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EXHIBIT 10.31
THIS AGREEMENT CONTAINS A WAIVER OF CERTAIN OF YOUR LEGAL
RIGHTS. YOU ARE ADVISED TO CONSULT
WITH AN ATTORNEY PRIOR TO SIGNING
SETTLEMENT AGREEMENT AND RELEASE
This Settlement Agreement and Release is made as of February
15, 2001, by and between XXXXXX X. XXXXXXXX (hereinafter referred to as
"Employee") and ALLEGHENY TECHNOLOGIES INCORPORATED, a Delaware corporation,
which includes, for purposes of this Settlement Agreement and Release, its
subsidiaries and related organizations and, collectively, all of its and their
officers, directors, employees, trustees, agents, representatives, predecessors,
successors and assigns, and compensation plans and programs sponsored or
established by any of the foregoing (hereinafter collectively referred to as the
"Corporation").
WHEREAS, Employee was an employee of the Corporation, was
terminated from employment with Corporation without cause on December 6, 2000
and has been offered the payments and severance benefits set forth herein upon
his termination of employment in exchange for a release of all claims and his
agreement not to xxx the Corporation; and
WHEREAS, the parties desire to reach a mutually satisfactory
and legally binding compromise of any and all claims which have been made, or
which could be made, arising out of, or related to, Employee's employment with,
or separation of employment from, the Corporation, including, but not limited
to, claims arising from or under that certain Employment Agreement by and
between the Corporation and the Employee dated August 17, 1999 (the "Employment
Agreement");
NOW, THEREFORE, in consideration of the mutual covenants and
agreements contained herein and intending to be legally bound hereby, it is
understood and agreed as follows:
1. SEVERANCE PAYMENTS AND BENEFITS
Subject to Sections 1(k) and 2:
x. Xxxxxxxxx Payments. On the eighth day after the Corporation receives
a fully executed copy of this Settlement Agreement and Release and, if the
execution by the Employee of this Settlement Agreement and Release has not then
been revoked (the "Effective Date"), the Corporation will pay to the Employee,
in a lump sum payment, $3,894,621, that is, the sum of (i) amount determined by
multiplying $800,000, his regular base monthly pay at the rate in effect as of
the date of this Settlement Agreement and Release, by 3.6, the number of whole
and partial years remaining in the term of the Employment Agreement, (ii)
$750,000, the sum of unpaid special bonuses under Section 4(b)(ii) of the
Employment Agreement and (iii) $264,621 with respect to calendar year 2000 under
the Corporation's Annual Incentive Plan.
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b. Supplemental Pension Agreement. The Corporation and the Employee
shall comply with all terms of the Supplemental Pension Agreement by and between
the Corporation and the Employee dated September 16, 1999 (the "Supplemental
Pension Agreement"). Without intending to limit the Supplemental Pension
Agreement, the Corporation shall pay to the Employee (or his beneficiary) 12
monthly payments of $33,000 each commencing on the first day of the month next
following the month in which the Employee attains (or would have attained) age
62 if the Employee had not at any time after the date of this Settlement
Agreement and Release and before attaining age 62 been employed by an employer
which is not exempt from federal income taxation.
c. Continuation of Life, Health and Long Term Disability Coverages. The
Corporation will continue until July 16, 2004, to pay its cost toward life,
health and disability coverage of the Employee and his dependents enrolled as of
December 6, 2000 under the Corporation's employee benefits plans providing life,
health and disability coverages as in effect on December 6, 2001. The Employee
shall pay the Employee portion of such cost at the rate in effect from time to
time and if he fails to make such payments within thirty (30) days of the date
due, the obligations of the Corporation to provide coverage hereunder shall
cease. The Employee acknowledges and agrees that his rights under the
Consolidated Omnibus Budget Reconciliation Act ("COBRA") have been explained to
him and that this section satisfies the obligations of the Corporation to the
Employee and his dependents under COBRA. If any claims by the Employee or
dependents for benefits under the Corporation's health plan have been denied on
or before the Effective Date for reasons of lack of coverage, the Corporation
shall cause such claims to be paid or reimburse the Executive for amounts
actually paid to the service provider within thirty (30) days of the Effective
Date.
d. Retiree Medical Coverage. The Employee shall participate in the
Corporation's medical plan for retirees as applied to senior corporate officers
from time to time and as set forth in the letter to the Employee from the
Corporation dated July 24, 2000, subject to the terms and conditions of such
plan as the same may be amended from time to time including, but not limited to,
the precondition that the Employee attain retirement age and not then have
retiree medical coverage from a subsequent employer.
