TERMINATION BENEFITS AGREEMENT
This Termination Benefits Agreement ("Agreement") is entered into as
of the 20th day of December 1997, by and between Mansfield Plumbing Products,
Inc., a Delaware corporation ("Company") and Xxxxxx X. Xxxxxxxxx ("Employee").
WITNESSETH:
WHEREAS, Employee is a key employee of the Company;
WHEREAS, the Company considers that providing Employee with certain
employment termination benefits will operate as an incentive for Employee to
remain employed by the Company during the period set forth below that the
Company may undertake to negotiate a change in control or ownership of the
Company or its parent, Falcon Building Products, Inc. (Falcon);
WHEREAS, this Agreement is intended to provide benefits only in the
event of a change in control or ownership of the Company or Falcon prior to
December 10, 1999 (the "Expiration Date");
NOW THEREFORE, to induce Employee to remain employed by the Company
through the Expiration Date, and for other good and valuable consideration,
the receipt and sufficiency of which is hereby acknowledged, the Company and
Employee agree as follows:
1. DEFINITIONS.
(a) "Change in Control" shall mean the sale by the Company
or Falcon of all or substantially all of their assets
and business to a person or entity other than a Related
Person or the sale of fifty-one percent (51 %) or more
of the voting securities and capital stock of the
Company or Falcon to a person or entity other than a
Related Person. "Related Person" shall mean any person
or entity directly or indirectly owned and controlled by
Investcorp International, Inc. ("Investcorp").
(b) "Termination Date" shall mean the date of termination of
Employee's employment relationship with the Company.
(c) "Termination Payments" shall mean any payment or
distribution of compensation or benefits made pursuant
to Section 3 of this Agreement.
(d) "Termination With Cause" shall mean termination of Employee
by the Company for any of the following reasons:
(i) the failure of Employee to render services to the
Company in substantial accordance with the terms
of his employment, which failure amounts to gross
neglect of his duties to the Company;
(ii) any violation of Section 6 of this Agreement or
any employment agreement which Employee may have
with the Company;
(iii) taking any role in any buy-out of the Company or
Falcon without the approval of the Company's
majority shareholder; or
(iv) Employee's commission of any act of fraud, theft
or embezzlement against the Company.
(e) "Voluntary Termination" shall mean the voluntary
resignation by Employee of his employment with the
Company other than a voluntary resignation following
either:
(i) any reduction in compensation consisting of base
salary and incentive bonus;
(ii) a substantial diminution of his responsibilities;
or
(iii) a relocation by the Company of Employee's place
of employment outside a fifty (50) mile radius of
Employee's current place of employment.
2. TERMINATION OF EMPLOYEE. In the event of Employee's
termination of employment with the Company within two (2) years
immediately following the date on which there was a Change in
Control or ownership of the Company or Falcon, the Company
shall provide Employee with the Termination Payments outlined
in Section 3, unless the termination is for any of the
following reasons:
(a) Termination With Cause;
(b) Voluntary Termination;
(c) The death of the Employee. Nothing in this section shall
affect any entitlement of Employee's heirs to the benefits
of any life insurance plan; or
(d) Termination as a result of Employee's incapacity (i.e.,
if in the reasonable opinion of the Company, Employee is
prevented from properly performing his duties by reason
of any physical or mental incapacity for a period of
more than one hundred twenty (120) days, in the
aggregate, in any twelve (12) month period). Nothing in
this section shall affect Employee's rights under any
disability plan in which he is a participant.
3. TERMINATION PAYMENTS. In the event that Employee is entitled
to Termination Payments pursuant to the terms of Section 2:
(a) COMPENSATION. The Company shall pay Employee an amount
equal to two (2) years base salary plus par bonus as of
the Termination Date, without giving effect to any
reduction in base salary or incentive bonus prior to the
Termination Date; payable within thirty (30) days of the
Termination Date following the Change in Control.
(b) EMPLOYEE BENEFITS:
(i) VACATION. Any accrued vacation pay due but not
yet taken at the Termination Date shall be paid
to Employee within thirty (30) days following the
Termination Date.
