Exhibit 10.2
------------
SEPARATION AGREEMENT
This SEPARATION AGREEMENT (this "Agreement"), dated as of March 31,
2005, is entered into by and between Packaging Dynamics Corporation, a Delaware
corporation (the "Company") and Xxxxx Van Antwerp ("Executive").
WHEREAS, Executive has been employed as Vice President and General
Manager of the Company;
WHEREAS, Executive has decided to resign from his position as Vice
President and General Manager of the Company and from all offices,
directorships and other positions with the Company and any of its affiliates
and subsidiaries; and
WHEREAS, the Company has agreed to accept such resignation.
NOW, THEREFORE, in consideration of the mutual agreements and
understandings set forth herein, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:
Section 1. Termination of Service; Benefits.
(a) Resignation of Position. Effective as of March 31, 2005,
Executive hereby resigns his position as Vice President and General Manager of
the Company, and resigns as officer and director of the Company and any of its
affiliates and subsidiaries, and shall no longer serve in any of these
capacities. Nothwithstanding the provisions of the previous sentence, Executive
shall remain an employee of the Company until the Resignation Date as defined
below.
(b) Resignation of Employment. Effective as of May 31, 2005
(the "Resignation Date"), Executive hereby resigns his employment with the
Company. Furthermore, effective as of the date hereof, that certain Severance
and Change of Control Agreement, dated as of January 23, 2003, by and between
the Company and Executive shall be terminated. On the Resignation Date,
Executive shall be paid Executive's accrued but unpaid base salary through the
Resignation Date, regardless of whether he executes this Agreement, in
accordance with the Company's customary payroll practices. Executive will also
be reimbursed for all unreimbursed expenses in an aggregate amount not to
exceed $5,000 that were incurred by Executive in the furtherance of Company
business through the Resignation Date within three (3) business days of
providing reasonable documentation relating to such expenses. With respect to
any benefits or rights that Executive has accrued or earned under any of the
Company's employee benefit plans, Executive shall be entitled to such benefits
pursuant to the terms of such plans.
(c) Payments and Medical Benefits. Subject to, and in
consideration of, Executive's release of claims as of the Resignation Date
contemplated by Section 5 and Executive's other covenants and agreements
contained herein and provided that the Benefit Effective Date (as such term is
defined below) occurs, the Company shall provide Executive with the payments
and benefits set forth in this subsection (b).
(i) Severance Payments. The Company shall pay to the
Executive (A) an amount equal to one (1) times the Executive's annual
base salary as in effect immediately prior to the Resignation Date,
payable in twenty-four (24) equal bi-monthly payments starting with
the first full pay period of the Company following the Benefit
Effective Date. Executive acknowledges and agrees that the Executive
severance payments provided under this Section 1(b)(i) are, but for
the mutual covenants and agreements set forth in this Agreement, in
addition to any consideration that he would otherwise be entitled to
receive.
(d) Other Benefits. In consideration of Executive's covenants
and agreements contained herein, the Company shall provide Executive with the
benefits set forth in this subsection (d).
(i) Stock Options. All of the shares of common stock, par
value $.01 per share, of the Company (the "Common Stock") subject to
stock options granted to Executive under the Company's applicable
stock option plans which are scheduled to vest on or prior to March
31, 2005 (the "Vesting Date") shall vest in accordance with their
terms. As of the date hereof, all of the shares of Common Stock
subject to stock options granted to Executive under the Company's
applicable stock option plans scheduled to vest following the Vesting
Date shall immediately expire and be forfeited as of the date hereof.
All stock options owned by Executive as of the Resignation Date shall
be exercisable in accordance with the terms thereof.
