EXHIBIT 10.11.6
SEPARATION AGREEMENT AND GENERAL RELEASE
This Separation Agreement and General Release (this "Agreement"), dated as
of February 22, 2004, is entered into by and between Xxxxxxxx X. Xxxxx
("Xxxxx"), an individual presently residing at the address set forth on Schedule
B, and Foamex International Inc., a Delaware corporation headquartered in
Xxxxxxx, PA ("Foamex"). In consideration of the covenants and agreements
contained in this Agreement, and for other good and valuable consideration, the
receipt and sufficiency of which are hereby acknowledged, Xxxxx and Foamex
(sometimes collectively hereinafter referred to as the "parties"), intending to
be legally bound hereby, agree as follows:
1. Resignation.
(a) Effective February 10, 2004 (the "Effective Date"), Xxxxx resigns
from (i) employment with Foamex, any of the entities listed on the attached
Schedule A and any other subsidiaries, joint ventures, affiliates, partnerships
or any other business ventures of Foamex (Foamex, the entities listed on
Schedule A and any subsidiaries, joint ventures, affiliates, partnerships or
other business ventures of Foamex are hereinafter collectively referred to as
the "Foamex Affiliates"), (ii) any Foamex Affiliate Board of Directors and any
Foamex Affiliate Board of Directors' positions, and (iii) any other position,
office, membership or partnership of any Foamex Affiliate. For purposes of this
Agreement the lower-case term "affiliates" shall be as defined in Section 12b-2
of the Securities Exchange Act of 1934 (the "1934 Act"), as amended. In
addition, Xxxxx agrees that he will have no right to further employment,
membership, partnership, or any other position or office with any Foamex
Affiliate after the Effective Date.
(b) Xxxxx further agrees that other than the payments referred to in
paragraph 2 of this Agreement, he shall not be entitled to any other
compensation or payments of any kind (whether in the form of wages, salary,
commissions, bonuses, incentive payments, consulting fees, profit-sharing
payments, expense reimbursements, leave, severance pay or other benefits)
arising under the employment agreement between Foamex and Xxxxx, dated January
1, 1999 (the "Employment Agreement"), the First Amendment to the Employment
Agreement between Foamex and Xxxxx, dated as of January 1, 1999 (the "First
Amendment"), the change in control protection agreement between Foamex and
Xxxxx, effective December 20, 2002 (the "Change in Control Protection
Agreement"), or any other employment contract, amendment, change in control
protection agreement or other agreement or understanding Xxxxx has or may have
with any of the Foamex Affiliates), or the Split Dollar Life Insurance Agreement
between Foamex and Xxxxx (the "Split Dollar Life Insurance Agreement").
Notwithstanding the foregoing, nothing in this Agreement shall affect Xxxxx'x
vested benefits as of the Effective Date under the Foamex Supplemental Executive
Retirement Plan, dated May 15, 2001 (the "Supplemental Executive Retirement
Plan"), the Foamex International Inc. 1993 Stock Option Plan (the "1993 Stock
Option Plan"), the Foamex International Inc. 2002 Stock Award Plan (the "2002
Stock Award Plan"), the Foamex 401(k) defined contribution plan, or any rights
under COBRA or Foamex's expense reimbursement policies. Pursuant to Section 3.5
of the Split Dollar Life Insurance Agreement, Foamex shall withdraw from the
Policy (as such term is defined under the Split Dollar Life Insurance Agreement)
an amount equal to the cash surrender value of the Policy (as such term is
defined under the Split Dollar Life Insurance Agreement), and effective upon the
Effective Date, the Split Dollar Life Insurance Agreement shall terminate, Xxxxx
shall surrender all rights and benefits thereunder, Xxxxx shall not be entitled
to any Cumulative Company Contributions (as such term is defined under the Split
Dollar Life Insurance Agreement) and Xxxxx shall not have any further rights or
obligations thereunder, and Xxxxx agrees to execute any documents necessary and
otherwise reasonably cooperate with Foamex to effectuate the foregoing regarding
the Split Dollar Agreement. Xxxxx further agrees that the payments referred to
in paragraph 2 of this Agreement, in addition to compensating him fully for his
time worked and services rendered, include consideration for his promises
contained in this Agreement, and that such consideration is above and beyond any
wages or salary or other sums to which he is entitled from any of the Foamex
Affiliates under the terms of his employment with any of the Foamex Affiliates
or under any other contract or law.
