EXHIBIT 10.1
RESIGNATION AND SEPARATION AGREEMENT
THIS RESIGNATION AND SEPARATION AGREEMENT ("Agreement") is made as of
this 10th day of August 2003, between XXXXX X. XXXXXXX ("Executive") and XXXXXXX
& XXXXXX CORPORATION ("Employer").
I. Executive's last day of work was August 8, 2003 (the "Termination
Date"). Executive has resigned as a director and as the President and
Chief Executive Officer of the Employer and as a director or officer of
any affiliates of the Employer, and agrees that this Agreement provides
his written statement of such resignations. Employer agrees that
Executive's employment terminated on a No Cause Termination.
II. Employer is not obligated to pay Executive any compensation, benefits
or other consideration after the Termination Date except as
specifically set forth in Paragraph V.1.
III. Executive has had the opportunity to review this Agreement and has
consulted with legal counsel prior to executing this Agreement to
ascertain whether Executive has any potential rights or remedies, which
are being waived and released by Executive's execution of this
Agreement.
IV. Executive and Employer, without any admission of liability, desire to
settle with finality, compromise, dispose of, and release all claims,
demands and causes of action Executive has asserted or which Executive
could assert against Employer, whether arising out of the Executive's
Employment Agreement with Employer, describing a term of Employment
beginning January 1, 2003; the amendment to the Employment Agreement
made by letter dated April 20, 2003 (such employment agreement and
amendment together, the "Employment Agreement"); any agreement with a
predecessor to Employer; the termination of the Employment Agreement;
the employment relationship; the termination of the employment
relationship, including any right to notice thereof; or any condition
or benefit of employment or otherwise. This Agreement is not and shall
not be construed as an admission by Employer of any liability, an
admission against interest or any violation of Employer's policies or
procedures.
V. Employer and Executive further agree:
1. As consideration for this Agreement, Employer agrees to
provide Executive the compensation set forth in this Paragraph
V.1. The payments and benefits provided under this Paragraph
V.1 are made in lieu of any further payments or benefits to
Executive under the Employment Agreement, and Executive
acknowledges that the payments and benefits
provided under this Paragraph V.1 are sufficient consideration
for the release contained herein:
a. Employer shall pay Executive Four Hundred Thousand
Dollars ($400,000) contemporaneous with the
expiration of the seven-day revocation period
described in Paragraph 9 below.
b. Base salary continuation for a period of eighteen
(18) months from the Termination Date ("Payment
Period") at the annual rate of Seven Hundred and
Fifty Thousand Dollars ($750,000) in accordance with
the Employer's customary payroll payment dates,
subject to all applicable tax or withholding
requirements.
c. A bonus settlement payment to be paid at the same
time as the payment under provision a. above in an
amount determined as Executive's average annual bonus
for the years 2000, 2001, and 2002, using the actual
amounts of such bonuses determined from appropriate
payroll records of Employer or Executive's former
employer for the years 2000 and 2001 and using Two
Hundred Thousand dollars ($200,000) as the amount of
the 2002 bonus in arriving at such average,
multiplied by seven-twelve's (7/12) to prorate the
payment for whole months served in 2003. The bonus
settlement payment shall be subject to all applicable
tax or withholding requirements. For illustration
purposes only, assume that (1) the former employer
paid Executive $200,000 in 2000 and 2001, and
Executive received a bonus of 40% of that amount or
$96,000 in each year, and (2) assume the $200,000 for
2002 as described above, then the average bonus would
be:
YEAR BONUS COMPUTATION BONUS
---- ----------------- -----
2000 $200,000 x 40% $ 96,000
2001 $200,000 x 40% $ 96,000
2002 Agreed amount $ 200,000
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Total $ 392,000
Divided by Number of Years 3
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Hypothetical Average bonus $ 130,667
d. Continued participation in the benefit plans ,
programs and arrangements of Employer for executive
employees until the earlier of::
1. the end of the Payment Period, or
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2. the date on which Executive becomes eligible
to receive any benefits under any plan or
program of any other employer.
