EXHIBIT 10
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EXECUTION COPY
SEPARATION AGREEMENT
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SEPARATION AGREEMENT ("Agreement"), dated as of October 16,
2005 between Xxxxxx Rubbermaid Inc., a Delaware corporation (the
"Company"), and Xxxxxx Xxxxx, Xx. ("Executive"), a citizen of the
State of Maryland.
WHEREAS Executive has resigned from all of his positions
with the Company and its Board of Directors (the "Board") and any
affiliate of the Company and its board (the "Resignation"); and
WHEREAS the parties wish to document the terms and
conditions pertaining to the Resignation;
NOW, THEREFORE, in consideration of the mutual promises and
agreements set forth herein, and other good and valuable
consideration, the receipt of which are hereby acknowledged, the
Company and Executive hereby agree as follows:
Section 1. RESIGNATION
Executive hereby confirms his Resignation, effective as of
October 16, 2005 (the "Resignation Date"), from all of his positions
with the Company, the Board, any affiliate of the Company and all
boards of directors of such affiliates, and agrees to execute and
deliver any and all further documentation reasonably requested by the
Company in order to evidence and effect the Resignation.
Section 2. SEPARATION PAYMENTS
The Company shall pay Executive, subject to his compliance
with Sections 3, 5, 6, 7, 10 and 12 hereof, the following amounts:
(a) CASH SEVERANCE
Executive shall receive a total amount of cash equal to two
times his annual rate of salary immediately prior to the Resignation
Date (the "Cash Severance Amount"). The Company shall pay 25% of the
Cash Severance Amount to Executive on the first day of the seventh
month following the Resignation Date, and thereafter shall immediately
commence payment of the remainder of the Cash Severance Amount in
equal semi-monthly installments in accordance with the Company's
payroll procedures, and each such installment payment shall equal 1/48
of the Cash Severance Amount, until the Cash Severance Amount has been
paid out in full.
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(b) 2005 BONUS
Executive shall receive a 2005 annual bonus in an amount
equal to 120.6% of his annual rate of salary immediately prior to the
Resignation Date, to be payable on the eighth day following
Executive's execution of this Agreement.
(c) STOCK OPTIONS AND RESTRICTED STOCK
(i) Any options to purchase stock of the Company held by
Executive immediately prior to the Resignation Date shall
continue to vest in accordance with their normal vesting
schedules, until three years after the Resignation Date, as if
Executive had remained employed by the Company; provided that
such options may only be exercised during calendar year 2008 and
provided further that in the event of the occurrence of a change
in the ownership or effective control of the Company, or in the
ownership of a substantial portion of the assets of the Company,
as described in Section 409A(a)(2)(A)(v) of the Internal Revenue
Code of 1986, as amended (the "Code") and the regulations and
guidance thereunder (a "Change in Control") prior to 2008, the
options that would have become vested prior to the third
anniversary of the Resignation Date (including those previously
vested) shall only be exercisable on the date of the Change in
Control. Any options that would have remained unvested on the
third anniversary of the Resignation Date shall immediately be
cancelled and shall be of no further force and effect.
(ii) Restricted shares of stock of the Company held by
Executive immediately prior to the Resignation Date shall
continue to vest and become free of all restrictions in
accordance with their normal vesting schedules, as if Executive
had remained employed by the Company until the second anniversary
of the Resignation Date; provided that any such restricted shares
that would have vested prior to the second anniversary of the
Resignation Date shall become fully vested upon a Change in
Control that occurs prior to such second anniversary. Any
additional restricted shares not becoming vested pursuant to the
preceding sentence shall immediately be cancelled and shall be of
no further force and effect.
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(d) BENEFITS
(i) (A) Executive shall receive any and all benefits
accrued under any deferred compensation or qualified or non-
qualified pension plan in which he currently participates (other
than any severance plan) in accordance with, and subject to, the
terms thereof; provided that no such benefits shall be paid prior
to the first date on which they would not be subject to the tax
imposed by Section 409A of the Code; and provided further that
Executive's benefits under the Company's SERP will be paid on the
second anniversary of the Resignation Date if Executive complies
with the Sections of this Agreement set forth in the beginning of
Section 2 hereof through December 31, 2006.
