Exhibit 10(nn)
RELEASE AND CONFIDENTIALITY AGREEMENT
Lockheed Xxxxxx Corporation (the "Corporation") and I, Xxxxx X. Xxxxxxxxx,
voluntarily enter into this Release, Noncompete and Confidentiality Agreement
("Release") and agree as follows:
Benefit Payable. In exchange for the Enhanced Termination Benefits as
described in the Letter, originally dated ___, from ____, Vice President,
Human Resources, and the terms of which are incorporated herein by reference,
on my own behalf and on behalf of my successors, assigns and representatives,
I hereby irrevocably and unconditionally release any and all Claims, as
described below, that I may now have against the Released Parties listed
below. I agree that the Enhanced Termination Benefits, including but not
limited to the extension of my termination date from November 30, 1999 to
January 31, 2000, the $200,000 relocation allowance and the consulting
arrangement, are greater in value than any benefit to which I am otherwise
entitled.
Covenant Not to Compete. I acknowledge that upon receipt of full payment
of all amounts due ($1,918,800.00) under the Retention Agreement between me
and the Corporation dated November 1, 1997 ("Retention Agreement") payable on
or about February 1, 2000, I am fully bound by the terms of the Covenant Not
to Compete Provision set forth in Section 5 of the Retention Agreement, which
reasonably restricts my employment and business opportunities through January
31, 2001. In consideration for the lump sum payment in the amount of
$288,000, payable on or about February 1, 2000 (which amount represents the
collective consideration for this Covenant Not to Compete as well as payment
for services rendered, if any, by me pursuant to a two-year consulting
arrangement, set forth in a separate agreement between me and the
Corporation), I agree to extend the Covenant Not to Compete obligation, set
forth in Section 5 of the Retention Agreement, for another 12 month period
beyond its current expiration date of January 31, 2001. Therefore, for a
period extending from February 1, 2001 through January 31, 2002, I shall not
engage in any business (whether as an officer, director, owner, employee,
partner or other direct or indirect participant) competing with that of the
Corporation in any area in which the Corporation is conducting any business on
the date of my termination. For such period, I shall also not interfere with,
disrupt, or attempt to disrupt the relationship, contractual or otherwise,
between the Corporation and any customer, supplier or employee of the
Corporation.
It is the desire and intent of the parties that the provisions of this
Covenant Not to Compete shall be enforced to the fullest extent permissible
under the laws and public policies applied in each jurisdiction in which
enforcement is sought. Accordingly, if any particular portion of this
Covenant Not to Compete is adjudicated to be invalid or unenforceable, this
Covenant Not to Compete shall be deemed amended to delete therefrom the
portion thus adjudicated to be invalid or unenforceable, such deletion to
apply only with respect to the operation of this provision in the particular
jurisdiction in which such adjudication is made.
Claims Not Released. I agree that I will not receive any severance benefits
in connection with my termination under any corporate severance plan or
policy. By this agreement, I am not releasing any rights to benefits I may
have under the Retention Agreement or rights to benefits under any of the
Corporation's other benefit programs.
Claims Released. Subject only to the exception noted in the previous
paragraph, I agree to waive and fully release any and all claims of any nature
whatsoever (known and unknown) ("Claims") that I may now have or have had
against the Corporation, its affiliates, subsidiaries, fiduciaries and the
directors, officers, employees, shareholders and agents of any of the
foregoing ("Released Parties"). These Claims released include, but are not
limited to, claims that in any way relate to my employment with the
Corporation or the termination of that employment, and any claims for monetary
damages, wages or other personal remedy sought in any legal proceeding or
charge filed with any court, federal, state or local agency either by me or by
a person claiming to act on my behalf or in my interest.
I understand that the Claims I am releasing might have arisen under many
different local, state and federal statutes, regulations, case law and/or
common law doctrines. By this agreement, I specifically, but without
limitation, agree to release all of the Released Parties from Claims under any
corporate severance plan or policy; the WARN Act (which requires that advance
notice be given of certain workforce reductions); Title VII of the Civil
Rights Act of 1964, as amended (which prohibits discrimination based on race,
color, national origin, religion, or sex); the Civil Rights Act of 1866 (which
prohibits discrimination based on race or color); the Age Discrimination in
Employment Act and the Older Worker Benefit Protection Act (which prohibit
discrimination based upon age); the Americans with Disabilities Act and
Sections 503 and 504 of the Rehabilitation Act of 1972 (which prohibit
discrimination based upon disability); the Equal Pay Act (which prohibits
paying men and women unequal pay for equal work); or any other local, state or
federal statutes prohibiting discrimination or retaliation on these or any
other grounds or otherwise governing the employment relationship. The
Released Claims also include any Claims against the Released Parties relating
to defamation, invasion of privacy, infliction of emotional distress, or any
other Claim based upon any theory of personal injury or breach of express or
implied contract or covenant of good faith and fair dealing. I warrant that I
have not assigned or transferred any Claims described in this Release to any
third parties.
