EXHIBIT 10.23
SEPARATION AGREEMENT
This Separation Benefits Agreement for Xxxxxx X. Xxxxxx ("Xxxxxx") with
partial release and waiver of claims ("Agreement") is made by and between Xxxxxx
and OM Group, Inc., a Delaware corporation with its principal place of business
located in Cleveland, Ohio ("OMG") effective upon the terms and conditions as
set forth herein. In consideration for the payments, by OMG to Xxxxxx as set
forth herein, and in further consideration of the mutual promises, obligations,
releases and covenants as set forth below, the sufficiency of which are all
acknowledged, the parties agree as follows:
1. CASH PAYMENT OBLIGATIONS
1.1 Periodic Payments. Xxxxxx and OMG acknowledge that OMG
terminated Xxxxxx'x employment effective December 12, 2002. OMG
agrees to continue Xxxxxx'x compensation at the rate of Seven
Hundred Fifty Thousand and 00/100 Dollars ($750,000.00) per annum
through May, 2004. This compensation shall be paid, withheld and
reported in the same manner as was in effect immediately prior to
the effective date of the termination of Xxxxxx'x employment.
1.2 Lump Sum Payments.
A. It is agreed that within ten (10) days of the Effective
Date of this Agreement (as hereinafter defined in
Section 8), OMG will pay Xxxxxx the sum of Five Hundred
Forty Thousand Six Hundred Twenty-Five and 00/100
Dollars ($540,625.00). This lump sum payment will be
paid and reported as non-employee compensation on IRS
Form 1099, in consideration of this Agreement.
B. It is agreed that on March 1, 2004, OMG will pay Xxxxxx
the sum of Five Hundred Sixty-Two Thousand Five Hundred
and 00/100 Dollars ($562,500.00). This lump sum payment
will be paid and reported as non-employee compensation
on IRS Form 1099, in consideration of this Agreement.
C. It is agreed that on June 1, 2004, OMG will pay Xxxxxx
the sum of Two Hundred Thirty-Four Thousand Three
Hundred Seventy-Five and 00/100 Dollars ($234,375.00).
This lump sum payment will be paid and reported as
non-employee compensation on IRS Form 1099, in
consideration of this Agreement.
1.3 Non-Qualified Retirement Plan. It is agreed that the balance
maintained by OMG for Xxxxxx'x benefit in the OMG Benefit
Restoration Plan of January 1, 1995, as amended from time to time as
provided therein ("Plan") as of January 1, 2003 totalled Three
Hundred Seven Thousand Seven Hundred Sixty-One and 00/100 Dollars
($307,761.00) (the "Plan Balance"). The Plan Balance is irrevocably
vested for Xxxxxx'x benefit and shall continue to accumulate
Interest in accordance with the terms and conditions of the Plan.
Xxxxxx'x Plan Balance is non-forfeitable and shall be credited with
interest earnings consistent with the crediting rate applied to all
other Plan participants. Xxxxxx shall receive benefits from the Plan
in accordance with its terms which generally provide for payments
over fifteen (15) years beginning at age sixty-five (65). Xxxxxx'x
current beneficiary under the Plan is the Xxxxxx X. Xxxxxx Trust
created under date of February 11, 1994, Xxxxxx X. Xxxxxx, Trustee.
Xxxxxx'x beneficiary designation may be changed in accordance with
the terms of the Plan.
1.4 Qualified Retirement Plan. It is agreed that Xxxxxx'x account
balance under in the OMG 401(k) Profit Sharing Plan ("Retirement
Plan") is fully vested. Nothing contained in this Agreement shall
diminish, restrict or limit Xxxxxx'x rights as a vested beneficiary
under the Retirement Plan. To the extent allowable by the terms of
the Retirement Plan, Xxxxxx has the right but not the duty to make
further contributions to the Retirement Plan which shall be fully
vested as of the date(s) of contribution. Further, to the extent
allowable by the terms of the Retirement Plan, Xxxxxx shall have the
right but not the obligation to roll-over his balance in the
Retirement Plan.
