EXECUTION COPY
Exhibit 10.11.5
TERMINATION AND RELEASE AGREEMENT
THIS TERMINATION AND RELEASE AGREEMENT (this "Agreement") is entered
into this 6th day of December, 2001 (the "Separation Date"), by and between
Foamex International Inc. (together with its subsidiaries, parents, and
affiliates, the "Company") and Xxxx Xxxxxxxxxx (the "Executive").
W I T N E S S E T H
WHEREAS, the parties have previously entered into an Employment
Agreement, dated as of May 21, 1999, as amended by first amendment, dated
February 23, 2001 (the "Employment Agreement"); and
WHEREAS, the parties have determined that it would be in their
respective best interests to provide for the termination of Executive's
continued employment with the Company in accordance with this Agreement.
NOW, THEREFORE, in consideration of the foregoing and for other good
and valuable consideration, the adequacy of which is hereby acknowledged, the
parties, intending to be legally bound, hereby agree as follows:
1. Separation.
The parties hereby confirm that, effective as of the Separation Date,
the Executive has resigned in each and every capacity with the Company,
including as President and Chief Executive Officer, whether as officer,
director, employee, consultant, agent or otherwise, and hereby agree that his
employment with the Company shall cease as of the Separation Date. The parties
further acknowledge and agree that, effective as of the Separation Date, the
Employment Agreement was terminated without further liability to the Company.
Without limiting the generality of the foregoing, the Executive hereby agrees to
endeavor to cooperate with the Company as the Company shall reasonably request,
to effectuate the effectiveness of the Executive's resignation from any and all
appointments at any affiliate or subsidiary of the Company. Effective as of the
Separation Date, the Executive shall have no authority to act on behalf of the
Company, and shall not hold himself out as having such authority or otherwise
act in an executive capacity.
2. Entitlement.
(a) In consideration of the covenants, agreements and acknowledgments
of the Executive contained in this Agreement, the Company shall pay to the
Executive $1,500,000 to be paid ratably over a thirty-six (36) month period
commencing on the Separation Date. All payments made pursuant to this Section
2(a) shall be made in accordance with the Company's regular payroll policies and
shall be
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subject to applicable withholding and deductions. Notwithstanding any provision
of the Agreement to the contrary, if the Executive violates any provision of
this Agreement (including, but not limited to, the post-termination obligations
set forth in Sections 3, 4 and 5 hereof) or breaches any representation
contained herein, the Executive shall immediately forfeit any amounts paid or
payable to him pursuant to this Agreement and the Company may, in accordance
with Section 6(e) hereof, reclaim any amounts paid to him under the terms of
this Agreement.
(b) The Company shall pay all premiums required for the Executive and
his covered family to maintain coverage under the Company's medical plans for
the eighteen (18) month period commencing on the Separation Date. The parties
hereby acknowledge and agree that the eighteen (18) period of medical coverage
provided pursuant to Section 2(b) shall reduce by eighteen (18) months the
period of COBRA continuation coverage and any other continuation coverage period
provided under any other applicable law, and that for purposes of COBRA and any
other applicable continuation of coverage law, the continuation coverage period
shall commence on the Separation Date.
(c) As of the Separation Date, and other than as is specifically
provided in this Section 2 of this Agreement, the Executive shall no longer
participate in, accrue service credit or have contributions made on his behalf
under any employee benefit plan sponsored by the Company, including without
limitation, any plan which is intended to qualify under Section 401(a) of the
Internal Revenue Code of 1986, as amended. The Executive shall be entitled to
all benefits accrued up to the Separation Date, to the extent vested under all
employee benefit plans of the Company, in accordance with the terms of such
plans, excluding any plan, policy or arrangement that provides for severance
pay.
(d) The Executive was granted options to purchase 100,000 shares of
the Company's common stock pursuant to the terms of Section 3.1(e) of the
Employment Agreement (the "Options"). As of the Separation Date, 57,200 of the
Options are vested and the Executive shall have the right to exercise such
vested Options during the 180-day period commencing on the Separation Date and
32,800 unvested Options shall expire immediately on the Separation Date. All
other options to purchase the Company's common stock, including, without
limitation, the options granted to the Executive pursuant to Sections
3.1(e)(ii), (iii) and (iv) of the Employment Agreement shall expire immediately
on the Separation Date.
