EXHIBIT 10-P
SEPARATION AGREEMENT AND GENERAL RELEASE
THIS SEPARATION AGREEMENT AND GENERAL RELEASE (the "AGREEMENT") is made
and entered into as of this 11th day of March, 2004 (the "EFFECTIVE DATE"), by
and between TruServ Corporation, a Delaware corporation (the "COMPANY"), and
Xxxxxxx X. Xxxxxx ("XXXXXX").
RECITALS
X. Xxxxxx has been employed by the Company as its Senior Vice
President, Merchandise Supply Chain.
X. Xxxxxx'x employment with the Company will terminate effective
February 27, 2004.
NOW, THEREFORE, in consideration of the above premises and the
following mutual covenants and conditions, the parties agree as follows:
1. Termination of Employment. Effective the close of business on
February 27, 2004, Xxxxxx'x employment with the Company is terminated along with
any other positions he may hold with the Company. Xxxxxx agrees that he will not
hereafter seek reinstatement, recall or re-employment with the Company.
2. Payments. Xxxxxx shall receive the following amounts and
entitlements in connection with his separation from the Company:
(a) Salary Continuation. The Company shall pay Xxxxxx one hundred and
four (104) weeks (the "Severance Period") of separation pay at Xxxxxx'x base
salary [$307,000 per annum ] as of February 27, 2004, payable in semi-monthly
installments on the normal payroll dates, for a total of $614,000.00 less all
applicable witholdings. These payments will commence, as soon as
administratively possible, after receipt of this signed release agreement.
(b) Bonus. Xxxxxx shall receive incentive pay of $108,324.00 under the
Key Associates Incentive Plan For 2003 (the "2003 PLAN"); The incentive pay
shall be payable in a single lump sum, less all applicable withholdings, at the
same time such incentives are paid by the Company to all other employees of the
Company receiving incentives under such program. In addition, Xxxxxx will
receive $117,806,00 less applicable withholdings, under the Long Term Incentive
Plan for 2002-2003 plan cycle. The foregoing notwithstanding, Xxxxxx agrees that
he is not eligible for any other special performance bonuses nor future payments
under any of the above or other existing plans.
(c) Vacation/Expenses. Xxxxxx agrees that as of the date of his
termination, he was entitled to twenty four (24 ) days of accrued but unused
vacation. Such payment , less applicable withholdings, shall be made to Xxxxxx
no later than the first payroll date after February 27, 2004. Xxxxxx agrees to
submit whatever business expenses he has incurred but not yet submitted for
reimbursement to the Company within seven (7) days. The Company will reimburse
the reasonable expenses in accord with its usual policies.
(d) Medical and Dental Benefits. Xxxxxx may elect to continue his
medical and dental insurance coverage, as mandated by COBRA for up to 18 months.
Xxxxxx shall be solely responsible for paying the COBRA premiums.
(e) Withholding. The Company and Xxxxxx acknowledge and agree that all
payments made pursuant to this Paragraph 2 are "wages" for purposes of FICA,
FUTA and income tax withholding and the Company shall therefore withhold from
any payments hereunder the amounts it determines to be necessary to satisfy all
tax withholding obligations.
(f) Outplacement. The Company shall pay for up to 6 months of
outplacement services for Xxxxxx, to be provided by an outplacement service
provider selected by the Company. It is agreed that the Company's sole
obligation in this respect is to pay, directly to the outplacement firm, for
such outplacement services, as contracted with the provider. Any dispute between
Xxxxxx and the outplacement agency shall be deemed a dispute solely between
Xxxxxx and the outplacement agency and shall not in any way be construed as a
breach of this Release.
(g) Pension and SERP. TruServ, through its outside providers, will pay
any and all sums due to Xxxxxx under the TruServ Corporation Defined Lump Sum
Plan and the TruServ Corporation Supplemental Retirement Plan, in effect as of
the Xxxxxx'x last day of service with the Company. Such payments will be made to
Xxxxxx, or his qualified designee, within ninety (90) days of receipt of this
executed agreement. The ninety (90) day commitment is based upon the assumption
that Xxxxxx complies with all the administrative provisions of the Plan for
payment.
(h) Other. Except as otherwise set forth in this Paragraph 2, no other
sums of any kind (contingent or otherwise) shall be paid to Xxxxxx in respect of
his employment by the Company, or as additional separation amounts, and any
further such sums or amounts (whether or not owed) are hereby expressly waived
by Xxxxxx. Xxxxxx acknowledges that all other employee benefits cease as of
February 27, 2004.