1.5 Other Obligations. Through May, 2004, Xxxxxx will continue to
receive coverage under OMG's medical insurance program, group life,
group disability and ADD in accordance with the coverages offered to
current OMG executives, in a non-discriminatory manner and at no
cost (i.e. tax neutral, except for group life insurance in excess of
Fifty Thousand and 00/100 Dollars ($50,000.00)) to Xxxxxx. Xxxxxx
may elect COBRA coverage beginning June 1, 2004 which coverage will
be available to Xxxxxx from OMG through December, 2006 at a cost to
Xxxxxx equal to the standard monthly payment computed and applied by
OMG in a non-discriminatory basis for all other COBRA eligible
employees.
Xxxxxx shall continue to have unlimited access to his OMG-provided
automobile, and OMG shall reimburse Xxxxxx monthly for all
reasonable operating costs associated with said automobile and for
Xxxxxx'x monthly membership dues for his club memberships at Portage
Country Club and Xxxxxx Country Club. Monthly expense statements
shall be submitted to Xxxx Xxxxxxx or his replacement or designee as
the Director of Human Resources at OMG who will process and arrange
for payment of properly submitted expense statements within thirty
(30) days of receipt Not later than January 15, 2003 and January 15,
2004, respectively, Xxxxxx shall
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provide OMG with a written itemization of the allocation between
personal use and business use for his OMG-provided car. The portion
of the automobile use assigned to business use will not be included
in Xxxxxx'x W-2 tax form. Aside from COBRA benefits, all
OMG-provided fringe benefits shall terminate without further notice
on May 31, 2004. Xxxxxx shall return his OMG car to OMG on or before
May 31, 2004 in the condition required by the operating lease for
this automobile.
1.6 Litigation Support. Xxxxxx agrees to cooperate in the defense
of any complaints filed against OMG and others ("Litigation
Matters") by providing advice, consultation, deposition and
courtroom testimony as reasonably requested in furtherance of OMG's
interest and in defense of the litigation. OMG agrees to provide
status reports to Xxxxxx, no less often than quarterly, on the
progress of all Litigation Matters which involve Xxxxxx in any way,
either as a party or as a witness. With respect to any Litigation
Matter, subsequent to May 31, 2004, Xxxxxx shall be compensated at
the rate of Two Thousand Five Hundred and 00/100 Dollars ($2,500.00)
per day for litigation services rendered to OMG whether at the prior
request for such assistance from OMG's general counsel or outside
counsel or by deposition notice or by subpoena. Should Xxxxxx be
required to testify in any Litigation Matter, upon request of Xxxxxx
or Xxxxxx'x attorney(s), OMG shall make all relevant files available
to Xxxxxx for his review and the review of his attorney(s) prior to
the deposition date, subject to limitation on any proper assertion
of attorney-client privilege. Until the existing litigation filed
against OMG and others is dismissed and Xxxxxx is informed of that
fact by legal counsel for OMG, Xxxxxx shall not destroy any records
concerning OMG or Xxxxxx'x work for and on behalf of OMG since such
records may be discoverable and are the subject of a court order
requiring all such potential evidence to be preserved and protected
from destruction.
1.7 Attorneys Fees. Within ten (10) days of the Effective Date of
this Agreement (as hereinafter defined in Section 8), OMG shall
directly pay or reimburse Xxxxxx for legal expenses reasonably
incurred by Xxxxxx in pursuing his contractual rights with OMG up to
a maximum of $61,616.26. OMG agrees to deliver to Xxxxxx a check in
the amount of $11,325 made payable to Xxxx Xxxxxxxx and a second
check in the amount of $50,291.26 made payable to Xxxx X.
Xxxxxxxxxx, which two payments, after endorsement, negotiation and
acceptance by the bank, shall constitute full payment by OMG of any
attorneys fee obligation owing to Xxxxxx through the Effective Date
of this Agreement.
