EXHIBIT 10.28
RESIGNATION AGREEMENT
This RESIGNATION AGREEMENT ("the Agreement") is made and entered into as
of the 8th day of October 2002, by and between CARAUSTAR INDUSTRIES, INC., a
North Carolina corporation with its principal place of business in Austell,
Georgia ("the Company"), and XXXXX XXX XXXXXX, III ("Employee").
STATEMENT OF PURPOSE
Employee has served as Vice President, Planning and Development and
Chief Financial Officer of the Company. Employee has decided to resign as an
officer and director of the Company effective as of October 8, 2002 and to
resign as an employee of the Company on November 1, 2003. The purpose of this
Agreement is to set forth the terms and agreements of the parties under which
this transition will take place.
AGREEMENT
NOW THEREFORE, in consideration of the mutual covenants and agreements
contained herein and other good and valuable consideration, the Company and
Employee hereby agree as follows:
1. Resignation as Officer and Director. Employee hereby tenders
Employee's resignation as an officer and director of the Company, its
subsidiaries and/or affiliates, all such resignations to be effective as of
October 8, 2002. In this connection, Employee agrees to execute any documents
reasonably required by the Company, and/or its subsidiaries and affiliates, to
effect such resignations. Employee shall continue as an employee of the Company
through November 1, 2003, as provided in paragraph 2 below.
2. Continuance of Employment. Subject to his full compliance with
the terms of this Agreement, Employee shall continue to be employed by the
Company from the date of this Agreement until November 1, 2003 ("the
Continuation Period"). As an employee of the Company during the Continuation
Period, Employee shall be entitled to receive the salary and benefits specified
in paragraph 3 below. During the Continuation Period, Employee agrees to (i) use
any and all accrued vacation to which he would otherwise be entitled, (ii)
report to the Company's Chief Executive Officer and (iii) perform such special
projects, if any, as may be reasonably requested of Employee with prior
reasonable notice.
3. Payments and Benefits to Employee.
(a) Salary. During the Continuation Period, the Company shall
continue to pay Employee his current annual base salary of $261,150. All salary
payments shall be made at a time and in accord with the regular payroll
practices of the Company with respect to its executive
officers. All such amounts shall be subject to and reduced by any applicable
federal and state withholding taxes or other deductions authorized by Employee.
(b) Benefits. During the Continuation Period, Employee shall be
entitled to participate in all welfare and pension benefit plans sponsored or
provided by the Company to the same extent and on the same basis as other
executive employees of the Company, except that, Employee shall not be entitled,
from and after October 8, 2002, to (i) accrue vacation; (ii) receive any
short-term or long-term incentive payments or any other bonuses or compensation
except as set forth in subparagraphs 3(a), 3(d) and 3(f) hereof, (iii)
participate in any nonqualified deferred compensation or supplemental retirement
plan sponsored or maintained by the Company, including without limitation the
Company's Supplemental Executive Retirement Plan ("SERP"); (iv) participate in
any short-term or long-term disability plan sponsored or maintained by the
Company; (v) be reimbursed for dues or assessments relating to any private club,
country club or professional organization; (vi) participate in or receive the
benefits of the Change in Control Severance Agreement ("CIC Agreement") by and
between Employee and the Company; (vii) receive benefits under any severance
plan, practice or policy maintained or sponsored by the Company or (viii)
receive reimbursement for any business, entertainment or similar expenses
incurred by Employee unless expressly approved in advance by the Company's Chief
Executive Officer. Nothing herein shall affect the Company's right to modify,
change, terminate or amend the terms of any of its group welfare or pension
benefit plans, and Employee's entitlement to any benefits under such plans shall
be governed solely and exclusively by the terms of the actual benefit plan
documents.
(c) Conditions to Benefits. All benefits provided to Employee during
the Continuation Period, as set forth in subparagraph 3(b) above, except such
benefits to which Employee is entitled under the Company's tax-qualified defined
benefit or contribution pension plans, shall terminate immediately upon Employee
becoming covered under any group medical benefit plan sponsored by any employer.
(d) KEICP Payment. Employee shall be entitled to the full amount of
the award payable to him pursuant to the terms of the Company's Key Employee
Incentive Compensation Plan ("the Incentive Plan") for the fiscal year ended
December 31, 2002. This amount, if any, will be paid to Employee simultaneous
with payments made under the Incentive Plan to other executives of the Company,
and shall be reduced by any applicable withholding taxes and other authorized
deductions.
(e) Outplacement Assistance. Employee shall be entitled to receive
the normal and standard benefits of the Executive Counseling Program provided by
Executrak.
