SEPARATION AGREEMENT
Exhibit 10.1
EXECUTION COPY
This Separation Agreement (the “Agreement”), dated February 25, 2011, is entered into by and
among Xxxxxxx X. XxXxxxxxx (“Xx. XxXxxxxxx”), Pregis Holding I Corporation, a Delaware corporation
(“Holding I”), and its wholly owned subsidiaries, Pregis Holding II Corporation, a Delaware
corporation (“Holding II”), and Pregis Corporation, a Delaware Corporation (the “Company” and
together with Holding I and Holding II, the “Companies”).
WHEREAS, Xx. XxXxxxxxx is employed by the Companies pursuant to an Employment Agreement among
Xx. XxXxxxxxx and the Companies, dated as of October 2, 2006 (the “Employment Agreement”);
WHEREAS, Xx. XxXxxxxxx and Holding I are parties to a Noncompetition Agreement dated as of
October 2, 2006 (the “Noncompetition Agreement”);
WHEREAS, Holding I granted to Xx. XxXxxxxxx options (the “Options”) to purchase an aggregate
of 382.36 shares of common stock, par value $0.01 per share, of Holding I pursuant to and in
accordance with the terms of the Nonqualified Stock Option Agreement between Xx. XxXxxxxxx and
Holding I dated as of October 2, 2006 (the “Option Agreement”);
WHEREAS, Xx. XxXxxxxxx and the Company’s Board of Directors have mutually agreed that a
separation is in the best interests of Xx. XxXxxxxxx and the Company;
WHEREAS, Xx. XxXxxxxxx’x employment with the Companies shall conclude on the Separation Date
(as defined below); and
WHEREAS, as a condition precedent and a material inducement for the Companies to provide to
Xx. XxXxxxxxx the Separation Benefits (as defined below), Xx. XxXxxxxxx has agreed to execute this
Agreement and the Waiver and Release of Claims attached as Exhibit A hereto and be bound by the
provisions herein and therein.
NOW, THEREFORE, in consideration of the mutual covenants and agreements contained herein, and
for the monetary and other consideration set forth below, the parties agree as follows:
1. Separation of Employment. Xx. XxXxxxxxx’x employment with the Companies ended on
February 22, 2011 (the “Separation Date”). The parties agree that effective upon the
Separation Date, Xx. XxXxxxxxx resigned from any directorship, position or office with or in the
Companies or their affiliates. For the avoidance of doubt, the date of Xx. XxXxxxxxx’x termination
of employment for purposes of application of the Noncompetition Agreement shall be the Separation
Date.
2. Separation Benefits. In consideration for acceptance of the terms contained in
this Agreement and the Waiver and Release of Claims attached as Exhibit A, the Company shall (i)
pay to Xx. XxXxxxxxx an amount equal to 1.5 times his base salary as of the Separation Date
(the
“Termination Payment”); (ii) pay to Xx. XxXxxxxxx a lump sum cash payment in the amount of
$150,000 (the “Lump Sum Bonus”); (iii) pay to Xx. XxXxxxxxx the Target Pro Rata Incentive Payment
(as defined in the Employment Agreement), based on the number of days elapsed from January 1, 2011
through and including the Separation Date; (iv) pay to Xx. XxXxxxxxx all amounts accrued as of the
Separation Date but unpaid and payable to him under any employee benefit plan (the “Accrued
Payment”); and (v) continue to provide Xx. XxXxxxxxx with medical benefits on the same terms that
would have otherwise applied to him had he remained an active employee until the earlier of (a) 18
months following effectiveness of the Waiver and Release of Claims or (b) the date Xx. XxXxxxxxx
becomes eligible for medical benefits from a subsequent employer (the “Continued Medical Benefits”)
(collectively, the “Separation Benefits”). The Waiver and Release is effective on the day after it
becomes irrevocable by Xx. XxXxxxxxx under the terms of the Waiver and Release. The Company’s
obligation to pay Xx. XxXxxxxxx the Termination Payment, the Lump Sum Bonus and the Target Pro Rata
Incentive Payment and to provide him Continued Medical Benefits shall, in each case, be conditioned
upon: (x) Xx. XxXxxxxxx’x continued compliance with his obligations under the Noncompetition
Agreement, (y) Xx. XxXxxxxxx’x execution, delivery and non-revocation of the Waiver and Release of