(c) Xxxxx hereby warrants and represents that attached hereto as
Schedule B is a list as of the date of the execution of this Agreement of all
his financial and business interests of any kind whatsoever with any of the
Foamex Affiliates, and with any person serving as a member of any Foamex
Affiliate Board of Directors, with any person or entity that, to Xxxxx'x
knowledge, engages in any business or has any financial interest with or in any
Foamex Affiliate; provided, however, Xxxxx is not required to list any
investment that has a market valuation of less than U.S. $150,000 as of the
Effective Date in any equity or debt security which, as of the Effective Date,
is registered under Section 12 of the "1934 Act", and, with respect to equity
securities, listed on any national securities exchange (as contemplated by such
Act) or quoted on the Nasdaq Stock Market (collectively, a "Public Company").
2. Payment. Foamex agrees that it will pay Xxxxx (i) a lump sum payment of
U.S. $405,000 (less appropriate tax withholdings as determined by Foamex in good
faith) by wire transfer or check on the next business day after the seven-day
waiting period set forth in paragraph 26 of this Agreement has expired, and (ii)
52 bi-weekly payments of U.S. $19,230.77 each (less appropriate tax withholdings
as determined by Foamex in good faith) for a twenty-four (24) month period
commencing in March 2004. Such bi-weekly payments shall be made by wire transfer
or check in accordance with the regular Foamex payroll calendar beginning on the
next pay day in March 2004 after the seven-day waiting period set forth in
paragraph 26 of this Agreement has expired. Xxxxx also will be offered the
opportunity to elect continued group insurance coverage in accordance with the
terms of COBRA and if he elects COBRA, he will be solely liable and responsible
for any premiums for such coverage. In addition, Xxxxx will be eligible to be
reimbursed for any reasonable expenses incurred by him in connection with his
employment with Foamex prior to the Effective Date, in accordance with
applicable Foamex expense reimbursement policies. Subject to any defenses
otherwise available to Foamex, if Foamex fails to make any of the monthly
payments contemplated in this Section at the time such payments are otherwise
due and does not correct such failure within ten (10) business days following
the date Xxxxx provides Foamex with written notice of such failure in accordance
with the notice provisions of this Agreement, then such missed payment and all
other remaining payments to be under this Section shall become immediately due
and payable.
3. Release of Claims. Xxxxx, on behalf of himself and his heirs, executors,
administrators, successors, attorneys and assigns, hereby releases and
discharges each of the Foamex Affiliates, and any and all of their current or
former members, stockholders, officers, directors, employees, agents, attorneys,
legal representatives, subsidiaries, affiliated entities, successors and
assigns, from any and all claims, demands, rights, actions or causes of action,
liabilities, damages, losses, obligations, judgments, suits, matters and issues
of any kind or nature whatsoever, whether known or unknown, contingent or
absolute, suspected or unsuspected, disclosed or undisclosed, hidden or
concealed, matured or unmatured, including, without limiting the generality of
the release, any claims arising under the Employment Agreement; the First
Amendment; Change in Control Protection Agreement; the Split Dollar Life
Insurance Agreement; any federal, state, or local law relating to discrimination
or harassment on account of race, color, religion, sex, national origin, age,
disability, marital status, or any other illegal basis (including, but not
limited to, Title VII of the Civil Rights Act of 1964; the Civil Rights Act of
1991; 42 U.S.C. Section 1981; the Age Discrimination in Employment Act; the
Older Workers' Benefit Protection Act; the Americans with Disabilities Act; the
Family and Medical Leave Act; and the Employee Retirement Income Security Act of
1974, all as amended); any other federal, state, or local statutory or
administrative law; any other laws and regulations relating to employment; or
based upon any contract, tort, or any other common law doctrine. Notwithstanding
the foregoing, nothing in this Agreement shall affect Xxxxx'x vested benefits as
of the Effective Date under the Foamex defined benefit pension plan, the
Supplemental Executive Retirement Plan, the 1993 Stock Option Plan, the 2002
Stock Award Plan, the Foamex 401(k) defined contribution plan, or any rights
under COBRA or Foamex's expense reimbursement policies. This release covers any
and all claims for attorneys' fees or costs. Xxxxx agrees not to file any
charge, claim or lawsuit seeking monetary recovery and asserting any claims that
are released in this paragraph. Xxxxx agrees to withdraw with prejudice any
charges, complaints and lawsuits that he began before signing this Agreement.
