Separation Agreement and Release of Claims
This Agreement is entered into between Xxxx X. Xxxxx ("Xx.
Xxxxx") and Inland Paperboard and Packaging, Inc. (together with
its parent and affiliated entities, the "Company"). In
consideration of their mutual promises set forth below, the
parties agree to the following terms:
1. Separation Date. The parties agree that Xx. Xxxxx'x
employment with the Company will terminate effective with the
close of business on August 31, 2003 (the "Separation Date").
Between the time he receives this Agreement and the Separation
Date, Xx. Xxxxx shall continue to receive his full regular salary
and benefits. During that time Xx. Xxxxx will assist the Company
in the transition of management duties and responsibilities and
perform such other responsibilities as may be requested by
Company. On or before the Separation Date, Xx. Xxxxx shall
return to the Company all property of any nature belonging to the
Company except for the equipment described in Section 3.e hereof.
2. Certification of Voluntary Agreement. Xx. Xxxxx
acknowledges and agrees: (a) that his decision to sign this
Agreement is completely voluntary and not coerced; (b) that he is
not required to sign this Agreement, and that no one has
pressured him to do so; and (c) that he has consulted with
attorneys or other advisors about his decision to sign this
Agreement to the extent he wished to do so.
3. Enhanced Severance Pay and Benefits. In lieu of any right
to severance pay under normal Company policy, Xx. Xxxxx will
receive the following pay and benefits that are beyond anything
required under normal policy:
a. Lump Sum Severance Payment. Xx. Xxxxx will receive a lump
sum severance payment in the gross amount of four hundred twenty-
five thousand dollars ($425,000.00), which is equal to twelve
months of his regular base salary, less normal tax withholdings.
b. COBRA Payment. Xx. Xxxxx will receive an additional lump sum
payment in the gross amount that will produce a net after tax
payment of twelve thousand eight hundred ninety-one dollars and
seventy-two cents ($12,891.72), which represents the estimated
premiums at the current charge to continue his group family
medical and dental coverage at existing levels under the federal
law known as "COBRA" for one year. However, it will be Xx.
Xxxxx'x sole responsibility to apply for any COBRA continuation
benefits for himself and/or his family and to make the required
contributions on a timely basis.
c. Retirement. Xx. Xxxxx will be credited with benefits under
the Company's nonqualified supplemental executive retirement
plans (the "SERP") which provide a total combined retirement
benefit under all qualified defined benefit retirement plans
maintained or contributed to by the Company (including the plans
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maintained or contributed to by Xxxxxxx Container Corporation and
Inland Paperboard and Packaging, Inc.) and under the SERP
(together, the "Retirement Plans") equal to a monthly single life
annuity benefit of eleven thousand dollars ($11,000) assuming Xx.
Xxxxx retires August 31, 2003 (the "Retirement Benefit"). The
Retirement Benefit will be paid for the life of Xx. Xxxxx;
provided, however, that he may extend such payment beyond his
life by choosing one of the alternate payment forms available
under the Retirement Plans with the applicable adjustments
provided under the Retirement Plans for such extended payment
schedule. If Xx. Xxxxx chooses to begin drawing his benefit on
a date later than September 1, 2003, the Retirement Benefit will
be actuarially adjusted to reflect the postponed commencement of
the Retirement Benefit using the applicable adjustments provided
under the Retirement Plans.
d. Stock Plans. Xx. Xxxxx'x Temple-Inland Inc. stock options,
including any vested options, are hereby forfeited in their
entirety and Xx. Xxxxx shall have no further rights under the
Temple-Inland Inc. stock option plans or any stock option
agreements. Xx. Xxxxx'x eight thousand five hundred (8,500)
shares of Temple-Inland Inc. restricted stock will vest in full
on the Separation Date. Xx. Xxxxx shall have the right at his
election to receive such shares in kind, or to receive their fair
market value in cash on the Separation Date, in either case less
normal tax withholdings. The fair market value shall be
determined by averaging the highest sale price per share and the
lowest sale price per share for Temple-Inland Inc. common stock
on the New York Stock Exchange on the Separation Date.
e. Computer and Blackberry. Xx. Xxxxx shall have the right to
keep the Company personal computer and Blackberry handheld
wireless communication device ("Blackberry") he is currently
using; provided, however, that prior to the Separation Date he
will transfer to the Company all Company data and files stored on
such personal computer, the Blackberry, or in any other form and
further provided that after the Separation Date Xx. Xxxxx shall
be solely responsible for paying any access, telephone, or usage
fees for such devices.
Xx. Xxxxx will receive the payments described in (a) and (b)
above within seven (7) business days of the date he returns
this Agreement signed by him to Xxxxxxx Xxxxxx, or on the
Separation Date, whichever comes later. Xx. Xxxxx will
receive the shares or the cash described in item (d) above
within seven (7) days of notifying the Company of his choice
of payment form. If the Company has not received
instructions from Xx. Xxxxx by September 30, 2003, the
Company shall withhold shares to pay the tax withholdings
and send the balance of the shares in kind to Xx. Xxxxx
within seven (7) days after September 30, 2003.
