Exhibit 10(b)
May 1, 1999
Mr. Xxxxxxxx X.X. xx Xxxx
000 Xxxxx Xxxx
Xxxxxx Xxxxxx, XX 00000
Dear Xx. xx Xxxx:
This letter sets forth the agreement ("Agreement") governing your
continued employment by Xxxxxx-Xxxxxxx Company (the "Company").
The Company's Board of Directors, at a meeting held on April 27,
1999, has authorized the Company to enter into this revision of
the agreement entered into with you as of July 30, 1991, in order
to be assured that the Company will receive the continuing
benefit of your wide knowledge of the Company's operations and
your experience in the Company's business which you have gained
as an employee of the Company since 1988 and as President of the
Company since 1991. Additionally, this Agreement is intended to
provide you with the level of job security and reasonable
compensation which in the judgment of the Board of Directors is
commensurate with the increased duties and responsibilities which
you will be expected to fulfill during the term of this
Agreement.
In consideration of the agreements hereinafter contained, you and
the Company agree as follows:
I. TERM AND POSITION
a.Active Employment Term: The Active Employment Term shall be the
period of time commencing May 1, 1999 and ending on the earlier
of 1) your retirement on March 1, 2010, or 2) the occurrence of
an event described in Article III hereof.
b. Position: During the Active Employment Term, the Company
shall employ you and you shall serve as Chief Executive Officer
of the Company with responsibility for the general and active
management of the Company's business in accordance with the
Company's By-Laws and subject to the direction and control of the
Board of Directors, or in such other executive capacity as may be
agreed to by you and the Company. You shall devote your full
time and best efforts to the performance of such duties.
c. Consultancy: Notwithstanding the provisions of the preceding
Clause I.b., it is expressly understood and agreed that at the
option of the Board of Directors, and upon written notice, you
shall relinquish the position of Chief Executive Officer, or such
other executive capacity in which you may then be serving, and
you shall instead be employed as an employee-consultant for the
remainder of the Active Employment Term. In such capacity as
employee-consultant, you shall perform such services at such
times and in such places as may reasonably be required by the
Chairman of the Board and the Board of Directors. You need not
accept any assignment that would require your absence from Xxxxxx
County for more than four (4) consecutive weeks. Your expenses
incurred in performing your services shall be reimbursed by the
Company in the same manner and to the same extent as are the
expenses of the Company's senior executive employees.
d. Retirement: You shall retire on March 1, 2010, unless you
have previously done so.
e. Resignations: Upon the earlier of 1) your becoming an
employee-consultant pursuant to Clause I.c., or 2) the expiration
of the Active Employment Term, you shall submit to the Secretary
of the Company your resignations from the Board of Directors,
committees, as an officer of the Company and all positions with
affiliated companies, effective as of the date of the earlier of
such events specified in this Clause I.e.
f. Restrictive Covenant: During the Active Employment Term, you
shall devote your full time and best efforts to the performance
of your duties under this Agreement, and you shall not, directly
or indirectly, take any action or become involved in any endeavor
which is, in the sole judgment of the Board of Directors, not in
the best interests of the Company. Furthermore, notwithstanding
any other provision of this Agreement, for a period of one (1)
year after the expiration of the Active Employment Term, you
agree that you shall not, without the prior written consent of
the Company, own more than 5% of, accept employment with, or lend
your name or assistance to any venture, enterprise, company,
business or endeavor which is directly or indirectly in
competition with the Company or its affiliated companies in
fields in which the Company and its affiliated companies have
annual sales of more than ten million dollars ($10,000,000).
During such one (1) year period, you shall receive payment from
the Company at a rate of 75% of your basic annual salary in
effect at the termination of your employment with the Company,
payable in conformity with the Company's policies, practices and
procedures; provided, however, that the amount of such payment
shall be reduced by the amount of retirement income, if any,
which would have been payable to you from the Xxxxxx-Xxxxxxx
Retirement Plan and the Xxxxxx-Xxxxxxx Supplemental Pension
Income Plan had you applied for such retirement income at the
commencement of such one (1) year period. Notwithstanding the
foregoing, no payment shall be made to you under the provisions
of this Clause I.f. after Xxxxx 0, 0000, (xx) for any period
during which you may be serving as a consultant to the Company,
or (iii) for any period during which you are receiving severance
payments from the Company (or would be receiving severance
payments but for your election of a lump sum severance payment).
