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EXHIBIT 10.27
CONFIDENTIAL
SEPARATION AGREEMENT
AND GENERAL RELEASE OF CLAIMS
This Separation Agreement and General Release of Claims
("Agreement") is entered into between Hercules Incorporated ("Employer"), and
Xxxxxx XxxXxxxxx ("Employee").
In consideration of the mutual promises and covenants
contained herein and other good and valuable consideration, the receipt of which
hereby is acknowledged, the parties agree as follows:
1. SEPARATION DATE. Effective upon the close of business on June 30, 2001,
Employee shall cease to be employed by Employer (the "Separation Date")
and shall become a Pensioner (as that term is defined in the Hercules
Retirement Pension Plan) effective July 1, 2001. Between now and the
Separation Date and for 30 days following said Separation Date on an as
needed" basis (at no additional charge to Employer), Employee shall
assist in transitioning his duties and responsibilities, and perform
such other duties and responsibilities as he may be assigned that are
not inconsistent therewith.
2. SEVERANCE PAYMENT. Within twenty (20) days of receipt of this
Agreement, executed by Employee, and provided Employee has not revoked
this Agreement in accordance with paragraph 16 below, Employer shall
pay to Employee severance in the amount of One Million Six Hundred
Fifty Thousand dollars ($1,650,000.00), less all applicable
withholdings and deductions. Employee expressly waives all rights to
benefits under the Merger Severance Plan, Change in Control Agreement,
Severance Plan, and under any and all other plans or agreements
purporting to provide for severance payments.
3. SPECIAL PENSION BENEFITS. In addition to Employee's regular benefit
entitlement under the Pension Plan of Hercules Incorporated, Employee
will be granted a special pension benefit payable under the Hercules
Employee Pension Restoration Plan of $13,172.59 per month effective
July 1, 2001, such amount payable until age 55 after which the amount
will be $11,312.43, subject to optional forms of payment elections
pursuant to the Pension Plan of Hercules Incorporated. This benefit is
derived by adding 5-1/2 years to Employee's current age and three years
to Employee's current credited service, then using these additions to
calculate Employee's pension entitlement pursuant to the Pension Plan
of Hercules Incorporated and subtracting the benefit calculated not
using these additions. The total lifetime benefit from all Plans will
be $14,376.95 per month payable as a single life annuity.
Additionally, Employee shall be entitled to a special pension benefit
of $16,677 per year payable in monthly installments for a period
commencing July 1, 2001 and ending June 30, 2011. This benefit is not
subject to the 5l% lump sum payment option but is subject to the normal
joint and survivor option election provisions of the Pension Plan of
Hercules Incorporated.
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All of the additional benefits payable pursuant to the terms of this
Agreement are payable under the Hercules Pension Restoration Plan which
is a nonqualified pension plan payable from the assets of Hercules
Incorporated.
4. ACCRUED VACATION PAY. Employer shall pay to Employee his earned but not
taken plus accrued vacation calculated as of June 30, 2001 in the
amount of 54 days, less 5 days taken in 2001, such amount equal to
Ninety-Four Thousand Five Hundred Forty dollars and Fifty-Eight cents
($94,540.58), less applicable deductions and withholdings. Employee
accepts this payment in full satisfaction for vacation time and hereby
acknowledges and agrees that he is not entitled to any additional
payment for accrued vacation time.
5. Employee meets the age and severance requirement to be a Pensioner as
that term is defined in the Pension Plan of Hercules Incorporated. As
such, Employee will be eligible to continue participation in the Health
Care Plans applicable to Pensioners and the Hercules Executive Survivor
Benefit Plan.
6. DENTAL BENEFIT CONTINUATION. Upon an appropriate triggering event,
Employer shall issue to Employee notice of his right to elect continued
dental coverage in accordance with the Consolidated Omnibus Budget
Reconciliation Act ("COBRA"). If Employee elects continuation coverage,
Employee shall be responsible for paying 100% of the premiums and
administrative fees.
