Exhibit 10 (xxv)
SEVERANCE AGREEMENT AND MUTUAL RELEASE
This Severance Agreement and Mutual Release ("Agreement") is entered into
between XXXX XXX XXXXXXXX-XXXXX ("EMPLOYEE") and AMERICAN GREETINGS CORPORATION,
an Ohio corporation ("AG" or "Company"), on the date set forth at the signature
lines below, arising out of the employment relationship between EMPLOYEE and AG.
This Agreement will not become effective and irrevocably binding until seven (7)
days after it is signed by EMPLOYEE. EMPLOYEE may revoke this Agreement at any
time prior to the expiration of such seven (7) days. A revocation must be in
writing and it must be received by the Company by the close of business on the
seventh day.
In consideration of the mutual covenants and agreements hereinafter set
forth, and intending to be legally bound, the parties agree as follows:
1. EMPLOYEE hereby acknowledges termination of employment with the Company
effective as of the close of business on February 28, 2005 ("Severance Date").
2. Commencing on the Severance Date and upon EMPLOYEE signing a release
prepared by the Company in the form of paragraph 8, and provided that EMPLOYEE
has not resigned prior to the Severance Date, EMPLOYEE will receive the
following benefits from the Company:
x. Xxxxxxxxx pay in the amount of $28,335.41 per month for 36 months
beginning on March 15, 2005, and continuing on the 15th day of each month
thereafter through February 15, 2008, less applicable deductions,
including deductions for health care coverage. Any payments due before the
effective date of this Agreement shall be payable within ten (10) days
after the effective date. The Company reserves the right to pay any
portion of the severance pay in a lump sum, at the Company's discretion.
In the event the Company exercises its right to make a lump sum payment,
such payment shall be increased ("grossed up") in the amount necessary to
eliminate any adverse tax consequences to EMPLOYEE.
b. Continued health care coverage, concurrently with COBRA, in the
plan in which EMPLOYEE is enrolled at the Severance Date, at the Senior
Vice President active employee payroll deduction rate, as it may be
changed from time-to-time, through February 28, 2008; and from March 1,
2008 through December 31, 2018, EMPLOYEE will continue to be eligible for
health care coverage at the Senior Vice President active employee rate on
a pre-tax basis, as it may be changed from time-to-time; and thereafter,
EMPLOYEE shall be eligible for retiree health care coverage on the terms
then in effect. The period through February 28, 2008, shall be considered
as active employment for purposes of qualifying for retiree health care
c. EMPLOYEE will be eligible to participate in the Key Management
Annual Incentive Plan for Fiscal Year 2005, at no less than a "Meets
Expectations" evaluation level.
d. AG will pay for up to six (6) months of outplacement services to
assist EMPLOYEE in seeking employment. The service provider will be
mutually agreed upon by Company and EMPLOYEE. The Company will make direct
payments to the service provider. EMPLOYEE may use, and the Company will
pay for, these outplacement services anytime before February 28, 2008.
e. EMPLOYEE will have continued use of EMPLOYEE's company car (or a
replacement car in February 2005 pursuant to the Company's executive car
policy) through February 28, 2008, at which time EMPLOYEE will return the
car to AG unless EMPLOYEE exercises the option to purchase the car at a
discount of $500 below the car's residual value;
f. EMPLOYEE will continue to be covered under the Company's
Executive Life Insurance Plan through February 28, 2008;
g. Stock options granted to EMPLOYEE prior to the Severance Date
will continue to vest according to the terms of the American Greetings
Stock Option Plan(s) through February 28, 2008, as if EMPLOYEE were
actively employed. Vested stock options shall be exercisable through May
30, 2008. In the event of EMPLOYEE's death prior to February 28, 2008, all
vested options of EMPLOYEE may be exercised by EMPLOYEE's
beneficiary(ies), who may exercise such options for a period of one (1)
year following EMPLOYEE's death.
h. Company will pay EMPLOYEE $5000 for transition expenses.
i. The Company agrees to remove EMPLOYEE as an officer and/or
director of any subsidiary or affiliated company in which she held such a
position. The Company agrees to continue to insure EMPLOYEE under its
officers and directors liability insurance policy for any claim based on
any act while she was an officer and/or director of the Company, and to
indemnify, protect and defend any claim or lawsuit naming EMPLOYEE as a
defendant arising from or related to her employment with the Company or
her status as an officer or director of the Company or any of its
subsidiaries, as provided in the Company's corporate regulations and
bylaws, as they may be amended from time to time.
3. If EMPLOYEE is re-employed by Company, in any capacity other than a
temporary or part time assignment, prior to receipt of all the severance
benefits provided in paragraph 2, EMPLOYEE will forfeit any unpaid severance
benefits.