(B) Executive shall receive, in addition, $775,000,
payable on the eighth day following Executive's execution of this
Agreement, as an additional retirement benefit.
(ii) For 24 months after the Resignation Date, Executive and
his spouse and eligible dependents shall continue to be covered
by medical reimbursement plans in which he participated
immediately prior to the Resignation Date, as if he had continued
to be an active employee of the Company, and the Company shall
continue to pay the costs of such coverage under such plans on
the same basis as is applicable to active employees covered
thereunder; provided that, if participation in any one or more of
such plans is not possible under the terms thereof, the Company
shall provide substantially identical benefits or, at Executive's
election, reimburse Executive for his cost of obtaining
comparable coverage from a third party insurer. Such coverage
shall cease if and when Executive obtains employment with another
employer during such 24-month period and becomes eligible for
medical coverage provided by his new employer. If at the end of
such 24-month period, Executive or his spouse or eligible
dependents are covered under any plan that is a group health plan
as defined in Title I, Part 6 of the Employee Retirement Income
Security Act of 1974 ("COBRA"), the last day of the 24-month
period shall be considered a "qualifying event" as such term is
defined in COBRA, Executive and his spouse and eligible
dependents shall be eligible for continued benefits pursuant to
COBRA, and Executive shall be responsible for paying the full
cost of such coverage.
(iii) Executive shall be entitled to payment for any
accrued but unused vacation in accordance with the Company's
policy in effect on the Resignation Date. Executive shall not be
entitled to receive any payments or other compensation
attributable to vacation he would have earned had his employment
continued thereafter, and Executive waives any right to receive
such compensation.
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(iv) The Company shall reimburse Executive for up to
$100,000 in outplacement expenses, upon submission by Executive
of documentation of such outplacement expenses.
(v) Executive shall be entitled to reimbursement for
reasonable business and fringe benefit expenses incurred by him
prior to the Resignation Date in accordance with Company policy
in effect on the Resignation Date; however, Executive shall not
be entitled to reimbursement for fringe benefit expenses incurred
after the Resignation Date, such as dues and expenses related to
club memberships, automobile telephones, expenses for
professional services and other similar perquisites, nor shall
Executive have use of Company aircraft after the Resignation
Date.
(vi) The Company shall, on the eighth day following
Executive's execution of this Agreement, cause Executive to
become the owner of the Company car, mobile phone and computer
(after removal of any Company-related information) that he
currently has use of.
Section 3. CONFIDENTIALITY, NON-COMPETITION AND NO-RAIDING
(a) EXECUTIVE ACKNOWLEDGES AND AGREES THAT:
(i) he has been employed by the Company as its Chief
Executive Officer ("CEO") and has been a member of the Company's
Board of Directors, and that, in his capacity as CEO, Executive
was responsible for overseeing and managing all of the Company's
domestic and international operations, and was entrusted with and
has had access to the unique, confidential and secret proprietary
business information and trade secrets, including but not limited
to the Company's business priorities and strategic plans,
information about customer relationships and the Company's
personnel, financial and marketing information (including but not
limited to information about costs, prices, profitability and
sales information not available outside the Company), secret and
confidential plans for and information about new products or
existing products, and initiatives to address the Company's
competition;
(ii) the Company and its subsidiaries, affiliates and
divisions will suffer substantial and irreparable damage which
will not be compensable through money damages if Executive should
enter into a Competitive Business (as hereinafter defined), or if
Executive should divulge secret and confidential information of
the Company acquired by Executive in the course of his employment
with the Company and service on its Board of Directors;
(iii) the provisions of this Agreement are reasonable and
necessary for the protection of Trade Secret (as hereinafter
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defined) information and the business of the Company and its
subsidiaries, affiliates, divisions and parent companies, and the
stability of their workforces.
