EXHIBIT 10.21
CONSULTING AND RETIREMENT AGREEMENT
Xxxx Xxx Corporation (the "Company") and Xxxx X. Xxxxx ("Executive") enter
into this Consulting and Retirement Agreement (this "Agreement") on the 25th day
of February, 2000 (the "Effective Date").
I N T R O D U C T I O N:
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The Executive is the Chairman of the Board of Directors and Chief Executive
Officer of the Company;
The Executive has advised the Company that he intends to step down as
Chairman of the Board of Directors of the Company on October 5, 2001, when he
attains the age of sixty-five, and that he intends to retire as an employee of
the Company on December 31, 2001.
The Company desires to retain the Executive as a director and consultant
following Executive's retirement.
NOW, THEREFORE, in consideration of the mutual promises contained in this
Agreement, the Executive and the Company agree as follows:
1. RETIREMENT TRANSITION AND SUCCESSION PLANNING. Executive agrees to
continue in his current position as Chairman of the Board of Directors and Chief
Executive Officer until June 30, 2000. Upon the election of a successor Chief
Executive Officer, effective July 1, 2000, the Executive will relinquish his
duties as Chief Executive Officer. From July 1, 2000 through October 5, 2001
(the date of Executive's 65th birthday), Executive agrees to continue to serve,
if re-elected, as Chairman of the Board of Directors of the Company, provided he
is then able to carry out the duties and responsibilities of Chairman. On
October 5, 2001, Executive intends to relinquish his duties as Chairman of the
Board of Directors. Executive agrees to continue to serve as a director of the
Company after October 5, 2001, as provided in Section 2(a). From and after
October 5, 2001, Executive shall have the honorary title of Chairman Emeritus.
Executive plans to retire as an employee of the Company on December 31, 2001.
For purposes of this Agreement, December 31, 2001 shall be the Executive's
Retirement Date. At his Retirement Date, Executive's employment with the Company
shall conclude.
2. CONTINUING BOARD SERVICE.
(a) Executive has been advised by the Board Affairs and Corporate
Governance Committee of the Company's Board of Directors (the "Committee") that
the Committee presently intends to nominate the Executive for re-election as a
director of the Company. During the Consulting Period (as defined in Section 6)
Executive consents to be named by the Committee as a candidate for election to
the Board of Directors and, if elected, to serve as a director of the Company,
provided he is then able to carry out the duties and responsibilities of a
director. Following Executive's Retirement Date, Executive shall be compensated
for his services as a director of the Company in the same manner as other
non-employee directors of the Company.
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(b) Executive has been advised by the Supervisory Board of the Company's
subsidiary, Xxxx Xxx/DE, N.V., that the Supervisory Board intends to nominate
Executive for re-election as a member of the Supervisory Board. During the
Consulting Period, Executive agrees to serve as a member of the Supervisory
Board of Xxxx Xxx/DE, N.V., if elected, and provided he is then able to carry
out the duties and responsibilities of a Supervisory Board member. On and prior
to the Retirement Date, Executive shall not be compensated for his services as a
Supervisory Board member. Following Executive's Retirement Date, Executive shall
be compensated in the same manner as other Supervisory Board members who are not
employees of the Company.
3. COMPENSATION PRIOR TO THE RETIREMENT DATE.
(a) The Executive shall continue to receive his current compensation and
benefits through the Retirement Date.
(b) Executive shall be eligible to receive Executive's full bonus earned
under the Short-Term (Annual) Bonus Plan of the Company for the Company's fiscal
years 2000 and 2001 and a pro-rated bonus (50%) for the Company's fiscal year
2002. The actual bonuses shall be determined by the Compensation and Employee
Benefits Committee of the Board of Directors. Executive shall not participate in
any annual bonus plan of the Company for any fiscal year after 2002.
(c) Executive shall continue to participate in the Company's qualified and
supplemental non-qualified retirement plans through the Retirement Date.
