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EXHIBIT 10.45
SEPARATION AGREEMENT
This Separation Agreement (this "Agreement") is made by and among MMI
Products, Inc., a Delaware corporation (the "Company"), MMI Management Services
LP, a Delaware limited liability partnership ("MMI Services") and Xxxxxx X.
Xxxx, on behalf of himself and his spouse, heirs, administrators, and legal and
personal representatives of any kind, if any (collectively, "Executive"), and
shall become effective upon its signature by all Parties (as hereinafter
defined) and expiration of the seven (7) day revocation period referred to in
Section 7 hereof (such date of effectiveness, the "Effective Date").
WHEREAS, Executive is the President and Chief Executive Officer of the
Company and MMI Services;
WHEREAS, the Company, MMI Services and Executive have agreed to terminate
Executive's Employment Agreement, dated October 13, 2000, between the Company,
MMI Services and Executive (the "Employment Agreement"), on the terms set forth
herein and to release each of the Parties from any claims arising from or
related to the Employment Agreement as set forth in this Agreement;
NOW THEREFORE, in consideration of the mutual promises made herein and
other valuable consideration, the sufficiency of which is hereby acknowledged,
the Company, MMI Services and Executive (collectively referred to as the
"Parties") hereby agree as follows:
1. Resignation as Executive; Termination of Employment. Executive hereby
resigns all offices, both as a director and officer, he holds with Merchants
Metals Holding Corporation ("MMHC"), the Company, MMI Services and/or any of
their respective subsidiaries. Executive agrees to execute all further documents
which the Company and/or MMI Services may request of him to effectuate such
resignations. The Parties agree that Executive's employment with the Company is
terminated as of April 13, 2001 (the "Termination Date").
2. Payment.
(a) MMI Services shall pay (i) on the date hereof, any amounts owed to
Executive pursuant to Section 3(a) and Section 3(d) of the Employment Agreement
in respect of salary earned and expenses incurred prior to the Date of
Termination; and (ii) on the Effective Date, a one time cash severance payment
of approximately $211,650 (which represents $300,000 less approximately $88,350
for tax withholding) to Executive on the Effective Date by check sent certified
mail return receipt requested. Except as set forth in this Section 2(a), the
Company shall not have any further obligation to pay Executive any other wages
or compensation or provide any other benefits to Executive (including, without
limitation, any wages, compensation or benefits provided for in Sections 4 and 7
of the Employment Agreement), and Executive acknowledges that he has received
all wages, compensation and benefits to which he is entitled.
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(b) Notwithstanding anything to the contrary in Section 2(a), Executive
will be entitled to the fees set forth in Sections 4(a) and 4(b) of the
Employment Agreement in the event that (i) the conditions for payment of such
fees have been met and (ii) the applicable Transaction (as defined in the
Employment Agreement) is with one of the parties set forth on Schedule I hereto;
provided, that for purposes of this Section 2(b), (x) the termination of
Executive's employment pursuant to this Agreement shall be deemed to be a
termination pursuant to Section 6(a)(iv) of the Employment Agreement and (y)
each of the parties listed on Schedule I hereto, and only such parties, shall be
deemed to be a Third Party (as defined in the Employment Agreement) with whom
the Company and Executive had been involved in active discussions prior to the
Effective Date.
(c) Following the Termination Date, Executive shall have the right, at his
own expense, to the continuation of health care coverage for the period
prescribed under COBRA.
3. Non-Solicitation.
(a) For a period of eighteen months following the Termination Date,
Executive agrees that neither he nor any affiliate shall, directly or
indirectly, (i) induce, or attempt to induce, any employee of the Company, MMI
Services or any of their respective affiliates to terminate his or her
employment with the Company, MMI Services or any of their respective affiliates,
as applicable, (ii) hire, or attempt to hire, any such employee of the Company,
MMI Services or any of their respective affiliates or (iii) request or solicit
any present customer or supplier of the Company to cancel or curtail its
business with the Company or MMI Services.
