SEPARATION AGREEMENT
Exhibit 10.24
This SEPARATION AGREEMENT (the “Agreement”) is by and between Xxxxx X. Xxxxxxx (“Employee,” “you”
or “your”) and Xxxxxxx Denver, Inc. (the “Company,” “we” or “our”). In consideration of the
promises and conditions set forth below, and intending to be legally bound, you and the Company
agree as follows:
1. Separation. You and the Company hereby agree that you shall cease employment effective at the
close of business on November 26, 2010 (“Separation Date”). You will be paid your salary and any
accrued but unused vacation days through the Separation Date. Until the Separation Date, you agree
to assist the Company in the orderly transition of your responsibilities. You agree to take any
actions necessary to resign your positions as an officer, director, authorized representative, or
similar role with the Company and its affiliates. On the Separation Date, you agree that you will
return all Company property, and that you will not retain any copies, duplicates, reproductions, or
excerpts thereof. You agree, at the Company’s expense, to cooperate in the prosecution or defense
of any litigation or other governmental investigations and proceedings that involves or pertains to
the Company and/or related persons.
2. Separation Benefits. Provided you (a) sign this Agreement and do not revoke your signature as
set forth in Section 5, (b) comply with terms of this Agreement, and (c) do not resign your
employment, or are not terminated by the Company for “Cause” (as defined below) prior to November
26, 2010, the Company will provide you with the following separation benefits:
(i) The following unvested non-qualified stock options to purchase shares of the
Company’s common stock (the “Common Stock”), will automatically vest on the Separation
Date and will remain exercisable for 90 days following your Separation Date: (1) the 3,633
stock options granted on February 18, 2008, and (2) the 10,666 stock options granted on
February 23, 2009. The non-qualified stock option to purchase 10,000 shares of Common
Stock granted to you on February 22, 2010 shall be forfeited and cancelled in full on the
Separation Date. The parties agree that the foregoing provisions hereby amend and
supersede, to the extent required, the applicable provisions of your applicable award
agreements evidencing such stock options.
(ii) The following unvested restricted stock units granted to you prior to December 31,
2009, will automatically vest on the Separation Date and be paid in accordance with the
terms of the Company’s Long-Term Incentive Plan, as amended and restated (the “Incentive
Plan”): (1) 4,500 restricted stock units granted on February 18, 2008 and (2) 7,300
restricted stock units granted on February 23, 2009. The 4,700 unvested restricted stock
units granted to you on February 22, 2010 shall be forfeited and cancelled in full on the
Separation Date. The parties agree that the foregoing provisions hereby amend and
supersede, to the extent required, the applicable provisions of your applicable award
agreements evidencing such restricted stock units.
(iii) A grant of restricted stock units with a market value of One Hundred and Fifty Thousand U.S.
Dollars ($150,000) on the Separation Date will be made on the Separation Date, prior to separation from employment. This grant shall vest on the third anniversary of the
grant date, subject to any forfeiture provisions therein, and be subject to the terms of the
Incentive Plan and a Restricted Stock Units Agreement substantially in the form attached hereto as
Exhibit A.
(iv) A pro-rata cash payment (based upon your time of service with the Company in fiscal 2010) of
the 2010 annual bonus payable to you under the Company’s Executive Annual Bonus Plan if, and to the
extent that, our Management Development and Compensation Committee determines that the performance
goals for this bonus are met as of December 31, 2010, which amount shall be payable to you no later
than March 15, 2011.
(v) A one-time cash bonus to compensate you, on a grossed-up basis, for any increased incremental
taxes you are expected to incur (including federal, state, local, and payroll taxes) as a result of
receiving your
distribution from the Xxxxxxx Denver, Inc. Supplemental Excess Defined Contribution Plan in a
taxable year later than 2010, which amount shall be payable to you in a lump sum on the first date
that any payment is required to be made or commence to you under the terms of such Supplemental
Excess Defined Contribution Plan and any distribution election thereunder. This bonus will be
calculated using the tax rates in effect on January 1, 2011.