(e) The Company shall provide, through Xxxxxx Associates, Inc.,
outplacement services (including the provision of office space and secretarial
assistance) to the Executive for a six-month period commencing on the Separation
Date.
(f) The Company shall pay the lease payments on the automobile
currently leased for the Executive's use for a period ending on the earlier of
the expiration of such lease or 18 months following the Separation Date.
Following the lease termination, the Executive shall return the automobile to
the lessor in accordance with the
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terms of the lease. The Company shall have no other obligation or liability with
respect to such automobile.
3. Confidentiality.
(a) On the Separation Date, the Executive shall return to the Company
all files, access keys, desk keys, ID badges and credit cards, and all such
other property, including without limitation, all originals and copies of
papers, notes, and documents (in any medium, including computer disks), whether
Company property or not, prepared, received or obtained by the Executive during
the course of his employment with the Company, and all equipment and property of
the Company which may be in the Executive's possession or under his control,
including all such papers, work papers, notes, documents and equipment in the
possession of the Executive. The Executive agrees that he and his family shall
not retain copies of any such papers, work papers, notes and documents.
Notwithstanding the foregoing, the Executive may retain copies of any employment
or benefits agreements between the Executive and the Company, this Agreement,
any publicly filed materials and any employee benefit plan and stock option plan
materials distributed generally to participants in any such plan by the Company.
(b) The Executive hereby agrees that at any and all times he will hold
all Confidential Information (as defined below) in a fiduciary capacity for the
benefit of the Company and will not disclose to any third party or use for his
own benefit or for the benefit of any third party any such Confidential
Information; except as required to be disclosed by court order, subpoena or
other judicial or governmental administrative process. For purposes of this
Agreement, "Confidential Information" shall mean any information in whatever
form (including, but not limited, to any information that is written or
electronically stored) which has commercial value to the Company and which is
created, discovered, developed, or otherwise becomes known to the Company or the
Executive, or in which property rights are held, assigned to or otherwise
acquired by or conveyed to the Company, including any system, software,
technical information, trademark, copyrighted material, reports, records,
documentation, data, customer or supplier lists, tax or financial information
(including the revenues, profits, and costs associated with any of the Company's
products or services), business or marketing plans, pricing information or
forecasts, "know-how", trade secrets, consultant contracts, subscription lists,
pricing policies, operational methods, market plans or strategies, business
acquisition plans, new recruiting plans, designs or design projects or research
projects. Confidential Information does not include information which becomes
generally known within the Company's industry through no act or omission by the
Executive. Any Confidential Information, whether or not developed by the
Executive, in whole or in part, prior to the Separation Date, shall at all times
be the Company's exclusive property.
(c) The Executive acknowledges and agrees that the Confidential
Information is a valuable business asset, and that this Section 3 is necessary
to protect the Company's legitimate business interests.
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(d) The Executive acknowledges and agrees that, unless he has prior
written authorization from the Company or as otherwise provided in this
Agreement, he will not disclose or allow disclosure of any information regarding
any aspect of his employment with the Company, or the termination of such
employment, in any medium to any individual or entity, except for disclosure by
the Executive (i) to his legal and financial advisors, (ii) to any prospective
employer or employer of the Executive in accordance with this Section 3(d), and
(iii) if required by order of a court or other body having jurisdiction over
such matter. Notwithstanding the foregoing, nothing in this Agreement shall
prevent the Executive from referring to his performance of services with the
Company as descriptive of his ability or qualification for employment or
engagement by any other entity.
(e) The existence of and the terms and conditions of this Agreement
shall be held confidential by the parties hereto, except for disclosure (i) by
the Company to its legal, actuarial and accounting advisors, (ii) by the
Executive to his legal and financial advisors, (iii) by the Executive or the
Company to any prospective employer or employer of the Executive in accordance
with Sections 3(d) and 5 hereof, (iv) by either party if required by order of a
court or other body having jurisdiction over such matter, or otherwise as
required under the securities laws, and (v) by either party with the written
consent of the other.