3. General Release. As a material inducement to the Company to enter
into this Separation Agreement and General Release and in consideration of the
payments to be made by the Company to Xxxxxx in Paragraph 2 above, Xxxxxx, with
full understanding of the contents and legal effect of this General Release and
having the right and opportunity to consult with his counsel, waives, releases
and discharges the Company, its shareholders, officers, directors, supervisors,
members, managers, employees, agents, representatives, attorneys, parent
companies, divisions, subsidiaries and affiliates, and all related entities of
any kind or nature, and its and their predecessors, successors, heirs,
executors, administrators, and assigns (collectively, the "RELEASED PARTIES")
from any and all claims, actions, causes of action, grievances, suits, charges,
or complaints of any kind or nature whatsoever, that he ever had or now has,
whether fixed or contingent, liquidated or unliquidated, known or unknown,
suspected or unsuspected, and whether arising in tort, contract, statute, or
equity, before any federal, state, local, or private court, agency, arbitrator,
mediator, or other entity, regardless of the relief or remedy. Without limiting
the generality of the foregoing, it being the intention of the parties to make
this General Release as broad and as general as the law permits, this Release
specifically includes any and all subject matter and claims arising from any
alleged violation by the Released Parties under the Age Discrimination in
Employment Act of 1967, as amended; Title VII of the Civil Rights Act of 1964,
as amended; the Civil Rights Act of 1866, as amended by the Civil Rights Act of
1991 (42 U.S.C. Section 1981); the Rehabilitation Act of 1973, as amended; the
Employee Retirement Income Security Act of 1974, as amended ("ERISA"); the
Illinois Wage Payment and Collection Act; the Illinois Human Rights Act, the
Xxxx County Human Rights Ordinance, the Chicago Human Rights Ordinance, and
other similar state or local laws; the Americans with Disabilities Act; the
Family and Medical Leave Act; the Worker Adjustment and Retraining Notification
Act; the Older Worker Benefits Protection Act, the Equal Pay Act; Executive
Order 11246; Executive Order 11141; and any other statutory claim, employment or
other contract or implied contract claim under any company severance policy or
plan, and under any incentive compensation program, claim for equity or phantom
equity, or common law claim for wrongful
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discharge, breach of an implied covenant of good faith and fair dealing,
defamation, intentional infliction of emotional distress, negligence or invasion
of privacy arising out of or involving his employment with the Company, the
termination of his employment with the Company, or involving any continuing
effects of his employment with the Company or termination of employment with the
Company. Xxxxxx further acknowledges that he is aware that statutes exist that
render null and void releases and discharges of any claims, rights, demands,
liabilities, action and causes of action which are unknown to the releasing or
discharging party at the time of execution of the release and discharge. Xxxxxx
hereby expressly waives, surrenders and agrees to forego any protection to which
he would otherwise be entitled by virtue of the existence of any such statute in
any jurisdiction including, but not limited to, the State of Illinois.
Excluded from this release are any claims which cannot be waived or
released by law, including but not limited to the right to file a charge with or
participate in an investigation conducted by certain government agencies. Xxxxxx
does, however, waive Xxxxxx'x right to any monetary recovery should any agency
(such as the Equal Employment Opportunity Commission) pursue any claims on
Xxxxxx'x behalf. Xxxxxx represents and warrants that Xxxxxx has not filed any
complaint, charge, or lawsuit against the Company with any government agency or
any court.
4. Covenant Not to Xxx. Xxxxxx, for himself, his heirs, executors,
administrators, successors and assigns agrees not to bring, file, charge, claim,
xxx or cause, assist, or permit to be brought, filed, charged or claimed any
action, cause of action, or proceeding regarding or in any way related to any of
the claims described in Paragraph 3 hereof, and further agrees that this
Agreement is, will constitute and may be pleaded as, a bar to any such claim,
action, cause of action or proceeding. The foregoing notwithstanding, this
Paragraph 4 shall not preclude Xxxxxx from (i) filing a claim with respect to
the enforcement of the terms of this Agreement, (ii) receiving vested benefits
under any employee pension plan, as defined in Section 3(2) of ERISA; (iii)
enforcing rights, if any, to indemnification as may be provided for under the
Company's by-laws or under any directors' and officers' liability insurance; and
(iv) challenging the release of his age discrimination claims under the ADEA. If
Xxxxxx violates this Agreement by suing the Company, other than under the ADEA,
Xxxxxx shall be liable to the Company for its reasonable attorneys' fees and
other litigation costs incurred in defending against such a suit. Alternatively,
in the event Xxxxxx sues the Company (other than under the ADEA), Xxxxxx may, at
the Company's option, be required to return all monies and other benefits paid
to Xxxxxx pursuant to this Agreement.