(b) Executive acknowledges that, in view of the nature of the business
in which the Company, MMI Services and their respective affiliates are engaged,
the restrictions contained in Sections 3(a) above (the "Restrictions") are both
reasonable and necessary in order to protect the legitimate interests of the
Company, MMI Services and their respective affiliates, and that any violation of
such Restrictions would result in irreparable injuries to the Company, MMI
Services and their respective affiliates.
(c) If any Restriction, or any part thereof, shall be determined in any
judicial or administrative proceeding to be invalid or unenforceable, the
remainder of the Restrictions shall not thereby be affected and shall be given
full force and effect, without regard to the invalid provisions. If the period
of time specified in the Restrictions shall be determined in any judicial or
administrative proceeding to be unreasonable or otherwise unenforceable, then
the court or the administrative body shall have the power to reduce the period
of time and, in its reduced form, such provisions shall then be enforceable and
shall be enforced.
4. Confidential Information. Executive hereby represents and warrants that
he has surrendered to the Company and MMI Services all tangible Confidential
Information (as hereinafter defined) (and all copies thereof) and all other
property belonging to the Company, MMI Services and their respective
subsidiaries or affiliates.
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(a) Definition. Executive understands that Company and MMI Services
possess valuable Confidential Information to which Executive has had access to
in the performance of his job duties. Executive is responsible for maintaining
the confidentiality of such information as set forth in this Agreement.
"Confidential Information" shall mean trade secrets, confidential or proprietary
information, and all other information, documents or materials, owned, developed
or possessed by the Company, MMI Services, or any of their parents, subsidiaries
or affiliates, including any of their respective predecessors and successors,
whether in tangible or intangible form, that is not generally known to the
public. Confidential Information includes, but is not limited to, (i) financial
information, (ii) products, (iii) product and service costs, prices, profits and
sales, (iv) new business ideas, (v) business strategies, (vi) product and
service plans, (vii) marketing plans and studies, (viii) forecasts, (ix)
budgets, (x) projections, (xi) computer programs, (xii) data bases and the
documentation (and information contained therein), (xiii) computer access codes
and similar information, (xiv) software ideas, (xv) know-how, technologies,
concepts and designs, (xvi) research projects and all information connected with
research and development efforts, (xvii) records, (xviii) business
relationships, methods and recommendations, (xix) existing or prospective
client, customer, vendor and supplier information (including, but not limited
to, identities, needs, transaction histories, volumes, characteristics,
agreements, prices, identities of individual contacts, and spending, preferences
or habits), (xx) training manuals and similar materials used by the Company, MMI
Services or any of their parents, subsidiaries or affiliates in conducting its
business operations, (xxi) skills, responsibilities, compensation and personnel
files of employees, directors and independent contractors of the Company, MMI
Services or any of their parents, subsidiaries or affiliates, (xxii) competitive
analyses, (xxiii) contracts with other parties, and (xxiv) other confidential or
proprietary information that has not been made available to the general public
by the Company's and MMI Services' senior management. Confidential Information
shall not include the trade knowledge, skill and expertise developed by the
Executive as a result of Executive's prior experience in the building products
industry, but shall include such trade knowledge, skill and expertise developed
during the Executive's term of employment.
(b) Non-Disclosure. Executive shall not use or reveal any Confidential
Information, or trade secret of the Company or MMI Services for any purpose
without the express prior written consent of the Company or MMI Services, as
applicable. Executive further agrees that he shall not disclose to any person,
firm, or entity the names of suppliers to or customers of the Company or MMI
Services, the business of the Company or MMI Services, any trade secret,
know-how, or knowledge relating to the manufacturing, sales, or marketing
techniques or financial data of the Company or MMI Services except as required
by law or provided otherwise in this Agreement. As used herein, trade secret
shall be deemed to include, without limitation, the names of (i) any person or
entity with whom the Company or MMI Services had any contractual relationship or
for whom the Company or MMI Services rendered services or sold any product prior
to the Effective Date, or (ii) any person or entity whose business was solicited
by the Company or MMI Services prior to the Effective Date.