7. IMPACT OF SEVERANCE ON OTHER BENEFITS. Except as expressly provided in
this Agreement, or pursuant to the terms of benefit plans applicable to
Pensioners, both Employee's and his dependents' participation in,
coverage by and entitlement to all compensation, fringe benefit and
employee benefit programs of Employer shall cease upon the Separation
Date. Employer and Employee specifically agree that Employee is, and
will remain, eligible for Retiree Medical Coverage as long as it is
offered to other pensioners from the same employment status as Employee
and remain eligible to participate in the Hercules Executive Survivor
Benefit Plan.
Pursuant to Hercules benefit plan policy applicable to pensioners,
Employee is eligible to enroll Employee and his eligible dependents in
any of the available Health Care Plans applicable to Pensioners. Under
this Policy and as long as it is available to Pensioners, Employee may
suspend participation for a period of time and then re-enroll at a
later date. Hercules reserves the right to amend, suspend or terminate
this Plan at any time.
Employee, as a participant in the Hercules Executive Survivor Benefit
Plan, will maintain coverage applicable to pensioners in the amount of
two times final annual salary ($1MM). This is a non-insured benefit and
not subject to tax gross-up.
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8. COOPERATION FOLLOWING THE SEPARATION DATE. Employee agrees that he will
cooperate with any reasonable request of Employer to continue to aid in
the transition of his function or to answer questions regarding his
functional area following the Separation Date. Employee, prior to June
30, 2001, agrees to list all open projects, accountabilities and
unfinished assignments with a description of status.
9. AGREEMENT TO RESIGN BOARD APPOINTMENT. Employee agrees to resign as of
the next meeting from all Board assignments applicable to the Company,
affiliated Companies or subsidiaries of Hercules.
10. NO ADMISSION. The benefits provided to Employee in this Agreement are
not intended to be, and shall not be construed as, any admission of
liability by Employer or of any improper conduct on Employer's part,
all of which Employer specifically denies.
11. COMPANY INFORMATION.
(a) Employee represents that he has returned or will
immediately return to Employer all "Company Information," including,
without limitation, customer information, formulary information,
product and pricing information, mailing lists, reports, files,
memoranda, records and software, credit cards, door and file keys,
computer access codes and disks and instructional manuals, and other
property which Employee received or prepared or helped prepare in
connection with Employee's employment with Employer, and Employee will
not retain any copies, duplicates, reproductions or excerpts thereof.
The term "Company Information" as used in this Agreement means (i)
confidential information of Employer, including without limitation
information received from third parties under confidential conditions,
and (ii) other information; including technical, business or financial
information or trade secrets, the use or disclosure of which might
reasonably be construed to be contrary to the interests of Employer or
its affiliates.
(b) The parties agree that in the course of Employee's
employment, Employee has acquired Company Information as defined in
paragraph 11(a). Employee understands and agrees that such Company
Information has been disclosed to Employee in confidence and for the
use only on behalf of Employer. Employee acknowledges that he has no
ownership right or interest in any Company Information used or
developed during the course of his employment. Employee understands and
agrees that (i) Employee will keep such Company Information
confidential at all times after his employment with Employer, and (ii)
Employee will not make use of Company Information on his own behalf, or
on behalf of any third party.
(c) Employee further acknowledges that he was privy to
confidential and privileged information during the course of his
employment in his capacity as Chief Financial Officer and Vice Chairman
of the Board of Directors for the Employer.
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(d) Employee will be permitted to retain the computer and fax
machine provided by Hercules and will be disconnected effective July 1,
2001 from Hercules provided internet, intranet and other telephone line
connections. In consideration of Hercules transferring such computer
and fax equipment to Employee, Employee will cooperate with Hercules to
download and transfer to Hercules all files contained therein and erase
such files thereupon from the computer.