(d) Subject to the determination of the Compensation and Employee Benefits
Committee of the Company's Board of Directors, Executive shall be eligible for
full awards under the Company's Long-Term Performance Incentive Plans ("LTPIP"),
for the fiscal years 1998-2000 and 1999-2001 and a pro rated award (30/36ths)
for the fiscal years 2000-2002. Executive shall not be entitled to any other
award under the LTPIP.
4. STOCK OPTIONS. Except for the grant of replacement stock options (upon
the exercise of an existing stock option) in accordance with the terms of the
Company's stock option plans, Executive shall not be granted any new stock
options after the Effective Date. From the Effective Date until the Retirement
Date, Executive's options shall continue to vest and to be exercisable in
accordance with their terms. Commencing on January 1, 2002, Executive shall be
treated as a retired participant under the Company's stock option plans. As a
retired participant, Executive's then outstanding stock options will continue to
vest and may be exercised until the earlier of (i) the expiration date of the
option or (ii) December 31, 2006; provided, however, that notwithstanding the
foregoing, the Executive may exercise the option granted on January 27, 2000
until the expiration date of the option. Prior to January 1, 2002, Executive is
eligible to be issued replacement stock options upon exercise of any employee
stock options held by him. Commencing on January 1, 2002, except as provided
below, Executive will not be eligible to be issued replacement stock options
upon the exercise of any stock option held by him. Notwithstanding the
foregoing, commencing on January 1, 2002 and prior to June 30, 2003, Executive
may designate one exercise date on which he may exercise any portion or all of
the one-third of his option granted on August 26, 1999 that will vest on August
26, 2002, one exercise date on which he may exercise
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any portion or all of the one-third of his option granted on January 27, 2000
that will vest on January 27, 2002, and one exercise date on which he may
exercise any portion or all of the one-third of his option granted on January
27, 2000 that will vest on January 27, 2003 and, in each case, Executive will be
eligible to be issued replacement stock options in connection with such
exercises. Nothing herein shall be deemed to prevent Executive from exercising
options at any time after January 1, 2002.
5. INSURANCE. Executive shall continue to participate in the Company's
travel accident, personal accident, accidental death and dismemberment
insurance, health and short and long-term disability insurance plans until the
Retirement Date. Commencing on January 1, 2002, it is anticipated that Executive
will elect Medigap Option J for supplemental health coverage.
6. CONSULTING SERVICES FOLLOWING THE RETIREMENT DATE. Commencing on
January 1, 2002 and ending on June 30, 2009 (the "Consulting Period"), Executive
agrees to make available to the Company, Executive's services, experience and
knowledge with respect to the Company and to undertake any other assignments and
projects which the Company may specify. Without limiting the foregoing,
Executive agrees, at the request of the Company's Chief Executive Officer, to
(i) consult on the Company's strategic initiatives; (ii) consult on operational
and financial matters; (iii) consult on acquisitions and divestitures; (iv)
represent the Company at industry, trade, civic, charitable and cultural
functions; and (v) serve as the Company's representative on various charitable
and civic organizations. The Company and the Executive agree that from January
1, 2002 through December 31, 2005, Executive will not be required to spend more
than 25% of his working time on consulting activities for the Company and from
January 1, 2006 through June 30, 2009, Executive will not be required to spend
more than 15% of his working time on consulting activities for the Company.
During the Consulting Period, the Company will provide Executive with air
transportation service commensurate with the service he presently receives for
company-related business travel by the Executive. Executive will reimburse the
Company for the costs incurred by the Company for any personal use by the
Executive of such air transportation service. In consideration for the
Executive's consulting services, Executive shall be paid $500,000 per annum in
equal monthly installments ($250,000 for the services rendered in calendar year
2009). Nothing contained in this Section 6 shall be deemed to create an
employment relationship between the Company and Executive. In providing such
consulting services, Executive shall be an independent contractor and shall not
have the authority to bind the Company with respect to any matter. The Company
shall reimburse Executive for all out-of-pocket expenses reasonably and
necessarily incurred in the performance of such consulting services, provided
the Company's policies of documentation and approval are satisfied. All expenses
incurred shall be reviewed and approved by the Company's Internal Audit
Department.