Claims and (z) Xx. XxXxxxxxx’x continued compliance with his obligations under this Agreement. The
Separation Benefits shall be subject to any and all applicable withholding taxes or other amounts
required by law to be withheld. The Termination Payment and the Target Pro Rata Incentive Payment
shall be paid in equal installments over the 18-month period and the 12-month period, respectively,
commencing on the first payroll period pay date after the Waiver and Release of Claims becomes
effective. The Lump Sum Bonus Payment shall be paid on the first payroll period pay date after the
thirtieth (30th) day following the Separation Date; provided, that the Waiver and
Release of Claims has become effective prior to such thirtieth (30th) day. The Accrued
Payment shall be paid within thirty (30) days following the Separation Date. The Separation
Benefits shall continue to be paid until the dates provided herein if Xx. XxXxxxxxx dies prior
thereto. Xx. XxXxxxxxx acknowledges that the Continued Medical Benefits are in satisfaction of the
Companies’ obligation to provide COBRA continuation coverage during the period the Continued
Medical Benefits are provided.Stock Repurchase. Simultaneously herewith, the Company is
agreeing to repurchase, and Xx. XxXxxxxxx is agreeing to sell, all of Xx. XxXxxxxxx’x stock in
Holding I pursuant to the Stock Repurchase Agreement attached hereto as Exhibit B.
3. Options. Holding I and Xx. XxXxxxxxx agree that all of the Options granted to Xx.
XxXxxxxxx pursuant to the Option Agreement are hereby cancelled in their entirety. In the event of
any conflict between or among the provisions of this Agreement and the Option Agreement, such
conflict shall be resolved in each and every instance in favor of the provisions of this Agreement.
4. Release of Claims. Xx. XxXxxxxxx shall sign the Waiver and Release of Claims
attached hereto as Exhibit A on the Separation Date.
5. Noncompetition Agreement. Xx. XxXxxxxxx acknowledges and hereby reaffirms his
obligations under the Noncompetition Agreement.
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6. Non-Disparagement. Xx. XxXxxxxxx agrees that he shall not, from and after the date
of this Agreement, make or publish any disparaging statements (whether written or oral) regarding
any of the Companies, or their affiliates, stockholders, subsidiaries, directors, officers and
employees, and any affiliates, agents, representatives, successors and assigns of any of the
foregoing; and the Companies shall cause its directors and executive officers not to make or
publish any disparaging statements (whether written or oral) regarding Xx. XxXxxxxxx.
7. Forfeiture of Separation Benefits. Xx. XxXxxxxxx acknowledges and agrees that,
notwithstanding any other provision of this Agreement, in the event Xx. XxXxxxxxx breaches any of
his obligations set forth in the Noncompetition Agreement, Xx. XxXxxxxxx will forfeit his right to
receive all payments provided for under Section 2 of this Agreement that have not been paid to him
as of the date of such breach and will immediately repay to the Company all amounts received prior
to the date of such breach in respect of the Termination Payment and the Target Pro-Rata Incentive
Payment.
8. Tax Matters and Section 409A. It is intended that this Agreement shall be
interpreted, operated and administered in a manner so that any amount or benefit payable hereunder
shall be paid or provided in a manner that is either exempt from or compliant with the requirements
under Section 409A of the Code and any guidance issued thereunder. The parties agree to work
together in good faith to consider amendments to this Agreement and to take such reasonable actions
that are necessary, appropriate or desirable to avoid imposition of any additional tax or income
recognition prior to actual payment to Xx. XxXxxxxxx under Section 409A. Notwithstanding the
foregoing, the Companies do not guarantee the tax treatment of any compensation or benefits
hereunder, whether pursuant to the Code, state or local tax laws and regulations.
