EXHIBIT 10.5
March 31, 1997
Xxxxxx X. Xxxx
Xxxxxx Products Ltd.
000 XxXxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Dear Xxxxxx:
This letter sets forth our discussions regarding your separation of
employment from Xxxxxx Products Ltd. and its subsidiaries (collectively, the
"Company") and represents the entire agreement between you and the Company with
respect to any and all severance benefits to which you are entitled from the
Company. This agreement incorporates the terms and provisions of the Special
Severance/Retention Plan for Executive officers, dated March 30, 1994 (the
"Plan"), including the modifications/enhancements dated April 13, 1994, which
shall be incorporated herein by reference.
1. In consideration of the benefits set forth herein, you agree to
forfeit your right to any and all payments and benefits under the terms of the
Plan. Notwithstanding the preceding sentence, except as specifically provided
herein to the contrary, you shall be entitled to the benefits set forth in
Section 3.3(c) (including the modifications/enhancements to the Plan dated April
13, 1994) and Article 5 of the Plan (except that the cap under Article 5 of the
Plan shall be 12.5% of your base salary). In addition, the terms and provisions
of Articles 4, 6, 7, 8, and 9 (with the exception of sections 9.4 and 9.8) of
the Plan shall apply for the purposes of this Agreement.
2. Monday, March 31, 1997 shall serve as your date of notice under the
Plan. The effective date of your termination will be Friday, May 30, 1997.
3. Effective March 31, 1997 you are being placed on paid leave at your
current bi-weekly rate of pay. During such leave, you will have no authority to
act for or on behalf of the Company. Notwithstanding the foregoing, you agree to
make yourself available to consult with the Company as needed. Outplacement
services are being made available to you effective immediately, and you are free
to begin to seek new employment or to pursue other self interests.
4. In addition to the Company's obligations in respect of Article 5 of
the Plan, as referred to in the second sentence of paragraph 1 above, the
Company agrees to reimburse you, in an amount not to exceed $15,000, for your
reasonable travel and lodging expenses incurred in connection with outplacement
services provided by the Xxxxxxxx Group in Milwaukee, Wisconsin.
Xxxxxx X. Xxxx
March 31, 1997
Page 2
5. The Company will continue to pay you on a bi-weekly basis through
May 30, 1997. You will receive your final regular paycheck on June 6, 1997. The
total balance of your Deferred Compensation Account will be paid to you on June
20, 1997.
6. On May 30, 1997 you will become eligible for certain severance
payouts which shall be determined according to section 3.3(a) of the Plan
(including the modification/enhancement to the Plan dated April 13, 1994). You
and the Company agree that the amount payable to you hereunder is $428,278,
which amount shall be aid to you in two equal installments of $214,139 on each
of June 30, 1997 and January 3, 1998. This amount is inclusive of the amount of
vacation payable to you in respect of Section 3.3 (c) of the Plan and referred
to in the second sentence of paragraph 1 above.
7. Short-term and long-term disability coverage, and participation in
the Company's 401(k) plan and Deferred Compensation plan, will terminate on
Friday, May 30, 1997.
8. The Company also agrees to provide you with an additional lump sum
payment of $51,090, which will be paid to you in two equal installments of
$25,545 on each of June 30, 1997 and January 3, 1998.
9. You agree to be available at such reasonable times as may be
requested by the Company over the next six months to provide the Company with
general consulting services, to include, without limitation, consulting in
connection with upcoming labor negotiations. The Company agrees to pay you
$25,000 for such consulting services, which amount shall be paid to you in two
equal installments of $12,500 on each of June 30, 1997 and January 3, 1998.
10. In consideration of 3, 4, and 8 above you agree as follows:
(a) You will not directly or indirectly use, attempt to use, disclose,
or otherwise make known to any person or entity any knowledge or
information, including without limitation, lists of customers or
suppliers, trade secrets, know-how, inventions, discoveries, and
processes, as well as any data and records pertaining thereto, which
you may have acquired in the course of your employment; or any
knowledge or information of a confidential nature (including all
unpublished matters) relating to, without limitation, the business,
properties, accounting, books and records, trade
Xxxxxx X. Xxxx
March 31, 1997
Page 3
secrets, or memoranda of the Company or its affiliates, unless the Company
agrees in advance in writing to allow you to do so.
(b) You agree that you will not disparage, either orally or in writing,
the company or its Officers, Directors and employees, and that you will
not in any way assist, aid or participate in the pursuit of any
investigations, claims or charges brought against or with respect to
the Company or its Officers, Directors and employees, except in
response to a lawfully issued subpoena.
(c) With the exception of obligations set forth in this letter and the
fulfillment of same by the Company, you hereby waive and release the
Company, its successors and assigns, their Officers, Directors, and
employees from all liabilities, obligations, damages, claims, causes of
action and demands, whatsoever, and agree not to xxx or file any claim
against the Company or the Company's successors or assigns, their
Officers, Directors, and employees which you now have or hereafter can,
shall or may have, including but not limited to any claims or rights
under federal, state or local laws prohibiting age (including but not
limited to all claims or rights arising under any statutes, including
but not limited to the Age Discrimination in Employment Act), race,
sex, national origin, religion, or other forms of discrimination, any
common law contract, tort or other claims. In the waiver of your rights
arising under the Age Discrimination in Employment Act, it is
understood that you are not waiving any right that arises after this
agreement is executed.
11. In the event of inquiry from prospective employers, the Company
will respond to such reference inquiries and will refrain from making negative
comments about you or your performance.
12. It is understood that the terms of my letter to you dated November
2, 1994 in regard to relocation to the Midwest will be honored at any time
during the twenty-four month period following your termination.
13. It is understood that, upon expiration of the fringe benefit
continuation period set forth in Section 3.3 (c) of the Plan (including the
modifications/enhancements to the Plan dated April 13, 1994), and referred to in
the second sentence of paragraph 1 above, you will, to the extent you are
eligible under the terms of relevant benefit plans, be considered to have
retired.
Xxxxxx X. Xxxx
March 31, 1997
Page 4
14. You agree that you have read this agreement carefully, and that you
were given a period of at least 21 days from its date of issuance in which to
execute this agreement, and that you understand you also may revoke this
agreement at any time during a seven-day period following the date of execution
in which case this agreement will have no force and effect.
15. You are advised to consult with an attorney prior to executing
this agreement, and you acknowledge you have been given a reasonable opportunity
to do so.
XXXXXX PRODUCTS LTD.
By: /s/ Xxxxx X. Xxxxxxxxx
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Xxxxx X. Xxxxxxxxx
President and Chief Executive Officer
ACCEPTED AND AGREED:
/s/ Xxxxxx Xxxx March 31, 1997
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Xxxxxx X. Xxxx Date