12. GENERAL RELEASE OF CLAIMS AND COVENANT NOT TO XXX. Employee for himself
and his respective heirs, administrators, executors, agents,
beneficiaries and assigns, does waive, release and forever discharge
Employer (as defined below) of and from any and all Claims (as defined
below). Employee agrees not to file a lawsuit to assert any Claim and
further agrees that he will not counsel, assist or encourage any other
person to assert any rights or demands or causes of action against
Employer or to counsel, assist or encourage any other person to seek
any damages, penalties, losses, attorneys' fees, costs or expenses
against Employer. This release covers all Claims arising from the
beginning of time up to and including the date of this Agreement, but
does not cover Claims relating to the validity or enforcement of this
Agreement, or to Claims for legally mandated benefits and vested
benefits under any qualified or non-qualified savings and pension plans
or welfare plans in which Employee may have participated or will
continue to participate in, or any other rights or claims that may
arise after this Agreement is executed.
The following provisions further explain this general release
and covenant not to xxx:
(a) DEFINITION OF "CLAIMS". "Claims" includes without
limitation all actions or demands of any kind that Employee now has, or
may have or claim to have in the future. More specifically, Claims
include rights, causes of action, damages, penalties, losses,
attorneys' fees, costs, expenses, obligations, agreements, judgments
and all other liabilities of any kind or description whatsoever, either
in law or in equity, whether known or unknown, suspected or
unsuspected.
The nature of Claims covered by this release and covenant not
to xxx includes without limitation all actions or demands in any way
based on Employee's employment with Employer, the terms and conditions
of such employment or Employee's separation from employment. More
specifically, all of the following are among the types of Claims which
are waived and barred by this release and covenant not to xxx:
- Contract Claims (whether express or implied);
- Tort Claims, such as for defamation or emotional distress;
- Claims under federal, state and municipal laws, regulations,
ordinance or court decisions of any kind;
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- Claims of discrimination, harassment or retaliation, whether
based on race, color, religion, gender, sex, age, sexual
orientation, handicap and/or disability, national origin or
any other legally protected class;
- Claims under the AGE DISCRIMINATION IN EMPLOYMENT ACT, Title
VII of the Civil Rights Act of 1964, as amended, the Americans
with Disabilities Act and similar state statutes and municipal
ordinances;
- Claims under the Employee Retirement Income Security Act, the
Fair Labor Standards Act, state wage payment laws and state
wage and hour laws;
- Claims for wrongful discharge; and
- Claims for reasonable attorneys' fees, including litigation
expenses and costs.
Nothing contained in the foregoing portion of this paragraph
12 shall be construed to release Employer, or any insurance carrier
providing insurance coverage to Employer or its directors and officers,
from any obligation (if any exists) which Employer or such insurance
carrier may otherwise have to defend or indemnify Employee in any
action, suit or proceeding brought by a third party against Employee
based on or arising from Employee's actions as an officer or director
of Employer prior to the Separation Date.
(b) DEFINITION OF "EMPLOYER". "Employer" includes without
limitation Hercules Incorporated and its respective past, present and
future parents, affiliates, subsidiaries, divisions, predecessors,
successors, assigns, employee benefit plans and trusts. It also
includes all past, present and future managers, directors, officers,
partners, agents, employees, attorneys, representatives, consultants,
associates, fiduciaries, plan sponsors, administrators and trustees of
each of the foregoing.
(c) EMPLOYEE'S ACKNOWLEDGMENT OF SCOPE OF RELEASE. Employee
declares and agrees that any Claims he may have incurred or sustained
may not be fully known to him and may be more numerous and more serious
than he now believes or expects. Further, in making this Agreement,
Employee relies wholly upon his own judgment of the future development,
progress and result of said Claims, both known and unknown, and
acknowledges that he has not been influenced to any extent whatsoever
in the making of this Agreement by any representations or statements
regarding said Claims made by individuals or entities who are within
the definition of Employer above. Employee further acknowledges that he
accepts the terms herein in full settlement and satisfaction of all
such Claims.
13. AGREEMENT CONFIDENTIAL. Employee agrees to keep this Agreement and its
terms confidential except as may be required to enforce the Agreement
or to obtain legal or tax advice.