7. OTHER BENEFITS.
(a) OFFICE. Following the Retirement Date and through December 31, 2011,
the Company will provide the Executive with suitable office facilities (which
facilities will not be contiguous to the Company's executive offices) and two
administrative assistants.
(b) AUTOMOBILE. Following the Retirement Date and through December 31,
2008, the Company will continue to provide Executive with an automobile and
driver commensurate with the automobile transportation service he presently
receives.
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8. RECEIPT OF OTHER COMPENSATION. Executive acknowledges that, other than
as specifically set forth in this Agreement, following the Retirement Date, he
will not be due any compensation (except for amounts unpaid and owing for
Executive's employment with the Company and its affiliates prior to the
Retirement Date) from the Company or any of its affiliates, and after the
Retirement Date, except as provided herein, he will not be eligible to
participate, except as a retired employee, in any of the compensation or benefit
plans of the Company or any of its affiliates. Executive will be entitled to
receive benefits, which are vested and accrued prior to the Retirement Date,
pursuant to the employee benefit plans of the Company. The Company shall
promptly reimburse Executive for business expenses incurred in the ordinary
course of Executive's employment on or before the Retirement Date, but not
previously reimbursed, provided the Company's policies of documentation and
approval are satisfied.
9. NON-SOLICITATION AND NON-COMPETITION. In consideration for receiving
the payments contained in this Agreement, Executive agrees that, during the
Consulting Period, the Executive:
(a) will not, without the prior written consent of the Company, alone, or
in association with others, solicit on behalf of Executive, or any other person,
firm, corporation or entity, any employee of the Company, or any of its
operating divisions, subsidiaries or affiliates, for employment with a Competing
Business (as defined below) and;
(b) will not, without the prior written consent of the Chief Executive
Officer of the Company, directly or indirectly, engage or invest in, counsel or
advise or be employed by any Competing Business. Notwithstanding the foregoing,
Executive shall be entitled to (i) own not more than four and nine-tenths
percent (4.9%) of any publicly held entity that is a Competing Business and (ii)
be an investor in any mutual fund or diversified investment company. For
purposes of this Agreement, a "Competing Business" shall mean any person, firm,
corporation or entity engaged in, or conducting business, which is the same as,
or competing with, the businesses being conducted by the Company or any of its
subsidiaries, divisions or affiliates.
10. CONFIDENTIALITY. At all times hereafter, Executive will maintain the
confidentiality of all information in whatever form concerning the Company or
any of its affiliates relating to its or their businesses, customers, finances,
strategic or other plans, marketing, employees, trade practices, trade secrets,
know-how or other matters which are not generally known outside the Company, and
Executive will not, directly or indirectly, make any disclosure thereof to
anyone, or make any use thereof, on his own behalf or on behalf of any third
party, unless specifically requested by or agreed to in writing by the Chief
Executive Officer of the Company, except to the extent that such information (i)
becomes a matter of public record or is published in a newspaper, magazine or
other periodical or on other media available to the general public, other than
as a result of any act or omission of Executive, (ii) is required to be
disclosed by any law, regulation or order of any court or regulatory commission,
department or agency, provided that Executive gives prompt notice of such
requirement to the Company to enable to the Company to seek an appropriate
protective order, or (iii) is necessary to perform properly Executive's duties
under this Agreement. Executive will promptly after the Retirement Date return
to the Company all Company property then in his possession, except for property
or materials relating to, or necessary for, the performance of his duties under
this Agreement.
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11. BREACH OF AGREEMENT. Executive and the Company acknowledge and agree
that the Company will or would suffer irreparable injury in the event of a
breach or violation or threatened breach or violation of the provisions set
forth in Section 9 or 10 and agree that in event of actual or threatened breach
or violation of such provisions the Company shall be entitled to seek injunctive
relief in the federal or state courts located in Illinois to prohibit any such
violation or breach or threatened violation or breach, without necessity of
posting any bond or security and such right to seek injunctive relief shall be
in addition to any other right available under this Agreement. If the Company
pursues a claim for actual damages for a breach of Section 9 or 10 by Executive,
and is successful on the merits, any award will first be offset by any monies
remaining owed to the Executive under this Agreement.