Further, the Company may grant to you a release from this
restrictive covenant, in which event no payment shall be due
under the provisions of this Clause I.f.
II. BASIC SALARY AND OTHER COMPENSATION
a. Salary: For your services to the Company pursuant to Clauses
I.b. and I.c. of this Agreement, you shall be paid a basic salary
at a rate of Nine Hundred Thirty Thousand Dollars ($930,000) per
year, payable in conformity with the Company's policies,
practices and procedures. In no event shall your basic salary
(as increased in accordance with the preceding sentence) be
reduced.
You will also be eligible to participate in incentive and
deferred compensation programs which may be in effect and for
which executive officers may be eligible while you are performing
services pursuant to Clause I.b. of this Agreement, including the
Company's Incentive Compensation Plan.
b. Withholding: Payments under this Agreement shall be subject
to such withholding taxes as may be required by applicable law.
x. Xxxxxxxxx: In the event that your employment with the Company
terminates prior to your retirement on March 1, 2010, under
circumstances which would entitle you to severance payments under
the Company's severance policies or plans (including, but not
limited to, the Executive Severance Plan of the Company), the
Company shall provide you with pay and other benefits in
accordance with such policies and plans. The provisions of this
Clause II.c. are not intended to result in the duplication of
benefits which are otherwise payable under the severance policies
and plans of the Company. Termination of this Agreement, as
provided herein, shall not extinguish your entitlement to
severance in accordance with this Clause II.c.
d. Deferral of Basic Salary: You shall be allowed to defer any
amount of basic salary in excess of one million dollars ($1
million) or such other amount as shall be determined by the
Compensation Committee of the Board of Directors. All such
deferred amounts shall be credited to your deferred bonus account
in the Incentive Compensation Plan and shall be subject to the
terms and conditions of said plan, including without limitation,
the provision regarding accrual of interest.
e. Distributions from Deferred Bonus Account: Distributions from
your deferred bonus account shall be made over a period of
fifteen (15) years unless (i) you elect otherwise either (A) at
least one year prior to the commencement of distributions or (B)
at any time with the concurrence of the Compensation Committee of
the Board of Directors, or (ii) your employment is terminated for
misconduct, as determined by the Compensation Committee, in which
case the distribution schedule shall be established by the
Compensation Committee. Except as set forth in this Agreement,
all matters relating to your deferred bonus account shall be
governed by the provisions of the Incentive Compensation Plan.
III. TERMINATION
a. Disability: If you should, in the reasonable judgment of the
Board of Directors of the Company, come under such disability as
would prevent you from performing substantially all of your major
duties under this Agreement, and if such disability should be
present for a total of six months out of any twelve-month period
commencing with the start of such disability, the Company may
terminate your employment by notice in writing to you. Upon such
termination, you shall receive the benefits to which you are
entitled under the Salary Continuance Policy and Long-Term
Disability Benefits Plan of the Company. The provisions of this
Clause III.a. are not intended to result in the duplication of
disability benefits which are otherwise payable under the
policies and plans of the Company.
b. Death: This Agreement is personal to you and the Company's
obligations hereunder shall terminate in the event of your death,
except for the applicable provisions of Article IV "Death
Benefits."
c. Breach: The party not in breach may terminate its obligations
under this Agreement if either you or the Company commits a
material breach of this Agreement and fails to remedy such breach
within thirty (30) days following receipt of written notice from
the other party specifying the nature of the breach and
specifically referencing this Clause III.c.
d. Detriment to Company: The Company may terminate its
obligations under this Agreement upon thirty (30) days' written
notice if, in the reasonable judgment of the Company's Board of
Directors, you are voluntarily associated with any act or
omission which might reflect unfavorably on the Company or impair
your ability to perform effectively your duties under this
Agreement.
e. Other Employment: If you accept full-time employment with
another employer, the Company's obligations under this Agreement
shall terminate as of the date you become so employed.
f. Resignation: If you resign from the employ of the Company,
the Company's obligations under this Agreement shall terminate as
of the date of such resignation.
IV. DEATH BENEFITS
If you should die during the Active Employment Term, the Company
shall pay or cause to be paid to your widow the Spouse's benefit
she is entitled to under both the Retirement Plan of the Company
and the Supplemental Pension Income Plan of the Company. The
provisions of this Article IV are not intended to result in the
duplication of benefits which are otherwise payable under the
Retirement Plan and Supplemental Pension Income Plan of the
Company.
