EXHIBIT 10.37
SEPARATION AGREEMENT
This Separation Agreement ("Agreement") is entered into as of this 29th day of
February, 2004, among XXXXXXX & XXXXXX CORPORATION and any successors thereto
(collectively, the "Company") and Xxxxxxx X. Xxxxxxxx (the "Executive").
WHEREAS, Executive and Company, without any admission of liability, desire to
settle with finality, compromise, dispose of, and release all claims, demands
and causes of action Executive has or could assert against Company, whether
arising out of Executive's Employment Agreement with Xxxxxxx & Xxxxxx Products
Company, ("Employment Agreement"), or any agreement with a predecessor to
Company, or the termination of the Employment Agreement, or the employment
relationship, or the termination of the employment relationship, including the
right to any notice thereof, or any condition or benefit of employment or
otherwise. This Agreement is not and shall not be construed as an admission by
Company of any liability, an admission against Company's interest or any
violation of Company's policies or procedures.
NOW, THEREFORE, in exchange for consideration, the adequacy of which is hereby
acknowledged, the Executive and the Company agree as follows:
1. Separation. The employment relationship between the Executive and the
Company will terminate on February 29, 2004 (the "Termination Date").
Effective as of the Termination Date, the Executive's employment will
terminate as (a) President, Global Commercial Operations and (b) all
other officer, director, committee member and employee positions with
the Company and its subsidiaries. Executive shall not be required to
report for service after the date of this Agreement, and he shall
vacate the Company's premises and return Company property by such date.
2. Payments. The Company and the Executive hereby agree that the Company
shall, in exchange for the release contained herein, pay Executive:
(a) $0, less applicable taxes and withholdings, representing
payment for zero (0) days of accrued and unused vacation time,
payable to Executive with the March payroll;
(b) subject to Executive's compliance with Sections 5 and 6
hereof, for a period of twenty-four (24) months from the
Termination Date (such twenty-four (24) month period herein
referred to as the "Restricted Period") $34,375 per month
(prorated in the case of the partial month period), less
applicable taxes and withholding, commencing with the
regularly scheduled payroll period following the expiration of
the Revocation Period.
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(c) $75,000 lump sum payment, less applicable taxes and
withholdings, payable to Executive on the first business
day following expiration of the Revocation Period (as
defined in Section 11);
(d) $225,000 annual incentive payment equal to the target
bonus, payable during the month of April in accordance
with the normal annual incentive payment; and
(e) subject to Executive's compliance with Sections 5 and 6
hereof the benefits set forth in Schedule B, for a period of
twenty-four (24) months from the Termination Date or the date
Executive commences employment with any other employer.
It is further agreed that that the Executive's stock options may be
exercised at any time on or prior to the date which is 180 days after
the Termination Date, after which time all such options shall expire
and be of no further force and effect.
3. Release. In consideration of the above, the sufficiency of which the
Executive hereby acknowledges, the Executive, on behalf of the
Executive and the Executive's heirs, executors and assigns hereby
releases and forever discharges the Company and its members,
shareholders, parents, affiliates, subsidiaries, divisions, any and all
current and former directors, officers, employees, agents, and
contractors and their heirs and assigns, and any and all employee
pension benefit or welfare benefit plans of the Company, including
current and former trustees and administrators of such employee pension
benefit and welfare benefit plans, from all claims, charges, or
demands, in law or in equity, whether known or unknown, which may have
existed or which may now exist from the beginning of time to the date
of this Agreement, including, without limitation, any claims the
Executive may have arising from or relating to the Employment
Agreement, any stock option, deferred compensation, or supplemental
retirement agreements, Executive's employment or termination from
employment with the Company, including a release of any rights or
claims the Executive may have under Title VII of the Civil Rights Act
of 1964, as amended, and the Civil Rights Act of 1991 (which prohibit
discrimination in employment based upon race, color, sex, religion and
national origin); the Americans with Disabilities Act of 1990, as
amended, and the Rehabilitation Act of 1973 (which prohibit
discrimination based upon disability); the Family and Medical Leave Act
of 1993 (which prohibits discrimination based on requesting or taking a
family or medical leave); Section 1981 of the Civil Rights Act of 1866
(which prohibits discrimination based upon race); Section 1985(3) of
the Civil Rights Act of 1871 (which prohibits conspiracies to
discriminate); the Employee Retirement Income Security Act of 1974,
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as amended; any other federal, state or local laws against
discrimination; or any other federal, state, or local statute, or
common law relating to employment, wages, hours, or any other terms and
conditions of em ployment. This includes a release by the Executive of
any claims for wrongful discharge, breach of contract, torts or any
other claims in any way related to the Executive's employment with or
resignation or termination from the Company, including any claim under
any written or oral understandings relating to employment. This release
also includes a release of any claims for age discrimination under the
Age Discrimination in Employment Act, as amended ("ADEA"). The ADEA
requires that the Executive be advised to consult with an attorney
before the Executive waives any claim under ADEA and Executive
acknowledges that he has consulted with an attorney with respect to
such waiver. In addition, the ADEA provides the Executive with at least
21 days to decide whether to waive claims under ADEA and seven days
after the Executive signs the Agreement to revoke that waiver.