e. Lapse of Restrictions on Restricted Shares. On the Effective Date,
the restrictions on transferability on the 75,000 shares of the Corporation's
common stock issued in connection with that certain Restricted Stock Agreement
by and between the Corporation and the Employee dated September 16, 1999 shall
lapse and the Corporation shall promptly issue to the Employee, upon
satisfaction of the Corporation's withholding and payroll tax obligations, in
exchange for such restricted shares, certificates without restrictive legends
evidencing 75,000 shares of Corporation common stock.
f. Stock Acquisition and Retention Plan ("SARP"). On the Effective
Date, the Corporation shall waive the restrictions applicable to each and any
share of Corporation common stock made subject by the Employee to restrictions
under the Corporation's SARP and the Corporation shall promptly issue to the
Employee certificates without restrictive legends evidencing such shares.
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g. Stock Options. Notwithstanding the terms of any Stock Option
Agreement between the Corporation and the Employee, the Employee shall be
permitted to exercise any option to the extent vested on December 6, 2000 at any
time prior to the close of business on March 15, 2001. As of the close of
business on March 15, 2001, such option held by the Employee shall be void and
of no force and effect.
h. Pay in lieu of vacation. Pursuant to the policies and practices of
the Corporation, the Corporation shall pay the Employee an amount equal to the
number of his vacation days remaining as of December 6, 2000 multiplied by his
base pay per working day.
i. Executive Deferred Compensation Plan. As of the Effective Date, the
Employee has an accrued benefit of $572,591 under and subject to the terms and
conditions of the Corporation's Executive Deferred Compensation Plan as in
effect on the Effective Date. Such amount shall be paid to him in accordance
with the terms of that plan and elections made by the Employee or elections he
is entitled to make under the terms of that plan.
j. ERISA Rights. Except as provided in Section 1(c), nothing in this
Settlement Agreement and Release is intended to surrender or waive any right the
Employee may have under the Employee Retirement Income Security Act of 1974, as
amended ("ERISA"), including, but not limited to, any vested and accrued
balances under the Allegheny Technologies Incorporated Pension Plan or the
Allegheny Technologies Retirement Savings Plan.
k. Applicable Taxes. Notwithstanding any provision of this Settlement
Agreement and Release, the Corporation shall withhold from each and any payment
under this Settlement Agreement and Release and any ancillary agreement, policy,
practice or plan the amount determined in good faith by the Corporation to be
required to be withheld for applicable federal, state and/or local taxes or to
be paid by the Employee as federal, state or local payroll taxes. Such
obligations shall be satisfied with respect to distribution of securities by
withholding from the number of such securities the number with a value equal to
the withholding and payroll tax obligation determined using the closing trading
price reported on the New York Stock Exchange for the day prior to the day upon
which distribution is made. Any such withholding shall be made prior to the
reduction provided in Section 2.
2. REDUCTION FOR EXCESS CHARGES BY EMPLOYEE
The Corporation shall deduct from the amounts otherwise due and payable
under Section 1, and after the application of Section 1(k) to each such amount,
$135,418 representing the aggregate of charges asserted by the Corporation to
have been unreimbursed and personal in nature.
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3. SEPARATION FROM EMPLOYMENT AND NO RE-EMPLOYMENT
Effective December 6, 2000, the Employee's separation from service was
effective and from and after that date he is and was no longer an employee of
the Corporation. To the extent not delivered prior to the date described in
Section 1(a), the Corporation shall pay the Employee his regular base salary
through December 6, 2000. The Employee agrees that he has no claim for
re-employment, and further agrees that he will not at any time after her
execution of this Settlement Agreement and Release apply for employment with the
Corporation and that, if he does so, the Corporation may refuse to hire him (for
any reason or for no reason) and he will not initiate any proceeding of claim of
any kind on account of such refusal.