(f) Special Bonus Payment. In consideration for Employee's services
in connection with the Company's acquisition of the industrial packaging assets
of Smurfit-Stone Container Corporation and for the relinquishment and waiver of
all of Employee's rights in connection with SERP and the CIC Agreement, the
Company will pay to Employee the sum of $200,000, less applicable withholding
and deductions authorized by Employee. This payment shall be made to Employee on
the first regular payday following expiration of the seven-day revocation period
specified in paragraph 18 hereof.
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4. Benefits Following the Continuation Period and COBRA Rights. (a)
From and after November 1, 2003, Employee shall not have the right to
participate in or receive any benefit under any employee benefit plan of the
Company, any fringe benefit plan of the Company, or any other plan, policy or
arrangement of the Company providing benefits or perquisites to employees of the
Company generally or individually. Provided, however, that Employee shall be
entitled to elect the payment of benefits to which Employee is entitled under
any employee pension benefit plan of the Company as provided under the terms of
any such plan.
(b) Employee shall be furnished a notice of his COBRA rights under
the Company's group medical benefit plan prior to or promptly following the
termination of his employment on November 1, 2003. Provided (i) Employee is not
in breach of the terms and conditions of this Agreement; (ii) Employee is not
then covered under any other employer group medical benefit plan; and (iii)
Employee properly elects continuation coverage and remits all required payments
in connection therewith, the Company shall subsidize any COBRA payments made by
Employee during the COBRA Period, such that Employee's out-of-pocket premium
payments shall not exceed the amounts that Employee would have had to pay for
such coverage had he remained employed with the Company in the same coverage
category (i.e., 2 person married couple) in which Employee was enrolled as of
October 8, 2002. "The COBRA Period," as used herein, shall mean a period of time
- not to exceed 18 months from November 1, 2003 - during which Employee is
otherwise eligible for continuation coverage under COBRA. The Company's
obligations hereunder shall immediately cease upon Employee becoming covered
under any other employer group medical benefit plan.
5. Stock Options. All stock options that have been granted to
Employee prior to the date hereof shall continue to vest through the termination
of Employee's employment on November 1, 2003, and shall be exercisable according
to the terms and conditions set forth in the Incentive Plan and the option
agreements entered into pursuant thereto.
6. Return of Company Property. All records, files, lists, including
computer-generated and electronic files, drawings, notes, notebooks, letters,
handbooks, blueprints, manuals, sketches, specifications, formulas, financial
documents, sales and business plans, customer lists, lists of customer contacts,
pricing information, computers, software, cellular phones, credit cards, keys,
equipment and similar items relating to the Company's business, together with
any other property of the Company or property which the Employee received in the
course of Employee's employment with the Company, shall be returned to the
Company no later than November 1, 2002. Employee further represents that he will
not copy or cause to be copied, download, print out or cause to be printed out
or downloaded or transferred any software, documents, electronic data or files
or other materials originating with or belonging to the Company.
7. Confidentiality and Nondisparagement. Employee agrees to keep
confidential and not to make any statement, written or oral (including but not
limited to any media source or to any other party) regarding the terms of this
Agreement. Provided, however, it shall not constitute a breach of this paragraph
for Employee to disclose the terms of this Agreement to Employee's spouse, legal
counsel, tax accountant, medical provider or licensed counselor, provided
Employee obtains the agreement of such person to keep the terms hereof
confidential. Furthermore,
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Employee, for the good and valuable consideration furnished herein, agrees not
to disparage, bring into disrepute or make any negative statement concerning the
Company, its subsidiaries or affiliates or any of their respective employees,
officers or directors or make any other statement that would disrupt, impair or
affect adversely the reputation, business interests, or profitability of such
parties or place such parties in any negative light. Any breach of this
paragraph by Employee shall constitute a material breach of this Agreement, and
shall entitle the Company to any and all remedies provided by law for the
material breach of contract, including the suspension of any performance owed by
the Company hereunder. Provided, however, that notwithstanding the provisions
hereof, it shall not constitute a breach of this Agreement for Employee to
testify truthfully about any subject when compelled to do so by properly issued
legal process.
8. Admissions. Employee acknowledges that the payment by the Company
of the benefits described herein shall never for any purpose be considered an
admission of liability on the part of the Company, by whom liability is
expressly denied, and no past or present wrongdoing on the part of the Company
shall be implied by such payment. Similarly, no admission of past or present
wrongdoing on the part of Employee shall be implied by virtue of his resignation
from the Company.