4. EMPLOYEE acknowledges that as of the Severance Date EMPLOYEE will cease
to be an employee of AG and thereafter will not be eligible for or receive any
benefits of employment from AG other than those benefits described in this
Agreement; provided, however,
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that this Agreement does not waive any benefits EMPLOYEE may be eligible to
receive under the Company's Supplemental Executive Retirement Plan ("SERP"), any
stock option plan, deferred compensation plan, health plan, or the Retirement
Profit Sharing and Savings Plan.
a. For purposes of calculating "Final Average Compensation", as that
term is used in paragraph 2.10 of the Company's SERP, the payments
received under paragraph 2.a. of this Agreement during the period February
15, 2005 through February 15, 2008 shall be considered "Compensation" for
the purpose of determining EMPLOYEE's two calendar years which will afford
the highest average compensation.
5. Notwithstanding any other provision of this Agreement, EMPLOYEE
acknowledges that the benefits EMPLOYEE will receive under paragraph 2 above are
greater than those benefits EMPLOYEE would have been entitled to receive upon
termination in the absence of this Agreement.
6. This Agreement is offered as part of an exit incentive or other
employment termination program (the "Program"). Information concerning
eligibility and selection for the Program that is required to be provided under
the federal age discrimination in employment laws is enclosed with this
Agreement. EMPLOYEE acknowledges receipt of the information.
7. It is agreed by EMPLOYEE that this Agreement, the benefits, including
all benefits set forth in paragraph 2 above, and all other terms of this
Agreement, are each confidential information and shall not be disclosed or
revealed to any person other than EMPLOYEE's attorneys, accountants, tax
advisors, and immediate family members (who must be informed of and agree to be
bound by the terms of this paragraph), any governmental taxing authority, or
pursuant to subpoena, court order or as otherwise required by law; provided
however that Company may disclose the terms to comply with any governmental or
regulatory disclosure obligation.
8. With respect to any and all events arising out of or related to the
employment relationship between EMPLOYEE and the Company occurring on or before
the Severance Date, EMPLOYEE hereby releases and forever discharges Company and
its agents, officers, directors, employees, subsidiaries, divisions, affiliates,
successors and assigns (collectively "AG Releasees") from any and all claims
and/or causes of action, known or unknown, arising (i) from or during EMPLOYEE
's employment with the Company or (ii) as a result of the termination of that
employment; and EMPLOYEE hereby covenants and agrees that she will not assert
any such claims and/or causes of action against any AG Releasee, including but
not limited to (i) claims and/or causes of action arising under the Age
Discrimination in Employment Act (29 U.S.C. Sec. 621 et seq.); (ii) claims
and/or causes of action arising under federal, state or local laws, including
but not limited to those prohibiting employment discrimination on the basis of
race, color, national origin, religion, sex, age, disability or otherwise; (iii)
claims and/or causes of action growing out of any legal restrictions on AG's
right to terminate its employees, including breach of contract, discharge in
violation of public policy, or promissory estoppel; or (iv) tort claims and/or
causes of action, including infliction of emotional distress, defamation, libel
or slander.
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Likewise, with respect to any and all events arising out of or related to
the employment relationship between EMPLOYEE and the Company occurring on or
before the Severance Date, the Company hereby releases and forever discharges
EMPLOYEE, her heirs, administrators, executors, successors and assigns
(collectively, "Employee Releasees") from any and all claims and/or causes of
action, known or unknown, arising from or relating to EMPLOYEE'S employment with
AG, known or unknown, whether in tort, contract or any other legal theory.
9. EMPLOYEE represents and warrants that EMPLOYEE has no interest or
obligation that is inconsistent with or in conflict with this Agreement or that
would prevent, limit or impair Employee's performance of any part of this
Agreement.
10. EMPLOYEE agrees that in the event that EMPLOYEE breaches any of the
terms of this agreement, EMPLOYEE will be liable for any damages incurred by the
AG Releasees as a result of the breach. Additionally, in the event EMPLOYEE
breaches her obligations under paragraphs 11 and 12 of this Agreement, she will
forfeit any payments then remaining due to her under paragraph 2 of this
Agreement. In the event AG breaches any term of this Agreement, AG will be
liable for any damages incurred by Employee Releasees.
11. EMPLOYEE acknowledges that EMPLOYEE has an obligation of confidence
and nondisclosure with respect to any and all confidential information and trade
secrets that EMPLOYEE acquired during the course of employment with Company.
This obligation of confidence and non-disclosure extends to both Company
information and third-party information held by the Company in confidence, and
this obligation continues after the Severance Date. EMPLOYEE is prohibited from
using or disclosing such information.
12. EMPLOYEE agrees that from the Severance Date through February 28,
2008, EMPLOYEE shall not be employed directly or indirectly in any capacity or
work as a consultant or independent contractor for any person, firm or company
in the greeting card, stationery, gift wrap or party goods industry in any
capacity similar to that held by EMPLOYEE while employed with the Company.
13. Any dispute arising out of or relating to this Agreement or EMPLOYEE's
employment shall be resolved pursuant to the Company's alternative dispute
resolution program known as "Solutions" and the arbitration provided for under
the Solutions program shall be final and binding upon the parties, except for
any appeal permitted by law; provided however, that in the event that the
Company seeks injunctive relief to enforce its rights under paragraphs 11 or 12
of this Agreement, the parties consent to the jurisdiction of the state or
federal court in Cuyahoga County, Ohio without regard to the mediation and
arbitration provisions of the Solutions program.