The Company releases Executive and his assigns, agents, and heirs from
further obligation under the Employment Agreement and shall indemnify
executive against liability for acts or omissions taken in good faith
in the course of his employment to the extent permitted by law and
under the Company's bylaws. This release does not release either the
Executive or the Company from any obligations due to the Company or the
Executive under this Agreement. This Agreement is not an admission by
either the Executive or the Company of any wrongdoing or liability.
This release does not interfere with or otherwise affect Executive's
right to file a charge or otherwise participate in an EEOC proceeding
insofar as it is required by current EEOC regulations. However,
Executive understands that Executive will assert this Agreement as an
affirmative defense against any claim Executive may assert in any forum
or proceeding which is in violation of the terms of this Agreement.
Executive further understands and acknowledges that by signing this
Agreement, he has released any right to recover monetary damages on the
basis of alleged unlawful conduct by Company.
4. Acknowledgment and No Reinstatement. The Executive understands and
agrees that the consideration provided for herein is more than (and in
lieu of) that which the Executive would otherwise be entitled to under
the Company's existing plans and policies or otherwise and that the
consideration provided herein is more than sufficient to compensate him
for his waiver of any and all claims under the Employment Agreement.
The Executive waives any right to reinstatement or future employment
with the Company following the Executive's separation from the Company
on the Termination Date.
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5. Non-Disparagement. The Executive agrees not to make any oral or
written statements or otherwise take any action that is intended or may
reasonably be expected to disparage the reputation, business, prospects
or operations of the Company, its affiliates, officers, directors,
stockholders or employees or any persons related to the fore going and
the Company agrees that it will not, and will use all reasonable
efforts to cause its affiliates, officers directors, stockholders and
employees not to, make any oral or written statements or otherwise take
any action that is intended or may reasonably be expected to disparage
the reputation of Executive.
6. Confidentiality; Non-Competition; Etc. (a) The Executive agrees that
the Executive will keep confidential all information and trade secrets
of the Company or any of its subsidiaries or affiliates and will not
disclose such information to any person without prior approval of the
Board of Directors of the Company or use such information for any
purpose. It is understood that for purposes of this Agreement the term
"confidential information" is to be construed broadly to include all
material nonpublic or proprietary information. The Executive shall
promptly return any documents, records, data, books or materials of the
Company or its subsidiaries or affiliates in his possession or control
and any of his work papers containing confidential information or trade
secrets of the Company or its subsidiaries or affiliates.
(b) The Executive agrees that from the date hereof through the
end of the Restricted Period, the Executive shall not, directly or
indirectly (whether for compensation or otherwise), as an agent,
principal, partner, employee, officer, director, trustee, consultant,
shareholder, or in any other capacity, own, manage, operate, join,
control, directly render services for, or participate in the ownership,
management or operation or control of any of the Competing Businesses
(as defined below); provided, however, that notwithstanding the
foregoing, nothing contained in this Agreement shall be deemed to
preclude the Executive from owning not more than 2% of the publicly
traded securities of any Competing Business. The "Competing Businesses"
shall mean any business listed on Schedule A hereto conducted by any
company listed beneath such business (and any successors to any such
company with respect to such business).
(c) The Executive acknowledges that the agreements and
covenants contained in this Section are essential to protect the value
of the Company's and its subsidiaries' business and assets and by
virtue of his employment with the Company, the Executive has obtained
knowledge, contacts, know-how, training, experience and other
information relating to the Company's and its subsidiaries' business
operations, and there is a substantial probability that such knowledge,
know-how, contacts, training, experience and information could be used
to the substantial advantage of a competitor of the Company and its
subsidiaries and to the Company's and its subsidiaries'
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substantial detriment. Accordingly, for a period commencing on the date
hereof and ending on the calendar following the last day of the
Restricted Period, the Executive shall not, directly or indirectly, for
himself or on behalf of or in conjunction with any person, partnership,
corporation or other entity, interfere with or disrupt, or attempt to
interfere with or disrupt, the relationship, contractual or otherwise,
between the Company or any of its subsidiaries and any customer,
client, supplier, distributor or agent of the Company or any of its
subsidiaries.
(d) Executive covenants and agrees that he will not during the
Restricted Period, (i) solicit, employ or otherwise engage as an
employee, independent contractor or otherwise, any person who is or was
an employee of the Company or any of its subsidiaries or affiliates at
any time during the 24 month period immediately preceding the
Termination Date, (ii) induce or attempt to induce any employee of the
Company or any of its subsidiaries or affiliates to terminate such
employment or (iii) interfere with the relationship of the Company or
any of its subsidiaries of affiliates with any person, including any
person who, at any time during the 24 month period immediately
preceding the Termination Date, was an employee, contractor, supplier
or customer of the Company or any of its subsidiaries or affiliates.
