Carlyle Industries, Inc.
c/o Noel Group, Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
May __, 1998
Xxxxx Xxxxxxx
Xxxxxxx Industries, Inc.
000 Xxxxxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Dear Xx. Xxxxxxx:
This letter sets forth and confirms the agreement between Carlyle
Industries, Inc. (the "Company") and you (herein sometimes the "Employee")
regarding the terms of your continued employment with the Company. The Agreement
between you and the Company is as follows:
1. EMPLOYMENT. The Company hereby agrees to continue your
employment as Chairman, President and Chief Executive Officer of the Company,
and you agree to continue in such employment, through May 29, 1998 or until such
later date as you and the Company may mutually agree. You will report to and be
responsible to the Board of Directors of the Company.
2. SALARY. The Company agrees to pay you an annual salary at the
rate of $250,000 per annum payable in accordance with the payroll practices of
the Company, plus any accrued and unpaid bonus. Your annual salary shall be
reviewed annually and may be increased in the discretion of the Board or the
Compensation Committee thereof. You shall also be entitled to participate in the
Company's Management Incentive Plan and all health insurance, profit sharing,
employee stock option and similar plans and benefits afforded by the Company to
its management employees generally, if and to the extent that you are eligible
to participate in such plans and benefits in accordance with their terms.
3. SEVERANCE. In the event that the Company terminates your
employment for any reason whatsoever, whether with or without cause, or if you
resign from all of your positions with the company and its subsidiaries on or
before May 29, 1998, the Company shall pay you, in a single lump sum payment,
within 23 days after the termination of your employment or the date when you
cease to serve as a director of the Company, whichever is later, an amount equal
to four (4) months of your annual base salary in effect on the date of such
termination (i.e.,
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$250,000 at the compensation rate in effect on the date hereof or such larger
amount as may reflect the compensation rate in effect at a later date due to
annual salary increases).
4. CHANGE IN CONTROL. Notwithstanding anything herein to the
contrary, in the event of a Change in Control (as defined below) of the Company
at any time during the period beginning on the date hereof and ending four
months after the date on which your employment with the Company terminates (for
this purpose any event of a nature described below recommended or approved in a
resolution adopted by the Board of Directors during such four-month period but
consummated thereafter shall be deemed to have occurred during such four-month
period), the Company shall pay you a single one-time payment in the amount of
$100,000 within 30 days after the occurrence of such Change in Control. For
purposes hereof, a "Change of Control" of the Company shall be deemed to have
occurred upon and only upon the occurrence of any of the following events:
(i) Any "person" or "group" (as such term is used in
connection with Section 13(d) and 14(d)(2) of the Exchange Act) but
excluding any employee benefit plan of the Company; any person or group
which, on the date hereof holds directly or indirectly fifty percent
(50%) or more of the combined voting power of the Company's outstanding
securities entitled ordinarily (and apart from rights accruing under
special circumstances to vote for the election of directors); or any
"affiliate" or "associate" of the Company (as defined in Regulation
12b-2 under the Exchange Act) (a) becomes the "beneficial owner" (as
defined in Rule 13d-3 under the Exchange Act), directly or indirectly,
of securities of the Company representing fifty percent (50%) or more
of the combined voting power of the Company's outstanding securities
then entitled ordinarily (and apart from rights accruing under special
circumstances) to vote for the election of directors; or
(ii) There shall be consummated (A) any consolidation or
merger of the Company or any similar transaction involving the Company
(other than a consolidation, merger or similar transaction with or into
an entity of which the Company owns more than fifty percent (50%) of
the securities prior to the commencement of the transaction or related
series of transactions), at the conclusion of which the shareholders of
the entity with or into which the Company is consolidated or merged
own, as a result of their holdings in such merged entity, more than
fifty percent (50%) of the voting power (determined by reference to the
tests provided in clause (i) above) of the surviving entity, or (B) any
sale, lease, exchange or other transfer (in one transaction or a series
of related transactions) of all, or substantially all, of the assets of
the Company; provided, that notwithstanding anything in this document
to the contrary a "Change in Control" shall expressly not be deemed to
have occurred upon or as a result of the happening of either (x) the
divestiture of less than substantially all of the operating assets of
the Company in one transaction or a series of related transactions,
whether effected by sale, lease, exchange, spin-off, sale of the stock
or merger of a subsidiary of the Company or otherwise, or a transaction
solely for the purpose of reincorporating the Company in
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another jurisdiction, or (y) the distribution by Xxxx Group, Inc. to
its shareholders of some or all of Xxxx Group Inc.'s holdings of
securities of the Company.
