law provisions, and shall be binding upon the parties and
their respective heirs, executors, successors and assigns.
17. Breach. The Employee agrees to indemnify, defend and hold each and all
of the Released Parties harmless from and against any loss, cost, damage or
expense (including, without limitation, attorney's fees) incurred by the
Released Parties as a result of any breach of Sections 8, 9, or 10 of this
Agreement by the Employee.
18. Notice. Any notice required or permitted to be given hereunder shall be
deemed sufficient if delivered in person or sent by hand delivery, facsimile,
overnight mail, or registered or certified mail, postage prepaid, addressed to
the addressee at his or its last known address and shall be effective as of the
time provided in Section 6.2.
19. Assignment. None of the rights of the Employee to receive any form of
compensation payable pursuant to this Agreement shall be assignable or
transferable except through testamentary disposition or by the laws of descent
and distribution upon the death of the Employee. Any attempted assignment,
transfer, conveyance, or other disposition of any interest in the rights of the
Employee herein shall be void. This Agreement and the Consulting Agreement are
for the Employee' personal services and the Employee may not assign, transfer,
or delegate any duty or obligation to perform such services. Any attempted
assignment, transfer or delegation in violation of this Section 19 shall be null
and void and shall constitute a breach of this Agreement and/or the Consulting
Agreement.
20. Counterparts. This Agreement may be executed in counterparts, each of
which shall be deemed to be an original, but which together shall constitute one
and the same instrument.
21. Death or Disability Prior to Retirement. In the event of the Employee's
death or disability prior to the Retirement Date, this Agreement shall
automatically terminate and the Company shall have no further obligations to
make any payments or take any actions under this Agreement or the Consulting
Agreement. In such event, the Employee shall be entitled to benefits under the
Company's Employee Benefit Plans in effect as of the date of the Employee's
death or disability, for which the Employee is eligible pursuant to the terms of
such plans. For purpose of this Section, the Employee shall be deemed to be
disabled if he is unable to perform the essential function of his employment as
the Company's Vice President, General Counsel and Secretary as may be determined
by the Company in a manner consistent with past practice.
22. Headings, Numbering & Captions. The headings, numbering and captions
herein are included solely for convenience, and if there is any conflict between
such headings, numbering or captions and the text of this Agreement, the text
shall control.
[SIGNATURES ON NEXT PAGE]
IN WITNESS WHEREOF, the parties have executed this Agreement this 4th day
of October, 2002.
CHURCH & XXXXXX CO., INC.
By: /s/ Xxxxxx X. Xxxxxx
-----------------------------------
Title: Vice President
Human Resources
--------------------------------
EMPLOYEE
/s/ Xxxx Xxxxxxxx
---------------------------------------
Xxxx Xxxxxxxx