4. RELEASE OF LIABILITY AND COVENANT NOT TO XXX
(a) Employee, on behalf of himself, his heirs, dependents, and
administrators, absolutely, irrevocably and unconditionally releases and forever
discharges the Corporation from any and all claims, known and unknown, under
federal, state or municipal law (including all common law claims) and all
federal, state (including Pennsylvania and Maryland) and local statutes,
ordinances and regulations including, but not limited to, claims relating to
breach of contract, breach of promise, misrepresentation, wrongful discharge,
discrimination on account of age, race, sex, religion, national origin, military
status, disability or other such characteristics protected by law, that he may
have against the Corporation relating to, or arising out of, his employment
with, or separation from employment with the Corporation, whether now apparent
or yet to be discovered or which may hereafter develop based on events that have
transpired from the beginning of time to the date of his execution of this
Settlement Agreement and Release, whether or not any action, claim, complaint,
grievance or charge has been filed by Employee or on his behalf (collectively
"Civil Rights Provisions"). Further, Employee specifically releases the
Corporation from any and all claims arising under the following Civil Rights
Provisions, in each case as amended and in effect:
(i) Title VII of the Civil Rights Act of 1964, as amended;
(ii) the Americans With Disabilities Act of 1990; as amended
(iii) the Age Discrimination in Employment Act, as amended; and
(iv) any same or similar state or local law, ordinance or regulation
prohibiting such discrimination in employment.
The Employee specifically recognizes that a portion of the amount set forth in
Section 1 above is in full satisfaction of any claim the Employee may or could
make against the Corporation in connection with the Employment Agreement, the
Corporation's Annual Incentive Plan, Performance Share Plan or any other
compensation and deferred compensation plan or program of the Corporation
applicable to senior or executive employees or employees generally, and the
foregoing release is intended to release each and all such obligations and
plans.
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The foregoing shall not prevent the Employee from filing charges with the Equal
Employment Opportunity Commission but the Employee agrees he shall not
financially benefit from such charges.
(b) If Employee violates this Settlement Agreement and Release by
filing a claim against or suing the Corporation, Employee agrees to pay all
costs and expenses of defending against such claims incurred by the Corporation
or in prosecuting any counterclaim or cross claim based on this Settlement
Agreement and Release, including reasonable attorney's fees and all other costs
and expenses associated therewith.
(c) Except as provided below in this subsection, the Corporation
absolutely, irrevocably and unconditionally releases and forever discharges the
Employee from any and all claims, known and unknown, under federal, state or
municipal law (including common law claims) and all federal, state and local
statutes, including, but not limited to, claims related to breach of contract,
that it may have against the Employee relating to, or arising out of, his
employment with, or separation from, employment with the Corporation whether now
apparent or yet to be discovered or which may hereafter develop based on events
that have transpired from the beginning of time to the date of execution of this
Settlement Agreement and Release. The Corporation does not hereby release or
discharge the Employee from liability from or the cost of defense of any claim,
action suit or demand brought by a party other than the Corporation and, if a
claim is bought against the Corporation by a third party, the Corporation may
join the Employee as an additional defendant, cross claim, make claim for
indemnity or contribution and/or take other actions with regard to the Employee
as permitted under the then prevailing rules of court. The Corporation
specifically reserves the right to file a claim or take any other action it
deems necessary or appropriate to void its obligations under this Settlement
Agreement and Release and, in particular under this subsection, if it determines
that the Affidavit provided by the Executive, attached hereto as Exhibit A and
made a part hereof, is false or misleading in any material respect, such
Affidavit being a material inducement to the Corporation to enter into this
Settlement Agreement and Release.
(d) If the Corporation violates the provisions of subsection 4(c), the
Corporation agrees to pay all costs and expenses of defending against claims
violating subsection 4(c) incurred by the Employee or in prosecuting any
counterclaim or cross claim based on this Settlement Agreement and Release,
including reasonable attorneys' fees and all other expenses associated
therewith.
5. WAIVER OF RELIEF
This Settlement Agreement and Release encompasses all relief, no matter
how called, whether now apparent or yet to be discovered, including but not
limited to: wages, front pay, back pay, compensatory damages, pension or
retirement benefits, punitive damages, liquidated damages, damages for pain,
suffering, mental anguish and loss of enjoyment of life, and, costs and
attorney's fees. Without limiting the foregoing, it is expressly agreed that the
Corporation shall have no obligation to pay or reimburse the Employee for
payment of attorney's fees for review and/or negotiation of this Settlement
Agreement and Release. Further, Employee agrees
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that he will not be entitled to any benefit from any claim or proceeding filed
on his behalf with any agency or court.
6. NO ADMISSION OF LIABILITY
Execution of this Settlement Agreement and Release and compliance with
its terms, as provided above, do not constitute an admission by the Corporation
that (i) it has treated the Employee or any other person unfairly or unlawfully
or (ii) that it engaged in any breach of contract or violation of any Civil
Rights Provision or other employment discrimination statute, or any other legal
provision, regulation, ordinance order or rule of common law.