Employer will pay the employer-portion of the such
coverages. Executive will be required to pay the
Executive-portion such coverages. The
Executive-portion of the premiums will be billed to
the Executive on a monthly basis. If Employer is not
able to provide coverage under the existing plans,
Executive will be paid cash in the amount of the
Employer's portion of the premium cost. COBRA
coverage will be available at Executive's cost after
the Payment Period
e. Employer shall pay Executive a benefit under the
Supplemental Retirement Income Plan ("SRIP") as if he
were eligible for Retirement at the end of the
Payment Period with five years of service credit,
which provides 33% of Participating Employee's Total
Annual Compensation for under the table set forth in
Article IV.2. (i) of the SRIP. The average bonus
amount calculated for purposes of provision c. above
shall be included in the determination of Executive's
final compensation for purposes of such benefit
calculation. Executive may elect to receive such
payments in any form available under the SRIP,
without reduction for early commencement, with
appropriate actuarial reductions for any survivorship
form of benefit elected. For illustration purposes
only, assuming the assumptions reflected in c. above,
the payment under the SRIP would be:
Average bonus -- see paragraph c above $130,667
Base Compensation $750,000
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Total $880,667
Percentage Based on five Years of Service 33%
--
Amount subject to offset by Employer provided qualified retirement plan benefits
and social security benefits, under SRIP.:290,620
f. Employer shall pay Executive $30,000 per year,
grossed up for the Executive's income taxes, during
the Payment Period in lieu of further perquisite
reimbursements from Employer. Employer shall continue
to provide Executive with the use of the company car
through the Payment Period and will pay all costs of
maintenance and insurance associated therewith.
Employer shall pay Executive's reasonable attorney
fees in the amount of $50,000 to be paid
contemporaneous with the expiration of the seven day
period referenced in paragraph 9.
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g. All outstanding options granted to Executive shall
immediately vest and will continue to be fully
exercisable until the earlier of ninety (90) days
after the Termination Date or the original expiration
date of such options.
2. TERMINATION OF BENEFITS. Notwithstanding benefits outlined in
Paragraph V.1 above, Executive shall cease to be an active
participant under Employer's retirement and other benefit
plans pursuant to the terms of those plans, and no additional
benefits shall accrue to Executive after the Termination Date.
3. NON-COMPETITION; NON-SOLICITATION; CONFIDENTIALITY; RELEASE
CONSIDERATION.
The following covenants and remedies apply:
(a) Non-Competition. Executive shall not Compete (as
hereinafter defined) with the Employer or any of its subsidiaries or
affiliates in any way during the eighteen (18) month period following
the Termination Date (the "Restricted Period"). "Compete" means to
directly or indirectly (whether for compensation or otherwise), alone
or as an agent, principal, partner, officer, employee, trustee,
director, shareholder or in any other capacity, own, manage, operate,
join, control or participate in the ownership, management, operation or
control of, or furnish any capital to, or be connected in any manner
with, or provide any services as an employee or consultant for, any of
the following companies or their subsidiaries or affiliates: Intiers
Automotive, Inc.; Xxxx Corporation, and Xxxxxxx Controls, Inc.,
provided, however, that notwithstanding the foregoing, nothing
contained in the Agreement shall be deemed to preclude Executive from
owning not more than five percent (5%) of the aforementioned companies.
(b) Non-Solicitation. Executive covenants and agrees that he
will not, during the Restricted Period, (i) solicit, employ or
otherwise engage as an employee, independent contractor or otherwise,
any person who is or was an employee of the Employer or any of its
subsidiaries or affiliates at any time during the twelve (12) month
period immediately preceding Executive's Termination, (ii) induce or
attempt to induce any employee of the Employer or any of its
subsidiaries or affiliates to terminate such employment or (iii)
interfere with the relationship of the Employer or any of its
subsidiaries or affiliates with any person, including any person who,
at any time during the twelve (12) month period immediately preceding
Executive's Termination Date, was an employee, contractor, supplier or
customer of the Employer or any of its subsidiaries or affiliates.