4. Solicitation and Competition; Cooperation.
(a) The Executive agrees that he shall not for a period of three (3)
years commencing on the Separation Date (the "Non-Competition Period") (i) enter
into the employ of or render any services to any Competitive Business (as
defined below) or (ii) engage in any Competitive Businesses for the Executive's
own account, or (iii) become interested in any Competitive Business as an
individual, partner, shareholder, creditor, director, officer, principal, agent,
employee, trustee, consultant or advisor or in any other relationship or
capacity; provided; however, that nothing in this Section 4(a) shall prohibit
the Executive from being a stockholder owning not more than 1% of the
outstanding shares of a publicly owned business. For purposes of this Agreement,
"Competitive Business" shall mean (i) any person, entity or business that is
engaged in any of the activities described in Part I of the Company's Annual
Report for 2000 on Form 10-K as filed with the Securities Exchange Commission
(the "2000 Form 10-K"), including without limitation, Dow Chemical Corporation
and its Subsidiaries, or (ii) any company or business described as in
competition with the Company in Part I of the Company's 2000 Form 10-K.
(b) The Executive agrees that during the Non-Competition Period, he
will not, directly or indirectly (i) solicit, entice or encourage any person
employed by, or an agent of, the Company to terminate such person's employment
or agency, as the case may be, with the Company, or (ii) divert, or attempt to
divert, any person, concern, or entity from doing business with the Company, nor
will he attempt to induce any such person, concern or entity to cease being a
customer or supplier of the Company.
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(c) During the Non-Competition Period, the Executive agrees that upon
the earlier of the Executive's (i) accepting an offer of employment from a
prospective employer, or (ii) becoming employed by an employer, the Executive
will (A) immediately provide notice to the Company of such circumstances, and
(B) provide copies of this Agreement to the prospective employer or employer, as
the case may be. The Executive further agrees that the Company may provide
notice to a prospective employer or employer of the Executive of the Executive's
obligations under this Agreement.
(d) The Executive agrees that, at any time and from time to time, he
will execute any and all documents and will take all other actions which the
Company may deem reasonably necessary or appropriate to effectuate the terms of
this Agreement.
(e) The Executive shall cooperate fully and on a timely basis with all
requests made by the Company to respond to questions, either orally or in
writing, to provide oral or written testimony and to otherwise cooperate with
the Company in connection with any inquiry, investigation or proceeding (whether
conducted by the Company, its representatives or a third party or governmental
entity) that relates to the period of his employment with the Company. The
Executive hereby represents and warrants that the statements contained in his
letter to the Company, dated the date hereof, are true and correct.
5. Nondisparagement.
The Executive hereby agrees that he shall not defame, disparage or
criticize the Company, its products or services or any former or existing
employees, managers, directors, officers or agents in any medium to any person
or entity. Notwithstanding this provision, the Executive may confer in
confidence with his legal representatives and make truthful statements in legal
proceedings or as required by law. The undertakings of this Section 5 shall also
apply to Executive's spouse, family and counsel. The Company shall have sole and
complete discretion regarding the timing, content and any and all aspects of any
internal or external announcement or other communication concerning the
Executive's separation from the Company; provided that said announcement is
materially accurate. The Executive shall not participate in any such
communication without the advance consent of the Board of Directors of the
Company or the Board's designee which will not be unreasonably withheld.
6. Acknowledgment and Release.
(a) In consideration of the Company's execution of this Agreement, and
except with respect to the Company's obligations arising under or preserved in
this Agreement, the Executive, for and on behalf of himself and his heirs and
assigns, hereby waives and releases any common law, statutory or other
complaints, claims, charges or causes of action arising out of or relating to
the Executive's employment or termination thereof, or his serving in any
capacity in respect of, the Company, both known and unknown, in law or in
equity, which the Executive may now have or ever had against the Company,
including, without limitation, (i) any claim for any bonus for 2001; (ii) any
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claim for any severance benefit which but for this Agreement might have been due
the Executive under any previous agreement executed by and between the Company
and the Executive, and (iii) any complaint charge or cause of action arising out
of the Executive's employment with the Company or termination thereof under the
Age Discrimination in Employment Act of 1967 ("ADEA"), as amended; the National
Labor Relations Act, as amended; the Civil Rights Act of 1991; 42 U.S.C. 1981,
as amended; the Americans With Disabilities Act of 1990; Title VII of the Civil
Rights Act of 1964, as amended; the Employee Retirement Income Security Act of
1974, as amended; and any other federal, state and local human rights laws. By
signing this Agreement the Executive acknowledges that he intends to waive and
release any rights known or unknown he may have under these laws; provided,
however, that the Executive does not waive or release (i) any claims with
respect to the right to enforce this Agreement or (ii) any right to COBRA
continuation coverage or other continuation coverage provided under any other
applicable law.