7. MUTUAL CONFIDENTIALITY OF AGREEMENT AND NON-DISPARAGEMENT COMMITMENTS
(a) Employee agrees to keep confidential and not to disclose to any
person (other than members of the Employee's immediate family and Employees'
attorney) the terms of this Settlement Agreement and Release; provided, however,
that this Settlement Agreement and Release may be used as evidence in any claim
or litigation alleging breaches hereof. Any immediate family member or attorney
to whom Employee discloses information concerning this Settlement Agreement and
Release shall also be bound by the terms of this sub-section and Employee shall
be responsible for any breaches of confidentiality by such persons. Employee
agrees that, in the event he makes any disclosure that constitutes a violation
of this Settlement Agreement and Release (including, without limitation the
amount or approximate amount of the severance payment made pursuant to Section
1), a court may direct Employee to cease and desist, to compensate the
Corporation for all damages it has incurred as a consequence, and to pay the
Corporation its reasonable costs and expenses, including reasonable attorney's
fees, incurred in connection with its efforts to enforce this Settlement
Agreement and Release. Recognizing that damages may be difficult to calculate,
Employee agrees that the appropriate award of damages for his violation of this
subsection shall be no less than one hundred thousand dollars ($100,000),
without prejudice to the right of the Corporation to request and recover actual
damages in a larger amount should they be proven.
(b) Except for disclosure required under any law or regulation,
including, but not limited to disclosure in connection with soliciting proxies,
the Corporation agrees to keep confidential and not to disclose to any person
(other than employees or agents who approve or implement this Settlement
Agreement and Release) the terms of this Settlement Agreement and Release;
provided, however, that this Settlement Agreement and Release may be used as
evidence by the Corporation in any claim or litigation alleging breaches hereof.
(c) Employee states that he has returned to the Corporation all records
relating to the Corporation and its business in whatever medium and agrees not
to disclose or divulge, directly or indirectly, any business secret or other
confidential or proprietary information of the Corporation to any person, firm,
partnership, venture or corporation, except as required by law.
(d) Employee and Corporation agree that he and it will not, in any way,
disparage one another to any person(s) or organization(s), including, without
limitation, any employee of the Corporation.
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(e) The Corporation will respond to all references inquiries concerning
the Employee by confirming the dates of his employment with the Corporation.
8. COOPERATION
Employee agrees to cooperate with the Corporation in the prosecution or
defense of claims asserted by or against the Corporation. Such cooperation shall
include meeting with representatives of the Corporation or the Corporation's
attorneys, or both, divulging to the Corporation any information that the
Corporation may request for possible use in litigation, arbitration, or other
legal proceeding, and testifying on behalf of the Corporation at the
Corporation's request.
9. NON-COMPETITION AGREEMENT
Employee acknowledges and agrees that Section 6 of the Employment
Agreement imposes on him certain restrictions, including, but not limited to,
Non-competition, Nondisclosure and Nonsolicitation, and that such restrictions
survive the termination of his employment under the Employment Agreement for a
period of one year. The Employee acknowledges and reaffirms that until after
January 3, 2002, he shall keep and observe in all particulars the provisions and
the restrictions under Section 6 of the Employment Agreement which is
incorporated herein as if set forth at length. Employee agrees that any breach
or threatened breach of any covenants contained in Section 6 of the Employment
Agreement and incorporated herein would cause immediate, material and
irreparable harm to the Corporation and that money damages would not provide an
adequate remedy to the Corporation. The Corporation shall have all of the rights
and remedies available under law or equity, including, but not limited to,
injunctive relief, available to any party enforcing any such covenant. Each of
the rights and remedies shall be independent of the other and shall be severally
enforceable including, but not limited to, the right to have the covenants
specifically enforced by any court of competent jurisdiction by any court of
competent jurisdiction and the right to require Employee to account for and pay
over to the Corporation all benefits derived or received by him as a result of
any such breach of covenant and Employee shall not raise a defense to the
granting of any such relief that the Corporation has an adequate remedy at law.
10. ENTIRE AGREEMENT
This Settlement Agreement and Release constitutes the entire agreement
and understanding of the parties and supersedes all prior negotiations,
understandings and agreements, proposed or otherwise, written or oral,
concerning the subject matters hereof. Furthermore, no modification of this
Settlement Agreement and Release shall be binding unless in writing signed by
each of the parties hereto.
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11. SEVERABILITY
Should any provision of this Settlement Agreement and Release be
declared illegal or unenforceable by any court of competent jurisdiction and if
such provision cannot be modified to be enforceable (including the general
release language), such provision shall immediately become null and void,
leaving the remainder of this Settlement Agreement and Release in full force and
effect. However, if any portion of the general release language in Section 3 or
4 are ruled unenforceable for any reason, the Corporation and Employee agree to
use their best efforts to negotiate in good faith an enforceable general
release.
