EXHIBIT 10.07
RETIREMENT AND CONSULTING AGREEMENT
THIS RETIREMENT AND CONSULTING AGREEMENT is entered into as of December
7, 2001, by and between Xxxxxxx X. Xxxxxxxxxx, Xx. ("Xx. Xxxxxxxxxx") and
Xxxxxxx Chemical Company (the "Company").
WHEREAS, Xx. Xxxxxxxxxx has served for many years as the Chief
Executive Officer and Chairman of the Board of Directors of the Company; and
WHEREAS, Xx. Xxxxxxxxxx desires to retire from active employment with
the Company effective as of December 31, 2001; and
WHEREAS, Xx. Xxxxxxxxxx has agreed to provide advice and assistance to
the Company as requested on a consulting basis through December 31, 2004;
THEREFORE, in consideration of the mutual covenants and agreements
described below, and for other good and valuable consideration, the receipt and
sufficiency of which are acknowledged, Xx. Xxxxxxxxxx and the Company agree as
follows:
1. RETIREMENT. Xx. Xxxxxxxxxx hereby confirms his previously
announced intention to retire from active employment with the Company effective
as of December 31, 2001 (the "Retirement Date"). The Company hereby accepts Xx.
Xxxxxxxxxx'x retirement from active employment and his resignation as a director
and officer of the Company, effective as of the Retirement Date.
2. CONSULTING SERVICES. In recognition of the significant value
to the Company of the availability of a person of Xx. Xxxxxxxxxx'x experience,
the Company hereby engages Xx. Xxxxxxxxxx as a consultant for the period from
December 31, 2001 through December 31, 2004 (the "Consulting Period"). Xx.
Xxxxxxxxxx hereby agrees during the Consulting Period to consult with management
of the Company as requested from time to time. In consideration of his
consulting services hereunder, the Compensation and Management Development
Committee of the Board of Directors of the Company has granted to Xx. Xxxxxxxxxx
an option to acquire 100,000 shares of common stock of the Company and an award
of 30,000 shares of restricted stock of the Company.
3. POST-RETIREMENT BENEFITS.
(a) Incentive Awards. Any stock options, restricted stock awards
or other incentive awards that are held by Xx. Xxxxxxxxxx as of the Retirement
Date shall survive the Retirement Date in accordance with their respective
terms.
(b) Vested Benefits. To the extent not theretofore paid or
provided, the Company shall timely pay or provide to Xx. Xxxxxxxxxx any other
amounts or benefits required to be paid or provided or which he is eligible to
receive under any plan, program, policy or practice or contract or agreement of
the Company, including, without limitation, retirement plans of the Company.
(c) Additional Benefits. In recognition of Xx. Xxxxxxxxxx'x
significant tenure with the Company, and in consideration of his continuing
compliance with the Restrictive Covenants in Section 4 hereof, the Company will
provide Xx. Xxxxxxxxxx with the following additional post-retirement benefits.
(i) For three years after the Retirement Date, the
Company will provide financial counseling services to Xx. Xxxxxxxxxx at a level
consistent with such services provided to other retired executives of the
Company.
(ii) For three years after the Retirement Date, the
Company will continue to pay the cost and monitoring fees for the home security
systems currently installed in Xx. Xxxxxxxxxx'x residences.
(iii) For three years after the Retirement Date, Xx.
Xxxxxxxxxx will be provided personal umbrella liability insurance coverage at
the level of coverage currently provided to him.
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(iv) Until his 70th birthday, the Company will provide Xx.
Xxxxxxxxxx access to secretarial assistance and information technology equipment
and services which will enable him to effectively handle his consulting services
under this agreement and external board responsibilities.
(v) During his lifetime, the Company will continue to
provide Xx. Xxxxxxxxxx access to the Company's Executive Health Plan with the
Mayo Clinic or an equivalent program used by the Company.
(vi) Effective as of December 31, 2001, the Company will
transfer to Xx. Xxxxxxxxxx the membership in the Virginian Golf Club which is
currently in Xx. Xxxxxxxxxx'x name, after which time Xx. Xxxxxxxxxx will be
responsible for paying the continuing annual membership fee. In exchange, Xx.
Xxxxxxxxxx will provide privileges under this membership to the Company for
corporate entertainment purposes for a period of three years after the
Retirement Date.