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5. Injunctive Relief. Executive acknowledges that, in the event Executive
violates, or threatens to violate, any of the covenants in Sections 3 and/or 4,
the Company, MMI Services and their respective affiliates shall be entitled to
obtain from any court of competent jurisdiction, preliminary and permanent
injunctive relief as well as damages and an equitable accounting of all
earnings, profits and other benefits arising from such violation, which rights
shall be cumulative and in addition to any other rights or remedies in law or
equity to which the Company, MMI Services or their respective affiliates may be
entitled.
6. Non-Disparagement. (a) Executive shall not, directly or indirectly, make
or cause to be made and shall cause the officers, directors, employees, agents
and representatives of any entity or person controlled by Executive not to make
or cause to be made, any disparaging, denigrating, derogatory or other negative
or false statement orally or in writing to any person or entity about MMHC, any
holder of 5% or more of any class of the MMHC's voting stock, the Company, MMI
Services, their respective parents, subsidiaries or affiliates, their respective
executive officers or member of its or their boards of directors, or the
business strategy or plans, policies, practices or operations of MMHC, of any
holder of 5% or more of any class of the MMHC's voting stock, the Company, MMI
Services or their respective parents, subsidiaries or affiliates.
(b) The Company and MMI Services shall not, directly or indirectly,
make or cause to be made and shall cause the officers, directors, employees,
agents and representatives of any entity or person controlled by the Company or
MMI Services not to make or cause to be made, any disparaging, denigrating,
derogatory or other negative or false statement orally or in writing to any
person or entity about Executive.
7. No Pending or Future Lawsuits. Executive represents that he has no
lawsuits, claims, or actions pending in his name, or on behalf of any other
person or entity, against the Company, MMI Services or any other person or
entity referred to herein. Executive also represents that he has not assigned
any claims on his own behalf or on behalf of any other person or entity against
the Company, MMI Services or any other person or entity referred to herein.
8. Release. (a) Executive, Executive's spouse and Executive's current and
former affiliates, assigns, executors, agents, advisors, attorneys, and
representatives of any kind, if any, by this Agreement RELEASE, SURRENDER,
REMISE, ACQUIT, AND FOREVER DISCHARGE MMHC, the Company, MMI Services and each
of their current and former employees, officers, directors, shareholders,
affiliates, successors, predecessors, partners, parent companies, subsidiaries,
assigns, executors, agents, attorneys, and representatives of any kind, if any,
from any and all claims, INCLUDING, WITHOUT LIMITATION, ANY AND ALL STATUTORY
AND COMMON LAW CLAIMS FOR BREACH OF EXPRESS OR IMPLIED CONTRACT, PAYMENTS DUE
AND OWING, MONIES HAD AND RECEIVED, QUANTUM MERUIT, BREACH OF FIDUCIARY DUTY,
NEGLIGENCE, NEGLIGENT MISREPRESENTATION, BREACH OF THE IMPLIED COVENANT OF GOOD
FAITH AND FAIR DEALING, CONVERSION, WRONGFUL DISCHARGE, TORT,
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DEFAMATION, PROMISSORY ESTOPPEL, TITLE VII OF THE CIVIL RIGHTS ACT OF 1964, AS