(b) The Executive acknowledges that he has not filed, nor will he
initiate or cause to be initiated on his behalf, any complaint, charge, claim or
proceeding against the Company or, including, without limitation, each of its
parents, affiliates and subsidiaries before any local, state or federal agency,
court or other body relating to his employment or the resignation thereof (each
individually a "Proceeding"), nor will he participate in any Proceeding, in each
case, except as required by law. The Executive represents that he is not aware
of any basis on which such a Proceeding could reasonably be instituted. The
Executive waives any right he may have to benefit in any manner from any relief
(whether monetary or otherwise) arising out of any Proceeding, including any
Proceeding conducted by the Equal Employment Opportunity Commission ("EEOC").
The Executive understands that by entering into this Agreement, he will be
limiting the availability of certain remedies that he may have against the
Company and limiting also his ability to pursue certain claims against the
Company.
(c) The Executive acknowledges that he has been given twenty-one (21)
days from the date of receipt of this Agreement to consider all the provisions
of this Agreement and hereby agrees to waive the twenty-one (21) day period
provided under ADEA. He acknowledges that he has read this Agreement carefully,
has been advised to consult an attorney, and fully understands that by signing
below he is giving up certain rights which he may have to xxx or assert a claim
against the Company, as described in this Section 6 and the other provisions
hereof. The Executive acknowledges that he has not been forced or pressured in
any manner whatsoever to sign this Agreement and the Executive agrees to all of
its terms voluntarily.
(d) The Executive shall have seven (7) days from the date of execution
of this Agreement to revoke this Agreement (the "Rescission Period"). If the
Executive revokes this Agreement within the Rescission Period he will not be
entitled to the payments and other benefits provided under Section 2 hereof,
except as otherwise required by law.
(e) In the event the Executive initiates or voluntarily participates
in any Proceeding, or if he violates any of the terms and conditions of this
Agreement
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(including, but not limited to, the post-termination obligations set forth in
Sections 3, 4 and 5 hereof) or breaches any representation contained herein, or
if he revokes this Agreement within the Rescission period, the Company may, in
addition to any other remedies it may have, reclaim any amounts paid to him
under the provisions of this Agreement without waiving the release granted
herein (except that such release shall be waived in the case of revocation
during the Rescission Period).
(f) Notwithstanding anything contained herein to the contrary, the
Company shall continue to indemnify and hold the Executive harmless pursuant to
the Company's Certificate of Incorporation and By Laws, and the Executive shall
continue to enjoy the benefits of the liability insurance policies maintained by
the Company, for the benefit of its directors and officers, including the
Executive, in each case, subject to the terms, conditions and limitations
contained therein.
7. Remedies.
The Executive acknowledges and agrees that the remedy at law available
to the Company for breach of any of his post-termination obligations under this
Agreement or his obligations under Section 6 of this Agreement would be
inadequate and that damages flowing from such a breach may not readily be
susceptible to being measured in monetary terms. Accordingly, the Executive
acknowledges, consents and agrees that, in addition to any other rights or
remedies which the Company may have at law, in equity or under this Agreement,
upon adequate proof of his violation of any such provision of this Agreement,
the Company shall be entitled to immediate injunctive relief and may obtain a
temporary order restraining any threatened or further breach, without the
necessity of proof of actual damage.
8. Miscellaneous.
(a) Notices. Any notice given pursuant to this Agreement to any party
hereto shall be deemed to have been duly given when mailed by registered or
certified mail, return receipt requested, or by overnight courier, or when hand
delivered as follows:
If to the Company:
Foamex International Inc.
