1
EXHIBIT 10.17
XXX X. XXXXXX, INC.
SEVERANCE AGREEMENT
Severance Agreement ("Agreement") made May 12, 1997
between Xxx X. Xxxxxx, Inc., a Pennsylvania corporation, ("Weston") and
M. Xxxxxxxxx Xxxxxx ("Xxxxxx").
BACKGROUND
Xxxxxx is currently Weston's Executive Vice President and Chief Financial
Officer.
Weston and Xxxxxx have a written agreement with respect to Xxxxxx'x
employment ("Full Time Employment Agreement") dated as of September 4, 1990,
which is attached hereto as Exhibit X.
Xxxxxx and Xxxxxx have entered into (i) seven separate Non-Qualified Stock
Option Agreements covering grants made on each of June 10, 1991, March 31,
1992, February 8, 1993, February 14, 1994, February 13, 1995, February 26, 1996
and February 18, 1997, respectively, attached hereto as Exhibits B-1 through
B-7, and (ii) a Supplemental Retirement Agreement dated as of December 31,
1990, attached hereto as Exhibit C. The agreements referred to in the
preceding sentence are collectively referred to as the "Benefit Agreements".
As a result of the change in the composition of Weston's Board of
Directors, Weston and Xxxxxx agree that it would serve the best interests of
each to provide Xxxxxx with certain
2
additional benefits in consideration of Xxxxxx'x agreement to terminate her
employment with Weston.
2
3
AGREEMENT
NOW, THEREFORE, in consideration of the premises and the mutual covenants
and agreements contained herein and intending to be legally bound hereby, the
parties hereto agree as follows:
1. Resignation Date. Effective May 9, 1997, Xxxxxx shall resign from her
employment with Weston and from her position as Weston's Executive Vice
President and Chief Financial Officer.
2. Severance Benefits and Payment Conditions. In consideration of
Xxxxxx'x resignation, Xxxxxx shall receive the severance benefits set forth
herein provided Xxxxxx satisfies each of her agreements and undertakings under
Sections 3 and 4 hereof. Xxxxxx'x entitlements under the Benefit Agreements
and any employee benefit plan, including Weston's vacation plan, applicable to
a class of Weston employees which includes Xxxxxx shall be as provided for
therein without regard to this Agreement, except as expressly provided under
Section 2 or 3 hereof. The severance benefits under this Agreement are as set
forth below:
(a) Salary Continuation. Weston shall pay Xxxxxx at the rate of $15,340
per month for nine months, effective as of May 10, 1997 and ending
February 9, 1998. Weston shall make installment payments to Xxxxxx on
its regular payroll dates during such nine-month period. If Xxxxxx
dies before the last
3
4
payment, the remaining payments shall be paid to her estate. The
salary continuation payments hereunder shall be in lieu of any benefit
or amount otherwise payable on account of employment termination under
any Xxxxxx xxxxxxxxx plan or program or the Full Time Employment
Agreement.
(b) Automobile. Weston shall permit Xxxxxx to use the automobile which it
currently has under lease for her use, and shall pay expenses
associated therewith that it currently pays, until November 9, 1997.
(c) Salary-At-Risk. Weston shall pay Xxxxxx the amount she earned under
its Salary-At-Risk Program for the calendar quarters ended March 31,
1997 and June 30, 1997, if any. Weston shall make the payment on or
about the date Weston makes Salary-At-Risk payments to participating
employees.
(d) Supplemental Retirement Agreement. The annual amount payable under the
Supplemental Retirement Agreement commencing at age 65 shall be
$12,000. For purposes of the Supplemental Retirement Agreement,
Xxxxxx'x termination shall be treated as an involuntary termination
which is not for cause.
(e) Medical Benefits. Weston shall provide medical, dental and
prescription plan benefits for Xxxxxx on the same basis as in effect
for active employees until February 9, 1998 or until she sooner elects
that such coverages cease. After such period, Xxxxxx may elect
continuation coverage completely at her own expense as provided by law.
4
5
(g) Outplacement. Weston shall provide Xxxxxx $20,000 for outplacement
services, as designated in writing by Xxxxxx, and if no such
designation has been furnished by Xxxxxx by June 8, 1997, Weston shall
pay the sum of $20,000 to Xxxxxx.
3. Xxxxxx'x Agreements and Undertakings.
(a) Cooperation Requirement. During the severance period (May 10, 1997
through February 9, 1998), at Weston's reasonable request, Xxxxxx shall
provide Weston such information pertaining to her employment with
Weston as she may have and assist Weston to transfer her duties to such
successor or successors as Weston may designate. Weston shall
reimburse Xxxxxx for all reasonable expenses she incurs in fulfilling
her obligations under the preceding sentence.
(b) Non-Competition Requirement. Weston's obligation to make payments or
provide benefits under Section 2, including all payments under the
Supplemental Retirement Agreement, shall terminate and Weston shall
have all of the rights and remedies provided for in Section 10 of the
Full-Time Employment Agreement as well as restitution of payments made
or the cost of benefits provided hereunder if Xxxxxx, without Weston's
prior written approval, either directly or indirectly, for her own
account or for the account of another person or entity, for a period of
two years from and after May 9, 1997,
(i) acquires or holds a 5% equity or profit interest in any competitor
of Weston or any "Weston affiliate"
5
6
(the terms "competitor" and "Weston affiliate" are defined below in
3(b)(iii)).