5. Breach/Indemnification. Xxxxxx will fully indemnify the Company and
its shareholders, members, managers, officers, directors, employees and
independent contractors against and will hold its shareholders, members,
managers, officers, directors, employees and independent contractors harmless
from any and all claims, costs, damages, demands, expenses (including without
limitation attorneys' fees), judgments, losses or other liabilities of any kind
or nature whatsoever arising from or directly or indirectly related to any
material breach or failure by Xxxxxx to comply with any or all of the provisions
of this Agreement. Xxxxxx further agrees that his continuing entitlement to the
payments described in Paragraph 2(a) is contingent on his compliance with the
provisions of this Agreement. Further, he acknowledges that a breach of any
provision of this Agreement by him shall entitle the Company, at its sole
discretion, to cease making payments under this Agreement and to recover amounts
already paid hereunder.
6. Nondisparagement. From and after February 27, 2004, Xxxxxx
represents that he has not made, and agrees that he will not make, release or
cause to be made or released any disparaging, untrue, or misleading written or
oral statements about or relating to the Company or its products or services (or
about or relating to any officer, director, member, agent, employee, or other
person acting on the Company's behalf).
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7. Protective Agreement.
(a) Confidentiality. Xxxxxx agrees that he will not, for any reason
whatsoever, whether voluntarily or involuntarily, use for himself or disclose to
any person any "CONFIDENTIAL INFORMATION" of the Company acquired by Xxxxxx
during his relationship with the Company and its predecessors. Confidential
Information includes but is not limited to information entrusted or made
available to Xxxxxx, whether in writing, in computer form or conveyed orally,
that is not generally known by others in the form in which such information is
used by the Company and that gives the Company a competitive advantage over
other companies which do not have access to this information. Examples of such
information include: (i) lists of actual or prospective members of the Company,
vendor lists, vendor and supplier prices lists, vendor and supplier contracts,
vendor and supplier cost lists; (ii) Marketing, strategic and budget plans;
(iii) Program, product and service development plans, schedules and budgets;
(iv) Existing or new programs, products and services and product, service or
marketing concepts under development at or for the Company, and the status of
such development; (v) Information about plans to improve, upgrade or change the
Company's programs, products and services; (vi) any matters relating to the
legal affairs of the Company or matters relating to the activities of the
Company's Board of Directors; (vii) any confidential information or trade
secrets of any third party provided to the Company in confidence or subject to
other use or disclosure restrictions or limitations; and (viii) any other
information, written, oral or electronic, which pertains to the Company's
affairs or interests or with whom or how the Company does business. The Company
acknowledges and agrees that Confidential Information does not include (i)
information properly in the public domain, or (ii) information in Xxxxxx'x
possession prior to the date of his original employment with the Company or its
predecessors, except to the extent that such information is or has become a
trade secret of the Company or is or otherwise has become the property of the
Company. Xxxxxx further acknowledges and agrees that he is estopped from and
will not dispute in any proceeding the enforceability of this Paragraph 7(a).
(b) Restrictions. Except on behalf of the Company, Xxxxxx agrees
that he will not, at any time prior to February 27, 2005, directly or
indirectly:
(1) solicit or accept if offered to him, with or without
solicitation, on his own behalf or on behalf of any other person or
entity, the services of any person who is a current employee of the
Company (or was an employee of the Company during the year preceding
such solicitation), nor solicit any of the Company's current employees
(or any individual who was an employee of the Company during the year
preceding such solicitation) to terminate employment or an engagement
with the Company, nor agree to hire any current employee (or any
individual who was an employee of the Company during the year preceding
such hire) of the Company into employment with him or any other person
or entity; or
(2) become associated, whether as an investor (excluding
investments representing less than one percent (1%) of the common stock
of a public company), lender, owner, stockholder, officer, director,
employee, agent, consultant or in any other capacity, with the
following businesses or related entities: Ace Hardware Corporation,
Do-It-Best Corporation, Sears, Distribution America, Handy, Five Star
or Xxxxxx, Inc., their affiliates or subsidiaries.