9. Severability. Each provision hereof and portion thereof is severable, and if one
or more provisions hereof or portions thereof are declared invalid, the remaining provisions and
portions thereof shall nevertheless remain in full force and effect. If any provision of this
Agreement or portion thereof is so broad, in scope or duration or otherwise, as to be
unenforceable, such provision shall be interpreted to be only so broad as is enforceable.
10. Enforceability. The failure to enforce at any time any of the provisions of this
Agreement or to require at any time performance by the other party of any of the provisions hereof
shall in no way be construed to be a waiver of such provisions or to affect the validity of this
Agreement, or any part hereof, or the right of either party thereafter to enforce each and every
such provision in accordance with the terms of this Agreement.
11. Binding Effect; Assignment. This Agreement shall be binding upon any and all
successors and assigns of Xx. XxXxxxxxx and the Companies. Xx. XxXxxxxxx may not assign this
Agreement. The Companies may assign this Agreement but no assignment shall expand the scope of the
non-competition provisions set forth in the Non-Competition Agreement, and the Companies shall
remain responsible to make payments required under this Agreement if the assignee(s) fail to do so.
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12. Governing Law. Except for issues or matters as to which federal law is
applicable, this Agreement shall be governed by and construed and enforced in accordance with the
laws of the State of New York without giving effect to the conflicts of law principles thereof.
13. Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original, but all of which taken together shall constitute one and the same
document. A facsimile copy or an e-mail of a PDF file containing a copy of the signature page of
the person executing this Agreement shall be effective as an original signature and effective as an
execution counterpart thereof.
14. Entire Agreement. This Agreement, Exhibit A and Exhibit B to this Agreement, the
Employment Agreement, the Option Agreement and the Noncompetition Agreement constitute the entire
agreement between the parties hereto, and supersede all prior agreements, understandings and
arrangements, oral or written, if any, between the parties hereto, with respect to the subject
matter hereof.
[signature page follows]
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IN WITNESS WHEREOF, the parties have executed this Agreement as of the date and year first
above written.
| /s/ Xxxxxxx X. XxXxxxxxx | ||||
| Xxxxxxx X. XxXxxxxxx | ||||
| The Companies: | |||||||||
| PREGIS HOLDING I CORPORATION | PREGIS HOLDING II CORPORATION | ||||||||
By:
|
/s/ Xxxxxx X. Xxxxx | By: | /s/ Xxxxxx X. Xxxxx | ||||||
| Name: Xxxxxx X. Xxxxx | Name: Xxxxxx X. Xxxxx | ||||||||
| Title: Director | Title: Director | ||||||||
| PREGIS CORPORATION | |||||||||
By:
|
/s/ Xxxxxx X. Xxxxx | ||||||||
| Name: Xxxxxx X. Xxxxx | |||||||||
| Title: Director | |||||||||
[Signature Page to Xxxxxxx X. XxXxxxxxx Separation Agreement]
EXHIBIT A
WAIVER AND RELEASE OF CLAIMS
In consideration of the payments and benefits to be made under the Separation Agreement, dated as
of February 25, 2011 to which Xxxxxxx X. XxXxxxxxx (“Xx. XxXxxxxxx”), Pregis Holding I Corporation,
a Delaware corporation (“Holding I”), and its wholly owned subsidiaries, Pregis Holding II
Corporation, a Delaware corporation (“Holding II”), and Pregis Corporation, a Delaware Corporation
(the “Company” and together with Holding I and Holding II, the “Companies”) are parties (the
“Separation Agreement”), Xx. XxXxxxxxx, with the intention of binding himself, his heirs,
executors, administrators and assigns, does hereby release and forever discharge the Companies,
their affiliates, stockholders, subsidiaries, directors, officers and employees, and any
affiliates, agents, representatives, successors and assigns of any of the foregoing, and directors
and officers of the foregoing (collectively referred to as the “Releasees”), from any and all
obligations, liabilities, damages, costs, claims, complaints, charges, or causes of action in law
or equity that Xx. XxXxxxxxx or his heirs, administrators, successors, or assigns may now have or