(vi) Your eligibility and any benefits under the Company’s Pension Plan, Retirement Savings Plan,
and Supplemental Excess Defined Contribution Plan will be governed exclusively by the terms and
conditions of the applicable plan document(s). Your contributions and the Company’s contributions
will cease on the Separation Date. You will continue to receive the Company’s executive tax return
preparation service regarding your 2010 tax return and tax planning services through the firm as
determined by the Company, up to an aggregate amount no greater than $6,000.00.
You acknowledge and agree that except for the payments and benefits provided for in this Section 2,
you will not be entitled to any other amounts, payments, or benefits from the Company and its
subsidiaries and affiliates, including, without limitations, any long-term cash incentive awards
under the Incentive Plan, and that all other Company benefits and perquisites shall terminate on
the Separation Date pursuant to the Company’s policies and procedures. You further agree to pay to
the Company, and otherwise authorize the Company to deduct from any of the amounts set forth in
this Section 2, the amounts, if any, owed by you to the Company or any governmental authority,
including, without limitation, any tax withholding obligations or personal expenditures charged to
the Company or other amounts that you have agreed to pay to, or are contractually obligated to pay,
the Company (except that, any amounts owed to the Company will not be deducted from any
nonqualified deferred compensation except to the extent any such deduction would not trigger the
adverse tax consequences under Section 409A of the Internal Revenue Code of 1986, as amended). For
purposes of this Section 2, “Cause” means (a) your willful and continued failure to substantially
perform your reasonably assigned duties with the Company or its affiliates, which failure continues
for at least five (5) days after written demand for substantial performance was delivered to you
identifying the manner in which your duties have not been substantially performed; (b) your breach
of a fiduciary duty involving personal profit, commission of a felony or a crime involving fraud or
moral turpitude, or material breach of any material provision of the Company’s written policies;
(c) your willfully engaging in illegal conduct or gross misconduct that is materially and
demonstrably injurious to the Company or its affiliates, as determined in the sole discretion of
the Company’s Board of Directors; or (d) your breach of any term of this Agreement, including,
without limitation, the non-disparagement, non-solicitation, non-competition, or confidentiality
provisions of this Agreement. No act or failure to act on your part will be considered “willful”
unless it is done, or omitted to be done, in bad faith or without a reasonable belief that the
action or omission was legal, proper, and in the best interests of the Company or its affiliates.
3. Waiver and Release.
(a) In exchange for the benefits promised to you in this Agreement, and as a material inducement
for those promises, you hereby WAIVE, RELEASE and FOREVER DISCHARGE the Company and/or related
persons from any and all claims, demands, causes of action, attorneys fees, rights, and liabilities
of every kind and nature (whether or not you now know them to exist), which you ever had, now have, or may have against the Company
and/or related persons for any reason, matter, cause, or thing whatsoever, through the Separation
Date, including, without limitation, claims arising out of or related to your employment with the
Company or the termination of your employment. This WAIVER and RELEASE includes, without
limitation, any claim for unlawful discrimination under the Age Discrimination in Employment Act of
1967 (the “ADEA”); Title VII of the Civil Rights Act of 1964; the Americans with Disabilities Act
of 1990, 42 U.S.C. § 1981; the Worker Adjustment and Retraining Notification Act; the Family and
Medical Leave Act of 1993; the Employee Retirement Income Security Act; the Civil Rights Act of
1991; and the Equal Pay Act, each of the foregoing as amended and as may be amended from time to
time, and any claim under any other federal, state, or local constitution, statute, rule,
regulation, or ordinance relating to your employment, the termination of your employment, or for
breach of contract, wrongful discharge, tort, or other civil wrong. To the fullest extent permitted
by law, you PROMISE NOT TO XXX or bring
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any lawsuit related to the claims you are waiving by this Agreement against the Company and/or
related persons in the future, individually or as a member of a class, except to seek a
determination of the validity of the waiver of your rights under the ADEA. You will immediately
withdraw with prejudice any such lawsuit that you have initiated before the Effective Date (as
defined below) of this Agreement. You acknowledge that although this provision prohibits you from
filing or maintaining a lawsuit concerning claims covered by this Agreement, it does not prohibit
you from lodging a charge or complaint with any governmental agency. Notwithstanding the foregoing,
you agree to waive your right to recover monetary damages in any charge, complaint, or lawsuit
filed by you or by anyone else on your behalf.