(e) It is the desire and intent of the parties that the
provisions of this Section shall be enforced to the fullest extent
permissible under the laws and public policies applied in each
jurisdiction in which enforcement is sought. Accordingly, if any
particular portion of this Section shall be adjudicated to be invalid
or unenforceable, this Section shall be deemed amended to delete there
from the portion thus adjudicated to be invalid or unenforceable, such
deletion to apply only with respect to the operation of this Section in
the particular jurisdiction in which such adjudication is made. The
Executive agrees that he will execute any and all documents which are
reasonably necessary to effectuate the provisions of this Section.
(f) If there is a breach or threatened breach by the Executive
of the provisions of this Agreement, the Company or its affiliates
shall be entitled, without the requirement to post a bond, to an
injunction restraining the Executive from such breach. Nothing herein
shall be construed as prohibiting the Company from pursuing any other
remedies for such breach or threatened breach.
7. Cooperation; Reimbursement. The Executive shall, at the request of
the Company, reasonably assist and cooperate with the Company in the
defense and/or investigation of any third party claim or any
investigation or proceeding, whether actual or threatened, including,
without limitation, participating as a witness in any litigation,
arbitration, hearing or other proceeding between the Company and a
third party or any government body. The Company shall reimburse the
Executive for all reasonable
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expenses incurred by him in connection with such assistance including,
without limitation, travel expenses.
8. Governing Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Michigan, without reference to
the principles of conflict of laws.
9. Withholding. All payments to be made hereunder shall be net of all
applicable income and employment taxes required to be withheld
therefrom.
10. Complete Agreement. This Agreement represents the complete
agreement between the Executive and the Company concerning the subject
matter in this Agreement and supersedes all prior agreements or
understandings, written or oral, including the Employment Agreement and
any stock option agreement. Any oral or written understandings
concerning the Executive's employment are hereby terminated as of the
date of such agreements as if such agreements had never been executed,
including any agreements with stated effect after termination
including, without limitation, the Severance Benefits Agreement, dated
as of February 29, 2004, by and among the Executive and the Company.
This Agreement may not be amended or modified otherwise than by a
written agreement executed by the parties hereto or their respective
successors and legal representatives.
11. Voluntary Agreement. This Agreement has been entered into
voluntarily and not as a result of coercion, duress, or undue
influence. The Executive acknowledges that the Executive has read and
fully understands the terms of this Agreement and has been advised to
consult with an attorney before executing this Agreement. Additionally,
the Executive hereby acknowledges and waives the opportunity of at
least 21 days to consider this Agreement. It is further understood that
for a period of 7 days following the execution of this Agreement (the
"Revocation Period"), the Executive may revoke this -----------------
Agreement, and this Agreement shall not become effective or enforceable
until the Revocation Period has expired. No revocation of this
Agreement by the Executive shall be effective unless the Company has
received, within the Revocation Period, written notice of any
revocation.
12. Successors and Assigns. The Company will require any successor or
assignee, whether direct or indirect, by purchase, merger,
consolidation or otherwise, of all, or substantially all, of the
business and/or assets of the Company to assume and agree to perform
this Agreement in the same manner and to the same extent that the
Company would be required to perform it if such succession or
assignment had not taken place. This Agreement shall inure to the
benefit of and be binding on the Executive's personal and legal
representatives, executors, administrators, successors, heirs,
distributees, devisees and legatees.
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The parties to this Agreement have executed this Agreement as of the day and
year first written above.
XXXXXXX & XXXXXX CORPORATION
By: /S/ Xxxxx X. Xxxxxxxx
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Name: Xxxxx X. Xxxxxxxx
Title: Chief Executive Officer
EXECUTIVE
/S/ Xxxxxxx X. Xxxxxxxx
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Name: Xxxxxxx X. Xxxxxxxx
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SCHEDULE A
AUTOMOTIVE FABRIC BUSINESS INTERIOR TRIM & EXTERIOR TRIM BUSINESS
Chatham Borgstena ArvinMeritor
Xxxxxxxx Xxxxx Inc. Acsys Technologies
Xxxxxxxx & Company Xxxxxx
Xxxxxx Automotive
CARPET & ACOUSTIC SYSTEMS BUSINESS Faurecia
H.P. Xxxxxx (Automotive System) Findlay Industries
Xxxxxxxxxxx NOK Foamex International Inc.
Xxxxx Carpet Inc. GE Plastics
Peguform Guardian Automotive
Rieter Automotive Systems Intier Automotive Inc.
TG North America Xxxxxxx Controls Inc.
The Woodbridge Group Key Plastics L.L.C.
LDM Technologies
OPEN ROOF SYSTEMS BUSINESS Xxxx Corporation
Edscha USA Inc. Plastech Engineered Products Company
Illbruck Automotive Venture Plastics Inc.
American Sun Roof Ventra Group Inc.
Webasto Visteon Corporation
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SCHEDULE B
1. Medical Coverage
2. Dental Coverage
3. Retirement Income Security Plan
4. Life Insurance
5. Accidental Death & Dismemberment Insurance
6. Perquisite Allowance
7. Cell Phone
8. Gasoline Card