(c) Confidential Information. Executive understands that in
the performance of services hereunder Executive may obtain knowledge of
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"confidential information" (as hereinafter defined) relating to the
business of the Employer (or of any of its subsidiaries or affiliates).
Executive shall not, without the prior written consent of the Board,
either during Executive's employment by the Employer or at any time
thereafter, (i) use or disclose any such confidential information
outside the Employer (or any of its subsidiary or affiliated companies)
except as otherwise required by law, (ii) publish any article with
respect thereto, (iii) except in the performance of services hereunder,
remove from the premises of the Employer, or aid in such removal, any
such confidential information or any property or material related
thereto or (iv) sell, exchange or give away or otherwise dispose of any
such confidential information now or hereafter owned by the Employer
whether or not the same shall or may have been originated, discovered
or developed by Executive. It is understood that for purposes of this
Agreement the term "confidential information" shall be construed
broadly to include all information or compilations of information which
(i) is, or was designed to be, used in the business of the Employer (or
any of its subsidiaries or affiliates) or results from its (or their)
research or development activities, (ii) is private or confidential in
that it is not generally known or available to the public and (iii) is
intended to give the Employer (or any of its subsidiaries or
affiliates) an opportunity to obtain an advantage over competitors who
do not know or use it.
(d) Cooperation. During Executive's employment by the Employer
and thereafter, Executive shall promptly notify the Employer of any
threatened, pending or completed investigation, claim, action, suit or
proceeding, whether civil, criminal, administrative or investigative
("Proceeding"), in which he may be involved, whether as an actual or
potential party or witness or otherwise, or with respect to which he
may receive requests for information, by reason of his future, present
or past association with the Employer or any of its subsidiaries or
affiliates. During the Payment Period, Executive shall cooperate fully
with the Employer and its subsidiaries and affiliates in connection
with any Proceeding at no expense to the Employer or any of its
subsidiaries or affiliates other than the reimbursement of Executive's
reasonable out-of-pocket expenses. If Executive is required to assist
Employer or any of its subsidiaries or affiliates with any Proceeding
after the Termination Date and the completion of any continuing
payments under this Agreement, Employer shall pay Executive a
reasonable per diem fee, in addition to any expense reimbursement, for
such assistance, based on Executive's annual base salary rate
immediately preceding the Termination Date. Executive shall not
disclose any confidential or privileged information in connection with
any Proceeding without the consent of the Employer and shall give
prompt notice to the Employer of any request therefore.
(e) Acknowledgement Regarding Covenants. Executive
acknowledges and agrees that the promises and restrictive covenants set
forth in this Agreement are reasonable and necessary to protect the
interests of the Employer and reasonably limited in time, scope and
territory. Executive acknowledges that, given his former position and
the information he possesses regarding the Employer and its operations,
the business of the Employer would be substantially
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and materially damaged in the event of any violation of the promises
and covenants in this paragraph 4, and the Employer shall be entitled
(in addition to any other remedy that may be available to it) to (i) a
decree or order for specific performance of any such promise or
covenant and (ii) an injunction restraining the violation or threatened
violation of any such promise or covenant. In addition, Executive shall
immediately forfeit all rights to any payments or benefits to which he
may be otherwise entitled under this Agreement in the event of a breach
of any of the covenants given in this Agreement. If Employer, not in
good faith, terminates any payments to Executive, the Employer shall
pay all costs incurred by Executive, including actual legal fees, in
connection with the recovery of any amounts due him under this
Agreement.
4. RETURN OF PROPERTY. Executive agrees to immediately return all
Employer property (and any copies of such property) of
whatsoever kind and character, including, without limitation,
keys, credit cards, documents, computers, computer software,
discs and media, policy and procedures manuals and all other
tangible or intangible property of Employer.