(b) If you violate this Agreement by bringing or maintaining a lawsuit contrary to this Section 3,
you will pay all costs and expenses of the Company and/or related persons in defending against such
charges, claims, or actions brought by you or on your behalf, including, without limitation,
reasonable attorney’s fees, and will be required to give back, at the Company’s sole discretion,
the value of anything paid or granted by the Company in exchange for this Agreement. The remedies
set forth in this Section 3(b) shall not apply to any challenge to the validity of the waiver and
release of your rights under the ADEA. In the event you challenge the validity of the waiver and
release of your rights under the ADEA, then the Company’s right to attorneys’ fees and costs shall
be governed by the provisions of the ADEA, so that the Company may recover such fees and costs if
the lawsuit is brought by you in bad faith.
(c) The phrase “the Company and/or related persons,” as used in this Section 3 and anywhere else in
this Agreement, means the Company, its subsidiaries, affiliates, and divisions, their respective
successors and assigns, and all of their past and present directors, officers, representatives,
stockholders, agents, employees, whether as individuals or in their official capacity, and the
respective heirs and personal representatives of any of them.
(d) This Agreement and your promise not to xxx is binding on you and your heirs, legal
representatives, and assigns. You do not waive any rights to vested benefits under the Company’s
Pension Plan, Retirement Savings Plan, or Supplemental Excess Defined Contribution Plan nor any
rights under applicable Workers’ Compensation laws.
4. Employee Review. You acknowledge that you have read this Agreement in its entirety, fully
understand its meaning, and are executing this Agreement voluntarily and of your own free will with
full knowledge of its significance. You acknowledge and warrant that you have had the opportunity
to consider for twenty-one (21) days the terms and provisions of this Agreement. We will keep the
offer open for that period of time. You are advised to consult with an attorney before you sign
this Agreement. You may execute this Agreement prior to the conclusion of the 21-day period, and
if you elect to do so, you acknowledge that you have done so voluntarily. You further acknowledge
and agree that in deciding to sign this Agreement you have not relied on any promises or
commitments, whether oral or in writing, made to you by the Company or any of its directors,
officers, or other representatives, except for those expressly stated in this Agreement.
5. Revocation Period & Effective Date. You have the right to revoke this Agreement within seven (7)
days after you sign it (the “Revocation Deadline”). Your notice of revocation must be in writing
and addressed and delivered to the attention of Xxxxxxx X. Xxxxxxxxx, Vice President—Human Resources, Xxxxxxx Denver, Inc., 0000 Xxxxxxx Xxxxxxxxxx, Xxxxxx,
Xxxxxxxx 00000, by hand delivery or by certified mail, return receipt requested, on or before the
end of the seven-day period. This Agreement will not be effective or enforceable against the
Company until the day immediately following the Revocation Deadline and such date will be the
“Effective Date” of this Agreement. If you timely revoke this Agreement, it will not become
effective, and you will not receive the separation benefits provided for in Section 2 above.
6. Non-Disparagement/Non-Solicitation. You agree not to disparage, denigrate, or defame the Company
and/or related persons, or any of their business products or services. You further agree that you
will not, for a period of twelve (12) months following the Effective Date, solicit, take away, or
attempt to take away, directly
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or indirectly, any customers or employees of the Company, either for yourself or as an employee of
any person, firm, corporation, or other entity engaged in, or planning to engage in, the
manufacture and sale of products and services that are competitive with those of the Company. You
acknowledge and agree that your breach of the covenants contained in this Section 6 will cause
immediate and irreparable harm to the Company, that the restrictions of this Section 6 are
reasonable, and that the Company shall be entitled to injunctive relief to enjoin any continuing
breach of this Section 6 and to actual and consequential damages resulting therefrom.