AMENDED, ANY OTHER CIVIL OR HUMAN RIGHTS LAW, THE AGE DISCRIMINATION IN
EMPLOYMENT ACT, AMERICANS WITH DISABILITIES ACT, EMPLOYEE RETIREMENT INCOME
SECURITY ACT OF 1974, AS AMENDED, OR ANY OTHER FEDERAL, STATE OR LOCAL LAW
RELATING TO EMPLOYMENT OR DISCRIMINATION IN EMPLOYMENT, INCLUDING CLAIMS ARISING
OUT OF OR RELATING TO EXECUTIVE'S EMPLOYMENT BY THE COMPANY AND MMI SERVICES OR
HIS RESPECTIVE SERVICES AS A DIRECTOR, OFFICER OR EMPLOYEE OF THE COMPANY, MMI
SERVICES OR THEIR RESPECTIVE SUBSIDIARIES, OR OTHERWISE RELATING TO THE
TERMINATION OF EXECUTIVE'S EMPLOYMENT WITH AND SERVICES FOR THE COMPANY AND MMI
SERVICES; PROVIDED, HOWEVER, THAT SUCH RELEASE WILL NOT LIMIT OR RELEASE (I)
EXECUTIVE'S RIGHTS UNDER THIS AGREEMENT, (II) EXECUTIVE'S RIGHTS TO
INDEMNIFICATION FROM THE COMPANY IN RESPECT OF HIS SERVICES AS A DIRECTOR OR
OFFICER OF MMHC, THE COMPANY, MMI SERVICES OR ANY OF THEIR RESPECTIVE
SUBSIDIARIES AS PROVIDED BY LAW OR THE CERTIFICATES OF INCORPORATION OR BY-LAWS
(OR LIKE CONSTITUTIVE DOCUMENTS) OR DIRECTOR AND OFFICER INDEMNIFICATION
AGREEMENT OF MMHC, THE COMPANY, MMI SERVICES OR ANY SUBSIDIARY THEREOF, (III)
THE EXECUTIVE'S RIGHTS AGAINST THE COMPANY OR MMI SERVICES WITH RESPECT TO ANY
FRAUDULENT OR CRIMINAL ACTIVITY. OR (IV) CLAIMS ARISING SOLELY AFTER THE DATE
HEREOF.
(b) The Company and MMI Services, on their own behalf and on behalf of
their respective subsidiaries, by this Agreement RELEASE, SURRENDER, REMISE,
ACQUIT, AND FOREVER DISCHARGE Executive, from any and all claims, INCLUDING
WITHOUT LIMITATION, ANY AND ALL STATUTORY AND COMMON LAW CLAIMS FOR BREACH OF
EXPRESS OR IMPLIED CONTRACT, PAYMENTS DUE AND OWING, MONIES HAD AND RECEIVED,
QUANTUM MERIT, BREACH OF FIDUCIARY DUTY, NEGLIGENCE, NEGLIGENT
MISREPRESENTATION, BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR
DEALING, CONVERSION, TORT, DEFAMATION, OR PROMISSORY ESTOPPEL, IN EACH CASE
ARISING OUT OF OR RELATING OUT OF OR RELATING TO THE EXECUTIVE'S EMPLOYMENT BY
THE COMPANY OR INVESTMENT IN THE COMPANY OR HIS SERVICES AS A DIRECTOR, OFFICER
OR EMPLOYEE OF THE COMPANY OR ITS SUBSIDIARIES, OR OTHERWISE RELATING TO THE
TERMINATION OF SUCH EMPLOYMENT OR SERVICES; PROVIDED, HOWEVER, THAT SUCH GENERAL
RELEASE WILL NOT LIMIT OR RELEASE (I) THE COMPANY'S RIGHTS UNDER THIS AGREEMENT
(INCLUDING BUT NOT LIMITED TO THE PROVISIONS OF THE EMPLOYMENT AGREEMENT THAT
ARE INCORPORATED HEREIN), (II) THE COMPANY'S RIGHTS AGAINST EXECUTIVE WITH
RESPECT TO ANY FRAUDULENT OR CRIMINAL ACTIVITY, OR (III) CLAIMS ARISING SOLELY
AFTER THE DATE HEREOF.
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9. Confidentiality. Each Party agrees to take every reasonable precaution
to prevent disclosure of this Agreement to third parties, and each Party agrees
that there will be no publicity, directly or indirectly, concerning this
Agreement, except as provided or required by law, and except as MMHC, the
Company or MMI Services may disclose pursuant to any securities laws. Subject to
the exceptions in the immediately preceding sentence, the Parties agree to take
every precaution to disclose this Agreement only to those employees, officers,
directors, attorneys, accountants, governmental entities and family members who
have a reasonable need to know. This provision shall not in any way prevent
Executive from disclosing this Agreement to his legal counsel, financial
advisors, and his spouse.
