MUTUAL TERMINATION AND BENEFITS AGREEMENT
THIS AGREEMENT, dated as of the 18th day of January 1996, by and among
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION, a Michigan corporation
(the "Company") , and XXXXXX X. XXXXXXX ("Employee").
WITNESSETH:
WHEREAS, the Company and Employee are parties to (i) a certain Employment
Agreement dated April 20, 1990, as amended by an Addendum to Employment
Agreement dated November 25, 1992 (the "Employment Agreement") pursuant to
which Employee has been employed as the President and Chief Executive Officer
of the Company,(ii) a certain Management Retention Agreement dated
November 20, 1992 (the "Retention Agreement"), and (iii) a certain Split-Dollar
Life Insurance Agreement dated January 21, 1994 ("Split-Dollar Agreement")
and related Severance Compensation Agreement dated January 21, 1994 ("Related
Agreement"); and
WHEREAS, the Company and Employee have carried on discussions and
reached certain understandings concerning Employee's resignation as an
employee and officer of the Company; and
WHEREAS, the Employment Agreement, the Retention Agreement, the Split-Dollar
Agreement and the Related Agreement contain provisions concerning termination
benefits in the event the Employee's employment is terminated under certain
circumstances; and
WHEREAS, the Company and Employee desire to terminate and supersede
the Employment Agreement, the Split-Dollar Agreement and the Related Agreement.
NOW, THEREFORE, in consideration of the premises, the agreements and
understandings contained herein, and the payments to be made by the Company
pursuant hereto, the Company and Employee mutually agree as follows:
1. Resignation. Employee shall resign as an employee and officer of the
Company, effective 11:59 a.m., January 28, 1996 (the "Effective Date"). The
Employment Agreement, the Split-Dollar Agreement and the Related Agreement
shall remain in full force and effect until the Effective Date. The Employment
Agreement, the Split-Dollar Agreement and the Related Agreement, and all other
agreements, commitments and understandings between the Company and Employee,
whether oral or written, shall terminate and end as of the Effective Date;
provided, however, that the Retention Agreement shall continue and be
operative in accordance with Section 4 (vii) thereof with respect to any change
of control (as defined in the Retention Agreement) as may occur during
the nine-month period referred to therein. Employee shall simultaneously
resign as trustee or committee member of any Company-sponsored benefit plan,
effective as of the Effective Date.
2. Payments and Benefits. In consideration of the agreements and
undertakings of Employee contained herein, and in full accord,
satisfaction and discharge of any and all obligations, agreements
(including the Employment Agreement), commitments and understandings, the
Company shall:
a. On the later of (i) January 29, 1996; or (ii) the day following the
expiration of the seven-day period referred to in Paragraph 11
hereof (the "Payment Date"), pay Employee the sum of $402,000, less
any taxes and other deductions required to be withheld by law.
b. For the period commencing on the Effective Date and ending January
28, 1997 (the "Payment Period") , provide Employee and his family
with the full health, dental and group life and accident (but
excluding the existing split-dollar life policy) insurance benefits
presently made available by the Company to the Employee in
accordance with the Employment Agreement; provided, however, the
amount of such payments shall be reduced to reflect any duplicative
benefits provided by a successor employer of Employee.
3. Options; SARS. The following agreements are made with respect
to options theretofore or hereby issued to Employee:
a. Any options issued to Employee under the Company's 1984 or 1993
Stock Incentive Plan (the "Plan") which are vested and outstanding
on the Effective Date shall be exercisable for the period following
the Effective Date equal to the period provided in the respective
Stock Option Agreements by which such options were issued to
Employee for exercise of vested options following termination of
employment.
b. Effective as of the Payment Date, the Company shall grant Employee
stock appreciation rights on 20,000 shares of the Company' s Common
Stock, which rights shall expire on April 29, 1996 and be settled at
the spread between (i) the average of the closing bid and asked
price of the Company's Common Stock on the date settled and (ii)
$4.50.
4. Split-Dollar Arrangements. As provided in Article XII of the
Split-Dollar Agreement, on the Payment Date Employee shall pay to the
Company the Corporation's Interest in the Policy (as defined in the
Split-Dollar Agreement and determined as of the close of business on
January 26 to take into account the payment and posting of all
premiums paid by the Company prior to the Payment Date) and receive
from the Company a release of its interest in the Policy. From and
after the Payment Date, Employee shall be the owner of the Policy,
free and clear of any claims and interests of the Company, whether
under the Split-Dollar Agreement, the Related Agreement or otherwise.