(c) Enforcement. It is agreed that breach of this Paragraph 7 will
result in irreparable harm and continuing damages to the Company and its
business and that the Company's remedy at law for any such breach or threatened
breach, will be inadequate and, accordingly, in addition to such other remedies
as may be available to the Company at law or in equity in such event, any court
of competent
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jurisdiction may issue a temporary and permanent injunction, without the
necessity of the Company posting bond and without proving special damages or
irreparable injury, enjoining and restricting the breach, or threatened breach,
of this Paragraph 7, including, but not limited to, any injunction restraining
the breaching party from disclosing, in whole or part, any Confidential
Information. Xxxxxx will pay all of the Company's costs and expenses, including
reasonable attorneys' and accountants' fees, incurred in enforcing this
Paragraph 7.
8. Company Property. Xxxxxx agrees to return to the Company by February
27, 2004 all Company property in his possession or control, including but not
limited to all Company credit cards, documents, memoranda, information (either
in electronic or paper form), computers or related equipment, telephones, PDAs,
keys, identification cards and anything else belonging to the Company.
Additionally, Xxxxxx agrees not to enter, damage, interfere with, log on to, or
otherwise use in any way any Company information system at any time. Xxxxxx
further represents that he has not destroyed, deleted or otherwise removed from
the Company any property belonging to the Company and agrees that he will not
destroy, delete or otherwise remove from the Company any property belonging to
the Company.
9. Severability. If any provision of this Separation Agreement and
General Release shall be found by a court to be invalid or unenforceable, in
whole or in part, then such provision shall be construed and/or modified or
restricted to the extent and in the manner necessary to render the same valid
and enforceable, or shall be deemed excised from this Agreement, as the case may
require, and this Agreement shall be construed and enforced to the maximum
extent permitted by law, as if such provision had been originally incorporated
herein as so modified or restricted, or as if such provision had not been
originally incorporated herein, as the case may be. The parties further agree to
seek a lawful substitute for any provision found to be unlawful; provided, that,
if the parties are unable to agree upon a lawful substitute, the parties desire
and request that a court or other authority called upon to decide the
enforceability of this Agreement modify the Agreement so that, once modified,
the Agreement will be enforceable to the maximum extent permitted by the law in
existence at the time of the requested enforcement.
10. Waiver. A waiver by the Company of a breach of any provision of
this Separation Agreement and General Release by Xxxxxx shall not operate or be
construed as a waiver or estoppel of any subsequent breach by Xxxxxx. No waiver
by the Company shall be valid unless in writing and signed by an authorized
officer of the Company.
11. Miscellaneous Provisions.
(a) Announcements. Xxxxxx agrees that he will keep the terms and
amounts set forth in this Separation Agreement and General Release completely
confidential and, except as may be required by law, will not disclose any
information concerning this Agreement's terms and amounts to any person other
than his or its attorney, accountant tax advisor or spouse. Xxxxxx agrees and
acknowledges that he will make no announcement about his termination or about
the affairs of the Company, which is in any manner inconsistent with the terms
of this Agreement, and further agrees and acknowledges that any press or other
written, oral or electronic public releases, or statements concerning his
termination, the terms of this Agreement or about the affairs of the Company
shall be issued by the Company only.
(b) Knowing and Voluntarily. Xxxxxx represents and certifies that
he has carefully read and fully understands all of the provisions and effects of
this Agreement, has knowingly and voluntarily entered into this Agreement freely
and without coercion, and acknowledges that on February 27, 2004, by this
Agreement, the Company advised him to consult with an attorney prior to
executing this
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Agreement and further advised him that he has until March 18, 2004, within which
to consider this Agreement and Xxxxxx has been advised that if he signs this
agreement, he has seven days following the date on which he signs this agreement
to revoke it, and this agreement will not be effective until after this seven
day period had lapsed. If Xxxxxx does not accept this Agreement within such
twenty-one (21) day period, or if Xxxxxx accepts and then revokes within the
seven (7) day period, the offer contained in this Agreement shall expire and be
of no further force or effect. Xxxxxx is voluntarily entering into this
Agreement and neither the Company nor its agents, representatives, or attorneys
made any representations concerning the terms or effects of this Agreement other
than those contained in the Agreement itself. Further, Xxxxxx acknowledges that
the consideration provided him in exchange for his execution of this Separation
Agreement and General Release includes consideration in addition to what he
would otherwise be entitled to as a matter of law or policy of the Company.