(vii) If requested by Xx. Xxxxxxxxxx on or before December
31, 2001, the Company will place the house on 0000 Xxxxxxxx Xxxxx, Xxxxxxxxx,
Xxxxxxxxx, in the Company's Home Purchase Plan.
4. RESTRICTIVE COVENANTS.
(a) General. Xx. Xxxxxxxxxx and the Company understand and agree
that the purpose of the provisions of this Section 4 is to protect legitimate
business interests of the Company, and is not intended to impair or infringe
upon Xx. Xxxxxxxxxx'x right to work, earn a living, or acquire and possess
property from the fruits of his labor. Xx. Xxxxxxxxxx hereby acknowledges that
he has received good and valuable consideration for the post-employment
restrictions set forth in this Section 4 in the form of the post-retirement
benefits provided for herein and the grant of stock options and other incentive
awards from time to time by the Company. Xx. Xxxxxxxxxx hereby further
acknowledges that the post-employment restrictions set forth in this Section 4
are reasonable and that they do not, and will not, unduly impair his ability to
earn a living after the Retirement Date. Therefore, subject to the limitations
of reasonableness imposed by law, Xx. Xxxxxxxxxx agrees to the restrictions set
forth in this Section 4.
(b) Definitions. The following capitalized terms used in this
Section 4 shall have the meanings assigned to them below, which definitions
shall apply to both the singular and the plural forms of such terms:
"Company" as used in this Section 4 shall refer to the Company
and its successors.
"Competitive Services" means the businesses in which the
Company is engaged as of the Retirement Date, including without limitation, the
manufacture and supply of specialty chemicals and plastics, including the
coatings, adhesives, specialty polymers and inks, performance chemicals and
intermediates and specialty plastics businesses of the Company and the
continuation of the Company's strategic initiatives in less capital intensive
businesses and the manufacture and supply of polyethylene terephthalate
polymers, or PET polymers, acetate fibers and polyethylene products.
"Person" means any individual or any corporation, partnership,
joint venture, limited liability company, association or other entity or
enterprise.
"Protected Customers" means any Person to whom the Company has
sold its products or services or solicited to sell its products or services
during the twelve (12) months prior to the Retirement Date.
"Restrictive Covenants" means the restrictive covenants
contained in Section 4(c) hereof.
(c) Restrictive Covenants.
(i) Confidentiality. Xx. Xxxxxxxxxx agrees that he will
not at any time communicate or disclose to any unauthorized person, without the
written consent of the Company, any proprietary processes of the Company or any
of its subsidiaries or other confidential information concerning their business,
affairs, products, suppliers or customers which, if disclosed, would have a
material adverse effect upon the business or operations of the Company and its
subsidiaries, taken as a whole. It is understood, however, that the obligations
of this Section 4(c)(i) shall not apply to the extent that the aforesaid matters
(1) are disclosed in circumstances where Xx. Xxxxxxxxxx is legally required to
do so, or (2) become generally known to and available for use by the public
otherwise than by Xx. Xxxxxxxxxx'x wrongful act or omission.
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(ii) Restriction on Relationships with Protected
Customers. Xx. Xxxxxxxxxx understands and agrees that the relationship between
the Company and each of its Protected Customers constitutes a valuable asset of
the Company and may not be converted to Xx. Xxxxxxxxxx'x own use. Accordingly,
Xx. Xxxxxxxxxx hereby agrees that, during the Consulting Period, he will not,
without the prior written consent of the Company, directly or indirectly, on his
own behalf or as a principal, owner, partner, shareholder, joint venturer,
investor, member, trustee, director, officer, manager, employee, agent,
representative or consultant of any Person, solicit, divert, take away or
attempt to solicit, divert or take away a Protected Customer for the purpose of
providing or selling Competitive Services.
(iii) Other Covenants. Any additional restrictive covenants
that are contained in any other agreement between Xx. Xxxxxxxxxx and the Company
shall survive the Retirement Date and be enforceable in accordance with their
terms, including without limitation (i) the forfeiture provisions applicable to
any stock options or other incentive awards held by Xx. Xxxxxxxxxx that were
granted under the Company's 1994 Omnibus Long-Term Compensation Plan or 1997
Omnibus Long-Term Compensation Plan or any agreement evidencing such awards, and
(ii) the terms of that certain Special Employees' Agreement, dated as of June 6,
1960, between Xx. Xxxxxxxxxx and the Company, the terms of which covenants are
deemed to be incorporated herein by reference.