Xxxxx irrevocably and unconditionally waives any and all rights to recover any
relief and damages concerning any claims that are released in this paragraph.
Notwithstanding the provisions of this paragraph, nothing in this waiver or
release shall be construed to constitute any release or waiver by Xxxxx of his
rights or claims against Foamex arising out of this Agreement.
4. Non-Disclosure of This Agreement. Xxxxx represents and warrants that
prior to executing this Agreement he did not disclose the terms of this
Agreement to anyone other than his legal counsel, accountants, financial and tax
advisors, his immediate family members and not more than three close personal
confidants. Xxxxx agrees that from and after the date of his execution of this
Agreement, he will not, directly or indirectly, provide to any person or entity
any information that concerns or relates to the negotiation of or circumstances
leading to the execution of this Agreement or to the terms and conditions hereof
except (i) to the extent that such disclosure is specifically required by law or
legal process or as authorized in writing by Foamex; (ii) to his tax advisors as
may be necessary for the preparation of tax returns or other reports required by
law; (iii) to his attorneys and accountants as may be necessary to secure advice
concerning this Agreement; or (iv) to members of his immediate family. Xxxxx
agrees that prior to disclosing such information under parts (ii), (iii) or (iv)
of this paragraph, he will inform the recipients that they are bound by the
limitations of this paragraph. Xxxxx further represents that he has advised the
persons referenced in the first sentence of this paragraph that they are bound
by the limitations of this paragraph. Xxxxx further agrees that subsequent
disclosure of such information by any such recipients shall be deemed to be a
disclosure by him in breach of this Agreement. Notwithstanding anything in this
Agreement to the contrary, Xxxxx may disclose to any and all persons, without
limitation of any kind, the tax treatment and tax structure of the transaction
and all materials of any kind (including opinions and other tax analyses) that
are provided to either him or Foamex relating to such tax treatment and tax
structure.
5. Confidential Information. Xxxxx agrees that any sensitive, proprietary
or confidential information or data relating to Foamex Affiliates, including,
without limitation, trade secrets, customer lists, customer contacts, customer
relationships, financial data, long range or short range plans, and other data
and information of a competition-sensitive nature, or any confidential or
proprietary information of others, that he acquired while an employee of Foamex
shall not be disclosed or used for any purpose whatsoever. Xxxxx agrees and
hereby reaffirms his existing obligations under any and all confidentiality
agreements that he may have signed with Foamex.
6. Return of Information and Assets. In addition, Xxxxx warrants and
represents that he returned all Foamex Affiliates corporate assets in his
possession or under his direction or control to Foamex and the originals and all
copies of all files, materials, documents or other property relating to the
business of the Foamex Affiliates on or before February 13, 2004.
7. Continuing Assistance. For 90 days from the Effective Date, Xxxxx agrees
to cooperate from time to time with all reasonable requests related to
succession issues or other historical Foamex matters related to Xxxxx'x prior
positions with Foamex and Foamex Affiliates, as the Chairman of the Board or the
President of Foamex may reasonably request. It is understood that Xxxxx will not
be required to render such assistance at any specified time or at any specified
place, and that any reasonable out-of-pocket expenses incurred by Xxxxx in
rendering such assistance shall be reimbursed in accordance with Foamex
policies.
8. Nondisparagement. Xxxxx agrees that he will not make any disparaging,
defamatory or denigrating statements regarding any of the Foamex Affiliates or
any of their businesses, employees, agents, officers or directors that could
have a material negative impact on the reputation of Foamex and the Foamex
Affiliates. Foamex, on behalf of itself and each Foamex Affiliate, agrees that
it will not make any disparaging, defamatory or denigrating statements about
Xxxxx or his role or activities at any Foamex Affiliate or the circumstances
leading to Xxxxx'x resignation or the execution of this Agreement that could
have a material negative impact on Xxxxx'x reputation.