12. GOVERNING LAW
This Settlement Agreement and Release shall be governed by, and
construed and enforced in accordance with, the laws of the Commonwealth of
Pennsylvania, the state in which the Corporation's principal office is located,
without regard to its principles or provisions of conflicts of laws. Any action
brought under this Settlement Agreement and Release shall be brought in a court
of competent jurisdiction with venue in Allegheny County, Pennsylvania.
13. JUDICIAL ENFORCEMENT
This Settlement Agreement and Release may be specifically enforced in
judicial proceedings brought in equity in a court of competent jurisdiction with
venue in Allegheny County, Pennsylvania.
14. VOLUNTARY AND UNDERSTANDING EXECUTION
Employee agrees and acknowledges that he has read it and fully
understands the terms and conditions of the Settlement Agreement and Release,
including the release of claims and waiver of rights, that he has consulted with
his attorney, or, if he has not consulted with their attorneys, he has chosen
not to consult with an attorney after having been advised to do so with ample
opportunity to do so, and that he enters into this Settlement Agreement and
Release knowingly, voluntarily, free from duress and as a result of his own free
will.
15. EFFECT OF SETTLEMENT AGREEMENT AND RELEASE ON CHANGE IN CONTROL
AGREEMENT
Without limiting the general applicability of Section 9, the Employee
specifically agrees that this Settlement Agreement and Release supersedes in its
entirety the Change in Control Agreement, as amended, by and between the
Corporation and the Employee (the "Change in Control Agreement") and that the
shall not be entitled to any payments under the Change in Control Agreement
under any circumstances now or in the future.
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16. CONSIDERATION AND REVOCATION PERIODS
(A) EMPLOYEE ACKNOWLEDGES THAT HE HAS BEEN ADVISED BY THIS WRITING AND
PREVIOUSLY BY THE CORPORATION TO CONSULT WITH AN ATTORNEY OF HIS CHOOSING
CONCERNING HIS RIGHTS IN CONNECTION WITH HIS TERMINATION FROM EMPLOYMENT AND THE
TERMS AND CONDITIONS OF THIS SETTLEMENT AGREEMENT AND RELEASE, INCLUDING THE
RELEASE OF ALL CLAIMS CONTAINED HEREIN.
(B) EMPLOYEE ACKNOWLEDGES THAT HE HAS BEEN ADVISED THAT HE HAS A LEGAL
RIGHT TO USE ALL OR ANY PART OF TWENTY-ONE (21) DAYS TO CONSIDER, IN
CONSULTATION WITH HIS ATTORNEY, WHETHER TO SIGN THIS SETTLEMENT AGREEMENT AND
RELEASE AND THAT, DURING SUCH PERIOD OF CONSIDERATION, THE CORPORATION SHALL NOT
REVOKE ITS OFFER TO ENTER INTO THIS SETTLEMENT AGREEMENT AND RELEASE ON THE
TERMS AND CONDITIONS SET FORTH HEREIN.
(C) EMPLOYEE ACKNOWLEDGES THAT HE HAS BEEN ADVISED THAT, IF HE SIGNS
THIS SETTLEMENT AGREEMENT AND RELEASE, HE CAN THEREAFTER REVOKE HIS EXECUTION OF
THIS SETTLEMENT AGREEMENT AND RELEASE ON OR BEFORE THE CLOSE OF BUSINESS ON THE
SEVENTH DAY AFTER HIS EXECUTION HEREOF BY DELIVERING A WRITTEN REVOCATION TO THE
CORPORATION, ATTENTION, XXX X. XXXXXX, SENIOR VICE PRESIDENT, GENERAL COUNSEL
AND SECRETARY, 00XX XXXXX, XXX XXX XXXXX, XXXXXXXXXX, XX 00000-0000.
IN WITNESS WHEREOF, the aforesaid parties have hereunto set their hands
and seals as of the date written below.
WITNESS XXXXXX X XXXXXXXX
/s/ Xxxxxxxxx X. Mehrters /s/ Xxxxxx X. Xxxxxxxx
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Date: February 15, 2001 Date: February 15, 2001
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ALLEGHENY TECHNOLOGIES INCORPORATED
ATTEST:
/s/ X. X. Xxxxxx By: /s/ Xxxxx X. Xxxxx
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Title Executive Vice President
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Date: February 20, 2001
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