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Exhibit 10.22
TERMINATION BENEFITS AGREEMENT
This Termination Benefits Agreement ("Agreement") is entered into as of
the 19th day of December, 1996, by and between Falcon Building Products, Inc.,
a Delaware corporation ("Company") and Xxxxxx X. Xxxxx ("Xxxxx").
WITNESSETH:
WHEREAS, Xxxxx is a key member of the Company's management team;
WHEREAS, the Company considers that providing Xxxxx with certain
termination benefits will operate as an incentive for Xxxxx to continue
furnishing services to the Company during the period that the Company is
negotiating a change in control or ownership of the Company or any of its
subsidiaries;
WHEREAS, this Agreement is intended to provide benefits only in the event
of a change in control or ownership of the Company or any of its subsidiaries
prior to September 30, 1997 (the "Expiration Date");
NOW THEREFORE, to induce Xxxxx to continue furnishing services to the
Company through the Expiration Date, and for other good and valuable
consideration, the receipt and sufficiency of which is hereby acknowledged, the
Company and Xxxxx agree as follows:
1. Definitions.
(a) "Change in Control" shall mean the sale by the Company of all
or substantially all of its, or any of its subsidiaries,
assets and business to a person or entity other than a Related
Person or the sale of fifty-one percent (51%) or more of the
voting securities and capital stock of the Company or any of
its subsidiaries to a person or entity other than a Related
Person. "Related Person" shall mean any person or entity
directly or indirectly owned and controlled by Xxxxxx Xxxx or
Equity Holdings Limited ("EHL").
(b) "Termination Date" shall mean the date of termination of
Xxxxx' relationship with the Company.
(c) "Termination Payments" shall mean any payment or distribution
of compensation or benefits made pursuant to Section 3 of this
Agreement.
(d) "Termination With Cause" shall mean termination of Xxxxx by
the Company for any of the following reasons:
(i) the failure of Xxxxx to render services to the Company
in substantial accordance with the terms under which he
was retained, which failure amounts to gross neglect of
his duties to the Company;
(ii) any violation of Section 6 of this Agreement or any
other agreement which Xxxxx may have with the Company;
(iii) taking any role in any buy-out of the Company or any of
its subsidiaries without the approval of the Company's
majority shareholder; or
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(iv) Xxxxx' commission of any act of fraud, theft or
embezzlement against the Company.
(e) "Voluntary Termination" shall mean the voluntary
termination by Xxxxx of his relationship with the Company
other than a voluntary termination following either:
(i) any reduction in compensation consisting of base salary
and incentive bonus;
(ii) a substantial diminution of his responsibilities; or
(iii) a relocation by the Company of Xxxxx outside a twenty
(20) mile radius of the place where Xxxxx currently
perform his services for the Company.
2. Termination of Xxxxx. In the event of the termination of
Xxxxx' services arrangement with the Company within two (2) years
immediately following the date on which there was a Change in
Control or ownership of the Company or any of its subsidiaries, the
Company shall provide Xxxxx with the Termination Payments outlined
in Section 3, unless the termination is for any of the following
reasons:
(a) Termination With Cause;
(b) Voluntary Termination;
(c) The death of Xxxxx. Nothing in this section shall affect any
entitlement of Xxxxx' heirs to the benefits of any life
insurance plan; or
(d) Termination as a result of Xxxxx' incapacity (i.e., if in the
reasonable opinion of the Company, Xxxxx is prevented from
properly performing his duties by reason of any physical or
mental incapacity for a period of more than one hundred twenty
(120) days, in the aggregate, in any twelve (12) month
period). Nothing in this section shall affect Xxxxx' rights
under any disability plan in which he is a participant.
3. Termination Payments. In the event that Xxxxx is entitled to
Termination Payments pursuant to the terms of Section 2:
(a) Compensation. The Company shall pay Xxxxx an
amount equal to two (2) years base salary plus par bonus as of
the Termination Date, without giving effect to any reduction
in base salary or incentive bonus prior to the Termination
Date; payable within thirty (30) days of the Termination Date
following the Change in Control.