5. No DISPARAGEMENT. The Executive agrees not to make any oral or
written statements or otherwise engage in any act that is
intended or may reasonably be expected to harm the reputation,
business or prospects of the Employer, its officers,
directors, stockholders or employees or any persons related to
the foregoing. The Employer further agrees that its Board
members or executive officers shall not to make any oral or
written statements or otherwise engage in any act that is
intended or may reasonably be expected to harm the reputation,
business or prospects of the Executive.
6. RELEASE. Executive, for him, and his heirs, executors,
administrators, successors and assigns, hereby releases and
forever discharges Employer, its affiliates and respective
officers, directors, agents, representatives, shareholders,
employees (current and former), employee benefit plans,
successors, predecessors, assigns, and any and all other
persons, firms, corporations and other legal entities
associated with Employer (collectively referred to as the
"Released Parties"), of and from any and all claims, demands,
actions, causes of action, debts, damages, expenses, suits,
contracts, agreements, costs and liabilities of any kind,
nature or description, whether direct or indirect, known or
unknown, in law or in equity, in contract, tort or otherwise,
which Executive ever had, now has or may have against any of
the Released Parties as of the date of execution of this
Agreement, whether known or unknown, suspected or unsuspected,
or which may be based upon pre-existing acts, claims or events
occurring at any time up to the present date including, but
not limited to, claims arising under the Employment Agreement,
the SRIP, Title VII of the Civil Rights Act of 1964 or state
civil rights statutes, claims arising under the Age
Discrimination in Employment Act of 1967
("ADEA"), as amended by the Older Workers Benefit Protection
Act ("OWBPA"), claims arising under the Americans with
Disabilities Act ("ADA"), the Family and Medical Leave Act
("FMLA"), the Fair Labor Standards Act ("FLSA"), the National
Labor Relations Act ("NLRA"), the Employee Retirement Income
Security Act ("ERISA"), claims for breach of express or
implied contract, breach of promise, promissory estoppel, loss
of income, back pay, reinstatement, front pay, impairment of
earning capacity, wrongful termination, discrimination, damage
to reputation, fraud, violation of public policy, retaliation,
negligent or intentional infliction of mental or emotional
distress, intentional tort or any other federal, state or
local common law or statutory claims, and all other claims and
rights, whether in law or equity. It is the intention of the
parties that this paragraph will be construed as broadly as
possible; however, this paragraph does not include claims
arising under state workers' compensation laws, state
unemployment laws and any claims that arise after the signing
of this Agreement. This paragraph also does not affect
Executive's right to file a charge or otherwise participate in
an EEOC proceeding insofar as it is required by current EEOC
regulations. Executive understands that Employer will assert
this Agreement as an affirmative defense against any claim
asserted by Executive in any forum. Employer releases and
discharges Executive and his heirs, executors and assigns,
from all claims, charges, or demands, in law or in equity,
whether known or unknown, which may have existed or which may
now exist from the beginning of time to the date of this
Agreement, including, without limitation, any claims the
Employer may have arising from or relating to the Executive's
employment or termination from employment with the Employer.
Executive does not waive his legal right to his personnel
file.
7. NON-DISCLOSURE. Executive shall not, except as may be required
by law and with advance notice to Employer, disclose the
financial terms of this Agreement or any of its terms to any
third parties other than Executive's spouse, tax advisors,
accountants and attorneys. Executive agrees that any violation
of this non-disclosure paragraph will result in substantial
and irreparable injury to Employer. The Employer shall take
all reasonable steps to protect from disclosure the financial
terms of this Agreement, except as such disclosure is required
by law.
8. REFERENCES. Attached as Attachment A is a copy
of a letter of commendation signed by Xxxxx
Xxxxxxxx that has been provided to Executive. In
the event that Executive seeks a reference for
employment purposes, the human resources
department shall follow its policy of providing
confirmation of dates of employment, positions
held and compensation upon in response to any
request authorized by Executive.