2. RELEASES
2.1 Partial Release by Xxxxxx. In consideration of the payments
set forth above, and in further consideration of the additional
mutual promises and obligations set forth in this document, the
sufficiency of which is
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hereby acknowledged, Xxxxxx on behalf of himself, his heirs,
administrators, executors and assigns, agrees to waive, release and
promise never to assert any claim, charge, action, cause of action,
controversy, lawsuit, demand or petition (hereinafter, "claim" or
"claims") that he has or might have, based upon any occurrence on or
before the effective date of this Agreement, against OMG, OMG
Americas, Inc., SCM Metal Products, Inc., Kokkola Chemicals OY,
Vasset S.A., OMG Thailand Co., Ltd., MPI Nichel PTY, Ltd., OMG Cawse
Pty., Ltd. and their predecessors, parent corporations,
subsidiaries, affiliates, related entities, officers, directors,
shareholders, agents, employees, successors or assigns (hereinafter
collectively "the Company"), arising from or related to his
employment and/or the termination of his employment.
These claims include, but are not limited to: any and all
claims, causes of action, suits, claims for attorneys' fees, damages
or demand; all claims of discrimination, on any basis, including
without limitation, claims of race, sex, age, ancestry, national
origin, religion and/or disability discrimination; any and all
claims arising under federal, state and/or local statutory, or
common law, such as, but not limited to, Title VII of the Civil
Rights Act, as amended, including the amendments to the Civil Rights
Act of 1991, the Americans with Disabilities Act, the Age
Discrimination in Employment Act of 1957, the Older Workers Benefit
Protection Act, any State laws against discrimination; any and all
claims arising under any other state and/or local
anti-discriminations statute and the law of contract and tort; and
any and all claims, demands and cause of action, including, but not
limited to, breach of public policy, unjust discharge, wrongful
discharge, intentional or negligent infliction of emotional
distress, misrepresentation, negligence or breach of contract.
Xxxxxx further agrees to waive, release, and promises never to
assert any such claims, even if he presently believes he has no such
claims. Provided, however, that the terms of this section 2.1 are
limited as provided in section 2.3, below.
2.2 Release by OMG. In consideration of the partial release set
forth above, and in further consideration of the additional mutual
promises and obligations set forth in this document, the sufficiency
of which is hereby acknowledged, OMG, on behalf of itself, OMG
Americas. Inc., SCM Metal Products, Inc., Kokkola Chemicals OY,
Vasset S.A., OMG Thailand Co., Ltd., MPI Nichel PTY, Ltd., OMG Cawse
Pty., Ltd. and their predecessors, parent corporations,
subsidiaries, affiliates, related entities, officers, directors,
shareholders, agents and employees, successors or assigns
(hereinafter collectively "the Company"), agrees and hereby does
waive, release and promises never to assert any claim, charge,
action, cause of action, controversy, lawsuit, demand or petition
(hereinafter, "claim" or "claims") that the Company has or might
have, based upon any occurrence on or before the Effective Date of
this Agreement, against Xxxxxx, his heirs, administrators,
executors, agents and assigns, arising
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from or related to Xxxxxx'x employment (including but not limited to
his service as an employee, officer and/or director) and/or the
termination of his employment and other relationships with OMG.
Notwithstanding anything contained herein or implied to the
contrary, nothing in this Agreement is intended to impair, waive,
discharge or release any claims (pending or threatened, in whole or
in part) by any third parties to this Agreement, even if brought in
the name of OMG or the Company. More particularly, the terms and
conditions of this Agreement shall in no manner affect the rights of
existing or future plaintiffs who are third parties to this
Agreement to proceed with shareholder, derivative or other
securities litigation subject to Xxxxxx'x rights and privileges as
set forth in Section 2.3 hereinafter and elsewhere.