(b) Xxxxx Benefits:
(i) Vacation. Any accrued vacation pay due but not yet
taken at the Termination Date shall be paid to Xxxxx
within thirty (30) days following the Termination Date.
(ii) Health Benefits. If Xxxxx participated in any health
benefit Plan in effect immediately prior to the
Termination Date, and if Xxxxx elects to continue
participating in such plan pursuant to the terms of
said plan and the Comprehensive Omnibus Budget
Reconciliation Act ("COBRA"), the Company shall pay for
the costs of Xxxxx' participation in such plan from the
Termination Date until the earlier of: (a) the date
which is twenty-four (24) months following the
Termination Date; or (b) the date of Xxxxx'
eligibility in any health benefit plan offered by
Xxxxx' new employer, if any.
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Xxxxx shall notify the Company in writing within thirty
(30) days of any new employment.
(iii) Retirement And Profit-Sharing Plans. Notwithstanding
anything in this Agreement to the contrary, Xxxxx'
rights in any retirement, pension or profit-sharing
plans offered by the Company shall be governed by the
rules of such plans as well as by applicable law;
provided, however, that on the Termination Date, Xxxxx
shall become fully vested in all pension and 401(k)
account balances.
(iv) Outplacement Assistance. The Company will provide
Xxxxx up to one year of outplacement services with a
nationally recognized executive placement company.
4. Limitation of Payment. Notwithstanding anything in this
Agreement to the contrary, if receipt of the Termination Payments
would subject Xxxxx to tax under Section 4999 of the Internal
Revenue Code of 1986, as amended, the Termination Payments shall be
"grossed up" to an amount that would allow the Xxxxx to receive the
net after-tax amount he would have received but for the application
of said Section 4999.
5. Continuing Obligations. In order to induce the Company to
enter into this Agreement, Xxxxx hereby agrees that all documents,
records, techniques, business secrets and other information which
have come into his possession from time to time during his
performance of services for the Company or which may come into his
possession during his performance hereunder, shall be deemed to be
confidential and proprietary to the Company, and Xxxxx further
agrees to retain in confidence any confidential information known to
him concerning the Company and its subsidiaries and their respective
businesses so long as such information is not publicly disclosed.
Xxxxx further agrees to cooperate fully as requested from time to
time by the controlling shareholder of the Company, the Company's
Board of Directors, or Company Management in connection with any
transaction involving the possible sale of the Company or any of its
subsidiaries. Xxxxx further agrees not to speak about a possible
sale of the Company or any of its subsidiaries with or otherwise
respond to requests to or from any third parties involving the
possible sale of the Company or any of its subsidiaries, unless
specifically authorized to do so by the Company or the controlling
shareholder of the Company. The obligations of Xxxxx under this
Section 5 shall be in addition to, and shall not limit, any other
obligation of Xxxxx to the Company with respect to the matters set
forth herein or otherwise.
6. Assignments and Transfers. Xxxxx agrees that he will not
assign, sell, transfer, delegate or otherwise dispose of, whether
voluntarily or involuntarily, or by operation of law, any rights or
obligations under this Agreement, nor shall Xxxxx' rights be subject
to encumbrance or the claims of creditors. Any purported assignment
shall be null and void. This Agreement shall inure to the benefit
of and be enforceable by Xxxxx' personal or legal representatives,
executors, administrators, successors, heirs, distributees, devisees
and legatees. This Agreement shall be binding upon and shall inure
to the benefit of the Company and its successors and assigns, and
the Company shall require any successor or assign to expressly
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
no such succession or assignment had taken place, except no
assumption shall be required if this Agreement is automatically
assumed by operation of law. The term "the Company" as used herein
shall include such successors and assigns. The term "successors and
assigns" as used herein shall include a corporation or other entity
acquiring at least 51% of the outstanding shares of the Company or
any of its subsidiaries or all or substantially all of the assets
and business of the Company or any of its subsidiaries.
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7. Notices. For purposes of this Agreement, notices and all
other communications provided for herein shall be in writing and
shall be deemed to have been duly given and received when delivered
or mailed by United States registered or certified mail, return
receipt requested, postage prepaid, addressed to the Company at:
Falcon Building Products, Inc.