may ever have against any Releasee, whether accrued, absolute, contingent, unliquidated or
otherwise, and whether known or unknown on the date hereof, which have or may have arisen out of
any act or omission occurring, or state of facts existing, on or prior to the date of execution of
this Agreement (collectively “Claims”), including but not limited to (i) Claims in any way related
to Xx. XxXxxxxxx’x employment with the Companies or the termination of that employment and (ii)
Claims based on federal, state or local law or regulation or the common law, including but not
limited to Claims in any way related to Title VII of the Civil Rights Act of 1964, the Illinois
Human Rights Act, the Equal Pay Act, the Fair Labor Standards Act, the Americans with Disabilities
Act, the Employee Retirement Income Security Act of 1974, as amended, the Age Discrimination in
Employment Act, all applicable state and local labor and employment laws (including all laws
concerning discrimination, unlawful and unfair labor and employment practices), breach of contract,
wrongful discharge, defamation or intentional infliction of emotional distress, excepting only:
(i) rights of Xx. XxXxxxxxx under the Separation Agreement;
(ii) the right of Xx. XxXxxxxxx to receive COBRA continuation coverage in accordance with
applicable law; and
(iii) rights to indemnification Xx. XxXxxxxxx has under the by-laws or certificate of
incorporation of any member of the Company Affiliated Group or otherwise through or from the
Companies, including under any policy of insurance providing indemnification or coverage.
1. Xx. XxXxxxxxx specifically acknowledges that his acceptance of the terms of this Waiver and
Release is, among other things, a specific waiver of his rights, claims and causes of action under
Title VII, the ADEA, the ADA and any state or local law or regulation in respect of discrimination
of any kind; provided, however, that nothing herein shall be deemed, nor does
anything contained herein purport, to be a waiver of any right or claim or cause of action
which by law Xx. XxXxxxxxx is not permitted to waive.
2. The Waiver and Release is for any relief, no matter how denominated, including, but not
limited to, injunctive relief, wages, back pay, front pay, compensatory damages, or punitive
damages. Xx. XxXxxxxxx further agrees that he will not file or permit to be filed on his behalf
any Claims. The Release shall not apply to the obligations set forth in this Waiver and Release,
pursuant to qualified plans maintained by or contributed to by the Companies, or pursuant to the
continuation coverage provisions of the Consolidated Omnibus Reconciliation Act of 1985, as
amended. If and to the extent a court of competent jurisdiction shall determine any part or
portion of the Waiver and Release to be invalid or unenforceable, the same shall not affect the
remainder of the Waiver and Release which shall be given full effect without regard to the invalid
part or portion of the Waiver and Release. Xx. XxXxxxxxx acknowledges that he has been given a
period of twenty-one (21) days to consider whether to execute this Waiver and Release. Xx.
XxXxxxxxx may, for a period of seven (7) days following (and not including) the date of execution
of this Waiver and Release, revoke this Waiver and Release by a signed writing delivered to the
General Counsel of the Company at the Company’s headquarters. If no such revocation occurs, this
Waiver and Release shall become irrevocable in its entirety, and binding and enforceable against
Xx. XxXxxxxxx, on the next day following the day on which the foregoing seven (7) day period has
elapsed. If Xx. XxXxxxxxx revokes this Waiver and Release, this Waiver and Release shall be null
and void. Xx. XxXxxxxxx acknowledges that the Waiver and Release relates only to Claims which
exist as of the date hereof.
3. Xx. XxXxxxxxx represents that with respect to any act or omission occurring, or state of
facts existing, on or prior to the date of execution of this Waiver and Release, he has not filed
any complaints, charges or lawsuits against any Releasee with any government agency or any court.
Mr. McDonnnell acknowledges that the payments and benefits he is receiving in connection with the
Separation Agreement and his obligations under this Waiver and Release are in addition to anything
of value to which Xx. XxXxxxxxx is entitled from the Companies.
