MODINE MANUFACTURING COMPANY RETIREMENT AGREEMENT
Exhibit
10.1
RETIREMENT
AGREEMENT
THIS
AGREEMENT is made and entered into by and between Modine Manufacturing Company,
a Wisconsin corporation, having its principal place of business in Racine,
Wisconsin (the "Company"), and Xxxxx X. Xxxxxxx of Racine, Wisconsin (the
"Executive").
WHEREAS,
the Company and Executive have entered into an employment agreement dated as of
June 15, 2007 (the "Employment Agreement"); and
WHEREAS,
the Executive served as President and Chief Executive Officer of the Company;
and
WHEREAS,
the Company and the Executive have discussed Executive's retirement from the
Company and the terms and conditions that would be applicable thereto;
and
WHEREAS,
the parties wish to enter into this Agreement to finalize all such terms and
conditions;
NOW,
THEREFORE, in consideration of the Executive’s past service and of the mutual
promises herein made and other good and valuable consideration, the parties
agree as follows:
1. Retirement. The
Executive has agreed to retire from all officer and director positions with the
Company and its subsidiaries, and to retire as an employee of the Company,
effective as of March 31, 2008 (the “Retirement Date”). The Company
has accepted Executive's retirement. The Executive shall continue to
receive his current base salary and all qualified and nonqualified pension and
welfare benefits to which he is entitled as a full-time executive employee of
the Company until the Retirement Date.
2. Special Retirement
Benefit. In lieu of any other amounts payable under the
Employment Agreement or under any other severance plan or program of the Company
or its affiliates, the Company shall provide Executive with special retirement
payments and benefits as set forth in the attached schedule (the “Special
Retirement Benefit Schedule”) based upon a March 31, 2008 termination date (the
“Special Retirement Benefit”). The benefits and payments set forth in
the Special Retirement Benefit Schedule are further described in Sections 3
through 8 below. The Executive specifically waives and releases any
claims under the Employment Agreement or any other severance plan or program of
the Company or any of its affiliates. The Special Retirement Benefit shall not
be taken into account under any other pension, savings or welfare benefit plan
that bases benefits on compensation. The Special Retirement Benefit
will be paid or provided to Executive at the times as specified in the Special
Retirement Benefit Schedule, provided the Executive has not revoked this
Agreement as provided in Section 11(d). If the Executive dies prior
to receiving all of the Special Retirement Benefits, any unpaid payments will be
made to the Executive’s estate.
3. Base
Pay. For the period from April 1, 2008 until October 1, 2010
(thirty (30) months), the Company shall pay Executive bi-weekly an amount
equivalent to Executive’s current bi-weekly salary. All legally
required taxes will be deducted from the above sums. It is expressly
agreed that all payments as described above are being allocated for purposes of
unemployment compensation to each of the applicable pay periods.
4. Equity
Awards. With respect to previous grants to Executive under the
Company’s equity incentive plans as approved by the Board of Directors and
shareholders of the Company, the Officer Nomination and Compensation Committee
has consented to Executive’s early retirement, so that Executive’s previously
granted restricted stock awards shall vest to Executive and be free of any
restrictions as of the date the revocation period set forth in Section 11(d) has
expired. In accordance with their terms, Executive's previously
granted stock options may be exercised up to the earlier of ten (10) years from
the date of grant or three (3) years following Executive's Retirement Date. Any incentive stock options must be
exercised within 90 days of the Executive's Retirement Date in order to be
considered incentive stock options; thereafter, the stock options will be
treated as non-qualified stock options.
5. Financial and Tax Planning;
Executive Physical. The Company will continue to pay for
reasonable financial planning and tax preparation services for Executive through
and until March 31, 2009. Executive is eligible and covered for one
additional medical exam at Mayo Clinic in Rochester, MN or Jacksonville, FL or
Froedtert/Medical College of Wisconsin, at his election, under the Company’s
executive medical program between the date hereof and December 31, 2008 which
Executive shall schedule through the Company’s normal process for such
exams. Executive will be responsible for his own transportation to
the medical exam.
