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EXHIBIT 10.11
STATE OF NORTH CAROLINA
EARLY RETIREMENT AGREEMENT
COUNTY OF MECKLENBURG
THIS EARLY RETIREMENT AGREEMENT (this "Agreement") is entered
into on November 22, 1996 by and between XXXXX, INC., a North
Carolina corporation (the "Company"), and XXXXXX X. XXXXXX
("Xxxxxx").
STATEMENT OF PURPOSE
Xxxxxx has been employed by the Company for many years in various
capacities. On the 17th day of April, 1992, the Company and Xxxxxx entered into
an Executive Employment Agreement, a copy of which is attached hereto as Exhibit
A and hereby made a part hereof (the "Employment Agreement"), whereby the
Company continued Xxxxxx'x employment as a Vice President of the Company and
provided Xxxxxx with certain benefits under the Xxxxx, Inc. Key Executive
Employee Benefit Plan (the "Key Executive Plan"). Xxxxxx currently holds the
title of Executive Vice President, is a member of the Company's Board of
Directors and holds various other positions with the Company and its Affiliates.
The Company and Xxxxxx have been engaged in discussions regarding
Xxxxxx'x early retirement, and in such connection the Company and Xxxxxx have
engaged counsel and entered into negotiations with a view toward resolving all
issues relating to Xxxxxx'x employment with the Company and its Affiliates and
the termination of that employment including all issues relating to the
Employment Agreement and all other plans and benefits in connection with that
employment.
As a result of these negotiations, Xxxxxx and the Company have agreed
that Xxxxxx will retire and that Xxxxxx and the Company will terminate their
relationship on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the Statement of Purpose and the
terms and provisions of this Agreement, the parties hereto mutually agree as
follows:
1. DEFINITIONS. Capitalized terms used in this Agreement
that are not expressly defined herein but are defined in the
Employment Agreement have the respective meanings given those terms
in the Employment Agreement. In addition, as used herein, the
following terms shall have the following meanings:
(a) "Affiliate" with reference to the Company means any
Person that directly or indirectly is controlled
by, or is under common control with, the Company
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and expressly includes, without limitation, the Xxxxx
Foundation and the Xxxxxx X. Van Every "control" means
the possession, directly or indirectly, of the power to
direct or cause the direction of the management and
policies of a Person, whether through ownership of voting
securities, by contract or otherwise.
(b) "Person" means any individual, corporation, association,
partnership, business trust, joint stock company,
limited liability company, foundation, trust, estate or
other entity or organization of whatever nature.
(c) "Effective Date" with reference to this Agreement means
the eighth (8th) day following the execution of this
Agreement, if not a Saturday, Sunday or legal holiday, and
if such day is a Saturday, Sunday or legal holiday, then
the first business day following such eighth (8th) day.
(d) "Agreed Values" with respect to the Stock Options means
the agreed values as set forth on Exhibit B attached
hereto and hereby made a part hereof.
(e) "Stock Options" means Xxxxxx'x unexercised vested
incentive stock options on the date hereof as described
on Exhibit B hereto.
2. RESIGNATION. Xxxxxx hereby resigns from all offices, committees and
positions he holds with the Company and its Affiliates, including but not
limited to the following: (a) a member of the Company's Board of Directors, (b)
Executive Vice President and Chief Information Officer of the Company, (c)
President and a member of the Board of Directors of Caronuts, Inc., (d) a member
of the Board of Directors of Vista Bakery, Inc., (e) a member of the Board of
Administrators of the Xxxxxx X. Van Every Foundation and (f) a member of the
Board of Administrators of the Xxxxx Foundation. Xxxxxx will remain an employee
of the Company through December 28, 1996, the end of the Company's current
fiscal year and in such connection (i) shall perform only such duties and work
only such hours as shall be authorized or requested by the President of the
Company and (ii) shall be entitled to use the office he presently occupies and
reasonable secretarial assistance. Xxxxxx hereby resigns from employment with
the Company and its Affiliates effective December 28, 1996. If requested by the
Company, Xxxxxx will execute any additional resignation letters, forms or other
documents which acknowledge his resignation from such employment, positions,
committees and offices.