Section 2. Return of Records and Equipment. Executive agrees to return
prior to the Resignation Date all physical, computerized, electronic or other
types of records, documents, proposals, notes, lists, files and any and all
other materials including, without limitation, computerized and/or electronic
information that refers, relates or otherwise pertains to the Company and/or
its affiliates or subsidiaries, and any and all business dealings of said
persons and entities. Executive shall return prior to the Resignation Date to
the Company all computers that Executive has been issued during the course of
Executive's employment or which Executive otherwise currently possesses. In
addition, by the Resignation Date, Executive shall return to the Company all
other property or equipment that Executive has been issued during the course of
Executive's employment or which Executive otherwise currently possesses,
including, but not limited to, any cellular phones, Blackberries, Palm Pilots,
any other PDA devices and/or pagers. Executive acknowledges that he is not
authorized to retain any physical, computerized, electronic or other types of
copies of any such physical, computerized, electronic or other types of
records, documents, proposals, notes, lists, files or materials, and is not
authorized to retain any other property or equipment of the Company or its
affiliates and subsidiaries. Executive further agrees that he will immediately
forward to the Company any business information regarding the Company and/or
its affiliates and subsidiaries that has been or is inadvertently directed to
Executive following Executive's last day of employment with the Company. The
provisions of this paragraph are in addition to any other written agreements on
this subject that Executive may have with the Company and/or any of its
affiliates and subsidiaries, and are not meant to and do not excuse any
additional obligations that he may have under such agreements.
Section 3. Non-Competition; Confidentiality; Non-solicitation.
(a) Non-Competition. Executive agrees that during the remainder
of his employment and for a period of twelve (12) months immediately following
the Resignation Date, in the United States, Canada or any other place where the
Company and its affiliates conduct substantial manufacturing operations
relating to the Company's businesses, directly or indirectly (i) engage or
participate in any of the Company's principal businesses; (ii) enter the employ
of, or render any other services to, any person engaged in any of the Company's
principal businesses; or (iii) become interested in any such person in any
capacity, including, without limitation, as an individual, partner,
shareholder, lender, officer, director, principal, agent, consultant, advisor
or trustee; provided, however, that Executive may own, directly or indirectly,
solely as an investment, securities of any person traded on any national
securities exchange or listed on the National Association of Securities Dealers
Automated Quotation System if Executive is not a controlling person of, or a
member of a group which controls, such person and Executive does not, directly
or indirectly, own five percent (5.0%) or more of any class of equity
securities, or securities convertible into or exercisable or exchangeable for
five percent (5.0%) or more of any class of equity securities, of such person.
The Company and Executive hereby agree that the non-compete obligations
contained in this Section 3(a) shall supercede and control over any other
similar obligations contained in any other agreements or documents which such
other obligations shall have no force or effect.
(b) Confidentiality. Executive agrees that at all times during
or after his employment by the Company, he will not use, disclose or
disseminate any trade secrets, confidential information or any other
information of a secret, proprietary, confidential or generally undisclosed
nature relating to the Company and/or its affiliates and subsidiaries, or their
respective businesses, contracts, projects, proposed projects, revenues, costs,
operations, methods or procedures. The provisions of this Section 3(b) are in
addition to any other written agreements on this subject that Executive may
have with the Company and/or any of its affiliates and subsidiaries, and are
not meant to and do not excuse any additional obligations that he may have
under such agreements.
(c) Non-solicitation. Executive agrees that during the
remainder of his employment and for a period of twenty-four (24) months
immediately following the Resignation Date, Executive shall not either directly
or indirectly solicit, induce, recruit, or encourage to leave the employment of
the Company or its affiliates and subsidiaries for any reason and/or to perform
work for a competitor of the Company or its affiliates and subsidiaries (as an
employee, independent contractor, or otherwise) (such conduct is collectively
referred to as "solicitation") any person who is then employed by the Company
or its affiliates and subsidiaries or who left the employ of the Company or its
affiliates and subsidiaries less than six (6) months prior to the solicitation.
Section 4. Non-Disparagement Covenant. Executive agrees that he will
not in any way disparage the Company or its current and former officers,
directors and employees, verbally or in writing, or make any statements to the
press or to third parties that may reasonably be derogatory or detrimental to
the Company's good name or business reputation. Nothing in this section shall
preclude Executive from responding truthfully to inquiries made in connection
with any legal or governmental proceeding pursuant to subpoena or from making
such other statements as may be required by applicable law.
Section 5. Release of Claims. Executive hereby agrees and acknowledges
that as a condition to the receipt of any payments and benefits set forth in
Section 1(b) above, Executive shall execute and deliver to the Company the form
of the release attached hereto as Exhibit A (the "Release") on or following the
Resignation Date and shall not revoke Executive's consent to the Release within
seven (7) calendar days following Executive's execution. Provided that
Executive does not revoke his consent to the Release within such seven-day
period, the eighth day following execution of the Release shall be the "Benefit
Effective Date."