0000 Xxxxxxxx Xxxxxx
Xxxxxxx, Xxxxxxxxxxxx 00000
Attention: Vice President, Human Resources
with a copy to:
Xxxx, Weiss, Rifkind, Xxxxxxx & Xxxxxxxx 1285 Avenue
of the Americas Xxx Xxxx, Xxx Xxxx 00000-0000
Attention: Xxxx X Xxxxxxxxx, Esq.
If to the Executive:
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Xxxx Xxxxxxxxxx
0 Xxxxx Xxxx Xxxxxx
Xxxx Xxxxxxx, XX 00000
with a copy to:
Xxxxxxxx Xxxxx XXX
0000 Xxxxxx Xxxx Center
0000 Xxxxxx Xxxxxx
Xxxxxxxxxxxx, XX 00000
Attention: Xxxx X. Xxxxxxxxx, Esq.
or at such other address as either party shall from time to time designate by
written notice, in the manner provided herein, to the other party hereto.
(b) Successor. This Agreement shall be binding upon and inure to the
benefit of the parties, their respective heirs, successors and assigns. All
payments to be made under this Agreement shall survive and be payable in
accordance with their terms after the death of the Executive.
(c) Taxes. The Executive shall be responsible for the payment of any
and all required federal, state, local and foreign taxes incurred, or to be
incurred, in connection with any amounts payable to the Executive under this
Agreement. Notwithstanding any other provision of this Agreement, the Company
may withhold from amounts payable under this Agreement all federal, state, local
and foreign taxes that are required to withheld by applicable laws and
regulations.
(d) Severability. In the event that any provision of this Agreement is
determined to be invalid or unenforceable, the remaining terms and conditions of
this Agreement shall be unaffected and shall remain in full force and effect. In
addition, if any provision is determined to be invalid or unenforceable due to
its duration and/or scope, the duration and/or scope of such provision, as the
case may be, shall be reduced, such reduction shall be to the smallest extent
necessary to comply with applicable law, and such provision shall be
enforceable, in its reduced form, to the fullest extent permitted by applicable
law.
(e) Counterparts. This Agreement may be executed by one or more of the
parties hereto on any number of separate counterparts and all such counterparts
shall be deemed to be one and the same instrument. Each party hereto confirms
that any facsimile copy of such party's executed counterpart of this Agreement
(or its signature page thereof) shall be deemed to be an executed original
thereof.
(f) Non-Admission. Nothing contained in this Agreement shall be deemed
or construed as an admission of wrongdoing or liability on the part of the
Executive or on the part of the Company.
(g) Entire Agreement. This Agreement is the entire agreement between
the Executive and the Company with respect to the subject matter hereof, which
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includes without limitation, any rights which may arise from the separation of
the Executive from the Company, and contains all of the agreements, whether
written, oral, express or implied, between the Executive and the Company and
supersedes any other agreement by and between the Executive and the Company
except to the extent specifically set forth herein. This Agreement cannot be
modified or amended except in a writing signed and agreed to by the Executive
and the Company.
(h) Governing Law. This Agreement shall be governed by, and construed
in accordance with the internal laws of the State of New York applicable to
agreements made and to be performed in that State; and the parties agree to the
jurisdiction of the Federal or state courts located within New York.
(i) Resolution of Disputes. Any disputes arising under or in
connection with your employment with the Company, or this Agreement shall be
resolved by binding, confidential arbitration to be held in New York City in a
confidential, closed session in accordance with the rules and procedures of the
American Arbitration Association. The arbitrators may assess expenses, including
reasonable attorneys' fees, to either or both parties, taking into account the
circumstances of the case. Except as assessed by the arbitrator pursuant to the
previous sentence, each party shall bear its own expenses, including attorneys'
fees, in connection with any such dispute.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of
the date and year first above written.
FOAMEX INTERNATIONAL INC.
By: /s/ Xxxxx Xxx Xxxx
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Title: Executive Vice President -
Human Resources
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By: /s/ Xxxx Xxxxxxxxxx
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Xxxx Xxxxxxxxxx