9. Non-Solicitation. Xxxxx agrees for a period of twenty-four (24) months
after the Effective Date, he will not directly or indirectly, individually or on
behalf of any other person or entity, as an employee, consultant, owner or in
any other capacity, (i) reveal the name of, solicit or interfere with, or
endeavor to entice away from Foamex Affiliates any of its suppliers, customers,
or employees, as of the Effective Date, and/or (ii) without the advance written
approval of Foamex's Board of Directors, employ any person who was an employee
of Foamex Affiliate as of the Effective Date. After the earlier of March 1, 2004
or their termination from Foamex, the provisions of this paragraph relating to
enticing employees away from Foamex Affiliates and employing such persons shall
not apply to Xxxxx'x assistant, Xxxxxxx XxXxxxx and Xxxxx'x driver, Xxxxxx
Xxxxxx.
10. Non-Competition. Xxxxx agrees for a period of twenty-four (24) months
after the Effective Date, he shall not directly or indirectly, own, manage,
operate, control or participate in the ownership, management, operation or
control of, or be connected as an officer, employee, partner, director,
individual proprietor, lender, consultant, agent or otherwise with, or have any
financial interest in, or aid or assist anyone else in the conduct of, any
entity or business (a "Competitive Operation") which competes in any line of
business conducted, as of the Effective Date, by Foamex Affiliates in any area
or market where such business is being conducted with Foamex Affiliates
(including, but not limited to, United States, Canada, Mexico, China, Singapore,
Thailand, Malaysia, Estonia or elsewhere) and any line of business that has been
contemplated by any Foamex Affiliate's Board of Directors or the senior
management of any Foamex Affiliate as of the Effective Date. It is understood
and agreed that, for the purposes of the foregoing provisions of this paragraph,
no business which is conducted by any Foamex Affiliates and which subsequently
is sold by any Foamex Affiliate shall, after such sale, be deemed to be a
Competitive Operation within the meaning of this paragraph and ownership of not
more than U.S. $500,000 in any equity or debt security of any Public Company
shall not constitute a violation of this paragraph. Since a breach of the
provisions of this paragraph could not adequately be compensated by money
damage, Foamex shall be entitled, in addition to any other right and remedy
available to it, to an injunction restraining such a breach or a threatened
breach, and in either case no bond or other security shall be required in
connection therewith. Xxxxx agrees that the provisions of this paragraph are
necessary and reasonable to protect the Foamex Affiliates in the conduct of
their business. If any restriction contained in this paragraph shall be deemed
to be invalid, illegal, or unenforceable by reason of the extent, duration, or
geographical scope thereof, or otherwise, then the court making such
determination shall have the right to reduce such extent, duration, geographical
scope, or other provisions hereof, and in its reduced form such restriction
shall then be enforceable in the manner contemplated hereby.
11. Non-Interference. Without written approval from a majority of the
Foamex Board of Directors, Xxxxx will not maintain, acquire, seek to acquire or
otherwise obtain any financial interest in, or otherwise interfere in the
operations of, or involve himself in any or with any Foamex Affiliate or any
entity that, to Xxxxx'x knowledge, does business with, or has an equity interest
in any Foamex Affiliate as of the Effective Date or enter into any arrangement
with any Foamex Affiliate or any entity that, to Xxxxx'x knowledge, does
business with, or has an equity interest with or in any Foamex Affiliate as of
the Effective Date. Notwithstanding the foregoing, the previous sentence shall
not (i) affect Xxxxx'x holdings as of the Effective Date in Foamex common stock
and his options under the 1993 Stock Option Plan and the 2002 Stock Award Plan,
(ii) preclude him from maintaining or acquiring any holdings in any Public
Company valued at less than U.S. $500,000 as of the Effective Date or the
acquisition date, respectively, or (iii) preclude him from maintaining,
acquiring, seeking to acquire or otherwise obtaining any financial interest in,
or involving himself or entering into any arrangement with any entity or person,
provided that such activity in no way relates to, or effects in any way any
business, activity or interest of any Foamex Affiliate. Xxxxx also agrees that
he will not represent himself to any person or entity as having any interest in
the business affairs of any Foamex Affiliate.