3. PAYMENTS BY THE COMPANY. Xxxxxx acknowledges that the Company has
paid or provided to him all compensation and benefits
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to which he was entitled through the date hereof. In addition, the
Company agrees to pay or provide Xxxxxx with the following:
(a) Compensation and benefits to which Xxxxxx is otherwise
entitled as an employee of the Company at Xxxxxx'x
current rate and status through December 28, 1996, in
accordance with the Company's generally applicable
policies and procedures;
(b) Payment in 1997 of any award otherwise due Xxxxxx as a
participant in the Company's 1996 Annual Incentive Plan
at the "earned level" in accordance with the said plan;
(c) Fourteen Thousand Three Hundred Sixteen Dollars ($14,316)
in lieu of four (4) weeks vacation payable in cash or
equivalent on January 7, 1997;
(d) One Million Five Hundred Thirteen Thousand Five Hundred
Sixty-three Dollars and 41/100 ($1,513,563.41), payable
in cash or equivalent on January 7, 1997;
(e) Possession of the Company automobile used by Xxxxxx in
connection with his employment through January 7, 1997
together with conveyance of title to said automobile on
said date or such earlier date following the Effective
Date upon election of Xxxxxx with reasonable prior notice
to the Company;
(f) The Agreed Values of the Stock Options, which remain
unexercised at the expiration of such Stock Options,
payment of said Agreed Values to be made upon the
expiration of such Stock Options (the date of which is
March 28, 1997);
(g) Medical insurance coverage for Xxxxxx until Xxxxxx
reaches age 60 (August 19, 2006) or his earlier death
under such terms and conditions as are most closely
comparable to the "Plan B" or HMO coverage option that is
currently provided Xxxxxx under the Company's group
medical plan and as shall be customarily provided by the
Company to the Company's executives from time to time
during such period. During this period, Xxxxxx will be
entitled to obtain at his expense such optional coverages,
such as dental coverage and family/dependent medical
coverage, under the Company's employee insurance program
as are available for employees generally. After age 60
Xxxxxx may elect to obtain at his expense coverage as a
"retiree" under such program, if any, as may then be
available to the Company's retired executives;
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(h) Life insurance, accidental death and dismemberment
insurance and disability insurance for Xxxxxx until
Xxxxxx reaches age 60 (August 19, 2006) or his earlier
death under such terms and conditions that are reasonably
comparable to the coverages currently provided Xxxxxx
under the Company's plans for such insurance and as shall
be customarily provided by the Company to the Company's
executives from time to time during such period;
(i) Xxxxxx has vested interests under Company sponsored
Profit-Sharing and 401-K plans. Xxxxxx'x vested
interest in these plans shall be paid when and as provided
in, and otherwise subject to, the terms, provisions and
conditions of said plans, and nothing in this Agreement
shall modify or override the terms, provisions or
conditions;
(j) The Company will provide Xxxxxx, at no expense to him,
outplacement services through Xxxxxx-Xxxxxxx Associates
for a minimum period of three (3) months during 1997.
Xxxxxx will have the option of determining when he wishes
to utilize such outplacement services during 1997.
Moreover, upon expiration of the three month period, if
the Company determines that further outplacement services
would be appropriate, the Company will consider extending
payment for such services for an additional three to six
months;
(k) Title and possession of the lap top computer used by
Xxxxxx in connection with his employment together with
all operating software and software packages such as
Microsoft Office Suite, Lotus and similar programs,
delivery to be on December 28, 1996;
(l) The Company will reimburse Xxxxxx during 1997 for up
to One Thousand Dollars ($1,000) of reasonable out of
pocket expenses incurred by him for accounting services
related to tax planning upon submission to the Company of
reasonable documentation of such expenses;
(m) The Company will reimburse Xxxxxx annually until he
reaches age 60 (August 19, 2006) or his earlier death
for up to Three Hundred Dollars ($300) per year of
uninsured out of pocket expenses incurred by him for
physical medical examinations for him upon submission to
the Company of reasonable documentation of such expenses;
and
(n) The Company agrees to Indemnify and hold Xxxxxx
harmless from any claims asserted against him
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arising out of the prior performance of his duties with
the Company or its Affiliates to the same extent as the
Company indemnifies retired officers or directors of the
Company.
3. CREDIT UNION LOANS. On or before December 28, 1996 Xxxxxx
will repay any amounts due from him to the Company's credit union.
4. TERMINATION OF THE EMPLOYMENT AGREEMENT AND ALL OTHER BENEFITS.
Except as and to the extent expressly provided in this Agreement to the
contrary, the Employment Agreement is hereby terminated, and without limiting
the generality of the foregoing, the restrictions of Paragraph 3 of the
Employment Agreement shall be null and void. The Company and Xxxxxx acknowledge
and agree that all other benefits and perquisites related to or resulting from
Xxxxxx'x employment and positions with the Company and its Affiliates, which are
not described and provided for in this Agreement, terminate on the Effective
Date, and that the Company has no further obligations with respect thereto.