4. Nothing in this Waiver and Release shall be construed as an admission by any Releasee of
any liability on its part under any federal, state, or local law or regulation or the common law.
Xx. XxXxxxxxx acknowledges that no representation or fact or opinion has been made by any Releasee,
or anyone acting on any Releasee’s behalf, to induce him to execute this Waiver and Release. Xx.
XxXxxxxxx also acknowledges that he has been advised to seek, and has had the opportunity to
consult with, an attorney prior to signing this Waiver and Release, and that he has read and
understood all of the provisions of this Waiver and Release.
5. The Companies acknowledge that on the date of the Separation Agreement they are not aware
of any actual or threatened claim or course of action from or in any respect relating to Xx.
XxXxxxxxx’x actions prior to the Separation Date. Nothing contained in this Section 5 shall be
deemed to constitute a waiver of any legal rights of the Releasees.
[signature page follows]
IN WITNESS WHEREOF, the parties have executed this Waiver and Release of Claims as of the date
and year indicated under the signature line below.
| By: | /s/ Xxxxxxx X. XxXxxxxxx | ||||||||
| Xxxxxxx X. XxXxxxxxx |
|||||||||
| The Companies: | |||||||||
| PREGIS HOLDING I CORPORATION | PREGIS HOLDING II CORPORATION | ||||||||
By:
|
/s/ Xxxxxx X. Xxxxx | By: | /s/ Xxxxxx X. Xxxxx | ||||||
| Name: Xxxxxx X. Xxxxx | Name: Xxxxxx X. Xxxxx | ||||||||
| Title: Director | Title: Director | ||||||||
| PREGIS CORPORATION | |||||||||
By: |
/s/ Xxxxxx X. Xxxxx | ||||||||
| Name: Xxxxxx X. Xxxxx | |||||||||
| Title: Director | |||||||||
[Signature Page to Xxxxxxx X. XxXxxxxxx Waiver and Release of Claims]
EXHIBIT B
STOCK REPURCHASE AGREEMENT
STOCK REPURCHASE AGREEMENT (this “Agreement”), dated as of February 25, 2011, by and between
Pregis Holding I Corporation, a Delaware corporation (the “Company”) and Xxxxxxx X. XxXxxxxxx, an
individual (“Seller”).
WHEREAS, Seller was employed by the Company as its President and Chief Executive Officer
pursuant to an Employment Agreement among the Seller, the Company and the other parties thereto,
dated as of October 2, 2006; and
WHEREAS, Seller holds 30 shares of common stock, par value $0.01 per share, of the Company
(the “Shares”), which he acquired at a purchase price of $10,000.00 per Share pursuant to an
Executive Subscription Agreement, dated as of October 2, 2006; and
WHEREAS, on February 22, 2011, the Seller’s employment with the Company and all of its
subsidiaries and affiliates was terminated; and
WHEREAS, simultaneously with the execution and delivery of this Agreement, Seller is entering
into a Separation Agreement and Release (the “Separation Agreement”) with the Company, which
provides that the Seller will sell, and the Company will repurchase, the Shares on the terms and
conditions set forth in this Agreement; and
WHEREAS, Seller desires to sell to the Company, and the Company desires to repurchase from
Seller, the Shares on the terms and conditions set forth in this Agreement.
NOW, THEREFORE, in consideration of the premises, covenants, representations, warranties and
mutual agreements herein set forth, and for good and valuable consideration, receipt of which is
hereby acknowledged, the parties hereto agree as follows:
I. Purchase and Sale of the Shares
(a) Purchase and Sale. The Company hereby agrees to purchase from Seller, and Seller
hereby agrees to sell to the Company, all of the Shares, at a purchase price of $10,000.00 per
share, for an aggregate purchase price of $300,000.00 (the “Purchase Price”).