(b) TRADE SECRETS AND CONFIDENTIALITY: Executive agrees
that he will not, at any time, so long as the pertinent information
remains as a Trade Secret, directly or indirectly use, divulge,
disclose or disseminate to or on behalf of any other person,
organization or entity, or on his own behalf, or otherwise employ any
Trade Secrets of the Company, its subsidiaries, affiliates, divisions
or parent companies, without the Company's advance and express written
consent.
(c) NON-COMPETITION AND NON-RAIDING OF EMPLOYEES. Between
the date hereof and the second anniversary of the Resignation Date,
Executive shall not, directly or indirectly, (i) render Competitive
Services (as hereinafter defined) to any Competitive Business; (ii)
enter into the employ of or render any services, in any executive,
managerial, sales, financial or strategic planning capacity, to any
Competitive Business; (iii) engage in any Competitive Business of the
Executive's own; (iv) solicit, induce, recruit, entice or cause
anyone, or assist any other person, firm, business, entity or
corporation in soliciting, inducing, recruiting, enticing or causing
anyone, to leave the employ of the Company, its subsidiaries,
affiliates or divisions, or (v) hire or employ any person employed by
the Company, its subsidiaries, affiliates or divisions as of the
Resignation Date, on behalf of himself or any other person, firm,
business, entity or corporation, provided, however, that the
provisions of subparagraphs (iv) and (v) do not apply to those persons
last employed by the Company in clerical or secretarial positions or
to those persons who have ceased to be employed by the Company and its
subsidiaries and affiliates more than six months before the occurrence
of any activity otherwise prohibited by subparagraphs (iv) or (v).
(d) DEFINITIONS. As used in this Agreement, (i)
"Competitive Services" means any and all services of the type that
Executive provided to or on behalf of the Company during the last
twenty-four (24) months of his employment with the Company, or
services that would reasonably be expected to relate to or make use of
any of the Company's Trade Secret information; (ii) "Competitive
Products" means any product that is substantially similar to, is the
functional equivalent of, or is intended to compete with, replace, or
displace any product or line of products developed, produced,
manufactured, marketed, branded or sold by the Company or its
subsidiaries or affiliates during Executive's last twenty-four (24)
months of employment with the Company, or which were planned or
developed in whole or in part by the Company or its subsidiaries or
affiliates, and of which Executive was aware, during such period;
provided that after the first anniversary of the Resignation Date,
"Competitive Products" shall be limited to any product that is
substantially similar to, is the functional equivalent of, or is
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intended to compete with, replace, or displace any product or line of
products developed, produced, manufactured, marketed, branded or sold
by the Company or its subsidiaries or affiliates under the Xxxxx or
Lenox brand or in its Xxxxxxx Brands Group; (iii) "Trade Secrets"
include all information as defined as trade secrets to the fullest
extent by the Maryland Trade Secrets Act, as amended; and
(iv) "Competitive Business" means any person, firm, business, entity
or corporation that manufactures or offers for sale, or has plans or
intentions to manufacturer or offer for sale, Competitive Products in
the United States and Canada.
(e) REASONABLENESS. Executive hereby acknowledges and
agrees that: (i) the restrictions provided in this Agreement are
reasonable in time and scope in light of the necessity of the
protection of the Trade Secrets and business of the Company; (ii) his
ability to work and earn a living will not be unreasonably restrained
by the application of these restrictions; and (iii) if a court
concludes that any of the restrictions in this Agreement are overbroad
or unenforceable for any reason, the court shall modify the relevant
provision to the least extent necessary and then enforce it as
modified.
(f) INJUNCTIVE AND OTHER RELIEF; SEPARABILITY OF REMEDY:
Executive recognizes and agrees that should he fail to comply with the
restrictions set forth herein, which restrictions are vital to the
protection of the Company's Trade Secret information and its business,
the Company will suffer irreparable injury and harm for which there is
no adequate remedy at law. Therefore, Executive agrees that in the
event of the breach or threatened breach by him of any of the terms
and conditions of this Section 3, the Company shall be entitled to
preliminary injunctive relief against Executive and any other relief
as may be awarded by a court having jurisdiction of the dispute. In
the event of a breach of the provisions of Sections 3, 5, 6, 7, 10 and
12 hereof by Executive, the Company shall further have the right to
cease making any payments, or providing other benefits or
consideration, under Section 2 to Executive, and all stock options and
unvested restricted stock awards as of the date of such breach shall
be forfeited by Executive. Each of these rights and remedies
enumerated in this Section 3 shall be independent of each other, and
shall be severally enforced, and such rights and remedies shall be in
addition to, and not in lieu of, any other rights or remedies
available to the Company in law or in equity.