California provision. This release extends to all Claims that I may now
have, even claims unknown at this time, and is an express waiver by me of the
protection of Section 1542 of the Civil Code of California or any other
similar provision under any other state's laws. Section 1542 of the Civil
Code states:
"A general release does not extend to claims which the creditor does not
know or suspect to exist in his favor at the time of executing the release,
which if known to him must have materially affected his settlement with the
debtor." (For the purposes of this Release of Claims, the employee would be
considered the "creditor" and the Corporation would be considered the
"debtor").
Continuing obligation of nondisclosure, confidentiality and other restrictions.
Throughout the duration of my employment with the Corporation, I have had access
to and may have generated a substantial amount of information that is
proprietary and confidential to the Corporation. Additionally, I may have had
access to certain third-party proprietary information that had been provided in
confidence to the Corporation. In consideration of my employment by the
Corporation, I have undertaken an obligation, both during and following my
employment, not to use or disclose to others, any Proprietary Information,
except as authorized by the Corporation. "Proprietary Information" means any
information of the Corporation or of others which has come into the
Corporation's or my possession, custody or knowledge in the course of my
employment that has independent economic value as a result of its not being
generally known to the public and is the subject of reasonable means to preserve
the confidentiality of the information. Proprietary Information includes
(without limitation) information, whether written or otherwise, regarding the
Corporation's earnings, expenses, marketing information, cost estimates,
forecasts, bid and proposal data, financial data, trade secrets, products,
procedures, inventions, systems or designs, manufacturing or research processes,
material sources, equipment sources, customers and prospective customers,
business plans, strategies, buying practices and procedures, prospective and
executed contracts and other business arrangements or business prospects, except
to the extent such information becomes readily available to the general public
lawfully and without breach of a confidential, contractual, or fiduciary duty.
By signing this Release, I acknowledge and agree that I have a continuing
obligation to not use or disclose Proprietary Information. Further, all
materials to which I have had access, or which were furnished or otherwise made
available to me in connection with the services performed for the Corporation
shall be and remain the property of the Corporation. All such materials,
documents and information, including any Proprietary Information and all
reproductions thereof shall be returned by me promptly to the Corporation.
I further agree that, for a period of 12 months from the date of this Release, I
will not make any slanderous or libelous public statements, whether oral or
written, regarding the Corporation, its stockholders, directors, officers,
employees, agents, technology, or products. For the purposes of this Release,
the term "public statement" shall include any communication to any person with
the exception of internal communications to officials of the Corporation made
by me in the course of the performance of my duties as an employee or consultant
of the Corporation.
I understand and agree that the existence and terms of this Release shall be
maintained in strict confidence. I agree that I shall not disclose the existence
or terms of this Release to any other person except my spouse, members of my
immediate family, my legal and financial advisors in connection with tax returns
and estate planning and as otherwise required by law. Any disclosure of the
existence or terms of this Release by any of the aforesaid persons shall be
deemed to be an unauthorized disclosure by me and a violation of this Release.
I agree that if at any time I violate any provision of this Release, including
but not limited to these confidentiality provisions, the Corporation shall
immediately cease payment of any of the Enhanced Termination Benefits (including
termination of any existing consultant agreement) and pursue any other remedies
available to the Corporation, including injunctive or other equitable relief.
The Corporation cannot necessarily be reasonably or adequately compensated in
money damages in an action at law in the event I breach my obligations under
this Release, because such obligations are of a unique, special and personal
character and of peculiar value to the Corporation. The parties acknowledge and
agree that this confidentiality provision shall not affect my obligations to
cooperate with any U.S. government investigation or to respond truthfully to any
lawful governmental inquiry or to give truthful testimony in court.
Other provisions. The parties agree that this Release prohibits my ability to
pursue any Claims or charges against the Released Parties seeking monetary
relief or other remedies for myself and/or as a representative on behalf of
others. This agreement does not affect my ability to cooperate with any future
ethics, legal or other investigations, whether conducted by the Corporation or
any governmental agencies.
A determination by a court or arbitrator that any provision of this Release is
invalid, illegal or unenforceable shall not affect the validity, legality or
enforceability of any other provision of this Release.
