Exhibit (10)(i)(2)
SEPARATION AGREEMENT
In exchange for the mutual promises set forth below, and intending to be legally
bound, you and Xxxx Corporation (the "Company") acknowledge and agree to the
following terms and conditions governing your separation from employment:
1. Termination Date: Your employment with the Company will be terminated
on __________.
2. Transition: Between the date of this notification and __________ you will
be responsible for carrying out your regular duties in an effective manner
and executing a complete transition of your responsibilities to
____________.
3. Severance: Beginning on _____________ you will receive severance
pay equivalent to your _________ base compensation in effect on your
termination date for a period of ______________. Your severance pay will
continue until you are employed or the conclusion of your severance
payment period, whichever comes earlier. Severance payments will occur in
installments on the regular payroll cycle and will be subject to taxation
and applicable deductions for continued benefit coverage during your
severance period. Elective deductions, e.g. 401(k) contribution, will be
discontinued.
4. Severance Beneficiary: Should you become deceased while you are receiving
severance payments, your beneficiary will receive a lump sum payment
equivalent to total payments for the remainder of the potential
_____________ severance period. A form (Exhibit A) is provided for
designation of your beneficiary. Please complete this form and send it to
____________________.
5. Time of Payment: Severance payments will begin ______________ if the
Company has received a Separation Agreement signed by you in advance
of_______________. However, severance payments, benefit coverage, and
outplacement service will not occur until a Separation Agreement is
executed with the Company.
6. Vacation Pay: Payment for unused vacation in existence on your date of
termination shall be made within 30 days of your date of termination. This
payment is in addition to severance payments.
7. Medical Benefits: Group health insurance shall be provided to you until
the end of the month in which your severance pay ends, or, if earlier, the
date on which medical coverage is obtained through another employer. Your
normal contributions for medical coverage shall be deducted from your
severance pay. Should you remain unemployed at the end of your severance
period, you have the right to continue health plan benefits under the
terms of Federal COBRA legislation. It is your responsibility to notify
________________ immediately if health insurance coverage is obtained
through another organization. Detailed information regarding COBRA
coverage will be sent to your home address at the conclusion of your
severance pay period.
8. Life Insurance: Your $____________ group term life insurance coverage will
be provided until the end of your severance pay period. At that time, you
will be given the option to convert your group term life policy to an
individual policy. You will have 31 days from that date to make your
individual policy coverage election. Your additional life insurance
coverage (___________________) which is provided through the Supplemental
Executive Benefit Plan will also remain in effect through the end of your
severance pay period. This coverage concludes at the end of the severance
pay period, however, it is not convertible to an individual policy.
9. Company car: You may continue the use of your company car until
______________. At the conclusion of this period, you may elect to
purchase your company car. You are to notify _______________ regarding
your decision by______________. If you do not wish to purchase your
company car, you must arrange to return the car to _________ or his
designee by ____________. If you elect to purchase your car, __________
will inform you of the purchase price and the purchase requirements. You
are reminded that you are obligated to maintain the car in good operating
condition, report any accidents promptly to our Insurer, and to abide by
the limitation on authorized drivers, during this period of time.
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10. Pension Plan: You have met the _________ requirement to be vested under
the provisions of the Xxxx Corporation Pension Plan. As a terminated
vested associate, you have a right to a future pension benefit from Xxxx.
If you wish, you may obtain an estimate of your future pension benefit by
contacting _______________.
11. Supplemental Executive Retirement Benefit: You have satisfied the
___________ service requirement for vesting under the provisions of the
Supplemental Executive Retirement Plan.
12. Xxxx Savings Plan: Unless your balance is less than $5,000, you may
leave your savings in the Xxxx Savings Plan (401k) or you may transfer
your savings over into another qualified tax-deferred arrangement. If you
leave your savings in the Xxxx Savings Plan, you will not be able to make
further contributions. However, in the event that you have an outstanding
loan from your plan accounts, you may continue to make loan payments by
payroll deduction during your severance payment period. If you transfer
your savings to another tax-deferred arrangement, you will be able to
continue making contributions. You are cautioned not to have an elected
distribution of your savings, for the purposes of transfer to a new tax
deferred arrangement, sent to you directly. Doing so triggers a personal
tax liability that can be properly avoided by having the distribution sent
directly to the new qualified arrangement. __________________ will send
you further guidance on this subject. Should you have any questions
regarding this plan, please contact ____________________.