0 Xxxxx Xxxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attn: President
and to:
Xxxxxx X. Xxxxx
00000 Xxxxxxxxx Xx.
Xxxxxxx, XX 00000
or such address as either party may have furnished to the other in
writing in accordance herewith, except that notices of change of
address shall be effective only upon receipt.
8. Governing Law. The validity, interpretation, construction
and performance of this Agreement shall be governed by the laws of
the State of Illinois.
9. Entire Agreement. The terms of this Agreement are intended
by the parties to be the final expression of their agreement with
respect to Xxxxx' termination benefits and may not be contradicted
by evidence of any prior or contemporaneous Agreement.
10. Amendments; Waivers. This Agreement may not be modified,
amended, or terminated except by an instrument in writing, signed by
Xxxxx and by a duly authorized representative of the Company other
than Xxxxx. No failure to exercise and no delay in exercising any
right, remedy, or power hereunder shall operate as a waiver thereof,
nor shall any single or partial exercise of any right, remedy, or
power hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, or power provided herein or
by law or in equity.
11. Severability; Enforcement. If any provision of this
Agreement, or the application thereof to any person, place or
circumstance, shall be held by a court of competent jurisdiction to
be invalid, unenforceable, or void, the remainder of this Agreement
and such provisions as applied to other persons, places, and
circumstances shall remain in full force and effect.
12. Arbitration. The parties agree to submit any dispute arising
under this Agreement to arbitration. Arbitration shall be by a
single arbitrator in the Chicago, Illinois area experienced in the
matters at issue selected by the Company and Xxxxx in accordance
with the commercial arbitration rules of the American Arbitration
Association. The decision of the arbitrator shall be final and
binding as to any manner submitted to him under this Agreement. All
costs and expenses incurred in connection with any such arbitration
proceeding shall be borne by the party against whom the decision is
rendered as provided by the arbitrator.
13. Release.
(a) Xxxxx, on behalf of himself, his heirs, executors, legal
representative, successors and assigns, hereby fully and
forever releases and discharges EHL, Company, and their
respective affiliates, subsidiaries, parents, predecessors
and successors, and each of their officers, directors,
trustees, employees, agents and attorneys, past and present
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(the "Releasees"), from any and all claims, demands or causes
of action, whether now known or unknown, which have existed,
which do exist, or which may exist in the future, arising out
of or relating in any way to Xxxxx' furnishing of services to
the Company, his compensation, the termination of his
relationship with the Company, the sale of the stock or
assets of the Company or any of its subsidiaries and/or any
other occurrence up to and including the effective date of
this Agreement, except those claims statutorily precluded
from waiver or release by private parties and except those
alleging breach of this Agreement. Without in any way
limiting the generality of the foregoing language, this
release includes any claims for relief or causes of action
under the Age Discrimination in Employment Act, as amended,
29 U.S.C. Section 621, et seq., and any other federal, state
or local statute, ordinance or regulation dealing in any
respect with discrimination in employment, and in addition
thereto, any claims under any Company severance policy,
practice or procedure, and any claims, demands or actions
brought on the basis of alleged wrongful or retaliatory
discharge and/or alleged breach of an implied or explicit,
written or oral employment or other contract or covenant
under the common law of any state, including, but not limited
to, Illinois.
(b) Xxxxx further agrees not to directly or indirectly pursue or
initiate any action or legal proceeding of any kind against
the Releasees arising out of or related to the claims
released in Section 13(a) above, or the sale of the stock or
assets of the Company or any of its subsidiaries and also
waives any right to recover any relief as a result of any
such proceedings initiated on his behalf.
14. Termination Date. This Agreement shall be null and void in the
event that a Change in Control does not occur on or before the Expiration Date.
IN WITNESS WHEREOF, the parties have caused this Agreement to be executed
and delivered as of the day and year set forth above.
FALCON BUILDING PRODUCTS, INC. Xxxxxx X. Xxxxx
a Delaware corporation
/s/ Xxxxxx X. Xxxxx
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By: /s/ Xxx X. Xxxxx signature
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Xxx X. Xxxxx
Its: Vice-President
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