Section 6. Cooperation. Executive agrees that he will reasonably
cooperate in any claims, litigation or other legal actions in which the Company
or its subsidiaries or affiliates may become involved. Such cooperation shall
include Executive making himself available, upon the request of the Company and
at the Company's expense, for depositions, court appearances and interviews by
Company's counsel. To the maximum extent permitted by law, Executive agrees
that he will notify the Board, in care of the Chairman of Board, if he is
contacted by any government agency or any other person contemplating or
maintaining any claim or legal action against the Company or its subsidiaries
or affiliates or by any agent or attorney of such person.
Section 7. Miscellaneous Provisions.
(a) Fees and Expenses. Each party hereto agrees to bear its own
fees and expenses relating to each of the matters referred to, contemplated by
or the subject of this Agreement.
(b) Amendment and Modification. This Agreement may be amended,
modified and supplemented only by written agreement of Executive and the
Company. No waiver of any breach of any term or provision of this Agreement
shall be construed to be, nor shall be, a waiver of any other breach of this
Agreement. No waiver shall be binding unless in writing and signed by the party
waiving the breach.
(c) Notices. All notices, requests, demands and other
communications required or permitted shall be made in writing by hand-delivery,
telecopier (with written confirmation) or air courier guaranteeing overnight
delivery:
(i) If to the Executive, to:
Xxxxx Van Antwerp
0000 Xxxxxxxx
Xxxxxxx, XX 00000
Telecopier No.: 269/327-7801
or to such other persons or addresses as Executive shall reasonably furnish
to the Company;
(ii) If to the Company, to:
Packaging Dynamics Corporation
0000 Xxxx 00xx Xxxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telecopier No.: (000) 000-0000
with a copy to:
Skadden, Arps, Slate, Xxxxxxx & Xxxx (Illinois)
000 Xxxx Xxxxxx Xxxxx
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx X. Xxxxxx
Telecopier No.: (000) 000-0000
or to such other persons or addresses as the Company shall reasonably furnish
to Executive in writing.
All such notices, requests, demands and other communications
shall be deemed to have been duly given: at the time delivered by hand, if
personally delivered; when receipt acknowledged, if telecopied; and on the next
business day, if timely delivered to an air courier guaranteeing overnight
delivery.
(d) Severability. Whenever possible, each provision of this
Agreement shall be interpreted in such a manner as to be effective and valid
under applicable law, but if any provision of this Agreement is held to be
prohibited by or invalid under applicable law, such provision shall fail to be
in effect only to the extent of such prohibition or invalidity, without
invalidating the remainder of this Agreement or of any such provision.
(e) Governing Law. This Agreement shall be governed by and
construed in accordance with the laws of the State of Delaware, without regard
to its conflicts of law doctrine.
(f) Jointly Drafted. Executive understands that this Agreement,
including the Release, is deemed to have been drafted jointly by the parties.
Any uncertainty or ambiguity shall not be construed for or against any party
based on attribution of drafting to any party.
(g) Counterparts. This Agreement may be executed simultaneously
in two or more counterparts, each of which shall be deemed an original, but all
of which together shall constitute one and the same instrument.
(h) Headings. The headings of the Sections of this Agreement
are inserted for convenience only and shall not constitute a part hereof or
affect in any way the meaning or interpretation of this Agreement.
(i) Entire Agreement. This Agreement, including the Release,
sets forth the entire agreement and understanding of the parties hereto in
respect of the subject matter contained herein, and, except as expressly stated
in this Agreement, supersedes all prior agreements, promises, covenants,
arrangements, communications, representations or warranties, whether oral or
written, relating to the subject matter hereof.
(j) Specific Performance. Each of the parties hereto recognizes
and acknowledges that a breach by a party of any covenants or agreements
contained in this Agreement will cause the other party to sustain injury for
which it would not have an adequate remedy at law for money damages. Therefore,
each of the parties hereto agrees that in the event of any such breach, the
aggrieved party shall be entitled to the remedy of specific performance of such
covenants and agreements and preliminary and permanent injunctive and other
equitable relief in addition to any other remedy to which it may be entitled,
at law or in equity, and the parties hereto further agree to waive any
requirement for the securing or posting of any bond in connection with the
obtaining of any such injunctive or other equitable relief.