(ii) solicits any environmental consulting, remediation or related
business from any person or entity that was at any time during
the two years immediately preceding May 9, 1997 a client of
Weston or any "Weston affiliate" or potential client as to whom
Weston or any "Weston affiliate" had rendered a significant
volume of service or had a significant amount of direct business
contact for the purpose of soliciting future business; or
(iii) renders services to any competitor of Weston or any "Weston
affiliate", if such services are similar in nature (in whole or
in part) to services Xxxxxx rendered to Weston or any "Weston
affiliate" at any time during the two years immediately preceding
May 9, 1997. For this purpose a competitor is any person or
entity that performs environmental consulting, remediation or
related services.
For purposes of this Section, the term "Weston affiliate" shall mean any
business in which Weston owns directly or indirectly at least 50% of the equity
interests or 50% of the profit interests. This Section supersedes the
non-competition covenant of Section 8 of the Full-Time Employment Agreement,
except as provided under Section 10 thereof. This Section replaces the
non-competition provision of Section 13 of Supplemental Retirement Agreement.
6
7
(c) Release. Xxxxxx and Xxxxxx shall deliver a release to each other in
the form attached hereto as Exhibit D.
4. Mutual Agreement and Undertaking. Weston and Xxxxxx agree that each
shall refrain from any communication of any kind or in any form which could
reasonably be construed as detrimental to the other and, with respect to
Xxxxxx'x communications, detrimental to Weston's directors, officers or
employees. In the course of any legal or administrative proceedings both
parties shall at all times tell the truth. In addition, Weston agrees to
provide Xxxxxx with a letter of reference in the form attached hereto as
Exhibit E.
5. Acceleration Election. Weston may, at its option, at any time or from
time to time, in its absolute and sole discretion, accelerate the time and the
manner of making any one or more payments required by this Agreement.
6. Non-Alienation. None of the rights or payments contemplated under this
Agreement may be sold, given away, assigned, transferred, pledged, mortgaged,
alienated, hypothecated or in any way encumbered or disposed of by Xxxxxx, or
any executor, administrator, heir, legatee, distributee, relative or any other
person or entity, whether or not in being, claiming under Xxxxxx by virtue of
this Agreement, and none of the rights or benefits contemplated by this
Agreement shall be
7
8
subject to execution, attachment or similar process. Any sale, gift,
assignment, transfer, pledge, mortgage, alienation, hypothecation or
encumbrance, or other disposition of this Agreement or of such rights or
benefits contrary to the foregoing provisions, or the levy or any attachment or
similar process thereon, shall be null and void and without effect.
7. Taxes. Weston shall withhold from payments to Xxxxxx and remit to the
appropriate government agencies such payroll taxes and income withholding as
Weston determines is or may be necessary under applicable law with respect to
amounts paid under this Agreement.
8. General Obligation. The rights and benefits of Xxxxxx hereunder shall
be solely those of an unsecured creditor of Weston.
9. Waiver of Breach. Weston's failure to insist upon strict compliance
with any of the terms, covenants or conditions hereof shall not be deemed a
waiver of such term, covenant or condition, nor shall Weston's waiver or
relinquishment of any right or power hereunder at any one or more times be
deemed a waiver or relinquishment of such right or power at any other time or
times.
10. Modification. This Agreement shall not be modified or amended except
by written instrument duly executed by Weston and Xxxxxx.
8
9
11. Severability. If any clause, sentence, paragraph, section, or part of
this Agreement shall be held by any court of competent jurisdiction to be
invalid, such judgment shall not affect, impair or invalidate any of the other
parts hereof.
12. Notices. Any notice required or permitted to be given under this
Agreement shall be sufficient if in writing and either hand-delivered to the
addressee or sent by registered or certified mail, if to Xxxxxx, to Xxxxxx'x
address as shown on Weston's books, and if to Weston, addressed to Weston's
Chief Executive Officer at Weston's principal business office located at Xxx
Xxxxxx Xxx, Xxxx Xxxxxxx, Xxxxxxxxxxxx 00000-0000 or such other address as
Weston or Xxxxxx may designate in writing.
13. Arbitration. Any controversy or claim arising out of or relating to
this Agreement or the breach thereof shall be settled by arbitration in the
City of Philadelphia in accordance with the rules of the American Arbitration
Association then in effect. The decision of the arbitrator shall be final and
binding upon the parties, and judgment upon the decision rendered in such
arbitration may be entered in any court having jurisdiction.
14. Binding Agreement. This Agreement shall inure to the benefit of and
be binding upon Weston and its successors and upon Xxxxxx, her heirs and legal
representatives. This Agreement shall not be assignable by Xxxxxx and shall be
assignable by Weston only to a person or entity which may become a successor in
9
10
interest to Weston and which is bound hereby.
15. Captions. The captions of the various provisions shall not be deemed a
part of this Agreement and shall not be construed in any way to limit the
contents hereof but are inserted herein only for reference and for convenience
of the parties.
16. Governing State Law. This Agreement may be executed at different times
in different places, but all questions concerning the construction or validity
hereof, or relating to performance hereunder, shall be determined in accordance
with the laws of the Commonwealth of Pennsylvania.
17. No Changes. This Agreement represents the entire agreement between the
parties with respect to the subject matter hereof and supersedes any and all
prior agreements and undertakings, written or oral.
IN WITNESS WHEREOF, Weston has caused this Agreement to be executed by its
duly authorized officers, and Xxxxxx has hereunto set her hand and seal as of
the day and year first above written.
ATTEST: XXX X. XXXXXX, INC.
_____________________________ By:_____________________________
Secretary
(SEAL)
________________________________
10
11
M. Xxxxxxxxx Xxxxxx
11