12. Complete Agreement. This Agreement sets forth the entire agreement
between the parties, and fully supersedes any and all prior agreements or
understandings between the parties pertaining to actual or potential claims
arising from Xxxxxx'x employment with the Company or the termination of Xxxxxx'x
employment with the Company.
13. Future Cooperation. In connection with any and all claims,
disputes, negotiations, governmental or internal investigations, lawsuits or
administrative proceedings (the "LEGAL MATTERS") involving the Company, or any
of its current or former officers, employees or Board members (collectively, the
"DISPUTING PARTIES" or, individually, a "DISPUTING PARTY"), Xxxxxx agrees to
make himself available, upon reasonable notice from the Company and without the
necessity of subpoena, to provide information or documents, provide declarations
or statements regarding a Disputing Party, meet with attorneys or other
representatives of a Disputing Party, prepare for and give depositions or
testimony, and/or otherwise cooperate in the investigation, defense or
prosecution of any or all such Legal Matters, as may, in the sole judgment of
the Company, be reasonably requested. In addition, Xxxxxx agrees that, through
May 27, 2004, he shall be available from time to time and at places mutually
agreed upon so as not to interfere with Xxxxxx'x employment, to provide
information to the Company regarding the transition of his duties and
responsibilities. The company agrees to reimburse Xxxxxx for reasonable out of
pocket expenses incurred by him in connection with these services.
14. Amendment. This Agreement may not be altered, amended, or modified
except in writing signed by both Xxxxxx and the Company.
15. Joint Participation. The parties hereto participated jointly in the
negotiation and preparation of this Agreement, and each party has had the
opportunity to obtain the advice of legal counsel and to review and comment upon
the Agreement. Accordingly, it is agreed that no rule of construction shall
apply against any party or in favor of any party. This Agreement shall be
construed as if the parties jointly prepared this Agreement, and any uncertainty
or ambiguity shall not be interpreted against one party and in favor of the
other.
16. Notice. All notices, requests, demands, claims and other
communications hereunder shall be in writing. Any notice, request, demand,
claim, or other communication hereunder shall be deemed duly given (i) three (3)
business days after it is sent by registered or certified mail, return receipt
requested, postage prepaid, (ii) when receipt is electronically confirmed, if
sent by fax (provided that a hard copy shall be promptly sent by first class
mail), or (iii) one (1) business day following deposit with a recognized
national overnight courier service for next day delivery, charges prepaid, and,
in each case, addressed to the intended recipient, as set forth below:
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To the Company: TruServ Corporation
0000 Xxxx Xxxx Xxxx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000-0000
Attn: Senior Vice President, Human Resources
To the Employee: Xxxxxxx X. Xxxxxx
0000 Xxxxxxxx Xxxx
Xxxxxxxx, Xx 00000
17. Applicable Law. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of Illinois, without reference to its
conflict of law provisions. Furthermore, Xxxxxx agrees and consents to submit to
personal jurisdiction in the state of Illinois in any state or federal court of
competent subject matter jurisdiction situated in Xxxx County, Illinois. Xxxxxx
further agrees that the sole and exclusive venue for any suit arising out of, or
seeking to enforce this Agreement shall be in a state or federal court of
competent subject matter jurisdiction situated in Xxxx County, Illinois. In
addition, Xxxxxx waives any right to challenge in another court any judgment
entered by such Xxxx County court or to assert that any action instituted by the
Company in any such court is in the improper venue or should be transferred to a
more convenient forum.
18. Headings. The headings in this Agreement are inserted for
convenience only and are not to be considered a constriction of the provisions
hereof.
19. Execution of Agreement. This Agreement may be executed in several
counterparts, each of which shall be considered an original, but which when
taken together, shall constitute one Agreement.
PLEASE READ THIS AGREEMENT AND CAREFULLY CONSIDER ALL OF ITS PROVISIONS
BEFORE SIGNING IT. THIS AGREEMENT CONTAINS A RELEASE OF ALL KNOWN AND UNKNOWN
CLAIMS AND FEDERAL, STATE AND LOCAL LAWS PROHIBITING DISCRIMINATION IN
EMPLOYMENT.
IN WITNESS WHEREOF, Xxxxxx and the Company have voluntarily signed this
Separation Agreement and General Release consisting of seven (7) pages on the
date set forth above.
TRUSERV CORPORATION
By: /s/ Xxx X. Xxxxx /s/ Xxxxxxx X. Xxxxxx
---------------- -----------------------------
Its: SVP, Human Resources & Communications Xxxxxxx X. Xxxxxx
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