(b) Closing. At a closing (the “Closing”) to take place within thirty (30) days after
the date hereof, the Company shall pay the Purchase Price to Seller by either a wire transfer to an
account designated by Seller or a cashier’s, certified or official bank check payable to the order
of Seller (the method of payment to be at the option of the Company). At the Closing, if he has
not previously done so, Seller shall deliver to the Company the stock certificate(s) representing
the Shares, duly endorsed in blank or accompanied by a stock power duly executed in blank, in
proper form for transfer, and with all appropriate stock transfer stamps affixed.
The Company shall be deemed the owner of the Shares from and after the Closing and shall be
entitled to all rights in respect thereof.
II. Representations and Warranties of Seller
Seller represents and warrants to the Company as of the date hereof as follows:
(a) Enforceability. This Agreement constitutes a legal, valid and binding obligation
of Seller, enforceable against Seller in accordance with its terms except to the extent that
enforceability may be limited by bankruptcy, insolvency or other similar laws affecting creditors’
rights generally.
(b) No Conflict. The execution and delivery by Seller of this Agreement and the
consummation by Seller of the transactions contemplated hereby and the compliance by Seller with
the provisions hereof will not (i) violate any provision of law, statute, rule or regulation, or
any ruling, writ, injunction, order, judgment or decree of any court, administrative agency or
other governmental body applicable to Seller, or (ii) conflict with or result in any breach of any
of the terms, conditions or provisions of, or constitute (with due notice or lapse of time, or
both) a default (or give rise to any right of termination, cancellation or acceleration) under, or
result in the creation of any encumbrance upon any of Seller’s properties or assets under, any
contract, agreement, indenture, mortgage, guaranty, lease, license or understanding, written or
oral to which Seller is a party.
(c) Ownership of the Shares. Seller has full title to the Shares to be sold by him
pursuant to this Agreement, and the Shares are free and clear of any lien, pledge, security or
other encumbrance. Upon consummation of the transactions contemplated by this Agreement, Seller
will convey to the Company good and valid title to the Shares, free and clear of any lien, pledge,
security or other encumbrance
(d) Entire Ownership. The Shares constitute the only equity securities of the Company
held by Seller.
III. Miscellaneous
(a) Entire Agreement. This Agreement and the Separation Agreement represent the
entire agreement of the parties hereto, and supersede all prior agreements and understandings,
relating to the subject matter hereof, and the terms of this Agreement may not be modified,
amended, altered or supplemented except by an agreement in writing signed by the parties hereto.
(b) Binding Effect; Assignment. This Agreement shall inure to the benefit of, and be
binding upon, the parties hereto and their successors and assigns. Seller may not assign his
rights, duties or obligations hereunder in whole or in part and the Company may assign its rights
and duties hereunder in whole or in part to one or more entities or businesses affiliated with the
Company.
(c) Counterparts. This Agreement may be executed in counterparts, each of which shall
be deemed to be an original, but all of which taken together shall constitute one and the same
document. A facsimile copy or an e-mail of a PDF file containing a copy of the signature page of
the person executing this Agreement shall be effective as an original signature and effective as an
execution counterpart thereof.
(d) Amendment and Waiver. No amendment of this Agreement shall be binding unless the
same shall be in writing and duly executed by the parties hereto. No waiver of any of the
provisions of this Agreement shall be deemed to or shall constitute a waiver of any other provision
hereof (whether or not similar).
(e) Governing Law; Construction. This Agreement shall be governed by, and construed
in accordance with, the laws of the State of New York regardless of the laws that might otherwise
govern under principles of conflict of laws applicable thereto.
[signature page follows]
IN WITNESS WHEREOF, the parties have duly executed this Agreement as of the date first written
above.
| PREGIS HOLDING I CORPORATION |
||||
| By: | /s/ Xxxxxx X. Xxxxx | |||
| Name: Xxxxxx X. Xxxxx | ||||
| Title: Director | ||||
| XXXXXXX X. XXXXXXXXX |
||||
| /s/ Xxxxxxx X. XxXxxxxxx | ||||
[Signature Page to Xxxxxxx X. XxXxxxxxx Stock Repurchase Agreement]