Excepting only the Retention Agreement, this document contains all of the
agreements between me and the Corporation relating to my termination of
employment, and supersedes any prior agreements or representations between us as
to the subjects covered herein. This Release may be modified, supplemented or
superseded only in a written document signed by both parties.
This Release shall be governed by and construed in accordance with the laws of
the State of Maryland, without giving effect to the conflict of law provisions
thereof.
By signing below, in addition to releasing all Claims described herein, I
acknowledge that:
a) I have been advised to consult with an attorney prior to signing this
Release;
b) I have been given at least 21 days to consider the actual terms of this
Release. I understand that I must deliver this signed Release to the Corporation
in the care of ____, Vice President, Human Resources, whose office is located
at the following address: 0000 Xxxxxxxxx Xxxxx, Xxxxxxxx, XX 00000, or send
this Release certified mail, return receipt requested, to Lockheed Xxxxxx
Corporation, Attention: ____, Vice President, Human Resources at the same
address so that it is received by the Corporation on or before ______.
c) I understand that I may revoke this Release within seven (7) calendar days
from the date of signing, in which case this Release shall be null and void and
of no force and effect on the Corporation or me. I further understand and
acknowledge that to be effective, the revocation must be in writing and either
personally delivered to the Corporation to the Corporation in the care of ____,
Vice President, Human Resources, whose office is located at the following
address: 0000 Xxxxxxxxx Xxxxx, Xxxxxxxx, XX 00000, or sent via certified mail,
return receipt requested, to Lockheed Xxxxxx Corporation, Attention: _____,
Vice President, Human Resources at the same address so that it is received by
the Corporation in by 5:00 p.m. on or before the seventh (7th) calendar day
after I sign this Release. If I revoke this Release, I understand and agree
that my effective termination date shall be ____ or the date of my revocation,
whichever date is sooner.
d) I have read this Release, and I am fully aware of the legal effects of the
Release. I have chosen to execute the Release freely, without reliance upon any
promises or representations made by the Corporation other than those contained
in this Release and the Letter.
Dear _____:
The purpose of this letter ("Letter") is to set forth options concerning your
termination of employment from Lockheed Xxxxxx Corporation (the "Corporation").
This Letter reflects terms that you and I have negotiated since the date of my
original letter to you on November 22, 1999. Several drafts of this Letter have
been delivered to you and revised during this negotiation process. The letter
delivered to you on November 22nd set forth two proposals and included a Release
and Confidentiality Agreement for your review and consideration. This Letter
also sets forth an option requiring the Release, Noncompete and Confidentiality
Agreement, the form of which has also been the subject of our negotiations and
is substantially similar to the original form attached to the November 22nd
letter with the addition of a negotiated covenant not to compete provision.
Other than establishing a calendar year 2000 payment date in the event you elect
the Enhanced Termination Benefits, this Letter does not affect the terms of the
Retention Agreement between you and the Corporation, dated November 1, 1997
("Retention Agreement"), the terms of which survive any other agreements between
you and the Corporation.
As I notified you earlier this month, your termination date was initially
scheduled for November 30, 1999. However, as initially set forth in my November
22nd letter to you, in order to give you at least 21 calendar days from November
22, 1999 to review and consider the terms of the Release, Noncompete and
Confidentiality Agreement ("Release"), you were notified that you would be
placed on vacation leave status on December 1, 1999 until December 13, 1999 in
lieu of the November 30th termination date. If you elect the Enhanced
Termination Benefits described in Part I of this Letter, you will receive the
benefits described in Part I and Part II of this Letter, and your termination
date will be extended to January 31, 2000. If you forego the Enhanced
Termination Benefits, you will receive the benefits described in Part II of this
Letter, and your termination date will be on the date you notify me of your
decision to forego the Enhanced Termination Benefit option, or on December 13,
1999, whichever date is sooner. You must inform me of your choice on or before
December 13, 1999.
Part I
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The Corporation offers you the following termination benefits ("Enhanced
Termination Benefits") in consideration for signing the Release, a copy of which
is attached to this Letter. You have 21 calendar days to consider this offer,
which expires on December 13, 1999. To be eligible for the Enhanced Termination
Benefit you must sign and deliver the Release to my office by close of business
on December 13, 1999. You may sign and return the Release earlier at your
option. Provided you timely deliver the signed Release to my office and
further provided you do not revoke the Release within the 7-day revocation
period, the Corporation will provide the following Enhanced Termination
Benefits:
. Extension of Termination Date -- In lieu of your previously scheduled
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termination date of November 30, 1999, you will be placed on vacation pay
status from December 1, 1999 through January 31, 2000. You will receive
holiday pay rather than vacation pay for the Corporation's designated
holidays during this period.