12. RELEASE. In consideration for certain payments and benefits to be made
following the Retirement Date pursuant to this Agreement, following the
Retirement Date, Executive agrees to deliver to the Company a signed release in
the form attached hereto as Exhibit A (the "Release"). Unless and until
Executive delivers the Release to the Company, the Company shall have no
obligation to make such payments under this Agreement.
13. INDEMNIFICATION.
(a) The Company agrees that the limitation of liability now existing in
favor of Executive contained in Article Thirteenth of the Company's Charter and
all rights to indemnification now existing in favor of Executive contained in
Article V of the Company's By-laws, in each case as in effect on the date
hereof, shall not be amended in any manner that would adversely affect the
rights of Executive, unless such amendment is required by law. To the extent
permitted by the laws of the State of Maryland, such indemnification shall be
mandatory and not permissive and the Company shall advance all fees, costs and
expenses in connection with such indemnification.
(b) Pursuant to the rights to indemnification referred to in Section 13(a)
hereof, the Company agrees to indemnify and hold harmless Executive and his
legal representatives and successors to the fullest extent permitted by the laws
of the State of Maryland with respect to any claim arising at any time out of
any event, action or omission related to or in connection with Executive having
been a director, officer or employee of, or consultant to, the Company or having
served as a director or officer of another corporation or other organization at
the request of the Company. This indemnification shall continue in full force
and effect for a period of not less than the duration of all statutes of
limitations applicable to such matters (or in the case of events, actions or
omissions giving rise to matters of which Executive has promptly notified the
Company of a claim hereunder and which have not been resolved prior to the
expiration of such period, until such matters are finally resolved). Without
limiting the foregoing, the Company shall periodically advance all expenses
(including reasonable attorneys' and paralegals' fees and other costs and
expenses) as incurred with respect to the foregoing to the fullest extent
permitted by the laws of the State of Maryland, and Executive shall be defended
by the counsel of his choice. Executive shall not unreasonably withhold his
consent to the settlement of any claim for monetary damages for which he is
entitled to be fully indemnified hereunder. From and after the Effective Date,
and so long as the Executive is a director of the Company, the Company shall
maintain in effect the policies of directors' and officers' liability insurance
to the extent currently maintained by the Company, together with errors and
omissions coverage or other equivalent or more comprehensive liability coverage,
all to the extent that such coverage
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is available at reasonable commercial rates, and Executive shall be covered by
such policies for acts and omissions as a director or officer of the Company in
accordance with their respective terms to the maximum extent of coverage
available for any director or officer of the Company. The Company shall pay any
deductible amount under such policies of insurance to the extent that the
Company may legally do so.
14. DEATH OR TOTAL DISABILITY.
(a) In the event of Executive's death or total disability prior to the
Retirement Date, Executive's designated beneficiary or his estate, in the event
of Executive's death, or Executive, in the event of his total disability, shall
be entitled to all benefits payable to a deceased or disabled corporate officer
of the Company under the Company's compensation, benefit and retirement plans
and Executive's then outstanding stock options will be exercisable in accordance
with their terms.
(b) In the event of Executive's death following the Retirement Date and
during the Consulting Period, (i) the consulting payments provided for in
Section 6 and the other benefits provided for in Sections 7(a) and 7(b) shall
cease as of the date of death and (ii) Executive's then outstanding stock
options will be exercisable by Executive's designated beneficiary in accordance
with their terms.
(c) In the event of Executive's total disability following the Retirement
Date and during the Consulting Period, (i) the consulting payments provided for
in Section 6 and the other benefits provided for in Sections 7(a) and 7(b) shall
cease on the date which is two years following the date on which Executive
became totally disabled and (ii) Executive's then outstanding stock options will
be exercisable in accordance with their terms.
