SETTLEMENT AGREEMENT AND GENERAL WAIVER OF ALL RIGHTS AND CLAIMS
Exhibit 10.1
SETTLEMENT AGREEMENT AND GENERAL
WAIVER OF ALL RIGHTS AND CLAIMS
WAIVER OF ALL RIGHTS AND CLAIMS
This Settlement Agreement and General Waiver of All Rights and Claims (the “Agreement”), by
and between Tecumseh Products Company (the “Company”) and Xxxxx X. Xxxxx (“Xxxxx”), is made
effective pursuant to the terms of this Agreement.
WHEREAS, the Company employed Xxxxx pursuant to an Employment Agreement dated August 1, 2007
(the “Employment Agreement”) as amended by a First Amendment to Employment Agreement (the “First
Amendment”) and a Letter Agreement dated November 20, 2008 (the “Letter Agreement”) (collectively,
the Employment Agreement, First Amendment and Letter Agreement will be referenced as the
“Employment Agreements”);
WHEREAS, Xxxxx’x employment with the Company has terminated;
WHEREAS, the Company filed a Complaint in the Circuit Court for Lenawee County related to the
Employment Agreements (the “Litigation”) asserting various claims;
WHEREAS, the Company and the Xxxxx desire to enter into a written agreement regarding the
termination of Xxxxx’x employment, and to reach a full, final and complete resolution of the
Litigation as it relates to them, without adjudication of issues of fact or law, and without any
admission of any liability or wrongdoing by any party;
Now, therefore, for good and valuable consideration, the receipt and adequacy of which are
acknowledged, the undersigned agree as follows:
1. Termination Payment. The Company shall pay $2,590,000.00 to Xxxxx within fifteen
(15) days of the Effective Date by wire transfer or a check made payable to “Xxxxx X. Xxxxx”.
2. Dismissal of the Litigation. The Company shall cause the Litigation to be
dismissed without prejudice upon full execution of this Agreement, subject to reinstatement should
Xxxxx revoke his acceptance of this Agreement as provided in Section 8 of this Agreement.
If Xxxxx does not revoke this Agreement as provided for in Section 8 herein, then the Company
agrees and covenants that (a) the Litigation is forever terminated; (b) the Litigation shall not
be-refiled or pursued in any manner by the Company or any of its affiliates; and (c) that the
claims asserted in the Litigation (along with all other claims as more fully described in paragraph
3(d) herein) are forever released and discharged. The Company further agrees that, upon this
Agreement being fully executed and unless Xxxxx revokes the Agreement and except as required by the
federal securities laws or other applicable law, neither the Company or anyone acting on its behalf
or at its direction (including all members of its Board of Directors) will distribute or
disseminate the complaint filed in the Litigation (or any other documents related to the
Litigation) to any third party or any member of the general public.
3. Releases.
3(a) For and in consideration of the above, Xxxxx releases the Company and all present and
former directors, officers, members, shareholders, agents, representatives, attorneys, affiliated
and related entities, employees, successors and assigns of the Company (the “Released
Parties”), from any liability relating to all Claims and Rights as defined in this Section
3 of the Agreement.
3(b) Xxxxx further covenants that he will not pursue or allege any Claims or Rights against
the Released Parties in violation of this Agreement. Xxxxx acknowledges and agrees that he is
surrendering and releasing any and all rights he may have to xxx the Released Parties related to,
in any way, his employment with the Company or the termination of such employment. Xxxxx also
acknowledges and agrees that the release of all Claims and Rights is an essential and material term
of this Agreement and that without such release the Company would not have agreed to the terms of
this Agreement.