5. COMPANY PAYMENTS AND OTHER OBLIGATIONS.
a. Except as provided in Section 4 above and otherwise herein,
after the termination of your employment the Company shall have no obligations
to make any further payment to you (including without limitation salary,
vacation pay, severance pay, executive incentive plan bonuses or any other
bonuses, performance incentive award plan payments, stock option awards, pension
contributions or payments) and shall have no obligation to provide you with any
fringe benefits (including without limitation life insurance, dental insurance,
health and medical insurance, and disability protection), an office or other
amenities. The Company does, however, specifically agree that it will pay to
you, your accrued vacation pay (four (4) weeks) through the date of the
termination of your employment, and will reimburse you for all unreimbursed
travel and entertainment expenses properly incurred by you prior to the
termination of your employment in accordance with normal Company policy. The
Company agrees that your rights under all stock option agreements between you
and the Company shall continue in accordance with the terms of such agreements,
including terms relating to accelerated vesting upon the termination of your
employment with the Company.
b. Except as otherwise specified in paragraph 1 and 2 hereof,
this Agreement supersedes and terminates the Letter Agreement between you and
the Company dated February 25, 1998.
6. RELEASES.
a. Employee agrees that, except as provided herein, she waives
any right to employment, reinstatement or re-employment with the Company or any
Company Affiliate and specifically agrees that she will not apply for the same.
As used in this Section 6, the term "Company Affiliate" shall mean "affiliate"
as defined in Regulation 12b-2 under the Exchange Act, but excluding Lincoln
Snacks Company.
b. Employee acknowledges and agrees that she is fully aware
that there are various federal, state and municipal laws which prohibit
employment discrimination based on, including without limitation, the following:
race, age, sex, marital status, sexual orientation, citizenship, religion,
creed, national origin, military or national guard service, mental,
psychological record or prior convictions, or entitlement to pension or employee
benefits including retirement, pension and severance.
c. Employee also acknowledges and agrees that she fully
understands and is aware there are federal, state and municipal agencies which
enforce and administer these laws and ensure their enforcement.
d. In consideration of the payments and other undertaking of
the Company and the undertakings of Employee described in this Agreement, and
other good sufficient
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consideration provided by the parties, the receipt of which is hereby
acknowledged, Employee hereby, for herself, her heirs, legal representatives,
successors, and assigns, releases and discharges the Company and the Company
Affiliates and its and their respective officers, directors, employees,
successors and assigns, and the Company and the Company Affiliates hereby, for
themselves, their respective successors and assigns, release and discharge
Employee, her heirs, legal representatives, successors and assigns, from all
actions, causes of action, suits, debts, accounts, sums of money, damages,
judgments, claims and demands whatsoever, in law or in equity, known or unknown,
which either hereafter can, shall or may have against the other for, upon or by
reason of any matter, cause or thing whatsoever from the beginning of the world
to the date of this Agreement, including without limitation all claims arising
out of or by reason of the termination of Employee's employment, EXCEPT ONLY
those arising out of the performance by the Company and the Company Affiliates
and Employee of their respective covenants and agreements contained in this
Agreement; Employee's rights under all retirement, profit sharing, stock option
or similar benefit plans sponsored by the Company (to the extent that such
rights survive the termination of Employee's employment); Employee's
indemnification and similar rights which Employee would have in the absence of
this Section 6 d. with respect to liability by reason of her being an employee,
officer and director of the Company or the Company Affiliates, whether under
contract, statute or common law; and any rights which Employee would have in the
absence of this Section 6 d under any written agreements with Xxxx Group, Inc.
