Exhibit 10(z)
April 23, 2003
Xx. Xxxxxx X. Xxxxx
00000 Xxxxxxxxx Xxxxx
Xxxxxxxxxx, XX 00000
Re: Change In Status/Separation Agreement and General Release
Dear Xxxxx:
The purpose of this letter agreement (the "Agreement") is to confirm our mutual
understanding and agreement regarding your change in status and subsequent
separation of employment from Material Sciences Corporation ("MSC"). Please read
this Agreement very carefully. It includes a general release of all possible
claims related to your employment by MSC, including the termination of your
employment.
Change in Status/Termination of Employment
Effective April 17, 2003 (your separation date), you have resigned from your
position as Chairman, President and Chief Executive Officer of MSC and all
subsidiary companies, as well as a board member of MSC.
Salary Continuation
For the period commencing on April 17, 2003 and ending on April 15, 2005
("Salary Continuation Period"), you shall receive your current salary of
$43,091.66 per month.
Health Insurance
Beginning May 1, 2003 and continuing until October 31, 2003, you and your
eligible family members will be maintained on the medical, dental and vision
benefits you have previously selected. The Company will pay for its portion of
the monthly premium. You will be responsible for the normal employee portion.
Also, under the Company's COBRA policy, you and your eligible family members can
elect continued health insurance (medical, dental and vision) for up to 18
months beginning November 1, 2003. (A COBRA letter will follow and provide you
with details.) The Company will pay its portion of the COBRA premium for
coverage for you for a period of eighteen (18) months ending April 30, 2005.
Xxxxxx X. Xxxxx
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If you decide not to continue your health insurance coverage during the COBRA
period, then this benefit will be canceled. Also, your acceptance of other
employment and coverage under your new employer's medical plans, during the
COBRA period, will result in your no longer being eligible for continued medical
coverage under COBRA.
Supplemental Pension Plan
You are fully vested under the Company's 1984 Supplemental Pension Plan. You are
eligible to retire under this plan as early as June 1, 2005. You are required to
apply to the Company to activate this benefit.
Other Employee Benefits
From and after April 17, 2003, except as otherwise expressly provided herein,
you shall cease to be eligible for and to participate in any employee benefit
plans, perquisites or other similar arrangements of MSC including, but not
limited to, any Life Insurance Plans, Short and Long Term Disability Plans,
Savings and Investment Plans and the MSC Retirement Plan.
For purposes of the MSC Retirement Plan, you shall not be eligible to receive a
contribution for calendar year 2003. Regarding the Savings and Investment Plan
(401k), you may withdraw your funds at any time within the provisions of the
Plan.
Long-Term Incentive (LTI), Stock and Stock Option Plans
MSC shall take the following actions, which have been approved by the
Compensation and Organization Committee and the MSC Board of Directors, with
respect to the specific awards of stock options, stock and cash made to you
under the 1992 Omnibus Stock Awards Plan for Key Employees (the "1992 Plan") and
listed below:
1993 Restricted Stock/Stock Option Awards Agreement Dated September 22,
1993. Under this Agreement (the "1993 Agreement"), you were granted an
option (the "Option") to purchase up to 16,983 shares of common stock (the
"Non-Qualified Option Shares") and up to 7,017 shares of common stock (the
"Incentive Option Shares") at an exercise price of $14.25 per share. The
Option is fully vested. MSC agrees to extend the date by which you must
exercise the Option from July 16, 2003 (90 days after the Separation Date)
to the Plan expiration date of September 22, 2003. Other than as
specifically set forth herein, the Option shall be subject to the terms and
conditions contained in the 1992 Plan and the 1993 Agreement.
Non-Qualified Stock Option Agreement Dated March 1, 1995. Under this
Agreement (the "1995 Agreement"), you were granted an option (the "Option")
to purchase up to 27,600 shares of common stock (the "Option Shares") at an
exercise price of $16.25 per share. The Option is fully vested. MSC agrees
to extend the date by which you must exercise the Option from July 16, 2003
(90 days after the Separation Date) to October 17, 2003. Other than as
specifically set forth herein, the Option shall be subject to the terms and
conditions contained in the 1992 Plan and the 1995 Agreement.