On January 31, 2000, your employment will be terminated. This will enable
you to retire from active service on February 1, 2000, provided you submit
the necessary retirement paperwork prior to January 31, 2000.
Stock option vesting rules are governed by the Lockheed Xxxxxx Corporation
1995 Omnibus Performance Award Plan and the Award Agreement issued to you.
Under the Award Agreement, your vested options will continue to be
exercisable for the duration of their term. By remaining on the payroll
through January 31, 2000 and retiring effective February 1, 2000, this
would allow your unvested options to continue to vest on the schedule
contained in your Award Agreement, and once vested will be exercisable for
the duration of their term. With this extension of your termination date,
under the Award Agreement, the last increment of your 1998 grant should
vest on January 22, 2000. Under the Award Agreement, your retirement from
active service on February 1, 2000, will vest you in the first 50% of your
1999 grant and the remaining 50% of your 1999 grant will vest on
February 1, 2001.
The extension of your termination date will impact the timing of the
payment of the amount due ($1,918,800.00) under the Retention Agreement
between you and the Corporation, dated November 1, 1997. This payment will
be made on or about February 1, 2000. In the event that you do not elect
the Enhanced Termination Benefits, this payment shall be made no later than
December 13, 1999. You have acknowledged that the payment of $1,918,800.00
under the Retention Agreement was properly calculated pursuant to Section
3a of that agreement.
. Consulting and Noncompete Agreement. The Corporation will pay you a lump
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sum in the amount of $288,000, payable on or about February 1, 2000 as
collective consideration for 1) Covenant not to Compete obligation in the
Release which extends the noncompete obligation set forth in your Retention
Agreement by an additional 12 months (through January 31, 2002) and 2)
services to be rendered, if any, up to 48 days per year during a two-year
consulting arrangement with an effective date of February 1, 2000. Although
the specific terms of the consulting arrangement will be set forth in a
Consultant Agreement to be signed by both parties, generally it will
require that you provide up to 48 days of consulting work per year for two
years (from 2-1-00 through 1-31-02). Days worked in excess of 48 per year
will be compensated at $3,000 per day. For purposes of calculating the 48
days per year under the agreement, each year will begin on February 1st of
2000 and 2001, respectively. The Corporation will not be allowed to
terminate the consulting agreement unless you are in default under its
terms or if the agreement terminates due to unlawful conduct. The
consulting agreement will also include appropriate, but reasonable
restrictions on your ability to terminate the agreement prior to its
expiration on January 31, 2002. The noncompete obligation in the Release
will survive its entire term, through January 31, 2002, regardless of any
termination of the consulting agreement.
. Moving Allowance. The Corporation will pay you a lump sum of $200,000,
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which represents the agreed upon estimate of the cost of relocating outside
of Maryland, increased to include estimated taxes. This payment will be
made on or about February 1, 2000.
. MICP Award. In connection with your Management Incentive Compensation
------------
Plan (MICP) participation for plan year 1999, we will recommend to the
Management Development & Compensation Committee of the Board of Directors
(hereafter "MD&C Committee") an individual target rating of no less than
1.0 for the 1999 plan year. However, as you know, the determination
regarding payment and amount of MICP awards is within the discretion of the
MD&C Committee and is governed by the terms of the MICP plan document. The
individual target rating is only one of the factors considered by the MD&C
Committee in determining the amount of any MICP award. You will not be
eligible for MICP participation in plan year 2000.
. Financial Counseling/Tax Preparation. If you retire on February 1, 2000,
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you will be eligible for reimbursement of up to $10,000 for covered
financial counseling and tax preparation expenses incurred in calendar year
2001. In lieu of reimbursement for actual expenses, the Corporation will
pay you $10,000 in a lump sum, less applicable tax withholdings. This
payment will be made on or about February 1, 2000. (If you do not elect the
Enhanced Termination Benefits, then you will only be eligible for this
benefit for expenses incurred in 1999 and 2000. The Financial Counseling /
Tax Preparation benefit for 1999 and 2000 is described in Part II of this
Letter.)
. Personal Umbrella Liability Policy ($5 million). The current policy will
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be paid through November 30, 2000. As a retired Officer, you will be
eligible to continue this policy on an individual basis by paying the
annual premium. Seabury X. Xxxxx, the Corporation's insurance broker for
this coverage, will contact you prior to the December 1, 2000, renewal to
offer continuation of coverage.