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4. Xx. Xxxxx'x Release of Claims. In exchange for the
additional pay and benefits described above, Xx. Xxxxx hereby
waives and releases all claims (known and unknown) which he has
or might have against the Company, its officers, directors,
employees, agents, and parent or affiliate companies, arising out
of his employment with the Company or its termination. This
waiver and release of claims is full and complete, and includes
without limitation: (a) any claims of employment discrimination,
harassment, or wrongful termination arising under Title VII of
the 1964 Civil Rights Act, the Americans With Disabilities Act,
the Age Discrimination in Employment Act, or similar state or
local employment discrimination laws; (b) claims for breach of
contract, whether express or implied; (c) claims alleging tort or
other wrongful conduct under common law; and (d) claims for
additional compensation in any form, including salary, bonus or
incentive compensation, sick leave benefits, vacation benefits,
compensatory time, severance pay, or otherwise.
Xx. Xxxxx understands that he is releasing claims he may not
know about. This is his knowing and voluntary intent, even
though he recognizes that some day he might learn that facts
he currently believes to be true are untrue, and even though
he might then regret having signed this Agreement.
Nevertheless, he is assuming that risk and agrees that this
release shall remain effective in all respects in any such
case.
Notwithstanding the general terms of this release of claims,
it is agreed that the scope of this release does not waive
any of Xx. Xxxxx'x rights as a terminating employee to: (1)
convert any health or welfare benefits under an employee
benefit plan to the extent the plan allows conversion; or
(2) maintain his group health coverage in force as provided
by COBRA (if he so elects).
5. The Company's Release of Claims. The Company hereby waives
and releases all claims (known and unknown) that it has or might
have against Xx. Xxxxx arising out of his employment with the
Company or its termination. The Company further agrees to
indemnify Xx. Xxxxx for claims made against him in his capacity
as an officer, director, or employee of the Company to the
fullest extent permitted by the Company's charter and bylaws and
the laws of the applicable jurisdiction and to the same extent
Xx. Xxxxx would be indemnified if he were still a senior
executive officer of the Company; it being the intention of the
Company that Xx. Xxxxx receive no less indemnification at the
time(s) of any such claims than its then current senior executive
officers would receive at such time(s).
6. OWBPA Disclosure. With specific reference to compliance
with the requirements of the Older Workers Benefits Protection
Act (29 U.S.C. 626(f)), the Company advises Xx. Xxxxx that: (a)
this Agreement contains a release of claims under the Age
Discrimination in Employment Act, 29 U.S.C. 621 et seq.; (b)
he should consult with an attorney with respect to the matters
contained in this Agreement; (c) he has been given a period of at
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least twenty-one (21) days from his receipt of this Agreement to
decide whether to accept this offer, and may accept this offer at
any point during that time; and (d) he may revoke this Agreement
any time during a period of up to seven (7) days from the date he
tenders this signed Agreement to the Company. Once this 7-day
revocation period has expired, the release shall be final and
irrevocable.
7. Resignation as Officer. Xx. Xxxxx resigns his position as
President and Chief Executive Officer of Inland Paperboard and
Packaging, Inc. and any positions he holds with its affiliates
effective July 25, 2003.
8. No Admission of Fault. Nothing in this Agreement implies,
or is intended to imply, that the Company has acted improperly or
violated any laws related to Xx. Xxxxx'x employment. The parties
stipulate that the Company is entering into this Agreement in
order to avoid the costs and uncertainties of any potential
claims that Xx. Xxxxx may now or later believe to exist.
9. No Disparagement. Xx. Xxxxx shall not in any way disparage
the Company, its operations, management, products, customers, or
employees. The Company shall not in any way disparage Xx. Xxxxx.
With respect to both parties, this includes, without limitation,
verbal or written statements to third parties, public statements
in speeches or writings, and communications with the Company's
customers or competitors. These representations by Xx. Xxxxx and
the Company are a material inducement to each other to enter into
this Agreement and to pay or accept the separation and benefits
described above.
10. Confidential Information. Xx. Xxxxx promises not to disclose
any confidential information or trade secrets about the Company,
its services, or its customers that he learned while employed by
the Company, without prior specific approval from the Company.
11. No Future Employment. The separation of Xx. Xxxxx'x
employment with the Company is intended to be permanent, and he
agrees not to apply for or otherwise seek employment with the
Company, or its parent, subsidiaries, affiliates, successors or
assigns.
12. Complete Agreement. This Agreement contains all of the
terms, promises, representations, and understandings made between
the parties. Xx. Xxxxx agrees that no threats, promises,
representations, or other inducements have been made to him which
caused him to sign this Agreement, other than the representations
expressly set out in this Agreement.
13. Other Terms. The terms and conditions of this Agreement
shall be maintained in confidence by both parties, except to the
extent disclosure is required by law. This Agreement shall be
interpreted under the laws of the United States and the State of
Indiana. Any dispute arising out of the application,
interpretation, or enforcement of this Agreement, and any dispute
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involving a claim purportedly released herein, shall be submitted
under the Company's RESOLVE program applicable to employment
disputes. This Agreement shall be binding on each party's
successors and assigns.
INLAND PAPERBOARD AND
PACKAGING, INC.
/s/ Xxxx X. Xxxxx BY:/s/Xxxxxxx X. Xxxxxxx, XX
---------------------- -------------------------------
Xxxx X. Xxxxx Xxxxxxx X. Xxxxxxx, XX
TITLE: Chairman
DATED: August 15, 2003 DATED: August 13, 2003
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