Xxxxxx X. Xxxxx
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Non-Qualified Stock Option Agreement Dated March 1, 1996. Under this
Agreement (the "1996 Agreement"), you were granted an option (the "Option")
to purchase up to 27,600 shares of common stock (the "Option Shares") at an
exercise price of $14.50 per share. The Option is fully vested. MSC agrees
to extend the date by which you must exercise the Option from July 16, 2003
(90 days after the Separation Date) to October 17, 2003. Other than as
specifically set forth herein, the Option shall be subject to the terms and
conditions contained in the 1992 Plan and the 1996 Agreement.
Non-Qualified Stock Option Agreement Dated March 1, 1997. Under this
Agreement (the "1997 Agreement"), you were granted an option (the "Option")
to purchase up to 40,000 shares of common stock (the "Option Shares") at an
exercise price of $16.375 per share. The Option is fully vested. MSC agrees
to extend the date by which you must exercise the Option from July 16, 2003
(90 days after the Separation Date) to October 17, 2003. Other than as
specifically set forth herein, the Option shall be subject to the terms and
conditions contained in the 1992 Plan and the 1997 Agreement.
2001 Restricted Stock Award and Long Term Cash Award Agreement. Under this
Agreement (the "2001 Agreement"), you were granted 86,800 shares of
restricted common stock (the "Restricted Shares") and a cash award of
$406,400 (the "Long Term Cash Award"). MSC agrees to accelerate the date on
which you shall become fully vested in the Restricted Shares and the Long
Term Cash Award from March 1, 2004 to April 17, 2003. Other than as
specifically set forth herein, the Restricted Shares and Long Term Cash
Award shall be subject to the terms and conditions contained in the 1992
Plan and the 2001 Agreement.
Non-Qualified Stock Option Agreement Dated March 1, 2002. Under this
Agreement (the "2002 Agreement"), you were granted an option (the "Option")
to purchase up to 330,030 shares of common stock (the "Option Shares") at
an exercise price of $10.00 per share. The Option is vested on a pro-rata
basis and 110,010 (12/36ths) fully vested on March 1, 2003. Under the 2002
Agreement, 18,335 shares (2/36ths) will be vested effective April 17, 2003.
MSC agrees to extend the date by which you must exercise the Option from
July 16, 2003 (90 days after the Separation Date) to October 17, 2003.
Other than as specifically set forth herein, the Option shall be subject to
the terms and conditions contained in the 1992 Plan and the 2002 Agreement.
Long-Term Care
Your long-term care premium has been paid for the month of April. You will need
to take over that payment directly with the carrier, Trans America, if you wish
to continue this benefit. You may also want to continue the benefit for your
spouse, Xxxxx. Papers to make this conversion for direct payment will be
forwarded to you from the carrier.
Xxxxxx X. Xxxxx
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Vacation
You shall continue to accrue vacation under MSC's vacation policy until
April 17, 2003. You shall not earn or accrue any additional vacation after this
date. You will be paid for all earned but unused and accrued vacation on May 16,
2003.
Outplacement Assistance
Effective April 17, 2003, MSC will make outplacement assistance available to
you, at the full executive level, from the Xxxx Xxxxxx Group for a period of up
to 24 months.
Automobile Allowance
During the Salary Continuation Period, you will continue to receive your monthly
automobile allowance of $1,000.
Executive Financial Planning Assistance
The Company will provide you with up to $2,500 for expenses incurred in
preparing taxes and estate financial planning for calendar year 2003.
Country Club Membership
The Company will reimburse you for your yearly Biltmore Country Club membership
dues for calendar year 2004. The benefit excludes all special assessments or
other charges.
Taxes
Please note that for any compensation, including but not limited to, salary
continuation, automobile allowance, distribution of shares, cash or cash
investment, applicable taxes and/or authorized deductions will be withheld by
the Company.