5. CONFIDENTIAL INFORMATION AND COMPANY PROPERTY. Xxxxxx acknowledges
that by reason of Xxxxxx'x employment by the Company, Xxxxxx has had access to
certain Company "Trade Secrets" (as defined in the North Carolina Trade Secrets
Protection Act, N.C.G.S. ss.66-152) and confidential product formulations
(collectively "Confidential Information"). Xxxxxx agrees that he shall not
directly or indirectly use, reveal, disclose or remove from the Company's
premises Confidential Information or material containing Confidential
Information, without the prior written consent of the Company. In addition,
Xxxxxx agrees that he will turn over and return to the Company no later than
December 28, 1996 all property whatsoever of the Company now in his possession
(including keys and credit cards).
6. EMPLOYMENT TAXES AND WITHHOLDINGS.
(a) Xxxxxx acknowledges and agrees that the Company shall
withhold from the payments and benefits described in
this Agreement all taxes, including income and employment
taxes, required to be so deducted or withheld under
applicable law.
(b) The Company will not withhold any Federal or State
income taxes from or with respect to the payments and
transfers described in Paragraphs 3(d), (e), (f), (g),
(h), (j), (k), (l) and (m) (the "Settlement Payments")
which are being expressly and directly made in settlement
of the Company's contractual obligations to Xxxxxx under
the terms of the Executive Employment Agreement. Xxxxxx
will report all of the Settlement Payments as ordinary
income for Federal and State income tax purposes for the
calendar year in which he receives the Settlement
Payments, and Xxxxxx will pay all
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appropriate income tax liabilities (including estimated
taxes, if any) due with respect thereto on timely returns
filed for such years.
(c) Neither Xxxxxx nor the Company shall withhold or pay
any Federal Insurance Contributions Act taxes ("FICA")
or other employment taxes from or with respect to the
Settlement Payments. In the event that the Company later
reasonably determines that any such taxes should have been
withheld or were otherwise due with respect to the
Settlement Payments, then Xxxxxx agrees that he will pay
or reimburse to the Company the "employee's" share of such
taxes when such taxes are paid by the Company.
(d) The Company and Xxxxxx agree to notify each other with
respect to any inquiries or controversies relating to
withholding or employment taxes with respect to the
Settlement Payments and to cooperate with each other in
the defense and/or resolution of any issues which may be
raised with respect to their positions on these matters as
set forth in this Agreement.
7. RELEASE OF THE COMPANY. Xxxxxx, on behalf of himself and his heirs,
personal representatives, successors and assigns, hereby releases and forever
discharges the Company and its Affiliates, and each and every one of their
respective present and former shareholders, directors, officers, employees and
agents, and each of their respective successors and assigns, from and against
any and all claims, demands, actions, causes of action, damages, costs and
expenses, including without limitation all "Employment-Related Claims," which
Xxxxxx now has or may have by reason of any thing occurring, done or omitted to
be done to the date of this Agreement; provided, however, this release shall not
apply to any claims which Xxxxxx may have for the payments or benefits expressly
provided for Xxxxxx in this Agreement. For purposes of this Agreement,
"Employment-Related Claims" means all rights and claims Xxxxxx has or may have:
(i) related to his employment by or status as an employee of the
Company or any of its Affiliates or the termination of that
employment or status or to any employment practices and
policies of the Company, or its Affiliates; or
(ii) under the federal Age Discrimination in Employment Act of
1967, as amended ("ADEA").
8. SPECIAL ADEA WAIVER ACKNOWLEDGEMENTS. XXXXXX ACKNOWLEDGES AND
AGREES THAT HE HAS READ THIS AGREEMENT IN ITS ENTIRETY AND THAT THIS
AGREEMENT CONTAINS A GENERAL RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS, INCLUDING
RIGHTS AND CLAIMS ARISING UNDER
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THE FEDERAL AGE DISCRIMINATION IN EMPLOYMENT ACT OF 1967, AS AMENDED ("ADEA").