9. Release. As consideration for the payments and benefits to be
provided by the Company to Employee hereunder, Employee agrees for Employee and
for Employee's heirs, executors, administrators and assigns, to release and
forever discharge the Company and all of its parent and subsidiary corporations
and each of their affiliated entities (including limited liability companies and
partnerships or joint ventures), together with each of their respective agents,
officers, employees, directors, insurers, benefit plans and attorneys, from, and
to waive any and all rights with respect to all manner of claims, actions,
causes of action, suits, judgments, rights, demands, debts, damages, or
accountings of whatever nature, legal, equitable or administrative, whether the
same are now known or unknown, which Employee ever had, now has or may claim to
have, upon or by reason of the occurrence of any matter, cause or thing
whatsoever up to the date of this Resignation Agreement, including without
limitation: (i) any claim whatsoever (whether under federal or state statutory
or common law) arising from or relating to Employee's employment or changes in
Employee's employment relationship with the Company, including Employee's
separation, termination or resignation therefrom; (ii) all claims and rights for
additional compensation or benefits of whatever nature (including for any
welfare or pension benefits pursuant to any plan maintained or sponsored by the
Company); (iii) any claim under any contract including for breach of contract,
implied or express, impairment of economic opportunity, intentional or negligent
infliction of emotional distress, wage or benefit claim, prima facie tort,
defamation, libel, slander, negligent termination, wrongful discharge, or any
other tort, whether intentional or negligent; (iv) all claims and rights under
Title VII of the Civil Rights Act of 1964, the Civil Rights Acts of 1866, 1871,
or 1991, the Age Discrimination in Employment Act, the Employee Retirement
Income Security Act, the Americans With Disabilities Act, the Family and Medical
Leave Act, all as amended, or any other federal, state, county or municipal
statute or ordinance relating to any condition of employment or employment
discrimination; and (v) all claims under any employment agreement by and between
Employee and the Company. Provided, however, this Release shall not (i) include
any claims relating to the obligations of the Company under this Agreement, (ii)
operate to release Employee's ownership of any common stock of the Company or
rights provided to Employee in connection with stock options issued to him under
the Incentive Plan; or (iii) affect
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Employee's vested and accrued rights as a participant in the Company's
tax-qualified defined benefit or defined contribution pension plans.
10. Noncompetition. Employee shall continue to be bound by and
subject to the obligations of the Confidentiality and Non-Competition Agreement
("the Non-Competition Agreement") by and between Employee and the Company.
Employee's compliance with the Non-Competition Agreement shall be a condition to
Employee's receipt of any payments or benefits under this Agreement, and
Employee's failure to comply with any of the terms thereof shall result in a
forfeiture of all payments and benefits described herein, except for Employee's
vested and accrued rights under the tax-qualified pension benefit plans of which
Employee is a participant or beneficiary.
11. Governing Law and Forum Selection. This Agreement shall be
governed by the substantive laws of the State of North Carolina, without regard
to the effect or application of any conflict of laws principles to the contrary.
Employee and the Company agree that any claim against the Company or any of its
affiliates or their employees, officers or directors ("the Company Parties")
arising out of or relating in any way to this Agreement or to Employee's
employment with the Company shall be brought exclusively in the Superior Court
of Xxxx County, Georgia, or the United States District Court for the Northern
District of Georgia (Atlanta Division), and in no other forum. Employee and the
Company hereby irrevocably consent to the personal and subject matter
jurisdiction of these courts for the purpose of adjudicating any claims subject
to this forum selection clause. Employee and the Company also agree that any
dispute of any kind arising out of or relating to this Agreement or to
Employee's employment (including without limitation any claim released herein by
Employee) shall at either the Employee's or the Company Parties' election or
demand be submitted to final, conclusive and binding arbitration before and
according to the rules then prevailing of the American Arbitration Association
in Atlanta, Georgia, which election or demand may be made at any time prior to
the last day to answer and/or respond to a summons and/or complaint or
counterclaim made by Employee or the Company. The results of any such
arbitration proceeding shall be final and binding both upon the Company Parties
and upon Employee, and shall be subject to judicial confirmation as provided by
the Federal Arbitration Act, which is incorporated herein by reference.
Provided, however, that nothing in this paragraph 11 shall preclude the Company
Parties from obtaining preliminary or emergency injunctive relief to restrain
any violation of the provisions hereof or of the Confidentiality and
Non-Competition Agreement.
12. Severability. If any of the provisions set forth in this
Agreement be held invalid, illegal or unenforceable in any respect, such
invalidity, illegality or unenforceability shall not affect any other provision
of this Agreement, but this Agreement shall be construed as if such invalid,
illegal or unenforceable provision had never been contained herein.
13. Voluntary Agreement. Employee hereby represents that Employee has
carefully read and completely understands the provisions of this Agreement and
that Employee has entered into this Agreement voluntarily and without any
coercion whatsoever, and in order to receive benefits that are not otherwise
owed to Employee by the Company. Employee represents that he has been advised in
writing of his right to secure counsel to assist in his reviewing this
Agreement, that he has had sufficient time to review carefully each of the
provisions hereto with his counsel, and that his execution hereof is the product
of his own free will and volition. The Company hereby
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represents that it has entered into this Agreement voluntarily and that due
corporate authority has been obtained for entry into this Agreement.