15. TAX REPORTING. Executive acknowledges and agrees that for each
calendar year commencing on January 1, 2002, the Company shall provide Executive
with the applicable Form 1099 for Federal income tax purposes to reflect the
consulting payments paid to Executive pursuant to Section 6 of this agreement,
and such similar forms required under state or local tax laws, and shall cause a
copy of the same to be filed with the Internal Revenue Service. These form(s)
shall report the amount paid by the Company to Executive during the Consulting
Period pursuant to the terms of the Agreement. Executive shall be solely
responsible for paying all appropriate federal, state and local income taxes
with respect to such amounts.
16. SEVERABILITY OF PROVISIONS. In the event that any one or more of the
provisions of this Agreement is held to be invalid, illegal or unenforceable,
the validity, legality and enforceability of the remaining provisions will not
in any way be affected or impaired thereby. Moreover, if any one or more of the
provisions contained in this Agreement are held to be excessively broad as to
duration, scope, activity or subject, such provisions will be construed by
limiting and reducing them so as to be enforceable to the maximum extent
compatible with applicable law.
17. NON-ASSIGNABILITY. The rights and benefits under this Agreement are
personal to Executive and such rights and benefits shall not be subject to
assignment, alienation or transfer, except to the extent such rights and
benefits are lawfully available to the estate or beneficiaries of Executive upon
death.
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18. ENTIRE AGREEMENT. This Agreement sets forth all the terms and
conditions with respect to the compensation, remuneration of payments and
benefits due Executive from the Company and supersedes and replaces any and all
other agreements or understandings Executive may have had with respect thereto.
It may not be modified or amended except in writing and signed by both Executive
and an authorized representative of the Company.
19. NOTICE. Any notice to be given to the Executive or the Company shall
be in writing and shall be deemed given when delivered personally or when mailed
by certified mail, return receipt requested, addressed as follows:
To Executive at:
X.X. Xxx 000
Xxxx Xxxxx, Xxxxxxxx 00000
To the Company at:
Xxxx Xxx Corporation
Three Bank One Plaza
00 Xxxx Xxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attention: General Counsel
IN WITNESS WHEREOF, the parties have executed this Agreement as of the date
first written above.
EXECUTIVE XXXX XXX CORPORATION
/s/ Xxxx X. Xxxxx By: /s/ Xxxx X. Xxxx
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Xxxx X. Xxxxx Xxxx X. Xxxx
Senior Vice President - Human Resources
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EXHIBIT A
RELEASE
Xxxx Xxx Corporation (the "Company") and Xxxx X. Xxxxx ("Executive") enter
into this Release (this "Release") on the 31st day of December, 2001.
W I T N E S S E T H
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WHEREAS, the Company and Executive are parties to a Consulting and
Retirement Agreement dated February 1, 2000 (the "Agreement");
WHEREAS, as a condition for the receipt of certain benefits to be paid
following the date of this Release (the "Benefits") under the Agreement,
Executive has agreed to execute this Release.
NOW THEREFORE, in consideration of the covenants and mutual promises herein
contained, it is agreed as follows:
(a) Executive on behalf of himself, his heirs, executors, administrators
and assigns, does hereby knowingly and voluntarily release, acquit and forever
discharge the Company and any affiliates, legal representatives, successors,
assigns and past, present and future directors and officers (collectively, the
"Released Parties") from and against any and all charges, complaints, claims,
cross-claims, third-party claims, counterclaims, contribution claims,
liabilities, obligations, promises, agreements, controversies, damages, actions,
causes of action, suits, rights, demands, costs, losses, debts and expenses of
any nature whatsoever, known or unknown, suspected or unsuspected, foreseen or
unforeseen, matured or unmatured, which, at any time up to and including the
date thereof, exist, have existed, or may arise out of Executive's employment
with the Company or its affiliates and the conclusion thereof, which Executive,
or any of his heirs, executors, administrators and assigns and affiliates and
agents ever had, now has or at any time hereafter may have, own or hold against
any of the Released Parties. Executive acknowledges that in exchange for this
release, the Company is providing Executive with the Benefits which exceed what
Executive would have been given without this Release. By executing this Release,
Executive is waiving all claims against the Released Parties arising under
federal, state and local labor and antidiscrimination laws and any other
restriction on the right to terminate employment, including, without limitation,
Title VII of the Civil Rights Act of 1964, as amended, the Americans with
Disabilities Act of 1990, as amended, and the Illinois Human Rights Act, as
amended. Executive represents and warrants that he has not filed or initiated
any legal or equitable proceeding, or any proceeding involving a private right
of action, against any of the Released Parties and that no such proceedings have
been initiated against any of the Released Parties on his behalf regarding any
of the claims released herein. Executive will not cause or encourage any lawsuit
or any action involving a private right to be maintained or instituted against
any of the Released Parties, and he will not participate in any manner in any
such proceedings against any of the Released Parties, regarding any of the
claims released herein, except as required by law. Nothing herein shall release
any party from any obligation under the Agreement.