13. Supplemental Executive Deferral Plan: Your Supplemental Executive
Deferral Plan asset will be transferred to you, following your termination
date, as soon as practical administratively. You may take the asset in the
form of an insurance policy or a cash payment. Both forms of distribution
are taxable as ordinary income. You should contact______________________,
at _____________ to obtain current information regarding the value of your
Supplemental Executive Deferral Plan account and to make your distribution
election. _____________ will inform you regarding the personal financial
and tax consequences of the distribution alternatives.
14. Annual Bonus: Should a bonus be paid under the provisions of the Company's
Annual Bonus Plan for Company performance in the Fiscal _________ period,
you will be awarded a prorated bonus award based on your employment
through______________. The prorated bonus award, if earned, would be paid
after Fiscal Year results are audited and approved by the Board of
Directors.
15. Stock Options: Stock options are cancelled as of your termination date or
on the expiration date of the stock option agreement, whichever comes
earlier.
16. Outplacement: Executive outplacement services will be provided
___________________________. A brochure regarding their services is
attached. Our representative with _______________ is ___________. ________
phone number is __________________ You may meet with _______________
professionals in advance of your termination date to gain familiarity with
their numerous support resources and to make arrangements for a location
that is the most practical for you. Please call ____________ to set up an
orientation appointment.
17. Company Property: You are expected to return your company credit cards and
any other Xxxx property in your possession to ______________ or her
designee prior to_______________.
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18. Confidentiality Agreement: Attached is a copy of the "Invention and
Confidential Information Agreement" you have signed with Xxxx Corporation
as a reminder of your obligations under this Agreement.
19. Other Covenants: In return for the provision of these severance
arrangements, we require your agreement that you will not disparage or
harm the reputation of Xxxx Corporation; neither will you engage in acts
which have or will have a material adverse effect on Xxxx. Additionally,
for ________________ period following your termination, you will not
compete with Xxxx as an employee of or as a consultant to divisions of
companies in the ________________ markets that compete with Xxxx'x
products in those markets. Likewise, you will not take any action to
recruit Xxxx employees for positions elsewhere.
20. Release: Further, in exchange for the benefits described above, you
hereby release and discharge the Company from any and all claims, damages,
expense, or liability based on any act, event, or occurrence up to and
including the date of this Agreement. Without limitation, this includes
any claims arising from your employment or termination of employment,
including any claim of employment discrimination under the Age
Discrimination in Employment Act, the Pennsylvania Human Relations Act,
Title VII of the Civil Rights Act of 1964, the Americans with Disabilities
Act, or any other federal, state or local statute, regulation, law or
common-law claim. The above release does not waive any rights or claims
due to occurrences that may arise after you sign this Agreement.
21. Breach of Agreement: If you breach the terms of this Agreement in any
respect, your entitlement to salary continuation benefits or to any
other benefits offered shall immediately cease. A form, which designates
by your signature that you acknowledge and accept these requirements, is
attached. Please sign and return the form to _________________ within
twenty-one days of the date of this notification. Please be reminded that
Severance arrangements will not begin until the Agreement is signed and
received by the Company. As noted, you have 21 days to consider this
Agreement and we advise you to consult an attorney prior to signing it.
Seven days after you sign the Agreement, it will become binding,
irrevocable and enforceable, unless you revoke the Agreement during this
seven-day period by written notice.
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YOUR SIGNATURE BELOW ACKNOWLEDGES THAT YOU HAVE CAREFULLY READ AND UNDERSTAND
THIS AGREEMENT AND ARE ENTERING INTO THE AGREEMENT VOLUNTARILY AND WITH THE
INTENT TO BE LEGALLY BOUND.
Name (please print):
Signature:
Date:
Witness:
XXXX CORPORATION
Signature:
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EXHIBIT A
XXXX CORPORATION
OFFICER SEVERANCE PLAN
DESIGNATION OF BENEFICIARY FORM
TO: XXXX CORPORATION
FROM:
SOCIAL SECURITY NO
ADDRESS:
This Designation of Beneficiary Form relates only to amounts which
may become payable upon my death under the Xxxx Corporation Officer Severance
Plan (the "Plan"). I hereby revoke all my prior Beneficiary designations (if
any) and hereby designate the following as my Beneficiary to receive any amount
which may become payable under the Plan upon my death:
NAME: RELATIONSHIP:
ADDRESS:
SOCIAL SECURITY NO:
I understand that if on my date of death no properly designated
Beneficiary survives me, my estate will be the Beneficiary designated to receive
such amounts.
Date Signature of Employee
Witness
