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Exhibit 10.3
XXX X. XXXXXX, INC.
SEVERANCE AGREEMENT
Severance Agreement ("Agreement") made May 22, 1997 between Xxx X.
Xxxxxx, Inc., a Pennsylvania corporation, ("Weston") and Xxxxx X. Xxxxx
("Marks").
BACKGROUND
Marks is currently Weston's Executive Vice President and Chief Operating
Officer.
Weston and Marks have entered into (i) seven separate Non-Qualified Stock
Option Agreements covering grants made on each of May 20, 1990, March 31, 1992,
February 8, 1993, February 14, 1994, February 13, 1995, February 26, 1996 and
February 18, 1997, respectively, attached hereto as Exhibits A-1 through A-7,
and (ii) a Supplemental Retirement Agreement dated as of December 31, 1989,
attached hereto as Exhibit B. 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 Marks agree that it would serve the best interests of each
to provide Marks with certain additional benefits in consideration of Marks'
agreement to terminate his 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 30, 1997, Marks shall
resign from his employment with Weston and from his position as Weston's
Executive Vice President and Chief Operating Officer.
2. Severance Benefits and Payment Conditions. In consideration of
Marks' resignation, Marks shall receive the severance benefits set forth herein
provided Marks satisfies each of his agreements and undertakings under Sections
3 and 4 hereof. Marks' entitlements under the Benefit Agreements and any
employee benefit plan, including Weston's vacation plan, applicable to a class
of Weston employees which includes Marks 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 Marks at the rate of
$17,081 per month for sixteen months, effective as of June 1, 1997 and ending
September 30, 1998. Weston shall make installment payments to Marks on its
regular payroll dates during such sixteen-month period. If Marks dies before the
last payment, the remaining payments shall be paid to his 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 any employment agreement between Weston and Marks.
(b) Automobile. Weston shall permit Marks to use the
automobile which it currently has under lease for his use and shall pay expenses
associated therewith that it currently pays, until November 30, 1997.
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(c) Salary-At-Risk. Weston shall pay Marks the amount he
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 June 1, 1997
shall be $16,000, payable in monthly installments for 15 years. For purposes of
the Supplemental Retirement Agreement, Marks' 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 Marks on the same basis as in effect for active
employees until September 30, 1998 or until he sooner elects that such coverages
cease. After such period, Marks may elect continuation coverage completely at
his own expense as provided by law.
(g) Outplacement. Weston shall provide Marks $20,000 for
outplacement services, as designated in writing by Marks, and if no such
designation has been furnished by Marks by June 30, 1997, Weston shall pay the
sum of $20,000 to Marks.
3. Marks' Agreements and Undertakings.
(a) Cooperation Requirement. During the severance period (June
1, 1997 through September 30, 1998), at Weston's reasonable request, Marks shall
provide Weston such information pertaining to his employment with Weston as he
may have and assist Weston to transfer his duties to such successor or
successors as Weston may designate. Weston shall reimburse Marks for all
reasonable expenses he incurs in fulfilling his obligations under the preceding
sentence.
(b) Non-Competition Requirement. Weston's obligation to
make payments or provide benefits under Section 2, including all payments
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under the Supplemental Retirement Agreement, shall terminate and Weston shall
have all of the rights and remedies provided for under subsection 3(c) as well
as restitution of payments made or the cost of benefits provided hereunder if
Marks, without Weston's prior written approval, either directly or indirectly,
for his own account or for the account of another person or entity, during the
sixteen-month severance period (June 1, 1997 through September 30, 1998)
(i) acquires or holds a 5% equity or profit interest
in any competitor of Weston or any business in which Weston owns directly or
indirectly at least 50% of the equity interests or 50% of the profit interests;
(ii) solicits, recruits, hires, or otherwise induces
any other Weston employee to leave the employment of Weston or induces such
Weston employee to become an employee or otherwise become associated with any
company or business other than Weston;
(iii) discloses, divulges, furnishes or otherwise
makes available any "Trade Secrets" or "Documents" of Weston to any third party
except as Weston authorizes. Marks acknowledges that Weston's business,
services, and technologies are highly specialized, that the identity and
particular needs of Weston's customers and suppliers are not generally known,
and that the documents and information regarding Weston's customers, suppliers,
services, methods of operation, sales, pricing, and costs are highly
confidential and constitute trade secrets ("Trade Secrets"). Further, Marks
agrees that all memoranda, notes, correspondence, records, articles,
publications, studies, drawings, specifications, reports, computer programs in
any format, project management systems, proposals, photographs, films, tapes,
graphic matter, and other related documents ("Documents") which are made,
compiled, authored or co-authored by, or distributed or made available to Marks
while employed by Weston shall remain the sole and exclusive property of
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Weston. Marks agrees that he does not have any proprietary interest in the
Documents and shall deliver the same to Weston upon termination of his
employment.
(iv) solicits the trade or patronage of any Weston
clients or prospective clients to whom there are pending proposals regardless of
the location of such clients or prospective clients with respect to any
technologies, services, products, Trade Secrets, or other matters in which
Weston is active. Such restrictions shall only apply to clients that Marks had
direct or indirect contact with while employed at Weston or to technologies,
services, products or Trade Secrets that Marks was involved with or had access
to while employed at Weston.
(c) Injunctive Relief. Marks acknowledges the reasonableness
of each of the conditions and restrictions of this Section 3, including, without
limitation, the duration of time for which they apply, and that Weston will
suffer irreparable injury, not readily susceptible to valuation in monetary
damages, if Marks breaches any obligations under this Section. Accordingly,
Marks agrees that Weston will be entitled to injunctive relief against any
breach or prospective breach by Marks. Marks hereby submits to the jurisdiction
of the courts in the Commonwealth of Pennsylvania.
(d) Relief. Marks and Weston shall deliver a release to
each other in the form attached hereto as Exhibit C.
4. Mutual Agreement and Undertaking. Weston and Marks 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 Marks'
communications, 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
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provide Marks with a letter of reference in the form attached hereto as Exhibit
D.
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
Marks, or any executor, administrator, heir, legatee, distributee, relative or
any other person or entity, whether or not in being, claiming under Marks 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.
7. Taxes. Weston shall withhold from payments to Marks 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 Marks
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
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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 Marks.
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 Marks, to Marks'
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 Marks 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 Marks, his heirs and
legal representatives. This Agreement shall not be assignable by Marks 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.
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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 Marks has hereunto set his 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/Xxxxx X. Xxxxx
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Xxxxx X. Xxxxx
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