. Country Club Membership. You may maintain your membership at the ________
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Country Club, which was initially purchased by the Corporation. The
Corporation will not be responsible for paying any past or future dues or
fees associated with your club membership.
. Cellular Telephones. The Corporation will give you the cellular telephones
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currently in your possession, which were initially purchased by the
Corporation and provided for your business use. The Corporation will not be
responsible for paying for your cellular telephone service or air time
associated with cellular calls unless the air time expense is submitted and
approved as a reimbursable business expense incurred on behalf of the
Corporation during the remainder of your employment or during the term of
your consulting agreement.
. Laptop Computer. The Corporation will give you the IBM Thinkpad Laptop
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computer currently in your possession, which was initially purchased by the
Corporation and provided for your business use.
. Fax Machine. The Corporation will give you the Canon FAX-B360IF fax
------------
machine currently in your possession, which was initially purchased by the
Corporation and provided for your business use.
. Executive Physical Exam. You will be eligible to receive the Corporation's
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standard executive physical exam during the calendar year 2000, at the
Corporation's expense.
Part II
The following benefits are also available to you upon termination. These
benefits are not conditioned upon signing and returning the Release:
. LTIP Awards. You will be eligible for prorated amounts for the 1999
--------------
through 2000 and 1999 through 2001 LTIP performance periods based upon your
termination date of December 13, 1999. The prorated payment will be based
on 12 months of participation in each of the performance periods (13 months
of participation in each of the performance periods, if you elect the
Enhanced Termination Benefits) and the payout level authorized for each
performance period. Your LTIP Awards, if any, will be payable at the same
time LTIP Awards are paid to other eligible employees.
. Financial Counseling/Tax Preparation. You will be eligible for
------------------------------------
reimbursement of up to $10,000 per year for covered financial counseling
and tax preparation expenses incurred in calendar years 1999 (to the extent
not already reimbursed to date) and 2000. In lieu of reimbursement for
actual expenses, the Corporation will pay you 1) $10,000, less any amounts
already reimbursed for calendar year 1999 in a lump sum, less applicable
withholding taxes, and 2) $10,000 in a lump sum, less applicable tax
withholdings, for calendar year 2000. If you elect the Enhanced Termination
Benefits, this payment will be made on or about February 1, 2000. If you do
not elect the Enhanced Termination Benefits, this lump sum payment will be
made no later than five (5) days after either December 13, 1999 or the date
upon which you notify me of your election, whichever day is sooner.
. Life Insurance. Any life insurance elected by you under FlexOptions may be
converted to an individual policy in accordance with the terms of the
governing insurance policy.
. Elected Officer Post-Retirement Death Benefit. As a retired Officer of the
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Corporation, you will have a death benefit equal to 1 1/2 times your annual
base salary.
. Deferred MICP. Amounts deferred under the Lockheed Xxxxxx Corporation
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Deferred Management Incentive Compensation Plan will be paid out in
accordance with the terms of your existing distribution elections. If your
distribution elections either defer payment for more than six months past
your termination date or provide for a payout over a period of more than
six months, you may elect prior to the commencement of payments (but after
termination of employment) to transfer the portion allocated to the Company
Stock Investment Option to the Interest Option. The transfer will be
effective on the first day of the seventh month after your election.
. Supplemental Savings Plan. Amounts deferred under the Lockheed Xxxxxx
-------------------------
Corporation Supplemental Savings Plan will be paid out in accordance with
your existing payout elections.
. Severance Payments. You will not be eligible for severance benefits under
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any program or plan offered by the Corporation to its employees who are
laid off as a result of a reduction in force, including the Severance
Benefit Plan for Eligible Salaried Employees, the benefits described in CPS
528 or any other severance benefit program.
. Vacation. All accrued but unused vacation will be paid in a lump sum
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following termination of employment. Vacation pay will be calculated
according to your base salary rate as of November 30, 1999.
For the purposes of this Letter, the term "Corporation" includes the
Corporation and its affiliates as well as the predecessors of the Corporation
and its affiliates. The terms of this Letter shall be governed by and construed
in accordance with the laws of the State of Maryland and the conflict of law
provisions of Maryland law which might apply the laws of another jurisdiction
will not be applicable.
You will be responsible for any income tax liabilities associated with the
termination benefits described in this Letter. With the exception of the
relocation costs described in Part I of the Letter, none of the benefits include
a tax gross up feature. The Corporation will comply with all tax law
requirements, including requirements governing tax withholdings and income
reporting.
This Letter is not intended as a summary plan description or plan document for
any of the benefit plans referenced herein. If there is any conflict between
this Letter and the official plan documents, the official plan documents
(including your award agreements) will govern.