Section 4. SETOFF. No payments or benefits payable to or
with respect to Executive pursuant to this Agreement shall be reduced
by any amount Executive may earn or receive from employment with
another employer or from any other source, except as expressly
provided in Section 2(d).
Section 5. NONDISPARAGEMENT. Executive agrees to act in a
professional manner and not make any disparaging or negative
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statements regarding the Company, its subsidiaries, affiliates,
divisions or parent companies or their officers, directors or
executives, including any such statements about the prospects of the
Company, its affiliates, subsidiaries or divisions. The Company
agrees not to make any disparaging or negative statements regarding
Executive.
Section 6. ONGOING ASSISTANCE. Between the date hereof and
the second anniversary of the Resignation Date, Executive shall, upon
reasonable notice, advise and assist the Company in preparing such
operational, financial or other reports or filings as the Company may
reasonably request, and to respond to inquiries concerning the
operations, finances and business of the Company and otherwise
cooperate with the Company and its affiliates as the Company shall
reasonably request. Executive also agrees to cooperate with the
Company at the Company's request in prosecuting or defending against
any litigation, complaints or claims against or involving the Company
or any of its subsidiaries, affiliates, divisions or parent companies
at any time in the future, including but not limited to providing
truthful information to the Company or truthful testimony in
appropriate circumstances. The Company shall pay Executive's
necessary travel costs and expenses in the event it requires Executive
to assist it under this paragraph.
Section 7. RELEASE. As a material inducement to the
Company to enter into this Agreement, Executive hereby irrevocably and
unconditionally releases, acquits and forever discharges the Company,
its successors, assigns, agents, directors, officers, executives,
representatives, subsidiaries, divisions, parent corporations and
affiliates, and all other persons acting by, through or in concert
with any of them (collectively, the "Releasees") from any and all
charges, complaints, claims, liabilities, obligations, promises,
agreements, actions, damages, expenses (including attorneys' fees and
costs actually incurred), or any rights of any and every kind or
nature, accrued or unaccrued, known or unknown, which Executive has or
claims to have arising out of facts and circumstances which have
occurred or existed prior to, or which are occurring and do exist as
of, the date of Executive's execution of this Agreement against each
or any of the Releasees. This release (the "Release") pertains to but
is in no way limited to all matters relating to or arising out of
Executive's employment and the cessation of his employment by the
Company and all claims for severance benefits or other payments which
are not express obligations of the Company under this Agreement, or
otherwise. The Release further pertains to, but is in no way limited
to, rights and claims under the Age Discrimination in Employment Act
of 1967, Title VII of the Civil Rights Act, as amended, the Americans
With Disabilities Act, the Family Medical Leave Act, and all other
state, local or municipal fair employment and discrimination laws, and
all claims under common law, whether based in tort or contract, law or
equity.
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This Agreement, however, is not intended to and does not
interfere with the Equal Employment Opportunity Commission's right to
enforce anti-discrimination laws or to seek relief that will benefit
the public and any victim of unlawful employment practices who have
not waived their claims. Therefore, by signing this Agreement,
Executive waives any right to personally recover against the Company,
but Executive is not prevented from filing a charge with, or
testifying, assisting, or participating in any proceeding brought by
the EEOC, concerning an alleged discriminatory practice of the
Company.
Section 8. SUCCESSORS AND ASSIGNS. This Agreement shall be
binding upon Executive and upon Executive's heirs, administrators,
representatives, executors and successors and shall inure to the
benefit of the Releasees and to their heirs, administrators,
representatives, executors, successors, and assigns. No interest of
Executive, his spouse or any other beneficiary under this Agreement,
or any right to receive any payment or distribution thereunder, shall
be subject to any sale, transfer, assignment, pledge, attachment,
garnishment or other alienation or encumbrance of any kind.