(k) Successors; Assignment; Third-Party Beneficiaries. This
Agreement shall be binding upon and shall inure to the benefit of each of the
parties hereto, and their respective heirs, legatees, executors,
administrators, legal representatives, successors and assigns, but except as
otherwise provided for or permitted herein neither this Agreement nor any of
the rights, interests or obligations hereunder shall be assigned by any party
hereto without the prior written consent of the other party; provided, that the
provisions of the Release are intended to be for the benefit of, and shall be
enforceable by, each Released Party (as such term is defined in the Release)
and his, her or its heirs, legatees, executors, administrators, legal
representatives, successors and assigns.
(l) Reliance. Executive understands and acknowledges that
reliance is placed wholly upon Executive's own judgment, belief and knowledge
as to the propriety of entering into this Agreement, including the Release.
Executive further acknowledges that he is relying solely upon the contents of
this Agreement, that there have been no other representations or statements
made by the Company and/or its affiliates and subsidiaries, and that Executive
is not relying on any other representations or statements whatsoever of the
Company and/or its affiliates and subsidiaries as an inducement to enter into
this Agreement or the Release, and if any of the facts upon which Executive now
relies in making this Agreement, including the Release, shall hereafter prove
to be otherwise, this Agreement and the Release shall nonetheless remain in
full force and effect.
(m) Counsel. Executive acknowledges that he has personally read
this Agreement and that he has reviewed, or has had the opportunity to review,
this Agreement with legal counsel of his own choosing. Executive further
acknowledges that he has been provided a full and ample opportunity to study
this Agreement that it fully and accurately reflects the content of any and all
understandings and agreements between the parties concerning the matters
referenced herein, that there have been no other representations or statements
made by the Company and/or its affiliates and subsidiaries, and that Executive
is not relying on any other representations whatsoever as an inducement to
execute this Agreement.
(n) Withholding. Any payments provided for under this Agreement
shall be paid net of any applicable withholding required under federal, state
or local law and any additional withholding to which Executive has agreed.
[Remainder of page intentionally left blank.]
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed, all as of the day and year first above written.
PACKAGING DYNAMICS CORPORATION
By: /s/ Xxxxxxx X. Xxxxxxxxx
----------------------------
Name: Xxxxxxx X. Xxxxxxxxx
Title: VP & CFO
EXECUTIVE
By: /s/ Xxxxx Van Antwerp
----------------------------
Name: Xxxxx Van Antwerp
EXHIBIT A
THIS AGREEMENT MAY NOT BE
SIGNED PRIOR TO May 31, 2005
RELEASE AGREEMENT
For good and valuable consideration, Xxxxx Van Antwerp (the
"Executive") hereby agrees to the terms of this agreement (this "Release
Agreement") on the date indicated below.
1. Release.
(a) The Executive, on behalf of himself, his heirs, executors,
administrators, successors and assigns, hereby irrevocably and unconditionally
releases Packaging Dynamics Corporation (the "Company") and its parents,
subsidiaries, divisions and affiliates, together with their respective owners,
assigns, agents, directors, partners, officers, members, employees, insurers,
employee benefit programs (including, but not limited to, trustees,
administrators, fiduciaries, and insurers of such programs), attorneys and
representatives and any of their predecessors and successors and each of their
estates, heirs and assigns (collectively, the "Company Releasees") from any and
all charges, complaints, claims, liabilities, obligations, promises,
agreements, causes of action, rights, costs, losses, debts and expenses of any
nature whatsoever, known or unknown, which the Executive or his heirs,
executors, administrators, successors or assigns ever had, now have or
hereafter can, will or may have (either directly, indirectly, derivatively or
in any other representative capacity) by reason of any matter, fact or cause
whatsoever against the Company or any of the other Company Releasees from the
beginning of time to the date of this Agreement. This release includes, without
limitation, all claims arising out of, or relating to, the Executive's
employment and/or end of his employment with the Company and all claims arising
under any federal, state and local labor, employment and/or anti-discrimination
laws including, without limitation, the Age Discrimination in Employment Act,
the Older Workers Benefit Protection Act, the Employee Retirement Income
Security Act of 1974 ("ERISA"), the Americans with Disabilities Act, Title VII
of the Civil Rights Act of 1964, the Family and Medical Leave Act, the Civil
Rights Act of 1991, the Fair Labor Standards Act, the Equal Pay Act, the
Immigration and Reform Control Act, the Uniform Services Employment and
Re-Employment Act, the Rehabilitation Act of 1973, Executive Order 11246, the
Xxxxxxxx-Xxxxx Act of 2002, and the Illinois Human Rights Act, each as amended.