14. For 90 days after the Severance Date, EMPLOYEE agrees to provide and
cooperate promptly with any reasonable request by the Company to provide such
information, signatures, or certifications (as to matters upon which Employee
can truthfully certify) that may be required for, or otherwise relate to, the
Company's compliance with federal, state or local
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laws or regulatory requirements. The Company shall reimburse EMPLOYEE for all
reasonable expenses related to compliance with this paragraph.
15. EMPLOYEE agrees that she will not make any oral or written statements
that either generally or specifically disparage the Company, its employment
practices, business, products, conduct or policies, or its employees, directors,
or agents. AG agrees that it shall not make any oral or written statements that
either generally or specifically disparage EMPLOYEE or her professional
competence or employability. In addition, the Company will provide EMPLOYEE with
twenty (20) original counterparts of a favorable letter of recommendation signed
by Xxx Xxxxx in a form to be agreed upon by the parties within 30 days of the
Severance Date.
16. (a) This Agreement constitutes the entire understanding between
EMPLOYEE and the Company relating to the subject matter contained herein and
this Agreement supersedes any previous agreement(s) that may have been made in
connection with EMPLOYEE's employment with AG. This Agreement may not be
changed, modified, or altered without the express written consent of EMPLOYEE
and an officer of AG.
(b) AG's or EMPLOYEE'S failure to insist upon strict adherence to
any term of this Agreement on any occasion shall not be considered a waiver of,
or deprive AG or EMPLOYEE of its or her right thereafter to insist upon strict
adherence to that term or any other term of this Agreement. To be effective, any
waiver must be in writing and signed by EMPLOYEE or by an officer of AG.
(c) This Agreement shall be construed in accordance with the laws of
the State of Ohio. If any part or section of this Agreement is found to be
contrary to law or unenforceable, the remainder shall remain in force and
effect.
17. EMPLOYEE is hereby advised and encouraged to consult an attorney prior
to executing this Agreement. EMPLOYEE acknowledges that if EMPLOYEE has executed
this Agreement without consulting an attorney, EMPLOYEE has done so knowingly,
voluntarily and contrary to the express advice herein.
18. EMPLOYEE acknowledges that EMPLOYEE has been given at least forty-five
(45) days from the date EMPLOYEE first received this Agreement, which date was
on or before December 9, 2004, during which to consider this Agreement. EMPLOYEE
understands that the offer made to EMPLOYEE by this Agreement remains open for
at least forty-five (45) days, and that EMPLOYEE may accept the offer at any
time through February 28, 2005. If EMPLOYEE does not accept this Agreement on or
before that date, the offer set forth in this Agreement is automatically
rescinded unless AG expressly notifies EMPLOYEE in writing otherwise.
19. The obligations of the Company to pay EMPLOYEE pursuant to paragraph
2(a) above shall, in the event of the death of EMPLOYEE prior to February 28,
2008 be payable to EMPLOYEE'S designated beneficiary, her husband, Xxxxxx X.
Xxxxx, which designation may be changed from time to time by EMPLOYEE by written
notice to the Company.
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20. Any notices required in the performance of this Agreement shall be
sent to the following persons by certified mail, return receipt requested:
If to Company: American Greetings Corporation
Xxx Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxxxxxxx Xxxxxxx, General Counsel
With a copy to: American Greetings Corporation
Xxx Xxxxxxxx Xxxx
Xxxxxxxxx, Xxxx 00000
Attn: Vice President/Human Resources
If to EMPLOYEE: Xxxx Xxx Xxxxxxxx-Xxxxx
0000 Xxxxxxxxx Xxxxx
Xxxxxxxx, Xxxx 00000
With a copy to: Xxxxxx X. Valerian, Esq.
Xxxx Xxxxxxxx, LPA
0000 Xxxxxxxx Xxxxx
Xxxxxxxxx, Xxxx 00000-0000
21. All announcements by the Company regarding EMPLOYEE, both internal and
external, except for any filings made by the Company with any government or
regulatory agency shall be mutually agreed upon by the Company and EMPLOYEE
prior to distribution.
22. After the Severance Date, for a period of 90 days, any telephone calls
received at the Company for EMPLOYEE will be referred to EMPLOYEE's current
assistant, who will then inform the caller that EMPLOYEE is no longer with the
Company and will offer a telephone number where EMPLOYEE may be reached.
23. The Company warrants to Employee that the individual signing this
Agreement on behalf of the Company has full authority to do so.
AMERICAN GREETINGS CORPORATION
By: /s/ Xxxxxxxxx Xxxxxxx Date: 2-28-05
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/s/ Xxxx Xxx Xxxxxxxx-Xxxxx Date: 28 Feb. 2005
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Xxxx Xxx Xxxxxxxx-Xxxxx
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