12. Standstill. Xxxxx agrees that, for a period of three years from the
date of this Agreement, unless such shall have been specifically invited in
writing by Foamex, neither Xxxxx nor any of his affiliates (as such term is
defined under the 1934 Act") or representatives will in any manner, directly or
indirectly, (a) effect or seek, offer or propose (whether publicly or otherwise)
to effect, or cause or participate in or in any way assist (including acting as
a financing source) any other person to effect or seek, offer or propose
(whether publicly or otherwise) to effect or participate in (i) any acquisition
of any securities of any kind or class, whether equity or debt (or any successor
to or person in control of Foamex or of beneficial ownership thereof) or assets
of any Foamex Affiliate; (ii) any tender or exchange offer, merger or other
business combination involving any Foamex Affiliate; (iii) any recapitalization,
restructuring, liquidation, dissolution or other extraordinary transaction with
respect to any Foamex Affiliate; or (iv) any solicitation of proxies or consents
to vote any voting securities of any Foamex Affiliate; (b) form, join or in any
way participate in a "group" (as defined under the 1934 Act); (c) take any
action which might force any Foamex Affiliate to make a public announcement
regarding any of the types of matters set forth in (a) above; or (d) enter into
any discussions or arrangements with any third party with respect to any of the
foregoing. Nothing herein shall prohibit Xxxxx from selling any security of any
Foamex Affiliate held by him provided that such sale is permissible under
applicable federal and state securities laws and in accordance with any
contractual restrictions.
13. No Public Comment. Xxxxx agrees not to make any public statements about
his ownership or intent to dispose of, or the taking of any other action by him
with regard to, the securities of any Foamex Affiliate of which he is record or
beneficial owner, except as required by law.
14. Indemnification. Nothing contained in this Agreement shall limit or any
way impair Xxxxx'x current rights to indemnification under Foamex's charter or
bylaws or rights to coverage under Foamex's director's and officer's insurance
polices.
15. Breach or Violation. Xxxxx and Foamex agree that in the event of
violation of the provisions of this Agreement, in addition to any damages
allowed by law or as otherwise provided for in this Agreement, Xxxxx and Foamex
shall be entitled to injunctive relief. In the event of a judicial determination
that any restriction contained in this Agreement is unreasonable, Xxxxx and
Foamex agree that the court may modify such restriction to make it reasonable
prior to granting any injunctive relief.
16. Construction. The parties acknowledge that they have had a sufficient
amount of time to consider the terms of this Agreement. Xxxxx and Foamex have
cooperated in the drafting and preparation of this Agreement. Hence, in any
construction to be made of this Agreement, the same shall not be construed
against any party on the basis that the party was the drafter.
17. Certain Representations. Each of the parties represents and
acknowledges that in executing this Agreement such party does not rely and has
not relied upon any oral or written representation or statement made by the
other party or the other party's agents, representatives or attorneys with
regard to the subject matter, basis or effect of this Agreement or otherwise.
18. Binding Agreement. This Agreement shall be binding upon and inure to
the benefit of the parties and their respective representatives, successors and
permitted assigns.
19. Entire Agreement; Amendment. This Agreement contains the entire
agreement between the parties relating to the subject matter of this Agreement,
and supercedes all previous agreements between the parties, whether such
agreements are written or oral, and including, without limitation, the
agreements listed in paragraph 1(b). This Agreement may not be altered or
amended except by an instrument in writing signed by the parties hereto.
20. No Admission. The parties agree that nothing contained in this
Agreement shall constitute or be treated as an admission of liability or
wrongdoing by Foamex Affiliates or Xxxxx.
21. Governing Law. This Agreement shall be governed by, and construed in
accordance with, the laws of the State of New York (excluding the choice of law
rules thereof). The language of all parts of this Agreement shall in all cases
be construed as a whole, according to its fair meaning, and not strictly for or
against any of the parties.
22. Waiver. Neither the waiver by any party of a breach of or default under
any of the provisions of the Agreement, nor the failure of any party on one or
more occasions, to enforce any of the provisions of the Agreement or to exercise
any right or privilege hereunder shall thereafter be construed as a waiver of
any subsequent breach or default of a similar nature, or as a waiver of any
provisions, rights or privileges hereunder.