(ii) HEALTH BENEFITS. If Employee participated in any
health benefit plan in effect immediately prior
to the Termination Date, and if Employee elects
to continue participating in such plan pursuant
to the terms of said plan and the Comprehensive
Omnibus Budget Reconciliation Act ("COBRA"), the
Company shall pay for the costs of Employee's
participation in such plan from the Termination
Date until the earlier of: (a) the date which is
twenty-four (24) months following the Termination
Date; or (b) the date of Employee's eligibility
in any health benefit plan offered by Employee's
new employer, if any. Employee shall notify the
Company in writing within thirty (30) days of any
new employment.
(iii) RETIREMENT AND PROFIT-SHARING PLANS.
Notwithstanding anything in this Agreement to the
contrary, Employee's rights in any retirement,
pension or profit-sharing plans offered by the
Company shall be governed by the rules of such
plans as well as by applicable law; provided,
however, that on the Termination Date, Employee
shall become fully vested in all pension and 401
(k) account balances.
(iv) OUTPLACEMENT ASSISTANCE. The Company will
provide Employee up to one year of employment
outplacement services with a nationally
recognized executive placement company.
4. AT-WILL EMPLOYMENT. The Company and Employee have, and will
continue to have, an at-will employment relationship. That is,
either party can terminate the employment relationship for any
reason at any time. Nothing contained in this Agreement shall
be interpreted to amend or alter this at-will employment
relationship.
5. LIMITATION OF PAYMENT. Notwithstanding anything in this
Agreement to the contrary, if receipt of the Termination
Payments would subject Employee to tax under Section 4999 of
the Internal Revenue Code of 1986, as amended, the Termination
Payments shall be "grossed up" to an amount that would allow
the Employee to receive the net after-tax amount he would have
received but for the application of said Section 4999.
6. CONTINUING OBLIGATIONS. In order to induce the Company to
enter into this Agreement, Employee hereby agrees that all
documents, records, techniques, business secrets and other
information which have come into his possession from time to
time during his continued employment by the Company or which
may come into his possession during his employment hereunder,
shall be deemed to be confidential and proprietary to the
Company, and Employee further agrees to retain in confidence
any confidential information known to him concerning the
Company and its subsidiaries and their respective businesses so
long as such information is not publicly disclosed. Employee
further agrees to cooperate fully as requested from time to
time by the controlling shareholder of the Company, the
Company's Board of Directors, or Company Management in
connection with any transaction involving the possible sale of
the Company or Falcon. Employee further agrees not to speak
about a possible sale of the Company or Falcon with or
otherwise respond to requests to or from any third parties
involving the possible sale of the Company or Falcon, unless
specifically authorized to do so by the Company or the
controlling shareholder of the Company. The obligations of
Employee under this Section 6 shall be in addition to, and
shall not limit, any other obligation of Employee to the
Company with respect to the matters set forth herein or
otherwise.
7. ASSIGNMENTS AND TRANSFERS. Employee agrees that he will not
assign, sell, transfer, delegate or otherwise dispose of,
whether voluntarily or involuntarily, or by operation of law,
any rights or obligations under this Agreement, nor shall
Employee's rights be subject to encumbrance or the claims of
creditors. Any purported assignment shall be null and void.
This Agreement shall inure to the benefit of and be enforceable
by Employee's personal or legal representatives, executors,
administrators, successors, heirs, distributees, devisees and
legatees. This Agreement shall be binding upon and shall inure
to the benefit of the
Company and its successors and assigns, and the Company shall
require any successor or assign to expressly assume and agree
to perform this Agreement in the same manner and to the same
extent that the Company would be required to perform it if no
such succession or assignment had taken place, except no
assumption shall be required if this Agreement is automatically
assumed by operation of law. The term "the Company" as used
herein shall include such successors and assigns. The term
"successors and assigns" as used herein shall include a
corporation or other entity acquiring at least 51 % of the
outstanding shares of the Company or Falcon or all or
substantially all of the assets and business of the Company or
Falcon.
8. NOTICES. For purposes of this Agreement, notices and all other
communications provided for herein shall be in writing and
shall be deemed to have been duly given and received when
delivered or mailed by United States registered or certified
mail, return receipt requested, postage prepaid, addressed to
the Company at:
Mansfield Plumbing Products, Inc.