14. Assistance and Cooperation. Employee agrees to cooperate with and
provide assistance to the Company and its legal counsel in connection with any
litigation (including arbitration or administrative hearings) or investigation
affecting the Company, its subsidiaries or affiliates in which, in the
reasonable judgment of the Company's counsel, Employee's assistance or
cooperation is needed. Employee shall, when requested by the Company, provide
testimony or other assistance and shall travel at the Company's request in order
to fulfill this obligation. Provided, however, that, in connection with such
litigation or investigation, the Company shall attempt to accommodate Employee's
schedule, shall provide him with reasonable notice in advance of the times in
which his cooperation or assistance is needed, and shall reimburse Employee for
any reasonable expenses and loss of income incurred in connection with such
matters, unless otherwise prohibited by law. In addition, during the time he is
receiving any of the payments set forth herein, Employee agrees to cooperate
fully with the Company on all matters relating to his employment and the conduct
of the Company's business.
15. Waiver, Dependent Conditions and Fees. Any waiver or consent from
the Company with respect to any term or provision of this Agreement or any other
aspect of the Company's conduct shall be effective only in the specific instance
and for the specific purpose for which given and shall not be deemed, regardless
of frequency given, to be a further or continuing waiver or consent. The failure
or delay of the Company at any time or times to require performance of, or to
exercise any of its powers, rights or remedies with respect to, any term or
provision of this Agreement shall not affect the Company's right at a later time
to enforce any such term or provision. In addition thereto, the failure of the
Employee to perform or satisfy any obligation set forth herein shall give the
Company the right to suspend any obligation otherwise owed to Employee
hereunder.
16. Acknowledgement of Waiver of Rights. Employee acknowledges that
Employee's waiver of rights and claims under this Agreement includes a waiver of
rights and claims under the Federal Age Discrimination in Employment Act of
1967, as amended, and that such waiver and the waiver and release of all other
rights and claims contemplated by the release set forth in paragraph 9 above are
made knowingly and voluntarily. Employee acknowledges that he has been given a
period of at least twenty-one (21) days to consider the provisions of the
release stated above, and to consult with his attorney, accountant, tax advisor,
spouse or other persons prior to making a decision to sign this document.
Employee further acknowledges that the Company has not pressured or coerced
Employee to execute this Agreement prior to the expiration of 21 days from the
date it was furnished to Employee and that any decision to execute this
Resignation Agreement prior to such time has been made freely and voluntarily.
17. Indemnification. The Company agrees to indemnify Employee for
acts and omissions preceding the date of his resignation as an officer and
director of the Company to the full extent permitted under the Articles of
Incorporation and Bylaws of the Company. The Company further agrees to maintain
for Employee, with respect to acts and omissions preceding said resignation
date, directors' and officers' liability insurance with the same limits as
pertain to the Company's other officers and directors.
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18. Further Conditions. The obligations of the Company set forth in
this Agreement, are conditional upon Employee's execution and full ratification
of this Agreement, including the release set forth herein, no later than
twenty-one (21) days following the date on which this Resignation Agreement is
submitted to Employee, as well as upon Employee's failure to revoke the same
following the expiration of seven days following such execution. In the event
that Employee fails to execute this Agreement within such 21-day period or
revokes the execution thereof within seven days following such execution
thereof, the Company's obligations hereunder shall be null and void.
19. Ratification and Return of Consideration. Any attempt by Employee
to challenge this Agreement or attempt to declare any provision herein void or
voidable, must be preceded by a return of any and all consideration received
hereunder. In particular, should Employee fail to return any part of such
consideration within forty-five (45) days hereof, Employee shall be deemed to
have accepted the full benefits of this Agreement and shall be bound by all
provisions herein. Provided, however, that nothing in this paragraph shall be
deemed to preclude Employee's ratification of this Agreement in any other way
allowed or permitted by law.
20. Entire Agreement. This Agreement contains the entire agreement
between the Company and Employee and supersedes all prior agreements relating to
the subject matter hereof, except as expressly referred to herein, and may be
changed only by a writing signed by the parties hereto. Any and all prior
representations, statements and discussions regarding the subject matter of this
Agreement have been merged into and/or replaced by the terms of this Agreement.
IN WITNESS WHEREOF, the parties hereto have duly executed this
Agreement, or caused this Agreement to be duly executed by their authorized
representatives as of the day and year first above written.
CARAUSTAR INDUSTRIES, INC.
By: /s/ Xxxxxx X. Xxxxx
___________________________________
Position: President and CEO
_____________________________
/s/ Xxxxx Xxx Thrash, III
_______________________________________
Xxxxx Xxx Xxxxxx, III
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