6. 401(k), Deferred
Compensation, Pension Plan and Other Benefits. The
Executive’s rights and benefits under the Modine 401(k) Retirement Savings Plan
for Salaried Employees, the Modine Deferred Compensation Plan and the Modine
Non-Union Hourly and Salaried Employee Pension Plan (the “Pension Plan”) are
governed by the provisions of those plans.
7. Salary Continuation; Life
Insurance; Long-Term Disability Benefits. Given Executive’s
retirement from the Company, effective as of the Retirement Date, Executive
shall cease to be eligible for salary continuation, life insurance and Long-Term
Disability Benefits generally provided by the Company to active
employees.
8. Health and Dental
Insurance. The Executive’s participation in the Company’s
health and dental insurance plans shall cease on March 31,
2008. Under current federal COBRA legislation, the Executive may
elect to continue medical and dental insurance at specified group rates for up
to 18 months’ duration. The Company will pay the Executive’s COBRA
premiums for medical and dental coverage until October 1, 2009 (eighteen (18)
months). Upon completion of the eighteen (18) months of medical and
dental insurance under COBRA, Executive will be eligible to receive retiree medical
benefits from the Company and the Executive’s COBRA benefit will
conclude.
9. Executive's Obligations
Under Employment Agreement; Nondisparagement. Executive's
obligations under the Employment Agreement, including those contained in Section
12 of the Employment Agreement relating to confidential information,
non-solicitation and restrictions on competition, shall remain in
effect. Executive also agrees that from the date hereof he shall not,
directly or indirectly, make or cause to be made any disparaging, derogatory,
misleading or false statement, whether orally or in writing, to any person or
entity, including members of the investment community, press, customers,
competitors and advisors to the Company, about the Company and its directors,
officers or employees, or the business strategy, plans, policies, practices or
operations of the Company. The Company shall instruct the directors
and board elected officers of the Company not to, directly or indirectly, make
or cause to be made any disparaging, derogatory, misleading or false statement,
orally or in writing, to any person or entity about
Executive. Notwithstanding the foregoing, the Company and Executive
may each confer in confidence with its own respective legal counsel and nothing
herein shall prevent either party from responding truthfully to any information
requests or questions posed in any formal or informal legal, regulatory,
administrative or investigative proceedings involving any court, tribunal or
governmental body or agency or otherwise as required by law.
2
10. Release. In
consideration of the Company’s promise to pay the Special Retirement Benefit to
the Executive, and subject only to the performance by the Company of its
promises contained in this Agreement, the Executive hereby releases the Company,
its subsidiaries and affiliates, and their officers, directors, employees,
agents, predecessors and successors from any and all claims that the Executive
might have arising out of his employment and the termination thereof arising
prior to the time the Executive signs this Agreement, with the exception of
(a) Executive’s rights to receive vested benefits to which the Executive is
entitled after the Retirement Date under any qualified or nonqualified employee
benefits plans and arrangements of the Company, (b) claims for
indemnification as provided under applicable law, any applicable insurance
policies (e.g., directors and officers insurance), the Articles of Incorporation
or Bylaws of the Company, or any applicable policy statements or indemnification
agreements with the Company, and (c) obligations owed to the Executive under
this Agreement. The claims that are being released include, but are
not limited to, claims under the Employment Agreement or any other severance pay
plan or program, claims for wrongful discharge, breach of contract, harassment,
unlawful terms and conditions of employment, retaliation, defamation, invasion
of privacy, discrimination (including, but not limited to, discrimination on the
basis of age under the Age Discrimination in Employment Act and state and local
law), the Xxxxxxxx-Xxxxx Act of 2002 and any other claims that might be brought
under any federal, state or local law or regulation that regulates the
employment relationship or employee benefits, whether such claims are known or
unknown to the Executive at the time the Executive signs this
Agreement.