V. OTHER BENEFITS
a. During Employment: While you are employed by the Company
under Clauses I.b. and I.c. of this Agreement, nothing herein
shall prevent your participating, if you so elect and are
eligible therefor, in any plans or benefits now in effect or
hereafter adopted or amended by the Company (including, but not
limited to, the following plans: Accidental Death and
Dismemberment, Medical, Dental, Group Life Insurance, Incentive
Compensation, Long Term Disability, Retirement and Supplemental
Pension, Salary Continuance, Savings and Stock and Excess
Savings, 1996 Stock Plan, Business Travel Insurance and Executive
Severance), or your having the benefit of rights of
indemnification or reimbursement in favor of officers, directors
or employees of the Company or any of its affiliated companies
(including, but not limited to, the benefit of any excise tax
reimbursement agreement), or your receiving other appropriate
recognition of the status of such office or position as you may
occupy with the Company.
b. Upon Retirement: Upon your retirement, you shall be entitled
to participate in the benefit plans in effect for employees who
retire at that time.
c. Stock Options: Stock options granted to you after 1999 shall
be exercisable for the full term thereof unless your employment
is terminated for misconduct, as determined by the Compensation
Committee of the Board of Directors, in which event the options
shall be forfeited.
VI. GENERAL PROVISIONS
a. Assignments: This Agreement shall inure to the benefit of and
be binding on the Company, its corporate successors and assigns.
This Agreement is personal to you and may not be assigned or
encumbered. This Agreement shall be binding on you, your heirs,
legal representatives, executors and administrators.
b. Corporate Policies: You specifically agree to be bound by and
to observe all of the applicable policies of the Company during
the Active Employment Term to the extent that such policies do
not conflict with the terms and provisions of this Agreement.
c. Notices: All notices, requests or demands to be given by
either party to the other, under the provisions of this
Agreement, shall be delivered or mailed by Registered or
Certified letter, if to the Company, addressed to: General
Counsel, Xxxxxx-Xxxxxxx Company, 000 Xxxxx Xxxx, Xxxxxx Xxxxxx,
Xxx Xxxxxx 00000, and if to you, to the address given on the
first page of this Agreement or to such other address as either
party may, from time to time, by written notice, designate as its
address for the purposes of this Agreement and shall be deemed to
have been received on the earlier of actual receipt or on the
fifth day following posting of any such letter.
d. Entire Agreement: The terms and provisions contained in this
Agreement constitute the entire agreement between you and the
Company relating to your employment by the Company or its
affiliated companies and shall supersede all previous
communications, representations, agreements or understandings,
either oral or written, between you and the Company or its
affiliated companies with respect to your employment by the
Company or its affiliated companies, including, but not limited
to, the agreement by and between you and the Company as of July
30, 1991; and no agreement or understanding varying or extending
this Agreement or waiving any right or obligation under this
Agreement shall be binding upon either party unless it is in a
writing wherein this Agreement is specifically referenced which
has been signed by you and by a duly authorized officer or
representative of the Company.
e. Construction: This Agreement shall be governed by and
construed in accordance with the procedural and substantive laws
(other than the provisions relating to conflict of laws) of the
State of New Jersey.
f. Severability: If and to the extent that any court of
competent jurisdiction holds any provision (or any part thereof)
of this Agreement to be invalid or unenforceable, such holding
shall in no way affect the validity of the remainder of this
Agreement.
g. Continuation of Obligations: Notwithstanding the termination
of the obligations of one party under this Agreement, the
obligations of the other party hereto shall continue, except as
expressly provided herein.
h. Nondisclosure: Notwithstanding anything contained herein,
your obligations under any existing nondisclosure or
confidentiality agreements with the Company shall continue.
i. Counterparts and Headings: This Agreement may be executed in
two or more counterparts, each of which shall be deemed an
original and all of which together shall constitute one and the
same instrument. All headings in this Agreement are inserted for
convenience of reference only and shall not be deemed to affect
the meaning or interpretation of this Agreement.
If you accept the terms and provisions of this Agreement and
agree to be bound thereby, please execute both copies of this
Agreement (which is sent to you in two (2) exemplars, each a
duplicate original) at the place indicated and return one copy to
the Company.
Very truly yours,
XXXXXX-XXXXXXX COMPANY
By:
Xxxxxxx X. Xxxx
Vice President,
Human Resources
Agreed and Accepted this
3rd day of May, 1999
Xxxxxxxx X.X. xx Xxxx
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