Nothing in this Paragraph 1(a) shall be deemed to release (i) the Executive's
right to any vested benefits under the Company's 401(k) plan or any other
Company "employee benefit plans" within the meaning of Section 3(3) of ERISA,
or (ii) the Executive's right to enforce the terms of the Separation Agreement,
dated March 31, 2005, between the Company and the Executive (the "Separation
Agreement").
(b) The Executive acknowledges and agrees that the Company has fully
satisfied any and all obligations owed to the Executive arising out of the
Executive's employment with Company, and no further sums are owed to the
Executive by Company or by any of the other Company Releasees, except as
expressly provided in the Separation Agreement and under the Company's 401(k)
plan or any other Company "employee benefit plans" within the meaning of
Section 3(3) of ERISA.
(c) The Executive represents that he has no complaints, charges or
lawsuits pending against the Company or any of the other Company Releasees. The
Executive further covenants and agrees that neither he nor his heirs,
executors, administrators, successors or assigns will be entitled to any
personal recovery in any proceeding of any nature whatsoever against the
Company or any of the other Company Releasees arising out of any of the matters
released in this Paragraph 1.
2. Consultation with Attorney/Voluntary Agreement. The Executive
acknowledges that (i) the Company has advised the Executive of his right to
consult with an attorney prior to executing this Release Agreement, (ii) the
Executive has consulted with an attorney regarding the terms of this Release
Agreement prior to executing it, (iii) the Executive has carefully read and
fully understands all of the provisions of this Release Agreement, and (iv) the
Executive is entering into this Release Agreement, including the releases set
forth in Paragraph 1 above, knowingly, freely and voluntarily in exchange for
good and valuable consideration, including the obligations of the Company under
the Separation Agreement.
3. Consideration & Revocation Period.
(a) The Executive acknowledges that he has at least twenty-one (21)
calendar days to consider the terms of this Release Agreement, provided that he
may not sign this Release Agreement prior to May 31, 2005.
(b) The Executive will have seven (7) calendar days from the date on
which he signs this Release Agreement to revoke his consent to the terms of
this Release Agreement. Such revocation must be in writing and must be
addressed and sent via facsimile as follows: Packaging Dynamics Corporation,
Attention: Xxxxx X. Xxxxxxx, 0000 Xxxx 00xx Xxxxxx, Xxxxxxx, Xxxxxxxx 00000,
Facsimile No.: (000) 000-0000. Notice of such revocation must be received
within the seven (7) calendar days referenced above. In the event of such
revocation by the Executive, this Release Agreement shall not become effective
and the Executive shall not have any rights under Paragraph 1(b) of the
Separation Agreement.
(c) Provided that the Executive does not revoke this Release
Agreement, this Release Agreement shall become effective on the eighth calendar
day after the date on which the Executive signs this Release Agreement.
4. No Admission of Wrongdoing. Nothing herein or in the Separation
Agreement is to be deemed to constitute an admission of wrongdoing by Company
or any of the other Company Releasees.
5. Assignment. This Release Agreement is personal to the Executive and
may not be assigned by the Executive. This Release Agreement is binding on, and
will inure to the benefit of, Company and the other Company Releasees.
6. Enforceability. In the event that any one or more of the provisions
of this Release Agreement is held to be invalid, illegal or unenforceable, the
validity, legality and enforceability of the remainder hereof will not in any
way be affected or impaired thereby and any such provision or provisions will
be enforced to the fullest extent permitted by law.
7. Governing Law; Venue. This Release Agreement shall be governed by,
and construed in accordance with, the laws of the State of Delaware, without
regard to its conflicts of law doctrine.
8. Entire Agreement. This Release Agreement and the Separation
Agreement set forth the entire understanding between the Executive and the
Company, and supersede all prior agreements, representations, discussions, and
understandings concerning their subject matter. The Executive represents that,
in executing this Release Agreement, the Executive has not relied upon any
representation or statement made by the Company or any other Company Releasees,
other than those set forth herein, with regard to the subject matter, basis or
effect of this Release Agreement or otherwise.
IN WITNESS WHEREOF, the Executive has executed this Release Agreement
on the date indicated below.
EXECUTIVE
_____________________ __________
Xxxxx Van Antwerp Date