General Release
In consideration of the promises of MSC described in this Agreement, the receipt
and sufficiency of which are hereby acknowledged, you, of your own free will,
hereby voluntarily covenant not to sue and to release and forever discharge MSC
and where applicable, its predecessors, successors, assigns, parent
corporations, affiliates, officers, directors, shareholders, agents and
attorneys, past and present, of and from any and all actions or causes of
action, suits, claims, debts, charges, complaints, contracts, (whether oral or
written, express or implied from any source) and promises whatsoever, in law or
equity, which you, your heirs, executors, administrators, successors and assigns
(referred to collectively through this Agreement as "you") may now have against
MSC for, upon, or by reason of any matter, cause or thing whatsoever, including
but not limited to any and all matters arising out of your employment by MSC,
its affiliated companies, or both, and the cessation of said employment, and
including but not limited to any alleged violation of Title VII of the Civil
Rights Act of 1964, Sections 1981 through 1988 of Title 42 of the United States
Code, the Age Discrimination in Employment Act of 1967, the Americans With
Disabilities Act, the National Labor Relations Act, the Fair Labor Standards
Act, the Illinois Human Rights Act, the Illinois Wage Payment and Collection
Act, and any other federal, state or local civil, labor, wage-hour or human
rights law, or any other alleged violation of any federal, state or local law,
Xxxxxx X. Xxxxx
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regulation or ordinance, and/or public policy, contract or tort or common-law
having any bearing whatsoever on the terms and conditions and/or cessation of
your employment with MSC which you ever had, now have, or shall have as of the
date of this Agreement. This Agreement shall not be construed to waive any
rights or claims that you may have under the Age Discrimination and Employment
Act of 1967 which may arise after the date that you sign this Agreement. You
expressly acknowledge and agree that the release referred to in this paragraph
is an essential and material term of this Agreement and, without such
provisions, MSC would not have entered into this Agreement. The release as set
forth herein shall not be applicable to any claims you may have against the
Company for the Company's failure to perform in accordance with this Agreement.
Confidentiality
You agree that the terms and provisions of this Agreement have been and shall
continue to remain confidential and shall not be revealed by you to any other
person other than your attorney, accountant, members of your immediate family,
and federal and state taxing authorities.
Non-disparagement
You agree not to disrupt, disparage, damage, impair, or otherwise interfere with
the business of MSC, or its relationships with its employees, customers, agents,
representatives or vendors. In return, MSC will not disrupt, disparage, impair,
or otherwise interfere with the reputation and integrity of yourself.
Change in Control Agreement
You acknowledge and agree that, effective April 17, 2003, that certain Change in
Control Agreement you entered into with MSC dated June 30, 2001 shall become
null and void and shall have no further force or effect. MSC also acknowledges
that the non-compete clause of the Change In Control Agreement is also null and
void effective today.
Technology Agreement
You expressly acknowledge and agree that, notwithstanding any provision or
statement to the contrary contained in this Agreement, that certain Technology
Agreement you entered into with MSC dated June 20, 1990, a copy of which is
attached, shall remain in full force and effect according to its terms and shall
continue to be binding upon you. Please pay special note to paragraph #3,
"Confidential Information" and paragraph #9, "Non-Compete".
Voluntary and Knowledgeable Act
You acknowledge that you have read this Change in Status/Separation Agreement
and General Release, that MSC has advised you to review it with an attorney, and
that you execute this Agreement of your own free will and with full knowledge of
its meaning and consequences. You acknowledge and agree that you have been given
twenty-one (21) days from today within which to consider and sign this
Agreement. You further understand that you have seven (7) days following your
signing of this Agreement to revoke this Agreement and that the Agreement shall
not become effective or enforceable until the expiration of said seven (7) day
period.
Xxxxxx X. Xxxxx
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Entire Agreement
This Agreement constitutes the entire Agreement between MSC and you with regard
to the matters described herein, and shall not be modified or amended in any
manner except by a supplemental written agreement jointly executed by the
parties. Notwithstanding the foregoing, you acknowledge and agree that, to the
extent you have entered into an Agreement to Arbitrate Employment Disputes
("Arbitration Agreement") with MSC, such Arbitration Agreement shall remain in
full force and effect and shall continue to be binding upon you with respect to
any matters arising under this Agreement.
Xxxxx, if you have any questions, or wish to discuss these terms any further,
please contact me. Again, you will have twenty-one (21) days from this date to
acknowledge your agreement with the terms of this letter by signing your name
and filling in the date where indicated below. If you do not revoke your
acceptance of this Agreement within seven (7) days after you sign it, it will
become effecting and binding.
Sincerely,
/s/ Xxxxxxx X. Xxxxxxxx
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Xxxxxxx X. Xxxxxxxx
President and Chief Executive Officer
Acknowledged and Accepted:
/s/ Xxxxxx X. Xxxxx
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Xxxxxx X. Xxxxx
4/28/03
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Date