7. Non-Competition. You agree that you will not, for a period of thirty-six (36) months following
the Effective Date, in any geographic location where the Company conducts business, directly or
indirectly, own, control, operate, manage, join, or participate in as an officer, director,
shareholder, employee, associate, consultant or provider of services, any corporation or other
entity that manufactures products or provides services that are competitive with the Company.
8. Confidential and Proprietary Information of the Company. During your employment with the
Company, you had access to much of the Company’s confidential information including but not limited
to: product margins, product strengths and weaknesses, Company policies, objectives, strategies,
long range plans, plans for market product development, financial information, payroll information,
personnel information and other similar information. You agree that you will not disclose any of
the confidential information gained in your position with the Company to the advantage of a Company
competitor or to the Company’s disadvantage. You will also continue to abide by all confidentiality
restrictions pursuant to other agreements which you have executed with the Company prior to the
date of this Agreement.
9. Indemnification of Tax Liability. You acknowledge and agree that any tax consequence resulting
from any payment and benefit described in this Agreement is solely your responsibility, and you
further agree to indemnify the Company for any tax liability, penalty, or interest the Company may
incur as a result of any such payment and benefit.
10. Entire Agreement; Assignment; Modification. Unless otherwise stated herein, this Agreement sets
forth the entire agreement between the parties, and fully supersedes any and all prior agreements
or understandings between the parties pertaining to the subject matter in this Agreement. Prior
agreements between the parties concerning confidentiality, non-disclosure, non-disparagement,
non-competition and non-solicitation shall, however, remain in full force and effect to the extent
that such agreements provided greater protection to the Company than the confidentiality,
non-disclosure, non-disparagement, non-competition and non-solicitation provisions set forth in
this Agreement. You agree that the Company may assign its rights and privileges under this
Agreement without your express consent, and the Company’s rights under this Agreement will
automatically inure to the benefit of any successor of the Company. This Agreement cannot be
changed or modified except by written agreement signed by you and the Company.
11. Governing Law; Jurisdiction; Jury Trial Waiver. This Agreement shall be governed by and
enforced in accordance with the laws of the State of Delaware, without regard to its conflicts of
law principles. Any action arising out of or relating to this Agreement (other than an action by
the Company to enforce the non-disparagement, non-solicitation, non-competition, and confidentiality provisions set forth herein, which may be
brought in any court of competent jurisdiction) shall be brought and prosecuted only in the
Chancery Court in New Castle County, Delaware or a federal court in the State of Delaware.
12. Interpretation and Severability. All payments made pursuant to this Agreement are intended to
be exempt from or in compliance with Section 409A of the Internal Revenue Code and this Agreement
will be interpreted accordingly. Any provision of this Agreement that is not exempt from or in
compliance with Section 409A shall be amended, voided, and/or reformed to the extent necessary to
comply with Section 409A. You agree that if any part or provision of this Agreement is deemed by
any court to be unlawful or void or voidable for any reason, the remainder shall remain in full
force and effect.
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I have read this SEPARATION AGREEMENT and I understand all of its terms. I hereby enter into and
sign this SEPARATION AGREEMENT knowingly and voluntarily, with full knowledge of what it means.
|
XXXXXXX DENVER, INC. |
|||||
| By: | /s/ Xxxxx Xxxxxxxxxxx | ||||
| Name: | Xxxxx Xxxxxxxxxxx | ||||
| Title: | President & CEO | ||||
| Dated: November 3, 2010 | |||||
| Accepted by: |
|||||
| /s/ Xxxxx X. Xxxxxxx | |||||
| Xxxxx X. Xxxxxxx | |||||
| Dated: November 3, 2010 | |||||
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