XXXXXX FURTHER ACKNOWLEDGES AND AGREES THAT:
(a) THIS AGREEMENT DOES NOT RELEASE, WAIVE OR DISCHARGE
ANY RIGHTS OR CLAIMS THAT MAY ARISE AFTER THE DATE OF
THIS AGREEMENT;
(b) HE IS ENTERING INTO THIS AGREEMENT AND RELEASING,
WAIVING AND DISCHARGING RIGHTS OR CLAIMS ONLY IN
EXCHANGE FOR CONSIDERATION WHICH HE IS NOT ALREADY
ENTITLED TO RECEIVE;
(c) HE HAS BEEN ADVISED, AND IS BEING ADVISED IN THIS
AGREEMENT, TO CONSULT WITH AN ATTORNEY BEFORE EXECUTING
THIS AGREEMENT AND IS EXECUTING THIS AGREEMENT WITH THE
ADVICE OF COUNSEL;
(d) HE HAS BEEN ADVISED, AND IS BEING ADVISED IN THIS
AGREEMENT, THAT HE HAS UP TO TWENTY-ONE DAYS (21) DAYS
WITHIN WHICH TO CONSIDER THIS AGREEMENT AND THAT IF HE
EXECUTES THIS AGREEMENT PRIOR TO THE EXPIRATION OF THE
TWENTY-ONE (21) DAY PERIOD, THEN HE EXPRESSLY WAIVES HIS
RIGHTS WITH RESPECT TO THE REMAINING TIME AND THAT THE
AGREEMENT WILL BECOME EFFECTIVE FOLLOWING THE EXPIRATION
OF THE SEVEN (7) DAY PERIOD REFERRED TO IN PARAGRAPH 8 (e)
BELOW; AND
(e) HE IS AWARE THAT THIS AGREEMENT WILL NOT BECOME
EFFECTIVE OR ENFORCEABLE UNTIL SEVEN (7) DAYS FOLLOWING
HIS EXECUTION OF THIS AGREEMENT AND THAT HE MAY REVOKE
THIS AGREEMENT AT ANY TIME DURING SUCH PERIOD BY
DELIVERING (OR CAUSING TO BE DELIVERED) TO THE PRINCIPAL
OFFICE OF THE COMPANY NOTICE OF HIS REVOCATION OF THIS
AGREEMENT NO LATER THAN 5:00 P.M. EASTERN TIME ON THE
SEVENTH (7TH) FULL DAY FOLLOWING HIS EXECUTION OF THIS
AGREEMENT.
9. CONFIDENTIALITY OF THIS AGREEMENT; EMPLOYMENT REFERENCE. Xxxxxx
shall not at any time, directly or indirectly, discuss with or disclose to
anyone (other than to members of his immediate family, his attorney, his tax
advisors and the appropriate taxing authorities or as otherwise required by law
[hereinafter "Qualified Persons"]) the terms of this Agreement, including the
amounts payable hereunder. Xxxxxx further agrees that he shall not discuss with
anyone other than Qualified Persons the circumstances surrounding the
termination of his employment. If any person asks Xxxxxx about the above
matters, he will simply say that he elected early retirement and resigned from
the Company and all issues relating to his employment have been resolved. Xxxxxx
further agrees that for a period of five (5) years from the Effective Date, he
will refrain from making derogatory comments about the Company or its agents or
affiliates to the Company's customers, suppliers or employees. The Company
agrees that for a period of five (5)
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years from the Effective Date, the Company and its officers will likewise
refrain from making derogatory comments about Xxxxxx to the Company's
customers, suppliers or employees. The Company further agrees that if any
person makes inquiry concerning Xxxxxx, the Company will advise such person
only as to the dates of Xxxxxx'x employment with the Company, the positions
held and that he elected early retirement and voluntarily resigned from the
Company.
10. APPLICABLE LAW. This Agreement is made and executed with the
intention that the construction, interpretation and validity hereof shall be
determined in accordance with and governed by the laws of the State of North
Carolina.
11. BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the Company, its successors and assigns. This Agreement shall
be binding upon and inure to the benefit of Xxxxxx, his heirs, executors and
administrators.
12. ENTIRE AGREEMENT. This Agreement constitutes the entire agreement
between the parties with respect to the subject matter hereof and supersedes
and cancels all prior or contemporaneous oral or written agreements and
understandings between them with respect to the subject matter hereof.
IN WITNESS WHEREOF, the Company has caused this Agreement to be signed
by its duly authorized officers and its corporate seal to be hereunto affixed,
and Xxxxxx has hereunto set his hand and seal, all as of the day and year first
above written.
XXXXX, INC.
[CORPORATE SEAL]
ATTEST: By: /s/ Xxxx X. Xxxxxx, III
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Xxxx X. Xxxxxx, III
/s/ Xxxxx X. Xxxxx, Xx. President
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Secretary
/s/ Xxxxxx X. Xxxxxx [SEAL]
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Xxxxxx X. Xxxxxx
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EXHIBIT B
TO
RETIREMENT AGREEMENT