23. Further Assurances. The parties agree to take or cause to be taken such
further actions as may be necessary or as may be reasonably requested in order
to effectuate fully the purposes, terms, and conditions of this Agreement.
24. Assignment. This Agreement and the rights and obligations of the
parties hereunder may not be assigned by Xxxxx without the prior written consent
of Foamex. In the event of Xxxxx'x death prior to receipt by Xxxxx of all
amounts payable by Foamex under this Agreement, any remaining cash payments
provided for in the first sentence of paragraph 2 of this Agreement shall be
payable to Xxxxx'x estate and any other benefits shall be governed by the terms
of applicable law and benefit plan documents. This Agreement and the rights and
obligations of the parties hereunder may not be assigned to any other person or
entity by Foamex except as a result of a merger or acquisition of Foamex or the
purchase of all or substantially all of Foamex's assets or otherwise by
operation of law.
25. Notice. All notices, demands, requests, or other communications which
may be or are required to be given, served or sent by either party to the other
party pursuant to this Agreement shall be in writing and shall be hand-delivered
(including delivery by courier) or mailed by first-class, registered, or
certified mail (return receipt requested, postage prepaid) to Xxxxx at his
residence address set forth on Schedule B, with a copy to Xxxxxx X. Xxxxxxxxx,
Esq., Akin Gump Xxxxxx, Xxxxx & Xxxx LLP, 000 Xxxxxxx Xxxxxx, Xxx Xxxx, XX 00000
and to Foamex at its then current headquarters, with a copy to Xxxxxx X. Xxxxxx,
III, Xxxxx & Xxxxxxx, LLP, 000 Xxxxx Xxxxxx, Xxx Xxxx, XX 00000. Either party
may designate by notice in writing a new address to which any notice, demand,
request, or communication may thereafter be so given, served, or sent. Each
notice, demand, request, or communication which shall be mailed, delivered, or
transmitted in the manner described above shall be deemed sufficiently given,
served, sent, and received for all purposes at such time as it is delivered to
the addressee (with the return receipt, the delivery receipt, or the affidavit
of messenger being deemed conclusive evidence of such delivery) or at such time
as delivery is refused by the addressee upon presentation.
26. Acknowledgment. Xxxxx acknowledges that he has read and understands the
foregoing Agreement and executes it voluntarily and without coercion. Xxxxx
further acknowledges that he is being advised herein in writing to consult with
an attorney of his choice prior to executing this Agreement, that he has had the
opportunity to review this Agreement with an attorney of his choice, and that he
has been given a period of 21 days within which to consider and execute this
Agreement, unless he voluntarily chooses to execute this Agreement before the
end of the 21 day period. Xxxxx understands that he has seven days following the
execution of this Agreement to revoke it in writing, and that this Agreement is
not effective or enforceable until after this seven-day period.
Please signify acceptance of and agreement to the terms and provisions
contained herein by executing this Agreement in the space provided below and
returning a signed original copy to Foamex.
Foamex International Inc.
By: /s/ Xxxxxxx X. Xxxxxxxxx
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Xxxxxxx X. Xxxxxxxxx
Executive Vice President
Date: February 22, 2004
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/s/ Xxxxxxxx X. Xxxxxx
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Witness
Accepted and agreed to:
/s/ Xxxxxxxx X. Xxxxx
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Xxxxxxxx X. Xxxxx
Date: February 20, 2004
-----------------------
/s/ Xxxxxx X. Xxxx, Xx.
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Witness
ELECTION TO EXECUTE PRIOR TO EXPIRATION
OF TWENTY-ONE DAY CONSIDERATION PERIOD
I, Xxxxxxxx X. Xxxxx, understand that I have 21 days within which to
consider and execute the above Separation Agreement and Release. However, after
having an opportunity to consult counsel, I have freely and voluntarily elected
to execute the Separation Agreement and General Release before such 21-day
period has expired.
/s/ Xxxxxxxx X. Xxxxx
--------------------------
Xxxxxxxx X. Xxxxx
Date: February 20, 2004
