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Exhibit 10.2
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".
Weston and Xxxxxx agree that it would serve the best interests of each to
provide Xxxxxx with certain additional benefits in consideration of Xxxxxx'x
agreement to terminate her employment with Weston.
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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 has
resigned from her employment 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 and Xxxxxx'x agreements and undertakings under Section 3
hereof, Xxxxxx shall receive the severance benefits set forth herein provided
Xxxxxx satisfies each of the requirements of Section 3 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 seven months, effective as of May 10, 1997 and ending
December 9, 1997. Weston shall make payments to Xxxxxx on its regular payroll
dates for payment of salary earned during such seven-month period. If Xxxxxx
dies before the last payment, the remaining payments shall be paid to her
estate. The salary continuation payments hereunder shall be
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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 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 quarter ended June 30,
1996. 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 November 9, 1997 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.
(g) Outplacement. Weston shall provide Xxxxxx
outplacement services at Weston's expense, not to exceed $25,000.
3. Xxxxxx'x Agreements and Undertakings.
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(a) Cooperation Requirement. 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 significant financial
interest in any competitor of Weston or any "Weston affiliate" (as defined
below);
(ii) competes with Weston or any "Weston affiliate"
in soliciting any 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
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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 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
until May 8, 1999, at which time such provisions become effective to and
including May 8, 2000 with respect to benefits provided under the Supplemental
Retirement Agreement.
(c) Release. Xxxxxx shall deliver a release to Weston in
the form attached hereto as Exhibit D.
4. 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.
5. Non-Alienation. None of the rights or payments contemplated under
this Agreement may be sold, given away,
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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 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.
6. 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.
7. General Obligation. The rights and benefits of Xxxxxx hereunder
shall be solely those of an unsecured creditor of Weston.
8. 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
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waiver or relinquishment of such right or power at any other time or times.
9. Modification. This Agreement shall not be modified or amended
except by written instrument duly executed by Weston and Xxxxxx.
10. 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.
11. 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.
12. 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.
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13. 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 interest to Weston and which is bound hereby.
14. 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.
15. 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.
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.
s/Xxxxxx X. Xxxxxx By: s/Xxxxxxx X. Xxxxxxxx
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Secretary
(SEAL) s/M. Xxxxxxxxx Xxxxxx
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M. Xxxxxxxxx Xxxxxx
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