10. Assistance to Third Parties. Executive agrees that he will not counsel
or assist any attorneys or their clients in the presentation or prosecution of
any disputes, differences, grievances, claims, charges, or complaints by any
third party against the Company and/or any officer, director, employee, agent,
representative, shareholder or attorney of the Company unless under a subpoena
or other court order to do so.
11. Cooperation. Executive agrees to reasonably cooperate with MMHC, the
Company and MMI Services as reasonably directed by MMHC, the Company or MMI
Services, as applicable, by responding to questions, depositions, administrative
proceedings and court hearings, executing documents, and cooperating with the
MMHC, Company, MMI Services and their respective accountants and legal counsel
with respect to business issues, and/or claims and litigation of which he has
personal knowledge. Executive further agrees, except as required by subpoena or
other applicable legal process (after MMHC, the Company and MMI Services have
been given reasonable notice and opportunity to seek relief from such
requirement), to maintain, in strict confidence, any information of which he has
knowledge regarding current and/or future claims, administrative proceedings and
litigation. Executive agrees, except as required by subpoena or other applicable
legal process (after MMHC, the Company and MMI Services have been given
reasonable notice and opportunity to seek relief from such requirement), not to
communicate with any party(ies), their legal counsel or others adverse to MMHC,
the Company or MMI Services in any such claims, administrative proceedings or
litigation except through MMHC's, the Company's or MMI Services' designated
legal counsel. Executive also shall make himself available at reasonable times
and upon reasonable notice to answer questions or provide other information
within his possession and requested by MMHC, the Company or MMI Services
relating to MMHC, the Company, MMI Services, their respective subsidiaries
and/or their respective operations in order to facilitate the smooth transition
of Executive's duties to his successor. The Company or MMI Services shall
reimburse Executive for any documented out-of-pocket expenses reasonably
incurred by Executive in complying with this paragraph 11.
12. Tax Consequences. Executive acknowledges and agrees that neither the
Company nor MMI Services is making any representations or warranties with
respect to the tax consequences of the payment of any sums to Executive under
the terms of this Agreement.
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13. Costs. The Parties shall each bear their own costs, expert fees,
attorneys' fees, expenses, and other fees incurred in connection with this
Agreement.
14. Arbitration to Enforce Agreement.
(a) The Parties specifically agree that any controversy, claim, or
dispute arising out of this Agreement or any alleged breach thereof, shall be
resolved exclusively by arbitration. Any arbitration shall take place in
Houston, Texas and be administered by the Houston office of the American
Arbitration Association (the "AAA") in accordance with its Commercial
Arbitration Rules in effect at the time the arbitration is initiated
(collectively, the "Rules").
(b) As soon as a demand for arbitration shall be made by either Party,
the AAA shall proceed to provide a list of arbitrators from the Commercial Panel
from which the Parties shall select a panel of three neutral arbitrators in
accordance with the Rules and normal procedures of the Houston office of the
AAA. If necessary, the AAA shall select some or all of the arbitrators when it
is authorized to do so under the Rules.
(c) The arbitration panel shall render a full, complete, conclusive,
and binding resolution of the dispute. The arbitration award shall assess all
reasonable attorneys' fees and costs, including the costs of the arbitration and
the arbitrators' compensation, against the losing Party. Judgment on the award
may be entered in any court having jurisdiction thereof.
15. Authority. The Company and MMI Services represent and warrant that the
undersigned has the authority to act on behalf of such Party, and to bind such
Party, and all who may claim through such Party to bind them to the terms and
conditions of this Agreement. Executive represents and warrants that he has the
capacity to act on his own behalf and on behalf of all who might claim through
him to bind them to the terms and conditions of this Agreement. Executive
warrants and represents that there are no liens or claims of lien or assignments
in law or equity or otherwise of or against any of the claims or causes of
action released herein.