0000 Xxxxxx Xxxxx, Xxxxx 000
Xxxxxxxx, Xxxx 00000
Attn: Chief Financial Officer
and to Employee at:
0000 Xxxxxx Xxxxx
Xxxxx Xxxxxx, Xxxx 00000-0000
or such address as either party may have furnished to the other
in writing in accordance herewith, except that notices of
change of address shall be effective only upon receipt.
9. GOVERNING LAW. The validity, interpretation, construction and
performance of this Agreement shall be governed by the laws of
the State of Ohio.
10. ENTIRE AGREEMENT. The terms of this Agreement are intended by
the parties to be the final expression of their agreement with
respect to Employee's termination benefits and may not be
contradicted by evidence of any prior or contemporaneous
Agreement.
11. AMENDMENTS: WAIVERS. This Agreement may not be modified,
amended, or terminated except by an instrument in writing,
signed by Employee and by a duly authorized representative of
the Company other than Employee. No failure to exercise and no
delay in exercising any right, remedy, or power hereunder shall
operate as a waiver thereof, nor shall any single or partial
exercise of any right, remedy, or power hereunder preclude any
other or further exercise thereof or the exercise of any other
right, remedy, or power provided herein or by law or in equity.
12. SEVERABILITY: ENFORCEMENT. If any provision of this Agreement,
or the application thereof to any person, place or
circumstance, shall be held by a court of competent
jurisdiction to be invalid, unenforceable, or void, the
remainder of this Agreement and such provisions as applied to
other persons, places, and circumstances shall remain in full
force and effect.
13. ARBITRATION. The parties agree to submit any dispute arising
under this Agreement to arbitration. Arbitration shall be by a
single arbitrator in the Chicago, Illinois area experienced in
the matters at issue selected by the Company and Employee in
accordance with the commercial arbitration rules of the
American Arbitration Association. The decision of the
arbitrator shall be final and binding as to any manner
submitted to him/her under this Agreement. All costs and
expenses incurred in connection with any such arbitration
proceeding shall be borne by the party against whom the
decision is rendered as provided by the arbitrator.
14. RELEASE.
(a) Employee, on behalf of himself, his heirs, executors,
legal representative, successors and assigns, hereby
fully and forever releases and discharges Investcorp,
Falcon, the Company, and their respective affiliates,
subsidiaries, parents, predecessors and successors, and
each of their officers, directors, trustees, employees,
agents and attorneys, past and present (the
"Releasees"), from any and all claims, demands or causes
of action, whether now known or unknown, which have
existed, which do exist, or which may exist in the
future, arising out of or relating in any way to
Employee's employment with the Company, his employment
compensation, his termination of employment or his
employment arrangement, the sale of the stock or assets
of the Company or Falcon and/or any other occurrence up
to and including the effective date of this Agreement,
except those claims statutorily precluded from waiver or
release by private parties and except those alleging
breach of this Agreement. Without in any way limiting
the generality of the foregoing language, this release
includes any claims for relief or causes of action under
the Age Discrimination in Employment Act, as amended, 29
U.S.C. Section 621, ET SEQ., and any other federal,
state or local statute, ordinance or regulation dealing
in any respect with discrimination in employment, and in
addition thereto, any claims under any Company severance
policy, practice or procedure, and any claims, demands
or actions brought on the basis of alleged wrongful or
retaliatory discharge and/or alleged breach of an
implied or explicit, written or oral employment
or other contract or covenant under the common law of
any state, including, but not limited to, Ohio.
(b) Employee further agrees not to directly or indirectly
pursue or initiate any action or legal proceeding of any
kind against the Releasees arising out of or related to
the claims released in Section 14 (a) above, or the sale
of the stock or assets of the Company or Falcon and also
waives any right to recover any relief as a result of
any such proceedings initiated on his behalf.
15. TERMINATION DATE. This Agreement shall be null and void in the
event that a Change in Control does not occur on or before the
Expiration Date.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered as of the day and year set forth above.
MANSFIELD PLUMBING PRODUCTS, INC.
a Delaware corporation
/s/ Xxx X. Xxxxx /s/ Xxxxxx X. Xxxxxxxxx
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Xxx X. Xxxxx Xxxxxx X. Xxxxxxxxx
Executive Vice President