(d) Enforcement of Restrictive Covenants.
(i) Rights and Remedies Upon Breach. In the event Xx.
Xxxxxxxxxx breaches, or threatens to commit a breach of, any of the provisions
of the Restrictive Covenants, the Company shall have the right and remedy to
enjoin, preliminarily and permanently, Xx. Xxxxxxxxxx from violating or
threatening to violate the Restrictive Covenants and to have the Restrictive
Covenants specifically enforced by any court of competent jurisdiction, it being
agreed that any breach or threatened breach of the Restrictive Covenants would
cause irreparable injury to the Company and that money damages would not provide
an adequate remedy to the Company. Such right and remedy shall be in addition
to, and not in lieu of, any other rights and remedies available to the Company
at law or in equity.
(ii) Severability of Covenants. Xx. Xxxxxxxxxx
acknowledges and agrees that the Restrictive Covenants are reasonable and valid
in time and scope and in all other respects. The covenants set forth in this
Agreement shall be considered and construed as separate and independent
covenants. Should any part or provision of any covenant be held invalid, void or
unenforceable in any court of competent jurisdiction, such invalidity, voidness
or unenforceability shall not render invalid, void or unenforceable any other
part or provision of this Agreement. If any portion of the foregoing provisions
is found to be invalid or unenforceable by a court of competent jurisdiction
because its duration, the territory, the definition of activities or the
definition of information covered is considered to be invalid or unreasonable in
scope, the invalid or unreasonable term shall be redefined, or a new enforceable
term provided, such that the intent of the Company and Xx. Xxxxxxxxxx in
agreeing to the provisions of this Agreement will not be impaired and the
provision in question shall be enforceable to the fullest extent of applicable
laws.
5. SUCCESSORS AND ASSIGNS. This Agreement shall inure to the
benefit of and be enforceable by Xx. Xxxxxxxxxx'x personal or legal
representatives, executors, administrators, successors, heirs, distributees,
devisees, and legatees. This Agreement shall also be binding upon and inure to
the benefit of any successor to the Company by reason of any merger,
consolidation, sale of assets, spin-off, split-up, dissolution, debt foreclosure
or other reorganization of the Company.
6. PRIOR AGREEMENTS. Xx. Xxxxxxxxxx and the Company agree that
from and after the Retirement Date, this Agreement supersedes and terminates
that certain Severance Agreement between Xx. Xxxxxxxxxx and the Company, dated
as of December 8, 1995, as amended (the "Severance Agreement") and any and all
other prior employment, separation or similar agreements, oral or written,
between Xx. Xxxxxxxxxx and the Company, and that the mutual benefits and
obligations of each of the parties are solely as provided for and contained in
this Agreement. The parties agree that from and after the Retirement Date, the
Company and its affiliates owe no additional amounts to Xx. Xxxxxxxxxx, other
than those amounts set forth or referenced in this Agreement, including the
awards referenced in Section 3(a) hereof and the vested benefits referenced in
Section 3(b) hereof.
7. CERTAIN ACKNOWLEDGMENTS. Xx. Xxxxxxxxxx and the Company
acknowledge that the payments and benefits described in this Agreement may be
taxable income, and each party covenants to comply with all federal and
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state income and employment tax requirements, including all reporting and
withholding requirements, relating thereto. Xx. Xxxxxxxxxx acknowledges that the
payments and benefits described in this Agreement exceed those which he would
normally receive upon termination of his employment relationship and that such
additional payments and benefits are in exchange for his signing this Agreement.
8. MISCELLANEOUS. This Agreement, and the rights and obligations
of the parties hereto, shall be governed by and construed in accordance with the
laws of the State of Tennessee. If any provision hereof is unenforceable, such
provision shall be fully severable, and this Agreement shall be construed and
enforced as if such unenforceable provision had never comprised a part hereof,
the remaining provisions hereof shall remain in full force and effect, and the
court construing the agreement shall add as a part hereof a provision as similar
in terms and effect to such unenforceable provision as may be enforceable, in
lieu of the unenforceable provision. No representations, inducements, promises
or agreements, oral or otherwise, which are not embodied herein, shall be of any
force or effect.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
Xxxxxxx X. Xxxxxxxxxx, Xx.
By:
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X. Xxxxxxxx Xxxxxxx
Vice President, Human Resources and Quality
By:
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Xxx Xxx
Chairman, Compensation and Management
Development Committee
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