Employee and the Company shall execute and deliver such documents as
the issuer of the Policy shall require to effect the relinquishment of
rights as aforesaid.
5. Release by Employee. In consideration of the payments and
reimbursements to be made hereunder by the Company (which Employee
acknowledges as good and valuable consideration and which constitute,
in whole or in part, monies or benefits to which Employee is not
otherwise entitled under the Employment Agreement or otherwise),
Employee, on behalf of himself and his heirs, legal representatives
and assigns, hereby releases and forever discharges the Company, and
its subsidiaries, divisions, units, successors, affiliates,
shareholders, directors, officers, agents, employees and former
employees (hereinafter the "Released Parties") of and from all
actions, causes of action, claims, demands, compensatory. exemplary,
statutory and punitive damages, costs, suits, debts, dues, sums of
money, accounts, reckonings, bills, covenants, contracts, liens,
controversies, agreements, promises, variances, trespasses,
executions, liability and any all consequential damages whatsoever, in
law or in equity, which Employee, individually, or in any
representative capacity, had, now has or may have or shall have
against the Released Parties by reason of any matter, fact,
representation, cause or thing of any conceivable kind and character
whatsoever, and which occurred up to the Effective Date, including
specifically, but not by way of limitation, any and all claims of
discrimination, wrongful discharge, breach of contract, fraud,
promissory estoppel, misrepresentation, retaliation, all claims under
or in connection with the Age Discrimination in Employment Act, the
Older Workers Benefit Protection Act, Title VII of the Civil Rights
Act of 1964, the Civil Rights Act of 1991, the Employee Retirement
Income Security Act of 1974, the Michigan Xxxxxxx-Xxxxxx Civil Rights
Act, the Michigan Handicappers, Civil Rights Act, the Michigan Workers
Disability Compensation Act, The Americans with Disabilities Act, and
any other Michigan and federal statutes and the common law of the
State of Michigan and the United States, actions based on torts,
public policy, defamation or injuries incurred on the job or incurred
as a result of loss of employment, and any and all claims and demands
of every conceivable kind based upon or in connection with or
involving Employee's employment and the termination of such
employment.
6. Waiver. In further consideration, Employee, on behalf of himself, his
heirs, legal representatives and assigns, hereby covenants with the Released
Parties that he will not xxx or proceed in any manner, whether at law or in
equity, against any of them, for and account of any claim of any nature
whatsoever, including but not limited to any claim for injuries or
compensatory, exemplary, statutory or punitive damages as the result of the
events arising out of or relating in any way to Employee's employment or the
termination of such employment with the Company.
7. Release by Company. For good and valuable consideration, the
Company, and its subsidiaries, divisions, units, successors,
affiliates, shareholders, directors, officers, agents, employees and
former employees (hereinafter the "Releasees") hereby release and
forever discharge Employee, his heirs and personal representatives
(the "Released Parties") of and from all actions, causes of action,
claims, demands, compensatory, exemplary, statutory and punitive
damages, costs, suits, debts, dues, sums of money, accounts,
reckonings, bills, covenants, contracts, liens, controversies,
agreements, promises, variances, trespasses, executions, liability and
any all consequential damages whatsoever, in law or in equity, which
the Releasees, individually, or in any representative capacity, had,
now have or may have or shall have against the Released Parties by
reason of any matter, fact, representation, cause or thing of any
conceivable kind and character whatsoever, and which occurred up to
the Effective Date.
8. Waiver. In further consideration, the Releasees covenant with
the Released Parties that they will not xxx or proceed in any manner,
whether at law or in equity, against any of them, for and account of
any claim of any nature whatsoever, including but not limited to any
claim for injuries or compensatory, exemplary, statutory or punitive
damages as the result of the events arising out of or relating in any
way to Employee's employment or the termination of such employment
with the Company.
9. Indemnification. Nothing contained herein shall alter, amend or
limit in any way Employee's right and entitlement as an officer,
director and employee of the Company to be indemnified by the Company
in accordance with, and subject to, the Certificate of Incorporation
and Bylaws of the Company and the most recently dated Indemnification
Agreement between Employee and the Company.