2.3 Preservation of Indemnity Agreement and D&Q Insurance.
Notwithstanding the other provisions of this Agreement (particularly
sections 2.1 and 4), it is the express intent of the parties hereto
to preserve all of Xxxxxx'x rights under the Indemnity Agreement
dated November 15, 2002 ("Indemnity Agreement"), a copy of which is
attached hereto as Exhibit A and which is incorporated herein by
reference as if fully set forth. More specifically, notwithstanding
any provision in this Agreement that may be to the contrary, the
parties acknowledge and agree that Xxxxxx shall retain all rights
available to him under the Indemnity Agreement and under any other
agreement or document that provides Xxxxxx with Indemnity or
insurance rights for his actions as an employee, officer and/or
director. Finally, OMG shall maintain D&O insurance with coverage
periods covering Xxxxxx'x services to OMG, with any extended
reporting periods necessary to provide ongoing coverage to Xxxxxx
for claims that may properly be made under the relevant statutes of
limitation. Nothing in this Agreement shall constitute any waiver or
impairment of any coverage that Xxxxxx may have under D&O or other
insurance procured by the Company,
3. WAIVER OF CLAIMS
Xxxxxx agrees not to initiate or pursue any claim against the Company with
any local, state or federal agency or court for the purpose of recovering
damages on his behalf for any claims of any type he may have against the Company
based on any act or event occurring on or before the Effective Date of this
Agreement, including claims based on future effect of any past acts. Xxxxxx
represents that he has not filed or initiated any such complaint or charge
against the Company, and acknowledges that the Company is relying on such
representation in entering into this Agreement. The parties understand that the
claims being released do not include rights or claims which may arise out of
acts occurring after the Effective Date of this Agreement which do not in any
way relate to the facts and circumstances of this Agreement or Xxxxxx'x
employment relationship with the Company, or which by law and/or interpretation
of law cannot be waived. Each party also
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acknowledges that this provision does not preclude either party from instituting
an action to enforce the terms of this Agreement, including any action to
enforce the Company's obligations under section 2.3 of this Agreement and/or the
Indemnity Agreement.
4. CONTINUING AND SURVIVOR PAYMENT OBLIGATIONS
The parties agree and acknowledge that the payment obligations set forth
in this Agreement survive Xxxxxx. In the event Xxxxxx should die prior to the
time all of the payment obligations set forth in this Agreement have been made
in full, the payment obligations continue and shall be paid first to the Xxxxxx
X. Xxxxxx Trust created under date of February 11, 1994, Xxxxxx X. Xxxxxx,
Trustee or if that designation of beneficiary is revoked, then in any subsequent
designation provided by Xxxxxx to OMG in writing prior to his death or upon his
failure to do so, pursuant to any last will and testament Xxxxxx has in effect
at the time of his death (properly admitted to probate), and if none, to
Xxxxxx'x estate.
5. COMPANY PROPERTY
On the Effective Date of this Agreement, Xx. Xxxxxx will acquire free and
clear title to his Palm Pilot and facsimile machine provided by OMG as his
personal property. Xx. Xxxxxx represents that he has returned to OMG any and all
other OMG-owned property and does not have in his possession any OMG property
other than that specifically designated herein. Xxxxxx shall return to OMG the
IBM laptop computer provided to him for use as an OMG employee. Xxxxxx warrants
and represents that the memory system on the IBM laptop computer has not been
modified, altered or damaged in any way and that all files on the computer as of
December 12, 2002 relating to OMG remain accessible and retrievable.
6. CONFIDENTIALITY AND NON-DISPARAGEMENT PROVISION
The parties each agree not to disclose or divulge the terms of this
Agreement except as may be necessary to effectuate the terms of the Agreement or
may otherwise be required by subpoena, court order or law. Except for OMG's
contemplated future disclosure in accordance with SEC Rules, if either party
receives notice that it otherwise will be or might be legally required to
produce this Agreement, that party will immediately notify the other party in
writing. Nothing in this Agreement precludes either party from disclosing the
terms of the Agreement to his/its attorneys, tax preparers or other such
professional who has a need for such information as part of their professional
responsibilities to the party, or precludes Xxxxxx from disclosing such terms to
his immediate family.
The parties each agree not to disparage the other to the media or in any
other public forum.
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7. FUTURE EMPLOYMENT
OMG has no obligation to consider Xxxxxx for future employment at any time
after the effective date of this Agreement, nor does Xxxxxx have any obligation
to accept any such offered employment, but the parties are free to mutually
agree to an employment, consulting or other business arrangement.