16. No Representations. Executive represents that he has had the
opportunity to consult with an attorney, and has carefully read and understands
the scope and effect of the provisions of this Agreement. Executive further
represents that he has not relied upon any representations or statements made by
the other Parties hereto which are not specifically set forth in this Agreement.
17. Severability. Subject to the terms of Section 3 hereof, in the event
that any provision hereof becomes or is declared by a court of competent
jurisdiction to be illegal, unenforceable or void, this Agreement shall continue
in full force and effect without said provision.
18. Merger Clause. This Agreement represents the entire agreement and
understanding among the Parties concerning Executive's separation from MMHC, the
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Company and MMI Services, and supersedes and replaces any and all prior
agreements and understandings concerning Executive's relationship with MMHC, the
Company and MMI Services and his compensation by the Company and MMI Services,
including without limitation, the Employment Agreement.
19. No Oral Modification. This Agreement may only be amended in a writing
signed by Executive and an authorized representative of the Company and MMI
Services.
20. Governing Law. This Agreement shall be governed by and construed under
the laws of the State of Texas without regard to conflicts of laws principles.
21. Counterparts. This Agreement may be executed in counterparts, and each
counterpart shall have the same force and effect as an original and shall
constitute an effective, binding agreement on the part of each of the
undersigned.
22. Voluntary Execution of Agreement. This Agreement is executed
voluntarily and without any duress or undue influence on the part or behalf of
the parties hereto. IN ACCORDANCE WITH THE OLDER WORKERS BENEFIT PROTECTION ACT
OF 1990, EXECUTIVE ACKNOWLEDGES AND AGREES AS FOLLOWS:
(a) Executive has been and hereby is advised to consult with an
attorney before executing this Agreement;
(b) Executive has been given twenty-one (21) days to review and
consider this Agreement; and
(c) Executive knowingly and voluntarily agrees to the terms contained
in this Agreement;
(d) Executive has been advised that he may revoke this Agreement by
delivering a written revocation to Xxxxxx X. Xxxxx, Chairman no
later than seven (7) days after Executive executes this
Agreement.
23. Notices. All notices under this Agreement shall be sent via certified
mail, return receipt requested, as follows:
(a) Executive:
Xxxxxx X. Xxxx
000 Xxxx Xxxxx Xxxxx
XxXxxxxx, Xxxxx 00000
with a copy to:
Xxxxxx X. Xxxxxx, Esq.
Xxxxxxxx Xxxxxxxx & Xxxxxx
5400 Renaissance Tower
0000 Xxx Xxxxxx
Xxxxxx, Xxxxx 00000
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(b) The Company:
MMI Products, Inc.
000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx, Chairman
with a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
(c) MMI Services:
MMI Management Services LP
000 Xxxx Xxxxxx Xxxx, Xxxxx 000
Xxxxxxx, Xxxxx 00000
Attention: Xxxxxx X. Xxxxx, Chairman
with a copy to:
Xxxxxxx X. Xxxxxx, Esq.
Weil, Gotshal & Xxxxxx LLP
000 Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxx, Xxxxx 00000
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IN WITNESS WHEREOF, the Parties have executed this Agreement on the
respective dates set forth below.
MMI PRODUCTS, INC.,
a Delaware corporation
Dated: April 16, 2001 By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, Chairman
MMI MANAGEMENT SERVICES LP,
a Delaware limited liability partnership
Dated: April 16, 2001 By: /s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx, Chairman
XXXXXX X. XXXX,
an individual
Dated: April 16, 2001 By: /s/ Xxxxxx X. Xxxx
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Xxxxxx X. Xxxx
AGREED AND CONSENTED TO
on this 16th day of April, 2001:
/s/ Xxxxxx Xxxxxx Xxxx
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Xxxxxx Xxxxxx Xxxx