9. CONSIDERATION TIME AND REVOCATION Period. Consistent with the
ADEA, this Agreement was first given to Executive on August
11, 2003. Executive has twenty-one (21) calendar days during
which to review and
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consider this offer. Executive is not required to, but may
accept this Agreement by signing and returning the Agreement
at any time prior to September 1, 2003. In the event Executive
signs and returns the Agreement before that time, Executive
certifies, by such execution, that he knowingly and
voluntarily waives the right to the full twenty-one (21) days,
for reasons personal to Executive, with no pressure by
Employer to do so. Employer and Executive further agree that
any changes, whether material or immaterial, to this Agreement
do not restart the running of the twenty-one (21) day
consideration period. Executive further acknowledges that
Employer was prepared to allow Executive a forty-five day
review period, but Executive, on advice of counsel, declined
such addition review time.
Executive understands that he may revoke this Agreement for a period of
seven (7) calendar days following his execution of the Agreement. Executive
understands that any revocation, in order to be effective, must be: (1) in
writing and either postmarked within seven (7) days of the Executive's execution
of the Agreement and addressed to General Counsel, Xxxxxxx & Xxxxxx Products
Co., 000 Xxxxxxxxxx Xxxxxxx Xxxx Xxxxxxxx 00000, or (2) hand-delivered within
seven (7) days of Executive's execution of the Agreement to Xxxxxxx & Xxxxxx
Products Co General Counsel at the address listed above. If revocation is by
mail, certified mail, return receipt requested is required to show proof of
mailing.
10. NO PAYMENT. No payments or benefits under this Agreement shall
be made to Executive until after the seven (7) day revocation
period has expired. If Executive does not revoke this
Agreement within the seven (7) day revocation period, then
this Agreement shall become fully and finally effective and
the payments and benefits provided by the terms of Paragraph V
will be made to Executive.
11. COMPLETE AGREEMENT; NO REINSTATEMENT. In executing this
Agreement, Executive is doing so knowingly and voluntarily and
agrees that he has not relied upon any oral statements by
Employer or its representatives, and that this Agreement, when
signed by both parties, supersedes any and all prior written
agreements between the parties regarding the terms of
Executive's employment or the termination of such employment,
including, without limitation, the Employment Agreement
(except to the extent that provisions of the Employment
Agreement are specifically incorporated into this Agreement).
The Executive waives any right to reinstatement or future
employment with Employer following the Termination Date.
12. SEVERABILITY. Should any provision of this Agreement be
declared or determined by any court to be illegal or invalid,
the remaining parts, terms or provisions shall not be affected
thereby, and said illegal or invalid part, term or provision
shall be deemed not to be a part of this Agreement,
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provided,any restrictive covenant incorporated herein shall be
modifiable by a court of competent jurisdiction to the extent
such covenant is thereby made enforceable.
13. CHOICE OF LAW. This Agreement shall be deemed to be made and
entered into in the State of Michigan and shall in all
respects be interpreted, enforced and governed under the laws
of the State of Michigan and the United States.
EXECUTIVE REPRESENTS THAT HE FULLY UNDERSTANDS THE TERMS OF THIS AGREEMENT AND
EXECUTES IT KNOWINGLY AND VOLUNTARILY; THAT NO PROMISE, INDUCEMENT OR AGREEMENT
HAS BEEN MADE TO HIM OTHER THAN THOSE SPECIFICALLY SET FORTH IN THIS AGREEMENT;
THAT THIS AGREEMENT, INCLUDING THE COVENANTS INCORPORATED BY REFERENCE, CONTAINS
THE ENTIRE AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE MODIFIED EXCEPT BY A
SUBSEQUENT WRITTEN AGREEMENT, EXECUTED BY BOTH PARTIES, WHICH SPECIFICALLY
EVIDENCES AN INTENT TO MODIFY THIS AGREEMENT; AND THAT EXECUTIVE HAS BEEN
ADVISED TO CONSULT WITH LEGAL COUNSEL PRIOR TO EXECUTING THIS AGREEMENT.
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DATE OF EXECUTIVE'S SIGNATURE
XXXXXXX & XXXXXX CORPORATION
(EMPLOYER)
BY:
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ITS:
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