8. CONSIDERATION PERIOD
Xxxxxx acknowledges that he has up to twenty-one (21) calendar days to
accept this Agreement. Xxxxxx waives any right he may have to additional time
beyond this consideration period within which to consider this Agreement. He
further understands that he does not have to wait the entire twenty-one (21) day
period but may sign this Agreement at any time during the period. Prior to
signing, Xxxxxx was advised to consult with and did consult with attorneys of
his own choosing to discuss all aspects of the Agreement. Xxxxxx understands
that during the seven (7) day period following his signature on this Agreement
he may revoke the Agreement, provided that such revocation is in writing, and
this Agreement will not become effective or enforceable until the seven (7) day
revocation period has expired without his exercise of the right to revoke
("Effective Date"). The parties agree that any agreed changes to this Agreement,
whether material or immaterial, will not restart the running of the twenty-one
(21) day review period. Xxxxxx acknowledges that he will not receive any of the
settlement benefits or consideration provided in section 1 hereof until the
seven (7) day revocation period has expired without revocation by Xxxxxx.
9. RESIGNATION
On or before the Effective Date of this Agreement, Xxxxxx shall submit his
resignation to OMG in the form of the annexed Exhibit B.
10. ENTIRE AGREEMENT
This document, with its attached exhibits, contains the entire agreement
between the parties regarding the separation of Xxxxxx'x employment from OMG and
supersedes all previous agreements and understandings, oral or written,
regarding Xxxxxx'x employment and termination of or separation from employment
including but not limited to that certain Employment Agreement dated as of June
1, 1999 between OMG and Xxxxxx. Notwithstanding, Xxxxxx remains subject to all
confidentiality provisions of his Employment Agreement and the provisions of law
restricting disclosure of confidential, proprietary and/or trade secret
Information. This Agreement is binding upon the parties and their heirs,
successors and assigns.
11. CONSULTATION WITH ADVISORS
Each party acknowledges that it has had full opportunity to consult with
such legal and financial advisors as it has deemed necessary or advisable in
connection with
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Its decision knowingly to enter into this Agreement. Neither party has executed
this Agreement in reliance on any representations, warranties, or statements
made by the other party hereto other than those expressly set forth herein.
12. COUNTERPARTS
This Agreement may be executed in several counterparts, all of which shall
be deemed to constitute one and the same instrument and shall become effective
when one or more counterparts have been signed by each of the parties and
delivered to the other party, it being understood that both parties need not
sign the same counterpart. Facsimile signatures shall be considered as valid
and binding as original signatures for all purposes under this Agreement.
13. NEGOTIATIONS
This Agreement and the language in all parts herein shall in all cases be
construed as a whole, according to their fair meaning, and no presumption shall
be inferred or implied that the terms hereof be more strictly construed against
one party as opposed to another by reason of the rule of construction in which a
document is to be construed more strictly against the party who has prepared the
same, it being agreed and acknowledged that the parties and their
representatives have participated in the drafting and negotiation of this
Agreement.
14. SEVERABILITY
If any term or other provision of this Agreement is invalid, illegal or
incapable of being enforced by any law or public policy, all other terms and
provisions of this Agreement shall nevertheless remain in full force and effect
so long as the economic or legal substance of the transactions contemplated
hereby is not affected in any manner materially adverse to any party. Upon such
determination that any term or other provision is invalid, illegal or incapable
of being enforced, the parties hereto shall negotiate in good faith to modify
this Agreement so as to effect the original intent of the parties as closely as
possible in an acceptable manner in order that the transactions contemplated
hereby are consummated as originally contemplated to the greatest extent
possible.
15. APPLICABLE LAW
This Agreement will be governed by the laws of the State of Ohio.
16. AUTHORITY TO EXECUTE
OMG warrants that the individual who executes this Agreement on its behalf
and on behalf of all the entities referred to collectively as "the Company" has
the authority to do so and has received any necessary approval of the Board of
Directors.
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IN WITNESS WHEREOF, OMG has executed this Agreement as its free act and
deed, on behalf of itself and all the entities referred to collectively as "the
Company" this 2nd day of July, 2003.
OM Group, Inc.
By: /s/ Xxxxxxx X. Xxxxx
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Xxxxxxx X. Xxxxx
Vice President, Secretary, General Counsel
On behalf of OM Group, Inc.
and on behalf of all entities referred to
collectively as "the Company"
Agreed and accepted by Xxxxxx X. Xxxxxx, this 27th day of June, 2003.
/s/ Xxxxxx X. Xxxxxx
----------------------------
Xxxxxx X. Xxxxxx
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