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EXHIBIT 10.23
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Xxxxxxx X. Xxxxxx
Vice President Human Resources
X.X. Xxxxx & Co.
Xxx Xxxx Xxxxxx Xxxx
Xxxx Xxxxx, XX 00000-0000
February 12, 1996
Xx. Xxxx-Xxxxx Xxxxx
X. X. Xxxxx & Co.
Xxx Xxxx Xxxxxx Xxxx
Xxxx Xxxxx, XX 00000
Dear Xxxx-Xxxxx:
This letter outlines the arrangements and understanding relating to
your retirement as Executive Vice President of X. X. Xxxxx & Co. ("Company").
1. You will retire effective February 29, 1996 and, effective as of that
date, resign your position as Executive Vice President of the Company and
all other positions you hold with subsidiaries and affiliates of the
Company.
2. Following your retirement on February 29, 1996, you will be entitled to
the compensation and benefits set forth below in accordance with and
subject to the following terms:
A. INCENTIVE COMPENSATION
You will be considered for an annual incentive compensation award for
1995 based on the financial performance of Grace Packaging and your
individual performance. Your 1995 award, which is subject to Board
approval, will be paid to you in March 1996.
B. EXECUTIVE SALARY PROTECTION PLAN AND SPLIT-DOLLAR LIFE INSURANCE PLAN
Your death benefit coverage under the Executive Salary Protection Plan
shall cease on March 31, 1996, while your disability coverage under that
Plan will cease on February 29, 1996, in accordance with the terms of
that Plan. Your participation in the Split-Dollar Life Insurance Plan
will cease on July 31, 1996, although you may purchase the policy by
reimbursing the Company for the premiums paid by the Company for that
policy on your behalf through the date of your retirement. Estimated
premiums paid by the Company through July 31, 1996 are expected to total
approximately $297,853 for four policy years. Your death benefit
coverage is $800,000.
C. LONG-TERM INCENTIVE PLAN
Your participation in the Company's Long-Term Incentive Plan for the
1993-95, 1994-96 and 1995-97 Performance Periods will vest and be paid to
you at the same time as other participants. While you will participate
for the full 1993-95 cycle, your awards for 1994-96 and 1995-97 will be
prorated as of your February 29, 1996 retirement date.
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D. STOCK OPTIONS
All of your stock options, which cover 168,000 shares as of January 9,
1996, are fully vested. Subject to SEC requirements and restrictions (as
to which you should consult Xxx Xxxx), you will be free to exercise your
stock options and to sell the shares acquired on exercise following your
retirement on February 29, 1996. After your retirement, you will have a
three-year grace period during which you may exercise your options.
E. SAVINGS AND INVESTMENT PLAN
Following your retirement, you may elect to take a lump sum distribution
under the Savings and Investment Plan, defer your distribution until age
70 1/2 or elect to begin receiving installment payments over a period of
up to 10 years, in accordance with the terms of the Plan. Your S&I
balance as of January 10, 1996 was $163,263.28. In March 1996 you will
be eligible to receive your Savings & Investment Replacement payment for
1995 in an amount estimated to be $17,550. As you know, you elected to
defer this amount, and it will be paid out in a lump sum, according to
your election.
F. In accordance with the arrangement between you and the Company dated
December 8, 1995, all of your deferred compensation balances totaling
$564,068.81 as of December 30, 1995, will be consolidated into one
balance and paid to you in one lump sum on August 31, 1996, along with
earnings credited through that date.
G. POST-RETIREMENT MEDICAL COVERAGE
You and your dependents will have medical coverage as of March 1, 1996
under the Swiss medical system.
H. PENSIONS
Your active participation in the Grace A.G. Wallisallen Pension Plan
("Swiss Pension Plan") will continue until your retirement date of
February 29, 1996. Your benefit payments from the Swiss Pension Plan
will be paid in accordance with the provisions of that Plan commencing as
of your retirement date. Your benefits from the Swiss Pension Plan will
be based on all of your service with the Company, including your service
in the United States. Your benefits from the Swiss Pension Plan (reduced
by the benefits payable to you from the French Repartition system) will
be:
Lump sum payment 3/1/96 SFr. 2,737,062.00
Retirement pension 3/1/96 SFr. 174,000.00 per annum
Retiree's child pension 8/1/96 SFr. 37,250.40 per annum
You are not entitled to receive payments from the Company's Third Country
National Plan as benefits under such Plan, with your agreement, were
replaced by your participation in the Swiss Pension Plan.
I. PERQUISITES
You may continue to use your Company-provided leased car through August
31, 1996 and receive reimbursement for Company-provided financial
counseling expenses incurred through August 31, 1996. You will be
provided with the services of Ernst & Young in the preparation and filing
of your 1996 U.S. tax return(s).
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J. UNUSED VACATION PAYMENT
You are entitled to paid vacation aggregating not less than five weeks
during 1996. You will be entitled to payment for any unused vacation
time in accordance with Company policy at the time of your retirement on
February 29, 1996, including up to a maximum of ten days, if applicable,
carried over from 1995.
K. HOUSING LOAN
Your Company-provided housing loan in the amount of $400,000 will be
repaid by you upon the sale of your home or by December 31, 1996, if
sooner.
L. REPATRIATION
The cost of your move to Switzerland and assistance with the sale of your
home in Florida will be provided as described in your letter agreement
with the Company dated March 1, 1995.
This letter summarizes all of the compensation and benefit
arrangements in which you participate as they apply to you at retirement. If
you have any questions, please contact me.
Xxxx-Xxxxx, I extend my very best wishes to you and your family upon
your retirement.
Sincerely,
/s/ Xxxxxxx X. Xxxxxx
cc: X. X. Xxxxxxxx
X. X. Xxxxxxx