Further, the Company and the Company Affiliates do not hereby release Employee
from any liability which they or any of them may incur arising from or related
to any action or omission on the part of Employee in his capacity as a plan
administrator or trustee of any retirement plan or trust maintained by the
Company or any Company Affiliate which constitutes gross negligence, fraud or
willful misconduct.
e. Except as otherwise stated, the releases in the foregoing
Section 5 d. include but are not limited to releases of any rights the releasing
parties may have for breach of contract (whether express, implied or oral),
tort, wrongful termination, defamation, infliction of emotional distress,
slander, promissory estoppel, prima facie tort,. breach of the covenant of fair
dealing, fraud, violation of public policy, claims for physical or emotional
injury, any and all claims based on federal, state or local laws including,
without limitation, the Age Discrimination in Employment Act (29 U.S.C. ss.621,
et Seq.), the Employee Retirement Income Security Act of 1974, the Civil Rights
Acts, the fair employment laws of the State of New York, and the United States
Constitutions or common laws.
f. Employee acknowledges (i) that she has been given the
opportunity to consult with her attorney regarding this agreement, (ii) that she
fully understands this agreement and the effect of her signing it, (iii) that
she has been given up to twenty-one (21) days to consider this agreement and
(iv) that she may revoke this agreement within seven (7) days following the date
she signs it and that this agreement will not become effective or enforceable
until after seven (7) days have expired.
7. INDEMNIFICATION. The Company will defend, indemnify and hold
Employee (and her legal representative or other successors) harmless from and
against any damages, claims, liabilities, losses and expenses (including without
limitation the payment of
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reasonable attorney's fees and expenses in advance of final disposition of the
proceedings) of any kind or nature whatsoever which may be sustained or suffered
by Employee in connection with or arising out of any action, suit or proceeding
to which she (or her legal representative or other successors) may be made a
party by reason of her being or having been a director, officer or employee of
the Company, to the fullest extent permitted by Delaware General Corporation Law
as in effect at the time of the subject act or omission, the Articles of
Incorporation and By-Laws of the Company as in effect at such time or on the
date of this Agreement, or any insurance policies the Company or its parents may
elect to maintain generally for the benefit of the directors and officers of the
Company, whichever affords or afforded greater protection to the Employee. The
indemnification accorded the Employee by this Section 7 shall apply regardless
of whether the claim giving rise to indemnification is made against the Employee
in her capacity as a director, officer or employee of the Company, or otherwise;
provided, that the nature of the claim is such that it could have been brought
against the Employee in her capacity as a director, officer or employee of the
Company.
8. PRESS RELEASE. The parties agree that the Company may without
the Employee's consent issue a press release disclosing the fact of the
Employee's resignation and the identity of her successor. If, however, the
Company desires to disclose any additional facts relating to the Employee or her
resignation in a press release, the Company must obtain the consent of the
Employee prior to issuing such press release.
9. ENTIRE AGREEMENT.This Agreement contains the entire
understanding of the parties hereto relating to the subject matter hereof and
cannot be changed or altered orally.
10. GOVERNING LAW. This Agreement contains the entire
understanding of the parties hereto relating to the subject matter hereof and
cannot be changed or altered orally.
11. SEVERABILITY. The invalidity or unenforceability of any
provisions of this Agreement in any circumstance shall not affect the validity
or enforceability of any other provision of this Separation Agreement, and
except to the extent such provision is invalid or unenforceable, this Agreement
shall remain in full force and effect. Any provision in this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective only to the extent that such provision is prohibited or
unenforceable, without invalidating or affecting the remaining provisions hereof
in such jurisdiction, and any such prohibition or unenforceability in any
jurisdiction shall not invalidate or render unenforceable such provision in any
other jurisdiction.
12. NOTICES. Any notice required or permitted to be given under
this Agreement shall be sufficient if in writing and if sent by registered mail,
to her then residence in the case of Employee or to its then principal office in
the case of the Company, and shall be deemed given when deposited in the United
States mails, postage prepaid.
12. SUCCESSORS AND ASSIGNS. This Agreement shall be binding upon
Employee, the Company, and the Company's successors and assigns.
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Please confirm that the foregoing accurately sets forth our
understanding by executing the enclosed copy of this letter and returning it to
us.
CARLYLE INDUSTRIES, INC.
By:
------------------------------------
Authorized Signatory
AGREED TO AND ACCEPTED
as of the date of the signature below.
/s/ XXXXX XXXXXXX
----------------------
Xxxxx Xxxxxxx
Dated:
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