Section 9. BINDING EFFECT; REVOCATION; MODIFICATION. The
parties understand and agree that this Agreement is final and binding
and constitutes the complete and exclusive statement of the terms and
conditions relating to Executive's resignation, that this Agreement
supersedes all prior agreements and understandings (oral or written)
between Executive and the Releasees relating to Executive's
employment, termination of employment, or otherwise, including but not
limited to the Employment Security Agreement between the parties dated
as of November 10, 2004 (the "ESA"), that no representations or
commitments were made by the parties to induce this Agreement other
than as expressly set forth herein and that this Agreement is fully
understood by the parties. Executive further represents that
Executive has had the opportunity and time to consult with legal
counsel and other personal or financial advisors of his own choosing
concerning the provisions of this Agreement and that Executive has
been given twenty-one (21) days within which to execute this Agreement
and seven (7) days following that execution to revoke this Agreement.
To be effective, any such revocation must be in writing and actually
delivered no later than the close of business on the 7th day following
Executive's execution of this Agreement to the office of the Company's
General Counsel. No obligation upon the Company set forth herein
shall be effective, and no payment or other benefit shall be required
to be made or provide to Executive hereunder, any earlier than the 8th
day following Executive's execution of this Agreement. This Agreement
may not be modified or supplemented except by a subsequent written
agreement signed by the party against whom enforcement of the
modification is sought.
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Section 10. GOVERNING LAW; VENUE. The validity,
construction and enforceability of this Agreement shall be governed in
all respects by the laws of the State of Maryland, without regard to
its conflicts of laws rules. Executive and the Company agree that any
action relating to this Agreement may be commenced and maintained only
in the state or federal courts sitting in Maryland, and to exclusive
venue in Maryland.
Section 11. WAIVER; SEVERABILITY. No waiver by any party
at any time of any breach by any other party of, or compliance with,
any condition or provision of this Agreement to be performed by any
other party shall be deemed a waiver of any other provision of this
Agreement, or of any subsequent breach by such party of a provision of
this Agreement. If any of the provisions of this Agreement shall
otherwise contravene or be invalid under the laws of any state or
other jurisdiction where it is applicable but for such contravention
or invalidity, such contravention or invalidity shall not invalidate
all of the provisions of this Agreement, but rather this Agreement
shall be reformed and construed, insofar as the laws of that state or
jurisdiction are concerned, as not containing the provisions or
provisions, but only to the extent that they are contravening or are
invalid under the laws of that state or jurisdiction, and the rights
and obligations created hereby shall be reformed and construed and
enforced accordingly.
Section 12. RETURN OF PROPERTY TO THE COMPANY. All
memoranda, notes, lists, records and other documents or papers (and
all copies thereof), including items stored in computer memories or by
other means, made or compiled by Executive or made available to
Executive relating to the Company or its affiliates or its business,
are and shall remain the property of the Company, and either have been
or shall be delivered to the Company promptly upon the execution of
this Agreement.
Section 13. WITHHOLDING. The Company may withhold from any
amounts payable under this Agreement such federal, state and local
taxes as may be required to be withheld pursuant to applicable laws or
regulations.
Section 14. COUNTERPARTS. This Agreement may be executed
by either of the parties hereto in counterparts, each of which shall
be deemed to be an original, but all such counterparts shall together
constitute one and the same instrument.
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IN WITNESS WHEREOF, the parties hereto have executed this
Agreement on the date appearing next to their signatures.
Xxxxxx Rubbermaid Inc.
Date: November 22, 2005 By /s/ Xxxx X. Xxxxxxxxxxx
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Name: Xxxx X. Xxxxxxxxxxx
Title: Vice President -
General Counsel
Date: November 22, 2005 /s/ Xxxxxx Xxxxx, Xx.
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Xxxxxx Xxxxx, Xx.