10. Additional Agreements. Employee and the Company hereby make the
following additional agreements:
a. Throughout the Payment Period and continuing thereafter, Employee
agrees to keep confidential all trade secrets, customer lists,
business strategies, financial and marketing information, and other
data concerning the private affairs of the Company or any of its
affiliates made known to or developed by Employee during the course
of his employment by the Company, or during the Payment Period (the
"Confidential Information"), not to use any Confidential Information
or supply Confidential Information to others other than in
furtherance of the Company's business, and to return to the Company
all copies, in whatever form, of all Confidential Information and
other documents relating to the business of the Company or of any of
its affiliates which may be in the possession or under the control
of Employee. Further, Employee acknowledges and agrees that any
intellectual property of any sort developed or invented by Employee
while employed by the Company (or any at time during the Payment
Period) whether or not during work hours, shall be and remain the
sole and exclusive property of the Company, and Employee shall have
no interest therein.
b. Employee agrees that, during the Payment Period and for one (1) year
thereafter, he will make no attempt whatsoever to induce or
encourage any employee of the Company or any of its affiliates to
leave such employment for employment with any other entity with
which Employee is associated and which is engaged in any line of
business which is competitive with the Company or any of its
affiliates.
c. From and after the Effective Date, neither Employee nor the Company
shall make any public statements concerning the other, without the
prior written consent of the other, and will make no statements
which disparage or discredit the other, except as the Company shall
be required to do to fulfill its disclosure obligations under
applicable law. Employee shall have the right to review and comment
on the draft press release announcing his resignation from the
Company.
d. Employee will make himself available, on reasonable advance notice
and at reasonable times, to be interviewed by counsel to the Company
and as a witness (by deposition or at trial) in connection with any
suits or proceedings in which the Company is involved as of the
Effective Date.
11. Waiting and Revocation Periods. Employee expressly acknowledges that
he has consulted an attorney of his choice and reviewed the terms of this
Agreement with such counsel. Employee further acknowledges that he has had
twenty-one (21) days with which to consider the terms of this Agreement and
to review its terms and conditions with his attorney. Employee understands
and agrees that this Agreement is revocable by either party for seven (7) days
after its execution by both parties, and that this Agreement shall not
become effective or enforceable until such period has expired. This
Agreement automatically becomes enforceable and effective on the 8th day
after the date this Agreement is signed by the parties. This Agreement may
be revoked by a writing sent certified mail by either party post-marked no
later than the 7th day after the Agreement is signed by both parties (unless
that day is a Sunday or a holiday, in which event the period is extended to a
day there is mail service).
12. Entire Agreement. This Agreement contains the entire agreement of the
parties relating to the subject matter hereof and supersedes all other
agreements or understandings, including, but not limited to the Employment
Agreement and the Retention Agreement. This Agreement cannot be altered or
amended except in writing, which writing must be signed by Employee and the
Chairman of the Company. In no event shall this Agreement be modified by any
oral statements, agreements, commitments or understandings.
13. Free Act and Deed. The Company and Employee acknowledge that they
have reviewed this Agreement, understand its terms and execute this Agreement
as their free act and deed. Employee further acknowledges that he has been
afforded the opportunity to review this Agreement with counsel of his own
choice and that he knowingly and voluntarily approves this Agreement.
14. Choice of Law and Severability. This Agreement shall be governed
by and construed in accordance with the internal laws of the State of
Michigan applicable to contracts made and to be performed within such State.
If any provision of this Agreement shall for any reason be held invalid or
unenforceable, such invalidity or unenforceability shall not affect any other
provision hereof, but this Agreement shall, in such event, be construed as if
such invalid and/or unenforceable provision had never been contained herein.
15. Arbitration. Any controversy, dispute, or claim arising out of or
relating to this Agreement or any claimed breach thereof shall be settled by
arbitration in accordance with the commercial rules of the American
Arbitration Association at its Southfield, Michigan offices. Judgment
upon any award may be entered in any circuit court or other court having
jurisdiction thereof, without notice to the opposite party or parties.
Anything contained herein to the contrary notwithstanding, this agreement to
arbitrate shall not be deemed to be a waiver of the Company' s right to
secure equitable relief including injunction (whether as part of or separate
from the arbitration proceeding) if and when otherwise appropriate.
IN WITNESS WHEREOF, the parties have executed this Agreement as of the
date first above written.
THIS IS A RELEASE. READ BEFORE SIGNING.
AMERIWOOD INDUSTRIES INTERNATIONAL CORPORATION
By /s/ Xxxx Xxxxx
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Xxxx Xxxxx
Its Chairman, on behalf of the Board
/s/ Xxxxxx X. Xxxxxxx
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Xxxxxx X. Xxxxxxx