(b) EXECUTIVE SPECIFICALLY WAIVES AND RELEASES THE RELEASED PARTIES FROM
ALL CLAIMS EXECUTIVE MAY HAVE AS OF THE DATE EXECUTIVE SIGNS THIS RELEASE
REGARDING CLAIMS OR RIGHTS ARISING UNDER THE AGE DISCRIMINATION IN EMPLOYMENT
ACT OF 1967, AS AMENDED, 29 U.S.C. Section 621 ("ADEA"). EXECUTIVE FURTHER
AGREES: (A) THAT EXECUTIVE'S WAIVER OF RIGHTS UNDER THIS RELEASE IS KNOWING AND
VOLUNTARY AND IN COMPLIANCE WITH THE OLDER WORKER'S BENEFIT PROTECTION ACT OF
1990; (B) THAT EXECUTIVE UNDERSTANDS THE TERMS OF THIS RELEASE; (C) THAT CERTAIN
BENEFITS CALLED FOR IN THE AGREEMENT TO BE PAID FOLLOWING THE DATE OF THIS
RELEASE WOULD NOT BE PROVIDED TO ANY EXECUTIVE TERMINATING HIS OR HER EMPLOYMENT
WITH THE COMPANY WHO DID NOT SIGN A RELEASE SIMILAR TO THIS RELEASE, THAT SUCH
BENEFITS WOULD NOT HAVE BEEN PROVIDED HAD EXECUTIVE NOT SIGNED THIS RELEASE, AND
THAT SUCH BENEFITS ARE IN EXCHANGE FOR THE SIGNING OF THIS RELEASE; (D) THAT
EXECUTIVE HAS BEEN ADVISED IN WRITING BY THE COMPANY TO CONSULT WITH AN ATTORNEY
PRIOR TO EXECUTING THIS RELEASE; (E) THAT THE COMPANY HAS GIVEN EXECUTIVE A
PERIOD OF AT LEAST TWENTY-ONE (21) DAYS WITHIN WHICH TO CONSIDER THIS RELEASE;
(F) THAT EXECUTIVE REALIZES THAT FOLLOWING EXECUTIVE'S EXECUTION OF THIS
RELEASE, EXECUTIVE HAS SEVEN (7) DAYS IN WHICH TO REVOKE THIS RELEASE BY WRITTEN
NOTICE TO THE UNDERSIGNED, AND (G) THAT THIS RELEASE SHALL BE VOID AND OF NO
FORCE AND EFFECT IF EXECUTIVE CHOOSES TO SO REVOKE, AND IF EXECUTIVE CHOOSES NOT
TO SO REVOKE, THAT THIS RELEASE THEN BECOMES EFFECTIVE AND ENFORCEABLE.
(c) To the maximum extent permitted by law, Executive covenants not to xxx
or to institute or cause to be instituted any action in any federal, state, or
local agency or court against any of the Released Parties regarding any of the
claims released in this Release. Notwithstanding the foregoing, nothing herein
shall prevent Executive or any of the Released Parties from instituting any
action required to enforce the terms of the Agreement and this Release. In
addition, nothing herein shall be construed to prevent Executive from enforcing
any rights Executive may have under the Employee Retirement Income Security Act
of 1974.
XXXX XXX CORPORATION EXECUTIVE
By:
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Name: Xxxx X. Xxxxx
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Title:
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