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14. NON-DISPARAGEMENT. Employer and Employee agree that they will not
engage in any activity or make any statement that may disparage or
reflect negatively on Employer or Employee, including those entities
and individuals related to Employer as defined in the Release section
of this Agreement.
15. CONSIDERATION PERIOD. Employee acknowledges that he has been provided
with a period of twenty-one (21) days to consider the terms of this
offer from the date this Agreement first was presented to him on June
15, 2001. Employee agrees that any changes to this offer, whether
material or immaterial, will not restart the running of the 21-day
period.
- Employee agrees to notify Employer of his acceptance
of this Agreement by delivering a signed and
witnessed copy to Employer, addressed to the
attention of Xxxxxx X. Xxxxxxxxxx, no later than July
6, 2001. Employee understands that he may take the
entire 21-day period to consider this Agreement.
Employee may return this Agreement in less than the
full 21-day period only if his decision to shorten
the consideration period is knowing and voluntary and
was not induced in any way by Employer.
- By signing and returning this Agreement, Employee
acknowledges that the consideration period afforded
Employee a reasonable period of time to consider
fully each and every term of this Agreement,
including the release and covenant not to xxx, and
that Employee has given the terms full and complete
consideration.
16. REVOCATION PERIOD. Employee acknowledges that he shall have seven (7)
days after signing this Agreement to revoke it if he chooses to do so.
If Employee elects to revoke this Agreement, he shall give written
notice of revocation to Employer by delivering it to X. X. Xxxxxxxxxx
in such a manner that it is actually received within the seven-day
period.
17. ADVICE TO CONSULT LEGAL REPRESENTATIVE. Employee acknowledges that he
has been advised to consult with legal counsel of his choosing, at his
own expense, regarding the meaning and binding effect of this Agreement
before signing it.
18. KNOWING AND VOLUNTARY AGREEMENT. Employee, intending to be legally
bound hereby, certifies and warrants that he has read carefully this
Agreement and has executed it voluntarily and with full knowledge and
understanding of its significance, meaning and binding effect. Employee
further declares that he is competent to understand the content and
effect of this Agreement, and that his decision to enter into this
Agreement has not been influenced in any way by fraud, duress,
coercion, mistake or misleading information.
19. HEADINGS. The headings contained in this Agreement are not a part of
the Agreement and are included solely for ease of reference.
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20. INTEGRATION AND MODIFICATION. Employee declares and represents that no
promise or agreement has been made to him other than those expressed
herein. Except as stated herein, this Agreement constitutes the entire
agreement of the parties and supersedes all prior understandings,
whether oral or written, between them. Any modification of this
Agreement must be made in writing and signed by all parties.
21. SEVERABILITY. If any provision of this Agreement is or shall be
declared invalid or unenforceable by a court of competent jurisdiction,
the remaining provisions shall not be affected thereby and shall remain
in full force and effect.
22. GOVERNING LAW. Except to the extent any such laws are preempted by
Federal law, the parties agree that the terms of this Agreement shall
be governed by the laws of Delaware without giving effect to the choice
of laws principles of any state, and that either party may pursue
its/his respective rights hereunder in any court of competent
jurisdiction.
23. Employee has received letter dated June 12, 2001 from X. X. Xxxxx
regarding "Long-Term Incentive Retirement Elections including schedule
of "Stock Options - Expiration Dates". These options will continue to
be administered pursuant to the terms of the Long-Term Incentive Plan
dated April 29, 1999 (copy attached).
IN WITNESS WHEREOF, and with the intention of being legally
bound, the parties have executed this Agreement on the dates noted below.
AGREED TO AND ACCEPTED
/s/ Xxxxxx XxxXxxxxx
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Xxxxxx XxxXxxxxx
Date: June 21, 2001
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HERCULES INCORPORATED
By: /s/ Xxxxxx X. Xxxxxxxxxx
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Title: Office of the Chairman
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Date: June 21, 2001
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