3(c) For purposes of this Agreement, the term “Claims and Rights” means:
(i) all manners of action and causes of action, charges, claims, complaints, demands,
liabilities, losses, damages, costs or expenses (including related attorneys’ fees) of any kind
whatsoever, known or unknown, suspected or unsuspected, that Xxxxx may now have or has ever had
against any of the Released Parties by reason of any act, omission, transaction, or event occurring
up to and including the Effective Date, including any manner of action or causes of action,
charges, claims, complaints, demands, liabilities, losses, damages, costs or expenses relating to
the Employment Agreements, Xxxxx’x employment with the Company or the termination thereof;
(ii) to the extent permitted by law, Claims and Rights include, without limitation, any
wrongful discharge claim, any claim relating to any contract of employment, whether express or
implied, any claim for or relating to compensation, any retirement or 401(k) plan administered by
the Company or the management, thereof, any right or benefit under any employee benefit or
compensation plan or arrangement, any claim for defamation, invasion or privacy, misrepresentation,
fraud, infliction of emotional distress, any claim of breach of covenant of good faith and fair
dealing, or any other claim relating in any way to Xxxxx’x employment relationship with the Company
or its termination;
(iii) any claims based on Title VII of the Civil Rights Act of 1964, the Civil Rights Act of
1991, the Equal Pay Act, the Rehabilitation Act of 1973, the Americans with Disabilities Act, the
Vietnam Era Veterans Readjustment Act, the Fair Labor Standards Act, the Workers Adjustment and
Retraining Notification Act, Executive Order 11246, the Employee Retirement Income Security Act of
1974 (all of these may have been amended), the Age Discrimination in Employment Act, the Older
Workers Benefit Protection Act, any claims and rights to any Company payment of group health plan
continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985 and any
similar State law (“COBRA”), including, but not limited to, any right for any Company payment of
any portion of any applicable COBRA premiums, and any other applicable federal, state, or local
laws, ordinances and regulations, including those relating to discrimination to the extent
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permitted by law. The foregoing shall not discharge the Company’s obligations under this Agreement or with
respect to Xxxxx’x vested 401(k) benefits, if any; and
(iv) Claims and Rights also include any rights or claims with respect to stock appreciation
rights, phantom shares, or stock options (whether or not vested) which are all hereby fully
terminated and of no further force and effect.
3(d) For and in consideration of the above, the Company releases and discharges Xxxxx from any
liability relating to all manners of action and causes of action, charges, claims, complaints,
demands, liabilities, losses, damages, costs or expenses (including related attorneys’ fees) of any
kind whatsoever, known or unknown, suspected or unsuspected, that the Company may now have or has
ever had against Xxxxx by reason of any act, omission, transaction, or event occurring up to and
including the Effective Date, including any manner of action or causes of action, charges, claims,
complaints, demands, liabilities, losses, damages, costs or expenses relating to the Litigation,
Xxxxx’x employment with the Company or the termination thereof.
4. No Current Claims.
4(a) Xxxxx. Xxxxx represents that he has not filed any complaints, claims, or actions
against any of the Released Parties with any federal, state or local court or governmental agency,
or any demands for arbitration. Xxxxx further agrees not to bring, continue or maintain any claim
or legal proceeding against any of the Released Parties before any court, governmental agency or
other forum by reason of any matters hereby released. If any court, governmental agency or other
forum already has or assumes jurisdiction of any complaint, claim, action or demand for
arbitration, against any of the Released Parties, Xxxxx will immediately direct that court,
governmental agency or other forum to dismiss the matter with prejudice. Xxxxx further agrees that
should any complaints, claims, actions or demands for arbitration be filed hereafter on his behalf
by any federal, state or local agency or by any other person or entity, that he will immediately
withdraw with prejudice, or cause to be withdrawn with prejudice, or dismiss with prejudice, or
cause to be dismissed with prejudice, any such complaints, claims, actions or demands for
arbitration filed against the Company. Xxxxx agrees not to authorize any other person or entity,
including any governmental agency, to seek individual remedies for him against the Company through
administrative or legal proceedings.
4(b) Company. The Company acknowledges that, except for the Litigation, it has not
filed any other lawsuit or other action against Xxxxx and has not commenced any administrative
proceeding or complaint against Xxxxx. Unless this Agreement is revoked, (i) the Company further
agrees not to bring, continue or maintain any claim or legal proceeding against Xxxxx before any
court, governmental agency or other forum by reason of any matters hereby released; and (ii) the
Company further agrees not to authorize any other person or entity, including any governmental
agency, to seek individual remedies for him against the Company through administrative or legal
proceedings. The Company warrants and covenants that there has been no assignment or transfer of
any of the claims that are being released by way of paragraph 3(d) and that the Company has the
authority to agree to the release contained in paragraph 3(d). The Company specifically
acknowledges that this Agreement and its terms have
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been authorized by its Board of Directors and that the Company has the authority and ability
to enter into this Agreement.
5. Non-Admission of Liability. The parties acknowledge that this
Agreement is entered into based upon the resolution of disputed claims and that the parties deny
liability on the claims asserted against them. This Agreement shall not be evidence of any
wrongdoing of any nature whatsoever by any of the parties.
6. Mutual Nondisparagement. Xxxxx will not disparage the Company, its
officers, directors, and shareholders or its products and services in a negative, derogatory, or
unflattering manner. Under no circumstances may Xxxxx disclose to any member of the public,
including the media, any material, negative or detrimental information relating to the Company or
its products or services or any information that is otherwise confidential information of the
Company. This provision does not preclude Xxxxx from complying with any lawfully issued subpoena
or court order. The Company (including its Directors and Officers) agree that they will not
collectively or individually disparage Xxxxx (either personally or in connection with his
employment at Company). This provision does not preclude the Company or its Directors and Officers
from complying with the federal securities laws or other applicable laws or legal process.