11. Acknowledgments. Each
party acknowledges entering into this Agreement knowingly, freely and
voluntarily. The Executive acknowledges that:
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(a)
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he
has been and is hereby advised by the Company to consult with legal
counsel before signing this
Agreement;
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(b)
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he
has 21 days from the date of his receipt of this Agreement within which to
consider it;
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(c)
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he
understands that this Agreement includes a final general release of the
Company, its subsidiaries and affiliates, and their officers, directors,
employees, agents, predecessors and successors, for any and all matters up
to the date that this Agreement is signed;
and
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3
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(d)
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he
may, within 7 calendar days following the date of his execution of this
Agreement, revoke this Agreement by giving written notice of his intent to
revoke to the Chairman of the Officer Nomination and Compensation
Committee of the Company’s Board of Directors, c/o Modine Manufacturing
Company. This Agreement shall not become effective or
enforceable until this 7-day revocation period has
expired. TIME
IS OF THE ESSENCE WITH REGARD TO THIS
PARAGRAPH.
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12. Representation. Each
party represents and acknowledges that in executing this Agreement, such party
has not relied upon any representation or statement not set forth herein made by
the other party or any of the other party’s agents, representatives or employees
with regard to the subject matter, basis or effect of this
Agreement. The Company represents and warrants that it has obtained
all consents, approvals and authorizations required to execute, deliver and
perform this Agreement, that they are in full force and effect as of the date
hereof, and that this Agreement is a valid, binding and enforceable obligation
of the Company in accordance with its terms.
13. Severability. The
invalidity or unenforceability of any provision of this Agreement shall not
affect or impair the validity or enforceability of any other provision and this
Agreement shall be construed as if such invalid or unenforceable provision were
not contained herein.
14. Governing
Law. This Agreement shall be governed by and construed in
accordance with the laws of the State of Wisconsin, without regard to its
conflict of laws provisions.
4
IN
WITNESS WHEREOF, the parties have signed this Agreement as of the dates set
forth below opposite their names.
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/s/ Xxxxx X. Xxxxxxx
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April 6, 2008
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Xxxxx
X. Xxxxxxx
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Date
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By: /s/ Xxxxxxx X. Xxxx
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April 4, 2008
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Xxxxxxx
X. Xxxx, Vice President and Chief Human Resources Officer
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Date
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/s/ Xxxx X. Xxxxx
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April 4, 2008
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Xxxx
X. Xxxxx, Non-executive Chairman of the Company’s Board of Directors, and
through March 31, 2008, Chairman of the Officer Nomination and
Compensation Committee of the Company’s Board of Directors
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Date
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5
Xxxx
Xxxxxxx
Retirement
Agreement
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Special
Retirement Benefit Schedule
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Retirement
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Retirement
Agreement
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Agreement
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When Payable
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Base
Pay
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$ | 1,807,500 |
30
mos
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bi-weekly
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Benefits
Earned:
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Pension
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Monthly
Annuity
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at
retiree's election
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SERP*
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$ | 2,353,547 |
(approx)
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Payable
in non-409A amounts/409A amounts
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401(k)
(current balance)
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$ | 297,000 |
at
retiree's election
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Def.
Comp (current balance)
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$ | 539,000 |
non-409A
amounts -after 60 days
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409A
amounts - after six months
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Vacation
earned for 08/09
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$ | 55,615 |
4/1/2008
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Equity
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Restricted
Stk (at market, est.$14.12 as of 3/26/08)
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$ | 948,779 |
At
time agreement becomes effective
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67194
shares restricted
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Performance
Shares
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Pro-rated
if paid
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At
end of performance period
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Benefits:
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401(k)/DefComp
Match**
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$ | 45,188 |
30
mos
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paid
for calendar yr at the end of the yr
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DCRP***
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$ | 72,300 |
30
mos
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paid
for calendar yr at the end of the yr
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Employee
Health, Dental and Vision****
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$ | 10,571 |
18
mos
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Pay
COBRA for 18 months after COBRA he elects and pays retiree
medical
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Financial
Planning
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$ | 4,000 |
1
yr
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pay
expenses incurred 4/08-3/09
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Tax
Preparation
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$ | 4,000 |
1
yr
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pay
expenses incurred 0/00-0/00
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Xxxx
Clinic
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$ | 3,000 |
1
yr
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Pay
2008 May physical
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Total
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$ | 6,140,500 | ||||
*based on
3-27-08 Xxxxxx estimate payable 1/1/09
**assumes
50% on 5% of current base pay
***assume
4% of base (no bonus paid in 07/08)
****Using
current COBRA rates