7. Indemnification Agreement. It is explicitly agreed that nothing in this
Agreement (including the releases contained herein) is intended to or shall affect any indemnity
obligation of the Company to Xxxxx, which shall remain in full force and effect in accordance with
its terms. The Company specifically agrees that whatever rights of indemnification Xxxxx has or
had prior to the execution of this Agreement shall not be affected or altered in any way by the
terms herein.
8. Time Period to Accept Agreement. Xxxxx has
twenty-one (21) days to review the terms of this Agreement and has been advised to consult with
counsel of his choice regarding the terms of this Agreement. By executing this Agreement, Xxxxx
acknowledges that he has been advised by his counsel of choice, he has had adequate opportunity to
consult with counsel of choice, and that he has entered into this Agreement freely and without
coercion. Xxxxx may revoke this Agreement up to seven (7) days after signing it (the
“Revocation Period”). To be effective, the revocation must be in writing and
received by the person who executed this Agreement on the Company’s behalf. If the Agreement is
not revoked within the Revocation Period, it shall be fully enforceable without any further
affirmative action by either party. This Agreement does not become effective until the Revocation
Period has expired (the “Effective Date”). Between the date of execution of this Agreement
and the Effective Date or one day after Xxxxx revokes this Agreement whichever is earlier, neither
party shall file any lawsuit or any proceeding of any nature relating to the subject matter of this
Agreement.
9. No Assignment of Claims. Xxxxx represents and warrants that he has: (a) the sole
right, title, and interest to the claims released under this Agreement, (b) not assigned or
transferred, or purported to assign or transfer, to any person or entity, any claim pursuant to
this Agreement, and (c) not assigned or transferred, nor purported to assign or transfer, to any
person or entity, the right to the monies, in whole or in part, being paid pursuant to this
Agreement.
10. Resignation. Xxxxx hereby confirms that he has resigned as an officer and director
of the Company’s affiliated entities, and as a director of the Company.
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11. Miscellaneous.
11(a) Severability. Whenever possible, each provision of this Agreement will be
interpreted in such manner as to be effective and valid under applicable law, but if any provision
of this Agreement is held to be invalid, illegal or unenforceable in any respect under any
applicable law or rule in any jurisdiction, such invalidity, illegality or unenforceability will
not affect any other provision or any other jurisdiction, but this Agreement will be reformed,
construed and enforced in such jurisdiction as if such invalid, illegal or unenforceable provision
had never been contained in this Agreement.
11(b) Complete Agreement. This Agreement embodies the complete agreement and
understanding among the parties and supersedes and preempts any prior understandings, agreements or
representations by or among the parties, written or oral, which may have related to the subject
matter of this Agreement in any way.
11(c) Counterparts. This Agreement may be executed in separate counterparts, each of
which is deemed to be an original and all of which taken together constitute one and the same
agreement.
11(d) Successors and Assigns. Except as otherwise provided in this Agreement, this
Agreement shall bind and inure to the benefit of and be enforceable by Xxxxx and the Company, and
their respective successors and assigns.
11(d) Amendment and Waiver. The provisions of this Agreement may be amended and
waived only with the prior written consent of the Company and Xxxxx.
11(e) No Strict Construction. The language used in this Agreement shall be deemed to
be the language chosen by the parties to express their mutual intent and no rule of strict
construction shall be applied against either party such that neither party shall be deemed to be
drafter of this Agreement.
11(f) Governing Law. This Settlement Agreement shall be governed and construed in
accordance with Michigan law.
11(g) Headings. The paragraph and section headings in this Agreement are inserted
merely for the convenience of reference only and shall not be used to construe, affect or modify
the terms of any paragraph or provision of this Agreement.
11(h) Prevailing Party Recovers its Fees. The parties
agree that in the event of any breach of this Agreement, the prevailing party shall recover its
reasonable and necessary attorney’s fees and costs in connection with any suit to enforce or defend
the enforcement of the terms of this Agreement.
{Signatures on following page}
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The parties have executed this Settlement Agreement and General Waiver of All Rights and
Claims on the dates noted below.
| TECUMSEH PRODUCTS COMPANY |
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| By: | /s/ Xxxxxxx Xxxxx | ||||
| Xxxxxxx Xxxxx | |||||
| Its: | Chairman of the Governance and Nominating Committee and Lead Director of the Board of Directors |
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| Date: Oct. 5, 2009 | |||||
| XXXXX X. XXXXX |
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| /s/ Xxxxx X. Xxxxx | |||||
| Date: Oct. 5, 2009 | |||||
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